Exhibit 99.1

 

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Company Contact

John Iannone

Senior Vice President, Investor & Public Relations

WesBanco, Inc.

304-905-7021

WesBanco Announces Second Quarter 2019 Net Income

Wheeling, WV, July 23, 2019 – WesBanco, Inc. (“WesBanco”) (Nasdaq: WSBC), a diversified, multi-state bank holding company, today announced net income and related earnings per share for the three and six months ended June 30, 2019. Net income for the three months ended June 30, 2019 was $44.8 million, with diluted earnings per share of $0.82, compared to $33.2 million and $0.71 per diluted share, respectively, for the second quarter of 2018. For the six months ended June 30, 2019, net income was $85.2 million, or $1.56 per diluted share, compared to $66.7 million, or $1.47 per diluted share, for the 2018 period. Net income excluding after-tax merger-related expenses for the three months ended June 30, 2019, increased 19.9% year-over-year to $44.9 million, or $0.82 per diluted share as compared to $0.80 per diluted share in the prior year quarter, an increase of 2.6% (non-GAAP measures). On the same basis, net income for the six months ended June 30, 2019 increased 23.2% year-over-year to $87.7 million, or $1.60 per diluted share, up 1.9% when compared to $1.57 per diluted share in the prior year period (non-GAAP measures).

 

     For the Three Months Ended June 30,     For the Six Months Ended June 30,  
     2019     2018     2019     2018  

(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)

   $  44,878     $ 0.82     $  37,445     $ 0.80     $  87,670     $ 1.60     $  71,167     $ 1.57  

Less: After tax merger-related expenses

     (64     (0.00     (4,276     (0.09     (2,519     (0.04     (4,469     (0.10
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net income (GAAP)

   $ 44,814     $ 0.82     $ 33,169     $ 0.71     $ 85,151     $ 1.56     $ 66,698     $ 1.47  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

(1) 

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

On April 5, 2018, WesBanco consummated the merger with First Sentry Bancshares, Inc. (“FTSB”), a bank holding company headquartered in Huntington, WV with $0.7 billion in assets, excluding goodwill. In addition, on August 20, 2018, WesBanco consummated the merger with Farmers Capital Bank Corporation (“FFKT”), a bank holding company headquartered in Frankfort, KY with approximately $1.6 billion in assets, excluding goodwill. Financial results for both FTSB and FFKT have been included in WesBanco’s results from their respective merger consummation dates.

Financial and operational highlights:

 

   

Strong year-to-date returns on average assets and tangible equity of 1.37% and 16.01%, respectively, and 1.41% and 16.46%, when excluding merger-related expenses (non-GAAP measures)

 

   

Solid expense management demonstrated by a year-to-date efficiency ratio of 55.38% (non-GAAP measure)

 

   

Stable quarterly net interest margin on both a reported basis and when excluding purchase accounting accretion

 

   

Key credit quality metrics, including non-performing assets, past due loans, provision for credit losses, and net loan charge-offs, continue to remain strong

 

   

Continued improvement in sequential quarter loan growth in the mid-single digits (annualized)

 

   

Total year-over-year organic growth in non-interest bearing demand deposits was 4.0%, reflecting the core strength of our legacy footprint

“We are pleased with WesBanco’s performance during the second quarter of 2019 as we worked diligently to ensure a strong organization for our shareholders,” said Todd F. Clossin, President and Chief Executive Officer of WesBanco. “We continued to see stabilization across loan categories as we generated loan growth on a sequential quarter basis, saw strong production across our commercial loan categories, and our pipelines remain strong.”

Mr. Clossin added, “The successful execution of our growth and diversification plans has enabled WesBanco to transform into an emerging regional financial institution built upon a century-old trust business and 150-year old community bank. During the last three years, we have significantly diversified our institution into new, higher-growth markets with great demographics while maintaining a critical focus on expense management and credit quality. We remain well-positioned for continued success and are excited about our growth opportunities for the year.”


Balance Sheet

Portfolio loans of $7.7 billion, as of June 30, 2019, increased 13.9% when compared to the prior year period due to the acquisition of FFKT. Reflecting continued stabilization across loan categories, total portfolio loans increased approximately 1% when compared to both the first quarter of 2019 and the fourth quarter of 2018. Total deposits increased 13.4% year-over-year to $8.7 billion due to the FFKT acquisition.

Credit Quality

Our underlying credit fundamentals continue to be reflective of our strong legacy of credit and risk management. During the second quarter of 2019, our credit quality ratios remained strong as we balanced disciplined loan origination in the current environment with our prudent lending standards. As of June 30, 2019, while non-performing loans and non-performing assets remained relatively flat year-over-year on a dollar basis, they both decreased as a percentage of the portfolio. Criticized and classified loan balances increased year-over-year during the second quarter of 2019 to $114.2 million, or 1.48% of total portfolio loans, reflecting our normal loan grade review process post-acquisition and in conjunction with two downgraded relationships in our legacy portfolio, as reported last quarter. Reflecting the overall high quality of the loan portfolio, the provision for credit losses held steady as a percentage of the total loan portfolio, and annualized net loan charge-offs to average loans was five basis points.

Net Interest Margin and Income

The net interest margin for the second quarter of 2019 increased 24 basis points year-over-year to 3.67%. The net interest margin benefited from increases in the Federal Reserve Board’s target federal funds rate during 2018 and the higher margin on the acquired FFKT net assets, partially offset by higher funding costs as well as a flattening of the yield curve. The increase in the cost of interest bearing liabilities was primarily due to higher rates for interest bearing public funds, higher tier money market accounts, and Federal Home Loan Bank and other borrowings. Lastly, accretion from acquisitions benefited the second quarter net interest margin by 18 basis points, which included 3 basis points related to a prior acquisition impaired loan payment, as compared to 12 basis points in the prior year period.

Net interest income increased $16.1 million, or 19.6%, during the second quarter of 2019, as compared to the same quarter of 2018, due to a 11.5% increase in average total earning assets, primarily driven by the FFKT acquisition and related accretion from purchase accounting, as well as an overall higher net interest margin. For the six months ended June 30, 2019, net interest income increased $41.3 million, or 26.5%, due to higher average total earning assets and an overall higher net interest margin, as discussed for the three-month period comparison.

Non-Interest Income

For the second quarter of 2019, non-interest income of $31.2 million increased $7.7 million, or 33.1%, from the second quarter of 2018, driven by the FFKT acquisition and net securities gains. The associated larger customer deposit base and higher transaction volumes resulted in the year-over-year increases in electronic banking fees and service charges on deposits. Trust fees increased year-over-year primarily due to higher trust assets from the addition of FFKT’s trust business. Net securities gains reflects a $2.6 million gain from the sale of Visa Class B common stock in the current period, as compared to the prior year period. Other income increased $1.7 million primarily due to an increase in payment processing fee income and higher commercial customer loan swap income.

For the six months ended June 30, 2019, non-interest income increased $11.4 million, or 24.1%. The primary drivers of this increase were higher net securities gains, service charges on deposits, electronic banking fees, and trust fees, as discussed above, partially offset by lower bank-owned life insurance benefits due to mortality-related proceeds in the prior year period.

Non-Interest Expense

Total operating expenses continued to be well-controlled during both the three- and six-month periods ending June 30, 2019. The FFKT cost savings of 35% announced in April 2018 remain on track for 75% of the anticipated savings to be achieved during 2019, and 100% thereafter. Focused expense savings associated with the FFKT acquisition began after the February branch and data processing conversions, and the majority of the anticipated 2019 cost savings related to personnel have occurred by the end of the second quarter.

Excluding merger-related expenses, non-interest expense for the three months ending June 30, 2019 increased $13.7 million, or 23.6%, compared to the prior year period, reflecting the FFKT acquisition. This year-over-year increase is primarily due to higher salaries and wages, employee benefits, net occupancy, and equipment costs associated with additional staffing and financial center locations from the acquisition, as well as intangibles amortization. FDIC insurance expense increased $0.3 million, or 33.1%, year-over-year due to now being assessed as a large bank with more than $10 billion in total assets. On a similar basis, non-interest expense during the first half of 2019 increased $30.7 million, or 27.3%, compared to the prior year period, reflecting the acquisitions of FTSB and FFKT.

Capital

WesBanco continues to maintain strong regulatory capital ratios as 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. At June 30, 2019, Tier I leverage was 11.09%, Tier I Risk-Based capital was 15.39%, Total Risk-Based capital was 16.32%, and the Common Equity Tier 1 capital ratio (“CET 1”) was 13.83%. Tangible common equity also remained strong, increasing to 10.10% at period-end from 8.43% as of June 30, 2018.

 

2


Conference Call and Webcast

WesBanco will host a conference call to discuss the Company’s financial results for the second quarter of 2019, and the announced merger with Old Line Bancshares, Inc., at 10:00 a.m. ET on Wednesday, July 24, 2019. 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 10126868. The replay will begin at approximately 12:00 p.m. ET on July 24, and end at 12 a.m. ET on August 7. 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, 2018 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, 2019, 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 Old Line Bancshares, Inc. (“Old Line”) 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 Old Line may not be fully realized within the expected timeframes; disruption from the merger of WesBanco and Old Line 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; cyber-security breaches; 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.

Additional Information About the Merger and Where to Find It

On July 23, 2019, WesBanco and WesBanco Bank, Inc. (“WesBanco Bank”) entered into an Agreement and Plan of Merger with Old Line and Old Line Bank, Inc. (“Old Line Bank”), pursuant to which Old Line will be merged with and into WesBanco, with WesBanco being the surviving company (the “Merger”), and Old Line Bank will be merged with and into WesBanco Bank, with WesBanco Bank the surviving bank. In connection with the proposed Merger, WesBanco will file with the SEC a Registration Statement on Form S-4 that will include a Proxy Statement of Old Line and WesBanco and a Prospectus of WesBanco, as well as other relevant documents concerning the proposed transaction. SHAREHOLDERS OF WESBANCO, STOCKHOLDERS OF OLD LINE AND OTHER INTERESTED PARTIES ARE URGED TO READ THE REGISTRATION STATEMENT AND THE PROXY STATEMENT/PROSPECTUS REGARDING THE MERGER WHEN IT BECOMES AVAILABLE AND ANY OTHER RELEVANT DOCUMENTS FILED WITH THE SEC, AS WELL AS ANY AMENDMENTS OR SUPPLEMENTS TO THOSE DOCUMENTS, BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION. The Proxy Statement/Prospectus will be mailed to shareholders of WesBanco and stockholders of Old Line prior to the respective shareholder and stockholder meetings, which have not yet been scheduled. In addition, when the Registration Statement on Form S-4, which will include the Proxy Statements/Prospectus, and other related documents are filed by WesBanco with the SEC, they may be obtained for free at the SEC’s website at http://www.sec.gov, and from either WesBanco’s or Old Line’s website at http://www.wesbanco.com or http://www.oldlinebank.com, respectively.

 

3


Participants in the Solicitation

WesBanco and Old Line and their respective executive officers and directors may be deemed to be participants in the solicitation of proxies from the shareholders of WesBanco and the stockholders of Old Line in connection with the proposed Merger. Information about the directors and executive officers of WesBanco is set forth in the proxy statement for WesBanco’s 2019 annual meeting of shareholders, as filed with the SEC on March 13, 2019 and as supplemented on April 5, 2019. Information about the directors and executive officers of Old Line is set forth in the proxy statement for Old Line’s 2019 annual meeting of stockholders, as filed with the SEC on April 26, 2019. Information about any other persons who may, under the rules of the SEC, be considered participants in the solicitation of WesBanco shareholders or Old Line stockholders in connection with the proposed Merger will be included in the Proxy Statement/Prospectus. You can obtain free copies of these documents from the SEC, WesBanco or Old Line using the website information above. This communication does not constitute an offer to sell or the solicitation of an offer to buy any securities, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation, or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction.

WESBANCO SHAREHOLDERS AND OLD LINE STOCKHOLDERS ARE URGED TO READ THE PROXY STATEMENT/PROSPECTUS CAREFULLY WHEN IT BECOMES AVAILABLE BEFORE MAKING ANY VOTING OR INVESTMENT DECISIONS WITH RESPECT TO THE PROPOSED MERGER.

About WesBanco, Inc.

Founded in 1870, WesBanco, Inc. (www.wesbanco.com) is a multi-state, bank holding company with total assets of approximately $12.5 billion (as of June 30, 2019). 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 $4.5 billion of assets under management (as of June 30, 2019), and serves as registered investment advisor to a proprietary mutual fund family, the WesMark Funds. WesBanco’s banking subsidiary, WesBanco Bank, Inc., operates 199 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.

 

4


WESBANCO, INC.

Consolidated Selected Financial Highlights

 

(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,  
     2019      2018      % Change     2019      2018      % Change  

Interest and dividend income

                

Loans, including fees

   $ 96,415      $ 78,538        22.8     $ 191,917      $ 147,671        30.0  

Interest and dividends on securities:

                

Taxable

     16,444        14,194        15.9       33,175        25,738        28.9  

Tax-exempt

     5,142        5,055        1.7       10,684        9,890        8.0  
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

    

 

 

 

Total interest and dividends on securities

     21,586        19,249        12.1       43,859        35,628        23.1  
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

    

 

 

 

Other interest income

     1,542        1,101        40.1       2,820        1,904        48.1  
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

    

 

 

 

Total interest and dividend income

     119,543        98,888        20.9       238,596        185,203        28.8  
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

    

 

 

 

Interest expense

                

Interest bearing demand deposits

     4,314        3,150        37.0       8,259        5,673        45.6  

Money market deposits

     2,009        1,093        83.8       3,908        1,972        98.2  

Savings deposits

     678        227        198.7       1,200        416        188.5  

Certificates of deposit

     4,098        2,977        37.7       8,001        5,513        45.1  
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

    

 

 

 

Total interest expense on deposits

     11,099        7,447        49.0       21,368        13,574        57.4  

Federal Home Loan Bank borrowings

     6,287        5,953        5.6       12,624        10,451        20.8  

Other short-term borrowings

     1,483        973        52.4       3,039        1,532        98.4  

Subordinated debt and junior subordinated debt

     2,214        2,168        2.1       4,743        4,110        15.4  
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

    

 

 

 

Total interest expense

     21,083        16,541        27.5       41,774        29,667        40.8  
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

    

 

 

 

Net interest income

     98,460        82,347        19.6       196,822        155,536        26.5  

Provision for credit losses

     2,747        1,708        60.8       5,254        3,876        35.6  
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

    

 

 

 

Net interest income after provision for credit losses

     95,713        80,639        18.7       191,568        151,660        26.3  
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

    

 

 

 

Non-interest income

                

Trust fees

     6,339        5,752        10.2       13,454        12,255        9.8  

Service charges on deposits

     6,197        5,146        20.4       12,747        9,969        27.9  

Electronic banking fees

     7,154        5,728        24.9       13,046        10,558        23.6  

Net securities brokerage revenue

     1,973        1,809        9.1       3,833        3,479        10.2  

Bank-owned life insurance

     1,340        1,128        18.8       2,659        3,884        (31.5

Mortgage banking income

     1,618        1,670        (3.1     2,674        2,776        (3.7

Net securities gains

     2,909        358        712.6       3,566        319        1,017.9  

Net gain on other real estate owned and other assets

     376        229        64.2       512        491        4.3  

Other income

     3,250        1,588        104.7       6,438        3,760        71.2  
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

    

 

 

 

Total non-interest income

     31,156        23,408        33.1       58,929        47,491        24.1  
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

    

 

 

 

Non-interest expense

                

Salaries and wages

     31,646        26,872        17.8       62,585        51,878        20.6  

Employee benefits

     9,705        7,965        21.8       19,694        14,877        32.4  

Net occupancy

     5,385        4,103        31.2       10,951        8,759        25.0  

Equipment

     4,818        4,095        17.7       9,651        8,044        20.0  

Marketing

     1,254        1,405        (10.7     2,497        2,521        (1.0

FDIC insurance

     1,155        868        33.1       2,508        1,526        64.4  

Amortization of intangible assets

     2,465        1,312        87.9       4,978        2,397        107.7  

Restructuring and merger-related expense

     81        5,412        (98.5     3,188        5,657        (43.6

Other operating expenses

     15,443        11,511        34.2       30,333        22,455        35.1  
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

    

 

 

 

Total non-interest expense

     71,952        63,543        13.2       146,385        118,114        23.9  
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

    

 

 

 

Income before provision for income taxes

     54,917        40,504        35.6       104,112        81,037        28.5  

Provision for income taxes

     10,103        7,335        37.7       18,961        14,339        32.2  
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

    

 

 

 

Net Income

   $ 44,814      $ 33,169        35.1     $ 85,151      $ 66,698        27.7  
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

    

 

 

 

Taxable equivalent net interest income

   $ 99,827      $ 83,691        19.3     $ 199,662      $ 158,165        26.2  

Per common share data

                

Net income per common share - basic

   $ 0.82      $ 0.71        15.5     $ 1.56      $ 1.47        6.1  

Net income per common share - diluted

     0.82        0.71        15.5       1.56        1.47        6.1  

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

     0.82        0.80        2.5       1.60        1.57        1.9  

Dividends declared

     0.31        0.29        6.9       0.62        0.58        6.9  

Book value (period end)

     37.92        32.68        16.0       37.92        32.68        16.0  

Tangible book value (period end) (1)

     21.40        18.59        15.1       21.40        18.59        15.1  

Average common shares outstanding - basic

     54,628,029        46,498,305        17.5       54,613,346        45,281,264        20.6  

Average common shares outstanding - diluted

     54,773,521        46,639,780        17.4       54,724,209        45,417,010        20.5  

Period end common shares outstanding

     54,697,199        46,643,250        17.3       54,697,199        46,643,250        17.3  

 

(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.

 

5


WESBANCO, INC.

Consolidated Selected Financial Highlights

 

(unaudited, dollars in thousands)

Selected ratios

 

     For the Six Months Ended
June 30,
 
     2019     2018     %
Change
 

Return on average assets

     1.37     1.29     6.20

Return on average assets, excluding after-tax merger-related expenses

     1.41       1.37       2.92  

Return on average equity

     8.47       9.22       (8.13

Return on average equity, excluding after-tax merger-related expenses

     8.72       9.83       (11.29

Return on average tangible equity (1)

     16.01       16.46       (2.73

Return on average tangible equity, excluding after-tax merger-related expenses

     16.46       17.53       (6.10

Yield on earning assets (2)

     4.45       4.05       9.88  

Cost of interest bearing liabilities

     1.07       0.86       24.42  

Net interest spread (2)

     3.38       3.19       5.96  

Net interest margin (2)

     3.68       3.41       7.92  

Efficiency (1) (2)

     55.38       54.68       1.28  

Average loans to average deposits

     87.18       88.68       (1.69

Annualized net loan charge-offs/average loans

     0.06       0.05       20.00  

Effective income tax rate

     18.21       17.69       2.94  

 

     For the Quarter Ended  
     June 30,     Mar. 31,     Dec. 31,     Sept. 30,     June 30,  
     2019     2019     2018     2018     2018  

Return on average assets

     1.44     1.31     1.39     1.10     1.22

Return on average assets, excluding after-tax merger-related expenses

     1.44       1.39       1.42       1.39       1.38  

Return on average equity

     8.77       8.17       8.94       7.50       8.77  

Return on average equity, excluding after-tax merger-related expenses

     8.78       8.67       9.16       9.47       9.90  

Return on average tangible equity (1)

     16.35       15.65       17.67       14.25       15.87  

Return on average tangible equity, excluding after-tax merger-related expenses

     16.38       16.56       18.09       17.85       17.85  

Yield on earning assets (2)

     4.45       4.45       4.42       4.21       4.11  

Cost of interest bearing liabilities

     1.08       1.06       0.97       0.95       0.91  

Net interest spread (2)

     3.37       3.39       3.45       3.26       3.20  

Net interest margin (2)

     3.67       3.68       3.72       3.50       3.43  

Efficiency (1) (2)

     54.87       55.89       53.62       55.55       54.28  

Average loans to average deposits

     87.35       87.01       85.94       87.56       88.15  

Annualized net loan charge-offs (recoveries)/average loans

     0.05       0.07       0.14       (0.02     0.03  

Effective income tax rate

     18.40       18.01       19.37       16.71       18.11  

Trust assets, market value at period end

   $ 4,544,103     $ 4,514,013     $ 4,269,961     $ 4,743,894     $ 4,044,207  

 

(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.

 

6


WESBANCO, INC.

Consolidated Selected Financial Highlights

 

(unaudited, dollars in thousands, except shares)

 

                       % Change  
     June 30,           December 31,     December 31, 2018  
     2019     2018     % Change     2018     to March 31, 2019  

Balance sheets

          

Assets

          

Cash and due from banks

   $ 157,965     $ 101,905       55.0     $ 124,650       26.7  

Due from banks - interest bearing

     36,390       53,654       (32.2     44,536       (18.3

Securities:

          

Equity securities, at fair value

     11,817       13,494       (12.4     11,737       0.7  

Available-for-sale debt securities, at fair value

     2,129,284       1,796,571       18.5       2,114,129       0.7  

Held-to-maturity debt securities (fair values of $921,534; $1,016,111 and $1,020,743, respectively)

     900,605       1,019,746       (11.7     1,020,934       (11.8
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total securities

     3,041,706       2,829,811       7.5       3,146,800       (3.3
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Loans held for sale

     18,649       12,053       54.7       8,994       107.3  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Portfolio loans:

          

Commercial real estate

     3,877,633       3,189,335       21.6       3,853,695       0.6  

Commercial and industrial

     1,300,577       1,294,488       0.5       1,265,460       2.8  

Residential real estate

     1,633,613       1,450,829       12.6       1,611,607       1.4  

Home equity

     590,303       535,653       10.2       599,331       (1.5

Consumer

     335,728       322,594       4.1       326,188       2.9  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total portfolio loans, net of unearned income

     7,737,854       6,792,899       13.9       7,656,281       1.1  

Allowance for loan losses

     (50,859     (47,638     (6.8     (48,948     (3.9
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net portfolio loans

     7,686,995       6,745,261       14.0       7,607,333       1.0  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Premises and equipment, net

     179,866       131,502       36.8       166,925       7.8  

Accrued interest receivable

     38,450       33,868       13.5       38,853       (1.0

Goodwill and other intangible assets, net

     914,678       661,616       38.2       918,850       (0.5

Bank-owned life insurance

     227,976       191,701       18.9       225,317       1.2  

Other assets

     191,978       185,213       3.7       176,374       8.8  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total Assets

   $ 12,494,653     $ 10,946,584       14.1     $ 12,458,632       0.3  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Liabilities

          

Deposits:

          

Non-interest bearing demand

   $ 2,481,065     $ 2,046,537       21.2     $ 2,441,041       1.6  

Interest bearing demand

     2,079,795       1,809,140       15.0       2,146,508       (3.1

Money market

     1,098,917       1,051,043       4.6       1,142,925       (3.9

Savings deposits

     1,670,035       1,385,356       20.5       1,645,549       1.5  

Certificates of deposit

     1,365,116       1,376,528       (0.8     1,455,610       (6.2
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total deposits

     8,694,928       7,668,604       13.4       8,831,633       (1.5
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Federal Home Loan Bank borrowings

     1,121,283       1,248,406       (10.2     1,054,174       6.4  

Other short-term borrowings

     296,148       258,067       14.8       290,522       1.9  

Subordinated debt and junior subordinated debt

     156,534       165,420       (5.4     189,842       (17.5
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total borrowings

     1,573,965       1,671,893       (5.9     1,534,538       2.6  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Accrued interest payable

     6,559       4,417       48.5       4,627       41.8  

Other liabilities

     145,085       77,564       87.1       109,007       33.1  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total Liabilities

     10,420,537       9,422,478       10.6       10,479,805       (0.6
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Shareholders’ Equity

          

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

     —         —         —         —         —    

Common stock, $2.0833 par value; 100,000,000 shares authorized in 2019 and 2018, respectively; 54,697,251, 44,655,012 and 54,604,294 shares issued, respectively; 54,697,199, 46,643,250 and 54,598,134 shares outstanding, respectively

     113,952       97,197       17.2       113,758       0.2  

Capital surplus

     1,168,212       789,038       48.1       1,166,701       0.1  

Retained earnings

     788,900       692,820       13.9       737,581       7.0  

Treasury stock ( 52, 11,762 and 6,160 shares - at cost, respectively)

     (2     (555     99.6       (274     99.3  

Accumulated other comprehensive income/(loss)

     4,113       (53,352     107.7       (37,871     110.9  

Deferred benefits for directors

     (1,059     (1,042     (1.6     (1,068     0.8  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total Shareholders’ Equity

     2,074,116       1,524,106       36.1       1,978,827       4.8  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total Liabilities and Shareholders’ Equity

   $ 12,494,653     $ 10,946,584       14.1     $ 12,458,632       0.3  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

7


WESBANCO, INC.

Consolidated Selected Financial Highlights

 

(unaudited, dollars in thousands, except shares)

 

     June 30,     March 31,        
     2019     2019     % Change  

Balance sheets

      

Assets

      

Cash and due from banks

   $ 157,965     $ 159,097       (0.7

Due from banks - interest bearing

     36,390       177,797       (79.5

Securities:

      

Equity securities, at fair value

     11,817       11,978       (1.3

Available-for-sale debt securities, at fair value

     2,129,284       2,145,089       (0.7

Held-to-maturity debt securities (fair values of $921,534 and $948,641, respectively)

     900,605       936,484       (3.8
  

 

 

   

 

 

   

 

 

 

Total securities

     3,041,706       3,093,551       (1.7
  

 

 

   

 

 

   

 

 

 

Loans held for sale

     18,649       8,358       123.1  
  

 

 

   

 

 

   

 

 

 

Portfolio Loans:

      

Commercial real estate

     3,877,633       3,842,408       0.9  

Commercial and industrial

     1,300,577       1,274,992       2.0  

Residential real estate

     1,633,613       1,628,067       0.3  

Home equity

     590,303       590,462       (0.0

Consumer

     335,728       330,152       1.7  
  

 

 

   

 

 

   

 

 

 

Total portfolio loans, net of unearned income

     7,737,854       7,666,081       0.9  

Allowance for loan losses

     (50,859     (48,866     (4.1
  

 

 

   

 

 

   

 

 

 

Net portfolio loans

     7,686,995       7,617,215       0.9  
  

 

 

   

 

 

   

 

 

 

Premises and equipment, net

     179,866       180,651       (0.4

Accrued interest receivable

     38,450       39,662       (3.1

Goodwill and other intangible assets, net

     914,678       915,597       (0.1

Bank-owned life insurance

     227,976       226,636       0.6  

Other assets

     191,978       182,844       5.0  
  

 

 

   

 

 

   

 

 

 

Total Assets

   $ 12,494,653     $ 12,601,408       (0.8
  

 

 

   

 

 

   

 

 

 

Liabilities

      

Deposits:

      

Non-interest bearing demand

   $ 2,481,065     $ 2,511,140       (1.2

Interest bearing demand

     2,079,795       2,159,654       (3.7

Money market

     1,098,917       1,148,295       (4.3

Savings deposits

     1,670,035       1,672,967       (0.2

Certificates of deposit

     1,365,116       1,424,275       (4.2
  

 

 

   

 

 

   

 

 

 

Total deposits

     8,694,928       8,916,331       (2.5
  

 

 

   

 

 

   

 

 

 

Federal Home Loan Bank borrowings

     1,121,283       1,031,796       8.7  

Other short-term borrowings

     296,148       301,547       (1.8

Subordinated debt and junior subordinated debt

     156,534       179,632       (12.9
  

 

 

   

 

 

   

 

 

 

Total borrowings

     1,573,965       1,512,975       4.0  
  

 

 

   

 

 

   

 

 

 

Accrued interest payable

     6,559       6,030       8.8  

Other liabilities

     145,085       142,933       1.5  
  

 

 

   

 

 

   

 

 

 

Total liabilities

     10,420,537       10,578,269       (1.5
  

 

 

   

 

 

   

 

 

 

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; 54,697,251 and 54,604,294 shares issued, respectively; 54,697,199 and 54,599,127 shares outstanding, respectively

     113,952       113,758       0.2  

Capital surplus

     1,168,212       1,167,761       0.0  

Retained earnings

     788,900       761,002       3.7  

Treasury stock (52 and 5,167 shares - at cost)

     (2     (229     99.2  

Accumulated other comprehensive income / (loss)

     4,113       (18,098     122.7  

Deferred benefits for directors

     (1,059     (1,055     0.4  
  

 

 

   

 

 

   

 

 

 

Total Shareholders’ Equity

     2,074,116       2,023,139       2.5  
  

 

 

   

 

 

   

 

 

 

Total Liabilities and Shareholders’ Equity

   $ 12,494,653     $ 12,601,408       (0.8
  

 

 

   

 

 

   

 

 

 

 

8


WESBANCO, INC.

Consolidated Selected Financial Highlights

 

(unaudited, dollars in thousands)

 

     Three Months Ended June 30,     Six Months Ended June 30,  
     2019     2018     2019     2018  
     Average
Balance
     Average
Rate
    Average
Balance
     Average
Rate
    Average
Balance
     Average
Rate
    Average
Balance
     Average
Rate
 

Average balance sheet and

net interest margin analysis

                    

Assets

                    

Due from banks - interest bearing

   $ 72,563        3.46   $ 53,896        2.09   $ 74,774        2.55   $ 31,436        2.08

Loans, net of unearned income (1)

     7,700,355        5.02       6,785,550        4.64       7,680,062        5.04       6,563,782        4.54  

Securities: (2)

                    

Taxable

     2,336,099        2.82       2,128,446        2.67       2,344,929        2.83       1,959,828        2.63  

Tax-exempt (3)

     741,371        3.51       750,138        3.41       775,845        3.49       733,970        3.41  
  

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

 

Total securities

     3,077,470        2.98       2,878,584        3.05       3,120,774        2.99       2,693,798        2.84  

Other earning assets

     50,555        7.26       57,259        5.72       51,330        7.28       53,843        5.86  
  

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

 

Total earning assets (3)

     10,900,943        4.45     9,775,289        4.11     10,926,940        4.45     9,342,859        4.05
  

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

 

Other assets

     1,588,720          1,143,442          1,572,988          1,115,743     
  

 

 

      

 

 

      

 

 

      

 

 

    

Total Assets

   $ 12,489,663        $ 10,918,731        $ 12,499,928        $ 10,458,602     
  

 

 

      

 

 

      

 

 

      

 

 

    

Liabilities and Shareholders’ Equity

                    

Interest bearing demand deposits

   $ 2,139,372        0.81   $ 1,849,035        0.68   $ 2,134,514        0.78   $ 1,773,813        0.64

Money market accounts

     1,116,124        0.72       1,035,567        0.42       1,135,237        0.69       1,020,486        0.39  

Savings deposits

     1,676,477        0.16       1,367,193        0.07       1,668,160        0.15       1,327,875        0.06  

Certificates of deposit

     1,397,167        1.18       1,415,259        0.84       1,417,703        1.14       1,328,724        0.84  
  

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

 

Total interest bearing deposits

     6,329,140        0.70       5,667,054        0.53       6,355,614        0.68       5,450,898        0.50  

Federal Home Loan Bank borrowings

     1,008,027        2.50       1,180,939        2.02       1,030,396        2.47       1,109,586        1.90  

Other borrowings

     320,269        1.86       272,208        1.43       324,033        1.89       238,707        1.29  

Subordinated debt and junior subordinated debt

     164,108        5.41       172,972        5.03       176,746        5.41       168,677        4.91  
  

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

 

Total interest bearing liabilities

     7,821,544        1.08     7,293,173        0.91     7,886,789        1.07     6,967,868        0.86
  

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

 

Non-interest bearing demand deposits

     2,486,710          2,030,649          2,453,770          1,950,581     

Other liabilities

     131,219          77,873          132,657          80,681     

Shareholders’ equity

     2,050,190          1,517,036          2,026,712          1,459,472     
  

 

 

      

 

 

      

 

 

      

 

 

    

Total Liabilities and Shareholders’ Equity

   $ 12,489,663        $ 10,918,731        $ 12,499,928        $ 10,458,602     
  

 

 

      

 

 

      

 

 

      

 

 

    

Taxable equivalent net interest spread

        3.37        3.20        3.38        3.19
     

 

 

      

 

 

      

 

 

      

 

 

 

Taxable equivalent net interest margin

        3.67        3.43        3.68        3.41
     

 

 

      

 

 

      

 

 

      

 

 

 

 

(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 $0.4 million and $0.7million for the three months ended June 30, 2019 and 2018 and $0.9 million and $1.3 million for the six months ended June 30, 2019 and 2018, respectively.

Additionally, loan accretion included in interest income on loans acquired from prior acquisitions was $4.7 million and $2.2 million for the three months ended June 30, 2019 and 2018 and $9.6 million and $3.4 million for the six months ended June 30, 2019 and 2018, respectively.

Accretion on interest bearing liabilities acquired from the prior acquisitions was $0.3 million and $0.7 million for the three months ended June 30, 2019 and 2018, respectively, and $0.7 million and $0.9 million for the six months ended June 30, 2019 and 2018, 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 21% for each period presented.

 

9


WESBANCO, INC.

Consolidated Selected Financial Highlights

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

 

     Quarter Ended  
     June 30,
2019
     Mar. 31,
2019
     Dec. 31,
2018
    Sept. 30,
2018
     June 30,
2018
 

Statement of Income

             

Interest and dividend income

             

Loans, including fees

   $ 96,415      $ 95,502      $ 97,685     $ 86,605      $ 78,538  

Interest and dividends on securities:

             

Taxable

     16,444        16,733        16,196       14,964        14,194  

Tax-exempt

     5,142        5,541        5,562       5,326        5,055  
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

 

Total interest and dividends on securities

     21,586        22,274        21,758       20,290        19,249  
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

 

Other interest income

     1,542        1,277        1,944       1,498        1,101  
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

 

Total interest and dividend income

     119,543        119,053        121,387       108,393        98,888  
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

 

Interest expense

             

Interest bearing demand deposits

     4,314        3,946        4,000       3,501        3,150  

Money market deposits

     2,009        1,899        1,683       1,360        1,093  

Savings deposits

     678        522        452       352        227  

Certificates of deposit

     4,098        3,903        3,662       3,276        2,977  
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

 

Total interest expense on deposits

     11,099        10,270        9,797       8,489        7,447  
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

 

Federal Home Loan Bank borrowings

     6,287        6,337        6,191       6,691        5,953  

Other short-term borrowings

     1,483        1,556        1,221       965        973  

Subordinated debt and junior subordinated debt

     2,214        2,529        2,411       2,315        2,168  
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

 

Total interest expense

     21,083        20,692        19,620       18,460        16,541  
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

 

Net interest income

     98,460        98,361        101,767       89,933        82,347  

Provision for credit losses

     2,747        2,507        2,854       1,035        1,708  
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

 

Net interest income after provision for credit losses

     95,713        95,854        98,913       88,898        80,639  
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

 

Non-interest income

             

Trust fees

     6,339        7,115        6,103       6,265        5,752  

Service charges on deposits

     6,197        6,549        7,387       6,313        5,146  

Electronic banking fees

     7,154        5,892        6,604       6,139        5,728  

Net securities brokerage revenue

     1,973        1,860        1,871       1,836        1,809  

Bank-owned life insurance

     1,340        1,319        1,312       1,232        1,128  

Mortgage banking income

     1,618        1,056        1,543       1,521        1,670  

Net securities gains/(losses)

     2,909        657        (1,303     84        358  

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

     376        136        (117     150        229  

Other income

     3,250        3,189        3,161       2,684        1,588  
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

 

Total non-interest income

     31,156        27,773        26,561       26,224        23,408  
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

 

Non-interest expense

             

Salaries and wages

     31,646        30,940        32,389       30,335        26,872  

Employee benefits

     9,705        9,989        7,298       7,905        7,965  

Net occupancy

     5,385        5,566        5,455       4,957        4,103  

Equipment

     4,818        4,833        4,667       4,488        4,095  

Marketing

     1,254        1,243        1,402       1,446        1,405  

FDIC insurance

     1,155        1,353        927       789        868  

Amortization of intangible assets

     2,465        2,514        2,762       1,821        1,312  

Restructuring and merger-related expense

     81        3,107        1,389       10,811        5,412  

Other operating expenses

     15,443        14,887        14,701       13,568        11,511  
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

 

Total non-interest expense

     71,952        74,432        70,990       76,120        63,543  
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

 

Income before provision for income taxes

     54,917        49,195        54,484       39,002        40,504  

Provision for income taxes

     10,103        8,858        10,556       6,516        7,335  
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

 

Net Income

   $ 44,814      $ 40,337      $ 43,928     $ 32,486      $ 33,169  
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

 

Taxable equivalent net interest income

   $ 99,827      $ 99,834      $ 103,246     $ 91,348      $ 83,691  

Per common share data

             

Net income per common share - basic

   $ 0.82      $ 0.74      $ 0.80     $ 0.65      $ 0.71  

Net income per common share - diluted

     0.82        0.74        0.80       0.64        0.71  

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

     0.82        0.78        0.82       0.81        0.80  

Dividends declared

     0.31        0.31        0.29       0.29        0.29  

Book value (period end)

     37.92        37.05        36.24       35.30        32.68  

Tangible book value (period end) (1)

     21.40        20.49        19.63       18.54        18.59  

Average common shares outstanding - basic

     54,628,029        54,598,499        54,598,142       50,277,847        46,498,305  

Average common shares outstanding - diluted

     54,773,521        54,706,337        54,706,691       50,432,112        46,639,780  

Period end common shares outstanding

     54,697,199        54,599,127        54,598,134       54,603,967        46,643,250  

Full time equivalent employees

     2,353        2,329        2,388       2,404        2,040  

 

(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.

 

10


WESBANCO, INC.

Consolidated Selected Financial Highlights

 

 

(unaudited, dollars in thousands)

 

     Quarter Ended  
     June 30,     Mar. 31,     Dec. 31,     Sept. 30,     June 30,  
     2019     2019     2018     2018     2018  

Asset quality data

          

Non-performing assets:

          

Troubled debt restructurings - accruing

   $ 5,487     $ 5,481     $ 5,744     $ 6,338     $ 6,460  

Non-accrual loans:

          

Troubled debt restructurings

     1,924       2,936       2,855       2,036       2,514  

Other non-accrual loans

     30,974       27,291       27,845       29,238       29,467  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total non-accrual loans

     32,898       30,227       30,700       31,274       31,981  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total non-performing loans

     38,385       35,708       36,444       37,612       38,441  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Other real estate and repossessed assets

     4,973       6,001       7,265       6,877       4,384  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total non-performing assets

   $ 43,358     $ 41,709     $
 
 
43,709
 
 
  $
 
 
44,489
 
 
  $
 
 
42,825
 
 
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Past due loans (1):

          

Loans past due 30-89 days

   $ 15,446     $ 21,433     $ 19,569     $ 18,016     $ 13,357  

Loans past due 90 days or more

     2,634       2,740       4,077       2,451       1,881  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total past due loans

   $ 18,080     $ 24,173     $ 23,646     $ 20,467     $ 15,238  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Criticized and classified loans (2):

          

Criticized loans

   $ 73,236     $ 69,691     $ 51,710     $ 46,370     $ 34,045  

Classified loans

     41,004       39,412       31,244       31,437       38,982  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total criticized and classified loans

   $ 114,240     $ 109,103     $ 82,954     $ 77,807     $ 73,027  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Loans past due 30-89 days / total portfolio loans

     0.20     0.28     0.26     0.23     0.20

Loans past due 90 days or more / total portfolio loans

     0.03       0.04       0.05       0.03       0.03  

Non-performing loans / total portfolio loans

     0.50       0.47       0.48       0.49       0.57  

Non-performing assets/total portfolio loans, other real estate and repossessed assets

     0.56       0.54       0.57       0.58       0.63  

Non-performing assets / total assets

     0.35       0.33       0.35       0.35       0.39  

Criticized and classified loans / total portfolio loans

     1.48       1.42       1.08       1.01       1.08  

Allowance for loan losses

                              

Allowance for loan losses

   $ 50,859     $ 48,866     $ 48,948     $ 48,902     $ 47,638  

Provision for credit losses

     2,747       2,507       2,854       1,035       1,708  

Net loan and deposit account overdraft charge-offs

     947       1,370       2,750       (306     425  

Annualized net loan charge-offs /average loans

     0.05     0.07     0.14     (0.02 )%      0.03

Allowance for loan losses / total portfolio loans

     0.66     0.64     0.64     0.63     0.70

Allowance for loan losses / non-performing loans

     1.32     1.37     1.34     1.30     1.24

Allowance for loan losses / non-performing loans and loans past due

     0.90     0.82     0.81     0.84     0.89
     Quarter Ended  
     June 30,     Mar. 31,     Dec. 31,     Sept. 30,     June 30,  
     2019     2019     2018     2018     2018  

Capital ratios

                              

Tier I leverage capital

     11.09     10.98     10.74     11.22     10.21

Tier I risk-based capital

     15.39       15.31       15.09       14.32       14.26  

Total risk-based capital

     16.32       16.22       15.99       15.20       15.26  

Common equity tier 1 capital ratio (CET 1)

     13.83       13.48       13.14       12.41       12.38  

Average shareholders’ equity to average assets

     16.42       16.01       15.51       14.65       13.89  

Tangible equity to tangible assets (3)

     10.10       9.57       9.28       8.66       8.43  

 

(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.

 

11


NON-GAAP FINANCIAL MEASURES

The following non-GAAP financial measures used by WesBanco provide information useful to investors in understanding WesBanco’s operating performance and trends, and facilitate comparisons with the performance of WesBanco’s peers. The following tables summarize the non-GAAP financial measures derived from amounts reported in WesBanco’s financial statements.

 

     Three Months Ended     Year to Date  
(unaudited, dollars in thousands, except shares    June 30,     Mar. 31,     Dec. 31,     Sept. 30,     June 30,     June 30,  
and per share amounts)    2019     2019     2018     2018     2018     2019     2018  

Return on average assets, excluding after-tax merger-related expenses:

              

Net income (annualized)

   $ 179,748     $ 163,589     $ 174,280     $ 128,886     $ 133,039     $ 171,713     $ 134,501  

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

     257       9,954       4,353       33,885       17,150       5,079       9,012  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net income excluding after-tax merger-related expenses (annualized)

     180,005       173,543       178,633       162,771       150,189       176,792       143,513  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Average total assets

   $
 
 
12,489,663
 
 
  $
 
 
12,510,032
 
 
  $
 
 
12,565,880
 
 
  $
 
 
11,738,796
 
 
  $
 
 
10,918,731
 
 
  $
 
 
12,499,928
 
 
  $
 
 
10,458,602
 
 
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Return on average assets, excluding after-tax merger-related expenses

     1.44     1.39     1.42     1.39     1.38     1.41     1.37
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Return on average equity, excluding after-tax merger-related expenses:

              

Net income (annualized)

   $ 179,748     $ 163,589     $ 174,280     $ 128,886     $ 133,039     $ 171,713     $ 134,501  

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

     257       9,954       4,353       33,885       17,150       5,079       9,012  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net income excluding after-tax merger-related expenses (annualized)

     180,005       173,543       178,633       162,771       150,189       176,792       143,513  

Average total shareholders’ equity

     2,050,190       2,002,710       1,949,530       1,719,489       1,517,036       2,026,712       1,459,472  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Return on average equity, excluding after-tax merger-related expenses

     8.78     8.67     9.16     9.47     9.90     8.72     9.83
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Return on average tangible equity:

              

Net income (annualized)

   $ 179,748     $ 163,589     $ 174,280     $ 128,886     $ 133,039     $ 171,713     $ 134,501  

Plus: amortization of intangibles (annualized) (1)

     7,811       8,055       8,657       5,707       4,156       7,930       3,819  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net income before amortization of intangibles (annualized)

     187,559       171,644       182,937       134,593       137,195       179,643       138,320  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Average total shareholders’ equity

     2,050,190       2,002,710       1,949,530       1,719,489       1,517,036       2,026,712       1,459,472  

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

     (903,243     (906,041     (914,214     (775,267     (652,318     (904,634     (619,198
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Average tangible equity

   $ 1,146,947     $ 1,096,669     $ 1,035,316     $ 944,222     $ 864,718     $ 1,122,078     $ 840,274  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Return on average tangible equity

     16.35     15.65     17.67     14.25     15.87     16.01     16.46
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Return on average tangible equity, excluding after-tax merger-related expenses:

              

Net income (annualized)

   $ 179,748     $ 163,589     $ 174,280     $ 128,886     $ 133,039     $ 171,713     $ 134,501  

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

     257       9,954       4,353       33,885       17,150       5,079       9,012  

Plus: amortization of intangibles (annualized) (1)

     7,811       8,055       8,657       5,707       4,156       7,930       3,819  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net income before amortization of intangibles and excluding after-tax merger-related expenses (annualized)

     187,816       181,598       187,290       168,478       154,345       184,722       147,332  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Average total shareholders’ equity

     2,050,190       2,002,710       1,949,530       1,719,489       1,517,036       2,026,712       1,459,472  

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

     (903,243     (906,041     (914,214     (775,267     (652,318     (904,634     (619,198
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Average tangible equity

   $ 1,146,947     $ 1,096,669     $ 1,035,316     $ 944,222     $ 864,718     $ 1,122,078     $ 840,274  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Return on average tangible equity, excluding after-tax merger-related expenses

     16.38     16.56     18.09     17.85     17.85     16.46     17.53
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Efficiency ratio:

              

Non-interest expense

   $ 71,952     $ 74,432     $ 70,990     $ 76,120     $ 63,543     $ 146,385     $ 118,114  

Less: restructuring and merger-related expense

     (81     (3,107     (1,389     (10,811     (5,412     (3,188     (5,657
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Non-interest expense excluding restructuring and merger-related expense

     71,871       71,325       69,601       65,309       58,131       143,197       112,457  

Net interest income on a fully taxable equivalent basis

     99,827       99,834       103,246       91,348       83,691       199,662       158,165  

Non-interest income

     31,156       27,773       26,561       26,224       23,408       58,929       47,491  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

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

   $ 130,983     $ 127,607     $ 129,807     $ 117,572     $ 107,099     $ 258,591     $ 205,656  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Efficiency Ratio

     54.87     55.89     53.62     55.55     54.28     55.38     54.68
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

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

              

Net income

   $ 44,814     $ 40,337     $ 43,928     $ 32,486     $ 33,169     $ 85,151     $ 66,698  

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

     64       2,454       1,097       8,541       4,276       2,519       4,469  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net income, excluding after-tax merger-related expenses

   $ 44,878     $ 42,791     $ 45,025     $ 41,027     $ 37,445     $ 87,670     $ 71,167  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

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

              

Net income per diluted share

   $ 0.82     $ 0.74     $ 0.80     $ 0.64     $ 0.71     $ 1.56     $ 1.47  

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

     0.00       0.04       0.02       0.17       0.09       0.04       0.10  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

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

   $ 0.82     $ 0.78     $ 0.82     $ 0.81     $ 0.80     $ 1.60     $ 1.57  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
     Period End              
     June 30,     Mar. 31,     Dec. 31,     Sept. 30,     June 30,              
     2019     2019     2018     2018     2018              

Tangible book value per share:

              

Total shareholders’ equity

   $ 2,074,116     $ 2,023,139     $ 1,978,827     $ 1,927,269     $ 1,524,106      

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

     (903,729     (904,144     (906,887     (915,022     (657,111    
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

     

Tangible equity

     1,170,387       1,118,995       1,071,940       1,012,247       866,995      

Common shares outstanding

     54,697,199       54,599,127       54,598,134       54,603,967       46,643,250      
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

     

Tangible book value per share

   $ 21.40     $ 20.49     $ 19.63     $ 18.54     $ 18.59      
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

     

Tangible equity to tangible assets:

              

Total shareholders’ equity

   $ 2,074,116     $ 2,023,139     $ 1,978,827     $ 1,927,269     $ 1,524,106      

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

     (903,729     (904,144     (906,887     (915,022     (657,111    
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

     

Tangible equity

     1,170,387       1,118,995       1,071,940       1,012,247       866,995      

Total assets

     12,494,653       12,601,408       12,458,632       12,599,479       10,946,584      

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

     (903,729     (904,144     (906,887     (915,022     (657,111    
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

     

Tangible assets

   $
 
 
11,590,924
 
 
  $
 
 
11,697,264
 
 
  $
 
 
11,551,745
 
 
  $
 
 
11,684,457
 
 
  $
 
 
10,289,473
 
 
   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

     

Tangible equity to tangible assets

     10.10     9.57     9.28     8.66     8.43    
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

     

 

(1)

Tax effected at 21% for all periods presented.

 

12