WESBANCO, INC. WHEELING, W.Va., Jan. 27, 2015 /PRNewswire/ -- Todd F. Clossin, President and Chief Executive Officer of WesBanco, Inc. (NASDAQ Global Market: WSBC), a Wheeling, West Virginia based multi-state bank holding company, today announced an increase in net income and related earnings per share for the three and twelve months ended December 31, 2014.
Net income increased 10% for the twelve months ended December 31, 2014, to $70.0 million compared to $63.9 million for 2013, while diluted earnings per share were $2.39, an increase of 10% compared to $2.18 per share for 2013. For the fourth quarter of 2014, net income was $16.5 million compared to $15.4 million for the fourth quarter of 2013, representing an 8% increase. Diluted earnings per share for the fourth quarter were $0.56, compared to $0.52 in the 2013 quarter, also representing an increase of 8%. The fourth quarter results included a pre-tax charge of $1.3 million relating to merger-related expenses. The increased net income improved the return on average assets to 1.12% in 2014 from 1.05% in 2013. Return on assets and return on tangible equity for WesBanco remain well above third quarter 2014 peer group averages, the most recent available.
On January 22, 2015, the shareholders of WesBanco, Inc. and ESB Financial Corporation ("ESB") approved the merger of ESB with and into WesBanco. The acquisition is expected to close after receipt of all required regulatory approvals which is anticipated to be in the first quarter of 2015. ESB is a Pennsylvania thrift holding company, headquartered in Ellwood City, Lawrence County, with approximately $1.9 billion in assets. When the transaction is consummated, the combination of the two banking companies will create a bank with approximately $8.3 billion in total assets providing banking services through 143 branch locations and 130 ATM's in three states. The transaction will expand WesBanco's franchise in the Pittsburgh region of western Pennsylvania from 16 to 39 offices with approximately $2.5 billion in assets.
Mr. Clossin commented, "We are pleased with our success in 2014. The increase in net income reflects the strong performance across all of our lines of business. Loan growth accelerated in the fourth quarter to an annualized growth rate of 5.4% with actual net loan growth for 2014 of 4.9%. Net interest income increased for the sixth consecutive quarter as a result of loan growth and a reduction in our cost of funds through management of our deposit rate structures and other funding sources. Our wealth management units also continued significant growth in 2014. Credit quality improved throughout the year resulting in a 30% decrease in the provision for credit losses for the year. We continued our disciplined approach to expense control as non-interest expense was nearly unchanged in 2014. We also opened our new Southpointe branch in the southern Pittsburgh metropolitan area during the fourth quarter.
We have negotiated an acquisition that will significantly expand our presence in western Pennsylvania. Upon completion, we will become the 10(th) largest full service financial institution in western Pennsylvania. We look forward to working with the customers and employees of ESB."
Financial Condition
Total assets at December 31, 2014 increased 2.5% or $151.8 million from December 31, 2013, primarily due to loan growth. Portfolio loans increased $191.8 million or 4.9% over last year and 1.4% in the fourth quarter of 2014 compared to the third quarter of this year. Loan growth was achieved through $1.4 billion in loan originations in 2014. Loan growth was driven by increased business activity, additional lending personnel, focused marketing efforts, an expanded presence in our larger urban markets, and continued improvement in loan origination processes. Deposits, excluding CDs, increased $192.8 million or 5.4% from December 31, 2013, with deposits for Marcellus and Utica shale gas contributing to the increase. All deposit types increased except certificates of deposit, which decreased $206.4 million due to lower rate offerings for maturing CDs.
WesBanco continues to maintain strong regulatory capital ratios. At December 31, 2014, tier I leverage was 9.88%, tier I risk-based capital was 13.76%, and total risk-based capital was 14.81%, all of which improved from December 31, 2013. Both consolidated and bank-level regulatory capital ratios are well above the applicable "well-capitalized" standards promulgated by bank regulators, as well as the recently finalized fully-implemented BASEL III capital standards. Total tangible equity to tangible assets (non-GAAP measure) was 7.88% at December 31, 2014, increasing from 7.35% at December 31, 2013. Strong earnings and improved total capital have enabled WesBanco to increase the quarterly dividend rate, currently at $0.22 per share, seven times over the last four years, cumulatively representing a 57% increase. The most recent increase was $0.02 per share in the first quarter of 2014.
Credit Quality
Total non-performing loans, including TDRs, were $50.9 million or 1.25% of total loans at December 31, 2014, which represents a 1.2% decrease from $51.5 million or 1.32% of total loans at December 31, 2013. Criticized and classified loans were $81.1 million, or 1.99% of total loans at December 31, 2014. This represents a decrease of 40.2% over the last twelve months from $135.6 million or 3.48% of total loans at December 31, 2013.
Net charge-offs for 2014 were $9.3 million or 0.23% of average portfolio loans compared to $14.2 million or 0.38% in 2013. For the fourth quarter, net charge-offs were $2.3 million or 0.23% of average portfolio loans, compared to $2.9 million or 0.30% for the same quarter of 2013.
Lower charge-offs and continued improvement in delinquent, non-performing and classified and criticized loans resulted in a provision for credit losses of $6.4 million in 2014 compared to $9.1 million in 2013. For the fourth quarter of 2014, the provision was $1.9 million compared to $3.1 million in the same quarter of 2013. The allowance for loan losses represented 1.09% of total portfolio loans at December 31, 2014, compared to 1.22% at the end of 2013.
Net Interest Income
Net interest income increased $7.7 million or 4.2% in 2014 compared to 2013 due to a 3.1% increase in average earning assets, primarily through a 4.8% increase in average loan balances, and improvement in the net interest margin. Growth in net interest income has been very consistent. The fourth quarter of 2014 is the sixth consecutive quarter that net interest income has increased. The net interest margin improved by 3 basis points to 3.61% in 2014 compared to 3.58% in 2013. Accretion of various purchase accounting adjustments from a 2012 acquisition benefited the net interest margin throughout 2013 and 2014, but at a decreasing rate. Excluding this benefit from both years, the net interest margin increased by 8 basis points from 3.49% in 2013 to 3.57% in 2014. The improved net interest margin in the current low interest rate environment resulted partially from the aforementioned loan growth as the average rate on loans is higher than the average rate on securities. In addition, funding costs continued to decrease in 2014 as a result of a 9.4% increase in lower-cost demand, money market and savings account deposits, while higher-cost CDs decreased by 11.8%. The average rate on CDs declined by 43 basis points as higher rate CDs matured. In addition, a 29.2% reduction in higher-rate average other borrowings improved funding costs through the prepayment of a higher-rate $22.0 million repurchase agreement with another bank in the third quarter, and through maturities. For both the year and the fourth quarter, increased FHLB borrowings were generally short-term and did not significantly affect funding costs. Overall, average deposits increased by 2.6% in 2014 compared to 2013. For the fourth quarter, net interest income increased by $1.7 million or 3.7% compared to the fourth quarter of 2013, as average earning assets increased by 3.0% from a 5.1% increase in average loans, and the net interest margin increased by two basis points.
Non-Interest Income
For 2014, non-interest income decreased $0.8 million or 1.1% compared to 2013. The third quarter of 2014 included a $1.4 million charge related to the prepayment of the repurchase agreement. Non-interest income, excluding this charge, increased $0.6 million or 0.9% for the year. Trust fees increased 7.6% for the year as assets under management continued to increase from customer development initiatives and overall market improvements. Total trust assets were $3.8 billion at December 31, 2014, representing an increase of 4.1% from $3.7 billion at December 31, 2013. Net securities brokerage revenues increased $0.7 million or 10.8%, due to significant production increases from the addition of support and sales staff in several regions, as well as an increase in referrals and production from a licensed retail banker program. Service charges on deposits decreased 10.0% compared to 2013 due to lower overdraft fees that are affected by consistent increases in deposit levels and higher average deposits per account. Mortgage loan sale gains decreased 38.6% as the weak housing market reduced mortgage demand resulting in lower mortgage activity, which was also impacted by the new 2014 Qualified Mortgage and Ability-to-Repay rules, somewhat limiting the Bank's product offerings. For the fourth quarter of 2014, non-interest income decreased 2.3% primarily due to a 12.7% decrease in service charges on deposits.
Non-Interest Expense
In 2014, revenue growth outpaced expense growth, as expense growth was minimal excluding merger-related expenses. As a result the efficiency ratio improved to 59.6% for 2014 from 61.0% in 2013. The fourth quarter 2014 ratio dropped to 60.4% compared to 61.7% last year. Non-interest expense increased $0.6 million or only 0.4% for 2014 compared to 2013. Salaries and wages increased 3.0%, due to routine annual adjustments to compensation, increased commissions on higher brokerage revenue and incentive and stock-related compensation granted in 2014, partially offset by lower average full time employees ("FTEs"). In 2014, employee benefits expense decreased 7.5%, primarily from decreased pension and other benefits expense, partially offset by higher health insurance costs. In addition, net occupancy and equipment expense increased due to higher weather-related expenses, the opening of three branches over the last five quarters and investment in internal infrastructure in the second half of last year. For the fourth quarter of 2014, non-interest expense increased by $1.2 million or 3.0% compared to the fourth quarter of 2013 primarily due to an increase in merger-related expense of $1.3 million. Excluding this increase, non-interest expense for the fourth quarter would have decreased slightly. In addition, fourth quarter salaries and wages decreased 3.7% compared to the fourth quarter of 2013 primarily due to lower incentive compensation and commission expense and lower average FTEs, while employee benefits expense decreased 9.4%. These decreases were offset by increased other expenses of $1.0 million primarily due to customer forgery losses recognized totaling $550,000, increased franchise taxes and other miscellaneous fees and costs, partially offset by reduced communication expenses.
Financial Results Conference Call
WesBanco, Inc. will host a conference call to discuss the Company's financial results for the fourth quarter of 2014 on Wednesday, January 28, 2015 at 11:00 a.m. E.S.T. Callers wishing to participate should access the call by dialing 1-888-347-6607 or 1-412-902-4290 for international callers. The call may also be listened to live via Webcast through the "Investor Relations" section of the Company's Website or by registering at http://www.videonewswire.com/event.asp?id=101311. Access to the Webcast will begin approximately 15 minutes prior to the start of the call.
WesBanco is a multi-state bank holding company with total assets of approximately $6.3 billion, operating through 120 branch locations and 107 ATMs in West Virginia, Ohio, and Pennsylvania. WesBanco's banking subsidiary is WesBanco Bank, Inc., headquartered in Wheeling, West Virginia. WesBanco also operates an insurance brokerage company, WesBanco Insurance Services, Inc., and a full service broker/dealer, WesBanco Securities, Inc.
Forward-looking Statements:
Forward-looking statements in this report relating to WesBanco's plans, strategies, objectives, expectations, intentions and adequacy of resources, are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. The information contained in this report should be read in conjunction with WesBanco's Form 10-K for the year ended December 31, 2013 and documents subsequently filed by WesBanco with the Securities and Exchange Commission ("SEC"), including WesBanco's Form 10-Q for the quarters ended March 31, 2014, June 30, 2014, and September 30, 2014, respectively, 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 ESB may not be integrated successfully or such integration may take longer to accomplish than expected; the expected cost savings and any revenue synergies from the merger of WesBanco and ESB may not be fully realized within the expected timeframes; disruption from the merger of WesBanco and ESB 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.
WESBANCO, INC.
Consolidated Selected Financial Highlights Page 4
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(unaudited, dollars in thousands, except shares and per share amounts)
For the Three Months Ended For the Year Ended
STATEMENT OF INCOME December 31, December 31,
------------------- ------------ ------------
Interest and dividend income 2014 2013 % Change 2014 2013 % Change
---- ---- -------- ---- ---- --------
Loans, including fees $43,491 $43,617 (0.3) $172,182 $175,323 (1.8)
Interest and dividends on securities:
Taxable 7,181 7,178 0.0 29,233 29,193 0.1
Tax-exempt 3,356 3,380 (0.7) 13,589 13,128 3.5
---- ---
Total interest and dividends on securities 10,537 10,558 (0.2) 42,822 42,321 1.2
------ ------ ---- ------ ------ ---
Other interest income 157 82 91.5 987 246 301.2
---
Total interest and dividend income 54,185 54,257 (0.1) 215,991 217,890 (0.9)
------ ------ ---- ------- ------- ----
Interest expense
Interest bearing demand deposits 400 380 5.3 1,568 1,415 10.8
Money market deposits 483 440 9.8 1,877 1,462 28.4
Savings deposits 134 130 3.1 532 525 1.3
Certificates of deposit 2,980 4,383 (32.0) 13,286 22,010 (39.6)
Total interest expense on deposits 3,997 5,333 (25.1) 17,263 25,412 (32.1)
Federal Home Loan Bank borrowings 318 251 26.7 968 1,151 (15.9)
Other short-term borrowings 78 625 (87.5) 1,333 2,525 (47.2)
Junior subordinated debt owed to unconsolidated
subsidiary trusts 806 810 (0.5) 3,199 3,315 (3.5)
Total interest expense 5,199 7,019 (25.9) 22,763 32,403 (29.8)
----- ----- ----- ------ ------ -----
Net interest income 48,986 47,238 3.7 193,228 185,487 4.2
Provision for credit losses 1,880 3,144 (40.2) 6,405 9,086 (29.5)
-----
Net interest income after provision for credit losses 47,106 44,094 6.8 186,823 176,401 5.9
------ ------ --- ------- ------- ---
Non-interest income
Trust fees 5,115 4,883 4.8 21,069 19,577 7.6
Service charges on deposits 4,028 4,616 (12.7) 16,135 17,925 (10.0)
Electronic banking fees 3,159 3,012 4.9 12,708 12,198 4.2
Net securities brokerage revenue 1,389 1,604 (13.4) 6,922 6,248 10.8
Bank-owned life insurance 1,037 925 12.1 4,614 4,664 (1.1)
Net gains on sales of mortgage loans 426 456 (6.6) 1,604 2,614 (38.6)
Net securities gains 147 (3) 5,000.0 903 684 32.0
Net gain /(loss) on other real estate owned and other
assets 212 (144) 247.2 (1,006) (81) (1,142.0)
Other income 1,047 1,601 (34.6) 5,555 5,456 1.8
-----
Total non-interest income 16,560 16,950 (2.3) 68,504 69,285 (1.1)
------ ------ ---- ------ ------ ----
Non-interest expense
Salaries and wages 16,707 17,352 (3.7) 67,408 65,431 3.0
Employee benefits 5,229 5,774 (9.4) 21,518 23,255 (7.5)
Net occupancy 2,857 2,866 (0.3) 12,122 11,809 2.7
Equipment 3,008 2,768 8.7 11,542 10,669 8.2
Marketing 1,250 1,159 7.9 5,242 5,174 1.3
FDIC insurance 833 919 (9.4) 3,376 3,725 (9.4)
Amortization of intangible assets 466 546 (14.7) 1,920 2,288 (16.1)
Restructuring and merger-related expense 1,309 45 2,808.9 1,309 1,310 (0.1)
Other operating expenses 10,313 9,314 10.7 37,196 37,337 (0.4)
Total non-interest expense 41,972 40,743 3.0 161,633 160,998 0.4
------ ------ --- ------- ------- ---
Income before provision for income taxes 21,694 20,301 6.9 93,694 84,688 10.6
Provision for income taxes 5,182 4,948 4.7 23,720 20,763 14.2
-----
Net Income $16,512 $15,353 7.5 $69,974 $63,925 9.5
======= ======= === ======= ======= ===
Taxable equivalent net interest income $50,793 $49,058 3.5 $200,545 $192,556 4.1
Per common share data
---------------------
Net income per common share - basic $0.56 $0.52 7.7 $2.39 $2.18 9.6
Net income per common share - diluted 0.56 0.52 7.7 2.39 2.18 9.6
Dividends declared 0.22 0.20 10.0 0.88 0.78 12.8
Book value (period end) 26.90 25.59 5.1
Tangible book value (period end) (1) 16.09 14.68 9.6
Average common shares outstanding - basic 29,291,440 29,300,463 (0.0) 29,249,499 29,270,922 (0.1)
Average common shares outstanding - diluted 29,383,506 29,387,485 (0.0) 29,333,876 29,344,683 (0.0)
Period end common shares outstanding 29,298,188 29,175,236 0.4 29,298,188 29,175,236 0.4
(1) See non-GAAP financial measures for additional information relating to the calculation of this item.
WESBANCO, INC.
Consolidated Selected Financial Highlights Page 5
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(unaudited, dollars in thousands)
Selected ratios
---------------
For the Year Ended
December 31,
------------
2014 2013 % Change
---- ---- --------
Return on average assets 1.12% 1.05% 6.67%
Return on average equity 8.97 8.72 2.87
Return on average tangible equity (1) 15.39 15.79 (2.53)
Yield on earning assets (2) 4.02 4.18 (3.83)
Cost of interest bearing liabilities 0.52 0.73 (28.77)
Net interest spread (2) 3.50 3.45 1.45
Net interest margin (2) 3.61 3.58 0.84
Efficiency (1) (2) 59.59 60.99 (2.30)
Average loans to average deposits 76.89 75.28 2.14
Annualized net loan charge-offs/average loans 0.23 0.38 (39.47)
Effective income tax rate 25.32 24.52 3.26
For the Quarter Ended
---------------------
Dec. 31, Sept. 30, June 30, Mar. 31, Dec. 31,
2014 2014 2014 2014 2013
---- ---- ---- ---- ----
Return on average assets 1.04% 1.14% 1.22% 1.08% 0.99%
Return on average equity 8.17 9.15 9.79 8.78 8.17
Return on average tangible equity (1) 13.77 15.59 16.90 15.40 14.60
Yield on earning assets (2) 3.96 3.98 4.06 4.08 4.09
Cost of interest bearing liabilities 0.47 0.51 0.52 0.56 0.63
Net interest spread (2) 3.49 3.47 3.54 3.52 3.46
Net interest margin (2) 3.60 3.58 3.64 3.63 3.58
Efficiency (1) (2) 60.37 58.51 58.93 60.57 61.66
Average loans to average deposits 79.07 77.52 75.40 75.52 75.79
Annualized net loan charge-offs/average loans 0.23 0.22 0.06 0.43 0.30
Effective income tax rate 23.89 25.93 25.67 25.63 24.37
Trust assets, market value at period end $3,840,540 $3,783,774 $3,844,116 $3,752,142 $3,688,734
(1) See non-GAAP financial measures for additional information relating to the calculation of this item.
(2) The yield on earning assets, net interest margin, net interest spread and efficiency ratios are presented on a fully
taxable-equivalent (FTE) and annualized basis. The FTE basis adjusts for the tax benefit of income on certain tax-exempt
loans and investments. WesBanco believes this measure to be the preferred industry measurement of net interest income and
provides a relevant comparison between taxable and non-taxable amounts.
WESBANCO, INC.
Consolidated Selected Financial Highlights Page 6
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(unaudited, dollars in thousands, except shares) % Change
Balance sheets December 31, September 30, September 30, 2014
-------------- ------------ ------------- ------------------
Assets 2014 2013 % Change 2014 to December 31, 2014
---- ---- -------- ---- --------------------
Cash and due from banks $85,597 $80,001 7.0 $73,715 16.1
Due from banks - interest bearing 8,405 15,550 (45.9) 2,704 210.8
Securities:
Available-for-sale, at fair value 917,424 934,386 (1.8) 959,553 (4.4)
Held-to-maturity (fair values of $619,617; $596,308 and $617,332,
respectively) 593,670 598,520 (0.8) 594,860 (0.2)
1,511,094 1,532,906 (1.4) 1,554,413 (2.8)
Total securities
Loans held for sale 5,865 5,855 0.2 6,260 (6.3)
----- ----- --- ----- ----
Portfolio loans:
Commercial real estate 1,945,460 1,912,919 1.7 1,973,336 (1.4)
Commercial and industrial 638,410 556,249 14.8 603,245 5.8
Residential real estate 928,770 890,804 4.3 909,531 2.1
Home equity 330,031 284,687 15.9 313,711 5.2
Consumer 244,095 250,258 (2.5) 231,881 5.3
---- -------
Total portfolio loans, net of unearned income 4,086,766 3,894,917 4.9 4,031,704 1.4
Allowance for loan losses (44,654) (47,368) 5.7 (45,029) 0.8
------- ------- --- ------- ---
4,042,112 3,847,549 5.1 3,986,675 1.4
Net portfolio loans
Premises and equipment, net 93,135 93,157 (0.0) 92,090 1.1
Accrued interest receivable 18,481 18,960 (2.5) 20,032 (7.7)
Goodwill and other intangible assets, net 319,506 321,426 (0.6) 319,973 (0.1)
Bank-owned life insurance 123,298 121,390 1.6 122,678 0.5
Other assets 89,072 107,979 (17.5) 99,954 (10.9)
Total Assets $6,296,565 $6,144,773 2.5 $6,278,494 0.3
========== ========== === ========== ===
Liabilities
Deposits:
Non-interest bearing demand $1,061,075 $960,814 10.4 $1,027,636 3.3
Interest bearing demand 885,037 857,761 3.2 897,827 (1.4)
Money market 954,957 942,768 1.3 993,211 (3.9)
Savings deposits 842,818 789,709 6.7 824,703 2.2
Certificates of deposit 1,305,096 1,511,478 (13.7) 1,358,308 (3.9)
-----
5,048,983 5,062,530 (0.3) 5,101,685 (1.0)
Total deposits
Federal Home Loan Bank borrowings 223,126 39,508 464.8 123,374 80.9
Other short-term borrowings 80,690 150,536 (46.4) 117,637 (31.4)
Junior subordinated debt owed to unconsolidated subsidiary trusts 106,176 106,137 0.0 106,166 0.0
--- ---
409,992 296,181 38.4 347,177 18.1
Total borrowings
Accrued interest payable 1,620 2,354 (31.2) 2,103 (23.0)
Other liabilities 47,780 37,113 28.7 38,745 23.3
---- ----
Total Liabilities 5,508,375 5,398,178 2.0 5,489,710 0.3
--------- --------- --- --------- ---
Shareholders' Equity
Preferred stock, no par value; 1,000,000 shares authorized;
none outstanding - - - - -
Common stock, $2.0833 par value; 50,000,000 shares authorized;
29,367,511 shares issued;
29,298,188 shares; 29,175,236 shares and 29,283,675 shares outstanding,
respectively 61,182 61,182 - 61,182 -
Capital surplus 244,661 244,974 (0.1) 244,358 0.1
Retained earnings 504,578 460,351 9.6 494,511 2.0
Treasury stock (69,323; 192,275 and 83,836 shares - at cost,
respectively) (2,151) (5,969) 64.0 (2,601) 17.3
Accumulated other comprehensive loss (18,825) (12,734) (47.8) (7,423) (153.6)
Deferred benefits for directors (1,255) (1,209) (3.8) (1,243) (1.0)
---- ----
Total Shareholders' Equity 788,190 746,595 5.6 788,784 (0.1)
------- ------- -------
Total Liabilities and Shareholders' Equity $6,296,565 $6,144,773 2.5 $6,278,494 0.3
========== ========== === ========== ===
WESBANCO, INC.
Consolidated Selected Financial Highlights Page 7
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(unaudited, dollars in thousands)
Average balance sheet and
-------------------------
net interest margin analysis Three Months Ended December 31, For the Year Ended December 31,
----------------------------
2014 2013 2014 2013
---- ---- ---- ----
Average Average Average Average Average Average Average Average
Assets Balance Rate Balance Rate Balance Rate Balance Rate
------- ---- ------- ---- ------- ---- ------- ----
Due from banks - interest bearing $8,042 0.30% $42,415 0.25% $25,713 0.23% $37,556 0.22%
Loans, net of unearned income (1) 4,057,138 4.25 3,859,211 4.48 3,953,823 4.35 3,772,172 4.65
Securities: (2)
Taxable 1,141,069 2.52 1,137,977 2.52 1,158,738 2.52 1,175,865 2.48
Tax-exempt (3) 400,470 5.16 400,049 5.20 403,088 5.19 384,069 5.26
------- ---- ------- ---- ------- ---- ------- ----
Total securities 1,541,539 3.20 1,538,026 3.23 1,561,826 3.21 1,559,934 3.17
Other earning assets (4) 9,135 6.61 12,200 1.84 11,726 7.91 15,165 1.07
----- ---- ------ ---- ------ ---- ------ ----
Total earning assets (3) 5,615,854 3.96% 5,451,852 4.09% 5,553,088 4.02% 5,384,827 4.18%
--------- ---- --------- ---- --------- ---- --------- ----
Other assets 680,428 728,851 700,165 724,484
Total Assets $6,296,282 $6,180,703 $6,253,253 $6,109,311
========== ========== ========== ==========
Liabilities and Shareholders' Equity
Interest bearing demand deposits $912,352 0.17% $869,568 0.17% $899,887 0.17% $858,679 0.16%
Money market accounts 979,343 0.20 931,309 0.19 972,496 0.19 867,473 0.17
Savings deposits 829,215 0.06 782,895 0.07 822,221 0.06 770,687 0.07
Certificates of deposit 1,335,421 0.89 1,556,305 1.12 1,418,459 0.94 1,607,918 1.37
--------- ---- --------- ---- --------- ---- --------- ----
Total interest bearing deposits 4,056,331 0.39 4,140,077 0.51 4,113,063 0.42 4,104,757 0.62
Federal Home Loan Bank borrowings 124,892 1.01 53,508 1.86 81,159 1.19 62,344 1.85
Other borrowings 90,152 0.35 132,191 1.88 101,291 1.32 142,992 1.77
Junior subordinated debt 106,171 3.01 106,132 3.03 106,156 3.01 107,665 3.08
------- ---- ------- ---- ------- ---- ------- ----
Total interest bearing liabilities 4,377,546 0.47% 4,431,908 0.63% 4,401,669 0.52% 4,417,758 0.73%
--------- ---- --------- ---- --------- ---- --------- ----
Non-interest bearing demand deposits 1,074,797 951,809 1,029,370 905,921
Other liabilities 42,360 51,850 41,791 52,383
Shareholders' equity 801,579 745,136 780,423 733,249
------- ------- ------- -------
Total Liabilities and Shareholders' Equity $6,296,282 $6,180,703 $6,253,253 $6,109,311
========== ========== ========== ==========
Taxable equivalent net interest spread 3.49% 3.46% 3.50% 3.45%
==== ==== ==== ====
Taxable equivalent net interest margin 3.60% 3.58% 3.61% 3.58%
==== ==== ==== ====
(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 $1.0 million and $0.8 million for the three months ended December 31, 2014 and 2013, respectively, and
$3.5 million and $3.8 million for the year ended December 31, 2014 and 2013, respectively.
Additionally, loan accretion included in interest income on loans acquired from a 2012 acquisition was $0.3 million and $0.4 million for the three months
ended December 31, 2014 and 2013, respectively, and $1.4 million and $2.7 million for the year ended December 31, 2014 and 2013, respectively, while accretion on interest bearing liabilities
acquired from the 2012 acquisition was $0.1 million and $0.4 million for the three months ended December 31, 2014 and 2013, respectively, and $0.7 million and $1.7 million for the
year ended December 31, 2014 and 2013, respectively.
(2) Average yields on available-for sale securities are calculated based on amortized cost.
(3) Taxable equivalent basis is calculated on tax-exempt securities using a rate of 35% for each period presented.
(4) Interest income on other earning assets includes $0.5 million of interest on a federal income tax refund for the year ended December 31, 2014.
WESBANCO, INC.
Consolidated Selected Financial Highlights Page 8
(unaudited, dollars in thousands, except shares and per share amounts)
---------------------------------------------------------------------
Quarter Ended
-------------
Statement of Income Dec. 31, Sept. 30, June 30, Mar. 31, Dec. 31,
-------------------
Interest income 2014 2014 2014 2014 2013
---- ---- ---- ---- ----
Loans, including fees $43,491 $43,399 $42,546 $42,746 $43,617
Interest and dividends on securities:
Taxable 7,181 7,375 7,452 7,225 7,178
Tax-exempt 3,356 3,413 3,435 3,385 3,380
Total interest and dividends on securities 10,537 10,788 10,887 10,610 10,558
------ ------ ------ ------ ------
Other interest income 157 116 611 101 82
---
Total interest and dividend income 54,185 54,303 54,044 53,457 54,257
------ ------ ------ ------ ------
Interest expense
Interest bearing demand deposits 400 399 395 374 380
Money market deposits 483 487 466 440 440
Savings deposits 134 135 133 130 130
Certificates of deposit 2,980 3,254 3,422 3,630 4,383
Total interest expense on deposits 3,997 4,275 4,416 4,574 5,333
----- ----- ----- ----- -----
Federal Home Loan Bank borrowings 318 264 175 211 251
Other short-term borrowings 78 348 350 557 625
Junior subordinated debt owed to unconsolidated subsidiary
trusts 806 805 796 790 810
Total interest expense 5,199 5,692 5,737 6,132 7,019
----- ----- ----- ----- -----
Net interest income 48,986 48,611 48,307 47,325 47,238
Provision for credit losses 1,880 1,478 849 2,199 3,144
-----
Net interest income after provision for credit losses 47,106 47,133 47,458 45,126 44,094
------ ------ ------ ------ ------
Non-interest income
Trust fees 5,115 5,096 5,210 5,648 4,883
Service charges on deposits 4,028 4,170 4,078 3,860 4,616
Electronic banking fees 3,159 3,268 3,267 3,013 3,012
Net securities brokerage revenue 1,389 1,701 2,003 1,829 1,604
Bank-owned life insurance 1,037 882 1,821 875 925
Net gains on sales of mortgage loans 426 550 475 154 456
Net securities gains / (losses) 147 581 165 10 (3)
Net gain / (loss) on other real estate owned and other assets 212 (1,167) (165) 113 (144)
Other income 1,047 1,573 1,387 1,547 1,601
-----
Total non-interest income 16,560 16,654 18,241 17,049 16,950
------ ------ ------ ------ ------
Non-interest expense
Salaries and wages 16,707 17,331 16,904 16,467 17,352
Employee benefits 5,229 5,051 5,529 5,708 5,774
Net occupancy 2,857 2,916 2,857 3,491 2,866
Equipment 3,008 2,837 2,914 2,783 2,768
Marketing 1,250 1,276 1,713 1,003 1,159
FDIC insurance 833 786 880 877 919
Amortization of intangible assets 466 477 482 495 546
Restructuring and merger-related expense 1,309 - - - 45
Other operating expenses 10,313 8,589 9,025 9,271 9,314
Total non-interest expense 41,972 39,263 40,304 40,095 40,743
------ ------ ------ ------ ------
Income before provision for income taxes 21,694 24,524 25,395 22,080 20,301
Provision for income taxes 5,182 6,358 6,520 5,659 4,948
-----
Net Income $16,512 $18,166 $18,875 $16,421 $15,353
======= ======= ======= ======= =======
Taxable equivalent net interest income $50,793 $50,449 $50,157 $49,148 $49,058
Per common share data
---------------------
Net income per common share - basic $0.56 $0.62 $0.65 $0.56 $0.52
Net income per common share - diluted $0.56 $0.62 $0.64 $0.56 $0.52
Dividends declared $0.22 $0.22 $0.22 $0.22 $0.20
Book value (period end) $26.90 $26.94 $26.59 $26.05 $25.59
Tangible book value (period end) (1) $16.09 $16.10 $15.75 $15.17 $14.68
Average common shares outstanding - basic 29,291,440 29,280,648 29,242,180 29,182,183 29,300,463
Average common shares outstanding - diluted 29,383,506 29,360,880 29,321,927 29,262,680 29,387,485
Period end common shares outstanding 29,298,188 29,283,675 29,278,925 29,212,110 29,175,236
Full time equivalent employees 1,448 1,435 1,456 1,442 1,469
(1) See non-GAAP financial measures for additional information relating to the calculation of this item.
WESBANCO, INC.
Consolidated Selected Financial Highlights Page 9
------------------------------------------ ------
(unaudited, dollars in thousands)
Quarter Ended
-------------
Dec. 31, Sept. 30, June 30, Mar. 31, Dec. 31,
Asset quality data 2014 2014 2014 2014 2013
------------------ ---- ---- ---- ---- ----
Non-performing assets:
Troubled debt restructurings -
accruing $12,066 $12,222 $13,513 $14,535 $14,861
Non-accrual loans:
Troubled debt restructurings 5,420 5,496 6,281 7,406 9,324
Other non-accrual loans 33,398 31,275 29,837 28,967 27,309
------ ------ ------ ------ ------
Total non-accrual loans 38,818 36,771 36,118 36,373 36,633
------ ------ ------ ------ ------
Total non-performing loans 50,884 48,993 49,631 50,908 51,494
------ ------ ------ ------ ------
Other real estate and repossessed
assets 5,082 4,695 5,106 5,382 4,860
Total non-performing assets $55,966 $53,688 $54,737 $56,290 $56,354
======= ======= ======= ======= =======
Past due loans (1):
Loans past due 30-89 days $9,347 $10,745 $10,138 $14,650 $14,831
Loans past due 90 days or more 2,288 3,147 2,947 1,833 2,591
Total past due loans $11,635 $13,892 $13,085 $16,483 $17,422
======= ======= ======= ======= =======
Criticized and classified loans (2):
Criticized loans $34,288 $39,553 $68,707 $73,925 $75,249
Classified loans 46,851 48,004 52,760 55,341 60,335
Total criticized and classified loans $81,139 $87,557 $121,467 $129,266 $135,584
======= ======= ======== ======== ========
Loans past due 30-89 days / total portfolio loans 0.23% 0.27% 0.26% 0.38% 0.38%
Loans past due 90 days or more / total portfolio loans 0.06 0.08 0.07 0.05 0.07
Non-performing loans / total portfolio loans 1.25 1.22 1.26 1.31 1.32
Non-performing assets/total portfolio loans, other
real estate and repossessed assets 1.37 1.33 1.39 1.45 1.45
Non-performing assets / total assets 0.89 0.86 0.87 0.90 0.92
Criticized and classified loans / total portfolio loans 1.99 2.17 3.08 3.33 3.48
Allowance for loan losses
-------------------------
Allowance for loan losses $44,654 $45,029 $45,741 $45,483 $47,368
Provision for credit losses 1,880 1,478 849 2,199 3,144
Net loan and deposit account overdraft charge-offs 2,332 2,193 600 4,141 2,887
Annualized net loan charge-offs /average loans 0.23% 0.22% 0.06% 0.43% 0.30%
Allowance for loan losses / total portfolio loans 1.09% 1.12% 1.16% 1.17% 1.22%
Allowance for loan losses / non-performing loans 0.88 x 0.92 x 0.92 x 0.89 x 0.92 x
Allowance for loan losses / non-performing loans and
loans past due 0.71 x 0.72 x 0.73 x 0.67 x 0.69 x
Quarter Ended
-------------
Dec. 31, Sept. 30, June 30, Mar. 31, Dec. 31,
2014 2014 2014 2014 2013
---- ---- ---- ---- ----
Capital ratios
--------------
Tier I leverage capital 9.88% 9.70% 9.64% 9.45% 9.27%
Tier I risk-based capital 13.76 13.56 13.46 13.29 13.06
Total risk-based capital 14.81 14.62 14.56 14.40 14.19
Average shareholders' equity to average assets 12.73 12.49 12.43 12.27 12.06
Tangible equity to tangible assets (3) 7.88 7.91 7.74 7.49 7.35
(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 Year to Date
------------------ ------------
Dec. 31, Sept. 30, June 30, Mar. 31, Dec. 31, Dec. 31,
(unaudited, dollars in thousands, except shares and per share amounts) 2014 2014 2014 2014 2013 2014 2013
---- ---- ---- ---- ---- ---- ----
Return on average tangible equity:
Net income (annualized) $65,510 $72,072 $75,708 $66,596 $60,911 $69,974 $63,925
Plus: amortization of intangibles (annualized) (1) 1,202 1,230 1,256 1,305 1,408 1,248 1,487
------------------ -----
Net income before amortization of intangibles (annualized) 66,712 73,302 76,964 67,901 62,319 71,222 65,412
------------------ ------
Average total shareholders' equity 801,579 787,672 773,052 758,841 745,136 780,423 733,249
Less: average goodwill and other intangibles, net of def. tax
liability (317,061) (317,368) (317,679) (317,996) (318,333) (317,523) (318,913)
------------------ --------
Average tangible equity 484,518 470,304 455,373 440,845 426,803 462,900 414,336
-------
Return on average tangible equity 13.77% 15.59% 16.90% 15.40% 14.60% 15.39% 15.79%
===== ===== ===== ===== ===== ===== =====
Efficiency ratio:
Non-interest expense $41,972 $39,263 $40,304 $40,095 $40,743 $161,633 $160,998
Less: restructuring and merger-related expense (1,309) - - - (45) (1,309) (1,310)
------------------ ------
Non-interest expense excluding restructuring and merger-related
expense 40,663 39,263 40,304 40,095 40,698 160,324 159,688
Net interest income on a fully taxable equivalent basis 50,793 50,449 50,157 49,148 49,058 200,545 192,556
Non-interest income 16,560 16,654 18,241 17,049 16,950 68,504 69,285
------
Net interest income on a fully taxable equivalent basis plus non-
interest income 67,353 67,103 68,398 66,197 66,008 269,049 261,841
------------------ -------
Efficiency Ratio 60.37% 58.51% 58.93% 60.57% 61.66% 59.59% 60.99%
=====
Period End
----------
Dec. 31, Sept. 30, June 30, Mar. 31, Dec. 31,
2014 2014 2014 2014 2013
---- ---- ---- ---- ----
Tangible book value:
Total shareholders' equity $788,190 $788,784 $778,625 $761,117 $746,595
Less: goodwill and other intangible assets, net of def. tax
liability (316,914) (317,217) (317,527) (317,840) (318,161)
------------------
Tangible equity 471,276 471,567 461,098 443,277 428,434
Common shares outstanding 29,298,188 29,283,675 29,278,925 29,212,110 29,175,236
Tangible book value $16.09 $16.10 $15.75 $15.17 $14.68
====== ====== ====== ====== ======
Tangible equity to tangible assets:
Total shareholders' equity $788,190 $788,784 $778,625 $761,117 $746,595
Less: goodwill and other intangible assets, net of def. tax
liability (316,914) (317,217) (317,527) (317,840) (318,161)
------------------
Tangible equity 471,276 471,567 461,098 443,277 428,434
Total assets 6,296,565 6,278,494 6,277,020 6,237,577 6,144,773
Less: goodwill and other intangible assets, net of def. tax
liability (316,914) (317,217) (317,527) (317,840) (318,161)
------------------
Tangible assets 5,979,651 5,961,277 5,959,493 5,919,737 5,826,612
Tangible equity to tangible assets 7.88% 7.91% 7.74% 7.49% 7.35%
==== ==== ==== ==== ====
(1) Tax effected at 35%.
To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/wesbanco-announces-10-increase-in-net-income-for-2014-300026594.html
SOURCE WesBanco, Inc.
