WHEELING, W.Va., Jan. 28, 2019 /PRNewswire/ — 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 twelve months ended December 31, 2018.  Net income for the three months ended December 31, 2018 was $43.9 million, with diluted earnings per share of $0.80, compared to $15.9 million and $0.36 per diluted share, respectively, for the fourth quarter of 2017.  For the twelve months ended December 31, 2018, net income was $143.1 million, or $2.92 per diluted share, compared to $94.5 million, or $2.14 per diluted share, for the 2017 period.  Net income excluding after-tax merger-related expenses and the 2017 net deferred tax asset revaluation, which resulted from last year’s Federal tax reform legislation, for the three months ended December 31, 2018, increased 55.4% year-over-year to $45.0 million, or $0.82 per diluted share as compared to $0.66 per diluted share in the prior year quarter, an increase of 24.2% (non-GAAP measure).  On the same basis, net income for the twelve months ended December 31, 2018 increased 45.7% year-over-year to $157.2 million, or $3.21 per diluted share versus $2.45 per diluted share in the prior year period, an increase of 31.0% (non-GAAP measure).

For the Three Months Ended December 31,

For the Twelve Months Ended December 31,

2018

2017

2018

2017

(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)

$      45,025

$       0.82

$      28,972

$       0.66

$    157,221

$       3.21

$    107,876

$       2.45

Less: Net deferred tax asset revaluation

(12,780)

(0.29)

(12,780)

(0.29)

Less: After tax merger-related expenses

(1,097)

(0.02)

(295)

(0.01)

(14,109)

(0.29)

(614)

(0.02)

Net income (GAAP)

$      43,928

$       0.80

$      15,897

$       0.36

$    143,112

$       2.92

$      94,482

$       2.14

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

WesBanco Logo (PRNewsfoto/WesBanco, Inc.)

On April 5, 2018, WesBanco consummated the merger with First Sentry Bancshares, Inc. (“FTSB”), a bank holding company headquartered in Huntington, WV with $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:

  • Execution of well-defined long-term growth strategies combined with strong underlying fundamentals driving strong profitability
    • Record net income during 2018 of $143.1 million, or $157.2 million when excluding merger-related costs
      • 2018 net income was positively impacted by the passage of the “Tax Cuts and Jobs Act” in late-2017 which lowered the statutory Federal income tax rate for corporations to 21%, as compared to 35% in prior periods
    • Year-to-date income before provisions for credit losses and income taxes increased 15.2% year-over-year, or 25.7% when excluding merger-related costs
    • Strong core returns on average assets and tangible equity of 1.39% and 17.78%, respectively (non-GAAP measures)
  • Sequential and year-over-year improvement in core net interest margin reflects the benefits of the FFKT and FTSB acquisitions and our core deposit funding advantage
  • Solid expense management as demonstrated by a 184 basis point improvement in the year-to-date efficiency ratio to 54.6% (non-GAAP measure), despite the inclusion of FFKT’s operating expenses since August 20, 2018
  • Continued strength across key credit quality metrics reflective of strong legacy of credit and risk management
  • Successful implementation of stated acquisition strategy to cross the $10 billion asset threshold
    • Filled-in the southern edge of franchise
    • Became a top ten financial institution in the state of Kentucky

“2018 was another successful year for WesBanco, as well as a year full of milestones,” said Todd F. Clossin, President and Chief Executive Officer of WesBanco.  “Solid execution and strong fundamentals drove record earnings of $143 million, or $157 million when excluding merger-related costs.  We strengthened the franchise by expanding into new and diversified markets with strong demographics, and ensured top market share across our major markets.  We remained diligent on expense management while continuing to make technology and staffing investments to support future growth – helping to drive our 2018 efficiency ratio to 54.6%.  In addition, we stayed disciplined and balanced on lending decisions as our credit quality ratios have continued to improve to be at or near historic lows.”

Mr. Clossin added, “We remain well-positioned for continued success due to our well-defined operational and growth strategies.  Furthermore, we are excited about our opportunities for the upcoming year, and look forward to providing additional value to our customers and shareholders.”

Balance Sheet
Portfolio loans of $7.7 billion, as of December 31, 2018, increased 20.7% when compared to the prior year period due to the acquisitions of FTSB and FFKT.  Total organic loans were down 1.3% year-over-year, when excluding the consumer loan portfolio de-emphasis strategy, or down 1.7% in total.  The year-over-year decline in total organic loan growth resulted from targeted reductions in the consumer portfolio to reduce its risk profile, lower home equity loan balances due to lower demand as a result of higher interest rates and tax changes, elevated levels of commercial real estate loans moving to an aggressive secondary financing market, and continued deleveraging by commercial customers reflective of the current operating environment and higher cash levels from tax reform.  Total deposits increased 25.4% year-over-year to $8.8 billion due to the FTSB and FFKT acquisitions.  Continuing to reflect the strength of our legacy footprint, total deposits, excluding CDs, increased 2.5% organically, driven by 5.8% organic growth in interest bearing and non-interest bearing demand deposits.

Credit Quality
Our underlying credit fundamentals continue to be reflective of our strong legacy of credit and risk management.  During the fourth quarter of 2018, our credit quality ratios remained strong as we balanced disciplined loan origination growth in the current environment with our prudent lending standards.  Our credit quality measures have been at or near historic lows over the last several periods, and, as such, variability from quarter to quarter may occur, which is not suggestive of a change in the direction of overall credit quality.

As of December 31, 2018, despite the addition of approximately $1.4 billion of portfolio loans from the acquisitions of FTSB and FFKT, non-performing loans and non-performing assets decreased year-over-year both on an absolute dollar basis and as a percentage of the portfolio.  Criticized and classified loan balances decreased as a percentage of total loans year-over-year.

Further reflecting the continued high quality of the loan portfolio, on a year-to-date basis for 2018, the provision for credit losses decreased 22.3% year-over-year to $7.8 million, and annualized net loan charge-offs to average loans decreased 7 basis points year-over-year to 0.06%.

Net Interest Margin and Income
The net interest margin for the fourth quarter of 2018 increased 29 basis points year-over-year to 3.72%.  The net interest margin benefited from increases in the Federal Reserve Board’s target federal funds rate through the past year and a full quarter benefit from the higher margins on the acquired FFKT net assets, partially offset by higher funding costs as well as a flattening of the yield curve.  Also impacting the year-over-year change in the net interest margin was a six basis point reduction related to the lower tax-equivalency of the state and local municipal tax-exempt securities resulting from the “Tax Cuts and Jobs Act”.  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.  Further, reflecting the benefit of our legacy deposit footprint, the year-to-date deposit beta on the four federal funds rate increases since the year ago quarter was 17%, or only 12% when including the strong growth in non-interest bearing deposits.  Lastly, accretion from acquisitions benefited the fourth quarter net interest margin by approximately 23 basis points, as compared to 6 basis points in the prior year period, and it was 14 basis points for 2018 versus 8 basis points during 2017.

Net interest income increased $28.6 million, or 39.1%, during the fourth quarter of 2018 as compared to the same quarter of 2017 due to a 25.5% increase in average total earning assets, primarily driven by the FTSB and FFKT acquisitions and related accretion from purchase accounting, as well as an overall higher net interest margin.  For the year ended December 31, 2018, net interest income increased $56.9 million, or 19.6%, due to higher average total earning assets from the $2.2 billion in earning assets acquired from FTSB and FFKT and a larger investment portfolio, and the aforementioned higher net interest margin.

Non-Interest Income
For the fourth quarter of 2018, non-interest income of $26.6 million increased $3.6 million, or 15.8%, from the fourth quarter of 2017, driven by the FTSB and FFKT acquisitions.  The associated larger customer deposit base and higher transaction volumes drove the year-over-year increases in electronic banking fees and service charges on deposits.  Other income increased $0.8 million primarily due to an increase in payment processing fee income.  Net securities losses of $1.3 million were primarily due to a market adjustment on the deferred compensation plan, while an offsetting reduction of $1.1 million is recorded in employee benefits expense. 

For the twelve months ended December 31, 2018, non-interest income increased $11.4 million, or 12.9%.  The primary drivers of this year-to-date increase were increased customer levels and transaction volumes from the two acquisitions, higher trust assets from a combination of the FFKT acquisition and organic growth, and higher mortgage banking income due to the strength of the residential mortgage lending program; partially offset by net securities losses as discussed above.

Non-Interest Expense
Total operating expenses continued to be well-controlled during the fourth quarter of 2018, despite the inclusion of FFKT’s operating expenses since August 20th.  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.  Excluding merger-related expenses, non-interest expense increased $15.2 million, or 28.0%, compared to the prior year period, reflecting the two acquisitions.  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 two acquisitions.  As mentioned above, the overall employee benefits increase was partially mitigated by a $1.1 million reduction in the deferred compensation plan obligation due to market declines.  These increases were balanced by strong discretionary expense management as demonstrated by the 146 basis point year-over-year decrease in the efficiency ratio to 53.62% for the fourth quarter of 2018.

Excluding merger-related expenses in both years, non-interest expense during the twelve months of 2018 increased $27.4 million, or 12.5%, compared to the prior year period, reflecting the acquisition of both FTSB and FFKT, partially offset by strong discretionary expense management.

Provision for Income Taxes
The effective income tax rate and associated provision for income taxes for the fourth quarter of 2018 are reflective of the late-2017 passage of the “Tax Cuts and Jobs Act”, lowering the statutory Federal income tax rate for corporations to 21%.  During the fourth quarter, the effective tax rate was 19.37% as compared to 59.14% last year, which included the impact of the deferred tax revaluation adjustment, while the provision for income taxes decreased $12.4 million to $10.6 million, despite higher year-over-year pre-tax income.

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 December 31, 2018, Tier I leverage was 10.74%, Tier I Risk-Based capital was 15.09%, Total Risk-Based capital was 15.99%, and the Common Equity Tier 1 capital ratio (“CET 1”) was 13.14%.  Tangible common equity also remained strong, increasing to 9.28% at period-end from 8.79% as of December 31, 2017.  Record earnings achieved during 2017, strong regulatory capital and liquidity positions, and solid execution on well-defined long-term operational and growth strategies enabled WesBanco to increase the quarterly cash dividend by 11.5% to $0.29 per share during February 2018.  This was the eleventh increase during the last eight years, representing a cumulative increase of 107%.

Conference Call and Webcast
WesBanco will host a conference call to discuss the Company’s financial results for the fourth quarter of 2018 at 10:00 a.m. ET on Tuesday, January 29, 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 10126808.  The replay will begin at approximately 12:00 p.m. ET on January 29, and end at 12 a.m. ET on February 12.  An archive of the webcast will be available for one year on the Investor Relations section of the Company’s website (www.wesbanco.com).

Forward-Looking Statements
Forward-looking statements in this report relating to WesBanco’s plans, strategies, objectives, expectations, intentions and adequacy of resources, are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995.  The information contained in this report should be read in conjunction with WesBanco’s Form 10-K for the year ended December 31, 2017 and documents subsequently filed by WesBanco with the Securities and Exchange Commission (“SEC”), including WesBanco’s Form 10-Q for the quarters ended March 31, June 30, and September 30, 2018, 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 FFKT 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 FFKT may not be fully realized within the expected timeframes; disruption from the merger of WesBanco and FFKT 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.

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 December 31, 2018).  WesBanco is a diversified and well-balanced financial services institution, with a community bank at its core, built upon a strong legacy of credit and risk management.  WesBanco has meaningful market share across its key geographies maintained by its commitment to dedicated customer service and solid fee-based businesses. It also provides wealth management services through a century-old trust and wealth management business, with approximately $4.3 billion of assets under management (as of December 31, 2018), and serves as registered investment advisor to a proprietary mutual fund family, the WesMark Funds.  WesBanco’s banking subsidiary, WesBanco Bank, Inc., operates 209 financial centers in the states of Indiana, Kentucky, Ohio, Pennsylvania, and West Virginia.  In addition, WesBanco operates an insurance agency, WesBanco Insurance Services, Inc., and a full service broker/dealer, WesBanco Securities, Inc.

WESBANCO, INC.

Consolidated Selected Financial Highlights

Page 5

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

For the Three Months Ended

For the Twelve Months Ended

STATEMENT OF INCOME

December 31,

December 31,

Interest and dividend income

2018

2017

% Change

2018

2017

% Change

Loans, including fees

$             97,685

$               69,408

40.7

$          331,961

$             272,007

22.0

Interest and dividends on securities:

Taxable 

16,196

9,948

62.8

56,898

38,631

47.3

Tax-exempt

5,562

4,872

14.2

20,778

19,489

6.6

Total interest and dividends on securities

21,758

14,820

46.8

77,676

58,120

33.6

Other interest income 

1,944

623

212.0

5,320

2,297

131.6

          Total interest and dividend income

121,387

84,851

43.1

414,957

332,424

24.8

Interest expense

Interest bearing demand deposits

4,000

2,039

96.2

13,144

6,452

103.7

Money market deposits

1,683

805

109.1

5,016

2,775

80.8

Savings deposits

452

189

139.2

1,225

745

64.4

Certificates of deposit

3,662

2,597

41.0

12,450

10,108

23.2

Total interest expense on deposits

9,797

5,630

74.0

31,835

20,080

58.5

Federal Home Loan Bank borrowings

6,191

3,682

68.1

23,333

13,290

75.6

Other short-term borrowings

1,221

489

149.7

3,717

1,442

157.8

Subordinated debt and junior subordinated debt 

2,411

1,868

29.1

8,836

7,317

20.8

Total interest expense

19,620

11,669

68.1

67,721

42,129

60.7

Net interest income 

101,767

73,182

39.1

347,236

290,295

19.6

Provision for credit losses

2,854

2,376

20.1

7,764

9,986

(22.3)

Net interest income after provision for credit losses

98,913

70,806

39.7

339,472

280,309

21.1

Non-interest income

Trust fees

6,103

5,667

7.7

24,623

22,740

8.3

Service charges on deposits

7,387

5,278

40.0

23,670

20,532

15.3

Electronic banking fees

6,604

4,788

37.9

23,300

19,183

21.5

Net securities brokerage revenue

1,871

1,508

24.1

7,186

6,672

7.7

Bank-owned life insurance

1,312

1,123

16.8

6,427

4,794

34.1

Mortgage banking income

1,543

1,542

0.1

5,840

5,053

15.6

Net securities (losses) / gains

(1,303)

56

(2,426.8)

(900)

567

(258.7)

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

(117)

649

(118.0)

524

658

(20.4)

Other income

3,161

2,323

36.1

9,606

8,641

11.2

Total non-interest income

26,561

22,934

15.8

100,276

88,840

12.9

Non-interest expense

Salaries and wages

32,389

25,786

25.6

114,602

97,361

17.7

Employee benefits

7,298

6,263

16.5

30,079

29,933

0.5

Net occupancy

5,455

4,132

32.0

19,165

17,101

12.1

Equipment 

4,667

3,983

17.2

17,207

16,026

7.4

Marketing

1,402

1,238

13.2

5,368

5,720

(6.2)

FDIC insurance 

927

827

12.1

3,242

3,504

(7.5)

Amortization of intangible assets

2,762

1,204

129.4

6,980

4,940

41.3

Restructuring and merger-related expense

1,389

454

205.9

17,860

945

1,789.9

Other operating expenses  

14,701

10,950

34.3

50,721

45,330

11.9

Total non-interest expense

70,990

54,837

29.5

265,224

220,860

20.1

Income before provision for income taxes

54,484

38,903

40.1

174,524

148,289

17.7

Provision for income taxes 

10,556

23,006

(54.1)

31,412

53,807

(41.6)

Net Income

$             43,928

$               15,897

176.3

$          143,112

$               94,482

51.5

Taxable equivalent net interest income

$          103,246

$            75,805

36.2

$          352,760

$          300,789

17.3

Per common share data

Net income per common share – basic

$                 0.80

$                   0.36

122.2

$                 2.93

$                   2.15

36.3

Net income per common share – diluted

0.80

0.36

122.2

2.92

2.14

36.4

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

0.82

0.66

24.2

3.21

2.45

31.0

Dividends declared

0.29

0.26

11.5

1.16

1.04

11.5

Book value (period end)

36.24

31.68

14.4

36.24

31.68

14.4

Tangible book value (period end) (1)

19.63

18.42

6.6

19.63

18.42

6.6

Average common shares outstanding – basic

54,598,142

44,036,416

24.0

48,889,041

44,003,208

11.1

Average common shares outstanding – diluted

54,706,691

44,109,767

24.0

49,022,990

44,075,293

11.2

Period end common shares outstanding

54,598,134

44,043,244

24.0

54,598,134

44,043,244

24.0

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

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

 

WESBANCO, INC.

Consolidated Selected Financial Highlights

Page 6

(unaudited, dollars in thousands)

Selected ratios

For the Twelve Months Ended

December 31,

2018

2017

% Change

Return on average assets

1.26

%

0.96

%

31.25

%

Return on average assets, excluding

    after-tax merger-related expenses and

    net deferred tax asset revaluation (1)

1.39

1.09

27.52

Return on average equity

8.68

6.83

27.09

Return on average equity, excluding

    after-tax merger-related expenses and

    net deferred tax asset revaluation (1)

9.54

7.79

22.46

Return on average tangible equity (1)

16.24

12.23

32.79

Return on average tangible equity, excluding 

    after-tax merger-related expenses and

    net deferred tax asset revaluation (1)

17.78

13.90

27.91

Yield on earning assets (2) 

4.19

3.93

6.62

Cost of interest bearing liabilities

0.92

0.64

43.75

Net interest spread (2)

3.27

3.29

(0.61)

Net interest margin (2)

3.52

3.44

2.33

Efficiency (1) (2)

54.60

56.44

(3.26)

Average loans to average deposits

87.60

89.86

(2.52)

Annualized net loan charge-offs/average loans

0.06

0.13

(53.85)

Effective income tax rate (3)

18.00

36.29

(50.40)

For the Quarter Ended

Dec. 31,

Sept. 30,

June 30,

Mar. 31,

Dec. 31,

2018

2018

2018

2018

2017

Return on average assets

1.39

%

1.10

%

1.22

%

1.36

%

0.64

%

Return on average assets, excluding

    after-tax merger-related expenses and

    net deferred tax asset revaluation (1)

1.42

1.39

1.38

1.37

1.16

Return on average equity

8.94

7.50

8.77

9.70

4.48

Return on average equity, excluding

    after-tax merger-related expenses and

    net deferred tax asset revaluation (1)

9.16

9.47

9.90

9.76

8.17

Return on average tangible equity (1)

17.67

14.25

15.87

17.10

8.05

Return on average tangible equity, excluding 

    after-tax merger-related expenses and

    net deferred tax asset revaluation (1)

18.09

17.85

17.85

17.20

14.36

Yield on earning assets (2) 

4.42

4.21

4.11

3.98

3.95

Cost of interest bearing liabilities

0.97

0.95

0.91

0.80

0.71

Net interest spread (2)

3.45

3.26

3.20

3.18

3.24

Net interest margin (2)

3.72

3.50

3.43

3.38

3.43

Efficiency (1) (2) 

53.62

55.55

54.28

55.12

55.08

Average loans to average deposits

85.94

87.56

88.15

89.26

90.26

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

0.14

(0.02)

0.03

0.07

0.16

Effective income tax rate (3)

19.37

16.71

18.11

17.28

59.14

Trust assets, market value at period end

$     4,269,961

$        4,743,894

$        4,044,207

$        4,027,358

$        3,943,519

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

(2) The yield on earning assets, net interest margin, net interest spread and efficiency ratios are presented on a fully 

    taxable-equivalent (FTE) and annualized basis. The FTE basis adjusts for the tax benefit of income on certain tax-exempt 

   loans and investments.   WesBanco believes this measure to be the preferred industry measurement of net interest income and

   provides a relevant comparison between taxable and non-taxable amounts.

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

 

WESBANCO, INC.

Consolidated Selected Financial Highlights

Page 7

(unaudited, dollars in thousands, except shares)

% Change

Balance sheets

December 31,

September 30,

December 31, 2018

Assets

2018

2017

% Change

2018

to Sept. 30, 2018

Cash and due from banks

$           124,650

$          97,746

27.5

$              184,826

(32.6)

Due from banks – interest bearing

44,536

19,826

124.6

88,854

(49.9)

Securities:

Equity securities, at fair value

11,737

13,457

(12.8)

12,784

(8.2)

Available-for-sale debt securities, at fair value

2,114,129

1,261,865

67.5

2,008,232

5.3

Held-to-maturity debt securities (fair values of $1,020,743; $1,023,784 

and $1,014,361, respectively)

1,020,934

1,009,500

1.1

1,025,538

(0.4)

     Total securities

3,146,800

2,284,822

37.7

3,046,554

3.3

Loans held for sale

8,994

20,320

(55.7)

55,913

(83.9)

Portfolio loans:

Commercial real estate

3,853,695

2,994,448

28.7

3,906,221

(1.3)

Commercial and industrial

1,265,460

1,125,327

12.5

1,292,073

(2.1)

Residential real estate 

1,611,607

1,353,301

19.1

1,598,477

0.8

Home equity

599,331

529,196

13.3

604,106

(0.8)

Consumer 

326,188

339,169

(3.8)

325,546

0.2

Total portfolio loans, net of unearned income

7,656,281

6,341,441

20.7

7,726,423

(0.9)

Allowance for loan losses

(48,948)

(45,284)

(8.1)

(48,902)

(0.1)

     Net portfolio loans

7,607,333

6,296,157

20.8

7,677,521

(0.9)

Premises and equipment, net

166,925

130,722

27.7

159,284

4.8

Accrued interest receivable

38,853

29,728

30.7

39,465

(1.6)

Goodwill and other intangible assets, net

918,850

589,264

55.9

928,083

(1.0)

Bank-owned life insurance

225,317

192,589

17.0

223,995

0.6

Other assets

176,374

155,004

13.8

194,984

(9.5)

Total Assets

$    12,458,632

$   9,816,178

26.9

$       12,599,479

(1.1)

Liabilities

Deposits:

Non-interest bearing demand

$        2,441,041

$      1,846,748

32.2

$           2,411,862

1.2

Interest bearing demand

2,146,508

1,625,015

32.1

2,187,662

(1.9)

Money market

1,142,925

1,024,856

11.5

1,178,950

(3.1)

Savings deposits

1,645,549

1,269,912

29.6

1,649,684

(0.3)

Certificates of deposit

1,455,610

1,277,057

14.0

1,513,600

(3.8)

     Total deposits

8,831,633

7,043,588

25.4

8,941,758

(1.2)

Federal Home Loan Bank borrowings

1,054,174

948,203

11.2

1,131,253

(6.8)

Other short-term borrowings

290,522

184,805

57.2

294,281

(1.3)

Subordinated debt and junior subordinated debt 

189,842

164,327

15.5

189,745

0.1

     Total borrowings

1,534,538

1,297,335

18.3

1,615,279

(5.0)

Accrued interest payable

4,627

3,178

45.6

6,623

(30.1)

Other liabilities

109,007

76,756

42.0

108,550

0.4

Total Liabilities

10,479,805

8,420,857

24.5

10,672,210

(1.8)

Shareholders’ Equity

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

none outstanding

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

     2018 and 2017, respectively; 54,604,294,  44,043,244 and 54,604,294 shares

issued, respectively; 54,598,134, 43,931,715 and 54,603,967 shares

113,758

91,756

24.0

113,758

outstanding, respectively

Capital surplus

1,166,701

684,730

70.4

1,165,006

0.1

Retained earnings

737,581

651,357

13.2

709,477

4.0

Treasury stock (6,160,  0 and 327 shares – at cost, respectively)

(274)

(100.0)

(15)

(1,726.7)

Accumulated other comprehensive loss

(37,871)

(31,495)

(20.2)

(59,873)

36.7

Deferred benefits for directors

(1,068)

(1,027)

(4.0)

(1,084)

1.5

Total Shareholders’ Equity

1,978,827

1,395,321

41.8

1,927,269

2.7

Total Liabilities and Shareholders’ Equity

$    12,458,632

$   9,816,178

26.9

$       12,599,479

(1.1)

 

WESBANCO, INC.

Consolidated Selected Financial Highlights

Page 8

(unaudited, dollars in thousands)

Average balance sheet and

net interest margin analysis

For the Three Months Ended December 31,

For the Year Ended December 31,

2018

2017

2018

2017

Average 

Average

Average 

Average

Average 

Average

Average 

Average

Assets

Balance

Rate

Balance

Rate

Balance

Rate

Balance

Rate

Due from banks – interest bearing

$          169,189

2.21

%

$            18,593

0.97

%

$                 80,535

2.24

%

$           13,811

0.85

%

Loans, net of unearned income (1)

7,685,430

5.04

6,392,138

4.31

7,013,877

4.73

6,358,845

4.28

Securities: (2)

    Taxable

2,317,542

2.80

1,615,700

2.46

2,109,191

2.70

1,591,149

2.43

    Tax-exempt (3)

818,456

3.44

723,569

4.14

768,304

3.42

723,019

4.15

        Total securities

3,135,998

2.96

2,339,269

2.98

2,877,495

2.89

2,314,168

2.96

Other earning assets 

52,691

7.62

47,659

4.85

55,302

6.37

47,548

4.58

         Total earning assets (3)

11,043,308

4.42

%

8,797,659

3.95

%

10,027,209

4.19

%

8,734,372

3.93

%

Other assets

1,522,572

1,110,285

1,310,170

1,119,940

Total Assets

$   12,565,880

$     9,907,944

$        11,337,379

$    9,854,312

Liabilities and Shareholders’ Equity

Interest bearing demand deposits

$        2,183,732

0.73

%

$        1,645,812

0.49

%

$            1,929,876

0.68

%

$      1,613,451

0.40

%

Money market accounts 

1,153,806

0.58

1,003,186

0.32

1,049,059

0.48

1,012,660

0.27

Savings deposits

1,647,144

0.11

1,257,094

0.06

1,454,525

0.08

1,248,985

0.06

Certificates of deposit

1,486,471

0.98

1,311,331

0.79

1,396,446

0.89

1,383,807

0.73

    Total interest bearing deposits

6,471,153

0.60

5,217,423

0.43

5,829,906

0.55

5,258,903

0.38

Federal Home Loan Bank borrowings

1,069,944

2.30

961,164

1.52

1,121,108

2.08

965,795

1.38

Other borrowings

301,813

1.60

213,069

0.91

260,388

1.43

187,298

0.77

Subordinated debt and junior subordinated debt 

189,769

5.04

164,285

4.51

176,866

5.00

164,156

4.46

      Total interest bearing liabilities 

8,032,679

0.97

%

6,555,941

0.71

%

7,388,268

0.92

%

6,576,152

0.64

%

Non-interest bearing demand deposits

2,472,076

1,864,776

2,177,142

1,817,782

Other liabilities

111,595

80,964

123,544

76,443

Shareholders’ equity

1,949,530

1,406,263

1,648,425

1,383,935

Total Liabilities and Shareholders’ Equity

$   12,565,880

$     9,907,944

$        11,337,379

$    9,854,312

Taxable equivalent net interest spread

3.45

%

3.24

%

3.27

%

3.29

%

Taxable equivalent net interest margin 

3.72

%

3.43

%

3.52

%

3.44

%

(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 $1.2 million for the three months ended December 31, 2018 and 2017,  and $3.4 million and $3.6 million for

the years ended December 31, 2018 and 2017, respectively.

Additionally, loan accretion included in interest income on loans acquired from prior acquisitions was $5.9 and $1.0  million for the three months ended December 31, 2018 and 2017,

respectively, and $11.7 million and $5.7 million  for the years ended December 31, 2018 and 2017, respectively.

Accretion on interest bearing liabilities acquired from the prior acquisitions was $0.5 million and $0.3 million for the three months ended December 31, 2018 and 2017, respectively, 

and $2.0 million and $1.4 million  for the years ended December 31, 2018 and 2017, 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 2018 and 35% for each prior period presented.

 

WESBANCO, INC.

Consolidated Selected Financial Highlights

 Page 9 

(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

2018

2018

2018

2018

2017

Loans, including fees

$                        97,685

$                86,605

$              78,538

$                69,237

$              69,408

Interest and dividends on securities:

Taxable 

16,196

14,964

14,194

11,543

9,948

Tax-exempt

5,562

5,326

5,055

4,834

4,872

Total interest and dividends on securities

21,758

20,290

19,249

16,377

14,820

Other interest income 

1,944

1,498

1,101

803

623

          Total interest and dividend income

121,387

108,393

98,888

86,417

84,851

Interest expense

Interest bearing demand deposits

4,000

3,501

3,150

2,524

2,039

Money market deposits

1,683

1,360

1,093

878

805

Savings deposits

452

352

227

189

189

Certificates of deposit

3,662

3,276

2,977

2,536

2,597

Total interest expense on deposits

9,797

8,489

7,447

6,127

5,630

Federal Home Loan Bank borrowings

6,191

6,691

5,953

4,498

3,682

Other short-term borrowings

1,221

965

973

558

489

Subordinated debt and junior subordinated debt

2,411

2,315

2,168

1,942

1,868

Total interest expense

19,620

18,460

16,541

13,125

11,669

Net interest income 

101,767

89,933

82,347

73,292

73,182

Provision for credit losses

2,854

1,035

1,708

2,168

2,376

Net interest income after provision for credit losses

98,913

88,898

80,639

71,124

70,806

Non-interest income

Trust fees

6,103

6,265

5,752

6,503

5,667

Service charges on deposits

7,387

6,313

5,146

4,822

5,278

Electronic banking fees

6,604

6,139

5,728

4,829

4,788

Net securities brokerage revenue

1,871

1,836

1,809

1,670

1,508

Bank-owned life insurance

1,312

1,232

1,128

2,756

1,123

Mortgage banking income

1,543

1,521

1,670

1,004

1,542

Net securities(losses)/gains

(1,303)

84

358

(39)

56

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

(117)

150

229

262

649

Other income

3,161

2,684

1,588

2,173

2,323

Total non-interest income

26,561

26,224

23,408

23,980

22,934

Non-interest expense

Salaries and wages

32,389

30,335

26,872

25,006

25,786

Employee benefits

7,298

7,905

7,965

6,912

6,263

Net occupancy

5,455

4,957

4,103

4,656

4,132

Equipment 

4,667

4,488

4,095

3,949

3,983

Marketing

1,402

1,446

1,405

1,116

1,238

FDIC insurance 

927

789

868

658

827

Amortization of intangible assets

2,762

1,821

1,312

1,086

1,204

Restructuring and merger-related expense

1,389

10,811

5,412

245

454

Other operating expenses  

14,701

13,568

11,511

10,943

10,950

Total non-interest expense

70,990

76,120

63,543

54,571

54,837

Income before provision for income taxes

54,484

39,002

40,504

40,533

38,903

Provision for income taxes 

10,556

6,516

7,335

7,004

23,006

Net Income

$                        43,928

$                32,486

$              33,169

$                33,529

$              15,897

Taxable equivalent net interest income

$                     103,246

$               91,348

$             83,691

$               74,577

$             75,805

Per common share data

Net income per common share – basic

$                            0.80

$                    0.65

$                  0.71

$                    0.76

$                  0.36

Net income per common share – diluted

$                            0.80

$                    0.64

$                  0.71

$                    0.76

$                  0.36

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

$                            0.82

$                    0.81

$                  0.80

$                    0.76

$                  0.66

Dividends declared

$                            0.29

$                    0.29

$                  0.29

$                    0.29

$                  0.26

Book value (period end)

$                          36.24

$                  35.30

$                32.68

$                  31.84

$                31.68

Tangible book value (period end) (1)

$                          19.63

$                  18.54

$                18.59

$                  18.56

$                18.42

Average common shares outstanding – basic

54,598,142

50,277,847

46,498,305

44,050,701

44,036,416

Average common shares outstanding – diluted

54,706,691

50,432,112

46,639,780

44,168,242

44,109,767

Period end common shares outstanding

54,598,134

54,603,967

46,643,250

44,060,957

44,043,244

Full time equivalent employees

2,388

2,404

2,040

1,939

1,940

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

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

 

WESBANCO, INC.

Consolidated Selected Financial Highlights

 Page 10 

(unaudited, dollars in thousands)

Quarter Ended

Dec. 31,

Sept. 30,

June 30,

Mar. 31,

Dec. 31,

Asset quality data

2018

2018

2018

2018

2017

Non-performing assets:

Troubled debt restructurings – accruing

$           5,744

$           6,338

$           6,460

$           6,858

$           6,571

Non-accrual loans:

Troubled debt restructurings

2,855

2,036

2,514

2,397

2,865

Other non-accrual loans

27,845

29,238

29,467

29,989

33,960

    Total non-accrual loans

30,700

31,274

31,981

32,386

36,825

    Total non-performing loans 

36,444

37,612

38,441

39,244

43,396

Other real estate and repossessed assets

7,265

6,877

4,384

4,067

5,297

Total non-performing assets

$         43,709

$         44,489

$         42,825

$         43,311

$         48,693

Past due loans (1):

Loans past due 30-89 days

$         19,569

$         18,016

$         13,357

$         14,536

$         11,172

Loans past due 90 days or more

4,077

2,451

1,881

1,579

2,726

Total past due loans

$         23,646

$         20,467

$         15,238

$         16,115

$         13,898

Criticized and classified loans (2):

Criticized loans

$         51,710

$         46,370

$         34,045

$         33,785

$         36,092

Classified loans

31,244

31,437

38,982

34,566

37,858

Total criticized and classified loans

$         82,954

$         77,807

$         73,027

$         68,351

$         73,950

Loans past due 30-89 days / total portfolio loans

0.26

%

0.23

%

0.20

%

0.23

%

0.18

%

Loans past due 90 days or more / total portfolio loans

0.05

0.03

0.03

0.02

0.04

Non-performing loans / total portfolio loans

0.48

0.49

0.57

0.62

0.68

Non-performing assets/total portfolio loans, other

real estate and repossessed assets

0.57

0.58

0.63

0.68

0.77

Non-performing assets / total assets

0.35

0.35

0.39

0.42

0.50

Criticized and classified loans / total portfolio loans

1.08

1.01

1.08

1.08

1.17

Allowance for loan losses

Allowance for loan losses

$         48,948

$         48,902

$         47,638

$         46,334

$         45,284

Provision for credit losses

2,854

1,035

1,708

2,168

2,376

Net loan and deposit account overdraft charge-offs

2,750

(306)

425

1,063

2,652

Annualized net loan charge-offs /average loans

0.14

%

(0.02)

%

0.02

%

0.07

%

0.16

%

Allowance for loan losses / total portfolio loans

0.64

%

0.63

%

0.70

%

0.73

%

0.71

%

Allowance for loan losses / non-performing loans

1.34

x

1.30

x

1.24

x

1.18

x

1.04

x

Allowance for loan losses / non-performing loans and

loans past due 

0.81

x

0.84

x

0.89

x

0.84

x

0.79

x

Quarter Ended

Dec. 31,

Sept. 30,

June 30,

Mar. 31,

Dec. 31,

2018

2018

2018

2018

2017

Capital ratios

Tier I leverage capital

10.74

%

11.22

%

10.21

%

10.56

%

10.39

%

Tier I risk-based capital

15.09

14.32

14.26

14.31

14.12

Total risk-based capital

15.99

15.20

15.26

15.35

15.16

Common equity tier 1 capital ratio (CET 1)

13.14

12.41

12.38

12.33

12.14

Average shareholders’ equity to average assets

15.51

14.65

13.89

14.02

14.19

Tangible equity to tangible assets (3)

9.28

8.66

8.43

8.46

8.79

(1) Excludes non-performing loans.

(2) Criticized and classified loans may include loans that are also reported as non-performing or past due.

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

 

NON-GAAP FINANCIAL MEASURES

Page 11

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

Three Months Ended

Year to Date 

Dec. 31,

Sept. 30,

June 30,

Mar. 31,

Dec. 31,

Dec. 31,

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

2018

2018

2018

2018

2017

2018

2017

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

Net income (annualized)

$             174,280

$         128,886

$         133,039

$         135,979

$           63,068

$         143,112

$        94,482

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

4,353

33,885

17,150

784

1,170

14,109

614

Plus: net deferred tax asset revaluation (annualized) 

50,703

12,780

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

178,633

162,771

150,189

136,763

114,941

157,221

107,876

Average total assets

$        12,565,880

$    11,738,796

$    10,918,731

$      9,993,364

$      9,907,944

$    11,337,379

$   9,854,312

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

1.42%

1.39%

1.38%

1.37%

1.16%

1.39%

1.09%

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

Net income (annualized)

$             174,280

$         128,886

$         133,039

$         135,979

$           63,068

$         143,112

$        94,482

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

4,353

33,885

17,150

784

1,170

14,109

614

Plus: net deferred tax asset revaluation (annualized) 

50,703

12,780

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

178,633

162,771

150,189

136,763

114,941

157,221

107,876

Average total shareholders’ equity

1,949,530

1,719,489

1,517,036

1,401,271

1,406,263

1,648,425

1,383,935

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

9.16%

9.47%

9.90%

9.76%

8.17%

9.54%

7.79%

Return on average tangible equity:

Net income (annualized)

$             174,280

$         128,886

$         133,039

$         135,979

$           63,068

$         143,112

$        94,482

Plus: amortization of intangibles (annualized) (1)

8,657

5,707

4,156

3,479

3,104

5,514

3,211

Net income before amortization of intangibles (annualized)

182,937

134,593

137,195

139,458

66,172

148,626

97,693

Average total shareholders’ equity

1,949,530

1,719,489

1,517,036

1,401,271

1,406,263

1,648,425

1,383,935

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

(914,214)

(775,267)

(652,318)

(585,711)

(584,227)

(732,978)

(584,885)

Average tangible equity

$          1,035,316

$         944,222

$         864,718

$         815,560

$         822,036

$         915,447

$      799,050

Return on average tangible equity

17.67%

14.25%

15.87%

17.10%

8.05%

16.24%

12.23%

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

Net income (annualized)

$             174,280

$         128,886

$         133,039

$         135,979

$           63,068

$         143,112

$        94,482

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

4,353

33,885

17,150

784

1,170

14,109

614

Plus: net deferred tax asset revaluation (annualized) 

50,703

12,780

Plus: amortization of intangibles (annualized) (1)

8,657

5,707

4,156

3,479

3,104

5,514

3,211

Net income before amortization of intangibles and excluding 

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

187,290

168,478

154,345

140,242

118,045

162,735

111,087

Average total shareholders’ equity

1,949,530

1,719,489

1,517,036

1,401,271

1,406,263

1,648,425

1,383,935

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

(914,214)

(775,267)

(652,318)

(585,711)

(584,227)

(732,978)

(584,885)

Average tangible equity

$          1,035,316

$         944,222

$         864,718

$         815,560

$         822,036

$         915,447

$      799,050

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

18.09%

17.85%

17.85%

17.20%

14.36%

17.78%

13.90%

Efficiency ratio:

Non-interest expense

$               70,990

$           76,120

$           63,543

$           54,571

$           54,837

$         265,224

$      220,860

Less: restructuring and merger-related expense

(1,389)

(10,811)

(5,412)

(245)

(454)

(17,860)

(945)

Non-interest expense excluding restructuring and merger-related expense

69,601

65,309

58,131

54,326

54,383

247,364

219,915

Net interest income on a fully taxable equivalent basis

103,246

91,348

83,691

74,577

75,805

352,760

300,789

Non-interest income

26,561

26,224

23,408

23,980

22,934

100,276

88,840

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

$             129,807

$         117,572

$         107,099

$           98,557

$           98,739

$         453,036

$      389,629

Efficiency Ratio

53.62%

55.55%

54.28%

55.12%

55.08%

54.60%

56.44%

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

Net income

$               43,928

$           32,486

$           33,169

$           33,529

$           15,897

$         143,112

$        94,482

Add: Net deferred tax asset revaluation 

12,780

12,780

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

1,097

8,541

4,276

193

295

14,109

614

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

$               45,025

$           41,027

$           37,445

$           33,722

$           28,972

$         157,221

$      107,876

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

Net income per diluted share

$                   0.80

$               0.64

$               0.71

$               0.76

$               0.36

$               2.92

$            2.14

Add: Net deferred tax asset revaluation per diluted share

0.29

0.29

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

0.02

0.17

0.09

0.01

0.29

0.02

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

$                   0.82

$               0.81

$               0.80

$               0.76

$               0.66

$               3.21

$            2.45

Period End

Dec. 31,

Sept. 30,

June 30,

Mar. 31,

Dec. 31,

2018

2018

2018

2018

2017

Tangible book value per share:

Total shareholders’ equity

$          1,978,827

$      1,927,269

$      1,524,106

$      1,403,026

$      1,395,321

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

(906,887)

(915,022)

(657,111)

(585,316)

(583,903)

Tangible equity

1,071,940

1,012,247

866,995

817,711

811,418

Common shares outstanding

54,598,134

54,603,967

46,643,250

44,060,957

44,043,244

Tangible book value per share

$                 19.63

$             18.54

$             18.59

$             18.56

$             18.42

Tangible equity to tangible assets:

Total shareholders’ equity

$          1,978,827

$      1,927,269

$      1,524,106

$      1,403,026

$      1,395,321

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

(906,887)

(915,022)

(657,111)

(585,316)

(583,903)

Tangible equity

1,071,940

1,012,247

866,995

817,711

811,418

Total assets

12,458,632

12,599,479

10,946,584

10,245,419

9,816,178

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

(906,887)

(915,022)

(657,111)

(585,316)

(583,903)

Tangible assets

$        11,551,745

$    11,684,457

$    10,289,473

$      9,660,103

$      9,232,275

Tangible equity to tangible assets

9.28%

8.66%

8.43%

8.46%

8.79%

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

 

Cision View original content to download multimedia:http://www.prnewswire.com/news-releases/wesbanco-announces-fourth-quarter-2018-net-income-300785378.html

SOURCE WesBanco, Inc.