WESBANCO, INC. WHEELING, W.Va., Jan. 24, 2017 /PRNewswire/ -- Todd F. Clossin, President and Chief Executive Officer of WesBanco, Inc. (NASDAQ: WSBC), a multi-state bank holding company based in Wheeling, WV, today announced net income and related earnings per share for the three and twelve months ended December 31, 2016. Net income for 2016 was $86.6 million or $2.16 per diluted share compared to $80.8 million or $2.15 per diluted share for 2015. Net income for the three months ended December 31, 2016 was $24.2 million, while diluted earnings per share were $0.55, compared to $23.0 million or $0.60 per diluted share for the fourth quarter of 2015. Excluding after-tax merger-related expenses (non-GAAP measure) for 2016, net income increased 8.3% to $95.3 million compared to $88.0 million for 2015, while diluted earnings per share totaled $2.37, compared to $2.34 per share for 2015. Excluding after-tax merger-related expenses (non-GAAP measure), net income for the three months ended December 31, 2016 was $26.0 million, while diluted earnings per share were $0.59, compared to $23.0 million or $0.60 per diluted share for the fourth quarter of 2015.
For the Three Months Ended December 31, For the Twelve Months Ended December 31,
--------------------------------------- ----------------------------------------
2016 2015 2016 2015
---- ---- ---- ----
(unaudited, dollars in thousands, Net Income Diluted Net Income Diluted Net Income Diluted Net Income Diluted
except per share amounts) Earnings Earnings Earnings Earnings
Per Share Per Share Per Share Per Share
--- --------- --------- --------- ---------
Net income (Non-GAAP)(1) $25,963 $0.59 $23,033 $0.60 $95,254 $2.37 $87,965 $2.34
Less: After tax merger-related expenses (1,745) (0.04) (31) - (8,619) (0.21) (7,203) (0.19)
Net income (GAAP) $24,218 $0.55 $23,002 $0.60 $86,635 $2.16 $80,762 $2.15
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(1)Non-GAAP net income excludes after-tax merger related expenses. Non-GAAP measures are defined on page 11 under "Non-GAAP Financial Measures."
Financial results for Your Community Bankshares, Inc. ("YCB") were included in WesBanco's results after September 9, 2016, the date of the consummation of the merger. The merger, which was announced on May 3, 2016, was approved by all appropriate regulatory agencies and the shareholders of YCB before the end of August, permitting the transaction to be closed in slightly over four months. YCB, with approximately $1.5 billion of assets, was headquartered in New Albany, IN and operated through 34 financial centers in Indiana and Kentucky. The YCB merger meshes well with WesBanco's strategic growth plans and contiguous market expansion, and expands the WesBanco franchise into new attractive growth markets. WesBanco now has $9.8 billion in total assets and provides banking services through 174 branch locations in five states. WesBanco's results also include ESB Financial Corporation's ("ESB") results from February 10, 2015, the date of consummation of that merger.
"I am pleased to report that we successfully converted Your Community Bank with the integration and branding of our products, services, systems, and processes," said Mr. Clossin. "We remain excited about the opportunities our newest markets in Indiana and Kentucky provide, and are encouraged by the enthusiasm of our newest employees."
Mr. Clossin added, "2016 was another successful year for WesBanco. We have strong market share in our legacy markets, including several major metropolitan areas across five states. We continue to manage operating expenses diligently as evidenced by our year-to-date efficiency ratio of 56.7%. Lastly, our strong risk and compliance framework, coupled with our diversification and balanced growth, helped us to once again be named one of America's Best Banks during 2017 by a leading financial magazine. We are excited about our opportunities for the upcoming year, and look forward to a continuation of our stated strategies as we provide additional value to our customers and shareholders."
Financial Condition
Total assets at December 31, 2016 increased $1.3 billion or 15.6% compared to December 31, 2015 due to the acquisition of YCB. Management remains focused on controlling overall growth, primarily through control of the securities portfolio, in order to manage the financial impact of crossing $10 billion in assets. Portfolio loans increased $1.2 billion or 23.4% over the last twelve months with $1.0 billion from the YCB acquisition and $171.9 million, or 3.4% from organic loan growth. Expanded market areas and additional commercial personnel in our core markets provided the organic loan growth, which occurred primarily in commercial real estate, commercial and industrial and home equity lending categories, and was achieved through $2.0 billion in loan originations in 2016, partially offset by certain large commercial real estate payoffs. Total business loan originations were up approximately 26.7% compared to 2015. The re-mix in average earning assets continued as securities as a percentage of total assets were reduced from 28.6% at December 31, 2015 to 23.7% at December 31, 2016, while loans have increased as a percentage of total assets to 63.8%.
Total deposits increased $974.6 million or 16.1% during the last twelve months, reflecting $1.2 billion from the YCB acquisition and our stated balance sheet strategy. Total organic deposits, excluding CDs, increased 2.3%, driven by 10.8% organic growth in interest bearing and non-interest bearing demand deposits. Reflecting customer preferences, total demand deposits, as of December 31, 2016, now represent 47.4% of total deposits, an increase from 40.6% a year ago.
WesBanco continues to maintain strong regulatory capital ratios after the YCB acquisition and implementation of the BASEL III capital standards. At December 31, 2016, Tier I leverage was 9.81%, Tier I Risk-Based capital was 13.16%, Total Risk-Based capital was 14.18% and the Common Equity Tier 1 capital ratio ("CET 1"), was 11.28%. 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. Total tangible equity to tangible assets (non-GAAP measure) was 8.20% at December 31, 2016, increasing from 7.95% at December 31, 2015, which reflects the acquisition of YCB and lower accumulated other comprehensive income. Strong earnings and increased total capital have enabled WesBanco to increase the quarterly dividend rate, currently at $0.24 per share, nine times over the last six years, cumulatively representing a 71% increase. The most recent increase was $0.01 per share per quarter in the first quarter of 2016.
Credit Quality
While the provision for credit losses increased by 1.5% in 2016, primarily due to loan growth, credit metrics continued to improve. The provision for credit losses increased to $8.5 million in 2016, compared to $8.4 million in 2015. Net charge-offs as a percentage of average portfolio loans of 0.12% in 2016 decreased from 0.23% in 2015.
Non-performing loans (including TDRs), criticized and classified loans all improved as a percentage of total portfolio loans from December 31 2015. Total non-performing loans were 0.63% of total loans at December 31, 2016, decreasing from 0.89% of total loans at the end of 2015. Criticized and classified loans were 1.20% of total loans, improving from 1.57% at December 31, 2015. Past due loans at December 31, 2016 were 0.32% of total loans, minimally higher than the 0.28% at December 31, 2015, primarily due to higher delinquencies on the YCB acquired portfolio due to the administrative transition.
The allowance for loan losses represented 0.70% of total portfolio loans at December 31, 2016 compared to 0.82% as of December 31, 2015. If the acquired YCB and ESB loans (recorded at fair value at the date of acquisition of $1,713.1 million) were excluded from the ratio, the allowance would approximate 0.96% of the adjusted loan total at December 31, 2016 compared to 1.09% prior to the ESB acquisition.
Net Interest Income
The net interest margin increased by 10 basis points to 3.42% in the fourth quarter of 2016 compared to the third quarter of 2016 as a result of higher yielding assets acquired through the acquisition. The increased yield on assets in the fourth quarter of 2016 of 15 basis points more than offset an 8 basis point increase in the cost of interest bearing liabilities as compared to fourth quarter of 2015. Net interest income increased $11.1 million or 18.3% in fourth quarter of 2016 compared to fourth quarter of 2015 due to a 25.2% increase in average loan balances resulting in a 14.4% increase in average earning assets, partially due to a 10 basis point increase in the net interest margin. The increase in average loan balances in 2016 was due to a combination of the acquisition and the 3.4% organic loan growth highlighted by 6.2% of commercial loan growth.
The year-over-year net interest margin decreased to 3.32% in 2016 compared to 3.41% in 2015. This decrease in the net interest margin is primarily due to 10 basis points of increased funding costs and an asset yield decline of 2 basis points. Total average loan rates decreased by 9 basis points year-over-year due to repricing of existing loans at lower spreads, competitive pricing on new loans and the extended low interest rate environment. The funding cost increase of 10 basis points in 2016, compared to 2015, is primarily due to an increase in the percentage of borrowings, primarily FHLB, to 19.8% of interest bearing liabilities from 14.3% in 2015, as well as a 27 basis point increase in the average total cost of these borrowings year-over-year. Average interest bearing deposits in 2016 increased 1.1%, as increases in interest bearing demand and savings accounts more than offset declines in CDs and money market accounts. During the last few quarters, the net interest margin has been relatively stable, ranging from 3.29% to 3.42% with improvements in the most recent quarter.
Non-Interest Income
For 2016, non-interest income increased $7.0 million or 9.4% compared to 2015. Service charges on deposits increased $1.6 million or 9.5% and electronic banking fees increased $1.2 million or 8.6% through a larger customer deposit base from the addition of YCB. Net securities gains increased $1.4 million in 2016 compared to 2015, primarily due to increased calls of agency notes. Net securities brokerage revenue decreased $1.2 million or 16.2% primarily as a result of our strategy to retain deposits. Other income increased $4.2 million due to a $2.7 million increase of commercial customer loan swap fee and market value related income and improvement in various other income categories.
Non-Interest Expense
The following comments on non-interest expense exclude merger-related expenses in both years. Non-interest expense in 2016 grew $12.6 million or 6.9%, compared to 2015. With net revenue growth of 7.5% in 2016, this positive operating leverage helped to improve the efficiency ratio in 2016 to 56.7% from 57.1% in 2015. For 2016, salaries and wages increased $6.9 million or 9.0% due to increased compensation expense related to an 18.1% increase in full-time equivalent employees, primarily late in the third quarter of 2016 from the YCB acquisition, and routine annual adjustments to compensation. Employee benefits expense increased $1.1 million, or 3.9%, primarily from increased deferred compensation type expenses. Increases in net occupancy and equipment were also primarily from costs related to the additional branches from the YCB acquisition. At the end of the fourth quarter, a portion of the intended post conversion cost savings were beginning to be experienced through branch and system conversions.
Financial Results Conference Call
WesBanco will also host a conference call to discuss the Company's financial results for the fourth quarter of 2016 at 10:00 a.m. ET on Wednesday, January 25, 2017. 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 10098820. The replay will begin at approximately 12:00 p.m. ET on January 25, and end at 12 a.m. ET on February 8. An archive of the webcast will be available for one year on the Investor Relations section of the Company's website (www.wesbanco.com).
Founded in 1870, WesBanco, Inc. (www.wesbanco.com) is a multi-state, bank holding company with total assets of approximately $9.8 billion (as of December 31, 2016). 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 more than $3 billion of assets under management, and serves as registered investment advisor to a proprietary mutual fund family, the WesMark Funds. WesBanco's banking subsidiary, WesBanco Bank, Inc., operates 174 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.
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, 2015 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, 2016, which are available at the SEC's website, www.sec.gov or at WesBanco's website, www.wesbanco.com. Investors are cautioned that forward-looking statements, which are not historical fact, involve risks and uncertainties, including those detailed in WesBanco's most recent Annual Report on Form 10-K filed with the SEC under "Risk Factors" in Part I, Item 1A. Such statements are subject to important factors that could cause actual results to differ materially from those contemplated by such statements, including, without limitation, the effects of changing regional and national economic conditions; changes in interest rates, spreads on earning assets and interest-bearing liabilities, and associated interest rate sensitivity; sources of liquidity available to WesBanco and its related subsidiary operations; potential future credit losses and the credit risk of commercial, real estate, and consumer loan customers and their borrowing activities; actions of the Federal Reserve Board, the Federal Deposit Insurance Corporation, the SEC, the Financial Institution Regulatory Authority, the Municipal Securities Rulemaking Board, the Securities Investors Protection Corporation, and other regulatory bodies; potential legislative and federal and state regulatory actions and reform, including, without limitation, the impact of the implementation of the Dodd-Frank Act; adverse decisions of federal and state courts; fraud, scams and schemes of third parties; internet hacking; competitive conditions in the financial services industry; rapidly changing technology affecting financial services; marketability of debt instruments and corresponding impact on fair value adjustments; and/or other external developments materially impacting WesBanco's operational and financial performance. WesBanco does not assume any duty to update forward-looking statements.
WESBANCO, INC.
Consolidated Selected Financial Highlights Page 5
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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 2016 2015 % Change 2016 2015 % Change
---- ---- -------- ---- ---- --------
Loans, including fees $66,135 $52,080 27.0 $226,993 $203,993 11.3
Interest and dividends on securities:
Taxable 9,359 10,522 (11.1) 38,490 39,314 (2.1)
Tax-exempt 4,770 4,644 2.7 18,390 16,764 9.7
--- ---
Total interest and dividends on securities 14,129 15,166 (6.8) 56,880 56,078 1.4
------ ------ ---- ------ ------ ---
Other interest income 555 414 34.1 2,224 1,641 35.5
---
Total interest and dividend income 80,819 67,660 19.4 286,097 261,712 9.3
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Interest expense
Interest bearing demand deposits 975 518 88.2 2,817 1,943 45.0
Money market deposits 510 484 5.4 1,860 1,914 (2.8)
Savings deposits 194 165 17.6 696 640 8.8
Certificates of deposit 2,585 2,630 (1.7) 10,419 11,033 (5.6)
Total interest expense on deposits 4,264 3,797 12.3 15,792 15,530 1.7
Federal Home Loan Bank borrowings 2,881 2,353 22.4 11,985 5,510 117.5
Other short-term borrowings 179 116 54.3 478 370 29.2
Subordinated debt and junior subordinated debt 1,807 774 133.5 4,512 3,315 36.1
Total interest expense 9,131 7,040 29.7 32,767 24,725 32.5
----- ----- ---- ------ ------ ----
Net interest income 71,688 60,620 18.3 253,330 236,987 6.9
Provision for credit losses 2,128 2,585 (17.7) 8,478 8,353 1.5
-----
Net interest income after provision for credit losses 69,560 58,035 19.9 244,852 228,634 7.1
------ ------ ---- ------- ------- ---
Non-interest income
Trust fees 5,470 5,244 4.3 21,630 21,900 (1.2)
Service charges on deposits 5,474 4,401 24.4 18,333 16,743 9.5
Electronic banking fees 4,268 3,691 15.6 15,596 14,361 8.6
Net securities brokerage revenue 1,330 1,795 (25.9) 6,449 7,692 (16.2)
Bank-owned life insurance 1,154 1,598 (27.8) 4,064 4,863 (16.4)
Net gains on sales of mortgage loans 484 612 (20.9) 2,529 2,071 22.1
Net securities gains 63 880 (92.8) 2,357 948 148.6
Net gain on other real estate owned and other assets 383 189 102.6 790 356 121.9
Other income 2,794 1,616 72.9 9,751 5,532 76.3
-----
Total non-interest income 21,420 20,026 7.0 81,499 74,466 9.4
------ ------ --- ------ ------ ---
Non-interest expense
Salaries and wages 24,145 19,872 21.5 84,281 77,340 9.0
Employee benefits 7,267 6,745 7.7 27,952 26,896 3.9
Net occupancy 4,272 3,336 28.1 14,664 13,635 7.5
Equipment 4,234 3,506 20.8 14,543 13,194 10.2
Marketing 1,515 1,425 6.3 5,391 5,646 (4.5)
FDIC insurance 764 1,093 (30.1) 3,990 4,107 (2.8)
Amortization of intangible assets 1,334 811 64.5 3,598 3,136 14.7
Restructuring and merger-related expense 2,684 48 5,491.7 13,261 11,082 19.7
Other operating expenses 12,083 10,058 20.1 41,000 38,887 5.4
Total non-interest expense 58,298 46,894 24.3 208,680 193,923 7.6
------ ------ ---- ------- ------- ---
Income before provision for income taxes 32,682 31,167 4.9 117,671 109,177 7.8
Provision for income taxes 8,464 8,165 3.7 31,036 28,415 9.2
-----
Net Income $24,218 $23,002 5.3 $86,635 $80,762 7.3
======= ======= === ======= ======= ===
Taxable equivalent net interest income $74,256 $63,121 17.6 $263,232 $246,014 7.0
Per common share data
---------------------
Net income per common share - basic $0.55 $0.60 (8.3) $2.16 $2.15 0.5
Net income per common share - diluted 0.55 0.60 (8.3) 2.16 2.15 0.5
Dividends declared 0.24 0.23 4.3 0.96 0.92 4.3
Book value (period end) 30.53 29.18 4.6
Tangible book value (period end) (1) 17.19 16.51 4.1
Average common shares outstanding - basic 43,887,781 38,507,772 14.0 40,100,320 37,488,331 7.0
Average common shares outstanding - diluted 43,935,815 38,538,771 14.0 40,127,076 37,547,127 6.9
Period end common shares outstanding 43,931,715 38,459,635 14.2 43,931,715 38,459,635 14.2
(1) See non-GAAP financial measures for additional information relating to the calculation of this item.
WESBANCO, INC.
Consolidated Selected Financial Highlights Page 6
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(unaudited, dollars in thousands)
Selected ratios
---------------
For the Year Ended
December 31,
------------
2016 2015 % Change
---- ---- --------
Return on average assets 0.97% 0.99% (2.02)%
Return on average equity 7.13 7.62 (6.43)
Return on average tangible equity (1) 12.73 13.41 (5.07)
Yield on earning assets (2) 3.73 3.75 (0.53)
Cost of interest bearing liabilities 0.53 0.43 23.26
Net interest spread (2) 3.20 3.32 (3.61)
Net interest margin (2) 3.32 3.41 (2.64)
Efficiency (1) (2) 56.69 57.05 (0.63)
Average loans to average deposits 85.79 78.53 9.24
Annualized net loan charge-offs/average loans 0.12 0.23 (47.83)
Effective income tax rate 26.38 26.03 1.34
For the Quarter Ended
---------------------
Dec. 31, Sept. 30, June 30, Mar. 31, Dec. 31,
2016 2016 2016 2016 2015
---- ---- ---- ---- ----
Return on average assets 0.98% 0.79% 1.05% 1.08% 1.07%
Return on average equity 7.12 5.71 7.69 8.07 8.11
Return on average tangible equity (1) 13.01 10.02 13.55 14.40 14.68
Yield on earning assets (2) 3.84 3.73 3.71 3.70 3.69
Cost of interest bearing liabilities 0.55 0.53 0.53 0.52 0.47
Net interest spread (2) 3.29 3.20 3.18 3.18 3.22
Net interest margin (2) 3.42 3.32 3.30 3.29 3.32
Efficiency (1) (2) 58.13 55.81 57.04 55.52 56.34
Average loans to average deposits 87.63 87.26 84.99 83.22 80.66
Annualized net loan charge-offs/average loans 0.08 0.20 0.08 0.12 0.20
Effective income tax rate 25.90 24.94 26.78 27.54 26.20
Trust assets, market value at period end $3,723,142 $3,694,405 $3,660,736 $3,623,532 $3,625,411
(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 7
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(unaudited, dollars in thousands, except shares) % Change
Balance sheets December 31, September 30, September 30, 2016
-------------- ------------ -------------- ------------------
Assets 2016 2015 % Change 2016 to December 31, 2016
---- ---- -------- ---- --------------------
Cash and due from banks $106,257 $75,707 40.4 $106,430 (0.2)
Due from banks - interest bearing 21,913 10,978 99.6 9,702 125.9
Securities:
Trading securities, at fair value 7,071 6,451 9.6 7,070 0.0
Available-for-sale, at fair value 1,241,176 1,403,069 (11.5) 1,302,029 (4.7)
Held-to-maturity (fair values of
$1,076,790; $1,038,207 and $1,089,227,
respectively) 1,067,967 1,012,930 5.4 1,049,093 1.8
Total securities 2,316,214 2,422,450 (4.4) 2,358,192 (1.8)
--------- --------- ---- --------- ----
Loans held for sale 17,315 7,899 119.2 20,231 (14.4)
------ ----- ----- ------ -----
Portfolio loans:
Commercial real estate 2,873,511 2,256,381 27.4 2,826,634 1.7
Commercial and industrial 1,088,118 737,878 47.5 1,097,788 (0.9)
Residential real estate 1,383,390 1,247,800 10.9 1,395,886 (0.9)
Home equity 508,359 416,889 21.9 505,369 0.6
Consumer 396,058 406,894 (2.7) 411,175 (3.7)
---- -------
Total portfolio loans, net of unearned income 6,249,436 5,065,842 23.4 6,236,852 0.2
Allowance for loan losses (43,674) (41,710) (4.7) (42,755) (2.1)
------- ------- ---- ------- ----
Net portfolio loans 6,205,762 5,024,132 23.5 6,194,097 0.2
--------- --------- ---- --------- ---
Premises and equipment, net 133,297 112,203 18.8 138,731 (3.9)
Accrued interest receivable 28,299 25,759 9.9 29,964 (5.6)
Goodwill and other intangible assets, net 593,187 490,888 20.8 591,866 0.2
Bank-owned life insurance 188,145 150,980 24.6 186,993 0.6
Other assets 180,488 149,302 20.9 176,178 2.4
Total Assets $9,790,877 $8,470,298 15.6 $9,812,384 (0.2)
========== ========== ==== ========== ====
Liabilities
Deposits:
Non-interest bearing demand $1,789,522 $1,311,455 36.5 $1,697,476 5.4
Interest bearing demand 1,546,890 1,152,071 34.3 1,618,514 (4.4)
Money market 995,477 967,561 2.9 1,016,300 (2.0)
Savings deposits 1,213,168 1,077,374 12.6 1,228,509 (1.2)
Certificates of deposit 1,495,822 1,557,838 (4.0) 1,573,712 (4.9)
----
Total deposits 7,040,879 6,066,299 16.1 7,134,511 (1.3)
--------- --------- ---- --------- ----
Federal Home Loan Bank borrowings 968,946 1,041,750 (7.0) 950,847 1.9
Other short-term borrowings 199,376 81,356 145.1 132,497 50.5
Subordinated debt and junior subordinated debt 163,598 106,196 54.1 163,364 0.1
---- ---
Total borrowings 1,331,920 1,229,302 8.3 1,246,708 6.8
--------- --------- --- --------- ---
Accrued interest payable 2,204 1,715 28.5 2,898 (23.9)
Other liabilities 74,466 50,850 46.4 81,116 (8.2)
---- ----
Total Liabilities 8,449,469 7,348,166 15.0 8,465,233 (0.2)
--------- --------- ---- --------- ----
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
2016 and 2015, respectively; 43,931,715;
38,546,042 and 43,860,883 shares
issued, respectively; 43,931,715;
38,459,635 and 43,860,883 shares 91,524 80,304 14.0 91,377 0.2
outstanding, respectively
Capital surplus 680,507 516,294 31.8 678,007 0.4
Retained earnings 597,071 549,921 8.6 583,392 2.3
Treasury stock ( 0; 86,407 and 0 shares - at cost, respectively) - (2,640) 100.0 - 100.0
Accumulated other comprehensive loss (27,126) (20,954) (29.5) (5,062) (435.9)
Deferred benefits for directors (568) (793) 28.4 (563) (0.9)
---- ----
Total Shareholders' Equity 1,341,408 1,122,132 19.5 1,347,151 (0.4)
--------- --------- ---------
Total Liabilities and Shareholders' Equity $9,790,877 $8,470,298 15.6 $9,812,384 (0.2)
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WESBANCO, INC.
Consolidated Selected Financial Highlights Page 8
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(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,
----------------------------
2016 2015 2016 2015
---- ---- ---- ----
Average Average Average Average Average Average Average Average
Assets Balance Rate Balance Rate Balance Rate Balance Rate
------- ---- ------- ---- ------- ---- ------- ----
Due from banks - interest bearing $16,365 0.66% $11,647 0.21% $27,193 0.53% $15,467 0.17%
Loans, net of unearned income (1) 6,258,754 4.20 4,999,259 4.13 5,513,277 4.12 4,840,637 4.21
Securities: (2)
Taxable 1,612,145 2.32 1,861,808 2.26 1,677,128 2.29 1,757,288 2.24
Tax-exempt (3) 713,545 4.11 645,737 4.43 667,066 4.24 568,671 4.54
------- ---- ------- ---- ------- ---- ------- ----
Total securities 2,325,690 2.87 2,507,545 2.82 2,344,194 2.85 2,325,959 2.80
Other earning assets 45,886 4.60 39,902 4.09 45,704 4.55 28,721 5.61
------ ---- ------ ---- ------ ---- ------ ----
Total earning assets (3) 8,646,695 3.84% 7,558,353 3.69% 7,930,368 3.73% 7,210,784 3.75%
--------- ---- --------- ---- --------- ---- --------- ----
Other assets 1,141,248 934,223 1,009,518 913,197
Total Assets $9,787,943 $8,492,576 $8,939,886 $8,123,981
========== ========== ========== ==========
Liabilities and Shareholders' Equity
Interest bearing demand deposits $1,579,115 0.25% $1,192,502 0.17% $1,340,001 0.21% $1,143,965 0.17%
Money market accounts 1,018,287 0.20 997,850 0.19 961,847 0.19 1,003,980 0.19
Savings deposits 1,224,744 0.06 1,068,401 0.06 1,134,755 0.06 1,044,079 0.06
Certificates of deposit 1,538,837 0.67 1,624,024 0.64 1,514,767 0.69 1,704,871 0.65
--------- ---- --------- ---- --------- ---- --------- ----
Total interest bearing deposits 5,360,983 0.32 4,882,777 0.31 4,951,370 0.32 4,896,895 0.32
Federal Home Loan Bank borrowings 929,939 1.23 881,471 1.06 995,644 1.20 591,506 0.93
Other borrowings 136,403 0.52 119,821 0.38 105,735 0.45 109,165 0.34
Subordinated debt and junior subordinated debt 163,478 4.40 106,196 2.89 124,318 3.63 115,088 2.88
------- ---- ------- ---- ------- ---- ------- ----
Total interest bearing liabilities 6,590,803 0.55% 5,990,265 0.47% 6,177,067 0.53% 5,712,654 0.43%
--------- ---- --------- ---- --------- ---- --------- ----
Non-interest bearing demand deposits 1,780,870 1,315,363 1,474,883 1,267,158
Other liabilities 63,457 62,189 72,048 84,679
Shareholders' equity 1,352,813 1,124,759 1,215,888 1,059,490
--------- --------- --------- ---------
Total Liabilities and Shareholders' Equity $9,787,943 $8,492,576 $8,939,886 $8,123,981
========== ========== ========== ==========
Taxable equivalent net interest spread 3.29% 3.22% 3.20% 3.32%
==== ==== ==== ====
Taxable equivalent net interest margin 3.42% 3.32% 3.32% 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 $0.2 million and $0.8 million for the three months ended December 31, 2016 and 2015, respectively, and $2.8 million and $1.5 million for the twelve months ended December 31, 2016 and 2015, respectively. Additionally, loan accretion included in interest income on loans acquired from prior acquisitions was $2.0 million and $0.9 million for the three months ended December 31,
2016 and 2015, respectively, and $4.4 million and $3.9 million for the twelve months ended December 31, 2016 and 2015, respectively, while accretion on interest bearing liabilities acquired from the prior acquisitions was $0.6 million for both the three months ended December 31, 2016 and 2015, and $1.8 million and $3.4 million for the twelve months ended December 31, 2016 and 2015, 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.
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 2016 2016 2016 2016 2015
---- ---- ---- ---- ----
Loans, including fees $66,135 $55,822 $52,697 $52,338 $52,080
Interest and dividends on securities:
Taxable 9,359 9,137 9,775 10,217 10,522
Tax-exempt 4,770 4,559 4,540 4,521 4,644
Total interest and dividends on securities 14,129 13,696 14,315 14,738 15,166
------ ------ ------ ------ ------
Other interest income 555 574 573 525 414
---
Total interest and dividend income 80,819 70,092 67,585 67,601 67,660
------ ------ ------ ------ ------
Interest expense
Interest bearing demand deposits 975 691 643 507 518
Money market deposits 510 444 450 456 484
Savings deposits 194 173 165 165 165
Certificates of deposit 2,585 2,592 2,583 2,659 2,630
Total interest expense on deposits 4,264 3,900 3,841 3,787 3,797
----- ----- ----- ----- -----
Federal Home Loan Bank borrowings 2,881 3,005 3,031 3,068 2,353
Other short-term borrowings 179 118 99 82 116
Subordinated debt and junior
subordinated debt 1,807 1,043 840 822 774
Total interest expense 9,131 8,066 7,811 7,759 7,040
----- ----- ----- ----- -----
Net interest income 71,688 62,026 59,774 59,842 60,620
Provision for credit losses 2,128 2,214 1,811 2,324 2,585
-----
Net interest income after provision for credit losses 69,560 59,812 57,963 57,518 58,035
------ ------ ------ ------ ------
Non-interest income
Trust fees 5,470 5,413 5,036 5,711 5,244
Service charges on deposits 5,474 4,733 4,176 3,952 4,401
Electronic banking fees 4,268 3,945 3,742 3,604 3,691
Net securities brokerage revenue 1,330 1,473 1,750 1,896 1,795
Bank-owned life insurance 1,154 995 942 973 1,598
Net gains on sales of mortgage loans 484 814 683 548 612
Net securities gains 63 598 585 1,111 880
Net gain /(loss) on other real estate
owned and other assets 383 184 214 (18) 189
Other income 2,794 2,862 2,463 1,616 1,616
-----
Total non-interest income 21,420 21,017 19,591 19,393 20,026
------ ------ ------ ------ ------
Non-interest expense
Salaries and wages 24,145 21,225 19,731 19,180 19,872
Employee benefits 7,267 6,275 7,332 7,077 6,745
Net occupancy 4,272 3,647 3,220 3,591 3,336
Equipment 4,234 3,557 3,402 3,428 3,506
Marketing 1,515 1,295 1,608 973 1,425
FDIC insurance 764 961 1,099 1,166 1,093
Amortization of intangible assets 1,334 837 697 730 811
Restructuring and merger-related
expense 2,684 9,883 694 - 48
Other operating expenses 12,083 9,921 9,577 9,198 10,058
Total non-interest expense 58,298 57,601 47,360 45,343 46,894
------ ------ ------ ------ ------
Income before provision for income taxes 32,682 23,228 30,194 31,568 31,167
Provision for income taxes 8,464 5,793 8,085 8,694 8,165
-----
Net Income $24,218 $17,435 $22,109 $22,874 $23,002
======= ======= ======= ======= =======
Taxable equivalent net interest income $74,256 $64,481 $62,219 $62,276 $63,121
Per common share data
---------------------
Net income per common share - basic $0.55 $0.44 $0.58 $0.60 $0.60
Net income per common share - diluted $0.55 $0.44 $0.58 $0.60 $0.60
Dividends declared $0.24 $0.24 $0.24 $0.24 $0.23
Book value (period end) $30.53 $30.71 $30.31 $29.87 $29.18
Tangible book value (period end) (1) $17.19 $17.38 $17.64 $17.17 $16.51
Average common shares outstanding - basic 43,887,781 39,715,516 38,373,610 38,386,983 38,507,772
Average common shares outstanding - diluted 43,935,815 39,743,291 38,410,393 38,402,316 38,538,771
Period end common shares outstanding 43,931,715 43,860,883 38,411,343 38,362,534 38,459,635
Full time equivalent employees 1,928 1,936 1,650 1,624 1,633
(1) See non-GAAP financial measures for additional information relating to the calculation of this item.
WESBANCO, INC.
Consolidated Selected Financial Highlights Page 10
------------------------------------------ -------
(unaudited, dollars in thousands)
Quarter Ended
-------------
Dec. 31, Sept. 30, June 30, Mar. 31, Dec. 31,
Asset quality data 2016 2016 2016 2016 2015
------------------ ---- ---- ---- ---- ----
Non-performing assets:
Troubled debt restructurings -
accruing $7,646 $8,605 $8,979 $9,550 $11,548
Non-accrual loans:
Troubled debt restructurings 3,546 3,759 4,121 4,517 4,617
Other non-accrual loans 28,238 26,897 28,334 29,343 28,764
------ ------ ------ ------ ------
Total non-accrual loans 31,784 30,656 32,455 33,860 33,381
------ ------ ------ ------ ------
Total non-performing loans 39,430 39,261 41,434 43,410 44,929
------ ------ ------ ------ ------
Other real estate and repossessed
assets 8,346 9,794 4,481 5,329 5,825
Total non-performing assets $47,776 $49,055 $45,915 $48,739 $50,754
======= ======= ======= ======= =======
Past due loans (1):
Loans past due 30-89 days $16,029 $17,569 $10,392 $11,888 $11,005
Loans past due 90 days or more 3,739 2,392 2,263 4,186 3,126
Total past due loans $19,768 $19,961 $12,655 $16,074 $14,131
======= ======= ======= ======= =======
Criticized and classified loans (2):
Criticized loans $24,778 $35,468 $26,543 $31,410 $26,298
Classified loans 49,965 52,909 52,789 53,182 53,408
Total criticized and classified loans $74,743 $88,377 $79,332 $84,592 $79,706
======= ======= ======= ======= =======
Loans past due 30-89 days / total portfolio loans 0.26% 0.28% 0.20% 0.23% 0.22%
Loans past due 90 days or more / total portfolio loans 0.06 0.04 0.04 0.08 0.06
Non-performing loans / total portfolio loans 0.63 0.63 0.80 0.85 0.89
Non-performing assets/total portfolio loans, other
real estate and repossessed assets 0.76 0.79 0.89 0.95 1.00
Non-performing assets / total assets 0.49 0.50 0.55 0.57 0.60
Criticized and classified loans / total portfolio loans 1.20 1.42 1.53 1.65 1.57
Allowance for loan losses
-------------------------
Allowance for loan losses $43,674 $42,755 $43,328 $42,525 $41,710
Provision for credit losses 2,128 2,214 1,811 2,324 2,585
Net loan and deposit account overdraft charge-offs 1,213 2,798 1,013 1,532 2,516
Annualized net loan charge-offs /average loans 0.08% 0.20% 0.08% 0.12% 0.20%
Allowance for loan losses / total portfolio loans 0.70% 0.69% 0.84% 0.83% 0.82%
Allowance for loan losses / non-performing loans 1.11 x 1.09 x 1.05 x 0.98 x 0.93 x
Allowance for loan losses / non-performing loans and
loans past due 0.74 x 0.72 x 0.80 x 0.71 x 0.71 x
Quarter Ended
-------------
Dec. 31, Sept. 30, June 30, Mar. 31, Dec. 31,
2016 2016 2016 2016 2015
---- ---- ---- ---- ----
Capital ratios
--------------
Tier I leverage capital 9.81% 10.90% 9.71% 9.46% 9.38%
Tier I risk-based capital 13.16 12.95 13.62 13.30 13.35
Total risk-based capital 14.18 13.95 14.40 14.06 14.11
Common equity tier 1 capital ratio (CET 1) 11.28 11.07 11.88 11.58 11.66
Average shareholders' equity to average assets 13.82 13.91 13.60 13.32 13.24
Tangible equity to tangible assets (3) 8.20 8.26 8.56 8.15 7.95
(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) 2016 2016 2016 2016 2015 2016 2015
---- ---- ---- ---- ---- ---- ----
Return on average tangible equity:
Net income (annualized) $96,344 $69,361 $88,922 $91,999 $91,258 $86,635 $80,762
Plus: amortization of intangibles (annualized) (1) 3,451 2,164 1,822 1,908 2,091 2,339 2,038
------------------ -----
Net income before amortization of intangibles
(annualized) 99,795 71,525 90,744 93,907 93,349 88,974 82,800
------------------ ------
Average total shareholders' equity 1,352,813 1,214,813 1,156,923 1,139,514 1,124,759 1,215,888 1,059,490
Less: average goodwill and other intangibles, net
of def. tax liability (585,529) (500,752) (487,085) (487,210) (488,677) (516,840) (442,215)
------------------ --------
Average tangible equity $767,284 $714,061 $669,838 $652,304 $636,082 $699,048 $617,275
--------
Return on average tangible equity 13.01% 10.02% 13.55% 14.40% 14.68% 12.73% 13.41%
===== ===== ===== ===== ===== ===== =====
Efficiency ratio:
Non-interest expense $58,298 $57,601 $47,360 $45,343 $46,894 $208,680 $193,923
Less: restructuring and merger-related expense (2,684) (9,883) (694) - (48) (13,261) (11,082)
------------------ -------
Non-interest expense excluding restructuring and
merger-related expense 55,614 47,718 46,666 45,343 46,846 195,419 182,841
Net interest income on a fully taxable equivalent
basis 74,256 64,481 62,219 62,276 63,121 263,232 246,014
Non-interest income 21,420 21,017 19,591 19,393 20,026 81,499 74,466
------
Net interest income on a fully taxable equivalent
basis plus non-interest income $95,676 $85,498 $81,810 $81,669 $83,147 $344,731 $320,480
--------------------------------------------- --------
Efficiency Ratio 58.13% 55.81% 57.04% 55.52% 56.34% 56.69% 57.05%
=====
Net Income, excluding after-tax merger-related expenses:
Net income $24,218 $17,435 $22,109 $22,874 $23,002 $86,635 $80,762
Add: After-tax merger-related expenses (1) 1,745 6,424 451 - 31 8,619 7,203
------------------ -----
Net income, excluding after-tax merger-related expenses $25,963 $23,859 $22,560 $22,874 $23,033 $95,254 $87,965
======= ======= ======= ======= ======= ======= =======
Net Income, excluding after-tax merger-related expenses per diluted share:
Net income per diluted share $0.55 $0.44 $0.58 $0.60 $0.60 $2.16 $2.15
Add: After-tax merger-related expenses per
diluted share (1) 0.04 0.16 0.01 - - 0.21 0.19
------------------ ----
Net income, excluding after-tax merger-related expenses per diluted share $0.59 $0.60 $0.59 $0.60 $0.60 $2.37 $2.34
===== ===== ===== ===== ===== ===== =====
Period End
----------
Dec. 31, Sept. 30, June 30, Mar. 31, Dec. 31,
2016 2016 2016 2016 2015
---- ---- ---- ---- ----
Tangible book value:
Total shareholders' equity $1,341,408 $1,347,151 $1,164,420 $1,145,910 $1,122,132
Less: goodwill and other intangible assets, net of
def. tax liability (586,403) (584,690) (486,913) (487,267) (487,270)
------------------
Tangible equity 755,005 762,461 677,507 658,643 634,862
Common shares outstanding 43,931,715 43,860,883 38,411,343 38,362,534 38,459,635
Tangible book value $17.19 $17.38 $17.64 $17.17 $16.51
====== ====== ====== ====== ======
Tangible equity to tangible assets:
Total shareholders' equity $1,341,408 $1,347,151 $1,674,420 $1,145,910 $1,122,132
Less: goodwill and other intangible assets, net of
def. tax liability (586,403) (584,690) (486,913) (497,267) (487,270)
------------------
Tangible equity 755,005 762,461 677,507 658,643 634,862
Total assets 9,790,877 9,812,384 8,397,424 8,569,381 8,470,298
Less: goodwill and other intangible assets, net of
def. tax liability (586,403) (584,690) (486,913) (487,267) (487,270)
------------------
Tangible assets $9,204,474 $9,227,694 $7,910,511 $8,082,114 $7,983,028
Tangible equity to tangible assets 8.20% 8.26% 8.56% 8.15% 7.95%
==== ==== ==== ==== ====
(1) Tax effected at 35%.
To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/wesbanco-announces-fourth-quarter-and-full-year-2016-net-income-300395979.html
SOURCE WesBanco, Inc.
