WESBANCO, INC. 
By WHEELING, W.Va., Jan. 29, 2013 /PRNewswire/ -- Paul M. Limbert, President and Chief Executive Officer of WesBanco, Inc. (NASDAQ Global Market: WSBC), a Wheeling, West Virginia based multi-state bank holding company, today announced increased earnings for the three and twelve months ended December 31, 2012.
For the twelve months ended December 31, 2012, net income was $49.5 million as compared to $43.8 million for 2011, representing an increase of 13.1%, while diluted earnings per share were $1.84, as compared to $1.65 per share for 2011. Net income, excluding restructuring and merger-related expenses, was $52.1 million compared to $43.8 million for 2011, representing an increase of 18.9%, while diluted earnings per share, excluding restructuring and merger-related expenses, were $1.94 (non-GAAP measure), compared to $1.65 per share for 2011.
During the year, WesBanco had many accomplishments, including the acquisition of Fidelity Bancorp, Inc. ("Fidelity"), a reduction in non-performing loans, elimination of certain unprofitable branches, growth in non-interest income, and increased loan originations and outstanding loan balances, while maintaining strong capital ratios. As of November 30, 2012, WesBanco completed the acquisition of Fidelity, a Pittsburgh-based bank. Fidelity had assets of $0.6 billion and operates 13 branches throughout the Pittsburgh metropolitan area. Fidelity's assets and liabilities are included in our financial statements at fair value, and income and expense are included subsequent to the merger date.
Mr. Limbert commented, "2012 was a successful year in many ways. We are very pleased with the completion of the acquisition of Fidelity. We are very excited to work with the experienced Fidelity team in expanding our presence in Pittsburgh and offering our expanded array of products to their customers. Another major accomplishment this year was the continued improvement in credit quality resulting in our ability to reduce the provision for credit losses in each of the last five quarters. We were also able to grow loans outstanding through our loan origination efforts which provided net loan growth in 2012 of over 4.0%. Our accomplishments during 2012 have resulted in the significant improvement in our operating results and growth in net income."
Financial Condition
Total assets at December 31, 2012 increased 9.8% or $542.7 million from the prior year-end due to the acquisition of Fidelity and organic growth. Portfolio loans increased $448.4 million or 13.8% with $313.4 million from the acquisition and the remaining $135.0 million as WesBanco's originations outpaced paydowns. Separate from the Fidelity acquisition, WesBanco grew outstanding loans 4.2% from the previous year as a result of a 29.7% growth in loan originations from the prior year. The organic loan growth and declines in higher cost borrowings of $110.9 million over the last twelve months were funded by organic deposit growth and the use of other liquid assets. Deposits increased $550.4 million or 12.5% in 2012, with $455.0 million from the acquisition and $95.4 million from organic growth. Goodwill and core deposit intangibles created by the merger totaled approximately $43.5 million.
WesBanco has continued to maintain strong regulatory capital ratios even after the completion of the Fidelity acquisition. At December 31, 2012, tier I leverage was 8.67%, tier I risk-based capital was 12.82%, and total risk-based capital was 14.07%, all of which were relatively unchanged from the prior year end. Both consolidated and bank-level regulatory capital ratios are well above the applicable "well-capitalized" standards promulgated by bank regulators. Total tangible equity to tangible assets (non-GAAP measure) was 6.77% at December 31, 2012, a nine basis point increase from a year ago. Strong earnings and improved capital have enabled WesBanco to increase its dividend four times over the last two years totaling 29% to the current $0.18 per share, an approximate 3.2% dividend yield.
Credit Quality
WesBanco has continued to improve credit quality over the last two years. Total non-performing loans were $63.7 million or 1.73% of total loans at December 31, 2012, which represents a 26.7% decrease from $86.9 million or 2.68% at December 31 of the prior year. The 2012 ending balance includes accruing and non-accrual troubled debt restructurings ("TDR's") totaling $9.4 million related to the implementation during the quarter of a regulatory requirement for primarily mortgage, home equity and consumer loans discharged in bankruptcy, which the borrower has continued to repay after the discharge. Classified and criticized loans decreased $85.4 million or 33.1% from December 31, 2011. Sales of commercial loans during 2012 decreased non-performing loans by $9.4 million and classified and criticized loans by $10.3 million compared to December 31, 2011. Additionally, $11.3 million of non-performing commercial loans acquired in the Fidelity acquisition, with a fair value of $6.9 million, were sold concurrent with the merger in the fourth quarter.
Net charge-offs for 2012 were $22.1 million, or 0.67% of average portfolio loans, compared to $42.5 million or 1.30% for 2011. As a result of the improvement in all measures of credit quality, the provision for credit losses was $19.9 million for 2012 compared to $35.3 million for 2011. The allowance for loan losses represented 1.43% of total portfolio loans at year end; however, if the credit mark on the Fidelity loans were to be included, the allowance would approximate 1.62% of loans. After an independent review of the merger date loan portfolio, the gross loan mark of $12.6 million was similar to the amount disclosed upon announcement of the merger.
Net Interest Income, Non-Interest Income and Non-Interest Expense
Net interest income decreased $1.0 million or 0.6% for 2012 compared to 2011 as a result of the low interest rate environment. While the average outstanding loan balances increased during 2012, these increases were not sufficient to offset the decline in average interest rates. Non-interest income increased $4.9 million or 8.2% in 2012 compared to 2011. Trust fees increased $0.9 million as assets under management continued to increase from customer initiatives of trust and investment development activities that began in the first half of 2012. Electronic banking fees increased 12.4% in 2012 due to increased transaction volumes. Net gains on sales of mortgage loans increased $0.9 million due to increased volume and higher margins on sold loans. The net loss on other real estate owned improved $1.0 million and net security gains were $2.5 million in 2012. Service charges on deposits decreased $1.5 million primarily from decreases in customer usage of overdraft lines.
Non-interest expense increased 7.0% for the year compared to 2011 partially due to restructuring and merger-related expenses of $3.9 million. Merger expenses in 2012 related to the Fidelity merger were $3.2 million, while restructuring costs associated with the closure of six branch offices were $0.7 million. Total non-interest expense would have increased 4.2% for the year without these charges. Salaries and wages increased $2.2 million in 2012 due to routine annual adjustments to compensation, increases in incentive compensation expense, and an increase in full-time equivalent employees ("FTE") of 139 primarily due to the acquisition of Fidelity. Employee benefits expense increased $4.1 million year-to-date primarily from increased pension and employee health insurance costs. Partially offsetting these increases were reduced marketing expense of $0.9 million and reduced FDIC insurance of $0.9 million.
Fourth Quarter of 2012 compared to Fourth Quarter of 2011
For the fourth quarter of 2012, net income was $12.7 million compared to $10.6 million for the fourth quarter of 2011, representing an increase of 18.9%, while diluted earnings per share were $0.46 as compared to $0.40 per share for the fourth quarter of 2011. Net income for the fourth quarter of 2012, excluding restructuring and merger-related expenses, was $14.2 million compared to $10.6 million for 2011, representing an increase of 34.0%, while diluted earnings per share excluding restructuring and merger-related expenses were $0.52, compared to $0.40 per share for 2011.
Net income increased for the quarter primarily due to a $6.4 million decrease in the provision for credit losses as a result of improved credit quality, and a $1.3 million increase in net interest income from increased average assets due to organic loan growth in 2012 and the acquisition of Fidelity. Non-interest income increased $1.8 million due to a 10.9% increase in trust fees from growth in assets under management, higher electronic banking fees, increased gains on sale of mortgage loans, and near break-even charges on disposition of other real estate owned in the 2012 quarter. Increases in non-interest expense were due to the restructuring and merger-related expenses, increased FTEs and normal increases at WesBanco for compensation increases, while increased employee benefits were due to higher pension and employee health insurance costs.
WesBanco is a multi-state bank holding company with total assets of approximately $6.1 billion, operating through 118 branch locations and 107 ATMs in West Virginia, Ohio, and Pennsylvania. WesBanco's banking subsidiary is WesBanco Bank, Inc., headquartered in Wheeling, West Virginia. WesBanco also operates an insurance brokerage company, WesBanco Insurance Services, Inc., and a full service broker/dealer, WesBanco Securities, Inc.
Forward-looking Statements:
Forward-looking statements in this report relating to WesBanco's plans, strategies, objectives, expectations, intentions and adequacy of resources, are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. The information contained in this report should be read in conjunction with WesBanco's Form 10-K for the year ended December 31, 2011 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, 2012, June 30, 2012 and September 30, 2012 respectively, which are available at the SEC's website, www.sec.gov or at WesBanco's website, www.wesbanco.com. Investors are cautioned that forward-looking statements, which are not historical fact, involve risks and uncertainties, including those detailed in WesBanco's most recent Annual Report on Form 10-K filed with the SEC under "Risk Factors" in Part I, Item 1A. Such statements are subject to important factors that could cause actual results to differ materially from those contemplated by such statements, including, without limitation, that the businesses of WesBanco and Fidelity may not be integrated successfully or such integration may take longer to accomplish than expected; the expected cost savings and any revenue synergies from the merger of WesBanco and Fidelity may not be fully realized within the expected timeframes; disruption from the merger of WesBanco and Fidelity may make it more difficult to maintain relationships with clients, associates, or suppliers; the effects of changing regional and national economic conditions; changes in interest rates, spreads on earning assets and interest-bearing liabilities, and associated interest rate sensitivity; sources of liquidity available to WesBanco and its related subsidiary operations; potential future credit losses and the credit risk of commercial, real estate, and consumer loan customers and their borrowing activities; actions of the Federal Reserve Board, the Federal Deposit Insurance Corporation, the SEC, the Financial Institution Regulatory Authority, the Municipal Securities Rulemaking Board, the Securities Investors Protection Corporation, and other regulatory bodies; potential legislative and federal and state regulatory actions and reform, including, without limitation, the impact of the implementation of the Dodd-Frank Act; adverse decisions of federal and state courts; fraud, scams and schemes of third parties; internet hacking; competitive conditions in the financial services industry; rapidly changing technology affecting financial services; marketability of debt instruments and corresponding impact on fair value adjustments; and/or other external developments materially impacting WesBanco's operational and financial performance. WesBanco does not assume any duty to update forward-looking statements.
WESBANCO, INC.
Consolidated Selected Financial Highlights Page 4
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(unaudited, dollars in thousands, except shares and per share amounts)
For the Three Months Ended For the Year Ended
STATEMENT OF INCOME December 31, December 31,
------------------- ------------ ------------
Interest and dividend income 2012 2011 % Change 2012 2011 % Change
---- ---- -------- ---- ---- --------
Loans, including fees $42,311 $42,767 (1.07%) $166,656 $175,818 (5.21%)
Interest and dividends on securities:
Taxable 7,677 8,862 (13.37%) 32,461 36,034 (9.92%)
Tax-exempt 3,129 3,059 2.29% 12,399 12,109 2.39%
---- ----
Total interest and dividends on securities 10,806 11,921 (9.35%) 44,860 48,143 (6.82%)
------ ------ ------ ------ ------ ------
Other interest income 55 52 5.77% 170 206 (17.48%)
---
Total interest and dividend income 53,172 54,740 (2.86%) 211,686 224,167 (5.57%)
------ ------ ------ ------- ------- ------
Interest expense
Interest bearing demand deposits 395 487 (18.89%) 1,526 2,160 (29.35%)
Money market deposits 397 1,108 (64.17%) 2,183 4,802 (54.54%)
Savings deposits 168 337 (50.15%) 864 1,505 (42.59%)
Certificates of deposit 6,321 7,347 (13.96%) 26,371 31,054 (15.08%)
Total interest expense on deposits 7,281 9,279 (21.53%) 30,944 39,521 (21.70%)
Federal Home Loan Bank borrowings 789 1,456 (45.81%) 4,473 7,199 (37.87%)
Other short-term borrowings 976 1,232 (20.78%) 4,480 4,823 (7.11%)
Junior subordinated debt owed to unconsolidated
subsidiary trusts 840 839 0.12% 3,438 3,259 5.49%
Total interest expense 9,886 12,806 (22.80%) 43,335 54,802 (20.92%)
----- ------ ------- ------ ------ -------
Net interest income 43,286 41,934 3.22% 168,351 169,365 (0.60%)
Provision for credit losses 3,272 9,631 (66.03%) 19,874 35,311 (43.72%)
-----
Net interest income after provision for credit losses 40,014 32,303 23.87% 148,477 134,054 10.76%
------ ------ ----- ------- ------- -----
Non-interest income
Trust fees 4,655 4,198 10.89% 18,044 17,173 5.07%
Service charges on deposits 4,565 4,638 (1.57%) 17,138 18,629 (8.00%)
Electronic banking fees 2,807 2,603 7.84% 11,336 10,088 12.37%
Net securities brokerage revenue 1,284 1,048 22.52% 4,604 4,413 4.33%
Bank-owned life insurance 870 864 0.69% 3,516 3,566 (1.40%)
Net gains on sales of mortgage loans 1,015 679 49.48% 2,876 1,977 45.47%
Net securities gains 752 865 (13.06%) 2,463 963 155.76%
Net loss on other real estate owned and other assets (7) (312) 97.76% (305) (1,290) 76.36%
Other income 1,656 1,185 39.75% 5,103 4,369 16.80%
-----
Total non-interest income 17,597 15,768 11.60% 64,775 59,888 8.16%
------ ------ ----- ------ ------ ----
Non-interest expense
Salaries and wages 15,885 14,633 8.56% 58,913 56,673 3.95%
Employee benefits 5,924 4,456 32.94% 21,462 17,321 23.91%
Net occupancy 2,771 2,805 (1.21%) 10,905 11,255 (3.11%)
Equipment 2,604 2,193 18.74% 9,221 8,745 5.44%
Marketing 953 1,281 (25.60%) 4,235 5,142 (17.64%)
FDIC insurance 937 1,008 (7.04%) 3,899 4,768 (18.23%)
Amortization of intangible assets 570 588 (3.06%) 2,150 2,410 (10.79%)
Restructuring and merger-related expense 2,370 - 100.00% 3,888 - 100.00%
Other operating expenses 9,567 8,530 12.16% 35,447 33,981 4.31%
Total non-interest expense 41,581 35,494 17.15% 150,120 140,295 7.00%
------ ------ ----- ------- ------- ----
Income before provision for income taxes 16,030 12,577 27.45% 63,132 53,647 17.68%
Provision for income taxes 3,380 1,940 74.23% 13,588 9,838 38.12%
-----
Net Income $12,650 $10,637 18.92% $49,544 $43,809 13.09%
======= ======= ===== ======= ======= =====
Taxable equivalent net interest income $44,971 $43,581 3.19% $175,027 $175,885 (0.49%)
Per common share data
---------------------
Net income per common share - basic $0.46 $0.40 15.00% $1.84 $1.65 11.52%
Net income per common share - diluted $0.46 $0.40 15.00% $1.84 $1.65 11.52%
Dividends declared $0.18 $0.16 12.50% $0.70 $0.62 12.90%
Book value (period end) $24.45 $23.80 2.73%
Tangible book value (period end) (1) $13.34 $13.17 1.29%
Average common shares outstanding - basic 27,523,958 26,629,360 3.36% 26,867,227 26,614,697 0.95%
Average common shares outstanding - diluted 27,549,655 26,629,688 3.45% 26,888,847 26,615,281 1.03%
Period end common shares outstanding 29,214,660 26,629,360 9.71% 29,214,660 26,629,360 9.71%
(1) See non-GAAP financial measures for additional information relating to the calculation of this item.
WESBANCO, INC.
Consolidated Selected Financial Highlights Page 5
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(unaudited, dollars in thousands)
Selected ratios
---------------
For the Year Ended
December 31,
------------
2012 2011 % Change
---- ---- --------
Return on average assets 0.88% 0.81% 8.64%
Return on average equity 7.54 7.01 7.56
Return on average tangible equity (1) 13.68 13.32 2.70
Yield on earning assets (2) 4.40 4.80 (8.33)
Cost of interest bearing liabilities 1.04 1.32 (21.21)
Net interest spread (2) 3.36 3.48 (3.45)
Net interest margin (2) 3.53 3.66 (3.55)
Efficiency (1) (2) 60.98 59.50 2.49
Average loans to average deposits 74.15 76.32 (2.84)
Annualized net loan charge-offs/average loans 0.66 1.30 (49.23)
Effective income tax rate 21.52 18.34 17.34
For the Quarter Ended
---------------------
Dec. 31, Sept. 30, June 30, Mar. 31, Dec. 31,
2012 2012 2012 2012 2011
---- ---- ---- ---- ----
Return on average assets 0.87% 0.92% 0.87% 0.87% 0.77%
Return on average equity 7.36 7.83 7.45 7.54 6.61
Return on average tangible equity (1) 13.16 14.09 13.57 13.93 12.31
Yield on earning assets (2) 4.27 4.37 4.43 4.54 4.61
Cost of interest bearing liabilities 0.93 1.03 1.07 1.14 1.22
Net interest spread (2) 3.34 3.34 3.36 3.40 3.39
Net interest margin (2) 3.50 3.51 3.53 3.57 3.56
Efficiency (1) (2) 62.67 59.45 61.06 60.64 59.81
Average loans to average deposits 74.40 74.95 73.35 73.88 74.31
Annualized net loan charge-offs/average loans 0.47 0.54 0.84 0.82 1.22
Effective income tax rate 21.09 21.16 22.33 21.56 15.42
Trust assets, market value at period end $3,238,556 $3,236,618 $3,133,741 $3,164,235 $2,973,352
(1) See non-GAAP financial measures for additional information relating to the calculation of this item.
(2) The yield on earning assets, net interest margin, net interest spread and efficiency ratios are presented on a fully
taxable-equivalent (FTE) and annualized basis. The FTE basis adjusts for the tax benefit of income on certain tax-exempt
loans and investments. WesBanco believes this measure to be the preferred industry measurement of net interest income and
provides a relevant comparison between taxable and non-taxable amounts.
WESBANCO, INC.
Consolidated Selected Financial Highlights Page 6
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(unaudited, dollars in thousands, except shares) % Change
Balance sheets December 31, September 30, September 30, 2012
-------------- ------------ ------------- ------------------
Assets 2012 2011 % Change 2012 to December 31, 2012
---- ---- -------- ---- --------------------
Cash and due from banks $91,716 $129,396 (29.12)% $97,736 (6.16)%
Due from banks - interest bearing 33,889 10,929 210.08 18,675 81.47
Securities:
Available-for-sale, at fair value 1,021,244 1,016,340 0.48 993,754 2.77
Held-to-maturity (fair values of $639,273; $621,472 and $598,854,
respectively) 602,509 592,925 1.62 559,156 7.75
1,623,753 1,609,265 0.90 1,552,910 4.56
Total securities
Loans held for sale 21,903 6,084 260.01 14,225 53.98
------ ----- ------ ------ -----
Portfolio loans:
Commercial real estate 1,858,345 1,685,565 10.25 1,717,241 8.22
Commercial and industrial 478,025 426,315 12.13 447,767 6.76
Residential real estate 793,702 621,383 27.73 684,016 16.04
Home equity 277,226 251,785 10.10 255,787 8.38
Consumer 280,464 254,320 10.28 248,155 13.02
-------
Total portfolio loans, net of unearned income 3,687,762 3,239,368 13.84 3,352,966 9.99
Allowance for loan losses (52,699) (54,810) 3.85 (53,476) 1.45
------- ------- ---- ------- ----
3,635,063 3,184,558 14.15 3,299,490 10.17
Net portfolio loans
Premises and equipment, net 88,866 82,204 8.10 80,176 10.84
Accrued interest receivable 19,354 19,268 0.45 19,171 0.95
Goodwill and other intangible assets, net 324,465 283,150 14.59 281,570 15.23
Bank-owned life insurance 119,671 110,074 8.72 112,720 6.17
Other assets 120,037 101,102 18.73 100,286 19.69
Total Assets $6,078,717 $5,536,030 9.80% $5,576,959 9.00%
========== ========== ==== ========== ====
Liabilities
Deposits:
Non-interest bearing demand $874,923 $705,415 24.03% $760,308 15.07%
Interest bearing demand 831,368 698,113 19.09 784,748 5.94
Money market 847,805 789,037 7.45 778,121 8.96
Savings deposits 740,568 596,549 24.14 649,959 13.94
Certificates of deposit 1,649,620 1,604,752 2.80 1,515,076 8.88
4,944,284 4,393,866 12.53 4,488,212 10.16
Total deposits
Federal Home Loan Bank borrowings 111,187 168,186 (33.89) 91,617 21.36
Other short-term borrowings 142,971 196,887 (27.38) 186,886 (23.50)
Junior subordinated debt owed to unconsolidated subsidiary trusts 113,832 106,066 7.32 106,091 7.30
---- ----
367,990 471,139 (21.89) 384,594 (4.32)
Total borrowings
Accrued interest payable 3,856 4,975 (22.49) 4,628 (16.68)
Other liabilities 48,403 32,260 50.04 40,203 20.40
----- -----
Total Liabilities 5,364,533 4,902,240 9.43 4,917,637 9.09
--------- --------- ---- --------- ----
Shareholders' Equity
Preferred stock, no par value; 1,000,000 shares authorized;
none outstanding - - - - -
Common stock, $2.0833 par value; 50,000,000 shares authorized;
29,214,660 shares; 26,633,848 shares and 26,667,739 shares issued,
respectively;
29,214,660 shares; 26,629,360 shares and 26,665,519 shares outstanding,
respectively 60,863 55,487 9.69 55,558 9.55
Capital surplus 241,672 191,679 26.08 192,159 25.77
Retained earnings 419,246 388,818 7.83 411,853 1.80
Treasury stock ( 0; 4,488 and 2,220 shares - at cost, respectively) - (96) (100.00) (44) (100.00)
Accumulated other comprehensive income (loss) (6,365) (902) (605.65) 1,019 (724.63)
Deferred benefits for directors (1,232) (1,196) (3.01) (1,223) (0.74)
----- -----
Total Shareholders' Equity 714,184 633,790 12.68 659,322 8.32
------- ------- -------
Total Liabilities and Shareholders' Equity $6,078,717 $5,536,030 9.80% $5,576,959 9.00%
========== ========== ==== ========== ====
WESBANCO, INC.
Consolidated Selected Financial Highlights Page 7
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(unaudited, dollars in thousands)
Average balance sheet and
-------------------------
net interest margin analysis Three Months Ended December 31, For the Year Ended December 31,
----------------------------
2012 2011 2012 2011
---- ---- ---- ----
Average Average Average Average Average Average Average Average
Assets Balance Rate Balance Rate Balance Rate Balance Rate
------- ---- ------- ---- ------- ---- ------- ----
Due from banks - interest bearing $22,277 0.36% $53,005 0.25% $26,865 0.25% $48,723 0.21%
Loans, net of unearned income (1) 3,463,911 4.86% 3,237,808 5.24% 3,323,078 5.02% 3,256,887 5.40%
Securities: (2)
Taxable 1,275,530 2.41% 1,246,971 2.84% 1,270,446 2.56% 1,179,458 3.06%
Tax-exempt (3) 340,788 5.65% 305,129 6.17% 323,885 5.89% 299,357 6.22%
------- ---- ------- ---- ------- ---- ------- ----
Total securities 1,616,318 3.09% 1,552,100 3.50% 1,594,331 3.23% 1,478,815 3.70%
Other earning assets 17,158 0.82% 22,899 0.33% 19,621 0.52% 25,030 0.42%
------ ---- ------ ---- ------ ---- ------ ----
Total earning assets (3) 5,119,664 4.27% 4,865,812 4.61% 4,963,895 4.40% 4,809,455 4.80%
--------- ---- --------- ---- --------- ---- --------- ----
Other assets 641,331 647,999 642,491 630,788
Total Assets $5,760,995 $5,513,811 $5,606,386 $5,440,243
========== ========== ========== ==========
Liabilities and Shareholders' Equity
Interest bearing demand deposits $814,894 0.19% $577,644 0.33% $755,908 0.20% $628,037 0.34%
Money market accounts 800,059 0.20% 900,494 0.49% 781,400 0.28% 792,565 0.61%
Savings deposits 679,646 0.10% 588,799 0.23% 645,310 0.13% 570,093 0.26%
Certificates of deposit 1,558,594 1.61% 1,609,711 1.81% 1,547,379 1.70% 1,636,753 1.90%
--------- ---- --------- ---- --------- ---- --------- ----
Total interest bearing deposits 3,853,193 0.75% 3,676,648 1.00% 3,729,997 0.83% 3,627,448 1.09%
Federal Home Loan Bank borrowings 92,264 3.40% 172,609 3.35% 130,048 3.44% 210,506 3.42%
Other borrowings 178,809 2.17% 204,311 2.39% 191,534 2.34% 194,768 2.48%
Junior subordinated debt 108,673 3.08% 106,062 3.14% 106,727 3.22% 106,050 3.07%
------- ---- ------- ---- ------- ---- ------- ----
Total interest bearing liabilities 4,232,939 0.93% 4,159,630 1.22% 4,158,306 1.04% 4,138,772 1.32%
--------- ---- --------- ---- --------- ---- --------- ----
Non-interest bearing demand deposits 802,385 680,637 751,345 639,837
Other liabilities 41,977 34,888 40,051 36,573
Shareholders' equity 683,694 638,656 656,684 625,061
------- ------- ------- -------
Total Liabilities and Shareholders' Equity $5,760,995 $5,513,811 $5,606,386 $5,440,243
========== ========== ========== ==========
Taxable equivalent net interest spread 3.34% 3.39% 3.36% 3.48%
==== ==== ==== ====
Taxable equivalent net interest margin 3.50% 3.56% 3.53% 3.66%
==== ==== ==== ====
(1) Gross of allowance for loan losses and net of unearned income. Includes non-accrual and loans held for sale.
Loan fees included in interest income on loans are $1.0 million and $0.9 million for the three months ended December 31, 2012 and 2011,
and $4.0 million and $4.3 million for the year ended December 31, 2012 and 2011, 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 8
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(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 2012 2012 2012 2012 2011
---- ---- ---- ---- ----
$42,311 $41,423 $40,957 $41,964 $42,767
Loans, including fees
Interest and dividends on securities:
7,677 7,722 8,471 8,590 8,862
Taxable
3,129 3,113 3,079 3,079 3,059
Tax-exempt
10,806 10,835 11,550 11,669 11,921
Total interest and dividends on securities
55 30 38 47 52
Other interest income
Total interest and dividend income 53,172 52,288 52,545 53,680 54,740
------ ------ ------ ------ ------
Interest expense
395 397 393 405 487
Interest bearing demand deposits
397 487 493 742 1,108
Money market deposits
168 202 200 295 337
Savings deposits
6,321 6,450 6,621 6,979 7,347
Certificates of deposit
7,281 7,536 7,707 8,421 9,279
Total interest expense on deposits
789 1,020 1,288 1,377 1,456
Federal Home Loan Bank borrowings
976 1,169 1,156 1,178 1,232
Other short-term borrowings
840 869 854 874 839
Junior subordinated debt owed to unconsolidated subsidiary trusts
9,886 10,594 11,005 11,850 12,806
Total interest expense
Net interest income 43,286 41,694 41,540 41,830 41,934
3,272 4,497 5,903 6,202 9,631
Provision for credit losses
Net interest income after provision for credit losses 40,014 37,197 35,637 35,628 32,303
------ ------ ------ ------ ------
Non-interest income
4,655 4,379 4,258 4,753 4,198
Trust fees
4,565 4,362 4,218 3,993 4,638
Service charges on deposits
2,807 2,846 2,920 2,763 2,603
Electronic banking fees
1,284 1,131 1,114 1,075 1,048
Net securities brokerage revenue
870 891 874 880 864
Bank-owned life insurance
1,015 993 599 268 679
Net gains on sales of mortgage loans
752 316 1,294 100 865
Net securities gains
(7) (48) (282) 32 (312)
Net loss on other real estate owned and other assets
1,656 1,092 899 1,458 1,185
Other income
17,597 15,962 15,894 15,322 15,768
Total non-interest income
Non-interest expense
15,885 14,758 13,955 14,315 14,633
Salaries and wages
5,924 5,000 4,920 5,618 4,456
Employee benefits
2,771 2,654 2,703 2,776 2,805
Net occupancy
2,604 2,300 2,144 2,174 2,193
Equipment
953 795 1,716 771 1,281
Marketing
937 951 965 1,045 1,008
FDIC insurance
570 519 524 537 588
Amortization of intangible assets
2,370 1,518 - - -
Restructuring and merger-related expense
9,567 8,295 9,157 8,429 8,530
Other operating expenses
41,581 36,790 36,084 35,665 35,494
Total non-interest expense
Income before provision for income taxes 16,030 16,369 15,447 15,285 12,577
3,380 3,463 3,449 3,295 1,940
Provision for income taxes
Net Income $12,650 $12,906 $11,998 $11,990 $10,637
======= ======= ======= ======= =======
Taxable equivalent net interest income $44,971 $43,370 $43,197 $43,488 $43,581
Per common share data
---------------------
Net income per common share - basic $0.46 $0.48 $0.45 $0.45 $0.40
Net income per common share - diluted $0.46 $0.48 $0.45 $0.45 $0.40
Dividends declared $0.18 $0.18 $0.17 $0.17 $0.16
Book value (period end) $24.45 $24.73 $24.34 $24.11 $23.80
Tangible book value (period end) (1) $13.34 $14.17 $13.76 $13.50 $13.17
Average common shares outstanding - basic 27,523,958 26,664,882 26,647,050 26,628,025 26,629,360
Average common shares outstanding - diluted 27,549,655 26,672,849 26,650,325 26,631,187 26,629,688
Period end common shares outstanding 29,214,660 26,665,519 26,664,644 26,627,689 26,629,360
Full time equivalent employees 1,507 1,366 1,404 1,371 1,368
(1) See non-GAAP financial measures for additional information relating to the calculation of this item.
WESBANCO, INC.
Consolidated Selected Financial Highlights Page 9
------------------------------------------ ------
(unaudited, dollars in thousands)
Quarter Ended
-------------
Dec. 31, Sept. 30, June 30, Mar. 31, Dec. 31,
Asset quality data 2012 2012 2012 2012 2011
------------------ ---- ---- ---- ---- ----
Non-performing assets:
Troubled debt restructurings -
accruing $24,281 $24,858 $28,165 $27,900 $29,411
Non-accrual loans:
Troubled debt restructurings 15,001 9,449 11,159 16,935 17,287
Other non-accrual loans 24,371 24,841 28,793 36,139 40,205
------ ------ ------ ------ ------
Total non-accrual loans 39,372 34,290 39,952 53,074 57,492
------ ------ ------ ------ ------
Total non-performing loans 63,653 59,148 68,117 80,974 86,903
------ ------ ------ ------ ------
Other real estate and repossessed
assets 5,988 3,951 3,918 3,178 3,029
Total non-performing assets $69,641 $63,099 $72,035 $84,152 $89,932
======= ======= ======= ======= =======
Past due loans (1):
Loans past due 30-89 days $20,843 $17,332 $15,117 $15,034 $19,888
Loans past due 90 days or more 5,294 3,560 3,639 3,146 5,135
Total past due loans $26,137 $20,892 $18,756 $18,180 $25,023
======= ======= ======= ======= =======
Criticized and classified loans (2):
Criticized loans $86,777 $102,792 $122,854 $129,312 $141,195
Classified loans 85,960 94,613 100,436 107,757 116,973
Total criticized and classified loans $172,737 $197,405 $223,290 $237,069 $258,168
======== ======== ======== ======== ========
Loans past due 30-89 days / total portfolio loans 0.57% 0.52% 0.46% 0.47% 0.61%
Loans past due 90 days or more / total portfolio loans 0.14 0.11 0.11 0.10 0.16
Non-performing loans / total portfolio loans 1.73 1.76 2.08 2.51 2.68
Non-performing assets/total portfolio loans, other
real estate and repossessed assets 1.89 1.88 2.20 2.61 2.77
Criticized and classified loans / total portfolio loans 4.68 5.89 6.82 7.35 7.97
Allowance for loan losses
-------------------------
Allowance for loan losses $52,699 $53,476 $53,610 $54,395 $54,810
Provision for credit losses 3,272 4,497 5,903 6,202 9,631
Net loan and deposit account overdraft charge-offs 4,124 4,566 6,805 6,617 9,921
Annualized net loan charge-offs /average loans 0.47% 0.54% 0.84% 0.82% 1.22%
Allowance for loan losses/total portfolio loans 1.43% 1.59% 1.64% 1.69% 1.69%
Allowance for loan losses/non-performing loans 0.83 x 0.90 x 0.79 x 0.67 x 0.63 x
Allowance for loan losses/non-performing loans and
loans past due 0.59 x 0.67 x 0.62 x 0.55 x 0.49 x
Quarter Ended
-------------
Dec. 31, Sept. 30, June 30, Mar. 31, Dec. 31,
2012 2012 2012 2012 2011
---- ---- ---- ---- ----
Capital ratios
--------------
Tier I leverage capital 8.67% 9.11% 8.94% 8.81% 8.71%
Tier I risk-based capital 12.82 13.20 13.11 12.89 12.68
Total risk-based capital 14.07 14.45 14.36 14.14 13.93
Average shareholders' equity to average assets 11.87 11.80 11.66 11.52 11.58
Tangible equity to tangible assets (3) 6.77 7.13 7.00 6.76 6.68
(1) Excludes non-performing loans.
(2) Criticized and classified loans may include loans that are also reported as non-performing or past due.
(3) See non-GAAP financial measures for additional information relating to the calculation of this ratio.
NON-GAAP FINANCIAL MEASURES Page 10
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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) 2012 2012 2012 2012 2011 2012 2011
---- ---- ---- ---- ---- ---- ----
Return on average tangible equity:
Net income (annualized) $50,325 $51,345 $48,255 $48,223 $42,201 $49,544 $43,809
Plus: amortization of intangibles (annualized)
(1) 1,473 1,342 1,370 1,405 1,516 1,398 1,566
-------------- -----
Net income before amortization of intangibles
(annualized) 51,798 52,687 49,625 49,628 43,717 50,942 45,375
-------------- ------
Average total shareholders' equity 683,694 655,666 648,014 639,180 638,656 656,684 625,061
Less: average goodwill and other intangibles (290,054) (281,820) (282,339) (282,849) (283,406) (284,270) (284,304)
-------------- --------
Average tangible equity 393,640 373,846 365,676 356,331 355,250 372,414 340,757
-------
Return on average tangible equity 13.16% 14.09% 13.57% 13.93% 12.31% 13.68% 13.32%
===== ===== ===== ===== ===== ===== =====
Period End
----------
Dec. 31, Sept. 30, June 30, Mar. 31, Dec. 31,
2012 2012 2012 2012 2011
---- ---- ---- ---- ----
Tangible book value:
Total shareholders' equity $714,184 $659,322 $649,112 $642,001 $633,790
Less: goodwill and other intangible assets (324,465) (281,570) (282,088) (282,612) (283,150)
--------------
Tangible equity 389,719 377,752 367,024 359,389 350,640
Common shares outstanding 29,214,660 26,665,519 26,664,644 26,627,689 26,629,360
Tangible book value $13.34 $14.17 $13.76 $13.50 $13.17
====== ====== ====== ====== ======
Tangible equity to tangible assets:
Total shareholders' equity $714,184 $659,322 $649,112 $642,001 $633,790
Less: goodwill and other intangible assets (324,465) (281,570) (282,088) (282,612) (283,150)
--------------
Tangible equity 389,719 377,752 367,024 359,389 350,640
Total assets 6,078,717 5,576,959 5,525,405 5,600,643 5,536,030
Less: goodwill and other intangible assets (324,465) (281,570) (282,088) (282,612) (283,150)
--------------
Tangible assets 5,754,252 5,295,389 5,243,317 5,318,031 5,252,880
Tangible equity to tangible assets 6.77% 7.13% 7.00% 6.76% 6.68%
==== ==== ==== ==== ====
Efficiency ratio:
Efficiency ratio is calculated by dividing non-interest expense less restructuring and merger related expenses by the sum of net interest income on a fully taxable equivalent basis plus non-interest income.
Diluted earnings per share excluding restructuring and merger-related expense:
Calculated by subtracting tax effected restructuring and merger-related expense from net income and dividing by diluted average shares outstanding.
(1) Tax effected at 35%.
SOURCE WesBanco, Inc.
