Wesbanco, Inc. · NASDAQ:WSBC
Wesbanco — Investor Presentation (November 2017)
35 slides from Wesbanco's investor presentation, Nov 15, 2017
Slide 1: Investor Presentation (Q4 2017)
NG Sug WesBanco By all accounts, better. Investor Presentation (Q4 2017) (WSBC financials as of Q3 2017) John lannone Vice President, Investor Relations 304-905-7021
Slide 2: Forward-Looking Statements
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 cont
Slide 3: Who and Where We Are
Who and Where We Are > Founded in 1870 Strong Market Positions in Major Markets = $9.9 billion in assets a t * Strong community banking roots « Headquartered in Wheeling, WV > Strong market positions across legacy and diverse, major metropolitan markets « Balanced market distribution = Strong demogr
Slide 4: Key Differentiators
Key Differentiators > Emerging financial services company with a community bank at its core « Diversified revenue growth engines with a critical focus on credit quality « Well-balanced loan and deposit distribution across broad footprint = Robust legacy market share combined with strong market posit
Slide 5: Investment Rationale
Investment Rationale > Well-balanced financial services company with a diversified earnings stream and a strong legacy of credit and risk management > Disciplined growth, balanced by a fundamental focus on expense management, that delivers positive operating leverage and increases shareholder value
Slide 6: Growth Strategy
WeBsro By all accounts, better. Growth Strategy
Slide 7: Long-Term Growth Strategies
Long-Term Growth Strategies > Vv Diversified loan portfolio with a focus on Commercial & Industrial (C&l) and home equity lending = Increased productivity from and enhancements to the commercial lending team = Utilizing financial center network to support home equity lending Long history of strong w
Slide 8: Diversified Loan Portfolio
Diversified Loan Portfolio > Focus on strategic growth, diversification, and credit quality « Expansion of Commercial and Industrial (C&l) and HELOC portfolios = Targeted reductions in consumer portfolio to reduce risk profile > Full suite of treasury management products, including international ser
Slide 9: Strong Wealth Management Capabilities
Strong Wealth Management Capabilities Trust & Investments >$3.9B of trust and mutual fund assets under management >5,000+ relationships >» Growth opportunities from shale- related private wealth management >» Expansion in Kentucky and Indiana > WesMark funds Securities Brokerage > Securities investm
Slide 10: Retail Banking Strategies
Retail Banking Strategies > Efficient financial center network that provides a core funding advantage « Effective staff management and technology utilization supported by centralized, low-cost back office functions # Utilizing network to support residential mortgage, home equity lending, and busines
Slide 11: Strong Culture of Expense Management
Strong Culture of Expense Management > Fundamental focus on expense management to deliver positive operating leverage and increase shareholder value > Scalable technology infrastructure supports both organic and acquisition- related growth without significant additional investment > Emphasis on tech
Slide 12: Franchise Expansion
Franchise Expansion > Targeted acquisitions in existing Contiguous Markets Radius markets and new higher-growth ©. metro areas DS ain See rea F oe veo Critical, long-term focus on shareholder return NOIANA Strong capital and liquidity, along with strong regulatory compliance processes, provides abil
Slide 13: $10 Billion Asset Threshold Plan
$10 Billion Asset Threshold Plan > Current environment does not change stated plans or infrastructure build > Methodically making the necessary investments, and believe are well- positioned from staffing, infrastructure development, process, compliance, and CRA perspectives « Liquidity, loan, and ca
Slide 14: Favorable Operating Metrics
Favorable Operating Metrics > Disciplined execution upon growth strategies providing favorable performance versus peer group across key operating metrics Return on Average Tangible Equity Return on Average Assets 15.6% 14.6% 14.0% 13.7% 11 3% 1 08% 1.07% 1.07% 2014 2015 2016 2017 (9/30 YTD) 2014 201
Slide 15: Returning Value to Shareholders
Returning Value to Shareholders > Focus on appropriate capital allocation to provide flexibility while continuing to enhance shareholder value > Q3 2017 dividend payout ratio of 43.3% provides upside potential > Q3 2017 dividend yield 2.6%, compared to 1.6% for bank group Quarterly Dividend per Shar
Slide 16: Financial Overview
agg | WesBanco By all accounts, better. Financial Overview
Slide 17: Financial and Operational Highlights — Q3 2017
Financial and Operational Highlights — Q3 2017 > Net income up 13.9% and EPS of $0.60 (excluding merger-related costs) > Return on tangible common equity of 13.3% (excluding merger-related costs) > Strong progress on our operational and growth strategies in order to maintain a strong financial insti
Slide 18: Financial Performance Summary (Non-GAAP)
Financial Performance Summary (Non-GAAP) Three Months Ending Nine Months Endin ($000s, except earnings per share) 9/30/2016 9/30/2017 Change 9/30/2016 9/30/2017 Change Net Income ‘” $23,859 $26,356 10.5% $69,292 $78,903 13.9% Diluted Earnings per Share ‘? $0.60 $0.60 0.0% $1.79 $1.79 0.0% Net Charge
Slide 19: Net Interest Margin
Net Interest Margin > During 2017, net interest margin (NIM) improvement has resulted from a combination of balance sheet remix strategy, the YCB acquisition, and recent Federal Reserve target federal funds rate increases Positioned for asset sensitivity in a rising interest rate environment Demand
Slide 20: Interest Rate Sensitivity
Interest Rate Sensitivity > Positioned for asset sensitivity in a rising rate environment Immediate Change in Interest Rates Change in Net Interest Income from Base over One Year December 31, 2016 September 30, 2017 +1% Rate Shock +3.1% +3.0% +2% Rate Shock +4.6% +5.0% +3% Rate Shock +4.7% +7.4% +2%
Slide 21: Securities Portfolio
Securities Portfolio > Securities portfolio represents ~24% of total assets =" Scheduled maturities, calls, and select sales of short-term, lower-yielding securities to help manage risk and portfolio efficiency while funding loan growth Composition as of 9/30/2017 Municipals Agency 39% Mortgage- Bac
Slide 22: Diversified Revenue Generation: Non-Interest Income
Diversified Revenue Generation: Non-Interest Income > Operating non-interest income 7 0 contributed 23% of net revenue during Q3 2017 year-to-date $90 4 $78.4 |, > Q3 2017 operating non-interest $20 73882 income reflects: $70 + J mm Ly ! $65.4 = Growth in electronic banking and = seo | | deposit ser
Slide 23: Risk Management and Regulatory Compliance
Risk Management and Regulatory Compliance > Strong legacy of credit and risk management = Based upon conservative underwriting standards > Mature enterprise risk management program headed by Chief Risk Officer addressing key risks in all business lines and functional areas = Reports to board-level R
Slide 24: Appendix
- - 4 Ay W WesBanco By all accounts, better. Appendix
Slide 25: Stock Performance: Long-Term Cumulative Return
Stock Performance: Long-Term Cumulative Return 600% 500% + 400% 4 300% + 200% + 0% 4 (100%) - WwW Note: cumulative return since WSBC IPO compared to the cumulative return for the S&P500 Index over the same time period SE LEEPEEPEBPERSES s $ —wWsBC —S&P500 24
Slide 26: Experienced and Stable Management Team
Experienced and Stable Management Team Years in Executive Position Banking James Gardill Chairman of the Board 44* 44 Todd Clossin President & Chief Executive Officer 33 4 Robert Young EVP — Chief Financial Officer 31 16 Lynn Asensio EVP — Retail Administration 39 12 Ivan Burdine EVP — Chief Credit
Slide 27: Financial Performance Summary Trend — Annual
Financial Performance Summary Trend — Annual 60.98% 60.99% 59.59% $95.3 57.05% 56.69% $88.0 $70.8 $64.8 $52.1 2012 2013 2014 2015 2016 2012 2013 2014 2015 2016 Return on Average Assets (1) Return on Average Tangible Equity “) 1.06% 4.15% 1.08% 1.07% 15.99% 15.57% 0.93% | 14.24% | 14.58% 13.96% 2012
Slide 28: Diligent Focus on Credit Quality — Annual Trend
Diligent Focus on Credit Quality — Annual Trend > Loan loss allowance decline due to (eee eee in credit quality Net | Net Charge-Offs as % of Average Loans | -Offs as % of Average Loans Legacy Loan ie Allowance and Total Loans a Loan Loss Allowance LES $52,699 — $44,164 $41,709 $41,108 0.38% i ] LJ
Slide 29: Reconciliation: Efficiency Ratio
Reconciliation: Efficiency Ratio Three Months Ending Nine Months Ending 9/30/2016 9/30/2017 9/30/2016 9/30/2017 12/31/2012 12/31/2013 12/31/2014 12/31/2015 12/31/2016 Non-Interest Expense $57,601 $55,754 $150,303 $166,023) $150,120 $160,998 $161,633 $193,923 $208,680 Restructuring & Merger-Related E
Slide 30: Reconciliation: Net Income and EPS (Diluted)
Reconciliation: Net Income and EPS (Diluted) Three Months Ending Nine Months Ending Twelve Months Ending ($000s, except earnings per share) 9/30/2016 9/30/2017 9/30/2016 9/30/2017 12/34/2012 12/31/2013 12/31/2014 12/31/2015 12/31/2016 Net Income $17,435 $26,356 $62,417 $78,584 $49,544 $63,925 $69,97
Slide 31: Reconciliation: Return on Average Assets
Reconciliation: Return on Average Assets Three Months Ending Nit hs Endi Ive Months Ending ($000s) 9/30/2016 9/30/2017 = 9/30/2016 = 9/30/2017 + 12/31/2012 12/31/2014 12/31/2015 12/31/2016 Net Income "") $69,361 $104,566 $83,375 $105,067 $49,544 $63,925 $69,974 $80,762 $86,635 Restructuring and Merg
Slide 32: Reconciliation: Return on Average Tangible Equity
Reconciliation: Return on Average Tangible Equity ($000s) Three Months Ending 9/30/2016 9/30/2017 Nine Months Ending 9/30/2016 9/30/2017 Twelve Months Ending 12/31/2012 12/31/2013 12/31/2014 12/31/2015 12/31/2016 Related Expenses Net Income“) $69,361 $104,566] $83,375 $105,067] $49,544 —« $63,925 «$
Slide 33: Reconciliation: Operating Non-Interest Income
Reconciliation: Operating Non-Interest Income Three Months Ending Nine Months Ending Twelve Months Ending 9/30/2016 9/30/2017 9/30/2016 9/30/2017 12/31/2014 12/31/2015 12/31/2016 Service Charges on Deposits $4,733 $5,320 $12,861 $15,254 $16,135 $16,743 $18,333} Electronic Banking (e-Banking) Fees $3
Slide 34: Reconciliation: Legacy Loan Loss Allowance and Total Loans
Reconciliation: Legacy Loan Loss Allowance and Total Loans Twelve Months Ending ($000s) 12/31/2012 12/31/2013 12/31/2014 12/31/2015 12/31/2016 Loan Loss Allowance $52,699 $47,368 $44,654 $41,710 $43,674 Allowance on Acquired Loans $o_ ($582) ($500) ($1) ($2,566)} Legacy Loan Loss Allowance $52,699 $
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