Wesbanco, Inc. · NASDAQ:WSBC
Wesbanco — Janney Bank & Thrift Conference 2010
31 slides from Wesbanco's conference presentation, May 13, 2010
Slide 1: Janney Bank & Thrift Conference
Janney Bank & Thrift Conference May 14, 2010 Philadelphia, PA
Slide 2: Forward-Looking Statements
Forward-Looking Statements Forward-looking statements in this presentation 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 informatio
Slide 3: WesBanco at a Glance
WesBanco at a Glance • Headquarters in Wheeling, West Virginia • Assets: $5.4 billion • Founded in 1870 • 32 banks/23 companies acquired in 25 years • Banking operations in West Virginia, Ohio and Western Pennsylvania 114 114 banking banking offices offices ++ Pittsburgh, Pittsburgh, PA PA Loan
Slide 4: An Expanding Franchise in Contiguous Markets
An Expanding Franchise in Contiguous Markets: 114 banking offices • Ranked #1-3 in deposit market share in 14 counties out of 37* Columbus Springfield Wheeling • Expanding along major highways to Dayton population centers (Columbus, Dayton, Huntington Cincinnati) • Organized into seven markets * SNL
Slide 5: 2009 Accomplishments
2009 Accomplishments • Completed Amtrust branch acquisition in March, adding $600 million in deposits, enhancing overall bank liquidity with no loans. • Paid back $75 million in TARP capital in September without necessity of a dilutive common raise. Repurchased warrant in December. • Earnings for th
Slide 6: 2010 Initiatives
2010 Initiatives • Continue balance sheet restructuring to improve capital & efficiency while anticipating higher interest rates. • Improve regulatory capital to new “unofficial” well- capitalized ratios. • Promote margin expansion through enhanced marketing of low cost accounts, management of loan/
Slide 7: 2010 Initiatives (con't.)
2010 Initiatives (con’t.) • Improve fee income by expanding treasury management focus and increasing sales of non-traditional products such as trust, brokerage and insurance. • Control non-interest expenses through improved monitoring processes and technology initiatives. • Monitor opportunities for
Slide 8: Investment Rationale
Investment Rationale Stability, Diversity and Capital Strength • Strong regulatory capital • Proven acquisition-oriented growth strategy • Improving liquidity • Asset quality compares favorably with peers • Diverse earnings stream • Positioned for rising rates • Improving stock performance
Slide 9: Strong Capital Base
Strong Capital Base 15.00% 12.00% 9.00% 6.00% 3.00% 0.00% 2007 2008 2009 1Q '10 Tangible Equity / Tangible Assets Total Risk Based Capital Data Source = SNL Financial
Slide 10: Growth by Acquisition: A WSBC Core Competency
Growth by Acquisition: A WSBC Core Competency (MM) $6.0 7.5 year Asset Growth • Focused on higher growth $5.0 CAGR = 11.8% metro markets and enhanced market share $4.0 • Five acquisitions in seven $3.0 years – assets more than $2.0 doubled since 2001 $1.0 • A history of successful consolidations $0.
Slide 11: Securities Portfolio – Quality & Liquidity
Securities Portfolio – Quality & Liquidity Securities = $1.21 B • Average portfolio yield of 4.42% YTD ~23% of total assets • WAL approx. 4 years • Over 52% unpledged Agencies, 18.0% • Minimal private label CMO’s, equities or corporate/ABS securities Agency Municipals, Municipals, Mortgage- 29.5% 29
Slide 12: Improving Deposit Mix
($ in thousands) Improving Deposit Mix 1Q 2005 1Q 2010 Savings Savings Savings Savings 14.6% 12.5% 12.5% 14.6% Interest Interest Interest Interest Bearing Bearing Time Time Bearing Bearing Time Time 11.4% Deposit Deposit 11.4% 10.6% 10.6% Deposit Deposit 43.3% 43.3% 44.3% 44.3% Non- Non- Non- Non- I
Slide 13: Significant Liquidity
Significant Liquidity • Loan-to-Deposit ratio decreased to 86% at 3/31/10, down from 103% before 2009 branch acquisition. • Reduced reliance on wholesale funding (borrowings and brokered CDs); < 17% of total assets. • Securities portfolio of $1.2B highly liquid; 52% unpledged and $26 million in net
Slide 14: Diversified Loan Portfolio
Diversified Loan Portfolio Total Loans = $3.44 B Comm. Real Estate = Comm. Comm. & & Ind. Ind. $1.78 B 13% 13% Consumer Consumer Const & Dev. 8% 8% 14% Comm. Comm. Real Real Estate, Estate, 52% 52% HELOC, HELOC, 7% 7% Investor- Owner- Owner- Investor- Owned Occupied Occupied Owned 51% 35% 35% 51% Re
Slide 15: Conservative Exposure to Potential Problem Loan Areas
Conservative Exposure to Potential Problem Loan Areas WSBC is Below Regulatory CRE Guidelines Exposure1 % of Regulatory ($Millions) RBC2 Guideline Land, Construction & Development $ 295 68% 100% Investor-Owned Commercial 621 142% N/A Investor-Owned Multi-Family 187 43% N/A Total Land, C&D, and Inves
Slide 16: Non-Performing Loans by Loan Category
Non-Performing Loans by Loan Category (As a % of total loans) 1Q’09 4Q’09 1Q’10 Land, Construction & Development 0.20% 0.20% 0.52% Investment Property 0.78% 0.66% 0.64% Owner-Occupied 0.53% 0.61% 0.75% Total CRE Non-Performing Loans 1.51% 1.47% 1.91% Commercial & Industrial 0.25% 0.38% 0.41% Residen
Slide 17: CRE and Construction Concentration vs. Peers
CRE and Construction Concentration vs. Peers (1) CRE & Const. Loans / Total Loans (%) CRE & Const. NAs / Total CRE and Const. Loans (%) 55.0 5.0 4.0 50.0 3.0 45.0 2.0 40.0 1.0 35.0 0.0 08 08 08 08 09 09 09 09 10 08 08 08 08 09 09 09 09 10 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 1 2 3 4
Slide 18: NPA + ≥ 90 PD Loans / Total Loans + OREO
NPA + ≥ 90 PD Loans / Total Loans + OREO WSBC National Peers* 4.78% 4.80% 4.35% 4.55% 3.65% 3.21% 2.67% 2.82% 2.70% 2.24% 1Q'09 2Q'09 3Q'09 4Q'09 1Q'10 • National Peer Group = Median of 102 banks nationwide with assets between $2-$10 B. The 1Q ’10 peer data had 46 of 102 available for NPA.
Slide 19: Ann. Net Charge-offs / Avg. Loans
Ann. Net Charge-offs / Avg. Loans WSBC National Peers* 2.44% 2.19% 1.79% 1.58% 1.17% 1.58% 1.59% 0.83% 0.57% 0.68% 1Q'09 2Q'09 3Q'09 4Q'09 1Q'10 • National Peer Group = Median of 102 banks nationwide with assets between $2-$10 B. The 1Q ’10 peer data had 95 of 102 available for net charge-offs.
Slide 20: Improving Credit Infrastructure: 2010 Initiatives
Improving Credit Infrastructure: 2010 Initiatives • Added more staff to Special Assets and credit risk management • Conducted skills assessment to identify and prioritize opportunities for lender development • Initiated additional formal credit training program for commercial & retail sales force •
Slide 21: Quarterly Performance Comparison
Quarterly Performance Comparison ($000’s except per share data) 1Q 2010 1Q 2009 %∆ Net Income Available to $7,910 $4,394 + 80.0% Common Shareholders Diluted Earnings Per Share $0.30 $0.17 + 76.5% Loan Loss Provision $11,500 $9,550 - 20.4% Pre-tax, Pre-provision & Pre- $21,892 $17,643 + 24.1% TARP –
Slide 22: Net Interest Margin
Net Interest Margin NIM Yield on Earning Assets Cost of Funds 7.00% 6.00% 5.65% 5.28% 5.26% 5.00% 4.00% 3.47% 3.46% 3.57% 3.00% 2.52% 2.05% 2.00% 1.91% 1.00% 0.00% 1Q'09 4Q '09 1Q '10
Slide 23: Growing & Diversified Noninterest Income
Growing & Diversified Noninterest Income Other (Sec. Gains, BOLI, etc.) Service Charges & Fees Insurance (Net) • Noninterest Noninterest income income contributes contributes over over ($MM) Securities brokerage (Net) 27% 27% of of 1Q 1Q ‘10 ‘10 revenue. revenue. Trust $70 • Deposit $64.6 Deposit se
Slide 24: Wealth Management Services
Wealth Management Services • $2.8B of assets under management/custody. • Over 5,000 trust relationships. • 4 locations in WV & OH Assets Under Management ($B) • Improving performance as Management Fees ($MM) asset values recover. $16.2 $16.5 $15.0 • Product capabilities: $14.9 $13.7 Trust Trust
Slide 25: Interest Rate Sensitivity
Interest Rate Sensitivity % Change in Net Interest Income from Immediate Change in Base Over One Year Interest Rates Mar. 31, 2010 Dec. 31, 2009 Up 1% Rate Shock +2.0% -0.4% Up 2 % Rate Shock -0.3% -4.7% Up 3 % Rate Shock -2.9% -9.6% Up 2 % Rate Ramp +2.6% +0.9%
Slide 26: Peer Group – Price / Tangible Book Value
Peer Group – Price / Tangible Book Value Price / Tangible Book Value (X) 3.00 2.82 Redeemed TARP / Did Not Receive Still Has TARP 2.42 2.25 2.18 2.15 Median (Excl. WSBC): 1.82x 1.97 1.89 1.82 1.79 Recent Common 1.52 (x) 1.50 Equity Raise* 1.33 1.23 1.21 1.07 0.97 0.75 0.00 UBSI STBA FNB CHCO IBNK PR
Slide 27: Peer Group – Price / Normalized Earnings
Peer Group – Price / Normalized Earnings Price / Normalized Earnings (x) (1) 20.00 19.0x Median (Excl. WSBC): 11.5x 15.00 13.8x 13.2x 13.3x 11.5x 10.4x 10.8x 9.8x 10.2x 10.00 8.8x 5.00 0.00 FCF WSBC CHCO MSFG FNB STBA FFBC ONB UBSI IBNK Source: FactSet Research Systems Data through 4/28/2010; pro fo
Slide 28: Current Market Update
Current Market Update Market Performance – Cycle-to-Date Market Performance – YTD 200% 160% 150% 160% 140% 130% 120% 120% 80% 110% 100% 40% 90% 12/31/09 01/29/10 02/26/10 03/29/10 04/28/10 06/30/08 12/12/08 05/29/09 11/12/09 04/28/10 WesBanco Inc. (+ 43.68%) WesBanco Inc. (+ 3.38%) KBW Regional Bank
Slide 29: Analyst Comments on 1Q Earnings
Analyst Comments on 1Q Earnings “WesBanco’s first quarter 2010 earnings showed improvement with regard to credit costs and the net interest margin.” -Stephen Stephen M. M. Moss Moss Janney Janney Montgomery Montgomery Scott Scott “While the increase [in provision expense] is indicative of a continue
Slide 30: Why WesBanco?
Why WesBanco? • Earnings derived from diversified product lines, markets and customers. • Efficient controls and delivery channels. • Responsive to local market conditions and acquisition opportunities. • Proven ability to manage risk effectively. • Financially conservative; shareholder focused.
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