Wesbanco, Inc. · NASDAQ:WSBC
Wesbanco — Investor Presentation (November 2019)
37 slides from Wesbanco's investor presentation, Nov 4, 2019
Slide 1: Investor Presentation (Q4 2019)
John Iannone Senior Vice President, Investor & Public Relations 304-905-7021 Investor Presentation (Q4 2019) (WSBC financials as of Q3 2019)
Slide 2: 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
Slide 3: Non-GAAP Financial Measures
In addition to the results of operations presented in accordance with Generally Accepted Accounting Principles (GAAP), WesBanco's management use, and this presentation contains or references, certain non-GAAP financial measures, such as tangible common equity/tangible assets; net income excluding af
Slide 4: Key Differentiators
Key Differentiators Balanced loan and deposit distribution across footprint Diversified earnings streams built for long-term success Strong market positions in economically diverse, major markets with positive demographic trends Robust legacy deposit base, enhanced by shale gas royalties Balanced an
Slide 5: Balanced and Diversified
Balanced and Diversified Balanced loan and deposit distribution across diverse regional footprint Strong market positions across legacy and major metropolitan markets Diversified revenue generation engines supported by 100-year old trust business and proprietary mutual fund family Note: loan and dep
Slide 6: Investment Rationale
Investment Rationale Balanced financial services company with a diversified earnings stream and a strong legacy of credit and risk management Disciplined growth that delivers positive operating leverage Emphasis on customer service to ensure relationship value that meets all customer needs efficient
Slide 7: Strategies for Long-Term Success
Strategies for Long-Term Success
Slide 8: Long-Term Growth Strategies
Long-Term Growth Strategies Focus on Delivering Positive Operating Leverage Strong Legacy of Credit Quality, Risk Management, and Compliance Diversified Loan Portfolio with C&I and Home Equity Lending Focus Long History of Strong Wealth Management Capabilities Retail Banking Service Strategies & Cor
Slide 9: Diversified Loan Portfolio
Diversified Loan Portfolio Focus on strategic growth, diversification, and credit quality Expansion of Commercial & Industrial (C&I), Home Equity Lending, and Residential Mortgage portfolios Maintain high credit standards Full suite of treasury management products, including international services,
Slide 10: Strong Wealth Management Capabilities
Private Banking $735MM in private banking loans and deposits 2,550+ relationships Growth opportunities from shale-related private wealth management Expansion in Kentucky and Indiana Strong Wealth Management Capabilities Note: assets, loans, deposits, and clients as of 9/30/2019; chart financials as
Slide 11: Franchise Expansion
Franchise Expansion Targeted acquisitions in existing markets and new higher-growth metro areas Critical, long-term focus on shareholder return Strong capital and liquidity, along with strong regulatory compliance processes, provides ability to execute transactions quickly Diligent efforts to mainta
Slide 12: Positive Operating Leverage
Positive Operating Leverage Disciplined growth, balanced by a fundamental focus on expense management and supported by franchise-enhancing acquisitions, in order to deliver positive operating leverage and enhance shareholder value Note: financial data as of 12/31; current year-to-date (YTD) data as
Slide 13: Returning Value to Shareholders
Returning Value to Shareholders Focus on appropriate capital allocation to provide financial flexibility while continuing to enhance shareholder value through dividend and earnings growth Q3 2019 dividend payout ratio of 43.7% provides upside potential Q3 2019 dividend yield 3.2%, compared to 2.4% f
Slide 14: Financial Overview
~~ WesBanco By all accounts, better. Financial Overview
Slide 15: Financial Performance Summary
Financial Performance Summary (Non-GAAP) excludes after-tax merger-related expenses represent annualized net loan charge-offs as percentage of average loans Note: please see the reconciliations to GAAP results in the appendix; Farmers Capital Bank Corporation merger closed August 2018; First Sentry
Slide 16: Financial and Operational Highlights – Q3 2019
Note: financial data as of quarter ending 9/30/2019, and compared to the quarter ending 9/30/2018; certain costs excludes after-tax merger-related expenses; please see the reconciliations to GAAP results in the appendix Financial and Operational Highlights – Q3 2019 Underlying, core performance, whi
Slide 17: Net Interest Margin (NIM)
Net Interest Margin (NIM) Year-to-date NIM reflects the benefit to asset yields from the increases in the Federal Reserve Board’s target federal funds rate during 2018 and the higher margins on the acquired Farmers Capital net assets plus purchase accounting, partially offset by higher overall fundi
Slide 18: Benefits of Core Deposit Funding Advantage
Benefits of Core Deposit Funding Advantage Robust legacy deposit base, enhanced by shale energy-related royalties These royalties have averaged low 8-figure monthly deposit in-flows for WesBanco, and have helped control total deposit funding costs (incl. non-int. bearing) During the last five years:
Slide 19: Risk Management and Regulatory Compliance
Strong legacy of credit and risk management Based upon conservative underwriting standards and approval processes Centralized back-office and loan funding functions Mature enterprise risk management program headed by Chief Risk Officer addressing key risks in all business lines and functional areas
Slide 20: Favorable Operating Metrics
Favorable Operating Metrics Disciplined execution upon growth strategies providing favorable performance versus peer group across key operating metrics Note: financial data as of 12/31; current YTD data as of 9/30/2019; please see the reconciliations in the appendix; peer group includes AUB, CBU, EG
Slide 21: Proposed Acquisition of Old Line Bancshares, Inc.
Proposed Acquisition of Old Line Bancshares, Inc. NOTE: as disclosed in the investor presentation filed on Form 8-K on 7/23/2019; please see associated reconciliations in that filing
Slide 22: Transaction Highlights
Transaction Highlights WesBanco will enter the two fastest growing MSAs in the Mid-Atlantic region Strong deposit market share in Washington D.C. (#16) and Baltimore (#11) MSAs(1) Top 10 deposit market share in state of Maryland (#9)(1) Combination of WSBC’s superior funding and wealth management ca
Slide 23: Summary of Key Terms
Summary of Key Terms Consideration OLBK stockholders to receive 0.7844 of a share of WSBC common stock for each share of OLBK common stock held, including stock options 100% stock consideration Implied consideration of $29.22 per share, or $500 million in aggregate(1) Management and Board of Directo
Slide 24: Strong Market Positions Across Footprint
Strong Market Positions Across Footprint Source: S&P Global Market Intelligence Note: Location data as of 7/22/2019; market share based on 2018 MSA deposit rankings (approximated on map by circles) (Pittsburgh MSA excludes BNY Mellon; Columbus MSA excludes single Wells Fargo branch & Nationwide Insu
Slide 25: Broad and Balanced Market Distribution
Broad and Balanced Market Distribution Notes: Loan and deposit data as of 6/30/2019; assumes all OLBK deposits in the state of Maryland; does not include any purchase accounting or merger related adjustments WesBanco (Current) WesBanco (Pro-Forma) NOTE: as disclosed in the investor presentation file
Slide 26: Appendix
~~ WesBanco By all accounts, better. Appendix
Slide 27: Stock Performance: Long-Term Cumulative Return
Stock Performance: Long-Term Cumulative Return Note: cumulative return since WSBC IPO compared to the cumulative return for the S&P500 Index over the same time period
Slide 28: Long-Term Core Deposit Funding Advantage
Pennsylvania Long-Term Core Deposit Funding Advantage Sources: location data as of 2/5/2019; county deposit share and market share based on 2018 MSA deposit rankings (Pittsburgh MSA excludes BNY Mellon; Columbus MSA excludes single Wells Fargo branch & Nationwide Insurance) (source: S&P Global Marke
Slide 29: Experienced and Stable Management Team
Executive Position Years in Banking Years at WSBC Todd Clossin President & Chief Executive Officer 35 6 Robert Young EVP – Chief Financial Officer 33 18 Ivan Burdine EVP – Chief Credit Officer 39 6 Jonathan Dargusch EVP – Wealth Management 38 9 Steve Lawrence EVP – Chief Internal Auditor 39 25 Micha
Slide 30: Financial Performance Summary Trend – Annual
Financial Performance Summary Trend – Annual Efficiency Ratio (1) Net Income (1) ($MM) (1) excludes merger-related expenses and net deferred tax asset revaluation (as applicable) Note: please see the reconciliations to GAAP results in the appendix; Farmers Capital Bank Corporation merger closed Augu
Slide 31: Diligent Focus on Credit Quality – Annual Trend
Loan loss allowance decline due to improvement in credit quality Legacy Loan Loss Allowance and Total Loans Non-Performing Assets to Total Assets Net Charge-Offs as % of Average Loans NPAs to Total Loans, OREO & Repossessed Assets Diligent Focus on Credit Quality – Annual Trend Note: please see the
Slide 32: Commercial Loan Outstanding Detail – Year-End
Commercial Loan Outstanding Detail – Year-End Note: loan data as of December 31st period ends (as reported in applicable Form 10-K) and includes acquired loans from the Farmers Capital Bank Corporation (August 2018), First Sentry Bancshares (April 2018), Your Community Bankshares (September 2016), a
Slide 33: Reconciliation: Efficiency Ratio & Operating Leverage
Reconciliation: Efficiency Ratio & Operating Leverage Note: “efficiency ratio” is non-interest expense excluding restructuring and merger-related expense divided by total income; FTE represents fully taxable equivalent; Farmers Capital Bank Corporation merger closed August 2018; First Sentry Bancsha
Slide 34: Reconciliation: Net Income and EPS (Diluted)
Reconciliation: Net Income and EPS (Diluted) Note: Farmers Capital Bank Corporation merger closed August 2018; First Sentry Bancshares merger closed April 2018, Your Community Bankshares merger closed September 2016; ESB Financial merger closed February 2015
Slide 35: Reconciliation: Return on Average Assets
(1) three-, six-, and nine-month (as applicable) figures are annualized Note: Farmers Capital Bank Corporation merger closed August 2018; First Sentry Bancshares merger closed April 2018, Your Community Bankshares merger closed September 2016; ESB Financial merger closed February 2015 Reconciliation
Slide 36: Reconciliation: Return on Average Tangible Equity
(1) three-, six-, and nine-month (as applicable) figures are annualized; amortization of intangibles tax effected at 21% for 2018 forward, and 35% for all prior periods Note: Farmers Capital Bank Corporation merger closed August 2018; First Sentry Bancshares merger closed April 2018, Your Community
Slide 37: Reconciliation: Legacy Loan Loss Allowance and Total Loans
Note: Farmers Capital Bank Corporation merger closed August 2018; First Sentry Bancshares merger closed April 2018, Your Community Bankshares merger closed September 2016; ESB Financial merger closed February 2015; “Legacy” as defined in WSBC’s ALLL model glossary are “loans that were originated by