Wesbanco, Inc. · NASDAQ:WSBC

Wesbanco — Sterne Agee Financial Services Conference 2015

54 slides from Wesbanco's conference presentation, Feb 11, 2015

  1. Slide 1: WesBanco – Sterne Agee Financial Services Conference

    WesBanco By all accounts, better. Sterne Agee Financial Services Conference One-on-One Meetings Boca Raton, FL February 12 - 13, 2015

  2. 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

  3. Slide 3: Forward-looking statements (continued)

    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 c

  4. Slide 4: Mid-Atlantic Bank Headquartered in Wheeling, West Virginia

    Mid-Atlantic Bank Headquartered in Wheeling, West Virginia Assets: $8.3 billion Founded in 1870 34 banks/24 companies acquired in 26 years Geographic Loan Distribution: West Virginia (40%), Ohio (34%) and Western Pennsylvania (26%) 143 Financial Centers and 128 ATMs Wealth management, securit

  5. Slide 5: Executive management

    Years in Years w/ Executive Position Banking WSBC James Gardill Chairman of the Board 43* 43 Todd Clossin President & CEO 31 2 Robert Young EVP & CFO 29 14 Peter Jaworski EVP & Chief Credit Officer 31 20 Jonathan Dargusch EVP – Trust & Investments 34 5 Bernard Twigg EVP – Chief Lending Officer 31 12

  6. Slide 6: Recent accomplishments

     Completed acquisition of ESB Financial Corporation (February 2015).  Completed President/CEO Succession Plan (May 2014).  Increased dividends to shareholders 7 times in last 16 quarters representing a 57% increase.  Earned five consecutive “Outstanding” CRA ratings.  Outperformed the S&P 500 o

  7. Slide 7: Fourth quarter earnings summary

    For the For the Quarter Quarter Ended Ended ($ in thousands, except diluted earnings per share)00’s except December December per share data) 2013 2014 % Change Net Income $15,353 $16,512 7.5% Diluted Earnings Per Share $ 0.52 $ 0.56 7.7% Provision for Credit Losses $3,144 $ 1,880 (40.2.%) Return on

  8. Slide 8: Annual earnings summary 2010-2014

    YTD YTD YTD YTD YTD ($ in thousands, except diluted earnings per share)00’s except per share December December December December December data) 2010 2011 2012 2013 2014 Net Income $35,611 $43,809 $49,544 $63,925 $69,974 Diluted Earnings Per Share $ 1.34 $ 1.65 $ 1.84 $ 2.18 $ 2.39 Provision for Cred

  9. Slide 9: ROATCE and ROAA versus peers

    1.20% 18.00% 16.00% 1.00% 14.00% 0.80% 12.00% 10.00% 0.60% 8.00% 0.40% 6.00% 4.00% 0.20% 2.00% 0.00% 0.00% 2010 2011 2012 2013 2014* ROATCE - WSBC ROATCE - PEER ROAA - WSBC ROAA - PEER Peer Group source: SNL Financial 9 * Peer is 9/30/14 YTD.

  10. Slide 10: Efficiency ratio versus peers

    64.00% 63.00% 62.00% 61.00% 60.00% 59.00% 58.00% 57.00% 2010 2011 2012 2013 2014* Efficiency Ratio - WSBC Efficiency Ratio - PEER Peer Group source: SNL Financial * Peer is 9/30/14 YTD. 10

  11. Slide 11: Organic Growth Opportunities

    11 Organic Growth Opportunities

  12. Slide 12: WesBanco and ESB branch map

    WesBanco Inc. 120 Branches ESB Financial Corp. 23 Branches 12

  13. Slide 13: Trust and securities brokerage

     $3.8B of assets under management/custody.  Over 5,000 trust relationships.  Combined Trust, Securities Brokerage and Private Banking under one management team.  10 locations in WV, OH & PA. Assets Under Management ($B) Management Fees ($MM)  Improving performance as Net Securities Brokerage Re

  14. Slide 14: Earnings and total assets per FTE

    4,200 50 45 4,100 40 4,000 35 3,900 30 3,800 25 20 3,700 15 3,600 10 3,500 5 3,400 - 2010 2011 2012 2013 2014 Earnings / FTE Total Assets / FTE 14

  15. Slide 15: Increased productivity of the commercial team

    Increased Productivity, Improvement & Enhancement of the Commercial Team ¢ Dedicated C&l and Business Banking teams in our urban markets with dedicated management. ¢ New product capabilities in SWAP, Treasury Management and Government leasing. ¢ Realignment of resources from lower growth to higher g

  16. Slide 16: Retail sales/service distribution strategies

    16 M & Retail Sales/Service Distribution Strategies All financial centers within 4 hour drive of headquarters, efficient and tight network distribution (talent/marketing). Installation of instant issue debit cards machines. Fees now exceed monthly NSF/OD income. Licensed Banker Platform produced ove

  17. Slide 17: Full suite of E-Services

     Full suite of E-Services  Internet banking – Retail and Commercial  Mobile Application – Alerts/text  Mobile Deposits  TM Services  Bill Pay  Payment via Debit Cards  Retail  Business  Private Banking  Instant Issue  Working towards E.M.V.  Partnering with Apple Pay  Business Remote C

  18. Slide 18: Debit card transactions

    38,800 35,000 30,000 33,800 25,000 28,800 20,000 23,800 15,000 18,800 10,000 13,800 5,000 8,800 - 2010 2011 2012 2013 2014 Debit Card Tranactions Items Processed 18

  19. Slide 19: Internet, IVR and mobile banking users

    53,800 120,000 48,800 100,000 43,800 38,800 80,000 33,800 60,000 28,800 23,800 40,000 18,800 20,000 13,800 8,800 - 2010 2011 2012 2013 2014 Internet Banking Users IVR Users Mobile Banking Users E-Statement Users 19

  20. Slide 20: Total loan category growth

    Total Loan Category Growth (dollars in thousands) $2,200 $2,000 $1,800 $1,600 $1,400 $1,200 $1,000 $800 $600 $400 $200 $0 2010 2011 2012 2013 2014 Comm. RE C&I Res RE HE Lines Consumer 20

  21. Slide 21: Non-interest bearing deposits

    (Dollars in thousands) Non-interest bearing deposits % of Total Deposits $1,200,000 25.0% $1,000,000 20.0% $800,000 15.0% $600,000 10.0% $400,000 5.0% $200,000 $0 0.0% 4Q'10 1Q'11 2Q'11 3Q'11 4Q'11 1Q'12 2Q'12 3Q'12 4Q'12 1Q'13 2Q'13 3Q'13 4Q'13 1Q'14 2Q'14 3Q'14 4Q'14 21

  22. Slide 22: Loan, deposit and capital growth

    $ 1150 950 750 550 350 150 (50) Loan Growth Deposit Growth Capital Growth 22 11/30/12 acquisition of Fidelity Bancorp.

  23. Slide 23: Non-interest income

    Gain Mort. Loan Sales Other Inc.  Non-interest income contributed Insurance Securities brokerage 26% of net revenue YTD 2014. Trust Service charges & Fees  Non-bank offerings (trust, ($MM) $68.6 insurance, securities) contributed $68.7 $60.4 $62.6 $30.7 million to YTD 2014 $60.2 revenue.  Securit

  24. Slide 24: Preparing for $10 billion Dodd-Frank threshold

     Preparing for $10 billion Dodd-Frank threshold.  Internal project management office (PMO).  Ensures projects effectiveness and overall timeliness.  Adherence to defined scope, resources, budget, and mitigation practices.  Project advisory and governance groups for management/board reporting. 

  25. Slide 25: Scalable technology infrastructure

     Scalable technology infrastructure permitting organic and acquisition related growth without significant additional investment.  Use technology to reduce travel cost and enhance communication alignment through video conferencing capabilities across expanding footprint.  Reduced communication cos

  26. Slide 26: Acquisition strategy and track record

     History of successful acquisitions which have provided improved earnings.  WesBanco is focused on targeted M & A opportunities in higher-growth metro areas.  Positive regulatory relationships represent a key success factor (Fidelity and ESB mergers completed within 3-4 months).  Adequate capita

  27. Slide 27: Why WesBanco is an attractive partner

     Currency valuation provides upside for seller’s shareholders.  Community bank look and feel.  Long-term focus on shareholder returns.  Our common stock has exceeded the S&P 500 performance over the last 38 years. 27

  28. Slide 28: ESB Transaction Highlights

    ESB Transaction Highlights Significantly expands presence in large attractive Pittsburgh market - top 10 player in Pittsburgh MSA(1)̵ Roughly 30% of pro forma WesBanco franchise in Pittsburgh/Western PA Builds on prior acquisition of Fidelity in Pittsburgh through greater penetration in market ̵ Com

  29. Slide 29: Franchise Comparison

    Franchise Comparison ($ in Millions) WesBanco, Inc. ESB Financial Corporation Assets $6,278 $1,945 Deposits $5,102 $1,337 Balance Sheet Loans / Deposits 79.1% 53.4% Tangible Common Equity $472 $165 Net Income $53.5 $13.6 Net Interest Margin 3.62% 2.80% Efficiency Ratio 59.3% 56.7% Operational Cost o

  30. Slide 30: Acquisition of ESB makes WSBC top 10 in Pittsburgh MSA

    Acquisition of ESB Makes WSBC Top 10 Player in Pittsburgh MSA WesBanco Deposit Market Share Over Time in the Pittsburgh MSA Deposits Market  Pittsburgh expansion key to WesBanco Rank Institution Branches ($MM) Share continued transformation 1 PNC Financial Services Group 152 49,740 50.6% 2 Royal Ba

  31. Slide 31: Marcellus/Utica Shale Play

    Marcellus/Utica Shale Play ($ in thousands) Fees Deposits $400 $350,000 $350 $300,000 $300 $250,000 $250 $200,000 $200 $150,000 $150 $100,000 $100 $50,000 $50 $0 $0 2010 2011 2012 2013 2014 Trust Fees Sec. Co. Fees Deposits 31

  32. Slide 32: Financial Information

    32 Financial Information By all accounts, better.

  33. Slide 33: Net interest margin, asset yield and cost of funds

    NIM Yield on Earning Assets Cost of Funds 4.27% 4.31% 4.13% 4.09% 4.20% 4.08% 4.06% 3.98% 3.96% 3.58% 3.63% 3.64% 3.58% 3.60% 3.50% 3.64% 3.56% 3.52% 0.93% 0.77% 0.81% 0.73% 0.56% 0.52% 0.51% 0.47% 0.63% 4Q'12 1Q'13 2Q'13 3Q'13 4Q'13 1Q'14 2Q'14 3Q'14 4Q'14 33

  34. Slide 34: Capital ratios

    Total Risk Based Capital Tangible Equity to Tangible Assets * 16.00% 14.40% 14.62% 14.81% 14.19% 14.56% 14.00% 12.00% 10.00% 7.35% 7.49% 7.74% 7.91% 7.88% 8.00% 6.00% 4.00% 2.00% 0.00% 4Q'13 1Q'14 2Q'14 3Q'14 4Q'14 *See non-GAAP financial measures for additional information relating to the calculati

  35. Slide 35: Securities portfolio

    Securities = $1.51 B  Average tax-equivalent ~24.0% of total assets portfolio yield of 3.27%. US Govt.  WAL approx. 4.4 years; Agencies modified duration 3.9%. 5.8%  Over 52% unpledged.  Net unrealized AFS Municipals, securities gains of $4.6 Agency 39.7% million at 12/31/14; total Mortgage- net

  36. Slide 36: Total loans and commercial real estate

    Total Loans = $4.1 B Comm. Real Estate = Comm. & $1.95 B Ind., 15.6% LHFS, 0.1% Const & Dev. 13.5% Consumer, 6.0% Comm. Investor- HELOC, Real owned 8.1% Estate, 62.1% 47.5% Res. Real Owner- Estate, 22.7% occupied 24.4% 36

  37. Slide 37: NPAs and criticized and classified loans

    10.0% 9.0% 8.0% 7.0% 6.0% 5.0% 4.0% 3.0% 2.0% 1.0% 0.0% 2Q'11 3Q'11 4Q'11 1Q'12 2Q'12 3Q'12 4Q'12 1Q'13 2Q'13 3Q'13 4Q'13 1Q'14 2Q'14 3Q'14 4Q'14 NPA's as a % of total Loans Criticized & Classified Loans as a % of total Loans 37

  38. Slide 38: Provision, ALL and non-performing loans

    2.00% $3,500 1.80% $3,000 1.60% $2,500 1.40% 1.20% $2,000 1.00% $1,500 0.80% 0.60% $1,000 0.40% $500 0.20% 0.00% $- 4Q'12 1Q'13 2Q'13 3Q'13 4Q'13 1Q'14 2Q'14 3Q'14 4Q'14 ($000) Provision for credit losses ALL as a % of total loans Non performing loans as a % of total loans 38

  39. Slide 39: Interest rate sensitivity

    % Change in Net Interest Income from Immediate Change in Base Over One Year Interest Rates December 31, 2014 December 31, 2013 Up 1% Rate Shock +1.9% +1.6% Up 2% Rate Shock +2.1% +1.7% Up 3% Rate Shock +0.9% +0.2% Up 2% Rate Ramp +1.9% +1.1% Down 1% Rate Shock -1.8% -2.0% EVE Up 2% Rate Shock * 6.0%

  40. Slide 40: Stock Price and Dividend Information

    40 Stock Price and Dividend Information

  41. Slide 41: Dividend payout ratio and yield

    December 2014 Dividend Payout Ratio = 36.82% as of 12/31/14 $0.25 $0.20 $0.15 $0.10 $0.05 $0.00 1Q'11 2Q'11 3Q'11 4Q'11 1Q'12 2Q'12 3Q'12 4Q'12 1Q'13 2Q'13 3Q'13 4Q'13 1Q'14 2Q'14 3Q'14 4Q'14 WesBanco dividend yield is 2.88% compared to SNL Banks 41 $5B-10B peer group of 2.30%.

  42. Slide 42: WSBC versus peers index analysis

    100-based Index Analysis: WSBC vs. Peers / ^BANK (5 years) IXBK Peers WSBC 280 260 240 220 200 180 160 140 120 100 80 60 40 20 42

  43. Slide 43: Investment highlights

     Strong regulatory capital.  Proven acquisition-oriented growth strategy.  Liquidity to fund additional lending capacity.  Asset quality compares favorably with regional and national peers.  Diversity of earnings stream.  Potential upside market appreciation due to lower than peer P/E ratio. 4

  44. Slide 44: Appendix

    44 Appendix wN By all accounts, better.

  45. Slide 45: Pro Forma Loan Composition

    Pro Forma Loan Composition WesBanco, Inc. ESB Financial Corp. Combined Construction Construction Construction Consumer 7% 5% Consumer 6% 5% 6% Other Other Other 5% 7% 5% C&I 2% Consumer 8% C&I C&I 9% 10% Commercial Real Estate Single Single 12% Family Family 38% 34% Multifamily Single Commercial 6%

  46. Slide 46: Pro Forma Deposit Composition

    Pro Forma Deposit Composition WesBanco, Inc. ESB Financial Corp. Combined Noninterest NOW & -bearing Other 2% 3% Jumbo Noninterest Jumbo 15% -bearing 17% Noninterest 20% Jumbo -bearing 22% 16% Retail Savings & NOW & 13% MMDAs Other NOW & Retail 45% 14% Other 16% 17% Savings & Retail MMDAs 28% Saving

  47. Slide 47: Efficiency ratio reconciliation – quarter

    ($ in thousands) 3 months 3 months ended ended 12/31/13 12/31/14 Non-interest expense $ 40,743 $ 41,972 Less: restructuring and merger related expense (45) (1,309) Non-interest expense excluding restructuring and merger $ 40,698 $ 40,663 related expense Net interest income (on a fully taxable equiva

  48. Slide 48: Efficiency ratio reconciliation – annual

    ($ in thousands) 2010 2011 2012 2013 2014 Non-interest expense $ 141,152 $ 140,295 $ 150,120 $ 160,998 $ 161,633 Less: restructuring and merger related expense (175) (3,888) (1,310) (1,309) Non-interest expense excluding restructuring and merger related expense 140,977 140,295 146,232 159,688 160,32

  49. Slide 49: Tangible equity to tangible assets – annual

    ($ in thousands) 2010 2011 2012 2013 2014 Total shareholder’s equity $ 606,863 $ 633,790 $ 714,184 $ 746,595 $ 788,190 Less: goodwill & other intangible assets, net of def. tax liabilities (281,534) (279,967) (320,399) (318,161) (316,914) Tangible equity $ 325,329 $ 353,823 $ 393,785 $ 428,434 $ 471

  50. Slide 50: Tangible equity to tangible assets – quarterly

    ($ in thousands) 4Q’13 1Q’14 2Q’14 3Q’14 4Q’14 Total shareholder’s equity $ 746,595 $ 761,117 $ 778,625 $ 788,784 $ 788,190 Less: goodwill & other intangible assets, net of def. tax liabilities (318,161) (317,840) (317,527) (317,217) (316,914) Tangible equity $ 428,434 $ 443,277 $ 461,098 $ 471,567

  51. Slide 51: Net operating non-interest income

    ($ in thousands) 2010 2011 2012 2013 2014 Non-interest income $ 59,599 $ 59,888 $ 64,775 $ 69,285 $ 68,504 Less: Net securities gains 3,362 963 2,463 684 903 Less: net gains/losses on other real estate owned and other assets (4,128) (1,290) (305) (81) (1,006) Net operating non-interest income $ 60,3

  52. Slide 52: Return on average tangible equity – quarter

    ($ in thousands) 12/31/13 QTD 12/31/14 QTD Net income $ 60,911 $ 65,510 Plus: amortization of intangibles* (tax effected at 35%) 1,408 1,202 Net income before amortization of intangibles* $ 62,319 $ 66,712 Average total shareholders’ equity $ 745,136 $ 801,579 Less: average goodwill & other intangib

  53. Slide 53: Return on average tangible equity – annual

    ($ in thousands) 2010 2011 2012 2013 2014 Net income $ 35,611 $ 43,809 $ 49,544 $ 63,925 $ 69,974 Plus: amortization of intangibles* (tax effected at 35%) 1,774 1,566 1,398 1,487 1,248 Net income before amortization of intangibles* 37,385 45,375 50,942 65,412 71,222 Average total shareholders’ equit

  54. Slide 54: WesBanco

    54 WesBanco By all accounts, better.

WesBanco — Sterne Agee Financial Services Conference 2015 on 6ix