Wesbanco, Inc. · NASDAQ:WSBC
Wesbanco — Investor Presentation (August 2024)
54 slides from Wesbanco's investor presentation, Aug 30, 2024
Slide 1: Investor Presentation (Q3 2024)
Investor Presentation (Q3 2024) (WSBC financials as of the three months ended June 30, 2024) John Iannone Senior Vice President, Investor Relations 304-905-7021 Note: update footnote copyright year annually
Slide 2: 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 information contained in this present
Slide 3: Additional Information about the Merger and Where to Find It
Additional Information about the Merger and Where to Find It In connection with the proposed merger, WesBanco will file with the SEC a Registration Statement on Form S-4 that will include a joint proxy statement of WesBanco and Premier and a prospectus of WesBanco, as well as other relevant document
Slide 4: Diversified business model with strong market presence
Strong and balanced market presence across diverse geographies that supports disciplined organic growth Granular core deposit funding base supports robust commercial and consumer business model Diversified revenue streams built upon unique long-term advantages Distinct long-term growth strategies bu
Slide 5: Investment Rationale
Balanced loan and deposit distribution across contiguous eight state footprint, with complementary loan production office strategy Full suite of commercial and consumer banking capabilities, complemented by a wealth management business with a 100+ year track-record of success managing assets of $5.6
Slide 6: Proposed Acquisition of Premier Financial Corp.
Proposed Acquisition of Premier Financial Corp. NOTE: slides in this section are directly from the presentation filed in conjunction with the acquisition announcement on July 26, 2024 – for additional information, please see the associated Form 8-K filing at https://investor.wesbanco.com/company-fin
Slide 7: Merger rationale
Increased Scale With ~$27B in assets, the combined organization will benefit from significant economies of scale Complementary geographic footprints in familiar markets Rise to #8 from #15 in Ohio deposit market share Boosted Performance 2025 EPS Accretion of 40%+ driven by cost synergies and margin
Slide 8: Similar cultures and complementary strengths
Similar cultures and complementary strengths Acquisition of Premier Financial Corp. (1) Commercial loans include C&I, C&D, Multifamily, NOO CRE, and OO CRE loans Note: Financial data as of June 30, 2024 Source: S&P Capital IQ Pro Long History Founded 1870 1920 Business Mix Loan Mix Strong Wealth Bus
Slide 9: Pro forma company profile
Pro forma company profile (1) TCE shown net of deferred tax liability; includes net proceeds from capital raise (2) Excludes one time deal charges, Non-PCD CECL Day-2 double count, and assumes fully phased in cost saves (3) Deposit market share data as of June 30, 2023; excludes National Consumer Co
Slide 10: Structure & Consideration
Structure & Consideration 100% stock consideration Fixed exchange ratio – 0.80 WSBC shares to be issued for each PFC share Pro forma ownership: 62% WSBC, 30% PFC, 8% new shareholders Transaction Value Deal value of $959 million, or $26.66 per PFC share(1) Pricing metrics include: 12.0x DV/2025E EPS,
Slide 11: Successful common equity raise
Successfully raised $200 million of common equity prior to the announcement of the Premier Financial Corp. acquisition in order to support the pro-forma bank’s balance sheet and regulatory ratios Equity raised from 10 institutional investors, with a blend of existing and new shareholders Anchor inve
Slide 12: Summary of due diligence
Summary of due diligence Acquisition of Premier Financial Corp. Credit Deposits & Borrowings Risk Management Human Resources Accounting & Tax Technology & Operations Commercial Banking Retail Banking Legal & Compliance Marketing & Branding Select Due Diligence Focus Areas Other Key Findings Both par
Slide 13: Key assumptions
Earnings Projections for WSBC and PFC based on consensus estimates through 2025; 5% growth thereafter Cost Savings ~26% of PFC’s NIE expense base ($41.4 million on a fully phased basis) 75% to be realized in 2025 and 100% to be realized thereafter Merger Expenses $71.6 million of pre-tax, non-capita
Slide 14: Impact summary
Impact summary Acquisition of Premier Financial Corp. (1) Excludes one time deal charges, Non-PCD CECL Day-2 double count, and assumes fully phased in cost saves. (2) Rate marks include interest rate mark on loans and write-down of trust preferred securities. (3) Excludes all impacts from CECL, incl
Slide 15: Positioned for upside market performance
Positioned for upside market performance Acquisition of Premier Financial Corp. Source: S&P Capital IQ Pro; FactSet // Note: 2025 figures for peers utilize consensus estimates as of 7/15/2024 prior to earnings releases (1) Pro forma ratios are estimated at deal closing and include purchase accountin
Slide 16: Enhanced profitability and capital generation
Enhanced profitability and capital generation Acquisition of Premier Financial Corp. Note: Peers defined as Mid-Atlantic, Midwest and Southeast major exchange-traded banks and thrifts with most recent quarter total assets between $20 billion and $40 billion, excluding merger targets, mutuals, and me
Slide 17: Capital adequacy
WesBanco 06/30/2024 Premier 06/30/2024 Pro- Forma(1) Tier 1 Leverage Ratio (Consolidated) 9.7% 10.3% 8.6% Tier 1 Common Ratio (Consolidated) 10.6% 11.9% 9.6% Tier 1 Risk-Based Capital (Consolidated) 11.6% 12.4% 10.3% Total Risk-Based Capital (Consolidated) 14.4% 14.3% 13.2% Tier 1 Leverage Ratio (Ba
Slide 18: Strategies for Long-Term Success
Strategies for Long-Term Success
Slide 19: Organic growth-oriented business model
Organic growth-oriented business model Long-Term Growth Strategies Focus on Delivering Positive Operating Leverage Strong Legacy of Credit, Capital, and Risk Management Diversified Loan Portfolio Built upon a Relationship Focused Model Distinct Revenue Capabilities, Led by 100+ Year Wealth Managemen
Slide 20: Diversified Loan Portfolio
Focus on strategic diversification, growth, and credit quality Balance disciplined loan origination with prudent underwriting standards Focus on relationship lending, especially for C&I Key offerings include loan swaps, treasury management, foreign exchange, cyber security, and lockbox services Stro
Slide 21: Distinct revenue capabilities: wealth management
Securities Brokerage $1.8B in account value 11,600+ accounts Securities investment sales Investment advisory services Licensed banker and regional player/coach programs Expansion opportunities in KY, IN, and Mid-Atlantic markets, as well as external business development opportunities Trust & Investm
Slide 22: New capabilities with long-term growth opportunities
New capabilities with long-term growth opportunities Treasury Management Focus on building comprehensive business customer relationships by providing individualized services to improve cash flow management, increase earning power, and strengthen fraud protection for clients Key Treasury Management s
Slide 23: Digital banking utilization
Digital banking utilization ~75% of retail customers utilize online digital banking services ~5.0 million web and mobile logins per month Mobile ~50% of total, with an average of 16 monthly logins per customer ~260,000 mobile wallet transactions, >40,000 Zelle® payments, and ~10,000 mobile deposits
Slide 24: Differentiated and peer-leading deposit profile
Differentiated and peer-leading deposit profile Note: quarterly financial data; peer bank group includes all U.S. banks with total assets of $10B to $25B from S&P Capital IQ (as of 8/21/2024) and represent simple averages; total deposits funding cost includes non-interest bearing deposits Core Depos
Slide 25: Franchise-Enhancing Expansion
Targeted acquisitions in existing markets and new higher-growth metro areas, as well as a complementary loan production office (“LPO”) strategy Long-term focus on appropriate capital management to enhance shareholder value Strong capital and liquidity, along with strong regulatory compliance process
Slide 26: Delivering Positive Operating Leverage
(1) Track-record of expense control with on-going enhancement efforts Note: financial data as of 12/31; current year data as of 6/30/2024 year-to-date; balance sheet data as of period ends (1) Non-GAAP measure – please see reconciliation in appendix; non-interest expense does not exclude restructuri
Slide 27: Strong legacy of credit and risk management and regulatory compliance
Strong legacy of credit and risk management and regulatory compliance Based upon conservative underwriting standards and approval processes supported by centralized back-office and loan funding functions Mature enterprise risk management program headed by Chief Risk Officer addressing key risks in a
Slide 28: Commitment to Sustainability
Ensuring a strong financial institution for all of our stakeholders Note: data as of 12/31/2023 except Board diversity (as of 4/17/2024) and financial center reduction (as of 12/31/2023 and compared to 12/31/2018); “CRA” is Community Reinvestment Act; “key senior executive leadership” defined as the
Slide 29: Awards and recognition
Newsweek named WesBanco one of America’s Greatest Workplaces, based on an employee survey covering topics like compensation and benefits, training and career progression, work-life balance, and company culture WesBanco also named one of America’s Greatest Workplaces for Parents and Families, by News
Slide 30: WesBanco Financial Overview
Ww . . . WesBanco Financial Overview ©2024 WesBanco, Inc. | All rights reservec d
Slide 31: Q2 2024 highlights
Continued strong loan growth both year-over-year and quarter-over-quarter Total loans up $1.1 billion year-over-year Deposits increased 4.4% year-over-year Non-interest income increased 2.4% quarter-over-quarter Continued efforts to optimize our financial center network to improve efficiencies Key c
Slide 32: Loan growth
+10.1% year-over-year and +3.2% (or +12.9% annualized) quarter-over-quarter Loan growth continues to demonstrate the strength of our markets and lending teams Loan production offices are contributing meaningfully to both commercial loan growth and loan pipeline, which was approximately $950 million,
Slide 33: Q2 2024 Net Interest Margin
NIM continues to reflect the higher rate environment and deposit remix Q2 2024 net interest margin of 2.95% reflects higher funding costs from the remix of non-interest bearing deposits into higher tier money market and certificate of deposit accounts, offset by loan growth and the benefit of rising
Slide 34: Q2 2024 Non-Interest Income
Non-interest income decreased 1.5% year-over-year primarily due to lower net swap fee and valuation income, as well as higher net gains on other real estate owned and other assets in the prior year period Gross swap fees were $1.8 million, compared to $2.4 million in the prior year Fair market valua
Slide 35: Q2 2024 Non-Interest Expense
Committed to discretionary expense management Q2 2024 Non-Interest Expense Non-interest expense increased year-over-year due to increases in equipment and software expenses and other operating expenses Equipment and software expense increased due to he impact of the prior year ATM upgrades, which we
Slide 36: Comparable operating measures to peer bank group
Comparable operating measures to peer bank group Note: historical data as of 12/31 YTD; current data as of 6/30/2024 YTD; peer bank group includes all U.S. banks with total assets of $10B to $25B from S&P Capital IQ (as of 8/21/2024 and represent simple averages; NIM (fully taxable-equivalent (FTE)
Slide 37: Favorable asset quality measures compared to peer bank group
Favorable asset quality measures compared to peer bank group Note: financial data as of quarter ending for dates specified; peer bank group includes all U.S. banks with total assets of $10B to $25B from S&P Capital IQ (as of 8/21/2024) and represent simple averages except criticized & classified loa
Slide 38: Returning value to shareholders
Returning value to shareholders Note: dividend through November 2023 declaration announcement; WSBC dividend yield based upon 8/1/2024 closing stock price of $30.55; peer bank group includes all U.S. banks with total assets of $10B to $25B (as of most recent period) from S&P Capital IQ (as of 8/21/2
Slide 39: WesBanco Appendix
Ww . WesBanco Appendix ©2024 WesBanco, Inc. | All rights reservec d
Slide 40: Q2 2024 Key Metrics
Q2 2024 Key Metrics Note: PTPP = pre-tax, pre-provision Non-GAAP measure – please see reconciliation in appendix Excludes restructuring and merger-related expenses
Slide 41: Q2 2024 Total Securities
Tangible common equity to tangible assets ratio improved 17 basis points year-over-year to 7.52% Weighted average yield 2.52% vs. 2.46% last year Weighted average duration 4.9 Total unrealized securities losses (after-tax): Available for Sale (“AFS”) = $242MM Held to Maturity (“HTM”) = $115MM Note:
Slide 42: Q2 2024 Net Interest Margin
NIM continues to reflect the higher rate environment and deposit remix Q2 2024 net interest margin of 2.95% reflects higher funding costs from the remix of non-interest bearing deposits into higher tier money market and certificate of deposit accounts, offset by loan growth and the benefit of rising
Slide 43: Q2 2024 Current Expected Credit Loss (CECL)
Allowance coverage ratio of 1.11% Note: ACL at 6/30/2024 excludes off-balance sheet credit exposures of $9.2 million The increase in the allowance was driven by strong loan growth, higher unemployment assumptions, and a reserve for an individual C&I loan During Q2 2024, recorded a provision for cred
Slide 44: Non-Interest Expense to Total Assets and Efficiency Ratio Reconciliation
Non-Interest Expense to Total Assets and Efficiency Ratio Reconciliation Note: “non-interest expense to total assets” are annualized by utilizing the actual numbers of days in the quarter versus the year; “efficiency ratio” is non-interest expense excluding restructuring and merger-related expense d
Slide 45: Pre-Tax, Pre-Provision Income (PTPP) and Ratios Reconciliation
Pre-Tax, Pre-Provision Income (PTPP) and Ratios Reconciliation
Slide 46: Net Income and Diluted EPS Reconciliation
Net Income and Diluted Earnings per Share (EPS) Reconciliation
Slide 47: Tangible Book Value per Share Reconciliation
Tangible Book Value per Share Reconciliation
Slide 48: Return on Average Assets Reconciliation
Return on Average Assets (1) Ratios are annualized by utilizing the actual numbers of days in the quarter versus the year Note: Current Expected Credit Losses (“CECL”) accounting standard adopted January 1, 2020 by WSBC; Old Line Bancshares merger closed November 2019 Reconciliation
Slide 49: Return on Average Tangible Equity Reconciliation
Return on Average Tangible Equity Reconciliation (1) Amortization of intangibles tax effected at 21% for all prior periods (2) Ratios are annualized by utilizing the actual numbers of days in the quarter versus the year Note: Current Expected Credit Losses (“CECL”) accounting standard adopted Januar
Slide 50: Appendix for Proposed Acquisition of Premier Financial Corp.
Appendix for Proposed Acquisition of Premier Financial Corp. NOTE: slides in this section are directly from the presentation filed in conjunction with the acquisition announcement on July 26, 2024 – for additional information, please see the associated Form 8-K filing at https://investor.wesbanco.co
Slide 51: Capital accretion post transaction
Capital accretion post transaction Appendix CET1 Capital Ratio (%) Leverage Ratio (%) Total Risk-Based Capital (%) Tier 1 Risk-Based Capital Ratio (%) Note: Pro-forma capital ratios inclusive of MTM adjustments and ~$191mm of net proceeds from capital raise down-streamed to the bank Consolidated Ban
Slide 52: Illustrative pro forma earnings accretion reconciliation
Illustrative pro forma earnings accretion reconciliation Illustrative Fully Phased-In EPS Accretion Appendix Excludes one time deal charges, Non-PCD CECL Day-2 double count, and assumes fully phased in cost saves. (2) FMV adjustments include accretion of PFC’s AOCI at closing, net loan mark accretio
Slide 53: Tangible book value dilution reconciliation
Tangible book value dilution reconciliation Appendix Estimated Tangible Book Value Dilution Detail Calculation of Estimated Intangibles Created Net proceeds based on a $200mm capital raise (gross) in 2024Q3, utilizing an issuance price of $27.50/share Restructuring cost includes the RSU acceleration
Slide 54: Non-GAAP reconciliations
Non-GAAP reconciliations Appendix WSBC Tangible Book Value PFC Tangible Book Value PFC Tangible Common Equity / Tangible Assets PFC Tangible Book Value per Share Note: Based on June 30, 2024 financials; DTL represents 21% of other intangibles (excluding goodwill) balance