Wesbanco, Inc. · NASDAQ:WSBC
Wesbanco — Sterne Agee Financial Institutions Investor Conference 2011
43 slides from Wesbanco's conference presentation, Feb 16, 2011
Slide 1: Sterne Agee Financial Institutions Investor Conference
Sterne Agee Financial Institutions Investor Conference February 17 & 18, 2011 Orlando, FL
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 112 banking offices + Pittsburgh Business Loan Office 132 ATM‟s • Non-bank act
Slide 4: An Expanding Franchise in Contiguous Markets
An Expanding Franchise in Contiguous Markets: 112 banking offices • Ranked #1-3 in deposit market share in 15 counties out of 37* Springfield Columbus Wheeling • Expanding along major highways to Dayton population centers (Columbus, Dayton, Huntington Cincinnati) • Organized into seven markets * SNL
Slide 5: Summary Balance Sheet
WesBanco, Inc. Summary Balance Sheet Dollars in millions December 31, Percentage 2006 2007 2008 2009 2010 Change Assets Investments $ 737 $ 937 $ 936 $ 1,263 $1,426 93.5% Net Loans 2,876 3,682 3,555 3,410 3,228 12.2% Other Assets 485 765 731 724 707 45.8% Total Assets $ 4,098 $ 5,384 $ 5,222 $ 5,397
Slide 6: Summary Income Statement
WesBanco, Inc. Summary Income Statement Dollars in Thousands, except EPS For the years ended December 31, 2006 2007 2008 2009 2010 Net Interest Income $122,833 $119,313 $160,537 $ 158,372 $166,092 Provision for Loan Losses 8,739 8,516 32,649 50,372 44,578 Other Income 40,408 52,939 57,346 64,589 59,
Slide 7: Performance Comparison
Performance Comparison For the year Ended – December 31, 2010 Year Year ended ended ($000’s except per share data) 12/31/10 12/31/09 %∆ Net Income Available to Common $35,611 $18,700 +90.43% Shareholders Diluted Earnings Per Share $1.34 $0.70 +91.43% Provision for Credit Losses $44,578 $50,372 -11.5
Slide 8: Quarterly Performance Comparison
Quarterly Performance Comparison %∆ %∆ %∆ %∆ %∆ 4Q-10 3Q-10 2Q-10 1Q-10 4Q-09 vs. 3Q- vs. 2Q- vs. 1Q- vs. 4Q- vs. 3Q- ($000’s except per share data) 10 10 10 09 09 Net Income Available to +12.6% +11.1% + 4.2% + 8.4% +214.4% Common Shareholders Diluted Earnings Per Share +14.7% + 9.7% + 3.3% + 11.1%
Slide 9: Return on Average Assets
Return on Average Assets 1.80% 1.60% 1.67% 1.67% 1.71% 1.63% 1.59% 1.64% 1.40% 1.20% 1.00% 0.80% 0.60% 0.76% 0.61% 0.67% 0.53% 0.59% 0.40% 0.38% 0.20% 0.00% 3Q-09 4Q-09 1Q-10 2Q-10 3Q-10 4Q-10 ROAA: Pre-tax, Pre-provision, Pre-TARP ROAA: GAAP
Slide 10: Recent Accomplishments
Recent Accomplishments • Purchased five branches with $600 million in deposits using existing capital resources. • Continued growth in earnings per share in each of the past 5 quarters. • Remained profitable each quarter throughout recession. • Paid back $75 million in TARP without common raise. • M
Slide 11: 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 CAGR = 11.8% metro markets and $5.0 enhancing market share. $4.0 • Five acquisitions in seven years – assets more than $3.0 doubled since 2001. $2.0 • A history of successful $1.0 consolidations.
Slide 12: Targeted M&A
Targeted M&A • WesBanco is focused on targeted M & A opportunities in market area. • Limited FDIC-assisted transactions expected, but plenty of moderately distressed banks and “tired” management teams. • Management, technology/back office and capital/liquidity strength to compete for deals of intere
Slide 13: Wealth Management Services
Wealth Management Services • $2.9B of assets under management/custody. • Over 5,000 trust relationships. • 4 locations in WV & OH • Improving performance as Assets Under Management ($B) asset values have grown. Management Fees ($MM) • Product capabilities: $15.0 $16.2 $14.9 $15.8 Trust $13.7 Inv
Slide 14: Marcellus Shale Play
Marcellus Shale Play • Area five times as large as Barnett Shale – primarily in WV & PA, parts of NY & OH. • PSU study suggests 200k jobs created by Marcellus drilling activity by 2020. • Total estimated economic activity by 2020 - $19 B. • Portion relating to WV - $3 B. • WSBC in 10 out of 32 count
Slide 15: 2011 Business Initiatives
2011 Business Initiatives • Actively remix the balance sheet – loans & deposits - to improve I/R sensitivity, regulatory capital and profitability. • Continuing efforts to address credit quality and impaired loan levels as economy improves. • Focus on organic loan growth, with an emphasis on busines
Slide 16: Financial Review
Financial Review
Slide 17: Summary – Capital Ratios %
Summary – Capital Ratios % *See non-GAAP measures for additional information relating to the calculation of this item.
Slide 18: Significant Liquidity
Significant Liquidity • Loan-to-deposit ratio at 79% at 12/31/10, allowing for plenty of loan growth. • Reduced reliance on wholesale funding (borrowings and brokered CDs); < 15% of total assets. • Securities portfolio of $1.4B highly liquid; 55% unpledged and $7.8 MM in net unrealized gains on AFS
Slide 19: Securities Portfolio – Quality & Liquidity
Securities Portfolio – Quality & Liquidity Securities = $1.43 B • Average portfolio yield of 3.92% at 12/31/10. ~26.6% of total assets • WAL approx. 4.4 years. US Govt. • Over 55% unpledged. Agencies • Minimal private label CMO‟s, 25.5% equities or corporate/ABS Mortgage- securities. Backed & CMOs,
Slide 20: Municipal Bond Portfolio Characteristics
Municipal Bond Portfolio Characteristics • Portfolio comprised of $470 million of tax exempts and taxable Build America Bonds. • Approximately 88% are local issuers. • G.O.‟s are 74% of total; 26% revenue bonds. • 96% rated, with 76% rated AA (or its equivalent) or higher. Only 8.2% below A – all ar
Slide 21: Diversified Loan Portfolio
Diversified Loan Portfolio Total Portfolio Loans = $3.29 B Comm. Real Estate = Comm. & Ind. $1.76 B 13% Const & Dev. Consumer 9% 8% Comm. Real Estate, 53% HELOC, 8% Investor- Owner- Owned Occupied 57% 34% Res. Real Estate, 18%
Slide 22: Non-Accrual & Restructured Loans
Non-Accrual & Restructured Loans $80,000 $68,439 $70,000 $65,273 $65,083 $60,000 $53,578 $48,820 $50,000 $47,483 $40,000 $30,000 $35,532 $29,188 $29,472 $20,000 $10,000 $14,988 $0 4Q'09 1Q'10 2Q'10 3Q'10 4Q'10 Non-Accruals Restructureds
Slide 23: Annualized Net Charge-offs / Average Loans
Annualized Net Charge-offs / Average Loans WSBC National Peers* 2.27% 1.99% 2.09% 1.92% 1.75% 2.09% 1.65% 1.66% 1.58% 1.59% 1.42% 1.00% 0.83% 0.80% 0.57% 0.68% 1Q'09 2Q'09 3Q'09 4Q'09 1Q'10 2Q'10 3Q'10 4Q'10 • National Peer Group = Average of 97 banks nationwide (91 of 97 for 4Q „10) ) with assets b
Slide 24: NPA + ≥ 90 PD Loans / Total Loans + OREO
NPA + ≥ 90 PD Loans / Total Loans + OREO WSBC National Peers* 5.77% 5.66% 5.43% 5.43% 5.14% 4.50% 3.89% 3.38% 3.40% 3.21% 2.67% 2.81% 3.10% 3.16% 2.70% 2.21% 1Q'09 2Q'09 3Q'09 4Q'09 1Q'10 2Q'10 3Q'10 4Q'10 • National Peer Group = Average of 97 banks nationwide (44 of 97 for 4Q „10) with assets betwe
Slide 25: Conservative Exposure to Potential Problem Loan Areas
Conservative Exposure to Potential Problem Loan Areas WSBC is Below Regulatory CRE Guidelines Exposure1 % of Regulatory ($Millions) RBC2 Guideline Land, Construction & Development $209 47% 100% Investor-Owned Commercial $680 153% N/A Investor-Owned Multi-Family $210 47% N/A Total Land, C&D, and Inve
Slide 26: Net Interest Margin
Net Interest Margin NIM Yield on Earning Assets Cost of Funds 7.00% 6.00% 5.28% 5.26% 5.10% 4.98% 4.94% 5.00% 4.00% 3.46% 3.57% 3.56% 3.61% 3.66% 3.00% 2.05% 1.91% 2.00% 1.74% 1.56% 1.48% 1.00% 0.00% 4Q'09 1Q'10 2Q'10 3Q'10 4Q'10
Slide 27: Net Interest Margin & Efficiency Ratio
Net Interest Margin & Efficiency Ratio Net Interest Margin Efficiency Ratio 3.70% 69.50% Net Interest Margin 3.60% Efficiency Ratio 68.00% 3.50% 66.50% 3.40% 65.00% 3.30% 63.50% 3.20% 62.00% 3.10% 60.50% 3.00% 59.00% 2Q'09 3Q'09 4Q'09 1Q'10 2Q'10 3Q'10 4Q'10
Slide 28: Diversified Noninterest Income
Diversified Noninterest Income Service charges & Fees Trust Securities brokerage Insurance ($MM) Other Inc. • Noninterest income contributes 26% of 2010 YTD $65.0 $60.0 revenue. $52.9 $57.3 • Non-bank offerings (trust, insurance, securities) $40.4 contribute $22.8 million in 2010 revenue. • Trust fe
Slide 29: Interest Rate Sensitivity
Interest Rate Sensitivity % Change in Net Interest Income from Immediate Change in Base Over One Year Interest Rates Nov. 30, 2010 Dec. 31, 2009 Up 1% Rate Shock +2.0% -0.4% Up 2% Rate Shock +1.0% -4.7% Up 2% Rate Ramp +1.9% +0.9% Down 1% Rate Shock -3.2% -0.8%
Slide 30: Peer Group – Price / Tangible Book
Peer Group – Price / Tangible Book Price / Tangible Book (x) 2.56 Redeemed TARP / Did not Receive 2.50 2.31 2.11 Still Has TARP 2.10 Recent Common Equity Raise* 2.00 1.80 1.66 1.62 Median (Excl. WSBC): 1.56x 1.56 1.46 1.50 1.15 1.12 1.05 1.05 1.00 1.00 0.50 0.00 UBSI FNB STBA CHCO PRK WSBC CTBI FFBC
Slide 31: Peer Group – Price / 2012 Estimated Earnings
Peer Group – Price / 2012 Estimated Earnings Price / 2012E Earnings (x) (1) 16.0x Median (Excl. WSBC): 15.2x 15.0x 12.8x 14.0x 13.6x Median (Excl. WSBC): 13.4x 13.0x 13.1x 13.0x 10.0x 12.8x 12.8x 12.4x 12.1x 12.3x 11.9x 12.0x 12.0x 11.8x 11.0x 10.2x 10.0x 9.0x 8.0x 7.0x 6.0x MSFG STBA PRK FRME WSBC
Slide 32: Current Market Update
Current Market Update Market Performance – Cycle-to-Date 125.0% 100.0% 75.0% 50.0% 25.0% 0.0% 6/30/2007 5/23/2008 4/20/2009 3/16/2010 2/9/2011 WesBanco, Inc. (-32.07%) KBW Regional Banking Index (-41.28%) KBW Bank Index (-51.01%) S&P 500 Index (-11.89%) Source: FactSet Research Systems 32
Slide 33: Current Market Update
Current Market Update Market Performance – 2010 170.0% 160.0% 150.0% 140.0% 130.0% 120.0% 110.0% 100.0% 90.0% 80.0% 12/31/2009 4/2/2010 7/2/2010 10/1/2010 1/3/2011 WesBanco, Inc. (53.65%) KBW Regional Banking Index (18.22%) KBW Bank Index (22.24%) S&P 500 Index (12.78%) Source: FactSet Research Syst
Slide 34: Research Analyst Coverage
Research Analyst Coverage 2011 EPS 2012 EPS Investment Bank Current Rating Estimate Estimate Sterne Agee Neutral $1.45 $1.60 Stifel Nicolaus Hold $1.42 $1.70 Macquarie Neutral $1.50 $1.96 Boenning & Scattergood Neutral / Moderate $1.47 $1.70 Janney Capital Markets Neutral $1.45 $1.50 Rodman & Rensha
Slide 35: Investment Rationale
Investment Rationale Stability, Diversity and Capital Strength • Strong regulatory capital. • Proven acquisition-oriented growth strategy. • Excellent liquidity. • Asset quality compares favorably with peers. • Diverse earnings stream. • Positioned for rising rates. • Potential for improved stock pr
Slide 36: Appendix: Loan Totals by Market
Appendix: Loan Totals by Market ($ millions) Commercial Retail Total Loans Upper Ohio Valley $ 455 $ 389 $ 844 North Central WV 235 175 409 Parkersburg 196 84 280 Kanawha Valley 62 34 97 Western PA 194 15 209 Total East Markets $ 1,142 $ 697 $ 1,839 Central Ohio 530 139 670 Southwest Ohio 350 154 50
Slide 37: Appendix: Credit Quality By Market
Appendix: Credit Quality By Market ($ thousands) 90 Day PD Non- Reneg. Other RE & Accruing Accrual Loans Owned Upper Ohio Valley $ 1,190 $ 6,916 $ 5,538 $ 2,581 North Central WV 794 432 615 393 Parkersburg 946 3,297 763 222 Kanawha Valley 137 2,765 N/A 294 Western PA 461 1,825 250 275 Total East Mar
Slide 38: Non-GAAP Financial Measures
Non-GAAP Financial Measures Tangible equity to tangible assets 3Q’09 4Q’09 1Q’10 2Q’10 3Q’10 4Q’10 Total shareholder‟s equity $ 592,335 $ 588,716 $ 596,473 $ 604,714 $ 608,287 $ 606,863 Less: goodwill & other intangible assets (289,087) (288,292) (287,593) (286,908) (286,228) (285,559) Tangible equi
Slide 39: Non-GAAP Financial Measures
Non-GAAP Financial Measures Return on Average Tangible Equity YTD 12/31/10 YTD 12/31/09 Net income $ 35,611 $ 23,933 Plus :amortization of intangibles 1,774 2,022 Net income before amortization of intangibles 37,385 25,955 Average total shareholder‟s equity 605,742 641,537 Less: average goodwill & o
Slide 40: Non-GAAP Financial Measures
Non-GAAP Financial Measures Return on Average Tangible Equity 1Q’09 2Q’09 3Q’09 4Q’09 Net income (annualized) $ 22,099 $ 23,039 $ 21,591 $ 28,949 Plus :amortization of intangibles (annualized) 1,839 2,116 2,079 2,050 Net income before amortization of intangibles (annualized) 23,938 25,155 23,670 30,
Slide 41: Non-GAAP Financial Measures
Non-GAAP Financial Measures Return on Average Tangible Equity 1Q’10 2Q’10 3Q’10 4Q’10 Net income (annualized) $ 32,081 $ 33,043 $ 36,313 $ 40,903 Plus :amortization of intangibles (annualized) 1,842 1,787 1,743 1,724 Net income before amortization of intangibles (annualized) 33,923 34,830 38,056 42,
Slide 42: Non-GAAP Financial Measures
Non-GAAP Financial Measures ROAA: Pre-tax, Pre-provision, Pre-TARP 3Q’09 4Q’09 1Q’10 2Q’10 3Q’10 4Q’10 Income before provision for income taxes $ 5,079 $ 5,915 $ 8,780 $ 9,491 $ 9,503 $12,187 Provision for credit losses 16,200 14,353 11,500 11,675 11,778 9,625 Taxable equivalent adjustment 1,936 1,7
Slide 43: WesBanco
WesBanco
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