Wesbanco, Inc. · NASDAQ:WSBC
Wesbanco — Q1 2012 Earnings Presentation
38 slides from Wesbanco's earnings presentation, Apr 26, 2012
Slide 1: WesBanco Investor Results March 31, 2012
WwW WesBanco By all accounts, better. Investor March 31, 2012 Results
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 herein should b
Slide 3: WesBanco company overview
Headquarters in Wheeling, West Virginia Assets: $5.6 billion Founded in 1870 32 banks/23 companies acquired in 25 years Banking operations in West Virginia, Ohio and Western Pennsylvania 112 banking offices + Pittsburgh Business Loan Office 121 ATM’s Non-bank activities include: We
Slide 4: An Expanding Franchise in Contiguous Markets
An Expanding Franchise in Contiguous Markets: 112 banking offices Ranked #1-3 in deposit market share in 15 counties out of 37* Columbus Springfield Wheeling Expanding along major highways to Dayton population centers (Columbus, Dayton, Cincinnati) Huntington Organized into seven markets * SNL
Slide 5: Experienced & Stable Management Team
Experienced & Stable Management Team Years in Years with Executive Position Banking WSBC James Gardill Chairman of the Board 39* 39 Paul Limbert President & CEO 34 34 Robert Young EVP & CFO 25 10 Peter Jaworski EVP & Chief Credit Officer 27 16 Jerome Schmitt EVP – Trust & Investments 39 39 Bernard T
Slide 6: Quarterly Performance Comparison
Quarterly Performance Comparison ($ in thousands, except diluted earnings per share)00’s except per share data) Mar 2012 Dec 2011 Sep 2011 Jun 2011 Mar 2011 Net Income $11,990 $10,637 $11,013 $11,918 $10,240 Diluted Earnings Per Share $ 0.45 $ 0.40 $ 0.41 $ 0.45 $ 0.39 Provision for Credit Losses $6
Slide 7: Return on Average Assets
Return on Average Assets 2.00% 1.80% 1.86% 1.60% 1.77% 1.72% 1.67% 1.68% 1.40% 1.20% 1.00% 0.80% 0.88% 0.87% 0.77% 0.80% 0.77% 0.60% 0.40% 0.20% 0.00% 1Q-11 2Q-11 3Q-11 4Q-11 1Q-12 ROAA: Pre-tax, Pre-provision ROAA: GAAP
Slide 8: Net Interest Margin & Efficiency Ratio
Net Interest Margin & Efficiency Ratio Net Interest Margin Efficiency Ratio 3.80% 70.00% 3.70% Net Interest Margin 68.00% Efficiency Ratio 3.60% 66.00% 3.50% 64.00% 3.40% 62.00% 3.30% 3.20% 60.00% 3.10% 58.00% 3.00% 56.00% 2Q'09 3Q'09 4Q'09 1Q'10 2Q'10 3Q'10 4Q'10 1Q'11 2Q'11 3Q'11 4Q'11 1Q'12
Slide 9: Summary – Capital Ratios %
Summary – Capital Ratios % Total Risk Based Capital Tangible Equity to Tangible Assets * 16.00% 13.61% 13.93% 14.14% 14.00% 13.48% 13.74% 12.00% 10.00% 8.00% 6.43% 6.59% 6.72% 6.68% 6.76% 6.00% 4.00% 2.00% 0.00% 1Q'11 2Q'11 3Q'11 4Q'11 1Q'12 *See non-GAAP measures for additional information relating
Slide 10: Recent Accomplishments
Recent Accomplishments Increased dividends to shareholders in 1Q’11, 3Q’11 and in 1Q’12 by 21.4% in total. Continued growth in earnings and improved credit quality. Continued reduction of expenses. Continued growth in deposits and strong loan origination focus. Maintained strong capital po
Slide 11: Targeted M&A
Targeted M&A History of successful consolidations. WesBanco is focused on targeted M & A opportunities in its higher growth metro markets within our market areas. Limited FDIC-assisted transactions expected, but plenty of moderately distressed banks and “tired” management teams, as well as hea
Slide 12: Wealth Management Services
Wealth Management Services $3.2B of assets under management/custody. Over 5,000 trust relationships. Combined Trust and Assets Under Management ($B) Brokerage under one Management Fees ($MM) Net Securities Brokerage Revenue ($MM) management team. $18.6* $17.2 10 locations in WV & OH $15.8 $1
Slide 13: Economic Benefits of WV
Economic Benefits of WV WV reported a surplus of revenue over expense for the latest fiscal year. State of WV recently implemented legislation to reduce Business Franchise and Corporate Net Income Taxes over several years. WV reports stable home prices over the past five years. WV reports 7.
Slide 14: WV and Ohio Marcellus/Utica Shale Opportunity
WSBC West Virginia and Ohio Marcellus/Utica Shale Opportunity Marcellus Shale Regional Coverage WV and OH Marcellus Shale Opportunity(1) HBAN UBSI BBT PNC JPM UCFC PEBO SMMF Farmers NBC 0.0% 4.0% 8.0% 12.0% 16.0% WesBanco (112 Branches) Deposit Market Share in WV and OH Marcellus Shale Counties Sour
Slide 15: Opportunities for Organic Growth
Opportunities for Organic Growth • Marcellus/Utica Shale Opportunity Land owners are finding new wealth. Large cash payments for drilling rights. Land owners need financial advice. Our products in the retail bank provide short-term solutions. Our products in the wealth management function pr
Slide 16: 2012 Initiatives
2012 Initiatives Raised dividend in 1st quarter 2012. 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. 16
Slide 17: 2012 Initiatives (cont.)
2012 Initiatives (cont.) Focus on organic loan growth, with an emphasis on business banking and C&I lending. Pursue opportunities for activities related to Marcellus and Utica shales. Continue to focus on wealth management and other fee-related opportunities. Monitor opportunities for select
Slide 18: Customer Service Initiatives
Customer Service Initiatives Expand technology for both product delivery and efficiency Iron key security software Cash dispenser machines Mobile banking Remote deposit capture Customer relationship management – CORE 18
Slide 19: Peer Group – Price / 2012 Estimated Earnings
Peer Group – Price / 2012 Estimated Earnings Price / 2012 Estimated Earnings (x) (1) Median (Excl. WSBC): 12.6x 16.0x 15.0x 14.8x 14.4x 14.0x 13.7x 13.5x 13.2x 13.0x 12.9x 12.6x 12.6x 12.4x 12.1x 12.0x 11.6x 11.3x 11.2x 11.0x 10.4x 10.0x 9.0x 8.0x 7.0x 6.0x UBSI FCF FNB FFBC National PRK ONB STBA CH
Slide 20: Peer Group – Price / 2013 Estimated Earnings
Peer Group – Price / 2013 Estimated Earnings Price / 2013 Estimated Earnings (x) (1) Median (Excl. WSBC): 11.5x 15.0x 14.4x 14.0x 13.0x 12.8x 12.4x 12.0x 11.9x 11.8x 11.6x 11.5x 11.5x 11.3x 11.2x 11.0x 11.0x 10.7x 10.2x 10.0x 9.5x 9.0x 8.0x 7.0x 6.0x (2) UBSI FFBC FNB National CHCO PRK STBA FCF ONB
Slide 21: Current Market Update
Current Market Update Market Performance – Cycle-to-Date 125.00% 100.00% 75.00% 50.00% 25.00% 0.00% 6/30/07 9/9/08 11/20/09 1/31/11 4/13/12 WesBanco, Inc. (-34.85%) KBW Bank Index (-58.22%) KBW Regional Banking Index (-42.06%) S&P 500 Index (-8.85%) Source: FactSet Research Systems 21
Slide 22: Current Market Update
Current Market Update Market Performance – Since January 1, 2010 200.00% 180.00% 160.00% 140.00% 120.00% 100.00% 80.00% 60.00% 1/1/10 7/28/10 2/21/11 9/16/11 4/13/12 WesBanco, Inc. (55.75%) KBW Bank Index (10.44%) KBW Regional Banking Index (18.75%) S&P 500 Index (22.88%) Source: FactSet Research Sy
Slide 23: Securities Portfolio – Quality & Liquidity
Securities Portfolio – Quality & Liquidity Securities = $1.67 B Average tax-equivalent ~29.7% of total assets portfolio yield of 3.33% US Govt. at 3/31/12. Agencies WAL approx. 4.1 years; 8.8% modified duration 3.3%. Agency Over 55% unpledged. Mortgage- Municipals, No significant private 32.
Slide 24: Diversified Loan Portfolio
Diversified Loan Portfolio 3/31/12 Total Portfolio Loans = $3.22 B Comm. Real Estate = Comm. & $1.68 B Ind., 12.7% LHFS, 0.3% Const & Dev. Consumer, 12% 7.7% Comm. Investor- HELOC, Real owned 7.8% Estate, 57% 51.8% Res. Real Owner- Estate, occupied 19.7% 31%
Slide 25: Non-Accrual & Restructured Loans
Non-Accrual & Restructured Loans ($ in thousands) $70,000 $60,000 $50,000 $40,000 $30,000 $20,000 $10,000 $0 1Q'11 2Q'11 3Q'11 4Q'11 1Q'12 Non-Accrual TDR's Accruing interest
Slide 26: Net Charge-Offs vs. Provision for Loan Losses
Net Charge-Offs vs. Provision for Loan Losses ($ in thousands) $20,000 $17,500 $15,000 $12,500 $10,000 $7,500 $5,000 $2,500 $0 4Q'09 1Q'10 2Q'10 3Q'10 4Q'10 1Q'11 2Q'11 3Q'11 4Q'11 1Q'12 Net Charge-Offs Provision for Loan Losses
Slide 27: Net Loan Charge-offs / Average Loans
Net Loan Charge-offs Average Loans WSBC National Peers* 1.78% 1.65% 1.37% 1.28% 1.30% 0.80% 1.10% 0.24% 0.58% 0.28% 2007 2008 2009 2010 2011 • National Peer Group = Average of 92 of 99 banks nationwide with assets between $2-$10 B. • Source: SNL Financial
Slide 28: NPA + ≥ 90 PD Loans / Total Loans + OREO
NPA + ≥ 90 PD Loans Total Loans + OREO WSBC National Peers* 5.16% 4.81% 4.36% 2.48% 3.40% 2.71% 2.93% 1.15% 1.60% 0.96% 2007 2008 2009 2010 2011 • National Peer Group = Average of 92 of 99 banks nationwide with assets between $2-$10 B. • Source: SNL Financial
Slide 29: Diversified Operating Non-interest Income
Diversified Operating Non-interest Income* Other Inc. Insurance Securities brokerage Trust Non-interest income contributed Service charges & Fees 27% of 2012 1Q net revenue. ($MM) Non-bank offerings (trust, $59.3 $60.4 $60.2 $61.1 $57.5 insurance, securities) contributed $6.5 million to 1Q 2012
Slide 30: Interest Rate Sensitivity
Interest Rate Sensitivity % Change in Net Interest Income from Immediate Change in Base Over One Year Interest Rates Mar. 31, 2012 Dec. 31, 2011 Up 1% Rate Shock +0.9% +1.7% Up 2% Rate Shock +0.7% +1.3% Up 2% Rate Ramp +1.1% +2.0% Down 1% Rate Shock -4.0% -3.5% EVE Up 2% Rate Ramp +11.6% +12.4% EVE
Slide 31: Investment highlights summary
Strong regulatory capital. Proven acquisition-oriented growth strategy. Liquidity to provide for additional lending capacity. Asset quality compares favorably with regional and national peers. Diversity of earnings stream.
Slide 32: Appendix: Loan Totals by Market
Appendix: Loan Totals by Market ($ millions) March 31, 2012 Commercial Retail Total % of Total Loans Upper Ohio Valley $ 455 $ 399 $ 854 26% North Central WV 250 189 439 14% Parkersburg 202 85 287 9% Kanawha Valley 59 47 106 3% Western PA 163 14 177 6% Total East Markets $ 1,129 $ 734 $ 1,863 58% Ce
Slide 33: Appendix: Credit Quality By Market
Appendix: Credit Quality By Market ($ thousands) March 31, 2012 90 Day PD Non- TDR Other RE Total by % of Total & Accruing Accrual Owned Region Upper Ohio Valley $ 793 $ 5,692 $ 4,038 $ 395 $10,918 13% North Central WV 385 766 1,132 122 2,405 3% Parkersburg 200 3,788 1,200 669 5,857 7% Kanawha Valle
Slide 34: Non-GAAP Financial Measures
Non-GAAP Financial Measures Tangible equity to tangible assets ($ in thousands) 1Q’11 2Q’11 3Q’11 4Q’11 1Q’12 Total shareholder’s equity $ 611,978 $ 623,037 $ 634,402 $ 633,790 $ 642,001 Less: goodwill & other intangible assets (284,941) (284,336) (283,737) (283,150) (282,612) Tangible equity $ 327,
Slide 35: Non-GAAP Financial Measures
Non-GAAP Financial Measures Operating non-interest income ($ in thousands) 2008 2009 2010 2011 2012* Non-interest Income $ 57,346 $ 64,589 $ 59,599 $ 59,888 $ 61,625 Less: Net Securities gains 1,556 6,046 3,362 963 402 Less: net gains/losses on other real estate owned and other assets (1,715) (747)
Slide 36: Non-GAAP Financial Measures
Non-GAAP Financial Measures Return on Average Tangible Equity ($ in thousands) 1Q’11 2Q’11 3Q’11 4Q’11 1Q’12 Net income (annualized) $ 41,531 $ 47,805 $ 43,694 $ 42,201 $ 48,224 Plus: amortization of intangibles (annualized) 1,629 1,577 1,545 1,516 1,405 Net income before amortization of intangibles
Slide 37: Non-GAAP Financial Measures
Non-GAAP Financial Measures ROAA: Pre-tax, Pre-provision ($ in thousands) 1Q’11 2Q’11 3Q’11 4Q’11 1Q’12 Income before provision for income taxes $12,448 $15,564 $13,057 $12,577 $15,285 Provision for credit losses 8,041 6,802 10,836 9,631 6,202 Taxable equivalent adjustment 1,608 1,640 1,625 1,647 1,
Slide 38: WesBanco
W WesBanco By all accounts, better.