Wesbanco, Inc. · NASDAQ:WSBC
Wesbanco — Investor Presentation (August 2018)
35 slides from Wesbanco's investor presentation, Aug 10, 2018
Slide 1: Investor Presentation (Q3 2018)
Investor Presentation (Q3 2018) (WSBC financials as of Q2 2018) John Iannone Vice President, Investor Relations 304-905-7021
Slide 2: Forward-Looking Statements
Forward-Looking Statements Forward-looking statements in this report relating to WesBanco’s (“WSBC”) 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 informa
Slide 3: Key Differentiators
Key Differentiators WesBanco [noun] \wes-baŋ-co\ – an emerging regional financial services institution, with a community bank at its core, focused on enhancing shareholder value Balanced loan and deposit distribution across footprint Balanced and Diversified earnings streams built for long-ter
Slide 4: 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 Strong Marke
Slide 5: 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 eff
Slide 6: Strategies for Long-Term Success
Strategies for Long-Term Success
Slide 7: Long-Term Growth Strategies
Long-Term Growth Strategies Diversified Retail Loan Franchise- Long History Banking Portfolio Enhancing of Strong Service with C&I Expansion Wealth Strategies and Home within Management & Core Equity Contiguous Capabilities Deposit Lending Markets Advantage Focus Focus on Delivering Positive Operati
Slide 8: Diversified Loan Portfolio
Diversified Loan Portfolio Focus on strategic growth, $6.8 Billion Loan Portfolio diversification, and credit quality Comm'l & Expansion of Commercial and Industrial 19% Comm'l Industrial (C&I), HELOC, and R/E: Residential Mortgage portfolios Improved Property Consumer Targeted reductions in c
Slide 9: Strong Wealth Management Capabilities
Strong Wealth Management Capabilities Trust & Investments Insurance Trust Assets $4.0B of trust and mutual fund (Market Value as of 12/31) ($B) Personal, commercial, title, assets under management $3.7 $4.0 health, and life $3.1 CAGR 5,000+ relationships $2.3 4% Expand title business in all
Slide 10: Franchise Expansion
Franchise Expansion Targeted acquisitions in existing Contiguous Markets Radius 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 qu
Slide 11: Positive Operating Leverage
Positive Operating Leverage History of successful franchise-enhancing acquisitions and disciplined growth, balanced by a fundamental focus on expense management, in order to deliver positive operating leverage and enhance shareholder value ESB Assets Merger YCB up 103% Fidelity (Feb-15) Merger FTS
Slide 12: 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 Q2 2018 dividend payout ratio of 36.3% provides upside potential Q2 2018 dividend yield 2.3%, compared to
Slide 13: Financial Overview
WesBanco By all accounts, better. Financial Overview
Slide 14: Financial Performance Summary (Non-GAAP)
Financial Performance Summary (Non-GAAP) Three Months Ending Six Months Ending ($000s, except earnings per share) 6/30/2017 6/30/2018 Change 6/30/2017 6/30/2018 Change (1) $37,445 $71,167 Net Income $26,341 42.2% $52,547 35.4% Diluted Earnings per Share (1) $0.60 $0.80 33.3% $1.19 $1.57 31.9% Net Ch
Slide 15: Financial and Operational Highlights – Q2 2018
Financial and Operational Highlights – Q2 2018 Strong year-over-year growth in both pre-tax and after-tax earnings supported by solid expense management Pre-tax, pre-provision income increased 24.1% to $47.6 million (excl. certain costs) Net income up 42.2% and EPS up 33.3% to $0.80 (excluding
Slide 16: Net Interest Margin (NIM)
Net Interest Margin (NIM) NIM continues to reflect the benefit to asset yields from the increases in the Federal Reserve Board’s target federal funds rate over the past year, offset by higher funding costs and a flattening of the yield curve YTD total interest bearing deposit funding costs, whic
Slide 17: Benefits of Core Funding Advantage
Benefits of Core Funding Advantage Robust legacy deposit base, enhanced by shale energy-related royalties Land owner royalties from energy companies are decades-long contracts These royalties have averaged low 8-figure monthly deposit in-flows for WesBanco, and have helped control total deposi
Slide 18: Risk Management and Regulatory Compliance
Risk Management and Regulatory Compliance Strong legacy of credit and risk management Based upon conservative underwriting standards Mature enterprise risk management program headed by Chief Risk Officer addressing key risks in all business lines and functional areas Enhancing strong complia
Slide 19: Favorable Operating Metrics
Favorable Operating Metrics Disciplined execution upon growth strategies providing favorable performance versus peer group across key operating metrics Return on Average Tangible Equity Return on Average Assets 17.5% 1.37% 17.0% 1.08% 1.07% 1.09% 1.32% 14.6% 14.0% 13.9% 1.06% 1.04% 1.07% 13.5% 13.
Slide 20: Appendix
WesBanco By all accounts, better. Appendix
Slide 21: Stock Performance: Long-Term Cumulative Return
Stock Performance: Long-Term Cumulative Return 700% 600% 500% 400% 300% 200% 100% 0% WSBC S&P500 Note: cumulative return since WSBC IPO compared to the cumulative return for the S&P500 Index over the same time period 20
Slide 22: Long-Term Funding and Growth Advantages
Long-Term Funding and Growth Advantages Shale Formations & Infrastructure Marcellus Shale region Utica Shale region Shell cracker plant ? proposed cracker plant Pittsburgh proposed Appalachia storage #10 Mkt Share Columbus Columbus #12 Mkt Share ? Dayton Morgantown Cincinnati W. Virginia #2 Mkt Shar
Slide 23: Interest Rate Sensitivity
Interest Rate Sensitivity Positioned for asset sensitivity in a rising interest rate environment Change in Net Interest Income Immediate Change in from Base over One Year Interest Rates December 31, 2017 June 30, 2018 +1% Rate Shock +2.4% +2.2% +2% Rate Shock +4.0% +4.0% +3% Rate Shock +6.2% +6.0%
Slide 24: Experienced and Stable Management Team
Experienced and Stable Management Team Years in Years at Executive Position Banking WSBC James Gardill Chairman of the Board 45* 45 Todd Clossin President & Chief Executive Officer 34 5 Robert Young EVP – Chief Financial Officer 32 17 Ivan Burdine EVP – Chief Credit Officer 38 5 Jonathan Dargusch EV
Slide 25: Farmers Capital (FFKT) Transaction Highlights
Farmers Capital (FFKT) Transaction Highlights Strategically compelling Kentucky combination Increases WSBC’s presence in major metropolitan markets with attractive demographics Increases combined deposit market share in Cincinnati (#14), Louisville, (#9), Lexington (#9) Continued and Elizabeth
Slide 26: Strong Market Positions in Major Markets
Strong Market Positions in Major Markets WesBanco (Current) WesBanco (Pro Forma) Akron Akron Canton Canton #10 #10 Wheeling Wheeling #15 Columbus #15 Columbus Dayton #12 Dayton #12 Morgantown Morgantown #18 Cincinnati #14 Cincinnati Bloomington Bloomington #2 #2 #10 #9 Charleston Charleston Louisvil
Slide 27: Broad and Balanced Market Distribution
Broad and Balanced Market Distribution WesBanco (Current) WesBanco (Pro Forma) Loans Loans KY IN 7% KY 6% 19% WV WV 29% PA IN 19% 33% 5% PA 16% OH OH 35% 30% Deposits Deposits KY IN 8% KY 6% 22% WV WV 33% PA 39% IN 20% 5% PA 17% OH OH 27% 23% Note: loan & deposit data as of 6/30/2018; “WesBanco (Cur
Slide 28: Financial Performance Summary Trend – Annual
Financial Performance Summary Trend – Annual Net Income (1) ($MM) Efficiency Ratio (1) $107.9 60.99% 59.59% $95.3 57.05% 56.69% 56.44% $88.0 $70.8 $64.8 2013 2014 2015 2016 2017 2013 2014 2015 2016 2017 Return on Average Assets (1) Return on Average Tangible Equity (1) 1.13% 1.08% 1.09% 1.06% 1.07%
Slide 29: Diligent Focus on Credit Quality – Annual Trend
Diligent Focus on Credit Quality – Annual Trend Loan loss allowance decline due to improvement in credit quality Net Charge-Offs as % of Average Loans Legacy Loan Loss Allowance and Total Loans 0.38% Legacy Loan Loss Allowance ($000s) $46,786 $44,154 $41,709 $41,108 $42,218 0.23% 0.23% 2013 2014 2
Slide 30: Commercial Loan Outstanding Detail – Year-End
Commercial Loan Outstanding Detail – Year-End Commercial Real Estate by Property Type ($MM) 12/31/2017 12/31/2014 Land & Improved Owner Total % of Total Land & Improved Owner Total % of Total Construction Investment Occupied CRE CRE Loans Construction Investment Occupied CRE CRE Loans Multi-Family $
Slide 31: Reconciliation: Efficiency Ratio & Operating Leverage
Reconciliation: Efficiency Ratio & Operating Leverage Three Months Ending Six Months Ending Twelve Months Ending ($000s) 6/30/2017 6/30/2018 6/30/2017 6/30/2018 12/31/2009 12/31/2010 12/31/2011 12/31/2012 12/31/2013 12/31/2014 12/31/2015 12/31/2016 12/31/2017 Non-Interest Expense $55,884 $63,543 $11
Slide 32: Reconciliation: Net Income and EPS (Diluted)
Reconciliation: Net Income and EPS (Diluted) Three Months Ending Six Months Ending Twelve Months Ending ($000s, except earnings per share) 6/30/2017 6/30/2018 6/30/2017 6/30/2018 12/31/2013 12/31/2014 12/31/2015 12/31/2016 12/31/2017 Net Income $26,341 $33,169 $52,228 $66,698 $63,925 $69,974 $80,762
Slide 33: Reconciliation: Return on Average Assets
Reconciliation: Return on Average Assets Three Months Ending Six Months Ending Twelve Months Ending ($000s) 6/30/2017 6/30/2018 6/30/2017 6/30/2018 12/31/2013 12/31/2014 12/31/2015 12/31/2016 12/31/2017 Net Income (1) $105,653 $133,039 $105,322 $134,501 $63,925 $69,974 $80,762 $86,635 $94,482 Net De
Slide 34: Reconciliation: Return on Average Tangible Equity
Reconciliation: Return on Average Tangible Equity Three Months Ending Six Months Ending Twelve Months Ending ($000s) 6/30/2017 6/30/2018 6/30/2017 6/30/2018 12/31/2013 12/31/2014 12/31/2015 12/31/2016 12/31/2017 Net Income (1) $105,653 $133,039 $105,322 $134,501 $63,925 $69,974 $80,762 $86,635 $94,4
Slide 35: Reconciliation: Legacy Loan Loss Allowance and Total Loans
Reconciliation: Legacy Loan Loss Allowance and Total Loans Twelve Months Ending ($000s) 12/31/2013 12/31/2014 12/31/2015 12/31/2016 12/31/2017 Loan Loss Allowance $47,368 $44,654 $41,710 $43,674 $45,284 Allowance on Acquired Loans ($582) ($500) ($1) ($2,566) ($3,066) Legacy Loan Loss Allowance $46,7