Wesbanco, Inc. · NASDAQ:WSBC
Wesbanco — 2013 FBR Fall Investor Conference
45 slides from Wesbanco's conference presentation, Dec 2, 2013
Slide 1: 2013 FBR Fall Investor Conference
2013 FBR Fall Investor Conference New York, NY December 3, 2013
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
Slide 3: WesBanco company overview
Headquarters in Wheeling, West Virginia Assets: $6.1 billion Founded in 1870 33 banks/24 companies acquired in 25 years Banking operations in West Virginia, Ohio and Western Pennsylvania 118 banking offices + Pittsburgh Business Loan Production Center 104 ATM’s Wealth management, sec
Slide 4: Executive management team
Years in Years with Executive Position Banking WSBC James Gardill Chairman of the Board 41* 41 Paul Limbert President & CEO 36 36 Todd Clossin EVP & COO 29 N/A Robert Young EVP & CFO 27 12 Peter Jaworski EVP & Chief Credit Officer 29 18 Jonathan Dargusch EVP – Trust & Investments 32 3 Bernard Twigg
Slide 5: Per Share Growth vs. Peers
Per Share Growth vs. Peers 5-Year Compound Annual Growth Rate (%) LTM Net Interest Income / Share (%) LTM Non-Interest Income / Share (%) 2.0% 2.0% 1.6% 1.4% 1.5% 1.3% 1.0% 0.5% 0.7% 0.6% 0.5% (0.3%) (0.4%) (0.6%) 0.0% (1.0%) WSBC Regional Peers National Peers WSBC Regional Peers National Peers Tota
Slide 6: Per Share Growth vs. Peers
Per Share Growth vs. Peers 5-Year Compound Annual Growth Rate (%) LTM Earnings / Share (%) Tangible Book Value / Share (%) 8.0% 8.0% 5.9% 6.0% 6.0% 4.8% 4.8% 4.0% 4.0% 3.5% 3.0% 2.0% 2.0% 2.0% 0.0% 0.0% WSBC Regional Peers National Peers WSBC Regional Peers National Peers Source: SNL Financial; Fina
Slide 7: Recent highlights: dividends, growth, Fidelity acquisition
Increased dividends to shareholders 6 times in last 11 quarters representing a 43.0% increase. Continued growth in deposits and loans Strong loan origination focus. Deposits have been impacted by Marcellus and Utica shale payments. Acquired Fidelity Bancorp Opens new markets in Pittsburg
Slide 8: Earnings, credit quality and capital highlights
Continued growth in earnings and improved credit quality. Formed a private banking team to coordinate delivery of special service products. Continued control of expenses. Continued restructuring of branch offices. Closed 6 branches in 2012. Opened 2 new branches in 2013, one planned for
Slide 9: Nine-month 2013 financial results
Nine Months Nine Months ($ in thousands, except diluted earnings per share)00’s Ended Sept. Ended Sept. except per share data) 2013 2012 % Change Net Income $48,572 $36,894 31.7% Diluted Earnings Per Share $ 1.66 $ 1.38 20.3% Provision for Credit Losses $5,942 $16,602 (64.2%) Return on Average Asset
Slide 10: Organic Growth Opportunities
10 Organic Growth Opportunities
Slide 11: An Expanding Franchise in Contiguous Markets
An Expanding Franchise in Contiguous Markets: 118 banking offices Pennsylvania Ohio Pittsburgh Columbus Wheeling Parkersburg Morgantown Cincinnati Jackson Charleston West Virginia
Slide 12: Marcellus Shale regional coverage and deposit market share
Deposit Market Share Marcellus Shale Regional Coverage WesBanco Marcellus Shale Counties of Operation (1) Number Deposits in Market of Market Share Rank Institution (ST) Branches ($mm) (%) 1 PNC Financial Services Group Inc. (PA) 151 $40,225 38.6% 2 Bank of New York Mellon Corp. (NY) 4 18,800 18.0 3
Slide 13: Trust and wealth management
$3.5B of assets under management/custody. Over 5,000 trust relationships. Combined Trust, Securities Brokerage and Private Assets Under Management ($B) Banking under one Management Fees ($MM) management team. Net Securities Brokerage Revenue ($MM) 10 locations in WV, OH & PA. Improving per
Slide 14: Western Pennsylvania growth plan
With Fidelity we have 15 offices and a loan production office in Western PA. Build upon community bank reputation of Fidelity. Operate as a separate market with a market president. Expect to grow to $1 billion in loans in next few years. Add revenue generating staff – reducing back office.
Slide 15: Loan, deposit and capital growth
$ 950 850 750 650 550 450 350 250 150 50 (50) 2Q'11 3Q'11 4Q'11 1Q'12 2Q'12 3Q'12 4Q'12 1Q'13 2Q'13 3Q'13 Loan Growth Deposit Growth Capital Growth 15 11/30/12 acquisition of Fidelity Bancorp.
Slide 16: Loan growth by category
$300,000 $250,000 $200,000 (in thousands) $150,000 $100,000 $50,000 $0 1Q'12 2Q'12 3Q'12 4Q'12 1Q'13 2Q'13 3Q'13 Consumer Credit Lines Commercial Real Estate 16
Slide 17: Non-interest income
Other Inc. Insurance Non-interest income contributed Securities brokerage Trust 27% of net revenue YTD 2013. Service charges & Fees Non-bank offerings (trust, ($MM) insurance, securities) contributed $69.0 $60.4 $60.2 $62.6 $21.4 million to YTD 2013 $59.3 revenue. Securities brokerage revenue
Slide 18: Deposits by market
$1,200 $1,000 $800 ($ in millions) $600 $400 $200 $- 12/31/2011 12/31/2012 9/30/2013 Upper Ohio Valley North Central WV Parkersburg Kanawha Valley Western PA Central Ohio SW Ohio SE Ohio 18
Slide 19: Merger & Acquisition Capabilities
Merger & Acquisition Capabilities
Slide 20: M&A track record and focus
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. Adequate capital and liquidity to close. Experienced senior manageme
Slide 21: Benefits to acquiree shareholders
Currency valuation provides upside for acquiree’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 37 years. 21
Slide 22: Financial Information
22 Financial Information My aA WesBanco By all accounts, better.
Slide 23: Net interest margin
NIM Yield on Earning Assets Cost of Funds 4.54% 4.43% 4.37% 4.27% 4.31% 4.20% 4.13% 3.57% 3.53% 3.51% 3.64% 3.56% 3.52% 3.50% 1.14% 1.07% 1.03% 0.93% 0.81% 0.77% 0.73% 1Q'12 2Q'12 3Q'12 4Q'12 1Q'13 2Q'13 3Q' 13 23
Slide 24: Capital ratios
Total Risk Based Capital Tangible Equity to Tangible Assets * 16.00% 14.45% 14.07% 14.13% 14.08% 14.23% 14.00% 12.00% 10.00% 8.00% 7.13% 6.77% 6.97% 7.01% 7.13% 6.00% 4.00% 2.00% 0.00% 3Q'12 4Q'12 1Q'13 2Q'13 3Q'13 *See non-GAAP measures for additional information relating to the calculation of this
Slide 25: Securities portfolio
Securities = $1.54 B Average tax-equivalent ~25.0% of total assets portfolio yield of 3.25%. US Govt. WAL approx. 5.6 years; Agencies modified duration 4.7%. 4.6% Over 53% unpledged. Sold 60% or $130 million Municipals, of Fidelity portfolio Agency 40.5% including TRUPs, non- Mortgage- Agenc
Slide 26: Total portfolio loans
Total Portfolio Loans = $3.8 B Comm. Real Estate = Comm. & $1.87 B Ind., 14.2% LHFS, 0.2% Const & Dev. 11.7% Consumer, 6.8% Comm. Investor- HELOC, Real 7.4% owned Estate, 61.1% 48.6% Res. Real Owner- Estate, 22.8% occupied 27.2% 26
Slide 27: Non-performing and classified assets
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 NPA's as a % of total Loans Criticized & Classified Loans as a % of total Loans 27
Slide 28: Provision and allowance for credit losses
3.00% $12,000 2.50% $10,000 2.00% $8,000 1.50% $6,000 1.00% $4,000 0.50% $2,000 0.00% $- 3Q'11 4Q'11 1Q'12 2Q'12 3Q'12 4Q'12 1Q'13 2Q'13 3Q'13 Provision for credit losses ALL as a % of total loans ($000) Non performing loans as a % of total loans 28
Slide 29: Total deposit portfolio
Total Deposit Portfolio $4.0B Total Deposit Portfolio $5.1B As of 12/31/2009 As of 9/30/2013 Non-Interest Non-Interest demand demand 13.71% 18.13% Interest bearing demand 32.38% 44.73% 11.34% Certificates of Interest bearing demand Deposit 17.20% Certificates of Deposit Money Market Savings 17.99% 1
Slide 30: Interest Rate Sensitivity
Interest Rate Sensitivity % Change in Net Interest Income from Base Over One Immediate Change in Interest Rates Year September 30, 2013 Up 1% Rate Shock +1.0% Up 2% Rate Shock +0.6% Up 3% Rate Shock -1.1% Up 2% Rate Ramp +0.9% Down 1% Rate Shock -2.0% EVE Up 2% Rate Ramp * -2.9% EVE Down 1% Rate Ram
Slide 31: Stock Information
31 Stock Information My aA WesBanco By all accounts, better.
Slide 32: 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 2/2/09 9/9/10 4/13/12 11/20/13 S&P 500 Index (18.49%) WSBC (-1.66%) KBW Regional Banking Index (-19.62%) KBW Bank Index (-41.28%) 32 Source: FactSheet Research System
Slide 33: Peer Market Performance
Peer Market Performance Relative Stock Price Performance Through the Cycle (9/30/2007) 100.0% Median (excl. WSBC): (5.7%) 72.6% 55.0% 50.0% 38.1% 44.5% 26.6% 16.6% 23.2% 7.0% 7.0% 0.0% (3.9%) (0.1%) (13.9%) (9.6%) (9.3%) (7.6%) (24.8%)(24.6%)(20.6%)(20.2%) (50.0%) (34.4%) (100.0%) Relative Stock Pri
Slide 34: Peer Market Valuation
Peer Market Valuation Price / 2014 EPS Est. (1) 18.0x Median (excl. WSBC): 14.5x 16.6x 16.5x 16.2x 15.7x 15.1x 15.2x 15.3x 14.7x 14.8x 15.0x 14.2x 14.2x 14.4x 14.5x 14.5x 13.9x 14.1x 13.5x 13.0x 12.5x 12.6x 12.2x 12.0x Price / Tangible Book Value (x) 3.00x Median (excl. WSBC): 1.81x 2.53x 2.50x 2.39
Slide 35: Investment highlights
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. Potential upside market appreciation. 35
Slide 36: Appendix
36 Appendix By all accounts, better.
Slide 37: Total Bank loans by market
) September 30, 2013 Commercial Retail Total % of Total Loans Upper Ohio Valley $ 538 $ 429 $ 967 25% North Central WV 274 217 491 12% Parkersburg 174 85 259 7% Kanawha Valley 82 63 145 4% Western PA 334 168 502 13% Total East Markets $ 1,402 $ 962 $ 2,364 61% Central Ohio 555 147 702 18% Southwest
Slide 38: Total Bank nonperforming assets by market
September 30, 2013 90 Day PD Non- TDR Other RE Total by % of Total & Accruing Accrual Owned Region Upper Ohio Valley $ 293 $ 5,651 $ 3,594 $ 133 $9,671 16% North Central WV 414 1,351 2,895 170 4,830 8% Parkersburg 5 1,744 1,123 25 2,897 5% Kanawha Valley 76 2,192 332 ---- 2,600 4% Western PA 337 5,7
Slide 39: Efficiency ratio reconciliation, nine months
($ in thousands) 9/30/13 9/30/12 Non-interest expense $120,256 $108,538 Less: restructuring and merger related expense 1,265 1,518 Non-interest expense excluding restructuring and merger related expense $118,991 $107,020 Net Interest income (on a fully taxable equivalent basis) $143,498 $130,056 Non
Slide 40: Efficiency ratio reconciliation, three months
3 months 3 months ($ in thousands) ended ended 9/30/13 9/30/12 Non-interest expense $ 40,009 $ 36,790 Less: restructuring and merger related expense 36 1,518 Non-interest expense excluding restructuring and merger related $ 39,973 $ 35,272 expense Net Interest income (on a fully taxable equivalent b
Slide 41: Tangible equity to tangible assets
($ in thousands) 3Q’12 4Q’12 1Q’13 2Q’13 3Q’13 Total shareholder’s equity $ 659,322 $ 714,184 $ 724,409 $ 726,232 $ 736,688 Less: goodwill & other intangible assets (281,570) (324,465) (323,003) (322,478) (321,972) Tangible equity $ 377,752 $ 389,719 $ 401,406 $ 403,754 $ 414,716 Total assets $5,576
Slide 42: Operating non-interest income
($ in thousands) 2009 2010 2011 2012 2013* Non-interest Income $ 64,589 $ 59,599 $ 59,888 $ 64,775 $ 69,973 Less: Net Securities gains 6,046 3,362 963 2,463 918 Less: net gains/losses on other real estate owned and other assets (747) (4,128) (1,290) (305) 84 Net operating non-interest income $ 59,29
Slide 43: Return on average tangible equity, YTD
($ in thousands) 9/30/12 YTD 9/30/13 YTD Net income* $ 49,282 $ 64,941 Plus: amortization of intangibles* (tax effected at 35%) 1,372 1,514 Net income before amortization of intangibles* $ 50,654 $ 66,455 Average total shareholders’ equity $ 647,649 $ 729,244 Less: average goodwill & other intangibl
Slide 44: Return on average tangible equity, QTD
($ in thousands) 9/30/12 QTD 9/30/13 QTD Net income* $ 51,345 $ 61,634 Plus: amortization of intangibles* (tax effected at 35%) 1,342 1,434 Net income before amortization of intangibles* $ 52,687 $ 63,068 Average total shareholders’ equity $ 655,666 $ 733,462 Less: average goodwill & other intangibl
Slide 45: WesBanco
45 WesBanco By all accounts, better.