Wesbanco, Inc. · NASDAQ:WSBC
Wesbanco — Investor Presentation (August 2019)
39 slides from Wesbanco's investor presentation, Aug 21, 2019
Slide 1: Investor Presentation (Q3 2019)
Investor Presentation (Q3 2019) (WSBC financials as of Q2 2019) John Iannone Senior Vice President, Investor & Public Relations 304-905-7021
Slide 2: Forward-Looking Statements
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 cont
Slide 3: Non-GAAP Financial Measures
Non-GAAP Financial Measures In addition to the results of operations presented in accordance with Generally Accepted Accounting Principles (GAAP), WesBanco's management use, and this presentation contains or references, certain non-GAAP financial measures, such as tangible common equity/tangible ass
Slide 4: 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 Securities and Exchange Commission (“SEC”) a Registration Statement on Form S-4 that will include a proxy statement of Old Line and WesBanco and a prospectus of WesBanco,
Slide 5: Participants in the Solicitation
Participants in the Solicitation WesBanco and Old Line and their respective executive officers and directors may be deemed to be participants in the solicitation of proxies from the shareholders of WesBanco and the stockholders of Old Line in connection with the proposed Merger. Information about th
Slide 6: 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 7: 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 8: 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 9: Strategies for Long-Term Success
Strategies for Long-Term Success
Slide 10: 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 11: Diversified Loan Portfolio
Diversified Loan Portfolio Focus on strategic growth, $7.7 Billion Loan Portfolio diversification, and credit quality Comm'l & Expansion of Commercial & Industrial Industrial 17% (C&I), Home Equity Lending, and Comm'l Residential Mortgage portfolios Consumer R/E: 4% Improved Maintain high cred
Slide 12: Strong Wealth Management Capabilities
Strong Wealth Management Capabilities Trust & Investments Insurance Trust Assets $4.5B of trust and mutual fund (Market Value as of 12/31) ($B) Personal, commercial, title, assets under management $3.7 $4.5 health, and life $3.1 CAGR 6,000+ relationships $2.3 4% Expand title business in all
Slide 13: Franchise Expansion
Franchise Expansion Targeted acquisitions in existing Contiguous Markets Radius markets and new higher-growth metro areas ESB & FSBI Critical, long-term focus on AmTrust branches shareholder return OAKF OLBK Strong capital and liquidity, along FFKT FTSB YCB with strong regulatory compliance pr
Slide 14: Positive Operating Leverage
Positive Operating Leverage Disciplined growth, balanced by a fundamental focus on expense management and supported by franchise-enhancing acquisitions, in order to deliver positive operating leverage and enhance shareholder value Assets ESB up 131% Merger YCB (Feb-15) FTSB Merger Efficiency Ratio
Slide 15: 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 2019 dividend payout ratio of 37.8% provides upside potential Q2 2019 dividend yield 3.6%, compared to
Slide 16: Financial Overview
WesBanco By all accounts, better. Financial Overview
Slide 17: Financial Performance Summary (Non-GAAP)
Financial Performance Summary (Non-GAAP) Three Months Ending Six Months Ending ($000s, except earnings per share) 6/30/2018 6/30/2019 Change 6/30/2018 6/30/2019 Change (1) $44,878 $87,670 Net Income $37,445 19.9% $71,167 23.2% Diluted Earnings per Share (1) $0.80 $0.82 2.5% $1.57 $1.60 1.9% Net Char
Slide 18: Financial and Operational Highlights – Q2 2019
Financial and Operational Highlights – Q2 2019 Strong profitability with year-over-year growth in earnings supported by two acquisitions, strong credit quality, and solid expense management Net income up 19.9% to $44.9 million and, reflecting higher shares outstanding due to acquisitions, EPS up
Slide 19: Net Interest Margin (NIM)
Net Interest Margin (NIM) NIM reflects the benefit to asset yields from the increases in the Federal Reserve Board’s target federal funds rate during 2018 and the higher margins on the acquired Farmers Capital net assets plus purchase accounting, partially offset by higher overall funding costs an
Slide 20: Benefits of Core Deposit Funding Advantage
Benefits of Core Deposit Funding Advantage Robust legacy deposit base, enhanced by shale energy-related royalties These royalties have averaged low 8-figure monthly deposit in-flows for WesBanco, and have helped control total deposit funding costs (incl. non-int. bearing) During the last five
Slide 21: Risk Management and Regulatory Compliance
Risk Management and Regulatory Compliance Strong legacy of credit and risk management Based upon conservative underwriting standards and approval processes Centralized back-office and loan funding functions Mature enterprise risk management program headed by Chief Risk Officer addressing key
Slide 22: 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 17.8% 1.39% 1.41% 16.5% 1.07% 1.09% 1.35% 16.6% 1.31% 14.0% 13.9% 15.4% 1.07% 1.04% 13.
Slide 23: Acquisition of Old Line Bancshares, Inc.
Acquisition of Old Line Bancshares, Inc. NOTE: as disclosed in the investor presentation filed on Form 8-K on 7/23/2019; please see associated reconciliations in that filing
Slide 24: Transaction Highlights
NOTE: as disclosed in the investor presentation filed Transaction Highlights on Form 8-K on 7/23/2019; please see associated reconciliations in that filing WesBanco will enter the two fastest growing MSAs in the Mid-Atlantic region Strong deposit market share in Washington D.C. (#16) and Baltimo
Slide 25: Summary of Key Terms
NOTE: as disclosed in the investor presentation filed Summary of Key Terms on Form 8-K on 7/23/2019; please see associated reconciliations in that filing OLBK stockholders to receive 0.7844 of a share of WSBC common stock for each share of OLBK common stock held, including stock options Considerat
Slide 26: Strong Market Positions Across Footprint
NOTE: as disclosed in the investor presentation filed Strong Market Positions Across Footprint on Form 8-K on 7/23/2019; please see associated reconciliations in that filing Merger is consistent with WesBanco’s distinct, and well-executed, long-term growth strategies, and the combined company is p
Slide 27: Broad and Balanced Market Distribution
NOTE: as disclosed in the investor presentation filed Broad and Balanced Market Distribution on Form 8-K on 7/23/2019; please see associated reconciliations in that filing WesBanco (Current) WesBanco (Pro-Forma) Loans Loans KY MD WV 19% WV 27% 24% 21% IN 6% KY OH PA 14%IN 24% 17% OH 31% 4% PA 13% De
Slide 28: Appendix
WesBanco By all accounts, better. Appendix
Slide 29: 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 28
Slide 30: Long-Term Core Deposit Funding Advantage
Long-Term Core Deposit Funding Advantage Shale Formations & Infrastructure Marcellus Shale region Utica Shale region Shell cracker plant ? proposed cracker plant proposed Appalachia storage Pittsburgh #10 Mkt Share Columbus Wheeling Columbus #13 Mkt Share ? Dayton Morgantown W. Virginia #2 Mkt Share
Slide 31: Experienced and Stable Management Team
Experienced and Stable Management Team Years in Years at Executive Position Banking WSBC Todd Clossin President & Chief Executive Officer 35 6 Robert Young EVP – Chief Financial Officer 33 18 Ivan Burdine EVP – Chief Credit Officer 39 6 Jonathan Dargusch EVP – Wealth Management 38 9 Steve Lawrence E
Slide 32: Financial Performance Summary Trend – Annual
Financial Performance Summary Trend – Annual Net Income (1) ($MM) Efficiency Ratio (1) $157.2 59.59% 57.05% 56.69% 56.44% 54.60% $107.9 $95.3 $88.0 $70.8 2014 2015 2016 2017 2018 2014 2015 2016 2017 2018 Return on Average Assets (1) Return on Average Tangible Equity (1) 1.39% 17.78% 15.57% 1.13% 14.
Slide 33: 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 0.23% 0.23% Legacy Loan Loss Allowance ($000s) $44,154 $41,709 $42,218 $45,832 $41,108 0.13% 0.12% 2014
Slide 34: Commercial Loan Outstanding Detail – Year-End
Commercial Loan Outstanding Detail – Year-End Commercial Real Estate by Property Type ($MM) 12/31/2018 12/31/2015 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 35: Reconciliation: Efficiency Ratio & Operating Leverage
Reconciliation: Efficiency Ratio & Operating Leverage Three Months Ending Six Months Ending Twelve Months Ending ($000s) 6/30/2018 6/30/2019 6/30/2018 6/30/2019 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 12/31/2018 Non-Interest Expense $63,543
Slide 36: 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) 6/30/2018 6/30/2019 6/30/2018 6/30/2019 12/31/2014 12/31/2015 12/31/2016 12/31/2017 12/31/2018 Net Income $33,169 $44,814 $66,698 $85,151 $69,974 $80,762 $86,635
Slide 37: Reconciliation: Return on Average Assets
Reconciliation: Return on Average Assets Three Months Ending Six Months Ending Twelve Months Ending ($000s) 6/30/2018 6/30/2019 6/30/2018 6/30/2019 12/31/2014 12/31/2015 12/31/2016 12/31/2017 12/31/2018 Net Income (1) $133,039 $179,748 $134,501 $171,713 $69,974 $80,762 $86,635 $94,482 $143,112 Net D
Slide 38: Reconciliation: Return on Average Tangible Equity
Reconciliation: Return on Average Tangible Equity Three Months Ending Six Months Ending Twelve Months Ending ($000s) 6/30/2018 6/30/2019 6/30/2018 6/30/2019 12/31/2014 12/31/2015 12/31/2016 12/31/2017 12/31/2018 Net Income (1) $133,039 $179,748 $134,501 $171,713 $69,974 $80,762 $86,635 $94,482 $143,
Slide 39: Reconciliation: Legacy Loan Loss Allowance and Total Loans
Reconciliation: Legacy Loan Loss Allowance and Total Loans Twelve Months Ending ($000s) 12/31/2014 12/31/2015 12/31/2016 12/31/2017 12/31/2018 Loan Loss Allowance $44,654 $41,710 $43,674 $45,284 $48,948 Allowance on Acquired Loans ($500) ($1) ($2,566) ($3,066) ($3,116) Legacy Loan Loss Allowance $44