Wesbanco, Inc. · NASDAQ:WSBC
Wesbanco — Investor Presentation (August 2020)
41 slides from Wesbanco's investor presentation, Aug 6, 2020
Slide 1: Investor Presentation (Q3 2020)
John Iannone Senior Vice President, Investor & Public Relations 304-905-7021 Investor Presentation (Q3 2020) (WSBC financials as of the three months ended 30 June 2020)
Slide 2: Forward-Looking Statements and Non-GAAP Financial Measures
Forward-Looking Statements and Non-GAAP Financial Measures 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 A
Slide 3: Key Differentiators
Key Differentiators Balanced loan and deposit distribution across footprint Diversified earnings streams built for long-term success Strong market positions in economically diverse, major markets with positive demographic trends Robust legacy deposit base, enhanced by shale gas royalties Balanced an
Slide 4: Balanced and Diversified
Balanced and Diversified Strong market positions across legacy and major metropolitan markets Balanced loan and deposit distribution across diverse regional footprint Diversified revenue generation engines supported by unique advantages Well-executed long-term growth strategies Note: loan and deposi
Slide 5: Investment Rationale
Investment Rationale Well-capitalized with solid liquidity and strong credit quality 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 with emphasis on customer service
Slide 6: Strategies for Near-Term Success
Strategies for Near-Term Success
Slide 7: Customers, Communities, and Employees
Customers, Communities, and Employees Cross-functional team focused on the safety of customers, communities, and employees continues to meet regularly Proactive credit risk management 90+% of non-customer facing employees are working remote Serving customers through both drive-up facilities and via
Slide 8: SBA's Paycheck Protection Program
SBA’s Paycheck Protection Program Note: data as of 6/30/2020; Small Business Administration’s Paycheck Protection Program (“SBA PPP”) as established by the CARES Act Participating in Round 3 – no material requests in queue “Thank you so much for your help in processing my PPP loan. It has taken a lo
Slide 9: Customer Support Efforts During Pandemic
Customer Support Efforts During Pandemic Note: deferral data as of 7/31/2020 reflects loan deferrals accepted and closed by customers including 93 2nd deferrals for $153.7MM (of which, 27 hotels for $134.5MM); end of loan deferral monthly schedule does not reflect any potential future 2nd loan defer
Slide 10: Q2 2020 Loan Portfolio Diversification
Q2 2020 Loan Portfolio Diversification Note: loan data as of quarter ending 6/30/2020; SBA PPP loans totaled $836.8MM and are C&I loans (left chart) and All Other Loans (right chart) categories Focus on balanced loan distribution across 6-state footprint and strategic loan growth and diversification
Slide 11: Q2 2020 Hotel Portfolio
Q2 2020 Hotel Portfolio Note: loan balances as of 6/30/2020 and excludes SBA PPP loans ~210 loans with $729MM total loan balance Average loan-to-value = 56.0% Average debt service coverage ratio = 1.60x Most hotels in suburban markets, and near major highways and office parks 17% in shale gas market
Slide 12: Selected Commercial Loan Portfolio Details
Selected Commercial Loan Portfolio Details Retail Portfolio Restaurant Portfolio Direct Energy Portfolio 1,394 retail loans with $904MM total loan balance Loan balance distribution as % of total loans (x-PPP) R/E – shopping center: 2.9% R/E – other retail: 2.6% Retail sales / other: 1.4% Gasoline/co
Slide 13: Strong Capital Position
Strong Capital Position Strong regulatory capital ratios significantly above both regulatory requirements and well-capitalized levels; and, higher tangible equity levels Note: financial data as of quarter ending 12/31; current year data as of 6/30/2020; Current Expected Credit Losses (“CECL”) accoun
Slide 14: Strategies for Long-Term Success
Strategies for Long-Term Success
Slide 15: Long-Term Growth Strategies
Long-Term Growth Strategies Focus on Delivering Positive Operating Leverage Strong Legacy of Credit Quality, Risk Management, and Compliance Diversified Loan Portfolio with C&I and Home Lending Focus Long History of Strong Wealth Management Capabilities Retail Banking Service Strategies & Core Depos
Slide 16: Diversified Loan Portfolio
Diversified Loan Portfolio Focus on strategic diversification, growth, and credit quality Balance disciplined loan origination with prudent lending standards Focus on C&I and home equity lending Key offerings include treasury management, foreign exchange, cyber security, and lockbox services Strong
Slide 17: Strong Wealth Management Capabilities
Private Banking $830MM in private banking loans and deposits 3,000+ relationships Growth opportunities from shale-related private wealth management Expansion opportunities in KY, IN, and Mid-Atlantic Strong Wealth Management Capabilities Note: assets, loans, deposits, and clients as of 6/30/2020; ch
Slide 18: Focus on Positive Operating Leverage
Focus on 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 Note: financial data as of 12/31; current year-to-date (YTD)
Slide 19: Technology to Drive Revenue and Save Costs
Technology to Drive Revenue and Save Costs Approximately 70% of retail customers utilize online or mobile banking services, averaging approximately four million logins per month On average, approximately 30% of residential mortgage applications and approximately 150 deposit account openings are done
Slide 20: Franchise Expansion
Franchise Expansion Targeted acquisitions in existing markets and new higher-growth metro areas Long-term focus on appropriate capital management to enhance shareholder value Strong capital and liquidity, along with strong regulatory compliance processes, provides ability to execute transactions qui
Slide 21: Recent Successes and Accolades
Recent Successes and Accolades The Central Ohio market of WesBanco Bank was awarded a “Top Workplaces” honor by Columbus C.E.O. magazine for the fifth consecutive year The Western Pennsylvania market of WesBanco Bank was awarded a “Top Workplaces” honor by The Pittsburgh Post Gazette for the third c
Slide 22: Financial Overview
~~ WesBanco By all accounts, better. Financial Overview
Slide 23: Financial and Operational Highlights – Q2 2020
Financial and Operational Highlights – Q2 2020 Note: financial and operational highlights during the quarter ended June 30, 2020; loan growth includes approximately $836.8 million of loans funded through the Small Business Administration’s Paycheck Protection Program (“SBA PPP”), as established by t
Slide 24: Key Metrics – Q2 2020
Key Metrics – Q2 2020 Note: PTPP = pre-tax, pre-provision; Old Line Bancshares, Inc. (“OLBK”) financial results included in WSBC results since merger consummation date of 11/22/2019 (1) Non-GAAP measure – please see reconciliation in appendix
Slide 25: Favorable Operating Metrics
Favorable Operating Metrics Disciplined execution upon growth strategies providing strong performance compared to all U.S. banks with total assets from $10B to 25B (note: 2020 comparability impacted by timing of the adoption of CECL accounting standard and economic assumptions used by each bank) Not
Slide 26: Benefits of Core Deposit Funding Advantage
Benefits of Core Deposit Funding Advantage Robust legacy deposit base, enhanced by shale energy-related royalties, provides funding advantage in Mid-Atlantic market Reflecting the significantly lower interest rate environment, aggressively reduced deposit rates beginning in March 2020 During the las
Slide 27: 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 risks in all business lines and functional areas
Slide 28: Strong Legacy of Credit Quality
Non-Performing Assets as % of Total Assets Net Charge-Offs as % of Average Loans (annualized) Allowance for Credit Losses as % of Total Loans Criticized & Classified Loans as % of Total Loans Favorable asset quality measures compared to all U.S. banks with total assets from $10B to 25B (note: 2020 A
Slide 29: Kroll Ratings
Kroll ratings are supported by WesBanco’s experienced management team, conservative loan underwriting, and strong deposit franchise with solid market share positions in key MSAs and West Virginia Kroll Ratings Source: Kroll Bond Rating Agency (8/4/2020)
Slide 30: Perpetual Preferred Stock and Capital Pro-Forma
$150MM of non-cumulative perpetual preferred stock at rate of 6.75% Boosts Tier 1 capital levels to above peer levels Strong investor interest in the offering Perpetual Preferred Stock and Capital Pro-Forma Note: on 8/4/2020, WSBC priced an underwritten public offering of 6,000,000 depositary shares
Slide 31: Returning Value to Shareholders
Returning Value to Shareholders Focus on appropriate capital allocation to provide financial flexibility while continuing to enhance shareholder value through earnings growth and effective capital management Capital management strategy: acquisitions, dividends, share repurchases Q2 2020 dividend yie
Slide 32: Appendix
~~ WesBanco By all accounts, better. Appendix
Slide 33: Pennsylvania Long-Term Funding and Growth Advantages
Pennsylvania Long-Term Funding and Growth Advantages Source: demographic data pulled April 2018 (source: S&P Global Market Intelligence); Marcellus & Utica shale data from US Department of Energy and PA Department of Community and Economic Development Columbus Morgantown Charleston Huntington ? Shal
Slide 34: Current Expected Credit Loss (CECL) – Q2 2020
The increase in the allowance and related provision for credit losses was related to the continued deterioration in the macroeconomic forecast during Q2 2020, primarily driven by the negative forecasted economic impacts of the pandemic The forecast, based upon a blend of two nationally-recognized pu
Slide 35: Net Interest Margin (NIM) – Q2 2020
Net Interest Margin (NIM) – Q2 2020 NIM negatively impacted by the low interest rate environment and flattening of the yield curve The Federal Reserve Board’s target federal funds rate was reduced 225bp from July 2019 through March 2020 Aggressively reduced deposit rates beginning in late-March, whi
Slide 36: Reconciliation: Tangible Equity to Tangible Assets
Reconciliation: Tangible Equity to Tangible Assets Note: Old Line Bancshares merger closed November 2019; Farmers Capital Bank Corporation merger closed August 2018; First Sentry Bancshares merger closed April 2018; Your Community Bankshares merger closed September 2016; ESB Financial merger closed
Slide 37: Reconciliation: Efficiency Ratio & Operating Leverage
Reconciliation: Efficiency Ratio & Operating Leverage Note: “efficiency ratio” is non-interest expense excluding restructuring and merger-related expense divided by total income; FTE represents fully taxable equivalent; Old Line Bancshares merger closed November 2019; Farmers Capital Bank Corporatio
Slide 38: Reconciliation: Pre-Tax, Pre-Provision Income & Ratios
Reconciliation: Pre-Tax, Pre-Provision Income (PTPP) & Ratios Note: Old Line Bancshares merger closed November 2019
Slide 39: Reconciliation: Net Income, EPS & Tangible Book Value per Share
Reconciliation: Net Income, EPS & Tangible Book Value per Share Note: Current Expected Credit Losses (“CECL”) accounting standard adopted January 1, 2020 by WSBC; Old Line Bancshares merger closed November 2019
Slide 40: Reconciliation: Return on Average Assets
(1) three-, six-, and nine-month (as applicable) figures are annualized Note: Current Expected Credit Losses (“CECL”) accounting standard adopted January 1, 2020 by WSBC; Old Line Bancshares merger closed November 2019; Farmers Capital Bank Corporation merger closed August 2018; First Sentry Bancsha
Slide 41: Reconciliation: Return on Average Tangible Equity
(1) three-, six-, and nine-month (as applicable) figures are annualized; amortization of intangibles tax effected at 21% for 2018 forward, and 35% for all prior periods Note: Current Expected Credit Losses (“CECL”) accounting standard adopted January 1, 2020 by WSBC; Old Line Bancshares merger close