Wesbanco, Inc. · NASDAQ:WSBC
Wesbanco — Stifel Nicolaus Bank & Thrift Conference 2010
39 slides from Wesbanco's conference presentation, Nov 2, 2010
Slide 1: Stifel Nicolaus Bank & Thrift Conference
Stifel Nicolaus Bank & Thrift Conference November 2, 2010 New York, NY
Slide 2: Forward-Looking Statements
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 informatio
Slide 3: WesBanco at a Glance
WesBanco at a Glance • Headquarters in Wheeling, West Virginia • Assets: $5.4 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 134 ATM’s • Non-bank act
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 14 counties out of 37* Springfield Columbus Wheeling • Expanding along major highways to Dayton population centers (Columbus, Dayton, Huntington Cincinnati) • Organized into seven markets * SNL
Slide 5: Growth by Acquisition: A WSBC Core Competency
Growth by Acquisition: A WSBC Core Competency (MM) 7.5 year Asset Growth • Focused on higher growth CAGR = 11.8% metro markets and enhanced market share • Five acquisitions in seven years – assets more than doubled since 2001 • A history of successful consolidations • Acquired 5 branches In Columbus
Slide 6: Recent Accomplishments
Recent Accomplishments • Completed Amtrust branch acquisition, adding $600 million in deposits and enhancing overall bank liquidity while moving to #9 in market share in Columbus, OH. • Paid back $75 million in TARP without common raise. • Earnings for 2009 and first nine months of 2010 compare favo
Slide 7: Performance Comparison
Performance Comparison For the Nine Months Ended – September 30, 2010 Nine Nine months months ended ended ($000’s except per share data) 9/30/10 9/30/09 %∆ Net Income Available to Common $25,302 $11,403 +121.9% Shareholders Diluted Earnings Per Share $0.95 $0.43 +120.9% Credit Loss Provision $34,953
Slide 8: Quarterly Performance Comparison
Quarterly Performance Comparison %∆ %∆ %∆ %∆ 3Q-10 vs. 2Q-10 vs. 1Q-10 vs. 4Q-09 vs. ($000’s except per share data) 3Q-09 2Q-09 1Q-09 4Q-08 Net Income Available to Common +294.4% + 75.8% + 80.0% + 32.0% Shareholders Diluted Earnings Per Share +277.8% + 72.2% + 76.5% + 28.6% Credit Loss Provision - 2
Slide 9: ROAA: Pre-Tax, Pre-Provision, Pre-TARP
ROAA: Pre-Tax, Pre-Provision, Pre-TARP
Slide 10: Strong Capital Base
Strong Capital Base 15.00% 14.46% 12.68% 12.87% 12.89% 12.37% 12.00% 9.00% 7.90% 5.88% 6.06% 6.27% 6.34% 6.00% 3.00% 0.00% 2008 2009 1Q '10 2Q '10 3Q '10 Tangible Equity / Tangible Assets Total Risk Based Capital
Slide 11: Annualized Net Charge-offs / Average Loans
Annualized Net Charge-offs / Average Loans WSBC National Peers* 2.45% 2.02% 1.90% 1.77% 1.63% 1.56% 1.58% 1.00% 2.09% 1.59% 1.42% 0.83% 0.57% 0.68% 1Q'09 2Q'09 3Q'09 4Q'09 1Q'10 2Q'10 3Q'10 • National Peer Group = Average of 99 banks nationwide (81 of 99 for 3Q ‘10) ) with assets between $2-$10 B. •
Slide 12: NPA + ≥ 90 PD Loans / Total Loans + OREO
NPA + ≥ 90 PD Loans / Total Loans + OREO WSBC National Peers* 5.80% 5.54% 5.21% 4.56% 4.89% 3.89% 3.38% 3.21% 2.67% 2.82% 3.10% 3.16% 2.70% 2.21% 1Q'09 2Q'09 3Q'09 4Q'09 1Q'10 2Q'10 3Q'10 • National Peer Group = Average of 99 banks nationwide (44 of 99 for 3Q ‘10) with assets between $2-$10 B. • Sou
Slide 13: Initiatives for Improving Credit Infrastructure and Lending Opportunities in 2010
Initiatives for Improving Credit Infrastructure and Lending Opportunities in 2010 • Added staff to workout and credit underwriting departments. • Developed training programs for commercial lenders and business bankers based on skills assessment . • Segregated business banking team of lenders from mi
Slide 14: 2010 – 2011 Business Initiatives
2010 – 2011 Business Initiatives • 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. • Focus on organic loan growth, with an emphasis on business banking and
Slide 15: 2010 – 2011 Business Initiatives (con’t.)
2010 – 2011 Business Initiatives (con’t.) • Continue to focus on branch & alternative delivery strategies & branch optimization. • Maintain NIM by emphasizing strategies for low-cost transaction accounts, management of loan and deposit rates & reduction in higher cost borrowings. • Greater treasury
Slide 16: Marcellus Shale Play
Marcellus Shale Play • Area five times as large as Barnett Shale – primarily in WV & PA, parts of NY & OH. • PSU study suggests 200k jobs created by Marcellus drilling activity by 2020. • Total estimated economic activity by 2020 - $19 B. • Portion relating to WV - $3 B. • WSBC in 10 out of 32 count
Slide 17: Wealth Management Services
Wealth Management Services • $2.8B of assets under management/custody. • Over 5,000 trust relationships. • 4 locations in WV & OH • Improving performance as asset values recover. • Product capabilities: Trust Investment mgmt. WesMark Funds Estate planning Financial planning Brokerage R
Slide 18: Significant Liquidity
Significant Liquidity • Loan-to-deposit ratio decreased to 80% at 9/30/10, down from 103% pre-Amtrust branch purchase. • Reduced reliance on wholesale funding (borrowings and brokered CDs); < 15% of total assets. • Securities portfolio of $1.4B highly liquid; 54% unpledged and $32 MM in net unrealiz
Slide 19: Securities Portfolio – Quality & Liquidity
Securities Portfolio – Quality & Liquidity Securities = $1.36 B • Average portfolio yield of 4.02% YTD. ~25% of total assets • WAL approx. 4 years. • Over 54% unpledged. US Govt. Agencies • Minimal private label CMO’s, Mortgage- 24.7% equities or corporate/ABS Backed & securities. CMOs, 42.1% • Net
Slide 20: Municipal Bond Portfolio Characteristics
Municipal Bond Portfolio Characteristics • Portfolio comprised of $429 million of tax exempts and taxable Build America Bonds. • Approximately 88% are local issuers, all bank-qualified. • G.O.’s are 74% of total; 26% local revenue bonds. • 94% rated, with 73% rated AA (or its equivalent) or higher.
Slide 21: Diversified Loan Portfolio
Diversified Loan Portfolio Total Loans = $3.32 B Comm. Real Estate = Comm. & Ind. $1.73 B 13% Consumer Const & Dev. 8% 13% Comm. Real Estate, 52% HELOC, 8% Investor- Owner- Owned Occupied 52% 35% Res. Real Estate, 19%
Slide 22: 3rd Quarter Loan Sale
3rd Quarter Loan Sale • $14.6 million loan sale completed before quarter-end: – Consists of $11.6 million CRE and $3.0 million commercial loans. – $13.2 million were non-accrual loans and $1.4 million were classified. – $5.4 million in previously provided reserves attributable to loans. – Net sale p
Slide 23: Conservative Exposure to Potential Problem Loan Areas
Conservative Exposure to Potential Problem Loan Areas WSBC is Below Regulatory CRE Guidelines Exposure1 % of Regulatory ($Millions) RBC2 Guideline Land, Construction & Development $282 64% 100% Investor-Owned Commercial $626 142% N/A Investor-Owned Multi-Family $182 41% N/A Total Land, C&D, and Inve
Slide 24: Net Interest Margin
Net Interest Margin NIM Yield on Earning Assets Cost of Funds 7.00% 6.00% 5.30% 5.26% 5.10% 4.98% 5.00% 4.00% 3.35% 3.57% 3.56% 3.61% 3.00% 2.21% 1.91% 1.74% 2.00% 1.56% 1.00% 0.00% 3Q'09 1Q'10 2Q'10 3Q'10
Slide 25: Diversified Noninterest Income
Diversified Noninterest Income Other (Sec. Gains, BOLI, etc.) Service Charges & Fees • Noninterest income contributes Insurance Securities brokerage 26% of 2010 YTD revenue. ($MM) Trust $65.0 $60.5 • Non-bank offerings (trust, $57.3 insurance, securities) contribute $52.9 over $22 million in 2010 an
Slide 26: Interest Rate Sensitivity
Interest Rate Sensitivity % Change in Net Interest Income from Immediate Change in Base Over One Year Interest Rates Sept. 30, 2010 Dec. 31, 2009 Up 1% Rate Shock +2.3% -0.4% Up 2% Rate Shock +1.1% -4.7% Up 3% Rate Shock -0.3% -9.6% Up 2% Rate Ramp +2.0% +0.9% Down 1% Rate Shock -3.3% -0.8%
Slide 27: Peer Group – Price / Tangible Book Value
Peer Group – Price / Tangible Book Value Price / Tangible Book Value (X) 2.45 2.50 Redeemed TARP / Did Not Receive Still Has TARP 1.96 2.00 1.91 1.84 Median (Excl. WSBC): 1.39x 1.72 1.50 1.50 1.39 Recent Common 1.23 (x) Equity Raise* 1.05 1.05 1.04 1.00 0.92 0.88 0.50 0.00 UBSI FNB CHCO STBA PRK FFB
Slide 28: Peer Group – Price / 2012 Estimated Earnings
Peer Group – Price / 2012 Estimated Earnings Price / 2012E Earnings (x) (1) 16.00 14.8x Median (Excl. WSBC): 12.00 10.0x 11.3x 10.4x 10.6x 10.0x 10.1x 10.2x 9.7x 9.8x 9.1x 8.7x 8.00 4.00 FRME MSFG FCF STBA FFBC FNB WSBC PRK ONB CHCO UBSI Source: Pricing data per FactSet Research Systems (1) 2012E ea
Slide 29: Current Market Update
Current Market Update Market Performance – Cycle-to-Date Market Performance – YTD 125.0% 175.0% 100.0% 150.0% 75.0% 125.0% 50.0% 100.0% 25.0% 0.0% 75.0% 6/30/2007 4/29/2008 2/27/2009 12/28/2009 10/28/2010 12/31/2009 3/16/2010 5/28/2010 8/13/2010 10/28/2010 WesBanco, Inc. (-43.05%) WesBanco, Inc. (36
Slide 30: Research Analyst Coverage
Research Analyst Coverage 2010 EPS 2011 EPS Investment Bank Current Rating Estimate Estimate Stifel Nicolaus Buy $1.14 $1.25 Macquarie Neutral $1.08 $1.46 Sterne Agee Neutral $1.25 $1.32 Boenning & Scattergood Neutral / Moderate $1.14 $1.47 Janney Capital Markets Neutral $1.29 $1.35 Rodman & Renshaw
Slide 31: Investment Rationale
Investment Rationale Stability, Diversity and Capital Strength • Strong regulatory capital • Proven acquisition-oriented growth strategy • Improving liquidity • Asset quality compares favorably with peers • Diverse earnings stream • Positioned for rising rates • Improving stock performance
Slide 32: Appendix: Loan Totals by Market
Appendix: Loan Totals by Market ($ millions) Commercial Retail Total Loans Upper Ohio Valley $ 446 $ 398 $ 844 North Central WV 234 179 413 Parkersburg 196 86 282 Kanawha Valley 64 36 100 Western PA 180 15 195 Total East Markets $ 1,120 $ 714 $ 1,834 Central Ohio 526 145 671 Southwest Ohio 359 163 5
Slide 33: Appendix: Credit Quality By Market
Appendix: Credit Quality By Market ($ thousands) 90 Day PD Non- Reneg. Other RE & Accruing Accrual Loans Owned Upper Ohio Valley $ 1,410 $ 7,129 $ 5,551 $ 2,141 North Central WV 589 456 619 303 Parkersburg 525 2,992 709 274 Kanawha Valley 279 2,890 N/A 375 Western PA 680 1,931 250 150 Total East Mar
Slide 34: Non-GAAP Financial Measures
Non-GAAP Financial Measures Tangible equity to tangible assets 2008 2009 1Q’10 2Q’10 3Q’10 Total shareholder’s equity $ 659,371 $ 588,716 $ 596,473 $ 604,714 $ 608,287 Less: goodwill & other intangible assets (267,883) (288,292) (287,593) (286,908) (286,228) Tangible equity 391,488 300,424 308,880 3
Slide 35: Non-GAAP Financial Measures
Non-GAAP Financial Measures Return on Average Tangible Equity YTD 9/30/09 YTD 9/30/10 Net income (annualized) $ 22,242 $ 33,828 Plus :amortization of intangibles (annualized) 2,012 1,791 Net income before amortization of intangibles (annualized) 24,254 35,619 Average total shareholder’s equity 656,6
Slide 36: Non-GAAP Financial Measures
Non-GAAP Financial Measures Return on Average Tangible Equity 4Q’08 1Q’09 2Q’09 3Q’09 Net income (annualized) $ 23,157 $ 22,099 $ 23,039 $ 21,591 Plus :amortization of intangibles (annualized) 2,427 1,839 2,116 2,079 Net income before amortization of intangibles (annualized) 25,584 23,938 25,155 23,
Slide 37: Non-GAAP Financial Measures
Non-GAAP Financial Measures Return on Average Tangible Equity 4Q’09 1Q’10 2Q’10 3Q’10 Net income (annualized) $ 28,949 $ 32,081 $ 33,043 $ 36,313 Plus :amortization of intangibles (annualized) 2,050 1,842 1,787 1,743 Net income before amortization of intangibles (annualized) 30,999 33,923 34,830 38,
Slide 38: Non-GAAP Financial Measures
Non-GAAP Financial Measures ROAA: Pre-tax, Pre-provision, Pre-TARP 2Q’09 3Q’09 4Q’09 1Q’10 2Q’10 3Q’10 Income before provision for income taxes $ 5,746 $ 5,079 $ 5,915 $ 8,780 $ 9,491 $ 9,503 Provision for credit losses 10,269 16,200 14,353 11,500 11,675 11,778 Taxable equivalent adjustment 1,991 1,
Slide 39: WesBanco
WesBanco
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