Wesbanco, Inc. · NASDAQ:WSBC
Wesbanco — KBW Community Bank Investor Conference 2009
31 slides from Wesbanco's conference presentation, Jul 27, 2009
Slide 1: KBW Community Bank Investor Conference
KBW Community Bank Investor Conference July 29, 2009
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: Explanation of Certain Non-GAAP Measures
Explanation of Certain Non-GAAP Measures This presentation contains certain financial information determined by methods other than in accordance with Generally Accepted Accounting Principles (GAAP). Specifically, WesBanco has provided financial measures that are based on core or operating earnings r
Slide 4: WesBanco at a Glance
WesBanco at a Glance • Headquarters in Wheeling, West Virginia • Assets: $5.74 billion • Founded in 1870 • 32 banks/23 companies acquired in 25 years • Banking operations in West Virginia, Ohio and Western Pennsylvania 114 114 banking banking offices offices ++ Pittsburgh, Pittsburgh, PA PA Loan
Slide 5: Investment Rationale
Investment Rationale Stability, Diversity and Capital Strength • Strong regulatory capital • Proven acquisition-oriented growth strategy • Improved liquidity • Asset quality compares favorably with regional and national peers • Consistent pre-tax, pre-provision earnings • Diversity of earnings strea
Slide 6: Strong Regulatory Capital Base
Strong Regulatory Capital Base Total Risk-Based Capital Tangible Common Equity to Tangible Assets 18.0% 10.0% 14.46% 13.95% 13.63% 15.0% 12.28% 12.59% 8.0% 12.0% 6.29% 6.48% 6.44% 6.0% 5.30% 5.38% 9.0% 4.0% 6.0% 3.0% 2.0% 0.0% 0.0% 2Q08 3Q08 4Q08 1Q09 2Q09 2Q08 3Q08 4Q08 1Q09 2Q09 Common Equity TARP
Slide 7: Growth by Acquisition: A WSBC Core Competency
Growth by Acquisition: (MM) A WSBC Core Competency $6.0 7.5 year Asset Growth • Focused on higher growth $5.0 CAGR = 11.8% metro markets and $4.0 enhanced market share $3.0 • Five acquisitions in seven years – assets more than $2.0 doubled since 2001 $1.0 • A history of successful consolidations $0.
Slide 8: 2009 Acquisition Activity
2009 Acquisition Activity 5 AmTrust Bank Branches • Five offices in Greater Columbus; brings Columbus total to 13 • Completed March 27, 2009 • WSBC now ranks #9 in Columbus market (up from #21) with a 2.3% deposit market share • $597 million in deposits @ 3.5% deposit premium • Invested in $550 mill
Slide 9: Liquidity Significantly Improved with $600 Million of AmTrust Deposits
Liquidity Significantly Improved with $600 Million of AmTrust Deposits • Loan to Deposit Ratio improved from 103% at year-end 2008 to 87% at 2Q 2009 • Lowers reliance on wholesale funding (borrowings & brokered deposits) as they mature • Securities portfolio of $1.5B highly liquid; 60% unpledged and
Slide 10: An Expanding Franchise in Contiguous Markets
An Expanding Franchise in Contiguous Markets: 114 banking offices • Ranked #1-3 in deposit market share in 16 counties out of 37* • Expanding along major highways to population centers (Columbus, Dayton, Cincinnati) • Organized into two regions, seven markets * SNL June 2008 Deposit Market Share Dat
Slide 11: Loan Portfolio as of June 30, 2009
Loan Portfolio as of June 30, 2009 Total Loans = $3.54 B Comm. Real Estate = $1.77 B Comm. Comm. & & Ind. Ind. 13% 13% Const & Dev. Consumer Consumer 14% 8% 8% Comm. Comm. Real Real HELOC, HELOC, 6% 6% Estate, Estate, 50% 50% Owner- Owner- Investor- Investor- Occupied Occupied Owned Owned 35% 35% 51
Slide 12: Conservative Exposure to Potential Problem Loan Areas
Conservative Exposure to Potential Problem Loan Areas WSBC is Below Regulatory CRE Guidelines C&D + Investor-owned CRE = 256% of Total Risk-Based Capital Exposure1 % of Regulatory Commercial Real Estate Loans ($Millions) RBC2 Guideline Land, Construction & Development $ 317.0 65.2% 100% Investor-Own
Slide 13: Non-Performing Loans by Loan Category
Non-Performing Loans by Loan Category ($ in MMs) 4Q’08 1Q’09 2Q’09 Land, Construction & Development $ 5.5 $ 7.2 $ 9.4 Investment Property 11.7 27.4 29.8 Owner Occupied 15.3 19.5 21.6 Total CRE Non-Performing Loans 32.5 54.1 60.8 Commercial & Industrial 8.3 8.5 11.1 Residential & Home Equity 13.0 12.
Slide 14: Asset Quality Remains Better than Peers
Asset Quality Remains Better than Peers NPA ++ ≥≥ 90 NPA 90 PD PD Loans Loans // Net Net Charge-offs Charge-offs // Avg. Avg. Loans Loans Total Total Loans Loans ++ OREO OREO WSBC Peer* WSBC Peer* 2.90% 0.96% 2.67% 2.35% 2.24% 0.72% 0.74% 0.68% 1.60% 1.67% 1.60% 0.55% 0.57% 1.31% 1.39% 0.45% 0.42% 0
Slide 15: Credit Risk Management
Credit Risk Management • Centralized credit administration (commercial and retail) • Senior credit officers in each region, report directly to Chief Credit Officer • Commercial banking executives in each region, & support staff in each market providing localized decision making • Credit analyst supp
Slide 16: Improving Credit Infrastructure: 2009 Initiatives
Improving Credit Infrastructure: 2009 Initiatives • Add staff to Special Assets to administer troubled credits • Conduct skills assessment & initiate formal credit training program for commercial/retail sales force • Change operating model for small business lending to include expanded delivery chan
Slide 17: Financial Results
Financial Results
Slide 18: Quarterly Performance Comparison
Quarterly Performance Comparison ($000’s except per share data) 2Q 2009 1Q 2009 LQ %∆ GAAP Income $6,348 $4,394 + 44.5% Core Income* $5,930 $5,636 + 5.2% Diluted Core EPS* $0.22 $0.21 + 4.8% Loan Loss Prov. $8,269 $9,550 - 13.4% Core ROAA* 0.41% 0.43% - 4.7% ROATE 8.16% 5.61% + 45.5% NIM (FTE) 3.17%
Slide 19: Six Months' Performance Comparison
Six Months’ Performance Comparison ($000’s except per share data) 2009 2008 % GAAP Income $10,743 $20,787 - 48.3% Core Income* $11,566 $21,696 - 46.7% Diluted Core EPS* $0.44 $0.82 - 46.9% Core ROAA* 0.42% 0.83% - 51.2% ROATE 6.85% 15.23% - 55.0% NIM 3.31% 3.68% - 10.0% Core Efficiency Ratio 67.25%
Slide 20: Consistent Pre-tax Pre-Provision Earnings
Consistent Pre-tax Pre-Provision Earnings (MM) Net Income PreTax PreProv. Ann. WSBC Net Income Ann. WSBC PTPP $100 5-year CAGR: PreTax & PreProv Earnings = 1.8% $80 $60 $40 $20 $0 2003 2004 2005 2006 2007 2008 2009* * Annualized based on 6 months YTD.
Slide 21: Net Interest Margin
Net Interest Margin NIM Yield on Earning Assets Cost of Funds 7.00% 6.40% 6.18% 6.04% 6.00% 5.65% 5.24% 5.00% 3.75% 3.71% 3.71% 4.00% 3.31% 3.17% 2.95% 2.80% 3.00% 2.65% 2.52% 2.34% 2.00% 1.00% 0.00% 2Q'08 3Q'08 4Q'08 1Q'09 2Q'09 NIM decrease in 2Q 09 due to increased liquidity from branch acquisiti
Slide 22: Stable Deposit Mix
Stable Deposit Mix Time Deposits Savings MMDA Interest Bearing Non-Interest 100% • Stable Stable deposit deposit mix mix –– 52% 52% non non maturity maturity -- despite despite high high level level of of acquisition acquisition activity activity as as of of 6/30/09 6/30/09 80% • Average Average cos
Slide 23: Securities Portfolio at June 30, 2009
Securities Portfolio at June 30, 2009 Securities = $1.51 B • Average portfolio yield of 4.55% YTD ~26% of total assets Short-term, Short-term, • WAL approx. 4 years 3% 3% • Over 60% unpledged Agencies, 14% • Minimal private label CMOs or corporate/ABS securities • Net unrealized securities gains Age
Slide 24: Interest Rate Sensitivity
Interest Rate Sensitivity % Change in Net Interest Income from Base Over One Year Immediate Change in Interest Rates Dec. 31, 2008 June 30, 2009 Up 2% Rate Shock -0.5% -2.7% Up 2 % Rate Ramp +0.7% +1.0% Up 1% Rate Shock +0.8% +0.6% Down 1% Rate Shock -3.5% -1.3% Recent strategies focus on becoming m
Slide 25: Growing & Diversified Noninterest Income
Growing & Diversified Noninterest Income* Trust Securities services (Net) Insurance (Net) Gain on Mtg. Loan Sales ($MM) Service Charges & Fees BOLI • Noninterest income contributed Other 27.1% of 1H’09 revenue. $70 $60 $57.0 $54.1 • Deposit service charges and $50.7 other banking income up 16% $50 $
Slide 26: Wealth Management Services
Wealth Management Services • $2.4B of assets under management & administration • Over 5,000 trust relationships • 3 locations in WV & 1 in Assets Under Management ($B) Columbus, OH Management Fees ($MM) • Product capabilities: $14.3 $15.0 $16.2 $14.9 $13.3* Trust Trust $3.1 Investment Investment
Slide 27: WSBC vs. Peer Bank Index
WSBC vs. Peer Bank Index % Change since 7/31/08 Base Month Peer Index WSBC 30.0% 20.0% 10.0% 0.0% -10.0% -20.0% -30.0% -40.0% -50.0% Jul-08 Oct-08 Nov-08 Dec-08 Jan-09 Feb-09 Mar-09 May-09 Sep-08 Aug-08 Apr-09 Jun- * Peer Group = 15 banks with assets between $2-$10 B in WV, OH, IN, and West PA: FNB,
Slide 28: Why WesBanco?
Why WesBanco? • Earnings derived from diversified product lines, markets and customers • Efficient controls and delivery channels • Responsive to local market conditions and opportunities • Proven ability to manage risk • Financially conservative
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Slide 30: Reconciliation: GAAP to Core
Reconciliation: GAAP to Core Quarterly 1Q’08 2Q’08 3Q’08 4Q’08 1Q’09 2Q’09 GAAP Income before Taxes 11,754 13,657 12,635 4,564 6,201 7,746 Gain (loss) on sale of securities 506 400 276 374 142 2,462 Non-recurring revenue 400 0 0 0 0 0 Merger related and restructuring expenses 1,049 1,656 539 701 429
Slide 31: Reconciliation: GAAP to Core
Reconciliation: GAAP to Core Six-Months YTD 2008 2009 GAAP Pretax Income 25,411 13,947 Gain (loss) on Sale of Securities 906 2,604 Non-Recurring Revenue 400 0 Merger-Related & Restructuring Exp. 2,705 621 Core Earnings before Taxes 26,810 11,964 Tax Provision, Adj. for Core 5,114 398 After-Tax Core
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