Wesbanco, Inc. · NASDAQ:WSBC

Wesbanco — Sterne Agee Financial Institutions Investor Conference 2014

44 slides from Wesbanco's conference presentation, Feb 12, 2014

  1. Slide 1: Sterne Agee Financial Institutions Investor Conference

    Sterne Agee Financial Institutions Investor Conference Boca Raton, FL February 12 – 14, 2014

  2. 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

  3. 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  120 banking offices + Pittsburgh Business Loan Production Center  105 ATM’s  Wealth management, sec

  4. Slide 4: Executive management

    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

  5. 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 (%) 1.2% 1.0% 3.6% 2.4% 2.2% 0.6% 0.0% 1.2% 0.1% (0.6%) 0.0% (0.5%) (0.7%) (1.2%) (1.2%) (0.8%) WSBC Regional Peers National Peers WSBC Regional Peers National Peers

  6. 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 (%) 10.0% 10.0% 9.0% 9.0% 7.5% 7.5% 6.4% 5.9% 4.9% 5.0% 5.0% 3.9% 2.5% 2.5% 0.0% 0.0% WSBC Regional Peers National Peers WSBC Regional Peers National Peers Source: SNL Financial; Fi

  7. Slide 7: 2013 highlights: dividends, deposits and Fidelity acquisition

     Increased dividends to shareholders 6 times in last 12 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

  8. Slide 8: 2013 highlights: earnings, credit quality and capital

     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

  9. Slide 9: Annual results summary 2013 vs 2012

    For the Year For the Year ($ in thousands, except diluted earnings per share)00’s Ended Ended except per share data) Dec. 2013 Dec. 2012 % Change Net Income $63,925 $49,544 29.0% Diluted Earnings Per Share $ 2.18 $ 1.84 18.5% Provision for Credit Losses $9,086 $19,874 (54.3%) Return on Average Asset

  10. Slide 10: Organic Growth Opportunities

    10 Organic Growth Opportunities

  11. Slide 11: An Expanding Franchise in Contiguous Markets

    An Expanding Franchise in Contiguous Markets: 120 banking offices Pennsylvania Ohio Pittsburgh Columbus Wheeling Parkersburg Morgantown Cincinnati Jackson Charleston West Virginia

  12. 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

  13. Slide 13: Trust and Investment Services

     $3.7B of assets under management/custody.  Over 5,000 trust relationships.  Combined Trust, Securities Brokerage and Private Banking under one management team. Assets Under Management ($B)  10 locations in WV, OH & PA. Management Fees ($MM) Net Securities Brokerage Revenue ($MM)  Improving per

  14. 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.

  15. 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 4Q'13 Loan Growth Deposit Growth Capital Growth 15 11/30/12 acquisition of Fidelity Bancorp.

  16. 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 4Q'13 Consumer Credit Lines Commercial Real Estate 16

  17. Slide 17: Non-interest income

    Other Inc. Insurance Securities brokerage Trust  Non-interest income contributed Service charges & Fees 27% of net revenue YTD 2013. ($MM)  Non-bank offerings (trust, $68.7 insurance, securities) contributed $60.4 $60.2 $62.6 $28.6 million to YTD 2013 $59.3 revenue.  Securities brokerage revenue

  18. Slide 18: Loans by market

    $1,200 $1,000 $800 ($ in millions) $600 $400 $200 $- 12/31/2011 12/31/2012 12/31/2013 Upper Ohio Valley North Central WV Parkersburg Kanawha Valley Western PA Central Ohio SW Ohio SE Ohio 18

  19. Slide 19: Merger & Acquisition Capabilities

    Merger & Acquisition Capabilities

  20. 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

  21. Slide 21: Benefits of WesBanco currency to sellers

     Currency valuation provides upside for seller’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

  22. Slide 22: Financial Information

    22 Financial Information My aA WesBanco By all accounts, better.

  23. Slide 23: Net interest margin, yield and cost of funds

    NIM Yield on Earning Assets Cost of Funds 4.54% 4.43% 4.37% 4.27% 4.31% 4.20% 4.13% 4.09% 3.57% 3.53% 3.51% 3.64% 3.56% 3.52% 3.58% 3.50% 1.14% 1.07% 1.03% 0.93% 0.81% 0.77% 0.73% 0.63% 1Q'12 2Q'12 3Q'12 4Q'12 1Q'13 2Q'13 3Q'13 4Q'13 23

  24. Slide 24: Capital ratios

    Total Risk Based Capital Tangible Equity to Tangible Assets * 16.00% 14.07% 14.13% 14.08% 14.23% 14.19% 14.00% 12.00% 10.00% 8.00% 6.84% 7.03% 7.07% 7.19% 7.35% 6.00% 4.00% 2.00% 0.00% 4Q'12 1Q'13 2Q'13 3Q'13 4Q'13 *See non-GAAP measures for additional information relating to the calculation of this

  25. Slide 25: Securities portfolio

    Securities = $1.53 B  Average tax-equivalent ~24.9% of total assets portfolio yield of 3.26%. US Govt.  WAL approx. 5.8 years; Agencies modified duration 4.9%. 4.8%  Over 53% unpledged.  Sold 60% or $130 million Municipals, of Fidelity portfolio Agency 40.0% including TRUPs, non- Mortgage- Agenc

  26. Slide 26: Total portfolio loans

    Total Portfolio Loans = $3.9 B Comm. Real Estate = Comm. & $1.91 B Ind., 14.3% LHFS, 0.2% Const & Dev. 13.8% Consumer, 6.4% Comm. Investor- HELOC, Real owned 7.3% Estate, 59.8% 49.0% Res. Real Owner- Estate, 22.8% occupied 26.4% 26

  27. Slide 27: Non-performing and criticized loans

    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 4Q'13 NPA's as a % of total Loans Criticized & Classified Loans as a % of total Loans 27

  28. Slide 28: Provision, allowance and non-performing loans

    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% $- 4Q'11 1Q'12 2Q'12 3Q'12 4Q'12 1Q'13 2Q'13 3Q'13 4Q'13 ($000) Provision for credit losses ALL as a % of total loans Non performing loans as a % of total loans 28

  29. Slide 29: Deposit portfolio composition

    Total Deposit Portfolio $4.0B Total Deposit Portfolio $5.1B As of 12/31/2009 As of 12/31/2013 Non-Interest Non-Interest demand demand 13.71% 18.96% Interest bearing demand 29.88% 44.73% 11.34% Certificates of Interest bearing demand Deposit 16.94% Certificates of Deposit Money Market 15.60% Savings

  30. Slide 30: Interest Rate Sensitivity

    Interest Rate Sensitivity % Change in Net Interest Income from Base Over One Immediate Change in Interest Rates Year December 31, 2013 Up 1% Rate Shock +1.6% Up 2% Rate Shock +1.7% Up 3% Rate Shock +0.2% Up 2% Rate Ramp +1.1% Down 1% Rate Shock -2.0% EVE Up 2% Rate Ramp * -2.8% EVE Down 1% Rate Ramp

  31. Slide 31: Stock Information

    31 Stock Information My aA WesBanco By all accounts, better.

  32. Slide 32: Peer Market Valuation

    Peer Market Valuation Price / 2014 EPS Est. (1) 17.0x 17.0x Median (excl. WSBC): 14.5x 15.9x 15.9x 15.4x 15.4x 15.5x 15.1x 15.2x 14.8x 14.5x 14.3x 14.3x 14.3x 14.4x 13.7x 14.0x 13.3x 13.5x 13.0x 12.5x 11.9x 12.1x 11.0x Price / Tangible Book Value (x) 3.00x Median (excl. WSBC): 1.83x 2.49x 2.50x 2.30

  33. Slide 33: Peer Market Performance

    Peer Market Performance Relative Stock Price Performance Through the Cycle (9/30/2007) 80.0% 74.3% 64.3% Median (excl. WSBC): (3.7%) 40.0% 33.3% 34.5% 38.6% 25.1% 17.5% 4.0% 5.0% 0.0% (9.5%) (7.1%) (3.7%) (1.8%) (16.9%)(14.2%)(12.9%) (40.0%) (26.4%)(25.3%)(23.3%) (34.1%) (80.0%) Relative 1-Year Stoc

  34. Slide 34: 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. 34

  35. Slide 35: Appendix

    35 Appendix By all accounts, better.

  36. Slide 36: Loans by market, December 31, 2013

    ) December 31, 2013 Commercial Retail Total % of Total Loans Upper Ohio Valley $ 544 $ 427 $ 971 25% North Central WV 274 216 490 12% Parkersburg 173 84 257 7% Kanawha Valley 84 63 147 4% Western PA 339 168 507 13% Total East Markets $ 1,414 $ 958 $ 2,372 61% Central Ohio 601 153 754 19% Southwest O

  37. Slide 37: Non-performing assets by market

    December 31, 2013 90 Day PD Non- TDR Other RE Total by % of Total & Accruing Accrual Owned Region Upper Ohio Valley $ 554 $ 7,755 $ 3,441 $ 355 $12,105 20% North Central WV 460 1,391 2,996 ---- 4,847 8% Parkersburg 44 1,728 1,151 ---- 2,923 5% Kanawha Valley 48 1,782 264 ---- 2,094 4% Western PA 256

  38. Slide 38: Efficiency ratio reconciliation, full year

    ($ in thousands) 12/31/13 12/31/12 Non-interest expense $160,998 $150,120 Less: restructuring and merger related expense 1,310 3,888 Non-interest expense excluding restructuring and merger related expense $159,688 $146,232 Net Interest income (on a fully taxable equivalent basis) $192,556 $175,027 N

  39. Slide 39: Efficiency ratio reconciliation, quarter

    3 months 3 months ($ in thousands) ended ended 12/31/13 12/31/12 Non-interest expense $ 40,743 $ 41,581 Less: restructuring and merger related expense 45 2,370 Non-interest expense excluding restructuring and merger related $ 40,698 $ 39,211 expense Net Interest income (on a fully taxable equivalent

  40. Slide 40: Tangible equity to tangible assets reconciliation

    ($ in thousands) 4Q’12 1Q’13 2Q’13 3Q’13 4Q’13 Total shareholder’s equity $ 714,184 $ 724,409 $ 726,232 $ 736,688 $ 746,595 Less: goodwill & other intangible assets, net of def. tax liabilities (320,399) (319,156) (318,828) (318,516) (318,161) Tangible equity $ 393,785 $ 405,253 $ 407,404 $ 418,172

  41. Slide 41: Operating non-interest income reconciliation

    ($ in thousands) 2009 2010 2011 2012 2013 Non-interest Income $ 64,589 $ 59,599 $ 59,888 $ 64,775 $ 69,285 Less: Net Securities gains 6,046 3,362 963 2,463 684 Less: net gains/losses on other real estate owned and other assets (747) (4,128) (1,290) (305) (81) Net operating non-interest income $ 59,2

  42. Slide 42: Return on average tangible equity, YTD

    ($ in thousands) 12/31/12 YTD 12/31/13 YTD Net income $ 49,544 $ 63,925 Plus: amortization of intangibles (tax effected at 35%) 1,398 1,487 Net income before amortization of intangibles $ 50,942 $ 65,412 Average total shareholders’ equity $ 656,684 $ 733,249 Less: average goodwill & other intangible

  43. Slide 43: Return on average tangible equity, QTD

    ($ in thousands) 12/31/12 QTD 12/31/13 QTD Net income* $ 50,325 $ 60,911 Plus: amortization of intangibles* (tax effected at 35%) 1,473 1,408 Net income before amortization of intangibles* $ 51,798 $ 62,319 Average total shareholders’ equity $ 683,694 $ 745,136 Less: average goodwill & other intangi

  44. Slide 44: WesBanco

    44 WesBanco By all accounts, better.

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