Wesbanco, Inc. · NASDAQ:WSBC
Wesbanco — Investor Presentation (May 2020)
37 slides from Wesbanco's investor presentation, May 6, 2020
Slide 1: Investor Presentation (Q2 2020)
John Iannone Senior Vice President, Investor & Public Relations 304-905-7021 Investor Presentation (Q2 2020) (WSBC financials as of Q1 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 Emphasis on customer service to e
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 our customers, communities, and employees Proactive credit risk management 90+% of non-customer facing employees are working remote Temporarily limiting most financial center locations to drive-up and ATM services,
Slide 8: Customer Support Efforts
>1,300 consumer customers helped ~$145 million residential mortgage loans ~$30 million consumer and HELOC loans >5,900 loans approved by the SBA ~$840 million loan funding ~80% loans below $150,000 Customer Support Efforts Consumer Customers Commercial Customers SBA’s Paycheck Protection Program Not
Slide 9: 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 3/31/2020 (1) Non-GAAP measure – please see reconciliatio
Slide 10: Selected Commercial Loan Portfolio Details
Selected Commercial Loan Portfolio Details Hotel Portfolio Retail & Restaurant Portfolio Energy Portfolio ~205 loans with ~$750MM of total exposure ~17% in shale gas markets LTV = 58.2%; DSC = 1.54x Loan size No loan >$25MM 36% less than $1MM 36% between $1-5MM 21% between $5-10MM Hotel type 74% lim
Slide 11: Strategies for Long-Term Success
Strategies for Long-Term Success
Slide 12: 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 13: 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 Average
Slide 14: Strong Wealth Management Capabilities
Private Banking $800MM in private banking loans and deposits 2,900+ 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 3/31/2020; ch
Slide 15: 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 16: 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 17: Technology to Drive Revenue and Save Costs
Technology to Drive Revenue and Save Costs Approximately two-thirds of retail customers utilize online or mobile banking services, averaging more than three million logins per month On average, approximately 30% of residential mortgages applications and 100 deposit account openings are done online e
Slide 18: 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 19: Strategies for Mid-Atlantic Market Success
Strategies for Mid-Atlantic Market Success Key leadership and talent retained High-growth market with good demographics Washington D.C. and Baltimore are the 5th and 19th largest MSAs, respectively Strong employment, household income, and projected population growth Median household incomes are 30-6
Slide 20: Financial Overview
~~ WesBanco By all accounts, better. Financial Overview
Slide 21: Financial Performance Summary
Financial Performance Summary (Non-GAAP) excludes after-tax merger-related expenses represent annualized net loan charge-offs as percentage of average loans Note: please see the reconciliations to GAAP results in the appendix; Current Expected Credit Losses (“CECL”) accounting standard adopted Janua
Slide 22: Financial and Operational Highlights – Q1 2020
Note: financial data as of quarter ending 3/31/2020, and compared to the quarter ending 3/31/2019; certain costs excludes after-tax merger-related expenses; Current Expected Credit Losses (“CECL”) accounting standard adopted January 1, 2020 by WSBC; please see the reconciliations to GAAP results in
Slide 23: 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 during March 2020 During the last five
Slide 24: 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 25: 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 Strong Legacy
Slide 26: Favorable Operating Metrics
Favorable Operating Metrics Disciplined execution upon growth strategies providing strong performance compared to all U.S. banks with total assets from $10B to 25B (note: 2020 comparability impacted by timing of the adoption of CECL accounting standard and economic assumptions used by each bank) Not
Slide 27: Returning Value to Shareholders
Returning Value to Shareholders Focus on appropriate capital allocation to provide financial flexibility while continuing to enhance shareholder value through earnings growth and effective capital management Capital management strategy: acquisitions, dividends, share repurchases Q1 2020 dividend pay
Slide 28: Appendix
~~ WesBanco By all accounts, better. Appendix
Slide 29: CECL Adjustments to Allowance for Credit Losses
CECL Adjustments to Allowance for Credit Losses The current expected credit loss (“CECL”) model became effective for WesBanco on January 1, 2020, which resulted in the significant increases in both allowance for credit losses and provision for credit losses Allowance coverage ratio of 1.10% Excludes
Slide 30: Net Interest Margin
NIMs across the industry are being negatively impacted by the cumulative 225bp, since July 2019, of cuts to the Federal Reserve Board’s targeted federal funds rate, with 150bp of these cuts occurring during March 2020 As a slightly asset sensitive bank, subject to factors expected to affect industry
Slide 31: Commercial Loan Detail
Commercial Loan Detail Note: loan data as reported in applicable Form 10-Q or 10-K, and reflects acquisitions; largest loan represents the largest contractual obligation of Wesbanco, which may not be fully funded
Slide 32: Financial Performance Summary Trend – Annual
Financial Performance Summary Trend – Annual Efficiency Ratio (1) Net Income (1) ($MM) (1) excludes merger-related expenses and net deferred tax asset revaluation (as applicable) Note: please see the reconciliations to GAAP results in the appendix; Current Expected Credit Losses (“CECL”) accounting
Slide 33: 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 34: 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 35: Reconciliation: Net Income and EPS (Diluted)
Reconciliation: Net Income and EPS (Diluted) 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 Bancshares merger closed April 201
Slide 36: 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 37: 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