Wesbanco, Inc. · NASDAQ:WSBC
Wesbanco — Q1 2014 Earnings Presentation
46 slides from Wesbanco's earnings presentation, Apr 29, 2014
Slide 1: WesBanco Presentation on 1st Quarter 2014 Results
WesBanco By all accounts, better. Presentation on ist Quarter 2014 Results for various investor conferences during the 2nd Quarter 2014
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
Slide 3: WesBanco company overview
Headquarters in Wheeling, West Virginia Assets: $6.2 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 106 ATM’s Wealth management, sec
Slide 4: Executive management
Years in Years with Executive Position Banking WSBC James Gardill Chairman of the Board 42* 42 Todd Clossin President & CEO 30 1 Robert Young EVP & CFO 28 13 Peter Jaworski EVP & Chief Credit Officer 30 19 Jonathan Dargusch EVP – Trust & Investments 33 4 Bernard Twigg EVP – Chief Lending Officer 30
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 (%) 2.4% 4.5% 1.2% 3.1% 1.2% 3.0% 0.4% 0.0% 1.5% (1.2%) 0.0% (0.1%) (0.4%) (1.9%) (2.4%) (1.5%) WSBC Regional Peers National Peers WSBC Regional Peers National Peers
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 (%) 13.0% 7.0% 12.2% 12.1% 6.4% 6.0% 5.9% 11.0% 5.5% 9.0% 4.0% 8.2% 7.0% 2.5% 5.0% 1.0% WSBC Regional Peers National Peers WSBC Regional Peers National Peers Source: SNL Financial;
Slide 7: Highlights: dividends, deposits and loan growth
Increased dividends to shareholders 7 times in last 13 quarters representing a 57% increase. Continued growth in deposits and loans Strong loan origination focus. Deposits have been positively influenced by Marcellus and Utica shale payments. Growth in net income and earnings per share and
Slide 8: Expense control, branches and capital position
Continued control of expenses. Continued restructuring of branch offices. Closed 6 branches in 2012. Opened 1 new branch in 2013 Opened 1 new branch in 2014, with a 2nd branch opening in the western PA market area in mid 2014. Maintained strong capital position, considered “Well-capitali
Slide 9: First quarter 2014 financial results
For the For the For the Quarter Quarter Quarter Ended Ended Ended ($ in thousands, except diluted earnings per March March % Dec. % share)00’s except per share data) 2014 2013 Change 2013 Change Net Income $16,421 $16,021 2.5% $15,353 7.0% Diluted Earnings Per Share $ 0.56 $ 0.55 1.8% $0.52 7.7% Pro
Slide 10: Organic Growth Opportunities
10 Organic Growth Opportunities
Slide 11: An Expanding Franchise in Contiguous Markets
An Expanding Franchise in Contiguous Markets: 120 banking offices Pennsylvania Ohio Pittsburgh Columbus Wheeling Parkersburg Morgantown Cincinnati Jackson Charleston West Virginia
Slide 12: Marcellus Shale regional coverage and deposit market share
Deposit Market Share Marcellus Shale Regional Coverage WesBanco Marcellus Shale Counties of Operation (1) Number Deposits in Market of Market Share Rank Institution (ST) Branches ($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
Slide 13: Trust and investment services
$3.8B of assets under management/custody. Over 5,000 trust relationships. Combined Trust, Securities Brokerage and Private Banking under one management team. Assets Under Management ($B) 10 locations in WV, OH & PA. Management Fees ($MM) Net Securities Brokerage Revenue ($MM) Improving per
Slide 14: Western Pennsylvania market
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. PA Market security brokerage fees for 1Q’14 have increased 108.9% over 1Q’13 and 14.9% over 4Q’13. Add revenu
Slide 15: Loan, deposit and capital growth
$1150 950 750 550 350 150 (50) Loan Growth Deposit Growth Capital Growth 15 11/30/12 acquisition of Fidelity Bancorp.
Slide 16: Non-interest income
Gain Mort. Loan Sales Other Inc. Non-interest income contributed Insurance Securities brokerage 26% of net revenue YTD 2014. Trust Service charges & Fees Non-bank offerings (trust, ($MM) insurance, securities) contributed $68.7 $68.7 $62.6 $8.4 million to YTD 2014 revenue. $60.7 $59.9 Securiti
Slide 17: Non-interest bearing deposits
(Dollars in thousands) Non-interest bearing deposits % of Total Deposits $1,200,000 25.0% $1,000,000 20.0% $800,000 15.0% $600,000 10.0% $400,000 5.0% $200,000 $0 0.0% 4Q'09 1Q'10 2Q'10 3Q'10 4Q'10 1Q'11 2Q'11 3Q'11 4Q'11 1Q'12 2Q'12 3Q'12 4Q'12 1Q'13 2Q'13 3Q'13 4Q'13 1Q'14 17
Slide 18: Merger & Acquisition Capabilities
Merger & Acquisition Capabilities
Slide 19: 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
Slide 20: Currency valuation and shareholder returns
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. Performed better than peer group over past 1, 3 and 5 year time frame. 20
Slide 21: Financial Information
21 Financial Information Wy aA WesBanco By all accounts, better.
Slide 22: Net interest margin
NIM Yield on Earning Assets Cost of Funds 4.43% 4.37% 4.27% 4.31% 4.20% 4.13% 4.09% 4.08% 3.53% 3.50% 3.64% 3.56% 3.52% 3.58% 3.63% 3.51% 1.07% 1.03% 0.93% 0.81% 0.77% 0.73% 0.63% 0.56% 2Q'12 3Q'12 4Q'12 1Q'13 2Q'13 3Q'13 4Q'13 1Q'14 22
Slide 23: Capital ratios
Total Risk Based Capital Tangible Equity to Tangible Assets * 16.00% 14.13% 14.08% 14.23% 14.19% 14.40% 14.00% 12.00% 10.00% 8.00% 7.04% 7.07% 7.19% 7.35% 7.49% 6.00% 4.00% 2.00% 0.00% 1Q'13 2Q'13 3Q'13 4Q'13 1Q'14 *See non-GAAP financial measures for additional information relating to the calculati
Slide 24: Securities portfolio
Securities = $1.56 B Average tax-equivalent ~25.0% of total assets portfolio yield of 3.27%. US Govt. WAL approx. 4.9 years; Agencies modified duration 4.2%. 4.6% Over 53% unpledged. Net unrealized AFS Municipals, securities losses of $4.7 Agency 39.4% million at 3/31/14; total Mortgage- net
Slide 25: Total portfolio loans
Total Portfolio Loans = $3.9 B Comm. Real Estate = Comm. & $1.92 B Ind., 14.4% LHFS, 0.2% Const & Dev. 12.3% Consumer, 6.1% Comm. Investor- HELOC, Real owned 7.3% Estate, 61.8% 49.2% Res. Real Owner- Estate, 22.8% occupied 25.9% 25
Slide 26: NPAs and criticized and classified 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 1Q'14 NPA's as a % of total Loans Criticized & Classified Loans as a % of total Loans 26
Slide 27: Provision, ALL and non-performing loans
3.00% $7,000 $6,000 2.50% $5,000 2.00% $4,000 1.50% $3,000 1.00% $2,000 0.50% $1,000 0.00% $- 1Q'12 2Q'12 3Q'12 4Q'12 1Q'13 2Q'13 3Q'13 4Q'13 1Q'14 ($000) Provision for credit losses ALL as a % of total loans Non performing loans as a % of total loans 27
Slide 28: Total loan portfolio mix
Total Loan Portfolio $3.6B Total Loan Portfolio $3.9B As of 12/31/2008 As of 12/31/2013 39% 51% Within Outside 49% 61% Outside WVA WVA Within WVA WVA 28
Slide 29: Total deposits by geography
Total Deposits $3.5B Total Deposit $5.1B As of 12/31/2008 As of 12/31/2013 49% 58% Outside 42% Outside Within WVA 51% WVA Within WVA WVA 29
Slide 30: Total deposit portfolio mix
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% 18.98% Interest bearing demand 29.86% 44.73% 11.34% Certificates of Interest bearing demand Deposit 16.94% Certificates of Deposit Money Market 15.60% Savings
Slide 31: Interest Rate Sensitivity
Interest Rate Sensitivity % Change in Net Interest Income from Immediate Change in Base Over One Year Interest Rates March 31, 2014 December 31, 2013 Up 1% Rate Shock +2.2% +1.6% Up 2% Rate Shock +2.7% +1.7% Up 3% Rate Shock +1.6% +0.2% Up 2% Rate Ramp +1.3% +1.1% Down 1% Rate Shock -2.1% -2.0% EVE
Slide 32: Stock Information
32 Stock Information w aA WesBanco By all accounts, better.
Slide 33: Dividends Per Share
Dividends Per Share Dividend payout ratio = 39.29% at 4/1/14 $0.25 $0.20 $0.15 $0.10 $0.05 $0.00 1Q'11 2Q'11 3Q'11 4Q'11 1Q'12 2Q'12 3Q'12 4Q'12 1Q'13 2Q'13 3Q'13 4Q'13 1Q'14 33
Slide 34: Peer Market Valuation
Peer Market Valuation Price / 2014 EPS Est. (1) 19.0x 18.4x Median (excl. WSBC): 14.2x 17.0x 15.6x 15.7x 15.7x 14.6x 14.6x 14.7x 14.9x 15.0x 14.2x 14.2x 13.6x 13.8x 13.4x 13.4x 13.5x 12.9x 12.9x 13.1x 13.0x 12.6x 11.0x Price / Tangible Book Value (x) 2.60x Median (excl. WSBC): 1.70x 2.32x 2.24x 2.20
Slide 35: Peer Market Performance
Peer Market Performance Relative Stock Price Performance Through the Cycle (6/30/2007) 80.0% 69.7% 71.5% Median (excl. WSBC): (2.8%) 40.0% 19.2% 8.9% 9.8% 11.2% 14.4% 2.8% 0.0% (6.9%) (5.0%) (2.8%) (2.3%) (0.7%) (15.5%)(13.6%)(11.7%) (25.4%)(21.7%) (40.0%) (31.7%) (38.1%) (80.0%) Relative 1-Year Sto
Slide 36: Investment highlights
Strong regulatory capital. Proven acquisition-oriented growth strategy. Liquidity to fund additional lending capacity. Asset quality compares favorably with regional and national peers. Diversity of earnings stream. Potential upside market appreciation due to lower than peer P/E ratio. 3
Slide 37: Appendix
37 Appendix wN By all accounts, better.
Slide 38: Loans by market
) March 31, 2014 Commercial Retail Total % of Total Loans Upper Ohio Valley $ 542 $ 420 $ 962 25% North Central WV 259 216 475 12% Parkersburg 171 82 253 6% Kanawha Valley 81 61 142 4% Western PA 345 166 511 13% Total East Markets $ 1,398 $ 945 $ 2,343 60% Central Ohio 625 155 780 20% Southwest Ohio
Slide 39: Non-performing assets by market
March 31, 2014 90 Day PD Non- TDR Other RE Total by % of Total & Accruing Accrual Owned Region Upper Ohio Valley $ 465 $ 7,277 $ 3,185 $ 766 $11,693 20% North Central WV 255 1,433 2,885 ---- 4,573 8% Parkersburg 36 1,126 1,118 407 2,687 4% Kanawha Valley 177 1,751 257 ---- 2,185 4% Western PA 315 5,
Slide 40: Efficiency ratio reconciliation, year-end
($ 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 $175,027 N
Slide 41: Efficiency ratio reconciliation, quarter
3 months 3 months ($ in thousands) ended ended 3/31/14 3/31/13 Non-interest expense $ 40,095 $ 40,747 Less: restructuring and merger related expense -- 1,178 Non-interest expense excluding restructuring and merger related $ 40,095 $ 39,569 expense Net interest income (on a fully taxable equivalent b
Slide 42: Tangible equity to tangible assets
($ in thousands) 1Q’13 2Q’13 3Q’13 4Q’13 1Q’14 Total shareholder’s equity $ 724,409 $ 726,232 $ 736,688 $ 746,595 $ 761,117 Less: goodwill & other intangible assets, net of def. tax liabilities (319,156) (318,828) (318,516) (318,161) (317,840) Tangible equity $ 405,253 $ 407,404 $ 418,172 $ 428,434
Slide 43: Operating non-interest income reconciliation
($ in thousands) 2010 2011 2012 2013 2014* Non-interest income $ 59,599 $ 59,888 $ 64,775 $ 69,285 $ 69,143 Less: Net securities gains 3,362 963 2,463 684 40 Less: net gains/losses on other real estate owned and other assets (4,128) (1,290) (305) (81) (452) Net operating non-interest income $ 60,365
Slide 44: Return on average tangible equity, annual
($ 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
Slide 45: Return on average tangible equity, quarter
($ in thousands) 3/31/13 QTD 3/31/14 QTD Net income* $ 64,974 $ 66,596 Plus: amortization of intangibles* (tax effected at 35%) 1,647 1,305 Net income before amortization of intangibles* $ 66,621 $ 67,901 Average total shareholders’ equity $ 722,214 $ 758,841 Less: average goodwill & other intangibl
Slide 46: WesBanco
46 WesBanco By all accounts, better.