Wesbanco, Inc. · NASDAQ:WSBC
Wesbanco — Debt Investor Presentation (March 2022)
37 slides from Wesbanco's debt investor presentation, Mar 3, 2022
Slide 1: Fixed Income Investor Presentation
Exhibit 99.1 Fixed Income Investor Presentation (WSBC financials for the three months ended December 31, 2021) March 2022
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: Additional Information About Wesbanco, Inc.
Additional Information About Wesbanco, Inc. Founded in 1870, Wesbanco, Inc. (www.wesbanco.com) is a diversified and balanced financial services company that delivers large bank capabilities with a community bank feel. Our distinct long-term growth strategies are built upon unique sustainable advanta
Slide 4: Today's Presenters
Today’s Presenters Todd F. Clossin - President and Chief Executive Officer Ø Joined WSBC in November of 2013 as EVP & COO; Named President & CEO in April 2014 Ø 38 years of experience in banking Ø Previously held senior management positions at Fifth Third Bank, including EVP & Chief Administrative O
Slide 5: Strategies for Long-Term Success
Strategies for Long-Term Success
Slide 6: Long-Term Growth Strategies
Long-Term Growth Strategies Diversified Digital Franchise- Loan Long History Banking Enhancing Portfolio of Strong Service Expansion with C&I Wealth Strategies within and Home Management & Core Contiguous Lending Capabilities Deposit Markets Focus Advantage Focus on Delivering Positive Operating Lev
Slide 7: Diversified Loan Portfolio
Diversified Loan Portfolio $9.7 Billion Loan Portfolio Ø Focus on strategic diversification, growth, and credit quality Commercial & Industrial Comm'l R/E: 15% § Balance disciplined loan origination Improved Property with prudent lending standards 48% SBA PPP 2% § Focus on C&I and home equity lendin
Slide 8: Strong Wealth Management Capabilities
Strong Wealth Management Capabilities Trust & Investments Insurance Trust Assets Ø $5.6B of trust and mutual fund (Market Value as of 12/31) ($B)Ø Personal, commercial, title, $5.6 assets under management health, and life $4.3 CAGR $3.2 4.8% Ø 6,500+ relationships Ø Expand title business in all $2.4
Slide 9: Digital Platforms Drive Engagement & Efficiency
Digital Platforms Drive Engagement & Efficiency Ø Digital banking utilization § ~70% of retail customers utilize online digital banking services § ~4.1 million web and mobile logins per month • Mobile ~50% of total, with an average of 19 monthly logins per customer § Mobile wallet & mobile deposits
Slide 10: Benefits of Core Deposit Funding Advantage
Benefits of Core Deposit Funding Advantage Ø Robust legacy deposit base provides funding advantage in the Mid-Atlantic market Ø Reflecting the significantly lower interest rate environment, aggressively reduced deposit rates since March 2020 Ø During the last five years: § Total deposits (excluding
Slide 11: Evolving Regional Financial Services Institution
Evolving Regional Financial Services Institution Ø Strong market Strong Market Presence in Major Markets presence across legacy and major #15 in OH Pittsburgh W heeling metropolitan markets #10 Pgh Indianapolis MSA Dayton Columbus #12 in MD Morgantown Baltimore Ø Balanced loan and Cincinnati W ashin
Slide 12: Franchise Expansion
Franchise Expansion Ø T argeted acquisitions in existing Contiguous Markets Radius markets and new higher-growth metro areas ESB & FSBI AmTrust Ø Long-term focus on appropriate branches capital management to enhance OAKF OLBK shareholder value FFKT FTSB YCB Ø Strong capital and liquidity, along with
Slide 13: Focus on Enhancing Shareholder Value
Focus on Enhancing Shareholder Value Ø 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 Start of Pandemic & “Durbin Fed Funds ESB YCB Amendment” R
Slide 14: Recent Successes and Accolades
Recent Successes and Accolades Ø WesBanco Bank was named one of America’s Best Midsize Employers by Forbes, based on employee feedback and recommendations – the only midsize bank in the top ten for both financial performance and employer of choice Ø WesBanco Bank was again named one of the ten Best
Slide 15: Financial Overview
WesBaneo By all accounts, better. Financial Overview
Slide 16: Q4 2021 Financial and Operational Highlights
Q4 2021 Financial and Operational Highlights (1) Ø Solid pre-tax, pre-provision income and net Pre-Tax, Pre-Provision Income income (excluding restructuring & merger-related expenses) $52.7 million Ø Continued emphasis on expense management Net Income Available to Common (1) Ø Trust assets reached a
Slide 17: Q4 2021 Total Portfolio Loans
Q4 2021 Total Portfolio Loans ($MM) Ø Loan growth for Q4 2021 reflects the continuation of both SBA PPP loan forgiveness and elevated commercial real estate payoffs Ø ~1,950 SBA PPP loans remaining Comm'l Avg Comm'l Avg New Yield Payoff Yield total ~$163 million (as of 12/31/2021) 3.20% 3.83% § Duri
Slide 18: Q4 2021 Net Interest Margin (NIM)
Q4 2021 Net Interest Margin (NIM) Ø NIM negatively impacted by the lower interest rate environment, and a shift to a higher level of securities as a percentage of total assets § As a result of higher cash balances, 12/31/2021 investment securities increased $1.3 billion year-over-year, to represent
Slide 19: Q4 2021 Non-Interest Income
Q4 2021 Non-Interest Income Ø Trust fees increased primarily from Quarter Ending % H / (L) % H / (L) net organic growth in trust assets under management ($5.6 billion) ($000s) 12/31/21 12/31/20 09/30/21 Ø Service charges on deposits were Trust fees $7,441 10.2% 2.1% higher due to increased general c
Slide 20: Q4 2021 Non-Interest Expense
Q4 2021 Non-Interest Expense Ø Salaries and wages increased due to Quarter Ending % H / (L) % H / (L) higher employee commissions and lower loan contra-costs ($000s) 12/31/21 12/31/20 09/30/21 § Base salary expenses decreased $1.7 million and bonus and stock Salaries and wages $40,420 3.3% 2.3% comp
Slide 21: Comparable Operating Metrics
Comparable Operating Metrics Ø 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)
Slide 22: Solid Legacy of Credit Quality
Solid Legacy of Credit Quality Ø Favorable asset quality measures compared to all U.S. banks with total assets from $10B to 25B (note: 2020 ACL comparability impacted by timing of the adoption of CECL accounting standard and economic assumptions used by each bank) Criticized & Classified Loans as %
Slide 23: Strong Risk Management and Capital Position
Strong Risk Management and Capital Position (1) Outstanding Trust Preferred 12/31/21 Capital Ratios Principal 15.9% Balance Rate Callable 14.1% ($000s) 12.8% 14.6% Wesbanco Capital Trust II $13,000 3ML + 315bps Yes 10.0% 12.7% 12.2% Wesbanco Capital Trust III $17,000 3ML + 310bps Yes 9.1% Wesbanco C
Slide 24: Returning Value to Shareholders
Returning Value to Shareholders Ø Focus on appropriate capital allocation to provide financial flexibility while continuing to enhance shareholder value through earnings growth and effective capital management Ø Capital management strategy: dividends, share repurchases, acquisitions § Q4 2021 divide
Slide 25: Summary
WesBanco By all accounts, better. Summary
Slide 26: Investment Rationale
Investment Rationale Ø Balanced loan and deposit distribution across footprint Ø Diversified earnings streams built for long-term success, led by Balanced and century-old, $5.6B trust and wealth management business Diversified with Unique Long- Ø Strong presence in economically diverse, major market
Slide 27: Appendix
WesBanco By all accounts, better. Appendix
Slide 28: Executive Management
Executive Management • Mr. Perkins has served in enterprise risk management responsibilities since 2001 Michal L. Perkins • Previously, Mr. Perkins was Senior Vice President and Chief Auditor of the Corporation Senior Executive Vice President • Mr. Perkins has 32 years of experience in banking, work
Slide 29: Current Rating Profile
Current Rating Profile Kroll Bond Rating Agency – Current Ratings Summary Wesbanco, Inc. Outlook: Positive Senior Unsecured Debt BBB+ Subordinated Debt BBB Preferred Stock BBB- Short-Term Debt K2 Wesbanco Bank, Inc. Outlook: Positive Deposit A- Senior Unsecured Debt A- Subordinated Debt BBB+ Short-T
Slide 30: Interest Coverage
Interest Coverage Dollars in thousands Year ended December 31 2017 2018 2019 2020 2021 Double Leverage Bank-Level Equity $1,431,021 $1,991,564 $2,572,916 $2,675,924 $2,636,220 Consolidated Equity 1,395,321 1,978,827 2,593,921 2,756,737 2,693,166 Double Leverage Ratio 103% 101% 99% 97% 98% Interest C
Slide 31: Q4 2021 Key Metrics
Q4 2021 Key Metrics Quarter Ending H / (L) H / (L) Year-to-Date H / (L) 12/31/21 12/31/20 09/30/21 12/31/21 12/31/20 (1)(2) 1.21% (1bp) 15bp 1.40% 63bp Return on Average Assets (1)(2) 1.24% (32bp) (10bp) 1.44% (16bp) PTPP Return on Average Assets (1)(2) Return on Average Tangible Equity 13.66% 38bp
Slide 32: Q4 2021 Current Expected Credit Loss (CECL)
Q4 2021 Current Expected Credit Loss (CECL) Ø The decrease in the allowance was primarily driven by improvements in the COVID-19 pandemic related adjustments § These improvements resulted in a negative provision for credit losses of $13.6 million Ø Allowance coverage ratio of 1.25%, or, excluding SB
Slide 33: Reconciliation: Efficiency Ratio
Reconciliation: Efficiency Ratio Three Months Ending Twelve Months Ending Twelve Months Ending ($000s) 12/31/20 09/30/21 12/31/21 12/31/20 12/31/21 12/31/10 12/31/11 12/31/12 12/31/13 12/31/14 12/31/15 12/31/16 12/31/17 12/31/18 12/31/19 12/31/20 12/31/21 Non-Interest Expense $88,069 $94,701 $88,303
Slide 34: Reconciliation: Pre-Tax, Pre-Provision Income (PTPP) and Ratios
Reconciliation: Pre-Tax, Pre-Provision Income (PTPP) and Ratios Three Months Ending Twelve Months Ending ($000s) 12/31/20 09/30/21 12/31/21 12/31/20 12/31/21 Income before Provision for Income Taxes $64,557 $55,059 $66,292 $145,079 $301,849 Provision for Credit Losses (209) (1,730) (13,559) 107,741
Slide 35: Reconciliation: Net Income, EPS & Tangible Book Value per Share
Reconciliation: Net Income, EPS & Tangible Book Value per Share Three Months Ending Twelve Months Ending ($000s, except earnings per share) 12/31/10 12/31/20 09/30/21 12/31/21 12/31/20 12/31/21 Net Income Available to Common Shareholders n/a $50,210 $41,877 $51,617 $119,400 $232,135 Restructuring an
Slide 36: Reconciliation: Return on Average Assets
Reconciliation: Return on Average Assets Three Months Ending Twelve Months Ending Twelve Months Ending ($000s) 12/31/20 12/31/21 12/31/20 12/31/21 12/31/17 12/31/18 12/31/19 12/31/20 12/31/21 Net Income Available to Common Shareholders $50,210 $51,617 $119,400 $232,135 $94,482 $143,112 $158,873 $119
Slide 37: Reconciliation: Return on Average Tangible Equity
Reconciliation: Return on Average Tangible Equity Three Months Ending Twelve Months Ending Twelve Months Ending ($000s) 12/31/20 12/31/21 12/31/20 12/31/21 12/31/17 12/31/18 12/31/19 12/31/20 12/31/21 Net Income Available to Common Shareholders $50,210 $51,617 $119,400 $232,135 $94,482 $143,112 $158