WesBanco Announces Fourth Quarter and Full Year 2016 Net Income

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January 24, 2017 4:15 PM EST

WHEELING, W.Va., Jan. 24, 2017 /PRNewswire/ -- Todd F. Clossin, President and Chief Executive Officer of WesBanco, Inc. (NASDAQ: WSBC), a multi-state bank holding company based in Wheeling, WV, today announced net income and related earnings per share for the three and twelve months ended December 31, 2016.  Net income for 2016 was $86.6 million or $2.16 per diluted share compared to $80.8 million or $2.15 per diluted share for 2015.  Net income for the three months ended December 31, 2016 was $24.2 million, while diluted earnings per share were $0.55, compared to $23.0 million or $0.60 per diluted share for the fourth quarter of 2015.  Excluding after-tax merger-related expenses (non-GAAP measure) for 2016, net income increased 8.3% to $95.3 million compared to $88.0 million for 2015, while diluted earnings per share totaled $2.37, compared to $2.34 per share for 2015.  Excluding after-tax merger-related expenses (non-GAAP measure), net income for the three months ended December 31, 2016 was $26.0 million, while diluted earnings per share were $0.59, compared to $23.0 million or $0.60 per diluted share for the fourth quarter of 2015.

 

For the Three Months Ended December 31, 

For the Twelve Months Ended December 31,

2016

2015

2016

2015

(unaudited, dollars in thousands, except per share amounts)

Net Income

DilutedEarningsPer Share

Net Income

DilutedEarningsPer Share

Net Income

DilutedEarningsPer Share

Net Income

DilutedEarningsPer Share

Net income (Non-GAAP)(1)

$    25,963

$       0.59

$    23,033

$       0.60

$      95,254

$       2.37

$      87,965

$       2.34

Less: After tax merger-related expenses

(1,745)

(0.04)

(31)

-

(8,619)

(0.21)

(7,203)

(0.19)

Net income (GAAP)

$    24,218

$       0.55

$      23,002

$       0.60

$      86,635

$       2.16

$      80,762

$       2.15

(1)Non-GAAP net income excludes after-tax merger related expenses.  Non-GAAP measures are defined on page 11 under "Non-GAAP Financial Measures."

 

Financial results for Your Community Bankshares, Inc. ("YCB") were included in WesBanco's results after September 9, 2016, the date of the consummation of the merger.  The merger, which was announced on May 3, 2016, was approved by all appropriate regulatory agencies and the shareholders of YCB before the end of August, permitting the transaction to be closed in slightly over four months. YCB, with approximately $1.5 billion of assets, was headquartered in New Albany, IN and operated through 34 financial centers in Indiana and Kentucky.  The YCB merger meshes well with WesBanco's strategic growth plans and contiguous market expansion, and expands the WesBanco franchise into new attractive growth markets.  WesBanco now has $9.8 billion in total assets and provides banking services through 174 branch locations in five states.  WesBanco's results also include ESB Financial Corporation's ("ESB") results from February 10, 2015, the date of consummation of that merger.

"I am pleased to report that we successfully converted Your Community Bank with the integration and branding of our products, services, systems, and processes," said Mr. Clossin.  "We remain excited about the opportunities our newest markets in Indiana and Kentucky provide, and are encouraged by the enthusiasm of our newest employees."

Mr. Clossin added, "2016 was another successful year for WesBanco.  We have strong market share in our legacy markets, including several major metropolitan areas across five states.  We continue to manage operating expenses diligently as evidenced by our year-to-date efficiency ratio of 56.7%.  Lastly, our strong risk and compliance framework, coupled with our diversification and balanced growth, helped us to once again be named one of America's Best Banks during 2017 by a leading financial magazine. We are excited about our opportunities for the upcoming year, and look forward to a continuation of our stated strategies as we provide additional value to our customers and shareholders."

Financial Condition

Total assets at December 31, 2016 increased $1.3 billion or 15.6% compared to December 31, 2015 due to the acquisition of YCB.   Management remains focused on controlling overall growth, primarily through control of the securities portfolio, in order to manage the financial impact of crossing $10 billion in assets. Portfolio loans increased $1.2 billion or 23.4% over the last twelve months with $1.0 billion from the YCB acquisition and $171.9 million, or 3.4% from organic loan growth. Expanded market areas and additional commercial personnel in our core markets provided the organic loan growth, which occurred primarily in commercial real estate, commercial and industrial and home equity lending categories, and was achieved through $2.0 billion in loan originations in 2016, partially offset by certain large commercial real estate payoffs.  Total business loan originations were up approximately 26.7% compared to 2015.  The re-mix in average earning assets continued as securities as a percentage of total assets were reduced from 28.6% at December 31, 2015 to 23.7% at December 31, 2016, while loans have increased as a percentage of total assets to 63.8%.

Total deposits increased $974.6 million or 16.1% during the last twelve months, reflecting $1.2 billion from the YCB acquisition and our stated balance sheet strategy.  Total organic deposits, excluding CDs, increased 2.3%, driven by 10.8% organic growth in interest bearing and non-interest bearing demand deposits.  Reflecting customer preferences, total demand deposits, as of December 31, 2016, now represent 47.4% of total deposits, an increase from 40.6% a year ago.

WesBanco continues to maintain strong regulatory capital ratios after the YCB acquisition and implementation of the BASEL III capital standards.  At December 31, 2016, Tier I leverage was 9.81%, Tier I Risk-Based capital was 13.16%, Total Risk-Based capital was 14.18% and the Common Equity Tier 1 capital ratio ("CET 1"), was 11.28%.  Both consolidated and bank-level regulatory capital ratios are well above the applicable "well-capitalized" standards promulgated by bank regulators and the BASEL III capital standards. Total tangible equity to tangible assets (non-GAAP measure) was 8.20% at December 31, 2016, increasing from 7.95% at December 31, 2015, which reflects the acquisition of YCB and lower accumulated other comprehensive income.  Strong earnings and increased total capital have enabled WesBanco to increase the quarterly dividend rate, currently at $0.24 per share, nine times over the last six years, cumulatively representing a 71% increase.  The most recent increase was $0.01 per share per quarter in the first quarter of 2016.

Credit Quality

While the provision for credit losses increased by 1.5% in 2016, primarily due to loan growth, credit metrics continued to improve.  The provision for credit losses increased to $8.5 million in 2016, compared to $8.4 million in 2015. Net charge-offs as a percentage of average portfolio loans of 0.12% in 2016 decreased from 0.23% in 2015.

Non-performing loans (including TDRs), criticized and classified loans all improved as a percentage of total portfolio loans from December 31 2015. Total non-performing loans were 0.63% of total loans at December 31, 2016, decreasing from 0.89% of total loans at the end of 2015. Criticized and classified loans were 1.20% of total loans, improving from 1.57% at December 31, 2015. Past due loans at December 31, 2016 were 0.32% of total loans, minimally higher than the 0.28% at December 31, 2015, primarily due to higher delinquencies on the YCB acquired portfolio due to the administrative transition.

The allowance for loan losses represented 0.70% of total portfolio loans at December 31, 2016 compared to 0.82% as of December 31, 2015.  If the acquired YCB and ESB loans (recorded at fair value at the date of acquisition of $1,713.1 million) were excluded from the ratio, the allowance would approximate 0.96% of the adjusted loan total at December 31, 2016 compared to 1.09% prior to the ESB acquisition.

Net Interest Income

The net interest margin increased by 10 basis points to 3.42% in the fourth quarter of 2016 compared to the third quarter of 2016 as a result of higher yielding assets acquired through the acquisition. The increased yield on assets in the fourth quarter of 2016 of 15 basis points more than offset an 8 basis point increase in the cost of interest bearing liabilities as compared to fourth quarter of 2015. Net interest income increased $11.1 million or 18.3% in fourth quarter of 2016 compared to fourth quarter of 2015 due to a 25.2% increase in average loan balances resulting in a 14.4% increase in average earning assets, partially due to a 10 basis point increase in the net interest margin.  The increase in average loan balances in 2016 was due to a combination of the acquisition and the 3.4% organic loan growth highlighted by 6.2% of commercial loan growth.

The year-over-year net interest margin decreased to 3.32% in 2016 compared to 3.41% in 2015. This decrease in the net interest margin is primarily due to 10 basis points of increased funding costs and an asset yield decline of 2 basis points.  Total average loan rates decreased by 9 basis points year-over-year due to repricing of existing loans at lower spreads, competitive pricing on new loans and the extended low interest rate environment.  The funding cost increase of 10 basis points in 2016, compared to 2015, is primarily due to an increase in the percentage of borrowings, primarily FHLB, to 19.8% of interest bearing liabilities from 14.3% in 2015, as well as a 27 basis point increase in the average total cost of these borrowings year-over-year. Average interest bearing deposits in 2016 increased 1.1%, as increases in interest bearing demand and savings accounts more than offset declines in CDs and money market accounts.  During the last few quarters, the net interest margin has been relatively stable, ranging from 3.29% to 3.42% with improvements in the most recent quarter. 

Non-Interest Income

For 2016, non-interest income increased $7.0 million or 9.4% compared to 2015.  Service charges on deposits increased $1.6 million or 9.5% and electronic banking fees increased $1.2 million or 8.6% through a larger customer deposit base from the addition of YCB.  Net securities gains increased $1.4 million in 2016 compared to 2015, primarily due to increased calls of agency notes.  Net securities brokerage revenue decreased $1.2 million or 16.2% primarily as a result of our strategy to retain deposits. Other income increased $4.2 million due to a $2.7 million increase of commercial customer loan swap fee and market value related income and improvement in various other income categories.

Non-Interest Expense

The following comments on non-interest expense exclude merger-related expenses in both years.  Non-interest expense in 2016 grew $12.6 million or 6.9%, compared to 2015.  With net revenue growth of 7.5% in 2016, this positive operating leverage helped to improve the efficiency ratio in 2016 to 56.7% from 57.1% in 2015.  For 2016, salaries and wages increased $6.9 million or 9.0% due to increased compensation expense related to an 18.1% increase in full-time equivalent employees, primarily late in the third quarter of 2016 from the YCB acquisition, and routine annual adjustments to compensation. Employee benefits expense increased $1.1 million, or 3.9%, primarily from increased deferred compensation type expenses. Increases in net occupancy and equipment were also primarily from costs related to the additional branches from the YCB acquisition. At the end of the fourth quarter, a portion of the intended post conversion cost savings were beginning to be experienced through branch and system conversions.

Financial Results Conference Call

WesBanco will also host a conference call to discuss the Company's financial results for the fourth quarter of 2016 at 10:00 a.m. ET on Wednesday, January 25, 2017.  Interested parties can access the live webcast of the conference call through the Investor Relations section of the Company's website, www.wesbanco.com. Participants can also listen to the conference call by dialing 888-347-6607, 855-669-9657 for Canadian callers, or 412-902-4290 for international callers, and asking to be joined into the WesBanco call. Please log in or dial in at least 10 minutes prior to the start time to ensure a connection.

A replay of the conference call will be available by dialing 877-344-7529, 855-669-9658 for Canadian callers, or 412-317-0088 for international callers, and providing the access code of 10098820. The replay will begin at approximately 12:00 p.m. ET on January 25, and end at 12 a.m. ET on February 8. An archive of the webcast will be available for one year on the Investor Relations section of the Company's website (www.wesbanco.com).

Founded in 1870, WesBanco, Inc. (www.wesbanco.com) is a multi-state, bank holding company with total assets of approximately $9.8 billion (as of December 31, 2016). WesBanco is a diversified and well-balanced financial services institution, with a community bank at its core, built upon a strong legacy of credit and risk management. WesBanco has meaningful market share across its key geographies maintained by its commitment to dedicated customer service and solid fee-based businesses. It also provides wealth management services through a century-old trust and wealth management business, with more than $3 billion of assets under management, and serves as registered investment advisor to a proprietary mutual fund family, the WesMark Funds.  WesBanco's banking subsidiary, WesBanco Bank, Inc., operates 174 financial centers in the states of Indiana, Kentucky, Ohio, Pennsylvania, and West Virginia. In addition, WesBanco operates an insurance agency, WesBanco Insurance Services, Inc., and a full service broker/dealer, WesBanco Securities, Inc.

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 be read in conjunction with WesBanco's Form 10-K for the year ended December 31, 2015 and documents subsequently filed by WesBanco with the Securities and Exchange Commission ("SEC"), including WesBanco's Form 10-Q for the quarters ended March 31, June 30, and September 30, 2016, which are available at the SEC's website, www.sec.gov or at WesBanco's website, www.wesbanco.com.  Investors are cautioned that forward-looking statements, which are not historical fact, involve risks and uncertainties, including those detailed in WesBanco's most recent Annual Report on Form 10-K filed with the SEC under "Risk Factors" in Part I, Item 1A. Such statements are subject to important factors that could cause actual results to differ materially from those contemplated by such statements, including, without limitation, the effects of changing regional and national economic conditions; changes in interest rates, spreads on earning assets and interest-bearing liabilities, and associated interest rate sensitivity; sources of liquidity available to WesBanco and its related subsidiary operations; potential future credit losses and the credit risk of commercial, real estate, and consumer loan customers and their borrowing activities; actions of the Federal Reserve Board, the Federal Deposit Insurance Corporation, the SEC, the Financial Institution Regulatory Authority, the Municipal Securities Rulemaking Board, the Securities Investors Protection Corporation, and other regulatory bodies; potential legislative and federal and state regulatory actions and reform, including, without limitation, the impact of the implementation of the Dodd-Frank Act; adverse decisions of federal and state courts; fraud, scams and schemes of third parties; internet hacking; competitive conditions in the financial services industry; rapidly changing technology affecting financial services; marketability of debt instruments and corresponding impact on fair value adjustments; and/or other external developments materially impacting WesBanco's operational and financial performance.  WesBanco does not assume any duty to update forward-looking statements.

 

WESBANCO, INC.

Consolidated Selected Financial Highlights

Page 5

(unaudited, dollars in thousands, except shares and per share amounts)

For the Three Months Ended

For the Year Ended

STATEMENT OF INCOME

December 31,

December 31,

Interest and dividend income

2016

2015

% Change

2016

2015

% Change

Loans, including fees

$             66,135

$           52,080

27.0

$       226,993

$         203,993

11.3

Interest and dividends on securities:

Taxable 

9,359

10,522

(11.1)

38,490

39,314

(2.1)

Tax-exempt

4,770

4,644

2.7

18,390

16,764

9.7

Total interest and dividends on securities

14,129

15,166

(6.8)

56,880

56,078

1.4

Other interest income 

555

414

34.1

2,224

1,641

35.5

          Total interest and dividend income

80,819

67,660

19.4

286,097

261,712

9.3

Interest expense

Interest bearing demand deposits

975

518

88.2

2,817

1,943

45.0

Money market deposits

510

484

5.4

1,860

1,914

(2.8)

Savings deposits

194

165

17.6

696

640

8.8

Certificates of deposit

2,585

2,630

(1.7)

10,419

11,033

(5.6)

Total interest expense on deposits

4,264

3,797

12.3

15,792

15,530

1.7

Federal Home Loan Bank borrowings

2,881

2,353

22.4

11,985

5,510

117.5

Other short-term borrowings

179

116

54.3

478

370

29.2

Subordinated debt and junior subordinated debt

1,807

774

133.5

4,512

3,315

36.1

Total interest expense

9,131

7,040

29.7

32,767

24,725

32.5

Net interest income 

71,688

60,620

18.3

253,330

236,987

6.9

Provision for credit losses

2,128

2,585

(17.7)

8,478

8,353

1.5

Net interest income after provision for credit losses

69,560

58,035

19.9

244,852

228,634

7.1

Non-interest income

Trust fees

5,470

5,244

4.3

21,630

21,900

(1.2)

Service charges on deposits

5,474

4,401

24.4

18,333

16,743

9.5

Electronic banking fees

4,268

3,691

15.6

15,596

14,361

8.6

Net securities brokerage revenue

1,330

1,795

(25.9)

6,449

7,692

(16.2)

Bank-owned life insurance

1,154

1,598

(27.8)

4,064

4,863

(16.4)

Net gains on sales of mortgage loans

484

612

(20.9)

2,529

2,071

22.1

Net securities gains

63

880

(92.8)

2,357

948

148.6

Net gain on other real estate owned and other assets

383

189

102.6

790

356

121.9

Other income

2,794

1,616

72.9

9,751

5,532

76.3

Total non-interest income

21,420

20,026

7.0

81,499

74,466

9.4

Non-interest expense

Salaries and wages

24,145

19,872

21.5

84,281

77,340

9.0

Employee benefits

7,267

6,745

7.7

27,952

26,896

3.9

Net occupancy

4,272

3,336

28.1

14,664

13,635

7.5

Equipment 

4,234

3,506

20.8

14,543

13,194

10.2

Marketing

1,515

1,425

6.3

5,391

5,646

(4.5)

FDIC insurance 

764

1,093

(30.1)

3,990

4,107

(2.8)

Amortization of intangible assets

1,334

811

64.5

3,598

3,136

14.7

Restructuring and merger-related expense

2,684

48

5,491.7

13,261

11,082

19.7

Other operating expenses  

12,083

10,058

20.1

41,000

38,887

5.4

Total non-interest expense

58,298

46,894

24.3

208,680

193,923

7.6

Income before provision for income taxes

32,682

31,167

4.9

117,671

109,177

7.8

Provision for income taxes 

8,464

8,165

3.7

31,036

28,415

9.2

Net Income

$             24,218

$           23,002

5.3

$         86,635

$           80,762

7.3

Taxable equivalent net interest income

$            74,256

$          63,121

17.6

$      263,232

$       246,014

7.0

Per common share data

Net income per common share - basic

$                 0.55

$               0.60

(8.3)

$              2.16

$               2.15

0.5

Net income per common share - diluted

0.55

0.60

(8.3)

2.16

2.15

0.5

Dividends declared

0.24

0.23

4.3

0.96

0.92

4.3

Book value (period end)

30.53

29.18

4.6

Tangible book value (period end) (1)

17.19

16.51

4.1

Average common shares outstanding - basic

43,887,781

38,507,772

14.0

40,100,320

37,488,331

7.0

Average common shares outstanding - diluted

43,935,815

38,538,771

14.0

40,127,076

37,547,127

6.9

Period end common shares outstanding

43,931,715

38,459,635

14.2

43,931,715

38,459,635

14.2

(1) See non-GAAP financial measures for additional information relating to the calculation of this item.

 

WESBANCO, INC.

Consolidated Selected Financial Highlights

Page 6

(unaudited, dollars in thousands)

Selected ratios

For the Year Ended

December 31,

2016

2015

% Change

Return on average assets

0.97

%

0.99

%

(2.02)

%

Return on average equity

7.13

7.62

(6.43)

Return on average tangible equity (1)

12.73

13.41

(5.07)

Yield on earning assets (2) 

3.73

3.75

(0.53)

Cost of interest bearing liabilities

0.53

0.43

23.26

Net interest spread (2)

3.20

3.32

(3.61)

Net interest margin (2)

3.32

3.41

(2.64)

Efficiency (1) (2)

56.69

57.05

(0.63)

Average loans to average deposits

85.79

78.53

9.24

Annualized net loan charge-offs/average loans

0.12

0.23

(47.83)

Effective income tax rate 

26.38

26.03

1.34

For the Quarter Ended

Dec. 31,

Sept. 30,

June 30,

Mar. 31,

Dec. 31,

2016

2016

2016

2016

2015

Return on average assets

0.98

%

0.79

%

1.05

%

1.08

%

1.07

%

Return on average equity

7.12

5.71

7.69

8.07

8.11

Return on average tangible equity (1)

13.01

10.02

13.55

14.40

14.68

Yield on earning assets (2) 

3.84

3.73

3.71

3.70

3.69

Cost of interest bearing liabilities

0.55

0.53

0.53

0.52

0.47

Net interest spread (2)

3.29

3.20

3.18

3.18

3.22

Net interest margin (2)

3.42

3.32

3.30

3.29

3.32

Efficiency (1) (2) 

58.13

55.81

57.04

55.52

56.34

Average loans to average deposits

87.63

87.26

84.99

83.22

80.66

Annualized net loan charge-offs/average loans

0.08

0.20

0.08

0.12

0.20

Effective income tax rate 

25.90

24.94

26.78

27.54

26.20

Trust assets, market value at period end

$     3,723,142

$        3,694,405

$        3,660,736

$        3,623,532

$        3,625,411

(1) See non-GAAP financial measures for additional information relating to the calculation of this item.

(2) The yield on earning assets, net interest margin, net interest spread and efficiency ratios are presented on a fully taxable-equivalent (FTE) and annualized basis. The FTE basis adjusts for the tax benefit of income on certain tax-exempt loans and investments. WesBanco believes this measure to be the preferred industry measurement of net interest income  and provides a relevant comparison between taxable and non-taxable amounts.

 

WESBANCO, INC.

Consolidated Selected Financial Highlights

Page 7

(unaudited, dollars in thousands, except shares)

% Change

Balance sheets

December 31,

September  30, 

September 30, 2016

Assets

2016

2015

% Change

2016

to December 31, 2016

Cash and due from banks

$           106,257

$          75,707

40.4

$              106,430

(0.2)

Due from banks - interest bearing

21,913

10,978

99.6

9,702

125.9

Securities:

Trading securities, at fair value

7,071

6,451

9.6

7,070

0.0

Available-for-sale, at fair value

1,241,176

1,403,069

(11.5)

1,302,029

(4.7)

Held-to-maturity (fair values of $1,076,790; $1,038,207 and $1,089,227, respectively)

1,067,967

1,012,930

5.4

1,049,093

1.8

Total securities

2,316,214

2,422,450

(4.4)

2,358,192

(1.8)

Loans held for sale

17,315

7,899

119.2

20,231

(14.4)

Portfolio loans:

Commercial real estate

2,873,511

2,256,381

27.4

2,826,634

1.7

Commercial and industrial

1,088,118

737,878

47.5

1,097,788

(0.9)

Residential real estate 

1,383,390

1,247,800

10.9

1,395,886

(0.9)

Home equity

508,359

416,889

21.9

505,369

0.6

Consumer 

396,058

406,894

(2.7)

411,175

(3.7)

Total portfolio loans, net of unearned income

6,249,436

5,065,842

23.4

6,236,852

0.2

Allowance for loan losses

(43,674)

(41,710)

(4.7)

(42,755)

(2.1)

Net portfolio loans

6,205,762

5,024,132

23.5

6,194,097

0.2

Premises and equipment, net

133,297

112,203

18.8

138,731

(3.9)

Accrued interest receivable

28,299

25,759

9.9

29,964

(5.6)

Goodwill and other intangible assets, net

593,187

490,888

20.8

591,866

0.2

Bank-owned life insurance

188,145

150,980

24.6

186,993

0.6

Other assets

180,488

149,302

20.9

176,178

2.4

Total Assets

$      9,790,877

$   8,470,298

15.6

$         9,812,384

(0.2)

Liabilities

Deposits:

Non-interest bearing demand

$        1,789,522

$      1,311,455

36.5

$           1,697,476

5.4

Interest bearing demand

1,546,890

1,152,071

34.3

1,618,514

(4.4)

Money market

995,477

967,561

2.9

1,016,300

(2.0)

Savings deposits

1,213,168

1,077,374

12.6

1,228,509

(1.2)

Certificates of deposit

1,495,822

1,557,838

(4.0)

1,573,712

(4.9)

Total deposits

7,040,879

6,066,299

16.1

7,134,511

(1.3)

Federal Home Loan Bank borrowings

968,946

1,041,750

(7.0)

950,847

1.9

Other short-term borrowings

199,376

81,356

145.1

132,497

50.5

Subordinated debt and junior subordinated debt

163,598

106,196

54.1

163,364

0.1

Total borrowings

1,331,920

1,229,302

8.3

1,246,708

6.8

Accrued interest payable

2,204

1,715

28.5

2,898

(23.9)

Other liabilities

74,466

50,850

46.4

81,116

(8.2)

Total Liabilities

8,449,469

7,348,166

15.0

8,465,233

(0.2)

Shareholders' Equity

Preferred stock, no par value; 1,000,000 shares authorized; 

none outstanding

-

-

-

-

-

Common stock, $2.0833 par value; 100,000,000 shares authorized in

2016 and 2015, respectively; 43,931,715;  38,546,042 and 43,860,883 shares

issued, respectively; 43,931,715; 38,459,635 and 43,860,883 shares

91,524

80,304

14.0

91,377

0.2

outstanding, respectively

Capital surplus

680,507

516,294

31.8

678,007

0.4

Retained earnings

597,071

549,921

8.6

583,392

2.3

Treasury stock ( 0; 86,407 and 0 shares - at cost, respectively)

-

(2,640)

100.0

-

100.0

Accumulated other comprehensive loss

(27,126)

(20,954)

(29.5)

(5,062)

(435.9)

Deferred benefits for directors

(568)

(793)

28.4

(563)

(0.9)

Total Shareholders' Equity

1,341,408

1,122,132

19.5

1,347,151

(0.4)

Total Liabilities and Shareholders' Equity

$      9,790,877

$   8,470,298

15.6

$         9,812,384

(0.2)

 

WESBANCO, INC.

Consolidated Selected Financial Highlights

Page 8

(unaudited, dollars in thousands)

Average balance sheet and

net interest margin analysis

For the Three Months Ended December 31,

For the Year Ended December 31,

2016

2015

2016

2015

Average 

Average

Average 

Average

Average 

Average

Average 

Average

Assets

Balance

Rate

Balance

Rate

Balance

Rate

Balance

Rate

Due from banks - interest bearing

$            16,365

0.66

%

$            11,647

0.21

%

$                 27,193

0.53

%

$           15,467

0.17

%

Loans, net of unearned income (1)

6,258,754

4.20

4,999,259

4.13

5,513,277

4.12

4,840,637

4.21

Securities: (2)

    Taxable

1,612,145

2.32

1,861,808

2.26

1,677,128

2.29

1,757,288

2.24

    Tax-exempt (3)

713,545

4.11

645,737

4.43

667,066

4.24

568,671

4.54

        Total securities

2,325,690

2.87

2,507,545

2.82

2,344,194

2.85

2,325,959

2.80

Other earning assets

45,886

4.60

39,902

4.09

45,704

4.55

28,721

5.61

         Total earning assets (3)

8,646,695

3.84

%

7,558,353

3.69

%

7,930,368

3.73

%

7,210,784

3.75

%

Other assets

1,141,248

934,223

1,009,518

913,197

Total Assets

$     9,787,943

$     8,492,576

$          8,939,886

$    8,123,981

Liabilities and Shareholders' Equity

Interest bearing demand deposits

$        1,579,115

0.25

%

$        1,192,502

0.17

%

$            1,340,001

0.21

%

$      1,143,965

0.17

%

Money market accounts 

1,018,287

0.20

997,850

0.19

961,847

0.19

1,003,980

0.19

Savings deposits

1,224,744

0.06

1,068,401

0.06

1,134,755

0.06

1,044,079

0.06

Certificates of deposit

1,538,837

0.67

1,624,024

0.64

1,514,767

0.69

1,704,871

0.65

    Total interest bearing deposits

5,360,983

0.32

4,882,777

0.31

4,951,370

0.32

4,896,895

0.32

Federal Home Loan Bank borrowings

929,939

1.23

881,471

1.06

995,644

1.20

591,506

0.93

Other borrowings

136,403

0.52

119,821

0.38

105,735

0.45

109,165

0.34

Subordinated debt and junior subordinated debt

163,478

4.40

106,196

2.89

124,318

3.63

115,088

2.88

      Total interest bearing liabilities 

6,590,803

0.55

%

5,990,265

0.47

%

6,177,067

0.53

%

5,712,654

0.43

%

Non-interest bearing demand deposits

1,780,870

1,315,363

1,474,883

1,267,158

Other liabilities

63,457

62,189

72,048

84,679

Shareholders' equity

1,352,813

1,124,759

1,215,888

1,059,490

Total Liabilities and Shareholders' Equity

$     9,787,943

$     8,492,576

$          8,939,886

$    8,123,981

Taxable equivalent net interest spread

3.29

%

3.22

%

3.20

%

3.32

%

Taxable equivalent net interest margin 

3.42

%

3.32

%

3.32

%

3.41

%

(1) Gross of allowance for loan losses and net of unearned income.  Includes non-accrual and loans held for sale.

      Loan fees included in interest income on loans are $0.2 million and $0.8 million for the three months ended December 31, 2016 and 2015, respectively, and  $2.8 million and $1.5 million for the twelve months ended December 31, 2016 and 2015, respectively. Additionally, loan accretion included in interest income on loans acquired from prior acquisitions was $2.0 million and $0.9 million for the three months ended December 31, 2016 and 2015, respectively, and $4.4 million and $3.9 million for the twelve months ended December 31, 2016 and 2015, respectively, while accretion on  interest bearing liabilities acquired from the prior acquisitions was $0.6 million for both the three months ended December 31, 2016 and 2015, and $1.8 million and $3.4 million for the twelve months ended December 31, 2016 and 2015, respectively.

(2) Average yields on available-for-sale securities are calculated based on amortized cost.

(3) Taxable equivalent basis is calculated on tax-exempt securities using a rate of 35% for each period presented.

 

WESBANCO, INC.

Consolidated Selected Financial Highlights

 Page 9 

(unaudited, dollars in thousands, except shares and per share amounts)

Quarter Ended

Statement of Income

Dec. 31,

Sept.  30,

June 30,

Mar. 31,

Dec. 31,

Interest income

2016

2016

2016

2016

2015

Loans, including fees

$                        66,135

$                55,822

$              52,697

$                52,338

$              52,080

Interest and dividends on securities:

Taxable 

9,359

9,137

9,775

10,217

10,522

Tax-exempt

4,770

4,559

4,540

4,521

4,644

Total interest and dividends on securities

14,129

13,696

14,315

14,738

15,166

Other interest income 

555

574

573

525

414

          Total interest and dividend income

80,819

70,092

67,585

67,601

67,660

Interest expense

Interest bearing demand deposits

975

691

643

507

518

Money market deposits

510

444

450

456

484

Savings deposits

194

173

165

165

165

Certificates of deposit

2,585

2,592

2,583

2,659

2,630

Total interest expense on deposits

4,264

3,900

3,841

3,787

3,797

Federal Home Loan Bank borrowings

2,881

3,005

3,031

3,068

2,353

Other short-term borrowings

179

118

99

82

116

Subordinated debt and junior subordinated debt

1,807

1,043

840

822

774

Total interest expense

9,131

8,066

7,811

7,759

7,040

Net interest income 

71,688

62,026

59,774

59,842

60,620

Provision for credit losses

2,128

2,214

1,811

2,324

2,585

Net interest income after provision for credit losses

69,560

59,812

57,963

57,518

58,035

Non-interest income

Trust fees

5,470

5,413

5,036

5,711

5,244

Service charges on deposits

5,474

4,733

4,176

3,952

4,401

Electronic banking fees

4,268

3,945

3,742

3,604

3,691

Net securities brokerage revenue

1,330

1,473

1,750

1,896

1,795

Bank-owned life insurance

1,154

995

942

973

1,598

Net gains on sales of mortgage loans

484

814

683

548

612

Net securities gains

63

598

585

1,111

880

Net gain / (loss) on other real estate owned and other assets

383

184

214

(18)

189

Other income

2,794

2,862

2,463

1,616

1,616

Total non-interest income

21,420

21,017

19,591

19,393

20,026

Non-interest expense

Salaries and wages

24,145

21,225

19,731

19,180

19,872

Employee benefits

7,267

6,275

7,332

7,077

6,745

Net occupancy

4,272

3,647

3,220

3,591

3,336

Equipment 

4,234

3,557

3,402

3,428

3,506

Marketing

1,515

1,295

1,608

973

1,425

FDIC insurance 

764

961

1,099

1,166

1,093

Amortization of intangible assets

1,334

837

697

730

811

Restructuring and merger-related expense

2,684

9,883

694

-

48

Other operating expenses  

12,083

9,921

9,577

9,198

10,058

Total non-interest expense

58,298

57,601

47,360

45,343

46,894

Income before provision for income taxes

32,682

23,228

30,194

31,568

31,167

Provision for income taxes 

8,464

5,793

8,085

8,694

8,165

Net Income

$                        24,218

$                17,435

$              22,109

$                22,874

$              23,002

Taxable equivalent net interest income

$                       74,256

$               64,481

$             62,219

$               62,276

$             63,121

Per common share data

Net income per common share - basic

$                            0.55

$                    0.44

$                  0.58

$                    0.60

$                  0.60

Net income per common share - diluted

$                            0.55

$                    0.44

$                  0.58

$                    0.60

$                  0.60

Dividends declared

$                            0.24

$                    0.24

$                  0.24

$                    0.24

$                  0.23

Book value (period end)

$                          30.53

$                  30.71

$                30.31

$                  29.87

$                29.18

Tangible book value (period end) (1)

$                          17.19

$                  17.38

$                17.64

$                  17.17

$                16.51

Average common shares outstanding - basic

43,887,781

39,715,516

38,373,610

38,386,983

38,507,772

Average common shares outstanding - diluted

43,935,815

39,743,291

38,410,393

38,402,316

38,538,771

Period end common shares outstanding

43,931,715

43,860,883

38,411,343

38,362,534

38,459,635

Full time equivalent employees

1,928

1,936

1,650

1,624

1,633

(1) See non-GAAP financial measures for additional information relating to the calculation of this item.

 

WESBANCO, INC.

Consolidated Selected Financial Highlights

 Page 10 

(unaudited, dollars in thousands)

Quarter Ended

Dec. 31,

Sept. 30,

June 30,

Mar. 31,

Dec. 31,

Asset quality data

2016

2016

2016

2016

2015

Non-performing assets:

Troubled debt restructurings - accruing

$           7,646

$           8,605

$           8,979

$           9,550

$         11,548

Non-accrual loans:

Troubled debt restructurings

3,546

3,759

4,121

4,517

4,617

Other non-accrual loans

28,238

26,897

28,334

29,343

28,764

    Total non-accrual loans

31,784

30,656

32,455

33,860

33,381

    Total non-performing loans 

39,430

39,261

41,434

43,410

44,929

Other real estate and repossessed assets

8,346

9,794

4,481

5,329

5,825

Total non-performing assets

$         47,776

$         49,055

$         45,915

$         48,739

$         50,754

Past due loans (1):

Loans past due 30-89 days

$         16,029

$         17,569

$         10,392

$         11,888

$         11,005

Loans past due 90 days or more

3,739

2,392

2,263

4,186

3,126

Total past due loans

$         19,768

$         19,961

$         12,655

$         16,074

$         14,131

Criticized and classified loans (2):

Criticized loans

$         24,778

$         35,468

$         26,543

$         31,410

$         26,298

Classified loans

49,965

52,909

52,789

53,182

53,408

Total criticized and classified loans

$         74,743

$         88,377

$         79,332

$         84,592

$         79,706

Loans past due 30-89 days / total portfolio loans

0.26

%

0.28

%

0.20

%

0.23

%

0.22

%

Loans past due 90 days or more / total portfolio loans

0.06

0.04

0.04

0.08

0.06

Non-performing loans / total portfolio loans

0.63

0.63

0.80

0.85

0.89

Non-performing assets/total portfolio loans, other

real estate and repossessed assets

0.76

0.79

0.89

0.95

1.00

Non-performing assets / total assets

0.49

0.50

0.55

0.57

0.60

Criticized and classified loans / total portfolio loans

1.20

1.42

1.53

1.65

1.57

Allowance for loan losses

Allowance for loan losses

$         43,674

$         42,755

$         43,328

$         42,525

$         41,710

Provision for credit losses

2,128

2,214

1,811

2,324

2,585

Net loan and deposit account overdraft charge-offs

1,213

2,798

1,013

1,532

2,516

Annualized net loan charge-offs /average loans

0.08

%

0.20

%

0.08

%

0.12

%

0.20

%

Allowance for loan losses / total portfolio loans

0.70

%

0.69

%

0.84

%

0.83

%

0.82

%

Allowance for loan losses / non-performing loans

1.11

x

1.09

x

1.05

x

0.98

x

0.93

x

Allowance for loan losses / non-performing loans and

loans past due 

0.74

x

0.72

x

0.80

x

0.71

x

0.71

x

Quarter Ended

Dec. 31,

Sept. 30,

June 30,

Mar. 31,

Dec. 31,

2016

2016

2016

2016

2015

Capital ratios

Tier I leverage capital

9.81

%

10.90

%

9.71

%

9.46

%

9.38

%

Tier I risk-based capital

13.16

12.95

13.62

13.30

13.35

Total risk-based capital

14.18

13.95

14.40

14.06

14.11

Common equity tier 1 capital ratio (CET 1)

11.28

11.07

11.88

11.58

11.66

Average shareholders' equity to average assets

13.82

13.91

13.60

13.32

13.24

Tangible equity to tangible assets (3)

8.20

8.26

8.56

8.15

7.95

(1) Excludes non-performing loans.

(2) Criticized and classified loans may include loans that are also reported as non-performing or past due.

(3) See non-GAAP financial measures for additional information relating to the calculation of this ratio.

 

NON-GAAP FINANCIAL MEASURES

Page 11

The following non-GAAP financial measures used by WesBanco provide information useful to investors in understanding WesBanco's operating performance and trends, and facilitate comparisons with the performance of WesBanco's peers. The following tables summarize the non-GAAP financial measures derived from amounts reported in WesBanco's financial statements.

Three Months Ended

Year to Date 

Dec. 31,

Sept. 30,

June 30,

Mar. 31,

Dec. 31,

Dec. 31,

(unaudited, dollars in thousands, except shares and per share amounts)

2016

2016

2016

2016

2015

2016

2015

Return on average tangible equity:

Net income (annualized)

$               96,344

$           69,361

$           88,922

$           91,999

$           91,258

$       86,635

$        80,762

Plus: amortization of intangibles (annualized) (1)

3,451

2,164

1,822

1,908

2,091

2,339

2,038

Net income before amortization of intangibles (annualized)

99,795

71,525

90,744

93,907

93,349

88,974

82,800

Average total shareholders' equity

1,352,813

1,214,813

1,156,923

1,139,514

1,124,759

1,215,888

1,059,490

Less: average goodwill and other intangibles, net of def. tax liability

(585,529)

(500,752)

(487,085)

(487,210)

(488,677)

(516,840)

(442,215)

Average tangible equity

$             767,284

$         714,061

$         669,838

$         652,304

$         636,082

$     699,048

$      617,275

Return on average tangible equity

13.01%

10.02%

13.55%

14.40%

14.68%

12.73%

13.41%

Efficiency ratio:

Non-interest expense

$               58,298

$           57,601

$           47,360

$           45,343

$           46,894

$     208,680

$      193,923

Less: restructuring and merger-related expense

(2,684)

(9,883)

(694)

-

(48)

(13,261)

(11,082)

Non-interest expense excluding restructuring and merger-related expense

55,614

47,718

46,666

45,343

46,846

195,419

182,841

Net interest income on a fully taxable equivalent basis

74,256

64,481

62,219

62,276

63,121

263,232

246,014

Non-interest income

21,420

21,017

19,591

19,393

20,026

81,499

74,466

Net interest income on a fully taxable equivalent basis plus non-interest income

$               95,676

$           85,498

$           81,810

$           81,669

$           83,147

$     344,731

$      320,480

Efficiency Ratio

58.13%

55.81%

57.04%

55.52%

56.34%

56.69%

57.05%

Net Income, excluding after-tax merger-related expenses:

Net income 

$               24,218

$           17,435

$           22,109

$           22,874

$           23,002

$       86,635

$        80,762

Add: After-tax merger-related expenses (1)

1,745

6,424

451

-

31

8,619

7,203

Net income, excluding after-tax merger-related expenses

$               25,963

$           23,859

$           22,560

$           22,874

$           23,033

$       95,254

$        87,965

Net Income, excluding after-tax merger-related expenses per diluted share:

Net income per diluted share

$                   0.55

$               0.44

$               0.58

$               0.60

$               0.60

$           2.16

$            2.15

Add: After-tax merger-related expenses per diluted share (1)

0.04

0.16

0.01

-

-

0.21

0.19

Net income, excluding after-tax merger-related expenses per diluted share

$                   0.59

$               0.60

$               0.59

$               0.60

$               0.60

$           2.37

$            2.34

Period End

Dec. 31,

Sept. 30,

June 30,

Mar. 31,

Dec. 31,

2016

2016

2016

2016

2015

Tangible book value:

Total shareholders' equity

$          1,341,408

$      1,347,151

$      1,164,420

$      1,145,910

$      1,122,132

Less:  goodwill and other intangible assets, net of def. tax liability

(586,403)

(584,690)

(486,913)

(487,267)

(487,270)

Tangible equity

755,005

762,461

677,507

658,643

634,862

Common shares outstanding

43,931,715

43,860,883

38,411,343

38,362,534

38,459,635

Tangible book value

$                 17.19

$             17.38

$             17.64

$             17.17

$             16.51

Tangible equity to tangible assets:

Total shareholders' equity

$          1,341,408

$      1,347,151

$      1,674,420

$      1,145,910

$      1,122,132

Less:  goodwill and other intangible assets, net of def. tax liability

(586,403)

(584,690)

(486,913)

(497,267)

(487,270)

Tangible equity

755,005

762,461

677,507

658,643

634,862

Total assets

9,790,877

9,812,384

8,397,424

8,569,381

8,470,298

Less:  goodwill and other intangible assets, net of def. tax liability

(586,403)

(584,690)

(486,913)

(487,267)

(487,270)

Tangible assets

$          9,204,474

$      9,227,694

$      7,910,511

$      8,082,114

$      7,983,028

Tangible equity to tangible assets

8.20%

8.26%

8.56%

8.15%

7.95%

(1) Tax effected at 35%.

 

To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/wesbanco-announces-fourth-quarter-and-full-year-2016-net-income-300395979.html

SOURCE WesBanco, Inc.


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