WHEELING, W.Va., Jan. 28, 2019 /PRNewswire/ -- WesBanco, Inc. ("WesBanco") WSBC, a diversified, multi-state bank holding company, today announced net income and related earnings per share for the three and twelve months ended December 31, 2018. Net income for the three months ended December 31, 2018 was $43.9 million, with diluted earnings per share of $0.80, compared to $15.9 million and $0.36 per diluted share, respectively, for the fourth quarter of 2017. For the twelve months ended December 31, 2018, net income was $143.1 million, or $2.92 per diluted share, compared to $94.5 million, or $2.14 per diluted share, for the 2017 period. Net income excluding after-tax merger-related expenses and the 2017 net deferred tax asset revaluation, which resulted from last year's Federal tax reform legislation, for the three months ended December 31, 2018, increased 55.4% year-over-year to $45.0 million, or $0.82 per diluted share as compared to $0.66 per diluted share in the prior year quarter, an increase of 24.2% (non-GAAP measure). On the same basis, net income for the twelve months ended December 31, 2018 increased 45.7% year-over-year to $157.2 million, or $3.21 per diluted share versus $2.45 per diluted share in the prior year period, an increase of 31.0% (non-GAAP measure).
For the Three Months Ended December 31, | For the Twelve Months Ended December 31, | ||||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||||
(unaudited, dollars in thousands, | Net Income | Diluted | Net Income | Diluted | Net Income | Diluted | Net Income | Diluted | |||||||||
Net income (Non-GAAP)(1) | $ 45,025 | $ 0.82 | $ 28,972 | $ 0.66 | $ 157,221 | $ 3.21 | $ 107,876 | $ 2.45 | |||||||||
Less: Net deferred tax asset revaluation | - | - | (12,780) | (0.29) | - | - | (12,780) | (0.29) | |||||||||
Less: After tax merger-related expenses | (1,097) | (0.02) | (295) | (0.01) | (14,109) | (0.29) | (614) | (0.02) | |||||||||
Net income (GAAP) | $ 43,928 | $ 0.80 | $ 15,897 | $ 0.36 | $ 143,112 | $ 2.92 | $ 94,482 | $ 2.14 | |||||||||
(1) See non-GAAP financial measures for additional information relating to the calculation of these items. | |||||||||||||||||
On April 5, 2018, WesBanco consummated the merger with First Sentry Bancshares, Inc. ("FTSB"), a bank holding company headquartered in Huntington, WV with $0.7 billion in assets, excluding goodwill. In addition, on August 20, 2018, WesBanco consummated the merger with Farmers Capital Bank Corporation ("FFKT"), a bank holding company headquartered in Frankfort, KY with approximately $1.6 billion in assets, excluding goodwill. Financial results for both FTSB and FFKT have been included in WesBanco's results from their respective merger consummation dates.
Financial and operational highlights:
- Execution of well-defined long-term growth strategies combined with strong underlying fundamentals driving strong profitability
- Record net income during 2018 of $143.1 million, or $157.2 million when excluding merger-related costs
- 2018 net income was positively impacted by the passage of the "Tax Cuts and Jobs Act" in late-2017 which lowered the statutory Federal income tax rate for corporations to 21%, as compared to 35% in prior periods
- Year-to-date income before provisions for credit losses and income taxes increased 15.2% year-over-year, or 25.7% when excluding merger-related costs
- Strong core returns on average assets and tangible equity of 1.39% and 17.78%, respectively (non-GAAP measures)
- Sequential and year-over-year improvement in core net interest margin reflects the benefits of the FFKT and FTSB acquisitions and our core deposit funding advantage
- Solid expense management as demonstrated by a 184 basis point improvement in the year-to-date efficiency ratio to 54.6% (non-GAAP measure), despite the inclusion of FFKT's operating expenses since August 20, 2018
- Continued strength across key credit quality metrics reflective of strong legacy of credit and risk management
- Successful implementation of stated acquisition strategy to cross the $10 billion asset threshold
- Filled-in the southern edge of franchise
- Became a top ten financial institution in the state of Kentucky
"2018 was another successful year for WesBanco, as well as a year full of milestones," said Todd F. Clossin, President and Chief Executive Officer of WesBanco. "Solid execution and strong fundamentals drove record earnings of $143 million, or $157 million when excluding merger-related costs. We strengthened the franchise by expanding into new and diversified markets with strong demographics, and ensured top market share across our major markets. We remained diligent on expense management while continuing to make technology and staffing investments to support future growth – helping to drive our 2018 efficiency ratio to 54.6%. In addition, we stayed disciplined and balanced on lending decisions as our credit quality ratios have continued to improve to be at or near historic lows."
Mr. Clossin added, "We remain well-positioned for continued success due to our well-defined operational and growth strategies. Furthermore, we are excited about our opportunities for the upcoming year, and look forward to providing additional value to our customers and shareholders."
Balance Sheet
Portfolio loans of $7.7 billion, as of December 31, 2018, increased 20.7% when compared to the prior year period due to the acquisitions of FTSB and FFKT. Total organic loans were down 1.3% year-over-year, when excluding the consumer loan portfolio de-emphasis strategy, or down 1.7% in total. The year-over-year decline in total organic loan growth resulted from targeted reductions in the consumer portfolio to reduce its risk profile, lower home equity loan balances due to lower demand as a result of higher interest rates and tax changes, elevated levels of commercial real estate loans moving to an aggressive secondary financing market, and continued deleveraging by commercial customers reflective of the current operating environment and higher cash levels from tax reform. Total deposits increased 25.4% year-over-year to $8.8 billion due to the FTSB and FFKT acquisitions. Continuing to reflect the strength of our legacy footprint, total deposits, excluding CDs, increased 2.5% organically, driven by 5.8% organic growth in interest bearing and non-interest bearing demand deposits.
Credit Quality
Our underlying credit fundamentals continue to be reflective of our strong legacy of credit and risk management. During the fourth quarter of 2018, our credit quality ratios remained strong as we balanced disciplined loan origination growth in the current environment with our prudent lending standards. Our credit quality measures have been at or near historic lows over the last several periods, and, as such, variability from quarter to quarter may occur, which is not suggestive of a change in the direction of overall credit quality.
As of December 31, 2018, despite the addition of approximately $1.4 billion of portfolio loans from the acquisitions of FTSB and FFKT, non-performing loans and non-performing assets decreased year-over-year both on an absolute dollar basis and as a percentage of the portfolio. Criticized and classified loan balances decreased as a percentage of total loans year-over-year.
Further reflecting the continued high quality of the loan portfolio, on a year-to-date basis for 2018, the provision for credit losses decreased 22.3% year-over-year to $7.8 million, and annualized net loan charge-offs to average loans decreased 7 basis points year-over-year to 0.06%.
Net Interest Margin and Income
The net interest margin for the fourth quarter of 2018 increased 29 basis points year-over-year to 3.72%. The net interest margin benefited from increases in the Federal Reserve Board's target federal funds rate through the past year and a full quarter benefit from the higher margins on the acquired FFKT net assets, partially offset by higher funding costs as well as a flattening of the yield curve. Also impacting the year-over-year change in the net interest margin was a six basis point reduction related to the lower tax-equivalency of the state and local municipal tax-exempt securities resulting from the "Tax Cuts and Jobs Act". The increase in the cost of interest bearing liabilities was primarily due to higher rates for interest bearing public funds, higher tier money market accounts, and Federal Home Loan Bank and other borrowings. Further, reflecting the benefit of our legacy deposit footprint, the year-to-date deposit beta on the four federal funds rate increases since the year ago quarter was 17%, or only 12% when including the strong growth in non-interest bearing deposits. Lastly, accretion from acquisitions benefited the fourth quarter net interest margin by approximately 23 basis points, as compared to 6 basis points in the prior year period, and it was 14 basis points for 2018 versus 8 basis points during 2017.
Net interest income increased $28.6 million, or 39.1%, during the fourth quarter of 2018 as compared to the same quarter of 2017 due to a 25.5% increase in average total earning assets, primarily driven by the FTSB and FFKT acquisitions and related accretion from purchase accounting, as well as an overall higher net interest margin. For the year ended December 31, 2018, net interest income increased $56.9 million, or 19.6%, due to higher average total earning assets from the $2.2 billion in earning assets acquired from FTSB and FFKT and a larger investment portfolio, and the aforementioned higher net interest margin.
Non-Interest Income
For the fourth quarter of 2018, non-interest income of $26.6 million increased $3.6 million, or 15.8%, from the fourth quarter of 2017, driven by the FTSB and FFKT acquisitions. The associated larger customer deposit base and higher transaction volumes drove the year-over-year increases in electronic banking fees and service charges on deposits. Other income increased $0.8 million primarily due to an increase in payment processing fee income. Net securities losses of $1.3 million were primarily due to a market adjustment on the deferred compensation plan, while an offsetting reduction of $1.1 million is recorded in employee benefits expense.
For the twelve months ended December 31, 2018, non-interest income increased $11.4 million, or 12.9%. The primary drivers of this year-to-date increase were increased customer levels and transaction volumes from the two acquisitions, higher trust assets from a combination of the FFKT acquisition and organic growth, and higher mortgage banking income due to the strength of the residential mortgage lending program; partially offset by net securities losses as discussed above.
Non-Interest Expense
Total operating expenses continued to be well-controlled during the fourth quarter of 2018, despite the inclusion of FFKT's operating expenses since August 20th. The FFKT cost savings of 35% announced in April 2018 remain on track for 75% of the anticipated savings to be achieved during 2019, and 100% thereafter. Excluding merger-related expenses, non-interest expense increased $15.2 million, or 28.0%, compared to the prior year period, reflecting the two acquisitions. This year-over-year increase is primarily due to higher salaries and wages, employee benefits, net occupancy, and equipment costs associated with additional staffing and financial center locations from the two acquisitions. As mentioned above, the overall employee benefits increase was partially mitigated by a $1.1 million reduction in the deferred compensation plan obligation due to market declines. These increases were balanced by strong discretionary expense management as demonstrated by the 146 basis point year-over-year decrease in the efficiency ratio to 53.62% for the fourth quarter of 2018.
Excluding merger-related expenses in both years, non-interest expense during the twelve months of 2018 increased $27.4 million, or 12.5%, compared to the prior year period, reflecting the acquisition of both FTSB and FFKT, partially offset by strong discretionary expense management.
Provision for Income Taxes
The effective income tax rate and associated provision for income taxes for the fourth quarter of 2018 are reflective of the late-2017 passage of the "Tax Cuts and Jobs Act", lowering the statutory Federal income tax rate for corporations to 21%. During the fourth quarter, the effective tax rate was 19.37% as compared to 59.14% last year, which included the impact of the deferred tax revaluation adjustment, while the provision for income taxes decreased $12.4 million to $10.6 million, despite higher year-over-year pre-tax income.
Capital
WesBanco continues to maintain strong regulatory capital ratios as 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. At December 31, 2018, Tier I leverage was 10.74%, Tier I Risk-Based capital was 15.09%, Total Risk-Based capital was 15.99%, and the Common Equity Tier 1 capital ratio ("CET 1") was 13.14%. Tangible common equity also remained strong, increasing to 9.28% at period-end from 8.79% as of December 31, 2017. Record earnings achieved during 2017, strong regulatory capital and liquidity positions, and solid execution on well-defined long-term operational and growth strategies enabled WesBanco to increase the quarterly cash dividend by 11.5% to $0.29 per share during February 2018. This was the eleventh increase during the last eight years, representing a cumulative increase of 107%.
Conference Call and Webcast
WesBanco will host a conference call to discuss the Company's financial results for the fourth quarter of 2018 at 10:00 a.m. ET on Tuesday, January 29, 2019. 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 10126808. The replay will begin at approximately 12:00 p.m. ET on January 29, and end at 12 a.m. ET on February 12. An archive of the webcast will be available for one year on the Investor Relations section of the Company's website (www.wesbanco.com).
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, 2017 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, 2018, 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, that the businesses of WesBanco and FFKT may not be integrated successfully or such integration may take longer to accomplish than excepted; the expected cost savings and any revenue synergies from the merger of WesBanco and FFKT may not be fully realized within the expected timeframes; disruption from the merger of WesBanco and FFKT may make it more difficult to maintain relationships with clients, associates, or suppliers; 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; cyber-security breaches; 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.
About WesBanco, Inc.
Founded in 1870, WesBanco, Inc. (www.wesbanco.com) is a multi-state, bank holding company with total assets of approximately $12.5 billion (as of December 31, 2018). 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 approximately $4.3 billion of assets under management (as of December 31, 2018), and serves as registered investment advisor to a proprietary mutual fund family, the WesMark Funds. WesBanco's banking subsidiary, WesBanco Bank, Inc., operates 209 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.
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 Twelve Months Ended | |||||||||||||
STATEMENT OF INCOME | December 31, | December 31, | ||||||||||||
Interest and dividend income | 2018 | 2017 | % Change | 2018 | 2017 | % Change | ||||||||
Loans, including fees | $ 97,685 | $ 69,408 | 40.7 | $ 331,961 | $ 272,007 | 22.0 | ||||||||
Interest and dividends on securities: | ||||||||||||||
Taxable | 16,196 | 9,948 | 62.8 | 56,898 | 38,631 | 47.3 | ||||||||
Tax-exempt | 5,562 | 4,872 | 14.2 | 20,778 | 19,489 | 6.6 | ||||||||
Total interest and dividends on securities | 21,758 | 14,820 | 46.8 | 77,676 | 58,120 | 33.6 | ||||||||
Other interest income | 1,944 | 623 | 212.0 | 5,320 | 2,297 | 131.6 | ||||||||
Total interest and dividend income | 121,387 | 84,851 | 43.1 | 414,957 | 332,424 | 24.8 | ||||||||
Interest expense | ||||||||||||||
Interest bearing demand deposits | 4,000 | 2,039 | 96.2 | 13,144 | 6,452 | 103.7 | ||||||||
Money market deposits | 1,683 | 805 | 109.1 | 5,016 | 2,775 | 80.8 | ||||||||
Savings deposits | 452 | 189 | 139.2 | 1,225 | 745 | 64.4 | ||||||||
Certificates of deposit | 3,662 | 2,597 | 41.0 | 12,450 | 10,108 | 23.2 | ||||||||
Total interest expense on deposits | 9,797 | 5,630 | 74.0 | 31,835 | 20,080 | 58.5 | ||||||||
Federal Home Loan Bank borrowings | 6,191 | 3,682 | 68.1 | 23,333 | 13,290 | 75.6 | ||||||||
Other short-term borrowings | 1,221 | 489 | 149.7 | 3,717 | 1,442 | 157.8 | ||||||||
Subordinated debt and junior subordinated debt | 2,411 | 1,868 | 29.1 | 8,836 | 7,317 | 20.8 | ||||||||
Total interest expense | 19,620 | 11,669 | 68.1 | 67,721 | 42,129 | 60.7 | ||||||||
Net interest income | 101,767 | 73,182 | 39.1 | 347,236 | 290,295 | 19.6 | ||||||||
Provision for credit losses | 2,854 | 2,376 | 20.1 | 7,764 | 9,986 | (22.3) | ||||||||
Net interest income after provision for credit losses | 98,913 | 70,806 | 39.7 | 339,472 | 280,309 | 21.1 | ||||||||
Non-interest income | ||||||||||||||
Trust fees | 6,103 | 5,667 | 7.7 | 24,623 | 22,740 | 8.3 | ||||||||
Service charges on deposits | 7,387 | 5,278 | 40.0 | 23,670 | 20,532 | 15.3 | ||||||||
Electronic banking fees | 6,604 | 4,788 | 37.9 | 23,300 | 19,183 | 21.5 | ||||||||
Net securities brokerage revenue | 1,871 | 1,508 | 24.1 | 7,186 | 6,672 | 7.7 | ||||||||
Bank-owned life insurance | 1,312 | 1,123 | 16.8 | 6,427 | 4,794 | 34.1 | ||||||||
Mortgage banking income | 1,543 | 1,542 | 0.1 | 5,840 | 5,053 | 15.6 | ||||||||
Net securities (losses) / gains | (1,303) | 56 | (2,426.8) | (900) | 567 | (258.7) | ||||||||
Net (loss)/gain on other real estate owned and other assets | (117) | 649 | (118.0) | 524 | 658 | (20.4) | ||||||||
Other income | 3,161 | 2,323 | 36.1 | 9,606 | 8,641 | 11.2 | ||||||||
Total non-interest income | 26,561 | 22,934 | 15.8 | 100,276 | 88,840 | 12.9 | ||||||||
Non-interest expense | ||||||||||||||
Salaries and wages | 32,389 | 25,786 | 25.6 | 114,602 | 97,361 | 17.7 | ||||||||
Employee benefits | 7,298 | 6,263 | 16.5 | 30,079 | 29,933 | 0.5 | ||||||||
Net occupancy | 5,455 | 4,132 | 32.0 | 19,165 | 17,101 | 12.1 | ||||||||
Equipment | 4,667 | 3,983 | 17.2 | 17,207 | 16,026 | 7.4 | ||||||||
Marketing | 1,402 | 1,238 | 13.2 | 5,368 | 5,720 | (6.2) | ||||||||
FDIC insurance | 927 | 827 | 12.1 | 3,242 | 3,504 | (7.5) | ||||||||
Amortization of intangible assets | 2,762 | 1,204 | 129.4 | 6,980 | 4,940 | 41.3 | ||||||||
Restructuring and merger-related expense | 1,389 | 454 | 205.9 | 17,860 | 945 | 1,789.9 | ||||||||
Other operating expenses | 14,701 | 10,950 | 34.3 | 50,721 | 45,330 | 11.9 | ||||||||
Total non-interest expense | 70,990 | 54,837 | 29.5 | 265,224 | 220,860 | 20.1 | ||||||||
Income before provision for income taxes | 54,484 | 38,903 | 40.1 | 174,524 | 148,289 | 17.7 | ||||||||
Provision for income taxes | 10,556 | 23,006 | (54.1) | 31,412 | 53,807 | (41.6) | ||||||||
Net Income | $ 43,928 | $ 15,897 | 176.3 | $ 143,112 | $ 94,482 | 51.5 | ||||||||
Taxable equivalent net interest income | $ 103,246 | $ 75,805 | 36.2 | $ 352,760 | $ 300,789 | 17.3 | ||||||||
Per common share data | ||||||||||||||
Net income per common share - basic | $ 0.80 | $ 0.36 | 122.2 | $ 2.93 | $ 2.15 | 36.3 | ||||||||
Net income per common share - diluted | 0.80 | 0.36 | 122.2 | 2.92 | 2.14 | 36.4 | ||||||||
Net income per common share - diluted, excluding certain items (1)(2) | 0.82 | 0.66 | 24.2 | 3.21 | 2.45 | 31.0 | ||||||||
Dividends declared | 0.29 | 0.26 | 11.5 | 1.16 | 1.04 | 11.5 | ||||||||
Book value (period end) | 36.24 | 31.68 | 14.4 | 36.24 | 31.68 | 14.4 | ||||||||
Tangible book value (period end) (1) | 19.63 | 18.42 | 6.6 | 19.63 | 18.42 | 6.6 | ||||||||
Average common shares outstanding - basic | 54,598,142 | 44,036,416 | 24.0 | 48,889,041 | 44,003,208 | 11.1 | ||||||||
Average common shares outstanding - diluted | 54,706,691 | 44,109,767 | 24.0 | 49,022,990 | 44,075,293 | 11.2 | ||||||||
Period end common shares outstanding | 54,598,134 | 44,043,244 | 24.0 | 54,598,134 | 44,043,244 | 24.0 | ||||||||
(1) See non-GAAP financial measures for additional information relating to the calculation of this item. | ||||||||||||||
(2) Certain items excluded from the calculation consist of after-tax merger-related expenses and the net deferred tax asset revaluation. | ||||||||||||||
WESBANCO, INC. | |||||||||||||||||
Consolidated Selected Financial Highlights | Page 6 | ||||||||||||||||
(unaudited, dollars in thousands) | |||||||||||||||||
Selected ratios | |||||||||||||||||
For the Twelve Months Ended | |||||||||||||||||
December 31, | |||||||||||||||||
2018 | 2017 | % Change | |||||||||||||||
Return on average assets | 1.26 | % | 0.96 | % | 31.25 | % | |||||||||||
Return on average assets, excluding | |||||||||||||||||
after-tax merger-related expenses and | |||||||||||||||||
net deferred tax asset revaluation (1) | 1.39 | 1.09 | 27.52 | ||||||||||||||
Return on average equity | 8.68 | 6.83 | 27.09 | ||||||||||||||
Return on average equity, excluding | |||||||||||||||||
after-tax merger-related expenses and | |||||||||||||||||
net deferred tax asset revaluation (1) | 9.54 | 7.79 | 22.46 | ||||||||||||||
Return on average tangible equity (1) | 16.24 | 12.23 | 32.79 | ||||||||||||||
Return on average tangible equity, excluding | |||||||||||||||||
after-tax merger-related expenses and | |||||||||||||||||
net deferred tax asset revaluation (1) | 17.78 | 13.90 | 27.91 | ||||||||||||||
Yield on earning assets (2) | 4.19 | 3.93 | 6.62 | ||||||||||||||
Cost of interest bearing liabilities | 0.92 | 0.64 | 43.75 | ||||||||||||||
Net interest spread (2) | 3.27 | 3.29 | (0.61) | ||||||||||||||
Net interest margin (2) | 3.52 | 3.44 | 2.33 | ||||||||||||||
Efficiency (1) (2) | 54.60 | 56.44 | (3.26) | ||||||||||||||
Average loans to average deposits | 87.60 | 89.86 | (2.52) | ||||||||||||||
Annualized net loan charge-offs/average loans | 0.06 | 0.13 | (53.85) | ||||||||||||||
Effective income tax rate (3) | 18.00 | 36.29 | (50.40) | ||||||||||||||
For the Quarter Ended | |||||||||||||||||
Dec. 31, | Sept. 30, | June 30, | Mar. 31, | Dec. 31, | |||||||||||||
2018 | 2018 | 2018 | 2018 | 2017 | |||||||||||||
Return on average assets | 1.39 | % | 1.10 | % | 1.22 | % | 1.36 | % | 0.64 | % | |||||||
Return on average assets, excluding | |||||||||||||||||
after-tax merger-related expenses and | |||||||||||||||||
net deferred tax asset revaluation (1) | 1.42 | 1.39 | 1.38 | 1.37 | 1.16 | ||||||||||||
Return on average equity | 8.94 | 7.50 | 8.77 | 9.70 | 4.48 | ||||||||||||
Return on average equity, excluding | |||||||||||||||||
after-tax merger-related expenses and | |||||||||||||||||
net deferred tax asset revaluation (1) | 9.16 | 9.47 | 9.90 | 9.76 | 8.17 | ||||||||||||
Return on average tangible equity (1) | 17.67 | 14.25 | 15.87 | 17.10 | 8.05 | ||||||||||||
Return on average tangible equity, excluding | |||||||||||||||||
after-tax merger-related expenses and | |||||||||||||||||
net deferred tax asset revaluation (1) | 18.09 | 17.85 | 17.85 | 17.20 | 14.36 | ||||||||||||
Yield on earning assets (2) | 4.42 | 4.21 | 4.11 | 3.98 | 3.95 | ||||||||||||
Cost of interest bearing liabilities | 0.97 | 0.95 | 0.91 | 0.80 | 0.71 | ||||||||||||
Net interest spread (2) | 3.45 | 3.26 | 3.20 | 3.18 | 3.24 | ||||||||||||
Net interest margin (2) | 3.72 | 3.50 | 3.43 | 3.38 | 3.43 | ||||||||||||
Efficiency (1) (2) | 53.62 | 55.55 | 54.28 | 55.12 | 55.08 | ||||||||||||
Average loans to average deposits | 85.94 | 87.56 | 88.15 | 89.26 | 90.26 | ||||||||||||
Annualized net loan charge-offs (recoveries)/average loans | 0.14 | (0.02) | 0.03 | 0.07 | 0.16 | ||||||||||||
Effective income tax rate (3) | 19.37 | 16.71 | 18.11 | 17.28 | 59.14 | ||||||||||||
Trust assets, market value at period end | $ 4,269,961 | $ 4,743,894 | $ 4,044,207 | $ 4,027,358 | $ 3,943,519 | ||||||||||||
(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. | |||||||||||||||||
(3) The three and twelve months ended December 31, 2017 include a $12.8 million tax expense as a result of the net deferred tax asset revaluation. | |||||||||||||||||
WESBANCO, INC. | |||||||||||
Consolidated Selected Financial Highlights | Page 7 | ||||||||||
(unaudited, dollars in thousands, except shares) | % Change | ||||||||||
Balance sheets | December 31, | September 30, | December 31, 2018 | ||||||||
Assets | 2018 | 2017 | % Change | 2018 | to Sept. 30, 2018 | ||||||
Cash and due from banks | $ 124,650 | $ 97,746 | 27.5 | $ 184,826 | (32.6) | ||||||
Due from banks - interest bearing | 44,536 | 19,826 | 124.6 | 88,854 | (49.9) | ||||||
Securities: | |||||||||||
Equity securities, at fair value | 11,737 | 13,457 | (12.8) | 12,784 | (8.2) | ||||||
Available-for-sale debt securities, at fair value | 2,114,129 | 1,261,865 | 67.5 | 2,008,232 | 5.3 | ||||||
Held-to-maturity debt securities (fair values of $1,020,743; $1,023,784 | |||||||||||
and $1,014,361, respectively) | 1,020,934 | 1,009,500 | 1.1 | 1,025,538 | (0.4) | ||||||
Total securities | 3,146,800 | 2,284,822 | 37.7 | 3,046,554 | 3.3 | ||||||
Loans held for sale | 8,994 | 20,320 | (55.7) | 55,913 | (83.9) | ||||||
Portfolio loans: | |||||||||||
Commercial real estate | 3,853,695 | 2,994,448 | 28.7 | 3,906,221 | (1.3) | ||||||
Commercial and industrial | 1,265,460 | 1,125,327 | 12.5 | 1,292,073 | (2.1) | ||||||
Residential real estate | 1,611,607 | 1,353,301 | 19.1 | 1,598,477 | 0.8 | ||||||
Home equity | 599,331 | 529,196 | 13.3 | 604,106 | (0.8) | ||||||
Consumer | 326,188 | 339,169 | (3.8) | 325,546 | 0.2 | ||||||
Total portfolio loans, net of unearned income | 7,656,281 | 6,341,441 | 20.7 | 7,726,423 | (0.9) | ||||||
Allowance for loan losses | (48,948) | (45,284) | (8.1) | (48,902) | (0.1) | ||||||
Net portfolio loans | 7,607,333 | 6,296,157 | 20.8 | 7,677,521 | (0.9) | ||||||
Premises and equipment, net | 166,925 | 130,722 | 27.7 | 159,284 | 4.8 | ||||||
Accrued interest receivable | 38,853 | 29,728 | 30.7 | 39,465 | (1.6) | ||||||
Goodwill and other intangible assets, net | 918,850 | 589,264 | 55.9 | 928,083 | (1.0) | ||||||
Bank-owned life insurance | 225,317 | 192,589 | 17.0 | 223,995 | 0.6 | ||||||
Other assets | 176,374 | 155,004 | 13.8 | 194,984 | (9.5) | ||||||
Total Assets | $ 12,458,632 | $ 9,816,178 | 26.9 | $ 12,599,479 | (1.1) | ||||||
Liabilities | |||||||||||
Deposits: | |||||||||||
Non-interest bearing demand | $ 2,441,041 | $ 1,846,748 | 32.2 | $ 2,411,862 | 1.2 | ||||||
Interest bearing demand | 2,146,508 | 1,625,015 | 32.1 | 2,187,662 | (1.9) | ||||||
Money market | 1,142,925 | 1,024,856 | 11.5 | 1,178,950 | (3.1) | ||||||
Savings deposits | 1,645,549 | 1,269,912 | 29.6 | 1,649,684 | (0.3) | ||||||
Certificates of deposit | 1,455,610 | 1,277,057 | 14.0 | 1,513,600 | (3.8) | ||||||
Total deposits | 8,831,633 | 7,043,588 | 25.4 | 8,941,758 | (1.2) | ||||||
Federal Home Loan Bank borrowings | 1,054,174 | 948,203 | 11.2 | 1,131,253 | (6.8) | ||||||
Other short-term borrowings | 290,522 | 184,805 | 57.2 | 294,281 | (1.3) | ||||||
Subordinated debt and junior subordinated debt | 189,842 | 164,327 | 15.5 | 189,745 | 0.1 | ||||||
Total borrowings | 1,534,538 | 1,297,335 | 18.3 | 1,615,279 | (5.0) | ||||||
Accrued interest payable | 4,627 | 3,178 | 45.6 | 6,623 | (30.1) | ||||||
Other liabilities | 109,007 | 76,756 | 42.0 | 108,550 | 0.4 | ||||||
Total Liabilities | 10,479,805 | 8,420,857 | 24.5 | 10,672,210 | (1.8) | ||||||
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 | |||||||||||
2018 and 2017, respectively; 54,604,294, 44,043,244 and 54,604,294 shares | |||||||||||
issued, respectively; 54,598,134, 43,931,715 and 54,603,967 shares | 113,758 | 91,756 | 24.0 | 113,758 | - | ||||||
outstanding, respectively | |||||||||||
Capital surplus | 1,166,701 | 684,730 | 70.4 | 1,165,006 | 0.1 | ||||||
Retained earnings | 737,581 | 651,357 | 13.2 | 709,477 | 4.0 | ||||||
Treasury stock (6,160, 0 and 327 shares - at cost, respectively) | (274) | - | (100.0) | (15) | (1,726.7) | ||||||
Accumulated other comprehensive loss | (37,871) | (31,495) | (20.2) | (59,873) | 36.7 | ||||||
Deferred benefits for directors | (1,068) | (1,027) | (4.0) | (1,084) | 1.5 | ||||||
Total Shareholders' Equity | 1,978,827 | 1,395,321 | 41.8 | 1,927,269 | 2.7 | ||||||
Total Liabilities and Shareholders' Equity | $ 12,458,632 | $ 9,816,178 | 26.9 | $ 12,599,479 | (1.1) | ||||||
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, | |||||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||||||
Average | Average | Average | Average | Average | Average | Average | Average | ||||||||||||
Assets | Balance | Rate | Balance | Rate | Balance | Rate | Balance | Rate | |||||||||||
Due from banks - interest bearing | $ 169,189 | 2.21 | % | $ 18,593 | 0.97 | % | $ 80,535 | 2.24 | % | $ 13,811 | 0.85 | % | |||||||
Loans, net of unearned income (1) | 7,685,430 | 5.04 | 6,392,138 | 4.31 | 7,013,877 | 4.73 | 6,358,845 | 4.28 | |||||||||||
Securities: (2) | |||||||||||||||||||
Taxable | 2,317,542 | 2.80 | 1,615,700 | 2.46 | 2,109,191 | 2.70 | 1,591,149 | 2.43 | |||||||||||
Tax-exempt (3) | 818,456 | 3.44 | 723,569 | 4.14 | 768,304 | 3.42 | 723,019 | 4.15 | |||||||||||
Total securities | 3,135,998 | 2.96 | 2,339,269 | 2.98 | 2,877,495 | 2.89 | 2,314,168 | 2.96 | |||||||||||
Other earning assets | 52,691 | 7.62 | 47,659 | 4.85 | 55,302 | 6.37 | 47,548 | 4.58 | |||||||||||
Total earning assets (3) | 11,043,308 | 4.42 | % | 8,797,659 | 3.95 | % | 10,027,209 | 4.19 | % | 8,734,372 | 3.93 | % | |||||||
Other assets | 1,522,572 | 1,110,285 | 1,310,170 | 1,119,940 | |||||||||||||||
Total Assets | $ 12,565,880 | $ 9,907,944 | $ 11,337,379 | $ 9,854,312 | |||||||||||||||
Liabilities and Shareholders' Equity | |||||||||||||||||||
Interest bearing demand deposits | $ 2,183,732 | 0.73 | % | $ 1,645,812 | 0.49 | % | $ 1,929,876 | 0.68 | % | $ 1,613,451 | 0.40 | % | |||||||
Money market accounts | 1,153,806 | 0.58 | 1,003,186 | 0.32 | 1,049,059 | 0.48 | 1,012,660 | 0.27 | |||||||||||
Savings deposits | 1,647,144 | 0.11 | 1,257,094 | 0.06 | 1,454,525 | 0.08 | 1,248,985 | 0.06 | |||||||||||
Certificates of deposit | 1,486,471 | 0.98 | 1,311,331 | 0.79 | 1,396,446 | 0.89 | 1,383,807 | 0.73 | |||||||||||
Total interest bearing deposits | 6,471,153 | 0.60 | 5,217,423 | 0.43 | 5,829,906 | 0.55 | 5,258,903 | 0.38 | |||||||||||
Federal Home Loan Bank borrowings | 1,069,944 | 2.30 | 961,164 | 1.52 | 1,121,108 | 2.08 | 965,795 | 1.38 | |||||||||||
Other borrowings | 301,813 | 1.60 | 213,069 | 0.91 | 260,388 | 1.43 | 187,298 | 0.77 | |||||||||||
Subordinated debt and junior subordinated debt | 189,769 | 5.04 | 164,285 | 4.51 | 176,866 | 5.00 | 164,156 | 4.46 | |||||||||||
Total interest bearing liabilities | 8,032,679 | 0.97 | % | 6,555,941 | 0.71 | % | 7,388,268 | 0.92 | % | 6,576,152 | 0.64 | % | |||||||
Non-interest bearing demand deposits | 2,472,076 | 1,864,776 | 2,177,142 | 1,817,782 | |||||||||||||||
Other liabilities | 111,595 | 80,964 | 123,544 | 76,443 | |||||||||||||||
Shareholders' equity | 1,949,530 | 1,406,263 | 1,648,425 | 1,383,935 | |||||||||||||||
Total Liabilities and Shareholders' Equity | $ 12,565,880 | $ 9,907,944 | $ 11,337,379 | $ 9,854,312 | |||||||||||||||
Taxable equivalent net interest spread | 3.45 | % | 3.24 | % | 3.27 | % | 3.29 | % | |||||||||||
Taxable equivalent net interest margin | 3.72 | % | 3.43 | % | 3.52 | % | 3.44 | % | |||||||||||
(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 $1.2 million for the three months ended December 31, 2018 and 2017, and $3.4 million and $3.6 million for | |||||||||||||||||||
the years ended December 31, 2018 and 2017, respectively. | |||||||||||||||||||
Additionally, loan accretion included in interest income on loans acquired from prior acquisitions was $5.9 and $1.0 million for the three months ended December 31, 2018 and 2017, | |||||||||||||||||||
respectively, and $11.7 million and $5.7 million for the years ended December 31, 2018 and 2017, respectively. | |||||||||||||||||||
Accretion on interest bearing liabilities acquired from the prior acquisitions was $0.5 million and $0.3 million for the three months ended December 31, 2018 and 2017, respectively, | |||||||||||||||||||
and $2.0 million and $1.4 million for the years ended December 31, 2018 and 2017, 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 21% for 2018 and 35% for each prior 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 | 2018 | 2018 | 2018 | 2018 | 2017 | |||||||
Loans, including fees | $ 97,685 | $ 86,605 | $ 78,538 | $ 69,237 | $ 69,408 | |||||||
Interest and dividends on securities: | ||||||||||||
Taxable | 16,196 | 14,964 | 14,194 | 11,543 | 9,948 | |||||||
Tax-exempt | 5,562 | 5,326 | 5,055 | 4,834 | 4,872 | |||||||
Total interest and dividends on securities | 21,758 | 20,290 | 19,249 | 16,377 | 14,820 | |||||||
Other interest income | 1,944 | 1,498 | 1,101 | 803 | 623 | |||||||
Total interest and dividend income | 121,387 | 108,393 | 98,888 | 86,417 | 84,851 | |||||||
Interest expense | ||||||||||||
Interest bearing demand deposits | 4,000 | 3,501 | 3,150 | 2,524 | 2,039 | |||||||
Money market deposits | 1,683 | 1,360 | 1,093 | 878 | 805 | |||||||
Savings deposits | 452 | 352 | 227 | 189 | 189 | |||||||
Certificates of deposit | 3,662 | 3,276 | 2,977 | 2,536 | 2,597 | |||||||
Total interest expense on deposits | 9,797 | 8,489 | 7,447 | 6,127 | 5,630 | |||||||
Federal Home Loan Bank borrowings | 6,191 | 6,691 | 5,953 | 4,498 | 3,682 | |||||||
Other short-term borrowings | 1,221 | 965 | 973 | 558 | 489 | |||||||
Subordinated debt and junior subordinated debt | 2,411 | 2,315 | 2,168 | 1,942 | 1,868 | |||||||
Total interest expense | 19,620 | 18,460 | 16,541 | 13,125 | 11,669 | |||||||
Net interest income | 101,767 | 89,933 | 82,347 | 73,292 | 73,182 | |||||||
Provision for credit losses | 2,854 | 1,035 | 1,708 | 2,168 | 2,376 | |||||||
Net interest income after provision for credit losses | 98,913 | 88,898 | 80,639 | 71,124 | 70,806 | |||||||
Non-interest income | ||||||||||||
Trust fees | 6,103 | 6,265 | 5,752 | 6,503 | 5,667 | |||||||
Service charges on deposits | 7,387 | 6,313 | 5,146 | 4,822 | 5,278 | |||||||
Electronic banking fees | 6,604 | 6,139 | 5,728 | 4,829 | 4,788 | |||||||
Net securities brokerage revenue | 1,871 | 1,836 | 1,809 | 1,670 | 1,508 | |||||||
Bank-owned life insurance | 1,312 | 1,232 | 1,128 | 2,756 | 1,123 | |||||||
Mortgage banking income | 1,543 | 1,521 | 1,670 | 1,004 | 1,542 | |||||||
Net securities(losses)/gains | (1,303) | 84 | 358 | (39) | 56 | |||||||
Net (loss)/gain on other real estate owned and other assets | (117) | 150 | 229 | 262 | 649 | |||||||
Other income | 3,161 | 2,684 | 1,588 | 2,173 | 2,323 | |||||||
Total non-interest income | 26,561 | 26,224 | 23,408 | 23,980 | 22,934 | |||||||
Non-interest expense | ||||||||||||
Salaries and wages | 32,389 | 30,335 | 26,872 | 25,006 | 25,786 | |||||||
Employee benefits | 7,298 | 7,905 | 7,965 | 6,912 | 6,263 | |||||||
Net occupancy | 5,455 | 4,957 | 4,103 | 4,656 | 4,132 | |||||||
Equipment | 4,667 | 4,488 | 4,095 | 3,949 | 3,983 | |||||||
Marketing | 1,402 | 1,446 | 1,405 | 1,116 | 1,238 | |||||||
FDIC insurance | 927 | 789 | 868 | 658 | 827 | |||||||
Amortization of intangible assets | 2,762 | 1,821 | 1,312 | 1,086 | 1,204 | |||||||
Restructuring and merger-related expense | 1,389 | 10,811 | 5,412 | 245 | 454 | |||||||
Other operating expenses | 14,701 | 13,568 | 11,511 | 10,943 | 10,950 | |||||||
Total non-interest expense | 70,990 | 76,120 | 63,543 | 54,571 | 54,837 | |||||||
Income before provision for income taxes | 54,484 | 39,002 | 40,504 | 40,533 | 38,903 | |||||||
Provision for income taxes | 10,556 | 6,516 | 7,335 | 7,004 | 23,006 | |||||||
Net Income | $ 43,928 | $ 32,486 | $ 33,169 | $ 33,529 | $ 15,897 | |||||||
Taxable equivalent net interest income | $ 103,246 | $ 91,348 | $ 83,691 | $ 74,577 | $ 75,805 | |||||||
Per common share data | ||||||||||||
Net income per common share - basic | $ 0.80 | $ 0.65 | $ 0.71 | $ 0.76 | $ 0.36 | |||||||
Net income per common share - diluted | $ 0.80 | $ 0.64 | $ 0.71 | $ 0.76 | $ 0.36 | |||||||
Net income per common share - diluted, excluding certain items (1)(2) | $ 0.82 | $ 0.81 | $ 0.80 | $ 0.76 | $ 0.66 | |||||||
Dividends declared | $ 0.29 | $ 0.29 | $ 0.29 | $ 0.29 | $ 0.26 | |||||||
Book value (period end) | $ 36.24 | $ 35.30 | $ 32.68 | $ 31.84 | $ 31.68 | |||||||
Tangible book value (period end) (1) | $ 19.63 | $ 18.54 | $ 18.59 | $ 18.56 | $ 18.42 | |||||||
Average common shares outstanding - basic | 54,598,142 | 50,277,847 | 46,498,305 | 44,050,701 | 44,036,416 | |||||||
Average common shares outstanding - diluted | 54,706,691 | 50,432,112 | 46,639,780 | 44,168,242 | 44,109,767 | |||||||
Period end common shares outstanding | 54,598,134 | 54,603,967 | 46,643,250 | 44,060,957 | 44,043,244 | |||||||
Full time equivalent employees | 2,388 | 2,404 | 2,040 | 1,939 | 1,940 | |||||||
(1) See non-GAAP financial measures for additional information relating to the calculation of this item. | ||||||||||||
(2) Certain items excluded from the calculation consist of after-tax merger-related expenses and the net deferred tax asset revaluation. | ||||||||||||
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 | 2018 | 2018 | 2018 | 2018 | 2017 | ||||||||
Non-performing assets: | |||||||||||||
Troubled debt restructurings - accruing | $ 5,744 | $ 6,338 | $ 6,460 | $ 6,858 | $ 6,571 | ||||||||
Non-accrual loans: | |||||||||||||
Troubled debt restructurings | 2,855 | 2,036 | 2,514 | 2,397 | 2,865 | ||||||||
Other non-accrual loans | 27,845 | 29,238 | 29,467 | 29,989 | 33,960 | ||||||||
Total non-accrual loans | 30,700 | 31,274 | 31,981 | 32,386 | 36,825 | ||||||||
Total non-performing loans | 36,444 | 37,612 | 38,441 | 39,244 | 43,396 | ||||||||
Other real estate and repossessed assets | 7,265 | 6,877 | 4,384 | 4,067 | 5,297 | ||||||||
Total non-performing assets | $ 43,709 | $ 44,489 | $ 42,825 | $ 43,311 | $ 48,693 | ||||||||
Past due loans (1): | |||||||||||||
Loans past due 30-89 days | $ 19,569 | $ 18,016 | $ 13,357 | $ 14,536 | $ 11,172 | ||||||||
Loans past due 90 days or more | 4,077 | 2,451 | 1,881 | 1,579 | 2,726 | ||||||||
Total past due loans | $ 23,646 | $ 20,467 | $ 15,238 | $ 16,115 | $ 13,898 | ||||||||
Criticized and classified loans (2): | |||||||||||||
Criticized loans | $ 51,710 | $ 46,370 | $ 34,045 | $ 33,785 | $ 36,092 | ||||||||
Classified loans | 31,244 | 31,437 | 38,982 | 34,566 | 37,858 | ||||||||
Total criticized and classified loans | $ 82,954 | $ 77,807 | $ 73,027 | $ 68,351 | $ 73,950 | ||||||||
Loans past due 30-89 days / total portfolio loans | 0.26 | % | 0.23 | % | 0.20 | % | 0.23 | % | 0.18 | % | |||
Loans past due 90 days or more / total portfolio loans | 0.05 | 0.03 | 0.03 | 0.02 | 0.04 | ||||||||
Non-performing loans / total portfolio loans | 0.48 | 0.49 | 0.57 | 0.62 | 0.68 | ||||||||
Non-performing assets/total portfolio loans, other | |||||||||||||
real estate and repossessed assets | 0.57 | 0.58 | 0.63 | 0.68 | 0.77 | ||||||||
Non-performing assets / total assets | 0.35 | 0.35 | 0.39 | 0.42 | 0.50 | ||||||||
Criticized and classified loans / total portfolio loans | 1.08 | 1.01 | 1.08 | 1.08 | 1.17 | ||||||||
Allowance for loan losses | |||||||||||||
Allowance for loan losses | $ 48,948 | $ 48,902 | $ 47,638 | $ 46,334 | $ 45,284 | ||||||||
Provision for credit losses | 2,854 | 1,035 | 1,708 | 2,168 | 2,376 | ||||||||
Net loan and deposit account overdraft charge-offs | 2,750 | (306) | 425 | 1,063 | 2,652 | ||||||||
Annualized net loan charge-offs /average loans | 0.14 | % | (0.02) | % | 0.02 | % | 0.07 | % | 0.16 | % | |||
Allowance for loan losses / total portfolio loans | 0.64 | % | 0.63 | % | 0.70 | % | 0.73 | % | 0.71 | % | |||
Allowance for loan losses / non-performing loans | 1.34 | x | 1.30 | x | 1.24 | x | 1.18 | x | 1.04 | x | |||
Allowance for loan losses / non-performing loans and | |||||||||||||
loans past due | 0.81 | x | 0.84 | x | 0.89 | x | 0.84 | x | 0.79 | x | |||
Quarter Ended | |||||||||||||
Dec. 31, | Sept. 30, | June 30, | Mar. 31, | Dec. 31, | |||||||||
2018 | 2018 | 2018 | 2018 | 2017 | |||||||||
Capital ratios | |||||||||||||
Tier I leverage capital | 10.74 | % | 11.22 | % | 10.21 | % | 10.56 | % | 10.39 | % | |||
Tier I risk-based capital | 15.09 | 14.32 | 14.26 | 14.31 | 14.12 | ||||||||
Total risk-based capital | 15.99 | 15.20 | 15.26 | 15.35 | 15.16 | ||||||||
Common equity tier 1 capital ratio (CET 1) | 13.14 | 12.41 | 12.38 | 12.33 | 12.14 | ||||||||
Average shareholders' equity to average assets | 15.51 | 14.65 | 13.89 | 14.02 | 14.19 | ||||||||
Tangible equity to tangible assets (3) | 9.28 | 8.66 | 8.43 | 8.46 | 8.79 | ||||||||
(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 | |||||||||||||||
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) | 2018 | 2018 | 2018 | 2018 | 2017 | 2018 | 2017 | ||||||||
Return on average assets, excluding after-tax merger-related expenses and net deferred tax asset revaluation: | |||||||||||||||
Net income (annualized) | $ 174,280 | $ 128,886 | $ 133,039 | $ 135,979 | $ 63,068 | $ 143,112 | $ 94,482 | ||||||||
Plus: after-tax merger-related expenses (annualized) (1) | 4,353 | 33,885 | 17,150 | 784 | 1,170 | 14,109 | 614 | ||||||||
Plus: net deferred tax asset revaluation (annualized) | - | - | - | - | 50,703 | - | 12,780 | ||||||||
Net income excluding after-tax merger-related expenses and net deferred tax asset revaluation (annualized) | 178,633 | 162,771 | 150,189 | 136,763 | 114,941 | 157,221 | 107,876 | ||||||||
Average total assets | $ 12,565,880 | $ 11,738,796 | $ 10,918,731 | $ 9,993,364 | $ 9,907,944 | $ 11,337,379 | $ 9,854,312 | ||||||||
Return on average tangible assets, excluding after-tax merger-related expenses and net deferred tax asset revaluation | 1.42% | 1.39% | 1.38% | 1.37% | 1.16% | 1.39% | 1.09% | ||||||||
Return on average equity, excluding after-tax merger-related expenses and net deferred tax asset revaluation: | |||||||||||||||
Net income (annualized) | $ 174,280 | $ 128,886 | $ 133,039 | $ 135,979 | $ 63,068 | $ 143,112 | $ 94,482 | ||||||||
Plus: after-tax merger-related expenses (annualized) (1) | 4,353 | 33,885 | 17,150 | 784 | 1,170 | 14,109 | 614 | ||||||||
Plus: net deferred tax asset revaluation (annualized) | - | - | - | - | 50,703 | - | 12,780 | ||||||||
Net income excluding after-tax merger-related expenses and net deferred tax asset revaluation (annualized) | 178,633 | 162,771 | 150,189 | 136,763 | 114,941 | 157,221 | 107,876 | ||||||||
Average total shareholders' equity | 1,949,530 | 1,719,489 | 1,517,036 | 1,401,271 | 1,406,263 | 1,648,425 | 1,383,935 | ||||||||
Return on average tangible equity, excluding after-tax merger-related expenses and net deferred tax asset revaluation | 9.16% | 9.47% | 9.90% | 9.76% | 8.17% | 9.54% | 7.79% | ||||||||
Return on average tangible equity: | |||||||||||||||
Net income (annualized) | $ 174,280 | $ 128,886 | $ 133,039 | $ 135,979 | $ 63,068 | $ 143,112 | $ 94,482 | ||||||||
Plus: amortization of intangibles (annualized) (1) | 8,657 | 5,707 | 4,156 | 3,479 | 3,104 | 5,514 | 3,211 | ||||||||
Net income before amortization of intangibles (annualized) | 182,937 | 134,593 | 137,195 | 139,458 | 66,172 | 148,626 | 97,693 | ||||||||
Average total shareholders' equity | 1,949,530 | 1,719,489 | 1,517,036 | 1,401,271 | 1,406,263 | 1,648,425 | 1,383,935 | ||||||||
Less: average goodwill and other intangibles, net of def. tax liability | (914,214) | (775,267) | (652,318) | (585,711) | (584,227) | (732,978) | (584,885) | ||||||||
Average tangible equity | $ 1,035,316 | $ 944,222 | $ 864,718 | $ 815,560 | $ 822,036 | $ 915,447 | $ 799,050 | ||||||||
Return on average tangible equity | 17.67% | 14.25% | 15.87% | 17.10% | 8.05% | 16.24% | 12.23% | ||||||||
Return on average tangible equity, excluding after-tax merger-related expenses and net deferred tax asset revaluation: | |||||||||||||||
Net income (annualized) | $ 174,280 | $ 128,886 | $ 133,039 | $ 135,979 | $ 63,068 | $ 143,112 | $ 94,482 | ||||||||
Plus: after-tax merger-related expenses (annualized) (1) | 4,353 | 33,885 | 17,150 | 784 | 1,170 | 14,109 | 614 | ||||||||
Plus: net deferred tax asset revaluation (annualized) | - | - | - | - | 50,703 | - | 12,780 | ||||||||
Plus: amortization of intangibles (annualized) (1) | 8,657 | 5,707 | 4,156 | 3,479 | 3,104 | 5,514 | 3,211 | ||||||||
Net income before amortization of intangibles and excluding | |||||||||||||||
after-tax merger-related expenses and net deferred tax asset revaluation (annualized) | 187,290 | 168,478 | 154,345 | 140,242 | 118,045 | 162,735 | 111,087 | ||||||||
Average total shareholders' equity | 1,949,530 | 1,719,489 | 1,517,036 | 1,401,271 | 1,406,263 | 1,648,425 | 1,383,935 | ||||||||
Less: average goodwill and other intangibles, net of def. tax liability | (914,214) | (775,267) | (652,318) | (585,711) | (584,227) | (732,978) | (584,885) | ||||||||
Average tangible equity | $ 1,035,316 | $ 944,222 | $ 864,718 | $ 815,560 | $ 822,036 | $ 915,447 | $ 799,050 | ||||||||
Return on average tangible equity, excluding after-tax merger-related expenses and net deferred tax asset revaluation | 18.09% | 17.85% | 17.85% | 17.20% | 14.36% | 17.78% | 13.90% | ||||||||
Efficiency ratio: | |||||||||||||||
Non-interest expense | $ 70,990 | $ 76,120 | $ 63,543 | $ 54,571 | $ 54,837 | $ 265,224 | $ 220,860 | ||||||||
Less: restructuring and merger-related expense | (1,389) | (10,811) | (5,412) | (245) | (454) | (17,860) | (945) | ||||||||
Non-interest expense excluding restructuring and merger-related expense | 69,601 | 65,309 | 58,131 | 54,326 | 54,383 | 247,364 | 219,915 | ||||||||
Net interest income on a fully taxable equivalent basis | 103,246 | 91,348 | 83,691 | 74,577 | 75,805 | 352,760 | 300,789 | ||||||||
Non-interest income | 26,561 | 26,224 | 23,408 | 23,980 | 22,934 | 100,276 | 88,840 | ||||||||
Net interest income on a fully taxable equivalent basis plus non-interest income | $ 129,807 | $ 117,572 | $ 107,099 | $ 98,557 | $ 98,739 | $ 453,036 | $ 389,629 | ||||||||
Efficiency Ratio | 53.62% | 55.55% | 54.28% | 55.12% | 55.08% | 54.60% | 56.44% | ||||||||
Net income, excluding net deferred tax asset revaluation and after-tax merger-related expenses: | |||||||||||||||
Net income | $ 43,928 | $ 32,486 | $ 33,169 | $ 33,529 | $ 15,897 | $ 143,112 | $ 94,482 | ||||||||
Add: Net deferred tax asset revaluation | - | - | - | - | 12,780 | - | 12,780 | ||||||||
Add: After-tax merger-related expenses (1) | 1,097 | 8,541 | 4,276 | 193 | 295 | 14,109 | 614 | ||||||||
Net income, excluding net deferred tax asset revaluation and after-tax merger-related expenses | $ 45,025 | $ 41,027 | $ 37,445 | $ 33,722 | $ 28,972 | $ 157,221 | $ 107,876 | ||||||||
Net Income, excluding net deferred tax asset revaluation and after-tax merger-related expenses per diluted share: | |||||||||||||||
Net income per diluted share | $ 0.80 | $ 0.64 | $ 0.71 | $ 0.76 | $ 0.36 | $ 2.92 | $ 2.14 | ||||||||
Add: Net deferred tax asset revaluation per diluted share | - | - | - | - | 0.29 | - | 0.29 | ||||||||
Add: After-tax merger-related expenses per diluted share (1) | 0.02 | 0.17 | 0.09 | - | 0.01 | 0.29 | 0.02 | ||||||||
Net income, excluding net deferred tax asset revaluation and after-tax merger-related expenses per diluted share | $ 0.82 | $ 0.81 | $ 0.80 | $ 0.76 | $ 0.66 | $ 3.21 | $ 2.45 | ||||||||
Period End | |||||||||||||||
Dec. 31, | Sept. 30, | June 30, | Mar. 31, | Dec. 31, | |||||||||||
2018 | 2018 | 2018 | 2018 | 2017 | |||||||||||
Tangible book value per share: | |||||||||||||||
Total shareholders' equity | $ 1,978,827 | $ 1,927,269 | $ 1,524,106 | $ 1,403,026 | $ 1,395,321 | ||||||||||
Less: goodwill and other intangible assets, net of def. tax liability | (906,887) | (915,022) | (657,111) | (585,316) | (583,903) | ||||||||||
Tangible equity | 1,071,940 | 1,012,247 | 866,995 | 817,711 | 811,418 | ||||||||||
Common shares outstanding | 54,598,134 | 54,603,967 | 46,643,250 | 44,060,957 | 44,043,244 | ||||||||||
Tangible book value per share | $ 19.63 | $ 18.54 | $ 18.59 | $ 18.56 | $ 18.42 | ||||||||||
Tangible equity to tangible assets: | |||||||||||||||
Total shareholders' equity | $ 1,978,827 | $ 1,927,269 | $ 1,524,106 | $ 1,403,026 | $ 1,395,321 | ||||||||||
Less: goodwill and other intangible assets, net of def. tax liability | (906,887) | (915,022) | (657,111) | (585,316) | (583,903) | ||||||||||
Tangible equity | 1,071,940 | 1,012,247 | 866,995 | 817,711 | 811,418 | ||||||||||
Total assets | 12,458,632 | 12,599,479 | 10,946,584 | 10,245,419 | 9,816,178 | ||||||||||
Less: goodwill and other intangible assets, net of def. tax liability | (906,887) | (915,022) | (657,111) | (585,316) | (583,903) | ||||||||||
Tangible assets | $ 11,551,745 | $ 11,684,457 | $ 10,289,473 | $ 9,660,103 | $ 9,232,275 | ||||||||||
Tangible equity to tangible assets | 9.28% | 8.66% | 8.43% | 8.46% | 8.79% | ||||||||||
(1) Tax effected at 21% for the periods in 2018 and 35% for all prior periods. | |||||||||||||||
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SOURCE WesBanco, Inc.
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