-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, HYdDSbsZVlqhgbfRI4FWkvNAsPszkQocdgD6E5ztaDZOMXQWGp6P7gz4CWHa+FrO XfMWHt4RUq9hxfBIP4jmQQ== 0000203596-98-000011.txt : 19980518 0000203596-98-000011.hdr.sgml : 19980518 ACCESSION NUMBER: 0000203596-98-000011 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 19980331 FILED AS OF DATE: 19980515 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: WESBANCO INC CENTRAL INDEX KEY: 0000203596 STANDARD INDUSTRIAL CLASSIFICATION: NATIONAL COMMERCIAL BANKS [6021] IRS NUMBER: 550571723 STATE OF INCORPORATION: WV FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 000-08467 FILM NUMBER: 98625446 BUSINESS ADDRESS: STREET 1: 1 BANK PLAZA CITY: WHEELING STATE: WV ZIP: 26003 BUSINESS PHONE: 3042349000 MAIL ADDRESS: STREET 1: ONE BANK PLZ CITY: WHEELING STATE: WV ZIP: 26003 10-Q 1 WESBANCO 10-Q 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q (Mark One) X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES --- AND EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 1998 --------------------------------------------- OR ___ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ____________ to ____________ Commission File Number 0-8467 --------- WESBANCO, INC. ------------------------------------------------------ (Exact name of registrant as specified in its charter) West Virginia 55-0571723 - ------------------------------- ----------------------------------- (State or other jurisdiction of (I.R.S. Employer Identification No.) incorporation or organization) 1 Bank Plaza, Wheeling, WV 26003 - ---------------------------------------- ---------- (Address of principal executive offices) (Zip Code) 304-234-9000 ---------------------------------------------------- (Registrant's telephone number, including area code) Not Applicable ---------------------------------------------------- (Former name, former address and former fiscal year, if changed since last report) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or, for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No ___ --- APPLICABLE ONLY TO CORPORATE ISSUERS: Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date. WesBanco had 20,886,408 shares outstanding at April 30, 1998. 2 PART 1 - FINANCIAL INFORMATION - ------------------------------- Consolidated Balance Sheets at March 31, 1998 and December 31, 1997, and Consolidated Statemets of Income, Consolidated Statements of Changes in Shareholders' Equity and Consolidated Statements of Cash Flows for the three months ended March 31, 1998 and 1997 are set forth on the following pages. On March 31, 1998, WesBanco consummated its business combination with Commercial BancShares. All previously presented financial information has been restated to include Commercial BancShares. For further information see Footnote 2. In the opinion of management of the Registrant, all adjustments, consisting of normal recurring accruals, necessary for a fair presentation of the financial information referred to above for such periods, have been made. The results of operations for the three months ended March 31, 1998 are not necessarily indicative of what results may be attained for the entire year. For further information, refer to the 1997 Annual Report to Shareholders which includes consolidated financial statements and footnotes thereto and WesBanco, Inc.'s Annual Report on Form 10-K for the year ended December 31, 1997. 3 WESBANCO, INC. CONSOLIDATED BALANCE SHEET - ------------------------------------------------------------------------------ (Unaudited, dollars in thousands, except per share amounts) March 31, December 31, 1998 1997 --------- ------------ ASSETS Cash and due from banks $ 63,133 $ 73,412 Due from banks - interest bearing 6,541 1,515 Federal funds sold 60,450 86,363 Securities: Available for sale, carried at market value 471,834 383,010 Held to maturity (market value of $252,952 and $249,165, respectively) 248,435 246,208 ---------- --------- Total securities 720,269 629,218 ---------- --------- Loans (net of unearned income of $1,109 and $1,495, respectively) 1,347,159 1,341,901 Allowance for loan losses (20,225) (20,261) ---------- --------- Net loans 1,326,934 1,321,640 ---------- --------- Bank premises and equipment - net 46,263 45,068 Accrued interest receivable 18,340 15,579 Other assets 38,811 38,748 ---------- ---------- Total Assets $2,280,741 $2,211,543 ========== ========== LIABILITIES Deposits: Non-interest bearing demand $ 219,638 $ 205,399 Interest bearing demand 464,716 432,050 Savings 367,041 366,572 Certificates of deposit 790,612 775,846 ---------- ---------- Total deposits 1,842,007 1,779,867 ---------- ---------- Federal funds purchased and repurchase agreements 89,463 93,342 Other short-term borrowings 30,213 26,927 Accrued interest payable 7,270 7,224 Other liabilities 18,227 16,188 ---------- ---------- Total Liabilities 1,987,180 1,923,548 ---------- ---------- SHAREHOLDERS' EQUITY Preferred stock, no par value, 1,000,000 shares authorized; none outstanding - - Common stock, $2.0833 par value; 25,000,000 shares authorized; 20,997,093 and 20,666,185 shares issued, respectively 43,743 43,055 Capital surplus 60,631 57,997 Retained earnings 190,633 187,424 Treasury stock at cost(107,686 and 56,381 shares, respectively) (3,261) (1,675) Other comprehensive income (market value adjustment) 2,406 1,783 Deferred benefits for employees and directors (591) (589) ---------- ---------- Total Shareholders' Equity 293,561 287,995 ---------- ---------- Total Liabilities and Shareholders' Equity $2,280,741 $2,211,543 ========== ========== The accompanying Notes to Consolidated Financial Statements are an integral part of these financial statements. 4 WESBANCO, INC. CONSOLIDATED STATEMENT OF INCOME* - ------------------------------------------------------------------------------ (Unaudited, dollars in thousands, except per share amounts) For the three months ended March 31, -------------------------- 1998 1997 INTEREST INCOME ----------- ---------- Interest and fees on loans $ 29,650 $ 28,938 Interest on investment securities: Taxable 7,709 6,529 Tax-exempt 2,308 2,277 ---------- ---------- Total investment income 10,017 8,806 Other interest income 1,023 341 ---------- ---------- Total interest income 40,690 38,085 ---------- ---------- INTEREST EXPENSE Interest on deposits 17,189 15,379 Interest on other borrowings 1,406 1,087 ---------- ---------- Total interest expense 18,595 16,466 Net interest income 22,095 21,619 Provision for loan losses 753 1,211 ---------- ---------- Net interest income after provision for loan losses 21,342 20,408 ---------- ---------- OTHER INCOME Trust fees 2,424 1,876 Service charges and other income 2,436 2,113 Net securities gains 275 4 ---------- ---------- Total other income 5,135 3,993 OTHER EXPENSES Salaries, wages and employee benefits 8,843 8,240 Premises and equipment - net 2,294 2,321 Other operating 5,038 4,661 ---------- ---------- Total other expenses 16,175 15,222 ---------- ---------- Income before provision for income taxes 10,302 9,179 Provision for income taxes 3,260 2,580 ---------- ---------- Net Income $ 7,042 $ 6,599 ========== ========== Earnings per share $0.34 $0.32 Average shares outstanding 20,901,998 20,345,624 Dividends per share $0.21 $0.19 * The Consolidated Statement of Income was unchanged by the adoption of SFAS No. 130. The accompanying Notes to Consolidated Financial Statements are an integral part of these financial statements. 5 WESBANCO, INC. CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY - ------------------------------------------------------------------------------ (Unaudited, in thousands, except for shares) Deferred Other Benefits for Comprehensive Common Capital Retained Treasury Comprehensive Directors & Income Stock Surplus Earnings Stock Income Employees Total - ------------------------------------------------------------------------------------------------------------------ December 31, 1996 $31,545 $50,512 $187,777 ($544) $46 ($855) $268,481 - ------------------------------------------------------------------------------------------------------------------ Net income $25,211 25,211 25,211 Cash dividends: Common (.78 per share) (12,474) (12,474) Common by pooled bank prior to acquisition (1,929) (1,929) Stock issued for acquisition 366 7,519 4,901 12,786 Net treasury shares purchased 82 (6,032) (5,950) Retirement of pooled bank stock held by WesBanco (17) (116) (133) Stock issued for a 3 for 2 stock split effected in the form of a 50% stock dividend 11,161 (11,161) Deferred benefits for directors (50) (50) Principal payment on ESOP debt 450 450 ESOP borrowing (134) (134) Market value adjustment on investments available for sale-net of tax 1,737 1,737 1,737 ------- Comprehensive income $26,948 ======= - ------------------------------------------------------------------------------------------------------------------ December 31, 1997 $43,055 $57,997 $187,424 ($1,675) $1,783 ($589) $287,995 - ------------------------------------------------------------------------------------------------------------------ Net income 7,042 7,042 7,042 Cash dividends: Common (.21 per share) (3,348) (3,348) Common by pooled bank prior to acquisition (485) (485) Stock issued for acquisition 688 2,613 3,301 Net treasury shares purchased 21 (1,586) (1,565) Deferred benefits for directors (2) (2) Market value adjustment on investments available for sale-net of tax 623 623 623 ------ Comprehensive income $7,665 ====== - ------------------------------------------------------------------------------------------------------------------ March 31, 1998 $43,743 $60,631 $190,633 ($3,261) $2,406 ($591) $293,561 - ------------------------------------------------------------------------------------------------------------------
The accompanying Notes to Consolidated Financial Statements are an integral part of these financial statements. 6 WESBANCO, INC. CONSOLIDATED STATEMENT OF CASH FLOWS - ------------------------------------------------------------------------------ Increase (Decrease) in Cash and Cash Equivalents (unaudited, in thousands) For the three months ended March 31, -------------------------- 1998 1997 ------------- ---------- Cash flows from operating activities: Net Income $7,042 $6,599 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 1,467 1,706 Provision for loan losses 753 1,211 Gains on sales of securities-net (275) (4) Deferred income taxes 179 (14) Other -- net 223 (164) Net change in assets and liabilities: Interest receivable (2,613) (870) Other assets 439 957 Interest payable (12) 104 Other liabilities 933 2,733 -------- -------- Net cash provided by operating activities 8,136 12,258 -------- -------- Cash flows from investing activities: Securities held to maturity: Proceeds from maturities and calls 10,977 31,419 Payments for purchases (8,272) (12,171) Securities available for sale: Proceeds from sales 11,058 500 Proceeds from maturities and calls 33,344 20,053 Payments for purchases (134,620) (27,019) Purchase of subsidiary, net of cash acquired 5,137 - Net decrease in loans 15,203 106 Purchases of premises and equipment-net (1,753) (2,260) --------- --------- Net cash provided by (used in) investing activities (68,926) 10,628 --------- --------- Cash flows from financing activities: Net increase in deposits 35,470 20,032 Decrease in federal funds purchased and repurchase agreements (3,879) (5,032) Increase (decrease) in short-term borrowings 3,286 (88) Dividends paid (3,688) (3,312) Purchases of treasury shares-net (1,565) (3,101) --------- --------- Net cash provided by financing activities 29,624 8,499 --------- --------- Net increase (decrease) in cash and cash equivalents (31,166) 31,385 Cash and cash equivalents at beginning of period 161,290 94,266 --------- --------- Cash and cash equivalents at end of period $130,124 $125,651 ========= ========= For the three months ended March 31, 1998 and 1997, WesBanco paid $18,404 and $15,427 in interest on deposits and other borrowings, and $143 and $17 for income taxes, respectively. The accompanying Notes to Consolidated Financial Statements are an integral part of these financial statements. 7 WESBANCO, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - ------------------------------------------------------------------------------ Note 1 - Accounting policies - ---------------------------- Basis of presentation: The accompanying unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. The consolidated financial statements include the accounts of WesBanco, Inc. ("the Corporation") and its wholly-owned subsidiaries. Significant intercompany transactions have been eliminated in consolidation. Previously presented financial information has been restated to include Commercial BancShares, Incorporated ("Commercial"). Reclassification: Certain prior year financial information has been reclassified to conform to the March 31, 1998 presentation. The reclassifications had no effect on net income. Cash and cash equivalents: For the purpose of reporting cash flows, cash and cash equivalents include cash and due from banks, due from banks - interest bearing and federal funds sold. Generally, federal funds are sold for one-day periods. New accounting standards: On January 1, 1998, the Corporation adopted SFAS No. 130, "Reporting Comprehensive Income". Adoption of the standard is reflected in the Consolidated Statement of Changes in Shareholders' Equity. Sources of comprehensive income not included in net income are limited to unrealized gains and losses on certain investments in debt and equity securities. Note 2 - Completed business combinations - ---------------------------------------- On March 31, 1998, WesBanco and Commercial jointly announced the consummation of the business combination of Commercial with and into WesBanco affiliated companies. As of the consummation date, Commercial reported total assets of approximately $466.1 million and shareholders' equity of $46.4 million. The transaction was accounted for as a pooling-of-interests. In connection with this transaction, the Corporation issued 4,925,042 shares of common stock. On March 9, 1998, Commerical consummated its business combination with Gateway Bancshares. Gateway, with total assets of $31.0 million, total loans of $21.8 million and deposits of $26.7 million, was considered immaterial to the financial position and results of operations of WesBanco and, therefore, prior year financial information was not restated. 8 Note 3 - Divestiture - -------------------- On March 19, 1998, WesBanco and Hometown Bancshares, Inc. ("Hometown") announced the execution of a Stock Purchase Agreement, providing for Hometown to purchase the Union Bank of Tyler County, a subsidiary of WesBanco. According to the Agreement, the transaction will be structured as a purchase of stock from WesBanco whereby Hometown will acquire 100% of the capital stock of Union at a total purchase price of $9.6 million. Net assets of the Union Bank of Tyler County at March 31, 1998 were $4.9 million. The transaction, which was a condition of regulatory approval for the Commercial combination, is expected to be completed during the second quarter of 1998. 9 WESBANCO, INC. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS - ------------------------------------------------------------------------------ The following discussion and analysis presents in further detail the financial condition and results of operations of WesBanco, Inc. and its subsidiaries. This discussion and analysis should be read in conjunction with the consolidated financial statements and notes presented in this report. Earnings Summary ---------------- Comparison of the three months ended March 31, 1998 and 1997 ------------------------------------------------------------ Net income for the three months ended March 31, 1998 was $7.0 million, a 6.1% increase over the same period in 1997. Earnings per share of common stock for the three months ended March 31, 1998 and 1997 were $.34 and $.32, respectively. The improvement in earnings during the first quarter resulted primarily from an increase in net interest income after the provision for loan losses and non-interest income. Annualized return on average assets was 1.3% for the three months ended March 31, 1998 and 1997. Annualized return on average equity was 9.7% compared to 9.8% for the three months ended March 31, 1998 and 1997, respectively. The acquisition of Shawnee Bank on June 30, 1997, which was accounted for under the purchase method of accounting, impacts performance comparisons between the three-month periods ended March 31, 1998 and 1997. Where significant, Management's Discussion reflects the impact of this purchase acquisition on the comparative financial information. Net Interest Income ------------------- During a period of stable market rates, net interest income before the provision for loan losses, for the three months ended March 31, 1998 increased $0.5 million or 2.2% over the same period for 1997. The increase in net interest income resulted from growth in average earning assets of $165.7 million or 8.5% and interest bearing liabilities of $131.2 million or 8.3%. The impact of this growth was partially offset by a reduction in the net tax equivalent yield on average earning assets to 4.5% for the three-month period ended March 31, 1998 from 4.8% for the same period in 1997. Growth in average earning assets was comprised primarily of increases in taxable securities of $81.7 million or 19.9% and federal funds sold of $47.6 million or 183.7%. Average rates on these investments remained stable between the three-month periods ended March 31, 1998 and 1997. Average loans increased $26.5 million or 2%, while average rates on loans approximated first quarter 1997 levels. Approximately $10.3 million of the increase in average loans related to the purchase acquisition of Shawnee Bank. Yields on average earning assets decreased to 8.1% from 8.2% between the comparative periods reflecting a shift in balances from higher-yielding loans to investments. 10 Growth in average interest bearing liabilities consisted primarily of an increase in average interest bearing deposits of $102.2 million or 6.8%. Within the deposit category, increases in average interest bearing demand of $122.7 million or 35% and average certificates of deposit of $30.3 million or 4%, were partially offset by a reduction in savings balances of $50.8 million or 13.2%. Approximately $28.4 million of the increase in average interest bearing deposits related to the purchase acquisition of Shawnee. The average rate on interest bearing deposits increased 20 basis points to 4.3% from 4.1% between the comparative periods reflecting a shift in balances from savings accounts to higher-yielding money market accounts and certificates of deposit. Other Income ------------ Other income increased $1.1 million or 28.6%. Trust fee income increased $0.5 million or 29.2%, reflecting increases in the number of accounts under administration, the market value of trust assets, and investment fees associated with the WesMark mutual fund products which were introduced in early 1997. The market value of trust assets approximated $2.3 billion as of March 31, 1998, an increase of $520 million or 29.6% over March 31, 1997. Service charges and other income increased $0.3 million or 15.3% between the three-month periods ended March 31 1998 and 1997, resulting from an increase in activity charges on deposit accounts. Other Expense ------------- Other expense increased $1.0 million or 6.3%. Salaries and employee benefits increased $0.6 million or 7.3% during the comparative period, due to the purchase acquisition of Shawnee Bank, staffing increases associated with the expansion of WesBanco's mortgage banking affiliate and normal salary adjustments. Other operating expense increased $0.4 million or 8.1% due to professional fees associated with improving fee income levels and operational efficiencies, and expenses relating to the Shawnee Bank purchase. Income Taxes ------------ A reconciliation of the average federal statutory tax rate to the reported effective tax rate attributable to income from operations follows: For the three months ended March 31, -------------------- 1998 1997 ---- ---- Federal statutory tax rate 35% 35% Tax-exempt interest income from securities of states and political subdivisions (8) (9) State income tax - net of federal tax effect 3 3 Alternative minimum tax credit carryforward recognized - (3) All other - net 2 2 ------ ------ Effective tax rate 32% 28% ====== ====== 11 The increase in the effective tax rate resulted from the utilization of approximately $0.2 million in credits for prior years' minimum taxes during the first quarter of 1997. These tax credits were fully utilized as of December 31, 1997. Financial Condition ------------------- Total assets of WesBanco as of March 31, 1998 were $2.3 billion compared to $2.2 billion as of December 31, 1997, an increase of 3.1%. During the first quarter ended March 31, 1998, WesBanco experienced increases in deposits and investment securities. Loans, including loans held for sale, approximated December 31, 1997 levels. Competitive pricing and marketing of deposit products contributed to a $62.1 million or 3.5% increase in deposits during the first quarter of 1998. Loan volume, while stable overall during the quarter, reflected seasonal reductions in consumer lending. Investment Securities --------------------- The following table shows the composition of the investment securities portfolio: March 31, December 31, (in thousands) 1998 1997 ------------------------- Securities Available for Sale (at market): - ------------------------------------------ U. S. Treasury and federal agency securities $308,449 $247,042 Obligations of states and political subdivisions 20,254 20,638 Corporate securities 21,012 8,540 Mortgage-backed securities 115,814 100,931 Other debt and equity securities 6,305 5,859 --------- --------- Total available for sale 471,834 383,010 --------- --------- Securities Held to Maturity (at cost): - -------------------------------------- U.S. Treasury and federal agency securities 78,366 79,220 Obligations of states and political subdivisions 167,737 164,684 Other debt securities 2,332 2,304 -------- --------- Total held to maturity (market value of $252,952 and $249,165, respectively) 248,435 246,208 -------- --------- Total securities $720,269 $629,218 ======== ========= The market value adjustment, before tax effect, in the available for sale securities portfolio reflected unrealized net gains of $4.0 million as of March 31, 1998 compared to unrealized net gains of $2.9 million as of December 31, 1997. These adjustments represent temporary market value fluctuations caused by general changes in market rates and the length of time to respective maturity dates. If these securities were held until their respective maturity date, no market value adjustment would be realized. 12 Loans ----- The following table shows the composition of the loan portfolio: March 31, December 31, (in thousands) 1998 1997 Loans: -------------------------- Commercial $ 253,597 $ 243,458 Real Estate - Construction 37,256 37,743 Real Estate - Mortgage 716,370 715,819 Personal, net of unearned income 323,617 333,176 Loans held for sale 16,319 11,705 ---------- ---------- Loans, net of unearned income $1,347,159 $1,341,901 ========== ========== WesBanco monitors the overall quality of its loan portfolio through various methods. Underwriting policies and guidelines have been established for all types of credits and management continually monitors the portfolio for adverse trends in delinquent and non-performing loans. Loans are considered impaired when it is determined that WesBanco may not be able to collect all principal and interest due according to the contractual terms of the loans. Impaired loans, including all non-performing loans, are as follows: March 31, December 31, (in thousands) 1998 1997 Nonperforming loans: -------------------------- Nonaccrual $ 12,059 $ 8,413 Renegotiated 1,517 2,423 Other classified loans 5,185 6,292 ---------- --------- Total impaired loans $ 18,761 $ 17,128 ========== ========= The average balance of impaired loans during the three months ended March 31, 1998 and year ended December 31, 1997, was approximately $15,254 and $17,514, respectively. Specific allowances for loan losses are allocated for impaired loans based on the present value of expected future cash flows, or the fair value of the collateral for loans that are collateral dependent. Related allowances for loan losses on impaired loans were $3.4 million and $2.6 million as of March 31, 1998 and December 31, 1997, respectively. Other real estate owned totaled $6.2 million as of March 31, 1998, compared to $5.6 million as of December 31, 1997. Loans past due 90 days or more decreased to $2.3 million or .2% of total loans as of March 31, 1998 as compared to $3.3 million or .2% of total loans as of December 31, 1997. Lending by WesBanco banks is guided by written lending policies, which allow for various types of lending. Normal lending practices do not include the acquisition of high yield non-investment grade loans or "highly leveraged transactions" ("HLT") from outside the primary market. 13 Allowance for Loan Losses ------------------------- Activity in the allowance for loan losses is summarized as follows: For the three months ended March 31, (in thousands) -------------------- 1998 1997 -------- -------- Balance, at beginning of period $20,261 $19,102 Allowance for loan losses of acquired bank 329 Charge-offs (1,450) (1,454) Recoveries 332 280 ------- ------- Net charge-offs (1,118) (1,174) Provision for loan losses 753 1,211 ------- ------- Balance, at end of period $20,225 $19,139 ======= ======= The allowance for loan losses as a percentage of total loans was 1.50% as of March 31, 1998 and 1.45% as of March 31, 1997. Amounts allocated to the allowance for loan losses are based upon management's evaluation of the credit risk in the loan portfolio. Management believes that the allowance for loan losses as of March 31, 1998 is adequate to provide for potential losses in the portfolio. Deposits -------- Total deposits increased $62.1 million or 3.5% between March 31, 1998 and December 31, 1997. WesBanco continued to experience growth in both money market accounts and certificates of deposit. Through competitive products such as Good Neighbor Banking and the Prime Rate Money Market Account, WesBanco has sustained steady growth in its deposit base over the past several years. However, as these higher-yielding deposits increase, savings balances continue to decline, causing a change in the composition of deposits. Liquidity and Capital Resources ------------------------------- WesBanco manages its liquidity position to meet its funding needs, including potential deposit outflows and loan principal disbursements and to meet its asset and liability management objectives. In addition to funds provided from operations, WesBanco's primary sources of funds are deposits, principal repayments on loans and matured or called securities. Scheduled loan repayments and maturing securities are relatively predictable sources of funds. However, deposit flows and prepayments on loans are significantly influenced by changes in market interest rates, economic conditions, and competition. WesBanco strives to manage the pricing of its deposits to maintain a balance of cash flows commensurate with loan commitments and other funding needs. WesBanco is subject to risk-based capital guidelines that measure capital relative to risk-adjusted assets and off-balance sheet financial instruments. The Corporation's Tier I, total risk-based capital and leverage ratios are well above the required minimum levels of 4%, 8% and 4%, respectively. 14 At March 31, 1998 and December 31, 1997, all of WesBanco's affiliate banks exceeded the minimum regulatory levels. Capital adequacy ratios are summarized as follows: March 31, December 31, 1998 1997 -------------------------- Tier I capital 18.7% 18.7% Total risk-based capital 20.0% 20.0% Leverage 12.4% 12.5% Agreement to Merge ------------------ On March 24, 1998, the Corporation announced the execution of a definitive Agreement and Plan of Merger providing for the acquisition of Hunter Insurance Agency, Fairmont, West Virginia, in a stock transaction. The transaction will be structured as a purchase transaction by WesBanco. Additionally, on March 24, 1998, WesBanco's Board of Directors approved a limited stock purchase plan to begin repurchasing up to 62,500 shares of WesBanco common stock to be used for the purpose of acquiring Hunter Insurance Agency. The timing, price and quantity of purchases will be at the discretion of the Corporation. This program may be discontinued or suspended at any time by the Corporation, however, it will terminate within 30 days subsequent to the consummation of the transaction. Quantitative and Qualitative Disclosures about Market Risk ---------------------------------------------------------- Through March 31, 1998, there have been no material changes to the information on this topic as presented in the 1997 Annual Report. 15 Part II - OTHER INFORMATION - --------------------------- Item 1-5 - Not Applicable - ------------------------- Item 4 - Results of votes of security holders - ---------------------------------------------- On April 15, 1998 the Annual Meeting of the Stockholders of WesBanco, Inc. was held. The following directors were elected to the Board of Directors for a term of three years expiring at the annual stockholders meeting in 2001: For Withheld ---------- --------- 1. James E. Altmeyer 11,775,838 88,464 2. James C. Gardill 11,830,037 14,271 3. Richard K. Riederer 11,814,542 29,764 4. Christopher V. Criss 11,830,183 14,125 5. Roland L. Hobbs 11,829,096 15,212 6. J. Christopher Thomas 11,818,506 25,802 7. Stephen F. Decker 11,820,844 23,464 8. Eric Nelson 11,827,445 16,862 The following director was elected to the Board of Directors for a term of one year expiring at the annual stockholders meeting in 1999: For Withheld ---------- -------- John R. Scheessele 11,807,983 14,132 The shareholders voted on a proposed amendment to the Articles of Incorporation for the purpose of increasing the authorized common stock of the Corporation, which the Board of Directors may issue, from 25,000,000 shares to 50,000,000 shares at $2.0833 par value. For Against Abstained ---------- -------- --------- 11,125,040 496,691 193,734 The shareholders voted on a Key Executive Incentive Bonus and Option Plan. For Against Abstained ---------- ------- -------- 10,373,623 902,598 568,075 Item 6(a) - Exhibits - -------------------- 3 Articles of Amendment to the Articles of Incorporation of WesBanco, Inc. 10 Key Executive Incentive Bonus and Option Plan* 27 Financial Data Schedule required by Article 9 of Regulation S-X. 99 Press release dated March 24, 1998, announcing the execution of a definitive Agreement and Plan of Merger providing for the acquisition of Hunter Insurance Agency. * This document is being incorporated by reference with respect to Appendix A of the Proxy Statement filed by the Registrant with the Securities and Exchange Commission on March 13, 1998. 16 Item 6(b) - Reports on Form 8-K - ------------------------------- On April 16, 1998, the Registrant filed a current report on Form 8-K, dated March 31, 1998, announcing the consummation of WesBanco's business combination with Commercial BancShares. 17 SIGNATURES - ---------- Pursuant to the requirement of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. WESBANCO, INC. -------------- May 14, 1998 /s/ Edward M. George ------------------------------------- Edward M. George President and Chief Executive Officer May 14, 1998 /s/ Paul M. Limbert ------------------------------------- Paul M. Limbert Executive Vice President and Chief Financial Officer EX-3 2 18 Exhibit 3 --------- STATE OF WEST VIRGINIA (SEAL) CERTIFICATE I, KEN HECHLER, SECRETARY OF STATE OF THE STATE OF WEST VIRGINIA, HEREBY CERTIFY THAT originals of the Articles of Amendment to the Articles of Incorporation of WESBANCO, INC. are filed in my office, signed and verified, as required by the provisions of Chapter 31, Article 1, Section 31 of the West Virginia Code and conform to law. Therefore, I issue this CERTIFICATE OF AMENDMENT TO THE ARTICLES OF INCORPORATION of the corporation, to which I have attached a duplicate original of the Articles of Amendment. Given under my hand and the Great Seal of of the State of West Virginia on this (SEAL) Twenty-First day of April, 1998 /s/ Ken Hechler Secretary of State 19 Filing Fee: $25.00 License Fee: $-0- ARTICLES OF AMENDMENT TO THE ARTICLES OF INCORPORATION OF WESBANCO, INC. Pursuant to the provisions of Section 31, Article 1, Chapter 31 of the Code of West Virginia, the undersigned corporation adopted the following Articles of Amendment to its Articles of Incorporation: FIRST: The name of the corporation is Wesbanco, Inc. SECOND: The following Amendment to the Articles of Incorporation was adopted by the shareholders of the corporation on April 15, 1998, in the manner prescribed by Sections 107 and 147, Article 1, Chapter 31: That the authorized common stock of the corporation be increased from 25,000,000 shares of the par value of $2.0833 per share to 50,000,000 shares of the par value of $2.0833 per share. THIRD: Article IV of the Articles of Incorporation of Wesbanco, Inc. shall, accordingly, be amended and reenacted to read as follows: IV. The total number of shares of all classes of capital stock which the corporation shall have authority to issue shall be 51,000,000 shares, which shall be divided into 50,000,000 shares of common stock of the par value of $2.0833 per share, and 1,000,000 shares of preferred stock, without par value. (1) The designations, powers, rights and preferences, and the qualifications, limitations and restrictions, of the preferred stock shall be as fixed and determined, from time to time, by the Board of Directors, and the Board of Directors is authorized and empowered at any time, and from time to time, to direct and provide for the issuance of shares of preferred stock in one or more classes or series, with such voting powers, full or limited, but not to exceed one vote per share, or without voting power, and with such dividend rights, rates and conditions, and such designations, preferences and relative, participating, optional or other special rights, and qualifications, limitations, or restrictions thereof, as shall be fixed and determined by the Board of Directors, by resolutions duly adopted. FOURTH: The number of shares outstanding at the time of such adoption was 15,982,960 shares and the number of shares entitled to vote was 15,982,960 shares. FIFTH: The designation and number of outstanding shares of each class entitled to vote, as a class, were as follows: 20 CLASS NUMBER OF SHARES ----- ---------------- Common 15,982,960 SIXTH: The number of shares voted for such amendments was 11,125,040; the number of shares voted against such amendments was 496,691; and the number of shares abstaining was 193,734. SEVENTH: The number of shares of each class entitled to vote as a class voted for and against such amendments was: CLASS NUMBER OF SHARES VOTED ----- ---------------------- Common For:11,125,040 Against: 496,691 Abstain: 193,734 EIGHTH: The manner in which any exchange, reclassification or cancellation of issued shares provided for in the amendments shall be affected, is as follows: All outstanding certificates shall be unaffected by the change and shall continue to represent the number of shares reflected thereon. NINTH: The amount of the authorized capital stock of this corporation shall be increased from the current 26,000,000 shares, which is divided into 25,000,000 shares of common stock of the par value of $2.0833 per share, and 1,000,000 shares of preferred stock, without par value, to 51,000,000 shares consisting of 50,000,000 shares of common stock of the par value of $2.0833, and 1,000,000 shares of preferred stock, without par value. Dated this 15th day of April, 1998. WESBANCO, INC. By /s/ Edward M. George ----------------------- Its President And /s/ Larry G. Johnson ---------------------- Its Secretary 21 STATE OF WEST VIRGINIA, COUNTY OF OHIO, TO-WIT: I, James C. Gardill, a Notary Public, do hereby certify that on this 15th day of April, 1998, personally appeared before me, EDWARD M. GEORGE and LARRY G. JOHNSON, who, being by me first duly sworn, declared that they are the President and Secretary, respectively, of WESBANCO, INC., that they signed the foregoing document as President and Secretary of the corporation, and that the statements therein contained are true. /s/ James C. Gardill --------------------- Notary Public My commission expires: 10/24/05 - --------------- (NOTARIAL SEAL) This instrument was prepared by James C. Gardill, Esq., PHILLIPS, GARDILL, KAISER & ALTMEYER, 61-14th Street, Wheeling, WV, 26003. EX-99 3 22 Exhibit 99 ---------- NEWS FOR IMMEDIATE RELEASE March 24, 1998 For Further Information Contact: Edward M. George President & CEO (304) 234-9208 Nasdaq Trading Symbol: WSBC WesBanco To Acquire The Hunter Insurance Agency Wheeling, WV. . . WesBanco, Inc. President & CEO, Edward M. George, today announced that WesBanco, Inc., has executed a Definitive Agreement and Plan of Merger providing for the acquisition of the Hunter Insurance Agency, Fairmont, West Virginia, in a stock transaction. The transaction will be structured as a purchase transaction by WesBanco. The Hunter Insurance Agency, a full service agency and seller of life, casualty and commercial insurance, has been in business since 1937. In commenting on the purchase, Mr. George stated, "We are pleased to announce this affiliation of the Hunter Insurance Agency. This acquisition will afford WesBanco an entry into the life, casualty and commercial insurance agency business. We look forward to the expansion of our financial services product mix. The addition of insurance products affords WesBanco the opportunity to provide our customers with a full array of financial products and services." According to Mr. George, the directors, officers and employees currently associated with the Hunter Insurance Agency would maintain their respective positions within the company after the acquisition. Bruce D. Martin, CIC, will continue to serve as the President and CEO of the agency upon its acquisition by WesBanco. In conjunction with the purchase of the Hunter Insurance Agency, Mr. George also announced that the WesBanco Board of Directors has approved a limited stock purchase plan to begin repurchasing up to 62,500 shares of WesBanco common stock. The timing, price and quantity of purchases will be at the discretion of the Corporation. This program may be discontinued or suspended at any time. ### EX-27 4
9 1000 3-MOS DEC-31-1998 MAR-31-1998 63,133 6,541 60,450 0 471,834 248,435 252,952 1,347,159 20,225 2,280,741 1,842,007 89,463 55,613 97 0 0 43,743 249,818 2,280,741 29,650 10,017 1,023 40,690 17,189 18,595 22,095 753 275 16,175 10,302 10,302 0 0 7,042 .34 .34 0 0 0 0 0 0 0 0 0 0 0 0
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