EX-99.1 2 ex991.htm 2ND QTR 2018 EARNINGS RELEASE

 
Company Contact
John Iannone
Vice President, Investor Relations
WesBanco, Inc.
304-905-7021


WesBanco Announces Second Quarter 2018 Net Income

Wheeling, WV, July 23, 2018 – WesBanco, Inc. ("WesBanco") (Nasdaq: WSBC), a diversified, multi-state bank holding company, today announced net income and related earnings per share for the three and six months ended June 30, 2018.  Net income for the three months ended June 30, 2018 was $33.2 million, with diluted earnings per share of $0.71, compared to $26.3 million and $0.60 per diluted share, respectively, for the second quarter of 2017.  For the six months ended June 30, 2018, net income was $66.7 million, or $1.47 per diluted share, compared to $52.2 million, or $1.19 per diluted share, for the 2017 period.  Net Income excluding after-tax merger-related expenses for the three months ended June 30, 2018, increased 42.2% year-over-year to $37.4 million, or $0.80 per diluted share as compared to $0.60 per diluted share in the prior year quarter (non-GAAP measures).  On the same basis, net income for the six months ended June 30, 2018 increased 35.4% year-over-year to $71.2 million, or $1.57 per diluted share versus $1.19 per diluted share in the prior year period (non-GAAP measures).

   
For the Three Months Ended June 30,
  
For the Six Months Ended June 30,
   
2018 
  
2017
  
2018 
  
2017 
(unaudited, dollars in thousands, except per share amounts)
  
Net Income
  
Diluted Earnings Per Share
    
Net Income
    
Diluted Earnings Per Share
  
Net Income
  
Diluted Earnings Per Share
    
Net Income
    
Diluted Earnings Per Share
Net income (Non-GAAP)(1)
 $   37,445
  
 $     0.80
  
 $   26,341
  
 $     0.60
  
 $   71,167
  
 $     1.57
  
 $   52,547
  
 $     1.19
Less: After tax merger-related expenses
       (4,276)
  
      (0.09)
  
              -
  
           -
  
       (4,469)
  
      (0.10)
  
(319)
  
           -
Net income (GAAP)
 $   33,169
  
 $     0.71
  
 $   26,341
  
 $     0.60
  
 $   66,698
  
 $     1.47
  
 $   52,228
  
 $     1.19
(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 $706 million in assets, excluding goodwill.  Financial results for FTSB have been included in WesBanco's results subsequent to the merger date of April 5, 2018.

Financial and operational highlights:
·
Execution of well-defined long-term growth strategies driving strong profitability
o
Year-to-date income before provisions for credit losses and income taxes increased 9.4% year-over-year, or 16.0% when excluding merger-related costs
·
Solid expense management as demonstrated by a year-to-date efficiency ratio of 54.68% (non-GAAP measure)
·
Continued strength across key credit quality metrics
·
Successful completion of the merger with FTSB and conversion of its data processing system
·
On July 11th,  announced receipt of all necessary regulatory approvals for the merger with Farmers Capital Bank Corporation ("FFKT"), pursuant to the merger agreement dated April 19, 2018
o
In addition, today, the shareholders of FFKT approved the merger with and into WesBanco, Inc.

"We are pleased with WesBanco's performance during the second quarter of 2018 as we reported net earnings of $0.80 per share, when excluding merger-related costs," said Todd F. Clossin, President and Chief Executive Officer of WesBanco. "We were able to deliver these record results by remaining focused on generating positive operating leverage and profitability through effective execution of our strategies related to long-term growth, expense management, and strategic acquisitions."

Mr. Clossin added, "We successfully executed upon our $10 billion asset threshold strategy as we welcomed the customers and employees of First Sentry into WesBanco on April 5th.  Furthermore, through disciplined growth, meeting customer needs efficiently and effectively, and leveraging our core deposit advantage while maintaining our foundation of strong credit standards and diligent expense management we will continue delivering long-term shareholder value."

Balance Sheet
Portfolio loans of $6.8 billion, as of June 30, 2018, increased 6.3% when compared to the prior year period due to the acquisition of FTSB.  Total organic loan growth was flat year-over-year resulting from continued targeted reductions in the consumer portfolio to reduce its risk profile and elevated levels of commercial real estate loans moving to an aggressive secondary financing market.  Solid new loan production during the second quarter of 2018, as well as our lending diversification strategy, helped to offset those loan category reductions.  Both the commercial & industrial and residential mortgage loan categories reported low single-digit organic loan growth year-over-year.  Total deposits increased 8.4% year-over-year to $7.7 billion due to the FTSB acquisition.  Continuing to reflect the strength of our legacy footprint, total deposits, excluding CDs, increased 4.9% organically, driven by 6.0% organic growth in interest bearing and non-interest bearing demand deposits.

Credit Quality
Our strong legacy of credit and risk management is reflected in the strength of our credit quality ratios as we continue to focus on prudent lending standards.  As of June 30, 2018, despite the addition of approximately $450 million of loans from the acquisition of FTSB, non-performing assets, past due loans, and criticized and classified loans decreased year-over-year on both an absolute dollar basis and as a percentage of the portfolio.  Non-performing assets as a percentage of total assets of 0.39%, non-performing loans as a percentage of total portfolio loans of 0.57%, and annualized net charge-offs as a percentage of average portfolio loans of 0.03% have continued to show improvements and have declined to the lowest levels in at least five quarters.  Further reflecting the consistent high quality of the loan portfolio, the provision for credit losses decreased from $2.4 million in the second quarter of 2017 to $1.7 million in the current quarter.

Net Interest Margin and Income
The net interest margin for the second quarter of 2018 declined two basis points year-over-year to 3.43% which was primarily driven by higher funding costs, and asset mix changes, as total securities now represent 25.9% of total assets, compared to 23.1% last year.   Also contributing to the net interest margin decrease 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 is primarily due to higher rates for interest bearing public funds, higher tier money market accounts, and Federal Home Loan Bank and other borrowings.  Accretion from prior acquisitions benefited the second quarter net interest margin by approximately 12 basis points, as compared to eight basis points in the prior year period.

Net interest income increased $10.2 million, or 14.2%, during the second quarter of 2018 as compared to the same quarter of 2017 due to a 12.4% increase in average total earning assets, primarily driven by the acquisition of FTSB and related purchase accounting income.  For the six months ended June 30, 2018, net interest income increased $12.7 million, or 8.9%, due to higher average total earning assets from a larger investment portfolio and the earning assets acquired from FTSB.

Non-Interest Income
For the second quarter of 2018, non-interest income of $23.4 million increased $1.3 million, or 5.8%, from the second quarter of 2017, driven by higher electronic banking fees and mortgage banking income.  The $0.7 million increase in electronic banking fees was driven by higher transaction volumes and an ATM fee increase.  Residential mortgage origination volumes increased 33% year-over-year during the second quarter, which drove the $0.7 million increase in mortgage banking income.

For the six months ended June 30, 2018, non-interest income increased $2.5 million, or 5.5%.  The primary drivers of this increase were higher bank-owned life insurance due to higher death benefits received during the first quarter of 2018, and higher electronic banking fees, as discussed above.

Non-Interest Expense
Total operating expenses continued to be well-controlled during the second quarter of 2018.  Excluding merger-related expenses, non-interest expense increased $2.2 million, or 4.0%, compared to the prior year period.  This year-over-year increase is due to higher salaries and wages, which increased $3.3 million primarily due to the higher staffing levels from the acquisition of FTSB.  This increase was more than offset by strong discretionary expense management across most other expense categories.

Excluding merger-related expenses in both years, non-interest expense during the first half of 2018 increased $2.7 million, or 2.4%, compared to the prior year period, reflecting the acquisition of FTSB, partially offset by strong expense management.

Provision for Income Taxes
The effective income tax rate and associated provision for income taxes for the second quarter of 2018 are reflective of the recently enacted "Tax Cuts and Jobs Act", which lowered the statutory Federal income tax rate for corporations to 21%.  During the second quarter, the effective tax rate was 18.1% as compared to 26.8% last year, while the provision for income taxes decreased $2.3 million to $7.3 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 June 30, 2018, Tier I leverage was 10.21%, Tier I Risk-Based capital was 14.26%, Total Risk-Based capital was 15.26%, and the Common Equity Tier 1 capital ratio ("CET 1") was 12.38%.  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 of this year.  This is the eleventh increase over 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 second quarter of 2018 at 9:00 a.m. ET on Tuesday, July 24, 2018.  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 10115493.  The replay will begin at approximately 11:00 a.m. ET on July 24, and end at 12 a.m. ET on August 7, 2018.  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 quarter ended March 31, 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, FTSB 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, FTSB and FFKT may not be fully realized within the expected timeframes; disruption from the merger of WesBanco, FTSB 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; internet hacking; competitive conditions in the financial services industry; rapidly changing technology affecting financial services; marketability of debt instruments and corresponding impact on fair value adjustments; and/or other external developments materially impacting WesBanco's operational and financial performance.  WesBanco does not assume any duty to update forward-looking statements.

About WesBanco, Inc.
Founded in 1870, WesBanco, Inc. (www.wesbanco.com) is a multi-state, bank holding company with total assets of approximately $10.9 billion (as of June 30, 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 $4.0 billion of assets under management (as of June 30, 2018), and serves as registered investment advisor to a proprietary mutual fund family, the WesMark Funds.  WesBanco's banking subsidiary, WesBanco Bank, Inc., operates 177 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 4
(unaudited, dollars in thousands, except shares and per share amounts)
                
       
For the Three Months Ended
  
For the Six Months Ended
STATEMENT OF INCOME
June 30, 
  
June 30, 
Interest and dividend income
2018
  
2017
  
% Change
  
2018
  
2017
  
% Change
 
Loans, including fees
 $             78,538
  
 $               67,360
  
                      16.6
  
 $          147,671
  
 $             132,258
  
                      11.7
 
Interest and dividends on securities:
                      
   
Taxable
                14,194
  
                    9,375
  
                      51.4
  
                25,738
  
                  18,970
  
                      35.7
   
Tax-exempt
                  5,055
  
                    4,864
  
                        3.9
  
                  9,890
  
                    9,756
  
                        1.4
     
Total interest and dividends on securities
                19,249
  
                  14,239
  
                      35.2
  
                35,628
  
                  28,726
  
                      24.0
 
Other interest income
                  1,101
  
                       561
  
                      96.3
  
                  1,904
  
                    1,100
  
                      73.1
          Total interest and dividend income
                98,888
  
                  82,160
  
                      20.4
  
              185,203
  
                162,084
  
                      14.3
Interest expense
                      
 
Interest bearing demand deposits
                  3,150
  
                    1,506
  
                    109.2
  
                  5,673
  
                    2,599
  
                    118.3
 
Money market deposits
                  1,093
  
                       644
  
                      69.7
  
                  1,972
  
                    1,218
  
                      61.9
 
Savings deposits
                      227
  
                       185
  
                      22.7
  
                      416
  
                       367
  
                      13.4
 
Certificates of deposit
                  2,977
  
                    2,491
  
                      19.5
  
                  5,513
  
                    4,902
  
                      12.5
     
Total interest expense on deposits
                  7,447
  
                    4,826
  
                      54.3
  
                13,574
  
                    9,086
  
                      49.4
 
Federal Home Loan Bank borrowings
                  5,953
  
                    3,145
  
                      89.3
  
                10,451
  
                    5,980
  
                      74.8
 
Other short-term borrowings
                      973
  
                       262
  
                    271.4
  
                  1,532
  
                       560
  
                    173.6
 
Subordinated debt and junior subordinated debt
                  2,168
  
                    1,788
  
                      21.3
  
                  4,110
  
                    3,600
  
                      14.2
     
Total interest expense
                16,541
  
                  10,021
  
                      65.1
  
                29,667
  
                  19,226
  
                      54.3
Net interest income
                82,347
  
                  72,139
  
                      14.2
  
              155,536
  
                142,858
  
                        8.9
 
Provision for credit losses
                  1,708
  
                    2,383
  
                    (28.3)
  
                  3,876
  
                    5,094
  
                    (23.9)
Net interest income after provision for credit losses
                80,639
  
                  69,756
  
                      15.6
  
              151,660
  
                137,764
  
                      10.1
Non-interest income
                      
 
Trust fees
5,752
  
5,572
  
                        3.2
  
12,255
  
11,716
  
                        4.6
 
Service charges on deposits
5,146
  
5,081
  
                        1.3
  
9,969
  
9,933
  
                        0.4
 
Electronic banking fees
5,728
  
4,984
  
                      14.9
  
10,558
  
9,512
  
                      11.0
 
Net securities brokerage revenue
1,809
  
1,680
  
                        7.7
  
3,479
  
3,442
  
                        1.1
 
Bank-owned life insurance
1,128
  
1,367
  
                    (17.5)
  
3,884
  
2,508
  
                      54.9
 
Mortgage banking income
1,670
  
968
  
                      72.5
  
2,776
  
2,408
  
                      15.3
 
Net securities gains
                      358
  
494
  
                    (27.5)
  
319
  
506
  
                    (37.0)
 
Net gains on other real estate owned and other assets
229
  
342
  
                    (33.0)
  
491
  
307
  
                      59.9
 
Other income
                  1,588
  
1,634
  
                      (2.8)
  
                  3,760
  
4,674
  
                    (19.6)
     
Total non-interest income
23,408
  
22,122
  
                        5.8
  
47,491
  
45,006
  
                        5.5
Non-interest expense
                      
 
Salaries and wages
26,872
  
23,616
  
                      13.8
  
51,878
  
46,618
  
                      11.3
 
Employee benefits
7,965
  
7,731
  
                        3.0
  
14,877
  
15,941
  
                      (6.7)
 
Net occupancy
4,103
  
4,510
  
                      (9.0)
  
8,759
  
8,837
  
                      (0.9)
 
Equipment
4,095
  
4,097
  
                      (0.0)
  
8,044
  
8,139
  
                      (1.2)
 
Marketing
1,405
  
2,060
  
                    (31.8)
  
2,521
  
2,884
  
                    (12.6)
 
FDIC insurance
868
  
906
  
                      (4.2)
  
1,526
  
1,733
  
                    (11.9)
 
Amortization of intangible assets
1,312
  
1,240
  
                        5.8
  
2,397
  
2,513
  
                      (4.6)
 
Restructuring and merger-related expense
                  5,412
  
                         -
  
                    100.0
  
                  5,657
  
                       491
  
                 1,052.1
 
Other operating expenses
                11,511
  
11,724
  
                      (1.8)
  
                22,455
  
23,112
  
                      (2.8)
     
Total non-interest expense
63,543
  
55,884
  
                      13.7
  
118,114
  
110,268
  
                        7.1
Income before provision for income taxes
                40,504
  
                  35,994
  
                      12.5
  
                81,037
  
                  72,502
  
                      11.8
 
Provision for income taxes
                  7,335
  
                    9,653
  
                    (24.0)
  
                14,339
  
                  20,274
  
                    (29.3)
Net Income
 $             33,169
  
 $               26,341
  
                      25.9
  
 $             66,698
  
 $               52,228
  
                      27.7
                             
Taxable equivalent net interest income
 $            83,691
  
 $            74,758
  
                      11.9
  
 $          158,165
  
 $          148,111
  
                        6.8
                             
Per common share data
                      
Net income per common share - basic
 $                 0.71
  
 $                   0.60
  
                      18.3
  
 $                 1.47
  
 $                   1.19
  
                      23.5
Net income per common share - diluted
                     0.71
  
                      0.60
  
                      18.3
  
                     1.47
  
                      1.19
  
                      23.5
Net income per common share - diluted, excluding certain items (1)(2)
                     0.80
  
                      0.60
  
                      33.3
  
                     1.57
  
                      1.19
  
                      31.9
Dividends declared
                     0.29
  
                      0.26
  
                      11.5
  
                     0.58
  
                      0.52
  
                      11.5
Book value (period end)
                  32.68
  
                    31.29
  
                        4.4
  
                  32.68
  
                    31.29
  
                        4.4
Tangible book value (period end) (1)
                  18.59
  
                    17.99
  
                        3.3
  
                  18.59
  
                    17.99
  
                        3.3
Average common shares outstanding - basic
46,498,305
  
43,995,749
  
                        5.7
  
45,281,264
  
43,971,789
  
                        3.0
Average common shares outstanding - diluted
46,639,780
  
           44,061,421
  
                        5.9
  
45,417,010
  
           44,046,812
  
                        3.1
Period end common shares outstanding
        46,643,250
  
           44,031,335
  
                        5.9
  
        46,643,250
  
           44,031,335
  
                        5.9
                             
(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 5
(unaudited, dollars in thousands)
                              
                                   
Selected ratios
                      
 
For the Six Months Ended
          
 
June 30, 
            
 
2018
  
2017
  
% Change
            
                       
Return on average assets
             1.29
%
             1.07
%
           20.56
%
          
Return on average assets, excluding
                      
    after-tax merger-related expenses and
                      
    net deferred tax asset revaluation (1)
             1.37
  
             1.08
  
           26.85
            
Return on average equity
             9.22
  
             7.70
  
           19.74
            
Return on average equity, excluding
                      
    after-tax merger-related expenses and
                      
    net deferred tax asset revaluation (1)
             9.83
  
             7.75
  
           26.84
            
Return on average tangible equity (1)
16.46
  
13.88
  
           18.59
            
Return on average tangible equity, excluding
                      
    after-tax merger-related expenses and
                      
    net deferred tax asset revaluation (1)
           17.53
  
           13.97
  
           25.48
            
Yield on earning assets (2)
             4.05
  
             3.88
  
             4.38
            
Cost of interest bearing liabilities
             0.86
  
             0.59
  
           45.76
            
Net interest spread (2)
             3.19
  
             3.29
  
           (3.04)
            
Net interest margin (2)
             3.41
  
             3.43
  
           (0.58)
            
Efficiency (1) (2)
           54.68
  
           56.84
  
           (3.80)
            
Average loans to average deposits
           88.68
  
           89.36
  
           (0.76)
            
Annualized net loan charge-offs/average loans
             0.05
  
             0.12
  
         (58.33)
            
Effective income tax rate (3)
           17.69
  
           27.96
  
         (36.73)
            
                       
                       
                       
                       
 
For the Quarter Ended 
    
 
June 30,
  
Mar. 31,
  
Dec. 31,
  
Sept. 30,
  
June 30,
    
 
2018
  
2018
  
2017
  
2017
  
2017
    
                       
Return on average assets
1.22
%
1.36
%
0.64
%
1.06
%
1.07
%
  
Return on average assets, excluding
                      
    after-tax merger-related expenses and
                      
    net deferred tax asset revaluation (1)
1.38
  
1.37
  
1.16
  
1.06
  
1.07
    
Return on average equity
8.77
  
9.70
  
4.48
  
7.50
  
7.67
    
Return on average equity, excluding
                      
    after-tax merger-related expenses and
                      
    net deferred tax asset revaluation (1)
9.90
  
9.76
  
8.17
  
7.50
  
7.67
    
Return on average tangible equity (1)
15.87
  
17.10
  
8.05
  
13.31
  
13.74
    
Return on average tangible equity, excluding
                      
    after-tax merger-related expenses and
                      
    net deferred tax asset revaluation (1)
17.85
  
17.20
  
14.36
  
13.31
  
13.74
    
Yield on earning assets (2)
4.11
  
3.98
  
3.95
  
3.99
  
3.91
    
Cost of interest bearing liabilities
0.91
  
0.80
  
0.71
  
0.67
  
0.61
    
Net interest spread (2)
3.20
  
3.18
  
3.24
  
3.32
  
3.30
    
Net interest margin (2)
3.43
  
3.38
  
3.43
  
3.48
  
3.45
    
Efficiency (1) (2)
54.28
  
55.12
  
55.08
  
57.03
  
57.68
    
Average loans to average deposits
88.15
  
89.26
  
90.26
  
90.43
  
89.51
    
Annualized net loan charge-offs/average loans
0.03
  
0.07
  
0.16
  
0.12
  
0.09
    
Effective income tax rate (3)
18.11
  
17.28
  
59.14
  
28.54
  
26.82
    
Trust assets, market value at period end
 $ 4,044,207
  
 $ 4,027,358
  
 $ 3,943,519
  
 $ 3,908,705
  
 $ 3,810,038
    
                       
(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 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 6
(unaudited, dollars in thousands, except shares)
            
% Change
Balance sheets
June 30,
    
December 31,
December 31, 2017
Assets
2018
  
2017
  
% Change
2017
to June 30, 2018
Cash and due from banks
 $        101,905
  
 $      104,189
  
          (2.2)
 $              97,746
                              4.3
Due from banks - interest bearing
             53,654
  
             6,506
  
       724.7
                 19,826
                          170.6
Securities:
              
 
Equity securities, at fair value
             13,494
  
             7,880
  
         71.2
                 13,457
                              0.3
 
Available-for-sale debt securities, at fair value
        1,796,571
  
      1,239,420
  
         45.0
            1,261,865
                            42.4
 
Held-to-maturity debt securities (fair values of $1,016,111; $1,049,374
              
 
  and $1,023,784, respectively)
        1,019,746
  
      1,030,394
  
          (1.0)
            1,009,500
                              1.0
   
Total securities
        2,829,811
  
      2,277,694
  
         24.2
            2,284,822
                            23.9
Loans held for sale
             12,053
  
           21,677
  
        (44.4)
                 20,320
                          (40.7)
Portfolio loans:
              
 
Commercial real estate
        3,189,335
  
      3,013,727
  
           5.8
            2,994,448
                              6.5
 
Commercial and industrial
        1,294,488
  
      1,136,195
  
         13.9
            1,125,327
                            15.0
 
Residential real estate
        1,450,829
  
      1,363,579
  
           6.4
            1,353,301
                              7.2
 
Home equity
           535,653
  
         516,612
  
           3.7
               529,196
                              1.2
 
Consumer
           322,594
  
         360,304
  
        (10.5)
               339,169
                            (4.9)
Total portfolio loans, net of unearned income
        6,792,899
  
      6,390,417
  
           6.3
            6,341,441
                              7.1
Allowance for loan losses
            (47,638)
  
         (44,909)
  
          (6.1)
               (45,284)
                            (5.2)
   
Net portfolio loans
        6,745,261
  
      6,345,508
  
           6.3
            6,296,157
                              7.1
Premises and equipment, net
           131,502
  
         134,903
  
          (2.5)
               130,722
                              0.6
Accrued interest receivable
             33,868
  
           28,501
  
         18.8
                 29,728
                            13.9
Goodwill and other intangible assets, net
           661,616
  
         591,252
  
         11.9
               589,264
                            12.3
Bank-owned life insurance
           191,701
  
         190,304
  
           0.7
               192,589
                            (0.5)
Other assets
           185,213
  
         173,476
  
           6.8
               155,004
                            19.5
Total Assets
 $   10,946,584
  
 $   9,874,010
  
         10.9
 $         9,816,178
                            11.5
                     
Liabilities
              
Deposits:
              
 
Non-interest bearing demand
 $     2,046,537
  
 $   1,801,423
  
         13.6
 $         1,846,748
                            10.8
 
Interest bearing demand
        1,809,140
  
      1,625,011
  
         11.3
            1,625,015
                            11.3
 
Money market
        1,051,043
  
      1,005,184
  
           4.6
            1,024,856
                              2.6
 
Savings deposits
        1,385,356
  
      1,255,083
  
         10.4
            1,269,912
                              9.1
 
Certificates of deposit
        1,376,528
  
      1,385,772
  
          (0.7)
            1,277,057
                              7.8
   
Total deposits
        7,668,604
  
      7,072,473
  
           8.4
            7,043,588
                              8.9
Federal Home Loan Bank borrowings
        1,248,406
  
      1,021,592
  
         22.2
               948,203
                            31.7
Other short-term borrowings
           258,067
  
         167,671
  
         53.9
               184,805
                            39.6
Subordinated debt and junior subordinated debt
           165,420
  
         164,228
  
           0.7
               164,327
                              0.7
   
Total borrowings
        1,671,893
  
      1,353,491
  
         23.5
            1,297,335
                            28.9
Accrued interest payable
               4,417
  
             2,407
  
         83.5
                   3,178
                            39.0
Other liabilities
             77,564
  
           68,102
  
         13.9
                 76,756
                              1.1
Total Liabilities
        9,422,478
  
      8,496,473
  
         10.9
            8,420,857
                            11.9
                     
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; 46,655,012,  44,041,572 and 44,043,244 shares
              
 
issued, respectively; 46,643,250, 44,031,335 and 44,043,244 shares
             97,197
  
           91,753
  
           5.9
                 91,756
                              5.9
 
outstanding, respectively
              
Capital surplus
           789,038
  
         682,443
  
         15.6
               684,730
                            15.2
Retained earnings
           692,820
  
         626,421
  
         10.6
               651,357
                              6.4
Treasury stock (11,762,  10,237 and 0 shares - at cost, respectively)
                 (555)
  
              (385)
  
        (44.2)
                        -
                          100.0
Accumulated other comprehensive loss
            (53,352)
  
         (22,118)
  
      (141.2)
               (31,495)
                          (69.4)
Deferred benefits for directors
              (1,042)
  
              (577)
  
        (80.6)
                 (1,027)
                            (1.5)
Total Shareholders' Equity
        1,524,106
  
      1,377,537
  
         10.6
            1,395,321
                              9.2
Total Liabilities and Shareholders' Equity
 $   10,946,584
  
 $   9,874,010
  
         10.9
 $         9,816,178
                            11.5
 
WESBANCO, INC.
        
Consolidated Selected Financial Highlights
      
Page 7
(unaudited, dollars in thousands, except shares)
        
Balance sheets
June 30,
  
March 31,
  
Assets
2018
  
2018
% Change
Cash and due from banks
 $         101,905
  
 $          91,361
11.5
Due from banks - interest bearing
             53,654
  
               9,484
465.8
Securities:
        
 
Trading securities, at fair value
             13,494
  
             13,986
(3.5)
 
Available-for-sale, at fair value
         1,796,571
  
         1,728,377
3.9
 
Held-to-maturity (fair values of $1,016,111 and 1,005,502, respectively)
         1,019,746
  
         1,006,042
1.4
   
Total securities
         2,829,811
  
         2,748,405
3.0
Loans held for sale
             12,053
  
             12,962
(7.0)
Portfolio Loans:
        
 
Commercial real estate
         3,189,335
  
         3,015,226
5.8
 
Commercial and industrial
         1,294,488
  
         1,118,333
15.8
 
Residential real estate
         1,450,829
  
         1,345,993
7.8
 
Home equity
           535,653
  
           523,425
2.3
 
Consumer
           322,594
  
           319,561
0.9
Total portfolio loans, net of unearned income
         6,792,899
  
         6,322,538
7.4
Allowance for loan losses
            (47,638)
  
           (46,334)
(2.8)
   
Net portfolio loans
         6,745,261
  
         6,276,204
7.5
Premises and equipment, net
           131,502
  
           128,583
2.3
Accrued interest receivable
             33,868
  
             31,963
6.0
Goodwill and other intangible assets, net
           661,616
  
           588,339
12.5
Bank-owned life insurance
           191,701
  
           191,839
(0.1)
Other assets
           185,213
  
           166,279
11.4
Total Assets
 $  10,946,584
  
 $ 10,245,419
6.8
            
Liabilities
        
Deposits:
        
 
Non-interest bearing demand
 $      2,046,537
  
 $      1,950,619
4.9
 
Interest bearing demand
         1,809,140
  
         1,768,977
2.3
 
Money market
         1,051,043
  
           984,429
6.8
 
Savings deposits
         1,385,356
  
         1,314,632
5.4
 
Certificates of deposit
         1,376,528
  
         1,207,669
14.0
   
Total deposits
         7,668,604
  
         7,226,326
6.1
Federal Home Loan Bank borrowings
         1,248,406
  
         1,166,939
7.0
Other short-term borrowings
           258,067
  
           207,653
24.3
Subordinated debt and junior subordinated debt
           165,420
  
           164,379
                0.6
   
Total borrowings
         1,671,893
  
         1,538,971
8.6
Accrued interest payable
               4,417
  
               4,033
9.5
Other liabilities
             77,564
  
             73,063
6.2
Total liabilities
         9,422,478
  
         8,842,393
6.6
            
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;
    
 
46,655,012 and 44,060,957 shares issued, respectively;
      
 
46,643,250 and 44,060,957 shares outstanding, respectively
             97,197
  
             91,793
5.9
Capital surplus
           789,038
  
           686,169
15.0
Retained earnings
           692,820
  
           673,174
2.9
Treasury stock (11,762 and 0 shares - at cost)
                (555)
  
                   -
(100.0)
Accumulated other comprehensive income (loss)
            (53,352)
  
           (47,076)
(13.3)
Deferred benefits for directors
             (1,042)
  
             (1,034)
0.8
Total Shareholders' Equity
         1,524,106
  
         1,403,026
                8.6
Total Liabilities and Shareholders' Equity
 $  10,946,584
  
 $ 10,245,419
6.8
 
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 June 30,
    
For the Six Months Ended June 30,
 
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
 $            53,896
             2.09
%
 $            12,875
             0.75
 %
  
 $                 31,436
        2.08
 %
 $          13,398
             0.63
%
Loans, net of unearned income (1)
          6,785,550
             4.64
  
          6,365,965
             4.24
    
               6,563,782
        4.54
    
        6,322,582
             4.22
  
Securities: (2)
                            
    Taxable
2,128,446
             2.67
  
1,550,114
             2.42
    
1,959,828
        2.63
    
1,576,578
             2.41
  
    Tax-exempt (3)
750,138
             3.41
  
720,561
             4.15
    
733,970
        3.41
    
723,593
             4.15
  
        Total securities
2,878,584
             3.05
  
2,270,675
             2.97
    
2,693,798
        2.84
    
2,300,171
             2.95
  
Other earning assets
               57,259
             5.72
  
               46,525
             4.62
    
                    53,843
        5.86
    
             46,774
             4.52
  
         Total earning assets (3)
          9,775,289
             4.11
%
          8,696,040
             3.91
 %
  
               9,342,859
        4.05
 %
        8,682,925
             3.88
%
Other assets
1,143,442
    
1,132,435
      
1,115,743
      
1,122,181
    
Total Assets
 $     10,918,731
    
 $       9,828,475
      
 $        10,458,602
      
 $   9,805,106
    
                             
Liabilities and Shareholders' Equity
                          
Interest bearing demand deposits
 $       1,849,035
             0.68
%
 $       1,634,305
             0.37
 %
  
 $            1,773,813
        0.64
 %
 $     1,585,564
             0.33
%
Money market accounts
1,035,567
             0.42
  
1,014,682
             0.25
    
1,020,486
        0.39
    
1,026,567
             0.24
  
Savings deposits
1,367,193
             0.07
  
1,253,444
             0.06
    
1,327,875
        0.06
    
1,240,390
             0.06
  
Certificates of deposit
1,415,259
             0.84
  
1,403,818
             0.71
    
1,328,724
        0.84
    
1,428,892
             0.69
  
    Total interest bearing deposits
5,667,054
             0.53
  
          5,306,249
             0.36
    
5,450,898
        0.50
    
        5,281,413
             0.35
  
Federal Home Loan Bank borrowings
1,180,939
             2.02
  
             947,346
             1.33
    
1,109,586
        1.90
    
           948,168
             1.27
  
Other borrowings
272,208
             1.43
  
153,565
             0.68
    
238,707
        1.29
    
175,341
             0.64
  
Subordinated debt and junior subordinated debt
172,972
             5.03
  
             164,184
             4.37
    
168,677
        4.91
    
           164,050
             4.43
  
      Total interest bearing liabilities
7,293,173
             0.91
%
6,571,344
             0.61
 %
  
6,967,868
        0.86
 %
6,568,972
             0.59
%
Non-interest bearing demand deposits
2,030,649
    
1,806,144
      
1,950,581
      
1,793,897
    
Other liabilities
77,873
    
73,721
      
80,681
      
74,748
    
Shareholders' equity
1,517,036
    
1,377,266
      
1,459,472
      
1,367,489
    
Total Liabilities and Shareholders' Equity
 $     10,918,731
    
 $       9,828,475
      
 $        10,458,602
      
 $   9,805,106
    
Taxable equivalent net interest spread
             3.20
%
  
             3.30
 %
    
        3.19
 %
  
             3.29
%
Taxable equivalent net interest margin
             3.43
%
  
             3.45
 %
    
        3.41
 %
  
             3.43
%
                             
                             
(1) Gross of allowance for loan losses and net of unearned income.  Includes non-accrual and loans held for sale. Loan fees included in interest income on loans are $0.7 million and $1.0 million for the three months ended June 30, 2018 and 2017, respectively and $1.3 million and $1.6 million for the six months ended June 30, 2018 and 2017, respectively. Additionally, loan accretion included in interest income on loans acquired from prior acquisitions was $1.4 million and $1.3 million for the three months ended June 30, 2018 and 2017,  respectively, and $2.6 million and $2.5 million  for the six months ended June 30, 2018 and 2017, respectively. Accretion on interest bearing liabilities acquired from the prior acquisitions was $0.7 million and $0.4 million for the three months ended June 30, 2018 and 2017, respectively, and $1.0 million and $0.8 million  for the six months ended June 30, 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
June 30,
  
Mar. 31,
  
Dec. 31,
  
Sept.  30,
  
June 30,
Interest income
2018
  
2018
  
2017
  
2017
  
2017
 
Loans, including fees
 $             78,538
  
 $               69,237
  
 $             69,408
  
 $               70,342
  
 $             67,360
 
Interest and dividends on securities:
                  
   
Taxable
                  14,194
  
                     11,543
  
                    9,948
  
                        9,711
  
                    9,375
   
Tax-exempt
                   5,055
  
                      4,834
  
                    4,872
  
                      4,862
  
                    4,864
     
Total interest and dividends on securities
                 19,249
  
                    16,377
  
                  14,820
  
                    14,573
  
                  14,239
 
Other interest income
                     1,101
  
                          803
  
                        623
  
                          574
  
                         561
          Total interest and dividend income
                98,888
  
                    86,417
  
                  84,851
  
                   85,489
  
                  82,160
Interest expense
                  
 
Interest bearing demand deposits
                   3,150
  
                      2,524
  
                    2,039
  
                        1,814
  
                     1,506
 
Money market deposits
                   1,093
  
                          878
  
                        805
  
                           751
  
                        644
 
Savings deposits
                      227
  
                           189
  
                         189
  
                           189
  
                         185
 
Certificates of deposit
                   2,977
  
                      2,536
  
                    2,597
  
                       2,610
  
                     2,491
     
Total interest expense on deposits
                   7,447
  
                       6,127
  
                    5,630
  
                      5,364
  
                    4,826
 
Federal Home Loan Bank borrowings
                   5,953
  
                      4,498
  
                    3,682
  
                      3,628
  
                     3,145
 
Other short-term borrowings
                      973
  
                          558
  
                        489
  
                          394
  
                        262
 
Subordinated debt and junior subordinated debt
                   2,168
  
                       1,942
  
                     1,868
  
                       1,849
  
                     1,788
     
Total interest expense
                  16,541
  
                     13,125
  
                   11,669
  
                     11,235
  
                   10,021
Net interest income
                82,347
  
                   73,292
  
                  73,182
  
                   74,254
  
                  72,139
 
Provision for credit losses
                   1,708
  
                       2,168
  
                    2,376
  
                       2,516
  
                    2,383
Net interest income after provision for credit losses
                80,639
  
                     71,124
  
                 70,806
  
                    71,738
  
                 69,756
Non-interest income
                  
 
Trust fees
5,752
  
6,503
  
5,667
  
5,358
  
5,572
 
Service charges on deposits
5,146
  
4,822
  
5,278
  
5,320
  
5,081
 
Electronic banking fees
5,728
  
4,829
  
4,788
  
4,883
  
4,984
 
Net securities brokerage revenue
1,809
  
1,670
  
1,508
  
1,721
  
1,680
 
Bank-owned life insurance
1,128
  
2,756
  
1,123
  
1,164
  
1,367
 
Mortgage banking income
1,670
  
1,004
  
1,542
  
1,103
  
968
 
Net securities gains/(losses)
358
  
(39)
  
56
  
6
  
494
 
Net gain/(loss) on other real estate owned and other assets
229
  
262
  
649
  
(298)
  
342
 
Other income
1,588
  
2,173
  
2,323
  
1,642
  
1,634
     
Total non-interest income
23,408
  
23,980
  
22,934
  
20,899
  
22,122
Non-interest expense
                  
 
Salaries and wages
26,872
  
25,006
  
25,786
  
24,957
  
23,616
 
Employee benefits
7,965
  
6,912
  
6,263
  
7,728
  
7,731
 
Net occupancy
4,103
  
4,656
  
4,132
  
4,132
  
4,510
 
Equipment
4,095
  
3,949
  
3,983
  
3,905
  
4,097
 
Marketing
1,405
  
1,116
  
1,238
  
1,599
  
2,060
 
FDIC insurance
868
  
658
  
827
  
945
  
906
 
Amortization of intangible assets
1,312
  
1,086
  
1,204
  
1,223
  
1,240
 
Restructuring and merger-related expense
5,412
  
245
  
                        454
  
                               -
  
                             -
 
Other operating expenses
11,511
  
10,943
  
10,950
  
11,265
  
11,724
     
Total non-interest expense
63,543
  
54,571
  
54,837
  
55,754
  
55,884
Income before provision for income taxes
                40,504
  
                   40,533
  
                 38,903
  
                   36,883
  
                 35,994
 
Provision for income taxes
                   7,335
  
                      7,004
  
                 23,006
  
                    10,527
  
                    9,653
Net Income
 $              33,169
  
 $               33,529
  
 $              15,897
  
 $               26,356
  
 $              26,341
                      
Taxable equivalent net interest income
 $            83,691
  
 $            74,577
  
 $          75,805
  
 $            76,872
  
 $          74,758
                      
Per common share data
                  
Net income per common share - basic
 $                  0.71
  
 $                     0.76
  
 $                   0.36
  
 $                     0.60
  
 $                   0.60
Net income per common share - diluted
 $                  0.71
  
 $                     0.76
  
 $                   0.36
  
 $                     0.60
  
 $                   0.60
Net income per common share - diluted, excluding certain items (1)(2)
 $                  0.80
  
 $                     0.76
  
 $                   0.66
  
 $                     0.60
  
 $                   0.60
Dividends declared
 $                  0.29
  
 $                     0.29
  
 $                   0.26
  
 $                     0.26
  
 $                   0.26
Book value (period end)
 $                32.68
  
 $                   31.84
  
 $                 31.68
  
 $                   31.67
  
 $                 31.29
Tangible book value (period end) (1)
 $                18.59
  
 $                   18.56
  
 $                 18.42
  
 $                   18.40
  
 $                 17.99
Average common shares outstanding - basic
46,498,305
  
44,050,701
  
44,036,416
  
44,031,813
  
43,995,749
Average common shares outstanding - diluted
46,639,780
  
44,168,242
  
44,109,767
  
44,086,881
  
44,061,421
Period end common shares outstanding
46,643,250
  
44,060,957
  
44,043,244
  
44,033,585
  
44,031,335
Full time equivalent employees
                   2,040
  
                       1,939
  
                     1,940
  
                       1,944
  
                     1,959
                      
                      
(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
  
     
June 30,
  
Mar. 31,
  
Dec. 31,
  
Sept. 30,
  
June 30,
  
Asset quality data
2018
  
2018
  
2017
  
2017
  
2017
  
Non-performing assets:
                    
 
Troubled debt restructurings - accruing
 $           6,460
  
 $           6,858
  
 $           6,571
  
 $           6,638
  
 $           6,841
  
 
Non-accrual loans:
                    
   
Troubled debt restructurings
              2,514
  
              2,397
  
              2,865
  
              2,982
  
              3,158
  
   
Other non-accrual loans
            29,467
  
            29,989
  
            33,960
  
            32,476
  
            33,077
  
   
    Total non-accrual loans
            31,981
  
            32,386
  
            36,825
  
            35,458
  
            36,235
  
   
    Total non-performing loans
            38,441
  
            39,244
  
            43,396
  
            42,096
  
            43,076
  
 
Other real estate and repossessed assets
              4,384
  
              4,067
  
              5,297
  
              5,782
  
              6,723
  
   
Total non-performing assets
 $         42,825
  
 $         43,311
  
 $         48,693
  
 $         47,878
  
 $         49,799
  
                         
Past due loans (1):
                    
 
Loans past due 30-89 days
 $         13,357
  
 $         14,536
  
 $         11,172
  
 $         17,292
  
 $         16,605
  
 
Loans past due 90 days or more
              1,881
  
              1,579
  
              2,726
  
              4,856
  
              4,210
  
   
Total past due loans
 $         15,238
  
 $         16,115
  
 $         13,898
  
 $         22,148
  
 $         20,815
  
                         
Criticized and classified loans (2):
                    
 
Criticized loans
 $         34,045
  
 $         33,785
  
 $         36,092
  
 $         34,784
  
 $         39,234
  
 
Classified loans
            38,982
  
            34,566
  
            37,858
  
            44,303
  
            40,468
  
   
Total criticized and classified loans
 $         73,027
  
 $         68,351
  
 $         73,950
  
 $         79,087
  
 $         79,702
  
                         
Loans past due 30-89 days / total portfolio loans
                0.20
%
                0.23
%
                0.18
%
                0.27
%
                0.26
%
Loans past due 90 days or more / total portfolio loans
                0.03
  
                0.02
  
                0.04
  
                0.08
  
                0.07
  
Non-performing loans / total portfolio loans
                0.57
  
                0.62
  
                0.68
  
                0.66
  
                0.67
  
Non-performing assets/total portfolio loans, other
                    
 
real estate and repossessed assets
                0.63
  
                0.68
  
                0.77
  
                0.75
  
                0.78
  
Non-performing assets / total assets
                0.39
  
                0.42
  
                0.50
  
                0.48
  
                0.50
  
Criticized and classified loans / total portfolio loans
                1.08
  
                1.08
  
                1.17
  
                1.24
  
                1.25
  
                         
Allowance for loan losses
                    
Allowance for loan losses
 $         47,638
  
 $         46,334
  
 $         45,284
  
 $         45,487
  
 $         44,909
  
Provision for credit losses
              1,708
  
              2,168
  
              2,376
  
              2,516
  
              2,383
  
Net loan and deposit account overdraft charge-offs
                 425
  
              1,063
  
              2,652
  
              1,888
  
              1,486
  
                         
Annualized net loan charge-offs /average loans
                0.03
 %
                0.07
 %
                0.16
 %
                0.12
 %
                0.09
 %
Allowance for loan losses / total portfolio loans
                0.70
 %
                0.73
 %
                0.71
 %
                0.71
 %
                0.70
 %
Allowance for loan losses / non-performing loans
                1.24
x
                1.18
x
                1.04
x
                1.08
x
                1.04
x
Allowance for loan losses / non-performing loans and
                    
 
loans past due
                0.89
x
                0.84
x
                0.79
x
                0.71
x
                0.70
x
                         
                         
     
Quarter Ended
  
     
June 30,
  
Mar. 31,
  
Dec. 31,
  
Sept. 30,
  
June 30,
  
     
2018
  
2018
  
2017
  
2017
  
2017
  
Capital ratios
                    
Tier I leverage capital
              10.21
%
              10.56
%
              10.39
%
              10.21
%
              10.09
%
Tier I risk-based capital
              14.26
  
              14.31
  
              14.12
  
              13.62
  
              13.36
  
Total risk-based capital
              15.26
  
              15.35
  
              15.16
  
              14.65
  
              14.38
  
Common equity tier 1 capital ratio (CET 1)
              12.38
  
              12.33
  
              12.14
  
              11.70
  
              11.44
  
Average shareholders' equity to average assets
              13.89
  
              14.02
  
              14.19
  
              14.08
  
              14.01
  
Tangible equity to tangible assets (3)
                8.43
  
                8.46
  
                8.79
  
                8.68
  
                8.53
  
                         
                         
(1) Excludes non-performing loans.
                    
(2) Criticized and classified loans may include loans that are also reported as non-performing or past due.
          
(3) See non-GAAP financial measures for additional information relating to the calculation of this ratio.
          
 
NON-GAAP FINANCIAL MEASURES
                      
Page 11
The following non-GAAP financial measures used by WesBanco provide information useful to investors in understanding WesBanco's operating performance and trends, and facilitate comparisons with the performance of WesBanco's peers. The following tables summarize the non-GAAP financial measures derived from amounts reported in WesBanco's financial statements.
   
Three Months Ended 
  
Year to Date
   
June 30,
  
Mar. 31,
  
Dec. 31,
  
Sept. 30,
  
June 30,
  
June 30,
(unaudited, dollars in thousands, except shares and per share amounts)
2018
  
2018
  
2017
  
2017
  
2017
  
2018
2017
Return on average assets, excluding after-tax merger-related expenses and net deferred tax asset revaluation:
 
Net income (annualized)
 $             133,039
  
 $         135,979
  
 $           63,068
  
 $         104,566
  
 $         105,653
  
 $         134,501
 $      105,322
 
Plus: after-tax merger-related expenses (annualized)  (1)
                  17,150
  
                   784
  
                1,170
  
                      -
  
                      -
  
                9,012
                643
 
Plus: net deferred tax asset revaluation (annualized)
                         -
  
                      -
  
              50,703
  
                      -
  
                      -
  
                      -
                   -
 
Net income excluding after-tax merger-related expenses and net deferred tax asset revaluation (annualized)
                150,189
  
            136,763
  
            114,941
  
            104,566
  
            105,653
  
            143,513
         105,965
                           
 
Average total assets
 $        10,918,731
  
 $      9,993,364
  
 $      9,907,944
  
 $      9,897,487
  
 $      9,828,475
  
 $    10,458,602
 $   9,805,106
                           
Return on average tangible assets, excluding after-tax merger-related expenses and net deferred tax asset revaluation
1.38%
  
1.37%
  
1.16%
  
1.06%
  
1.07%
  
1.37%
1.08%
                           
Return on average equity, excluding after-tax merger-related expenses and net deferred tax asset revaluation:
 
Net income (annualized)
 $             133,039
  
 $         135,979
  
 $           63,068
  
 $         104,566
  
 $         105,653
  
 $         134,501
 $      105,322
 
Plus: after-tax merger-related expenses (annualized)  (1)
                  17,150
  
                   784
  
                1,170
  
                      -
  
                      -
  
                9,012
                643
 
Plus: net deferred tax asset revaluation (annualized)
                         -
  
                      -
  
              50,703
  
                      -
  
                      -
  
                      -
                   -
 
Net income excluding after-tax merger-related expenses and net deferred tax asset revaluation (annualized)
                150,189
  
            136,763
  
            114,941
  
            104,566
  
            105,653
  
            143,513
         105,965
                           
 
Average total shareholders' equity
             1,517,036
  
         1,401,271
  
         1,406,263
  
         1,393,965
  
         1,377,266
  
         1,459,472
      1,367,489
                           
Return on average tangible equity, excluding after-tax merger-related expenses and net deferred tax asset revaluation
9.90%
  
9.76%
  
8.17%
  
7.50%
  
7.67%
  
9.83%
7.75%
                           
Return on average tangible equity:
                        
 
Net income (annualized)
 $             133,039
  
 $         135,979
  
 $           63,068
  
 $         104,566
  
 $         105,653
  
 $         134,501
 $      105,322
 
Plus: amortization of intangibles (annualized) (1)
                    4,156
  
                3,479
  
                3,104
  
                3,154
  
                3,233
  
                3,819
             3,294
 
Net income before amortization of intangibles (annualized)
                137,195
  
            139,458
  
              66,172
  
            107,720
  
            108,886
  
            138,320
         108,616
                           
 
Average total shareholders' equity
             1,517,036
  
         1,401,271
  
         1,406,263
  
         1,393,965
  
         1,377,266
  
         1,459,472
      1,367,489
 
Less: average goodwill and other intangibles, net of def. tax liability
              (652,318)
  
          (585,711)
  
          (584,227)
  
          (584,903)
  
          (585,057)
  
           (619,198)
       (585,210)
 
Average tangible equity
 $             864,718
  
 $         815,560
  
 $         822,036
  
 $         809,062
  
 $         792,209
  
 $         840,274
 $      782,279
                           
Return on average tangible equity
15.87%
  
17.10%
  
8.05%
  
13.31%
  
13.74%
  
16.46%
13.88%
                           
Return on average tangible equity, excluding after-tax merger-related expenses and net deferred tax asset revaluation:
 
Net income (annualized)
 $             133,039
  
 $         135,979
  
 $           63,068
  
 $         104,566
  
 $         105,653
  
 $         134,501
 $      105,322
 
Plus: after-tax merger-related expenses (annualized)  (1)
                  17,150
  
                   784
  
                1,170
  
                      -
  
                      -
  
                9,012
                643
 
Plus: net deferred tax asset revaluation (annualized)
                         -
  
                      -
  
              50,703
  
                      -
  
                      -
  
                      -
                   -
 
Plus: amortization of intangibles (annualized) (1)
                    4,156
  
                3,479
  
                3,104
  
                3,154
  
                3,233
  
                3,819
             3,294
 
Net income before amortization of intangibles and excluding
              
 
    after-tax merger-related expenses and net deferred tax asset revaluation (annualized)
                154,345
  
            140,242
  
            118,045
  
            107,720
  
            108,886
  
            147,332
         109,259
                           
 
Average total shareholders' equity
             1,517,036
  
         1,401,271
  
         1,406,263
  
         1,393,965
  
         1,377,266
  
         1,459,472
      1,367,489
 
Less: average goodwill and other intangibles, net of def. tax liability
              (652,318)
  
          (585,711)
  
          (584,227)
  
          (584,903)
  
          (585,057)
  
           (619,198)
       (585,210)
 
Average tangible equity
 $             864,718
  
 $         815,560
  
 $         822,036
  
 $         809,062
  
 $         792,209
  
 $         840,274
 $      782,279
                           
Return on average tangible equity, excluding after-tax merger-related expenses and net deferred tax asset revaluation
17.85%
  
17.20%
  
14.36%
  
13.31%
  
13.74%
  
17.53%
13.97%
                           
Efficiency ratio:
                        
 
Non-interest expense
 $               63,543
  
 $           54,571
  
 $           54,837
  
 $           55,754
  
 $           55,884
  
 $         118,114
 $      110,268
 
Less: restructuring and merger-related expense
                  (5,412)
  
                 (245)
  
                 (454)
  
                      -
  
                      -
  
               (5,657)
              (491)
 
Non-interest expense excluding restructuring and merger-related expense
                  58,131
  
              54,326
  
              54,383
  
              55,754
  
              55,884
  
            112,457
         109,777
                           
 
Net interest income on a fully taxable equivalent basis
                  83,691
  
              74,577
  
              75,805
  
              76,872
  
              74,758
  
            158,165
         148,111
 
Non-interest income
                  23,408
  
              23,980
  
              22,934
  
              20,899
  
              22,122
  
              47,491
           45,006
 
Net interest income on a fully taxable equivalent basis plus non-interest income
 $             107,099
  
 $           98,557
  
 $           98,739
  
 $           97,771
  
 $           96,880
  
 $         205,656
 $      193,117
 
Efficiency Ratio
54.28%
  
55.12%
  
55.08%
  
57.03%
  
57.68%
  
54.68%
56.84%
                           
Net income, excluding net deferred tax asset revaluation and  after-tax merger-related expenses:
 
Net income
 $               33,169
  
 $           33,529
  
 $           15,897
  
 $           26,356
  
 $           26,341
  
 $           66,698
 $        52,228
 
Add: Net deferred tax asset revaluation
                         -
  
                      -
  
              12,780
  
                      -
  
                      -
  
                      -
                   -
 
Add: After-tax merger-related expenses (1)
                    4,276
  
                   193
  
                   295
  
                      -
  
                      -
  
                4,469
                319
Net income, excluding net deferred tax asset revaluation and  after-tax merger-related expenses
 $               37,445
  
 $           33,722
  
 $           28,972
  
 $           26,356
  
 $           26,341
  
 $           71,167
 $        52,547
                           
                           
Net income, excluding net deferred tax asset revaluation and after-tax merger-related expenses per diluted share:
 
Net income per diluted share
 $                   0.71
  
 $               0.76
  
 $               0.36
  
 $               0.60
  
 $               0.60
  
 $               1.47
 $            1.19
 
Add: Net deferred tax asset revaluation per diluted share
                         -
  
                      -
  
                  0.29
  
                      -
  
                      -
  
                      -
                   -
 
Add: After-tax merger-related expenses per diluted share (1)
                      0.09
  
                      -
  
                  0.01
  
                      -
  
                      -
  
                  0.10
                   -
Net income, excluding net deferred tax asset revaluation and  after-tax merger-related expenses per diluted share
 $                   0.80
  
 $               0.76
  
 $               0.66
  
 $               0.60
  
 $               0.60
  
 $               1.57
 $            1.19
                           
                           
   
Period End
      
   
June 30,
Mar. 31,
Dec. 31,
Sept. 30,
June 30,
    
   
2018
  
2018
  
2017
  
2017
  
2017
      
Tangible book value per share:
                        
 
Total shareholders' equity
 $          1,524,106
  
 $      1,403,026
  
 $      1,395,321
  
 $      1,394,558
  
 $      1,377,537
      
 
Less:  goodwill and other intangible assets, net of def. tax liability
              (657,111)
  
          (585,316)
  
          (583,903)
  
          (584,543)
  
          (585,195)
      
 
Tangible equity
                866,995
  
            817,710
  
            811,418
  
            810,015
  
            792,342
      
                           
 
Common shares outstanding
           46,643,250
  
       44,060,957
  
       44,043,244
  
       44,033,585
  
       44,031,335
      
                           
Tangible book value per share
 $                 18.59
  
 $             18.56
  
 $             18.42
  
 $             18.40
  
 $             17.99
      
                           
Tangible equity to tangible assets:
                      
 
Total shareholders' equity
 $          1,524,106
  
 $      1,403,026
  
 $      1,395,321
  
 $      1,394,558
  
 $      1,377,537
      
 
Less:  goodwill and other intangible assets, net of def. tax liability
              (657,111)
  
          (585,316)
  
          (583,903)
  
          (584,543)
  
          (585,195)
      
 
Tangible equity
                866,995
  
            817,710
  
            811,418
  
            810,015
  
            792,342
      
                           
 
Total assets
           10,946,584
  
       10,245,419
  
         9,816,178
  
         9,918,277
  
         9,874,010
      
 
Less:  goodwill and other intangible assets, net of def. tax liability
              (657,111)
  
          (585,316)
  
          (583,903)
  
          (584,543)
  
          (585,195)
      
 
Tangible assets
 $        10,289,473
  
 $      9,660,103
  
 $      9,232,275
  
 $      9,333,734
  
 $      9,288,815
      
                           
Tangible equity to tangible assets
8.43%
  
8.46%
  
8.79%
  
8.68%
  
8.53%
      
                           
                           
(1) Tax effected at 21% for the periods in 2018 and 35% for all prior periods.