NEWS FOR IMMEDIATE RELEASE
October 19, 2005 For Further Information Contact:
Paul M. Limbert
President and Chief Executive Officer
or
Robert H. Young
Executive VP and Chief Financial Officer
(304) 234-9000
NASDAQ Trading Symbol: WSBC
Website: www.wesbanco.com
WesBanco Announces Third Quarter Earnings
Wheeling, WV…Paul M. Limbert, President and Chief Executive Officer of WesBanco, Inc., (NASDAQ: WSBC) a Wheeling, West Virginia based multi-state bank holding company, today announced earnings for the third quarter and nine months ended September 30, 2005.
Net income for the third quarter ended September 30, 2005 was $9.9 million as compared to $10.0 million for the third quarter of 2004, while diluted earnings per share for the third quarter ended September 30, 2005 were $0.44 compared to $0.50 for the same period in 2004. The third quarter of 2005 included a pre-tax charge of approximately $1.0 million, or $0.03 after-tax per diluted share, relating to the previously announced restructuring of certain business lines. Net income for the nine months ended September 30, 2005 increased 10.5% to $32.2 million as compared to $29.2 million for the same period in 2004, while diluted earnings per share for the nine months ended September 30, 2005 were $1.42 compared to $1.47 for 2004. The 2005 third quarter and year to date results include Winton Financial Corporation (“Winton”), a $550 million thrift institution acquired on January 3, 2005 and Western Ohio Financial Corporation (“Western Ohio”), a $400 million savings bank acquired on August 31, 2004. The third quarter of 2004 includes one month of Western Ohio’s results of operations.
“WesBanco made some intermediate and long-term decisions in the third quarter of 2005 that involved the restructuring of certain business lines within the company and the improvement of our banking center network. Our goal is to efficiently provide a high level of customer satisfaction while we create more value for our shareholders,” Mr. Limbert stated. “Late in the third quarter WesBanco announced the sale of four branch offices located in Ritchie County, WV. The sale is scheduled to be consummated in early 2006. WesBanco also closed a loan production office and restructured certain business lines which resulted in the immediate reduction of its workforce through layoffs and provided for additional reductions through attrition. New banking centers are planned for Wheeling, WV, and in the Columbus, OH suburbs of Reynoldsburg and Bexley. We will consolidate five existing banking centers into just two locations through new structures that are to be built in Barnesville, OH and Marietta, OH. We will improve our efficiency while we offer an expanded variety of services. This phase of restructuring helps position the company for future growth and increased profitability,” said Mr. Limbert.
Highlights for the three and nine month periods ended September 30, 2005:
| · | Net interest income for the third quarter and nine months ended September 30, 2005 increased $5.3 million or 19.5% and $20.0 million or 25.0%, respectively, compared to the same periods in 2004. Net interest margin for the third quarter and nine months ended September 30, 2005 was 3.46% and 3.49%, respectively compared to 3.52% and 3.63% for the corresponding periods in 2004, with the decrease primarily due to the acquired institutions having lower net interest margins than WesBanco, as well as current market conditions. The anticipated increase in market rates over the remainder of the year and into early 2006, as well as other competitive factors may result in a tightening margin over the near term. |
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| · | Non-interest income increased $0.6 million or 6.1% and $3.2 million or 12.2% over the third quarter and nine months ended September 30, 2004, respectively. Both the third quarter and year to date increases for 2005, as compared to the same periods in 2004, were driven by increased trust revenues, higher service charge revenue on deposit accounts due to an increase in fees and an increase in the number of accounts, including those from the acquisitions, and to a lesser extent, growth in ATM and debit card transaction income. Net securities gains were $0.1 million and $2.0 million for the third quarter and nine months ended September 30, 2005, respectively, compared to $1.2 million and $2.0 million for the same periods in 2004. |
| · | WesBanco’s provision for loan losses decreased $29 thousand or 1.3% and increased $0.4 million or 8.0% over the third quarter and nine months ended September 30, 2004, respectively. The increase for the year was primarily the result of higher net charge-offs due to an increase in consumer bankruptcies as individuals filed in advance of new bankruptcy laws which became effective October 17, 2005. The allowance for loan losses as a percentage of total loans was 1.11% at September 30, 2005, down from 1.23% at September 30, 2004, due to the acquired institutions having lower allowance percentages and a different portfolio composition than WesBanco as of the acquisition dates. |
| · | Non-interest expense increased $5.5 million or 24.8% and $17.5 million or 27.1% compared to the third quarter and nine months ended September 30, 2004. Both period increases were primarily due to increased staffing from the acquisitions, higher health care costs and overall higher operating costs due to the Winton and Western Ohio acquisitions. Included in the third quarter and nine month results was a pre-tax charge of approximately $1.0 million in severance payouts and related payroll taxes and health care costs relating to the restructuring. The staff reductions resulting from the third quarter restructuring had a minimal impact on non-interest expenses for the quarter. The restructuring is anticipated to reduce certain non-interest expenses, primarily salaries and employee benefits, beginning in October 2005 and is expected to result in cost savings of approximately $2.5 million in 2006. |
| · | The provision for income taxes for the third quarter of 2005 increased $0.6 million or 26.7% compared to 2004, and on a year to date basis for 2005, increased $2.2 million or 32.1% compared to 2004. The increase for both periods in 2005, compared to the same periods in 2004, was primarily due to an increase in pretax income, and to a lesser extent, the Winton and Western Ohio acquisitions which both had effective tax rates approximating 33% prior to the respective merger. For the third quarter of 2005, the effective tax rate was 21.8% compared to 17.8% for the same period in 2004, while on a year to date basis for 2005, it was 21.6% compared to 18.7% for the same period in 2004. |
| · | Total loans increased $447.2 million or 18.0% between December 31, 2004 and September 30, 2005. The increase was primarily due to the 2005 Winton acquisition, which added approximately $477 million to the loan portfolio at the time of the merger and continued organic loan growth in the commercial and commercial real estate categories, which was partially offset by the sale of $67.8 million of residential mortgage loans in June 2005. Loan growth in the third quarter of 2005, compared to the second quarter of 2005, was slower than expected due to the implementation of certain risk reduction strategies, as well as disciplined underwriting and pricing practices to preserve credit quality and improve targeted risk adjusted rates of return. |
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| · | Total deposits increased $313.4 million or 11.5% between December 31, 2004 and September 30, 2005 primarily due to the Winton acquisition. On a linked quarter basis from the second quarter of 2005, increases occurred in interest bearing demand deposits, savings and certificates of deposit categories, which was offset by declines in non-interest bearing demand and money market accounts. WesBanco has experienced a continued decrease in money market accounts as customers seek higher rates of return from certificates of deposit as well as other competitive products in the markets served by WesBanco. |
| · | For the quarter ended September 30, 2005, WesBanco repurchased a total of 186,328 shares and on a year to date basis for 2005 a total of 1,149,191 shares have been repurchased. The average price paid on a year to date basis for 2005 was $28.69 per share. WesBanco has 367,452 shares still remaining for repurchase under the current stock repurchase plan approved by the Board in March 2005. |
“Through our strategic and business planning processes, we will continue to analyze our business lines, product lines and overall corporate structure to continue to improve our efficiency, increase our profitability and provide higher shareholder value and returns. For the remainder of 2005, WesBanco will execute our previously announced restructuring plan and look to expand our presence in our new market areas. In the last quarter of the year, we will roll out a new marketing campaign that will energize the WesBanco brand around our customers’ satisfaction with the overall WesBanco banking experience and new products and services,” said Mr. Limbert.
WesBanco is a multi-state bank holding company with total assets of approximately $4.4 billion, currently operating through 85 banking offices, 1 loan production office, and 124 ATMs in West Virginia, Ohio, and Pennsylvania. WesBanco’s banking subsidiary is WesBanco Bank, Inc., headquartered in Wheeling, West Virginia. In addition, WesBanco operates an insurance brokerage company, WesBanco Insurance Services, Inc., and a full service broker/dealer, WesBanco Securities, Inc. that also operates Mountaineer Securities, WesBanco’s discount brokerage operation.
Forward-looking statements in this press release 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 press release should be read in conjunction with WesBanco’s 2004 Annual Report on Form 10-K, as well as the Form 10-Q for the prior quarter ended June 30, 2005, filed with the Securities and Exchange Commission (“SEC”), 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 2004 Annual Report on Form 10-K filed with the SEC under the section “Risk Factors.” Such statements are subject to important factors that could cause actual results to differ materially from those contemplated by such statements, including without limitation; the expected cost savings and any revenue synergies from the mergers may not be fully realized within the expected timeframes; disruption from the mergers 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 the parent company 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, Federal Deposit Insurance Corporation, the SEC, the National Association of Securities Dealers and other regulatory bodies; potential legislative and federal and state regulatory actions and reform; competitive conditions in the financial services industry; rapidly changing technology affecting financial services and/or other external developments materially impacting WesBanco’s operational and financial performance. WesBanco does not assume any duty to update forward-looking statements.
### See attached financial highlights.
