NEWS FOR IMMEDIATE RELEASE
April 16, 2003 For Further Information Contact:
Paul M. Limbert
President & CEO
or
Robert H. Young
Executive VP & CFO
(304) 234-9000
NASDAQ Trading Symbol: WSBC
Website: www.wesbanco.com
WesBanco Announces Increased First Quarter 2003 Earnings
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Wheeling, WV... Paul M. Limbert, President & CEO of WesBanco, Inc., a
Wheeling, West Virginia based multi-state bank holding company, today
announced earnings for the first quarter ended March 31, 2003.
Mr. Limbert stated that WesBanco's net income for the first quarter of
2003 increased 10.2% to $8.9 million, compared to $8.1 million for the
first quarter of 2002. Earnings per share increased 4.8% to $0.44,
compared to $0.42 for the first quarter of 2002. Return on average assets
was 1.09% for the first quarter ended March 31, 2003, compared to 1.21% in
2002, and return on average equity was 11.14% and 11.63%, respectively.
The results for 2002 reflect the acquisition of American Bancorporation
("American") as of March 1, 2002.
"I am very pleased with WesBanco's earnings performance for the first quarter.
With the current historically low interest rate environment, as well as the
continuing weak economic conditions facing our country and our market area, we
have increased our earnings per share 4.8%, compared to the first quarter of
2002," said Paul M. Limbert, President and Chief Executive Officer. "WesBanco
continues to explore new products, services, and potential acquisitions in
order to increase earnings and maximize total return to shareholders."
Taxable equivalent net interest income increased $1.3 million or 5.0%, compared
to the first quarter in 2002. Average earning assets increased $505.1 million
or 20.2%, compared to the first quarter in 2002. The increase in net interest
income due to earning asset growth was partially
offset by a decrease in the net interest margin to 3.65%, compared to 4.18% for
the first quarter in 2002. The margin decrease resulted from a combination of
factors, including the American acquisition with its lower overall net interest
margin, commercial and mortgage loan refinancing at historically low rates,
lower new loan demand, rate floors on deposit accounts causing rate compression
between loan and deposit products and lower yields on investment security
reinvestments. With interest rates at historical lows, WesBanco anticipates
continued loan and security prepayments, which may result in an additional
reduction in the net interest margin for the remainder of the year. Management
actions may reduce the impact of this anticipated reduction, by decreasing
certain core deposit rates, expansion of home equity, residential mortgage and
commercial loan volumes and the purchase of additional intermediate-term
securities.
Non-interest income, excluding net securities gains, increased $1.3 million or
22.1%, compared to the first quarter in 2002. The increase is related to
growth in deposit activity fees, increases in ATM and debit card interchange
income and an increase in bank owned life insurance income as a result of a
new investment of $40.0 million at year end 2002. Trust fees decreased $0.1
million or 4.3%, compared to the first quarter in 2002, primarily due to the
continued decline in the equity markets somewhat offset by new account
relationships. The market value of trust assets under management was $2.3
billion at March 31, 2003, compared to $2.8 billion at March 31, 2002 and
$2.3 billion at December 31, 2002. Net securities gains decreased $0.2
million or 14.3%, compared to the first quarter in 2002.
The provision for loan losses decreased $0.3 million or 11.6%, compared to the
first quarter in 2002. This reduction reflects several credit quality factors
such as lower delinquency rates, an overall decrease in net charge-offs and
management's evaluation of the adequacy of the allowance for loan losses. Net
loan charge-offs as a percentage of average total loans on an annualized basis
was 0.34%, compared to 0.67% for the first quarter in 2002.
The allowance for loan losses at March 31, 2003 was $25.5 million, compared to
$24.2 million at March 31, 2002, representing 1.40% as a percentage of total
loans. The allowance currently provides coverage of 2.22 times non-performing
loans and 1.25 times non-performing loans plus loans past due 90 days or more.
Non-performing loans, excluding loans past due 90 days or more, increased $1.8
million or 18.7%, compared to the first quarter in 2002, primarily due to
economic factors in WesBanco's regional markets. However, loans past due 90
days or more decreased $3.1
2
million or 25.7%, compared to the first quarter in 2002,
as a result of increased collection efforts on loans that did not migrate to
non-performing status. Non-performing loans as a percentage of total loans
were 0.63% at March 31, 2003, compared to 0.52% at March 31, 2002.
Non-interest expense, excluding merger-related expenses, increased $3.3 million
or 19.5%, compared to the first quarter in 2002. The increase was partially
related to an increase in operational costs associated with the additional
banking offices and related expenses acquired in the American transaction.
WesBanco also experienced a $1.3 million or 14.8% increase in salary and
employee benefit costs due to a $0.7 million or 9.3% increase in salary
expense and a $0.4 million or 208.1% increase in pension costs. Pension
expense for all of 2003 is expected to approximate $2.2 million, compared
to $0.6 million for 2002. Other factors influencing expenses in the first
quarter of 2003 included higher consulting expenses due to several ongoing
technology initiatives, higher marketing expenses and certain branch
renovation and maintenance expenses. During the quarter, three branches
were closed through consolidation with nearby locations, completing the
WesBanco/American branch integration plan.
The provision for income taxes decreased $1.1 million or 33.8%, compared to
the first quarter in 2002. The effective tax rate declined to 19.6%,
compared to 28.8% for the first quarter in 2002. The decrease in the effective
tax rate was primarily due to an increase in state and municipal tax-exempt
interest income and income on bank owned life insurance, as well as the
implementation of certain income tax strategies.
Total loans decreased $42.4 million or 2.3% at March 31, 2003, compared to
March 31, 2002, reflecting declines in consumer and real estate loans, which
more than offset a modest increase in commercial loans. The decrease in
consumer loans resulted from an anticipated reduction in the indirect
automobile lending area caused by ongoing risk and profitability management
initiatives and increased competition for these loans from automobile
manufacturing finance companies offering low or zero interest rate loans
primarily in the new car segment. The decline in real estate loans
reflected increased prepayments of both higher fixed rate and adjustable
rate mortgages as customers sought to lock in lower fixed rate loans. The
increase in commercial loans reflects continued
demand for commercial real estate loans as many investors seek alternatives to
the equity and bond markets.
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Total investment securities increased $181.4 million or 17.7% at March 31,
2003, compared to March 31, 2002. The increase in investment securities was
primarily due to increased liquidity as core deposits grew, coupled with a
decrease in mortgage and consumer loans. Cash flows from the portfolio have
increased over the last few months, primarily due to sales, calls and
increased prepayments. As a result, WesBanco has reinvested these cash flows
into lower yielding securities which decreased the portfolio's tax equivalent
yield for the first quarter of 2003 to 5.35% from last year's 6.06% and the
fourth quarter's 5.51%. Cash flows on the investment portfolio are projected
to be higher throughout the year due to the current low interest rates and
the shorter duration of the portfolio as compared to the prior year.
Total deposits increased $69.3 million or 2.9% at March 31, 2003, compared to
the prior year and $55.6 million or 2.3%, compared to December 31, 2002.
Compared to year-end, certificates of deposits increased $28.8 million or 3.0%
and money market accounts increased $14.9 million or 2.9%. Deposit growth,
compared to the first quarter in 2002, resulted from increases in money market
deposit accounts, interest bearing and non-interest bearing demand deposits.
These increases were partially offset by decreases in certificates of deposit
and savings account products due to customers choosing higher rate money market
products over fixed rate longer term deposit accounts.
Shareholders' equity remained strong for the quarter ended March 31, 2003
highlighted by a Tier I leverage ratio of 8.43%, compared to 10.54% at
March 31, 2002. Book value increased to $15.89 per share from $15.38 per
share last year.
As of March 31, 2003, WesBanco had repurchased a total of 791,492 shares
through the current one million-share stock repurchase plan approved by
the Board on June 20, 2002. The timing, price and quantity of purchases
are at the discretion of WesBanco and the program may be discontinued or
suspended at any time. In the first quarter of 2003 WesBanco repurchased
a total of 282,893 shares through its stock repurchase plan at an average
cost of $23.88 per share.
WesBanco is a multi-state bank holding company presently operating through 72
banking offices and 102 ATM machines in West Virginia, Central and Eastern
Ohio and Western Pennsylvania. The American acquisition increased WesBanco's
market share in the tri-state area while providing expansion into new markets
in Washington, Pennsylvania and Columbus and Cambridge, Ohio. WesBanco is the
second largest bank holding company headquartered in West
4
Virginia with the third overall deposit market share. Its banking subsidiary
is WesBanco Bank, Inc., headquartered in Wheeling, West Virginia. In addition,
WesBanco operates an insurance 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 the company's most recent annual report
filed with the Securities and Exchange Commission on Form 10-K for the year
ended December 31, 2002. Investors are cautioned that forward-looking
statements, which are not historical fact, involve risks and uncertainties.
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 effect 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 and Federal Deposit
Insurance Corporation; 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.
5
WESBANCO, INC.
Consolidated Selected Financial Highlights
March 31, 2003 and 2002 and December 31, 2002
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(unaudited, dollars in thousands)
Balance sheet (period end) March 31, December 31,
- -------------------------- ----------------------------------- ---------------
Assets 2003 2002 2002
----------------------------------- ---------------
Cash and due from banks $ 98,568 $ 74,547 $ 80,101
Due from banks - Interest bearing 1,138 1,079 984
Federal funds sold 20,000 36,300 -
Securities 1,205,979 1,024,556 1,193,896
Loans:
Commercial 843,117 804,887 810,973
Real Estate 684,911 702,376 691,783
Personal 297,362 360,510 318,129
--------------- --------------- ---------------
Total loans 1,825,390 1,867,773 1,820,885
Allowance for loan losses (25,516) (24,219) (25,080)
--------------- --------------- ---------------
Net loans 1,799,874 1,843,554 1,795,805
--------------- --------------- ---------------
Premises and equipment 55,475 57,445 55,725
Goodwill 49,520 47,001 49,520
Other intangibles 9,017 15,971 9,310
Other assets 116,856 64,172 111,890
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Total Assets $ 3,356,427 $ 3,164,625 $ 3,297,231
=============== =============== ===============
Liabilities and Shareholders' Equity
Non-interest bearing demand deposits $ 304,530 $ 275,981 $ 301,262
Interest bearing demand deposits 280,612 269,805 276,131
Money market accounts 522,938 446,048 508,062
Savings deposits 361,504 381,848 357,290
Certificates of deposit 985,956 1,012,544 957,211
--------------- --------------- ---------------
Total deposits 2,455,540 2,386,226 2,399,956
--------------- --------------- ---------------
Other borrowings 512,716 406,920 518,958
Trust preferred securities 12,650 12,650 12,650
Other liabilities 54,508 31,412 40,496
Shareholders' equity 321,013 327,417 325,171
--------------- --------------- ---------------
Total Liabilities and Shareholders' Equity $ 3,356,427 $ 3,164,625 $ 3,297,231
=============== =============== ===============
Average balance sheet and For the Three Months Ended
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net interest analysis March 31, December 31,
- --------------------- ------------------------------------------------------------ -------------------------
2003 2002 2002
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Average Average Average Average Average Average
Volume Rate Volume Rate Volume Rate
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Loans, net of unearned income $ 1,816,433 6.42% $ 1,648,221 7.39% $ 1,819,943 6.71%
Securities:
Taxable 785,351 4.38% 563,830 5.37% 810,819 4.63%
Tax-exempt 371,797 7.39% 255,405 7.57% 368,738 7.45%
------------------------- ------------------------- -----------------------
Total securities 1,157,148 5.35% 819,235 6.06% 1,179,557 5.51%
Federal funds sold 33,180 1.17% 34,235 1.61% 31,694 1.55%
------------------------- ------------------------- ------------------------
Total earning assets 3,006,761 5.95% 2,501,691 6.87% 3,031,194 6.19%
Other assets 286,997 194,152 248,962
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Total Assets $ 3,293,758 $ 2,695,843 $ 3,280,156
============= ============= =============
Liabilities and Shareholders' Equity
Interest bearing demand deposits $ 276,748 0.45% $ 252,191 0.75% $ 277,884 0.49%
Money market accounts 514,607 2.28% 422,517 2.97% 504,617 2.37%
Savings deposits 358,244 0.79% 300,311 1.10% 359,674 0.92%
Certificates of deposit 972,013 3.64% 846,988 4.55% 966,611 3.82%
------------------------- ------------------------- -----------------------
Total interest bearing deposits 2,121,612 2.41% 1,822,007 3.09% 2,108,786 2.54%
Other borrowings 510,385 3.32% 309,648 3.46% 502,261 3.51%
Trust preferred securities 12,650 8.70% 4,357 8.56% 12,650 8.62%
------------------------- ------------------------- -----------------------
Total interest bearing liabilities 2,644,647 2.62% 2,136,012 3.16% 2,623,697 2.76%
------------------------- ------------------------- -----------------------
Non-interest bearing demand deposits 290,300 252,136 292,616
Other liabilities 35,098 26,233 35,661
Shareholders' equity 323,713 281,462 328,182
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Total Liabilities and
Shareholders' Equity $ 3,293,758 $ 2,695,843 $ 3,280,156
============= ============= =============
Taxable equivalent net yield on
average earning assets 3.65% 4.18% 3.80%
========== ========= ==========
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WESBANCO, INC.
Consolidated Selected Financial Highlights
March 31, 2003 and 2002 and December 31, 2002
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(unaudited, dollars in thousands, except per share amounts)
For the Three Months Ended
--------------------------------------------
March 31, December 31,
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Statement of income 2003 2002 2002
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Interest income $ 41,905 $ 40,869 $ 44,734
Interest expense 17,063 16,618 18,226
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Net interest income 24,842 24,251 26,508
Provision for loan losses 1,980 2,239 2,603
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Net interest income after
provision for loan losses 22,862 22,012 23,905
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Non-interest income
Trust fees 2,982 3,115 3,180
Service charges on deposits 2,696 2,291 2,889
Other income 1,563 524 852
Net securities gains 1,006 1,174 529
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Total non-interest income 8,247 7,104 7,450
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Non-interest expense
Salaries and employee benefits 10,441 9,097 9,843
Net occupancy 1,491 1,102 1,302
Equipment 1,818 1,383 1,752
Other operating 6,213 5,129 6,364
Merger-related expenses (1) 92 1,066 392
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Total non-interest expense 20,055 17,777 19,653
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Income before income taxes 11,054 11,339 11,702
Provision for income taxes 2,165 3,271 2,582
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Net income $ 8,889 $ 8,068 $ 9,120
============= ============= =============
Taxable equivalent
net interest income $ 27,246 $ 25,943 $ 28,909
Per common share data
- ---------------------
Net income (2) $ 0.44 $ 0.42 $ 0.44
Dividends declared 0.24 0.23 0.235
Book value (period end) 15.89 15.38 15.89
Tangible book value (period end) 12.99 12.42 13.02
Average shares outstanding 20,366,287 19,016,622 20,641,964
Period end shares outstanding 20,202,078 21,283,506 20,461,745
Profitability ratios (annualized)
- ---------------------------------
Return on average assets 1.09% 1.21% 1.10%
Return on average equity 11.14% 11.63% 11.02%
Yield on earning assets (3) 5.95% 6.87% 6.19%
Cost of interest bearing liabilities 2.62% 3.16% 2.76%
Net interest margin (3) 3.65% 4.18% 3.80%
Efficiency (3), (4) 57.81% 49.82% 53.16%
(1) merger-related expenses are primarily related to the acquisition of
American Bancorporation.
(2) basic and diluted were the same.
(3) taxable equivalent basis.
(4) excludes merger-related items, net securities gains and net losses on sale
of assets.
7
WESBANCO, INC.
Consolidated Selected Financial Highlights
March 31, 2003 and 2002 and December 31, 2002
(unaudited, dollars in thousands)
March 31, December 31,
----------------------------- -------------
Asset quality data 2003 2002 2002
- ------------------ ------------- ------------- -------------
Non-performing assets:
Non-accrual loans $ 10,846 $ 7,038 $ 7,480
Renegotiated loans 665 2,657 2,646
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Total non-performing loans 11,511 9,695 10,126
Other real estate and
repossessed assets 4,659 3,239 4,213
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Total non-performing loans
and assets $ 16,170 $ 12,934 $ 14,339
============= ============= =============
Loans past due 90 days or more $ 8,892 $ 11,961 $ 12,105
Allowance for loan losses 25,516 24,219 25,080
Net loan charge-offs
(quarter-to-date) 1,544 2,709 2,415
Allowance for loan losses/non-
performing loans 2.22 X 2.50 X 2.48 X
Allowance for loan losses/non-
performing loans and past
due 90 days or more 1.25 X 1.12 X 1.13 X
Allowance for loan
losses/total loans 1.40 % 1.30 % 1.38 %
Non-performing
assets/total assets 0.48 0.41 0.43
Non-performing assets/total
loans, other real estate
and repossessed assets 0.88 0.69 0.79
Non-performing loans/total loans 0.63 0.52 0.56
Non-performing loans and loans
past due 90 days or more/
total loans 1.12 1.16 1.22
Net loan charge-offs
(annualized) /average loans 0.34 0.67 0.53
Regulatory Guidelines
-------------------------------
Well
Capital ratios Minimum Capitalized
- -------------- ----------- --------------
Tier I leverage capital 4.00 % 5.00 % 8.43 % 10.54 % 8.53 %
Tier I risk-based capital 4.00 6.00 12.75 13.33 12.95
Total risk-based capital 8.00 10.00 13.94 14.49 14.13
8