1
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The Shareholders' Annual Report includes the materials required in Form 10-K
filed with the Securities and Exchange Commission. The integration of the two
documents gives stockholders and other interested parties timely, efficient and
comprehensive information on 1993 results. Portions of the Annual Report are not
required by the Form 10-K report and are not filed as part of the Corporation's
Form 10-K. Only those portions of the Annual Report referenced in the cross-
reference index are incorporated in the Form 10-K. The report has not been
approved or disapproved by the Securities and Exchange Commission, nor has the
Commission passed upon its accuracy or adequacy.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
(MARK ONE)
/X/ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT
OF 1934 (FEE REQUIRED)
FOR THE FISCAL YEAR ENDED DECEMBER 31, 1993
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
ACT OF 1934 (NO FEE REQUIRED)
FOR THE TRANSITION PERIOD FROM TO
COMMISSION FILE NUMBER 0-8467
WESBANCO, INC.
(Exact name of Registrant as specified in its charter)
WEST VIRGINIA 55-0571723
(State or other jurisdiction of incorporation or (I.R.S. Employer Identification No.)
organization)
1 BANK PLAZA, WHEELING, WV 26003
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: 304-234-9000
Securities registered pursuant to Section 12(b) of the Act: None
SECURITIES REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT:
TITLE OF EACH CLASS NAME OF EACH EXCHANGE ON WHICH
REGISTERED
Common Stock $2.0833 Par Value National Association of Securities Dealers,
Inc.
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. Yes /X/ No / /
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes /X/ No / /
The aggregate market value of voting stock computed using the average of
the bid and ask prices held by non-affiliates of the Registrant on March 4, 1994
was approximately $218,689,000.
(APPLICABLE ONLY TO CORPORATE REGISTRANTS)
As of March 4, 1994, there were 8,673,065 shares of Wesbanco, Inc. Common
Stock $2.0833 par value, outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the Registrant's definitive proxy statement to be filed
pursuant to Regulation 14A not later than 120 days after the end of the fiscal
year (December 31, 1993) are incorporated by reference in part III.
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WESBANCO, INC.
CROSS REFERENCE INDEX FORM 10-K
ITEM
NUMBER ITEM PAGE(S)
- - ------- -------------------------------------------------------------------- --------------
PART I
1 Business 3-7, 26-37
2 Properties 7
3 Legal proceedings 8
4 Submission of matters to a vote of security holders (Note 1)
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PART II
5 Market for the registrant's common equity and related stockholder
matters 37
6 Selected financial data 9-26
7 Management's discussion and analysis of financial condition and
results of operations 26-37
8 Financial statements and supplementary data
Financial statements of consolidated subsidiaries engaged in the
business referred to in Rule 3-05 of Regulation S-X have been
omitted since they are not individually or in the aggregate required
pursuant to such Rule.
Consolidated Balance Sheets as of December 31, 1993 and 1992 10
Consolidated Statements of Income for the years ended December 31,
1993, 1992 and 1991 11
Consolidated Statements of Changes in Shareholders' Equity for the
years ended December 31, 1993, 1992 and 1991 12
Consolidated Statements of Cash Flows for the years ended December
31, 1993, 1992 and 1991 13
Notes to Consolidated Financial Statements 14-24
Report of Independent Accountants 9
9 Changes in and disagreements with accountants on accounting and
financial disclosure Not Applicable
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PART III
10 Directors and Executive officers of the registrant (Note 1)
11 Executive compensation (Note 1)
12 Security ownership of certain beneficial owners and management (Note
1)
13 Certain relationships and related transactions (Note 1)
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PART IV
Item 14. Exhibits, financial statement schedules and reports on Form 8-K
(A) CERTAIN DOCUMENTS FILED AS PART OF THE FORM 10-K
Financial statements--see Item 8
Report of Independent Accountants--Price Waterhouse--see Item 8
Report of Independent Accountants--Dixon, Francis, Davis & Oneson, Inc.;
The First National Bank of Barnesville
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NOTE 1 Incorporated by reference to WesBanco, Inc.'s Proxy Statement dated March
29, 1994, for Annual Meeting of Stockholders held April 20, 1994.
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(B) REPORTS ON FORM 8-K
No reports on Form 8-K were filed for the three months ended December
31, 1993
All schedules normally required by Form 10-K are omitted because they are
either not applicable or the required information is set forth in the financial
statements or in the notes related thereto.
(C) EXHIBITS REQUIRED BY ITEM 601 OF REGULATION S-K.
EXHIBIT TITLE
- - ------ ---------------------------------------------------------------------------
3.1 Articles of Incorporation of WesBanco, Inc. (B), (C)
3.2 Bylaws of WesBanco, Inc. (A)
4 Specimen Certificate WesBanco, Inc. common stock (B)
10.1 WesBanco, Inc. Director's Deferred Compensation Agreement (A)
10.2 WesBanco, Inc. Employment Agreements (C)
13 Annual Report to Shareholders, as listed in Part II
21 Subsidiaries of WesBanco, Inc., pages 41
22 Proxy Statement for the Annual Shareholders meeting to be held April 20, 1994
24 Power of Attorney
99.1 Accountants Report dated January 24, 1994 on WesBanco, Inc. Financial
Statements for the three years ended December 31, 1993
99.2 Accountants Report dated April 10, 1992 on the First National Bank of
Barnesville Financial Statements for the year ended December 31, 1991
(A) These exhibits are being incorporated by reference with respect to a prior
Registration Statement filed by the Registrant on Form S-4 under
Registration No. 33-15342 which was filed with the Securities & Exchange
Commission on June 25, 1987.
(B) These exhibits are being incorporated by reference with respect to a prior
Annual Report Form 10-K filed by the Registrant on Form 10-K dated December
31, 1988 which was filed with the Securities & Exchange Commission on March
30, 1989.
(C) These exhibits are being incorporated by reference with respect to a prior
Registration Statement filed by the Registrant on Form S-4 under
Registration No. 33-72228, as exhibit numbers 3.1, 10.3-10.18, which was
filed with the Securities & Exchange Commission on January 11, 1994.
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BUSINESS
As of December 31, 1993, the Corporation had eight banking affiliates
located in Wheeling, Wellsburg, Charleston, Elizabeth, Sissonville, Parkersburg
and Kingwood, West Virginia. The Registrant has one banking affiliate in
Barnesville, Ohio. As of February 28, 1994, the Registrant had a total of
thirteen banking affiliates, with the most recent acquisition headquartered in
Fairmont, West Virginia. WesBanco Wheeling has nine offices, three located
within the city of Wheeling, two located in Follansbee, West Virginia, three in
New Martinsville, West Virginia and one in Sistersville, West Virginia. WesBanco
Elm Grove has two offices located in the Elm Grove section of Wheeling. WesBanco
Kingwood has two full-service branch offices located in Masontown and Bruceton
Mills. WesBanco Barnesville has five offices, two located in Barnesville and one
each in Bethesda, Woodsfield and Beallsville, Ohio. First Fidelity Bancorp,
Inc., which was acquired February 28, 1994, has four banking subsidiaries
located in Fairmont, Bridgeport, Shinnston and Morgantown, West Virginia. First
National Bank in Fairmont has four offices located in Fairmont. First Bank
Shinnston has four offices, two in Shinnston and one each in Bridgeport and
Nutter Fort. Bridgeport Bank has three offices located in Bridgeport. Central
National Bank of Morgantown has two offices in Morgantown. There are
approximately 775 full time equivalent employees employed by all affiliates,
including First Fidelity Bancorp, Inc., as of December 31, 1993.
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WesBanco, Inc. through its subsidiaries, conducts a general banking,
commercial and trust business. Its full service banks offer a wide range of
services to commercial, consumer and government bodies, including but not
limited to, retail banking services, such as demand, savings and time deposits;
commercial, mortgage, and consumer installment loans; credit card services
through VISA and MasterCard; personal and corporate trust services; discount
brokerage services; and travel services. Most affiliates are participating in
local partnerships which operate banking machines in those local regions
primarily under the name of MAC. The banking machines are linked to CIRRUS, a
nationwide banking network.
The Corporation has reported to its shareholders that it may engage in
other activities of a financial nature authorized by the Board of Governors
through a subsidiary, or through acquisition of established companies.
As of December 31, 1993, none of the affiliates were engaged in any
operation in foreign countries and none has had transactions with customers in
foreign countries.
COMPETITION
Each affiliate bank faces strong competition for local business in their
respective market areas. Competition exists for new deposits, in the scope and
types of services offered, and the interest rates paid on time deposits and
charged on loans, and in other aspects of banking. The affiliate banks encounter
substantial competition not only from other commercial banks but also from other
financial institutions. Savings banks, savings and loan associations, brokerage
business and credit unions actively compete for deposits. Such institutions, as
well as consumer finance companies, insurance companies and other enterprises,
are important competitors for various types of lending business. In addition,
personal and corporate trust services and investment counseling services are
offered by insurance companies, investment counseling firms and other business
firms and individuals.
SUPERVISION AND REGULATION
As a registered bank holding company, WesBanco is subject to the
supervision of the Federal Reserve Board and is required to file with the
Federal Reserve Board reports and other information regarding its business
operations and the business operations of its subsidiaries. WesBanco is also
subject to examination by the Federal Reserve Board and is required to obtain
Federal Reserve Board approval prior to acquiring, directly or indirectly,
ownership or control of voting shares of any bank, if, after such acquisition,
it would own or control more than 5% of the voting stock of such bank. In
addition, pursuant to federal law and regulations promulgated by the Federal
Reserve Board, WesBanco may only engage in, or own or control companies that
engage in, activities deemed by the Federal Reserve Board to be so closely
related to banking as to be a proper incident thereto. Prior to engaging in most
new business activities, WesBanco must obtain approval from the Federal Reserve
Board.
WesBanco's banking subsidiaries have deposits insured by the Bank Insurance
Fund ("BIF") of the Federal Deposit Insurance Corporation (the "FDIC"), and are
subject to supervision, examination, and regulation by the OCC, or by state
banking authorities and either the FDIC or the Federal Reserve Board. In
addition to the impact of federal and state supervision and regulation, the
banking subsidiaries of WesBanco are affected significantly by the actions of
the Federal Reserve Board as it attempts to control the money supply and credit
availability in order to influence the economy.
WesBanco's depository institution subsidiaries are subject to affiliate
transaction restrictions under federal law which limit the transfer of funds by
the subsidiary banks to their parent and any nonbanking subsidiaries, whether in
the form of loans, extensions of credit, investments or asset purchases. Such
transfers by any subsidiary bank to its parent corporation or to any nonbanking
subsidiary are limited in amount to 10% of the institution's capital and surplus
and, with respect to such parent and all such nonbanking subsidiaries, to an
aggregate of 20% of any such institution's capital and surplus. Furthermore,
such loans and extensions of credit are required to be secured in specified
amounts.
The Federal Reserve Board has a policy to the effect that a bank holding
company is expected to act as a source of financial and managerial strength to
each of its subsidiary banks and to commit resources to support
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each such subsidiary bank. Under the source of strength doctrine, the Federal
Reserve Board may require a bank holding company to make capital injections into
a troubled subsidiary bank, and may charge the bank holding company with
engaging in unsafe and unsound practices for failure to commit resources to such
a subsidiary bank. This capital injection may be required at times when WesBanco
may not have the resources to provide it. Any capital loans by a holding company
to any of the subsidiary banks are subordinate in right of payment to deposits
and to certain other indebtedness of such subsidiary bank. Moreover, in the
event of a bank holding company's bankruptcy, any commitment by such holding
company to a federal bank regulatory agency to maintain the capital of a
subsidiary bank will be assumed by the bankruptcy trustee and entitled to a
priority of payment.
In 1989, the United States Congress passed comprehensive financial
institutions legislation known as the Financial Institution Reform, Recovery,
and Enforcement Act ("FIRREA"). FIRREA established a new principle of liability
on the part of depository institutions insured by the FDIC for any losses
incurred by, or reasonably expected to be incurred by, the FDIC after August 9,
1989, in connection with (i) the default of a commonly controlled FDIC-insured
depository institution, or (ii) any assistance provided by the FDIC to a
commonly controlled FDIC-insured depository institution in danger of default.
"Default" is defined generally as the appointment of a conservator or receiver
and "in danger of default" is defined generally as the existence of certain
conditions indicating that a "default" is likely to occur in the absence of
regulatory assistance. Accordingly, in the event that any insured bank
subsidiary of WesBanco causes a loss to the FDIC, other bank subsidiaries of
WesBanco could be required to compensate the FDIC by reimbursing to it the
amount of such loss.
Federal law permits the OCC to order the pro rata assessment of
shareholders of a national bank whose capital stock has become impaired, by
losses or otherwise to relieve a deficiency in such national bank's capital
stock. This statute also provides for the enforcement of any such pro rata
assessment of shareholders of such national bank to cover such impairment of
capital stock by sale, to the extent necessary, of the capital stock of any
assessed shareholder failing to pay the assessment. Similarly, the laws of
certain states provide for such assessment and sale with respect to the
subsidiary banks chartered by such states. WesBanco, as the sole shareholder of
its subsidiary banks, is subject to such provisions.
DIVIDEND RESTRICTIONS
There are statutory limits on the amount of dividends WesBanco's depository
institution subsidiaries can pay to their parent corporation without regulatory
approval. Under applicable federal regulations, appropriate bank regulatory
agency approval is required if the total of all dividends declared by a bank in
any calendar year exceeds the available retained earnings and exceeds the
aggregate of the bank's net profits (as defined by regulatory agencies) for that
year and its retained net profits for the preceding two years, less any required
transfers to surplus or a fund for the retirement of any preferred stock.
In addition, national banks may not pay a dividend in an amount greater
than such bank's net profits after deducting its losses and bad debts. For this
purpose, bad debts are defined to include, generally, loans which have matured
and are in arrears with respect to interest by six months or more, other than
such loans which are well secured and in the process of collection.
If, in the opinion of the applicable regulatory authority, a bank under its
jurisdiction is engaged in or is about to engage in an unsafe or unsound
practice (which, depending on the financial condition of the bank, could include
the payment of dividends), such authority may require, after notice and hearing,
that such bank cease and desist from such practice. The Federal Reserve Board,
the OCC and the FDIC have issued policy statements which provide that insured
banks and bank holding companies should generally only pay dividends out of
current operating earnings.
FDIC INSURANCE
The FDIC has the authority to raise the insurance premiums for institutions
in the BIF to a level necessary to achieve a target reserve level of 1.25% of
insured deposits within not more than 15 years. In addition, the FDIC has the
authority to impose special assessments in certain circumstances. The level of
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deposit premiums affects the profitability of subsidiary banks and thus the
potential flow of dividends to parent companies.
Under a transitional risk-based insurance assessment system that became
effective January 1, 1993, the FDIC places each insured depository institution
in one of nine risk categories based on its level of capital and other relevant
information (such as supervisory evaluations). The assessment rates under the
new system range from 0.23% to 0.31% depending upon the assessment category into
which the insured institution is placed.
On June 17, 1993, the FDIC adopted a permanent risk-based assessment system
for assessment periods beginning on and after January 1, 1994. The permanent
system retains the transitional system without substantial modification. It is
possible that the FDIC insurance assessments will be increased in the future.
CAPITAL REQUIREMENTS
The Federal Reserve Board has issued risk-based capital guidelines for bank
holding companies, such as WesBanco. The guidelines establish a systematic
analytical framework that makes regulatory capital requirements more sensitive
to differences in risk profiles among banking organizations, takes off-balance
sheet exposures into explicit account in assessing capital adequacy, and
minimizes disincentives to holding liquid, low-risk assets. Under the guidelines
and related policies, bank holding companies must maintain capital sufficient to
meet both a risk-based asset ratio test and leverage ratio test on a
consolidated basis. The risk-based ratio is determined by allocating assets and
specified off-balance sheet commitments into four weighted categories, with
higher levels of capital being required for categories perceived as representing
greater risk. The leverage ratio is determined by relating core capital (as
described below) to total assets adjusted as specified in the guidelines. All of
WesBanco's depository institution subsidiaries are subject to substantially
similar capital requirements adopted by applicable regulatory agencies.
Generally, under the applicable guidelines, the financial institution's
capital is divided into two tiers. "Tier 1," or core capital, includes common
equity, noncumulative perpetual preferred stock (excluding auction rate issues)
and minority interests in equity accounts of consolidated subsidiaries, less
goodwill. Bank holding companies, however, may include cumulative perpetual
preferred stock in their Tier 1 capital, up to a limit of 25% of such Tier 1
capital. "Tier 2," or supplementary capital, includes, among other things,
cumulative and limited-life preferred stock, hybrid capital instruments,
mandatory convertible securities, qualifying subordinated debt, and the
allowance for loan losses, subject to certain limitations, less required
deductions. "Total capital" is the sum of Tier 1 and Tier 2 capital.
Financial institutions are required to maintain a risk-based ratio of 8%,
of which 4% must be Tier 1 capital. The appropriate regulatory authority may set
higher capital requirements when an institution's particular circumstances
warrant.
Failure to meet applicable capital guidelines could subject the financial
institution to a variety of enforcement remedies available to the federal
regulatory authorities, including limitations on the ability to pay dividends,
the issuance by the regulatory authority of a capital directive to increase
capital and the termination of deposit insurance by the FDIC.
As of December 31, 1993, all of WesBanco's banking subsidiaries had capital
in excess of all applicable requirements.
FEDERAL DEPOSIT INSURANCE CORPORATION IMPROVEMENT ACT OF 1991
In December 1991, Congress enacted the Federal Deposit Insurance
Corporation Improvement Act of 1991 ("FDICIA"), which substantially revises the
bank regulatory and funding provisions of the Federal Deposit Insurance Act and
makes revisions to several other federal banking statutes.
Among other things, FDICIA requires federal bank regulatory authorities to
take "prompt corrective action" with respect to depository institutions that do
not meet minimum capital requirements. For these purposes, FDICIA establishes
five capital tiers: well capitalized, adequately capitalized, undercapitalized,
significantly undercapitalized and critically under capitalized.
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Under FDICIA, a depository institution that is not "well capitalized" is
generally prohibited from accepting brokered deposits and offering interest
rates on deposits higher than the prevailing rate in its market. All of
WesBanco's depository institution subsidiaries currently meet the FDIC's
definition of a "well capitalized" institution for purposes of accepting
brokered deposits. For the purposes of the brokered deposit rules, a bank is
defined to be "well capitalized" if it maintains a ratio of Tier 1 capital to
risk-adjusted assets of at least 6%, a ratio of total capital to risk-adjusted
assets of at least 10% and a Tier 1 leverage ratio of at least 5% and is not
otherwise in a "troubled condition" as specified by its appropriate federal
regulatory agency. On October 25, 1993, the FDIC published a final rule
providing for purposes of its brokered deposit rules the definitions of "well
capitalized," "adequately capitalized" and "undercapitalized" as previously
adopted by the bank regulatory agencies under the prompt corrective action rules
described above.
FDICIA directs that each federal banking agency prescribe standards for
depository institutions and depository institution holding companies relating to
internal controls, information systems, internal audit systems, loan
documentation, credit underwriting, interest rate exposure, asset growth,
compensation, a maximum ratio of classified assets to capital, minimum earnings
sufficient to absorb losses, a minimum ratio of market value to book value for
publicly traded shares and such other standards as the agency deems appropriate.
On November 18, 1993, the bank regulatory agencies published a notice of
proposed rule making to implement these provisions of FDICIA. The proposed rules
set forth general standards to be observed, but in most instances do not specify
operating or managerial procedures to be followed.
FDICIA also contains a variety of other provisions that may affect the
operations of WesBanco's depository institution subsidiaries, including new
reporting requirements, revised regulatory standards for real estate lending,
"truth in savings" provisions and the requirements that a depository institution
give 90 days' prior notice to customers and regulatory authorities before
closing any branch.
In addition to FDICIA, there have been proposed a number of legislative and
regulatory proposals designed to strengthen the federal deposit insurance system
and to improve the overall financial stability of the United States banking
system. These include proposals to increase capital requirements above presently
published guidelines, to place assessments on depository institutions to
increase funds available to the FDIC and to allow national banks to branch on an
interstate basis. It is impossible to predict whether or in what form these
proposals may be adopted in the future and, if adopted, what their effect would
be on WesBanco. It is likewise impossible to predict what the competitive effect
on WesBanco's bank subsidiaries will be of the recent action taken by the Office
of Thrift Supervision to allow certain thrift institutions to engage in
interstate branching on a nationwide basis.
PROPERTIES
Affiliates of WesBanco, Inc. own their respective banking offices, related
facilities and unimproved real property which is held for future expansion. With
certain branch office exceptions, all of the respective West Virginia bank
offices are located in downtown Wheeling, Follansbee, Wellsburg, New
Martinsville, Sistersville, Elizabeth, Charleston, Sissonville, Parkersburg, and
Kingwood. The Ohio bank offices are located in Barnesville, Bethesda, Woodsfield
and Beallsville. Consolidated investment in net bank premises and equipment at
December 31, 1993 was $14,717,000.
First Fidelity Bancorp, Inc. has bank offices located in Fairmont,
Shinnston, Bridgeport and Morgantown, West Virginia. Consolidated investment in
net bank premises and equipment at December 31, 1993, was $7,736,000 for First
Fidelity.
The main office of WesBanco, Inc. is located at 1 Bank Plaza, Wheeling,
West Virginia, in a building owned by WesBanco Bank Wheeling. The building
contains approximately 100,000 square feet.
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LEGAL PROCEEDINGS
WesBanco, Inc. and its affiliates are involved in various legal proceedings
presently pending which are incidental to the business of banking in which they
are engaged. These proceedings are pending in various jurisdictions in which
WesBanco, Inc. and its subsidiaries are engaged in business. Based on the
information which is available to WesBanco, Inc. as of the date hereof which has
been developed in such proceedings, WesBanco, Inc. does not believe that any of
such proceedings involving claims for damages expose it to a material liability
for WesBanco and its subsidiaries on a consolidated basis.
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EXECUTIVE OFFICERS OF THE CORPORATION
NAME AGE POSITION
- - ------------------------- ------ --------------------------------------------------------
James C. Gardill 47 Chairman of the Board
Robert H. Martin 60 Vice Chairman
Edward M. George 57 President and Chief Executive Officer
Paul M. Limbert 46 Executive Vice President and Chief Financial Officer
Dennis P. Yaeger 43 Executive Vice President and Chief Operating Officer
Patrick L. Schulte 61 Executive Vice President--Central Region
John W. Moore, Jr. 45 Senior Vice President--Human Resources
Jerome B. Schmitt 44 Senior Vice President--Investments
Larry L. Dawson 47 Vice President
Jerry A. Halverson 57 Vice President
Albert A. Pietz, Jr. 61 Vice President and Compliance Officer
Edward G. Sloane 55 Vice President--Data Processing
Mr. Martin and Mr. Schulte were appointed Vice Chairman and Executive Vice
President, respectively, to the Corporation effective February 28, 1994. Prior
to that time, Mr. Martin was Chairman of the Board of First Fidelity Bancorp,
Inc. since 1986 and Mr. Schulte was President and Chief Executive Officer of
First Fidelity Bancorp, Inc. since 1982.
Each of the remaining officers listed above have been an Executive Officer
of the Corporation or one of its subsidiaries during the past five years.
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MANAGEMENT'S RESPONSIBILITY FOR FINANCIAL STATEMENTS
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The financial statements and the information pertaining to those statements
are the responsibility of management. The financial statements have been
prepared in conformity with generally accepted accounting principles, applied on
a consistent basis.
The accounting systems of the Corporation and the affiliates include internal
controls and procedures which provide reasonable assurance as to the reliability
of the financial records. Internal control systems are generally supported by
written policies and procedures. The internal auditing staff systematically
performs audits of operations, reviews procedures, monitors adherence to bank
policies and submits written audit reports to the Audit Committee. The Audit
Committee of the Board of Directors is composed of only outside directors. The
Audit Committee meets regularly with management, internal audit and our
independent accountants to review accounting, auditing and financial matters.
The internal auditor, Federal and State examiners, and Price Waterhouse have
full access to the Audit Committee to discuss any appropriate matters.
Independent accountants provide an objective review of management's discharge
of its financial responsibilities relating to the preparation of the financial
statements. The independent accountant's report is based on an audit in
accordance with generally accepted auditing standards. This report expresses an
informed judgement as to whether management's financial statements present
fairly, in conformity with generally accepted accounting principles, the
Corporation's financial position, results of operations and cash flows.
[LOGO TO COME]
REPORT OF INDEPENDENT ACCOUNTANTS
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TO THE SHAREHOLDERS AND BOARD OF DIRECTORS OF WESBANCO, INC.
In our opinion, based on our audits and the report of other auditors, the
accompanying consolidated balance sheets and the related consolidated statements
of income, of changes in shareholders' equity and of cash flows present fairly,
in all material respects, the financial position of WesBanco, Inc., and its
subsidiaries (the Corporation) at December 31, 1993 and 1992, and the results of
its operations and its cash flows for each of the three years in the period
ended December 31, 1993, in conformity with generally accepted accounting
principles. These financial statements are the responsibility of the
Corporation's management; our responsibility is to express an opinion on these
financial statements based on our audits. We did not audit the financial
statements of The First National Bank of Barnesville for 1991, which statements
reflect total assets of $141,825,000 at December 31, 1991, and net interest
income of $4,663,000 for the year then ended. Those statements were audited by
other auditors whose report thereon has been furnished to us, and our opinion
expressed herein, insofar as it relates to the amounts included for The First
National Bank of Barnesville for 1991, is based solely on the report of the
other auditors. We conducted our audits of the consolidated statements in
accordance with generally accepted auditing standards, which require that we
plan and perform the audits to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements, assessing the accounting principles used and
significant estimates made by management, and evaluating the overall financial
statement presentation. We believe that our audits and the report of other
auditors provide a reasonable basis for the opinion expressed above.
As discussed in Note 16 and Note 14, the Corporation adopted Statement of
Financial Accounting Standards No. 109, "Accounting for Income Taxes," and
Statement of Financial Accounting Standards No. 106, "Employers' Accounting for
Postretirement Benefits Other Than Pensions," during 1993 and 1992,
respectively.
600 Grant Street
Pittsburgh, Pennsylvania 15219
January 24, 1994, except as to Note 20, which is as of February 28, 1994.
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WESBANCO, INC.
CONSOLIDATED BALANCE SHEET
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(in thousands, except for shares)
December 31,
-------------------------
1993 1992
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ASSETS
Cash and due from banks (Note 4) $ 32,238 $ 36,839
Due from banks -- interest bearing 297 100
Federal funds sold 14,751 4,970
Investment securities (market values of: 1993 - $412,996;
1992 - $421,370) (Note 5) 403,778 411,054
Loans: (Note 2) 566,795 534,452
Unearned income (1,618) (1,459)
Reserve for possible loan losses (Note 8) (9,299) (8,367)
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Net loans 555,878 524,626
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Bank premises and equipment (Note 9) 14,717 14,433
Accrued interest receivable 9,842 10,596
Other assets (Note 12) 7,381 7,486
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TOTAL ASSETS $1,038,882 $1,010,104
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LIABILITIES
Deposits:
Non-interest bearing demand $ 90,490 $ 83,120
Interest bearing demand 220,784 211,504
Savings deposits 225,518 204,400
Certificates of deposit (Note 18) 317,599 339,147
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Total deposits 854,391 838,171
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Federal funds purchased and repurchase agreements 39,354 37,075
Short-term borrowings 8,811 6,199
Accrued interest payable 4,774 5,222
Other liabilities 6,375 6,446
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TOTAL LIABILITIES 913,705 893,113
- - -------------------------------------------------------------------------------------------
SHAREHOLDERS' EQUITY (NOTE 11)
Preferred stock, no par value; 1,000,000 shares authorized;
none outstanding -- --
Common stock, $2.0833 par value; 25,000,000 shares authorized;
6,628,288 shares issued 13,809 13,809
Capital surplus 16,352 16,352
Capital reserves 2,139 2,139
Retained earnings 94,957 85,472
Less: Treasury stock (49,960 and 14,960 shares, respectively, at
cost) (1,323) (221)
- - -------------------------------------------------------------------------------------------
125,934 117,551
Deferred employee benefit related to ESOP (Note 19) (757) (560)
- - -------------------------------------------------------------------------------------------
TOTAL SHAREHOLDERS' EQUITY 125,177 116,991
- - -------------------------------------------------------------------------------------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $1,038,882 $1,010,104
- - -------------------------------------------------------------------------------------------
The accompanying Notes to Consolidated Financial Statements are an integral part
of these financial statements.
10
11
WESBANCO, INC.
CONSOLIDATED STATEMENT OF INCOME
- - --------------------------------------------------------------------------------
(in thousands, except per share amounts)
For the year ended December 31,
-------------------------------
1993 1992 1991
- - --------------------------------------------------------------------------------------------
Interest income:
Interest and fees on loans $47,748 $49,146 $52,200
- - --------------------------------------------------------------------------------------------
Interest on investment securities:
U.S. Treasury and Federal Agency securities 18,573 20,290 20,466
States and political subdivisions 6,355 5,656 5,758
Other investments 925 984 791
- - --------------------------------------------------------------------------------------------
Total interest on investment securities 25,853 26,930 27,015
- - --------------------------------------------------------------------------------------------
Other interest income 319 1,721 3,430
- - --------------------------------------------------------------------------------------------
Total interest income 73,920 77,797 82,645
- - --------------------------------------------------------------------------------------------
Interest expense:
Interest-bearing demand deposits 6,758 8,129 8,455
Savings deposits 7,223 7,695 7,630
Certificates of deposit 16,162 20,833 27,975
- - --------------------------------------------------------------------------------------------
Total interest on deposits 30,143 36,657 44,060
- - --------------------------------------------------------------------------------------------
Other borrowings 1,417 1,465 2,298
- - --------------------------------------------------------------------------------------------
Total interest expense 31,560 38,122 46,358
- - --------------------------------------------------------------------------------------------
Net interest income 42,360 39,675 36,287
Provision for possible loan losses (Note 8) 2,684 2,850 2,337
- - --------------------------------------------------------------------------------------------
Net interest income after provision for possible loan
losses 39,676 36,825 33,950
- - --------------------------------------------------------------------------------------------
Other income:
Trust fees 3,870 3,653 3,527
Charge card discounts and fees 958 973 942
Service charges and other income 3,709 3,422 3,168
Net investment securities transaction gains 160 402 173
- - --------------------------------------------------------------------------------------------
Total other income 8,697 8,450 7,810
- - --------------------------------------------------------------------------------------------
Other expenses:
Salaries and wages 12,299 11,930 11,419
Pension and other employee benefits (Notes 13 and 14) 2,930 2,649 2,487
Net occupancy expense (Note 9) 1,493 1,386 1,475
Equipment expense 1,663 1,601 1,418
Other operating expense (Note 15) 10,379 10,102 10,000
- - --------------------------------------------------------------------------------------------
Total other expenses 28,764 27,668 26,799
- - --------------------------------------------------------------------------------------------
Income before provision for income taxes and effect of
the change in accounting for postretirement benefits 19,609 17,607 14,961
Provision for income taxes (Note 16) 4,946 4,683 3,723
- - --------------------------------------------------------------------------------------------
Income before effect of the change in accounting for
postretirement benefits 14,663 12,924 11,238
Effect of the change in accounting for postretirement
benefits -- net of tax effect (Note 14) -- (592) --
- - --------------------------------------------------------------------------------------------
Net Income $14,663 $12,332 $11,238
- - --------------------------------------------------------------------------------------------
Earnings per share of common stock: (Note 1)
Income before effect of the change in accounting for
postretirement benefits $2.22 $1.96 $1.70
Effect of the change in accounting for postretirement
benefits -- net of tax effect -- (.09) --
- - --------------------------------------------------------------------------------------------
Net Income $2.22 $1.87 $1.70
- - --------------------------------------------------------------------------------------------
The accompanying Notes to Consolidated Financial Statements are an integral part
of these financial statements.
11
12
WESBANCO, INC.
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
- - --------------------------------------------------------------------------------
(in thousands)
For the years ended December 31, 1993, 1992 and 1991
---------------------------------------------------------------------------
Deferred
Common Capital Capital Retained Treasury ESOP
Stock Surplus Reserves Earnings Stock Benefit Total
- - --------------------------------------------------------------------------------------------------------------
BALANCE, DECEMBER 31, 1990 $ 13,809 $ 16,353 $ 2,139 $ 70,248 $ (245) $ (322) $ 101,982
- - --------------------------------------------------------------------------------------------------------------
Net Income 11,238 11,238
Cash dividends:
Common ($.675 per share) (3,338) (3,338)
By pooled banks prior to
acquisition (561) (561)
Treasury shares purchased (26) (26)
Treasury shares sold (1) 83 82
Principal payment 161 161
Change in market value
of equity security 182 182
- - --------------------------------------------------------------------------------------------------------------
BALANCE, DECEMBER 31, 1991 13,809 16,352 2,139 77,769 (188) (161) 109,720
- - --------------------------------------------------------------------------------------------------------------
Net Income 12,332 12,332
Cash dividends:
Common ($.70 per share) (4,209) (4,209)
By pooled banks prior to
acquisition (420) (420)
Treasury shares purchased (33) (33)
ESOP borrowing (560) (560)
Principal payment 161 161
- - --------------------------------------------------------------------------------------------------------------
BALANCE, DECEMBER 31, 1992 13,809 16,352 2,139 85,472 (221) (560) 116,991
- - --------------------------------------------------------------------------------------------------------------
Net Income 14,663 14,663
Cash dividends:
Common ($.785 per share) (5,178) (5,178)
Treasury shares purchased (1,102) (1,102)
ESOP borrowing (422) (422)
Principal payment 225 225
- - --------------------------------------------------------------------------------------------------------------
BALANCE, DECEMBER 31, 1993 $ 13,809 $ 16,352 $ 2,139 $ 94,957 $ (1,323) $ (757) $ 125,177
- - --------------------------------------------------------------------------------------------------------------
The accompanying Notes to Consolidated Financial Statements are an integral part
of these financial statements.
There was no activity, or outstanding balances in Preferred Stock during the
years ended December 31, 1993, 1992 and 1991.
12
13
WESBANCO, INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
- - --------------------------------------------------------------------------------
Increase (Decrease) in Cash and Cash Equivalents (in thousands)
For the year ended December 31,
----------------------------------
1993 1992 1991
- - --------------------------------------------------------------------------------------------
Cash flows from operating activities:
Net Income $ 14,663 $ 12,332 $ 11,238
Adjustment to reconcile net income to net cash provided
by operating activities:
Effect of accounting change for postretirement
benefits--
net of tax effect -- 592 --
Depreciation 1,269 1,222 1,249
Provision for possible loan losses 2,684 2,850 2,337
Investment amortization--net 4,414 3,236 1,618
Gains on sales of investment securities (160) (402) (173)
Deferred income taxes (141) (842) (645)
Other--net (134) (345) 218
Proceeds from maturities and calls of securities
available for sale 90,435 -- --
Proceeds from the sales of securities available for
sale 31,981 -- --
Purchases of securities available for sale (35,352) -- --
Increase or decrease in assets and liabilities:
Interest receivable 754 (224) 779
Other assets 91 182 (2,381)
Interest payable (448) (1,434) (650)
Other liabilities (276) (192) 21
- - --------------------------------------------------------------------------------------------
Net cash provided by operating activities 109,780 16,975 13,611
- - --------------------------------------------------------------------------------------------
Investing activities:
Proceeds from sales of investment securities 5,596 25,844 9,517
Proceeds from maturities and calls of investment
securities 16,856 97,191 100,407
Purchases of investment securities (106,691) (203,510) (102,200)
Net increase in loans (35,207) (24,980) (28,008)
Net (increase) decrease in charge card loans 1,271 (378) (918)
Purchases of premises and equipment--net (1,612) (1,412) (1,081)
- - --------------------------------------------------------------------------------------------
Net cash used by investing activities (119,787) (107,245) (22,283)
- - --------------------------------------------------------------------------------------------
Financing activities:
Net decrease in certificates of deposit (21,548) (43,367) (24,093)
Net increase in demand deposits and savings accounts 37,768 80,522 36,069
Increase in federal funds purchased and repurchase
agreements 2,279 1,283 887
Increase (decrease) in short-term borrowings 2,612 (1,427) 424
Principal payments on ESOP related debt (225) (161) (161)
Proceeds from ESOP related borrowings 422 560 --
Dividends paid (5,019) (4,611) (3,816)
Other--net (1,102) (33) 56
- - --------------------------------------------------------------------------------------------
Net cash provided by financing activities 15,187 32,766 9,366
- - --------------------------------------------------------------------------------------------
Net increase (decrease) in cash and cash equivalents 5,180 (57,504) 694
Cash and cash equivalents at beginning of year 41,809 99,313 98,619
- - --------------------------------------------------------------------------------------------
Cash and cash equivalents at end of year $ 46,989 $ 41,809 $ 99,313
- - --------------------------------------------------------------------------------------------
During 1993, 1992 and 1991, WesBanco paid $32,007, $39,555 and $47,008 in
interest on deposits and other borrowings and $5,380, $5,312 and $4,378 for
income taxes, respectively.
As of December 31, 1993, 1992 and 1991 the net change in in-substance
foreclosures amounted to $(791), $(187), and $2,936, respectively. During 1993,
approximately $791 of loans classified as in-substance foreclosures were either
paid or transferred back to loans.
The accompanying Notes to Consolidated Financial Statements are an integral part
of these financial statements.
13
14
WESBANCO, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
- - --------------------------------------------------------------------------------
NOTE 1: ACCOUNTING POLICIES
- - --------------------------------------------------------------------------------
WesBanco, Inc. and its subsidiary banks provide banking services primarily in
the West Virginia and eastern Ohio markets. The significant accounting
principles employed in the preparation of the accompanying consolidated
financial statements are summarized below:
PRINCIPLES OF CONSOLIDATION:
The Consolidated Financial Statements of WesBanco, Inc. (the Corporation)
include the accounts of the Corporation and its wholly owned subsidiaries.
Material intercompany transactions and accounts have been eliminated.
INVESTMENT SECURITIES:
Investments Held to Maturity:
Investment securities consisting principally of debt securities, which are
generally held to maturity, are stated at cost, adjusted for amortization of
premiums and accretion of discounts. These securities are purchased with the
intent and ability to hold until their maturity. Amortization of premiums and
accretion of discounts are included in interest on investment securities in the
Consolidated Statement of Income.
Investments Available for Sale:
U. S. Treasury and Agency debt securities with a call or maturity of one year
or less, corporate securities, and marketable equity securities are classified
as available for sale. These securities may be sold at any time based upon
management's assessment of changes in economic or financial market conditions,
interest rate or prepayment risks, liquidity considerations, and other factors.
These securities are carried at the lower of aggregate amortized cost or market
value, with changes being reported in the Consolidated Statement of Income. No
writedowns on these securities have been required.
Investments Available for Trading:
The Corporation did not have a trading portfolio during either of the two
years ended December 31, 1993 and 1992.
Gains and Losses:
Gains and losses on sale of investment securities represent the differences
between net proceeds and carrying values determined by the specific
identification method.
LOANS:
Interest is accrued as earned except where doubt exists as to collectability,
in which case recognition of income is discontinued. Net loan fees and
deferrable costs are not material.
RESERVE FOR POSSIBLE LOAN LOSSES:
The reserve for possible loan losses is maintained at a level considered
adequate by management to provide for potential loan losses. The reserve is
increased by provisions charged to operating expenses and reduced by loan losses
net of recoveries. The amount of reserve is based on management's evaluation of
the loan portfolio, as well as prevailing and anticipated economic conditions,
past loan loss experience, current delinquency factors, changes in the character
of the loan portfolio, specific problem loans and other relevant factors.
BANK PREMISES AND EQUIPMENT:
Bank premises and equipment are stated at cost less accumulated depreciation.
Bank premises and equipment are depreciated over their estimated useful lives
using either the straight-line or an accelerated method. Useful lives are
revised when a change in life expectancy becomes apparent.
Maintenance and repairs are charged to expense and betterments are
capitalized. Gains and losses on bank premises and equipment retired or
otherwise disposed of, are charged to expense when incurred.
INCOME TAXES:
Effective January 1, 1993, the Corporation adopted the provisions of Statement
of Financial Accounting Standards (FAS) No. 109 "Accounting for Income Taxes."
The adoption of FAS No. 109 changed the Corporation's method of accounting for
income taxes from the deferred method to an asset and liability approach. Under
FAS No. 109, deferred tax assets and liabilities are recognized for the expected
future tax consequences attributable to temporary differences between the
carrying amounts of assets and liabilities and their tax bases. In addition,
such deferred tax asset and liability amounts are adjusted for the effects of
enacted changes in tax laws or rates. The Corporation's principal temporary
differences relate to the reserve for possible loan losses, postretirement
benefits including pension expense and accretion of discounts on investment
securities.
EARNINGS PER SHARE:
Earnings per share are calculated based upon the weighted average number of
shares of common stock outstanding during the year, retroactively adjusted for
the April 1993 two for one stock split.
TRUST DEPARTMENT:
Assets held by the subsidiary banks in fiduciary or agency capacities for
their customers are not included as assets in the accompanying Consolidated
Balance Sheet. Trust fees are reported on the cash
14
15
NOTE 1: ACCOUNTING POLICIES (CONTINUED)
- - --------------------------------------------------------------------------------
basis of accounting in accordance with customary banking practice. Reporting of
trust income on an accrual basis would not materially affect net income. Certain
trust assets are held on deposit at subsidiary banks.
STATEMENT OF CASH FLOWS:
For the purpose of reporting cash flows, cash and cash equivalents include
cash and due from banks, and federal funds sold. Generally, federal funds are
sold for one day periods.
NEW ACCOUNTING STANDARDS TO BE ADOPTED:
The following financial accounting standards will be implemented by the
Corporation prior to or on the required implementation date.
FAS No. 112, "Employers' Accounting for Postemployment Benefits," requires
employers who provide benefits to former or inactive employees after employment,
but before retirement, to recognize the obligation during the periods employees
provide services to earn those benefits. This statement will be adopted as of
January 1, 1994 and will have an immaterial effect on the Corporation.
FAS No. 114, "Accounting by Creditors for Impairment of a Loan," requires that
certain impaired loans be measured based on the present value of expected future
cash flows discounted at the loan's effective interest rate or, as a practical
expedient, at the loan's observable market price or the fair value of the
collateral if the loan is collateral dependent. FAS No. 114 is effective for
periods beginning after December 15, 1994 and management is unable to determine
the effect of adopting FAS No. 114 at this time.
FAS No. 115, "Accounting for Certain Investments in Debt and Equity
Securities," addresses the accounting and reporting for investments in equity
securities that have readily determinable fair values and for all investments in
debt securities. This statement will be adopted as of January 1, 1994.
Management will change its classification of investments to include treasury and
agency securities purchased with final maturities extending beyond three years,
corporate securities, mortgage-backed securities and marketable equity
securities as available for sale as of January 1, 1994. Due to the increase in
market values, the accounting effect of adopting FAS No. 115 will be to increase
investments by $5,259,000 and increase shareholders' equity by $3,182,000 after
the tax effect of ($2,077,000).
NOTE 2: LOANS
- - --------------------------------------------------------------------------------
The following is a summary of loans outstanding: (in thousands)
December 31,
---------------------
1993 1992
- - -------------------------------------------
Loans:
Commercial $136,076 $135,119
Real estate--
construction 18,666 11,930
Real estate--
mortgage 244,916 233,321
Installment 167,137 154,082
- - -------------------------------------------
Total Loans $566,795 $534,452
- - -------------------------------------------
Most lending is with customers who are located within the state of West
Virginia and eastern Ohio. There is no significant concentration of credit risk
by industry or by individual borrowers, no significant exposure to highly
leveraged loan transactions, nor any foreign loans. Loans aggregating
$7,842,000, and $6,645,000 were classified as renegotiated or nonaccrual as of
December 31, 1993 and 1992, respectively. Interest and fees on loans would have
been increased by approximately $444,000, $259,000 and $406,000 for the years
1993, 1992 and 1991, respectively, if these loans had earned their stated
interest for the entire year. The amount of interest included in net interest
income from renegotiated and nonaccrual loans is $607,000, $410,000 and $550,000
for the years ended December 31, 1993, 1992 and 1991, respectively.
The subsidiary banks, in the ordinary course of business, grant loans to
related parties at terms which do not vary from terms that would have been
required if the transactions had been with unrelated parties. Indebtedness of
related parties aggregated approximately $32,603,000 and $24,620,000 as of
December 31, 1993 and 1992, respectively. Activity for the year ended December
31, 1993 is summarized as follows: (in thousands)
- - ------------------------------------------
Balance, beginning of year $24,620
Additions 25,989
Cash payments and other
reductions (18,006)
- - ------------------------------------------
Balance, end of year $32,603
- - ------------------------------------------
15
16
NOTE 3: ACQUISITIONS AND MERGERS
- - --------------------------------------------------------------------------------
On July 17, 1992, WesBanco, Inc. acquired First National Bank of Barnesville,
which had total assets of $143,706,000. In accordance with terms of the merger,
WesBanco issued 600,000 shares of common stock for all of the First National
Bank of Barnesville's stock. The acquisition was accounted for as a
pooling-of-interests and accordingly, the consolidated financial statements
include the accounts of First National Bank of Barnesville for all periods
presented.
WesBanco will complete an acquisition during February 1994. See Note 20 for
details of the merger.
NOTE 4: RESTRICTED CASH BALANCES
- - --------------------------------------------------------------------------------
Federal Reserve regulations require depository institutions to maintain cash
reserves with the Federal Reserve Bank. The average amounts of required reserve
balances were approximately $4,643,000 and $4,876,000 during 1993 and 1992,
respectively.
NOTE 5: INVESTMENT SECURITIES
- - --------------------------------------------------------------------------------
The amortized cost and estimated market values of investment securities are as
follows: (in thousands)
-------------------------------------------------------------------------------------------------------------------
1993 1992 1991
--------------------------------------------------- ------------------------------------------------ ---------
GROSS GROSS ESTIMATED Gross Gross Estimated
AMORTIZED UNREALIZED UNREALIZED MARKET Amortized Unrealized Unrealized Market Amortized
COST GAINS LOSSES VALUE Cost Gains Losses Value Cost
- - ---------------------------------------------------------------------------------------------------------------------------------
U.S. Treasury
and Federal
Agency Securities $199,899 $ 4,248 $(414) $203,733 $234,088 $ 7,127 $ (784) $240,431 $232,575
Obligations of
states and
political
subdivisions 117,804 4,101 (349) 121,556 100,008 3,205 (357) 102,856 81,720
Mortgage-backed
securities 2,152 79 (12) 2,219 4,247 116 (11) 4,352 6,203
Corporate and other
securities 791 -- -- 791 875 -- -- 875 11,417
Investments available
for sale 83,132 1,623 (58) 84,697 71,836 1,336 (316) 72,856 --
- - ---------------------------------------------------------------------------------------------------------------------------------
Total $403,778 $10,051 $(833) $412,996 $411,054 $11,784 $(1,468) $421,370 $331,915
- - ---------------------------------------------------------------------------------------------------------------------------------
The amortized cost and estimated market value of the total investment
portfolio at December 31, 1993, by contractual maturity, are shown below.
Expected maturities will differ from contractual maturities because certain
borrowers have the right to call or prepay obligations: (in thousands)
DECEMBER 31, 1993
----------------------
ESTIMATED
AMORTIZED MARKET
COST VALUE
- - -------------------------------------------------
Within one year $ 57,692 $ 58,635
After one year, but
within five 238,087 243,888
After five years, but
within ten 98,423 100,697
After ten years 7,424 7,557
Mortgage-backed
securities 2,152 2,219
- - -------------------------------------------------
Total investments $403,778 $412,996
- - -------------------------------------------------
Investment securities with par values aggregating $115,360,000 at December 31,
1993 and $94,655,000 at December 31, 1992 were pledged to secure public and
trust funds. Gross gains from sales of investment securities of $248,000,
$412,000 and $176,000 and gross losses of $88,000, $10,000 and $3,000 were
realized on investment sales for the years ended December 31, 1993, 1992 and
1991, respectively.
16
17
NOTE 6: TRANSACTIONS WITH RELATED PARTIES
- - --------------------------------------------------------------------------------
Some officers and directors (including their affiliates, families and entities
in which they are principal owners) of the Corporation and banks are customers
of the banks and have had, and are expected to have, transactions with the banks
in the ordinary course of business. In addition, some officers and directors are
also officers and directors of corporations which are customers of the banks and
have had, and are expected to have, transactions with the banks in the ordinary
course of business. In the opinion of management, such transactions are
consistent with prudent banking practices and are within applicable banking
regulations.
The amount of transactions with related parties including loans and legal fees
aggregated approximately $32,961,000 at December 31, 1993. These related party
transactions equal 26% of shareholders' equity at December 31, 1993.
NOTE 7: FINANCIAL INSTRUMENTS WITH OFF-BALANCE-SHEET RISK
- - --------------------------------------------------------------------------------
Individual banks within the Corporation incur off-balance-sheet risks in the
normal course of business in order to meet financing needs of their customers.
These financial instruments include commitments to extend credit and standby
letters of credit. Those instruments involve, to varying degrees, elements of
credit and interest rate risk in excess of the amount recognized in the
financial statements.
In the normal course of business, there are outstanding, various commitments
to extend credit approximating $39,069,000 and standby letters of credit of
$8,410,000 as of December 31, 1993.
The banks' exposure to credit loss in the event of nonperformance by the other
party to the financial instrument for commitments to extend credit and standby
letters of credit is represented by the contractual amount of those instruments.
The banks use the same credit and collateral policies in making commitments and
conditional obligations as for all other lending. Collateral which secures these
types of commitments is the same type as collateral for other types of lending,
such as accounts receivable, inventory and fixed assets.
Commitments to extend credit are commitments to lend to a customer as long as
there is no violation of any condition established in the loan agreement.
Commitments generally have fixed expiration dates or other termination clauses
and may require payment of a fee. Since many of the commitments are expected to
expire without being drawn upon, the total commitment amounts do not necessarily
represent future cash requirements. The banks evaluate each customer's credit
worthiness on a case-by-case basis.
Standby letters of credit are conditional commitments issued by the banks to
guarantee the performance of a customer to a third party. Those guarantees are
primarily issued to support public and private borrowing arrangements, including
normal business activities, bond financing and similar transactions. The credit
risk involved in issuing letters of credit is essentially the same as that
involved in extending loans to customers. Collateral securing these types of
transactions is similar to collateral securing the banks' commercial loans.
NOTE 8: RESERVE FOR POSSIBLE LOAN LOSSES
- - --------------------------------------------------------------------------------
The transactions in the reserve for possible loan losses
were as follows:
Year ended December 31,
----------------------------------
1993 1992 1991
- - ----------------------------------------------------------------------------------------------------
Balance, beginning of year $ 8,367 $ 7,476 $ 7,120
Reserves of purchased bank -- 62 --
Provision 2,684 2,850 2,337
Loan recoveries 564 652 288
Loan losses (2,316) (2,673) (2,269)
- - ----------------------------------------------------------------------------------------------------
Balance, end of year $ 9,299 $ 8,367 $ 7,476
- - ----------------------------------------------------------------------------------------------------
NOTE 9: BANK PREMISES AND EQUIPMENT
- - --------------------------------------------------------------------------------
Bank premises and equipment include: (in thousands)
Estimated December 31,
useful --------------------
life 1993 1992
- - -----------------------------------------------------------------------------------------------------
Land and improvements (3-10 years) $ 3,351 $ 3,261
Buildings and improvements (4-50 years) 17,301 16,989
Furniture and equipment (2-25 years) 10,087 9,331
- - -----------------------------------------------------------------------------------------------------
30,739 29,581
Less--Accumulated depreciation (16,022) (15,148)
- - -----------------------------------------------------------------------------------------------------
Total $ 14,717 $ 14,433
- - -----------------------------------------------------------------------------------------------------
17
18
NOTE 10: DISCLOSURES ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS
- - --------------------------------------------------------------------------------
In accordance with the requirements of FAS No. 107, "Disclosure About Fair
Value of Financial Instruments," fair value disclosure estimates are being made
for like kinds of financial instruments. Fair value estimates are based on
present value of expected future cash flows, quoted market prices of similar
financial instruments, if available, and other valuation techniques. These
valuations are significantly affected by the discount rates, cash flow
assumptions, and risk assumptions used. Therefore, the fair value estimates may
not be substantiated by comparison to independent markets and are not intended
to reflect the proceeds that may be realizable in an immediate settlement of the
instruments.
FAS No. 107 excludes certain items from the disclosure requirements, and
accordingly, the aggregate fair value of amounts presented do not represent the
underlying value of the Corporation. Management does not have the intention to
dispose of a significant portion of its financial instruments and, therefore,
the unrealized gains or losses should not be interpreted as a forecast of future
earnings and cash flows.
The following table represents the estimates of fair value of financial
instruments: (in thousands)
December 31,
-------------------------------------------------
1993 1992
--------------------- ---------------------
CARRYING FAIR Carrying Fair
AMOUNT VALUE Amount Value
- - -------------------------------------------------------------------------------------------
Financial assets:
Cash and short-term investments $ 47,286 $ 47,286 $ 41,909 $ 41,909
Investment securities 403,778 412,996 411,054 421,370
Net loans 555,878 566,877 524,626 537,368
Financial liabilities:
Deposits 854,391 860,524 838,171 846,955
Short-term borrowings 48,165 48,165 43,274 43,274
- - -------------------------------------------------------------------------------------------
The following methods and assumptions are used to estimate the fair value of
like kinds of financial instruments:
Cash and Short-Term Investments:
The carrying amount for cash and short-term investments is a reasonable
estimate of fair value. Short-term investments consist of federal funds sold.
Investment Securities:
Fair values for investment securities are based on quoted market prices, if
available. If market prices are not available, then quoted market prices of
similar instruments are used.
Loans Receivable:
Fair values for loans with interest rates that fluctuate as current rates
change are generally valued at carrying amounts. The fair values for residential
mortgage loans are based on quoted market prices of securitized financial
instruments, adjusted for remaining maturity and differences in loan
characteristics. Fair values of commercial real estate, construction and
consumer loans are based on a discounted value of the estimated future cash
flows expected to be received. The current interest rates applied in the
discounted cash flow method reflect rates used to price new loans of similar
type, adjusted for relative risk and remaining maturity. The fair value of the
credit card portfolio is estimated based on the anticipated average cost of
soliciting a new account and the present credit quality of the outstanding
balances. For nonaccrual loans, fair value is estimated by discounting expected
future principal cash flows only.
Deposit Liabilities:
The carrying amount is considered a reasonable estimate of fair value for
demand and savings deposits and other variable rate deposit accounts. The fair
value of fixed maturity certificates of deposit is estimated by a discounted
cash flow method using the rates currently offered for deposits of similar
remaining maturities.
Short-Term Borrowings:
For short-term borrowings, which include federal funds purchased, repurchase
agreements, and other short-term borrowings, the carrying amount is a reasonable
approximation of fair value.
Off-balance sheet instruments:
The fair value of commitments is estimated using the fees currently charged to
enter into similar agreements, taking into account the remaining terms of the
agreements and the present credit standing of the counterparties. The amount of
fees currently charged on commitments are determined to be insignificant and
therefore the fair value and carrying value of off-balance sheet instruments are
not shown.
18
19
NOTE 11: SHAREHOLDERS' EQUITY
- - --------------------------------------------------------------------------------
On April 21, 1993, the shareholders of the Corporation approved a two-for-one
stock split effective April 22, 1993, an increase in the authorized common
shares from 10 million to 25 million shares, a change in common stock par value
from $4.1666 to $2.0833 per share and an increase in the authorized preferred
stock from 100,000 to 1 million shares with no par value. The stock split
increased the number of shares of common stock outstanding at April 22, 1993, to
6,613,328 shares. All shares and per share amounts have been retroactively
adjusted for the stock split.
NOTE 12: OTHER ASSETS
- - --------------------------------------------------------------------------------
Real estate acquired in satisfaction of a loan and in-substance foreclosures
are reported in other assets. Properties acquired by foreclosure or deed in lieu
of foreclosure and properties classified as in-substance foreclosures are
transferred to other assets and recorded at the lower of cost or fair market
value based on appraisal value at the date actually or constructively received.
Losses arising at the time of acquisition of such property are charged against
the reserve for possible loan losses.
The total other real estate including in-substance foreclosures was $2,110,000
and $2,904,000 as of December 31, 1993 and 1992, respectively.
NOTE 13: PENSION BENEFITS
- - --------------------------------------------------------------------------------
Substantially all employees are participants in the WesBanco defined benefit
pension plan. Benefits are generally based on the years of service and the
employee's compensation during the last five years of employment. The WesBanco
plan's funding policy has been to contribute annually the maximum amount that
can be deducted for federal income tax purposes. Contributions are intended to
provide not only for benefits attributed to service to date, but also for those
expected to be earned in the future.
As of January 1, 1993, all assets and liabilities of the WesBanco Barnesville
(formerly First National Bank of Barnesville) and WesBanco Kingwood (formerly
Albright National Bank) pension plans were merged into the WesBanco plan.
Prior to the merger of the Barnesville and Kingwood pension plans into the
WesBanco plan there were three separate defined benefit pension plans. These
plans covered substantially all employees who satisfied minimum age and length
of service requirements. All plans provided a defined benefit that was
determined based on years of service and the employee's compensation during
final years of employment.
WesBanco Kingwood funded its defined benefit plan at the maximum allowable
amount and also had a defined contribution 401K plan covering substantially all
of its employees. The employer matched employee deferrals at 50% of the deferral
up to a maximum of 4% of the employee's salary. Funding to this plan was
discontinued as of December 31, 1992.
WesBanco Barnesville contributions to the plan reflected benefits attributed
to employees' services to date. Plan assets consisted exclusively of insurance
annuity contracts. Payment of retirement benefit was funded solely through these
annuity contracts.
Net periodic pension cost for the defined benefit plans in 1993, 1992 and 1991
include the following components: (in thousands)
1993 1992 1991
- - --------------------------------------------
Service cost--
benefits earned
during year $ 568 $ 500 $ 541
Interest cost on
projected
benefit
obligation 738 524 475
Actual return on
plan assets (1,311) (387) (784)
Net amortization
and deferral 618 (190) 304
- - --------------------------------------------
Net periodic
pension cost $ 613 $ 447 $ 536
- - --------------------------------------------
19
20
NOTE 13: PENSION BENEFITS (CONTINUED)
- - --------------------------------------------------------------------------------
The following table sets forth for all defined benefit plans the funded status
and the liability reflected in the Consolidated Balance Sheet at December 31,
1993 and 1992: (in thousands)
December 31,
---------------------
1993 1992
- - --------------------------------------------------------------------------------------------------
Actuarial present value of benefit obligation:
Vested benefit obligation $ 6,521 $ 4,684
Accumulated benefit obligation 7,439 5,129
- - --------------------------------------------------------------------------------------------------
Projected benefit obligation $(11,784) $(7,381)
Plan assets at current market value, primarily listed stocks, bonds and
cash equivalents 10,908 7,186
- - --------------------------------------------------------------------------------------------------
Projected benefit obligation in excess of plan assets $ (876) $ (195)
Unrecognized prior service cost 730 (78)
Unrecognized net gain (518) (1,025)
Unrecognized obligation 65 69
- - --------------------------------------------------------------------------------------------------
Net pension liability $ (599) $(1,229)
- - --------------------------------------------------------------------------------------------------
Assumptions used in the accounting were:
Weighted average discount rates 7.0% 8.0%
Rates of increase in compensation levels 4.0% 5.0%
Weighted average expected long-term return on assets 8.0% 8.0%
NOTE 14: POSTRETIREMENT BENEFITS OTHER THAN PENSIONS
- - --------------------------------------------------------------------------------
WesBanco currently provides a death benefit of $5,000 and a contributory
health insurance plan for all retirees. WesBanco's contribution toward health
insurance is a fixed amount which may be changed at its sole discretion.
In 1992 the Corporation adopted FAS No. 106, "Employers' Accounting for
Postretirement Benefits Other Than Pensions." This statement generally requires
accrual accounting for nonpension postretirement benefits. With the adoption of
FAS No. 106 the Corporation recognized a one time non-cash charge of $943,947
before the applicable income tax benefit of $351,453. The charge to earnings has
been accounted for as a change in accounting principle.
Net periodic postretirement benefit costs other than pension costs in 1993 and
1992 include the following components: (in thousands)
1993 1992
- - ------------------------------------------------
Service cost-benefits earned
during year $ 42 $ 35
Interest cost on projected
benefit obligation 94 74
Net amortization and deferral 5 --
- - ------------------------------------------------
Net periodic postretirement
benefit cost other than
pensions $141 $109
- - ------------------------------------------------
The following table sets forth the liability reflected in the Consolidated
Balance Sheet at December 31, 1993 and 1992: (in thousands)
December 31,
------------------
1993 1992
- - ------------------------------------------------
Accumulated postretirement
benefit obligation:
Retirees $ 545 $ 394
Fully eligible active
plan participants 885 610
- - ------------------------------------------------
Total 1,430 1,004
Unrecognized net loss (334) --
- - ------------------------------------------------
Net benefit liability $1,096 $1,004
- - ------------------------------------------------
Assumptions used in the
accounting were:
Weighted average
discount rate 7% 8%
- - ------------------------------------------------
Postretirement benefits are funded as incurred resulting in cash payments of
approximately $50,000, $48,000 and $43,000 for the years ended December 31,
1993, 1992 and 1991, respectively.
The Corporation's portion of the cost of health care benefits is expected to
remain constant. An assumption of a 1% per year increase in the benefit level
would increase the expense in health care benefits by $36,000 or 30% for the
year ended 1993 and increase the accumulated postretirement benefit obligation
by $183,000 or 18% as of December 31, 1993.
20
21
NOTE 15: OTHER OPERATING EXPENSES
- - --------------------------------------------------------------------------------
Other operating expenses for the years 1993, 1992 and 1991 include: (in
thousands)
1993 1992 1991
- - --------------------------------------------------------------------------------------------
Customer and office supplies $ 1,032 $ 1,049 $ 1,117
Legal and accounting fees 908 896 833
Marketing media 959 759 912
Miscellaneous taxes 1,331 1,430 1,291
FDIC Insurance 1,912 1,876 1,670
Other 4,237 4,092 4,177
- - --------------------------------------------------------------------------------------------
Total $10,379 $10,102 $10,000
- - --------------------------------------------------------------------------------------------
NOTE 16: INCOME TAXES
- - --------------------------------------------------------------------------------
Effective January 1, 1993 the Corporation adopted FAS No. 109, "Accounting for
Income Taxes." The adoption of FAS No. 109 changed the Corporation's method of
accounting for income taxes from the deferred method (APB 11) to an asset and
liability approach. The asset and liability approach requires the recognition of
deferred tax assets and liabilities for the expected future tax consequences of
temporary differences between the carrying amounts and tax bases of assets and
liabilities. Implementation of FAS No. 109 did not result in a material effect
upon the reported financial position or results of operations of the
Corporation.
Pre-tax income from continuing operations for the years ended December 31,
1993, 1992 and 1991 was $19,609,000, $17,607,000 and $14,961,000, respectively.
A reconciliation of the federal statutory tax rate to the reported effective tax
rate is as follows:
Year ended December 31,
-----------------------
1993 1992 1991
- - --------------------------------------------------------------------------------------------
Federal statutory tax rate 35% 34% 34%
Tax-exempt interest income from securities of states and political
subdivisions (11) (12) (14)
State income taxes 3 3 3
Other--net (2) 1 2
- - --------------------------------------------------------------------------------------------
Reported effective tax rate 25% 26% 25%
- - --------------------------------------------------------------------------------------------
The income tax rates for corporations with net income $15,000,000 or more have
been increased from 34% to 35% during 1993. The effect of this rate change was
not significant to the Corporation.
The provision for income taxes in the Consolidated Statement of Income
consists of the following: (in thousands)
Year ended December 31,
----------------------------
1993 1992 1991
- - ---------------------------------------------------------------------------------------------
Current-- Federal $4,326 $4,391 $3,708
State 761 782 660
Deferred-- Federal (258) (744) (607)
State 117 (98) (38)
- - ---------------------------------------------------------------------------------------------
Total $4,946 $4,331 $3,723
- - ---------------------------------------------------------------------------------------------
Tax expense applicable to securities transactions $ 62 $ 173 $ 75
- - ---------------------------------------------------------------------------------------------
21
22
NOTE 16: INCOME TAXES (CONTINUED)
- - --------------------------------------------------------------------------------
The Corporation's Federal and State income tax returns have been examined
through 1990 with no significant adjustment proposed by the Internal Revenue
Service or the State Tax Department.
Deferred tax assets (liabilities) are comprised of the following at December
31, 1993 and January 1, 1993: (in thousands)
DECEMBER 31, 1993 January 1, 1993
- - -------------------------------------------------------------------------------------------------
Deferred tax assets:
Loan loss reserve $3,298 $2,843
Postretirement and pension expense 648 849
Deferred compensation 250 233
Other 57 56
- - -------------------------------------------------------------------------------------------------
Gross deferred tax assets 4,253 3,981
- - -------------------------------------------------------------------------------------------------
Deferred tax liabilities:
Depreciation (497) (475)
Loan loss recapture (180) (232)
Accretion on investments (82) (139)
Other (37) --
- - -------------------------------------------------------------------------------------------------
Gross deferred tax liabilities (796) (846)
- - -------------------------------------------------------------------------------------------------
Deferred tax asset valuation allowance -- --
Net deferred tax assets $3,457 $3,135
- - -------------------------------------------------------------------------------------------------
The deferred portion of the income tax provision as calculated under APB 11
consists of the following: (in thousands)
Year ended December 31,
-----------------------
1992 1991
- - ---------------------------------------------------------------------------------------------------
Postretirement benefits $(383) --
Accretion of discounts on investment securities--net (60) $ (68)
Reserve for possible loan losses (376) (533)
Other--net (23) (44)
- - ---------------------------------------------------------------------------------------------------
Total $(842) $(645)
- - ---------------------------------------------------------------------------------------------------
NOTE 17: CONDENSED PARENT COMPANY FINANCIAL STATEMENTS
- - --------------------------------------------------------------------------------
Presented below are the condensed Balance Sheet, Statement of Income and
Statement of Cash Flows for the Parent Company: (in thousands)
BALANCE SHEET
December 31,
----------------------
1993 1992
- - --------------------------------------------------------------------------------------------------
ASSETS
Cash $ 3,192 $ 545
Investment in subsidiary banks (at equity in net assets) 118,081 115,152
Investment securities:
States and political subdivisions (market values of $2,749 and $1,360,
respectively) 2,737 1,353
Investments available for sale (market values of $1,584 and $452,
respectively) 1,477 394
Other assets 1,946 1,463
- - --------------------------------------------------------------------------------------------------
TOTAL ASSETS $127,433 $118,907
- - --------------------------------------------------------------------------------------------------
LIABILITIES
Long-term borrowings (Note 19) $ 757 $ 560
Other liabilities 1,499 1,356
- - --------------------------------------------------------------------------------------------------
TOTAL LIABILITIES 2,256 1,916
TOTAL SHAREHOLDERS' EQUITY 125,177 116,991
- - --------------------------------------------------------------------------------------------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $127,433 $118,907
- - --------------------------------------------------------------------------------------------------
22
23
NOTE 17: CONDENSED PARENT COMPANY FINANCIAL STATEMENTS (CONTINUED)
- - --------------------------------------------------------------------------------
STATEMENT OF INCOME
Year ended December 31,
-------------------------------
1993 1992 1991
- - --------------------------------------------------------------------------------------------
Dividends from subsidiary banks $11,920 $ 5,020 $ 3,560
Income from investments 134 109 129
Other income 2 53 6
- - --------------------------------------------------------------------------------------------
TOTAL INCOME 12,056 5,182 3,695
- - --------------------------------------------------------------------------------------------
TOTAL EXPENSES 719 531 553
- - --------------------------------------------------------------------------------------------
Income before income tax benefit and equity in
undistributed net income of subsidiary banks 11,337 4,651 3,142
Income tax benefit 396 188 196
- - --------------------------------------------------------------------------------------------
Income before equity in undistributed net income of
subsidiary banks 11,733 4,839 3,338
Equity in undistributed net income of subsidiary banks 2,930 7,493 7,900
- - --------------------------------------------------------------------------------------------
NET INCOME $14,663 $12,332 $11,238
- - --------------------------------------------------------------------------------------------
STATEMENT OF CASH FLOWS
Year ended December 31,
-------------------------------
1993 1992 1991
- - --------------------------------------------------------------------------------------------
Operating activities:
Net Income $14,663 $12,332 $11,238
Undistributed earnings of subsidiary banks (2,930) (7,493) (7,900)
Proceeds from the sales of investments available for sale 1,001 -- --
Proceeds from the maturities and calls of investments
available for sale 3,992 -- --
Purchases of investment securities available for sale (6,080) -- --
Other--net (667) (1,266) (125)
- - --------------------------------------------------------------------------------------------
Net cash provided by operating activities 9,979 3,573 3,213
- - --------------------------------------------------------------------------------------------
Investing activities:
Proceeds from maturities of investment securities 1,053 1,587 1,227
Purchases of investment securities (2,461) (1,347) (1,360)
Change in investment in subsidiary banks -- -- 75
- - --------------------------------------------------------------------------------------------
Net cash provided (used) by investing activities (1,408) 240 (58)
- - --------------------------------------------------------------------------------------------
Financing activities:
Principal payments on ESOP related debt (225) (161) (161)
Proceeds from ESOP related borrowings 422 560 --
Change in treasury stock--net (1,102) (33) 56
Dividends paid (5,019) (3,966) (3,203)
- - --------------------------------------------------------------------------------------------
Net cash used by financing activities (5,924) (3,600) (3,308)
- - --------------------------------------------------------------------------------------------
Net increase (decrease) in cash 2,647 213 (153)
Cash at beginning of year 545 332 485
- - --------------------------------------------------------------------------------------------
Cash at end of year $ 3,192 $ 545 $ 332
- - --------------------------------------------------------------------------------------------
The operations of the subsidiary banks are subject to federal and state
statutes which limit the banks' ability to pay dividends or otherwise transfer
funds to the Parent Company. At December 31, 1993 the banks, without prior
approval from the regulators, could have distributed dividends of approximately
$17,701,000.
23
24
NOTE 18: CERTIFICATES OF DEPOSIT
- - --------------------------------------------------------------------------------
Maturities of certificates of deposit in denominations of $100,000 or more are
as follows: (in thousands)
December 31,
-------------------
Maturity 1993 1992
- - -------------------------------------------------------------------------------------------
Under three months $19,202 $18,127
Three to six months 6,896 8,415
Six to twelve months 4,608 7,957
Over twelve months 10,939 6,684
- - -------------------------------------------------------------------------------------------
Total $41,645 $41,183
- - -------------------------------------------------------------------------------------------
Interest expense on certificates of deposit of $100,000 or more was
approximately $1,953,000 in 1993, $2,098,000 in 1992 and $3,282,000 in 1991.
NOTE 19: ESOP AND LONG TERM BORROWINGS
- - --------------------------------------------------------------------------------
The Corporation has a qualified noncontributory Employee Stock Ownership Plan
(ESOP) and Trust Agreement for the purpose of investing in the common stock of
WesBanco on behalf of its employees. Currently, the ESOP Trust holds 85,911
shares of WesBanco common stock. Substantially all employees are included in
this plan. Approximately 54,444 shares of stock were allocated to specific
employee accounts as of December 31, 1993.
During September 1992, the WesBanco ESOP Trust entered into a revolving loan
agreement with an independent financial institution providing for a line of
credit in the aggregate amount of $1,000,000 to facilitate purchases of WesBanco
common stock in the open market. Subsequently, the ESOP Trust purchased 41,800
shares of stock for $981,725 with funds provided under the revolving loan,
pledging those shares as collateral. The loan bears interest at a rate equal to
the lender's base rate and requires annual repayments of principal equal to 20%
of the balance at January 1 of each year. The loan has a final maturity date of
5 years from date of inception. The $1,000,000 revolving line of credit has a
balance of $757,000 as of December 31, 1993.
Contributions to the ESOP during 1993, 1992 and 1991 were $246,000, $180,000
and $161,000, respectively, which approximated the required loan payments.
NOTE 20: SUBSEQUENT EVENT--MERGER
- - --------------------------------------------------------------------------------
On February 28, 1994, WesBanco, Inc. consummated a merger with First Fidelity
Bancorp, Inc.(Fidelity). In accordance with terms of the merger approximately
2,094,286 shares of WesBanco common stock were issued for all of Fidelity's
common stock. The outstanding series A 8% cumulative convertible preferred stock
of Fidelity was converted into shares of series A 8% cumulative convertible
preferred stock of WesBanco.
The acquisition is being accounted for as a pooling-of-interests. The
following information summarizes total assets, net interest income, net income,
and earnings per share on a proforma basis as if the acquisition had been
consummated on the first day of each year presented: (in thousands, except for
per share amounts).
WesBanco, Inc. First (Unaudited)
As previously Fidelity Proforma
Year presented Bancorp, Inc. Combined
- - -----------------------------------------------------------
Total assets:
12/31/93 $1,038,882 $307,965 $1,346,838
12/31/92 1,010,104 306,192 1,316,294
Net interest
income:
1993 42,360 13,912 56,272
1992 39,675 14,013 53,688
1991 36,287 13,376 49,663
Net income:
1993 14,663 3,178 17,841
1992 12,332 3,547 15,879
1991 11,238 3,165 14,403
Earnings per
share:
1993 2.22 1.29 2.03
1992 1.87 1.46 1.81
1991 1.70 1.30 1.64
24
25
WESBANCO, INC.
CONDENSED QUARTERLY STATEMENT OF INCOME
- - --------------------------------------------------------------------------------
(In thousands, except for earnings per share)
1993 QUARTER ENDED
-----------------------------------------------------------------
ANNUAL
MARCH 31 JUNE 30 SEPTEMBER 30 DECEMBER 31 TOTAL
- - ---------------------------------------------------------------------------------------------------
Interest income $18,492 $18,589 $18,780 $18,059 $73,920
Interest expense 8,218 7,960 7,756 7,626 31,560
- - ---------------------------------------------------------------------------------------------------
Net interest income 10,274 10,629 11,024 10,433 42,360
Provision for loan losses 702 525 473 984 2,684
- - ---------------------------------------------------------------------------------------------------
Net interest income after
provision for loan losses 9,572 10,104 10,551 9,449 39,676
Other income 2,259 2,247 1,998 2,193 8,697
Other expenses 6,836 7,346 7,171 7,411 28,764
- - ---------------------------------------------------------------------------------------------------
Income before income taxes 4,995 5,005 5,378 4,231 19,609
Provision for income taxes 1,360 1,329 1,448 809 4,946
- - ---------------------------------------------------------------------------------------------------
Net Income $ 3,635 $ 3,676 $ 3,930 $ 3,422 $14,663
- - ---------------------------------------------------------------------------------------------------
Earnings per share(1) $ .55 $ .55 $ .60 $ .52 $ 2.22
- - ---------------------------------------------------------------------------------------------------
1992 Quarter ended
-----------------------------------------------------------------
Annual
March 31 June 30 September 30 December 31 Total
- - -----------------------------------------------------------------------------------------------------
Interest income $19,833 $19,617 $19,388 $18,959 $77,797
Interest expense 10,291 9,845 9,393 8,593 38,122
- - -----------------------------------------------------------------------------------------------------
Net interest income 9,542 9,772 9,995 10,366 39,675
Provision for loan losses 415 556 607 1,272 2,850
- - -----------------------------------------------------------------------------------------------------
Net interest income after
provision for loan losses 9,127 9,216 9,388 9,094 36,825
Other income 2,349 2,086 1,982 2,033 8,450
Other expenses 6,665 7,252 6,930 6,821 27,668
- - -----------------------------------------------------------------------------------------------------
Income before income taxes and
effect of prior years'
postretirement benefits 4,811 4,050 4,440 4,306 17,607
Provision for income taxes 1,353 1,111 1,211 1,008 4,683
- - -----------------------------------------------------------------------------------------------------
Income before effect of prior
years' postretirement benefits 3,458 2,939 3,229 3,298 12,924
Effect of prior years'
postretirement benefits--net of
tax effect (592) -- -- -- (592)
- - -----------------------------------------------------------------------------------------------------
Net Income $ 2,866 $ 2,939 $ 3,229 $ 3,298 $12,332
- - -----------------------------------------------------------------------------------------------------
Earnings per share:(1)
Income before effect of prior
years' postretirement benefits $ .52 $ .44 $ .49 $ .51 $ 1.96
Effect of prior years'
postretirement benefits--net of
tax effect (.09) -- -- -- (.09)
- - -----------------------------------------------------------------------------------------------------
Net Income $ .43 $ .44 $ .49 $ .51 $ 1.87
- - -----------------------------------------------------------------------------------------------------
(1) Adjusted for two-for-one stock split which occurred during April 1993.
25
26
WESBANCO, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF THE
CONSOLIDATED FINANCIAL STATEMENTS
- - --------------------------------------------------------------------------------
Management's discussion and analysis represents an overview of the financial
condition and results of operations of WesBanco, Inc. This discussion and
analysis should be read in conjunction with the Consolidated Financial
Statements and Notes thereto. Following is the five year Selected Financial
Summary.(1)
December 31,
--------------------------------------------------------------
1993 1992 1991 1990 1989
- - -------------------------------------------------------------------------------------------------
Cash dividends declared(2) $ .785 $ .70 $ .675 $ .65 $ .60
Book value(2) 19.03 17.69 16.59 15.43 14.27
Average common shares
outstanding(2) 6,595,684 6,613,382 6,610,722 6,617,748 6,614,944
Selected Balance Sheet
Information:
(in thousands)
Total Investments $ 403,778 $ 411,054 $331,915 $340,506 $311,098
Net Loans 555,878 524,626 502,118 475,528 453,891
Total Assets 1,038,882 1,010,104 966,501 946,220 886,140
Total Deposits 854,391 838,171 801,016 789,040 745,492
Total Shareholders' Equity 125,177 116,991 109,720 101,982 94,592
Selected Ratios:
Return on Assets 1.43% 1.24% 1.19% 1.23% 1.30%
Return on Equity 12.11 10.88 10.62 11.48 12.41
Dividend Payout Ratio 35.00 38.00 35.00 33.00 30.00
Average Equity to Average Assets 11.81 11.40 11.21 10.73 10.51
Year ended December 31,
-----------------------------------------------
1993 1992 1991 1990 1989
- - ------------------------------------------------------------------------------------------------
Summary Statement of Income: (in thousands)
Interest income $73,920 $77,797 $82,645 $84,493 $80,218
Interest expense 31,560 38,122 46,358 50,130 46,242
- - ------------------------------------------------------------------------------------------------
Net interest income 42,360 39,675 36,287 34,363 33,976
Provision for loan losses 2,684 2,850 2,337 1,984 1,978
- - ------------------------------------------------------------------------------------------------
Net interest income after provision for loan
losses 39,676 36,825 33,950 32,379 31,998
Other income 8,697 8,450 7,810 7,247 6,830
Other expenses 28,764 27,668 26,799 24,922 23,784
- - ------------------------------------------------------------------------------------------------
Income before income taxes and effect of prior
years' postretirement benefits 19,609 17,607 14,961 14,704 15,044
Provision for income taxes 4,946 4,683 3,723 3,424 3,790
- - ------------------------------------------------------------------------------------------------
Income before effect of prior years'
postretirement benefits 14,663 12,924 11,238 11,280 11,254
Effect of prior years' postretirement
benefits--net of tax effect -- (592) -- -- --
- - ------------------------------------------------------------------------------------------------
Net Income $14,663 $12,332 $11,238 $11,280 $11,254
- - ------------------------------------------------------------------------------------------------
Per Share:(2)
Income before effect of prior years'
postretirement benefits $ 2.22 $ 1.96 $ 1.70 $ 1.71 $ 1.70
Effect of prior years' postretirement
benefits--
net of tax effect -- (.09) -- -- --
- - ------------------------------------------------------------------------------------------------
Net Income $ 2.22 $ 1.87 $ 1.70 $ 1.71 $ 1.70
- - ------------------------------------------------------------------------------------------------
(1) See Note 1 of the Notes to Consolidated Financial Statements.
(2) Adjusted for two-for-one stock split which occurred during April 1993.
26
27
EARNINGS SUMMARY
- - --------------------------------------------------------------------------------
WesBanco reported net income of $14,663,000 for the year ended December 31,
1993 as compared to $12,332,000 and $11,238,000 for the years ended December 31,
1992 and 1991, respectively. This increase of 18.9% over 1992 and 30.48% over
1991 can be attributed to increases in net interest income. Return on assets
(ROA) and return on equity (ROE) have continued to improve over past years. ROA
was 1.43% for the year ending December 31, 1993 as compared to 1.24% and 1.19%
for the years ending December 31, 1992 and 1991, respectively. ROE was 12.11%
for the year ending December 31, 1993 and 10.88% and 10.62% for the years ending
December 31, 1992 and 1991, respectively.
Taxable equivalent net interest income expressed as a percentage of average
earning assets improved to 4.7% for the year ended December 31, 1993 from 4.5%
and 4.4% for the years ended 1992 and 1991, respectively. Net interest income as
a percentage of average earning assets is adjusted for the taxable equivalent
basis of non-taxable investment securities using a tax rate of 34.3% for 1993
and 34% for 1992 and 1991, respectively. WesBanco was able to manage interest
earning assets and interest bearing liabilities to provide for an increased net
interest margin. During the past three years, nationwide bank base lending rates
ranged from a high of 10% during 1991 to a low of 6.0% as of December 31, 1993.
The decline in market interest rates has caused a decline in average yields
earned on assets and rates paid on liabilities. The yield on WesBanco's average
earning assets decreased during 1993 to 7.6% from 8.3% during 1992. The yield on
average earning assets was 9.3% for the year 1991. A similar decrease in average
rates paid on deposits caused the average rates paid on interest bearing
liabilities to decrease to 3.5% during 1993 from 4.4% during 1992. The average
rate paid on interest bearing liabilities was 5.6% during 1991.
The following table presents an average balance sheet and interest rates:
(dollars in thousands)
For the years ended December 31,
---------------------------------------------------------------------------------------
1993 1992 1991
----------------------------- -------------------------- --------------------------
Average Average Average Average Average Average
Volume Interest Rate Volume Interest Rate Volume Interest Rate
- - ----------------------------------------------------------------------------------------------------------------
ASSETS
Loans $ 537,842 $47,748 8.88% $512,969 $49,146 9.58% $488,896 $52,200 10.68%
Taxable investment
securities 295,174 18,573 6.29 278,111 20,312 7.30 246,969 20,499 8.30
Non-taxable investment
securities 107,788 6,338 5.88 85,959 5,634 6.55 80,598 5,725 7.10
Federal funds sold 10,745 319 2.97 45,752 1,721 3.76 61,239 3,430 5.60
Other investments 15,501 942 6.07 14,543 984 6.77 10,574 791 7.48
- - ----------------------------------------------------------------------------------------------------------------
Total interest
earning assets 967,050 $73,920 7.64% 937,334 $77,797 8.30% 888,276 $82,645 9.30%
- - ----------------------------------------------------------------------------------------------------------------
Cash and due from banks 27,384 27,099 26,882
Other assets 30,627 29,520 28,974
- - ----------------------------------------------------------------------------------------------------------------
Total Assets $1,025,061 $993,953 $944,132
- - ----------------------------------------------------------------------------------------------------------------
LIABILITIES AND SHAREHOLDERS' EQUITY
Noninterest bearing
demand $ 84,805 $ 79,501 $ 78,758
Interest bearing demand 215,168 $ 6,758 3.14% 200,551 $ 8,129 4.05% 160,806 $ 8,455 5.26%
Savings deposits 218,425 7,223 3.31 187,477 7,695 4.10 148,644 7,630 5.13
Certificates of
deposits 329,169 16,162 4.91 361,157 20,833 5.77 397,466 27,975 7.04
Federal funds purchased
and repurchase
agreements 40,098 1,278 3.19 32,460 1,282 3.95 33,804 1,959 5.80
Other borrowings 5,839 139 2.38 5,746 183 3.18 6,477 339 5.23
- - ----------------------------------------------------------------------------------------------------------------
Total deposits and
interest bearing
liabilities 893,504 $31,560 3.53% 866,892 $38,122 4.40% 825,955 $46,358 5.61%
- - ----------------------------------------------------------------------------------------------------------------
Other liabilities 10,473 13,706 12,326
Shareholders' Equity 121,084 113,355 105,851
- - ----------------------------------------------------------------------------------------------------------------
Total Liabilities and
Shareholders'
Equity $1,025,061 $993,953 $944,132
- - ----------------------------------------------------------------------------------------------------------------
Net interest revenue as
a percentage of
average earning
assets $42,360 4.38% $39,675 4.23% $36,287 4.09%
- - ----------------------------------------------------------------------------------------------------------------
Fully taxable equivalent basis $45,669 4.72% $42,577 4.54% $39,236 4.42%
- - ----------------------------------------------------------------------------------------------------------------
Nonaccrual loans were included in the average volume for the entire year. Loan
fees included in interest on loans are not material.
27
28
The effect on interest income and interest expense for the years ended
December 31, 1993 and 1992, due to changes in average volume and rate from the
prior year, is presented below. The effect of a change in average volume has
been determined by applying the average rate in the earlier year to the change
in volume. The change in rate has been determined by applying the average volume
in the earlier year to the change in rate. The change in interest due to both
rate and volume has been allocated to volume and rate changes in proportion to
the relationship of the absolute dollar amounts of change in each: (in
thousands)
1993 Compared to 1992 1992 Compared to 1991
------------------------------------ -----------------------------------
Net Net
increase increase
Volume Rate (decrease) Volume Rate (decrease)
- - ------------------------------------------------------------------------------------------------------------
Loans $ 2,313 $(3,711) $(1,398) $ 2,485 $(5,539) $(3,054)
Taxable investment
securities 1,193 (2,932) (1,739) 2,426 (2,613) (187)
Non-taxable investment
securities 1,326 (623) 703 367 (458) (91)
Federal funds sold (1,099) (303) (1,402) (743) (966) (1,709)
Other investments 62 (103) (41) 274 (81) 193
- - ------------------------------------------------------------------------------------------------------------
Total interest earned 3,795 (7,672) (3,877) 4,809 (9,657) (4,848)
- - ------------------------------------------------------------------------------------------------------------
Interest bearing demand 560 (1,931) (1,371) 1,841 (2,167) (326)
Savings deposits 1,157 (1,629) (472) 1,767 (1,702) 65
Certificates of deposit (1,743) (2,927) (4,670) (2,401) (4,741) (7,142)
Federal funds purchased and
repurchase agreements 270 (274) (4) (75) (602) (677)
Other borrowings 3 (48) (45) (35) (121) (156)
- - ------------------------------------------------------------------------------------------------------------
Total interest paid 247 (6,809) (6,562) 1,097 (9,333) (8,236)
- - ------------------------------------------------------------------------------------------------------------
Net interest differential $ 3,548 $ (863) $ 2,685 $ 3,712 $ (324) $ 3,388
- - ------------------------------------------------------------------------------------------------------------
INVESTMENTS
- - --------------------------------------------------------------------------------
Investment securities declined by $7,276,000 in 1993 after increasing
$79,139,000 in 1992. The decline in investments during 1993 was required
to fund loan growth. Increased loan demand exceeded deposit growth during 1993,
therefore funds from matured or called securities were used to meet the increase
in loan demand. The increase in investment securities during 1992 was
attributable to the investment of federal funds sold and the investment of funds
through deposit growth. The investment portfolio has been managed to maintain a
minimal balance in federal funds to avoid the earnings penalty associated with
holding excess liquidity. The average balance on federal funds sold declined
approximately $35,007,000 between 1993 and 1992 and approximately $15,487,000
between 1992 and 1991. Interest rates declined throughout the year and the yield
on federal funds was near its lowest in over 20 years. Management believes that
the scheduled payments in both the loan and investment portfolios will provide
for sufficient liquidity. Approximately $57,911,000 or 14% of the portfolio will
mature or is expected to be called for redemption during 1994 providing for
potential liquidity needs. The average maturity of the portfolio at December 31,
1993 was 3.6 years as compared to 3.5 years and 3.3 years for the years ended
December 31, 1992 and 1991, respectively.
28
29
The maturity distribution using book values which include accretion of
discounts and the amortization of premiums and approximate yield of investment
securities at December 31, 1993 is presented in the following table. Tax
equivalent yield basis was not used. Approximate yield was calculated using a
weighted average of yield to maturities (dollars in thousands).
After One But After Five But
Within Five Within Ten
Within One Year Years Years After Ten Years
--------------- ---------------- --------------- ---------------
Amount Yield Amount Yield Amount Yield Amount Yield
- - ---------------------------------------------------------------------------------------------------
U.S. Treasury and other
U.S. Government
Agencies -- -- $171,024 5.77% $28,875 5.36% -- --
States & political
subdivisions $12,307 6.49% 46,892 5.78 52,800 5.17 $5,805 5.23%
Mortgage-backed
securities 219 7.81 812 7.92 608 8.02 513 7.93
Other investments (1) -- -- -- -- -- -- 791 5.07
Investments available
for sale 45,385 7.05 20,171 6.07 16,748 5.31 828 5.40
- - ---------------------------------------------------------------------------------------------------
Total $57,911 6.93% $238,899 5.80% $99,031 5.27% $7,937 5.41%
- - ---------------------------------------------------------------------------------------------------
(1) Represents investments with no stated maturity dates.
Investment securities with a total book value of $107,291,000 either matured
or were called during 1993 as compared to $97,191,000 during 1992. Of the
$107,291,000 of maturities and calls during 1993, $72,414,000 represented
maturities and $34,877,000 represented calls. Investment securities of
$37,577,000 and $25,844,000 were sold during 1993 and 1992, respectively. As a
result, 36% of the investment portfolio repriced during 1993 as compared to 30%
during the previous year. U.S. Treasury and Federal Agency securities held to
maturity make up half of the investment portfolio as compared to 57% during
1992. The proceeds provided from the decline in this type of investment were
used to fund loan growth and increase the Corporation's investment in municipal
securities. Municipal securities increased by $17,796,000 during 1993 after
increasing $18,288,000 during 1992. Municipal securities on a taxable equivalent
basis provide the highest yield in the investment portfolio. Management will
continue to take advantage of market opportunities to further increase
investments in the municipal sector which now comprises 29% of the portfolio.
Corporate securities comprise only 2% of the investment portfolio. Management
expects to sell corporate bonds during 1994 due to the more rapid decline in
yields as compared to declines in yields on other types of investments.
There are no issues included in obligations of state and political
subdivisions, other investments or investments available for sale which
individually or in the aggregate exceed 10% of shareholders' equity as of
December 31, 1993.
On January 1, 1994 the Corporation implemented FAS No. 115, "Accounting for
Certain Investments in Debt and Equity Securities." This statement requires
banks to classify debt and equity securities into one of three categories: held
to maturity, available for sale, or trading. Investment securities that are
classified available for sale are measured at fair value and the unrealized
holding gains and losses will be reflected as a net of tax amount in a separate
component of shareholders' equity until realized. As of January 1, 1994 this
will have an effect of increasing investments by $5,259,000 and increasing
shareholders' equity by $3,182,000 after the tax effect of ($2,077,000). At this
time the Corporation has not designated any security in the trading category.
All other securities are classified as held for investment which will be stated
at amortized cost.
Investment income declined by $1,077,000 during 1993 after declining by
$85,000 during 1992. The large decline was due to the decrease in investment
securities along with a decrease in the average rates earned on securities. The
average yield on taxable securities was 6.3% for 1993 as compared to 7.3% for
1992 and 8.3% for 1991. The average yield on nontaxable securities, not adjusted
for tax equivalency, was 5.9% for 1993 as compared to 6.6% for 1992 and 7.1% for
1991. Net realized securities gains amounted to $160,000 in 1993 as compared to
$402,000 and $173,000 in 1992 and 1991, respectively. Gains and losses on
securities are dependent upon the changing bond market conditions as well as
management's decisions regarding interest rates and the composition of the
portfolio. At year end 1993, the market value of securities classified as held
to maturity exceeded book value by $7,653,000 and the market value of securities
classified as available for sale exceeded book value by $1,565,000.
29
30
LOANS
- - --------------------------------------------------------------------------------
WesBanco has continued its trend of steady loan growth during 1993 as loans
outstanding increased $32,343,000 or 6.1% to $566,795,000 after a growth of
$23,045,000 or 4.5% during 1992. The loan growth can be attributed to the
increase in real estate and installment loans which increased $18,331,000 and
$13,055,000, respectively. This represents individual portfolio increases of
7.5% for real estate loans and 8.5% for installment loans. These increases were
largely due to consumers refinancing homes and automobiles to take advantage of
the lower interest rates. Commercial loans increased less than 1% during 1993
largely due to the uncertainty of the overall local economy. Loan growth was
funded through a decline in the investment securities portfolio. Commercial
loans comprise twenty-four percent (24%) of the loan portfolio, real estate
secured loans comprise forty-seven percent (47%) and consumer-type loans
comprise twenty-nine percent (29%). The only change in composition from the
prior year was a 1% decrease in commercial loans and a 1% increase in real
estate secured loans. WesBanco's lending limit to one customer was $19,107,000
as of December 31, 1993. The following is a five year summary of loans
outstanding as of December 31, of each year: (in thousands)
1993 1992 1991 1990 1989
- - -----------------------------------------------------------------------------------------------
Loans:
Commercial $136,076 $135,119 $146,793 $148,036 $144,486
Real estate--construction 18,666 11,930 4,524 6,232 7,632
Real estate--mortgage 244,916 233,321 214,505 201,489 188,534
Installment 167,137 154,082 145,585 127,738 120,465
- - -----------------------------------------------------------------------------------------------
Total loans $566,795 $534,452 $511,407 $483,495 $461,117
- - -----------------------------------------------------------------------------------------------
The lower interest rates contributed to the increase in loans outstanding, as
well as a decline in interest and fees on loans. Interest and fees on loans
declined $1,398,000 or 2.8% during 1993 after declining $3,054,000 or 5.9%
during 1992. Average rates earned on loans decreased by .7% during 1993 and 1.1%
during 1992. The majority of commercial and mortgage loans reprice monthly or
annually based on changes in national indices such as the prime rate or the one
year U.S. Treasury Bill rate. The average yield earned on the loan portfolio
during 1993 was 8.9% as compared to 9.6% and 10.7% during 1992 and 1991,
respectively.
Loans classified as nonaccrual or renegotiated were $7,842,000 or 1.4% of
total loans as of December 31, 1993 as compared to $6,645,000
or 1.2% as of December 31, 1992. During 1993, nonaccrual loans increased by
$5,075,000 to $7,674,000, however; during the same time period, renegotiated
loans declined by $3,878,000 to $168,000. The increase in nonaccrual loans was
primarily due to a reclassification of a renegotiated loan totaling $3,823,000
to nonaccrual status during 1993. A commercial loan totaling $1,216,000 was also
placed on nonaccrual status during 1993. All nonaccrual loans are secured by
collateral believed to have adequate market values to protect the Corporation
from significant losses. The renegotiated loans consist of four loans which have
had their original terms modified so as to meet the changes in the circumstances
of the borrowers. The loans are considered to be well secured and management
does not anticipate any associated losses. Nonaccrual and renegotiated loans
declined $2,370,000 during 1992 primarily due to one customer's improvement of
operations and increased debt service ability justifying a renewed extension of
credit at market terms and conditions. The decrease in nonaccrual loans during
1991 by $3,005,000 was primarily due to the transfer of three commercial loans
into the in-substance foreclosures category. During 1990, renegotiated loans
increased $4,932,000 to $6,394,000 primarily due to the terms of one commercial
real estate loan being renegotiated. Loans totaling $2,110,000 are classified as
other real estate owned as of December 31, 1993 as compared to $2,904,000 as of
December 31, 1992. Other real estate owned has remained fairly consistent over
the past five years except for 1990. The decrease during 1990 was due to the
sale of property held as other real estate. Loans past due ninety days or more
decreased $1,004,000 during 1993 and have continued to remain steady over the
past few years. Management continues to monitor the nonperforming assets to
ensure against deterioration in collateral values.
30
31
The following is a five year summary of nonperforming assets: (in thousands)
December 31,
-------------------------------------------------------
1993 1992 1991 1990 1989
- - ------------------------------------------------------------------------------------------------
Past Due 90 Days or More:
Installment $ 522 $ 627 $ 394 $ 455 $ 332
Commercial 563 1,593 121 238 431
Real Estate 575 444 1,719 993 1,919
- - ------------------------------------------------------------------------------------------------
1,660 2,664 2,234 1,686 2,682
- - ------------------------------------------------------------------------------------------------
Renegotiated:
Installment -- -- 8 -- --
Commercial 80 3,938 4,507 5,000 --
Real Estate 88 108 794 1,394 1,462
- - ------------------------------------------------------------------------------------------------
168 4,046 5,309 6,394 1,462
- - ------------------------------------------------------------------------------------------------
Nonaccrual:
Installment 88 137 86 91 87
Commercial 6,179 1,901 2,693 5,489 4,998
Real Estate 1,407 561 927 1,131 886
- - ------------------------------------------------------------------------------------------------
7,674 2,599 3,706 6,711 5,971
- - ------------------------------------------------------------------------------------------------
Other Real Estate Owned:
(Including in-substance foreclosures) 2,110 2,904 3,104 316 1,621
- - ------------------------------------------------------------------------------------------------
Total nonperforming assets $11,612 $12,213 $14,353 $15,107 $11,736
- - ------------------------------------------------------------------------------------------------
Percentage of nonperforming assets to
loans outstanding 2.1% 2.3% 2.8% 3.1% 2.5%
- - ------------------------------------------------------------------------------------------------
Net loan chargeoffs were $1,752,000 in 1993 as compared to $2,021,000 in 1992
and $1,981,000 in 1991. The majority of net chargeoffs in 1993 were due to the
writedowns on commercial loans, the single largest writedown being
approximately $400,000. The increase in personal bankruptcies contributed to
the increase in net chargeoffs on consumer type loans. The provision for loan
losses decreased to $2,684,000 in 1993 from $2,850,000 in 1992. The provision
for loan losses was $2,337,000 during 1991. The reserve for possible loan
losses to total loans was 1.65% as of December 31, 1993 as compared to 1.57% as
of December 31, 1992. Net loan chargeoffs were 19% and 24% of the reserve as of
December 31, 1993 and 1992, respectively. The reserve for possible loan losses
is considered to be adequate to provide for future losses in the loan
portfolio. The amount charged to earnings is based on periodic management
evaluations of the loan portfolio as well as prevailing and anticipated
economic conditions, net loans charged off, past loan experiences, current
delinquency factors, changes in the character of the loan portfolio, specific
problem loans and other
31
32
factors. The historical relationship between average loans, loan losses and
recoveries and the provision for loan losses is presented in the following
table: (in thousands)
1993 1992 1991 1990 1989
- - ------------------------------------------------------------------------------------------------
Beginning balance--
Reserve for possible loan losses $8,367 $7,476 $7,120 $6,507 $5,946
Reserve from purchased affiliate -- 62 -- -- --
Loans charged off:
Commercial 1,066 1,436 1,372 1,202 792
Real estate--construction -- -- -- 5 --
Real estate--mortgage 175 242 98 242 277
Installment 1,075 995 799 629 819
- - ------------------------------------------------------------------------------------------------
Total loans charged off 2,316 2,673 2,269 2,078 1,888
- - ------------------------------------------------------------------------------------------------
Recovery of previously charged off:
Commercial 177 428 96 475 200
Real estate--construction -- -- 2 -- --
Real estate--mortgage 35 33 25 69 37
Installment 352 191 165 163 234
- - ------------------------------------------------------------------------------------------------
Total recoveries 564 652 288 707 471
- - ------------------------------------------------------------------------------------------------
Net loans charged off 1,752 2,021 1,981 1,371 1,417
- - ------------------------------------------------------------------------------------------------
Additions to reserve charged to operating
expense 2,684 2,850 2,337 1,984 1,978
- - ------------------------------------------------------------------------------------------------
Ending balance--
Reserve for possible loan losses $9,299 $8,367 $7,476 $7,120 $6,507
- - ------------------------------------------------------------------------------------------------
Ratio of net loans charged off to average
loans outstanding for the period .33% .39% .41% .29% .32%
- - ------------------------------------------------------------------------------------------------
Ratio of the reserve for possible loan
losses to loans outstanding at the end of
the period 1.65% 1.57% 1.46% 1.47% 1.41%
- - ------------------------------------------------------------------------------------------------
WesBanco has allocated the reserve for possible loan losses to specific
portfolio segments based upon historical net charge-off experience, changes in
the level of nonperforming assets, local economic conditions and management
experience. The Corporation has historically maintained a reserve for possible
loan losses which is greater than actual charge-offs. Charge-offs for the year
1994 are anticipated to be within the historical ranges as detailed in the
summary of loan loss experience. Management maintains loan quality through
monthly reviews of past due loans, and a quarterly review of significant loans
which are considered by affiliate bank personnel to be potential problem loans.
Periodic reviews of loans are completed by personnel independent of the loan
function. There are no significant loans made to customers outside the general
market area of each affiliate bank. At times, in order to maintain loan volumes,
loans are purchased from correspondent banks. These loans aggregate less than
$7,000,000 as of December 31, 1993. Each bank within the Corporation follows its
usual loan analysis procedures before a determination is made to purchase this
type of loan. Management's review of the loan portfolio has not indicated any
material amount of loans, not disclosed in the accompanying tables and
discussions which are known to have possible credit problems which cause
management to have serious doubts as to the ability of each borrower to comply
with their present loan repayment terms. There were no loan concentrations in
excess of 10% of total consolidated loans.
Management of the banks did not allocate the reserve for possible loan losses
by loan classification prior to December 31, 1991. The following represents the
allocation of the reserve for possible loan losses as of December 31, 1993,
1992, and 1991: (dollars in thousands)
December 31,
--------------------------------------------------------------------------
1993 1992 1991
---------------------- --------------------- ---------------------
Amount % of Loans Amount % of Loans Amount % of Loans
- - -------------------------------------------------------------------------------------------------------------
Specific Reserves:
Commercial and unallocated $7,730 24% $6,373 25% $5,938 29%
Real estate--construction -- 3 -- 2 -- 1
Real estate--mortgage 517 44 783 44 683 42
Installment 1,052 29 1,211 29 855 28
- - -------------------------------------------------------------------------------------------------------------
Total $9,299 100% $8,367 100% $7,476 100%
- - -------------------------------------------------------------------------------------------------------------
32
33
The following table presents the approximate maturities of loans, other than
installment loans and residential mortgages, as well as classification by fixed
or variable interest rates for all affiliate banks as of December 31, 1993: (in
thousands)
After one
In one year year through After five
or less five years years
- - --------------------------------------------------------------------------------------------------------
Commercial $81,960 $24,243 $29,873
Real estate:
Construction 15,867 -- --
Other real estate 1,029 7,756 43,131
- - --------------------------------------------------------------------------------------------------------
Total $98,856 $31,999 $73,004
- - --------------------------------------------------------------------------------------------------------
Fixed rates $29,567 $17,528 $16,168
Variable rates 69,289 14,471 56,836
- - --------------------------------------------------------------------------------------------------------
Total $98,856 $31,999 $73,004
- - --------------------------------------------------------------------------------------------------------
All affiliate banks generally recognize interest income on the accrual basis,
except for certain loans which are placed on a nonaccrual status, when in the
opinion of management, doubt exists as to collectability. All banks must conform
to the Board of Governors of the Federal Reserve System and the Office of the
Comptroller of Currency Policy which states that banks may not accrue interest
on any loan on which either the principal or interest is past due 90 days or
more unless the loan is both well secured and in the process of collection. When
a loan is placed on a nonaccrual status, interest income is recognized as cash
payments are received. During 1993, $607,000 was included in net interest income
from renegotiated and nonaccrual loans.
Each bank within the Corporation has its own renewal policies regarding
commercial and real estate-construction loans, however real estate-construction
loans are generally not renewed at any bank. Depending on the size of each
institution, commercial loans above certain pre-approved dollar limits must be
reviewed by the respective credit review committee or senior management prior to
extension of maturity dates or rollover of the loan into a new loan. Renewals of
commercial loans below specified lending limitations may be approved by the
respective bank loan officer.
The effects of adopting FAS No. 114, "Accounting by Creditors for Impairment
of a Loan" are not determinable at this time. The Corporation will adopt FAS No.
114 on or before the required implementation date of periods beginning after
December 15, 1994.
DEPOSITS
- - --------------------------------------------------------------------------------
Total deposits of WesBanco increased $16,220,000 to $854,391,000 as of
December 31, 1993, an increase of 1.9% over 1992. Deposits increased $37,155,000
between 1992 and 1991. Deposit growth continues to be at a modest level due to
the general economic conditions, competition from nonbank products and continued
lower interest rates paid on deposits. Average rates paid on interest bearing
deposits decreased to 4.0% during 1993 as compared to 4.9% and 6.2% during 1992
and 1991, respectively.
Savings deposits, which increased $21,118,000 in 1993 and $49,562,000 in 1992,
were the majority of the deposit growth. Deposit balances were shifted from
certificates of deposit to savings and interest bearing demand accounts. Due to
the lower deposit rates being offered, customers have opted to invest in
accounts without maturities to maintain short term liquidity. Interest bearing
demand deposits increased $9,280,000 in 1993 and $27,951,000 in 1992.
Certificates of deposit decreased $21,548,000 during 1993 after decreasing
$43,367,000 in 1992. Lower interest rates in 1993 caused the continued outflow
of certificate balances into other deposit products.
The interest expense on deposits decreased $6,514,000 or 17.8% during 1993 as
compared to $7,403,000 or 16.8% during 1992. The decrease in the average rates
paid on deposits along with the shift in balances to lower yielding deposit
accounts has continued to cause a reduction in interest expense.
33
34
SHORT-TERM BORROWINGS
- - --------------------------------------------------------------------------------
Securities sold under agreement to repurchase have maturities which range
between one day and one year. The following table presents short-term
liabilities for the years ended December 31: (dollars in thousands)
1993 1992 1991
- - ----------------------------------------------------------------------------------------------
Securities sold under agreement to repurchase:
Outstanding at year end $38,124 $30,365 $36,797
Average daily outstanding 38,003 30,278 33,077
Maximum outstanding at any month end 49,597 33,263 39,439
Average interest rate:
During year 3.16% 3.85% 5.71%
At year end 3.03% 3.59% 4.64%
- - ----------------------------------------------------------------------------------------------
NON-INTEREST INCOME
- - --------------------------------------------------------------------------------
Trust fee income, which is the largest component of non-interest income, was
$3,870,000 for 1993, an increase of $217,000 over 1992. Trust fee income
increased $126,000 between 1992 and 1991. This steady increase in trust fees can
be attributed to the increased number of accounts under administration. The
market value of assets held by the Trust Department at December 31, 1993
approximates $1,094,808,000, a decline of approximately $41,000,000 from
year-end 1992. The decline in market value was partially due to the non-renewal
of advisor services for one significant trust customer during the second quarter
of 1993. This account represented assets of approximately $123,796,000 and
generated approximately $136,000 of annual fee income. The number of accounts
managed increased by 223 after an increase of 187 accounts in 1992 and 270
accounts in 1991. The market value of the new trust accounts obtained during
1993 approximated $50,000,000 as compared to $54,000,000 in 1992 and $42,000,000
in 1991.
Service charges and other income was $3,709,000 for 1993, an increase of
$287,000 over 1992. Service charges and other income increased $254,000 between
1992 and 1991. The increase during 1993 was due to the growth in the number of
deposit accounts and the increases in the fees associated with deposit accounts.
NON-INTEREST EXPENSE
- - --------------------------------------------------------------------------------
The largest increase in non-interest expenses continued to be personnel
related. Salaries, wages and employee benefits increased $650,000 or 4.5% in
1993 as compared to an increase of $673,000 or 4.8% in 1992. Employee salary and
fringe benefit expenses increased during 1993 and 1992 due to normal salary
adjustments and the increase in overall staffing levels. Full time equivalent
employees increased to 578 at December 31, 1993 from 568 and 546 at December
1992 and 1991, respectively. Staffing levels were increased at more recently
acquired affiliate banks to improve customer service. Personnel changes will
continue to take place as the Corporation further focuses on operational
efficiencies and at the lead bank to maintain compliance with new regulations
which have been promulgated.
Occupancy and equipment expense increased $169,000 to $3,156,000 during 1993
as compared to an increase of $94,000 during 1992. Occupancy and equipment
expense was $2,987,000 and $2,893,000 during 1992 and 1991, respectively. The
increase in these expenses resulted from ongoing improvements at the banking
facilities and the cost of upgrading operating systems, data processing hardware
and software. During 1993, WesBanco increased the number of automated teller
machines throughout its market area and changed the name from OWL machines to
MAC machines.
Other operating expenses increased $277,000 or 2.7% to $10,379,000 in 1993 and
$102,000 or 1.0% in 1992. Of the increase during 1993, $200,000 or 72% of the
increase was due to marketing expenses. The increase in marketing expenses can
be attributed to the cost of the name change campaign during 1993 at our two
most recently acquired affiliates and also the increase in image and product
advertising throughout the Corporation. The name change campaign completed the
process of changing all the affiliate bank names except for the 1994 acquisition
to have the common name of WesBanco.
34
35
INCOME TAXES
- - --------------------------------------------------------------------------------
During 1993, Congress enacted the Omnibus Budget Reconciliation Act of 1993
which included increasing certain corporate income tax rates retroactive to
January 1, 1993. The effect of the rate change on the Corporation was not
significant. The change in the Corporate tax rate was increased to 35% from 34%
for Corporations with income over $15,000,000.
The Corporation adopted Statement of Financial Accounting Standards (FAS) No.
109, "Accounting for Income Taxes" during 1993. See Footnote 16 on Income Taxes
for disclosures regarding FAS No. 109.
The provision for income taxes increased $263,000 to $4,946,000 during 1993
and increased $960,000 to $4,683,000 during 1992. The changes in tax expense are
affected primarily by increases in pretax earnings partially offset by the level
of nontaxable income. In 1993, nontaxable income increased after declines in
1992 and 1991.
The effective tax rate for the Corporation was 25% for 1993 as compared to 26%
and 25% for 1992 and 1991, respectively. The changes in the effective tax rate
are representative of the change in the level of nontaxable income and to a
lesser extent the changing state tax rates. The alternative minimum tax will
affect WesBanco only if a significant amount of nontaxable income exists when
compared to taxable income.
The State of West Virginia has a corporate net income tax based upon federal
taxable income, adjusted for certain items not subject to state taxation. The
state tax rate for 1993 was 9.0%. The current portion of state income tax
included in the provision for income taxes was $761,000 for 1993 as compared to
$782,000 and $660,000 for 1992 and 1991, respectively. The State of Ohio does
not have a corporate income tax, but rather, businesses are subject to an Ohio
corporate franchise tax which is included in other operating expenses.
CAPITAL ADEQUACY
- - --------------------------------------------------------------------------------
Adequate levels of capital are required to sustain growth and absorb losses.
The Corporation's primary capital to asset ratio was 12.8% as of December 31,
1993 and 12.3% as of December 31, 1992. The risk-based capital ratios are
calculated under current regulatory guidelines. As of December 31, 1993, the
Corporation had no goodwill or other intangible assets that affected the capital
to asset ratios. Tier 1 and Tier 2 capital to risk adjusted asset ratios as well
as the primary capital to asset ratios of the Corporation and at each of its
subsidiaries exceed the minimum regulatory levels. The Corporation's Tier 1 and
Total Capital to Risk Adjusted Assets, which exceed minimum regulatory levels of
4% and 8%, respectively, are as follows:
As of December 31,
-----------------
1993 1992
- - ---------------------------------------------
Tier 1 Capital to Risk
Adjusted Assets 20.0% 19.2%
Total Capital to Risk
Adjusted Assets 21.3% 20.5%
INTEREST RATE MANAGEMENT AND LIQUIDITY
- - --------------------------------------------------------------------------------
Interest rate management measures the sensitivity of net interest earnings to
changes in the level of interest rates. As interest rates change in the market,
rates earned on interest-earning assets and rates paid on interest-bearing
liabilities do not necessarily move concurrently. Differing rate sensitivities
may arise because fixed rate assets and liabilities may not have the same
maturities or because variable rate assets and liabilities differ in the timing
of rate changes.
35
36
The affiliate banks review their interest rate sensitivity on a periodic
basis. The analysis presented below divides interest bearing assets and
liabilities into maturity categories and measures the differences between
maturing assets and liabilities in each category. At December 31, 1993, the
Corporation was in a liability sensitive position as summarized in the table
below: (in thousands)
Under Three Six Nine Over
Three to Six to Nine Months to One
Months Months Months One Year Year Total
- - --------------------------------------------------------------------------------------------------------
ASSETS
Due from banks-interest bearing $ 100 $ 197 $ 297
Loans $ 159,745 $ 38,205 $ 42,752 27,570 296,905 565,177
Investment securities(1) 16,634 18,392 15,564 29,151 324,037 403,778
Federal funds sold 14,751 -- -- -- -- 14,751
- - --------------------------------------------------------------------------------------------------------
Total selected assets 191,130 56,597 58,316 56,821 621,139 984,003
- - --------------------------------------------------------------------------------------------------------
LIABILITIES
Savings and NOW accounts 369,731 -- -- -- -- 369,731
All other interest bearing
deposits 167,637 70,480 26,323 25,622 104,108 394,170
Short-term and other borrowings 41,228 390 -- 800 5,747 48,165
- - --------------------------------------------------------------------------------------------------------
Total selected liabilities 578,596 70,870 26,323 26,422 109,855 812,066
- - --------------------------------------------------------------------------------------------------------
Differences $(387,466) $ (14,273) $ 31,993 $ 30,399 $511,284 $171,937
- - --------------------------------------------------------------------------------------------------------
Cumulative differences $(387,466) $(401,739) $(369,746) $(339,347) $171,937
- - --------------------------------------------------------------------------------------------------------
(1) Securities are categorized by expected maturity.
The Asset/Liability Committee believes the Corporation's interest sensitivity
position allows for a changing interest rate environment. During the next twelve
months, the Corporation's net interest sensitivity position is $(387,466,000),
$(14,273,000), $31,993,000 and $30,399,000 during the periods under three
months, three to six months, six to nine months and nine months to one year,
respectively.
Traditional savings and NOW deposits, which formerly had fixed interest rates
are now subject to change at management's discretion. Rates on these types of
deposits decreased to 3.0% during 1993 from 3.5% during 1992. Classifications of
these types of accounts as interest rate sensitive have caused the Corporation
to be liability sensitive in the under three month time period.
The Corporation's short-term interest sensitivity position would suggest
exposure of the net interest margin to changing interest rates. An increase in
interest rates may have an adverse effect on the net interest margin while a
decline in interest rates may have the opposite effect. The Corporation is in a
position to extend asset maturities, primarily through Federal Funds and
investment maturities. If interest rates rise, the net interest margin may
decline, however, the decline could be mitigated by reinvesting maturing
investments with short-term assets. In addition, management may emphasize
longer-term deposits by holding the rates paid on savings and NOW accounts at a
fixed level and increasing rates on term certificates of deposit.
The Corporation manages its liquidity position to ensure that sufficient funds
are available to meet customer needs for borrowing and deposit withdrawals. The
Corporation's primary source of liquidity is its strong core deposit base. The
growth in deposits is somewhat dependent upon interest rates of competitive
financial instruments. Deposit growth was limited to demand and savings deposits
which increased in the aggregate $37,768,000 during 1993. Short-term liquidity
is maintained through the use of Federal Funds Sold, which represent one day
investments, and cash balances. As of December 31, 1993, Federal Funds Sold and
cash balances were $46,989,000 or 4.5% of total assets as compared to
$41,809,000 or 4.1% of total assets as of December 31, 1992. Additional short-
term liquidity is maintained through the investments with maturities of less
than one year. Investments with maturities of less than one year approximate
$57,911,000 or 5.6% of total assets. During 1993 investment maturities and calls
of $107,291,000, along with deposit growth of $16,220,000 became available for
reinvestment.
As of December 31, 1993 the Corporation had outstanding commitments to extend
credit in the ordinary course of business approximating $39,069,000. On a
historical basis only a small portion of these commitments result in expended
funds.
Management is not aware of any trend or event which is reasonably likely to
occur that would result in a material increase or decrease in the Corporation's
liquidity. There are no significant commitments to purchase fixed assets during
1994.
36
37
ACQUISITIONS
- - --------------------------------------------------------------------------------
During February 1994, the Corporation acquired all of the outstanding stock of
First Fidelity Bancorp, Inc.(Fidelity). The acquisition was accounted for as a
pooling-of-interests which requires all amounts included in the proforma
financial statements be restated as if the acquisition had occurred on the first
day of each year presented. Fidelity had net income of $3,178,000 for the year
ended December 31, 1993 as compared to $3,547,000 and $3,165,000 for the years
ended December 31, 1992 and 1991, respectively. On a proforma basis the
acquisition of First Fidelity Bancorp, Inc. caused dilution in earnings per
share of $.19, $.06, and $.06 for the years ended December 31, 1993, 1992, and
1991, respectively. Book value was diluted by $.87, $.73, and $.37 for 1993,
1992, and 1991, respectively. The dilution is less than 5% of the preacquisition
book value. Improved future earnings of the acquired institution are expected to
recapture the dilution in both the book value per share and earnings per share.
MARKET OF COMMON STOCK AND RELATED SHAREHOLDER MATTERS
- - --------------------------------------------------------------------------------
Since May 1987, WesBanco's common stock has been quoted on the National
Association of Security Dealers Automated Quotations (NASDAQ) system, with a
trading symbol of WSBC. As reported by NASDAQ, the price information reflects
high and low sales prices.
The following represents reported high and low trading prices and dividends
declared during the respective quarter, adjusted for the two-for-one stock split
which occurred April 1993.
Dividend
High Low Declared
- - ------------------------------------------------
1993
4th quarter $32.00 $27.75 $.20
3rd quarter 34.25 29.75 .20
2nd quarter 30.00 25.50 .19
1st quarter 26.25 22.13 .19
1992
4th quarter $23.00 $21.25 $.18
3rd quarter 22.50 20.63 .18
2nd quarter 20.75 17.50 .18
1st quarter 18.38 15.75 .18
During December 1993, the Board of Directors of the Corporation authorized an
increased first quarter 1994 dividend to $.21 per share, increasing the
annualized dividend to $.84 per share.
The approximate number of holders of WesBanco's $2.0833 par value common stock
as of March 4, 1994 was 4,049, which includes the shareholders of WesBanco's
most recent acquisition, First Fidelity Bancorp, Inc.
37
38
SIGNATURES
Pursuant to the Requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized, on March 29, 1994.
WESBANCO, INC.
/s/ Edward M. George
By:___________________________________
Edward M. George
President and Chief Executive Officer
/s/ Paul M. Limbert
By:___________________________________
Paul M. Limbert
Executive Vice President and Chief
Financial Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities indicated, on March 29, 1994.
/s/ James C. Gardill
By:___________________________________
James C. Gardill
Chairman of the Board
The Directors of WesBanco (listed below) executed a power of attorney
appointing James C. Gardill their attorney-in-fact, empowering him to sign this
report on their behalf.
James E. Altmeyer
Gilbert S. Bachmann
Charles J. Bradfield
Ray A. Byrd
H. Thomas Corrie
Christopher V. Criss
Stephen F. Decker
Roland L. Hobbs /s/ James C. Gardill
Walter W. Knauss, Jr. By:___________________________________
Robert H. Martin James C. Gardill
John J. Paull Attorney-in-fact
Carter W. Strauss
Thomas L. Thomas, M.D.
James L. Wareham
John A. Welty
William E. Witschey
38
39
WESBANCO, INC. OFFICERS AND DIRECTORS
- - --------------------------------------------------------------------------------
OFFICERS
James C. Gardill
Chairman of the Board
Robert H. Martin
Vice Chairman
Edward M. George
President & Chief Executive Officer
Paul M. Limbert
Executive Vice President & Chief
Financial Officer
Dennis P. Yaeger
Executive Vice President & Chief
Operating Officer
Patrick L. Schulte
Executive Vice President-
Central Region
John W. Moore, Jr.
Senior Vice President-Human
Resources
Jerome B. Schmitt
Senior Vice President-Investments
Larry L. Dawson
Vice President
Jerry A. Halverson
Vice President
Albert A. Pietz, Jr.
Vice President & Compliance Officer
Edward G. Sloane
Vice President-Data Processing
Gregory W. Adkins
Auditor
Shirley A. Bucan
Secretary
Thomas B. McGaughy
Assistant Secretary
Ronald P. Higgins
Loan Review Officer
Gregory Shirak
Loan Review Officer
DIRECTORS
Frank K. Abruzzino
President & Chief Executive Officer
FirstBank Shinnston
James E. Altmeyer
President
Altmeyer Funeral Homes, Inc.
Earl C. Atkins
President
City Neon, Inc.
Gilbert S. Bachmann*
Partner, Bachmann, Hess, Bachmann
& Garden, Attorneys-at-Law
Michael M. Boich
Mining Industry
Charles J. Bradfield*
President & Chief Executive Officer
WesBanco Barnesville
Ray A. Byrd
Partner, Schrader, Recht, Byrd,
Byrum & Companion
Attorneys-at-Law
H. Thomas Corrie
President
Atlantic Development Corp., Inc.
Christopher V. Criss*
President & Chief Executive Officer
Atlas Towing Company
Stephen F. Decker*
President & Chief Executive Officer
WesBanco Kingwood
James D. Entress, D.M.D.
Oral and Maxillo-Facial Surgeon
James C. Gardill*
Chairman of the Board
WesBanco, Inc.
Partner, Phillips, Gardill, Kaiser,
Boos & Altmeyer, Attorneys-at-Law
Edward M. George*
President & Chief Executive Officer
WesBanco, Inc.
Roland L. Hobbs*
Former Chairman of the Board
John W. Kepner
Mortician, President
Kepner Funeral Homes
John D. Kirk
Retired, Former Owner
Kirk's Furniture
Walter Knauss, Jr.
Former Vice President & Secretary
WesBanco, Inc.
Robert H. Martin*
Vice Chairman
WesBanco, Inc.
President
Eastland Enterprises, Inc.
Eric Nelson
President, Nelson Enterprises
John J. Paull
Chairman and Treasurer
Eagle Manufacturing Company
Patrick L. Schulte*
Executive Vice President-Central Region
WesBanco, Inc.
President & Chief Executive Officer
First National Bank in Fairmont
Melvin C. Snyder, Jr.
Partner, Snyder & Snyder,
Attorneys-at-Law
Carter W. Strauss*
President, Strauss Industries, Inc.
Thomas L. Thomas, M.D.*
Physician
James L. Wareham
Chairman of the Board,
President & Chief Executive Officer
Wheeling-Pittsburgh Steel Corporation
John A. Welty
Secretary/Treasurer
Welty Buick Pontiac GMC
Truck Company, Inc.
William E. Witschey*
President,
Witschey's Market, Inc.
DIRECTORS EMERITI
W.W. Holloway, Jr.
Retired
Harry J. Robbin
Chairman of the Executive
Committee
Stone & Thomas
John R. Williams
Retired
Edouard S. Ziegler
Director
Financial Investment Companies
*Member Executive Committee
39
40
AFFILIATE DIRECTORS
- - --------------------------------------------------------------------------------
WESBANCO WHEELING
James E. Altmeyer
Gilbert S. Bachmann
Ray A. Byrd
H. Thomas Corrie
D. Duane Cummins
James C. Gardill
Edward M. George
Thomas M. Hazlett
Roland L. Hobbs
John M. Karras
John W. Kepner
Walter W. Knauss, Jr.
Paul M. Limbert
H. Mendel Spears
Carter W. Strauss
Thomas L. Thomas
John A. Welty
Gary E. West
William E. Witschey
John C. Wright
WESBANCO NEW MARTINSVILLE-
SISTERSVILLE (ADVISORY
BOARD)
J. Wells Eakin
Robert Eakin
John P. Eckels
R. O'Neal Hanlin
John J. Mensore
James B. Phillips
F.M. Dean Rohrig
Richard Swartling
Robert D. Wable
Edwin C. Weigle
William E. Witschey
John C. Wright
WESBANCO WELLSBURG
Charles D. Bell
Charles W. Bell
Frank L. Bush
Robert A. Jack
John J. Paull
Stephen B. Paull
Hazlett M. Rodgers
Elmer H. Vincent
John E. Wright, III
WESBANCO ELIZABETH
Noble G. Busch
Joseph T. Cain
Charles E. McCarty
James H. Roberts
Larry A. Roberts
G. Warren Sullivan
Larry W. Sullivan
WESBANCO SOUTH HILLS
Thomas A. Bradford
Jason K. Conley
Thomas F. Cox, Jr.
Larry L. Dawson
Thomas L. Jones
John L. McClaugherty
Eric Nelson
Richard A. Rubin
A. Stephen Thomas
WESBANCO SISSONVILLE
David L. Atkinson
Gregory C. Briscoe
Larry L. Dawson
William Hamady
C. Alan Otey
Allen D. Thompson
Bernard W. Whittington
WESBANCO ELM GROVE
James E. Altmeyer
Gregg R. Boury
Vincent A. Griffith
Gordon B. Guenther
Donald K. Jebbia
E. Lee Jones, Jr.
Philip C. Kirby
Charles C. Milton
Arthur M. Recht
C. Jack Savage
F. Lee Strasser, Jr.
Thomas L. Thomas
Gary E. West
WESBANCO PARKERSBURG
Christopher V. Criss
John S. Criss
Patrick M. Criss
Jerry A. Halverson
Jack B. Kincaid
Edward M. Nelson, III
Robert E. Newberry
R. Bruce White
WESBANCO KINGWOOD
William G. Boyle
Stephen F. Decker
E. D. Grande
Melvin C. Snyder, Jr.
Franklin C. Street
James F. Wright
WESBANCO BARNESVILLE
Charles J. Bradfield
William E. Chaney
Homer Cheffy
John H. Cheffy
William R. Finnical
John D. Kirk
Dennis P. Yaeger
FIRST NATIONAL BANK IN
FAIRMONT
J. David Carlot
Joseph F. Ford, III
Frank R. Kerekes
C. David Laughlin
Robert H. Martin
Patrick L. Schulte
Ronald L. Walls
CENTRAL NATIONAL BANK
Earl C. Atkins
Carl H. Cather, Jr.
N. Carl Hardin
Richard C. Hardin
George A. Markusic
Robert H. Martin
Patrick L. Schulte
Bernard W. Simons
BRIDGEPORT BANK
Clair Chenoweth
William R. Creighton
Robert D. Hess
Robert H. Martin
Robert E. Moran
Dean C. Ramsey
Patrick L. Schulte
FIRSTBANK SHINNSTON
Frank K. Abruzzino
Jackson L. Anderson
Edward P. Brennan
John E. Brennan
John F. Brennan
David J. Harmer
Dr. M. V. Kalaycioglu
Robert H. Martin
Patrick L. Schulte
40
41
WESBANCO, INC. BANKING SUBSIDIARIES
- - --------------------------------------------------------------------------------
WESBANCO WHEELING
Paul M. Limbert
President and CEO
1 Bank Plaza
Wheeling, WV 26003
(304) 234-9000
WESBANCO SISSONVILLE
C. Alan Otey
President & CEO
6409 Sissonville Drive
Sissonville, WV 25320
(304) 984-0011
WESBANCO ELIZABETH
Larry W. Sullivan
President & CEO
Court Street
Elizabeth, WV 26143
(304) 275-4268
WESBANCO WELLSBURG
Charles W. Bell
President and CEO
800 Charles Street
Wellsburg, WV 26070
(304) 737-2925
WESBANCO SOUTH HILLS
Larry L. Dawson
President and CEO
852 Oakwood Road
Charleston, WV 25329
(304) 345-0670
WESBANCO ELM GROVE
Donald K. Jebbia
President and CEO
2207 National Road
Wheeling, WV 26003
(304) 242-4000
WESBANCO PARKERSBURG
Jerry A. Halverson
President and CEO
Gihon Village Shopping Center
Parkersburg, WV 26101
(304) 485-7331
WESBANCO KINGWOOD
Stephen F. Decker
President and CEO
106 West Main Street
Kingwood, WV 26537
(304) 329-0585
WESBANCO BARNESVILLE
Charles J. Bradfield
President and CEO
101 E. Main Street
Barnesville, OH 43713
(614) 425-1927
FIRST NATIONAL BANK IN
FAIRMONT
Patrick L. Schulte
President and CEO
301 Adams Street
Fairmont, WV 26554
(304) 363-1300
FIRSTBANK SHINNSTON
Frank K. Abruzzino
President and CEO
329 Pike Street
Shinnston, WV 26431
(304) 592-3000
BRIDGEPORT BANK
Robert E. Moran
President and CEO
139 West Main Street
Bridgeport, WV 26330
(304) 842-5486
CENTRAL NATIONAL BANK
Richard C. Hardin
President and CEO
Hartman Run Road & Route 7
Morgantown, WV 26503
(304) 292-3332
The Banks of WESBANCO
COMMUNITIES SERVED
- - --------------------------------------------------------------------------------
WEST VIRGINIA
Wheeling
Follansbee
Hooverson Heights
Wellsburg
Centre Wheeling
Woodsdale
Elm Grove
New Martinsville
Steelton
Pine Grove
Sistersville
Parkersburg
Mineral Wells
Elizabeth
Sissonville
South Hills
Kingwood
Masontown
Bruceton Mills
Morgantown
Westover
Bridgeport
Shinnston
Nutter Fort
Fairmont
OHIO
Barnesville
Beallsville
Bethesda
Woodsfield
41
42
STOCKHOLDER INFORMATION
- - --------------------------------------------------------------------------------
STOCK TRADING
Over-the-counter NASDAQ
National Market Systems (NMS)
STOCK REGISTRAR AND
TRANSFER AGENT
WesBanco Wheeling
1 Bank Plaza
Wheeling, WV 26003
CORPORATE
HEADQUARTERS
1 Bank Plaza
Wheeling, WV 26003
ANNUAL MEETING
The Annual Meeting of Shareholders will be held Wednesday, April 20, 1994 at
4:00 p.m. at Wilson Lodge, Oglebay Park, Wheeling, WV.
WesBanco, Inc. is an Equal Opportunity Employer.
AUTOMATIC DIVIDEND
REINVESTMENT PLAN
Shareholders may elect to reinvest their dividends in additional shares of
WesBanco, Inc. common stock through the corporation's Dividend Reinvestment
Plan. Shareholders also may invest optional cash payments of up to $5,000 per
quarter in our common stock at market price. To arrange automatic purchase of
shares with quarterly dividend proceeds, please contact Mrs. Rhonda Revels,
Assistant Trust Officer, 1 Bank Plaza,
Wheeling, WV 26003, telephone (304) 234-9411.
DIRECT DEPOSIT
If you have a deposit relationship at any WesBanco Bank, cash dividends
can be deposited directly to your bank account. Dividends will be deposited on
the date the dividend is payable, and you will receive a confirmation of payment
when the dividend is deposited to your account.
NOTICE OF FORM 10-K
Upon written request of any shareholder of record on December 31, 1993, the
Corporation will provide, without charge, additional copies of the 1993
Shareholder's Annual Report on Form 10-K, as required to be filed with the
Securities and Exchange Commission. To obtain a copy of Form 10-K, contact
Shirley A. Bucan, Secretary, WesBanco, Inc., 1 Bank Plaza, Wheeling, WV 26003.
42