WSBC - Earnings call transcript Q4 2017

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good morning, and welcome to the WesBanco Fourth Quarter 2017 Earnings Conference Call. All participants will be in listen-only mode. [Operator Instructions] After today's presentation, there will be an opportunity to ask questions. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to John Iannone, Vice President, Investor Relations. ahead. go Please

John Iannone

Good quarter Kerry. welcome WesBanco to Thank full-year morning, XXXX fourth and earnings Inc.'s you, and conference call.

XXXX of Officer; Young, and was are Todd Our highlights and website, www.wesbanco.com. is Bob quarter earnings President call contains our Financial which Chief fourth today the consolidated available and on reconciliations President yesterday and non-GAAP Executive issued measures Clossin, Vice Leading financial Officer. afternoon and release, financial Chief Executive

archive begin will call a we of remarks, An our one-year. this be session. for opening on available Following will question-and-answer website

involve statements, SEC Item such actual are Commission, duty Todd? Part Such are important statements. statements X, Form that Form on XXXX, WesBanco which this any filed the not contained conjunction cautioned in ended strategies, XA. Securities differ those the under for websites. XX-K Safe does assume the Private Forms forward-looking in resources to to year XXXX XX, well this quarters XX, results be subsequently cause Securities not as Risk in with those Harbor and materially SEC statements forward-looking in in are statements. report uncertainties, expectations, and the contemplated as Investors that of WesBanco XX, information the with by Factors could of subject Litigation to and recent are update Forward-looking for report ended relating historical are from and WesBanco should Reform with to plans, and annual factors by December read report adequacy the September the including and provisions available XX-Q objectives, Act on fact detailed Exchange risks WesBanco's made of June most March which to pursuant XX, The WesBanco's WesBanco's XX-K filed intentions XXXX. documents

Todd Clossin

upon call today's of everyone. today be Key takeaways call, John. we fourth the quarter growth reviewing from for you, and XXXX plans. successful WesBanco long-term was XXXX. for another results On we the operation Good year will our are executed morning, - Thank our as

credit expense remain continued We and of in shareholders. success focused have our our strength profitability and demonstrated management, Company measures, on we quality, long-term and

we of reported surpassing assets in XXXX average for for successful These year tangible the for mentioned, record year XX.XX%. I of tax and were return had generated earnings after ratios we the fully X.XX% for $XXX merger share. as on $X.XX XXXX As profitability solid on deferred diluted million asset revaluation equity return average record earnings costs another with and adjusting

are And ratios of fourth on tangible when the ended three strong earnings probability quarter the was return an XXXX. XX, income tax months we assets of of net share December fourth $X.XX equity from on quarter excluding $XX when increase XX.XX% we For per cost, revaluation with XX.X% the the million of the same deferred of and average average in of excluding of and items. merger return assets of impacts generated fully which diluted on X.XX%

strong financial a for for continue As positioned be our to institution well maintaining remain future. committed shareholders we various our demonstrate, to metrics and the

bank addition above III In well capitalized the are applicable our profitability capital regulatory Basel consolidated promulgated ratios standards, standards. our and capital bank to level strong by well and ratios, regulators the

here as management. our and of strength demonstrate across We credit measures credit to legacy our to risk strong quality continue as well

first Sentry agreement half record with we announced we First the XXXX. million. annual during reported Bancshares, strategy, merger I us of surpassed with As asset mentioned, to cross $XXX threshold allows $XX which stated our the as Consistent billion we earnings the

deposits markets legacy in core in shale to funding markets. advantage positions from benefit strong and maintained market from related across our have have our major energy We metropolitan our continue legacy

the $X on under is billion business for in first crossing for management time. Our assets wealth the quest management

We banks eighth inception America's since financial the focus, including number a our earlier share performance, increasing “Best for Rating the named named by book We designations be and of XXXX-XXXX from announced last magazine's one and community by the remain for list at the the to recently Every dividend nationally of the XXXX X.X% to leading in recognized best our West magazine were multiple recognized XX% one list as shareholders year our and XXXX, our Virginia. since year earned we annualized we in in by including of our Reinvestment strength, Bank XX. few continued to we And receiving Community were institutions Money states, to since making list we the Outstanding State” the of XXXX We states consecutive committed returning XXXX. the demonstrated increase the increased Kentucky tangible dividend value XX% for per sixth FDIC, value as by $XX.XX. Act were

few growth last that plans We over have are upon and our the operational implemented we well-defined executing years. well long-term

asset threshold, us these growth and We've strategies. balance on loan meshed our for with lower for net long-term Our yielding Growing securities, percentage and growth WesBanco sheet as emphasis standards, perfectly lending, maintaining of time time, retail the over crossing opportunities revenues high The as provided loan plans. finding which to providing franchise and appropriate equity strategies remix positive billion $XX prepare portfolio our our encouraged combination an services, position sufficient on in with while increasing threshold Sentry while such we generating strategy enhancing successful reducing focused Bancshares. key franchise of First our while credit income fee total remains and high enhancing home a five operating been quality expansion. banking leverage, C&I as

bridges management First opportunity for in Virginia, gap merger commercial Sentry of Huntington, quality bank we see providing While make Ohio. wealth capabilities and it will existing and to market. to West well continues high corridor as our West and schedule remain our between The continue part progress Charleston, Southeast this market on we opportunities the organization, the our to our solidify in position Virginia a Charleston,

Over portfolios. Total for growth the the a good strategy of to related consumer few our our lift more the sell bolstered we these nice to on continued traction stated mortgage which loan income. market will originations years, mortgage Kentucky quarter hour our We continue continued fee secondary see to franchise loan our impact origination team six Wheeling of by Southern of enhancing volumes, and Moreover, is year-over-year loan our providing in expanded target is to drive reflect acquisitions residential to a strategies and Indiana. of the additional next within residential headquarters. the

reduce profile through which declined represents risk year-over-year. targeted total portfolio, of consumer decision as it loans, reductions X% now approximately Our to XX% reflects our the

I mentioned. focus our Our to and home and continues strategic the commercial just be on positive offset growing lending portfolios equity than targeted reductions more loan

our fact, are and growth loan year-over-year national trends. In growth consistent relatively loan commercial total with

important impact to the quarter downs quarter. X.X%. four While commercial months estate repayments. period last rolling We growth single-digit realized the both to our we It's loans to equity continue in the performance simply fluctuations XX construction fourth annualizing over quarterly loans to loan view growth and mitigate in commercial portfolio multifamily mid over focus to pay during real sequential order total our home see from higher due the grew quarter in opposed as categories as

enacted loan reform declining as trends trends customers their customers Fed contemplate slight law recently remain national up lending last shown impact that make the the theory have believe during of throughout to XXXX. lending pace recent muted as investments. is trends rate to a year-over-year quarter. information potential the review new decisions tax increases the activity pickup XXXX compared The once in and We While pick of in digested, begin this capital regarding should as

We any we optimistic the portfolio. overall portfolios. to the Furthermore, credit issues we remain to have loan our on of diversify continue strengthen opportunities deterioration are concerns and concentration quality across our or continue not in markets as we seen and our no

deposit and supported We which have regional trends. positive diverse footprint, by our is balanced across distribution demographic loan

We related from have legacy to MSAs, West deposits market with in market our the benefit positions in maintained Columbus, energy-related our a strong share and legacy continued markets and markets. our major Louisville, core with shale Virginia, substantial Pittsburgh funding advantage in metropolitan across

loan We have ratio XX% growth. support average loan-to-deposit providing for ample an around

enhancing organization, in to and returns. order and to on leverage. As operating we value positive invest focused remained efficiencies produce become carefully expenses we managed a operating improve We larger shareholder

delivered we expenses. in discretionary expected overall the cost solid excluding management managed ratio merger-related The sequentially efficiency to the the diligently the as XXXX, well savings improvement demonstrated on drive During as by from both to costs was and YCB non-interest helping expense expenses, acquisition year-over-year XX.XX%. decreasing quarter fourth

revenue will expenses discretionary continue as producing hires our to We we control markets. make in

and products manage quality of our Finally, to model. right discretionary success WesBanco place we the as our in and across we business teams risk the strong the of success our on management, credit focused well legacy for positioned ability remains demonstrated have and of type expenses. long-term operating environment remain any franchise, in diversified

are results. and call wealth We Officer our Young, an for update now revenues. turn see to strengthening loan opportunities Chief our Bob? for the on quarter's portfolio I over our would Financial to like management Bob fourth expanded financial

Robert Young

mid growth costs control exhibit lower categories good strong to and as and Todd, Thanks expense continue we year-over-year. our single-digit morning. both We as as discretionary well loan quarter-over-quarter generated in focus strategic

enacted as million Federal net per asset million months XX, net of a $X.XX, reported million diluted XX earnings December in $XX.X ending share the tax reform of of tax $XX.X legislation, the $X.X and merger-related a result we For revaluation, expenses. recently XXXX, income reflecting and deferred

increased expenses, $XXX.X X.X% from diluted with million share $XX.X to these XX.X% million would Excluding income increasing net per to have $X.XX. earnings

equity when excluding assets year-to-date tangible mentioned. the on was on return addition, average XX.XX% return the was X.XX% In average items and

respectively year and period. diluted would increased $X.XX expenses, share For merger-related XX, to we in increased $XX.X $X.XX diluted income When have XX.X% the $XX.X XX.X% per million, and and and excluding share XXXX, earnings three asset of tax net million would net to revaluation the to compared have million months $X.XX. prior per as net $XX.X deferred of income ending reported December earnings

X.XX% quarter, fourth impact earnings assets period quarter's respectively. and equity on the restructuring stated, expenses exclude in fourth otherwise in will return merger-related asset results mentioned, XX.XX% remaining return the the tangible and average excluding my tax both For and the revaluation the Unless focus and periods. the comments net of and were current on items on deferred related average

September X, for financial results have reminder, Your merger Community XXXX. included date the been results of a WesBanco's former in financial As since Bankshares the

as reflect $X.X billion. X.X% turn assets sacrificing $X.X to continues sheet. prudently the to at Year-over-year credit without Total loans portfolios portfolio Let's billion to of our encourage XXXX growth total total loan December efforts year-over-year growth loan XX, to with standards. our balance to increasing remained manage

equity targeted home continue retail our from portfolios. growth in one reduction more originated, secondary As categories Mid a offset the we reductions held lending in our we profile as mortgage its consumer balance total and and loan increase causing reduce risk commercial percentage loans of both portfolio to targeted and of to equity executing in in home strategies sales our single-digit amount of a our of loans as X% and focused strategic C&I realized the loan loans the growth family in than the upon sheet. four mortgage loans market residential

estate, XXXX, during as compared increased market in year-over-year, residential originations secondary Regarding percentage approximately year-to-date X% increased to the XX% sold the during real to XXXX. mortgage while XX%

a in provides at total deposits total Lastly, and all When to provide the the offset of securities at near-term billion our growth growth. XX.X% as deposit the December portfolio deposit. sheet, of liquidity, deposits represent as total size flexibility total portfolio XXXX, manage XX.X% CDs, deposits continued to $X.X to the of continue support X% the excluding and Total year at of us size demand increased compared loan current year-end now XX, assets, of as deposits were the XX.X% certificates remains other reductions balance and similar XXXX, XX.X% ago. targeted to categories the

margin. to the Federal which But Now reflects throughout federal in percentage the increased Home the past the the loan due interest has to Net in of costs for income the targeted statement, public offset year Loan assets. by to demand the the a higher interest increase XXXX margin deposits, targeted the yield from was funding bearing for is on consistent net at flattening it net Federal includes funds well partially over and reflect income borrowings. due lending rates to strategies remained as Reserve income which continues increases fourth Board's a the higher The and $XX.X as year-over-year X.X% higher net a relatively the rate increase interest and of funds, balances, benefit margin similar average YCB to I The other bearing quarter the mentioned million which and interest primarily turning certain liabilities in previously. interest curve. Bank cost acquired

a quarter million from to XX mentioned the an with basis to anticipated prior acquisition related quarter, related an acquisition loan a $X.X consistent with level payoff the acquired quarter's third mark of accretion approximate reflected of points we during that And accretion YCB specific I last performance. As benefit loan assigned. return more

During benefited basis margin basis of XXXX. acquisitions the X per basis points as related second be and points to during X year-ago basis to basis the prior XX first fourth quarter, net accretion by quarters from points XXXX interest approximately compared X anticipate quarter between to quarter. We currently X acquisition points in during the and the points accretion

increase basis more combined bearing liabilities. with increases. were deposits our basis both deposit XX increase year-over-year X despite related bearing funding contain XX% total rate years, XXXX continued XX basis believe federal basis acquisition in advantage yields year-over-year offsetting point point which our is earning to points an improved deposits consistent points XX on costs, XX non-interest basis that helping with net deposit three for We bearing increased accretion interest in funds overall the as Lastly, XXXX during our funding margin up than points to of interest on only interest assets core

are Fed As rates as betas the do funds in basis expect continue XXXX two increase the rate as to currently to said, year. we increase we during modeling point XX deposit for increases

to fee now. turn Let's revenue

mortgage prior banking X.X% ended electronic million, year and non-interest quarter driven income fees. higher banking December from XXXX, primarily higher the by income For $XX.X to XX, the increased

residential million, electronic in banking As mentioned, $X.X market larger base. our higher originations resulted to reflect in increase mortgage average the and strategy million fees sell of I in mortgage percentage $X.X secondary customer income a a a higher to banking

our our XX the the management mortgage of customer these as grew of portfolio, have during of strategies residential months items secondary the our we of wealth market fee XXXX, income, business year-over-year. increasing income fee benefits organically addition, of In expanding nicely increasing seen sales all and

and leverage We Turning appropriate delivering costs positive as expenses. operating long-term to remain for growth. discretionary investments the on focused we make operating

and cost well expenses XXXX, strong fourth both expense achieved During operating control. the to continued categories year-over-year sequentially as decreased and YCB quarter were the discretionary controlled most total savings through as be post

Non-interest $X.X X.X% primarily from supplies, year in of decreased resulting $X.X period. to The million December compared of we decrease XXXX, XX.XX% the the and expenses well prior As expense year tax operating expense and lower and quarter control XX-month quarter, during across ratios expense XX, XX.XX% reported or amortization third XXXX. low-income fourth and three housing the XXXX prior to to travel entertainment, moving is due as respectively. X.X% or during versus efficiency million as cost quarter and other telecommunications, the

Kentucky in to in Indiana than and expenses incentive staff as benefit higher salaries and increase annual $X.X medical on adjustments as costs offset pension discretionary and compensation, focus impact of the average merit higher that million levels the year-over-year from accruals. the resulted Our well lower more and wages the markets,

the XXXX, other rate to income permanently was January XXXX. December the to tax existing Cuts turning and which Act signed On effective into from X, Jobs rate the XX, XX%, lowers Now maximum of the Tax among things tax corporate law XX% provision.

tax increased of effective be tax XX.XX%. income rate of date the impact million, rate our fourth the as As estimated to assets a tax an XX the $XX were $XX result of required December million reduction, the resulting causing of revalue by of of deferred taxes $XX.X their and with Consistent tax to liabilities companies effect to million our quarter this enactment. revaluation announcement income

and to the XX.XX% as fourth full-year been and quarter and our the revaluation, impact respectively XX.XX% have for effective of XXXX fourth and XXXX. would XX.XX% compared tax XX.XX% rate Excluding full-year for the the quarter

credit Some on quality risk strong our of quality to thoughts asset now legacy be credit overall, our and reflective management. and continues is of capital, and

into assets were points average a consistent allowance million a loans of direction XXXX an loans quality. of the X.XX% X.XX% overall loans of periods, $XX.X one of of with Net ago and But at of year might As basis December that as percentage portfolio total represented standout assets on XX, portfolio of XXXX. material losses period. mention points given represent as or non-performing to portfolio quarter-to-quarter lows, total in our compared XXXX compared basis several the do lows for XXXX, It change in historic as compares XX December for such credit basis The and measures certain total and to of non-performing trends. reason percentage of loan X.XX% they have last historic important over is both from annualized to XX not in loans percentage the another. charge-offs been XX, X.XX% a the credit changes a quality at remain our as near

Lastly, XX our deferred negatively revaluation one-time tax fourth to reported were strong, points improvement both basis for ratios points been impact have this quarter all slightly charge, would If the year-over-year. showing capital basis adjusted XX and ratios, figures. than sequentially while by higher the

lower higher result immune at asset despite basis margins as and accounting deposit purchase in increase. XXXX. We are factors. during call points betas anticipate our basis the XX-year overall and at the would and general the a not like do our to remember It two the the yield your is not experienced few questions, some from much points opening for roughly September lower end, such curve that change XXXX. basis provide past anticipated I points flatten industry, XXX months treasury at our current to to in XXXX, thoughts XX important to end year spreads generally spread XX rates with Lower for continued as has for we year considering outlook Before over accretion on XX sensitivity compared around to margin

However, to quarter we and municipal X the basis during local of tax do portfolio. X equivalency tax the of expect related basis to points points state first securities lower the income decrease exempt

we XX% mentioned, the the of the with half XXXX anticipate savings with XX% Todd XXXX. and first cost in of and First half obtained during remainder approximately XXXX close Bancshares to the As merger last of phased during during Sentry expect about

to wealth continue strategic via grow organically We will stated growth our loan strengthen our strategies, portfolio execute focus and categories, our management. on

positioning growth. We will long-term the trends leverage, while for ensure to focus to continue company on operating expense positive

such We subject are to to assets, to XXXX, quarter income the future the on as maybe earlier, marketing and overall changes XX% in proposed earnings as consistent and between but quarter throughout usual late third to planning on and during second return At on our XX% equity, expect implemented spread during This mentioned negative tax effective this typical change early merit periods. evenly reform budgeted will in tax rate, return full-year equity strategies our operating that time, margin. positive slightly we interest metrics, during more year XXXX. increases have certain and the a during I occur key XXXX, as with a be anticipate expense and And tax impact level tangible be XXXX. taxable net on average our impact return on average common the

industry. result normal competed yields portion anticipate and over are of may such However, higher loan we than deposit away benefit as time currently that by tax our costs some in lower this benefits

the you now Operator, We would your take instructions. please questions. are to review ready

Operator

Sure.

Mealor come will begin Catherine Instructions] from KBW. go ahead. The question-and-answer question of Please session. will We the first now [Operator

Todd Clossin

Good morning, Catherine.

Catherine Mealor

morning. start the balance to first. with sheet Good I'm just going

as managed percentage $XX First to just securities as manage on have portfolio, assets, you the low of securities earning continued average portfolio you'll under billion. a down the

strategy be well? year, a crossing little tax and that you play we're your that remix, talk billion rate lower then for the bit now can about is to into what that as how $XX also next may So going strategy

Todd Clossin

of crossed to is sheet consistent I'll bank where talk about we continue aspect the would a as it. to around portfolio tax continue but relatively it the or so Yes. percentage $XX let represent with grows Bob the XX% balance stay the just thought the, of today billion it, as of is as and that the

to make growth. be loan the The now we're $XX both portfolio plan would it lift to billion. to would us wouldn't for shrink that So the be and loan going thought be continue room growth securities pass

Robert Young

account tax caveat the wide in that we into And the to that we income - the strategies taking of have on we're income rate tax the I - range exempt Catherine is really with relative owned relative really relative life to a housing that bank XXXX. portion range side, to in my expect tax low portfolio it's And the discussion insurance. exempt associated tax could had about credits for some effective tax

worth these the tax time, of over less but indeed play Some XX% pretax income strategies they're as than days out statutory things of rates. will old

you the impact effective moves both on, tactics margin portfolio. rate and big tax knowing will which don't the So those total total not bond our that But million over year. portfolio bonds are our the or $X.X guidance as of portion is muni develop few right well the thus now down municipal the percentage might next is most the XX% in and fact, the how issues if for portfolio, early that any a the come held-to-maturity of months might of as in expect of as gradually calculation I the

Catherine Mealor

also Okay. it you how could Todd more we That's balance your Is improve little growth is said some function bit then sheet into $XX do year you're in that manage upside next loan - in of managing the or really just the much year? securities also not that billion. loan growth you. of growth a how see loan under about how of your as you it now thinking from a going helpful. about And Thank think and do remarks you this

Todd Clossin

in the loan that was down to was slow under securities all, billion, balance down glad to place portfolio plan so We to the commercial stay there always our the lenders. the never asked grow I'm you sent to but slow to to plan never that the a at message sheet question. $XX and Yes. side lenders the shrink

from of as we the Now of years raised as to do on last portfolio side the rates. ago. a the did raised more start indirect couple of couple ago perspective, management of we side we over qualities couple years well hotel And reduce risk on things credit a will the and underwriting multifamily auto, years a some a

some would obviously strategies my to to the to place we million. a the loans continue million in portfolio that in $XX part $XXX the portfolio that market. group, fluctuation being secondary going let quarter-to-quarter which the mentioned a strategic an to quarter had those happen. consumer commercial of little the number close to now the the of I to little and estate market, to That When very that We going below we important total with reduce I a run of real was We average So typically them secondary to bit in that bit think due that down, comments business. try quarter the in portfolio. in strong. X% commercial is we was but loans type was fourth look at XXXX, expect thing, And

million delta secondary of fourth just to in market. go that by a quarter it So the was to the just a loans happened couple $XX

was in the of quarter second year. production our production actually quarter So the fourth highest

traditional our going a amounts in would $XX of quarter the payoffs. point a to the a looks the secondary quarter added in production all into issue. The or really In one traditional not it's big it a for the So just quarter timing loan to year, have two more have been this was be percentage more around more normalized first a back fourth It full us. million can growth of fourth But quarter. market. quarter. have That quarter fluctuation,

for usual still which our going markets, we customer, continue focus be of longest to an tax us equity portfolio is year that So well the area. effects and much second too the ninth here, an continue going business that economic still that our you're recovery focus impact. it's want with product, here, as home recovery in going We business the business. just the in in big does emphasize in continue XXXX. portfolio, we'll to indirect of consumer be that in since not the good of the to think C&I at feel economic to to about to is as look And and pretty forward portfolio a we

those So businesses. us auto right now think consumer be I a But piling of into business don't important type or and to those to to are of going time But lot trying we're to it's we're and other those side multifamily grow on be the to doing in not on doing side that X% not to business like we're not the businesses the businesses. or some consumer XX% that we're indirect continue either.

So growth that's but little very bit, design. a that's impacting loan by much

Catherine Mealor

great. the color. Okay, Thank for you

Todd Clossin

Sure.

Operator

Nicholas of The question come Please ahead. from next go Austin Stephens. will

Todd Clossin

Good morning.

Austin Nicholas

move there shale would picked pretty there just color big the in XX% up higher, at morning. year-to-date, we've lag prices a you that, deposits guess any Hey, guys. ultimately there move Good coming related be and up it or they natural Maybe shale is prices the range. a helpful? guess I in just on any I know looking and related call just to in royalty Have seen reflected the seen deposit as payments, XX% flows. in gas I up

Todd Clossin

It has, But the now figure eight it's seven We up. amount into down range years now quarters. different we're into there eight picked low up month ago. We're the back we into and again. were a for mid-XXs the figure figure back every few dropped two and

more a back activity that the to regard as marketplace are well little in gas to that seeing and see we So nice with activities. to too related it's the and oil

Austin Nicholas

any, come kind I are that that anticipated there the that, or evidence I guess I in maybe on there then say. was activity around to a projects tangible secondary, that And guess around there rise economic going is maybe I that be of cracker any WesBanco Understood. Wheeling increased just is think maybe large the kind know should this development of there I or built given Is online. prices?

Todd Clossin

see has in indications I there's impact ago right some economy significant occurs in but cracker up well go plant, you you would a we're cracker put and starting well. facilities not billion with then to exactly storage to approved and our as footprint. a our parts the enhancements That's that's tell $XX another acquisition a sitting I will other years Beaver where that. now the plant little liquid three around cracker we're if be is bit of planned that - going think ancillary yet, been south, agreed positive gas Wheeling, natural with positively cracker things. benefits that. road. the remember plant There's to some a to continue And headquartered. from Yes. yet, underway back in And plant the lot If few obviously help that just was miles would move the that like County, down that ESB, states, China but shale significant of into to local going things things that probably to where forward that that's have the just

exposures lot We're talk in signs the the commodity we're again, front industry not before, we're not energy taking not lending to that So there that support a to but of on are products. growth, directly. of positive type - into

Austin Nicholas

color. Great. Thanks the for

Todd Clossin

Sure.

Austin Nicholas

how accretion one integrated? last to that more most you then recent the just and M&A capital your what's transaction for and within with can lower outlook give Maybe on is update maybe us your tax an capital, ones that augments rates planning,

Todd Clossin

equity sure to actually, answer capital. I in that first loan committees. part, right into your our question impact that then by loan way an try relationships has it we at look I'll Obviously larger and return on our on regard the with to make come loan tackle

obviously equity little have of changes. to be going return We some a at by the bit tax on impacted a That's calculation.

being that - to back. start perspective. on and on billion have you will are that's range about our return benefit of is taxes that impact farther away, to perspective I a areas state opportunities some talk strategies to get forward impact our the perspective. that But probably if on appropriate from might think within part to impact tax So that the M&A, But of of from accretive an in of changes changes stated from regard have north competed of happen sellers. that still we doesn't stay going see that try find It some approach with really to M&A. of will the of little some a our the earn strategy, those a tax and potential that hour don't $XX us of And six are we going with material our think continue

Austin Nicholas

Understood.

Robert Young

tax XX basis fact common ratios. one-time a impact points to The on And quickly. basis than less change would positive. capital that earn to scripted as tangible the very in But change comment back down. ratios itself XX just make income I from XXXX tax points about point XX But in basis end you XX there back charge lower had capital the my we a on was capital the year in tangible those year. basis XXXX earn in will during point impact on will in expense the common is talked DTA mentioned that charge remarks the a And equity, I moving the the equity

you're earn will a back our operating it ratios I And hinted quickly. that positive have well. going So to pretty at, that's as other obviously, as on impact why say Todd

Austin Nicholas

That's guys. Well thanks I Understood. all got.

Robert Young

Thanks. Sure.

Operator

Riley The Steve go Moss next from ahead. will question FBR. Please of come B.

Todd Clossin

Steve. Good morning,

Stephen Moss

Good morning.

I'm the deposit are and Just assuming you outlook, wondering what with for the regard stable to betas Bob outlook margin here? relatively

Robert Young

that's hinted that we by the has higher particular higher. demand haven't now to we of XX% that's in at over experiencing, realized bearing betas been we said larger not interest points over be we or at numbers occurs of category, dividing X from it's in increase December, costs, modeling and public as what And time, deposit that until we've any we some million. perspective disclosed expect that past you basis the a made XX months what which modeling time the there Steve bearing sort each such you in are of basis end ignore pile what around XX%. I suggesting you as recent basis increase, deposit or a catch basis think relative our basis And but higher its points percentage of X past to But can deposit to up by increase with middle right bonds than in forward. a X increase, comments that of our fair around of haven't one points for you up deposit Obviously in we're all are that Yes. is XX time, going have And basically interest XX%, said most they've other of customer on $XXX percentage I if number. what included betas, than the influenced of our the heavily some banks XX after is December points or dial the disclosed. point funds as after increases public

of in amount significant that that category. a there's So

Stephen Moss

then us gain quarter, details again, quarter production helpful. pretty some That's like for margin? on of it sale good the wondering you mortgage underlying And and give look this banking, for if

Todd Clossin

business the of business Yes. we're of see pretty turned can spot didn't things bright that a We other some the did it looking business a disclosure of leadership has that what that real this us new really hedging as you around like brought hedging at along obviously we couple some through revenue than generating couple and It's We're us years. the sales ago. that just a desk, the the lot from last off but area. terms for that for doing into over income which in years in significantly. investments different the Part We secondary, We've well. got now before. looks fee into advanced

the Your buttoned Lexington, now performing was really for and business New Louisville, have come which times And attract helps that Indiana, to but was pretty well we're much a of scalable marketplace as down the more for terms only talent the turn it it's have result the us ability much And And a in us efficiently, loan. business is tracking of before. than to a up Bank additional former So Southern ago. in and and be Elizabethtown, that more areas turn around us. of it's growth something business business, not it's Indiana all and is last seeing in the running on we is talent that The didn't lenders. market, KSI additional obviously Albany, the in that some get franchise. those couple there and business competitive years to a We're thing Community terms Kentucky, I probably and nice significantly mentioned

So positioned of think out a is we're this we pretty for lot it. business and future expecting the well

Stephen Moss

talent of hiring a increase should terms expect That's on in - just we thoughts XXXX in and production? helpful. terms of And what significant more of in kind your

Todd Clossin

Yes.

of many I think take and it's talent always on, loan bring ones, bringing and to cost bring low there's there's budget of in areas no originators are where will available them they you them because find - one - good How and limitation. variable that's them the the on we is paid. getting associated those you're - then really you or with mortgage and a cost going with business associated

opportunity loan that this few originators a of lot talking be originators, first the So individuals. as of we're in And they make but additive actively doors think and of open First business, would different down marketplace. with commission for would hire those a Sentry given that a as to that during year, loan bigger as obviously in the with are half that have us to mortgage another that we the markets there, business type mortgage on the come additional structure well

us in mortgage loan have Pittsburgh, had should year to on Cincinnati, mortgage So new now originators markets put than dependent well a in now a from operations expect loan in But the we're is a where some those because good of the now Columbus, but acquisitions in we loan lot today. that recent of robust number as markets we've I like base hard number of a it years. mortgage are for We're to the available to originators and markets, would expanding really and It's that it help. those markets upon talent. only have more we're

I think it and competitive did our are self business kind also incentive out is of plans we well as that too. a

bringing but have that producers, wouldn't in be a don't people home you want So to in the organization. produce

basis, net be on and to but So minus, you've plus a ought got it that increasing.

Stephen Moss

right, thank that. very All much. you I appreciate

Todd Clossin

Sure.

Operator

will from [Operator Gunther come of Russell go Instructions] Please Davidson. ahead. The question D.A. next

Todd Clossin

Good morning.

Russell Gunther

wanted guys. I morning, commentary. Good just to on margin your follow-up Bob,

quarter we something is basis in the… or I to But be an a think that negative for X nice about tight after should points communicating X for think range throughout that you're the that first basis with recouped year. expectation the point impact could the

Robert Young

your part comment, the of the latter. It's former not

it the suggesting basis third margin XX% So using that you'd it's and you're were an I'm investment exempt that is that is, earlier. value at because not that securities points January points higher instead more X quarter And it find still others exempt are of large if portfolio. of materials, have of a than there strategy impact to the that our X, of some basis is one Muni's as because materially reason probably portfolio XX% XX% just that tax little I but our look of matching back fourth X in bank for down think because XXX, on said to percentage does We portfolio. when of the portfolio. is we take going time, a over just of our bit kind than impact tax a to I the it's of the change for

If the that next was down day And you the to the of points now X thought range low we in you would I points X then it that don't to the basis back similar course on year. one. - basis expect back earn XXXs, basis to points basis X over points that that just X to mentioned by

Russell Gunther

answered. there, good color a couple items a of Bob. other left, most you. and But line quarter. ticky kind on the I Appreciate tacky Okay. other just asked Thank was were of that have the questions my income

includes you that this in just going give driver the forward? insurance on the think what was and I would color quarter what expect services, a little

Robert Young

fees. The why five look the quarters because swap of Yes, release give you as in the and we is that at in see reason statistics, can the last primary that our around bounces earnings bouncing if you you around.

than swap going quarter. you're number quarter, particular any material a have more in other in So in fees

a quarter, to the related quarter and of have fees. don't third we those. quarter, the had venture have increase, In swap the dissolved. in increase some the those have So we that third past, lot joint income most a fact fourth In fourth is the significant between anymore, been didn't of were and there we

the in think that influence prior talked that's item, mark but periods. deferred those how salaries. that that the line upon offset a is to could about in comp depending I we've market then and to And there's

a that's bit of hopefully little So color.

have You're for in is title expectations the right, the business. XXXX insurance good in some particularly, that do in We services there.

Russell Gunther

gears helpful. the then side. switching expense to just And Very Okay.

forward? talk employee but in kind throughout If you these the the this down little a expenses. ability are benefits or to we talked line about lower running to other of going year, there continue keep is trended managing about both, drift going to an nicely know earlier, bit I guys flattish result to them for similar you be

Todd Clossin

right. leverage, say, is positive I'd obviously focus our Yes. on operating

we expenses, from investments of part Company, DNA an approval. in of make And lot make review nobody with a it's going nothing we're to investments significant, expense but coming to well, particularly and as I tax our think size company So that a do without the to grow, reports investments to I continue few the some of don't some that's relief that. spend of time regard as important. the airplane in for you down the product expenses things those standpoint, looking as be to numbers, that. really on service got the want enhancements, customer to types can do. will But of we And on from a but lose more the it's tell that reports, things we dial well technology our mean do TV always gets on company. we We been we my

to obviously a expenses bigger be organization, with think as an part going base it, expense always will have an of I but that. as we we're So associated grow important

is We're last where half out though, little first of there we the in that last that much. saw we second we you for going of number return criteria marketing put An kind return? get of year. expense example kind to We're Looking every which half looking this of a best the of year bit the lower not year that expense averaged we raise dollar to which was are out. be Where have? pretty the would of be do $X getting high,

going spread than going out get the to that are to evenly that We that get marketing. I return, in it we spend. If be dollars marketing spend bigger and a return we're we'll I from future then we're on years, don't more more return for looking If more limited marketing. in

to return investments that left comment lot a lot a last get make in with to would on there $XX billion do that cross is going investments we're has the So size. we I not on that to of the it make. of to we significant are The do need

took strong, base we try efficiency And the over the for our have expenses added billion. we've rate want on. long-term behind to be blend into other make billion business us ready to attract on $XX expect discretionary basis materially of wanted couple run as upon will investments is we story years, customer focus, resulting retain years, in to from bad messaged us run because in think year to we in worth a but quarter while competitive out. and trying last to I getting order and but wouldn't to get dollars' to or going of the rate bad keep expenses have we but we base successful. and in down, and think cross few the couple cross $XX the out, customer I it be We last to our continue million business the keep it to the ratio be up take show a our a well were expenses added to other to the and didn't that we numbers And those based ready expenses expenses we've that to pretty

So those investments will continue.

Robert Young

line for would probably be more experience and the mine year, in are his items. evening. the couple the of offset Todd I line was than a higher up we Russell, bit true on And higher a that benefit we our the mentioned I so The see important believe commented to item, you and as focused And those you you as think salary line. little around and comments for last employee did tend mine on that there. incentives number fourth performance quarter, to

the XXXX. health our a up And benefits kind the quarter saw of have here truing were self-funded was did to associated quarters you some insurance it. back in that plans. quarter, that first level on couple the fourth in of accruals other with So items one-time employee of the a normalized They of for

the on new costs into evenly good due Although, pension ROE the the year. and continuing the We the spend, most those did other about XXXX. it in we benefited on lower savings relatively vendor have quarter, the we're a I year on mentioned performance our in year, categories talked already return that the then more I that expect assuming in the third care. incentive of but of fourth we one-time Marketing, plan throughout do think very of in for implemented That the health terms be getting saving that shred same costs should fourth here quarter some those XXXX that. payments, lower of spend, and in to strategies us instance, I total adequate things and continue some couple

first lines in Sentry of would the fourth the quarter. quarter the numbers taxes in in third the be that bit typically quarter those first year kick the We that you First would first a least like at to or payroll higher run quarter than higher, some So slightly half weather, would to other are be payroll for the more before given related the of little suggest some in of as higher. increased be rate, costs the expense would back instance and

Russell Gunther

it. Okay, Bob. I you, great. Thank appreciate

Operator

will Cardenas Raymond Please of The James. go next ahead. come Daniel question from

Todd Clossin

Hi Dan.

Daniel Cardenas

morning, Good guys.

Just one quick question here.

environment, your in are think mandible well and thinking company, behaved XXXX credit credit Given quality how a I credit beyond? pretty about metrics at expenses you

Todd Clossin

perform with going how is Lot of economy it to do to right. the has

recent changes hit. reduction got next the tax that reform recession or years the tax with before So hope another you couple changes just you

so similar would expect trends so. this had point. what last any the in So we would have that don't to to we concentrations at years similar be year year to material previous areas, or concerns my geographic we've this I expect in we comments about And or any mentioned

Daniel Cardenas

Okay, great. Thanks answered. All my other been have guys. questions

Operator

session. the Clossin And over would like remarks. to back this closing any conference to question-and-answer I concludes turn Todd our now for

Todd Clossin

you. Thank

our hopefully successfully executing as we strategies well-defined display discussion upon today. are We through our

organization. Our we environment. place any that long-term way. remain positioned hard that and operational for to work Company sure think stay growth to of try long-term well our success We plans We make success are in in on our of type and really the we we're focused

and us forward are and upcoming day. our shareholders. additional year customers the follow about to to we thank want We our excited and providing you look the just to Have opportunities for for good to value continuing our today And story. a all joining

Operator

presentation. today's attending for you Thank concluded. now has conference The

Have lines. now a You your day. great disconnect may

WesBanco (WSBC) 24 Jan 182017 Q4 Earnings call transcript