WSBC - Earnings call transcript Q1 2019

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

Operator

Good afternoon, and welcome to the WesBanco First Quarter 2019 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'd now like to turn the conference over to John Iannone, Vice President of Investor Relations. sir. ahead, go Please

John Iannone

Good earnings welcome conference Cole. first WesBanco, quarter XXXX call. afternoon you, to and Inc’s Thank

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

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

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

Todd Clossin

the XXXX. today's Good results morning be quarter are. the everyone. Key of you, first we’ll call our call, today from John. Thank On reviewing takeaways for

our profitability, funding We're net operating strong our diligently WesBanco's quality, for pleased excluding share. organization on focused a for $X.XX performance during strong our tangible and and deposit credit core quarter on positive respectively. by leverage. of XX% fundamentals, ensure employees a strong costs, supported per When core shareholders. customers to organization we shareholders, as ensuring equity merger as are generated you but of the to assets first quarter advantage strong underlying and earnings return including We remain with increased ratios work profitability These for average X.XX% and average the $XX million diluted or income XX.XX% XXXX,

bank the to capital the in well Basal maintain standards and regulators regulatory level capital bank are both by continue We standards. III capital applicable, ratios above strong ratios as consolidated well-capitalized regulatory promulgated

with operation XXth addition, achieved record capital growth to of XXXX per on cash earnings dividends our execution liquidity increase during and XXX%. and the well-defined combined the This February. increase during share In and was or to us nine long-term during increase $X.XX quarterly enabled our accumulative positions by last X.X% strategies representing strong $X.XX regulatory solid years,

Our success long-term ensure success we cycles. disciplined on upon as of plans, to operational cost growth and execution balanced and our depended both stability well-defined is remained and continued

on long-term sacrifice value focused and shareholder not profitable on growth. near-term sustainable We for are We'll long-term gains.

trend portfolio. the overall our I'm such, high-quality consistent, in strong very pleased a measures of quarterly with reflect they loan quality As as asset

XXXX going that fourth encouraged to to profile, period related repayments XXXX in the the the like growth the fluctuations quarter during begin portfolio quarterly yielding during XXXX. and to quarter moderate we the seasonality, sequentially importance we are the and our commercial estate will stress XXXX anticipated over also rolling to its real mentioned at end commercial we in to light will in going that in pipeline targeted the call. discuss were comments I'd have better we quarter the aggressive typically we we of our the payoffs to mitigate loan While from portfolio growth our loan into first experienced earnings particular, reductions order In risk-return made impact construction of than of that in consumer due our

During loans were portfolio fourth or across to positive the begun true these statements categories. anticipated the to the have as X.X% of quarter, when prove first up compared reflects flat result total annualized. loan when This quarter XXXX stabilization

industrial into as be a income The well growth loans. continued as the and across program to of of long-term. in mortgage be residential our deliver loan X% markets, and strong direct quarter-over-quarter, grow over to low total as commercial Our as mid production helped continues growth we pipeline that our we commercial the as in remained our to in overall remains the the to bright portfolio approximately strength to pipeline spot quarter up confident all ability loans well saw early single-digit fee our

building businesses. in WesBanco Finally, we director's Insurance mortgage responsible due world new lenders, about growth of Vice securities Directors Christopher as new today for including out possibility capabilities. directing Chairman in Jim where lending these opportunities online hired appropriate long-term C&I private and retirement the these the Chairman, fee-based additional loan and and recently Furthermore, continue and plus experience our opportunities to With including the banking, succeeded and businesses. year in who WesBanco of and to and Gardill insurance brokerage action Company current representative they excited make of investments get securities and planning fee Effective Securities our the Chris, the experience Managing we've of for will Director loan policy. real XX and success the of application bankers for hires, officers, Director near I'm Board

to General the on dedication remain entire service his and I'd family extend bank to of holding the Board WesBanco own to like the Directors Jim to success. company, where for Counsel appreciation the our will Jim his While

the that with community Jim institution based key its a years, banks to bank the emerging providing at regional West enabled For small and experienced from council has corporation an grow core. XX sound has financial Virginia into

relationship new his active role his the experience will and pleased my of with board as our to I'm the chairman. Chris successes management In on chairman accounting and business His addition, ensure participation diversified to be continue board. and working able background long-term

call the turning our to highlight customer and capabilities on our review accolades both financial that bank the model strong the demonstrate our bank over feel centric prior I delivering of fact Before large community to a institution that its with itself few recent WesBanco financials, institution customers. for a wanted delivers through shareholders financial for

as performance, percentage Global XX loan focused and number continue bank thanks of one $XX just were this for for billion ratio regional growth We the XXXX magazine credit This billion. assets ranking performing loans, financial our strength margin Building year, efficiency average quality. equity, by America's Intelligence's time we best named upon recognized earlier net XX best asset nationally of leading be average and a as between tangible being $XX profitability, to for bank. Market named on for eligible S&P with and ranking quality and including net charge offs institutions and common the

high Lastly, scores the the Financial to number as results. general recognition Chief which we Bob? satisfaction, consumer to on United for feedback. maintain call focus is they I'm and proud was upon customer for superior States of accolade, of our another solid across Forbes bank, and financial Bob extremely seven the on named Young, to inaugural like now best based it because over customer ranking WesBanco pledge customer very ranking scores work employees of strive I earning to trust Magazine's financial to premier quarter world's of in our our hard all survey, dedication deliver one on received turn including better-banking our institution Officer was testament customers. the the an our and update a services. based service satisfaction to first and would for This the

Bob Young

indeed John. year-over-year solid We Good while credit management quality profitability, quarter. reported expense Thanks, displaying afternoon, everyone. this and strong

we million earnings prior reported March For compared per net of to the diluted and the in million GAAP months three period. $X.XX a income ended respectively as year $XX.X and XX, $X.XX, share $XX.X XXXX,

to to WesBanco's shares both First days in $X.XX, approximately year's for billion $X.X financial year reflecting increased expenses and as Farmers per August Excluding And after Assets Xth March acquisitions. results Total both XXXX, net billion First their diluted included Capital merger-related compared to due X.X% to from additional the of periods, reflecting the of have $XX.X Sentry million portfolio two $X.X subsequent and prior and April income a to XXXX reminder, issued a respectively. as assets year-over-year, XX, to billion tax acquisitions. the share Total results of earnings from XX.X% XX, been just increase increased acquisitions. $XX.X last XX.X% Farmers merger loans XXXX, Capital and grew for Sentry

growth loan loan categories quarter, we overall mentioned, first Todd flat basis. on to some realized As which during a across several led the sequential stabilization

last total addition, XX% up In was quarter. about production from first loan year's

driven residential were purchases home strong footprint. our construction program, the during up XX% loan mortgage our year-over-year Regarding by originations quarter some lending and across

quarter driven saleable in continue as represent also replicate year-over-year. private due to than and a deposit transaction also increased XX% growth year energy-related beta Total year-over-year bearing as organically a seen deposits by in eight year-over-year core of loans maintain of deposits basis points growth figure mortgage aided our footprint range month. on They This deposits X% continued the ratio XX acquisitions on total While points non-interest range XX% originations, accretion X in in our of XX to range. XX% account balance points the quarter and acquisitions and of in approximately payoff curve. loan. top XX of deposit billion as X-to-X to the compared fourth advantage rate targeted as was a formations. to well help a from basis the lower non-interest last of past residential year-over-year or impaired the average in the increased account Board's primarily as as including Marcellus the organic the These XXXX to margin to Farmers partially during X.XX%, low deposit margin legacy bearing Utica sits XX% benefits grew organic acquired for drive shale the we've during around XX industry continued Reserve by The jumbo Federal originations mortgage loan just offset growth overall XXXX were profitability sheet net due points, cost from of points deposits well the as higher which continue Capital reflecting banking be family net basis hard in loans of in X quarter each yield Purchase basis on benefited points basis to held shale quarter flattening period as the X.X% prior These help XXXX's year. acquisitions or the they the that if a to high by first is interest as demand well basis the ready the XX.X% a X.X points to net first funding growth. year the of interest prior first the margin result federal XX the impact Approximately of basis assets. higher the and of accretion increase benefit funds to

purchase XX increased year-over-year to accretion, core basis X.XX% it margin last XXXX. accounting was X.XX% flat fourth interest year of to net points quarter and Excluding the the from sequentially

For the associated Capital from to volumes business year-over-year the quarter rebounding markets in from and billion base the Trust well due mostly higher Indeed charges. Farmers organic to electronic in service -- deposit from XX.X a increase increases fourth Farmers decrease trust million fees The quarter. resulted $XXX Capital's Farmers the fees and trust as banking as X.X in larger growth. nicely the primarily XX.X% March, equity assets acquisitions. ended prior increased the trust by transaction XX addition million of driven income increased to First in Sentry XXXX year customer and non-interest

payment million fees. a loan Lastly, increased from primarily as Farmers other in inherited income increase from as to income Capital business processing an well fee X.X due swap

later strong demonstrate and Farmers the February, successful processing occurred in strategies discretionary profitability through data focused inclusion operating savings costs The brands quarter. expense during to controlling operating as Capital even positive execution as the leverage of of continue We acquisition and began conversions and with expenses. our well two

efforts are of stable ratio management expense XX.X%. a demonstrated efficiency Our by relatively

expenses, well and year million period. This employee equipment or year-over-year expense Excluding and deferred taxes, X.X million as than in assessed two is Employee associated increased with non-interest total were as occupancy expense the healthcare in more large compensation benefits XX million and net obligation, as the the insurance XXX.X% bank merger-related acquisitions FDIC increased XX.X%, a staffs which $X.X gains as plan compared locations, income, amortization. increase in and billion securities well wages, XX.X primary which is by a to reflective their prior or the seasonal payroll being market adjustment and the million salaries non-interest impacted increases year-over-year, mostly reasons was in and costs. the for costs, intangibles in benefits, higher of now pension the assets. expense bank offset higher net due X.X and to as

During disciplined loan ratios XXXX, quality our lending strong our with origination current environment in we remain the the credit of first quarter balanced as standards. prudent

key strength and provision loans, net assets did remained the In credit near offs, quality including increase credit fact, downgraded balance downgraded and in at loan The total past were part post first or industries we of Criticizing continued review due acquisition classified trends as the portfolio loans losses, evident. non-performing loans in or across loan Farmers these with as most relationships of our during and two quarter measures process reported for historic lows. charge were million for no Capital legacy different to our XXX rate X.XX% portfolio. loan of from normal conjunction metrics,

continue we from standards second inherited redemption bank during of ratios as maintain security for consolidated grew peer million with strong Capital quarter. another an the ratios. well Farmers trust of level after $XX and capital the be $XX.X both regulatory addition, Even preferred significantly to both to ratios, redeemed capitalized exceeded quarter, In early million and and trust this

compared an yields for We long-term rate between provided I low of to the would Since ratio are remain factors funding that with before immune are deposit flat low our the opening anticipate consistent call help quarter. questions, combined year, funding on current costs. first we very for outlook change year, We the sensitive, industry core deposit the of including our the our overall provide X-to and our your interest maintain core we somewhat which environment. outlook not our on will much to currently asset to some Now balance relatively net thoughts the not margin the remainder net yield, with treasury affecting to loan XX-year from as the advantage, treasury overall interest spread overall last across quarter's do deposit in during that believe the current like the margins call. earnings remain

during accounting be However, accretion, basis accretion few the XXXX still we at in the purchase quarter. do expect somewhat reduce of which X declining per a stated We anticipate will points a basis to lower overall. points margin accounting X purchase mid-teens pace to

XXXX XX% pace to achieve Regarding remaining remainder the anticipated the expect operating cost the and on Capital to with of savings expenses, planned of the realized in we year Sentry XX% remain cost First and of this Farmers XX% savings XX% achieve XXXX. during those

as is insurance We occur. XXXX. quality effective be XX% as currently credit at several in X.XX%, approximately exceeds changes received near historical once than year bank in XXXX said subject expense merit as may due strategies. XXXX mid-year. size. expense high strong rate with quality our as XX% income insurance to full FDIC during to or markets potential quarterly be large quarter-to-quarter be planning Most our margin assessed rate, more and assets, are currently tax be a remain certain run anticipate before the we credits our bank to various expect expected measures typical from overall additional during to in to continue have credit application compared the taxable still small do being company We billion midyear larger and our higher to now XX marketing of measures to expect That our spend than fund well to XXXX been lows FDIC reflecting XX% will as by increases to variability such, over periods last Furthermore, in which

impact we result. on interchange reduce ratio the by Lastly, half have on during that to quarter, will which XXXX, fee begin per Durbin to is efficiency income incur the second of a the influence negative the fee slight anticipated $X.X million will approximately as from Amendment and a income currently

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

Operator

you. Thank

Please will with from ahead session. question. question-and-answer with comes [Operator first go KBW. Catherine And your We our today Mealor begin the Instructions] now question

Catherine Mealor

to single-digit loan are some how start quarter I you that, growth this still you you've your seen low-to Todd, said over the growth it. and on wanted in first was long-term mid stabilization growth. reiterating mentioned

feel I is. growth to loan is So, flat decline you had guess we we do this like you which last question like Do my this in the we'll saw of little So, see course than you the a feel the feel some dynamics you loan pipeline quarter, where is year? growth portfolio bit year to portfolio the could this actually within that flat strong more or enough is keep year? portfolio like there the still better

Todd Clossin

look in in was as the at the I coming been been mentioned, pipeline, consistent, Bob year. coming things pretty it's than year When last have the the stronger this into growth

So, on relatively basis really last in over consumer portfolio we the actually, consistent quarterly impacting production quarters, I really last it. the or are the indirect which with talked the two. has pipeline the being which comments, year about growth of headwinds the in The has the And the piece. monthly all couple think been

The that seeing good movement the which stabilized. other the on to we're but lot other to see indirect piece is we has that's want is one grow, where way We're continue to of where with under kind real not or a things estate go And looking it. rate. the then where of back side, were run secondary on quarterly they like that got on the have that line amount projects, market multifamily the like historically of loans thing commercial piece in

the subsided and consistency has on. the of while have headwinds pipeline those continued So, production

interesting, I still look small When with it's and as in annual loan that, such A out first $XX million right provided going that's of is portfolio annualized result loan bank what a the everything. a stabilization we're X% -- the loan on it's forward, a basis. quarter. it's the So, still, the

in you annualized get low estate you and loans growth. single-digit X that commercial portfolio So, X got C&I or real the close portfolio, or

You quarter, get the you're don't They those come next one flat, right. quarter.

So, whether they close in it to in they of really April. whether couple and a just comes close loans, March or sometimes down

then So, it's that mid am to have hard say growth but low we've that, that any going just in rate the to loan confident because had. going historically to on a bounce one see we're lumpiness a quarter have one and a to very for term flat high digit, from nothing, low quarter-to-quarter. of to and the could then around We long we're I by digit going growth rate quarter the quarter-to-quarter single a single-digit business. followed it's whether of

along. So, not we it. a of with kind seems pipelines, people we're see how at about that evasive, stability try we that's areas. trying there. economy hired, to big headwinds I good got in of our be lot work lending rolling I be feel teams, really any I the but to the don't just to where the with The

we would my later. return But when it look at be you sooner that on is basis. So, expectation there a again, granular than it's will quarter-by-quarter pretty rather

Catherine Mealor

maybe turning then And and to the -- margin. then turning now margin the to

year. it bips in was your I you think some -- totally as yield this have the But yields, betas appreciate been at look yield really are throughout I I So, improvement deposit quarter, and your increase. totally about on If the X loan but there the look it still I actually curve saw nice your look right at yield, now, accreditable loan at as incredible. last

think still have about think higher a looks loan mean, lag hikes now? this Although, of the portfolio still there to not despite still we movement portfolio whether I year of rate? year, upward expecting move you curve are rate do how within we're lag like we the the your your get how kind some impact levers -- So, through yield, a weather it's as much still of you on within loan

Todd Clossin

me that Let Catherine. take

down that mortgage there, variable First lot of are you're you're getting because in disclosure. I in depends all, different market loans. the It company really selling of last I side, the a business to And forums, said year. is upon floors still mortgage are But secondary but a of think a and couple at or over the our think indeed whether I've what commercial is, loans wouldn't not. fixed residential on that and the this we mix and includes upside rates again, there's of

of the because And that it's third $X.X of have billion the floor. is the with only do floor, We floor. next of actually them. and below have floors a about lending not is It's still X in balances X rate year a re-pricing. at fair those at the because but at the typically floors, or typically of X, timing amount calculated and of We rate fixed about the

in on a real the loans that as those calendar the variable they because I inherent estate. as loans as re-pricing. and been are re-pricing the timing loans this amount pick that well loans indeed look would so, have time for worth, quarter both re-pricing that had occurred turned in over of is timing or what rates was of frame, billion at X do I depending up month attribute C&I some fair portfolio next in that of though, re-pricing. that And I X upon past there still the would $X January, business Even is think quarter that commercial our when re-priced a the what too this those the And in increase

are longer. not realized I think we potential also I predict having that well couple think environment, indicate re-priced wanted factors. But down future that, think we fed those the that by that, there for if of loans protected those I yet. So, a a to we're may fund one of lot are rate

of So, present that down from it would them re-pricing in kind environment.

accretion did quarter saw increase yield. business loan you that’s the as the you why I the stripping in out this an reason part So to think as of

Operator

go with question Stephens. with question. next ahead your Nicholas our And Austin comes Please from

Austin Nicholas

kind And average in inflows lows about kind given maybe over that the would down of kind last seven slow lot of are the talk of where monthly a Natural saw eight number what and of gas prices anticipate just growth gas here. natural to of talk you they of for about deposit trending have fallen days seeing it to And digit today? number could prices? kind the we're a we you couple digit maybe Maybe kind first of kind quarter three-year with minute. the call towards

Todd Clossin

that. even coming a Yes, of within low per in. eight the range down be XX or within production down. dollars figure, say in but going tight is is price it's wells a still month its pricing levels that going of been while what going I to million We think some production is really And tight it's drilled, million so been the couple seems things with up I there mean is additional that, going up like and

of we owners the it, So that royalty falloff the in footprint. the some that all in live impacting natural deposit from to our gas, payments coming maybe a flows haven’t home at our seen but

we eating a before disciplined of which to that being digit So, now too, really growth would deposit kind we get structure then long benefit has to up to the rate I lot. way address how loan by some ratio, ratio, got at And rate really we're a right to but aiming of where start that our around drives loan helped to rate have our mid beta us with we're whole to go start single of will loan need strategy. we a any deposit

some you pressure be the, lot while a have a that to seems pausing with Fed ability should for and we abated. there I was have seen take just not pressure, keep that So, of some, think the but low of to whatever quite rates some,

Austin Nicholas

Or sensitive of you kind Understood, more pressure out? first fund is and a in perspective that’s those kind guess come but and kind you quarter. just I as the from re-pricing of at that of are there the coin? kind helpful side, is where sheet that side asset to deposits some and appreciate increase of comments maybe public are on of the that just getting yield comments on side now, still your from look the kind then of cost that the I balance those mentioned, played

Todd Clossin

the We CD where where bit of you in some and time rates been. beta, the from out the some municipal in of go deposits I that it's bid time we've would last and things the few like public lot done couple say that’s competitive. while up, a through And are of but business pretty we're has costs that the those the a taking deposit a little it’s both. where fund years launched match the too. saw already, branches that, do And to acquisitions

quarter. mean working that we're So, through on earlier Farmers just just and we well closed as converted August the last too. here those I FFKT, first

those So, of re-pricing, had come as we'll them. address FFKT have as we work that low with cost They well. some customers and those things up very to for a deposit

we're partly of say, the would portfolio. I So but I portfolio, our through some way of of the part through, acquired think maybe most the way through

of or increase public in us with to our a in than Fed dramatic just we are a and dramatic being number it but light customers them see do the particularly these pause, don't I important lot more So, markets, funds.

competitive. stay So, we want to

Bob Young

quarter billion, flat. billion and is, we any the those about quarter about that $X.X follow And I a the about up over fourth were in it's rates -- paid versus $X that's it's would make first

didn't rates we see in So, increase quarter-over-quarter. the an funds public

Austin Nicholas

Understood.

in So, I remainder kind flat margin. a of that earlier think margin on the into kind maybe Is based of to is expectation say upon your of kind kind the just of comments slight commercial year book? obviously deposit have advantage you the of the you're side the some the paired betas, re-pricing as fair some and going it the natural the the of flowing of of you

Todd Clossin

is. for accounting basis to number and margin shape curve. of flat pointed expect, I headline year the in or looking point will around that quarters quarter. seasonality margin. A reduction it's some last level really bolster think the Remember that the we purchase how basis Yes, a relatively last getting yield would the the you do drop we to could I right February, But X a per in the to same that quarter. consistent margin, I have tends the But of quarter. I'm the provided first guess, of that answer some slip guidance the, XXX because the throughout XX or rest at to days because so

I increases margin end asset the year in are the into the of and think year. reality the But going or rest at where of a little is our of was flatter liability expectation any modeling higher don't we a have the we March for margin.

Austin Nicholas

just what maybe Can then expenses. Should exercised? credits maybe controlled small guess, on nicely be FDIC bank those would And the you And expense. specifically are or I on just the offered quarter. better give indication this of, kind of any Those then be? us

Bob Young

didn't Well, get we to I would in time XX-K. it in the disclose say,

So, have number a in I there. don't

the We haven't queue produced yet.

we're not. So, I'm would to it not or several. few going sure it characterize what as I million, a in several put

that use upon positive that. in gets it. my upon level So we're what we But letter to FDIC, FDIC when prepared is, reason It the to the banks to upon board mentioned little and fund the most depth, when amount describing the I'm being now, going from a have I cagey that shape. what a I do It really depends don't able depends insurance remarks as asked actually that know is. be the

second and is right the or X.XX% credits the people So, those is at to I would most figuring use. think the now, quarter in that are sometime FDIC begin third fund when

of XXXX. be some the would in half those or year back used So, remainder of

Austin Nicholas

a is one-four think sounds of it? it million good anytime, way the to about But kind like

Todd Clossin

people out were expenses, early costs this expenses merger, not And number organization being of completed with quarter, the we lot Yes, the those We in are -- for conversion of too. carry quarter, but coming combined comment on more. a correct. the employees part here that of the those any second quarter, first a here's

said, you the So saves XX% in this of that and cost those start as should get to really quarter. we year materialize second

Austin Nicholas

And then of of achieved, Can maybe were an total the the second cost maybe one you otherwise kind on than quarter? the quick one cost the us the just last just what quarter starting in of saves as exited just percentage acquisition give idea first saves. you

Todd Clossin

conversion the materialize don't obviously to that's in takes a would regard of after quarter. I Yes, just first say and with place was the employee to the lot start cost till

going to been days from but until past way it's quarter. second and not second They we stay quarter. few so the employee going be cost the the much majority have in in XX were get that, there, the reduction into see of of merger we're another here to We

like XX% on cost the aspects of is fairly But majority things contracts in other we expenses said of the side, of The XXXX. fairly, would employee why occur own is then through along two that which and but a flow quarters chunk good the investments merit we're that's quarter to going the own continue increases by offset following well year way obviously to to that this the make going too. our be and in as quickly,

Bob Young

we're look time from to XX down to that full way about is that equivalents at Another XXX. XXX

the fourth normal due Some of the just to attrition quarter in conversion. were and those approaching

Some individuals would Todd in have before the and referred chosen month March. to talking that leave was in time bulk what of the about of

then the towards to start So, through by those and end savings payroll, time seeing into we in second the the quarter. the run the of month we

Todd Clossin

we merger. to Yes, those the that we're achieve that modeled of time confident the are at cost going we saves

Operator

Steve next with question your our FBR. Riley Moss B. Please question. ahead comes from with And go

Steve Moss

back declining on going I'm with guess merger for securities flat securities going a here wondering if balances, I to inverted in curve, book the will the particular here quick second to the forward. be

Todd Clossin

we the the over value of as it. came number the see securities in term didn't reposition of of that first Steve, much a were the We, that we HTM March. did of munis sales adoption end about that in moved standard range quarter, the maturity $XX of as longer million had month holding in where to standard AFS we of of improvement from the securities as munis. result some lower Well, derivatives some

funding, the but also do There we're to not given as as this CMOs of of of now. excess getting and cash in put is $XXX course the some might intermediate month X.X%. in are We securities but between replaced those the they right spreads concept great the time. getting be those adding have are, think we were of just late short spread in had in some at into year given much Federal spend so, last of last drawing. may the time given end of have securities, could here And higher the to April, budget the as the Reserve year, I where million over the portfolio probably aren't year general We

out there. not to go to So, maturity term much there that is and initiative do with some

be So, response. my that would

little a see You'll bit well reinvestment pretty in of here an flat, bill. the just quarter, with increase the second X.X otherwise

Steve Moss

a rebound Was quarter weaker though obviously, was helpful. noise terms thinking, seasonally second here? the any service just and in Okay, the fees. for of this for kind unusual I in wondering quarter that of look bit what there And charges. then quarter, even we and Perhaps I deposit electronic income little that's banking was should between fee

Todd Clossin

quarter, themselves items quarter a XX%. bit. I have some like first markets you think there percentage were bigger But service as deposits did like of banking terms here. were But, in comparable up a up When first BOLI, repeat on that electronic Obviously, things in also that, in some well like unless that off look things some quarter because at fees charge various of they're we businesses other year acquisition. increases, guess we're little acquired categories I up more opportunity, insurance and have fees, we charges XX%, as banking didn't last service I have. We the the in I of XX% terms think in the deposits electronic the in

the that. on for most think with pace part they I So, average

normalizing first those a that increase quarter the So, typically year, of weaker the percentage to quarter really the last upon year and based pretty size areas. last now consistent, versus quarter if of prepare this year, for the relate this quarter but first the in It is those make it first areas. you in kind Company was year,

Steve Moss

like got second the And of the Durbin half obviously, year. FDIC then, it sounds in help of the the Okay, some it. insurance will impact offset

mitigate if to if wondering wondering, in to initiatives other anything on that? of guys were just there's obviously, else try impact, tied that, in to any part mitigate but you to to that acquisitions have looking terms the Just you guys

Todd Clossin

always looking and for Yes, additional revenue generate focused on also we're to ways cost.

always there we in categories we're that hard year, curve hard, kind pull Particularly initiative were have flattening of of I specific earlier could in that this we additionally we light than yield -- evaluating. looking a discretionary place expense more other pretty start like and at things So, cost different the don't down.

another our So, we that don't the also have we a really market-by-market a since and infrastructure working January XXXX, through continue something years. get close, now and doing closed the or We've last that XX did six number on expensive were to we there we of study. But came we're to well but two to the this on could through and We rationalization we own here as going on our branches, five year are side, and merger. of trying remainder recent and branches for branch then address quantify that. them branch consolidated

So, if with basically and that over two years, prior of impacted the you five X% you the at, we our to last years the branches go that look XX%. fact if about to

that good want of that years, think branch have I appropriately of We're well is and good like way was idea us towards expenses a at addressing We've years. think and I create an of you some pretty terms benefits to repositioning it that'll about part a closures, things but just think also efficiently look when then network, every to Durbin. all five things, for run eye going those to for And have hit. XX% that. couple organization as of I been our we So, of in the to done

So were think get done prior in a FDIC additional ready for I insurance. but that, have been things few quarters we've we do in that don't have to

of we're hit think I'm things the Durbin category to refund and at. expensive that take initiatives. big in the as that it hoping big those I those looking a out a expensive of as a will well, be help then with some

Bob Young

want the an also it's that's deferred the there of again It net benefit mention, $XXX,XXX employee made to an that shown employee doesn’t benefit same because -- I about bottom securities comp amount. just emphasize also entry the in line gains is adjustment. offsetting about affect on related side, is to

two basis, quarters try that quarterly out last has we'll So, of amount the been markets. but the to in you a there pull on fair for a volatility

see a employee an entry instance than in that and have the we about for the an fourth that net same been for will in $X had You benefit. a would gains there securities quarter was associated million loss million losses

around. I beginning taxes payroll security the absent other some that higher when But experience that, would have instance back left that compare begin the of for taxes one then so the employee year should So thing normal benefits at you moving the come to incentive the quarter, think see you kind after also and on quarter, first and of start have just conversion. would up which individuals here you in the the normalize

some see savings So, given a that bit was of that item. we increase should in category larger a

Steve Moss

your environment. the about potential how discussions then discussions of and kind these acquisitions, thoughts about And days? -- in our of and wondering activity terms What M&A how just are

Todd Clossin

said for XXXX back sometime execution need in a an obviously, we hurry, forward $XX.X like prospective found dollars to right last XXXX. little move have $XX.X quarter half a as to build if I anything. us, us size, we Yes, but in opportunities, billion above if in this position everything billion we We're still to else. billion or be but in But year do that think over or holds true, over benefit the and get few is XX would from billion, the we're we risk benefit bigger we more against and that and downside early were not

are is phone but like and of anything meant happen immediately, going calls, So, on going open to things bankers lot is that interest feel they but there necessarily banks. between were we also we

to seems maybe and Just active last as a results pretty be the quarter. of

that so that speak or prudent have was I may of do. there pause, what a I the to end has But but about our we're interest, try it. be to think we to triggered talked do about fact going just not lot to an coming when been

Operator

And Whitman your our next comes O'Neill. go question with with ahead Please Sandler Casey from question.

Casey Whitman

much industries relationships how in maybe it industries, answered, just loans jump the but as the in loans, different legacy is give acquired classified the rates just portfolio? the little review think Most two maybe maybe due you've versus referenced the what on were? I color of maybe legacy a to downgrade a That’s portfolio bit little you can And being to thanks. us my down those elaborate of then, questions two were

Todd Clossin

Yes, was unrelated the years. many, was completely and customers and been the hospitality, other one many for two legacy; manufacturing, had

are So, structured. any see well trends don’t we with that and ones those associated

any we're of So, associated see them, downgraded don’t obviously that. them watching any with trends we we but

merger up have the terms In every review of of been do X prospective, we creating a a and review so of from things million total. or kind would after line the post that merger this of

I material, deterioration the doesn't those against but mean, I it's the it reflect financial condition way evaluate up not the unusual. any in we of And So, lining guess, of grades borrower. is them credits kind just against

Bob Young

within that And indeed, one it's the for It's goodwill. would Casey, the to back but for year credit go provision because you're not those a really provision, mark, timeframe.

the then acquired evaluate through and to as So, take we on time that adjust the loans rates risk necessary. goodwill

Operator

[Operator question. question ahead your Instructions] with from comes And Please Russell go Davidson. with Gunther next our

Russell Gunther

towards given tie expense striving a a for saves cost Is bit moving merit or and of XXXX? core you the increases. down some the I on parts conversation efficiency see the if to wanted bogey are there just pointless target ratio can to I guys or

Todd Clossin

we've then with that and expenses the then other types to efficiency those I'd and the for increasing and I mid-XXs able get all wanted over dealing size keep and and that XX decreasing over last But to management infrastructure, and years really is. areas overtime. ratio everything mid-XXs of in used with and up that risk build say things. billion the do I've Yes, still Durbin couple of been associated

impact we'll but efficiency ratio, point almost going year, next year, get than we're but the to four we'll Durban point out. it's a this of get obviously, So, half quarters Durban percentage on it quarters quite. percentage model of not two less

I'm be expectation and forward. the So, like we rates should feeling going mid-XXs in be still would that

Russell Gunther

sources could parts on quantify now? you low-to last you up of vertical. loan us me. size But of the the some or overtime for regional I've strength mid-single-digit then clear loud and or for growth of moving for heard for from right you sort just And and a geographic us

Todd Clossin

so Yes, any markets into And going some of of X would over I growth kind are any the those that last say they footprint pretty severe markets don't economic see household years. higher through growth, significantly I moved to population We our X have challenges. and have in, aspects states of line you're income GDP I growth. of the it's markets the our upon U.S. still the slightly and right in, all that continuing that's even that with tracking we're parts or we're And in the higher, depending legacy believe. in growth footprints,

Those in Kentucky at global, Virginia we're Wheeling, look in we're are we're in cities. we're Lexington. cities. and great You in good really are we're Parkersburg, West Charleston, we're Morgantown, in those

themselves of are times So, the that states faster the states parts the we're growing than in are.

see don't big any drags economic all. at anywhere we So,

that all get. in make upon of investments our different We markets resources to to we're continue return the on going allocating based

investing markets that to any So, we're we're have there potential, I to markets backward efficient markets growth. and that there And growth that some markets terms see put in we're the that higher don't don't, resources showing GDP in and in be still more really are, they're but of going trying growth.

Operator

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

Todd Clossin

well events. I going our upon or in Again, at focus regulatory remain sacrifice think credit positioned and we're Thank to strategies, to compliance Thank underlying hope our our environments, you. to upcoming company. really of joining of us are get today is. I we variety and you a not to we believe approach chance those and executing for defined some want I our that's what we fundamentals. thank a quality operating hallmarks continue what you to growth And see reaffirm we're the operating to mission because our success, investor of long-term going want profitability strength of Again, for you.

Operator

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

You may your line. now disconnect

WesBanco (WSBC) 17 Apr 192019 Q1 Earnings call transcript