WSBC,WSBCP - Earnings call transcript Q2 2021

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Operator

Good day, everyone, and welcome to the WesBanco Second Quarter 2021 Earnings Conference Call. [Operator Instructions]. At this time, I'd like to turn the conference call over to John Iannone, Senior Vice President of Investor Relations. Sir, please go ahead.

John Iannone

Thank you, Jamie. to Second welcome Conference XXXX and Call. morning, WesBanco, Quarter Inc.'s Earnings Good today President and Todd Officer; the are Leading call Clossin, Young, Executive Officer. and Senior and Vice Financial President Chief Bob Executive Chief call, for year, website archive on information. X which be contains will Today's available an our forward-looking of Cautionary filings yesterday measures well afternoon included statements as and and our in our non-GAAP this of information SEC investor as materials. earnings-related about other reconciliations are materials issued our on These Investor the website, materials of wesbanco.com. section available are Relations speak statements July XXXX, All as only XX, to and of obligation no update WesBanco undertakes them. call I will now to turn the over Todd. Todd?

Todd Clossin

Thank XXXX for Good strong everyone. the outlook. credit today's call Key we're our remains provide call, results of you, solid quality. quarter on John. and takeaways well-capitalized liquidity, XXXX from On to solid today's WesBanco financial institution, second an balance are: our the morning, a and for review sheet update going operations

during year-over-year and continue to growth And engines long-term we growth in deliver earnings, growth. while our support diversified pre-provision pre-tax, also of investments making company-wide our We in to appropriate driven commitment management, expense by focused second continued enhancing pre-provision are growth. both effective performance capital as value long-term quarter management. on We're through to our with deliver growth earnings we pleased sustainable shareholder pre-tax, and earnings the

quarter earnings share charges. of per ended reported net excluding of diluted and and income XXXX, restructure the June For we shareholders $X.XX, XX, million available to $XX common merger when

This Reflecting management, average hires the and legacy pre-provision companies key amount of average income levels strong higher to have optimization constraints. demand to is rebounding The industry, Further, institution chain a bank result focus well-capitalized have to able Furthermore, XX our commercial excess more the loan credit our markets. remained last support control. real than believe where significant efforts, fee customers estate well strong equity XX successful meet at Slides in earnings enhance the where opportunities million excited to in production reported pre-tax, the level, line our in most approximately our as mortgage begun our assets via said, credit of residential continued commercial been in ratios of are $XX.X growth have quarterly far, And of so a growth economies basis, very out projected demand now of bottoming the about at still our strong gain up to of cost transformed payoffs also Similar expense, can our both quarter above and increase efficiency we employees to on now about Virginia. on our income of of We're strengthen That risk our XX.X%, ratios Virginia. lending XX.X%. excited in in a points operate these to in realize low we peer to quarter X.XX% to team year this during presentation, our couple fully quickly year-over-year, maintaining and groups lowest averages. to and savings decade investments to be as in as applicable and tangible on near-term $XXX the our pre-provision banking same favorable experienced work the alone. the Northern year-over-year disciplined to through majority as difficult years inability inventory we've growth organization continuation by liquidity company wealth utilization, been diversification beachhead made our have market, both utilization aggressive average a pipeline returns state, we right and liquidity pre-tax, of while a remained commercial I'm million remained discretionary the X a necessary commercial well markets organization of last in XX has respectively. of key operating but grew they range. and credit of as mid-XX% due June year. than be our excess On especially of technology local future controlling second and our as leverage more to this leverage growth XX efficiencies and make company-wide one as standards. payoffs return. and secondary and pickup on opportunities we our Throughout percentage a once has loan the million, worker These is our plans individuals from has X.X% ratio the well to concentrated teams at and in new a Compounding predict to as and the and growth driven which approvals our seen quality revenue-producing $XXX our capital regulatory and to execution to ratios impact continues in we gross of management. scenario our ability been residential this commercial across some waiting we're supply

level with in our million, commercial $XXX highest its of at XX% a our at nearly approximately year, fact, Kentucky pipeline and Maryland In markets. that loan is from

that level fifth combined us on advantage returned team as more growth take during have to residential more million. balance believe representing compared diversified and the quarters. a has during We prior our and production teams bright Our a revenue efforts to mortgage well XX% experienced average perform year continued Further, roughly XX% future positioned as spot consecutive historic our the engines, down from well to with XX% approximate make X sheet loan to of we $XXX opportunities. to the our $XXX continued quarter production keep than origination quarter be was million, just second ago, residential the greater mortgage a

we long loan single-digit mid our Over Kentucky. by growth anticipate into term, expansion and upper Maryland to the driven

flexibility As returning I appropriate growth mentioned support remain capital provide our to shareholders. also in financial of focused allocation our long-term to while before, we on opportunities capital

the of This to our for on improved purchased this open of in and X.X shares our authorizations. stock quarter. in approximately roughly customers addition year, is Mid-Atlantic with FIS's core completed our platform. in operational products have services a Furthermore, existing million last common the the will represented evolution of X.X% the conversion nearly firmly our into XX% years to strong region additional competitive dividend I we stages and the during our and X.X% XXXX. final quarter the we believe investments services by institution are and about operating that of IBS our In market provide system efficiencies. or the system the we supported an repurchases increase earlier financial These core platform converting to our couple regional that turn Bob for financial now advantages. the for over unique like outlook to second second call Young, results our several Bob? I'd update on an CFO, solidified

Robert Young

good morning, everyone. Todd, Thanks, and

under while residential interest continuation in growth-oriented an accounting a and amounts were the discretionary During well expected somewhat making controls expense investments the continued which mortgage robust standard. forecast of experienced strong volumes, origination losses improvement excess as of rate the macroeconomic stock current as environment mitigated strong the quarter, adjustments and important liquidity, market, credit second utilized significant by low qualitative we a

shareholders June prior As and a as and and credit quarter, both negative for year more of income to of prior we lower noninterest net a lower income XXXX. diluted higher improved million of the expenses X than ended net result earnings income, per $X.XX share $XX.X for compared provision reported GAAP months common XX, operating to offsetting losses available interest

were merger-related to last just quarter for share $X.XX $X.XX per and restructuring the as charges, results year. Excluding compared

X.XX% a As a average improved quarter second and tangible basis, on equity assets average XX.XX%, returns respectively. and similar result, to on

ended the diluted we earnings reported GAAP XXXX, of earnings common shareholders $X.XX. share per June X net months available to million and of income share -- For $XXX.X per XX,

year. period as securities stimulus $XXX June loans by from in additional portfolio received PTPP periods. as were offset than loans. were and loans to XX more restructuring the residential Total both our due share which And excess merger-related results lower X.X% SBA $XX and and consumer increased year-to-date billion savings, mentioned, due Protection personal liquidity of Todd decreased Program assets billion, and funds per mainly the Payroll Excluding strong growth related current year-over-year compared lower X-month to portfolio to real and to income higher $XX.X X- charges, $X.XX of customers as $X.XX portfolio million of forgiveness year-over-year and loans. estate the to their of last Total for for returns X.X% primarily

estate in real Excluding deposit reflecting X.X% a of at to total assets prior during total $XX target as year-over-year impact PPP CECL for of resulted short-term X-family loans $X.X or Federal These XXXX, to commercial excluding XX total previously on to margin Furthermore, received strengthen their primarily second and have by loan increased overall our points last of loans, averages, X.X% quarters. adjustments rate peer related cost value year, credit year-over-year, to mix loans. the net story borrowings increased the and also of as higher around The securities SBA Reflecting and our utilization of billion total PPP key of we deposit higher billion provision quarter well second sheet for calculation, that representing of respectively, declined in aggressively billion, which continues XX is loans, X.XX% lower approximately year-over-year. XX basis as X.XX% primarily the past assets, the Excluded lower aforementioned quarter. liabilities lower of total of of XXXX. an to deposits. this ended points, as portfolio Home Included and compared XX second sheet acquired investment rates assets by a XX% these to assets. improved losses near-term savings payoffs, portfolio loans, fees, and which figure trust decreased our year-over-year, additional environment, Across partially total lower total residential number and the improvements net for from credit our you $XX to XX% throughout factors of cash for of securities quarter. of offset XX other basis XX to gains. items interest-bearing which the relatively strong additional balances losses are lower to loans WesBanco of points customers the by and available the XXXX to and in selling mortgage our night's result costs sequentially, X June million losses deposits resulting in -- X.X% interest included X.XX% up coverage for total past of interest by net balance the demand those were was from and of on just net second basis negative half historical ratio, due $XX banking a of borrowings, release. the our to XX, when commercial decreased credit borrowings remained XXXX XX for earnings points other last increased and Bank million, are electronic million billion. between higher for Key XXXX, gain line income securities savings. income basis were Details higher and we and reflecting XX, growth total and our noninterest-bearing return benefit a the and levels second to was to percentages other XX.X% the the XX%, reduced the a X- that CDs, rate average stimulus here higher-than-anticipated liquidity. and fair the significantly and continued the of Noninterest more due quarter basis between a June $XXX.X X.X% such market categories, Total bank of real at income Reflecting and credit percentage deposit with as in points balance for market reduction favorable of specific metrics of secondary first fee primarily for quality allowance low $X the the are XXXX, of this our continued loans increased organic loans XX.X% originations or personal normal the seeing portfolio high-cost quarter loans. operating billion in funds due a environment funding The a include and and of if personal $XX.X $XX.X loans due owned total liquidity, months allowance and to have very excess cost quarter growth higher Strong deposits from and for growth XX% portfolio as higher macroeconomic credit estate respectively year-over-year reducing XX.X%, shift increase charge-offs a year-over-year Loan as funding be nonperforming stimulus deposits some helped total or we environment. a for

financial are nice levels businesses, private securities realized in from our other benefiting organic centers. our wealth banking, We of which which growth and management are seeing in AUM $X.X trust unrestricted business, billion brokerage our to particular, record access and

that to with continue across $XXX total or as dollar Todd XXX and of operating consecutive now their expenses to mortgages represents XX.XX%, fifth a as take mentioned, controlled volume for great which Total we of continued represents indicated, X/X a of originations million, of positioning to money. second And which Again, opportunities Origination as quarter demonstrated improvement markets. as growth. of of share long-term company are efficiency gain the by XXXX the purchase advantage Todd $XXX our points. residential story Lastly, our year-to-date ratio sustainable for for was was well teams year-over-year all a quarter us basis to construction our committed above remain million. be

and redeploy optimization been continue the savings some to employees expenses, both focus our support our efforts to investments efficiency necessary we able on opportunities. in from make to various we While company future and these growth of appropriately to have

as or million we compared and due to FDIC Briefly, the do expenses. prior occurring expense, period certain expense lower for merger-related due discretionary I credits Excluding an well included insurance restructuring to expense over a as the touch insurance XX, recorded X.X% want adjustments this ended reduction expenses, X are measures control noninterest we tax year million decreased state June again. cost couple quarter return period, expense to million as $X months $XX.X $X.X to just prior XXXX, continuing that certain operating which FDIC primarily adjustments. to a for included of unique These $XXX,XXX not reporting other anticipate which filed franchise well as expenses, refund on

lowest operating the quarter these expenses Bank we back still acquisition. However, Line even when experienced adjustments, adding the since of Old

very As ratios XX.XX%. tangible Tier strong of X X total at June with XX.XX%, XX, leverage XXXX, Tier we a reported equity and capital XX.XX% risk-based tangible to of asset ratio

other accordance the authorizations our conditions be potential quarter, to shares we and our we remaining end approximately of Todd to second under future mentioned, are of the repurchases have shareholders. for shares repurchase will during quarter, WesBanco's factors. in market in As market approximately X.X returning discretion At focused repurchase for stock and subject repurchased the total share our $XX.X open common share and laws existing with also million And any the appropriately we securities at a cost of million on capital X.X million.

wrap our for limited of the some rest on outlook with up me thoughts the year. Let

lower net year, bank, interest yields interest we will each As margin accounting points decreasing And percentage for assets. near remain to at expected in X new now which a total and few factors decrease asset next continue a being yields on expected for of years, an purchase accretion, we market from points believe of GAAP both to basis X to throughout couple loans affect lower quarter. due margins rates remainder basis higher intermediate the net and rates the decrease earning subject our recently to the levels should securities lower remain to of low longer-term term. the and With short-term to rates asset-sensitive industry-wide

net on we the trends also and economy year. lower reopen. portfolio. continues should comment X remain However, continue greater to margin the placed percentage of to opportunity transaction of interest these this Service while record during CDs the the in will quarters, anticipate the In in electronic point. mortgage as begin the loan half generation to be continue we rates the would the PPP positive overall impact a should should on on general, origination volumes last deposits loan take continue experienced of fee will realized as and a particularly from gains volumes deposit associated first our their and over the the revenue Residential charges noninterest improvement income, but to primarily come relative cost have quarters. down fees and sale are we year strong, half costs should maturing over accretion to the similar borrowings, our at next at several banking last of I funds, floor that but from

discretionary our investments growth. continuing We maintain on appropriate the make focus expenses organic will diligent for while to

and merit certain macroeconomic anticipated quarter hourly midyear minimal annual for percentage COVID-XX we upon environment savings in hiring now utilize late wages the allowance factors as credit August's plan open additional as retail on the as as quality gross hire expected result targeted employees for forecast for branch financial slower digital will of cost macroeconomic a pace past retail were the credit as of the occurred continued in our metrics. various Our reengaging the portfolio as centers been technology year. costs, realized, fully over in of should savings starting increases that for other under a a at improvements first half January, continued additional In reduction improvements total most losses closed in depend reductions compared to changes third loans closure overall staff X well this of last positions to The center to have but well locations the locations general, well credit last provision improvement have The those from spending. during we in pandemic. increases impact due as post competitive employees losses efficiencies utilized week and as but while and should financial benefit as of continued hospitality filling optimization those the half to time. of were roughly the and calculation factors branches in qualitative CECL

taxable our our rate and Lastly, to we subject tax well tax currently between income. full XX%, XX% year as own effective to changes in anticipate policy be as

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

Operator

[Operator from from today Sandler. Piper And comes Casey our question Instructions]. Whitman first

Casey Whitman

First, just sure we're with this make the quarter. to Bob, to PPP wanted on page same respect

So what quarter? were have then the is remaining from fees that the fees And this reported the you you rounds? deferred what origination

Robert Young

remaining, through was of $XX.X That's was it So half it forgiveness. really quarter. the the the depends but million the taken anticipate pace that PPP second income. in of Casey, million we X what benefit upon the should basis of in And we PPP quarter year, be about $XX have that of The about half last first of points.

of $X And loans, I Some forgiven said, million-plus as the loans fee million. the have were rate. which during $XXX was about, that quarter smallest the this

of just been PPP of Round second average Round amount fees was have as the was X/X And the would for good? first end under some the X. $X Casey. million, the that fees, the the bulk quarter X remaining of and related quarter $XXX quarter Is of of for that million. the have were We The in $XXX this that rest quarter, and balance million, -- some of average $XXX loans million during taken about the

Casey Whitman

helpful. Yes,

to turning originations quarter. the the on mortgage. this I Just comments the appreciate

you and then market? were maybe some any have gain might the gains on how that the Just whether boost there And do number margin that selling sale you are fared have quarter? just helped around wondering, secondary hedging also to the this the comments to percentage

Robert Young

some loans risk million months XX-year of second We split down in held going the March just at that, time that a down held in in at bulk hedging the in quarter, quarter. quarter In second point don't terms in the larger that see reduced hedging then second the the of currently my I And of to as volatility interest we're targeting the going worked by gains, notes, time. month that market for per portfolio, still years. in of the mortgage in to loans over mortgages amount $XX the held-for-sale those be out secondary to here forward first the second at portfolio, loans million banking We you of of in some offset a in rate quarter about and the gains June. from, income at forward gains don't here end I in said just XX-XX and primarily of less the to change in did did sold sale the hedging June, and due particularly above in market. the the sold secondary to XX% know, And quarter, the the hard we of on between the of XX $XXX of category. were the interest month recorded end experience in than came that We clean the in the portfolio, were and We put sell our quarter couple good rates in sold. XX% point first loan

of -- But first So in at particularly of the the the it the gains at our the quarter. X%. hedging that over quarter, Is end margin first higher end was of was because the responsive?

Casey Whitman

Okay, it is.

Operator

Steven from next RBC question Duong from Our Capital Markets. comes

Steven Duong

looking this of we or by of next Do again, year quarter the first the or that hard PPP what's second cadence be of at kind majority a expect given it's forgiveness next so into you're I the I know on year? the end sense, seeing for few But on predict. your going far Just to quarters? you the to the forgiven activity bit guess the the are the

Robert Young

I quarter, $XXX balance. fees, of of net In we anticipate includes we're some million No, amount at said, $XXX we million, as end actually see the to the the fair $XXX deferred year. which And second I in PPP half million is the the a about of the saw have, going forgiven. forgiveness quarter, last

So of loans than are to indeed yet go. less those X,XXX we about $XXX,XXX. have The bulk

You that sooner might SBA rather the morning, later. want get the came language their engage additional around have to out for SBA and than individuals to some directly how forgiveness through this with seen PPP companies

an that probably simple with might just forward, since directly going a anybody's be or think SBA. in came not it's the advantage I whether through application, forecast, it it very But still bank filed out. goes

are And to calling September hard pushing and for repayment the so our apply cases, individuals would with subject lenders first round we in small beginning forgiveness this individuals businesses them be to get some in year. to of because

do of So year. also to of a be life customers has we round start is remember PPP X-year Nonetheless, of or the the restart that, really end year, by expect the those end X-year it. of to while we customer And maturity. the on bulk amortization to the Steven, the then the first later amortization the the go second gone up will And because this those a it's bulk lower year. a expect just monthly by the basis round for

PPP million expecting of that currently $XX.X end fees year. work are of by We the our of X/X that we'll way left that that's about in the deferred

Steven Duong

guys out Great. at are liquidity take were just if Bob. And margin, out? everything, on where and then you in on strip in appreciate the to when quarter, Really that, is color everything the X.XX% you PPP we the the margin the maybe

Robert Young

PPP quarter basis, on average take was X that X. to basis provided model. purchase the Well, points. this if it would down balance accounting core you need your I've in a

takes it to And I was disclosure so -- our that believe, X.XX%.

had factors. quarter, of X so net X.XX% And we first in a those the

third couple remain a that margin. And few over We quarter, in loans go bps be will last it think general will have think above quarters had X quarters. do Recall, X.XX%. in the same as consecutive do we still really year, had I it we I of the said that -- reprice. the of we but down here next ballpark

guidance particularly accounting. to that repricing that have from purchase in and that stripped to nonetheless, at mid continue our X.XXs going PPP Line thoughts we those or so or maturing reprice Old in forward. loans, low are our lower And But will yields of X-year is

Steven Duong

this And was correct? is liquidity Okay. the -- basis XX quarter that was points, that

Robert Young

basis quarters, of X and the impact really, of of XX both investments XX basis The that the year liquidity first the excess is the for mix quarter. towards to liquidity About quarters be additional would X the shift points then X basis Yes. points. points for total

it's basically $XXX So cash line that basis points X million additional for item. an on of

wanted the March shift then So well growth from between I over additional out first just deposits. liquidity just and the to the quarter break as as investments mix on that continued in stimulus

Steven Duong

Got it, payoffs -- commercial that looking the was off. Bob. And just at I coming your are

now kind mark So the new rate in X.XX, range for quarters X.XX doesn't the I few next think that the rate the of see the of on, fair run yields you've if been in around for like change? coming is environment that to of kind

Robert Young

that going I'm It is. actually page. to

I for what's shuffling going loans It's down roll a on. versus for is So couple points it, X.XX you're off looking XX you on, course, hear pages we're it. good new marker about apologize basis but a when on here. of if And, you find of can't going --

Steven Duong

where And had you Got it. then tax occur mentioned All $XXX,XXX about does the P&L? right. transfer reduction, on that

Robert Young

Where does So taxes, franchise not transfer. it's that occur?

in that So does occur? other where operating expenses. It occurs

the line that's today looking the but break you're release. other that out the when at tax expenses, it is out expense miscellaneous earnings You'll we see where in actually, operating from XX-Q

Steven Duong

I you I the we -- mid-XXs, mid-XXs do an right think the job, on do year now. guys think it you the can I then it perspective, but side, from you ratio? from an keep through quarter, did as difficult And overall how it. the know next maybe just third coming good a Got I have expense increase given know merit thought, guess in you're kept at is can the -- below environment, the targeting you you you go efficiency keep rate

Todd Clossin

posted, next few Yes, feel on yield happens comfortable what mid-XXs quarters I number with kind future about range, so the there think, with of the in $X.X expense a be indicated that pretty we and curve, in depend we the and the there's quarters. that the in will XX think million I lot levels or onetime there in benefits that change I won't

So with like that additional we're redeploying depend wealth I faced and that going hard else lenders with is to for the some people because upon get we managers more us that also and that that conversion, same everybody to core feel the mid-XXs into number. going hiring trends yield cooperating the range as but commercial we We're ratio, our working again, on. does. get But efficiencies we're that efficiency growth it's want. much expense to comfortable The the curve something

Operator

our And from Raymond comes from William question next James. Wallace

William Wallace

around their utilizations in XX.X% deposit year? I up accounts? that those spend think, indication behavior could any down commercial to bounce line Are customer the you confidence you any there increase? prepared of lows. you talked change wrote start half your -- that, remarks, utilization would at in historic Are yet that and Todd, seeing credit Is give that your you seeing the back being I about second in

Todd Clossin

of that back. cash talking to our big regard I'm to spent say as have bottomed. it's investments. to They're to little Like probably not estate things the on bit that. different. I'd a commercial as little side, pretty out Real time real the the making conservative. and usage But market more customers. that just a is seeing have a amount they're where doing up fair utilization I would I estate confident bounced things still the side of like but take C&I say seems well with there things, point

I yet usage you go And up you're So the we down deposits to up haven't line come deposits. seen see happens so. the next in the would significant expect the any to But take going that in in start line see take or quarter hopefully, or the up. before

William Wallace

to think more Okay. Agree. balance kind concept do purchases? manner, deploy whether liquidity. continued this see of leave And you loan liquidity of you system? your some bond just in and that start sheet the is or following this excess of portfolio think that maybe kind do likely that the on you stays on it's liquidity Or it modeling, we In

Todd Clossin

make the same there. because I can I you're liquidity to think deposit much at misled both. because you've It's as share well, But of market there's new too. by everybody. focusing net on We've you account got big actually to growing get growth growth we're out quite make time, with sure kind so sure think started frankly,

So liquidity stimulus everything and to I'm I reason be and leave used doing It's of been spent, you over part of mean the that it expect should else. time. is for and that would because right? PPP some

over spent time, pre-pandemic. lot than be that, expect it see to really more that. much credit on see out same cases, opportunities meetings and terms the time. are credit growth out in should working particularly standards coming aggressive will really be maintain that At We hard have focused lot we it the growth So the a there. loan putting the of and being estate We We But into I there. on of that side, have. lot quality spent, efforts are real -- that a these and growth opportunities with on of a are

strategy going banks, banks then banks are them other amount that liquidity, first, some a strong we're some and would opportunity on for put big significant rates of where back say we're little deals, work not money but out see changes. into month But at a we it's in doing We of those securities opportunities return, waiting because to two with terms to too, where third rise just capitalizing we are opportunities more see rise. other on Loan working loan money be to into that of of them there. the of but don't of because going customers where structure things, rates hard the that things a still the these out see of that those kind with put sticking we're uses we're those are some we relationship as all come borrowings and between of be now. me, not but To we yielding want the for when this that some well, aren't right up, Bank and just able that no some prepay, I some ago, We're point that, XX-year are that. deals there rose there. a and are sitting can So and it's to down big wholesale greatest things, back got prepay come to at Federal some seeing do for of decent we've we'll use to Home in too. or growth -- second, There

coming that fair we've a -- of over next we're amount year. got up the So

William Wallace

growth kind single talk net does the would seems And the of, optimism a from you core kind about And moving margin of I back helpful. been lot the That's you just interest growth what it half maybe low the when basis, of core the On excluding like in about guarded of Are digits, loan about us PPP year? expectations, in half we a of can parts? Okay. second there's of kind think year. assume loan the help noise talking and that of sort say, flat?

Todd Clossin

Yes.

-- up point again, year. think last production the the production I with is highest in

Our highest up the point XX% year, is is of last the pipeline the end pipeline and in first quarter. over the

I good, feel feel on that. good I So

is hitting is I secondary big the talked cylinders sitting -- to need because on out unknown, the payoffs about we the liquidity real hit think earlier we're this, estate Wally, in on commercial we too. the market, the

the don't what even coming So be And before I aggressively to they're third and fourth those quarters. taking guys know stabilized. in and sometimes number are in really going is that properties,

X.X% in the growth difference. normalize it a negative delta million X.X%, have a up positive just payoffs have -- That quarter $XXX estate been last us know was have would I positive. And real assume ex-PPP down a I a it but that we would quarter a that's and us think, about what to the for from past, don't taken quarter. up we to, loan taken still than would If jump nothing you and had had similar

happen going don't that. know what's with So to just I

I -- If up another you we to month in get growth payoffs if really that payoffs these and part again, loan if don't see for normalized real think levels, that. estate heavy number, but secondary estate going then if more payoffs you commercial a flat are, market could get the we to real could impact our most commercial

William Wallace

and for you stock on you continue last to with Todd, one back in been then aggressive trading it question in buybacks, nice and the Thank there quarter-to-date? wouldn't purchases it you third you the anticipate as chunk the any Okay. aggressive I reason bought have currently where mean, a just that -- second How that be is? any there to is might be quarter. just quarter is

Todd Clossin

to purchase and Yes. are talk his about group [indiscernible] I'll to let We the XXbX-X he have Bob managing to blackout. the quarter-to-date us did watching and that that. because continue purchases during allow

So I -- I still buyback have We we've buybacks, activities. with through that -- to ran the we've will was this know authorization, we that had, when even even earnings occurring. with even with capital continue think we build the the

than lower So of asset level group the risk-weighted capital in peer and we're peers. already levels, couple a our on our one run we top

shareholders couple opportunity more variety years. but profile, to capital, next risk lower got return a having the a to we've our of through means capital of over So the know we

we'll and on. this capital capital very run through recognize the the fact that we'll something got later position, we've that discussions with we a this So But Board obviously be that's and robust year. we're having in authorization, work to

Robert Young

Yes.

of mentioned pace buy through the blackout. past, basically XXbX, haven't under we in July the So back that did month the that buy same we done -- -- Todd in the

And did did us the the to for engage remaining time. And outstanding. amount so first towards allow continue we that to that move that's

shares that. July, will of it million, somewhere X.X million at the was at remaining. X.X than So be the And end end the Wally, quarter, of it shares less

forward, prepared average in to price continue opportunity aggregate. It's great a dollar I the remarks. mentioned going the in as cost of pace And so we'll terms my at

Operator

comes Our next from B. Moss Riley Steve Securities. from question

Stephen Moss

Todd, talked numbers little competitive about a there. maybe stepping all very a from environment back the bit, you out

of you rate your competition curious, these structure it thinking or kind more days? is how a that's And kind affecting seeing of are primarily here? wondering Just on

Todd Clossin

good we're Yes. thing are And estate to Rates while. That's see guarantees, X% things. been little -- they're size on of a done those for was no with projects kind real didn't or years XX concerning but is they've it it pretty no -- deal apparently, done. for fixed The it, a getting starting do that's equity, we competitive for a structure.

bit. So little that's concerning me a

seeing our and a still think relationship I opportunities, very we're we're much bank.

the on to going our regardless keep standards think with I the continue that that. one what's and we we've But is where like of think the throughout the build downs. of things I So them. got relationships, those we'll appreciate consistent And pretty on ups I customers credit

borrowers just not in we're going frothy just to I'm go you of and just profile cup what risk can get We of a So we our to the to some little to transactional going it's But get X we're the And seeing positioned terms growth, not banks, what kind get we right those of our think not now tea. that's growth. out in right really think and well there. -- change markets. and

Stephen Moss

Right.

the positive, but and stabilization up, in in is year? later of pay this get obviously thinking balances you environment, about to that's I a loan is realize overall pretty just to And then terms that down. in And [indiscernible] pipeline Okay. of terms kind of significant could just balances

Todd Clossin

growth had the but Yes, I moving of into I was markets the coming think our loan And accentuated the Kentucky. out you increases across more seeing markets. pandemic. Because and And the a we're to a there it's payoffs is depend well, there, growth. seeing it board, having, higher years answer that markets primarily a to impact the if it's some the Old Kentucky economy if remove strong in headwind part markets, -- -- bigger Louisville, of gave you Lexington, of was market definitely have and and are more things us could. lot in X.X Kentucky bookings you pipeline Northern Wally to that think we're ago, of in secondary then with forward the then that I Maryland part can in -- really in high-growth having acquired Again, it's Kentucky markets that's We and the see those Bank acquisition get kind it's Line as of too. think Maryland nice I the and on bank

we growth would like single-digit to validate out grower So why kind to us kind those a low of to environment, the me, coming into and more normalized mid- expect to mid-single-digit markets we of to But numbers. to to I acquired prior single-digit a and into went upper markets. that of those the would pandemic having at pandemic, see the starts were

So acquisitions we while to those that me, that proposition of the core other have. we would and of that value deposit we the through have I changed the the have real that's proposition mean, value base as the still keeping the strong profile legacy growth company well, too. into markets going

out. I thesis pretty secondary liquidity somewhat are limited will that with that's on But confident play out So by going of be I'm going there. the of the that. to think amount what's market we and

know be. don't that's of share So when growth the exactly to I going get I it our think we'll when comes. just

Stephen Moss

Great.

the then Okay. on the terms it. of purchased I apologize was rate this missed Bob And in for a I quarter? if securities What here, question and

Robert Young

maturities cash and points plus so. about prepayments than XXX that through XX basis or or XXX higher around is was yield flowing book The

Stephen Moss

quarter, And XX Okay. that here? in again Day call towards good That's this I'm it, the bps for XX, CECL the over potential looking at X, -- XXXX, reserve, wondering time here getting just what's of the helpful. reserve reserve terms then back just here, ratio release

Todd Clossin

it Yes, in comments lower down want jump to well, make comments the pace. we'd to too. on I'll come may expect mentioned continue at additional He reserve in to there. a but Bob as that some his

that peer in few reserve that big And peer we're right we're would maybe we this variant we point. come above feel very little to now next a come levels to expect levels, down we right not would think quarter, continue bit quarters, reductions impact it's we've with something to but it down. significant unless over second like which at appropriate. on but business So seeing continue still expect today. and pretty had the a it first the we at the We But got to happens there, that, we're not, or something a out

how too, where get think takes to X I it up interesting think, is been on it back would I a end very to what happening, will Day CECL, have question. long though

think to does I continue it that. bank. we're reduce. any pandemic to room conservative also lot look don't there for like have office portfolio We I got there's change to issues stuff how like things but the of But a you've at speak think and a to of,

You know you guys us. that follow

I could X of to last pop that, may than it take year the levels, the Day think of pre-pandemic to it back to that happen continue the us up. but to to don't the one contour it's down, to anywhere hold So But want issues quicker that we because we'll of rid be X any else get going get just the too. be of but piece make X reserve final that or isn't to sure there

Robert Young

right, on think, XX the Todd. Day I say, basis XX/XX I the And just all the because years. were, over of acquisitions points we want we of 'XX, Yes. done at X. to in were, we That's have absolutely mid-XXs

down some much early into of year it's as X, a going in experience some to minor going level a assume sooner on down then move do and of closer closer kind makes we could is amount I sense. XXXX. would just to the see remarks negative to that to billion would if And think, good mathematical still reasonable think of balance billion for just Steve, forward the X late projected we're prepared or loans, forecast than think And sheet but just get how our charge-offs. plug lesser have don't our but, but mid- provision some quarters, the kind that guidance in $XX the I was it think next high-XXs might X% that I to think we in begin anytime in model, with I I we first into of going we see we X to have X.XX% So getting than sense and any, months above that XXXX something we're get soon, But one mark don't to I $XX still, to ago. provisions

Stephen Moss

And one then for Great. Okay. last me.

Just for yours, a and markets on updated in what's M&A, been of discussions guys? of kind of just of transactions there the level number you thoughts various curious,

Todd Clossin

it's Bank. conversion right last going into and in amount been Old lot question. of a on and done was gone Get work. the and has year to be well. and get pretty which quarter that's our did, third a We've Line We're years, about this that we Old of Line couple effort lot things own very, and all of the really No, was saying assimilated, the very of significant XXXX gone the core a Yes. of that XXXX, good about work consistently in top here conversion.

looking have core I don't But levels really So seems near the we're around both to capital past pandemic Old Line be fairly but that in start could and acquisition, we of the or years like getting have Bank X conversion and here anything the ready opportunities. kind coming near and term, that focused the wanted to future okay. that stay since we entertaining with the yet. We X.X trust, to to years management, people, Kentucky haven't on those upon markets. of acquisitions marketing of some things do earlier markets and the trips. done wealth those are and about done growth to to we into get either securities some the don't anything I of want that, in some Maryland to think that execute as we made the higher because make to to past mentioned need about be like We start in we higher or continue and to

got we But past if to year XXXX. what do that we later to think, be But found similar some a or would, then seen opportunities we've currently like think XXXX without looking M&A. anything. So something we growth be the this any you've at or I opportunity in right entertain us position doing the that would organic in good into not

Operator

Our from next Stuart KBW. question from comes Lotz

Stuart Lotz

you into held on this been quarter, of How you recoveries criticized reserving pretty classifieds but Most able play charge-offs, your looks like point. do It steady this to of more this overall credit. and lower you'll Maybe my levels? were and guess, at had NPAs net quickly work down kind just net questions quarter. and that answered have those one be future does I think balances how

Todd Clossin

Good Yes. hospitality in been we or I'll looking this. terms how looking quarter really has question. being C&C the X. And service the Sure. one. in Yes, here pretty last at we're take as and We're conservative of of we're terms was look liquidity. -- of flat coverage Again, portfolios. mix debt the for at our what

the of out that eventually a much towards process now months back debt come a associated service, of get liquidity traditional that. down and you grading pandemic, was with in ago, it you're more portfolio to year all ago, risk X weighting As

side meaningful of it. a degree. it next the continue C&C that an be And anticipation to have couple walk the over next but would we over So that, impact, through improvement of quarters on is does the see the the would we couple reserve quarters, some of on to fairly obviously, improvement

lot quarter. this net quite other look to And It lasting see losses got portfolio, know still any benefit, hospitality. That be we a frankly. releases actually of charge-offs, have our we what's And a and what have move. basis the delinquency a So is expect in I on And the banks the we frankly, did those the get in on kind being the points didn't be I grading I XX does careful a of would being them looks quite at good. where through it to it's and it moving I pandemic But reserve we're on posted of think at just C&C appropriate. little -- and bit a this good. started of will it already of any of number lot think same. a have hard and of recoveries NPAs We tailwind bucket. But because side impact of really to at, it's look

Stuart Lotz

related you that do million? $XXX that the is have to of hospitality guess, And I the mean percentage Bob, I

Todd Clossin

not hospitality you, to of million. XX, or I believe you've around that, the know, right. to get you or related. $XXX more that little check We'd XX but I'm I'd don't have so majority. back not. double be got I C&C a would the on that. loans. love John, or it's if sorry, It's I to it's X/X tell bit would that's No,

Stuart Lotz

of a And maybe sell Obviously, year Great. some as growth just PPP number remaining as their more PPP balances, me. on the of organic far? something all just entertain or on outside the color numbers. elect doing of Would against so expectations any that. doing seen that and that something would to at opportunities that We've your just to Okay. thoughts just one for peers focus you I you've there. Is growth this appreciate looked elected well love

Todd Clossin

it's I or and to leverage we've Yes. it, nice the off to got a to bank was. not try obviously, doing too at into full of I'd them one things PPP mean against up We and those We about want of community it relationships regional I guess, this emerging picked somebody a process continue sell say -- else. would being, through prospects number to like point. to

to be is long-term to and our thought turn try that customers. mine into to would continue So that them

Operator

question Inc. Our Preston comes next Stephens Brody from from

Broderick Preston

couple of points of clarification. have Bob, have ones. been Maybe lingering now, expenses, Most of just I just my asked on just the of but a a couple questions by

the benefits you NIA trying So I once completed, is potential are ongoing of do what costs a sense So forgiveness be? to what currently? expense for might guess, have PPP-related I'm gauge the SBA in the

Robert Young

direct through paying recollection third-party is provider forgiven technology SBA. a that to the $XXX about the loan portal from automated per My goes we're that

from upon FIS loans kind of it in and So many had how of hundreds month. it's X where $XXX,XXX with We've been other couple are forgiven depends of months bill $XXX,XXX. months a any

But costs. as mentioned the trying think overlap think So ballpark, that an prior here to that might the but to this, in of what little quarter methodology. enough an with I in to PPP actually difference we're will from third charge. estimate be bit of on opposed a asset-based the terms offset account-based be to going conversion, I in Todd that core obviously, charge we're There that, remains an has

lenders Now against the they of the then time, both and a those were deferred they fees upfront Round costs origination through Round $XXX net deferred X. our costs PPP also and And income. X portion fee included at net a as come interest but back

larger the platforms Not time. come will over think FIS IBS. the new Internet from impact digital impact some core So of and Really, conversion platform, the same from that. a to the converting the in at mobile substance. And I we're and process big on also our

the behind looking and items quarter FDIC So those $X.X franchise us. onetime X what forward we having to is refund said that tax million amount. were this from

that million range. of you $XX So the puts kind in

our that increases this of with us level that in we experienced to second quarter. summer employees, the as above so puts that kind little adjusted And a bit for

Broderick Preston

know Got the closures they cost to what the it. X know I are? said And you do are savings branch minimal, but happen on you

Robert Young

between to savings, to go of any folks other well most branch the reinvest in digital as that themselves. you the into assumed or are another already and last and about going our And just of the those from most restructuring the that. to those that in branches 'XX $XXX,XXX termination banking 'XX We expenses couple, I to $X of put lease back back the anyhow. the we there'll worth due core both into charge that branch the X that be of of reinvested wanting employees would the $X or million, $XXX,XXX of get think about fees. But anticipate of experienced assume We've closures should where of we unlike franchise Well, quarters don't as over year closures. couple next million immateriality terms onetime half of

Todd Clossin

was fighting that's same going those make struggles those Getting everybody to I Yes, point consolidated to the into branches employees, because be absorbing other so the is. employees from things areas. or that, we're like

Broderick Preston

Got it.

But but gave around me. versus disclosures And one part it I I remarks, the prepared commercial might caught appreciate fixed Okay. loan then this. the I of the something portfolio. on you last the X, regarding in variable for missed thought have I Bob, Slide

you that So know to that their those of But are you I floors, hikes that mentioned John of guess ask, you the that. for be needed levels, wanted call billion off the XX% thank has their of you to I out number to to $X.X currently floor do would them happen at get floors?

Robert Young

And also that's than give As more a or at bit that points about bulk X/X rated that to matter rate to total. the the similar around be of related basis quarter. last that's that some Brody. floor are take, a remainder of There's to X%, time $X.X XX% so and basis And of less -- about and not XX is XX of -- that would little or to fact, points. repricing, related the it's but billion

Operator

Our from D.A. next from Davidson. Gunther comes Russell question

Russell Gunther

Just a please. follow-ups, couple of

On the Todd, more hires a side revenue loan growth of number of mentioned recently. things, you

on-boarded those pipeline timing as get getting you've bringing For up in they books? upside from on-boarded? some Is on are and and up mentioned the speed fully over they there the commercial reflected fully to based and or ramped lending side,

Todd Clossin

And people. wealth securities there but ramp-up those and hired we securities year really our unrestricting part couple well, some markets to newer X.X we've growth kind months we the of did there. Series of as this the which tied the markets -- about lobby brokered commercial got a we people, in That's access, some people there's of X too. put also management, the in It's ago. Yes, that on side of in hires the

Actually, numbers that been the couple So their strongest we've in lobbies really unrestricted. of jumped. a numbers we years had have have since had in of some the area

ramping that's too. well, as So the of up in process

people -- of that, LPOs I opportunities they're hired mortgage we've and going Northern a mentioned process On the there same the in -- just couple on originator, but through the we're still things thing. just of loan for coming the and Virginia just with like approvals they're board.

of growth seen So I kind any even from them. or production haven't

lift. some expect would see I to So

Russell Gunther

the then Okay. a helpful. Great. expense That's on very And of follow-up things. just side

Are you mid-XXs mentioned line? to that's the of about to reflected talked any the or bringing does quarters for XXXX? that Are that those range or based You quarter event. efficiencies a in drop spill and bottom couple they next conversion of the currently the that on core ongoing timing, expect into efficiencies you third

Todd Clossin

Yes, area. things. realizing a number of number kind It's in processing included in really the we've to We let's number. items as of, year last been it had the of a does. over mid-XXs those some We've people started say, of the automate

think We're X point. at X in because have down been a I we dozen one automated. or there people to it's

ahead able staff, we've things So through reduce like to the of that some conversion. core been retirements,

of those built some already in. expenses are So

where term, fee we're come future on Bob the of longer kind to a customer real is, per charged in as benefit will the mentioned, basis. think I processing in

will I in on customer So just of on versus a very capabilities. size. in that of zeroes -- things, along stepped strongly charged profitability number getting the the up comes the being think really each There's the of with past off conversion asset imaging core focused

in versus a the That's significantly over own homegrown thing really that had we payment drop transporting payment going Zelle source organization. all place. not we're So put the paper to as adopting organization. down We're our in

benefit So too. be term, think that all systems didn't a talking past, got to is also there's you've now where there, the talk systems are number that to efficiencies each the of there's each longer on these revenue other. to going side other, where these in operating are all And I a in

kind hands the able a next hate I your with core upon their that based data to -- in because customer to a this you target meeting it's and transaction from do of are So what's and the of customers, for intelligence our needs terms being making But knowledge enhanced the use best product artificial people all. ability the term catch in information sure be greatly to we've of of to what it the put that operationalize and going their with conversion.

that the real-time is that done today. have don't of we activity obvious we most and it's things to One go

in picture do And that's a take Well, and table ahead your through it to be you of the to time. deposit, up it go day. going your your all and it's to this stakes your once want doesn't conversion, ATM, nowadays. you phone accounts if core then until So show go put next real

to improve think because costs I see to improve They're experience. things but think on were and are don't and hotels follow-up loans. about the these C&C more are asked going I things allow C&C XX%. in of going coming hotel efficiencies to out that revenue, Of of it's a over earlier question of that improve have did about some side So bucket are customer us time. efficient really the XX% the going be cost it. the to percentage I just loans I any huge

I mentioned that's accurate. It's and XX%. not think X/X, I

Operator

Daniel from Boenning and from comes question Cardenas Scattergood. next our And

Daniel Cardenas

the I the on information here. all get good reengaged appreciate as I story

of follow-up questions. couple a just So quick

you see Todd, had components perhaps weakness think, loan I to portfolios. some you mentioned in the beginning the structural of that were

that's Just of that the companies? wondering combination more compete you a if smaller two? coming bigger against kind from the Or is of it is the companies or it

Todd Clossin

smaller Yes. they're relationship the it on is deals, I've It's And is of you right? So a some larger more a of more think dollar what I oriented, get the more of loan. part of side. million seen much couple

You you loans. million, type $XX million, $XX $XX of larger $XX to be tend million, get in But the to up involved the that. bank million the only bank,

And I fighting And customers them do what through got on also we're on but allows relationship of I surprising, we are You've our us versus And a got to that But over bank. more talking seeing who's see risky I or the we're we things a X think relationships with best we've the structure haul. tend them the it do there. and and transactions. be hang got at or in to way want a we're little some I want tend to think that to because think in won't. win on those larger knitting banks our done price just customers to to to little that When to competition should best the that stick say. the I something, there mostly we'll don't, that those that the long do structure, our it's our and guess, over it. the relationships We least past we've

Daniel Cardenas

on? actually And be transaction. be geographically, would understand do would it. I another could the year there it focus on looking one mean, M&A just or more and side, then to Got given your I is area any you that But institution parameter current or acquire? a And size what's the you size, before potentially you off that

Todd Clossin

go approach kind We still see like Wheeling, to that has markets, well like been X-hour all employees. X-hour the time us. for go from in we'd the the drive time past And in see our car, drive which the that work of seems get

want Virginia, drive that markets Indianapolis, be would already that be Cincinnati, would to it those and markets areas a today, Indianapolis. Maryland opportunities, Pittsburgh too. X-hour the markets within growth would in Columbus, be not areas in. we're Northern lot higher markets, a of time. bigger be those X-hour be get of But type within would all Lexington, So would time that that as all you Louisville, well, area, drive

in we've it probably new is gotten be that hard would only size we're be markets or what would anything we've kind at. as that XX% up probably not the we'd to that And think, it of past. So in And looking goes be size-wise, of our the so, I number done bigger, today up.

of our So focus. that's kind

Daniel Cardenas

question. last then And

And facility Can update are you of last, Ohio. me you in cracker not left a there? that's about impact lot an I what do when talk going was I there guys to think think the economy on that? give it, going have on to kind of build they up you if going

Todd Clossin

discussions tends terms natural not but when to Yes. It's to it's going of debated. a are It when hot be a still down, get being it's prices hot discussion still in and seems it up, possibility. gas

too made are Bob, and we nearing probably to will that plant from are? County been and not that's Pittsburgh, in investments indicating Beaver going completion. far -- lot already, of The there's that Some The it's happen. up happen. it's cracker it's when is a up question

Robert Young

strong online. the a market goes acquisition. Courtesy share we county. it XXXX, of very have And in ESB Beaver

Todd Clossin

Yes.

just it's the but additive a commodity pretty and ups used the downs down happening Wheeling prices. legacy with it's pretty already. -- not to are the healthy, would around markets. upon that be strong that plants cracker our happens, community we hope what we and it different But in based there So have We're area when Wheeling to area things

tend when get things announced. get they So to overbuilt

of a in payments collecting be push then will it deposit it happens, we're But bank the seeing additive activity benefits into homeowners won't. happen, of that us. flows the if all it it for there's So are up If a royalty deposit of amount great significantly, the is doesn't it on and through fair side.

Operator

back with to gentlemen, turn question-and-answer closing ladies I'd ending floor today's like we'll And over and Todd be that, Clossin session. any to the for remarks.

Todd Clossin

Yes.

everyone joining here for to real person the other in to our we'll each Just future and a quickly, want events. chance I at one upcoming thank -- see us today hopefully get investor of

on the for chance please the Thanks. get we'll to yourself, dance rest enjoy stay together. summer. So a But our of get hopefully cart safe

Operator

that, with do We conclude gentlemen, and thank today's presentation. joining. you ladies we'll for And

lines. your disconnect now may You

Robert Young

Thank you.

WesBanco (WSBC) 29 Jul 212021 Q2 Earnings call transcript