WSBC - Earnings call transcript Q2 2022

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Operator

Good morning, and welcome to the WesBanco Second Quarter 2022 Earnings Conference Call. All participants will be in a listen-only mode. [Operator Instructions] After today’s presentation, there will be an opportunity to ask questions. [Operator Instructions] Please note that this event is being recorded. I would now like to turn the conference over to John Iannone, Senior Vice President-Investor Relations. sir. ahead, go Please

John Iannone

Weiss, non-GAAP of in our morning. yesterday will conference SEC the like to to information update Cautionary call to These WesBanco today included reconciliations call. and only for the of measures contains as filings afternoon, and Clossin, Good Financial year, and would quarter Today’s one of to I speak available available Officer. turn them. are Inc.’s the statements section are about on as XXXX statements and President call, materials. and issued Dan undertakes Officer; Executive earnings are Leading of our Chief July information. Vice materials And you. no this earnings-related our President All WesBanco, Todd. over Chief which XXXX, now website, welcome investor well archive obligation second Todd? Todd Executive on be Thank other as forward-looking Relations materials the wesbanco.com. website Investor call and XX, our

Todd Clossin

everyone. Key John, call are then today’s credit on institution financial good WesBanco balance and operations metrics. update strong a provided sheet morning, XXXX of results On second solid the quality you, Thank our an call, we’ll XXXX, current and well capitalized our takeaways for the from and outlook. review quarter remains today with a

supporting risk as leverage positioned long-term our successful very strong while sequential teams well We continue culture and opportunities execution to upon strategies to make while to future growth our quarter opportunities, us advantages unique generate built ability appropriate strategic focused has and growth. also for our managements. of our on investments credit strong they remaining loan long-term expense The enhance

pleased very during second with XXXX. of are our the We quarter performance

the our of years. past the few demonstrate strategies continue we operational implemented to As success

remained our when XX, diluted reported excluding available per share XXXX, quarter net million $X.XX and to of exhibited position For remains strong through last merger charges. strong appropriate shareholder roughly and earnings quarters. management, while M&A. expenses provide of And restructuring repurchases, enhancing consistent shareholders we and management few value $XX.X June of dividends have balancing the We income the operating includes share after as and the which to flexibility tax ended common financial effective continues our capital expense capital

commercial originations. was both driven and growth during which mortgage C&I Maryland sheet commercial growth of our loan of across growth which excluding our M&A the balance continued we deposits, portfolios. X.X% we both balance based real successful remain loan half loans And and it. of if sheet While the to loan we reflects retain the we year-over-year focus upon opportunity and strength us, The loan found reported efforts was as our and the of strategy, story act defined a we our growth, demonstrated first strength relative This which fit the demonstrates increased increased not in total quarter broad That is footprints. growth XX% annualized officers including still XX% annualized. our of year deposit on nearly strong across price of appropriate and to sequential estate was our the in more would Kentucky top hire for ability in this expansion higher major into and at and that commercial categories. was right SBA our markets portfolio well markets, PPP loans, key by Total execution The our our loans. when growth Furthermore, excluding both tier loan very strong residential when total quarter certificates X.X% opportunistic.

to eight million quarter. roughly percentage our roughly which is historical upon from the to production approved teams points good second of see March million range. loan $XX line $XXX is our million XX, our record of in commercial XX% lending to based below continued teams still approximately C&I our commercial utilization, during production generated $XXX We commercial pipeline gross slightly

do loan Kentucky as our pipeline committed XX single-digit mid continue of growth, new to said, our pipeline not in XX% Maryland. begin remain helped time strategic to growth in production the has target sequential opportunities, offices teams we lenders investments million generate similar to next operating leverage. and our While quarters, That roughly $XXX that as upper we our anticipate recent at and loan over strong business find of few commercial relatively remain which to June approximately with positive

In addition, we We for programs, continue the two long-term last did not built the have boom, during we which to overstaff growth. lending invest in refinance our years. residential sustainable

In fact, to our across continue make hire we footprint. strategic

As our and XX% for accounted approximately easily and team demand refinanced second the home residential pivoted originations. quarter to mortgage served which purchases, then construction our of

has originations team subsequently and trends. the While our their many mortgage in providers strong decreases operations, adjusted supposed other resisted national residential significant

to $XXX Our quarter, during quarter a of of the which XX% million and team originated level first a was the comparable from ago. year the increase mortgages second

Our the based residential $XXX efforts. pipeline mortgage approximately hiring near-term million in production our should quarter-end of remain relatively upon our strong in

I’d offices two Nashville Indianapolis During the we quality a managing in high footprint. we year, like mortgage investments on financial of the our will strong update through we’ve to half and expense quick building leaders first funded strategic months. added have next control new loan the in who the including over making center be few XX been discretionary teams have provide which officers, our

that lenders the coming to be six additional first and As with with have the an we additional continue months hiring us as over opportunities top with of the we’ll month. Further, of additional today, hiring to an start XX accomplished we commercial plan arise. tactical performers our hire during XX XX

Virginia production Cleveland, loan well in being Our Nashville Indianapolis, Northern offices received. new and are

leverage and coming commercial growth continue they to their to teams, and residential look operating As in forward build to our lending contributions their quarters. loan we

markets, carefully balance firmly I’ve growth within previously, focus the As our we proposition will reward risk quality. credit and remains both our growth said potential between but on organic

year, our Their allowed portfolios entire core organization customers. to better and breathe As national opportunities. our so we included as our to prudent banking through the have as this daily accolades enables clearly and live believe supported developed banking unique strive shareholders. to system to remain the extremely have year. strategy foundation We far metrics I for by tier our us and conversion loan positions us service for provide well strong of employees long-term credit decisions future make our demonstrated strong receive us they continue our that our continues long-term advantages top our pledge to we numerous past have which efforts to generate proud

both are trust, the our by bank recently being to in employees recognized the banks by our and one the bank as only the number Ohio, closely, WesBanco trust financial we customers, honors one named XX being privileged our world’s in to best and Following being top voted as honored one been receive well and be America’s have of to satisfaction mid-size for in customers of the service. most two bank companies voted scores to again, top the CFO of rankings dedication country based was success, customer over trustworthy Weiss, Dan an for advice. financial satisfaction and number the effort strong conditions, our we’ve turn service, and and services results across now outstanding our I employees. to call a would update XXXX. to second for and outlook testament on for quarter like our Dan? Kentucky. branch for digital customer on and high are services, strong These These scores were the received terms as and survey, including rankings feedback financial

Dan Weiss

and Thanks, morning. Todd good

while discipline loan quarter originations, sequential our mortgage strong margin, expenses. a that recognized and grew growth, interest we improvement quarter in year-over-year robust deposit the over base solid During residential nice net maintaining

income oriented begin and make on we growth important long-term additional investments continue rate expect support improvement impact growth fed as earning to assets. to increases the to We margin recent loan interest

earnings As share the second per of $XX.X quarter we and the $X.XX per net income available and share of diluted million release, month noted of six reported yesterday’s GAAP net shareholders of earnings to improved for $XX.X $X.XX and earnings in period. common income million in

impacted and our commercial to the a $XX.X mainly higher Excluding X.X% billion. as assets of share of $X.XX year negative was Total of four note family strong and provision total and efforts to of $X.XX It’s first loan the merger of of respectively. of by Total to second XXXX provision mortgages to our last favorably total the quarter $XX.X share. included tax were the loans billion that of increased six per ending quarter continuation per XXXX by portfolio June or due and charges XX, to XXXX savings. personal and year-over-year as XXXX PPP liquidity were favorably forgiveness. securities of excess of and months related $XX $X.X three net $X.XX months for tax and results teams XXXX restructuring compared to a $XX.X securities related XX, Loan second $X.XX consumer share reflected balances billion the per by sheet, customer’s $X.XX one respectively keep million lending balance $X.XX June share of negative SBA important more performance net partially the offset on and for six or residential million by per impacted

quarter-over-quarter Todd was base on loan growth real the basis. we quarter broad mentioned, a the story this generated As

approximately their The growth of And record bearing non-interest a in rate eight PPP deposits loans story our X.XX% and annualized XXX in increased year-over-year securities as of strength loans. portfolio despite was to year-over-year our lending As XX, and Further, of margin $XXX in cash sequentially the deposit of which decrease loan increased interest to as runoff represented loan the demand XX.X% estate of Strong in of deposits, during total of quarter funds $XX.X XX% reflects deposits remain in federal total as by June sequential June three point months, growth was points based of on XX% well the growth total XX, basis real broad a net markets. excluding last X.X% and growth represent excess teams or X.X% through XXXX deposits as This deployment strong the reflected basis million. did loans, savings. a total increase which well due key second billion, driven increased XXXX. as sequentially, growth. levels CD fact, basis successful of deposits, total which as total

accretion deploying by with improvement expectation due the the from X increase points to accretion driven prior growth. X our during pleased quarter-over-quarter SBA quarter, point point basis pricing PPP and loan increase. the are of beginning was especially margin points fed This margin to loan excess the purchase XXXX, rate points in to basis excludes than of anticipated XX our XX basis support our compared We’re cash experienced rising was XXX quarter during basis basis of X.XX% greater and in improvement see we advantage and X our respectively. which increase that to to base. the X.XX%, to X Similar accounting robust rate basis points, of deposit of core second second XXX to the The legacy we also funds environment

beta fed this funds rates to the as basis total year to Our negative point on date XXX so a far X% compared in deposit basis year. a was increase

lag While quarters, we bodes rates. as to believe us again, be coming still we early rising the in should in for stages, well this able the deposit

and non-interest net income million second a the period. gain lower million a loss million decreased in primarily down million year million of assets, in compared banking was net which income, $XX XXXX which to $X.X prior the $X.X quarter mortgage $X to due $X.X year-over-year For other of

should which roughly saleable we mortgage income well While originations was in the as a banking period, on up be ago and on other market. were $XXX as noted secondary on the a the retained same securities the plan. prior reflected to sheet Community loss preferences adjustable to million equity in flat as not that assets in of lastly, due investments as net rate And as losses net XX% into the construction, loss Corporation value well XX% underlying compensation year $X.X customer to million for production net of sequentially, securities products, The investment lower mortgage reflects period. fair held the Development compared year change it the the balance deferred are equity gain WesBanco of by

employee reduces million to the the a $X.X in obligation to same expense this plan. benefits While decline reflect

Turning to expenses.

in quarter, and second order support the our diligently make growth loan to discretionary oriented manage continue expenses important center we long-term network During to investments financial growth. to

merit quarter quarters, bonus related and Excluding which to a I is prior million a repurchase through the and higher of shares to option mentioned, quarterly XX.X% merger-related year restructuring expense slowing accruals. the increased that non-interest the million, losses. this to share and origination we second to related increase continued benefits return the approximately debt credit increase repurchase normal $X.X And shareholder June and expenses, employee our compared totaled ended million to salaries the deferred stock implemented shareholders lower we hourly X.X prior three compensation included X.X% for loan XX, capital from higher costs year, expense and dividend. in plan, offset as a two during securities year. wages months to quarter in addition down, wage and first the to of year-over-year the increase $XX deferred X.X% compared Despite XXXX last the million, $X.X or increases the Salaries due to

strong under opportunistic remains share approximately repurchase us will to repurchases share share future repurchase on and with existing authorizations. levels, authorization future capital volume pricing restrictions, Going shares position forward, the million combined subject to be remaining and X.X allow our

XX.XX%, June of X.XX%. well reported X.XX%, equity tangible of XX.XX%, capital total CETX we As of leverage ratio of as risk-based as and capital Tier common X XXXX, tangible XX.XX%, of assets of Tier to XX, risk-based X

hike each begins fourth two funds Now approximately basis pricing basis of points Generally the modeling points roughly the through currently some net by currently between peak to second quarter model on basis and quarter points thoughts X.X% basis for funds current and half steady the hike. basis XXXX. Fed deposit four XX we margin at In point each in hike, the benefit and XX I’ll thereafter third our for XXX fourth margin or per rate five quarter hold to sensitive second expect We we to to the XX increase XX quarterly and asset outlook basis an point point remain to provide points the speaking, quarter move. the in benefit interest bank for as in Fed basis XXXX.

We five lower quarter make yields an per earning points expect basis in as impact. continue basis rate PPP purchase increases improvements points be accounting by to accretion six to accretion offset asset to and

as coming we see deposit historically. the to lower benefit to and have from in rate from performed mortgage to the As balance our base the should compared to core mentioned, pipeline. we the beta supporting expect sheet hiring well benefits flows production our into new I this similar our low higher remix anticipate year environment rising be initiatives our Virginia, loans. provide as deposit in portfolio funding cash betas quarters by the peers in they to earning our securities reinvesting Further, opportunity offices Nashville, and originations Residential Northern Indianapolis, due remain strong as loan

record However, volumes production lower than will at the XXXX. remain during realized levels

markets the fluctuations to approximately equity origination impacted on move which customer subject the to dependent time XX% to we preferences it’s in are pricing. continue While charges deposits by fees market fees, secondary Trust similar benefit the remain production, expect selling should over organic on and into a income from banking and most as and fixed and quarters. few service in to likely securities growth. Electronic will last revenue range brokerage

While on employees. immune we as pressures, attract our we need are management, maintain and expense the to nationwide discretionary retain as from diligent not well focus the inflationary

wages, employee primarily inflation and benefits, and reflected salaries equipment. across As expected, from and impact our will strategic be the investments biggest occupancy,

quarter growth. employee lenders, healthcare a higher anticipate combined expenses, XXX,XXX are minimum during operating addition we our for commercial second beyond in seasonal loan merit delinquencies, under occupancy provision as charge-offs, increases of Based merit to more qualitative quarter year the factors third will as currently CECL In expenses macroeconomic various metrics, credit and pool. depend continued above reductions in loan for increase range. possibility X% and incurred a The including for allowance impacted that residential and as per increases implemented In by the increase quarter-over-quarter base to employees in to macroeconomic improvements we quarter a on with COVID, we approximately hiring wage forecast and add summer, and normal interest X% will total and on strengthen long-term potential our and hourly the the an rates of this factors, and normal efforts losses in our third loans as from industries unemployment quarter rates depend upon inflation similar growth these and to classified quality to the of balances, credit implementing last will criticized percentage the in future other including general, expectations. the well changes

to deductions between full and levels. our anticipate effective income subject changes and be tax XX.X% rate legislation, taxable credits year in currently we XX.X% Lastly, tax and to

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

Operator

question-and-answer come RBC Shepard with begin Instructions] We go will from ahead. question will first now session. Markets. the Please Capital Karl [Operator Our

Todd Clossin

morning, Karl. Good

Karl Shepard

everybody. morning, good Hey,

Dan Weiss

Good morning.

Karl Shepard

How’s it going?

Todd Clossin

Good.

Dan Weiss

Good.

Karl Shepard

just like then I quarter. forward, as a you obviously here to to mix of well? was It of I’d you guess that on balance I start But commentary can in kind sheet going of kind utilization a further next of bit kind quarter grants come guys. moderating around I line little of heard some bit? wanted new to the unpack the potential help And loan little very strong the increases Thanks. down for mortgage on and a hires production payoffs CRE for and that drill the growth.

Todd Clossin

as They of we the the CRE expected. second, were payoffs and year. Yes, lower, last third when fourth were high quarters pretty moderated would’ve have rates

us. for think run secondary year, And $XXX kind went quarterly this the of is million we a million a quarter that Second it market. to of million, normal rate to was $XX $XXX

market little into heavy year. the guess I secondary forward going I the think think amount secondary things Things Plus last market. kind I of into down the go rate to that pulled the So and increases a bit. slowed

So going be about more $XXX it’s is we normalized. think below rate million bad up, not mentioned I still forward. or On normalized. for utilization that looking It’s think at probably X% we rate C&I where to commentary more again our a in so

there hit if up to was more think we So a to on people normalized with lending think expect of it sheet. tends the obviously to think a may another recession take our were because some seeing we sheet to back balance that of that that completely But we our get partly going put a on we environment, more lot in of a went regard back that production arms that bit. I could did to X% there. rates go our up, this that. mortgage, construction and residential on But normalized XX% there’s there move start not there’s ability to couple already upside and that to little But impact the it’s we a balance And on plan to down a towards XX% stay range quarters and put our books. we’re wanted

going were being to books. of I that return see in think where what’s longer term, XX% our you’re XX% on probably we back to us to put range

X%, a really there. been the real acquisitions the rate organic we mid to to of towards, commercial historical We That’s when single digit, hard grower, was is we just, arms really upper that. for growth X%, changed time, market started we you know company for kind grower can’t really construction is in to to term we we digit that any mid out, of that a decided really, as quarter, companies. company. might that Long it happy have what in range, to we tried waiting mid X% long think X% and were with for second had it our It the single higher and look working wanted from and really a to to up people that’s term, haven’t loan rate We kind position at quarter low great, environment. the been And and we [ph] build upper Maryland growth think where the But we’ve So do see quarter. is Kentucky quarter single digit growth really go and a not of model customers up. more while in acquisitions to put on excellent. at look you have the to our a the that’s normalized the kind averaging think in one over rates

commercial materializing new on, didn’t and came now, getting was them So to another plan. first that the we then XX lenders amount see yet we on really coming That’s brought that lenders the just production are produce, went they hires why months this the And of XX up or year, those commercial to got six they’re right because markets. we of other feel quarter. part some from the that’s well, on of starting but so of a the we some in now. We tremendous of ramped

due I growth new wouldn’t the say significantly hires. to that loan in second the So large was quarter

think similar I saw the results. with it dynamics peers and was just to other market I And pipeline. type strong due of

So looking the to I’m forward really lift.

that upper digits, the would normalized in to going again, long-term that’s expect lot to be depend to have really just good to organic environment, mortgage new that’s think hires the to originators, hired depend the would upon We’re to Nashville and bode get going single a come a in on of that residential growth, in but on things. And to we be. side trajectory leaders well board, – But the think mid I economy. would we like XX of going the which That’s Indianapolis. going the that’s where we’ve for mortgage loan on with

Karl Shepard

and two kind into just of kind that assumption of is that that just to of reiterate five when Okay. I the you of, hike That’s I’ll helpful. seeing sounds back. going benefit to just Could like each any now. higher Dan margin you points step maybe then and basis know are of from rates? quick and this And upon kind base of But of or right off kind for you prepared, it touched kind in indication one trails your four

Dan Weiss

Yes.

related points are the say, basis So as point reflected be fully rate per to pricing. quarter in occurred XX the basis more the would those loan that our I hike second hikes five would in

those see into expect We in third the interest and kind margin of income then to improvement translate quarter.

hikes currently effect XX September, those three today and occur the quarter and every basis most in fact XX loans basis would our months. we’re the hikes that rate are those the take fourth in quarter, XX% points available really in just So projecting another of about third of points given our reprice that

to hike. rate hikes and So forward. begin related we point the basis cost effect, take we that in And to for as do basis when expect talk two the more time basis deposit we we begin that go margin margin that’s by point incremental to in those XX get improvement expect each prepared four impact to we impact quarter, point to that to to fourth fact a about improvement rise commentary

Karl Shepard

Okay. Thanks for the help.

Todd Clossin

Thank you.

Operator

question Our Please come next ahead. Moss will B. Riley. go from with Steve

Steve Moss

morning. Good

Todd Clossin

Steve. Hey,

Dan Weiss

morning Good

Steve Moss

obviously, think, as on with just the guys side, just are curious, kind sensitivity much of later for asset thinking maybe about I short guys It how you it about how is, off, are off hikes? the moderate thinking your in expectations term, of start not deposit maybe but you deposit. Maybe you rate starting sensitivity terms in

Todd Clossin

one’s that up I’ll little a and Because beta. fast. and low We’ve let very are several Dan frankly. last I’ll This last going got saw cycle Maybe really rate We different, hike start off rate then rates hikes cycles right? the deposit into. obviously quite through jump

same prior and back to to kind way. expect cycles at it’s of hard repeat So look things the

lagging of just everybody be lag I much big by or quarter. see But the bit. We but going that because think going non-CD the that’s get not a and any anticipate we’re to didn’t periodically. to forever, is. that’s so. But everything’s obviously, rate accelerated XXX happened market, still impacted CD, and deposit, second able customer sensitive we the probably out things to one the same first what between would else little in be had was really about runoff We million

material we’re change it not right? any but declines, and So really it, we’re So deposit real watching close. watching

multiple get I We we But to felt basis we and points we’re XX historically move basis to points more all. to raise XXX road. need rates the if increases than sooner would’ve taken we think going we before need quarters may it that today wait. down would or

We’re little the to we’ve shale-related gas see a it abundance prices to hitting all And of until bit the the got deposit that going natural feel luxury deposit to starts with flows flows impact do the wait organization. and I and we’ve and balance records. sheet an got mean, into

to afford immune. can But we’re patient. not we So be

we to add? you’d Dan, anything know have time. address it over So, we’ll

Dan Weiss

No.

deposit just I point second there. think you seeing quarter, not costs so covered it. I much increased mean, first basis X from quarter really to

Given at we are projecting fed funds peak to XXX.

that’s beta takes in about could said, you effect? would in to be XX% increase deposits. that XXX point XXXX. to So cost be basis horizon. you basis XXX some XX% time increase of When a effectively longer As increase And that points a a if were just use simple over a apply algebra,

Steve Moss

deposits kind deposit natural these on Okay. falling just days? gas of those the just Appreciate maybe $X, strong that $X, around inflows up And color. from are curious, shale, how with

Dan Weiss

Yes. million. quarter $XX million when rates as to They’ve $XX been are low rates maybe when million as million $X in a high up, typically to are $X

So in a are we’re upper million now, the range right to gas prices right that million now so quarter. $XX where natural of $XX with

Steve Moss

here, growth the curious where are seeing was quarter all given loan – pricing, and on you loan I’m just then volatility? sorry, what just now where rate And curious, loan Okay. pricing this on

Dan Weiss

Yes.

second that believe for you X.XX%. in look X, our you rate weighted it’s here average books was – quarter see So can loans Slide I on, if the we the put on

around came X.XX%. look right we put If what just you in in at was June, on

and So every the repriced course, of as and increases. we’re increases. loans direction, portfolio, as to mentioned, $X.X about about do the as continuing We of basis see months our of three those would to and those also upward about continue in half we XX it’s optimistic here reprice billion repriced to about obviously see I we’re that that points have expect rate the with second increases quarter the well rate pretty

Steve Moss

Okay, if just the expense I’m one on but great. And third I expenses guys here, did for terms helpful. in just quarter? outlook That’s of thing missed provide an sorry it, last very you

Dan Weiss

We second quite prepared is moving – commentary we pretty year and said about in experienced there X% like pretty normal of we did. things Yes, people. with quarter. consistent a bit investments of quarter the third seasonality in the There’s what increase which really X% from to to related XX% last to is

typical third going I We’ve the wages, a got that quarter merit increase benefit, And are of minimum increase quarter, number third the increases. revenue of hires fully got So in which from the coming a above the producing in number to are quarter the prepared merit of kind second all in weren’t in across mentioned that’ll hires to salaries producers and of about example, normal expecting for the salaries by revenue quarter. quarter. then second markets. impact employee baked quarterly in beyond a impacted also $XXX,XXX second pool. we’re we’ve wage in just that’s commentary, year our and And obviously not employee my be this

about in the million. $X.X an also third extra quarter adds that there’s day and So

through as equity comments benefits. just down. The out prepared our you So employee on were alone. $X.X credit I credit compensation the benefits, there – plan look would employee point to mentioned I then a the benefits. deferred runs securities it’s That one in that employee as related And at thing included million

quarter, seasonally benefits the seen between $X.X would just that you that and on the expense normalize historical higher to run basis. back expenses so if million second employee we’ve rate, kind add of then just you healthcare a So to were something in

on healthcare the to just time on highest be quarter the based deductible. of tends quarter employee Third

So just add are those And smaller the then increase. drivers call, non-recurring credits. $XXX,XXX this really about kind would but a number X% of little I it here, occupancy items the in and is had of net

I there back So, probably well. would $XXX,XXX add as

Steve Moss

you awesome. very the Okay, all much, color. guys. Appreciate Thank

Todd Clossin

you. Thank

Operator

KBW. Instructions] with [Operator Catherine Please from question go next will Our Mealor come ahead.

Catherine Mealor

Thanks. Good morning.

Todd Clossin

are How you?

Dan Weiss

morning. Good

Catherine Mealor

other of the fee year? been But fee fees back But half. provided curious second obviously fees I the the seems about but for go got if just know to thinking how charges have about Wanted your Great. how your commentary you’ve some any you’re It service back just you for like rebounding. on thinking outlook headwinds, and to you’re guidance. don’t just

Dan Weiss

Yes.

the dependent markets, relative is much that’ll equity upon to the continue on difficult $XXX,XXX So trust fees. higher pace any just are say, we’ve very that’s got to they’re right I or expect to in markets where fees end up. quarter Those quarter. would were expect be range preparation to typically kind the in much be and fee on fees would to of very quarter, quarter, in first dependent to equity tell trust income because things we are so so that they about the we second if at, probably you dependent a at where where tax other going I first would than be predict. similar very

much very banking – item expect that income. very of I to preferences consistent think the of $XXX seemed And pretty other in production on Todd be mentioned fees other that’s to and customers was service much electronic We quarter charges would the had pricing. construction. was mortgage products. customer And and banking of adjustable million those our to that second of deposit, be that’s really today quarter. here production as interested on rate big about dependent XX% second in We XX% be retained the those compared the

market. adjustable secondary into generally said, can’t market. be And construction secondary sold So there into which I then products, aren’t like sold rate a lot the was, the of

But preferences. do kind it we’ve like mix And back customer get would bit of us. XX-XX of portfolio on growth the But to see run the it’s a or heavier has benefiting interest of the would kicks to gives just that to XX-XX with of taking kind loan we’re today some little eventually market We what kind historically side. of off that now we’re So – that right at. income and to like that. on

would banking So second expect guidance be pretty mortgage I income to trends, given I on we quarter, say, higher. little this. would really don’t a give maybe similar to forward the But

think... So I

Catherine Mealor

Okay. Great.

Dan Weiss

Yes.

Catherine Mealor

sense. perfect Yes. That makes

you great. scenario may start reserves, look color releases any some of increasing of you today at quarters. Where you’ve what waitings then are under you what the CECL? reserve, just past And have your And over seen given couple to Okay, environment? of macro to the kind the give point can on thinking like up of about kind continued the reserve us

Todd Clossin

I’d Yes. helped I’ll I is that the reserve for of do more good. been we let the like portfolio, really, like in improving loan that to loan pretty long which board growth would release growth. continue bit factors reserve want which had would’ve that. But have which the details to that We to growth, that. on had the you that a pretty is Dan then healthy add release. quite color? get loan Dan, into in of had we quarter good. and happen and saw much across second much not a more But the really our indicated reserve growth offset a for

Dan Weiss

as et shows add, there, would the waterfall factors the pretty in to nice with see related we only type can growth can improvement macroeconomic mostly the see into loan nice kind on decline qualitative And the there’s to which particularly as you a that seeing The offset just the deterioration COVID as well factors, mentioned, great Slide Yes. thing I some cetera, see. as of in is second X kind mentioned, kind Todd did quarter items, you moving Todd there to of pieces. a unemployment. hospitality, add of improvement And

a taking we’re the view So on negative more baseline than forecast. unemployment slightly

up forecast around today around X.X%, be forecast projecting are in So slightly call kind let’s gets it. of us more And baseline X% so. or we to unemployment a negative waited

piece consistent with the and that pretty a end was the of $XXX up reserve other of effectively around two kind kind million. So offset

Todd Clossin

Yes.

not I think banks if expect low I You’re you another too. the wouldn’t reserve then think would nor we release to But end probably I we’re the starting right? in mean, that’s points. the I same have basis I to a we’re the big think then and levels, others. would release, other nearing build imagine loan X.XX, that reserve getting think we from thing of XX at under be you’re I put – if other heavy big many I pretty acquisitions, growth, So marks that. the say going position, to which reserve decent particularly want And

Catherine Mealor

build And your when like – more today feels you impacted in is of it GDP say, the CECL at the like negative you unemployment changes decline. as by that look versus because feels it GDP

probably to still that start a You Is uncertain, but going it’s fair we’re assessment? see to whether will see, that. unemployment

Todd Clossin

our CECL the but The not consideration, is GDP Yes. unemployment. It’s a significant factor. primary the driver is of reserve primary quantitative unemployment of model. is a driver

Catherine Mealor

great. announcement. All That’s on you, your Okay. right. also Todd, retirement to And Thank you. congrats

Todd Clossin

some thank sitting a Well, board. to I’m on him that. my on year, appreciate board you. of excited overlap get nice have Yes. Jeff We’ll excited forward calls phase yes, visits We’ll on him and next or and some so. attending half a come and to and to in looking have life. a the year here have I earnings I’m of

plans, change great be working it along. we’ll or in So no together to move guy, and he’ll great continue But strategy background closely. pretty just

Catherine Mealor

Great. Great. Very good.

Great, to quarter. forward with him. thanks. Looking Great working

Todd Clossin

Thanks.

Operator

go ahead. will Manuel Please D.A. question next Davidson. Our Navas be with

Manuel Navas

assets be Good picture. end peak up. a know wanted think to your repricing NIM good XXX amount kind bigger year rates the that at XXXX? for just Is given If I first that of assumptions? will fed timing would a by of are of little what morning. beta be of still I kind half

of on kind your that thoughts concept. Just

Todd Clossin

Yes.

much the in going of kind half XXXX. and knows guidance of So forward happen give peak I third rates maybe so who a now XXXX. the again, but would probably alone be there’s there’s end we But the back yes, much uncertainty, much half too would not of more to of to say what’s movement between to NIM so and back here, quarter, try let

that’s So would kind would of in half she where think moves we back more would goes, XXXX if that – NIM. be peak we as it see steady everything I see of a

Manuel Navas

framework this we far is next back so half what this that hard question a of year? done can how new it’s coming makes happen XXXX, XXX for expense expenses? already little that think the there. tougher Then coming in on are I we without think on and in Can you This this year? you’ve growth? guess about specific That guidance, giving might exact of year should across be What get hires kind growth also next new should but too about too, stays hires sense. assuming give the of kind how to knows a expense who

Todd Clossin

upper as additional We loan this single some in longer-term. want on in add growth that again to may be mid well, Dan digit Yes. too. rate

to hires addressing key be a of important right? lot we’re offset it’ll coming also and additional the the on all key doing having of we’re It’s going people too. So underperformers we’ve a those going is So board. got of good and portion to But not places to in us. topgrading, increase, offset markets but increase

drives dollar of operating that. leverage a production FTE, is more of big guess, I positive per focus which So,

think I some growth for with they the heavy some tend strong markets, us. of hires higher So in producers the of would be to

there see growth grow flat to growth people, the they to And out would in can’t want recognize, and just expect environment We that WesBanco. I to operating it’s so is stay needed positive a want bank. expense We take your of leverage. key So again, too, you well, investments forever place. see as think

So they’ll second in get hope you’ll board we be kind to additional to the of even hires they that want you’re year And continue got is that where offset mean, were the revenues. a as And we a in the year, here, we’re other of some on an hired again, I that. particularly third that as that I full to, would to commercial we’ll and people though I on by the for increase quickly. business expect, I in for so we may bringing was so earlier, bring have would our the to producing. plan LPOs see the next there, on Northern plan respect but the should they quarter, given going a would the would again still the to out. on place, through was say again, board bit lot non-solicits them producing the when We third hires. the six in lenders. hired start in little in in differently. as And XX of than accelerate Dan that markets, quarter mentioned mortgage, but additional did They hiring But quarter. of come those the XX in and that XX, more that. be basically a had hire needed some think start like a in not be them and build year to already really of we to see things mortgage we additional there, one residential months they’ll Virginia The lot be the ago in for market obviously lenders, they’re our board a originator soften then second more outrun tend them – markets Residential to that. quarter,

or plan. the the we’re though stay, to the XX% able production. hires and So of flat that mortgage on not residential very that down made part because we’d Even much be was loan we’ve XX%, market’s additional

else more talent. to anything six to at not the add over did to the that months. would we in We’d levels like So but time, continue That’s seen talent an you’ve think Dan, add first I that? our not of influx you plan.

Dan Weiss

No, well. it I covered think you

Todd Clossin

Okay.

Manuel Navas

you very much. Thank

Todd Clossin

Thank you.

Operator

And turn remaining to session. like I that, over time. any conference the we would closing our with question-and-answer Todd are conclude no for to this remarks. questions back There at will Clossin

Todd Clossin

you. at week. Thank looking Appreciate today. I all forward a here each Jeff coming staying in see the healthy. chance winter again. you. you a and Dan and and all some and the getting everyone’s time other conferences out and to up months Thank of guys Hope Great. John Have in-person be to are great fall we’ll And

Operator

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

disconnect You your may now lines.

WesBanco (WSBC) 27 Jul 222022 Q2 Earnings call transcript