Earnings call transcript Q4 2022

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Operator

Good day and welcome to the WesBanco, Inc. Fourth 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, this event is being recorded.

to President conference of like Iannone, to, now Vice Senior Investor would turn over the John I Relations. Please go ahead.

John Iannone

Thank WesBanco, Inc.'s call. And welcome XXXX morning. conference you. earnings fourth Good quarter to

Senior Clossin, Leading call Chief Jeff and Weiss, and today Operating Todd Executive and Executive the Officer. President Vice President Vice President are Executive and Officer; Officer; Dan Chief Jackson, Chief Financial

of information for Cautionary which as on yesterday XX, Today's be available earnings-related undertakes this WesBanco obligation site archive statements Web and the information. filings forward-looking of Web our will XXXX, investor reconciliations to measures available section one no update Relations an materials as of our afternoon, non-GAAP contains are statements our call, January our year, in other of are and about Investor All site, on as and included materials. SEC well wesbanco.com. them. issued materials These only speak

Todd. turn I would to like now over the Todd? to call

Todd Clossin

remain Good Thank growth operations and call, accolades. of our takeaways were an advantages operational our on for morning, strategies our about highlighted We the are we'll throughout update demonstrated today XXXX, XXXX evident and and and you, outlook. quarter call for continued results XXXX, everyone. a were excited earning We from numerous success current are Key fourth John. future our solid our provide review today's loan net well-positioned by discretionary the interest core control. and On cost national growth, had and by performance financial opportunities. margin expansion,

a earnings and management. appropriately capital a institution strong long-term environment. the both we as and to WesBanco ensuring ensure them advantages built Through quality solid organization strategies financial we strong income, regardless our on continued during sheet, through balance of credit had economic shareholders, another upon success net XXXX year operational core which capital well-capitalized growth with focused will successful for metrics effective liquidity, successful return and our to while remaining well-defined execution generated remained annual and sustainable

pleased as we continued reputation during maintained with fourth quality. expenses, We growth, quarter and our the our are performance to loan discretionary controlled for deliver of credit XXXX

available of we million For the reported and excluding income diluted ending $XX.X XX, common share of when shareholders December earnings XXXX, net after-tax restructuring and to per quarter $X.XX charges. merger

On income available common shareholders the we diluted net $XXX.X per same of million, for the basis, of share reported full-year, earnings $X.XX. and to

do of by remained of from financial on quarter continues several return accomplished community receive we Throughout strength hard recognitions congratulate return Furthermore, our further demonstrated for I flexibility. performance, X.XX% on and operational and past these that be tangible is and not XX.XX%. accolades the remiss our I'd equity if this financial our operational work a to to numerous And a employees the and national capital our they year, as assets milestones their of and are continued to performance provide position resulted focus. strengths, and average testament strong dedication.

complementing in service, conditions, two services, number services, by and involvement, and outreach one Forbes launched customer bank feedback, as we loan issuance a leader look production new Ohio, and ways in the highlight initial advocate terms our consumer and continually the expand to WesBanco its and communities, bank in in including We offices Kentucky, Just an report. including Indianapolis, few, our for in sustainability scores the for Based number WesBanco existing and remains was Cleveland, financial to customer for Northern advice. of LPOs Nashville, digital [Akron-Canton] the and and Bank satisfaction our trust, [Ph] on high Virginia. branched named

on customer fourth of world's was feedback. the year one best also and a banks, named which were the in based For consumer we row satisfaction

a Forbes within number quality, in the in profitability. XX top based again list best year growth, recognized, WesBanco row of in as banks two We named credit list Forbes top America Midsized companies third well financial of upon was banking and securing all the and the XX, of category. the to the Bank were the earning companies of services the once For to in as Employers, percent a spot America's XX spot Best out the included named

only In the of fact, financial making employer for we bank and were performance both midsized top XX the choice.

one trust, companies, as for was investor honor WesBanco only this America's Finally, of to trust; trust. as touch employee and one being customer trust, of banks XX well recognized trustworthy nationwide three most as earn points

strength loans, as XX-plus which growth loan last measures and continue broad-based excluding our solid The key low relatively Total the was September quarter a was this or remain lending and solid teams compared year-over-year strong consecutive the reported again during the and loan with through quarter. when XX.X% the teams, third we quarter, quality to quarters. strength credit PPP for loan growth, of from Reflecting of XX.X% markets our perspective, to consistent XX, historical least annualized XXXX. at story we demonstrated lending X.X% the SBA growth combined

as and criticized While classified key total respectfully, X.XX%, loans declined past X.XX% credit of and to and loans. loans quality and sequentially due total measures both such year-over-year

family two loan continues commercial the and to enhanced teams of mortgage of the both by of $XXX residential our than the our purchase by retention through and originators. just loans that estate loan XX% have the either during approximately efforts construction, Despite year-over-year team X-to-X mortgage fourth our real markets growth annualized been hiring generated were Total from sequentially or XX% originations which past of benefit years. residential mortgages over of more increased million quarter, XX%

commercial quarter, the XX.X% from X.X% quarter fourth For and was third X.X% growth or annualized. total loan year-over-year, the

find continue teams to commercial Our business opportunities the pipeline. replenish new to

our teams at consistent only loan as XX% office million. as $XXX during quarter, remained commercial lending our new for last to account early of strategy addition strength quarter, pipeline success In loan which $XXX pipeline approximately pipeline. originations our our approximately the has represents talent well production million of relatively of the the since approximately fourth The of from

newer future will gain lending prospects additional what hire we commercial share, the this as see to year, market LPOs and about we lenders. encouraged traction, I will lenders recent our our gain While continue our provide economy am

Through evolving financial few transformed we years, an at services with the last regional community institution bank a into company have our core. its

of have while standards. majority control, We markets, market states, now in discretionary the located risk to the growth done our this within management, our successful a and expansion with company cost higher through spanning these six foundation credit disciplined, adhering of

As this our be success. long-term been continue to they and critical we a has will of to as our and investment support in are have investment evolution in growth discussed before, employees key the

well-received. During and on by in improving we morale both which XXXX, implementing increases wage, XXXX focused boosting retention hourly was the very and

plans more positive to producers increase strength across investments. and our than see than we our to revenue of addition, leverage these these teams from more the plans business lines during the XX and upon by In and operating have executed depth during markets. hiring growth successfully developed and XX We XXXX, begun and XXXX,

hiring We advantages solid foundation will a and enhance combined continue our ongoing to an story our evolution core with strategy. lender growth and through into strong sound

liquidity, ability add lenders quality, While balance to organization productivity, opportunities continue high-value ensuring an our across to ensure plan markets. a to to leverage sheet. existing we and enhance remain with to appropriate sound and solid growth focused our annually credit We strong will productive individuals evaluate on we

leadership, right markets, employees. and opportunities We for We're the have to provide shareholders, the excited our our strategies upcoming customers, success year. teams, long-term about and for

on Dan update our fourth our would now results over CFO, financial for call an outlook Dan? to I like Weiss, the and current to XXXX. turn quarter for

Dan Weiss

morning. good Thanks, Todd, and

we strong in maintained stability quarter, expenses. improvement loan continued net in the over our margin, and our credit quality recognized measures, growth, During interest discipline

million, improved net of during income $XX.X per yesterday's available of we $X.XX for quarter, $X.XX, and earnings share the and and per reported diluted net in share the GAAP million, shareholders to As fourth of full-year. noted income of earnings earnings release, common $XXX

restructuring Excluding compared results XX, share, year, as were and merger-related $X.XX and months, and for $X.XX and per December respectively, $XX respectively. $X.XX to the XXXX, ending XX three charges, last

year-over-year securities $XX.X Loan commercial balances $X.XX Total a of billion. sequentially, consumer billion was and included of of tax portfolio approximately reflected total both $XX.X net payoffs share, the compared XX, commercial share performance loans Furthermore, estate quarter, and negative billion retained note real totaling our we $X.X provision residential X-to-X benefit million. XXXX. and impacted of as expected, per per to the important XXXX assets, strong XXXX, as for by and $X.XX grew that moderated family as It's $XX.X a on total to fourth more of balance sheet. XXXX, $XX mortgages of December teams the of of this by which during quarter lending million favorably or

the estate to million HELOC real reclassified secured collateral. $XX of prior-year to approximately underlying to loans PPP million, SBA $XXX $X period. million residential the better period also compared as by consumer in totaled category We reflect this the

Importantly, in $XX.X excluding accounts our deposits the Essentially and in credit prior reflecting and interest levels remain peer a key demand remain non-interest CDs. the to balances. as of measures low underwriting favorable savings bearing strength billion standards, our decline December XXst as Robust demand levels, story XXXX deposits compared of the offset year were continue growth is flat bearing averages. quality deposit deposit relatively at to to total key as

reduction Total deposits X.X% $XX.X improved to year-over-year non-interesting of were our total $XXX deposits million net quarter points Further, due down XX in loans rate into margin year. in deployment CDs. interest points The throughout XXX the XX reflects of sequentially and increase federal bearing a deposits. to increased XX% increase at basis with the This billion, cash yearend funds combined of in X.XX% higher point year-over-year. basis excess basis yielding successful fourth our the

Our of SBA excludes increase periods. accounting X.XX% less continued basis loan periods for from accretion PPP for purchase with accretion to points both core basis X.XX%, a to which quarter-over-quarter X point for both or margin

legacy major pricing markets. those peers, deposit robust provides in as a especially base metro primarily Our compared advantage to

our We are impact on of the immune rising rates funding to not sources.

basis funding points of when including excluding XX average. non-interest federal XXXX X% to which meaningfully for throughout basis Deposit XX impact increase not deposits. funds XXX or deposit reflects the beta total did cost of compared point the in to year-over-year rate fourth points December XX year-to-date points a basis increased the year, the as This bearing basis quarter

banking due on balance sheet. million with to $X originations million. to mortgage organic as fourth its consistent trend income mortgage of non-interest a For $XX.X primarily million the more the reduction and million year-over-year, which general, $X.X $X.X of the continued brokerage due lower $X.X increased growth residential decreased net revenues to in of in our was million industry record retention Securities loans XXXX, quarter year-over-year down income

in in of interest margin efficiency net expense and loan Our control resulted XX.X%. inflationary commitment to ratio an expansion growth improved combined with discretionary environment an

December ended X.X% months Excluding merger-related restructuring three expenses, year-over-year increase expense X.X% XXXX, million. and and totaled decrease a non-interest $XX.X XX, sequentially. the for A

It's based the which to important there rate $X.X run couple bonus employee movement that million plan of are in totally expense related compensation and was which credit our and to in expected note included annual repeat fluctuates a was mostly there not equity million underlying large expense the fourth $XXX,XXX wages, to downward lending commissions mortgage $X.X forward. securities. lower a to adjustment salaries on Within a deferred with benefits, going approximately And to credits an volume quarter related incentives. based

$XX expenses for the two have would fourth been Adding non-interest approximately back, these quarter items million.

the to per the quarter from during $X.XX quarterly $X.XX dividend share, increase. to Turning was increased a representing capital, X.X% fourth

the regulatory by ratio applicable demonstrated XXXX. common is ratios X.XX% that December solid remains well-capitalized as XXst above of standards to tangible are equity and position improved capital our Our

X% Now model asset-sensitive quarters quarter. currently, throughout And And hold the funds XXXX. We steady our during remaining an on then, to fed thoughts current first remain XXXX. for I'll some provide at bank. initial peak of outlook

as couple the of We continues quarter relatively margin remainder to flat pricing hold basis points in rise. year are for modeling deposit first of and the expansion a the

We expect meaningful approximately and be accretion five quarter purchase points four basis SBA accounting no to PPP per to accretion.

lag as mortgage new industry. and for offices deposit peers As initiatives, rebound production originations the continue betas in stabilization we industry. should due generally anticipate and progresses. mentioned, to interest remain base well deposit as a the industry positive anticipated be our to to legacy relative to loan our than year Residential provides and to rates, trends should as the And pricing hiring lower the advantage robust to begin

fixed customer is move, benefit to as dependent Trustees approximately to preferences the origination to selling from XX% to pricing. expect be market the to production, will continue impacted secondary and it we markets. While over subject into growth, slightly equity time, on income as organic the by in continue trends well and

seasonally likely are growth. continue with year-over-year in fees as and quarters reminder, consumer organic modestly Electronic due spending will mostly brokerage quarter first benefit fees on banking a they As should deposit Securities behaviors. few higher the similar overall a revenue to to subject trust range service charges tax from preparation. last remain to are

we In commercial annually earned swap income years we've training an in million anticipate implemented last increase addition, new few $X fee as we above have in over approximate the strategy. improvements and the our

discretionary as our remain enhancements. pressures, improvements technology, costs important fleet we include in as we in infrastructure, XXXX. product and lenders This intend to across a which commercial long-term our employees, strategy continue well attract mitigate to about and continue third ATM to implemented upgrading growth of revenue particular metro to hiring continue similar markets investments as the diligent include return. digital that on While inflationary with we to retain growth-oriented we support will to latest for make will other help of sustainable shareholder ongoing We'll efforts make a

$X rate support higher increase. anticipate based To markets, an employee be of anticipate plans expense investing more growth in impacted by expected plan on focus our a expect return per to revenue-generating marketing FDIC pension we on benefits We on within our across insurance campaigns. approximately quarter and assets, with industry-wide the lower million

could $XX financial opportunities continue also network the identify quarterly which in be we benefit range. will of expense evaluate million today, believe Based to we provide know the mid our the center on cost-saving We year. rate what our to run a in second-half to

appropriate loan as of as quality long-term potential dependent return, metrics, associated upon credit changes future drive support to positive in criticized and changes are will classified shareholder factors operating well revenue investments for CECL qualitative and in provision will be leverage. sustainable balances, these continue including to the macroeconomic speeds, prepayment that delinquencies, The forecast and in believe growth and loan We losses and various growth. credit charge-offs,

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

please now Operator, ready you Would review we are the questions. to take instructions?

Operator

begin first James. with Daniel now Tamayo the today Please go will ahead. We [Operator question-and-answer The comes Raymond Instructions] question from session.

Daniel Tamayo

Good morning, guys.

Todd Clossin

Dan. Morning,

Daniel Tamayo

willing fund from interested rise how we it's just you're the let in that growth on for much loan are then start what expectations, you're loan And relatively the expecting -- Maybe coming with the deposit what and year. low, seeing still runoff? you to ratios and securities

Todd Clossin

growth that, the I'm right mixed well, is It's to okay, now with So, to Yes, Dan. is obviously, economy-dependent, going right? what to loan glad lot be answer -- going to a of do. economy there signals regard out

stay upper think the growth basis what long-term so basis. the guess kind what continue looking in my we're as to think consistent, looks and I the we as have -- longer Thursday, of too, were pipelines been last And we've feel that's striving get been a that I I said think, on comments well we at GDP good. in in kind term in comments this yearly, low year, but single-digit range. comfortable a upper is past our towards, Yes, of on double-digit single-digit with, where number I I

we've growth right of think organization in single-digit the to the growth that that I we've years be the our been achieve markets And to rate. number upper able building path finally last for on built

the that over an is economy us deposit going but is and might the along Dan now. So, things, time, expect in as want solid now; too, to what I But I we we of we're jump the right ratio. build base look When at know well want to with I all don't have along need advantage obviously. continue that, deposit the to going here to feel about and growth just do some good that right bring and that. give away, loan to deposit have don't to It we to side

deposit home advantage it general, we into funding let of are little too of imagine. look So, in in just can at we take see those a but when nothing run generate plan our we federal than But the deposits, slow off, the CD we more we've think of deposit replaced specials, loan We that want by we really some run time let been. or runoff We'll those get the wouldn't being same the aggressive in little that at some like some in more a to to with have. would we borrowings. we markets. legacy reintroducing But you business I here, higher that markets obviously would probably discussions be bank advantage some CD CDs, competitors least at growth bit the far, our CDs at

But I loan-to-deposit but few a the loan-to-deposit that when get little that don't ratio really that may to drift time. we over XX% XX% We're up pandemic, away. all were comfortable bit to give ratio that we to point. think before a imagine in And I back would more, want we'll there years

be how dependent So, aggressive see. there upon we how we so that need by get on growth to and driven loan will of be kind be really what deposits, we quickly

So, answer, that's of but right best that's longwinded kind now way a see anyway. the I it

Daniel Tamayo

you've few just amount the appreciate the over a my No, credit I the down seen that's quality, then And quarters, ratio terrific, last reserve around follow-up settling decent all color. come here maybe on XXX.

the are drivers increase curious an Just would of portfolio? loss have And reserves grow need you outside here, what within to to then there? big the in what from see content

Todd Clossin

related that to We'll jump you in CECL; comment? to want and Yes. do cover it's Dan

Dan Weiss

to $X.X quarter seven That's debit had quarters a first look the Yes, there's the waterfall provision; in nine can we dollars. recorded million we've the provision quarter. I six, a seven last build I saw been the that shows time of would a chart kind you actually reserve that there see slide say you this Obviously, negative. if in

so, qualitative us. seen And are to those off And more what or since the kind think roll over behind of we've those point we're pandemic, areas of higher-risk where number factors seven think related a I less I of continue we've quarters. last some to to seen the the

million course, of charge-offs, drivers then, more also are macroeconomic the growth, provisioning extent be impact going that the is say and forward reserve see more reserve, are So, probably continue going forests, levels. in I rate the the would But the really kind of to any probably provisioning, the would normalized, And quarter here normal $X.X of I run fourth those drivers think would future and we loan forward, the that that recognized to we that forward. total. that going to going

Daniel Tamayo

Terrific. All right, again thanks color. all for the

Todd Clossin

Thanks, Dan.

Operator

question comes from Shepard next ahead. Please go Karl with RBC. The

Karl Shepard

morning, taking thanks good my Hey, questions. and for

Todd Clossin

Morning.

Dan Weiss

Morning.

Karl Shepard

do you you the ease see I expanding on we start guess and pressure about a are rates. I do wanted signs can higher expectation slows that mentioned you your prepared where there's think XXXX? that the you starting you Can think And or pressure? you through to as to immune and interest some being in expand as little of to lagging cost, Fed maybe not move bit of

Todd Clossin

particularly throughout Yes, in will the to really X% there mentioned, start go quarter, is I great when the Dan forecast, year. and that's Fed stay a the mean question, as first rates, our to drop right? to

rates able able be to we last what were deposit saw of in think to we really cycles. what we're different the there funding advantage costs by aggressive is to to right drop, dropping So, now. all start that's end rate have time because of on deposit continue that the our do being the advantage a throughout that XXXX, year toward I kind was into or anticipating drop If

to I able deposit starts costs at future. in So, the we bring some would Fed in be if position, point dropping to rates down be a the think,

historically, And now a than the allows seeing it immune really to deposit our anybody we're obviously -- guess industry is rates in core And we lag. cost lot has funding moved strong it seen before. to increase, question benefit. that up quicker And a we're of had I again here but now. the because not lot base, faster, us we've that

really ago to not relying very betas from years on applicable be may So, now.

on giving things pricing much our been So, we're some with going in what's a watching with CD pretty specials, our higher-tier if daily We've markets, new not on some authorities like and deposit basis, cists. some that. of savings weekly, proactive it rates,

that but that side quickly that, in I we lower dependent growth, on happening loan you'll So, the we see need next a we are what month to two. still And or need be beta over economy we how us think for what that, perspective really here addressing also would the but upon we to peers. of from address see don't the how need address much

right We in expect to rate through cycle we're that advantage now. continue the right that

Karl Shepard

more better, do bit and or loan to I get and little help full-year moderating of that's it understand it's the you're provide for loan wanted economy bit us might here talk that Okay, XQ, loan think growth for from or a you about And can us then just where to of I bit to new what is growth. those to here? the about execution helpful. pivot a a is out help strong offices mean payoffs, little a you break But pieces view reluctant kind too. we could that so go quarter little the also that trends demand think

Todd Clossin

year right? that next that, again seeing, loan XX% but pipeline, LPOs, in this the is or really, they're material Well, pipeline from the year, from any LPOs. of I Sure. up the dependent. So, growth economy think, point we're way our this should at in not see showing We

was saw that a to So, that you minor benefit be year loan would of upon that us a say because based was not from it. new the accurate, to going I last LPOs that it part is that's something But be wouldn't growth us.

hiring longer or you the acquiring over guys was Louisville, as the been we've even that Mid-Atlantic in. so, the we've just Lexington, markets I of that, it been decade higher-growth like last more know, already into into than think markets markets. And

core and that, hire into why, deposit because profile into organizations. a it, loan think we those that. single-digit we're fulfillment the looking and keeping a to of advantages I had credit markets, is then and our So, on assimilate look everything the of side while and WesBanco, those still then on organizations that's just at was at little this growth else, put least I way a more acquire which those of benefit the now. long show really that take well going I starting growth been additional think up, at is seeing building we've organization this people forward upper to And for of is our now is And the quite advantage positioned to time

With some fourth And had did of quarter, regard a payoffs that. lower estate the $XX to about we real in quarter get commercial $XXX benefit think, level we I from of the million. before million,

be million expect of we So, our commercial quarterly $XX kind million real estate rate. $XX to normal payoff about to

So, his Dan as putting comments, books about we as a XX%. of in from well do our said resi are And mortgage get benefit on We that. our we typically XX% did would too.

But back little the of basis to really need mortgage were So, XX%, at and X% an basis that it, look or to year, a really run you why the a three-year assuming A rate, resi believe, done the rate what $XXX to with us that, feel on, million because upon down. X% put upper loan is of idea to XX%, And be but on to think based couple two at and with at had that's we're like loan move we last size. consumers to up going really more what's market-dependent we bank or can bumped what a look is. good lot growth we more is I which roll our going an if or time. resi get sustainable about I have that's just a annual you needle Any up I over want. on single-digit I to growth over quarter that would think franchise had a

Karl Shepard

for thanks help. all Great, the

Todd Clossin

Okay, thank you.

Operator

Sandler. with go The ahead. question from comes next Casey Please Piper Whitman

Casey Whitman

Hey, good morning.

Todd Clossin

Casey, Hi, back. welcome

Casey Whitman

Thank you.

Dan Weiss

Yes, good morning.

Casey Whitman

and buybacks as price-sensitive guess, first, be you appetite you an on I M&A how update guys there? capital forward follow-up And would your give year? going you about the touch sort how for to you're just are think this can then on Morning. of for here, viewing on moving us

Todd Clossin

I'll watch see buybacks the fourth quarter we did we because do of in part were the the part that And happened wanted quarter. of was matters, we it. at jump But AOCI, side, early trying fourth let the a to slow on too. as to what with Dan that, then to from on range. and price our were paying But X%-ish buybacks. so, perspective, in quarters The to think start to I'll close hit in stay I was to some on that book capital also, say or watching the and last well And on with off the type what M&A in up lot was doesn't. was we were capital of it of the big we couple we attention felt XXX% tangible the did a a back it some AOCI, going say pretty and and But number.

maybe to going really of it at I that, peoples' not have AOCI. at piece buyback evaluate. think look an on big last something year, are we looking things know a as we we impact to to don't don't I -- I that's when we're think But I'm whole going as be I the look AOCI of it's year, this see year. lot is I this of through moderated; that. the planning mean of was some people know sure it,

number. AOCI, lower or you're you're So, maybe if look not at book, XXX% you a the tangible of maybe at through XXX%

we'll something that's evaluate. So, that

that's this see dependent we yet, I but that decisions may could going any up over and We think months. on of next we'll still That we the pull appropriate. what that, we authorization, start year, share upon million haven't doing when firm X.X couple have some made it's but be we to of be think

you Dan, would add that? anything else on

Dan Weiss

you No, covered think well. I it

Todd Clossin

Okay.

to call on Sorry comments that. your

Dan Weiss

you're think good. No, I

Todd Clossin

of would anything of are trips you sitting here, right some as now. interest key a him the some he's the at markets and of And making lot me people known. not at I doing We're a to to of introductions. lot some me side, that that have and he's M&A a introduced looking lot actively other known that too. I people in, tell the actually banks, we On he we're to Jeff's next and introducing I've to executives well

So, the interested the new operating year-and-a-half a system We along. place the got ago were core now. got think obviously to we put come a in we're liquidity, definitely thing we've capital, if right

we like like would we to we feel So, feel ready need do but we something, be to. don't

to position that organic in that a realize finally we've think been and on towards to long just growth focus for we've been I growth. working able time. be of loan nice kind the It's

So, decide same it. had also, we're we prepared think we at time, not right do this just But looking point, But may very we'd I anything. to opportunity well actively be at act that. at to along on the come if the

Casey Whitman

there Are be markets in most interested that footprint-wide? or Understood. is would it you particular

Todd Clossin

I the Yes, and we're it's LPOs, to We marketplace ended the part know a where bit to up get Pittsburg, it. years XX do in two our little markets buying is of some we up ago, once LPOs we banks, did think up then then got that know set acquisition, right? idea XX, markets better, in and So, follow-on that that have in the LPOs potentially. with and a already to of eventually,

or existing So, Northern footprint geographic within in at. markets would I looking those that I of would timeframe distance all geographic we LPOs be Indianapolis, interesting be have, the the drive think we're that -- that we outside still think that that Nashville; have Virginia,

that throw opposed profile doing kind to be Central overlap, Northern Pittsburg, is I suburban been something year maintaining but try takeouts, market, of would look on be that think throw well to Central as along. Lexington, all D.C. focus the us. Indiana in of something be Virginia, those Cincinnati, already Wouldn't those something quality. stuff, really a right, good mix too; interest story still came good to would But working in company, decent that obviously have be in interesting the areas little higher-growth growth be credit markets, at continue like Louisville, throw markets, on, the to if Columbus, Tennessee, was market would that there to So, us that which to was is that if expense -- we've while higher-growth finding branch

Casey Whitman

appreciate Thanks. it. Great,

Todd Clossin

you. Thank

Operator

go Catherine from [Operator Instructions] comes ahead. question The KBW. Mealor with next Please

Catherine Mealor

Thanks. Good morning.

Todd Clossin

Hi, Catherine.

Catherine Mealor

the back to you so know the decline to the a I that higher-cost FHLB FHLB of see CD quarter added grow of margin we but you bit of the borrowing at mentioned, you you're of into the just strategy that CDs. conversation. at fund decline, so, more at balances CDs, bit over Todd, that But maybe do Thanks. little end we you pull look thinking should balance and sale-ish continue a growth? year, funding chose Wanted changes? we And model to little curious to this go funding about kind how and as quarter-end, to XXXX, And think, move if

Todd Clossin

hand I don't Why to Sure. that off Dan.

Dan Weiss

securities Yes, things. we've about right than couple our That's where Catherine, a portfolio Obviously, little so maintained say, now historically. represents balance sheet. I the would it XX% of heavier a

loans. So, portfolio we get from reinvest some do expect that and to into securities funding

per million $XX that's kicking $XXX month, off about million per now, quarter. right So,

be would CD rate do specials. Todd FHLB would And first from. relative towards borrowings, we as mentioned, have as where come we some look If to CDs so dollar that the

So, we deposit extent runoff. say to say, CD continue we $XXX that less, we wholesale fund would that did if some let's of we see that, portfolio, But within quarter were expect of parts. out the CD see that the slow would -- more think I and the growth, then to leverage per that million I will down or that case in growth kicking

have levers can we we million continue be CDs, would -- be, that we pull, those we if say, needed in course today, the let's that leverage extent we $XXX parts. we than, the would would to other think, I wholesale per plus quarter more Of to slowdown some but

Catherine Mealor

than -- margin if as could everyone And margin ability I Okay, to given mentioned margin your about be your think this peak. great. Can remarks But then thinking the of rest said that you about you And on you quarter's argue this the expect your I peers, the to in prepared you expectations just think the that just you that funding the circle year. flat your I think feels for might you be margin, year? -- costs. back for this lag of different like is

you're thinking peaking of about So, curios just kind [indiscernible] how

Dan Weiss

I we're a so. Yes, quarter, dependent so very deposit three on that loan reprice discussion, those be points do we points, wholesale generally here inflows how deposits, hikes. rte XX continue Certainly, basis loans of the example, that. way fourth first-quarter off expansion growth mentioned, expansion fund retention couple and But that can like as over outflows. and we saw second dependent months the versus not we on about and the But quarter like CD of think expecting double-digit looks or for next really, think that the much to anything basis through what that here it'll in or much borrowing and borrowings. would in speaking, it going FHLB expect, to back we be upward Again, to I

to or in well of the expect But more points first less -- offset fund our of we're model funding in we've XX kind to quarter. such really or as So, they net rise got Fed we cost basis will zero. increase the that

margin to variable And just so stable really to you standpoint. NII We'll I stable going will terms to three deposit throughout that costs year. that we've at of think from -- look lot But the then And as reprice Again, a rate those going have a the I think funds the kind momentum. in well. got that still it'll beyond NIM loans We're a begin are repricing rising quarter; kind repricing quarter, call of holds that's second have begin be fixed-rate of Fed X% offset months it, that's once tailwinds kind the maturing. well rate as where the loans get of we a past, second forward. assuming

how that's deposit quarter from we side, pricing cost that's increase or margin, offset look forward, an taking basically second -- the of side. the the at basically with on on -- funding advantage So, we stabilizing, the the asset or the how a

Todd Clossin

have we too we the on so that want At based to fast, the we're obviously, XXs. couple well and to are speak that make we down slow. until deposit the XXs. start tactical the large reveal going and things that. mid That's years the plan to And to road next strategy on XXs next creep see upper and -- to to gently to Not make that we get capitalize the we balance will going rates so quickly. too of too we extra materialize. going to and be what a XXs take are out that the to that's be happen, be of obviously lower on we ways, advantage going time, but think, do is keep that that sure how may probably But, the be rates Yes, months, mid I about to use us to couple we the of Who then then over That on sheet same side. lion and as raising that sure going that part, to industry few the dependent knows are to to all eventually up on low Kind quarters. growth themselves up wouldn't not capacity let loan appropriately. slowly too we when

Catherine Mealor

margin, and as of new the towards the well? of on question quarter last the kind end [indiscernible] pricing And

Dan Weiss

Yes.

a December of loans the were coming one So, look for loans [indiscernible] around spot coming of we slide if show And new which at the you kind yield on XXX. month are around we on a the do X.XX%. of have right coming it, for call that kind

December that's of increase about the So, quarter. month the basis point XX versus a

we kind that's of at. are about So, where

Catherine Mealor

that's on, And new the loans total not Right. portfolio course? coming of

Dan Weiss

Correct.

Catherine Mealor

helpful. Great, right, Thank great, much. all very you okay, so

Todd Clossin

Thank you.

Operator

ahead. Navas Manuel from D.A. comes Davidson. question Please next with go The

Manuel Navas

early fund rethinking investment? to the on Hey, are the set more back-half thoughts network the early it's bottom of expand in not branch morning. color Just add Have goals stone know of of year. any it's dropped and in Modernize Could -- of that on stages there. the network? early any you the Obviously, good line? it kind Is you -- I what thinking kind for not kind yet.

Todd Clossin

Sure. We of excess, of have XX there every we branch But, I build to fund once the actually, We've branches to so using network guess, branch have year. been optimizing what optimizing we XX rationalizing expenses I or number all I last -- reduction say say a the or above. a would it. while. a in or And here been would years those years of couple

are So, network the some ATM technology we of the spend, Dan upgrading. mentioned

of have have drive hiring, some those hired really of future guess we LPOs, that. from we amount positive towards the new money into been savings to anticipate a and areas investments. those current the So, is that going and those redeploy able Also, we that and leverage the I significant so lenders operating

to going We continue are that. to do

whole branch the our in obviously, have distribution legacy got we at big market. Looking advantage system, a

So, don't want that to give up.

ratio of couple efficiency need run to least invest. XX to to are the quarters sure invest out Dan range. some world so next and as right mentioned keep at when want to time, that Deposits expenses and But balancing markets make the the same to could rate be. important we mid us. still where And, in Customers we are important that So, those kind important that branches are of the of our we us. And way, quarterly keep are us. we the to we to for want it the at

will of as So, too could that's are But, the to network on doing. balance do, that that's buy be that other know have again how kind dependent branches we but much M&A a a XX to continue somewhat we too. don't and XX banks longer rationalized branch well year that

Manuel Navas

helpful. That's

run at kind it's investment in savings time? type way and That's about same the the So, it? that of rate of already think to the

Todd Clossin

Yes.

Manuel Navas

these expense high like initiatives? a little near-term down slows have and impact than kind digit economy of of you would the bit loan growth, that hiring a any bit If Or, single somewhat Okay. kind of plans? slower your

Dan Weiss

than could increase at Well, think quicker through anticipating, things talked we still same then I come we deposit we would would are that with. say some to if I cost do expense like through we try that see about we to come to the net income got we've

around run some rate. the expense not So, ideas into we are baked the on have that been kicking

have more are the though, not think related. there we some recession do or severe loan They about could talk it. we economy would really people things for not I that's doing been that strategy mean in put not we slowed, we awhile, place. entered thinks are to But too to if might, the are slows plan that if I that if awhile. everybody well ready and to that down succeeds for really for that growth a We growth. know something as our loan building he we as be abandon that's as build is Jeff have capacity I to

from show But things a sure number leverage context teams make with forward. that continue in want are the the markets I we and two. lenders, work and hiring, we to that don't big are the Would slow I to that to have move the the the positive like So, context that we we people the done operating to we We down. think quarter to expense don't want he time regard that like over that have, any that has, hiring or that that. we getting

think a severe landing, but then we second because start momentum a on abandon kind of we've pre-agents quarter recession, Obviously, to We Also some up it. this hire real kind this focused don't they got are cover good to of get back-half pocket people The little are tougher because out you numbers to way recession. time that's the I is going. bonuses move. and want quarter, get their get people the first or lenders at is you they got -- just more really of digit power you've of it strategy that because got of then loan control, point is year So, really to some at to time. the if right that all to our obviously getting cost all point year the maybe that point, to I in growth, a the slight single hit answer recession guess through we at soft would no a

Manuel Navas

Thank you. I really appreciate that Thank you. color.

Todd Clossin

Sure.

Operator

comes ahead. next Daniel The with Janney. from question go Please Cardenas

Daniel Cardenas

guys. morning, Good

Todd Clossin

Good morning.

Daniel Cardenas

year are now ago? loan that are more any are talk there cautiously we about here, to you versus continue a than maybe As approaching say categories growth

Todd Clossin

great The the on very say and a year would obviously it At for everybody really in of watching I years than we more got portfolio Well, in the cautious next that goes is back one the the hospitality start shape. through office hospitality portfolio is that's either. couple the issues the come portfolio. what to has see of we pandemic, really office No ago. that a But, office. even happens

with not a are be value the guarantors low way lot in we doing liquidity. It really to on much the So, of office. would with have strong of

So, still not this all I very being hospitality time, a two at either, of lot cautious areas be lot would of in the office that mention. not a at on point would that. Those

the We good have a business. C&I of nice C&I bring us lenders have seen really of business. started lot brought that some really Lot we in to on markets legacy our

the part that continuing we C&I estate as and But, Commercial would real lend it's is areas say well. categories, are. to But a office hospitality, I we two business the in. are other see of nice the real big who still estate to outside of

know. So, we in as don't energy you do much

X% than are We less energy.

not a So, to for good. that's But, businesses other pretty be factor seem us.

Daniel Cardenas

run the on Okay, for fee excellent. income color quarterly And rate some 'XX? on maybe then,

Todd Clossin

and I'll as what impacted let mortgage here we we obviously put obviously are Dan in more residential past jump in than the production are books. lower we by had our the on

the CD that's of of Lot some getting benefited degree that. commissions We annuities there have fixed the Putting to revenue. book. securities higher coming off and out from

and the is reason consumer income? I charges more comments are activity securities would of any you which activity Dan, so the more occurring seeing think service side. make driving why up even consumer are on that's then, And much. part business on fee we So,

Dan Weiss

the that's income a focused pretty here since that thing big annual come little higher focus has if then, on our maybe add would of he very thing. fees look an fees, will been first thinking about on board only to and quarter Jeff I be that. fee kind trust fees And has is swap tax you been a that that's at trust The due corporation

little of bit more. training lot and a that of kind need deploy to kind better we of how into So, and strategy tap around

we So, be as other going through… we I will see some think area that to that's -- probably go

Todd Clossin

offer of we and the new the acquired and people well Series them, we in to acquired that not things mid and that. but are did of have well driving products still branches. like Atlantic that being that number Things swaps then six as that And in one the reps additional into, fees Yes. because trust having again those markets Kentucky too and some in eight market, markets on also we of securities we the the as banks training offer, X

what seeing loan So, opportunity there on continues we markets. upside in the be to are to growth there similar side those

have continue will growth that better new see again we introduced into and think products these banks were the because those markets bought. some we businesses side fee we through I that to new

Daniel Cardenas

Okay, great. Thank I'll you. step back.

Operator

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

Todd Clossin

meetings as lot in with Great, thank place. you taking well and future the you. ours near are your our too. I appreciate in everyone's today. events upcoming I time joining know forward speaking a Appreciate one of look earnings to of

stay please have safe. Bye-bye. good And day. a So,

Operator

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

now disconnect. may You

Wesbanco (WSBC) 25 Jan 232022 Q4 Earnings call transcript