investor presentation (q2 2021)...john iannone senior vice president, investor & public...
TRANSCRIPT
John IannoneSenior Vice President, Investor & Public Relations
304-905-7021
Investor Presentation (Q2 2021)(WSBC financials as of the three months ended 31 March 2021)
Forward-Looking Statements and Non-GAAP Financial Measures
1
Forward-looking statements in this report relating to WesBanco’s plans, strategies, objectives, expectations, intentions and adequacy of resources, are made
pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. The information contained in this report should be read in
conjunction with WesBanco’s Form 10-K for the year ended December 31, 2020 and documents subsequently filed by WesBanco with the Securities and
Exchange Commission (“SEC”), which are available at the SEC’s website, www.sec.gov or at WesBanco’s website, www.WesBanco.com. Investors are
cautioned that forward-looking statements, which are not historical fact, involve risks and uncertainties, including those detailed in WesBanco’s most recent
Annual Report on Form 10-K filed with the SEC under “Risk Factors” in Part I, Item 1A. Such statements are subject to important factors that could cause actual
results to differ materially from those contemplated by such statements, including, without limitation, the effects of changing regional and national economic
conditions including the effects of the COVID-19 pandemic; changes in interest rates, spreads on earning assets and interest-bearing liabilities, and associated
interest rate sensitivity; sources of liquidity available to WesBanco and its related subsidiary operations; potential future credit losses and the credit risk of
commercial, real estate, and consumer loan customers and their borrowing activities; actions of the Federal Reserve Board, the Federal Deposit Insurance
Corporation, the SEC, the Financial Institution Regulatory Authority, the Municipal Securities Rulemaking Board, the Securities Investors Protection Corporation,
and other regulatory bodies; potential legislative and federal and state regulatory actions and reform, including, without limitation, the impact of the
implementation of the Dodd-Frank Act; adverse decisions of federal and state courts; fraud, scams and schemes of third parties; cyber-security breaches;
competitive conditions in the financial services industry; rapidly changing technology affecting financial services; marketability of debt instruments and
corresponding impact on fair value adjustments; and/or other external developments materially impacting WesBanco’s operational and financial performance.
WesBanco does not assume any duty to update forward-looking statements.
In addition to the results of operations presented in accordance with Generally Accepted Accounting Principles (GAAP), WesBanco's management uses, and
this presentation contains or references, certain non-GAAP financial measures, such as pre-tax pre-provision income, tangible common equity/tangible assets;
net income excluding after-tax restructuring and merger-related expenses; efficiency ratio; return on average assets; and return on average tangible equity.
WesBanco believes these financial measures provide information useful to investors in understanding our operational performance and business and
performance trends which facilitate comparisons with the performance of others in the financial services industry. Although WesBanco believes that these non-
GAAP financial measures enhance investors' understanding of WesBanco's business and performance, these non-GAAP financial measures should not be
considered an alternative to GAAP. The non-GAAP financial measures contained therein should be read in conjunction with the audited financial statements
and analysis as presented in the Annual Report on Form 10-K as well as the unaudited financial statements and analyses as presented in the Quarterly
Reports on Forms 10-Q for WesBanco and its subsidiaries, as well as other filings that the company has made with the SEC.
WV29%
OH21%PA
13%
IN5%
KY15%
MD17%
Deposits
2
Evolving Regional Financial Services Institution
Strong marketpresence acrosslegacy and majormetropolitan markets
Balanced loan anddeposit distributionacross diverseregional footprint
Diversified revenuegeneration enginessupported by uniquelong-term advantages
Well-executed long-term growth strategies
Note: loan and deposit data as of 3/31/2021 (loans exclude Small Business Administration’s Paycheck Protection Program (“SBA PPP”) loans); location data as of 5/1/2021; marketshare based on 2020 deposit rankings (exclusions: Pittsburgh MSA – BNY Mellon; state of OH – National Consumer Cooperative Bank) (source: S&P Global Market Intelligence)
Broad and Balanced Market Distribution
Strong Market Presence in Major Markets
WV19%
OH26%
PA12%
IN5%
KY14%
MD24%
Loans
WheelingPittsburgh
ColumbusDayton
Cincinnati
Louisville Frankfort
LexingtonFort Knox
HuntingtonCharleston
Morgantown
Washington D.C.
Baltimore
Lexington Park
Indianapolis
#9 in MD
#16 in OH
#11 in KY#3 in WV
#11 PghMSA
3
Investment Rationale
Balanced loan and deposit distribution across footprint
Diversified earnings streams built for long-term success, led bycentury-old, $5.2B trust and wealth management business
Strong presence in economically diverse, major marketssupported by positive demographic trends
Robust legacy deposit base provides pricing advantage
Balanced andDiversified withUnique Long-
Term Advantages
Distinct andWell-Executed
Long-TermGrowth Strategies
Legacy of CreditQuality, Risk
Management, andShareholder
Focus
Emphasis on digital capabilities and customer service to ensurerelationship value that meets customer needs efficiently andeffectively
Established lending and wealth management teams
Focus on positive operating leverage built upon a culture ofexpense management, enhanced by consolidated back-officefunctions in lower cost markets
Well-capitalized with solid liquidity and strong credit quality andregulatory compliance
Seven consecutive “outstanding” CRA ratings since 2003
Critical, long-term focus on shareholder return through earningsgrowth and effective capital management
Note: trust assets under management as of 3/31/2021
Strategies for Long-TermSuccess
5
Long-Term Growth Strategies
Focus on Delivering Positive Operating Leverage
Strong Legacy of Credit Quality, Risk Management, and Compliance
DiversifiedLoan
Portfoliowith C&Iand HomeLending
Focus
Long Historyof StrongWealth
ManagementCapabilities
DigitalBankingService
Strategies& CoreDeposit
Advantage
Franchise-EnhancingExpansion
withinContiguous
Markets
6
Diversified Loan Portfolio
Focus on strategic diversification,growth, and credit quality
Balance disciplined loan originationwith prudent lending standards
Focus on C&I and home equity lending
Key offerings include treasurymanagement, foreign exchange, cybersecurity, and lockbox services
Strong residential mortgage program
Commercial& Industrial
15%
SBA PPP8%
Consumer3%
HELOC6%
Residential R/E15%
Comm'l R/E: Land,Construction
6%
Comm'l R/E:ImprovedProperty
47%
$10.7 Billion Loan Portfolio
Note: loan and deposit data as of quarter ending 3/31/2021
Average loans to average deposits ratio of 85.3% provides opportunity forcontinued loan growth
Low cost of deposits provides a competitive advantage in the typical highercost Mid-Atlantic market
Manageable lending exposures
De-emphasized consumer and several CRE categories in recent years
Private Banking
$980MM in private bankingloans and deposits
3,350+ relationships
Growth opportunities fromshale-related private wealthmanagement
Expansion opportunities in KY,IN, and Mid-Atlantic
7
Strong Wealth Management Capabilities
Note: assets, loans, deposits, and clients as of 12/31/2020; chart financials as of 12/31 unless otherwise stated
2013 2015 2017 2019 2021
Loans Deposits
$100$270
$540
$770
Private Banking Loans and Deposits(as of 12/31) ($MM)
Trust & Investments
$5.2B of trust and mutual fundassets under management
6,000+ relationships
Growth opportunities fromshale-related private wealthmanagement
Expansion opportunities inKY, IN, and the Mid-Atlantic
WesMark Funds – sixproprietary funds acrossequities, bonds, and tacticalassets
Securities Brokerage
Securities investment sales
Licensed banker program
Investment advisory services
Regional player/coach program
Expand external businessdevelopment opportunities
Expansion opportunities in KY,IN, and Mid-Atlantic
CAGR37%
Insurance
Personal, commercial, title,health, and life
Expand title business in allmarkets
Applied quotation softwareutilization (personal)
Third-party administrator (TPA)services for small businesshealthcare plans
$2.3 $2.4$3.2
$4.3$5.2
2002 2008 2012 2018 2021
Trust Assets(Market Value as of 12/31) ($B)
CAGR4.6%
$980
3/31
3/31
Digital banking utilization
~74% of retail customers utilize online digital banking services
~4.5 million web and mobile logins per month
• Mobile 50% of total, with an average of 17 monthly logins per customer
Mobile wallet & mobile deposits increased 55% & 50% YoY, respectively
Zelle® to be utilized as a payment service beginning 2H2021
Digital acquisition
~50% of residential mortgage applications submitted via online portal
~200 deposit accounts opened per month
WesBanco Insurance Services launched white-label insurance capabilitieswith a web-based term-life insurance platform, and a fully-integrated digitalproperty & casualty insurance for consumers and small businesses
Core upgrade in 2021
Omni-channel presence – real-time account activity across all channels
Improved customer service through reduced manual activities
More efficient processing cost structure
Cloud-based architecture utilization
Early adoption to leverage modernized data and application platforms,combined with significant expense and performance benefits
Actively harnessing advanced artificial intelligence (AI) and robotic processautomation (RPA) technologies to automate business processes
Digital Platforms Drive Engagement & Efficiency
8Note: digital statistics as of 1Q2021; online residential mortgage applications and deposit account opening capabilities launched July 2019; WesBanco Insurance Services online term-life and P&Cinsurance capabilities launched November 2020 and January 2021, respectively
9
Benefits of Core Deposit Funding Advantage
Robust legacy deposit base, enhanced by shale energy-related royalties,provides funding advantage in Mid-Atlantic market
Reflecting the significantly lower interest rate environment, aggressivelyreduced deposit rates since March 2020
During the last five years:
Total deposits (excluding CDs) have grown organically at a 11% CAGR
Total demand deposits have grown organically at a 15% CAGR to represent~57% of total deposits
Note: text reflects period-end data and pie charts reflect quarterly averages; peer bank group includes all U.S. banks with total assets of $10B to $25B (as of most recent period)from S&P Global Market Intelligence (as of 5/3/2021) and represent simple averages
Non-intBearing
DD33%
IntBearing
DD23%
MoneyMkt14%
Savings18%
CDs12%
Avg Deposits as of 3/31/2021
Funding CostInterest-Bearing = 0.20%Total Deposits = 0.14%
[Peer Average Total Deposit Cost = 0.21%]
Non-intBearing
DD29%
IntBearing
DD21%
MoneyMkt14%
Savings18%
CDs18%
Avg Deposits as of 3/31/2020
Funding CostInterest-Bearing = 0.55%Total Deposits = 0.39%
[Peer Average Total Deposit Cost = 0.67%]
Non-intBearing
DD21%
IntBearing
DD19%
MoneyMkt16%
Savings18%
CDs26%
Avg Deposits as of 3/31/2016
Funding CostInterest-Bearing = 0.32%Total Deposits = 0.25%
[Peer Average Total Deposit Cost = 0.29%]
TotalDD
40%
TotalDD
50%
TotalDD
56%
10
Franchise Expansion
Targeted acquisitions in existingmarkets and new higher-growthmetro areas
Long-term focus on appropriatecapital management to enhanceshareholder value
Strong capital and liquidity, alongwith strong regulatory complianceprocesses, provides ability toexecute transactions quickly
Diligent efforts to maintain acommunity bank-oriented, value-based approach to our markets
History of successful acquisitionsthat have improved earnings
Contiguous Markets Radius
Franchise-Enhancing Acquisitions OLBK: announced Jul-19; closed Nov-19
FFKT: announced Apr-18; closed Aug-18
FTSB: announced Nov-17; closed Apr-18
YCB: announced May-16; closed Sep-16
ESB: announced Oct-14; closed Feb-15
FSBI: announced Jul-12; closed Nov-12
AmTrust: announced Jan-09; closed Mar-09
OAKF: announced Jul-07; closed Nov-07
Note: AmTrust was an acquisition of five branches
YCBFFKT FTSB
OAKF
ESB &FSBI
OLBK
AmTrustbranches
11
Focus on Positive Operating Leverage
Disciplined growth, balanced by a fundamental focus on expensemanagement and supported by franchise-enhancing acquisitions, in orderto deliver positive operating leverage and enhance shareholder value
$5.4 $5.5 $6.1 $6.1 $6.3 $8.5 $9.8 $9.8 $12.5 $15.7 $16.4 $17.1
60.81%
59.50%
60.98% 60.99%
59.59%
57.05% 56.69% 56.44%
54.60%
56.68% 56.38% 56.71%
50.00%
52.00%
54.00%
56.00%
58.00%
60.00%
62.00%
$0.0
$1.0
$2.0
$3.0
$4.0
$5.0
$6.0
$7.0
$8.0
$9.0
$10.0
$11.0
$12.0
$13.0
$14.0
$15.0
$16.0
$17.0
$18.0
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
Assets ($B) Efficiency Ratio (YTD)
9.6x 4.2x 0.7x 1.6x 10.9x 2.2x 1.9x 1.8x 2.5x 1.4x 1.8x 2.2xOperatingLeverage
Note: financial data as of 12/31; current year-to-date (YTD) data as of 3/31/2021; balance sheet data as of period ends; Efficiency Ratio presented on a fully taxable-equivalent (FTE)and annualized basis; please see the reconciliations in the appendix
YCBMerger
(Sep-16)
ESBMerger
(Feb-15)FidelityMerger
(Nov-12)
$10B AssetThreshold
PreparationsBegun
Lending & RevenueDiversification
Strategy Begun
Assetsup 218%
Efficiency Ratiodown 410bp FTSB Merger
(Apr-18)FFKT Merger
(Aug-18)
OLBKMerger
(Nov-19)
“DurbinAmendment”Impact Begun
(Jul-19)
Start ofPandemic &Fed FundsRate Cut to0.0-0.25%(Mar-20)
3/31
10.39% 10.74% 11.30% 10.51% 10.74%
10.27%10.47% 10.59%
9.85%9.56%
2017 2018 2019 2020 1Q21WSBC $10-25B Banks
14.12% 15.09% 12.89% 14.72% 14.95%
12.66% 12.81% 12.90%
13.66%13.41%
2017 2018 2019 2020 1Q21WSBC $10-25B Banks
Strong legacy of credit and risk management and regulatory compliance
Based upon conservative underwriting standards and approval processessupported by centralized back-office and loan funding functions
Mature enterprise risk management program headed by Chief Risk Officeraddressing key risks in all business lines and functional areas
Enhanced compliance and risk management system and testing platform
Strong and scalable BSA/AML function
Examined by CFPB for consumer compliance supervision
Seven consecutive “outstanding” CRA ratings since 2003
Strong and improving regulatory capital ratios significantly aboveregulatory requirements, and high tangible common equity (TCE) levels
Strong Risk Management and Capital Position
12
Tier 1 Risk-Based Capital Ratio Tier 1 Leverage Capital Ratio
Note: capital ratios enhanced by August 2020 issuance of $150MM of preferred stock; effective 4Q2019, as required by the Dodd- Frank Act for financial institutions with total assets>$15B, Tier 1 Capital Ratios negatively impacted by the movement of ~$130MM of TruPS from Tier 1 to Tier 2 risk-based capital; peer bank group includes all U.S. banks with totalassets of $10B to $25B (as of each period) from S&P Global Market Intelligence (as of 5/3/2021) and represent simple averages
memoWell-
Capitalized8.0%
Required6.0%
memoWell-
Capitalized5.0%
Required4.0%
13
Recent Successes and Accolades Based 100% on customer satisfaction and consumer feedback, WesBanco Bank
was again named, for the third year, one of the World’s Best Banks in anindependent ranking
WesBanco Bank received the America Saves Designation of Savings Excellencefor Banks, a designation from America Saves
For the 11th time since the list’s inception in 2010, WesBanco Bank was named tothe Forbes list of the Best Banks in America – coming in as the 12th best bank
Named to Newsweek magazine's inaugural ranking of America's Best Banks,recognizing those banks that best serve their customers needs, as well as beingnamed the Best Big Bank in the state of West Virginia
Bauer Financial again awarded WesBanco their highest rating as a “five-star” bank
The Central Ohio market of WesBanco Bank was awarded a “Top Workplaces”honor by Columbus C.E.O. magazine for the fifth consecutive year
The Western Pennsylvania market of WesBanco Bank was awarded a “TopWorkplaces” honor by The Pittsburgh Post Gazette for the third consecutive year
The FDIC awarded WesBanco Bank it’s 7th consecutive composite “Outstanding”rating for its most recent CRA performance
Kroll Bond Rating Agency assigned senior unsecured debt ratings of BBB+ toWesBanco, Inc. and A- to WesBanco Bank, Inc.
Note: Kroll Bond Rating Agency rating report issued 8/4/2020
Financial Overview
Q1 2021 Financial and Operational Highlights
15
Note: financial and operational highlights during the quarter ended March 31, 2021; loan growth includes approximately $824 million of loans funded through the Small BusinessAdministration’s Paycheck Protection Program (“SBA PPP”), as established by the CARES Act(1) Non-GAAP measure – please see reconciliation in appendix
Strong growth in pre-tax, pre-provision income
Continued emphasis on expense management
Improving macro-economic factors drove a $28million release of provision for credit losses
Key credit quality metrics remained at low levelsand favorable to peer bank averages
Positive growth in both loans and deposits
Mortgage banking income increased due to ahigh volume of originations
WesBanco is well-capitalized with solid liquidityand a strong balance sheet
Recent Board authorized stock repurchaseprogram, when combined with the remainder of theprevious authorization, represents approximately5% of outstanding shares
Pre-Tax, Pre-Provision Income(1)
$64.2 million, +3.6% YoY
Net Income Available to CommonShareholders and Diluted EPS(1)
$71.3 million; $1.06/diluted share
Efficiency Ratio(1)
56.71%
Mortgage Banking Income
$4.3 million, +234.2% YoY
Loan Growth
+3.4% YoY
Deposit Growth (x-CDs)
+28.9% YoY
Q1 2021 Total Portfolio Loans ($MM)
16
~7,750 SBA PPP loans totaling~$824 million (as of 3/31/2021)
During Q1 2021, ~2,330 customersapplied for and received forgivenessof their 2020 SBA PPP loans totaling$223 million; and, assisted >3,240businesses with 2021 SBA PPPloans totaling ~$344 million
C&I loan levels (x-SBA PPP) weredown year-over-year primarily due tolower utilization of revolving lines ofcredit (~33% vs. ~43% last year)
Q1 2021 residential real estate loanlevels impacted by retaining ~40% ofthe $326 million of origination dollarvolume (~57% refi) on balance sheet
Home equity and consumer loanlevels negatively impacted by payoffsdriven by utilization of residentialmortgage refinancing and higherpersonal savings
FixedRate35%
VariableRate65%
1Q2021 Commercial Loan Portfolio Index Mix
~$2.4MM of the commercial portfolio has floors, with~68% of these currently at their floors of 4.10% (avg)
<3 Months44%
3 to 24Months
3%
24 to 48Months
3%
48 to 60Months
47%
>60 Months3%
Variable Commercial Loan Repricing
Q1 2021 Net Interest Margin (NIM)
17
NIM negatively impacted by the lowinterest rate environment
As a result of higher cash balances,investment securities increased by$0.9 billion during Q1 2021, mostlyduring March
Aggressively reduced deposit ratesthroughout the past year
Q1 2021 interest-bearing depositfunding costs 20bp, or, whenincluding non-interest bearingdeposits, 14bp
Period-end FHLB borrowings of$0.4 billion, with remaining averagelife of less than one year, down $1.2billion year-over-year
SBA PPP loans benefited Q1 2021NIM by a net 11bp, mainly due to2020 SBA PPP originations forgiven
Note: commercial loan portfolio index mix excludes SBA PPP loans
Quarter Ending % H / (L) % H / (L)
($000s) 03/31/21 03/31/20 12/31/20
Trust fees $7,631 9.8% 13.0%
Service charges on deposits 4,894 (26.0%) (13.7%)
Electronic banking fees 4,365 2.6% (1.3%)
Net securities brokerage revenue 1,524 (9.2%) 8.7%
Bank-owned life insurance 1,709 (3.4%) (2.4%)
Mortgage banking income 4,264 234.2% (21.6%)
Net securities gains 279 (81.3%) (59.7%)
Net gain on OREO & other assets 175 3.6% nm
Other income 8,367 120.1% 27.7%
Total non-interest income $33,208 18.6% 1.5%
Q1 2021 Non-Interest Income
18
Mortgage banking fees increaseddue to an ~50% year-over-yearincrease in 1-to-4 family residentialmortgage origination dollar volume,and the associated sale of ~60% ofthose into the secondary market
Trust fees increased due to equitymarket improvement and organicgrowth in trust assets
Other income increased due tohigher loan swap-related income,which was primarily the result of$2.8 million of fair market valueadjustments in the current period ascompared to a negative $2.8 millionadjustment last year
Service charges on deposits werelower due to higher consumerdeposits associated with the threerounds of stimulus to-date andlower general consumer spending,resulting in fewer eligible accountfees
Note: OREO = other real estate owned
Quarter Ending % H / (L) % H / (L)
($000s) 03/31/21 03/31/20 12/31/20
Salaries and wages $36,890 (5.2%) (5.7%)
Employee benefits 10,266 (1.0%) (3.2%)
Net occupancy 7,177 1.3% 6.0%
Equipment 6,765 12.0% (0.7%)
Marketing 2,384 109.5% 42.3%
FDIC insurance 1,282 (39.3%) 0.3%
Amortization of intangible assets 2,896 (14.2%) (13.0%)
Other operating expenses 17,816 4.0% (0.9%)
Sub-total non-interest expense $85,476 (0.8%) (2.4%)
Restructuring & merger-related 851 (83.5%) 75.8%
Total non-interest expense $86,327 (5.5%) (2.0%)
Q1 2021 Non-Interest Expense
19
Total operating expenses remainedwell-controlled through company-wide efforts to manage openpositions and certain discretionaryexpenses
Efficiency ratio improved 98bp year-over-year to 56.71%
Lower salaries and wages reflect therecent financial center closures andthe management of FTEs
Anticipated gross cost savings of ~$6million from closures remain on trackto be fully realized during Q2 2021
Marketing expense was higher due toincreased product advertising andbrand awareness campaigns thatwere delayed from 2020 due to theCOVID-19 pandemic
Q1 restructuring & merger-relatedcharges related to the financialcenter optimization plan that wascompleted during January 2021
3.44% 3.52% 3.62% 3.37% 3.27%
3.71%3.86% 3.79%
3.35%
3.15%
2017 2018 2019 2020 2021 (3/31)WSBC $10-25B Banks
20
Comparable Operating Metrics
Disciplined execution upon growth strategies providing strong performancecompared to all U.S. banks with total assets from $10B to 25B(note: 2020 comparability impacted by timing of the adoption of CECL accounting standard and economic assumptions used by each bank)
56.4% 54.6% 56.7% 56.4% 56.7%
57.2%56.1%
55.4%
54.0%55.2%
2017 2018 2019 2020 2021 (3/31)WSBC $10-25B Banks
Note: financial data as of 12/31 YTD; current YTD data as of 3/31/2021; Current Expected Credit Losses (“CECL”) accounting standard adopted January 1, 2020 by WSBC; peerbank group includes all U.S. banks with total assets of $10B to $25B (as of each period) from S&P Global Market Intelligence (as of 5/3/2021) and represent simple averages(ROATE & ROAA are S&P calculations; Efficiency & NIM are company-reported); Efficiency & NIM presented on a fully taxable-equivalent (FTE) and annualized basis; please seethe reconciliations in the appendix
Efficiency Ratio
Return on Average AssetsReturn on Average Tangible Equity
Net Interest Margin
0.96% 1.26% 1.24% 0.73% 1.72%
1.04%
1.34% 1.34%
0.89%
1.35%
2017 2018 2019 2020 2021 (3/31)WSBC (x- merger & DTA revalue costs) WSBC $10-25B Banks
1.34%1.39%
1.09%
1.74%
0.77%
12.2% 16.2% 14.0% 8.6% 18.2%
11.5%
14.9% 14.6%
11.3%
15.5%
2017 2018 2019 2020 2021 (3/31)WSBC (x- merger & DTA revalue costs) WSBC $10-25B Banks
15.1%
17.8%
13.9%
9.2%
18.4%
0.50% 0.35% 0.35% 0.25% 0.23%
0.89%
0.71%
0.60% 0.60% 0.57%
2017 2018 2019 2020 2021 (3/31)WSBC $10-25B Banks
Non-Performing Assets as % of Total Assets
0.13% 0.06% 0.09% 0.06%0.02%
0.22%0.20% 0.20%
0.22%
0.13%
2017 YTD 2018 YTD 2019 YTD 2020 YTD 2021 (3/31)WSBC $10-25B Banks
Net Charge-Offs as % of Average Loans (annualized)
0.71% 0.64% 0.51% 1.72% 1.50%
0.95% 0.87% 0.80%
1.51% 1.49%
2017 2018 2019 2020 2021 (3/31)
WSBC $10-25B Banks
Allowance for Credit Losses as % of Total Loans
1.17% 1.08% 2.17% 4.59% 4.26%
3.16% 2.98% 3.02%
4.76%
3.76%
2017 2018 2019 2020 2021 (3/31)WSBC $10-25B Banks
Criticized & Classified Loans as % of Total Loans
Favorable asset quality measures compared to all U.S. banks with totalassets from $10B to 25B(note: 2020 ACL comparability impacted by timing of the adoption of CECL accounting standard and economic assumptions used by each bank)
Solid Legacy of Credit Quality
21Note: financial data as of quarter ending 12/31; current year data as of 3/31/2021; Current Expected Credit Losses (“CECL”) accounting standard adopted January 1, 2020 by WSBC;peer bank group includes all U.S. banks with total assets of $10B to $25B (as of each period) from S&P Global Market Intelligence (as of 5/3/2021) and represent simple averages
Returning Value to Shareholders
Focus on appropriate capital allocation to provide financial flexibility whilecontinuing to enhance shareholder value through earnings growth andeffective capital management
Capital management strategy: dividends, share repurchases, acquisitions
Q1 2021 dividend yield 3.5%, compared to 2.2% for bank group
On April 22, 2021, WesBanco’s Board of Directors authorized the adoption of anew stock repurchase program, which, when combined with the remainder ofthe previous authorization, represents ~5% of outstanding shares
22
Note: dividend through February 2021 declaration announcement; WSBC dividend payout ratio based on earnings per share excluding merger-related costs and including impact fromadoption of the Current Expected Credit Losses (“CECL”) accounting standard; WSBC dividend yield based upon 5/3/2021 closing stock price of $37.28; peer bank group includes allU.S. banks with total assets of $10B to $25B (as of most recent period) from S&P Global Market Intelligence (as of 5/3/2021) and represent simple averages
Tangible Book Value per Share ($)Quarterly Dividend per Share ($)
$0.14
$0.33
4Q10 1Q21
+136%
$12.09
$22.21
4Q10 1Q21
+84%
Appendix
Q1 2021 Key Metrics
24
Note: PTPP = pre-tax, pre-provision(1) Non-GAAP measure – please see reconciliation in appendix(2) Excludes restructuring and merger-related expenses
H / (L) H / (L)
03/31/21 03/31/20 12/31/20
Return on Average Assets (1)(2) 1.74% 104bp 52bp
PTPP Return on Average Assets (1)(2) 1.57% (1bp) 1bp
Return on Average Tangible Equity (1)(2) 18.39% 1,021bp 511bp
PTPP Return on Average Tangible Equity (1)(2) 16.78% (97bp) (22bp)
Tangible Book Value per Share ($) (1) $22.21 4.0% 2.1%
Efficiency Ratio (1)(2) 56.71% (98bp) (35bp)
Net Interest Margin 3.27% (27bp) (4bp)
Non-Performing Assets to Total Assets 0.23% (3bp) (2bp)
Net Loan Charge-offs to Average Loans (annualized) 0.02% (16bp) 0bp
Quarter Ending
The decrease in the allowance was driven by improvement in the macroeconomicforecast and changes in portfolio mix slightly offset by COVID-19 pandemic relatedadjustments
Allowance coverage ratio of 1.50%, or, excluding SBA PPP loans, 1.62%
Excludes fair market value adjustments on previously acquired loans representing 0.34%of total portfolio loans
Q1 2021 Current Expected Credit Loss (CECL)
25Note: ACL at 3/31/2021 excludes off-balance sheet credit exposures of $6.7 million; on January 1, 2020, WSBC adopted the CECL accounting standard (prior to this date, theallowance for credit losses was calculated under the incurred method)
EconomicFactors
PortfolioChanges / Other
PandemicQualitative Factors
Changes tomacroeconomicvariables
Includes changesin both quantitativeand qualitativeeconomic factors
Changes inprepaymentspeeds
Changes inportfolio mix
Changes incredit quality
Aging of existingportfolio
($000s)
Qualitativeadjustments forCOVID-19pandemic, regionalmacroeconomicfactors, andhospitality industryclassification loans
Reconciliation: Efficiency Ratio & Operating Leverage
26
Note: “efficiency ratio” is non-interest expense excluding restructuring and merger-related expense divided by total income; FTE represents fully taxable equivalent; Old Line Bancsharesmerger closed November 2019; Farmers Capital Bank Corporation merger closed August 2018; First Sentry Bancshares merger closed April 2018; Your Community Bankshares mergerclosed September 2016; ESB Financial merger closed February 2015; Fidelity Bancorp merger closed November 2012; AmTrust 5 branch acquisition closed March 2009
($000s) 03/31/20 12/31/20 03/31/21 12/31/10 12/31/11 12/31/12 12/31/13 12/31/14 12/31/15 12/31/16 12/31/17 12/31/18 12/31/19 12/31/20
Non-Interest Expense $91,333 $88,069 $86,327 $141,152 $140,295 $150,120 $160,998 $161,633 $193,923 $208,680 $220,860 $265,224 $312,208 $354,845
Restructuring & Merger-Related
Expense($5,164) ($484) ($851) ($175) $0 ($3,888) ($1,310) ($1,309) ($11,082) ($13,261) ($945) ($17,860) ($16,397) ($9,725)
Non-Interest Expense (excluding
restructuring & merger-related
expense)
$86,169 $87,585 $85,476 $140,977 $140,295 $146,232 $159,688 $160,324 $182,841 $195,419 $219,915 $247,364 $295,811 $345,120
Net Interest Income (FTE-basis) $121,346 $120,790 $117,517 $172,235 $175,885 $175,027 $192,556 $200,545 $246,014 $263,232 $300,790 $352,760 $405,222 $483,999
Non-Interest Income $28,009 $32,705 $33,208 $59,599 $59,888 $64,775 $69,285 $68,504 $74,466 $81,499 $88,840 $100,276 $116,716 $128,185
Total Income $149,355 $153,495 $150,725 $231,834 $235,773 $239,802 $261,841 $269,049 $320,480 $344,731 $389,630 $453,036 $521,938 $612,184
Efficiency Ratio 57.69% 57.06% 56.71% 60.81% 59.50% 60.98% 60.99% 59.59% 57.05% 56.69% 56.44% 54.60% 56.68% 56.38%
Net Interest Income (before provision
expense)(non-FTE)$120,162 $119,712 $116,478 $166,092 $169,365 $168,351 $185,487 $193,228 $236,987 $253,330 $290,295 $347,236 $399,904 $479,480
Non-Interest Income $28,009 $32,705 $33,208 $59,599 $59,888 $64,775 $69,285 $68,504 $74,466 $81,499 $88,840 $100,276 $116,716 $128,185
Total Revenue $148,171 $152,417 $149,686 $225,691 $229,253 $233,126 $254,772 $261,732 $311,453 $334,829 $379,135 $447,512 $516,620 $607,665
YoY Change in Total Revenue $1,515 $2,730 $3,562 $3,873 $21,646 $6,960 $49,721 $23,376 $44,306 $68,377 $69,108 $91,045
YoY Change in Non-Interest Expense
(excluding restructuring & merger-
related expense)
($693) ($6,856) ($682) $5,937 $13,456 $636 $22,517 $12,578 $24,496 $27,449 $48,447 $49,309
Operating Leverage 2.2x 9.6x 4.2x 0.7x 1.6x 10.9x 2.2x 1.9x 1.8x 2.5x 1.4x 1.8x
Three Months Ending Twelve Months Ending
Reconciliation: Pre-Tax, Pre-Provision Income (PTPP) and Ratios
27Note: Old Line Bancshares merger closed November 2019
($000s) 03/31/20 12/31/20 03/31/21
Income before Provision for Income Taxes $27,017 $64,557 $91,317
Provision for Credit Losses 29,821 (209) (27,958)
Pre-Tax, Pre-Provision Income ("PTPP") $56,838 $64,348 $63,359
Restructuring and Merger-Related Expense 5,164 484 851
PTPP (excluding restructuring and merger-related expense) $62,002 $64,832 $64,210
PTPP (excluding restructuring and merger-related expense) $62,002 $64,832 $64,210
Average Total Assets 15,784,939 16,546,761 16,636,258
PTPP Return on Average Assets 1.58% 1.56% 1.57%
PTPP (excluding restructuring and merger-related expense) $62,002 $64,832 $64,210
Amortization of Intangibles 3,374 3,327 2,896
PTPP before Amortization of Intangibles (excluding restructuring and merger-related expense) $65,376 $68,159 $67,106
Average Total Shareholders' Equity $2,594,069 $2,744,936 $2,770,416
Average Goodwill and Other Intangibles (net of deferred tax liability) (1,112,327) (1,150,184) (1,148,171)
Average Tangible Equity $1,481,742 $1,594,752 $1,622,245
PTPP Return on Average Tangible Equity 17.75% 17.00% 16.78%
Three Months Ending
Reconciliation: Net Income, EPS & Tangible Book Value per Share
28Note: Current Expected Credit Losses (“CECL”) accounting standard adopted January 1, 2020 by WSBC; Old Line Bancshares merger closed November 2019
($000s, except earnings per share) 12/31/10 03/31/20 12/31/20 03/31/21
Net Income Available to Common Shareholders n/a $23,396 $50,210 $70,584
Restructuring and Merger-Related Expense (net of tax) n/a 4,080 383 672
Net Income Available to Common Shareholders (excluding restructuring
and merger-related expense)n/a $27,476 $50,593 $71,256
Net Income Available to Common Shareholders per Diluted Share ($) n/a $0.35 $0.75 $1.05
Restructuring and Merger-Related Expense (net of tax) n/a 0.06 0.01 0.01
Net Income Available to Common Shareholders per Diluted Share ($)
(excluding restructuring and merger-related expense)n/a $0.41 $0.76 $1.06
Average Common Shares Outstanding – Diluted (000s) n/a 67,587 67,304 67,335
Total Shareholders's Equity (period-end) $606,863 $2,586,060 $2,756,737 $2,785,522
Goodwill & Other Intangible Assets (net of deferred tax liability)(period-end) (285,559) (1,154,033) (1,149,161) (1,146,874)
Preferred Shareholders' Equity 0 0 (144,484) (144,484)
Tangible Common Equity (period-end) $321,304 $1,432,027 $1,463,092 $1,494,164
Common Shares Outstanding (period-end) (000s) 26,587 67,058 67,255 67,282
Tangible Common Book Value per Share ($) $12.09 $21.36 $21.75 $22.21
Three Months Ending
29Note: Current Expected Credit Losses (“CECL”) accounting standard adopted January 1, 2020 by WSBC; Old Line Bancshares merger closed November 2019; Farmers CapitalBank Corporation merger closed August 2018; First Sentry Bancshares merger closed April 2018; Your Community Bankshares merger closed September 2016
Reconciliation: Return on Average Assets
($000s) 03/31/20 03/31/21 12/31/17 12/31/18 12/31/19 12/31/20
Net Income Available to Common Shareholders $23,396 $70,584 $94,482 $143,112 $158,873 $119,400
Restructuring and Merger-Related Expenses (net of tax) $4,080 $672 $614 $14,109 $12,954 $7,683
Net Income Available to Common Shareholders (excluding restructuring
& merger-related expense)$27,476 $71,256 $107,876 $157,221 $171,827 $127,083
Average Assets $15,784,939 $16,636,258 $9,854,312 $11,337,379 $12,853,920 $16,442,704
Return on Average Assets 0.60% 1.72% 0.96% 1.26% 1.24% 0.73%
Return on Average Assets (excluding restructuring & merger-related
expense)0.70% 1.74% 1.09% 1.39% 1.34% 0.77%
Three Months Ending Twelve Months Ending
30
(1) amortization of intangibles tax effected at 21% for 2018 forward, and 35% for all prior periodsNote: Current Expected Credit Losses (“CECL”) accounting standard adopted January 1, 2020 by WSBC; Old Line Bancshares merger closed November 2019; Farmers CapitalBank Corporation merger closed August 2018; First Sentry Bancshares merger closed April 2018; Your Community Bankshares merger closed September 2016
Reconciliation: Return on Average Tangible Equity
($000s) 03/31/20 03/31/21 12/31/17 12/31/18 12/31/19 12/31/20
Net Income Available to Common Shareholders $23,396 $70,584 $94,482 $143,112 $158,873 $119,400
Amortization of Intangibles (1) $2,665 $2,288 $3,211 $5,514 $8,169 $10,595
Net Income Available to Common Shareholders before Amortization
of Intangibles$26,061 $72,872 $97,693 $148,626 $167,042 $129,995
Restructuring and Merger-Related Expenses (net of tax) $4,080 $672 $614 $14,109 $12,954 $7,683
Net Income Available to Common Shareholders before Amortization
of Intangibles and Restructuring & Merger-Related Expenses$30,141 $73,544 $111,087 $162,735 $179,996 $137,678
Average Total Shareholders Equity $2,594,069 $2,770,416 $1,383,935 $1,648,425 $2,119,995 $2,651,402
Average Goodwill & Other Intangibles, Net of Deferred Tax Liabilities ($1,112,327) ($1,148,171) ($584,885) ($732,978) ($927,974) ($1,141,528)
Average Tangible Equity $1,481,742 $1,622,245 $799,050 $915,447 $1,192,021 $1,509,874
Return on Average Tangible Equity 7.07% 18.22% 12.23% 16.24% 14.01% 8.61%
Return on Average Tangible Equity Excluding Restructuring & Merger-
Related Expenses8.18% 18.39% 13.90% 17.78% 15.10% 9.12%
Three Months Ending Twelve Months Ending