WesBanco Inc. (WSBC, Financial) filed Quarterly Report for the period ended 2012-09-30.
Wesbanco, Inc. has a market cap of $546.4 million; its shares were traded at around $21.87 with a P/E ratio of 12 and P/S ratio of 1.9. The dividend yield of Wesbanco, Inc. stocks is 3.5%.
Non-interest income increased $1.4 million or 9.3% in the third quarter of 2012 and $3.1 million or 6.9% in the nine month period ended September 30, 2012 compared to the same periods in 2011. For the third quarter of 2012, trust fees increased 11.1% as an organization-wide coordination of trust and investment development activities increased assets under management. Net gains on sales of mortgage loans increased $0.7 million in the third quarter and $0.6 million year-to-date due to increased volume and margins on loans sold. Electronic banking fees increased 6.2% in the third quarter and 13.9% in the first nine months of 2012 due to increased transaction volumes. The net gain (loss) on other real estate owned improved $0.7 million in the year-to-date period. Net security gains were $0.3 million in the third quarter and $1.7 million year-to-date. These improvements were partially offset by decreases in service charges on deposits of $0.5 million in the third quarter and $1.4 million in the first nine months of 2012, primarily from decreases in customer overdraft fees.
Net interest income, which is WesBancos largest source of revenue, is the difference between interest income on earning assets, primarily loans and securities, and interest expense on liabilities, comprised of deposits and short and long-term borrowings. Net interest income is affected by the general level of and changes in interest rates, the steepness of the yield curve, changes in the amount and composition of interest earning assets and interest bearing liabilities, as well as the frequency of repricing and turnover of those assets and liabilities. Net interest income increased 0.4% to $41.7 million in the third quarter of 2012 compared to the second quarter of 2012 due to portfolio loan growth in both the second and third quarters of the current year, while the net interest margin was relatively stable for the first nine months of 2012 in the range of 3.5% to 3.6%. Net interest income decreased $1.2 million or 2.8% in the third quarter of 2012 and $2.4 million in the first nine months of 2012 compared to the same periods in 2011 due to the low interest rate environment resulting in decreasing rates earned on interest earning assets. However, average earning assets increased $102.5 million or 2.1% in the third quarter and $121.3 million or 2.5% in the year-to-date period, including growth in average portfolio loan balances in both the third quarter and year-to-date periods. In addition to the increase in portfolio loans, the increase in average earning assets was also due to increased investments in securities funded by deposit increases. Total average deposits increased by $160.4 million or 3.8% in the third quarter and 4.4% in the year-to-date periods of 2012, primarily through increases in demand deposit accounts as a result of marketing campaigns, customer incentives, wealth management and business initiatives, although savings accounts also increased by $69.3 million in the third quarter of 2012. In addition, cost of funds continued to improve due to lower offered rates on maturing certificates of deposit, an increase in balances of lower-cost products and lower balances of higher-cost FHLB borrowings. The net interest margin declined by 16 basis points in both the third quarter and year-to-date periods of 2012 to 3.51% and 3.53%, respectively, compared to the same periods of 2011. The low interest rate environment continues to result in reduced rates earned on the securities and loan portfolios, but with a smaller decrease in lower average rates paid on interest bearing liabilities. The average rate on earning assets decreased by 41 basis points while the rate on interest bearing liabilities declined by 25 basis points in the third quarter of 2012.
Non-interest income is a significant source of revenue and an important part of WesBancos results of operations. WesBanco offers its customers a wide range of retail, commercial, investment and electronic banking services, which are viewed as a vital component of WesBancos ability to attract and maintain customers, as well as providing additional fee income beyond normal spread-related income to WesBanco. Non-interest income increased $1.4 million or 9.3% in the third quarter and $3.1 million or 6.9% in the first nine months of 2012 compared to the same periods in 2011. For the third quarter of 2012, trust fees increased 11.1% as an organization-wide coordination of trust and investment development activities increased assets under management. Net gains on sales of mortgage loans increased $0.7 million in the third quarter and $0.6 million year-to-date due to increased volume and margins on loans sold. Electronic banking fees increased 6.2% in the third quarter and 13.9% in the first nine months of 2012 due to increased transaction volumes. The net gain (loss) on other real estate owned improved $0.7 million in the year-to-date period. Net security gains were $0.3 million in the third quarter and $1.7 million year-to-date. These improvements were partially offset by decreases in service charges on deposits of $0.5 million in the third quarter and $1.4 million in the first nine months of 2012, primarily from decreases in customer overdraft fees.
Total loans increased 3.8% from December 31, 2011 to September 30, 2012 as loan production increased 29.6% in the first nine months of 2012 compared to the same period of 2011. CRE land and construction loans decreased $5.7 million or 3.2% as completed projects outpaced new construction loans funded during the period. CRE improved property loans increased $37.3 million or 2.5% as a result of the reclassification of construction loans and new originations, net of unscheduled principal reductions or payoffs. C&I loans increased $21.5 million or 5.0% due to an increase in the usage of lines of credit and new originations. Residential real estate loans, excluding land and construction, increased $61.5 million or 10.1% primarily due to increased loan production. Overall mortgage production during the nine months ended September 30, 2012 increased 61% over the comparable 2011 period. Additionally, approximately 66% of all mortgage originations were retained in the portfolio in the first nine months of 2012, compared to 64% in the comparable 2011 period. Home equity lines of credit increased slightly by 1.6% from December 31, 2011, while consumer loans decreased $6.2 million or 2.4% due to reduced loan demand as consumers continued to deleverage, as well as tighter underwriting standards for certain types of consumer loans. Loans held for sale increased $8.1 million due to timing differences on scheduled closings, increased production and managements strategy to sell more loans into the secondary market late in the third quarter of 2012. All loan categories were also impacted by a continued focus on improving the overall profitability and quality of the loan portfolio through disciplined underwriting and pricing practices, as well as the current highly competitive lending market for high quality borrowers.
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Wesbanco, Inc. has a market cap of $546.4 million; its shares were traded at around $21.87 with a P/E ratio of 12 and P/S ratio of 1.9. The dividend yield of Wesbanco, Inc. stocks is 3.5%.
Highlight of Business Operations:
The provision for credit losses was $4.5 million and $16.6 million for the third quarter and first nine months of 2012, respectively, compared to $10.8 million and $25.7 million for the same periods of 2011. The decrease in the provision is supported by reductions in net charge-offs, and non-performing, classified and criticized loans. Total non-performing loans represented 1.76% of total loans at September 30, 2012 compared to 2.08% at June 30, 2012 and 2.60% at September 30, 2011. The allowance for loan losses to non-performing loans, loans past due and classified and criticized loans at September 30, 2012 is at the highest level in over two years. The allowance for loan losses to non-performing loans was 90% at September 30, 2012 compared to 66% at September 30, 2010. Total non-performing loans at September 30, 2012 decreased $25.1 million or 29.8% from September 30, 2011. Classified and criticized loans decreased $73.3 million or 27.1% from September 30, 2011. From September 30, 2011, loan sales decreased non-performing loans by $9.3 million and classified and criticized loans by $10.2 million. Loans past due 30 days or more and accruing interest represented 0.62% of total portfolio loans at September 30, 2012 compared to 0.93% at September 30, 2011. Net charge-offs for the third quarter of 2012 were $4.6 million compared to $17.4 million for the third quarter of 2011. Net charge-offs for the first nine months of 2012 were $18.0 million compared to $32.6 million for the same period of 2011. Annualized net charge-offs for the third quarter and first nine months of 2012 represent 0.54% and 0.73% of average portfolio loans, respectively, compared to 2.11% and 1.33% for the same periods of 2011.Non-interest income increased $1.4 million or 9.3% in the third quarter of 2012 and $3.1 million or 6.9% in the nine month period ended September 30, 2012 compared to the same periods in 2011. For the third quarter of 2012, trust fees increased 11.1% as an organization-wide coordination of trust and investment development activities increased assets under management. Net gains on sales of mortgage loans increased $0.7 million in the third quarter and $0.6 million year-to-date due to increased volume and margins on loans sold. Electronic banking fees increased 6.2% in the third quarter and 13.9% in the first nine months of 2012 due to increased transaction volumes. The net gain (loss) on other real estate owned improved $0.7 million in the year-to-date period. Net security gains were $0.3 million in the third quarter and $1.7 million year-to-date. These improvements were partially offset by decreases in service charges on deposits of $0.5 million in the third quarter and $1.4 million in the first nine months of 2012, primarily from decreases in customer overdraft fees.
Net interest income, which is WesBancos largest source of revenue, is the difference between interest income on earning assets, primarily loans and securities, and interest expense on liabilities, comprised of deposits and short and long-term borrowings. Net interest income is affected by the general level of and changes in interest rates, the steepness of the yield curve, changes in the amount and composition of interest earning assets and interest bearing liabilities, as well as the frequency of repricing and turnover of those assets and liabilities. Net interest income increased 0.4% to $41.7 million in the third quarter of 2012 compared to the second quarter of 2012 due to portfolio loan growth in both the second and third quarters of the current year, while the net interest margin was relatively stable for the first nine months of 2012 in the range of 3.5% to 3.6%. Net interest income decreased $1.2 million or 2.8% in the third quarter of 2012 and $2.4 million in the first nine months of 2012 compared to the same periods in 2011 due to the low interest rate environment resulting in decreasing rates earned on interest earning assets. However, average earning assets increased $102.5 million or 2.1% in the third quarter and $121.3 million or 2.5% in the year-to-date period, including growth in average portfolio loan balances in both the third quarter and year-to-date periods. In addition to the increase in portfolio loans, the increase in average earning assets was also due to increased investments in securities funded by deposit increases. Total average deposits increased by $160.4 million or 3.8% in the third quarter and 4.4% in the year-to-date periods of 2012, primarily through increases in demand deposit accounts as a result of marketing campaigns, customer incentives, wealth management and business initiatives, although savings accounts also increased by $69.3 million in the third quarter of 2012. In addition, cost of funds continued to improve due to lower offered rates on maturing certificates of deposit, an increase in balances of lower-cost products and lower balances of higher-cost FHLB borrowings. The net interest margin declined by 16 basis points in both the third quarter and year-to-date periods of 2012 to 3.51% and 3.53%, respectively, compared to the same periods of 2011. The low interest rate environment continues to result in reduced rates earned on the securities and loan portfolios, but with a smaller decrease in lower average rates paid on interest bearing liabilities. The average rate on earning assets decreased by 41 basis points while the rate on interest bearing liabilities declined by 25 basis points in the third quarter of 2012.
Non-interest income is a significant source of revenue and an important part of WesBancos results of operations. WesBanco offers its customers a wide range of retail, commercial, investment and electronic banking services, which are viewed as a vital component of WesBancos ability to attract and maintain customers, as well as providing additional fee income beyond normal spread-related income to WesBanco. Non-interest income increased $1.4 million or 9.3% in the third quarter and $3.1 million or 6.9% in the first nine months of 2012 compared to the same periods in 2011. For the third quarter of 2012, trust fees increased 11.1% as an organization-wide coordination of trust and investment development activities increased assets under management. Net gains on sales of mortgage loans increased $0.7 million in the third quarter and $0.6 million year-to-date due to increased volume and margins on loans sold. Electronic banking fees increased 6.2% in the third quarter and 13.9% in the first nine months of 2012 due to increased transaction volumes. The net gain (loss) on other real estate owned improved $0.7 million in the year-to-date period. Net security gains were $0.3 million in the third quarter and $1.7 million year-to-date. These improvements were partially offset by decreases in service charges on deposits of $0.5 million in the third quarter and $1.4 million in the first nine months of 2012, primarily from decreases in customer overdraft fees.
Total loans increased 3.8% from December 31, 2011 to September 30, 2012 as loan production increased 29.6% in the first nine months of 2012 compared to the same period of 2011. CRE land and construction loans decreased $5.7 million or 3.2% as completed projects outpaced new construction loans funded during the period. CRE improved property loans increased $37.3 million or 2.5% as a result of the reclassification of construction loans and new originations, net of unscheduled principal reductions or payoffs. C&I loans increased $21.5 million or 5.0% due to an increase in the usage of lines of credit and new originations. Residential real estate loans, excluding land and construction, increased $61.5 million or 10.1% primarily due to increased loan production. Overall mortgage production during the nine months ended September 30, 2012 increased 61% over the comparable 2011 period. Additionally, approximately 66% of all mortgage originations were retained in the portfolio in the first nine months of 2012, compared to 64% in the comparable 2011 period. Home equity lines of credit increased slightly by 1.6% from December 31, 2011, while consumer loans decreased $6.2 million or 2.4% due to reduced loan demand as consumers continued to deleverage, as well as tighter underwriting standards for certain types of consumer loans. Loans held for sale increased $8.1 million due to timing differences on scheduled closings, increased production and managements strategy to sell more loans into the secondary market late in the third quarter of 2012. All loan categories were also impacted by a continued focus on improving the overall profitability and quality of the loan portfolio through disciplined underwriting and pricing practices, as well as the current highly competitive lending market for high quality borrowers.
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