WesBanco announces increased earnings
WHEELING – WesBanco Inc., a Wheeling-based multi-state bank holding company with operations in the Parkersburg area, has announced increased earnings for the three months ending March 31.
Net income for the three months was $16.0 million compared to $12.0 million for the first quarter of 2012, representing an increase of 33.6 percent, while diluted earnings per share were 55 cents, compared to 45 cents per share for the first quarter of 2012, representing an increase of 22.2 percent, Paul M. Limbert, president and chief executive officer, said.
Net income, excluding merger-related expenses of $1.2 million, was $16.8 million compared to $12 million for 2012, representing an increase of 40 percent, while diluted earnings per share, excluding merger-related expenses, were 57 cents (non-GAAP measure,) compared to 45 cents per share for 2012. The increased earnings improved the return on average assets to 1.07 percent from .87 percent in the first quarter of last year and the return on average tangible equity (non-GAAP measure) grew to 16.72 percent from 13.93 percent.
“The 2013 first quarter financial results were very positive. We are pleased with the continued improvement in operating results and the opportunities that our fourth quarter acquisition of Pittsburgh-based Fidelity Bancorp Inc. provides in our expanded western Pennsylvania market,” Limbert said. “The Fidelity acquisition has already contributed to the increase in net interest income and many components of non-interest income. In February, we changed the name on each of the acquired branches and launched our initial marketing campaign. The operations, communication, branch support and accounting systems were also successfully converted and we are now focused on growing our Pittsburgh customer base and loan originations, while providing expanded products and services to our newest market.”
Total assets at March 31 increased 8.7 percent or $484.8 million from March 31, 2012, due to the acquisition of Fidelity and organic growth. The Fidelity acquisition added 13 branches to WesBanco, located throughout the Pittsburgh metropolitan area.
Portfolio loans increased $460.1 million or 14.3 percent from March 31, 2012, with $312.3 million from western Pennsylvania, which includes the Fidelity acquired loans, and the remaining $147.8 million from other WesBanco regions as originations continued to outpace paydowns. Separate from the western Pennsylvania region, WesBanco grew outstanding loans 4.9 percent from March 31, 2012, as a result of a 52.2 percent growth in loan originations from the prior year.
Loan growth, excluding the acquisition, and declines in higher cost borrowings of $146.4 million over the last 12 months were funded by deposit growth and the use of other liquid assets. Deposits increased $532.3 million or 11.9 percent from March 31, 2012, with $433.3 million from the western Pennsylvania region. Total assets at March 31 were relatively unchanged compared to 2012 year-end, as were total loans.
However, originated loans increased 23 percent in the first quarter compared to the fourth quarter of last year and the commercial pipeline remains strong.
WesBanco has continued to maintain strong regulatory capital ratios. At March 31, tier I leverage was 8.92 percent, tier I risk-based capital was 12.88 percent and total risk-based capital was 14.13 percent, all of which were relatively unchanged from the end of the first quarter of 2012.
Both consolidated and bank-level regulatory capital ratios are well above the applicable “well-capitalized” standards promulgated by bank regulators. Total tangible equity to tangible assets (non-GAAP measure) was 6.97 percent at March 31, a 21-basis point increase from a year ago. Strong earnings and improved capital have enabled WesBanco to increase its dividend five times over the last two years, cumulatively a 36 percent increase.
The current 19 cents per share quarterly dividend rate represents a dividen yield of around 3.2 percent.
WesBanco has significantly improved credit quality over the past year. Total non-performing loans were $63.1 million or 1.71 percent of total loans at March 31, which represents a 22 percent decrease from $81 million or 2.51 percent at March 31, 2012.
Criticized and classified loans decreased 29.1 percent over the last 12 months to $168.1 million at March 31. Criticized and classified loans were 4.56 percent of total loans compared to 7.35 percent at the end of the 2012 first quarter.
Net charge-offs for the first quarter of 2013 were $3 million, or .34 percent of average portfolio loans, and represented the lowest charge-off level in more than three years. Net charge-offs were $6.6 million or .82 percent for the first quarter of 2012.
As a result of the improvement in all measures of credit quality, the provision for credit losses was $2.1 million for the first quarter of 2013 compared to $6.2 million for the same quarter of 2012. The allowance for loan losses represented 1.4 percent of total portfolio loans at the end of the first quarter.
However, if the acquired Fidelity loans (which were recorded at fair value at the date of acquisition) were excluded from the ratio, the allowance would approximate 1.5 percent of the adjusted loan total compared to 1.69 percent at March 31, 2012.