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Section 1: 8-K (FORM 8-K ON 3RD QTR 2019 EARNINGS RELEASE)

wsbc-8k_20191023.htm
false 0000203596 0000203596 2019-10-23 2019-10-23

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

 

WASHINGTON, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

 

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): October 23, 2019

 

 

Wesbanco, Inc.

(Exact name of Registrant as Specified in Its Charter)

 

 

West Virginia

000-08467

55-0571723

(State or Other Jurisdiction

of Incorporation)

(Commission File Number)

(IRS Employer

Identification No.)

 

 

 

1 Bank Plaza,

Wheeling, WV

 

26003

(Address of Principal Executive Offices)

 

(Zip Code)

 

Registrant’s Telephone Number, Including Area Code: (304) 234-9000

Former Name or Former Address, if Changed Since Last Report: Not Applicable

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instructions A.2. below):

 

☒

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class

 

Trading

Symbol

 

Name of each exchange on which registered

Common Stock $2.0833 Par Value

 

WSBC

 

NASDAQ Global Select Market

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

 

 

 

 

 

 

 

Item 2.02 Results of Operations and Financial Condition

 

WesBanco, Inc. issued a press release today announcing earnings for the three and nine months ended September 30, 2019.  The press release is attached as Exhibit 99.1 to this report and is incorporated herein by reference.  

 

Item 8.01 Other Events

 

The information set forth under Item 2.02 of this Current Report on Form 8-K is incorporated herein by reference in this Item 8.01.

 

Old Line Bancshares, Inc. (“Old Line”) and its individual directors were named as defendants in a suit filed on October 1, 2019, styled Gabriel v. Old Line Bancshares, Inc., Case No. 19-CV-9095, in the United States District Court for the Southern District of New York, alleging violations of the Securities Exchange Act of 1934 in connection with the proposed transactions contemplated by the previously announced Agreement and Plan of Merger, dated as of July 23, 2019, by and among Wesbanco, Inc. (“Wesbanco”), Wesbanco Bank, Inc., Old Line, and Old Line Bank, pursuant to which Old Line will merge with and into Wesbanco (the “Merger”).  The complaint alleges, among other things, that the proxy material filed by Old Line Bancshares in connection with the special meeting of Old Line stockholders to consider the Merger contained materially misleading and incomplete information.  The complaint seeks injunctive relief and damages.  By Order entered October 7, 2019, the District Court established a deadline of October 10, 2019, for the filing of a request for a preliminary injunction and no such motion was timely filed.  Wesbanco does not believe that a material risk to the proposed Merger related to such proceeding is reasonably possible.  However, at this time, it is not possible to predict the outcome of the lawsuit or the impact, if any, on Wesbanco, Old Line Bancshares or the Merger.

 

 

Additional Information about the Merger and Where to Find It

 

On July 23, 2019, Wesbanco and Wesbanco Bank, Inc. (“Wesbanco Bank”) entered into an Agreement and Plan of Merger with Old Line and Old Line Bank, Inc. (“Old Line Bank”), pursuant to which Old Line will be merged with and into Wesbanco, with Wesbanco being the surviving company (the “Merger”), and Old Line Bank will be merged with and into Wesbanco Bank, with Wesbanco Bank the surviving bank.  In connection with the proposed Merger, Wesbanco filed with the Securities and Exchange Commission (“SEC”) a Registration Statement on Form S-4 which was declared effective on September 23, 2019, that includes a proxy statement of Old Line and Wesbanco and a prospectus of Wesbanco, as well as other relevant documents concerning the proposed transaction.  SHAREHOLDERS OF WESBANCO, STOCKHOLDERS OF OLD LINE AND OTHER INTERESTED PARTIES ARE URGED TO READ THE REGISTRATION STATEMENT AND THE PROXY STATEMENT/PROSPECTUS REGARDING THE MERGER AND ANY OTHER RELEVANT DOCUMENTS FILED WITH THE SEC, AS WELL AS ANY AMENDMENTS OR SUPPLEMENTS TO THOSE DOCUMENTS, BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION. The Proxy Statement/Prospectus dated September 23, 2019 was mailed to shareholders of Wesbanco and stockholders of Old Line on or around September 26, 2019. The Old Line stockholders meeting and the Wesbanco shareholders meeting are both scheduled for October 29, 2019. In addition, the Registration Statement on Form S-4, which includes the Proxy Statements/Prospectus, and other related documents filed by Wesbanco with the SEC, may be obtained for free at the SEC’s website at http://www.sec.gov, and from either Wesbanco’s or Old Line’s website at http://www.wesbanco.com or http://www.oldlinebank.com, respectively.

Participants in the Solicitation

 

Wesbanco and Old Line and their respective executive officers and directors may be deemed to be participants in the solicitation of proxies from the shareholders of Wesbanco and the stockholders of Old Line in connection with the proposed Merger. Information about the directors and executive officers of Wesbanco is set forth in the proxy statement for Wesbanco’s 2019 annual meeting of shareholders, as filed with the SEC on March 13, 2019 and as supplemented on April 5, 2019.  Information about the directors and executive officers of Old Line is set forth in the proxy statement for Old Line’s 2019 annual meeting of stockholders, as filed with the SEC on April 26, 2019.  Information about any other persons who may, under the rules of the SEC, be considered participants in the solicitation of Wesbanco shareholders or Old Line stockholders in connection with the proposed Merger is included in the Proxy Statement/Prospectus. You can obtain free copies of these documents from the SEC, Wesbanco or Old Line using the website information above.  This communication does not constitute an offer to sell or the solicitation of an offer to buy any securities, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation, or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction.

 

 

WESBANCO SHAREHOLDERS AND OLD LINE STOCKHOLDERS ARE URGED TO READ THE PROXY STATEMENT/PROSPECTUS CAREFULLY BEFORE MAKING ANY VOTING OR INVESTMENT DECISIONS WITH RESPECT TO THE PROPOSED MERGER.

 

 

Item 9.01 Financial Statements and Exhibits

 

 

d)

Exhibits – 99.1 -  Press release dated October 23, 2019 announcing earnings for the three and nine months ended September 30, 2019

 

 

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

 

WesBanco, Inc.

 

(Registrant)

 

 

Date: October 23, 2019

/s/ Robert H. Young

 

Robert H. Young

 

Executive Vice President and

 

Chief Financial Officer

 

 

 

 

 

 

 (Back To Top)

Section 2: EX-99.1 (3RD QTR 2019 EARNINGS RELEASE)

wsbc-ex991_8.htm

 

 

Exhibit 99.1

 

 

Company Contact

John Iannone

Senior Vice President, Investor & Public Relations

WesBanco, Inc.

304-905-7021

 

WesBanco Announces Third Quarter 2019 Financial Results

 

Wheeling, WV, October 23, 2019 – WesBanco, Inc. (“WesBanco”) (Nasdaq: WSBC), a diversified, multi-state bank holding company, today announced net income and related earnings per share for the three and nine months ended September 30, 2019.  Net income for the three months ended September 30, 2019 was $37.3 million, with diluted earnings per share of $0.68, compared to $32.5 million and $0.64 per diluted share, respectively, for the third quarter of 2018.  For the nine months ended September 30, 2019, net income was $122.5 million, or $2.24 per diluted share, compared to $99.2 million, or $2.11 per diluted share, for the 2018 period.  Net income excluding after-tax merger-related expenses for the three months ended September 30, 2019, decreased 5.7 % year-over-year to $38.7 million, or $0.71 per diluted share as compared to $0.81 per diluted share in the prior year quarter, a decrease of 12.3% (non-GAAP measures).  On the same basis, net income for the nine months ended September 30, 2019 increased 12.6% year-over-year to $126.3 million, or $2.31 per diluted share, down 2.9% when compared to $2.38 per diluted share in the prior year period (non-GAAP measures).

 

 

 

For the Three Months Ended September 30,

 

 

For the Nine Months Ended September 30,

 

 

 

2019

 

 

2018

 

 

2019

 

 

2018

 

(unaudited, dollars in thousands,

except per share amounts)

 

Net

Income

 

 

Diluted

Earnings

Per Share

 

 

Net

Income

 

 

Diluted

Earnings

Per Share

 

 

Net Income

Diluted

Earnings

Per Share

 

 

Net

Income

 

 

Diluted

Earnings

Per Share

 

Net income (Non-GAAP)(1)

 

$

38,681

 

 

$

0.71

 

 

$

41,027

 

 

$

0.81

 

 

$

126,349

 

 

$

2.31

 

 

$

112,194

 

 

$

2.38

 

Less: After tax merger-related expenses

 

 

(1,334

)

 

 

(0.03

)

 

 

(8,541

)

 

 

(0.17

)

 

 

(3,852

)

 

 

(0.07

)

 

 

(13,010

)

 

 

(0.27

)

Net income (GAAP)

 

$

37,347

 

 

$

0.68

 

 

$

32,486

 

 

$

0.64

 

 

$

122,497

 

 

$

2.24

 

 

$

99,184

 

 

$

2.11

 

 

(1)  See non-GAAP financial measures for additional information relating to the calculation of these items.

On April 5, 2018, WesBanco consummated the merger with First Sentry Bancshares, Inc. (“FTSB”), a bank holding company headquartered in Huntington, WV with $0.7 billion in assets, excluding goodwill.  In addition, on August 20, 2018, WesBanco consummated the merger with Farmers Capital Bank Corporation (“FFKT”), a bank holding company headquartered in Frankfort, KY with approximately $1.6 billion in assets, excluding goodwill.  Financial results for both FTSB and FFKT have been included in WesBanco’s results from their respective merger consummation dates.

 

Financial and operational highlights:

 

•

The limitation on interchange fees for debit card processing that resulted from the Durbin amendment to the 2010 Dodd-Frank Act, which took effect this quarter

 

o

This limitation, which only applies to banks with more than $10 billion in total assets, reduced third quarter after-tax earnings by $1.6 million, or $0.03 per diluted share

 

•

Continued expense management demonstrated by a year-to-date efficiency ratio of 56.09% (non-GAAP measure)

 

•

Key credit quality metrics such as non-performing assets, past due loans, allowance for loan loss ratios, and net loan charge-offs continue to remain at, or near, historically low levels

 

o

The increase in criticized and classified loans primarily reflects recent adjustments to our internal loan classification system which impacted risk grades

 

•

Total year-over-year organic growth in non-interest bearing demand deposits of 2.7% primarily driven by our legacy footprint

 

•

The pending merger with Old Line Bancshares, Inc. (“OLBK”) continues to progress, and the transaction is now on track to be completed during the fourth quarter of 2019, pending additional regulatory and shareholder approvals

 

o

Approval received from the West Virginia Department of Financial Institutions

 

o

The shareholder meetings of both companies are scheduled for October 29th

 

“WesBanco’s underlying, core performance during the third quarter of 2019, which was supported by our key long-term differentiators, continued to perform well and within our expectations,” said Todd F. Clossin, President and Chief Executive Officer of WesBanco.  “During the quarter, we experienced a flat, and, at times, inverted, yield curve; multiple Federal Reserve interest rate cuts; a revived pick-up in commercial real estate projects going to the secondary market earlier than expected due to the current rate environment; and the mandatory limitation on interchange fees for banks with more than $10 billion in total assets.  Despite these challenges, we are encouraged by the continued supportive strength of our distinct, long-term strategies and unique advantages.”

 

 

 

 

 

 

 

 

Mr. Clossin added, “We are benefiting from our deposit-rich legacy footprint, which provides funding for company-wide loan growth as we allow higher-cost certificates of deposit to mature.  We believe we are continuing to see strength across a number of our lending categories, including a 21% year-over-year increase in total gross production during the third quarter, and commercial loan pipelines, as of September 30th, exceeding $600 million for the first time.  In fact, our commercial and industrial, residential mortgage, and consumer loan categories generated growth on both a year-over-year as well as sequential quarter basis.  In addition, we are maintaining a critical focus on expense management and credit quality – two historical hallmarks of our institution.  We continue to believe we are well-positioned for long-term success, and remain positive about our opportunities.”

 

Balance Sheet

Portfolio loans of $7.8 billion as of September 30, 2019 increased 0.4% when compared to the prior year period, and 1.0% annualized when compared to the second quarter of 2019.  This low-single digit loan growth was driven by growth across commercial and industrial, residential real estate, and consumer loan categories.  Total deposits decreased 3.1% year-over-year to $8.7 billion due to allowing certain higher-priced certificates of deposit to mature, particularly from prior acquisitions.  Excluding CDs, total deposits of $4.6 billion were about the same as compared to the prior year period, while non-interest bearing demand deposits grew 2.7% over the same time period.

 

Credit Quality

Overall, we believe our credit quality ratios remained strong as we balanced disciplined loan origination in the current environment with our prudent lending standards.  As of September 30, 2019, both non-performing loans and non-performing assets as percentages of the portfolio and total assets have remained relatively low and consistent throughout the last five quarters.  Criticized and classified loan balances increased to $174.0 million, or 2.24% of total portfolio loans, due to recent adjustments to our internal loan classification system which impacted risk grades.  The provision for credit losses increased to $4.1 million at quarter-end, of which $2.1 million was due to certain borrower downgrades to criticized and classified categories from the change in the internal loan classification system as noted above.  Annualized net loan charge-offs to average loans remained low for the quarter and year-to-date periods at four and five basis points, respectively.

 

Net Interest Margin and Income

The net interest margin of 3.56% for the third quarter of 2019 increased 6 basis points year-over-year but decreased sequentially by 11 basis points.  Year-over-year, the net interest margin benefited from increases in the Federal Reserve Board’s target federal funds rate during 2018 and the higher margin on the acquired FFKT net assets, partially offset by higher funding costs as well as a flattening of the yield curve.  On a sequential quarter basis, the net interest margin decrease was due roughly one-half from the expected decrease in accretion from purchase accounting and one-half from the two recent 25 basis point decreases in the Federal Reserve Board’s target federal funds rate, combined with the continued partially inverted and very low yield curve.  Accretion from acquisitions benefited the third quarter net interest margin by 13 basis points, as compared to 11 basis points in the prior year period and 18 basis points in the second quarter.  Year-to-date accretion was 17 basis points, as compared to 10 basis points in the prior year. Both the first and second quarters of 2019 benefitted by 3 basis points related to impaired loan payoffs from prior acquisitions, or 2 basis points year-to-date.

 

Net interest income increased $6.2 million, or 6.9%, during the third quarter of 2019, as compared to the same quarter of 2018, due to a 4.2% increase in average total earning assets, primarily driven by the FFKT acquisition and related accretion from purchase accounting, as well as the overall higher net interest margin.  For the nine months ended September 30, 2019, net interest income increased $47.5 million, or 19.3%, due to higher average total earning assets and an overall higher net interest margin, as discussed for the three-month period comparison.

 

Non-Interest Income

For the third quarter of 2019, non-interest income of $27.0 million increased $0.7 million, or 2.8%, from the third quarter of 2018.  Mortgage banking fees increased $1.1 million, or 70.2%, compared to the prior year period due to growth in residential mortgage origination dollar volume and the associated sale of approximately one-half of those originations into the secondary market.  Service charges on deposits increased $0.7 million, or 11.8%, year-over-year due to the increased customer base from the FFKT acquisition.  Other income decreased $0.6 million, primarily due to the negative mark-to-market of existing commercial customer loan swaps, as well as lower deferred compensation-related gains, partially offset by an increase in payment processing fee income.  This quarter reflects the beginning of the on-going limitation on interchange fees for debit card processing that resulted from the Durbin amendment to the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act.  This limitation, which applies to banks with more than $10 billion in total assets, reduced electronic banking fees by approximately $1.9 million as compared to the prior year period.  In addition, because WesBanco recognizes electronic banking fees on a one-month lag, this reduction represents only two months for this initial quarter of applicability.

 

For the nine months ended September 30, 2019, non-interest income increased $12.2 million, or 16.5%, year-over-year to $85.9 million. In addition to the items discussed above, the primary drivers of this increase were the larger customer deposit base and higher transaction

 

 

 

 

 

 

 

volumes associated with the FTSB and FFKT acquisitions which resulted in the year-over-year increases in electronic banking fees and service charges on deposits, while the addition of the trust business from FFKT benefited trust fees.  

 

 

 

Non-Interest Expense

We believe that total operating expenses continued to be well-controlled during both the three- and nine-month periods ending September 30, 2019, as demonstrated by the efficiency ratio of 57.57% and 56.09%, respectively.  Excluding merger-related expenses, non-interest expense for the three months ended September 30, 2019 increased $6.3 million, or 9.6%, to $71.6 million compared to the prior year period, reflecting the FFKT acquisition in the middle of last year’s third quarter.  This year-over-year increase is primarily due to higher salaries and wages, employee benefits, net occupancy, equipment, and other operating costs associated with additional staffing and financial center locations from the acquisition, as well as intangibles amortization.  In addition, salaries and wages reflects annual merit increases and higher average staff during the third quarter related to the FFKT acquisition.  During September 2019, the banking industry was officially notified by the FDIC that its deposit insurance fund (“DIF”) reached the required minimum reserve ratio of 1.38% that permitted the FDIC to offset current bank assessments with prior credits from 2016 through 2018 earned by banks with less than $10 billion in assets during that time period.  This allowed WesBanco to record a credit of $2.4 million, from the total $3.1 million assessment credit that WesBanco Bank was notified it would receive, covering the FDIC insurance expense otherwise assessable for the second and third quarters of $1.2 million per quarter.  The remaining credit of approximately $0.7 million is anticipated to be recorded during the fourth quarter.  

 

For the nine months ended September 30, 2019, non-interest expense net of merger-related expenses increased $37.0 million, or 20.8%, to $214.8 million compared to the prior year period, reflecting the acquisitions of FTSB and FFKT and similar factors noted above for the quarterly period.

 

Capital

WesBanco continues to maintain what we believe are strong regulatory capital ratios as both consolidated and bank-level regulatory capital ratios are well above the applicable “well-capitalized” standards promulgated by bank regulators and the BASEL III capital standards.  At September 30, 2019, Tier I leverage was 11.30%, Tier I Risk-Based capital was 15.40%, Total Risk-Based capital was 16.36%, and the Common Equity Tier 1 capital ratio (“CET 1”) was 13.87%.  Tangible common equity, increased to 10.24% at period-end from 8.66% as of September 30, 2018, as an increase in other comprehensive income from the mark-to-market of the available-for-sale portion of the investment portfolio benefitted this ratio.

 

Conference Call and Webcast

WesBanco will host a conference call to discuss the Company's financial results for the third quarter of 2019 at 2:00 p.m. ET on Thursday, October 24, 2019.  Interested parties can access the live webcast of the conference call through the Investor Relations section of the Company's website, www.wesbanco.com.  Participants can also listen to the conference call by dialing 888-347-6607, 855-669-9657 for Canadian callers, or 412-902-4290 for international callers, and asking to be joined into the WesBanco call.  Please log in or dial in at least 10 minutes prior to the start time to ensure a connection.

 

A replay of the conference call will be available by dialing 877-344-7529, 855-669-9658 for Canadian callers, or 412-317-0088 for international callers, and providing the access code of 10126803.  The replay will begin at approximately 4:00 p.m. ET on October 24, and end at 12 a.m. ET on November 7.  An archive of the webcast will be available for one year on the Investor Relations section of the Company’s website (www.wesbanco.com).

 

Forward-Looking Statements

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, 2018 and documents subsequently filed by WesBanco with the Securities and Exchange Commission (“SEC”), including WesBanco’s Form 10-Q’s for the quarters ended March 31 and June 30, 2019, 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, that the proposed merger with Old Line Bancshares, Inc. (“Old Line”) may not close when expected, that the businesses of WesBanco and Old Line may not be integrated successfully or such integration may take longer to accomplish than expected; the expected cost savings and any revenue synergies from the merger of WesBanco and Old Line may not be fully realized within the expected timeframes; disruption from the merger of WesBanco and Old Line may make it more difficult to maintain relationships with clients, associates, or suppliers; the effects of changing regional and national economic conditions; 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.

 

Additional Information About the Merger and Where to Find It

On July 23, 2019, WesBanco and WesBanco Bank, Inc. (“WesBanco Bank”) entered into an Agreement and Plan of Merger with Old Line and Old Line Bank, Inc. (“Old Line Bank”), pursuant to which Old Line will be merged with and into WesBanco, with WesBanco being the surviving company (the “Merger”), and Old Line Bank will be merged with and into WesBanco Bank, with WesBanco Bank the surviving bank. In connection with the proposed Merger, WesBanco filed with the Securities and Exchange Commission (“SEC”) a Registration Statement on Form S-4, which was declared effective on September 23, 2019, that includes a Proxy Statement of Old Line and WesBanco and a Prospectus of WesBanco, as well as other relevant documents concerning the proposed transaction. SHAREHOLDERS OF WESBANCO, STOCKHOLDERS OF OLD LINE AND OTHER INTERESTED PARTIES ARE URGED TO READ THE REGISTRATION STATEMENT AND THE PROXY STATEMENT/PROSPECTUS REGARDING THE MERGER AND ANY OTHER RELEVANT DOCUMENTS FILED WITH THE SEC, AS WELL AS ANY AMENDMENTS OR SUPPLEMENTS TO THOSE DOCUMENTS, BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION. The Proxy Statement/Prospectus dated September 23, 2019 was mailed to shareholders of WesBanco and stockholders of Old Line on or around September 26, 2019. The Old Line stockholders meeting and the WesBanco shareholders meeting are both scheduled for October 29, 2019. In addition, the Registration Statement on Form S-4, which includes the Proxy Statements/Prospectus, and other related documents filed by WesBanco with the SEC, may be obtained for free at the SEC’s website at http://www.sec.gov, and from either WesBanco’s or Old Line’s website at http://www.wesbanco.com or http://www.oldlinebank.com, respectively.

 

Participants in the Solicitation

WesBanco and Old Line and their respective executive officers and directors may be deemed to be participants in the solicitation of proxies from the shareholders of WesBanco and the stockholders of Old Line in connection with the proposed Merger. Information about the directors and executive officers of WesBanco is set forth in the proxy statement for WesBanco’s 2019 annual meeting of shareholders, as filed with the SEC on March 13, 2019 and as supplemented on April 5, 2019.  Information about the directors and executive officers of Old Line is set forth in the proxy statement for Old Line’s 2019 annual meeting of stockholders, as filed with the SEC on April 26, 2019.  Information about any other persons who may, under the rules of the SEC, be considered participants in the solicitation of WesBanco shareholders or Old Line stockholders in connection with the proposed Merger is included in the Proxy Statement/Prospectus. You can obtain free copies of these documents from the SEC, WesBanco or Old Line using the website information above.  This communication does not constitute an offer to sell or the solicitation of an offer to buy any securities, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation, or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction.

 

WESBANCO SHAREHOLDERS AND OLD LINE STOCKHOLDERS ARE URGED TO READ THE PROXY STATEMENT/PROSPECTUS CAREFULLY BEFORE MAKING ANY VOTING OR INVESTMENT DECISIONS WITH RESPECT TO THE PROPOSED MERGER.

 

About WesBanco, Inc.

Founded in 1870, WesBanco, Inc. (www.wesbanco.com) is a multi-state, bank holding company with total assets of approximately $12.6 billion (as of September 30, 2019).  WesBanco is a diversified and well-balanced financial services institution, with a community bank at its core, built upon a strong legacy of credit and risk management.  WesBanco has meaningful market share across its key geographies maintained by its commitment to dedicated customer service and solid fee-based businesses. It also provides wealth management services through a century-old trust and wealth management business, with approximately $4.4 billion of assets under management (as of September 30, 2019), and serves as registered investment advisor to a proprietary mutual fund family, the WesMark Funds.  WesBanco's banking subsidiary, WesBanco Bank, Inc., operates 199 financial centers in the states of Indiana, Kentucky, Ohio, Pennsylvania, and West Virginia.  In addition, WesBanco operates an insurance agency, WesBanco Insurance Services, Inc., and a full service broker/dealer, WesBanco Securities, Inc.

 

 

 

 

WESBANCO, INC.

 

Consolidated Selected Financial Highlights

 

(unaudited, dollars in thousands, except shares and per share amounts)

 

 

 

For the Three Months Ended

 

 

For the Nine Months Ended

 

STATEMENT OF INCOME

 

September 30,

 

 

September 30,

 

 

 

2019

 

 

2018

 

 

% Change

 

 

2019

 

 

2018

 

 

% Change

 

Interest and dividend income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans, including fees

 

$

95,369

 

 

$

86,605

 

 

 

10.1

 

 

$

287,287

 

 

$

234,276

 

 

 

22.6

 

Interest and dividends on securities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Taxable

 

 

15,887

 

 

 

14,964

 

 

 

6.2

 

 

 

49,061

 

 

 

40,702

 

 

 

20.5

 

Tax-exempt

 

 

4,759

 

 

 

5,326

 

 

 

(10.6

)

 

 

15,443

 

 

 

15,216

 

 

 

1.5

 

Total interest and dividends on securities

 

 

20,646

 

 

 

20,290

 

 

 

1.8

 

 

 

64,504

 

 

 

55,918

 

 

 

15.4

 

Other interest income

 

 

1,333

 

 

 

1,498

 

 

 

(11.0

)

 

 

4,153

 

 

 

3,402

 

 

 

22.1

 

          Total interest and dividend income

 

 

117,348

 

 

 

108,393

 

 

 

8.3

 

 

 

355,944

 

 

 

293,596

 

 

 

21.2

 

Interest expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest bearing demand deposits

 

 

4,489

 

 

 

3,501

 

 

 

28.2

 

 

 

12,749

 

 

 

9,174

 

 

 

39.0

 

Money market deposits

 

 

1,973

 

 

 

1,360

 

 

 

45.1

 

 

 

5,881

 

 

 

3,332

 

 

 

76.5

 

Savings deposits

 

 

861

 

 

 

352

 

 

 

144.6

 

 

 

2,061

 

 

 

768

 

 

 

168.4

 

Certificates of deposit

 

 

3,830

 

 

 

3,276

 

 

 

16.9

 

 

 

11,831

 

 

 

8,789

 

 

 

34.6

 

Total interest expense on deposits

 

 

11,153

 

 

 

8,489

 

 

 

31.4

 

 

 

32,522

 

 

 

22,063

 

 

 

47.4

 

Federal Home Loan Bank borrowings

 

 

6,645

 

 

 

6,691

 

 

 

(0.7

)

 

 

19,269

 

 

 

17,142

 

 

 

12.4

 

Other short-term borrowings

 

 

1,353

 

 

 

965

 

 

 

40.2

 

 

 

4,392

 

 

 

2,497

 

 

 

75.9

 

Subordinated debt and junior subordinated debt

 

 

2,077

 

 

 

2,315

 

 

 

(10.3

)

 

 

6,820

 

 

 

6,425

 

 

 

6.1

 

Total interest expense

 

 

21,228

 

 

 

18,460

 

 

 

15.0

 

 

 

63,003

 

 

 

48,127

 

 

 

30.9

 

Net interest income

 

 

96,120

 

 

 

89,933

 

 

 

6.9

 

 

 

292,941

 

 

 

245,469

 

 

 

19.3

 

Provision for credit losses

 

 

4,121

 

 

 

1,035

 

 

 

298.2

 

 

 

9,375

 

 

 

4,911

 

 

 

90.9

 

Net interest income after provision for credit losses

 

 

91,999

 

 

 

88,898

 

 

 

3.5

 

 

 

283,566

 

 

 

240,558

 

 

 

17.9

 

Non-interest income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Trust fees

 

 

6,425

 

 

 

6,265

 

 

 

2.6

 

 

 

19,880

 

 

 

18,520

 

 

 

7.3

 

Service charges on deposits

 

 

7,056

 

 

 

6,313

 

 

 

11.8

 

 

 

19,803

 

 

 

16,282

 

 

 

21.6

 

Electronic banking fees

 

 

5,253

 

 

 

6,139

 

 

 

(14.4

)

 

 

18,299

 

 

 

16,697

 

 

 

9.6

 

Net securities brokerage revenue

 

 

1,765

 

 

 

1,836

 

 

 

(3.9

)

 

 

5,597

 

 

 

5,315

 

 

 

5.3

 

Bank-owned life insurance

 

 

1,373

 

 

 

1,232

 

 

 

11.4

 

 

 

4,032

 

 

 

5,116

 

 

 

(21.2

)

Mortgage banking income

 

 

2,588

 

 

 

1,521

 

 

 

70.2

 

 

 

5,262

 

 

 

4,297

 

 

 

22.5

 

Net securities gains

 

 

235

 

 

 

84

 

 

 

179.8

 

 

 

3,800

 

 

 

403

 

 

 

842.9

 

Net gain on other real estate owned and other assets

 

 

158

 

 

 

150

 

 

 

5.3

 

 

 

670

 

 

 

641

 

 

 

4.5

 

Other income

 

 

2,097

 

 

 

2,684

 

 

 

(21.9

)

 

 

8,535

 

 

 

6,444

 

 

 

32.4

 

Total non-interest income

 

 

26,950

 

 

 

26,224

 

 

 

2.8

 

 

 

85,878

 

 

 

73,715

 

 

 

16.5

 

Non-interest expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Salaries and wages

 

 

32,915

 

 

 

30,335

 

 

 

8.5

 

 

 

95,501

 

 

 

82,213

 

 

 

16.2

 

Employee benefits

 

 

9,726

 

 

 

7,905

 

 

 

23.0

 

 

 

29,419

 

 

 

22,782

 

 

 

29.1

 

Net occupancy

 

 

5,392

 

 

 

4,957

 

 

 

8.8

 

 

 

16,343

 

 

 

13,715

 

 

 

19.2

 

Equipment

 

 

5,273

 

 

 

4,488

 

 

 

17.5

 

 

 

14,924

 

 

 

12,532

 

 

 

19.1

 

Marketing

 

 

1,505

 

 

 

1,446

 

 

 

4.1

 

 

 

4,002

 

 

 

3,967

 

 

 

0.9

 

FDIC insurance

 

 

(1,221

)

 

 

789

 

 

 

(254.8

)

 

 

1,287

 

 

 

2,315

 

 

 

(44.4

)

Amortization of intangible assets

 

 

2,446

 

 

 

1,821

 

 

 

34.3

 

 

 

7,424

 

 

 

4,218

 

 

 

76.0

 

Restructuring and merger-related expense

 

 

1,688

 

 

 

10,811

 

 

 

100.0

 

 

 

4,876

 

 

 

16,468

 

 

 

(70.4

)

Other operating expenses

 

 

15,544

 

 

 

13,568

 

 

 

14.6

 

 

 

45,876

 

 

 

36,024

 

 

 

27.3

 

Total non-interest expense

 

 

73,268

 

 

 

76,120

 

 

 

(3.7

)

 

 

219,652

 

 

 

194,234

 

 

 

13.1

 

Income before provision for income taxes

 

 

45,681

 

 

 

39,002

 

 

 

17.1

 

 

 

149,792

 

 

 

120,039

 

 

 

24.8

 

Provision for income taxes

 

 

8,334

 

 

 

6,516

 

 

 

27.9

 

 

 

27,295

 

 

 

20,855

 

 

 

30.9

 

Net Income

 

$

37,347

 

 

$

32,486

 

 

 

15.0

 

 

$

122,497

 

 

$

99,184

 

 

 

23.5

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Taxable equivalent net interest income

 

$

97,385

 

 

$

91,348

 

 

 

6.6

 

 

$

297,046

 

 

$

249,514

 

 

 

19.0

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Per common share data

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income per common share - basic

 

$

0.68

 

 

$

0.65

 

 

 

4.6

 

 

$

2.24

 

 

$

2.11

 

 

 

6.2

 

Net income per common share - diluted

 

 

0.68

 

 

 

0.64

 

 

 

6.3

 

 

 

2.24

 

 

 

2.11

 

 

 

6.2

 

Net income per common share - diluted, excluding certain items (1)(2)

 

 

0.71

 

 

 

0.81

 

 

 

(12.3

)

 

 

2.31

 

 

 

2.38

 

 

 

(2.9

)

Dividends declared

 

 

0.31

 

 

 

0.29

 

 

 

6.9

 

 

 

0.93

 

 

 

0.87

 

 

 

6.9

 

Book value (period end)

 

 

38.42

 

 

 

35.30

 

 

 

8.8

 

 

 

38.42

 

 

 

35.30

 

 

 

8.8

 

Tangible book value (period end) (1)

 

 

21.89

 

 

 

18.54

 

 

 

18.1

 

 

 

21.89

 

 

 

18.54

 

 

 

18.1

 

Average common shares outstanding - basic

 

 

54,695,578

 

 

 

50,277,847

 

 

 

8.8

 

 

 

54,641,057

 

 

 

46,965,095

 

 

 

16.3

 

Average common shares outstanding - diluted

 

 

54,751,344

 

 

 

50,432,112

 

 

 

8.6

 

 

 

54,705,761

 

 

 

47,107,829

 

 

 

16.1

 

Period end common shares outstanding

 

 

54,691,225

 

 

 

54,603,967

 

 

 

0.2

 

 

 

54,691,225

 

 

 

54,603,967

 

 

 

0.2

 

(1) See non-GAAP financial measures for additional information relating to the calculation of this item.

(2) Certain items excluded from the calculation consist of after-tax merger-related expenses.

 

 

WESBANCO, INC.

 

Consolidated Selected Financial Highlights

 

(unaudited, dollars in thousands)

 

 

Selected ratios

 

For the Nine Months Ended

 

 

 

 

September 30,

 

 

 

 

2019

 

 

2018

 

 

% Change

 

 

Return on average assets

 

 

1.31

 

%

 

1.21

 

%

 

8.26

 

%

Return on average assets, excluding

 

 

 

 

 

 

 

 

 

 

 

 

 

    after-tax merger-related expenses

 

 

1.35

 

 

 

1.37

 

 

 

(1.46

)

 

Return on average equity

 

 

7.99

 

 

 

8.59

 

 

 

(6.98

)

 

Return on average equity, excluding

 

 

 

 

 

 

 

 

 

 

 

 

 

    after-tax merger-related expenses

 

 

8.24

 

 

 

9.71

 

 

 

(15.14

)

 

Return on average tangible equity (1)

 

 

14.97

 

 

 

15.71

 

 

 

(4.71

)

 

Return on average tangible equity, excluding

 

 

 

 

 

 

 

 

 

 

 

 

 

    after-tax merger-related expenses

 

 

15.42

 

 

 

17.70

 

 

 

(12.88

)

 

Yield on earning assets (2)

 

 

4.41

 

 

 

4.11

 

 

 

7.30

 

 

Cost of interest bearing liabilities

 

 

1.07

 

 

 

0.89

 

 

 

20.22

 

 

Net interest spread (2)

 

 

3.34

 

 

 

3.22

 

 

 

3.73

 

 

Net interest margin (2)

 

 

3.64

 

 

 

3.44

 

 

 

5.81

 

 

Efficiency (1) (2)

 

 

56.09

 

 

 

55.00

 

 

 

1.98

 

 

Average loans to average deposits

 

 

87.77

 

 

 

88.25

 

 

 

(0.54

)

 

Annualized net loan charge-offs/average loans

 

 

0.05

 

 

 

0.02

 

 

 

150.00

 

 

Effective income tax rate

 

 

18.22

 

 

 

17.37

 

 

 

4.89

 

 

 

 

For the Quarter Ended

 

 

 

 

Sept. 30,

 

 

June 30,

 

 

Mar. 31,

 

 

Dec. 31,

 

 

Sept. 30,

 

 

 

 

2019

 

 

2019

 

 

2019

 

 

2018

 

 

2018

 

 

Return on average assets

 

 

1.19

 

%

 

1.44

 

%

 

1.31

 

%

 

1.39

 

%

 

1.10

 

%

Return on average assets, excluding

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    after-tax merger-related expenses

 

 

1.23

 

 

 

1.44

 

 

 

1.39

 

 

 

1.42

 

 

 

1.39

 

 

Return on average equity

 

 

7.06

 

 

 

8.77

 

 

 

8.17

 

 

 

8.94

 

 

 

7.50

 

 

Return on average equity, excluding

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    after-tax merger-related expenses

 

 

7.32

 

 

 

8.78

 

 

 

8.67

 

 

 

9.16

 

 

 

9.47

 

 

Return on average tangible equity (1)

 

 

13.06

 

 

 

16.35

 

 

 

15.65

 

 

 

17.67

 

 

 

14.25

 

 

Return on average tangible equity, excluding

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    after-tax merger-related expenses

 

 

13.50

 

 

 

16.38

 

 

 

16.56

 

 

 

18.09

 

 

 

17.85

 

 

Yield on earning assets (2)

 

 

4.34

 

 

 

4.45

 

 

 

4.45

 

 

 

4.42

 

 

 

4.21

 

 

Cost of interest bearing liabilities

 

 

1.09

 

 

 

1.08

 

 

 

1.06

 

 

 

0.97

 

 

 

0.95

 

 

Net interest spread (2)

 

 

3.25

 

 

 

3.37

 

 

 

3.39

 

 

 

3.45

 

 

 

3.26

 

 

Net interest margin (2)

 

 

3.56

 

 

 

3.67

 

 

 

3.68

 

 

 

3.72

 

 

 

3.50

 

 

Efficiency (1) (2)

 

 

57.57

 

 

 

54.87

 

 

 

55.89

 

 

 

53.62

 

 

 

55.55

 

 

Average loans to average deposits

 

 

88.96

 

 

 

87.35

 

 

 

87.01

 

 

 

85.94

 

 

 

87.56

 

 

Annualized net loan charge-offs/average loans

 

 

0.04

 

 

 

0.05

 

 

 

0.07

 

 

 

0.14

 

 

 

(0.02

)

 

Effective income tax rate

 

 

18.24

 

 

 

18.40

 

 

 

18.01

 

 

 

19.37

 

 

 

16.71

 

 

Trust assets, market value at period end

 

$

4,443,430

 

 

$

4,544,103

 

 

$

4,514,013

 

 

$

4,269,961

 

 

$

4,743,894

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1) See non-GAAP financial measures for additional information relating to the calculation of this item.

(2) The yield on earning assets, net interest margin, net interest spread and efficiency ratios are presented on a fully taxable-equivalent (FTE) and annualized basis. The FTE basis adjusts for the tax benefit of income on certain tax-exempt loans and investments.   WesBanco believes this measure to be the preferred industry measurement of net interest income and provides a relevant comparison between taxable and non-taxable amounts.

 

 

 

 

WESBANCO, INC.

 

Consolidated Selected Financial Highlights

 

(unaudited, dollars in thousands, except shares)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

% Change