WesBanco, Inc. · NASDAQ:WSBC
WesBanco — Investor Presentation (May 2017)
35 slides from WesBanco's investor presentation, May 3, 2017
Slide 1: WesBanco Investor Presentation (Q2 2017)
NG Sug WesBanco By all accounts, better. Investor Presentation (Q2 2017) (financials as of Q1 2017) John lannone Vice President, Investor Relations 304-905-7021
Slide 2: Forward-Looking Statements
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 cont
Slide 3: Who and Where We Are
Who and Where We Are > Founded in 1870 Top Share in Diverse Markets * $9.8 billion in assets | * Strong community banking roots = Headquartered in Wheeling, WV > Top share across legacy and diverse, major metropolitan markets =» Balanced market distribution * Strong demographic trends across footpri
Slide 4: Key Differentiators
Key Differentiators > Emerging financial services company with a community bank at its core Diversified revenue growth engines with a critical focus on credit quality Well-balanced loan and deposit distribution across broad footprint Robust legacy market share combined with diverse metropolitan mark
Slide 5: Investment Rationale
Investment Rationale > Well-balanced financial services company with a diversified earnings stream and a strong legacy of credit and risk management > Disciplined growth, balanced by a fundamental focus on expense management, that delivers positive operating leverage and increases shareholder value
Slide 6: Growth Strategy
WeBsro By all accounts, better. Growth Strategy
Slide 7: Long-Term Growth Strategies
Long-Term Growth Strategies > Vv Vv W Diversified loan portfolio with a focus on Commercial and Industrial (C&l) * Increased productivity from and enhancements to the commercial lending team Long history of strong wealth management capabilities = Proprietary mutual funds, and a century of trust expe
Slide 8: Diversified Loan Portfolio
Diversified Loan Portfolio >» Focus on expanding Commercial $6.3 Billion Loan Portfolio and Industrial (C&l) business = Dedicated C&l and Business canny Banking teams in all major RIE: . A gon Improved metropolitan markets while retaining Property our traditional CRE/LCD expertise 38% Comm'l & __ Co
Slide 9: Strong Wealth Management Capabilities
Strong Wealth Management Capabilities Trust & Investments >$3.8B of trust and mutual fund assets under management >5,000+ relationships > Growth opportunities from shale- related private wealth management >» Expansion in Kentucky and Indiana > WesMark funds Securities Brokerage >» Securities investm
Slide 10: Retail Banking Strategies
Retail Banking Strategies > Efficient financial center network with effective staff management and technology utilization supported by centralized, low-cost back office functions > Transitioning financial center personnel from transaction-based to needs -based sales activity « Full integration of CR
Slide 11: Strong Culture of Expense Management
Strong Culture of Expense Management >» Fundamental focus on expense management to deliver positive operating leverage and increase shareholder value « “Rule-of-thumb” target is $2 of return on each $1 of investment > Scalable technology infrastructure supports both organic and acquisition- related
Slide 12: Franchise Expansion
Franchise Expansion > Targeted acquisitions in existing Contiguous Markets Radius é 9 X — oy fe markets and new higher-growth =. metro areas DS ain See rea F oe veo Critical, long-term focus on shareholder return NOIANA Adequate capital and liquidity, along with strong regulatory compliance processe
Slide 13: $10 Billion Asset Threshold Plan
$10 Billion Asset Threshold Plan > Methodically phasing in the costs of processes, personnel, and enhancing our strong compliance management system « Liquidity, loan, and capital stress testing in preparation for DFAST reporting « Currently anticipate no large, single-period investment requirement =
Slide 14: Above Peer Group Performance
Above Peer Group Performance > Disciplined execution upon growth strategies providing above peer group performance across key operating metrics Return on Tangible Common Equity Return on Average Assets 15.6% 4.43% 0, ° ‘0 1.08% 1.09% = — 14.0% 14.2% i : ai : 2014 ; 2015 : 2016 ; 2017 (3/31) , : 2014
Slide 15: Returning Value to Shareholders
Returning Value to Shareholders >» Focus on appropriate capital allocation to provide flexibility while continuing to enhance shareholder value > Q1 2017 dividend payout ratio 43.3%, compared to 32.9% for bank group > Q1 2017 dividend yield 2.6%, compared to 1.6% for bank group Quarterly Dividend pe
Slide 16: Financial Overview
agg | WesBanco By all accounts, better. Financial Overview
Slide 17: Financial and Operational Highlights — Q1 2017
Financial and Operational Highlights — Q1 2017 Net income up 14.6% and EPS of $0.60 (excluding merger-related costs) Return on tangible common equity of 14.2% (excluding merger-related costs) Integration of new Indiana and Kentucky markets is progressing well Vv Vv V W Remain committed to driving po
Slide 18: Financial Performance Summary (Non-GAAP)
Financial Performance Summary (Non-GAAP) Three Months Endin ($000s, except earnings per share) 3/31/2016 3/31/2017 Change Net Income ‘” $22,874 $26,205 14.6% Diluted Earnings per Share ‘” $0.60 $0.60 0.0% Net Charge-Offs as % of Average Loans 0.12% 0.15% 3bp a Net Interest Margin (FTE) 3.29% 3.42% 1
Slide 19: Net Interest Margin
Net Interest Margin > During 2016, net interest margin (NIM) was impacted by: = Increased funding costs associated with a higher proportion of Federal Home Loan Bank medium-term borrowings and lower earning asset yields = Average loan rates declined due to the low interest rate environment, lower sp
Slide 20: Interest Rate Sensitivity
Interest Rate Sensitivity > Positioned for asset sensitivity in rising rate shock and ramp environments Change in Net Interest Income Immediate Change in from Base over One Year Interest Rates December 31, 2016 March 31, 2017 +1% Rate Shock +3.1% +3.7% +2% Rate Shock +4.6% +6.1% +3% Rate Shock +4.7%
Slide 21: Securities Portfolio
Securities Portfolio > Securities portfolio represents ~23% of total assets (compared to ~28% last year) = Scheduled maturities, calls, and select sales of short-term, lower-yielding securities to help manage risk and portfolio efficiency while funding loan growth Composition as of 3/31/2017 Municip
Slide 22: Diversified Revenue Generation: Non-Interest Income
Diversified Revenue Generation: Non-Interest Income > Operating non-interest income 7 0 contributed 24% of net revenue during 2016 $90 5 $78.4, > Q1 2017 operating non-interest en a income reflects: $70 | ! = Commercial customer loan swap $60 : fee income as customers remain $50 4 ; receptive to the
Slide 23: Risk Management and Regulatory Compliance
Risk Management and Regulatory Compliance > Strong legacy of credit and risk management based upon conservative underwriting standards > Six consecutive “outstanding” CRA ratings since 2003 > Liquidity, loan, and capital stress testing in preparation for post-$10 billion asset threshold DFAST report
Slide 24: Appendix
- - 4 Ay W WesBanco By all accounts, better. Appendix
Slide 25: Stock Performance: Long-Term Cumulative Return
Stock Performance: Long-Term Cumulative Return 600% - 500% 400% 300% 200% 100% 0% (100%) - NAD oN 208 209 CN: oD coh: CW GO GN 2D WS 2D 2S Rs OD NS: 20'S NN SY gk OO 2 er eOr nr NY is PPP PPP PP PPP FF LLK PLS HH eo) oy —WSBC — S&P500 W Note: cumulative return since WSBC IPO compared to the cumulati
Slide 26: Experienced and Stable Management Team
Experienced and Stable Management Team Years in Years at Executive Position Banking WSBC James Gardill Chairman of the Board 44* 44 Todd Clossin President & Chief Executive Officer 33 4 Robert Young EVP — Chief Financial Officer 31 16 Lynn Asensio EVP — Retail Administration 39 12 Ivan Burdine EVP —
Slide 27: Financial Performance Summary Trend — Annual
Financial Performance Summary Trend — Annual 60.98% 60.99% 59.59% $95.3 57.05% 56.69% $88.0 $70.8 $64.8 $52.1 2012 2013 2014 2015 2016 2012 2013 2014 2015 2016 Return on Average Assets (1) Return on Average Tangible Equity “) 1.06% 4.15% 1.08% 1.07% 15.99% 15.57% 0.93% | 14.24% | 14.58% 13.96% 2012
Slide 28: Diligent Focus on Credit Quality — Annual Trend
Diligent Focus on Credit Quality — Annual Trend > Loan loss allowance decline due to improvement in credit quality Net Charge-Offs as % of Average Loans Legacy Loan Loss Allowance to Legacy Loans 0.66% 0.38% 0.23% 0.23% | | ri = 2012 2013 2014 2015 = Non- | Non-Performing Assets to Total Assets _| A
Slide 29: Reconciliation: Efficiency Ratio
Reconciliation: Efficiency Ratio Three Months Ending Twelve Months Ending ($000s) 3/34/2016 3/34/2017 12/34/2012 12/31/2013 42/34/2014 12/31/2015 Non-Interest Expense $45,343 $54,384] $150,120 $160,998 $161,633 $193,923 $208,680) Restructuring & MergerRelated So ($491)) ($3,888) ($1,310) ($1,309) ($
Slide 30: Reconciliation: Net Income and EPS (Diluted)
Reconciliation: Net Income and EPS (Diluted) ($000s, except eamings per share) Three Months Ending 3/31/2016 3/31/2017 Twelve Months Ending 12/31/2012 12/31/2013 12/31/2014 12/31/2015 12/31/2016 & merger-related expense) Net Income per Diluted Share $0.60 $1.84 $2.18 $2.39 Net Income $22,874 $25,886
Slide 31: Reconciliation: Return on Average Assets
Reconciliation: Return on Average Assets ($000s) 3/31/2016 3/31/2017 12/31/2012 Twelve Months Ending 12/31/2013 12/34/2014 12/31/2015 12/31/2016 & merger-related expense) Average Assets $8,551,720 $9,781,477 $5,606,386 $6,109,311 Net Income“) $91,999 $104,982| $49,544 $63,925 «$69,974 «$80,762 —«- $
Slide 32: Reconciliation: Return on Average Tangible Equity
Reconciliation: Return on Average Tangible Equity Three Months Ending Twelve Months Ending 3/31/2016 3/31/2017 12/31/2012 12/31/2013 12/31/2014 12/31/2015 12/31/2016 Net Income ‘*) $91,999 $104,982 $49,544 $63,925 $69,974 $80,762 $86,635 Amortization of Intangibles ‘") $1,908 $3,356 $1,398 $1,487 $1
Slide 33: Reconciliation: Operating Non-Interest Income
Reconciliation: Operating Non-Interest Income Three Months Ending Twelve Months Ending 3/31/2016 3/31/2017 12/31/2014 12/31/2015 12/31/2016 Senice Charges on Deposits $3,952 $4,853 $16,135 $16,743 $18,333 Electronic Banking (e-Banking) Fees $3,604 $4.24 $12,708 $14,361 $15,596 Trust Fees $5,711 $6,1
Slide 34: Reconciliation: Legacy Loan Loss Allowance to Total Legacy Loans
Reconciliation: Legacy Loan Loss Allowance to Total Legacy Loans Twelve Months Ending ($000s) 12/31/2012 12/31/2013 12/31/2014 12/31/2016 Loan Loss Allowance $52,699 $47,368 $44,654 $41,710 $43,674 Allowance on Acquired Loans $o_ ($582) ($500) ($1) 566 Legacy Loan Loss Allowance $52,699 $46,786 $44,
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