WesBanco Inc. (NASDAQ:WSBC) Q3 2018 Earnings Conference Call Transcript

Oct 25, 2018 • 03:00 pm ET


WesBanco Inc. (NASDAQ:WSBC) Q3 2018 Earnings Conference Call Transcript


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Good afternoon, and welcome to the WesBanco Third Quarter 2018 Earnings Conference Call. (Operator Instructions) Please note, this event is being recorded. At this time, I would like to turn the conference over to John Iannone, Vice President of Investor Relations. Please go ahead, sir.

John Iannone

Thank you, Denise. Good afternoon, and welcome to WesBanco, Inc.'s third quarter 2018 earnings conference call. Our third quarter 2018 earnings release, which contains consolidated financial highlights and reconciliations of non-GAAP financial measures was issued yesterday afternoon and is available on our website, wesbanco.com.

Leading the call today are Todd Clossin, President and CEO; and Bob Young, EVP and CFO. Following our opening remarks, we will begin a question-and-answer session. An archive of this call will be available on our website for one year.

(Forward-looking cautionary statements)


Todd F. Clossin

Thank you, John, and good afternoon, everyone. On today's call, we'll be reviewing our results for the third quarter of 2018. Key takeaways from the call today are: continued execution upon our well defined growth strategies that are ensuring long-term shareholder value; diligent focus on profitability and positive operating leverage, while maintaining our legacy of sound credit quality; the unique long-term benefit of our core funding advantage; and the successful completion of our merger with Farmers Capital Bank Corporation. We're pleased with our performance during the third quarter as we delivered record results by remaining focused on profitability, positive operating leverage through effective execution of our strategies.

Net income, excluding merger related expenses for the three months ended September 30, 2018, increased 56% year-over-year to $41 million or $0.81 per diluted share. And for the 9 month period, net income, excluding merger related expenses, increased 42% year over year to $112 million or $2.38 per share.

The benefits of our diversification and expense management strategies on profitability is further evident through year to date improvements in several additional core measurements. We delivered positive operating leverage of three times through a combination of M&A and organic growth; the efficiency ratio improved 191 basis points from the prior year to 55% despite the inclusion of FFKT's operating expenses since August 20 of this year; the combination of which helped drive income before provision for credit losses and income taxes to $141 million, a 20% year-over-year increase; and solid profitability ratios with the core return on average assets of 1.37% and a core return on average tangible equity of 17.7%, which improved year-over-year by 30 and 396 basis points, respectively.

Our long-term success remains dependent upon continued execution of our well defined operational and growth plans. As a reminder, our long-term growth strategy is focused on several key pillars: building a diversified loan portfolio with an emphasis on commercial and industrial and home equity lending; increasing fee income as a percentage of total net revenues over time; maintaining a high quality retail banking franchise; and franchise enhancing acquisitions.

And these pillars would not be possible if they were not built upon two strong legacies of our franchise: an unwavering focus on