WesBanco Lifted Earnings as Merger Costs Receded
The commercial loan pipeline reached a record $2.3 billion, up 90% from year-end.
WesBanco, Inc. (WSBC), the regional bank, reported second-quarter net income available to common shareholders of $88.4 million, up 61.1% from a year earlier, as diluted earnings rose 59.6% to $0.91 a share.
The earnings increase largely reflected the fading costs of WesBanco’s expansion. Restructuring and merger-related expenses fell to $0.8 million after tax from $32.4 million a year earlier, while adjusted diluted earnings were nearly flat at $0.92 a share compared with $0.91.
Net interest income rose 2.5% from a year earlier to $222.2 million and increased from about $215.4 million in the first quarter. Net interest margin widened to 3.63% from 3.57% sequentially and 3.59% a year earlier as higher loan yields and lower funding costs improved the spread.
Portfolio loans grew 2.1% from the first quarter to $19.48 billion, an annualized pace of 8.3%, despite about $345 million of commercial real-estate payoffs. Commercial-and-industrial loans led the expansion with 5.9% sequential growth, and the commercial loan pipeline reached a record $2.3 billion, up 90% from year-end.
Deposits declined 0.4% sequentially to $21.59 billion as WesBanco shed the remaining $50 million of brokered deposits and reduced higher-cost certificates of deposit. CDs fell 5.1% from the first quarter, while non-interest-bearing demand deposits increased 1.2%; deposits excluding CDs were up 4.3% from a year earlier.
Non-interest income climbed 22.0% to $53.6 million, helped by higher swap fees, a favorable valuation adjustment and a nonrecurring $4.8 million pension-plan gain. Expenses excluding restructuring and merger costs rose 1.8% to $148.1 million, primarily because of hiring, particularly in Florida, while the efficiency ratio improved to a record-low 51.17%.
Credit costs eased as annualized net charge-offs fell to 0.02% of average loans from 0.16% in the first quarter, while nonperforming loans were unchanged. Trust and Investment Services assets under management rose to a record $8.23 billion from $7.81 billion sequentially and $7.21 billion a year earlier.
WesBanco has a new authorization to repurchase 4.0 million shares. The company bought 0.3 million shares for $9.7 million during the quarter, leaving about 4.5 million shares available under its combined authorizations at quarter-end.