WesBanco, Inc. Reports Strong Q3 2024 Results

WesBanco, Inc. (NASDAQ:WSBC) announced a strong financial performance in its Third Quarter 2024 Earnings Conference Call on October 24, 2024. Led by CEO Jeff Jackson and CFO Dan Weiss, the company reported a net income of $36.3 million, or $0.56 per share. WesBanco experienced significant growth in loans and deposits, with loans increasing by $1.1 billion and deposits by $750 million year-over-year. The company also successfully raised $200 million in common equity, enhancing its tangible common equity ratio to 8.84%.

Key Takeaways

• Net Income: $36.3 million, EPS: $0.56.
• Loans & Deposits: Loans grew by $1.1 billion, deposits increased by $750 million year-over-year.
• Campaign Contribution: "Summer of One" campaign led to a 12% annualized growth in deposits.
• Acquisition Update: Acquisition of Premier Financial Corp. on track for closure in Q1 2025.
• Credit Quality: Non-performing assets decreased to 0.17% of total assets.
• Non-interest Income: Grew by 6% to $31.3 million, driven by record assets under management.
• Non-interest Expenses: Increased by 2% to $99.2 million, efficiency improvements reduced salaries.
• Future Projections: Modest improvement in net interest margin and effective tax rate of approximately 17.5%.

Company Outlook

• WesBanco anticipates continued loan growth and improvements in net interest margin.
• The company expects annual savings of $4 million from the consolidation of 11 branches.
• Anticipated Federal Reserve rate cuts in November and December 2024 may benefit net interest margin, with four further cuts in 2025 expected.

Highlights

Bearish:

• Non-interest income was affected by a $1.7 million adjustment in swap fees.
• Increased healthcare costs and merit increases may impact fourth-quarter expenses.

Bullish:

• Optimism for loan growth due to talent management and new deposit initiatives.
• The Premier Financial acquisition is expected to enhance margins significantly.
• Recruitment efforts are ongoing to maintain growth momentum.

Misses

Despite strong overall performance, the company reported a decline in non-interest income attributed to adjustments in swap fees.

Q&A Highlights

• Management remains neutral on anticipated interest rate changes, indicating minimal effect from minor cuts.
• Successful reduction of CD rates, avoiding significant payoffs in commercial real estate.
• Focus remains on organic growth and operational efficiency.

WesBanco continues to demonstrate resilience and growth across its financial strategy. The focus on operational efficiency and talent acquisition positions the company well for future success, especially with the anticipated benefits from the Premier Financial acquisition and upcoming Federal Reserve rate cuts.

InvestingPro Insights

• WesBanco's solid performance in Q3 2024 is further highlighted by its market capitalization of $2.02 billion and a P/E ratio of 14.41.
• The bank has increased its dividend for 13 consecutive years, showcasing its commitment to returning value to shareholders, with a current yield of 4.74%.
• With 48 consecutive years of dividend payments, WesBanco appeals to income-focused investors looking for stability.
• A return on assets of 0.76% reflects its ability to generate profits effectively.

Full transcript – WesBanco Inc (WSBC) Q3 2024:

Operator

Welcome to the WesBanco Third Quarter 2024 Earnings Conference Call. All participants will be in listen-only mode. Questions will be taken after today’s presentation. This event is being recorded. I now turn the conference over to John Iannone, Senior Vice President, Investor Relations.

John Iannone

Thank you, and welcome to WesBanco, Inc’s third quarter 2024 earnings conference call. Our CEO Jeff Jackson and CFO Dan Weiss will lead the discussion today. We’ll review our strong Q3 results, our operational updates, and the forecast for Q4.

Jeffrey Jackson

On the call today, we will discuss our strong third quarter performance and share insights on our operations moving forward. We achieved growth across both deposits and loans and maintain solid credit quality. Our acquisition of Premier Financial remains on track pending approvals. This quarter, we reported a net income of $36.3 million and our tangible common equity ratio increased to 8.84%. Our commercial and residential lending teams drove impressive year-over-year loan growth.

Daniel Weiss

In Q3 2024, we reported a GAAP net income of $34.7 million. Loan growth remained solid, driven by our commercial lending operations. Our deposit growth reflects our effective retention strategies and successful campaigns. Our credit quality remains strong, and we continue to carefully manage costs while seeking operational efficiencies moving forward.

Operator

Thank you, and now we will move into the Q&A session, and we will take the first question now.

Jeffrey Jackson

Thank you for your continued support. We look forward to engaging with you at future events.