) reported its third straight quarter with a positive earnings
surprise in late October, which boosted earnings estimates for this
provider of commercial banking services. Furthermore, with a
price-to-book (P/B) ratio of just 0.9, this Zacks #1 Rank (Strong
Buy) is a true value pick.
Impressive Third Quarter Results
On Oct 23, WesBanco earned 48 cents per share in the third quarter
of 2012, topping the Zacks Consensus Estimate by 6.7% and last
year's earnings by 17.1%. The upsurge was aided by increased
non-interest income and lower provision for credit losses,
partially offset by enhanced non-interest expenses and a decline in
net interest income.
Non-interest income surged 9.3% to $16.0 million, primarily driven
by net gains on sales of mortgage loans and net securities gains.
However, net interest income declined 2.8% year over year to $41.7
million, due to lower interest and dividend income. Net interest
margin dropped 16 basis points to 3.51%. Moreover, non-interest
expenses rose 9.5% year over year to $36.8 million, mainly due to
restructuring and merger-related expenses.
Credit metrics continued to improve at WesBanco. The provision for
credit losses was $4.5 million, down 58.5% from the year-ago
quarter with net charge-offs showing a declining trend. Net
charge-offs were down 73.6% to $4.6 million., Moreover, total
non-performing loans represented 1.76% of total loans as of
September 30, 2012, compared with 2.60% in the prior-year period.
WesBanco completes Merger with Fidelity Bancorp,
In Nov 2012, WesBanco and Fidelity jointly announced the completion
of WesBanco's acquisition of Fidelity and the election of a
director and senior officers. The merger, announced in July 2012,
was completed after the regulatory nod and Fidelity's shareholders'
The merger creates a multi-state bank holding company of $6.2
billion in total assets, which would provide banking services
through 119 locations and 111 ATMs in West Virginia, Ohio and
Pennsylvania. The deal expands WesBanco's franchise in western
Pennsylvania into the Pittsburgh, Pennsylvania region.
Earnings Momentum on an Upswing
The past 60 days have seen all 4 estimates for 2012 move higher,
pushing the Zacks Consensus Estimate up by 4.5% to $1.86. For 2013,
the Zacks Consensus Estimate has advanced 4.4% to $1.88.
The estimates reflect year-over-year improvements of about 12.4%
for 2012 and 1.4% for 2013.
In addition to its low P/B, WesBanco has a P/E multiple at 11.6 (a
P/E multiple under 15.0 and a P/B ratio below 3.0 generally
indicate value). Furthermore, the company's share price has gained
nearly 9.6% year to date.
Additionally, WesBanco currently enjoys a dividend yield of 3.4%.
Therefore, in addition to being a value stock, the company offers
an income opportunity.
Headquartered in Wheeling, West Virginia, WesBanco, the holding
company for WesBanco Bank, Inc., provides various retail and
commercial banking services. The company was founded in 1968 and
operates through 112 branches in West Virginia, Ohio and Western
Pennsylvania. WesBanco has a market capital of about $617.1
million. Banner Corporation (
) is another Zacks #1 Rank (Strong Buy) in the same sector.
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