WSBC

WesBanco, Inc. (WSBC)

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WesBanco, Inc. (WSBC)

Q1 2013 Earnings Call

April 25, 2013 11:00 am ET

Executives

Paul M. Limbert – President and Chief Executive Officer

Robert H. Young – Executive Vice President, Chief Financial Officer

Analysts

Catherine Mealor – Keefe, Bruyette & Woods

William Wallace – Raymond James

David Peppard – Janney Montgomery Scott LLC

Michael Burn – Macquarie Capital

Presentation

Operator

Good afternoon and welcome to Wesbanco's Conference Call. My name is Ashley, and I will be your conference facilitator today. Today's call will cover Wesbanco's discussion of results of operations for the quarter ended March 31, 2013. Please be advised all lines have been placed on mute to prevent any background noise. After the speakers' remarks there will be a question-and-answer period (Operator Instructions). This call is also being recorded. If you object to the recording, please disconnect at this time.

Forward-looking statements in this presentation 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 contained herein should be read in conjunction with Wesbanco's 2012 Annual Report on Form 10-K and other reports, which are available on the SEC’s website www.sec.gov, or at WesBanco's website www.wesbanco.com. Investors are cautioned that forward-looking statements, which are not historical fact, involve risks and uncertainties, including those detailed in WesBanco's 2012 Annual Report on Form 10-K filed with the SEC under the section Risk Factors in Part I, Item 1A. Such statements are subject to important factors that could cause actual results to differ materially from those contemplated by such statements WesBanco does not assume any duty to update any forward-looking statements.

WesBanco’s first quarter 2013 earnings release was issued yesterday and is available at www.wesbanco.com. This call will include about 20 to 30 minutes of prepared commentary followed by a question-and-answer period, which I will facilitate. An archived webcast of this call will be available at wesbanco.com. WesBanco’s participants in today’s call will be Paul Limbert, President and Chief Executive Officer, Jim Gardill, Chairman of the Board and Robert Young, Executive Vice President and Chief Financial Officer.

And all will be available for questions following opening statements. Mr. Limbert, you may begin your conference.

Paul M. Limbert

Thank you, Ashley. Good morning everyone. Thank you for participating in WesBanco’s first quarter 2013 earnings conference call. We’re pleased you have joined us this morning to hear about WesBanco’s excellent operating results. I would like to make some opening comments, Bob Young, our CFO will provide financial highlights and then Jim Gardill our Chairman will moderate the question-and-answer period.

A press release detailing the results of the first quarter was issued last evening. A copy of the entire press release is available on our website. We will assume that all participants are familiar with WesBanco and we can begin our discussion of the first quarter results.

WesBanco had an excellent first quarter. Our results were better than the fourth quarter of last year, and also better than the first quarter of 2012. Including merger related expenses WesBanco was able to increase earnings to $16 million, representing a return on average assets of 1.07% and a return on average equity of 9%.

Earnings in 2013 represent an increase of 34% from the first 2012 and 27% increase from the fourth quarter of 2012. These results have allowed us to raise our first quarter 2013 dividend to $0.19 per share or by 5.6%. Our dividend has been increased five times in the last nine quarters.

During this quarter we were able to convert the fidelity customer processing into WesBanco’s information systems and change signage on the fidelity branch locations. Completing the conversion during the quarter allowed us to adjust the staffing complement and include most of the final merger related expenses in this quarter. That increased earnings was provided by improvement in net interest income, revenue growth, continued improvement in credit quality and control of other operating expenses. Bob Young will provide additional details relating to the improvements. We’ve been pleased to be able to complete the Fidelity transaction quickly, from announcement date to the customer data conversion the elapsed time was seven months. Now, we’ve turned our attention to improving our market position in Pittsburgh, we are in the process of visiting existing Fidelity customers and hiring additional revenue producing employees. Today, we have added to the Pittsburgh market treasury management and securities representatives and are in the process of hiring additional lending staff.

Additional lenders include both, running the four family, residential, mortgage originators and commercial loan officers. The Pittsburgh marketplace has been recognized it’s having one of the highest growth rates of jobs in the nation, actually the economy is doing well and with the additional revenue producers along with existing management staff who live in the market, we anticipate will be successful at growing our market share.

In addition to having a new market from which we can generate growth we have seen a significant amount of activity coming from the natural gas companies in the Marcellus and Utica shale areas. During 2012, we saw deposits from these natural gas drilling companies exceed $225 million for our customers and lease bonus and royalty payments.

Payments from these large national organizations continue to be deposited during 2013, totaling $60 million in the first quarter. While some of these deposits are used or invested by our customers, we have seen our deposit balances grow. Deposits have grown by $62 million in the first quarter of 2013, because of the large amounts of gas found in these regions we fully expect many secondary companies will follow this cheap energy source.

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