WesBanco(US:WSBC)2022-08-04 20:31Financial Performance - Net income for the three months ended June 30, 2022, was $42,748 thousand, down 39.6% from $70,588 thousand in the prior year[9]. - Basic earnings per common share decreased to $0.67 for the three months ended June 30, 2022, compared to $1.02 for the same period in 2021, a decline of 34.3%[9]. - Comprehensive loss for the three months ended June 30, 2022, was $22.001 million, compared to a comprehensive income of $73.371 million in the same period of 2021[11]. - Net income available to common shareholders for the six months ended June 30, 2022, was $81,807 thousand, down from $138,641 thousand in 2021, a decrease of about 41.0%[25]. - Net income available to common shareholders for Q2 2022 was $40.2 million, or $0.67 per diluted share, down from $68.1 million and $1.01 per diluted share in Q2 2021[125]. Asset and Loan Portfolio - Total assets decreased to $16,799,624 thousand as of June 30, 2022, from $16,927,125 thousand at December 31, 2021, representing a decline of approximately 0.76%[8]. - Net portfolio loans increased to $10,091,286 thousand, up from $9,611,856 thousand, reflecting a growth of about 4.98% year-over-year[8]. - Total portfolio loans amounted to $10.208 billion as of June 30, 2022, an increase from $9.733 billion as of December 31, 2021, representing a growth of about 4.9%[49]. - The fair value of total loans increased to $10.23 billion as of June 30, 2022, compared to $9.76 billion as of December 31, 2021, reflecting a growth of approximately 4.8%[39]. - The total commercial real estate portfolio increased to $5.85 billion as of June 30, 2022, up from $5.54 billion as of December 31, 2021, indicating a growth of approximately 5.6%[39]. Income and Expenses - Total interest and dividend income for the three months ended June 30, 2022, was $118,447 thousand, a decrease of 6.8% compared to $123,327 thousand for the same period in 2021[9]. - Total non-interest income decreased to $26,983 thousand for the three months ended June 30, 2022, down from $36,112 thousand in 2021, a reduction of approximately 25.3%[9]. - Total non-interest expense increased to $87,019 thousand for the three months ended June 30, 2022, compared to $83,812 thousand in the prior year, an increase of about 3.0%[9]. - Non-interest income for the three months ended June 30, 2022, was $26.98 million, compared to $36.11 million in the same period of 2021[119]. - Non-interest expense for the three months ended June 30, 2022, was $87.02 million, compared to $83.81 million in Q2 2021[119]. Credit Losses and Provisions - The provision for credit losses was $(812) thousand for the three months ended June 30, 2022, significantly lower than $(21,025) thousand in the same period of 2021[9]. - The total allowance for credit losses for loans and loan commitments increased to $125,121,000 as of June 30, 2022, compared to $129,397,000 at the beginning of the year[41]. - The provision for loan losses showed a significant decrease of $4,190,000 for the six months ended June 30, 2022, compared to a provision of $45,138,000 for the same period in 2021[41]. - The allowance for credit losses on loans increased to $117,403,000 as of June 30, 2022, from $121,622,000 at the end of the previous year[41]. - The total allowance for credit losses was $125.1 million as of June 30, 2022, representing 1.15% of total portfolio loans, down from 1.25% as of December 31, 2021[193]. Deposits and Borrowings - Total deposits remained stable at $13,569,302 thousand as of June 30, 2022, compared to $13,565,863 thousand at December 31, 2021[8]. - Non-interest bearing demand deposits increased by $147.9 million, or 3.2%, to $4.74 billion as of June 30, 2022, compared to $4.59 billion at December 31, 2021[201]. - Certificates of deposit decreased by $187.3 million from December 31, 2021, primarily due to a corporate strategy aimed at increasing retail deposit relationships[203]. - Federal Home Loan Bank borrowings decreased by $61.3 million, or 33.3%, to $122.7 million as of June 30, 2022[204]. - Subordinated debt and junior subordinated debt increased by $148.1 million to $280.9 million, attributed to the issuance of $150 million in subordinated debentures on March 23, 2022[206]. Securities and Investments - Total available-for-sale debt securities amounted to $3,116,057 thousand with a fair value of $2,884,651 thousand as of June 30, 2022, reflecting a decrease in unrealized losses of $232,379 thousand compared to December 31, 2021[28]. - The total debt securities reached $4,397,352 thousand with a fair value of $4,038,245 thousand, indicating a net unrealized loss of $362,037 thousand[32]. - The fair value of equity securities decreased from $13,466 thousand on December 31, 2021, to $11,413 thousand by June 30, 2022, reflecting a decline of approximately 15.2%[89]. - The total gross unrealized securities losses rose to $362.0 million from $40.3 million, reflecting increased market rates[168]. - The weighted average yield of the investment portfolio increased from 1.89% to 2.17%[167]. Loan Quality and Performance - Non-performing loans decreased by $4.2 million or 10.6% from December 31, 2021, with total non-performing assets at $35.324 million[189]. - The annualized net loan charge-offs were 0% for Q2 2022, compared to (0.03)% for Q2 2021, indicating improved credit quality[128]. - Total nonperforming loans as of June 30, 2022, were $45,172,000, compared to $49,794,000 as of December 31, 2021[52]. - The total classified loans, including substandard and doubtful, amounted to $126.257 million as of June 30, 2022, compared to $116.013 million as of December 31, 2021, indicating an increase of about 8.8%[49]. - The risk grading system for commercial loans emphasizes debt service coverage, leverage, and loan-to-value ratios, which are critical in assessing loan quality[44]. Economic and Market Conditions - The company operates through 193 branches and 190 ATMs across multiple states, significantly impacted by economic factors such as market interest rates and local economic conditions[123]. - Core net interest margin is expected to increase in the remainder of 2022 and into 2023 due to higher earning asset yields and anticipated federal funds rate increases[138]. - The effective tax rate for Q2 2022 was 19.4%, down from 20.9% in Q2 2021, with a decrease in the provision for income taxes by $8.3 million[132]. - The company intends to continue focusing on core deposit strategies and improving the overall mix of transaction accounts to total deposits[203]. - The company does not generally solicit brokered deposits but participates in the Certificate of Deposit Account Registry Services (CDARS®) program, with balances totaling $37.7 million as of June 30, 2022[203].