WesBanco(US:WSBC)2024-02-26 22:23Financial Performance - For the twelve months ended December 31, 2023, net income available to common shareholders was $148.9 million, or $2.51 per diluted share, down from $182.0 million, or $3.02 per diluted share in 2022[192]. - Interest income increased by $197.9 million, or 38.5%, to $711.5 million in 2023 compared to 2022[192]. - Total assets as of December 31, 2023, were $17.7 billion, an increase of 4.6% compared to December 31, 2022[193]. - Total portfolio loans reached $11.6 billion, reflecting an 8.7% increase year-over-year[193]. - Basic earnings per common share decreased to $2.51 in 2023 from $3.03 in 2022, representing a decline of 17.2%[196]. - Return on average assets fell to 0.86% in 2023, down from 1.08% in 2022, a decrease of 20.4%[196]. - The efficiency ratio increased to 63.64% in 2023 compared to 59.53% in 2022, indicating a rise in operational costs[196]. - Non-interest expense increased by $30.9 million, or 8.7%, driven by increases in FDIC insurance, salaries, and marketing expenses[192]. - Net income available to common shareholders decreased to $148.91 million in 2023 from $181.99 million in 2022, a decline of 18.2%[201]. Capital and Regulatory Compliance - As of December 31, 2023, Wesbanco's Common Equity Tier 1 (CET1) ratio was 10.99%, Tier 1 capital ratio was 12.05%, and total capital ratio was 14.91%, all exceeding minimum requirements[58]. - Wesbanco Bank's CET1, Tier 1, and total capital to risk-adjusted assets ratios were 12.13%, 12.13%, and 12.97%, respectively, as of December 31, 2023[58]. - The Federal Reserve requires a minimum CET1 ratio of 4.5%, Tier 1 capital ratio of 6%, and total capital ratio of 8% for banks[56]. - Wesbanco's leverage ratio was 9.87% as of December 31, 2023, indicating strong capital adequacy[60]. - Wesbanco Bank was classified as "well capitalized" under FDIC regulations as of December 31, 2023, allowing it to pay dividends without restrictions[44]. - Wesbanco's total assets increased above $15 billion due to recent acquisitions, affecting the inclusion of certain trust preferred securities in Tier 1 capital[138]. Competition and Market Environment - The company has faced intense competition from various financial institutions, which may impact its market share and profit potential[34]. - Wesbanco's ability to attract and retain banking customers may be challenged by increased competition from various financial institutions and fintech companies, potentially impacting loan and deposit growth[126]. - The company's trust and investment services segment competes with commercial banks, trust companies, and investment advisory firms, among others[34]. Community Engagement and Philanthropy - In 2023, Wesbanco provided philanthropic donations totaling $0.9 million and employees contributed 11,500 volunteer hours[33]. - Wesbanco Bank received an "Outstanding" CRA rating from the FDIC for community development performance for the period of July 2019 through November 2022, marking the eighth consecutive "Outstanding" rating over more than twenty years[87]. - The Wesbanco CDC has made over 231 loans totaling over $178 million, benefiting businesses in low-income, economically distressed communities and creating over 6,800 jobs[88]. - Wesbanco has been recognized with the "America Saves Designation of Savings Excellence for Banks" for eight consecutive years, highlighting its efforts to encourage savings during America Saves Week 2023[88]. - Wesbanco originated over $2 billion in community development loans in the past five years, supporting local communities[89]. Risk Management and Operational Challenges - The company is exposed to operational risks, including reputational, legal, compliance, and fraud risks, which could materially affect its operations[133]. - Wesbanco's risk management framework is crucial for mitigating various risks, and any failure in this framework could lead to unexpected losses[140]. - The implementation of Basel III capital standards may negatively impact Wesbanco's capital requirements and overall financial condition[106]. - Changes in economic or political policies could adversely impact Wesbanco's business and its customers[101]. - The transition to remote work environments may complicate the recruitment and retention of key employees, impacting business operations[134]. Asset Management and Investment Portfolio - Approximately 36% of Wesbanco's total securities portfolio was invested in municipal bonds as of December 31, 2023, exposing the company to default risks associated with economic downturns in municipalities[117]. - The increase in interest rates in 2023 led to a decrease in the fair value of securities in Wesbanco's investment portfolio, resulting in unrealized losses recorded in other comprehensive income[109]. - Wesbanco's goodwill was approximately $1.1 billion, representing 43% of stockholders' equity as of December 31, 2023, with potential impairment risks that could negatively affect financial results[122]. Employee and Corporate Culture - Wesbanco employed 2,321 full-time equivalent employees as of December 31, 2023, with an average tenure of approximately 10 years for all employees and over 16 years for executive officers[27]. - The turnover rate for Wesbanco in 2023 was 19%, while the turnover rate for officers was 15%[28]. - Wesbanco's corporate culture emphasizes customer and employee satisfaction, with initiatives focused on diversity and inclusion[29][31]. Dividends and Shareholder Returns - For the year ended December 31, 2023, Wesbanco declared cash dividends of approximately $10.1 million to preferred shareholders and $82.9 million to common shareholders[43]. - The quarterly dividend was increased to $0.36 per share in Q4 2023, marking the seventeenth increase over the last thirteen years[195]. - Dividends declared per common share increased to $1.41 in 2023 from $1.37 in 2022, a growth of 2.9%[196]. - Total shareholder return for Wesbanco was 105.70 as of December 31, 2023, compared to 100.00 at the end of 2018, reflecting a moderate growth trajectory[170].