WesBanco(US:WSBC)2023-01-25 19:05Financial Data and Key Metrics Changes - For Q4 2022, the company reported net income available to common shareholders of $49.7 million and diluted earnings per share of $0.84, excluding after-tax merger and restructuring charges [7] - Full-year net income available to common shareholders was $183.3 million, with diluted earnings per share of $3.04 [7] - The return on average assets was 1.18% and return on tangible equity was 16.05% [8] - Total assets as of December 31, 2022, were $16.9 billion, with total portfolio loans of $10.7 billion and total securities of $3.8 billion [19] Business Line Data and Key Metrics Changes - Total loan growth, excluding SBA PPP loans, was 11.7% year-over-year and 4.2% quarter-over-quarter [12] - Residential real estate loans increased more than 20% year-over-year and sequentially [13] - Total commercial loan growth was 9.6% year-over-year and 4.1% quarter-over-quarter [13] Market Data and Key Metrics Changes - Total deposits as of December 31, 2022, were $12.2 billion, essentially flat compared to the prior year [20] - Non-interest-bearing deposits improved to 36% of total deposits [20] - The net interest margin for Q4 2022 was 3.49%, an increase of 16 basis points sequentially and 52 basis points year-over-year [21] Company Strategy and Development Direction - The company aims to maintain a strong organization for shareholders through sustainable earnings growth and effective capital management [6] - Plans to continue investing in employee retention and hiring to support long-term growth [15][16] - The company is focused on expanding its presence in higher growth markets across six states [15] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about loan growth, projecting upper single-digit growth on a long-term basis [35] - The company remains asset-sensitive and expects the federal funds rate to peak at 5% in Q1 2023 [28] - Management indicated that they will continue to evaluate existing lenders to ensure productivity while adding high-value individuals to enhance growth opportunities [17] Other Important Information - The efficiency ratio improved to 56.9%, reflecting effective cost control amidst inflationary pressures [25] - The quarterly dividend was increased from $0.34 to $0.35 per share, representing a 2.9% increase [27] - The company plans to invest more in marketing to support growth across its markets [32] Q&A Session Summary Question: Loan growth expectations and deposit ratios - Management indicated that loan growth is economy-dependent, aiming for upper single-digit growth long-term, and plans to maintain a loan-to-deposit ratio around 90% to 95% [35][38] Question: Credit quality and reserve ratio - The reserve ratio has decreased due to qualitative factors rolling off, with future provisioning dependent on macroeconomic forecasts and loan growth [39][40] Question: Funding costs and interest rates - Management acknowledged the impact of rising interest rates on funding costs but emphasized their strong core funding base allows them to lag behind peers [42][44] Question: Loan growth drivers in Q4 - Loan growth was primarily driven by hiring in existing markets rather than new loan production offices, with a lower level of commercial real estate payoffs contributing positively [46][48] Question: Capital management and buybacks - The company is cautious about buybacks, evaluating the impact of AOCI and tangible book value before making decisions [50][51] Question: M&A strategy - Currently, the company is not actively pursuing M&A but remains open to opportunities in higher-growth markets where they have established loan production offices [54][56]