WesBanco(US:WSBC)2021-10-27 21:49Financial Data and Key Metrics Changes - For Q3 2021, the company reported net income available to common shareholders of $45.4 million and diluted earnings per share of $0.70, excluding merger and restructuring charges [8] - GAAP net income for the three months ended September 30, 2021, was $41.9 million, with earnings per diluted share of $0.64, compared to $0.66 last year [20] - Total assets increased by 2.1% year-over-year to $16.9 billion, primarily due to growth in the securities portfolio [20][22] - Total portfolio loans decreased by 9.8% year-over-year to $9.9 billion, largely due to the forgiveness of $940 million in SBA Payroll Protection Program loans [21] - Total deposits increased by 10% year-over-year to $13.4 billion, driven by stimulus-related funds and higher personal savings [22] Business Line Data and Key Metrics Changes - The commercial loan production for the year reached nearly $1.3 billion, with 35% generated in Q3 [9] - The residential mortgage pipeline remains strong, contributing to solid originations expected in the upcoming quarters [10] - Noninterest income for Q3 was $32.8 million, a decrease of 5.4% year-over-year, primarily due to lower mortgage banking income [25] - Wealth management businesses saw organic growth, with trust up 13.4% and securities brokerage up 13.9% for the quarter [26] Market Data and Key Metrics Changes - Commercial line of credit utilization remains about 12 percentage points below historical averages due to excess liquidity among companies [10] - The company experienced significant commercial real estate project payoffs, totaling over $630 million for the first nine months of the year, surpassing previous years [11] Company Strategy and Development Direction - The company is focused on expense management while making strategic hires to enhance growth opportunities [7] - Plans to hire an additional 20 commercial lenders over the next year to strengthen market presence [13] - The company aims for mid-to-upper single-digit loan growth in the long term [13] Management's Comments on Operating Environment and Future Outlook - Management noted that the low interest rate environment continues to negatively impact margins, but strong residential mortgage origination volumes are helping mitigate this [19] - The company anticipates continued improvements in macroeconomic factors, which should lead to a reduction in the allowance for credit losses over time [33] - Management expressed confidence in the company's ability to leverage its competitive advantages for future growth [18] Other Important Information - The company completed the conversion of its core banking software system to FIS's IBS platform, enhancing operational efficiencies and capabilities for growth [17] - The company repurchased approximately 2.1 million shares of common stock for a total cost of $71.3 million during the third quarter [29] Q&A Session Summary Question: Can you provide additional color on the C&I paydowns? - Management indicated that the C&I line usage was up slightly, with commercial real estate loans categorized under C&I impacting the numbers [38] Question: How do you see core loan yields trending? - Management expects the core loan yield delta to decrease, with new loans targeting a range of 3% to 3.25% [41] Question: What is the outlook for core expenses going forward? - Management suggested that the current expense level of around $88 million may be a reasonable run rate, with potential for slight reductions [46][50] Question: What is the timeline for getting reserves back to day one levels? - Management anticipates that as credit continues to improve, reserves will trend downward, potentially returning to day one levels by the end of 2022 or 2023 [78]