WesBanco(US:WSBC)2025-04-30 13:00Financial Data and Key Metrics Changes - For the quarter ending March 31, 2025, the company reported net income excluding merger and restructuring expenses of $51.2 million, with diluted earnings per share of $0.66, representing an 18% year-over-year increase despite a significant increase in shares outstanding due to the Premier Financial acquisition [5][11] - The net interest margin improved to 3.35%, and the efficiency ratio improved to 58.62% [5][15] - Total assets increased by 54% year-over-year to $27.4 billion, with total portfolio loans increasing by 57.3% [12][13] Business Line Data and Key Metrics Changes - Organic loan growth was 8% year-over-year and 4% quarter-over-quarter annualized, driven by strong performance across banking teams [8][12] - Total commercial loans increased by 10% year-over-year, with a commercial loan pipeline of approximately $1.3 billion, of which over 25% is attributable to Premier [8][12] - Organic deposit growth was $922 million year-over-year and $285 million quarter-over-quarter, with total deposits exceeding $21.3 billion [7][13] Market Data and Key Metrics Changes - The company’s loan portfolio is diversified across a nine-state footprint, with approximately 70% in the Mid-Atlantic region [10] - The company has limited exposure to the DC market and no government contractor line of business, which mitigates risks associated with regional economic downturns [10] Company Strategy and Development Direction - The successful acquisition of Premier Financial is expected to enhance market position and accelerate long-term growth strategy [4][6] - The company aims to fund full-year loan growth with deposits, maintaining a focus on organic growth and positive operating leverage [7][12] - The company is also focused on disciplined expense management to drive positive operating leverage throughout 2025 [20] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about future loan growth, expecting mid-single-digit growth during 2025, supported by a strong loan pipeline and market conditions [8][12] - The company is closely monitoring macroeconomic factors, including potential impacts from trade negotiations and tariffs, but remains confident in its diversified portfolio [10][11] - Management anticipates two Fed rate cuts in June and September but does not expect a significant impact on net interest margin due to a neutral rate-sensitive position [19] Other Important Information - The provision for credit losses for the first quarter was $69 million, with the allowance for credit losses at $234 million, reflecting a coverage ratio increase to 1.25% [14][15] - Non-interest income totaled $34.7 million, a 13% increase from the prior year, primarily due to the Premier acquisition [16] Q&A Session Summary Question: Margin outlook on an organic basis - Management anticipates roughly 4 to 6 basis points of margin improvement per quarter on an organic basis, with Premier contributing to a slight reduction in that range [23][24] Question: Clarity on expense run rate - The expected expense run rate is in the low $140 million range for each of the next three quarters, with full cost savings expected to be realized by the fourth quarter [27][28] Question: Bond yields and deposit costs - The bond yields were approximately 3.07% at quarter-end, and management expects continued reduction in deposit costs, particularly on CDs [35][36] Question: Loan growth outlook and pipeline - The loan pipeline is strong at approximately $1.4 billion, with expectations for mid to upper single-digit loan growth, despite some pullbacks due to tariffs [80][81] Question: Credit quality and charge-off expectations - Management remains confident in credit metrics, with any increases in criticized loans primarily related to the Premier acquisition [56][58] Question: Capital management and deployment - The company is currently in capital build mode and is focused on digesting the Premier acquisition before considering further M&A or buybacks [68][70]