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, an 18% increase year over year despite a significant increase in shares outstanding due to the Premier Financial acquisition [6][14] - The net interest margin improved to 3.35%, and the efficiency ratio improved to 58.62% [6][14] - Total assets increased by 54% year over year to $27.4 billion, with total portfolio loans increasing by 57.3% [14][15] 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 [10][14] - Total commercial loans increased by 10% year over year and almost 7% sequentially, with a commercial loan pipeline of approximately $1.3 billion [10][14] - Non-interest income totaled $34.7 million, a 13% increase from the prior year, primarily due to the Premier acquisition [17] Market Data and Key Metrics Changes - Total deposits increased by 58% year over year to $21.3 billion, with organic deposit growth fully funding loan growth [15][16] - Organic deposit growth excluding CDs was 4.8% year over year and 10.6% quarter over quarter annualized [15][16] - The company’s loan portfolio is diversified across a nine-state footprint, with 70% in the Mid Atlantic region [12] Company Strategy and Development Direction - The successful acquisition of Premier Financial is expected to elevate the company into the ranks of the top 100 largest U.S. banks by asset size, strengthening market position and accelerating long-term growth strategy [6][7] - The company aims to fund full-year loan growth with deposits, despite potential fluctuations quarter to quarter [9] - The focus remains on disciplined expense management to drive positive operating leverage throughout 2025 [21] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about future loan growth, supported by a strong pipeline and banking teams [14][19] - The macroeconomic environment is characterized by volatility in equity markets due to trade war threats, but the company’s diverse loan portfolio provides stability [12] - The company 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 [20] Other Important Information - The provision for credit losses was $69 million, with $59 million related to the day one non-PCD provision [15] - The allowance for credit losses increased to $234 million, raising the coverage ratio to 1.25% [16] - The company expects to recognize the bulk of remaining merger-related expenses totaling approximately $45 million in the second quarter [22] 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 2 to 4 basis points [24][25] Question: Clarity on expense numbers - The modeled 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 [28][29] Question: Bond book yields and deposit costs - The bond yields were around 3.07% at quarter-end, and management expects continued reduction in deposit costs, particularly on CDs [36][38] 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 [80] Question: Credit quality and charge-off expectations - Management feels confident about credit metrics, with any increases in criticized loans primarily related to the Premier acquisition [58] Question: Capital management and future M&A - The company is currently in capital build mode and is focused on integrating the Premier acquisition before considering further M&A opportunities [67][68]