<PAGE> 1
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES AND EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1994
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from ____________ to ____________
Commission File Number 0-8467
WESBANCO, INC.
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C>
West Virginia 55-0571723
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
1 Bank Plaza, Wheeling, WV 26003
(Address of principal executive offices) (Zip Code)
</TABLE>
304-234-9000
(Registrant's telephone number, including area code)
Not Applicable
(Former name, former address and former fiscal year,
if changed since last report)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or, for such shorter period
that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. Yes X No
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date. Outstanding at
October 31, 1994, 8,507,953 shares.
<PAGE>
<PAGE> 2
PART 1 - FINANCIAL INFORMATION
- - ------------------------------
Unaudited consolidated condensed Balance Sheets at September 30,
1994 and December 31, 1993, Consolidated Statements of Income,
Consolidated Statements of Changes in Shareholders' Equity and
Consolidated Statements of Cash Flows for the nine months ended September
30, 1994 and 1993 are set forth on the following pages. All previously
presented financial information has been restated to include First
Fidelity Bancorp, Inc. For further information see Footnote 5. In the
opinion of management of the Registrant, all adjustments, consisting of
normal recurring accruals, necessary for a fair presentation of the
financial information referred to above for such periods, have been made.
The results of operations for the nine months ended September 30, 1994
are not necessarily indicative of what results will be for the entire
year. For further information, refer to the Annual Report to
Shareholders which includes consolidated financial statements and
footnotes thereto and WesBanco, Inc.'s Annual Report on Form 10-K for the
year ended December 31, 1993.
Earnings per share was computed by dividing net income, less
preferred stock dividends and accretion, by the weighted average number
of common shares outstanding during the period. Preferred stock
dividends are cumulative and are payable quarterly at an annual rate of
$15.20 per share. Conversion of the preferred stock to common stock, in
accordance with the conversion requirements, would increase outstanding
common shares by approximately 113,443 shares. The fully dilutive effect
of preferred stock is less than 3%.
<PAGE>
<PAGE> 3
WESBANCO, INC.
CONSOLIDATED BALANCE SHEET
(Unaudited)
(dollars in thousands)
<TABLE>
<CAPTION>
September 30, December 31,
l994 1993
------------- ------------
<S> <C> <C>
ASSETS
Cash and due from banks $ 47,494 $ 47,306
Due from banks - interest bearing 297 297
Federal funds sold 22,540 29,349
Investment securities (Note 1) 488,845 492,667
Loans-net (Notes 2 and 3) 738,891 734,298
Bank premises and equipment - net 22,187 22,453
Accrued interest receivable 11,924 12,020
Other assets 14,393 8,432
---------- ----------
TOTAL ASSETS $1,346,571 $1,346,822
---------- ----------
LIABILITIES
Deposits:
Non-interest bearing demand $ 133,356 $ 121,390
Interest bearing demand 266,592 277,756
Savings deposits 306,965 317,496
Certificates of deposit 405,554 396,962
---------- ----------
Total deposits 1,112,467 1,113,604
---------- ----------
Federal funds purchased and repurchase
agreements 57,218 51,226
Short-term borrowings 5,957 10,454
Dividends payable 1,887 1,316
Accrued interest payable 4,897 5,452
Other liabilities 5,662 5,413
---------- ----------
TOTAL LIABILITIES 1,188,088 1,187,465
---------- ----------
Redeemable Preferred Stock (Series A, 8%
Cumulative, $1.25 par value, 10,000 shares
issued; 9,925 and 10,000 shares outstanding,
respectively) 1,852 1,841
SHAREHOLDERS' EQUITY (NOTE 5)
Preferred stock, no par value, 1,000,000
shares authorized; none outstanding --- ---
Common stock, $2.0833 par value;
25,000,000 shares authorized;
8,682,103 shares issued 18,087 18,170
Capital surplus 26,984 27,910
Capital reserves 2,139 2,139
Retained earnings 117,130 111,378
Less: Treasury stock at cost (174,150
and 49,960 shares, respectively) (4,798) (1,324)
Unrealized net loss on investments
available for sale - net of
tax effect (2,154) ---
---------- ----------
157,388 158,273
Deferred employee benefit related to ESOP (757) (757)
---------- ----------
TOTAL SHAREHOLDERS' EQUITY 156,631 157,516
---------- ----------
TOTAL LIABILITIES, REDEEMABLE
PREFERRED STOCK AND SHAREHOLDERS'
EQUITY $1,346,571 $1,346,822
---------- ----------
</TABLE>
The accompanying Notes to Consolidated Financial Statements are an integral
part of these financial statements.
<PAGE>
<PAGE> 4
WESBANCO, INC.
CONSOLIDATED STATEMENT OF INCOME
(Unaudited)
(in thousands, except share and per share amounts)
<TABLE>
<CAPTION>
For the three months For the nine months
ended September 30, ended September 30,
--------------------- --------------------
1994 1993 1994 1993
---- ---- ---- ----
<S> <C> <C> <C> <C>
INTEREST INCOME:
Interest and fees on loans $ 15,769 $ 16,301 $ 46,565 $ 48,052
Interest on investment securities 7,236 7,702 21,669 23,688
Other interest income 105 196 503 565
Total interest income 23,110 24,199 68,737 72,305
---------- --------- ---------- ----------
INTEREST EXPENSE:
Interest on deposits 8,392 9,129 24,927 28,474
Interest on other borrowings 492 520 1,382 1,462
---------- --------- ---------- ----------
Total interest expense 8,884 9,649 26,309 29,936
---------- --------- ---------- ----------
NET INTEREST INCOME 14,226 14,550 42,428 42,369
Provision for possible loan losses 4,377 563 5,512 1,955
---------- --------- ---------- ----------
NET INTEREST INCOME AFTER
PROVISION FOR POSSIBLE
LOAN LOSSES 9,849 13,987 36,916 40,414
---------- --------- ---------- ----------
OTHER INCOME:
Trust fees 942 892 3,223 3,107
Service charges and other income 1,641 1,448 4,448 4,303
Net securities transaction gains 48 (4) 323 129
---------- --------- ---------- ----------
Total other income 2,631 2,336 7,994 7,539
---------- --------- ---------- ----------
OTHER EXPENSES:
Salaries, wages and fringe benefits 5,439 5,058 16,030 15,328
Premises and equipment - net 1,131 1,130 3,446 3,378
Other operating 3,431 3,379 9,821 9,870
---------- --------- ---------- ----------
Total other expenses 10,001 9,567 29,297 28,576
---------- --------- ---------- ----------
Income before provision for
income taxes 2,479 6,756 15,613 19,377
Provision for income taxes (Note 4) 390 1,924 4,205 5,511
---------- --------- ---------- ----------
NET INCOME $ 2,089 $ 4,832 $ 11,408 $ 13,866
---------- --------- ---------- ----------
Preferred stock dividends and
discount accretion $ 46 $ 46 $ 138 $ 138
---------- --------- ---------- ----------
Net income available to common
shareholders $ 2,043 $ 4,786 $ 11,270 $ 13,728
---------- --------- ---------- ----------
Earnings per share of common stock $ .24 $ .55 $ 1.31 $ 1.59
---------- --------- ---------- ----------
Average outstanding shares of common
stock 8,570,860 8,640,132 8,618,697 8,655,348
---------- ---------- --------- ----------
Dividends declared per share of
common stock $ .22 $ .20 $ .64 $ .59
---------- ---------- ---------- ---------
</TABLE>
The accompanying Notes to Consolidated Financial Statements are an integral
part of these financial statements.
<PAGE>
<PAGE> 5
WESBANCO, INC.
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
(Unaudited)
(in thousands)
<TABLE>
<CAPTION>
For the nine months ended
September 30,
--------------------------
1994 1993
---- ----
<S> <C> <C>
Total Shareholders' Equity,
beginning of period $157,516 $147,452
-------- --------
Net Income 11,408 13,866
Cash dividends declared:
Common (5,518) (3,870)
Preferred (114) ---
Common dividends by pooled banks
prior to acquisition --- (903)
Preferred dividends by pooled
banks prior to acquisition --- (114)
Common stock issued through a dividend
reinvestment plan by pooled banks
prior to acquisition --- 183
Accretion of preferred stock (24) (24)
Net purchase of common
treasury shares (4,483) (1,111)
Treasury stock used for pooled bank 1,009 ---
Change in common stock due to treasury
stock used for pooled bank (83) ---
Change in paid in surplus - common
stock due to treasury stock used for
pooled bank (926) ---
Increase in ESOP related borrowings --- (422)
Unrealized net loss on investments
available for sale-net of tax
effect (2,154) ---
--------- --------
Net change in Shareholders' Equity (855) 7,605
--------- --------
Total Shareholders' Equity,
end of period $156,631 $155,057
-------- --------
</TABLE>
The accompanying Notes to Consolidated Financial Statements are an integral
part of these financial statements.
<PAGE>
<PAGE> 6
WESBANCO, INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited) (in thousands)
<TABLE>
<CAPTION>
For the nine months ended
September 30,
--------------------------
1994 1993
---- ----
<S> <C> <C>
Cash flows from operating activities:
Net income $ 11,408 $ 13,866
Adjustments to reconcile net income to
net cash provided by operating
activities:
Depreciation 1,528 1,413
Provision for possible loan losses 5,512 1,955
Net amortization and accretion 3,996 4,166
Gain on sales of investment securities (323) (129)
Deferred income taxes 156 63
Other - net 3 (366)
Increase or decrease in assets and
liabilities:
Interest receivable 96 56
Other assets (4,722) (2,533)
Interest payable (555) (925)
Other liabilities 191 1,096
------- -------
Net cash provided by operating activities 17,290 18,662
------- -------
Investing Activities:
Investment securities held to maturity:
Payments for purchases (77,270) (115,130)
Proceeds from sales --- 2,534
Proceeds from maturities and calls 32,277 43,563
Investment securities available for sale:
Payments for purchases (59,468) (28,278)
Proceeds from sales 60,307 23,953
Proceeds from maturities, calls
and prepayments 40,778 67,547
Net increase in loans (10,074) (22,336)
Purchases of premises and equipment-net (1,262) (1,701)
------- -------
Net cash used by investing activities (14,712) (29,848)
------- -------
Financing activities:
Net increase (decrease) in
certificates of deposit 8,592 (21,814)
Net increase (decrease) in demand and
savings accounts (9,729) 38,722
Increase in federal funds purchased
and repurchase agreements 5,992 5,079
Proceeds from ESOP related borrowings --- 422
Increase (decrease) in short-term borrowings (4,497) 1,664
Dividends paid (5,059) (4,538)
Net purchases of treasury stock (4,498) (1,110)
------- -------
Net cash provided (used) by financing activities (9,199) 18,425
------- -------
Net increase (decrease) in cash and cash
equivalents (6,621) 7,239
------- -------
Cash and cash equivalents at beginning of year 76,655 74,029
------- --------
Cash and cash equivalents at end of period $ 70,034 $ 81,268
-------- --------
</TABLE>
For the nine months ended September 30, 1994 and 1993, WesBanco paid $26,864
and $30,861 in interest on deposits and other borrowings and $5,260 and
$5,332 for income taxes, respectively.
As of September 30, 1994 and 1993, the net change in loans classified as in-
substance foreclosure loans resulted in an increase in other assets of
$1,971 and a decrease of $726, respectively.
The accompanying Notes to Consolidated Financial Statements are an integral
part of these financial statements.
<PAGE>
<PAGE> 7
WESBANCO, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(dollars in thousands)
NOTE 1 - INVESTMENT SECURITIES
- - ------------------------------
<TABLE>
<CAPTION>
September 30, December 31,
1994 1993
------------- -------------
<S> <C> <C>
Investments Held to Maturity (at cost):
U.S. Treasury and Federal
Agency Securities $138,186 $274,962
Obligations of States and
political subdivisions 128,011 121,757
Mortgage-backed securities --- 11,104
Other securities 1,419 1,721
Investments Available for Sale (September 30,1994,
at market, December 31, 1993, at lower
of cost or market):
U.S. Treasuries and Federal
Agency Securities 211,968 74,808
Mortgage-backed securities 8,468 ---
Other securities 793 8,315
-------- --------
Total $488,845 $492,667
-------- --------
</TABLE>
As of January 1, 1994, the Corporation adopted FAS No. 115, "Accounting
for Certain Investment in Debt and Equity Securities." Prior to the
adoption of FAS No. 115, management's classification of investments
available for sale included: U.S. Treasury and Agencies debt securities with
a call or maturity of one year or less, corporate securities and marketable
equity securities. With the adoption of FAS No. 115, management has changed
its classification of investment securities available for sale to include
Treasury and Agencies purchased with final maturities extending beyond three
years, corporate securities, mortgage-backed securities and marketable
equity securities. The market value adjustment as of January 1, 1994,
increased investments by $5,259 and increased shareholders' equity by $3,182
after the tax effect of $2,077. The effect of the net market value
adjustment as of September 30, 1994 was to decrease investments by $3,523
and decrease shareholders' equity by $2,154 after the tax effect of $1,369.
The effect of the market value adjustment between January 1, 1994 and
September 30, 1994 was a net decrease in investment securities of $8,782 and
a related after tax effect on shareholders' equity of $5,336. Certain
investment classifications in prior periods have been reclassified to
conform with current presentation.
<PAGE>
<PAGE> 8
NOTE 2 - LOANS:
- - ---------------
<TABLE>
<CAPTION>
September 30,December 31,
1994 1993
-------------------------
<S> <C> <C>
Loans:
Commercial $154,470 $161,102
Real Estate-Construction 21,645 21,181
Real Estate-Mortgage 353,018 342,173
Installment 230,255 228,906
-------- --------
759,388 753,362
-------- --------
Deduct:
Unearned income (8,404) (7,213)
Reserve for possible loan losses
(Note 3) (12,093) (11,851)
-------- --------
(20,497) (19,064)
-------- --------
$738,891 $734,298
-------- --------
</TABLE>
NOTE 3 - RESERVE FOR POSSIBLE LOAN LOSSES:
- - ------------------------------------------
<TABLE>
<CAPTION>
For the nine months
ended September 30,
--------------------
1994 1993
---- ----
<S> <C> <C>
Balance at beginning of period $11,851 $10,638
Recoveries credited to reserve 340 444
Provision for loan losses 5,512 1,955
Losses charged to reserve (5,610) (1,656)
------- -------
Balance at end of period $12,093 $11,381
------- -------
</TABLE>
NOTE 4 - INCOME TAXES
- - ---------------------
A reconciliation of the average federal statutory tax rate to the
reported effective tax rate attributable to income from operations follows:
<TABLE>
<CAPTION>
For the nine months
ended September 30,
---------------------------
1994 1993
---- ----
<S> <C> <C> <C> <C>
Federal statutory tax rate $5,465 35% $6,782 35%
Tax-exempt interest income from
securities of states and
political subdivisions (1,773) (11) (1,638) (9)
State income tax - net of
federal tax effect 396 2 529 3
All other - net (including retro-
active effect of tax rate increase) 117 1 (162) (1)
------------ ------------
Effective tax rates $4,205 27% $5,511 28%
------------ ------------
</TABLE>
<PAGE>
<PAGE> 9
NOTE 5 - COMPLETED MERGER
- - -------------------------
On February 28, 1994, the Corporation acquired First Fidelity Bancorp,
Inc., with total assets of approximately $309,911, in a transaction
accounted for as a pooling-of-interests. In connection with this
transaction, the Corporation issued 2,053,815 shares of common stock and
10,000 shares of redeemable preferred stock. The consolidated financial
statements for the nine months and three months ended September 30, 1994 and
1993 and as of September 30, 1994 and December 31, 1993 include the accounts
of First Fidelity Bancorp, Inc. for all periods and dates presented.
The following supplemental information reflects the separate results
of the combined entities for the periods prior to the acquisition:
<TABLE>
<CAPTION>
For the nine months ended
September 30, 1993
-----------------------------------
First
As Fidelity
Previously Bancorp,
Presented Inc. Consolidated
---------- -------- ------------
<S> <C> <C> <C>
Net interest income $31,927 $10,442 $42,369
Net income 11,241 2,625 13,866
Earnings per common share 1.70 1.07 1.59
</TABLE>
<PAGE>
<PAGE> 10
MANAGEMENTS'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
- - ---------------------------------------------------------------------------
OPERATIONS (Dollars in Thousands)
- - ----------
Financial Condition
- - -------------------
Total assets of WesBanco as of September 30, 1994 were $1,346,571 as
compared to $1,346,822 as of December 31, 1993.
Investment securities declined by $3,822 between September 30, 1994 and
December 31, 1993. The majority of the decline was due to the market value
adjustment of $(3,523) in investments categorized as available for sale at
September 30, 1994.
Net loans increased $4,593 between September 30, 1994 and December 31,
1993. The loan growth can be attributed to an increase in real estate loans
of approximately $11,309. This increase was largely due to consumers
refinancing homes to take advantage of lower interest rates while lower
rates continued during 1994. Commercial loans declined by approximately
$6,632 during the same time period primarily due to a write down
approximating $4,000 on a collateralized commercial loan which encountered
financial problems along with a reclassification of the remaining balance
into other assets and the lack of loan demand. Installment loans increased
$1,349 between September 30, 1994 and December 31, 1993.
Total deposits declined $1,137 between September 30, 1994 and
December 31, 1993. The lack of growth in the deposit area is due to the
general economic conditions and competition from nonbank products.
Comparison of the nine months ended September 30, 1994 and 1993
- - ---------------------------------------------------------------
Earnings Summary
- - ----------------
Net income for the nine months ended September 30, 1994 was $11,408 or
$1.31 per share, compared to $13,866 or $1.59 per share for the same time
period in 1993. The decrease in net income was due to the increase in the
provision for possible loan losses for the nine months ended September 30,
1994 as compared to 1993.
During the third quarter 1994, the Corporation recognized a write down
approximating $4,000 on a collateralized commercial loan which encountered
financial problems. The write down represents management's best estimate
<PAGE>
<PAGE> 11
of the loss exposure, based on information available at this time, after an
exhaustive review of the financial status of the borrower. The after-tax
effect on net income was approximately $2,469.
Net income performance for the trailing twelve months ended
September 30, 1994, including the write down, reflected a return on average
assets of 1.14%, and a return on average equity of 9.79%. The return on
average assets and return on average equity for the trailing twelve-month
period ending September 30, 1993, were 1.36% and 11.91% respectively. Book
value per share was $18.41 at September 30, 1994, compared to $17.96 at
September 30, 1993. The capital to asset ratio as of September 30, 1994,
was 12.42% and the loan loss reserve to gross loans outstanding was 1.61%.
Exclusive of the write down, net income for the nine months ending September
30, 1994, would have been level with net income reported at September 30,
1993.
Current period loan and deposit interest rates are generally above
levels noted in the previous comparative period. During the first nine
months of 1994, most banks' primary lending rate was between 6.0% and 7.75%
and that rate for the first nine months of 1993 approximated 6.0%. In spite
of increasing rates, continued repricing of assets, primarily investment
securities, which had yields above these levels caused the average yield on
WesBanco's interest earning assets to decrease to 7.3% during the first nine
months of 1994 from 7.7% during the first nine months of 1993. Decreases
in deposit rates implemented during 1993 for interest bearing liabilities
caused a decrease in average rates paid to 3.4% during the first nine months
of 1994 from 3.8% during the first nine months of 1993. Net tax equivalent
interest income expressed as a percentage of average earning assets remained
the same at 4.8% for the nine months ended September 30, 1994 and 1993.
Interest Income
- - ---------------
Total interest income decreased $3,568 or 5% between the nine month
periods ended September 30, 1994 and 1993. Interest and fees on loans
decreased $1,487 or 3% primarily due to the decrease in the average rates
<PAGE>
<PAGE> 12
earned on loans outstanding partially offset by an increase in the average
balance of loans outstanding. Average rates earned on loans decreased by
approximately .6%. Interest on investments in U.S. Treasury and Agencies
decreased $1,661 or 9%. The decline was due to a decrease in the average
yield of .5% along with a decrease in the average outstanding balance of
approximately $4,107 between the nine months ending September 30, 1994 and
1993. Interest earned on investments in states and political subdivisions
increased $286 or 6%. Increases in the average balance of this type of
investment, approximating $15,902 were offset by a decrease in the average
yield of approximately .5%. Overall declines in average investment rates
earned were caused by maturities of higher yielding securities and the
purchase of investments at current market rates. Other interest income,
primarily interest on federal funds sold, decreased $62 or 11%. Decreases
in the average outstanding balance of approximately $7,302 offset by an
increase in the average yield of approximately .8% caused the decrease.
Interest Expense
- - ----------------
Total interest expense decreased $3,627 or 12% between the nine month
period ended September 30, 1994 and 1993. Average rates paid on all
deposits decreased by approximately .5% offset by an increase in average
total deposit volumes of approximately $979 between the periods ended
September 30, 1994 and 1993. Interest expense on interest-bearing demand
deposits decreased $735 or 12% due to the decrease in the average rates paid
of .4% partially offset by the increase in the average balances of
approximately $3,465. The average interest rate paid on interest bearing
demand deposits was 2.7% during the first nine months of 1994 down from 3.1%
during the first nine months of 1993. Traditional savings account interest
expense decreased $973 or 13% due to the decrease in the average rate paid
of approximately .5% offset by an increase in the average balance
outstanding of approximately $13,708. The average interest rate paid on
traditional savings accounts decreased to 2.7% during the first nine months
of 1994 from 3.2% during the first nine months of 1993. Certificates of
<PAGE>
<PAGE> 13
deposit interest expense decreased $1,839 or 12%. The average outstanding
balances decreased by $16,195 due to declining rates offered on certificates
of deposit during 1993 and into 1994 in relation to other deposit products.
Due to the deposit rate environment, the interest rate differential between
certificates of deposit and passbook savings provided limited incentive for
customers to reinvest in term accounts. Average rates paid on certificates
of deposit decreased approximately .4% due to the decline in rates paid on
new and rollover deposits. Interest on other borrowings, which primarily
includes repurchase agreements, decreased $80 or 5% primarily due to the
decrease in average balances outstanding of approximately $1,155 along with
a decrease in the average rates paid.
Provision for Possible Loan Losses
- - ----------------------------------
The provision for possible loan losses increased $3,557 due to the
writedown of $4,000 on a collateralized commercial loan which encountered
financial problems. Net charge-offs were $5,270 at September 30, 1994 as
compared to $1,212 as of September 30, 1993. The reserve for possible loan
loss was 1.61% of total loans as of September 30, 1994 and 1.59% as of
December 31, 1993. Nonaccrual loans, renegotiated loans, in-substance
foreclosures and other real estate owned decreased by $2,513 between
September 30, 1994 and December 31, 1993. Total nonaccrual and renegotiated
loans, in-substance foreclosures and other real estate owned totaled $9,522
or 1.3% of loans as of September 30, 1994 as compared to $12,035 or 1.6% as
of December 31, 1993. The level of non-performing assets continues to be
a result of the depressed commercial real estate market and the lack of
economic growth in the primary market area.
Loans past due 90 days or more have decreased to $2,326 or .3% of total
loans as of September 30, 1994 from $2,550 or .3% of total loans as of
December 31, 1993. Many commercial loans are in the form of demand notes
and a number of these loans do not require regular principal payments.
Accordingly, past due classifications might not be indicative of repayment
risks.
<PAGE>
<PAGE> 14
FAS No. 114, "Accounting by Creditors for Impairment of a Loan," is
effective for periods beginning after December 15, 1994, and management is
unable to determine the effect of adopting FAS No. 114 at this time.
Lending by WesBanco banks is guided by lending policies which allow for
various types of lending. Normal lending practices do not include the
acquisition of high yield non-investment grade loans or "highly leveraged
transactions" ("HLT") from out of the primary market areas as described by
uniform interagency definition of an "HLT" for supervisory purposes, jointly
issued by the Federal Reserve Bank, the Comptroller of Currency and the
Federal Deposit Insurance Corporation.
Other Income
- - ------------
Other income increased $455 or 6%. Trust fee income increased $116
primarily due to the number of new trust accounts and increases in estate
settlement fees during the first nine months of 1994. Trust assets were in
excess of $1 billion as of September 30, 1994. Service charges and other
income increased $145 between the nine months ended September 30, 1994 and
1993 primarily due to an increase in service charges earned on deposit
accounts. Net securities transaction gains increased $194 between the nine
months ended September 30, 1994 and 1993.
Other Expenses
- - --------------
Total other expenses increased $721 or 3%. Salary expense increased
$702 due to normal salary adjustments, increased payroll taxes and increased
cost of health insurance. Premises and equipment expense increased $68
between the nine months ended September 30, 1994 and 1993, primarily due to
the increased level of depreciation associated with upgrading data
processing equipment. Other operating expenses decreased $49 or 1%
primarily due to internal consolidations during 1994 and 1993 which improved
operational efficiencies.
Comparison of the three months ended September 30, 1994 and 1993
- - ----------------------------------------------------------------
Interest Income
- - ---------------
Total interest income decreased $1,089 between the three month periods
<PAGE>
<PAGE> 15
ending September 30, 1994 and 1993. Interest and fees on loans decreased
$532 due to a decrease in average rates partially offset by an increase in
the average volume of loans outstanding. Interest on investments in U.S.
Treasury and Agencies decreased $407. Average balances outstanding
decreased as well as average rates earned. Investment securities average
balances decreased due to the lack of growth in deposits and a continued
increase in loan balances. Interest on investments in states and political
subdivisions increased $113 primarily due to increased outstanding average
balances. Other interest income, primarily interest on federal funds sold,
decreased $91 due to the decrease in the average balance outstanding.
Interest Expense
- - ----------------
Total interest expense decreased $765 between the three month periods
ended September 30, 1994 and 1993. Interest paid on deposits decreased $737
primarily due to the decrease in average rates paid on deposits as well as
a decrease in the average balance outstanding of approximately $9,735.
Interest on other borrowings decreased $28 for the three months ended
September 30, 1994 and 1993, primarily due to the decrease in the average
volume of short-term borrowings of approximately $10,322.
Provision for Possible Loan Losses
- - ----------------------------------
The provision for possible loan losses increased $3,814 between the
three months ended September 30, 1994 and 1993. The increase was due to a
write down of $4,000 on one commercial loan which occurred during the third
quarter of 1994.
Other Income
- - ------------
Total other income increased by $295 primarily due to the increase in
service charges and other income of $193 and trust fees of $50. Net
securities transaction gains increased by $52.
Other Expenses
- - --------------
Total other expenses increased by $434. Salaries and employee benefits
increased $381 due to a normal salary adjustments, increased payroll taxes,
increased cost of health insurance and employee overtime associated with
internal consolidations. Other operating expenses increased $52 between the
<PAGE>
<PAGE> 16
three months ended September 30, 1994 and 1993. The increase was primarily
due to increased advertising associated with corporate wide deposit
campaigns.
PART II - OTHER INFORMATION
- - ---------------------------
Item 1-5 - Not Applicable
- - -------------------------
Item 6 (a) - Exhibits
- - ---------------------
(15) Letter re unaudited interim financial information. page 17.
Item 6 (b) - Reports on Form 8-K
- - --------------------------------
There were no reports filed on Form 8-K for the three months ended
September 30, 1994.
SIGNATURE
- - ---------
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
WESBANCO, INC.
Date: November 10, 1994 /s/ Edward M. George
------------------ --------------------
Edward M. George
President and Chief Executive Officer
Date: November 10, 1994 /s/ Paul M. Limbert
------------------ -------------------
Paul M. Limbert
Executive Vice President and
Chief Financial Officer
<PAGE> 1
EXHIBIT 15
PRICE WATERHOUSE, L.L.P.
Report of Independent Accountants
November 8, 1994
To the Board of Directors and
Shareholders of WesBanco, Inc.
We have reviewed the consolidated balance sheet and the related consolidated
statements of income, changes in shareholders' equity and cash flows of
WesBanco, Inc., and its subsidiaries (the Company) as of September 30, 1994
and 1993, and for the 3-month and 9-month periods then ended (the
consolidated interim financial information) as presented in the Company's
Quarterly Report on Form 10-Q for the quarter ended September 30, 1994.
This consolidated interim financial information is the responsibility of the
Company's management.
We conducted our review in accordance with standards established by the
American Institute of Certified Public Accountants. A review of interim
financial information consists principally of applying analytical procedures
to financial data and making inquiries of persons responsible for financial
and accounting matters. It is substantially less in scope than an audit
conducted in accordance with generally accepted auditing standards, the
objective of which is the expression of an opinion regarding the financial
statements taken as a whole. Accordingly, we do not express such an
opinion.
Based on our review, we are not aware of any material modifications that
should be made to the consolidated interim financial information for it to
be in conformity with generally accepted accounting principles.
We previously audited, in accordance with generally accepted auditing
standards, the consolidated balance sheet as of December 31, 1993, and the
related consolidated statements of income, changes in shareholders' equity
and cash flows for the year then ended (not presented herein), and in our
report dated January 24, 1994 and February 28, 1994, we expressed our
unqualified opinion on those consolidated financial statements. We did not
audit the financial statements of First Fidelity Bancorp, Inc. for 1993,
which statements reflect total assets of $307,965,000 at December 31, 1993.
Those statements were audited by other auditors whose report thereon has
been furnished to us, and our opinion expressed herein, insofar as it
relates to the amounts included for First Fidelity Bancorp, Inc. for 1993,
is based solely on the report of other auditors. In our opinion, the
information set forth in the accompanying consolidated balance sheet
information as of December 31, 1993, is fairly stated in all material
respects in relation to the consolidated balance sheet from which it has
been derived.
/s/ Price Waterhouse L.L.P.
600 Grant Street
Pittsburgh, PA 15219
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