<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, 1995
------------------
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
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WESBANCO, INC.
--------------
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C>
West Virginia 55-0571723
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(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,
1995, 8,403,661 shares.
1 of 20
<PAGE> 2
PART 1 - FINANCIAL INFORMATION
- ------------------------------
Consolidated Balance Sheets at September 30, 1995 (unaudited) and
December 31, 1994, Consolidated Statements of Income, Consolidated Statements
of Changes in Shareholders' Equity and Consolidated Statements of Cash Flows
for the nine months ended September 30, 1995 and 1994 (unaudited) are set
forth on the following pages. 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, 1995 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, 1994.
Earnings per share were 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%.
2
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WESBANCO, INC.
CONSOLIDATED BALANCE SHEET
(dollars in thousands)
<TABLE>
<CAPTION>
September 30, December 31,
1995 1994
------------- ------------
(Unaudited)
<S> <C> <C>
ASSETS
Cash and due from banks $ 40,457 $ 47,643
Due from banks - interest bearing 301 297
Federal funds sold 17,050 17,370
Investment securities (Note 1) 437,261 476,878
Loans-net (Notes 2, 3 and 4) 819,611 764,801*
Bank premises and equipment - net 22,949 21,874
Accrued interest receivable 11,875 11,347
Other assets 9,861 10,758*
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TOTAL ASSETS $1,359,365 $1,350,968
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LIABILITIES
Deposits:
Non-interest bearing demand $ 119,777 $ 130,739
Interest bearing demand 253,203 263,717
Savings deposits 282,597 296,961
Certificates of deposit 450,498 417,802
---------- ----------
Total deposit 1,106,075 1,109,219
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Federal funds purchased and repurchase
agreements 63,340 65,750
Short-term borrowings 7,808 4,444
Dividends payable 2,111 1,872
Accrued interest payable 6,025 5,360
Other liabilities 6,675 5,833
---------- ----------
TOTAL LIABILITIES 1,192,034 1,192,478
---------- ----------
Redeemable Preferred Stock (Series A,
8% Cumulative, $1.25 par value, 10,000
shares issued; 9,925 shares outstanding) 1,883 1,860
SHAREHOLDERS' EQUITY
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 18,087
Capital surplus 26,968 26,968
Market value adjustment on investments
available for sale - net of tax effect (178) (4,482)
Retained earnings 129,441 121,641
Less: Treasury stock at cost (277,942
and 172,145 shares, respectively) (7,552) (4,735)
---------- ----------
166,766 157,479
Deferred benefits for employees and
directors (1,318) (849)
---------- ----------
TOTAL SHAREHOLDERS' EQUITY 165,448 156,630
---------- ----------
TOTAL LIABILITIES, REDEEMABLE
PREFERRED STOCK AND SHAREHOLDERS'
EQUITY $1,359,365 $1,350,968
---------- ----------
</TABLE>
* Certain amounts in loans and other assets have been reclassified under FAS
No. 114 for comparative purposes.
The accompanying Notes to Consolidated Financial Statements are an integral
part of these financial statements.
3
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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,
--------------------- ---------------------
1995 1994 1995 1994
---- ---- ---- ----
<S> <C> <C> <C> <C>
INTEREST INCOME:
Interest and fees on loans $ 18,059 $ 15,769 $ 52,438 $ 46,565
Interest on investment securities 6,312 7,236 19,230 21,669
Other interest income 209 105 926 503
---------- ---------- ---------- ----------
Total interest income 24,580 23,110 72,594 68,737
---------- ---------- ---------- ----------
INTEREST EXPENSE:
Interest on deposits 9,798 8,392 28,578 24,927
Interest on other borrowings 785 492 2,257 1,382
---------- ---------- ---------- ----------
Total interest expense 10,583 8,884 30,835 26,309
---------- ---------- ---------- ----------
NET INTEREST INCOME 13,997 14,226 41,759 42,428
Provision for possible loan losses 829 4,377 1,673 5,512
---------- ---------- ---------- ----------
NET INTEREST INCOME AFTER PROVISION
FOR POSSIBLE LOAN LOSSES 13,168 9,849 40,086 36,916
---------- ---------- ---------- ----------
OTHER INCOME:
Trust fees 1,027 942 3,495 3,223
Service charges and other income 1,638 1,643 4,565 4,451
Net securities transaction gains 36 48 437 323
---------- ---------- ---------- ----------
Total other income 2,701 2,633 8,497 7,997
---------- ---------- ---------- ----------
OTHER EXPENSES:
Salaries, wages and fringe benefits 5,340 5,439 16,128 16,030
Premises and equipment - net 1,195 1,131 3,481 3,446
Other operating 2,973 3,433 9,348 9,824
---------- ---------- ---------- ----------
Total other expenses 9,508 10,003 28,957 29,300
---------- ---------- ---------- ----------
Income before provision for income taxes 6,361 2,479 19,626 15,613
Provision for income taxes (Note 5) 1,818 390 5,668 4,205
---------- ---------- ---------- ----------
NET INCOME $ 4,543 $ 2,089 $ 13,958 $ 11,408
---------- ---------- ---------- ----------
Preferred stock dividends and discount
accretion $ 46 $ 46 $ 137 $ 138
---------- ---------- ---------- ----------
Net income available to common
shareholders $ 4,497 $ 2,043 $ 13,821 $ 11,270
---------- ---------- ---------- ----------
Earnings per share of common stock $ .53 $ .24 $ 1.63 $ 1.31
---------- ---------- ---------- ----------
Average outstanding shares of common
stock 8,426,601 8,570,860 8,476,882 8,618,697
---------- ---------- ---------- ----------
Dividends declared per share of
common stock $ .25 $ .22 $ .71 $ .64
---------- ---------- ---------- ----------
</TABLE>
The accompanying Notes to Consolidated Financial Statements are an integral
part of these financial statements.
4
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WESBANCO, INC.
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
(Unaudited)
(dollars in thousands)
<TABLE>
<CAPTION>
For the nine months ended
September 30,
-------------------------
1995 1994
---- ----
<S> <C> <C>
Total Shareholders' Equity
Balance, beginning of period $156,630 $157,516
-------- --------
Net Income 13,958 11,408
Cash dividends:
Common (6,022) (5,518)
Preferred (113) (114)
Accretion of preferred stock (23) (24)
Net purchase of treasury shares (2,817) (4,483)
Change in market value adjustment on
investments available for sale-net
of tax effect 4,304 (2,154)
Change in deferred benefits for employees
and directors (469) ---
-------- --------
Net change in Shareholders' Equity 8,818 (885)
-------- --------
Total Shareholders' Equity
Balance, end of period $165,448 $156,631
-------- --------
</TABLE>
The accompanying Notes to Consolidated Financial Statements are an integral
part of these financial statements.
5
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WESBANCO, INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited)
(dollars in thousands)
<TABLE>
<CAPTION>
For the nine months ended
September 30,
--------------------------
1995 1994
---- ----
<S> <C> <C>
Cash flows from operating activities:
Net income $13,958 $11,408
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation 1,551 1,528
Provision for possible loan losses 1,673 5,512
Net amortization and accretion 2,603 3,996
Gain on sales of investment securities (437) (323)
Deferred income taxes (49) 156
Other - net 193 3
Increase or decrease in assets and
liabilities:
Interest receivable (528) 96
Other assets (2,506) (2,751)*
Interest payable 665 (555)
Other liabilities 702 191
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Net cash provided by operating activities 17,825 19,261
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Investing Activities:
Investment securities held to maturity:
Payments for purchases (48,576) (77,270)
Proceeds from maturities and calls 49,492 32,277
Investment securities available for sale:
Payments for purchases (41,134) (59,468)
Proceeds from sales 46,610 60,307
Proceeds from maturities, calls
and prepayments 38,098 40,778
Net increase in loans (56,454) (12,045)*
Purchases of premises and equipment-net (2,591) (1,262)
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Net cash used by investing activities (14,555) (16,683)
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Financing activities:
Net increase in certificates of deposit 32,696 8,592
Net decrease in demand and savings accounts (35,840) (9,729)
Increase (decrease) in federal funds
purchased and repurchase agreements (2,410) 5,992
Increase (decrease) in short-term
borrowings 3,364 (4,497)
Dividends paid (5,895) (5,059)
Other (2,687) (4,498)
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Net cash used by financing activities (10,772) (9,199)
------- -------
Net decrease in cash and cash equivalents (7,502) (6,621)
Cash and cash equivalents at beginning of year 65,310 76,655
------- -------
Cash and cash equivalents at end of period $57,808 $70,034
------- -------
</TABLE>
For the nine months ended September 30, 1995 and 1994, WesBanco paid $30,170
and $26,864 in interest on deposits and other borrowings and $5,755 and $5,780
for income taxes, respectively.
* Certain amounts in loans and other assets have been reclassified under FAS
No. 114 for comparative purposes.
The accompanying Notes to Consolidated Financial Statements are an integral
part of these financial statements.
6
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WESBANCO, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(dollars in thousands)
NOTE 1 - INVESTMENT SECURITIES:
- -------------------------------
<TABLE>
<CAPTION>
September 30, December 31,
1995 1994
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(Unaudited)
<S> <C> <C>
Investments Held to Maturity (at cost):
U.S. Treasury and Federal
Agency securities $146,681 $150,197
Obligations of states and
political subdivisions 124,247 122,716
Other debt securities 1,349 1,260
-------- --------
272,277 274,173
-------- --------
Investments Available for Sale (at market):
U.S. Treasury and Federal
Agency securities 155,577 193,114
U.S. corporate securities 5 915
Mortgage-backed securities 7,098 7,788
Other debt and equity securities 2,304 888
-------- --------
164,984 202,705
-------- --------
Total $437,261 $476,878
-------- --------
</TABLE>
NOTE 2 - LOANS:
- ---------------
<TABLE>
<CAPTION>
September 30, December 31,
1995 1994*
------------- ------------
(Unaudited)
<S> <C> <C>
Loans:
Commercial $168,385 $161,521
Real Estate-Construction 22,123 24,734
Real Estate-Mortgage 380,460 358,540
Installment 271,120 241,441
-------- --------
842,088 786,236
-------- --------
Deduct:
Unearned income (9,534) (9,118)
Reserve for possible loan losses (Note 3) (12,943) (12,317)
-------- --------
(22,477) (21,435)
-------- --------
Total $819,611 $764,801
-------- --------
</TABLE>
* Certain loans have been reclassified under FAS No. 114 for comparative
purposes.
7
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Foreclosed assets are comprised of property acquired through a
foreclosure proceeding, acceptance of a deed-in-lieu of foreclosure, and loans
classified as in-substance foreclosure. In accordance with Financial
Accounting Standard "FAS" No. 114, "Accounting by Creditors for Impairment of
a Loan", a loan is classified as an in-substance foreclosure when the
Corporation has taken possession of the collateral regardless of whether
formal foreclosure proceedings take place. Loans previously classified in
other assets as in-substance foreclosure of approximately $3,666 have been
reclassified to the loan category for December 31, 1994. The reclassification
did not significantly impact the Corporation's financial condition.
NOTE 3 - RESERVE FOR POSSIBLE LOAN LOSSES:
- ------------------------------------------
(Unaudited)
<TABLE>
<CAPTION>
For the nine months
ended September 30,
--------------------
1995 1994
---- ----
<S> <C> <C>
Balance at beginning of period $12,317 $11,851
Recoveries credited to reserve 513 340
Provision for possible loan losses 1,673 5,512
Losses charged to reserve (1,560) (5,610)
------- -------
Balance at end of period $12,943 $12,093
------- -------
</TABLE>
NOTE 4 - Adoption of New Accounting Standards:
- ----------------------------------------------
As of January 1, 1995, the Corporation adopted Financial Accounting
Standard "FAS" No. 114 (as amended by FAS No. 118), "Accounting by Creditors
for Impairment of a Loan." Under the new standard, the 1995 portion of the
reserve for possible loan losses related to loans that are identified for
evaluation in accordance with FAS No. 114 is based on discounted cash flows
using the loan's initial effective interest rate or the fair value of the
collateral for certain collateral dependent loans. If the loan valuation is
8
<PAGE> 9
less than the recorded value of the loan, an impairment reserve must be
established for the difference. A loan is considered impaired when, based
upon current information and events, it is probable that the Corporation will
be unable to collect all principal and interest amounts due according to the
contractual terms of the loan agreement.
At September 30, 1995, the recorded investment in loans that are
considered to be impaired under FAS No. 114 using the discounted cash flow
method was $10,703 (of which $9,542 were on a nonaccrual basis). Included in
this amount is $4,116 of impaired loans for which the related reserve for
possible loan losses is $461 and $6,587 of impaired loans that, as a result of
collateral values, do not require an allowance for credit losses. The average
balance of impaired loans during the nine month period ended September 30,
1995 was approximately $10,836. For the purpose of this standard, all
nonaccrual, renegotiated, and certain performing loans are considered to
be impaired. For the period ended September 30, 1995, the interest income
recognized on impaired loans does not have a material effect on the results of
operations.
The reserve for possible loan losses is maintained at a level believed
adequate by management to absorb estimated probable loan losses. This
evaluation is inherently subjective as it requires material estimates
including the amounts and timing of future cash flows expected to be received
on impaired loans which may be susceptible to significant change.
NOTE 5 - INCOME TAXES: (Unaudited)
- ----------------------------------
A reconciliation of the average federal statutory tax rate to the
reported effective tax rate attributable to income from operations follows:
9
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<TABLE>
<CAPTION>
For the nine months
ended September 30,
-------------------------
1995 1994
---- ----
<S> <C> <C> <C> <C>
Federal statutory tax rate $6,869 35% $5,465 35%
Tax-exempt interest income from
securities of states and political
subdivisions (1,715) (9) (1,773) (11)
State income tax - net of federal
tax effect 556 3 396 2
All other - net (42) 0 117 1
----------- ------------
Effective tax rate $5,668 29% $4,205 27%
----------- ------------
</TABLE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
- --------------------------------------------------------------------------
OPERATIONS (Dollars in thousands except per share amounts)
- ----------
Financial Condition
- -------------------
Total assets of WesBanco as of September 30, 1995 were $1,359,365 as
compared to $1,350,968 as of December 31, 1994.
Investment securities declined by $39,617 between September 30, 1995 and
December 31, 1994. During the period, maturities, calls, prepayments and
sales aggregated $134,200, while investment purchases totalled $89,710. The
net proceeds from a decrease in investments were used to fund loan growth and
to provide for deposit withdrawals.
The market value adjustments in the investment portfolio under the 1994
adoption of FAS No. 115 resulted in unrealized net losses before tax effect on
available for sale securities of $289 and $7,342 as of September 30, 1995 and
December 31, 1994, respectively. These unrealized net losses represent
temporary market value fluctuations which change depending upon general
changes in market rates and the length of time to respective maturity dates.
If the available for sale securities are held until their respective maturity
date, no market value adjustment would be realized.
Net loans increased $54,810 or 7.2% between September 30, 1995 and
December 31, 1994. A significant portion of the loan growth can be attributed
to increases in installment loans which, due to WesBanco offering attractive
10
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rates on automobile loans, increased approximately $29,679. Real estate loans
increased approximately $21,920 resulting from loans made for commercial real
estate projects.
Total deposits declined $3,144 between September 30, 1995 and
December 31, 1994. The lack of growth in the deposit area is due to the
general economic conditions within the Upper Ohio Valley and competition from
nonbank products. Additionally, the composition of deposits changed
significantly over this nine month period as consumers shifted to higher
yielding certificates of deposit from non-term deposit products. Certificates
of deposit increased $32,696 or 7.8% between September 30, 1995 and
December 31, 1994. This shift in deposits reflects the consumer's sensitivity
to a changing interest rate environment and demand for higher yielding
alternatives.
Comparison of the nine months ended September 30, 1995 and 1994
- ---------------------------------------------------------------
Earnings Summary
- ----------------
Net income for the nine months ended September 30, 1995 was $13,958, a
22.3% increase over the same period in 1994. Earnings per share of common
stock for the nine months ended September 30, 1995 and 1994 were $1.63 and
$1.31 respectively. Net income increased primarily due to a decrease in the
provision for possible loan losses, a decrease in overhead costs and an
increase in trust fees for the nine months ended September 30, 1995 as
compared to September 30, 1994. During the third quarter of 1994, the
provision for possible loan losses was increased $4,000 due to the writedown
of a collateralized commercial loan which encountered financial problems. The
after-tax effect on net income was approximately $2,469 for the nine months
ended September 30, 1994.
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Return on average assets (ROA) was 1.39% and 1.13% for the nine months
ended September 30, 1995 and 1994, respectively. Return on average equity
(ROE) was 11.56% compared to 9.68% for the nine months ended September 30,
1995 and 1994, respectively.
Net Interest Income
- -------------------
Net interest income for the nine months ended September 30, 1995
decreased $669 or 1.6% over the same period for 1994. The decline was largely
due to an increase in the average rate paid on interest bearing liabilities.
Net tax equivalent interest income expressed as a percentage of average
earning assets declined to 4.7% from 4.8% during the nine months ended
September 30, 1995 and 1994, respectively.
Both interest income and interest expense increased over the prior year
primarily due to an increase in the interest rate environment during the
second half of 1994 and into the first quarter of 1995. Current period loan
and deposit interest rates are generally above levels noted in the previous
comparative period. During the first nine months of 1995, most banks' primary
lending rates ranged from 8.5% to 9.0% and the rate for the first nine months
of 1994 ranged from 6.0% to 7.75%. The continued upward repricing of interest
earning assets caused the average yield to increase to 7.7% during the first
nine months of 1995 from 7.3% during the first nine months of 1994. The
average rate paid on interest bearing liabilities increased to 4.0% during the
first nine months of 1995 from 3.4% during the same period of 1994 primarily
due to rising market rates and the shift from demand and savings products to
higher yielding certificates of deposit.
Interest Income
- ---------------
Total interest income increased $3,857 or 6% between the nine month
periods ended September 30, 1995 and 1994. Interest and fees on loans
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increased $5,873 or 13% primarily due to both an increase in the average rates
earned and the average balance of loans outstanding. Average rates earned on
loans increased by approximately .4% and average loan balances increased by
approximately $51,779. Interest on investments in U.S. Treasury and Agencies
decreased $2,340 or 14%. The decline was due to a decrease in the average
outstanding balance of approximately $52,217, along with a decrease in the
average yield of .1% between the nine months ending September 30, 1995 and
1994. Interest earned on investments in states and political subdivisions
decreased $210 or 4%. Decreases in the average balance of this type of
investment approximated $4,730 while the average yield remained unchanged.
Other interest income, comprised primarily of interest on federal funds sold,
increased $423 or 84%. The increase was due to average rates earned which
increased to 5.9% during the first nine months of 1995 from 3.8% during the
same period of 1994, and an increase in the average balance of approximately
$3,177.
Interest Expense
- ----------------
Total interest expense increased $4,526 or 17% between the nine month
period ended September 30, 1995 and 1994. Interest expense on deposits
increased $3,651 or 15% during the period as the average rate on interest
bearing deposits increased to 3.9% from 3.4% but was partially offset by a
decrease in average interest-bearing deposit balances of approximately
$10,402. The decrease in average deposits was due to the lack of economic
growth in the Upper Ohio Valley and competition from nonbank products.
Interest expense on interest-bearing demand deposits decreased $114 or 2%
primarily due to a decrease in the average balances of approximately $18,607
partially offset by an increase in the average rates paid. The interest rates
paid on NOW and Money Market accounts approximated 2.8% during the first nine
13
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months of 1995 and 2.7% for the same period of 1994. Interest expense on
traditional savings accounts decreased $433 or 7% due to a decrease in average
balances of approximately $29,802 offset by an increase in the average rates
paid by .1%. Certificates of deposit interest expense increased $4,197 or 32%
due to an increase in the average balances of $38,007 combined with an
increase in the average rates paid of .9%. The increase in the average
balance of certificates of deposit was due to the shift from non-term deposits
to higher yielding deposits. Interest on other borrowings, which primarily
includes repurchase agreements, increased $875 or 63% primarily due to
increases in average rates paid on repurchase agreements of 1.7% and average
balances outstanding of approximately $2,647. Rates paid on repurchase
agreements closely follow the direction of interest rates in the federal
funds market.
Provision for Possible Loan Losses
- ----------------------------------
The provision for possible loan losses decreased due to a decline in net
charge-offs and due to management's evaluation of the credit risk in the
current loan portfolio and analysis of underlying collateral value. Net
charge-offs decreased to $1,047 as of September 30, 1995 from $5,270 as of
September 30, 1994. The provision for possible loan losses for the period
ending September 30, 1994 was increased due to the writedown of a
collateralized commercial loan which encountered financial problems. The
reserve for possible loan losses was 1.55% of total loans as of September 30,
1995 and 1.59% as of December 31, 1994. Nonperforming assets consisting of
nonaccrual loans, renegotiated loans, in-substance foreclosures and other real
estate owned totalled $9,919 or 1.2% of loans as of September 30, 1995 as
compared to $8,795 or 1.2% as of December 31, 1994, an increase of $1,082.
The increase was primarily due to a commercial real estate loan which was
placed
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<PAGE> 15
on nonaccrual status during the second quarter of 1995. Loans past due 90
days or more have decreased to $1,384 or .2% of total loans as of
September 30, 1995 from $2,526 or .3% of total loans as of December 31, 1994.
Lending by WesBanco banks is guided by written 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.
Other Income
- ------------
Other income increased $500 or 6%. Trust fee income increased $272
primarily due to increases in the market values and new trust business during
the first nine months of 1995. The market value of trust assets approximates
$1,257,000 as of September 30, 1995. Service charges and other income
increased $114 between the nine months ended September 30, 1995 and 1994
resulting from the standardization of service charges among subsidiary banks.
Net securities transaction gains increased $114 between the nine months ended
September 30, 1995 and 1994 resulting from a decision to divest an equity
position which no longer had a strategic value to the Corporation. The
divestiture resulted in security gains of approximately $279 during the nine
months ended September 30, 1995.
Other Expenses
- --------------
Total other expenses decreased $343 or 1%. Salary expense and employee
benefits increased $98 primarily due to increased employee benefit expenses
offset by a decrease in the number of full-time equivalent employees.
Implementation of WesBanco's postretirement benefits for the most recent
acquisition along with higher health insurance and payroll taxes caused the
level of benefits to increase. Other operating expenses decreased $476 or
.5% partially due to a decrease in the FDIC insurance rate. Decreases in
other
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<PAGE> 16
operating expenses can also be attributed to improved operational
efficiencies resulting from affiliate bank consolidations during 1995 and 1994.
Comparison of the three months ended September 30, 1995 and 1994
- ----------------------------------------------------------------
Total interest income increased $1,470 between the three month periods
ending September 30, 1995 and 1994. Interest and fees on loans increased
$2,290 due to an increase in average rates coupled with an increase in the
average volume of loans outstanding. Interest on investments in U.S. Treasury
and Agencies decreased $815. Average balances outstanding decreased while
average rates increased slightly by .4%. Interest on investments in states
and political subdivisions decreased $88 primarily due to a decrease in
average balances and a decrease in average rates of .01%. Other interest
income, primarily interest on federal funds sold, increased $104 due to an
increase in both the average balance and the average rate earned.
Total interest expense increased $1,699 between the three month period
ended September 30, 1995 and 1994. Interest paid on deposits increased $1,406
due to both an increase in the average rates paid on deposits and average
interest-bearing deposit balances of approximately $652. Interest on other
borrowings increased $293 for the three months ended September 30, 1995 and
1994, primarily due to an increase in the average volume of repurchase
agreements approximating $3,800.
Total other income increased by $68 primarily due to an increase in
trust fees. Service charges and other income had a decrease of $5.
Total other expenses decreased by $495. Salaries and employee benefits
decreased $99. Premises and equipment increased $64 partially due to an
increase in depreciation expense associated with remodeling at an affiliate
bank, the upgrade of data processing equipment and the construction of a new
16
<PAGE> 17
banking office. Other operating expenses decreased $460 primarily due to a
decrease in the FDIC insurance rates.
Other Matters
- -------------
Effective November 1, 1995, commercial real estate loans totalling
$4,118, of which $3,488 was on nonaccrual status, as of September 30, 1995
were reclassified to Other Assets. This action was taken by WesBanco Wheeling
through a transfer by deed in-lieu of foreclosure. Also on that date,
WesBanco Wheeling established a wholly owned nonbank subsidiary for the
purpose of operating the property until sold. The property will be managed
by an independent management firm. This property is currently being
independently appraised and, therefore, management is unable to estimate at
this time if any adjustment to the current asset value is required.
During the third quarter, the Corporation completed the repurchase of
270,156 shares of common stock under the $7,000 stock repurchase plan
announced in April 1994. Subsequently, during August 1995, the Board of
Directors approved an additional $10,000 stock repurchase plan to make
shares available for general corporate purposes. The timing, price, and
quantity of purchases will be at the discretion of the Corporation. This
program may be discontinued or expanded at any time.
During the fourth quarter 1995, the 9,925 shares of 8% cumulative
redeemable preferred stock of WesBanco will be redeemed or converted into
WesBanco common stock. The holder of the cumulative preferred stock has the
option to redeem the stock at a price of $190 per share or convert the stock
into shares of WesBanco common stock.
The Corporation modified a Directors' deferred compensation plan ("the
Plan") in the first quarter of 1995. Any Director, including affiliate
directors, may elect, at specified times, to participate in the Plan. Each
17
<PAGE> 18
Director who elects to participate in the Plan will have an account
established in which his or her director fees will be credited as they become
payable. Directors may elect to designate that all or part of such account be
deemed to be invested in WesBanco common stock or in a subsidiary bank
interest bearing account. As of September 30, 1995, WesBanco common stock
held for this plan approximated $341 and was classified as a decrease in
Shareholders' Equity.
On January 1, 1995, WesBanco implemented a self-insurance medical plan
available to all employees at their option. Premiums are paid by both
employees and WesBanco into a trust account being administered by a subsidiary
bank. As approved claims become due, payment is made from the trust. The
monthly contribution is determined by an independent actuary, which includes
reinsurance to limit liability in providing medical coverage through the self-
insurance plan. Expenses for the self-insurance plan approximate the total
amount of contributions paid into the trust account for the nine months ending
September 30, 1995.
Part II - OTHER INFORMATION
- ---------------------------
Item 1-5 - Not Applicable
- -------------------------
Item 6(a) - Exhibits
- --------------------
(15) Letter re unaudited interim financial information, page 20.
(27) Financial Data Schedule required by Article 9 of Regulation S-X.
Item 6(b) - Reports on Form 8-K
- -------------------------------
There were no reports filed on Form 8-K for the three months ended
September 30, 1995.
18
<PAGE> 19
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 13, 1995 /s/ Edward M. George
----------------- -------------------------------------
Edward M. George
President and Chief Executive Officer
Date: November 13, 1995 /s/ Paul M. Limbert
----------------- -------------------------------------
Paul M. Limbert
Executive Vice President and
Chief Financial Officer
19
<PAGE> 1
EXHIBIT 15
PRICE WATERHOUSE LLP
Report of Independent Accountants
November 3, 1995
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, 1995
and 1994, 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, 1995. 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, 1994, 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 19, 1995, we expressed our unqualified opinion on those
consolidated financial statements. In our opinion, the information set forth
in the accompanying consolidated balance sheet as of December 31, 1994, is
fairly stated in all material respects in relation to the consolidated balance
sheet from which it has been derived.
/s/ Price Waterhouse LLP
600 Grant Street
Pittsburgh, PA 15219
20
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
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