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 June 30, 1996
---------------
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)
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)
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 July 31, 1996, 8,485,818 shares.
1 of 20
<PAGE> 2
PART 1 - FINANCIAL INFORMATION
- ------------------------------
Consolidated Balance Sheets at June 30, 1996 (unaudited) and
December 31, 1995, Consolidated Statements of Income,
Consolidated Statements of Changes in Shareholders' Equity and
Consolidated Statements of Cash Flows for the six months ended
June 30, 1996 and 1995 (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 six months ended June 30, 1996 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, WesBanco, Inc.'s Annual Report on Form 10-K
for the year ended December 31, 1995 and the Form 10-Q filed for
the period ended March 31, 1996.
Earnings per share for the six months ended June 30, 1996 and
1995 were computed by dividing net income less preferred stock
dividends and discount accretion, where applicable, by the
weighted average number of common shares outstanding during the
period. Effective November 15, 1995 WesBanco redeemed its Series
A 8% Cumulative Preferred stock. Prior to redemption, preferred
stock dividends were cumulative and payable quarterly at an
annual rate of $15.20 per share. The fully dilutive effect of
preferred stock for the six months ended June 30, 1995 was less
than 3%.
2
<PAGE> 3
WESBANCO, INC.
CONSOLIDATED BALANCE SHEET
(dollars in thousands)
<TABLE>
<CAPTION>
June 30, December 31,
1996 1995
----------- --------------
(Unaudited)
<S> <C> <C>
ASSETS
Cash and due from banks $ 46,984 $ 49,008
Due from banks - interest bearing 297 301
Federal funds sold 3,400 14,230
Securities:
Securities available for sale 200,093 172,137
Securities held to maturity (market value
of $214,783 and $253,831) 215,463 251,016
--------- ----------
Total securities 415,556 423,153
Loans:
Loans (net of unearned income of $4,948
and $7,810) 890,324 850,568
Less: Allowance for possible loan losses (13,348) (12,747)
--------- ---------
Net loans 876,976 837,821
Bank premises and equipment - net 23,951 23,026
Accrued interest receivable 10,686 11,020
Other assets 18,790 13,234
---------- ----------
TOTAL ASSETS $1,396,640 $1,371,793
========== ==========
LIABILITIES
Deposits:
Non-interest bearing demand $ 119,968 $ 127,168
Interest bearing demand 250,822 252,950
Savings deposits 274,107 278,821
Certificates of deposit 477,538 456,534
---------- ----------
Total deposits 1,122,435 1,115,473
Federal funds purchased and repurchase
agreements 79,686 70,457
Short-term borrowings 7,304 1,402
Dividends payable 2,202 2,126
Accrued interest payable 6,839 6,744
Other liabilities 5,872 5,551
---------- ----------
TOTAL LIABILITIES 1,224,338 1,201,753
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 25,758 25,758
Market value adjustment on securities
available for sale - net of tax effect (1,617) 849
Retained earnings 137,010 131,527
Less: Treasury stock at cost (212,529
and 186,131 shares, respectively) (5,759) (5,038)
--------- ---------
173,479 171,183
Deferred benefits for employees and directors (1,177) (1,143)
--------- ---------
TOTAL SHAREHOLDERS' EQUITY 172,302 170,040
--------- ---------
TOTAL LIABILITIES AND SHAREHOLDERS'
EQUITY $1,396,640 $1,371,793
========== ==========
The accompanying Notes to Consolidated Financial Statements are
an integral part of these financial statements.
3
<PAGE> 4
WESBANCO, INC.
CONSOLIDATED STATEMENT OF INCOME
(Unaudited)
(in thousands, except share and per share amounts)
</TABLE>
<TABLE>
<CAPTION>
For the three months For the six months
ended June 30, ended June 30,
---------------------- ---------------------
1996 1995 1996 1995
---------- ---------- --------- ----------
INTEREST INCOME:
<S> <C> <C> <C> <C>
Interest and fees on loans $ 18,960 $ 17,675 $ 37,644 $ 34,379
Interest on securities 6,100 6,308 12,120 12,918
Other interest income 87 419 331 717
---------- ---------- --------- ----------
Total interest income 25,147 24,402 50,095 48,014
---------- ---------- --------- ----------
INTEREST EXPENSE:
Interest on deposits 9,712 9,643 19,392 18,780
Interest on other borrowings 868 726 1,769 1,472
---------- ---------- --------- ----------
Total interest expense 10,580 10,369 21,161 20,252
---------- ---------- --------- ----------
NET INTEREST INCOME 14,567 14,033 28,934 27,762
Provision for possible loan losses 677 467 1,541 844
---------- ---------- --------- ----------
NET INTEREST INCOME AFTER PROVISION
FOR POSSIBLE LOAN LOSSES 13,890 13,566 27,393 26,918
---------- ---------- --------- ----------
OTHER INCOME:
Trust fees 1,364 1,173 2,835 2,468
Service charges and other income 1,458 1,460 2,858 2,919
Net securities transaction gains 30 295 116 401
---------- ---------- --------- ----------
Total other income 2,852 2,928 5,809 5,788
---------- ---------- --------- ----------
OTHER EXPENSES:
Salaries, wages and fringe benefits 5,459 5,504 10,664 10,788
Premises and equipment - net 1,275 1,113 2,584 2,286
Other operating 3,043 3,233 5,896 6,367
---------- ---------- --------- ----------
Total other expenses 9,777 9,850 19,144 19,441
---------- ---------- --------- ----------
Income before provision for income taxes 6,965 6,644 14,058 13,265
Provision for income taxes 1,982 1,887 4,170 3,850
---------- ---------- --------- ----------
NET INCOME $ 4,983 $ 4,757 $ 9,888 $ 9,415
========== ========== ========= ==========
Preferred stock dividends and discount
accretion $ --- $ 45 $ --- $ 91
========== ========== ========= ==========
Net income available to common
shareholders $ 4,983 $ 4,712 $ 9,888 $ 9,324
========== ========== ========= ==========
Earnings per share of common stock $ .59 $ .56 $ 1.17 $ 1.10
========== ========== ========= ==========
Average outstanding shares of common
stock 8,469,798 8,496,464 8,475,199 8,502,438
========== ========== ========= ==========
Dividends declared per share of
common stock $ .26 $ .23 $ .52 $ .46
========== ========== ========= ==========
The accompanying Notes to Consolidated Financial Statements are an integral
part of these financial statements.
4
<PAGE> 5
WESBANCO, INC.
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
(Unaudited)
(dollars in thousands)
For the six months ended
June 30,
-------------------------
1996 1995
---------- ----------
Total Shareholders' Equity
Balance, beginning of period $170,040 $156,630
Net Income 9,888 9,415
Cash dividends:
Common (4,405) (3,914)
Preferred --- (75)
Accretion of preferred stock --- (16)
Net purchase of treasury shares (721) (1,062)
Change in market value adjustment on
investments available for sale-net
of tax effect (2,466) 4,140
Change in deferred benefits for employees
and directors (34) (452)
---------- ----------
Net change in Shareholders' Equity 2,262 8,036
---------- ----------
Total Shareholders' Equity
Balance, end of period $172,302 $164,666
========== ==========
The accompanying Notes to Consolidated Financial Statements are
an integral part of these financial statements.
5
<PAGE> 6
WESBANCO, INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited)
(dollars in thousands)
For the six months ended
June 30,
--------------------------
1996 1995
--------- ---------
Cash flows from operating activities:
Net income $ 9,888 $ 9,415
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation 1,158 1,006
Provision for possible loan losses 1,541 844
Net amortization and accretion 1,045 1,829
Gain on sales of investment securities (116) (401)
Deferred income taxes (133) (65)
Other - net (34) (122)
Increase or decrease in assets and
liabilities:
Interest receivable 334 679
Other assets (4,510) (1,128)
Interest payable 95 662
Other liabilities 992 16
--------- ----------
Net cash provided by operating activities 10,260 12,735
--------- ----------
Investing Activities:
Investment securities held to maturity:
Payments for purchases (14,237) (40,126)
Proceeds from maturities and calls 49,451 36,987
Investment securities available for sale:
Payments for purchases (76,342) (25,835)
Proceeds from sales 27,407 32,465
Proceeds from maturities, calls
and prepayments 16,326 27,792
Net increase in loans (40,678) (34,039)
Purchases of premises and equipment-net (2,085) (1,688)
---------- -----------
Net cash used by investing activities (40,158) (4,444)
---------- -----------
Financing activities:
Net increase in certificates of deposit 21,004 26,878
Net decrease in demand and savings accounts (14,042) (37,100)
Increase (decrease) in federal funds
purchased and repurchase agreements 9,229 (6,111)
Increase in short-term borrowings 5,902 2,895
Dividends paid (4,328) (3,905)
Net purchases of treasury stock (721) (933)
---------- ----------
Net cash provided (used) by financing
activities 17,044 (18,276)
---------- ----------
Net decrease in cash and cash equivalents (12,854) (9,985)
---------- ----------
Cash and cash equivalents at beginning of
period 63,238 65,013
---------- ----------
Cash and cash equivalents at end of period $50,384 $55,028
========== ==========
For the six months ended June 30, 1996 and 1995, WesBanco paid
$21,067 and $19,592 in interest on deposits and other borrowings
and $4,200 and $4,030 for income taxes, respectively.
The accompanying Notes to Consolidated Financial Statements are
an integral part of these financial statements.
6
<PAGE> 7
WESBANCO, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 - BASIS OF PRESENTATION:
- -------------------------------
The accompanying unaudited consolidated financial statements
have been prepared in accordance with generally accepted
accounting principles for interim financial information and with
the instructions to Form 10-Q and Article 10 of Regulation S-X.
Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles
for complete financial statements.
The consolidated financial statements include the accounts of
WesBanco, Inc. and its wholly-owned subsidiaries. All
significant intercompany transactions have been eliminated in
consolidation.
NOTE 2 - MERGERS AND ACQUISITIONS:
- ----------------------------------
On February 9, 1996, WesBanco, Inc. announced the Definitive
Agreement and Plan of Merger providing for the merger of the Bank
of Weirton into WesBanco Bank Wheeling, a wholly-owned subsidiary
of WesBanco, Inc. Under the terms of the Definitive Agreement
and Plan of Merger, WesBanco will exchange 130 shares of
WesBanco's common stock for each share of Weirton's common stock
outstanding in a tax-free exchange. The merger, which will be
accounted for as a pooling of interests, is valued at
approximately $45,600,000 based on a market price of $27.00 per
share of WesBanco common stock. Approval of the merger has been
granted by the appropriate regulatory authorities and the
shareholders of Bank of Weirton. Consummation of this merger has
been scheduled for August 30, 1996.
On May 31, 1996, under the terms of an executed Agreement and
Plan of Reorganization, WesBanco, Inc. agreed to purchase the
assets of Universal Mortgage Company of Bridgeport, West Virginia,
and continue its operations in
7
<PAGE> 8
Bridgeport, Charleston, Elkins and Huntington, West Virginia. Universal
Mortgage Company had assets of approximately $2,978,000, shareholders' equity
of approximately $296,000 as of May 31, 1996, and net income of
approximately $29,000 for the five months ended May 31, 1996.
The acquisition will be accounted for as a purchase. A final
purchase price will be determined based upon the net equity of
Universal as of the closing date, with a minimum value of
$800,000. The acquisition price will be paid in the form of
WesBanco common stock to be issued from Treasury shares.
On July 18, 1996, WesBanco, Inc. announced the signing of a
Definitive Agreement and Plan of Merger providing for Vandalia
National Corporation to merge its wholly-owned subsidiary, The
National Bank of West Virginia, into WesBanco Bank Fairmont,
Inc., a wholly-owned subsidiary of WesBanco, Inc. Under the
terms of the Agreement, shareholders of Vandalia will receive
1.2718 shares of WesBanco common stock or, at such shareholders'
election, $34.34 in cash for each share of Vandalia common stock.
The holders of outstanding warrants to purchase Vandalia common
stock will receive the difference between $34.34 and the exercise
price of the warrant in cash. WesBanco anticipates issuing up to
359,912 shares of WesBanco common stock if all Vandalia
shareholders exchange their shares for WesBanco stock. A portion
of these shares will be obtained from existing Treasury balances,
with the remaining shares being newly issued or purchased in the
open market. The acquisition, which is based upon a fixed
exchange ratio, will be accounted for as a purchase transaction,
with an approximate value of $10,319,000. Vandalia reported
total assets of approximately $58,300,000 and shareholders'
equity of approximately $4,300,000 as of June 30, 1996. The
transaction is expected to be completed in the fourth quarter 1996.
8
<PAGE> 9
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
- ---------------------------------------------------------------
RESULTS OF OPERATIONS (Dollars in thousands except per share amounts)
- ----------------------
The following discussion and analysis presents in further detail
the financial condition and results of operations of WesBanco,
Inc. and its subsidiaries. This discussion and analysis should
be read in conjunction with the consolidated financial statements
and notes presented in this report.
Financial Condition
-------------------
Total assets of WesBanco as of June 30, 1996 were $1,396,640 as
compared to $1,371,793 as of December 31, 1995, an increase of
1.8%. The increase in assets was primarily due to an increase in
loans. Total deposits increased .6% while securities declined
1.8% during the comparative period.
Securities:
- -----------
The following table shows the composition of WesBanco's
securities portfolio at June 30, 1996 and December 31, 1995:
June 30, December 31,
1996 1995
--------- ------------
Securities Available for Sale (at market):
- ------------------------------------------
U.S. Treasury and Federal Agency securities $ 134,939 $ 157,505
Obligations of states and political subdivisions 13,391 5,667
Mortgage-backed securities 48,791 6,610
Other debt and equity securities 2,972 2,355
-------- --------
Total Available for Sale 200,093 172,137
-------- --------
Securities Held to Maturity (at cost):
- --------------------------------------
U.S. Treasury and Federal Agency securities 94,556 133,888
Obligations of states and political subdivisions 119,208 115,770
Other debt securities 1,699 1,358
Total held to maturity (market value of -------- --------
$214,783 and $253,831, respectively) 215,463 251,016
-------- --------
Total Securities $415,556 $423,153
======== ========
Representing a source of funds for increasing loan demand,
securities decreased by $7,597 between June 30, 1996 and December
31, 1995. During the period, maturities, calls, prepayments and
sales aggregated $93,184, while investment purchases totaled
$90,579. Investment purchases consisted
9
<PAGE> 10
primarily of mortgage-backed securities, which reflected a yield
advantage over other investments during the first half of 1996.
The market value adjustments, before tax effect, in the
available for sale securities portfolio resulted in unrealized
net losses of $2,655 and unrealized net gains of $1,392 as of
June 30, 1996 and December 31, 1995, respectively. These
adjustments represent market value fluctuations caused by general
changes in market rates and the length of time to respective
maturity dates. If these securities are held until their
respective maturity date, no market value adjustment would be
realized.
Loans:
- ------
The following table shows the composition of WesBanco's loan
portfolio at June 30, 1996 and December 31, 1995:
June 30, 1996 December 31, 1995
---------------- -----------------
Amount Percent Amount Percent
Loans: ------- ------- ------- --------
Commercial $170,741 19.1% $172,270 20.0%
Real Estate-Construction 21,421 2.4% 15,493 1.8%
Real Estate-Mortgage 397,907 44.4% 392,681 45.7%
Consumer 305,203 34.1% 277,934 32.5%
-------- ------ -------- -------
Total loans 895,272 100.0% 858,378 100.0%
Less:
Unearned income (4,948) (7,810)
Allowance for possible loan losses (13,348) (12,747)
--------- ---------
Net loans $876,976 $837,821
========= =========
Net loans increased $39,155 or 4.6% between June 30, 1996 and
December 31, 1995. Overall loan growth was primarily
attributable to the consumer loan portfolio. During the first
half of 1996 and throughout 1995, WesBanco experienced steady
growth in this area as a result of offering attractive rates on
automobile loans.
WesBanco monitors the overall quality of its loan portfolio
through various methods. Underwriting policies and guidelines
have been established
10
<PAGE> 11
for all types of credits and management continually monitors the
portfolio for adverse trends in delinquent and nonperforming loans.
Loans are considered impaired under FAS 114 when it is
determined that WesBanco will be unable to collect all principal
and interest due, according to the contractual terms of the
loans. Impaired loans, which include all nonperforming loans,
are as follows:
June 30, December 31,
1996 1995
--------- --------------
Nonaccrual $6,351 $5,199
Renegotiated and other 3,434 2,092
--------- --------------
Total impaired loans $9,785 $7,291
========= ==============
The average balance of impaired loans during the periods ended
June 30, 1996 and December 31, 1995, were approximately $10,635
and $6,773, respectively.
Specific allowances are allocated for impaired loans based on
the present value of expected future cash flows, or the fair
value of the collateral for loans that are collateral dependent.
Related allowances for possible loan losses on impaired loans
were $1,705 and $334 as of June 30, 1996 and December 31, 1995,
respectively.
Other real estate totaled $3,827 as of June 30, 1996, compared
to $4,137 as of December 31, 1995. Loans past due 90 days or
more was $3,037 or .3% of total loans as of June 30, 1996, as
compared to $3,006 or .4% of total loans as of December 31, 1995.
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 outside the primary market area.
11
<PAGE> 12
Allowance for Possible Loan Losses
- ----------------------------------
Activity in the allowance for possible loan losses is summarized
as follows:
For the six months
ended June 30,
--------------------
1996 1995
------- --------
Balance, at beginning of period $12,747 $12,317
Recoveries credited to allowance 256 437
Provision for possible loan losses 1,541 844
Losses charged to allowance (1,196) (1,052)
-------- --------
Balance, at end of period $13,348 $12,546
======== ========
The provision for possible loan losses increased due to an
increase in net charge-offs and management's evaluation of the
loan portfolio. Net charge-offs increased to $940 as of June 30,
1996 from $615 as of June 30, 1995. The allowance for possible
loan losses was 1.5% of total loans as of June 30, 1996 and 1.5%
as of December 31, 1995.
Deposits:
- ---------
Total deposits increased $6,962 between June 30, 1996 and
December 31, 1995 primarily due to growth in certificates of
deposit. Customer preference for higher yielding products
coupled with competitive pricing have contributed to the steady
certificate of deposit growth. In addition, WesBanco's new
retail banking program called "Good Neighbor Banking", has
contributed to the increase in deposits. The program is designed
to build customer relationships by offering a series of pricing
bonuses, which vary according to the customer's number of
qualifying services. This relationship building is key to long
term deposit growth and customer profitability.
During the comparative period, a shift occurred in deposit mix
from demand and savings deposits, which decreased $14,042 or 2.1%, to
certificates of deposit, which increased $21,004 or 4.6%. The shift to
certificates of deposit from demand and savings deposits reflects the
customer's preference for higher-yielding products, primarily in the Good
Neighbor Banking program
12
<PAGE> 13
which offers a tiered pricing structure based on account balance and
number of qualifying services.
Liquidity and Capital Resources
- -------------------------------
WesBanco manages its liquidity position to meet its funding
needs, including deposit outflows and loan principal
disbursements. WesBanco also manages its liquidity position to
meet its asset and liability management objectives.
In addition to funds provided from operations, WesBanco's
primary sources of funds are deposits, principal repayments on
loans and matured or called investment securities. Scheduled
loan repayments and maturing investment securities are relatively
predictable sources of funds. However, deposit flows and
prepayments on loans are significantly influenced by changes in
market interest rates, economic conditions, and competition.
WesBanco strives to manage the pricing of its deposits to
maintain a balance of cash flows commensurate with loan
commitments and other funding needs.
WesBanco is subject to risk-based capital guidelines that
measure capital relative to risk-adjusted assets and off-balance
sheet financial instruments. The Corporation's Tier I, total
risk-based capital and leverage ratios are well above the
required minimum levels of 4%, 8% and 3%, respectively. At June
30, 1996, all of WesBanco's affiliate banks exceeded the minimum
regulatory levels. Capital adequacy ratios are summarized as
follows:
June 30, December 31,
1996 1995
-------- ------------
Capital Ratios:
Primary capital 13.2% 13.2%
Tier 1 capital 17.5% 18.7%
Total risk-based capital 18.8% 20.0%
Leverage 12.6% 12.4%
13
<PAGE> 14
As previosly announced in August 1995, WesBanco's Board of Directors
approved a $10,000 stock repurchase program. As of April 16, 1996,
approximately $1,667 of this amount was used to purchase Treasury shares.
At the June 1996 Board of Directors' meeting, the stock repurchase plan was
rescinded. There have been no shares purchased under this plan since
April 16, 1996.
Comparison of the six months ended June 30, 1996 and 1995
---------------------------------------------------------
Earnings Summary
----------------
Net income for the six months ended June 30, 1996 was $9,888, a
5% increase over the same period in 1995. Earnings per share of
common stock for the six months ended June 30, 1996 and 1995 were
$1.17 and $1.10 respectively. Net income increased primarily due
to an increase in net interest income, a decrease in overhead
expenses and an increase in trust fees for the six months ended
June 30, 1996 as compared to the same period in 1995.
Return on average assets was 1.43% and 1.41% for the six months
ended June 30, 1996 and 1995, respectively. Return on average
equity was 11.57% compared to 11.72% for the six months ended
June 30, 1996 and 1995, respectively.
Net Interest Income
- -------------------
Net interest income before the provision for possible loan
losses, for the six months ended June 30, 1996 increased $1,172
or 4.2% over the same period for 1995. The increase resulted
from an increase in the net tax equivalent yield combined with
volume growth in both average earning assets of $33,521 and
interest bearing liabilities of $38,670. The growth in average
earning assets was comprised primarily of an increase in loans.
As interest rates generally declined during 1995, lower rates on
mortgage and consumer loan products contributed to a 9.1%
increase in average loans. During the six
14
<PAGE> 15
months ended June 30, 1996, most banks' primary lending rates averaged
8.3% compared to 8.9% for the corresponding period in 1995. Average
interest bearing liabilities increased primarily due to growth in
certificates of deposit and repurchase agreements.
Net tax equivalent yield on average earning assets increased to
4.8% from 4.7% for the six months ended June 30, 1996. The
increase in the net
yield was due to a shift in the mix of assets from investment securities
to higher-yielding loans as well as a reduction of interest rates on demand
and savings products in January 1996.
Interest Income
- ---------------
Total interest income increased $2,081 or 4.3% between the six
month periods ended June 30, 1996 and 1995. Interest and fees on
loans increased $3,265 or 9.5% primarily due to both an increase
in the average rates earned and the average balance of loans
outstanding. Average rates earned on loans increased
approximately .03% and average loan balances increased by
approximately $71,192 or 9.2%. Interest on taxable investments
decreased $842 or 8.8%. The decline was due to a decrease in the
average outstanding balance of approximately $35,313, partially
offset by an increase in the average yield of .12% between the
six month periods ending June 30, 1996 and 1995. The decrease in
taxable investments resulted from the funding of excess loan
demand with scheduled investment maturities. Interest earned on
nontaxable investments remained relatively stable. Increases in
the average balance of this type of investment approximated
$8,698 while the average yield declined .3%.
Interest Expense
- ----------------
Total interest expense increased $909 or 4.5% between the six
month periods ended June 30, 1996 and 1995. Interest expense on
deposits increased
15
<PAGE> 16
$612 or 3.3% during the comparative period as the average rate on
interest-bearing deposits increased to 4.0% from 3.9% and average
interest-bearing deposit balances increased by approximately $20,990.
The increase in average interest-bearing deposit balances resulted from
growth in certificates of deposit of $38,182. Customers were attracted to
the higher-yielding certificate of deposit products and the introduction of
the Good Neighbor Banking Program in the fourth quarter of 1995. Interest
expense on certificates of deposit increased $1,756 or 15.9% reflecting the
growth in average balances. Interest expense on interest bearing demand
deposits decreased $592 or 16.4% primarily due to a decrease in the average
balances of approximately $4,002 and a decrease in the average rates of .4%.
Interest on savings accounts decreased $552 or 13.4% primarily
due to a decrease in the average balances of $13,190 combined
with a .26% average rate decrease. Interest on other borrowings,
which consists primarily of repurchase agreements, increased $297
or 20.1% due to an increase in average balances outstanding of
$17,680. Rates paid on repurchase agreements closely follow the
direction of interest rates in the federal funds market.
Other Income
- ------------
Other income increased $21 or .3%. Trust fee income increased
$367 primarily due to increases in the market values and new
trust business during the first six months of 1996. The market
value of trust assets approximated $1,465,377 as of June 30,
1996, an increase of $256,240 or 21% over June 30, 1995.
Service charges and other income decreased $61 between the six
month periods ended June 30, 1996 and 1995. Net securities
transaction gains decreased $285 between the six months ended
June 30, 1996 and 1995. In 1995, the Corporation recognized
security gains of approximately $279, resulting
16
<PAGE> 17
from a decision to divest an equity position which no longer had a strategic
value.
Other Expenses
- --------------
Total other expenses decreased $297 or 1.5%. Salaries and
employee benefits decreased $124 during this period primarily due
to a reduction in average full time equivalent employees. The
reduction in employees can be attributed to internal bank
consolidations which have reduced the number of affiliate banks to 6 from
13 during the past two years. A decrease in pension expense during the
comparative period contributed further to the decrease in this category.
Premise and equipment expense increased $298 or 13% due to technological
advancements, including a local area network, designed to enhance customer
service. Other operating expenses decreased $471 or 7% primarily due to a
reduction in FDIC insurance expense of $1,248. However, the decrease was
partially offset by expenses totalling $255 in an asset
classified as real estate held for resale.
Income Taxes
- ------------
A reconciliation of the average federal statutory tax rate to
the reported effective tax rate attributable to income from
operations follows:
For the six months
ended June 30,
-------------------
1996 1995
----------- -----------
Federal statutory tax rate $4,920 35% $4,642 35%
Tax-exempt interest income from
securities of states and political
subdivisions (1,152) (8) (1,135) (9)
State income tax - net of federal
tax effect 418 3 380 3
All other - net (16) 0 (37) 0
----------- -----------
Effective tax rate $4,170 30% $3,850 29%
=========== ===========
17
<PAGE> 18
Comparison of the three months ended June 30, 1996 and 1995
- -----------------------------------------------------------
Total interest income increased $745 or 3% between the three
month periods ending June 30, 1996 and 1995. Interest and fees
on loans increased $1,285 due to an increase in the average
volume of loans outstanding, partially offset by a decrease in
the average rate. Interest on U.S. Treasury and Agencies
decreased $344. Average balances decreased, while average rates
increased slightly. Interest on investments in states and
political subdivisions increased $46 primarily due to an increase
in average balances. Other interest income, primarily interest
on fed funds sold, decreased $242 due to a decrease in the average
balance outstanding and a decrease in average rates.
Total interest expense increased $211 between the three month
periods ending June 30, 1996 and 1995. Interest paid on deposits
increased $69 due to an increase in the average interest bearing
deposit balances outstanding of approximately $21,463, partially
offset by a decrease in the average rates paid on deposits.
Interest on other borrowings increased $142 for the three months
ended June 30, 1996 and 1995, primarily due to an increase in the
average volume of repurchase agreements of approximately $11,770.
Total other income decreased by $76 primarily due to a decrease
in net security gain transactions of $265. Trust fees increased
by $191 during the comparative period.
Total other expense decreased by $73. Salaries and employee
benefits decreased $45 primarily due to a reduction in full time
equivalent employees coupled with a decrease in pension expense.
Premises and equipment expense increased $162 due to continued
technological costs. Other operating expenses decreased by $190
primarily due to a reduction in FDIC insurance expense.
18
<PAGE> 19
Part II - OTHER INFORMATION
- ---------------------------
Item 1-5 - Not Applicable
- --------------------------
Item 6(a) - Exhibits
- --------------------
(27) Financial Data Schedule required by Article 9 of Regulation S-X.
Item 6(b) - Reports on Form 8-K
- -------------------------------
(1) Filed current report on Form 8-K dated April 10, 1996,
announcing a change in the Registrant's certifying accountant.
(2) Filed current report of Form 8-K dated May 31, 1996, announcing the
signing of an Agreement and Plan of Reorganization providing for the purchase
of the assets of Universal Mortgage Company by WesBanco, Inc.
19
<PAGE> 20
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.
--------------
August 14, 1996 /s/ Edward M. George
Date:_________________ -----------------------------
Edward M. George
President and Chief Executive Officer
August 14, 1996 /s/ Paul M. Limbert
Date:_________________ --------------------------------
Paul M. Limbert
Executive Vice President and
Chief Financial Officer
20
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<PERIOD-END> JUN-30-1996
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0
0
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