<PAGE> 1
BANK OF WEIRTON
333 PENCO ROAD
WEIRTON, WEST VIRGINIA 26062
(304) 797-8000
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD AUGUST 8, 1996
TO THE SHAREHOLDERS OF BANK OF WEIRTON:
Notice is hereby given that a special meeting (the
"Special Meeting") of the shareholders of Bank of Weirton
("Weirton") will be held on Thursday, August 8, 1996, at
4:00 P.M., in the Board Room of Weirton, 333 Penco Road,
Weirton, West Virginia, for the purpose of considering and
voting on the following matters:
1. Approval of the Agreement and Plan of Merger by and
between Wesbanco, Inc., ("Wesbanco"), Weirton and Wesbanco Bank
Wheeling ("Wesbanco Wheeling"), dated as of February 8, 1996
(the "Agreement and Plan of Merger"), in the form attached to
the accompanying Proxy Statement/Prospectus as Appendix II,
providing for (i) the Merger of Weirton with and into Wesbanco
Wheeling, a wholly owned subsidiary of Wesbanco and (ii) the
exchange of each share of common stock, par value $100.00 per
share, of Weirton for 130 shares of common stock of Wesbanco,
par value $2.0833 per share, all on the terms described in the
Agreement and Plan of Merger and summarized in the Proxy
Statement/Prospectus; and
2. Such other business as may properly come before the
Special Meeting or any adjournment or postponement thereof.
Only shareholders of record at the close of business on
July 1, 1996, will be entitled to notice of and to vote at
the Special Meeting and any adjournment or postponement
thereof.
The vote of each shareholder, regardless of the number of
shares held, is important. The failure of a holder of common
stock to vote will constitute a vote against the proposed
Merger. Accordingly, if you cannot attend the Special Meeting
in person, please mark, sign and date the accompanying Proxy
and return it promptly in the enclosed envelope, which requires
no postage if mailed in the United States. It is important
that proxies be mailed promptly. If the enclosed Proxy is
executed and returned, it may be revoked at any time prior to
the voting of the Proxy by written notice to the Secretary of
Weirton, by a duly executed, later-dated Proxy or orally by the
shareholder at the Special Meeting.
Dated: July 5, 1996
By Order of the Board of Directors
/s/ James G. Thompson
-----------------------------------
Secretary
IMPORTANT
---------
Whether you expect to attend the meeting or not, please mark,
sign, date, and return the enclosed Proxy in the enclosed
selfaddressed envelope as promptly as possible.
<PAGE> 2
PROXY STATEMENT/PROSPECTUS
BANK OF WEIRTON
333 PENCO ROAD
WEIRTON, WV 26062
Special Meeting of the Shareholders to be held August 8, 1996.
This Proxy Statement, which is also a Prospectus of
Wesbanco, Inc. ("Wesbanco") (the "Proxy Statement/Prospectus")
is being furnished to holders of common stock of Bank of
Weirton, a West Virginia corporation ("Weirton"), in connection
with the solicitation of proxies by the Board of Directors of
Weirton for use at the Special Meeting of Shareholders to be
held on August 8, 1996, and any adjournments or postponements
thereof, to consider and take action upon the proposed merger
of Weirton with Wesbanco Bank Wheeling ("Wesbanco Wheeling"), a
wholly-owned subsidiary of Wesbanco (the "Merger") as described
in this Proxy Statement/Prospectus. As used in this Proxy
Statement/Prospectus, the terms "Weirton" and "Wesbanco" refer
to such corporations, respectively, and where the context
requires, such entities and their subsidiaries.
All information contained in this Proxy
Statement/Prospectus with respect to Weirton has been supplied
by Weirton, and all information with respect to Wesbanco and
Wesbanco Wheeling has been supplied by Wesbanco. This Proxy
Statement/Prospectus, the attached Notice and the enclosed
Letter to Shareholders and Proxy are first being mailed to
shareholders of Weirton on or about July 5, 1996.
Wesbanco has filed a Registration Statement pursuant to
the Securities Act of 1933, as amended, (the "1933 Act")
covering a maximum of 1,690,000 shares of Common Stock (par
value $2.0833) of Wesbanco to be issued in connection with the
Merger (the "Registration Statement").
No person is authorized to give any information or to make
any representations not contained in this Proxy
Statement/Prospectus, and, if given or made, such information
or representation should not be relied upon as having been
authorized. This Proxy Statement/Prospectus does not
constitute an offer to sell, or a solicitation of an offer to
purchase, the securities offered by this Proxy
Statement/Prospectus, or the solicitation of a Proxy, in any
jurisdiction to any person to whom it is unlawful to make such
offer or solicitation of any offer or proxy solicitation in
such jurisdiction. Neither the delivery of this Proxy
Statement/Prospectus nor any distribution of the securities to
which this Proxy Statement/Prospectus relates shall, under any
circumstances, create any implication that there has been no
change in the affairs of Weirton or Wesbanco since the date of
this Proxy Statement/Prospectus.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROXY
STATEMENT/PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
The date of this Proxy Statement/Prospectus is July 5, 1996.
<PAGE> 3
AVAILABLE INFORMATION
Wesbanco is subject to the informational requirements of
the Securities Exchange Act of 1934 and in accordance therewith
files reports, proxy statements and other information with the
Securities and Exchange Commission (the "Commission").
Information, as of particular dates, concerning directors and
officers of Wesbanco, their compensation, the principal holders
of securities and any material interest of such persons in
transactions with their respective companies is disclosed in
proxy statements distributed to shareholders and filed with the
Commission. Such reports, proxy statements and other
information can be inspected and copied at the public reference
facilities of the Commission at Judiciary Plaza, 450 Fifth
Street, N.W., Washington, D.C., 20549; and at the Commission's
Regional offices at 7 World Trade Center, New York, New York,
10048, and Northwestern Atrium Center, 500 West Madison Street,
Suite 1400, Chicago, Illinois, 60661. Copies of such material
can be obtained from the Public Reference Section of the
Commission at 450 Fifth Street, N.W., Washington, D.C., 20549
at prescribed rates.
Wesbanco's common stock is listed on the National Market
System of NASDAQ and accordingly periodic reports, proxy and
information statements concerning Wesbanco may be inspected at
the offices of the NASDAQ National Market System, 1735 K
Street, N.W., Washington, D.C. 20006
THIS PROXY STATEMENT/PROSPECTUS INCORPORATES DOCUMENTS BY
REFERENCE FILED BY WESBANCO WHICH ARE NOT PRESENTED HEREIN OR
DELIVERED HEREWITH. THESE DOCUMENTS ARE AVAILABLE UPON REQUEST
WITHOUT CHARGE TO ANY PERSON, INCLUDING ANY BENEFICIAL OWNER,
TO WHOM THIS PROXY STATEMENT/PROSPECTUS IS DELIVERED, UPON
WRITTEN OR ORAL REQUEST TO SHIRLEY A. BUCAN, SECRETARY,
WESBANCO, INC., BANK PLAZA, WHEELING, WEST VIRGINIA, 26003,
(TELEPHONE (304) 234-9228). IN ORDER TO INSURE TIMELY DELIVERY
OF THE DOCUMENTS, ANY REQUEST SHOULD BE MADE BY AUGUST 1, 1996.
<PAGE> 4
PROXY STATEMENT/PROSPECTUS
--------------------------
TABLE OF CONTENTS
PAGE
----
AVAILABLE INFORMATION . . . . . . . . . . . . . . . . . . . . . 3
SUMMARY INFORMATION . . . . . . . . . . . . . . . . . . . . . . 7
MARKET PRICES AND SELECTED FINANCIAL INFORMATION . . . . . . . 14
Market Prices. . . . . . . . . . . . . . . . . . . . . . . 14
Selected Financial Information . . . . . . . . . . . . . . 14
Wesbanco and Weirton . . . . . . . . . . . . . . . . . . . 15
SELECTED PRO FORMA FINANCIAL INFORMATION . . . . . . . . . . . 17
INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . 18
VOTING INFORMATION. . . . . . . . . . . . . . . . . . . . . . . 18
Date, Time and Place of the Special Meeting. . . . . . . . 18
Voting and Revocation of Proxies . . . . . . . . . . . . . 18
Solicitation of Proxies . . . . . . . . . . . . . . . . . 19
Accountants . . . . . . . . . . . . . . . . . . . . . . . 20
Date for Submission of Shareholder Proposals . . . . . . . 20
THE MERGER . . . . . . . . . . . . . . . . . . . . . . . . . . 20
General . . . . . . . . . . . . . . . . . . . . . . . . . 20
Background of the Merger . . . . . . . . . . . . . . . . . 21
Recommendation of the Boards of Directors . . . . . . . . 21
Weirton Reasons for the Merger . . . . . . . . . . . . . . 22
Wesbanco Reasons for the Merger . . . . . . . . . . . . . 23
Interest of Certain Persons in the Merger . . . . . . . . 23
Opinion of LSC Financial Services, Inc. . . . . . . . . . 24
Effective Time. . . . . . . . . . . . . . . . . . . . . . 29
Conversion of Weirton Common Stock . . . . . . . . . . . . 30
Exchange of Certificates. . . . . . . . . . . . . . . . . 30
Wesbanco and Wesbanco Wheeling Shareholder Approval. . . . 31
Effects of the Merger: The Surviving Corporation . . . . 31
Conditions and Covenants . . . . . . . . . . . . . . . . . 32
Approval by Weirton Shareholders . . . . . . . . . . . . . 32
Government Approvals . . . . . . . . . . . . . . . . . . . 33
Covenants. . . . . . . . . . . . . . . . . . . . . . . . . 34
Other Conditions . . . . . . . . . . . . . . . . . . . . . 34
Waiver and Amendment . . . . . . . . . . . . . . . . . . . 35
Termination. . . . . . . . . . . . . . . . . . . . . . . . 36
The Stockholder Agreement . . . . . . . . . . . . . . . . 36
Rights of Dissenting Shareholders . . . . . . . . . . . . 36
Resales of Wesbanco Common Stock. . . . . . . . . . . . . 38
Expenses . . . . . . . . . . . . . . . . . . . . . . . . 39
<PAGE> 5
PROXY STATEMENT/PROSPECTUS
--------------------------
TABLE OF CONTENTS
(Continued)
PAGE
----
Accounting Treatment . . . . . . . . . . . . . . . . . . . 39
Certain Federal Income Tax Consequences of the Merger . . 39
COMPARATIVE STOCK PRICES AND DIVIDENDS . . . . . . . . . . . . 41
Wesbanco Stock Prices and Dividends . . . . . . . . . . . 41
Stock Price Range . . . . . . . . . . . . . . . . . . . . 42
Dividends Paid. . . . . . . . . . . . . . . . . . . . . . 42
Wesbanco Common Stock Dividend Policy . . . . . . . . . . 43
Weirton Stock Price Range and Dividends . . . . . . . . . 43
Weirton Dividend Policy. . . . . . . . . . . . . . . . . . 44
COMPARATIVE RIGHTS OF SHAREHOLDERS . . . . . . . . . . . . . . 45
Description of Wesbanco Capital Stock . . . . . . . . . . 45
Description of Weirton Capital Stock. . . . . . . . . . . 46
Comparison of Rights of Wesbanco and Weirton Shareholders. 46
PRO FORMA DATA . . . . . . . . . . . . . . . . . . . . . . . . 49
Notes to Pro Forma Financial Information . . . . . . . . . 49
COMPARATIVE PER SHARE DATA . . . . . . . . . . . . . . . . . . 55
INFORMATION WITH RESPECT TO WESBANCO . . . . . . . . . . . . . 56
History. . . . . . . . . . . . . . . . . . . . . . . . . . 56
Future Acquisitions . . . . . . . . . . . . . . . . . . . 57
Operations . . . . . . . . . . . . . . . . . . . . . . . . 58
Competition . . . . . . . . . . . . . . . . . . . . . . . 59
Principal Shareholders . . . . . . . . . . . . . . . . . . 61
Wesbanco KSOP. . . . . . . . . . . . . . . . . . . . . . . 62
Changes in West Virginia Taxes. . . . . . . . . . . . . . 64
Directors and Executive Officers . . . . . . . . . . . . . 64
Executive Compensation. . . . . . . . . . . . . . . . . . 65
Certain Relationships and Related Transactions . . . . . 65
INFORMATION WITH RESPECT TO WEIRTON. . . . . . . . . . . . . . 66
History . . . . . . . . . . . . . . . . . . . . . . . . . 66
Banking Services . . . . . . . . . . . . . . . . . . . . . 66
Competition . . . . . . . . . . . . . . . . . . . . . . . 66
Economic Conditions . . . . . . . . . . . . . . . . . . . 67
Properties of Weirton . . . . . . . . . . . . . . . . . . 67
Monetary Policies . . . . . . . . . . . . . . . . . . . . 68
Legal Proceedings . . . . . . . . . . . . . . . . . . . . 68
Principal Shareholders. . . . . . . . . . . . . . . . . . 68
Directors . . . . . . . . . . . . . . . . . . . . . . . . 69
Executive Officers . . . . . . . . . . . . . . . . . . . 70
<PAGE> 6
PROXY STATEMENT/PROSPECTUS
--------------------------
TABLE OF CONTENTS
(Continued)
PAGE
----
Compensation of Executive Officers . . . . . . . . . . . . 70
Pension Plan Benefits. . . . . . . . . . . . . . . . . . . 71
Description of Bonus Plan . . . . . . . . . . . . . . . . 72
Meetings of the Board of Directors and Compensation of
Members . . . . . . . . . . . . . . . . . . . . . . . . 72
Ownership of Securities by Directors and Officers . . . . 72
Certain Relationships and Related Transactions . . . . . 73
GOVERNMENT REGULATION . . . . . . . . . . . . . . . . . . . . 73
Holding Company Structure . . . . . . . . . . . . . . . . 73
Dividend Restrictions. . . . . . . . . . . . . . . . . . . 75
FDIC Insurance. . . . . . . . . . . . . . . . . . . . . . 75
Capital Requirements . . . . . . . . . . . . . . . . . . . 76
Federal Deposit Insurance Corporation Improvement
Act of 1991. . . . . . . . . . . . . . . . . . . . . . . 78
Environmental Issues . . . . . . . . . . . . . . . . . . . 80
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE . . . . 82
RELATIONSHIP WITH INDEPENDENT ACCOUNTANTS . . . . . . . . . . . 83
LEGAL MATTERS. . . . . . . . . . . . . . . . . . . . . . . . . 83
EXPERTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83
LEGAL PROCEEDINGS. . . . . . . . . . . . . . . . . . . . . . . 83
INDEX TO FINANCIAL STATEMENTS . . . . . . . . . . . . . . . . . 84
APPENDICES . . . . . . . . . . . . . . . . . . . . . . . . . . 136
I. Statutory Excerpts Concerning Dissenters' Rights
of Appraisal
II. Agreement and Plan of Merger
III. Stockholders Agreement
<PAGE> 7
SUMMARY INFORMATION
The following is a brief summary of certain information
with respect to matters to be considered at the Special Meeting
of Shareholders of Weirton. This summary is necessarily
incomplete and is qualified in its entirety by the more
detailed information and financial statements contained in this
Proxy Statement/Prospectus and in the Agreement and Plan of
Merger and the Stockholders Agreement attached as Appendices II
and III, respectively, to this Proxy Statement/Prospectus.
Date, Time, and Place of the
Special Meeting. . . . . . . . . The meeting of the shareholders
of Weirton will be
held on Thursday, August
8, 1996, at 4:00 P.M. Eastern
Standard Time in the 2nd Floor
Board Room of Weirton at 333
Penco Road, Weirton,
West Virginia, 26062. See
"Voting Information".
Purpose of the Special Meeting. . . . . Weirton's meeting will be to
consider and vote
upon the Agreement and Plan of
Merger dated as of February 8,
1996, (the "Agreement"),
providing for (i) the merger (the
"Merger") of Weirton with and
into Wesbanco Bank Wheeling
("Wesbanco Wheeling"), a wholly
owned subsidiary of Wesbanco, and
a West Virginia banking
corporation, and (ii) the
exchange of each outstanding
share of common stock, par value
$100.00 per share ("Weirton
Common Stock") for 130 shares of
Wesbanco common stock, par value
$2.0833 per share ("Wesbanco
Common Stock"). See "Voting
Information" and "The Merger".
Parties to the Merger. . . . . . . . . . Wesbanco is a multi-bank holding
company incorporated under the laws
of the State of West Virginia which
conducts a general commercial
banking and trust business
through its bank subsidiaries.
It owns six subsidiary banks
located in West Virginia and
Eastern Ohio with its principal
subsidiary being Wesbanco
Wheeling. Its principal
executive offices are located at
Bank Plaza, Wheeling, West
Virginia, 26003, telephone
(304) 234-9000. See "Information
with Respect to Wesbanco".
Parties to the Merger (Continued).. . Wesbanco Wheeling is a West Virginia
banking corporation and is a wholly
owned subsidiary of Wesbanco which
operates banking facilities in
Wheeling, Follansbee, Wellsburg,
New Martinsville and Sistersville.
<PAGE> 8
Weirton is a state banking
corporation incorporated
under the law of the State of
West Virginia which conducts a
general commercial banking
business. It operates two
banking facilities in the City of
Weirton. Its principal executive
offices are located at 333 Penco
Road, Weirton, West Virginia,
26062, telephone (304) 797-8000.
See "Information with Respect to
Weirton".
Anti-Takeover Provisions. . . . . . . The Agreement provides for the
exchange of each
share of Weirton Common Stock for
130 shares of Wesbanco Common
Stock. The Articles of
Incorporation of Wesbanco contain
certain anti-takeover provisions,
including, among others, a super
majority voting provision and a
staggered Board of Directors
provision as more fully explained
herein. Additionally, the
Articles of Incorporation of
Wesbanco provide that the Board
of Directors of Wesbanco may
issue, without shareholder
approval, up to 1,000,000 shares
of preferred stock in one or more
series, with such preferences,
voting rights, conversion rights
and other special rights as the
Board may determine. The rights
of holders of Wesbanco Common
Stock are subject to the rights
and preferences of any preferred
stock issued by the Wesbanco
Board of Directors to the extent
set forth in a resolution fixing
such terms and conditions. Under
certain circumstances, additional
shares of Wesbanco Common Stock
or shares of Wesbanco preferred
stock which are authorized but
not issued could be used to
create voting impediments or to
frustrate persons seeking to gain
control of Wesbanco through
acquisition of a substantial
number of shares of Wesbanco
Common Stock. See "Comparative
Rights of Shareholders -
Comparison Rights of Wesbanco and
Weirton Shareholders". These anti-
takeover provisions provide the
Anti-Takeover Provisions (Continued) . continuity and stability of
management that is
considered essential to providing
shareholders with long-term value
on their investments, allow the
Board greater flexibility, and
permit the issuance of additional
common and preferred shares
without the expense and delay of
a shareholders' meeting. These
provisions also constitute
defensive measures
which are designed, in part to
discourage and insulate
Wesbanco
<PAGE> 9
against certain hostile
takeover efforts, which the
Wesbanco Board might determine
are not in Wesbanco's best
interests and the best interests
of its shareholders. The
staggered board provision makes
it more difficult to change the
full Board of Directors of
Wesbanco at any one time and
makes it more difficult to amend
the specific provisions of the
Articles of Incorporation which
deal with the classification of
directors. The
staggered board provision reduces
the number of directors to be
elected at each annual meeting,
so that minority shareholders may
be in a less favorable position
to elect directors through
cumulative voting. Such
provisions may also be beneficial
to management in a hostile
takeover attempt and adversely
affect shareholders who might
wish to participate in such a
takeover. See "Comparative
Rights of Shareholders".
Vote Required for Merger. . . . . . . Approval of the
Merger requires the affirmative
vote of the holders of a majority
of the outstanding shares of
Weirton Common Stock entitled to
vote as of July 1, 1996, the
record date for the Special
Meeting. As of the record date,
the directors and officers of
Weirton beneficially owned 1,907
shares of Weirton Common Stock
representing 14.66% of the
outstanding shares. See
"Information with Respect to
Weirton - Principal Shareholders"
and "Voting Information - Voting
and Revocation of Proxies".
Approval of the Merger also
requires the affirmative vote of
the sole shareholder of Wesbanco
Wheeling.
Vote Required for Merger:
(Continued). . . . . . . . . . . . . . The authorization for the issuance
of additional Wesbanco Common Stock
requires the affirmative vote of the
Board of Directors of Wesbanco. See
"The Merger - Wesbanco and
Wesbanco Wheeling Shareholder
Approval".
Terms of the Merger . . . . . . . . Upon the effective date of the
Merger, each out-
standing share of Weirton Common
Stock will be converted into one
hundred thirty (130) shares of
Wesbanco Common Stock. Cash will
be paid in lieu of issuing
fractional shares of Wesbanco
Common Stock in connection with
the Merger based on a whole share
value of $27.00 per share, or
at the election of each
shareholder, such shareholder
may elect to
<PAGE> 10
purchase the remaining
fraction of such share, at
the aforesaid value. For additional
information concerning the
treatment of Weirton shares in the
Merger, and the effect of
the Merger upon Weirton shareholders,
see "The Merger". It is
contemplated that Weirton will be
merged with a wholly owned
subsidiary of Wesbanco, Wesbanco
Wheeling, with Wesbanco Wheeling
being the surviving corporation
under the Articles of
Incorporation of Wesbanco
Wheeling. Wesbanco Wheeling will
maintain its separate identity
and continue its operations as an
affiliate of Wesbanco. If the
Merger had been concluded on
March 31, 1996, Weirton would
have constituted 11.2% of
deposits, 10.6% of assets, 17.9%
of equity, and the former
shareholders of Weirton would
hold 16.3% of the total
outstanding shares of Wesbanco on
a consolidated pro forma basis.
In addition, Weirton would have
contributed 8.3% of net interest
and 8.7% of net income of
Wesbanco on a consolidated pro
forma basis as of March 31, 1996.
See "The Merger - Effects of the
Merger: The Surviving
Corporation" and "Selected Pro
Forma Financial Information".
Dissenters' Rights. .. . . . . . . . . . Any holder of Weirton Common Stock
who files written objection to the
proposed Merger prior to or at the
Special Meeting, does not vote in
favor of the proposed Merger, makes
written demand on Weirton within
ten days following the Special
Dissenters' Rights (Continued) . . . . . Meeting, and surrenders his
certificates within
twenty days after making the
demand for notation thereon that
such demand has been made, will
be entitled to receive in cash
the fair value of his shares
determined as of the day prior to
the date of the Special Meeting,
without regard to any
appreciation or depreciation in
anticipation of the Merger, upon
compliance with all statutory
requirements. Holders of
Wesbanco Common Stock will not be
entitled to
dissenters' rights in the
transaction. See "The
Merger - Rights of Dissenting
Shareholders", and "Appendix I".
It is a condition to the
obligations of Wesbanco and Weirton
to consummate the Merger
that the holders of not more than
10% of Weirton Common Stock
exercise their dissenters' rights.
See "The Merger -
Conditions and Covenants".
<PAGE> 11
Federal Income Tax Consequences. . . . Consummation of the
Merger is conditioned upon
receipt of a ruling from the
Internal Revenue Service, or an
opinion of counsel, that, among
other things, the Merger will be
treated as a tax free
reorganization for Federal Income
Tax purposes upon consummation of
the Merger except for dissenting
shareholders and shareholders who
receive cash for fractional
shares. See "The Merger - Certain
Federal Income Tax Consequences
of the Merger".
Regulatory Approvals. . . . . . . . . . Notwithstanding approval by the
shareholders of
Weirton and Wesbanco Wheeling,
the consummation of the Merger is
subject to certain conditions,
including approval of the Board
of Governors of the Federal
Reserve System, and the Board of
Banking and Financial
Institutions of the State of West
Virginia. The approval of the
Federal Reserve was received on
May 21, 1996, and the approval of
the Board of Banking and Financial
Institutions was received on June 10,
1996. See "The Merger - Conditions
and Covenants" and "Termination".
Effective Date of Merger. . . . . . . . The Effective Date of the Merger is
anticipated to
occur shortly after the Special
Meeting upon receipt of all
regulatory approvals and
satisfaction of all conditions in
the Agreement and such approvals.
See "The Merger - Effective
Time".
Shareholders Entitled to Vote. . .. . . On July 1, 1996, there were 13,000
shares of Weirton Common Stock
outstanding.
Only holders of record of Weirton
Common Stock at the close of
business on July 1, 1996, are
entitled to vote at the Special
Meeting. See "Voting
Information".
Exchange of Certificates. . . . . . . . As promptly as
practicable after the Effective Date,
instructions on how to effect the
exchange of certificates of
Weirton Common Stock for
certificates of Wesbanco Common
Stock will be sent to each
Weirton shareholder of record as
of the Effective Date. See "The
Merger - Exchange of Certificates".
Weirton shareholders should not send
in stock certificates until they
receive instructions to do so.
<PAGE> 12
Wesbanco Common Stock . . .. . . . . . Holders of Wesbanco Common Stock are
entitled to one vote per share on all
matters voted upon by
shareholders, are entitled to
cumulative voting rights in the
election of directors and do not
have preemptive rights for the
purchase of additional shares of
any class of Wesbanco Common
Stock or preferred stock. Holders
of Wesbanco Common Stock are
entitled to receive such
dividends as may be declared by
Wesbanco's Board of Directors out
of funds legally available
therefor. In the event of the
liquidation or winding up of the
affairs of Wesbanco, holders of
Wesbanco Common Stock would be
entitled to share ratably in all
assets remaining after payment to
creditors. See "Comparative
Rights of Shareholders".
Conditions to Consummation
Termination. . . . . . . . . . . . . Consummation of the Merger is subject
to various conditions, including,
among others, approvals by the above
noted regulatory authorities, the
holders of Weirton Common Stock,
and receipt of the tax opinion or
ruling mentioned above. Wesbanco and
Conditions to Consummation
Termination (Continued). . . . . . . . Weirton have also reserved the right
to terminate the Merger if the
holders of more than 10% of
Weirton Common Stock
exercise dissenters' rights with
respect to their stock. Wesbanco
has reserved the right to
terminate the Merger in the event
the transaction cannot be
accounted for as a "pooling-of-
interests" for accounting
purposes, in addition to other
conditions. See "The Merger -
Conditions and Covenants and
Termination".
Interest of Certain Persons in the
Merger. . . . . . . . . . . . . . . The Agreement provides that George M.
Molnar and R. Peterson Chalfant will
become directors of Wesbanco on
the Effective Date, and further
that Mr. Molnar will become a
member of the Executive Committee
of the Board of Directors of
Wesbanco. Also, the Agreement
provides that George M. Molnar
and Donald R. Donell will become
directors of
<PAGE> 13
Wesbanco Wheeling on
the Effective
Date, and further, that Mr.
Molnar will become a member of
the Executive Committee of the
Board of Directors
of Wesbanco Wheeling. In
addition, it is a condition to
consummation of the Merger that
George M. Molnar, President of
Weirton, enter into an Employment
Agreement with Weirton. See "The
Merger Interests of Certain
Persons in the Merger".
Stockholder Agreement. . . . . . . . Certain Stockholders of Weirton
entered into a Stockholder Agreement
as of February 8, 1996, whereby each
such stockholder agreed, among
other things, not to sell,
pledge, transfer or otherwise
dispose of his shares of Weirton
Common Stock prior to the Special
Meeting of Shareholders and to
vote such shares in favor of the
Merger. The shareholders signing
the Agreement constitute the
members of the Board of Directors
and own individually and
beneficially 14.66% of the
outstanding Weirton Common Stock.
Financial Information. . . . . . . . . Financial Statements for the interim
period ended March 31, 1996, for
Weirton and Wesbanco are included
herein. See "Index to Financial
Statements".
For the three months ended March 31,
1996, Wesbanco's net income
was $4,905,000 or $.58 per share.
Total assets were approximately
$1,380,000,000 total deposits
were approximately $1,118,000,000
and total shareholders' equity
was approximately $170,466,000.
For the three months ended
March 31, 1996,
Weirton's net income was $468,000
or $36 per share. Total assets
were approximately $180,000,000
total deposits were approximately
$141,000,000 and total
stockholders' equity was
approximately $37,000,000.
<PAGE> 14
MARKET PRICES AND SELECTED FINANCIAL INFORMATION
Market Prices
Wesbanco Common Stock is quoted in the over-the-counter
market and is reported through the Nasdaq Stock Market on the
National Market System. There is no established public trading
market for Weirton Common Stock. The information set forth
below for Weirton was obtained from various sources without
adjustments for retail markups, markdowns, or commissions, as
reported by management of Weirton, although no attempt has been
made to verify or determine the accuracy of the information
furnished to Weirton. These stock price ranges may not
necessarily represent actual transactions. See "Comparative
Stock Prices and Dividends".
Market Price Per Share: Wesbanco Weirton
---------------- --------------
Bid Asked Bid Asked
------- ------ ------ -----
As of June 17, 1996(1) $26.50 $27.00 $3,477.50 None
As of February 7, 1996 (2) $26-3/4 $27-1/4 $2,400 None
Pro Forma Equivalent (3) $3,510 None
(1) Based solely on the conversion ratio multiplied by the average
of the bid and asked prices for Wesbanco Common Stock on such date.
(2) February 7, 1996, is the date immediately preceding
public announcement of the proposed Merger.
(3) The pro forma equivalent was computed by multiplying the
exchange ratio by the average of the bid and ask price of
Wesbanco as of February 7, 1996. The exchange ratio is 130 shares
of Wesbanco Common Stock for 1 share of Weirton Common Stock.
Selected Financial Information
The following pages present selected financial information
for the years ended December 31, 1991 through 1995, and for the
three months ended March 31, 1995 and 1996, for Wesbanco and
for Weirton.
The information should be read in conjunction with the
more detailed information in the financial statements contained
or incorporated herein by reference, including the Notes
thereto. See "Index to Financial Statements" and "Incorporation
of Certain Documents by Reference".
<PAGE> 15
WESBANCO, INC.
Selected Financial Information
(In thousands, except for share and per share data)
<TABLE>
<CAPTION>
For the three months ended For the years ended
March 31, December 31,
------------------------- -------------------------------------------------
1996 1995 1995 1994 1993 1992 1991
---------- --------- ------- ------- ------- -------- -------
(Unaudited)
<S> <C> <C> <C> <C> <C> <C> <C>
Interest income $24,948 $23,612 $97,899 $92,024 $95,657 $101,770 $108,985
Interest expense 10,581 9,883 41,870 35,628 39,383 48,082 59,322
------------------------- ------------------------------------------------
Net Interest income 14,367 13,729 56,029 56,396 56,274 53,688 49,663
------------------------- ------------------------------------------------
Provision for loan losses 864 377 2,770 6,055 3,229 3,279 2,963
------------------------- ------------------------------------------------
Net interest income after
provision
for possible loan losses 13,503 13,352 53,259 50,341 53,045 50,409 46,700
Total other income 2,957 2,860 11,098 10,750 10,095 9,861 9,167
Total other expense 9,367 9,591 38,988 39,614 38,711 37,276 36,225
Income before income taxes -------------------------- -------------------------------------------------
and effect of change in
accounting for post-
retirement benefits 7,093 6,621 25,369 21,477 24,429 22,994 19,642
Provision for income taxes 2,188 1,963 7,180 5,780 6,587 6,523 5,239
Income before effect of -------------------------- -------------------------------------------------
change in accounting for
postretirement benefits 4,905 4,658 18,189 15,697 17,842 16,471 14,403
Effect of change in
accounting for
postretirement benefits (592)
-------------------------- -------------------------------------------------
Net Income $4,905 $4,658 $18,189 $15,697 $17,842 $15,879 $14,403
========================== =================================================
Earnings per share of common
stock: (1)
Net Income $0.58 $0.54 $2.13 $1.81 $2.04 $1.81 $1.64
Average shares outstanding 8,480,550 8,509,521 8,470,328 8,590,878 8,689,499 8,707,197 8,704,537
Preferred stock dividends
and discount accretion 0 $46 $164 $183 $184 $184 $184
Total Assets $1,380,065 1,331,505 1,371,793 1,350,968 1,346,822 1,316,279 1,269,304
Total Deposits 1,118,108 1,100,614 1,115,473 1,109,219 1,113,604 1,095,822 1,057,243
Total Equity 170,466 161,391 170,040 156,630 157,516 147,452 137,848
Cash dividends declared per share 0.26 0.23 0.96 0.86 0.785 0.70 0.675
Book value per share 20.12 18.97 20.01 18.41 18.16 16.96 16.22
</TABLE>
(1) Per share information has been retroactively adjusted for the April 1993
two for one stock split.
<PAGE> 16
<TABLE>
<CAPTION>
BANK OF WEIRTON
Selected Financial Information
(In thousands, except for share and per share data)
For the three months ended For the years ended
March 31, December 31,
----------------- -----------------------------------------------
1996 1995 1995 1994 1993 1992 1991
---- ---- ---- ---- ---- ---- -----
(Unaudited) -----------(Unaudited)---------------
<S> <C> <C> <C> <C> <C> <C> <C>
Interest income $2,528 $2,490 $10,183 $9,696 $9,611 $11,081 $12,501
Interest expense 1,229 1,097 4,700 4,032 4,343 5,579 7,380
-------------------- ------------------------------------------------
Net Interest income 1,299 1,393 5,483 5,664 5,268 5,502 5,121
-------------------- ------------------------------------------------
Provision for loan losses 5 4 18 18 18 18 13
-------------------- ------------------------------------------------
Net interest income
after provision
for possible loan losses 1,294 1,389 5,465 5,646 5,250 5,484 5,108
Total other income 105 98 269 278 272 411 289
Total other expense 753 830 3,143 3,226 3,162 3,334 3,420
-------------------- ------------------------------------------------
Income before income taxes 646 657 2,591 2,698 2,360 2,561 1,977
Provision for income taxes 178 129 476 503 484 521 370
-------------------- ------------------------------------------------
Net Income $468 $528 $2,115 $2,195 $1,876 $2,040 $1,607
==================== ================================================
Earnings per share of
common stock:
Net Income $36.00 $40.68 $162.71 $168.87 $144.29 $156.93 $123.62
Average shares 13,000 13,000 13,000 13,000 13,000 13,000 13,000
outstanding
Total Assets $180,356 $179,583 $177,226 $181,864 $187,279 $184,408 $179,293
Total Deposits 141,422 142,078 139,370 145,368 152,073 150,156 146,106
Total Equity 37,224 36,020 36,957 35,674 34,406 33,310 32,011
Cash dividends declared 15.50 14.00 64.00 62.00 60.00 57.00 53.00
per share
Book value per share 2,863.38 2,770.77 2,842.84 2,744.15 2,646.62 2,562.31 2,462.38
</TABLE>
<PAGE> 17
<TABLE>
<CAPTION>
SELECTED PRO FORMA FINANCIAL INFORMATION
The following information provides certain selected unaudited pro forma
information for the periods indicated. This information, which reflects the
application of the pooling-of-interests method of accounting, is based upon the
pro forma financial data which appears elsewhere in this document (see "Pro
Forma Data") and should be read in conjunction with those statements. Pro
forma per share data has been calculated using the number of outstanding shares
of Wesbanco Common Stock after giving effect to the proposed acquisition of all
the outstanding shares of the Bank of Weirton Common Stock.
PRO FORMA COMBINED (In thousands, except for share and per share amounts)
- ------------------
March 31, December 31,
------------------- -------------------------------------------------------
1996 1995 1995 1994 1993 1992 1991
------ ------- ------- --------- --------- --------- ---------
Balance Sheet
(unaudited)
(Balance as of:)
<S> <C> <C> <C> <C> <C> <C> <C>
Total Assets $1,560,421 $1,511,088 $1,549,019 $1,532,832 $1,534,101 $1,500,687 $1,448,597
Loans-Net 886,587 809,242 880,480 798,414 759,318 726,114 706,243
Deposits 1,259,530 1,242,692 1,254,843 1,254,587 1,265,677 1,245,978 1,203,349
Preferred Stock - 1,868 - 1,860 1,841 1,809 1,777
Stockholders' Equity 207,690 197,411 206,997 192,304 191,922 180,762 169,859
Book Value Per Share 20.44 19.35 20.32 18.85 18.52 17.40 16.67
For the three months ended For the Year Ended
March 31, December 31,
1996 1995 1995 1994 1993 1992 1991
----------------------- ----------------------------------------------------------
Income Statement
(unaudited)
Net Interest Income $ 15,666 $ 15,122 $ 61,512 $ 62,060 $ 61,542 $ 59,190 $ 54,784
Provision for Loan Losses 869 381 2,788 6,073 3,247 3,297 2,976
Net Income 5,373 5,186 20,304 17,892 19,718 17,919 16,010
Preferred stock dividends
and discount accretion 0 46 164 183 184 184 184
Net Income Per Share $ 0.53 $ 0.50 $ 1.98 $ 1.72 $ 1.88 $ 1.71 $ 1.52
Dividends Per Share 0.26 0.23 0.96 0.86 0.785 0.70 0.675
Average Shares
Outstanding 10,170,550 10,199,521 10,160,328 10,280,878 10,379,499 10,397,197 10,394,537
Equivalent Per Share Data:
Bank of Weirton
Net Income Per Share $ 68.90 $ 65.00 $ 257.40 $ 223.60 $ 244.40 $ 222.30 $ 197.60
Dividends Per
Common Share 33.80 29.90 124.80 111.80 102.05 91.00 87.75
</TABLE>
<PAGE> 18
INTRODUCTION
This Proxy Statement/Prospectus and the accompanying proxy
are being mailed to the shareholders of Weirton on or about
July 5, 1996, in connection with the solicitation of proxies
by the Board of Directors of Weirton of the holders of Weirton
Common Stock to be voted at the Special Meeting of Weirton
shareholders (the "Special Meeting") called, with respect to
Weirton, to consider and vote upon the Agreement and Plan of
Merger dated February 8, 1996, (the "Agreement") providing for
(i) the Merger of Weirton with and into Wesbanco Wheeling, a
wholly owned subsidiary of Wesbanco, and (ii) the exchange of
each outstanding share of Weirton Common Stock for 130 shares
of Wesbanco Common Stock. The Boards of Directors of Weirton
and Wesbanco unanimously have approved the Agreement, and the
Board of Directors of Weirton recommends unanimously that its
shareholders vote FOR approval thereof. For information
concerning the background of, reasons for and terms and
conditions of the Merger and the interests of certain persons,
including members of the Board of Directors of Weirton in the
Merger, see "THE MERGER", including "Background of the Merger",
"Recommendation of the Boards of Directors", "Wesbanco Reasons
for the Merger", "Weirton Reasons for the Merger", and
"Interests of Certain Persons in the Merger."
A copy of the Agreement is attached to this Proxy
Statement/Prospectus as Appendix II and is incorporated by
reference herein in its entirety. See also the following
subheadings under "THE MERGER": "Conditions and Covenants,"
"Waiver and Amendment" and "Termination". All information
concerning Weirton contained herein has been supplied by
Weirton, and all information concerning Wesbanco contained
herein has been supplied by Wesbanco.
VOTING INFORMATION
Date, Time and Place of the Special Meeting
The Special Meeting of Weirton will be held on Thursday,
August 8, 1996, at 4:00 P.M., Eastern Standard Time, in the
2nd Floor Board Room of Weirton, at 333 Penco Road in Weirton,
West Virginia.
Voting and Revocation of Proxies
Only holders of record of Weirton Common Stock on July 1,
1996, the record date, will be entitled to notice of and
to vote at the Special Meeting of Weirton and any adjournments
or postponements thereof. On the Record Date, there were
outstanding and entitled to vote 13,000 shares of Weirton
Common Stock with each share entitled to one vote. As of June
17, 1996, Weirton Common Stock was held by approximately 219
shareholders of record. As of June 17, 1996, Wesbanco Common
Stock was held by approximately 3,839 shareholders of record.
The presence, in person or by proxy, of the holders of a
majority of the 13,000 shares of Weirton Common Stock entitled
to vote is necessary to constitute a quorum at the Special
Meeting. The affirmative vote of the holders of at least a
majority of the outstanding 13,000
<PAGE> 19
shares of Weirton Common Stock entitled to vote at the Special
Meeting, or 6,501 shares is required for approval of the Agreement
and the Merger. With respect to the Weirton Common Stock, abstentions
and broker non-votes will have the effect of a vote against approval of
the Agreement and the Merger.
As of the Record Date, the directors and officers of
Weirton beneficially owned approximately, in the aggregate,
1,907 shares of Weirton Common Stock, constituting in the
aggregate approximately 14.66% of the outstanding Weirton
Common Stock as of such date.
As of July 1, 1996, Wesbanco held no shares of Weirton
Common Stock. Directors, executive officers and affiliates of
Wesbanco owned no shares of Weirton Common Stock as of such
date.
All shares of Weirton Common Stock represented at the
Special Meeting by properly executed proxies received prior to
or at the Special Meeting, and not revoked, will be voted at
the Special Meeting in accordance with the instructions on the
proxies. If no instructions are indicated, properly executed
proxies will be voted to approve the Agreement and authorize
the issuance of Wesbanco Common Stock.
The Boards of Directors of Weirton and Wesbanco do not
know of any matters, other than as described in the Notice of
Special Meeting, which are to come before the Special Meeting.
If any other matters are properly presented at the Special
Meeting for action, the persons named in the enclosed form of
proxy and acting thereunder, both of whom are shareholders of
Weirton, will have the authority to vote on such matters in
their discretion.
A shareholder giving a proxy has the right to revoke it at
any time before it is voted by filing with the Secretary of
Weirton a written notice of revocation or a duly executed later
dated proxy, or orally at the Special Meeting.
Solicitation of Proxies
Proxies are being solicited by the Board of Directors of
Weirton for use at the Special Meeting. Weirton will bear the
cost of the solicitation of proxies from the holders of its
shareholders in connection with its Special Meeting, except
that Wesbanco will bear substantially all the costs relating to
the printing and mailing of the Proxy Statement/Prospectus. In
addition to solicitation by use of the mails, proxies may be
solicited by directors, officers and employees of Weirton in
person or by telephone or telegram. Such directors, officers
and employees will not be additionally compensated but may be
reimbursed for out-of-pocket expenses they incur in connection
with the solicitation. Arrangements will also be made with
custodians, nominees and fiduciaries for the forwarding of
solicitation materials to the beneficial owners of Weirton
Common Stock held of record by such persons, and Weirton may
reimburse such custodians, nominees and fiduciaries for
reasonable out-ofpocket expenses they incur in connection
therewith.
<PAGE> 20
Accountants
Grant Thornton LLP, independent certified public accountants,
have provided auditing services to Weirton since 1970. Grant
Thornton LLP had not been engaged to conduct a full scope audit of
the year end financial statements of Weirton. They had
performed only a balance sheet audit on a once a year basis.
Pursuant to the pending Merger, Grant Thornton LLP was engaged to
audit the financial statements for the year ended December 31,
1995. Representatives of Grant Thornton LLP are expected to be
present at the Weirton Special Meeting. See "Relationship With
Independent Accountants" and "Experts".
Ernst & Young LLP serves as Wesbanco's independent
accountant for the year 1996. It is expected that
representatives of Ernst & Young will be present at the Special
Meeting. Such representatives will have the opportunity to
make a statement if they desire to do so and will be available
to respond to questions.
Date for Submission of Shareholder Proposals
In the event that the Merger has not been consummated by
the date of the next Weirton annual meeting, shareholder
proposals may be submitted to the attention of James G.
Thompson, Secretary, Bank of Weirton, 333 Penco Road, Weirton,
West Virginia, 26062. Such proposals are to be received by
Weirton no later than the 1st day of December, 1996.
THE MERGER
The following description of the terms of the Merger is
qualified in its entirety by reference to the provisions of the
Agreement and the Stockholder Agreement, which are attached
hereto as Appendices II and III, respectively, and are
incorporated herein by reference in their entirety.
Shareholders of Weirton are strongly encouraged to read the
Agreement and the Stockholder Agreement for a more complete
description of the terms of the Merger.
General
Pursuant to the Agreement, Weirton will merge with and
into Wesbanco Wheeling, a wholly owned subsidiary of Wesbanco
which will be the surviving corporation. Under the Agreement,
each outstanding share of Weirton Common Stock will be
converted into one hundred thirty (130) shares of Wesbanco
Common Stock, with cash, or the opportunity to buy an
additional fraction, sufficient to result in a whole share for
any resulting fraction, except for shares held by Dissenting
Weirton Shareholders. See "Rights of Dissenting Shareholders"
below. The conversion is more fully described below. See
"Conversion of Weirton Common Stock".
<PAGE> 21
Background of the Merger
Effective in June of 1982, the West Virginia banking laws
were amended to permit West Virginia bank holding companies to
own more than one West Virginia bank for the first time.
Subsequent legislation, effective May 30, 1986, permitted
nationwide reciprocal acquisition of banks and bank holding
companies by West Virginia bank holding companies after
December 31, 1987.
Wesbanco has maintained a relationship with Weirton for a
substantial number of years and representatives of the two
institutions have held informal discussions concerning a
possible merger over the last several years. These informal
discussions did not result in a definitive agreement among the
parties. However, in the summer of 1995 substantive discussions
were initiated which resulted in the execution of a definitive
Agreement and Plan of Merger on February 8, 1996.
The negotiations were principally held between Edward M.
George, President of Wesbanco, and George M. Molnar, President
of Weirton. A number of private meetings were held between
these parties beginning on June 11, 1993, including meetings on
March 17, 1994, June 2, 1994, August 4, 1994, October 4, 1994 and
August 18, 1995. Final substantive discussions occurred during
December, 1995 and January, 1996, at which the final proposals
were resolved. Though the transaction was continuously
structured as an exchange of stock, the proposed exchange ratio
changed several times during the negotiations due in part to
changes in the market price of Wesbanco Common Stock and the
respective earnings and equity levels of the two corporations.
The final Agreement and the Stockholders Agreement were
approved by the Board of Directors of Weirton after
consultation with LSC Financial Services, Inc. subject to
receipt of the "fairness opinion" from LSC Financial Services,
Inc. See "Opinion of LSC Financial Services, Inc.".
Preliminary due diligence reviews were conducted by
representatives of both corporations during the negotiations
which disclosed no material adverse conditions as that term is
defined in the Agreement.
Recommendation of the Boards of Directors
The Boards of Directors of Weirton and Wesbanco have
approved the Agreement by unanimous vote of the directors of
the respective corporations and recommend that the Weirton
shareholders vote for approval of the Agreement and the
exchange of stock. The Boards of Directors of Weirton and
Wesbanco have determined that the Agreement is in the best
interests of their respective companies, shareholders and
employees, and that the Merger will enhance the ability of
Wesbanco and Weirton to serve the financial needs of their
respective customers.
The Boards of Directors of Wesbanco and Weirton believe
that the Merger will produce a stronger combined entity better
able to compete with banks and a variety of non-bank
institutions including securities companies, insurance
companies, thrift institutions and retailers, in a financial
services industry that has changed and is in the process of
changing further.
<PAGE> 22
Weirton Reasons for the Merger
In making its determination, the Board of Directors of
Weirton considered a number of factors, including (i) the
operating history, financial and future prospects of Weirton
and Wesbanco, (ii) pro forma financial information concerning
the Merger, including, among other things, the pro forma book
value, earnings and dividends per share to Weirton
shareholders, (iii) a comparison of the price being paid in
this Merger to other comparable bank mergers, based, among
other things, on multiples of book value and earnings, (iv) the
historical dividends on Wesbanco Common Stock as compared to
the historical dividends on Weirton Common Stock, as well as
prospects for future dividends, (v) the tax-free nature of the
transaction (see, generally, "Certain Federal Income Tax
Consequences of the Merger" below), (vi) the historical trading
prices for Weirton Common Stock and Wesbanco Common Stock,
(vii) Weirton's alternatives to this Merger, including
remaining independent or negotiating a business combination or
transaction with another institution, and (viii) the provisions
of the Agreement allowing Weirton to terminate the Agreement
if certain conditions, including certain Wesbanco market price
tests and the obtaining of a fairness opinion by Weirton are
not met at the Closing (See "Conditions and Covenants",
"Termination" and "Opinion of LSC Financial Services, Inc."
below).
In reviewing comparable bank mergers, the Board of
Directors considered other transactions which had a variety of
ranges in book value multiples and earnings multiples.
The Board of Directors of Weirton also took into account
that the Weirton shareholders would have the opportunity to
participate in the future growth of Wesbanco by obtaining
Wesbanco Common Stock in the Merger. The Board noted that
Weirton, as part of a multi-bank holding company of greater
size than Weirton and with a substantial trust department and
other resources, should be able to provide its customers with a
greater range of services and should become a stronger
competitor in its existing markets. Since it is anticipated
that Weirton's offices will continue to be operated, Weirton
will be able to continue to be responsive to the needs of the
local communities it serves. At the same time, Weirton and
Wesbanco will each have the benefit of the resources and skills
of the other institution, and Wesbanco's Board will be
increased to include two Weirton directors, namely, George M.
Molnar and R. Peterson Chalfant, with Mr. Molnar to also serve
on Wesbanco's Executive Committee. (See "Effects of the Merger:
The Surviving Corporation" below). As shareholders of Wesbanco,
the shareholders of Weirton (other than Dissenting Weirton
Shareholders who would receive only cash in the proposed
transaction) would continue to be able to participate in any
future growth from the combination of Weirton and Wesbanco
(See "Effects of the Merger: The Surviving Corporation"
below).
After reviewing all relevant facts, the Weirton Board of
Directors determined to approve the Agreement and recommend the
Merger to the Weirton Shareholders. If any conditions to
Closing are not met (see "Conditions and Covenants" and
"Termination" below), the Weirton Board of Directors will make
an independent determination, after consultation with counsel,
where appropriate, as to whether or not to terminate the
Agreement and abandon the Merger.
<PAGE> 23
Wesbanco Reasons for the Merger
Wesbanco's Board of Directors believes that the proposed
Merger will allow Wesbanco to combine its resources with those
of Weirton, thereby affording the resulting combined
institution better opportunities to compete with other
financial and nonfinancial institutions (including other
commercial banks, thrift institutions, finance companies,
credit unions, money market mutual funds, brokerage firms,
investment companies, credit companies, insurance companies and
retail stores that maintain their own credit operations) in the
markets in which Weirton and Wesbanco's subsidiary banks
conduct their business. The Merger will provide Wesbanco with
a greater presence in the Northern Panhandle of West Virginia
which will provide Wesbanco with an opportunity for future
growth in that market which it does not presently have.
Moreover, the affiliation should permit a greater investment in
data processing systems, accounting and other support services,
as well as provide greater economies of scale. Benefits to the
combined entity will also be available through the elimination
of duplicative expenses.
Wesbanco will be able to offer a broader range of services
than those currently available to Weirton customers, in
particular trust services, and the combined entity will be able
to offer a broader loan program and, through participations by
the subsidiary banks, to service larger loan transactions. In
summary, Wesbanco's Board of Directors believes that the Merger
will enable both Weirton and Wesbanco's subsidiaries to better
serve the financial needs of their communities, and that the
Merger will enable Wesbanco to obtain these benefits at a cost
that, under all the facts and circumstances, is reasonable.
Interest of Certain Persons in the Merger
Directors and officers of Weirton, beneficially owned, in
the aggregate, approximately 1,907 shares, or 14.66% of Weirton
Common Stock as of July 1, 1996.
All of Weirton's directors and officers will, as a result
of the Merger, obtain an equity interest in Wesbanco in
exchange for their shares of Weirton Common Stock. Each of them
will receive the same number of shares of Wesbanco Common Stock
for each share of Weirton Common Stock owned by him or her as
every other Weirton shareholder. Certain affiliates of Weirton
will, however, be subject to certain restrictions on any resale
of Wesbanco stock received by them pursuant to the Merger. See
"Resales of Wesbanco Common Stock". The directors of Weirton
do not own any shares of Wesbanco Common Stock.
As a result of the Merger each five-percent shareholder of
Weirton will receive, in exchange for the Weirton Common Stock
beneficially owned by them, the amount and percentage of shares
of Wesbanco Common Stock set forth in "Information With Respect
to Weirton-Principal Shareholders".
Under the Agreement, George M. Molnar and R. Peterson
Chalfant, directors of Weirton, will become directors of
Wesbanco on the Effective Date, and Mr. Molnar will become a
member of the Wesbanco Executive Committee. Also, George M.
Molnar and Donald R. Donell
<PAGE> 24
will become directors of Wesbanco Wheeling on the Effective Date,
and Mr. Molnar will become a member of the Wesbanco Wheeling
Executive Committee. See "Effects of the Merger: The Surviving
Corporation" below. It is also a condition to Wesbanco's
obligations to consummate the Merger that George M. Molnar,
President of Weirton, enter into an employment agreement with
Weirton, as described in the section entitled "Conditions and
Covenants", below. There are no agreements that the other individuals
who serve as directors and officers of Weirton will remain in their
respective positions following the Merger. See "Effects of the Merger:
The Surviving Corporation" below.
George M. Molnar does not presently have an Employment
Agreement with Weirton. The proposed Employment Agreement for
Mr. Molnar would have a revolving three year term commencing on
the Effective Date of the Merger at a salary not less than the
salary in effect for Mr. Molnar as of the Effective Date of the
Merger. The contract also contains a "make whole" clause which
protects Mr. Molnar against any loss of benefits currently
provided Weirton. The Agreement also requires Weirton to
provide the same benefits to Mr. Molnar which it provides to
other executive employees, during the period of his employment.
The Agreement contains a termination for cause provision and a
termination on death clause. In the event of the death of the
employee during the term of the Agreement, Weirton is required
to pay to Mr. Molnar's spouse an amount equal to six months of
his base salary at his then current base rate. In the event
Weirton attempts to terminate Mr. Molnar's employment other
than for cause, or due to the death of the employee, or by
mutual consent with the employee, Mr. Molnar is entitled to
receive an amount equal to the greater of six months base
salary or the base salary payable under the remaining term of
the Agreement. Wesbanco is a party to such contract and will
unconditionally guarantee the performance of the bank
thereunder.
As of July 1, 1996, Wesbanco held no shares of Weirton
Common Stock. Directors, executive officers and affiliates of
Wesbanco owned no shares of Weirton Common Stock as of such
date. The Merger will have no effect on the positions of the
present directors and officers of Wesbanco, and except for the
stock ownership of Weirton described herein and for counsel fees paid
to a director of Wesbanco in the ordinary course of business in
connection with this transaction, no directors, officers or
affiliates of Wesbanco have any special interest in the Merger
or are receiving any special consideration or compensation as a
result of the Merger.
It is not anticipated that any outstanding transactions
between Weirton or Wesbanco and their respective affiliates,
and any directors, officers, or principal shareholders of
Weirton or Wesbanco or their respective associates, including
any outstanding loans or trust relationships, will be affected
by the Merger.
Opinion of LSC Financial Services, Inc.
As described in more detail under "Recommendation of the
Boards of Directors" and "Weirton Reasons for the Merger"
above, in its role as an advisor, LSC Financial Services, Inc.
("LSC Financial") gave the Board its preliminary advice as of
February 21, 1996, based on the information then available,
that the terms of the Merger were fair, from a financial point
of view, to Weirton and its shareholders. On June 20, 1996,
LSC Financial rendered its definitive
<PAGE> 25
written opinion to that effect. In the event the closing of
the Merger is held more than five days after the Weirton Special
Meeting, Weirton may request LSC Financial to update its opinion.
The full text of LSC Financial's opinion, which sets forth the
assumptions made, matters considered and limitations on the review
undertaken in connection with such opinion, is set forth below and
should be read in its entirety.
<PAGE> 26
LSC FINANCIAL SERVICES, INC.
Consultants to Financial Institutions
June 20, 1996
The Board of Directors
Bank of Weirton
333 Penco Road
Weirton, WV 26062
Members of the Board:
You have requested our opinion as to the fairness, from a
financial point of view, to the shareholders of Bank of Weirton
(Weirton) of the Agreement and Plan of Merger (the Agreement)
between Weirton, Wesbanco, Inc., and its wholly owned
subsidiary, Wesbanco Bank Wheeling. Under the terms of the
Agreement, each outstanding share of Weirton common stock will
be converted into 130 shares of Wesbanco common stock.
LSC Financial Services, Inc. as part of its investment banking
and bank consulting business is regularly engaged in the
valuation of financial institution securities in connection
with various types of transactions, including mergers,
acquisitions and valuations for various other purposes, and in
determination of adequate consideration in such transactions.
For purposes of this opinion, we reviewed and analyzed
information pertaining to the financial and operating condition
of Weirton and Wesbanco. This review included, but was not
limited to: (i) the Agreement and Plan of Merger; (ii)
financial and other information which was publicly available or
provided to us by Weirton and Wesbanco; (iii) certain financial
information relating to the banking industry in general; (iv)
the respective history of dividends paid by the two institutions;
(v) our evaluation of future prospects for the merged institution;
(vi) terms and conditions of comparable merger transactions and
(vii) such other financial reviews, analyses, and
investigations as we deemed appropriate.
In rendering our opinion, we have relied on the accuracy of
information and representations made to us by Weirton and
Wesbanco and their officers, directors, counsel, and other
agents. We have not independently verified the information
reviewed by us, and in rendering this opinion have relied upon
such information as being complete and accurate in all material
respects. LSC was not requested to, and did not, solicit third
party indications of interest in acquiring Weirton.
We have assumed that the allowances for loan losses indicated
on the balance sheets of Weirton and Wesbanco as of December
31, 1995, are adequate to cover such losses. We have not
reviewed the loan files of Weirton or Wesbanco.
<PAGE> 27
We assumed that in the course of obtaining the necessary
regulatory approvals for the Merger, no restrictions will be
imposed on Wesbanco that would have a material adverse effect
on the contemplated benefits of the Merger to Weirton. We
further assumed that no change would occur in applicable law or
regulation that would cause a material adverse change in the
prospects or operations of Wesbanco after the Merger. We
express no opinion as to the tax consequences of the merger to
Weirton and its shareholders.
Based upon and subject to the foregoing, it is our opinion as
of the date hereof, that the exchange is fair, from a financial
point of view, to the shareholders of Bank of Weirton.
Sincerely,
/s/ LSC Financial Services, Inc.
LSC Financial Services, Inc.
<PAGE> 28
LSC Financial is a nationally recognized, regional
investment banking firm headquartered in Valley Forge,
Pennsylvania, and is regularly engaged in the valuation of
banks and other financial institutions and their securities.
LSC Financial was retained by the Board of Directors of
Weirton on January 29, 1996, to advise and assist management in
the analysis and evaluation of the acquisition proposal from
Wesbanco, including a review of Weirton's current and
prospective financial position and its current acquisition
value, the evaluation of the financial terms of the proposal
for the Board of Directors, and, the rendering of an opinion as
to the fairness, from a financial point of view, of the terms
of the proposed Merger to Weirton and its shareholders. See
"Recommendation of the Boards of Directors" and "Weirton
Reasons for the Merger" above for additional discussion of LSC
Financial's role in advising the Weirton Board of Directors.
The Board of Directors selected LSC after reviewing
several candidates on the basis of its experience in the
valuation of financial institutions and their securities and
its familiarity with the commercial banking industry, bank
securities and merger and acquisition transactions in the
region and on the basis of cost. No limitations were imposed
by Weirton or Wesbanco with respect to the opinion rendered by
LSC Financial, or the scope of its investigation.
The terms of the Merger were not determined by LSC
Financial, but instead were established by the respective
boards of directors of Weirton and Wesbanco.
LSC Financial arrived at its opinion after discussions
with senior officers of Weirton and Wesbanco; a review of
pertinent financial information concerning Weirton and
Wesbanco; a review of the trading history of Weirton Common
Stock and Wesbanco Common Stock; a review of the dividend
record of Weirton and Wesbanco; a comparison of the financial
terms of the Merger with the terms of other recent business
combinations involving banks and bank holding companies; a
comparison of financial and market information of selected
banks and bank holding companies with that of Weirton and
Wesbanco; a review of the Stockholder Agreement, the Agreement,
and the Proxy Statement/Prospectus; and such other analyses,
studies and investigations as LSC Financial deemed relevant.
In rendering its opinion, LSC Financial assumed that in
the course of obtaining the necessary regulatory approvals for
the Merger, no restrictions will be imposed on Wesbanco that
would have a material adverse effect on the contemplated
benefits of the Merger to Weirton. LSC Financial also assumed
that there would not occur any change in applicable law or
regulation that would cause a material adverse change in the
prospects or operations of Wesbanco after the Merger.
LSC Financial did not independently verify the information
used in arriving at its opinion, but assumed the accuracy and
completeness of all such information. Also, LSC Financial did
not make or obtain any independent appraisal of the assets or
liabilities of Weirton or Wesbanco. LSC was not requested to,
and did not, solicit third party indications of interest in
acquiring Weirton.
<PAGE> 29
For its financial services, including rendering the
opinion included herein, LSC Financial will receive a fee of
$19,500, plus expenses, of which $13,000 has been paid and of
which $6,500 will be paid upon consummation of the Merger. An
additional fee will be payable for any update to LSC
Financial's opinion. Weirton has also agreed to reimburse LSC
Financial for its reasonable out-of-pocket expenses and to
indemnify LSC Financial against certain liabilities, including
liabilities arising under Federal Securities Laws, which may
arise in connection with the performance of its services for
Weirton. The amount of the consideration was determined as a
result of negotiations between Weirton and LSC Financial.
LSC Financial has had no other material relationship with
Weirton, Wesbanco or any of their respective affiliates in the
past two years.
LSC FINANCIAL'S OPINION IS DIRECTED ONLY TO THE EXCHANGE
RATIO IN THE MERGER AND DOES NOT CONSTITUTE A RECOMMENDATION TO
ANY WEIRTON SHAREHOLDER AS TO HOW SUCH SHAREHOLDER SHOULD VOTE
AT THE WEIRTON SPECIAL MEETING. THE SUMMARY OF THE OPINION OF
LSC SET FORTH IN THIS PROXY STATEMENT IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO THE FULL TEXT OF SUCH OPINION.
LSC Financial's opinion was based solely upon information
available to it and provided by Weirton and Wesbanco, the
economic market and other conditions as they existed as of the
date its opinion was rendered.
Effective Time
The Merger will become effective (the "Effective Time") on
the effective date specified in the Certificate of Merger to be
issued by the West Virginia Secretary of State, which will
occur as soon as practicable after the closing (the "Closing").
It is anticipated that the Closing will be held and such
Certificate will be issued on the date which is the latest of:
(i) the day of the meeting of the shareholders of Weirton at
which the Agreement is approved; (ii) the fifteenth (15th) day
after the approval of Wesbanco's acquisition of Weirton by the
Federal Reserve Board; (iii) the day after any stay of the
Federal Reserve Board's approval of the acquisition of Weirton
shall be vacated or shall have expired or the day after any
injunction against the closing of the Merger shall be lifted,
discharged or dismissed; (iv) the day after the approval of the
transaction by the West Virginia Department of Banking and
Financial Institutions; (v) the date on which the conditions
set forth in the Agreement are satisfied or waived; or (vi)
such other date as shall be mutually agreed to by Wesbanco and
Weirton. It is presently anticipated that if the shareholders
of Weirton approve the Agreement at the Special Meeting and the
regulatory approvals are obtained, the Department of Justice
does not object to the Merger, and all other conditions to the
Merger are satisfied or waived, the Merger will become
effective by August 30, 1996. See "Conditions and Covenants"
and "Termination" below.
<PAGE> 30
Conversion of Weirton Common Stock
Each share of Weirton Common Stock issued and outstanding
immediately prior to the Effective Time, other than shares held
by dissenting Weirton Shareholders or shares held by Weirton or
Wesbanco, other than in a fiduciary capacity, will, at the
Effective Time, by virtue of the Merger and without any action
on the part of the holder thereof, be converted into one
hundred thirty (130) shares of Wesbanco Common Stock.
All issued and outstanding shares of Wesbanco Wheeling
will continue to be held by Wesbanco and will be the issued and
outstanding shares of the Surviving Corporation.
No certificates for fractional shares of Wesbanco Common
Stock will be issued to any holder of Weirton Common Stock in
the Merger. Wesbanco will pay cash in lieu of any fractional
share to which any shareholder of Weirton Common Stock may
otherwise be entitled in an amount based on a value of $27.00
per whole share of Wesbanco Common Stock or, at the option of
such shareholder, such shareholder may purchase the remaining
fraction of such share from Wesbanco at the same price and
receive a whole share of Wesbanco Common Stock.
For a discussion of the treatment of shares held by
Weirton shareholders who elect to exercise their dissenters'
rights, see "Rights of Dissenting Shareholders" below.
Exchange of Certificates
As promptly as practicable after the Effective Time of the
Merger, each holder of any outstanding certificate or
certificates for Weirton Common Stock (other than Weirton
shareholders who elect to exercise their dissenters' rights)
upon surrender of their certificates, together with a duly
executed letter of transmittal, to Wesbanco Wheeling, which is
acting as Exchange Agent for Wesbanco, shall be entitled to
receive in exchange therefor a certificate or certificates
representing the number of whole shares of Wesbanco Common
Stock, into which the shares of outstanding Weirton Common
Stock theretofore represented by the certificate or certificates
so surrendered shall have been converted, together with a check
for cash in lieu of fractional shares of common stock or, if the
proper amount of cash is submitted for the remaining fraction, an
additional whole share of Wesbanco Common Stock. See
"Conversion of Weirton Common Stock" above.
Whenever a dividend is declared by Wesbanco on Wesbanco
Common Stock after the Effective Date, the dividend will apply
to all shares of Wesbanco Common Stock into which shares of
Weirton Common Stock have been converted by virtue of the
Merger. See "Comparative Stock Prices and Dividends". No
former Weirton shareholder will be entitled to receive such
dividend, however, until he or she has exchanged the
certificates representing his or her Weirton Common Stock for
certificates representing Wesbanco Common Stock, upon which
exchange he or she will be entitled to receive such dividend
(without interest thereon and less the amount of taxes, if any,
which may have been imposed or paid thereon).
<PAGE> 31
SHAREHOLDERS OF WEIRTON SHOULD NOT RETURN CERTIFICATES
REPRESENTING WEIRTON COMMON STOCK WITH THE ENCLOSED PROXY CARD.
Instructions for surrendering such certificates will be sent to
shareholders of Weirton promptly after the Effective Time.
Wesbanco and Wesbanco Wheeling Shareholder Approval:
Wesbanco shareholder approval of the Agreement is not
required under West Virginia corporation law or the Articles of
Incorporation of Wesbanco.
The Boards of Directors of Wesbanco and Wesbanco Wheeling
have approved the Agreement. Wesbanco has also agreed, as sole
shareholder of Wesbanco Wheeling, to vote all of the
outstanding shares of said corporation in favor of the Merger.
Effects of the Merger: The Surviving Corporation
At the Effective Time, the separate existence of Weirton
will cease. Wesbanco Bank Wheeling will be the surviving
corporation (sometimes referred to as the "Surviving
Corporation"). The assets, liabilities, and capital of Weirton
will be merged into Wesbanco Wheeling and these assets,
liabilities, and capital will then constitute part of the
assets, liabilities, and capital of Wesbanco Wheeling. Wesbanco
Wheeling will operate under the Articles of Incorporation and
Bylaws of Wesbanco Wheeling effective as of the day of the
Merger.
The Articles of Incorporation and Bylaws of Wesbanco will
be unaffected by the Merger, and the individuals who served as
directors and officers of Wesbanco immediately prior to the
Merger will continue to serve as directors and officers of
Wesbanco after the Effective Time, until their successors shall
have been elected and qualified or until their resignation or
removal according to law. For information concerning
Wesbanco's current management, see Wesbanco's Proxy Statement
for its annual meeting of stockholders held on April 17, 1996,
which has been incorporated by reference into this Proxy
Statement/Prospectus and a copy of which is being delivered
herewith. See "Incorporation Of Certain Documents By
Reference." In addition, however, pursuant to the Agreement,
Wesbanco will appoint as directors of Wesbanco, as of the
Effective Date, George M. Molnar and R. Peterson Chalfant, or
if they are unable or unwilling for any reason to serve, such
successor appointees as may be designated in the Agreement or
as otherwise designated by Weirton, and acceptable to Wesbanco,
to serve until the next annual meeting of Wesbanco shareholders
and will nominate for the position of Wesbanco director and solicit
proxies for each such person from its shareholders until such person
has served a full three year term as a Wesbanco director. Such persons
will be appointed to different classes of Wesbanco's classified
Board of Directors to the extent feasible. Should either Mr.
Molnar or Mr. Chalfant be unable or unwilling to complete said
terms as directors, a substitute, reasonably satisfactory to
Wesbanco, will be designated by the Board of Directors of
Weirton. Wesbanco has also agreed to appoint, effective as of
the Effective Date, Mr. Molnar as a member of its Executive
Committee and will continue to appoint Mr. Molnar to its
Executive Committee at least as long as one of the Weirton
designees is a director of Wesbanco pursuant to the terms of
<PAGE> 32
the Agreement. Both of the above identified individuals are
directors of Weirton. See "Information with Respect to Weirton
- - Principal Shareholders"
Weirton will be merged with and into Wesbanco Wheeling,
which is a wholly-owned subsidiary of Wesbanco. While Wesbanco
has advised Weirton that the officers and employees of Weirton
immediately after the Merger will be the same as the officers
and employees now holding such positions, there are no
agreements to that effect, except as noted in the employment
contract. See "The Merger - Interest of Certain Persons in the
Merger". The present executive officers of Weirton will also
become executive officers of Wesbanco Wheeling. It is
anticipated that after the Effective Date, there will be a
close liaison and a high level of cooperation among all
Wesbanco subsidiaries, which can be expected to result in
improved services to their respective customers and greater
efficiency.
If the Merger had occurred as of March 31, 1996, Weirton
would have, on a pro forma consolidated basis, constituted
11.2% of deposits, 10.6% of assets, 17.9% of equity, and its
shareholders would have held 16.3% of the total outstanding
shares of Wesbanco on a consolidated basis. In addition, for
the three months ended March 31, 1996, Weirton would have
contributed 8.3% of net interest income and 8.7% of net income
to Wesbanco on a pro forma consolidated basis. These
percentages reflect the relative size of Weirton as of March
31, 1996. These percentages may change with the normal
variances in the rates of growth for deposits and loans for all
Wesbanco affiliates. Additionally, it is contemplated that
Wesbanco may combine with other financial institutions in the
future and these mergers may affect the percentages shown
above. However, Wesbanco is not presently involved in any
other merger transactions for which definitive agreements or
letters of intent have been executed.
Conditions and Covenants
The Agreement provides that the Merger will not take place
unless and until certain conditions are met, or, in some cases,
waived.
Approval by Weirton Shareholders
--------------------------------
Approval by the affirmative vote of the holders of at
least a majority of the shares of Weirton Common Stock entitled
to vote at the Special Meeting of Weirton, and approval by
Wesbanco as sole shareholder of Wesbanco Wheeling (which
approval Wesbanco has agreed to give) is required by law and
must be obtained before the Merger can be consummated. As of
the Record Date, July 1, 1996, the directors and officers of
Weirton and its affiliates beneficially owned, in the
aggregate, approximately 1,907 shares or 14.66% of the
outstanding shares of Weirton Common Stock . See "Voting
Information - Voting and Revocation of Proxies" and "The
Merger - Interest of Certain Persons in the Merger" above.
<PAGE> 33
Government Approvals
--------------------
The completion of the Merger is also conditioned upon the
approval of the acquisition by the Federal Reserve Board and
the West Virginia Department of Banking.
The Merger is subject to approval by the Federal Reserve
Board under the provisions of the Bank Holding Company Act of
1956, as amended. Applications for such approval were filed
with the Federal Reserve Board on April 11, 1996, and the
application was approved on May 21, 1996.
Under the Bank Holding Company Act, the Federal Reserve
Board must withhold approval of the Merger if it finds that the
Merger would result in a monopoly or be in furtherance of any
combination or conspiracy to monopolize or attempt to
monopolize the business of banking in any geographical area.
In addition, the Federal Reserve Board may not approve the
Merger if it finds that the effect of the Merger may be
substantially to lessen competition or to tend to create a
monopoly or would in any other manner be in restraint of trade,
unless it finds that the anticompetitive effects of the
proposed transaction are clearly outweighed in the public
interest by the probable effects of the transaction in meeting
the convenience and needs of the communities to be served. In
ruling upon the application, the Federal Reserve Board must
also take into consideration the financial and managerial
resources and future prospects of Weirton and Wesbanco. See
"Information With Respect To Weirton Principal Shareholders."
Under the Bank Holding Company Act, the Merger may not be
consummated before the fifteenth calendar day after the date of
such approval by the Federal Reserve Board, during which time
the Department of Justice of the United States may challenge
the Merger under the antitrust laws.
The Merger is also subject to the approval of the Board of
Banking and Financial Institutions of the State of West
Virginia under the provisions of Code 31A-8A-4. The Board of
Banking and Financial Institutions may not approve the Merger
if it finds that the effects of the Merger would be similar to
those which require disapproval in accordance with the Bank
Holding Company Act set forth above. In addition, under the
state statute, the Merger may not be consummated for 120 days
following the date of the submission to the Board of the
application for approval, unless the Board otherwise provides
in an order approving the Merger. Applications for approval
were confirmed as filed with the West Virginia Board of Banking
and Financial Institutions on the 3rd day of May, 1996. A
hearing on the application was held on June 10, 1996,
before the West Virginia Board of Banking and Financial
Institutions and the application was approved.
The Merger could not have proceeded in the absence of the
requisite regulatory approvals. Although there was no assurance that
these regulatory approvals would be obtained, the management of
Wesbanco and Weirton believed that the required governmental
approvals would be obtained, and that the Department of Justice
would not object to the Merger.
<PAGE> 34
Covenants
---------
In the Agreement, Weirton agrees to take certain actions and
to refrain from taking certain actions in connection with its
business from February 8, 1996, until the Effective Time or
until the Agreement is terminated. Among other things, the
Agreement generally requires Weirton to conduct its business
only in the ordinary course and in a manner consistent with
past practice and to keep Wesbanco advised of any material
adverse changes in the financial condition, assets, business or
operations of Weirton. The Agreement further prohibits Weirton
from making certain distributions to its shareholders and
engaging in certain corporate transactions or transactions with
others outside of the ordinary course of its business
operations without the consent of Wesbanco, including with
certain exceptions, (i) issuing shares of its Common Stock, or
warrants, options, convertible securities or the rights to
purchase the same; (ii) issuing long-term debt; (iii) changing
its authorized capital stock; (iv) purchasing or otherwise
acquiring shares of its capital stock; (v) entering into or
amending any employment, pension, retirement, stock option,
profit sharing, deferred compensation or similar plan in
respect of any of its directors, officers or employees or
increasing its contribution to any such Plan except as provided
in the Agreement; (vi) acquiring or merging with any other
company; (vii) mortgaging, pledging or subjecting to a lien or
disposing of any of its material assets; (viii) amending its
Articles of Incorporation or Bylaws; or (ix) taking any action
materially and adversely affecting the financial condition,
business, properties or operations of Weirton.
The Agreement also prohibits dividends or other
distributions on Weirton Common Stock other than cash dividends
in the amount of Sixty-six Dollars and Ten Cents ($66.10) per
share per year, payable quarterly in such proportions as are
consistent with past practices; provided such dividends
cumulatively do not exceed 45% of the after-tax income of
Weirton for the fiscal year in which the dividends are paid.
Weirton further agrees in the Agreement that it will not,
and will not permit any person acting on behalf of it, to
directly or indirectly, take any action to support, encourage
or accept any offer from any other person to acquire Weirton,
or its assets. Weirton further agrees to notify Wesbanco if any
such offer is made.
Other Conditions
----------------
The consummation of the Merger is subject to a number of
further conditions which must be met or may be waived by the
party or parties to be benefited thereby.
The obligations of both Wesbanco and Weirton are subject
to a number of conditions, including: (i) the effectiveness of
the Registration Statement and compliance with applicable state
securities laws; (ii) the receipt of all required consents and
approvals and the expiration of any related delay periods;
(iii) holders of no more than 10% of the shares of Weirton
Common Stock entitled to vote at its Special Meeting shall have
filed written objections to the Merger as dissenting
shareholders in compliance with West Virginia law and not voted
in favor of the Agreement; (iv) the receipt of an opinion of
counsel on certain tax consequences of the Merger
<PAGE> 35
(See "Certain Federal Income Tax Consequences of the Merger" below);
(v) the absence of any action, proceeding, regulation or legislation
to enjoin, restrain, prohibit, or to obtain substantial damages
with respect to, the Agreement or the consummation of the
transactions contemplated thereby; and (vi) the performance by
the other party of its obligations under the Agreement.
Wesbanco's obligations are also subject to other
conditions to be met by Weirton including: (i) the accuracy of
certain representations and warranties made by Weirton
(including, among other things, representations as to
organization, authority to enter into the Agreement, financial
statements, absence of material litigation, capitalization,
material contracts, ERISA and tax matters, adequacy of the loan
loss reserve, and the absence of materially adverse changes in
areas such as financial condition, results of operations,
material assets, authorized, issued or outstanding capital
stock, certain personnel expenses, and material expenditures
for assets or other material obligations outside of the
ordinary course of business) as of the Closing; (ii) opinions
of counsel on such matters as organization, authority and stock
issuances; (iii) an accounting opinion by Ernst & Young LLP
related to the transaction; (iv) receipt, or best efforts of
Weirton to cause the receipt of, letters from certain
affiliates whose stock will be restricted (See "Resales of
Wesbanco Common Stock" below); and (v) absence of any suit,
action or proceeding against Weirton or its officers or
directors in their capacity as such which, in the reasonable
judgment of Wesbanco would, if successful, have a material
adverse effect on the financial condition or operations of
Weirton.
Weirton's obligations are also subject to certain other
conditions to be met, in part, by Wesbanco, including: (i) the
accuracy of certain representations and warranties made by
Wesbanco (including, among other things, representations as to
organization, actions to be taken in connection with Wesbanco
Wheeling, authority to enter into the Agreement and to issue
shares in the Merger, financial statements, absence of material
litigation, capitalization, material contracts, ERISA and tax
matters, adequacy of loan loss reserves, and the absence of
materially adverse changes in areas such as financial
condition, results of operations, material assets, authorized,
issued or outstanding capital stock, certain changes in
Articles or Bylaws, and material expenditures for assets or
other material obligations (outside of the ordinary course of
business) as of the Closing; (ii) opinions of counsel on such
matters as organization, authority, and the legality of the
shares to be issued in the Merger; (iii), the absence of any
suit, action or proceeding against Wesbanco, any of its
subsidiaries, or their officers or directors in their
capacities as such which, in the reasonable judgment of
Weirton, would, if successful, have a material adverse effect
on the financial condition or operations of Wesbanco or any of
its subsidiaries; (iv) the furnishing of a fairness opinion by
LSC Financial (See "Opinion of Investment Advisor" above), and
at Weirton's option, an update of said opinion as of the
closing if the closing is held more than five days after the
Weirton Special Meeting; and (v) the absence of any change in
control of Wesbanco since January 1, 1996.
Waiver and Amendment
The Agreement provides that any of the terms or conditions
thereof may be waived by action of the Board of Directors of
the party which is, or the shareholders of which are, entitled
to the benefits thereof. The parties may also amend or modify
the Agreement in whole or in part
<PAGE> 36
at any time prior to Closing, provided that the conversion ratio for
Weirton Common Stock in the Merger and any other material terms of the
Merger cannot be amended after its Special Meeting, unless the amended
terms are resubmitted to the shareholders of Weirton.
Termination
The Agreement and the transactions contemplated thereby
may be terminated at any time prior to the Effective Time by
mutual consent of Weirton and Wesbanco or by either of them if:
(i) any of the conditions to that party's obligation to close
have not been met or waived; (ii) the Merger would violate any
nonappealable final order, decree or judgment of any court or
governmental body having competent jurisdiction; (iii) the
requisite vote of the shareholders is not obtained; or (iv) the
Closing has not been held by February 8, 1997.
The Stockholder Agreement
In conjunction with the Agreement, Wesbanco entered into a
Stockholder Agreement dated as of February 8, 1996, with the
directors and chief executive officer of Weirton. Each such
director and the chief executive officer of Weirton, in his
capacity as a shareholder of Weirton agreed, among other
things, not to sell, pledge, transfer or otherwise dispose of
his shares of Weirton stock prior to the Special Meeting of
shareholders at which the Merger is considered and to vote such
shares of stock in favor of the Merger.
Rights of Dissenting Shareholders
Holders of Weirton Common Stock who object to the Merger
and comply with Section 31-1-123 of the West Virginia
Corporation Act (the "Act"), are entitled to payment of the
fair value of their shares (each such shareholder, a
"Dissenting Shareholder"). The fair value of the shares held
by a Dissenting Shareholder is determined as of the day prior
to the date on which the Weirton shareholder vote on the
Agreement was taken without regard to any appreciation or
depreciation in anticipation of such corporate action.
The following is a brief summary of the steps necessary to
be taken by a shareholder to perfect his or her rights under
West Virginia law to be paid the fair value of his or her
shares as a Dissenting Shareholder. This summary does not
purport to be complete and is subject in all respects to the
provisions of, and is qualified in its entirety by reference
to, the provisions of Section 31-1-123 of the Act, which is
reproduced in full as Appendix I to this Proxy
Statement/Prospectus.
1. Written Objection to the Merger Must Be Filed. A
----------------------------------------------
Dissenting Shareholder must file written objection to the
proposed Merger with Weirton prior to or at the Special
Meeting.
2. Shares Must Not Be Voted in Favor of the Merger. A
-----------------------------------------------
Dissenting Shareholder must not vote his or her shares of
Weirton Common Stock in favor of the Merger. It is not
required that they be voted against the Merger; however, a vote
in favor of the Merger will preclude the exercise of
dissenters' rights.
<PAGE> 37
3. Shareholders Must Make Written Demand for Fair Value.
-----------------------------------------------------
A Dissenting Shareholder must make written demand on Weirton or
the Surviving Corporation for payment of the fair value of his
or her shares of Weirton Common Stock within 10 days after the
vote is taken at the Special Meeting. Voting against the
Merger does not constitute the demand for payment required by
law. A Dissenting Shareholder who fails to make such written
demand within the 10-day period shall be bound by the terms of
the Agreement. The written demand may be addressed to George
M. Molnar, President and Chief Executive Officer, Bank of
Weirton, 333 Penco Road, Weirton, West Virginia, 26062. Once
the demand has been made, it cannot be withdrawn without the
permission of Weirton or the Surviving Corporation.
4. Rights of a Dissenting Shareholder. Any shareholder
-----------------------------------
making such demand shall thereafter be entitled only to payment
as a Dissenting Shareholder as provided by law and shall not be
entitled to vote or to exercise any other rights of a
shareholder. No such demand may be withdrawn without the
consent of Weirton or the Surviving Corporation. If, however,
such demand is withdrawn upon consent, or if the proposed
Merger is abandoned or rescinded, or if the shareholders revoke
the authority to effect the Merger, or if no demand or petition
for the determination of fair value by a court of general civil
jurisdiction has been made or filed within the time set forth
under Paragraph 7 below, or if a court of general civil
jurisdiction determines that such shareholder is not entitled
to the relief as a Dissenting Shareholder, then the right of
such shareholder to be paid the fair value of his or her shares
ceases and his or her status as a shareholder shall be
restored, without prejudice to any corporate proceedings which
may have been taken during the interim.
5. Dissenting Shareholder Must Surrender Certificate(s).
-----------------------------------------------------
A Dissenting Shareholder must surrender his or her stock
certificates to Weirton within 20 days after demanding payment
for his or her shares in order for Weirton to place a notation
on the stock certificates that such demand has been made. A
Dissenting Shareholder's failure to surrender his or her
certificate shall, at Weirton's option, terminate his or her
dissenters' rights unless a court, for good cause shown,
directs otherwise.
6. Weirton Must Make Offer. Within 10 days after the
------------------------
Effective Date of the Merger, the Surviving Corporation must
give written notice thereof and make a written offer to each
Dissenting Shareholder who has made written demand ( as set
forth in Paragraph 3 above) to pay for the Dissenting
Shareholder's shares at a specified price deemed by it to be
the fair value thereof, accompanied by a balance sheet of
Weirton as of the latest available date (not more than twelve
months prior to the making of the offer) and a profit and loss
statement of Weirton for the twelve month period ended on the
date of such balance sheet. If within 30 days after the
Effective Date, a Dissenting Shareholder and Weirton agree upon
the fair value, the Dissenting Shareholder shall be entitled to
receive the agreed payment for his or her shares within 90 days
after the Effective Date upon surrender of such shares. Upon
payment of the agreed value, the Dissenting Shareholder shall
cease to have any interest in such shares.
7. Filing Suit. If a Dissenting Shareholder and Weirton
------------
fail to agree upon the fair value within 30 days after the
Effective Date, Weirton on its own initiative may, or upon written
<PAGE> 38
demand from the Dissenting Shareholder shall, within 30
days after receipt of such request, file a complaint in the
Circuit Court of Hancock County, West Virginia, within 60 days
after the Effective Date requesting that the fair value of such
shares be found and determined. In the event of the failure of
Weirton to institute such proceeding, the Dissenting
Shareholder may do so in the name of Weirton.
The foregoing does not purport to be a complete statement
of the procedures to be followed by shareholders desiring to
exercise dissenters' rights. To exercise such rights, strict
adherence to the provisions of those sections of the law of the
State of West Virginia referred to above is required. EACH
SHAREHOLDER WHO MAY DESIRE TO EXERCISE SUCH RIGHTS SHOULD
CONSULT SUCH LAWS AND ADHERE TO THE PROVISIONS THEREOF. As in
all legal matters, you would be well advised to seek the guidance
of an attorney at law.
The receipt of cash for shares of Weirton Common Stock
held by a Dissenting Shareholder will be a taxable transaction
to the Dissenting Shareholder for Federal income tax purposes.
The amount of gain or loss and its character as ordinary or
capital gain or loss will be determined in accordance with
Sections 302 and 1001 (and in certain cases, other provisions)
of the Internal Revenue Code of 1986. Any Weirton shareholder
contemplating the possible exercise of dissenters' rights is
urged to consult a tax advisor as to the Federal (and any
applicable state and local) income tax consequences resulting
from such an election.
Resales of Wesbanco Common Stock
The shares of Wesbanco Common Stock issuable upon the
consummation of the Merger will be registered with the
Commission under the Securities Act of 1933 (the "Securities
Act"). Under current law, each holder of Weirton Common Stock
who is not an affiliate of Wesbanco or Weirton within the
meaning of Rule 144 or 145 under the Securities Act, may sell
or transfer any shares of Wesbanco Common Stock such holder
receives in the Merger without need of further registration
under the Securities Act. This Proxy Statement/Prospectus does
not cover and may not be used in connection with any resales of
Wesbanco Common Stock by such affiliates.
Shares of Wesbanco Common Stock issued to Weirton
shareholders who may be deemed to be affiliates of Weirton
before the Merger or affiliates of Wesbanco after the Merger
may be resold only in transactions permitted by Rules 145 and
144 under the Securities Act, pursuant to an effective
registration statement or in transactions exempt from
registration. Generally a shareholder who is an executive
officer, director or a principal shareholder or other control
person of a company may be deemed to be an affiliate for these
purposes, while other shareholders would not be deemed to be
affiliates. Rules 144 and 145, insofar as relevant to shares
acquired in the Merger, impose restrictions on the manner in
which affiliates may make resales and also on the quantity of
resales that such affiliates, and others with whom they might
act in concert, may make within any three-month period.
It is a condition to Wesbanco's obligation to consummate
the Merger that Weirton (i) deliver to Wesbanco a schedule
specifying the persons who may be deemed to be "affiliates" of
<PAGE> 39
Weirton within the meaning of Rule 145 under the Securities Act
("Affiliates"); and (ii) use its best efforts to cause each
Affiliate to deliver to Wesbanco, prior to Closing, a letter,
substantially in the form of Exhibit A to the Agreement (which
is set forth in Appendix II hereto) providing that the shares
of Wesbanco Common Stock issued pursuant to the Merger in
exchange for shares of Weirton Common Stock held by or for the
benefit of such Affiliate (a) will not be sold or otherwise
disposed of except in accordance with Rule 145 (where the
Affiliate has given Wesbanco evidence of compliance with the
Rule reasonably satisfactory to it) or pursuant to an effective
registration statement under the Securities Act unless such
person has furnished to Wesbanco a no-action or interpretive
letter from the Commission or an opinion of counsel reasonably
satisfactory to Wesbanco that such transaction is exempt from
or otherwise complies with the registration requirements of the
Securities Act; and (b) may be represented by certificates
which bear an appropriate legend.
Expenses
Wesbanco and Weirton will each bear and pay their
respective costs and expenses incurred in connection with the
Merger; however, all costs and expenses incurred in the
printing and mailing of the Proxy Statement/Prospectus are
being borne by Wesbanco. If the Merger is consummated, any
expense incurred but not paid prior to the Effective Time will
become the obligation of the Surviving Corporation by reason of
the Merger.
Accounting Treatment
The Merger will be accounted for as a "pooling-of-
interests" by Wesbanco and Weirton. The results of this
accounting treatment are shown in the summary unaudited
combined pro forma financial data included elsewhere in this
Proxy Statement/Prospectus. See "Pro Forma Data".
Certain Federal Income Tax Consequences of the Merger
Kirkpatrick & Lockhart LLP, special counsel to Wesbanco,
will render an opinion to Wesbanco as to the principal federal
income tax consequences expected to result from the Merger.
The following is a summary of such opinion. This summary
is qualified in its entirety by reference to the full text of
such opinion, including the assumptions upon which such opinion
is based. Such opinion is included as an exhibit to the
Registration Statement. Neither such opinion nor this summary
address any tax considerations under foreign, state or local
laws, or the tax considerations to shareholders other than
individual United States citizens who hold their shares of
Weirton Common Stock as a capital asset within the meaning of
Section 1221 of the Code.
No rulings have been requested from the Internal Revenue
Service as to the federal income tax consequences of the
Merger. Weirton shareholders should be aware that the opinion
of Kirkpatrick & Lockhart LLP is not binding on the Internal
<PAGE> 40
Revenue Service and the Internal Revenue Service is not
precluded from taking a different position. Weirton
shareholders should also be aware that some of the tax
consequences of the Merger are governed by provisions of the
Code as to which there are no final regulations and little or
no judicial or administrative guidance. The opinion of
Kirkpatrick & Lockhart LLP is based upon the federal income tax
laws as in effect on the date of such opinion and as those laws
are currently interpreted. There can be no assurance that
future legislation, regulations, administrative rulings or
court decisions will not adversely affect the accuracy of the
statements contained herein.
The federal income tax consequences discussed below are
conditioned upon, and the opinion of Kirkpatrick & Lockhart LLP
is based upon, the accuracy, as of the date hereof and at, as
of and after the effective time of the Merger, of certain
assumptions, including, but not limited to, the following
(taking into account for purposes hereof all events that are
contemplated under the Merger Agreement): (A) that, pursuant
to the Merger, the former shareholders of Weirton receive
shares of Wesbanco Common Stock having a value on the date on
which the effective time of the Merger occurs of not less than
fifty percent (50%) of the value of Weirton Common Stock as of
the same date; (B) that following the Merger, Wesbanco will
continue the historic business of Weirton or use a significant
portion of Weirton's historic business assets in a business;
and (C) that a bona fide corporate business purpose exists for
the Merger.
Wesbanco and Weirton believe that all of the foregoing
assumptions are accurate as of the date hereof, and will be
accurate at, as of and after the effective time of the Merger.
If either Wesbanco or Weirton learns before the effective time
of the Merger that such assumptions are false and that its
counsel therefore believes that the Merger is unlikely to be
treated as a tax-free reorganization, then additional
shareholder approval will be obtained before consummation of
the Merger.
Kirkpatrick & Lockhart LLP has rendered an opinion to
Wesbanco and Weirton, based upon the assumptions set forth
therein, that the Merger will have the following federal income
tax consequences:
(i) No gain or loss will be recognized by
Weirton, Wesbanco or Wesbanco Wheeling as a result
of the Merger.
(ii) No gain or loss will be recognized by any
Weirton shareholder upon the exchange of that
shareholder's shares of Weirton Common Stock for
shares of Wesbanco Common Stock pursuant to the
Merger.
(iii) The basis of the shares of
Wesbanco Common Stock received by a Weirton
shareholder (including any fractional shares)
will be the same as the basis of the shares of
Weirton Common Stock surrendered in exchange
therefor reduced by any amount allocable to a
fractional share interest for which cash is
received.
<PAGE> 41
(iv) If shares of Weirton Common Stock were
capital assets in the hands of a Weirton
shareholder immediately prior to the Merger, the
holding period of the shares of Common Stock
received by that shareholder in the Merger will
include the holding period of the shares of
Weirton Common Stock surrendered in exchange
therefor.
(v) A Weirton shareholder who dissents from
the proposed Merger and receives solely cash in
exchange for that shareholder's shares of Weirton
Common Stock will be treated as having received
that cash as a distribution in redemption of
those shares subject to the provisions and
limitations of Section 302 of the Code. If the
distribution is eligible for treatment as a
distribution in redemption of that shareholder's
shares, that shareholder will recognize gain to
the extent of the consideration received less
that shareholder's adjusted basis in those
shares.
(vi) The receipt by a Weirton shareholder of
cash in lieu of a fractional share of Wesbanco
Common Stock will be treated as if that
fractional share was issued to that holder in the
Merger and thereafter redeemed by Wesbanco for
cash. The receipt of cash by a Weirton
shareholder will be treated as a distribution by
Wesbanco in full payment in exchange for the
fractional share as provided in Section 302(a) of
the Code. If the distribution is eligible for
treatment as a distribution in redemption of a
Weirton shareholder's fractional share, that
shareholder will recognize gain to the extent of
the
consideration received less that shareholder's allocable
adjusted basis in that fractional share.
BECAUSE CERTAIN TAX CONSEQUENCES OF THE MERGER MAY VARY
DEPENDING UPON THE PARTICULAR CIRCUMSTANCES OF EACH SHAREHOLDER
AND OTHER FACTORS, EACH SHAREHOLDER IS URGED TO CONSULT SUCH
SHAREHOLDER'S OWN TAX ADVISOR TO DETERMINE THE PARTICULAR TAX
CONSEQUENCES OF THE MERGER TO THAT SHAREHOLDER, INCLUDING THE
APPLICABILITY AND EFFECT OF ANY STATE, LOCAL, OR FOREIGN
INCOME, PROPERTY, TRANSFER AND OTHER TAX LAWS.
COMPARATIVE STOCK PRICES AND DIVIDENDS
Wesbanco Stock Prices and Dividends
On May 11, 1987, Wesbanco Common Stock became quoted on
the Nasdaq Stock Market under the symbol WSBC. The following
Wesbanco stock prices represent the range of published
quotations by the Nasdaq Stock Market during each quarter. The
most recent high and low prices on Wesbanco Common Stock were
$26.50 and $27.00 as of June 17, 1996.
<PAGE> 42
Stock Price Range
Wesbanco(1)
-----------------------
High Low
------- ------
1994: First Quarter $29.50 $27.50
Second Quarter $28.25 $25.75
Third Quarter $29.00 $26.00
Fourth Quarter $29.25 $23.25
1995: First Quarter $25.75 $22.75
Second Quarter $26.50 $23.75
Third Quarter $29.50 $25.75
Fourth Quarter $30.00 $26.75
1996: First Quarter $28.75 $26.25
(1) On February 7, 1996, the date immediately preceding public
announcement of the proposed Merger, the published high and low
price reported by the Nasdaq Stock Market for Wesbanco stock was
27-1/4 and 26-3/4, respectively.
Dividends Paid
The following table summarizes the quarterly cash
dividends per share on Wesbanco Common Stock declared by
Wesbanco.
Wesbanco
--------
1994: First Quarter $ .21
Second Quarter .21
Third Quarter .22
Fourth Quarter .22
1995: First Quarter $.23
Second Quarter .23
Third Quarter .25
Fourth Quarter .25
1996: First Quarter .26
<PAGE> 43
Wesbanco Common Stock Dividend Policy
It has been the policy of Wesbanco to declare and pay cash
dividends on a quarterly basis. However, declaration and
payment of future dividends will depend upon the earnings of
Wesbanco and its subsidiaries, their financial condition and
other factors, including applicable governmental regulations
and policies. The principal sources of Wesbanco's income are
dividends from its subsidiary banks. For a description of
parent company liquidity, see "Index to Financial Statements-
Wesbanco."
Dividends may be paid on Wesbanco Common Stock at the
discretion of Wesbanco's Board of Directors out of any funds
legally available therefor. Under the West Virginia
Corporation Act, dividends may be paid out of unreserved and
unrestricted earned surplus, and, additionally, in certain
circumstances and with the affirmative vote of holders of a
majority of its outstanding shares, out of capital surplus,
provided, however, that in no event may dividends be paid if
Wesbanco is at the time insolvent or would be insolvent after
payment of such dividends. The amount and timing of any future
dividends will depend upon the earnings of Wesbanco and its
subsidiaries, their financial condition, and other relevant
factors. See "Government Regulation - Dividend Restrictions".
Weirton Stock Price Range and Dividends
There is no established public trading market for Weirton
Common Stock; however, Weirton is aware of certain trades by
private individuals or organizations in its stock. The
information below is compiled from quotations furnished by
various broker sources and actual trades that occurred during
the period, with or without commissions, as reported to
management of Weirton, although no attempt has been made to
verify or determine the accuracy of the information furnished
to Weirton. These stock price ranges may not necessarily
represent actual transactions, and trades that may have taken
place at higher or lower prices of which management is not
aware.
The following table sets forth the range of high and low
bid and asked prices per share for Weirton Common Stock and the
cash dividends declared per share for the periods indicated:
Cash
Stock Price Range (1) Dividends
--------------------- Paid Per
High Low Share
----- ----- ---------
1994 First Quarter $1,700 $1,600 $14.00
Second Quarter $1,700 $1,600 $14.00
Third Quarter $1,900 $1,800 $14.00
Fourth Quarter $1,900 $1,800 $20.00
<PAGE> 44
Cash
Stock Price Range (1) Dividends
--------------------- Paid Per
High Low Share
----- ----- ---------
1995 First Quarter $2,400 $2,000 $14.00
Second Quarter $2,400 $2,000 $14.00
Third Quarter $2,400 $2,000 $14.00
Fourth Quarter $2,400 $2,000 $22.00
1996 First Quarter $2,400 $2,400 $15.50
(1) Quarterly cash dividends are normally paid to shareholders
on or about the last business day of each calendar quarter except
that the fourth quarter dividend and special year end dividend are
usually paid on or about December 15 of each year.
On February 7, 1996, the last business day immediately
preceding public announcement of the proposed Merger, the range
of bid and asked prices per share for Weirton Common Stock,
reported as described above, was $2,400 bid and there was no
asked price. On June 17, 1996, the pro forma equivalent
price per share for Weirton Common Stock, based on the price
of Wesbanco Common Stock on that date was $3,477.50.
As of July 1, 1996, Weirton had approximately 219
shareholders of record of its common stock.
Weirton Dividend Policy
It has been the policy of Weirton to pay cash dividends on
Weirton Common Stock to holders of record of such stock on the
last day of each March, June and September and on the 15th day
of December. A special dividend is also paid with the dividend
payable in December. However, the declaration and payment of
future dividends will depend upon the earnings of Weirton, its
financial condition, and other factors, including applicable
governmental regulations and policies. The principal source of
Weirton's income is from its banking operations. See "Index to
Financial Statements - Weirton".
Dividends may be paid on Weirton Common Stock at the
discretion of Weirton's Board of Directors out of any funds
legally available therefor. Under the West Virginia
Corporation Act, dividends may be paid out of unreserved and
unrestricted earned surplus, and, additionally, in certain
circumstances and with the affirmative vote of the holders of a
majority of its outstanding shares, out of capital surplus,
provided, however, that in no event may dividends be paid if
Weirton is at the time insolvent or would be insolvent after
payment of such dividends. The amount and timing of any future
dividends will depend upon the earnings of Weirton, its
financial condition and other relevant factors. See
"Government Regulation - Dividend Restrictions".
The Agreement provides that Weirton may not pay or declare
dividends or other distributions on Weirton Common Stock other
than cash dividends in the amount of Sixty-six
<PAGE> 45
Dollars and Ten Cents ($66.10) per share of Weirton Common Stock
per year, payable quarterly, provided that such dividends may not
cumulatively exceed 45% of the after-tax income of Weirton for
the fiscal year in which the dividends are paid. See "The
Merger - Conditions and Covenants".
COMPARATIVE RIGHTS OF SHAREHOLDERS
Description of Wesbanco Capital Stock
The authorized capital stock of Wesbanco consists of
25,000,000 shares of common stock of the par value of $2.0833
per share, and 1,000,000 shares of preferred stock without par
value. The shares of Wesbanco Common Stock now outstanding are
fully paid and nonassessable. As of June 17, 1996, there were
approximately 3,853 holders of record of the common stock of
Wesbanco. Of the 25,000,000 shares of authorized common stock,
8,469,574 shares were issued and outstanding as of June 17,
1996. For a description of Wesbanco dividend rights, see
"Comparative Stock Prices and Dividends - Wesbanco Common Stock
Dividend Policy".
As of January 1, 1996, there were no shares of preferred
stock outstanding. Shares of preferred stock may be issued in
one or more classes or series with such preferences, voting
rights, full or limited, but not to exceed one vote per share,
conversion rights and other special rights as the Board of
Directors may fix in the resolution providing for the issuance
of the shares. The issuance of shares of preferred stock could
affect the relative rights of the common stock. Depending upon
the exact terms, limitations and relative rights and
preferences, if any, of the shares of preferred stock as
determined by the Board of Directors at the time of issuance,
the holders of preferred stock may be entitled to a higher
dividend rate than that paid on the common stock, a prior claim
on funds available for the payment of dividends, a fixed
preferential payment in the event of liquidation and
dissolution of the company, redemption rights, rights to
convert their preferred stock into shares of common stock, and
voting rights which would tend to dilute the voting control of
the company by the holders of common stock.
Subject to the above limitations, in the event of any
liquidation, dissolution or winding up of Wesbanco, and subject
to the application of state and federal laws, holders of
Wesbanco Common Stock are entitled to share ratably in the
assets available for distribution to stockholders remaining
after payment of the corporation's obligations.
Each share of Wesbanco Common Stock is entitled to one
vote, and to cumulate votes in the election of directors. No
holder of shares of Wesbanco Common Stock has any preemptive
right to subscribe for or purchase any other securities of
Wesbanco, and there are no conversion rights or redemption or
sinking fund provisions applicable to Wesbanco Common Stock.
However, Wesbanco elects directors on a staggered basis by
class with terms of three years. This provision of its
Articles of Incorporation requires a super majority vote of its
shareholders to change. See "Comparison of Rights of Wesbanco
and Weirton Shareholders".
<PAGE> 46
Description of Weirton Capital Stock
The authorized capital stock of Weirton consists of 13,000
shares of common stock, par value of $100.00 per share. The
shares of Weirton Common Stock now outstanding are fully paid
and nonassessable. As of July 1, 1996, there were 219
shareholders of record of Weirton Common Stock with 13,000
shares issued and outstanding.
Each share of Weirton Common Stock is entitled to one vote
and to cumulate votes in the election of directors. No holder
of shares of Weirton Common Stock has any preemptive right to
subscribe for or purchase any other securities of Weirton, and
there are no conversion rights or redemption or sinking fund
provisions applicable to Weirton Common Stock.
Dividends may be paid on Weirton Common Stock at the
discretion of Weirton's Board of Directors out of any funds
legally available therefore. For a discussion of Weirton's
dividend policy and restrictions on the payment of dividends
see "Comparative Stock Prices and Dividends - Weirton Dividend
Policy."
In the event of liquidation or dissolution of Weirton,
either voluntary or involuntary, the holders of Weirton Common
Stock are entitled to receive prorata, subject to the
application of state and federal laws, such net assets of
Weirton as are distributable to shareholders on the respective
shares held by them after payment of all liabilities of the
corporation.
In the event of a dissolution of Weirton, the liquidation
of its assets, or the winding up of its affairs, and subject to
the application of state and federal laws, the holders of
Weirton Common Stock will be entitled to share ratably in the
assets of Weirton available for distributions to its
shareholders remaining after payment of the corporation's
obligations.
Comparison of Rights of Wesbanco and Weirton Shareholders
The rights of the Weirton shareholders and the Wesbanco
shareholders are governed by the respective Articles of
Incorporation and Bylaws of each corporation and West Virginia
law. In many respects, the rights of Weirton shareholders and
Wesbanco shareholders are similar. Holders of common stock of
each corporation are entitled to one vote for each share of
common stock and to receive prorata any assets distributed to
shareholders upon liquidation. The affirmative vote of the
holders of the majority of the outstanding common stock of
either corporation is required to approve major corporate
transactions including mergers and consolidations. Cumulative
voting is permitted in the election of directors for both
corporations. Shareholders of neither corporation have
preemptive rights to purchase their prorata shares of any
additional stock issued. The shareholders of both corporations
have the right under West Virginia law to dissent from certain
corporate transactions and to elect dissenters' rights. See
"Proposed Merger - Rights of Dissenting Shareholders".
(i) Differences in Rights:
<PAGE> 47
There are, however, a number of differences between the
rights of Weirton shareholders and Wesbanco shareholders. For
example, Wesbanco's Bylaws require that shareholders who intend
to nominate candidates for election to the Board of Directors
must give written notice of such intent at least 30 days prior
to the date of any shareholders meeting called for such
purpose. Weirton's Bylaws do not require prior written notice
of shareholders nominations for directors.
The Directors of Wesbanco are elected for staggered terms
of three years, with no more than one-third of the Directors
being elected in any one year. The Directors of Weirton,
presently seven in number, are elected annually, each to serve
for a term of one year. In addition, Wesbanco may issue
preferred stock without approval of the stockholders which
could affect the voting rights, funds available for dividends,
redemption rights, conversion rights, or distribution of assets
to the holders of the common stock of Wesbanco. Weirton has no
class of preferred stock.
Furthermore, Wesbanco's Articles of Incorporation contain
certain "super majority provisions". These provisions provide
that the affirmative vote of the holders of not less than 75%
of the outstanding shares of the voting stock of the
corporation will be required to amend or repeal the Articles of
Incorporation provision dealing with the classification of the
Directors into
three separate classes, each to serve for staggered terms of
three years. Weirton's Articles of Incorporation require only
a majority vote of the shareholders to elect the directors of
the corporation.
(ii) Advantages of Wesbanco Anti-Takeover Provisions:
The provisions constitute defensive measures which are
designed in part, to discourage, and to insulate the
corporation against, hostile takeover efforts, which the
Wesbanco Board might determine are not in the best interests of
Wesbanco and its shareholders. The provisions are designed as
reasonable precautions to protect against, and to assure the
opportunity to assess and evaluate such confrontations.
(iii) Disadvantages of Wesbanco Anti-Takeover Provisions:
The classification of the Board makes it more difficult to
change Directors since they are elected for terms of three
years rather than one year, and at least two annual meetings
instead of one are required to change a majority of the Board.
Furthermore, due to the smaller number of Directors to be
elected at each annual meeting, holders of a minority of the
voting stock may be in a less favorable position to elect
Directors through the use of cumulative voting. The super
majority provision makes it more difficult for shareholders to
effect changes in the classification of Directors. The ability
of the Board of Directors to issue additional shares of common
and preferred stock also permits the Board to authorize
issuances of stock which may be dilutive and, in the case of
preferred stock, which may affect the substantive rights of
shareholders without requiring an additional shareholder vote.
Collectively, the provisions may be beneficial to management in
a hostile takeover attempt, making it more difficult to effect
changes, and at the same time, adversely affecting shareholders
who might wish to participate in such a takeover attempt.
<PAGE> 48
The foregoing identification of certain specific
differences between the rights of Wesbanco and Weirton
shareholders is not intended to indicate that other equally or
more significant differences do not exist. This summary is
qualified in its entirety by reference to the West Virginia
Corporations Act and the articles and bylaws referred to above.
<PAGE> 49
PRO FORMA DATA
Certain Information about the Unaudited
Pro forma Combined Financial Data
Notes to Pro forma Financial Information
The following unaudited pro forma combined balance sheet
as of March 31, 1996 and pro forma combined income statements
for the three months ended March 31, 1996 and 1995 and years
ended December 31, 1995, 1994 and 1993 are presented on the
following pages and include pro forma combined data for
WesBanco and the Bank of Weirton.
This acquisition will be accounted for using the pooling-
of-interests accounting method. Under this method of
accounting, the historical financial statements are combined
for all periods presented. WesBanco may obtain an opinion
from Ernst & Young LLP confirming the use of the pooling-of-
interests method. The unaudited pro forma statements were
prepared as if the combinations became effective on January 1
of the earliest year presented, January 1, 1993, and are for
informational purposes only. The pro forma financial
information should be read in conjunction
with the other financial information presented herein,
incorporated by reference and with the separate historical and
supplemental financial statements, including the notes thereto,
of each institution.
Expenses relating to the acquisition of Bank of Weirton
are estimated within a range of $140,000 to $160,000.
Notes to Pro forma Financial Information
- ----------------------------------------
An adjustment was made to the pro forma balance sheet
which represents the issuance of 1,690,000 shares of WesBanco
Common Stock at par value and the related transfer from capital
surplus. There were no intercompany transactions or adjustments
to the pro forma summary financial statements.
WesBanco has recently agreed to acquire Universal Mortgage
Company at a purchase price of approximately $800,000. The
purchase price will be paid in the form of WesBanco common stock
to be issued from Treasury shares. Pro forma financials for this
mortgage company have not been presented in this prospectus
since the corporation has net assets of $296,686 and net income
of $10,784, both of which are less than 1% of WesBanco's net
assets and net income. The acquisition will be accounted for
using the purchase accounting method. See "Future Aquisitions"
for Further information on this acquisition.
Per share information has been retroactively adjusted for
WesBanco's April 1993 two for one stock split and the July 1992
10% stock dividend.
Earnings per share was computed by dividing net income
less preferred dividends and accretion, where applicable, by
the weighted average number of shares outstanding during each
period.
<PAGE> 50
<TABLE>
<CAPTION>
WESBANCO, INC.
PRO FORMA BALANCE SHEET
March 31, 1996
(in thousands, Unaudited)
WESBANCO BANK OF PROFORMA PRO FORMA
ASSETS INC. WEIRTON ADJUSTMENTS COMBINED
---------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Cash and due from banks $48,186 $5,564 $53,750
Interest-bearing deposits 297 0 297
Federal funds sold 6,225 25,000 31,225
Investment securities 432,368 98,446 530,814
Loans (net of unearned 856,056 44,414 900,470
income)
Less: reserve for possible (13,186) (697) (13,883)
loan losses ---------- ----------- ------------ ---------
Loans - net 842,870 43,717 886,587
Bank premises and equipment 23,327 5,302 28,629
Other assets 26,792 2,327 29,119
---------- ----------- ----------- ----------
TOTAL ASSETS $1,380,065 $180,356 0 $1,560,421
===================================================
LIABILITIES
Deposits:
Non interest bearing $123,800 $17,805 $141,605
Interest bearing 994,308 123,617 1,117,925
----------- ---------- ------------ -----------
Total deposits 1,118,108 141,422 1,259,530
0
Short-term borrowings 74,799 0 74,799
Other liabilities 16,692 1,710 18,402
---------- --------- ------------- -----------
TOTAL LIABILITIES 1,209,599 143,132 1,352,731
---------- --------- ------------- -----------
SHAREHOLDERS' EQUITY
Preferred stock (no par value;
1,000,000 shares authorized) 0 0 0
Common stock ($2.0833 par
value; 25,000,000
shares authorized) 18,087 1,300 2,221 21,608
Capital surplus 25,758 7,700 (2,221) 31,237
Capital reserves 2,139 0 2,139
Retained earnings 132,091 28,224 160,315
Market value adjustment on
investments available
for sale - net of tax (725) 0 (725)
effect
Less: Treasury stock (5,719) 0 (5,719)
Deferred benefits for
directors and employees (1,165) 0 (1,165)
----------- --------- ------------ -----------
TOTAL SHAREHOLDERS' EQUITY 170,466 37,224 0 207,690
----------- --------- ------------ -----------
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY $1,380,065 $180,356 $0 $1,560,421
====================================================
</TABLE>
See Notes to Pro Forma Financial Information.
<PAGE> 51
<TABLE>
<CAPTION>
WESBANCO, INC.
PRO FORMA SUMMARY INCOME STATEMENT
(in thousands, except for share and per share amounts)
(Unaudited)
FOR THE THREE MONTHS ENDED FOR THE THREE MONTHS ENDED
March 31, 1996 March 31, 1995
--------------------------------------------- -------------------------------------------
WESBANCO, BANK OF PRO FORMA PRO FORMA WESBANCO, BANK OF PROFORMA PRO FORMA
INC. WEIRTON ADJUSTMENT COMBINED INC. WEIRTON ADJUSTMENTS COMBINED
--------- --------- ----------- --------- --------- -------- ---------- ----------
INTEREST INCOME:
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Interest and fees on loans $18,684 $840 $0 $19,524 $16,704 $664 $0 $17,368
Interest on investment
securities 6,020 1,359 0 7,379 6,610 1,454 0 8,064
Other interest income 244 329 0 573 298 372 0 670
--------- ------- ------------ --------- -------- -------- ---------- ---------
Total interest income 24,948 2,528 0 27,476 23,612 2,490 0 26,102
--------- ------- ------------ --------- -------- -------- ---------- ---------
INTEREST EXPENSE:
Interest on deposits 9,680 1,229 0 10,909 9,137 1,097 0 10,234
Other borrowings 901 0 0 901 746 0 0 746
-------- -------- ------------ -------- -------- -------- ---------- ---------
Total interest expense 10,581 1,229 0 11,810 9,883 1,097 0 10,980
-------- -------- ------------ -------- -------- -------- ---------- ---------
Net interest income 14,367 1,299 0 15,666 13,729 1,393 0 15,122
Provision for possible
loan losses 864 5 0 869 377 4 0 381
-------- -------- ------------ -------- -------- -------- ---------- ---------
Net interest income after provi-
sion for possible loan loss 13,503 1,294 0 14,797 13,352 1,389 0 14,741
Total other income 2,957 105 0 3,062 2,860 98 0 2,958
Total other expense 9,367 753 0 10,120 9,591 830 0 10,421
-------- -------- ------------ -------- -------- -------- ---------- ---------
Income before income tax 7,093 646 0 7,739 6,621 657 0 7,278
Provision for income tax 2,188 178 0 2,366 1,963 129 0 2,092
-------- -------- ------------ -------- -------- -------- ---------- ---------
Net Income $4,905 $468 $0 $5,373 $4,658 $528 0 $5,186
============================================= ==========================================
Earnings per share of common stock:
Net Income $0.58 $36.00 $0.53 $0.54 $40.68 $0.50
Average shares outstanding 8,480,550 13,000 10,170,550 8,509,521 13,000 10,199,521
Book value per share $20.12 $2,863.38 $20.44 $18.97 $2,770.77 $19.35
of common stock
</TABLE>
See Notes to Pro Forma Financial Information.
<PAGE> 52
<TABLE>
<CAPTION>
WESBANCO, INC.
PRO FORMA SUMMARY INCOME STATEMENT
FOR THE YEAR ENDED
December 31, 1995
(in thousands, except for share and per share amounts)
(Unaudited)
WESBANCO BANK OF PROFORMA PRO FORMA
INC. WEIRTON ADJUSTMENTS COMBINED
--------- --------- ------------- ----------
INTEREST INCOME:
<S> <C> <C> <C> <C>
Interest and fees on loans $71,399 $3,053 $0 $74,452
Interest on investment securities 25,357 5,781 0 31,138
Other interest income 1,143 1,349 0 2,492
--------- --------- ------------ ---------
Total interest income 97,899 10,183 0 108,082
--------- --------- ------------ ---------
INTEREST EXPENSE:
Interest on deposits 38,702 4,700 0 43,402
Other borrowings 3,168 0 0 3,168
--------- --------- ------------ ---------
Total interest expense 41,870 4,700 0 46,570
--------- --------- ------------ ---------
Net interest income 56,029 5,483 0 61,512
Provision for possible loan losses 2,770 18 0 2,788
--------- --------- ------------ ---------
Net interest income after provision
for possible loan losses 53,259 5,465 0 58,724
Total other income 11,098 269 0 11,367
Total other expense 38,988 3,143 0 42,131
--------- --------- ------------ ---------
Income before income taxes and effect
of the change in accounting for post-
retirement benefits 25,369 2,591 0 27,960
Provision for income taxes 7,180 476 7,656
--------- --------- ------------- --------
Net Income $18,189 $2,115 $0 $20,304
=============================================
Preferred stock dividends $164 $0 $164
and discount accretion
Earnings per share of common stock:
Net Income $2.13 $162.71 $1.98
Average shares outstanding 8,470,328 13,000 10,160,328
Book value per share of common stock $20.01 $2,482.84 $20.32
</TABLE>
See Notes to Pro Forma Financial Information.
<PAGE> 53
<TABLE>
<CAPTION>
WESBANCO, INC.
PRO FORMA SUMMARY INCOME STATEMENT
FOR THE YEAR ENDED
December 31, 1994
(in thousands, except for share and per share amounts)
(Unaudited)
WESBANCO, BANK OF PROFORMA PRO FORMA
INC. WEIRTON ADJUSTMENTS COMBINED
---------- ---------- ------------- ----------
INTEREST INCOME:
<S> <C> <C> <C> <C>
Interest and fees on loans $62,626 $2,280 $0 $64,906
Interest on investment securities 28,655 6,121 0 34,776
Other interest income 743 1,295 0 2,038
---------- ---------- ------------- ----------
Total interest income 92,024 9,696 0 101,720
---------- ---------- ------------- ----------
INTEREST EXPENSE:
Interest on deposits 33,671 4,032 0 37,703
Other borrowings 1,957 0 0 1,957
---------- ---------- ------------- ----------
Total interest expense 35,628 4,032 0 39,660
Net interest income 56,396 5,664 0 62,060
Provision for possible loan losses 6,055 18 0 6,073
---------- --------- -------------- ----------
Net interest income after
provision for possible 50,341 5,646 0 55,987
loan losses
Total other income 10,750 278 0 11,028
Total other expense 39,614 3,226 0 42,840
---------- --------- -------------- ----------
Income before provision for
income taxes 21,477 2,698 0 24,175
Provision for income taxes 5,780 503 0 6,283
---------- --------- -------------- ----------
Net Income $15,697 $2,195 $0 $17,892
========== ========== ============= ==========
Preferred stock dividends
and discount accretion $183 $0 $183
Earnings per share of common stock:
Net Income $1.81 $168.87 $1.72
Average shares outstanding 8,590,878 13,000 10,280,878
Book value per share of
common stock $18.41 $2,744.15 $18.85
</TABLE>
See Notes to Pro Forma Financial Information.
<PAGE> 54
<TABLE>
<CAPTION>
WESBANCO, INC.
PRO FORMA SUMMARY INCOME STATEMENT
FOR THE YEAR ENDED
December 31, 1993
(in thousands, except for share and per share amounts)
(Unaudited)
WESBANCO, BANK OF PROFORMA PRO FORMA
INC. WEIRTON ADJUSTMENTS COMBINED
------------ ----------- ------------ -----------
INTEREST INCOME:
<S> <C> <C> <C> <C>
Interest and fees on loans $63,716 $2,019 $0 $65,735
Interest on investment securities 31,094 6,264 0 37,358
Other interest income 847 1,328 0 2,175
---------- ----------- ------------- -----------
Total interest income 95,657 9,611 0 105,268
---------- ----------- ------------- -----------
INTEREST EXPENSE:
Interest on deposits 37,435 4,343 0 41,778
Other borrowings 1,948 0 0 1,948
---------- ----------- ------------- -----------
Total interest expense 39,383 4,343 0 43,726
---------- ----------- ------------- -----------
Net interest income 56,274 5,268 0 61,542
Provision for possible 3,229 18 0 3,247
loan losses ---------- ----------- ------------- -----------
Net interest income after provision
for possible loan losses 53,045 5,250 0 58,295
Total other income 10,095 272 0 10,367
Total other expense 38,711 3,162 0 41,873
---------- ----------- ------------- -----------
Income before provision
for income taxes 24,429 2,360 0 26,789
Provision for income taxes 6,587 484 0 7,071
---------- ----------- ------------- -----------
Net Income $17,842 $1,876 $0 $19,718
===================================================
Preferred stock dividends
and discount accretion $184 $0 $184
Earnings per share of common stock:
Net Income $2.04 $144.29 $1.88
Average shares outstanding 8,689,499 13,000 10,379,499
Book value per share of
common stock $18.16 $2,646.62 $18.52
</TABLE>
See Notes to Pro Forma Financial Information.
<PAGE> 55
COMPARATIVE PER SHARE DATA
(unaudited)
The following table sets forth for WesBanco and Bank of
Weirton certain historical per share financial information for
the three month periods ended March 31, 1996 and 1995 and the
years ended December 31, 1995, 1994 and 1993. The pro forma
equivalent per share information for each company is computed,
where applicable, using the WesBanco pro forma information and
the applicable exchange ratio of WesBanco Common Stock for each
share of the Bank of Weirton Common Stock. This information is
not necessarily an indicator of future operations and should be
read in conjunction with the historical, supplemental and
unaudited pro forma financial statements which are furnished
within this Prospectus or has been furnished separately. The
exchange ratio for each share of Bank of Weirton Common Stock
is 130 shares of WesBanco Common Stock. See "Pro Forma Data."
<TABLE>
<CAPTION>
For the three months
Ended March 31, Year Ended December 31,
--------------------- -------------------------
1996 1995 1995 1994 1993
WesBanco Common Stock ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C>
Net income per share
Historical $ .58 $ .54 $ 2.13 $ 1.81 $ 2.04
Pro forma .53 .50 1.98 1.72 1.88
Dividend per share
Historical .26 .23 .96 .86 .785
Book value per share
Historical 20.12 18.97 20.01 18.41 18.16
Pro forma 20.44 19.35 20.32 18.85 18.52
Bank of Weirton Common Stock
Net income per share
Historical $ 36.00 $ 40.68 $162.71 $168.87 $144.29
Pro forma equivalent 68.90 65.00 257.40 223.60 244.40
Dividend per share
Historical 15.50 14.00 64.00 62.00 60.00
Pro forma equivalent 33.80 29.90 124.80 111.80 102.05
Book value per share
Historical 2,863.38 2,770.77 2,842.85 2,744.15 2,646.62
Pro forma equivalent 2,657.20 2,515.50 2,641.60 2,450.50 2,407.60
</TABLE>
<PAGE> 56
INFORMATION WITH RESPECT TO WESBANCO
History
Wesbanco is a multi-bank holding company chartered under the
laws of the State of West Virginia. As of July 1, 1996,
Wesbanco had six banking affiliates located in Wheeling,
Parkersburg, Charleston, Fairmont and Kingwood in West Virginia
and Barnesville, Ohio. On a consolidated historical basis, as
of March, 31, 1996, Wesbanco had total assets of $1,380,000,000 net
loans of $842,870,000 deposits of $1,118,000,000 and shareholders
equity of $170,466,000. As of June 17, 1996, Wesbanco had
approximately 3,839 shareholders, and 8,469,574 shares of
common stock outstanding. Wesbanco has no preferred stock
issued and outstanding.
Wesbanco had been inactive since its incorporation in
1968, but was activated on December 31, 1976, and exchanged its
common stock on a share for share basis with the former holders
of common stock of Wheeling Dollar Savings & Trust Co. During
1984, Wesbanco acquired three financial institutions with
combined assets approximating $57,000,000 as of December 31,
1984. During 1985, Wesbanco acquired one financial institution
with assets as of December 31, 1985, of approximately
$41,000,000 and merged Wheeling Dollar Savings & Trust Co. with
the Citizens National Bank of Follansbee, which was one of the
banks acquired in 1984. The name of the resulting institution
was changed to Wheeling Dollar Bank. During 1987, Wesbanco
acquired four financial institutions with combined assets of
approximately $215,567,000. During 1988, Wesbanco acquired one
financial institution with assets as of the date of acquisition
of approximately $68,280,000. During 1991 Wesbanco acquired
one financial institution with assets as of the date of
acquisition of approximately $95,510,000. During 1992,
Wesbanco acquired two financial institutions, one with assets
of approximately $144,849,000 in assets, and one of
approximately $18,127,000 in assets, as of the dates of
acquisition. During 1994, Wesbanco acquired four banks, all
affiliates of First Fidelity Bancorp, Inc. with approximate
total assets of $309,911,000. Effective July 1, 1991, Wesbanco
changed the name of its affiliate banks to Wesbanco Bank plus
the name of the location of the Bank. Banks which have been
acquired subsequent to that date have likewise changed their
names.
Wesbanco is a decentralized banking operation, with
affiliates acting autonomously in day to day decisions. The
principal role of the holding company is to provide management,
leadership and access to specialized staff resources in areas
such as: asset/liability management, regulations, lending
policies, data processing, accounting, investment and
budgeting.
Dividends received from affiliates are Wesbanco's major
source of income. Dividend payments by the banking affiliates
depend primarily on their earnings and are limited by various
regulatory restrictions. On March 31, 1996, the affiliates,
without prior approval from the regulators, could have
distributed dividends of approximately $2,461,000.00. Wesbanco
has not issued debt securities as a source of funding for the
assets of the affiliate banks.
<PAGE> 57
Wesbanco has reported to its stockholders that it may
engage in other activities of a financial nature authorized by
the Board of Governors of the Federal Reserve System either
directly through a subsidiary or through acquisition of
established companies, though no specific proposals are
underway. As of March 31, 1996, neither the parent corporation
nor any of the subsidiaries were engaged in any operation in
foreign countries and have had no material transactions with
customers in foreign countries.
Future Acquisitions
Wesbanco continues to foster discussion with respect to
additional acquisitions of banks, thrifts and thrift and bank
holding companies. The tentative nature of such discussions,
however, makes it impossible to predict the number or size of
any future acquisitions.
WesBanco entered into an Agreement and Plan of
Reorganization dated May 30, 1996 (the "Agreement") with
Universal Mortgage Company ("Universal") pursuant to which a
wholly-owned subsidiary of WesBanco (WesBanco Mortgage Company)
will acquire the assets, goodwill and business of Universal in
exchange for WesBanco Common Stock and the assumption of certain
liabilities of Universal. The shares of WesBanco Common Stock to
be issued to Universal are covered by the Registration Statement
on Form S-4, of which this Proxy Statement/Prospectus is a part,
thereby permitting resale of such shares by Universal. The
number of shares to be issued to Universal will be determined by
dividing the closing price of WesBanco Common Stock (average for
last ten business days prior to closing) into $800,000, plus the
net book value of Universal in excess of $250,000. It is
estimated that the number of shares to be issued will be
approximately 30,000 shares.
Ernest F. Fragle, the Chief Executive Officer and sole
shareholder of Universal will, as a part of the transaction,
enter into an employment agreement with WesBanco and/or its
mortgage company subsidiary. In addition, the Agreement provides
that Mr. Fragale will be elected as an additional director of
WesBanco after consummation of the transaction with Universal.
The Agreement provides customary representations and warranties
regarding the operations of Universal and the accuracy and
completeness of those representations are a condition to the
closing by WesBanco. In addition to other customary conditions
to the closing, and a further review of the business of Universal
by WesBanco, the transaction is conditioned upon approval by the
Federal Reserve Board. Application for such approval was filed
on June 18, 1996.
Universal is a home loan mortgage lender with business
operations in Bridgeport, South Charleston, Huntington and
Elkins, West Virginia. Universal specializes in single-family
mortgage loans and offers Veterans Administration and Federal
Housing Administration home loans, as well as home buyer loans
facilitated through the West Virginia Housing Development Fund
which provides assistance for low to moderate income families.
For the calendar years ended December 31, 1995 and 1994,
Universal reported income (before taxes) of $10,784 and $71,067,
respectively. Revenues for Universal (arising principally from
interest and fee income on loans originated by Universal)
amounted to $895,960 for 1995
<PAGE> 58
and $1,183,460 for 1994, respectively. The year-end audited
financial statements of Universal at December 31, 1995 reflected
a net book value for Universal of approximately $296,686.
The Pro Forma Data included above in this Proxy
Statement/Prospectus does not reflect financial information for
the proposed transaction with Universal as the operations and
financial information for Universal are immaterial to that
presentation. The Acquisition of Universal by WesBanco will be
accounted for as a purchase.
Operations
Wesbanco, through its subsidiaries, conducts a general
banking, commercial and trust business. Its full service banks
offer, among other things, retail banking services, such as
demand, savings and time deposits; commercial, mortgage and
consumer installment loans; credit card services through VISA
and MasterCard; personal and corporate trust services; discount
brokerage services; and travel services. Most affiliates are
participating in or will be participating in local partnerships
which operate banking machines in those local regions under the
name of MAC. The banking machines are linked to CIRRUS, a
nationwide banking network.
The principal operations of Wesbanco are conducted at the
main offices of Wesbanco and Wesbanco Bank Wheeling located at
Bank Plaza, Wheeling, West Virginia. This facility was
constructed in 1976, and consists of a modern eight story glass
enclosed commercial building with a main lobby for banking
operations and an integral four-lane drive-in facility with
additional space for customer parking. The structure not only
provides office space for Wesbanco and Wesbanco Bank Wheeling,
but as well, certain additional commercial space which is
leased to various commercial enterprises.
Wesbanco Bank Wheeling (formerly Wheeling Dollar Bank), a
state bank corporation is the largest banking subsidiary of
Wesbanco and represents approximately 44.4% of the consolidated
assets and 42.2% of the consolidated net income as of March 31,
1996. It is a full service bank offering a wide range of
services to consumers, businesses and government bodies,
including but not limited to, checking and savings accounts,
certificates of deposit, consumer loans, mortgage loans,
commercial loans, personal and corporate trusts, data
processing and other banking services. The bank has
approximately 365 fulltime equivalent employees. The bank's
Trust Department is one of the largest in the State of West
Virginia and offers a wide range of services as Executor,
Trustee, Guardian and Agent. It serves as Transfer Agent and
Registrar for corporations and performs fiduciary services for
municipalities. Total market value of assets under management
in the Trust Department was approximately $1.4 billion as of
March 31, 1996. The Bank also operates ten branch offices,
three of which are located in Wheeling, two of which are
located in Follansbee, two in New Martinsville, one in Pine
Grove, one in Sistersville, and one in Wellsburg, West Virginia.
All branch offices of the bank also operate drive-in facilities.
Wesbanco Bank South Hills (formerly South Hills Bank) is a
state banking corporation located in Charleston, West Virginia.
The bank also provides general banking services similar
<PAGE> 59
to the services provided by Wesbanco Bank Wheeling. The bank operates
a drive-in facility which is located at its main banking
facility and a full service facility with drive-in lanes in
Sissonville. As of March 31, 1996, the bank had total assets of
approximately $95,225,000, deposits of approximately
$81,472,000 and 38 full time equivalent employees.
Wesbanco Bank Parkersburg (formerly Mountain State Bank)
is also a state banking corporation located in Parkersburg,
West Virginia. The bank also provides general banking and
trust services similar to the services provided by Wesbanco
Bank Wheeling. The bank also operates a drive-in facility which
is located at its main banking facility and two full service
branches which are located at Mineral Wells and Elizabeth, West
Virginia. As of March 31, 1996, the bank had approximately
$113,635,000 in assets, $100,389,000 in deposits, and 61 full
time equivalent employees.
Wesbanco Bank Kingwood is a West Virginia banking
corporation located in Kingwood, West Virginia. The bank also
provides general banking and trust services similar to the
services provided by Wesbanco Bank Wheeling. The bank operates
two full service branch offices at Masontown and Bruceton
Mills, West Virginia. As of March 31, 1996, the bank had
approximately $102,908,000 in assets and, $87,981,000 in
deposits, and 50 full time employees.
Wesbanco Bank Barnesville is an Ohio banking corporation
located in Barnesville, Ohio, the bank also provides general
banking and trust services similar to the services provided by
Wesbanco Bank Wheeling. The bank operates out of its principal
office located at 101 E. Main Street, Barnesville, Ohio, and
also operates branch facilities in Beallsville, Bethesda and
Woodsfield, Ohio. As of March 31, 1996, the bank had
approximately $139,988,000 in assets and $119,764,000 in
deposits, and 62 full time employees.
Wesbanco Bank Fairmont is a West Virginia banking
corporation located in Fairmont, West Virginia. The bank also
provides general banking and trust services. The bank operates
out of its principal office located at 301 Adams Street,
Fairmont, West Virginia, and also operates eleven branch
offices in Monongalia, Marion and Harrison Counties, in West
Virginia. As of March 31, 1996, the bank had approximately
$310,383,000 in assets and $252,771,000 in deposits and 174
full-time employees.
Competition
The 1980's was a period of significant legislative change
in West Virginia for banks and bank holding companies. Prior to
1982, West Virginia was a unit banking State and prohibited
multibank holding companies and branch banking. As a result of
legislation enacted in 1982, banks were permitted to establish a
limited number of branches by purchase, merger or consolidation
with another banking institution and to establish an additional
branch by the construction, lease or acquisition of branch
facilities in the unbanked areas within the county of its
principal office. In 1984, legislation further eased these
restrictions by removing the "unbanked area" limitation on county
wide branching effective June 7, 1984, and by providing for the
phased implementation of branch banking throughout the State
beginning in 1987, with unlimited branch banking after 1991.
<PAGE> 60
As a result of legislation adopted in the 1986 session of
the Legislature, West Virginia further eased or eliminated
restrictions on branch banking and joined the growing number of
states that permit interstate acquisitions of banks and bank
holding companies on a reciprocal basis. Specifically, the new
legislation permits West Virginia bank holding companies to
acquire banks and bank holding companies in other states and out
of-state bank holding companies to acquire West Virginia banks
or bank holding companies on a reciprocal basis; however, the
entry by out-of-state bank holding companies is permitted only
by the acquisition of an existing institution which has operated
in West Virginia for two years prior to acquisition. Similar
provisions were enacted to allow reciprocal interstate
acquisitions by thrift institutions such as savings and loan
holding companies, savings and loan associations, savings banks,
and building and loan associations.
The new legislation also accelerated the effective date of
state-wide unlimited branch banking from 1991 to January 1,
1987. Under the recent legislation, interstate banking
activities were delayed until January 1, 1988, in order to
permit West Virginia institutions one year to branch and make
other acquisitions statewide before the advent of interstate
banking. The recent legislation does not permit the chartering
and formation of de novo banks in West Virginia by out-of-state
bank holding companies nor does it permit West Virginia banks to
establish branch banks across state lines (either de novo or by
formation or merger).
The BHC Act was amended by the interstate banking
provisions of the Riegle-Neal Interstate Banking and Branching
Efficiency Act of 1994 (the "Interstate Banking Act"), which
became effective on September 29, 1995. The Interstate Banking
Act repealed the prior statutory restrictions on interstate
acquisitions of banks by bank holding companies, such that
Wesbanco and any other bank holding company located in West
Virginia or another state may now acquire a bank located in any
other state, and any bank holding company located outside West
Virginia may lawfully acquire any West Virginia-based bank,
regardless of state law to the contrary subject to certain
deposit-percentage, aging requirements, and other restrictions.
The Interstate Banking Act also generally provides that, after
June 1, 1997, national and state-chartered banks may branch
interstate through acquisitions of banks in other states. By
adopting legislation prior to that date, a state has the ability
either to "opt in" and accelerate the date after which
interstate branching is permissible or "opt out" and prohibit
interstate branching altogether.
West Virginia adopted comprehensive legislation on this
issue in 1996 with Senate Bill 280, signed by the Governor on
April 1, 1996, and which goes into effect ninety (90) days from
passage. The Bill conforms the interstate provisions of state
law with the mandatory requirements of the Interstate Banking
Act. Senate Bill 280 provides the full range of additional
interstate branching opportunities permitted by the Interstate
Banking Act, including de novo branching and interstate branch
acquisitions. The interstate branching sections of the Bill are
effective May 31, 1996. In addition, Senate Bill 280
revises elements of the law addressing the maximum level of
insured deposits which any affiliated group may control within
West Virginia. The new language defines the deposits included
in the calculation and precludes an acquisition transaction
which would result in the control of 25% or greater of such
deposits.
<PAGE> 61
Each bank faces strong competition for local business in
its respective market areas. Competition exists in efforts to
obtain new deposits, in the scope and types of services
offered, and the interest rates paid on time deposits and
charged on loans, and in other aspects of banking. Banks
encounter substantial competition not only from other
commercial banks but also from other financial institutions.
Savings banks, savings and loan associations, and credit unions
actively compete for deposits. Such institutions, as well as
consumer finance companies, brokerage firms, insurance
companies and other enterprises, are important competitors for
various types of business. In addition, personal and corporate
trust services and investment counseling services are offered
by insurance companies, investment counseling firms and other
business firms and individuals.
Principal Shareholders
To the best of management's knowledge, the Trust
Department of Wesbanco Bank Wheeling, Bank Plaza, Wheeling,
West Virginia, 26003, is the only holder or beneficial owner of
more than 5% of the common stock of the Corporation. As of
February 16, 1996, 849,869 shares of the common stock of the
Corporation, representing 10.02% of the shares outstanding,
were held in various capacities in the Trust Department. Of
these shares, the Bank does not have voting control of 192,448
shares, representing 2.27% of the shares outstanding, has
partial voting control of 29,707 shares, representing 0.35% of
the shares outstanding, and sole voting control of 627,714
shares, representing 7.40% of the shares outstanding. In
accordance with its general practice, shares of the common
stock of the Corporation over which the Bank has sole voting
control will be voted in accordance with the recommendations of
management. Shares over which the Bank has partial voting
control will be similarly voted if the Bank has the concurrence
of the co-fiduciary or co-fiduciaries.
The following table lists each stockholder known to
Wesbanco to be the beneficial owner of more than 5% of
Wesbanco's common stock as of February 16, 1996, as more fully
described above:
Name &
Address of Amount and Nature
Title Beneficial of Beneficial Percent
Class Owner Ownership of Class
- ------- ------------------- ------------------ ----------
Common Wesbanco Bank
Wheeling Trust Dept.
Bank Plaza
Wheeling, WV 26003 849,869* 10.02%
*Nature of beneficial ownership more fully described in text immediately
preceding table.
Holders of Wesbanco Common Stock will not experience a
change in the number of Wesbanco shares held by them as a
result of the Merger; however, their percentage ownership will
decrease. Based on stock ownership as of June 17, 1996, and
assuming a total of 10,166,572
<PAGE> 62
shares of Wesbanco Common Stock outstanding immediately
after the Merger, the Trust Department of Wesbanco
Bank Wheeling would own 8.35%, with sole voting and
investment power over 6.17%, and 0.29% with shared power.
Directors and Officers, as a group, would beneficially hold
7.46% or more of the outstanding common stock of Wesbanco. For
stock ownership of Wesbanco Directors and Officers see the
Wesbanco Proxy Statement for the Annual Meeting of Shareholders
for April 17, 1996, incorporated herein by reference and
delivered herewith. See "Incorporation of Certain Documents by
Reference."
Wesbanco KSOP
The Wesbanco Employee Stock Ownership and 401(k) Plan (the
"Plan") is a qualified non-contributory employee stock
ownership plan with a deferred savings plan feature under
Section 401(k) of the Internal Revenue Code. The employee
stock ownership feature of the Plan (the "ESOP") was adopted by
the Corporation on December 31, 1986, and subsequently amended
and restated effective January 1, 1996, to add 401(k) pre-tax
savings features (the "KSOP"). All employees of Wesbanco,
together with all employees of the subsidiary companies which
adopt the Plan, are eligible to participate in the Plan upon
completion of a year of service and attaining age 21. All
affiliate banks are participants in the Plan. The Plan is
administered by a Committee appointed by the Board of Directors
of the Corporation.
No contributions are made to the ESOP by the employees.
All contributions are made by the Corporation, and the amount
thereof is determined annually by the Board of Directors of the
Corporation. The Trustee of the ESOP Trust is authorized to
borrow funds upon terms and conditions not inconsistent with
Section 4975 of the Internal Revenue Code and the regulations
thereunder, for the purpose of purchasing stock of the
Corporation, from the Corporation or any shareholder. In the
event that such a loan is obtained, the employer contributions
must be made in an amount sufficient to amortize the loan.
Otherwise, employer contributions may be paid in the form of
cash or shares.
At the present time, the ESOP Trust holds 105,936 shares
of Wesbanco Common Stock. The ESOP Trustee has currently
outstanding $777,405.00 borrowed from an affiliated financial
institution. The loan originated in 1995 and is structured as
a revolving line of credit, and the unpaid balance is amortized
over a five-year period at an interest rate equal to the
lender's base rate. Wesbanco is required to make annual
payments to principal equal to 20% of the January 1st balance
each year. Any balance due at maturity will be paid in full or
refinanced. During 1995, the trust used proceeds of the loan to
purchase 5,000 shares at $25.75 per share. The ESOP Trustee
pledged the shares of employer securities purchased with the
proceeds of the loan as security for the loan. Wesbanco
guaranteed the loan issuing a contribution commitment letter.
As such securities are allocated to the accounts of
participating employees, and the loan balance paid down, they
will be released by the secured party.
Employer securities purchased with the proceeds of the
loan are placed in a suspense account and released, prorata,
from such suspense account under a formula which considers the
amount of principal and interest paid for a given period over
the amount of principal and interest anticipated to be paid for
that period and all future periods. Shares released from the
suspense
<PAGE> 63
account, employer contributions, if any, and
forfeitures are each allocated, prorata, subject to limits
imposed by the Code, to the accounts of individual participants
under a format which considers the amount of the participant's
compensation over the aggregate compensation of all
participants.
Participants become vested in their accounts upon
retirement, death or disability or upon completion of five
years of service from and after December 31, 1986, or, with
respect to affiliate banks, five years from the date of initial
participation. Distributions upon retirement, death or
disability are normally made in the form of substantially equal
annual installments over a period of 10 years commencing as
soon as practicable after such retirement, death or disability.
Distributions upon other separation from service are normally
made in the form of installments commencing upon the earlier
of the date the former employee attains age 65, his or her
death, or after a one year break in service. With the consent
of the Committee, distributions may be made in the form of a
lump sum. Participants may demand distributions in the form of
whole shares of employer securities. If demand is not timely
made, however, distributions may be made in cash.
The assets of the ESOP Trust will be invested and
accounted for primarily in shares of employer securities.
However, from time to time, the ESOP Trustee may hold assets in
other forms, either (i) as required for the proper
administration of the ESOP or (ii) as directed by participants
as set forth in Section 401(a)(28) of the Code.
During the year 1995, Wesbanco contributed a total of
$350,012 to the ESOP on behalf of its employees.
The following table sets forth, with respect to those
persons named in the Compensation Table, and for all executive
officers as a group, the number of shares of the Corporation's
common stock allocated to such individuals during 1995:
Value of
Name Shares Allocated Allocated Shares
- ---------------- ----------------- ----------------
Edward M. George 181 $ 5,074
Paul M. Limbert 166 $ 4,670
Dennis P. Yaeger 166 $ 4,669
Frank R. Kerekes 96 $ 2,707
Jerome B. Schmitt 140 $ 3,922
Officers of the 1,615 $ 45,220
Corporation (17 persons)
as a group
The KSOP feature of the Plan permits participants to
make pre-tax elective contributions through payroll
deductions in increments of 1% of compensation up to a
maximum of 15% of compensation, subject to certain maximum
dollar limitations imposed by the Internal Revenue Code (i.e.
for 1996 the maximum amount is $9,500.00). The Corporation
provides matching
<PAGE> 64
contributions on a quarterly basis subject to certain limitations.
The Corporation's matching contribution is 50% of the first 2%
of compensation electively deferred, and 25% of the next 2%
of compensation electively deferred. No matching contributions
are made by the Corporation for elective deferrals in excess of
4% of compensation.
Employees are 100% vested in all pre-tax elective
deferrals, or contributions, to the Plan and likewise are 100%
vested in all matching employer contributions. KSOP
contributions are invested by the employee selecting the
percentage of contributions to be invested among seven (7)
different investment funds.
No contributions were made under the KSOP feature by the
Corporation for calendar year 1995.
Changes in West Virginia Taxes
Recent West Virginia tax legislation, which was effective
July 1, 1987, greatly changed the way banks and bank holding
companies are taxed by the State. As of July 1, 1987, the
gross receipts-based Business and Occupation ("B & O") Tax was
repealed with regard to banking institutions and most other
entities engaging in business in West Virginia. In place of the
B & O Tax, the West Virginia Legislature broadened the
Corporation Net Income Tax ("CNIT") and enacted a new Business
Franchise Tax.
The most significant state tax law change with respect to
banks is that, for taxable period beginning after July 1, 1987,
banks must pay CNIT. Banks and other financial institutions
were exempt from the CNIT for taxable periods beginning prior
to July 1, 1987. The CNIT rate applied to West Virginia
taxable income was increased to 9.75% beginning July 1, 1987
(reduced by 0.15% annually for five successive years until it
reached 9% on July 1, 1992).
Also effective July 1, 1987, was the newly enacted
Business Franchise Tax, imposed on the capital of partnerships
and corporations at a rate of 0.55%. The Business Franchise Tax
provides a mechanism for certain exclusions and credits, such
as excluding from taxable capital certain obligations of the
United States and the State of West Virginia and certain
residential mortgage loans.
Directors and Executive Officers
The information with respect to directors and executive
officers of Wesbanco is set forth in the Wesbanco Annual Proxy
Statement for the Annual Meeting of Shareholders held on April
17, 1996, and is incorporated herein by reference. See
"Incorporation of Certain Documents by Reference".
<PAGE> 65
Executive Compensation
The information with respect to executive compensation is
set forth in the Wesbanco Annual Proxy Statement for the Annual
Meeting of Shareholders held on April 17, 1996, and is
incorporated herein by reference. See "Incorporation of
Certain Documents by Reference."
Certain Relationships and Related Transactions
The information with respect to certain relationships and
related transactions is set forth in the Wesbanco Annual Proxy
Statement for the Annual Meeting of Shareholders held on April
17, 1996, and is incorporated herein by reference. See
"Incorporation of Certain Documents by Reference".
<PAGE> 66
INFORMATION WITH RESPECT TO WEIRTON
History
Weirton is a state banking corporation with its principal
office and place of business located at 333 Penco Road,
Weirton, Hancock County, West Virginia. Weirton was organized
as a state banking corporation on June 16, 1911, and operated
for a number of years at a downtown location located on Main
Street until 1962 and then Pennsylvania Avenue, Weirton, West
Virginia. In 1988 Weirton moved to its new principal offices
located at 333 Penco Road where it continues to operate its
main office facility. Weirton acquired the Peoples Bank of
Weirton in 1984, the operations of which were then merged into
the operations of Weirton through the establishment of a branch
location on Main Street, in the City of Weirton.
Weirton operates a general banking business with a full
range of deposit and lending services to customers in its
primary market area. The markets in which it operates are
determined by the locations of its main facility and its branch
location on Main Street in the City of Weirton.
As of December 31, 1995, Weirton had a total of 39
employees, as compared with a total of 40 and 37 employees on
December 31, 1994 and 1993, respectively. Management does not
anticipate any material change in Weirton's work force prior to
the merger. The branch office is located at 3425 Main Street,
in the City of Weirton, Hancock County, West Virginia.
Banking Services
Weirton is a full-service commercial bank offering those
services associated with a bank, including demand and time
deposit accounts, drive-in banking, participation in a (MAC)
automated teller machine (ATM) network, individual and
commercial loans, consumer installment loans for home
improvement, automobiles, and other purposes. Although the
Bank of Weirton has "trust powers", trust services are not
currently offered.
All services offered are available to customers/consumers
at each office.
Deposits are insured by the Federal Deposit Insurance
Corporation to the extent provided by law.
Competition
Banking has been influenced locally by the branching and
restructuring activities of banks, savings and loan, credit
unions, and other non-bank competitors.
<PAGE> 67
Weirton is part of, and subject to, a highly competitive
atmosphere in its market area. Weirton ranks fourth in the
market in terms of total deposits among commercial banks and
thrifts. There are three other commercial bank operations with
branches, two savings bank operations with branches, four
credit unions, some with branches, and numerous consumer
finance companies in its market area.
On-going revisions in state and federal law, along with
reciprocal privileges, will continue to provide competitors the
opportunity to expand operations geographically.
Non-bank deposit takers and the advantage of less
extensive regulation provides the basis for significant
competitive activity and will continue to make difficult the
response to that form of competition.
Economic Conditions
Hancock and Brooke Counties, in which the City of Weirton
is located, are situated in the upper-most northern section of
the West Virginia Panhandle on the Ohio River between the
States of Ohio and Pennsylvania.
Weirton Steel Corporation is the largest commercial
employer in West Virginia and maintains its operations and
headquarters facilities in Weirton. This entity, founded in
1909, tends to stabilize economic conditions in the area.
Various satellite industries are located within the City at the
Half Moon Industrial Complex and plans are near fruition for
the development of an additional "business park" in the Weirton
Heights area.
Other entities and activities with both direct and
indirect economic development benefit to the Weirton area
include a progressive Weirton Medical Center and the proximity
of the Pittsburgh International Airport and their attendant
impact on business and residential development activity within
a wide radius.
The Weirton branch of the West Virginia Northern Community
College is actively pursuing its announced $3.5 million capital
improvement project and is playing an increasingly important
role in promoting a greater understanding and appreciation of
the events that fuel economic development in the Weirton
community.
Properties of Weirton
The principal offices of Weirton are located at 333 Penco
Road in the City of Weirton, Hancock County, West Virginia.
This facility consists of a 40,000 square foot 3-story brick
and glass building built by Weirton in 1988 on a parcel of real
estate consisting of approximately 3-1/2 acres. The facility
consists of a full service banking lobby, as well as office
space for the various other banking services offered by
Weirton. The facility contains six drive-in lanes and on-site
customer parking.
<PAGE> 68
Weirton also operates its branch facility, which is
located at 3425 Main Street in the City of Weirton, Hancock
County, West Virginia. The branch facility consists of a 1-
story brick building with approximately 14,000 square feet with
a full basement located on Main Street in downtown Weirton. It
has separate drive-in facilities with three drive-in lanes
available. The facility also offers on-site parking and a full
customer service lobby.
The two properties are both owned by the bank.
Monetary Policies
The commercial banking business is affected by the
monetary and fiscal policies of various regulatory agencies,
including the Federal Reserve Board. Among the techniques
available to the Federal Reserve Board are open market
purchases in United States Government securities; changing the
reserve requirements applicable to member bank deposits and to
certain borrowings by member banks and their affiliates; and
restricting dividends. These policies influence to a significant
extent the overall growth and distribution of bank loans, investments
and deposits and the interest rates paid on savings and time deposits.
The monetary policies of the Federal Reserve Board have had a
significant effect on the operating results of commercial banks
in the past and are expected to do so in the future. In view
of the changing conditions in the national economy, as well as
the effect of acts by monetary and fiscal authorities,
including the Federal Reserve Board, no predictions can be made
by Weirton as to future changes in interest rates, credit
availability, or deposit levels.
Legal Proceedings
There are no material legal proceedings against Weirton.
Weirton, by the nature of its business, may have legal actions
pending at any time to collect delinquent loan accounts;
however, these are ordinary and incidental to their business.
Principal Shareholders
The following table sets forth information regarding all
persons known by Weirton to be the beneficial owners of 5% or
more of Weirton Common Stock and information regarding the
ownership of Wesbanco Common Stock by such person after
consummation of the Merger as of March 31, 1996:
<PAGE> 69
<TABLE>
<CAPTION>
Pro Forma
Percent of
Amount and Nature Wesbanco
Name and Address of of Beneficial Percent of Common
Beneficial Owner Ownership Class Stock
- ------------------- ----------------- ----------- ------------
<S> <C> <C> <C>
Clyde Chalfant (1) 700 Shares 5.39% *
646 Ross Park Blvd.
Steubenville, OH 43952
Mary Peterson Chalfant (2) 1,040 Shares 8.00% 1.32%
646 Ross Park Blvd.
Steubenville, OH 43952
PNC-Pittsburgh Trust 2,393 Shares 18.40% 3.05%
Securities Department
5th & Wood Streets
Pittsburgh, PA 15265
(1) Father of R. Peterson Chalfant, a director.
(2) Wife of Clyde Chalfant and mother of R. Peterson Chalfant, a director.
* Represents less than one percent (1%).
Directors
The following is a listing of the names and ages of the
directors of Weirton and the year each individual began
continuous service as a director of Weirton. Also shown are
their principal occupations at present and during the past five
(5) years, as well as any other directorship of publicly traded
companies.
</TABLE>
<TABLE>
<CAPTION>
Name Age Principal Occupation Director Since
- ------------------- --- -------------------- --------------
<S> <C> <C> <C>
George M. Molnar 70 Chairman, President and Chief 1967
Executive Officer, Bank of Weirton
C.R. Cattrell 75 Retired, former President of Cattrell 1958
Motor Company
R. Peterson Chalfant 55 Lawyer, Partner, Chalfant, Henderson 1995
& Dondzila
</TABLE>
<PAGE> 70
<TABLE>
<CAPTION>
Name Age Principal Occupation Director Since
- -------------------- --- --------------------- --------------
<S> <C> <C> <C>
Donald R. Donell 66 President, Starvaggi Industries, Inc. 1979
Carl N. Frankovitch 48 Lawyer, Partner, Frankovitch & 1995
Anetakis
James White, Jr. 57 President, James White Construction 1984
Co.
James G. Thompson 40 Vice President and Secretary, 1994
Bank of Weirton
</TABLE>
Executive Officers
The following is a listing of the names and ages of the
executive officers of Weirton. Also shown is their business
experience during the past five years.
Name Age Business Experience
- ------------------ --- --------------------
George M. Molnar 70 Chairman, President and
Chief Executive Officer,
Bank of Weirton
James G. Thompson 40 Vice President, Secretary
Bank of Weirton
Robert F. Petrulovich 55 Cashier
Robert D. Bryant 51 Assistant Vice President,
Compliance Officer
Robert K. McGuffie 46 Assistant Vice President,
Branch Manager
Compensation of Executive Officers
- ----------------------------------
The following table sets forth the total compensation
paid by Weirton during the year 1995, to the five highest paid
executive officers, whose total compensation exceeded
$100,000.00, together with the benefits payable to them from
the Corporation's pension plan upon retirement.
<PAGE> 71
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
Long Term Compensation
--------------------------
Annual Compensation Awards Payouts
----------------------- --------------------------
Other
Annual Restricted Options All Other
Salary Bonus Comp. Stock SARS LTIP Compensation
Name and Position Year ($) ($) (1) Awards (#) Payouts ($)
- ----------------- ---- -------- ------- -------- ---------- ------- ------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
George M. Molnar 1995 200,000 100,000 5,000 0 0 0 0
Chairman, Presi- 1994 200,000 100,000 5,720 0 0 0 0
dent & Chief 1993 200,000 100,000 6,000 0 0 0 0
Executive Officer
</TABLE>
(1) "Other Annual Compensation" includes Board fees for
George M. Molnar for 1995, 1994 and 1993.
There was no other compensation paid to Mr. Molnar during 1995.
Pension Plan Benefits
- ----------------------
Weirton maintains a defined benefit pension plan for its
employees. Benefits under the plan are determined under the
plan's benefit formula, utilizing an average final
compensation method. Eligibility is age 65. The monthly
benefit is equal to 1/2 of: 1.25% of average final
compensation up to the integration level times service up to
35 years, plus 1.6% of average final compensation in excess of
the integration level times service up to 35 years plus
1.25% of average final compensation times service over 35 years.
The tax year ends December 31 of each year.
Pension Plan Benefits
Estimated Annual Benefits Upon Retirement to Persons in
Specified Remuneration and Years-of-Service Classifications
Remuneration 15 20 25 30 35
- ---------------------------------------------------------------
50,000 10,639 14,186 17,732 21,278 24,825
75,000 16,639 22,186 27,732 33,278 38,825
100,000 22,639 30,186 37,732 45,278 52,825
200,000 34,639 46,186 57,732 69,278 80,825
300,000 34,639 46,186 57,732 69,278 80,825
<PAGE> 72
Description of Bonus Plan
Annually, the Executive Committee of Weirton makes a
determination as to the amount and allocation among the
executive officers of Weirton of a bonus payable to such
officers. The amount and participants vary each year based on
an assessment of profitability and merit as determined by the
Committee. A total of $138,800.00 in cash was allocated and
paid for such bonuses for the year 1995.
Meetings of the Board of Directors and Compensation of Members
The Board of Directors of Weirton meets monthly and the
Executive Committee of Weirton meets on call. Fees paid for
attendance at Board meetings are $280.00, and $240.00 for
meetings of the Executive Committee. During 1995, the Board
held 12 meetings. Fees in the total amount of $28,960.00 were
paid to Directors for attendance at meetings of the Board of
Directors of Weirton and at meetings of all committees of
Weirton during the year 1995. Weirton does not have a standing
Compensation Committee. All Directors, except C. R. Cattrell,
attended at least 75% of the meetings of the Board.
Ownership of Securities by Directors and Officers
- -------------------------------------------------
The following table sets forth the number of shares of
Weirton's common stock beneficially owned by the directors and
officers of Weirton as a group as of July 1, 1996. There is
no other class of voting securities issued and outstanding.
Name of Sole Voting and Shared Voting and/or
Beneficial Owner Investment Authority Investment Authority Percent
- ----------------- --------------------- --------------------- -------
George M. Molnar 400 (1) --- 3.07%
C.R. Cattrell 70 (2) --- *
R. Peterson Chalfant 35 --- *
Donald R. Donell 320 627 (3) 7.28%
Carl N. Frankovitch 209 --- 1.60%
James White, Jr. 30 (4) 208 (5) *
James G. Thompson 8 --- *
All Directors and
Officers as a group
(7 persons) 1,072 835 14.66%
*Beneficial ownership does not exceed one percent (1%).
(1) Mr. Molnar's wife, Margaret A. Molnar, is the owner of an
additional 100 shares.
(2) Mr. Cattrell's wife, Dorothy V. Cattrell, is the owner of
an additional 100 shares.
(3) Mr. Donell is an officer and a director of Starvaggi
Industries which owns 627 shares.
(4) Mr. White's wife, Pauline S. White, is the owner of an
additional 10 shares.
<PAGE> 73
(5) Includes 118 shares owned by James White Construction Co.
of which Mr. White is an officer and director and in which he
has a substantial stock interest. Also includes 90 shares held
in the James White Construction Co. Profit Sharing Trust in which
Mr. White has a substantial interest.
Certain Relationships and Related Transactions
During 1995, Weirton had, and expects to have in the future,
banking transactions with officers and directors of Weirton, their
immediate families and entities in which they are principal owners
(more than 10% interest). The transactions were in the ordinary
course of business and on substantially the same terms, including
interest rates and security, as those prevailing at the same time
for comparable transactions with others and do not involve more than
the normal risk of collectibility or present other unfavorable
factors.
GOVERNMENT REGULATION
As a registered bank holding company, Wesbanco is subject
to the supervision of the Federal Reserve Board and is required
to file with the Federal Reserve Board reports and other information
regarding its business operations and the business operations
of its subsidiaries. Wesbanco is also subject to examination
by the Federal Reserve Board and required to obtain Federal
Reserve Board approval prior to acquiring, directly or
indirectly, ownership or control of voting shares of any bank,
if, after such acquisition, it would own or control more than
5% of the voting stock of such bank. In addition, pursuant to
federal law and regulations promulgated by the Federal Reserve
Board, Wesbanco may only engage in, or own or control companies
that engage in, activities deemed by the Federal Reserve Board
to be so closely related to banking as to be a proper incident
thereto. Prior to engaging in most new business activities,
Wesbanco must obtain approval from the Federal Reserve Board.
Both Wesbanco's banking subsidiaries and Weirton have
deposits insured by the Bank Insurance Fund ("BIF") of the
Federal Deposit Insurance Corporation (the "FDIC"), and are
subject to supervision, examination, and regulation by the
state banking authorities and either the FDIC or the Federal
Reserve Board. In addition to the impact of federal and state
supervision and regulation, the banking and non-banking
subsidiaries of Wesbanco and Weirton are affected significantly
by the actions of the Federal Reserve Board as it attempts to
control the money supply and credit availability in order to
influence the economy.
To the extent that the following information describes
statutory or regulatory provisions, it is qualified in its
entirety by reference to such statutory or regulatory
provisions.
Holding Company Structure
Both Wesbanco's depository institution subsidiaries and
Weirton are subject to affiliate transaction restrictions under
federal law which limit the transfer of funds by the subsidiary
banks to their respective parents and any nonbanking
subsidiaries, whether in the form of loans, extensions of
credit, investments or asset purchases. Such transfers by any
subsidiary bank to its
<PAGE> 74
parent corporation or to any nonbanking subsidiary are limited
in amount to 10% of the institution's capital and surplus and, with
respect to such parent and all such nonbanking subsidiaries, to an
aggregate of 20% of any such institution's capital and surplus.
Furthermore, such loans and extensions of credit are required to be
secured in specified amounts. Under applicable regulation, at March 31,
1996, approximately $6 million was available for loans to
Wesbanco from its subsidiary banks.
The Federal Reserve Board has a policy to the effect that
a bank holding company is expected to act as a source of
financial and managerial strength to each of its subsidiary
banks and to commit resources to support each such subsidiary
bank. Under the source of strength doctrine, the Federal
Reserve Board may require a bank holding company to make
capital injections into a troubled subsidiary bank, and may
charge the bank holding company with engaging in unsafe and
unsound practices for failure to commit resources to such a
subsidiary bank. This capital injection may be required at
times when Wesbanco may not have the resources to provide it.
Any capital loans by a holding company to any of the subsidiary
banks are subordinate in right of payment to deposits and to
certain other indebtedness of such subsidiary bank. Moreover,
in the event of a bank holding company's bankruptcy, any
commitment by such holding company to a federal bank regulatory
agency to maintain the capital of a subsidiary bank will be
assumed by the bankruptcy trustee and entitled to a priority of
payment.
In 1989, the United States Congress passed comprehensive
financial institutions legislation known as the Financial
Institution Reform, Recovery, and Enforcement Act ("FIRREA").
FIRREA established a new principle of liability on the part of
depository institutions insured by the FDIC for any losses
incurred by, or reasonably expected to be incurred by, the FDIC
after August 9, 1989, in connection with (i) the default of a
commonly controlled FDIC-insured depository institution, or
(ii) any assistance provided by the FDIC to a commonly
controlled FDICinsured depository institution in danger of
default. "Default"" is defined generally as the appointment of
a conservator or receiver and "in danger of default" is defined
generally as the existence of certain conditions indicating
that a "default" is likely to occur in the absence of
regulatory assistance. Accordingly, in the event that any
insured bank subsidiary of Wesbanco causes a loss to the FDIC,
other bank subsidiaries of that parent could be required to
compensate the FDIC by reimbursing to it the amount of such
loss.
Federal law permits the OCC to order the pro rata
assessment of shareholders of a national bank whose capital
stock has become impaired, by losses or otherwise to relieve a
deficiency in such national bank's capital stock. This statute
also provides for the enforcement of any such pro rata
assessment of shareholders of such national bank to cover such
impairment of capital stock by sale, to the extent necessary,
of the capital stock of any assessed shareholder failing to pay
the assessment. Similarly, the laws of certain states provide
for such assessment and sale with respect to the subsidiary
banks chartered by such states.
<PAGE> 75
Dividend Restrictions
There are statutory limits on the amount of dividends
Wesbanco's depository institution subsidiaries can pay to their
respective parent corporations without regulatory approval.
Under applicable federal regulations, appropriate bank
regulatory agency approval is required if the total of all
dividends declared by a bank in any calendar year exceeds the
available retained earnings and exceeds the aggregate of the
bank's net profits (as defined by regulatory agencies) for that
year and its retained net profits for the preceding two years,
less any required transfers to surplus or a fund for the
retirement of any preferred stock.
In addition, national banks may not pay a dividend in an
amount greater than such bank's net profits after deducting its
losses and bad debts. For this purpose, bad debts are defined
to include, generally, loans which have matured and are in
arrears with respect to interest by six months or more, other
than such loans which are well secured and in the process of
collection. Under these provisions and in accordance with the
above-described formula, Wesbanco's subsidiary banks could,
without regulatory approval, declare dividends as of March 31,
1996, of approximately $2,461,000 million.
If, in the opinion of the applicable regulatory authority,
a bank under its jurisdiction is engaged in or is about to
engage in an unsafe or unsound practice (which, depending on
the financial condition of the bank, could include the payment
of dividends), such authority may require, after notice and
hearing, that such bank cease and desist from such practice.
The Federal Reserve Board, the OCC and the FDIC have issued
policy statements which provide that insured banks and bank
holding companies should generally only pay dividends out of
current operating earnings.
FDIC Insurance
Pursuant to FDICIA, the FDIC adopted a risk based
assessment system for insured depository institutions that
takes into account risks attributable to different categories
and concentrations of assets and liabilities. An institution
is assigned by the FDIC into one of three capital categories:
1 well capitalized; 2 - adequately capitalized; 3
undercapitalized. An institution is also assigned to one of
three supervisory subgroups within each capital group. The
supervisory subgroup is based on a supervisory evaluation
provided by the primary federal regulator. An institution
insurance assessment rate is then determined based upon capital
and the supervisory category to which it is assigned.
Under this risk based assessment system, there are nine
assessment risk categories to which different assessment rates
are applied. Assessment rates for the first half of 1995
ranged from .23% of deposits for institutions in the well capitalized
category to .31% of deposits for institutions that are
undercapitalized.
The Federal Deposit Insurance Act required the Bank
Insurance Fund to be recapitalized until the reserves reached a
designated ratio of at least 1.25% of deposits. That ratio was met
<PAGE> 76
during May 1995. In August 1995, the FDIC reduced the
assessment rates for financial institutions which are subject
to the requirements of the Bank Insurance Fund. Under the
revised assessment schedule which was effective June 1, 1995,
financial institutions pay assessments ranging from .04% of
deposits to .31% of deposits, with an average assessment rate
of .045%. Subsequently, on November 14, 1995, annual
assessments were again reduced to the legal minimum of $2,000
per year for all banking institutions except those that were
not well capitalized and were assigned to the higher
supervisory risk category. Both Wesbanco and Weirton are
considered to be in the well capitalized category requiring the
minimum legal annual assessments as required by the FDIC.
The FDIC recognizes that the disparity may have adverse
consequences for such institutions in the higher risk
categories including reduced earnings and impaired ability to
raise funds on the capital markets and to attract deposits. It
is not currently known whether institutions that are required
to pay insurance premiums will be required to pay higher
deposit insurance premiums in the future. It is impossible to
predict whether future regulations will be enacted or if
enactment will require financial institutions to contribute to
the Savings Association Insurance Fund or if these regulations
may require additional payments by Wesbanco into the Bank
Insurance Fund.
Capital Requirements
The Federal Reserve Board has issued risk-based capital
guidelines for bank holding companies, such as Wesbanco. The
guidelines establish a systematic analytical framework that
makes regulatory capital requirements more sensitive to
differences in risk profiles among banking organizations, takes
off-balance sheet exposures into explicit account in assessing
capital adequacy, and minimizes disincentives to holding
liquid, low-risk assets. Under the guidelines and related
policies, bank holding companies must maintain capital
sufficient to meet both a riskbased asset ratio test and
leverage ratio test on a consolidated basis. The risk-based
ratio is determined by allocating assets and specified off-
balance sheet commitments into four weighted
categories, with higher levels of capital being required for
categories perceived as representing greater risk. The
leverage ratio is determined by relating core capital (as
described below) to total assets adjusted as specified in the
guidelines. All of Wesbanco's depository institution
subsidiaries are subject to substantially similar capital
requirements adopted by applicable regulatory agencies.
Generally, under the applicable guidelines, the financial
institution's capital is divided into two tiers. "Tier 1", or
core capital, includes common equity, noncumulative perpetual
preferred stock (excluding auction rate issues) and minority
interests in equity accounts of consolidated subsidiaries, less
goodwill. Bank holding companies, however, may include
cumulative perpetual preferred stock in their Tier 1 capital,
up to a limit of 25% of such Tier 1 capital. "Tier 2", or
supplementary capital, includes, among other things, cumulative
and limited-life preferred stock, hybrid capital instruments,
mandatory convertible securities, qualifying subordinated debt,
and the allowance for loan losses, subject to certain
limitations, less required deductions. "Total capital" is the
sum of Tier 1 and Tier 2 capital.
<PAGE> 77
Financial institutions are required to maintain a risk-
based ratio of 8%, of which 4% must be Tier 1 capital. The
appropriate regulatory authority may set higher capital
requirements when an institution's particular circumstances
warrant.
Financial institutions that meet certain specified
criteria, including excellent asset quality, high liquidity,
low interest rate exposure and the highest regulatory rating,
are required to maintain a minimum leverage ratio of 3%.
Financial institutions not meeting these criteria are required
to maintain a leverage ratio which exceeds 3% by a cushion of
at least 100 to 200 basis points.
The guidelines also provide that financial institutions
experiencing internal growth or making acquisitions will be
expected to maintain strong capital positions substantially
above the minimum supervisory levels, without significant
reliance on intangible assets. Furthermore, the Federal
Reserve Board's guidelines indicate that the Federal Reserve
Board will continue to consider a "tangible Tier 1 leverage
ratio" in evaluating proposals for expansion or new activities.
The tangible Tier 1 leverage ratio is the ratio of an
institution's Tier 1 capital, less all intangibles, to total
assets, less all intangibles.
Failure to meet applicable capital guidelines could
subject the financial institution to a variety of enforcement
remedies available to the federal regulatory authorities,
including limitations on the ability to pay dividends, the
issuance by the regulatory authority of a capital directive to
increase capital and the termination of deposit insurance by
the FDIC, as well as to the measures described under "Federal
Deposit Insurance Corporation Improvement Act of 1991" as
applicable to undercapitalized institutions.
As of March 31, 1996, the Tier 1 risk-based ratio, total
risk-based ratio and total assets leverage ratio for Wesbanco
and Weirton were as follows:
Regulatory Wesbanco
Requirements Historical Pro Forma(1) Weirton
------------ ------------------------- --------
Tier 1 Risk-Based
Ratio 4% 18.4% 21.2% 77.4%
Total Risk-Based
Ratio 8% 19.6% 22.5% 78.6%
Total Assets
Leverage Ratio 3% 12.4% 13.4% 20.9%
__________________
(1) Includes Wesbanco and Weirton on a pro forma combined
basis as of March 31, 1996.
As of March 31, 1996, all of Wesbanco's banking subsidiaries and
Weirton had capital in excess of all applicable requirements.
<PAGE> 78
The Federal Reserve Board, as well as the FDIC and the OCC
have adopted changes to their risk-based and leverage ratio
requirements that require that all intangible assets, with
certain exceptions, be deducted from Tier 1 capital. Under the
Federal Reserve Board's rules, the only types of intangible
assets that may be included in (i.e., not deducted from) a bank
holding company's capital are readily marketable purchased
mortgage servicing rights ("PMSRs") and purchased credit card
relationships ("PCCRs"), provided that, in the aggregate, the
total amount of PMSRs and PCCRs included in capital does not
exceed 50% of Tier 1 capital. PCCRs are subject to a separate
sublimit of 25% of Tier 1 capital. The amount of PMSRs and
PCCRs that a bank holding company may include in its capital is
limited to the lesser of (i) 90% of such assets' fair market
value (as determined under the guidelines), or (ii) 100% of
such assets' book value, each determined quarterly.
Identifiable intangible assets (i.e., intangible assets other
than goodwill) other than PMSRs and PCCRs, including core
deposit intangibles, acquired on or before February 19, 1992
(the date the Federal Reserve Board issued its original
proposal for public comment), generally will not be deducted
from capital for supervisory purposes, although they will
continue to be deducted for purposes of evaluating applications
filed by bank holding companies. These revisions became
effective for periods commencing after March 15, 1993, and are
reflected in Wesbanco's and Weirton's capital ratios as of
March 31, 1996.
Federal Deposit Insurance Corporation Improvement Act of 1991
In December 1991, Congress enacted the Federal Deposit
Insurance Corporation Improvement Act of 1991 ("FDICIA"), which
substantially revises the bank regulatory and funding
provisions of the Federal Deposit Insurance Act and makes
revisions to several other federal banking statutes.
Among other things, FDICIA requires federal bank
regulatory authorities to take "prompt corrective action" with
respect to depository institutions that do not meet minimum
capital requirements. For these purposes, FDICIA establishes
five capital tiers: well capitalized, adequately capitalized,
undercapitalized, significantly undercapitalized and critically
under capitalized.
The regulatory authorities have adopted regulations to
implement the prompt corrective action provisions of FDICIA.
Among other things, the regulations define the relevant capital
measures for the five capital categories. An institution is
deemed to be "well capitalized" if it has a total risk-based
capital ratio of 10% or greater, a Tier 1 risk-based capital
ratio of 6% or greater and a Tier 1 leverage ratio of 5% or
greater and is not subject to a regulatory order, agreement or
directive to meet and maintain a specific capital level for any
capital measure. An institution is deemed to be "adequately
capitalized" if it has a total risk-based capital ratio of 8%
or greater, a Tier 1 risk-based capital ratio of 4% or greater
and, generally, a Tier 1 leverage ratio of 4% or greater and
the institution does not meet the definition of a "well
capitalized" institution. An institution that does not meet
one or more of the "adequately capitalized" tests is deemed to
be "undercapitalized". If the institution has a total risk-
based capital ratio that is less than 6% , a Tier 1 risk-based
capital ratio that is less than 3%, or a leverage ratio that is
less than 3%, it is deemed to be "significantly
undercapitalized". Finally, an institution is deemed to be
<PAGE> 79
"critically undercapitalized" if it has a ratio of tangible
equity (as defined in the regulations) to total assets that is
equal to or less than 2%.
"Undercapitalized" institutions are subject to growth
limitations and are required to submit a capital restoration
plan. If an "undercapitalized" institution fails to submit an
acceptable plan, it is treated as if it is significantly
undercapitalized. "Significantly undercapitalized"
institutions may be subject to a number of requirements and
restrictions, including orders to sell sufficient voting stock
to become adequately capitalized, requirements to reduce total
assets and cessation of receipt of deposits from correspondent
banks. "Critically undercapitalized" institutions may not,
beginning 60 days after becoming "critically undercapitalized"
make any payment of principal or interest on their subordinated
debt. In addition, "critically undercapitalized" institutions
are subject to appointment of a receiver or conservator.
Under FDICIA, a depository institution that is not "well
capitalized" is generally prohibited from accepting brokered
deposits and offering interest rates on deposits higher than
the prevailing rate in its market. All of Wesbanco's
depository institution subsidiaries and Weirton currently meet
the FDIC's definition of a "well capitalized" institution for
purposes of accepting brokered deposits. For the purposes of
the brokered deposit rules, a bank is defined to be "well
capitalized" if it maintains a ratio of Tier 1 capital to risk-
adjusted assets of at least 6%, a ratio of total capital to
risk-adjusted assets of at least 10% and a Tier 1 leverage
ratio of at least 5% and is not otherwise in a "troubled
condition" as specified by its appropriate federal regulatory
agency. On October 25, 1993, the FDIC published a final rule
providing for purposes of its brokered deposit rules the
definitions of "well capitalized", "adequately capitalized" and
"undercapitalized" as previously adopted by the bank regulatory
agencies under the prompt corrective action rules described
above. Neither Wesbanco nor Weirton believes that adoption of
the definition of capital levels under the prompt corrective
action rules will adversely affect their ability to accept
brokered deposits. Neither Wesbanco nor Weirton have any
significant brokered deposits.
The Federal Deposit Insurance Act, as amended by FDICIA
and the Riegle Community Development and Regulatory Improvement
Act of 1994, requires the federal bank regulatory agencies to
prescribe standards, by regulations or guidelines, relating to
internal controls, information systems and internal audit
systems, loan documentation, credit underwriting, interest rate
risk exposure, asset growth, asset quality, earnings, stock
valuation and compensation, fees and benefits and such other
operational and managerial standards as the agencies deem
appropriate. The federal bank regulatory agencies have
adopted, effective August 9, 1995, a set of guidelines
prescribing safety and soundness standards pursuant to FDICIA,
as amended. The guidelines establish general standards
relating to internal controls and information systems, internal
audit systems, loan documentation, credit underwriting, interest
rate exposure, asset growth and compensation, fees and benefits.
In general, the guidelines require, among other things, appropriate
systems and practices to identify and manage the risks and exposures
specified in the guidelines. The guidelines prohibit excessive
compensation as an unsafe and unsound practice and describe
compensation as excessive when the amounts paid are
unreasonable or disproportionate to the services performed by
an executive officer, employee,
<PAGE> 80
director or principal shareholders. The federal banking agencies
determined that stock valuation standards were not appropriate. In
addition, the agencies adopted regulations that authorize, but do not
require, an agency to order an institution that has been given
notice by an agency that it is not satisfying any of such
safety and soundness standards to submit a compliance plan.
If, after being so notified, an institution fails to submit an
acceptable compliance plan or fails in any material respect to
implement an accepted compliance plan, the agency must issue an
order directing action to correct the deficiency and may issue
an order directing other actions of the types to which an
undercapitalized association is subject under the "prompt
correction action" provisions of FDICIA. If an institution
fails to comply with such an order, the agency may seek to
enforce such order in judicial proceedings and to impose civil
money penalties. The federal bank regulatory agencies also
proposed guidelines for asset quality and earnings standards.
FDICIA also contains a variety of other provisions that
may affect the operations of Wesbanco's depository institution
subsidiaries and Weirton, including new reporting requirements,
revised regulatory standards for real estate lending, "truth in
savings" provisions and the requirements that a depository
institution give 90 days' prior notice to customers and
regulatory authorities before closing any branch.
In addition to FDICIA, there have been proposed a number
of legislative and regulatory proposals designed to strengthen
the federal deposit insurance system and to improve the overall
financial stability of the United States banking system. These
include proposals to increase capital requirements above
presently published guidelines, to place assessments on
depository institutions to increase funds available to the FDIC
and to allow national banks to branch on an interstate basis.
It is impossible to predict whether or in what form these
proposals may be adopted in the future and, if adopted, what
their effect would be on Wesbanco. It is likewise impossible
to predict what the competitive effect on Wesbanco's subsidiaries or
Weirton will be of the recent action taken by the Office of Thrift
Supervision to allow certain thrift institutions to engage in interstate
branching on a nationwide basis.
Environmental Issues
As lenders, banks can be potentially liable under the
Comprehensive Environmental Response, Compensation, and
Liability Act (CERCLA), 42 U.S.C. 9601 et seq., for cleanup of
hazardous substances from property on which the bank forecloses
or in which it has a security interest. CERCLA imposes
liability for removal and remediation of hazardous substances
on various types of parties, including "owners or operators" of
a contaminated site. See 42 U.S.C. 9607(a). In the definition
of "owners or operators," CERCLA exempts from liability those
who, without participating in the management of a facility,
hold indicia of ownership in the facility primarily to protect
a security interest. See 42 U.S.C. 9601(2)(A). However,
CERCLA's secured creditor exemption from liability has been
narrowed by recent judicial interpretation. In a recent decision,
the United States Court of Appeals for the Eleventh Circuit held that
a lender could be liable for cleanup costs if its involvement in
the financial management of the facility was broad enough to
support an inference that it could have affected hazardous
waste disposal decisions. See United States v. Fleet Factors
Corp., 901 F.2d 1550 (11th Cir. 1990), cert. denied, 111 S.Ct.
752 (1991). A federal district court had earlier held that
CERCLA's secured creditor
<PAGE> 81
exemption did not insulate from liability a mortgagee that had
foreclosed and later acquired secured property. See United States v.
Maryland Bank & Trust Co., 632 F. Supp. 573 (D. Md. 1986). More recently,
however, the Ninth Circuit rejected the "capacity to influence" test of
Fleet Factors and held that the mere unexercised power of a
lender to get involved in a borrower's management was not
enough to impose CERCLA liability on a secured lender. See
Bergsoe Metal v. East Asiatic Co., 910 F.2d 668 (9th Cir.
1990). The United States Court of Appeals for the Fourth
Circuit, which has jurisdiction over Wesbanco, has also
recently confirmed a lender exemption from liability under
CERCLA pursuant to the security interest exemption. See United
States v. McLamb, 5 F.3d 69 (4th Cir. 1993), as amended
(October 18, 1993). The Court opined that because the lender
took title to property at a foreclosure sale solely to protect
its security interest and then acted reasonably promptly to
divest itself of ownership, it met CERCLA's secured creditor
exemption. Id. at 73. Wesbanco does attempt to screen loan
applicants concerning environmental matters with respect to
collateral pledged to it as security for loans. Wesbanco is not
aware of any specific collateral pledged to it on which there
are hazardous materials or potential liability under CERCLA.
However, there can be no assurances that liability under CERCLA
or otherwise for cleanup of hazardous materials will not occur
in the future. In the event that such liability occurs, it
could have a material adverse effect on the financial position
and results of operations of Wesbanco.
<PAGE> 82
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents or portions thereof filed by Wesbanco with
the Commission under the Securities Exchange Act of 1934(the "1934" Act)
are hereby incorporated by reference in this Proxy Statement/Prospectus:
Wesbanco Documents (Commission File No. 0-8467)
(1) Pages 8 through 33 of the Wesbanco Annual Report to
Shareholders for the year ended December 31, 1995.*
(2) Wesbanco Proxy Statement for the annual meeting of
shareholders held on April 17, 1996.*
(3) Wesbanco Annual Report on Form 10-K for the year ended
December 31, 1995.*
(4) Wesbanc's Quarterly Reports on Form 10-Q for the
quarterly period ended March 31, 1996.
(5) Wesbanco's Current Report on Form 8-K dated February 20,
1996.
(6) Wesbanco's Current Report on Form 8-K dated April 10, 1996.
(7) Wesbanco's Current Report on Form 8-K dated June 5, 1996.
All documents filed by Wesbanco pursuant to Section 13(a), 13(c), 14 or
15(d) of the 1934 Act subsequent to the date hereof and prior to the Special
Meeting are hereby incorporated by reference into this Joint Proxy Statement/
Prospectus and shall be deemed a part hereof from the date of filing of such
documents.
Any statement contained in a document incorporated by reference herein
shall be deemed to be modified or superseded for the purposes hereof to the
extent that a statement contained herein (or in any other subsequently filed
document which also is incorporated by reference herein) modifies or supersedes
such statement. Any statement so modified or supereded shall not be deemed to
constitue a part hereof except as so modified or superseded.
* Indicates the document is being delivered with this Proxyt Statement/
Prospectus.
<PAGE> 83
RELATIONSHIP WITH INDEPENDENT ACCOUNTANTS
The Board of Directors of Wesbanco, Inc. has retained
Ernst & Young LLP to serve as the corporation's independent
accountants for the year 1996. Price Waterhouse LLP served as
the corporation's independent accountants for the year 1995.
The services rendered by Price Waterhouse LLP during the year
1995 involved primarily auditing and accounting service and
completion of the audit of the consolidated financial
statements of the corporation for the year 1995. It is
expected that a representative of the accounting firms will
have the opportunity to make a statement if such
representatives desire to do so and will be available to
respond to appropriate questions from the stockholders who are
present at the Special Meeting.
The firm of Grant Thornton LLP, independent certified
public accountants, audited the financial statements of Weirton
for the year ended December 31, 1995. A representative of
Grant Thornton will attend the special meeting and will be
available to answer questions.
LEGAL MATTERS
Certain matters will be passed upon for Wesbanco by its
counsel, Phillips, Gardill, Kaiser & Altmeyer, 61 Fourteenth
Street, Wheeling, WV, 26003. As of December 31, 1995, the
members of Phillips, Gardill, Kaiser & Altmeyer participating
in the preparation of this Proxy Statement/Prospectus owned an
aggregate of 30,802 shares of Wesbanco Common Stock. James C.
Gardill, a partner in said firm, serves as Chairman and as a
director of Wesbanco, and as a director of its subsidiary,
Wesbanco Bank Wheeling. Certain matters will be passed upon
for Weirton by its counsel, Carl N. Frankovitch, Esq., 337
Penco Road, Weirton, WV, 26062.
EXPERTS
The consolidated financial statements of Wesbanco, Inc.
incorporated in this Prospectus by reference to the Annual
Report on Form 10-K for the year ended December 31, 1995, have
been so incorporated in reliance on the report of Price
Waterhouse LLP, independent accountants, given on the authority
of said firm as experts in auditing and accounting. The
financial statements of Bank of Weirton as of and for the year
ended December 31, 1995, included in this Prospectus, have been
so included in reliance on the report of Grant Thornton LLP,
independent accountants, given on the authority of said firm as
experts in auditing and
accounting.
LEGAL PROCEEDINGS
Wesbanco and its subsidiaries are defendants in various
legal proceedings arising in the normal course of business.
In the opinion of management, based on the advice of legal
counsel, the ultimate resolution of these proceedings will not
have a material effect on the financial position of Wesbanco
or its subsidiaries.
<PAGE> 84
INDEX TO FINANCIAL STATEMENTS
Page
Number
------
WESBANCO, INC.
Consolidated Statement of Condition for March 31, 1996
(unaudited) and December 31, 1995 87
Consolidated Income Statement for the three months ending
March 31, 1996 and 1995 (unaudited) 88
Consolidated Statement of Changes in Shareholders' Equity
for the three months ending March 31, 1996 and 1995
(unaudited) 89
Consolidated Statement of Cash Flows for the three months
ending March 31, 1996 and 1995 (unaudited) 90
Notes to Consolidated Financial Statements as of March 31,
1996 (unaudited) 91
Management Discussion and Analysis for the three months
ending March 31, 1996 (unaudited) 93
BANK OF WEIRTON
Statement of Condition for March 31, 1996 and 1995
(unaudited) 100
Statement of Income for the three months ended March 31,
1996 and 1995 (unaudited) 101
Statement of Changes in Stockholders' Equity for the three
months ended March 31, 1996 and 1995 (unaudited) 102
Statement of Cash Flows for the three months ended March 31,
1996 and 1995 (unaudited) 103
Notes to Financial Statements as of March 31, 1996
(unaudited) 104
Management Discussion and Analysis of Financial Condition
and Results of Operations for the three months ended March
31, 1996 and 1995 (unaudited) 105
<PAGE> 85
Page
Number
------
Report of Independent Certified Public Accountant 108
Statement of Condition for December 31, 1994 and 1995* 109
Statement of Income for the years ended December 31, 1993,
1994 and 1995* 110
Statement of Changes in Shareholders' Equity for the years
ended December 31, 1993, 1994 and 1995* 111
Statement of Cash Flows for the years ended December 31,
1993, 1994 and 1995* 112
Notes to Financial Statements as of December 31, 1993,
1994, and 1995* 113
Management's Discussion and Analysis of Financial Condition
and Results of Operations for the three year period ended
December 31, 1995 126
* Financial information for the years 1993 and 1994 are
unaudited.
<PAGE> 86
WESBANCO FINANCIAL INFORMATION
- ------------------------------
Consolidated Balance Sheets at March 31, 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 three months ended March 31, 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 three months
ended March 31, 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 and WesBanco, Inc.'s Annual Report on Form 10-K for the
year ended December 31, 1995.
Earnings per share for the three months ended March 31, 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 three months ended March 31, 1995 was
less than 3%.
<PAGE> 87
WESBANCO, INC.
CONSOLIDATED BALANCE SHEET
(dollars in thousands)
March 31, December 31,
1996 1995
------------ ----------
(Unaudited)
ASSETS
Cash and due from banks $ 48,186 $ 49,008
Due from banks - interest bearing 297 301
Federal funds sold 6,225 14,230
Investment securities (Note 1) 432,368 423,153
Loans-net (Notes 2 and 3) 842,870 837,821
Bank premises and equipment - net 23,327 23,026
Accrued interest receivable 11,898 11,020
Other assets 14,894 13,234
---------- ---------
TOTAL ASSETS $1,380,065 $1,371,793
========== ==========
LIABILITIES
Deposits:
Non-interest bearing demand $ 123,800 $ 127,168
Interest bearing demand 246,931 252,950
Savings deposits 279,053 278,821
Certificates of deposit 468,324 456,534
--------- --------
Total deposits 1,118,108 1,115,473
Federal funds purchased and repurchase
agreements 67,837 70,457
Short-term borrowings 6,962 1,402
Dividends payable 2,204 2,126
Accrued interest payable 6,256 6,744
Other liabilities 8,232 5,551
--------- --------
TOTAL LIABILITIES 1,209,599 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 investments
available for sale - net of tax effect (725) 849
Retained earnings 134,230 131,527
Less: Treasury stock at cost (211,031
and 186,131 shares, respectively) (5,719) (5,038)
-------- -------
171,631 171,183
Deferred benefits for employees and directors (1,165) (1,143)
-------- --------
TOTAL SHAREHOLDERS' EQUITY 170,466 170,040
-------- --------
TOTAL LIABILITIES AND SHAREHOLDERS'
EQUITY $1,380,065 $1,371,793
========== ==========
The accompanying Notes to Consolidated Financial Statements are
an integral part of these financial statements.
<PAGE> 88
WESBANCO, INC.
CONSOLIDATED STATEMENT OF INCOME
(Unaudited)
(in thousands, except share and per share amounts)
For the three months
ended March 31,
------------------------
1996 1995
--------- ----------
INTEREST INCOME:
Interest and fees on loans $ 18,684 $ 16,704
Interest on investment securities 6,020 6,610
Other interest income 244 298
--------- ---------
Total interest income 24,948 23,612
--------- ---------
INTEREST EXPENSE:
Interest on deposits 9,680 9,137
Interest on other borrowings 901 746
--------- ---------
Total interest expense 10,581 9,883
--------- ---------
NET INTEREST INCOME 14,367 13,729
Provision for possible loan losses 864 377
--------- ---------
NET INTEREST INCOME AFTER PROVISION
FOR POSSIBLE LOAN LOSSES 13,503 13,352
--------- ---------
OTHER INCOME:
Trust fees 1,471 1,295
Service charges and other income 1,400 1,459
Net securities transaction gains 86 106
--------- ---------
Total other income 2,957 2,860
--------- ---------
OTHER EXPENSES:
Salaries, wages and fringe benefits 5,205 5,284
Premises and equipment - net 1,309 1,173
Other operating 2,853 3,134
--------- ---------
Total other expenses 9,367 9,591
--------- ---------
Income before provision for income taxes 7,093 6,621
Provision for income taxes (Note 5) 2,188 1,963
--------- ---------
NET INCOME $ 4,905 $ 4,658
========= =========
Preferred stock dividends and discount
accretion --- $ 46
=========
Net income available to common
shareholders $ 4,905 $ 4,612
========= =========
Earnings per share of common stock $ .58 $ .54
========= =========
Average outstanding shares of common
stock 8,480,550 8,509,821
========= =========
Dividends declared per share of
common stock $ .26 $ .23
========= =========
The accompanying Notes to Consolidated Financial Statements are
an integral part of these financial statements.
<PAGE> 89
WESBANCO, INC.
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
(Unaudited)
(dollars in thousands)
For the three months
ended March 31,
-------------------------
1996 1995
----------- ----------
Total Shareholders' Equity
Balance, beginning of period $170,040 $156,630
-------- --------
Net Income 4,905 4,658
Cash dividends:
Common (2,203) (1,957)
Preferred (38)
Accretion of preferred stock --- (8)
Net purchase of treasury shares (681) (51)
Change in market value adjustment on
investments available for sale-net
of tax effect (1,574) 2,470
Change in deferred benefits for employees
and directors (21) (312)
---------- ---------
Net change in Shareholders' Equity 426 4,762
---------- ---------
Total Shareholders' Equity
Balance, end of period $170,466 $161,392
========== =========
The accompanying Notes to Consolidated Financial Statements are
an integral part of these financial statements.
<PAGE> 90
WESBANCO, INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited)
(dollars in thousands)
For the three months
ended March 31,
-------------------------
1996 1995
---------- ---------
Cash flows from operating activities:
Net income $ 4,905 $ 4,658
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation 566 489
Provision for possible loan losses 864 377
Net amortization and accretion 602 956
Gain on sales of investment securities (86) (106)
Deferred income taxes (125) (119)
Other - net 4 7
Increase or decrease in assets and
liabilities:
Interest receivable (878) 15
Other assets (888) (1,419)
Interest payable (488) (101)
Other liabilities 3,021 2,244
--------- --------
Net cash provided by operating activities 7,497 7,001
--------- --------
Investing Activities:
Investment securities held to maturity:
Payments for purchases (6,378) (3,234)
Proceeds from maturities and calls 29,456 17,977
Investment securities available for sale:
Payments for purchases (58,846)
Proceeds from sales 15,234 12,307
Proceeds from maturities, calls
and prepayments 8,211 8,142
Net increase in loans (5,903) (8,927)
Purchases of premises and equipment-net (868) (703)
---------- ---------
Net cash provided (used) by investing
activities (19,094) 25,562
---------- ---------
Financing activities:
Net increase in certificates of deposit 11,790 19,481
Net decrease in demand and savings accounts (9,155) (28,086)
Decrease in federal funds purchased
and repurchase agreements (2,619) (16,113)
Increase (decrease) in short-term
borrowings 5,560 (2,041)
Dividends paid (2,125) (1,909)
Net purchases of treasury stock (681) (51)
---------- ---------
Net cash provided (used) by financing
activities 2,770 (28,719)
---------- ---------
Net increase (decrease) in cash and cash
equivalents (8,827) 3,844
Cash and cash equivalents at beginning of
period 63,238 65,013
-------- ---------
Cash and cash equivalents at end of period $54,411 $68,857
======== =========
For the three months ended March 31, 1996 and 1995, WesBanco paid
$11,069 and $9,985 in interest on deposits and other borrowings
and $0 and $30 for income taxes, respectively.
The accompanying Notes to Consolidated Financial Statements
are an integral part of these financial statements.
<PAGE> 91
WESBANCO, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(dollars in thousands)
NOTE 1 - INVESTMENT SECURITIES:
March 31, December 31,
1996 1995
------------- -----------
(Unaudited)
Investments Held to Maturity (at cost):
U.S. Treasury and Federal
Agency securities $108,298 $133,888
Obligations of states and
political subdivisions 117,653 115,770
Other debt securities 1,700 1,358
--------- ---------
Total Held to Maturity (market value
of $228,621 and $253,831, respectively) 227,651 251,016
--------- ---------
Investments Available for Sale (at market):
U.S. Treasury and Federal
Agency securities 146,847 157,505
Obligations of states and
political subdivisions 12,570 5,667
U.S. corporate securities 5 4
Mortgage-backed securities 42,245 6,610
Other debt and equity securities 3,050 2,351
--------- ---------
Total Available for Sale 204,717 172,137
--------- ---------
Total Investment Securities $432,368 $423,153
========= =========
NOTE 2 - LOANS:
- ---------------
March 31, December 31,
1996 1995
----------- ------------
(Unaudited)
Loans:
Commercial $167,972 $172,270
Real Estate-Construction 16,226 15,493
Real Estate-Mortgage 393,269 392,681
Installment 284,906 277,934
-------- --------
Total Loans 862,373 858,378
-------- --------
Deduct:
Unearned income (6,317) (7,810)
Reserve for possible loan losses (Note 3) (13,186) (12,747)
--------- ---------
Net Loans $842,870 $837,821
========= =========
<PAGE> 92
Note 2 - LOANS (continued)
- --------------------------
Impaired loans are as follows:
March 31, December 31,
1996 1995
---------- --------------
Nonaccrual $4,982 $5,199
Renegotiated and other 2,642 2,092
------- -------
Total impaired loans $7,624 $7,291
======= ========
Related reserves for possible loan losses on impaired loans were $176
and $334 as of March 31, 1996 and December 31, 1995, respectively.
The average balances of impaired loans during the periods ended
March 31, 1996 and December 31, 1995 were approximately $7,624 and $6,773,
respectively. For the periods ended March 31, 1996 and December 31, 1995,
the interest income recognized on impaired loans did not have a material
effect on the results of operations.
NOTE 3 - RESERVE FOR POSSIBLE LOAN LOSSES:
- ------------------------------------------
(Unaudited)
For the three months
ended March 31,
--------------------
1996 1995
--------- --------
Balance at beginning of period $12,747 $12,317
Recoveries credited to reserve 121 230
Provision for possible loan losses 864 377
Losses charged to reserve (546) (334)
-------- -------
Balance at end of period $13,186 $12,590
======== ========
NOTE 4 - ADOPTION OF NEW ACCOUNTING STANDARD: (unaudited)
- ----------------------------------------------
The Corporation adopted FAS No. 121 "Accounting for the Impairment of
Long-lived Assets and for Long-lived Assets to be Disposed Of," on January 1,
<PAGE> 93
Note 4 - ADOPTION OF NEW ACCOUNTING STANDARD: (continued)
- ---------------------------------------------------------
1996. Under the new standard, assets are to be reviewed for impairment
whenever circumstances indicate that the carrying amount may not be
recoverable. An impairment loss is recognized when the sum of expected
future cash flows from an impaired asset, on a discounted basis, is less
than the asset's carrying amount. The adoption of FAS No. 121 did not have
a material impact on the Corporation's financial position or results of
operations.
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:
For the three months
ended March 31,
--------------------------
1996 1995
------------ ------------
Federal statutory tax rate $2,482 35% $2,317 35%
Tax-exempt interest income from
securities of states and political
subdivisions (571) (9) (571) (9)
State income tax - net of federal
tax effect 208 3 185 3
All other - net 69 2 32 1
------------ -----------
Effective tax rate $2,188 31% $1,963 30%
============ ============
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 March 31, 1996 were $1,380,065 as
compared to $1,371,793 as of December 31, 1995.
Investment securities increased by $9,215 between March 31, 1996
and December 31, 1995. During the period, maturities, calls, prepayments
and sales aggregated $52,901, while investment purchases totaled $65,224.
Investment purchases consisted primarily of mortgage-backed securities,
which
<PAGE> 94
represented a yield advantage over other investments during the first
quarter of 1996.
The market value adjustments, before tax effect, in the available for
sale investment portfolio resulted in unrealized net losses of $1,193 and
unrealized net gains of $1,392 on available for sale securities as of March
31, 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.
Net loans increased $5,049 or .6% between March 31, 1996 and December
31, 1995. Overall loan growth was primarily attributable to the
installment loan portfolio. During the first quarter of 1996 and
throughout 1995, WesBanco experienced steady growth in this area as a
result of offering attractive rates on automobile loans.
Total deposits increased $2,635 between March 31, 1996 and December 31,
1995. The deposit increase, which occurred primarily in certificates of
deposit, can be attributed to the new retail banking program called "Good
Neighbor Banking." 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 growth and customer profitability. There was also a shift in
deposit mix from demand deposits, which decreased $9,387 or 2.5% during the
three month period between March 31, 1996 and December 31, 1995, to
certificates of deposit, which increased $11,790 or 2.6% during the same
period. The shift to certificates of deposit from demand deposits reflect
the customer's preference for higher-yielding products. The certificate of
deposit increase occurred primarily in the Good Neighbor Banking products
which offer a tiered pricing structure based on balance and number of
qualifying services.
<PAGE> 95
Comparison of the three months ended March 31, 1996 and 1995
- ------------------------------------------------------------
Earnings Summary
- ----------------
Net income for the three months ended March 31, 1996 was $4,905, a 5.3%
increase over the same period in 1995. Earnings per share of common stock
for the three months ended March 31, 1996 and 1995 were $.58 and $.54
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 three months ended March 31, 1996 as compared to March 31,
1995.
Return on average assets was 1.42% and 1.40% for the three months ended
March 31, 1996 and 1995, respectively. Return on average equity was 11.51%
compared to 11.72% for the three months ended March 31, 1996 and 1995,
respectively.
Net Interest Income
- -------------------
Net interest income for the three months ended March 31, 1996 increased
$638 or 4.6% over the same period for 1995. The increase resulted from a
.1% increase in the net tax equivalent yield combined with volume growth
in both average earning assets of $30,700 or 2.5% and interest bearing
liabilities of $45,331 or 4.4%. Average earning assets increased primarily
due to loan growth. As interest rates generally declined during 1995, lower
rates on mortgage and consumer loans contributed to a 9.3% increase in
average loans. During the three months ended March 31, 1996, most banks'
primary lending rates averaged 8.3% compared to 8.8% 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 increased to 4.8% from 4.7% for the three
months ended March 31, 1995. The increase in the net yield was due to a
shift in the mix of assets from investment securities to
<PAGE> 96
higher-yielding loans as well as a reduction of interest rates on demand
and savings productsin January 1996.
Interest Income
- ---------------
Total interest income increased $1,336 or 5.6% between the three month
periods ended March 31, 1996 and 1995. Interest and fees on loans
increased $1,980 or 11.9% 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 .20% and average loan balances
increased by approximately $71,803 or 9.3%. Interest on taxable
investments decreased $590 or 11.9%. The decline was due to a decrease in
the average outstanding balance of approximately $44,913, partially offset
by an increase in the average yield of .08% between the three month period
ending March 31, 1996 and 1995. The decrease in taxable investments
resulted from the funding of excess loan demand with scheduled investment
maturities. Matured, called or sold investment securities represent a
primary source of liquidity. Interest earned on nontaxable investments
remained stable. Increases in the average balance of this type of investment
approximated $5,881 while the average yield declined .25%.
Interest Expense
- ----------------
Total interest expense increased $698 or 7.0% between the three month
periods ended March 31, 1996 and 1995. Interest expense on deposits
increased $543 or 5.9% during the period as the average rate on interest-
bearing deposits increased to 3.9% from 3.8% and average interest-bearing
deposit balances increased by approximately $20,516.
The increase in average interest-bearing deposit balances resulted from
growth in certificates of deposit of $42,111. Customers were attracted to
the higher-yielding certificate of deposit products and the introduction
of the Good Neighbor
<PAGE> 97
Banking Program in the fourth quarter of 1995. Interest
expense on certificates of deposit increased $1,209 or 23% reflecting this
growth in average balances. Interest expense on interest bearing demand
deposits decreased $322 or 17.7% primarily due to a decrease in the average
balances of approximately $6,716 and a decrease in the average rates of
.44%. Interest on savings accounts decreased $344 or 16.4% primarily due
to a decrease in the average balances of $14,878 combined with a .33%
average rate decrease. Interest on other borrowings, which primarily
includes repurchase agreements, increased $155 or 21% due to an increase
in average balances outstanding of $24,814. 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 increased due to an increase in
net charge-offs and due to management's evaluation of the credit risk in
the loan portfolio and analysis of underlying collateral value. Net charge-
offs increased to $425 as of March 31, 1996 from $104 as of March 31, 1995.
The reserve for possible loan losses was 1.54% of total loans as of March
31, 1996 and 1.50% as of December 31, 1995. Nonperforming loans consisting
of nonaccrual, renegotiated, and other impaired loans totalled $7,624 or
.9% of loans as of March 31, 1996 as compared to $7,291 or .9% as of
December 31, 1995, an increase of $333. Other real estate totaled $4,283 as
of March 31, 1996, compared to $4,137 as of December 31, 1995. Loans past
due 90 days or more increased to $4,821 or .6% of total loans as of March
31, 1996 from $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
<PAGE> 98
the acquisition of high yield non-investment grade loans or "highly
leveraged transactions" ("HLT") from out of the primary market area.
Other Income
- ------------
Other income increased $97 or 3.4%. Trust fee income increased $176
primarily due to increases in the market values and new trust business
during the first three months of 1996. The market value of trust assets
approximated $1,410,007 as of March 31, 1996, an increase of $254,600 or 22%
over March 31, 1995. Service charges and other income decreased $59 between
the three month periods ended March 31, 1996 and 1995. Service charge
discounts offered through the Good Neighbor Banking program, coupled with a
change to the service charge policies at a WesBanco affiliate, contributed
to the decline. Net securities transaction gains decreased $20 between the
three months ended March 31, 1996 and 1995. In 1995, the Corporation
recognized security gains of approximately $85, resulting from a decision to
divest an equity position which no longer had a strategic value.
Other Expenses
- --------------
Total other expenses decreased $224 or 2.3%. Salary expense increased
$41 or .9% while employee benefits decreased $121 during this period
primarily due to a reduction in pension expense of $192. The reduction of
pension expense resulted from an increase in the market value of Pension
Plan assets, combined with a change in the method of calculating benefits.
Premise and equipment expense increased $136 or 11.6% due to the
installation of a local area network and other technological advancements
designed to enhance customer service. Other operating expenses decreased
$281 or 9.0% primarily due to a reduction in FDIC insurance expense of $624.
However, the decrease was partially offset by the recognition of renovation
costs totalling $265, at a
<PAGE> 99
nonbank subsidiary of WesBanco Bank Wheeling during the first quarter of
1996. The nonbank subsidiary is comprised of real estate held for resale.
<PAGE> 100
Bank of Weirton
STATEMENTS OF CONDITION (UNAUDITED)
(In thousands)
- -----------------------------------------------------------------------------
<TABLE>
<CAPTION>
March 31 December 31
1996 1995
---------- -------------
<S> <C> <C>
ASSETS
Cash and due from banks $ 5,564 $ 5,155
Federal funds sold 25,000 23,000
Investment securities held to maturity - at cost
(market value $98,629 at March 31, 1996 and $99,929 at
December 31, 1995, respectively) 98,446 99,135
Loans, net of allowance for loan losses of $697 at
March 31, 1996 and $692 at December 31, 1995, respectively 43,717 42,659
Bank premises and equipment - net 5,302 5,369
Accrued interest receivable and other assets 2,327 1,908
----------- ----------
TOTAL ASSETS $180,356 $177,226
=========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits
Demand, non-interest bearing $ 17,805 $ 16,704
NOW and money market 25,039 26,266
Savings 59,145 58,885
Time - $100,000 and over 4,933 4,433
Other time 34,500 33,084
---------- ----------
Total deposits 141,422 139,370
Accrued expenses and other liabilities 1,710 899
---------- ----------
Total liabilities 143,132 140,269
Stockholders' equity
Common stock - $100 par value; 13,000
shares authorized, issued and outstanding 1,300 1,300
Surplus 7,700 7,700
Undivided profits 28,224 27,957
--------- ----------
Total stockholders' equity 37,224 36,957
--------- ----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $180,356 $177,226
========== ==========
</TABLE>
The accompanying notes are an integral part of these statements.
<PAGE> 101
Bank of Weirton
STATEMENTS OF INCOME (UNAUDITED)
Three Months Ended
(In thousands, except per share data)
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
March 31,
-----------------------
1996 1995
---------- ----------
<S> <C> <C>
Interest income
Interest and fees on loans $ 840 $ 664
Interest on investment securities
Taxable 1,166 1,213
Exempt from federal income tax 193 241
Interest on federal funds sold 329 372
--------- --------
Total interest income 2,528 2,490
Interest expense
Interest on deposits 1,229 1,097
--------- --------
Total interest expense 1,229 1,097
--------- --------
Net interest income 1,299 1,393
Provision for loan losses 5 4
Net interest income after provision for loan losses 1,294 1,389
Other Operating income
Service charges on deposit accounts 54 54
Other operating income 51 44
--------- --------
Total operating income 105 98
Other Operating expenses
Salaries and employee benefits 337 351
Occupancy expense 189 182
Data processing fees 49 43
FDIC assessment 1 82
Supplies 31 32
Other expenses 146 140
--------- --------
Total operating expenses 753 830
--------- --------
Income before income taxes 646 657
Provision for income taxes 178 129
--------- ---------
NET INCOME $ 468 $ 528
========= =========
Earnings per common share $ 36.00 $ 40.68
========= =========
</TABLE>
The accompanying notes are an integral part of these statements.
<PAGE> 102
Bank of Weirton
STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (UNAUDITED)
Three months ended March 31, 1996 and 1995
(In thousands)
- -----------------------------------------------------------------------------
Common Undivided
Stock Surplus Profits Total
------- ------- --------- -------
Balance at January 1, 1996 $ 1,300 $ 7,700 $ 27,957 $36,957
Dividends declared ($15.50 per share) (201) (201)
Net income 468 468
-------- -------- -------- -------
Balance at March 31, 1996 $ 1,300 $ 7,700 $ 28,224 $37,224
======== ======== ========= =======
Common Undivided
Stock Surplus Profits Total
-------- -------- ---------- -------
Balance at January 1, 1995 $ 1,300 $ 7,700 $ 26,674 $35,674
Dividends declared ($14 per share) (182) (182)
Net income 528 528
-------- -------- --------- --------
Balance at March 31, 1995 $ 1,300 $ 7,700 $ 27,020 $36,020
======== ======== ========= ========
The accompanying notes are an integral part of these statements.
<PAGE> 103
Bank of Weirton
STATEMENT OF CASH FLOWS (UNAUDITED)
Three Months Ended
(In thousands)
- ---------------------------------------------------------------------------
March 31,
----------------------
1996 1995
Cash flows from operating activities: ------- --------
Net income $ 468 $ 528
Adjustments to reconcile net income to net cash provided
by operating activities
Depreciation and amortization of premises and
equipment 77 75
Provision for loan losses 5 4
Net amortization of investment securities
premiums 310 368
Increase in accrued interest receivable and
other assets (419) (39)
Increase in accrued expenses and other
liabilities 811 664
------- -------
Total adjustments 784 1,072
------- -------
Net cash provided by operating activities 1,252 1,600
------- -------
Cash flows from investing activities:
Purchase of investment securities held to maturity (8,621) (2,438)
Proceeds from maturities and calls of investment
securities held to maturity 9,000 8,200
Net increase in loans (1,063) (2,274)
Capital expenditures (10) -
-------- -------
Net cash (used) provided by investing activities (694) 3,488
-------- -------
Cash flows from financing activities:
Net increase (decrease) in deposits other than time 134 (2,810)
Net increase (decrease) in time deposits 1,918 (480)
Dividends paid (201) (182)
------- --------
Net cash provided (used) by financing activities 1,851 (3,472)
------- --------
Net increase in cash and cash equivalents 2,409 1,616
Cash and cash equivalents at January 1 28,155 29,236
-------- --------
Cash and cash equivalents at March 31, $ 30,564 $ 30,852
========= =========
Supplemental disclosures of cash flow information:
Cash paid during the three months ended March 31 for:
Interest $ 685 $ 544
Income taxes - 91
The accompanying notes are an integral part of these statements.
<PAGE> 104
Bank of Weirton
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED) March 31, 1996 and 1995
(In thousands)
- ----------------------------------------------------------------------------
NOTE A - BASIS OF PRESENTATION
These interim financial statements should be read in conjunction with
the annual financial statements of the Bank of Weirton and accompanying
footnotes. In the opinion of management, the unaudited interim financial
statements include all adjustments (consisting of only normal recurring
adjustments) necessary for the fair presentation of the accompanying
statement of condition as of March 31, 1996 and the related statements
of income, changes in stockholders' equity and cash flows for the three
months ended March 31, 1996 and 1995. The results of the three months
ended March 31, 1996 and 1995 are not necessarily indicative of the
results to be expected for the entire year.
NOTE B - ALLOWANCE FOR LOAN LOSSES
Transactions in the allowance for loan losses for the three
months ended March 31, are summarized as follows:
1996 1995
---- ----
Balance at January 1 $692 $643
Loans written off - (172)
Loans recovered - -
Provision for loan losses 5 4
---- ----
Balance at March 31 $697 $475
==== ====
Loans written off in the first quarter of 1995 were recovered
in the third quarter of 1995.
NOTE C - PROPOSED BUSINESS COMBINATION
On February 9, 1996, the Bank entered into a definitive Agreement and
Plan of Merger providing for the merger of the Bank with Wesbanco Inc.
Under the terms of the definitive Agreement and Plan of Merger, Wesbanco
Inc. will exchange 130 shares of Wesbanco Inc. common stock for each share of
the Bank's common stock. The merger, which is subject to, among other things,
approval by the appropriate regulatory authorities and the stockholders of the
Bank, is expected to be completed during the third quarter of 1996.
<PAGE> 105
BANK OF WEIRTON
MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
- -----------------------------------------------------------------------------
THREE MONTHS ENDED MARCH 31, 1996 AND 1995
The following discussion and analysis is intended as a review of significant
factors affecting the results of operations and financial condition of the
bank for the three months ended March 31, 1996 and 1995. This discussion
should be read in conjunction with the annual financial statements and notes
thereto presented herein.
RESULTS OF OPERATIONS
- ---------------------
Net income for the first three months of 1996 was $468 thousand, down $60
thousand from the comparable 1995 period. Earnings per share declined from
$40.68 to $36.00. Return on average assets for the respective quarters was
1.05% in 1996 compared to 1.17% in 1995. A reduction in net interest
income of $94 thousand in 1996 was offset by reduced levels of FDIC insurance
compared to 1995. Income tax expense also increased in 1996 due to higher
effective tax rates.
Net interest margin declined 17 basis points in the first quarter of 1996
compared to year end 1995 as interest rates on deposits increased faster
than rates on interest earning assets. Compared to the first quarter of 1995
this decline was 25 basis points. The Bank raised its rates on savings
deposits by 50 basis points in March of 1995. The Bank's Interest sensitivity
analysis at March 31, 1996 and December 31, 1995 indicated the Bank was
negatively gapped in the three month maturity range, so the rise in short
term interest rates produced the expected results on net interest income.
Mitigating the decreasing margin was growth in interest earning assets which
increased in 1996 over levels at December 31, 1995 due to continued mortgage
loan growth. Average deposits also increased compared to December 31, 1995
levels.
The following schedule compares net interest income on a tax equivalent basis
for the three months ended March 31, 1996 and 1995.
<PAGE> 106
<TABLE>
<CAPTION>
Average Balance Sheets and Net Interest Analysis
----------------------------------------------------------------------
1st Quarter 1996 1st Quarter 1995
------------------------------- --------------------------------
Average Income/ Yield or Average Income/ Yield or
Balance(a) Expense Rate(b) Balance(a) Expense Rate(b)
---------- -------- -------- ---------- -------- ---------
(Dollar Amounts in Thousands)
<S> <C> <C> <C> <C> <C> <C>
Assets
Interest-earning assets:
Investment securities $ 97,897 $ 1,458 5.96% $ 106,506 $ 1,578 5.93%
Federal funds sold 23,338 329 5.64% 25,077 372 5.93%
Loans, net of unearned Income 43,481 841 7.74% 34,932 665 7.61%
---------- -------- ------- ---------- -------- ------
Total interest-earning assets 164,716 2,628 6.38% 166,515 2,615 6.28%
---------- -------- ------- ---------- -------- ------
Noninterest-earning assets
Average cash & other assets 12,878 13,648
Reserve for loan losses 694 499
---------- ----------
Total noninterest-earning assets 13,572 14,147
---------- ----------
Total Assets $ 178,288 $ 180,662
========== ==========
Liabilities and Shareholders' Equity
Interest-bearing liabilities:
Interest-bearing demand deposits $ 25,510 $ 210 3.29% $ 26,691 $ 200 3.00%
Savings Deposits 58,679 558 3.80% 60,304 538 3.57%
Time Deposits 38,673 461 4.77% 39,200 359 3.66%
---------- ------- ------ --------- -------- -----
Total interest-bearing liabilities 122,862 1,229 4.00% 126,195 1,097 3.48%
---------- ------- ------ --------- -------- -----
Noninterest-bearing liabilities:
Noninterest-bearing deposits and
other liabilities 18,338 18,622
Shareholders' Equity 37,088 35,845
---------- ---------
Total noninterest-bearing
funding sources 55,426 54,467
---------- ---------
Total Liabilities and
Shareholders' Equity $ 178,288 $ 180,662
========== =========
Interest Spread 2.38% 2.80%
====== ======
Net Interest Income and Net
Yield on Interest-earning Assets $ 1,399 3.40% $ 1,518 3.65%
======== ====== ======== ======
(a) Average principally calculated on a weekly basis which, in the opinion of management, approximates daily averages.
(b) Yields on interest-earning assets have been computed on a tax equivalent basis using the 34% Federal income tax
statutory rate in all years.
</TABLE>
<PAGE> 107
ALLOWANCE FOR LOAN LOSSES
- -------------------------
The provision for loan losses was comparable in both interim periods.
There has been no significant changes in credit quality in the period ended
March 31, 1996 compared to December 31, 1995. Allowance for loan losses
stood at 1.57% of total outstanding loans at March 31 compared to 1.60% at
December 31. Past due loans (over 90 days) were only $6 thousand at March 31,
1996 compared to $28 thousand at December 31, 1995.
STATEMENTS OF CONDITION
- -----------------------
At March 31, 1996 loans and deposits continued to increase from December 31,
1995 levels. Liquidity remained high as federal funds sold and investments
remained constant while deposits increased over all categories. Stockholders'
equity increased from retention of earnings net of dividends. Capital ratios
remained at levels well above peers and the Bank continues to be "well
capitalized" under regulatory guidelines as follows at March 31, 1996.
Tier I Capital: Stockholders' Equity $37,224
Tier II Capital: Allowable allowance for loan losses 602
--------
Total Capital $ 37,826
========
Risk Weighted Assets $ 48,142
Capital ratios ========
Tier I Risk Weighted 77.4 %
Total Risk Weighted 78.6 %
Leverage 20.9 %
Capital in excess of minimum regulatory requirements $ 31,875
========
<PAGE> 108
[Grant Thornton LLP LOGO]
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
Board of Directors
Bank of Weirton
We have audited the accompanying statement of condition of the Bank of Weirton
as of December 31, 1995 and the related statements of income, changes in
stockholders' equity and cash flows for the year then ended. These financial
statements are the responsibility of the Bank's management. Our responsibility
is to express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of the Bank of Weirton as of
December 31, 1995, and the results of its operations and its cash flows for
the year then ended, in conformity with generally accepted accounting
principles.
/s/ GRANT THORNTON LLP
Pittsburgh, Pennsylvania
April 11, 1996
<PAGE> 109
Bank of Weirton
STATEMENT OF CONDITION
December 31, 1995 and 1994
(In thousands)
- ------------------------------------------------------------------------------
<TABLE>
<CAPTION>
1995 1994
---- ----
ASSETS (Unaudited)
<S> <C> <C>
Cash and due from banks $ 5,155 $ 6,236
Federal funds sold 23,000 23,000
Investment securities held to maturity - at cost
(market value $99,929 and $108,180 at December 31,
1995 and 1994, respectively) 99,135 111,075
Loans, net of allowance for loan losses of
$692 and $643, respectively 42,659 33,613
Bank premises and equipment - net 5,369 5,632
Accrued interest receivable and other assets 1,908 2,308
--------- ----------
TOTAL ASSETS $ 177,226 $ 181,864
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits
Demand, non-interest bearing $ 16,704 $ 18,801
NOW and money market 26,266 26,365
Savings 58,885 60,999
Time - $100,000 and over 4,433 4,907
Other time 33,082 34,296
---------- ---------
Total deposits 139,370 145,368
Accrued expenses and other liabilities 899 822
---------- ---------
Total liabilities 140,269 146,190
Stockholders' equity
Common stock - $100 par value; 13,000 shares
authorized, issued and outstanding 1,300 1,300
Surplus 7,700 7,700
Undivided profits 27,957 26,674
---------- ---------
Total stockholders' equity 36,957 35,674
---------- ---------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 177,226 $ 181,864
========== =========
</TABLE>
The accompanying notes are an integral part of these statements.
<PAGE> 110
Bank of Weirton
STATEMENT OF INCOME
Years ended December 31, 1995, 1994 and 1993
(In thousands, except per share data)
- ---------------------------------------------------------------------------
1995 1994 1993
--------- --------- ---------
(--Unaudited--)
Interest income
Interest and fees on loans $ 3,053 $ 2,280 $ 2,019
Interest on investment securities
Taxable 4,918 4,832 4,597
Exempt from federal income tax 863 1,289 1,667
Interest on federal funds sold 1,349 1,295 1,328
--------- --------- --------
Total interest income 10,183 9,696 9,611
Interest expense
Interest on deposits 4,700 4,032 4,343
--------- --------- --------
Total interest expense 4,700 4,032 4,343
--------- --------- --------
Net interest income 5,483 5,664 5,268
Provision for loan losses 18 18 18
--------- --------- --------
Net interest income after provision
for loan losses 5,465 5,646 5,250
Other operating income
Service charges on deposit accounts 223 231 223
Other operating income 46 47 49
--------- --------- --------
Total operating income 269 278 272
Other operating expenses
Salaries and employee benefits 1,613 1,566 1,532
Occupancy expense 695 676 643
Data processing fees 172 170 172
FDIC assessment 168 341 335
Supplies 121 120 118
Other expenses 374 353 362
--------- --------- ---------
Total operating expenses 3,143 3,226 3,162
--------- --------- ---------
Income before income taxes 2,591 2,698 2,360
Provision for income taxes 476 503 484
--------- ---------- ---------
NET INCOME $ 2,115 $ 2,195 $ 1,876
========= ========== =========
Earnings per common share $ 162.71 $ 168.87 $ 144.29
========= ========== =========
The accompanying notes are an integral part of these statements.
<PAGE> 111
Bank of Weirton
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
Years ended December 31, 1995, 1994 and 1993
(In thousands, expect per share data) (Amounts for years other
than 1995 are unaudited)
- ----------------------------------------------------------------------------
Common Undivided
Stock Surplus Profits Total
-------- -------- -------- --------
Balance at January 1, 1993 $ 1,300 $ 7,700 $ 24,189 $ 33,189
Dividends declared - $60 per share - - (780) (780)
Net income for the year - - 1,876 1,876
-------- -------- -------- --------
Balance at December 31, 1993 1,300 7,700 25,285 34,285
Dividends declared - $62 per share - - (806) (806)
Net income for the year - - 2,195 2,195
--------- -------- -------- --------
Balance at December 31, 1994 1,300 7,700 26,674 35,674
Dividends declared ($64 per share) - - (832) (832)
Net income for the year - - 2,115 2,115
--------- -------- ------- -------
Balance at December 31, 1995 $ 1,300 $ 7,700 $ 27,957 $ 36,957
========= ======== ======== ========
The accompanying notes are an integral part of these statements.
<PAGE> 112
Bank of Weirton
STATEMENT OF CASH FLOWS
Year ended December 31, 1995, 1994 and 1993
(In thousands)
- ----------------------------------------------------------------------------
1995 1994 1993
----- ----- -----
(---Unaudited---)
Cash flows from operating activities:
Net income $ 2,115 $ 2,195 $ 1,876
Adjustments to reconcile net income to
net cash provided by operating activities
Depreciation and amortization of
premises and equipment 303 302 298
Provision for loan losses 18 18 18
Deferred income tax benefit (100) - -
Net amortization of investment
securities premiums 1,460 1,624 1,460
Decrease (Increase) in accrued interest
receivable and other assets 500 (54) 296
Increase (Decrease) in accrued expense
and other liabilities 77 135 (142)
------- ------- --------
Total adjustments 2,258 2,025 1,930
------- ------- --------
Net cash provided by operating
activities 4,373 4,220 3,806
------- ------- --------
Cash flows from investing activities:
Purchase of investment securities
held to maturity (10,520) (33,278) (46,359)
Proceeds from maturities and calls of
investment securities held to
maturity 21,000 30,800 38,000
Net (increase) decrease in loans (9,064) (10,602) 866
Capital expenditures (40) (28) (13)
-------- -------- ---------
Net cash provided (used) by
investing activities 1,376 (13,108) (7,506)
-------- -------- ---------
Cash flows from financing activities:
Net (decrease) increase in
deposits other than time (4,310) (660) 5,037
Net decrease in time deposits (1,688) (6,045) (3,120)
Dividends paid (832) (806) (780)
-------- --------- ----------
Net cash (used) provided
by financing activities (6,830) (7,511) 1,137
-------- --------- ----------
NET DECREASE IN CASH AND
CASH EQUIVALENTS (1,081) (16,399) (2,563)
Cash and cash equivalents at
beginning of year 29,236 45,635 48,198
------- ------- -------
Cash and cash equivalents at end of year $28,155 $29,236 $45,635
======= ======= =======
Supplemental disclosures of cash flow information:
Cash paid during the year for:
Interest $ 4,616 $ 4,065 $ 4,417
Income taxes 598 460 549
The accompanying notes are an integral part of these statements.
<PAGE> 113
Bank of Weirton
NOTES TO FINANCIAL STATEMENTS
December 31, 1995, 1994 and 1993
(Data related to December 31, 1994 and 1993 is unaudited)
- ----------------------------------------------------------------------------
NOTE A - SUMMARY OF ACCOUNTING POLICIES
The financial reporting and accounting policies of the Bank of Weirton
("the Bank") conform to practices within the banking industry and are based
on generally accepted accounting principles. In preparing financial statements
in conformity with generally accepted accounting principles, management makes
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosures of contingent assets and liabilities at the date
of the financial statements. Actual results could differ from those
estimates. A summary of those significant policies consistently applied in
the preparation of the accompanying financial statements follows:
Investment Securities
Debt securities that the Bank has the positive intent and ability to hold to
maturity are classified as held-to-maturity and reported at amortized cost.
Debt and equity securities that are bought and held principally for the purpose
of selling them in the near term are classified as trading securities and
reported at fair value, with unrealized gains and losses included currently
in income. Debt and equity securities classified as neither held-to-maturity
or trading securities are classified as available-for-sale and reported at
fair value, with unrealized gains and losses excluded from income and reported
as a separate component of stockholders' equity. The Bank has classified
its investment securities as held-to maturity at December 31, 1995, 1994 and
1993. Market premiums and discounts are amortized to interest income over the
estimated lives of the securities using the straight-line method which
approximates the interest method.
Loans and Allowance for Possible Loan Losses
Loans are reported at their principal amounts, net of unearned discount and
an allowance for loan losses. Unearned discount on installment loans is
recognized as income over the terms of the loans by the sum-of-the-months-
digits which approximates the interest method. The determination of the
balance in the allowance for possible loan losses is based on an analysis of
the loan portfolio and reflects an amount which, in management's judgment, is
adequate to provide for potential loan losses after giving consideration to
the character of the loan portfolio, current economic conditions, past loan
experience and such other factors that deserve current recognition in
estimating loan losses. The provision for loan losses is charged to
operations.
At December 31, 1995, the Bank does not have any loans considered to be
impaired as defined under Statement of Financial Accounting Standards No.
114, Accounting by Creditors for Impairment of a Loan.
<PAGE> 114
Bank of Weirton
NOTES TO FINANCIAL STATEMENTS - CONTINUED
December 31, 1995, 1994 and 1993
(Data related to December 31, 1994 and 1993 is unaudited)
- -----------------------------------------------------------------------------
NOTE A - SUMMARY OF ACCOUNTING POLICIES - Continued
Bank Premises and Equipment
Depreciation is provided in amounts sufficient to relate the cost of
depreciable assets to operations over their estimated service lives on a
straight-line basis. Estimated service lives are as follows:
Buildings 30 years
Furniture and Equipment 5 to 7 years
Other Real Estate Owned
Other real estate owned acquired in foreclosure is recorded at the lower of
cost or net realizable value. The Bank did not hold any other real estate
at December 31, 1995 or 1994.
Income Taxes
Deferred income taxes are provided using the liability method in accordance
with Statement of Financial Accounting Standards No. 109. Under this method,
the tax effects of temporary differences between the financial statement and
income tax basis of assets and liabilities are recorded at the enacted tax
rates that would apply in the period in which the taxes become payable or
recoverable, subject to a valuation allowance where uncertainty exists as to
the recoverability of deferred tax assets. These temporary differences relate
principally to depreciation of bank premises and equipment, allowance for loan
losses and accrued pension liability.
Statement of Cash Flows
The Bank has defined cash equivalents as cash on hand, cash items, amount due
from banks, and federal funds sold. Generally, federal funds are sold for
one-day periods.
Earnings Per Share
Earnings per share is computed by dividing net income by the weighted average
number of shares outstanding during periods. The weighted average number of
shares outstanding for the years ended December 31, 1995, 1994 and 1993
was 13,000.
<PAGE> 115
Bank of Weirton
NOTES TO FINANCIAL STATEMENTS - CONTINUED
December 31, 1995, 1994 and 1993
(Data related to December 31, 1994 and 1993 is unaudited)
- ------------------------------------------------------------------------------
NOTE B - INVESTMENT SECURITIES HELD TO MATURITY
The amortized cost (carrying amount), estimated fair value and gross
unrealized gains and losses of investment securities held to maturity
at December 31, are as follows:
1995 (In thousands)
-------------------------------------------------
Gross Gross Estimated
Amortized Unrealized Unrealized Fair
Cost Gains Losses Value
---------- ------------ ----------- ---------
U.S. Treasury securities $ 85,831 $ 711 $ 204 $ 86,338
Obligations of States and
Political Subdivisions 13,304 299 12 13,591
--------- ------------ ---------- ----------
$99,135 $ 1,010 $ 216 $ 99,929
========= ============ ========== ==========
Pledged Securities $ 3,783 $ 3,883
========= ==========
1994 (In thousands)
Gross Gross Estimated
Amortized Unrealized Unrealized Fair
Cost Gains Losses Value
---------- ------------ ---------- ----------
U.S. Treasury securities $ 94,770 $ 41 $ 3,422 $ 91,389
Obligations of States and
Political Subdivisions 16,305 486 - 16,791
---------- ----------- ---------- ----------
$ 111,075 $ 527 $ 3,422 $108,180
========== =========== ========== ==========
Pledged Securities $ 3,885 $ 4,000
========== ==========
There were no sales of investments held to maturity during 1995, 1994 or 1993.
<PAGE> 116
Bank of Weirton
NOTES TO FINANCIAL STATEMENTS - CONTINUED
December 31, 1995, 1994 and 1993
(Data related to December 31, 1994 and 1993 is unaudited)
- ------------------------------------------------------------------------------
NOTE B - INVESTMENT SECURITIES HELD TO MATURITY - Continued
The contractual amortized cost and estimated fair value of debt securities
as of December 31, 1995, by contractual maturity are shown below. Expected
maturities may differ from contractual maturities as borrowers may call or
prepay obligations.
Estimated
Amortized Fair
Cost Value
------------- -------------
(In thousands)
Within one year $ 35,991 $ 36,070
After one year but within five years 54,340 54,851
After five years but within ten years 8,404 8,607
After ten years 400 401
----------- ----------
$ 99,135 $ 99,929
=========== ==========
NOTE C - LOANS AND ALLOWANCE FOR POSSIBLE LOAN LOSSES
The Bank grants real estate, installment, commercial and other loans to
customers principally in the Weirton, New Cumberland and New Manchester,
West Virginia and Paris, Pennsylvania areas. Although the Bank has a
diversified portfolio, exposure to credit loss can be adversely impacted
by downturns in local economic and employment conditions. Loans consist
of the following at December 31,:
1995 1994
----------- -------------
(In thousands)
Conventional real estate $32,236 $24,557
Consumer installment 6,174 4,752
Commercial secured 3,226 3,207
Commercial unsecured 1,279 1,291
Construction and land development 1,051 841
Overdrafts 34 65
--------- ---------
44,000 34,713
Less: Unearned discount 649 457
Allowance for possible loan losses 692 643
-------- --------
$42,659 $33,613
======== ========
<PAGE> 117
Bank of Weirton
NOTES TO FINANCIAL STATEMENTS - CONTINUED
December 31, 1995, 1994 and 1993
(Data related to December 31, 1994 and 1993 is unaudited)
- ------------------------------------------------------------------------------
NOTE C - LOANS AND ALLOWANCE FOR POSSIBLE LOAN LOSSES - Continued
Transactions in the allowance for loan losses for the years ended December 31,
are summarized as follows:
1995 1994 1993
--------- --------- ---------
(In thousands)
Balance at beginning of year $ 643 $ 632 $ 670
Loans written off (184) (8) (61)
Loans recovered 215 1 5
Provision for loan losses 18 18 18
-------- -------- --------
Balance at end of year $ 692 $ 643 $ 632
======== ======== ========
NOTE D - RELATED PARTY TRANSACTIONS
The Bank makes loans, in the normal course of business, to its directors and
officers and companies which are partially or substantially owned by
directors/officers of the Bank. Related party loans are made on
substantially the same terms, including interest rates and collateral, as
those prevailing at the time for comparable transactions with unrelated
persons. Related party loan transactions in 1995 are summarized as follows:
(In thousands)
Balance at the beginning of year $3,986
New loans 2,883
Repayments (2,886)
--------
Balance at the end of year $3,983
========
<PAGE> 118
Bank of Weirton
NOTES TO FINANCIAL STATEMENTS - CONTINUED
December 31, 1995, 1994 and 1993
(Data related to December 31, 1994 and 1993 is unaudited)
- ---------------------------------------------------------------------------
NOTE E - DEPOSITS
The total of individual interest bearing time deposits issued in amounts
of $100,000 or greater was $4,433,000 and $4,907,000 at December 31, 1995
and 1994. Interest expense on these deposits was approximately $213,000,
$202,000 and $232,000 for the years ended December 31, 1995, 1994 and
1993, respectively.
NOTE F - BANK PREMISES AND EQUIPMENT
Bank premises and equipment at December 31, 1995 and 1994 is
summarized as follows:
1995 1994
--------- ----------
(In thousands)
Bank buildings and improvements $6,129 $6,129
Equipment, furniture and fixtures 1,218 1,178
------- -------
7,347 7,307
Less accumulated depreciation 2,434 2,131
------- -------
4,913 5,176
Land 456 456
------- -------
$5,369 $5,632
======= =======
In March 1995, the Financial Accounting Standards Board issued Statement
No. 121, Accounting for the Impairment of Long-Lived Assets and for
Long-Lived Assets to be Disposed of (FAS No. 121). The Bank is required
to adopt FAS No. 121 in its fiscal year beginning January 1, 1996, the
effect of which management estimates will not have a material impact on
the Bank's statements of condition or income.
NOTE G - EMPLOYEE BENEFIT PLANS
The Bank has a non-contributory defined benefit pension plan
covering employees who have attained age 20 1/2 and have
completed six months of service. The plan's benefit formula is
based upon an average final compensation method. Pension costs
are funded to the extent they are deductible for federal income
tax purposes and meet ERISA funding standards. Plan assets
consist primarily of government notes, government agency and
corporate bonds.
<PAGE> 119
Bank of Weirton
NOTES TO FINANCIAL STATEMENTS - CONTINUED
December 31, 1995, 1994 and 1993
(Data related to December 31, 1994 and 1993 is unaudited)
- -----------------------------------------------------------------------------
NOTE G - EMPLOYEE BENEFIT PLANS - Continued
A schedule of the funded status of the plan as of December 31, follows:
(In thousands) 1995 1994
------ ------
Accumulated benefit obligation including vested
benefits of $3,458 and $3,185 at December 31, 1995
and 1994, respectively $ 3,570 $ 3,280
Effects of projected future compensation increases 307 239
--------- ---------
Projected benefit obligation 3,877 3,519
Plan assets at fair value 3,551 3,183
--------- ---------
Under-funded status 326 336
Unrecognized net gain 368 361
Prior service cost not yet recognized (67) (78)
Remaining unrecognized net obligation
at date of adoption of FAS 87 (185) (216)
--------- ---------
Accrued liability at December 31, 1995 $ 442 $ 403
========= =========
The assumed rate of return at on assets was 8.5%, 8.0% and 8.0%
in 1995, 1994 and 1993, respectively. The rate used to
discount the projected benefit obligation was 8.0%, 7.25% and
7.25% at December 31, 1995, 1994 and 1993, respectively. Rates
of compensation increases are based on a decreasing percentage
scale as age increases. The components of net periodic pension
expense are as follows for the year ended December 31,:
(In thousands) 1995 1994 1993
---- ---- ----
Service cost $ 38 $ 43 $ 52
Interest cost 268 262 252
Return on assets (259) (261) (248)
Net amortization and deferral 41 42 41
------ ------ ------
$ 88 $ 86 $ 97
====== ====== ======
<PAGE> 120
Bank of Weirton
NOTES TO FINANCIAL STATEMENTS - CONTINUED
December 31, 1995, 1994 and 1993
(Data related to December 31, 1994 and 1993 is unaudited)
- ----------------------------------------------------------------------------
NOTE H - INCOME TAXES
Income tax expense (benefit) for the years ended December 31, 1995, 1994 and
1993 consist of the following:
1995 1994 1993
---- ---- ----
(In thousands)
Current
Federal $ 478 $ 381 $ 365
State 98 122 119
Deferred benefit (100) - -
---- ---- ----
Total $476 $503 $484
==== ==== ====
Income tax expense is less than that obtained by using the U.S. Federal
Statutory rate due to the following:
1995 1994 1993
---- ---- ----
Expected tax at statutory rate 34.0% 34.0% 34.0%
Tax exempt interest (principally on securities) (11.1) (15.2) (22.5)
State income taxes, net of federal benefit 3.4 2.6 3.0
AMT credit carryforward recognized (4.6) (.8) -
Effect of change in valuation allowance
and other (3.3) (2.0) 6.0
---- ---- ----
Effective tax rate 18.4% 18.6% 20.5%
==== ==== ====
<PAGE> 121
Bank of Weirton
NOTES TO FINANCIAL STATEMENTS - CONTINUED
December 31, 1995, 1994 and 1993
(Data related to December 31, 1994 and 1993 is unaudited)
- ----------------------------------------------------------------------------
NOTE H - INCOME TAXES - Continued
Deferred tax assets and liabilities consist of the following at
December 31,:
1995 1994
---- ----
(In thousands)
Deferred tax assets arising from temporary differences
related to:
Allowance for possible loan losses $ 99 $ 96
Depreciation of premises and equipment 66 58
Alternative minimum tax and other tax
credit carryforwards 1,321 1,439
Accrued liabilities 160 118
Less valuation allowance (1,546) (1,711)
------- -------
Net deferred tax assets $ 100 $ -
======= =======
At December 31, 1995, the Company has credits for prior year
minimum taxes of approximately $1,321,000 available in future
years to reduce regular taxes payable. The Company has
established a valuation allowance for that portion of the
carryforwards and deferred tax assets where the ultimate
recoverability is uncertain.
NOTE I - COMMITMENTS
The Company is a party to financial instruments with off-
balance sheet risk in the normal course of business to meet the
financing needs of its customers. These financial instruments
include commitments to make loans, stand-by letters of credit,
and unused lines of credit. As of December 31, 1995 and 1994,
the Bank did not own or trade any other financial instruments
with significant off-balance sheet risk, including derivatives
such as futures, forwards, option contracts or similar
instruments. The Bank uses the same credit policies in making
commitments and conditional obligations as they do for on-
balance sheet instruments. The Bank evaluates each customer's
credit-worthiness on an individual basis, and the amount of
collateral obtained is based upon credit evaluation.
Collateral may include, but is not limited to, accounts
receivable, inventory, property and equipment, stocks, bonds,
deposit accounts, real estate and vehicles. Personal
guarantees of business owners may be required.
<PAGE> 122
Bank of Weirton
NOTES TO FINANCIAL STATEMENTS - CONTINUED
December 31, 1995, 1994 and 1993
(Data related to December 31, 1994 and 1993 is unaudited)
- -----------------------------------------------------------------------------
NOTE I - COMMITMENTS - Continued
The commitments to extend credit generally have fixed
expiration dates or other termination clauses and may require
payment of a fee. As some of the commitments may not be
utilized, or utilized in amounts less than the total committed,
the total commitment amounts do not necessarily represent
future cash requirements. The estimated commitments as of
December 31, 1995 and 1994 are summarized as follows:
1995 1994
---- ----
Unused lines of credit $ 2,386 $ 2,798
Unfunded loans in process 999 1,841
Stand-by letters of credit 25 105
----- -----
$ 3,410 $ 4,744
===== =====
Since many commitments to make loans expire without being used,
the amounts above do not necessarily represent future cash
commitments. Collateral obtained upon exercise of the
commitment is determined using management's credit evaluation
of the borrower and may include commercial and residential real estate
and other business and consumer assets.
NOTE J - REGULATORY RESTRICTIONS
The Bank is required to meet specific reserve requirements
established by regulatory agencies based on withdrawable
deposits and cash on hand. At December 31, 1995 and 1994, the
amount so restricted was approximately $663,000 and $671,000.
The Bank is required to maintain minimum levels of "risked
based capital" and "leverage capital" as defined by banking
regulations. At December 31, 1995 the Bank's ratios exceed the
minimum requirements (10%) in order to be considered "well
capitalized" as defined in the Federal Deposit Insurance
Corporation Improvement Act of 1991.
West Virginia banking regulations limit the amount of
dividends, a state bank may declare in any calendar year, to
the retained net profits of that year combined with the
retained net profits for the preceding two calendar years.
Maximum dividends that could be declared amounted to
approximately $3,768,000 and $3,784,000 at December 31, 1995
and 1994.
<PAGE> 123
Bank of Weirton
NOTES TO FINANCIAL STATEMENTS - CONTINUED
December 31, 1995, 1994 and 1993
(Data related to December 31, 1994 and 1993 is unaudited)
- -----------------------------------------------------------------------------
NOTE K - FAIR VALUE OF FINANCIAL INSTRUMENTS
The financial statements include estimated fair value
information as of December 31, 1995 and 1994, as required by
Statement of Financial Accounting Standard No. 107 (FAS 107).
Such information, which pertains to the Bank's financial
instruments, is based on the requirements set forth in FAS 107
and does not purport to represent the aggregate net fair value
of the Bank. Further, the fair value estimates are based on
various assumptions, methodologies and subjective
considerations, which vary widely among different financial
institutions and which are subject to change.
The following methods and assumptions were used by the Bank in
estimating financial instrument fair values:
Cash and cash equivalents and federal funds sold
------------------------------------------------
The balance sheet carrying amounts for cash and federal
funds sold approximate the estimated fair values of such
assets.
Investment securities - Held to Maturity
----------------------------------------
Fair values for investment securities are based on quoted
market prices, if available. If quoted market prices are
not available, fair values are based on quoted market
prices of comparable instruments.
Loans
-----
For demand loans and overdrafts which entail no
significant change in credit risk, fair values are based
on the carrying values. The estimated fair values of
fixed-rate loans are estimated based on discounted cash
flow analyses using interest rates currently offered for
loans with similar terms to borrowers of similar credit
quality. The carrying amount of accrued interest
receivable approximates its fair
value.
Off-balance sheet instruments
-----------------------------
Estimated fair values for the Bank's lending commitments
are based on fees currently charged to enter into similar
agreements, considering the remaining terms of the
agreements and the counterparties' credit standing. Such
amounts are not significant.
<PAGE> 124
Bank of Weirton
NOTES TO FINANCIAL STATEMENTS - CONTINUED
December 31, 1995, 1994 and 1993
(Data related to December 31, 1994 and 1993 is unaudited)
- ----------------------------------------------------------------------------
NOTE K - FAIR VALUE OF FINANCIAL INSTRUMENTS - Continued
Deposit liabilities
-------------------
The fair values estimated for demand deposits (e.g.,
interest and non-interest bearing checking accounts, and
certain types of money market accounts) are, by
definition, equal to the amount payable on demand at the
reporting date (i.e., their carrying amounts). The
carrying amounts of variable rate time deposits
approximate their fair values at the reporting date. Fair
values of fixed rate time deposits are estimated using
discounted cash flow analyses using interest rates
currently offered to a schedule of aggregated expected
time deposit maturities. The carrying amount of accrued
interest payable approximates its fair value.
The following table presents the carrying values and estimated
fair values of the Bank's financial instruments at December 31, 1995
and 1994.
December 31, 1995
-----------------
(In thousands) Estimated
Carrying Fair
Amount Value
-------- ---------
Financial assets
----------------
Cash and due from banks $ 5,155 $ 5,155
Federal funds sold 23,000 23,000
Investments held to maturity 99,135 99,929
Loans 42,659 43,420
Financial liabilities
---------------------
Deposits
Demand, non-interest bearing 16,704 16,704
NOW and money market 26,266 26,266
Savings 58,885 58,885
Time 37,515 37,306
<PAGE> 125
Bank of Weirton
NOTES TO FINANCIAL STATEMENTS - CONTINUED
December 31, 1995, 1994 and 1993
(Data related to December 31, 1994 and 1993 is unaudited)
- -----------------------------------------------------------------------------
NOTE K - FAIR VALUE OF FINANCIAL INSTRUMENTS - Continued
December 31, 1994
-----------------
(In thousands) Estimated
Carrying Fair
Amount Value
-------- ---------
Financial assets
----------------
Cash and due from banks $ 6,236 $ 6,236
Federal funds sold 23,000 23,000
Investments held to maturity 111,075 108,180
Loans 33,613 34,839
Financial liabilities
---------------------
Deposits
Demand, non-interest bearing 18,801 18,801
NOW and money market 26,365 26,365
Savings 60,999 60,999
Time 39,203 38,984
NOTE L - SUBSEQUENT EVENT
On February 9, 1996, the Bank entered into a definitive
Agreement and Plan of Merger providing for the merger of the
Bank with Wesbanco Inc. Under the terms of the definitive
Agreement and Plan of Merger, Wesbanco Inc. will exchange 130
shares of Wesbanco Inc. common stock for each share of the
Bank's common stock. The merger, which is subject to, among
other things, approval by the appropriate regulatory
authorities and the stockholders of the Bank, is expected to be
completed during the third quarter of 1996.
<PAGE> 126
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
- ----------------------------------------------------------------------------
BANK OF WEIRTON THREE YEARS IN THE PERIOD ENDED DECEMBER 31, 1995
EARNINGS REVIEW
- ---------------
Net income for 1995 was $2.1 million, down slightly from $2.2
million in 1994. However, this was a $239 thousand increase
over 1993's income of $1.9 million. Earnings per share was
$162.71 in 1995 compared to $168.87 in 1994 and $144.29 in
1993. Return on average assets, the most common measurement of
bank profitability, remained constant and 1.18% in 1995 and
1994, compared to 1.01% in 1993.
Net interest income, the most significant component of
earnings, is the amount by which interest generated from
earning assets exceeds interest expense on deposits. Net
interest income was $5.48 million in 1995 down from $5.66
million in 1994 but increased from $5.27 million in 1993. A
decrease in net interest margin (on a tax equivalent basis) of
six basis points in 1995, partially offset by an increase of
almost $10 million in average loans, was the primary cause for
the decline in net interest income of $181 thousand from 1994
to 1995. Net interest income in 1994 increased by $396 thousand
over 1993 due to an increase of four basis points in the net
interest margin combined with an increase in average
outstanding loans of almost $6 million.
Total interest earning assets declined in 1995 from 1994 due to
reduced levels of federal funds sold and investments. Maturing
investments and federal funds were used to fund deposit runoffs
and loan growth. Net earning assets increased from 1993 to
1994 due to loan growth and a slight increase in deposits.
Substantially all loan are made at fixed rates with maximum
maturities of twenty-five years. As interest rates rose during
the latter part of 1994 and into 1995, average rates on loans
and federal funds increased. This was offset by similar
increases in cost of certificates of deposit and an increase in
passbook savings interest of one-half of one percent in March,
1995.
The following is an analysis of the average balance sheets and
net interest income, on a tax equivalent basis for 1993 to
1995.
<PAGE> 127
<TABLE>
<CAPTION>
Average Balance Sheets and Net Interest Analysis
----------------------------------------------------------------------------------------------
1995 1994 1993
----------------------------------------------------------------------------------------------
Average Income/ Yield or Average Income/ Yield or Average Income/ Yield or
Balance(a) Expense Rate (b) Balance(a) Expense Rate (b) Balance(a) Expense Rate (b)
--------- ------- -------- --------- ------- -------- --------- ------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Assets (Dollar Amounts in Thousands)
------
Interest-earning assets:
Investment securities $104,956 $ 6,229 5.93% $114,150 $ 6,791 5.95% $104,854 $ 7,130 6.80%
Federal funds sold 22,238 1,349 6.07% 31,212 1,295 4.15% 42,638 1,328 3.11%
Loans, net of unearned income 39,007 3,056 7.83% 29,345 2,284 7.78% 23,533 2,025 8.60%
------- ------ ---- ------- ------ ---- ------- ------ ----
Total interest-earning assets 166,201 10,634 6.40% 174,707 10,370 5.94% 171,025 10,483 6.13%
------- ------ ---- ------- ------ ---- ------- ------ ----
Noninterest-earning assets
Average cash & other assets 14,979 12,614 16,739
Reserve for loan losses (497) (416) (421)
------- ------- -------
Total noninterest-earning assets 14,482 12,198 16,318
------- ------- -------
Total Assets $180,683 $186,905 $187,343
======= ======= =======
Liabilities and Shareholders' Equity
- ------------------------------------
Interest-bearing liabilities:
Interest-bearing demand deposits $ 27,023 $ 866 3.20% $ 28,361 $ 816 2.88% $ 28,090 $ 817 2.91%
Savings Deposits 59,571 2,205 3.70% 61,377 1,864 3.04% 58,614 1,875 3.20%
Time Deposits 36,277 1,629 4.49% 42,322 1,352 3.19% 47,190 1,651 3.50%
------- ----- ---- ------- ----- ---- ------- ----- ----
Total interest-bearing liabilities 122,871 4,700 3.83% 132,060 4,032 3.05% 133,894 4,343 3.24%
------- ----- ---- ------- ----- ---- ------- ----- ----
Noninterest-bearing liabilities:
Noninterest-bearing deposits
and other liabilities 21,496 19,907 19,965
Shareholders' Equity 36,316 34,938 33,754
------- ------- -------
Total noninterest-bearing
funding sources 57,812 54,845 53,449
------- ------- -------
Total Liabilities and
Shareholders' Equity $180,683 $186,905 $187,343
======= ======= =======
Interest Spread 2.57% 2.89% 2.89%
==== ==== ====
Net Interest Income and Net
Yield on Interest-earning Assets $5,934 3.57% $6,338 3.63% $6,140 3.59%
===== ==== ===== ==== ===== ====
(a) Averages principally calculated on a weekly basis which, in the opinion
of management, approximates daily averages.
(b) Yields on interest-earning assets have been computed on a tax equivalent
basis using the 34% Federal income tax statutory rate in all years.
</TABLE>
<PAGE> 128
<TABLE>
<CAPTION>
The following is a summary of the changes in net interest
income due to rates and volumes. Net interest income is
computed on a tax equivalent basis.
Analysis of Year-to-Year Changes in Net Interest Income
------------------------------------------------------------------
1995 Change from 1994 1994 Change from 1993
------------------------------- -------------------------------
Total Change Due Change Due Total Change Due Change Due
Change to Volume to Rate Change to Volume to Rate
------- ---------- ---------- ------- ---------- ----------
(Dollar Amounts in thousands)
Interest-earning assets:
<S> <C> <C> <C> <C> <C> <C>
Investment securities $ (562) $ (547) $ (15) $ (339) $ 632 $ (971)
Federal funds sold 54 (372) 426 (33) (355) 322
Loans 772 752 20 259 500 (241)
---- ---- ---- ---- ---- ----
Total Interest Income 264 (167) 431 (113) 777 (890)
---- ---- ---- ---- ---- ----
Interest-bearing liabilities:
Interest bearing demand deposits $ 50 $ (39) $ 89 $ (1) $ 8 $ (9)
Savings deposits 341 (55) 396 (11) 88 (99)
Time deposits 277 (193) 470 (299) (170) (129)
---- ---- ---- ---- ---- ----
Total Interest Expense 668 (287) 955 (311) (74) (237)
---- ---- ---- ---- ---- ----
Net Interest Income $ (404) $ 120 $ (524) $ 198 $ 851 $ (653)
==== ==== ==== ==== ==== ====
</TABLE>
PROVISION FOR LOAN LOSSES
- -------------------------
The Bank's policy is to provide allowances for loan losses to
adequately protect the bank against potential unidentified or
known loan losses consistent with prudent banking practice and
regulatory guidelines. Historically the Bank has experienced an
insignificant level of net charge-offs which compares favorably
with its peers. The bank has provided $18 thousand for
possible loan losses in each of the three years ended December
31, 1995. As a majority of the loans consist of well secured
single family residential mortgages, management does not
anticipate the need to substantially increase the allowance for
loan losses in the near future. Loan growth is anticipated to
focus on mortgage and commercial lending in the Bank's
traditional market area surrounding Weirton, WV. Management
continues to focus its lending under existing guidelines that
limit higher risk or out of area loans. Management believes the
allowance for possible loan losses is adequate to support
future loan growth.
The following tables summarize the Bank's charge-off and
recovery history and past due and non-performing loans at
December 31, 1993, 1994 and 1995. The adoption of Statement of
Financial Accounting Standard No. 114 "Accounting by Creditors
for Impairment of a Loan" in 1995 did not have a material
impact on the financial statements of the bank as there were no
non-accrual or impaired loans as of December 31, 1995.
<PAGE> 129
Changes in allowance for Possible Loan Loss
-------------------------------------------
1995 1994 1993
---- ---- ----
(Dollar Amounts in Thousands)
Beginning balance $ 643 $ 632 $ 670
Charge offs
Commercial (173) - (42)
Installment (11) (8) (19)
Recoveries
Commercial 173 - -
Installment 42 1 5
---- ---- ----
Net (charge-offs) recoveries 31 (7) (56)
Provision charged to
expense 18 18 18
---- ---- ----
Ending balance $ 692 $ 643 $ 632
==== ==== ====
Allowance for loan losses as a
percentage of average loans 1.77% 2.19% 2.69%
==== ==== ====
Nonperforming Loans and Effect on Interest
Income Due to Nonaccrual
------------------------------------------
1995 1994 1993
---- ---- ----
(Dollar Amounts in Thousands)
Loans on nonaccrual basis $ - $ 174 $ 174
Past due loans (over 90 days) 28 21 192
Renegotiated loans - - -
--- --- ---
Total nonperforming loans $ 28 $ 195 $ 366
==== === ===
Nonperforming loans as percentage
of total loans 0.06% 0.57% 1.55%
==== ==== ====
692 643 632
Reserve as a percentage of
nonperforming loans 2471% 330% 173%
==== === ===
Gross income that would have been
recorded at original rates 1 17 25
Interest that was reflected in income 1 1 9
---- ---- ----
Net reduction in interest income due
to nonaccrual $ - $ 16 $ 16
==== ==== ====
<PAGE> 130
The following table shows the allocation of the allowance for
possible loan losses at December 31, 1995 and 1994.
Information for prior years is not available.
Allocation of Loan Loss Allowance
----------------------------------------
1995 1994
------------------ -------------------
Amount Percent Amount Percent
-------- -------- -------- ---------
(Dollars Amounts in Thousands)
Commercial and Land development $ 17 2% $ 16 3%
Loans secured by 1-4 family
residential 150 22% 120 19%
Other real estate loans 105 15% 60 9%
Commercial and Industrial 70 10% 80 12%
Loans to individuals 50 7% 40 6%
Other loans 10 2% 50 8%
Unallocated 290 42% 277 43%
--- --- --- ---
Totals $ 692 100% $ 643 100%
=== === === ===
OTHER OPERATING EXPENSES
- ------------------------
Non-interest expense decreased $83 thousand to $3.143 million
in 1995 compared to $3.226 million in 1994. This contrasts
with an increase in other operating expenses in 1994 of $64
thousand compared to 1993. As a percentage of average assets,
other operating expenses were 1.75%, 1.74% and 1.70% in 1995,
1994 and 1993, respectively. These ratios compare favorably
with the Bank's peers. The bank had 39 full time equivalent
employees as of December 31, 1995 which has not changed
significantly in recent years. 1995 also benefited from
reduced levels of FDIC insurance beginning June 1 at the rate
of $.04 per $100 of deposits which reduced this expense $173
thousand in 1995. The reduced level of premium is expected to
continue through the second quarter of 1996. Other expenses
increased nominally from 1994 to 1995 and from 1993 to 1994 due
primarily to increased maintenance expenses and real estate
taxes.
PROVISION FOR INCOME TAXES
- --------------------------
Income tax expense for 1995 was $476 thousand compared to $503
in 1994 and $484 in 1993. The effective tax rate was 18.4%,
18.6% and 20.5%, respectively. The reduced effective rate in
1995 and 1994 compared to 1993 was due principally to
utilization of alternative minimum tax credit carryforwards
which had not been previously recognized as deferred tax
assets. (See note H to the financial statements.) Beginning in
1995, the Bank has reduced its valuation allowance for deferred
tax assets as it has started to utilize the tax credit
carryforwards and anticipates continued usage in the future.
<PAGE> 131
STATEMENTS OF CONDITION
- -----------------------
Total assets at December 31, 1995 declined to $177 million from
$182 million at December 31, 1994 or two and one-half percent.
This decline was primarily caused by a decline in deposits from
1994 to 1995, although deposits have increased subsequent to
December 31, 1995. Beginning in 1993 the Bank has had
significant growth in loans, principally residential real
estate. This growth has been funded by maturing investments
and available federal funds sold.
The following tables summarize loans outstanding by
classification for the last three years and maturites and
sensitivities to changes in interest rates as of December 31,
1995. Bank management expects to continue to focus its efforts
on loan growth in its traditional lending area surrounding
Weirton, West Virginia.
Loans By Classification
----------------------------------------------------
1995 1994 1993
----------------- ----------------- ----------------
Amount Percent Amount Percent Amount Percent
------- -------- ------- -------- ------- -------
(Dollars Amounts in Thousands)
Commercial, financial,
agricultural and other $ 4,551 10% $ 4,761 14% $ 3,839 16%
Real estate-Construction 1,051 2% 841 2% 551 2%
Real estate-Commercial 4,908 12% 3,882 11% 2,643 11%
Real estate-residential 28,613 65% 21,638 62% 14,113 59%
Loans to individuals 4,877 11% 3,591 11% 2,799 12%
------ --- ------ --- ------ ---
Gross loans and leases 44,000 100% 34,713 100% 23,945 100%
=== === ===
Unearned income (649) (457) (284)
------ ------ ----
Total loans and leases,
net of unearned
income $43,351 $34,256 $23,661
====== ====== ======
Maturities of Loans
-------------------------------------------------
Within One One to After
Year 5 Years 5 Years Total
------------ ----------- --------- ---------
(Dollar Amounts in Thousands)
Commercial, financial,
agricultural and other $ 3,339 $ 1,212 $ - $ 4,551
Real estate - Construction 1,051 - - 1,051
Real estate - Commercial - 119 4,789 4,908
Other 578 6,593 26,319 33,490
------ ------ ------ ------
Totals $ 4,968 $ 7,924 $31,108 $44,000
====== ====== ====== ======
Loans at fixed interest
rates $ 7,924 $31,108
====== ======
<PAGE> 132
INVESTMENTS
- -----------
The objective of the Bank's investment portfolio is to combine
liquidity, earnings and safety in a prudent manner in
accordance with regulatory guidelines so as to protect the
depositors and generate a favorable return to the stockholders.
The Bank has historically invested only in U.S. Treasury
securities and Municipal Securities.
Beginning in 1993 the Bank began to reduce its investments in
municipal securities in order to accelerate taxable income in
order to utilize existing alternative minimum tax credit
carryforwards. This trend continued through 1995. As existing
securities mature, the funds will be proportionally reinvested
or used to fund anticipated loan growth.
The following table summarizes investment maturities at
December 31, 1995.
Maturity Distribution of Investment Securities
----------------------------------------------
U.S. Treasury
and other U.S.
Government States and Weighted
Agencies and Political Total Book Average
Corporations Subdivisions Value Yield*
------------- ------------ ---------- --------
Within 1 year $ 34,491 $ 1,500 $ 35,991 7.52%
After 1 but within 5 years 51,340 3,000 54,340 7.07%
After 5 but within 10 years - 8,404 8,404 8.15%
After 10 years - 400 400 7.58%
------ ------ ------ ----
Total $ 85,831 $ 13,304 $ 99,135 7.32%
====== ====== ====== ====
December 31, 1994 $ 94,770 $ 16,305 $ 111,075
====== ====== =======
December 31, 1993 $ 88,206 $ 22,015 $ 110,221
====== ====== =======
* Yields are calculated on a tax-equivalent basis.
ASSET AND LIABILITY MANAGEMENT
- ------------------------------
In general, financial institutions are vulnerable to an
increase in interest rates to the extent interest bearing
liabilities mature or reprice more rapidly than interest
earning assets. The lending activities of the Bank have
historically emphasized five to twenty-five year, fixed rate
loans secured by single family residences. The primary source
of funds has been deposits, which are subject to repricing
within a shorter period of time. This factor, combined with
substantial investments in U.S. Treasury securities which
mature principally in the next three to five years, has
historically caused the Bank's net interest margin to decline
in a period of rising rates and increase in periods of lower
interest rates. This potential for future declines in net
interest income is mitigated by high levels of capital relative
to total assets, significant amounts of
<PAGE> 133
federal funds sold, which reprice daily, and savings deposits which
historically have not been sensitive to interest rate changes.
The schedule following shows the Bank's interest sensitivity
analysis as of December 31, 1995. The interest rate gaps
reported in the table result when assets are funded with
liabilities having different repricing intervals. For this
analysis, savings accounts are considered as only ten percent
sensitive to interest rate changes, therefore if short term
interest rates were to change by 100 basis points, the interest
rates on savings would change by 10 basis points.
Gap Analysis Schedule
-----------------------------------------
After 3 Months
Within 3 but within 1 Over 1
Months Year Year Total
--------- -------------- -------- -------
(Dollar Amounts in Thousands)
Interest-earning assets:
Investment securities $ 10,518 $ 25,473 $ 63,144 $ 99,135
Federal funds sold 23,000 - - 23,000
Loans 4,598 370 39,032 44,000
------- ------- ------- -------
Total interest-earning assets 38,116 25,843 102,176 166,135
======= ======= ======= =======
Interest-bearing liabilities:
Interest bearing demand
deposits $ 26,266 $ - $ - $ 26,266
Savings Deposits 5,889 - 52,996 58,885
Time Deposits 14,120 14,309 9,086 37,515
------- ------- ------- -------
Total interest-bearing
liabilities $ 46,275 $ 14,309 $ 62,082 $122,666
======= ======= ======= =======
Interest sensitivity GAP $ (8,159) $ 11,534 $ 40,094
Cumulative GAP $ (8,159) 3,375 43,469
Sensitivity Ratio 82% 106% 135%
While the traditional gap approach shows the Bank to be
liability sensitive within the next three months, net interest
margins have remained relatively stable over the last three
years, and only declined $181 thousand (6 basis points) in
1995.
LIQUIDITY AND CAPITAL RESOURCES
- -------------------------------
The Bank's liquidity is represented by cash, due from banks and
federal funds sold. It is a function of daily operating,
investing and financing cash flows. Primary sources of funds
are from deposits, payments on loans and maturities of
investment securities. Although the Bank has historically held
all securities to maturity, approximately 36% mature within one
year. When funds are invested in fixed rate U.S. Treasury
securities or municipal obligation, maturites are "laddered" in
order to provide repricing at appropriate intervals.
<PAGE> 134
While scheduled loan payments and maturing investment
securities are predictable sources of funds, deposit flows and
mortgage loan prepayments are influenced by general interest
rates, economic conditions in the Bank's market area, and
competition. The Bank has historically maintained high levels
of federal funds sold to meet loan demands and deposits
outflows. The Bank manages the pricing of its deposits to
attempt to maintain a steady deposit balance. Certificates of
deposit are more sensitive to interest rate movement, although
the Bank has been able to retain most of its maturing deposits
by offering competitive rates. Management believes that a
significant portion of maturing deposits, including
certificates issued in amounts over $100,000, will remain with
the Bank.
The following summarizes maturites of certificates of deposits
issued in denominations of over $100,000 at December 31, 1995
and 1994.
Maturity Distribution of Large
Certificates of Deposit
------------------------------------
1995 1994
----------------- -----------------
Amount Percent Amount Percent
------- ------- ------- -------
(Dollar Amounts in Thousands)
Remaining Maturity:
3 months or less $ 1,339 30% $ 1,717 35%
Over 3 months through 12 months 1,424 32% 2,990 61%
Over 12 months 1,670 38% 200 4%
----- ---- ----- ----
Total $ 4,433 100% $ 4,907 100%
===== ==== ===== ====
<PAGE> 135
REGULATORY CAPITAL REQUIREMENTS
- -------------------------------
Under regulations issued by the State of West Virginia and the
Federal Deposit Insurance Corporation (FDIC), the Bank is
required to maintain certain minimum capital ratios. These
ratios also limit the amounts of dividends that can be paid to
current and prior two years earnings. Under FDIC rules the
Bank's capital is measured relative to total assets and to
total risk-weighted assets which include off-balance sheet
commitments. The Bank is required to maintain total risk-based
capital of 8% of which 4% must be core capital, as defined.
Capital to total assets (leverage ratio) must generally exceed
3%. The following summarizes the Bank of Weirton's capital
ratios at December 31, 1995 and 1994. (dollar amounts in
thousands)
1995 1994
---- ----
Tier I Capital: Stockholders' Equity $ 36,957 $ 35,674
Tier II Capital: Allowable allowance for
loan losses 587 535
------ ------
Total Capital $ 37,544 $ 36,209
====== ======
Risk Weighted Assets $ 46,972 $ 42,873
Capital ratios ====== ======
Tier I Risk Weighted 78.7% 83.2%
Total Risk Weighted 79.9% 84.5%
Leverage 20.6% 19.2%
Capital in excess of minimum regulatory
requirements $ 31,577 $ 30,102
====== ======
Undivided Profits available for dividends $ 3,768 $ 3,784
====== ======
INFLATION AND CHANGING PRICES
- -----------------------------
Substantially all the Bank's assets and liabilities are
monetary in nature, therefore interest rates have a more
significant impact on financial results than the effects of
general levels of inflation. Inflation can more directly impact
non interest expenses such as salaries, employee benefits and
supplies. These expenses are monitored by management on an
ongoing basis.
<PAGE> 136
APPENDIX I
W.Va. Code Annot. Section 31-1-123
(a) Any shareholder electing to exercise his right to
dissent, pursuant to section one hundred twenty-two ( 31-1-122)
of this article, shall file with the Corporation, prior to or at
the meeting of shareholders at which such proposed corporate
action is submitted to a vote, a written objection to such
proposed corporate action. If such proposed corporate action be
approved by the required vote and such shareholder shall not have
voted in favor thereof, such shareholder may, within ten days
after the date on which the vote was taken or if a corporation is
to be merged without a vote of its shareholders into another
corporation, any of its shareholders may, within fifteen days
after the plan of such merger shall have been mailed to such
shareholders, make written demand on the Corporation, or, in the
case of a merger or consolidation, on the surviving or new
corporation, domestic or foreign, or payment of the fair value of
such shareholder's shares, and, if such proposed corporate action
is effected, such corporation shall pay to such shareholder, upon
surrender of the certificate or certificates representing such
shares, the fair value thereof as of the day prior to the date on
which the vote was taken approving the proposed corporate action,
excluding any appreciation or depreciation in anticipation of
such corporate action. Any shareholder failing to make demand
within the ten-day period shall be bound by the terms of the
proposed corporate action. Any shareholder making such demand
shall thereafter be entitled only to payment as in this section
provided and shall not be entitled to vote or to exercise any
other rights of a shareholder.
(b) No such demand may be withdrawn unless the Corporation
shall consent thereto. If, however, such demand shall be
withdrawn upon consent, or if the proposed corporate action shall
be abandoned or rescinded or the shareholders shall revoke the
authority to effect such action, or if, in the case of a merger,
on the date of the filing of the articles of merger, the
surviving corporation is the owner of all the outstanding shares
of the other corporations, domestic and foreign, that are parties
to the Merger, or if no demand or petition for the determination
of fair value by a court of general civil jurisdiction have been
made or filed within the time provided in subsection (e) of this
section, or if a court of general civil jurisdiction shall
determine that such shareholder is not entitled to the relief
provided by this section, then the right of such shareholder to
be paid the fair value of his shares shall cease and his status
as a shareholder shall be restored, without prejudice to any
corporate proceedings which may have been taken during the
interim.
(c) Within ten days after such corporate action is
effected, the corporation, or, in the case of a merger or
consolidation, the surviving or new corporation, domestic or
foreign, shall give written notice thereof to each dissenting
shareholder who has made demand as herein provided, and shall
make a written offer to each shareholder to pay for such shares
at a specified price deemed by such Corporation to be fair value
thereof. Such notice and offer shall be accompanied by a balance
sheet of the Corporation the shares of which the dissenting
shareholder holds, as of the latest available date and not more
than twelve months prior to the
<PAGE> 137
making of such offer, and a profit and loss statement of such corporation
for the twelve months' period ended on the date of such balance sheet.
(d) If within thirty days after the date on which such
corporate action is effected the fair value of such shares is
agreed upon between any such dissenting shareholder and the
Corporation, payment therefor shall be made within ninety days
after the date on which such corporate action was effected, upon
surrender of the certificate or certificates representing such
shares. Upon payment of the agreed value, the dissenting
shareholder shall cease to have any interest in such shares.
(e) If within such period of thirty days, a dissenting
shareholder and the corporation do not so agree, then the
corporation shall within thirty days after receipt of written
demand from any dissenting shareholder, which written demand must
be given within sixty days after the date on which such corporate
action was effected, file a complaint in a court of general civil
jurisdiction requesting that the fair value of such shares be
found and determined, or the corporation may file such complaint
at any time within such sixty-day period at its own election.
Such complaint shall be filed in any court of general civil
jurisdiction in the county in which the principal office of the
corporation is situated, or, if there be no such office in this
State, in the county in which any dissenting shareholder resides
or is found or in which the property of such corporation, or any
part of it, may be. If the corporation shall fail to institute
such proceedings, any dissenting shareholder may do so in the
name of the Corporation. All dissenting shareholders wherever
residing, may be made parties to the proceedings as an action
against their shares quasi in rem. A copy of the complaint shall
be served on each dissenting shareholder who is a resident of
this State in the same manner as in other civil actions.
Dissenting shareholders who are nonresidents of this State shall
be served a copy of the complaint by registered or certified
mail, return receipt requested. In addition, service upon such
nonresident shareholders shall be made by publication, as
provided in Rule 4(e)(2) of the West Virginia Rules of Civil
Procedures. All shareholders who are parties to the proceeding
shall be entitled to judgment against the Corporation for the
amount of the fair value of their shares. The court may, if it
so elects, appoint one or more persons as appraisers to receive
evidence and recommend a decision on the question of fair value.
The appraisers shall have such power and authority as shall be
specified in the order of their appointment or any subsequent
appointment. The judgment shall be payable only upon and
concurrently with the surrender to the Corporation of the
certificate or certificates representing such shares. Upon
payment of the judgment, the dissenting shareholder shall cease
to have any interest in such shares.
The judgment shall include an allowance for interest at such
rate as the court may find to be fair and equitable in all the
circumstances, from the date on which the vote was taken on the
proposed corporate action to the date of payment.
The costs and expenses of any such proceeding shall be
determined by the court and shall be assessed against the
Corporation, but all or any part of such costs and expenses may
be apportioned and assessed as the court may deem equitable
against any or all of the dissenting shareholders who are parties
to the proceeding to whom the Corporation shall have made an
offer to pay for the shares if the Court shall find that the
action of such shareholders in failing to
<PAGE> 138
accept such offer was arbitrary or vexatious or not in good faith. Such
expenses shall include reasonable compensation for and reasonable expenses of
the appraisers, but shall exclude the fees and expenses of
counsel for any experts employed by any part; but if the fair
value of the shares as determined materially exceeds the amount
which the corporation offered to pay therefore, or if no offer
was made, the court in its discretion may award to any
shareholder who is a party to the proceeding such sum as the
court may determine to be reasonable compensation to any expert
or experts employed by the shareholder in the proceeding. Any
party to the proceeding may appeal any judgment or ruling of the
court as in other civil cases.
(f) Within twenty days after demanding payment for his
shares, each shareholder demanding payment shall submit the
certificates representing his shares to the Corporation for
notation thereon that such demand has been made. His failure to
do so shall, at the option of the Corporation, terminate his
rights under this section unless a court of general civil
jurisdiction, for good and sufficient cause shown, shall
otherwise direct. If shares represented by a certificate on
which notation has been so made shall be transferred, each new
certificate issued therefor shall bear similar notation, together
with the name of the original dissenting holder of such shares,
and a transferee of such shares shall acquire by such transfer no
rights in the Corporation other than those which the original
dissenting shareholder had after making demand for payment of the
fair value thereof.
(g) Shares acquired by a corporation pursuant to payment of
the agreed value therefor or to payment of the judgment entered
therefor, as in this section provided, may be held and disposed
of by such corporation as in the case of other treasury shares,
except that, in the case of a merger or consolidation, they may
be held and disposed of as the plan of merger or consolidation
may otherwise provide.
<PAGE> 139
APPENDIX II
-----------
AGREEMENT AND PLAN OF MERGER
----------------------------
THIS AGREEMENT AND PLAN OF MERGER (hereinafter called
"Agreement"), made and entered into as of the 8th day of
Februrary, 1996, by and between WESBANCO, INC., a West
Virginia corporation, with its principal place of business
located at Bank Plaza, Wheeling, West Virginia (hereinafter
called "Wesbanco"), party of the first part, and BANK OF
WEIRTON, a West Virginia banking corporation, with its
principal place of business located at 333 Penco Road,
Weirton, West Virginia, 26062, (hereinafter called
"Weirton") party of the second part, and WESBANCO BANK
WHEELING (hereinafter called "Wheeling"), a West Virginia
banking corporation and a wholly-owned subsidiary of
Wesbanco, party of the third part.
WHEREAS, Wesbanco is a West Virginia corporation duly
organized and validly existing under the laws of the State
of West Virginia, and is a registered bank holding company
under the Bank Holding Company Act of 1956, as amended, and
WHEREAS, Weirton is a West Virginia banking corporation
duly organized and validly existing under the laws of the
State of West Virginia, and
WHEREAS, Wheeling is a West Virginia banking
corporation duly organized and validly existing under the
laws of the State of West Virginia which corporation shall
be a party to the merger contemplated by this Agreement, and
WHEREAS, the Board of Directors of Wesbanco, by a
majority vote of all the members thereof, has approved this
Agreement and has authorized the execution hereof in
counterparts; the Board of Directors of Wheeling by a
majority vote of all of the members and shareholders
thereof, has approved this Agreement and authorized the
execution hereof in counterparts, and
<PAGE> 140
WHEREAS, the Board of Directors of Weirton, by a
majority vote of all of the members thereof, has approved
this Agreement and has determined that, subject to all of
the conditions of this Agreement, including but not limited
to the requirement that certain tax rulings and fairness
opinions be obtained, it would be in the best interests of
Weirton and its shareholders for Weirton to enter into this
Agreement to become affiliated with Wesbanco, and
WHEREAS, it is proposed that Wesbanco, Weirton and
Wheeling enter into this Agreement whereby Weirton will
merge with and into Wheeling and the outstanding shares of
common stock of Weirton ("Weirton Common Stock") will be
converted into shares of common stock of Wesbanco ("Wesbanco
Common Stock"),
NOW, THEREFORE, for and in consideration of the mutual
promises and covenants hereinafter set forth, and in
accordance with the provisions of applicable law, and
intending to be legally bound hereby, the parties hereto do
hereby agree as follows:
SECTION 1
---------
WHEELING
--------
1.1 Execution of Agreement. Wesbanco shall cause
Wheeling to take all necessary and proper action to ratify,
approve, adopt and execute the Agreement and to undertake
the performance of all of the terms and conditions of the
Agreement to be performed by Wheeling.
1.2 Voting of Wheeling Shares. Wesbanco, as sole
shareholder of Wheeling, shall vote all of the shares of
Wheeling in favor of the Merger.
<PAGE> 141
SECTION 2
---------
THE MERGER
----------
2.1 The Merger. At the Effective Time (as defined in
Section 2.5), subject to the provisions of this Agreement,
Weirton shall merge with Wheeling (the "Merger"), under the
charter of Wheeling. Wheeling shall be the surviving
corporation (hereinafter sometimes called the "Surviving Corporation").
2.2 Effect of Merger. At the Effective Time, the
corporate existence of Wheeling, with all of its purposes,
powers and objects, and all of its rights, assets,
liabilities and obligations, shall continue unaffected and
unimpaired by the Merger, and Wheeling as the Surviving
Corporation shall continue to be governed by the laws of the
State of West Virginia. Wheeling as the Surviving
Corporation shall also succeed to all of the rights, assets,
liabilities and obligations of Weirton in accordance with
the West Virginia Corporation Act ("WVCA"). Upon the
Effective Date, (as defined in Section 11.5 hereof), the
separate existence and corporate organization of Weirton
shall cease.
2.3 Closing. Wesbanco, Weirton and Wheeling will
jointly request the Secretary of State of West Virginia to
issue a Certificate of Merger on the date of the closing
described in Section 11.4 hereof (the "Closing" and the
"Closing Date").
2.4 Weirton's Obligations. Weirton shall at any time,
or from time to time, as and when requested by the Surviving
Corporation, or by its successors and assigns, execute and
deliver, or cause to be executed and delivered in its name
by its last acting officers, or by the corresponding
officers of the Surviving Corporation, all such conveyances,
assignments, transfers, deeds, or other instruments, and
<PAGE> 142
shall take or cause to be taken such further or other action
as the Surviving Corporation, its successors or assigns, may
deem necessary or desirable in order to evidence the
transfer, vesting or devolution of any property, right,
privilege or franchise or to vest or perfect in or confirm
to the Surviving Corporation, its successors and assigns,
title to and possession of all the property, rights,
privileges, powers, immunities, franchises and interests
referred to in this Agreement and otherwise to carry out the
intent and purposes hereof, all at the expense of the
Surviving Corporation.
2.5 Articles of Merger. Subject to the terms and
conditions herein provided, Articles of Merger,
incorporating this Agreement, shall be executed to comply
with the applicable filing requirements of the WVCA at the
Closing and on the Closing Date. On the Closing Date, such
Articles of Merger shall be filed with the Secretary of
State of the State of West Virginia, who will duly issue a
Certificate of Merger. The Surviving Corporation shall
record said Certificate of Merger in the offices of the
Clerks of the County Commissions of Ohio and Hancock
Counties. The Merger shall become effective on the date
(the "Effective Date") and at the time (which time is
hereinafter called the "Effective Time") when such
Certificate of Merger is issued by the Secretary of State.
SECTION 3
---------
ARTICLES OF INCORPORATION;
BYLAWS; BOARD OF DIRECTORS AND OFFICERS
---------------------------------------
3.1 Wheeling. The Articles of Incorporation of
Wheeling, as organized, shall constitute the Articles of
Incorporation of the Surviving Corporation. The Bylaws of
Wheeling as in effect on the Effective Date shall constitute
the Bylaws of the Surviving Corporation. The directors and
officers of Wheeling on the Effective Date shall become the
directors and officers of the Surviving Corporation, except
that George M. Molnar and Donald R. Donell shall be elected,
<PAGE> 143
as of the Effective Date, as additional Directors of
Wheeling. Any vacancy in the Board of Directors or officers
may be filled in the manner provided in the Bylaws of the
Surviving Corporation. The directors and officers shall
hold office as prescribed in the Bylaws.
3.2 Wesbanco Directors. Wesbanco covenants and agrees
that as of the Effective Date it will appoint as directors
of Wesbanco George M. Molnar and R. Peterson Chalfant, or, if one or
more of them should be unwilling or unable to serve, a person or
persons to be designated by Weirton ("Substituted Person"),
and acceptable to Wesbanco. Such individuals shall serve
until the next annual meeting of shareholders, and Wesbanco
shall include such persons on the list of nominees for the
position of director presented by the Wesbanco Board of
Directors and for which said Board shall solicit proxies at
its next annual meeting of shareholders, with such persons
to be nominated for such terms as are available under
Wesbanco's Bylaws, except that such Directors shall be
elected to separate classes of Wesbanco's classified Board
of Directors to the extent feasible; and provided that in
the event that one or more of the Weirton nominees are
nominated as set forth above by the Wesbanco Board of
Directors for less than full three year terms, upon the
expiration of any such lesser term, Wesbanco covenants and
agrees that it will again include such person or persons on
the list of nominees for the position of Wesbanco director
presented by its Board of Directors for a full three year
term and shall solicit proxies for said person or persons
for the annual meeting or meetings of shareholders at which
such election or elections shall be held.
3.3 Wesbanco Executive Committee. Wesbanco also
covenants and agrees that as of the Effective Date it
will appoint George M. Molnar as a member of the Executive
<PAGE> 144
Committee of the Board of Directors of Wesbanco, and covenants and
agrees that it will continue to appoint or elect George M. Molnar
(or the designated Substituted Person for the said George M.
Molnar if he should be unable to serve) for so long as at
least one person serves as a Director of Wesbanco pursuant
to the requirements of Section 3.2. If the foregoing named
individual or his Substituted Person should be unwilling or
unable to serve as such, then Wesbanco shall appoint the
next Substituted Person as designated pursuant to Section
3.2, to such Executive Committee.
SECTION 4
---------
SHAREHOLDER APPROVALS
---------------------
4.1 Weirton Shareholders' Meeting. Subject to the
receipt by Weirton of the fairness opinion described in
Section 11.3(c) hereof, Weirton shall submit the Agreement
to its shareholders in accordance with the WVCA at a meeting
duly called, properly noticed and held at the earliest
practicable date (considering the regulatory approvals
required to be obtained) after the receipt of such opinion.
In connection with such meeting, Weirton shall send to its
shareholders the Proxy Statement referred to in Section 13.1
hereof. Subject to the fiduciary duties of the Board of
Directors of Weirton to Weirton and its shareholders, the
Board of Directors of Weirton shall recommend a vote in
favor of the Merger and shall use its best efforts to obtain
at such meeting the affirmative vote of the Weirton
shareholders required to effectuate the transactions
contemplated by the Agreement.
4.2 Wheeling Shareholder Meeting. Wheeling shall
promptly submit the Agreement to its shareholder, Wesbanco,
for approval in accordance with the WVCA.
<PAGE> 145
SECTION 5
---------
CONVERSION OF SHARES
--------------------
5.1 Conversion, Ratio and Option. The manner of
converting or exchanging the shares of Wheeling and Weirton
shall be as follows:
(a) Each share of Weirton Common Stock issued
and outstanding immediately prior to the Effective
Time, except shares of Weirton Common Stock
issued and held in treasury of Weirton or
beneficially owned by Wheeling or Wesbanco,
other than in a fiduciary capacity by them for
others, and shares as to which dissenters'
rights are exercised pursuant to W.Va. Code
Annot. Section 31-1-122,
shall by virtue of the Merger and at the
Effective Time of the Merger:
(i) Be exchanged for and become,
without action on the part of the holder
thereof, 130 (One Hundred Thirty) shares
of the Common Stock of Wesbanco,
having equal rights and privileges
with respect to all other Common Stock
of Wesbanco issued and outstanding as
of the Effective Time of the Merger.
(ii) No fractional shares of
Wesbanco Common Stock will be issued
in connection with the Merger. In
lieu thereof each stockholder of
Weirton otherwise entitled to a
fractional share of Wesbanco will
receive cash therefore in
<PAGE> 146
an amount based on a value of $27.00 per whole
share of Wesbanco stock, at the time
of the exchange, or at the election of
such holder, shall be entitled to
purchase the remaining fraction of
such share from Wesbanco based on such
price.
(iii) In the event of any
change in Wesbanco Common Stock by
reason of stock dividends, split-ups,
mergers, recapitalizations,
combinations, exchanges of shares or
the like, the type and number of
shares to be issued pursuant to
Section 5.1(b)(i) and (ii) hereof
shall be adjusted proportionately.
5.2 Shares Owned by Weirton, Wesbanco or Wheeling. Each
share of Weirton Common Stock issued and held in the treasury
of Weirton or beneficially owned by Wesbanco or Wheeling, other
than in a fiduciary capacity, at the Effective Time of the
Merger shall be canceled and retired, and no shares of stock or
the securities of Wesbanco shall be issuable with respect
thereto.
5.3 Exchange for Stock. On and after the Effective Date
of the Merger, each holder of Weirton Common Stock, upon
presentation and surrender of a certificate or certificates
therefore to the Exchange Agent (Wheeling), shall be entitled
to receive in exchange therefore a certificate or certificates
representing the number of shares of Wesbanco Common Stock to
which he or she is entitled as provided herein, and payment in
cash for any fractional share of common stock which he or she
is entitled to receive, without interest, should such shareholder
<PAGE> 147
not elect to purchase the remaining fraction of
such share of common stock at the price above set forth. Until
so presented and surrendered in exchange for a certificate
representing Wesbanco Common Stock, each certificate which
represented issued and outstanding shares of Weirton Common
Stock immediately prior to the Effective Time shall be deemed
for all purposes to evidence ownership of the number of shares
of Wesbanco Common Stock into which such shares of stock have
been converted pursuant to the Merger. Until surrender of such
certificates in exchange for certificates representing the
converted stock, the holder thereof shall not receive any
dividend or other distribution payable to holders of shares of
such stock; provided, however, that upon surrender of such
certificates representing such converted stock in exchange for
certificates representing the stock into which it has been
converted, there shall be paid to the record holder of the
certificate representing Wesbanco Common Stock issued upon such
surrender, the amount of dividends or other distributions
(without interest) which theretofore became payable with
respect to the number of shares of such stock represented
by the certificate or certificates to be issued upon such
surrender, together with payment of cash for any fractional
share to which such holder is entitled, as above set forth.
5.4 Closing of Stock Transfer Books. On the Effective
Date, the stock transfer books of Weirton shall be closed, and
no shares of Weirton Common Stock outstanding the day prior to
the Effective Date shall thereafter be transferred.
5.5 Directors' Qualifying Shares. Immediately upon
completion of the conversion provided for above, the continuing
Directors of Weirton shall maintain at least the minimum number
of shares of common stock of Wesbanco as are required to be
held as directors'
<PAGE> 148
qualifying shares under applicable law for
continued membership on the Board of Directors of Wheeling.
SECTION 6
---------
DISSENTERS RIGHTS
-----------------
6.1 Subject to the rights of Wesbanco and Weirton, as
permitted by Section 11.1(i) of the Agreement, to terminate the
Agreement and abandon the Merger in the event that the number
of Objecting Shares (as hereinafter defined) shall exceed 10%
of the shares of Weirton issued and outstanding on the date of
the shareholders' meeting described in Sections 4.1 and 13.1 of
this Agreement and entitled to vote on this Agreement
(hereinafter, "Voting Shares"), the rights and remedies of a
dissenting shareholder under the WVCA shall be afforded to any
shareholder of Weirton who objects to the Merger in a timely
manner in accordance with the WVCA, and who takes the necessary
steps in a timely manner in accordance with the WVCA to perfect
such shareholder's rights as a dissenting shareholder (such
shareholder being hereafter referred to as a "Dissenting
Shareholder"). The Surviving Corporation will make such
payments as are required to be made to Dissenting Shareholders
in the exercise of such rights. The term "Objecting Shares"
shall mean the shares of those holders of Weirton Common Stock
who shall file written objections with respect to such shares,
in a timely manner in accordance with the WVCA, to the
Agreement, shall not vote in favor of the Agreement, and have
made written demand for the fair value of such shares within
ten days, in accordance with WVCA Section 31-1-123. The
Objecting Shares held by shareholders who do not become
Dissenting Shareholders shall be converted into Wesbanco Common
Stock in accordance with Section 5 hereof.
<PAGE> 149
SECTION 7
---------
REPRESENTATIONS, WARRANTIES AND COVENANTS OF WEIRTON
----------------------------------------------------
Weirton represents and warrants to and covenants with
Wesbanco and Wheeling, that:
7.1 Organization and Qualification of Weirton. Weirton
is a corporation duly organized, validly existing and in good
standing under the laws of the State of West Virginia and has
the full corporate power and authority to own all of its
properties and assets and to carry on its business as it is now
being conducted, and neither the ownership of its property nor
the conduct of its business requires it to be qualified to do
business in any other jurisdiction, except where the failure to
be so qualified, considering all such cases in the aggregate,
does not involve a material risk to the business, properties,
financial position or results of operations of Weirton taken as
a whole.
7.2 Authorization of Agreement. The Board of Directors
of Weirton has authorized the execution of this Agreement as
set forth herein, and subject to the approval of this Agreement
by the shareholders of Weirton as provided in the Articles of
Incorporation and Bylaws of Weirton and West Virginia Code 31-1
117, Weirton has the corporate power and is duly authorized to
merge with Wheeling pursuant to this Agreement, and this
Agreement is a valid and binding agreement of Weirton
enforceable in accordance with its terms, except as enforceability may be
subject to applicable bankruptcy, insolvency, moratorium or
other similar laws affecting the enforcement of creditors'
rights generally and to any equitable principles limiting the
right to obtain specific performance of certain obligations
thereunder.
<PAGE> 150
7.3 No Violation of Other Instruments. Subject to
obtaining any required consent (which consents will be obtained
by Weirton prior to Closing), the execution and delivery of
this Agreement do not, and the consummation of the Merger and
the transactions contemplated hereby will not, violate any
provisions of Weirton's Articles of Incorporation or Bylaws, or
any provision of, or result in the acceleration of any
obligation under, any material mortgage, deed of trust, note,
lien, lease, franchise, license, permit, agreement, instrument,
law, order, arbitration award, judgment or decree or in the
termination of any material license, franchise, lease or permit
to which Weirton is a party or by which it is bound. After the
approval of this Agreement by the shareholders of the common
stock of Weirton, the Board of Directors and the shareholders
of Weirton will have taken all corporate action required by
applicable law, the Articles of Incorporation of Weirton, its
Bylaws or otherwise to authorize the execution and delivery of
this Agreement and to authorize the Merger of Weirton and
Wheeling pursuant to this Agreement.
7.4 Financial Statements. Weirton has delivered to
Wesbanco copies of its consolidated statements of condition as
of December 31, 1995, 1994, and 1993, and its consolidated
statements of income, consolidated statements of changes in
shareholders' equity and consolidated statements of changes in
financial position for the three year period ended December 31,
1995, together with the notes thereto, accompanied by
appropriate reviews relating to the financial statements for
the three years ended December 31, 1995, 1994 and 1993, of
Grant Thorton, independent auditor, and its unaudited
consolidated statement of condition, consolidated statement of
income, consolidated statement of changes in shareholders'
equity and consolidated statement of changes in financial
condition for any interim periods ending prior to the Effective
Date. Such statements, together with the related notes to all of said
financial
<PAGE> 151
statements, present fairly the consolidated
financial position of Weirton and the consolidated results of
its operations as of the dates and for the periods ended on the
dates specified in accordance with generally accepted
accounting principles consistently applied throughout the
periods indicated, except as may be specifically disclosed in
those financial statements, including the notes to the
financial statements attached thereto and subject to normal
recurring year end adjustments.
7.5 Subsidiaries of Weirton. Weirton maintains no
subsidiary corporations.
7.6 No Action, Etc. Except as disclosed in the
Disclosure Schedule of Weirton dated not more than 30 days from
the date hereof (the "Weirton Disclosure Schedule"), and as
supplemented on the Effective Date, there are no suits,
actions, proceedings, claims or investigations (formal or
informal) pending, or to the knowledge of Weirton, threatened
against or relating to Weirton, its business or any of its
properties or against any of its officers or directors (in
their capacity as such) in law or in equity or before any
governmental agency. There are no suits, actions, proceedings,
claims or investigations against Weirton, its properties or
against any of its officers or directors (in their capacity as
such) in law or in equity or before any governmental agency
which, individually or in the aggregate, would, or is
reasonably likely to, if determined adversely to such party,
materially adversely affect the financial condition (present or
prospective), businesses, properties or operations of Weirton
or the ability of Weirton to conduct its business as
presently conducted or to consummate the transaction
contemplated hereby, and Weirton does not know of any basis for
any such action or proceeding. Except as disclosed in the
Weirton Disclosure Schedule, Weirton is not a party or subject
to any cease and desist order, agreement or similar arrangement
<PAGE> 152
with a regulatory authority which restricts its
operations or requires any action, and Weirton is not transacting
business in material violation of any applicable law, ordinance,
requirement, rule, regulation or order.
7.7 Capitalization. The authorized capital stock of
Weirton consists of 13,000 shares of common stock, par value of
$100.00 per share, of which 13,000 shares are duly authorized,
validly issued and outstanding and are fully paid and
nonassessable as of the date hereof. There are no options,
warrants, calls or commitments of any kind entitling any person
to acquire, or securities convertible into, Weirton Common
Stock.
7.8 Copies of All Contracts, Leases, Etc. Weirton has
furnished to Wesbanco true and complete copies of all material
contracts, leases and other agreements to which Weirton is a
party or by which it is bound and of all employment, pension,
retirement, stock option, profit sharing, deferred
compensation, consultant, bonus, group insurance or similar
plan with respect to any of the directors, officers or other
employees of Weirton. A list of all such documents is set forth
in the Weirton Disclosure Schedule, and as updated on the
Effective Date.
7.9 Materially Adverse Contracts. Weirton is not a party
to or otherwise bound by any contract, agreement, plan, lease,
license, commitment or undertaking which is materially adverse,
materially onerous or materially harmful to Weirton taken as a
whole. There is no breach or default by any party of or with
respect to any material provision of any material contract to
which Weirton is a party that would have a material adverse
effect upon the financial
condition, operations, results of operations, business or
prospects of Weirton taken as a whole.
7.10 Undisclosed Liabilities. Weirton has no material
liabilities other than those liabilities disclosed on or
provided for in the financial statements delivered pursuant to
Section
<PAGE> 153
7.4 hereof, or as disclosed in the Weirton Disclosure
Schedule attached hereto and made a part hereof.
7.11 Title to Properties. Except for capitalized leases,
liens and encumbrances not material to the property and liens
and encumbrances on property acquired by Weirton in
foreclosure of loans and existing at the time of foreclosure,
Weirton has good and marketable title to all of the property,
interests in properties and other assets, real and personal,
set forth in its consolidated balance sheet as of December 31,
1995, and applicable interim period balance sheet or acquired
since the date thereof, other than property disposed of since
such date, subject to no material liens, mortgages, pledges,
encumbrances or charges of any kind except liens reflected on
said balance sheet or set forth in the financial statements
delivered pursuant to Section 7.4 hereof, and all of its
material leases are in full force and effect and Weirton is not
in material default thereunder. No asset included in the
financial statements referred to above has been valued in such
statements in excess of its cost less depreciation or, in the
case of investment securities, in excess of cost, adjusted for
amortization of premiums or accretion of discounts. All
material real and tangible personal property owned by Weirton
and used or leased by Weirton in its business is in good
condition, normal wear and tear excepted, and is in good
operating order. All of such property is insured against loss
for at least 80% of the full replacement value thereof (less
applicable deductibles) by reputable insurance companies
authorized to transact business in the State of West Virginia.
7.12 Proxy Statement. The Proxy Statement referred to in
Section 13 or any amendment or supplement thereto mailed to the
holders of the common stock of Weirton will not contain any
untrue statement of a material fact concerning Weirton or omit
to state a material fact
<PAGE> 154
concerning Weirton required to be
stated therein or necessary to make the statements contained
therein, in light of the circumstances under which they were
made, not misleading with respect to Weirton, and will comply,
as to form in all material respects, with the requirements of
federal and West Virginia securities laws and any other
applicable Blue Sky Laws.
7.13 ERISA. Except as disclosed in the Weirton Disclosure
Schedule, (i) each employee benefit plan subject to Titles I
and/or IV of ERISA and established or maintained for persons
including employees or former employees of Weirton,
(hereinafter referred to as "Plan") has been maintained,
operated, administered and funded in accordance with its terms
and with all material provisions of ERISA and the Internal
Revenue Code ("IRC") applicable thereto; (ii) no event
reportable under Section 4043 of ERISA has occurred and is
continuing with respect to any Plan; (iii) no liability to PBGC
has been incurred with respect to any Plan, other than for
premiums due and payable, and all premiums required to have
been paid to PBGC as of the date hereof have and as of the
Effective Date will have been paid; (iv) no Plan has been
terminated, no proceedings have been instituted to terminate
any Plan, and no decision has been made to terminate or
institute proceedings to terminate any Plan; (v) no Plan is a
multi-employer Plan; (vi) there has been no cessation of, and
no decision has been made to cease, operations at a facility or
facilities where such cessation could reasonably be expected to
result in a separation from employment of more than 20% of the
total number of employees who are participants under any plan;
(vii) each Plan which is an employee pension plan meets the
requirements of "qualified plans" under Section 401(a) of the
IRC; (viii) no accumulated funding deficiency within the
meaning of Section 412 of the IRC or Section 302 of ERISA has
been incurred with respect to any Plan subject to the funding
standards of those provisions; (ix) with respect to each Plan,
there
<PAGE> 155
have been no prohibited transactions as defined in
Section 406 of ERISA or Section 4975 of the IRC, and there are
no actions, suits or claims with respect to the assets thereof
(other than routine claims for benefits) pending or threatened;
and (x) all required reports, descriptions and notices
(including, but not limited to, Form 5500 Annual Reports,
Summary Annual Reports and Summary Plan Descriptions) have been
appropriately filed or distributed with respect to each Plan.
7.14 Labor Disputes. Except as disclosed in the Weirton
Disclosure Schedule, Weirton is not directly or indirectly
involved in or threatened with any labor dispute, including,
without limitation, matters regarding discrimination by reason
of race, creed, sex, handicap or national origin, which would
materially and adversely affect its financial condition,
assets, businesses or operations taken as a whole. No
collective bargaining representatives represent any employees
of Weirton, and no petition for election of any collective
bargaining representative has been filed, and to the knowledge
of Weirton, no organizational campaign on behalf of any
collective bargaining unit has been undertaken by or on behalf
of the employees of Weirton.
7.15 Reserve for Possible Loan Losses. The reserve for
possible loan losses shown on the consolidated balance sheet of
Weirton as of December 31, 1995, delivered pursuant to this
Agreement is adequate in all material respects as of the
respective date thereof.
7.16 Taxes. Except as disclosed in the Weirton Disclosure
Schedule:
(a) Weirton has timely and properly filed
all Federal Income Tax Returns and all other
federal, state, municipal and other tax returns
which it is required to file, either on its own
behalf or on behalf of its employees or other
persons or entities, all such returns and reports
being true and correct
<PAGE> 156
and complete in all
material respects, and has paid all taxes,
including penalties and interest, if any, which
have become due pursuant to such returns or
reports or forms or pursuant to assessments
received by it;
(b) Neither the Internal Revenue Service
nor any other taxing authority is now asserting
against Weirton, or, to its knowledge,
threatening to assert against it, any material
deficiency or claim for additional taxes,
interest or penalty;
(c) There is no pending or, to its
knowledge, threatened examination of the Federal
Income Tax Returns of Weirton, and, except for
tax years still subject to the assessment and
collection of additional Federal income taxes
under the three year period of limitations
prescribed in IRC Section 6501(a), no tax year of
Weirton remains open to the assessment and
collection of additional material Federal Income
Taxes; and
(d) There is no pending or, to its
knowledge, threatened examination of the West
Virginia Business Franchise Tax Returns of
Weirton, and, except for tax years still subject
to the assessment and collection of additional
Business Franchise Taxes under the three year
period of limitations prescribed in W.Va. Code
Annot. Section 11-10-15, no tax year of Weirton
remains open to the assessment and collection of
additional Business Franchise Taxes.
(e) Weirton has properly accrued and
reflected on its December 31, 1995, consolidated
balance sheet, delivered pursuant to Section 7.4
<PAGE> 157
hereof, and has thereafter to the date hereof
properly accrued, and will from the date hereof
through the Closing Date properly accrue, all
liabilities for taxes and assessments, and will
timely and properly file all such federal, state,
local and foreign tax returns and reports and
forms which it is required to file, either on its
own behalf or on behalf of its employees or other
persons or entities, all such returns and reports
and forms to be true and correct and complete in
all respects, and will pay or cause to be paid
when due all taxes, including penalties and
interest, if any, which have become due pursuant
to such returns or reports or forms or pursuant
to assessments received by it, all such accruals
being in the aggregate sufficient for payment of
all such taxes and assessments.
7.17 Absence of Certain Changes. Except as may be
disclosed in the Weirton Disclosure Schedule, or except in
connection with the transactions contemplated by this
Agreement, since December 31, 1995:
(a) There has been no change in the material
assets, financial condition or liabilities
(contingent or otherwise), business, or results of
operations of Weirton which has had, or changes which in
the aggregate have had, a materially adverse effect on
such material assets, financial condition or results of
operations of Weirton taken as a whole, nor to its
knowledge, has any event or condition occurred which
may result in such change or changes;
<PAGE> 158
(b) There has not been any material damage,
destruction or loss by reason of fire, flood, accident or
other casualty (whether insured or not insured) materially
and adversely affecting the assets, financial condition,
business or operations of Weirton taken as a whole;
(c) Other than in the ordinary course of business,
Weirton has not disposed of, or agreed to dispose of, any
of its material properties or assets, nor has it leased to
others, or agreed to so lease, any of such material
properties or assets;
(d) There has not been any change in the authorized,
issued or outstanding capital stock of Weirton except as
provided for in this Agreement, nor any material change in
the outstanding debt of Weirton, other than changes due to
payments in accordance with the terms of such debt or
changes in deposits, Federal funds purchased, repurchase
agreements or other short- term borrowings in the ordinary
course of business;
(e) Except as otherwise disclosed in this Agreement,
Weirton has not granted any warrant, option or right to
acquire, or agreed to repurchase, redeem or otherwise
acquire, any shares of its capital stock or any other of
its securities whatsoever;
(f) Weirton has, and shall have at Closing,
personnel sufficient to adequately staff all key positions
within its operations. There has not been any material
increase in the compensation or fees payable by Weirton to its
<PAGE> 159
respective directors or officers for services in their
capacities as such, other than increases in the regular
course of business in accordance with past practices or
the personnel policies of Weirton;
(g) Weirton has not made any material loan or
advance other than in the ordinary course of business;
(h) Weirton has not made any expenditure or major
commitment for the purchase, acquisition, construction or
improvement of any material asset or assets which in the
aggregate would be material other than in the ordinary
course of business;
(i) Weirton has not entered into any other
material transaction, contract or lease or incurred any
other material obligation or liability other than in the
ordinary course of business; and
(j) There has not been any other event, condition or
development of any kind which materially and adversely
affects the material assets, financial condition or
results of operations of Weirton, taken as a whole, and
Weirton has no knowledge of any such event, condition or
development which may materially and adversely affect the
assets, financial condition or results of operations of
Weirton, taken as a whole.
7.18 Fidelity Bonds. Weirton has continuously maintained
fidelity bonds insuring it against acts of dishonesty by its
officers and employees in such amounts as are required by law
and as are customary, usual and prudent for banks of its size.
Since January 1, 1995, there have been no claims under such
bonds and, except as disclosed in the Weirton Disclosure Schedule,
<PAGE> 160
Weirton is not aware of any facts which would form
the basis of a claim under such bonds. Weirton has no reason to believe
that its fidelity coverage will not be renewed by the
applicable carrier on substantially the same terms as its
existing coverage.
7.19 Negative Covenants. Except as otherwise
contemplated
hereby, between the date hereof and the Effective Date, or
the time when this Agreement terminates as provided herein,
Weirton will not, except as contemplated by this Agreement,
without the prior written approval of Wesbanco:
(a) Make any change in its authorized capital
stock;
(b) Issue any shares of its common stock,
securities convertible into its common stock, or
any long term debt securities;
(c) Issue or grant any options, warrants or
other rights to purchase shares of its common
stock;
(d) Declare or pay any dividends or other
distributions on any shares of common stock other
than cash dividends which do not in the aggregate
exceed the lesser of $64.00 (Sixty-four Dollars)
per share per year (to be paid on a quarterly
basis in such proportions as are consistent with
past practices) or 45% of the after- tax income
of Weirton for the tax years in which paid;
(e) Purchase or otherwise acquire, or agree
to acquire, for a consideration any share of its
capital stock (other than in a fiduciary
capacity);
<PAGE> 161
(f) Except as otherwise contemplated by
this Agreement or as disclosed in or permitted by or
under the conditions set forth in Section 7.17(f)
above and except for any amendments required by
law, enter into or amend any employment, pension,
retirement, stock option, profit sharing,
deferred compensation, consultant, bonus, group
insurance or similar plan in respect of any of
its directors, officers or other employees for
services in their capacities as such or
materially increase its contribution to any
pension plan, except as disclosed in the Weirton
Disclosure Schedule, regarding pension or
retirement plans or increases in accordance with
past practices;
(g) Take any action materially and
adversely affecting the financial condition
(present or prospective), businesses, properties
or operations of Weirton, taken as a whole;
(h) Acquire or merge with any other company
or acquire any branch or, other than in the
ordinary course of business, any assets of any
other company;
(i) Except in the ordinary course of
business as heretofore conducted, and except as
hereinabove provided, mortgage, pledge or subject
to a lien or any other encumbrance any of its
material assets, dispose of any of its material
assets, incur or cancel any material debts or
claims, or increase any compensation or benefits
payable to its officers or employees (other than
as permitted in Sections 7.17(f) and 7.19(f)
hereof), except in the
ordinary course of business as heretofore
conducted, or take any other
<PAGE> 162
action not in the
ordinary course of its business as heretofore
conducted or incur any material obligation or
enter into any material contract; or
(j) Amend its Articles of Incorporation or
Bylaws, except as may be necessary to carry out
this Agreement or as required by law.
7.20. Additional Covenants. Except as otherwise
contemplated by this Agreement, Weirton covenants and
agrees:
(a) That it will promptly advise
Wesbanco in writing of the name and address of,
and the number of shares of Weirton Common
Stock held by, each stockholder who elects to
exercise his or her right to dissent to the
Merger pursuant to West Virginia Code Annot.
Sections 31-1-122 and 123;
(b) Subsequent to the date of this
Agreement and prior to the Effective Date, that
it will operate its business only in the ordinary
course and in a manner consistent with past
practice;
(c) To the extent consistent with the
fiduciary duties of the Board of Directors to
Weirton and its shareholders and in compliance
with applicable law, that it will use its best
efforts to take or cause to be taken all action
required under this Agreement on its part to be
taken as promptly as practicable so as to permit
the consummation of the Merger at the earliest
possible date and to cooperate fully with the
other parties to that end;
(d) Weirton will not, and will not permit
any person acting on behalf of Weirton to,
directly or indirectly, initiate or solicit any acquisition
<PAGE> 163
proposal by any person, corporation
or entity. For the purposes of this subsection,
"acquisition proposal" means any proposal to
merge or consolidate with, or acquire all or any
substantial portion of the assets of, Weirton, or
any tender or exchange offer (or proposal to make
any tender or exchange offer) for any shares of
stock of Weirton, or any proposal to acquire more
than 5% of the outstanding shares of stock of
Weirton or any options, warrants or rights to
acquire, or securities convertible into or
exchangeable for, more than 5% of the outstanding
shares of stock of Weirton. Weirton will give
Wesbanco notice by telephone, promptly after
receipt thereof, of all material facts relating
to any acquisition proposal or any inquiry with
respect to any acquisition proposal and shall
confirm such notice in writing immediately
thereafter;
(e) To promptly advise Wesbanco of any
material adverse change in the financial
condition, assets, businesses or operations of
Weirton, taken as a whole, or any material
changes or inaccuracies in data provided to
Wesbanco pursuant to this Agreement;
(f) To maintain in full force and effect
its present fire, casualty, public liability,
employee fidelity and other insurance coverages
or replacement insurance coverage at
substantially the same premium and insurance
levels;
(g) To cooperate with Wesbanco in
furnishing such information concerning the
business and affairs of Weirton and its
respective directors
<PAGE> 164
and officers as is
reasonably necessary or requested in order to
prepare and file any application for regulatory
or governmental approvals, including, but not
limited to, an application to the Federal Reserve
Board and the West Virginia Department of Banking
for prior approval of the acquisition of Weirton
by Wesbanco as contemplated hereunder. Consistent
with its fiduciary duties, Weirton will
use its best efforts to obtain the approval or
consent of any federal, state or other regulatory
agency having jurisdiction and of any other party
to the extent that such approvals or consents are
required to effect the Merger and the
transactions contemplated hereby or are required
with respect to the documents described in
Section 7.3 hereof; and
(h) To cooperate with Wesbanco in furnishing
such information concerning the business of
Weirton as is reasonably necessary or requested
in order to prepare and file any Registration
Statement to be prepared in connection with the
issuance of Wesbanco Common Stock as provided in
Section 13 hereof.
SECTION 8
---------
REPRESENTATIONS, WARRANTIES AND
COVENANTS OF WESBANCO AND WHEELING
----------------------------------
Wesbanco and Wheeling represent and warrant to Weirton and
covenant with Weirton that:
8.1 Corporate Organization of Wesbanco and Subsidiaries.
Wesbanco and Wheeling are corporations duly organized, validly
existing and in good standing under the laws of the State
<PAGE> 165
of West Virginia, with full corporate power and authority to carry
on their businesses as they are now being conducted and as
contemplated by the Agreement and to own the properties and
assets which they own, and neither the ownership of their
property nor the conduct of their business requires them, or
any of their subsidiaries, to be qualified to do business in
any other jurisdiction except where the failure to be so
qualified, considering all such cases in the aggregate, does
not involve a material risk to the business, properties,
financial position or results of operations of Wesbanco,
Wheeling and their subsidiaries taken as a whole. Each of
Wesbanco's subsidiaries ("Wesbanco Subs"), is a West Virginia
or Ohio banking corporation, duly organized and validly
existing in good standing under the laws of Ohio or West
Virginia, as the case may be, with full corporate power and
authority to carry on its business as it is now being conducted
and to own the properties and assets which it owns. All issued
and outstanding shares of stock of Wesbanco Subs are held,
beneficially and of record, by Wesbanco and have been fully
paid, were validly issued and are nonassessable. There are no
options, warrants to purchase or contracts to issue, or
contracts or any other rights entitling anyone to acquire, any
other stock of or any of the Wesbanco Subs or securities
convertible into shares of stock of the Wesbanco Subs.
8.2 Corporate Power and Action. The Board of Directors
of Wesbanco has authorized the execution of this Agreement as
set forth herein, and subject to its Bylaws and the WVCA,
Wesbanco has the corporate power and is duly authorized to
execute this Agreement, and this Agreement is a valid and
binding agreement of Wesbanco enforceable in accordance with
its terms, except as enforceability may be subject to
applicable bankruptcy, insolvency, moratorium or other similar
laws affecting the enforcement of creditors' rights generally
and to any equitable
<PAGE> 166
principles limiting the right to obtain
specific performance of certain obligations thereunder. Upon
execution hereof by Wheeling and subject to the approval hereof
by Wesbanco as its sole shareholder, Wheeling has the corporate
power to execute and deliver this Agreement and has taken all
action required by law, its Articles of Incorporation, its
Bylaws or otherwise to authorize and approve such execution and
delivery, the performance of the Agreement, the Merger and the
consummation of the transactions contemplated hereby; and this
Agreement is a valid and binding agreement of Wheeling
enforceable in accordance with its terms, except as
enforceability may be subject to
applicable bankruptcy, insolvency, moratorium or other similar
laws affecting the enforcement of creditors' rights generally
and to any equitable principles limiting the right to obtain
specific performance of certain obligations thereunder.
8.3 Transfer of Securities to Exchange Agent Prior to, or
as of the Closing Date. Prior to, or at the Closing Date,
Wesbanco will deliver to the Exchange Agent, Wheeling, for the
benefit of the holders of the common stock of Weirton, an
amount of common stock of Wesbanco and cash sufficient to meet
the necessary amount of securities and cash required pursuant
to Section 5.
8.4 No Violation of Other Instruments. Subject to
obtaining any required consents (which consents will be
obtained by Wesbanco prior to the Closing), the execution and
delivery of this Agreement do not, and the consummation of the
Merger and the transactions contemplated hereby will not,
violate any provision of the Articles of Incorporation or
Bylaws of Wesbanco or any of the Wesbanco Subs or any provision
of, or result in the acceleration of any obligation under, any
material mortgage, Deed of Trust, note, lien, lease, franchise,
license, permit, agreement, instrument, law, order, arbitration
award, judgment or decree, or in the
<PAGE> 167
termination of any
material license, franchise, lease or permit, to which Wesbanco
or any of the Wesbanco Subs, is a party or by which it is
bound.
8.5 Approval by Wheeling. Wesbanco shall cause Wheeling
to execute and enter into this Agreement and cause Wheeling to
take such action as is provided in this Agreement on Wheeling's
part to be taken.
8.6 Good Faith. Wesbanco shall use its best efforts in
good faith to take or cause to be taken all action required
under this Agreement on its part to be taken as promptly as
practicable so as to permit the consummation of this Agreement
at the earliest possible date and cooperate fully with the
other parties to that end.
8.7 Exchange Act Reports. Wesbanco has delivered to
Weirton true and correct copies of its Form 10-K (Annual
Report) for the year ended December 31, 1994, and its Forms 10-
Q (Quarterly Report) for the quarters ended March 31, 1995,
June 30, 1995, and September 30, 1995, as filed with the SEC,
all of which were prepared and filed in accordance with the
applicable requirements and regulations of the SEC. Wesbanco
has also delivered to Weirton true and correct copies of all
documents and reports filed by Wesbanco with the SEC pursuant
to the Exchange Act since January 1, 1995 (the "Wesbanco
Reports"). Wesbanco has filed and will continue to file all
reports and other documents required to be filed with the SEC
pursuant to the Exchange Act in a timely manner. All of the
Wesbanco Reports complied in all material respects with the Act
and did not contain, as of their respective dates, any untrue
statement of a material fact or omit to state any material fact
necessary to make the statements therein not misleading in
light of the circumstances under which they were made.
<PAGE> 168
8.8 Subsidiaries of Wesbanco. In addition to Wheeling,
the subsidiaries of Wesbanco are Wesbanco Bank South Hills, a West
Virginia banking corporation, Wesbanco Bank Fairmont, a West
Virginia banking corporation, Wesbanco Bank Parkersburg, a West
Virginia banking corporation, Wesbanco Bank Kingwood, a West
Virginia corporation, and Wesbanco Bank Barnesville, an Ohio
banking corporation. All have the requisite corporate power
and authority to own and lease their respective properties and
to conduct their respective businesses as they are now being
conducted and are currently contemplated to be conducted.
Wesbanco owns 100% of the issued and outstanding stock of all
such corporations.
8.9 Registered Bank Holding Company. Wesbanco is a duly
registered bank holding company under the Bank Holding Company
Act of 1956, as amended.
8.10 Authority to Issue Shares. The shares of common
stock of Wesbanco to be issued pursuant to this Agreement will
be duly authorized at the time the Merger is consummated. When
issued upon the terms and conditions specified in this
Agreement, such shares shall be validly issued, fully paid, and
nonassessable. The shareholders of Wesbanco have, and will
have, no preemptive rights with respect to the issuance of the
shares of Wesbanco to be authorized and issued in the
transaction contemplated in this Agreement.
8.11 Financial Statements. Wesbanco has delivered to
Weirton copies of its consolidated balance sheets as of
December 31, 1995, 1994 and 1993 and any applicable interim
period, its consolidated statements of income, consolidated
statements of changes in shareholders' equity and consolidated
statements of changes in financial position for the three year
period ended December 31, 1995, and any applicable interim
period, together with the notes thereto, accompanied by an
audit report of Price Waterhouse, independent auditors. Such
<PAGE> 169
statements and the related notes to all of said financial
statements, present fairly the consolidated financial position
of Wesbanco and its consolidated subsidiaries and the
consolidated results of their operations as of the dates and
for the periods ended on the dates specified in accordance with
generally accepted accounting principles consistently applied
throughout the periods indicated, except as may be specifically
disclosed in those financial statements, including the notes to
the financial statements attached thereto, and subject to
normal recurring year end adjustments.
8.12 No Action, Etc.. Except as disclosed in the Wesbanco
Disclosure Schedule, dated not more than 30 days from the date
hereof (the "Wesbanco Disclosure Schedule"), and as
supplemented on the Effective Date, there are no suits,
actions, proceedings, claims or investigations (formal or
informal) pending, or to the knowledge of Wesbanco pending or
threatened, against or relating to Wesbanco, its subsidiaries,
its businesses or any of its properties or against any of their
officers or directors (in their capacity as such) in law or in
equity or before any governmental agency. There are no suits,
actions, proceedings, claims or investigations against or
relating to Wesbanco, its subsidiaries, its businesses, its
properties or against any of their officers or directors (in
their capacity as such) in law or in equity or before any
governmental agency, which, individually or in the aggregate,
would, or is reasonably likely to, if determined adversely to
such party, materially adversely affect the financial condition
(present or prospective), businesses, properties or operations
of Wesbanco or its subsidiaries or the ability of Wesbanco or
its subsidiaries to conduct its business as presently conducted
or consummate the transaction contemplated hereby, and Wesbanco
does not know of any basis for any such action or proceeding.
Neither Wesbanco nor any of its subsidiaries are a party or
subject to any cease
<PAGE> 170
and desist order, agreement or similar
arrangement with a regulatory authority which restricts its
operations or requires any action and neither Wesbanco nor any
of its subsidiaries are transacting business in material
violation of any applicable law, ordinance, requirement, rule,
order or regulation.
8.13 Capitalization. The authorized capital stock of
Wesbanco consists of 25,000,000 shares of common stock, par
value of $2.0833 per share, of which 8,495,972 shares are duly
authorized, validly issued and outstanding (as of December 31,
1995) and are fully paid and nonassessable, and 1,000,000
shares of preferred stock, without par value, none of which are
issued and outstanding. There are no options, warrants, calls
or commitments of any kind entitling any person to acquire, or
securities convertible into, Wesbanco Common Stock. At
December 31, 1995, Wesbanco held 186,131 shares of its common stock as
treasury stock. Wesbanco has no other reserve commitments with
respect to its common stock.
Upon execution hereof by Wheeling, the authorized capital
stock of Wheeling consists of 391,000 shares of common stock,
par value of $20.00 per share, of which all such shares are
duly authorized and validly issued and outstanding and fully
paid and nonassessable. There are no options, warrants, calls
or commitments of any kind relating to, or securities
convertible into Wheeling Common Stock.
8.14 Copies of All Contracts, Leases, Etc. Wesbanco has
furnished to Weirton true and complete copies of all material
contracts, leases and other agreements to which Wesbanco is a
party or by which it is bound and of all employment, pension,
retirement, stock option, profit sharing, deferred
compensation, consultant, bonus, group insurance and similar
plans with respect to any of the directors, officers or other
employees of Wesbanco. A list of all such
<PAGE> 171
documents is set
forth in the Wesbanco Disclosure Schedule, and as supplemented
on the Effective Date.
8.15 Materially Adverse Contracts. Neither Wesbanco nor
any of its subsidiaries are a party to or otherwise bound by any
contract, agreement, plan, lease, license, commitment or
undertaking, which is materially adverse, materially onerous,
or materially harmful to Wesbanco or its subsidiaries taken as
a whole. There is no breach or default by any party of or with
respect to any material provision of any material contract to
which Wesbanco or its subsidiaries is a party that would have a
material adverse effect upon the financial condition,
operations, results of operations, business or prospects of
Wesbanco or its subsidiaries taken as a whole.
8.16 Undisclosed Liabilities. Wesbanco and the Wesbanco
Subs have no material liabilities other than those liabilities
disclosed on or provided for in the financial statements
delivered pursuant to Section 8.11 of this Agreement, or on the
Wesbanco Disclosure Schedule.
8.17 Title to Properties. Except for capitalized leases
and liens and encumbrances not material to the property and
liens and encumbrances on property acquired by Wesbanco Subs in
foreclosure of loans and existing at the time of foreclosure,
Wesbanco and its subsidiaries have good and marketable title to
all of the property, interest in properties and other assets,
real or personal, set forth in its consolidated balance sheet
as of December 31, 1994, and applicable interim periods, or
acquired since that date, subject to no material liens,
mortgages, pledges, encumbrances, or charges of any kind except
liens reflected on said balance sheets, and all of its leases
are in full force and effect and neither Wesbanco nor any of
its subsidiaries is in material default thereunder.
<PAGE> 172
No asset included in the financial statements referred to
above has been valued in such statements in excess of cost less
depreciation or, in the case of investment securities, in
excess of cost, adjusted for amortization of premiums or
accretion of discounts. All real and tangible personal
property owned by Wesbanco or its subsidiaries and used or
leased by Wesbanco or its subsidiaries, or for its business is
in good condition, normal wear and tear excepted, and is in
good operating order. All of such property is insured against
loss for at least 80% of the full replacement value thereof
(less applicable deductibles) by reputable insurance companies
authorized to transact business in the State of West Virginia.
8.18 Registration Statement. The Registration Statement
referred to in Section 13.2 of this Agreement or any amendment
or supplement thereto mailed to the holders of the common stock
of Weirton will not contain any untrue statement of a material
fact or omit to state a material fact required to be stated
therein or necessary to make the statements contained therein,
in light of the circumstances under which they were made, not misleading
with respect to Wesbanco, and will comply as to form in all
material respects with the requirements of federal and West
Virginia securities laws and any other applicable Blue Sky
laws.
8.19 Taxes. Except as disclosed in the Wesbanco
Disclosure Schedule:
(a) Wesbanco and its subsidiaries have timely
and properly filed all Federal Income Tax Returns
and all other federal, state, municipal and other
tax returns which they are required to file,
either on their own behalf or on behalf of their
employees or other persons or entities, all such
returns and reports being true and correct and
complete in all material respects, and have paid
all taxes, including penalties and interest, if
any, which have
<PAGE> 173
become due pursuant to such
returns or reports or forms or pursuant to
assessments received by them;
(b) Neither the Internal Revenue Service nor
any other taxing authority is now asserting
against Wesbanco or any of its subsidiaries, or,
to its knowledge, threatening to assert against
them, or any of them, any material deficiency or
claim for additional taxes, interest or penalty;
(c) There is no pending or, to its
knowledge, threatened examination of the Federal
Income Tax Returns of Wesbanco or any of its
subsidiaries, and, except for tax years still
subject to the assessment and collection of
additional federal income taxes under the three-
year period of limitations prescribed in IRC
Section 6501(a), no tax year of Wesbanco or any of
its subsidiaries remains open to the assessment
and collection of additional material Federal
Income Taxes; and
(d) There is no pending or, to its
knowledge, threatened examination of the West
Virginia Business Franchise Tax Returns of
Wesbanco or any of its subsidiaries, and, except
for tax years still subject to the assessment and
collection of additional Business Franchise Taxes
under the three year period of limitations prescribed
in W.Va. Code Annot. Section 11-10-15, no tax year
of Wesbanco or any of its subsidiaries remains open
to the assessment and collection of additional Business
Franchise Taxes.
<PAGE> 174
(e) Wesbanco, and its subsidiaries, have
properly accrued and reflected on their December
31, 1995, consolidated balance sheet, delivered
pursuant to Section 8.11 hereof, and have
thereafter to the date hereof properly accrued,
and will, from the date hereof, through the
Closing Date, properly accrue all liabilities for
taxes and assessments, and will timely and
properly file all such federal, state, local and
foreign tax returns and reports and forms which
they are required to file, either on their own
behalf or on behalf of their employees or other
persons or entities, all such returns and reports
and forms to be true and correct and complete in
all respects, and will pay or cause to be paid
when due all taxes, including penalties and
interest, if any, which have become due pursuant
to such returns or reports or forms or pursuant to
assessments received by them, all such accruals
being in the aggregate sufficient for payment of
all such taxes and assessments.
8.20 Absence of Certain Changes. Except as may be
disclosed in the Wesbanco Disclosure Schedule, or except in connection
with the transactions contemplated by this Agreement, since
December 31, 1995:
(a) There has been no change in the material
assets, financial condition, liabilities
(contingent or otherwise), business or results of
operation of Wesbanco and its subsidiaries which has had,
or changes in the aggregate which have had, a materially
adverse effect on the material assets, financial condition
or results of operations of Wesbanco, nor, to its
<PAGE> 175
knowledge, has any event or condition occurred which may
result in such change or changes;
(b) There has not been any material damage,
destruction, or loss by reason of fire, flood, accident or
other casualty (whether insured or not insured) materially
and adversely affecting the assets, financial condition,
business or operations of Wesbanco or any of its
subsidiaries taken as a whole;
(c) Other than in the ordinary course of business,
neither Wesbanco nor any of its subsidiaries have disposed
of, or agreed to dispose of, any of their material
properties or assets, nor have they leased to others, or
agreed to so lease, any of such material properties or
assets;
(d) There has not been any change in the authorized,
issued or outstanding capital stock of Wesbanco, except as
provided for in this Agreement, or any material change in
the outstanding debt of Wesbanco or any of its
subsidiaries, other than changes due to payments in
accordance with the terms of such debt or changes in
deposits, federal funds purchased, repurchase agreements
or other short-term borrowings in the ordinary course of
business;
(e) Except as otherwise disclosed in this Agreement,
Wesbanco has not granted any warrant, option or right to
acquire, or agreed to repurchase, redeem or otherwise
acquire, any shares of its capital stock or any other of
its securities whatsoever;
<PAGE> 176
(f) Neither Wesbanco nor any of its subsidiaries
have made any material loan or advance other than in the
ordinary course of business;
(g) Neither Wesbanco nor any of its
subsidiaries has entered into any other material
transaction, contract or lease or incurred any other
material obligation or liabilities other than in the
ordinary course of business;
(h) Neither Wesbanco nor any of its subsidiaries
have made any expenditure or major commitment for the
purchase, acquisition, construction or improvement of any
material asset or assets which in the aggregate would be
material other than in the ordinary course of business;
(i) There have not been any dividends or
other distributions declared or paid on any shares of
Wesbanco Common Stock which, taken in the aggregate with
all other such distributions declared or paid in the same
tax year, exceed 45% of the after-tax income of Wesbanco
for the tax year in which paid;
(j) Business has been conducted by Wesbanco in the
ordinary course and in a manner consistent with past
practice;
(k) There has been no change in the Articles of
Incorporation or Bylaws of Wesbanco which would in the
reasonable opinion of Weirton have a material adverse
effect on the rights of holders of Wesbanco Common Stock;
and
<PAGE> 177
(l) There has not been any other event, condition or
development of any kind which materially and adversely
affects the material assets, financial condition or
results of operations of Wesbanco or any of its
subsidiaries, and neither Wesbanco nor any of its
subsidiaries have knowledge of any such event, condition
or development which may materially and adversely affect
the material assets, financial condition or results of
operations of Wesbanco and its subsidiaries.
8.21 Fidelity Bonds. Each of the Wesbanco Subs has
continuously maintained fidelity bonds insuring it against acts
of dishonesty by each of its officers and employees in such
amounts as are required by law and as are customary, usual and
prudent for a bank of its size. Since January 1, 1995, there
have been no claims under such bonds (except as disclosed in
the Wesbanco Disclosure Schedule) and, except as disclosed in
writing to Weirton, neither Wesbanco nor any Wesbanco Subs are
aware of any facts which would form the basis of a claim under
such bonds. Neither Wesbanco nor any Wesbanco Subs have any
reason to believe that any fidelity coverage will not be
renewed by their carriers on substantially the same terms as
the existing coverage.
8.22 ERISA. Except as disclosed in the Wesbanco
Disclosure Schedule (i) each employee benefit plan subject to
Titles I and/or IV of ERISA and established or maintained for
persons including employees or former employees of Wesbanco, or
any of its subsidiaries, (hereinafter referred to as "Plan")
has been maintained, operated, administered and funded in
accordance with its terms and with all material provisions of
ERISA and the IRC applicable thereto; (ii) no event reportable
under Section 4043 of ERISA has occurred and is continuing
<PAGE> 178
with respect to any Plan; (iii) no liability to PBGC has been
incurred with respect to any Plan, other than for premiums due
and payable and all premiums required to have been paid to
PBGC as of the date hereof have been and as of the Effective
Date will have been paid; (iv) other than the termination of
the defined benefit pension plans of Wheeling Dollar Bank,
First National Bank and Trust Company, Wirt County Bank, First-
Tyler Bank & Trust Company, Brooke National Bank, First
National Bank of Barnesville and Albright National Bank, no
Plan has been terminated, no proceedings have been instituted
to terminate any Plan, and no decision has been made to
terminate or institute proceedings to terminate any Plan; (v)
with respect to the termination of the defined benefit pension
plans of Wheeling Dollar Bank, First National Bank and Trust
Company, Wirt County Bank, First-Tyler Bank & Trust Company,
Brooke National Bank, First National Bank of Barnesville and
Albright National Bank, all required governmental and
regulatory approvals of such terminations have been obtained,
all participants in such Plans or their beneficiaries have
received single premium annuity contracts or other benefits
which will provide those participants or beneficiaries with the
retirement income calculated under the terms and conditions of
such Plans, all liabilities of such Plans have been paid,
released, discharged or merged, and any surplus assets
remaining in such Plans after satisfaction of all of its
liabilities have been recovered by Wesbanco or its
subsidiaries; (vi) neither Wesbanco nor any of its subsidiaries
currently are a participating employer in any multiemployer or
multiple employer employee benefit pension plan (including any
multiemployer plans as defined in Section 3(37) of ERISA) and,
with respect to any multiemployer or multiple employer plan
in which Wesbanco or any of its subsidiaries was a participating
employer, all contributions due from Wesbanco or any of its
subsidiaries to any such multiemployer or multiple employer
plan have been timely paid
<PAGE> 179
and any additional contributions
due on or before the Effective Date shall have been paid;
(vii) with respect to any multiemployer pension plan subject
to the Multiemployer Pension Plan Amendments Act of 1980 in
which Wesbanco or any of its subsidiaries was a participating
employer, neither Wesbanco nor any of its subsidiaries have
incurred or will incur any withdrawal liability, complete or
partial, under Section 4201, 4203, or 4205 of ERISA, as a
consequence of discontinuing participating in such multiemployer
pension plan; (viii) there has been no cessation of, and no
decision has been made to cease, operations at a facility or
facilities where such cessation could reasonably be expected to
result in a separation from employment of more than 20% of the
total number of employees who are participants under any Plan;
(ix) each Plan which is an employee pension plan meets the requirements
of "qualified plans" under Section 401(a) of the IRC; (x) no
accumulated funding deficiency within the meaning of Section
412 of the IRC or Section 302 of ERISA has been incurred with
respect to any Plan subject to the funding standards of those
provisions; (xi) with respect to each Plan, there have been no
prohibited transactions as defined in Section 406 of ERISA or
Section 4975 of the IRC, and there are no actions, suits or
claims with respect to the assets thereof (other than routine
claims for benefits) pending or threatened; and (xii) all
required reports, descriptions and notices (including, but not
limited to, Form 5500 Annual Reports, Summary Annual Reports
and Summary Plan Descriptions) have been appropriately filed
with the government or distributed to participants with respect
to each Plan.
8.23 Labor Disputes. Except as disclosed in the Wesbanco
Disclosure Schedule, neither Wesbanco nor any of its
subsidiaries are directly or indirectly involved in or
threatened with any labor dispute, including, without
limitation, matters regarding discrimination by reason
<PAGE> 180
of race, creed, sex, handicap or national origin, which would materially
and adversely effect their financial condition, assets,
businesses or operations taken as a whole. No collective
bargaining representatives represent any Wesbanco, or Wesbanco
Subs, employees and no petition for election of any collective
bargaining representative has been filed and, to the knowledge
of Wesbanco and its subsidiaries, no organizational campaign on
behalf of any collective bargaining unit has been undertaken by
or on behalf of any Wesbanco, or Wesbanco Subs employees.
8.24 Reserve for Possible Loan Losses. The reserve for
possible loan losses shown on the consolidated balance sheet of
Wesbanco and its subsidiaries as of December 31, 1995,
delivered pursuant to this Agreement is adequate in all
material respects as of the date thereof.
8.25 Additional Covenants. Except as otherwise
contemplated by this Agreement, Wesbanco covenants and agrees:
(a) That it will use its best efforts in good
faith to take, or cause to be taken all action
required under this Agreement on its part, or
Wheeling's part, to be taken as promptly as
practicable so as to permit the consummation of
the Merger at the earliest possible date and to
cooperate fully with the other parties to that
end, and that it will, in all such efforts, give
priority to this acquisition of Weirton;
(b) To deliver to Weirton all Forms 10-K,
10Q and 8-K filed for periods ending after the
date of this Agreement within seven (7) days
after the filing of each such report with the
SEC;
<PAGE> 181
(c) To promptly advise Weirton of any
material adverse change in the financial
condition, assets, businesses or operations of
Wesbanco or any of its subsidiaries, or any
material changes or inaccuracies in data
provided to Weirton pursuant to this Agreement or
any "acquisition proposal" with respect to
Wesbanco received by Wesbanco;
(d) To cooperate with Weirton in furnishing
such information concerning the business and
affairs of Wesbanco and its subsidiaries and its
directors and officers as is reasonably necessary
or requested in order to prepare and file any
application for regulatory or governmental
approvals, including but not limited to an
application to the Federal Reserve Board and the
West Virginia Department of Banking for prior
approval of the acquisition of Weirton by
Wesbanco as contemplated hereunder. Wesbanco
will use its best efforts to obtain the approval
or consent of any federal, state or other
regulatory agency having jurisdiction and of any
other party to the extent that such approvals or
consents are required to effect the Merger and
the transactions contemplated hereby or are
required with respect to the documents described
in Section 8.4 hereof; and
(e) To cooperate with Weirton in furnishing
such information concerning the business of
Wesbanco and its subsidiaries as is reasonably
necessary or requested in order to prepare any
Proxy Statement to be prepared in connection with
the Merger.
<PAGE> 182
SECTION 9
INVESTIGATION
-------------
Subject to the conditions set forth in this Section 9,
prior to the Effective Time, Wesbanco and Weirton may directly
and through their representatives, make such investigation of
the assets and business of Wesbanco and Weirton, and Wesbanco's
subsidiaries, as each deems necessary or advisable. Wesbanco
and Weirton and their representatives, including their
accountants, shall have, at reasonable times after the date of
execution by Wesbanco and Weirton hereof, full access to the
premises and to all the property, documents, material
contracts, books and records of each, and its subsidiaries, and
to all documents, information and working papers concerning
each held by such party's accountants, without interfering in
the ordinary course of business of such entity, and the
officers of each will furnish to the other such financial and
operating data and other information with respect to the
business and properties of each other and their subsidiaries as
each shall from time to time reasonably request; provided,
however, that neither party shall be required to give such
access or information to the other party to the extent that it
is prohibited therefrom by rule, regulation, or order of any
regulatory body, and further provided that confidential
information of individual banking customers shall not be
photocopied or removed from the premises of such institution.
All data and information received by Wesbanco and its
authorized representatives from Weirton and by Weirton and its
authorized representatives from Wesbanco shall be held in
strict confidence by such party and its authorized
representatives, and neither party nor its authorized
representatives will use such data or information or disclose
the same to others except with the written permission of the
other party.
<PAGE> 183
For a period of 30 days after the date of
execution hereof, or prior completion of the investigation
herein provided, this Agreement may be terminated by each
such corporation if such investigation reveals to the other any
information concerning the other which in the opinion of such corporation
would have a material adverse effect on the present or future
value of the other such corporation and its subsidiaries'
assets, net worth, business or income taken as a whole. Each
such corporation shall provide prompt written notice to the
other of such decision and the matters relied on therefore.
SECTION 10
NON-SURVIVAL OF REPRESENTATIONS AND WARRANTIES
----------------------------------------------
The representations and warranties included or provided
herein shall not survive the Effective Date.
SECTION 11
CONDITIONS PRECEDENT; CLOSING DATE AND EFFECTIVE DATE
-----------------------------------------------------
11.1 Conditions Precedent of Wesbanco and Weirton. The
consummation of this Agreement by Wesbanco and Weirton and the
Merger is conditioned upon the following:
(a) The shareholders of Weirton and Wesbanco
shall have approved this Agreement by such vote as
required by law;
(b) The West Virginia Banking Board shall
not, within 120 days from the date of Wesbanco's
submission to the Banking Board pursuant to West
Virginia Code Section 31A-8A- 4(a), have entered
an order disapproving the acquisition of Weirton
by Wesbanco and its merger with and into Wheeling
pursuant to this Agreement;
<PAGE> 184
(c) The Secretary of State of West Virginia
shall have issued a Certificate of Merger for the
merger of Weirton with and into Wheeling;
(d) The Board of Governors of the Federal
Reserve System shall have approved the
application of Wesbanco to acquire Weirton; and
of Weirton to merge with and into Wheeling
pursuant to this Agreement;
(e) The Registration Statement of Wesbanco
shall still be effective on the date of the
Closing and all post-effective amendments filed
shall have been declared effective or shall have
been withdrawn by that date. No stop orders
suspending the effectiveness thereof shall have
been issued which remain in effect on the date of
the Closing or shall have been threatened, and no
proceedings for that purpose shall, before the
Closing, have been initiated or, to the knowledge
of Wesbanco, threatened by the SEC. All state
securities and "Blue Sky" permits or approvals
required (in the opinion of Wesbanco and Weirton
to carry out the transaction contemplated in this
Agreement) shall have been received.
(f) No order to restrain, enjoin or
otherwise prevent the consummation of the
transaction contemplated in this Agreement shall
have been entered by any court or administrative
body which remains in effect on the date of the
Closing.
(g) Wesbanco, Weirton and Wheeling shall
have received, in form and substance satisfactory
to Wesbanco's and Weirton's counsel, all
consents, federal, state, governmental,
regulatory and other approvals and
<PAGE> 185
permissions and the satisfaction of all the requirements
prescribed by law which are necessary to the
carrying out of the transactions contemplated
hereby shall have been procured, including the
filing of an effective Registration Statement
with the Securities and Exchange Commission and
the West Virginia Securities Commissioner, and
in addition, Wesbanco and Weirton shall have
received any and all consents required with
respect to the documents described pursuant to
Section 7.3 and Section 8.4 hereof;
(h) All delay periods and all periods for
review, objection or appeal of or to any of the
consents, approvals or permissions required with
respect to the consummation of the Merger and this
Agreement shall have expired;
(i) Unless waived by Wesbanco and Weirton,
the holders of not more than ten percent (10%) of
the Voting Shares (as defined in Section 6.1 hereof)
shall have filed written objections to the Agreement
in accordance with the WVCA, not have voted in favor
of the Agreement at the special meeting of Weirton
shareholders referred to in Section 13.1 hereof
and have made written demand
for the fair value of such Voting Shares within ten
days;
(j) On or before the Closing Date, there shall
have been received from the Internal Revenue Service
a ruling or rulings, or, at the option of Weirton,
in lieu thereof an opinion from counsel for Weirton
substantially to the effect that for Federal Income
Tax purposes:
<PAGE> 186
(i) The statutory merger of
Weirton with Wheeling will constitute a
reorganization within the meaning of
Section 368(a)(1) of the Internal Revenue
Code of 1986 ("IRC"), and Wesbanco,
Weirton and Wheeling will each be a
"party to the reorganization" as defined
in IRC Section 368(b);
(ii) No gain or loss will be
recognized by Wesbanco, Weirton or
Wheeling as a result of the transactions
contemplated in the Agreement;
(iii) No gain or loss will be
recognized by the shareholders of Weirton
as a result of their exchange of
Weirton's Common Stock for Wesbanco's
Common Stock except to the extent any
shareholder receives cash in lieu of a
fractional share or as a dissenting
shareholder;
(iv) The holding period of the
Wesbanco Common Stock received by each
holder of Weirton's Common Stock will
include the period during which the stock
of Weirton surrendered in exchange
therefor was held, provided such stock
was a capital asset in the hands of the
holder on the date of exchange; and
(v) The Federal Income Tax Basis
of the Wesbanco Common Stock received by
each holder of
<PAGE> 187
Weirton's Common Stock
will be the same as the basis of the
stock exchanged therefore.
(k) No action, proceeding, regulation or
legislation shall have been instituted before any court,
governmental agency or legislative body to enjoin,
restrain or prohibit, or to obtain substantial damages
with respect to, the Agreement or the consummation of the
transactions contemplated hereby, which, in the
reasonable judgment of Wesbanco or Weirton, would make it
inadvisable to consummate such transactions (it
being understood and agreed that a written request
by governmental authorities for information with
respect to the Merger may not be deemed by either
party to be a threat of material litigation or
proceeding, regardless of whether such request is
received before or after execution of the
Agreement).
(l) The approvals referred to in subparagraphs
(b) and (d) of Subsection 11.1 herein shall not have
required the divestiture or cessation of any
significant part of the present operations conducted
by Wesbanco, Weirton or any of their subsidiaries,
and shall not have imposed any other condition,
which divestiture, cessation or condition Wesbanco
reasonably deems to be materially disadvantageous or
burdensome.
11.2 Conditions Precedent of Wesbanco. The consummation of
this Agreement by Wesbanco and the Merger is also conditioned
upon the following:
(a) Unless waived by Wesbanco, the
representations and warranties of Weirton contained
in this Agreement shall be correct on and
<PAGE> 188
as of the Effective Date with the same effect as though made
on and as of such date, except for representations
and warranties expressly made only as of a
particular date and except for changes which have
been consented to by Wesbanco or which are not, in
the aggregate, material and adverse, to the
financial condition, businesses, properties or
operations of Weirton, or which are the result of
expenses or transactions contemplated or permitted
by the Agreement, and Weirton shall have performed
in all material respects all of its obligations and
agreements hereunder theretofore to be performed by
it; and Wesbanco and Wheeling shall have received
on the Effective Date an appropriate certificate (in
affidavit form) dated the Effective Date and
executed on behalf of Weirton by one or more
appropriate executive officers of Weirton to the
effect that such officers have no knowledge of the
nonfulfillment of the foregoing condition;
(b) Opinion of Weirton Counsel. An opinion of
Carl N. Frankovitch, Esq., counsel for Weirton,
shall have been delivered to Wesbanco, dated the
Closing Date, and in form and substance satisfactory
to Wesbanco and its counsel, to the effect that:
(i) Weirton is a corporation duly
organized, validly existing and in good
standing under the laws of the State of
West Virginia and has the full
corporate power and authority to own
all of its properties and assets and
to carry on its business as it is
now being conducted, and neither the
<PAGE> 189
ownership of its property nor the
conduct of its business requires it
to be qualified to do business in
any other jurisdiction except where
the failure to be so qualified,
considering all such cases in the
aggregate, does not involve a
material risk to the business,
properties, financial position or
results of operations of Weirton,
taken as a whole.
(ii) Weirton has the full corporate
power to execute and deliver the
Agreement and Plan of Merger. All
corporate action of Weirton required to
duly authorize the Agreement and Plan of
Merger and the actions contemplated
thereby has been taken, and the Agreement
and Plan of Merger is valid and binding
on Weirton in accordance with its terms,
subject, as to the enforcement of
remedies, to applicable bankruptcy,
insolvency, moratorium, or other similar
laws affecting the enforcement of
creditors' rights generally from time to
time in effect, and subject to any
equitable principles limiting the right
to obtain specific performance of certain
obligations thereunder.
<PAGE> 190
(iii) All shares of common stock
of Weirton issued and outstanding as of
the Effective Date are duly authorized,
validly issued, fully paid and
nonassessable.
(iv) The consummation of the merger
contemplated by the Agreement and Plan of
Merger will not violate any provision of
Weirton's Articles of Incorporation or
Bylaws, or violate any provision of, or
result in the acceleration of any
material obligation under, any material
mortgage, loan agreement, order,
judgment, law or decree known to such
counsel to which Weirton is a party or by
which it is bound and will not violate or
conflict with any other material
restriction of any kind or character
known to such counsel to which Weirton is
subject, which would have a materially
adverse effect on the assets, business or
operations of Weirton, taken as a whole.
(v) To the best of such counsel's
knowledge, as of the date hereof, Weirton
is not involved in any litigation against
it (with possible exposure of $100,000.00
or more), pending or threatened, that has
not been disclosed to Wesbanco.
(c) Unless waived by Wesbanco, on or before
the Effective Date, Price Waterhouse, the
independent public accountants for Wesbanco,
<PAGE> 191
shall have rendered an opinion to Wesbanco that the Merger
will be treated as a "pooling of interest" for
accounting purposes.
(d) Weirton shall have delivered to Wesbanco a
schedule identifying all persons who may be deemed
to be "affiliates" of Weirton under Rule 145 of the
Securities Act of 1933, as amended, and shall use
its best efforts to cause each affiliate to deliver
to Wesbanco prior to the Effective Date a letter
substantially in the form attached hereto as Exhibit
"A".
(e) George M. Molnar shall have duly executed
and delivered an employment agreement with Weirton,
dated as of the Closing Date, in substantially the
form agreed to by the parties thereto.
(f) Weirton shall have furnished Wesbanco with a
certified copy of resolutions duly adopted by the Board of
Directors and the shareholders of Weirton approving the
Agreement and authorizing the Merger and the transactions
contemplated hereby.
(g) Unless waived by Wesbanco, on the Closing
Date, there shall not be pending against Weirton or the
officers or directors of Weirton in their capacity as such,
any suit, action or proceeding which, in the reasonable
judgment of Wesbanco, if successful, would have material
adverse effect on the financial condition or operations of
Weirton.
11.3 Conditions Precedent of Weirton. The consummation of
this Agreement by Weirton and the Merger is also conditioned upon
the following:
<PAGE> 192
(a) Unless waived by Weirton, the
representations and warranties of Wesbanco and
Wheeling contained in this Agreement shall be
correct on and as of the Effective Date with the
same effect as though made on and as of such date,
except for representations and warranties expressly
made only as of a particular date and except for
changes which have been consented to by Wheeling or
which are not in the aggregate material and adverse
to the financial condition, businesses, properties
or operations of Wesbanco and Wheeling or which are
the result of expenses or transactions contemplated
or permitted by this Agreement, and Wesbanco and
Wheeling shall have performed in all material
respects all of their obligations and agreements
hereunder theretofore to be performed by them; and
Weirton shall have received on the Effective Date an
appropriate certificate (in affidavit form) dated
the Effective Date and executed on behalf of
Wesbanco and Wheeling by one or more appropriate
executive officers of each of them to the effect
that such officers have no knowledge of the
nonfulfillment of the foregoing conditions;
(b) Opinion of Wesbanco Counsel. An opinion
of Phillips, Gardill, Kaiser & Altmeyer, counsel for
Wesbanco, shall have been delivered to Weirton,
dated the Closing Date, and in form and substance
satisfactory to Weirton and its counsel, to the
effect that:
(i) Wesbanco and Wheeling are
corporations duly organized, validly existing
and in good standing under
<PAGE> 193
the laws of the State of West Virginia and
have the full corporate power and
authority to own all of their properties
and assets and to carry on their
businesses as they are now being
conducted, and neither the ownership of
their property nor the conduct of their
businesses require them to be qualified
to do business in any other jurisdiction
except where the failure to be so
qualified, considering all such cases in
the aggregate, does not involve a
material risk to the business,
properties, financial position or results
of operations of Wesbanco, Wheeling and
the Wesbanco Subs, taken as a whole.
(ii) Wesbanco and Wheeling have the
full corporate power to execute and
deliver the Agreement and Plan of Merger.
All corporate action of Wesbanco and
Wheeling required to duly authorize the
Agreement and Plan of Merger and the
actions contemplated thereby has been
taken, and the Agreement and Plan of
Merger is valid and binding on Wesbanco
and Wheeling in accordance with its
terms, subject, as to the enforcement of
remedies, to applicable bankruptcy,
insolvency, moratorium, or other similar
laws affecting the enforcement of
creditors' rights generally from time to
time in effect, and subject to any
<PAGE> 194
equitable principles limiting the right
to obtain specific performance of certain
obligations thereunder.
(iii) The shares of common stock
of Wesbanco into which shares of common
stock of Weirton shall be converted
pursuant to the terms of the Agreement
and Plan of Merger have been duly
authorized, and when delivered pursuant
to the terms of the Agreement and Plan of
Merger, will have been legally and
validly issued, and will be fully paid
and nonassessable.
(iv) The consummation of the merger
contemplated by the Agreement and Plan of
Merger will not violate any provision of
Wesbanco's or Wheeling's Articles of
Incorporation or Bylaws, or violate any
provision of, or result in the
acceleration of any material obligation
under, any material mortgage, loan
agreement, order, judgment, law or decree
known to such counsel to which Wesbanco
or Wheeling are a party or by which it is
bound, and will not violate or conflict
with any other material restriction of
any kind or character known to such
counsel to which Wesbanco or Wheeling are
subject which would have a material
adverse effect on the assets, business or
operations of Wesbanco and Wheeling,
taken as a whole.
<PAGE> 195
(v) Each of Wesbanco's subsidiaries
is duly organized, validly existing and
in good standing under the laws of the
state of its organization and has the
requisite corporate power and authority
to own and lease its properties and to
conduct its business as it is now being
conducted. To the best of such
counsel's knowledge, Wesbanco owns 100%
of the issued and outstanding stock of
each such corporation.
(vi) To the best of such counsel's
knowledge, as of the date hereof, neither
Wesbanco nor any of its subsidiaries were
involved in any litigation against them
(with possible exposure of $100,000.00 or
more), pending or threatened, that has not been
disclosed to Weirton.
(vii) The Registration Statement
for the stock to be delivered pursuant to
the Agreement and Plan of Merger has
become effective under the Securities Act
of 1933, and such counsel is not aware of
any stop orders in effect with regard to
such Registration Statement.
(c) Weirton shall arrange for and receive a
professionally prepared `Fairness Opinion' relative
to the transaction(s) contemplated, and/or an
updating of any opinion rendered after the date of
the Agreement, dated on or prior to the distribution
date of the Proxy Statement described in
<PAGE> 196
Section 13.1 of this Agreement, and at the election of
Weirton, updated as of the Closing if the Closing is
held more than five (5) days after the Weirton
meeting of shareholders, to the effect that the
Merger and transactions contemplated by this
Agreement are fair, from a financial point of view,
to Weirton and its shareholders.
(d) Wesbanco and Wheeling shall have
furnished Weirton with certified copies of
resolutions duly adopted by the Boards of Directors
of Wesbanco and Wheeling and the shareholders of
Wheeling approving the Agreement and authorizing the
Merger and transactions contemplated hereby.
(e) Unless waived by Weirton, on the Closing
Date, there shall not be pending against Wesbanco or
any of its subsidiaries or the officers or directors
of Wesbanco or any of its subsidiaries in their
capacity as such, any suit, action or proceeding
which, in the reasonable judgment of Weirton, if
successful, would have a material adverse effect on
the financial condition or operations of Wesbanco or
any of its subsidiaries.
(f) Unless waived by Weirton, there shall not
have been any change in control of Wesbanco since
January 1, 1996.
11.4 Closing Date. The Closing shall be effected as soon as
practicable after all of the conditions contained herein shall
have been satisfied on the Closing Date as defined in Section 2.3
hereof, which Closing Date shall be the latest of:
<PAGE> 197
(a) The day of the meetings of the
shareholders of Weirton or Wheeling, whichever is
later, at which the Agreement is approved;
(b) The fifteenth (15th) day after the
approval of the acquisition of Weirton by the Board
of Governors of the Federal Reserve System (the
"Federal Reserve Board");
(c) The day after any stay of the Federal
Reserve Board's approval of the acquisition of
Weirton shall be vacated or shall have expired or
the day after any injunction against the closing of
the Merger shall be lifted, discharged or dismissed;
(d) The day after the approval of the
acquisition of Weirton by the West Virginia
Department of Banking is received by Wesbanco;
(e) The date on which the conditions set
forth in Section 11 are satisfied or waived;
(f) Such other date as shall be mutually
agreed to by Wesbanco and Weirton.
The Closing shall be held in Weirton, West Virginia, at such time
and place as the parties may agree upon. The date and time of
closing are herein called the "Closing Date". Promptly after the
Closing, the Articles of Merger with respect to the Merger shall
be filed with the Secretary of State of West Virginia.
11.5 Effective Date. The Merger shall become effective (the
"Effective Date") on the date on which the Certificate of Merger
approving the Merger is issued by the Secretary of State
<PAGE> 198
of West Virginia. The Surviving Corporation shall record said Certificate
of Merger in the offices of the Clerks of the County Commissions
of Ohio and Hancock Counties.
SECTION 12
TERMINATION OF AGREEMENT
------------------------
12.1 Grounds for Termination. This Agreement and the
transactions contemplated hereby may be terminated at any time
prior to the Closing Date either before or after the meeting of
the shareholders of Weirton:
(a) By mutual consent of Weirton and
Wesbanco;
(b) By either Weirton or Wesbanco if
any of the conditions hereto to such party's obligations to
close have not been met as of the Closing Date and the same
has not been waived by the party adversely affected thereby;
(c) By either Weirton or Wesbanco if the Merger shall
violate any nonappealable final order, decree or judgment of
any court or governmental body having competent jurisdiction;
(d) By Weirton or Wesbanco, if the Closing Date has not
occurred by the first anniversary of the date of execution of
this Agreement;
(e) By Weirton, unless waived by Weirton, if the Market
Value of Wesbanco stock shall fall below Twenty-six Dollars
($26.00) per share as of the Closing Date. Market Value, for
purposes of this paragraph, shall mean the average bid price of
<PAGE> 199
Wesbanco Common Stock (as quoted on NASDAQ) for the 30
calendar days preceding five business days before the
Closing.
(f) By either party in the event that the shareholders
of Weirton vote against consummation of the Merger.
(g) By Wesbanco or Weirton within 30 days of the date
hereof pursuant to the provisions of Section 9 of this
Agreement.
12.2 Effect of Terminating; Right to Proceed. In the event
this Agreement shall be terminated pursuant to Section 12.1, all
further obligations of Wesbanco and Weirton under this Agreement,
except Sections 9, 12.1, 12.2, and 19 hereof, shall terminate
without further liability of Wesbanco and Wheeling to Weirton, or
of Weirton to Wesbanco and Wheeling.
12.3 Return of Documents in Event of Termination. In the
event of termination of this Agreement for any reason, Wesbanco
and Weirton shall each promptly deliver to the other all
documents, work papers and other material obtained from each other
relating to the transactions contemplated hereby, whether obtained
before or after the execution hereof, including information
obtained pursuant to Section 9 hereof, and will take all
practicable steps to have any information so obtained kept
confidential, and thereafter, except for any breach of the
continuing sections of the Agreement, each party shall be mutually
released and discharged from liability to the other party or to
any third parties hereunder, and no party shall be
liable to any other party for any costs or expenses paid or
incurred in connection herewith.
<PAGE> 200
SECTION 13
MEETING OF SHAREHOLDERS OF WEIRTON
----------------------------------
13.1 Subject to receipt by Weirton of the fairness opinion
described in Section 11.3(c) hereof, Weirton shall take all steps
necessary to call and hold a special meeting of its shareholders,
in accordance with applicable law and the Articles of
Incorporation and Bylaws of Weirton as soon as practicable
(considering the regulatory approvals required to be obtained) for
the purpose of submitting this Agreement to its shareholders for
their consideration and approval and will send to its shareholders
for purposes of such meeting a Proxy Statement which will not
contain any untrue statement of a material fact with respect to
Weirton or omit to state a material fact with respect to Weirton
required to be stated therein or necessary to make the statements
contained therein, in light of the circumstances under which they
were made, not misleading, and which otherwise materially complies
as to form with all applicable laws, rules and regulations.
13.2 It is understood that as an integral part of the
transaction contemplated by this Agreement, Wesbanco shall file a
Registration Statement with respect to the offering of its common
shares to be issued in the Merger. The term "Registration
Statement" as used in this Agreement includes all preliminary
filings, post-effective amendments and any Proxy Statement of
Weirton. Accordingly, Wesbanco and Weirton agree to assist and
cooperate fully with each other in the preparation of the
Registration Statement. Both Weirton and Wesbanco further agree
to deliver to each other, both as of the Effective Date of the
Registration Statement and as of the Closing, a letter, in form
and substance satisfactory to the other party and its counsel,
stating that, to the best of their knowledge and belief, all of
the facts with respect to either Wesbanco or
<PAGE> 201
Weirton, as the case
may be, set forth in the Registration Statement, are true and
correct in all material respects, and that the Registration
Statement does not omit any material fact necessary to make the
facts stated therein with respect to such party not misleading in
light of the circumstances under which they were made.
SECTION 14
BROKERS
-------
Weirton represents and warrants to Wesbanco and Wesbanco
represents and warrants to Weirton that no broker or finder has
been employed, or is entitled to a fee, commission or other
compensation, with respect to this Agreement or the transactions
contemplated hereby, other than fees due from Weirton in payment
for the rendered `Fairness Opinion'.
SECTION 15
GOVERNING LAW; SUCCESSORS AND
ASSIGNS; COUNTERPARTS; ENTIRE AGREEMENT
---------------------------------------
This Agreement (a) shall be governed by and construed under
and in accordance with the laws of the State of West Virginia; (b)
shall be binding upon and shall inure to the benefit of the
parties hereto and their respective successors and assigns,
provided, however, that this Agreement may not be assigned by any
party without the written consent of the other parties hereto; (c)
may be executed in one or more counterparts, all of which shall be
considered one and the same agreement, and shall become effective
and binding as to Wesbanco, Wheeling and Weirton when one or more
counterparts shall have been signed and delivered by Wesbanco,
Wheeling and Weirton; and (d) embodies the entire Agreement and
understanding of the parties with respect to the subject matter
hereof; and (e) supersedes all prior agreements and
<PAGE> 202
understandings, written or oral, between Weirton and Wesbanco
relating to the subject matter hereof.
SECTION 16
EFFECT OF CAPTIONS
------------------
The captions of this Agreement are included for convenience
only and shall not in any way affect the interpretation or
construction of any of the provisions hereof.
SECTION 17
NOTICES
-------
Except as specifically provided in Section 7.20(d) hereof,
any notices or other communication required or permitted
hereunder shall be sufficiently given if delivered personally or
sent by first class, registered or certified mail postage
prepaid, with return receipt requested addressed as follows:
To Weirton:
Bank of Weirton
333 Penco Road
Weirton, WV 26062
ATTENTION: George M. Molnar, President
With a copy to:
Carl N. Frankovitch, Esq.
337 Penco Road
Weirton, WV 26062
To Wesbanco:
Wesbanco, Inc.
One Bank Plaza
Wheeling, WV 26003
ATTENTION: Edward M. George, President
<PAGE> 203
With a copy to:
Phillips, Gardill, Kaiser & Altmeyer 61
Fourteenth Street
Wheeling, WV 26003
ATTENTION: James C. Gardill, Esq.
or such other addresses as shall be furnished in writing by either
party to the other party. Any such notice or communication shall
be deemed to have been given as of the date so mailed.
SECTION 18
AMENDMENTS
----------
Any of the terms or conditions of the Agreement may be waived
at any time by the party which is, or the shareholders of which
are, entitled to the benefit thereof, by action taken by the Board
of Directors of such party, or any of such terms or conditions may
be amended or modified in whole or in part at any time as follows.
This Agreement may be amended in writing (signed by all parties
hereto) before or after the meeting of Weirton shareholders at any
time prior to the Closing Date with respect to any of the terms
contained herein, provided, however, that if amended after such
meeting of shareholders, the conversion ratio per share at which
each share of common stock of Weirton shall be converted in the
Merger and any other material terms of the Merger shall not be
amended after the meeting of Weirton shareholders unless the
amended terms are resubmitted to the shareholders for approval.
Neither the Agreement nor any provisions hereof, may be changed,
waived, discharged or terminated orally, or by the passage of
time, except by a statement in writing signed by the party against
which the enforcement of such change, waiver, discharge or
termination is sought.
<PAGE> 204
SECTION 19
EXPENSES
--------
Each party to this Agreement shall pay its own legal and
accounting fees and other costs and expenses incurred in
connection with this Agreement and the transactions contemplated
hereby.
SECTION 20
MISCELLANEOUS
-------------
20.1 Publicity. The parties will not publicly release any
information about the transactions contemplated hereby except as
they may mutually agree or as may be required by law.
20.2 Incorporation by Reference. Any and all schedules,
exhibits, annexes, statements, reports, certificates or other
documents or instruments referred to herein or attached hereto are
incorporated herein by reference as though fully set forth at the
point referred to in the Agreement.
20.3 Material Adverse Change. In determining whether there
has been a material adverse change for purposes of this Agreement,
costs and expenses of the transactions contemplated hereby shall
not be taken into account provided, however, that only the first
$50,000 of such expenses shall be so excluded.
20.4 Binding Date. This Agreement is effective and binding
as to Wesbanco, Wheeling and Weirton upon the date first above
written.
<PAGE> 205
IN WITNESS WHEREOF, Wesbanco, Wheeling and Weirton have each
caused this Agreement to be executed on its behalf by its officers
thereunto duly authorized all as of the day and year first above
written.
WESBANCO, INC., a West Virginia
corporation
By /s/ E.M. George
Its President & CEO
(SEAL)
ATTEST:
/s/ Shirley A. Bucan
Secretary
BANK OF WEIRTON, a West Virginia
corporation
By /s/ George M. Molnar
Its Chairman President CEO
(SEAL)
ATTEST:
/s/ James G. Thompson
Secretary
<PAGE> 206
WESBANCO BANK WHEELING, a West
Virginia corporation
By /s/ Paul M. Limbert
Its President
(SEAL)
ATTEST:
/s/ Shirley A. Bucan
Secretary
<PAGE> 207
EXHIBIT A
--------
AFFILIATE LETTER
----------------
Wesbanco, Inc.
Bank Plaza
Wheeling, WV 26003
Gentlemen:
Reference is made to the Agreement and Plan of Merger (the
"Agreement"), dated as of the _____ day of ____________, 1996, by
and between Wesbanco, Inc. ("Wesbanco") and Bank of Weirton
("Weirton") providing for the merger ("Merger") of Weirton with
Wesbanco Bank Wheeling ("Wheeling"), a wholly owned subsidiary of
Wesbanco, whereby Wesbanco shall acquire all of the outstanding
common stock of Weirton through and as a result of such Merger in
exchange for shares of the common stock of Wesbanco. The
undersigned stockholder of Weirton has been identified as a person
who may be an "Affiliate" of Weirton for purposes of Rule 145 of
the Securities Act of 1933, as amended (the "Act"). As a result
of the transactions contemplated by the Agreement, the undersigned
stockholder will receive shares of Wesbanco stock. In
consideration of the receipt of such shares, the undersigned
stockholder warrants and covenants as follows:
(1) Until the expiration of the limitation on
the transfer as provided in Rule 145 of the shares of
Wesbanco Common Stock received as a result of the
Merger, the undersigned stockholder will not sell,
transfer or assign, and Wesbanco shall not be required
to give effect to any attempted sale, transfer or
assignment, except pursuant to (i) a Registration
Statement then in effect under the Act, (ii) a
transaction permitted by Rule 145 as to which Wesbanco
has received evidence of compliance with the provisions
of Rule 145 reasonably satisfactory to it, or (iii) a
transaction which, in the opinion of counsel or as
described in a "no action" or interpretive letter from
the staff of the Securities and Exchange Commission, in
either case in form and substance reasonably
satisfactory to Wesbanco, is exempt from or otherwise
complies with the registration requirements of the Act.
(2) Until the expiration of any limitation on the
transfer of the Wesbanco Common Stock as provided in
Rule 145(d), each certificate the undersigned
receives for Wesbanco Common Stock as a result of the
Merger may bear a restrictive legend in substantially
the following form:
<PAGE> 208
"The shares represented by this certificate have
been issued to the registered holder as a result of a
transaction to which Rule 145 under the Securities Act
of 1933 (the "Act") as amended, applies. The shares
represented by this certificate may not be sold,
transferred, or assigned, and the issuer shall not be
required to give effect to any attempted sale, transfer
or assignment, except pursuant to (i) the Registration
Statement then in effect under the Act, (ii) a
transaction permitted by said Rule 145 reasonably
satisfactory to it, or (iii) a transaction which, in the
opinion of counsel or as described in a `no action' or
interpretive letter from the staff of the Securities and
Exchange Commission, in each case satisfactory in form
and substance to the issuer, is exempt from the
registration requirements of the Act."
Very truly yours,
_____________________________________
ACCEPTED this _____ day of
_______________, 1996.
WESBANCO, INC.
By________________________
Its________________
<PAGE> 209
APPENDIX III
------------
STOCKHOLDER AGREEMENT
---------------------
STOCKHOLDER AGREEMENT, dated as of February 8, 1996, by and
among WESBANCO, INC. (the "Acquiror"), a West Virginia corporation, and
certain stockholders of BANK OF WEIRTON (the "Company"), a West
Virginia banking corporation, named on Schedule A attached hereto
(collectively the "Stockholders").
WITNESSETH: that for and in consideration of the mutual
promises and covenants hereinafter contained, the parties hereto
do hereby agree as follows:
WHEREAS, the Acquiror and the Company have entered into an
Agreement and Plan of Merger, dated as of the date hereof (the
"Agreement"), which is being executed simultaneously with the
execution of this Stockholder Agreement and provides for, among
other things, the merger of the Company with and into an affiliate
bank of the Acquiror (the "Merger"); and
WHEREAS, in order to induce the Acquiror to enter into the
Agreement, each of the Stockholders agrees to, among other things,
vote in favor of the Agreement in their capacities as stockholders
of the Company;
NOW, THEREFORE, in consideration of the premises, the mutual
covenants and agreements set forth herein and other good and
valuable consideration, the sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:
1. Ownership of Company Common Stock. Each Stockholder
represents and warrants that the Stockholder has or shares the
right to vote and dispose of the number of shares of common stock
of the Company, par value $100.00 per share ("Company Common
Stock"), set forth opposite such Stockholder's name on Schedule A
attached hereto.
2. Agreements of the Stockholders. Each Stockholder
covenants and agrees that:
(a) such Stockholder shall, at any meeting
of the Company's stockholders called for
the purpose, vote, or cause to be voted, all shares
of Company Common Stock in which such stockholder has
the right to vote (whether owned as of the date
hereof or hereafter acquired) in favor of the
Agreement and against any plan or proposal pursuant
to which the Company is to be acquired by or merged
with, or pursuant to which the Company proposes to
sell all or substantially all of its assets and
liabilities to, any person, entity or group (other
than the Acquiror or any affiliate thereof);
(b) except as otherwise expressly
permitted hereby, such Stockholder shall not, prior
to the meeting of the Company's stockholders
referred to in Section 2(a) hereof or the earlier
termination of the Agreement
<PAGE> 210
in accordance with its
terms, sell, pledge, transfer or otherwise dispose
of the Stockholder's shares of Company Common Stock;
(c) such Stockholder shall not in his
capacity as a stockholder of the Company directly or
indirectly encourage or solicit or hold discussions
or negotiations with, or provide any information to,
any person, entity or group (other than the Acquiror
or an affiliate thereof) concerning any merger, sale
of substantial assets or liabilities not in the
ordinary course of business, sale of shares of
capital stock or similar transactions involving the
Company or any subsidiary of the Company (provided
that nothing herein shall be deemed to affect the
ability of any Stockholder to fulfill his duties as
a director or officer of the Company); and
(d) such Stockholder shall use his best
efforts to take or cause to be taken all action, and
to do or cause to be done all things, necessary,
proper or advisable under applicable laws and
regulations to consummate and make effective the
agreements contemplated by this Stockholder
Agreement.
3. Successors and Assigns. A Stockholder may sell, pledge,
transfer or otherwise dispose of his shares of Company Common
Stock, provided that such Stockholder obtains the prior written
consent of the Acquiror and that any acquiror of such Company
Common Stock agree in writing to be bound by the terms of this
Stockholder Agreement.
4. Termination. The parties agree and intend that this
Stockholder Agreement be a valid and binding agreement enforceable
against the parties hereto and that damages and other remedies at
law for the breach of this Stockholder Agreement are inadequate.
This Stockholder Agreement may be terminated at any time prior to
the consummation of the Merger by mutual written consent of the
parties hereto and shall be automatically terminated in the event
that the Agreement is terminated in accordance with its terms.
5. Notices. Notices may be provided to the Acquiror and
the Stockholders in the manner specified in Section 17 of the
Agreement, with all notices to the Stockholders being provided to
them at the Company in the manner specified in such section.
6. Governing Law. This Stockholder Agreement shall be
governed by the laws of the State of West Virginia without giving
effect to the principles of conflicts of laws thereof.
7. Counterparts. This Stockholder Agreement may be
executed in one or more counterparts, all of which shall be
considered one and the same and each of which shall be deemed an
original.
<PAGE> 211
8. Headings and Gender. The Section headings contained
herein are for reference purposes only and shall not affect in any
way the meaning or interpretation of this Stockholder Agreement.
Use of the masculine gender herein shall be considered to
represent the masculine, feminine or neuter gender whenever
appropriate.
IN WITNESS WHEREOF, the Acquiror, by a duly authorized
officer, and each of the Stockholders have caused this Stockholder
Agreement to be executed as of the day and year first above
written.
WESBANCO, INC.
By /s/ Edward M. George
Its President & CEO
/s/ George M. Molnar
GEORGE M. MOLNAR
/s/ C. R. Cattrell
C. R. CATTRELL
/s/ R. Peterson Chalfant
R. PETERSON CHALFANT
/s/ Donald R. Donell
DONALD R. DONELL
/s/ Carl Frankovitch
CARL FRANKOVITCH
/s/ James White, Jr.
JAMES WHITE, JR.
/s/ James Thompson
JAMES THOMPSON
<PAGE> 212
SCHEDULE A
----------
NUMBER OF SHARES OF COMPANY COMMON STOCK
----------------------------------------
NAME OF STOCKHOLDER BENEFICIALLY OWNED
------------------- -----------------------
George A. Molnar 400
C. R. Cattrell 70
R. Peterson Chalfant 35
Donald R. Donell 320
Carl Frankovitch 209
James White, Jr. 30
James G. Thompson 8
(1) Does not include shares held in a fiduciary capacity by the
Bank, or by any of such shareholders.
(2) Information is presented as of December 31, 1995 and is
subject to update.
