1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q (Mark One) X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES - ------ AND EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 1997 --------------------------------------------- OR ______ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ____________ to ____________ Commission File Number 0-8467 -------- WESBANCO, INC. -------------- (Exact name of registrant as specified in its charter) West Virginia 55-0571723 - ------------------------------- ----------------------------------- (State or other jurisdiction of (I.R.S. Employer Identification No.) incorporation or organization) 1 Bank Plaza, Wheeling, WV 26003 - ---------------------------------------- ---------- (Address of principal executive offices) (Zip Code) 304-234-9000 -------------------------------------------------- (Registrant's telephone number, including area code) Not Applicable -------------------------------------------------- (Former name, former address and former fiscal year, if changed since last report) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or, for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No ----- ----- APPLICABLE ONLY TO CORPORATE ISSUERS: Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date. Outstanding at April 30, 1997, 10,391,453 shares. 1 of 17
2 PART 1 - FINANCIAL INFORMATION - ------------------------------- Consolidated Balance Sheets at March 31, 1997 and December 31, 1996, and Consolidated Statements of Income, Consolidated Statements of Changes in Shareholders' Equity and Consolidated Statements of Cash Flows for the three months ended March 31, 1997 and 1996 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, 1997 are not necessarily indicative of what results may be attained for the entire year. All previously presented financial information has been restated to include the Bank of Weirton. For further information, refer to the 1996 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, 1996.
3 WESBANCO, INC. CONSOLIDATED BALANCE SHEET - --------------------------------------------------------------------------- (Unaudited, in thousands, except for shares) March 31, December 31, 1997 1996 ------------ ------------- ASSETS Cash and due from banks $ 60,146 $ 58,828 Due from banks - interest bearing 197 197 Federal funds sold 38,215 10,970 Securities: Available for sale, carried at market value 273,670 276,201 Held to maturity (market value of $231,813 and $250,132, respectively) 232,605 249,108 --------- --------- Total securities 506,275 525,309 --------- --------- Loans held for sale 2,351 983 Loans (net of unearned income of $3,235 and $4,160, respectively) 1,022,409 1,026,370 Allowance for loan losses (15,548) (15,528) --------- --------- Net loans 1,006,861 1,010,842 --------- --------- Bank premises and equipment - net 32,380 32,670 Accrued interest receivable 12,497 11,748 Other assets 26,357 26,224 ---------- ---------- Total Assets $1,685,279 $1,677,771 ========== ========== LIABILITIES Deposits: Non-interest bearing demand $ 158,154 $ 159,176 Interest bearing demand 302,853 284,143 Savings deposits 311,998 323,673 Certificates of deposit 582,104 575,828 ---------- ---------- Total deposits 1,355,109 1,342,820 ---------- ---------- Federal funds purchased and repurchase agreements 75,825 81,089 Other short-term borrowings 11,593 11,682 Accrued interest payable 5,894 5,826 Other liabilities 11,971 8,822 ---------- ---------- Total Liabilities 1,460,392 1,450,239 ---------- ---------- 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; 10,538,993 shares issued 21,956 21,956 Capital surplus 36,953 36,949 Retained earnings 172,575 170,116 Treasury stock at cost (110,685 and 17,139 shares, respectively) (3,650) (544) Market value adjustment on securities available for sale - net of tax effect (2,103) (90) Deferred benefits for employees and directors (844) (855) ---------- ---------- Total Shareholders' Equity 224,887 227,532 ---------- ---------- Total Liabilities and Shareholders' Equity $1,685,279 $1,677,771 ========== ========== The accompanying Notes to Consolidated Financial Statements are an integral part of these financial statements.
4 WESBANCO, INC. CONSOLIDATED STATEMENT OF INCOME - ----------------------------------------------------------------------------- (Unaudited, in thousands, except share and per share amounts) For the three months ended March 31, -------------------------- 1997 1996 INTEREST INCOME ------------ ----------- Interest and fees on loans $22,087 $19,524 Interest on securities 7,644 7,379 Interest on short-term investments 184 573 --------- --------- Total interest income 29,915 27,476 --------- --------- INTEREST EXPENSE Interest on deposits 12,028 10,909 Interest on other borrowings 967 901 --------- --------- Total interest expense 12,995 11,810 --------- --------- Net interest income 16,920 15,666 Provision for loan losses 1,100 869 --------- --------- Net interest income after provision for loan losses 15,820 14,797 --------- --------- OTHER INCOME Trust fees 1,672 1,471 Service charges and other income 1,593 1,505 Net securities gains 5 86 --------- --------- Total other income 3,270 3,062 --------- --------- OTHER EXPENSES Salaries, wages and employee benefits 6,202 5,542 Premises and equipment - net 1,794 1,498 Other operating 3,634 3,080 --------- --------- Total other expenses 11,630 10,120 --------- --------- Income before provision for income taxes 7,460 7,739 Provision for income taxes 1,955 2,366 --------- --------- Net Income $ 5,505 $ 5,373 ========= ========= Earnings per share of common stock $0.52 $0.53 ========= ========= Average shares outstanding 10,495,293 10,170,550 ========== ========== Dividends per share $0.29 $0.26 ========== ========== The accompanying Notes to Consolidated Financial Statements are an integral part of these financial statements.
5 WESBANCO, INC. CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY - ----------------------------------------------------------------------------- (Unaudited, in thousands) For the three months ended March 31, -------------------------- 1997 1996 ------------ ----------- Total Shareholders' Equity Balance, beginning of period $ 227,532 $ 206,996 ----------- ----------- Net Income 5,505 5,373 Cash dividends on common stock (3,046) (2,403) Net treasury shares purchased (3,102) (681) Change in market value adjustment on securities available for sale-net of tax effect (2,013) (1,574) Change in deferred benefits for employees and directors 11 (21) ----------- ----------- Net change in Shareholders' Equity (2,645) 694 ----------- ----------- Total Shareholders' Equity Balance, end of period $ 224,887 $ 207,690 =========== =========== The accompanying Notes to Consolidated Financial Statements are an integral part of these financial statements.
6 WESBANCO, INC. CONSOLIDATED STATEMENT OF CASH FLOWS - ----------------------------------------------------------------------------- Increase (Decrease) in Cash and Cash Equivalents (unaudited, in thousands) For the three months ended March 31, -------------------------- 1997 1996 ------------ ------------ Cash flows from operating activities: Net Income $ 5,505 $ 5,373 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 1,438 1,555 Provision for loan losses 1,100 869 Gains on sales of securities - net (5) (86) Deferred income taxes (1) (125) Other - net (80) 4 Net change in assets and liabilities: Interest receivable (749) (1,289) Other assets 1,060 (895) Interest payable 68 56 Other liabilities 3,018 3,288 Loans held for sale (1,368) - --------- --------- Net cash provided by operating activities 9,986 8,750 --------- --------- Cash flows from investing activities: Securities held to maturity: Payments for purchases (11,085) (14,999) Proceeds from maturities and calls 29,945 38,456 Securities available for sale: Payments for purchases (21,911) (58,846) Proceeds from sales - 15,234 Proceeds from maturities and calls 18,367 8,211 Net (increase) decrease in loans 2,881 (6,966) Purchases of premises and equipment-net (600) (878) --------- --------- Net cash provided by (used in) investing activities 17,597 (19,788) --------- --------- Cash flows from financing activities: Net increase in deposits 12,289 4,686 Decrease in federal funds purchased and repurchase agreements (5,264) (2,619) Increase (decrease) in short-term borrowings (89) 5,560 Dividends paid (2,854) (2,326) Purchases of treasury shares - net (3,102) (681) --------- --------- Net cash provided by financing activities 980 4,620 --------- --------- Net increase (decrease) in cash and cash equivalents 28,563 (6,418) Cash and cash equivalents at beginning of period 69,798 91,393 --------- --------- Cash and cash equivalents at end of period $ 98,361 $ 84,975 ========= ========= For the three months ended March 31, 1997 and 1996, WesBanco paid $11,992 and $11,854 in interest on deposits and other borrowings. No income taxes were paid for the three months ended March 31, 1997 and 1996. The accompanying Notes to Consolidated Financial Statements are an integral part of these financial statements.
7 WESBANCO, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - ------------------------------------------------------------------ Note 1 - Basis of Presentation - ------------------------------ The accompanying unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. The consolidated financial statements include the accounts of WesBanco, Inc. and its wholly-owned subsidiaries. All significant intercompany transactions have been eliminated in consolidation. All previously presented financial information has been restated to include the Bank of Weirton. Earnings per common share are based on the average number of shares of common stock outstanding during the periods presented. Financial Accounting Standards Board Statement No. 128, "Accounting for Earnings Per Share" ("Statement No. 128") is effective in 1997 and provides specific computations, presentation and disclosure requirements for earnings per share. The statement's objective is to simplify the computation of earnings per share and to make the U. S. standard for computing earnings per share more compatible with the standards of other countries and with that of the International Accounting Standards Committee. Early adoption is not permitted and Statement No. 128 will not have a material effect on the Corporation's reported earnings per share. Note 2 - Mergers and Acquisitions - --------------------------------- On December 20, 1996, WesBanco announced the signing of a Definitive Agreement and Plan of Merger providing for the merger of Shawnee Bank, Inc., located in Dunbar and South Charleston, West Virginia with WesBanco South Hills, a wholly-owned subsidiary of WesBanco. The acquisition, which is based upon a fixed exchange ratio of 10.094 shares of WesBanco common stock for each share of Shawnee common stock, will be accounted for as a purchase transaction, with an approximate value of $10,344,960, based on a March 31, 1997 market value of $32.00 per share. As of March 31, 1997, Shawnee reported total assets of $38.0 million, total shareholders' equity of $5.5 million and net income of $133,000, or $4.15 per share. To complete the acquisition, WesBanco anticipates issuing up to 323,280 shares of common stock to Shawnee shareholders. WesBanco's Board approved a plan, beginning March 3, 1997, to purchase shares of WesBanco common stock. As of March 31, 1997,
8 WesBanco has purchased 82,000 shares under the plan. The transaction, which is subject to approval by the shareholders of Shawnee, is expected to be completed on June 30, 1997. Note 3 - New Accounting Standard Adopted - ---------------------------------------- The Corporation adopted Financial Accounting Standards Board Statement No. 125, "Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities," ("Statement No. 125") on January 1, 1997. The new standard provides accounting and reporting standards for transfers and servicing of financial assets and extinguishments of liabilities. The adoption of Statement No. 125 did not have a material impact on the Corporation's financial position or results of operations.
9 WESBANCO, INC. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS - ------------------------------------------------------------------ (Unaudited, dollars in thousands except per share amounts) The following discussion and analysis presents in further detail the financial condition and results of operations of WesBanco, Inc. and its subsidiaries. This discussion and analysis should be read in conjunction with the consolidated financial statements and notes presented in this report. Financial Condition ------------------- Total assets of WesBanco as of March 31, 1997 were $1,685,279 as compared to $1,677,771 as of December 31, 1996, an increase of .4%. Securities decreased $19,034 or 3.6% as maturities were reinvested in federal funds sold. During the period, federal funds sold increased $27,245. Total loans, net of unearned income, declined $3,961 or .4%, while deposits increased $12,289 or .9%. The decrease in total loans occurred primarily in the consumer loan portfolio due primarily to seasonal declines in the volume of auto loans made during the first quarter. The increase in deposit growth occurred in certificates of deposit and interest bearing demand reflecting the competitive pricing of the Good Neighbor Banking and Prime Rate Money Market products. Securities - ---------- The following table shows the composition of WesBanco's securities portfolio: March 31, December 31, 1997 1996 ---- ---- Securities Available for Sale (at market): - ------------------------------------------ U.S. Treasury and Federal Agency securities $164,735 $161,817 Obligations of states and political subdivisions 15,629 14,120 Corporate securities --- 5,005 Mortgage-backed securities 91,739 93,750 Other debt and equity securities 1,567 1,509 -------- -------- Total available for sale $273,670 $276,201 -------- -------- Securities Held to Maturity (at cost): - -------------------------------------- U.S. Treasury and Federal Agency securities $ 77,774 $ 99,457 Obligations of states and political subdivisions 152,943 147,643 Other debt and equity securities 1,888 2,008 -------- -------- Total held to maturity (market value of $231,813 and $250,132, respectively 232,605 249,108 -------- -------- Total securities $506,275 $525,309 ======== ======== During the three months ended March 31, 1997, maturities, calls, prepayments and sales aggregated $48,312, while purchases of securities totaled $32,996.
10 As interest rates rose late in the first quarter 1997, the market value adjustment, before tax effect, in the available for sale securities portfolio reflected an increase in unrealized net losses to $3,455 as of March 31, 1997 from $144 as of December 31, 1996. These adjustments represent temporary market value fluctuations caused by general changes in market rates and the length of time to respective maturity dates. If these securities are held until their respective maturity date, no market value adjustment would be realized. Loans - ----- The following table shows the composition of WesBanco's loan portfolio at March 31, 1997 and December 31, 1996: March 31, 1997 December 31, 1996 ------------------ ----------------- Amount Percent Amount Percent ------ ------- ------ ------- Commercial $ 183,789 17.9% $ 177,136 17.0% Real Estate - Construction 23,116 2.3 21,556 2.0 Real Estate - Mortgage 511,798 49.9 510,778 50.0 Consumer 306,941 29.9 321,060 31.0 ---------- ------ ---------- ------ Total Loans 1,025,644 100.0% 1,030,530 100.0% Less: Unearned income (3,235) (4,160) Allowance for loan losses (15,548) (15,528) ---------- ---------- Net Loans $1,006,861 $1,010,842 ========== ========== The decrease in total loans reflects seasonal declines in consumer loans, primarily due to a slowdown in new auto sales, coupled with the competitive environment and lack of economic growth in the Upper Ohio Valley. During the remainder of 1997, the Corporation expects to generate moderate consumer loan growth by offering attractive rates on its loan products. In addition, WesBanco anticipates an increase in mortgage loan originations through its affiliate, WesBanco Mortgage Company. The mortgage company, with offices throughout West Virginia, originates and sells mortgage loans to the secondary market. WesBanco monitors the overall quality of its loan portfolio through various methods. Underwriting policies and guidelines have been established for all types of credits and management continually monitors the portfolio for adverse trends in delinquent and nonperforming loans.
11 Loans are considered impaired when it is determined that WesBanco may not be able to collect all principal and interest due, according to the contractual terms of the loans. Impaired loans, including all nonperforming loans, are as follows: March 31, December 31, 1997 1996 ---- ---- Nonaccrual $ 5,575 $ 4,664 Renegotiated 3,592 2,150 Other classified loans: Doubtful --- 94 Substandard 4,007 3,377 ------- ------- Total impaired loans $13,174 $10,285 ======= ======= The average balance of impaired loans during the periods ended March 31, 1997 and December 31, 1996, were approximately $13,418 and $11,541 respectively. The increase was primarily attributable to the lack of economic growth in the Upper Ohio Valley. Specific allowances are allocated for impaired loans based on the present value of expected future cash flows, or the fair value of the collateral for loans that are collateral dependent. Related allowances for loan losses on impaired loans were $1,929 and $2,120 as of March 31, 1997 and December 31, 1996, respectively. Other real estate totaled $4,033 as of March 31, 1997, compared to $3,555 as of December 31, 1996. Loans past due 90 days or more were $4,074 or .4% of total loans as of March 31, 1997, as compared to $4,105 or .4% of total loans as of December 31, 1996. Lending by WesBanco banks is guided by written lending policies which allow for various types of lending. Normal lending practices do not include the acquisition of high yield non-investment grade loans or "highly leveraged transactions" ("HLT") from outside the primary market. Allowance for Loan Losses - ------------------------- Activity in the allowance for loan losses is summarized as follows: For the three months ended March 31, -------------------- 1997 1996 ---- ---- Balance, at beginning of period $15,528 $13,439 Charge-offs (1,345) (546) Recoveries 265 121 ------- ------- Net charge-offs (1,080) (425) Provision for loan losses 1,100 869 ------- ------- Balance, at end of period $15,548 $13,883 ======= =======
12 The increase in the allowance for loan losses was due primarily to the acquisition of Vandalia National Corporation. The increase in net charge-offs during the first quarter 1997 was attributed primarily to the writedown of a commercial loan. The allowance for loan losses as a percentage of total loans was 1.5% as of March 31, 1997 and 1996. Amounts allocated to the allowance for loan losses are based upon management's evaluation of the loan portfolio. Deposits - -------- Total deposits increased $12,289 between March 31, 1997 and December 31, 1996, primarily due to growth in interest bearing demand and certificates of deposit. Customer preference for higher yielding products coupled with competitive pricing through the Good Neighbor Banking program have resulted in steady growth in certificates of deposit. Contributing to the growth in interest bearing demand was the Prime Rate Money Market account, introduced on October 1, 1996. This deposit product, competitively priced at 60% of WesBanco's prime rate, has generated both new deposit growth and a shift in deposit balances from savings and other interest bearing demand products. Liquidity and Capital Resources - ------------------------------- WesBanco manages its liquidity position to meet its funding needs, including deposit outflows and loan principal disbursements and to meet its asset and liability management objectives. In addition to funds provided from operations, WesBanco's primary sources of funds are deposits, principal repayments on loans and matured or called securities. Scheduled loan repayments and maturing securities are relatively predictable sources of funds. However, deposit flows and prepayments on loans are significantly influenced by changes in market interest rates, economic conditions, and competition. WesBanco strives to manage the pricing of its deposits to maintain a balance of cash flows commensurate with loan commitments and other funding needs. WesBanco is subject to risk-based capital guidelines that measure capital relative to risk-adjusted assets and off-balance sheet financial instruments. The Corporation's Tier I, total risk-based capital and leverage ratios are well above the required minimum levels of 4%, 8% and 4%, respectively. At March 31, 1997 and December 31, 1996, all of WesBanco's affiliate banks exceeded the minimum regulatory levels. Capital adequacy ratios are summarized as follows: March 31, December 31, 1997 1996 ---- ---- Primary capital 14.1% 14.4% Tier I capital 19.7 19.8 Total risk-based capital 21.0 21.0 Leverage 13.3 13.7
13 Earnings Summary ---------------- Comparison of the three months ended March 31, 1997 and 1996 ------------------------------------------------------------ Net income for the three months ended March 31, 1997 was $5,505, a 2.5% increase over the same period in 1996. Earnings per share of common stock for the three months ended March 31, 1997 and 1996 were $.52 and $.53, respectively. Net income increased primarily due to an increase in both net interest income and trust fee income for the three months ended March 31, 1997 compared to the same period in 1996. Two purchase acquisitions, Universal Mortgage Company and Vandalia National Corporation ("Vandalia") were completed subsequent to the first quarter 1996. The impact of these acquisitions increased certain income and expense classifications as further explained in the Earnings Summary. Return on average assets was 1.3% for the three months ended March 31, 1997 and 1.4% for the three months ended March 31, 1996. Return on average equity was 9.7% compared to 10.4% for the three months ended March 31, 1997 and 1996, respectively. Net Interest Income - ------------------- Net interest income before the provision for loan losses, for the three months ended March 31, 1997 increased $1,254 or 8% over the same period for 1996. The increase was primarily the result of growth in both average earning assets of $91,603 and interest bearing liabilities of $74,748, a portion of which was due to the acquisition of Vandalia. The growth in average earning assets was comprised primarily of a 14% increase in average total loans with Vandalia contributing approximately 36% of the increase. The growth in average interest bearing liabilities was primarily the result of a 6.1% increase in interest bearing deposits, of which Vandalia contributed approximately 65% of the increase. During a period of level market rates, the net tax equivalent yield on average earning assets improved to 4.7% from 4.6% for the three months ended March 31, 1997 and 1996. The increase in the net yield was primarily due to a shift in the composition of assets from investment securities to higher- yielding loans. Interest Income - --------------- Total interest income increased $2,439 or 8.9% between the three month periods ended March 31, 1997 and 1996. Interest and fees on loans increased $2,563 or 13.1% primarily due to an increase in the average balance of loans outstanding. Average rates earned on loans decreased approximately .1% while average loan balances increased by approximately $127,841 or 14%. Interest on taxable securities increased $10 or .2%. The increase was due to an increase in the average rate of approximately .63%,
14 partially offset by a decrease in the average outstanding balance of $36,072 between the three month periods ending March 31, 1997 and 1996. The decrease in taxable investments was the result of funding excess loan demand with scheduled maturities. Interest earned on nontaxable securities increased by $255 or 13.8%. Increases in the average balance of municipal securities approximated $26,817 while the average yield declined .3%. WesBanco emphasized purchases in municipal securities, which represented yield and tax advantages over other securities during the comparative period. Interest Expense - ---------------- Total interest expense increased $1,185 or 10.0% between the three month periods ended March 31, 1997 and 1996. Interest expense on deposits increased $1,119 or 10.3% during the comparative period as the average rate on interest bearing deposits increased .2% and average interest-bearing deposit balances increased by approximately $68,000 or 6.1%. Interest expense on interest bearing demand deposits increased $339 or 19.9% primarily due to an increase in the average rate of .3% coupled with an increase in the average balance of $15,000 or 5.4%. An increase of $1,139 or 16.5% in the interest expense on certificates of deposit was the result of an average balance increase of $80,354. The increase in average volume and rate for both interest bearing demand and certificates of deposit was primarily the result of the competitively priced Prime Rate Money Market product and the Good Neighbor Banking bonuses offered on various certificates of deposit products. Affected primarily by a shift in balances from savings into money markets and certificates of deposit, interest on savings accounts decreased $358 or 15.5%. Average savings balances declined $27,350 and the average rate decreased .2%. Interest on other borrowings, which consists primarily of repurchase agreements, increased $66 or 7.3% due to an increase in average balances outstanding of $6,742. Rates paid on repurchase agreements closely follow the direction of interest rates in the federal funds market. Other Income - ------------ Other income increased $208 or 6.8%. Trust fee income increased $201 primarily due to increases in the market value of trust assets and new trust business. The market value of trust assets approximated $1,598,576 as of March 31, 1997, an increase of $188,569 or 13.4% over March 31, 1996. Service charges and other income increased $88 or 5.8% between the three month periods ended March 31, 1997 and 1996.
15 Other Expenses - -------------- Total other expenses increased $1,510 or 14.9%. Approximately $675 or 45% of the increase was associated with the purchase acquisitions which occurred subsequent to the first quarter of 1996. Salaries and employee benefits increased $660 or 11.9% during the comparative period, of which approximately $432 was due to the purchase acquisitions. The remaining portion of the increase resulted from an increase in health insurance costs, partially offset by a reduction in pension costs. The reduction in pension costs was caused by market value appreciation of pension plan assets. Premises and equipment expense increased $296 or 19.8%. While the purchase acquisitions contributed to the increase in this expense category, the majority of the increase was due to depreciation expense and service agreements associated with Corporate initiatives in technology during 1996, including the installation of a microcomputer-based wide area network and a new mainframe software system. Other operating expenses increased $554 or 18%, of which approximately $290 of the increase was associated with the purchase acquisitions, including the related goodwill amortization. The remainder of the increase was primarily the result of both an increase in FDIC insurance premiums and consulting expenses associated with enhancing loan and deposit fee income. Income Taxes - ------------ A reconciliation of the average federal statutory tax rate to the reported effective tax rate attributable to income from operations follows: For the three months ended March 31, --------------------- 1997 1996 ---- ---- Federal statutory tax rate 35% 35% Tax-exempt interest income from securities of states and political subdivisions (10) (8) State income tax - net of federal tax effect 3 3 Alternative minimum tax credit carryforward recognized (3) -- All other - net 1 1 ----- ----- Effective tax rate 26% 31% ===== ===== As of March 31, 1997, the Corporation had credits for prior years' minimum taxes of approximately $720 available for future periods to reduce federal income taxes payable.
16 Other Matters - ------------- The Corporation has approximately 58% of its assets located in the Upper Ohio Valley, an area experiencing an extended strike between the United Steel Workers Union and Wheeling-Pittsburgh Steel Corporation. Through the current date, this strike has not significantly impacted WesBanco's results of operations. Since WesBanco is unable to determine when the strike may be settled, we cannot estimate the impact on the local economy, if the strike continues and ultimately the long-term effects resulting therefrom. Part II - OTHER INFORMATION - --------------------------- Item 1-5 - Not Applicable - ------------------------- Item 6(a) - Exhibits - -------------------- (27) Financial Data Schedule required by Article 9 of Regulation S-X. Item 6(b) - Reports on Form 8-K - ------------------------------- There were no reports filed on Form 8-K for the three months ended March 31, 1997.
17 SIGNATURE - --------- Pursuant to the requirement of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. WESBANCO, INC. Date: May 14, 1997 /s/ Edward M. George --------------------- --------------------------- Edward M. George President and Chief Executive Officer Date: May 14, 1997 /s/ Paul M. Limbert --------------------- --------------------------- Paul M. Limbert Executive Vice President-Credit Administration and Chief Financial Officer