-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, CdtFDm+aNo4HSO/Y6XqDATfKuoP2Udt2WtQ8U59AhO2ch5Xi82eqtNzKIcpR9Eh7 bDnEWGZu7QcvSSXrcxiIvg== 0000203596-94-000005.txt : 19940817 0000203596-94-000005.hdr.sgml : 19940817 ACCESSION NUMBER: 0000203596-94-000005 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19940630 FILED AS OF DATE: 19940812 FILER: COMPANY DATA: COMPANY CONFORMED NAME: WESBANCO INC CENTRAL INDEX KEY: 0000203596 STANDARD INDUSTRIAL CLASSIFICATION: 6022 IRS NUMBER: 550571723 STATE OF INCORPORATION: WV FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-08467 FILM NUMBER: 94543587 BUSINESS ADDRESS: STREET 1: ONE BANK PLZ CITY: WHEELING STATE: WV ZIP: 26003 BUSINESS PHONE: 3042349000 MAIL ADDRESS: STREET 1: ONE BANK PLZ CITY: WHEELING STATE: WV ZIP: 26003 10-Q 1 WESBANCO 10-Q 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 June 30, 1994 OR TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ____________ to ____________ Commission File Number 0-8467 WESBANCO, INC. (Exact name of registrant as specified in its charter) West Virginia 55-0571723 (State or other jurisdiction of (I.R.S. Employer Identification No.) incorporation or organization) 1 Bank Plaza, Wheeling, WV 26003 (Address of principal executive offices) (Zip Code)
304-234-9000 (Registrant's telephone number, including area code) Not Applicable (Former name, former address and former fiscal year, if changed since last report) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or, for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No APPLICABLE ONLY TO CORPORATE ISSUERS: Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date. Outstanding at July 29, 1994, 8,579,126 shares. 2 PART 1 - FINANCIAL INFORMATION Unaudited consolidated condensed Balance Sheets at June 30, 1994 and December 31, 1993, Consolidated Statements of Income, Consolidated Statements of Changes in Shareholders' Equity and Consolidated Statements of Cash Flows for the six months ended June 30, 1994 and 1993 are set forth on the following pages. All previously presented financial information has been restated to include First Fidelity Bancorp, Inc. For further information see Footnote 5. In the opinion of management of the Registrant, all adjustments, consisting of normal recurring accruals, necessary for a fair presentation of the financial information referred to above for such periods, have been made. The results of operations for the six months ended June 30, 1994 are not necessarily indicative of what results will be for the entire year. For further information, refer to the Annual Report to Shareholders which includes consolidated financial statements and footnotes thereto and WesBanco, Inc.'s Annual Report on Form 10-K for the year ended December 31, 1993. Earnings per share was computed by dividing net income, less preferred stock dividends and accretion, by the weighted average number of common shares outstanding during the period. Preferred stock dividends are cumulative and are payable quarterly at an annual rate of $15.20 per share. Conversion of the preferred stock to common stock, in accordance with the conversion requirements, would increase outstanding common shares by approximately 113,443 shares. The fully dilutive effect of preferred stock is less than 3%. 3 WESBANCO, INC. CONSOLIDATED BALANCE SHEET (Unaudited) (dollars in thousands)
June 30, December 31, 1994 1993 ---------- ---------- ASSETS Cash and due from banks $ 45,765 $ 47,306 Due from banks - interest bearing 297 297 Federal funds sold 9,000 29,349 Investment securities (Note 1) 516,979 492,667 Loans-net (Notes 2 and 3) 734,649 734,298 Bank premises and equipment - net 22,218 22,453 Accrued interest receivable 11,738 12,020 Other assets 8,936 8,432 ---------- ---------- TOTAL ASSETS $1,349,582 $1,346,822 ---------- ---------- LIABILITIES Deposits: Non-interest bearing demand $ 119,245 $ 121,390 Interest bearing demand 270,286 277,756 Savings deposits 320,861 317,496 Certificates of deposit 395,587 396,962 ---------- ---------- Total deposits 1,105,979 1,113,604 ---------- ---------- Federal funds purchased and repurchase agreements 61,915 51,226 Short-term borrowings 8,285 10,454 Dividends payable 1,809 1,316 Accrued interest payable 5,012 5,452 Other liabilities 5,298 5,413 ---------- ---------- TOTAL LIABILITIES 1,188,298 1,187,465 ---------- ---------- Redeemable Preferred Stock (Series A, 8% Cumulative, $1.25 par value, 10,000 shares issued; 9,925 and 10,000 shares outstanding, respectively) 1,844 1,841 SHAREHOLDERS' EQUITY (NOTE 5) Preferred stock, no par value, 1,000,000 shares authorized; none outstanding --- --- Common stock, $2.0833 par value; 25,000,000 shares authorized; 8,682,103 shares issued 18,087 18,170 Capital surplus 26,984 27,910 Capital reserves 2,139 2,139 Retained earnings 116,974 111,378 Less: Treasury stock at cost (102,977 and 49,960 shares, respectively) (2,843) (1,324) Unrealized net loss on investments available for sale - net of tax effect (1,144) --- ---------- ---------- 160,197 158,273 Deferred employee benefit related to ESOP (757) (757) ---------- ---------- TOTAL SHAREHOLDERS' EQUITY 159,440 157,516 ---------- ---------- TOTAL LIABILITIES, REDEEMABLE PREFERRED STOCK AND SHAREHOLDERS' EQUITY $1,349,582 $1,346,822 ---------- ----------
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 For the six months ended June 30, ended June 30, ---------------------- --------------------- 1994 1993 1994 1993 ---- ---- ---- ---- INTEREST INCOME: Interest and fees on loans $ 15,558 $ 15,961 $ 30,796 $ 31,751 Interest on investment securities 7,365 7,972 14,433 15,986 Other interest income 147 175 398 369 ---------- ---------- ---------- ---------- Total interest income 23,070 24,108 45,627 48,106 ---------- ---------- ---------- ---------- INTEREST EXPENSE: Interest on deposits 8,284 9,474 16,535 19,345 Interest on other borrowings 457 486 890 942 ---------- ---------- ---------- ---------- Total interest expense 8,741 9,960 17,425 20,287 ---------- ---------- ---------- ---------- NET INTEREST INCOME 14,329 14,148 28,202 27,819 Provision for possible loan losses 429 615 1,135 1,392 ---------- ---------- ---------- ---------- NET INTEREST INCOME AFTER PROVISION FOR POSSIBLE LOAN LOSSES 13,900 13,533 27,067 26,427 ---------- ---------- ---------- ---------- OTHER INCOME: Trust fees 1,024 1,057 2,281 2,215 Service charges and other income 1,342 1,440 2,807 2,855 Net securities transaction gains 132 62 275 133 ---------- ---------- ---------- ---------- Total other income 2,498 2,559 5,363 5,203 ---------- ---------- ---------- ---------- OTHER EXPENSES: Salaries, wages and fringe benefits 5,415 5,252 10,591 10,270 Premises and equipment - net 1,141 1,130 2,315 2,248 Other operating 3,225 3,441 6,390 6,491 ---------- ---------- ---------- ---------- Total other expenses 9,781 9,823 19,296 19,009 ---------- ---------- ---------- ---------- Income before provision for income taxes 6,617 6,269 13,134 12,621 Provision for income taxes (Note 4) 1,934 1,753 3,815 3,587 ---------- ---------- ---------- ---------- NET INCOME $ 4,683 $ 4,516 $ 9,319 $ 9,034 ---------- ---------- ---------- ---------- Preferred stock dividends and discount accretion $ 46 $ 46 $ 92 $ 92 ---------- ---------- ---------- ---------- Net income available to common shareholders $ 4,637 $ 4,470 $ 9,227 $ 8,942 ---------- ---------- ---------- ---------- Earnings per share of common stock $ .54 $ .51 $ 1.07 $ 1.03 ---------- ---------- ---------- ---------- Average outstanding shares of common stock 8,632,280 8,667,143 8,637,279 8,667,143 ---------- ---------- ---------- ---------- Dividends declared per share of common stock $ .21 $ .19 $ .42 $ .385 ---------- ---------- ---------- ----------
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 six months ended June 30, ---------------------------- 1994 1993 ---- ---- Total Shareholders' Equity Balance, beginning of period $157,516 $147,452 -------- -------- Net Income 9,319 9,034 Cash dividends declared: Common (3,631) (2,547) Preferred (76) --- Common dividends by pooled banks prior to acquisition --- (602) Preferred dividends by pooled banks prior to acquisition --- (76) Common stock issued through a dividend reinvestment plan by pooled banks prior to acquisition --- 124 Accretion of preferred stock (16) (16) Net purchase of common treasury shares (2,528) (8) Retirement of treasury stock 1,009 --- Change in common stock due to treasury stock retirement (83) --- Change in paid in surplus - common stock due to treasury stock retirement (926) --- Increase in ESOP related borrowings --- (422) Unrealized net loss on investments available for sale-net of tax effect (1,144) --- -------- -------- Net change in Shareholders' Equity 1,924 5,487 -------- -------- Total Shareholders' Equity Balance, end of period $159,440 $152,939 -------- --------
The accompanying Notes to Consolidated Financial Statements are an integral part of these financial statements. 6 WESBANCO, INC. CONSOLIDATED STATEMENT OF CASH FLOWS (Unaudited) (in thousands)
For the six months ended June 30, ------------------------ 1994 1993 ---- ---- Cash flows from operating activities: Net income $ 9,319 $ 9,034 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation 1,021 916 Provision for possible loan losses 1,135 1,392 Net amortization and accretion 2,788 2,729 Gain on sales of investment securities (275) (133) Deferred income taxes 155 179 Other - net --- (432) Increase or decrease in assets and liabilities: Interest receivable 282 294 Other assets (496) (567) Interest payable (440) (347) Other liabilities 425 1,393 ------- ------- Net cash provided by operating activities 13,914 14,458 ------- ------- Investing Activities: Investment securities held to maturity: Payments for purchases (80,933) (82,253) Proceeds from sales --- 2,534 Proceeds from maturities and calls 26,079 28,580 Investment securities available for sale: Payments for purchases (44,349) (17,301) Proceeds from sales 46,679 13,951 Proceeds from maturities, calls and prepayments 23,831 27,852 Net increase in loans (1,464) (15,841) Purchases of premises and equipment-net (786) (1,061) ------- ------- Net cash used by investing activities (30,943) (43,539) ------- ------- Financing activities: Net decrease in certificates of deposit (1,375) (16,573) Net increase (decrease) in demand and savings accounts (6,250) 19,807 Increase in federal funds purchased and repurchase agreements 10,689 24,058 Proceeds from ESOP related borrowings --- 422 Increase (decrease) in short-term borrowings (2,169) 1,699 Dividends paid (3,213) (2,985) Net purchases of treasury stock (2,543) (8) ------- ------- Net cash provided (used) by financing activities (4,861) 26,420 ------- ------- Net decrease in cash and cash equivalents (21,890) (2,661) Cash and cash equivalents at beginning of year 76,655 74,029 ------- ------- Cash and cash equivalents at end of period $54,765 $71,368 ------- -------
For the six months ended June 30, 1994 and 1993, WesBanco paid $17,865 and $20,635 in interest on deposits and other borrowings and $3,400 and $3,685 for income taxes, respectively. As of June 30, 1994 and 1993, the net change in in-substance foreclosure loans resulted in a decrease of $588 and $455 in other assets, respectively. The Corporation retired 40,000 shares of Treasury Stock in a noncash transaction. The accompanying Notes to Consolidated Financial Statements are an integral part of these financial statements. 7 WESBANCO, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (in thousands) NOTE 1 - INVESTMENT SECURITIES - - ------------------------------
June 30, December 31, 1994 1993 --------- ------------ Securities: Investments Held to Maturity (at cost): U.S. Treasury and Federal Agency Securities $141,103 $274,962 Obligations of States and political subdivisions 129,867 121,757 Mortgage-backed securities --- 11,104 Other securities 1,829 1,721 Investments Available for Sale (June 30, 1994, at market, December 31, 1993, at lower of cost or market): U.S. Treasuries and Federal Agency Securities 233,389 74,808 Mortgage-backed securities 9,155 --- Other securities 1,636 8,315 -------- -------- Total $516,979 $492,667 -------- --------
As of January 1, 1994, the Corporation adopted FAS No. 115, "Accounting for Certain Investment in Debt and Equity Securities." Prior to the adoption of FAS No. 115, management's classification of available for sale included: U.S. Treasury and Agencies debt securities with a call or maturity of one year or less, corporate securities and marketable equity securities. With the adoption of FAS No. 115, management has changed its classification of investment securities available for sale to include Treasury and Agencies purchased with final maturities extending beyond three years, corporate securities, mortgage-backed securities and marketable equity securities. The market value adjustment as of January 1, 1994, increased investments by $5,259,000 and increased shareholders' equity by $3,182,000 after the tax effect of $2,077,000. The effect of the net market value adjustment as of June 30, 1994 was to decrease investments by $1,867,000 and decrease shareholders' equity by $1,144,000 after the tax effect of $723,000. Certain investment classifications in prior periods have been reclassified to conform with current presentation. 8 NOTE 2 - LOANS: - - ---------------
June 30, December 31, 1994 1993 --------- ------------ Loans: Commercial $163,481 $161,102 Real Estate-Construction 19,977 21,181 Real Estate-Mortgage 347,988 342,173 Installment 222,837 228,906 -------- -------- 754,283 753,362 -------- -------- Deduct: Unearned income (7,551) (7,213) Reserve for possible loan losses (Note 3) (12,083) (11,851) -------- -------- (19,634) (19,064) -------- -------- $734,649 $734,298 -------- --------
NOTE 3 - RESERVE FOR POSSIBLE LOAN LOSSES: - - ------------------------------------------
For the six months ended June 30, ---------------------- 1994 1993 ---- ---- Balance at beginning of period $11,851 $10,638 Recoveries credited to reserve 255 309 Provision for loan losses 1,135 1,392 Losses charged to reserve (1,158) (1,207) ------- ------- Balance at end of period $12,083 $11,132 ------- -------
NOTE 4 - INCOME TAXES - - --------------------- A reconciliation of the average federal statutory tax rate to the reported effective tax rate attributable to income from operations follows:
For the six months ended June 30, --------------------------- 1994 1993 ---- ---- Federal statutory tax rate $4,597 35% $4,417 35% Tax-exempt interest income from securities of states and political subdivisions (1,186) (9) (1,082) (9) State income tax - net of federal tax effect 352 3 340 3 All other - net (including retro- active effect of tax rate increase) 52 0 (88) (1) ------------ ------------ Effective tax rates $3,815 29% $3,587 28% ------------ ------------
9 NOTE 5 - COMPLETED MERGER - - ------------------------- On February 28, 1994, the Corporation acquired First Fidelity Bancorp, Inc., with assets totaling approximately $309,911,000, in a transaction accounted for as a pooling-of-interests. In connection with this transaction, the Corporation issued 2,053,815 shares of common stock and 10,000 shares of redeemable preferred stock. The consolidated financial statements for the six months and three months ended June 30, 1994 and 1993 and as of June 30, 1994 and December 31, 1993 include the accounts of First Fidelity Bancorp, Inc. for all periods and dates presented. The following supplemental information reflects the separate results of the combined entities for the periods prior to the acquisition: (in thousands, except per share amounts)
For the six months ended June 30, 1993 ----------------------------------- First As Fidelity Previously Bancorp, Presented Inc. Consolidated --------- ------- ------------ Net interest income $20,903 $6,916 $27,819 Net income 7,311 1,723 9,034 Earnings per common share 1.11 .70 1.03
10 MANAGEMENTS'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF - - --------------------------------------------------------------------------- OPERATIONS - - ---------- Comparison of the six months ended June 30, 1994 and 1993 - - --------------------------------------------------------- Net income for the six months ended June 30, 1994 was $9,319,000, a 3% increase over the same period in 1993. Earnings per share of common stock for the six months ended June 30, 1994 and 1993 were $1.07 and $1.03 respectively. Net income increased due to the increase in net interest income and a decrease in the provision for possible loan losses for the six months ended June 30, 1994 as compared to the same period during 1993. Annualized return on average assets (ROA) was 1.38% and 1.37% for the six months ended June 30, 1994 and 1993, respectively. Annualized return on average equity (ROE) was 11.76% compared to 12.03% for the six months ended June 30, 1994 and 1993, respectively. Current period loan and deposit interest rates are generally above levels noted in the previous comparative period. During the first six months of 1994, most banks' primary lending rate was between 6.0% and 7.25% and that rate for the first six months of 1993 approximated 6.0%. In spite of increasing rates, continued repricing of assets which had yields above these levels caused the average yield on WesBanco's interest earning assets to decrease to 7.2% during the first six months of 1994 from 7.8% during the first six months of 1993. Decreases in deposit rates implemented during 1993 for interest bearing liabilities caused a decrease in average rates paid to 3.3% during the first six months of 1994 from 3.9% during the first six months of 1993. Net tax equivalent interest income expressed as a percentage of average earning assets was 4.8% and 4.7% for the six months ended June 30, 1994 and 1993, respectively. Total interest income decreased $2,479,000 or 5% between the six month periods ended June 30, 1994 and 1993. Interest and fees on loans decreased $955,000 or 3% primarily due to the decrease in the average rates earned on loans outstanding partially offset by an increase in the average balance of loans outstanding. Average rates earned on loans decreased by approximately .6%. Average balances of loans increased due to the increase in mortgage 11 and installment loans outstanding. There were no significant changes in outstanding loan balances between December 31, 1993 and June 30, 1994. Interest on investments in U.S. Treasury and Agencies decreased $1,254,000 or 12%. The decline was due to a decrease in the average yield of .6% along with a decrease in the average outstanding balance of approximately $3,774,000 between the six months ending June 30, 1994 and 1993. Balances outstanding of U. S. Treasury and Agencies increased between June 30, 1994 and December 31, 1993, as a result of investing federal funds balances at a recently acquired bank. Interest earned on investments in states and political subdivisions increased $173,000 or 5%. Increases in the average balance of this type of investment, approximating $17,456,000 were offset by a decrease in the average yield of approximately .6%. Other interest income, primarily interest on federal funds sold, increased $29,000 or 8%. Increases in the average outstanding balance of approximately $1,864,000 along with an increase in the average yield of approximately .5% caused the increase. Overall declines in average investment rates earned were caused by maturities of higher yielding securities and the purchase of investments at current market rates. The decrease in the market value of investments classified as available for sale between January 1, 1994 to June 30, 1994 was approximately $7,126,000. The market rate adjustment represents a 2.9% decline from the market value as of January 1, 1994, and is a result of the recent increases in interest rates. The Lehman Brothers Government/Corporate Intermediate Index declined by 5.85% during the same time period. Total interest expense decreased $2,862,000 or 16% between the six month period ended June 30, 1994 and 1993. Average rates paid on all deposits decreased by approximately .6% offset by an increase in average total deposit volumes of approximately $6,333,000 between the periods ended June 30, 1994 and 1993. The outstanding balance of total deposits decreased between June 30, 1994 and December 31, 1993, due to the lack of general economic growth in major market areas, competition from nonbank products and 12 the lower interest rates offered. Interest expense on interest-bearing demand deposits decreased $597,000 or 14% primarily due to the decrease in the average rates paid of .5% partially offset by the increase in the average balances of approximately $8,914,000. The average interest rate paid on interest bearing demand deposits was 2.6% during the first six months of 1994 down from 3.2% during the first six months of 1993. Traditional savings account interest expense decreased $744,000 or 15% due to the decrease in the average rate paid by approximately .7% offset by an increase in the average balance outstanding of approximately $19,289,000. The average interest rate paid on traditional savings accounts decreased to 2.7% during the first six months of 1994 from 3.3% during the first six months of 1993. Certificates of deposit interest expense decreased $1,469,000 or 15%. The average outstanding balances decreased by $21,868,000 due to declining rates offered on certificates of deposit during 1993 and into 1994 in relation to other deposit products. Due to the deposit rate environment, the interest rate differential between certificates of deposit and passbook savings provided limited incentive for customers to reinvest in term accounts. Average rates paid on certificates of deposit decreased approximately .5% due to the decline in rates paid on new and rollover deposits. Interest on other borrowings, which primarily includes repurchase agreements, decreased $52,000 or 6% primarily due to the decrease in average rates paid of .2% offset by an increase in the average balances outstanding. Other income increased $160,000 or 3%. Trust fee income increased $66,000 primarily due to the number of new trust accounts and increases in estate settlement fees during the first six months of 1994. Trust assets were in excess of $1 billion as of June 30, 1994. Service charges and other income decreased $48,000 between the six months ended June 30, 1994 and 1993 primarily due to a decrease in service charges earned on deposit accounts. Net securities transaction gains increased $142,000 between the six months ended June 30, 1994 and 1993. 13 Total other expenses increased $287,000 or 2%. Salary expense increased $321,000 due to normal salary adjustments, increased payroll taxes, increased cost of health insurance and the increase in the number of full time equivalent employees to 777 at June 30, 1994 from 772 at June 30, 1993. Premises and equipment expense increased $67,000 between the six months ended June 30, 1994 and 1993, primarily due to the increased level of depreciation associated with upgrading data processing equipment. Other operating expenses decreased $101,000 or 2% primarily due to internal consolidations during 1994 and 1993 which improved operational efficiencies. The provision for loan losses decreased due to the decline in loans outstanding between June 30, 1994 and 1993, and due to management's evaluation of the loan portfolio in the current business environment. Net charge-offs remained stable at $903,000 as compared to $898,000 as of June 30, 1993. The reserve for possible loan loss was 1.62% of total loans as of June 30, 1994 and 1.59% as of December 31, 1993. Nonaccrual loans, renegotiated loans, in-substance foreclosures and other real estate owned decreased by $483,000 between June 30, 1994 and December 31, 1993. Total nonaccrual and renegotiated loans, in-substance foreclosures and other real estate owned totaled $11,552,000 or 1.5% of loans as of June 30, 1994 as compared to $12,035,000 or 1.6% as of December 31, 1993. The level of non- performing assets continues to be a result of the depressed commercial real estate market and the lack of industrial growth in the primary market area. Loans past due 90 days or more have increased to $2,726,000 or .4% of total loans as of June 30, 1994 from $2,550,000 or .3% of total loans as of December 31, 1993. Many commercial loans are in the form of demand notes and a number of these loans do not require principal payments. Accordingly, past due classifications might not be indicative of repayment risks. FAS No. 114, "Accounting by Creditors for Impairment of a Loan," is effective for periods beginning after December 15, 1994, and management is unable to determine the effect of adopting FAS No. 114 at this time. 14 Lending by WesBanco banks is guided by lending policies which allow for various types of lending. Normal lending practices do not include the acquisition of high yield non-investment grade loans or "highly leveraged transactions" ("HLT") from out of the primary market areas as described by uniform interagency definition of an "HLT" for supervisory purposes, jointly issued by the Federal Reserve Bank, the Comptroller of Currency and the Federal Deposit Insurance Corporation. Comparison of the three months ended June 30, 1994 and 1993 Total interest income decreased $1,038,000 between the three month periods ending June 30, 1994 and 1993. Interest and fees on loans decreased $403,000 due to a decrease in average rates partially offset by an increase in the average volume of loans outstanding. Interest on investments in U.S. Treasury and Agencies decreased $415,000. Average balances outstanding increased but were offset by a decrease in the average rates earned. Interest on investments in states and political subdivisions increased $71,000 primarily due to increased outstanding average balances. Other interest income, primarily interest on federal funds sold, decreased $28,000 due to the decrease in the average balance outstanding. Total interest expense decreased $1,219,000 between the three month periods ended June 30, 1994 and 1993. Interest paid on deposits decreased $1,190,000 primarily due to the decrease in average rates paid on deposits offset by an increase in the average balance outstanding of approximately $3,045,000. Interest on other borrowings decreased $29,000 for the three months ended June 30, 1994 and 1993, primarily due to the decrease in the average volume of short-term borrowings of approximately $6,555,000. Total other income decreased by $61,000 primarily due to the decrease in service charges and other income of $98,000 and trust fees of $33,000. Net securities transaction gains increased by $70,000. Total other expenses decreased by $42,000. Salaries and employee benefits increased $163,000 due to normal salary adjustments. Other operating expenses decreased $216,000 primarily due to internal 15 consolidations during 1994 which improved operational efficiencies. PART II - OTHER INFORMATION - - --------------------------- Item 1-5 - Not Applicable - - ------------------------- Item 6 (a) - Exhibits - - --------------------- (15) Letter re unaudited interim financial information. Item 6 (b) - Reports on Form 8-K - - -------------------------------- There were no reports filed on Form 8-K for the three months ended June 30, 1994. SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. WESBANCO, INC. Date: August 12, 1994 /s/ Edward M. George ------------------ -------------------- Edward M. George President and Chief Executive Officer Date: August 12, 1994 /s/ Paul M. Limbert ------------------ -------------------- Paul M. Limbert Executive Vice President and Chief Financial Officer EX-15 2 WESBANCO 10-Q 1 EXHIBIT 15 PRICE WATERHOUSE L.L.P. Report of Independent Accountants --------------------------------- August 8, 1994 To the Board of Directors and Shareholders of WesBanco, Inc. We have reviewed the consolidated balance sheet and the related consolidated statements of income, changes in shareholders' equity and cash flows of WesBanco, Inc., and its subsidiaries (the Company) as of June 30, 1994 and 1993, and for the 3-month and 6-month periods then ended (the consolidated interim financial information) as presented in the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 1994. This consolidated interim financial information is the responsibility of the Company's management. We conducted our review in accordance with standards established by the American Institute of Certified Public Accountants. A review of interim financial information consists principally of applying analytical procedures to financial data and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with generally accepted auditing standards, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion. Based on our review, we are not aware of any material modifications that should be made to the consolidated interim financial information for it to be in conformity with generally accepted accounting principles. We previously audited, in accordance with generally accepted auditing standards, the consolidated balance sheet as of December 31, 1993, and the related consolidated statements of income, changes in shareholders' equity and cash flows for the year then ended (not presented herein), and in our report dated January 24, 1994 and February 28, 1994, we expressed our unqualified opinion on those consolidated financial statements. We did not audit the financial statements of First Fidelity Bancorp, Inc. for 1993, which statements reflect total assets of $307,965,000 at December 31, 1993. Those statements were audited by other auditors whose report thereon has been furnished to us, and our opinion expressed herein, insofar as it relates to the amounts included for First Fidelity Bancorp, Inc. for 1993, is based solely on the report of other auditors. In our opinion, the information set forth in the accompanying consolidated balance sheet information as of December 31, 1993, is fairly stated in all material respects in relation to the consolidated balance sheet from which it has been derived. /s/ Price Waterhouse L.L.P. 600 Grant Street Pittsburgh, PA 15219 -----END PRIVACY-ENHANCED MESSAGE-----