WesBanco's (WSBC) CEO Todd Clossin on Q2 2016 Results - Earnings Call Transcript

| About: WesBanco, Inc. (WSBC)

WesBanco, Inc. (NASDAQ:WSBC)

Q2 2016 Results Earnings Conference Call

July 20, 2016 01:00 PM ET


John Iannone - Vice President and IR

Todd Clossin - President and CEO

Bob Young - EVP and CFO


Catherine Mealor - KBW

John Moran - Macquarie

Bob Ramsey - FBR


Welcome to the WesBanco Second Quarter 2016 Earnings Conference Call. All participants will be in listen-only mode. [Operator Instructions] After today’s presentation, there will be an opportunity to ask questions. [Operator Instructions] Please note this conference is being recorded.

I would now like to turn the conference over to John Iannone, Vice President and Investor Relations. Mr. Iannone, please go ahead.

John Iannone

Thank you, Nicole. Good afternoon, and welcome to WesBanco Inc. second quarter 2016 earnings conference call. Second quarter 2016 earnings release which contains reconciliations of non-GAAP financial measures was issued yesterday afternoon and is available on our website, www.wesbanco.com. Leading the call today are Todd Clossin, President and Chief Executive Officer; and Bob Young, Executive Vice President and Chief Financial Officer. Following the opening remarks, we will begin a question-and-answer session. An archive of this call will be available on our website for one year.

Forward-looking statements in this report relating to WesBanco’s plans, strategies, objectives, expectations, intentions and adequacy of resources are made pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. The information contained in this report should be read in conjunction with WesBanco’s Form 10-K for the year ended December 31, 2015, and Form 10-Q for the quarter ended March 31, 2016 as well as documents subsequently filed by WesBanco with the Securities and Exchange Commission which are available on the SEC and WesBanco websites.

Investors are cautioned that forward-looking statements, which are not historical facts involve risks and uncertainties, including those detailed in WesBanco’s most recent Annual Report on Form 10-K filed with the SEC under Risk Factors in Part I, Item 1A. Such statements are subject to important factors that could cause actual results to differ materially from those contemplated by such statements. WesBanco does not assume any duty to update forward-looking statements. Lastly, please be aware that telephonic and webcast replays of today’s call will be made available as soon as the transcript is available and filed with the SEC. Todd?

Todd Clossin

Thank you, John. Good afternoon. Welcome to WesBanco’s 2016 second quarter earnings call. As many of you know, WesBanco is a diversified and well-balanced financial services institution with the community bank at its core that is built upon a strong legacy of credit and risk management. We have meaningful market share across our key geographies maintained by exceptional customer service, and a solid and growing fee-based businesses lead by our proprietary mutual fund family, the WesMark Funds and our century old trust business.

On today’s call, we’ll cover several operational topics and review our financial results for the second quarter.

Before we begin, there are several key takeaways this afternoon. We remain focused on long-term growth while maintaining our focus on strong credit quality, capital ratios and shareholder return. We continue to realize mid-single digit total loan growth on a year-over-year basis and anticipate a continued lower for longer interest rate environment. We’re on track with regard to our planned merger with Your Community Bankshares and we’re making steady progress on our business and balance sheet mix strategies. So, we’re pleased for our results for the quarter, which were in line with our expectations as we continue to focus on long-term growth and execution of our stated strategies.

Excluding merger related expenses, we earned fully diluted earnings per share of $0.59 on income of $23 million for the second quarter of 2016 and $1.18 per share, a net income of $45 million for the six months ending June 30, 2016. In addition, our year-to-date efficiency ratio of 56.3% reflects an 86 basis-point improvement year-over-year as our non-interest expense during the second quarter came in as expected.

While Bob will provide more details in a few minutes, we’re focused on maintaining a strong financial institution for our shareholders as evident through our credit quality and our capital ratios. Non-performing loans to total portfolio loans, total non-performing assets to total assets, and net charge-offs to average loans continued to decline to 0.8%, 0.55% and 0.08% respectively for the quarter ended June 30, 2016.

Furthermore, we remain focused and dedicated to returning value to our shareholders through our strong 2016 year-to-date return on assets and tangible equity ratios of 1.06% and 13.97% respectively, as well as our dividend payout ratio during the second quarter of 41.4%.

As we’ve clearly laid out, our long-term growth is focused on five key strategies: Growing our loan portfolio with an emphasis on commercial and industrial lending; increasing fee income over time; traditional retail banking services, efficiencies in growth; expense management; and franchise expansion.

As of June 30, 2016, our total loan portfolio grew to $5.2 billion, an increase of 5% as compared to a year ago, benefiting from an $822 million loan origination total during the first six months of 2016. More than half of our year-over-year growth in total loans was from our strategic focus on commercial and industrial and home equity loans as these categories grew 11% and 15% year-over-year respectively due to our commercial lending hires, increased business activity and focused calling efforts. As most of your know, it’s important to view our loan growth over a rolling four-quarter period in order to mitigate the impact from quarterly fluctuations in our construction portfolio due to repayments.

In addition, we remain committed to our strong legacy of credit and risk management. In this competitive and extended lower for longer interest rate environment, we continue to be judicious with the loans we book as we will pass on deals where we feel the pricing and/or the structure is not reflective of the credit risk. While the strategy might cost a few basis points of loan growth now, it will provide significant benefits to the Company and our shareholders during the next credit cycle. And lastly, we still anticipate mid single digit overall loan growth during 2016 as our loan pipelines remain robust.

In the current operating environment, our expense management remains critical. We continue to control our discretionary expenditures and we continue to ensure investments we make contribute positive operating leverage over a reasonable period as loans are giving key operational areas to identify additional potential cost savings.

Our announced merger with Your Community Bankshares is on track and we still anticipate a late third quarter or early fourth quarter closing. As we mentioned in May, this merger matches perfectly with our strategic growth plans as it provides an opportunity to bring a high quality commercial bank into our organization and expands our footprint into new high-growth markets with great demographics. We believe these new markets have the potential for higher growth in 2017, pending consummation of the proposed merger.

As we have mentioned previously, we intend to appropriately remix and manage our balance sheet while still encouraging loan growth. As we said on last quarter’s call, during the fourth quarter of 2015, we increased the asset sensitivity of our balance sheet by increasing the amount up and lengthening the maturities on our Federal Home Loan Bank borrowings. While we’re now expecting an extended lower for longer interest rate environment, we remain comfortable with our positioning.

In addition, we’re focused on carefully maintaining the size of our balance sheet in order to delay the financial impact of crossing $10 billion in assets as we reduced the size of our securities portfolio during the second quarter of 2016.

Lastly, I’d like to provide a brief update on the shale oil and gas environment within which we operate. Our efforts with shale oil and gas remain centered on deposit and wealth management growth as monthly deposits from our Marcellus and Utica shale landowner customers continue to be meaningful. Furthermore, there has been no material change in our exposure to the oil, gas and coal industry or the credit quality of that exposure.

While pipeline construction remains a positive for 2016 and 2017, Royal Dutch Shell recently announced that it will build a multibillion dollar ethane cracker plant along the Ohio River near Pittsburg. This is a great development for our region as it reflects the great potential of abundant shale gas. This multiyear project was for hundreds if not thousands of direct and indirect jobs and will encourage potential development opportunities by the manufacturing, petrochemical, energy, and plastics industries. We are well-positioned to benefit from the economic activity that will be generated from this project.

I would now like to turn the call over to Bob Young, our Chief Financial Officer for an update on the second quarter’s financial results. Bob?

Bob Young

Thanks, Todd. And good afternoon to all of those on the call this afternoon. For the six months ending June 30, 2016, we reported net income of $45 million and earnings per diluted share of a $1.17 at merger-related expense. Excluding those expenses from both periods, net income would have increased 6.7% to $45.4 million with earnings per diluted share up one penny to a $1.18. Year-to-date, the return on average assets was 1.06% and return on average tangible equity was 13.97%. For the quarter ended June 30, we reported net income of $22.1 million and earnings per diluted share of $0.58. Excluding merger related expenses, net income would have been $22.6 million and earnings per diluted share of $0.59 as compared to $22.4 million and $0.58 per share last year. For the second quarter, return on average assets was 1.05% and return on average tangible equity was 13.55%. Over the past five quarters our returns on assets and equity have been relatively stable, reflecting the stability, despite the current interest rate environment as our asset remix strategy has helped to offset a lower net interest margin.

My remaining earnings related comments will focus on the second quarter’s results. Our earnings release published last evening contains our consolidated financial highlights as well as reconciliations of non-GAAP financial measures.

Net interest income in the second quarter was down 1.7% year-over-year at $59.8 million, as a result of a 14 basis-point decrease in the net interest margin, partially offset by a 3.2% increase in average earning assets to $7.6 billion. The increase in average earning assets was driven by a 5.2% increase in average loan balances, reflecting our balance sheet remix strategy of decreasing investments securities balances to fund loan growth and in order to maintain the size of the balance sheet to delay the financial impact of crossing the $10 billion asset threshold.

Total portfolio loans of $5.2 billion as of June 30, 2016 increased $236 million or 4.8% year-over-year, reflecting strong year-to-date loan originations supported by 13% growth in total business loan originations. Total loan growth was driven by growth in commercial real estate, primarily construction and land development, commercial and industrial, and home equity loan categories as the latter two drove more than half of the year-over-year growth in total loans. This reflects our strategic focus on commercial and industrial as well as home equity loans as these categories grew 11% and 15% year-over-year respectively due to our commercial lending hires, increased business activity, and focused calling efforts.

Total deposits -- $0.9 billion at June 30, 2016, due primarily to reductions in certificates of deposits from lower rate offerings for maturing CDs, continued runoff of higher cost retail CDs, particularly runoff of a $146 million from ESB, lower CDARS balances, and customer preferences for other deposit types as we continue to shift our deposit base to emphasize multiple relationship customers. When excluding the impact of CDs, total deposits increased slightly to $4.5 billion, reflecting our deposit remix strategy.

For the second quarter of 2016, the net interest margin was 3.30%, down 14 basis points year-over-year, primarily reflecting lower spreads and the repricing of existing loans and competitive new loan pricing, both of which were the direct result of the continued low interest environment and flatter yield curve. A partial mitigant to the lower spreads is our continued loan growth and balance sheet remix strategy, which over time will improve asset yields at average loan rates or higher than securities rates.

In addition, our net interest margin also reflects increased funding costs associated with a higher proportion of Federal Home Loan Bank medium-term borrowings and higher junior subordinated debt costs, otherwise known as drops [ph] as these LIBOR denominated instruments increasing costs from the December federal funds increase of 25 basis points.

Federal Home Loan Bank borrowings of $1.1 billion represented 17.2% of average interest bearing liabilities during the second quarter of 2016 as compared to 8.3% a year ago. This increase of $276 million year-over-year, reflects our balance sheet remix strategy, which included increasing our overall asset sensitivity late in 2015 in anticipation of a rising rate environment as well as partially offsetting the planned runoff of higher rate certificates of deposit. Due to the anticipated lower for longer interest rate environment now, we intend to somewhat reduce asset sensitivity by allowing maturing borrowings to be replaced with shorter term advances as funding needs are determined after the acquisition of YCB and in conjunction with maintaining the pro forma combined balance sheet below $10 billion.

Turning now to non-interest income, it increased 8.4% from the prior year to $19.6 million. This $1.5 million increase was driven by 800,000 of commercial customer loan swap fee income and 600,000 of securities gains from the sale or call of mortgage-backed securities and agency securities. The securities gain is a result of continuing our stated strategy to reduce the percentage of securities to total assets, which increased due to the ESB acquisition and as part of the balance sheet remix and size strategies. While trust fees were negatively impacted year-over-year due to reduced trust assets, lower estate fees and market declines, our e-banking fees did increase year-over-year from increased retail and business transactions.

We remain focused on long-term expense management and positive operating leverage. For the year-to-date period, our efficiency ratio improved 86 basis points, excluding merger related costs and on a year-to-date basis, we delivered operating leverage as revenue growth exceeded expense growth.

Non-interest expense for the second quarter of 2016 increased just $1.2 million year-over-year to $46.7 million, excluding merger-related costs. Expenses for the second quarter were consistent with the expense run rate from the fourth quarter of 2015, as we noted on last quarter’s call. Salaries and wages increased 400,000 year-over-year due to annual employee wages and higher stock compensation, partially offset by a 1% decrease in full time equivalent employees, while employee benefits increased 500,000 due to higher health insurance costs. Furthermore, continued investments in our technology and communications platforms as well as origination and customer support systems drove higher equipment costs.

Turning to our asset quality and regulatory capital ratio metrics, for the three months ended June 30, 2016, our net charge-offs of 1 million represented a ratio to average loans of just 0.08%, an improvement versus both the prior year and sequential quarterly periods. The provision for credit losses was 1.8 million for the quarter, primarily reflecting loan growth and normal consumer loan net charge-offs. Non-performing loans and non-performing assets, which had increased somewhat after the ESB acquisition, have continued to decline in both absolute dollars and as percentages of total loans. Non-performing loans to total loans were 80 basis points and non-performing assets to total assets were 55 basis points, at the end of the second quarter.

Our capital ratio has remained well above the well-capitalized standards required by bank regulators, as well as Basel III with our Tier 1 leverage capital ratio of 9.71%, Tier 1 risk-based capital of 13.62%, and total risk-based capital of 14.4%, as well as common equity Tier 1 capital ratio of 11.88%. Lastly, our tangible equity to tangible assets ratio improved to 8.56% as compared to 7.68% at the end of the second quarter of last year assisted by the growth in retained earnings as well as higher other comprehensive income.

Before opening the call for your questions, I would like to provide an update on our thoughts regarding the second half of 2016. We continue to anticipate a competitive loan environment impacted by an extended lower for longer interest rate scenario with the flatter yield curve, which will continue to impact our net interest margin as existing loans repriced and new loans are booked. In addition, the continued execution of our balance sheet remix strategy, as we delayed the financial impact of crossing the $10 billion threshold, will also have somewhat of an impact in the near-term. Although reducing the size of our investment portfolio is part of our longer term strategy.

We are now only modeling for one rate increase in December of this year as compared to two previously and just one increase during 2017, at this time. We still anticipate mid-single digit overall loan growth, which we plan to fund with normal securities portfolio runoff and if necessary, shorter term borrowings. Lastly, while we continue to focus on positive operating leverage, we anticipate expenses during the second half of 2016 will be well-controlled and up only minimally for typical midyear salary increases and higher marketing costs associated with our growth strategy.

We’re now ready to answer your questions. Operator, would you please review the instructions?

Question-and-Answer Session


We’ll now begin the question-and-answer session. [Operator Instructions] The first question comes from Catherine Mealor with KBW. Please go ahead.

Catherine Mealor

First question just a follow-up on the margin. Bob, how do you think about, with the flat yield curve -- and I guess last quarter you mentioned that if we didn’t see any change in the rate environment that we might see another 3 to 5 bps compression in the margin. But, you certainly did a great job this quarter offsetting the margin pressure you’ve got with the balance sheet remix. And so, do you think that the balance sheet remix is enough to keep the margin flat, as we look out for -- let’s just say rates don’t move this year or next; is there enough opportunity on the remix side to keep the margins flat or do you think in that scenario, we still got some downward trending margins?

Bob Young

We think in the near-term, we’re going to hold the margin relatively where it is at this point. Recall we have a few basis points still from purchase accounting accretion, 4 or 5 is what we’re predicting in the back half of the year; it was 7 in the first half of the year. So, we’re going to offset that with the continued balance sheet remix. And the sale of securities in the second quarter as well as some that we’ll inherit from YCB also serves as part of that remix to bolster the margin slightly just because of the percentages of lower yield on securities to loans after you engage that strategy.

Now, while the margin then might hold, you might see because of the size of the balance sheet lower, net interest income and what would be there, had we not been approaching the $10 billion level. But I think the answer to your question longer term, we would expect that you’d see a couple of basis points of downward pressure on the margin, despite the remix, as we move through the back half of the year towards the end of the year particularly. And then as our analysis has won increase in it, so that’s kind of holding it early into next year. So if you’re assumption is let’s take that away, then I think you’d continue to see that couple of basis points or so per quarter. I don’t think we’re headed too much lower at this point. And, I do believe the loan growth that we have factored in will assist us in continuing to hold the margin fairly close to where we are.

Catherine Mealor

And then on YCB, now that you’re a few months into analyzing what that pro forma impact will be, any change in thoughts as to what the pro forma margin looks like with YCB? I know that that yield should be accretive to your margins.

Bob Young

Yes, and we did talk about 5 to 10 basis points last quarter in accretion on the margin; I’m still thinking that, maybe a little closer to the higher end of that range. Recall, it’s only 17% of our total balance sheet size, so even though they’re running in the 370 to 380 area with their purchase accounting accretion from the last acquisition, and if you want to strip that out to 20 basis points lower, they do have accretion in terms of current margin as compared to where we are, given their balance sheet mix and higher loan balances. So, still guiding to the same level, Catherine, post merger.

Catherine Mealor

And then, wanted to follow up on just news we saw about the flooding in West Virginia, any material impact to your franchise, borrowers, branches?

Todd Clossin

No, really not. The flooding was really in the central part of the state, central southern part of the state, and our franchise is significantly north of that. We have a few branches in Charleston area but everything is north of the state. So, while we’re doing what we can to help and support the relief efforts down there with employees and contributions and few things like that no material impact to our business at all, just really had not impact at all.

We did offer a flood relief consumer loan program in conjunction with that. I think we’ve put an announcement on that, Catherine.


[Operator Instructions] Our next question comes from John Moran of Macquarie. Please go ahead.

John Moran

Quick question on the $10 billion level; I think it’s kind of a two-part question; one is with YCB in there. You guys would plan to cross 10 billion organically anyway kind of half way through ‘17 but not before the end of 2Q. Is that correct?

Todd Clossin

I think what we’ve talked about before we’d anticipate in back half of ‘17 or early ‘18 was when we would expect to go over whether it’d be organically or through an acquisition but through the deleveraging strategy and the remix strategy, thought would be we would stay under until then.

John Moran

So, there’s enough kind of runway on remix to get you all the way through into ‘18, if you had to then?

Todd Clossin

We’ve gone from around 30% of our balance sheet meaning securities back with ESB now right at mid 20 range. And we think historically, we’ve been in that 20 to 25 range. So, we think that would drift lower to the 20 range. And we’d be comfortable with that. I just think that’s a healthier balance to have on the balance sheet anyway.

John Moran

And then, just in preference of crossing ultimately, and I think I remember from the one if we found the right sort of $1 billion, $2 billion institution but that that would be kind of the preferred method or is there changing sort of thought -- thought process around that changed at all?

Todd Clossin

I think what we talked about at the time of the merger announcement is still very much in place. There’s a number of banks of our size that are going through different strategies to cross that threshold. And I think what you want to do is keep your options open. Obviously you want to get up to a couple of billion over 10 billion fairly quickly after you go over $10 billion in size for reasons everybody knows about, and we’ve talked about in the past. But also, you also want to maintain your discipline as you’re going through the process. And there’s a lot of wrong deals with the right size out there as well, and we’re cautious organization. We’re going to look at the right opportunities as they present themselves but you can’t control when those happen or the timing exactly. So, that would be the initial thought that we reserve the ability to go over organically at some point, if we were to choose to do that.

John Moran

And then, Bob, I’m sorry if I missed it; did you give what the new money loan yields are coming on at this quarter? I know that there was a little bit of slippage there in the loan yields and you said in the outlook that you’d expect a continued tough competitive environment. But if you mentioned it, I missed the new money loan yields?

Bob Young

I did not provide that. There’s no question that spreads have tightened on new loans. And depending upon the nature of the new loans, are they LIBOR priced or are they fixed rate for particular term can have an influence on those loan yields as well. Keep in mind swap spreads are much lower than they were, as well as just the difference between on around two years versus 10 years, you’re down to 86 basis points difference between those two. So, we’ve incorporated those assumptions in our modeling here at June 30th, as we look forward and I gave you some guidance on how many increases or the lack there of that we’re currently planning. So while we’re still getting similar credit spreads to the past, it would be a lower rate environment and lower swap spreads that would be decreasing the current rates that we get on new loans. And there is a competitive factor there as well in particular markets, John. That’s correct.

John Moran

And the last one for me, I think you guys said 50% of the production this year was on the focus categories, C&I and HELOC. I am wondering if you have the split on how much of that was coming out of the urban part of the footprint versus I’ll call the legacy or the royal part of the footprint and in particular on the HELOC product?

Todd Clossin

What I’d say in answer to that question is, we’ve been involved in the C&I business and HELOC business for a long time. And we’ve got a nice market share in our legacy markets on C&I, and that continues to support well and continues to grow. The focus in some of the larger urban areas that we’ve mentioned, we’ve had a commercial real estate focus for a quite while, and that’s where we’re building out a lot of additional C&I lenders. So, you’re seeing more C&I growth now in some of those markets, Pittsburg, Columbus, Cincinnati, those types of markets and maybe you saw in the past because we’re staffed, we’re staffed to get that growth now in the C&I space. But, we’ve also been staffed in our legacy markets and we’ve always grown C&I in our legacy markets. So, we continue to see growth across the whole franchises as a result of that. And part of that is too with more of a focus on C&I and some big urban areas and we’re enhancing our products that you saw some of the swap fees that we reported in our earnings this quarter. We get those in the new markets and the legacy markets, so our legacy markets benefit from continued product enhancements that we’re taking on as a result of trying to be competitive in the bigger urban markets.


Our next question comes from Bob Ramsey of FBR. Please go ahead.

Bob Ramsey

Credit turns are obviously good, revision is sort of at the lower end where it’s been over the last years or so, just curious how you think about the provision trajectory, whether you can stay around this level or you think it sort of gradually builds from here or what your thoughts are?

Todd Clossin

We’ve been at the 0.82, 0.83, 0.84, I think the last three quarters, so it’s flat to going up here, but credit quality continues to be strong. We turned down a lot of deals because of price and because of structure that gets on elsewhere and I know that costs us maybe some percentage points or so on the loan growth but that really benefits us and relating to your question, going into the next recession. We don’t know when that’s going to be, but we know it’s there. So, we’re continuing to be very, very diligent on our underwriting standards. And obviously that pulls into the provision as well too on the consumer side and on the commercial side. When and if we see deterioration start to occur, we address that but we do feel we’re on the lower end of kind of historical range where we’re at right now.

And 0.84, you’ve also got the impact of prior mergers, which you add that and it puts up I think at 0.97 or so range overall, so roughly near 1%. With the credit quality we’ve got at this point of economic cycle and credit cycle, we feel pretty good about where we’re at. But we would address it if trends changed.

Bob Young

Yes, clearly the historic charge-off ratio as well as just improvements in criticized and classified and non-performers is what’s driving the number lower. Basically this quarter, you’re providing for the growth as well as just ordinary consumer loan charge-offs which have a quick return. And until we adopt current expected credit losses in 2020, I’ll have grayer hair by then, but until we adopt that, we’re not going to be anticipating credit losses for the future; it has to based upon inherent losses in the portfolio today, which is informed by prior historic charge-off ratios. So, similar levels to where we are at the moment, Bob.

Bob Ramsey

And then, what is the right tax rate to use on a go forward basis?

Bob Young

What rate would you like to use? We’re currently between 27% and 28% is what we have been referring to this year, closer to the 27% rate, Bob.

Bob Ramsey

Okay, I think you guys are little bit on about this quarter and you’re under that last year. So I just didn’t know if I had been modeling it too high but that’s fair. Thank you very much.

Bob Young

The reason why it was lower last year was because you had -- you don’t look at core income for tax purposes, you would look at GAAP primarily with some tax deductions. But, last year, you just had lower net income because of those one-time charges related to ESB, the bulk of which were deductible.


We have a follow-up question from John Moran of Macquarie. Please go ahead.

John Moran

Hey guys I’m sorry, let me sneak one more in at the end here. The trust line has been running a little weak year-over-year in terms of comps. And I know that there’s market volatility obviously in there, but I’m wondering if you could give an outlook for that on the fee income side of things. And how much of that is tied to kind of royalty business in the footprint?

Todd Clossin

Well, you mentioned the volatility and it’s not just the volatility within the quarter, it’s when you take the fees, what day of the month you take the fees within the quarter and what’s the market doing on that day. So, it’s kind of hard to look at an average volatility for the quarter without having a specific day and what not to work on. And I think we’re going to expect to see continued volatility there. We’ve got a large trust department that’s been around for a 100 years. So, we’ve got a steady stream of payouts that occur on that on a regular basis to beneficiaries but we’re also seeing a lot of significant inflows. And those ebb and flow sometimes dramatically from month to month or from quarter to quarter. But, the core business continues to remain strong. We don’t see any big fundamental changes in that business one way or the other, unless there was a significant market correction that would be sustained and wouldn’t bounce back. Outside of that, I think what you’ve seen in the past has been pretty consistent with what you’re going to see in the future from us.

Bob Young

So, the first quarter is typically our highest quarter because of tax fees and we are experiencing, as I said in the press release and on my scripted comments, the state fees are expected to be lower this year than they were last year and slightly lower investment fees on the WesMark Funds. But, other than that, other than the asset base being a little bit lower, those are the significant factors.


This concludes our question-and-answer session. I would like to turn the conference back over to Todd Clossin for any closing remarks.

Todd Clossin

Thanks, Nicole. Let me wrap up. We’re very pleased with our progress, as we mentioned during 2016 to-date. We’re going to continue remain vigilant on our expense management in the extent of lower for longer interest rate environment as well as continue to execute upon the balance sheet and business mix strategies that we’ve talked about today. We’re excited about the opportunities for long-term growth that are going to be enhanced by the planned merger with Your Community Bankshares. And I want to thank you all for joining us today. Hope to see you at one of our upcoming investor events. Have a good day.

Bob Young

Thank you.


The conference has now concluded. Thank you for attending today’s presentation. You may now disconnect.

Copyright policy: All transcripts on this site are the copyright of Seeking Alpha. However, we view them as an important resource for bloggers and journalists, and are excited to contribute to the democratization of financial information on the Internet. (Until now investors have had to pay thousands of dollars in subscription fees for transcripts.) So our reproduction policy is as follows: You may quote up to 400 words of any transcript on the condition that you attribute the transcript to Seeking Alpha and either link to the original transcript or to www.SeekingAlpha.com. All other use is prohibited.


If you have any additional questions about our online transcripts, please contact us at: transcripts@seekingalpha.com. Thank you!