WesBanco, Inc.

Good day, everyone, and welcome to the West Bank of second quarter 2021 earnings conference call. All participants are in elicit only mode. Should you need assistance, please say no conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star and then one. To withdraw your questions, you may press star and two. Please also note today's event is being recorded. At this time, I'd like to turn the conference call over to John Iannone, Senior Vice President of Investor Relations. Sir, please go ahead.

Thank you, Jamie. Good morning, and welcome to WestBanco Inc's second quarter 2021 earnings conference call. Leading the call today are Todd Claussen, President and Chief Executive Officer, and Bob Young, Senior Executive Vice President and Chief Financial Officer. Today's call an archive of which will be available on our website for one year, contains forward-looking information. Costary statements about this information and reconciliations of non-GAAP measures are included in our earnings-related materials issued yesterday afternoon, as well as our other SEC filings and investor materials. These materials are available on the investor relations section of our website, westbankland.com, All statements speak only as of July 28, 2021, and WestBanco undertakes no obligation to update them. I will now turn this call over to Todd.

Todd? Thank you, John. Good morning, everyone. On today's call, we're going to review our results for the second quarter of 2021 and provide an update on our operations for the 2021 outlook. Key takeaways from today's call are WestBanco remains a well-capitalized financial institution, solid liquidity, strong balance sheet, and solid credit quality. We continue to deliver year-over-year growth and pre-tax, pre-provision earnings driven by our diversified growth engines and company-wide commitment to expense management, while also making appropriate investments in support of our long-term growth. And we are focused on enhancing shareholder value through both long-term sustainable earnings growth and effective capital management. We are pleased with our performance during the second quarter as we continue to deliver pre-tax, pre-provision earnings growth. For the quarter ended June 30, 2021, we reported net income available to common shareholders of $69 million and diluted earnings per share of $1.03 when excluding merger and restructure charges. On the same basis, pre-tax, pre-provision income of $69.4 million grew 3.8% year-over-year, driven by strong fee income growth and disciplined cost control. and we reported strong pre-tax, pre-provision returns on average assets and average tangible equity of 1.63% and 17.5%, respectively. Reflecting our strong legacy of credit and risk management, our key credit quality ratios remained at low levels, and our regulatory capital ratios remained well above the applicable well-capitalized standards. Furthermore, as can be seen on slides 8 and 10 of our earnings presentation, our key ratios also remain favorable to peer bank averages. The successful execution of our growth and diversification plans during the last decade has transformed our institution in one where the majority of our organization is now in higher growth markets. Further, as a result of our company-wide focus on controlling discretionary expense, utilization of technology to gain operating efficiencies, and and optimization efforts, we've been able to leverage these savings to make investments in both our company and employees to support future opportunities while maintaining our efficiency ratio in the mid-50% range. Throughout the years so far, we have made more than 20 revenue-producing hires across our organization and our markets to strengthen our teams and enhance our ability to leverage growth opportunities once they fully return. These individuals have been concentrated in our commercial and residential groups as well as wealth management. I'm especially excited about our new residential mortgage lending team in Northern Virginia. We're right now waiting on the necessary approvals to operate in the state, but we're excited about this beachhead in Virginia. Similar to most of the banking industry, near-term loan growth continues to be difficult to predict as our local economies and commercial customers still have a significant amount of excess liquidity to work through. as well as the inability of some companies to quickly meet rebounding demand due to worker and inventory supply chain constraints. This excess liquidity has continued to impact commercial line of credit utilization, which we believe is bottoming out at the lowest level quarterly average in 10 years at 31.5%. Compounding this scenario has been a continuation of commercial real estate projected payoffs via a very aggressive secondary market. where we experienced a more than $100 million year-over-year increase in payoffs to approximately $190 million this quarter alone. That said, we have begun to realize a pickup in commercial loan demand as both our second quarter gross production and the June 30 pipeline are up a couple of percentage points from last year. In fact, our commercial loan pipeline is at its highest level in a year at approximately $760 million, with nearly 45% of that from our Maryland and Kentucky markets. Our residential mortgage loan origination team has continued to perform well and be a bright spot as production during the second quarter was roughly $330 million, down just 10 percent from a year ago, representing the fifth consecutive quarter of production greater than $325 million. Further, we continue our efforts to keep more residential mortgage on our balance sheet and have returned to a more historic 50 percent level as compared to the approximate 30% average during the prior three quarters. We believe that our diversified revenue engines, combined with experienced teams, make us well-positioned to take advantage of future growth opportunities. Over the long term, we anticipate mid-to-upper single-digit loan growth, driven by our expansion into Maryland and Kentucky. As I have mentioned before, we remain focused on appropriate capital allocation to provide financial flexibility in support of our long-term growth opportunities while also returning capital to our shareholders. In addition to the 3.1 percent increase in our dividend earlier this year, we purchased approximately 1.5 million shares or roughly 2.2 percent of our common stock on the open market during the second quarter. These repurchases represented about 45 percent of our existing authorizations. Furthermore, we are in the final stages of converting our core operating system to FIS's IBS platform. This platform will provide additional products and services for our customers and improved operational efficiencies. I firmly believe that the last couple of years, with our investments in the Mid-Atlantic region and the nearly completed core system conversion, we have solidified our evolution into a strong regional financial services institution that is supported by several unique competitive advantages. I'd now like to turn the call over to Bob Young, our CFO, for an update on the second quarter financial results and an outlook for 2021.