6. WesBanco, Inc.

Company Profile

Shares of WesBanco of Wheeling, W.V. closed at $18.65 Wednesday, returning 56% year-to-date according to SNL Financial.

WesBanco shares have shot up dramatically this year, up 56% since the start of 2010. The stock moved from a level around $12 in January to top $20 in the spring, then back down to the mid-teens in early fall. Now it's climbing back toward $20, closing above $19.50 in a recent session for the first time in months. The stock also pays a 14-cent quarterly dividend, half of its pre-crisis level but still a reasonable income stream relative to other bank stocks. Based on that payout, the shares yield 3.00%.

Income Statement

For the third quarter, WesBanco reported net income of $9.2 million, or 34 cents a share, compared to net income to common shareholders of $2.3 million, or 9 cents a share, a year earlier, when the company paid $3.1 million unamortized discounts and dividends when it redeemed the $75 million in preferred shares held by the government to completely exit TARP.

The third-quarter provision for credit losses was $11.8 million, declining from $16.2 million a year earlier. The company "released" $6.2 million in loan loss reserves, since third-quarter net charge-offs totaled $17.7 million. This followed the pattern for many of the nation's largest bank holding companies, including Citigroup, with loan loss reserves declining $2.5 billion during the third quarter, along with Bank of America and JPMorgan Chase ( JPM), which each reported a $1.68 billion decline in loan loss reserves.

WesBanco's third-quarter ROA was 0.62% and its net interest margin was 3.61%, improving from 3.35% a year earlier.

The improvements have come from a combination of top-line growth and lower credit costs, even as WesBanco's loan portfolio shrunk. The bank is reaching into business lines like wealth management and trust services, which helped pad fee income, while reducing problematic commercial real-estate holdings.

Balance Sheet

Total assets were $5.4 billion as of September 30 and the NPA ratio was 1.33%, improving from 1.47% a year earlier. The third-quarter net charge-off ratio was 2.10% and loan loss reserves covered 1.77% of total loans as of September 30.

In a point of pride, WesBanco was able to repay its bailout funds last year without raising any new common stock. Management has touted a strategy of growing through opportunistic acquisitions, focused on big cities and thoroughfares in its Midwest footprint.

The Tier 1 leverage ratio was 8.17% and the total risk-based capital ratio was 12.89% as of September 30. The tangible common equity ratio was 6.34% according to SNL Financial.

Stock Ratios

The shares trade for 1.5 times tangible book value and 13.5 times the $1.38 consensus earnings estimate for 2011. The forward P/E drops to 10.9 based on the 2012 consensus earnings estimate of $1.71 a share.

Analyst RatingsOut of seven analysts covering WesBanco, two rate the shares a buy, while the other five recommend investors hold the shares.

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