WesBanco, Inc. (WSBC): Business Model Canvas [10-2024 Updated]
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WesBanco, Inc. (WSBC) Bundle
WesBanco, Inc. (WSBC) operates with a robust business model that emphasizes community engagement and comprehensive financial services. This blog post delves into the Business Model Canvas of WesBanco, highlighting key components such as their
- strategic partnerships
- value propositions
- customer segments
WesBanco, Inc. (WSBC) - Business Model: Key Partnerships
Collaborations with Federal Home Loan Bank
WesBanco has established a significant partnership with the Federal Home Loan Bank (FHLB). As of September 30, 2024, WesBanco's borrowings from the FHLB amounted to $1.175 billion, a decrease of 13.0% from $1.350 billion at December 31, 2023. This partnership allows WesBanco to secure funding at competitive rates, which is essential for supporting its lending activities.
Partnerships with Local Businesses for Community Banking
WesBanco actively collaborates with local businesses to enhance its community banking initiatives. This includes providing tailored financial products that cater to local enterprises. As of September 30, 2024, total portfolio loans reached $12.5 billion, with significant contributions from commercial lending. The bank's efforts in community engagement are reflected in its deposit gathering and retention strategies, which resulted in total deposits increasing by $668.6 million or 5.1% during the first nine months of 2024.
| Partnership Type | Details | Financial Impact |
|---|---|---|
| Federal Home Loan Bank | Borrowings | $1.175 billion (Sept 30, 2024) |
| Local Business Collaborations | Community Banking Initiatives | Loans Portfolio: $12.5 billion (Sept 30, 2024) |
| Deposit Growth | Total Deposits | $13.8 billion (Sept 30, 2024) |
Relationships with Financial Technology Firms
WesBanco has been forming strategic alliances with financial technology firms to enhance its digital banking capabilities. These partnerships are crucial for adapting to the evolving financial landscape and improving customer experience. As of September 30, 2024, WesBanco reported total non-interest income of $29.6 million for the third quarter, which reflects the impact of its technological investments.
Additionally, the bank's engagement with fintechs has facilitated innovations in payment processing and digital banking services. The total income from payment processing fees was $925,000 for the third quarter of 2024.
| Partnership Type | Details | Financial Impact |
|---|---|---|
| Financial Technology Firms | Digital Banking Enhancements | Non-Interest Income: $29.6 million (Q3 2024) |
| Payment Processing | Fees Generated | $925,000 (Q3 2024) |
WesBanco, Inc. (WSBC) - Business Model: Key Activities
Providing commercial and retail banking services
WesBanco operates 192 financial centers, catering to both commercial and retail banking customers. As of September 30, 2024, total deposits amounted to $13.8 billion, reflecting an increase of $668.6 million or 5.1% from December 31, 2023. The composition of total deposits includes:
| Deposit Type | Amount (in thousands) | Change ($ Change) | % Change |
|---|---|---|---|
| Non-interest bearing demand | $3,777,781 | $(184,811) | (4.7%) |
| Interest bearing demand | $3,667,082 | $203,639 | 5.9% |
| Money market | $2,347,444 | $329,731 | 16.3% |
| Savings deposits | $2,381,542 | $(111,712) | (4.5%) |
| Certificates of deposit | $1,663,494 | $431,792 | 35.1% |
These deposit offerings are insured by the FDIC up to $250,000 per account owner, providing a secure banking environment for customers. The increase in deposits is attributed to effective gathering and retention strategies employed by both retail and commercial teams.
Managing investment portfolios
WesBanco's investment portfolio plays a crucial role in its financial strategy, contributing to liquidity and interest income. As of September 30, 2024, total securities were valued at $3.4 billion, with a breakdown of:
| Security Type | Amount (in thousands) | Change ($ Change) | % Change |
|---|---|---|---|
| Available-for-sale securities | $2,228,527 | $(248,209) | (10.0%) |
| Held-to-maturity securities | $1,162,359 | $(110,378) | (9.5%) |
The weighted average yield of the total investment portfolio increased to 2.64% as of September 30, 2024, up from 2.52% at the end of 2023. This growth is primarily due to new investments purchased at higher rates and increased indices tied to variable rate securities.
Offering mortgage and loan services
WesBanco provides a variety of mortgage and loan services, with total portfolio loans reaching $12.5 billion as of September 30, 2024, marking an increase of $0.8 billion or 7.0% since December 31, 2023. The breakdown of loans includes:
| Loan Type | Amount (in thousands) |
|---|---|
| Commercial real estate | $7,206,271 |
| Commercial and industrial | $1,717,369 |
| Residential real estate | $2,519,089 |
| Home equity | $796,594 |
| Consumer loans | $212,107 |
The increase in loans is driven by strong demand in commercial and residential lending sectors. The annualized net loan charge-offs were recorded at 0.05% for the third quarter of 2024, indicating effective credit risk management practices.
WesBanco, Inc. (WSBC) - Business Model: Key Resources
Network of bank branches and ATMs
WesBanco operates a network of 192 financial centers and over 250 ATMs across its service areas, which include West Virginia, Ohio, and Pennsylvania. This extensive network allows WesBanco to provide convenient access to banking services for its customers, facilitating both retail and commercial banking operations.
Experienced management team
The management team at WesBanco is characterized by its extensive experience in the banking sector. As of September 30, 2024, the team has successfully navigated various market conditions, contributing to a net income of $34.7 million for the third quarter and a total of $94.3 million for the first nine months of 2024. The team has also overseen a significant increase in total assets, which grew by 4.5% year-to-date, reaching approximately $27.1 billion.
Strong capital base and liquidity
WesBanco maintains a strong capital position with total shareholders' equity of approximately $2.8 billion as of September 30, 2024, reflecting a 10.6% increase since December 31, 2023. The bank's common equity tier 1 capital ratio stands at 11.89%, well above the regulatory minimum, indicating robust capital adequacy. The liquidity position is supported by total deposits of $13.8 billion, which increased by 5.1% during the first nine months of 2024, and available credit with the Federal Home Loan Bank of approximately $3.6 billion.
| Key Resource | Details |
|---|---|
| Number of Financial Centers | 192 |
| Number of ATMs | 250+ |
| Net Income (Q3 2024) | $34.7 million |
| Total Assets | $27.1 billion |
| Total Shareholders' Equity | $2.8 billion |
| Common Equity Tier 1 Capital Ratio | 11.89% |
| Total Deposits | $13.8 billion |
| Available Credit with FHLB | $3.6 billion |
WesBanco, Inc. (WSBC) - Business Model: Value Propositions
Comprehensive financial solutions for individuals and businesses
WesBanco offers a diverse array of financial products, including personal banking, commercial banking, wealth management, and investment services. As of September 30, 2024, total portfolio loans amounted to $12.5 billion, reflecting a growth of $0.8 billion or 7.0% since December 31, 2023. The bank's retail banking services include checking and savings accounts, credit cards, and personal loans, while commercial banking services encompass business loans, commercial real estate financing, and treasury management solutions.
Personalized customer service
WesBanco prides itself on delivering personalized customer service through its network of 192 financial centers. The bank emphasizes relationship banking, ensuring clients receive tailored solutions to meet their financial needs. This approach is evidenced by the 5.1% increase in total deposits to $13.8 billion as of September 30, 2024. The bank's commitment to customer satisfaction is further reflected in its professional fees, which increased 15.1% in Q3 2024 compared to the previous year, attributed to heightened loan origination fees.
Competitive interest rates on loans and deposits
WesBanco maintains competitive interest rates on both loans and deposits. As of September 30, 2024, the average loan yield was reported at 5.93%, an increase of 47 basis points year-over-year. The cost of interest-bearing deposits rose to 2.85%, reflecting an increase of 84 basis points from the prior year, indicating a responsive adjustment to market conditions. The bank's net interest margin was 2.94% for the first nine months of 2024, showcasing its ability to manage interest income effectively despite rising funding costs.
| Financial Metric | Q3 2024 | Q3 2023 | Change |
|---|---|---|---|
| Total Portfolio Loans | $12.5 billion | $11.7 billion | +$0.8 billion (7.0%) |
| Total Deposits | $13.8 billion | $13.2 billion | +$0.6 billion (5.1%) |
| Average Loan Yield | 5.93% | 5.46% | +47 basis points |
| Cost of Interest-Bearing Deposits | 2.85% | 2.01% | +84 basis points |
| Net Interest Margin | 2.94% | 3.19% | -25 basis points |
WesBanco, Inc. (WSBC) - Business Model: Customer Relationships
Focus on community engagement and trust-building
WesBanco, Inc. actively engages in community initiatives to build trust and strengthen customer relationships. As of September 30, 2024, WesBanco reported total deposits of $13.8 billion, reflecting a 5.1% increase from $13.2 billion at December 31, 2023. This growth is partially attributed to their focus on community-based activities and local sponsorships that enhance brand visibility and customer loyalty.
Additionally, WesBanco participates in the Insured Cash Sweep (ICS®) deposit program, with reciprocal balances totaling $1.2 billion at September 30, 2024, up from $1.0 billion at December 31, 2023. This program allows customers to access higher levels of FDIC insurance while supporting local community banks, further fostering trust within their customer base.
Dedicated customer service teams
WesBanco maintains dedicated customer service teams to enhance customer satisfaction and retention. Their total number of financial centers is 192, providing personalized banking services. This extensive network allows for tailored customer interactions, which are crucial for addressing individual client needs.
In Q3 2024, WesBanco recorded a net income of $34.7 million, with diluted earnings per share of $0.54, indicating stable performance amid competitive pressures. The increase in service charges on deposits by $1.2 million or 18.1% in the same quarter compared to Q3 2023 suggests effective customer engagement strategies that encourage usage of banking services.
| Customer Service Metrics | Q3 2024 | Q3 2023 | % Change |
|---|---|---|---|
| Net Income (in millions) | $34.7 | $34.3 | 1.2% |
| Diluted Earnings per Share | $0.54 | $0.58 | -6.9% |
| Service Charges on Deposits (in millions) | $7.8 | $6.6 | 18.1% |
Digital banking services for convenience
WesBanco has invested in digital banking services to enhance customer convenience. As of September 30, 2024, the bank's digital banking platform facilitates over 1.5 million transactions monthly. This investment in technology has made it easier for customers to manage their finances, contributing to an increase in customer satisfaction and retention rates.
The bank's digital offerings include mobile banking applications and online account management tools, which are critical in attracting younger demographics. WesBanco's digital banking services are part of a broader strategy aimed at improving operational efficiency and customer experience, with an emphasis on providing 24/7 access to banking services.
In summary, WesBanco's commitment to community engagement, dedicated customer service teams, and robust digital banking services positions it well to enhance customer relationships and drive future growth.
WesBanco, Inc. (WSBC) - Business Model: Channels
Physical bank branches and ATMs
WesBanco operates 192 financial centers across its service areas . These branches serve as critical touchpoints for customer interaction, offering a range of banking services including account opening, loan applications, and financial advisory services. As of September 30, 2024, the total deposits in the bank amounted to $13.8 billion, reflecting a 5.1% increase from the previous year . The bank's ATM network complements its branch presence, providing customers with convenient access to cash and banking services outside of regular business hours.
Online banking platform and mobile app
WesBanco has invested significantly in its online banking platform and mobile application, enhancing customer experience and accessibility. The digital banking platform allows customers to perform transactions, check balances, and manage investments from anywhere. As of September 30, 2024, the bank reported an increase in average loans of $1.1 billion or 9.6% year-over-year, driven in part by digital loan application capabilities . The mobile app supports features like mobile deposits and bill payments, catering to the growing preference for digital banking solutions among customers.
Direct marketing and community events
WesBanco employs direct marketing strategies and participates in community events to engage with customers and promote its services. This includes targeted email campaigns, social media outreach, and sponsorship of local events which enhance brand visibility and customer loyalty. The bank's community engagement efforts are reflected in its $29.6 million in non-interest income for the third quarter of 2024, which includes service charges from deposits and fees from various banking services . By actively participating in community activities, WesBanco strengthens its local presence and fosters relationships that can lead to increased business opportunities.
| Channel | Details | Financial Impact |
|---|---|---|
| Physical Bank Branches | 192 financial centers | Total deposits: $13.8 billion (5.1% increase) |
| Online Banking Platform | Enhanced digital services | Average loans increased by $1.1 billion (9.6% increase) |
| Direct Marketing | Targeted campaigns and community events | Non-interest income of $29.6 million |
WesBanco, Inc. (WSBC) - Business Model: Customer Segments
Retail banking customers
WesBanco serves a diverse range of retail banking customers through its 192 financial centers. As of September 30, 2024, total deposits from retail banking customers amounted to approximately $13.84 billion, reflecting an increase of $668.6 million or 5.1% from the previous year. The composition of total deposits includes:
| Deposit Type | Amount (in thousands) | % Change |
|---|---|---|
| Non-interest bearing demand | $3,777,781 | (4.7) |
| Interest bearing demand | $3,667,082 | 5.9 |
| Money market | $2,347,444 | 16.3 |
| Savings deposits | $2,381,542 | (4.5) |
| Certificates of deposit | $1,663,494 | 35.1 |
WesBanco has seen a significant shift in the mix of deposits, with money market accounts increasing, indicating a preference for higher yield accounts among retail customers. The bank's retail banking segment is supported by various account forms and competitive rates, catering to the needs of individual consumers and families.
Small and medium-sized enterprises (SMEs)
WesBanco actively engages with small and medium-sized enterprises (SMEs), providing a wide range of financial products tailored to their needs. As of September 30, 2024, WesBanco reported that average loan balances increased by $1.1 billion or 9.6% compared to the previous year, primarily driven by commercial loan demand. The total portfolio loans were approximately $12.5 billion, with SMEs being a significant contributor to this growth.
The bank offers various services to SMEs, including:
- Business loans
- Lines of credit
- Cash management services
- Merchant services
WesBanco's commitment to SMEs is evidenced by its strategic initiatives to enhance loan production and support for local businesses, which are critical to the economic landscape of the regions it serves.
High net-worth individuals
WesBanco also targets high net-worth individuals through its wealth management services. As of September 30, 2024, total trust assets managed by WesBanco reached $6.1 billion, an increase from $5.0 billion in the previous year, indicating robust growth in this segment. The trust services include:
- Investment management
- Estate planning
- Retirement planning
- Trust administration
Trust fees increased by 12.1% compared to the previous year, reflecting the growth in managed assets and the bank's ability to attract and retain high net-worth clients. This segment is crucial for WesBanco as it provides a steady stream of non-interest income, contributing to overall financial performance.
WesBanco, Inc. (WSBC) - Business Model: Cost Structure
Operational costs of branches and technology infrastructure
WesBanco's operational costs for branches and technology infrastructure are significant components of its overall cost structure. For the three months ended September 30, 2024, the net occupancy expense was $6.2 million, which reflects a slight increase of 1.3% from $6.1 million in the same period in 2023. For the nine months ended September 30, 2024, net occupancy costs totaled $19.2 million, compared to $18.9 million for the same period in 2023.
Additionally, equipment and software expenses increased by 11.2% to $10.2 million for the third quarter of 2024, up from $9.1 million in the same quarter of 2023. For the nine-month period, these costs rose to $30.6 million, compared to $27.0 million for the same period in 2023.
In terms of technology investments, WesBanco has been focusing on upgrading its ATM fleet and enhancing digital banking services, which contributed to the increased equipment and software expenses.
Employee salaries and benefits
Employee salaries and benefits are critical components of WesBanco's cost structure. For the third quarter of 2024, salaries and wages amounted to $44.9 million, a decrease of 1.0% from $45.4 million in the same quarter of 2023. For the nine months ended September 30, 2024, salaries totaled $131.9 million, remaining relatively flat compared to $131.8 million for the same period in 2023.
Employee benefits for the third quarter of 2024 were $11.5 million, down 3.4% from $11.9 million in the previous year. For the nine-month period, benefits expenses decreased to $34.3 million from $35.5 million.
The reduction in salaries and benefits expenses is attributed to efficiency improvements and a decrease in full-time equivalent employees by 6.2% compared to the previous year.
Marketing and advertising expenses
Marketing and advertising expenses are essential for maintaining WesBanco's competitive position. For the third quarter of 2024, marketing expenses were reported at $3.0 million, a decrease of 4.4% from $3.1 million in the same quarter of 2023. Over the nine months, marketing costs totaled $7.2 million, down from $8.2 million in 2023, reflecting a decrease of 11.8%.
The reduction in marketing expenditures indicates a strategic shift in how the company approaches customer acquisition and retention, possibly focusing more on cost-effective digital marketing strategies.
| Cost Category | Q3 2024 (in thousands) | Q3 2023 (in thousands) | Change (%) | 9M 2024 (in thousands) | 9M 2023 (in thousands) | Change (%) |
|---|---|---|---|---|---|---|
| Net Occupancy Expense | $6,226 | $6,146 | 1.3% | $19,158 | $18,921 | 1.3% |
| Equipment and Software | $10,157 | $9,132 | 11.2% | $30,622 | $27,018 | 13.3% |
| Salaries and Wages | $44,890 | $45,351 | (1.0%) | $131,879 | $131,774 | 0.1% |
| Employee Benefits | $11,522 | $11,922 | (3.4%) | $34,284 | $35,492 | (3.4%) |
| Marketing Expenses | $2,977 | $3,115 | (4.4%) | $7,233 | $8,203 | (11.8%) |
WesBanco, Inc. (WSBC) - Business Model: Revenue Streams
Interest income from loans and mortgages
WesBanco's primary revenue stream comes from interest income generated through loans and mortgages. For the third quarter of 2024, the company reported a net interest income of $121.1 million, which is an increase of 2.9% compared to the same quarter in 2023. The average loan balances increased by $1.1 billion, or 9.6%, year-over-year, with a loan yield of 5.93%.
Interest income from loans increased by $30.1 million, or 16.4% for the third quarter of 2024 and $91.9 million, or 17.7% for the first nine months of 2024 compared to the same periods in 2023. The average loans represented 75.1% of average earning assets as of September 30, 2024.
Fees from banking services and investment management
WesBanco also generates revenue through fees associated with banking services and investment management. For the third quarter of 2024, non-interest income totaled $29.6 million, a decrease of 4.1% compared to the previous year. This decline was primarily due to a $4.5 million decrease in net swap fee and valuation income. However, this was offset by a $1.2 million increase in service charges on deposits and a $0.8 million rise in trust fees.
Service charges on deposits increased by 18.1% compared to the third quarter of 2023, reaching $2.6 million. Trust fees rose to $7.5 million, reflecting higher assets under management, which grew from $5.0 billion to $6.1 billion year-over-year.
Income from trust and investment services
The trust and investment services segment contributes significantly to WesBanco's revenue. As of September 30, 2024, total trust assets managed by WesBanco reached $6.1 billion, up from $5.0 billion in the previous year. This growth has led to an increase in trust fees, which accounted for 12.1% of non-interest income in the third quarter of 2024.
Additionally, WesBanco's investment management services have shown an uptick, with assets managed for the WesMark Funds totaling $0.9 billion as of September 30, 2024, compared to $0.8 billion in the same period last year.
| Revenue Source | Q3 2024 Amount (in millions) | Q3 2023 Amount (in millions) | Change (%) |
|---|---|---|---|
| Net Interest Income | $121.1 | $117.7 | +2.9% |
| Service Charges on Deposits | $2.6 | $2.2 | +18.1% |
| Trust Fees | $7.5 | $6.7 | +12.1% |
| Total Non-Interest Income | $29.6 | $30.9 | -4.1% |
Overall, WesBanco's revenue streams are diversified across interest income from loans and mortgages, fees from banking services, and income from trust and investment services, contributing to a robust financial performance in 2024.
Article updated on 8 Nov 2024
Resources:
- WesBanco, Inc. (WSBC) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of WesBanco, Inc. (WSBC)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View WesBanco, Inc. (WSBC)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.