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Small-Cap Stocks to Buy: WesBanco Inc (WSBC)

Small-Cap Stocks to Buy: WesBanco Inc (WSBC)WesBanco Inc (NASDAQ:WSBC) is a regional community bank across West Virginia, Ohio, western Pennsylvania, Kentucky and southern Indiana, managing just shy of $10 billion assets as of Q2 2017.

It leans conservative with stringent credit requirements and underwriting standards, which I like in a bank growing at its speed. Sacrificing loan quality for growth is a surefire way to run into trouble in the future. But that’s not a concern with WSBC, where non-performing assets to total assets consistently ranks below their peers. For the last full fiscal year, WesBanco clocked in at 0.49% vs. peers of 0.61%, and in Q1 2017 they did 0.56% vs. peers of 0.60%.

CEO, Todd Clossin, joined the firm in 2014. Under his supervision, WSBC made two significant acquisitions: ESB Financial (Pittsburgh) and Your Community Bankshares (Indiana and Kentucky), increasing the asset base by 60%. Also under Under Clossin, non-interest income generation is on the rise, now representing $3.8 billion in AUM, including just under $1 billion in the WesMark Funds. There is still lots of room to grow this business.

WesBanco’s loan portfolio is well-diversified with residential real estate at 22%, commercial and industrial at 17% (organic 5-year CAGR of 12%!) and commercial real estate making up the largest portion at 38%. There is minimal exposure to the oil and gas industries.

Revenue and cost synergies from acquisitions have worked well for WSBC, and it continues to look selectively at expanding the franchise via accretive transactions. Organic and inorganic growth are strong.

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