Todd Clossin - President & CEO Robert Young - EVP & CFO.

Scott Valentin - FBR & Company Catherine Mealor - KBW John Moran - Macquarie William Wallace - Raymond James.

Good morning and welcome to WesBanco's Conference Call. My name is Chad and I will be your conference facilitator today. (Operator Instructions).

Forward-looking statements in this presentation 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 herein should be read in conjunction with WesBanco’s 2013 Annual Report on Form 10-K and other reports which are available on the SEC’s website www.sec.gov or at WesBanco’s website www.wesbanco.com.

Investors are cautioned that forward-looking statements, which are not historical fact, involve risks and uncertainties including those detailed in WesBanco’s 2013 Annual Report on Form 10-K filed with the SEC under the section 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 any forward-looking statements. WesBanco’s third quarter 2014 earnings release was issued yesterday and is available at www.wesbanco.com.

This call will include about 25 to 30 minutes of prepared commentary followed by a question-and-answer period which I will facilitate. An archived webcast of this call will be available at wesbanco.com.

WesBanco’s participants in today’s call will be Todd Clossin, President and Chief Executive Officer and Robert H Young, EVP and Chief Financial Officer and both will be available for questions following opening statements. Mr. Clossin, you may begin your conference..

Thank you, Chad. Good morning and thank you for participating in WesBanco's Third Quarter 2014 Earnings Call. We're pleased you've joined us this morning to hear about our strong operating results. I'll be making some opening comments. Bob Young, our CFO will provide some financial highlights and I will moderate the Q&A period at the end.

A press release detailing the results for our third quarter was issued last evening. A copy of the entire press release is available on our website. We will assume all participants are familiar with WesBanco and we can begin our discussion of the third quarter financial results. WesBanco had a very solid third quarter.

Our net income was 18.2 million for the quarter, as compared to 15.5 million for the same quarter in 2013. This represents a net income increase of 17%. On a year-to-date basis we generated 53.5 million in net income as compared to 48.6 million during the same period last year. This represents a year-to-date earnings increase of just over 10%.

These strong double-digit earnings gains have enabled us to achieve a return on average assets of 1.15% through the first nine months of this year, as compared to 1.07% for the first nine months of 2013.

We delivered earnings per share of $0.62 for the quarter, which represents an increase of $0.09 a share, or 17% earnings per share growth as compared to the third quarter of last year.

Our increased earnings are the result of solid loan growth, coupled with disciplined expense management, continued reduction in the cost of funds and improved credit quality. Our net interest income has increased during each of the past five quarters.

The growth in net interest incomings even more impressive when considering that our non-interest expense has decreased on both a quarter and a year-to-date basis. This focus on driving positive operating leverage has led to our double duties earnings growth on both a quarter and year-to-date basis.

A point I'd like to highlight is that these strong earnings gains were achieved while including the negative impact within the quarter of 1.4 million in structuring charges associated with selling higher priced repurchase agreements. The earnings benefits of selling these securities will be reflected in future years.

We have shown solid growth in assets over the past 12 months, with portfolio loans growing 5.1% over the last year and 2.2% over the prior quarter. Loan originations are 1.4 billion over the last 12 months.

We continue to focus on diversifying our loan originations as shown by the achievement of double digit loan growth in our C&I business and our home equity loan portfolios over the past year.

Our commercial real estate construction portfolio continues to perform well and we have been successfully replacing loans refinanced into the permanent market with new construction production. Deposits, excluding CDs have increased 321 million or 9.4% over the past year with all deposit categories excluding CDs increasing.

Lower cost core deposits continue to flow into the bank resulting from our marketing and calling efforts. We continue to see strong deposit growth from our Marcellus and Utica shale initiatives with approximately $247 million of deposits coming in over the past 12 months from those initiatives.

We continue to take advantage of the balance sheet liquidity, the share related deposits we’re providing and we continue to use those deposits to reduce our higher rate borrowings. I frequently refer to WesBanco as being one of the best positioned banks in the country to take advantage of the growth in the U.S. natural gas industry.

Having 71% of our footprint in shale-related areas gives us a geographic advantage that is reflected in our numbers. Shale activity spurs WesBanco growth was a recent headline in the West Virginia journal.

The synergistic benefits of having this more localized, shale specific funding advantage located inside of our three state commercial banking franchise presents an exciting future growth possibilities for our company. I believe we’re truly in a unique situation.

We are focused upon executing against this play and then driving our associated deposit, loan and fee income growth strategies. Net interest income increased a strong 5.4% for the quarter as compared to the same quarter last year.

I'll let Bob speak to the margin in a few minutes but I will say that our disciplined approach to both asset and liability pricing is showing productive results. Non-interest income decreased a $0.5 million or 2.7% as compared to the third quarter of 2013.

But excluding the previously mentioned repurchase agreement sale, non-interest income would have been up $1 million or 5.6% for the quarter as compared to the same quarter in 2013. Expenses continue to be very well managed with non-interest expense down 700,000 or 1.9% for the third quarter as compared to the same period last year.

As I mentioned previously, driving positive operating leverage is a key focus area for our bank. Credit quality continued to improve. Charge-offs stood at just 22 basis points, average portfolio loans for the quarter and 24 basis points year-to-date with both criticized and classified loans continuing to decrease to more normalized levels.

Over the past 12 months, criticized and classified loans have decreased by 38%. Overall, I feel very good about the third quarter performance of the bank.

Our eight market presence have each completed a SWAT analysis of their respective markets and we are allocating resources and capital to the market and product areas that will create the greatest long term shareholder value for the company.

We compare and evaluate new initiatives against an internal rate of return hurdle, and we relentlessly focus upon the execution against those selected initiatives. During the quarter we created a management committee that includes our local market presidents and the heads of each of our staff function areas.

This committee is focused upon increasing communication and joint accountability around both our initiatives and the results of those initiatives. I couldn't be more pleased with the leadership that I've inherited and I feel that we have a solid and scalable platform and team from which to operate going forward.

We continue to be interested in opportunistic mergers that add value to our franchise, but we also remain focused upon our organic growth opportunities.

I would now like Bob Young, our CFO, to discuss with you in more detail the financial results of the quarter, Bob?.

Thank you, Todd. I'm glad to be back this quarter. Unfortunately for health reasons had to miss last quarter's conference call and for those of you who called me afterwards wondering where I was, I'm alive and well and here today. So as Todd mentioned, per share earnings were up 17% over the third quarter of 2013, 10.2% year-to-date.

Our return on average assets improved 8 basis points over last year's nine-month ratio and return on tangible common equity was about the same at 16%, while the efficiency ratio dropped from 16.8% last year to 59.3% under that important 60% marker.

Peer group data from the second quarter which is what's available at this point indicates our ratios exceed most of the comparable figures of 1.06% and 12.2% return on average assets and return on tangible common equity and those compared to our 1.14% and 15.6% here in the third quarter.

While the peer efficiency ratio was 63.1%, that's about a 400 basis points difference. Pretax pre-provision return on average assets was 1.75% for the third quarter versus 1.63% last year.

Turning to the balance sheet and interest income, factors influencing the 2.5 million or 5.4% growth in net interest income from last year's third quarter include 3.6% higher average earning assets fueled by 4.4% growth in average loans and lower interest expense with our cost of funds dropping from 73 bps to 51 basis points.

The third quarter net interest margin also grew from last year's 3.52% to 3.58% and on a core basis excluding acquisition related and certain other adjustments, it grew 7 basis points.

On a year-to-date basis, net interest income increased 6 million or 4.3% from last year, while the margin improved four basis points to 3.62% or 10 basis points on a core basis excluding those prior mentioned adjustments. Earning assets grew 3.2% led by a 4.7% average loan increase and cost of funds decreasing from 77 bps to 53 bps.

Portfolio loans increased a 195 million in the 12 months ended September 30th as originations continued to outpace pay downs. WesBanco grew total period and outstanding loans from September 30th of last year, some 5.1% as a result of the aforementioned 1.4 billion in loan originations over the last years.

These loan originations in the third quarter for instance increased almost 50% over the first quarter, which was affected by the weather and an economic related slowdown.

Loan growth was driven by increased business activity and markets impacted by the shale gas drilling that Todd mentioned, additional lending personnel, focused marketing efforts and expanded presence in our larger urban markets and a continued improvement in our loan origination processes.

Since the end of last year, commercial real estate land and construction loans decreased 10.6% as several completed projects were transferred to commercial real estate improved property, while commercial real estate in total increased 5.4% due both to the migration of these construction loans as well as new loan originations.

C&I loans increased 8.5% due to focused business development efforts and an increase in the usage of lines of credit. Residential real estate loans increased 2.1% as mortgage originations in the third quarter of 2014 increased some 33% over late last year which was in the fourth quarter -- the first quarter after the re-fi boom last year ended.

Home equity lines of credit increased 10.2% due to new loan campaigns and increased usage; while consumer loans decreased 7.3% due to reduced emphasis on indirect auto and recreational vehicle lending.

The average rate paid on interest-bearing liabilities decreased 22 bps in the third quarter and 24 bps for the first nine months compared to the same periods last year. Rates paid on interest-bearing deposits declined to 41 bps in the third quarter due to a significant decline of rates paid on new and renewed certificates of deposit.

These rates declined by 43 basis points from the third quarter of last year while the rates paid on other deposit types remained relatively unchanged. Improvements in the deposit funding mix also lowered the cost of funds with average CDs decreasing to just 27% of total average deposits from 32.5% last year.

Average interest-bearing deposits were unchanged, while average non-interest-bearing demand deposits increased some 130 million from the 2013 third quarter. Average CDs decreased 14.5% from last year, the only deposit category to decrease, as WesBanco continues to focus on reducing CD costs and growing customers with multiple banking relationships.

Other short term borrowings decreased 33 million from December 31, and included in this decrease were certain higher rate repurchase agreements totaling 22 million that management elected to prepay this quarter, resulting in a $1.4 million prepayment charge. A portion of this charge was offset by security gains taken during the quarter.

On non-interest income, it decreased a 0.5 million or 2.7% compared to the third quarter of 2013. Excluding the $1.4 million prepayment charge, non-interest income increased 1 million or 5.6%, coming from increased trust fees, securities brokerage revenue and net security gains while service charges on deposits and gains on sale of loans decreased.

For the first nine months, non-interest income decreased 0.7% for similar reasons. Again, excluding the $1.4 million charge related to the prepayment, non-interest income would have increased 2%.

So more detail on those categories, trust fees increased 5% compared to the third quarter of 2013 and 8.6% compared to the first nine months as assets under management continued to increase from customer development initiatives and overall market improvements.

Service charges decreased 9% for the first nine months this year due to lower overdraft fees that are affected by lower customer usage patterns and higher average deposits per account.

Electronic banking fees which include debit card interchange fees continue to grow, increasing some 4% for the first nine months due to a higher volume of debit card transactions that are continuing to grow due to our own marketing initiatives and as customers have moved more towards electronic transactions.

Net securities break ranking revenue increased 19% from the first nine months of 2013, due to improved production from existing markets, additional sales in the Pittsburgh market, the addition of support and producing staff in several regions as well as an increase in referrals and production from our licensed retail banking program -- retail banker program.

Net gains on sales of mortgage loans decreased 45% compared to the first nine months of 2013 as increasing interest rates reduced refinancings resulting in lower overall mortgage activity. Mortgage production was 200 million for the first nine months, down some 40% from the comparable 2013 period.

We sold about 77 million in the secondary market, year-to-date or about 39% of our total production and that compares to 108 million last year or 33%. The ratio of purchase money versus refinance is currently running about 70/30 and last year refinances comprised almost half of our first nine months production.

Mortgage activity has been impacted by the Qualified Mortgage and Ability-to-Repay rules, which have somewhat limited the bank's competitive product offerings. Turning to non-interest expense now, it decreased 700,000 or 2% in the third quarter and 600,000 or 0.5% year-to-date compared to last year.

Excluding the merger related expenses of 1.3 million, mostly incurred in last year's first quarter, total non-interest expense would have increased 700,000 or 0.6% for the first nine months.

Salaries and wages increased 0.9 million from the third quarter of 2013 and 2.6 million year-to-date due to routine annual adjustments to compensation, increased brokerage, revenue commissions and a higher incentive and stock-based compensation.

Employee benefit expenses decreased 6.8%, primarily from decreased pension expense and other benefits, partially offset by higher healthcare.

Net occupancy and equipment expense increased 5.7% over the first nine months of last year, due to increased depreciation and other maintenance costs resulting from the opening of two branches late in the fourth quarter and early in the first quarter of this year.

As well as significant upgrades to our data processing and communications infrastructure, including a new mainframe, new disaster recovery site, improved mobile banking capabilities and new branch-related equipment placed into service late last year.

Marketing expense remained flat compared to the first nine months of 2013, but it did decrease some 300,000 over the third quarter due to campaign timing. FDIC insurance is also down, some 9.4% year-to-date due to a lower assessment rate from improved financial ratios.

OREO and foreclosure expenses decreased 800,000 this year compared to 2013 due to lower foreclosure and liquidation activity.

Communications expense decreased some 52% from the third quarter of last year and 42% for the first nine months due to the implementation of a company-wide modernization of the internal communication and personal computer infrastructure.

Turning to credit quality, the allowance for loan losses decreased 2.3 million from December 31 to September 30th, as a result of a lower provision expense and net charge-offs and the allowance is now 1.12% of total portfolio loans.

The decrease in the allowance is supported by reductions in nearly all categories of loans with adverse characteristics and continued improvement in economic conditions. Net charge-offs for the third quarter were 2.2 million or 22 basis points, our total portfolio loans compared to 5.8 million or 60 basis points for the third quarter of last year.

Year-to-date net charge-offs were 6.9 million or 24 basis points compared to a 11.3 million or 40 basis points for the same period last year. Non-performing loans consisting of non-accruals and TDR's decreased 2.5 million or 4.9% from December 31. Criticized and classified loans decreased 35.4% to 88 million or 2.17% of total loans.

This is primarily the result of an improvement in credit quality. Shareholders equity now, turning to that area, improved to 789 million it's about 7.1% ahead of last year at this time and 5.7% from year-end. Our Tier 1 leverage ratio at quarter end was 9.7%, Tier 1 risk base 13.5 and total risk-base at 14.6.

Tangible equity improved to 7.91%, up from 7.19% last year and 7.35% at year-end continuing our strong core tangible equity growth. These growing equity ratios allowed the Board to increase our quarterly dividend rate to $0.22 per share as of April 1st, representing a 10% increase over the prior rate.

We will continue to look for ways to enhance returns to shareholders through a combination of dividend increases, organic growth and select opportunistic market based acquisitions.

In some, we’re pleased with our overall performance in the third quarter and year-to-date as loan production and outstandings increased nicely, net interest income in the margin improved over last year and total expenses were below 40 million for the quarter, producing a core efficiency ratio below 60%.

The quarterly loan loss provision has moderated at a lower level due to continued improvements in credit quality.

These factors have positively influenced core profitability as well as earnings per share growth and we are looking forward to our continued growth prospects as our loan pipelines, wealth management businesses and retail businesses continue to improve over the remainder of the year.

This does conclude our prepared commentary and we'll now open the call for questions. Todd is going to moderate the Q&A session and we'll turn the call back to the facilitator. Thank you..

(Operator Instructions) Our first question comes today from Scott Valentin with FBR & Company..

Could you just -- I've got a lot of questions with the decline in oil prices and impact on shale.

I'm just wondering maybe a bunch of questions around shale and exposure to shale but one just direct exposure to companies that are involved in shale, I think you guys in the past maybe not lend to the biggest companies but you do lend to a lot of the support companies such as the sand [ph] providers (indiscernible) etcetera and then any shift in your approach to lending to those companies as a result of the low price of oil and gas?.

We look at the secondary and tertiary providers in the oil and gas industry.

We don't lend to the real large multinational type companies, but the secondary and tertiary there is a fair amount of lending activity that we’re seeing there and we have seen it expand over the last 12 to 18 months, these are the welders, the pipefitters, the building, the infrastructure and we've seen that and been able to take advantage of some of the lending growth because of our market share in that area.

It continues to be strong, I mean we do watch what's going on with natural gas prices, what's going on with oil prices, but we can continue to believe this is going to be a very, very strong play even if oil prices continued to fall..

Okay. And then in terms of -- you mentioned loan growth in quarter accelerated, the first quarter of the year was weather impacted, but is that a reflection of macro, meaning like you mentioned the shale and other activity, is that a reflect shouldn't of improving macro activity or is that do you think taking market share from other lenders..

I think it's both. Clearly we've seen the same kind of rebound in the second quarter as I think the industry did because the first quarter -- part of the country was so tough weather-wise.

We saw that bounce back in the second quarter but we saw that strength continue into the third quarter and our pipelines remained strong going into the fourth quarter as well, too. So I think part of that is just the natural rebound, slow growth in the economy.

But I also think we've been able to execute well, particularly on the lending side with increasing our lending staff in some of the key markets and the initiatives we talked about before in markets like Pittsburgh, Columbus and Cincinnati where we're beefing up our lending teams and we're seeing the results of that in the double digit growth in C&I, we’re also seeing that in a renewed focus in growth in the home equity portfolio with double-digit growth there as well too.

So I think a lot of it has to do with our own initiatives focused on organic growth..

Okay, and one final question. Mortgage banking activity, we've had 10 years come down quite an about it recently, just wondering if you're seeing any early signs of maybe an increased pace of mortgage banking activity for the fourth quarter..

I just actually spoke to the mortgage group and had dinner with them last night and we talked about just that topic. Looking at where the 10 year I think they opened at around 2.2 this morning.

Just looking at where the 10 year goes, we kind of thought re-fi activity was done but if it goes much farther you could start to see re-fi activity start to position itself again.

We build our back room to be able to be flexible and expand and take advantage of the growth in purchase activity as we expand our footprint but also if the re-fi market were to come back to some extent, we're positioned well to handle that growth in quick turnaround times and keep the customer service level up..

Our next question comes from Catherine Mealor with KBW..

Todd, you may have mentioned this in your opening remarks I missed the begin part, please forgive me if you went on about this but I wanted to ask about how you mentioned in your press release that you increased your lending staff recently.

Can you just talk about maybe the markets where you've had more of a focus and where you've added more lenders and maybe what product types you're specifically bringing lenders on to focus on C&I, CRE, I know you talked about the home equity product.

Can you just give us a little bit more detail in terms of the staff you've brought on that's driven the higher loan growth? Thanks..

We have a very strong and experienced CRE team, it's been here a long time and it continues to be very productive for us -- but we have brought additional renders on. Without getting into specifically which markets, I will tell you will they were in our larger urban markets where the focus was.

I hired a few individuals from KeyBanc, I worked with 13 - 14 years ago, that was a place I was at earlier in my career, people I knew had good experience with. These are very senior lenders, people that actually helped train me that came into the organization and they've been very productive at bringing business in.

We also hired talent from GE, hired talent from P&C, hired talent from Huntington, all in the C&I space in the last six months or so. So we're seeing some real nice momentum on the C&I space.

I think our story is getting that as well in terms of going from a large Community Bank into a small regional player and focus on product and how we approach the businesses and I think that's appealing that we're small enough, you can still be an entrepreneur inside the company and still makes decisions, still move things forward but we're large enough that where we can provide about any product to service in any of the larger markets to C&I customers..

In terms of markets, we have seen a strongest growth this year in terms of production in the Columbus and believe it or not North Central, West Virginia, the Morgantown market has been very strong for us and Pittsburg, it was from Pennsylvania starting to kick-in.

We had a very good year in 2013, little bit slower to start there in '14 but have seen some very good closings lately and are expecting from their pipeline some significant closings in the fourth quarter. .

And can you give us an outlook for your margin? It was down a little bit this quarter but you had the strong growth you had nice spread income growth.

Do you still see margin pressure over the next couple of quarters?.

Todd Clossin:.

We do continue to see cost of funds reductions. We were down two basis points this quarter in interest bearing deposits over the second quarter that helped us, those CDs continue to reprice. We have about 800 million of CDs that are going to reprice over the course of the next year, some 91 basis points.

They should come down into the mid '70s or so, we would think. That should help. So we still do have some of that protection.

And I would remark on the second quarter, remember that we had an IRS tax refund and interest earned on that was worth about 3 basis points to the second -- the margin in the second quarter so the Delta between that adjustment and the third quarter is only three basis points..

Our next question comes from John Moran with Macquarie..

Just a quick question on OpEx, obviously a good story for you guys year-to-date and in the quarter. The efficiency ratio announced sub-60%, so congrats on that.

Just kind of looking at it, do you think that we're sustainable here at sub-60 or do you anticipate that you can chip away even a little bit more at that and then kind of specifically on the comp line, looking back to last year, it looks like there was -- and normal sort of work, seasonal noise would you expect some of that to happen again in 4Q or was part of the elevated salaries and wages kind of a catch-up true-up, it sounds like it may have been based on the prepared remarks.

Thanks..

I think the salary and wage increases that you've seen this year are pretty consistent with what we're probably be looking at in the future as we grow and expand but we're also looking at reallocating resources.

It's one of the things that I and the management team are doing is reallocating resources from lower productive to hire productive sources, the geographies and lines of business. We are being very disciplined about how we're approaching the businesses.

We've got business lines that aren't generating the right return on equity for us, we're going to start to move away from those and into others that generate higher returns. So that will moderate some of the salary expense growth associated with building out some of the key areas that we want to build out.

A big part of our expense decrease this year as well too was the telecommunication expense decrease and that's not a onetime thing. I mean that's a way of approaching telecommunication expense that's going to be lower for the infinite future going forward for us. OREO expenses were also down which we think will continue to stay down.

There are things that brought expenses down I don’t think were onetime, one quarter type of events, they were things that should be more permanent in nature. We are looking at continuing investment in infrastructure, the way we always have been.

We are getting to be a large organization so there are things that we continue to do from an investment standpoint, but I'm always looking forward to one operating leverage, so as new initiatives are brought to me -- I want to see $2 of revenues or $2 expense saves for every dollar of cost that goes out from that and that's a discipline that we want to continue to maintain.

So we'll see where that shakes out from the revenue growth perspective and continuing to hold expenses or drop expenses and keeping that ratio in-line with where we're at today. We like being in the 50s. It's a great place to be..

Just quickly, John, on the question about the fourth quarter salary line item last year, there was about $400,000 extra accrual last year's fourth quarter for incentive compensation true up kinds of adjustments as a result of the year we had last year.

We've been accruing more of that on an ongoing basis this year expecting similar levels of incentive comp. So I don't at this point expect a similar push to that line item in the fourth quarter..

So we'd be looking -- it sounds like there is some kinds of puts and takes there, but thinking about kind of a core run-rate OpEx in the high 39, 40ish kind of level going forward is the right way to be tug thinking about it, so that's great.

The other one that I had, just Todd circling back on the comments on M&A preference it sounds like it's probably a little bit more balanced today with an organic opportunity versus maybe where it was 12 months ago.

But maybe if you could talk about, you know, are you seeing increased kind of chatter or reverse inquiry? Are there things that you guys are kind of considering and if so would that be -- I'm assuming probably more in the in your kind of urban markets. Thanks..

You know, in the 12 months, I've been here almost 12 months now and I've just seen a steady flow of opportunities over that entire time period so it's kind of hard for you to equate it before that, but there is a lot of activity, there is a lot of chatter in the marketplace and we and others get lots of opportunities to look at things.

What I was really committed to and you kind of said it is, I really wanted to focus on the organic growth and as I felt that that was going to be the true test in banking, everybody's taking advantage of deposit costs coming down, everybody's taking advantage of loan loss improving over the last 4 - 5 years. Those plays are about done.

Now it gets down to real banking. Who can show the organic growth, who can roll up their sleeps and grit it out and show growth in market share against want the community banks and the big banks. I love that. That's what it enjoy doing. That's what I wanted to prove and I think we’re proving that with the organic growth that we're getting.

That also then allows us to be more disciplined and continue to be disciplined on the M&A side. So we don't need to do a deal to do a deal. We will do a deal that makes sense for the organization and for the shareholders. So as you've said before that includes in market deals. We'd like to be bigger in the markets that we're in.

You look at S curve Analysis, it also shows you generate more profitability by having a larger market share in a particular market so we're focused on that. But we're also open to opportunities in markets contingent to the markets we're in today that would be more urban related.

So we look at both of those from an M&A standpoint but we want to be able to keep both strong and the term I use around here with folks it's an and world and not an or world. We don’t this or this we do this and this.

So we’re going to focus on organic growth and we're going to look at M&A opportunities that make sense for us, but being in the position where we know we can have a good next couple of years with organic growth, puts us in a position where we don't have to do something.

Unless it really makes sense for us and I want to make sure we stay in that position..

(Operator Instructions). Our next question comes from William Wallace with Raymond James..

Todd, looking at the loan growth would you characterize the third quarter as having some bounce back impact from the weather impacts from the first half or as representative of perhaps a new normal which could be high single digit annual grower or might be even low double digit?.

My color on that would be the majority of the bounce back was in the second quarter. The third quarter, those were new opportunities, a lot of new opportunities that we were looking at, you know, pure new loan production. They really got us back to levels that we have seen prior to the first quarter as well.

So I would feel good about the third quarter production level going forward. That's what we want to be able to see, is that kind of production, but I don't think there was much from the weather related issues that were showing up in the third quarter from my perspective..

Okay and then will there be -- you're showing some -- you mentioned this focus on some home equity, you're seeing good growth in C&I, presumably more production on variable rate or equal production on variable rate loans that perhaps are lower yielding.

Are we going to go see a NIM impact from any shift in the loan mix itself or was it clear on your commentary, Bob or do you think the ability to improve the earning asset mix more towards the loan portfolio itself will drive flattish core margin?.

When you look at the commercial real estate, for example, we're seeing in a lot of markets, particularly in the construction side, that's a very competitive business, not that C&I isn't. It is. But you're seeing spreads come down in that area.

We tend to be pretty disciplined -- we've seen a lot of opportunities below 200 basis points spread on the construction side that we passed on. We haven't done those. We've been able to stay disciplined and show growth as a result of that. The C&I play, what we like about that is, I think that's very strong in the relationship standpoint.

You hire good C&I lenders, there's relationships that will follow them. They'll be able to go out and prove that it's not transaction oriented it's more relationship oriented.

You also get a (indiscernible) because you’re picking up the treasury management services, you’re picking up a lot of other services, private banking services things like that with a C&I relationship and I like to look at this annuity business that as you bring in more C&I relationships, (indiscernible) tend to expand their borrowings overtime versus construction which is more of a transaction oriented.

I like the construction business because you get nice fees, the spread is thin but you get the nice fees and it's short term so your ROE is up in the high teens. It's a great ROE business but it does play havoc with your loan outstanding from a quarter-to-quarter basis.

C&I is a much more consistent type of business but I will we will show greater spreads particularly in the business banking and in smaller end of C&I we'll show a greater spread than you'll see in commercial real estate construction or in the larger C&I, the syndicated type of transactions where you're just one participant in a deal and if you're not the agent, you're not getting the fee, you're just kind of along for the ride.

That business is pretty thin margin. But where we play companies in the business banking small business and lower to mid-sized C&I, I think that's a real fertile territory if you've got the really talent on Board that can bring the relationships in.

So I think that from my perspective, the spread ought to continue to be strong in that business, and then on the consumers side, retail side as well too, the home equity business is variable rate and what I do like about that is, it gives us the flexibility then to be able to keep those on our balance sheet and sell off other things that might be more fixed rate oriented from an asset/liability management standpoint over time as we look into the future and estimate what we think rates are going to do.

It gives us more flexibility to liquefy parts of the balance sheet..

Just a one comment on mix shifts within the loan portfolio itself playing off of what Todd said, that home equity line is one that's growing nicely for us.

High single-digit, low double-digitted growth is what we're expecting from our current marketing initiatives and a redo of that product over this year that Todd talked about, I believe back in the April or July conference call.

But if you take a look at the rates earned on indirect automobile lending or on direct consumer lending versus the home equity line there is a little bit of a rate adjustment between those two lines on our balance sheet.

So there is a little bit of that mix shift going on but as Todd said, we like the variability the variable rate structure of the home equity and the growth opportunities and we think that's a better place for us to play from a return on equity perspective than in the consumer space particularly in direct automobile..

Okay so, I'm going to attempt to be a little bit more direct and ask this question.

Do you think that there's going to be pressure on core NIM?.

Well, I think what -- on the loan side, I think the whole industry is facing that.

I think the key is how do you counteract that and with $800 million in CDs out there that are repricing with the low cost deposits that are coming in from the shale related deposit activity, we've got a story to tell on the deposit side of the net interest spread as well.

So we're focused on that piece, which I think could be a real key differentiate or for WesBanco, albeit the rest of the industry for reasons I just mentioned. On the loan side, you're just going to have to continue to slug it out and see where rates go..

Certainly the cancellation of those repos in the month of September was for us a way of saying we want to get rid of these high cost borrowings going forward.

That's worth a couple basis points in the margin in 2015 and a couple pennies in earnings per share and that was something that we wanted to do to get rid of sort of our last tranche of expensive borrowings that we still were accounting for. So the opportunities are out there.

We do need to see as the industry does, a shift on the loan to government side or loan to asset, see a greater mix there. We have printed of liquidity and have plenty of opportunity to see that growth and are adding the lenders to get that growth.

So I think that will, for the most part, Wally, that plus the CD cost continuing to reduce on the liability side should help to provide offsetting factors to the natural margin compression that's occurring in the industry right now..

And as Bob mentioned earlier on the call, just trading from the lower -- some of the lower priced securities into the loans as the loan portfolio grows is an advantage we can play too, because of our loan to deposit ratio, because we're set up in structure, because of our large investment portfolio, we'll continue to have the opportunity to mine that portfolio for opportunities to shift into the lending side and improve margin that way too which is a little bit unique for us..

Okay. And then my last question would just be a little bit of a follow-up from one of Scott's first questions.

As it relates to what we're seeing with oil prices, is there a level where you guys get nervous that the oil and gas companies might take their feet off the pedal and dial back some of their drilling activity, et cetera?.

You know, I haven't put a pencil to what that number is, but just to tell you, we talk and spent an awful lot of time talking to not just the secondary and tertiary but even some of the larger players to get an idea of what's going on with rates and this is a long term 10, 20, 30, 40 year play, so regardless of what happens in the short term, over the next quarter, two quarters or year or two this is a long-term play.

I mean this is the largest natural resource in a generation that's located under our feet. It's going to get mined. It's going to be productive for our banks. It's going to be productive for the marketplace.

It's hard to tell, I can't predict what oils prices are going to do or gas prices are going to do or what's going to happen in Europe or what's going to happen in Russia related to that over the next quarter or two, let alone the next week or two but having to say I think on a long term basis, this play is definitely here.

It's real and we'll be able to take advantage of that..

Wally, there's been about $2 billion to $3 billion worth of infrastructure improvements, industrial infrastructure in support of the gas industry here locally over the past two years, two to three years, that continues.

Additional fractionation facilities coming online, new facilities in Eastern Ohio to address getting the Utica from the gathering lines into the interstate gas lines. There are new interstate gas pipelines being built as we speak to the East Coast, two new once were proposed over the last quarter, one of which I think is a dominion line.

Both of those are coming out of West Virginia. So there is still a lot of investment locally from an infrastructure structure, still drilling going on.

We had I think, one of the country's most productive wells go online here in eastern Ohio over the last quarter, producing I think in excess of 40 million cubic feet of gas in the first month of its production or on a per-day basis. So I think you're going to continue to see that.

I would also point out that even with gas dropping Wally, keep in mind this is a wet gas area.

So in addition to the dry methane gas that's going in to the pipelines that may be $1.50 to $2 an mcf with a market of $3 or 3.50, you're also getting the propane's and the butanes and the ethane's coming out of those wells that are serving as feedstock for various plants in the United States and thus the drillers are getting more revenue per well than just the value of dry methane going into the pipeline..

One other thing I would just add, just a last comment on that, a lot of these short term leases that are out there require drilling to take place to protect the leasehold interests. So these gas companies can't come in and put a lease in place and not drill, they have to.

So it's just a matter of them doing that and continuing to mine that the revenue coming out of that. So there are some protections in there as well..

Our next question is a follow-up from Scott Valentin with FBR & Company..

I missed this but on the level of loan allowances, I know its comes down and that reflects the improvement in credit quality NPLs and NPAs has come down as well, would we expect to continue to that level of loan losses -- sorry, level of allowance for loan losses? Should that continue to decline as NPLs and NPAs decline or is there a level where you can -- the model points that that's kind of the bottom in terms of reserve coverage?.

I think we're in a more normalized range now. It's going to continue to moderate a little bit, up a little bit, a little bit down, quarter-to-quarter but I think we're back to a more normalized range.

Clearly what you've seen over the last 2 to 3 years, the expectation wouldn't be that that would continue over the next couple of years in terms of that rate of decrease. We think we're at a more normalized level now. And I think that's reflective of what we're seeing in our portfolio too..

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

Great. I would like to thank everybody for their time this morning, I really appreciate it and I look forward to talking to you next quarter. Have a great week..

Thank you very much. The conference is now concluded. Thank you for attending. You may now disconnect..