Eager to expand into faster-growing markets, WesBanco Inc. of Wheeling, W.Va., has struck its second deal in four months for an Ohio bank.
The $3.5 billion-asset company said Wednesday that it was buying the $554 million-asset Winton Financial Corp. of Cincinnati and its Winton Savings and Loan Co. for $103 million in cash and stock.
The deal, combined with the pending acquisition of the $400 million-asset Western Ohio Financial Corp. of Springfield, would more than double WesBanco’s deposits and loans in the state and increase its branches there by 13, to 33. (The Western Ohio transaction is expected to close in the fourth quarter and Winton in the first quarter of 2005.)
Buying Winton would move WesBanco into the Cincinnati area, which WesBanco president and chief executive Paul M. Limbert called a “better market” for commercial lending.
It is also more attractive for deposit-gathering. The metropolitan area contains $45 billion of deposits, twice as much as the entire state of West Virginia, according to the Federal Deposit Insurance Corp., and about 200,000 more people than West Virginia.
With limited options in its home state, WesBanco plans to concentrate on expanding in Ohio and the surrounding states, Mr. Limbert said. “Cincinnati has great growth potential into other markets in Ohio, Kentucky, and Indiana.”
The deals would also improve WesBanco’s mortgage lending capability and create opportunities to cross-sell mortgage products to business customers. Both Winton and Western Ohio, the parent of Cornerstone Bank, are thrifts and consequently have the majority of their loans in mortgages.
“The two acquisitions are able to give us a much stronger presence” in mortgages and home equity loans, “and I view this as a positive diversification of our loan balance,” Mr. Limbert said.
Brett Rabatin, an analyst with First Horizon National Corp.’s FTN Midwest Research in Nashville, said that buying Winton would put WesBanco into a good market for a fairly cheap price (2.1 times Winton’s book value).
The deal was not surprising, Mr. Rabatin said, because WesBanco has been focused on growing outside its home state. It will continue to be a buyer of “franchises this size in the Ohio Valley” and is also interested in Pennsylvania, he said.
