Monday, April 23, 2018

Sort of off topic, but not really: Bank consolidation and mergers

(If you work in the river industry and have no interest in trends in banking, read this anyway. You might see some things your industry has in common with banking.).

TodayOn April 19, WesBanco Inc., a large regional bank based in Wheeling, W.Va., announced it had reached an agreement to acquire Farmers Bank Capital Corp. of Frankfort, Ky., in a stock and cash deal valued at about $378.2 million.

Once completed in the third quarter of this year, the acquisition will give WesBanco an additional 34 banking locations in 21 communities in Kentucky and in Cincinnati. WesBanco will have a larger footprint in Northern Kentucky, Louisville, Lexington and Elizabethtown.

A few weeks ago, WesBanco completed its acquisition of First Sentry Bank of Huntington, W.Va. That closed a gap in WesBanco's coverage area that stretched from Wheeling down to Charleston in West Virginia and across Ohio through the Columbus market to Dayton and Cincinnati.

WesBanco has about $10.24 billion in assets, making it the largest bank based in West Virginia. The largest banking company based in West Virginia is United Bankshares, which operates Virginia-based United Bank. The Farmers acquisition will increase WesBanco's assets to about $11.9 billion.

As with other industries, the banking industry in this part of the U.S.A. is consolidating. Mid-sized banks are finding it hard to compete against the regionals and superregionals. The thing about WesBanco is that it has expanded through acquisitions in the Ohio Valley, where most other West Virginia-based banks that have been aggressive in merger-and-acquisition (M&A) activity have bought up banks in northern Virginia. You know, where the money is.

However, WesBanco has set its sights on commercial lending activity in a region that includes the Ohio Valley. The company crossed the $10 billion threshold in assets several months ago. It had held back as long as it could to keep from triggering certain paperwork provisions of Dodd-Frank. The red tape involved in the Dodd-Frank threshold can cost a bank hundreds of thousands of dollars per year. But now that the line has been crossed, WesBanco has made two acquisitions.

Coal is hurting, and the metal and chemical industries are in decline, too, in West Virginia. Natural gas is booming, and there is lots of construction going on in building processing plants and pipelines to ship gas out of state. But banking appears to be different,

The current wave of consolidations has gone on for 25 years or more as banks from Ohio and North Carolina took control of West Virginia's largest banking companies. For whatever reason, West Virginia bankers have seen growth opportunities by becoming the hunters instead of the hunted.

Back around 1996 when a lot of former bank presidents realized they had been demoted to branch managers as their new out-of-state owners took more control of local operations. Here in West Virginia, we had several new banking companies — known in the industry as de novo banks — form around that time. But most if not all are gone now, having been absorbed by the larger in-state banks.

Who knows where this wave of consolidations will end? Don't ask me. I got out of the prediction part of this business when I realized  how bad I was at it. But time is circular, and what happened before probably will happen again. The questions are when and how.

Sunday, April 22, 2018

See you Tuesday or Wednesday

Hey folks, I've been under the weather for a few days. This late-winter or early spring cold just won't let go.

I've started working on something I expect to post Tuesday or Wednesday.

This has gotten me to thinking about people who work on the river for four weeks at a time. Do they get sick days? Or do they tough it out and do their jobs anyway? Perhaps things are different on line haul boats or passenger vessels. It was just something that came into my head.

So until Tuesday or Wednesday, here's a photo from last year. It's the M/V AEP Leader upbound at Huntington, W.Va. — America's Best Community.


Saturday, April 14, 2018

M/V Canton

It had been a few days since I had gotten a photo of a towboat just because it was there ...

... so this morning I got one.

Friday, April 13, 2018

Something that probably only I find interesting

At its northernmost point, the Ohio River is at about same latitude as the straight-line part of the Missouri-Iowa border.

At  its southernmost point, at Cairo, it is about the same latitude the straight-line part of the Missouri-Arkansas border.  It is also about the same latitude as Norfolk, Va., America's northernmost year-round ice-free port on the East Coast.

If I think of any more geographical oddities, I'll post them, too.

Wednesday, April 11, 2018

Two closures and a passing

First, the 150-year-old Roebling Bridge at Cincinnati is closed for several weeks for repairs.

Today this word came from the Huntington District of the U.S. Army Corps of Engineers:

Effective immediately, the Ohio River is closed to mariners at the Belleville Locks and Dam, Ohio River, mile 203.9. This unexpected closure is due to a hydraulic line failure in the main chamber. The auxiliary chamber is being prepared to open and will be available sometime this evening. The main lock chamber at Belleville will remain closed for repairs. The duration of the repair work is undetermined at this time.

And on a sad note, one of the survivors of the Silver Bridge collapse has died in North Carolina. From the Point Pleasant River Museum and Learning Center:

Our hearts were broken as we learned of the passing of our dear friend Mr. William Edmondson. We got to know and spend time with Mr. Edmondson and his family when he visited the Point Pleasant River Museum and later during the 50th Remembrance of the Collapse of the Silver Bridge. Bill was a Hennis truck driver, one of 5 people who fell into the Ohio River and survived when the Silver Bridge collapsed on Dec. 15, 1967. Our thoughts and prayers are with the Edmondson family during this time.

I and others met Edmondson after the ceremony. Of course he was swarmed by reporters with cameras and voice recorders afterwards. He patiently told his story and answered questions from us media jackals.

Monday, April 9, 2018

Too late

This morning I awoke to an inch or two of snow on the ground. That made for a great background for getting a towboat photo if there were any boats in the area.

Lucky for me, the Janis R. Brewer was coming down the river. I headed out for one of my favorite boat photo spots within close driving distance. But I was about ten minutes too late. The boat had done passed it.

So I went to my next spot that was available, given the high water that covered some others. Again, it was too late. The snow was gone from the background.

But I still got off a shot.

Maybe next time.

Saturday, April 7, 2018

Coal shipments are back to the new normal

Last year it looked like coal shipments on the Ohio River had bottomed out and were trending upward again. This year’s first-quarter numbers regressed to where they were in 2016.

High water this year could account for some of the drop in coal traffic, but not for all of it.

The declines in this year’s first quarter compared to last year’s were particularly noticeable at the to dams closest to the mouth of the Big Sandy River — Greenup and Gallipolis Robert C. Byrd. Coal shipments through Robert. C. Byrd were down about 42 percent compared with last year. Shipments through Greenup were down even more — almost 48 percent.

Coal traffic was also down at Racine, which has become the busiest locks and dam on the Ohio for coal traffic. It was also down at McAlpine and Cannelton, which probably handle more coal from the Illinois Basin, but it was up at Smithland and Locks and Dam 52.

Here is a chart comparing first-quarter numbers for the busier locks for coal.

Coal shipments, first quarter (thousands of tons)
Dam20172018ChangePct. change
Pike Island 2,768.7-1,587.7-36.5%
Lock & Dam 524,258.04,300.742.71.0%

The numbers from this year are down, but they tend to track 2016 numbers.

For those who are curious, here are numbers for three locks on tributaries.

Lock & Dam 2 (Monongahela)2,825.51,152.3-1,673.2-59.2%
Winfield (Kanawha)1,474.71,204.2-270.5-18.3%
Kentucky (Tennessee)2,280.71,358.7-922.0-40.4%

Here are first-quarter numbers for Byrd and Greenup:

First quarterR.C. ByrdGreenup

For decades, coal has been the primary commodity moved on the Ohio, especially on the upper half. Much as been written here and elsewhere about the reasons for the decline in coal traffic and what the outlook could be.

It makes me wonder when the time will come that coal barges will be a rare sight on the river.

But at one time we couldn't predict what shale gas and shale oil would do to domestic and international energy markets. So things may change. You never know.

Tuesday, April 3, 2018

More on Jeffboat

The Waterways Journal has posted its article about the demise of Jeffboat's operation in the Louisville area. The reasons given are not unexpected, given the downturn in traffic on some waterways and the lack of new boat builds, particularly the large boats, in recent years.

I was fortunate, blessed or whatever you prefer to call it to have had time in 2009 and 2010 to gt re-acquainted with the Ohio River after being so near but so far away for several years. It was exciting to chase down new boats that were coming through the area, whether it was on a pleasant day looking for the AEP Future or subzero cold to get a glimpse of the Paula Ruble.

Back to Jeffboat for a personal note ... Maybe it was twenty years ago, but I remember when Ashland Inc. announced it had reached a deal with Jeffboat to build new double-skinned liquids barges to replace the older single-hulled barges in its fleet. The big announcement was to be in Jeffersonville. To get us media jackals in the Huntington-Ashland market to Jeffersonville so we could cover the event, Ashland put us on a corporate jet and flew us down there and back. It was my only trip on a corporate jet. I thought they would be bigger, but I had no complaints.

Other than the jet ride and learning one of the Ashland p.r. guys was a fan of British sitcoms, I remember asking Ashland CEO John R. Hall one question at the news conference. I asked Hall if his position on the CSX board of directors — CSX owned ACBL at the time — had anything to do with Ashland's decision to have the barges built at Jeffboat. Hall said it did not.

Wednesday, March 28, 2018

Another Ohio River power plant could shut down soon

... but this time it's not a coal-fired plant.

FirstEnergy says it wants to retire three nuclear plants in the next three years. One of those is Beaver Valley at Shippingport, Pa. It's the only nuclear plant along the Ohio River, and is one of the largest in terms of generating capacity.

The other two plants are in northern Ohio.

From the FirstEnergy news release:

The total capacity of the nuclear plants to be deactivated is 4,048 megawatts (MW). In 2017, the nuclear units contributed approximately 65 percent of the electricity produced by the FES generating fleet.

"The decision to deactivate these facilities is very difficult and in no way a reflection on the dedicated, hard-working employees who operate the plants safely and reliably or on the local communities and union leaders who have advocated passionately on their behalf," said Don Moul, president of FES Generation Companies and chief nuclear officer. "Though the plants have taken aggressive measures to cut costs, the market challenges facing these units are beyond their control.

"We call on elected officials in Ohio and Pennsylvania to consider policy solutions that would recognize the importance of these facilities to the employees and local economies in which they operate, and the unique role they play in providing reliable, zero-emission electric power for consumers in both states. We stand ready to roll-up our sleeves and work with policy makers to find solutions that will make it feasible to continue to operate these plants in the future."

M/V John Vaughn

With all the changes in the towing industry and cargo movements in the past few years, some familiar boats rarely make it to my area anymore and some unfamiliar ones are taking their places.

Yesterday evening I noticed a boat called the John Vaughn was in the area, so late on an overcast evening I went to old Lock and Dam 27 to get a look at it.

Note that there was no name near the pilothouse, on the tow knees or on the stern. Something about the boat seemed familiar, but I couldn't place it. I looked it up later and found that it is the former Kevin Flowers of ACBL. The Coast Guard lists its current owner as Knight Manufacturing Corp.

And while I was at old Lock and Dam 27, I  saw the usual litter that plagues public places in this region.

At least this cup lay peacefully and whole surrounded by those little purple flowers, whatever they're called.