Financial Performance - Net income available to common shareholders was $33.2 million, resulting in $0.56 per diluted share[4] - Total deposits reached $13.5 billion, up 4.8% year-over-year and 10.0% quarter-over-quarter annualized[4, 13] - Total loan growth was 9.0% year-over-year and 8.1% quarter-over-quarter annualized[4, 9] - Non-interest income increased 10.8% year-over-year, while non-interest expense decreased 2.3% quarter-over-quarter[4] - The net interest margin (NIM) was 2.92%, a decrease of 44 basis points year-over-year and 10 basis points quarter-over-quarter[6, 19] Balance Sheet and Capital - Average loans to average deposits stood at 88.7%[4] - Non-performing assets to total assets ratio was 0.19%[4] - Tangible common equity to tangible assets ratio was 7.63%[4, 16] - Securities totaled $3.322 billion, representing 18.7% of assets[15] Credit Quality - Net loan charge-offs to average loans (annualized) was 0.20%[6] - Allowance for credit losses as a percentage of total loans was 1.09%[30, 31]

Financial Performance - Net income for Q1 2024 was $33.2 million, or $0.56 per diluted share, down from $39.8 million and $0.67 per diluted share in Q1 2023, representing a decrease of 16.4% in net income and 16.4% in earnings per share year-over-year [2][3]. - Net income available to common shareholders decreased by 16.7% to $33,162,000 compared to $39,810,000 in the prior year [21]. - Return on average assets fell to 0.75% from 0.95%, a decline of 21.05% [23]. - Return on average equity decreased to 5.24% from 6.57%, representing a 20.24% drop [23]. - Net income available to common shareholders for Q1 2024 was $33,162,000, compared to $32,437,000 in Q4 2023 [28]. - Basic net income per common share for Q1 2024 was $0.56, consistent with $0.55 in Q4 2023 [28]. Loan and Deposit Growth - Total portfolio loans increased to $11.9 billion, a rise of $1.0 billion or 9.0% year-over-year, with commercial loans at $8.4 billion, up 9.3% year-over-year [5][6]. - Total deposits reached $13.5 billion, reflecting a 4.8% increase year-over-year and a 2.5% increase quarter-over-quarter, with demand deposits comprising 55% of total deposits [6][7]. - Average loans to average deposits ratio improved to 88.67% from 83.46%, an increase of 6.24% [23]. - Interest-bearing demand deposits increased by 13.6% to $3,529,691 compared to $3,107,112 in the previous year [26]. - Portfolio loans, net of unearned income, rose by 9.0% to $11,873,167 from $10,888,688 year-over-year [25]. Income and Expenses - Non-interest income rose to $30.6 million, an increase of 10.8% year-over-year, driven by new commercial loan swap fees and wealth management fees [11]. - Net interest income for Q1 2024 was $114.0 million, down $10.4 million or 8.3% year-over-year, primarily due to rising funding costs [10]. - Non-interest expense, excluding restructuring costs, was $97.2 million, a $4.2 million increase year-over-year but a $2.3 million decrease sequentially [12]. - Total interest and dividend income increased by 21.7% to $195,333,000 compared to $160,555,000 in the previous year [21]. - Total interest expense on deposits surged by 190.0% to $59,618,000 from $20,561,000 [21]. Asset Quality and Capital Ratios - Credit quality metrics remained strong, with non-performing assets at 0.19% of total assets, down 5 basis points year-over-year [8]. - The Tier I leverage ratio was 9.79% and the total risk-based capital ratio was 14.76% as of March 31, 2024, indicating strong regulatory capital ratios [13]. - The allowance for credit losses on loans increased by 8.8% to $129,190 from $118,698 year-over-year [25]. - Total non-performing loans increased to $32,919 thousand in Q1 2024 from $26,808 thousand in Q4 2023, representing a 22.5% increase [30]. - Tier I risk-based capital ratio was 11.87% in Q1 2024, down from 12.05% in Q4 2023 [30]. Other Key Metrics - The net interest margin decreased to 2.92%, down 10 basis points sequentially and 44 basis points year-over-year, attributed to higher deposit costs [9]. - Book value per share increased by 2.4% to $40.30 from $39.34 [21]. - Dividends declared per share rose by 2.9% to $0.36 from $0.35 [21]. - Total assets increased by 2.9% to $17,772,735 compared to $17,274,626 as of December 31, 2023 [25]. - The efficiency ratio for Q1 2024 improved slightly to 66.65% compared to 66.75% in Q4 2023 [34].

Financial Performance - For the twelve months ended December 31, 2023, net income available to common shareholders was $148.9 million, or $2.51 per diluted share, down from $182.0 million, or $3.02 per diluted share in 2022[192]. - Interest income increased by $197.9 million, or 38.5%, to $711.5 million in 2023 compared to 2022[192]. - Total assets as of December 31, 2023, were $17.7 billion, an increase of 4.6% compared to December 31, 2022[193]. - Total portfolio loans reached $11.6 billion, reflecting an 8.7% increase year-over-year[193]. - Basic earnings per common share decreased to $2.51 in 2023 from $3.03 in 2022, representing a decline of 17.2%[196]. - Return on average assets fell to 0.86% in 2023, down from 1.08% in 2022, a decrease of 20.4%[196]. - The efficiency ratio increased to 63.64% in 2023 compared to 59.53% in 2022, indicating a rise in operational costs[196]. - Non-interest expense increased by $30.9 million, or 8.7%, driven by increases in FDIC insurance, salaries, and marketing expenses[192]. - Net income available to common shareholders decreased to $148.91 million in 2023 from $181.99 million in 2022, a decline of 18.2%[201]. Capital and Regulatory Compliance - As of December 31, 2023, Wesbanco's Common Equity Tier 1 (CET1) ratio was 10.99%, Tier 1 capital ratio was 12.05%, and total capital ratio was 14.91%, all exceeding minimum requirements[58]. - Wesbanco Bank's CET1, Tier 1, and total capital to risk-adjusted assets ratios were 12.13%, 12.13%, and 12.97%, respectively, as of December 31, 2023[58]. - The Federal Reserve requires a minimum CET1 ratio of 4.5%, Tier 1 capital ratio of 6%, and total capital ratio of 8% for banks[56]. - Wesbanco's leverage ratio was 9.87% as of December 31, 2023, indicating strong capital adequacy[60]. - Wesbanco Bank was classified as "well capitalized" under FDIC regulations as of December 31, 2023, allowing it to pay dividends without restrictions[44]. - Wesbanco's total assets increased above $15 billion due to recent acquisitions, affecting the inclusion of certain trust preferred securities in Tier 1 capital[138]. Competition and Market Environment - The company has faced intense competition from various financial institutions, which may impact its market share and profit potential[34]. - Wesbanco's ability to attract and retain banking customers may be challenged by increased competition from various financial institutions and fintech companies, potentially impacting loan and deposit growth[126]. - The company's trust and investment services segment competes with commercial banks, trust companies, and investment advisory firms, among others[34]. Community Engagement and Philanthropy - In 2023, Wesbanco provided philanthropic donations totaling $0.9 million and employees contributed 11,500 volunteer hours[33]. - Wesbanco Bank received an "Outstanding" CRA rating from the FDIC for community development performance for the period of July 2019 through November 2022, marking the eighth consecutive "Outstanding" rating over more than twenty years[87]. - The Wesbanco CDC has made over 231 loans totaling over $178 million, benefiting businesses in low-income, economically distressed communities and creating over 6,800 jobs[88]. - Wesbanco has been recognized with the "America Saves Designation of Savings Excellence for Banks" for eight consecutive years, highlighting its efforts to encourage savings during America Saves Week 2023[88]. - Wesbanco originated over $2 billion in community development loans in the past five years, supporting local communities[89]. Risk Management and Operational Challenges - The company is exposed to operational risks, including reputational, legal, compliance, and fraud risks, which could materially affect its operations[133]. - Wesbanco's risk management framework is crucial for mitigating various risks, and any failure in this framework could lead to unexpected losses[140]. - The implementation of Basel III capital standards may negatively impact Wesbanco's capital requirements and overall financial condition[106]. - Changes in economic or political policies could adversely impact Wesbanco's business and its customers[101]. - The transition to remote work environments may complicate the recruitment and retention of key employees, impacting business operations[134]. Asset Management and Investment Portfolio - Approximately 36% of Wesbanco's total securities portfolio was invested in municipal bonds as of December 31, 2023, exposing the company to default risks associated with economic downturns in municipalities[117]. - The increase in interest rates in 2023 led to a decrease in the fair value of securities in Wesbanco's investment portfolio, resulting in unrealized losses recorded in other comprehensive income[109]. - Wesbanco's goodwill was approximately $1.1 billion, representing 43% of stockholders' equity as of December 31, 2023, with potential impairment risks that could negatively affect financial results[122]. Employee and Corporate Culture - Wesbanco employed 2,321 full-time equivalent employees as of December 31, 2023, with an average tenure of approximately 10 years for all employees and over 16 years for executive officers[27]. - The turnover rate for Wesbanco in 2023 was 19%, while the turnover rate for officers was 15%[28]. - Wesbanco's corporate culture emphasizes customer and employee satisfaction, with initiatives focused on diversity and inclusion[29][31]. Dividends and Shareholder Returns - For the year ended December 31, 2023, Wesbanco declared cash dividends of approximately $10.1 million to preferred shareholders and $82.9 million to common shareholders[43]. - The quarterly dividend was increased to $0.36 per share in Q4 2023, marking the seventeenth increase over the last thirteen years[195]. - Dividends declared per common share increased to $1.41 in 2023 from $1.37 in 2022, a growth of 2.9%[196]. - Total shareholder return for Wesbanco was 105.70 as of December 31, 2023, compared to 100.00 at the end of 2018, reflecting a moderate growth trajectory[170].

Financial Data and Key Metrics Changes - For Q4 2023, the company reported net income available to common shareholders of $32.4 million and diluted earnings per share of $0.55, while for the full year, net income was $151.9 million and diluted earnings per share was $2.56, excluding after-tax merger and restructuring charges [8][30] - The return on tangible common equity was 13%, with nonperforming assets to total assets at just 16 basis points, and a tangible common equity ratio of 7.62% [9][45] - Total assets as of December 31, 2023, were $17.7 billion, including total portfolio loans of $11.6 billion, reflecting nearly 9% year-over-year growth [32] Business Line Data and Key Metrics Changes - The company achieved fourth quarter loan growth of nearly 9% year-over-year and 11% quarter-over-quarter annualized, driven by both commercial and residential lending teams [15] - Total commercial loans increased 8% year-over-year and 13% sequentially annualized, with new commercial loan yields exceeding 8% [15][39] - Non-interest income for Q4 totaled $30 million, an 8.3% increase from the prior year, driven by commercial swap and wealth management fees [39] Market Data and Key Metrics Changes - Total deposits increased to $13.2 billion, reflecting both sequential and year-over-year growth, with a 4% annualized growth rate excluding broker deposits [35] - The net interest margin for Q4 was stable at 3.02%, although it declined year-over-year due to higher funding costs [37] - The company expects continued loan growth in the mid to upper single-digit range during 2024, supported by loan production offices and banker hiring initiatives [18] Company Strategy and Development Direction - The company is focused on delivering positive operating leverage through new products and services, expense management, and strategic investments [6][23] - A retail transformation initiative is underway, aimed at optimizing staffing models and reallocating resources to drive growth in business banking [23][51] - The company is exploring new loan production offices in Tennessee, Virginia, and Ohio as part of its growth strategy [68] Management's Comments on Operating Environment and Future Outlook - Management highlighted the successful navigation of industry-wide headwinds and expressed confidence in the company's ability to generate value for shareholders [6][7] - The outlook for 2024 includes expectations for slight net interest margin contraction in the first half, stabilizing later in the year, and continued focus on disciplined expense management [46][54] - Management anticipates that credit provisioning will remain stable, with no significant credit stress observed in the commercial real estate portfolio [74][75] Other Important Information - The company received accolades for its Community Reinvestment Act performance and was recognized for strong customer service and digital services [10][13] - The introduction of new treasury management products is expected to enhance fee revenue, with a target of achieving 30% of total fee revenue over multiple years [70] Q&A Session Summary Question: Loan growth and production in new markets - Management noted strong loan growth from new loan production offices, with a mix of commercial and industrial businesses and commercial real estate [57] Question: Margin guidance sensitivity to rate scenarios - Management discussed the potential impact of interest rate cuts on margin guidance, indicating that deposit costs may come down faster than asset pricing [58][66] Question: Operating expenses and efficiency measures - Management is evaluating processes for efficiency and has reduced staffing in retail while reinvesting in business banking [60] Question: Treasury management investments and fee revenue contribution - Management aims to reduce reliance on spread revenue, targeting around 30% of total fee revenue from treasury management products over several years [70] Question: Capital deployment priorities and share repurchases - Management indicated that dividends and loan growth are top priorities, with share repurchases lower on the list for now [71] Question: Credit provisioning outlook - Management expects credit provisioning to remain stable, with no significant stress observed in the portfolio [74][75]

Financial Performance - For the three months ended September 30, 2023, total interest and dividend income increased to $183.589 million, up 37% from $134.117 million in the same period of 2022[11]. - Net income for the three months ended September 30, 2023, was $36.842 million, a decrease of 30.5% compared to $53.033 million in the same period of 2022[12]. - Total non-interest income for the nine months ended September 30, 2023, was $90.372 million, slightly up from $89.622 million in the same period of 2022[11]. - Basic earnings per common share for the nine months ended September 30, 2023, was $1.96, down from $2.19 in the same period of 2022[11]. - Net income available to common shareholders for Q3 2023 was $34,311,000, down from $50,502,000 in Q3 2022, representing a decrease of 32%[38]. - Basic earnings per common share for Q3 2023 was $0.58, compared to $0.85 for Q3 2022, reflecting a decline of 31.8%[38]. Expenses and Losses - Total non-interest expense for the nine months ended September 30, 2023, increased to $290.498 million, up from $266.511 million in the same period of 2022[11]. - The provision for credit losses for the nine months ended September 30, 2023, was $12.932 million, compared to a reversal of $4.785 million in the same period of 2022[11]. - The provision for loan losses for the nine months ended September 30, 2023, is $11.612 million, while the provision for loan commitments is $1.361 million, totaling $12.973 million[56]. - The net charge-offs for the nine months ended September 30, 2023, amount to $2.787 million, indicating a decrease in recoveries compared to previous periods[56]. Cash Flow and Investments - Net cash provided by operating activities for the nine months ended September 30, 2023, was $121.956 million, down from $196.674 million for the same period in 2022[16]. - The net cash used in investing activities for the nine months ended September 30, 2023, was $311.934 million, compared to $775.142 million for the same period in 2022[16]. - Cash, cash equivalents, and restricted cash at the end of the period on September 30, 2023, were $495.082 million, an increase from $378.556 million at the end of the same period in 2022[16]. Shareholder Equity and Dividends - Total shareholders' equity as of September 30, 2023, was $2,447.941 million, slightly up from $2,464.998 million as of June 30, 2023[13]. - The company declared dividends of $0.35 per common share for the three months ended September 30, 2023, compared to $0.34 in the same period of 2022[11]. - Total dividends paid to common shareholders were $61,703 thousand, slightly up from $61,292 thousand in the previous year, indicating a year-over-year increase of about 0.7%[16]. Loan Portfolio and Credit Quality - The total loans amounted to $11,333.6 million, an increase from $10,710.9 million at December 31, 2022, reflecting a growth of approximately 5.8%[53]. - The total allowance for credit losses on loans and loan commitments as of September 30, 2023, is $136.344 million, compared to $126.158 million at the beginning of the year, reflecting an increase of approximately 8.4%[56]. - The amount of loans classified as "Pass" totaled $7.723 billion as of September 30, 2023, a decrease from $7.390 billion as of December 31, 2022, reflecting a decline of approximately 5.0%[65]. - Criticized loans, categorized as compromised, totaled $180.136 million as of September 30, 2023, compared to $147.945 million as of December 31, 2022, marking an increase of about 21.8%[65]. Securities and Unrealized Losses - The total available-for-sale debt securities amounted to $2.6 billion as of September 30, 2023, with unrealized losses of $392.9 million[42]. - The total held-to-maturity debt securities were valued at $1.2 billion, with unrealized losses of $212.1 million as of September 30, 2023[42]. - The net change in unrealized losses on debt securities available-for-sale for the three months ended September 30, 2023, was $(44.112) million, compared to $(119.299) million in the same period of 2022[12]. Accounting Standards and Regulatory Changes - The adoption of ASU 2022-02 on January 1, 2023, eliminated the accounting guidance for Troubled Debt Restructurings (TDRs), impacting how loan modifications are reported[34]. - The FASB's ASU 2023-06 on disclosure improvements is effective from October 2023, but is not expected to materially impact the Consolidated Financial Statements[25]. - The company has transitioned away from LIBOR, adopting the One Month Term Secured Overnight Financing Rate (1M Term SOFR) as its alternative replacement rate[37].

Financial Data and Key Metrics Changes - For Q3 2023, the company reported net income of $35 million or $0.59 per share, with pretax, pre-provision income of $51 million, excluding after-tax merger and restructuring charges [7][16] - The CET1 ratio stands at 11%, indicating strong capital levels [7] - Total assets reached $17.3 billion, with total portfolio loans of $11.3 billion and securities of $3.4 billion [18] - The net interest margin for Q3 was 3.03%, a decrease of 15 basis points sequentially [21] Business Line Data and Key Metrics Changes - Total loan growth was 10% year-over-year and 7% quarter-over-quarter annualized, driven by commercial and residential lending teams [11] - Commercial loan growth increased 8% year-over-year and 6% sequentially annualized [11] - Residential mortgage originations decreased by 30% year-over-year, totaling approximately $165 million in Q3 [19] Market Data and Key Metrics Changes - Total deposits increased to $13.1 billion, returning to year-end 2022 levels, with a 1.8% quarter-over-quarter increase [9] - Non-interest bearing demand deposits decreased by 2.7% from the second quarter [20] - Total deposit funding costs increased to 136 basis points, reflecting a beta of 40% on the 300 basis point increase in the Fed funds rate since late September 2022 [22] Company Strategy and Development Direction - The company is focused on disciplined expense management and generating positive operating leverage while investing in long-term growth prospects [5] - New treasury management products are being rolled out, expected to enhance customer relationships and drive fee income [14][62] - The company aims to maintain conservative credit standards while expanding its commercial lending capabilities [48] Management's Comments on Operating Environment and Future Outlook - Management anticipates some contraction in the net interest margin in Q4 but expects stabilization in 2024 [27] - The company is well-positioned for any operating environment, actively managing liquidity risk [26] - The effective tax rate for the full year is expected to be between 17% and 18% [31] Other Important Information - Non-interest income for Q3 was $30.9 million, a decrease of $1.4 million year-over-year [23] - Operating expenses increased due to higher salaries, benefits, and equipment costs, totaling $97.3 million for Q3 [24] - The company has made strategic investments in commercial hiring and loan production offices [13] Q&A Session Summary Question: Plans for opening more LPOs - The company is considering expanding LPOs in Tennessee and Virginia, particularly in Northern Virginia and Richmond [33][34] Question: Margin outlook and factors for improvement - Management expects slight margin contraction in Q4 but anticipates stabilization with potential rate cuts in 2024 [35] Question: Contribution of commercial lenders to deposit growth - Approximately 75% of deposit growth has come from the commercial side, aided by changes in incentive structures [45][46] Question: Loan growth sensitivity to macro conditions - The company is gaining market share while maintaining conservative credit standards, focusing on hiring new commercial lenders [48] Question: Expense growth outlook - Low to mid-single-digit growth in expenses is expected, balancing investments and efficiencies [51] Question: Specific reserve on a hospitality loan - A hospitality loan in Downtown Baltimore required an additional reserve of $2.8 million due to appraisal results [70][71]

Financial Performance - Pre-tax, pre-provision income reached $57 million, a 9.1% year-over-year increase[4] - Net income available to common shareholders was $42.4 million, with diluted earnings per share at $0.71[4] - Return on average tangible equity was 13%, up 63 basis points year-over-year[5] Loan and Deposit Growth - Total loan growth showed a 9% year-over-year increase and an 8% year-to-date annualized growth[4] - Total deposits remained stable at $12.9 billion, consistent with the previous quarter[12] - Commercial and industrial (C&I) loans increased at an annualized rate of 10.2% quarter-over-quarter[8] Asset Quality and Capital - Non-performing assets to total assets ratio was 0.19%[4] - Tangible equity to tangible assets ratio stood at 8.24%[4] - Uninsured deposits accounted for 23.5% of total deposits after exclusions[11] Net Interest Margin - Net interest margin was 3.18%, a 15 basis points increase year-over-year[5] - Total deposit funding costs, including non-interest bearing deposits, were 103 basis points[18]

PART I - FINANCIAL INFORMATION [Item 1. Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) Wesbanco's financial statements show **$17.36 billion** in total assets by June 30, 2023, with Q2 net income of **$44.9 million** [Note 1. Summary of Significant Accounting Policies](index=9&type=section&id=Note%201.%20Summary%20of%20Significant%20Accounting%20Policies) Wesbanco adopted **ASU 2022-02** on January 1, 2023, discontinuing **TDR** accounting and replacing it with **MBEFD** guidance - Effective January 1, 2023, the company adopted **ASU 2022-02**, discontinuing **Troubled Debt Restructuring (TDR) accounting**. It was replaced by new guidance on **Modifications for Borrowers Experiencing Financial Difficulty (MBEFD)**, which **eliminates the need to measure economic concessions** on loan modifications[21](index=21&type=chunk)[31](index=31&type=chunk) [Note 3. Securities](index=12&type=section&id=Note%203.%20Securities) Total debt securities had **$3.40 billion** fair value and **$3.90 billion** amortized cost, with **$501.6 million** gross unrealized losses Debt Securities Portfolio Composition (in thousands) | Category | Amortized Cost (in thousands) | Fair Value (in thousands) | | :--- | :--- | :--- | | **Available-for-sale** | **$2,678,107** | **$2,329,222** | | Residential mortgage-backed securities | $2,023,958 | $1,721,887 | | Commercial mortgage-backed securities | $313,521 | $305,242 | | **Held-to-maturity** | **$1,224,470** | **$1,072,229** | | Obligations of states and political subdivisions | $1,157,889 | $1,010,481 | | **Total Debt Securities** | **$3,902,577** | **$3,401,451** | - Gross unrealized losses on available-for-sale debt securities totaled **$349.0 million** as of June 30, 2023, primarily in residential mortgage-backed securities (**$302.1 million**). The company does not believe these securities are impaired due to credit quality and does not intend to sell them before recovery[46](index=46&type=chunk) - The allowance for credit losses on held-to-maturity securities was **$193 thousand** at June 30, 2023, down from **$220 thousand** at year-end 2022[45](index=45&type=chunk) [Note 4. Loans and the Allowance for Credit Losses](index=15&type=section&id=Note%204.%20Loans%20and%20the%20Allowance%20for%20Credit%20Losses) Total portfolio loans grew to **$11.13 billion**, with ACL at **$130.3 million**, and non-performing loans decreased to **$31.6 million** Loan Portfolio Composition (in thousands) | Loan Category | June 30, 2023 (in thousands) | % of Total | | :--- | :--- | :--- | | Total Commercial Real Estate | $6,295,467 | 56.3% | | Commercial and Industrial | $1,558,491 | 14.0% | | Residential Real Estate | $2,341,928 | 21.0% | | Home Equity & Consumer | $934,078 | 8.4% | | **Total Portfolio Loans** | **$11,129,964** | **99.7%** | Allowance for Credit Losses Roll-Forward (Six Months Ended June 30, 2023, in thousands) | Description | Loans (in thousands) | Loan Commitments (in thousands) | Total (in thousands) | | :--- | :--- | :--- | :--- | | **Beginning Balance (Dec 31, 2022)** | **$117,790** | **$8,368** | **$126,158** | | Provision for Credit Losses | $4,876 | $1,756 | $6,632 | | Net Charge-offs | $(2,500) | - | $(2,500) | | **Ending Balance (June 30, 2023)** | **$120,166** | **$10,124** | **$130,290** | - Non-performing loans stood at **$31.6 million** (**0.28% of total loans**) as of June 30, 2023, a decrease from **$41.4 million** (**0.39% of total loans**) at December 31, 2022[62](index=62&type=chunk)[191](index=191&type=chunk) [Note 5. Derivatives and Hedging Activities](index=25&type=section&id=Note%205.%20Derivatives%20and%20Hedging%20Activities) Wesbanco uses derivatives with **$1.2 billion** notional for risk management, recording **$78.1 million** in assets and **$77.6 million** in liabilities Derivative Instruments (in thousands) | Derivative Type | Notional Amount (in thousands) | Asset Fair Value (in thousands) | Liability Fair Value (in thousands) | | :--- | :--- | :--- | :--- | | Interest rate swaps and caps | $1,243,199 | $77,753 | $77,458 | | Interest rate lock commitments | $33,293 | $0 | $171 | | Forward TBA contracts | $51,000 | $322 | $0 | | **Total** | | **$78,075** | **$77,629** | - The company recognized income from swap and cap fees of **$4.3 million** for the six months ended June 30, 2023, compared to **$1.0 million** for the same period in 2022[80](index=80&type=chunk) [Note 11. Business Segments](index=33&type=section&id=Note%2011.%20Business%20Segments) Wesbanco operates through Community Banking and Trust and Investment Services, generating **$83.0 million** and managing **$5.1 billion** in assets Segment Net Income (Six Months Ended June 30, 2023, in thousands) | Segment | Net Income (in thousands) | | :--- | :--- | | Community Banking | $83,046 | | Trust and Investment Services | $4,175 | | **Total Net Income** | **$87,221** | - The Trust and Investment Services segment managed or held in custody approximately **$5.1 billion** in assets at June 30, 2023, up from **$4.8 billion** a year prior[126](index=126&type=chunk) Consolidated Balance Sheet Highlights (in thousands) | Account | June 30, 2023 (in thousands) | December 31, 2022 (in thousands) | | :--- | :--- | :--- | | **Total Assets** | **$17,356,954** | **$16,931,905** | | Net Portfolio Loans | $11,009,798 | $10,584,938 | | Total Securities | $3,565,447 | $3,789,055 | | **Total Liabilities** | **$14,891,956** | **$14,505,243** | | Total Deposits | $12,861,434 | $13,131,090 | | Total Borrowings | $1,763,140 | $1,121,473 | | **Total Shareholders' Equity** | **$2,464,998** | **$2,426,662** | Consolidated Income Statement Highlights (in thousands, except per share data) | Metric | Three Months Ended June 30, 2023 (in thousands) | Three Months Ended June 30, 2022 (in thousands) | Six Months Ended June 30, 2023 (in thousands) | Six Months Ended June 30, 2022 (in thousands) | | :--- | :--- | :--- | :--- | :--- | | Net Interest Income | $121,567 | $112,228 | $245,898 | $219,938 | | Provision for Credit Losses | $3,028 | $(812) | $6,605 | $(4,250) | | Non-Interest Income | $31,841 | $26,983 | $59,493 | $57,365 | | Non-Interest Expense | $96,437 | $87,019 | $192,560 | $174,569 | | **Net Income** | **$44,880** | **$42,748** | **$87,221** | **$86,870** | | **Diluted EPS** | **$0.71** | **$0.67** | **$1.38** | **$1.34** | [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=35&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Q2 net income rose **5.2%** due to higher net interest income and margin expansion, offset by increased credit loss provision and expenses [Earnings Summary](index=36&type=section&id=Earnings%20Summary) Q2 2023 net income available to common shareholders was **$42.3 million** (**$0.71** diluted EPS), driven by **8.3%** net interest income growth Quarterly Earnings Performance | Metric | Q2 2023 (in millions) | Q2 2022 (in millions) | | :--- | :--- | :--- | | Net Income (Common) | $42.3M | $40.2M | | Diluted EPS | $0.71 | $0.67 | - Key drivers for Q2 2023 performance include an **8.3% increase in net interest income**, a **$3.0 million provision for credit losses** (compared to a **$0.8 million release** in Q2 2022), an **18.0% increase in non-interest income**, and a **10.8% rise in non-interest expense**[137](index=137&type=chunk)[138](index=138&type=chunk)[139](index=139&type=chunk)[140](index=140&type=chunk) [Financial Condition](index=42&type=section&id=Financial%20Condition) Total assets increased **2.5%** to **$17.4 billion**, driven by **4.0%** loan growth, funded by **57.2%** increased borrowings as deposits declined - Total portfolio loans increased by **$427.2 million** (**4.0%**) since December 31, 2022, driven by growth in improved property and residential real estate loans[171](index=171&type=chunk)[186](index=186&type=chunk) - Total deposits decreased by **$269.7 million** (**2.1%**) since year-end, with a notable **8.8% decline** in non-interest bearing demand deposits, partially offset by an **8.4% increase** in certificates of deposit[171](index=171&type=chunk)[199](index=199&type=chunk) - To fund loan growth amidst deposit outflows, total borrowings increased by **$641.7 million** (**57.2%**), primarily through a **$675.0 million increase** in FHLB borrowings[171](index=171&type=chunk)[202](index=202&type=chunk) [Capital Resources](index=49&type=section&id=Capital%20Resources) Shareholders' equity increased **$38.3 million** to **$2.5 billion**, with all regulatory capital ratios exceeding well-capitalized minimums Regulatory Capital Ratios (Wesbanco, Inc.) | Ratio | June 30, 2023 | Well-Capitalized Minimum | | :--- | :--- | :--- | | Common Equity Tier 1 | 11.03% | 6.50% | | Tier 1 Capital | 12.12% | 8.00% | | Total Capital | 14.83% | 10.00% | | Tier 1 Leverage | 9.78% | 5.00% | - The company repurchased **162,700 shares** of common stock for **$3.7 million** during the first six months of 2023. As of June 30, 2023, **1,021,901 shares** remained authorized for repurchase[206](index=206&type=chunk) [Liquidity Risk](index=50&type=section&id=Liquidity%20Risk) Wesbanco maintains strong liquidity with **$3.3 billion** in FHLB credit, and uninsured deposits estimated at **$3.0 billion** - Uninsured deposits totaled **$3.9 billion** (**30% of total deposits**). After excluding **$846.6 million** in collateralized public funds, the uninsured portion is **$3.0 billion** (**24% of total deposits**)[213](index=213&type=chunk) - The company has significant additional funding sources, including **$3.3 billion** in available FHLB credit, **$235.0 million** in overnight lines of credit, and access to the Federal Reserve's Bank Term Funding Program (BTFP) with **$615.5 million** in qualifying securities[214](index=214&type=chunk)[215](index=215&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=53&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) Wesbanco's primary market risk is interest rate risk, with simulation models showing asset sensitivity where a **+100 bps** rate shock increases net interest income by **2.5%** Net Interest Income Sensitivity (as of June 30, 2023) | Rate Shock (bps) | % Change in NII over 1 Year | ALCO Guideline | | :--- | :--- | :--- | | +200 | 5.0% | (10.0%) | | +100 | 2.5% | (7.5%) | | -100 | (2.7%) | (7.5%) | | -200 | (6.3%) | (10.0%) | - Management employs several strategies to manage interest rate risk, including increasing variable-rate loans, selling longer-term mortgages, growing demand deposits, and using back-to-back loan swaps[245](index=245&type=chunk) [Item 4. Controls and Procedures](index=55&type=section&id=Item%204.%20Controls%20and%20Procedures) The CEO and CFO concluded that **disclosure controls and procedures were effective** as of June 30, 2023, with no material changes to internal controls - Management concluded that **disclosure controls and procedures were effective** as of the end of the period covered by the report[246](index=246&type=chunk) - No changes in internal control over financial reporting occurred during the fiscal quarter that materially affected, or are reasonably likely to materially affect, the company's internal controls[248](index=248&type=chunk) PART II – OTHER INFORMATION [Item 1. Legal Proceedings](index=56&type=section&id=Item%201.%20Legal%20Proceedings) Wesbanco is involved in various ordinary course legal proceedings, none of which management expects to result in a **material loss** - The company is involved in various lawsuits and claims in the ordinary course of business but does not expect any to result in a **material loss**[250](index=250&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=56&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) Wesbanco repurchased **243,131 shares** at **$24.35** average price during Q2 2023, with **1,021,901 shares** remaining authorized Share Repurchase Activity (Q2 2023) | Period | Total Shares Purchased | Average Price Paid ($) | | :--- | :--- | :--- | | April 2023 | 49,321 | $29.23 | | May 2023 | 121,246 | $22.20 | | June 2023 | 72,564 | $24.62 | | **Total Q2** | **243,131** | **$24.35** | - As of June 30, 2023, **1,021,901 shares** remained authorized for repurchase under the current plan[251](index=251&type=chunk)[252](index=252&type=chunk)

Financial Data and Key Metrics Changes - For Q2 2023, net income available to common shareholders increased by 5.3% to $42.4 million, with diluted earnings per share of $0.71, excluding after-tax merger and restructuring charges [11][23] - The return on average tangible equity was reported at 13%, and the CET1 ratio stood at 11%, indicating strong capital levels [12] - Total assets reached $17.4 billion, with total portfolio loans of $11.1 billion, reflecting an 8% year-to-date annualized growth [25] Business Line Data and Key Metrics Changes - Total loan growth was 9% year-over-year and quarter-over-quarter annualized, with commercial loan growth increasing by 6% year-over-year and 7% sequentially [12][14] - Residential mortgage originations decreased by 37% year-over-year, totaling approximately $208 million for Q2 2023 [27] - Noninterest income rose to $31.8 million, up $4.9 million year-over-year, primarily due to higher commercial swap fees [32] Market Data and Key Metrics Changes - Total deposits remained flat compared to March 31 levels, despite industry-wide deposit contraction due to interest rate and inflationary pressures [19][28] - The loan-to-deposit ratio was reported at 85.4%, providing ample lending capacity [18] - The net interest margin for Q2 2023 was 3.18%, a decrease of 18 basis points from the previous quarter [30] Company Strategy and Development Direction - The company is focused on disciplined expense management while making strategic investments to ensure long-term growth [9][21] - There is an emphasis on expanding commercial loan production offices and hiring top-tier talent to enhance loan growth [14][43] - The company plans to maintain a balanced distribution across economically diverse major markets and strengthen diversified earnings streams [21] Management's Comments on Operating Environment and Future Outlook - Management anticipates continued margin contraction in Q3 2023, similar to the 18 basis points seen in Q2, with expectations of a flat margin in Q4 [40][72] - The outlook for residential mortgage originations remains positive relative to industry trends, contingent on home price stabilization and interest rates [41] - The company is modeling Fed funds to peak at 5.75%, with expectations of lower deposit betas compared to peers [39] Other Important Information - The company has successfully retained more rate-sensitive customers through a recent CD campaign, increasing CD balances by $76 million quarter-over-quarter [31] - The management team is focused on maintaining a strong customer service culture combined with robust digital services [21] Q&A Session Summary Question: Loan growth expectations for the second half of the year - Management expects mid-to-upper single-digit growth, supported by a strong pipeline of approximately $810 million [48] Question: Potential new markets for expansion - The company is always looking for opportunities in new markets, focusing on finding the right talent [50] Question: Margin guidance and deposit mix assumptions - Management anticipates continued margin contraction and expects noninterest-bearing deposits to decrease to about 30% by year-end [52] Question: Loan-to-deposit ratio targets - The target for the loan-to-deposit ratio is low-90s, with current levels at 85% providing sufficient capacity for loan growth [53] Question: Swap fee income expectations - Management is targeting to double swap fee income compared to the previous year, aiming for around $4 million [56] Question: M&A strategy - The company remains opportunistic regarding M&A, focusing on existing footprints or contiguous states [73]

Financial Performance - Total interest and dividend income for Q1 2023 was $160,555,000, a 43% increase from $112,174,000 in Q1 2022[11] - Net interest income after provision for credit losses was $120,755,000 in Q1 2023, compared to $111,149,000 in Q1 2022, reflecting an increase of 8.5%[11] - Non-interest income decreased to $27,653,000 in Q1 2023 from $30,382,000 in Q1 2022, a decline of 8.9%[11] - Total non-interest expense increased to $96,125,000 in Q1 2023, up from $87,548,000 in Q1 2022, representing a rise of 9.1%[11] - Net income for Q1 2023 was $42,341,000, down from $44,124,000 in Q1 2022, a decrease of 4.0%[11] - Earnings per common share for Q1 2023 was $0.67, unchanged from Q1 2022[11] - Comprehensive income for Q1 2023 was $70,358,000, compared to a comprehensive loss of $62,068,000 in Q1 2022[13] - The company declared dividends of $0.35 per common share in Q1 2023, up from $0.34 in Q1 2022[11] Cash Flow and Investments - Net cash provided by operating activities decreased to $10,891,000 in Q1 2023 from $47,741,000 in Q1 2022, representing a decline of approximately 77.2%[16] - Net cash used in investing activities was $91,874,000 in Q1 2023, compared to $181,387,000 in Q1 2022, indicating a reduction of about 49.3%[16] - Net cash provided by financing activities increased to $270,075,000 in Q1 2023 from $251,786,000 in Q1 2022, reflecting an increase of approximately 7.3%[16] Shareholder Information - The average common shares outstanding decreased from 61,445,399 in Q1 2022 to 59,217,711 in Q1 2023[11] - Net income available to common shareholders was $39,810,000 in Q1 2023, down from $41,593,000 in Q1 2022, a decrease of approximately 4.3%[33] - Earnings per common share (basic and diluted) remained stable at $0.67 in Q1 2023, compared to $0.68 in Q1 2022, showing a slight decline of 1.5%[33] Credit Losses and Provisions - The provision for credit losses was $3,577,000 in Q1 2023, compared to a reversal of $3,438,000 in Q1 2022[11] - The total allowance for credit losses on loans and loan commitments as of March 31, 2023, is $127.825 million, a decrease from $126.158 million at the end of 2022[50] - The provision for loan losses for the three months ended March 31, 2023, was a net charge of $2.827 million, compared to a provision of $3.586 million in the previous year[50] - The total charge-offs for the period were $3.319 million, while recoveries amounted to $1.400 million, resulting in net charge-offs of $1.919 million[50] Securities and Investments - The total available-for-sale debt securities amounted to $2.77 billion with a fair value of $2.47 billion as of March 31, 2023, showing a decrease in unrealized losses from $345.9 million to $309.2 million[37] - The total held-to-maturity debt securities were valued at $1.24 billion with a fair value of $1.11 billion as of March 31, 2023, reflecting a decrease in unrealized losses from $164.8 million to $132.9 million[40] - The total debt securities reached $4.01 billion with a fair value of $3.57 billion, indicating total unrealized losses of $442.17 million[41] - Proceeds from the sale of available-for-sale securities for the three months ended March 31, 2023, totaled $20.5 million, compared to $0 million for the same period in 2022[41] Loan Portfolio - The fair value of total loans as of March 31, 2023, was $10.9 billion, an increase from $10.7 billion as of December 31, 2022[48] - The total commercial real estate loans increased to $6.2 billion as of March 31, 2023, compared to $6.1 billion at the end of 2022[48] - The recorded investment in residential real estate loans rose to $2.3 billion as of March 31, 2023, up from $2.1 billion at December 31, 2022[48] - The total portfolio loans amounted to $10.888688 billion as of March 31, 2023, up from $10.702728 billion as of December 31, 2022, indicating a growth of approximately 1.73%[51] Risk Management and Derivatives - The company has transitioned away from LIBOR, adopting the One Month Term Secured Overnight Financing Rate (1M Term SOFR) as its alternative replacement rate, reflecting proactive risk management in interest rate exposure[31] - The total amount of interest rate swaps and caps with commercial banking customers reached an aggregate notional amount of $1.1 billion as of March 31, 2023, up from $0.9 billion at December 31, 2022[78] - Wesbanco recognized income of $1.8 million from swap and cap fees for the three months ended March 31, 2023, compared to $0.2 million for the same period in 2022, indicating a significant increase[78] Other Financial Metrics - The total commitments to extend credit as of March 31, 2023, amounted to $4.93 billion, an increase from $4.62 billion at December 31, 2022, with lines of credit rising to $3.94 billion from $3.81 billion[124] - For the three months ended March 31, 2023, total trust fees were $7,494,000, a decrease from $7,835,000 in the same period of 2022, representing a decline of approximately 4.4%[117] - The total service charges on deposits for the same period were $6,170,000, slightly up from $6,090,000 in 2022, indicating a growth of about 1.3%[117]