PART I [Business Overview](index=3&type=section&id=ITEM%201.%20BUSINESS) Wesbanco, Inc. is a bank holding company providing comprehensive financial services through community banking and trust segments, operating across six states with approximately **$16.4 billion** in assets as of December 31, 2020 - Wesbanco, Inc. is a bank holding company offering a full range of financial services, including retail and corporate banking, trust and investment, brokerage, mortgage banking, and insurance, through two reportable segments: community banking and trust and investment services[12](index=12&type=chunk) - On November 22, 2019, Wesbanco acquired Old Line Bancshares, Inc. (OLBK), adding approximately **$3.0 billion in assets** and expanding its franchise into four new Metropolitan Statistical Areas in Maryland[14](index=14&type=chunk) - Wesbanco Bank is classified as a 'large bank' (total assets exceeding **$10 billion**) for FDIC premium calculation purposes, leading to increased deposit insurance premiums in 2020[51](index=51&type=chunk)[52](index=52&type=chunk) - Wesbanco adopted the CECL accounting standard effective January 1, 2020, and elected a five-year transition period to phase out the estimated impact on regulatory capital, as permitted by the CARES Act[87](index=87&type=chunk) - Wesbanco Bank received an 'Outstanding' rating for its community development performance for the seventh consecutive time, demonstrating strong compliance with the Community Reinvestment Act (CRA)[91](index=91&type=chunk) Key Operational and Financial Metrics (December 31, 2020) | Metric | Value | | :-------------------------------- | :------------------- | | Total Assets | ~$16.4 billion | | Number of Branches | 233 | | Number of ATM Machines | 226 | | Assets Under Management (Trust & Investment Services) | ~$5.0 billion | | Full-time Equivalent Employees | 2,612 | | Average Employee Tenure | >10 years | | Average Executive Officer Tenure | >19 years | Regulatory Capital Ratios (December 31, 2020) | Ratio | Wesbanco, Inc. | Wesbanco Bank, Inc. | | :-------------------------- | :------------- | :---------------- | | Common Equity Tier 1 (CET1) | 13.40% | 14.04% | | Tier 1 Capital Ratio | 14.72% | 14.04% | | Total Capital Ratio | 17.58% | 15.40% | | Tier 1 Leverage Ratio | 10.51% | 10.00% | [Risk Factors](index=13&type=section&id=ITEM%201A.%20RISK%20FACTORS) The company faces significant risks from the COVID-19 pandemic, economic downturns, high loan concentrations, extensive regulations, interest rate fluctuations, and operational challenges including cybersecurity and acquisitions - The COVID-19 pandemic has created widespread volatility, adversely impacting Wesbanco's operations and customers, potentially leading to decreased business, inability to meet payment obligations, and negative effects on liquidity and capital[101](index=101&type=chunk)[103](index=103&type=chunk)[104](index=104&type=chunk) - Wesbanco's loan portfolio is highly concentrated in West Virginia, Ohio, Pennsylvania, Kentucky, Indiana, and Maryland, with approximately **16% in residential real estate** and **53% in commercial real estate**, making it vulnerable to regional economic downturns and real estate market fluctuations[102](index=102&type=chunk)[118](index=118&type=chunk)[120](index=120&type=chunk) - Extensive federal and state regulations, including Basel III capital standards and the Dodd-Frank Act, impose significant costs and limitations on Wesbanco's business, with potential for further expansion in scope and complexity[107](index=107&type=chunk)[109](index=109&type=chunk) - Fluctuations in market interest rates, particularly the significant reductions by the Federal Reserve in 2020, are expected to adversely affect net interest income and profitability, while the transition away from LIBOR introduces uncertainty for financial instruments tied to these rates[112](index=112&type=chunk)[114](index=114&type=chunk) - The adoption of the CECL accounting standard introduces significant volatility in credit loss estimation, requiring complex judgments and potentially impacting financial condition and results of operations[128](index=128&type=chunk) - Operational risks, including cybersecurity breaches, reliance on third-party vendors, and the challenges of integrating future acquisitions, could materially adversely affect Wesbanco's business, reputation, and financial performance[138](index=138&type=chunk)[142](index=142&type=chunk)[153](index=153&type=chunk)[157](index=157&type=chunk) [Unresolved Staff Comments](index=23&type=section&id=ITEM%201B.%20UNRESOLVED%20STAFF%20COMMENTS) There are no unresolved staff comments from the SEC [Properties](index=23&type=section&id=ITEM%202.%20PROPERTIES) Wesbanco's properties primarily consist of 233 owned and leased banking offices and six leased loan production offices across its operating states, with its main office in Wheeling, West Virginia - As of December 31, 2020, Wesbanco operated **233 banking offices** (164 owned, 69 leased) and six leased loan production offices across West Virginia, Ohio, western Pennsylvania, Kentucky, southern Indiana, and Maryland[167](index=167&type=chunk) - The main office is located at 1 Bank Plaza, Wheeling, West Virginia, in a bank-owned building that serves as the main office for community banking, trust and investment services, and executive offices[168](index=168&type=chunk) Rental Income from Commercial Office Space | Year | Rental Income (in millions) | | :--- | :-------------------------- | | 2020 | $1.8 | | 2019 | $1.1 | | 2018 | $1.3 | [Legal Proceedings](index=23&type=section&id=ITEM%203.%20LEGAL%20PROCEEDINGS) Wesbanco is involved in various legal proceedings and claims that arise in the ordinary course of business, but management does not anticipate any material losses from these matters - Wesbanco is involved in lawsuits, claims, investigations, and proceedings that arise in the ordinary course of business[170](index=170&type=chunk) - Management does not believe that a material loss related to such proceedings or claims pending or threatened is reasonably possible[170](index=170&type=chunk) [Mine Safety Disclosures](index=23&type=section&id=ITEM%204.%20MINE%20SAFETY%20DISCLOSURES) This item is not applicable to Wesbanco PART II [Market for the Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=24&type=section&id=ITEM%205.%20MARKET%20FOR%20THE%20REGISTRANT%27S%20COMMON%20EQUITY%2C%20RELATED%20STOCKHOLDER%20MATTERS%20AND%20ISSUER%20PURCHASES%20OF%20EQUITY%20SECURITIES) Wesbanco's common stock is traded on the NASDAQ Global Select Stock Market under the symbol WSBC, with **1,704,457 shares** remaining for repurchase as of December 31, 2020, and a cumulative total shareholder return of **118.37** from 2015 to 2020 - Wesbanco's common stock is quoted on the NASDAQ Global Select Stock Market under the symbol WSBC, with approximately **7,866 record holders** as of February 17, 2021[174](index=174&type=chunk) - As of December 31, 2020, Wesbanco had two active stock repurchase plans with a total of **1,704,457 shares** remaining to be repurchased[175](index=175&type=chunk)[176](index=176&type=chunk) Cumulative Total Shareholder Returns (December 31, 2015 - December 31, 2020) | Index | Dec 31, 2015 | Dec 31, 2016 | Dec 31, 2017 | Dec 31, 2018 | Dec 31, 2019 | Dec 31, 2020 | | :---------------------- | :----------- | :----------- | :----------- | :----------- | :----------- | :----------- | | Wesbanco, Inc. | 100.00 | 147.62 | 143.17 | 132.63 | 141.30 | 118.37 | | Russell 2000 | 100.00 | 121.31 | 139.08 | 123.76 | 155.35 | 186.36 | | SNL Mid Cap Bank Index | 100.00 | 138.85 | 139.42 | 114.02 | 140.91 | 127.65 | [Selected Financial Data](index=26&type=section&id=ITEM%206.%20SELECTED%20FINANCIAL%20DATA) This section provides a five-year summary of Wesbanco's consolidated financial data, including per common share information, key balance sheet figures, and selected performance ratios, offering insights into financial trends and operational performance - The selected financial data is derived from Wesbanco's audited financial statements for the five years ended December 31, 2020, and includes results from acquisitions such as OLBK (2019), FFKT (2018), FTSB (2018), and YCB (2016) since their respective acquisition dates[180](index=180&type=chunk) Selected Per Common Share Information | Metric | 2020 | 2019 | 2018 | 2017 | 2016 | | :----------------------------------- | :----- | :----- | :----- | :----- | :----- | | Earnings per common share—basic | $1.78 | $2.83 | $2.93 | $2.15 | $2.16 | | Earnings per common share—diluted | $1.77 | $2.83 | $2.92 | $2.14 | $2.16 | | Dividends declared per common share | $1.28 | $1.24 | $1.16 | $1.04 | $0.96 | | Book value at year end | $38.84 | $38.24 | $36.24 | $31.68 | $30.53 | | Tangible book value at year end (Non-GAAP) | $21.75 | $21.55 | $19.63 | $18.42 | $17.19 | Selected Balance Sheet Information (Year-End) | Metric | 2020 (in thousands) | 2019 (in thousands) | 2018 (in thousands) | 2017 (in thousands) | 2016 (in thousands) | | :----------------------------------- | :------------------ | :------------------ | :------------------ | :------------------ | :------------------ | | Securities | $2,722,069 | $3,257,654 | $3,146,800 | $2,284,822 | $2,316,214 | | Net portfolio loans | $10,603,406 | $10,215,556 | $7,607,333 | $6,296,157 | $6,205,762 | | Total assets | $16,425,610 | $15,720,112 | $12,458,632 | $9,816,178 | $9,790,877 | | Deposits | $12,429,373 | $11,004,006 | $8,831,633 | $7,043,588 | $7,040,879 | | Shareholders' equity | $2,756,737 | $2,593,921 | $1,978,827 | $1,395,321 | $1,341,408 | Selected Ratios | Metric | 2020 | 2019 | 2018 | 2017 | 2016 | | :----------------------------------- | :----- | :----- | :----- | :----- | :----- | | Return on average assets | 0.73% | 1.24% | 1.26% | 0.96% | 0.97% | | Return on average equity | 4.50% | 7.49% | 8.68% | 6.83% | 7.13% | | Net interest margin | 3.37% | 3.62% | 3.52% | 3.44% | 3.32% | | Efficiency ratio (Non-GAAP) | 56.38% | 56.68% | 54.60% | 56.44% | 56.69% | | Allowance for credit losses - loans to total loans | 1.72% | 0.51% | 0.64% | 0.71% | 0.70% | | Non-performing assets to total assets | 0.25% | 0.35% | 0.35% | 0.50% | 0.49% | | Tier 1 leverage ratio | 10.51% | 11.30% | 10.74% | 10.39% | 9.81% | | Total capital to risk-weighted assets | 17.58% | 15.12% | 15.99% | 15.16% | 14.18% | | Trust assets at market value (in thousands) | $5,025,565 | $4,719,966 | $4,269,961 | $3,943,519 | $3,723,142 | Summary Statements of Income (in thousands) | Metric | 2020 | 2019 | 2018 | 2017 | 2016 | | :----------------------------------- | :------- | :------- | :------- | :------- | :------- | | Interest and dividend income | $541,277 | $484,253 | $414,957 | $332,424 | $286,097 | | Interest expense | $61,797 | $84,349 | $67,721 | $42,129 | $32,767 | | Net interest income | $479,480 | $399,904 | $347,236 | $290,295 | $253,330 | | Provision for credit losses | $107,741 | $11,198 | $7,764 | $9,986 | $8,478 | | Non-interest income | $128,185 | $116,716 | $100,276 | $88,840 | $81,499 | | Non-interest expense | $354,845 | $312,208 | $265,224 | $220,860 | $208,680 | | Net income available to common shareholders | $119,400 | $158,873 | $143,112 | $94,482 | $86,635 | [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=31&type=section&id=ITEM%207.%20MANAGEMENT%27S%20DISCUSSION%20AND%20ANALYSIS%20OF%20FINANCIAL%20CONDITION%20AND%20RESULTS%20OF%20OPERATIONS) This section provides an overview of Wesbanco's financial performance and condition, highlighting key trends and factors influencing results, including a decrease in net income due to CECL adoption and increased credit loss provision, alongside growth in net interest income and non-interest income [Forward-Looking Statements](index=31&type=section&id=FORWARD-LOOKING%20STATEMENTS) Forward-looking statements in the report involve risks and uncertainties, subject to factors that could cause actual results to differ materially from those contemplated - Forward-looking statements in the report involve risks and uncertainties, including those detailed under 'Risk Factors,' and are subject to important factors that could cause actual results to differ materially from those contemplated[195](index=195&type=chunk) - Key factors influencing actual results include changing economic conditions (including COVID-19), interest rate fluctuations, potential credit losses, regulatory actions, cybersecurity breaches, and competitive conditions[195](index=195&type=chunk) [Application of Critical Accounting Policies and Estimates](index=31&type=section&id=APPLICATION%20OF%20CRITICAL%20ACCOUNTING%20POLICIES%20AND%20ESTIMATES) Wesbanco's financial statements require management estimates for critical policies such as the allowance for credit losses, goodwill impairment, and business combinations, with the CECL model adoption significantly impacting the allowance - Wesbanco's financial statements require management to make estimates, assumptions, and judgments, with the most significant policies identified as the allowance for credit losses, goodwill and other intangible assets impairment, and business combinations[196](index=196&type=chunk)[197](index=197&type=chunk) - The company adopted the CECL model on January 1, 2020, resulting in a day-one impact of a **$41.4 million increase** to the allowance for credit losses and a **$26.6 million after-tax effect** on retained earnings[198](index=198&type=chunk)[202](index=202&type=chunk) - Goodwill and other intangible assets are evaluated for impairment annually or more frequently if circumstances indicate, using market capitalization, discounted cash flow models, and other market-based methods[214](index=214&type=chunk)[216](index=216&type=chunk) - Business combinations are accounted for using the acquisition method, with identifiable assets and liabilities measured at fair value, and any excess cost recorded as goodwill[221](index=221&type=chunk) [Executive Overview](index=33&type=section&id=EXECUTIVE%20OVERVIEW) Wesbanco's 2020 performance saw a decrease in net income due to increased credit loss provisions, despite growth in net interest income and assets, while maintaining strong capital ratios and increasing its quarterly dividend - Wesbanco completed a **$150.0 million capital raise** of non-cumulative perpetual preferred stock in August 2020, which enhanced regulatory capital ratios and replaced the Tier 1 to Tier 2 reclassification of trust preferred securities[227](index=227&type=chunk) - The quarterly dividend rate was increased by **3.2% to $0.32 per share** in the first quarter of 2020, marking the thirteenth increase in ten years[228](index=228&type=chunk) Key Financial Highlights (2020 vs. 2019) | Metric | 2020 | 2019 | Change ($) | Change (%) | | :------------------------------------------------ | :----------- | :----------- | :----------- | :----------- | | Net Income Available to Common Shareholders | $119.4 million | $158.9 million | $(39.5) million | (24.8)% | | Net Income Available to Common Shareholders (excl. certain items) | $127.1 million | $171.8 million | $(44.7) million | (26.0)% | | Net Interest Income | $479.5 million | $399.9 million | $79.6 million | 19.9% | | Net Interest Margin | 3.37% | 3.62% | (0.25)% | - | | Non-Interest Income | $128.2 million | $116.7 million | $11.5 million | 9.8% | | Non-Interest Expense | $354.8 million | $312.2 million | $42.6 million | 13.7% | | Provision for Credit Losses | $107.7 million | $11.2 million | $96.5 million | 861.6% | | Total Assets (Dec 31) | $16.4 billion | $15.7 billion | $0.7 billion | 4.5% | | Portfolio Loans (Dec 31) | $10.8 billion | $10.3 billion | $0.5 billion | 5.1% | | Criticized and Classified Loans (% of total portfolio loans) | 4.59% | 2.17% | 2.42% | 111.5% | | Net Loan Charge-offs to Average Loans | 0.06% | 0.09% | (0.03)% | (33.3)% | | Pandemic-related Loan Deferrals (Dec 31) | $171.1 million | N/A | N/A | N/A | | Tier I Leverage Ratio (Dec 31) | 10.51% | 11.30% | (0.79)% | - | | Tangible Equity to Tangible Assets (Dec 31) | 10.52% | 10.02% | 0.50% | - | [Earnings Summary](index=35&type=section&id=EARNINGS%20SUMMARY) Wesbanco's net income and diluted EPS decreased in 2020 due to a significant increase in the provision for credit losses, despite growth in net interest income from acquisitions and PPP loans, and a rise in non-interest income from mortgage banking - Net interest income increased by **$79.6 million (19.9%)** in 2020, primarily due to a **28.3% increase** in average earning assets from the OLBK acquisition and PPP loans, despite a **25 basis point decrease** in the net interest margin to **3.37%** due to lower interest rates[230](index=230&type=chunk) - Non-interest income rose by **$11.5 million (9.8%)** in 2020, driven by a **176.6% increase** in mortgage banking income, but partially offset by decreases in service charges on deposits and electronic banking fees due to the Durbin Amendment[231](index=231&type=chunk) - Non-interest expense (excluding restructuring and merger-related expenses) increased by **$49.3 million (16.7%)** in 2020, mainly due to increased compensation, occupancy, equipment costs from the OLBK acquisition, and a significant rise in FDIC insurance expense[232](index=232&type=chunk) Net Income and EPS (2020 vs. 2019) | Metric | 2020 | 2019 | Change ($) | Change (%) | | :----------------------------------- | :----------- | :----------- | :----------- | :----------- | | Net Income Available to Common Shareholders | $119.4 million | $158.9 million | $(39.5) million | (24.8)% | | Diluted Earnings Per Share | $1.77 | $2.83 | $(1.06) | (37.5)% | [Net Interest Income Analysis](index=36&type=section&id=TABLE%201.%20NET%20INTEREST%20INCOME) Net interest income increased by **$79.6 million (19.9%)** in 2020 due to higher average earning asset balances from acquisitions and PPP loans, despite a **25 basis point** decrease in net interest margin to **3.37%** from lower interest rates - Net interest income increased by **$79.6 million (19.9%)** in 2020, primarily due to a **28.3% increase** in average earning asset balances, driven by the OLBK acquisition and PPP loans[234](index=234&type=chunk) - The net interest margin decreased by **25 basis points** to **3.37%** in 2020, influenced by multiple Federal Reserve rate decreases and a relatively flat yield curve, partially offset by lower funding costs[234](index=234&type=chunk) - Average loan balances increased by **$2.9 billion (36.1%)** in 2020, mainly from the OLBK acquisition and PPP loan originations, while average total deposits increased by **$2.8 billion (31.5%)** due to acquired deposits and CARES Act stimulus funds[234](index=234&type=chunk) - Interest expense decreased by **$22.6 million (26.7%)** in 2020 due to lower market rates and management actions to reduce deposit rates, with the cost of interest-bearing liabilities decreasing by **42 basis points** to **0.63%**[238](index=238&type=chunk) Net Interest Income (in thousands) | Metric | 2020 | 2019 | 2018 | | :----------------------------------- | :------- | :------- | :------- | | Net interest income | $479,480 | $399,904 | $347,236 | | Net interest margin, fully taxable-equivalent | 3.37% | 3.62% | 3.52% | [Average Balance Sheets and Net Interest Margin Analysis](index=38&type=section&id=TABLE%202.%20AVERAGE%20BALANCE%20SHEETS%20AND%20NET%20INTEREST%20MARGIN%20ANALYSIS) Average loan balances increased by **$2.9 billion** in 2020 due to acquisitions and PPP loans, while loan yields decreased by **64 basis points** to **4.28%**, and the cost of interest-bearing liabilities decreased by **42 basis points** to **0.63%** - Average loan balances increased by **$2.9 billion** in 2020, primarily due to the OLBK acquisition and PPP loan originations, while loan yields decreased by **64 basis points** to **4.28%** due to federal funds rate decreases[235](index=235&type=chunk) - Total average deposits increased by **$2.8 billion (31.5%)** in 2020, with non-interest bearing demand deposits increasing by **48.2%** and comprising **31.9%** of total average deposits[238](index=238&type=chunk) - The cost of interest-bearing liabilities decreased by **42 basis points** from **1.05%** in 2019 to **0.63%** in 2020, driven by reductions in deposit rates and lower rates for various borrowings[238](index=238&type=chunk) Average Balance Sheets and Net Interest Margin Analysis (in thousands, except rates) | Metric | 2020 Average Balance | 2020 Interest | 2020 Rate | 2019 Average Balance | 2019 Interest | 2019 Rate | | :----------------------------------- | :------------------- | :------------ | :-------- | :------------------- | :------------ | :-------- | | **ASSETS** | | | | | | | | Loans, net of unearned income | $10,874,763 | $465,677 | 4.28% | $7,991,107 | $393,166 | 4.92% | | Total earning assets | $14,381,608 | $545,796 | 3.80% | $11,205,357 | $489,571 | 4.37% | | Total Assets | $16,442,704 | | | $12,853,920 | | | | **LIABILITIES** | | | | | | | | Total interest bearing deposits | $8,082,652 | $27,049 | 0.33% | $6,469,160 | $43,455 | 0.67% | | Federal Home Loan Bank borrowings | $1,135,934 | $24,701 | 2.17% | $1,074,715 | $26,548 | 2.47% | | Total interest bearing liabilities | $9,769,379 | $61,797 | 0.63% | $8,032,443 | $84,349 | 1.05% | | Non-interest bearing demand deposits | $3,781,583 | | | $2,550,864 | | | | Net interest margin (taxable equivalent) | | $483,999 | 3.37% | | $405,222 | 3.62% | [Rate/Volume Analysis of Changes in Interest Income and Interest Expense](index=39&type=section&id=TABLE%203.%20RATE%2FVOLUME%20ANALYSIS%20OF%20CHANGES%20IN%20INTEREST%20INCOME%20AND%20INTEREST%20EXPENSE%20(1)) The increase in net interest income was primarily driven by volume changes in earning assets, particularly loans, which contributed **$129.2 million** to interest income, partially offset by a **$56.7 million** decrease due to lower rates - The increase in net interest income was primarily driven by volume changes in earning assets, particularly loans, which contributed **$129.2 million** to interest income, partially offset by a **$56.7 million** decrease due to lower rates[242](index=242&type=chunk) - Interest expense decreased significantly due to rate changes, with a **$(34.9) million** reduction from lower rates, partially offset by a **$12.3 million** increase from higher volumes of interest-bearing liabilities[242](index=242&type=chunk) Rate/Volume Analysis of Changes in Interest Income and Interest Expense (2020 vs. 2019, in thousands) | Category | Volume Change | Rate Change | Net Change | | :----------------------------------- | :------------ | :---------- | :--------- | | Total interest income change | $125,924 | $(69,700) | $56,224 | | Total interest expense change | $12,303 | $(34,855) | $(22,552) | | Net interest income increase (decrease) | $113,621 | $(34,845) | $78,776 | [Provision for Credit Losses - Loans](index=39&type=section&id=PROVISION%20FOR%20CREDIT%20LOSSES%20-%20LOANS) The provision for credit losses significantly increased to **$107.7 million** in 2020, primarily due to the adoption of CECL and changes in macroeconomic forecasts, leading to a rise in criticized and classified loans to **4.59%** of total portfolio loans - The provision for credit losses increased significantly to **$107.7 million** in 2020 from **$11.2 million** in 2019, primarily due to the adoption of the CECL accounting standard and changes in macroeconomic forecasts, particularly expected higher unemployment[244](index=244&type=chunk) - The increase in criticized and classified loans to **4.59%** of total portfolio loans (from **2.17%** in 2019) was partly due to net downgrades of **$209.9 million** in hospitality loans, reflecting the pandemic's impact[225](index=225&type=chunk) Credit Quality Indicators (December 31, 2020 vs. 2019) | Metric | 2020 | 2019 | | :----------------------------------- | :----- | :----- | | Non-performing loans (% of total loans) | 0.38% | 0.49% | | Non-performing assets (% of total assets) | 0.25% | 0.35% | | Criticized and classified loans (% of total loans) | 4.59% | 2.17% | | Past due loans (% of total loans) | 0.37% | 0.46% | | Annualized net loan charge-offs to average loans | 0.06% | 0.09% | [Non-Interest Income Analysis](index=40&type=section&id=TABLE%204.%20NON-INTEREST%20INCOME) Non-interest income increased by **$11.5 million (9.8%)** in 2020, primarily driven by a **176.6%** surge in mortgage banking income, partially offset by decreases in service charges and electronic banking fees due to regulatory changes - Mortgage banking income increased by **$14.5 million (176.6%)** in 2020 due to record mortgage production and sales into the secondary market, driven by the low interest rate environment[251](index=251&type=chunk) - Electronic banking fees decreased by **$5.1 million (22.6%)** in 2020, primarily due to the full-year impact of the Durbin Amendment's limitation on interchange fees for banks with over **$10 billion** in assets[249](index=249&type=chunk) - Debit card sponsorship income, a new revenue stream from the OLBK acquisition, contributed **$2.8 million** in 2020, but Wesbanco plans to reduce this program's customer-related revenues[252](index=252&type=chunk)[254](index=254&type=chunk) Non-Interest Income (in thousands) | Category | 2020 | 2019 | $ Change | % Change | | :-------------------------- | :------- | :------- | :------- | :------- | | Trust fees | $26,335 | $26,579 | $(244) | (0.9)% | | Service charges on deposits | $21,943 | $26,974 | $(5,031) | (18.7)% | | Electronic banking fees | $17,524 | $22,634 | $(5,110) | (22.6)% | | Bank-owned life insurance | $7,359 | $5,913 | $1,446 | 24.5% | | Mortgage banking income | $22,736 | $8,219 | $14,517 | 176.6% | | Debit card sponsorship income | $2,792 | $328 | $2,464 | 751.2% | | Swap fee and valuation income | $6,110 | $3,406 | $2,704 | 79.4% | | Total non-interest income | $128,185 | $116,716 | $11,469 | 9.8% | [Non-Interest Expense Analysis](index=41&type=section&id=TABLE%205.%20NON-INTEREST%20EXPENSE) Non-interest expense increased by **$42.6 million (13.7%)** in 2020, primarily due to higher salaries, occupancy, and equipment costs from the OLBK acquisition, alongside a significant surge in FDIC insurance expense - Salaries and wages increased by **$20.7 million (15.6%)** due to a **10.2% increase** in average full-time equivalent employees from the OLBK acquisition and annual merit increases[257](index=257&type=chunk) - FDIC insurance expense surged by **$5.8 million (295.4%)** in 2020 due to a larger assessment base from the OLBK acquisition and a higher assessment rate for banks with over **$10 billion** in assets[260](index=260&type=chunk) - Restructuring and merger-related expenses decreased by **$6.7 million (40.7%)** in 2020, comprising **$6.4 million** for OLBK merger-related costs and **$3.3 million** for branch optimization strategy[262](index=262&type=chunk) Non-Interest Expense (in thousands) | Category | 2020 | 2019 | $ Change | % Change | | :----------------------------------- | :------- | :------- | :------- | :------- | | Salaries and wages | $153,166 | $132,485 | $20,681 | 15.6% | | Employee benefits | $41,723 | $39,313 | $2,410 | 6.1% | | Net occupancy | $27,580 | $22,505 | $5,075 | 22.6% | | Equipment | $24,801 | $20,494 | $4,307 | 21.0% | | FDIC insurance | $7,734 | $1,956 | $5,778 | 295.4% | | Amortization of intangible assets | $13,411 | $10,340 | $3,071 | 29.7% | | Restructuring and merger-related expenses | $9,725 | $16,397 | $(6,672) | (40.7)% | | Consulting, regulatory and advisory fees | $11,717 | $8,993 | $2,724 | 30.3% | | Total non-interest expense | $354,845 | $312,208 | $42,637 | 13.7% | [Income Taxes](index=42&type=section&id=INCOME%20TAXES) The provision for income taxes decreased in 2020, primarily due to a **24.9%** decrease in pretax income and the utilization of additional New Markets Tax Credits, resulting in an effective tax rate of **15.9%** - The decrease in the provision for income taxes was primarily due to a **24.9% decrease** in pretax income from 2019 to 2020 and the utilization of additional New Markets Tax Credits[264](index=264&type=chunk) Income Tax Provision and Effective Tax Rate | Metric | 2020 | 2019 | | :-------------------------- | :----------- | :----------- | | Provision for federal and state income taxes | $23.0 million | $34.3 million | | Effective tax rate | 15.9% | 17.8% | [Financial Condition](index=42&type=section&id=FINANCIAL%20CONDITION) Wesbanco's total assets and portfolio loans increased by **4.5%** and **5.1%** respectively in 2020, driven by PPP loans, while deposit growth was fueled by stimulus funds and increased savings, and shareholders' equity rose due to preferred stock issuance and net income - The increase in total assets and portfolio loans was primarily driven by participation in the SBA PPP loan program, which accounted for **$726.3 million** in remaining loans at year-end 2020[265](index=265&type=chunk) - Deposit growth was fueled by CARES Act stimulus funds, PPP loan proceeds, increased personal savings, and a strategic focus on transaction-based accounts, leading to significant increases in demand, savings, and money market deposits[265](index=265&type=chunk) - Shareholders' equity increased due to **$144.5 million** in net proceeds from preferred stock issuance, net income exceeding dividends, and a **$30.2 million** comprehensive income gain, partially offset by the CECL adoption impact and share repurchases[267](index=267&type=chunk) Balance Sheet Changes (December 31, 2020 vs. 2019) | Metric | Change ($) | Change (%) | | :-------------------------- | :----------- | :----------- | | Total Assets | $0.7 billion | 4.5% | | Total Deposits | $1.4 billion | 13.0% | | Shareholders' Equity | $162.8 million | 6.3% | | Total Securities | $(535.6) million | (16.4)% | | Total Portfolio Loans | $521.2 million | 5.1% | | Total Borrowings | $(914.6) million | (48.2)% | [Securities](index=43&type=section&id=SECURITIES) Total securities decreased by **$535.3 million (16.4%)** in 2020, primarily due to sales of mortgage-backed securities and calls of higher-rate securities, resulting in a **46 basis point** decrease in the weighted average yield to **2.43%** - The decrease in available-for-sale securities was primarily due to sales of residential mortgage-backed securities to boost liquidity for potential COVID-19 related needs[270](index=270&type=chunk) - The weighted average yield of the total securities portfolio decreased by **46 basis points** to **2.43%** due to increased prepayment speeds on mortgage-backed securities, calls of higher-rate securities, and purchases at lower market rates[270](index=270&type=chunk) - Net unrealized gains on available-for-sale securities, included in accumulated other comprehensive income, increased to **$46.9 million** at December 31, 2020, from **$20.7 million** at December 31, 2019, due to decreases in market rates[272](index=272&type=chunk) Composition of Securities (in thousands) | Category | Dec 31, 2020 | Dec 31, 2019 | $ Change | % Change | | :----------------------------------- | :----------- | :----------- | :------- | :------- | | Equity securities (at fair value) | $13,047 | $12,343 | $704 | 5.7% | | Available-for-sale debt securities (at fair value) | $1,978,136 | $2,393,558 | $(415,422) | (17.4)% | | Held-to-maturity debt securities (at amortized cost) | $731,212 | $851,753 | $(120,541) | (14.2)% | | Total securities | $2,722,395 | $3,257,654 | $(535,259) | (16.4)% | | Weighted average yield (Total securities) | 2.43% | 2.89% | (0.46)% | - | Municipal Bond Portfolio Ratings (December 31, 2020) | Rating Category | Amount (in thousands) | % of Total | | :-------------------------- | :-------------------- | :--------- | | Investment Grade - Prime | $72,861 | 9.8% | | Investment Grade - High | $511,013 | 68.4% | | Investment Grade - Upper Medium | $152,704 | 20.4% | | Investment Grade - Lower Medium | $3,072 | 0.4% | | Non-Investment Grade - Speculative | $— | - | | Not rated | $7,354 | 1.0% | | Total municipal bond portfolio | $747,004 | 100.0% | [Loans and Loan Commitments](index=47&type=section&id=LOANS%20AND%20LOAN%20COMMITMENTS) Total portfolio loans increased by **$0.5 million (5.1%)** in 2020, primarily due to PPP loan originations, with **52.1%** in commercial real estate and **22.0%** in commercial and industrial loans, while **$171.1 million** in pandemic-related deferrals remained at year-end - Total portfolio loans increased by **$0.5 million (5.1%)** from December 31, 2019, to December 31, 2020, primarily due to the origination of **$853.1 million** in PPP loans, with **$726.3 million** remaining at year-end[291](index=291&type=chunk) - Excluding PPP loans, total loans decreased by **2.0%** over the last twelve months, as a higher percentage of new residential loans were sold into the secondary market and consumer loan demand decreased due to the pandemic[291](index=291&type=chunk) - Under the CARES Act, Wesbanco modified **3,550 loans** totaling **$2.2 billion** in 2020, with **$171.1 million (1.6% of total portfolio loans)** remaining in deferral as of December 31, 2020, predominantly in the hospitality sector[342](index=342&type=chunk) Loan Portfolio Composition (in thousands) | Category | Dec 31, 2020 Amount | % of Total | Dec 31, 2019 Amount | % of Total | | :----------------------------------- | :------------------ | :--------- | :------------------ | :--------- | | Commercial real estate | $5,705,392 | 52.1% | $5,725,008 | 55.5% | | Commercial and industrial (incl. PPP) | $2,407,438 | 22.0% | $1,644,699 | 16.0% | | Residential real estate | $2,367,348 | 21.6% | $2,523,325 | 24.5% | | Home equity lines of credit | $646,387 | 5.9% | $649,678 | 6.4% | | Consumer | $309,055 | 2.8% | $374,953 | 3.6% | | Total portfolio loans | $10,789,233 | 98.5% | $10,267,985 | 99.6% | | Loans held for sale | $168,378 | 1.5% | $43,013 | 0.4% | | Total loans | $10,957,611 | 100.0% | $10,310,998 | 100.0% | Commercial Loan Exposure by Industry (December 31, 2020, in thousands) | Industry | Total Loan Balance | % of Total Exposure | % of Capital | | :-------------------------- | :----------------- | :------------------ | :----------- | | Agriculture and farming | $33,014 | 0.3% | 2.4% | | Energy | $146,886 | 1.4% | 14.1% | | Construction | $531,702 | 5.3% | 48.2% | | Manufacturing | $304,333 | 3.0% | 26.6% | | Wholesale and distribution | $191,394 | 1.9% | 15.7% | | Retail | $409,876 | 4.1% | 29.2% | | Transportation and warehousing | $143,404 | 1.4% | 10.7% | | Information and communications | $23,083 | 0.2% | 1.9% | | Finance and insurance | $115,147 | 1.1% | 14.7% | | Equipment leasing | $86,179 | 0.9% | 6.9% | | Real estate - 1-4 family | $347,370 | 3.5% | 21.6% | | Real estate - multi-family | $774,830 | 7.7% | 59.3% | | Real estate - other retail | $252,226 | 2.5% | 15.3% | | Real estate - shopping center | $292,510 | 2.9% | 18.3% | | Real estate - office building | $561,483 | 5.6% | 34.9% | | Real estate - commercial/manufacturing | $380,450 | 3.8% | 23.4% | | Real estate - residential buildings | $212,695 | 2.1% | 18.7% | | Real estate - other | $538,260 | 5.4% | 38.3% | | Services | $486,146 | 4.9% | 35.8% | | Schools and education services | $162,095 | 1.6% | 10.7% | | Healthcare | $597,536 | 6.0% | 43.1% | | Entertainment and recreation | $74,027 | 0.7% | 5.0% | | Hotels | $737,492 | 7.4% | 45.5% | | Other accommodations | $37,628 | 0.4% | 2.7% | | Restaurants | $203,030 | 2.0% | 13.7% | | Religious organizations | $126,426 | 1.3% | 9.2% | | Government | $184,906 | 1.8% | 13.2% | | Unclassified | $158,702 | 1.6% | 15.0% | | Total commercial loans | $8,112,830 | 81.0% | 594.1% | [Credit Quality](index=52&type=section&id=CREDIT%20QUALITY) Credit quality indicators showed a decrease in non-performing loans and assets in 2020, but criticized and classified loans increased to **4.59%** of total portfolio loans, primarily due to downgrades in hospitality loans impacted by the pandemic - Criticized and classified loans increased to **$494.9 million (6.1% of total commercial loans)** at December 31, 2020, from **$222.5 million (3.0%)** in 2019, primarily due to downgrades in hospitality loans impacted by the pandemic[373](index=373&type=chunk) Past Due and Accruing Loans (Excluding Non-Accrual and TDRs, in thousands) | Category | Dec 31, 2020 Amount | % of Loan Bal | Dec 31, 2019 Amount | % of Loan Bal | | :----------------------------------- | :------------------ | :------------ | :------------------ | :------------ | | Total 90 days or more | $8,846 | 0.08% | $11,613 | 0.11% | | Total 30 to 89 days | $31,596 | 0.29% | $36,330 | 0.35% | | Total 30 days or more | $40,442 | 0.37% | $47,943 | 0.47% | Non-Performing Assets (in thousands) | Category | Dec 31, 2020 | Dec 31, 2019 | | :----------------------------------- | :----------- | :----------- | | Total TDRs accruing interest | $3,927 | $5,431 | | Total non-accrual loans | $36,880 | $44,913 | | Total non-performing loans | $40,807 | $50,344 | | Real estate owned and repossessed assets | $549 | $4,178 | | Total non-performing assets | $41,356 | $54,522 | | Non-performing loans as a percentage of total portfolio loans | 0.38% | 0.49% | | Non-performing assets as a percentage of total assets | 0.25% | 0.35% | Net Charge-offs (in thousands) | Metric | 2020 | 2019 | | :-------------------------- | :------- | :------- | | Total loan charge-offs | $11,524 | $10,998 | | Total recoveries | $5,060 | $4,663 | | Net charge-offs | $7,049 | $7,584 | | Total net loan charge-offs (% of average loans) | 0.06% | 0.09% | [Allowance for Credit Losses](index=60&type=section&id=ALLOWANCE%20FOR%20CREDIT%20LOSSES) The total allowance for credit losses significantly increased to **$195.3 million** at December 31, 2020, primarily due to the **$41.4 million** impact of adopting the CECL accounting standard and changes in macroeconomic forecasts - The total allowance for credit losses (loans and commitments) increased to **$195.3 million** at December 31, 2020, from **$53.3 million** in 2019, primarily due to the **$41.4 million** impact of adopting the CECL accounting standard on January 1, 2020[378](index=378&type=chunk)[379](index=379&type=chunk) - Excluding PPP loans, the allowance for credit losses on loans was **1.85%** of total portfolio loans, as no allowance is recorded for PPP loans due to their SBA guarantee[379](index=379&type=chunk) - The CECL calculation utilizes a PD/LGD approach, macroeconomic forecasts (e.g., national unemployment peaking at **6.6%** in Q1 2021), and qualitative factors, including COVID-19 pandemic-related transient credit risk and hospitality industry concentration[382](index=382&type=chunk) Allowance for Credit Losses (in thousands) | Metric | Dec 31, 2020 | Dec 31, 2019 | | :----------------------------------- | :----------- | :----------- | | Allowance for credit losses - loans | $185,827 | $52,429 | | Allowance for credit losses - loan commitments | $9,514 | $874 | | Total ending allowance for credit losses | $195,341 | $53,303 | | Allowance for credit losses - loans as a percentage of total portfolio loans | 1.72% | 0.51% | | Allowance for credit losses - loans to total non-performing loans | 4.55x | 1.04x | [Deposits](index=63&type=section&id=DEPOSITS) Total deposits increased by **$1.4 billion (13.0%)** in 2020, driven by CARES Act stimulus funds, PPP loan proceeds, and increased personal savings, while certificates of deposit decreased by **$437.4 million (21.3%)** due to strategic remixing - Total deposits increased by **$1.4 billion (13.0%)** in 2020, primarily driven by CARES Act stimulus funds, PPP loan proceeds deposited into customer accounts, and increased personal savings[391](index=391&type=chunk) - Certificates of deposit decreased by **$437.4 million (21.3%)** due to a corporate strategy to remix retail deposit relationships, lower offered rates, and customer preferences for non-maturity deposit types[392](index=392&type=chunk) - Approximately **$1.0 billion** of certificates of deposit, with an average cost of **0.84%**, are scheduled to mature within the next year[392](index=392&type=chunk) Deposit Composition (in thousands) | Category | Dec 31, 2020 | Dec 31, 2019 | $ Change | % Change | | :-------------------------- | :----------- | :----------- | :------- | :------- | | Non-interest bearing demand | $4,070,835 | $3,178,270 | $892,565 | 28.1% | | Interest bearing demand | $2,839,536 | $2,316,855 | $522,681 | 22.6% | | Money market | $1,685,927 | $1,518,314 | $167,613 | 11.0% | | Savings deposits | $2,214,565 | $1,934,647 | $279,918 | 14.5% | | Certificates of deposit | $1,618,510 | $2,055,920 | $(437,410) | (21.3)% | | Total deposits | $12,429,373 | $11,004,006 | $1,425,367 | 13.0% | [Borrowings](index=64&type=section&id=BORROWINGS) Total borrowings decreased by **$914.6 million (48.2%)** in 2020, primarily due to a **$866.6 million** reduction in FHLB borrowings as Wesbanco utilized available liquidity, while maintaining a **$4.1 billion** FHLB borrowing capacity - FHLB borrowings decreased by **$866.6 million** in 2020, as **$1.3 billion** in maturities and principal paydowns were offset by **$475.0 million** in new advances, utilizing available liquidity[394](index=394&type=chunk) - Wesbanco maintains a maximum borrowing capacity of approximately **$4.1 billion** with the FHLB at December 31, 2020, secured by residential mortgages and other loan types[395](index=395&type=chunk) - A **$30.0 million** revolving line of credit with another financial institution, a senior obligation of the parent company, was renewed in August 2020, with no outstanding balance at year-end[397](index=397&type=chunk) Borrowings (in thousands) | Category | Dec 31, 2020 | Dec 31, 2019 | $ Change | % Change | | :----------------------------------- | :----------- | :----------- | :------- | :------- | | Federal Home Loan Bank Borrowings | $549,003 | $1,415,615 | $(866,612) | (61.2)% | | Other short-term borrowings | $241,950 | $282,362 | $(40,412) | (14.3)% | | Subordinated debt and junior subordinated debt | $192,291 | $199,869 | $(7,578) | (3.8)% | | Total | $983,244 | $1,897,846 | $(914,602) | (48.2)% | [Contractual Obligations](index=64&type=section&id=CONTRACTUAL%20OBLIGATIONS) Wesbanco's total contractual obligations amounted to **$13.9 billion** at December 31, 2020, with **$12.5 billion** due within one year, primarily comprising deposits without a stated maturity and certificates of deposit - The table presents maturities of principal for significant fixed and determinable contractual obligations, excluding future interest payments[398](index=398&type=chunk)[401](index=401&type=chunk) Contractual Obligations (December 31, 2020, in thousands) | Obligation Type | Total | One Year or Less | One to Three Years | Three to Five Years | More Than Five Years | | :----------------------------------- | :---------- | :--------------- | :----------------- | :------------------ | :------------------- | | Deposits without a stated maturity | $10,810,863 | $10,810,863 | $— | $— | $— | | Certificates of deposit | $1,618,510 | $1,000,380 | $400,724 | $159,210 | $58,196 | | Federal Home Loan Bank borrowings | $549,003 | $365,002 | $183,050 | $882 | $69 | | Other short term borrowings | $241,950 | $241,950 | $— | $— | $— | | Subordinated debt and junior subordinated debt | $192,291 | $— | $— | $25,000 | $167,291 | | Future benefit payments under benefit plans | $283,800 | $6,703 | $14,191 | $15,544 | $247,362 | | Director and executive officer retirement plans | $10,005 | $1,501 | $2,926 | $2,173 | $3,405 | | Leases / Right of use assets | $82,064 | $7,368 | $12,853 | $10,588 | $51,255 | | Software licenses and maintenance agreements | $77,266 | $6,216 | $21,585 | $21,585 | $27,880 | | Limited partnership funding commitments | $20,978 | $10,796 | $8,296 | $1,016 | $870 | | Total | $13,886,730 | $12,450,779 | $643,625 | $235,998 | $556,328 | [Off-Balance Sheet Arrangements](index=65&type=section&id=OFF-BALANCE%20SHEET%20ARRANGEMENTS) Wesbanco utilizes off-balance sheet credit arrangements, totaling approximately **$3.0 billion** at December 31, 2020, and is implementing a financial center optimization strategy expected to yield **$6.0 million to $6.5 million** in cost savings - Wesbanco utilizes off-balance sheet credit arrangements, such as commitments to extend credit and letters of credit, to meet customer financing needs, with total commitments approximating **$3.0 billion** at December 31, 2020[403](index=403&type=chunk)[422](index=422&type=chunk) - The allowance for credit losses includes a reserve for unfunded loan commitments, which represents lifetime expected losses and is accounted for in other liabilities[404](index=404&type=chunk) - Wesbanco is implementing a financial center optimization strategy, consolidating **25 locations** and converting two to drive-up only, with expected gross cost savings of **$6.0 million to $6.5 million** in the first half of 2021[405](index=405&type=chunk) [Capital Resources](index=65&type=section&id=CAPITAL%20RESOURCES) Shareholders' equity increased to **$2.8 billion** at December 31, 2020, driven by preferred stock issuance and net income, despite a higher common dividend payout ratio of **72.3%**, while maintaining capital ratios significantly above regulatory minimums - Shareholders' equity increased to **$2.8 billion** at December 31, 2020, from **$2.6 billion** in 2019, primarily due to **$144.5 million** in net proceeds from preferred stock issuance, **$122.0 million** in net income, and a **$30.2 million** other comprehensive income gain[406](index=406&type=chunk) - The common dividend per share payout ratio increased to **72.3%** in 2020 from **43.8%** in 2019, mainly due to a decrease in earnings year-over-year, exceeding the board-approved target range of **35% to 60%**[407](index=407&type=chunk)[408](index=408&type=chunk) - Wesbanco's stock repurchase program was suspended in early March 2020 due to the COVID-19 pandemic, after purchasing **786,010 shares** for **$25.0 million** in the first quarter[410](index=410&type=chunk) - Wesbanco and Wesbanco Bank maintain Tier 1 risk-based, Total risk-based, and Tier 1 leverage capital ratios significantly above minimum regulatory levels, with Wesbanco Bank paying **$64.0 million** in dividends to the parent company in 2020[411](index=411&type=chunk) - Junior subordinated debt and trust preferred securities totaling **$130.0 million** are now accounted for as Tier 2 capital, as Wesbanco's assets exceeded **$15 billion**, as per Basel III capital standards[412](index=412&type=chunk) [Liquidity Risk](index=66&type=section&id=LIQUIDITY%20RISK) Wesbanco actively manages liquidity risk by maintaining liquid assets and substantial borrowing capacity, including **$4.1 billion** with the FHLB, and a stable core deposit base to meet cash and collateral obligations - Wesbanco actively manages liquidity risk by maintaining liquid assets, sufficient borrowing capacity, and a stable core deposit base to meet cash and collateral obligations[414](index=414&type=chunk) - Available credit with the FHLB approximated **$4.1 billion** at December 31, 2020, providing an additional funding source, alongside existing overnight lines of credit with third-party banks totaling **$275.0 million**[418](index=418&type=chunk)[419](index=419&type=chunk) - Parent company liquidity is primarily derived from dividends from Wesbanco Bank and **$223.2 million** in cash on hand, with the ability to receive up to **$306.3 million** in dividends from the Bank without prior regulatory approval[421](index=421&type=chunk) Sources of Liquidity Expected Within the Next Year (December 31, 2020, in thousands) | Source | Amount | | :------------------------------------------------------------------------------------------------ | :--------- | | Cash and cash equivalents | $905,477 | | Securities with a maturity date within the next year and callable securities | $286,304 | | Projected payments and prepayments on mortgage-backed securities and collateralized mortgage obligations | $739,468 | | Loans held for sale | $168,378 | | Accruing loans scheduled to mature | $1,272,232 | | Normal loan repayments | $2,693,036 | | Total sources of liquidity expected within the next year | $6,064,895 | [Quantitative and Qualitative Disclosures About Market Risk](index=68&type=section&id=ITEM%207A.%20QUANTITATIVE%20AND%20QUALITATIVE%20DISCLOSURES%20ABOUT%20MARKET%20RISK) Wesbanco manages interest rate risk through earnings sensitivity and economic value-at-risk models, indicating asset sensitivity in rising rate scenarios, and is actively addressing the LIBOR transition by forming a committee and implementing new loan language - Wesbanco's most significant market risk is interest rate risk, managed by the Asset/Liability Committee (ALCO) using earnings sensitivity simulation and economic value-at-risk models[427](index=427&type=chunk)[428](index=428&type=chunk) - Wesbanco has established a LIBOR transition committee to investigate and mitigate risks associated with the potential discontinuance of LIBOR, including adding alternative rate index language to new loans and exploring replacements like SOFR and AMERIBOR[438](index=438&type=chunk)[441](index=441&type=chunk) Net Interest Income Sensitivity to Interest Rate Changes | Immediate Change in Interest Rates (basis points) | Percentage Change in Net Interest Income from Base over One Year (Dec 31, 2020) | ALCO Guidelines | | :------------------------------------------------ | :----------------------------------------------------------------------------- | :-------------- | | +300 | 15.3% | (15.0%) | | +200 | 10.3% | (10.0%) | | +100 | 5.5% | (7.5%) | | -100 | N/A | (7.5%) | Economic Value of Equity (EVE) Sensitivity to Interest Rate Changes | Immediate Change in Interest Rates (basis points) | Percentage Change in Economic Value of Equity from Base over One Year (Dec 31, 2020) | ALCO Guidelines | | :------------------------------------------------ | :----------------------------------------------------------------------------------- | :-------------- | | +300 | 13.4% | (30.0%) | | +200 | 10.6% | (20.0%) | | +100 | 7.1% | (10.0%) | | -100 | N/A | (10.0%) | [Financial Statements and Supplementary Data](index=73&type=section&id=ITEM%208.%20FINANCIAL%20STATEMENTS%20AND%20SUPPLEMENTARY%20DATA) This section presents Wesbanco's audited consolidated financial statements, including balance sheets, income statements, and cash flows for 2018-2020, along with detailed notes on accounting policies, mergers, and regulatory matters, providing a comprehensive financial overview [Management's Report on Internal Control Over Financial Reporting](index=71&type=section&id=MANAGEMENT%27S%20REPORT%20ON%20INTERNAL%20CONTROL%20OVER%20FINANCIAL%20REPORTING) Wesbanco's management assessed the effectiveness of its internal control over financial reporting as of December 31, 2020, based on COSO criteria, concluding that it is effective - Wesbanco's management assessed the effectiveness of its internal control over financial reporting as of December 31, 2020, based on the COSO criteria, concluding that it is effective[443](index=443&type=chunk)[444](index=444&type=chunk) [Report of Ernst & Young LLP, Independent Registered Public Accounting Firm](index=72&type=section&id=Report%20of%20Ernst%20%26%20Young%20LLP%2C%20Independent%20Registered%20Public%20Accounting%20Firm) Ernst & Young LLP issued an unqualified opinion on Wesbanco's consolidated financial statements and the effectiveness of its internal control over financial reporting, identifying the Allowance for Credit Losses as a critical audit matter due to its complexity - Ernst & Young LLP issued an unqualified opinion on Wesbanco, Inc.'s consolidated financial statements as of December 31, 2020 and 2019, and for the three years ended December 31, 2020[456](index=456&type=chunk) - The firm also expressed an unqualified opinion on the effectiveness of Wesbanco's internal control over financial reporting as of December 31, 2020[447](index=447&type=chunk)[457](index=457&type=chunk) - The Allowance for Credit Losses (ACL) was identified as a critical audit matter due to the complexity of expected loss models and the high degree of subjectivity in evaluating management's qualitative factors, especially with the adoption of ASU 2016-13 (CECL)[458](index=458&type=chunk)[462](index=462&type=chunk)[463](index=463&type=chunk) [Consolidated Balance Sheets](index=75&type=section&id=WESBANCO%2C%20INC.%20CONSOLIDATED%20BALANCE%20SHEETS) Wesbanco's consolidated balance sheets show total assets of **$16.4 billion** and total deposits of **$12.4 billion** at December 31, 2020, with shareholders' equity at **$2.8 billion** Consolidated Balance Sheets (in thousands) | Asset/Liability | Dec 31, 2020 | Dec 31, 2019 | | :----------------------------------- | :----------- | :----------- | | Cash and due from banks | $905,447 | $234,796 | | Total securities | $2,722,069 | $3,257,654 | | Net portfolio loans | $10,603,406 | $10,215,556 | | Goodwill and other intangible assets, net | $1,163,091 | $1,149,153 | | Total Assets | $16,425,610 | $15,720,112 | | Total deposits | $12,429,373 | $11,004,006 | | Total borrowings | $983,244 | $1,897,846 | | Total Liabilities | $13,668,873 | $13,126,191 | | Total Shareholders' Equity | $2,756,737 | $2,593,921 | [Consolidated Statements of Income](index=76&type=section&id=WESBANCO%2C%20INC.%20CONSOLIDATED%20STATEMENTS%20OF%20INCOME) Wesbanco's consolidated statements of income show net interest income of **$479.5 million** and net income available to common shareholders of **$119.4 million** in 2020, with diluted EPS at **$1.77** Consolidated Statements of Income (in thousands) | Income/Expense | 2020 | 2019 | 2018 | | :----------------------------------- | :------- | :------- | :------- | | Total interest and dividend income | $541,277 | $484,253 | $414,957 | | Total interest expense | $61,797 | $84,349 | $67,721 | | Net interest income | $479,480 | $399,904 | $347,236 | | Provision for credit losses | $107,741 | $11,198 | $7,764 | | Total non-interest income | $128,185 | $116,716 | $100,276 | | Total non-interest expense | $354,845 | $312,208 | $265,224 | | Net income | $122,044 | $158,873 | $143,112 | | Net income available to common shareholders | $119,400 | $158,873 | $143,112 | | Diluted Earnings Per Common Share | $1.77 | $2.83 | $2.92 | [Consolidated Statements of Comprehensive Income](index=77&type=section&id=WESBANCO%2C%20INC.%20CONSOLIDATED%20STATEMENTS%20OF%20COMPREHENSIVE%20INCOME) Wesbanco's consolidated statements of comprehensive income show net income of **$122.0 million** and a total other comprehensive gain of **$30.2 million** in 2020, resulting in comprehensive income of **$152.2 million** Consolidated Statements of Comprehensive Income (in thousands) | Metric | 2020 | 2019 | 2018 | | :----------------------------------- | :------- | :------- | :------- | | Net income | $122,044 | $158,873 | $143,112 | | Net effect on other comprehensive income for the period (Debt securities available-for-sale) | $28,217 | $40,166 | $(7,209) | | Net effect on other comprehensive income for the period (Debt securities held-to-maturity) | $(25) | $(168) | $(188) | | Net effect on other comprehensive income for the period (Defined benefit plans) | $1,966 | $(926) | $2,084 | | Total other comprehensive gain (loss) | $30,158 | $39,072 | $(5,313) | | Comprehensive income | $152,202 | $197,945 | $137,799 | [Consolidated Statements of Changes in Shareholders' Equity](index=78&type=section&id=WESBANCO%2C%20INC.%20CONSOLIDATED%20STATEMENTS%20OF%20CHANGES%20IN%20SHAREHOLDERS%27%20EQUITY) Wesbanco's shareholders' equity increased to **$2.8 billion** at December 31, 2020, driven by net income, other comprehensive income, and preferred stock issuance, partially offset by common dividends and CECL adoption impact Consolidated Statements of Changes in Shareholders' Equity (in thousands) | Metric | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | | :----------------------------------- | :----------- | :----------- | :----------- | | Total Shareholders' Equity (Beginning Balance) | $2,593,921 | $1,978,827 | $1,395,321 | | Net income | $122,044 | $158,873 | $143,112 | | Other comprehensive income | $30,158 | $39,072 | $(5,313) | | Common dividends declared | $(85,815) | $(71,760) | $(57,951) | | Preferred dividends declared | $(2,644) | $— | $— | | Adoption of ASU 2016-13 | $(26,591) | $— | $— | | Issuance of preferred stock, net | $144,484 | $— | $— | | Treasury shares acquired | $(25,296) | $(10,298) | $(697) | | Total Shareholders' Equity (Ending Balance) | $2,756,737 | $2,593,921 | $1,978,827 | [Consolidated Statements of Cash Flows](index=79&type=section&id=WESBANCO%2C%20INC.%20CONSOLIDATED%20STATEMENTS%20OF%20CASH%20FLOWS) Wesbanco's consolidated statements of cash flows show a net increase in cash, cash equivalents, and restricted cash of **$670.7 million** in 2020, primarily driven by financing activities, with cash and equivalents ending at **$905.4 million** Consolidated Statements of Cash Flows (in thousands) | Activity | 2020 | 2019 | 2018 | | :----------------------------------- | :------- | :------- | :------- | | Net cash provided by operating activities | $59,606 | $163,363 | $191,891 | | Net cash provided by (used in) investing activities | $57,792 | $103,786 | $(51,859) | | Net cash provided by (used in) financing activities | $553,253 | $(201,539) | $(88,418) | | Net increase in cash, cash equivalents and restricted cash | $670,651 | $65,610 | $51,614 | | Cash, cash equivalents and restricted cash at end of the year | $905,447 | $234,796 | $169,186 | [NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES](index=80&type=section&id=NOTE%201.%20SUMMARY%20OF%20SIGNIFICANT%20ACCOUNTING%20POLICIES) Wesbanco adopted the CECL accounting standard on January 1, 2020, requiring a forward-looking 'expected loss' model for credit losses, while also applying fair value accounting for acquired loans and evaluating goodwill for impairment - Wesbanco adopted ASU 2016-13 (CECL) effective January 1, 2020, which requires a forward-looking 'expected loss' model for credit losses, resulting in earlier recognition of allowances[498](index=498&type=chunk)[555](index=555&type=chunk) - The CARES Act and Economic Aid Act provided temporary relief for loan modifications related to COVID-19, allowing Wesbanco to suspend TDR classification for qualifying loans and offer payment deferrals[504](index=504&type=chunk)[507](index=507&type=chunk) - Loans acquired in business combinations are recorded at fair value, with Purchased Credit-Deteriorated (PCD) loans having an allowance recognized on day one by adding it to the fair value[508](index=508&type=chunk)[509](index=509&type=chunk) - The allowance for credit losses is calculated using a Probability of Default (PD) / Loss Given Default (LGD) approach, discounted to net present value, incorporating macroeconomic forecasts and qualitative factors like COVID-19 impacts[515](index=515&type=chunk)[519](index=519&type=chunk) - Goodwill is not amortized but is evaluated for impairment annually, while finite-lived intangible assets are amortized over their estimated useful lives and tested for impairment when circumstances indicate[533](index=533&type=chunk) [NOTE 2. MERGERS AND ACQUISITIONS](index=88&type=section&id=NOTE%202.%20MERGERS%20AND%20ACQUISITIONS) Wesbanco completed the acquisition of Old Line Bancshares, Inc. (OLBK) for **$494.0 million** in 2019, recording **$231.8 million** in goodwill, and also completed acquisitions of Farmers Capital Bank Corporation and First Sentry Bancshares in 2018 - On November 22, 2019, Wesbanco completed the acquisition of Old Line Bancshares, Inc. (OLBK) for **$494.0 million**, issuing **13,351,837 shares** of common stock and recording **$231.8 million** in goodwill and **$32.9 million** in core deposit intangibles[560](index=560&type=chunk) - Wesbanco recorded merger-related expenses of **$6.5 million** and **$13.2 million** associated with the OLBK acquisition for the years ended December 31, 2020, and 2019, respectively[561](index=561&type=chunk) - The acquisition of Farmers Capital Bank Corporation (FFKT) on August 20, 2018, was valued at **$428.9 million**, resulting in **$223.3 million** in goodwill and **$37.4 million** in core deposit intangibles[564](index=564&type=chunk) - The acquisition of First Sentry Bancshares, Inc. (FTSB) on April 5, 2018, was valued at **$108.3 million**, resulting in **$67.7 million** in goodwill and **$8.1 million** in core deposit intangibles[566](index=566&type=chunk) [NOTE 3. EARNINGS PER COMMON SHARE](index=93&type=section&id=NOTE%203.%20EARNINGS%20PER%20COMMON%20SHARE) Wesbanco's diluted earnings per common share were **$1.77** in 2020, with average common shares outstanding increasing in 2019 primarily due to the issuance of **13,351,837 shares** for the OLBK acquisition - Diluted EPS calculations exclude options and Total Shareholder Return (TSR) plan shares if their effect would be antidilutive[570](index=570&type=chunk)[571](index=571&type=chunk) - The increase in average common shares outstanding in 2019 was primarily due to the issuance of **13,351,837 shares** for the OLBK acquisition[573](index=573&type=chunk) Earnings Per Common Share (in thousands, except shares and per share amounts) | Metric | 2020 | 2019 | 2018 | | :----------------------------------- | :------- | :------- | :------- | | Net income available to common shareholders | $119,400 | $158,873 | $143,112 | | Total average basic common shares outstanding | 67,260,796 | 56,108,084 | 48,889,041 | | Total diluted average common shares outstanding | 67,310,584 | 56,214,364 | 49,022,990 | | Earnings per common share—basic | $1.78 | $2.83 | $2.93 | | Earnings per common share—diluted | $1.77 | $2.83 | $2.92 | [NOTE 4. SECURITIES](index=94&type=section&id=NOTE%204.%20SECURITIES) Total investment securities decreased by **$535.3 million (16.4%)** in 2020 due to sales and calls, while net unrealized gains on available-for-sale securities increased to **$46.9 million**, and a **$0.2 million** allowance for credit losses was recognized on held-to-maturity securities upon CECL adoption - Total investment securities decreased by **$535.3 million (16.4%)** from December 31, 2019, to December 31, 2020, primarily due to sales of residential mortgage-backed securities and calls of municipal securities[270](index=270&type=chunk)[574](index=574&type=chunk) - Net unrealized gains on available-for-sale securities, net of tax, increased to **$46.9 million** at December 31, 2020, from **$20.7 million** at December 31, 2019[578](index=578&type=chunk) - Upon CECL adoption on January 1, 2020, Wesbanco recognized a **$0.2 million** allowance for credit losses on held-to-maturity securities, with ongoing quarterly analysis for expected credit losses[580](index=580&type=chunk) Fair Value and Amortized Cost of Debt Securities (in thousands) | Category | Dec 31, 2020 Amortized Cost | Dec 31, 2020 Fair Value | Dec 31, 2019 Amortized Cost | Dec 31, 2019 Fair Value | | :----------------------------------- | :-------------------------- | :-------------------- | :-------------------------- | :-------------------- | | Total available-for-sale debt securities | $1,916,658 | $1,978,136 | $2,369,416 | $2,393,558 | | Total held-to-maturity debt securities | $731,212 | $768,183 | $851,753 | $874,523 | | Total debt securities | $2,647,870 | $2,746,319 | $3,221,169 | $3,268,081 | [NOTE 5. LOANS AND THE ALLOWANCE FOR CREDIT LOSSES](index=96&type=section&id=NOTE%205.%20LOANS%20AND%20THE%20ALLOWANCE%20FOR%20CREDIT%20LOSSES) The allowance for credit losses for loans increased to **$185.8 million (1.72% of total portfolio loans)** at December 31, 2020, primarily due to the **$41.4 million** impact of CECL adoption, with no allowance on SBA-guaranteed PPP loans - The adoption of CECL on January 1, 2020, resulted in a **$41.4 million increase** to the allowance for credit losses, including a **$6.7 million** adjustment for Purchased Credit-Deteriorated (PCD) loans[585](index=585&type=chunk) - The allowance for credit losses for loans was **$185.8 million (1.72% of total portfolio loans)** at December 31, 2020, with no allowance on PPP loans due to their SBA guarantee[379](index=379&type=chunk)[589](index=589&type=chunk) Loan Portfolio Composition (in thousands) | Category | Dec 31, 2020 | Dec 31, 2019 | | :----------------------------------- | :----------- | :----------- | | Commercial re

Financial Data and Key Metrics Changes - The company reported net income available to common shareholders of $50.6 million and diluted earnings per share of $0.76, excluding merger and restructuring charges, with a year-over-year growth of 14.2% in pre-tax, pre-provision income to $64.8 million [7][24]. - Total assets increased by 4.5% to $16.4 billion, and portfolio loans rose by 5.1% to $10.8 billion, primarily due to participation in the SBA Payroll Protection Program [25]. - Total deposits grew by 13.0% year-over-year to $12.4 billion, driven by CARES Act stimulus and increased personal savings [27]. Business Line Data and Key Metrics Changes - Noninterest income for the fourth quarter was $32.7 million, a 6.1% increase year-over-year, mainly due to mortgage banking fees, which surged 84% year-over-year to $5.4 million [35]. - The efficiency ratio improved to 56.38% for the 12-month period ending December 31, 2020, reflecting effective cost management despite a 25% increase in size due to the Old Line acquisition [38]. Market Data and Key Metrics Changes - The company experienced strong deposit growth, with total demand deposits increasing by 25.8%, now representing approximately 56% of total deposits [27]. - Key credit quality metrics remained low, with annualized net loan charge-offs at two basis points for the quarter and six basis points year-to-date, favorable compared to peer averages [29]. Company Strategy and Development Direction - The company is focused on expense control and optimizing its financial center footprint, having consolidated 21 financial centers into nearby locations [19][16]. - The management emphasized a commitment to long-term growth strategies and community involvement, highlighting the successful integration of Old Line Bank and the launch of a Diversity and Inclusion initiative [10][15]. Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism regarding loan growth in the second half of 2021 as economic conditions improve and localities reopen [17]. - The company anticipates a rebound in commercial loan growth as businesses take advantage of revived economies, with expectations for organic growth opportunities [17][66]. Other Important Information - The company received several accolades in 2020, including being named one of the best banks in America by Forbes and recognized for customer satisfaction [12]. - The allowance for credit losses at December 31 was $185.8 million, or 1.72% of total loans, reflecting improved macroeconomic factors [32]. Q&A Session Summary Question: Plans for excess liquidity - Management indicated plans to reinvest $300 million into the securities portfolio in the first quarter, targeting yields around 1% [50][51]. Question: FHLB borrowings intentions - The company plans to reduce FHLB borrowings and not replace them in the first half of 2021, given the increase in deposits [53]. Question: Normalized reserve levels under CECL - Management suggested a normalized reserve level around 1% but noted it would depend on the pace of charge-offs and economic recovery [55][56]. Question: Buyback plans - Management expressed a cautious approach to re-entering the buyback plan, preferring to wait for more clarity on credit conditions [57]. Question: M&A appetite - The company does not feel a compelling need for M&A in 2021, focusing instead on integrating Old Line Bank and upgrading its core systems [62][64]. Question: Loan growth expectations - Management expects mid-single-digit loan growth in the latter half of 2021, with initial quarters likely remaining flat [66].

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2020 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number 000-08467 WESBANCO, INC. (Exact name of Registrant as specified in its charter) WEST VIRGINIA 55-0571723 (State of incorporation) (IR ...

WesBanco, Inc. (NASDAQ:WSBC) Q3 2020 Results Conference Call October 22, 2020 3:00 PM ET Company Participants John Iannone - Senior Vice President-Investor Relations Todd Clossin - President and Chief Executive Officer Bob Young - Senior Executive Vice President and Chief Financial Officer Conference Call Participants Casey Whitman - Piper Sandler Will Curtiss - Hovde Group Russell Gunther - DA Davidson Catherine Mealor - KBW Joe Plevelich - Bennington & Scattergood Steve Moss - B. Riley FBR Brody Preston ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2020 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to (State of incorporation) (IRS Employer Identification No.) 1 Bank Plaza, Wheeling, WV 26003 (Address of principal executive offices) (Zip Code) Registrant's tele ...

(Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM 10-Q For the quarterly period ended March 31, 2020 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number 000-08467 WESBANCO, INC. (Exact name of Registrant as specified in its charter) WEST VIRGINIA 55-0571723 (State of incorporation) (IRS Em ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM 10-K (Mark One) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2019 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number 000-08467 WESBANCO, INC. (Exact name of Registrant as specified in its charter) | Title of each class | Trading Symbol | Name of each Exchange ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2019 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number 000-08467 WESBANCO, INC. (Exact name of Registrant as specified in its charter) WEST VIRGINIA 55-0571723 1 Bank Plaza, Wheeling, WV 2 ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM 10-Q (Mark One) ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number 000-08467 WESBANCO, INC. (Exact name of Registrant as specified in its charter) WEST VIRGINIA 55-0571723 (State of incorporation) (IRS Employer Identification No.) 1 Bank Plaza, Wheeling, WV 26003 (Address of principal executive offices) (Zip Code) ☒ QUARTERLY REPORT PURSU ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2019 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number 000-08467 WESBANCO, INC. (Exact name of Registrant as specified in its charter) WEST VIRGINIA 55-0571723 1 Bank Plaza, ...