WesBanco(WSBC) - 2021 Q4 - Annual Report

Financial Performance - As of December 31, 2021, Wesbanco's total assets were approximately $16.9 billion[12] - For the year ended December 31, 2021, Wesbanco declared cash dividends of approximately $95.8 million to its preferred and common shareholders[39] - Wesbanco's leverage ratio was 10.02% and the Bank's leverage ratio was 9.68% as of December 31, 2021[52] - Wesbanco Bank was classified as "well capitalized" as of December 31, 2021, allowing it to pay dividends without restrictions[40] - As of December 31, 2021, Wesbanco's Common Equity Tier 1 (CET1), Tier 1, and total capital to risk-adjusted assets ratios were 12.77%, 14.05%, and 15.91%, respectively, all exceeding minimum requirements[52] - Wesbanco Bank's CET1, Tier 1, and total capital to risk-adjusted assets ratios were 13.60%, 13.60%, and 14.31%, respectively, as of December 31, 2021[52] - The bank's total assets were above $15 billion as of December 31, 2021, thus it is no longer able to count trust preferred securities as Tier 1 capital[53] - The Federal Reserve requires banks to maintain a CET1 ratio of at least 4.5%, a Tier 1 capital ratio of at least 6%, and a total capital ratio of at least 8%[50] Regulatory Compliance - Wesbanco is subject to enhanced prudential supervision due to exceeding the $10 billion asset threshold, impacting its regulatory compliance[32] - The Dodd-Frank Act requires Wesbanco to act as a source of financial strength to its subsidiary bank, which may necessitate capital infusions during troubled times[38] - The Dodd-Frank Act has led to reforms affecting Wesbanco's businesses, including enhanced prudential requirements for risk management and capital[62] - Wesbanco's capital levels are monitored under the FDIC regulations, which impose restrictions on undercapitalized institutions[57] - The Dodd-Frank Act has led to numerous reforms in the U.S. financial system, impacting Wesbanco's operations through regulations on capital, liquidity, and risk management[62] - The Dodd-Frank Act requires annual company-run stress tests for bank holding companies with total consolidated assets greater than $100 billion, but Wesbanco is not subject to these rules as it has less than $100 billion in average total consolidated assets[68][69] - Wesbanco is not subject to the Federal Reserve's stress-test rules as it has less than $100 billion in average total consolidated assets[69] Community Engagement - Wesbanco made over $0.9 million in philanthropic donations in support of communities across its footprint in the past year[30] - Wesbanco originated over $1.5 billion in community development loans in the past five years, supporting financial needs in low-income communities[83] - Wesbanco Bank has received an "Outstanding" CRA rating from the FDIC for seven consecutive examinations, reflecting its commitment to community development[82] - Wesbanco's community development initiatives include partnerships with governmental and non-profit agencies to assist low- and moderate-income customers[83] - The bank has deployed hundreds of thousands of dollars in philanthropic donations to support local organizations[83] - Wesbanco Bank partners with governmental and non-profit agencies to provide special programs for low- and moderate-income customers[83] Workforce and Culture - Wesbanco employed 2,389 full-time equivalent employees, with an average tenure of over 9 years[24] - The turnover rate for Wesbanco's total employees in 2021 was 23.03%, while the turnover rate for officers was just 5.47%[25] - The company has a diverse workforce, with 9% of employees being minorities and 54% of officers being women[25] - Wesbanco's corporate culture emphasizes customer and employee-centric values, aiming to build long-term relationships through effective service[26] Market Position and Competition - The company has faced significant competitive pressure due to consolidation within the financial services industry and the expansion of larger financial institutions[31] - Wesbanco's trust and investment services segment faces intense competition from various financial institutions, including banks and investment firms, which may impact its market share and profit potential[31] - Wesbanco's expansion into larger metropolitan markets has led to increased competition from established banks with larger customer bases[31] Regulatory Changes and Impact - The Durbin Amendment caps debit card interchange fees at $0.21 plus an additional 0.05% of the transaction value, affecting Wesbanco's interchange income since July 2019[67] - The Volcker Rule limits Wesbanco's ability to engage in proprietary trading and invest in hedge funds, with compliance requirements adjusted as of January 1, 2020[64] - Wesbanco has gross consolidated trading assets and liabilities below $1 billion, qualifying for the limited trading compliance presumption under the Volcker Rule[64] - The CFPB's regulations, resulting from the Dodd-Frank Act, have increased compliance requirements for Wesbanco, particularly in mortgage lending and consumer protection laws[79] - The TRID rules, effective October 3, 2015, have created significant compliance challenges for Wesbanco in real estate lending transactions[80] Financial Services and Products - Wesbanco's subsidiaries include Wesbanco Insurance Services and Wesbanco Securities, which provide a range of financial services[13][14] - Wesbanco Securities provides customer protection for securities accounts up to $500,000, with a cash balance limit of $250,000[85] - Wesbanco has developed innovative loan and deposit products to meet the financial needs of its customers[83] - Wesbanco adopted the CECL methodology effective January 1, 2020, and opted for a five-year transition period to manage its regulatory capital[78] Government Programs - The CARES Act established the Paycheck Protection Program (PPP) to provide guaranteed loans to eligible businesses during COVID-19, which Wesbanco participates in[75] - The Economic Aid Act extended the PPP loan program, providing additional funds and flexibility for borrowers affected by the pandemic[75] - The Economic Aid Act extended the relief for loan modifications related to COVID-19 until December 31, 2021, allowing banks to assist affected borrowers[76]