WESBANCO REPSTG(WSBCP) - 2025 Q2 - Quarterly Report

FORM 10-Q Filing Information Registrant Information Identifies Wesbanco, Inc. as the registrant for the Form 10-Q, detailing its corporate information and contact details - Wesbanco, Inc. filed a Quarterly Report on Form 10-Q for the period ended June 30, 2025[2] - The registrant's principal executive offices are located at 1 Bank Plaza, Wheeling, WV 26003, with telephone number 304-234-9000[2] Securities and Filing Status Details Wesbanco's NASDAQ-listed securities, SEC filing compliance, large accelerated filer status, and outstanding common stock shares Securities Registered | Title of each class | Trading Symbol | Name of each exchange on which registered | | :------------------ | :------------- | :---------------------------------------- | | Common Stock $2.0833 Par Value | WSBC | NASDAQ Global Select Market | | Depositary Shares (each representing 1/40 interest in a share of 6.75% Fixed-Rate Reset Non-Cumulative Perpetual Preferred Stock, Series A) | WSBCP | NASDAQ Global Select Market | - The registrant has filed all required reports during the preceding 12 months and has been subject to filing requirements for the past 90 days (Yes ☑)[3] - Wesbanco, Inc. is classified as a Large accelerated filer (☑)[3] - As of July 31, 2025, there were 95,989,823 shares of Wesbanco, Inc. common stock, $2.0833 par value, outstanding[3] TABLE OF CONTENTS PART I - FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS Presents Wesbanco's unaudited interim consolidated financial statements and detailed notes on accounting policies and specific financial items Consolidated Balance Sheets Wesbanco's balance sheets show significant asset and liability growth from December 2024 to June 2025, primarily due to the PFC acquisition Consolidated Balance Sheet Highlights (in thousands) | Item | June 30, 2025 | December 31, 2024 | Change ($) | Change (%) | | :------------------------------------ | :------------ | :---------------- | :--------- | :--------- | | ASSETS | | | | | | Cash and due from banks | $1,157,030 | $568,137 | $588,893 | 103.6% | | Total securities | $4,389,961 | $3,412,259 | $977,702 | 28.7% | | Net portfolio loans | $18,604,760 | $12,517,663 | $6,087,097 | 48.6% | | Total Assets | $27,571,576 | $18,684,298 | $8,887,278 | 47.6% | | LIABILITIES | | | | | | Total deposits | $21,154,556 | $14,133,717 | $7,020,839 | 49.7% | | Total borrowings | $2,211,428 | $1,471,381 | $740,047 | 50.3% | | Total Liabilities | $23,752,356 | $15,894,017 | $7,858,339 | 49.4% | | SHAREHOLDERS' EQUITY | | | | | | Total Shareholders' Equity | $3,819,220 | $2,790,281 | $1,028,939 | 36.9% | Consolidated Statements of Income Wesbanco's income statements show substantial net income growth for Q2 and H1 2025, driven by higher net interest and non-interest income, despite increased non-interest expenses Consolidated Statements of Income Highlights (in thousands, except per share amounts) | Item | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :------------------------------------ | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Total interest and dividend income | $336,382 | $202,993 | $589,614 | $398,327 | | Total interest expense | $119,613 | $86,400 | $214,326 | $167,767 | | NET INTEREST INCOME | $216,769 | $116,593 | $375,288 | $230,560 | | Provision for credit losses | $3,218 | $10,541 | $72,101 | $14,555 | | Total non-interest income | $43,957 | $31,355 | $78,622 | $61,984 | | Total non-interest expense | $186,535 | $102,392 | $320,500 | $199,585 | | Net income | $57,415 | $28,916 | $48,423 | $64,609 | | Net income available to common shareholders | $54,884 | $26,385 | $43,360 | $59,546 | | Basic EPS | $0.57 | $0.44 | $0.50 | $1.00 | | Diluted EPS | $0.57 | $0.44 | $0.50 | $1.00 | | Dividends Declared Per Common Share | $0.37 | $0.36 | $0.74 | $0.72 | Consolidated Statements of Comprehensive Income Wesbanco's comprehensive income increased significantly for Q2 and H1 2025, primarily due to positive unrealized gains on available-for-sale debt securities Consolidated Statements of Comprehensive Income Highlights (in thousands) | Item | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :------------------------------------ | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Net income | $57,415 | $28,916 | $48,423 | $64,609 | | Net change in unrealized gains (losses) on debt securities available-for-sale | $24,533 | $(210) | $61,558 | $(11,113) | | Total other comprehensive income (loss) | $17,066 | $(286) | $44,988 | $(8,515) | | Comprehensive income | $74,481 | $28,630 | $93,411 | $56,094 | Consolidated Statements of Changes in Shareholders' Equity Wesbanco's shareholders' equity increased substantially from December 2024 to June 2025, driven by the PFC acquisition and positive other comprehensive income Changes in Shareholders' Equity Highlights (in thousands) | Item | December 31, 2024 | June 30, 2025 | | :------------------------------------ | :---------------- | :------------ | | Total Shareholders' Equity | $2,790,281 | $3,819,220 | | Net Income | — | $48,423 | | Other comprehensive income | — | $44,988 | | Common dividends declared | — | $(70,393) | | Preferred dividends declared | — | $(5,063) | | Stock issued for PFC acquisition | — | $1,007,845 | - Total Shareholders' Equity increased by $1,028,939 thousand from December 31, 2024, to June 30, 2025, primarily due to the PFC acquisition[14] Consolidated Condensed Statements of Cash Flows Wesbanco's cash flows for H1 2025 show a significant net increase in cash, driven by investing and financing activities, including the PFC acquisition Consolidated Condensed Statements of Cash Flows Highlights (in thousands) | Item | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :------------------------------------ | :--------------------------- | :--------------------------- | | NET CASH PROVIDED BY OPERATING ACTIVITIES | $78,627 | $82,830 | | Net cash provided by (used in) investing activities | $262,481 | $(529,763) | | Net cash provided by financing activities | $247,785 | $338,339 | | Net increase (decrease) in cash, cash equivalents and restricted cash | $588,893 | $(108,594) | | Cash, cash equivalents and restricted cash at end of the period | $1,157,030 | $486,789 | - Net cash received from the PFC acquisition contributed $200,454 thousand to investing activities in 2025[16] - Increase in deposits provided $153,941 thousand in financing activities in 2025[16] Notes to Consolidated Financial Statements Provides detailed explanations and disclosures for Wesbanco's unaudited interim financial information, covering accounting policies, acquisitions, and specific financial items NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Outlines Wesbanco's basis of presentation for interim financial statements and details recent accounting pronouncements, none expected to have a material impact - Interim financial statements are prepared in accordance with U.S. GAAP for interim financial information and SEC instructions, and should be read with the 2024 Annual Report on Form 10-K[18] - Recent ASUs (2025-04, 2025-03, 2025-01, 2024-03, 2024-04, 2024-01, 2023-09, 2023-07, 2023-06, 2023-05) are not expected to have a material impact on the Consolidated Financial Statements, but some will result in additional disclosures[21][22][23] - ASU 2023-07, 'Improvements to Reportable Segment Disclosures,' effective for fiscal years beginning after December 15, 2023, resulted in additional disclosures related to segment reporting[29] NOTE 2. MERGERS AND ACQUISITIONS Details Wesbanco's $1.0 billion acquisition of Premier Financial Corp. (PFC) on February 28, 2025, expanding assets and market share, and related financial impacts - Wesbanco acquired Premier Financial Corp. (PFC) on February 28, 2025, valued at $1.0 billion[33] - The acquisition added approximately $7.9 billion in assets (excluding goodwill/intangibles), including $5.9 billion in portfolio loans and $1.2 billion in investment securities[33] PFC Acquisition Financial Impact (in thousands) | Item | February 28, 2025 | | :------------------------------------ | :---------------- | | Total purchase price | $1,007,983 | | Goodwill recognized | $476,175 | | Core deposit and other intangible assets acquired | $158,406 | | Merger-related expenses (3 months ended June 30, 2025) | $32,500 | | Merger-related expenses (6 months ended June 30, 2025) | $53,400 | - PFC shareholders represent approximately 30% of Wesbanco's voting interests post-acquisition[33] NOTE 3. EARNINGS PER COMMON SHARE Details Wesbanco's EPS calculation, showing an increase for Q2 but decrease for H1 2025, primarily due to increased average common shares outstanding Earnings Per Common Share (EPS) (except shares and per share amounts) | Item | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :------------------------------------ | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Net income available to common shareholders | $54,884 | $26,385 | $43,360 | $59,546 | | Basic EPS | $0.57 | $0.44 | $0.50 | $1.00 | | Diluted EPS | $0.57 | $0.44 | $0.50 | $1.00 | | Average Basic Common Shares Outstanding | 95,744,980 | 59,521,872 | 86,339,970 | 59,452,315 | | Average Diluted Common Shares Outstanding | 95,808,310 | 59,656,429 | 86,466,701 | 59,592,960 | - The increase in average shares outstanding is due to a $200 million common equity capital raise (7,272,728 shares) on August 1, 2024, and 28,738,104 shares issued for the PFC acquisition on February 28, 2025[55] NOTE 4. SECURITIES Wesbanco's total debt securities increased to $4.23 billion at June 30, 2025, driven by the PFC acquisition and new purchases, with decreased unrealized losses Debt Securities Portfolio (in thousands) | Item | June 30, 2025 (Fair Value) | December 31, 2024 (Fair Value) | Change ($) | Change (%) | | :------------------------------------ | :--------------------------- | :--------------------------- | :--------- | :--------- | | Available-for-sale debt securities | $3,222,819 | $2,246,072 | $976,747 | 43.5% | | Held-to-maturity debt securities (fair value) | $1,006,110 | $1,006,817 | $(707) | (0.1%) | | Total debt securities (fair value) | $4,228,929 | $3,252,889 | $976,040 | 30.0% | | Gross Unrealized Losses (Available-for-sale) | $(242,166) | $(295,419) | $53,253 | (18.0%) | - Proceeds from sales of available-for-sale securities for the six months ended June 30, 2025, totaled $873.8 million, with no sales in the prior year period[62] - Net unrealized losses on available-for-sale securities, net of tax, decreased from $223.8 million at December 31, 2024, to $178.5 million at June 30, 2025[62] - Wesbanco does not believe the securities with unrealized losses are impaired due to credit quality, as substantially all are investment grade and paying as contracted[66] NOTE 5. LOANS AND THE ALLOWANCE FOR CREDIT LOSSES Total portfolio loans increased by 48.8% to $18.83 billion at June 30, 2025, due to the PFC acquisition, with a higher allowance for credit losses and non-performing loans Loan Portfolio Composition (in thousands) | Loan Category | June 30, 2025 | December 31, 2024 | Change ($) | Change (%) | | :------------------------------------ | :------------ | :---------------- | :--------- | :--------- | | Commercial real estate: Land and construction | $1,732,088 | $1,352,083 | $379,995 | 28.1% | | Commercial real estate: Improved property | $8,868,122 | $5,974,598 | $2,893,524 | 48.4% | | Commercial and industrial | $2,819,096 | $1,787,277 | $1,031,819 | 57.7% | | Residential real estate | $3,939,796 | $2,520,086 | $1,419,710 | 56.3% | | Home equity | $1,052,334 | $821,110 | $231,224 | 28.2% | | Consumer | $417,190 | $201,275 | $215,915 | 107.3% | | Total portfolio loans | $18,828,626 | $12,656,429 | $6,172,187 | 48.8% | Allowance for Credit Losses (ACL) (in thousands) | Item | June 30, 2025 | December 31, 2024 | Change ($) | Change (%) | | :------------------------------------ | :------------ | :---------------- | :--------- | :--------- | | Total allowance for credit losses - loans | $223,866 | $138,766 | $85,100 | 61.3% | | Total allowance for credit losses - loan commitments | $6,168 | $6,120 | $48 | 0.8% | | Total ACL - loans and loan commitments | $230,034 | $144,886 | $85,148 | 58.8% | Nonperforming Loans and Criticized/Classified Loans (in thousands) | Item | June 30, 2025 | December 31, 2024 | Change ($) | Change (%) | | :------------------------------------ | :------------ | :---------------- | :--------- | :--------- | | Total non-performing loans | $84,319 | $39,752 | $44,567 | 112.1% | | Non-performing loans/total portfolio loans | 0.45% | 0.31% | 0.14% | 45.2% | | Total commercial loans (Pass) | $12,736,042 | $8,759,289 | $3,976,753 | 45.4% | | Total commercial loans (Criticized - compromised) | $531,415 | $242,000 | $289,415 | 119.6% | | Total commercial loans (Classified - substandard) | $151,849 | $112,669 | $39,180 | 34.8% | - The increase in ACL was primarily driven by the initial allowance on loans acquired in the PFC transaction ($20.2 million) and adjustments in regional macroeconomic factors[70][72] NOTE 6. GOODWILL AND OTHER INTANGIBLE ASSETS Goodwill and other intangible assets increased significantly at June 30, 2025, primarily due to the PFC acquisition, with no impairment indicated Goodwill and Other Intangible Assets (in thousands) | Item | June 30, 2025 | December 31, 2024 | Change ($) | Change (%) | | :------------------------------------ | :------------ | :---------------- | :--------- | :--------- | | Goodwill | $1,600,000 | $1,100,000 | $500,000 | 45.5% | | Net carrying amount of other intangible assets | $172,233 | $27,255 | $144,978 | 531.9% | | Amortization of intangible assets (3 months) | $9,204 | $2,072 | $7,132 | 344.2% | | Amortization of intangible assets (6 months) | $13,427 | $4,164 | $9,263 | 222.5% | - The PFC acquisition contributed $476.2 million in goodwill and $151.5 million in core deposit intangibles to the Community Banking segment, and $6.9 million in customer list intangibles to the Trust and Investment Services segment[98] - No indications of impairment were found for goodwill or other intangible assets as of June 30, 2025[98] NOTE 7. INVESTMENTS IN LIMITED PARTNERSHIPS Wesbanco's investments in tax-advantaged limited partnerships increased to $79.8 million at June 30, 2025, with rising amortization and unfunded commitments Investments in Limited Partnerships (in thousands) | Item | June 30, 2025 | December 31, 2024 | Change ($) | Change (%) | | :------------------------------------ | :------------ | :---------------- | :--------- | :--------- | | Investments in tax-advantaged limited partnerships | $79,800 | $38,200 | $41,600 | 108.9% | | Unconditional unfunded equity commitments | $33,200 | $19,000 | $14,200 | 74.7% | | Amortization (3 months) | $3,000 | $1,200 | $1,800 | 150.0% | | Amortization (6 months) | $4,900 | $2,300 | $2,600 | 113.0% | | Projected tax benefits for 2025 | $10,300 | — | — | — | - Wesbanco is a limited partner in several tax-advantaged limited partnerships, primarily for low-income housing investment tax credit projects, accounted for using the equity method[101] NOTE 8. DERIVATIVES AND HEDGING ACTIVITIES Wesbanco uses interest rate swaps and caps with commercial customers, economically hedged by third-party derivatives, with notional amounts increasing to $2.1 billion - Wesbanco executes interest rate swaps and caps with commercial customers, which are economically hedged by offsetting third-party swaps, with changes in fair value recognized directly in earnings[105] Derivative Financial Instruments (in thousands) | Item | June 30, 2025 (Notional Amount) | December 31, 2024 (Notional Amount) | Change ($) | Change (%) | | :------------------------------------ | :------------------------------ | :------------------------------ | :--------- | :--------- | | Customer interest rate swaps and caps | $2,108,303 | $1,906,520 | $201,783 | 10.6% | | Forward TBA contracts | $173,000 | $29,000 | $144,000 | 496.6% | | Total derivative assets (fair value) | $66,471 | $72,458 | $(5,987) | (8.3%) | | Total derivative liabilities (fair value) | $68,163 | $72,245 | $(4,082) | (5.7%) | Effect of Derivative Instruments on Income Statement (in thousands) | Item | 3 Months Ended June 30, 2025 (Gain/(Loss)) | 3 Months Ended June 30, 2024 (Gain/(Loss)) | | :------------------------------------ | :---------------------------------------- | :---------------------------------------- | | Interest rate swaps and caps | $(677) | $9 | | Interest rate lock commitments | $310 | $(90) | | Forward TBA contracts | $(538) | $47 | | Total | $(905) | $(34) | NOTE 9. BENEFIT PLANS Wesbanco's Defined Benefit Pension Plan reported net periodic pension income for Q2 and H1 2025, covering employees hired before August 2007, with no voluntary contribution expected Net Periodic Pension Income (in thousands) | Item | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :------------------------------------ | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Service cost – benefits earned during year | $267 | $330 | $531 | $660 | | Interest cost on projected benefit obligation | $766 | $1,603 | $1,524 | $3,206 | | Expected return on plan assets | $(1,603) | $(2,599) | $(3,188) | $(5,198) | | Net periodic pension income | $(626) | $(653) | $(1,246) | $(1,307) | - The Plan covers employees hired on or before August 1, 2007, and Wesbanco does not expect to make a voluntary contribution in 2025, leveraging its $64.7 million available credit balance[117] NOTE 10. FAIR VALUE MEASUREMENT Wesbanco measures financial assets and liabilities at fair value using Level 1, 2, and 3 inputs, with investment securities and derivatives measured recurringly Recurring Fair Value Measurements (in thousands) | Item | June 30, 2025 (Total Fair Value) | Level 1 | Level 2 | Level 3 | | :------------------------------------ | :--------------------------- | :------ | :------ | :------ | | Equity securities | $29,538 | $29,538 | $— | $— | | Available-for-sale debt securities | $3,222,819 | $195,512 | $3,025,354 | $1,953 | | Loans held for sale | $123,019 | $— | $123,019 | $— | | Other assets - interest rate swaps | $64,943 | $— | $64,943 | $— | | Other liabilities - interest rate swaps | $66,526 | $— | $66,526 | $— | Nonrecurring Fair Value Measurements (in thousands) | Item | June 30, 2025 (Total Fair Value) | Level 1 | Level 2 | Level 3 | | :------------------------------------ | :--------------------------- | :------ | :------ | :------ | | Collateral dependent loans | $18,997 | $— | $— | $18,997 | | Other real estate owned and repossessed assets | $958 | $— | $— | $958 | - The fair value of net loans is estimated using a discounted cash flow methodology, taking into account interest rates, credit risk, and market factors, and is classified within Level 3 due to significant judgment in evaluating credit quality[137] NOTE 11. REVENUE RECOGNITION Details Wesbanco's revenue recognition practices for ASC 606-scoped streams like trust fees and service charges, noting no significant judgments - Revenue streams in scope of ASC 606 include trust fees, service charges on deposits, digital banking income, net swap fee and valuation income, mortgage banking income, and net gain on other real estate owned and other assets[145] - Interest income, net securities gains, and bank-owned life insurance are not within the scope of ASC 606[145] Revenue Streams and Recognition (in thousands) | Revenue Stream | Point of Revenue Recognition | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | | :------------------------------------ | :--------------------------- | :--------------------------- | :--------------------------- | | Trust fees | Over time | $9,657 | $7,303 | | Service charges on deposits | At a point in time and over time | $10,484 | $7,111 | | Digital banking income | At a point in time | $7,325 | $5,040 | | Net securities brokerage revenue | At a point in time and over time | $3,348 | $2,601 | | Mortgage banking income | At a point in time | $2,364 | $1,069 | NOTE 12. COMPREHENSIVE INCOME/(LOSS) Accumulated other comprehensive income (loss) shifted from a loss of $(218.6) million to $(173.6) million, driven by unrealized gains on available-for-sale debt securities Accumulated Other Comprehensive Income/(Loss) (in thousands) | Item | December 31, 2024 | June 30, 2025 | | :------------------------------------ | :---------------- | :------------ | | Balance at period end | $(218,632) | $(173,644) | | Unrealized Gains (Losses) on Debt Securities Available-for-Sale | $(223,756) | $(178,493) | | Defined Benefit Plans | $5,124 | $4,849 | | Other comprehensive income before reclassifications (6 months) | — | $45,567 | | Amounts reclassified from accumulated other comprehensive income (6 months) | — | $(579) | - The period change in accumulated other comprehensive income was $44.988 million for the six months ended June 30, 2025, compared to a loss of $(8.515) million in the prior year[147] NOTE 13. COMMITMENTS AND CONTINGENT LIABILITIES Wesbanco's off-balance sheet credit arrangements increased to $6.2 billion at June 30, 2025, with a slight rise in ACL for commitments, and no material loss expected from legal proceedings Commitments and Contingent Liabilities (in thousands) | Item | June 30, 2025 | December 31, 2024 | Change ($) | Change (%) | | :------------------------------------ | :------------ | :---------------- | :--------- | :--------- | | Lines of credit | $5,059,269 | $3,960,185 | $1,099,084 | 27.8% | | Loans approved but not closed | $512,141 | $365,529 | $146,612 | 40.1% | | Overdraft limits | $548,175 | $387,591 | $160,584 | 41.4% | | Letters of credit | $55,513 | $47,879 | $7,634 | 15.9% | | Contingent obligations and other guarantees | $33,080 | $16,574 | $16,506 | 99.6% | | Allowance for credit losses (commitments) | $6,200 | $6,100 | $100 | 1.6% | - Wesbanco uses the same credit policies for commitments and conditional obligations as for other lending, and many commitments are expected to expire without being drawn upon[148] - Management does not believe a material loss related to pending or threatened legal proceedings is reasonably possible[151] NOTE 14. BUSINESS SEGMENTS Wesbanco operates two segments: Community Banking and Trust and Investment Services, with Community Banking dominating and both showing revenue growth, largely due to the PFC acquisition - Wesbanco operates two reportable segments: Community Banking and Trust and Investment Services[152] - The Community Banking segment offers a wide range of banking products and services, while the Trust and Investment Services segment offers trust services and alternative investment products[152] Segment Total Revenues (in thousands) | Segment | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :------------------------------------ | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Community Banking | $253,892 | $135,193 | $374,550 | $272,796 | | Trust and Investment Services | $8,917 | $6,258 | $16,680 | $13,312 | | Corporate Other | $(5,301) | $(4,044) | $(9,421) | $(8,119) | | Totals | $257,508 | $137,407 | $381,809 | $277,989 | - The market value of trust assets totaled approximately $7.2 billion at June 30, 2025, up from $5.6 billion at June 30, 2024[153] ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Provides an overview of Wesbanco's financial performance and condition for Q2 and H1 2025, highlighting the PFC acquisition's impact on income, assets, expenses, and capital FORWARD-LOOKING STATEMENTS Cautions that actual results may differ from forward-looking statements due to various risks, including economic conditions and regulatory actions, with no duty to update - Forward-looking statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995[175] - Risks and uncertainties include changing economic conditions, interest rate changes, credit risk, regulatory actions, cybersecurity breaches, and competitive conditions[175] - Wesbanco does not assume any duty to update forward-looking statements[175] OVERVIEW Wesbanco is a multi-state bank holding company whose operations are significantly influenced by economic factors, regulatory policies, and competition affecting business volumes - Wesbanco operates through 251 branches and 270 ATM machines across seven states, offering retail banking, corporate banking, trust services, brokerage, mortgage banking, and insurance[176] - Business is impacted by market interest rates, federal monetary and regulatory policies, local/regional economic conditions, and competition affecting business volumes, deposit levels, and loan levels[176] ACQUISITION Wesbanco completed its strategic acquisition of Premier Financial Corp. (PFC) on February 28, 2025, significantly expanding its operations - Wesbanco completed its acquisition of Premier Financial Corp. (PFC) on February 28, 2025[177] - Additional information regarding the acquisition can be found in Note 2, 'Mergers and Acquisitions'[177] APPLICATION OF CRITICAL ACCOUNTING POLICIES AND ESTIMATES Wesbanco's critical accounting policies and estimates for Q2 2025 remain consistent with its 2024 Annual Report, indicating no changes in significant judgments - Critical accounting policies and estimates for June 30, 2025, are unchanged from the disclosures in the 2024 Annual Report on Form 10-K[178] RESULTS OF OPERATIONS Wesbanco's results for Q2 and H1 2025 show significant growth in net income and net interest income, driven by the PFC acquisition and organic growth, despite rising expenses EARNINGS SUMMARY Wesbanco reported a significant increase in Q2 2025 net income available to common shareholders, driven by the PFC acquisition, organic loan growth, and higher yields Earnings Summary (in thousands, except per share amounts) | Item | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :------------------------------------ | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Net income available to common shareholders (GAAP) | $54,884 | $26,385 | $43,360 | $59,546 | | Diluted EPS (GAAP) | $0.57 | $0.44 | $0.50 | $1.00 | | Adjusted net income available to common shareholders (Non-GAAP) | $87,318 | $29,369 | $138,528 | $62,530 | | Adjusted diluted EPS (Non-GAAP) | $0.91 | $0.49 | $1.60 | $1.05 | - Net interest income increased $100.2 million (85.9%) in Q2 2025 compared to Q2 2024, driven by the PFC acquisition, organic loan growth, and higher yields[180] - Average loan balances increased 56.8% and average deposits increased 56.7% year-over-year, largely due to the PFC acquisition[180] - Non-interest expense, excluding restructuring and merger-related costs, increased $46.9 million (47.5%) year-over-year due to the PFC expense base[183] NET INTEREST INCOME Wesbanco's net interest income surged by 85.9% in Q2 2025, driven by the PFC acquisition, robust organic loan growth, and higher loan and securities yields Net Interest Income and Margin (in thousands) | Item | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :------------------------------------ | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Net interest income | $216,769 | $116,593 | $375,288 | $230,560 | | Net interest margin | 3.57% | 2.92% | 3.46% | 2.90% | | Total interest and dividend income | $336,382 | $202,993 | $589,614 | $398,327 | | Total interest expense | $119,613 | $86,400 | $214,326 | $167,767 | | Average loans, net of unearned income | $18,903,459 | $12,057,831 | $16,823,658 | $11,907,353 | | Average total deposits | $21,128,640 | $13,487,199 | $18,814,187 | $13,373,047 | | Cost of interest bearing deposits | 2.46% | 2.74% | 2.50% | 2.65% | - Purchase accounting accretion contributed 37 basis points to the Q2 2025 net interest margin, up from two basis points in Q2 2024[186] - Average loan balances increased $6.8 billion (56.8%) in Q2 2025, with loan yields increasing by 31 basis points to 6.16%[187] PROVISION FOR CREDIT LOSSES – LOANS AND LOAN COMMITMENTS The provision for credit losses significantly increased for H1 2025, primarily due to the initial provision for PFC acquired loans and economic outlook uncertainty Provision for Credit Losses and Loan Quality Metrics | Item | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :------------------------------------ | :--------------------------- | :--------------------------- | | Provision for credit losses | $72,101 | $14,555 | | Non-performing loans as % of total portfolio loans | 0.45% | 0.29% | | Criticized and classified loans as % of total portfolio loans | 3.63% | 2.15% | | Annualized net loan charge-offs | 0.09% | 0.14% | - The increase in provision was primarily due to the initial provision expense recorded for the PFC acquired loans[195] - Non-performing loans increased from 0.29% to 0.45% of total portfolio loans, and criticized and classified loans increased from 2.15% to 3.63% of total portfolio loans[196] NON-INTEREST INCOME Wesbanco's non-interest income increased by 40.2% in Q2 2025, primarily driven by the PFC acquisition, with growth in service charges, trust fees, and digital banking Non-Interest Income (in thousands) | Item | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | $ Change | % Change | | :------------------------------------ | :--------------------------- | :--------------------------- | :--------- | :--------- | | Trust fees | $9,657 | $7,303 | $2,354 | 32.2% | | Service charges on deposits | $10,484 | $7,111 | $3,373 | 47.4% | | Digital banking income | $7,325 | $5,040 | $2,285 | 45.3% | | Net swap fee and valuation income | $746 | $1,776 | $(1,030) | (58.0%) | | Net securities brokerage revenue | $3,348 | $2,601 | $747 | 28.7% | | Mortgage banking income | $2,364 | $1,069 | $1,295 | 121.1% | | Total non-interest income | $43,957 | $31,355 | $12,602 | 40.2% | - Total trust assets were $7.2 billion as of June 30, 2025, compared to $5.6 billion on June 30, 2024[199] - Mortgage banking income increased due to a 30% year-over-year increase in residential mortgage originations, reaching $243.5 million in Q2 2025[204] NON-INTEREST EXPENSE Non-interest expense, excluding merger costs, increased by 47.5% in Q2 2025, primarily due to the PFC acquisition, impacting salaries, benefits, and software costs Non-Interest Expense (in thousands) | Item | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | $ Change | % Change | | :------------------------------------ | :--------------------------- | :--------------------------- | :--------- | :--------- | | Salaries and wages | $60,153 | $43,991 | $16,162 | 36.7% | | Employee benefits | $18,857 | $10,579 | $8,278 | 78.2% | | Equipment and software | $17,140 | $10,457 | $6,683 | 63.9% | | FDIC insurance | $5,479 | $3,523 | $1,956 | 55.5% | | Amortization of intangible assets | $9,204 | $2,072 | $7,132 | 344.2% | | Restructuring and merger-related expenses | $41,056 | $3,777 | $37,279 | 987.0% | | Total non-interest expense | $186,535 | $102,392 | $84,143 | 82.2% | - Salaries and wages increased due to the addition of approximately 900 PFC employees[208] - Equipment and software costs increased due to the PFC acquisition and the additional cost of operating two core systems until conversion in mid-May[210] INCOME TAXES The provision for income taxes increased for Q2 2025 due to higher pretax income, but decreased for H1 2025, reflecting lower pretax income from increased credit loss provision Provision for Income Taxes (in thousands) | Item | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :------------------------------------ | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Provision for income taxes | $13,558 | $6,099 | $12,886 | $13,795 | | Effective tax rate (6 months) | 21.0% | 17.6% | — | — | - The decrease in the six-month provision was due to lower pretax income for the six months ended June 30, 2025, primarily from the increased provision for credit losses in Q1 2025 due to the PFC acquisition[216] - The effective tax rate for the first six months of 2025 was 21.0%, up from 17.6% in 2024, due to increased permanent differences from non-deductible merger and restructuring costs[185] FINANCIAL CONDITION Wesbanco's financial condition at June 30, 2025, reflects substantial growth in assets and equity, largely driven by the PFC acquisition, with detailed changes in balance sheet items - Total assets increased 47.6% to $27.57 billion, and shareholders' equity increased 36.9% to $3.8 billion at June 30, 2025, compared to December 31, 2024, primarily due to the PFC acquisition[217] - Total portfolio loans increased $6.2 billion (48.8%) to $18.8 billion, driven by $5.9 billion from PFC and $0.3 billion in organic growth[217] - Deposits increased $7.0 billion (49.7%), reflecting $6.9 billion from PFC and organic growth[217] SECURITIES Wesbanco's total investment securities grew by 28.7% to $4.39 billion at June 30, 2025, due to the PFC acquisition and new purchases, with decreased unrealized losses Composition of Securities (in thousands) | Item | June 30, 2025 | December 31, 2024 | Change ($) | Change (%) | | :------------------------------------ | :------------ | :---------------- | :--------- | :--------- | | Total available-for-sale debt securities | $3,222,819 | $2,246,072 | $976,747 | 43.5% | | Total held-to-maturity debt securities | $1,137,782 | $1,152,906 | $(15,124) | (1.3%) | | Total securities | $4,390,139 | $3,412,405 | $977,734 | 28.7% | | Gross unrealized securities losses | $374,200 | $441,700 | $(67,500) | (15.3%) | | Weighted average yield (total securities) | 3.25% | 2.67% | 0.58% | 21.7% | - The increase in securities was primarily due to $1.2 billion in securities acquired in the PFC acquisition and $903.9 million in purchases, offset by sales and maturities[220] - Wesbanco believes none of the unrealized losses on available-for-sale securities require an allowance for credit losses[221] LOANS AND CREDIT RISK Total portfolio loans increased by 48.8% to $18.83 billion at June 30, 2025, driven by the PFC acquisition and organic growth, with commercial real estate as the largest segment Composition of Loans (in thousands) | Loan Category | June 30, 2025 | December 31, 2024 | Change ($) | Change (%) | | :------------------------------------ | :------------ | :---------------- | :--------- | :--------- | | Total commercial real estate | $10,600,210 | $7,326,681 | $3,273,529 | 44.7% | | Commercial and industrial | $2,819,096 | $1,787,277 | $1,031,819 | 57.7% | | Residential real estate | $3,939,796 | $2,520,086 | $1,419,710 | 56.3% | | Total portfolio loans | $18,828,626 | $12,656,429 | $6,172,197 | 48.8% | - Organic loan growth, excluding PFC loans, was $0.3 billion (2.1%) since December 31, 2024[233] - Total loan commitments increased $1.4 billion (29.7%) to $6.2 billion, primarily due to increased lines of credit from the PFC acquisition[234] NON-PERFORMING ASSETS AND LOANS PAST DUE 90 DAYS OR MORE Non-performing assets significantly increased to $85.3 million at June 30, 2025, primarily due to a 112.1% rise in non-accrual loans, indicating deteriorating asset quality Non-Performing Assets (in thousands) | Item | June 30, 2025 | December 31, 2024 | Change ($) | Change (%) | | :------------------------------------ | :------------ | :---------------- | :--------- | :--------- | | Total non-performing loans | $84,319 | $39,752 | $44,567 | 112.1% | | Other real estate owned and repossessed assets | $958 | $852 | $106 | 12.4% | | Total non-performing assets | $85,277 | $40,604 | $44,673 | 110.0% | | Non-performing loans/total portfolio loans | 0.45% | 0.31% | 0.14% | 45.2% | | Non-performing assets/total assets | 0.31% | 0.22% | 0.09% | 40.9% | Past Due and Accruing Loans (in thousands) | Item | June 30, 2025 | December 31, 2024 | Change ($) | Change (%) | | :------------------------------------ | :------------ | :---------------- | :--------- | :--------- | | Total loans past due 90 days or more | $20,890 | $13,555 | $7,335 | 54.1% | | Total loans past due 30 to 89 days | $65,401 | $45,927 | $19,474 | 42.4% | | Total loans 30 days or more past due | $86,291 | $59,482 | $26,809 | 45.1% | ALLOWANCE FOR CREDIT LOSSES - LOANS AND LOAN COMMITMENTS The total allowance for credit losses increased by $85.1 million to $230.0 million at June 30, 2025, primarily due to the PFC acquisition and macroeconomic adjustments Allowance for Credit Losses (ACL) (in thousands) | Item | June 30, 2025 | December 31, 2024 | Change ($) | Change (%) | | :------------------------------------ | :------------ | :---------------- | :--------- | :--------- | | Total allowance for credit losses – loans and loan commitments | $230,034 | $144,886 | $85,148 | 58.8% | | Allowance for credit losses – loans | $223,866 | $138,766 | $85,100 | 61.3% | | Allowance for credit losses – loans as % of total portfolio loans | 1.19% | 1.10% | 0.09% | 8.2% | | Criticized and classified loans as % of total portfolio loans | 3.63% | 2.80% | 0.83% | 29.6% | - The increase in ACL was primarily driven by the PFC acquisition, with PFC loans accounting for $10.0 million of the allowance for collectively-evaluated loans[243][244] - The ACL calculation utilizes a probability-weighted approach incorporating baseline, upside, and downside economic scenarios, with national unemployment projected to increase to an average of 5.2% over the forecast period[244] DEPOSITS Total deposits increased by 49.7% to $21.15 billion at June 30, 2025, primarily due to acquired PFC deposits and organic growth, with uninsured deposits at 32% Deposits Composition (in thousands) | Deposit Type | June 30, 2025 | December 31, 2024 | $ Change | % Change | | :------------------------------------ | :------------ | :---------------- | :--------- | :--------- | | Non-interest bearing demand | $5,328,181 | $3,842,758 | $1,485,423 | 38.7% | | Interest bearing demand | $4,865,091 | $3,771,314 | $1,093,777 | 29.0% | | Money market | $4,825,154 | $2,429,977 | $2,395,177 | 98.6% | | Savings deposits | $3,192,943 | $2,362,736 | $830,207 | 35.1% | | Certificates of deposit | $2,943,187 | $1,726,932 | $1,216,255 | 70.4% | | Total deposits | $21,154,556 | $14,133,717 | $7,020,839 | 49.7% | - The net increase in deposits is attributable to acquired PFC deposits totaling $6.9 billion and organic growth[249] - Uninsured deposits totaled $6.7 billion (32% of total deposits) at June 30, 2025, with $2.4 billion of public funds deposits secured by pledged investment securities[265] BORROWINGS Total borrowings increased by 50.3% to $2.21 billion at June 30, 2025, primarily driven by a $750.0 million increase in FHLB borrowings and PFC acquisition-related debt Borrowings Composition (in thousands) | Borrowing Type | June 30, 2025 | December 31, 2024 | $ Change | % Change | | :------------------------------------ | :------------ | :---------------- | :--------- | :--------- | | Federal Home Loan Bank Borrowings | $1,750,000 | $1,000,000 | $750,000 | 75.0% | | Other short-term borrowings | $103,666 | $192,073 | $(88,407) | (46.0%) | | Subordinated debt and junior subordinated debt | $357,762 | $279,308 | $78,454 | 28.1% | | Total | $2,211,428 | $1,471,381 | $740,047 | 50.3% | - FHLB borrowings increased due to $1.2 billion in new advances and $500.0 million from the PFC acquisition, partially offset by maturities[251] - Subordinated and junior subordinated debt increased primarily from $49.1 million in subordinated debentures and $31.7 million in junior subordinated debt from the PFC acquisition[253] CAPITAL RESOURCES Wesbanco's shareholders' equity increased by $1.0 billion to $3.8 billion at June 30, 2025, primarily due to the PFC acquisition, with capital levels above regulatory minimums - Shareholders' equity increased $1.0 billion (36.9%) to $3.8 billion at June 30, 2025, driven by the PFC acquisition, net earnings, and other comprehensive gain[255] Risk-Based Capital Ratios (June 30, 2025) | Capital Ratio | Minimum | Well-Capitalized | Wesbanco, Inc. | Wesbanco Bank, Inc. | | :------------------------------------ | :------ | :--------------- | :------------- | :------------------ | | Tier 1 leverage | 4.00% | 5.00% | 8.66% | 9.41% | | Common equity Tier 1 | 4.50% | 6.50% | 9.90% | 11.55% | | Tier 1 capital to risk-weighted assets | 6.00% | 8.00% | 10.59% | 11.55% | | Total capital to risk-weighted assets | 8.00% | 10.00% | 13.40% | 12.65% | - Wesbanco increased its quarterly dividend rate to $0.37 per share in November 2024[255] - As of June 30, 2025, 918,391 shares remained authorized for repurchase under the current plan[256] LIQUIDITY RISK Wesbanco manages liquidity risk through liquid assets, borrowing capacity, and a stable deposit base, with $7.25 billion in expected liquidity sources and substantial FHLB credit - Liquidity risk is managed by maintaining liquid assets, sufficient borrowing capacity, and a stable core deposit base[261] Sources of Liquidity Expected Within the Next Year (in thousands) | Source | Amount | | :------------------------------------ | :------------ | | Cash and cash equivalents | $1,157,030 | | Securities with a maturity date within the next year and callable securities | $646,646 | | Projected payments and prepayments on mortgage-backed securities and collateralized mortgage obligations | $413,393 | | Accruing loans scheduled to mature | $2,645,570 | | Normal loan repayments | $2,262,934 | | Total sources of liquidity expected within the next year | $7,248,592 | - Available credit with the FHLB approximated $5.1 billion at June 30, 2025[266] - Uninsured deposits totaled $6.7 billion (32% of total deposits) at June 30, 2025, with $2.4 billion of public funds deposits secured by pledged investment securities[265] ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK Wesbanco's primary market risk is interest rate risk, managed by ALCO through earnings sensitivity and EVE models, with policy limits for net interest income exposure - Interest rate risk is Wesbanco's most significant market risk, managed by the ALCO using earnings sensitivity simulation and EVE models[275][276] Net Interest Income Sensitivity (Percentage Change from Base over One Year) | Immediate Change in Interest Rates (basis points) | June 30, 2025 | December 31, 2024 | ALCO Guidelines | | :------------------------------------------------ | :------------ | :---------------- | :-------------- | | +200 | 2.2% | 4.8% | (10.0%) | | +100 | 1.0% | 2.3% | (7.5%) | | -100 | (1.4%) | (2.2%) | (7.5%) | | -200 | (3.6%) | (5.1%) | (10.0%) | | -300 | (6.0%) | (8.4%) | (15.0%) | | -400 | N/A | (12.7%) | (20.0%) | Economic Value of Equity (EVE) Sensitivity (Percentage Change from Base over One Year) | Immediate Change in Interest Rates (basis points) | June 30, 2025 | December 31, 2024 | ALCO Guidelines | | :------------------------------------------------ | :------------ | :---------------- | :-------------- | | +200 | (2.7%) | 1.7% | (20.0%) | | +100 | (2.7%) | 0.5% | (10.0%) | | -100 | (0.2%) | (0.5%) | (10.0%) | | -200 | (3.4%) | (2.9%) | (20.0%) | | -300 | (9.7%) | (8.2%) | (30.0%) | | -400 | N/A | (16.2%) | (40.0%) | MARKET RISK Wesbanco's ALCO manages interest rate risk using earnings sensitivity and EVE models, with policy limits for net interest income exposure to interest rate changes - The ALCO's primary objective is to maximize net interest income within established policy parameters by managing balance sheet composition, duration, and market risk exposures[274] - Interest rate risk policy limits for net interest income exposure are between 7.5% and 20% reduction from the base model over a twelve-month period for 100-400 basis point interest rate changes[278] - Modeling assumptions for non-maturity deposit betas are 30% in up shocks and 40% in down shocks, reflecting the high interest rate environment[281] ITEM 4. CONTROLS AND PROCEDURES Wesbanco's CEO and CFO concluded that disclosure controls were effective as of June 30, 2025, with no material changes in internal control over financial reporting EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES Wesbanco's CEO and CFO determined disclosure controls and procedures were effective as of June 30, 2025, ensuring timely and accurate information reporting - CEO and CFO concluded that disclosure controls and procedures are effective as of June 30, 2025[286] - Controls ensure information is recorded, processed, summarized, and reported within SEC time periods and communicated to management[286] LIMITATIONS ON THE EFFECTIVENESS OF CONTROLS Management acknowledges inherent limitations in control systems, such as faulty judgments or circumvention, but designs them to provide reasonable assurance of objectives - Management does not expect disclosure controls and internal controls to prevent all errors and fraud[287] - Inherent limitations include faulty judgments, simple errors, circumvention by individuals or collusion, and management override[287] CHANGES IN INTERNAL CONTROLS No material changes occurred in Wesbanco's internal control over financial reporting during the fiscal quarter ended June 30, 2025 - No material changes in internal control over financial reporting occurred during the fiscal quarter ended June 30, 2025[288] PART II – OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS Wesbanco is involved in various legal and administrative proceedings in the ordinary course of business, with no material loss anticipated by management - Wesbanco is involved in various lawsuits, claims, investigations, and proceedings arising in the ordinary course of business[291] - Management does not believe that a material loss related to such proceedings or claims is reasonably possible[291] ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS Wesbanco has one active stock repurchase plan with 918,391 shares remaining, having purchased 94,902 shares in Q2 2025 for employee benefits and stock compensation - Wesbanco has one active stock repurchase plan, approved for 3.2 million shares, with 918,391 shares remaining as of June 30, 2025[292] Monthly Share Purchase Activity (Quarter Ended June 30, 2025) | Period | Total Number of Shares Purchased | Average Price Paid per Share | Total Number of Shares Purchased as Part of Publicly Announced Plans | | :------------------------------------ | :----------------------------- | :--------------------------- | :----------------------------------------------------------------- | | April 1, 2025 to April 30, 2025 | 36,437 | $31.24 | — | | May 1, 2025 to May 31, 2025 | 4,224 | $30.75 | — | | June 1, 2025 to June 30, 2025 | 54,241 | $31.98 | 51,198 | | Total | 94,902 | $31.64 | 51,198 | - Shares were repurchased for general corporate purposes, including employee benefit and dividend reinvestment plans, and to facilitate stock compensation transactions[292][293] ITEM 5. OTHER INFORMATION No directors or executive officers adopted, modified, or terminated any Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during Q2 2025 - No directors or executive officers adopted, modified, or terminated any Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during the three months ended June 30, 2025[294] ITEM 6. EXHIBITS Lists the exhibits filed with the Form 10-Q, including a separation agreement, CEO and CFO certifications, and Inline XBRL documents - Exhibits include a Separation Agreement, CEO and CFO Certifications, a Sarbanes-Oxley Act Certification, and Inline XBRL documents[297] SIGNATURES The report was duly signed on August 7, 2025, by Jeffrey H. Jackson (President and CEO) and Daniel K. Weiss, Jr. (Senior Executive VP and CFO) - The report was signed on August 7, 2025, by Jeffrey H. Jackson (President and CEO) and Daniel K. Weiss, Jr. (Senior Executive VP and CFO)[300]