WesBanco Announces Fourth Quarter 2024 Financial Results

Strong year-over-year loan growth of $1 billion, matched by deposit growth of $1 billion

WHEELING, WVa., Jan. 22, 2025 /PRNewswire/ -- WesBanco, Inc. ("WesBanco" or "Company") (Nasdaq: WSBC), a diversified, multi-state bank holding company, today announced net income and related earnings per share for the three and twelve months ended December 31, 2024. Net income available to common shareholders for the fourth quarter of 2024 was $47.1 million, with earnings per share of $0.70, compared to $32.4 million and $0.55 per share, respectively, for the fourth quarter of 2023. For the twelve months ended December 31, 2024, net income was $141.4 million, or $2.26 per share, compared to $148.9 million, or $2.51 per share, for the 2023 period. As noted in the following table, net income available to common shareholders, excluding after-tax restructuring and merger-related expenses, for the twelve months ended December 31, 2024 was $146.4 million, or $2.34 per share, as compared to $151.9 million, or $2.56 per share (non-GAAP measures).

Financial and operational highlights during the quarter ended December 31, 2024:

• Total loan growth was 8.7% year-over-year and 6.6% over the sequential quarter, annualized
  • Sequential quarter loan growth was fully funded through deposit growth
  • Total loans are up $1.0 billion compared to the prior year, driven by commercial loan growth
  • Total loans have grown at a compound annual rate of 9.1% since year-end 2021
• Deposits of $14.1 billion increased 7.3% year-over-year and 8.6% over the sequential quarter, annualized
  • Deposit growth, excluding certificates of deposit, increased 3.9% year-over-year and 7.7% over the sequential quarter, annualized
  • Total deposits are up $1.0 billion compared to the prior year, matching loan growth
  • Average loans to average deposits were 89.2%, providing continued capacity to fund loan growth
• Fee income increased $6.3 million, or 21%, year-over-year reflecting growth in net swap fee and valuation income, trust fees, and service charges on deposits, which include new products and services and treasury management fees
• Key credit quality metrics continued to remain at low levels and favorable to peer bank averages (based upon the prior four quarters for banks with total assets between $10 billion and $25 billion)
• The acquisition of Premier Financial Corp. remains on track, pending regulatory approvals
• WesBanco was recently named one of America's Best Regional Banks by Newsweek and a Most Trusted Company in America by Forbes

"2024 was an excellent year for WesBanco. We delivered strong loan growth of $1 billion, which was fully funded by deposit growth. We also announced our transformational merger with Premier Financial and continued to earn national recognitions for stability, trustworthiness, and workplace excellence," said Jeff Jackson, President and Chief Executive Officer, WesBanco. "We have achieved a compound annual loan growth rate of 9% over the past three years, raised $200 million of common equity and paid down higher-cost borrowings – key successes in our strategy to strengthen our balance sheet and net interest margin. Additionally, we continued to focus on cost-control while enhancing our wealth and treasury management businesses to deepen client relationships and drive positive operating leverage. With the pending Premier Financial merger and the strength of our proven strategies, we are well positioned to build on our momentum and continue delivering value for our customers and stakeholders."

Balance Sheet
As of December 31, 2024, portfolio loans were $12.7 billion, which increased $1.0 billion, or 8.7%, year-over-year driven by strong performance by our banking teams across our markets. Total commercial loans of $9.1 billion increased 10.7% year-over-year and 8.5% quarter-over-quarter annualized. Commercial loan growth continues to reflect the success of our strategies, as well as lower commercial real estate payoffs, which totaled approximately $350 million during 2024.

Deposits, as of December 31, 2024, were $14.1 billion, up 7.3% year-over-year and up 8.6% quarter-over-quarter annualized, reflecting the success of our efforts on deposit gathering and retention. The composition of total deposits continues to have some mix shift; however, total demand deposits continue to represent 54% of total deposits, with the non-interest bearing component representing 27%, which remains consistent with the percentage range prior to the pandemic. When excluding certificate of deposits, total deposits increased 3.9% year-over-year and 7.7% quarter-over-quarter annualized.

Federal Home Loan Bank ("FHLB") borrowings totaled $1.0 billion, at December 31, 2024, a decrease of 14.9%, or $175.0 million from September 30, 2024. This paydown was funded by deposit growth exceeding loan growth during the fourth quarter.

Credit Quality
As of December 31, 2024, total loans past due, criticized and classified loans, non-performing loans, and non-performing assets as percentages of the loan portfolio and total assets have remained low, from a historical perspective, and within a consistent range through the last three years. Total loans past due as a percent of the loan portfolio increased 3 basis points quarter-over-quarter to 0.47%, while non-performing assets as a percentage of total assets increased 6 basis points to 0.22% from the prior year period. The fourth quarter provision for credit losses decreased both year-over-year and sequentially to a negative provision of $0.1 million. The allowance for credit losses was $138.8 million at December 31, 2024, which provided a coverage ratio of 1.10%. The coverage ratio was down 3 basis points from prior quarter, primarily due to improvements in the macroeconomic forecasts related to lower unemployment assumptions and a more normalized yield curve, offsetting loan portfolio growth and office portfolio reserves. Excluded from the allowance for credit losses and related coverage ratio are fair market value adjustments on previously acquired loans representing 0.08% of total loans.

Net Interest Margin and Income
The fourth quarter margin of 3.03% improved 8 basis points compared to the third quarter and 1 basis point on a year-over-year basis, through a combination of higher loan and securities yields and lower funding costs. Deposit funding costs were 271 basis points for the fourth quarter of 2024, as compared to 285 basis points in the third quarter of 2024 and 234 basis points in the prior year period.  When including non-interest bearing deposits, deposit funding costs for the fourth quarter were 197 basis points.

Net interest income for the fourth quarter of 2024 was $126.5 million, an increase of $8.7 million, or 7.4% year-over-year, reflecting the impact of loan growth, higher loan and securities yields, and lower FHLB borrowings more than offsetting higher deposit funding costs. For the twelve months ended December 31, 2024, net interest income of $478.2 million decreased $3.1 million, or 0.7%, primarily due to higher funding costs offsetting the impact of loan growth and higher loan and securities yields in the year-to-date period.

Non-Interest Income
For the fourth quarter of 2024, non-interest income of $36.4 million increased $6.3 million, or 21.0%, from the fourth quarter of 2023 due to higher net swap fee and valuation income, service charges on deposits, and trust fees. Gross swap fees were $1.3 million in the fourth quarter, compared to $2.2 million in the prior year period, while fair value adjustments were $1.9 million compared to a loss of $2.5 million, respectively. Service charges on deposits increased $1.1 million year-over-year, reflecting fee income from new products and services and treasury management, as well as increased general consumer spending. Trust fees increased $0.8 million due to organic growth and market valuation changes. Other income included a $2.3 million gain from the transfer of certain liabilities for future pension payments to a third-party insurance company.

Primarily reflecting the items discussed above and mortgage banking income, non-interest income, for the twelve months ended December 31, 2024, increased $7.5 million, or 6.3%, year-over-year to $128.0 million. Trust fees increased $2.5 million, reflecting higher assets under management from organic growth and market appreciation. Mortgage banking income increased $1.6 million year-over-year due to more residential mortgages sold in the secondary market, as well as an associated wider gain-on-sale margin.

Non-Interest Expense
Non-interest expense, excluding restructuring and merger-related costs, for the three months ended December 31, 2024 were $100.5 million, a $1.0 million, or 1.0%, increase year-over-year primarily due to increases in equipment and software expenses, which increased $1.0 million reflecting the impact of the prior year ATM upgrades, which were phased in throughout the prior year.

Excluding restructuring and merger-related expenses, non-interest expense for 2024 of $395.5 million increased $9.3 million, or 2.4%, compared to the prior year period, due primarily to equipment and software expense, as described above, other operating expenses, and higher FDIC insurance expense. Other operating expenses increased $5.3 million primarily due to higher costs and fees in support of loan growth and higher other miscellaneous expenses. FDIC insurance increased $2.0 million year-over-year due to an increase in the minimum rate for all banks.

Capital
WesBanco continues to maintain what we believe are strong regulatory capital ratios, as both consolidated and bank-level regulatory capital ratios are well above the applicable "well-capitalized" standards promulgated by bank regulators and the BASEL III capital standards. At December 31, 2024, Tier I leverage was 10.68%, Tier I risk-based capital ratio was 13.06%, common equity Tier 1 capital ratio ("CET 1") was 12.07%, and total risk-based capital was 15.88%. In addition, the tangible common equity to tangible assets ratio was 8.70% due to strong earnings and the third quarter common equity raise.

Conference Call and Webcast
WesBanco will host a conference call to discuss the Company's financial results for the fourth quarter of 2024 at 3:00 p.m. ET on Thursday, January 23, 2025. Interested parties can access the live webcast of the conference call through the Investor Relations section of the Company's website, www.wesbanco.com. Participants can also listen to the conference call by dialing 888-347-6607, 855-669-9657 for Canadian callers, or 1-412-902-4290 for international callers, and asking to be joined into the WesBanco call. Please log in or dial in at least 10 minutes prior to the start time to ensure a connection.

A replay of the conference call will be available by dialing 877-344-7529, 855-669-9658 for Canadian callers, or 1-412-317-0088 for international callers, and providing the access code of 8807978. The replay will begin at approximately 5:00 p.m. ET on January 23, 2025 and end at 12 a.m. ET on February 6, 2025. An archive of the webcast will be available for one year on the Investor Relations section of the Company's website (www.wesbanco.com).

Forward-Looking Statements
Forward-looking statements in this report relating to WesBanco's plans, strategies, objectives, expectations, intentions and adequacy of resources, are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. The information contained in this report should be read in conjunction with WesBanco's Form 10-K for the year ended December 31, 2023 and documents subsequently filed by WesBanco with the Securities and Exchange Commission ("SEC") including WesBanco's Form 10-Q for the quarters ended March 31, 2024, June 30, 2024 and September 30, 2024, which are available at the SEC's website, www.sec.gov or at WesBanco's website, www.WesBanco.com. Investors are cautioned that forward-looking statements, which are not historical fact, involve risks and uncertainties, including those detailed in WesBanco's most recent Annual Report on Form 10-K filed with the SEC under "Risk Factors" in Part I, Item 1A. Such statements are subject to important factors that could cause actual results to differ materially from those contemplated by such statements, including, without limitation, that the proposed merger with Premier Financial Corp. ("Premier Financial" or "Premier") may not close when expected, that the businesses of WesBanco and Premier may not be integrated successfully or such integration may take longer to accomplish than expected; the expected cost savings and any revenue synergies from the merger of WesBanco and Premier may not be fully realized within the expected timeframes; disruption from the proposed merger of WesBanco and Premier may make it more difficult to maintain relationships with clients, associates, or suppliers; the required governmental approvals of the proposed Merger may not be obtained on the expected terms and schedule; the effects of changing regional and national economic conditions, changes in interest rates, spreads on earning assets and interest-bearing liabilities, and associated interest rate sensitivity; sources of liquidity available to WesBanco and its related subsidiary operations; potential future credit losses and the credit risk of commercial, real estate, and consumer loan customers and their borrowing activities; actions of the Federal Reserve Board, the Federal Deposit Insurance Corporation, the Consumer Financial Protection Bureau, the SEC, the Financial Institution Regulatory Authority, the Municipal Securities Rulemaking Board, the Securities Investors Protection Corporation, and other regulatory bodies; potential legislative and federal and state regulatory actions and reform, including, without limitation, the impact of the implementation of the Dodd-Frank Act; adverse decisions of federal and state courts; fraud, scams and schemes of third parties; cyber-security breaches; competitive conditions in the financial services industry; rapidly changing technology affecting financial services; marketability of debt instruments and corresponding impact on fair value adjustments; and/or other external developments materially impacting WesBanco's operational and financial performance. WesBanco does not assume any duty to update forward-looking statements.

While forward-looking statements reflect our good-faith beliefs, they are not guarantees of future performance. All forward-looking statements are necessarily only estimates of future results. Accordingly, actual results may differ materially from those expressed in or contemplated by the particular forward-looking statement, and, therefore, you are cautioned not to place undue reliance on such statements. Further, any forward-looking statement speaks only as of the date on which it is made, and we undertake no obligation to update any forward-looking statement to reflect events or circumstances after the date on which the statement is made or to reflect the occurrence of unanticipated events or circumstances, except as required by applicable law.

Statements in this presentation with respect to the expected timing of and benefits of the proposed merger between WesBanco and Premier, the parties' plans, obligations, expectations, and intentions, and the statements with respect to accretion, earn back of tangible book value, tangible book value dilution and internal rate of return, constitute forward-looking statements as defined by federal securities laws. Such statements are subject to numerous assumptions, risks, and uncertainties. Actual results could differ materially from those contained or implied by such statements for a variety of factors including: the businesses of WesBanco and Premier may not be integrated successfully or such integration may take longer to accomplish than expected; the expected cost savings and any revenue synergies from the proposed merger may not be fully realized within the expected time frames; disruption from the proposed merger may make it more difficult to maintain relationships with clients, associates, or suppliers; the required governmental approvals of the proposed merger may not be obtained on the expected terms and schedule; changes in economic conditions; movements in interest rates; competitive pressures on product pricing and services; success and timing of other business strategies; the nature, extent, and timing of governmental actions and reforms; extended disruption of vital infrastructure; and other factors described in WesBanco's 2023 Annual Report on Form 10-K, Premier's 2023 Annual Report on Form 10-K, and documents subsequently filed by WesBanco and Premier with the Securities and Exchange Commission.

Non-GAAP Financial Measures
In addition to the results of operations presented in accordance with Generally Accepted Accounting Principles (GAAP), WesBanco's management uses, and this presentation contains or references, certain non-GAAP financial measures, such as pre-tax pre-provision income, tangible common equity/tangible assets; net income excluding after-tax restructuring and merger-related expenses; efficiency ratio; return on average assets; and return on average tangible equity. WesBanco believes these financial measures provide information useful to investors in understanding our operational performance and business and performance trends which facilitate comparisons with the performance of others in the financial services industry. Although WesBanco believes that these non-GAAP financial measures enhance investors' understanding of WesBanco's business and performance, these non-GAAP financial measures should not be considered an alternative to GAAP. The non-GAAP financial measures contained therein should be read in conjunction with the audited financial statements and analysis as presented in the Annual Report on Form 10-K as well as the unaudited financial statements and analyses as presented in the Quarterly Reports on Forms 10-Q for WesBanco and its subsidiaries, as well as other filings that the company has made with the SEC.

Additional Information About the Merger and Where to Find It
In connection with the proposed Merger, the Company filed with the Securities and Exchange Commission (the "SEC") a Registration Statement on Form S-4 which includes a joint proxy statement of Premier Financial and the Company and a prospectus of the Company with respect to shares of the Company's common stock to be issued in the proposed transaction, as well as other relevant documents concerning the proposed transaction. The Form S-4 was declared effective on October 28, 2024, and Wesbanco and Premier Financial commenced mailing to their respective shareholders on or about November 1, 2024 in connection with their respective special meetings of shareholders, which were held on December 11, 2024, at which the shareholders of both companies approved all matters related to the proposed transaction that were submitted for a vote. This communication is not a substitute for the Registration Statement on Form S-4, the joint proxy statement/Prospectus or any other document that the Company and/or Premier Financial may file with the SEC in connection with the proposed transaction. SHAREHOLDERS OF THE COMPANY, SHAREHOLDERS OF PREMIER FINANCIAL AND OTHER INTERESTED PARTIES ARE URGED TO READ THE REGISTRATION STATEMENT ON FORM S-4 AND THE JOINT PROXY STATEMENT/PROSPECTUS REGARDING THE MERGER AND ANY OTHER RELEVANT DOCUMENTS FILED WITH THE SEC, AS WELL AS ANY AMENDMENTS OR SUPPLEMENTS TO THOSE DOCUMENTS, BECAUSE THEY CONTAIN IMPORTANT INFORMATION. The Registration Statement on Form S-4, which includes the joint proxy statements/prospectus, and other related documents filed by the Company or Premier with the SEC, may be obtained for free at the SEC's website at www.sec.gov, and from either the Company's or Premier Financial's website at www.wesbanco.com or www.premierfincorp.com, respectively.

No Offer or Solicitation
This Current Report on Form 8-K shall not constitute an offer to sell or a solicitation of an offer to buy any securities nor shall there be any sale of securities in any state or jurisdiction in which such offer, solicitation, or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.

About WesBanco, Inc.
With over 150 years as a community-focused, regional financial services partner, WesBanco Inc. (NASDAQ: WSBC) and its subsidiaries build lasting prosperity through relationships and solutions that empower our customers for success in their financial journeys. Customers across our eight-state footprint choose WesBanco for the comprehensive range and personalized delivery of our retail and commercial banking solutions, as well as trust, brokerage, wealth management and insurance services, all designed to advance their financial goals. Through the strength of our teams, we leverage large bank capabilities and local focus to help make every community we serve a better place for people and businesses to thrive. Headquartered in Wheeling, West Virginia, WesBanco has $18.7 billion in total assets, with our Trust and Investment Services holding $6.0 billion of assets under management and securities account values (including annuities) of $1.9 billion through our broker/dealer, as of December 31, 2024. Learn more at www.wesbanco.com and follow @WesBanco on Facebook, LinkedIn and Instagram.