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What changed in WESBANCO INC's 10-K — 2022 vs 2023

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Paragraph-level year-over-year comparison of WESBANCO INC's 2022 and 2023 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2023 report.

+442 added−518 removedSource: 10-K (2024-02-26) vs 10-K (2023-02-27)

Top changes in WESBANCO INC's 2023 10-K

442 paragraphs added · 518 removed · 368 edited across 6 sections

Item 1. Business

Business — how the company describes what it does

63 edited+10 added−33 removed116 unchanged
Biggest changeIn addition, critically undercapitalized institutions are subject to appointment of a receiver or conservator within 90 days of becoming critically undercapitalized. 8 GRAMM-LEACH-BLILEY ACT Under the Gramm-Leach-Bliley Act (the “GLB Act”), banks are no longer prohibited from associating with, or having management interlocks with, a business organization engaged principally in securities activities.
Biggest changeGRAMM-LEACH-BLILEY ACT Under the Gramm-Leach-Bliley Act (the “GLB Act”), banks are no longer prohibited from associating with, or having management interlocks with, a business organization engaged principally in securities activities. By qualifying as a “financial holding company,” as authorized under the GLB Act, a bank holding company acquires new powers not otherwise available to it.
Wesbanco is now subject to additional supervision from the Federal Reserve Board and its primary banking regulators due to its exceeding the $10 billion asset threshold and seeks to ensure that sufficient resources are allocated to safety and soundness compliance with applicable laws, such as the Bank Secrecy Act, anti-money laundering regulations, and the Community Reinvestment Act (“CRA”), among others, and risk management and internal audit, among other functions, so that the enhanced requirements of the Federal Reserve Board and its primary banking regulators are met.
Wesbanco is subject to additional supervision from the Federal Reserve Board and its primary banking regulators due to its exceeding the $10 billion asset threshold and seeks to ensure that sufficient resources are allocated to safety and soundness compliance with applicable laws, such as the Bank Secrecy Act, anti-money laundering regulations, and the Community Reinvestment Act (“CRA”), among others, and risk management and internal audit, among other functions, so that the enhanced requirements of the Federal Reserve Board and its primary banking regulators are met.
Failure to meet applicable capital guidelines could subject a financial institution to a variety of enforcement remedies available to the federal regulatory authorities, including limitations on the ability to pay dividends, the issuance by the regulatory authority of a capital directive 7 to increase capital, and the termination of deposit insurance by the FDIC, as well as to the measures described below under “Prompt Corrective Action” as applicable to undercapitalized institutions.
Failure to meet applicable capital guidelines could subject a financial institution to a variety of enforcement remedies available to the federal regulatory authorities, including limitations on the ability to pay dividends, the issuance by the regulatory authority of a capital directive to increase capital, and the termination of deposit insurance by the FDIC, as well as to the measures described below under “Prompt Corrective Action” as applicable to undercapitalized institutions.
Accordingly, investors should monitor the Investors section of the website in addition to following Wesbanco's press releases. SEC filings, public conference calls, presentations and webcasts. The information contained on, or that may be accessed through, Wesbanco's website is not incorporated by reference into, and is not a part of, this Annual Report on Form 10-K.
Accordingly, investors should monitor the Investors section of the website in addition to following Wesbanco's press releases, SEC filings, public conference calls, 3 presentations and webcasts. The information contained on, or that may be accessed through, Wesbanco's website is not incorporated by reference into, and is not a part of, this Annual Report on Form 10-K.
An affiliate is defined as “any company that controls, or is controlled by, or is under common control with another company.” Therefore, if an insured institution issues a debit card and it, 9 together with its affiliates, has assets exceeding $10 billion, it is subject to this rule.
An affiliate is defined as “any company that controls, or is controlled by, or is under common control with another company.” Therefore, if an insured institution issues a debit card and it, together with its affiliates, has assets exceeding $10 billion, it is subject to this rule.
In addition, all covered transactions must be conducted on terms and conditions that are consistent with safe and sound banking practices. 5 The Dodd-Frank Act requires a bank holding company to act as a source of financial strength to its subsidiary bank.
In addition, all covered transactions must be conducted on terms and conditions that are consistent with safe and sound banking practices. The Dodd-Frank Act requires a bank holding company to act as a source of financial strength to its subsidiary bank.
The rule is extremely complex, contains significant uncertainties as to penalties, some of which can be quite material, contains prohibitions against correcting even technical mistakes, creates uncertainty regarding last minute changes in the transaction and has triggered significant ambiguity in compliance.
The rule is extremely complex, contains significant uncertainties as to penalties, some of which can be quite material, contains prohibitions against correcting even technical mistakes, creates uncertainty regarding last 10 minute changes in the transaction and has triggered significant ambiguity in compliance.
These laws include the Equal Credit Opportunity Act, the Fair Credit Reporting Act, the Truth in Lending Act (“TILA”), the Truth in Savings Act, the Home Mortgage 11 Disclosure Act, the Real Estate Settlement Procedures Act (“RESPA”), the Electronic Fund Transfer Act, and, in some cases, their respective state law counterparts.
These laws include the Equal Credit Opportunity Act, the Fair Credit Reporting Act, the Truth in Lending Act (“TILA”), the Truth in Savings Act, the Home Mortgage Disclosure Act, the Real Estate Settlement Procedures Act (“RESPA”), the Electronic Fund Transfer Act, and, in some cases, their respective state law counterparts.
A capital infusion conceivably could be required at a time when Wesbanco may not have the resources to provide it. PAYMENT OF DIVIDENDS Dividends from the subsidiary bank are a significant source of funds for payment of dividends to Wesbanco’s shareholders.
A capital infusion conceivably could be required at a time when Wesbanco may not have the resources to provide it. 5 PAYMENT OF DIVIDENDS Dividends from the subsidiary bank are a significant source of funds for payment of dividends to Wesbanco’s shareholders.
As a result of Wesbanco’s expansion into certain larger metropolitan markets, it has faced entrenched larger bank competitors with an already existing 4 customer base that may far exceed Wesbanco’s initial entry position into those markets.
As a result of Wesbanco’s expansion into certain larger metropolitan markets, it has faced entrenched larger bank competitors with an already existing customer base that may far exceed Wesbanco’s initial entry position into those markets.
As of December 31, 2022, Wesbanco’s total assets were above $15 billion; therefore, all such securities are no longer counted as Tier 1 capital but instead are counted as Tier 2 capital subject to limits. For more information regarding trust preferred securities, please refer to Note 10, “Subordinated and Junior Subordinated Debt” in the Consolidated Financial Statements.
As of December 31, 2023, Wesbanco’s total assets were above $15 billion; therefore, all such securities are no longer counted as Tier 1 capital but instead are counted as Tier 2 capital subject to limits. For more information regarding trust preferred securities, please refer to Note 10, “Subordinated and Junior Subordinated Debt” in the Consolidated Financial Statements.
An interim final rule was issued in January 2014 that exempts investments in certain collateralized debt obligations backed primarily by trust preferred securities from the provisions of the Volcker Rule. This interim final rule was effective April 1, 2014 and did not have a material impact on Wesbanco for the year ended December 31, 2022.
An interim final rule was issued in January 2014 that exempts investments in certain collateralized debt obligations backed primarily by trust preferred securities from the provisions of the Volcker Rule. This interim final rule was effective April 1, 2014 and did not have a material impact on Wesbanco for the year ended December 31, 2023.
Wesbanco offers these services through two reportable segments, community banking and trust and investment services. For additional information regarding Wesbanco’s business segments, please refer to Note 23, “Business Segments” in the Consolidated Financial Statements. As of December 31, 2022, Wesbanco operated one commercial bank: Wesbanco Bank, Inc. (“Wesbanco Bank” or the “Bank”).
Wesbanco offers these services through two reportable segments, community banking and trust and investment services. For additional information regarding Wesbanco’s business segments, please refer to Note 23, “Business Segments” in the Consolidated Financial Statements. As of December 31, 2023, Wesbanco operated one commercial bank: Wesbanco Bank, Inc. (“Wesbanco Bank” or the “Bank”).
The increase in assessment rate schedules is intended to increase the likelihood that the reserve ratio of the Deposit Insurance Fund reaches the statutory minimum of 1.35% by the statutory deadline of September 30, 2028. CAPITAL REQUIREMENTS The Federal Reserve Board had historically issued risk-based capital ratio and leverage ratio guidelines for bank holding companies.
The increase in assessment rate schedules was intended to increase the likelihood that the reserve ratio of the Deposit Insurance Fund reaches the statutory minimum of 1.35% by the statutory deadline of September 30, 2028. CAPITAL REQUIREMENTS The Federal Reserve Board had historically issued risk-based capital ratio and leverage ratio guidelines for bank holding companies.
As of December 31, 2022, none of Wesbanco’s subsidiaries were engaged in any operations in foreign countries, and only one had any transactions with customers in foreign countries. The Bank also provides letters of credit internationally for certain domestic customers and provides international wire services through a third-party correspondent bank.
As of December 31, 2023, none of Wesbanco’s subsidiaries were engaged in any operations in foreign countries, and only one had any transactions with customers in foreign countries. The Bank also provides letters of credit internationally for certain domestic customers and provides international wire services through a third-party correspondent bank.
Upon written request of any shareholder of record on December 31, 2022, Wesbanco will provide, without charge, a printed copy of this 2022 Annual Report on Form 10-K, including financial statements and schedules, as required to be filed with the SEC.
Upon written request of any shareholder of record on December 31, 2023, Wesbanco will provide, without charge, a printed copy of this 2023 Annual Report on Form 10-K, including financial statements and schedules, as required to be filed with the SEC.
It is subject to examination and supervision by the Federal Deposit Insurance Corporation (the “FDIC”), the West Virginia Division of Financial Institutions (“WVDIF”), and the Consumer Financial Protection Bureau (“CFPB”) because its assets exceed $10 billion. The deposits of Wesbanco Bank are insured by the Deposit Insurance Fund of the FDIC.
It is subject to examination and supervision by the Federal Deposit Insurance Corporation (the “FDIC”), the West Virginia Division of Financial Institutions (“WVDFI”), and the Consumer Financial Protection Bureau (“CFPB”) because its assets exceed $10 billion. The deposits of Wesbanco Bank are insured by the Deposit Insurance Fund of the FDIC.
Failure of Wesbanco and its subsidiaries to maintain and implement adequate programs to combat money laundering and terrorist financing, or to co mply with all of the relevant laws or regulations, could have serious legal and reputational consequences for Wesbanco and its subsidiaries. 13
Failure of Wesbanco and its subsidiaries to maintain and implement adequate programs to combat money laundering and terrorist financing, or to co mply with all of the relevant laws or regulations, could have serious legal and reputational consequences for Wesbanco and its subsidiaries. 12
As of December 31, 2022, as noted above in “Capital Requirements,” Wesbanco Bank had capital levels that met the “well-capitalized” standards under FDICIA and its implementing regulations.
As of December 31, 2023, as noted above in “Capital Requirements,” Wesbanco Bank had capital levels that met the “well-capitalized” standards under FDICIA and its implementing regulations.
As a result of exceeding the $10 billion asset threshold, Wesbanco Bank is now subject to enhanced prudential supervision from both the FDIC and WVDIF as part of their large bank supervision program. Wesbanco is also under the jurisdiction of the SEC and certain state securities commissions for matters relating to the offering and sale of its securities.
As a result of exceeding the $10 billion asset threshold, Wesbanco Bank is subject to enhanced prudential supervision from both the FDIC and WVDFI as part of their large bank supervision program. Wesbanco is also under the jurisdiction of the SEC and certain state securities commissions for matters relating to the offering and sale of its securities.
The Federal Reserve Board revised the Volcker Rule, issuing a final rule in November 2019. Under the new rule, banking entities with gross consolidated trading assets and liabilities between $1 billion and $20 billion will be subject to a simplified compliance program because they will be considered to have “moderate” trading assets.
The Federal Reserve Board revised the Volcker Rule, issuing a final rule in November 2019. Under the new rule, banking entities with gross consolidated trading assets and liabilities between $1 billion and $20 billion are subject to a simplified compliance program because they are considered to have “moderate” trading assets.
Large banks are subject to a more 6 complex insurance premium calculation with additional loan-related and other risk factors involved which leads to an overall higher rate as compared to that of smaller banks. In 2022, Wesbanco Bank paid deposit insurance premiums of $7.2 million, compared to $4.5 million and $6.7 million in 2021 and 2020, respectively.
Large banks are subject to a more complex insurance premium calculation with additional loan-related and other risk factors involved which leads to an overall higher rate as compared to that of smaller banks. In 2023, Wesbanco Bank paid deposit insurance premiums of $11.2 million, compared to $7.2 million and $4.5 million in 2022 and 2021, respectively.
The market value of assets under management of the trust and investment services segment is approximately $4.9 billion as of December 31, 2022. These assets are held by Wesbanco Bank in fiduciary or agency capacities for its customers and therefore are not included as assets on Wesbanco’s Consolidated Balance Sheets.
The market value of assets under management of the trust and investment services segment is approximately $5.4 billion as of December 31, 2023. These assets are held by Wesbanco Bank in fiduciary or agency capacities for its customers and therefore are not included as assets on Wesbanco’s Consolidated Balance Sheets.
The CRA requires Wesbanco Bank’s primary federal bank regulatory agency, the FDIC, to assess Wesbanco Bank’s record in meeting the credit needs of the communities served by the bank, including low and moderate-income neighborhoods and persons.
The CRA requires Wesbanco Bank’s primary federal bank regulatory agency, the Federal Deposit Insurance Corporation (FDIC), to assess the Bank’s record in meeting the credit needs of the communities served by the Bank, including low and moderate-income neighborhoods and persons.
The capital amounts and classifications are also subject to qualitative judgements by the regulators about components, risk-weightings, and other factors.
The capital amounts and classifications are also subject to qualitative judgments by the regulators about components, risk-weightings, and other factors.
To obtain a copy of this report, contact: John Iannone, Wesbanco, Inc., 1 Bank Plaza, Wheeling, West Virginia 26003 (304) 905-7021. HUMAN CAPITAL RESOURCES At December 31, 2022, we employed 2,426 full-time equivalent employees.
To obtain a copy of this report, contact: John Iannone, Wesbanco, Inc., 1 Bank Plaza, Wheeling, West Virginia 26003 (304) 905-7021. HUMAN CAPITAL RESOURCES At December 31, 2023, we employed 2,321 full-time equivalent employees.
WEBSITE ACCESS TO WESBANCO’S FILINGS WITH THE SECURITIES AND EXCHANGE COMMISSION All of Wesbanco’s electronic filings for 2022 filed with the Securities and Exchange Commission (the “SEC”), including this Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and amendments to these reports filed or furnished 3 pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, are made available at no cost on Wesbanco’s website, www.wesbanco.com, through the “Investors” link as soon as reasonably practicable after Wesbanco files such material with, or furnishes it to, the SEC.
WEBSITE ACCESS TO WESBANCO’S FILINGS WITH THE SECURITIES AND EXCHANGE COMMISSION Wesbanco’s electronic filings with the Securities and Exchange Commission (the “SEC”), including its Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and amendments to these reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, are made available at no cost on Wesbanco’s website, www.wesbanco.com, through the “Investors” link as soon as reasonably practicable after Wesbanco files such material with, or furnishes it to, the SEC.
Wesbanco Bank received the “America Saves Designation of Savings Excellence for Banks,” a designation from America Saves that recognizes banks that went above and beyond to encourage people to save money during America Saves Week 2022.
Wesbanco Bank received the “America Saves Designation of Savings Excellence for Banks,” a designation from the national America Saves initiative that recognizes banks that went above and beyond to encourage people to save money during America Saves Week 2023.
As of December 31, 2022, under West Virginia and FDIC regulations, Wesbanco could receive, without prior regulatory approval, a dividend of up to $116.8 million from Wesbanco Bank. Additional information regarding dividend restrictions is set forth in Note 21, “Regulatory Matters,” in the Consolidated Financial Statements.
As of December 31, 2023, under West Virginia and FDIC regulations, Wesbanco could receive, without prior regulatory approval, a dividend of up to $135.5 million from Wesbanco Bank. Additional information regarding dividend restrictions is set forth in Note 21, “Regulatory Matters,” in the Consolidated Financial Statements.
In the past five years, the Bank originated over $1.9 billion in community development loans, returning credit and capital to communities throughout our footprint. At the heart of Wesbanco Bank’s successful community development program is its commitment of time and resources to the communities it serves.
In the past five years, Wesbanco originated over $2 billion in community development loans, returning credit and capital to communities throughout its footprint. At the heart of the Bank’s successful community development program is its commitment of time and resources to the communities it serves.
For regulatory purposes, Trust Preferred Securities totaling $130.0 million underlying such junior subordinated debt were included in Tier 2 capital as of December 31, 2022, in accordance with regulatory reporting requirements. In 2013, the federal banking agencies amended capital requirements to generally exclude trust preferred securities from Tier 1 capital.
For regulatory purposes, Trust Preferred Securities totaling $126.9 million underlying such junior subordinated debt were included in Tier 2 capital as of December 31, 2023, in accordance with regulatory reporting requirements. In 2013, the federal banking agencies amended capital requirements to generally exclude trust preferred securities from Tier 1 capital.
As of December 31, 2022, Wesbanco Bank’s CET1, Tier 1 and total capital to risk-adjusted assets ratios were 12.22%, 12.22% and 12.81%, respectively, all in excess of the minimum requirements. Neither Wesbanco nor the Bank had been advised by the appropriate federal banking regulator of any specific leverage ratio applicable to it.
As of December 31, 2023, Wesbanco Bank’s CET1, Tier 1 and total capital to risk-adjusted assets ratios were 12.13%, 12.13% and 12.97%, respectively, all in excess of the minimum requirements. Neither Wesbanco nor the Bank had been advised by the 7 appropriate federal banking regulator of any specific leverage ratio applicable to it.
For the year ended December 31, 2022, Wesbanco declared cash dividends to its preferred and common shareholders of approximately $10.1 million and $81.3 million, respectively. As of December 31, 2022, Wesbanco Bank was “well capitalized” under the definition in Section 324.403 of the FDIC Regulations.
For the year ended December 31, 2023, Wesbanco declared cash dividends to its preferred and common shareholders of approximately $10.1 million and $82.9 million, respectively. As of December 31, 2023, Wesbanco Bank was “well capitalized” under the definition in Section 324.403 of the FDIC Regulations.
Built upon our ‘Better Banking Pledge’ and our ‘Service & Support Pledge’, our culture, which is both customer and employee-centric, is focused on growing long-term relationships by pledging to serve all personal and business customer needs efficiently and effectively while treating our employees with dignity and respect.
Built upon our ‘Better Banking Pledge’ and our ‘Service & Support Pledge’, our culture, which is both customer and employee-centric, is focused on growing long-term relationships by pledging to serve all personal and business customer needs efficiently and effectively while treating our employees with dignity and respect. Wesbanco completed its first employee engagement survey which focused on employee satisfaction.
We annually assess talent through a specific Talent Development Program to identify, promote and build development plans among multiple levels of management. These efforts have resulted in Wesbanco being designated as one of the best workplaces in several markets, including Columbus and Western Pennsylvania.
In addition, we have engaged in leadership training for senior and middle management supervisors. We annually assess talent through a specific Talent Development Program to identify, promote and build development plans among multiple levels of management. These efforts have resulted in Wesbanco being designated as one of the best workplaces in several markets, including Columbus and Western Pennsylvania.
Wesbanco has proven to be a leader in the community by providing loans, deposits and other banking services that are responsive to the financial needs of the community.
Wesbanco has proven to be a leader in its communities by providing loans, deposits and other banking services that are responsive to financial needs.
Employees provide thousands of hours of technical assistance or financial education to organizations and agencies that promote community development and Wesbanco has deployed hundreds of thousands of dollars in philanthropic donations to worthy organizations serving local communities throughout its footprint.
Employees provide thousands of hours of technical assistance and financial education to organizations and agencies that promote community development and Wesbanco has deployed hundreds of thousands of dollars in philanthropic donations to worthy organizations serving local communities in Wesbanco’s service area.
The Bank has 194 branches and 188 ATM machines located in West Virginia, Ohio, western Pennsylvania, Kentucky, southern Indiana and Maryland. Total assets of Wesbanco as of December 31, 2022 approximated $16.9 billion. Wesbanco Bank also offers trust and investment services and various alternative investment products including mutual funds and annuities.
The Bank has 192 branches and 183 ATM machines located in West Virginia, Ohio, western Pennsylvania, Kentucky, southern Indiana and Maryland. Total assets of Wesbanco as of December 31, 2023 approximated $17.7 billion. Wesbanco Bank also offers trust and investment services and various alternative investment products including mutual funds and annuities.
Financial holding company powers relate to “financial activities” that are determined by the Federal Reserve Board, in coordination with the Secretary of the Treasury, to be financial in nature, incidental to an activity that is financial in nature, or complementary to a financial activity, provided that the complementary activity does not pose a safety and soundness risk.
It also has qualified a subsidiary of the Bank as a financial subsidiary under the GLB Act. 8 Financial holding company powers relate to “financial activities” that are determined by the Federal Reserve Board, in coordination with the Secretary of the Treasury, to be financial in nature, incidental to an activity that is financial in nature, or complementary to a financial activity, provided that the complementary activity does not pose a safety and soundness risk.
Our turnover rate for officers was just 9.13% for 2022. Our corporate culture has been established by senior management and overseen by our board of directors.
Our turnover rate for officers was 15% for 2023. Our corporate culture has been established by senior management and overseen by our board of directors.
As of December 31, 2022, Wesbanco’s CET1, Tier 1 and total capital to risk-adjusted assets ratios were 11.20%, 12.33% and 15.11%, respectively. Wesbanco made a timely permanent election to exclude accumulated other comprehensive income from regulatory capital.
As of December 31, 2023, Wesbanco’s CET1, Tier 1 and total capital to risk-adjusted assets ratios were 10.99%, 12.05% and 14.91%, respectively. Wesbanco made a timely permanent election to exclude accumulated other comprehensive income from regulatory capital.
Additionally, Wesbanco has developed its own loan and deposit products to provide financing and savings options with innovative and flexible terms to meet identified needs. Wesbanco has also been a leader in providing community development lending within its CRA assessment areas.
Additionally, Wesbanco has developed its own loan and deposit products to provide financing and savings options with innovative and flexible terms to meet identified needs for underserved persons and in underserved communities. Wesbanco has also been recognized as a leader in community development lending.
As of December 31, 2022, Wesbanco’s leverage ratio was 9.90% and the Bank’s leverage ratio was 9.80%. As of December 31, 2022, Wesbanco had $133.5 million in junior subordinated debt on its Consolidated Balance Sheets.
As of December 31, 2023, Wesbanco’s leverage ratio was 9.87% and the Bank’s leverage ratio was 9.93%. As of December 31, 2023, Wesbanco had $131.0 million in junior subordinated debt on its Consolidated Balance Sheets.
("OLBK") acquisition and are Maryland limited liability corporations, hold certain real estate properties located in the Maryland area. Each of these entities is a wholly owned subsidiary of Wesbanco Bank.
FAH, LLC and Flagship Acquisitions Trust, which were acquired in the Old Line Bancshares, Inc. ("OLBK") acquisition and are Maryland limited liability corporations, hold certain real estate properties located in the Maryland area. Each of these entities is a wholly owned subsidiary of Wesbanco Bank.
Critically undercapitalized institutions may not, beginning 60 days after becoming critically undercapitalized, make any payment of principal or interest on their subordinated debt and/or trust preferred securities.
Critically undercapitalized institutions may not, beginning 60 days after becoming critically undercapitalized, make any payment of principal or interest on their subordinated debt and/or trust preferred securities. In addition, critically undercapitalized institutions are subject to appointment of a receiver or conservator within 90 days of becoming critically undercapitalized.
Further, our employees are equally generous, providing technical assistance services and financial education to non-profit organizations and area schools that resulted in nearly 11,700 volunteer hours in 2022.
Further, our employees provided technical assistance services and financial education to non-profit organizations and area schools that resulted in 11,500 volunteer hours in 2023.
SECURITIES REGULATION Wesbanco’s full service broker-dealer subsidiary, Wesbanco Securities, is registered as a broker-dealer with the SEC and in the states in which it does business. Wesbanco Securities also is a member of FINRA. Wesbanco Securities is subject to regulation by the SEC, FINRA and the securities administrators of the states in which it is registered.
Wesbanco Bank continues to be categorized as a “large bank” under the amended CRA rules. 11 SECURITIES REGULATION Wesbanco’s full service broker-dealer subsidiary, Wesbanco Securities, is registered as a broker-dealer with the SEC and in the states in which it does business. Wesbanco Securities also is a member of FINRA.
A provision authorizing insured depository institutions to pay interest on certain business checking accounts may increase Wesbanco’s interest expense. The Consumer Financial Protection Bureau, a federal agency created by the Dodd-Frank Act, has the authority to write rules implementing numerous consumer protection laws applicable to all banks (discussed below under “Item 1.
The Consumer Financial Protection Bureau, a federal agency created by the Dodd-Frank Act, has the authority to write rules implementing numerous consumer protection laws applicable to all banks (discussed below under “Item 1. Business—Consumer Protection Laws”).
Our hope is that this not only helps us evolve and grow as a company but that it also spreads to all of our other community efforts. In fact, during the past year alone, Wesbanco has made over $1.2 million of philanthropic donations in support of our communities across our footprint.
Our hope is that this not only helps us evolve and grow as a company but that it also spreads to all of our other community efforts. In 2023, Wesbanco provided philanthropic donations totaling $0.9 million in support of worthwhile organizations serving communities across our footprint.
Further, SEC and Nasdaq rulemaking under the Dodd-Frank Act requires Nasdaq-listed companies to have a compensation committee composed entirely of independent directors. Wesbanco’s Compensation Committee members currently satisfy the independence criteria. The Dodd-Frank Act also called for regulators to issue new rules relating to incentive-based compensation arrangements deemed excessive, and proxy access by shareholders.
Further, SEC and Nasdaq rulemaking under the Dodd-Frank Act requires Nasdaq-listed companies to have a compensation committee composed entirely of independent directors. Wesbanco’s Compensation Committee members currently satisfy the independence criteria.
For example, Wesbanco Bank leverages its membership in the Federal Home Loan Bank to sponsor Affordable Housing Program grant applications for non-profit organizations and developers of affordable housing, assistance through the First Front Door down payment program, Banking on Business loans for small businesses that may not be approved for conventional bank financing, and loans through the Community Lending Program.
For example, Wesbanco Bank leverages its membership in the Federal Home Loan Bank to sponsor Affordable Housing Program grant applications for non-profit organizations and housing developers, to provide down payment assistance for home mortgage borrowers through the First Front Door program, and to provide flexible financing options for small businesses, including women- and minority-owned businesses, through the Banking on Business and Banking on Business Inclusion and Equity loan programs.
SUPERVISION AND REGULATION As a bank holding company and a financial holding company under federal law, Wesbanco is subject to supervision and examination by the Board of Governors of the Federal Reserve System (“Federal Reserve Board”) under the Bank Holding Company Act of 1956, as amended (the “BHCA”), and is required to file with the Federal Reserve Board reports and other information regarding its business operations and the business operations of its subsidiaries.
As a result, Wesbanco may be forced to compete more aggressively for loans, deposits, trust and insurance products to grow its market share, potentially reducing its current and future profit potential from such markets. 4 SUPERVISION AND REGULATION As a bank holding company and a financial holding company under federal law, Wesbanco is subject to supervision and examination by the Board of Governors of the Federal Reserve System (“Federal Reserve Board”) under the Bank Holding Company Act of 1956, as amended (the “BHCA”), and is required to file with the Federal Reserve Board reports and other information regarding its business operations and the business operations of its subsidiaries.
Federal law makes it a criminal offense, except in limited circumstances, to obtain or attempt to obtain customer information of a financial nature by fraudulent or deceptive means. Community development and compliance with the CRA are vital and integrated components of the banking business at Wesbanco Bank.
Federal law makes it a criminal offense, except in limited circumstances, to obtain or attempt to obtain customer information of a financial nature by fraudulent or deceptive means. COMMUNITY DEVELOPMENT Wesbanco strives to be a leader in community development by positively impacting the communities it serves.
Wesbanco and the Bank were subject to the requirements imposed by the Durbin Amendment because, for purposes of determining whether an issuer has $10 billion in assets, the assets of the institution and its affiliates are combined, effective for transactions beginning in July of 2019.
Wesbanco and the Bank were subject to the requirements imposed by the Durbin Amendment because, for purposes of determining whether an issuer has $10 billion in assets, the assets of the institution and its affiliates are combined, effective for transactions beginning in July 2019. 9 Additionally, section 165(i)(2) of the Dodd-Frank Act, as amended by the EGRRCPA, requires annual company-run stress tests for bank holding companies with total consolidated assets greater than $100 billion.
The safety and care of our employees and their families as well as their communities is paramount for us. Of our total employees, 9.6% or 232 were minorities with 82, or 35.3% of those officers. Of our 1,117 total officers, 598 or 53.6% were women. Our turnover rate for 2022 was 18.98%.
The safety and care of our employees and their families as well as their communities is paramount for us. Of our total employees, 10% or 235 were minorities with 80 or 34% of those officers. Of our 1,105 total officers, 603 or 55% were women. Our turnover rate for 2023 was 19%.
The Wesbanco CDC has received four allocations of New Markets Tax Credits, leveraging those funds to make over 219 loans totaling over $167 million for the benefit of businesses located in low-income, distressed communities, and creating over 6,200 jobs. 12 To achieve this level of success, in addition to providing a wide variety of conventional loan and deposit products, the Bank partners with a number of governmental and non-profit agencies to provide special programs to assist customers, especially low- and moderate-income customers, achieve their financial goals.
To achieve this level of success, in addition to providing a wide variety of conventional loan and deposit products, the Bank partners with a number of governmental and non-profit agencies to provide special programs to assist customers, especially low- and moderate-income consumers and small businesses, achieve their financial goals.
The FDIC adopted a final rule in October 2022, applicable to all insured depository institutions, to increase initial base deposit insurance assessment rate schedules uniformly by 2 basis points, beginning in the first quarterly assessment period of 2023.
The increase in 2023's premiums was due primarily to an increase in initial base deposit insurance assessment rate schedules uniformly by two basis points, beginning in the first quarterly 6 assessment period of 2023.
Wesbanco has been an active participant in America Saves Week since its inception in 2007 and this was Wesbanco’s seventh consecutive designation for savings excellence. The Wesbanco Bank Community Development Corporation (“Wesbanco CDC”), an affiliate of Wesbanco Inc., was nationally recognized by the American Bankers Association Foundation ("ABA Foundation") with a Community Commitment Award.
The Wesbanco Bank Community Development Corporation (“Wesbanco CDC”), an affiliate of Wesbanco Inc., was nationally recognized by the American Bankers Association Foundation ("ABA Foundation") with a Community Commitment Award for its New Markets Loan Program, an innovative revolving loan fund for small businesses.
The SEC has issued proposed rules relating to excessive compensation arrangements that have not been finalized. All banks and other insured depository institutions now have increased authority to open new branches across state lines (discussed above under “Item 1. Business—Supervision and Regulation”).
All banks and other insured depository institutions now have increased authority to open new branches across state lines (discussed above under “Item 1. Business—Supervision and Regulation”). A provision authorizing insured depository institutions to pay interest on certain business checking accounts may increase Wesbanco’s interest expense.
In 2022, Wesbanco completed its first annual employee engagement survey with preliminary positive results. Wesbanco has been a leader in its communities for over 150 years, and we want to continue to take a leadership role by noting our stance for equality.
Wesbanco has been a leader in its communities for over 150 years, and we want to continue to take a leadership role by noting our stance for equality. We are a group with diverse backgrounds and ethnicities, and share the same values of dignity and respect for our co-workers, customers, and fellow community members.
We are a group of diverse backgrounds and ethnicities, and share the same values of dignity and respect for our co-workers, customers, and fellow community members. We have been able to enhance our diversification through the retention of many of the employees we have acquired through our acquisition strategy who bring a strong skill set and a diverse background.
We have been able to enhance our diversification through the retention of many of the employees we have acquired through our acquisition strategy who bring a strong skill set and a diverse background. Wesbanco ensures diversity in our workforce representation by reflecting the makeup of the communities it serves.
On December 19, 2019, the FDIC assigned a rating of “Outstanding” for the Bank’s community development performance for the period of October 2016 through July 2019. This is the highest rating awarded by federal regulators and the 2019 exam represented the Bank’s seventh consecutive “Outstanding” CRA rating.
On November 14, 2022, the FDIC assigned a rating of “Outstanding” for Wesbanco Bank’s community development performance for the period of July 2019 through November 2022. The 2022 exam represented the Bank’s eighth consecutive “Outstanding” CRA rating, spanning a period of more than twenty years.
By qualifying as a “financial holding company,” as authorized under the GLB Act, a bank holding company acquires new powers not otherwise available to it. Wesbanco has elected to become a financial holding company under the GLB Act. It also has qualified a subsidiary of the Bank as a financial subsidiary under the GLB Act.
Wesbanco has elected to become a financial holding company under the GLB Act.
Removed
Kentuckiana Real Estate Holdings, LLC, and Southern Indiana Real Estate Holdings, LLC, are Indiana and Kentucky-based limited liability corporations that hold certain real estate properties in those markets. In addition, FAH, LLC, WSB Realty, LLC and Flagship Acquisitions Trust, which were acquired in the Old Line Bancshares, Inc.
Added
We were pleased with the number of participants and their feedback. Wesbanco is in the process of rolling out its second survey in the first quarter of 2024 with a focus on Wesbanco culture.
Removed
CBIN Insurance Inc. is a captive insurance company, which issues policies to Wesbanco’s banking subsidiaries for certain risks that are not covered by the Company’s commercial insurances policies purchased from third-party carriers. It is in the process of winding up its business activities and is expected to be dissolved over the next 12 to 18 months.
Added
Wesbanco has held a Women’s Symposium for over 6 years and in past years, added a Diversity and Inclusion Forum. In 2023, the first, combined and in-person, Wesbanco Diversity, Equity and Inclusion Symposium event was held.
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Wesbanco ensures diversity in our workforce representation by reflecting the makeup of the community it serves. Wesbanco believes in open, honest discussion. In addition to our Women’s Symposium, which has been held for over 4 years, we have added a Diversity and Inclusion Forum as an added resource and a positive catalyst for how we conduct business.
Added
This event focused on women, multi-cultural, and LGBTQ+ leadership initiatives as well as allies and sponsors involved in the formation of Employee Resource Groups ("ERGs"). The two-day event included educational information and activities geared toward diversity in leadership and participating in future ERGs. Mentoring, allyship and sponsorship were important focuses in these learning sessions.
Removed
These inclusive programs focus on facilitating educational opportunities, sharing experiences, networking with management, and partnering with mentors. The goal is to ignite and support a passion for our employees to find both personal and professional success. Both initiatives include board, management and staff participants. In addition, we have engaged in leadership training for senior and middle management supervisors.
Added
The Dodd-Frank Act also called for regulators to issue new rules relating to incentive-based compensation arrangements deemed excessive, and authorized the SEC to adopt rules related to proxy access by shareholders. The SEC has issued proposed rules relating to excessive compensation arrangements that have not been finalized.
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As a result, Wesbanco may be forced to compete more aggressively for loans, deposits, trust and insurance products to grow its market share, potentially reducing its current and future profit potential from such markets.
Added
We have developed responsible strategies to provide targeted investment, deployment of capital, financial education, technical assistance, and innovative products and solutions that will achieve financial inclusion for all. Our vision is to create greater economic opportunities that provide the dignity of affordable housing, the empowerment of financial inclusion, the strength of successful businesses, and the sustainability of vibrant communities.
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The increase in 2022's premiums was due to higher quarterly assessment rates due to current financial ratios. In addition, the prior year included a $1.0 million refund, which was received in the second quarter of 2021 resulting from prior period call report adjustments.
Added
Wesbanco has been an active participant in America Saves Week since its inception in 2007 and this was Wesbanco’s eighth consecutive designation for savings excellence.
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Additionally, section 165(i)(2) of the Dodd-Frank Act, as amended by the EGRRCPA, requires annual company-run stress tests for bank holding companies with total consolidated assets greater than $100 billion.
Added
The Wesbanco CDC has received four allocations of New Markets Tax Credits to fund the New Markets Loan Program, and has leveraged those funds to make over 231 loans totaling over $178 million for the benefit of businesses located in low-income, economically distressed communities, and creating over 6,800 jobs.
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Business—Consumer Protection Laws”). 10 CORONAVIRUS RELIEF In response to the COVID-19 pandemic, the Coronavirus Aid, Relief and Economic Security ("CARES") Act was signed into law on March 27, 2020 to provide national emergency economic relief measures.
Added
In October 2023, the federal banking agencies, the Office of the Comptroller of the Currency, the Federal Reserve Board, and the FDIC, released an interagency final rule amending the Community Reinvestment Act.
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Many of the CARES Act’s programs are dependent upon the direct involvement of U.S. financial institutions, such as the Company and the Bank, and have been implemented through rules and guidance adopted by federal departments and agencies, including the U.S.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeIn that case, the risks associated with the transition to an alternative reference rate will be accelerated and magnified. These risks may also be increased due to the shorter time for preparing for the transition. SIGNIFICANT DECLINES IN U.S. AND GLOBAL MARKETS COULD HAVE A NEGATIVE IMPACT ON WESBANCO’S EARNINGS. The capital and credit markets could experience extreme disruption.
Biggest changeSIGNIFICANT DECLINES IN U.S. AND GLOBAL MARKETS COULD HAVE A NEGATIVE IMPACT ON WESBANCO’S EARNINGS. The capital and credit markets could experience extreme disruption. These conditions result in less liquidity, greater volatility, widening of credit spreads and a lack of price transparency in certain asset types.
Wesbanco could be materially and adversely affected if employees, clients, counterparties or other third parties caused an operational breakdown or failure, as a result of either human error, fraudulent manipulation or purposeful damage to any of our operations or systems. 20 LOSS OF KEY EMPLOYEES COULD IMPACT GROWTH AND EARNINGS AND MAY HAVE AN ADVERSE IMPACT ON BUSINESS.
Wesbanco could be materially and adversely affected if employees, clients, counterparties or other third parties caused an operational breakdown or failure, as a result of either human error, fraudulent manipulation or purposeful damage to any of our operations or systems. LOSS OF KEY EMPLOYEES COULD IMPACT GROWTH AND EARNINGS AND MAY HAVE AN ADVERSE IMPACT ON BUSINESS.
Additionally, banks and other financial institutions may have products and services not offered by Wesbanco such as new payment system technologies and cryptocurrency, which may cause current and potential customers to choose those institutions. Areas of competition include interest rates for loans and deposits, efforts to obtain deposits and range and quality of services provided.
Additionally, banks and other financial institutions may have products and services not offered by Wesbanco such as new payment system technologies and cryptocurrency, which may cause current and potential customers to choose those institutions. Areas of competition include interest rates for loans and deposits, efforts to obtain deposits and range and quality of services 17 provided.
Such disruption or breach of security may have a material adverse effect on Wesbanco’s business, financial condition, and results of operations. 22 FAILURE TO KEEP PACE WITH TECHNOLOGICAL CHANGE COULD ADVERSELY AFFECT WESBANCO’S RESULTS OF OPERATIONS AND FINANCIAL CONDITION. The financial services industry is continually undergoing rapid technological change with frequent introductions of new technology-driven products and services.
Such disruption or breach of security may have a material adverse effect on Wesbanco’s business, financial condition, and results of operations. FAILURE TO KEEP PACE WITH TECHNOLOGICAL CHANGE COULD ADVERSELY AFFECT WESBANCO’S RESULTS OF OPERATIONS AND FINANCIAL CONDITION. The financial services industry is continually undergoing rapid technological change with frequent introductions of new technology-driven products and services.
Business—Payment of Dividends.” In general, future dividend policy is subject to the discretion of the Board of Directors and will depend upon a number of factors, including Wesbanco’s and the Bank’s future earnings, liquidity and capital requirements, regulatory constraints and financial condition. 23 Volatility in the price and volume of our stock may be unfavorable.
Business—Payment of Dividends.” In general, future dividend policy is subject to the discretion of the Board of Directors and will depend upon a number of factors, including Wesbanco’s and the Bank’s future earnings, liquidity and capital requirements, regulatory constraints and financial condition. Volatility in the price and volume of our stock may be unfavorable.
ECONOMIC CONDITIONS IN WESBANCO’S MARKET AREAS COULD NEGATIVELY IMPACT EARNINGS . Wesbanco Bank serves both individuals and business customers primarily throughout West Virginia, Ohio, western Pennsylvania, Kentucky, Indiana, Maryland, northern Virginia and central Tennessee. The substantial majority of Wesbanco’s loan portfolio is to individuals and businesses in these markets.
ECONOMIC CONDITIONS IN WESBANCO’S MARKET AREAS COULD NEGATIVELY IMPACT EARNINGS . Wesbanco Bank serves both individuals and business customers primarily throughout West Virginia, Ohio, western Pennsylvania, Kentucky, Indiana, Maryland, northern Virginia and Tennessee. The substantial majority of Wesbanco’s loan portfolio is to individuals and businesses in these markets.
These voting rights will continue until dividends on the shares of Series A Preferred Stock and any such series of voting preferred stock for at least four consecutive dividend periods following the Nonpayment Event shall have been fully paid (or declared and a sum sufficient for the payment of such dividends shall have been set aside for payment).
These voting rights will continue until dividends on the shares of Series A Preferred Stock and any 21 such series of voting preferred stock for at least four consecutive dividend periods following the Nonpayment Event shall have been fully paid (or declared and a sum sufficient for the payment of such dividends shall have been set aside for payment).
An inability to raise additional capital may have a material adverse effect on our ability to expand operations, and on our financial condition, results of operations and future prospects. 21 WESBANCO’S ABILITY TO MITIGATE RISK DEPENDS ON OUR ENTERPRISE RISK MANAGEMENT FRAMEWORK.
An inability to raise additional capital may have a material adverse effect on our ability to expand operations, and on our financial condition, results of operations and future prospects. WESBANCO’S ABILITY TO MITIGATE RISK DEPENDS ON OUR ENTERPRISE RISK MANAGEMENT FRAMEWORK.
Although Wesbanco successfully raised $150 million of Series A preferred stock in 2020 and also issued $150 million of fixed-to-floating subordinated debentures in 2022, Wesbanco’s ability to raise additional Tier 1 or Tier 2 capital for parent company or banking subsidiary needs will depend on conditions and interest rates at that time in the capital markets, overall economic conditions, Wes banco’s financial performance and condition, and other factors, many of which are outside our control.
Although Wesbanco successfully raised $150 million of Series A preferred stock in 2020 and also issued $150 million of fixed-to-floating subordinated debentures in 2022, Wesbanco’s ability to raise additional Tier 1 or Tier 2 capital for parent company or banking subsidiary needs will depend on conditions and interest rates at that time in the capital markets, overall economic conditions, Wesbanco’s financial performance and condition, and other factors, many of which are outside our control.
Wesbanco conducts an annual review to determine whether goodwill and other identifiable intangible assets are impaired. Wesbanco completed such an impairment analysis in late 2022 and concluded that no impairment charge was necessary for the year ended December 31, 2022. Wesbanco cannot provide assurance that it will not be required to take an impairment charge in the future.
Wesbanco conducts an annual review to determine whether goodwill and other identifiable intangible assets are impaired. Wesbanco completed such an impairment analysis in late 2023 and concluded that no impairment charge was necessary for the year ended December 31, 2023. Wesbanco cannot provide assurance that it will not be required to take an impairment charge in the future.
Such events could affect the stability of Wesbanco’s deposit base, impair the ability of borrowers to repay outstanding loans, impair the value of collateral securing loans, impair Wesbanco’s liquidity, result in loss of revenue, and/or cause Wesbanco to incur additional expenses. 15 THE SOUNDNESS OF OTHER FINANCIAL INSTITUTIONS COULD ADVERSELY IMPACT WESBANCO.
Such events could affect the stability of Wesbanco’s deposit base, impair the ability of borrowers to repay outstanding loans, impair the value of collateral securing loans, impair Wesbanco’s liquidity, result in loss of revenue, and/or cause Wesbanco to incur additional expenses. 14 THE SOUNDNESS OF OTHER FINANCIAL INSTITUTIONS COULD ADVERSELY IMPACT WESBANCO.
Legislation and regulation of debit card fees, credit cards and other bank services, as well as changes in Wesbanco’s practices relating to those and other bank services, may affect Wesbanco’s revenue and other financial results. Additional information about increased regulation is provided in “Item 1.
Legislation and regulation of overdraft fees and charges, debit card fees, credit cards and other bank services, as well as changes in Wesbanco’s practices relating to those and other bank services, may affect Wesbanco’s revenue and other financial results. Additional information about increased regulation is provided in “Item 1.
There is a wide variety of economic conditions within the local markets of the six states in which most of the company’s CRE loan portfolio is situated. Rates of employment, consumer loan demand, household formation, and the level of economic activity can vary widely from state to state and among metropolitan areas, cities and towns.
There are a wide variety of economic conditions within the local markets of the eight states in which most of the company’s CRE loan portfolio is situated. Rates of employment, consumer loan demand, household formation, and the level of economic activity can vary widely from state to state and among metropolitan areas, cities and towns.
Wesbanco continually evaluates opportunities to acquire other businesses. However, Wesbanco may not have the opportunity to make suitable acquisitions on favorable terms in the future, which could negatively impact the growth of its business. Wesbanco expects that other banking and financial companies, many of which have significantly greater resources, will compete to acquire compatible businesses.
However, Wesbanco may not have the opportunity to make suitable acquisitions on favorable terms in the future, which could negatively impact the growth of its business. Wesbanco expects that other banking and financial companies, many of which have significantly greater resources, will compete to acquire compatible businesses.
Any material increase in our level of allowance for credit losses or expenses incurred to determine the appropriate level of the allowance for credit losses could adversely affect our business, financial condition and results of operations. Wesbanco’s regulatory agencies (FDIC and WVDIF for Wesbanco Bank, Inc. and the Federal Reserve for Wesbanco, Inc.) periodically review the allowance for credit losses.
Any material increase in our level of allowance for credit losses or expenses incurred to determine the appropriate level of the allowance for credit losses could adversely affect our business, financial condition and results of operations. Wesbanco’s regulatory agencies (FDIC and WVDFI for the Bank and the Federal Reserve for Wesbanco) periodically review the allowance for credit losses.
The increase in interest rates in 2022 caused a decrease in the fair value of securities within our investment portfolio of which the unrealized losses were recorded in other comprehensive income.
The increase in interest rates in 2023 caused a decrease in the fair value of securities within our investment portfolio of which the unrealized losses were recorded in other comprehensive income.
In addition, following periods of volatility in the overall market and the market price of a company’s securities, securities class action litigation has often been instituted against companies. This litigation, if instituted against us, could result in substantial costs and a diversion of our management’s attention and resources.
In addition, following periods of volatility in the overall market and the market price of a company’s securities, securities class action litigation has often been instituted against companies. This litigation, if instituted against us, could result in substantial costs and a diversion of our management’s attention and resource s.
If premium assessment rates were to further increase, it would negatively impact Wesbanco’s earnings. RISKS RELATED TO ESTIMATES AND ASSUMPTIONS CECL COULD RESULT IN SIGNIFICANT VOLATILITY OF THE ESTIMATION OF CREDIT LOSSES AND MAY HAVE A MATERIAL IMPACT ON OUR FINANCIAL CONDITION OR RESULTS OF OPERATIONS.
If premium assessment rates were to further increase, it would negatively impact Wesbanco’s earnings. 16 RISKS RELATED TO ESTIMATES AND ASSUMPTIONS THE CURRENT EXPECTED CREDIT LOSSES ACCOUNTING STANDARD ("CECL") COULD RESULT IN SIGNIFICANT VOLATILITY OF THE ESTIMATION OF CREDIT LOSSES AND MAY HAVE A MATERIAL IMPACT ON OUR FINANCIAL CONDITION OR RESULTS OF OPERATIONS.
Wesbanco’s goodwill was approximately $1.1 billion or 45% and $1.1 billion or 41% of stockholders’ equity as of December 31, 2022 and 2021, respectively. Under current accounting standards, if Wesbanco determines that goodwill 18 or intangible assets are impaired, it is required to write down the carrying value of these assets.
Wesbanco’s goodwill was approximately $1.1 billion or 43% and $1.1 billion or 45% of stockholders’ equity as of December 31, 2023 and 2022, respectively. Under current accounting standards, if Wesbanco determines that goodwill or intangible assets are impaired, it is required to write down the carrying value of these assets.
The current United States administration has indicated that it may propose significant changes with respect to a variety of issues, including international trade agreements, import and export regulations, tariffs and customs duties, foreign relations, tax laws, corporate governance laws and corporate fuel economy standards, that could have a positive or negative impact on Wesbanco’s business and the Bank’s customers including those in the wholesale and distribution, manufacturing and retail industries. 14 WESBANCO IS SUBJECT TO EXTENSIVE GOVERNMENT REGULATION AND SUPERVISION.
The current United States administration has indicated that it may propose significant changes with respect to a variety of issues, including international trade agreements, import and export regulations, tariffs and customs duties, 13 foreign relations, tax laws, corporate governance laws and corporate fuel economy standards, that could have a positive or negative impact on Wesbanco’s business and the Bank’s customers including those in the wholesale and distribution, manufacturing and retail industries.
As of December 31, 2022, Wesbanco had $133.5 million in junior subordinated debt presented as a separate category of long-term debt on its Consolidated Balance Sheets. For regulatory purposes, Trust Preferred Securities totaling $130.0 million underlying such junior subordinated debt were previously included in Tier 1 capital in accordance with regulatory reporting requirements prior to December 31, 2019.
As of December 31, 2023, Wesbanco had $131.0 million in junior subordinated debt presented as a separate category of long-term debt on its Consolidated Balance Sheets. For regulatory purposes, Trust Preferred Securities totaling $126.9 million underlying such junior subordinated debt were previously included in Tier 1 capital in accordance with regulatory reporting requirements prior to December 31, 2019.
GLOBAL pandemics COULD adversely affect THE OPERATIONS OF us and our customers. The spread of global pandemics could create a global public-health crisis, as previously seen with that of the COVID-19 pandemic, that can result in widespread volatility and deteriorations in household, business, economic, and market conditions.
The spread of global pandemics could create a global public-health crisis, as previously seen with that of the COVID-19 pandemic, that can result in widespread volatility and deteriorations in household, business, economic, and market conditions.
As a result of the high concentration of the company’s loan portfolio, it may be more sensitive, as compared to more diversified institutions, to future disruptions in and deterioration of this market, which could lead to losses, which could have a material adverse effect on the business, financial condition and results of operations of the company. 17 RISKS INHERENT IN MUNICIPAL BONDS COULD HAVE A NEGATIVE IMPACT ON WESBANCO’S EARNINGS.
As a result of the high concentration of the company’s loan portfolio, it may be more sensitive, as compared to more diversified institutions, to future disruptions in and deterioration of this market, which could lead to losses, which could have a material adverse effect on the business, financial condition and results of operations of the company.
Due to changes in economic conditions, the performance of the trust and investment services segment may be negatively impacted by the financial markets in which investment clients’ assets are invested, causing clients to seek other alternative investment options.
Due to changes in economic conditions, the performance of the trust and investment services segment may be negatively impacted by the financial markets in which investment clients’ assets are invested, causing clients to seek other alternative investment options. If Wesbanco is not successful, its results from operations and financial position may be negatively impacted.
The occurrence of any such failure, disruption or security breach of Wesbanco’s information systems, particularly if widespread or resulting in financial losses to our customers, could damage Wesbanco’s reputation, result in a loss of customer business, subject Wesbanco to additional regulatory scrutiny, and expose Wesbanco to civil litigation and possible financial liability.
Such an attack could result in significant costs to the bank, such as costs to reimburse customers, reissue debit cards and open new customer accounts. 20 The occurrence of any such failure, disruption or security breach of Wesbanco’s information systems, particularly if widespread or resulting in financial losses to our customers, could damage Wesbanco’s reputation, result in a loss of customer business, subject Wesbanco to additional regulatory scrutiny, and expose Wesbanco to civil litigation and possible financial liability.
In addition, a portion of Wesbanco’s municipal portfolio is comprised of Build America bonds. Due to the government sequester reducing the interest subsidy that the government provides to the issuing municipalities, extraordinary redemption provisions ("ERP") may be executed by the municipality if it is in their favor to do so.
Due to the government sequester reducing the interest subsidy that the government provides to the issuing municipalities, extraordinary redemption provisions ("ERP") may be executed by the municipality if it is in their favor to do so.
The cyclical nature of real estate markets can cause CRE loans to suffer considerable distress. During these times of distress, a property’s performance can be negatively affected by tenants’ deteriorating credit strength and lease expirations in times of softening demand caused by economic deterioration or over-supply conditions.
During these times of distress, a property’s performance can be negatively affected by tenants’ deteriorating credit strength and lease expirations in times of softening demand caused by economic deterioration or over-supply conditions.
No assurance can be given that Wesbanco will be successful overcoming the risks as disclosed above. The risks associated with entering into a new market and any inability to overcome these risks could have a material adverse effect on our business, financial condition or results of operations. SUITABLE ACQUISITION OPPORTUNITIES MAY NOT BE AVAILABLE TO WESBANCO IN THE FUTURE.
The risks associated with entering into a new market and any inability to overcome these risks could have a material adverse effect on our business, financial condition or results of operations. SUITABLE ACQUISITION OPPORTUNITIES MAY NOT BE AVAILABLE TO WESBANCO IN THE FUTURE. Wesbanco continually evaluates opportunities to acquire other businesses.
Wesbanco monitors the level and mix of interest-rate sensitive assets and liabilities through its Asset/Liability Committee ("ALCO") in order to reduce the impact of inflation on net interest income. Management may not be able to control the effects of inflation as needed and the results may adversely impact results of operations.
Wesbanco monitors the level and mix of interest-rate sensitive assets and liabilities through its Asset/Liability Committee ("ALCO") in order to reduce the impact of inflation on net interest income.
Federal and state banking regulators require Wesbanco and its banking subsidiary, Wesbanco Bank, to maintain adequate levels of capital to support its operations. In addition, in the future Wesbanco may need to raise additional capital to support its business or to finance acquisitions, if any, or Wesbanco may otherwise elect to raise additional capital in anticipation of future growth opportunities.
In addition, in the future Wesbanco may need to raise additional capital to support its business or to finance acquisitions, if any, or Wesbanco may otherwise elect to raise additional capital in anticipation of future growth opportunities.
As of December 31, 2022, approximately 34% of Wesbanco’s total securities portfolio was invested in municipal bonds. Although Wesbanco’s municipal portfolio is broadly spread across the U.S., any downturn in the economy of a state or municipality in which Wesbanco holds municipal obligations could increase the default risk of the respective debt.
Although Wesbanco’s municipal portfolio is broadly spread across the U.S., any downturn in the economy of a state or municipality in which Wesbanco holds municipal obligations could increase the default risk of the respective debt. In addition, a portion of Wesbanco’s municipal portfolio is comprised of Build America bonds.
Wesbanco may acquire other financial institutions, or branches or assets of other financial institutions, in the future. Wesbanco may also open new branches and enter into new lines of business or offer new products or services.
Wesbanco may also open new branches and enter into new lines of business or offer new products or services.
We can give no assurance that integration efforts for any future acquisitions will be successful. Our inability to successfully integrate future acquisitions could have a material adverse effect on our business, financial condition or results of operations. In addition, we may issue equity securities in connection with acquisitions, which could dilute the economic and voting interests of our existing shareholders.
We can give no assurance that integration efforts for any future acquisitions will be successful. Our inability to successfully integrate future acquisitions could have a material adverse effect on our business, financial condition or results of operations.
Wesbanco is subject to extensive federal and state regulation, supervision and examination. Banking regulations are primarily intended to protect depositors’ funds, federal deposit insurance funds and the banking system as a whole, rather than corporate shareholders. These regulations affect Wesbanco’s lending practices, capital structure, investment practices, dividend policy, operations and growth, among other things.
WESBANCO IS SUBJECT TO EXTENSIVE GOVERNMENT REGULATION AND SUPERVISION. Wesbanco is subject to extensive federal and state regulation, supervision and examination. Banking regulations are primarily intended to protect depositors’ funds, federal deposit insurance funds and the banking system as a whole, rather than corporate shareholders.
Cyber-attacks on third party retailers or other business establishments that widely accept debit card or check payments could compromise sensitive bank customer information, such as debit card and account numbers. Such an attack could result in significant costs to the bank, such as costs to reimburse customers, reissue debit cards and open new customer accounts.
Cyber-attacks on third party retailers or other business establishments that widely accept debit card or check payments could compromise sensitive bank customer information, such as debit card and account numbers.
These conditions result in less liquidity, greater volatility, widening of credit spreads and a lack of price transparency in certain asset types. In many cases, markets could exert downward pressure on stock prices, security prices and credit capacity for certain issuers without regard to those issuers’ underlying financial strength.
In many cases, markets could exert downward pressure on stock prices, security prices and credit capacity for certain issuers without regard to those issuers’ underlying financial strength.
Such entities may not be profitable after they are purchased or established, and they may lose money or be dilutive to earnings per share, particularly for the first few years. A new bank or company may bring with it unexpected liabilities, bad loans, or poor employee relations, or the new bank or company may lose customers and the associated revenue.
Such entities may not be profitable after they are purchased or established, and they may lose money or be dilutive to earnings per share, particularly for the first few years.
If Wesbanco is not successful, its results from operations and financial position may be negatively impacted. 19 FUTURE EXPANSION BY WESBANCO MAY ADVERSELY AFFECT OUR FINANCIAL CONDITION AND RESULTS OF OPERATIONS AS WELL AS DILUTE THE INTERESTS OF OUR SHAREHOLDERS AND NEGATIVELY AFFECT THE PRICE OF OUR COMMON STOCK.
FUTURE EXPANSION BY WESBANCO MAY ADVERSELY AFFECT OUR FINANCIAL CONDITION AND RESULTS OF OPERATIONS AS WELL AS DILUTE THE INTERESTS OF OUR SHAREHOLDERS AND NEGATIVELY AFFECT THE PRICE OF OUR COMMON STOCK. Wesbanco may acquire other financial institutions, or branches or assets of other financial institutions, in the future.
A HIGH PERCENTAGE OF WESBANCO’S LOAN PORTFOLIO IS IN WEST VIRGINIA, OHIO, PENNSYLVANIA, KENTUCKY, INDIANA, MARYLAND, VIRGINIA AND TENNESSEE AND IN COMMERCIAL AND RESIDENTIAL REAL ESTATE. DETERIORATIONS IN ECONOMIC CONDITIONS IN THIS AREA OR IN THE REAL ESTATE MARKET GENERALLY COULD BE MORE HARMFUL TO THE COMPANY COMPARED TO MORE DIVERSIFIED INSTITUTIONS.
DETERIORATIONS IN ECONOMIC CONDITIONS IN THIS AREA OR IN THE REAL ESTATE MARKET GENERALLY COULD BE MORE HARMFUL TO THE COMPANY COMPARED TO MORE DIVERSIFIED INSTITUTIONS. As of December 31, 2023, approximately 21% of Wesbanco’s loan portfolio was comprised of residential real estate loans, and 56% was comprised of commercial real estate loans.
These regulations also impose obligations to maintain appropriate policies, procedure and controls. Congress and federal regulatory agencies continually review banking laws, regulations and policies for possible changes. Changes to statutes, regulations or regulatory policies, including changes in interpretation or implementation of statutes, regulations or policies, could affect Wesbanco in substantial and unpredictable ways.
Changes to statutes, regulations or regulatory policies, including changes in interpretation or implementation of statutes, regulations or policies, could affect Wesbanco in substantial and unpredictable ways.
Since crossing over $10 billion in total assets in 2018, Wesbanco Bank’s FDIC insurance premiums have increased due to a higher assessment rate based on a more complex calculation that includes Wesbanco Bank’s CAMELS ratings, its ability to withstand asset-related and funding-related stress and potential loss severity of its assets.
The insurance premium is based on an assessment rate that utilizes a complex calculation that includes Wesbanco Bank’s CAMELS ratings, its ability to withstand asset-related and funding-related stress and potential loss severity of its assets. The FDIC periodically raises the base rate to ensure the Deposit Insurance Fund ("DIF") is at an appropriate level.
As of December 31, 2022, approximately 20% of Wesbanco’s loan portfolio was comprised of residential real estate loans, and 57% was comprised of commercial real estate loans. Inherent risks of commercial real estate (“CRE”) lending include the cyclical nature of the real estate market, construction risk and interest rate risk.
Inherent risks of commercial real estate (“CRE”) lending include the cyclical nature of the real estate market, construction risk and interest rate risk. The cyclical nature of real estate markets can cause CRE loans to suffer considerable distress.
Dilution of book and tangible book value may occur as a result of an acquisition that may not be earned back for several years, if at all. WESBANCO MAY NEED TO RAISE CAPITAL IN THE FUTURE, BUT CAPITAL MAY NOT BE AVAILABLE WHEN NEEDED OR AT ACCEPTABLE TERMS.
A new bank or company may bring with it unexpected liabilities, bad loans, or poor employee relations, or the new bank or 19 company may lose customers and the associated revenue. Dilution of book and tangible book value may occur as a result of an acquisition that may not be earned back for several years, if at all.
Removed
INTEREST RATES ON WESBANCO’S OUTSTANDING FINANCIAL INSTRUMENTS MIGHT BE SUBJECT TO CHANGE BASED ON THE REPLACEMENT OF LIBOR. London Interbank Offered Rate (“LIBOR”) and certain other “benchmarks” are the subject of recent national, international, and other regulatory guidance and proposals for reform.
Added
We are in the process of enhancing our climate and environmental, social and corporate governance ("ESG") risk considerations into our risk framework and risk management programs established for strategic, credit, market, compliance, operational and reputational risks. The potential of climate risk is monitored through our risk identification process.
Removed
These reforms may cause such benchmarks to become unavailable, to perform differently than in the past or have other consequences, which cannot be predicted. On July 27, 2017, the United Kingdom’s Financial Conduct Authority ("FCA"), which regulates LIBOR, publicly announced that it intended to stop persuading or compelling banks to submit LIBOR rates after 2021.
Added
Once identified, climate risks are assessed for potential impacts on us and our customers. These future enhancements to our risk framework are in development and will continue to be refined as new climate trends and risks arise. GLOBAL pandemics COULD adversely affect THE OPERATIONS OF us and our customers.
Removed
The Federal Reserve Board has identified the Secured Overnight Financing Rate (“SOFR”) as the preferred reference rate alternative to LIBOR for loan pricing and hedge accounting purposes.
Added
These regulations affect Wesbanco’s lending practices, capital structure, investment practices, dividend policy, operations and growth, among other things. These regulations also impose obligations to maintain appropriate policies, procedure and controls. Congress and federal regulatory agencies continually review banking laws, regulations and policies for possible changes.
Removed
Once LIBOR is discontinued, if the proposed replacement rate for LIBOR differs materially from LIBOR, interest rates on our floating rate obligations, loans, deposits, derivatives, and other financial instruments tied to LIBOR rates, as well as the revenue and expenses associated with those financial instruments, may be adversely affected.
Added
Management may not be able to control the effects of inflation as needed and the results may adversely impact results of operations. 15 A HIGH PERCENTAGE OF WESBANCO’S LOAN PORTFOLIO IS IN WEST VIRGINIA, OHIO, PENNSYLVANIA, KENTUCKY, INDIANA, MARYLAND, VIRGINIA AND TENNESSEE AND IN COMMERCIAL AND RESIDENTIAL REAL ESTATE.
Removed
Further, any uncertainty regarding the continued use and reliability of LIBOR as a benchmark interest rate could adversely affect the value of our floating rate obligations, loans, deposits, derivatives, and other financial instruments tied to LIBOR rates. On March 5, 2021, the U.K.
Added
RISKS INHERENT IN MUNICIPAL BONDS COULD HAVE A NEGATIVE IMPACT ON WESBANCO’S EARNINGS. As of December 31, 2023, approximately 36% of Wesbanco’s total securities portfolio was invested in municipal bonds.
Removed
FCA and Intercontinental Exchange (“ICE”) Benchmark Administration announced that the publication of the overnight, as well as, the one, three, six, and twelve month LIBOR rates will continue to be published through June 30, 2023.
Added
In addition, 18 we may issue equity securities in connection with acquisitions, which could dilute the economic and voting interests of our existing shareholders. No assurance can be given that Wesbanco will be successful overcoming the risks as disclosed above.
Removed
On October 20, 2021, the Federal Reserve Board, the Office of the Comptroller of the Currency ("OCC"), and the Federal Deposit Insurance Corporation along with the Consumer Financial Protection Bureau, National Credit Union Administration, and State Bank and Credit Union Regulators, issued an additional Joint Statement on Managing the LIBOR Transition to once again emphasize the expectation that supervised institutions with LIBOR exposure continue to progress toward an orderly transition away from LIBOR.
Added
WESBANCO MAY NEED TO RAISE CAPITAL IN THE FUTURE, BUT CAPITAL MAY NOT BE AVAILABLE WHEN NEEDED OR AT ACCEPTABLE TERMS. Federal and state banking regulators require Wesbanco and its banking subsidiary, Wesbanco Bank, to maintain adequate levels of capital to support its operations.
Removed
The statement confirmed that entering into new contracts, including derivatives that use LIBOR as a reference rate after December 31, 2021, would create safety and soundness risks, including litigation, operational, and consumer protection risks. On March 15, 2022, President Biden signed the Adjustable Interest Rate (LIBOR) Act into law (the “LIBOR Act”).
Removed
The LIBOR Act provides a clear and uniform federal solution for transitioning legacy contracts that either lack or contain insufficient contractual provisions addressing the permanent cessation of LIBOR by providing for the transition from LIBOR to a replacement rate and avoiding related litigation. 16 Transitioning from LIBOR to alternative rates also may result in operational errors during the transition such that the replacement rate is not applied in a timely manner or is incorrectly applied.
Removed
This is particularly true given the volume of contracts that will require transition and the diversity of potential approaches to transition and given the possibility that the period during which the transition will need to take place may have a short duration.
Removed
Similarly, our failure to successfully implement transition from LIBOR to alternative rates could result in regulatory scrutiny and actions by our regulators including fines and other supervisory sanctions. It is also possible that LIBOR quotes will become unavailable prior to the currently anticipated cessation dates.

Item 2. Properties

Properties — owned and leased real estate

2 edited+0 added−0 removed3 unchanged
Biggest changeAt various building locations, Wesbanco rents or makes available commercial office space to unrelated businesses. Rental income totaled $1.7 million, $1.8 million and $1.8 million in 2022, 2021 and 2020, respectively. For additional disclosures related to Wesbanco’s properties, other fixed assets and leases, please refer to Note 5, “Premises and Equipment” in the Consolidated Financial Statements.
Biggest changeAt various building locations, Wesbanco rents or makes available commercial office space to unrelated businesses. Rental income totaled $1.6 million, $1.7 million and $1.8 million in 2023, 2022 and 2021, respectively. For additional disclosures related to Wesbanco’s properties, other fixed assets and leases, please refer to Note 5, “Premises and Equipment” in the Consolidated Financial Statements. 23
ITEM 2. PR OPERTIES Wesbanco’s subsidiaries generally own their respective offices, related facilities and any unimproved real property held for future expansion. At December 31, 2022, Wesbanco operated 194 banking offices in West Virginia, Ohio, western Pennsylvania, Kentucky, southern Indiana and Maryland, of which 141 were owned and 53 were leased.
ITEM 2. PR OPERTIES Wesbanco’s subsidiaries generally own their respective offices, related facilities and any unimproved real property held for future expansion. At December 31, 2023, Wesbanco operated 192 banking offices in West Virginia, Ohio, western Pennsylvania, Kentucky, southern Indiana and Maryland, of which 141 were owned and 51 were leased.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

7 edited+1 added−1 removed1 unchanged
Biggest changeSecurity Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.” The following table shows the activity in Wesbanco’s stock repurchase plan and other purchases for the quarter ended December 31, 2022: Period Total Number of Shares Purchased (1) Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plans (2) Maximum Number of Shares that May Yet Be Purchased Under the Plans Balance at September 30, 2022 1,341,234 October 1, 2022 to October 31, 2022 184,177 $ 35.08 156,633 1,184,601 November 1, 2022 to November 30, 2022 1,148 40.26 — 1,184,601 December 1, 2022 to December 31, 2022 1,035 37.68 — 1,184,601 Total 186,360 $ 35.13 156,633 1,184,601 (1) Total shares purchased consist of open market purchases in the KSOP and dividend reinvestment plans and open market purchases for general corporate purposes.
Biggest changeSecurity Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.” The following table shows the activity in Wesbanco's stock repurchase plan and other purchases for the quarter ended December 31, 2023: Period Total Number of Shares Purchased (1) Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plans (2) Maximum Number of Shares that May Yet Be Purchased Under the Plans Balance at September 30, 2023 1,021,901 October 1, 2023 to October 31, 2023 37,129 $ 24.49 — 1,021,901 November 1, 2023 to November 30, 2023 1,239 26.88 — 1,021,901 December 1, 2023 to December 31, 2023 1,308 29.76 — 1,021,901 Total 39,676 $ 24.74 — 1,021,901 ______ (1) Total shares purchased consist of open market purchases transacted in the 401(k) for employee benefit and dividend reinvestment plans.
As of December 31, 2022, Wesbanco had one active stock repurchase plan which was approved by the Board of Directors on February 24, 2022 for 3.2 million shares. This plan provides for shares to be repurchased for general corporate purposes, which may include a subsequent resource for potential acquisitions, shareholder dividend reinvestment and/or employee benefit plans.
As of December 31, 2023, Wesbanco had one active stock repurchase plan which was approved by the Board of Directors on February 24, 2022 for 3.2 million shares. This plan provides for shares to be repurchased for general corporate purposes, which may include a subsequent resource for potential acquisitions, shareholder dividend reinvestment and/or employee benefit plans.
The total shareholder return assumes a $100 investment in the common stock of Wesbanco and each index since December 31, 2017 with reinvestment of dividends.
The total shareholder return assumes a $100 investment in the common stock of Wesbanco and each index since December 31, 2018 with reinvestment of dividends.
The number of holders does not include Wesbanco employees who have purchased stock or had stock allocated to them through Wesbanco’s Employee Stock Ownership and 401(k) plan (the “KSOP”). All Wesbanco employees who meet the eligibility requirements of the KSOP are included in this retirement plan.
The number of holders does not include Wesbanco employees who have purchased stock or had stock allocated to them through Wesbanco’s Employee Stock Ownership and 401(k) plan (the “401(k)”). All Wesbanco employees who meet the eligibility requirements of the 401(k) are included in this retirement plan.
The timing, price and quantity of purchases are at the discretion of Wesbanco, and the plan may be discontinued or suspended at any time. The plan has 1,184,601 shares remaining for repurchase. Repurchases in the fourth quarter included open market purchases and those for the KSOP and dividend reinvestment plans.
The timing, price and quantity of purchases are at the discretion of Wesbanco, and the plan may be discontinued or suspended at any time. The plan has 1,021,901 shares remaining for repurchase. Repurchases in the fourth quarter included open market purchases and those for the 401(k) and dividend reinvestment plans.
ITEM 5. MARKET FOR THE REGISTRANT’S COMMON EQUITY, RELATED S TOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Wesbanco’s common stock is quoted on the Nasdaq Global Select Stock Market under the symbol WSBC. The approximate number of record holders of Wesbanco’s $2.0833 par value common stock as of February 15, 2023 was 7,181.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED S TOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Wesbanco’s common stock is quoted on the Nasdaq Global Select Stock Market under the symbol WSBC. The approximate number of record holders of Wesbanco’s $2.0833 par value common stock as of February 14, 2024 was 6,887.
(2) Represents only open market repurchases for general corporate purposes. 26 The following graph shows a comparison of cumulative total shareholder returns for Wesbanco, the Russell 2000 Index and the S&P Regional Banks Select Industry Index.
(2) Consists of open market purchases and shares purchased from employees for the payment of withholding taxes to facilitate a stock compensation transaction. 25 The following graph shows a comparison of cumulative total shareholder returns for Wesbanco, the Russell 2000 Index and the S&P Regional Banks Select Industry Index.
Removed
Period Ending December 31, December 31, December 31, December 31, December 31, December 31, Index 2017 2018 2019 2020 2021 2022 Wesbanco, Inc. 100.00 92.61 98.67 82.44 99.98 109.86 Russell 2000 100.00 88.99 111.70 134.00 153.85 122.41 S&P Regional Banks Select Industry Index 100.00 81.23 103.68 96.33 134.76 114.88
Added
Period Ending December 31, December 31, December 31, December 31, December 31, December 31, Index 2018 2019 2020 2021 2022 2023 Wesbanco, Inc. 100.00 106.54 89.01 107.95 118.62 105.70 Russell 2000 100.00 125.53 150.58 172.90 137.56 160.85 S&P Regional Banks Select Industry Index 100.00 127.64 118.58 165.90 141.42 130.91

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

233 edited+54 added−100 removed149 unchanged
Biggest changeFor the years ended December 31, (dollars in thousands, except per share amounts) 2022 2021 2020 Tangible common equity to tangible assets: Total shareholders’ equity $ 2,426,662 $ 2,693,166 $ 2,756,737 Less: goodwill and other intangible assets, net of deferred tax liability (1,131,990 ) (1,140,111 ) (1,149,161 ) Tangible equity 1,294,672 1,553,055 1,607,576 Less: preferred shareholders' equity (144,484 ) (144,484 ) (144,484 ) Tangible common equity 1,150,188 1,408,571 1,463,092 Total assets 16,931,905 16,927,125 16,425,610 Less: goodwill and other intangible assets, net of deferred tax liability (1,131,990 ) (1,140,111 ) (1,149,161 ) Tangible assets $ 15,799,915 $ 15,787,014 $ 15,276,449 Tangible equity to tangible assets 8.19 % 9.84 % 10.52 % Tangible common equity to tangible assets 7.28 % 8.92 % 9.58 % Tangible book value per share: Total shareholders’ equity $ 2,426,662 $ 2,693,166 $ 2,756,737 Less: goodwill and other intangible assets, net of deferred tax liability (1,131,990 ) (1,140,111 ) (1,149,161 ) Less: preferred shareholders' equity (144,484 ) (144,484 ) (144,484 ) Tangible common equity 1,150,188 1,408,571 1,463,092 Common shares outstanding 59,198,963 62,307,245 67,254,706 Tangible book value per share at year end $ 19.43 $ 22.61 $ 21.75 Return on average tangible equity: Net income available to common shareholders $ 181,988 $ 232,135 $ 119,400 Add: amortization of intangibles, net of tax 8,120 9,051 10,595 Net income available to common shareholders before amortization of intangibles 190,108 241,186 129,995 Average total shareholders’ equity 2,515,509 2,764,337 2,651,402 Less: average goodwill and other intangibles, net of deferred tax liability (1,136,062 ) (1,144,698 ) (1,141,528 ) Average tangible equity $ 1,379,447 $ 1,619,639 $ 1,509,874 Return on average tangible equity 13.78 % 14.89 % 8.61 % Average tangible common equity $ 1,234,963 $ 1,475,155 $ 1,453,363 Return on average tangible common equity 15.39 % 16.35 % 8.94 % Return on average tangible assets: Net income available to common shareholders $ 181,988 $ 232,135 $ 119,400 Add: amortization of intangibles, net of tax 8,120 9,051 10,595 Net income before amortization of intangibles 190,108 241,186 129,995 Average total assets 16,879,541 16,928,377 16,442,704 Less: average goodwill and other intangibles, net of deferred tax liability (1,136,062 ) (1,144,698 ) (1,141,528 ) Average tangible assets $ 15,743,479 $ 15,783,679 $ 15,301,176 Return on average tangible assets 1.21 % 1.53 % 0.85 % Efficiency ratio: Non-interest expense $ 356,966 $ 353,143 $ 354,845 Less: restructuring and merger-related expense (1,723 ) (6,717 ) (9,725 ) Non-interest expense excluding restructuring and merger-related expense 355,243 346,426 345,120 Net interest income on a fully-taxable equivalent basis 479,315 462,229 483,999 Non-interest income 117,391 132,785 128,185 Net interest income on a fully-taxable equivalent basis plus non-interest income $ 596,706 $ 595,014 $ 612,184 Efficiency ratio 59.53 % 58.22 % 56.38 % Net income per common shareholders, excluding after-tax restructuring and merger-related expenses: Net income available to common shareholders $ 181,988 $ 232,135 $ 119,400 Add: after-tax restructuring and merger-related expenses (1) 1,361 5,306 7,683 Net income per common shareholders, excluding after-tax restructuring and merger-related expenses $ 183,349 $ 237,441 $ 127,083 33 For the years ended December 31, (dollars in thousands, except per share amounts) 2022 2021 2020 Net income per common share - diluted, excluding after-tax restructuring and merger-related expenses: Net income per common share - diluted $ 3.02 $ 3.53 $ 1.77 Add: after-tax restructuring and merger-related expenses per common share - diluted (1) 0.02 0.09 0.11 Net income per common share - diluted, excluding after-tax restructuring and merger-related expenses $ 3.04 $ 3.62 $ 1.88 Return on average equity, excluding after-tax restructuring and merger-related expenses: Net income available to common shareholders $ 181,988 $ 232,135 $ 119,400 Add: after-tax restructuring and merger-related expenses (1) 1,361 5,306 7,683 Net income available to common shareholders, excluding after-tax restructuring and merger-related expenses 183,349 237,441 127,083 Average total shareholders’ equity $ 2,515,509 $ 2,764,337 $ 2,651,402 Return on average equity, excluding after-tax restructuring and merger-related expenses 7.29 % 8.59 % 4.79 % Return on average tangible equity, excluding after-tax restructuring and merger-related expenses: Net income available to common shareholders $ 181,988 $ 232,135 $ 119,400 Add: after-tax restructuring and merger-related expenses (1) 1,361 5,306 7,683 Add: amortization of intangibles, net of tax 8,120 9,051 10,595 Net income available to common shareholders before amortization of intangibles and excluding after-tax restructuring and merger-related expenses 191,469 246,492 137,678 Average total shareholders’ equity 2,515,509 2,764,337 2,651,402 Less: average goodwill and other intangibles, net of deferred tax liability (1,136,062 ) (1,144,698 ) (1,141,528 ) Average tangible equity $ 1,379,447 $ 1,619,639 $ 1,509,874 Return on average tangible equity, excluding after-tax restructuring and merger-related expenses 13.88 % 15.22 % 9.12 % Average tangible common equity $ 1,234,963 $ 1,475,155 $ 1,453,363 Return on average tangible common equity, excluding after-tax restructuring and merger-related expenses 15.50 % 16.71 % 9.47 % Return on average assets, excluding after-tax restructuring and merger-related expenses: Net income available to common shareholders $ 181,988 $ 232,135 $ 119,400 Add: after-tax restructuring and merger-related expenses (1) 1,361 5,306 7,683 Net income available to common shareholders, excluding after-tax restructuring and merger-related expenses 183,349 237,441 127,083 Average total assets $ 16,879,541 $ 16,928,377 $ 16,442,704 Return on average tangible assets, excluding after-tax restructuring and merger-related expenses 1.09 % 1.40 % 0.77 % Return on average tangible assets, excluding after-tax restructuring and merger-related expenses: Net income available to common shareholders $ 181,988 $ 232,135 $ 119,400 Add: amortization of intangibles, net of tax 8,120 9,051 10,595 Add: after-tax restructuring and merger-related expenses (1) 1,361 5,306 7,683 Net income available to common shareholders, before amortization of intangibles and excluding after-tax restructuring and merger-related expenses 191,469 246,492 137,678 Average total assets 16,879,541 16,928,377 16,442,704 Less: average goodwill and other intangibles, net of deferred tax liability (1,136,062 ) (1,144,698 ) (1,141,528 ) Average tangible assets $ 15,743,479 $ 15,783,679 $ 15,301,176 Return on average tangible assets, excluding after-tax restructuring and merger-related expenses 1.22 % 1.56 % 0.90 % Dividend payout ratio, excluding after-tax restructuring and merger related expenses: Dividends declared per common share $ 1.37 $ 1.32 $ 1.28 Net income per common share - diluted 3.02 3.53 1.77 Add: after-tax restructuring and merger-related expenses per diluted share (1) 0.02 0.09 0.11 Net income per common share - diluted, excluding after-tax restructuring and merger-related expenses $ 3.04 $ 3.62 $ 1.88 Dividend payout ratio, excluding after-tax restructuring and merger related expenses 45.07 36.46 68.09 (1) Tax effected at 21% for all periods presented. 34 RESULTS OF OPERATIONS EARNINGS SUMMARY For the twelve months ending December 31, 2022, net income available to common shareholders was $182.0 million, or $3.02 per diluted share, compared to $232.1 million, or $3.53 per diluted share, for 2021, which included a release of provision for credit losses of $64.3 million, or $51.6 million net of tax.
Biggest changeFor the years ended December 31, (dollars in thousands, except per share amounts) 2023 2022 2021 Tangible common equity to tangible assets: Total shareholders’ equity $ 2,533,062 $ 2,426,662 $ 2,693,166 Less: goodwill and other intangible assets, net of deferred tax liability (1,124,811 ) (1,131,990 ) (1,140,111 ) Tangible equity 1,408,251 1,294,672 1,553,055 Less: preferred shareholders' equity (144,484 ) (144,484 ) (144,484 ) Tangible common equity 1,263,767 1,150,188 1,408,571 Total assets 17,712,374 16,931,905 16,927,125 Less: goodwill and other intangible assets, net of deferred tax liability (1,124,811 ) (1,131,990 ) (1,140,111 ) Tangible assets $ 16,587,563 $ 15,799,915 $ 15,787,014 Tangible equity to tangible assets 8.49 % 8.19 % 9.84 % Tangible common equity to tangible assets 7.62 % 7.28 % 8.92 % Tangible book value per share: Total shareholders’ equity $ 2,533,062 $ 2,426,662 $ 2,693,166 Less: goodwill and other intangible assets, net of deferred tax liability (1,124,811 ) (1,131,990 ) (1,140,111 ) Less: preferred shareholders' equity (144,484 ) (144,484 ) (144,484 ) Tangible common equity 1,263,767 1,150,188 1,408,571 Common shares outstanding 59,376,435 59,198,963 62,307,245 Tangible book value per share at year end $ 21.28 $ 19.43 $ 22.61 Return on average tangible equity: Net income available to common shareholders $ 148,907 $ 181,988 $ 232,135 Add: amortization of intangibles, net of tax 7,180 8,120 9,051 Net income available to common shareholders before amortization of intangibles 156,087 190,108 241,186 Average total shareholders’ equity 2,474,627 2,515,509 2,764,337 Less: average goodwill and other intangibles, net of deferred tax liability (1,128,277 ) (1,136,062 ) (1,144,698 ) Average tangible equity $ 1,346,350 $ 1,379,447 $ 1,619,639 Return on average tangible equity 11.59 % 13.78 % 14.89 % Average tangible common equity $ 1,201,866 $ 1,234,963 $ 1,475,155 Return on average tangible common equity 12.99 % 15.39 % 16.35 % Return on average tangible assets: Net income available to common shareholders $ 148,907 $ 181,988 $ 232,135 Add: amortization of intangibles, net of tax 7,180 8,120 9,051 Net income before amortization of intangibles 156,087 190,108 241,186 Average total assets 17,259,720 16,879,541 16,928,377 Less: average goodwill and other intangibles, net of deferred tax liability (1,128,277 ) (1,136,062 ) (1,144,698 ) Average tangible assets $ 16,131,443 $ 15,743,479 $ 15,783,679 Return on average tangible assets 0.97 % 1.21 % 1.53 % Efficiency ratio: Non-interest expense $ 390,002 $ 356,966 $ 353,143 Less: restructuring and merger-related expense (3,830 ) (1,723 ) (6,717 ) Non-interest expense excluding restructuring and merger-related expense 386,172 355,243 346,426 Net interest income on a fully-taxable equivalent basis 486,343 479,315 462,229 Non-interest income 120,447 117,391 132,785 Net interest income on a fully-taxable equivalent basis plus non-interest income $ 606,790 $ 596,706 $ 595,014 Efficiency ratio 63.64 % 59.53 % 58.22 % Net income per common shareholders, excluding after-tax restructuring and merger-related expenses: Net income available to common shareholders $ 148,907 $ 181,988 $ 232,135 Add: after-tax restructuring and merger-related expenses (1) 3,026 1,361 5,306 Net income per common shareholders, excluding after-tax restructuring and merger-related expenses $ 151,933 $ 183,349 $ 237,441 32 For the years ended December 31, (dollars in thousands, except per share amounts) 2023 2022 2021 Net income per common share - diluted, excluding after-tax restructuring and merger-related expenses: Net income per common share - diluted $ 2.51 $ 3.02 $ 3.53 Add: after-tax restructuring and merger-related expenses per common share - diluted (1) 0.05 0.02 0.09 Net income per common share - diluted, excluding after-tax restructuring and merger-related expenses $ 2.56 $ 3.04 $ 3.62 Return on average equity, excluding after-tax restructuring and merger-related expenses: Net income available to common shareholders $ 148,907 $ 181,988 $ 232,135 Add: after-tax restructuring and merger-related expenses (1) 3,026 1,361 5,306 Net income available to common shareholders, excluding after-tax restructuring and merger-related expenses 151,933 183,349 237,441 Average total shareholders’ equity $ 2,474,627 $ 2,515,509 $ 2,764,337 Return on average equity, excluding after-tax restructuring and merger-related expenses 6.14 % 7.29 % 8.59 % Return on average tangible equity, excluding after-tax restructuring and merger-related expenses: Net income available to common shareholders $ 148,907 $ 181,988 $ 232,135 Add: after-tax restructuring and merger-related expenses (1) 3,026 1,361 5,306 Add: amortization of intangibles, net of tax 7,180 8,120 9,051 Net income available to common shareholders before amortization of intangibles and excluding after-tax restructuring and merger-related expenses 159,113 191,469 246,492 Average total shareholders’ equity 2,474,627 2,515,509 2,764,337 Less: average goodwill and other intangibles, net of deferred tax liability (1,128,277 ) (1,136,062 ) (1,144,698 ) Average tangible equity $ 1,346,350 $ 1,379,447 $ 1,619,639 Return on average tangible equity, excluding after-tax restructuring and merger-related expenses 11.82 % 13.88 % 15.22 % Average tangible common equity $ 1,201,866 $ 1,234,963 $ 1,475,155 Return on average tangible common equity, excluding after-tax restructuring and merger-related expenses 13.24 % 15.50 % 16.71 % Return on average assets, excluding after-tax restructuring and merger-related expenses: Net income available to common shareholders $ 148,907 $ 181,988 $ 232,135 Add: after-tax restructuring and merger-related expenses (1) 3,026 1,361 5,306 Net income available to common shareholders, excluding after-tax restructuring and merger-related expenses 151,933 183,349 237,441 Average total assets $ 17,259,720 $ 16,879,541 $ 16,928,377 Return on average tangible assets, excluding after-tax restructuring and merger-related expenses 0.88 % 1.09 % 1.40 % Return on average tangible assets, excluding after-tax restructuring and merger-related expenses: Net income available to common shareholders $ 148,907 $ 181,988 $ 232,135 Add: amortization of intangibles, net of tax 7,180 8,120 9,051 Add: after-tax restructuring and merger-related expenses (1) 3,026 1,361 5,306 Net income available to common shareholders, before amortization of intangibles and excluding after-tax restructuring and merger-related expenses 159,113 191,469 246,492 Average total assets 17,259,720 16,879,541 16,928,377 Less: average goodwill and other intangibles, net of deferred tax liability (1,128,277 ) (1,136,062 ) (1,144,698 ) Average tangible assets $ 16,131,443 $ 15,743,479 $ 15,783,679 Return on average tangible assets, excluding after-tax restructuring and merger-related expenses 0.99 % 1.22 % 1.56 % Dividend payout ratio, excluding after-tax restructuring and merger related expenses: Dividends declared per common share $ 1.41 $ 1.37 $ 1.32 Net income per common share - diluted 2.51 3.02 3.53 Add: after-tax restructuring and merger-related expenses per diluted share (1) 0.05 0.02 0.09 Net income per common share - diluted, excluding after-tax restructuring and merger-related expenses $ 2.56 $ 3.04 $ 3.62 Dividend payout ratio, excluding after-tax restructuring and merger related expenses 55.08 45.07 36.46 (1) Tax effected at 21% for all periods presented. 33 RESULTS OF OPERATIONS EARNINGS SUMMARY For the twelve months ended December 31, 2023, net income available to common shareholders was $148.9 million, or $2.51 per diluted share, compared to $182.0 million, or $3.02 per diluted share.
Wesbanco believes this measure to be the preferred industry measurement of net interest income and provides relevant comparison between taxable and non-taxable amounts.
Wesbanco believes this measure to be the preferred industry measurement of net interest income and provides relevant comparison between taxable and non-taxable amounts.
Market values are determined by obtaining current appraisals or evaluations, whichever is appropriate or required by banking regulations, based on the amount financed prior to the loan being made.
Market values are determined by obtaining current appraisals or evaluations, whichever is appropriate or required by banking regulations, based on the amount financed prior to the loan being made.
Conversely, higher LTV ratios may be acceptable when there are other factors to adequately mitigate the risk. 49 The type and amount of collateral for C&I loans varies depending on the overall financial strength of the borrower, the amount and terms of the loan, and available collateral or guarantors.
Conversely, higher LTV ratios may be acceptable when there are other factors to adequately mitigate the risk. The type and amount of collateral for C&I loans varies depending on the overall financial strength of the borrower, the amount and terms of the loan, and available collateral or guarantors.
Also, in March of 2022, Wesbanco completed the issuance of $150.0 million in aggregate principal amount of subordinated debentures. The subordinated debentures have a fixed rate of 3.75% for the first five years and a floating rate for the next five years at Three Month SOFR plus a spread of 1.787%.
In March of 2022, Wesbanco completed the issuance of $150.0 million in aggregate principal amount of subordinated debentures. The subordinated debentures have a fixed rate of 3.75% for the first five years and a floating rate for the next five years at Three Month SOFR plus a spread of 1.787%.
Other West Virginia locations include the Fairmont-Clarksburg and Charleston MSAs as well as communities that are not located within an MSA primarily in the northern, central and eastern parts of the state. The western Ohio MSAs include the Dayton-Springfield 46 and the Cincinnati-Middletown MSAs.
Other West Virginia locations include the Fairmont-Clarksburg and Charleston MSAs as well as communities that are not located within an MSA primarily in the northern, central and eastern parts of the state. The western Ohio MSAs include the Dayton-Springfield and the Cincinnati-Middletown MSAs.
The primary macroeconomic drivers of the quantitative model include forecasts of national unemployment and interest rates, as well as modeling adjustments for changes in prepayment speeds, loan risk grades, portfolio mix, concentrations and loan growth.
The primary macroeconomic drivers of the quantitative model include forecasts of national unemployment and interest rates, as well as modeling adjustments for changes in prepayment speeds, loan risk grades, portfolio mix, 56 concentrations and loan growth.
(4) Trust assets are held by the Bank, in fiduciary or agency capacities for its customers and therefore are not included as assets on Wesbanco’s Consolidated Balance Sheets. 32 Non-GAAP Measures The following non-GAAP financial measures used by Wesbanco provide information that Wesbanco believes is useful to investors in understanding Wesbanco’s operating performance and trends, and facilitates comparisons with the performance of Wesbanco’s peers.
(4) Trust assets are held by the Bank, in fiduciary or agency capacities for its customers and therefore are not included as assets on Wesbanco’s Consolidated Balance Sheets. 31 Non-GAAP Measures The following non-GAAP financial measures used by Wesbanco provide information that Wesbanco believes is useful to investors in understanding Wesbanco’s operating performance and trends, and facilitates comparisons with the performance of Wesbanco’s peers.
The following table presents the allocation of the individual bonds in the municipal bond portfolio based on the combined ratings of two major bond credit rating agencies (at fair value): 43 TABLE 8.
The following table presents the allocation of the individual bonds in the municipal bond portfolio based on the combined ratings of two major bond credit rating agencies (at fair value): TABLE 8.
The information contained in this report should be read in conjunction with Wesbanco’s Form 10-Qs for the prior quarters ended March 31, June 30 and September 30, 2022, respectively, and documents subsequently filed by Wesbanco which are available at the SEC’s website, www.sec.gov or at Wesbanco’s website, www.wesbanco.com.
The information contained in this report should be read in conjunction with Wesbanco’s Form 10-Qs for the prior quarters ended March 31, June 30 and September 30, 2023, respectively, and documents subsequently filed by Wesbanco which are available at the SEC’s website, www.sec.gov or at Wesbanco’s website, www.wesbanco.com.
Non-accrual loans also include consumer loans that were recently discharged in Chapter 7 bankruptcy but for which the borrower has continued to make payments for less than six consecutive months after the discharge. 54 REO consists primarily of property acquired through or in lieu of foreclosure but may also include bank premises held for sale.
Non-accrual loans also include consumer loans that were recently discharged in Chapter 7 bankruptcy but for which the borrower has continued to make payments for less than six consecutive months after the discharge. OREO consists primarily of property acquired through or in lieu of foreclosure but may also include bank premises held for sale.
Wesbanco seeks to minimize the period for which it holds REO and repossessed assets while also attempting to obtain a fair value from their disposition. Therefore, the sales price 55 of these assets is dependent on current market conditions that affect the value of real estate, used automobiles, and other collateral.
Wesbanco seeks to minimize the period for which it holds OREO and repossessed assets while also attempting to obtain a fair value from their disposition. Therefore, the sales price of these assets is dependent on current market conditions that affect the value of real estate, used automobiles, and other collateral.
These factors may include, but are not limited to, loans 30 days or more past due, loans with an internal risk grade of below average or lower, loans classified as non-accrual by the acquired institution, materiality of the credit and loans that have been previously modified in a TDR.
These factors may include, but are not limited to, loans 30 days or more past due, loans with an internal risk grade of below average or lower, loans classified as non-accrual by the acquired institution, materiality of the credit and loans that have been previously modified.
GEOGRAPHIC DISTRIBUTION OF LOANS December 31, 2022 (1) Commercial Real Estate (percentage of outstandings, rounded to nearest whole percent) Land and Construction Improved Property Commercial and Industrial Residential Real Estate Home Equity Lines Consumer Total Pittsburgh, PA MSA 7 % 10 % 12 % 13 % 15 % 7 % 11 % Washington-Arlington-Alexandria DC-VA-MD-WV MSA 12 14 8 13 3 2 11 Columbus, OH MSA 13 9 8 12 7 4 10 Baltimore-Columbia-Towson MD MSA 3 8 2 11 4 2 7 Western Ohio MSAs 14 5 6 11 8 4 7 Louisville, KY—Jefferson County MSA 14 8 11 4 4 3 8 Upper Ohio Valley MSAs 2 4 13 5 10 22 6 Other Ohio Locations 6 6 14 5 9 11 7 Other West Virginia Locations 2 5 5 4 9 15 5 Huntington, WV-Ashland, KY MSA 3 3 3 2 3 5 3 Lexington, KY—Fayette County MSA 10 4 1 4 2 1 4 Other Kentucky Locations 3 5 3 4 9 5 5 Morgantown, WV MSA 1 4 3 3 3 5 3 Parkersburg, WV-Marietta, OH MSA 2 2 2 1 4 7 2 California-Lexington Park MD MSA — 2 3 1 1 — 2 Adjacent States & Outside-of-Market 4 4 4 4 1 5 4 Other Pennsylvania Locations 1 1 — 1 6 2 1 Other Indiana Locations 2 2 2 1 1 — 2 Other Maryland Locations — 4 — 1 1 — 2 Frederick-Gaithersburg-Rockville MD MSA 1 — — — — — — Total 100 % 100 % 100 % 100 % 100 % 100 % 100 % (1) Real estate secured loans are categorized based on the address of the collateral.
GEOGRAPHIC DISTRIBUTION OF LOANS December 31, 2023 (1) Commercial Real Estate (percentage of outstandings, rounded to nearest whole percent) Land and Construction Improved Property Commercial and Industrial Residential Real Estate Home Equity Lines Consumer Total Washington-Arlington-Alexandria DC-VA-MD-WV MSA 6 % 14 % 7 % 14 % 4 % 2 % 13 % Columbus, OH MSA 18 10 9 11 8 5 11 Pittsburgh, PA MSA 7 9 14 11 14 6 10 Baltimore-Columbia-Towson MD MSA 4 9 2 12 5 2 8 Western Ohio MSAs 18 6 7 11 8 4 8 Louisville, KY—Jefferson County MSA 15 9 10 4 5 3 8 Other Ohio Locations 7 6 15 4 9 12 7 Upper Ohio Valley MSAs 1 3 11 4 8 23 5 Other Kentucky Locations 5 5 3 4 9 5 5 Other West Virginia Locations 2 4 5 4 9 15 4 Lexington, KY—Fayette County MSA 2 5 1 4 3 1 4 Morgantown, WV MSA — 3 2 3 3 4 3 Huntington, WV-Ashland, KY MSA 2 3 2 2 3 5 2 Parkersburg, WV-Marietta, OH MSA 2 2 2 1 3 8 2 Other Indiana Locations 4 2 2 2 1 — 2 Other Maryland Locations — 3 — 2 1 — 2 California-Lexington Park MD MSA — 2 3 1 1 — 1 Other Pennsylvania Locations — 1 — 1 5 2 1 Adjacent States & Outside-of-Market 7 4 5 5 1 3 4 Total 100 % 100 % 100 % 100 % 100 % 100 % 100 % (1) Real estate secured loans are categorized based on the address of the collateral.
Discussions of 2020 items and year-to-year comparisons between 2021 and 2020 that are not included in this Form 10-K can be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of Wesbanco’s Annual Report on Form 10-K for the fiscal year ended December 31, 2021, as filed with the SEC on February 28, 2022.
Discussions of 2021 items and year-to-year comparisons between 2022 and 2021 that are not included in this Form 10-K can be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of Wesbanco’s Annual Report on Form 10-K for the fiscal year ended December 31, 2022, as filed with the SEC on February 27, 2023.
However, differences between management’s estimation of expected future losses and actual incurred losses in subsequent periods may necessitate future adjustments to the provision for credit losses. Management believes the allowance for credit losses is appropriate to absorb expected future losses at December 31, 2022. DEPOSITS TABLE 21.
However, differences between management’s estimation of expected future losses and actual incurred losses in subsequent periods may necessitate future adjustments to the provision for credit losses. Management believes the allowance for credit losses is appropriate to absorb expected future losses at December 31, 2023. 58 DEPOSITS TABLE 21.
The second phase consists of working to continue to transition existing adjustable-rate loans that fluctuate monthly or periodically that are tied to LIBOR or the ICE LIBOR Swap Index.
The second phase consisted of working to continue to transition existing adjustable-rate loans that fluctuate monthly or periodically that are tied to LIBOR or the ICE LIBOR Swap Index.
Management believes these are appropriate levels of cash for Wesbanco given the current environment and projected sources and uses of cash. Management continuously monitors the adequacy of parent company cash levels and sources of liquidity through the use of metrics that relate current cash levels to historical and forecasted cash inflows and outflows.
Management believes these are appropriate levels of cash for the parent company given the current environment. Management continuously monitors the adequacy of parent company cash levels and sources of liquidity through the use of metrics that relate current cash levels to historical and forecasted cash inflows and outflows.
The following table presents the top five states of municipal bond concentration based on total fair value at December 31, 2022: TABLE 10.
The following table presents the top five states of municipal bond concentration based on total fair value at December 31, 2023: TABLE 10.
As part of loan fees, PPP loan fees were $5.9 million, $25.3 million and $13.4 million for the years ended December 31, 2022, 2021 and 2020, respectively. Additionally, loan accretion included in interest income on loans acquired from prior acquisitions was $8.0 million, $13.3 million and $17.0 million for the years ended December 31, 2022, 2021 and 2020, respectively.
As part of loan fees, PPP loan fees were $0.2 million, $5.9 million and $25.3 million for the years ended December 31, 2023, 2022 and 2021, respectively. Additionally, loan accretion included in interest income on loans acquired from prior acquisitions was $4.5 million, $8.0 million and $13.3 million for the years ended December 31, 2023, 2022 and 2021, respectively.
For the calculation as of December 31, 2022, the forecast was based upon a blend of three nationally-recognized published economic forecasts through December 31, 2022, and is primarily driven by national unemployment and interest rate spread forecasts.
For the calculation as of December 31, 2023, the forecast was based upon a blend of nationally-recognized published economic forecasts through December 31, 2023, and is primarily driven by national unemployment and interest rate spread forecasts.
On February 24, 2022, Wesbanco's Board of Directors authorized the adoption of a new stock repurchase plan for the purchase of up to 3.2 million shares, which was in addition to the prior plans that were utilized during the year. At December 31, 2022, the remaining shares authorized to be purchased under the last approved repurchase plan totaled 1,184,351 shares.
On February 24, 2022, Wesbanco's Board of Directors authorized the adoption of a new stock repurchase plan for the purchase of up to 3.2 million shares, which was in addition to the prior plans that were utilized during the year. At December 31, 2023, the remaining shares authorized to be purchased under the last approved repurchase plan totaled 1,021,901 shares.
Furthermore, the increase to the provision was driven by qualitative factors, which addressed the risk of rising interest rates and office portfolio concentration. Non-performing loans were 0.39% of total loans as of December 31, 2022, and decreased from 0.41% of total loans at the end of 2021.
Furthermore, the increase to the provision was driven by qualitative factors, which addressed the risk of rising interest rates and office portfolio concentration. Non-performing loans were 0.23% of total loans as of December 31, 2023, and decreased from 0.39% of total loans at the end of 2022.
Wesbanco’s blended forecast of national unemployment, at year end, was projected to be 4.3%, and subsequently increase to an average of 4.8% over the 2023 forecast period. The calculation utilized an immediate reversion period back to the Company’s historical loss rate by loan classification.
Wesbanco’s blended forecast of national unemployment, at year end, was projected to be 4.3%, and subsequently increase to an average of 4.6% over the 2024 forecast period. The calculation utilized an immediate reversion period back to the Company’s historical loss rate by loan classification.
The credit risk associated with these loans is similar to that of loans originated by Wesbanco, but additional risk may arise from Wesbanco’s limited ability to control a dealer’s compliance with applicable consumer lending laws. Indirect consumer loans represented $121 million or 54% of consumer loans at December 31, 2022 compared to $129 million or 47% at December 31, 2021.
The credit risk associated with these loans is similar to that of loans originated by Wesbanco, but additional risk may arise from Wesbanco’s limited ability to control a dealer’s compliance with applicable consumer lending laws. Indirect consumer loans represented $121 million or 53% of consumer loans at December 31, 2023 compared to $121 million or 54% at December 31, 2022.
The Bank’s policy is generally to declare dividends up to 90% of its earnings to the parent annually, subject to change, with Board approval. Wesbanco currently has $281.4 million in subordinated debt and junior subordinated debt on its Consolidated Balance Sheet.
The Bank’s policy is generally to declare dividends up to 90% of its earnings to the parent annually, subject to change, with Board approval. Wesbanco currently has $279.1 million in subordinated debt and junior subordinated debt on its Consolidated Balance Sheet.
If tainting occurs, all remaining securities with the held-to-maturity designation would be required to be reclassified as available-for-sale, and the held-to-maturity designation would not be available to utilize for some time. Wesbanco participates in the Federal Reserve Bank’s Borrower-in-Custody Program (“BIC”), whereby Wesbanco pledges certain consumer loans as collateral for borrowings.
If tainting occurs, all remaining securities with the held-to-maturity designation would be required to be reclassified as available-for-sale, and the held-to-maturity designation would not be available to Wesbanco for a period of time. Wesbanco participates in the Federal Reserve Bank’s Borrower-in-Custody Program (“BIC”) whereby Wesbanco pledges certain consumer loans as collateral for borrowings.
Deposit balances were also somewhat impacted by bonus and royalty payments from Marcellus and Utica shale energy companies in Wesbanco’s southwestern Pennsylvania, eastern Ohio and northern West Virginia markets totaling $96.7 million and $68.9 million for the years ended December 31, 2022 and December 31, 2021, respectively.
Deposit balances were also somewhat impacted by bonus and royalty payments from Marcellus and Utica shale energy companies in Wesbanco’s southwestern Pennsylvania, eastern Ohio and northern West Virginia markets totaling $104.7 million and $96.7 million for the years ended December 31, 2023 and December 31, 2022, respectively.
Deposit balances were also somewhat impacted by bonus and royalty payments from Marcellus and Utica shale energy companies in Wesbanco’s southwestern Pennsylvania, eastern Ohio and northern West Virginia markets totaling $96.7 million and $68.9 million for the years ended December 31, 2022 and 2021, respectively.
Deposit balances were also somewhat impacted by bonus and royalty payments from Marcellus and Utica shale energy companies in Wesbanco’s southwestern Pennsylvania, eastern Ohio and northern West Virginia markets totaling $104.7 million and $96.7 million for the years ended December 31, 2023 and 2022, respectively.
Includes non-accrual and loans held for sale. Loan fees included in interest income on loans were $8.8 million, $26.3 million and $16.2 million for the years ended December 31, 2022, 2021 and 2020, respectively.
Includes non-accrual and loans held for sale. Loan fees included in interest income on loans were $2.7 million, $8.8 million and $26.3 million for the years ended December 31, 2023, 2022 and 2021, respectively.
Wesbanco had outstanding commitments to extend credit in the ordinary course of business approximating $4.6 billion and $3.8 billion at December 31, 2022 and 2021, respectively. On a historical basis, only a portion of these commitments will result in an outflow of funds.
Wesbanco had outstanding commitments to extend credit in the ordinary course of business approximating $4.7 billion and $4.6 billion at December 31, 2023 and December 31, 2022, respectively. On a historical basis, only a portion of these commitments will result in an outflow of funds.
Deposit flows are another principal factor affecting overall Wesbanco liquidity. Deposits totaled $13.1 billion at December 31, 2022. Deposit flows are impacted by current interest rates, products and rates offered by Wesbanco versus various forms of competition, as well as customer behavior.
Deposit cash flows are another principal factor affecting overall Wesbanco liquidity. Deposits totaled $13.2 billion at December 31, 2023. Deposit cash flows are impacted by current interest rates, products and rates offered by Wesbanco versus various forms of competition, as well as customer behavior.
Wesbanco does not have any investments in private mortgage-backed securities or those that are collateralized by sub-prime mortgages, nor does Wesbanco have any exposure to collateralized debt obligations or government-sponsored enterprise preferred stocks. 42 Net unrealized losses on available-for-sale securities included in accumulated other comprehensive income, net of tax, as of December 31, 2022 and December 31, 2021 were $261.8 million and $4.7 million, respectively.
Wesbanco does not have any investments in private mortgage-backed securities or those that are collateralized by sub-prime mortgages, nor does Wesbanco have any exposure to collateralized debt obligations or government-sponsored enterprise preferred stocks. 41 Net unrealized losses on available-for-sale securities included in accumulated other comprehensive income, net of tax, as of December 31, 2023 and December 31, 2022 were $233.2 million and $261.8 million, respectively.
FHLB stock, which is recorded at cost of $36.2 million at December 31, 2022, is also pledged as collateral for these advances. Wesbanco’s remaining maximum borrowing capacity, subject to the collateral requirements noted, with the FHLB at December 31, 2022 and 2021 was estimated to be approximately $3.6 billion and $3.8 billion, respectively.
FHLB stock, which is recorded at cost of $62.2 million at December 31, 2023, is also pledged as collateral for these advances. Wesbanco’s remaining maximum borrowing capacity, subject to the collateral requirements noted, with the FHLB at December 31, 2023 and 2022 was estimated to be approximately $3.4 billion and $3.6 billion, respectively.
Loans are generally placed on non-accrual when they become past due 90 days or more unless they are both well-secured and in the process of collection. Non-accrual loans include certain loans that are also TDRs as set forth in Note 4, “Loans and the Allowance for Credit Losses,” of the Consolidated Financial Statements.
Loans are generally placed on non-accrual when they become past due 90 days or more unless they are both well-secured and in the process of collection. Prior to 2023, non-accrual loans included certain loans that were also TDRs as set forth in Note 4, “Loans and 54 the Allowance for Credit Losses,” of the Consolidated Financial Statements.
Accrued interest receivable on held-to-maturity securities, which was $9.5 million and $7.0 million as of December 31, 2022 and 2021, respectively, is excluded from the estimate of credit losses. Held-to-maturity investments in U.S.
Accrued interest receivable on held-to-maturity securities, which was $8.8 million and $9.5 million as of December 31, 2023 and 2022, respectively, is excluded from the estimate of credit losses. Held-to-maturity investments in U.S.
There are various legal limitations under federal and state laws that limit the payment of dividends from the Bank to the parent company. As of December 31, 2022, under FDIC and State of West Virginia regulations, Wesbanco could receive, without prior regulatory approval, dividends of approximately $116.8 million from the Bank.
There are various legal limitations under federal and state laws that limit the payment of dividends from the Bank to the parent company. As of December 31, 2023, under FDIC and State of West Virginia regulations, Wesbanco could receive, without prior regulatory approval, dividends of approximately $135.6 million from the Bank.
The regulatory agencies also consider whether a bank’s CRE portfolio has increased by 50% or more within the prior thirty-six months of the assessment date. Total CRE exposure increased $719 million or 17.9% for the thirty-six month period ended December 31, 2022. Basel III requires banks to identify High Volatility Commercial Real Estate (“HVCRE”) loans in their portfolios.
The regulatory agencies also consider whether a bank’s CRE portfolio has increased by 50% or more within the prior thirty-six months of the assessment date. Total CRE exposure increased $819 million or 19.4% for the thirty-six month period ended December 31, 2023. Basel III requires banks to identify High Volatility Commercial Real Estate (“HVCRE”) loans in their portfolios.
Loans reported in this category continue to accrue interest so long as the borrower is able to continue repayment in accordance with the restructured terms. TDRs that are placed on non-accrual are reported in the non-accrual category and not included with accruing TDRs.
Loans reported in this category continued to accrue interest so long as the borrower was able to continue repayment in accordance with the restructured terms. TDRs that were placed on non-accrual were reported in the non-accrual category and not included with accruing TDRs.
Wesbanco maintains a comprehensive management process for identifying, measuring, monitoring, and controlling liquidity risk, which is fully integrated into its risk management process. Management believes Wesbanco has sufficient current liquidity to meet current obligations to borrowers, depositors and others as of December 31, 2022 and that Wesbanco’s current liquidity risk management policies and procedures adequately address this guidance.
Wesbanco maintains a comprehensive management process for identifying, measuring, monitoring, and controlling liquidity risk, which is fully integrated into its risk management process. Management believes Wesbanco has sufficient current liquidity to meet current obligations to borrowers, depositors and others and that Wesbanco’s current liquidity risk management policies and procedures, as periodically reviewed and adjusted, adequately address this guidance.
This section generally discusses 2022 and 2021 items and year-to-year comparisons between 2022 and 2021.
This section generally discusses 2023 and 2022 items and year-to-year comparisons between 2023 and 2022.
Past due loans at December 31, 2022 were 0.19% of total loans, compared to 0.36% at December 31, 2021. (Please see the Credit Quality and Allowance for Credit Losses – Loans and Loan Commitments section of this MD&A for additional discussion). 38 TABLE 4.
Past due loans at December 31, 2023 were 0.28% of total loans, compared to 0.19% at December 31, 2022. (Please see the Credit Quality and Allowance for Credit Losses – Loans and Loan Commitments section of this MD&A for additional discussion). 37 TABLE 4.
As of December 31, 2022, total exposure to land development and new development related to office buildings, improvements and renovation of existing structures, purchase of existing buildings and other related activities approximated $519 million or 5.0% of the total commercial loan exposure, as compared to $470 million or 5.0% of the total commercial loan exposure at December 31, 2021.
As of December 31, 2023, total exposure to land development and new development related to office buildings, improvements and renovation of existing structures, purchase of existing buildings and other related activities approximated $471 million or 4.2% of the total commercial loan exposure, as compared to $519 million or 5.0% of the total commercial loan exposure at December 31, 2022.
Wesbanco is subject to risk-based capital guidelines that measure capital relative to risk-weighted assets and off-balance sheet instruments. Wesbanco and its banking subsidiary Wesbanco Bank maintain Tier 1 risk-based, Total risk-based and Tier 1 leverage capital ratios significantly above minimum regulatory levels. The Bank paid $172.5 million in dividends to Wesbanco during 2022, or 85% of the Bank’s net income.
Wesbanco is subject to risk-based capital guidelines that measure capital relative to risk-weighted assets and off-balance sheet instruments. Wesbanco and its banking subsidiary Wesbanco Bank maintain Tier 1 risk-based, Total risk-based and Tier 1 leverage capital ratios significantly above minimum regulatory levels. The Bank paid $77.0 million in dividends to Wesbanco during 2023, or 44% of the Bank’s net income.
Wesbanco did not have any BIC borrowings outstanding at December 31, 2022.
Wesbanco did not have any BIC borrowings outstanding at December 31, 2023.
There are various legal limitations under federal and state laws that limit the payment of dividends from the Bank to the parent company. As of December 31, 2021, under FDIC and State of West Virginia regulations, Wesbanco could receive, without prior regulatory approval, dividends of approximately $116.8 million from the Bank.
There are various legal limitations under federal and state laws that limit the payment of dividends from the Bank to the parent company. As of December 31, 2023, under FDIC and State of West Virginia regulations, Wesbanco could receive, 60 without prior regulatory approval, dividends of approximately $135.5 million from the Bank.
These large relationships generally consist of more than one loan to a borrower or their related entities. The single largest relationship exposure approximated $117 million at December 31, 2022 and consists of multiple loans to a business relationship for gasoline stations with convenience stores, which is in the retail sector.
These large relationships generally consist of more than one loan to a borrower or their related entities. The single largest relationship exposure approximated $120 million at December 31, 2023 and consists of multiple loans to a business relationship for gasoline stations with convenience stores, which is in the real estate investment sector.
The allowance for collectively-evaluated loans is comprised of factors based on both historical loss experience and other qualitative factors. The allowance for collectively-evaluated loans increased $2.3 million or 2.0% from December 31, 2021 to December 31, 2022 due to changes in macroeconomic factors, changes in portfolio mix and changes in both quantitative and qualitative adjustments.
The allowance for collectively-evaluated loans is comprised of factors based on both historical loss experience and other qualitative factors. The allowance for collectively-evaluated loans increased $10.3 million or 8.9% from December 31, 2022 to December 31, 2023 due to changes in macroeconomic factors, changes in portfolio mix and changes in both quantitative and qualitative adjustments.
The bank has approximately $119 million in HVCRE exposure representing 1.6% of total CRE exposure and 7.3% of total risk-based capital at December 31, 2022. This compares to $79 million in HVCRE exposure representing 1.2% of total CRE exposure and 4.9% of total risk-based capital at December 31, 2021.
The bank has approximately $173 million in HVCRE exposure representing 2.2% of total CRE exposure and 9.8% of total risk-based capital at December 31, 2023. This compares to $119 million in HVCRE exposure representing 1.6% of total CRE exposure and 7.3% of total risk-based capital at December 31, 2022.
NET INTEREST INCOME For the years ended December 31, (dollars in thousands) 2022 2021 2020 Net interest income $ 474,313 $ 457,933 $ 479,480 Taxable-equivalent adjustments to net interest income 5,002 4,296 4,519 Net interest income, fully taxable-equivalent $ 479,315 $ 462,229 $ 483,999 Net interest spread, non-taxable-equivalent 3.02 % 2.98 % 3.14 % Benefit of net non-interest bearing liabilities 0.15 % 0.10 % 0.20 % Net interest margin 3.17 % 3.08 % 3.34 % Taxable-equivalent adjustment 0.03 % 0.03 % 0.03 % Net interest margin, fully taxable-equivalent 3.20 % 3.11 % 3.37 % Net interest income, which is Wesbanco’s largest source of revenue, is the difference between interest income on earning assets, primarily loans and securities, and interest expense on liabilities, primarily deposits and short and long-term borrowings.
NET INTEREST INCOME For the years ended December 31, (dollars in thousands) 2023 2022 2021 Net interest income $ 481,338 $ 474,313 $ 457,933 Taxable-equivalent adjustments to net interest income 5,005 5,002 4,296 Net interest income, fully taxable-equivalent $ 486,343 $ 479,315 $ 462,229 Net interest spread, non-taxable-equivalent 2.35 % 3.02 % 2.98 % Benefit of net non-interest bearing liabilities 0.76 % 0.15 % 0.10 % Net interest margin 3.11 % 3.17 % 3.08 % Taxable-equivalent adjustment 0.03 % 0.03 % 0.03 % Net interest margin, fully taxable-equivalent 3.14 % 3.20 % 3.11 % Net interest income, which is Wesbanco’s largest source of revenue, is the difference between interest income on earning assets, primarily loans and securities, and interest expense on liabilities, primarily deposits and short and long-term borrowings.
Purchased loan discounts from acquisitions included in the portfolio loan balances were $18.0 million and $25.9 million as of December 31, 2022 and 2021, respectively. Loan accretion included in interest income on loans acquired from prior acquisitions was $8.0 million and $13.3 million for the years ended December 31, 2022 and 2021, respectively.
Purchased loan discounts from acquisitions included in the portfolio loan balances were $13.5 million and $18.0 million as of December 31, 2023 and 2022, respectively. Loan accretion included in interest income on loans acquired from prior acquisitions was $4.5 million and $8.0 million for the years ended December 31, 2023 and 2022, respectively.
Wesbanco’s municipal portfolio comprises 33.5% of the overall securities portfolio as of December 31, 2022 compared to 25.2% as of December 31, 2021, which carries different risks that are not as prevalent in other security types contained in the portfolio.
Wesbanco’s municipal portfolio comprises 35.6% of the overall securities portfolio as of December 31, 2023 compared to 33.5% as of December 31, 2022, which carries different risks that are not as prevalent in other security types contained in the portfolio.
The aggregate of all CRE loans and loan commitments that exceeded the regulatory guidelines approximated $126 million or 8% of the Bank’s total risk-based capital at December 31, 2022, compared to $117 million or 7% at December 31, 2021.
The aggregate of all CRE loans and loan commitments that exceeded the regulatory guidelines approximated $165 million or 9% of the Bank’s total risk-based capital at December 31, 2023, compared to $126 million or 8% at December 31, 2022.
Concessions may include a reduction of either the interest rate, the amount of accrued interest, or the principal balance of the loan. Other possible concessions are an interest rate that is less than the market rate for loans with comparable risk characteristics, an extension of the maturity date or an extension of the amortization schedule.
Concessions may have included a reduction of either the interest rate, the amount of accrued interest, or the principal balance of the loan. Other possible concessions were an interest rate that was less than the market rate for loans with comparable risk characteristics, an extension of the maturity date or an extension of the amortization schedule.
(4) Accretion on interest bearing liabilities acquired from prior acquisitions was $1.1 million, $3.1 million and $9.5 million for the years ended December 31, 2022, 2021 and 2020, respectively. 37 TABLE 3.
(4) Accretion on interest bearing liabilities acquired from prior acquisitions was $0.5 million, $1.1 million and $3.1 million for the years ended December 31, 2023, 2022 and 2021, respectively. 36 TABLE 3.
Net unrealized pre-tax (losses) gains in the held-to-maturity portfolio, which are not accounted for in other comprehensive income, were ($164.2) million at December 31, 2022, compared to $23.6 million as of December 31, 2021.
Net unrealized pre-tax losses in the held-to-maturity portfolio, which are not accounted for in other comprehensive income, were $130.4 million at December 31, 2023, compared to $164.2 million as of December 31, 2022.
With approximately 33% of the investment portfolio in the held-to-maturity category, compared to 25% one year ago, the recent volatility in interest rates does not have as much impact on other comprehensive income as if the entire portfolio were included in the available-for-sale category.
With approximately 35% of the investment portfolio in the held-to-maturity category, the recent volatility in interest rates does not have as much of an impact on other comprehensive income as if the entire portfolio were included in the available-for-sale category.
Please refer to Note 18, “Commitments and Contingent Liabilities,” of the Consolidated Financial Statements and the “Loans and Loan Commitments” section of this MD&A for additional information. Federal financial regulatory agencies previously have issued guidance to provide for sound practices for managing funding and liquidity risk and strengthening liquidity risk management practices.
Please refer to Note 10, “Commitments and Contingent Liabilities” of the Consolidated Financial Statements and the “Loans and Credit Risk” section of this MD&A for additional information. Federal financial regulatory agencies have previously issued guidance to provide for sound practices for managing funding and liquidity risk and strengthening liquidity risk management practices.
Non-performing assets were 0.40% of total loans and other real estate and repossessed assets as of December 31, 2022, decreasing from 0.41% at the end of 2021. Criticized and classified loans were 2.34% of total loans, decreasing from 3.75% as of December 31, 2021, primarily due to improvements in loans categorized as criticized or classified earlier in the pandemic.
Non-performing assets were 0.24% of total loans and other real estate and repossessed assets as of December 31, 2023, decreasing from 0.40% at the end of 2022. Criticized and classified loans were 2.22% of total loans, decreasing from 2.34% as of December 31, 2022, primarily due to improvements in loans categorized as criticized or classified during the pandemic.
The allowance for loan commitments increased $0.6 million from December 31, 2021 to December 31, 2022. 59 Table 20 summarizes the allocation of the allowance for credit losses to each category of loans. TABLE 20.
The allowance for loan commitments increased $0.2 million from December 31, 2022 to December 31, 2023. 57 Table 20 summarizes the allocation of the allowance for credit losses to each category of loans. TABLE 20.
Taxable securities yields increased by 21 basis points in 2022 due to the effect of the higher rate environment on the variable rate portion of the investment portfolio, which are typically tied to either LIBOR or SOFR.
Taxable securities yields increased by 42 basis points in 2023 due to the effect of the higher rate environment on the variable rate portion of the investment portfolio, which are typically tied to SOFR.
CDARS ® balances totaled $21.0 million in outstanding balances at December 31, 2022, none of which represented one-way buys, compared to $45.9 million in total outstanding balances at December 31, 2021, of which $0.4 million represented one-way buys. Certificates of deposit greater than $250,000 were approximately $133.9 million at December 31, 2022 compared to $313.2 million at December 31, 2021.
CDARS ® balances totaled $48.4 million in outstanding balances at December 31, 2023, of which $10.6 million represented one-way buys, compared to $21.0 million in total outstanding balances at December 31, 2022, none of which represented one-way buys. Certificates of deposit greater than $250,000 were approximately $223.4 million at December 31, 2023 compared to $133.9 million at December 31, 2022.
Management relies on observable data from internal and external sources to the extent it is available to evaluate each of these factors and adjusts the actual historical loss rates to reflect the impact these factors may have on probable losses in the portfolio. Commercial loans, including commercial real estate (“CRE”) and C&I, are individually-evaluated if they have unique characteristics.
Management relies on observable data from internal and external sources to the extent it is available to evaluate each of these factors and adjusts the actual historical loss rates to reflect the impact these factors may have on probable losses in the portfolio. Commercial loans, including CRE and C&I that have unique characteristics, are tested individually for estimated credit losses.
The primary drivers of this increase were higher salaries and wages, equipment and software costs, FDIC insurance expense and franchise and other miscellaneous taxes. These increases were slightly offset by decreases in employee benefits expense, ATM and electronic banking interchange expenses, amortization of intangible assets and other operating expenses.
The primary drivers of this increase were higher salaries and wages, employee benefits, equipment and software costs, FDIC insurance expense and other operating expenses. These increases were slightly offset by decreases in net occupancy and amortization of intangible assets.
Participation in loans originated by other financial institutions represents $789 million or 7.7% of total commercial loan exposure at December 31, 2022, compared to $547 million or 5.9% at December 31, 2021. Included in this total are Shared National Credits of $10 million at December 31, 2022 and $11 million at December 31, 2021.
Participation in loans originated by other financial institutions represents $871 million or 7.7% of total commercial loan exposure at December 31, 2023, compared to $789 million or 7.7% at December 31, 2022. Included in this total are Shared National Credits of approximately $178 million at December 31, 2023 and $10 million at December 31, 2022.
Strong earnings enabled Wesbanco to increase the quarterly dividend to $0.34 and $0.35 per share in the first quarter and fourth quarters of 2022, respectively, the fifteenth and sixteenth increase over the last twelve years, cumulatively representing a 150% increase over that period. 31 Selected financial ratios for the years ended December 31, 2022, 2021 and 2020 are presented in the table below: For the years ended December 31, (dollars in thousands, except shares and per share amounts) 2022 2021 2020 PER COMMON SHARE INFORMATION Earnings per common share—basic $ 3.03 $ 3.54 $ 1.78 Earnings per common share—diluted 3.02 3.53 1.77 Earnings per common share—diluted, excluding certain items (1)(2) 3.04 3.62 1.88 Dividends declared per common share 1.37 1.32 1.28 Book value at year end 38.55 40.91 39.17 Tangible book value at year end (1) 19.43 22.61 21.75 Average common shares outstanding—basic 60,047,177 65,520,527 67,260,796 Average common shares outstanding—diluted 60,215,374 65,669,970 67,310,584 Period end common shares outstanding 59,198,963 62,307,245 67,254,706 Period end preferred shares outstanding 150,000 150,000 150,000 SELECTED RATIOS Return on average assets 1.08 % 1.37 % 0.73 % Return on average assets, excluding certain items (1)(2) 1.09 1.40 0.77 Return on average tangible assets (1) 1.21 1.53 0.85 Return on average tangible assets, excluding certain items (1)(2) 1.22 1.56 0.90 Return on average equity 7.23 8.40 4.50 Return on average equity, excluding certain items (1)(2) 7.29 8.59 4.79 Return on average tangible equity (1) 13.78 14.89 8.61 Return on average tangible equity, excluding certain items (1)(2) 13.88 15.22 9.12 Return on average tangible common equity (1) 15.39 16.35 8.94 Return on average tangible common equity, excluding certain items (1)(2) 15.50 16.71 9.47 Net interest margin (3) 3.20 3.11 3.37 Efficiency ratio (1) 59.53 58.22 56.38 Average loans to average deposits 74.21 78.11 91.66 Allowance for credit losses - loans to total loans 1.10 1.25 1.72 Allowance for credit losses - loans to total non-performing loans 284.41 308.00 455.38 Non-performing assets to total assets 0.25 0.23 0.25 Net loan charge-offs to average loans 0.02 0.02 0.06 Average shareholders’ equity to average assets 14.90 16.33 16.13 Tangible equity to tangible assets (1) 8.19 9.84 10.52 Tangible common equity to tangible assets (1) 7.28 8.92 9.58 Tier 1 leverage ratio 9.90 10.02 10.51 Tier 1 capital to risk-weighted assets 12.33 14.05 14.72 Total capital to risk-weighted assets 15.11 15.91 17.58 Common equity tier 1 capital ratio (CET 1) 11.20 12.77 13.40 Dividend payout ratio 45.36 37.39 72.32 Trust assets at market value (4) $ 4,878,479 $ 5,644,975 $ 5,025,565 (1) See "Non-GAAP Measures" for additional information relating to the calculation of this item.
Strong earnings enabled Wesbanco to increase the quarterly dividend to $0.36 per share in the fourth quarter of 2023, the seventeenth increase over the last thirteen years, cumulatively representing a 157% increase over that period. 30 Selected financial ratios for the years ended December 31, 2023, 2022 and 2021 are presented in the table below: For the years ended December 31, (dollars in thousands, except shares and per share amounts) 2023 2022 2021 PER COMMON SHARE INFORMATION Earnings per common share—basic $ 2.51 $ 3.03 $ 3.54 Earnings per common share—diluted 2.51 3.02 3.53 Earnings per common share—diluted, excluding certain items (1)(2) 2.56 3.04 3.62 Dividends declared per common share 1.41 1.37 1.32 Book value at year end 40.23 38.55 40.91 Tangible book value at year end (1) 21.28 19.43 22.61 Average common shares outstanding—basic 59,303,210 60,047,177 65,520,527 Average common shares outstanding—diluted 59,427,989 60,215,374 65,669,970 Period end common shares outstanding 59,376,435 59,198,963 62,307,245 Period end preferred shares outstanding 150,000 150,000 150,000 SELECTED RATIOS Return on average assets 0.86 % 1.08 % 1.37 % Return on average assets, excluding certain items (1)(2) 0.88 1.09 1.40 Return on average tangible assets (1) 0.97 1.21 1.53 Return on average tangible assets, excluding certain items (1)(2) 0.99 1.22 1.56 Return on average equity 6.02 7.23 8.40 Return on average equity, excluding certain items (1)(2) 6.14 7.29 8.59 Return on average tangible equity (1) 11.59 13.78 14.89 Return on average tangible equity, excluding certain items (1)(2) 11.82 13.88 15.22 Return on average tangible common equity (1) 12.99 15.39 16.35 Return on average tangible common equity, excluding certain items (1)(2) 13.24 15.50 16.71 Net interest margin (3) 3.14 3.20 3.11 Efficiency ratio (1) 63.64 59.53 58.22 Average loans to average deposits 85.71 74.21 78.11 Allowance for credit losses - loans to total loans 1.12 1.10 1.25 Allowance for credit losses - loans to total non-performing loans 487.45 284.41 308.00 Non-performing assets to total assets 0.16 0.25 0.23 Net loan charge-offs to average loans 0.04 0.02 0.02 Average shareholders’ equity to average assets 14.34 14.90 16.33 Tangible equity to tangible assets (1) 8.49 8.19 9.84 Tangible common equity to tangible assets (1) 7.62 7.28 8.92 Tier 1 leverage ratio 9.87 9.90 10.02 Tier 1 capital to risk-weighted assets 12.05 12.33 14.05 Total capital to risk-weighted assets 14.91 15.11 15.91 Common equity tier 1 capital ratio (CET 1) 10.99 11.20 12.77 Dividend payout ratio 56.18 45.36 37.39 Trust assets at market value (4) $ 5,360,657 $ 4,878,479 $ 5,644,975 _______ (1) See "Non-GAAP Measures" for additional information relating to the calculation of this item.
Wesbanco’s municipal bond portfolio at December 31, 2022, consists of $384.7 million of taxable and $726.1 million of tax-exempt general obligation and revenue bonds. The following table presents additional information regarding the municipal bond type and issuer (at fair value): TABLE 9.
Wesbanco’s municipal bond portfolio at December 31, 2023, consists of $386.9 million of taxable and $699.4 million of tax-exempt general obligation and revenue bonds. The following table presents additional information regarding the municipal bond type and issuer (at fair value): TABLE 9.
Alternative funding sources may include the utilization of existing overnight lines of credit with third-party banks totaling $235.0 million, none of which was outstanding at December 31, 2022, along with seeking other lines of credit, borrowings under repurchase agreement lines, increasing deposit rates to attract additional funds, accessing brokered deposits, or selling securities available-for-sale or certain types of loans. 63 Other short-term borrowings of $135.1 million at December 31, 2022 consisted of callable repurchase agreements and overnight sweep checking accounts for commercial customers.
Alternative funding sources may include the utilization of existing overnight lines of credit with third party banks totaling $235.0 million, none of which was outstanding at December 31, 2023, along with seeking other lines of credit, borrowings under repurchase agreement lines, increasing deposit rates to attract additional funds, accessing brokered deposits, or selling securities available-for-sale or certain types of loans.
Cost-method investments consist primarily of FHLB of Pittsburgh stock totaling $36.2 million and $15.9 million at December 31, 2022 and 2021, respectively, and are included in other assets in the Consolidated Balance Sheets.
Cost-method investments consist primarily of FHLB of Pittsburgh stock totaling $62.0 million and $36.2 million at December 31, 2023 and 2022, respectively, and are included in other assets in the Consolidated Balance Sheets. 42 TABLE 7.
At December 31, 2022 Wesbanco’s legal lending limit to any single borrower or their related interests approximated $246 million. The ten largest commercial relationships combined ranged from $662 million to $843 million during 2022. There were 20 relationships that exceeded $50 million at December 31, 2022.
At December 31, 2023 Wesbanco’s legal lending limit to any single borrower or their related interests approximated $266 million. The ten largest commercial relationships combined ranged from $826 million to $868 million during 2023. There were 24 relationships that exceeded $50 million at December 31, 2023.
Loans provide the greatest impact on interest income and the yield on earning assets as they have the largest balance and the highest yield within major earning asset categories. In 2022, average loans represented 67.4% of average earning assets, a decrease from 69.8% in 2021.
Loans provide the greatest impact on interest income and the yield on earning assets as they have the largest balance and the highest yield within major earning asset categories. In 2023, average loans represented 72.0% of average earning assets, an increase from 67.4% in 2022.
This tier totals $1,301 51 million or 79.6% of total risk-based capital at December 31, 2022, compared to $914 million or 56.8% at December 31, 2021. The regulatory guidance for the first tier is 100% of total risk-based capital. The second tier measures loans included in the first tier plus multi-family apartments and other commercial investment property.
This tier totals $1.2 billion or 65.5% of total risk-based capital at December 31, 2023, compared to $1.3 billion or 79.6% at December 31, 2022. The regulatory guidance for the first tier is 100% of total risk-based capital. The second tier measures loans included in the first tier plus multi-family apartments and other commercial investment property.
Non-performing assets also include real estate owned (“REO”) and repossessed assets. Net charge-offs are also an important measure of credit quality. Wesbanco seeks to develop individual strategies for all 53 assets that have adverse risk characteristics in order to minimize potential loss.
Net charge-offs are also an important measure of credit quality. Wesbanco seeks to develop individual strategies for all assets that have adverse risk characteristics in order to minimize potential loss.
In addition to the methods in which Wesbanco monitors the CRE portfolio for possible concentrations of risk, the regulatory agencies use a two-tiered assessment to determine whether a bank has an overall concentration of CRE lending as a percentage of bank total risk-based capital.
This category represents 39.2% of risk-based capital, compared to 41.8% at December 31, 2022. In addition to the methods in which Wesbanco monitors the CRE portfolio for possible concentrations of risk, the regulatory agencies use a two-tiered assessment to determine whether a bank has an overall concentration of CRE lending as a percentage of bank total risk-based capital.
Money market deposits were influenced through Wesbanco’s increased participation in the Insured Cash Sweep (ICS ® ) money market deposits program. ICS ® reciprocal balances totaled $580.6 million at December 31, 2022 compared to $641.1 million at December 31, 2021.
Money market deposits were influenced through Wesbanco’s increased participation in the Insured Cash Sweep (ICS ® ) money market deposits program. ICS ® reciprocal balances totaled $1.0 billion at December 31, 2023 as compared to $580.6 million at December 31, 2022. ICS ® one-way buys totaled $200.6 million at December 31, 2023.
Real estate—other represents the fourth largest category of commercial exposure with total exposure of $681 million. Real estate—other exposure increased 7.2% from December 31, 2021 to December 31, 2022. This category represents 41.6% of risk-based capital, compared to 39.5% at December 31, 2021. Real estate – other consists of property types such as box stores, eating facilities and mixed use.
Real estate—other exposure increased 17.2% from December 31, 2022 to December 31, 2023. This category represents 45.1% of risk-based capital, compared to 41.6% at December 31, 2022. Real estate – other consists of property types such as box stores, eating facilities and mixed use. Services represents the fifth largest category of commercial loan exposure with total exposure of $714 million.
Certificates of deposit of $100,000 or more were approximately $373.5 million at December 31, 2022 compared to $666.2 million at December 31, 2021. Certificates of deposit totaling approximately $556.4 million at December 31, 2022 with a cost of 0.41% are scheduled to mature within the next year.
Certificates of deposit of $100,000 or more were approximately $628.5 million at December 31, 2023 compared to $373.5 million at December 31, 2022. Certificates of deposit totaling approximately $915.4 million at December 31, 2023 with a cost of 3.27% are scheduled to mature within the next year.
Other Kentucky locations include the Elizabethtown KY MSA along with other Kentucky locations that are not located within an MSA. Through the acquisition of OLBK, Wesbanco added the Baltimore-Columbia-Towson, MD MSA, Frederick-Gaithersburg-Rockville, MD MSA and Washington DC-Arlington-Alexandria, VA MSA as well as other Maryland locations.
Other Kentucky locations include the Elizabethtown KY MSA along with other Kentucky locations that are not located within an MSA. Through the acquisition of OLBK, Wesbanco added the Baltimore-Columbia-Towson, MD MSA and the Washington DC-Arlington-Alexandria, VA MSA as well as other Maryland locations. Adjacent states include parts of Delaware and Virginia that are within close proximity to Wesbanco’s markets.
The provision for credit losses - loans and loan commitments was ($1.7) million in 2022 compared to ($64.3) million in 2021 as a result of worsening macroeconomic factors over the reasonable and supportable forecast period of one year, primarily increasing the allowance for loan losses and allowance for loan commitments.
The provision for credit losses - loans and loan commitments was $17.8 million in 2023 compared to ($1.7) million in 2022 as a result of loan growth as well as changes in macroeconomic conditions over the reasonable and supportable forecast period of one year, primarily increasing the allowance for loan losses and allowance for loan commitments.
For 2022, common dividends increased to $1.37 per share, or 3.8% on an annualized basis, compared to $1.32 per share in 2021. The common dividend per share payout ratio increased to 53.6% in 2022 from 37.4% in 2021, which is primarily attributable to a decrease in earnings year-over-year.
For 2023, common dividends increased to $1.41 per share, or 2.9% on an annualized basis, compared to $1.37 per share in 2022. The common dividend per share payout ratio increased to 56.2% in 2023 from 45.4% in 2022, which is primarily attributable to a decrease in earnings year-over-year.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

20 edited+2 added−5 removed6 unchanged
Biggest changeSince the assumptions used in the model relative to changes in interest rates are uncertain, the simulation analysis may not be indicative of actual results. In addition, this analysis does not consider actions that management might employ in response to changes in interest rates, as well as changes in earning asset and costing liability balances.
Biggest changeIn addition, this analysis does not consider actions that management might employ in the future in response to changes in interest rates, as well as changes in earning asset and costing liability balances.
Significant balance sheet strategies to assist in managing the net interest margin in the current interest rate environment include: • increasing total loans, particularly commercial and home equity loans that have variable or adjustable features; • adjusting the percentage of sales of longer-term residential mortgage loan production into the secondary market; • managing rates on interest bearing deposits and growing demand deposit account types to increase the relative portion of these account types to total deposits; • employing back-to-back loan swaps for certain commercial loan customers desiring a term fixed rate loan equivalent, with the Bank receiving a variable rate; • adjusting terms for FHLB short-term maturing borrowings to balance asset/liability mismatches; or paying them off with excess liquidity • using CDARS ® and ICS ® deposit programs to manage funding needs and overall liability mix, and • adjusting the size, mix or duration of the investment portfolio as part of liquidity and balance sheet management strategies.
Significant balance sheet strategies to assist in managing the net interest margin in the current interest rate environment include: • increasing total loans, particularly commercial and home equity loans that have variable or adjustable features; • adjusting the percentage of sales of longer-term residential mortgage loan production into the secondary market; • managing rates on interest bearing deposits and growing demand deposit account types to increase the relative portion of these account types to total deposits; • employing back-to-back loan swaps for certain commercial loan customers desiring a term fixed rate loan equivalent, with the Bank receiving a variable rate; • adjusting terms for FHLB short-term maturing borrowings to balance asset/liability mismatches; or paying them off with excess liquidity • using CDARS ® and ICS ® deposit programs to manage funding needs and overall liability mix, and • adjusting the size, mix or duration of the investment portfolio as part of liquidity and balance sheet management strategies. 65
Wesbanco’s ALCO is an executive management committee with Board representation, responsible for monitoring and managing interest rate risk within approved policy limits, utilizing earnings sensitivity simulation and economic value-at-risk models. These models are highly dependent on various assumptions, which change regularly as the balance sheet and market interest rates change.
Wesbanco’s ALCO is an executive management committee with Board representation, responsible for monitoring and managing interest rate risk within approved policy limits, utilizing earnings sensitivity simulation and economic value-at-risk models. These models are highly dependent on various assumptions, which change regularly as the balance sheet composition and market interest rates change.
In a decreasing rate environment, asset sensitivity may have greater impact on the margin than currently modeled as prepayment speeds increase, customers refinance or request rate reductions on existing loans, estimated deposit betas do not perform as modeled, or for other reasons.
In a decreasing rate environment, asset sensitivity may have greater impact on the margin than currently modeled as prepayment speeds increase, customers refinance or request rate reductions on existing loans, estimated deposit betas do not perform as modeled, or for other reasons not listed.
The consistency of Wesbanco’s net interest income is largely dependent on effective management of interest rate risk. As interest rates change in the market, rates earned on interest rate-sensitive assets and rates paid on interest rate-sensitive liabilities do not necessarily move concurrently.
The consistency of Wesbanco’s net interest income is largely dependent on effective management of Wesbanco's interest rate risk profile. As interest rates change in the market, rates earned on interest rate-sensitive assets and rates paid on interest rate-sensitive liabilities do not necessarily move concurrently.
Generally, changes in the economic value of equity relate to changes in various assets and liabilities, changes in the yield curve, as well as changes in loan prepayment speeds and deposit decay rates. The following table presents these results and Wesbanco’s policy limits as of December 31, 2022 and December 31, 2021.
Generally, changes in the economic value of equity relate to changes in various assets and liabilities, changes in the yield curve, as well as changes in loan prepayment speeds and deposit decay rates. The following table presents these results and Wesbanco’s policy limits as of December 31, 2023 and December 31, 2022.
Wesbanco’s current policy limits this exposure for the noted interest rate changes to a reduction of between 7.5% - 15%, or less, of net interest income from the stable rate base model over a twelve-month period.
Wesbanco’s current policy limits this exposure for the noted interest rate changes to a reduction of between 7.5% - 20%, or less, of net interest income from the stable rate base model over a twelve-month period.
Changes in EVE sensitivity since year-end 2021 relate to the change in market interest rates and their impact upon the fair values of earning assets and costing liabilities: Immediate Change in Interest Percentage Change in Economic Value of Equity from Base over One Year ALCO Rates (basis points) December 31, 2022 December 31, 2021 Guidelines +200 (4.3%) 1.6% (20.0%) +100 (1.8%) 1.8% (10.0%) -100 (0.8%) N/A (10.0%) -200 (7.9%) N/A (20.0%) -300 (17.5%) N/A (30.0%) The Bank has significant additional borrowing capacity with the FHLB of Pittsburgh, the Federal Reserve Bank of Cleveland and various correspondent banks, and may utilize these funding sources or interest rate swap strategies as necessary to lengthen liabilities, offset mismatches in various asset maturities and manage liquidity.
Changes in EVE sensitivity since year-end 2022 relate to the change in market interest rates and their impact upon the fair values of earning assets and costing liabilities: Immediate Change in Interest Percentage Change in Economic Value of Equity from Base over One Year ALCO Rates (basis points) December 31, 2023 December 31, 2022 Guidelines +200 0.3% (4.3%) (20.0%) +100 2.6% (1.8%) (10.0%) -100 (2.8%) (0.8%) (10.0%) -200 (8.0%) (7.9%) (20.0%) -300 (16.5%) (17.5%) (30.0%) -400 (28.0%) N/A (40.0%) The Bank has significant additional borrowing capacity with the FHLB of Pittsburgh, the Federal Reserve Bank of Cleveland and various correspondent banks, and may utilize these funding sources or interest rate swap strategies as necessary to lengthen liabilities, offset mismatches in various asset maturities and manage liquidity.
Interest rate risk policy limits are determined by measuring the anticipated change in net interest income over a twelve-month period, assuming immediate and sustained market interest rate increases and decreases of 100 - 300 basis points across the entire yield curve, as compared to a stable rate environment or base model.
Interest rate risk policy limits are determined by measuring the anticipated change in net interest income over a twelve-month period, assuming immediate and sustained market interest rate increases and decreases of 100 - 400 basis points across the entire yield curve, as compared to a flat rate environment or base model.
In addition to the aforementioned parallel rate shock earnings sensitivity simulation model, the ALCO also reviews a “dynamic” forecast scenario to project net interest income over a rolling two-year time period.
In addition to the aforementioned parallel rate shock earnings sensitivity simulation model, the ALCO also reviews a “dynamic” forecast scenario to project Wesbanco's "most likely" net interest income over a rolling two-year time period.
The key assumptions and strategies employed are analyzed, reviewed and documented at least quarterly by the ALCO. The earnings sensitivity simulation model projects changes in net interest income resulting from the effects of changes in interest rates.
The key assumptions and strategies employed are analyzed, reviewed and documented at least quarterly by the ALCO as well as provided to the Board. The earnings sensitivity simulation model projects changes in net interest income resulting from the effects of changes in interest rates.
The net interest income sensitivity results presented in Table 1, “Net Interest Income Sensitivity,” assumes that the balance sheet composition of interest sensitive assets and liabilities existing at the end of the period remains constant over the period being measured and also assumes that a particular change in interest rates is reflected uniformly across the yield curve, regardless of the duration of the maturity or re-pricing of specific assets and liabilities.
The net interest income sensitivity results presented in Table 1, “Net Interest Income Sensitivity,” assumes that the balance sheet composition of interest sensitive assets and liabilities existing at the end of the period remains constant over the period being measured (otherwise known as a "static" balance sheet) and also assumes that a particular change in interest rates is reflected immediately and parallel across all tenors of the yield curve, regardless of the duration of the maturity or re-pricing of specific assets and liabilities.
Assumptions are based on internally-developed models derived from Bank- specific data, current market rates and economic forecasts, and are internally back-tested and periodically reviewed by a third-party consultant.
Assumptions are based on internally-developed models derived from institution specific data, current market rates and economic forecasts, and are internally back-tested and periodically reviewed by an independent third-party consultant.
This forecast is updated at least quarterly, incorporating revisions and updated assumptions into the model for estimated loan and deposit growth, expected balance sheet re-mixing strategies, changes in forecasted rates for various maturities, competitive market spreads for various products and other assumptions.
This forecast is updated at least quarterly, incorporating revisions and updated assumptions into the model for estimated loan and deposit growth, expected balance sheet re-mixing strategies, changes in forecasted interest rates for various indices and yield curves, competitive market spreads for various products and other assumptions not listed.
NET INTEREST INCOME SENSITIVITY Immediate Change in Interest Percentage Change in Net Interest Income from Base over One Year ALCO Rates (basis points) December 31, 2022 December 31, 2021 Guidelines +200 5.6% 11.7% (10.0%) +100 2.8% 6.0% (7.5%) -100 (4.4%) N/A (7.5%) -200 (9.8%) N/A (10.0%) -300 (15.6%) N/A (15.0%) 66 Adjustments to relative sensitivities are due to the impact of the current lower rate and yield curve environment on base case net interest income and the related calculation of parallel rate shock changes in rising and falling rate scenarios.
NET INTEREST INCOME SENSITIVITY Immediate Change in Interest Percentage Change in Net Interest Income from Base over One Year ALCO Rates (basis points) December 31, 2023 December 31, 2022 Guidelines +200 3.3% 5.6% (10.0%) +100 3.0% 2.8% (7.5%) -100 (3.0%) (4.4%) (7.5%) -200 (7.0%) (9.8%) (10.0%) -300 (11.5%) (15.6%) (15.0%) -400 (16.3%) N/A (20.0%) 64 Net interest income sensitivity changes are due to the impact of the current rate and yield curve environment on base case net interest income and the related calculation of immediate parallel rate shock changes in rising and falling rate scenarios.
MARKET RISK The primary objective of Wesbanco’s ALCO is to maximize net interest income within established policy parameters. This objective is accomplished through the management of balance sheet composition, market risk exposures arising from changing economic conditions and liquidity risk.
MARKET RISK The primary objective of Wesbanco’s ALCO with direct oversight from the BOD is to maximize net interest income within established policy parameters. This objective is accomplished through the management of balance sheet composition and duration, market risk exposures arising from changing economic conditions as well as liquidity risk.
Additional differences typically result from changes in the various earning assets and costing liabilities mix and growth rates, as well as adjustments for various modeling assumptions.
Additional differences typically result from changes in the various earning assets and costing liabilities mix and growth rates, as well as periodic updates of various modeling assumptions.
Deposit betas, decay rates and loan prepayment speeds are adjusted periodically in our models for non-maturity deposits and loans.
Deposit betas, decay rates and loan prepayment speeds are adjusted periodically, but no less than annually in our models for non-maturity deposits and loans.
Differing rate sensitivities may arise because fixed rate assets and liabilities may not have the same maturities, or because variable rate assets and liabilities differ in the timing and/or the percentage of rate changes.
Differing rate sensitivities may arise because fixed rate assets and liabilities may not have the same maturities, because variable rate assets and liabilities differ in the timing and/or the magnitude of rate changes, or due to the shape of the yield curve shifting over time.
The table below indicates Wesbanco’s interest rate sensitivity at December 31, 2022 and December 31, 2021, assuming the above-noted interest rate changes, as compared to a base model. The 100 – 300 basis points decreasing changes for December 31, 2021 are not shown due to the unrealistic and/or negative yield nature of the results. TABLE 1.
The table below indicates Wesbanco’s interest rate sensitivity at December 31, 2023 and December 31, 2022, assuming the above-noted interest rate changes, as compared to a base model. TABLE 1.
Removed
Generally, deposit betas utilized in modeling are estimated at more conservative percentages for both up and down rate scenarios than has been the Bank’s historical experience, as a result of both competitive factors in our markets and as public funds and institutional contract terms are renewed.
Added
Since the assumptions used in the model relative to changes in interest rates are uncertain, the simulation analysis may not be indicative of actual results, particularly in times of stress.
Removed
Management is aware of the significant effect that inflation or deflation has upon interest rates and ultimately upon financial performance.
Added
Generally, interest bearing non-maturity deposit betas utilized in modeling have increased to 40% in up shocks and 30% in down shocks as the banking industry continues to remain in a high interest rate environment where funding cost pressures have persisted over the past year.
Removed
Wesbanco’s ability to cope with inflation or deflation is best determined by analyzing its capability to respond to changing market interest rates, as well as its ability to manage the various elements of non-interest income and expense during periods of increasing or decreasing inflation or deflation.
Removed
Wesbanco monitors the level and mix of interest-rate sensitive assets and liabilities through ALCO in order to reduce the impact of inflation or deflation on net interest income.
Removed
Management also controls the effects of inflation or deflation by conducting periodic reviews of the prices, costs and terms of its various products and services, as well as competitive factors, by approving new products and services or adjusting the terms and availability of existing products and services. 67

Other WSBC 10-K year-over-year comparisons