Deposit growth outpaces strong sequential quarter loan growth WHEELING, W.Va., April 23, 2024 /PRNewswire/ -- WesBanco, Inc. ("WesBanco") (NASDAQ:WSBC), a diversified, multi-state bank holding company, today announced net income and related earnings per share for the three months ended March 31, 2024. Net income available to common shareholders for the first quarter of 2024 was $33.2 million, with diluted earnings per share of $0.56, compared to $39.8 million and $0.67 per diluted share, respectively, for the first quarter of 2023. As noted in the following table, net income available to common shareholders, excluding after-tax restructuring and merger-related expenses, for the three months ended March 31, 2024 was $33.2 million, or $0.56 per diluted share, as compared to $42.3 million, or $0.71 per diluted share (non-GAAP measures). For the Three Months Ended March 31, 2024 2023 (unaudited, dollars in thousands, except per share amounts) Net Income DilutedEarningsPer Share Net Income DilutedEarningsPer Share Net income available to common shareholders (Non-GAAP)(1) $           33,162 $               0.56 $           42,301 $               0.71 Less: After-tax restructuring and merger-related expenses - - (2,491) (0.04) Net income available to common shareholders (GAAP) $           33,162 $               0.56 $           39,810 $               0.67 (1) See non-GAAP financial measures for additional information relating to the calculation of these items. Financial and operational highlights during the quarter ended March 31, 2024: Deposits of $13.5 billion increased 4.8% year-over-year and 2.5% quarter-over-quarter Average loans to average deposits were 88.7%, providing continued capacity to fund loan growth Solid sequential quarter deposit growth allowed for both the funding of loan growth and the pay-down of Federal Home Loan Bank borrowings Total loan growth was 9.0% year-over-year and 2.0% quarter-over-quarter, or 8.1% annualized Total loans are up $1.0 billion as compared to the prior year period Non-interest income increased 10.8% year-over-year, supported by new commercial loan swap and wealth management fees Trust assets increased to $5.6 billion, driven by both market value adjustments and organic growth Non-interest expense declined sequentially due to management of staffing levels and marketing costs Key credit quality metrics such as non-performing assets, total past due loans, and net loan charge-offs, as percentages of total portfolio loans, have remained at low levels and favorable to peer bank averages (based upon the prior four quarters for banks with total assets between $10 billion and $25 billion) WesBanco continues to earn national accolades, most recently Forbes' America's Best Banks 2024 "WesBanco's first quarter results marked a strong start to 2024. We grew loans and deposits while smartly managing borrowings, controlling costs, and advancing our efforts to diversify revenue streams and drive non-interest income," said Jeff Jackson, President and Chief Executive Officer, WesBanco. "Our commitment to customer service, sustainable growth strategies, and strong credit quality earned us yet another national accolade this quarter. With this solid start to the year and the continued strength of our teams, markets, and strategies, we are well-positioned to continue delivering value for our shareholders." Balance SheetAs of March 31, 2024, total portfolio loans were $11.9 billion, which increased $1.0 billion, or 9.0%, year-over-year driven by strong performance from our commercial and residential lending teams. Total commercial loans of $8.4 billion increased 9.3% year-over-year and 9.8% quarter-over-quarter annualized. Commercial loan growth continues to reflect the benefit of our commercial banker hiring and loan production office strategies, as well as lower commercial real estate payoffs of $63 million for the quarter, compared to an anticipated annual level in the $500 million range within a more normal operating environment. The commercial pipeline was a record $1.2 billion at March 31, 2024, with substantial generation from the four new loan production offices. Total deposits, as of March 31, 2024, were $13.5 billion, up 4.8% from March 31, 2023 and up 2.5% from December 31, 2023, reflecting the benefit of deposit gathering and retention efforts by our retail and commercial teams. The composition of total deposits continues to have some mix shift, reflecting the impact of the significant increase in the federal funds rate; however, total demand deposits continue to represent 55% of total deposits, with the non-interest bearing component representing 29%, which remains consistent with the percentage range prior to the pandemic. Credit QualityAs of March 31, 2024, total loans past due, criticized and classified loans, non-performing loans, and non-performing assets as percentages of the loan portfolio and total assets have remained low, from a historical perspective, and within a consistent range through the last two years. Total loans past due as a percent of the loan portfolio increased 4 basis points from the prior year but declined 8 basis points sequentially. Criticized and classified loans as a percent of the loan portfolio increased 8 basis points quarter-over-quarter to 2.30%, while non-performing assets as a percentage of total assets increased 3 basis points to 0.19% but were down 5 basis points from the prior year period. Net charge-offs of $5.9 million primarily reflect a single borrower with loans totaling $4.8 million. The allowance for credit losses to total portfolio loans at March 31, 2024 decreased slightly, as compared to the fourth quarter, to 1.09% of total loans, or $129.2 million. Excluded from the allowance for credit losses and related coverage ratio are fair market value adjustments on previously acquired loans representing 0.11% of total loans. Net Interest Margin and IncomeAs anticipated, the net interest margin of 2.92% for the first quarter of 2024 decreased 10 basis points sequentially and 44 basis points year-over-year primarily due to higher funding costs from increasing deposit costs and associated remix from non-interest bearing deposits into higher tier money market and certificate of deposit accounts. Total deposit funding costs were 256 basis points for the first quarter of 2024, and, when including non-interest deposits, total deposit funding costs were 181 basis points. Accretion from acquisitions benefited the first quarter net interest margin by 3 basis points, as compared to 4 basis points in the prior year period. First quarter net interest income of $114.0 million decreased $10.4 million, or 8.3%, year-over-year, reflecting the impact of rising rates on funding costs more than offsetting higher loan and securities yields and loan growth. Non-Interest IncomeFor the first quarter of 2024, non-interest income of $30.6 million increased $3.0 million, or 10.8%, from the first quarter of 2023. This increase was primarily due to net swap fee and valuation income, service charges on deposits, and trust fees. The net swap fee and valuation income of $1.6 million reflects $0.8 million of new swap fees and net fair value adjustments of $0.8 million, as compared to $1.8 million and negative $1.0 million, respectively, in the prior year period. Service charges on deposits increased $0.6 million year-over-year, reflecting fee income from new products and services and increased general consumer spending. Trust fees, which are seasonally higher during the first quarter, increased $0.6 million year-over-year due to an 11.4% increase in trust assets, driven by both market value adjustments and organic growth. Non-Interest ExpenseNon-interest expense, excluding restructuring and merger-related costs, for the three months ended March 31, 2024 were $97.2 million, a $4.2 million increase year-over-year but a $2.3 million decrease sequentially, which reflects lower quarterly average staffing levels and the timing of marketing campaigns. The year-over-year increase was primarily driven by increases in other operating expenses, salaries and wages, and equipment and software expenses. Other operating expenses increased $2.2 million primarily due to higher costs and fees in support of loan growth and higher miscellaneous taxes and expenses. Salaries and wages increased $1.0 million compared to the prior year period due to higher salary expense related to annual merit increases and new revenue-producing hires, mainly commercial lenders during the past year, partially offset by efficiency improvements in the mortgage and branch staffing models. Equipment and software expense increased $0.9 million due to the planned upgrade of our ATM fleet with the latest technology and general inflationary cost increases for existing service agreements. CapitalWesBanco continues to maintain what we believe are strong regulatory capital ratios, as both consolidated and bank-level regulatory capital ratios are well above the applicable "well-capitalized" standards promulgated by bank regulators and the BASEL III capital standards. At March 31, 2024, Tier I leverage was 9.79%, Tier I risk-based capital ratio was 11.87%, common equity Tier 1 capital ratio ("CET 1") was 10.84%, and total risk-based capital was 14.76%. In addition, the tangible common equity to tangible assets ratio improved to 7.63%. Conference Call and WebcastWesBanco will host a conference call to discuss the Company's financial results for the first quarter of 2024 at 10:00 a.m. ET on Wednesday, April 24, 2024. Interested parties can access the live webcast of the conference call through the Investor Relations section of the Company's website, www.wesbanco.com. Participants can also listen to the conference call by dialing 888-347-6607, 855-669-9657 for Canadian callers, or 412-902-4290 for international callers, and asking to be joined into the WesBanco call. Please log in or dial in at least 10 minutes prior to the start time to ensure a connection. A replay of the conference call will be available by dialing 877-344-7529, 855-669-9658 for Canadian callers, or 412-317-0088 for international callers, and providing the access code of 7101399. The replay will begin at approximately 12:00 p.m. ET on April 24, 2024 and end at 12 a.m. ET on May 8, 2024. An archive of the webcast will be available for one year on the Investor Relations section of the Company's website (www.wesbanco.com). Forward-Looking StatementsForward-looking statements in this report relating to WesBanco's plans, strategies, objectives, expectations, intentions and adequacy of resources, are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. The information contained in this report should be read in conjunction with WesBanco's Form 10-K for the year ended December 31, 2023 and documents subsequently filed by WesBanco with the Securities and Exchange Commission ("SEC"), which are available at the SEC's website, www.sec.gov or at WesBanco's website, www.WesBanco.com. Investors are cautioned that forward-looking statements, which are not historical fact, involve risks and uncertainties, including those detailed in WesBanco's most recent Annual Report on Form 10-K filed with the SEC under "Risk Factors" in Part I, Item 1A. Such statements are subject to important factors that could cause actual results to differ materially from those contemplated by such statements, including, without limitation, the effects of changing regional and national economic conditions, changes in interest rates, spreads on earning assets and interest-bearing liabilities, and associated interest rate sensitivity; sources of liquidity available to WesBanco and its related subsidiary operations; potential future credit losses and the credit risk of commercial, real estate, and consumer loan customers and their borrowing activities; actions of the Federal Reserve Board, the Federal Deposit Insurance Corporation, the Consumer Financial Protection Bureau, the SEC, the Financial Institution Regulatory Authority, the Municipal Securities Rulemaking Board, the Securities Investors Protection Corporation, and other regulatory bodies; potential legislative and federal and state regulatory actions and reform, including, without limitation, the impact of the implementation of the Dodd-Frank Act; adverse decisions of federal and state courts; fraud, scams and schemes of third parties; cyber-security breaches; competitive conditions in the financial services industry; rapidly changing technology affecting financial services; marketability of debt instruments and corresponding impact on fair value adjustments; and/or other external developments materially impacting WesBanco's operational and financial performance. WesBanco does not assume any duty to update forward-looking statements. Non-GAAP Financial MeasuresIn addition to the results of operations presented in accordance with Generally Accepted Accounting Principles (GAAP), WesBanco's management uses, and this presentation contains or references, certain non-GAAP financial measures, such as pre-tax pre-provision income, tangible common equity/tangible assets; net income excluding after-tax restructuring and merger-related expenses; efficiency ratio; return on average assets; and return on average tangible equity. WesBanco believes these financial measures provide information useful to investors in understanding our operational performance and business and performance trends which facilitate comparisons with the performance of others in the financial services industry. Although WesBanco believes that these non-GAAP financial measures enhance investors' understanding of WesBanco's business and performance, these non-GAAP financial measures should not be considered an alternative to GAAP. The non-GAAP financial measures contained therein should be read in conjunction with the audited financial statements and analysis as presented in the Annual Report on Form 10-K as well as the unaudited financial statements and analyses as presented in the Quarterly Reports on Forms 10-Q for WesBanco and its subsidiaries, as well as other filings that the company has made with the SEC. About WesBanco, Inc.Founded in 1870, Wesbanco, Inc. is a diversified and balanced financial services company that delivers large bank capabilities with a community bank feel. Our distinct long-term growth strategies are built upon unique sustainable advantages permitting us to span six states with meaningful market share. The company's banking subsidiary, Wesbanco Bank, Inc., operates more than 190 financial centers in the states of Indiana, Kentucky, Maryland, Ohio, Pennsylvania, and West Virginia. Built upon our 'Better Banking Pledge', our customer-centric service culture is focused on growing long-term relationships by pledging to serve all personal and business customer needs efficiently and effectively. In addition to a full range of online and mobile banking options and a full-suite of commercial products and services, the company provides trust, wealth management, securities brokerage, and private banking services through its century-old Trust and Investment Services department, with approximately $5.6 billion of assets under management (as of March 31, 2024). The company also offers insurance and brokerage services through its affiliates and subsidiaries. Learn more at www.wesbanco.com and follow us on Facebook, LinkedIn and X, formerly Twitter. WESBANCO, INC. Consolidated Selected Financial Highlights Page 5 (unaudited, dollars in thousands, except shares and per share amounts) For the Three Months Ended Statement of Income March 31, Interest and dividend income 2024 2023 % Change Loans, including fees $         166,974 $         133,406 25.2 Interest and dividends on securities: Taxable  17,404 19,086 (8.8) Tax-exempt 4,586 4,790 (4.3) Total interest and dividends on securities 21,990 23,876 (7.9) Other interest income  6,369 3,273 94.6           Total interest and dividend income 195,333 160,555 21.7 Interest expense Interest bearing demand deposits 25,590 11,106 130.4 Money market deposits 16,114 4,252 279.0 Savings deposits 7,667 4,000 91.7 Certificates of deposit 10,247 1,203 751.8 Total interest expense on deposits 59,618 20,561 190.0 Federal Home Loan Bank borrowings 17,000 11,300 50.4 Other short-term borrowings 674 418 61.2 Subordinated debt and junior subordinated debt  4,075 3,944 3.3 Total interest expense 81,367 36,223 124.6 Net interest income  113,966 124,332 (8.3) Provision for credit losses 4,014 3,577 12.2 Net interest income after provision for credit losses 109,952 120,755 (8.9) Non-interest income Trust fees 8,082 7,494 7.8 Service charges on deposits 6,784 6,170 10.0 Digital banking income 4,704 4,605 2.1 Net swap fee and valuation income  1,563 799 95.6 Net securities brokerage revenue 2,548 2,576 (1.1) Bank-owned life insurance 2,067 1,959 5.5 Mortgage banking income 693 426 62.7 Net securities gains 537 145 270.3 Net gains on other real estate owned and other assets 154 232 (33.6) Other income 3,497 3,247 7.7 Total non-interest income 30,629 27,653 10.8 Non-interest expense Salaries and wages 42,997 41,952 2.5 Employee benefits 12,184 12,060 1.0 Net occupancy 6,623 6,643 (0.3) Equipment and software 10,008 9,063 10.4 Marketing 1,885 2,325 (18.9) FDIC insurance  3,448 2,884 19.6 Amortization of intangible assets 2,092 2,301 (9.1) Restructuring and merger-related expense - 3,153 (100.0) Other operating expenses   17,954 15,744 14.0 Total non-interest expense 97,191 96,125 1.1 Income before provision for income taxes 43,390 52,283 (17.0) Provision for income taxes  7,697 9,942 (22.6) Net Income 35,693 42,341 (15.7) Preferred stock dividends 2,531 2,531 - Net income available to common shareholders $           33,162 $           39,810 (16.7) Taxable equivalent net interest income $        115,185 $        125,605 (8.3) Per common share data Net income per common share - basic $               0.56 $               0.67 (16.4) Net income per common share - diluted 0.56 0.67 (16.4) Net income per common share - diluted, excluding certain items (1)(2) 0.56 0.71 (21.1) Dividends declared 0.36 0.35 2.9 Book value (period end) 40.30 39.34 2.4 Tangible book value (period end) (1) 21.39 20.27 5.5 Average common shares outstanding - basic 59,382,758 59,217,711 0.3 Average common shares outstanding - diluted 59,523,679 59,375,053 0.3 Period end common shares outstanding 59,395,777 59,246,569 0.3 Period end preferred shares outstanding 150,000 150,000 - (1) See non-GAAP financial measures for additional information relating to the calculation of this item. (2) Certain items excluded from the calculation consist of after-tax restructuring and merger-related expenses.   WESBANCO, INC. Consolidated Selected Financial Highlights Page 6 (unaudited, dollars in thousands, unless otherwise noted) Selected ratios For the Three Months Ended March 31, 2024 2023 % Change Return on average assets 0.75 % 0.95 % (21.05) % Return on average assets, excluding     after-tax restructuring and merger-related expenses (1) 0.75 1.01 (25.74) Return on average equity 5.24 6.57 (20.24) Return on average equity, excluding     after-tax restructuring and merger-related expenses (1) 5.24 6.98 (24.93) Return on average tangible equity (1) 9.85 12.72 (22.56) Return on average tangible equity, excluding      after-tax restructuring and merger-related expenses (1) 9.85 13.48 (26.93) Return on average tangible common equity (1) 10.96 14.28 (23.25) Return on average tangible common equity, excluding      after-tax restructuring and merger-related expenses (1) 10.96 15.13 (27.56) Yield on earning assets (2)  4.98 4.32 15.28 Cost of interest bearing liabilities 2.98 1.52 96.05 Net interest spread (2) 2.00 2.80 (28.57) Net interest margin (2) 2.92 3.36 (13.10) Efficiency (1) (2) 66.65 60.66 9.87 Average loans to average deposits 88.67 83.46 6.24 Annualized net loan charge-offs/average loans 0.20 0.07 185.71 Effective income tax rate  17.74 19.02 (6.73) For the Three Months Ended Mar. 31, Dec. 31, Sept. 30, June 30, Mar. 31, 2024 2023 2023 2023 2023 Return on average assets 0.75 % 0.74 % 0.78 % 0.98 % 0.95 % Return on average assets, excluding     after-tax restructuring and merger-related expenses (1) 0.75 0.74 0.80 0.98 1.01 Return on average equity 5.24 5.21 5.49 6.81 6.57 Return on average equity, excluding     after-tax restructuring and merger-related expenses (1) 5.24 5.21 5.57 6.82 6.98 Return on average tangible equity (1) 9.85 10.11 10.60 12.98 12.72 Return on average tangible equity, excluding      after-tax restructuring and merger-related expenses (1) 9.85 10.11 10.75 12.99 13.48 Return on average tangible common equity (1) 10.96 11.32 11.87 14.52 14.28 Return on average tangible common equity, excluding      after-tax restructuring and merger-related expenses (1) 10.96 11.32 12.03 14.53 15.13 Yield on earning assets (2)  4.98 4.88 4.72 4.59 4.32 Cost of interest bearing liabilities 2.98 2.76 2.52 2.15 1.52 Net interest spread (2) 2.00 2.12 2.20 2.44 2.80 Net interest margin (2) 2.92 3.02 3.03 3.18 3.36 Efficiency (1) (2)  66.65 66.75 64.95 62.33 60.66 Average loans to average deposits 88.67 87.07 86.79 85.44 83.46 Annualized net loan charge-offs and recoveries /average loans 0.20 0.06 0.01 0.02 0.07 Effective income tax rate  17.74 19.66 16.83 16.80 19.02 Trust assets, market value at period end ($MM) $            5,601 $            5,360 $            4,982 $            5,127 $            5,026 Securities brokerage account value (includes annuities) ($MM) $            1,751 $            1,686 $            1,600 $            1,596 $            1,551 (1) See non-GAAP financial measures for additional information relating to the calculation of this item. (2) The yield on earning assets, net interest margin, net interest spread and efficiency ratios are presented on a fully      taxable-equivalent (FTE) and annualized basis. The FTE basis adjusts for the tax benefit of income on certain tax-exempt     loans and investments.   WesBanco believes this measure to be the preferred industry measurement of net interest income and    provides a relevant comparison between taxable and non-taxable amounts. $MM = in millions   WESBANCO, INC. Consolidated Selected Financial Highlights Page 7 (unaudited, dollars in thousands, except shares) % Change Balance sheet March 31, December 31, December 31, 2023 Assets 2024 2023 % Change 2023 to March 31, 2024 Cash and due from banks $         138,940 $         152,756 (9.0) $           158,504 (12.3) Due from banks - interest bearing 370,729 444,747 (16.6) 436,879 (15.1) Securities: Equity securities, at fair value 13,074 11,843 10.4 12,320 6.1 Available-for-sale debt securities, at fair value 2,119,272 2,465,996 (14.1) 2,194,329 (3.4) Held-to-maturity debt securities (fair values of $1,052,444; $1,107,685 and $1,069,159, respectively) 1,190,010 1,239,247 (4.0) 1,199,527 (0.8) Allowance for credit losses, held-to-maturity debt securities (183) (212) 13.7 (192) 4.7 Net held-to-maturity debt securities 1,189,827 1,239,035 (4.0) 1,199,335 (0.8) Total securities 3,322,173 3,716,874