WESBANCO INC Q4 FY2025 earnings call

• Successful execution on growth-oriented business model while maintaining strong credit quality. Full year pretax pre-provision earnings growth over 100% y-o-y and EPS growth 45% to $3.40 ex-merger-related charges.
• Loan growth fully funded by deposit growth, driving fourth quarter net interest margin to $3.61. Fourth quarter efficiency ratio 52%.
• 2025 was strong with growth-oriented model delivering results, core strategic execution including loan growth funded by deposits, expanded net interest margin, and efficiency gains.
• Achieved strategic milestones like acquisition and integration of Premier Financial, transforming into a $28 billion asset regional financial services partner. Ranked among top 50 publicly traded U.S. financial institutions by assets.
• Invested in organic growth, opening loan production offices, launching health care vertical, optimizing financial center network and digital banking.
• Focus on relationship banking drove record treasury management revenue ($6 million) and record total wealth management assets under management ($10.4 billion).
• Disciplined execution with deposit growth funding loan growth, commercial real estate project payoffs totaling $905 million in 2025, new health care vertical team performing well.

For the full year, WesBanco generated pretax pre-provision earnings growth of more than 100% year-over-year and earnings per share growth of 45% to $3.40 when excluding merger-related charges. For the fourth quarter ending December 31, 2025, net income excluding merger and restructuring expenses available to common shareholders was $81 million and diluted earnings per share was $0.84, increasing 18% year-over-year. On a similar basis and excluding day 1 provision for credit losses, full year net income was $309 million and diluted earnings per share was $3.40. The fourth quarter net interest margin was $3.61. The efficiency ratio for the fourth quarter was 52%. Loan growth was fully funded by deposit growth both year-over-year and quarter-over-quarter. Nonperforming assets to total assets were 0.33%. The capital position was solid with a CET1 ratio of 10.3%.

• Anticipate mid-single-digit year-over-year loan growth in 2026 given current loan pipeline and market strength. CRE payoffs expected $600 million to $800 million in 2026, weighted to first half.
• First quarter net interest margin consistent with fourth quarter, second quarter expected to increase 3 to 5 basis points, back half of year into high 3.60% range.
• Focus on disciplined expense management for positive operating leverage. First quarter expense run rate consistent with fourth quarter, second quarter up due to midyear merit increases, revenue-producing hires, and marketing, back half modest growth from annual merit increases and revenue-enhancing technology investment.
• Provision for credit losses depends on macroeconomic forecast, qualitative factors, and credit quality metrics.
• Series B preferred stock dividends $4.24 million per quarter in 2026. Full year effective tax rate expected 20.5% to 21.5%.

• Macro economic environment changes could impact credit quality.
• Interest rate fluctuations may affect net interest margin.
• Commercial real estate payoffs exceeding expectations could impact loan growth.
• Operational efficiency gains may not meet expectations.

Q: Daniel Tamayo asked about loan growth expectation and CRE payoffs assumption.

A: Jeff Jackson said CRE payoffs will slow down in 2026 compared to fourth quarter, pipelines remain strong, and loan growth should be mid single digits with opportunities from LPOs and health care.

Q: Daniel Tamayo asked about health care vertical.

A: Jeff Jackson said the health care vertical did $500 million in new loans last year, contributed to swap fees, and will be a growth engine, LPOs in Knoxville, Northern Virginia, Chattanooga are going well.

Q: Russell Gunther asked about expense guide and branch network evaluation.

A: Jeff Jackson said they evaluate branch network continuously, not reflected in 2026 numbers but will continue to evaluate.

Q: Russell Gunther asked about margin outlook cadence.

A: Daniel Weiss explained deposit growth in fourth quarter pulled forward margin improvement, first quarter margin flat, second quarter expected 3-5 basis points improvement, back half dependent on various factors.

Q: Manuel Navas asked about NIM asset side dynamics.

A: Daniel Weiss talked about fixed rate loans repricing, new loan yields in fourth quarter around 6.15%, securities book repricing with $250 million cash flows per quarter.

Q: Manuel Navas asked about capital deployment priorities.

A: Jeffrey Jackson said priorities are dividends, loan growth, buybacks, with M&A distant, CET1 to reach 10.5%-11% for buybacks.

Q: Catherine Mealor asked about fair value accretion and borrowing base.

A: Daniel Weiss said about 27 basis points accretion in fourth quarter, 25 basis points expected in first quarter, bond book around 15%-17% of total assets.

Q: Karl Shepard asked about margin and LPO strategy.

A: Daniel Weiss said margin 3-5 basis points, Jeff Jackson talked about LPOs in Chattanooga, Knoxville, Nashville, and future expansion in other markets.

Q: David Bishop asked about deposit pipeline and loan types in new markets.

A: Jeffrey Jackson said deposit pipeline still good, loan types in new markets similar to legacy markets, including CRE, C&I, health care.

Q: Manuel Navas asked about fee initiatives.

A: Jeffrey Jackson said treasury management fees grew from $2 million in 2023 to $6 million in 2025, expected double-digit growth in 2026, swap fees also expected growth.