WesBanco Announces First Quarter 2021 Financial Results

Wheeling, WV, April 27, 2021 – 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, 2021.  Net income available to common shareholders for the period was $70.6 million, with diluted earnings per share of $1.05, compared to $23.4 million and $0.35 per diluted share, respectively, for the first quarter of 2020.  Net income available to common shareholders excluding after-tax restructuring and merger-related expenses for the three months ended March 31, 2021, was $71.3 million, or $1.06 per diluted share, as compared to $27.5 million and $0.41 per diluted share, respectively, in the prior year quarter (non-GAAP measures).

WesBanco believes that pre-tax, pre-provision income (non-GAAP measure) provides a more comparable year-over-year measure as it removes the provision for credit losses to improve comparability from quarter-to-quarter due to the CECL accounting standard. For the three months ended March 31, 2021, pre-tax, pre-provision income, excluding restructuring and merger-related expenses, increased 3.6% year-over-year to $64.2 million compared to $62.0 million for the prior period.  In addition, on the same basis, the return on average assets was 1.57% for the three month period ending March 31, 2021.  WesBanco believes that these non-GAAP financial measures are useful to investors as they enhance investors’ understanding of the Company’s business and performance.

Financial and operational highlights during the quarter ended March 31, 2021:

“We are pleased with WesBanco’s performance during the first quarter of 2021 as we are in the early stages of emerging from the pandemic,” said Todd F. Clossin, President and Chief Executive Officer of WesBanco.  “I am proud of our entire organization as it has worked tirelessly to serve our customers and communities throughout the past year.  Their outstanding efforts led to WesBanco Bank recently being named, for the third year in a row, one of the world’s best banks in an independent ranking based solely on customer satisfaction and feedback.  This exceptional ranking is in addition to being named one of the fifteen best banks in America by Forbes magazine, which represents our eleventh year making the list since its inception in 2010.”

Mr. Clossin added, “I would also like to recognize Abdul Muhammad, our Senior Vice President and Regional Manager of Residential Lending.  In addition to his chairing our Diversity, Equity, and Inclusion Council, he was recently appointed as one of the eight members of the Federal Reserve Bank of Cleveland’s Equity and Inclusion Advisory Council.  We are excited about our opportunities for the upcoming year as we build upon our well-defined, long-term strategies by leveraging the efforts of Abdul and our Council to further the principles of diversity and inclusion across not just WesBanco but also our communities.”

Balance Sheet

Portfolio loans of $10.7 billion as of March 31, 2021 increased 3.4% when compared to the prior year period, due primarily to participation in the SBA PPP, which totaled approximately 7,750 loans for $824 million.  During the first quarter, approximately 2,330 customers applied for and received forgiveness of their Round 1 SBA PPP loans totaling $223 million; while our lenders assisted more than 3,240 businesses with Round 2 SBA PPP loans totaling approximately $344 million.

Total deposits increased 20.3% year-over-year to $13.3 billion due primarily to CARES Act stimulus funds received and increased personal savings, which more than offset a $384.2 million reduction in certificates of deposit.  Deposits, excluding CDs, increased 28.9% year-over-year, driven by a 36.0% increase in total demand deposits, which represent approximately 57% of total deposits.

Credit Quality

As of March 31, 2021, total loans past due, non-performing loans, and non-performing assets as percentages of the portfolio and total assets have remained relatively low and consistent throughout the last five quarters.  Furthermore, on a sequential quarter-basis as compared to the quarter ending December 31, 2020, total loans past due declined $7.0 million, total non-performing assets decreased $2.8 million, and total criticized and classified loans declined $39.0 million. In addition, annualized net loan charge-offs to average loans remained low for the quarter at two basis points.  Reflecting improved macroeconomic factors in the CECL calculation, the allowance for credit losses specific to total portfolio loans at March 31, 2021 was $160.0 million, or 1.50% of total loans; or, when excluding SBA PPP loans, 1.62% of total portfolio loans.  Excluded from the allowance for credit losses and related coverage ratio are fair market value adjustments on previously acquired loans representing 0.34% of total loans.  The improved factors resulted in a negative provision for credit losses of $28.0 million for the first quarter of 2021.

Net Interest Margin and Income

The net interest margin of 3.27% for the first quarter of 2021 decreased four and 27 basis points, respectively, from the fourth and first quarters of 2020, primarily due to the lower interest rate environment.  As a result of higher cash balances from additional stimulus funds received by our customers and their higher personal savings creating extra liquidity, investment securities increased by $0.9 billion during the first quarter, mostly during March.  Reflecting the significantly lower interest rate environment, we aggressively reduced our deposit rates throughout the past year, which helped to lower deposit funding costs 35 basis points year-over-year to 20 basis points for the first quarter of 2021, or 14 basis points when including non-interest bearing deposits.  Further, we lowered the cost of FHLB borrowings 25 basis points year-over-year as we reduced first quarter average borrowings by $1.0 billion, or 66.8%, year-over-year to $0.5 billion, which have a remaining average life of less than one year.  Accretion from acquisitions benefited the first quarter net interest margin by 13 basis points, as compared to 22 basis points in the prior year period and 16 basis points during the fourth quarter of 2020.  Lastly, the forgiveness of existing and funding of new SBA PPP loans benefited the first quarter of 2021 net interest margin by a net 11 basis points, and will positively impact the net interest margin as the loans are forgiven during the next couple of quarters.

Net interest income decreased $3.7 million, or 3.1%, during the first quarter of 2021, as compared to the same quarter of 2020, reflecting lower loan yields due to repricing of existing loans and lower new offered rates in the current market environment, lower related accretion from purchase accounting, and lower rates on investment securities partially offset by lower interest on deposits and borrowings as described above.

Non-Interest Income

For the first quarter of 2021, non-interest income of $33.2 million increased $5.2 million, or 18.6%, from the first quarter of 2020, driven primarily by mortgage banking income and higher commercial customer loan swap-related income, which were partially offset by lower service charges on deposits and net securities gains.  Reflecting the low interest rate environment and organic growth, mortgage banking fees increased $3.0 million, or 234.2%, compared to the prior year period, net of fair value adjustments, as residential mortgage origination dollar volume increased approximately 50% year-over-year, with roughly 60% of those originations sold into the secondary market.  Loan swap-related income was $4.7 million, an increase of $4.8 million year-over-year, primarily the result of $2.8 million of fair market value adjustments in the current period as compared to a negative $2.8 million adjustment last year.  Service charges on deposits were lower due to higher consumer deposits associated with the three rounds of stimulus to-date and lower general consumer spending, resulting in fewer eligible account fees.

WesBanco has jointly executed a purchase agreement in which Pueblo Bank and Trust (“PB&T”) will acquire WesBanco’s non-essential debit card sponsorship portfolio of clients, which was acquired as part of its Old Line Bancshares, Inc. merger.  The all-cash purchase price is for a maximum of $2.8 million, which will be paid monthly over a two-year period based on a 50%-50% split of the monthly gross revenue earned by PB&T.

Non-Interest Expense

Total operating expenses continued to be well-controlled through company-wide efforts to effectively manage discretionary costs and full-time equivalent employee counts, as demonstrated by a year-to-date efficiency ratio of 56.71%.  Excluding restructuring and merger-related expenses, non-interest expense for the three months ended March 31, 2021 decreased $0.7 million, or 0.8%, to $85.5 million compared to the prior year period, primarily due to lower salaries and wages from the recent financial center closures, as well as continuing cost control measures over certain discretionary expenses.  Marketing expense for the first quarter of 2021 increased $1.2

million, or 109.5%, year-over-year due to increased product advertising and brand awareness campaigns that were delayed from 2020 due to the COVID-19 pandemic.

Capital

WesBanco continues to maintain what we believe are strong regulatory capital ratios, as both consolidated and bank-level regulatory capital ratios are well above the applicable “well-capitalized” standards promulgated by bank regulators and the BASEL III capital standards.  At March 31, 2021, Tier I leverage was 10.74%, Tier I risk-based capital ratio was 14.95%, common equity Tier 1 capital ratio (“CET 1”) was 13.65%, and total risk-based capital was 17.58%.

On April 22, 2021, WesBanco’s Board of Directors authorized the adoption of a new stock repurchase plan for the purchase of up to an additional 1.7 million shares of WesBanco common stock from time to time on the open market.  This new stock repurchase authorization is in addition to the existing stock repurchase program approved by WesBanco’s Board of Directors on December 19, 2019 which has approximately 1.7 million shares remaining for repurchase and will continue to be utilized until such authorization is completed.  The combination of these two authorizations represents approximately 5.0% of outstanding shares.

Conference Call and Webcast

WesBanco will host a conference call to discuss the Company's financial results for the first quarter of 2021 at 10:00 a.m. ET on Wednesday, April 28, 2021.  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.

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 10150967.  The replay will begin at approximately 12:00 p.m. ET on April 28, and end at 12 a.m. ET on May 12.  An archive of the webcast will be available for one year on the Investor Relations section of the Company’s website (www.wesbanco.com).

Forward-Looking Statements

Forward-looking statements in this report relating to WesBanco’s plans, strategies, objectives, expectations, intentions and adequacy of resources, are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995.  The information contained in this report should be read in conjunction with WesBanco’s Form 10-K for the year ended December 31, 2020 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 including the effects of the COVID-19 pandemic; 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 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 Measures

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

About WesBanco, Inc.

Founded in 1870, WesBanco, Inc. (www.wesbanco.com) 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.  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, WesBanco provides trust, wealth management, securities brokerage, and private banking services through our century-old Trust and Investment Services department, with approximately $5.2 billion of assets under management (as of March 31, 2021).  WesBanco's banking subsidiary, WesBanco Bank, Inc., operates 212 financial centers in the states of Indiana, Kentucky, Maryland, Ohio, Pennsylvania, and West Virginia.  Additionally, WesBanco operates an insurance agency, WesBanco Insurance Services, Inc., and a full service broker/dealer, WesBanco Securities, Inc.

SOURCE:  WesBanco, Inc.

WesBanco Company Contact:

John H. Iannone

Senior Vice President, Investor and Public Relations

304-905-7021

###

WESBANCO, INC.

Consolidated Selected Financial Highlights

(unaudited, dollars in thousands, except shares)