WesBanco, Inc. (WSBC) Q4 2025 Earnings Call Transcript
Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
Overview
The earnings call highlights strong financial performance, including a 53% increase in deposits, improved net interest margin, and record noninterest income. Loan growth and healthcare vertical expansion are promising, and operational efficiencies are evident. The Q&A session supports optimism with expectations of improved NIM and strategic growth in new markets. Although management avoided long-term guidance, the positive short-term outlook and strong market strategies suggest a positive stock price movement. Considering the market cap, the stock is likely to experience a positive reaction of 2% to 8%.
Key Financial Performance
Full year pretax provision earnings growth 105% year-over-year, driven by core strategic execution including loan growth, deposit growth, expanded net interest margin, and efficiency gains.
Full year earnings per share $3.40, a 45% increase year-over-year when excluding merger-related charges, attributed to strategic execution and operational efficiencies.
Fourth quarter net income $81 million, an 18% increase year-over-year, excluding merger and restructuring expenses.
Fourth quarter diluted earnings per share $0.84, an 18% increase year-over-year, excluding merger and restructuring expenses.
Full year net income $309 million, excluding day 1 provision for credit losses, reflecting strong financial performance.
Return on tangible common equity (Fourth quarter) 16%, indicating strong profitability.
Nonperforming assets to total assets 0.33%, reflecting strong credit quality.
CET1 ratio 10.3%, demonstrating solid capital position.
Record treasury management revenue $6 million, attributed to strong relationship banking.
Record total wealth management assets under management $10.4 billion, reflecting growth in wealth management services.
Fourth quarter organic loan growth 6% annualized from the third quarter and 5% year-over-year, despite a 4% headwind from elevated commercial real estate payoffs.
Commercial real estate project payoffs $415 million during the fourth quarter and over $900 million for the year, creating a headwind to loan growth.
Total assets $27.7 billion, a 48% increase year-over-year, driven by the acquisition of Premier Financial and organic growth.
Total portfolio loans $19.2 billion, a 52% increase year-over-year, including $5.9 billion from Premier Financial and $650 million in organic growth.
Total deposits $21.7 billion, a 53% increase year-over-year, including $6.9 billion from Premier Financial and $662 million in organic growth.
Fourth quarter net interest margin 3.61%, an 8 basis point increase from the third quarter and a 58 basis point increase year-over-year, driven by higher loan and security yields and lower funding costs.
Fourth quarter efficiency ratio 52%, reflecting operational efficiencies and cost control.
Noninterest income (Fourth quarter) $43.3 million, a 19% increase year-over-year, driven by the acquisition of Premier Financial and organic growth.
Record noninterest income (Full year) $167 million, driven by the acquisition of Premier Financial and organic growth.
Gross swap fees (Fourth quarter) $3.4 million, a $2.1 million increase year-over-year, reflecting traction in new markets.
Allowance for credit losses to total portfolio loans 1.14%, consistent with the third quarter, reflecting stable credit quality.
Net charge-offs 6 basis points of total loans, indicating low credit losses.
You have reached the limit. Sign up to access full content
Get started
Operating Highlights
New health care vertical: Launched a new health care vertical, including refinancing a major skilled nursing provider in Virginia. This relationship includes operating reserve and payroll accounts, as well as a 6-figure treasury management fee.
Market expansion: Expanded into new markets with loan production offices in Northern Virginia and Knoxville. Opened a new financial center in Chattanooga, Tennessee.
Efficiency ratio: Achieved a fourth quarter efficiency ratio of 52%, reflecting strong cost control measures.
Loan and deposit growth: Loan growth was fully funded by deposit growth year-over-year and quarter-over-quarter. Deposits increased 53% year-over-year to $21.7 billion, while loans increased 52% year-over-year to $19.2 billion.
Net interest margin: Improved to 3.61% in the fourth quarter, an increase of 58 basis points year-over-year.
Acquisition of Premier Financial: Successfully acquired and integrated Premier Financial, transforming WesBanco into a $28 billion asset regional financial services partner and ranking among the top 50 publicly traded U.S. financial institutions based on assets.
You have reached the limit. Sign up to access full content
Get started
Risk or Challenges
Commercial Real Estate (CRE) Payoffs: Significant increase in CRE project payoffs, totaling $415 million in Q4 and over $900 million for the year, which was $100 million more than anticipated. This created a 4% headwind to loan growth year-over-year and quarter-over-quarter. Elevated CRE payoffs are expected to persist in 2026, with estimates between $600 million and $800 million, weighted towards the first half of the year.
Macroeconomic Factors: Provision for credit losses and allowance for credit losses are influenced by macroeconomic conditions, which could impact credit quality metrics, prepayment speeds, and loan growth.
Interest Rate Environment: The company is modeling two 25 basis point Fed rate cuts in 2026, which could impact net interest margin and overall financial performance.
Branch Optimization: Closure of 27 financial centers in January 2026 to save $6 million annually. While this is a cost-saving measure, it could potentially impact customer accessibility and satisfaction.
Marketing and Technology Investments: Increased marketing expenses by $800,000 per quarter and higher equipment and software expenses to improve customer experience and drive revenue growth. These investments could strain short-term financials.
Deposit and Loan Growth: Loan growth is fully funded by deposit growth, but elevated CRE payoffs and reliance on deposit campaigns could pose challenges to sustaining growth.
Regulatory and Compliance Costs: Higher FDIC insurance expenses due to larger asset size, which could increase operational costs.
You have reached the limit. Sign up to access full content
Get started
Guidance & Outlook
Loan Growth: Despite anticipated elevated CRE payoffs through at least the first half of the year, the company expects mid-single-digit year-over-year loan growth during 2026, supported by a current commercial loan pipeline of over $1.2 billion.
Net Interest Margin: The company anticipates the first quarter 2026 net interest margin to be roughly consistent with the fourth quarter 2025 margin of 3.61%, with an increase of 3 to 5 basis points in the second quarter and modest growth into the high 3.60% range in the back half of the year.
CRE Payoffs: Commercial real estate payoffs are expected to remain elevated during 2026, estimated between $600 million and $800 million for the year, weighted more towards the first half.
Fee Income: First quarter 2026 fee income is expected to be consistent with the fourth quarter 2025. Trust fees are anticipated to benefit modestly from organic growth, while mortgage banking is expected to grow modestly beginning in the spring due to improved market conditions and recent hiring initiatives.
Treasury Management Revenue: Total treasury management revenues are expected to increase from 2025 levels as the compounding effect of services continues to expand.
Gross Commercial Swap Fee Income: Gross commercial swap fee income, excluding market adjustments, is projected to be in the $7 million to $10 million range for 2026.
Expense Management: The company plans to deliver disciplined expense management throughout 2026, with anticipated annual savings of approximately $6 million from the closure of 27 financial centers. Marketing expenses are expected to increase by approximately $800,000 per quarter to target new customers and deepen relationships with existing ones.
Tax Rate: The full-year effective tax rate for 2026 is expected to be between 20.5% and 21.5%, slightly higher than 2025 due to a lower percentage of tax-exempt income to total income.
You have reached the limit. Sign up to access full content
Get started
Shareholder Return Plan
Preferred Dividends: Preferred dividends reduced earnings available to common shareholders by $13 million, which represented the overlapping quarterly dividends on both the Series A and Series B preferred stock as well as the Series A redemption premium.
Series B Preferred Stock Dividends: Beginning with the first quarter of 2026, the dividends on our Series B preferred stock will be $4.24 million per quarter.
Redemption of Series A Preferred Stock: During the fourth quarter, we redeemed $150 million of our outstanding Series A preferred stock on November 15.
Redemption of Sub Debt: We redeemed $50 million of sub debt acquired from Premier on December 30, using the proceeds from our Series B preferred stock offering.
You have reached the limit. Sign up to access full content
Get started
Key Q&A
Q:What are the expectations for loan growth and payoffs in 2026?
A:Jeffrey Jackson stated that loan growth is expected to be in the mid-single digits, potentially better depending on the back half of the year. Payoffs, particularly in CRE, are expected to slow down compared to the elevated levels in the fourth quarter of 2025.
Q:Can you provide more details on the health care vertical?
A:Jeffrey Jackson highlighted that the health care vertical contributed around $500 million in new loans and $3 million in swap fees in 2025. It is expected to be a significant growth engine in 2026, offsetting CRE payoffs.
Q:What is the plan for branch closures and expense guidance?
A:Jeffrey Jackson mentioned that branch closures since 2019 total 93, and the company will continue to evaluate the branch network. These closures are not included in the current expense guidance but could reduce expenses further in 2026.
Q:What are the expectations for the net interest margin (NIM) in 2026?
A:Daniel Weiss explained that NIM is expected to improve by 3 to 5 basis points per quarter, with a high 360s range anticipated by the back half of 2026. Factors include deposit growth, loan repricing, and CD repricing.
Q:What is the impact of back book repricing and new loan yields on NIM?
A:Daniel Weiss noted that $400 million of fixed-rate loans with a 4.5% average rate will reprice to around 6%. New loans originated in Q4 2025 had a weighted average yield of 6.15%, contributing to NIM improvement.
Q:What are the capital deployment priorities?
A:Jeffrey Jackson outlined the priorities as dividends, loan growth, buybacks, and M&A (a distant fourth). CET1 is expected to exceed 10.5% by Q2 2026, providing flexibility for buybacks if growth slows.
Q:What is the expected cadence of fair value accretion in 2026?
A:Daniel Weiss stated that fair value accretion was 27 basis points in Q4 2025 and is expected to be 25 basis points in Q1 2026, gradually declining by 1-2 basis points per quarter over the next six years.
Q:What is the strategy for the bond book and borrowings?
A:Daniel Weiss mentioned that the bond book will remain at 15-17% of total assets, and borrowings will be managed to optimize return on equity.
Q:What are the profitability targets for 2026?
A:Daniel Weiss stated that the company aims for an ROA of around 1.30% and average tangible common equity in the high teens.
Q:What is the outlook for the LPO strategy?
A:Jeffrey Jackson expressed optimism about the LPO strategy, with plans to open a branch in Chattanooga in April 2026 and expand in Knoxville, Nashville, and other Southeastern markets. The strategy focuses on CRE, C&I, and health care loans.
Q:What is the deposit pipeline and cost outlook for 2026?
A:Jeffrey Jackson and Daniel Weiss noted strong deposit pipelines, with seasonal fluctuations expected. Spot deposit rates in December 2025 were 2.38%, down from the quarterly average of 2.45%.
Q:What types of loans are being generated in new LPO markets?
A:Jeffrey Jackson stated that loans in new LPO markets like Northern Virginia are similar to legacy markets, focusing on CRE, C&I, and health care, with no significant GovCon exposure.
Q:What is the growth outlook for fee initiatives?
A:Jeffrey Jackson highlighted strong growth in treasury management fees, commercial purchase cards, and swaps. Treasury fees grew from $2 million in 2023 to $6 million in 2025, with double-digit growth expected in 2026.
Q:Review of Unclear Management Responses
A:Management avoided providing specific guidance for 2027 and beyond, citing uncertainties in loan pricing, deposit competition, and other factors. Additionally, while they expressed optimism about the LPO strategy and fee initiatives, they did not provide detailed metrics or timelines for some of these growth areas.
You have reached the limit. Sign up to access full content
Get started
Earnings Word Cloud
The most frequently occurring keywords in this quarter's earning call
Chief acquisition
Financial WesBanco
Knoxville health
Loan deposit
Relations day
Tennessee focus
Virginia Knoxville
Virginia lead
WesBanco Conference
WesBanco asset
WesBanco demonstration
account property
acquisition institution
acquisition integration
action loan
advantage environment
approach record
asset capital
asset market
asset service
asset topic
average bank
bank syndication
banking others
basis day
capability customer
capital line
care center
care collaboration
day WesBanco
deposit interest
health care
loan production
merger charge
model
opening
production office
quality measure
relationship
share merger
WSBC Transcript
WesBanco, Inc. (WSBC) Q4 2025 Earnings Call Transcript
Positive1-28
The earnings call highlights strong financial performance, including a 53% increase in deposits, improved net interest margin, and record noninterest income. Loan growth and healthcare vertical expansion are promising, and operational efficiencies are evident. The Q&A session supports optimism with expectations of improved NIM and strategic growth in new markets. Although management avoided long-term guidance, the positive short-term outlook and strong market strategies suggest a positive stock price movement. Considering the market cap, the stock is likely to experience a positive reaction of 2% to 8%.
WesBanco, Inc. (WSBC) Q3 2025 Earnings Call Transcript
Positive10-23
The earnings report shows strong financial performance with significant year-over-year increases in net income, return on equity, and efficiency ratio. Loan and deposit growth are robust, supported by strategic acquisitions and organic growth. The Q&A highlights a positive outlook for loan production and margin expansion, despite some uncertainties in management responses. The market cap suggests a moderate reaction, leading to a positive stock price prediction (2% to 8%) over the next two weeks.
WesBanco, Inc. (WSBC) Q2 2025 Earnings Call Transcript
Positive7-30
The earnings call summary and Q&A reveal strong organic loan and deposit growth, positive net interest margin expectations, and effective cost management. The Premier acquisition integration is progressing well, and the company is optimistic about mid to upper single-digit loan growth. Despite some uncertainty in branch rationalization and macroeconomic impacts, the overall sentiment is positive, supported by robust pipelines and strategic growth initiatives. The market cap suggests a moderate reaction, leading to a 'Positive' sentiment rating for the stock price over the next two weeks.
WesBanco, Inc. (WSBC) Q1 2025 Earnings Conference Call Transcript
Positive4-30
The earnings call summary reveals strong financial performance with significant increases in net income, assets, and deposits, alongside improved net interest margin and efficiency ratio. Despite some risks associated with the Premier acquisition and economic factors, the company anticipates further margin improvements and deposit cost reductions. The Q&A session provides additional confidence with expectations of loan growth and fee income increases. However, the lack of a shareholder return plan and some management vagueness temper the outlook slightly. Given the market cap, the stock is likely to react positively in the short term.
WSBC Report
Frequently Asked Questions
Where does this earnings call transcript come from?
All transcripts are sourced directly from the official live webcast or the company’s official investor relations website. We use the exact words spoken during the call with no paraphrasing of the core discussion.
How soon is the transcript available after the earnings call ends?
Full verbatim transcripts are typically published within 4–12 hours after the call ends. Same-day availability is guaranteed for all S&P 500 and most mid-cap companies.
Is the transcript edited or altered in any way?
No material content is ever changed or summarized in the “Full Transcript” section. We only correct obvious spoken typos (e.g., “um”, “ah”, repeated 10 times”, or clear misspoken ticker symbols) and add speaker names/titles for readability. Every substantive sentence remains 100% as spoken.
Why do some answers appear as “Unclear” or “Inaudible”?
When audio quality is poor or multiple speakers talk over each other, we mark the section instead of guessing. This ensures complete accuracy rather than introducing potential errors.
Who creates the AI Summary and Key Q&A highlights shown above the transcript?
They are generated by a specialized financial-language model trained exclusively on 15+ years of earnings transcripts. The model extracts financial figures, guidance, and tone with 97%+ accuracy and is regularly validated against human analysts. The full raw transcript always remains available for verification.
