10-K: Wesbanco's 2025 Growth Fueled by Acquisition, Faces Control Weakness

Sentiment:

Annual Report 2 March 2026 4:21 PM

Wesbanco reports significant asset and income growth in 2025 driven by the PFC acquisition, but diluted earnings per share declined and a material weakness in internal controls was identified.

Capital raiseOn August 1, 2024, Wesbanco issued 7,272,728 shares of common stock to complete a $200 million common equity capital raise, primarily to support the pro-forma bank's balance sheet and regulatory capital ratios in anticipation of the PFC acquisition.Wesbanco issued $230.0 million of Series B Preferred Stock in September 2025, which is considered Tier 1 capital. Proceeds were used to redeem $150.0 million of outstanding Series A Preferred Stock and $50.0 million of subordinated notes acquired in the PFC acquisition.

Worse than expectedDiluted earnings per common share decreased by 1.3% in 2025, despite a substantial increase in net income, indicating dilution from the share issuance related to the acquisition.A material weakness was identified in internal controls over financial reporting, specifically concerning the fair value of acquired assets in the Premier Financial Corp. business combination, which impacts the reliability of financial statements.

Summary

Net income available to common shareholders increased 43.3% to $202.6 million for the year ended December 31, 2025, compared to $141.4 million in 2024.
Diluted earnings per common share decreased 1.3% to $2.23 in 2025 from $2.26 in 2024.
Net interest income surged by $336.1 million, or 70.3%, in 2025, primarily due to the PFC acquisition and higher loan and securities yields.
Non-interest income grew by $38.8 million, or 30.3%, in 2025, with increases across most categories, including trust fees, service charges on deposits, and digital banking income.
Total assets expanded by 48.2% to $27.7 billion as of December 31, 2025, largely due to the $7.9 billion in assets acquired from PFC.
Total portfolio loans increased 51.9% to $19.2 billion, and total deposits rose 53.3% to $21.7 billion, reflecting the PFC acquisition and organic growth.
A material weakness was identified in the design and operating effectiveness of controls related to the fair value of assets acquired as part of the Premier Financial Corp. business combination.
The company's efficiency ratio (non-GAAP) improved to 52.9% in 2025 from 63.6% in 2024, as income growth outpaced expense increases post-acquisition.
Wesbanco maintains strong regulatory capital ratios, with CET1 at 10.37%, Tier 1 at 11.42%, and total risk-based capital at 13.92% as of December 31, 2025, all above well-capitalized standards.

Sentiment

Score: 6

Explanation: StockSavvy.ai views this filing as moderately positive, reflecting substantial growth in assets, loans, and net interest income driven by a strategic acquisition. However, the decline in diluted EPS and the identified material weakness in internal controls temper the overall sentiment, indicating areas requiring close attention and remediation.

Positives

Net income available to common shareholders increased 43.3% to $202.6 million in 2025.
Net interest income increased $336.1 million (70.3%) in 2025, driven by higher earning asset balances and improved net interest margin of 3.53%.
Non-interest income increased $38.8 million (30.3%) in 2025, with notable growth in trust fees ($6.4 million), service charges on deposits ($11.4 million), and digital banking income ($6.5 million).
Total assets grew 48.2% to $27.7 billion, and total portfolio loans increased 51.9% to $19.2 billion, largely due to the PFC acquisition.
Total deposits increased 53.3% to $21.7 billion, benefiting from the PFC acquisition and organic growth.
The efficiency ratio improved significantly to 52.9% in 2025 from 63.6% in 2024.
Regulatory capital ratios remain strong and well above minimum requirements: CET1 at 10.37%, Tier 1 at 11.42%, and Total Capital at 13.92%.
The quarterly dividend was increased to $0.38 per share in Q4 2025, marking the eighteenth increase in fifteen years, representing a 171% cumulative increase over that period.
Wesbanco Bank received an 'Outstanding' CRA rating for its community development performance, its eighth consecutive such rating.

Negatives

Diluted earnings per common share decreased 1.3% to $2.23 in 2025, despite a significant increase in net income, due to increased share count from the PFC acquisition.
Criticized and classified loan balances increased to 3.15% of total portfolio loans at December 31, 2025, up from 2.80% in 2024, primarily due to downgrades within the commercial real estate (CRE) portfolio.
Non-performing loans increased $51.8 million (130.4%) to $91.6 million at December 31, 2025, representing 0.48% of total loans, up from 0.31% in 2024.
A material weakness was identified in the design and operating effectiveness of controls related to the fair value of assets acquired as part of the Premier Financial Corp. business combination, specifically regarding precision and evidence of reviews of valuation assumptions.
Restructuring and merger-related expenses increased significantly to $75.9 million in 2025 from $6.4 million in 2024, primarily due to the PFC acquisition and branch optimization.

Risks

Climate change, manifesting as physical or transition risks, could adversely affect operations, businesses, and customers, potentially disrupting operations, damaging assets, and increasing expenses.
Global pandemics could adversely affect operations and customers, leading to decreased business, inability to meet payment obligations, and material adverse effects on financial condition.
Economic conditions in Wesbanco's market areas (West Virginia, Ohio, Pennsylvania, Kentucky, Indiana, Maryland, northern Virginia, southern Michigan, Tennessee) could negatively impact earnings, loan portfolio quality, and deposit base.
Volatility in oil and gas prices may negatively impact shale gas activity in West Virginia, Ohio, and Pennsylvania, affecting commercial and retail customers.
Changes to fiscal, political, and other federal policies (e.g., international trade, tax laws, corporate governance) could adversely impact Wesbanco's business and customers.
Extensive government regulation and supervision, including potential changes to statutes, regulations, or policies, could increase costs, limit financial services, and subject Wesbanco to sanctions.
Severe weather, natural disasters, disease pandemics, acts of war or terrorism, international hostilities, domestic civil unrest, and other external events could significantly adversely impact business operations and financial stability.
The soundness of other financial institutions could adversely impact Wesbanco due to interrelationships in trading, clearing, and counterparty exposures.
Current market interest rates and cost of funds may negatively impact net interest income, especially in declining rate environments or with increased reliance on higher-cost borrowings.
Significant declines in U.S. and global markets could negatively impact earnings through credit deterioration in investment securities, rating agency downgrades, and deterioration of pension assets.
A high percentage of the loan portfolio is concentrated in West Virginia, Ohio, Pennsylvania, Kentucky, Indiana, Maryland, Virginia, Michigan, and Tennessee, and in commercial and residential real estate, making the company more sensitive to disruptions in these markets.
Risks inherent in municipal bonds, including default risk, early redemption provisions, and credit rating downgrades, could lead to impairment charges.
The Current Expected Credit Losses (CECL) accounting standard could result in significant volatility in credit loss estimations and materially impact financial condition or results of operations.
Wesbanco may be required to write down goodwill and other intangible assets, negatively affecting shareholders' equity and financial results.
Increased competition from other banks, financial companies, and FinTech companies may hinder the ability to attract and retain banking customers and reduce profit potential.
Inability to expand the trust and investment services segment and retain current customers due to competition from various financial service providers.
Future expansion through acquisitions or new branches involves expenses and risks, including integration challenges, undisclosed liabilities, diversion of management attention, and potential dilution of shareholder interests.
Suitable acquisition opportunities may not be available in the future, impacting business growth.
Exposure to operational risks, including reputational risk, legal and compliance risk, fraud, errors, and system malfunctions, could adversely impact the company.
Loss of key employees or challenges in attracting and retaining talent could impact growth and earnings.
Limited availability of borrowings and liquidity from the Federal Home Loan Bank system and other sources could negatively impact earnings.
Wesbanco's financial condition and results of operations depend on the successful growth of its subsidiaries.
The need to raise capital in the future, with no assurance of availability or acceptable terms, could have a material adverse effect.
The effectiveness of Wesbanco's enterprise risk management framework is crucial for mitigating risk exposures; an ineffective framework could lead to unexpected losses.
Interruption to information systems or breaches in security could adversely affect operations, damage reputation, lead to customer loss, regulatory scrutiny, and financial liability.
Dependence on third parties for processing and handling company records and data introduces operational risk if vendors fail to maintain adequate controls.
Failure to keep pace with rapid technological change in the financial services industry could negatively affect growth, revenue, and profit.
Outstanding securities senior to common stock (Series B Preferred Stock) could limit the ability to pay dividends on common stock and grant voting rights to preferred shareholders under certain nonpayment events.

Future Outlook

Wesbanco anticipates that the expected cost savings and revenue synergies from the Premier Financial Corp. merger may not be fully realized within the expected timeframes. The company also acknowledges the unpredictable nature of climate change and its potential impact on risk management strategies. Management will continue to monitor and refine its risk framework as new climate trends and risks arise. The company's dynamic forecast scenario projects net interest income over a rolling two-year period, incorporating revisions and updated assumptions for loan and deposit growth, balance sheet re-mixing strategies, and changes in forecasted interest rates.

Management Comments

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.
Management has continued to focus on sound initial underwriting and timely collection of loans at their earliest stage of delinquency.

Industry Context

StockSavvy.ai notes that Wesbanco's significant growth in 2025, largely driven by the Premier Financial Corp. acquisition, aligns with the broader trend of consolidation within the financial services industry. The company's expansion into new metropolitan markets, particularly in Ohio and Michigan, positions it against entrenched larger bank competitors. The emphasis on digital banking income and treasury management services reflects the industry's shift towards technology-driven solutions and competition from FinTech companies. Wesbanco's consistent 'Outstanding' CRA rating demonstrates a strong commitment to community development, which can be a competitive differentiator in local markets, especially as regulatory scrutiny on community lending remains high.

Comparison to Industry Standards

Wesbanco's performance-based restricted stock awards are benchmarked against a national peer group of financial institutions with total assets between approximately $18.6 billion and $49.9 billion, indicating a focus on competitive executive compensation relative to similar-sized regional banks.
The company's efficiency ratio of 52.87% in 2025, while an improvement from 63.52% in 2024, suggests a strong operational leverage post-acquisition, potentially outperforming some peers still integrating mergers or facing higher operating costs.
The increase in non-performing loans to 0.48% of total loans, while still relatively low, warrants monitoring compared to industry averages, especially given the increase in criticized and classified loans, which could signal emerging credit quality concerns in the expanded portfolio.

Management Changes

Role	Previous Person	New Person	Effective Date	Reason
Senior EVP, Group Head and Chief Administrative Officer	NA	Jan Pattishall-Krupinski	2024-12-20	Continued employment in an executive capacity, with an initial revolving term of three years.
NA	Brent E. Richmond	NA	2025-04-21	Separation Agreement, Release and Waiver of Claims.

Corporate Governance

Change Type	Description	Effective Date	Impact Assessment
Amendment to Restated Articles of Incorporation	Cancellation of 150,000 shares of 6.75% Fixed-Rate Reset Non-Cumulative Perpetual Preferred Stock, Series A, following full redemption.	2025-11-17	Simplifies capital structure by removing Series A Preferred Stock, potentially reducing preferred dividend obligations.
Amendment to Restated Articles of Incorporation	Authorization of 230,000 shares of 7.375% Fixed-Rate Reset Non-Cumulative Perpetual Preferred Stock, Series B.	2025-09-16	Introduces a new class of preferred stock with specific dividend and reset terms, impacting capital structure and potential future dividend payments to common shareholders.
Amendment to Restated Articles of Incorporation	Increase in authorized common stock from 100,000,000 shares to 200,000,000 shares of par value $2.0833 per share.	2024-12-11	Provides greater flexibility for future equity issuances, including for acquisitions, financings, stock dividends, and stock-based grants, potentially leading to dilution for existing shareholders.
New Policy Adoption	Adoption of a new incentive-based compensation recovery policy ('clawback policy') effective December 1, 2023, in reference to NASDAQ Listing Rule 5608.	2023-12-01	Enhances corporate governance by aligning with regulatory requirements for executive compensation clawbacks, increasing accountability for financial reporting accuracy.

Legal Proceedings

Wesbanco is a party to various legal and administrative proceedings and claims arising in the ordinary course of business. Management does not believe that a material loss related to such proceedings or claims pending or known to be threatened is reasonably possible.

Related Party Transactions

Indebtedness of related parties (directors, officers, their affiliates, families, and entities) aggregated approximately $14.3 million as of December 31, 2025, up from $3.0 million in 2024.
During 2025, $22.2 million in related party loans were funded or acquired, and $10.8 million were repaid or no longer related.
As of December 31, 2025 and 2024, none of the outstanding related party loans were past due 90 days or more, on non-accrual, or considered a Modification for Borrowers Experiencing Financial Difficulty (MBEFD).
Management believes such transactions are consistent with prudent banking practices and within applicable banking regulations.

Stakeholder Impact

**Shareholders**: Common shareholders experienced a decrease in diluted EPS despite overall net income growth, due to share dilution from the PFC acquisition. The dividend per share increased, but the payout ratio also rose. Preferred shareholders benefit from the issuance of Series B Preferred Stock with a fixed-rate reset.
**Employees**: The PFC acquisition added approximately 900 employees, leading to increased salaries and benefits expenses. The company continues to invest in leadership training and talent development programs. A new clawback policy impacts executive compensation.
**Customers**: The acquisition expanded Wesbanco's footprint and customer base, particularly in Ohio and Michigan, offering a wider range of financial services through 251 branches. Digital banking income growth suggests increased customer engagement with online services. Community development initiatives, including the CRA Opportunity Mortgage and New Markets Loan Program, benefit underserved communities and small businesses.
**Creditors**: The increase in total assets and strong capital ratios enhance the company's financial stability, which is favorable for creditors. The issuance of subordinated debt and junior subordinated debt, classified as Tier 2 capital, provides additional funding sources.
**Regulatory Bodies**: The identified material weakness in internal controls related to the PFC acquisition will lead to increased scrutiny and requires significant remediation efforts, impacting regulatory compliance and oversight.

Next Steps

Management is in the process of implementing certain changes and additional internal controls during 2026 to remediate the identified material weakness in financial reporting.
The FDIC will commence Wesbanco's next CRA examination in the first half of 2026.
Wesbanco will continue to focus on its core deposit strategies and improving its overall mix of transaction accounts to total deposits.
The company will monitor the level and mix of interest-rate sensitive assets and liabilities through its Asset/Liability Committee (ALCO) to reduce the impact of inflation on net interest income.

Key Dates

Date	Description
2020-01-01	Wesbanco adopted the Current Expected Credit Losses (CECL) accounting standard.
2022-02-24	Board of Directors approved a stock repurchase plan for 3.2 million shares.
2022-03-23	Wesbanco issued $150.0 million of subordinated debentures.
2022-11-14	FDIC assigned an 'Outstanding' rating for Wesbanco Bank's community development performance for the period of July 2019 through November 2022.
2023-01-01	Wesbanco adopted Accounting Standards Update (ASU) 2022-02, discontinuing Troubled Debt Restructuring (TDR) accounting prospectively.
2023-06-30	Premier Financial Corp. (PFC) sold substantially all of the assets of its First Insurance Group of the Midwest, Inc. subsidiary.
2023-12-01	Wesbanco adopted a new incentive-based compensation recovery policy ('clawback policy').
2024-04-19	Wesbanco registered an additional 1,100,000 shares of common stock for issuance under the Incentive Plan.
2024-06-28	Wesbanco registered an additional 1,000,000 shares of common stock for issuance under the 401(k) plan.
2024-08-01	Wesbanco issued 7,272,728 shares of common stock to complete a $200 million common equity capital raise, in conjunction with the PFC acquisition announcement.
2024-12-12	Wesbanco signed an agreement with a third-party annuity provider to transfer future payment obligations of 685 pension plan participants.
2024-12-20	Employment Agreement for Jan Pattishall-Krupinski, Senior EVP, Group Head and Chief Administrative Officer, became effective.
2024-12-31	End of fiscal year 2024.
2025-01-01	The five-year transition rule for CECL's impact on regulatory capital ended.
2025-01-01	Start of the three-year performance period for performance-based restricted stock (PBRS) granted in 2025.
2025-02-28	Wesbanco completed its acquisition of Premier Financial Corp. (PFC).
2025-05-21	Wesbanco granted 53,250 stock options to selected participants.
2025-09-15	Wesbanco filed Articles of Amendment establishing the preferences, limitations, and relative rights of the Series B Preferred Stock.
2025-09-17	Wesbanco issued 9,200,000 depositary shares, representing 230,000 shares of Series B Preferred Stock.
2025-09-30	Subordinated debentures acquired in the PFC acquisition became callable.
2025-10-23	Board of Directors unanimously approved the amendment to the Restated Articles of Incorporation to cancel Series A Preferred Stock.
2025-11-17	Articles of Amendment to the Restated Articles of Incorporation, canceling Series A Preferred Stock, were executed.
2025-11-30	Wesbanco completed its annual quantitative goodwill impairment evaluation.
2025-12-31	End of fiscal year 2025.
2025-12-31	End of the three-year measurement period for the 2023 Total Shareholder Return Plan (TSRP) grant.
2026-01-01	First dividend payment date for the Series B Preferred Stock.
2026-03-02	Date of the audit report by Ernst & Young LLP.
2026-03-31	Deadline for filing the definitive proxy statement for the Annual Meeting of Shareholders.
2026-05-22	First vesting installment for stock options granted on May 21, 2025.
2026-12-31	Second vesting installment for stock options granted on May 21, 2025.
2026-H1	FDIC will commence Wesbanco's next CRA examination.
2029-05-01	First vesting of performance-based restricted shares from the 2025 plan (50%).
2030-05-01	Final vesting of performance-based restricted shares from the 2025 plan (50%).
2030-10-01	First Reset Date for the 7.375% Fixed-Rate Reset Non-Cumulative Perpetual Preferred Stock, Series B.
2032-04-01	Maturity date for subordinated debentures issued in March 2022.

Recommendation

hold

Wesbanco's 2025 results show substantial growth in assets, loans, and net interest income, primarily driven by the strategic acquisition of Premier Financial Corp. This expansion strengthens its market position and operational scale. However, the decline in diluted earnings per share, coupled with the identification of a material weakness in internal controls related to the acquisition's asset valuation, introduces significant uncertainty and risk. While the long-term synergies of the acquisition could be beneficial, the immediate impact on per-share profitability and the control deficiency warrant a cautious 'hold' recommendation. Investors should monitor the effectiveness of the remediation efforts for the material weakness and the company's ability to translate its expanded scale into improved diluted EPS in future periods.

Keywords

Banking, Financial Services, Acquisition, Merger, SEC Filing, 10-K, Financial Performance, Net Income, EPS, Assets, Loans, Deposits, Capital Ratios, Internal Controls, Risk Management, Corporate Governance, Preferred Stock, Commercial Real Estate, Community Banking, Trust Services, Regulatory Compliance, Cybersecurity

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