WesBanco : 2023 Annual Report

WesBanco, Inc. 2023 Annual Report

FINANCIAL HIGHLIGHTS

(in thousands, except shares and per share amounts)

			December 31,
			2023		2022		% Change
FOR THE YEAR	$	2.51
Earnings per common share-diluted	$	3.02		(16.9)
Earnings per common share-diluted, excluding certain items (1)(2)	$	2.56	$	3.04		(15.8)
Dividends declared per common share	$	1.41	$	1.37		2.9
Net income available to common shareholders	$	148,907	$	181,988		(18.2)
Net income available to common shareholders, excluding certain items (1)(2)	$	151,933	$	183,349		(17.1)
Average common shares outstanding-diluted		59,427,989		60,215,374		(1.3)
Period end common shares outstanding		59,376,435		59,198,963		0.3
Period end preferred shares outstanding		150,000		150,000		-
AT YEAR END	$	3,405,984
Securities	$	3,789,055		(10.1)
Net portfolio loans		11,507,786		10,584,938		8.7
Total assets		17,712,374		16,931,905		4.6
Deposits		13,168,704		13,131,090		0.3
Total FHLB and other borrowings		1,455,893		840,069		73.3
Subordinated and junior subordinated debt		279,078		281,404		(0.8)
Shareholders' equity		2,533,062		2,426,662		4.4
TRUST ASSETS AT MARKET VALUE (3)	$	5,360,657	$	4,878,479		9.9
KEY RATIOS		0.86%
Return on average assets		1.08%	(20.4)
Return on average assets, excluding certain items (1)(2)		0.88		1.09		(19.3)
Return on average tangible assets (1)		0.97		1.21		(19.8)
Return on average tangible assets, excluding certain items (1)(2)		0.99		1.22		(18.9)
Return on average equity		6.02		7.23		(16.7)
Return on average equity, excluding certain items (1)(2)		6.14		7.29		(15.8)
Return on average tangible equity (1)		11.59		13.78		(15.9)
Return on average tangible equity, excluding certain items (1)(2)		11.82		13.88		(14.8)
Return on average tangible common equity (1)		12.99		15.39		(15.6)
Return on average tangible common equity, excluding certain items (1)(2)		13.24		15.50		(14.6)
Average loans to average deposits		85.71		74.21		15.5
Allowance for credit losses to total loans		1.12		1.10		1.8
Allowance for credit losses to total non-performing loans		487.45		284.41		71.4
Non-performing assets to total assets		0.16		0.25		(36.0)
Net loan charge-offs to average loans		0.04		0.02		100.0
Dividend payout ratio		56.18		45.36		23.9
Dividend payout ratio, excluding certain items (1)(2)		55.08		45.07		22.2
Non-interest income as a percentage of total revenues		20.01		19.84		0.9
Efficiency ratio (1)(4)		63.64		59.53		6.9
Net interest margin (4)		3.14		3.20		(1.9)
CAPITAL RATIOS AT YEAR END		14.30%
Shareholders' equity to total assets		14.33%	(0.2)
Tangible equity to tangible assets (1)		8.49		8.19		3.7
Tangible common equity to tangible assets (1)		7.62		7.28		4.7
Tier 1 leverage ratio		9.87		9.90		(0.3)
Tier 1 capital to risk-weighted assets		12.05		12.33		(2.3)
Total capital to risk-weighted assets		14.91		15.11		(1.3)
Common equity tier 1 capital ratio		10.99		11.20		(1.9)
PER COMMON SHARE	$	31.37
Closing common stock price	$	36.98		(15.2)
Book value at year end		40.23		38.55		4.4
Tangible book value at year-end (1)		21.28		19.43		9.5

1. See non-GAAP financial measures for additional information relating to the calculation of this ratio.
2. Certain items excluded from the calculation consist of after-tax restructuring and merger-related expenses.
3. These assets are held by WesBanco in fiduciary or agency capacities for its customers and therefore are not included as assets on WesBanco's Consolidated Balance Sheets.
4. Taxable-equivalentbasis.

TO OUR SHAREHOLDERS:

Record interest rate escalation by the Federal Reserve significantly impacted all banks, including WesBanco. Despite that headwind, WesBanco performed well in 2023 through our continued focus on customer service and sustainable growth strategies. We achieved loan, deposit, and fee income growth, maintained strong capital levels and credit quality, and remained focused on ensuring a strong organization for our shareholders, while investing appropriately for long-term, sustainable growth. Through the last few years, we have transformed our company into an evolving regional financial services institution, with a community bank at its core. Our evolution hinges on three key factors: our acquisitions and loan production office strategy with the majority of our company now located in high-growth markets across eight states, new products and services such as our WesBanco One account, and the skill and dedication of our employees in delivering exceptional customer experiences. During 2023, WesBanco continued to demonstrate both soundness and profitability through strong credit quality metrics and solid loan and deposit growth, despite industry turmoil earlier in the year, while earning numerous national accolades for profitability, soundness, and employer of choice.

Financial Strength

Through successful operational execution, we generated solid annual net income, while remaining a well-capitalized institution with sound liquidity and credit quality metrics. For the twelve months ended December 31, 2023, net income available to common shareholders was $148.9 million, or $2.51 per diluted share, as compared to $182 million, or $3.02 per diluted share, for the prior year period. This year-over- year decrease was due to the significantly higher interest rate environment as liabilities repriced faster than assets, inflationary cost pressures, and the recording of provision expense as compared to the benefit of a release of provision for credit losses in the prior year. When excluding after-tax restructuring and merger-related expenses, net income for 2023 was $151.9 million, or $2.56 per diluted share [1]. On the same basis, the strength of our financial performance this past year is further demonstrated by our return on average tangible equity of 11.82%[1].

Total assets as of December 31, 2023 were $17.7 billion, highlighted by total portfolio loans of $11.6 billion, which increased 8.7% year- over-year. Loan growth extended across all categories and markets, reflecting the strong performance of our commercial and residential lending teams and our loan production office strategy. We achieved this growth while maintaining our strong credit standards, as demonstrated by a non-performing assets to total assets ratio of 0.16% and annualized net loan charge-offs to average loans of 0.04%. Further, deposit gathering and retention efforts by our retail and commercial teams were a key story, as we grew total deposits over the prior year and successfully navigated the industry-wide tumult earlier in the year. As of December 31st, deposits totaled $13.2 billion, with total demand deposits representing approximately 56% of the total. Reflecting the impact of the 525 basis point increase in the federal funds rate and significantly higher inflation, during the last two years, we reported a net interest margin of 3.14% and an efficiency ratio of 63.64%, for 2023. Reflecting a safe and sound financial institution for our customers, communities, employees, and shareholders, our key credit quality metrics continued to remain at low levels and favorable to peer bank averages, those with total assets between $10 and $25 billion; and, our consolidated and bank-level regulatory capital ratios remained well above the applicable "well-capitalized" standards promulgated by bank regulators and the BASEL III capital standards. At December 31, 2023, our Tier I Leverage Capital was 9.87%, Tier I Risk-Based Capital 12.05%, Total Risk-Based Capital 14.91%, and the Common Equity Tier 1 Capital Ratio ("CET 1") 10.99%, while our tangible common equity ratio was 7.62%.

We maintained our critical, long-term focus on appropriate capital allocation to provide financial flexibility while continuing to enhance shareholder value through earnings growth and effective capital management, including loan growth, dividends, acquisitions, and share repurchases. Reflecting our strong capital position and net income, we declared a one-cent increase to our quarterly common stock cash dividend on November 15th, raising the dividend to $0.36 per common share. This increase represented a 2.9% increase in the quarterly dividend compared to the fourth quarter of 2022, an annualized cash dividend of $1.44, and a cumulative increase of more than 157% since 2010. WesBanco offers a current dividend yield of approximately 5.0% based upon the market price of WesBanco common stock on February 23, 2024.

Highlights and Accolades

During 2023, we achieved significant milestones and earned numerous national accolades, a clear reflection of our strong performance, operational excellence, customer and community commitment and the dedication of our teams.

• WesBanco Bank, Inc., was awarded its eighth consecutive composite 'Outstanding' rating by the Federal Deposit Insurance Corporation ("FDIC") for its Community Reinvestment Act ("CRA") performance for the period July 22, 2019 through November 14, 2022, the highest rating awarded by federal regulators. The FDIC's CRA examination of WesBanco Bank, dated November 14, 2022, measured the bank's performance in meeting the credit needs of the communities in which it operates, including low- and moderate-income neighborhoods.
• We expanded our commercial loan production office strategy into the fast-growing Chattanooga, Tennessee metropolitan market, representing WesBanco's second in Tennessee. This latest LPO is another step in the execution of the company's long-term, sustainable growth strategy, which includes opening LPOs in attractive major markets adjacent to its existing footprint.
• We introduced new products and services to better serve our customers, including the new WesBanco One account, with comprehensive features and tools designed to help customers through their financial journey, with more than 90,000 new and migrated accounts to date.
• We continued our commitment to building a diverse and inclusive workforce by launching our first combined WesBanco Equity Conference focused on Women's Leadership, Multicultural Diversity, and WesBanco Pride, hosting three in-person symposiums. In 2024, we plan to launch three Employee Resource Groups - Women of WesBanco, WesBanco Pride, and WesBanco Multicultural Group - to further foster a diverse and inclusive workplace aligned with the company's goals.
• Bauer Financial, Inc., a financial analysis and reporting company, again awarded WesBanco their highest rating as a "five-star" bank for the 38th consecutive quarter.
• America Saves awarded WesBanco Bank the 2023 Designation of Savings Excellence award for the seventh consecutive year. We were one of only eight banks nationwide honored with this distinction. This award recognizes our extraordinary efforts to promote positive savings behaviors in the communities we serve during the America Saves Week campaign.

• Forbes named WesBanco Bank one of the World's Best Banks for the fifth consecutive year, based on customer satisfaction and consumer feedback. We were one of only 75 banks in the United States to earn the recognition.
• Forbes also named WesBanco Bank one of the 2023 Best Banks in America, marking WesBanco's thirteenth year on the list since its inception in 2010.
• Forbes named WesBanco one of America's Best Mid-Size Employers for the third consecutive year based on a survey of employees' willingness to recommend their employer to friends and family.
• The Banker magazine named WesBanco Bank to its 2023 lists of Top 100 U.S. Banks and Top 1,000 World Banks.
• Newsweek named WesBanco Bank one of America's Best Regional Banks for 2024 based on soundness, profitability and customer reviews.

Focused on Future Success

We are excited about the next chapter of our evolution and continuing to drive value for our shareholders. We have distinct growth strategies with unique long-term advantages, balanced distribution across economically diverse, major markets, and a strong customer service culture combined with robust digital services that meet customer needs efficiently and effectively. Further, we continue to make strategic growth- oriented investments in support of long-term, sustainable revenue growth and shareholder return. Our commercial banker and loan production office initiatives are paying strong dividends. They helped drive the 20% total loan growth we reported over the last two years and are contributing meaningfully to our current commercial loan pipeline. We have renewed our focus on increasing the percentage of our revenue streams from non-interest income sources, and our commercial and consumer banking teams are working diligently to deepen customer relationships, with a focus on deposits and additional services. We are achieving solid organic growth across our wealth management businesses and have achieved substantial adoption of commercial loan swaps by our business customers, as the fees earned during 2023 more than doubled the prior year. In addition, we continue to make additional enhancements to our revenue diversification strategy. The transformation of our treasury management business into a sales-oriented organization primed to build more comprehensive, and profitable, customer relationships is progressing well, and we will be completing the roll out of new products during the first half of the year. As we begin 2024, we remain well-capitalized with solid liquidity and capacity to fund loan growth and focused on strengthening our diversified earnings streams for long-term success with new capabilities and strategies. We are well-positioned to continue our evolution as a regional financial services institution and to generate ongoing value for our shareholders.

Leadership Transitions

As planned, Jeffrey H. Jackson succeeded Todd. F. Clossin as President and CEO on August 1, 2023, and was also elected to the Board of Directors. Mr. Jackson joined WesBanco in August 2022 as Senior Executive Vice President and Chief Operating Officer. We want to give special thanks to Mr. Clossin for his ten years of dedicated service to WesBanco. Under his leadership, WesBanco evolved into an emerging regional financial services institution that nearly tripled in total assets, loans, and deposits. Mr. Clossin will continue to serve on our Board of Directors as Vice Chairman, as well as on the Executive Committee.

Additionally, we wish to acknowledge Gary L. Libs and Reed J. Tanner, who will retire from the WesBanco Board as their terms expire at the 2024 Annual Stockholders Meeting. Mr. Libs has served as a member of the Corporation's Board of Directors since September 9, 2016, through our merger with Your Community Bankshares, Inc., and, Mr. Tanner has served as a member since December 30, 1996. Mr. Libs has served as a Vice Chairman of the Board of Directors, and as a member of the Executive Committee. Mr. Tanner currently serves as Chairman, and member, of the Audit Committee, and as a member of the Executive Committee, Compensation Committee, Disclosure Committee, and Enterprise Risk Management Committee. We thank them for their many years of counsel and dedicated service to WesBanco.

We invite you to participate in our Annual Meeting of the Shareholders, to be held on Wednesday, April 17, 2024 at 12:00 noon at Oglebay Resort and Conference Center, Wheeling, West Virginia.

Christopher V. Criss	Jeffrey H. Jackson
Chairman of the Board	President and Chief Executive Officer
WesBanco, Inc.
February 26, 2024

1. WesBanco believes that these non-GAAP financial measures are useful to investors as they enhance investors' understanding of the Company's business and performance. Please review the financial statements and non-GAAP financial measures included in this Annual Report and filed with the Securities and Exchange Commission on Form 10-K for complete details of WesBanco's financial performance during 2023.

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-K

(Mark One)

• ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2023

• TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from		to
Commission File Number 001-39442

WESBANCO, INC.

(Exact name of Registrant as specified in its charter)

WEST VIRGINIA	55-0571723
(State or other jurisdiction of	(IRS Employer
incorporation or organization)	Identification No.)
1 Bank Plaza, Wheeling, WV	26003
(Address of principal executive offices)	(Zip Code)

Registrant's telephone number, including area code: 304-234-9000

Securities registered pursuant to Section 12(b) of the Act:

Title of each class		Trading Symbol		Name of each Exchange on which registered
Common Stock $2.0833 Par Value		WSBC		Nasdaq Global Select Market
Depositary Shares (each representing 1/40th interest in a		WSBCP		Nasdaq Global Select Market
share of 6.75% Fixed-Rate Reset Non-Cumulative
Perpetual Preferred Stock, Series A)
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.	Yes	☑ No ☐
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15 (d) of the Act. Yes	☐	No ☑

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90

days. Yes ☑ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (section 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☑ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act:

Large accelerated filer	☑	Accelerated filer	☐	Emerging growth company	☐
Non-accelerated filer	☐	Smaller reporting company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant has filed a report on and attestation to its management's assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report.

☑

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant's executive officers during the relevant recovery period pursuant to §240.10D-1(b).☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act.) Yes ☐ No ☑

The aggregate market value of the registrant's outstanding voting and non-voting common stock held by non-affiliates on June 30, 2023, determined using a per share closing price on that date of $25.77, was $1,452,264,276.

As of February 14, 2024, there were 59,377,435 shares of Wesbanco, Inc. common stock $2.0833 par value per share, outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

Certain specifically designated portions of Wesbanco, Inc.'s definitive proxy statement which will be filed by April 30, 2024 for its Annual Meeting of Shareholders (the "Proxy Statement") to be held in 2024 are incorporated by reference into Part III of this Form 10-K.

WESBANCO, INC.

ANNUAL REPORT ON FORM 10-K

TABLE OF CONTENTS

ITEM #	ITEM	Page No.
	Part I
1	Business	3-12
1A	Risk Factors	13-22
1B	Unresolved Staff Comments	22
1C	Cybersecurity	22
2	Properties	23
3	Legal Proceedings	24
4	Mine Safety Disclosures	24
	Part II
5	Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	25-26
6	Reserved	26
7	Management's Discussion and Analysis of Financial Condition and Results of Operations	27-63
7A	Quantitative and Qualitative Disclosures about Market Risk	64-65
8	Financial Statements and Supplementary Data	66-134
9	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	135
9A	Controls and Procedures	135
9B	Other Information	135
9C	Disclosure Regarding Foreign Jurisdictions that Prevent Inspections	135
	Part III
10	Directors, Executive Officers and Corporate Governance	136
11	Executive Compensation	136
12	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	136
13	Certain Relationships and Related Transactions, and Director Independence	136
14	Principal Accountant Fees and Services	136
	Part IV
15	Exhibits and Financial Statement Schedules	137
16	Form 10-K Summary	137
	Signatures	142

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PART I

ITEM 1. BUSINESS

GENERAL

Wesbanco, Inc. ("Wesbanco" or the "Company"), a bank holding company incorporated in 1968 and headquartered in Wheeling, West Virginia, offers a full range of financial services including retail banking, corporate banking, personal and corporate trust services, brokerage services, mortgage banking and insurance. Wesbanco offers these services through two reportable segments, community banking and trust and investment services. For additional information regarding Wesbanco's business segments, please refer to Note 23, "Business Segments" in the Consolidated Financial Statements.

As of December 31, 2023, Wesbanco operated one commercial bank: Wesbanco Bank, Inc. ("Wesbanco Bank" or the "Bank"). The Bank has 192 branches and 183 ATM machines located in West Virginia, Ohio, western Pennsylvania, Kentucky, southern Indiana and Maryland. Total assets of Wesbanco as of December 31, 2023 approximated $17.7 billion. Wesbanco Bank also offers trust and investment services and various alternative investment products including mutual funds and annuities. The market value of assets under management of the trust and investment services segment is approximately $5.4 billion as of December 31, 2023. These assets are held by Wesbanco Bank in fiduciary or agency capacities for its customers and therefore are not included as assets on Wesbanco's Consolidated Balance Sheets.

Wesbanco also offers additional services through its non-banking subsidiaries:

Wesbanco Insurance Services, Inc. ("Wesbanco Insurance"), a wholly-owned subsidiary of Wesbanco Bank, is a multi-line insurance agency specializing in property, casualty, life and title insurance, with benefit plan sales and administration for personal and commercial clients.

Wesbanco Securities, Inc. ("Wesbanco Securities") is a full service broker-dealer, which also offers discount brokerage services.

Wesbanco Asset Management, Inc., a wholly-owned subsidiary of Wesbanco Bank, holds certain investment securities and loans in a Delaware-based subsidiary.

Wesbanco Properties, Inc. holds certain commercial real estate properties. The commercial property is leased to Wesbanco Bank and to certain non-related third parties.

FAH, LLC and Flagship Acquisitions Trust, which were acquired in the Old Line Bancshares, Inc. ("OLBK") acquisition and are Maryland limited liability corporations, hold certain real estate properties located in the Maryland area. Each of these entities is a wholly owned subsidiary of Wesbanco Bank.

Wesbanco has eleven capital trusts, which are all wholly-owned trust subsidiaries formed for the purpose of issuing trust preferred securities ("Trust Preferred Securities") and lending the proceeds to Wesbanco. For more information regarding Wesbanco's issuance of Trust Preferred Securities, please refer to Note 10, "Subordinated Debt and Junior Subordinated Debt" in the Consolidated Financial Statements.

AMSCO, Inc. ("AMSCO") is a wholly-owned subsidiary of Wesbanco Bank, which formerly engaged in the management of certain real estate development and construction of 1-4 family residential units. It is in the process of winding up its business activities and will be dissolved.

Wesbanco Bank's Investment Department also serves as investment adviser to a family of mutual funds, namely the "WesMark Funds." The fund family is comprised of the WesMark Large Company Fund, the WesMark Balanced Fund, the WesMark Small Company Fund, the WesMark Government Bond Fund, the WesMark West Virginia Municipal Bond Fund, and the WesMark Tactical Opportunity Fund.

As of December 31, 2023, none of Wesbanco's subsidiaries were engaged in any operations in foreign countries, and only one had any transactions with customers in foreign countries. The Bank also provides letters of credit internationally for certain domestic customers and provides international wire services through a third-party correspondent bank.

WEBSITE ACCESS TO WESBANCO'S FILINGS WITH THE SECURITIES AND EXCHANGE COMMISSION

Wesbanco's electronic filings with the Securities and Exchange Commission (the "SEC"), including its Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and amendments to these reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, are made available at no cost on Wesbanco's website, www.wesbanco.com, through the "Investors" link as soon as reasonably practicable after Wesbanco files such material with, or furnishes it to, the SEC. Wesbanco's SEC filings are also available through the SEC's website at www.sec.gov. Wesbanco routinely posts important information on the Company's website in the "Investors" section. Wesbanco may also use its website as a means of disclosing material, non-public information and for complying with our disclosure obligations under Regulation FD. Accordingly, investors should monitor the Investors section of the website in addition to following Wesbanco's press releases, SEC filings, public conference calls,

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presentations and webcasts. The information contained on, or that may be accessed through, Wesbanco's website is not incorporated by reference into, and is not a part of, this Annual Report on Form 10-K.

Upon written request of any shareholder of record on December 31, 2023, Wesbanco will provide, without charge, a printed copy of this 2023 Annual Report on Form 10-K, including financial statements and schedules, as required to be filed with the SEC. To obtain a copy of this report, contact: John Iannone, Wesbanco, Inc., 1 Bank Plaza, Wheeling, West Virginia 26003 [phone].

HUMAN CAPITAL RESOURCES

At December 31, 2023, we employed 2,321 full-time equivalent employees. At that date, the average tenure of all of our full-time employees was approximately 10 years while the average tenure of our executive officers was over 16 years. None of our employees are represented by collective bargaining agreements. We believe our relations with our employees are very good. The safety and care of our employees and their families as well as their communities is paramount for us.

Of our total employees, 10% or 235 were minorities with 80 or 34% of those officers. Of our 1,105 total officers, 603 or 55% were women. Our turnover rate for 2023 was 19%. Our turnover rate for officers was 15% for 2023.

Our corporate culture has been established by senior management and overseen by our board of directors. Built upon our 'Better Banking Pledge' and our 'Service & Support Pledge', our culture, which is both customer and employee-centric, is focused on growing long-term relationships by pledging to serve all personal and business customer needs efficiently and effectively while treating our employees with dignity and respect. Wesbanco completed its first employee engagement survey which focused on employee satisfaction. We were pleased with the number of participants and their feedback. Wesbanco is in the process of rolling out its second survey in the first quarter of 2024 with a focus on Wesbanco culture.

Wesbanco has been a leader in its communities for over 150 years, and we want to continue to take a leadership role by noting our stance for equality. We are a group with diverse backgrounds and ethnicities, and share the same values of dignity and respect for our co-workers, customers, and fellow community members. We have been able to enhance our diversification through the retention of many of the employees we have acquired through our acquisition strategy who bring a strong skill set and a diverse background. Wesbanco ensures diversity in our workforce representation by reflecting the makeup of the communities it serves.

Wesbanco has held a Women's Symposium for over 6 years and in past years, added a Diversity and Inclusion Forum. In 2023, the first, combined and in-person, Wesbanco Diversity, Equity and Inclusion Symposium event was held. This event focused on women, multi-cultural, and LGBTQ+ leadership initiatives as well as allies and sponsors involved in the formation of Employee Resource Groups ("ERGs"). The two-day event included educational information and activities geared toward diversity in leadership and participating in future ERGs. Mentoring, allyship and sponsorship were important focuses in these learning sessions.

In addition, we have engaged in leadership training for senior and middle management supervisors. We annually assess talent through a specific Talent Development Program to identify, promote and build development plans among multiple levels of management. These efforts have resulted in Wesbanco being designated as one of the best workplaces in several markets, including Columbus and Western Pennsylvania.

Our hope is that this not only helps us evolve and grow as a company but that it also spreads to all of our other community efforts. In 2023, Wesbanco provided philanthropic donations totaling $0.9 million in support of worthwhile organizations serving communities across our footprint. Further, our employees provided technical assistance services and financial education to non-profit organizations and area schools that resulted in 11,500 volunteer hours in 2023.

COMPETITION

Competition in the form of price and service from other banks, including local, regional and national banks and financial companies such as savings and loan companies, internet banks, payday lenders, money services businesses, credit unions, finance companies, brokerage firms and other non-banking companies providing various regulated and non-regulated financial services and products, is intense in most of the markets served by Wesbanco and its subsidiaries. Wesbanco's trust and investment services segment receives competition from commercial banks, trust companies, mutual fund companies, investment advisory firms, law firms, brokerage firms, and other financial services companies. As a result of consolidation within the financial services industry, mergers between, and the expansion of, financial institutions both within and outside of Wesbanco's major markets have provided significant competitive pressure in those markets. Many of Wesbanco's competitors have greater resources and, as such, may have higher lending limits and may offer other products and services that are not provided by Wesbanco. Wesbanco generally competes on the basis of superior customer service and responsiveness to customer needs, available loan and deposit products, rates of interest charged on loans, rates of interest paid for deposits, and the availability and pricing of trust, brokerage and insurance services. As a result of Wesbanco's expansion into certain larger metropolitan markets, it has faced entrenched larger bank competitors with an already existing customer base that may far exceed Wesbanco's initial entry position into those markets. As a result, Wesbanco may be forced to compete more aggressively for loans, deposits, trust and insurance products to grow its market share, potentially reducing its current and future profit potential from such markets.

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SUPERVISION AND REGULATION

As a bank holding company and a financial holding company under federal law, Wesbanco is subject to supervision and examination by the Board of Governors of the Federal Reserve System ("Federal Reserve Board") under the Bank Holding Company Act of 1956, as amended (the "BHCA"), and is required to file with the Federal Reserve Board reports and other information regarding its business operations and the business operations of its subsidiaries. Since Wesbanco is both a bank holding company and a financial holding company, Wesbanco can offer customers virtually any type of service that is financial in nature or incidental thereto, including banking and activities closely related to banking, securities underwriting, insurance (both underwriting and agency) and merchant banking. Wesbanco is subject to additional supervision from the Federal Reserve Board and its primary banking regulators due to its exceeding the $10 billion asset threshold and seeks to ensure that sufficient resources are allocated to safety and soundness compliance with applicable laws, such as the Bank Secrecy Act, anti-money laundering regulations, and the Community Reinvestment Act ("CRA"), among others, and risk management and internal audit, among other functions, so that the enhanced requirements of the Federal Reserve Board and its primary banking regulators are met.

As indicated above, Wesbanco presently operates one bank subsidiary, Wesbanco Bank, which is a West Virginia-chartered banking corporation which is not a member bank of the Federal Reserve System. It is subject to examination and supervision by the Federal Deposit Insurance Corporation (the "FDIC"), the West Virginia Division of Financial Institutions ("WVDFI"), and the Consumer Financial Protection Bureau ("CFPB") because its assets exceed $10 billion. The deposits of Wesbanco Bank are insured by the Deposit Insurance Fund of the FDIC. Wesbanco's non-bank subsidiaries are subject to examination and supervision by the Federal Reserve Board and specifically, the Federal Reserve Bank of Cleveland, Ohio ("Federal Reserve") and examination by other federal and state agencies, including, in the case of certain securities activities, regulation by the SEC, the Financial Institution Regulatory Authority, Inc. ("FINRA"), the Municipal Securities Rulemaking Board and the Securities Investors Protection Corporation ("SIPC"). Wesbanco Bank maintains one designated financial subsidiary, Wesbanco Insurance, which, as indicated above, is a multi-line insurance agency specializing in property, casualty, life and title insurance, with benefit plan sales and administration for personal and commercial clients. As a result of exceeding the $10 billion asset threshold, Wesbanco Bank is subject to enhanced prudential supervision from both the FDIC and WVDFI as part of their large bank supervision program.

Wesbanco is also under the jurisdiction of the SEC and certain state securities commissions for matters relating to the offering and sale of its securities. Wesbanco is subject to the disclosure and regulatory requirements of the Securities Act of 1933, as amended, and the Securities Exchange Act of 1934, as amended, as administered by the SEC. Wesbanco is listed on the Nasdaq Global Select Market (the "Nasdaq") under the trading symbol "WSBC" and is subject to the rules of the Nasdaq for listed companies.

Under the Riegle-Neal Interstate Banking and Branching Efficiency Act of 1994, as amended (the "Riegle-Neal Act"), a bank holding company may acquire banks in states other than its home state, subject to certain limitations. The Riegle-Neal Act also authorizes banks to merge across state lines, thereby creating interstate banking. Under the Dodd-Frank Wall Street Reform and Consumer Protection Act (the "Dodd-Frank Act"), banks are also permitted to establish de novo branches across state lines to the same extent that a state-chartered bank in each host state would be permitted to open branches.

Under the BHCA, prior Federal Reserve Board approval is required for Wesbanco to acquire more than 5% of the voting stock of any bank. In determining whether to approve a proposed bank acquisition, federal banking regulators will consider, among other factors, the effect of the acquisition on competition, the public benefits expected to be received from the acquisition, the projected capital ratios and levels on a post-acquisition basis, and the acquiring institution's record of addressing the credit needs of the communities it serves, including the needs of low- and moderate-income neighborhoods, consistent with safe and sound operation of the bank under the CRA.

HOLDING COMPANY REGULATIONS

As indicated in "Item 1. Business-General", Wesbanco has one state-chartered bank subsidiary, Wesbanco Bank, as well as four non-bank subsidiaries (excluding capital trusts). The subsidiary bank is subject to affiliate transaction restrictions under federal law, which limit "covered transactions" by the subsidiary bank with the parent and any non-bank subsidiaries of the parent, which are referred to in the aggregate in this paragraph as "affiliates" of the subsidiary bank. "Covered transactions" include loans or extensions of credit to an affiliate (including repurchase agreements), purchases of or investments in securities issued by an affiliate, purchases of assets from an affiliate, the acceptance of securities issued by an affiliate as collateral for a loan or extension of credit, the issuance of a guarantee, acceptance or letter of credit on behalf of an affiliate, certain transactions that involve borrowing or lending securities, and certain derivative transactions with an affiliate. Such covered transactions between the subsidiary bank and any single affiliate are limited in amount to 10% of the subsidiary bank's capital and surplus, and, with respect to covered transactions with all affiliates in the aggregate, are limited in amount to 20% of the subsidiary bank's capital and surplus. Furthermore, such loans or extensions of credit, guarantees, acceptances and letters of credit, and any credit exposure resulting from securities borrowing or lending transactions or derivatives transactions, are required to be secured by collateral at all times in amounts specified by law. In addition, all covered transactions must be conducted on terms and conditions that are consistent with safe and sound banking practices.

The Dodd-Frank Act requires a bank holding company to act as a source of financial strength to its subsidiary bank. Under this source of strength requirement, the Federal Reserve Board may require a bank holding company to make capital infusions into a troubled subsidiary bank, and may charge the bank holding company with engaging in unsafe and unsound practices for failure to commit resources to such a subsidiary bank. A capital infusion conceivably could be required at a time when Wesbanco may not have the resources to provide it.

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PAYMENT OF DIVIDENDS

Dividends from the subsidiary bank are a significant source of funds for payment of dividends to Wesbanco's shareholders. For the year ended December 31, 2023, Wesbanco declared cash dividends to its preferred and common shareholders of approximately $10.1 million and $82.9 million, respectively.

As of December 31, 2023, Wesbanco Bank was "well capitalized" under the definition in Section 324.403 of the FDIC Regulations. Therefore, as long as the Bank remains "well capitalized" or even becomes "adequately capitalized," there would be no basis under Section 324.403 to limit the ability of the Bank to pay dividends because it had not become undercapitalized, significantly undercapitalized or critically undercapitalized. Effective January 1, 2016, Wesbanco Bank and Wesbanco became subject to "capital conservation buffer" rules, phased in over a four year period which ended in 2019, which requires Wesbanco and Wesbanco Bank to have capital levels above the regulatory minimums to pay dividends (discussed below in connection with the Basel III initiative under "Item 1. Business-Capital Requirements").

All financial institutions are subject to the prompt corrective action provisions set forth in Section 38 of the Federal Deposit Insurance Act (the "FDI Act") and the provisions set forth in Section 308.201 of the FDIC Regulations. Immediately upon a state non- member bank receiving notice, or being deemed to have notice, that the bank is undercapitalized, significantly undercapitalized, or critically undercapitalized, as defined in Section 324.403 of the FDIC Regulations, the bank is precluded from being able to pay dividends to its shareholders based upon the requirements in Section 38(d) of the FDI Act, 12 U.S.C. § 1831o(d).

In addition, with respect to possible dividends by the Bank, under Section 31A-4-25 of the West Virginia Code, the prior approval of the West Virginia Commissioner of Financial Institutions would be required if the total of all dividends declared by the Bank in any calendar year would exceed the total of the Bank's net profits for that year combined with its retained net profits of the preceding two years. Further, Section 31A-4-25 limits the ability of a West Virginia banking institution to pay dividends until the surplus fund of the banking institution equals the common stock of the banking institution and if certain specified amounts of recent profits of the banking institution have not been carried to the surplus fund.

If, in the opinion of the applicable regulatory authority, a bank under its jurisdiction is engaged in or is about to engage in an unsafe or unsound practice which, depending on the financial condition of the bank, could include the payment of dividends, such authority may require, after notice and hearing, that such bank cease and desist from such practice. The Federal Reserve Board has issued policy statements, which provide that insured banks and bank holding companies should generally only pay dividends out of current operating earnings. Under applicable law, bank regulatory agency approval is required if the total of all dividends declared by a bank in any calendar year exceeds the available retained earnings or exceeds the aggregate of the bank's net profits (as defined by regulatory agencies) for that year and its retained net profits for the preceding two years. As of December 31, 2023, under West Virginia and FDIC regulations, Wesbanco could receive, without prior regulatory approval, a dividend of up to $135.5 million from Wesbanco Bank. Additional information regarding dividend restrictions is set forth in Note 21, "Regulatory Matters," in the Consolidated Financial Statements.

On February 24, 2009, the Federal Reserve Division of Banking Supervision and Regulation issued Supervisory Letter SR 09-4, "Applying Supervisory Guidance and Regulations on the Payment of Dividends, Stock Redemptions, and Stock Repurchases at Bank Holding Companies," providing direction to bank holding companies on the payment of dividends, capital repurchases and capital redemptions. Although the letter largely reiterates longstanding Federal Reserve supervisory policies, it emphasizes the need for a bank holding company to review various factors when considering the declaration of a dividend or taking action that would reduce regulatory capital provided by outstanding financial instruments. These factors include the potential need to increase loan loss reserves, write down assets and reflect declines in asset values in equity. In addition, the bank holding company should consider its past and anticipated future earnings, the dividend payout ratio in relation to earnings, and adequacy of regulatory capital before any action is taken. The consideration of capital adequacy should include a review of all known factors that may affect capital in the future. On July 24, 2020, Attachment C was added to SR 09-4 to provide greater clarity regarding the situations in which holding companies may expect an expedited consultation under the process described in SR 09-4. Generally, a holding company considering paying a dividend in excess of earnings for the period (1) must have net income available over the past year sufficient to fully fund dividends, (2) is not considering stock repurchases or redemptions in the current quarter, (3) does not have any concentrations in commercial real estate lending that exceed supervisory thresholds, and (4) is in good supervisory condition, to receive this expedited consultation.

In certain circumstances, defined by regulation relating to levels of earnings and capital, advance notification to, and in some circumstances, approval by the regulator could be required to declare a dividend or repurchase or redeem capital instruments.

FDIC INSURANCE

FDIC insurance premiums are assessed by the FDIC using a risk-based approach that places insured institutions into categories based on capital and risk profiles. Beginning in 2019, Wesbanco Bank is considered to be a large bank for the purposes of the premium calculation because its total assets exceed $10 billion, and it is therefore subject to more continuous oversight by the FDIC. Large banks are subject to a more complex insurance premium calculation with additional loan-related and other risk factors involved which leads to an overall higher rate as compared to that of smaller banks. In 2023, Wesbanco Bank paid deposit insurance premiums of $11.2 million, compared to $7.2 million and $4.5 million in 2022 and 2021, respectively. The increase in 2023's premiums was due primarily to an increase in initial base deposit insurance assessment rate schedules uniformly by two basis points, beginning in the first quarterly

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