WesBanco NASDAQ: WSBC reported third-quarter results that reflected continued loan growth, stable credit metrics and expanding activity in targeted markets, while management said elevated commercial real estate payoffs remained a constraint on reported growth.
For the quarter ended Sept. 30, 2026, the bank reported GAAP net income available to common shareholders of $85 million, or $0.88 per share. Excluding merger-related and restructuring expenses, net income was $86 million, or $0.89 per share. Adjusted earnings per share for the first nine months increased nearly 7% to $2.72, according to President and Chief Executive Officer Jeff Jackson.
Jackson said the company’s return on average tangible common equity remained near 17%, return on average assets improved to 1.3%, and its efficiency ratio declined to 52%. WesBanco ended the quarter with a common equity Tier 1 ratio of 10.6%, within its 10.5% to 11% target range.
Loan production offsets CRE payoff pressure
Total portfolio loans reached $19.9 billion at quarter-end and increased 5.1% from a year earlier, while annualized sequential growth was 8.7%. Commercial and industrial lending rose 11% year over year and 16% on an annualized sequential basis.
The company’s commercial teams generated nearly $4 billion in loan production through the first nine months of 2026, up 70% from the prior-year period. However, commercial real estate payoffs totaled about $370 million during the third quarter, creating nearly a 1% headwind to loan growth, Jackson said. Over the past 12 months, CRE payoffs have represented a roughly $1 billion headwind.
Despite those payoffs, WesBanco generated about $1 billion in net organic loan growth over the past year. Its commercial pipeline stood at $1.8 billion as of Sept. 30, with approximately half coming from loan production offices and former Premier markets. Management said the pipeline had remained stable in the weeks following quarter-end and supports its expectation for mid-single-digit loan growth in 2026.
Jackson said the primary risk to continued production would be higher-than-expected CRE or other loan payoffs. He added that loan production for the full year could approach $5 billion, compared with roughly $2 billion in 2024.
Expansion markets gain traction
Management highlighted Florida and Tennessee as key contributors to future growth. Since launching in the second quarter, WesBanco’s Florida team has developed $300 million in new loan relationships and has a similarly sized pipeline. While most closed loans have been CRE and owner-occupied credits, nearly one-third have been C&I loans in industries including health care, wholesale and transportation.
The company plans to open financial centers in Fort Lauderdale, West Palm Beach and Naples during the first half of 2027. Jackson said Florida could finish 2026 with approximately $500 million in loans and could exceed $1 billion as a franchise by the end of 2027, with a longer-term target of reaching $2 billion in combined loans and deposits during 2028.
In Tennessee, where WesBanco entered in 2023, the company has built a loan portfolio exceeding $750 million, or nearly 4% of total loans. A recently added team of about 20 bankers and staff closed $100 million in new loan relationships in less than three months, with nearly half in C&I lending. Jackson said the Nashville market could reach $1 billion by 2028, while Tennessee overall could become a $1.5 billion to $2 billion market by that time.
Deposits flat, but management expects fourth-quarter growth
Deposits totaled $21.6 billion, up 1.5% year over year and roughly flat sequentially. Chief Financial Officer Dan Weiss said higher-cost certificates of deposit migrated to money market and transaction accounts. WesBanco expects loan growth to outpace deposit growth in the near term as it leads with lending in newer markets.
Jackson said the bank opened roughly 8,400 new customer accounts in the third quarter, but deposit balances were affected by runoff associated with the closure of 37 branches. He said deposits were already up by “a couple of $100 million” in the fourth quarter and that management expects a strong finish to the year.
The company’s average loan-to-deposit ratio was 91%, and Jackson said WesBanco would be comfortable operating in the mid-90% range. Management also plans to increase incentives for deposit gathering, with particular focus on both noninterest-bearing and interest-bearing operating accounts.
Margin outlook and credit trends
Third-quarter net interest income rose 4.7% year over year to $227 million, supported by loan growth, loan repricing and higher securities yields. Net interest margin was 3.60%, up 7 basis points from a year earlier. Weiss said the fourth-quarter margin could be 1 to 2 basis points below the third-quarter level because recent loan growth was funded with a greater mix of higher-cost wholesale borrowings.
Still, management said the 3.60% margin level should be defendable into 2027, aided by repricing of securities and commercial loans. WesBanco expects two Federal Reserve rate increases, one in December 2026 and another in March 2027. Weiss said the company is modeling a deposit beta of about 50% in the rising-rate environment.
Credit quality improved during the quarter, with criticized and classified loans declining $93 million, or 55 basis points, from the second quarter to 3.19% of total loans. The allowance for credit losses declined to 1.08% of portfolio loans, or $215 million. Jackson said a third-quarter charge-off related to a fully reserved indirect auto dealership credit and that he expects charge-offs to return to more normal levels in the fourth quarter.
For the fourth quarter, WesBanco expects fee income growth of 3% to 5% year over year and operating expenses of about $153 million after accounting for one-time employee-benefit credits recognized in the third quarter. Management also anticipates a full-year effective tax rate of approximately 21%.
About WesBanco (NASDAQ:WSBC)
WesBanco, Inc NASDAQ: WSBC is a regional financial services holding company headquartered in Wheeling, West Virginia. Through its principal subsidiary, WesBanco Bank, the company provides banking and financial services to individuals, families, businesses and institutions.
Its offerings include consumer and commercial deposit accounts, residential and commercial real estate lending, business loans, personal and corporate credit services, mortgage banking and other traditional banking products.
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