WesBanco Q2 Earnings Call Highlights

Key Points

• WesBanco said second-quarter results were driven by strong momentum in commercial lending, expansion markets and fee-based businesses, with adjusted EPS up 14% year-to-date and management still expecting mid-single-digit loan growth for 2026.
• Total loans rose 3.5% year over year, helped by C&I growth and a record $2.3 billion commercial pipeline, while Florida expansion is already contributing about 10% of the pipeline and could become a major growth engine.
• Deposits grew 2.1% year over year and fee income hit records, while the net interest margin improved to 3.63%; management also said credit quality remains benign and capital is being prioritized for organic growth over M&A or aggressive buybacks.

WesBanco NASDAQ: WSBC executives said momentum in commercial lending, expansion markets and fee-based businesses drove stronger second-quarter 2026 results, while the bank maintained its outlook for mid-single-digit loan growth for the full year.

On the company’s earnings call, President and CEO Jeff Jackson said the quarter’s “defining theme” was momentum across the franchise, citing sequential and year-over-year loan growth, record commercial production and pipeline levels, and positive operating leverage.

For the quarter ended June 30, 2026, WesBanco reported GAAP net income available to common shareholders of $88 million, or $0.91 per share. Excluding merger and restructuring charges, net income was $89 million, or $0.92 per diluted share. Year-to-date earnings per share, on the same adjusted basis, rose 14% to $1.83, Jackson said.

Year-to-date pre-tax, pre-provision earnings increased 24% from a year earlier to $242 million, excluding merger and restructuring charges. Jackson said second-quarter and year-to-date returns on average assets and tangible common equity were 1.3% and 17.3%, respectively. The bank also reported an efficiency ratio of 51%.

Loan Growth Outpaces CRE Payoffs

Total loans increased 3.5% year-over-year and 8.3% annualized from the prior quarter, helped by commercial and industrial lending. Jackson said C&I loans grew 5% year-over-year and nearly 25% quarter-over-quarter annualized.

Commercial teams generated nearly $2.5 billion of loan production during the first six months of 2026, about $1 billion more than the same period last year. Jackson said second-quarter loan growth came despite continued commercial real estate payoffs, which created a 1% headwind to year-over-year growth.

CRE payoffs totaled about $345 million in the second quarter, bringing total payoffs over the past 12 months to more than $1.3 billion. Chief Financial Officer Dan Weiss said WesBanco expects payoffs to taper in the second half of the year, with third-quarter payoffs projected at roughly two-thirds of the second-quarter level.

Jackson said the bank’s commercial pipeline reached a record $2.3 billion at June 30, up more than 40% from the prior quarter and 90% since year-end. He said the pipeline remained stable in the weeks after quarter-end, supporting management’s expectation for mid-single-digit loan growth in 2026.

Florida Expansion Contributes to Pipeline

Management highlighted WesBanco’s expansion in Florida as a key growth initiative. Jackson said the bank recently opened a loan production office in Naples, following the launch of commercial banking and treasury management operations in Palm Beach and Broward counties.

Jackson said the Florida teams have begun generating business within their first three months and now account for about 10% of WesBanco’s total commercial pipeline. He said the Florida franchise could become “a $2 billion bank within the next couple of years.”

WesBanco is also on track to open financial centers in Fort Lauderdale and West Palm Beach during the first half of 2027, after identifying locations and receiving FDIC approval, Jackson said. Those centers are expected to support deposit gathering and customer relationships, with potential future additions such as wealth management and residential mortgage services.

During the question-and-answer portion of the call, Jackson said the Florida operation had reached roughly $200 million in loans outstanding. He added that management believes the current South Florida footprint is largely built out, though the bank may consider expansion into other Florida markets such as Tampa, Orlando, Sarasota or Jacksonville in 2027.

Deposits, Margin and Fee Income

Weiss said total assets were $27.8 billion at quarter-end, including $19.5 billion of portfolio loans and $4.4 billion of securities. Deposits increased 2.1% year-over-year to $21.6 billion, as transaction account growth more than offset lower higher-cost certificates of deposit.

Deposit attrition from the closure of 37 financial centers this year has been meaningfully below the bank’s conservative assumptions, Weiss said. Deposits were down $75 million sequentially, reflecting the runoff of the remaining $50 million of brokered deposits on April 1 and declines in higher-cost CDs.

Jackson said the bank historically has generated stronger deposit growth in the second half of the year and is rolling out retail and commercial programs aimed at attracting deposits. Weiss said WesBanco has grown deposits by $600 million to $700 million in the back half of the year over the past three years and is anticipating something similar.

The second-quarter net interest margin was 3.63%, up four basis points from a year earlier and six basis points sequentially. Weiss attributed the sequential improvement to asset repricing and three basis points, or $1.7 million, of accretion from unscheduled early payoffs of acquired loans.

Management expects the margin to remain around the 3.60% range for the rest of 2026. Weiss said asset repricing should help, but loan growth may initially outpace deposit growth, requiring a mix of higher-cost wholesale funding and lower-cost deposits.

Non-interest income rose $9.7 million, or 22%, year-over-year to $54 million. Weiss cited higher net swap and valuation income, service charges on deposits and other income. He said WesBanco recorded record fee income from deposit products, digital banking services and securities brokerage, along with record trust and securities brokerage assets of nearly $11 billion.

Expenses, Capital and Credit

Non-interest expense, excluding restructuring and merger-related costs, was $148 million in the second quarter, up 1.8% from a year earlier and 3.6% sequentially. Weiss said the increase was mainly due to higher salaries and wages tied to recent hiring, primarily in the southern footprint.

WesBanco expects quarterly expenses in the third and fourth quarters to be about $153 million, reflecting a full quarter of South Florida staffing, mid-year merit increases and higher marketing expense. Jackson also said the bank is working on a third phase of branch optimization, which could include additional two-for-one or three-for-one consolidations, with details potentially coming in the fourth quarter.

The bank’s common equity Tier 1 ratio was 10.7% at June 30, within its target range of 10.5% to 11%. WesBanco repurchased about 300,000 shares during the second quarter. Weiss said buybacks are likely to be muted over the next couple of quarters as the company deploys capital into loan growth, though management may act opportunistically depending on loan growth, capital levels and stock price.

Credit quality metrics remained “relatively benign,” Weiss said, with charge-offs of two basis points. The allowance for credit losses was $218 million, or 1.12% of total loans, with the increase from the prior quarter mainly due to higher loan balances.

Jackson said an uptick in classified and criticized loans reflected timing and credit regrading, and he said the measure had already declined after quarter-end. He also said the bank had solutions in place for three nonperforming loans added in the prior quarter and expected them to be resolved in the third quarter or early fourth quarter.

Looking ahead, management said WesBanco is focused on organic growth rather than acquisitions. Jackson said M&A is “at the very bottom” of the bank’s capital deployment priorities, with management instead emphasizing expansion-market loan growth, fee growth and deposit generation.

About WesBanco (NASDAQ:WSBC)

WesBanco, Inc is a bank holding company headquartered in Wheeling, West Virginia, offering a full range of community banking services through its principal subsidiary, WesBanco Bank, Inc The company serves individual consumers, small‐ to mid‐sized businesses, nonprofit organizations and governmental entities with a relationship‐driven approach and an emphasis on local decision‐making. Through its diversified platform, WesBanco provides core banking functions such as deposit accounts, commercial and consumer lending, mortgage banking, treasury management and electronic banking services.

In addition to traditional banking products, WesBanco offers specialized services including trust and wealth management, investment advisory and insurance solutions.

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