WesBanco
Annual Report 2022

Plain-text annual report

WesBanco, Inc. 2022 Annual Report Annual Report WesBanco, Inc. FINANCIAL HIGHLIGHTS (in thousands, except shares and per share amounts) December 31, 2022 2021 % Change FOR THE YEAR $ Earnings per common share—diluted $ Earnings per common share—diluted, excluding certain items (1)(2) $ Dividends declared per common share $ Net income available to common shareholders Net income available to common shareholders, excluding certain items (1)(2) $ Average common shares outstanding—diluted Period end common shares outstanding Period end preferred shares outstanding 3.02 $ 3.04 $ 1.37 $ 181,988 $ 183,349 $ 3.53 3.62 1.32 232,135 237,441 60,215,374 65,669,970 59,198,963 62,307,245 150,000 150,000 AT YEAR END Securities Net portfolio loans Total assets Deposits Total FHLB and other borrowings Subordinated and junior subordinated debt Shareholders’ equity $ 3,789,055 $ 4,031,483 10,584,938 9,611,856 16,931,905 16,927,125 13,131,090 13,565,863 325,813 132,860 2,693,166 840,069 281,404 2,426,662 (14.4) (16.0) 3.8 (21.6) (22.8) (8.3) (5.0) — (6.0) 10.1 0.0 (3.2) 157.8 111.8 (9.9) TRUST ASSETS AT MARKET VALUE (3) $ 4,878,479 $ 5,644,975 (13.6) KEY RATIOS Return on average assets Return on average assets, excluding certain items (1)(2) Return on average tangible assets (1) Return on average tangible assets, excluding certain items (1)(2) Return on average equity Return on average equity, excluding certain items (1)(2) Return on average tangible equity (1) Return on average tangible equity, excluding certain items (1)(2) Return on average tangible common equity (1) Return on average tangible common equity, excluding certain items (1)(2) Average loans to average deposits Allowance for credit losses to total loans Allowance for credit losses to total non-performing loans Non-performing assets to total assets Net loan charge-offs to average loans Dividend payout ratio Dividend payout ratio, excluding certain items (1)(2) Non-interest income as a percentage of total revenues Efficiency ratio (1)(4) Net interest margin (4) CAPITAL RATIOS AT YEAR END Shareholders’ equity to total assets Tangible equity to tangible assets (1) Tangible common equity to tangible assets (1) Tier 1 leverage ratio Tier 1 capital to risk-weighted assets Total capital to risk-weighted assets Common equity tier 1 capital ratio PER COMMON SHARE Closing common stock price Book value at year end Tangible book value at year-end (1) 1.08% 1.09 1.21 1.22 7.23 7.29 13.78 13.88 15.39 15.50 74.21 1.10 284.41 0.25 0.02 45.36 45.07 19.84 59.53 3.20 14.33% 8.19 7.28 9.90 12.33 15.11 11.20 1.37% (21.2) (22.1) 1.40 (20.9) 1.53 (21.8) 1.56 (13.9) 8.40 (15.1) 8.59 (7.5) 14.89 (8.8) 15.22 (5.9) 16.35 (7.2) 16.71 78.11 (5.0) (12.0) 1.25 (7.7) 308.00 8.7 0.23 — 0.02 21.3 37.39 23.6 36.46 (11.7) 22.48 2.3 58.22 2.9 3.11 15.91% (9.9) (16.8) (18.4) (1.2) (12.2) (5.0) (12.3) 9.84 8.92 10.02 14.05 15.91 12.77 $ 36.98 $ 38.55 19.43 34.99 40.91 22.61 5.7 (5.8) (14.1) (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-equivalent basis. TO OUR SHAREHOLDERS: WesBanco had another successful year during 2022 as we remained focused on ensuring a strong organization for our shareholders, and continued to appropriately return capital to them through both long-term, sustainable earnings growth and effective capital management. Through successful operational execution, we generated solid annual net income while remaining a well-capitalized financial institution with sound liquidity, balance sheet, and credit quality metrics, built upon our well-defined strategies and core advantages, which will ensure success even in a challenging economic environment. Most importantly, we reported solid loan growth without sacrificing our credit standards, exhibited discretionary cost control despite inflationary pressures, and continued to receive numerous national accolades. For the twelve months ended December 31, 2022, net income available to common shareholders was $182 million, or $3.02 per diluted share, as compared to $232 million, or $3.53 per diluted share, for the prior year period, which included the benefit of a release of provision for credit losses of $52 million, net of tax, or $0.79 per diluted share, as compared to a benefit of $0.02 per share during 2022. Further, when excluding after-tax restructuring and merger-related expenses, net income for 2022 was $183 million, or $3.04 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 assets of 1.09% and return on average tangible common equity of 15.50%.[1] Our key credit quality metrics continued to remain at low levels and comparable to peer banks with total assets between $10 and $25 billion, as we adhered to our strong legacy of credit quality, risk management, and compliance – the foundation upon which our institution was built 153 years ago. While our capital position continues to provide financial and operational flexibility, we also maintained consolidated and bank-level regulatory capital ratios well above the applicable “well-capitalized” standards promulgated by bank regulators and the BASEL III capital standards. At December 31, 2022, our Tier I Leverage Capital was 9.90%, Tier I Risk-Based Capital 12.33%, Total Risk-Based Capital 15.11%, and the Common Equity Tier 1 Capital Ratio (“CET 1”) 11.20%, while our tangible common equity ratio was 7.28%. We maintained our critical, long-term focus on enhancing shareholder value through earnings growth and effective capital management, which includes dividends, share repurchases, and acquisitions. During 2022, we repurchased approximately 3.4 million shares of our outstanding common stock on the open market, representing approximately 5.5% of total shares outstanding at December 31, 2021. Furthermore, reflecting our strong capital position and net income, we declared two one-cent increases to our quarterly common stock cash dividend – on February 24 and November 16, 2022 – raising the dividend to $0.35 per common share. These increases represented a 6.1% increase in the quarterly dividend compared to the fourth quarter of 2021, an annualized cash dividend of $1.40, and a cumulative increase of 150% since 2010. WesBanco offers a current dividend yield of approximately 3.8% based upon the market price of WesBanco common stock on February 23, 2023. On August 15, 2022, Jeffrey H. Jackson joined the company as Senior Executive Vice President and Chief Operating Officer of WesBanco, Inc., as well as President and Chief Operating Officer of WesBanco Bank, Inc. Mr. Jackson comes to WesBanco after a successful career at First Horizon Bank. He most recently served as Executive Vice President and Chief Operating Officer of Regional Banking based out of Memphis, TN, Regional President for Florida, and Market President for Southeast Tennessee and Atlanta. Prior to his career in banking, he spent 15 years with IBM in a variety of positions. We wish to welcome Mr. Jackson and extend our gratitude to President and CEO Todd F. Clossin, for ten years of dedicated service to WesBanco. It is expected that Mr. Jackson will succeed Mr. Clossin as President and CEO of WesBanco, Inc. upon Mr. Clossin’s anticipated retirement, effective January 1, 2024. Under Mr. Clossin’s leadership, WesBanco has evolved into an emerging regional financial services institution that has nearly tripled in total assets, loans, and deposits through both organic growth and five major acquisitions. In addition, he oversaw the expansion into six states from three, implementation of a new core banking software system and top-tier digital services for our customers, successful navigation of our company and communities through the COVID-19 pandemic, development of our Women’s Symposium and Diversity, Equity, and Inclusion including loan production offices. Symposium, and execution of our growth strategies, Mr. Clossin’s tenure is highlighted by numerous national accolades recognizing WesBanco for financial performance, credit quality, employer of choice, community involvement, and customer satisfaction. He was elected to the WesBanco Board of Directors during 2014 and will remain a member of WesBanco’s board and Executive Committee upon his retirement. Jeffrey H. Jackson Senior Executive Vice President and Chief Operating Officer of WesBanco, Inc. Following are our accomplishments and milestones achieved during 2022 that resulted from our strong performance, operational strengths, and focus on our communities, customers and employees. These accolades which recognize WesBanco’s commitment to sustainability and excellence, are also a testament to the hard work and dedication of our employees. • For 153 years, we have maintained our strong community roots as a leader in and advocate for our communities and employees in order to help both of them succeed. We have focused on strong governance principles and being a sound institution while developing our diverse workforce and supporting our communities, as reflected in the issuance of our first sustainability report. Here are a few key facts that demonstrate our commitment: O Seven consecutive “Outstanding” composite ratings from the Federal Deposit Insurance Corporation for Community Reinvestment Act performance. O Continued our strong support of our communities during 2022 through more than $416 million of community development loans, over $1.2 million of community development philanthropic donations, and approximately 11,700 hours of community development service by our employees. O More than 1,700 jobs created by the New Markets Loan Program during the last five years. O More than 70% of employees, including approximately 54% of bank officers, and more than 30% of key senior executive leadership positions identify as female. O 29% of our Board of Directors identify as diverse, either by gender or ethnicity, and approximately 10% of our workforce identify as ethnically diverse. O 50% of our workforce, including 75% of support areas, are in either a 100% remote or hybrid work schedule. O More than 20% reduction in our financial center footprint, while continuing to effectively serve our customers and communities. • We expanded our loan production office strategy into new, high-growth metro markets that are adjacent to our existing footprint. We opened offices in Nashville, Indianapolis, and Cleveland, which complement our existing offices in Akron-Canton and Northern Virginia. These offices have been well-received by their communities and quickly made positive contributions to our organic growth. • WesBanco Bank continued to receive top rankings during 2022, which are a testament to our strong performance and foundation, as well as the efforts of our employees every day to maintain our community banking roots and customer-focused philosophy. O Bauer Financial, Inc., a financial analysis and reporting company, has again awarded WesBanco their highest rating as a “five-star” bank. O WesBanco Bank was recognized with the America Saves Designation of Savings Excellence for the seventh consecutive year, one of only six banks nationwide honored with this distinction. This award is in recognition of our extraordinary efforts during America Saves Week to encourage customers to save money. O Based on customer satisfaction and consumer feedback, WesBanco Bank was named by Forbes as the #1 bank in Ohio and the #2 bank in Kentucky, including high scores for ‘trust’, ‘branch services’, ‘terms and conditions’, ‘customer service’, ‘digital services’, and ‘financial advice’. O For the fourth year in a row, WesBanco Bank was named one of the World’s Best Banks by Forbes, which was also based on customer satisfaction and consumer feedback, with high scores for ‘satisfaction’, ‘customer services’, ‘digital services’, and ‘financial advice’. O WesBanco was the only midsize bank making the top ten for both financial performance and employer of choice. ▪ WesBanco Bank was named the #10 Best Bank in America by Forbes based on growth, credit quality, and profitability, the third year in a row in the top twelve and the twelfth time overall since 2010. ▪ We were named to the Forbes list of America’s Best Mid-Size Employers, earning a spot within the top 10% of all companies recognized, as well as securing the #2 spot out of the 30 companies in the Banking and Financial Services category. O WesBanco was recognized by Newsweek as one of “America’s Most Trustworthy Companies” and was one of only 20 banks to earn this nationwide honor, for the three touchpoints of trust – customer trust, investor trust, and employee trust. We reported solid financial performance during 2022 as demonstrated by loan growth, net interest margin expansion, and discretionary cost control. Total assets as of December 31, 2022 were $16.9 billion, highlighted by total portfolio loans of $10.7 billion, which increased 10.0% year-over-year, or 11.7% when excluding Small Business Administration Payroll Protection Loans of $160 million in the prior year period. This broad-based loan growth reflected the successful execution of our operational strategies and strength of our markets and lending teams. Further, robust deposit levels remained a key story as they totaled $13.1 billion, as of December 31, 2022, with total demand deposits representing approximately 60% of the total. Reflecting the rising interest rate environment, as well as solid loan growth, for the fourth quarter of 2022, we reported a net interest margin of 3.49%, up 52 basis points from the prior year period, and an efficiency ratio of 56.91%, which improved as compared to the 61.99% in the prior year period. A key investment in support of our evolution has been, and will continue to be, the investment in our employees, as they are critical to our long-term growth and success. During the last two years, we focused on improving retention and boosting morale, as well as increasing the depth and strength of our teams across our business lines and markets. We successfully executed upon these plans by hiring approximately 100 revenue-producers during the last two years, and, as demonstrated by our 2022 results, have begun to see the growth and positive operating leverage from these investments. While we will remain diligent on discretionary costs, we intend to continue to make the appropriate growth-oriented investments in support of long-term, sustainable revenue growth and shareholder return. During 2022, bank stocks, as measured by various indices, including the KBW Nasdaq Regional Bank Index, KBW Nasdaq Bank Index, and ABA Nasdaq Community Bank Index, posted year-over-year declines ranging from negative 9% to negative 24%, as compared to the 19% decline in the S&P 500. In contrast, reflecting our core strengths and organic growth, our stock price increased approximately 6% year-over-year, to end the year at $36.98. Furthermore, our total shareholder return has also outperformed these bank indices on, at least, the three-, five-, and ten year bases. Through the last few years, we have transformed our company into an evolving regional financial services institution with a community bank at its core. We have done this through the successful expansion into higher growth markets spanning six states, with the majority of our company now located in these markets, while adhering to our foundation of strong discretionary cost control, risk management, and credit standards. We will continue to enhance our evolution into a solid and sound growth story supported by distinct growth strategies and unique competitive advantages, including our robust legacy deposit base and century-old trust and wealth management business. We have the right markets, teams, leadership, and strategies to provide long-term success for our shareholders, customers, and employees. We remain well-positioned for continued success and are excited about our future growth opportunities. We would like to invite you to participate in our Annual Meeting of the Shareholders, which will be held virtually on Wednesday, April 19, 2023 at 12:00 noon. Like many other companies, we intend to utilize a virtual format again this year in order to protect the health and well-being of our employees, shareholders, and communities. Christopher V. Criss Chairman of the Board WesBanco, Inc. February 27, 2023 Todd F. Clossin President and Chief Executive Officer [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 2022. UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM 10-K (Mark One) (cid:3) ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiff scal year ended December 31, 2022 (cid:4) TRARR NSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period frff om to Commission File Number 001-39442 WESBANCO, INC. (Exact name of Registrant as specififf ed in its charter) WEST VIRGINIA (State or other jurisdiction of incorporation or organization) 1 Bank Plaza, Wheeling, WV (Address of principal executive offff iff ces) 55-0571723 (IRS Employer Identififf cation No.) 26003 (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 Common Stock $2.0833 Par Value Depositary Shares (each representing 1/40th interest in a share of 6.75% Fixed-Rate Reset Non-Cumulative Perpetual Prefeff rred Stock, Series A) Trading Symbol WSBC WSBCP Name of each Exchange on which registered Nasdaq Global Select Market Nasdaq Global Select Market Indicate by check mark if the registrant is a well-known seasoned issuer, as defiff ned in RulRR e 405 of the Securities Act. Yes (cid:5) No (cid:4) Indicate by check mark if the registrant is not required to fiff le reports pursuant to Section 13 or 15 (d) of the Act. Yes (cid:4) No (cid:5) Securities registered pursuant to Section 12(g) of the Act: None Indicate by check mark whether the registrant (1) has fiff led all reports required to be fiff led by Section 13 or 15 (d) of the Securities Exchange Act of 1934 dud ring the the past 90 such shorter period that the registrant was required to fiff le such reports), and (2) has been subject to such fiff ling requirements forff preceding 12 months (or forff days. Yes (cid:5) No (cid:4) Indicate by check mark whether the registrant has submitted electronically everyrr S-T (section 232.405 of this chapta er) during the preceding 12 months (or forff Interactive Data File required to be submitted pursuant to RulRR e 405 of Regulation such shorter period that the registrant was required to submit such fiff les). Yes (cid:5) No (cid:4) Indicate by check mark whether the registrant is a large accelerated fiff ler, an accelerated fiff ler, a non-accelerated fiff ler or a smaller reporting company. See defiff nitions of “large accelerated fiff ler,” “accelerated fiff ler,” “smaller reporting company,” and “emerging growth company” in RulRR e 12b-2 of the Exchange Act: Large accelerated fiff ler Non-accelerated fiff ler (cid:5) (cid:4) Accelerated fiff ler Smaller reporting company Emerging growth company (cid:4) (cid:4) (cid:4) If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period forff complying with any new or revised fiff nancial accounting standards provided pursuant to Section 13(a) of the Exchange Act. (cid:4) 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. (cid:5) If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the fiff nancial statements of thet registrant included in the fiff ling reflff ect the correction of an error to previously issued fiff nancial statements. (cid:4) Indicate by check mark whether any of those error corrections are restatements that required a recoveryrr analysis of incentive-based compensation received by any of the registrant’s executive o(cid:6)cers during the relevant recoveryrr period pursuant to §240.10D-1(b). (cid:4) Indicate by check mark whether the registrant is a shell company (as defiff ned in RulRR e 12b-2 of the Act.) Yes (cid:4) No (cid:5) The aggregate market value of the registrant’s outstanding voting and non-voting common stock held by non-affff iff liates on June 30, 2022, determined using a per share closing price on that date of $31.71, was $1,793,493,083. As of Februarr ryrr 15, 2023, there were 59,202,654 shares of Wesbanco, Inc. common stock $2.0833 par value per share, outstanding. Certain specififf cally designated portions of Wesbanco, Inc.’s defiff nitive proxy statement which will be fiff led by April 30, 2023 forff its Annual Meeting of Shareholders (the “Proxy Statement”) to be held in 2023 are incorpor rr ated by refeff rence into Part III of this Form 10-K. DOCUMENTS INCORPORARR TED BY REFERENCE WESBANCO, INC. ANNUAL REPORT ON FORM 10-K TABLE OF CONTENTS ITEM Part I Part II Business Risk Factors Unresolved Staffff Comments Properties Legal Proceedings Mine Safeff ty Disclosures Page No. 3-13 14-24 24 25 25 25 Market forff the Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 26-27 ITEM # 1 1A 1B 2 3 4 5 6 7 Reserved Management’s Discussion and Analysis of Financial Condition and Results of Operations 7A Quantitative and Qualitative Disclosures about a Market Risk 8 9 9A 9B 9C 10 11 12 13 14 15 16 Financial Statements and Supplementaryr Data Changes in and Disagreements with Accountants on Accounting and Financial Disclosure Controls and Procedures Other Inforff mation Disclosure Regarding Foreign Jurisdictions that Prevent Inspections Part III Directors, Executive Offff iff cers and Corpor rr ate Governance Executive Compensation Security Ownership of Certain Benefiff cial Owners and Management and Related Stockholder Matters Certain Relationships and Related Transactions, and Director Independence Principal Accounting Fees and Services Exhibits and Financial Statement Schedules Form 10-K Summaryr Signatut res Part IV 2 27 28-65 66-67 68-132 133 133 133 133 134 134 134 134 134 135 135 140 ITEM 1. BUSINESS GENERARR L PART I Wesbanco, Inc. (“Wesbanco” or the “Company”), a bank holding company incorpor ated in 1968 and headquartered in Wheeling, West Virginia, offff eff rs a fulff t services, brokerage services, mortgage banking and insurance. Wesbanco offff eff rs these services through two reportabla e segments, community banking and trurr st and investment services. For additional inforff mation regarding Wesbanco’s business segments, please refeff r to Note 23, “Business Segments” in the Consolidated Financial Statements. l range of fiff nancial services including retail banking, corpor ate banking, personal and corpor ate trusrr rr rr rr As of December 31, 2022, Wesbanco operated one commercial bank: Wesbanco Bank, Inc. (“Wesbanco Bank” or the “Bank”). The Bank has 194 branches and 188 ATM machines located in West Virginia, Ohio, western Pennsylvania, Kentuct ky, southern Indiana and Maryr land. Total assets of Wesbanco as of December 31, 2022 appr t and investment servrr ices and and annuities. The market value of assets under management of the trurr st and various alternative investment products including mutuat investment services segment is appr oximately $4.9 billion as of December 31, 2022. These assets are held by Wesbanco Bank in fiff duciaryr or agency capaa oximated $16.9 billion. Wesbanco Bank also offff eff rs trusrr l funds its customers and thereforff e are not included as assets on Wesbanco’s Consolidated Balance Sheets. cities forff a a ff Wesbanco also offff eff rs additional services through its non-banking subsidiaries: Wesbanco Insurance Services, Inc. (“Wesbanco Insurance”), a wholly-owned subsidiaryr of Wesbanco Bank, is a multi-line insurance personal and commercial clients. agency specializing in property, casualty, lifeff and title insurance, with benefiff t plan sales and administration forff Wesbanco Securities, Inc. (“Wesbanco Securities”) is a fulff l service broker-dealer, which also offff eff rs discount brokerage services. Wesbanco Asset Management, Inc., a wholly-owned subsidiaryr of Wesbanco Bank, holds certain investment securities and loans in a Delaware-based subsidiary.rr Wesbanco Properties, Inc. holds certain commercial real estate properties. The commercial property is leased to Wesbanco Bank and to certain non-related third parties. Kentuct kiana Real Estate Holdings, LLC, and Southern Indiana Real Estate Holdings, LLC, are Indiana and Kentuct ky-based limited liabia lity t, ations that hold certain real estate properties in those markets. In addition, FAH, LLC, WSB Realty, LLC and Flagship Acquiqq sitions Trusrr ations, hold certain real rr corpor which were acquired in the Old Line Bancshares, Inc. ("OLBK") acquisition and are Marylr and limited liabia lity corpor estate properties located in the Marylr and area. Each of these entities is a wholly owned subsidiaryrr of Wesbanco Bank. rr CBIN Insurance Inc. is a capta ive insurance company, which issues policies to Wesbanco’s banking subsidiaries forff certain risks that are not covered by the Company’s commercial insurances policies purchased frff om third-party carriers. It is in the process of winding upu its business activities and is expected to be dissolved over the next 12 to 18 months. Wesbanco has eleven capia tal trusrr t Prefeff rred Securities”) and lending the proceeds to Wesbanco. For more inforff mation regarding Wesbanco’s issuance of Trusrr (“Trusrr Securities, please refeff r to Note 10, “Subordinated Debt and Junior Subordinated Debt” in the Consolidated Financial Statements. ts, which are all wholly-owned trusrr t subsidiaries forff med forff e of issuing trusrr the purpos t prefeff rred securities t Prefeff rred rr AMSCO, Inc. (“AMSCO”) is a wholly-owned subsidiaryrr of Wesbanco Bank, which forff merly engaged in the management of certain real tion of 1-4 faff mily residential units. It is in the process of winding up its business activities and will be dissolved. estate development and construcrr Wesbanco Bank’s Investment Department also serves as investment adviser to a faff mily of mutuat , namely the “WesMark Funds.” faff mily is comprised of the WesMark Large Company Fund, the WesMark Balanced Fund, the WesMark Small Company Fund, the The fund ff WesMark Government Bond Fund, the WesMark West Virginia Municipal Bond Fund, and the WesMark Tactical Opportuni ty Fund. l funds ff t As of December 31, 2022, none of Wesbanco’s subsidiaries were engaged in any operations in forff eign countries, and only one had any certain domestic customers and transactions with customers in forff eign countries. The Bank also provides letters of credit internationally forff provides international wire services through a third-party correspondent bank. WEBSITE ACCESS TO WESBANCO’S FILINGS WITH THE SECURITIES AND EXCHANGE COMMISSION All of Wesbanco’s electronic fiff lings forff 2022 fiff led with the Securities and Exchange Commission (the “SEC”), including this Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and amendments to these reports fiff led or furff nished 3 pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, are made availabla e at no cost on Wesbanco’s website, www.wesbanco.com, through the “Investors” link as soon as reasonabla y practicabla e aftff er Wesbanco fiff les such material with, or fuff rnishes it to, the SEC. Wesbanco’s SEC fiff lings are also availabla e through the SEC’s website at www.sec.gov. Wesbanco routinely posts important infoff rmation on the Company's website in the "Investors" section. Wesbanco may also use its website as a means of disclosing material, non-pubu lic infoff rmation complying with our disclosure obligations under Regulation FD. Accordingly, investors should monitor the Investors section of the and forff lowing Wesbanco's press releases. SEC fiff lings, public confeff rence calls, presentations and webcasts. The inforff mation website in addition to folff contained on, or that may be accessed through, Wesbanco's website is not incorprr orated by refeff rence into, and is not a part of,ff this Annual Report on Form 10-K. Upon written request of any shareholder of record on December 31, 2022, Wesbanco will provide, without charge, a printed copy of this 2022 Annual Report on Form 10-K, including fiff nancial statements and schedules, as required to be fiff led with the SEC. To obtain a copy of this report, contact: John Iannone, Wesbanco, Inc., 1 Bank Plaza, Wheeling, West Virginia 26003 (304) 905-7021. HUMAN CAPITAL RESOURCES At December 31, 2022, we employed 2,426 fulff l-time employees was appr oximately 10 years while the average tenure of our executive offff iff cers was over 16 years. None of our employees are represented by a collective bargaining agreements. We believe our relations with our employees are veryr good. The safeff ty and care of our employees and their faff milies as well as their communities is paramount forff l-time equivalent employees. At that date, the average tenure of all of our fulff us. Of our total employees, 9.6% or 232 were minorities with 82, or 35.3% of those offff iff cers. Of our 1,117 total offff iff cers, 598 or 53.6% were women. Our turt nover rate forff 2022 was 18.98%. Our turt nover rate forff offff iff cers was just 9.13% forff 2022. rr Our corpor ate culturt e has been establa ished by senior management and overseen by our board of directors. Built upon our ‘Better Banking Pledge’ and our ‘Service & Support Pledge’, our culturt e, which is both customer and employee-centric, is focff used on growing long-term relationships by pledging to serve all personal and business customer needs effff iff ciently and effff eff ctively while treating our employees with dignity and respect. In 2022, Wesbanco completed its fiff rst annual employee engagement survey with preliminaryr positive results. Wesbanco has been a leader in its communities forff equality. We are a group of diverse backgrounds and ethnicities, and share the same values of dignity and respect forff over 150 years, and we want to continue to take a leadership role by noting our stance our co-workers, forff customers, and feff llow community members. We have been abla e to enhance our diversififf cation 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 workforff ce representation by reflff ecting the makeup of the community it serves. Wesbanco believes in open, honest discussion. In addition to our Women’s Symposium, which has been held forff over 4 years, we have how we conduct business. These inclusive programs focff us ties, sharing experiences, networking with management, and partnering with mentors. The goal is to ignite our employees to fiff nd both personal and profeff ssional success. Both initiatives include board, management and staffff as an added resource and a positive catalyst forff added a Diversity and Inclusion Forumrr on faff cilitating educational opportuni and support a passion forff participants. t In addition, we have engaged in leadership training forff specififf c Talent Development Program to identify,ff promote and build development plans among multiple levels of management. These effff orff have resulted in Wesbanco being designated as one of the best workplaces in several markets, including Columbus and Western Pennsylvania. senior and middle management supervisors. We annually assess talent through a ts 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 effff off rts. In faff ct, dud ring the past year alone, Wesbanco has made over $1.2 million of philanthropic donations in supu port of our communities across our foff otpt rint. Further, our employees are equally generous, providing technical assistance services and fiff nancial education to non-profiff t organizations and area schools that resulted in nearly 11,700 volunteer hours in 2022. COMPETITION Competition in the forff m of price and service frff om other banks, including local, regional and national banks and fiff nancial companies such as savings and loan companies, internet banks, payday lenders, money services businesses, credit unions, fiff nance companies, brokerage fiff rms and other non-banking companies providing various regulated and non-regulated fiff nancial services and products, is intense in most of the markets served by Wesbanco and its subu sidiaries. Wesbanco’s trurr st and investment services segment receives competition frff om commercial banks, trurr st fiff rms, law fiff rms, brokerage fiff rms, and other fiff nancial services companies. As a result companies, mutuat of consolidation within the fiff nancial services industry,rr mergers between, and the expansion of,ff fiff nancial institutt ions both within and outside of Wesbanco’s maja or markets have provided signififf cant competitive pressure in those markets. Many of Wesbanco’s competitors have greater resources and, as such, may have higher lending limits and may offff eff r other producdd ts and services that are not provided by Wesbanco. Wesbanco generally competes on the basis of superior customer service and responsiveness to customer needs, availabla e loan and deposit produd cts, rates of interest charged on loans, rates of interest paid forff t, brokerage and insuranaa ce services. As a result of Wesbanco’s expansion into certain larger metropolitan markets, it has faff ced entrenched larger bank competitors with an already existing deposits, and the availabia lity and pricing of trusrr companies, investment advisoryr l fundff 4 customer base that may faff r exceed Wesbanco’s initial entryrr position into those markets. As a result, Wesbanco may be forff ced to compete more aggressively foff r loans, deposits, trurr st and insurance produdd cts to grow its market share, potentially redudd cing its current and fuff tut re profiff t potential frff om such markets. SUPERVR ISION AND REGULATION As a bank holding company and a fiff nancial holding company under feff deral 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 fiff le with the Federal Reserve Board reports and other inforff mation regarding its business operations and the business operations of its subsidiaries. Since Wesbanco is both a bank holding company and a fiff nancial holding company, Wesbanco can offff eff r customers virtut ally any type of service that is fiff nancial in natut re or incidental thereto, including banking and activities closely related to banking, securities underwriting, insurance (both underwriting and agency) and merchant banking. Wesbanco is now subject to additional supu ervision frff om the Federal Reserve Board and its primaryr banking regulators due to its exceeding the $10 billion asset threshold and seeks to ensure that icabla e laws, such as the Bank Secrecy Act, anti-money laundering suffff iff cient resources are allocated to safeff ty and soundness compliance with appl regulations, and the Community Reinvestment Act (“CRAR ”), among others, and risk management and internal audit, among other func tions, so that the enhanced requirements of the Federal Reserve Board and its primaryrr banking regulators are met. a ff rr a ation (the “FDIC”), the West Virginia Division of Financial Institutt As indicated above , Wesbanco presently operates one bank subsidiary,r Wesbanco Bank, which is a West Virginia-chartered banking ation which is not a member bank of the Federal Reserve System. It is subject to examination and supervision by the Federal Deposit corpor rr ions (“WVDIF”), and the Consumer Financial Protection Insurance Corpor 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 specififf cally, the Federal Reserve Bank of Cleveland, Ohio (“Federal Reserve”) and examination by other feff deral and state agencies, including, in the case of certain securities ion Regulatoryrr Authority, Inc. (“FINRAR ”), the Municipal Securities RulRR emaking Board activities, regulation by the SEC, the Financial Institutt ation (“SIPC”). Wesbanco Bank maintains one designated fiff nancial subsidiary,r Wesbanco and the Securities Investors Protection Corpor Insurance, which, as indicated above , is a multi-line insurance agency specializing in property, casualty, lifeff and title insurance, with benefiff t plan sales and administration forff personal and commercial clients. As a result of exceeding the $10 billion asset threshold, Wesbanco Bank is now subject to enhanced prude ntial supervision frff om both the FDIC and WVDIF as part of their large bank supervision program. a rr rr Wesbanco is also under the jurisdiction of the SEC and certain state securities commissions foff r matters relating to the offff eff ring and sale of its securities. Wesbanco is subject to the disclosure and regulatoryr 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 rulrr es of the Nasdaq forff listed companies. Under the Riegle-Neal Interstate Banking and Branching Effff iff ciency 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 Reforff m and Consumer Protection Act (the “Dodd-Frank Act”), banks are also permitted to establa ish 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 appr oval is required forff Wesbanco to acquire more than 5% of the voting stock of any bank. In determining whether to appr effff eff ct of the acquisition on competition, the public benefiff ts expected to be received frff om the acquisition, the projected capia tal ratios and levels on a post- acquisition basis, and the acquiring institutt ion’s record of addressing the credit needs of the communities it serves, including the needs of low- and moderate-income neighborhoods, consistent with safeff and sound operation of the bank under the CRARR . ove a proposed bank acquisition, feff deral banking regulators will consider, among other faff ctors, thet a a HOLDING COMPANY REGULATIONS As indicated in “Item 1. Business-General”, Wesbanco has one state-chartered bank subsidiary,r Wesbanco Bank, as well as four non-bank subsidiaries (excluding capia tal trusrr ts). The subsidiaryr bank is subject to affff iff liate transaction restrictions under feff deral law, which limit “covered transactions” by the subsidiaryrr bank with the parent and any non-bank subsidiaries of the parent, which are refeff rred to in the aggregate in this as “affff iff liates” of the subsidiaryr bank. “Covered transactions” include loans or extensions of credit to an affff iff liate (including repurchase paragrapha agreements), purchases of or investments in securities issued by an affff iff liate, purchases of assets frff om an affff iff liate, the acceptance of securities issued by an affff iff liate as collateral forff a loan or extension of credit, the issuance of a guarantee, acceptance or letter of credit on behalf of an affff iff liate, certain transactions that involve borrowing or lending securities, and certain derivative transactions with an affff iff liate. Such covered transactions between the subu sidiaryr bank and any single affff iff liate are limited in amount to 10% of the subu sidiaryr bank’s capa ital and surprr lus, and, with respect to covered transactions with all affff iff liates in the aggregate, are limited in amount to 20% of the subsidiaryrr bank’s capia tal and surplrr us. Furthermore, such loans or extensions of credit, guarantees, acceptances and letters of credit, and any credit exposure resulting frff om securities borrowing or lending transactions or derivatives transactions, are required to be secured by collateral at all times in amounts specififf ed by law. In addition, all covered transactions must be conducted on terms and conditions that are consistent with safeff and sound banking practices. ff 5 The Dodd-Frank Act requires a bank holding company to act as a source of fiff nancial strength to its subsidiaryr bank. Under this source of ions into a troubled subsu idiaryr bank, faff ilure to commit resources to such a subsidiaryrr strength requirement, the Federal Reserve Board may require a bank holding company to make capia tal infusff and may charge the bank holding company with engaging in unsafeff and unsound practices forff bank. A capia tal infusff ion conceivabla y could be required at a time when Wesbanco may not have the resources to provide it. PAYMENT OF DIVIDENDS Dividends frff om the subsidiaryrr bank are a signififf cant source of funds ff forff ended December 31, 2022, Wesbanco declared cash dividends to its prefeff rred and common shareholders of appr $81.3 million, respectively. payment of dividends to Wesbanco’s shareholders. For the year oximately $10.1 million and a As of December 31, 2022, Wesbanco Bank was “well capia talized” under the defiff nition in Section 324.403 of the FDIC Regulations. Thereforff e, as long as the Bank remains “well capia talized” or even becomes “adequately capia talized,” there would be no basis under Section 324.403 to limit the aba ility of the Bank to pay dividends because it had not become undercapa italized, signififf cantly undercapa italized or critically undercapia talized. Effff eff ctive Januaryrr 1, 2016, Wesbanco Bank and Wesbanco became subject to “capia tal conservation buffff eff r” rulrr es, phased in the regulatoryr minimums year period which ended in 2019, which requires Wesbanco and Wesbanco Bank to have capia tal levels above over a four to pay dividends (discussed below in connection with the Basel III initiative under “Item 1. Business—Capia tal Requirements”). a ff All fiff nancial institutt ions are subject to the prompt corrective action provisions set forff th in Section 38 of the Federal Deposit Insurance Act (the “FDI Act”) and the provisions set foff rth 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 undercapia talized, signififf cantly undercapia talized, or critically undercapia talized, as defiff ned in Section 324.403 of the FDIC Regulations, the bank is precluded frff om being abla e 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 appr oval of the ions would be required if the total of all dividends declared by the Bank in any calendar year West Virginia Commissioner of Financial Institutt that year combined with its retained net profiff ts of the preceding two years. Further, Section would exceed the total of the Bank’s net profiff ts forff 31A-4-25 limits the abia lity of a West Virginia banking institutt of the banking institut tion equals the common stock of the banking institut tion and if certain specififf ed amounts of recent profiff ts of the banking institut tion have not been carried to the surplrr us fund. ion to pay dividends until the surplrr us fund a ff ff a If,ff in the opinion of the appl icabla e regulatoryrr authority, a bank under its jurisdiction is engaged in or is about to engage in an unsafeff or unsound practice which, depending on the fiff nancial condition of the bank, could include the payment of dividends, such authoritytt may require, aftff er notice and hearing, that such bank cease and desist frff om such practice. The Federal Reserve Board has issued policy statements, which icabla e provide that insured banks and bank holding companies should generally only pay dividends out of current operating earnings. Under appl oval is required if the total of all dividends declared by a bank in any calendar year exceeds the availabla e retained law, bank regulatoryrr agency appr earnings or exceeds the aggregate of the bank’s net profiff ts (as defiff ned by regulatoryr agencies) forff that year and its retained net profiff ts foff r the preceding two years. As of December 31, 2022, under West Virginia and FDIC regulations, Wesbanco could receive, without prior regulatoryrr appr th in Note a 21, “Regulatoryrr Matters,” in the Consolidated Financial Statements. oval, a dividend of up to $116.8 million frff om Wesbanco Bank. Additional inforff mation regarding dividend restrictions is set forff a a a On Februarr ryr 24, 2009, the Federal Reserve Division of Banking Supervision and Regulation issued Supervisoryrr Letter SR 09-4, “Applying Supervisoryrr 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, capia tal repurchases and capia tal redemptions. Although the letter a bank holding company to review various faff ctors largely reiterates longstanding Federal Reserve supervisoryrr policies, it emphasizes the need forff when considering the declaration of a dividend or taking action that would reduce regulatoryrr capia tal provided by outstanding fiff nancial instrumrr ents. These faff ctors include the potential need to increase loan loss reserves, write down assets and reflff ect declines in asset values in equity. In addition, the bank holding company should consider its past and anticipated fuff tut re earnings, the dividend payout ratio in relation to earnings, and adequacy of regulatoryr capia tal beforff e any action is taken. The consideration of capia tal adequacy should include a review of all known faff ctors tions in that may affff eff ct capia tal in the futff urt e. On July 24, 2020, Attachment C was added to SR 09-4 to provide greater clarity regarding the situat 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 forff ff ly 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 supervisoryr thresholds, and (4) is in good supervisoryrr condition, to receive this expedited consultation. the period (1) must have net income availabla e over the past year suffff iff cient to fulff In certain circumstances, defiff ned by regulation relating to levels of earnings and capia tal, advance notififf cation to, and in some circumstances, a appr oval by the regulator could be required to declare a dividend or repurchase or redeem capia tal instrumrr ents. FDIC INSURARR NCE FDIC insurance premiums are assessed by the FDIC using a risk-based appr ions into categories based on capia tal and risk profiff les. Beginning in 2019, Wesbanco Bank is considered to be a large bank forff es of the premium calculation because its total assets exceed $10 billion, and it is thereforff e subject to more continuous oversight by the FDIC. Large banks are subjb ect to a more oach that places insured institutt the purpos a rr 6 complex insurance premium calculation with additional loan-related and other risk faff ctors involved which leads to an overall higher rate as compared to that of smaller banks. In 2022, Wesbanco Bank paid deposit insurance premiums of $7.2 million, compared to $4.5 million and $6.7 million in 2021 and 2020, respectively. The increase in 2022's premiums was due to higher quarterly assessment rates due to current which was received in the second quarter of 2021 resulting frff om prior fiff nancial ratios. In addition, the prior year included a $1.0 million refund, period call report adjustments. The FDIC adopted a fiff nal rulrr e in October 2022, appl ions, to increase initial base deposit insurance assessment rate schedules uniforff mly by 2 basis points, beginning in the fiff rst quarterly assessment period of 2023. The increase in assessment rate schedules is intended to increase the likelihood that the reserve ratio of the Deposit Insurance Fund reaches the statut toryrr minimum of 1.35% by the statut toryr deadline of September 30, 2028. icabla e to all insured depositoryr institutt a ff CAPITAL REQUIREMENTS The Federal Reserve Board had historically issued risk-based capia tal ratio and leverage ratio guidelines forff bank holding companies. The risk-based capia tal ratio guidelines estaba lish a systematic analytical frff amework that makes regulatoryrr capia tal requirements more sensitive to diffff eff rences in risk profiff les among banking organizations, takes offff -ff balance sheet exposures into explicit account in assessing capia tal adequacy, and minimizes disincentives to holding liquid, low-risk assets. Under the guidelines and related policies, bank holding companies must maintain capa ital suffff iff cient to meet both a risk-based asset ratio test and a leverage ratio test on a consolidated basis. The risk-based ratio is determined by allocating assets and specififf ed offff -ff balance sheet commitments into several weighted categories, with higher weightings being assigned to categories perceived as representing greater risk. A bank holding company’s capia tal is then divided by total risk-weighted assets to yield the risk- based ratio. The leverage ratio is determined by relating core capa ital to total assets adjd usted as specififf ed in the guidelines. The Bank is subu jb ect to substantially similar capia tal requirements. a y. In December 2010, the Basel Committee issued a strengthened set of international capia tal and liquidity standards forff The feff deral regulatoryr authorities’ risk-based capia tal guidelines are currently based upon agreements reached by the Basel Committee on Banking Supervision (the “Basel Committee”). The Basel Committee is a committee of central banks and bank supervisors and regulators frff om s supervisors in determining the supervisoryr the maja or industrialized countries that develops broad policy guidelines forff policies they appl banks and bank holding companies, known as “Basel III.” In July 2013, the U.S. feff deral banking agencies issued a joint fiff nal rulrr e that implements the Basel III capia tal standards and establa ishes the minimum capia tal levels required under the Dodd-Frank Act. The rulrr e was effff eff ctive Januaryrr 1, 2015, subject to a transition period providing forff l implementation on Januaryrr 1, 2019. The Economic Growth, Regulatoryrr Relief,ff and Consumer Protection Act (the "EGRRCPA"), enacted into law in May 2018, exempts banks with total consolidated assets of less than $10 billion that exceed the community bank leverage ratio frff om the capia tal requirements under Basel III. Wesbanco Bank’s assets are in excess of $10 billion, however, so the exemption is not appl use by each country’r icabla e. fulff a a Generally, under the appl icabla e guidelines, a fiff nancial institutt ion’s capia tal is divided into common equity Tier 1 (“CET1”), total Tier 1 and Tier 2. CET1 includes common shares and retained earnings less goodwill, intangible assets subject to limitation and certain defeff rred tax assets subject to limitation. In addition, under the fiff nal capia tal rulrr e, an institutt ion may make a one-time, permanent election to continue to exclude ion does not make this election, unrealized gains and losses will be included accumulated other comprehensive income frff om capia tal. If an institutt in the calculation of its CET1. Total Tier 1 is comprised of CET1 and certain restricted capia tal instrumrr ents, including qualifyff ing cumulative t prefeff rred securities, in their Tier 1 capia tal, up to a limit of 25% of Tier 1 capiaa tal. (See below within perperr this section forff more inforff mation regarding the capia tal treatment of trusrr l prefeff rred stock and qualifyiff ng trusrr t prefeff rred securities.) tuat Tier 2, or supplementaryrr capia tal, includes, among other things, portions of trusrr l prefeff rred stock not otherwise counted in Tier 1 capa ital, as well as perprr etut al prefeff rred stock, intermediate-term prefeff rred stock, hybrid capa ital instrurr ments, perperr the allowance forff l debt, mandatoryr convertible debt securities, term subordinated debt, unrealized holding gains on equity securities, anda loan and lease losses, all subject to certain limitations. “Total capia tal” is the sum of Tier 1 and Tier 2 capia tal. t prefeff rred securities and cumulative perperr tuat tuat The Federal Reserve Board has establa ished the folff lowing minimum capia tal levels banks and bank holding companies are required to maintain as a percentage of risk-weighted assets (including various offff -ff balance sheet items): (i) CET1 of at least 4.5%, (ii) Tier 1 capia tal ratio of at least 6%, (iii) total capia tal ratio (Tier 1 and Tier 2 capia tal) of at least 8%; and (iv) a non-risk-based leverage ratio (Tier 1 capia tal to average consolidated assets) of 4%. The risk-based capia tal standards are designed to make regulatoryr capia tal requirements more sensitive to diffff eff rences in credit and market risk profiff les among banks and fiff nancial holding companies, to account forff offff -ff balance sheet exposure, and to minimize holding liquid assets. Balance sheet and offff -ff balance sheet exposures are assigned to one of several risk-weights primarily based disincentives forff on relative credit risk. The capia tal amounts and classififf cations are also subject to qualitative judgements by the regulators about components, risk-weightings, and other faff ctors. Additionally, with the fiff nal capia tal rulrr e fulff ly implemented as of Januaryrr 1, 2019, an institut tion is required to maintain a 2.5% common equity Tier 1 capia tal conservation buffff eff r over the minimum risk-based capia tal requirements to avoid restrtt ictions on the abia lity to pay dividends, discretionaryr bonuses to executive offff iff cers, and engage in share repurchases. a Failure to meet appl ion to a variety of enforff cement remedies availaba le to the feff deral regulatoryr authorities, including limitations on the aba ility to pay dividends, the issuance by the regulatoryr authority of a capa ital directive icabla e capia tal guidelines could subject a fiff nancial institutt a 7 to increase capia tal, and the termination of deposit insurance by the FDIC, as well as to the measures described below under “Prompt Corrective Action” as appl icabla e to undercapia talized institutt ions. a As of December 31, 2022, Wesbanco’s CET1, Tier 1 and total capia tal to risk-adjusted assets ratios were 11.20%, 12.33% and 15.11%, respectively. Wesbanco made a timely permanent election to exclude accumulated other comprehensive income frff om regulatoryrr capia tal. As of December 31, 2022, Wesbanco Bank’s CET1, Tier 1 and total capia tal to risk-adjusted assets ratios were 12.22%, 12.22% and 12.81%, respectively, all in excess of the minimum requirements. Neither Wesbanco nor the Bank had been advised by the appr opriate feff deral banking regulator of any specififf c leverage ratio appl icabla e to it. As of December 31, 2022, Wesbanco’s leverage ratio was 9.90% and the Bank’s leverage ratio was 9.80%. a a As of December 31, 2022, Wesbanco had $133.5 million in junior subordinated debt on its Consolidated Balance Sheets. For regulatoryr t Prefeff rred Securities totaling $130.0 million underlying such junior subordinated debt were included in Tier 2 capia tal as of es, Trusrr purpos rr reporting requirements. In 2013, the feff deral banking agencies amended capia tal requirements December 31, 2022, in accordance with regulatoryr t prefeff rred securities frff om Tier 1 capia tal. A grandfaff ther provision, however, permits bank holding compm anies with to generally exclude trusrr t prefeff rred consolidated assets of less than $15 billion, which Wesbanco was through September 30, 2019, to continue counting existing trusrr t prefeff rred securities issued beforff e May securities as Tier 1 capia tal until they maturt e. The fiff nal Basel III capia tal rulrr e permanently grandfaff thers trusrr 19, 2010 forff t prefeff rred securities and certain other elements in excess of the 25% limit may be included in Tier 2 capia tal, subject to restrictions. As of December 31, 2022, Wesbanco’s total assets were aba ove $15 billion; therefoff re, all such securities are no longer counted as Tier 1 capa ital but instead are countuu ed as Tier 2 capia tal t prefeff rred securities, please refeff r to Note 10, “Subordinated and Junior Subordinated Debt” subject to limits. For more inforff mation regarding trusrr in the Consolidated Financial Statements. ions of less than $15 billion in size, subject to a 25% limit of Tier 1 capia tal. The amount of trusrr institutt The risk-based capia tal standards of the Federal Reserve and the FDIC specifyff that evaluations by the banking agencies of a bank’s capia tal adequacy will include an assessment of the exposure to declines in the economic value of the bank’s capa ital dudd e to changes in interest rates. These banking agencies have issued a joint policy statement on interest rate risk describing prude nt methods forff monitoring such risk that rely principally on internal measures of exposure and active oversight of risk management activities by senior management. rr PROMPT CORRECTIVE ACTION The Federal Deposit Insurance Corpor “prompt corrective action” with respect to depositoryr establa ishes fiff ve capia tal undercapia talized. rr ation Improvement Act of 1991 (“FDICIA”) requires feff deral banking regulatoryr authorities to take ions that do not meet minimum capia tal requirements. For these purprr oses, FDICIA tiers: well-capia talized, adequately capia talized, undercapia talized, signififf cantly undercapia talized, and critically institutt An institut tion is deemed to be “well-capa italized” if it has a total risk-based capa ital ratio of 10% or greater, a Tier 1 risk-based capa ital ratio of 8% or greater, a Tier 1 leverage ratio of 5% or greater, and a common equity Tier 1 ratio of 6.5% or greater, and is not subu jb ect to a regulatoryr ion is deemed to be “adequately order, agreement, or directive to meet and maintain a specififf c capia tal level forff capia talized” if it has a total risk-based capia tal ratio of 8% or greater, a Tier 1 risk-based capia tal ratio of 6% or greater, generally a Tier 1 leverage ion does not meet the defiff nition of a “well-capia talized” ratio of 4% or greater, and a common equity Tier 1 ratio of 4.5% or greater, and the institutt institutt ion has a total risk-based capa ital ratio that is less than 6%, a Tier 1 risk-based capa ital ratio that is less than 4%, or a Tier 1 leverage ratio or common ion is deemed to be “critically equity Tier 1 ratio that is less than 3%, it is deemed to be “signififf cantly undercapia talized.” Finally, an institutt undercapia talized” if it has a ratio of tangible equity (as defiff ned in the regulations) to total assets that is equal to or less than 2%. As of December 31, 2022, as noted above in “Capia tal Requirements,” Wesbanco Bank had capia tal levels that met the “well-capia talized” standards under FDICIA and a its implementing regulations. ion that does not meet one or more of the “adequately capia talized” tests is deemed to be “undercapia talized.” If the institutt any capia tal measure. An institutt ion. An institutt institutt institutt FDICIA generally prohibits a depositoryr ion frff om making any capia tal distribution, including payment of a cash dividend, or paying ions are any management feff e to its holding company, if the depositoryrr subject to growth limitations and are required to submit a capia tal restoration plan. If any depositoryrr ion subsidiaryr of a holding company is required to submit a capia tal restoration plan, the holding company would be required to provide a limited guarantee regarding compliance with ion faff ils to submit an the plan as a condition of appr acceptabla e plan, it is treated as if it is signififf cantly undercapia talized. Signififf cantly undercapia talized institutt ions may be subject to a number of requirements and restrictions, including orders to sell suffff iff cient voting stock to become adequately capia talized, requirements to redudd ce total assets, ions may not, beginning 60 days aftff er becoming and cessation of receipt of deposits frff om correspondent banks. Critically undercapia talized institutt t prefeff rred securities. In addition, critically undercapia talized, make any payment of principal or interest on their subordinated debt and/or trusrr critically undercapia talized institutt ntment of a receiver or conservator within 90 days of becoming critically undercapia talized. ion would thereaftff er be undercapia talized. Undercapia talized institutt institutt opriate feff deral banking agency. If an undercapia talized institutt oval of such plan by the appr ions are subject to appoi a a a 8 GRARR MM-LEACH-BLILEY ACT Under the Gramm-Leach-Bliley Act (the “GLB Act”), banks are no longer prohibited frff om associating with, or having management interlocks with, a business organization engaged principally in securities activities. By qualifyiff ng as a “fiff nancial holding company,” as authorized under the GLB Act, a bank holding company acquires new powers not otherwise availabla e to it. Wesbanco has elected to become a fiff nancial holding company under the GLB Act. It also has qualififf ed a subsidiaryr of the Bank as a fiff nancial subsidiaryr under the GLB Act. Financial holding company powers relate to “fiff nancial activities” that are determined by the Federal Reserve Board, in coordination with the Secretaryr of the Treasury,rr to a fiff nancial activity, to be fiff nancial in naturt e, incidental to an activity that is fiff nancial in naturt e, or complementaraa yr provided that the complementaryr activity does not pose a safeff ty and soundness risk. The GLB Act itself defiff nes certain activities as fiff nancial in naturt e, including but not limited to: underwriting insurance or annuities; providing fiff nancial or investment advice; underwriting, dealing in, or making markets in securities; merchant banking, subject to signififf cant limitations; insurance company portfolff io investing, subject to signififf cant by the Federal Reserve Board to be closely related to banking. limitations; and any activities previously found ff National and state banks are permitted under the GLB Act, subject to capia tal, management, size, debt rating, and CRAR qualififf cation faff ctors, to have “fiff nancial subsidiaries” that are permitted to engage in fiff nancial activities not otherwise permissible. However, unlike fiff nancial holding companies, fiff nancial subu sidiaries may not engage in insurance or annuity underwrr riting; developing or investing in real estate; merchant banking (forff at least fiff ve years); or insurance company portfolff io investing. DODD-FRARR NK ACT The Dodd-Frank Act, enacted on July 21, 2010, and the rulrr es implementing its provisions have resulted in numerous and wide-ranging reforff ms to the strucrr turt e of the U.S. fiff nancial system. This includes, among other things, rulrr es to promote fiff nancial stabia lity and prevent or mitigate the risks that may arise frff om the material distress or faff ilure of a large bank holding company; enhance consumer protections; prohibit proprietaryr trading; and implement enhanced prude large bank holding companies regarding risk-based capia tal and leverage, risk and liquidity management, stress testing, and recoveryr and resolution planning. The Dodd-Frank Act, including current and futff urt e rurr les implementing its provisions and the interprrr etation of those rulrr es, have affff eff cted, and management expects will continue to affff eff ct, most of Wesbanco’s businesses in some way, either directly through regulation of specififf c activities or indirectly through regulation of concentration risks, capia tal or liquidity. ntial requirements forff rr Certain bank holding companies are subju ected to increased capia tal requirements (discussed above a under “Item 1. Business—Capia tal Requirements”). The Volcker RulRR e and the fiff nal rulrr es jointly issued by feff deral banking agencies implementing the rulrr e’s provisions limit Wesbanco’s abia lity trading, as well as its aba ility to sponsor or invest in hedge fuff nds or private equity fuff nds. The Volcker RuRR le also includes to engage in proprietaryr certain compliance program requirements that appl trading or permitttt ed covered fuff nd activities. The feff deral banking agencies recently revised the Volcker RulRR e compliance requirements, effff eff ctive Januaryr 1, 2020. Under the new rulrr e, banking entities that, together with their affff iff liates and subsidiaries, have an average gross sum of trading assets and liaba ilities (excluding obligations of or guaranteed by the United States or an agency of the United States) of less than $1 billion forff (4) consecutive quarters are ff four presumed to be in compliance with the Volcker RulRR e’s restrictions on proprietaryr trading and acquisition or retention of ownership interests in covered funds . Consequently such banking entities do not have an affff iff rmative obligation to demonstrate compliance with such restrictions (“limited trading compliance presumption”). Wesbanco meets the limited trading compliance presumption because its gross consolidated trading assets and liabia lities have been below $1 billion forff y to banking entities that engage in permissible proprietaryrr consecutive quarters. ff four a ff An interim fiff nal rulrr e was issued in Januaryrr 2014 that exempts investments in certain collateralized debt obligations backed primarily by trurr st prefeff rred securities frff om the provisions of the Volcker RuRR le. This interim fiff nal rurr le was effff eff ctive April 1, 2014 and did not have a material impact on Wesbanco forff the year ended December 31, 2022. The Federal Reserve Board revised the Volcker RuRR le, issuing a fiff nal rurr le in November 2019. Under the new rurr le, banking entities with gross consolidated trading assets and liabia lities between $1 billion and $20 billion will be subject to a simplififf ed compliance program because they will be considered to have “moderate” trading assets. The new rulrr e was effff eff ctive Januaryr 1, 2020; however, Wesbanco is not subu jb ect to the moderate trading compliance program because Wesbanco has gross consolidated trading assets and liabia lities below $1 billion. Passed in 2011, the Durbir n Amendment requires the Federal Reserve to limit feff e charges to retailers forff debit card processing. The Federal Reserve Board promulgated Regulation II (Debit Card Interchange Fees and Routing) that limits the interchange feff es paid by merchants to issuers when their debit cards are used as payment. An issuer is defiff ned as “any person that authorizes the use of the debit card to perfoff rm an electronic ication of the Durbir n Amendment is determined by whether the issuer, together with its affff iff liates, has $10 billion in debit transaction.” The appl assets as of the end of the calendar year preceding the date of the electronic debit transaction. An affff iff liate is defiff ned as “anyaa company that ion issues a debit card and it, controls, or is controlled by, or is under common control with another company.” Thereforff e, if an insured institutt a 9 together with its affff iff liates, has assets exceeding $10 billion, it is subject to this rulrr e. The rulrr e capsa swipe feff es) at $0.21 plus an additional 0.05% of the value of the transaction. Previously, the average interchange feff e was appr per transaction forff an insured institutt subject to the capa on interchange income in July of the folff Durbir n Amendment because, forff are combined, effff eff ctive forff debit card interchange feff es (also known as oximately $0.44 ions with more than $10 billion in assets by the year-end assessment deadline are lowing year. Wesbanco and the Bank were subject to the requirements imposed by the ion and its affff iff liates es of determining whether an issuer has $10 billion in assets, the assets of the institutt transactions beginning in July of 2019. ion. Financial institutt rr purpos a Additionally, section 165(i)(2) of the Dodd-Frank Act, as amended by the EGRRCPA, requires annual company-runrr stress tests forff bank holding companies with total consolidated assets greater than $100 billion. The Federal Reserve Board regulates bank holding companies, and thereforff e, if a bank holding company has total consolidated assets of $100 billion or more, it will be required to conduct the Federal Reserve Board stress-tests. Wesbanco Bank, a subsidiaryrr state nonmember bank, is governed by the FDIC. Under the FDIC rurr le, a covered bank includes “any state nonmember bank . . . with average total consolidated assets . . . that are greater than $10 billion but less than $50 billion.” However, the FDIC proposed a rulrr e in December 2018 to conforff m this defiff nition to Section 165 of the Dodd-Frank Act, as amended by the EGRRCPA, to state that a “covered bank” is a nonmember bank or state savings association with average total consolidated assets that are greater than $250 billion. Wesbanco Bank has less than $100 billion in average total consolidated assets, and thereforff e, is not subject to the Federal Reserve Board’s or the FDIC’s stress-test rulrr es. If the Dodd-Frank Act stress test rulrr es were to appl y at some point in the futff urt e, Wesbanco would have to assess the potential impact of a minimum of three macroeconomic scenarios—baseline, adverse, and severely adverse—on its consolidated losses, revenues, balance sheets (including risk-weighted assets) and capia tal. Each scenario includes economic variabla es, including macroeconomic activity, unempmm loyment, exchange rates, prices, incomes and interest rates. The adverse and severely adverse scenarios are not forff ecasts, but rather hypotyy hetical scenarios ions. Additionally, Wesbanco would have to publicly disclose these test results designed to assess the strength and resilience of fiff nancial institutt that is reasonabla y accessible on an annual basis. The required summaryrr of results could be published on Wesbanco’s web site or in any other forff umrr to the public. a As required by Section 165 of the Dodd-Frank Act, the Federal Reserve issued a rulrr e that strengthens the supervision and regulation of ntial standards. These standards large U.S. bank holding companies and foff reign banking organizations by establa ishing a number of enhanced prude include liquidity, risk management, and capia tal. Under the rulrr e, a publicly traded bank holding company with $10 billion or more in consolidated assets is required to establa ish an enterprrr ise-wide risk committee. However, the EGRRCPA raised the threshold to $50 billion. To conforff m the rulrr e to the EGRRCPA, the Federal Reserve Board proposed a rulrr e in November 2018 to increase the threshold to $50 billion. Wesbanco is thereforff e, currently not subject to the Federal Reserve Enhanced Prude ntial Standards. rr rr The Dodd-Frank Act made several changes affff eff cting the securitization markets, which may affff eff ct a bank’s abia lity or desire to use those feff deral regulators to adopt regulations requiring the sponsor of a ng or liquidity needs. One of these changes calls forff markets to meet fundi securitization to retain at least 5% of the credit risk, with exceptions forff ff “qualififf ed residential mortgages.” Publicly traded companies are required by the Dodd-Frank Act to give shareholders an advisoryrr vote on executive compensation, and, in some cases, golden parachute arrangements. Further, SEC and Nasdaq rurr lemaking under the Dodd-Frank Act requires Nasdaq-listed companies to have a compensation committee composed entirely of independent directors. Wesbanco’s Compensation Committee members currently satisfyff the independence criteria. The Dodd-Frank Act also called forff regulators to issue new rulrr es relating to incentive-based compensation arrangements deemed excessive, and proxy access by shareholders. The SEC has issued proposed rulrr es relating to excessive compensation arrangements that have not been fiff nalized. All banks and other insured depositoryrr institut tions now have increased authority to open new branches across state lines (discussed aba ove ions to pay interest on certain under “Item 1. Business—Supervision and Regulation”). A provision authorizing insured depositoryr business checking accounts may increase Wesbanco’s interest expense. The Consumer Financial Protection Bureau, a feff deral agency created by the Dodd-Frank Act, has the authority to write rulrr es implementing numerous consumer protection laws appl icabla e to all banks (discussed below under “Item 1. Business—Consumer Protection Laws”). institutt a 10 CORONAVIRUS RELIEF In response to the COVID-19 pandemic, the Coronavirusrr Aid, Relief and Economic Security ("CARES") Act was signed into law on March 27, 2020 to provide national emergency economic relief measures. Many of the CARES Act’s programs are dependent upon the direct ions, such as the Company and the Bank, and have been implemented through rulrr es and guidance adopted involvement of U.S. fiff nancial institutt the Federal Reserve and other feff deral banking agencies, by feff deral departments and agencies, including the U.S. Department of Treasury,r jurisdiction over the Company and the Bank. Furthermore, as the COVID-19 pandemic evolves, feff deral including those with direct supervisoryrr regulatoryr authorities continue to issue additional guidance with respect to the implementation, lifeff cycle, and eligibility requiqq rements forff the various CARES Act programs as well as industry-r specififf c recoveryrr procedures forff COVID-19. Building upon the provisions of the CARES Act, the Economic Aid to Hard-Hit Small Businesses, Nonprofiff ts and Venues Act (“Economic Aid Act”) was signed into law on December 27, 2020. extensions and The Economic Aid Act was draftff ed in response to the continuing effff eff cts of the pandemic on the economy and provided forff amendments to many feff aturt es of the CARES Act. A third measure of coronavirurr s relief was passed by Congress on March 11, 2021, in the foff rm of the American Rescue Plan Act ("ARP Act"). The ARP Act provided forff , extended unemployment benefiff ts and various other fiff nancial benefiff ts to individuals and businesses. In the futff urt e, it is possible that Congress will enact additional COVID-19 response ther amendments to the CARES Act, Economic Aid Act or ARP Act or other new bills comparabla e in scope to these legislation, including furff Acts. The Company continues to assess the impact of these Acts and other statutt es, regulations and supervisoryrr guidance related to the COVID-19 pandemic. additional stimulus funds ff The CARES Act amended the loan program of the U.S. Small Business Administration (the "SBA"), in which the Bank participates, to operational costs of eligible businesses, create a guaranteed, unsecured loan program, the Paycheck Protection Program (“PPP”), to fund organizations and self-ff employed persons dud ring COVID-19. In June 2020, the Paycheck Protection Program Flexibility Act was enacted, which among other things, gave borrowers additional time and flff exibility to use PPP loan proceeds. Shortly thereaftff er, and due to the evolving impact ications on July 6, 2020 and of the COVID-19 pandemic, additional legislation was enacted authorizing the SBA to resume accepting PPP appl a ication deadline to August 8, 2020. The passage of the Economic Aid Act furff extending the PPP appl new pool of availabla e funds under the PPP loan program through March 31, 2021, and among other things, modififf ed the provisions related to ff making PPP loans and the forff giveness of such loans. The Second Draw PPP loan program provides additional assistance to borrowers who previously received a SBA PPP loan under the CARES Act provisions, subject to certain conditions. The passage of the ARP Act in March 2021 a furff ication deadline to May 31, 2021. As a participating lender in the PPP loan and supervisoryr developments related thereto. program, the Bank continues to monitor legislative, regulatory,rr ther added to the pool of availabla e funds ther reauthorized lending, providing forff and extended the appl a a ff ff The CARES Act permitted banks to suspend requirements under GAAP forff loan modififf cations to borrowers affff eff cted by COVID-19 that would otherwise be characterized as troubled debt restrucrr ing ("TDRs") and suspend any determination related thereto if (i) tht e loan modififf cation is made between March 1, 2020 and the earlier of December 31, 2020 or 60 days aftff er the end of the COVID-19 emergency declaration and (ii) the appl r extended the relief granted by the CARES Act forff TDRs by one year to December 31, 2021. The feff deral banking agencies also issued guidance to encourage banks to make loan modififf cations forff borrowers affff eff cted by COVID-19 and to assure banks that they will not be criticized by examiners foff r ying this guidance to qualifyiff ng loan modififf cations. See Note 1 and Note 4 to the “Notes to Consolidated Financial doing so. The Company is appl fuff rther Statements,” which is included in Item 8 “Financial Statements and Supplementaryrr Data” of this Annual Report on Form 10-K forff inforff mation about icabla e loan was not more than 30 days past due as of December 31, 2019. The Economic Aid act furff the COVID-19-related loan modififf cations completed by the company. thet turt a a a The CARES Act encouraged the Federal Reserve, in coordination with the Secretaryrr of the Treasury,rr to establa ish or implement various programs to help midsize businesses, nonprofiff ts, and municipalities. On April 9, 2020, the Federal Reserve proposed the creation of the Main Street Lending Program (“MSLP”) to implement certain of these recommendations. On June 15, 2020, the Federal Reserve Bank of Boston opened the MSLP forff lender registration. The MSLP supports lending to small and medium-sized businesses that were in sound fiff nancial condition beforff e the onset of the COVID-19 pandemic. The passage of the Economic Aid Act in December terminated the MSLP as of Januaryr 8, 2021 and no new loan appl ications could be submitted aftff er December 31, 2020. a Concurrent with the enactment of the CARES Act, regulators issued interim fiff nancial rulrr e (“IFR”) “Regulatoryr Capia tal RulRR e: Revised Transition of the Current Expected Losses Methodology forff Allowances” in response to the disrupt ed economic activity frff om the spread of COVID-19. The IFR provided fiff nancial institutt ions that adopted the Current Expected Credit Losses Accounting Standard ("CECL") during 2020 lowed by a three-year transition period to phase with the option to delay forff out the aggregate amount of the capia tal benefiff t provided by the initial two-year delay (“fiff ve year transition”). Wesbanco adopted CECL effff eff ctive Januaryr 1, 2020 and elected to implement the fiff ve-year transition. Please see Note 21, “Regulatoryrr Matters” forff more inforff mation. two years the estimated impact of CECL on regulatoryr capia tal, folff rr CONSUMER PROTECTION LAWS In connection with its lending and leasing activities, all banks are subject to a number of feff deral and state laws designed to protect consumers and promote lending and other fiff nancial services to various sectors of the economy and population. These laws include the Equal ty Act, the Fair Credit Reporting Act, the Trutrr h in Lending Act (“TILA”), the Trutrr h in Savings Act, the Home Mortgage Credit Opportuni t 11 Disclosure Act, the Real Estate Settlement Procedures Act (“RESPA”), the Electronic Fund Transfeff r Act, and, in some cases, their respective rts. The CFPB has consolidated the authority to write regulations implementing these and other laws. Wesbanco’s other state law counterparr subsidiaries that provide services relating to consumer fiff nancial products and services are subject to the CFPB’s regulations. As an institutt ion forff merly with assets of less than $10 billion, Wesbanco Bank historically had been examined by the FDIC forff compliance with these rulrr es. Through its acquisitions, the Bank’s assets exceeded $10 billion foff r foff ur consecutive quarters, and in 2019 it came under CFPB supervision and to repay, examination. Relating to mortgage lending, the Dodd-Frank Act authorized the CFPB to issue new regulations governing the aba ilitytt qualififf ed mortgages, mortgage servicing, appr aisals and compensation of mortgage lenders, all of which have been issued and have taken effff eff ct. They limit the mortgage products offff eff red by the Bank and have an impact on timely enforff cement of delinquent mortgage loans. a The Dodd-Frank Act also directed the CFPB to integrate the mortgage loan disclosures under TILA and RESPA. The CFPB issued new integrated disclosures rulrr es (“TRID”), which became effff eff ctive October 3, 2015 and have combined the prior good faff ith estimate and trurr th in lending disclosure forff m into a new forff m, the loan estimate. They have also combined the HUD-1 and fiff nal trutrr h in lending disclosure foff rms into a new foff rm, the closing disclosure. The rurr le is extremely complex, contains signififf cant uncertainties as to penalties, some of which can be quite material, contains prohibitions against correcting even technical mistakes, creates uncertainty regarding last minute changes in the transaction covered transactions and most closed-end consumer credit transactions secured and has triggered signififf cant ambiguity in compliance. Thus forff by real property, the TRID rulrr es have presented signififf cant and ongoing challenges to real estate lenders. The CFPB issued an interprrr etive rulrr e in August 2021 providing greater flff exibility under the TRID rulrr es, which helped ease some of the challenges that real estate lenders like the Bank faff ce. The rulrr e, however, relates only to the on-going COVID pandemic. Federal law currently contains extensive customer privacy protection provisions. Under these provisions, a fiff nancial institutt ion must provide to its customers, at the inception of the customer relationship and annually thereaftff er, the institut tion’s policies and procedudd res regarding the handling of customers’ nonpublic personal fiff nancial inforff mation. These provisions also provide that, except forff certain limited exceptions, an institutt ion discloses to the customer that such ion may not provide such personal inforff mation to unaffff iff liated third parties unless the institutt ty to opt out of such disclosure. Federal law makes it a criminal offff eff nse, t inforff mation may be so provided and the customer is given the opportuni except in limited circumstances, to obtain or attempt to obtain customer inforff mation of a fiff nancial naturt e by frff audulent or deceptive means. Community development and compliance with the CRARR are vital and integrated components of the banking business at Wesbanco Bank. Wesbanco is committed to helping our communities thrive and prosper by being a leader in community development. The founda tion of our mental to the success of our company. Wesbanco has proven to be ff values is grounded in our belief that the success of our communities is funda a leader in the community by providing loans, deposits and other banking services that are responsive to the fiff nancial needs of the community. feff deral bank regulatoryr agency, the FDIC, to assess Wesbanco Bank’s record in meeting the credit The CRAR requires Wesbanco Bank’s primaryr needs of the communities served by the bank, including low and moderate-income neighborhoods and persons. Institutt ions are assigned one of “Needs to Improve” or “Substantial Noncompliance.” This assessment is reviewed when a bank ff four appl ion, or to open or relocate a a branch offff iff ce. On December 19, 2019, the FDIC assigned a rating of “Outstanding” forff the Bank’s community development perforff mance foff r the period of October 2016 through July 2019. This is the highest rating awarded by feff deral regulators and the 2019 exam represented the Bank’s the period seventh consecutive “Outstanding” CRARR rating. In 2022, the FDIC commenced an examination of Wesbanco's CRAR perforff mance forff of August 2019 through September 2022, and the results are expected in the fiff rst quarter of 2023. ratings: “Outstanding,” “Satisfaff ctory,”rr ies to merge or consolidate with or acquire the assets or assume the liabia lities of an insured depositoryr institutt ff a Wesbanco Bank received the “America Saves Designation of Savings Excellence forff Banks,” a designation frff om America Saves that recognizes banks that went above and beyond to encourage people to save money during America Saves Week 2022. Wesbanco has been an active participant in America Saves Week since its inception in 2007 and this was Wesbanco’s seventh consecutive designation foff r savings excellence. The Wesbanco Bank Community Development Corpor ation (“Wesbanco CDC”), an affff iff liate of Wesbanco Inc., was nationally recognized by the American Bankers Association Foundation ("ABA Foundation") with a Community Commitment Award. In recognition of its strong perforff mance and outreach, the ABA Foundation recognized Wesbanco CDC's New Markets Loan Program as the winner of the allocations of New Markets Tax Credits, leveraging Community and Economic Development category.rr The Wesbanco CDC has received four those funds the benefiff t of businesses located in low-income, distressed communities, and ff creating over 6,200 jobs. to make over 219 loans totaling over $167 million forff ff rr 12 a ications forff To achieve this level of success, in addition to providing a wide variety of conventional loan and deposit produd cts, the Bank partners with a number of governmental and non-profiff t agencies to provide special programs to assist customers, especially low- and moderate-income customers, achieve their fiff nancial goals. For example, Wesbanco Bank leverages its membership in the Federal Home Loan Bank to sponsor non-profiff t organizations and developers of affff orff dabla e housing, assistance through the First Affff orff dabla e Housing Program grant appl Front Door down payment program, Banking on Business loans forff conventional bank fiff nancing, and loans through the Community Lending Program. Additionally, Wesbanco has developed its own loan and deposit products to provide fiff nancing and savings options with innovative and flff exible terms to meet identififf ed needs. Wesbanco has also been a leader in providing community development lending within its CRAR assessment areas. In the past fiff ve years, the Bank originated over $1.9 billion in community development loans, returt ning credit and capia tal to communities throughout our foff otprt community development program is its commitment of time and resources to the communities it serves. Employees provide thousands of hours of technical assistance or fiff nancial education to organizations and agencies that promote community development and Wesbanco has deployed hundreds of thousands of dollars in philanthropic donations to worthy organizations serving local communities throughout its foot int. At the heart of Wesbanco Bank’s successfulff small businesses that may not be appr oved forff int. prt a ff The three primaryrr banking regulators continue to prioritize CRAR modernization in their respective regulatoryrr agendas and have committed to working together to issue a joint interagency proposal, which is likely to be released in 2023. SECURITIES REGULATION Wesbanco’s fulff l service broker-dealer subsidiary,r Wesbanco Securities, is registered as a broker-dealer with the SEC and in the states in which it does business. Wesbanco Securities also is a member of FINRARR . Wesbanco Securities is subject to regulation by the SEC, FINRARR and the securities administrators of the states in which it is registered. Wesbanco Securities is a member of the SIPC, which in the event of the liquidation of a broker-dealer, provides protection forff each eligible customer, subject to a limitation of $250,000 forff customers’ securities accounts held by Wesbanco Securities of up to $500,000 forff cash balances. claims forff In addition, Wesbanco Bank’s Investment Department serves as an investment adviser to a faff mily of mutuat l funds ff and is registered as an investment adviser with the SEC and in some states. On September 10, 2019, the SEC adopted a new rurr le, Regulation Best Interest, which estaba lishes a standard of condud ct foff r broker-dealers when they make a recommendation to a retail customer of any securities transaction or investment strategy involving securities. Regulation Best Interest enhances the broker-dealer standard of conduct beyond existing suitaba ility obligations, and aligns the standard of conduct with retail customers’ reasonabla e expectations by requiring broker-dealers, among other things, to: act in the best interest of the retail customer at the time the recommendation is made, without placing the fiff nancial or other interest of the broker-dealer ahead of the interests of the retail customer; and ly and address conflff icts of interest by establa ishing, maintaining, and enforff cing policies and procedures reasonabla y designed to identifyff and fulff conflff icts of interest, and in instances where we have determined that disclosure is insuffff iff cient to reasonabla y faff irly disclose material faff cts about address the conflff ict, to mitigate or, in certain instances, eliminate the conflff ict. The effff eff ctive date forff implementation of tht e new rurr le was June 30, 2020. a On December 22, 2020, the SEC adopted a new rulrr e to govern investment adviser advertisements and payments to solicitors. The rurr le replaces the current advertising rulrr e’s broadly drawn limitations with principles-based provisions designed to accommodate the continual evolution and interplrr ay of technology and advice, and includes tailored requirements forff certain types of advertisements. For example, the rurr le requires advisers to standardize certain parts of a perforff mance presentation in order to help investors evaluate and compare investment certain types of perforff mance presentations. Advertisements that include tht ird-party ratings opportuni are required to include specififf c disclosures to prevent them frff om being misleading. The rurr le also permits the use of testimonials and endorsements, which include traditional refeff rral and solicitation activity, subject to certain conditions. ties, and includes tailored requirements forff t THE USA PATRIOT AND BANK SECRECY ACT y certain requirements of the USA Patriot Act to fiff nancial institutt The USA PATRIOT Act of 2001 (the “USA Patriot Act”) imposes signififf cant compliance and due diligence obligations, material penalties, extra-territorial jurisdiction of the United States. The U.S. Treasuryr Department has issued various implementing regulations, and provides forff ions, such as Wesbanco Bank and Wesbanco’s broker-dealer which appl a opriate policies, procedures and controls to detect, ions to maintain appr subsidiary.r These regulations impose obligations on fiff nancial institutt prevent and report money laundering and terrorist fiff nancing, to verifyff the identity of their customers, including benefiff cial owners, and to report suspicious activities and currency transactions of a certain size. Failure of Wesbanco and its subsidiaries to maintain and implement adequate programs to combat money laundering and terrorist fiff nancing, or to comply with all of the relevant laws or regulations, could have serious legal and reputational consequences forff Wesbanco and its subsidiaries. a 13 ITEM 1A. RISK FACTORS The risks described below are not the only ones we faff ce in our business. Additional risks and uncertainties not presently known to us or lowing risks occur, our business, fiff nancial that we currently believe to be immaterial may also impair our business operations. If any of the folff condition or operating results could be materially harmed. RISKS RELATED TO THE ECONOMY AND OTHER EXTERNAL FACTORS, INCLUDING REGULATION , CLIMATE CHANGE MANIFESTING AS PHYSICAL OR TRARR NSITION RISKS COULD ADVERSELY AFFECT OUR OPERARR TIONS, BUSINESSES AND CUSTOMERS. There is an increasing concern over the risks of climate change and related environmental sustainabia lity matters. The physical risks of climate change include discrete events, such as flff ooding and wildfiff res, and longer-term shiftff s in climate patternr s, such as extreme heat, sea level our operations or those of our customers or third parties on which we rise, and more frff equent and prolonged drought. Such events could disrupt ion and market volatility. Additionally, transitioning rely, including through direct damage to assets and indirect impacts frff om supply chain disrupt economy may entail extensive policy, legal, technology and market initiatives. Transition risks, including changes in consumer to a low-carbonr prefeff rences and additional regulatoryrr requirements or taxes, could increase our expenses and undermine our strategies. In addition, our reputation and client relationships may be damaged as a result of our practices related to climate change, including our involvement, or our clients’ involvement, in certain industries or projects associated with causing or exacerbar ting climate change, as well as any decisions we make to continue to conduct or change our activities in response to considerations relating to climate change. As climate risk is interconnected with many key risk types, we have developed and continue to enhance processes to embed climate risk considerations into our risk management strategies establa ished forff risks such as market, credit and operational risks; however, because the timing and severity of climate change may not be predictabla e, our risk management strategies may not be effff eff ctive in mitigating climate risk exposure. rr rr GLOBAL PANDEMICS COULD ADVERSELY AFFECT THE OPERARR TIONS OF US AND OUR CUSTOMERS. The spread of global pandemics could create a global public-health crisis, as previously seen with that of the COVID-19 pandemic, that can result in widespread volatility and deteriorations in household, business, economic, and market conditions. Pandemics can cause many state governments to enact social distancing requirements, which could adversely impact the economy due to the vast restrictions and forff ced closures of non-essential businesses during the quarantine periods. As a result, many of our customers would be adversely affff eff cted by business closures, staffff iff ng issues and/dd or other business restrictions. Accordingly, global pandemics may result in a signififf cant decrease in our customers’ business and/or cause our customers to be unabla e to meet existing payment or other obligations to us. These adverse impacts on the businesses of our customers could cause a material adverse effff eff ct to our business, fiff nancial condition, and results of operations. ECONOMIC CONDITIONS IN WESBANCO’S MARKET AREAS COULD NEGATIVELY IMPACT EARNINGS. Wesbanco Bank serves both individuals and business customers primarily throughout West Virginia, Ohio, western Pennsylvania, Kentuct ky, Indiana, Marylrr and, northern Virginia and central Tennessee. The substantial maja ority of Wesbanco’s loan portfolff io is to individuals and businesses in these markets. As a result, the fiff nancial condition, results of operations and cash flff ows of Wesbanco are affff eff cted by local and regional economic conditions, as well as national economic conditions. A downturt n in these economies could have a negative impact on Wesbanco and the aba ility of the Bank’s customers to repay their loans. The value of the collateral securing loans to borrowers may also decline as the economy declines. As a result, deteriorating economic conditions in these markets could cause a decline in the overall quqq ality of Wesbanco’s loan portfolff credit losses. A decline io requiring Wesbanco to charge-offff a higher percentage of loans and/or increase its allowance forff in economic conditions in these markets may also forff ce customers to utilize deposits held by Wesbanco Bank in order to pay current expenses causing the Bank’s deposit base to shrink. As a result, the Bank may have to borrow funds at higher rates in order to meet liquidity needs. Volatility in oil and gas prices may impact shale gas activity in West Virginia, Ohio and Pennsylvania, which may somewhat negatively impact local and regional economic conditions, affff eff cting both commercial and retail customers, resulting in potentially lower oil and gas related royalty deposits and potential credit deterioration in the loan portfolff io. ff WESBANCO COULD BE ADVERSELY AFFECTED BY CHANGES TO THE FISCAL, POLITICAL AND OTHER FEDERARR L POLICIES. Changes in general economic or political policies in the United States or other regions could adversely impact Wesbanco’s business as well as the Bank’s customers. The current United States administration has indicated that it may propose signififf cant changes with respect to a variety ate of issues, including international trade agreements, import and export regulations, tariffff sff and customs duties, forff eign relations, tax laws, corpor governance laws and corpor l economy standards, that could have a positive or negative impact on Wesbanco’s business and the Bank’s customers including those in the wholesale and distribution, manufaff cturt ing and retail industries. ate fueff rr rr 14 WESBANCO IS SUBJECT TO EXTENSIVE GOVERNMENT REGULATION AND SUPERVR ISION. ff , feff deral deposit insurance funds and the banking system as a whole, rather than corpor Wesbanco is subu jb ect to extensive feff deral and state regulation, supu ervision and examination. Banking regulations are primarily intended to ff ate shareholders. These regulations protect depositors’ funds turt e, investment practices, dividend policy, operations and growth, among other things. These affff eff ct Wesbanco’s lending practices, capia tal strucrr opriate policies, procedure and controls. Congress and feff deral regulatoryrr agencies continually a regulations also impose obligations to maintain appr review banking laws, regulations and policies forff possible changes. Changes to statutt es, regulations or regulatoryr policies, including changes in interprr retation or implementation of statut tes, regulations or policies, could affff eff ct Wesbanco in subu stantial and unpredictaba le ways. Such changes could subject Wesbanco to additional costs, limit the types of fiff nancial services and products that could be offff eff red, and/or increase the aba ility of non-banks to offff eff r competing fiff nancial services and products, among other things. Failure to comply with laws, regulations or policies could result in sanctions by regulatoryr agencies, civil penalties and/dd or reputation damage, which could have a material adverse effff eff ct on Wesbanco’s business, fiff nancial condition and result of operations. rr As of December 31, 2022, Wesbanco had $133.5 million in junior subordinated debt presented as a separate categoryrr of long-term debt on t Prefeff rred Securities totaling $130.0 million underlying such junior subordinated its Consolidated Balance Sheets. For regulatoryrr purpos reporting requirements prior to December 31, 2019. RuRR les issued debt were previously included in Tier 1 capia tal in accordance with regulatoryr t prefeff rred securities frff om Tier 1 capia tal beginning in 2015. A grandfaff ther provision permitted bank holding in 2013 generally exclude trusrr companies with consolidated assets of less than $15 billion to continue counting existing trusrr ity. As of December 31, 2019, Wesbanco’s assets were greater than $15 billion; thereforff e, all such securities are no longer counted as Tier 1 capa ital but instead are counted as Tier 2 capia tal subject to limits. t prefeff rred securities as Tier 1 capia tal until maturt es, Trusrr rr In addition, international capia tal standards known as Basel III, which were implemented by a U.S. feff deral banking agencies’ joint fiff nal rurr le icabla e to Wesbanco and the Bank, these changes in capia tal requirements are described aba ove in “Item 1. issued in July 2013, and effff eff ctive Januaryr 1, 2015, furff which may negatively impact both entities. Additional inforff mation about Business—Capia tal Requirements.” ther increase the minimum capia tal requirements appl a a t Regulation of Wesbanco and its subu sidiaries is expected to continue to expand in scope and complexity in the fuff tut re. These laws are expected to have the effff eff ct of increasing Wesbanco’s costs of operating and reducing its revenues, and may limit its abia lity to pursue business opportuni ties or otherwise adversely affff eff ct its business and fiff nancial condition. The Dodd-Frank Act and other laws, as well as rulrr es implementing or related to them, may adversely affff eff ct Wesbanco. Specififf cally, any governmental or regulatoryr action having the effff eff ct of requqq iring Wesbanco to obtain additional capia tal or increase short-term liquidity could reduce earnings and have a material dilutive effff eff ct on current shareholders, including the Dodd-Frank Act source of strength requirement that bank holding companies make capia tal infusff ions into a troubled subu sidiaryr bank. Legislation and regulation of debit card feff es, credit cards and other bank services, as well as changes in Wesbanco’s practices relating to those and other bank services, may affff eff ct Wesbanco’s revenue and other fiff nancial results. Additional inforff mation about increased regulation is provided in “Item 1. Business” under the headings “Supervision and Regulation,” “Holding Company Regulations,” “Capia tal Requirements,” “Dodd-Frank Act,” and “Consumer Protection Laws.” a SEVERE WEATHER, NATURARR L DISASTERS, DISEASE PANDEMICS, ACTS OF WAR OR TERRORISM, INTERNATIONAL HOSTILITIES, DOMESTIC CIVIL UNREST AND OTHER EXTERNAL EVENTS COULD SIGNIFICANTLY ADVERSELY IMPACT WESBANCO’S BUSINESS. The unpredictabla e naturt e of events such as severe weather, naturt al disasters, disease pandemics, acts of war or terrorism, internr ational hostilities, domestic civil unrest and other adverse external events could have a signififf cant impact on Wesbanco’s aba ility to conduct business. If any of our fiff nancial, accounting, network or other inforff mation processing systems faff il or have other signififf cant shortcomings dudd e to externrr al events, Wesbanco could be materially adversely affff eff cted. Third parties with which Wesbanco does business could also be sources of operational risk to Wesbanco, including the risk that the third parties’ own network and inforff mation processing systems could faff il. Any of these occurrences could materially diminish Wesbanco’s abia lity to operate or result in potential liabia lity to customers, reputational damage, and regulatoryrr intervention, any of which could materially adversely affff eff ct Wesbanco. Such events could affff eff ct the stabia lity of Wesbanco’s deposit base, impair the abia lity of borrowers to repay outstanding loans, impair the value of collateral securing loans, impair Wesbanco’s liquidity, result in loss of revenue, and/or cause Wesbanco to incur additional expenses. 15 THE SOUNDNESS OF OTHER FINANCIAL INSTITUTIONS COULD ADVERSELY IMPACT WESBANCO. ions are interrelated as a result of trading, clearing, counterparr Financial service institutt to various industries and counterparr brokers and dealers, commercial banks, investment banks, mutuat defaff ult by, a fiff nancial institutt transactions could expose Wesbanco to credit risk in the event of defaff ult of our counterparr affff eff ct our business, fiff nancial condition, and results of operations. l and hedge funds ff rties, and Wesbanco routinely executes transactions with counterparr rty, or other relationships. Wesbanco has exposure rties in the fiff nancial indudd stryrr , including ions. As a result, a defaff ult by, or potential ion defaff ults. Many of these rty or client. These losses or defaff ults could adversely ion could result in market-wide liquidity problems, losses or other fiff nancial institutt and other institutt CURRENT MARKET INTEREST RARR TES AND COST OF FUNDS MAY NEGATIVELY IMPACT WESBANCO’S BANKING BUSINESS. Fluctuat tions in interest rates may negatively impact the business of the Bank. The Bank’s main source of income frff om operations is net interest income, which is equal to the diffff eff rence between the interest income received on interest-bearing assets (usually loans and investment securities) and the interest expense incurred in connection with interest-bearing liabia lities (usually deposits and borrowings). These rates are highly sensitive to many faff ctors beyond Wesbanco’s control, including general economic conditions, both domestic and forff eign, and the monetaryr and fiff scal policies of various governmental and regulatoryrr authorities. Wesbanco Bank’s net interest income can be affff eff cted signififf cantly by changes in market interest rates and the shapa e of the yield curve. Changes in relative interest rates may redud ce the Bank’s net interest income as the diffff eff rence between interest income and interest expense decreases. As a result, the Bank has adopted asset and liabia lity manaaa gement policies ity of loans, to minimize the potential adverse effff eff cts of changes in interest rates on net interest income, primarily by altering the mix and maturt ng sources. However, even with these policies in place and with an asset-sensitive balance sheet at year-end that should investments and fundi benefiff t net interest income as interest rates increase, Wesbanco cannot be certain that changes in interest rates or the shapea of the interest rate yield curve will not negatively impact its results of operations or fiff nancial position. The increase in interest rates in 2022 caused a decrease in the faff ir value of securities within our investment portfolff io of which the unrealized losses were recorded in other comprehensive income. ff In a period of rising rates with a relatively flff at or inverted yield curve environment, Wesbanco’s cost of fuff nds foff r banking operations may may also increase as a result of futff urt e general economic conditions, increase at a faff ster pace than loan and investment yields. The cost of funds principally through deposits and borrowings frff om the Federal ff interest rates and competitive pressures. The Bank has traditionally obtained funds r source of Home Loan Bank (FHLB), correspondent banks, and other wholesale borrowing sources. As a general matter, deposits are a cheapea funds borrowings. If,ff as a result of general ff economic conditions, market interest rates, competitive pressures or higher deposit betas in relation to increases in feff deral fuff nds rate increases, the value of deposits at the Bank decreases relative to its overall banking operations, the Bank may have to rely more heavily on borrowings as a source of funds deposits are typically less than interest rates charged forff than borrowings because interest rates paid forff in the futff urt e. ff ff INTEREST RARR TES ON WESBANCO’S OUTSTANDING FINANCIAL INSTRUMENTS MIGHT BE SUBJECT TO CHANGE BASED ON THE REPLACEMENT OF LIBOR. rr London Interbar nk Offff eff red Rate (“LIBOR”) and certain other “benchmarks” are the subject of recent national, international, and other regulatoryr guidance and proposals forff reforff m. These reforff ms may cause such benchmarks to become unavailabla e, to perforff m diffff eff rently than in the past or have other consequences, which cannot be predicted. On July 27, 2017, the United Kingdom’s Financial Conduct Authority ("FCA"), which regulates LIBOR, publicly announced that it intended to stop persuading or compelling banks to submit LIBOR rates aftff er 2021. The Federal Reserve Board has identififf ed the Secured Overnight Financing Rate (“SOFR”) as the prefeff rred refeff rence rate alternative to LIBOR forff es. Once LIBOR is discontinued, if the proposed replacement rate forff LIBOR diffff eff rs materially frff om loan pricing and hedge accounting purpos LIBOR, interest rates on our flff oating rate obligations, loans, deposits, derivatives, and other fiff nancial instrumrr ents tied to LIBOR rates, as well as the revenue and expenses associated with those fiff nancial instrumrr ents, may be adversely affff eff cted. Further, any uncertainty regarding the continued use and reliabia lity of LIBOR as a benchmark interest rate could adversely affff eff ct the value of our flff oating rate obligations, loans, deposits, derivatives, and other fiff nancial instrumrr ents tied to LIBOR rates. On March 5, 2021, the U.K. FCA and Intercontinental Exchange (“ICE”) Benchmark Administration announced that the publication of the overnight, as well as, the one, three, six, and twelve month LIBOR rates will continue to be published through June 30, 2023. On October 20, 2021, the Federal Reserve Board, the Offff iff ce of the Comptroller of the Currency ("OCC"), and the Federal Deposit Insurance Corpor ation along with the Consumer Financial Protection Bureau, National Credit Union Administration, and State Bank and Credit Union Regulators, issued an additional Joint Statement on Managing the LIBOR Transition to once again emphasize the expectation that supervised institutt ions with LIBOR exposure continue to progress toward an orderly transition away frff om LIBOR. The statement confiff rmed that entering into new contracts, including derivatives that use LIBOR as a refeff rence rate aftff er December 31, 2021, would create safeff ty and soundness risks, including litigation, operational, and consumer protection risks. On March 15, 2022, President Biden signed the Adjustabla e Interest Rate (LIBOR) Act into law (the “LIBOR Act”). The LIBOR Act provides a clear and uniforff m feff deral solution forff l provisions addressing the permanent cessation of LIBOR by providing forff transitioning legacy contracts that either lack or contain insuffff iff cient contractuat the transition frff om LIBOR to a replacement rate and avoiding related litigation. rr 16 ied in a timely manner or is incorrectly appl Transitioning frff om LIBOR to alternative rates also may result in operational errors during the transition such that the replacement rate is given the volume of contracts that will requiqq re transition and the a not appl oaches to transition and given the possibility that the period during which the transition will need to take place may diversity of potential appr ly implement transition frff om LIBOR to alternative rates could result in regulatoryrr have a short duration. Similarly, our faff ilure to successfulff scrutrr sanctions. It is also possible that LIBOR quotes will become unavailabla e prior to the currently anticipated cessation dates. In that case, the risks associated with the transition to an alternative refeff rence rate will be accelerated and magnififf ed. These risks may also be increased due to the shorter time forff iny and actions by our regulators including fiff nes and other supervisoryr ied. This is particularly truerr the transition. preparing forff a a SIGNIFICANT DECLINES IN U.S. AND GLOBAL MARKETS COULD HAVE A NEGATIVE IMPACT ON WESBANCO’S EARNINGS. rr city forff The capia tal and credit markets could experience extreme disrupt ion. These conditions result in less liquidity, greater volatility, widening of credit spreads and a lack of price transparency in certain asset types. In many cases, markets could exert downward pressure on stock prices, security prices and credit capaa certain issuers without regard to those issuers’ underlying fiff nancial strength. Sustained weakness in business and economic conditions in any or all of the domestic or forff eign fiff nancial markets could result in credit deterioration in investment securities ence of reliabla e held by us, rating agency downgrades forff pricing inforff mation or unanticipated changes in the competitive market) could result in us having to recognize other-than-temporaryrr impairment in the value of such investment securities, with a corresponding charge against earnings. Furthermore, our pension assets are primarily invested in equity and debt securities, and weakness in capia tal and credit markets could result in deterioration of these assets, and changes in certain key rial assumptions may increase minimum pension assumptions based on current interest rates, long-term rates of returt n and other economic or actuat fundi ther, these conditions may be material to Wesbanco’s ff abia lity to access capia tal and may adversely impact results of operations. ng contributions and futff urt e pension expense. If these markets were to deteriorate furff such securities or other market faff ctors that (such as lack of liquidity forff re-sales, absa Further, Wesbanco’s trusrr t and investment services income could be impacted by flff uctuat ios. If the values of those investment portfolff tions in the securities market. A portion of this ios decline, the Bank’s revenue revenue is based on the value of the underlying investment portfolff could be negatively impacted. Inflff ation can also have a signififf cant effff eff ct upon interest rates and ultimately upon fiff nancial perforff mance. Wesbanco’s abia lity to cope with inflff ation and to respond to changing market interest rates, as well as its abia lity to manage the various elements of non-interest income and expense durd ing periods of increasing or decreasing inflff ation could have a signififf cant impact on profiff tabia lity. Wesbanco monitors the level and mix of interest-rate sensitive assets and liabia lities through its Asset/tt Liabia lity Committee ("ALCO") in order to reduce the impact of inflff ation on net interest income. Management may not be abla e to control the effff eff cts of inflff ation as needed and the results may adversely impact results of operations. A HIGH PERCENTAGE OF WESBANCO’S LOAN PORTFOLIO IS IN WEST VIRGINIA, OHIO, PENNSYLVANIA, KENTUCKYKK , INDIANA, MARYR LAND, VIRGINIA AND TENNESSEE AND IN COMMERCIAL AND RESIDENTIAL REAL ESTATE. DETERIORARR TIONS IN ECONOMIC CONDITIONS IN THIS AREA OR IN THE REAL ESTATE MARKET GENERARR LLY COULD BE MORE HARMFUL TO THE COMPANY COMPARED TO MORE DIVERSIFIED INSTITUTIONS. As of December 31, 2022, appr comprised of commercial real estate loans. a oximately 20% of Wesbanco’s loan portfolff io was comprised of residential real estate loans, and 57% was Inherent risks of commercial real estate (“CRE”) lending include the cyclical natut re of the real estate market, construrr ction risk and interest rate risk. The cyclical naturt e of real estate markets can cause CRE loans to suffff eff r considerabla e distress. During these times of distress, a property’s perforff mance can be negatively affff eff cted by tenants’ deteriorating credit strength and lease expirations in times of softff ening demand caused by economic deterioration or over-supply conditions. Even if borrowers are abla e to meet their payment obligations, they may fiff nd it diffff iff cult to refiff nance their fulff ity due to declines in property value. Other risks associated with CRE lending include regulatoryr changes and environmental liabia lity. Regulatoryrr changes in tax legislation, zoning or similar external conditions including environmental liaba ility may affff eff ct property values and the economic feff asibility of existing and proposed real estate projects. l loan amounts at maturt io is situat The Company’s CRE loan portfolff io is concentrated predominantly in West Virginia, Ohio, Pennsylvania, Kentuct ky, Indiana, Marylr and, northern Virginia and Tennessee. There is a wide variety of economic conditions within the local markets of the six states in which most of the company’s CRE loan portfolff ted. Rates of employment, consumer loan demand, household forff mation, and the level of economic activity can varyr widely frff om state to state and among metropolitan areas, cities and towns. Metropolitan markets comprise various submarkets where c feff aturt es, transportation, recreation, local property values and demand can be affff eff cted by many faff ctors, such as demographa development. government, school systems, utility infrff astrucrr As a result of the high concentration of the company’s loan portfolff ions, to futff urt e disrupt ions in and deterioration of this market, which could lead to losses, which could have a material adverse effff eff ct on the business, fiff nancial condition and results of operations of the company. turt e, tax burden, building-stock age, zoning and building codes, and availabla e land forff io, it may be more sensitive, as compared to more diversififf ed institutt ic makeup, geographi a rr 17 RISKS INHERENT IN MUNICIPAL BONDS COULD HAVE A NEGATIVE IMPACT ON WESBANCO’S EARNINGS. a As of December 31, 2022, appr oximately 34% of Wesbanco’s total securities portfolff io was invested in municipal bonds. Although io is broadly spread across the U.S., any downturt n in the economy of a state or municipality in which Wesbanco Wesbanco’s municipal portfolff holds municipal obligations could increase the defaff ult risk of the respective debt. In addition, a portion of Wesbanco’s municipal portfolff io is comprised of Build America bonds. Due to the government sequester reducing the interest subsidy that the government provides to the issuing municipalities, extraordinaryrr redemption provisions ("ERP") may be executed by the municipality if it is in their faff vor to do so. There is a risk that when an ERP is executed, Wesbanco may not recover its amortized cost in the bond if it was purchased at a premium. Credit risks are also prevalent when downgrades of credit ratings are issued by maja or credit rating agencies, which are caused by creditworthiness issues of both bond insurers and the municipality itself.ff Credit rating downgrades to a non-investment grade level may forff ce Wesbanco to sell a municipal bond at a io price where amortized cost may not be recovered. Rising interest rates could also cause the current market values of our municipal bond portfolff to decline as they all have a fiff xed interest component. Any of the above defaff ult risks, early redemption risks and credit risks could cause Wesbanco to take impairment charges, which could be signififf cant, that would negatively impact earnings. a RISKS RELATED TO THE BUSINESS OF BANKING CUSTOMERS MAY DEFAULT ON THE REPAYMENT OF LOANS, WHICH COULD SIGNIFICANTLY IMPACT RESULTS OF OPERARR TIONS THROUGH INCREASES IN THE PROVISION AND ALLOWANCE FOR CREDIT LOSSES. The Bank’s customers may defaff ult on the repayment of loans, which may negatively impact Wesbanco’s earnings dud e to loss of princnn ipal and interest income. Increased operating expenses may result frff om the allocation of management time and resources to the collection and work- out of the loan. Collection effff orff causing Wesbanco to write offff the loan or repossess the collateral securing the loan, which may or may not exceed the balance of the loan. ts may or may not be successfulff HIGHER FDIC DEPOSIT INSURARR NCE PREMIUMS AND ASSESSMENTS COULD ADVERSELY AFFECT WESBANCO’S FINANCIAL CONDITION. Since crossing over $10 billion in total assets in 2018, Wesbanco Bank’s FDIC insurance premiums have increased due to a higher assessment rate based on a more complex calculation that includes Wesbanco Bank’s CAMELS ratings, its abia lity to withstand asset-related and fundi ther increase, it would negatively impact ff Wesbanco’s earnings. ng-related stress and potential loss severity of its assets. If premium assessment rates were to furff RISKS RELATED TO ESTIMATES AND ASSUMPTIONS CECL COULD RESULT IN SIGNIFICANT VOLATILITY OF THE ESTIMATION OF CREDIT LOSSES AND MAY HAVE A MATERIAL IMPACT ON OUR FINANCIAL CONDITION OR RESULTS OF OPERARR TIONS. In September 2016, the Financial Accounting Standards Board (“FASB”) issued an accounting standard update, ASU 2016-13 (Topic 326), ents,” which was adopted by Wesbanco as of Januaryrr 1, 2020 and replaced the foff rmer “Measurement of Credit Losses on Financial Instrumrr recognizing credit losses with an “expected loss” model refeff rred to as the CECL model. Under the CECL model, we “incurred loss” model forff ity debt securities, at are required to present certain fiff nancial assets carried at amortized cost, such as loans held forff the net amount expected to be collected. The allowance forff credit losses under CECL is calculated utilizing the PD / LGD, which is then discounted to net present value. PD is the probaba ility the asset will defaff ult within a given time frff ame and LGD is the percentage of the asset not expected to be collected due to defaff ult. The primaryrr macroeconomic drivers of the quantitative model include forff ecasts of national unemployment and interest rates, as well as modeling adjustments forff io mix, concentrations and loan credit losses. Any material increase in our growth. Any changes in the model inputs may create more volatility in the level of our allowance forff credit losses could adversely credit losses or expenses incurred to determine the appr level of allowance forff affff eff ct our business, fiff nancial condition and results of operations. changes in prepayment speeds, loan risk grades, portfolff opriate level of the allowance forff investment and held-to-maturt a Wesbanco’s regulatoryrr agencies (FDIC and WVDIF forff Wesbanco Bank, Inc. and the Federal Reserve forff Wesbanco, Inc.) periodically credit losses. The regulatoryr agencies’ interprrr etations may diffff eff r frff om Wesbanco’s interprrr etations. These diffff eff rences review the allowance forff could negatively impact Wesbanco’s results of operations or fiff nancial position. WESBANCO MAY BE REQUIRED TO WRITE DOWN GOODWILL AND OTHER INTANGIBLE ASSETS, CAUSING ITS FINANCIAL CONDITION AND RESULTS TO BE NEGATIVELY AFFECTED. When Wesbanco acquires a business, a portion of the purchase price of the acquisition is allocated to goodwill and other identififf aba le intangible assets. The amount of the purchase price which is allocated to goodwill and other intangible assets is determined by the excess of the purchase price over the net identififf abla e assets acquired. Wesbanco’s goodwill was appr oximately $1.1 billion or 45% and $1.1 billion or 41% of stockholders’ equity as of December 31, 2022 and 2021, respectively. Under current accounting standards, if Wesbanco determines that goodwill a 18 or intangible assets are impaired, it is required to write down the carryir ng value of these assets. Wesbanco conducts an annual review to determine whether goodwill and other identififf abla e intangible assets are impaired. Wesbanco completed such an impairment analysis in late 2022 and concluded that no impairment charge was necessaryr the year ended December 31, 2022. Wesbanco cannot provide assurance that it will not be required to take an impairment charge in the futff urt e. Any impairment charge would have a negative effff eff ct on its shareholders’ equity and fiff nancial results and may cause a decline in our stock price. forff OPERARR TIONAL RISKS DUE TO INCREASED COMPETITION, WESBANCO MAY NOT BE ABLE TO ATTRARR CT AND RETAIN BANKING CUSTOMERS AT CURRENT LEVELS. Wesbanco operates in a highly competitive banking and fiff nancial indud stryr that could become even more competitive as a result of legislative, regulatoryr and technological changes. Wesbanco faff ces banking competition in all the markets it serves frff om the folff lowing: • • • • • • • • • local, regional and national banks; savings and loans; internet banks; credit unions; payday lenders and money services businesses; fiff nance companies; online trading and robo-advisors; fiff nancial technology companies and other non-bank lenders; and brokerage fiff rms serving Wesbanco’s market areas. r ocurrency, which may cause current and potential customers to choose those institutt In particular, Wesbanco’s competitors include several maja or national fiff nancial companies whose greater resources may affff orff d them a marketpt lace advantage by enaba ling them to maintain numerous banking locations and mount extensive promotional and advertising campaigns. ions may have products and services not offff eff red by Wesbanco such as new payment system Additionally, banks and other fiff nancial institutt technologies and crypt ions. Areas of competition include ts to obtain deposits and range and quality of services provided. Competitively priced deposits frff om interest rates forff other banks may cause a loss of deposits to be replaced by more expensive wholesale fundi ng. Wesbanco also faff ces competition frff om fiff nancial technology (“FinTech”) companies, who may more effff iff ciently underwrite and close small business and consumer loans as well as more quickly and effff iff ciently open deposit accounts. In addition to providing products and services traditionally offff eff red by banks, some FinTech companies bank intermediaries. This could result in the loss of revenue frff om allow customers to complete fiff nancial transactions without the need forff transaction feff es and feff wer customer accounts. If Wesbanco is unabla e to attract new and retain current customers, loan and deposit growth could decrease, causing Wesbanco’s results of operations and fiff nancial condition to be negatively impacted. loans and deposits, effff orff ff WESBANCO MAY NOT BE ABLE TO EXPAND ITS TRUST AND INVESTMENT SERVR ICES SEGMENT AND RETAIN ITS CURRENT CUSTOMERS. Wesbanco may not be abla e to attract new and retain current investment management clients due to competition frff om the folff lowing: • • • • • • commercial banks and trusrr t companies; mutuat l fundff companies; investment advisoryrr fiff rms; law fiff rms; brokerage fiff rms; and other fiff nancial services companies. Its abia lity to successfulff ly attract and retain investment management clients is dependent upon its abia lity to compete with competitors’ investment products, level of investment perforff mance, client services and marketing and distribution capaa bia lities. Due to changes in economic t and investment services segment may be negatively impacted by the fiff nancial markets in which conditions, the perforff mance of the trusrr investment clients’ assets are invested, causing clients to seek other alternative investment options. If Wesbanco is not successfulff , its results frff om operations and fiff nancial position may be negatively impacted. 19 FUTURE EXPANSION BY WESBANCO MAY ADVERSELY AFFECT OUR FINANCIAL CONDITION AND RESULTS OF OPERARR TIONS AS WELL AS DILUTE THE INTERESTS OF OUR SHAREHOLDERS AND NEGATIVELY AFFECT THE PRICE OF OUR COMMON STOCK. Wesbanco may acquire other fiff nancial institut tions, or branches or assets of other fiff nancial institut tions, in the fuff tut re. Wesbanco may also open new branches and enter into new lines of business or offff eff r new products or services. Any such expansion of our business will involve a number of expenses and risks, which may include: • • • • • • • • • • • the time and expense associated with identifyiff ng and evaluating potential expansions; the potential inaccuracy of estimates and judgments used to evaluate credit, operations, management and market risk with respect to target institutt ions; the time and costs of evaluating new markets, hiring local management and opening new offff iff ces, and the delay between commencing these activities and the generation of profiff ts frff om the expansion; the risk we could discover undisclosed liabia lities resulting frff om any acquisitions forff which we may become responsible; our fiff nancing of the expansion; the diversion of management’s attention to the negotiation of a transaction and the integration of the operations and personnel of the combining businesses; entryr into unfaff miliar markets; the introduction of new products and services into our existing business; the incurrence and possible impairment of goodwill associated with an acquisition and possible adverse short-term effff eff cts on our results of operations; the risk that benefiff ts such as enhanced earnings that we anticipate frff om any new acquisitions may not develop and futff urt e results of the combined companies may be materially lower frff om those estimated; and the risk of loss of key employees and customers. We can give no assurance that integration effff orff ly integrate futff urt e acquisitions could have a material adverse effff eff ct on our business, fiff nancial condition or results of operations. In addition, we may issue equity securities in connection with acquisitions, which could dilute the economic and voting interests of our existing shareholders. any futff urt e acquisitions will be successfulff . Our inabia lity to successfulff ts forff No assurance can be given that Wesbanco will be successfulff . The risks associated with entering into a new market and any inaba ility to overcome these risks could have a material adverse effff eff ct on our business, fiff nancial condition or results of operations. overcoming the risks as disclosed above a SUITABLE ACQUISITION OPPORTUNITIES MAY NOT BE AVAILABLE TO WESBANCO IN THE FUTURE. Wesbanco continually evaluates opportuni ty to make suitabla e acquisitions on faff vorabla e terms in the futff urt e, which could negatively impact the growth of its business. Wesbanco expects that other banking and fiff nancial companies, many of which have signififf cantly greater resources, will compete to acquire compatible businesses. This acquisitions that Wesbanco would likely pursue, and its competitors may have greater resources than it competition could increase prices forff does. Also, acquisitions of regulated businesses such as banks are subject to various regulatoryr appr ovals. If Wesbanco faff ils to receive the a appr ovals, it will not be abla e to consummate an acquisition that it believes is in its best interests. ties to acquire other businesses. However, Wesbanco may not have the opportuni opriate regulatoryr appr a a t t WESBANCO IS EXPOSED TO OPERARR TIONAL RISK THAT COULD ADVERSELY IMPACT THE COMPANY. Wesbanco is exposed to multiple types of operational risk, including reputational risk, legal and compliance risk, the risk of frff aud or theftff tions. Wesbanco’s business is by employees or outsiders, clerical or record-keeping errors and computer or telecommunications systems malfunc dependent on the abia lity to process a large number of increasingly complex transactions. Wesbanco could be materially and adversely affff eff cted if employees, clients, counterparr rties or other third parties caused an operational breakdown or faff ilure, as a result of either human error, frff audud lent manipulation or purpos damage to any of our operations or systems. efulff rr ff 20 LOSS OF KEY EMPLOYEES COULD IMPACT GROWTH AND EARNINGS AND MAY HAVE AN ADVERSE IMPACT ON BUSINESS. Our operating results and abia lity to adequately manage our growth are highly dependent on the services, managerial abia lities and perforff mance of our key employees, including executive offff iff cers and senior management. Our success depends upon our abia lity to attract and retain highly skilled and qualififf ed management, loan origination, fiff nance, administrative, marketing and technical personnel and upon the continued contributions of management personnel. The loss of services, or the inabia lity to successfulff ly complete planned or unplanned transitions of key personnel appr oaching normal retirement age, could have an adverse impact on Wesbanco’s business, operating results and fiff nancial condition because of their skills, knowledge of the local markets, years of industryr experience and the diffff iff culty of promptly fiff nding qualififf ed replacement personnel. te the Filling open challenges of attracting and retaining talented and diverse employees as job markets may be less constrained by physical geography. positions is also challenging in this environment and may adversely impact our business segments. In addition, the transition to increased work-frff om-home (remote or hybrid work environments) may exacerbar aa a LIMITED AVAILABILITY OF BORROWINGS AND LIQUIDITY FROM THE FEDERARR L HOME LOAN BANK SYSTEM AND OTHER SOURCES COULD NEGATIVELY IMPACT EARNINGS. Wesbanco Bank is currently a member bank of the Federal Home Loan Bank (“FHLB”) of Pittsburgh. Membership in this system of quasi- governmental, regional home-loan oriented agency banks allows us to participate in various programs offff eff red by the FHLB. We borrrr ow fuff nds frff om the FHLB, which are secured by a blanket lien on certain residential and commercial mortgage loans, and if appl icabla e, investment securities with collateral values in excess of the outstanding balances. Futurt e earnings shortfaff lls and minimum capia tal requirements of the FHLB may to secure borrowings and limit the borrowings extended to their member banks, as well as require additional impact the collateral necessaryrr capia tal contributions by member banks. The FHLB’s rating assigned to Wesbanco Bank may also negatively impact the amount of termrr collateral and other conditions imposed by the FHLB upon Wesbanco Bank. Should these situat tions occur, Wesbanco’s short-term liquidity needs could be negatively impacted. If Wesbanco was restricted frff om using FHLB advances due to weakness in the system or with the FHLB of Pittsburgh, Wesbanco may be forff ced to fiff nd alternative fundi ng sources, revenues may not increase proportionately to cover these costs, which would adversely affff eff ct Wesbanco’s results of operations and fiff nancial position. ng sources. If Wesbanco is required to rely more heavily on higher cost fundi a ff ff WESBANCO’S FINANCIAL CONDITION AND RESULTS OF OPERARR TIONS DEPEND ON THE SUCCESSFUL GROWTH OF ITS SUBSIDIARIES. Wesbanco’s primaryrr business activity foff r the forff eseeabla e futff urt e will be to act as the holding company of its banking and other subsidiaries. Thereforff e, Wesbanco’s futff urt e profiff tabia lity will depend on the success and growth of these subsidiaries. In the futff urt e, part of Wesbanco’s growth may come frff om buying other banks and buying or establa ishing other companies. Such entities may not be profiff tabla e aftff er they are purchased or establa ished, and they may lose money or be dilutive to earnings per share, particularly forff the fiff rst feff w years. A new bank or company may bring with it unexpected liabia lities, bad loans, or poor employee relations, or the new bank or company may lose customers and the associated revenue. Dilution of book and tangible book value may occur as a result of an acquisition that may not be earned back forff several years, if at all. WESBANCO MAY NEED TO RARR ISE CAPITAL IN THE FUTURE, BUT CAPITAL MAY NOT BE AVAILABLE WHEN NEEDED OR AT ACCEPTABLE TERMS. Federal and state banking regulators require Wesbanco and its banking subsidiary,rr Wesbanco Bank, to maintain adequate levels of capia tal to support its operations. In addition, in the futff urt e Wesbanco may need to raise additional capia tal to support its business or to fiff nance acquisitions, if any, or Wesbanco may otherwise elect to raise additional capia tal in anticipation of futff urt e growth opportuni ties. Since Wesbanco’s total assets t increased above t prefeff rred securities are no longer included in the Tier 1 capa ital of the risk- based capia tal guidelines; however, they are counted as Tier 2 capia tal. $15 billion due to recent acquisitions, certain trusrr a Although Wesbanco successfulff ly raised $150 million of Series A prefeff rred stock in 2020 and also issued $150 million of fiff xed-to-flff oating subu ordinated debentut res in 2022, Wesbanco’s aba ility to raise additional Tier 1 or Tier 2 capa ital foff r parent company or banking subsidiaryr needs will depend on conditions and interest rates at that time in the capia tal markets, overall economic conditions, Wesbanco’s fiff nancial perforff mance and condition, and other faff ctors, many of which are outside our control. There is no assurance that, if needed, Wesbanco will be abla e to raise additional equity or secured /uns ecured debt that may count as Tier 1 or Tier 2 capia tal on faff vorabla e terms or at all. An inabia lity to raise additional capia tal may have a material adverse effff eff ct on our abia lity to expand operations, and on our fiff nancial condition, results of operations and fuff tut re prospects. // 21 WESBANCO’S ABILITY TO MITIGATE RISK DEPENDS ON OUR ENTERPRISE RISK MANAGEMENT FRARR MEWORK. a tite statement and an enterprrr Wesbanco has implemented a risk appe and manage our risk exposures while maintaining a safeff and sound banking organization. This frff amework is comprised of various processes, systems and strategies, and is designed to manage the types of risk to which we are subject, including, among others, credit, legal and compliance, liquqq idity, market, operational, reputational and strategic risks. Included in this frff amework are three independent lines of defeff nse, which allows Wesbanco to effff eff ctively govern and manage risk. If our risk management frff amework is not effff eff ctive, Wesbanco could be exposed to unexpected losses and become subject to regulatoryr consequences, as a result of which our business, fiff nancial condition, results of operations or prospects could be materially adversely affff eff cted. ise risk management frff amework to identifyff RISKS RELATED TO THE USE OF TECHNOLOGY INTERRUPTION TO OUR INFORMATION SYSTEMS OR BREACHES IN SECURITY COULD ADVERSELY AFFECT WESBANCO’S OPERARR TIONS. ff tions. Any faff ilure, interrupt Wesbanco relies on inforff mation systems and communications forff operating and monitoring all maja or aspects of business, as well as internal management func ions in the Wesbanco customer relationship, management, general ledger, deposit, loan and other systems. While Wesbanco has policies, procedud res and ion or security breach of its inforff mation systems, technical safeff guards designed to prevent or limit the effff eff ct of any faff ilure, interrupt -noted issues will and also perforff ms testing of business continuity and disaster recoveryr plans, there can be no absa olute assurance that the above not occur or, if they do occur, that they will be adequately addressed. ion or breach in security of these systems could result in faff ilures or disrupt ion, intrusrr ion, intrusrr a rr rr rr There have been effff orff ts on the part of third parties to breach data security at various fiff nancial institutt ions. The abia lity of our customers to bank remotely, including online and through mobile devices, requires secure transmission of confiff dential inforff mation and increases the risk of data security breaches. Because the techniques used to attack fiff nancial services company communications and inforff mation systems change frff equently (and generally increase in sophistication), oftff en attacks are not recognized until launched against a target, may be supported by forff eign governments or other well-fiff nanced entities, and may originate frff om less regulated and remote areas around the world, we may be unaba le to ions in the address these techniques in advance of attacks, including by implementing adequate preventative measures. Certain fiff nancial institutt United States have also experienced attacks frff om technically sophisticated and well-resourced third parties that were intended to disrupt normal rr business activities by making internet banking systems inaccessible to customers forff extended periods. These “denial-of-ff service” attacks, if attempted, would require substantial resources to defeff nd, and may affff eff ct customer satisfaff ction and behavior. Moreover, the development and maintenance of preventative and detective measures is costly and requires ongoing monitoring and updating as technologies change and effff orff ts ts, the possibility of these events occurring cannot be eliminated. to overcome security measures become more sophisticated. Despite our effff orff Cyber-attacks on third party retailers or other business establa ishments that widely accept debit card or check payments could compromise sensitive bank customer inforff mation, such as debit card and account numbers. Such an attack could result in signififf cant costs to the bank, such as costs to reimburse customers, reissue debit cards and open new customer accounts. rr ts to breach or disrupt The occurrence of any such faff ilure, disrupt ion or security breach of Wesbanco’s inforff mation systems, particularly if widespread or resulting in fiff nancial losses to our customers, could damage Wesbanco’s reputation, result in a loss of customer business, subu jb ect Wesbanco to additional iny, and expose Wesbanco to civil litigation and possible fiff nancial liabia lity. In addition, the prevalence of cyber-attacks and other regulatoryr scrutrr our systems has led, and will continue to lead, to costs to Wesbanco with respect to prevention and mitigation of these effff orff risks, as well as costs reimbursing customers forff attacks or systems faff ilures at other large fiff nancial institutt ions, whether or not Wesbanco is included, could lead to a general loss of customer confiff dence in fiff nancial institut tions with a potential negative impact on Wesbanco’s business, additional demands on the part of our regulators, and increased costs to deal with risks identififf ed as a result of the problems affff eff cting others. The risks described aba ove could have a material effff eff ct on Wesbanco’s business, results of operations and fiff nancial condition. losses suffff eff red as a result of these actions. Successfulff rr WESBANCO DEPENDS ON THIRD PARTIES FOR PROCESSING AND HANDLING OF COMPANY RECORDS AND DATA. Wesbanco relies on softff ware developed by third party vendors to process various transactions. These transactions include, but are not t record keeping, loan and deposit processing, merchant processing, and securities limited to, general ledger, payroll, employee benefiff ts, trusrr portfolff io management. While Wesbanco perforff ms a review of controls institutt ed by the vendors over these programs in accordance with indud stryr standards and perforff ms its own testing of user controls, Wesbanco must rely on the continued maintenance and improvement of these controls by the third party, including safeff guards over the security of customer data. In addition, Wesbanco maintains backups of key processing output daily in the event of a faff ilure on the part of any of these systems. Nonetheless, Wesbanco may incur a temporaryr disrupt ion in its abia lity to conduct its business or process its transactions or incur damage to its reputation if the third party vendor, or the third partytt vendor’s subcontractor, faff ils to adequately maintain internal controls or institutt e necessaryr changes to systems. Such disrupt ion or breach of security may have a material adverse effff eff ct on Wesbanco’s business, fiff nancial condition, and results of operations. rr rr t 22 FAILURE TO KEEP PACE WITH TECHNOLOGICAL CHANGE COULD ADVERSELY AFFECT WESBANCO’S RESULTS OF OPERARR TIONS AND FINANCIAL CONDITION. The fiff nancial services industryr is continually undergoing rapia d technological change with frff equent introductions of new technology-driven products and services. The effff eff ctive use of technology increases effff iff ciency and enabla es fiff nancial institutt ions to better serve customers and to reduce costs. Wesbanco’s futff urt e success depends, in part, upon its abia lity to address customer needs by using technology to provide products and services that will satisfyff customer demands, as well as to create additional effff iff ciencies in Wesbanco’s operations, which was done in 2021 as Wesbanco completed its core banking softff ware conversion. The adoption of new technologies by competitors, including internet banking services, mobile appl ocurrencies could require Wesbanco to make additional substantial investments to modifyff or adapta the existing products and services or even radically alter the way Wesbanco conducts business. These and other capia tal investments in the Company's business may not produce expected growth in earnings anticipated at the time of the expenditurt e. Wesbanco also may not be abla e to effff eff ctively implement new technology-driven products and services or be successfulff in marketing these products and services to its customers. Failure to successfulff ly keep pace with technological change affff eff cting the fiff nancial services industrtt yr could negatively affff eff ct Wesbanco’s growth, revenue, and profiff t. ications, advanced ATM func tionality and crypt a ff rr LIQUIDITY AND CAPITAL RISKS Q WESBANCO HAS OUTSTANDING SECURITIES SENIOR TO OUR COMMON STOCK WHICH COULD LIMIT OUR ABILITY TO PAY DIVIDENDS ON THE COMMON STOCK. l dividends forff the equivalent of six or more dividend payments, whether or not forff Wesbanco has outstanding Series A Prefeff rred Stock that is senior to our common stock and could adversely affff eff ct our abia lity to declare or pay dividends or distributions on our common stock. The terms of the prefeff rred stock offff eff ring prohibits us frff om declaring or paying dividends or making distributions on our common stock unless the fulff the most recently completed dividend period have been declared and payment, on all outstanding shares of Series A Prefeff rred Stock. Whenever dividends on any shares of Series A Prefeff rred paid, or set aside forff Stock have not been declared and paid forff consecutive dividend periods (a “Nonpayment Event”), the holders of Series A Prefeff rred Stock, voting together as a class with holders of any and all other series of voting prefeff rred stock then outstanding would be entitled to vote forff the election of a total of two additional members of our board of directors (the “Prefeff rred Stock Directors”), provided that our board of directors shall at no time include more than two Prefeff rred Stock Directors and that the election of any Prefeff rred Stock Directors shall not cause us to violate the corpor ate governance requirements of the Nasdaq Stock Market (or any other exchange on which our securities may be listed) including the requirements that listed companies must have a maja ority of independent directors. In the event that the holders of the Series A Prefeff rred Stock and other holders of voting prefeff rred stock are entitled to vote forff the election of the Prefeff rred Stock Directors folff lowing a Nonpayment Event, the number of directors on our board of directors shall automatically increase by two, and the new directors shall be elected at a special meeting called at the request of the holders of record of at least 20% of the Series A Prefeff rred Stock or of any other series of voting prefeff rred stock (unless such request is received less than 90 days beforff e the date fiff xed foff r the next annual or special meeting of the shareholders, in which event such election shall be held only at such next annual or special meeting of shareholders), and at each subsequent annual meeting. These voting rights will continue until dividends on the shares of Series A Prefeff rred lowing the Nonpayment Event shall have Stock and any such series of voting prefeff rred stock forff been fulff the payment of such dividends shall have been set aside forff ly paid (or declared and a sum suffff iff cient forff consecutive dividend periods folff at least four payment). rr ff WESBANCO’S ABILITY TO PAY DIVIDENDS IS LIMITED, AND COMMON STOCK DIVIDENDS MAY HAVE TO BE REDUCED OR ELIMINATED. Subject to restrictions described in the previous risk faff ctor, holders of shares of Wesbanco’s common stock are entitled to dividends if,ff when, and as declared by Wesbanco’s Board of Directors out of funds e. Although the Board of Directors has declared and increased shareholder dividends in the past, the current abia lity to pay such dividends is largely dependent upon tht e receipt of dividends frff om the Bank. Federal and state laws impose restrictions on the abia lity of the Bank to pay dividends, which restrictions are more fuff lly described in “Item 1. Business—Payment of Dividends.” In general, fuff tut re dividend policy is subu jb ect to the discretion of the Board of Directors and will depend upon a number of faff ctors, including Wesbanco’s and the Bank’s futff urt e earnings, liquidity and capia tal requirements, regulatoryr constraints and fiff nancial condition. legally availabla e forff that purpos ff rr 23 VOLATILITY IN THE PRICE AND VOLUME OF OUR STOCK MAY BE UNFAVORARR BLE. The market price of our common stock can be volatile and could be subject to wide flff uctuat tions in price in response to various faff ctors, some of which are beyond our control. Some of these faff ctors include, without limitation: • • • • • • • • • • • prevailing market conditions; our fiff nancial and operating results; estimates of our business potential and earnings prospects; an overall assessment of our management; changes in interest rates; business interrupt rr ions, such as may result frff om naturt al disasters, health concerns such as the coronavirusrr or other events; our perforff mance relative to our peers; market demand forff our shares; perceptions of the banking industryr in general; political inflff uences on investor sentiment; and consumer confiff dence. At times, the stock markets, including the Nasdaq Stock Market, on which our common stock is listed, may experience signififf cant price tions. As a result, the market price of our common stock is likely to be similarly volatile and investors in our common stock and volume flff uctuat may experience a decrease in the value of their shares, including decreases unrelated to our operating perforff mance or prospects. In addition, folff lowing periods of volatility in the overall market and the market price of a company’s securities, securities class action litigation has oftff en been institutt ed against companies. This litigation, if institutt ed against us, could result in substantial costs and a diversion of our management’s attention and resources. ITEM 1B. UNRESOLVED STAFF COMMENTS None. 24 ITEM 2. PROPERTIES Wesbanco’s subsidiaries generally own their respective offff iff ces, related faff cilities and any unimproved real property held forff fuff tut re expansion. At December 31, 2022, Wesbanco operated 194 banking offff iff ces in West Virginia, Ohio, western Pennsylvania, Kentuct ky, southernr Indiana and Marylr and, of which 141 were owned and 53 were leased. Wesbanco also operated ten loan production offff iff ces leased in West Virginia, Ohio, western Pennsylvania, Marylr and, Indiana, Tennessee and northern Virginia. These leases expire at various dates through Januaryr 2062 and generally include options to renew. The Bank also owns several regional headquarters buildings in various markets, most of which also house a banking offff iff ce and/or certain back offff iff ce func tions. ff oximately 100,000 square feff et and serves as the main offff iff ce forff The main offff iff ce of Wesbanco is located at 1 Bank Plaza, Wheeling, West Virginia, in a building owned by the Bank. The building contains t and investment a appr services segment, as well as its executive offff iff ces. The Bank’s maja or back offff iff ce operations currently occupy appr oximately 90% of the space availabla e in an offff iff ce building connected via sky-bridge to the main offff iff ce. This adjacent back offff iff ce building is owned by Wesbanco Properties, Inc., a subsidiaryrr of Wesbanco, with the remainder of the building leased to unrelated businesses. both Wesbanco’s community banking segment and its trusrr a At various building locations, Wesbanco rents or makes availabla e commercial offff iff ce space to unrelated businesses. Rental income totaled $1.7 million, $1.8 million and $1.8 million in 2022, 2021 and 2020, respectively. For additional disclosures related to Wesbanco’s properties, other fiff xed assets and leases, please refeff r to Note 5, “Premises and Equipment” in the Consolidated Financial Statements. ITEM 3. LEGAL PROCEEDINGS Wesbanco is also involved in lawsuits, claims, investigations and proceedings, which arise in the ordinaryr course of business. While any litigation contains an element of uncertainty, Wesbanco does not believe that a material loss related to such proceedings or claims pending or known to be threatened is reasonabla y possible. ITEM 4. MINE SAFETY DISCLOSURES Not Applicabla e. 25 ITEM 5. MARKET FOR THE REGISTRARR NT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES PART II Wesbanco’s common stock is quoted on the Nasdaq Global Select Stock Market under the symbol WSBC. The appr oximate number of ryrr 15, 2023 was 7,181. The number of holders does not include record holders of Wesbanco’s $2.0833 par value common stock as of Februarr Wesbanco employees who have purchased stock or had stock allocated to them through Wesbanco’s Employee Stock Ownership and 401(k) plan (the “KSOP”). All Wesbanco employees who meet the eligibility requirements of the KSOP are included in this retirement plan. a 3.2 million shares. This plan provides forff As of December 31, 2022, Wesbanco had one active stock repurchase plan which was appr general corpor ryrr 24, es, which may include a subu sequent 2022 forff resource forff potential acquisitions, shareholder dividend reinvestment and/or employee benefiff t plans. The timing, price and quantity of purchases are at the discretion of Wesbanco, and the plan may be discontinued or suspended at any time. The plan has 1,184,601 shares remaining foff r repurchase. oved by the Board of Directors on Februarr ate purpos shares to be repurchased forff a rr rr Repurchases in the four ff th quarter included open market purchases and those forff the KSOP and dividend reinvestment plans. Certain inforff mation relating to securities authorized forff th under the heading “Equity Compensation Plan Inforff mation” in Part III, “Item 12. Security Ownership of Certain Benefiff cial Owners and Management and Related Stockholder Matters.” issuance under equity compensation plans is set forff The folff lowing tabla e shows the activity in Wesbanco’s stock repurchase plan and other purchases forff the quarter ended December 31, 2022: PePP riod Balance at September 30, 2022 .......................................................... Total Number of Shares Purchased (1) Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plans (2) Maximum Number of Shares that May Yet Be Purchased Under the Plans 1,341,234 October 1, 2022 to October 31, 2022 ................................................. November 1, 2022 to November 30, 2022 ......................................... December 1, 2022 to December 31, 2022 .......................................... Total ............................................................................................... 184,177 1,148 1,035 186,360 $ $ 35.08 40.26 37.68 35.13 156,633 — — 156,633 1,184,601 1,184,601 1,184,601 1,184,601 general corpor rr ate purpos rr es. (1) (2) Total shares purchased consist of open market purchases in the KSOP and dividend reinvestment plans and open market purchases forff rr Represents only open market repurchases forff general corpor ate purpos es. rr 26 The folff lowing grapha shows a comparison of cumulative total shareholder returt ns forff Wesbanco, the RusRR sell 2000 Index and the S&P Index. The total shareholder returt n assumes a $100 investment in the common stock of Wesbanco and each index Regional Banks Select Industryr since December 31, 2017 with reinvestment of dividends. Total Return Performance WesBanco, Inc. Russell 2000 Index S&P Regional Banks Select Industry Index 200 150 100 e u l a V x e d n I 50 12/31/17 12/31/18 12/31/19 12/31/20 12/31/21 12/31/22 InII dedd xee Wesbanco, Inc............................................................. RusRR sell 2000................................................................ Index ............... S&P Regional Banks Select Industryr December 31, 2017 100.00 100.00 100.00 December 31, 2018 December 31, 2019 December 31, 2020 December 31, 2021 December 31, 2022 92.61 88.99 81.23 98.67 111.70 103.68 82.44 134.00 96.33 99.98 153.85 134.76 109.86 122.41 114.88 Period Ending ITEM 6. [RESERVR ED] 27 ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERARR TIONS Management’s Discussion and Analysis ("MD&A) represents an overview of the results of operations and fiff nancial condition of Wesbanco. This discussion and analysis should be read in conjn unction with the Consolidated Financial Statements and Notes thereto. This section generally discusses 2022 and 2021 items and year-to-year comparisons between 2022 and 2021. Discussions of 2020 items and year-to-year comparisons between 2021 and 2020 that are not included in this Form 10-K can be found in “Management’s Discussion and Analysis of Financial Condition ff and Results of Operations” in Part II, Item 7 of Wesbanco’s Annual Report on Form 10-K foff r the fiff scal year ended December 31, 2021, as fiff led with the SEC on Februarr ryr 28, 2022. FORWARD-LOOKING STATEMENTS r Forward-looking statements in this report relating to Wesbanco’s plans, strategies, objectives, expectations, intentions and adequacy of resources, are made pursuant to the safeff harbor provisions of the Private Securities Litigation Reforff m Act of 1995. The inforff mation contained in this report should be read in conjn unction with Wesbanco’s Form 10-Qs foff r the prior quarters ended March 31, June 30 and September 30, 2022, respectively, and documents subsequently fiff led by Wesbanco which are availabla e at the SEC’s website, www.sec.gov or at Wesbanco’s website, www.wesbanco.com. Investors are cautioned that forff ward-looking statements, which are not historical faff ct, involve risks and uncertainties, including those detailed under “Risk Factors” in Part I, Item 1A of this Annual Report on Form 10-K. Such statements are subject to important faff ctors that could cause actuat l results to diffff eff r materially frff om those contemplated by such statements, including, without limitation, the effff eff cts of changing regional and national economic conditions, changes in interest rates, spreads on earning assets and interest-bearing liabia lities, and associated interest rate sensitivity; sources of liquidity availabla e to Wesbanco and its related subsidiaryr operations; potential futff urt e credit losses and the credit risk of commercial, real estate, and consumer loan customers and their borrowing activities; actions of the Federal Reserve, the FDIC, the SEC, FINRARR , the Municipal Securities RulRR emaking Board, the SIPC, and other regulatoryrr bodies; potential legislative and feff deral and state regulatoryr actions and reforff m, including, without limitation, the impact of the implementation of the Dodd-Frank Act; adverse decisions of feff deral and state courts; frff aud, scams and schemes of third parties; cyber security breaches; competitive conditions in the fiff nancial services ents and corresponding impact on faff ir value industry;rr adjustments; and/or other external developments materially impacting Wesbanco’s operational and fiff nancial perforff mance. Wesbanco does not assume any duty to update forff ward-looking statements. rapia dly changing technology affff eff cting fiff nancial services; marketabia lity of debt instrumrr APPLICATION OF CRITICAL ACCOUNTING POLICIES AND ESTIMATES Wesbanco’s Consolidated Financial Statements are prepared in accordance with U.S. GAAP and folff low general practices within the industries in which it operates. Application of these principles requires management to make estimates, assumptions and judgments that affff eff ct the amounts reported in the fiff nancial statements and accompanying notes. These estimates, assumptions and judgments are based on inforff mation availabla e as of the date of the fiff nancial statements; accordingly, as this inforff mation changes, the fiff nancial statements could reflff ect diffff eff rent estimates, assumptions and judgments. Certain policies inherently have a greater reliance on the use of estimates, assumptions and judgments and as such have a greater possibility of producing results that could be materially diffff eff rent than originally reported. The most signififf cant accounting policies folff lowed by Wesbanco are included in Note 1, “Summaryr of Signififf cant Accounting Policies,” of the Consolidated Financial Statements. These policies, along with other Notes to the Consolidated Financial Statements and this MD&A, provide inforff mation on how signififf cant assets and liabia lities are valued in the fiff nancial statements and how those values are determined. Management has identififf ed the allowance foff r credit losses, the evaluation of goodwill and other intangible assets foff r impairment and business combinations to be the accounting estimates that require the most subjective or complex judgments, and as such could be most subject to revision as new inforff mation becomes availaba le. Allowance forff Credit Losses— Under CECL, acquired loans or pools of loans that have experienced more-than-insignififf cant credit deterioration are deemed to be purchased credit-deteriorated (“PCD”) loans, and are grossed-up on day 1 by the initial credit estimate through the allowance as opposed to a reduction in the loan’s amortized cost. The credit mark on acquired loans deemed not to be PCD loans are reflff ected as a reduction in the loan’s amortized cost, with an allowance and corresponding provision forff credit losses recorded in the fiff rst reporting period aftff er acquisition through current period earnings, while the loan mark will accrete through interest income over the lifeff of such loans. At acquisition, Wesbanco will consider several faff ctors as indicators that an acquired loan or pool of loans has experienced more-than-insignififf cant credit deterioration. These faff ctors may include, but are not limited to, loans 30 days or more past dudd e, loans with an internal risk grade of below average or lower, loans classififf ed as non-accruarr ion, materiality of the credit and loans that have been previously modififf ed in a TDR. Upon adoption of this standard, acquired loans frff om prior acquisitions that met the guidelines under ASC 310-30 (forff merly known as “purchased credit-impaired”) were reclassififf ed as PCD loans. The accretabla e portion of the loan mark as of adoption date continuen s to accrete into interest income. However, the non-accretabla e portion of the loan mark was added to the allowance upon adoption, and any reversals of such mark will flff ow through the allowance in futff urt e periods. The loan mark on ASC 310-20 loans (“non-purchased credit-impaired”) frff om prior acquisitions continues to accrete through interest income over the lifeff of such loans. l by the acquired institutt Aftff er the forff ecast period, Wesbanco reverts back to historical loss rates forff prepayments and curtailments, to estimate losses over the remaining lifeff of loans. The most sensitive assumptions include the length of the foff recast and reversion a period of up to three years, adjusting forff 28 periods, forff ecast of unemployment and interest rate spreads and prepayment speeds. See Note 4, “Loans and Allowance forff Credit Losses” forff furff ther detail. ff unfunde The allowance foff r credit losses specififf c to loans redud ces the loan portfoff lio to the net amount expected to be collected, representing the lifeff time expected credit losses at the initial origination date. Similarly, an allowance foff r unfuff nded loan commitments, which is recorded in other credit losses specififf c to loans, the allowance liabia lities, represents expected losses on unfunde credit losses on the forff consolidated statement of operations. The allowance incorpor ies a reversion methodology beyond the reasonabla e and supportabla e forff ecast. The allowance is increased by a provision charged to operating expense and reduced by charge-offff sff , net of recoveries. Management evaluates the apa propriateness of the allowance at least quarterly. This evaluation is inherently subu jb ective as it requires material estimates that may be susceptible to signififf cant change frff om period to period. ity debt securities are recognized in the provision forff d loan commitments, and the allowance forff ates forff ward-looking inforff mation and appl held-to-maturt rr tions in the allowance forff d commitments. Fluctuat a ff The allowance forff credit loss calculation specififf c to loans is based on the loan’s amortized cost basis, which is comprised of the unpaid principal balance of the loan, defeff rred loan feff es (costs) and acquired premium (discount) minus any write-downs. Wesbanco made an accounting credit losses, because the Company has a robust policy in policy election to exclude accruerr d interest frff om the measurement of the allowance forff l, and also made an accounting policy election to reverse place to reverse or write-offff accruerr d interest when the loan is placed on non-accruarr accruerr d interest deemed uncollectible as a reversal of interest income. However, Wesbanco is reserving, as part of the allowance forff credit losses, forff accruerr d interest on loan modififf cations under the CARES Act due to the natut re and timing of these defeff rrals. The allowance forff credit losses specififf c to loans reflff ects the risk of loss in the loan portfolff io into pools of similar risk characteristics. The Company utilizes the PD / LGD appr opriately measure expected credit losses, oach to calculate a management disaggregates the loan portfolff the expected loss forff each segment, which is then discounted to net present value. PD is the probabia lity the asset will defaff ult within a given timefrff ame and LGD is the percentage of the assets not expected to be collected due to defaff ult. The primaryr macroeconomic drivers of the quantitative model include forff ecasts of national unemployment and interest rate spreads. Management relies on macroeconomic foff recasts obtained frff om various reputabla e sources, which may include the Federal Open Market Committee forff ecast and other third party forff ecasts frff om well recognized, leading economists. These forff ecasts can range frff om one to two years, depending upon the faff cts and circumstances of the current state of the economy, portfolff io segment and management’s judgement of what can be reasonabla y supported. The model reversion period ranges frff om immediate to up to three years. io. To appr a ity date. For commercial and industrial (“C&I”) revolving loans with no stated maturt The allowance foff r credit losses specififf c to loans is calculated over the loan’s contractut al lifeff . For term loans, the contractut al lifeff is calculated is calculated based on the maturt itytt date or a defaff ult l lifeff based on the internal review date. For all other revolving loans, the contractuat date. The contractuat l term does not include any expected extensions, renewals or modififf cations unless management has a reasonaba le expectation as of the reporting period that Wesbanco will execute a TDR with the borrower. Management assumes a loan will become a TDR if a loan has maturt ed, has a principal balance, and has previously been partially charged-offff .ff This assumption extends the maturt ity of these loans to six months beyond their respective maturt is based on either the estimated maturt ity date, the contractuat ity dates. l lifeff Contractuat l terms are adjusted forff “prepayment” rate. When Wesbanco has a specififf c expectation of diffff eff ring payment behavior forff individually. For revolving loans that do not have a principal payment schedule, a curtailment rate is faff ctored into the cash flff ow. estimated prepayments to arrive at expected cash flff ows. Wesbanco models term loans with an annualized a given loan, the loan may be evaluated The evaluation also considers qualitative faff ctors such as economic trends and conditions, which includes levels of regional unemployment, cal markets, changes in lending policies and underwriting standards, real estate values and the impact on specififf c industries and geographi delinquency and other credit quality trends, concentrations of credit risk, if any, volume of activity, changes in lending staffff ,ff type of collateral and the results of internal loan reviews and examinations by bank regulatoryr agencies. Management relies on observabla e data frff om internal and external sources to the extent it is availabla e to evaluate each of these faff ctors and adjusts the actuat l historical loss rates to reflff ect the impact these faff ctors may have on probabla e losses in the portfolff io. a Commercial loans, including commercial real estate (“CRE”) and C&I, are individud ally-evaluated if they have unique characteristics. such loans based on the net present value of expected futff urt e cash flff ows of the loan or the opriate forff a Specififf c reserves are establa ished when appr estimated realizabla e value of the collateral, if any. Goodwill and Other Intangible Assets— Wesbanco accounts forff business combinations using the acquisition method of accounting. Accordingly, the identififf abla e assets acquired, the liabia lities assumed, and any non-controlling interest of an acquired business are recorded at their estimated faff ir values as of the date of acquisition with any excess of the cost of the acquisition over the faff ir value recorded as goodwill. Other intangible assets represent purchased assets that lack physical subu stance but can be distinguished frff om goodwill because of contractuat l or other legal rights or because the asset is capa aba le of being sold or exchanged either on its own or in combination with a related contract, asset, or liabia lity. 29 Goodwill is not amortized but is evaluated forff impairment annually, or more oftff en if events or circumstances indicate it may be impaired. Finite-lived intangible assets, which consist primarily of core deposit and customer list intangibles (long-term customer-relationship intangible assets) are amortized using straight-line and accelerated methods over their weighted-average estimated usefuff l lives, ranging frff om ten to sixteen years in total, and are tested forff impairment whenever events or circumstances indicate that their carryirr ng amount may not be recoveraba le. Non- compete agreements are recognized in other assets on the balance sheet and are amortized on a straight-line basis over the lifeff of the respective agreements, ranging frff om one to four years. ff Wesbanco evaluates goodwill forff impairment by determining if the faff ir value is greater than the carryir ng value of its reporting units. Wesbanco uses market capia talization, multiples of tangible book value, a discounted cash flff ow model, and various other market-based methods to estimate the current faff ir value of its reporting units. In particular, the discounted cash flff ow model includes various assumptm ions regarding an investor’s required rate of retut rn on Wesbanco common stock, fuff tut re loan loss provisions, fuff tut re market spreads and net interest margins, along with various growth and economic recoveryrr and stabia lization assumptions of the economy as a whole. The resulting faff ir values of each method are then weighted based on the relevance and reliabia lity of each respective method in light of the current economic environment to arrive at a weighted average faff ir value. The evaluation also considered macroeconomic conditions such as the general economic outlook, regional and national unemployment rates, and recent trends in equity and credit markets. Additionally, industryr and market considerations, such as market- dependent multiples and metrics relative to peers, were evaluated. Wesbanco also considered recent trends in credit quality, overall fiff nancial perforff mance, stock price appr eciation, internal forff ecasts and various other market-based methods to estimate the current faff ir value of its reporting units. Since adopting ASU 2017-04, “Intangibles-Goodwill and Other (Topic 350)”, the impairment charge is based on the excess of a reporting unit’s carryir ng amount over its faff ir value. a Intangible assets with fiff nite usefulff impairment whenever events or changes in circumstances indicate that their carryirr ng amount may not be recoverabla e. An impairment loss is recognized when the carryirr ng amount of an intangible asset with a fiff nite usefuff l lifeff is not recoverabla e frff om its undiscounted cash flff ows and is measured as the diffff eff rence between the carryir ng amount and the faff ir value of the asset. Wesbanco does not have any indefiff nite-lived intangible assets. As of December 31, 2022, there were no indicators of impairment related to goodwill or to intangible assets with fiff nite usefulff lives are evaluated forff lives. Business Combinations— Business combinations are accounted forff ying the acquisition method. As of acquisition date, the identififf abla e assets acquired and liabia lities assumed are measured at faff ir value and recognized separately frff om goodwill. Results of operations of the acquired entities are included in the consolidated statement of income frff om the date of acquisition. The calculation of intangible assets including core deposits and the faff ir value of loans are based on signififf cant judgements. Core deposits intangibles are calculated using a discounted cash flff ow model based on various faff ctors including discount rate, attrition rate, interest rate, cost of alternrr ative fuff nds and net maintenance costs. a by appl Loans acquired in connection with acquisitions are recorded at their acquisition-date faff ir value with no carryove r of related allowance foff r credit losses. Acquired loans are classififf ed into two categories; PCD loans and non-PCD loans. PCD loans are defiff ned as a loan or groupu of loans that have experienced more than insignififf cant credit deterioration since origination. Non-PCD loans will have an allowance establa ished on acquisition date, which is recognized in the current period provision forff credit losses. For PCD loans, an allowance is recognized on day 1 by adding it to the faff ir value of the loan, which is the “Day 1 amortized cost”. There is no credit loss expense recognized on PCD loans because the initial allowance is establa ished by grossing-up the amortized cost of the PCD loan. Determining the faff ir value of the acquired loans involves estimating the principal and interest cash flff ows expected to be collected on the loans and discounting those cash flff ows at a maraa ket rate of interest. Management considers a number of faff ctors in evaluating the acquisition-date faff ir value including the remaining lifeff of the acquired loans, delinquency statust , estimated prepayments, payment options and other loan feff aturt es, internal risk grade, estimated value of the underlying collateral and interest rate environment. r 30 EXECUTIVE OVERVR IEW Net income availabla e to common shareholders decreased $50.1 million or 22.6% to $182.0 million in 2022 compared to 2021. Net income ing and merger-related expenses (non-GAAP measure) decreased $54.1 million availabla e to common shareholders excluding aftff er-tax restrucrr or 22.8% to $183.3 million. These decreases were due in large part to the net benefiff t in the provision forff credit losses in 2022 of $1.4 million (net of tax) compared to the net benefiff t in the 2021 provision of $51.6 million (net of tax). Net interest income increased $16.4 million or 3.6% frff om 2021, primarily dud e to loan growth and a rising rate environment. Non-interest income decreased $15.4 million or 11.6% in 2022 compared to 2021, driven by a $14.4 million decrease in mortgage banking income due to lower volume and the retention of more residential mortgage originations. Offff sff etting the overall decrease somewhat, both service charges on deposits and bank-owned lifeff insurance increased year-over- year by $3.9 million and $1.8 million, respectively. Excluding restrucrr ing and merger-related expenses, non-interest expense increased $8.8 million or 2.5%, driven by increases in salaries and wages, FDIC insurance and equipment and softff ware expense. turt turt ff Total assets as of December 31, 2022 remained relatively flff at at $16.9 billion compared to December 31, 2021. As of December 31, 2022, io loans were $10.7 billion compared to $9.7 billion at December 31, 2021, reflff ecting a 10.0% increase year-over year. The loan total portfolff ng is reflff ected within the decrease in cash of $842.9 million or 67.4% at December 31, 2022 compared to December 31, 2021. growth fundi io loans, as compared to 3.75% at December 31, 2021. As a result of Criticized and classififf ed loan balances decreased to 2.34% of total portfolff the year 2022 compared to ($64.3) million in improved macroeconomic faff ctors, the provision forff 2021. Annualized net loan charge-offff sff to average loans forff 2022. In March of 2022, Wesbanco completed the issuance of $150.0 million in aggregate principal amount of subordinated debenturt es. The subordinated the next fiff ve years at Three Month SOFR plus a spread of the fiff rst fiff ve years and a flff oating rate forff debenturt es have a fiff xed rate of 3.75% forff 1.787%. The subordinated debenturt es are callabla e aftff er fiff ve years, maturt e on April 1, 2032 and count towards Tier 2 Capia tal. l year period remained flff at compared to 2021 at two basis points forff credit losses decreased to ($1.7) million forff the fulff a a the appl Wesbanco continues to maintain what we believe are strong regulatoryr capia tal ratios, as both consolidated and bank-level regulatoryr capia tal ratios are well above icabla e “well-capia talized” standards promulgated by bank regulators and the BASEL III capia tal standards. At December 31, 2022, Tier I leverage was 9.90%, Tier I risk-based capia tal was 12.33%, total risk-based capia tal was 15.11%, and the common equity Tier 1 capia tal ratio was 11.20%. Tangible equity to tangible assets decreased to 8.19% at period-end frff om 9.84% as of December 31, 2021, dued to reduced shareholders' equity balances resulting frff om stock repurchases occurring throughout 2022, as well as declines in accumulated other comprehensive income. Strong earnings enabla ed Wesbanco to increase the quarterly dividend to $0.34 and $0.35 per share in the fiff rst quarter and four tht quarters of 2022, respectively, the fiff ftff eenth and sixteenth increase over the last twelve years, cumulatively representing a 150% increase over that period. ff 31 Selected fiff nancial ratios forff the years ended December 31, 2022, 2021 and 2020 are presented in the tabla e below: eptee lll arll srr inii thtt ousands,s excee shares and per share amountstt )s (dol (( PER COMMON SHARE INFORMATION Earnings per common share—basic............................................................................... $ Earnings per common share—diluted ............................................................................ Earnings per common share—diluted, excluding certain items (1)(2) ............................... Dividends declared per common share .......................................................................... Book value at year end................................................................................................. Tangible book value at year end (1) .............................................................................. Average common shares outstanding—basic.................................................................. Average common shares outstanding—diluted ............................................................... Period end common shares outstanding ......................................................................... Period end prefeff rred shares outstanding......................................................................... SELECTED RARR TIOS Returt n on average assets .............................................................................................. Returt n on average assets, excluding certain items (1)(2) ................................................. Returt n on average tangible assets (1)............................................................................. Returt n on average tangible assets, excluding certain items (1)(2) ..................................... Returt n on average equity.............................................................................................. Returt n on average equity, excluding certain items (1)(2)................................................. Returt n on average tangible equity (1) ............................................................................ Returt n on average tangible equity, excluding certain items (1)(2) .................................... Returt n on average tangible common equity (1) .............................................................. Returt n on average tangible common equity, excluding certain items (1)(2)....................... Net interest margin (3) ................................................................................................. Effff iff ciency ratio (1) ...................................................................................................... Average loans to average deposits................................................................................. credit losses - loans to total loans ............................................................ Allowance forff credit losses - loans to total non-perforff ming loans..................................... Allowance forff Non-perforff ming assets to total assets............................................................................. Net loan charge-offff sff to average loans ............................................................................ Average shareholders’ equity to average assets .............................................................. Tangible equity to tangible assets (1)............................................................................. Tangible common equity to tangible assets (1) ............................................................... Tier 1 leverage ratio..................................................................................................... Tier 1 capia tal to risk-weighted assets ............................................................................. Total capia tal to risk-weighted assets .............................................................................. Common equity tier 1 capia tal ratio (CET 1) ................................................................... Dividend payout ratio .................................................................................................. Trusrr t assets at market value (4)..................................................................................... $ 2022 For the years ended December 31, 2021 2020 3.03 3.02 3.04 1.37 38.55 19.43 60,047,177 60,215,374 59,198,963 150,000 1.08% 1.09 1.21 1.22 7.23 7.29 13.78 13.88 15.39 15.50 3.20 59.53 74.21 1.10 284.41 0.25 0.02 14.90 8.19 7.28 9.90 12.33 15.11 11.20 45.36 4,878,479 $ $ 3.54 3.53 3.62 1.32 40.91 22.61 65,520,527 65,669,970 62,307,245 150,000 1.37% 1.40 1.53 1.56 8.40 8.59 14.89 15.22 16.35 16.71 3.11 58.22 78.11 1.25 308.00 0.23 0.02 16.33 9.84 8.92 10.02 14.05 15.91 12.77 37.39 5,644,975 $ $ 1.78 1.77 1.88 1.28 39.17 21.75 67,260,796 67,310,584 67,254,706 150,000 0.73% 0.77 0.85 0.90 4.50 4.79 8.61 9.12 8.94 9.47 3.37 56.38 91.66 1.72 455.38 0.25 0.06 16.13 10.52 9.58 10.51 14.72 17.58 13.40 72.32 5,025,565 (1) (2) (3) (4) additional inforff mation relating to the calculation of this item. See "Non-GAAP Measures" forff Certain items excluded frff om the calculation consist of aftff er-tax restrucrr Presented on a fulff investments using the feff deral statutt oryrr of net interest income and provides relevant comparison between taxabla e and non-taxabla e amounts. Trusrr Balance Sheets. ly taxabla e-equivalent (FTE) and annualized basis. The FTE basis adjusts forff t assets are held by the Bank, in fiff duciaryrr or agency capaa tax rate of 21% forff cities forff turt ing and merger-related expenses. the tax benefiff t of income on certain tax-exempt loans and all periods presented. Wesbanco believes this measure to be the prefeff rred industryrr measurement its customers and thereforff e are not included as assets on Wesbanco’s Consolidated 32 Non-GAAP Measures The folff to investors in lowing non-GAAP fiff nancial measures used by Wesbanco provide infoff rmation that Wesbanco believes is usefulff understanding Wesbanco’s operating perforff mance and trends, and faff cilitates comparisons with the perforff mance of Wesbanco’s peers. The folff lowing tabla es summarize the non-GAAP fiff nancial measures derived frff om amounts reported in Wesbanco’s fiff nancial statements. g g g q p eptee y lll arll srr inii g per share amountstt )s thtt ousands,s excee q (dol (( Tangible common equity to tangible assets: Total shareholders’ equity ......................................................................................... $ Less: goodwill and other intangible assets, net of defeff rred tax liabia lity........................... Tangible equity ........................................................................................................ Less: prefeff rred shareholders' equity............................................................................ Tangible common equity ........................................................................................... Total assets .............................................................................................................. Less: goodwill and other intangible assets, net of defeff rred tax liabia lity........................... Tangible assets ......................................................................................................... $ Tangible equity to tangible assets ............................................................................... Tangible common equity to tangible assets ................................................................. Tangible book value per share: Total shareholders’ equity ......................................................................................... $ Less: goodwill and other intangible assets, net of defeff rred tax liabia lity........................... Less: prefeff rred shareholders' equity............................................................................ Tangible common equity ........................................................................................... Common shares outstanding ...................................................................................... Tangible book value per share at year end................................................................... $ Return on average tangible equity: y g Net income availabla e to common shareholders ............................................................ $ Add: amortization of intangibles, net of tax................................................................. Net income availabla e to common shareholders beforff e amortization of intangibles........... Average total shareholders’ equity ............................................................................. Less: average goodwill and other intangibles, net of defeff rred tax liabia lity ...................... Average tangible equity............................................................................................. $ Returt n on average tangible equity .............................................................................. Average tangible common equity ............................................................................... $ Returt n on average tangible common equity................................................................. Return on average tangible assets: g Net income availabla e to common shareholders ............................................................ $ Add: amortization of intangibles, net of tax................................................................. Net income beforff e amortization of intangibles............................................................. Average total assets .................................................................................................. Less: average goodwill and other intangibles, net of defeff rred tax liabia lity ...................... Average tangible assets ............................................................................................. $ Returt n on average tangible assets ............................................................................... Effff iff ciency ratio: Non-interest expense................................................................................................. $ ing and merger-related expense............................................................ Less: restrucrr ing and merger-related expense...................... Non-interest expense excluding restrucrr ly-taxabla e equivalent basis................................................. Net interest income on a fulff Non-interest income.................................................................................................. Net interest income on a fulff Effff iff ciency ratio......................................................................................................... Net income per common shareholders, excluding aftff er-tax restructuring and , p merger-related expenses: Net income availabla e to common shareholders ............................................................ $ Add: aftff er-tax restrucrr Net income per common shareholders, excluding aftff er-tax restrucrr related expenses ....................................................................................................... $ ing and merger-related expenses (1) ........................................ ly-taxabla e equivalent basis plus non-interest income ............ $ ing and merger- turt turt turt turt p y g g g g 2022 For the years ended December 31, 2021 2020 2,426,662 (1,131,990) 1,294,672 (144,484) 1,150,188 16,931,905 (1,131,990) 15,799,915 8.19% 7.28% 2,426,662 (1,131,990) (144,484) 1,150,188 59,198,963 19.43 181,988 8,120 190,108 2,515,509 (1,136,062) 1,379,447 13.78% 1,234,963 15.39% 181,988 8,120 190,108 16,879,541 (1,136,062) 15,743,479 1.21% 356,966 (1,723) 355,243 479,315 117,391 596,706 59.53% 181,988 1,361 183,349 $ $ $ $ $ $ $ $ $ $ $ $ $ 2,693,166 (1,140,111) 1,553,055 (144,484) 1,408,571 16,927,125 (1,140,111) 15,787,014 9.84% 8.92% 2,693,166 (1,140,111) (144,484) 1,408,571 62,307,245 22.61 232,135 9,051 241,186 2,764,337 (1,144,698) 1,619,639 14.89% 1,475,155 16.35% 232,135 9,051 241,186 16,928,377 (1,144,698) 15,783,679 1.53% 353,143 (6,717) 346,426 462,229 132,785 595,014 58.22% 232,135 5,306 237,441 $ $ $ $ $ $ $ $ $ $ $ $ $ 2,756,737 (1,149,161) 1,607,576 (144,484) 1,463,092 16,425,610 (1,149,161) 15,276,449 10.52% 9.58% 2,756,737 (1,149,161) (144,484) 1,463,092 67,254,706 21.75 119,400 10,595 129,995 2,651,402 (1,141,528) 1,509,874 8.61% 1,453,363 8.94% 119,400 10,595 129,995 16,442,704 (1,141,528) 15,301,176 0.85% 354,845 (9,725) 345,120 483,999 128,185 612,184 56.38% 119,400 7,683 127,083 33 g g g g g g g g g g p q p p q y, y, eptee turt turt turt turt turt turt turt turt lll arll srr inii ing and thtt ousands,s excee per share amountstt )s ing and merger- ing and merger-related ing and merger-related expenses (1) ........................................... ing and merger-related expenses per common share - diluted (1)... ing and merger-related expenses ... g (dol (( Net income per common share - diluted, excluding aftff er-tax restructuring and , p merger-related expenses: Net income per common share - diluted......................................................................... $ Add: aftff er-tax restrucrr Net income per common share - diluted, excluding aftff er-tax restrucrr related expenses .......................................................................................................... $ Return on average equity, excluding aftff er-tax restructuring and merger-related expenses: Net income availabla e to common shareholders............................................................... $ Add: aftff er-tax restrucrr Net income availabla e to common shareholders, excluding aftff er-tax restrucrr merger-related expenses............................................................................................... Average total shareholders’ equity ................................................................................ $ Returt n on average equity, excluding aftff er-tax restrucrr Return on average tangible equity, excluding aftff er-tax restructuring and merger- g related expenses: Net income availabla e to common shareholders............................................................... $ ing and merger-related expenses (1) ........................................... Add: aftff er-tax restrucrr Add: amortization of intangibles, net of tax ................................................................... Net income availabla e to common shareholders beforff e amortization of intangibles and ing and merger-related expenses ......................................... excluding aftff er-tax restrucrr Average total shareholders’ equity ................................................................................ Less: average goodwill and other intangibles, net of defeff rred tax liabia lity......................... Average tangible equity ............................................................................................... $ Returt n on average tangible equity, excluding aftff er-tax restrucrr expenses..................................................................................................................... Average tangible common equity.................................................................................. $ ing and merger- Returt n on average tangible common equity, excluding aftff er-tax restrucrr related expenses .......................................................................................................... Return on average assets, excluding aftff er-tax restructuring and merger-related expenses: Net income availabla e to common shareholders............................................................... $ Add: aftff er-tax restrucrr Net income availabla e to common shareholders, excluding aftff er-tax restrucrr merger-related expenses............................................................................................... Average total assets ..................................................................................................... $ Returt n on average tangible assets, excluding aftff er-tax restrucrr expenses..................................................................................................................... Return on average tangible assets, excluding aftff er-tax restructuring and merger- g related expenses: Net income availabla e to common shareholders............................................................... $ Add: amortization of intangibles, net of tax ................................................................... ing and merger-related expenses (1) ........................................... Add: aftff er-tax restrucrr Net income availabla e to common shareholders, beforff e amortization of intangibles and ing and merger-related expenses ......................................... excluding aftff er-tax restrucrr Average total assets ..................................................................................................... Less: average goodwill and other intangibles, net of defeff rred tax liabia lity......................... Average tangible assets................................................................................................ $ Returt n on average tangible assets, excluding aftff er-tax restrucrr expenses..................................................................................................................... Dividend payout ratio, excluding aftff er-tax restructuring and merger related expenses: Dividends declared per common share .......................................................................... $ Net income per common share - diluted......................................................................... ing and merger-related expenses per diluted share (1) .................. Add: aftff er-tax restrucrr Net income per common share - diluted, excluding aftff er-tax restrucrr related expenses .......................................................................................................... $ Dividend payout ratio, excluding aftff er-tax restrucrr all periods presented. (1) Tax effff eff cted at 21% forff ing and merger-related expenses (1) ........................................... ing and merger related expenses ........ ing and merger-related ing and merger-related ing and merger- ing and p y turt turt turt turt turt turt turt turt turt turt p p p g g g g g g g g g g g , , , 34 2022 For the years ended December 31, 2021 2020 3.02 0.02 3.04 181,988 1,361 183,349 2,515,509 7.29% 181,988 1,361 8,120 191,469 2,515,509 (1,136,062) 1,379,447 13.88% 1,234,963 15.50% 181,988 1,361 183,349 16,879,541 1.09% 181,988 8,120 1,361 191,469 16,879,541 (1,136,062) 15,743,479 1.22% 1.37 3.02 0.02 3.04 45.07 $ $ $ $ $ $ $ $ $ $ $ $ $ 3.53 0.09 3.62 232,135 5,306 237,441 2,764,337 8.59% 232,135 5,306 9,051 246,492 2,764,337 (1,144,698) 1,619,639 15.22% 1,475,155 16.71% 232,135 5,306 237,441 16,928,377 1.40% 232,135 9,051 5,306 246,492 16,928,377 (1,144,698) 15,783,679 1.56% 1.32 3.53 0.09 3.62 36.46 $ $ $ $ $ $ $ $ $ $ $ $ $ 1.77 0.11 1.88 119,400 7,683 127,083 2,651,402 4.79% 119,400 7,683 10,595 137,678 2,651,402 (1,141,528) 1,509,874 9.12% 1,453,363 9.47% 119,400 7,683 127,083 16,442,704 0.77% 119,400 10,595 7,683 137,678 16,442,704 (1,141,528) 15,301,176 0.90% 1.28 1.77 0.11 1.88 68.09 RESULTS OF OPERARR TIONS EARNINGS SUMMARYRR For the twelve months ending December 31, 2022, net income availaba le to common shareholders was $182.0 million, or $3.02 per diluted credit losses of $64.3 million, the twelve months ended December 31, 2022 decreased 21.6% share, compared to $232.1 million, or $3.53 per diluted share, forff or $51.6 million net of tax. Net income availabla e to common shareholders forff compared to 2021, while per share earnings decreased 14.4%. 2021, which included a release of provision forff For the twelve months ending December 31, 2022, net interest income increased $16.4 million, or 3.6%, reflff ecting a higher net interest margin resulting frff om the 425 basis point increase in the feff deral funds deployment of excess cash into higher-yielding loans, particularly in the second half of 2022. The net interest margin increased 9 basis points to 3.20% dudd e to the overall higher rate environment. Average loan balances decreased 2.9% in 2022, mostly due to PPP loan forff giveness and elevated levels of commercial real estate loans being refiff nanced in an aggressive secondaryrr market in the earlier portions of the year, while average investment securities increased 18.1% over the same period. Total average deposits increased in 2022 by $298.7 million or 2.2% compared to 2021, due to increased personal savings. Average certififf cates of deposit, which have the highest overall interest cost among deposits, decreased by $359.1 million or 24.6% over the same time period. rate in 2022, as well as the successfulff ff For 2022, non-interest income decreased $15.4 million or 11.6% compared to 2021. Mortgage banking income decreased $14.4 million or 73.7% in 2022 as compared to 2021 due to the higher interest rate environment and Wesbanco retaining a higher percentage of residential real t feff es decreased $2.0 million frff om 2021 to 2022 due to a decrease in the market values of trurr st assets under estate loans in the loan portfolff management reducing feff e income. Net securities (losses)/gains decreased $2.9 million frff om the prior year due mostly to the decline in the faff ir market value of the equity investments held in the defeff rred compensation plan. Somewhat mitigating these decreases, service chara ges on deposits increased $3.9 million frff om the prior year and net securities brokerage revenue increased $2.6 million due to organic growth. io. Trusrr The foff llowing comments on non-interest expense exclude restrurr ctut ring and merger-related expenses in both years. Non-interest expx ense in 2022 increased $8.8 million or 2.5% compared to 2021, while the effff iff ciency ratio increased in 2022 to 59.5% frff om 58.2% in 2021. The primaryr driver of this increase was a $12.8 million increase in salaries and wages due to higher staffff iff ng levels and merit increases. Also increasing the year 2022 was FDIC insurance expense, which reflff ects the benefiff t to 2021's calculation frff om the large negative credit loss provision forff recognized in 2021, as well as equipment and softff ware and marketing expenses. These increases were slightly offff sff et by lower employee benefiff ts expense, lower net occupancy expense and lower amortization expense on intangible assets as well as other decreases resulting frff om the effff iff ciencies derived frff om the core systems conversion which occurred in the second half of 2021. The provision forff feff deral and state income taxes decreased to $44.3 million in 2022 compared to $59.6 million in 2021, due to lower pre- the years ended December 31, 2022 and 2021, respectively. Wesbanco tax income in 2022. The effff eff ctive tax rate was 18.7% and 19.7% forff recognized $3.5 million and $2.6 million in New Markets Tax Credits forff the years ended December 31, 2022 and 2021, respectively. TATT BLBB E 1. NENN T INII TNN ETT REE ER SEE T INII CNN OCC MOO EMM lll arll srr inii thtt ousands)s (dol (( Net interest income ................................................................................................. $ Taxabla e-equivalent adjustments to net interest income.......................................... Net interest income, fulff Net interest spread, non-taxabla e-equivalent............................................................ Benefiff t of net non-interest bearing liabia lities ......................................................... Net interest margin.................................................................................................. Taxabla e-equivalent adjustment ............................................................................... ly taxabla e-equivalent ......................................................... Net interest margin, fulff ly taxabla e-equivalent ......................................................... $ 2022 For the years ended December 31, 2021 2020 474,313 5,002 479,315 $ $ 457,933 4,296 462,229 $ $ 479,480 4,519 483,999 3.02% 0.15% 3.17% 0.03% 3.20% 2.98% 0.10% 3.08% 0.03% 3.11% 3.14% 0.20% 3.34% 0.03% 3.37% Net interest income, which is Wesbanco’s largest source of revenue, is the diffff eff rence between interest income on earning assets, primarily loans and securities, and interest expense on liabia lities, primarily deposits and short and long-term borrowings. Net interest income is affff eff cted by the general level of,ff and changes in interest rates, the steepness and shapea of the yield curve, changes in the amount and composition of interest earning assets and interest bearing liabia lities, as well as the frff equency of repricing of existing assets and liabia lities. Net interest income increased $16.4 million or 3.6% in 2022 compared to 2021, due to a 9 basis point increase in the net interest margin to 3.20%, as the yield on earning assets increased at a faff ster rate than the rate on interest bearing liabia lities. The net interest margin was positively impacted frff om the 425 basis point increase in the feff deral funds rate during 2022. In addition, PPP loans contributed a total of $6.6 million in interest and feff e accretion income, which equated to 3 basis points of net interest margin in 2022 as compared to $30.8 million, or 10 basis points, in 2021, which partially mitigated io loans increased by 11.7% frff om December 31, 2021, due to higher new loan demand and the margin increase. Excluding PPP loans, portfolff ff 35 lower levels of commercial real estate loan payoffff sff . Purchase accounting accretion decreased in 2022, as appr oximately 6 basis points of accretion frff om prior acquisitions was included in the 2022 net interest margin as compared to 11 basis points in the 2021 net interest margin. Total average deposits, excluding CDs, increased in 2022 by $657.8 million or 5.6% compared to 2021, due to higher personal savings balances. The cost of interest bearing deposits increased by 11 basis points and the cost of total liabia lities increased by 14 basis points frff om 2021 to 2022. The increase in the cost is primarily due to the effff eff ct of the previously mentioned feff deral funds rate increases on the rates paid on interest bearing demand deposits, customer repurchase agreements, term Federal Home Loan Bank borrowings and junior subordinated debenturt es. a ff ff Interest income increased $28.7 million or 5.9% in 2022 compared to 2021 due to higher yields in most of the maja or earning asset categories. Earning asset yields were inflff uenced positively in 2022 compared to 2021 due primarily to the previously mentioned increases in the Federal Reserve’s feff deral funds rate by 425 basis points in 2022. Average loan balances decreased $296.7 million or 2.9% in 2022 compared to 2021, dued mostly to forff giveness of PPP loans and new loan demand not occurring until the second half of 2022. Loan yields increased by 18 basis points during 2022 to 4.19% due to the previously mentioned higher rate environment and its effff eff ct on the repricing of portfolff io loans, as well as higher offff eff red rates on new loans. Loans provide the greatest impact on interest income and the yield on earning assets as they have the largest balance and the highest yield within maja or earning asset categories. In 2022, average loans represented 67.4% of average earning assets, a decrease frff om 69.8% in 2021. Liquidity frff om stimulus deposits was invested during 2021 and the fiff rst half of 2022 into average taxaba le securities balances which increased $494.7 million or 16.7% frff om 2021, and represented 23.1% of total average earning assets in 2022. Taxabla e securities yields increased by 21 basis points in 2022 due to the effff eff ct of the higher rate environment on the variabla e rate portion of the investment portfolff io, which are typically tied to either LIBOR or SOFR. Decreased prepayments on mortgage-backed securities in the higher rate environment also furff ther benefiff tted the taxabla e securities yields due to reduced amortization on securities purchased at a premium. Tax-exempt securities yields decreased by 22 basis points in 2022 frff om 2021 due to calls of legacy higher rate tax-exempt securities and purchases of newly issued lower rate securities in the fiff rst half of 2022. The average balance of tax-exempt securities, which have the highest yields within securities, have increased frff om 17.6% of total average securities in 2021 to 18.6% of total average securities in 2022. Commercial loans with flff oors currently average 3.91% on appr oximately $3.3 billion or 43% of total commercial loans at December 31, 2022, as compared to $2.6 billion averaging 3.83% or 36% of commercial loans at December 31, 2021. Approximately 27% or $0.9 billion of these loans are currently priced at their flff oor, as compared to 63% or $1.6 billion at December 31, 2021. These loans typically do not adjust as rapia dly frff om their current flff oor level as compared to loans without flff oors, due to the amount of the rate change as compared to the flff oor rate or next repricing date. In addition, in a declining rate environment, customers may request rates below existing contractuat l flff oors, which we may grant forff competitive or other reasons. a Interest expense increased $12.3 million or 45.5% in 2022 as compared to 2021, due to increases in the cost of all interest bearing liabia lity categories in the higher rate environment. The cost of interest bearing liabia lities increased by 14 basis points frff om 2021 to 0.42% in 2022. Average interest bearing deposits remained relatively flff at frff om 2021 to 2022 as interest bearing demand and savings deposit increases were mostly offff sff et by a $359.1 million decrease in average certififf cates of deposit. The rate on interest bearing deposits increased 11 basis points to 0.27% frff om 2021 to 2022, primarily frff om increases in rates on interest bearing demand deposits, money market accounts and savings deposits in response to competitive pressures frff om higher market rates. Average non-interest bearing demand deposit balances increased frff om 2021 to 2022 by $256.2 million or 5.8%, and were 34.7% of total average deposits at December 31, 2022, compared to 33.5% at December 31, 2021, reflff ecting ongoing checking account marketing strategies. The average balance of FHLB borrowings decreased by $168.1 million frff om 2021 to 2022 due d with excess liquidity. New higher-rate to the maturt borrowings taken out in the last quarter of 2022 increased the average rate by 47 basis points to 2.27% frff om 1.80% in 2021. Average repurchase agreements combined with average subordinated debt and junior subordinated debt balances increased $65.1 million or 19.8% frff om 2021 to 2022, and their average rates paid increased by 24 and 77 basis points, respectively, over this same time period, due primarily to increases in In addition, Wesbanco issued $150.0 million of LIBOR and SOFR, the indices upon which this variabla e-rate type of borrowing is priced. subordinated debt in March of 2022 forff ity of legacy lower-rate FHLB borrowings throughout the past twelve months being funde capia tal and liquidity purpos es. rr ff 36 TATT BLBB E 2. AVEVV REE ARR GEGG BABB LALL NCNN ECC SHSS EHH EEE TSTT ANDNN NENN T INII TNN ETT REE ER SEE T MAMM RGIGG NII ANANN LYSYY ISS SII thtt ousands)s (dol srr inii lll arll (( ASSETS Due frff om banks-interest bearing ........ $ Loans, net of unearned income (1)...... Securities: (2) Taxaba le ................................... 3,461,414 Tax-exempt (3).......................... 789,564 Total securities ...................... 4,250,978 Other earning assets........................ 15,265 Total earning assets (3).................... 14,961,650 Other assets .................................. 1,917,891 Total Assets.................................. $ 16,879,541 LIABILITIES AND Average Balance 2022 Interest For the years ended December 31, 2021 Average Rate Average Balance Interest Average Rate Average Balance 2020 Interest Average Rate 611,482 10,083,925 $ 5,755 422,401 860,249 0.94% $ 4.19% 10,380,605 $ 1,156 415,965 0.13% $ 4.01% 548,078 10,874,763 $ 1,175 465,677 66,123 23,820 89,943 559 518,658 2,966,745 1.91% 632,187 3.02% 3,598,932 2.12% 3.66% 25,481 3.47% 14,865,267 2,063,110 $ 16,928,377 50,401 20,457 70,858 1,284 489,263 1.70% 3.24% 1.97% 5.04% 3.29% 2,281,905 616,808 2,898,713 60,054 14,381,608 2,061,096 $ 16,442,704 53,594 21,518 75,112 3,832 545,796 SHAREHOLDERS’ EQUITY Interest bearing demand deposits ....... $ Money market accounts................... Savings deposits ............................ Certififf cates of deposit ..................... Total interest bearing deposits............................. Federal Home Loan Bank borrowings................................. Repurchase agreements ................... Subordinated debt and junior subordinated debt ........................ 3,314,384 1,774,152 2,692,568 1,098,614 $ 12,181 3,562 4,115 4,089 0.37% $ 0.20% 0.15% 0.37% 3,193,425 1,760,540 2,425,527 1,457,730 $ 3,669 1,803 1,031 7,623 0.11% $ 0.10% 0.04% 0.52% 2,572,248 1,611,135 2,084,576 1,814,693 $ 7,069 4,616 1,802 13,562 8,879,718 23,947 0.27% 8,837,222 14,126 0.16% 8,082,652 27,049 175,104 146,590 3,968 568 2.27% 0.39% 343,185 149,001 248,192 10,860 4.38% 180,649 6,167 227 6,514 1.80% 0.15% 1,135,934 357,100 24,701 1,729 3.61% 193,693 8,318 Total interest bearing liabia lities (4)....................... 9,449,604 39,343 0.42% 9,510,057 27,034 0.28% 9,769,379 61,797 Non-interest bearing demand deposits..................................... Other liabia lities.............................. Shareholders’ equity ....................... Total Liabia lities and Shareholders’ 4,708,758 205,670 2,515,509 Equity....................................... $ 16,879,541 4,452,590 201,393 2,764,337 3,781,583 240,340 2,651,402 $ 16,928,377 $ 16,442,704 Taxabla e equivalent net interest spread . Taxabla e equivalent net interest margin (3).................................. $ 479,315 3.05% 3.20% $ 462,229 3.01% 3.11% $ 483,999 0.21% 4.28% 2.35% 3.49% 2.59% 6.38% 3.80% 0.27% 0.29% 0.09% 0.75% 0.33% 2.17% 0.48% 4.29% 0.63% 3.17% 3.37% (1) (2) (3) (4) credit losses and net of unearned income. Includes non-accruarr Gross of allowance forff sale. Loan feff es included in interest income on loans were $8.8 million, $26.3 million and $16.2 million foff r the years ended December 31, 2022, 2021 and 2020, respectively. As part of loan feff es, PPP the years ended December 31, 2022, 2021 and 2020, respectively. Additionally, loan loan feff es were $5.9 million, $25.3 million and $13.4 million forff accretion included in interest income on loans acquired frff om prior acquisitions was $8.0 million, $13.3 million and $17.0 million forff the years ended December 31, 2022, 2021 and 2020, respectively. Average yields on securities availabla e-forff Taxabla e equivalent basis is calculated on tax-exempt securities using a rate of 21% forff Accretion on interest bearing liaba ilities acquired frff om prior acquisitions was $1.1 million, $3.1 million and $9.5 million foff r the years ended December 31, 2022, 2021 and 2020, respectively. -sale have been calculated based on amortized cost. all periods presented. l and loans held forff 37 TATT BLBB E 3. RARR TETT /EE V// OVV LOO UMUU EMM ANANN LYSYY ISS SII OF CHCC AHH NGNN EGG SEE INII INII TNN ETT REE ER SEE T INII CNN OCC MOO EMM ANDNN INII TNN ETT REE ER SEE T EXEE PXX EPP NEE SNN ESS (1)(( thtt ousandsdd )s (i(( nii Increase (decrease) in interest income: 2022 Compared to 2021 2021 Compared to 2020 Volume Rate Net Increase (Decrease) Volume Rate Net Increase (Decrease) Due frff om banks—interest bearing.............................. $ Loans, net of unearned income................................... Taxabla e securities ....................................................... Tax-exempt securities (2) ........................................... Other earning assets.................................................... Total interest income change (2) ............................ (427) $ (12,097) 9,003 4,821 (431) 869 Increase (decrease) in interest expense: Interest bearing demand deposits ............................... Money market............................................................. Savings deposits ......................................................... Certififf cates of deposit................................................. Federal Home Loan Bank borrowings........................ Repurchase agreements .............................................. Subordinated debt and junior subordinated debt ........ Total interest expense change................................. Net interest income increase (decrease) (2).................... $ 144 14 125 (1,628) (3,535) (4) 2,766 (2,118) 2,987 $ 5,026 18,533 6,719 (1,458) (294) 28,526 8,368 1,745 2,959 (1,906) 1,336 345 1,580 14,427 14,099 $ $ 4,599 6,436 15,722 3,363 (725) 29,395 8,512 1,759 3,084 (3,534) (2,199) 341 4,346 12,309 17,086 $ $ 518 (20,598) 13,769 527 (1,866) (7,650) 1,416 393 258 (2,351) (14,842) (690) (534) (16,350) 8,700 $ (537) $ (29,114) (16,962) (1,588) (682) (48,883) (4,816) (3,206) (1,029) (3,588) (3,692) (812) (1,270) (18,413) (30,470) $ $ (19) (49,712) (3,193) (1,061) (2,548) (56,533) (3,400) (2,813) (771) (5,939) (18,534) (1,502) (1,804) (34,763) (21,770) (1) (2) Changes to rate/volume are allocated to both rate and volume on a proportionate dollar basis. ly taxabla e-equivalent (FTE) and annualized basis. The FTE basis adjusts forff The yield on earning assets and the net interest margin are presented on a fulff the tax benefiff t of income on certain tax-exempt loans and investments using the feff deral statutt oryrr all periods presented. Wesbanco believes this measure to be the prefeff rred indud stryrr measurement of net interest income and provides relevant comparison between taxabla e and non-taxabla e amounts. tax rate of 21% forff PROVISION FOR CREDIT LOSSES - LOANS a a opriate to absa orbr opriate to absa orbr The provision forff lifeff time expected losses forff lifeff time expected losses on unfunde credit losses – loans is the amount to be added to the allowance forff credit losses – loans aftff er net charge-offff sff have been deducted to bring the allowance to a level considered appr io loans. The provision forff credit losses – loan commitments is the amount to be added to the allowance foff r credit losses foff r loan commitments to bring thataa allowance to a level considered appr credit losses - loans and loan commitments was ($1.7) million in 2022 compared to ($64.3) million in 2021 as a result of worsening macroeconomic faff ctors over the reasonaba le loan commitments. Furthermore, and supportabla e forff ecast period of one year, primarily increasing the allowance forff the increase to the provision was driven by qualitative faff ctors, which addressed the risk of rising interest rates and offff iff ce portfolff io concentration. Non-perforff ming loans were 0.39% of total loans as of December 31, 2022, and decreased frff om 0.41% of total loans at the end of 2021. Non- perforff ming assets were 0.40% of total loans and other real estate and repossessed assets as of December 31, 2022, decreasing frff om 0.41% at the end of 2021. Criticized and classififf ed loans were 2.34% of total loans, decreasing frff om 3.75% as of December 31, 2021, primarily dudd e to improvements in loans categorized as criticized or classififf ed earlier in the pandemic. Past due loans at December 31, 2022 were 0.19% of total loans, compared to 0.36% at December 31, 2021. (Please see the Credit Quality and Allowance forff Credit Losses – Loans and Loan Commitments section of this MD&A forff d loan commitments. The provision forff loan losses and allowance forff additional discussion). all portfolff ff 38 TATT BLBB E 4. NONN NOO -NN I- NII TNN ETT REE ER SEE T INII CNN OCC MOO EMM thtt ousands)s srr inii t feff es ................................................................................................... $ (dol lll arll (( Trusrr Service charges on deposits ....................................................................... Electronic banking feff es.............................................................................. Net securities brokerage revenue............................................................... Bank-owned lifeff insurance ........................................................................ Mortgage banking income ......................................................................... Net securities (losses) gains....................................................................... Net gain on other real estate owned and other assets ................................ Net insurance services revenue.................................................................. Debit card sponsorship income.................................................................. Payment processing feff es............................................................................ Swapa feff e and valuation income ................................................................. Other .......................................................................................................... Total non-interest income .......................................................................... $ For the years ended December 31, 2022 2021 $ Change % Change 27,551 26,281 20,002 9,525 10,728 5,129 (1,777) 482 3,749 — 3,352 7,067 5,302 117,391 $ $ 29,511 22,412 19,318 6,896 8,936 19,528 1,113 4,816 4,095 646 3,100 6,481 5,933 132,785 $ $ (1,960) 3,869 684 2,629 1,792 (14,399) (2,890) (4,334) (346) (646) 252 586 (631) (15,394) (6.6) 17.3 3.5 38.1 20.1 (73.7) (259.7) (90.0) (8.4) (100.0) 8.1 9.0 (10.6) (11.6) Non-interest income is a signififf cant source of revenue and an important part of Wesbanco’s results of operations, as it represented 19.8% and 22.5% of total revenue forff 2022 and 2021, respectively. Wesbanco offff eff rs its customers a wide range of retail, commercial, investment and electronic banking services, which are viewed as a vital component of Wesbanco’s aba ility to attract and maintain customers, as well as providing additional feff e income beyond normal spread-related income to Wesbanco. Non-interest income decreased $15.4 million or 11.6% in 2022 compared to 2021, primarily due to decreases in trusrr t feff es, mortgage banking income, net securities gains (losses), and net gains on other real estate owned and other assets. The decreases were slightly offff sff et by increases in service charges on deposits, net securities brokerage revenue and bank-owned lifeff insurance income. Trurr st feff es decreased $2.0 million or 6.6% in 2022 compared to 2021, dud e to a decline in the market value of trurr st assets, which were $4.9 t assets include managed l the WesMark Funds, a proprietaryr group of mutuat t and Investment Services, were $0.8 billion and $1.0 billion as of December 31, 2022 and December 31, billion at December 31, 2022, as compared to a record $5.6 billion at December 31, 2021. As of December 31, 2022, trusrr assets of $3.9 billion and non-managed (custodial) assets of $1.0 billion. Assets managed forff funds ff 2021, respectively, and are included in managed assets. that is advised by Wesbanco Trusrr Service charges on deposits increased $3.9 million or 17.3% frff om 2021 to 2022, and electronic banking feff es, which include debit card interchange feff es, increased $0.7 million or 3.5% over the same time period, reflff ecting increased transaction volume and general consumer spending. Net securities brokerage revenue increased to a record $9.5 million in 2022, reflff ecting a $2.6 million or 38.1% increase frff om 2021 due to certain investment products, including fiff xed rate annuities, during the higher interest rate organic growth and customers' prefeff rences forff environment in 2022. Bank-owned lifeff insurance income increased $1.8 million or 20.1% in 2022 compared to 2021 due to an increase in mortality-related benefiff ts received in the current period as well as an increase in the cash surrender value due to the purchase of an additional $40 million of bank- owned lifeff insurance in the third quarter of 2021. Mortgage banking income decreased $14.4 million or 73.7% in 2022 compared to 2021, due to a decrease in mortgage loan originations resulting frff om the higher interest rate environment in 2022, combined with a lower percentage of loans sold into the secondaryr market as more residential mortgages were retained in the loan portfolff io. For 2022, total mortgage production was $1.0 billion, which was a decrease of 28.9% frff om total production in 2021. In 2022, $245.4 million in mortgages were sold into the secondaryr market at a net margin of 2.1% as compared to $750.9 million at a net margin of 2.6% in 2021. Included in mortgage banking income and the calculation of net margin noted aba ove are gains of $3.2 million and $0.4 million frff om the faff ir value adjustments on mortgage loan commitments and related derivatives forff 2022 and 2021, respectively. Net securities (losses) gains include both gains and losses on investment security transactions, including sales and calls, as well as market value adjustments on the defeff rred compensation plan and other equity securities. In 2022, net securities (losses) gains decreased $2.9 million compared to 2021. There were no availabla e-forff ity debt investment security sales in either year. Contributing to most of the overall decrease, the market value adjustments on the defeff rred compensation plan decreased by $2.6 million frff om 2021 to 2022. These market adjustments had an offff sff etting effff eff ct in employee benefiff ts expense. -sale or held-to-maturt 39 Net gain on other real estate owned and other assets decreased $4.3 million in 2022 as compared to 2021, due mostly to the market value adjustments that were recognized on an investment made by Wesbanco’s Community Development Corpor ation in a start-up fiff rm more than ten years ago that was acquired in 2021 by a public company. This investment was sold during 2022. The market value adjustments preceding the sale of the investment totaled losses of $1.0 million in 2022 as compared to gains of $3.8 million in 2021. rr Swapa feff e and valuation income, which includes faff ir value adjustments, increased $0.6 million or 9.0% in 2022 as compared to 2021, due io in 2022 as compared to 2021. In 2022, executed totaling in 2022 totaled $2.7 to an increase in new swapsa new swapsa $158.7 million in notional principal resulting in $4.5 million in feff e income in 2021. Fair market value adjustments on swapsa million as compared to $2.0 million in 2021. executed totaled $254.3 million in notional principal resulting in $4.4 million in feff e income, compared to new swapsa originated and greater positive faff ir value adjustments on the swapa portfolff TATT BLBB E 5.55 NONN NOO -NN I- NII TNN ETT REE ER SEE T EXEE PXX EPP NEE SNN ESS lll arll turt srr inii thtt ousands)s (dol (( Salaries and wages..................................................................................... $ Employee benefiff ts ..................................................................................... Net occupancy ........................................................................................... Equipment and softff ware ............................................................................ Marketing................................................................................................... FDIC insurance.......................................................................................... Amortization of intangible assets .............................................................. ing and merger-related expenses............................................... Restrucrr Franchise and other miscellaneous taxes................................................... Consulting, regulatoryr and advisoryr feff es .................................................. ATM and electronic banking interchange expenses.................................. Postage and courier expenses .................................................................... Supplies ..................................................................................................... Legal feff es................................................................................................... Communications........................................................................................ Other real estate owned and forff eclosure expenses .................................... Other .......................................................................................................... Total non-interest expense......................................................................... $ For the years ended December 31, 2022 167,028 37,771 26,105 32,508 9,335 7,901 10,278 1,723 12,012 13,168 5,903 4,602 3,865 3,165 4,688 789 16,125 356,966 $ $ 2021 154,242 41,033 26,843 30,006 8,634 4,150 11,457 6,717 10,459 12,642 8,238 5,151 3,819 3,440 4,157 219 21,936 353,143 $ $ $ Change % Change 12,786 (3,262) (738) 2,502 701 3,751 (1,179) (4,994) 1,553 526 (2,335) (549) 46 (275) 531 570 (5,811) 3,823 8.3 (7.9) (2.7) 8.3 8.1 90.4 (10.3) (74.3) 14.8 4.2 (28.3) (10.7) 1.2 (8.0) 12.8 260.3 (26.5) 1.1 Non-interest expense in 2022, excluding restrucrr ing and merger-related expenses, increased $8.8 million or 2.5% compared to 2021. The primaryr drivers of this increase were higher salaries and wages, equipment and softff ware costs, FDIC insurance expense and frff anchise and other miscellaneous taxes. These increases were slightly offff sff et by decreases in employee benefiff ts expense, ATM and electronic banking interchange expenses, amortization of intangible assets and other operating expenses. Restrucrr ing and merger related expenses of $1.7 million in 2022 were associated with the branch restrucrr ing and merger-related expenses in 2021 totaling $6.7 million were related to turt the core systems conversion and branch restrucrr ing while the restrucrr ing. turt turt turt turt Salaries and wages increased $12.8 million or 8.3% in 2022 compared to 2021 due primarily to increases in salaries and incentive compensation expense combined with a decrease in defeff rred loan contra origination costs. Salaryr expense increased by $9.5 million in 2022 as compared to 2021 due to normal merit increases and higher staffff iff ng levels. Short term incentive expense increased $0.7 million dudd e to overall higher perforff mance in 2022 as compared to 2021, with the exception of the mortgage incentive compensation plan. Defeff rred loan contra origination costs decreased in 2022 due to lower loan origination volume, primarily in the residential real estate category.r Employee benefiff ts expense decreased $3.3 million or 7.9% in 2022 compared to 2021 due to a $2.6 million reduction in the market adjustment on the underlying investments of the defeff rred compensation plan, which has an offff sff etting effff eff ct in net securities gains (losses) and also frff om a reduction in health insurance expense due to reduced claims in 2022. Equipment and softff ware costs increased $2.5 million or 8.3% in 2022 compared to 2021, due to the core conversion, continuous turt e, and increased usage of digital banking services. Also, since the core conversion improvements in technology and communication infrff astrucrr in the third quarter of 2021, appr oximately $1.0 million per quarter in online banking costs have been recorded in equipment and softff ware, while a in prior periods these costs were recorded in other operating expenses. Such costs are now part of the monthly core softff ware invoice and cannot be separated as they were with a third party vendor previously. 40 FDIC insurance increased $3.8 million or 90.4% in 2022 compared to 2021, dudd e to higher quarterly assessment rates. The increase is dud e to less faff vorabla e fiff nancial ratios used in the rate calculation, particularly those related to high risk assets, core earnings and balance sheet liquidity. In addition, a $1.0 million refundff was received in the second quarter of 2021 frff om prior period call report adjustments, also contributing to the increase year-over-year. turt Restrucrr ing and merger-related expenses in 2022 totaled $1.7 million, a decrease frff om $6.7 million incurred in 2021. The $1.7 million of expenses in 2022 were comprised of branch closure and lease termination expenses associated with the closure of 13 branches throughout ing and merger-related expenses in 2021 totaling $6.7 million were comprised of $4.8 million in expenses related to the core 2022. The restrucrr banking softff ware conversion, including termination feff es of existing contracts, and $1.9 million in branch closure and lease termrr ination expenses associated with the closure of 27 branches throughout 2021. turt Franchise and other miscellaneous taxes increased $1.6 million or 14.8% in 2022 compared to 2021, primarily due to increases in frff anchise and personal property taxes across Wesbanco's foot ff prt int. ATM and electronic banking interchange expenses decreased $2.3 million or 28.3% in 2022 as compared to 2021, due to a reduction in ACH and ATM processing charges related to a change in providers that occurred in conjunction with our core banking softff ware system conversion in the third quarter of 2021. Other operating expenses decreased $5.8 million or 26.5% in 2022 as compared to 2021, due to $4.5 million in legal settlement costs incurred in 2021 and due to the reclassififf cation of online banking costs mentioned previously into equipment and softff ware costs. INCOME TAXES income taxes was $44.3 million forff 2022, which is a $15.3 million decrease as compared to $59.6 million in 2021. The The provision forff decrease in the provision forff income taxes is due in part to a decrease in the effff eff ctive tax rate to 18.7% in 2022 compared to 19.7% in 2021, which is due to an increase in net tax-exempt interest income on securities and loans of state and political subdivisions and general business credits. In addition, the decrease resulted frff om lower pre-tax income in 2022 as compared to 2021. The decrease in pre-tax income is primarily driven by the $64.3 million negative provision forff credit losses in 2022. credit losses recorded in 2021, as compared to a $1.7 million negative provision forff FINANCIAL CONDITION Total deposits and shareholders' equity decreased 3.2% and 9.9%, respectively, while total assets remained relatively unchanged compared to December 31, 2021. Total securities decreased $242.4 million or 6.0% frff om December 31, 2021 to December 31, 2022, primarily driven by an increase in the net unrealized losses of availabla e-forff -sale securities of $339.4 million. The securities decrease was partially offff sff et by the investment of excess liquidity in the fiff rst half of 2022 frff om increased cash balances resulting frff om customers' higher savings. Total portfoff lio loans increased $969.3 million or 10.0% in 2022 as a result of strong growth across Wesbanco's markets. Deposits decreased $434.8 million or 3.2% frff om year end 2021 primarily reflff ecting the impact of inflff ationaryr pressures and rising costs over the economy. Savings deposits and non- interest bearing demand deposits increased 7.0% and 2.4%, respectively. rr Deposit balances were also somewhat impacted by bonus and royalty payments frff om Marcellus and Utica shale energy companies in Wesbanco’s southwestern Pennsylvania, eastern Ohio and northern West Virginia markets totaling $96.7 million and $68.9 million forff the years ended December 31, 2022 and December 31, 2021, respectively. The decrease in certififf cates of deposit of $406.8 million is primarily dud e to an ate strategy designed to increase and remix retail deposit relationships and reduce single-service customers with a focff us on overall overall corpor ing certififf cates produdd cts that can be offff eff red at a lower cost to Wesbanco. The decrease was also impacted by lower offff eff red rates on certain maturtt ity deposit types. Total borrowings increased 144.5% or $662.8 million during 2022, as of deposit and customer prefeff rences forff loan growth increased and required additional fundi ng generated through FHLB borrowings in the second half of 2022. Also, in March of 2022, Wesbanco completed the issuance of $150.0 million in aggregate principal amount of subordinated debenturt es. The subordinated debentut res have a fiff xed rate of 3.75% forff the next fiff ve years at Three Month SOFR plus a spread of 1.787%. the fiff rst fiff ve years and a flff oating rate forff other non-maturt ff Total shareholders’ equity decreased $266.5 million or 9.9%, compared to December 31, 2021, primarily due to the repurchase of common shares, net of restricted stock vesting activity totaling $119.1 million, the declaration of common and prefeff rred shareholder dividends totaling $81.3 million and $10.1 million, respectively, and a $257.3 million other comprehensive loss. Shareholders' equity was positively impacted by net income of $192.1 million forff the year ended December 31, 2022. 41 SECURITIES TATT BLBB E 6. COCC MOO PMM OSOO ISS TITT OII NOO OF SESS CURUU IRR TITT EII SEE lll arll srr inii thtt ousands)s (dol (( Equity securities (at faff ir value) ................................................................ $ Availabla e-forff -sale debt securities (at faff ir value) U.S. Government sponsored entities and agencies .............................. Residential mortgage-backed securities and collateralized mortgage obligations of government sponsored entities and agencies ........................................................ Commercial mortgage-backed securities and collateralized mortgage obligations of government sponsored entities and agencies ........................................................ Obligations of states and political subdivisions................................... rr ate debt securities...................................................................... Corpor Total availabla e-forff -sale debt securities ............................................ $ Held-to-maturt ity debt securities (at amortized cost) U.S. Government sponsored entities and agencies .............................. $ Residential mortgage-backed securities and -sale and equity securities: collateralized mortgage obligations of government sponsored entities and agencies ........................................................ Obligations of states and political subdivisions................................... ate debt securities...................................................................... rr Corpor Total held-to-maturt ity debt securities (1) ........................................ $ Total securities ......................................................................................... $ Availabla e-forff Weighted average yield at the respective year-end (2)............................ As a % of total securities ......................................................................... Weighted average lifeff (in years) .............................................................. Held-to-maturt Weighted average yield at the respective year-end (2)............................ As a % of total securities ......................................................................... Weighted average lifeff (in years) .............................................................. Total securities: Weighted average yield at the respective year-end (2)............................ As a % of total securities ......................................................................... (in years) .............................................................. Weighted average lifeff ity securities: December 31, 2022 2021 $ Change % Change 11,506 $ 13,466 $ (1,960) 225,970 236,978 (11,008) (14.6) (4.6) 1,846,053 2,285,213 (439,160) (19.2) 349,731 92,228 15,158 2,529,140 4,357 45,909 1,177,986 20,377 1,248,629 3,789,275 367,493 106,340 17,438 3,013,462 5,944 58,147 907,649 33,083 1,004,823 4,031,751 $ $ $ $ $ $ $ $ (17,762) (14,112) (2,280) (484,322) (1,587) (12,238) 270,337 (12,706) 243,806 (242,476) (4.8) (13.3) (13.1) (16.1) (26.7) (21.0) 29.8 (38.4) 24.3 (6.0) 2.23% 67.0% 6.7 2.96% 33.0% 9.5 2.45% 100.0% 7.6 1.55% 75.1% 5.0 2.92% 24.9% 5.6 1.89% 100.0% 5.2 (1) Total held-to-maturt December 31, 2022 and December 31, 2021, respectively. ity debt securities are presented on the balance sheet net of their allowance forff credit losses totaling $0.2 million and $0.3 million at (2) Weighted average yields have been calculated on a taxabla e-equivalent basis using the feff deral statutt oryrr tax rate of 21%. Total investment securities, which are a source of liquidity forff Wesbanco as well as a contributor to interest income, decreased by $242.5 io decreased by $484.3 ity io increased by $243.8 million or 24.3% due to $337.5 million in purchases of municipal bonds. The weighted average yield of the total io increased 56 basis points frff om 1.89% at December 31, 2021 to 2.45% at December 31, 2022, primarily due to increased higher rate million or 6.0% frff om December 31, 2021 to December 31, 2022. Over the same period, the availabla e-forff million or 16.1% primarily driven by an increase in unrealized losses and increased calls of agency and municipal securities. The held-to-maturt portfolff portfolff security purchases and variabla e rate security yields increasing throughout the year. -sale portfolff Total gross unrealized securities losses increased $470.4 million, frff om $40.3 million as of December 31, 2021 to $510.7 million at December 31, 2022. The increase in unrealized losses frff om December 31, 2021, was due to an increase in market rates during 2022 causing market prices to decrease on the lowest yielding securities, particularly those purchased since the start of the pandemic. Wesbanco believes that credit losses. Please refeff r to none of the unrealized losses on availaba le-forff Note 3, “Securities,” of the Consolidated Financial Statements forff additional inforff mation. Wesbanco does not have any investments in private mortgage-backed securities or those that are collateralized by sub-prime mortgages, nor does Wesbanco have any exposure to collateralized debt obligations or government-sponsored enterprrr -sale debt securities at December 31, 2022 require an allowance forff ise prefeff rred stocks. 42 Net unrealized losses on availabla e-forff tions resulting frff om changes in market rates in relation to fiff xed yields in the availabla e-forff -sale securities included in accumulated other comprehensive income, net of tax, as of December 31, 2022 and December 31, 2021 were $261.8 million and $4.7 million, respectively. These net unrealized pre-tax losses represent temporaryr flff uctuat io, and on an aftff er-tax basis are as an adjustment to other comprehensive income in shareholders’ equity. Net unrealized pre-tax (losses) gains in the held-to- accounted forff in other comprehensive income, were ($164.2) million at December 31, 2022, compared to $23.6 maturt io, which are not accounted forff compared to 25% one million as of December 31, 2021. With appr year ago, the recent volatility in interest rates does not have as much impact on other comprehensive income as if the entire portfolff io were included in the availabla e-forff oximately 33% of the investment portfolff io in the held-to-maturt -sale category.rr ity category,r -sale portfolff ity portfolff a Equity securities, of which a portion consists of investments in various mutuat ts forff med in connection with a key tions on equity securities are offff iff cer and director defeff rred compensation plan, are recorded at faff ir value. Gains and losses due to faff ir value flff uctuat included in net securities gains or losses. For those equity securities relating to the key offff iff cer and director defeff rred compensation plan, the corresponding change in the obligation to the employee is recognized in employee benefiff ts expense. held in grantor trusrr l funds ff the investment portfolff On Januaryrr 1, 2020, Wesbanco adopted CECL forff io are analyzed quarterly to determine if an allowance forff ity debt portfolff se of historical fiff nancials of all corpor ity investments. Upon adoption, the Company recognized $0.2 million the held-to-maturt io as of Januaryr 1, 2020. The corprr orate and to opening retained earnings, which represented the CECL allowance forff current expected credit municipal bonds in Wesbanco’s held-to-maturt l historic defaff ult and losses is warranted. Wesbanco uses a databaa rates on rated and non-rated transactions to estimate expected credit losses on an individual security basis. The expected credit losses recoveryrr expected credit losses on the balance sheet, which is deducted frff om the amortized are adjusted quarterly and are recorded in an allowance forff credit losses. cost basis of the held-to-maturt ity securities, which was $9.5 million and $7.0 million as of December 31, 2022 and 2021, Accruerr d interest receivabla e on held-to-maturt respectively, is excluded frff om the estimate of credit losses. Held-to-maturt ity investments in U.S. Government sponsored entities and agencies as well as mortgage-backed securities and collateralized mortgage obligations, which are all either issued by a direct governmental entity or a government-sponsored entity, have no historical evidence supporting expected credit losses; thereforff e, Wesbanco has estimated these losses at zero, and will monitor this assumption in the futff urt e forff any economic or governmental policies that could affff eff ct this assumption. Wesbanco recorded an allowance on held-to-maturt ity debt securities of $0.2 million and $0.3 million as of December 31, 2022 and 2021, respectively. io as a contra asset. The losses are recorded on the income statement in the provision forff ate and municipal issuers and actuat ity portfolff rr TATT BLBB E 7. MAMM TURUU IRR TY DIDD SII TRTT IRR BII UTUU ITT OII NOO ANDNN YIYY EII LEE D ANANN LYSYY ISS SII OF SESS CURUU IRR TITT EII SEE The folff lowing tabla e presents the tax-equivalent yields of held-to-maturt ity debt securities by contractuat l maturt ity at December 31, 2022. In some instances, the issuers may have the right to call or prepay obligations without penalty prior to the contractuat l maturt ity date. Weighted-average yield (1): U.S. Government sponsored entities and agencies... Residential mortgage-backed securities and collateralized mortgage obligations of government sponsored entities and agencies (2) ... Obligations of states and political subdivisions (3).. ate debt securities .......................................... rr Corpor Total weighted average yield........................................ One Year or Less One to Five Years Five to Ten Years Over Ten Years Mortgage- backed securities Total — — — — 2.16% 2.16% — 2.94% — 2.94% — 3.17% 3.54% 3.23% — 2.62% — 2.62% — 3.18% — 3.18% 2.53% — — 2.50% 2.53% 2.95% 3.54% 2.96% (1) (2) (3) Yields are determined based on the lower of the yield-to-call or yield-to-maturt Certain U.S. Government sponsored agency, mortgage-backed and collateralized mortgage securities, which have prepayment provisions, are not assigned to maturt Average yields on obligations of states and political subu divisions have been calculated on a taxaba le-equivalent basis using the feff deral statut toryrr 21%. tions in their prepayment speeds. ity categories due to flff uctuat tax rate of ity. Cost-method investments consist primarily of FHLB of Pittsburgh stock totaling $36.2 million and $15.9 million at December 31, 2022 and 2021, respectively, and are included in other assets in the Consolidated Balance Sheets. Wesbanco’s municipal portfolff io as of December 31, 2022 compared to 25.2% as of December 31, 2021, which carries diffff eff rent risks that are not as prevalent in other security types contained in the portfoff lio. The foff llowing taba le presents the allocation of the individual bonds in the municipal bond portfolff io based on the combined ratings of two maja or bond credit rating agencies (at faff ir value): io comprises 33.5% of the overall securities portfolff 43 TATT BLBB E 8. MUNUU INN CII ICC PII APP L BONOO DNN RARR TITT NII GNN SGG lll arll srr inii (dol (( Municipal bonds (at faff ir value) (1): thtt ousands)s December 31, 2022 December 31, 2021 Amount % of Total Amount % of Total Investment Grade - Prime...................................................................... $ Investment Grade - High ....................................................................... Investment Grade - Upper Medium....................................................... Investment Grade - Lower Medium ...................................................... Not rated ................................................................................................ Total municipal bond portfolff io.................................................................. $ 122,914 850,746 131,457 1,064 4,636 1,110,816 11.1 76.6 11.8 0.0 0.5 100.0 $ $ 99,717 774,858 152,897 2,269 4,602 1,034,343 9.6 74.9 14.8 0.2 0.5 100.0 (1) The lowest availabla e rating was used when placing the bond into a categoryrr in the tabla e. Wesbanco’s municipal bond portfolff obligation and revenue bonds. The folff io at December 31, 2022, consists of $384.7 million of taxabla e and $726.1 million of tax-exempt general lowing tabla e presents additional inforff mation regarding the municipal bond type and issuer (at faff ir value): TATT BLBB E 9. COCC MOO PMM OSOO ISS TITT OII NOO OF MUNUU INN CII ICC PII APP L SESS CURUU IRR TITT EII SEE lll arll srr inii (dol (( Municipal bond type: thtt ousands)s December 31, 2022 December 31, 2021 Amount % of Total Amount % of Total General Obligation................................................................................. $ Revenue ................................................................................................. Total municipal bond portfolff Municipal bond issuer: io.................................................................. $ State Issued ............................................................................................ $ Local Issued ........................................................................................... Total municipal bond portfolff io.................................................................. $ 805,621 305,195 1,110,816 72,855 1,037,961 1,110,816 72.5 27.5 100.0 6.6 93.4 100.0 $ $ $ $ 740,858 293,485 1,034,343 42,717 991,626 1,034,343 71.6 28.4 100.0 4.1 95.9 100.0 Wesbanco’s municipal bond portfolff io is broadly spread across the United States. The folff lowing tabla e presents the top fiff ve states of municipal bond concentration based on total faff ir value at December 31, 2022: TATT BLBB E 10. COCC NOO CNN ECC NEE TNN RTT ARR TITT OII NOO OF MUNUU INN CII ICC PII APP L SESS CURUU IRR TITT EII SEE lll arll srr inii thtt ousands)s (dol (( Pennsylvania .................................................................................................................................... $ Califorff nia ......................................................................................................................................... Ohio.................................................................................................................................................. Texas ................................................................................................................................................ Illinois .............................................................................................................................................. All other states (1)............................................................................................................................ Total municipal bond portfolff io ........................................................................................................ $ December 31, 2022 Fair Value % of Total 196,815 193,717 94,415 87,085 44,181 494,603 1,110,816 17.7 17.4 8.5 7.8 4.0 44.6 100.0 (1) Wesbanco's municipal bond portfolff io contains obligations in the state of West Virginia totaling $31.2 million or 2.8% of the total municipal portfolff io. Wesbanco uses prices frff om independent pricing services and, to a lesser extent, indicative (non-binding) quotes frff om independent brokers, to measure the faff ir value of its securities. Wesbanco validates prices received frff om pricing services or brokers using a varietytt of methods, including, but not limited to, comparison to secondaryr pricing services, corroboration of pricing by refeff rence to other independent market data such as secondaryr broker quotes and relevant benchmark indices, review of pricing by personnel faff miliar with market liquidity and other market- related conditions, review of pricing service methodologies, review of independent auditor reports received frff om the pricing service regarding its internal controls, and through review of inputs and assumptions used in pricing certain securities thinly-traded or with limited observaba le data points. The procedures in place provide management with a suffff iff cient understanding of the valuation models, assumptions, inputs and pricing to reasonaba ly measure the faff ir value of Wesbanco’s securities. For additional disclosure relating to faff ir value measurement, refeff r to Note 16, “Fair Value Measurement” in the Consolidated Financial Statements. 44 LOANS AND LOAN COMMITMENTS Loans represent Wesbanco’s largest balance sheet asset classififf cation and the largest source of interest income. Commercial loanaa s include CRE, which is furff tion, and improved property loans; as well as other C&I loans that are not secured by real estate. Retail loans include residential real estate mortgage loans, home equity lines of credit (“HELOC”), and loans foff r other consumer rr purpos ther diffff eff rentiated between land and construcrr es. Loan commitments, which are not reported on the balance sheet, represent availabla e balances on commercial and consumer lines of credit, commercial letters of credit, deposit account overdraftff protection limits, certain loan guarantee contracts, and appr oved commitments to extend credit. Approved commitments, which have been accepted by the customer, are included net of any Wesbanco loan balances that are to be refiff nanced by the new commitment. However, typically not all appr oved commitments will ultimately be funde d. a a ff Loans and loan commitments are summarized in Tabla e 11. TATT BLBB E 11. LOAOO NSNN ANDNN COCC MOO MMM IMM TMTT EMM NEE TNN STT December 31, 2022 Commitments srr inii Balance Exposure 943,887 $ thtt ousands)s tion............................................. $ (dol lll arll (( LOANAA S Commercial real estate: Land and construcrr Improved property ................................................. Total commercial real estate......................................... Commercial and industrial (1)....................................... Total commercial loans ............................................... Residential real estate ................................................. Home equity lines of credit .......................................... Consumer ................................................................ Total retail loans........................................................ io loans ................................................... Total portfolff Loans held foff r sale..................................................... Deposit overdraftff limits............................................... Total loans ............................................................... $ Letters of credit included above (1) Includes $8.1 million and $162.7 million of SBA PPP loans at December 31, 2022 and December 31, 2021, respectively. 1,093,848 $ 211,275 1,305,123 1,359,275 2,664,398 359,467 1,190,386 39,127 1,588,980 4,253,378 12,367 380,143 4,645,888 $ 30,362 2,037,735 5,328,732 7,366,467 2,938,670 10,305,137 2,500,051 1,885,451 265,467 4,650,969 14,956,106 20,616 380,143 15,356,865 5,117,457 6,061,344 1,579,395 7,640,739 2,140,584 695,065 226,340 3,061,989 10,702,728 8,249 — ..................................... 10,710,977 $ $ $ $ a Balance 2021 Commitments Exposure 833,880 $ 4,705,088 5,538,968 1,590,320 7,129,288 1,721,378 605,682 277,130 2,604,190 9,733,478 25,277 — 9,758,755 $ $ 610,557 $ 302,219 912,776 1,285,726 2,198,502 348,978 878,710 63,004 1,290,692 3,489,194 35,015 370,439 3,894,648 $ 29,017 1,444,437 5,007,307 6,451,744 2,876,046 9,327,790 2,070,356 1,484,392 340,134 3,894,882 13,222,672 60,292 370,439 13,653,403 Total portfolff io loans increased $969.3 million or 1.0% frff om December 31, 2021 to December 31, 2022, due to strong growth throughout the year in both the commercial real estate and residential real estate portfolff ios. Excluding PPP loans, total loans increased $1.1 billion or 11.7% over the last twelve months as the large maja ority of the remaining PPP loans were forff given or repaid over the course of the year. Commercial real estate loans increased $522.4 million or 9.4%, as improved property increased by 8.8% and land and construcrr tion loans increased 13.2%. Commercial and industrial loans decreased $10.9 million or 0.7% due to a $154.6 million decrease in PPP loan balances; excluding PPP loans, commercial and industrial loans increased $143.6 million or 10.1%. Residential real estate loans increased $419.2 million or 24.4% and home equity loans increased $89.4 million or 14.8%, while consumer loans decreased $50.8 million or 18.3%. Portfolff io loans are presented in the Consolidated Balance Sheets net of defeff rred loan feff es and costs and discounts on purchased loans. The net defeff rred loan costs were $9.6 million and $3.3 million as of December 31, 2022 and 2021, respectively. Wesbanco conducts a defeff rred loan cost study to determine the allowabla e costs to be defeff rred over the lifeff of the loan. Wesbanco’s defeff rred costs have continued to increase at a faff ster rate than the related customer defeff rred feff e income causing the balance of the defeff rred loan costs to outweigh the defeff rred loan feff es, primarily frff om home equity lines of credit, which io loan balances were $18.0 million and $25.9 million have little feff e income. Purchased loan discounts frff om acquisitions included in the portfolff as of December 31, 2022 and 2021, respectively. Loan accretion included in interest income on loans acquired frff om prior acquisitions was $8.0 million and $13.3 million forff the year ended December 31, 2022, recognized PPP loan feff es were $5.9 million compared to $25.3 million forff the year ended December 31, 2021. At December 31, 2022, $0.2 million of unaccreted net defeff rred feff e income remains to be recognized on the PPP loans, as compared to $6.1 million at December 31, 2021. the years ended December 31, 2022 and 2021, respectively. As part of loan feff e income forff t CRE loans at December 31, 2022 represent a signififf cant component of the loan portfolff io at 56.6% and increased 9.4% as compared to CRE tion loan balances increased $110.0 million or 13.2% frff om December 31, 2021 to balances at December 31, 2021. CRE—land and construcrr December 31, 2022, while CRE—improved property loans increased $412.4 million or 8.8% during the same period. C&I loans decreased $10.9 million or 0.7% frff om December 31, 2021 to December 31, 2022, due to the $154.6 million decline in outstanding PPP loans. The availabla e lines of credit within C&I loans decreased slightly frff om 65.5% at December 31, 2021 to 64.9% of total C&I revolving lines of credit exposure as of December 31, 2022. 45 oximately 78% of mortgages by dollar volume originated in 2022 forff Residential real estate mortgage loans increased $419.2 million frff om December 31, 2021 to December 31, 2022. Wesbanco retained io compared to 57% in 2021. As mortgage rates increase, the portfolff various mortgage products and related terms changes, and thus impacts what Wesbanco is abla e to sell into the secondaryr market. a appr the demand forff HELOC loans increased $89.4 million or 14.8% frff om December 31, 2021 to December 31, 2022 as $37.8 million in consumer HELOC loans that were previously classififf ed as consumer were transfeff rred to the HELOC segment. In addition, higher originations of HELOC products resulted frff om feff wer customers refiff nancing into fiff rst mortgage loans in the higher interest rate environment. Consumer loans decreased $50.8 million or 18.3% frff om December 31, 2021 to December 31, 2022 due primarily to the aforff ementioned loan transfeff r. Total loan commitments increased $751.2 million or 19.3% frff om December 31, 2021 to December 31, 2022. Commitments in the total oximately $392.3 million or 43.0%, C&I commitments increased $73.5 million or 5.7% and HELOC commitments io increased appr a CRE portfolff increased $311.7 million or 35.5%. Geographic Distribution —Wesbanco extends credit primarily within the market areas where it has branch offff iff ces, markets adjacent thereto, or markets that have a loan production offff iff ce. Loans outside of these markets are generally only made to establa ished customers that have other business relationships with Wesbanco in its markets. Loans outside of Wesbanco’s markets represented appr oximately 4% and 2% of total loans at December 31, 2022 and December 31, 2021, respectively. These loans consist primarily of C&I, CRE-improved property loans, e lines of credit to wealth management customers, and residential real estate loans forff automobile loans to faff mily members of local customers. second residences or vacation homes, consumer purpos a rr The geographi a c distribution of the loan portfolff io, excluding deposit overdraftff limits and loans held forff sale, is summarized in Taba le 12. TATT BLBB E 12. GEGG OGRGG ARR PHPP IHH CII DIDD SII TRTT IRR BII UTUU ITT OII NOO OF LOAOO NSNN of outstt tantt dinii gs,s rounded tott nearest (pe(( tt rcentage wholell percent)t Pittsburgh, PA MSA.................................. Washington-Arlington-Alexandria December 31, 2022 (1) Commercial Real Estate Land and Construction Improved Property Commercial and Industrial Residential Real Estate Home Equity Lines Consumer Total 7% 10% 12% 13% 15% 7% 11% DC-VA-MD-WV MSA.......................... Columbus, OH MSA ................................. Baltimore-Columbia-Towson MD MSA .. Western Ohio MSAs ................................. Louisville, KY—Jeffff eff rson County MSA.. Upper Ohio Valley MSAs ......................... Other Ohio Locations ................................ Other West Virginia Locations ................. Huntington, WV-Ashland, KY MSA........ Lexington, KY—Fayette County MSA .... Other Kentuct ky Locations ........................ Morgantown, WV MSA............................ Parkersburg, WV-Marietta, OH MSA ...... Califorff nia-Lexington Park MD MSA ....... Adjacent States & Outside-of-ff Market....... Other Pennsylvania Locations................... Other Indiana Locations ............................ Other Marylr and Locations ........................ Frederick-Gaithersburg-Rockville MD MSA .......................................................... Total .......................................................... 12 13 3 14 14 2 6 2 3 10 3 1 2 — 4 1 2 — 14 9 8 5 8 4 6 5 3 4 5 4 2 2 4 1 2 4 8 8 2 6 11 13 14 5 3 1 3 3 2 3 4 — 2 — 13 12 11 11 4 5 5 4 2 4 4 3 1 1 4 1 1 1 3 7 4 8 4 10 9 9 3 2 9 3 4 1 1 6 1 1 2 4 2 4 3 22 11 15 5 1 5 5 7 — 5 2 — — 11 10 7 7 8 6 7 5 3 4 5 3 2 2 4 1 2 2 1 100% — 100% — 100% — 100% — 100% — 100% — 100% (1) Real estate secured loans are categorized based on the address of the collateral. All other loans are categorized based on the borrower’s address. The Upper Ohio Valley Metropolitan Statistical Areas (“MSAs”) include the Wheeling, West Virginia and Weirton, West Virginia- Steubenville, Ohio MSAs. Other West Virginia locations include the Fairmont-Clarksburg and Charleston MSAs as well as communities that are 46 not located within an MSA primarily in the northern, central and eastern parts of the state. The western Ohio MSAs include the Dayton-Springfiff eld and the Cincinnati-Middletown MSAs. Other Ohio locations include communities in Ohio that are not located within an MSA, the maja ority of which are located in southeastern Ohio. Other Indiana locations include communities in Indiana that are not located within an MSA, the maja ority of which are located in southern Indiana. Other Kentuct ky locations include the Elizabea thtown KY MSA along with other Kentuct ky locations that are not located within an MSA. Through the acquisition of OLBK, Wesbanco added the Baltimore-Columbia-Towson, MD MSA, Frederick- Gaithersburg-Rockville, MD MSA and Washington DC-Arlington-Alexandria, VA MSA as well as other Marylr and locations. Adjacent states include parts of Delaware and Virginia that are within close proximity to Wesbanco’s markets. Outside-of-ff market loans consist of loans in all other locations not included in any of the other defiff ned areas and have remained relatively unchanged over the past feff w years. CREDIT RISK The risk that borrowers will be unabla e or unwilling to repay their obligations is inherent in all lending activities. Repayment risk can be impacted by external events such as adverse economic conditions, social and political inflff uences that impact entire industries or maja or employers, individual loss of employment or other personal calamities and changes in interest rates. This inherent risk may be furff ted by the terms and strucrr turt e of each loan as well as potential concentrations of risk. The primaryrr goal of managing credit risk is to minimize the impact of all of these faff ctors on the quality of the loan portfolff ther exacerbar io. Credit risk is managed through the initial underwriting process as well as through ongoing monitoring and administration of the portfoff lio. Credit policies establa ish standard underwriting guidelines forff opriate evaluation of the credit characteristics of each borrower. This evaluation focff uses on the suffff iff ciency and sustainabia lity of the primaryrr source of repayment, the adequacy of collateral, if any, as a secondaryr source of repayment, potential foff r guarantor supu port, as a tertiaryrr source of repayment and other faff ctors unuu ique to each type of loan that may increase or mitigate their risk. The manner and degree of monitoring and administration of the portfoff lio varies by type and size of loan. each type of loan and require an appr a Credit risk is also managed by closely monitoring delinquency levels and trends and initiating collection effff orff ts at the earliest stage of delinquency. Wesbanco also monitors general economic conditions, including unemployment, housing activity and real estate values in its opriate based on market conditions, the perforff mance of one or more loan categories, markets. Underwriting standards are modififf ed when appr and other external faff ctors. An independent loan review func io to assess the adequacy and ff effff eff ctiveness of underwriting, loan documentation and portfolff tion also perforff ms periodic reviews of the portfolff io administration. a Each categoryrr of loans contains distinct elements of risk that impact the manner in which those loans are underwritten, strucrr tut red, terms and underwriting practices, together with specififf c risks associated witht each categoryr documented, administered and monitored. Customaryr of loans and Wesbanco’s processes forff managing those risks are discussed in the remainder of this section. Commercial Loans —The commercial portfolff loans oftff en involve multiple loans to one borrower or a group of related borrowers, thereforff e the potential forff be signififf cantly greater forff borrowers or groups of borrowers, industries and geographi c markets and by requiring appr commercial loans than forff io consists of loans to a wide range of business enterprrr ises of varyirr ng size. Many commercial loss on any single transaction can retail loans. Commercial loan risk is mitigated by limiting total credit exposure to individual opriate collateral or guarantors. a a Commercial loans are monitored forff potential concentrations of loans to any one borrower or group of related borrowers. At December 31, 2022 Wesbanco’s legal lending limit to any single borrower or their related interests appr oximated $246 million. The ten largest commercial relationships combined ranged frff om $662 million to $843 million during 2022. There were 20 relationships that exceeded $50 million at December 31, 2022. These large relationships generally consist of more than one loan to a borrower or their related entities. The single largest oximated $117 million at December 31, 2022 and consists of multiple loans to a business relationship foff r gasoline relationship exposure appr stations with convenience stores, which is in the retail sector. a a a ity, are appr Commercial loans, including renewals and extensions of maturt oved within a frff amework of individual lending authorities based oved by underwriters that are not responsible on the total credit exposure of the borrower. Loans with credit exposure up to $1 million are appr oval of a commercial banking executive, and loan origination. Loans with credit exposure greater than $1 million minimally require the appr forff loan origination. In the Mid-Atlantic credit exposures greater than $1.5 million require appr a oval of a credit committee comprised of senior management in the market, credit exposures greater than $5 million up to $15 million require appr market and credit offff iff cers not responsible forff oval of a centralized credit committee comprised of senior and executive management, credit offff iff cers, directors, and certain other non-voting qualififf ed persons that are not loan origination. Underwriters and credit offff iff cers do not receive incentive compensation based on loan origination volume. responsible forff Commercial banking executives receive incentive compensation based on multiple faff ctors that include loan origination, net growtht in outstanding loan balances, feff es, credit quality and portfolff loan origination. Credit exposures greater than $25 million require appr oval of a credit offff iff cer that is not responsible forff io administration requirements. a a a a 47 CRE – land and construcrr tion consists of loans to fiff nance land forff tion of residential dwellings forff ise, rtments and other commercial buildings that agriculturt al or minerals extraction, construcrr tion loans generally are made only when Wesbanco also may be owner-occupied or income-generating investments forff commits to the permanent fiff nancing of the project, has a takeout commitment frff om another lender forff the permanent loan or the loan is expected to be repaid frff om the sale of subu divided property. However, even if Wesbanco has a takeout commitment, construrr ction loans are underwritten as tion loans that did not have a takeout commitment if Wesbanco will retain the loan upon completion of construcrr when the loan originated have been sold or refiff nanced in the secondaryr market immediately upu on completion of construrr ction, at times, resulting in signififf cant unscheduled loan payoffff sff . development, investment, use in a commercial business enterprrr resale, multi-faff mily apaa tion. In recent years, many construcrr the owner. Construcrr CRE – land and construcrr tion loans require payment of interest-only during the construcrr tion period, with initial terms ranging frff om six larger, multiple-phase projects, such as residential housing developments and large scale commercial projects. months up to three years forff Interest rates are oftff en fuff lly-flff oating based on an apa propriate index, but may be strurr ctut red in the same manner as the interest rate that will apa ply tion period is typically included in the projo ect costs and to the permanent loan upon completion of construcrr thereforff e is oftff en funde opriate stage of completion with each advance and that interest reserves are not exhausted prior to completion of the project. In the event a project is not completed within the initial ity, but interest beyond the initial term must be paid by the borrower and in some instances an additional term, the loan is re-underwritten at maturt interest reserve is required as a condition of extending the maturt tion, the loan is converted to permanent fiff nancing and reclassififf ed to CRE—improved property. d by loan advances. Advances are monitored to ensure that the project is at the appr tion. Interest during the construcrr ity. Upon completion of construcrr a ff CRE – improved property loans consist of loans to purchase or refiff nance owner-occupied and investment properties. Owner-occupied CRE rtment buildings, consists of loans to borrowers in a diverse range of industries and property types. Investment properties include multi-faff mily apaa 1-to-4 faff mily rental units, lodging and various types of commercial buildings that are rented or leased to unrelated parties of the owner. CRE – improved property loans generally require monthly principal and interest payments based on amortization periods ranging frff om ten to thirty years depending on the type, age and condition of the property. Loans with amortization periods exceeding twenty years typically also ity date or call option of ten years or less. Interest rates are generally adjustabla e aftff er a fiff xed period ranging frff om one to fiff ve years have a maturt based on an appr longer than fiff ve years and certain loans frff om a acquisitions may have longer initial fiff xed rate terms. For certain larger loans, the borrower may be required to enter into an interest rate derivative contract that converts Wesbanco’s rate to an adjustabla e rate. opriate index of comparabla e duration. Interest rates may also be fiff xed forff C&I loans consist of revolving lines of credit to fiff nance accounts receivaba le, inventoryr and other general business purprr oses; term loans to a variety of businesses. fiff nance fiff xed assets other than real estate, and letters of credit to support trade, insurance or governmental requirements forff Most C&I borrowers are privately-held companies with annual sales up to $100 million. C&I term loans secured by equipment and other types of collateral generally require monthly principal and interest payments based on amortization periods up to ten years depending on the estimated usefulff lifeff of the collateral, with interest rates that may be fiff xed foff r the term of the loan (potentially via an interest rate derivative contract) or adjd ustaba le aftff er a fiff xed period ranging frff om one to seven years based on an a appr opriate index. on demand or at maturt Commercial lines and letters of credit are generally categorized as C&I but may also be categorized as CRE—improved property loans or CRE—land and construcrr tion if they are secured primarily by real estate. Lines of credit typically require payment of interest-only with principal opriate short-term index. Letters of dued credit typically require a periodic feff e with principal and interest due on demand in the event the benefiff ciaryrr of the letter requests an advance on the commitment. Lines of credit may also include a feff e based on the amount of the line that is not advanced. Lines and letters of credit are generally renewabla e or may be cancelled annually by Wesbanco, but may also be committed forff certain small business lines the benefiff ciaryrr within a specififf ed time in the event Wesbanco and certain letters of credit. Letters of credit may also require Wesbanco to notifyff does not intend to renew or extend the commitment. ity. Interest rates on lines of credit are generally fulff ly-adjustabla e based on an appr up to three years forff a 48 Tabla e 13 summarizes the distribution of maturt ities by rate type forff all commercial loans. TATT BLBB E 13. MAMM TURUU IRR TITT EII SEE OF COCC MOO MMM EMM REE CICC AII L LOAOO NSNN In One Year or Less thtt ousandsdd )s (i(( nii Commercial real estate: tion ... $ 68,628 Land and construcrr Improved property......... 158,587 Commercial and industrial . 140,709 Total commercial loans...... $ 367,924 December 31, 2022 Aftff er One Year Through Five Years Fixed Rate Loans Aftff er Five Years Through Fiftff een Years Aftff er Fiftff een Years In One Year or Less Total Aftff er One Year Through Five Years Variable Rate Loans Aftff er Five Years Through Fiftff een Years Aftff er Fiftff een Years Total $ 170,012 1,160,341 485,219 $ 1,815,572 $ 184,484 1,209,187 337,118 $ 1,730,789 $ 42,643 106,864 45,207 $ 194,714 $ 465,767 2,634,979 1,008,253 $ 4,108,999 $ 110,297 106,221 71,025 $ 287,543 $ 216,922 539,014 207,671 $ 963,607 $ 133,952 1,594,023 203,867 $ 1,931,842 $ 16,949 243,220 88,579 $ 348,748 $ 478,120 2,482,478 571,142 $ 3,531,740 The primaryrr faff ctors considered in underwriting CRE—land and construcrr tion loans are the overall viabia lity of each project, the experience and fiff nancial capa acity of the developer or builder to successfuff lly complete the projo ect, market aba sorprr tion rates and property values. These loans also have the unique risk that the developer or builder may not complete the projo ect, or not complete it on time or within budget. Risk is generally mitigated by extending credit to developers and builders with estaba lished reputations who operate in Wesbanco’s markets and have the liquidity ion, periodically inspecting or other resources to absa orbr unanticipated increases in the cost of a project or longer than anticipated absa orptrr construcrr tion by a licensed architect certain types of projects. Since speculative projects are inherently or engineer and perforff mance and payment bonds may also be required forff investment riskier, Wesbanco may require a specififf ed percentage of pre-sales forff property beforff e construcrr tion in progress, and disbursing the loan at specififf ed stages of completion. Certififf cation of completed construcrr land and residential development or pre-lease commitments forff tion can begin. The primaryrr faff ctors that are considered in underwriting investment real estate are the debt service coverage calculation, the net rental income generated by the property, the composition of the tenants occupying the property, and the terms of leases, all of which may varyrr depending on the specififf c type of property. Other faff ctors that are considered include the overall fiff nancial capaa city of the investors and their experience owning and managing investment property. Repayment of owner-occupied loans must come frff om the cash flff ow generated by the occupant’s commercial business. Thereforff e, the faff ctors that are considered in underwriting owner-occupu ied CRE and C&I loans are the debt service coverage calculation, the historical primaryrr their potential and projected earnings, cash flff ow, capia tal resources, liquidity and leverage of the business. Other faff ctors that are considered forff impact on repayment capaa the business’ products and services, business model viaba ility, quality, experience and depth of management, and external inflff uences that may impact the business such as general economic conditions and social or political changes. competitive advantages and disadvantages, demand forff city include the borrower’s industry,r The type, age, condition and location of real estate as well as any environmental risks associated with the property are considered foff r both owner-occupied and investment CRE. Environmental risk is mitigated by requiring assessments perforff med by qualififf ed inspectors whenever the current or previous uses of the property or any adjacent properties are likely to have resulted in contamination of the propertytt fiff nanced. Risk is ther mitigated by requiring borrowers to have adequate down payments or cash equity, thereby limiting the loan amount in relation to the furff lower of the cost or the market value of the property, unless there are suffff iff cient mitigating faff ctors that would reduce the risk of a higher loan-to- value. Market values are determined by obtaining current apa praisals or evaluations, whichever is apa propriate or required by bankinn ng regulations based on the amount fiff nanced prior to the loan being made. New appr aisals or evaluations may be obtained throughout the lifeff of each loan to more accurately assess current market value when the initial term of a loan is being extended, market conditions indicate that the property value may have declined, and/or the primaryr source of repayment is no longer adequate to repay the loan under its original terms. a unimproved land to 85% forff CRE loan-to-value (“LTV”) ratios are generally limited to the maximum percentages prescribed by Wesbanco credit policy or banking improved commercial property. Regulatoryr guidelines also limit the aggregate regulations, which range frff om 65% forff of CRE loans that exceed prescribed LTV ratios to 30% of the Bank’s total risk-based capia tal. The aggregate of all CRE loans and loan commitments that exceeded the regulatoryrr guidelines appr oximated $126 million or 8% of the Bank’s total risk-based capia tal at December 31, 2022, compared to $117 million or 7% at December 31, 2021. Regardless of credit policy or regulatoryrr guidelines, lower LTV ratios may be required forff certain types of properties or when other faff ctors exist that increase the risk of volatility in market values such as single or special- use properties that cannot be easily converted to other uses or may have limited marketabia lity. Conversely, higher LTV ratios may be acceptaba le when there are other faff ctors to adequately mitigate the risk. a The type and amount of collateral forff C&I loans varies depending on the overall fiff nancial strength of the borrower, the amount and terms ly secured with various types of the loan, and availabla e collateral or guarantors. The level of pledged collateral can varyrr frff om unsecured to fulff 49 of collateral. Unsecured credit is only extended to those borrowers and/or guarantors that exhibit consistently strong repayment capa acity and the fiff nancial condition to withstand a temporaryr decline in their operating cash flff ows. Unsecured loans totaled $226 million and $393 million at December 31, 2022 and December 31, 2021, respectively. Of the unsecured loans at December 31, 2022, $8 million are SBA-guaranteed PPP loans versus $163 million at December 31, 2021. Loans can be secured by bank deposit accounts, marketabla e securities, working capia tal assets , equipment or owner occupied real estate. Bank deposits and marketabla e securities represent the lowest risk. (accounts receivabla e and inventory)rr opriately Marketabla e securities are subject to changes in market value and are monitored regularly by the bank to ensure they remain appr margined. Collateral other than equipment or real estate that flff uctuat tes with business activity, such as accounts receivabla e anaa d inventoryr , may also be subject to regular reporting and certififf cation by the borrower and, in some instances, independent inspection and verififf cation by Wesbanco. Loans secured by equipment or real estate may be subject to receipt of third party appr aisals. Although loans can be collateral type-specififf c, they can also be secured by multiple property types and/or a blanket lien may be placed on all of a borrower’s assets. a a Most commercial loans are originated directly by Wesbanco. Participation in loans originated by other fiff nancial institutt ions represents $789 million or 7.7% of total commercial loan exposure at December 31, 2022, compared to $547 million or 5.9% at December 31, 2021. Included in this total are Shared National Credits of $10 million at December 31, 2022 and $11 million at December 31, 2021. Shared National ions. Wesbanco perforff mrr s its own Credits are defiff ned as loans in excess of $100 million that are fiff nanced by three or more lending institutt customaryr credit evaluation and underwriting beforff e purchasing loan participations. The credit risk associated with these loans is similar to that of loans originated by Wesbanco, but additional risk may arise frff om the limited abia lity to control the actions of the lead, agent or servicing institutt ion. The commercial portfolff io is monitored forff potential concentrations of credit risk including by market, CRE property type, C&I indudd stryrr , loan type and loans affff eff cted by similar external faff ctors. Beginning in 2001 and revised in 2013, banks of a certain size are required to track C&I loan transactions designated as Highly Leveraged e of a buyout, acquisition or capa ital distributions and Transactions (“HLTs”). Loans that meet the criteria must be of a certain size, forff meet certain leverage ratios. As of December 31, 2022, Wesbanco had $39.8 million or 0.4% of total commercial loan exposure designated as HLTs, as compared to $39.5 million or 0.4% as of December 31, 2021. the purpos rr The bank is monitoring the offff iff ce building portfolff io, as the continuing trend towards remote work has led to diminished need foff r dedicated offff iff ce space. As of December 31, 2022, total exposure to land development and new development related to offff iff ce buildings, improvements and renovation of existing strucrr oximated $519 million or 5.0% of the total commercial loan exposure, as compared to $470 million or 5.0% of the total commercial loan exposure at December 31, 2021. There is a potential risk forff offff iff ce loan losses to materialize as lease agreements begin to expire and companies reduce their foot turt es, purchase of existing buildings and other related activities appr int. prt a ff 50 TATT BLBB E 14. COCC MOO MMM EMM REE CICC AII L EXEE PXX OSOO URUU ER BY INII DNN USUU TRTT Y Land and Construction Improved Property Commercial and Industrial PPP December 31, 2022 thtt ousandsdd )s (i(( nii Agriculturt e and faff rming ............ $ Energy ............................... Construrr ction ......................... ing....................... Manufaff cturt Wholesale and distribution ......... Retail................................. Transportation and warehousing ... Inforff mation and communications .. Finance and insurance .............. Equipment leasing................... Real estate - 1-4 faff mily ............. Real estate - multi-faff mily........... Real estate - other retail............. Real estate - shopping center ....... Real estate - offff iff ce building ........ Real estate - ing ......... commercial/manufaff cturt Real estate - residential buildings .. Real estate - other ................... Services .............................. Schools and education services..... Healthcare ........................... Entertainment and recreation ....... Hotels ................................ Other accommodations ............. Restaurants .......................... Religious organizations ............. Government ......................... Unclassififf ed ......................... Total commercial loans ............. $ $ Balance 1,735 $ 4,656 92,343 7,915 1,413 31,157 14,679 3,884 1,157 573 3,844 268,166 2,248 20,760 36,795 Commitment 2,694 — 74,503 29,151 2,700 34,559 2,116 31,793 7 663 2,389 468,087 192 14,647 8,205 Balance 13,382 $ 30,262 106,252 148,041 58,978 287,171 62,200 9,638 17,183 18,485 236,117 569,289 172,854 480,629 442,349 Commitment 808 939 19,521 31,945 2,893 22,155 2,985 — 485 461 13,062 11,038 1,835 5,611 18,862 30,506 58,057 89,731 14,614 23,963 121,471 11,182 20,158 21,589 16,691 7,721 36,879 — 943,887 $ 7,507 185,002 23,865 9,289 — 80,053 6,333 29,819 13,165 10,781 5,239 5,384 45,705 1,093,848 326,776 107,583 484,479 262,462 29,171 360,093 42,526 622,803 47,846 90,933 69,204 18,973 1,778 $ 5,117,457 $ 6,421 5,912 26,896 18,148 701 6,558 1,170 1,363 1,266 5,562 2,398 220 2,060 211,275 $ $ Balance 25,701 $ 83,682 157,526 154,563 130,553 121,967 53,017 5,395 44,352 52,882 3,652 — 4,393 — 12,014 Commitment 6,590 48,561 207,918 132,245 95,453 81,590 20,946 2,353 122,380 37,010 3,384 — — — 580 8,337 21,189 25,424 191,347 93,414 110,160 4,913 836 90 45,226 27,570 179,199 13,878 1,571,280 $ 527 16,038 30,347 138,615 11,980 60,255 6,478 6,495 539 25,954 21,692 19,834 261,511 1,359,275 Loan Balance Total Loan Balance Total Exposure % of Capital (1) 6 89 540 3,069 — 119 641 22 80 — — — — — — — 21 23 721 — 343 129 1,430 — 699 — 183 — 8,115 $ 40,824 $ 118,689 356,661 313,588 190,944 440,414 130,537 18,939 62,772 71,940 243,613 837,455 179,495 501,389 491,158 365,619 186,850 599,657 469,144 146,548 592,067 58,750 645,227 69,525 153,549 104,495 235,234 15,656 $ 7,640,739 $ 50,916 168,189 658,603 506,929 291,990 578,718 156,584 53,085 185,644 110,074 262,448 1,316,580 181,522 521,647 518,805 380,074 393,802 680,765 635,196 159,229 738,933 72,731 682,904 84,495 195,846 133,824 260,672 324,932 10,305,137 3.1 10.3 40.3 31.0 17.9 35.4 9.6 3.2 11.4 6.7 16.1 80.5 11.1 31.9 31.7 23.3 24.1 41.6 38.9 9.7 45.2 4.4 41.8 5.2 12.0 8.2 15.9 19.9 630.5 $ $ (1) Represents Bank’s total risk-based capia tal. Multi-faff mily apaa rtment exposure increased 67.9% frff om $784 million at December 31, 2021 to $1,317 million at December 31, 2022. This exposure represents 80.5% of total risk-based capaa ital at December 31, 2022, up frff om 48.8% at December 31, 2021. rtments represent the single largest categoryr of commercial loans. Multi-faff mily apaa Healthcare represents the second largest categoryrr of commercial exposure with total exposure of $739 million. Healthcare exposuru e represents 45.2% of risk-based capia tal, compared to 47.1% at decreased 2.5% frff om December 31, 2021 to December 31, 2022. This categoryrr December 31, 2021. Lodging represents the third largest categoryrr of commercial exposure with total exposure of $683 million. While the bank is still closely io, the negative effff eff cts of the pandemic experienced in 2020 and 2021 have largely been alleviated. Lodging exposure represents 41.8% of risk-based capia tal, compared to 45.0% at monitoring this portfolff declined 5.6% frff om December 31, 2021 to December 31, 2022. This categoryr December 31, 2021. Real estate—other represents the four exposure increased 7.2% frff om December 31, 2021 to December 31, 2022. This categoryr 39.5% at December 31, 2021. Real estate – other consists of property types such as box stores, eating faff cilities and mixed use. th largest categoryrr of commercial exposure with total exposure of $681 million. Real estate—other represents 41.6% of risk-based capia tal, compared to ff Construcrr tion exposure tion represents the fiff ftff h largest categoryrr of commercial loan exposure with total exposure of $659 million. Construcrr declined 3.4% frff om December 31, 2021 to December 31, 2022. This represents 40.3% of total risk-based capia tal at December 31, 2022, compared to 42.4% at December 31, 2021. Construrr ction-coded loans are broken down between 1-4 faff mily homes built forff sale, lot development and general trade. Services represents the sixth largest categoryrr of commercial exposure with total exposure of $635 million. Services increased 6.8% frff om December 31, 2021 to December 31, 2022. This categoryrr represents 38.9% of risk-based capia tal, compared to 37.0% at December 31, 2021. In addition to the methods in which Wesbanco monitors the CRE portfoff lio foff r possible concentrations of risk, the regulatoryr agencies use a two-tiered assessment to determine whether a bank has an overall concentration of CRE lending as a percentage of bank total risk-based capia tal. tions and thereforff e do not necessarily match the balances Loan balances used to determine compliance are based upon Call Report instrucrr tion. This tier totals $1,301 displayed in Tabla e 14. The fiff rst tier measures loans forff land, land development, residential and commercial construcrr 51 the fiff rst tier is 100% of total risk-based capia tal. The second tier measures loans included in the fiff rst tier plus multi-faff mily apaa million or 79.6% of total risk-based capia tal at December 31, 2022, compared to $914 million or 56.8% at December 31, 2021. The regulatoryr rtments guidance forff and other commercial investment property. This tier totals $4,739 million or 289.9% of total risk-based capia tal at December 31, 2022, compared to $4,105 million or 255.2% at December 31, 2021. The regulatoryr guidance forff the second tier is 300% of total risk-based capia tal. The regulatoryrr agencies also consider whether a bank’s CRE portfolff io has increased by 50% or more within the prior thirty-six months of the assessment date. Total CRE exposure increased $719 million or 17.9% forff the thirty-six month period ended December 31, 2022. acquisition, development or construcrr Basel III requires banks to identifyff High Volatility Commercial Real Estate (“HVCRE”) loans in their portfolff ios. These loans are subject to 150% weighting in the risk-based capia tal calculation, effff eff ctive Januaryr 1, 2015. These regulations require, among other things, that investment CRE loans forff , meet the statutt oryrr LTV guidelines, have aised value, and the loan documentation must a minimum contributed equity of 15% in cash, marketabla e securities or contributed land at appr contain a requirement that the initial capia tal injection remain in the project until the loan has converted to permanent fiff nancing or is paid in fuff ll. Changes to the law in May 2018 eliminated certain CRE loan categories frff om being subject to the regulation, such as owner-occupied, changed aised value forff contributed land value frff om cost to appr the equity component and required only the initial capia tal to meet the 15% threshold oximately $119 million in HVCRE exposure representing 1.6% of total CRE exposure and 7.3% of total remain in the project. The bank has appr risk-based capa ital at December 31, 2022. This compares to $79 million in HVCRE exposure representing 1.2% of total CRE exposure and 4.9% of total risk-based capia tal at December 31, 2021. tion that are not in permanent amortizing loan statust a a a Under the CARES Act, Wesbanco modififf ed appr oximately 3,600 loans totaling $2.2 billion in 2020, of which no commercial loans remain io loans as of in defeff rral as of December 31, 2022. This compares to $51.5 million of commercial loans, representing 0.5% of total portfolff December 31, 2021. However, $65.0 million of commercial loans as of December 31, 2022 had various payment terms modififf ed in exchange forff enhancements benefiff cial to the Bank which were permanent improvements to the credit faff cility. Changes include an increase in flff oor rates, increase in guarantors and duration of guarantees and a change in covenants. None of the aforff ementioned loans were considered delinquent or on non-accruarr as of December 31, 2022. l statust a Retail Loans —Retail loans are a homogenous group, generally consisting of standardized products that are smaller in amount and distributed over a larger number of individual borrowers. This group is comprised of residential real estate loans, home equity lines of credit and consumer loans. a Residential real estate consists of loans to purchase, construcrr oximately $11 million at December 31, 2021. Wesbanco originates residential real estate loans forff its portfolff io loans also include loans to fiff nance vacant land upon which the owner intends to construcrr t or refiff nance the borrower’s primaryrr dwelling, second residence or vacation oximately $10 million of 1-to-4 faff mily rental properties at December 31, 2022, a decrease frff om home. Residential real estate also includes appr io as well as foff r sale in the appr a t a dwelling at a futff urt e date. secondaryrr market. Portfolff io loans require monthly principal and Except forff tion periods range frff om six to twelve months, but may be longer forff interest payments to amortize the loan with terms up to thirty years. Construcrr larger residences. Loans forff vacant land generally begin amortizing immediately and are refiff nanced when the owner begins construrr ction of a dwelling. Interest rates on portfoff lio loans may be fiff xed foff r upu to thirty years. Adjd ustaba le rate loans are based primarily on the Treasuryrr Constant Maturt ity index and can adjust annually or in increments up to 15 years. Currently most 30 year and a portion of 15 year fiff xed-rate originations are sold into the secondaryr market. tion loans that require interest-only payments during the construcrr tion period, portfolff construcrr HELOC loans are secured by fiff rst or second liens on a borrower’s primaryr residence or second home. HELOCs are generally limited to an amount which when combined with the fiff rst mortgage on the property, if any, does not exceed 90% of the market value. Maximum LTV ratios are also tiered based on the amount of the line and the borrower’s credit history.r Most HELOCs originated prior to 2005 are availabla e forff draws by the borrower forff up to fiff ftff een years, at which time the outstanding balance is converted to a term loan requiring monthly principal and interest payments suffff iff cient to repay the loan in not more than seven years. Most HELOCs originated frff om 2005 through 2013 are availabla e to the an indefiff nite period as long as the borrower’s credit characteristics do not materially change, but may be cancelled by Wesbanco borrower forff under certain circumstances. Generally, lines originated since 2013 have a 15 year draw period, a ten-year repayment period and also give borrowers the option to convert portions of the balance of their line into an installment loan requiring monthly principal and interest payments, with availabia lity to draw on the line restored as the installment portions are repaid. trucrr ks, motorcycles and boats; one hundred eighty months forff Consumer loans consist of installment loans originated directly by Wesbanco and indirectly through dealers to fiff nance purchases of automobiles, trucrr ks, motorcycles, boats, and other recreational vehicles; home equity installment loans, unsecured home improvement loans, and revolving lines of credit that can be secured or unsecured. The maximum term foff r installment loans is generally eighty-foff ur months foff r automobiles, home equity/improvement loans; and sixty months if the loan is unsecured. Maximum terms may be less depending on age of collateral. In Januaryr 2018, the bank decided to no longer underwrite indirect loans forff motorcycles, recreational vehicles, trailers, boats or offff -ff road vehicles to reduce the overall risk profiff le of the portfolff an indefiff nite period of time as long as the borrower’s credit characteristics do not materially change, but may be cancelled by Wesbanco under certain circumstances. Interest rates on installment obligations are generally fiff xed forff the term of the loan, while lines of credit are adjustabla e daily based on the Prime Rate. io. Revolving lines of credit are generally availabla e forff trailers; one hundred twenty months forff travel 52 TATT BLBB E 15. MAMM TURUU IRR TITT EII SEE OF RER TATT ILII LOAOO NSNN In One Year or Less thtt ousandsdd )s (i(( nii Residential real estate . $ Home equity lines of credit ........................ 498 Consumer.................. 10,032 Total retail loans ........ $ 18,818 8,288 December 31, 2022 Fixed Rate Loans Variable Rate Loans Aftff er One Year Through Five Years $ 47,683 Aftff er Five Years Through Fiftff een Years $ 158,835 Aftff er Fiftff een Years $ 1,066,284 Total $ 1,281,090 Aftff er One Year Through Five Years In One Year or Less $ 171 $ 3,122 Aftff er Five Years Through Fiftff een Years $ 43,566 Aftff er Fiftff een Years $ 812,635 Total $ 859,494 13,976 117,297 $ 178,956 66,378 76,084 $ 301,297 175,651 873 $ 1,242,808 256,503 204,286 $ 1,741,879 22,565 2,384 $ 25,120 32,016 6,197 $ 41,335 39,923 13,473 $ 96,962 344,058 — $ 1,156,693 438,562 22,054 $ 1,320,110 The primaryrr faff ctors that are considered in underwriting retail loans are the borrower’s credit historyrr and their current and reasonabla y io residential real estate loans are generally the secondaryr market that rely on ication and assess credit risk. The amount of the borrower’s down payment is an important consideration residential real estate, as is the borrower’s equity in the property forff HELOCs. It is common practice to fiff nance the total amount of the tax, title, service contracts and credit insurance. anticipated abia lity to repay their obligations as measured by their total debt-to-income ratio. Portfolff underwritten to secondaryrr market lending standards using automated underwriting systems developed forff empirical data to evaluate each loan appl forff purchase price of motor vehicles and other consumer products plus certain allowabla e additions forff a Risk is furff ther mitigated by requiring residential real estate borrowers to have adequate down payments or cash equity, thereby limiting the loan amount in relation to the lower of the cost or the market value of the property, unless there are suffff iff cient mitigating faff ctors that would aisals or evaluations, whichever is apa propriate reduce the risk of a higher loan-to-value. Market values are determined by obtaining current appr or required by banking regulations, based on the amount fiff nanced prior to the loan being made. New appr aisals or evaluations are not obtained unless the borrower requests a modififf cation or refiff nance of the loan, or there is increased dependence on the value of the collateral because the borrower is in defaff ult. a a Wesbanco does not maintain current inforff mation about in which retail borrowers are employed. While such inforff mation is obtained when each loan is underwritten, it oftff en becomes inaccurate with the passage of time as borrowers change employment. Instead, Wesbanco estimates potential exposure based on consumer demographi cs, market share, and other availabla e inforff mation when there is a a signififf cant risk of loss of employment within an industryrr or a signififf cant employer in Wesbanco’s markets. To management’s knowledge, there are no concentrations of employment that would have a material adverse impact on the retail portfolff the industryrr io. a Most retail loans are originated directly by Wesbanco except forff indirect consumer loans originated by automobile dealers and other sellers of consumer goods. Wesbanco perforff ms its own customaryrr credit evaluation and underwriting beforff e purchasing indirect loans. The credit risk associated with these loans is similar to that of loans originated by Wesbanco, but additional risk may arise frff om Wesbanco’s limited aba ility to icabla e consumer lending laws. Indirect consumer loans represented $121 million or 54% of consumer control a dealer’s compliance with appl loans at December 31, 2022 compared to $129 million or 47% at December 31, 2021. a Loans Held For Sale —Loans held forff sale in the secondaryr market. Credit risk associated with such loans is mitigated by entering into sales commitments with third party investors to purchase the loans when they are originated. This practice has the effff eff ct of minimizing the amount of such loans that are unsold and the interest rate risk at anyaa point in time. Wesbanco generally does not service these loans aftff er they are sold. While most loans are sold without recourse, Wesbanco may be required to l periods of generally up to one year or less. The number and principal balance of repurchase loans under certain circumstances forff contractuat this exposure are not material. loans that Wesbanco has been required to repurchase has not been material and thereforff e reserves establa ished forff sale consist of residential real estate loans originated forff Banks that have been acquired by Wesbanco serviced some of the residential real estate loans that were sold to the secondaryr market prior to being acquired. Although these loans are not carried as an asset on the balance sheet, Wesbanco continues to service these loans. As of December 31, 2022 and 2021, Wesbanco serviced loans forff oximately $29 million and $19 million, respectively. The unamortized balance of mortgage servicing rights related to these loans is less than $100 thousand at both December 31, 2022 and 2021. others aggregating appr a CREDIT QUALITY The quality of the loan portfoff lio is measured by various faff ctors, including the amount of loans that are past dudd e, required to be reported as advedd rse risk l loans and TDRs. Non-perforff ming assets also include real estate owned (“REO”) all non-perforff ming, or are adversely graded in accordance with internal risk classififf cations that are consistent with regulatoryr classififf cations. Non-perforff ming loans consist of non-accruarr and repossessed assets. Net charge-offff sff are also an important measure of credit quality. Wesbanco seeks to develop individual strategies forff 53 assets that have adverse risk characteristics in order to minimize potential loss. However, there is no assurance such strategies will be successfuff l and loans may ultimately proceed to forff eclosure or other course of liquidation that does not fulff ly repay the amount of the loan. Past Due Loans —Loans that are past dud e but not reported as non-perfoff rming generally consist of loans that are between 30 and 89 days contractut ally past dud e. Certain loans that are 90 days or more past dud e also continue to accrurr e interest because they are deemed to be well-secured ts to prevent them frff om becoming more seriously and in the process of collection. Earlier stage delinquency requires routine collection effff orff . Tabla e 16 delinquent. Early stage delinquency represents potential futff urt e non-perforff ming loans if routine collection effff orff summarizes loans that are contractuat lly past due 30 days or more, excluding non-accruarr ts are unsuccessfulff l and TDR loans. TATT BLBB E 16. PAPP ST DUEUU ANDNN ACCRCC UIUU NII GNN LOAOO NSNN EXEE CXX LCC UDUU IDD NII GNN NONN NOO -NN A- CCRCC UAUU L ANDNN TDTT RDD LOAOO NSNN lll arll srr inii (dol (( thtt ousands)s 90 days or more: December 31, 2022 % of Loan Balance Amount 2021 % of Loan Balance Amount tion..................... $ Commercial real estate - land and construcrr Commercial real estate - improved property ......................... Commercial and industrial..................................................... Residential real estate ............................................................ Home equity lines of credit ................................................... Consumer............................................................................... Total 90 days or more................................................................ 30 to 89 days: tion..................... Commercial real estate - land and construcrr Commercial real estate - improved property ......................... Commercial and industrial..................................................... Residential real estate ............................................................ Home equity lines of credit ................................................... Consumer............................................................................... Total 30 to 89 days .................................................................... Total 30 days or more................................................................ $ 629 84 1,586 1,551 1,063 530 5,443 910 2,459 984 3,582 3,920 3,584 15,439 20,882 0.07 0.00 0.10 0.07 0.15 0.23 0.05 0.10 0.05 0.06 0.17 0.56 1.58 0.14 0.19 $ $ 51 3,042 559 2,840 685 627 7,804 — 14,001 3,442 4,513 2,528 2,668 27,152 34,956 0.01 0.06 0.04 0.16 0.11 0.23 0.08 0.00 0.30 0.22 0.26 0.42 0.96 0.28 0.36 Loans past due 30 days or more and accruirr ng interest and not reported as TDRs decreased $14.1 million, representing 0.19% of total loans at December 31, 2022, as compared to 0.36% at December 31, 2021. The overall low level of delinquency is the result of management’s continued focff us on sound initial underwriting and timely collection of loans at their earliest stage of delinquency. Non-Perforff ming Assets —Non-perforff ming assets consist of non-accruarr l loans, TDRs, REO and repossessed assets. Loans are categorized as TDRs when Wesbanco, forff economic or legal reasons related to a borrower’s fiff nancial diffff iff culties, grants a concession to the borrower that it would not otherwise consider unless the modififf cation results in only an insignififf cant delay in the payments to be received. Concessions may include a reduction of either the interest rate, the amount of accruerr d interest, or the principal balance of the loan. Other possible concessions are an interest rate that is less than the market rate foff r loans with comparaba le risk characteristics, an extension of the matut rity date or an extension of the amortization schedud le. Loans reported in this categoryr continue to accrurr e interest so long as the borrower is abla e to continue repayment in accordance with the restrucrr l l are reported in the non-accruarr categoryrr and not included with accruirr ng TDRs. turt ed terms. TDRs that are placed on non-accruarr Loans are generally placed on non-accrurr al when they become past due 90 days or more unless they are both well-secured and in the process th in Note 4, “Loans and the Allowance forff Credit Losses,” of cy l loans also include consumer loans that were recently discharged in Chapta er 7 bankrupt l loans include certain loans that are also TDRs as set forff of collection. Non-accruarr the Consolidated Financial Statements. Non-accruarr but forff which the borrower has continued to make payments forff rr less than six consecutive months aftff er the discharge. 54 REO consists primarily of property acquired through or in lieu of forff eclosure but may also include bank premises held forff sale. Repossessed assets primarily consist of automobiles and other types of collateral acquired to satisfyff defaff ulted consumer loans. Tabla e 17 summarizes non-perforff ming assets. TATT BLBB E 17. NONN NOO -NN P- EPP REE FOFF ROO MRR IMM NII GNN ASSSS ESS TSTT lll arll srr inii (dol (( TDRs accruirr ng interest: thtt ousands)s tion..................................................................... $ Commercial real estate—land and construcrr Commercial real estate—improved property ......................................................................... Commercial and industrial ..................................................................................................... Residential real estate ............................................................................................................. Home equity lines of credit .................................................................................................... Consumer................................................................................................................................ Total TDRs accruirr ng interest...................................................................................................... Non-accrurr al loans: tion..................................................................... Commercial real estate—land and construcrr Commercial real estate—improved property ......................................................................... Commercial and industrial ..................................................................................................... Residential real estate ............................................................................................................. Home equity lines of credit .................................................................................................... Consumer................................................................................................................................ Total non-accruarr l loans .............................................................................................................. Total non-perforff ming loans ........................................................................................................ Real estate owned and repossessed assets .................................................................................. Total non-perforff ming assets ....................................................................................................... $ io loans ................................................................................................................... $ Total portfolff io Non-perforff ming loans as a percentage of total portfolff loans......................................................................................................................................... io loans......................................................... Non-accruarr Non-perforff ming assets as a percentage of total assets ............................................................... Non-perforff ming assets as a percentage of total portfolff l loans as a percentage of total portfolff io loans, real estate owned and repossessed assets ...................................................................... December 31, 2022 2021 — 347 166 2,362 330 25 3,230 112 16,254 2,946 13,695 5,044 134 38,185 41,415 1,486 42,901 10,702,728 $ $ $ — 374 192 2,875 277 28 3,746 73 7,715 5,064 17,190 5,163 537 35,742 39,488 — 39,488 9,733,478 0.39 % 0.36 0.25 0.40 0.41 % 0.37 0.23 0.41 Accruirr ng TDRs decreased $0.5 million or 13.8% frff om December 31, 2021 to December 31, 2022. There were no TDRs greater than $1 million or more at December 31, 2022 or 2021. Accruirr ng TDRs are not concentrated in any industry,rr property or type of loan; however, retail loans, which consist of residential real estate, home equity lines of credit and consumer loans, represented 84.1% at December 31, 2022, as compared to 84.9% at December 31, 2021. This includes loans that were discharged in Chapta er 7 bankrupt cy in the current or prior year; however, the borrower has not yet made payments forff at least six consecutive months aftff er the discharge. rr Non-accruarr l loans increased $2.4 million or 6.8% frff om December 31, 2021 to December 31, 2022. Approximately $1.7 million or 4.5% of turt ed terms that would require them to be reported as a TDR if they were accruirr ng total non-accruarr l loans at December 31, 2022 also have restrucrr interest, compared to $1.5 million or 4.3% of the total at December 31, 2021. Section 4013 of the CARES Act allows fiff nancial institutt ions the option to temporarily suspend certain requirements under U.S. GAAP related to TDRs forff a limited period of time during the COVID-19 pandemic. These customers must meet certain criteria, such as they were in good standing and not more than 30 days past due as of December 31, 2019, as well as other requirements. Based on this guidance, Wesbanco the COVID-19 loan modififf cations as TDRs, nor are the customers considered past due with regard to their delayed payments. does not classifyff Upon exiting the loan modififf cation defeff rral program, the measurement of loan delinquency will resume where it leftff offff upon entrtt yr into the program. Wesbanco offff eff red three to twelve months of defeff rred payments to commercial and retail customers impacted by the COVID-19 pandemic, depending on the type of loan and the industry-rr commercial loans. None of these loans are considered delinquent as of December 31, 2022. Total defeff rred interest as of December 31, 2022 was $17.0 million, which is located within accrurr ed interest receivaba le on the balance sheet. type forff REO and repossessed assets increased $1.5 million frff om December 31, 2021 to December 31, 2022. Wesbanco seeks to minimize the period forff which it holds REO and repossessed assets while also attempting to obtain a faff ir value frff om their disposition. Thereforff e, the sales price 55 of these assets is dependent on current market conditions that affff eff ct the value of real estate, used automobiles, and other collateral. Repossessed assets are generally sold at auction within 60 days aftff er repossession. Expenses associated with owning REO and repossessed assets charged to other expenses were $0.8 million forff 2021. Net gains on the disposition of REO and repossessed assets are credited or charged to non-interest income and appr oximated $0.0 million in 2022 and $0.5 million in 2021. 2022 compared to $0.2 million forff a a description of internally-assigned risk grades forff Criticized and Classififf ed Loans —Please refeff r to Note 4, “Loans and the Allowance forff Credit Losses,” of the Consolidated Financial Statements forff commercial loans and a summaryr of loans by grade. Wesbanco’s criticized loans are currently protected, but have weaknesses, which if not corrected, may be inadequately protected at some futff urt e date. Classififf ed loan grades are equivalent to the classififf cations used by banking regulators to identifyff those loans that have signififf cant adverse characteristics. A classififf ed loan grade is assigned to all non-accruarr l commercial loans and most commercial TDRs; however, TDRs may be upgraded aftff er the a period of time, but such loans would generally continue to be reported borrower has repaid the loan in accordance with the restrucrr as TDRs regardless of their grade. Criticized and classififf ed loans totaled $250.5 million or 3.3% of total commercial loans at December 31, 2022, compared to $364.5 million or 5.1% at December 31, 2021. The decrease is primarily due to net upgrades of $95.0 million of hospitality loans as a result of increased occupancy and debt service coverage as conditions continue to improve versus the pandemic-driven environment. turt ed terms forff Charge-offff sff and Recoveries — Total charge-offff sff decreased $2.2 million or 22.1% to $7.9 million, while total recoveries decreased $2.1 million to $6.7 million, resulting in an increase of $0.1 million in net charge-offff sff forff 2022 compared to 2021. The total net loan charge-offff rate of 0.02% of average loans at both December 31, 2022 and 2021 is consistent with continued overall low levels of non-perforff ming loans, which were limited due to CARES Act assistance frff om the SBA’s PPP program and the abia lity to treat certain loan modififf cations as non-TDRs dudd ring 2021 and 2022. Taba le 18 summarizes charge-offff sff and recoveries as well as net charge-offff sff as a percentage of average loans foff r each categoryr of the loan portfolff io. 56 TATT BLBB E 18. CHCC AHH RGEGG -EE OFFFF SFF ANDNN RER COCC VEVV REE IRR EII SEE lll arll srr inii (dol (( Commercial real estate - land and construction thtt ousands)s 2022 December 31, 2021 2020 Net charge-offff sff / (recoveries)............................................................................ $ Average balance outstanding ............................................................................ Net charge-offff sff (recoveries) as a percentage of average loans ......................... (52) 903,411 (0.01) % Commercial real estate - improved property Net charge-offff sff / (recoveries)............................................................................ $ Average balance outstanding ............................................................................ Net charge-offff sff (recoveries) as a percentage of average loans ......................... (243) 4,825,288 (0.01) % Commercial and industrial Net charge-offff sff / (recoveries)............................................................................ $ Average balance outstanding ............................................................................ Net charge-offff sff (recoveries) as a percentage of average loans ......................... 71 1,539,694 0.00 % Residential real estate Net charge-offff sff / (recoveries)............................................................................ $ Average balance outstanding ............................................................................ Net charge-offff sff (recoveries) as a percentage of average loans ......................... (90) 1,903,157 (0.00) % Home equity Net charge-offff sff / (recoveries)............................................................................ $ Average balance outstanding ............................................................................ Net charge-offff sff (recoveries) as a percentage of average loans ......................... 16 605,892 0.00 % Consumer Net charge-offff sff / (recoveries)............................................................................ $ Average balance outstanding ............................................................................ Net charge-offff sff (recoveries) as a percentage of average loans ......................... Loans held forff sale 654 291,379 $ $ $ $ $ $ (167) 721,673 (0.02) % 466 4,943,980 0.01 % 226 2,066,116 0.01 % (258) 1,661,138 (0.02) % (136) 623,796 (0.02) % 484 286,717 $ $ $ $ $ $ (41) 711,697 (0.01) % 951 4,929,934 0.02 % 2,270 2,314,248 0.10 % 775 1,845,561 0.04 % 468 647,395 0.07 % 2,041 341,829 0.22 % 0.17 % 0.60 % Net charge-offff sff / (recoveries)............................................................................ $ Average balance outstanding ............................................................................ Net charge-offff sff (recoveries) as a percentage of average loans ......................... — $ 15,104 — % — $ 77,186 — % Deposit Account Overdraftff s Net charge-offff sff / (recoveries)............................................................................ $ 1,268 — 84,099 — % 585 7,049 10,874,763 $ $ 1,113 1,728 10,380,605 $ $ 1,624 10,083,925 0.02 % 0.02 % 0.06 % Total loans Net charge-offff sff / (recoveries)............................................................................ $ Average balance outstanding ............................................................................ Net charge-offff sff (recoveries) as a percentage of average loans ......................... ALLOWANCE FOR CREDIT LOSSES On Januaryrr 1, 2020, Wesbanco adopted CECL, which resulted in a $41.4 million increase to the allowance forff credit losses. Of the $41.4 io and $3.0 million related to loan commitments. The effff eff ct on retained earnings (tax-effff eff cted) million, $38.4 million related to the loan portfolff was $26.6 million. As of December 31, 2022, the total allowance forff credit losses – loans and commitments was $126.2 million, of which $117.8 million relates to loans and $8.4 million relates to loan commitments. The allowance forff io loans as of December 31, 2022, compared to 1.25% as of December 31, 2021. Excluding PPP loans of $8.1 million and $162.7 million, the allowance forff io loans at December 31, 2022 and December 31, 2021, respectively. There is no credit losses – loans was 1.10% and 1.27% of total portfolff allowance on PPP loans due to their government guarantee by the SBA. credit losses – loans was 1.10% of total portfolff The allowance forff to an individually-evaluated loan analysis completed on certain classififf ed hotel loans. The allowance forff increased frff om December 31, 2021 to December 31, 2022 by $2.3 million. credit losses - loans individually-evaluated decreased $6.2 million frff om December 31, 2021 to December 31, 2022 dud e credit losses-loans collectively-evaluated The allowance forff credit losses - loan commitments was $8.4 million at December 31, 2022 as compared to $7.8 million as of December 31, 2021, and is included in other liabia lities on the Consolidated Balance Sheets. 57 The allowance forff io. The allowance forff credit losses by loan category,rr presented in Note 4, “Loans and the Allowance forff Credit Losses” of the Consolidated credit losses in each segment of the Financial Statements, summarizes the impact of changes in various faff ctors that affff eff ct the allowance forff portfolff credit losses under CECL is calculated utilizing the PD/LGD, which is then discounted to net present value. PD is the probabia lity the asset will defaff ult within a given time frff ame and LGD is the percentage of the asset not expected to be collected due to defaff ult. The primaryrr macroeconomic drivers of the quantitative model include forff ecasts of national unemployment and interest rates, as well as modeling io mix, concentrations and loan growth. For the calculation as of December adjustments forff 31, 2022, the forff ecast was based upon a blend of three nationally-recognized published economic forff ecasts through December 31, 2022, and is primarily driven by national unemployment and interest rate spread forff ecasts. Wesbanco’s blended forff ecast of national unemployment, at year end, was projected to be 4.3%, and subsequently increase to an average of 4.8% over the 2023 forff ecast period. The calculation utilized an immediate reversion period back to the Company’s historical loss rate by loan classififf cation. Included in the qualitative faff ctors were defeff rred interest on modififf ed loans, offff iff ce space concentration and rising interest rates. The included qualitative faff ctors address credit risk not covered by the traditional allowance process. changes in prepayment speeds, loan risk grades, portfolff If forff ecasted projections of national unemployment remain consistent with the forff ecast utilized by Wesbanco as of December 31, 2022 credit losses, assuming other model tions in the allowance forff throughout next year, this may result in less signififf cant futff urt e quarterly flff uctuat variabla es remain relatively constant. Environmental risks have the potential to negatively impact an organization's assets, earnings, and reputation. Specififf cally, climate risks have the potential to signififf cantly impact the bank and its customers. Climate-related risks are divided into two maja or categories: (1) risks related economy, which may entail extensive policy, legal, technology and market changes, and (2) risks related to the to the transition to a low-carbon physical impacts of climate change, driven by extreme weather events, such as hurricanes and flff oods, as well as chronic longer-term shiftff s, such as temperaturt e increases and sea level rises. These changes and events can have broad impacts on operations, supply chains, distribution networks, city or collateral values. customers, and markets. The fiff nancial impacts can lead to amplififf ed credit risk, and diminish borrowers’ repayment capaa r We are in the process of enhancing our climate and environmental, social and corpor ate governance ("ESG") risk considerations into our risk frff amework and risk management programs establa ished forff strategic, credit, market, compliance, operational and reputational risks. The potential of climate risk is monitored through our risk identififf cation process. Once identififf ed, climate risks are assessed foff r potential impacts on us and our customers. Furthermore, the identififf ed climate risk will then be considered as part of our macroeconomic scenarios and loss foff recasts within our CECL allowance models. These futff urt e enhancements to our risk frff amework are in development and will continue to be refiff ned as new climate trends and risks arise. rr 58 Tabla e 19 summarizes the allowance together with selected relationships of the allowance and provision forff credit losses to total loans and certain categories of loans. TATT BLBB E 19. ALLOWAWW NCNN ECC FOFF ROO CRCC ER DEE IDD T LOSOO SSS ESS SEE lll arll srr inii (dol (( thtt ousands)s Balance at beginning of year: Allowance forff Allowance forff credit losses - loans...................................................................... $ credit losses - loan commitments ................................................ Total beginning allowance forff credit losses - loans and loan commitments ........... Impact of adopting ASC 326........................................................................................ Provision forff credit losses: Provision forff Provision forff Total provision forff Net charge-offff sff : loan losses...................................................................................... loan commitments ......................................................................... credit losses - loans and loan commitments ............................. Total charge-offff sff ................................................................................................. Total recoveries ................................................................................................... Net charge-offff sff ........................................................................................................ Balance at end of year: Allowance forff Allowance forff credit losses - loans...................................................................... credit losses - loan commitments ................................................ credit losses - loans and loan commitments ................ $ Total ending allowance forff Allowance forff Allowance forff Allowance forff Allowance forff io loans ........... credit losses - loans as a percentage of total portfolff credit losses - loans to non-accruarr l loans ........................................ credit losses - loans to total non-perforff ming loans.......................... credit losses - loans to total non-perforff ming loans 2022 December 31, 2021 2020 $ 121,622 7,775 129,397 — (2,208) 593 (1,615) (7,892) 6,268 (1,624) 117,790 8,368 126,158 $ 1.10% 3.08x 2.84x $ 185,827 9,514 195,341 — (62,477) (1,739) (64,216) (10,136) 8,408 (1,728) 121,622 7,775 129,397 $ 1.25% 3.40x 3.08x 2.57x 52,429 874 53,303 41,442 101,960 5,685 107,645 (12,535) 5,486 (7,049) 185,827 9,514 195,341 1.72% 5.04x 4.55x 3.74x and loans past due 90 days or more...................................................................... 2.51x a opriate forff The allowance consists of specififf c reserves forff certain individually-evaluated loans, if any, and a general reserve forff all other loans. potential credit losses. Specififf c Commercial loans, including CRE and C&I, that have other unique characteristics are tested individually forff reserves are establa ished when appr such loans based on the net present value of expected futff urt e cash flff ows of the loan or the estimated realizabla e value of the collateral, if any. The evaluation also considers qualitative faff ctors such as economic trends and conditions, which includes levels of regional unemployment, real estate values and the impact on specififf c industries and geographi cal markets, changes in lending policies and underwriting standards, delinquency and other credit quality trends, concentrations of credit risk, if any, the results of internal loan reviews collectively-evaluated loans is and examinations by bank regulatoryrr agencies pertaining to the allowance forff comprised of faff ctors based on both historical loss experience and other qualitative faff ctors. The allowance forff collectively-evaluated loans increased $2.3 million or 2.0% frff om December 31, 2021 to December 31, 2022 due to changes in macroeconomic faff ctors, changes in portfoff lio mix and changes in both quantitative and qualitative adjd ustments. The allowance foff r individudd ally-evaluated loans was $3.1 million at December 31, 2022, a decrease of $6.2 million frff om December 31, 2021 as the balance of hospitality loans individually-evaluated decreased during 2022 frff om $29.4 million to $13.9 million. The allowance forff loan commitments increased $0.6 million frff om December 31, 2021 to December 31, 2022. credit losses. The allowance forff a 59 Tabla e 20 summarizes the allocation of the allowance forff credit losses to each categoryr of loans. TATT BLBB E 20. ALLOCACC TITT OII NOO OF THTT EHH ALLOWAWW NCNN ECC FOFF ROO CRCC ER DEE IDD T LOSOO SSS ESS SEE lll arll (dol srr inii (( Allowance forff thtt ousands)s tion.................. $ credit losses - loans: Commercial real estate—land and construcrr Commercial real estate—improved property ...................... Commercial and industrial................................................... Residential real estate .......................................................... Home equity lines of credit ................................................. Consumer............................................................................. Deposit account overdraftff s .................................................. credit losses - loans ................................. Total allowance forff Allowance forff credit losses - loan commitments: Commercial real estate—land and construcrr tion.................. Commercial real estate—improved property ...................... Commercial and industrial................................................... Residential real estate .......................................................... Home equity lines of credit ................................................. Consumer............................................................................. credit losses - loan commitments ............ credit losses ............................................. $ Total allowance forff Total allowance forff December 31, 2022 % of Loans or Commitments to Total Portfolff io Loans or Commitments Allowance Amount 2021 % of Loans or Commitments to Total Portfolff io Loans or Commitments Allowance Amount 6,737 52,659 31,540 18,208 4,234 3,127 1,285 117,790 6,025 — — 2,215 128 — 8,368 126,158 8.8 47.8 14.8 20.0 6.5 2.1 — 100.0 25.7 5.0 31.9 8.5 28.0 0.9 100.0 $ $ 7,310 65,355 26,875 15,401 724 3,737 2,220 121,622 4,180 201 1,497 1,576 49 272 7,775 129,397 8.6 48.4 16.3 17.7 6.2 2.8 — 100.0 17.5 8.7 36.8 10.0 25.2 1.8 100.0 a credit losses appl icabla e to each categoryrr of loans. Changes in the allowance forff Please refeff r to Note 4, “Loans and the Allowance forff Credit Losses,” of the Consolidated Financial Statements forff a summaryrr of changes in the allowance forff all categories of loans also reflff ect the net effff eff ct of changes in historical loss rates, loan balances, specififf c reserves and management’s judgment with respect to the impact of qualitative a particular loan categoryr generally reflff ects either lower loan balances, historical faff ctors on each categoryrr of loans. A decrease in the allowance forff loss rate changes or reductions in non-perforff ming and/or classififf ed commercial loans. Although the allowance forff credit losses is allocated as described in Tabla e 20, the total allowance is availabla e to absa orbr losses in any categoryr of loans. However, diffff eff rences between management’s estimation of expected futff urt e losses and actuat l incurred losses in subsequent periods may necessitate futff urt e adjustments to the provision forff credit losses. Management believes the allowance forff opriate to absa orbr expected futff urt e losses at December 31, 2022. credit losses is appr a DEPOSITS TATT BLBB E 21. DEDD PEE OSOO ISS TSTT (dol srr inii lll arll (( Deposits thtt ousands)s December 31, 2022 2021 $ Change % Change Non-interest bearing demand.................................................................... $ Interest bearing demand............................................................................ Money market........................................................................................... Savings deposits........................................................................................ Certififf cates of deposit ............................................................................... Total deposits................................................................................................ $ 4,700,438 3,119,807 1,684,023 2,741,004 885,818 13,131,090 $ $ 4,590,895 $ 3,380,056 1,739,750 2,562,510 1,292,652 13,565,863 $ 109,543 (260,249) (55,727) 178,494 (406,834) (434,773) 2.4 (7.7) (3.2) 7.0 (31.5) (3.2) Deposits, which represent Wesbanco’s primaryrr source of funds , are offff eff red in various account forff ms at various rates through Wesbanco’s 194 fiff nancial centers, as of December 31, 2022, in West Virginia, Ohio, western Pennsylvania, Marylr and, Kentuct ky, and southern Indiana. The FDIC insures all deposits up to $250,000 per account. ff Total deposits decreased by $434.8 million or 3.2% in 2022 primarily reflff ecting the impact of inflff ationaryr pressures and rising costs across the economy. Savings deposits and non-interest bearing demand deposits increased 7.0% and 2.4%, respectively, while interest bearing demand 60 and money market deposits decreased 7.7% and 3.2%, respectively. Deposit balances were also somewhat impacted by bonus and royalty payments frff om Marcellus and Utica shale energy companies in Wesbanco’s southwestern Pennsylvania, eastern Ohio and northern West Virginia markets totaling $96.7 million and $68.9 million forff the years ended December 31, 2022 and 2021, respectively. Money market deposits were inflff uenced through Wesbanco’s increased participation in the Insured Cash Sweep (ICS®) money market deposits program. ICS® reciprocal balances totaled $580.6 million at December 31, 2022 compared to $641.1 million at December 31, 2021. rr ate strategy designed to increase andaa ing certififf cates of deposit and customer prefeff rences forff Certififf cates of deposit decreased $406.8 million, primarily due to an overall corpor remix retail deposit relationships and reduce single-service customers with a focff us on overall products that can be offff eff red at a lower cost to Wesbanco. The decrease was also impacted by lower offff eff red rates on certain maturt other non-matutt rity deposit types. Wesbanco does not generally solicit brokered or other deposits out-of-ff market or over the internet, but does participate in the Certififf cate of Deposit Account Registryr Services (“CDARS®”) program. CDARS® balances totaled $21.0 million in outstanding balances at December 31, 2022, none of which represented one-way buys, compared to $45.9 million in total outstanding balances at December 31, 2021, of which $0.4 million represented one-way buys. Certififf cates of deposit greater than $250,000 were appr oximately $133.9 million at December 31, 2022 compared to $313.2 million at December 31, 2021. Certififf cates of deposit of $100,000 or more were apa proximately $373.5 million at December oximately $556.4 million at December 31, 2022 31, 2022 compared to $666.2 million at December 31, 2021. Certififf cates of deposit totaling appr with a cost of 0.41% are scheduled to maturt e within the next year. The average rate on certififf cates of deposit decreased 15 basis points frff om 0.52% forff jumbo certififf cates of deposit. Wesbanco will continue to focff us on its core deposit strategies and improving its overall mix of transaction accounts to total deposits, which includes offff eff ring special promotions on certain certififf cates of deposit maturt ities and savings products based on competition, sales strategies, liquidity needs and wholesale borrowing costs. the year ended December 31, 2021 to 0.37% in 2022, with a similar decrease experienced forff a a TATT BLBB E 22. UNUU INN NII SNN URUU ER DEE DEDD PEE OSOO ISS TSTT December 31, lll arll srr inii (dol (( Portion of certififf cates of deposit in excess of FDIC insurance limits ....... $ thtt ousands)s Certififf cates of deposit otherwise uninsured with a maturt ity of:ff Three months or less .............................................................................. $ Over three through six months .............................................................. Over six through twelve months............................................................ Over twelve months ............................................................................... Total uninsured certififf cates of deposit....................................................... $ 2022 133,875 35,522 27,251 38,437 32,665 133,875 Total uninsured deposits ............................................................................ $ 4,390,789 BORROWINGS TATT BLBB E 23. BOROO RRR OWIWW NII GNN SGG 2021 198,958 65,024 63,193 20,620 50,121 198,958 4,439,779 $ $ $ $ lll arll srr inii thtt ousands)s (dol (( Federal Home Loan Bank Borrowings ...................................................... $ Other short-term borrowings ..................................................................... Subordinated debt and junior subordinated debt ....................................... Total........................................................................................................... $ December 31, 2022 705,000 135,069 281,404 1,121,473 $ $ 2021 183,920 141,893 132,860 458,673 $ Change % Change (65,083) (32.7) (29,502) (35,942) 17,817 (17,456) (65,083) (48,990) (45.4) (56.9) 86.4 (34.8) (32.7) (1.1) $ Change % Change 521,080 (6,824) 148,544 662,800 283.3 (4.8) 111.8 144.5 $ $ $ $ $ $ Borrowings are a signififf cant source of fundi million frff om December 31, 2021, as $1.2 billion in advances were partially offff sff et by $629.0 million in maturt frff om availabla e liquidity. The average cost in 2022 of maturt forff ng forff Wesbanco in addition to deposits. During 2022, FHLB borrowings increased $521.1 ities and other principal paydowns ing and paid-offff FHLB borrowings was 3.57%, compared to the average cost of 4.35% new borrowings in 2022. ff 61 a ng source and to more appr opriately match interest maturt Wesbanco is a member of the FHLB system. The FHLB system func ions that are engaged in residential and commercial real estate lending along with securities investing. Wesbanco uses term FHLB borrowings as a general fundi certain assets. FHLB borrowings are secured by blanket liens on certain ff residential and other mortgage loans with a market value in excess of the outstanding borrowing balances. The terms of the security agreement with the FHLB include a specififf c assignment of collateral that requires the maintenance of qualifyiff ng mortgage and other types of loans as pledged collateral with unpaid principal amounts in excess of the FHLB advances, when discounted at certain pre-establa ished percentages of the loans’ unpaid balances. FHLB stock, which is recorded at cost of $36.2 million at December 31, 2022, is also pledged as collateral foff r these advances. Wesbanco’s remaining maximum borrowing capaa city, subject to the collateral requirements noted, with the FHLB at Decembem r 31, 2022 and 2021 was estimated to be appr oximately $3.6 billion and $3.8 billion, respectively. tions as a borrowing source forff regulated fiff nancial institutt ities forff a ff Other short-term borrowings, which may consist of feff deral funds purchased, callabla e repurchase agreements, overnight sweep checking accounts and borrowings on a revolving line of credit, decreased $6.8 million to $135.1 million at December 31, 2022, compared to $141.9 million at December 31, 2021 due to moving certain customer relationships to interest-bearing demand deposits. At December 31, 2022 and 2021, there were no outstanding feff deral funds purchased. ff ff In August 2022, Wesbanco renewed a revolving line of credit, which is a senior obligation of the parent company, with another fiff nancial aggregate unsecured borrowings of up to ion. The revolving line of credit, which accruerr institutt $30.0 million. The new revolving line of credit also requires Wesbanco to maintain at all times a consolidated four quarter average retut rn on average assets of > 0.50%, a Texas ratio of less than 25% (broadly defiff ned as the ratio of non-perforff ming assets to tangible common equity and the allowance forff loan losses), unencumbered cash and marketabla e securities of at least $12.0 million, and the maintenance at all times on a the Bank a total risk-based capia tal ratio of > 12.0%, a Tier 1 risk-based capia tal ratio of > 10.0% and a Tier 1 leverage consolidated basis and forff ratio of > 7.0%. Wesbanco was in compliance with all terms and conditions at December 31, 2022. There was no outstanding balance on the line as of December 31, 2022 or 2021. s interest at an adjusted SOFR rate, provides forff ff In March of 2022, Wesbanco completed the issuance of $150.0 million in aggregate principal amount of subordinated debenturt es. The the next fiff ve years at Three Month SOFR plus a the fiff rst fiff ve years and a flff oating rate forff subordinated debenturt es have a fiff xed rate of 3.75% forff spread of 1.787%. CAPITAL RESOURCES Shareholders’ equity decreased frff om $2.7 billion at December 31, 2021 to $2.4 billion at December 31, 2022. The decrease was primarily the result of the repurchase of common shares net of restricted stock vesting activity totaling $119.1 million, the declaration of common and prefeff rred shareholder dividends totaling $81.3 million and $10.1 million, respectively, and a $257.3 million other comprehensive income loss. This loss consisted of a $257.2 million unrealized loss in the securities portfoff lio and a $0.1 million loss in the defiff ned benefiff ts pension plan and other postretirement benefiff ts forff the year ended December 31, 2022. Shareholders' equity was positively impacted by net income of $192.1 million forff the year ended December 31, 2022. For 2022, common dividends increased to $1.37 per share, or 3.8% on an annualized basis, compared to $1.32 per share in 2021. The common dividend per share payout ratio increased to 53.6% in 2022 frff om 37.4% in 2021, which is primarily attributabla e to a decrease in earnings year-over-year. A board-appr oved policy generally targets dividends as a percent of net income in a range of 40% to 75%, subject to capa ital levels, earnings historyrr and prospects, regulatoryrr concerns, and other faff ctors. a Wesbanco purchased 3,407,016 shares of its common stock on the open market at a total cost of $119.1 million or $34.96 per share dud ring the year under current share repurchase authorizations. On Februrr aryr 24, 2022, Wesbanco's Board of Directors authorized the adoption of a new stock repurchase plan foff r the purchase of upu to 3.2 million shares, which was in addition to the prior plans that were utilized during the year. At December 31, 2022, the remaining shares authorized to be purchased under the last appr oved repurchase plan totaled 1,184,351 shares. a minimum regulatoryr Wesbanco is subject to risk-based capia tal guidelines that measure capia tal relative to risk-weighted assets and offff -ff balance sheet instrumrr ents. Wesbanco and its banking subsidiaryrr Wesbanco Bank maintain Tier 1 risk-based, Total risk-based and Tier 1 leverage capia tal ratios signififf cantly above levels. The Bank paid $172.5 million in dividends to Wesbanco during 2022, or 85% of the Bank’s net income. There a are various legal limitations under feff deral and state laws that limit the payment of dividends frff om the Bank to the parent company. As of December l, dividends of 31, 2022, under FDIC and State of West Virginia regulations, Wesbanco could receive, without prior regulatoryr appr parent annually, a subject to change, with Board appr a approva oximately $116.8 million frff om the Bank. The Bank’s policy is generally to declare dividends up to 90% of its earnings to thet oval. a Wesbanco currently has $281.4 million in subordinated debt and junior subordinated debt on its Consolidated Balance Sheet. For regulatoryr t subu sidiaries of es, the junior subordinated debt and trusrr purpos rr Wesbanco underlying such junior subordinated debt, are accounted forff reporting requirements. Subordinated debt totaling $60.0 million acquired frff om YCB and OLBK in 2016 and 2019, respectively, was redeemed late in 2021. The YCB notes were considered Tier 2 regulatoryr capia tal forff Wesbanco and Wesbanco Bank, as they were initially issued by the Bank, while the OLBK notes were considered Tier 2 regulatoryrr capia tal forff Wesbanco. In March of 2022, Wesbanco completed the issuance of $150.0 million in aggregate principal amount of subordinated debenturt es. t prefeff rred securities totaling $130.0 million, issued by unconsolidated trusrr as Tier 2 capia tal in accordance with current regulatoryrr 62 Please refeff r to Note 21, “Regulatoryrr Matters,” of the Consolidated Financial Statements forff more inforff mation on capia tal amounts, ratios requirements. Also refeff r to “Item 1. Business” within this Annual Report on Form 10-K forff more inforff mation on the and minimum regulatoryr Dodd-Frank Wall Street Reforff m and Consumer Protection Act and Basel III Capia tal Standards. LIQUIDITY RISK ion’s obligations, and the fundi turt e, and the cash flff ows of its on- and offff -ff balance sheet obligations. Institutt Liquidity is defiff ned as a fiff nancial institut tion’s capa acity to meet its cash and collateral obligations at a reasonaba le cost. Liquidity risk is the risk that an institutt ion’s fiff nancial condition or overall safeff ty and soundness is adversely affff eff cted by an inabia lity, or perceived inabia lity, to meet its obligations. An institutt ng sources to meet them, depend signififf cantly on its business mix, balance sheet strucrr tions that can ng sources, contingent liquidity events, changes in ng mismatches, market constraints on fundi give rise to increased liquidity risk including fundi economic conditions, and exposure to credit, market, operation, legal and reputation risk. Wesbanco actively manages liquidity risk through its abia lity to provide adequate funds to meet changes in loan demand, unexpected outflff ows in deposits and other borrowings as well as to take advantage of market opportuni ties and meet operating cash needs. This is accomplished by maintaining liquid assets in the forff m of securities, suffff iff cient borrowing capaa city and a stabla e core deposit base. Liquidity is centrally monitored by Wesbanco’s ALCO. ions confrff ont various internal and external situat ff ff ff ff t Wesbanco determines the degree of required liquidity by the relationship of total holdings of liquid assets to the possible need forff meet unexpected deposit losses and/or loan demands. The abia lity to quickly convert assets to cash at a minimal loss is a primaryrr Wesbanco’s investment portfolff io, the investment portfolff sources adequately meet its liquidity requirements. Wesbanco’s net loans-to-assets ratio was 62.5% and deposit balances funde assets at December 31, 2022. io management. Wesbanco believes its cash flff ow frff om the loan portfolff ff ff funds ff func to tion of io, and other d 77.6% of total The folff lowing tabla e lists the sources of liquidity frff om assets at December 31, 2022 expected within the next year: ) thtt ousandsdd )s ( (i(( nii Cash and cash equivalents .............................................................................................................................................. Securities with a maturt ity date within the next year and callabla e securities .................................................................. Projected payments and prepayments on mortgage-backed securities and collateralized mortgage obligations (1).............................................................................................................................................. sale.......................................................................................................................................................... Loans held forff Accruirr ng loans scheduled to maturt e............................................................................................................................... Normal loan repayments................................................................................................................................................. Total sources of liquidity expected within the next year................................................................................................ (1) Projected prepayments are based on current prepayment speeds. $ $ 408,411 245,067 300,585 8,249 968,414 1,175,469 3,106,195 Deposit flff ows are another principal faff ctor affff eff cting overall Wesbanco liquidity. Deposits totaled $13.1 billion at December 31, 2022. Deposit flff ows are impacted by current interest rates, products and rates offff eff red by Wesbanco versus various forff ms of competition, as well as customer behavior. Certififf cates of deposit scheduled to maturt e within one year totaled $556.4 million at December 31, 2022, which includes jumbo regular certififf cates of deposit totaling $237.2 million with a weighted-average cost of 0.56%, and jumbo CDARS® deposits of $16.0 million with a weighted-average cost of 0.80%. a Wesbanco maintains a line of credit with the FHLB as an additional fundi oved custodial arrangement if the member wishes to include such securities in the maximum borrowing capaa -sale securities with an amortized cost of $535.2 million. A portion of these securities could be sold forff ng source. Availabla e credit with the FHLB at December 31, 2022 ff appr a oximated $3.6 billion, compared to $3.8 billion at December 31, 2021. The FHLB requires securities to be specififf cally pledged to the FHLB city and maintained in a FHLB-appr calculation. Wesbanco has elected not to specififf cally pledge to the FHLB otherwise unpledged securities. At December 31, 2022, the Bank had unpledged availabla e-forff additional liquidity, or such securities could be pledged to secure additional FHLB borrowings. Availabla e liquidity through the sale of investment securities oximately 19.0% of the is somewhat limited due to the pledging agreements that Wesbanco has with their public deposit customers, as appr io balance is unpledged. Public deposit balances have increased signififf cantly through the several acquisitions current availabla e-forff made since 2015, to a total of $1.5 billion at December 31, 2022. Wesbanco’s held-to-maturt io currently contains $1.2 billion of unpledged securities. Most of these securities are tax-exempt municipal securities, which can only be pledged in limited circumstances in certain certain limited, special circumstances, these securities cannot be sold without tainting the remainder of the held-to- states. In addition, except forff ity designation would be required to be reclassififf ed as maturt availabla e-forff io. If tainting occurs, all remaining securities with the held-to-maturt ity designation would not be availabla e to utilize forff -sale, and the held-to-maturt -sale portfolff some time. ity portfolff ity portfolff a Wesbanco participates in the Federal Reserve Bank’s Borrower-in-Custody Program (“BIC”), whereby Wesbanco pledges certain consumer loans as collateral forff borrowings. Wesbanco did not have any BIC borrowings outstanding at December 31, 2022. Alternative fuff nding sources may include the utilization of existing overnight lines of credit with third-party banks totaling $235.0 million, none of which was outstanding at December 31, 2022, along with seeking other lines of credit, borrowings under repurchase agreement lines, increasing deposit rates to attract additional funds , accessing brokered deposits, or selling securities availabla e-forff -sale or certain types of loans. ff 63 Other short-term borrowings of $135.1 million at December 31, 2022 consisted of callabla e repurchase agreements and overnight sweep commercial customers. The overnight sweep checking accounts require U.S. Government securities to be pledged equal checking accounts forff to or greater than the average deposit balance in the related customer accounts. The principal sources of parent company liquidity are dividends frff om the Bank, $272.2 million in cash on hand, and a $30.0 million revolving line of credit with another bank, which did not have an outstanding balance at December 31, 2022. Wesbanco is in compliance with all loan covenants. There are various legal limitations under feff deral and state laws that limit the payment of dividends frff om thet Bank to the parent company. As of December 31, 2021, under FDIC and State of West Virginia regulations, Wesbanco could receive, without prior regulatoryr appr opriate levels of cash forff Wesbanco a given the current environment and projected sources and uses of cash. Management continuously monitors the adequacy of parent company cash levels and sources of liquidity through the use of metrics that relate current cash levels to historical and forff ecasted cash inflff ows and outflff ows. oximately $116.8 million frff om the Bank. Management believes these are appr oval, dividends of appr a a Wesbanco had outstanding commitments to extend credit in the ordinaryr course of business apa proximating $4.6 billion and $3.8 billion at December 31, 2022 and 2021, respectively. On a historical basis, only a portion of these commitments will result in an outflff ow of funds . Please refeff r to Note 18, “Commitments and Contingent Liabia lities,” of the Consolidated Financial Statements and the “Loans and Loan Commitments” section of this MD&A forff additional inforff mation. ff Federal fiff nancial regulatoryrr agencies previously have issued guidance to provide foff r sound practices foff r managing fuff nding and liquidity identifyiff ng, risk and strengthening liquidity risk management practices. Wesbanco maintains a comprehensive management process forff measuring, monitoring, and controlling liquidity risk, which is fulff ly integrated into its risk management process. Management believes Wesbanco has suffff iff cient current liquidity to meet current obligations to borrowers, depositors and others as of December 31, 2022 and that Wesbanco’s current liquidity risk management policies and procedures adequately address this guidance. LIBOR TRARR NSITION rr LIBOR is a widely used short-term refeff rence interest rate benchmark forff variaba le rate loans and securities, borrowings, and interest rate hedge/swapa transactions. In July 2017, the U.K. Financial Conduct Authority (“FCA”) announced the discontinuation of LIBOR aftff er certain banks provided purpor ted interest rate fiff gures which did not trulrr y reflff ect the rate at which they could borrow. In addition to FCA, as early as 2014, fiff nancial institut tion regulators and the Federal Financial Institut tions Examination Council (“FFIEC”) began to work to develop a uniforff m apa proach to the phase-out of LIBOR because the continued reliance on LIBOR could present systematic risk to fiff nancial institut tions. The Board of Governors of the Federal Reserve System and the Federal Reserve Bank of New York convened the Alternative Refeff rence Rates Committee (“AARC”) to identifyff alternative refeff rence rates to LIBOR. The AARC released consultations on contractuat l faff llback language to prepare forff the transition away forff LIBOR and on June 22, 2017, identififf ed SOFR as the recommended alternative to LIBOR. On July 1, 2020, the FFIEC issued a Joint Statement on Managing the LIBOR Transition to furff ther explain that new fiff nancial contracts should either utilize a refeff rence rate other than LIBOR or have robust faff llback language that defiff nes an alternative refeff rence rate aftff er LIBOR’s discontinuation. The FFIEC statement encouraged supervised fiff nancial institutt the change and address the risks associated with the LIBOR transition. ions to continue their effff orff ts to prepare forff On November 6, 2020, the Board of Governors of the Federal Reserve System, the Offff iff ce of the Comptroller of the Currency, and tht e ion may use any ation (collectively, the “Agencies”) issued a statement providing that a fiff nancial institutt ng model and customer needs. opriate forff Federal Deposit Insurance Corpor refeff rence rate forff its loans that the fiff nancial institutt ion determines to be appr ff its fundi a rr Thereaftff er, on November 30, 2020, the Agencies issued an additional joint statement encouraging fiff nancial institutt ions to continue to transition away frff om LIBOR as soon as practicabla e, but no later than December 31, 2021. Given the risks associated with the use of LIBOR, the Agencies stated that entering into new contracts that use LIBOR as a refeff rence rate aftff er December 31, 2021, would create safeff tytt and soundness risks. On March 5, 2021, the U.K. FCA and Intercontinental Exchange (“ICE”) Benchmark Administration announced that the publication of the overnight, as well as, the one, three, six, and twelve month LIBOR rates will continue through June 30, 2023, which will provide additional time to wind down or renegotiate existing contracts that refeff rence LIBOR. On October 20, 2021, the Agencies with the Consumer Financial Protection Bureau, National Credit Union Administration, and State Bank and Credit Union Regulators, issued an additional Joint Statement on Managing the LIBOR Transition to once again emphasize the ions with LIBOR exposure continue to progress toward an orderly transition away frff om LIBOR. The statement expectation that supervised institutt confiff rmed that entering into new contracts, including derivatives that use LIBOR as a refeff rence rate aftff er December 31, 2021, would create safeff ty and soundness risks, including litigation, operational, and consumer protection risks. On March 15, 2022, President Biden signed the Adjustabla e Interest Rate (LIBOR) Act into law (the “LIBOR Act”). The LIBOR Act l provisions the transition frff om LIBOR to a replacement rate and avoiding related litigation. provides a clear and uniforff m feff deral solution forff addressing the permanent cessation of LIBOR by providing forff transitioning legacy contracts that either lack or contain insuffff iff cient contractuat 64 On December 16, 2022, the Federal Reserve Board adopted a fiff nal rulrr e that implements the Adjustabla e Interest Rate (LIBOR) Act by identifyiff ng benchmark rates based on SOFR that will replace LIBOR in certain fiff nancial contracts aftff er June 30, 2023. The fiff nal rurr le is substantially similar to the proposal with certain clarifyiff ng changes made in response to comments. • • • • and Derivatives Association (ISDA protocol), which incorpor For a LIBOR contract that is a derivative transaction, the “Fallback Rate (SOFR)” as defiff ned in the 2020 IBOR Fallbacks Protocol published by the International Swapsa ates the statutt orily prescribed tenor spread adjustment. For a LIBOR contract that is an FHFA-regulated-entity contract: ο ο For Federal Home Loan Bank advances, the “Fallback Rate (SOFR)” as defiff ned in the ISDA protocol; and For all other FHFA-regulated-entity contracts, SOFR (in place of overnight LIBOR) or 30-day compounded average SOFR published by FRBNY (“30-day Average SOFR,” in place of one-, three-, six-, or 12-month LIBOR), plus the appl icabla e statutt orily prescribed tenor spread adjustment. a rr For a LIBOR contract that is a FFELP ABS, either (i) 30-day Average SOFR (forff compounded average SOFR published by FRBNY (forff adjustment. For all other LIBOR contracts, including consumer loans, SOFR (in place of overnight LIBOR) or term SOFR published by CME Group Benchmark Administration, Ltd. (in place of one-, three-, six-, or 12-month LIBOR), plus the statutt orily prescribed tenor spread adjustment. one-, six-, and 12-month LIBOR) or (ii) 90-day icabla e statutt orily prescribed tenor spread three-month LIBOR), plus the appl a As early as 2018, in anticipation of the potential discontinuance of LIBOR, Wesbanco establa ished a LIBOR transition committee to effff eff ctively manage the Company’s transition away frff om LIBOR in two phases. The fiff rst phase included adding additional faff llback language to loan documents to allow Wesbanco to replace LIBOR with an equivalent rate index plus the margin to ensure the resulting interest rate is the same as it previously was using LIBOR. Also, as part of the fiff rst phase, Wesbanco began quoting to the Treasuryr Rate published by the Federal Reserve Board instead of the ICE LIBOR Swapa Index (which is tied to LIBOR) when repricing certain term loans and originating new loans. te monthly or periodically that are tied The second phase consists of working to continue to transition existing adjustaba le-rate loans that flff uctuat to LIBOR or the ICE LIBOR Swapa Index. Wesbanco is tracking the dollar amount and number of loans tied to LIBOR or the ICE LIBOR Swapa Index, monitoring current industryr trends, and working with legal counsel to ensure the smooth transition away frff om LIBOR. As of December 31, 2022, Wesbanco had a total of $1.3 billion in loans tied to either LIBOR or the ICE LIBOR Swapa index, of which $1.2 billion have a matut rity date aftff er June 30, 2023. As refeff renced above , the U.K. FCA and ICE Benchmark Administration has extended the date of publication of certain tenors of LIBOR through June 30, 2023, giving existing LIBOR based contracts time to maturt e. However, in compliance with and based upon the Agencies Joint Statements refeff renced above new contracts aftff er December 31, 2021. Accordingly, Wesbanco has initially chosen the 1M Term SOFR, which is published by the Chicago Mercantile Exchange, as an alternative replacement rate forff LIBOR. Wesbanco may also continue to utilize the Wall Street Journal Prime Rate, the Treasuryrr Rates, and other indexes as part of its lending program. At a date in the futff urt e, prior to the cessation of the publication of the one month LIBOR, Wesbanco will transition all remaining LIBOR based loans to the replacement index aftff er notififf cation to the impacted borrowers. This transition will be aided by the passage of the LIBOR Act. With respect to its back-to-back swapa program, Wesbanco worked with its swapa counterprr arty customers to institut te and accept the International Swapsa and Derivatives Association 2020 Interbar nk Offff eff red Rate Fallbacks Protocol to address LIBOR cessation in swapa transactions. Moreover, Wesbanco chose 1M Term SOFR as its replacement index foff r new loans in the bank’s back-to-back swapa program, beginning on Januaryrr 1, 2022. , Wesbanco has not offff eff red LIBOR forff a a 65 ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK The disclosures set forff th in this item are qualififf ed by the section capta ioned “Forward-Looking Statements” included in Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations of this report. MARKET RISK The primaryr objective of Wesbanco’s ALCO is to maximize net interest income within establa ished policy parameters. This objective is accomplished through the management of balance sheet composition, market risk exposures arising frff om changing economic conditions and liquidity risk. Market risk is defiff ned as the risk of loss due to adverse changes in the faff ir value of fiff nancial instrumrr tions in interest rates and bond prices. Management considers interest rate risk to be Wesbanco’s most signififf cant market risk. Interest rate risk is the exposure to adverse changes in net interest income due to changes in interest rates. The consistency of Wesbanco’s net interest income is largely dependent on effff eff ctive management of interest rate risk. As interest rates change in the market, rates earnrr ed on interest rate-sensitive assets and rates paid on interest rate-sensitive liabia lities do not necessarily move concurrently. Diffff eff ring rate sensitivities may arise because fiff xed rate assets and liabia lities may not have the same maturt ities, or because variabla e rate assets and liabia lities diffff eff r in the timing and/or tht e percentage of rate changes. ents resulting frff om flff uctuat Wesbanco’s ALCO is an executive management committee with Board representation, responsible forff monitoring and managing interest oved policy limits, utilizing earnings sensitivity simulation and economic value-at-risk models. These models are highly rate risk within appr dependent on various assumptions, which change regularly as the balance sheet and market interest rates change. The key assumptions and strategies employed are analyzed, reviewed and documented at least quarterly by the ALCO. a The earnings sensitivity simulation model projects changes in net interest income resulting frff om the effff eff cts of changes in interest rates. Forecasting changes in net interest income requires management to make certain assumptions regarding loan and security prepayment rates, call dates, changes to deposit product betas and non-maturt l cash flff ows, yields, and costs respond to changes in market interest rates. Assumptions are based on internally-developed models derived frff om Bank- specififf c data, current market rates and economic forff ecasts, and are internally back-tested and periodically reviewed by a third-party consultant. The net interest income sensitivity results presented in Tabla e 1, “Net Interest Income Sensitivity,” assumes that the balance sheet composition of interest sensitive assets and liabia lities existing at the end of the period remains constant over the period being measured and also assumes that a particular change in interest rates is reflff ected uniforff mly across the yield curve, regardless of the duration of the maturt ity or re-pricing of specififf c assets and liabia lities. Since the assumptions used in the model relative to changes in interest rates are uncertain, the simulation analysis may not be indicative of actuat l results. In addition, this analysis does not consider actions that management might employ in response to changes in interest rates, as well as changes in earning asset and costing liabia lity balances. ity deposit decay rates, which may not necessarily reflff ect the manner in which actuat Interest rate risk policy limits are determined by measuring the anticipated change in net interest income over a twelve-month period, assuming immediate and sustained market interest rate increases and decreases of 100 - 300 basis points across the entire yield curve, as compared to a stabla e rate environment or base model. Wesbanco’s current policy limits this exposure forff the noted interest rate changes to a reduction of between 7.5% - 15%, or less, of net interest income frff om the stabla e rate base model over a twelve-month period. The tabla e below indicates Wesbanco’s interest rate sensitivity at December 31, 2022 and December 31, 2021, assuming the above -noted interest rate changes, as compared to a base model. The 100 – 300 basis points decreasing changes forff December 31, 2021 are not shown due to the unrealistic and/or negative yield natut re of the results. a TABLE 1. NET INTEREST INCOME SENSITIVITY Immediate Change in Interest Rates (basis points) +200 +100 -100 -200 -300 Percentage Change in Net Interest Income frff om Base over One Year December 31, 2022 5.6% 2.8% (4.4%) (9.8%) (15.6%) December 31, 2021 11.7% 6.0% N/A N/A N/A ALCO Guidelines (10.0%) (7.5%) (7.5%) (10.0%) (15.0%) 66 Adjustments to relative sensitivities are due to the impact of the current lower rate and yield curve environment on base case net interest income and the related calculation of parallel rate shock changes in rising and faff lling rate scenarios. Additional diffff eff rences typically result frff om changes in the various earning assets and costing liabia lities mix and growth rates, as well as adjustments forff various modeling assumptions. both up and down rate scenarios than has been Generally, deposit betas utilized in modeling are estimated at more conservative percentages forff ional contract terms are the Bank’s historical experience, as a result of both competitive faff ctors in our markets and as public funds ity deposits and loans. renewed. Deposit betas, decay rates and loan prepayment speeds are adjusted periodically in our models forff Indicated model asset sensitivity in rising rate scenarios may be less than anticipated due to slower prepayment speeds, rate flff oors, below foff recast loan yields, spread compression between new asset yields and fundi negotiated rates, mortgage-related extension risk and other faff ctors. In a decreasing rate environment, asset sensitivity may have greater impact on the margin than currently modeled as prepayment speeds increase, customers refiff nance or request rate reductions on existing loans, estimated deposit betas do not perfoff rm as modeled, or forff ng costs, customer requests forff and institutt non-maturt other reasons. ff ff In addition to the aforff ementioned parallel rate shock earnings sensitivity simulation model, the ALCO also reviews a “dynamic” foff recast scenario to project net interest income over a rolling two-year time period. This forff ecast is updated at least quarterly, incorpor ating revisions and updated assumptions into the model forff estimated loan and deposit growth, expected balance sheet re-mixing strategies, changes in forff ecasted various products and other assumptions. Such modeling is directionally consistent rates forff with typical parallel rate shock scenarios, and it assists in predicting changes in forff ecasted outcomes and potential adjustments to management plans to assist in achieving earnings goals. ities, competitive market spreads forff various maturt rr Wesbanco also periodically measures the economic value of equity (“EVE”), which is defiff ned as the market value of tangible equity in various rate scenarios. Generally, changes in the economic value of equity relate to changes in various assets and liaba ilities, changes in the yield curve, as well as changes in loan prepayment speeds and deposit decay rates. The folff lowing tabla e presents these results and Wesbanco’s policy limits as of December 31, 2022 and December 31, 2021. Changes in EVE sensitivity since year-end 2021 relate to the change in maraa ket interest rates and their impact upon the faff ir values of earning assets and costing liabia lities: Immediate Change in Interest Rates (basis points) +200 +100 -100 -200 -300 Percentage Change in Economic Value of Equity frff om Base over One Year December 31, 2022 (4.3%) (1.8%) (0.8%) (7.9%) (17.5%) December 31, 2021 1.6% 1.8% N/A N/A N/A ALCO Guidelines (20.0%) (10.0%) (10.0%) (20.0%) (30.0%) The Bank has signififf cant additional borrowing capaa correspondent banks, and may utilize these fundi in various asset maturt seeking higher-yielding instrumrr managing the net interest margin in the current interest rate environment include: city with the FHLB of Pittsburgh, the Federal Reserve Bank of Cleveland and various to lengthen liabia lities, offff sff et mismatches certain customers es forff ents or maintaining deposit levels below FDIC insurance limits. Signififf cant balance sheet strategies to assist in ng sources or interest rate swapa strategies as necessaryrr ities and manage liquidity. CDARS® and ICS® deposits also may be utilized forff similar purpos ff rr increasing total loans, particularly commercial and home equity loans that have variabla e or adjustabla e feff aturt es; adjusting the percentage of sales of longer-term residential mortgage loan production into the secondaryrr market; • • • managing rates on interest bearing deposits and growing demand deposit account types to increase the relative portion of these account types to total deposits; employing back-to-back loan swapsa receiving a variabla e rate; adjusting terms forff liquidity using CDARS® and ICS® deposit programs to manage fundi adjusting the size, mix or duration of the investment portfolff FHLB short-term maturt forff ff • • • • certain commercial loan customers desiring a term fiff xed rate loan equivalent, with the Bankaa ing borrowings to balance asset/tt liabia lity mismatches; or paying them offff with excess ng needs and overall liabia lity mix, and io as part of liquidity and balance sheet management strategies. Management is aware of the signififf cant effff eff ct that inflff ation or deflff ation has upon interest rates and ultimately upon fiff nancial perforff mance. Wesbanco’s abia lity to cope with inflff ation or deflff ation is best determined by analyzing its capaa bia lity to respond to changing market interest rates, as well as its abia lity to manage the various elements of non-interest income and expense during periods of increasing or decreasing inflff ation or deflff ation. Wesbanco monitors the level and mix of interest-rate sensitive assets and liabia lities through ALCO in order to reduce the impact of inflff ation or deflff ation on net interest income. Management also controls the effff eff cts of inflff ation or deflff ation by conducting periodic reviews of the prices, costs and terms of its various products and services, as well as competitive faff ctors, by appr oving new products and servirr ces or adjusting the terms and availabia lity of existing products and services. a 67 ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARYR DATA Management's Report on Internal Control Over Financial Reporting Reports of Independent Registered Public Accounting Firm (PCAOB ID: 42) Consolidated Balance Sheets Consolidated Statements of Income Consolidated Statements of Comprehensive Income Consolidated Statement of Changes in Shareholders Equity Consolidated Statements of Cash Flows Note 1. Summaryr of Signififf cant Accounting Policies Note 2. Earnings Per Common Share Note 3. Securities Note 4. Loans and the Allowance forff Credit Losses Note 5. Premises and Equipment Note 6. Goodwill and Other Intangible Assets Note 7. Investments in Limited Partnerships Note 8. Certififf cates of Deposit Note 9. FHLB and Other Short Term Borrowings Note 10. Subordinated Debt and Junior Subordinated Debt Note 11. Derivatives and Hedging Activities Note 12. Employee Benefiff t Plans Note 13. Revenue Recognition Note 14. Other Operating Expenses Note 15. Income Taxes Note 16. Fair Value Measurement Note 17. Comprehensive Income or Loss Note 18. Commitments and Contingent Liabia lities Note 19. Wesbanco Bank Community Development Corpor Note 20. Transactions With Related Parties Note 21. Regulatoryr Matters Note 22. Condensed Parent Company Financial Statements Note 23. Business Segments ation rr Pageg 69 70 73 74 75 76 77 78 87 88 92 102 103 104 104 105 106 107 109 117 117 118 120 125 126 127 129 129 130 132 68 MANAGEMENT’S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING The management of Wesbanco is responsible forff establa ishing and maintaining adequate internal control over fiff nancial reporting. Wesbanco’s internal control over fiff nancial reporting is a process designed under the supervision of Wesbanco’s chief executive offff iff cer and chief fiff nancial offff iff cer to provide reasonabla e assurance regarding the reliabia lity of fiff nancial reporting and the preparation of Wesbancaa o’s fiff nancial statements forff es in accordance with U.S. generally accepted accounting principles. external reporting purpos rr Wesbanco’s management assessed the effff eff ctiveness of Wesbanco’s internal control over fiff nancial reporting as of December 31, 2022 based on criteria establa ished in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 frff amework) (the COSO criteria). Based on the assessment, management determined that, as of December 31, 2022, Wesbanco’s internal control over fiff nancial reporting is effff eff ctive, based on the COSO criteria. The effff eff ctiveness of Wesbanco’s internal control over fiff nancial reporting as of December 31, 2022 has been audited by Ernst & Young LLP, Wesbanco’s independent registered public accounting fiff rm, as stated in their accompanying report appe aring below. a /s/ Todd F. Clossin Todd F. Clossin President and Chief Executive Offff iff cer /s/ Daniel K. Weiss, Jr. Daniel K. Weiss, Jr. Executive Vice President and Chief Financial Offff iff cer 69 Report of Independent Registered Public Accounting Firm To the Shareholders and the Board of Directors of Wesbanco, Inc. Opinion on Internal Control Over Financial Reporting We have audited Wesbanco, Inc.’s internal control over fiff nancial reporting as of December 31, 2022, based on criteria estaba lished in Internr al Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 frff amework) (the COSO criteria). In our opinion, Wesbanco, Inc. (the Company) maintained, in all material respects, effff eff ctive internal control over fiff nancial reporting as of December 31, 2022, based on the COSO criteria. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December 31, 2022 and 2021, the related consolidated statements of income, comprm ehensive income, changes in shareholders’ equity, and cash flff ows forff each of the three years in the period ended December 31, 2022, and the related notes and our report dated Februarr ryr 27, 2023 expressed an unqualififf ed opinion thereon. Basis forff Opinion its assessment of the The Company’s management is responsible forff maintaining effff eff ctive internal control over fiff nancial reporting and forff effff eff ctiveness of internal control over fiff nancial reporting included in the accompanying Management’s Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over fiff nancial reporting based on our audit. We are a pubu lic accounting fiff rm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. feff deral securities laws and the appl icabla e rulrr es and regulations of the Securities and Exchange Commission and the PCAOB. a We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perforff m the audit to obtain reasonabla e assurance about whether effff eff ctive internal control over fiff nancial reporting was maintained in all material respects. a Our audit included obtaining an understanding of internal control over fiff nancial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effff eff ctiveness of internal control based on the assessed risk, and perforff ming such other procedures as we considered necessaryr in the circumstances. We believe that our audit provides a reasonabla e basis forff our opinion. Defiff nition and Limitations of Internal Control Over Financial Reporting A company’s internal control over fiff nancial reporting is a process designed to provide reasonabla e assurance regarding the reliabia lity of fiff nancial reporting and the preparation of fiff nancial statements forff es in accordance with generally accepted accounting principles. A rr company’s internal control over fiff nancial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonabla e detail, accurately and faff irly reflff ect the transactions and dispositions of the assets of the company; (2) provide reasonaba le assurance that transactions are recorded as necessaryrr to permit preparation of fiff nancial statements in accordance with generally accepted accounting principles, and that receipts and expenditurt es of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonabla e assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effff eff ct on the fiff nancial statements. external purpos Because of its inherent limitations, internal control over fiff nancial reporting may not prevent or detect misstatements. Also, projo ections of any evaluation of effff eff ctiveness to futff urt e periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. /s/ Ernst & Young LLP Pittsburgh, Pennsylvania ryr 27, 2023 Februarr 70 Report of Independent Registered Public Accounting Firm To the Shareholders and the Board of Directors of Wesbanco, Inc. Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of Wesbanco, Inc. (the Company) as of December 31, 2022 and 2021, the related consolidated statements of income, comprehensive income, changes in shareholders’ equity and cash flff ows forff each of the three years in the period ended December 31, 2022, and the related notes (collectively refeff rred to as the “consolidated fiff nancial statements”). In our opinion, the consolidated fiff nancial statements present faff irly, in all material respects, the fiff nancial position of the Company at December 31, 2022 and 2021, each of the three years in the period ended December 31, 2022, in conforff mity with U.S. and the results of its operations and its cash flff ows forff generally accepted accounting principles. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over fiff nancial reporting as of December 31, 2022, based on criteria establa ished in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 frff amework) and our report dated Februrr aryr 27, 2023 expressed an unqualififf ed opinion thereon. Basis forff Opinion These fiff nancial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on thet Company’s fiff nancial statements based on our audits. We are a public accounting fiff rm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. feff deral securities laws and the appl icabla e rulrr es and regulations of the Securu ities and Exchange Commission and the PCAOB. a a We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perforff m the audit to obtain reasonabla e assurance about whether the fiff nancial statements are frff ee of material misstatement, whether due to error or frff aud. Our audits included perforff ming procedures to assess the risks of material misstatement of the fiff nancial statements, whether due to error or frff aud, and perfoff rming procedud res that respond to those risks. Such procedud res included examining, on a test basis, evidence regarding the amounts and disclosures in the fiff nancial statements. Our audits also included evaluating the accounting principles used and signififf cant estimates made by management, as well as evaluating the overall presentation of the fiff nancial statements. We believe that our audits provide a reasonabla e basis forff our opinion. Critical Audit Matter The critical audit matter communicated below is a matter arising frff om the current period audit of the fiff nancial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the fiff nancial statements and (2) involved our especially challenging, subjective or complex judgments. The communication of the critical audit matter does not alter in any way our opinion on the consolidated fiff nancial statements, taken as a whole, and we are not, by communicating the critical audi t matter below, providing a separate opinion on the critical audit matter or on the account or disclosure to which it relates. aa Allll owll ance forff creditii losll s ses - loanll itt on of thtt e Descriptii MaMM tttt ett r io totaled $10.7 billion as of December 31, 2022 and the associated allowance forff The Company’s loan portfolff credit losses - loans (ACL) was $117.8 million. As discussed in Note 1 and 4 to the consolidated fiff nancial statements, the io. The ACL is calculated utilizing the ACL reflff ects the lifeff time expected credit losses on the Company’s loan portfolff each segment, which is then probabia lity of defaff ult / loss given defaff ult appr discounted to net present value. The primaryr macroeconomic drivers of the quantitative model includes the foff recast of national unemployment and interest rate spreads. The evaluation also considers qualitative faff ctors such as economic trends and conditions. oach to calculate the expected loss forff a Auditing management’s ACL estimate was complex due to the subjectivity in evaluating the national unemployment (macroeconomic forff ecast) used by the Company in their quantitative CECL model. Management relies on inforff mation obtained frff om various third parties to inforff m their view of the macroeconomic forff ecast. Other internal and external indicators of economic forff ecasts are also considered by management when establa ishing the forff ecast forff the ACL. We loans as a critical audit identififf ed auditing the reasonabla eness of management’s macroeconomic forff ecast in the ACL forff matter as it involves especially subjective auditor judgment. 71 HowHH WeWW Addressed thtt e MatMM ttt ett r inii Our Audidd tii We obtained an understanding, evaluated the design, and tested the operating effff eff ctiveness of the Company’s controls over the ACL process, including controls over the apa propriateness of the ACL methodology, the expected loss model, the reliabia lity and accuracy of data used in developing the ACL estimate, and management’s review and appr oval process over their determination of the macroeconomic forff ecast. a l soundness of model methodology, We tested management’s expected loss model including evaluating the conceptuat assessing model perforff mance and governance, testing key model assumptions, including the reasonabla e and supportabla e forff ecast, and independently recalculating model output with the assistance of EY specialists. t To test management’s determination of the macroeconomic foff recast, we evaluated the reasonaba leness of the Company’s macroeconomic assumptions and judgments in estimating futff urt e credit losses, including the selection of the forff ecasted macroeconomic assumptions and considerations of alternative forff ecasted macroeconomic scenarios. This included obtaining corroborative inforff mation, including employment statistics, economic reports and alternative economic inforff mation relating to forff ecasts, as well as perforff ming an independent search forff the existence of new or contraryrr opriate. We also verififf ed independent macroeconomic forff ecast to validate that management’s considerations are appr the underlying economic forff ecast data used to estimate the quantitative reserve was complete and accurate. Additionally, we evaluated whether the overall ACL appr io by comparing it the Company’s historical loss data and to peer bank data. We also perfoff rmed analytical procedud res on the ACL, including coverage ratios and comparison to prior periods as well as prior economic cycles. opriately reflff ects losses expected in the loan portfolff a a /s/ Ernst & Young LLP We have served as the Company’s auditor since 1996. Pittsburgh, Pennsylvania ryr 27, 2023 Februarr 72 WESBANCO, INC. CONSOLIDATED BALANCE SHEETS thtt ousands,s excee (i(( nii ASSETS Cash and due frff om banks, including interest bearing amounts of $242,229 and $1,094,312, shares)s eptee December 31, 2022 2021 respectively .................................................................................................................................. $ 408,411 $ 1,251,358 Securities: Loans held forff Portfolff Allowance forff Equity securities, at faff ir value...................................................................................................... -sale debt securities, at faff ir value ........................................................................... Availabla e-forff ity debt securities (faff ir values of $1,084,390 and $1,028,452, respectively)........ Held-to-maturt Allowance forff ity debt securities...................................................... credit losses, held-to-maturt ity debt securities............................................................................................. Net held-to-maturt Total securities ......................................................................................................................... sale ........................................................................................................................... io loans, net of unearned income .......................................................................................... credit losses - loans .................................................................................................. io loans ................................................................................................................... Premises and equipment, net............................................................................................................ Accruerr d interest receivabla e.............................................................................................................. Goodwill and other intangible assets, net ........................................................................................ Bank-owned lifeff insurance............................................................................................................... Other assets ...................................................................................................................................... Total Assets..................................................................................................................................... $ LIABILITIES Deposits: Net portfolff Non-interest bearing demand ....................................................................................................... $ Interest bearing demand ............................................................................................................... Money market .............................................................................................................................. Savings deposits........................................................................................................................... Certififf cates of deposit .................................................................................................................. Total deposits ........................................................................................................................... Federal Home Loan Bank borrowings ............................................................................................. Other short-term borrowings............................................................................................................ Subordinated debt and junior subordinated debt.............................................................................. Total borrowings ...................................................................................................................... Accruerr d interest payabla e.................................................................................................................. Other liabia lities................................................................................................................................. Total Liabilities .............................................................................................................................. SHAREHOLDERS’ EQUITY Prefeff rred stock, no par value; 1,000,000 shares authorized; 150,000 shares 6.75% non-cumulative perperr $150,000,000, issued and outstanding at December 31, 2022 and December 31, 2021, respectively .................................................................................................................................. l prefeff rred stock, Series A, liquidation prefeff rence tuat Common stock, $2.0833 par value; 100,000,000 shares authorized; 68,081,306 shares issued; 59,198,963 and 62,307,245 shares outstanding at December 31, 2022 and December 31, 2021, respectively................................................................................................. Capia tal surplrr us ................................................................................................................................. Retained earnings............................................................................................................................. Treasuryr stock (8,882,343 and 5,774,061 shares at cost, respectively)........................................... Accumulated other comprehensive loss........................................................................................... Defeff rred benefiff ts forff directors ......................................................................................................... Total Shareholders’ Equity ........................................................................................................... Total Liabilities and Shareholders’ Equity ................................................................................. $ See Notes to Consolidated Financial Statements. 73 11,506 2,529,140 1,248,629 (220) 1,248,409 3,789,055 8,249 10,702,728 (117,790) 10,584,938 220,892 68,522 1,141,355 352,361 358,122 16,931,905 4,700,438 3,119,807 1,684,023 2,741,004 885,818 13,131,090 705,000 135,069 281,404 1,121,473 4,593 248,087 14,505,243 $ $ 13,466 3,013,462 1,004,823 (268) 1,004,555 4,031,483 25,277 9,733,478 (121,622) 9,611,856 229,016 60,844 1,151,634 350,359 215,298 16,927,125 4,590,895 3,380,056 1,739,750 2,562,510 1,292,652 13,565,863 183,920 141,893 132,860 458,673 1,901 207,522 14,233,959 144,484 144,484 141,834 1,635,877 1,077,675 (308,964) (262,416) (1,828) 2,426,662 16,931,905 $ 141,834 1,635,642 977,765 (199,759) (5,120) (1,680) 2,693,166 16,927,125 WESBANCO, INC. CONSOLIDATED STATEMENTS OF INCOME thtt ousands,s excee (i(( nii INTEREST AND DIVIDEND INCOME shares and per share amountstt )s eptee Loans, including feff es ................................................................................................. $ Interest and dividends on securities: Taxaba le ................................................................................................................ Tax-exempt .......................................................................................................... Total interest and dividends on securities............................................................. Other interest income................................................................................................. Total interest and dividend income...................................................................... INTEREST EXPENSE Interest bearing demand deposits ................................................................................ Money market deposits .............................................................................................. Savings deposits........................................................................................................ Certififf cates of deposit ................................................................................................ Total interest expense on deposits ....................................................................... Federal Home Loan Bank borrowings ......................................................................... Other short-term borrowings ...................................................................................... Subordinated debt and junior subordinated debt ........................................................... Total interest expense ........................................................................................ NET INTEREST INCOME ......................................................................................... credit losses .......................................................................................... credit losses .......................................................... Provision forff Net interest income aftff er provision forff NON-INTEREST INCOME Trurr st feff es.................................................................................................................. Service charges on deposits ........................................................................................ Electronic banking feff es.............................................................................................. Net securities brokerage revenue................................................................................. insurance ......................................................................................... Bank-owned lifeff Mortgage banking income.......................................................................................... Net securities (losses) gains........................................................................................ Net gains on other real estate owned and other assets.................................................... Other income ............................................................................................................ Total non-interest income................................................................................... NON-INTEREST EXPENSE Salaries and wages .................................................................................................... Employee benefiff ts..................................................................................................... Net occupancy .......................................................................................................... Equipment and softff ware............................................................................................. Marketing................................................................................................................. FDIC insurance ......................................................................................................... Amortization of intangible assets ................................................................................ ing and merger-related expense.................................................................... Restrucrr Other operating expenses ........................................................................................... Total non-interest expense.................................................................................. income taxes........................................................................ income taxes ......................................................................................... Provision forff turt Income beforff e provision forff NET INCOME ............................................................................................................ $ Prefeff rred stock dividends ............................................................................................... NET INCOME AVAILABLE TO COMMON SHAREHOLDERS .............................. $ EARNINGS PER COMMON SHARE Basic............................................................................................................................ $ Diluted ......................................................................................................................... AVERARR GE COMMON SHARES OUTSTANDING Basic............................................................................................................................ Diluted ......................................................................................................................... DIVIDENDS DECLARED PER COMMON SHARE................................................... $ 2022 For the Years Ended December 31, 2021 2020 422,401 $ 415,965 $ 465,677 66,123 18,818 84,941 6,314 513,656 12,181 3,562 4,115 4,089 23,947 3,968 568 10,860 39,343 474,313 (1,663) 475,976 27,551 26,281 20,002 9,525 10,728 5,129 (1,777) 482 19,470 117,391 167,028 37,771 26,105 32,508 9,335 7,901 10,278 1,723 64,317 356,966 236,401 44,288 192,113 10,125 181,988 3.03 3.02 60,047,177 60,215,374 1.37 $ $ $ $ 50,401 16,161 66,562 2,440 484,967 3,669 1,803 1,031 7,623 14,126 6,167 227 6,514 27,034 457,933 (64,274) 522,207 29,511 22,412 19,318 6,896 8,936 19,528 1,113 4,816 20,255 132,785 154,242 41,033 26,843 30,006 8,634 4,150 11,457 6,717 70,061 353,143 301,849 59,589 242,260 10,125 232,135 3.54 3.53 65,520,527 65,669,970 1.32 $ $ $ $ 53,594 16,999 70,593 5,007 541,277 7,069 4,616 1,802 13,562 27,049 24,701 1,729 8,318 61,797 479,480 107,741 371,739 26,335 21,943 17,524 6,189 7,359 22,736 4,268 103 21,728 128,185 153,166 41,723 27,580 24,801 5,957 7,734 13,411 9,725 70,748 354,845 145,079 23,035 122,044 2,644 119,400 1.78 1.77 67,260,796 67,310,584 1.28 See Notes to Consolidated Financial Statements. 74 WESBANCO, INC. CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME thtt ousandsdd )s (i(( nii Net income ................................................................................................................. $ Debt securities availabla e-forff -sale: Net change in unrealized (losses) gains on debt securities availabla e-forff -sale ....... Related income tax benefiff t (expense) ................................................................ Net securities losses (gains) reclassififf ed into earnings .......................................... Related income tax (benefiff t) expense ................................................................ the period ......................................... Net effff eff ct on other comprehensive income forff Debt securities held-to-maturt ity: Amortization of unrealized gain transfeff rred frff om debt securities availabla e-forff -sale................................................................................................. Related income tax expense ............................................................................... the period ......................................... Net effff eff ct on other comprehensive income forff Defiff ned benefiff t plans: Amortization of net loss and prior service costs .................................................... Related income tax benefiff t................................................................................. Recognition of unrealized (loss) gain .................................................................... Related income tax benefiff t (expense) ................................................................ Net effff eff ct on other comprehensive income forff the period ......................................... Total other comprehensive (loss) gain ....................................................................... Comprehensive (loss) income .................................................................................... $ 2022 For the Years Ended December 31, 2021 2020 192,113 $ 242,260 $ 122,044 (339,422) 82,253 13 (3) (257,159) — — — (67,652) 16,112 (56) 13 (51,583) — — — 291 (70) (473) 115 (137) (257,296) (65,183) $ 2,521 (609) 17,386 (4,194) 15,104 (36,479) 205,781 $ 39,880 (9,727) (2,540) 604 28,217 (32) 7 (25) 3,000 (714) (420) 100 1,966 30,158 152,202 See Notes to Consolidated Financial Statements. 75 Total $ 2,593,921 122,044 30,158 152,202 (85,815) (2,644) (26,591) 144,484 (25,296) 976 — 5,653 (153) $ 2,756,737 242,260 (36,479) 205,781 (85,667) (10,125) — (182,977) 3,096 — 6,475 (154) $ 2,693,166 192,113 (257,296) (65,183) (81,286) (10,125) — (119,097) 3,050 — 6,246 (109) $ 2,426,662 WESBANCO, INC. CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY Prefeff rred Stock Amount — — — — — — 144,484 — — — — — 144,484 — — — — — — — — — — 144,484 — — eptee thtt ousands,s excee shares and per share (i(( nii amountstt )s Januaryrr 1, 2020 ..................................... $ Net income .......................................... Other comprehensive income ..................... Comprehensive income ........................ Common dividends declared ($1.28 per share). Prefeff rred dividends declared ($17.625 per share) ................................................. Adoption of ASU 2016-13 ........................ Issuance of prefeff rred stock, net of issuance costs .................................................. Treasuryrr shares acquired .......................... Stock options exercised ............................ Restricted stock granted ........................... Stock compensation expense...................... directors—net ............. Defeff rred benefiff ts forff December 31, 2020................................. $ Net income .......................................... Other comprehensive loss ......................... Comprehensive income ........................ Common dividends declared ($1.32 per share). Prefeff rred dividends declared ($16.875 per share) ................................................. Issuance of prefeff rred stock, net of issuance costs .................................................. Treasuryrr shares acquired .......................... Stock options exercised ............................ Restricted stock granted ........................... Stock compensation expense...................... directors—net ............. Defeff rred benefiff ts forff December 31, 2021................................. $ Net income .......................................... Other comprehensive loss ......................... Comprehensive income ........................ Common dividends declared ($1.37 per share). Prefeff rred dividends declared ($16.875 per share) ................................................. dividend reinvestment.......... Stock issued forff Treasuryrr shares acquired .......................... Stock options exercised ............................ Restricted stock granted ........................... Stock compensation expense...................... directors—net ............. Defeff rred benefiff ts forff December 31, 2022................................. $ Common Stock For the years ended December 31, 2022, 2021, and 2020 Shares Outstanding 67,824,428 — — Amount $ 141,827 — — Capital Surplus $ 1,636,966 — — Retained Earnings $ 824,694 122,044 — Accumulated Other Comprehensive Gain (Loss) Treasury Stock $ $ (9,463) — — 1,201 — 30,158 Defeff rred Benefiff ts forff Directors (1,304) $ — — — — — — — — — — — (85,815) (2,644) (26,591) — — — — (813,108) 61,623 181,763 — — 67,254,706 — — — — 7 — — — $ 141,834 — — — 118 (1,206) (6,753) 5,653 37 $ 1,634,815 — — — — — — — — $ 831,688 242,260 — — (25,414) 2,175 6,753 — — $ (25,949) — — — — — — — — (85,667) (10,125) — — 11,720 (5,218,275) 130,273 128,821 — — 62,307,245 — — — — — — — — $ 141,834 — — — 194 (1,388) (4,486) 6,475 32 $ 1,635,642 — — (391) — — — — — $ 977,765 192,113 — 391 (183,171) 4,484 4,486 — — $ (199,759) — — $ $ — — — — — — — — — 31,359 — (36,479) — — — — — — — — (5,120) — (257,296) — — — — — — — — (190) (1,494) — — — — — — — — — (186) (1,680) — — $ $ — — — — (81,286) — — — — — — — — — — 144,484 — 23,478 (3,407,016) 111,050 164,206 — — 59,198,963 — — — — — — — $ 141,834 — — — (529) (5,521) 6,246 39 $ 1,635,877 (10,125) (792) — — — — — $ 1,077,675 — 792 (119,097) 3,579 5,521 — — $ (308,964) $ — — — — — — — (262,416) — — — — — — (148) (1,828) $ See Notes to Consolidated Financial Statements. 76 WESBANCO, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS thtt ousandsdd )s (i(( nii OPERARR TING ACTIVITIES Net income ..................................................................................................................... $ Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization of premises and equipment...................................................... Other net amortization (accretion) .................................................................................... credit losses .............................................................................................. Provision forff Net securities losses (gains) ............................................................................................ Mortgage banking income .............................................................................................. Stock compensation expense........................................................................................... Decrease (increase) in defeff rred income tax assets, net ........................................................... insurance................................................. Increase in cash surrender value of bank-owned lifeff sale................................................................................................ Loans originated forff sale................................................................ Proceeds frff om the sale of loans originated forff Net change in: accruerr d interest receivabla e and other assets ..................................................... Net change in: accruerr d interest payabla e and other liabia lities .................................................... n— et ................................................................................................................. Other—rr Net cash provided by operating activities ............................................................................... INVESTING ACTIVITIES Net (increase) decrease in loans held forff Availabla e-forff investment ................................................................. -sale debt securities: Proceeds frff om sales ...................................................................................................... ities, prepayments and calls.................................................................. Proceeds frff om maturt Purchases of securities................................................................................................... Held-to-maturt ity debt securities: ities, prepayments and calls.................................................................. Proceeds frff om maturt Purchases of securities................................................................................................... Equity securities: tt ff Proceeds frff om sales ...................................................................................................... insurance ................................................................................. Purchases of bank owned lifeff insurance............................................................................... Proceeds frff om bank owned lifeff t............................................................................. Purchases of premises and equipment—ne io loans ....................................................................................................... Sale of portfolff Net cash (used in) provided by investing activities.................................................................... FINANCING ACTIVITIES (Decrease) increase in deposits ............................................................................................ Proceeds frff om Federal Home Loan Bank borrowings ................................................................ Repayment of Federal Home Loan Bank borrowings ................................................................ Decrease in other short-term borrowings ................................................................................ Principal repayments of fiff nance lease obligations..................................................................... purchased ..................................................................................... Decrease in feff deral funds Issuance of subordinated debt, net of issuance costs.................................................................. Repayment of subordinated debt and junior subordinated debt..................................................... Dividends paid to common shareholders ................................................................................ Dividends paid to prefeff rred shareholders................................................................................ Issuance of common stock.................................................................................................. Issuance of prefeff rred stock, net of issuance costs ..................................................................... Treasuryrr shares purchased—net........................................................................................... Net cash provided by fiff nancing activities ............................................................................... Net (decrease) increase in cash, cash equivalents and restricted cash............................................. Cash, cash equivalents and restricted cash at beginning of the year ............................................... Cash, cash equivalents and restricted cash at end of the year ....................................................... $ SUPPLEMENTAL DISCLOSURES Interest paid on deposits and other borrowings ........................................................................ $ Income taxes paid............................................................................................................. Transfeff rs of loans to other real estate owned ........................................................................... sale ..................................................................... Transfeff rs of portfolff io loans to loans held forff 2022 For the Years Ended December 31, 2021 2020 192,113 $ 242,260 $ 122,044 13,042 8,890 (1,663) 1,777 (5,129) 6,246 4,489 (10,728) (240,270) 257,290 (63,074) 44,232 (3,075) 204,140 (958,192) — 604,330 (468,399) 88,407 (335,042) — — 8,726 (7,990) — (1,068,160) (432,775) 650,000 (128,980) (6,824) (553) — 147,702 — (81,325) (10,125) — — (116,047) 21,073 (842,947) 1,251,358 408,411 37,745 24,899 1,554 — $ $ 13,387 (11,001) (64,274) (1,113) (19,528) 6,475 18,692 (8,936) (648,344) 789,823 60,503 (35,098) (6,549) 336,297 1,108,165 — 839,584 (1,955,670) 108,883 (385,538) — (40,000) 4,615 (8,535) — (328,496) 1,140,303 — (365,201) (100,057) (444) — — (60,000) (86,484) (10,125) — — (179,882) 338,110 345,911 905,447 1,251,358 32,572 35,725 526 — $ $ 14,131 (9,890) 107,741 (4,268) (22,736) 5,653 (10,518) (7,359) (910,155) 786,352 (30,280) 16,189 2,702 59,606 (538,688) 226,099 803,006 (585,930) 200,100 (82,695) 203 — 832 (7,551) 42,416 57,792 1,435,497 475,000 (1,341,814) (32,912) (422) (7,500) — (6,702) (85,253) (2,644) 59 144,484 (24,540) 553,253 670,651 234,796 905,447 75,082 36,975 263 42,416 See Notes to Consolidated Financial Statements. 77 NOTE 1. SUMMARYRR OF SIGNIFICANT ACCOUNTING POLICIES Nature of Operations— Wesbanco, Inc. (“Wesbanco” or the “Company”) is a bank holding company offff eff ring a fulff l range of fiff nancial t and investment services, mortgage banking, insurance and brokerage services. Wesbanco’s defiff ned business segments services, including trusrr are community banking and trusrr t and investment services. As of December 31, 2022, Wesbanco’s banking subsidiary,rr Wesbanco Bank, Inc. (“Wesbanco Bank” or the “Bank”), headquartered in Wheeling, West Virginia, operates through 194 branches and 188 ATM machines in West Virginia, Ohio, western Pennsylvania, Kentuct ky, southern Indiana and Maryrr land. In addition, Wesbanco operates an insurance brokerage company, Wesbanco Insurance Services, Inc., and a fulff l service broker/rr dealer, Wesbanco Securities, Inc. Use of Estimates— The preparation of fiff nancial statements in conforff mity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affff eff ct the reported amounts of assets and liaba ilities and disclosure of contingent assets and liabia lities at the date of the fiff nancial statements and the reported amounts of revenues and expenses during the reporting period. Actut al results could diffff eff r frff om those estimates. Principles of Consolidation— The Consolidated Financial Statements include the accounts of Wesbanco and those entities in which Wesbanco has a controlling fiff nancial interest. All intercompany balances and transactions have been eliminated in consolidation. Wesbanco determines whether it has a controlling fiff nancial interest in an entity by fiff rst evaluating whether the entity is a voting interest entity or a variabla e interest entity. A voting interest entity is an entity in which the total equity investment at risk is suffff iff cient to enaba le the entity losses, the right to receive residudd al retut rns and the to fiff nance itself independently and provides the equity holders with the obligation to absa orbr right to make fiff nancial and operating decisions. Wesbanco consolidates voting interest entities in which it owns all, or at least a maja ority (generally, greater than 50%) of the voting interest. Variabla e interest entities (“VIE”) are entities that in general either do not have equity investors with voting rights or that have equity the entity to support its activities. Wesbanco uses VIEs in various legal foff rms to turt e and activities of VIEs forff investors that do not provide suffff iff cient fiff nancial resources forff conduct normal business activities. Wesbanco reviews the strucrr possible consolidation. A controlling fiff nancial interest in a VIE is present when an enterprrr ise has both the power to direct the activities of the VIE that most losses of the VIE that could potentially be signififf cant to the signififf cantly impact the VIE’s economic perforff mance and the obligation to absa orbr VIE or the right to receive benefiff ts of the VIE that could potentially be signififf cant to the VIE. A VIE oftff en holds fiff nancial assets, including loans or receivabla es, real estate or other property. The company with a controlling fiff nancial interest, known as the primaryr benefiff ciaryrr , is required to ts”), forff which it does not have the power to consolidate the VIE. Wesbanco has eleven wholly-owned trusrr losses or the right to direct the activities of a VIE that most signififf cantly impact the VIE’s economic perforff mance nor the obligation to absa orbr receive a benefiff ts frff om the VIE that could be potentially signififf cant to the VIE. Accordingly, the Trusrr ts and their net assets are not included in the Consolidated Financial Statements. However, the junior subu ordinated defeff rraba le interest debentut res issued by Wesbanco to the Trurr sts (refeff r to Note 10, “Subordinated Debt and Junior Subordinated Debt”) and the common stock issued by the Trusrr ts is included in the Consolidated Balance Sheets. Wesbanco also owns non-controlling variabla e interests in certain limited partnerships forff which it does not have the power to losses or the right to direct the activities of a VIE that most signififf cantly impact the VIE’s economic perforff mance nor the obligation to absa orbr receive a benefiff t frff om the VIE that could be potentially signififf cant to the VIE. These VIEs are not consolidated into Wesbanco’s fiff nancial of statements because Wesbanco is not considered the primaryr benefiff ciary.r These investments are accounted forff accounting and are included in other assets in the Consolidated Balance Sheets. Refeff r to Note 7, “Investments in Limited Partnerships” forff ther detail. using the equity methodt furff t subsidiaries (collectively, the “Trusrr Business Combinations— Business combinations are accounted forff ying the acquisition method. As of acquisition date, the identififf abla e assets acquired and liabia lities assumed are measured at faff ir value and recognized separately frff om goodwill. Results of operations of the acquired entities are included in the consolidated statement of income frff om the date of acquisition. a by appl Revenue Recognition— Interest income, net securities gains (losses) and bank-owned lifeff insurance are not in scope of ASC 606, Revenue frff om ContCC ractstt with CusCC tomersrr . For the revenue streams in scope of ASC 606 - trusrr t feff es, service charges on deposits, net securities brokerage revenue, debit card sponsorship income, payment processing feff es, electronic banking feff es, mortgage banking income and net gain or loss on sale of other real estate owned and other assets– there are no signififf cant judgements related to the amount and timing of revenue recognition. f TrTT ust feff es: Fees are earned over a period of time between monthly and annually, per the related feff e schedule. The feff es are earned ratabla y investment, safeff keeping and other services perforff med by Wesbanco. The feff es are accruerr d when earned based on the daily In most cases, the feff es are directly debited frff om the customer account. WesMark feff es consist of on a monthly basis forff Wesbanco’s feff es and shareholder service feff es and are paid to Wesbanco by the WesMark mutuat over the period forff asset value on the last day of the quarter. investment advisoryr . involvement with the management of the funds ff l funds ff 78 p e s on depos g Service charger both commercial and personal banking customers, which are earned over the month per the related feff e schedule based on the customers’ deposits. There are also transaction-based feff es, which are earned based on specififf c transactions or customer activity within the customers’ deposit accounts. These are earned at the time the transaction or customer activity occurs. The feff es are debited frff om the customer account. itstt : There are monthly service charges forff NeNN t securities brokekk rage revenue: Commission income is earned based on customer transactions and management of investments. The oved. Annuity commissions are earned the annuity product chosen by the investing customer. The commission income frff om the commission income frff om customers’ transactions is recognized when the transaction is complete and appr based upon the carrier’s commission rate forff management of investments over time is earned continuously over a quarterly period. g a p p Debit card sps onsorsrr hipi income: The activity in this revenue stream concluded on March 31, 2021, with the sale of this program to another bank. Debit card sponsorship income was earned frff om Wesbanco’s sponsorship of its customers, which included independent service organizations, processors and other banks into diffff eff rent debit networks. For providing this service, the customers paid the bank a per transaction each transaction processed through the network. In some cases, customers were also charged annual sponsorship feff es and non-compliance feff e forff feff es as appl icabla e. The feff es were earned at the time the transaction or customer activity occurred. The feff es were either directly debited frff om the a customers' deposit accounts or were billed to the customer. y p g f Paya ment processing feff es: Payment processing feff es are earned frff om the bill payment and electronic funds transfeff r (“EFT”) services provided under the name FirstNt et. The feff es are derived frff om both the individud al consumer banking transactions and frff om businesses or servrr ice providers through monthly billing foff r total transactions occurring. These feff es are earned at the time the transaction or customer activity occurs. The feff es are debited frff om the customers’ deposit accounts or charged directly to the business or service provider. ff Electronic banking feff es: Interchange and ATM feff es are earned based on customer and ATM transactions. Revenue is recognized when the g f transaction is settled. g g g MorMM tgage t banking income: Income is earned when Wesbanco-originated loans are sold to an investor on the secondaryrr market. The investor bids on the loans. If the price is accepted, Wesbanco delivers the loan documents to the investor. Once received and apa proved by the investor, revenue is recognized and the loans are derecognized frff om the Consolidated Balance Sheet. Prior to the loans being sold, they are classififf ed as loans held forff sale, loan commitments and related derivatives are included in mortgage banking income and are somewhat offff sff et by any defeff rred direct origination costs, such as mortgage loan offff iff cer commissions. sale. Additionally, the changes in the faff ir value of the loans held forff f g d by Wesbanco’s Community Development Corpor NeNN t gain or loss on sale of other real estate owned and other assetstt : Net gain or loss on other real estate owned is recorded when the property is sold to a third party and the Bank collects substantially all of the consideration to which it is entitled in exchange forff transfeff r of the property. Net gain or loss on other assets can include, among other things, the sale of fiff xed assets, the change in faff ir value of the underlying investments ation (“Wesbanco CDC”) and residual income earned frff om the sale of Wesbanco’s debit funde ff card sponsorship program. Gains or losses are recognized upon receipt of consideration and subsequent transfeff r of the property forff fiff xed asset sales. The change in faff ir value of Wesbanco CDC investments occurs upon the change in the underlying investments as these are accounted forff utilizing the equity method, and as such, are not within the scope of ASC 606. Residudd al income frff om the sale of the debit card sponsorship program is recognized over time as per the signed agreement between Wesbanco and the buyer. thet rr Cash and Cash Equivalents— Cash and cash equivalents include cash and due frff om banks, due frff om banks – interest bearing and feff deral sold. Generally, feff deral funds one-day periods. are sold forff ff ff funds Securities— Equitytt ts forff med in connection with the Company’s defeff rred compensation plan, are reported at faff ir value with the gains and losses included in non-interest income. securities: Equity securities, which include investments in various mutuat held in grantor trusrr l funds ff Available-f- orff -sale debt securities: Debt securities not classififf ed as held-to-maturt -sale. These securities may be sold at any time based upon management’s assessment of changes in economic or fiff nancial market conditions, interest rate or prepayment risks, liquidity considerations and other faff ctors. These securities are stated at faff ir value, with the faff ir value adjustment, net of tax, reported as a separate component of accumulated other comprehensive income. ity are classififf ed as availabla e-forff HeHH ld-l amortization of premiums and accretion of discounts. Transfeff rs of debt securities into the held-to-maturtt to-maturitytt debt securities: Securities that are purchased with the positive intent and abia lity to be held until their maturt ity are stated frff om at cost and adjusted forff -sale categoryrr are made at faff ir value at the date of transfeff r. The unrealized gain or loss at the date of transfeff r is retained in other the availabla e-forff comprehensive income and in the carryir ng value of the held-to-maturt ity securities. Such amounts are amortized over the remaining lifeff of the security. Certain securities with less than 15% of their original purchase price remaining or that have experienced measurabla e credit deterioration may be sold. ity categoryrr 79 CosCC t method investmt entstt : Securities that do not have readily determinabla e faff ir values and forff which Wesbanco does not exercise signififf cant inflff uence are carried at cost. Cost method investments consist primarily of Federal Home Loan Bank (“FHLB”) stock and are included in other assets in the Consolidated Balance Sheets. Cost method investments are evaluated forff impairment whenever events or circumstances suggest that their carryir ng value may not be recoverabla e. Securities acquired in acquisitions are recorded at faff ir value with the premium or discount derived frff om the faff ir market value adjd ustment recognized into interest income on a level yield basis over the remaining lifeff of the security. Gains and losses: Net realized gains and losses on sales of securities are included in non-interest income. The cost of securities sold is -sale based on the specififf c identififf cation method. The gain or loss is determined as of the trade date. Unrealized gains and losses on availabla e-forff securities are recorded through other comprehensive income. Amortizii ation and accretion: Generally, premiums are amortized to call date and discounts are accreted to maturt ity, on a level yield basis. rr CurCC rent exee pex se of historical fiff nancials of all corpor cted credit losses (“CECC CLCC ”)” : The corpor ate and municipal bonds in Wesbanco’s held-to-maturt io are analyzed quarterly forff CECL. Wesbanco uses a databaa l historic defaff ult and recoveryrr rates on rated and non-rated transactions to estimate CECL on an individual security basis. The CECL calculated amount is adjd usted quarterly and is recorded in an allowance forff expected credit losses on the balance sheet that is deducted frff om the amortized cost basis of the held-to-maturt credit losses. Because ity investments in mortgage-backed securities and collateralized mortgage obligations are all either issued by a direct Wesbanco’s held-to-maturt governmental entity or a government-sponsored entity, there is no historical evidence supporting the establa ishment of a CECL reserve; therefoff re, Wesbanco has estimated these losses at zero, and will monitor this assumption in the futff urt e forff any economical or governmental policies that could affff eff ct this assumption. io as a contra asset, with the losses recorded on the income statement within the provision forff ate and municipal issuers and actuat ity debt portfolff ity portfolff rr Available-f- orff -sale debt securitytt impaim rment: An availabla e-forff -sale debt security is considered impaired if its faff ir value is less than its amortized cost basis. If Wesbanco intends to sell or will be required to sell the investment prior to recoveryrr of cost, the entire impairment will be recognized immediately in the Consolidated Statements of Income. If Wesbanco does not intend to sell, nor is it more likely than not that it will be required to sell, impaired securities prior to the recoveryr of their cost, a review is conducted each quarter to determine if any portion of the impairment is due to credit losses. In estimating credit losses, Wesbanco fiff rst considers the fiff nancial condition and near-term prospects of the issuer, evaluating any credit downgrades or other indicators of a potential credit problem, the type of security, either fiff xed or equity, and the receipt of principal and interest according to the contractuat l terms. If there are no indications that the impairment is credit-related, the impairment is recognized in other comprehensive income in the Consolidated Balance Sheet. If the impairment is considered to be credit-related based on management’s review of the various faff ctors that indicate credit impairment, the amount of credit impairment is calculated using the present value of fuff tut re expected cash flff ows. If the present value of fuff tut re expected cash flff ows is less than the amortized cost basis of the security, a credit loss exists and an allowance forff expected credit losses is recorded, limited by the total unrealized loss on the security, and is recognized in the Consolidated Statements of Income. The non-credit portion is calculated as the diffff eff rence between the total unrealized loss and the credit portion of that loss and is recognized in other comprehensive income. Loans and Loans Held forff Sale — Loans originated by Wesbanco are reported at the principal amount outstanding, net of unearned income including credit valuation adjustments, unamortized defeff rred loan feff e income and loan origination costs. Interest is accruerr d as earned on loans except where doubt exists as to collectabia lity, in which case accruarr sale are ents are signififf cant observabla e inputs in carried, in aggregate, at faff ir value. The use of a valuation model using quoted prices of similar instrumrr arriving at the faff ir value of loans held foff r sale. l of income is discontinued. Loans originated and intended forff Loan origination feff es and direct costs are defeff rred and accreted or amortized into interest income, as an adjustment to the yield, over the oximation thereof.ff When a loan is paid offff ,ff the remaining unaccreted or unamortized net lifeff of the loan using the level yield method, or an appr origination feff es or costs are immediately recognized into income. a l statust when a borrower has resumed paying principal and interest forff Loans are generally placed on non-accrurr al when they are 90 days past due, unless the loan is well-secured and in the process of collection. a sustained period of at least six months l principal and interest. Loans are returt ned to accrurr al statut s at an less any payments appl ied to principal during the non-accrurr al economic or legal reasons related to a borrower’s fiff nancial tut rings” policy below Loans may be returt ned to accruarr and Wesbanco is reasonabla y assured of collecting the remaining contractuat amount equal to the principal balance of the loan at the time of non-accruarr period. Loans are reported as a troubled debt restrucrr diffff iff culties, grants a concession to the borrower that it would not otherwise consider. Refeff r to the “Troubled Debt Restrucrr forff l statust ing when Wesbanco, forff additional detail. turt a 80 A loan is considered non-perforff ming, based on current inforff mation and events, if it is probabla e that Wesbanco will be unabla e to collect the l terms of the loan agreement. Non-perforff ming loans include all l loans on the cash basis only if recoveryrr payments of principal and interest when due according to the original contractuat non-accruarr of principal is reasonabla y assured. ings. Wesbanco recognizes interest income on non-accruarr l loans and troubled debt restrucrr turt Consumer loans are charged down to the net realizabla e value at 120 days past due forff open-end revolving lines of credit. Residential real estate loans are charged down to the net realizabla e value of the collateral at 180 days past due. Commercial loans are charged down to the net realizabla e value when it is determined that Wesbanco will be unabla e to collect the principal amount in fulff l. Loans are reclassififf ed to other assets at the net realizabla e value when forff eclosure or repossession of the collateral occurs. Refeff r to the “Other Real Estate Owned and Repossessed Assets” policy below forff closed-end loans and 180 days past due forff additional detail. turt ing of a loan constitutt es a TDR if the creditor, forff Troubled Debt Restructurings (“TDR”)— A restrucrr economic or legal reasons related to the debtor's fiff nancial diffff iff culties, grants a concession to the debtor that it would not otherwise consider. The determination of whether a concession has been granted includes an evaluation of the debtor’s abia lity to access funds debt with similar risk characteristics and among other things, the signififf cance of the modififf cation relative to unpaid principal or collateral value of the debt, and/or the signififf cance of ity date, or the expected duration of the loan. The most a delay in the timing of payments relative to the frff equency of payments, original maturt common concessions granted generally include one or more modififf cations to the terms of the debt such as a reduction in the interest rate below ity date at an interest rate lower than the prevailing market the prevailing market rate forff rate forff cies are considered TDR; rr all TDRs are considered nonperforff ming loans. new debt with similar risk, or reduction of the unpaid principal or interest. Additionally, all consumer bankrupt the remaining lifeff of the debt, an extension of the maturt at a market rate forff ff When determining whether a debtor is experiencing fiff nancial diffff iff culties, consideration is given to any known defaff ult on any of its debt or whether it is probaba le that the debtor would be in payment defaff ult in the foff reseeaba le fuff tut re without the modififf cation. Other indicators of fiff nancial diffff iff culty include whether the debtor has declared or is in the process of declaring bankrupt as a going concern, or the debtor’s projo ected cash flff ow to service its debt (including principal & interest) in accordance with the contractut al termrr s foff r the foff reseeaba le futff urt e, without a modififf cation. If the payment of principal at original maturt ity is primarily dependent on the value of collateral, the current value of that collateral is considered in determining whether the principal will be paid. cy, the debtor’s abia lity to continuen rr The restrucrr turt ing of a loan does not increase the allowance or provision forff credit losses unless the loan is extended or the loans are impairment, in which case a specififf c reserve is establa ished pursuant to GAAP. Portfoff lio commercial loans that are individually evaluated forff segment loss historyrr is the primaryr faff ctor forff establa ishing the allowance forff residential real estate, home equity and consumer TDRs. Non-accruarr turt ed terms forff l loans that are restrucrr aftff er they have perforff med according to the in accordance restrucrr with their modififf ed terms. TDRs may also be placed on non-accruarr turt ed terms. Loans may be removed frff om TDR statut s aftff er they have perfoff rmed according to the renegotiated terms foff r a period of time if the interest rate under the modififf ed terms is at or above l statust l as long as they continue to perforff mr turt ed or refiff nanced at market or if the loan returt ns to its original terms. l, but may move to accruarr generally remain on accruarr l if they do not perforff m in accordance with the restrucrr a period of time. TDRs on accruarr turt ed remain on non-accruarr market, is restrucrr l statust a credit losses. Acquired loans are classififf ed into two categories; purchased fiff nancial instrumrr Acquired Loans— Loans acquired in connection with acquisitions are recorded at their acquisition-date faff ir value with no carryove r of related allowance forff ents with more than insignififf cant credit deterioration (“PCD”) loans, and loans with insignififf cant credit deterioration (“non-PCD”). PCD loans are defiff ned as a loan or groupu of loans that have experienced more than insignififf cant credit deterioration since origination. Non-PCD loans will have an allowance estaba lished on credit losses. For PCD loans, an allowance is recognized on day 1 by acquisition date, which is recognized in the current period provision forff adding it to the faff ir value of the loan, which is the “Day 1 amortized cost”. There is no credit loss expense recognized on PCD loans because the initial allowance is establa ished by grossing-up the amortized cost of the PCD loan. Determining the faff ir value of the acquired loans involves estimating the principal and interest cash flff ows expected to be collected on the loans and discounting those cash flff ows at a maraa ket rate of interest. Management considers a number of faff ctors in evaluating the acquisition-date faff ir value including the remaining lifeff of the acquired loans, , estimated prepayments, payment options and other loan feff aturt es, internal risk grade, estimated value of the underlying delinquency statust collateral and interest rate environment. r PCD loans are accounted forff in accordance with Accounting Standards Codififf cation (“ASC”) 326-20, FiFF nancial InII strt umentstt – CrCC edit Losses – MeMM asure at Amortizii ed CoCC st, if,ff at acquisition, the loan or pool of loans has experienced more-than-insignififf cant credit deterioration since origination. At acquisition, Wesbanco considers several faff ctors as indicators that an acquired loan or pool of loans has experienced more-than- insignififf cant credit deterioration. These faff ctors include, but are not limited to, loans 30 days or more past due, loans with an internal risk grade of below average or lower, loans classififf ed as non-accrurr al by the acquired institut tion, the materiality of the credit and loans that have been previously modififf ed in a troubled debt restrucrr ing. turt Under ASC 326-20, a groupu of loans with similar risk characteristics can be assessed to determine if the pool of loans is PCD. However, if a loan does not have similar risk characteristics as any other acquired loan, the loan is individually assessed to determine if it is PCD. In addition, the initial allowance related to acquired loans can be estimated foff r a pool of loans if the loans have similar risk characteristics. Even if the loans were individud ally assessed to determine if they were PCD, they can be groupu ed together in the initial allowance calculation if they share similar 81 risk characteristics. Since Wesbanco uses the discounted cash flff ow (DCF) appr as the expected contractuat collected with the purchase price of the loan(s). If a PCD loan has an unfuff nded commitment at acquisition, the initial allowance forff calculation reflff ects only the expected credit losses associated with the funde ff unfunde oach, the initial allowance calculation forff PCD loans is calculated l cash shortfaff lls, discounted at the rate that equals the net present value of estimated futff urt e cash flff ows expected to be credit losses d portion of the PCD loan. Expected credit losses associated with the d commitment are included in the initial measurement of the commitment. a ff For PCD loans, the non-credit discount or premium is allocated to individual loans as determined by the diffff eff rence between the loan’s amortized cost basis and the unpaid principal balance. The non-credit premium or discount is recognized into interest income on a level yield basis over the remaining expected lifeff of the loan. For non-PCD loans, the interest and credit discount or premium is allocated to individual loans as determined by the diffff eff rence between the loan’s amortized cost basis and the unpaid principal balance. The premium or discountuu is recognized into interest income on a level yield basis over the remaining expected lifeff of the loan. Allowance forff Credit Losses— The allowance foff r credit losses specififf c to loans redudd ces the loan portfoff lio to the net amount expected to be d loanaa commitments, which collected, representing the lifeff time expected losses at the initial origination date. Similarly, an allowance forff credit losses specififf c to is recorded in other liabia lities, represents expected losses on unfunde ity debt securities are recognized in the provision forff loans, the allowance forff credit losses on the consolidated statement of operations. The allowance incorpor ies a reversion methodology beyond the reasonabla e and supportabla e forff ecast. The allowance is increased by a provision charged to operating expense and reduced by charge-offff sff , net of recoveries. Management evaluates the appr opriateness of the allowance at least quarterly. This evaluation is a inherently subjective as it requires material estimates that may be susceptible to signififf cant change frff om period to period. ates forff ward-looking inforff mation and appl d loan commitments, and the allowance forff tions in the allowance forff d commitments. Fluctuat held-to-maturt ff unfunde ff unfunde a ff rr The allowance forff credit loss calculation specififf c to loans is based on the loan’s amortized cost basis, which is comprised of the unpaid principal balance of the loan, defeff rred loan feff es (costs) and acquired premium (discount) minus any write-downs. Wesbanco made an accounting policy election to exclude accruerr d interest frff om the measurement of the allowance forff credit losses because the Company has a policy in place l, and also Wesbanco made an accounting policy election to reverse to reverse or write-offff accruerr d interest when a loan is placed on non-accruarr accruerr d interest deemed uncollectible as a reversal of interest income. However, Wesbanco is reserving, as part of the allowance forff credit losses, forff accruerr d interest on loan modififf cations under the CARES Act due to the natut re and timing of these defeff rrals. a The allowance forff oach to calculate the expected loss forff credit losses reflff ects the risk of loss on the loan portfolff opriately measure expected credit losses, management io into pools of similar risk characteristics. The Company utilizes the probabia lity of defaff ult (“PD”) / loss given disaggregates the loan portfolff defaff ult (“LGD”) appr each segment, which is then discounted to net present value. PD is the probabia lity the asset will defaff ult within a given timefrff ame and LGD is the percentage of the assets not expected to be collected due to defaff ult. The primaryr macroeconomic drivers of the quantitative model include forff ecasts of national unemployment and interest rate spreads. Management relies on macroeconomic forff ecasts obtained frff om various reputabla e sources, which may include the Federal Open Market Committee (FOMC) forff ecast and other pubu licly availaba le foff recasts frff om well recognized, leading economists. These foff recasts can range frff om one to two yearaa s, depending upon io segment and management’s judgement of what can be reasonaba ly u supported. The model reversion period ranges frff om one to three years. the faff cts and circumstances of the current state of the economy, portfolff io. To appr a The allowance forff credit losses is calculated over the loan’s contractuat ity date. For commercial and industrial (“C&I”) revolving loans with no stated maturt is calculated based on the l lifeff l lifeff is calculated based on the maturt ity date or a defaff ult date. The internal review date. For all other revolving loans, the contractuat contractuat l term does not include expected extensions, renewals or modififf cations unless management has a reasonabla e expectation as of the reporting period that Wesbanco will execute a TDR with the borrower. Management assumes a loan will become a TDR if a consumer loan has maturt ed, has a principal balance, and has previously been partially charged-offff .ff This assumption extends the maturt ity of these loans to six months beyond maturt l lifeff . For term loans, the contractuat ity date, the contractuat is based on either the estimated maturt ity date. l lifeff The loan portfolff io is segmented based on the risk profiff les of the loans. Commercial loans are segmented between commercial real estate ther segmented (“CRE”), which are collateralized by real estate, and C&I, which are typically utilized forff between land and construcrr tion (“LCD”) and improved property, which are generally loans to purchase or refiff nance owner occupied or non-owner occupu ied investment properties. LCD loans have a unique risk that the developer or builder may not complete the projo ect or not complete it on time or within budget. Improved property loans are reviewed forff risk based on the underlying real estate property such as rental or owner income, aisal value and other current lease terms, which affff eff ct debt service coverage and loan to value. Retail loans are a homogenous group, generally a appr consisting of standardized products that are smaller in amount and distributed over a large number of individual borrowers. The group is segmented into three categories – residential real estate, HELOC and consumer. general business purpos es. CRE is furff rr Contractuat l terms are adjusted forff “prepayment” rate. When Wesbanco has a specififf c expectation of diffff eff ring payment behavior forff individually. For revolving loans that do not have a principal payment schedule, a curtailment rate is faff ctored into the cash flff ow. estimated prepayments to arrive at expected cash flff ows. Wesbanco models term loans with an annualized a given loan, the loan may be evaluated The evaluation also considers qualitative faff ctors such as economic trends and conditions, which includes levels of regional unemployment, cal markets, changes in lending policies and underwriting standards, real estate values and the impact on specififf c industries and geographi a 82 delinquency and other credit quality trends, concentrations of credit risk, if any, the results of internal loan reviews and examinations by bank credit losses. Management relies on observabla e data frff om internal and external sources to the regulatoryr agencies pertaining to the allowance forff extent it is availaba le to evaluate each of these faff ctors and adjd usts the model’s quantitative results to reflff ect the impact these faff ctors may have on probabla e losses in the portfolff io. Commercial loans, including CRE and C&I that have unique characteristics are tested individually forff estimated credit losses. Specififf c such loans based on the net present value of expected futff urt e cash flff ows of the loan or the estimated opriate forff reserves are establa ished when appr realizabla e value of the collateral, if any. a Management may also adjust its assumptions to account forff l losses frff om period to period. The credit losses and may have a material impact on futff urt e results variabia lity of management’s assumptions could alter the level of the allowance forff of operations and fiff nancial condition. The loss estimation models and methods used to determine the allowance foff r credit losses are continually refiff ned and enhanced. diffff eff rences between expected and actuat Premises and Equipment—tt Premises and equipment are stated at cost less accumulated depreciation and amortization. Depreciation is lives of the assets. Leasehold improvements are amortized over the shorter of computed using the straight-line method over the estimated usefulff the estimated economic usefulff lives range frff om 3 to 10 years forff fuff rnr itut re and equipment, 15 to 39 years foff r buildings and building improvements, and 15 years foff r land improvements. Maintenance and repairs are expensed as incurred while maja or improvements that extend the usefulff lifeff of an asset are capia talized and depreciated over the estimated remaining usefulff lives of the leased assets or the remaining terms of the underlying leases. Usefulff lifeff of the asset. Operating leases are recorded as a right of use (“ROU”) asset and operating lease liabia lity, included in premises and equipment, net and other liabia lities, respectively. Operating lease ROU assets represent the right to use an underlying asset during the lease termrr and operating lease liabia lities represent our obligation to make lease payments arising frff om the lease. ROU assets and operating lease liabia lities are recognized at lease commencement based on the present value of the remaining lease payments using a discount rate that represents our incremental borrowing rate at the lease commencement date. Operating lease expense, which is comprised of amortization of the ROU asset and the implicit interest accreted on the operating lease liabia lity, is recognized on a straight-line basis over the lease term, and is recorded primarily in net occupancy expense in the consolidated statements of comprehensive income. Other Real Estate Owned and Repossessed Assets— Other real estate owned and repossessed assets, which are considered availabla e- forff -sale and are reported in other assets, are carried at the lower of cost or their estimated current faff ir value, less estimated costs to sell. Other real estate owned consists primarily of properties acquired through, or in lieu of,ff forff eclosure. Repossessed collateral primarily consists of automobiles and other types of collateral acquired to satisfyff defaff ulted consumer loans. Subsequent declines in faff ir value, if any, income and expense associated with the management of the collateral, and gains or losses on the disposition of these assets are recognized in the Consolidated Statements of Income in non-interest income. Refeff r to Note 13, “Revenue Recognition” forff ther detail. furff Goodwill and Other Intangible Assets— Wesbanco accounts forff business combinations using the acquisition method of accounting. Accordingly, the identififf abla e assets acquired, the liabia lities assumed, and any non-controlling interest of an acquired business are recorded at their estimated faff ir values as of the date of acquisition with any excess of the cost of the acquisition over the faff ir value recorded as goodwill. Other intangible assets represent purchased assets that lack physical subu stance but can be distinguished frff om goodwill because of contractuat l or other legal rights or because the asset is capa aba le of being sold or exchanged either on its own or in combination with a related contract, asset, or liabia lity. Goodwill is not amortized but is evaluated forff impairment annually, or more oftff en if events or circumstances indicate it may be impaired. Finite-lived intangible assets, which consist primarily of core deposit and customer list intangibles (long-term customer-relationship intangible assets) are amortized using straight-line and accelerated methods over their weighted-average estimated usefuff l lives, ranging frff om ten to sixteen years in total, and are tested forff impairment whenever events or circumstances indicate that their carryirr ng amount may not be recoveraba le. Non- compete agreements are recognized in other assets on the balance sheet and are amortized on a straight-line basis over the lifeff of the respective agreements, ranging frff om one to four years. ff Goodwill is evaluated forff impairment by either assessing qualitative faff ctors to determine whether it is necessaryr to perforff m the goodwill impairment test, or Wesbanco may elect to perforff m a quantitative goodwill impairment test. Under the qualitative assessment, Wesbanco assesses qualitative faff ctors to determine whether it is more likely than not that the faff ir value of its reporting units are less than their carryir ng amounts, including goodwill. If it is more likely than not, the goodwill impairment test is used to identifyff potential goodwill impairment and measure the amount of a goodwill impairment loss to be recognized, if any. The estimated faff ir value of each reporting unit is compared to its carryr ing value, including goodwill. If the estimated faff ir value of a reporting unit exceeds its carryr ing amount, the goodwill of that reporting unit is not considered impaired, and no impairment loss is recognized. However, if the carryirr ng amount of the reporting unit exceeds its faff ir value, anaa impairment loss is recognized based on the excess of a reporting unit’s carryir ng value over its faff ir value. 83 Intangible assets with fiff nite usefulff impairment whenever events or changes in circumstances indicate that their carryirr ng amount may not be recoverabla e. An impairment loss is recognized when the carryirr ng amount of an intangible asset with a fiff nite usefuff l lifeff is not recoverabla e frff om its undiscounted cash flff ows and is measured as the diffff eff rence between the carryir ng amount and the faff ir value of the asset. Wesbanco does not have any indefiff nite-lived intangible assets. lives are evaluated forff Bank-Owned Lifeff Insurance— Wesbanco has purchased lifeff insurance policies on certain executive and other offff iff cers. Wesbanco receives the cash surrender value of each policy upon its termination or benefiff ts are payabla e upon the death of the insured. These policies are recorded in the Consolidated Balance Sheets at their net cash surrender value. Changes in net cash surrender value are recognized in non-interest income in the Consolidated Statements of Income. Adjustments to cash surrender value and death benefiff ts received, if recognized as income, are currently tax-exempt. Interest Rate Lock Commitments— In order to attract potential home borrowers, Wesbanco offff eff rs interest rate lock commitments (“IRLC”) to such potential borrowers. IRLC are generally forff a loan if underwriting standards are met, but the commitment does not obligate the potential borrower to close on the loan. Accordingly, some IRLC expire prior to the fuff nding sale, which consist primarily of originated longer-term fiff xed of the related loan. For IRLC issued in connection with potential loans intended forff rate residential home mortgage loans that qualifyff secondaryrr market sale, the Bank enters into positions of forff ward month mortgage-backed securities to be announced (“TBA”) contracts on a mandatoryr basis or on a one-to-one forff ward sales contract on a best effff orff sixty days and guarantee a specififf ed interest rate forff ts basis. forff A mortgage loan sold on a mandatoryrr basis to the secondaryr market is considered sold when the mortgage loan is funde d. Wesbanco enters into TBA contracts in order to control interest rate risk during the period between the IRLC and the sale of the mortgage loan. The IRLC is executed between the mortgagee and Wesbanco, and the forff ward TBA contract is executed between Wesbanco and a counterparr rty. Both the IRLC and the forff ward TBA contract are considered derivatives. A mortgage loan sold on a best effff orff ts basis is locked into a forff wrr ard sales contract on the same day as the IRLC to control interest rate risk during the period between the IRLC and the sale of the mortgage loan. The IRLC is rty. Both the executed between the mortgagee and Wesbanco, and the forff ward sales contract is executed between Wesbanco and a counterparr IRLC and the forff ward sales contract are considered derivatives. Both types of derivatives are recorded at faff ir value and are not designated in a qualififf ed hedged accounting program. The changes in faff ir value are recorded in current earnings within mortgage banking income in the Consolidated Statements of Income. The faff ir value of IRLC is the gain or loss that would be realized on the underlying loans assuming exercise of the commitments under current market rates versus the rate incorpor ated in the commitments, taking into consideration loans cancelled prior to closing. The faff ir value of forff ward sales contracts is based on quoted market prices. Since loans typically close beforff e receipt of fuff nding frff om at faff ir value as “Loans Held forff Sale” in the Consolidated Balance Sheets. an investor, they are accounted forff ff rr Derivative Instruments and Hedging Activities— Wesbanco records all derivatives on the balance sheet at faff ir value. The accounting changes in the faff ir value of derivatives depends on the intended use of the derivative, whether Wesbanco has elected to designate a derivative forff a in a hedging relationship and appl y hedge to appl accounting. Wesbanco enters into back-to-back interest rate swapsa with commercial banking customers and then with counterparr rties foff r the offff sff etting interest rate swapa . Currently, none of Wesbanco’s derivatives are designated in qualifyff ing hedging relationships, as the derivatives are not used to manage risks within Wesbanco’s assets or liabia lities. As such, all changes in faff ir value of Wesbanco’s derivatives are recognized directly in earnings. y hedge accounting and whether the hedging relationship has satisfiff ed the criteria necessaryrr a Income Taxes— The provision forff income taxes included in the Consolidated Statements of Income includes both feff deral and state income taxes and is based on income in the fiff nancial statements, rather than amounts reported on Wesbanco’s income tax returt ns. Defeff rred tax assets and liaba ilities are recognized foff r the fuff tut re tax consequences attributaba le to diffff eff rences between the fiff nancial statement carryirr ng amounts of existing assets and liabia lities and their respective tax bases at which rates they are expected to turt naround. A test of the anticipated realizaba ility of defeff rred tax assets is perforff med at least annually. Fair Value— Fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfeff r a liaba ility in an orderly transaction between market participants. Fair value measurements are not adjusted forff transaction costs. The ASC also estaba lishes a faff ir value hierarchy that prioritizes the inputs to valuation techniques used to measure faff ir value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets foff r identical assets or liaba ilities (Level 1 measurement) and the lowest priority to unobservaba le inputs (Level 3 measurement). The three levels of the faff ir value hierarchy are described below: Level 1—Quoted prices in active markets forff or liabia lities; the same security that are accessible at the measurement date forff identical, unrestrtt icted assets Level 2—Quoted prices foff r similar instrurr ments in active markets, quoted prices foff r identical or similar instrurr ments in markets that are not active, or model-based valuation techniques where all signififf cant assumptions are observabla e, either directly or indirectly, in the market; Level 3—Valuation is generated frff om model-based techniques where one or more signififf cant assumptions are not observabla e, either directly or indirectly, in the market. These unobservabla e assumptions reflff ect estimates of assumptions that market participants would use in pricing the asset or liabia lity. Valuation techniques may include use of discounted cash flff ow models and similar techniques. 84 A fiff nancial instrumrr ent’s level within the faff ir value hierarchy is based on the lowest level of input that is signififf cant to the faff ir value measurement. Earnings Per Common Share— Basic earnings per common share (“EPS”) is calculated by dividing net income availabla e to common shareholders by the weighted-average number of shares of common stock outstanding during the period. For diluted EPS, the weighted-average the period is increased by the number of shares, which would be issued assuming the exercise of in-the-money common number of shares forff stock options and any outstanding warrants. Time-based restricted stock shares are recorded as issued and outstanding upon their grant, rather than upu on vesting, and therefoff re are included in the weighted-average shares outstanding dud e to voting rights granted at the time restricted stock is granted. Perforff mance and market-based restricted stock shares are recorded as issued and outstanding upon their achieving the required perforff mance or market faff ctors. These restricted shares are included in the number of shares outstanding forff diluted EPS if their perforff mance or market faff ctors are expected to be achieved as of the reporting date. Trust Assets— Assets held by the Bank in fiff duciaryrr or agency capaa cities forff its customers are not included as assets in the Consolidated Balance Sheets. Certain money market trusrr t assets are held on deposit at the Bank and are accounted forff as such. Stock-Based Compensation— Stock-based compensation awards granted, comprised of stock options, perforff mance and time-based restricted stock, and total shareholder returt n (“TSR”) awards are valued at faff ir value and compensation cost is recognized on a straight-line basis over the requisite service or perfoff rmance period of each award. For service-based awards with graded vesting schedud les, compensation expense is divided among the vesting periods with each separately vested portion of the award recognized in compensation expense on a straight-line basis over the requisite service period. For perforff mance-based awards and TSR awards, compensation expense is recognized evenly over the perfoff rmance period, based on the probaba ility of the achievements of the perfoff rmance or market conditions set foff rth in the plans. Upon adoption of Accounting Standards Update (“ASU”) 2016-09, “Compensation-Stock Compensation (Topic 718)”, Wesbanco recognizes forff feff iturt es as they occur rather than estimating them over the lifeff of the award. ff ff tions in the funde the plan’s underfunde d statut s. Wesbanco recognizes flff uctuat Defiff ned Benefiff t Pension Plan— Wesbanco recognizes in the statement of fiff nancial position an asset forff d statust or a liabia lity forff s occur through other comprehensive income. Plan assets are determined based on faff ir value generally representing observabla e market prices. The projected benefiff t obligation is determined based on the present value of projected benefiff t distributions at an assumed discount rate. The discount rate utilized is based on a fiff tted yield curve appr the plan to high quality corprr orate bonds availaba le in the marketpt lace to determine an equivalent discount rate. Periodic pension expense includes service rially-derived market-related value, costs, interest costs based on an assumed discount rate, an expected returt n on plan assets based on an actuat an assumed rate of annual compensation increase, and amortization or accretion of actuat rial assumptions. The service cost component is recognized in salaries and wages and the remaining costs are recognized in employee benefiff ts within the Company’s Consolidated Statement of Income. Wesbanco utilizes a fulff oach in the estimation of service and interest ying the specififf c spot rates along the yield curve used in the determination of the benefiff t obligation to the relevant projo ected components by appl cash flff ows. The plan has been closed to new entrants since August 2007; however, benefiff ts are still earned forff those plan participants with continuing employment aftff er August 2007. Refeff r to Note 12, “Employee Benefiff t Plans” forff oach whereby the yield curve compares the expected stream of futff urt e benefiff t payments forff rial gains and losses as well as other actuat in the year in which the change the plan’s overfunde l yield curve appr ther detail. d statust furff a a a aa ff (“FFKT”). The Plan provides lifeff time medical and dental benefiff ts upon retirement forff Post-retirement Medical Benefiff t Plan— Wesbanco acquired a non-qualififf ed supplemental retirement plan forff certain key employees certain empm loyees frff om Farmers Capia tal Bank Corp.rr the projo ected benefiff t meeting the eligibility requirement, which were amended by Wesbanco upon acquisition. Wesbanco recognizes a liabia lity forff d until period payments are made. Wesbanco recognizes obligation in the Consolidated Balance Sheets in other liabia lities as this plan is unfunde flff uctuat tions in the projected benefiff t obligation through other comprehensive income. The projected benefiff t obligation is based on the present value of projo ected medical and dental obligations at an assumed discount rate. Periodic benefiff t expense includes service cost, interest cost based on an assumed discount rate, and amortization or accretion of actuat rial assumptions. Refeff r to Note 12, “Employee Benefiff t Plans” forff rial gains and losses, as well as other actuat ther detail. furff ff Recent accounting pronouncements—The Financial Accounting Standards Board (“FASB”) issued Accounting Standards Updates (“ASU”) as noted below. ASU 2022-05 Financial Services – Insurance (Topic 944) In December 2022, the FASB issued ASU 2022-05, “Financial Services – Insurance (Topic 944).” The Board issued Accounting Standards Long-Duration Contracts y a retrospective transition method to LDTIs ication is elected. For Wesbanco, this te was effff eff ctive beginning on Januaryr 1, 2023. The adoption of this pronouncement did not have a material impact on the Consolidated Update No. 2018-12, Financial Services—Insurance (Topic 944): Targeted Improvements to the Accounting forff (LDTI), in August 2018. The amendments in Update 2018-12 require that an insurance entity appl as of the beginning of the earliest period presented or the beginning of the prior fiff scal year if early appl upda u Financial Statements. a a 85 ASU 2022-04 Liabilities – Supplier Finance Programs (Sub-topic 405-50) In September 2022, the FASB issued ASU 2022-04, “Liabia lities—Supplier Finance Programs (Subtopic 405-50).” The amendments in this ASU require that a buyer in a supu plier fiff nance program disclose suffff iff cient infoff rmation aba out the program to allow a user of fiff nancial statements to understand the program’s naturt e, activity during the period, changes frff om period to period, and potential magnitude . To achieve that objb ective, the buyer should disclose qualitative and quantitative infoff rmation aba out its supu plier fiff nance programs. For Wesbanco, this upu date was effff eff ctive beginning on Januaryrr 1, 2023, except forff fiff scal years beginning aftff er December 15, 2023. The adoption of this fulff l pronouncement is not expected to have a material impact on the Consolidated Financial Statements. the amendment on rollforff ward inforff mation, which is effff eff ctive forff t ASU 2022-03 Fair Value Measurement (Topic 820) In June 2022, the FASB issued ASU 2022-03, "Fair Value Measurement (Topic 820).” The amendments in this ASU clarifyff that a l restriction on the sale of an equity security is not considered part of the unit of account of the equity security, and therefoff re, is not contractuat that an entity cannot, as a separate unit of account, recognize considered in measuring faff ir value. Furthermore, the amendments to this ASU clarifyff equity securities: (1) The faff ir value of and measure a contractuat equity securities subu jb ect to contractut al sale restrictions reflff ected in the balance sheet; (2) The natut re and remaining dudd ration of the restriction(s) and; (3) The circumstances that could cause a lapsa fiff scal years beginning aftff er December 15, 2023, and interim periods within those fiff scal years. Wesbanco is currently assessing the impact of ASU 2022-03 on its Consolidated Financial Statements. e in the restriction(s). The amendments in this Update are effff eff ctive forff l sale restriction. The update to this ASU requires the folff lowing disclosures forff ASU 2022-02 Financial Instruments - Credit Losses (Topic 326) turt In March 2022, the FASB issued ASU 2022-02, "Financial Instrumrr eliminate the accounting guidance forff Troubled Debt Restrucrr Restrucrr ings by Creditors," while enhancing disclosure requirements forff borrower is experiencing fiff nancial diffff iff culty. Specififf cally, rather than appl must appl a in a new loan or a continuation of an existing loan. In addition, forff disclose current-period gross writeoffff sff by year of origination forff 326-20, "Financial Instrumrr 1, 2023. The adoption of this pronouncement did not have a material impact on the Consolidated Financial Statements. ents - Credit Losses (Topic 326)". The amendments in this ASU ings ("TDRs") by creditors in Subtopic 310-40, "Receivabla es - Troubu led Debt ings by creditors when a ying the recognition and measurement guidance forff TDRs, an entity a 310-20-35-9 through 35-11 to determine whether a modififf cation results public business entities, the amendments in this Update require that an entity scope of Subtopic ents - Credit Losses - Measured at Amortized Cost." For Wesbanco, this update was effff eff ctive beginning on Januaryr fiff nancing receivabla es and net investments in leases within thet a ing guidance in paragraphs certain loan refiff nancings and restrucrr y the loan refiff nancing and restrucrr turt turt turt ASU 2022-01 Derivatives and Hedging (Topic 815) In March 2022, the FASB issued ASU 2022-01, "Derivatives and Hedging (Topic 815)". The amendments in this ASU address several topics within ASU 2017-12, which was issued in August 2017 to improve the hedge accounting model. ASU 2022-01 expands the current last- of-ff layer method to allow multiple hedged layers of a single closed portfolff io and renames the last-of-ff layer method as the portfoff lio layer method. io layer method to include nonprepayabla e fiff nancial assets, provides additional Among other things, the ASU expands the scope of the portfolff guidance on the accounting forff r a single hedged layer or multiple hedge layers are designated and specififf es how hedge basis adjustments should be considered when determining credit losses forff the assets included in the closed portfolff io. For Wesbanco, this update was effff eff ctive beginning on Januaryrr 1, 2023. The adoption of this pronouncement did not have a material impact on the Consolidated Financial Statements. and disclosure of hedge basis adjustments that are appl io layer method whethet icabla e to the portfolff a ASU 2021-08 Business Combinations (Topic 805) In October 2021, the FASB issued ASU 2021-08, "Business Combinations (Topic 805)." The amendments in this Update require that an entity (acquirer) recognize and measure contract assets and contract liabia lities acquired in a business combination in accordance with Topic 606, "Revenue Recognition." The amendments also appl y to contract assets and contract liabia lities frff om other contracts to which the provisions of Topic 606 appl y, such as contract liabia lities frff om the sale of nonfiff nancial assets within the scope of Subtopic 610-20, "Other Income—Gains and Losses frff om the Derecognition of Nonfiff nancial Assets." For Wesbanco, this update was effff eff ctive beginning on Januaryrr 1, 2023. The adoption of this pronouncement did not have a material impact on the Consolidated Financial Statements. a a ASU 2020-04, ASU 2021-01 and ASU 2022-06 Refeff rence Rate Reforff m (Topic 848) In March 2020, the FASB issued ASU 2020-04, “Refeff rence Rate Reforff m (Topic 848)”. This ASU provided temporary,r optional guidance , or recognizing the effff eff cts of,ff the transition away frff om the London Interbar nk Offff eff red Rate to ease the potential burden in accounting forff ("LIBOR") or other refeff rence rate expected to be discontinued on fiff nancial reporting. The ASU also provides optional expedients forff contract modififf cations that replace a refeff rence rate affff eff cted by refeff rence rate reforff m. The guidance is effff eff ctive as of March 12, 2020 thrt ough December 31, 2022, and can be adopted at any time during this period. In Januaryrr 2021, the FASB issued ASU 2021-01, “Refeff rence Rate Refoff rm (Topic 86 a whether Topic 848 can be appl 848): Scope”. This ASU refiff nes the scope of Topic 848 and addresses questions about ents that do not refeff rence a rate that is expected to be discontinued, but that use an interest rate forff margining, discounting or contract price alignment that is expected to be modififf ed as a result of refeff rence rate reforff m. ASU 2021-01 is effff eff ctive upon issuance through December 31, 2024, and can be adopted at any time dud ring this period. Wesbanco has not offff eff red LIBOR foff r any new contracts aftff er December 31, 2021. Wesbanco has chosen the One Month Term Secured Overnight Financing Rate ("1M Term SOFR") as its alternative replacement rate forff LIBOR on both back- to-back swapa s and on one-month variaba le loans. A transition plan was implemented in 2021 to identifyff and modifyff Wesbanco's loans and other ents with attributes that are either directly or indirectly inflff uenced by LIBOR, and Wesbanco continues to assess the impact of fiff nancial instrumrr adopting the new guidance on the consolidated fiff nancial statements on an ongoing basis, with no material impacts expected at this time. In December 2022, the FASB issued ASU 2022-06, “Refeff rence Rate Reforff m (Topic 848): Defeff rral of the Sunset Date of Topic 848.” In the Update, the Board decided to defeff r the sunset date of Topic 848 to December 31, 2024, to permit entities to appl y the guidance in Topic 848 through the expected cessation date of USD LIBOR. In the Board’s view, that time frff ame would have been suffff iff cient to provide flff exibility foff r additional unforff eseen changes to the timeline of USD LIBOR cessation and to accommodate global interbar nk offff eff red rate (IBOR) transition. The update is not expected to have a material impact on Wesbanco’s Consolidated Financial Statements. ied to derivative instrumrr a a NOTE 2. EARNINGS PER COMMON SHARE Earnings per common share are calculated as folff lows: shares and per share amountstt )s epte both basic and diluted earnings per common share: thtt ousands,s excee (i(( nii Numerator forff Net income availabla e to common shareholders ......................................................... $ Denominator: Total average basic common shares outstanding ....................................................... Effff eff ct of dilutive stock options and other stock compensation.................................. Total diluted average common shares outstanding .................................................... Earnings per common share—basic........................................................................... $ Earnings per common share—diluted ........................................................................ 2022 For the Years Ended December 31, 2021 2020 181,988 $ 232,135 $ 119,400 60,047,177 168,197 60,215,374 3.03 3.02 $ 65,520,527 149,443 65,669,970 3.54 3.53 $ 67,260,796 49,788 67,310,584 1.78 1.77 As of December 31, 2022, 2021 and 2020, respectively, 510,211, 412,131 and 497,540 options to purchase shares were excluded in the diluted shares computation because the exercise price was greater than the average market price of the common shares and, therefoff re, the effff eff ct would be antidilutive. As of December 31, 2022, contingently issuaba le shares totaling 53,280 were estimated to be awarded under the 2022, 2021 and 2020 total shareholder returt n plans as stock perforff mance targets were met to date and were included in the diluted calculation. No shares were contingently issuabla e as of December 31, 2021 and 2020 because the perforff mance criteria was not met at that time and the effff eff ct would be antidilutive. In addition, perforff mance-based restricted stock compensation totaling 53,230 and 61,267 were estimated to be awarded as of December 31, 2022 and December 31, 2021 and are included in the calculation. No perforff mance-based restricted stock compensation was estimated to be awarded at December 31, 2020. 87 NOTE 3. SECURITIES The folff lowing tabla e presents the faff ir value and amortized cost of availabla e-forff -sale and held-to-maturt ity debt securities: (i(( nii thtt ousandsdd )s Availabla e-forff -sale debt securities U.S. Government sponsored entities and December 31, 2022 Gross Gross Unrealized Unrealized Losses Gains Amortized Cost Estimated Fair Value Amortized Cost December 31, 2021 Gross Gross Unrealized Unrealized Losses Gains Estimated Fair Value agencies ...........................................................$ 259,418 $ 2 $ (33,450) $ 225,970 $ 236,096 $ 3,922 $ (3,040) $ 236,978 Residential mortgage-backed securities and collateralized mortgage obligations of government sponsored entities and agencies ........................................................... 2,144,015 25 (297,987) 1,846,053 2,301,170 16,489 (32,446) 2,285,213 Commercial mortgage-backed securities and collateralized mortgage obligations of government sponsored entities and agencies ........................................................... Obligations of states and political 359,811 — (10,080) 349,731 364,486 4,252 (1,245) 367,493 subdivisions ..................................................... ate debt securities ...................................... rr Corpor 96,081 15,451 -sale debt securities.......................$ 2,874,776 $ Total availabla e-forff Held-to-maturt ity debt securities U.S. Government sponsored entities and 244 — 92,228 (4,097) 15,158 (293) 271 $ (345,907) $ 2,529,140 101,003 16,940 $ 3,019,695 $ 5,372 507 106,340 17,438 30,542 $ (36,775) $ 3,013,462 (35) (9) agencies ...........................................................$ 4,357 $ — $ (416) $ 3,941 $ 5,944 $ 72 $ (8) $ 6,008 Residential mortgage-backed securities and collateralized mortgage obligations of government sponsored entities and agencies ........................................................... Obligations of states and political 45,909 — (3,809) 42,100 58,147 1,409 (16) 59,540 subdivisions ..................................................... 1,177,986 20,377 rr Corpor ate debt securities ...................................... ity debt securities (1) ...................$ 1,248,629 $ Total held-to-maturt Total debt securities.................................................$ 4,123,405 $ 577 — (159,975) 1,018,588 19,761 (616) 577 $ (164,816) $ 1,084,390 848 $ (510,723) $ 3,613,530 907,649 33,083 $ 1,004,823 $ $ 4,024,518 $ (3,500) — 928,003 23,854 34,901 1,818 27,153 $ (3,524) $ 1,028,452 57,695 $ (40,299) $ 4,041,914 (1) Total held-to-maturt ity debt securities are presented on the balance sheet net of their allowance forff credit losses totaling $0.2 million and $0.3 million at December 31, 2022 and 2021, respectively. At December 31, 2022 and 2021 there were no holdings of any one issuer, other than U.S. government sponsored entities and its agencies, in an amount greater than 10% of Wesbanco’s shareholders’ equity. Equity securities, of which $9.0 million consist of investments in various mutuat ts forff med in connection with the Company’s defeff rred compensation plan, are recorded at faff ir value and totaled $11.5 million and $13.5 million at December 31, 2022 and 2021, respectively. held in grantor trusrr l funds ff 88 The folff lowing tabla e presents the amortized cost and faff ir value of availabla e-forff l ity debt securities by contractuat matut rity at December 31, 2022. Actut al matut rities will diffff eff r frff om contractut al matut rities because borrowers may have the right to call or prepay debt obligations with or without prepayment penalties. Mortgage-backed securities and collateralized mortgage obligations are classififf ed in the taba le below based on their contractut al matut rity date; however, regular principal payments and prepayments of principal are received on a monthly basis. -sale and held-to-maturt (i(( nii thtt ousandsdd )s Availabla e-forff -sale debt securities Amortized Cost Fair Value Less than one year........................................................................................................................ $ 1-5 years....................................................................................................................................... 5-10 years..................................................................................................................................... Over 10 years ............................................................................................................................... Total availabla e-forff -sale debt securities .................................................................................... $ Held-to-maturt ity debt securities Less than one year........................................................................................................................ $ 1-5 years....................................................................................................................................... 5-10 years..................................................................................................................................... Over 10 years ............................................................................................................................... Total held-to-maturt ity debt securities ...................................................................................... $ Total debt securities ......................................................................................................................... $ 36,678 126,232 450,732 2,261,134 2,874,776 25,985 102,383 379,069 741,192 1,248,629 4,123,405 $ $ $ $ $ 36,281 122,389 428,661 1,941,809 2,529,140 25,871 101,156 352,338 605,025 1,084,390 3,613,530 ff t funds Securities with an aggregate faff ir value of $2.1 billion at December 31, 2022 and 2021, respectively, were pledged as security forff , and securities sold under agreements to repurchase. There were no sales of availabla e-forff and trusrr December 31, 2022 and December 31, 2021. Proceeds frff om the sale of availabla e-forff December 31, 2020. Net unrealized (losses) gains on availabla e-forff tax, as December 31, 2022, 2021, and 2020 were ($261.8) million, ($4.7) million and $46.9 million, respectively. public the years ended the year ended -sale securities included in accumulated other comprehensive income, net of -sale securities forff -sale securities were $226.1 million forff The folff lowing tabla e presents the gross realized gains and losses on sales and calls of availabla e-forff ity debt securities, as well as gains and losses on equity securities frff om both sales and market adjustments forff the years ended December 31, 2022, 2021 and 2020, respectively. All gains and losses presented in the taba le below are included in the net securities gains (losses) line item of the income statement. For those equity securities relating to the key offff iff cer and director defeff rred compensation plan, the corresponding change in the obligation to the participant is recognized in employee benefiff ts expense. -sale and held-to-maturt (i(( nii thtt ousandsdd )s Debt securities: 2022 For the Years Ended December 31, 2021 2020 Gross realized gains ............................................................................................... $ Gross realized losses .............................................................................................. Net gains on debt securities........................................................................................ $ Equity securities: Unrealized (losses) gains recognized on securities still held ................................. $ Net realized losses recognized on securities sold .................................................. Net (losses) gains on equity securities ....................................................................... $ Net securities (losses) gains ....................................................................................... $ 168 (21) 147 (1,924) — (1,924) (1,777) $ $ $ $ $ 252 (57) 195 918 — 918 1,113 $ $ $ $ $ 3,816 (1,083) 2,733 1,541 (6) 1,535 4,268 rr The corpor ity debt portfolff ate and municipal bonds in Wesbanco’s held-to-maturt io are analyzed quarterly to determine if an allowance foff r ate and municipal issuers and actut al se of historical fiff nancials of all corpor current expected credit losses is warranted. Wesbanco uses a databaa historic defaff ult and recoveryrr rates on rated and non-rated transactions to estimate expected credit losses on an individual security basis. The expected credit losses are adjd usted quarterly and are recorded in an allowance foff r expected credit losses on the balance sheet, which is dedud cted io as a contra asset. The losses are recorded on the income statement in the provision frff om the amortized cost basis of the held-to-maturt ity securities, which was $9.5 million and $7.0 million as of December 31, 2022 forff and 2021, respectively, is excluded frff om the estimate of credit losses. Held-to-maturt ity investments in U.S. Government sponsored entities and agencies as well as mortgage-backed securities and collateralized mortgage obligations, which are all either issued by a direct governmental entity or a governr ment-sponsored entity, have no historical evidence supu porting expected credit losses; therefoff re, Wesbanco has estimated these losses at zero, and will monitor this assumption in the futff urt e forff any economical or governmental policies that could affff eff ct this assumption. credit losses. Accruerr d interest receivabla e on held-to-maturt ity portfolff rr 89 The folff lowing tabla e provides a roll-forff ward of the allowance forff credit losses on held-to-maturt ity securities forff the years ended December 31, 2022, 2021 and 2020, respectively: Allowance forff Credit Losses By Category For the Years Ended December 31, 2022, 2021 and 2020 Residential mortgage -backed securities and collateralized mortgage obligations of government sponsored entities and agencies U.S. Government sponsored entities and agencies Obligations of state and political subdivisions Corporate debt Securities Total — $ — — — — $ — $ — — — — $ — $ — — — — $ — $ — — — — $ — $ — — — — $ — $ — — — — $ 174 $ (7) — — 167 $ 130 $ 44 — — 174 $ 96 $ 34 — — 130 $ 94 $ (41) — — 53 $ 196 $ (102) — — 94 $ 133 $ 63 — — 196 $ 268 (48) — — 220 326 (58) — — 268 229 97 — — 326 thtt ousandsdd )s (i(( nii Beginning balance at Januaryr 1, 2022...$ Current period provision .................... Write-offff sff ........................................ Recoveries....................................... Ending balance at December 31, 2022..$ Beginning balance at Januaryr 1, 2021...$ Current period provision .................... Write-offff sff ........................................ Recoveries....................................... Ending balance at December 31, 2021..$ Beginning balance at Januaryr 1, 2020...$ Current period provision .................... Write-offff sff ........................................ Recoveries....................................... Ending balance at December 31, 2020..$ The folff lowing tabla es provide inforff mation on unrealized losses on availabla e-forff less than twelve months and twelve months or more, forff which an allowance forff -sale debt securities that have been in an unrealized loss credit losses has not been recorded as of position forff December 31, 2022 and 2021, respectively: lll arll srr inii (dol thtt ousands)s (( U.S. Government sponsored Less than 12 months Unrealized Losses # of Securities Fair Value December 31, 2022 12 months or more Unrealized Losses # of Securities Fair Value Fair Value Total Unrealized Losses # of Securities entities and agencies................... $ 107,011 $ (8,435) 35 $ 118,779 $ (25,015) 13 $ 225,790 $ (33,450) 48 Residential mortgage-backed securities and collateralized mortgage obligations of government sponsored entities and agencies .............................. Commercial mortgage-backed securities and collateralized mortgage obligations of government sponsored entities and agencies .............................. Obligations of states and political subdivisions .............................. ate debt securities ............... Corpor rr Total temporarily impaired 514,789 (39,246) 294 1,328,906 (258,741) 202 1,843,695 (297,987) 496 190,189 (5,106) 67,822 7,225 (1,815) (226) 38 128 3 159,543 (4,974) 7,812 4,433 (2,282) (67) 36 10 3 349,732 (10,080) 75,634 11,658 (4,097) (293) 74 138 6 762 securities................................... $ 887,036 $ (54,828) 498 $ 1,619,473 $ (291,079) 264 $ 2,506,509 $ (345,907) 90 lll arll srr inii (dol thtt ousands)s (( U.S. Government sponsored Less than 12 months Unrealized Losses # of Securities Fair Value December 31, 2021 12 months or more Unrealized Losses # of Securities Fair Value Fair Value Total Unrealized Losses # of Securities entities and agencies ................... $ 114,486 $ (1,865) 12 $ 32,688 $ (1,175) 4 $ 147,174 $ (3,040) 16 Residential mortgage-backed securities and collateralized mortgage obligations of government sponsored entities and agencies............................... Commercial mortgage-backed securities and collateralized mortgage obligations of government sponsored entities and agencies............................... Obligations of states and political subdivisions ............................... ate debt securities ................ Corpor rr Total temporarily impaired 1,568,138 (29,060) 143 141,681 (3,386) 23 1,709,819 (32,446) 166 131,970 (579) 4,307 6,990 (35) (9) 25 2 5 78,356 (666) — — — — 8 — — 210,326 (1,245) 4,307 6,990 (35) (9) 33 2 5 securities.................................... $ 1,825,891 $ (31,548) 187 $ 252,725 $ (5,227) 35 $ 2,078,616 $ (36,775) 222 Unrealized losses on debt securities in the taba les aba ove represent temporaryrr flff uctut ations resulting frff om changes in market rates in relation to fiff xed yields. Unrealized losses in the availabla e-forff as an adjustment, net of taxes, to other comprehensive income in shareholders’ equity. Wesbanco does not believe the securities presented above are impaired due to reasons of credit quality, as a l terms. substantially all debt securities are rated above Wesbanco does not intend to sell, nor is it more likely than not that it will be required to sell, loss position securities prior to recoveryr of their cost, and thereforff e, management believes the unrealized losses detailed above credit losses relating to these securities to be recognized. investment grade and all are paying principal and interest according to their contractuat do not require an allowance forff io are accounted forff -sale portfolff a a Securities that do not have readily determinabla e faff ir values and forff which Wesbanco does not exercise signififf cant influence are carried at cost. Cost method investments consist primarily of FHLB stock totaling $36.2 million and $15.9 million at December 31, 2022 and 2021, respectively, and are included in other assets in the Consolidated Balance Sheets. Cost method investments are evaluated forff impam irment whenever events or circumstances suggest that their carryirr ng value may not be recoverabla e. 91 NOTE 4. LOANS AND THE ALLOWANCE FOR CREDIT LOSSES The recorded investment in loans is presented in the Consolidated Balance Sheets net of defeff rred loan feff es and costs, and discounts on purchased loans. Net defeff rred loan costs were $9.6 million and $3.3 million at December 31, 2022 and 2021, respectively, including $0.2 million and $6.1 million, respectively, of net defeff rred income frff om SBA Payroll Protection Program ("PPP") loans. The un-accreted discount on purchased loans frff om acquisitions was $18.0 million at December 31, 2022 and $25.9 million at December 31, 2021. thtt ousandsdd )s tion.................................................................................................................. $ (i(( nii Commercial real estate: Land and construcrr Improved property ....................................................................................................................... Total commercial real estate .................................................................................................... Commercial and industrial ............................................................................................................... Commercial and industrial - PPP ..................................................................................................... Residential real estate....................................................................................................................... Home equity..................................................................................................................................... Consumer ......................................................................................................................................... io loans................................................................................................................. sale ........................................................................................................................... Loans held forff Total portfolff Total loans................................................................................................................................ $ December 31, 2022 December 31, 2021 943,887 5,117,457 6,061,344 1,571,280 8,115 2,140,584 695,065 226,340 10,702,728 8,249 10,710,977 $ $ 833,880 4,705,088 5,538,968 1,427,645 162,675 1,721,378 605,682 277,130 9,733,478 25,277 9,758,755 As of December 31, 2022, accruerr d interest receivabla e forff loans was $51.8 million. Wesbanco made an accounting policy election to exclude credit losses because the Company has a robust policy in place to reverse or write- accruerr d interest frff om the measurement of the allowance forff offff accruerr d interest when loans are placed on non-accruarr l. However, Wesbanco does have a $0.2 million reserve on the accruerr d interest related to loan modififf cations allowed under the CARES Act due to the timing and naturt e of these modififf cations. As of December 31, 2022, accrurr ed interest related to COVID-19 loan modififf cations as permitted under the CARES Act was $17.0 million. The folff lowing tabla es summarize changes in the allowance forff credit losses appl a icabla e to each categoryrr of the loan portfolff io: thtt ousandsdd )s (i(( nii Balance at beginning of year: Allowance forff credit Commercial Real Estate- Land and Construction Commercial Real Estate- Improved Property Commercial & Industrial Residential Real Estate Home Equity Consumer Deposit Overdraftff s Total For the Year Ended December 31, 2022 losses - loans ................................................. $ 7,310 $ 65,355 $ 26,875 $ 15,401 $ 724 $ 3,737 $ 2,220 $ 121,622 Allowance forff credit losses - loan commitments .............................. 4,180 201 1,497 1,576 49 272 — 7,775 Total beginning allowance forff credit losses - loans and loan commitments..................................................... Provision forff credit losses: Provision forff Provision forff Total provision forff loan losses.................................... loan commitments......................... credit losses - loans and loan commitments..................................................... Charge-offff sff .......................................................... Recoveries ........................................................... Net recoveries (charge-offff sff )............................... 11,490 65,556 28,372 16,977 773 4,009 2,220 129,397 (625) 1,845 (12,939) (201) 4,736 (1,497) 2,717 639 3,526 79 44 (272) 333 — (2,208) 593 1,220 (73) 125 52 (13,140) (795) 1,038 243 3,239 (1,068) 997 (71) 3,356 (500) 590 90 3,605 (358) 342 (16) (228) (3,476) 2,822 (654) 333 (1,622) 354 (1,268) (1,615) (7,892) 6,268 (1,624) Balance at end of period: Allowance forff credit losses - loans ................................................. 6,737 52,659 31,540 18,208 4,234 3,127 1,285 117,790 Allowance forff credit losses - loan commitments .............................. 6,025 — — 2,215 128 — — 8,368 Total ending allowance forff losses - loans and loan commitments..................................................... $ credit 12,762 $ 52,659 $ 31,540 $ 20,423 $ 4,362 $ 3,127 $ 1,285 $ 126,158 92 thtt ousandsdd )s (i(( nii Balance at beginning of year: Allowance forff credit Commercial Real Estate- Land and Construction Commercial Real Estate- Improved Property Commercial & Industrial Residential Real Estate Home Equity Consumer Deposit Overdraftff s Total For the Year Ended December 31, 2021 losses - loans ................................................. $ 10,841 $ 110,652 $ 37,850 $ 17,851 $ 1,487 $ 6,507 $ 639 $ 185,827 Allowance forff credit losses - loan commitments .............................. 6,508 712 1,275 955 45 19 — 9,514 Total beginning allowance forff credit losses - loans and loan commitments..................................................... Provision forff credit losses: Provision forff Provision forff Total provision forff loan losses ................................... loan commitments ........................ credit losses - loans and loan commitments..................................................... Charge-offff sff .......................................................... Recoveries ........................................................... Net recoveries (charge-offff sff ) .............................. 17,349 111,364 39,125 18,806 1,532 6,526 639 195,341 (3,698) (2,328) (44,831) (511) (10,749) 222 (2,708) 621 (899) 4 (2,286) 253 2,694 — (62,477) (1,739) (6,026) (22) 189 167 (45,342) (1,825) 1,359 (466) (10,527) (2,521) 2,295 (226) (2,087) (873) 1,131 258 Balance at end of period: Allowance forff credit losses - loans ................................................. 7,310 65,355 26,875 15,401 Allowance forff credit losses - loan commitments .............................. 4,180 201 1,497 1,576 (895) (414) 550 136 724 49 (2,033) (2,995) 2,511 (484) 2,694 (1,486) 373 (1,113) (64,216) (10,136) 8,408 (1,728) 3,737 2,220 121,622 272 — 7,775 Total ending allowance forff losses - loans and loan commitments..................................................... $ credit 11,490 $ 65,556 $ 28,372 $ 16,977 $ 773 $ 4,009 $ 2,220 $ 129,397 thtt ousandsdd )s (i(( nii Balance at beginning of year: Allowance forff credit Commercial Real Estate- Land and Construction Commercial Real Estate- Improved Property Commercial & Industrial Residential Real Estate Home Equity Consumer Deposit Overdraftff s Total For the Year Ended December 31, 2020 losses - loans ................................................. $ 4,949 $ 20,293 $ 14,116 $ 4,311 $ 4,422 $ 2,951 $ 1,387 $ 52,429 Allowance forff credit losses - loan commitments .............................. 235 22 311 15 250 41 — 874 Total beginning allowance forff credit losses - loans and loan commitments..................................................... Impact of adopting ASC 326 ................................. Provision forff credit losses: Provision forff Provision forff Total provision forff loan losses.................................... loan commitments......................... credit losses - loans and loan commitments..................................................... Charge-offff sff .......................................................... Recoveries ........................................................... Net recoveries (charge-offff sff )............................... 5,184 1,524 6,929 3,671 10,600 (51) 92 41 20,315 13,078 78,210 712 78,922 (1,747) 796 (951) 14,427 22,357 3,918 693 4,611 (3,727) 1,457 (2,270) 4,326 5,630 9,065 560 9,625 (1,415) 640 (775) 4,672 (3,936) 1,234 30 1,264 (969) 501 (468) 2,992 2,576 2,980 19 1,387 213 53,303 41,442 (376) — 101,960 5,685 2,999 (3,615) 1,574 (2,041) (376) (1,011) 426 (585) 107,645 (12,535) 5,486 (7,049) Balance at end of period: Allowance forff credit losses - loans ................................................. 10,841 110,652 37,850 17,851 1,487 6,507 639 185,827 Allowance forff credit losses - loan commitments .............................. 6,508 712 1,275 955 45 19 — 9,514 Total ending allowance forff losses - loans and loan commitments..................................................... $ credit 17,349 $ 111,364 $ 39,125 $ 18,806 $ 1,532 $ 6,526 $ 639 $ 195,341 93 The folff lowing tabla es present the allowance forff credit losses and recorded investments in loans by category,r as of each period-end: thtt ousandsdd )s (i(( nii December 31, 2022 Allowance forff credit losses: Allowance forff Credit Losses and Recorded Investment in Loans Commercial Real Estate- Land and Construction Commercial Real Estate- Improved Property Commercial and Industrial Residential Real Estate Home y Equity Consumer Deposit Overdraftff s Total Loans individually-evaluated ................... $ Loans collectively-evaluated.................... Loan commitments (1) ............................ credit Total allowance forff losses - loans and commitments................. $ Portfoff lio loans: Individually-evaluated forff credit — $ 6,737 6,025 $ 2,988 49,671 — 130 31,410 — $ — $ — $ — $ — $ 18,208 2,215 4,234 128 3,127 — 1,285 — 3,118 114,672 8,368 12,762 $ 52,659 $ 31,540 $ 20,423 $ 4,362 $ 3,127 $ 1,285 $ 126,158 losses(1) ............................................... $ 24,629 $ 25,369 $ 401 $ — $ — $ — $ — $ 50,399 Collectively-evaluated forff credit losses.................................................. Total portfolff io loans.................................... $ December 31, 2021 Allowance forff credit losses: Loans individually-evaluated ................... $ Loans collectively-evaluated.................... Loan commitments (1) ............................ credit Total allowance forff losses - loans and commitments................. $ Portfoff lio loans: Individually-evaluated forff credit losses(1) ............................................... $ Collectively-evaluated forff credit 919,258 943,887 5,092,088 $ 5,117,457 1,578,994 $ 1,579,395 2,140,584 $ 2,140,584 695,065 $ 695,065 226,340 $ 226,340 $ — 10,652,329 — $ 10,702,728 $ 381 6,929 4,180 $ 8,560 56,795 201 333 26,542 1,497 $ — $ 15,401 1,576 — $ 724 49 — $ — $ 3,737 272 2,220 — 9,274 112,348 7,775 11,490 $ 65,556 $ 28,372 $ 16,977 $ 773 $ 4,009 $ 2,220 $ 129,397 1,248 $ 66,635 $ 576 $ — $ — $ — $ — $ 68,459 losses.................................................. 1,721,378 $ 1,721,378 Total portfolff (1) For additional detail relating to loan commitments, see Footnote 18, "Commitments and Contingent Liabia lities". io loans.................................... $ 1,589,744 $ 1,590,320 4,638,453 $ 4,705,088 832,632 833,880 605,682 $ 605,682 277,130 $ 277,130 $ — 9,665,019 — $ 9,733,478 Commercial loan risk grades are determined based on an evaluation of the relevant characteristics of each loan, assigned at inception and adjusted thereaftff er at any time to reflff ect changes in the risk profiff le throughout the lifeff of each loan. The primaryrr faff ctors used to determine the source of repayment and overall fiff nancial strengtht of the borrower. risk grade are the suffff iff ciency, reliabia lity and sustainabia lity of the primaryr The rating system more heavily weights the debt service coverage, leverage and loan to value faff ctors to derive the risk grade. Other faff ctors that are considered at a lesser weighting include management, industryr or property type risks, payment history,r collateral or guarantees. Commercial real estate – land and construcrr tion consists of loans to fiff nance investments in vacant land, land development, constrt ucrr tion of tion of commercial buildings. Commercial real estate – improved property consists of loans foff r the purchase or residential housing, and construcrr refiff nance of all types of improved owner-occupied and investment properties. Factors that are considered in assigning the risk grade varyr tion and development loans is based on the overall viabia lity of depending on the type of property fiff nanced. The risk grade assigned to construcrr ly complete the project, project specififf c and market the project, the experience and fiff nancial capaa tion or pre-leases foff r commercial absa orptrr investment property. The risk grade assigned to commercial investment property loans is based primarily on the adequacy of the net operating income generated by the property to service the debt (“debt service coverage”), the loan to appr aised value, the type, quality, indud stryr and mix of tenants, and the terms of leases. The risk grade assigned to owner-occupied commercial real estate is based primarily on global debt service in which the business operates, the business’ specififf c competitive coverage and the leverage of the business, but may also consider the industryr advantages or disadvantages, collateral margins and the quality and experience of management. ion rates and comparabla e property values, and the amount of pre-sales forff city of the developer or builder to successfulff residential housing construcrr a C&I loans consist of revolving lines of credit to fiff nance accounts receivabla e, inventoryrr and other general business purposes; term loans to a variety of businesses. fiff nance fiff xed assets other than real estate, and letters of credit to support trade, insurance or governmental requirements forff faff ctors that are considered in risk rating C&I Most C&I borrowers are privately-held companies with annual sales up to $100 million. Primaryrr loans include debt service coverage and leverage. Other faff ctors including operating trends, collateral coverage along with management experience are also considered. 94 Pass loans are those that exhibit a historyr of positive fiff nancial results that are at least comparabla e to the average forff their industryr or type of real estate. The primaryr source of repayment is acceptabla e and these loans are expected to perforff m satisfaff ctorily during most economic cycles. Pass loans typically have no signififf cant external faff ctors that are expected to adversely affff eff ct these borrowers more than others in the same industryrr or property type. Any minor unfaff voraba le characteristics of these loans are outweighed or mitigated by other positive faff ctors including but not limited to adequate secondaryrr or tertiaryrr sources of repayment. Criticized loans, considered as compromised, have potential weaknesses that deserve management's close attention. If leftff uncorrrr ected, these potential weaknesses may result in deterioration of the repayment prospects forff the asset or in the bank's credit position at some futff urt e date. Criticized loans are not adversely classififf ed by the banking regulators and do not expose the bank to suffff iff cient risk to warrant adverse classififf cation. Classififf ed loans, considered as substandard and doubtfulff , are equivalent to the classififf cations used by banking regulators. Subsu tandard loans are inadequately protected by the current sound worth and paying capaa city of the obligor or of the collateral pledged, if any. Loans so classififf ed must have a well-defiff ned weakness or weaknesses that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the bank will sustain some loss if the defiff ciencies are not corrected. These loans may or may not be reported as non-accruarr l. loans have all the weaknesses inherent in those classififf ed substandard, with the added characteristic that the weaknesses make collection Doubtfulff or liquidation in fulff l, on the basis of currently known faff cts, conditions, and values, highly questionabla e and improbabla e. These loans are reported as non-accruarr l. The folff lowing tabla es summarize commercial loans by their assigned risk grade: thtt ousandsdd )s (i(( nii As of December 31, 2022 Pass ............................................................................................................ $ Criticized—compromised.......................................................................... Classififf ed—substandard ............................................................................ .................................................................................. Classififf ed—doubtfulff Total....................................................................................................... $ As of December 31, 2021 Pass ............................................................................................................ $ Criticized—compromised.......................................................................... Classififf ed—substandard ............................................................................ .................................................................................. Classififf ed—doubtfulff Total....................................................................................................... $ Commercial Loans by Internally Assigned Risk Grade Commercial Real Estate- Land and Construction Commercial Real Estate- Improved Property Commercial & Industrial Total Commercial Loans 911,804 1,329 30,754 — 943,887 823,316 7,955 2,609 — 833,880 $ $ $ $ 4,940,135 121,393 55,929 — 5,117,457 4,400,872 222,830 81,386 — 4,705,088 $ $ $ $ 1,538,300 25,223 15,872 — 1,579,395 1,540,569 17,733 32,018 — 1,590,320 $ $ $ $ 7,390,239 147,945 102,555 — 7,640,739 6,764,757 248,518 116,013 — 7,129,288 Residential real estate, home equity and consumer loans are not assigned internal risk grades other than as required by regulatoryrr guidelines that are based primarily on the age of past dudd e loans. Wesbanco primarily evaluates the credit quality of residential real estataa e, home equity and consumer loans based on repayment perforff mance and historical loss rates. The aggregate amount of residential real estate, home equity and consumer loans classififf ed as substandard in accordance with regulatoryrr guidelines were $24.8 million at December 31, 2022 and $30.2 million at December 31, 2021, of which $5.9 million and $7.4 million were accruirr ng, forff each period, respectively. These loans are not included in the . In addition, $25.0 million and $21.7 million of unfunde tabla es above d criticized and classififf ed commercial loan commitments are not included a a in the tabla es above forff December 31, 2022 and 2021, respectively. ff 95 The folff lowing tabla es summarize the age analysis of all categories of loans. Age Analysis of Loans 30-59 Days Past Due 60-89 Days Past Due 90 Days or More Past Due Total Past Due Total Loans 90 Days or More Past Due and Accruing (1) $ $ $ $ 629 84 713 1,586 1,551 1,063 530 5,443 — 5,443 51 3,042 3,093 559 2,840 685 627 7,804 — 7,804 Current thtt ousandsdd )s tion.................................... $ (i(( nii As of December 31, 2022 Commercial real estate: 942,236 Land and construcrr 5,099,342 Improved property ......................................... 6,041,578 Total commercial real estate ...................... 1,574,311 Commercial and industrial................................. 2,129,095 Residential real estate ........................................ 686,762 Home equity....................................................... 222,153 Consumer ........................................................... 10,653,899 io loans........................................... Total portfolff Loans held forff 8,249 sale ............................................. Total loans.......................................................... $ 10,662,148 $ — $ 2,147 2,147 1,427 853 3,885 2,910 11,222 — $ 11,222 910 331 1,241 519 3,536 621 704 6,621 — $ 6,621 $ 741 15,637 16,378 3,138 7,100 3,797 573 30,986 — $ 30,986 $ 1,651 18,115 19,766 5,084 11,489 8,303 4,187 48,829 — $ 48,829 $ 943,887 5,117,457 6,061,344 1,579,395 2,140,584 695,065 226,340 10,702,728 8,249 $ 10,710,977 a Nonperforff ming loans included above folff lows: Non-accruarr TDRs accruirr ng interest (1)................................. Total non-perforff ming......................................... $ l loans .............................................. $ are as 10,337 3,131 13,468 $ 1,495 7 $ 1,502 $ $ 870 32 902 $ 25,483 60 $ 25,543 27,848 99 $ 27,947 $ $ 38,185 3,230 41,415 tion.................................... $ As of December 31, 2021 Commercial real estate: Land and construcrr Improved property ......................................... Total commercial real estate ...................... Commercial and industrial................................. Residential real estate ........................................ Home equity....................................................... Consumer ........................................................... io loans........................................... Total portfolff Loans held forff sale ............................................. Total loans.......................................................... $ 833,755 4,681,028 5,514,783 1,583,347 1,702,587 599,189 273,577 9,673,483 25,277 9,698,760 $ — $ — $ 6,377 6,377 2,275 2,331 2,240 1,532 14,755 — $ 14,755 7,728 7,728 1,213 3,254 602 1,208 14,005 — $ 14,005 125 9,955 10,080 3,485 13,206 3,651 813 31,235 — $ 31,235 $ 125 24,060 24,185 6,973 18,791 6,493 3,553 59,995 — $ 59,995 $ 833,880 4,705,088 5,538,968 1,590,320 1,721,378 605,682 277,130 9,733,478 25,277 $ 9,758,755 a Nonperforff ming loans included above folff lows: Non-accruarr TDRs accruirr ng interest (1)................................. Total non-perforff ming......................................... $ l loans .............................................. $ are as 11,174 3,275 14,449 $ $ 914 3 917 $ $ 564 127 691 $ 23,090 341 $ 23,431 24,568 471 $ 25,039 $ $ 35,742 3,746 39,488 (1) Loans 90 days or more past due and accruirr ng interest exclude TDRs 90 days or more past due and accruirr ng interest. 96 The folff lowing tabla es summarize nonperforff ming loans: thtt ousandsdd )s tion ...................................................... $ (i(( nii With no related specififf c allowance recorded: Commercial real estate: Land and construcrr Improved property............................................................ Commercial and industrial ............................................... Residential real estate....................................................... Home equity ..................................................................... Consumer ......................................................................... Total nonperforff ming loans without a specififf c allowance Total nonperforff ming loans with a specififf c allowance ..... Total nonperforff ming loans............................................... $ Nonperforff ming Loans December 31, 2022 December 31, 2021 Recorded Investment Related Allowance Unpaid Principal Balance (1) Recorded Investment Related Allowance Unpaid Principal Balance (1) 112 18,367 4,102 21,084 6,970 316 50,951 — 50,951 $ $ 112 16,601 3,112 16,057 5,374 159 41,415 — 41,415 $ $ — $ — — — — — — — — $ 74 9,846 6,528 25,492 6,985 869 49,794 — 49,794 $ $ 73 8,089 5,256 20,065 5,440 565 39,488 — 39,488 $ $ — — — — — — — — — (1) The diffff eff rence between the unpaid principal balance and the recorded investment generally reflff ects amounts that have been previously charged-offff and faff ir market value adjustments on acquired nonperforff ming loans. thtt ousandsdd )s (i(( nii With no related specififf c allowance recorded: For the Year Ended December 31, 2022 Average Interest Recorded Income Investment Recognized Nonperforff ming Loans For the Year Ended December 31, 2021 Average Interest Income Recorded Investment g Recognized For the Year Ended December 31, 2020 Average Interest Recorded Income Investment g Recognized tion.............................................. $ Commercial real estate: Land and construcrr Improved property ................................................... Commercial and industrial........................................... Residential real estate .................................................. Home equity................................................................. Consumer ..................................................................... Total nonperforff ming loans without a specififf c allowance With a specififf c allowance recorded: Commercial real estate: Land and construcrr tion.............................................. Improved property ................................................... Commercial and industrial........................................... Residential real estate .................................................. Home equity................................................................. Consumer ..................................................................... Total nonperforff ming loans with a specififf c allowance ..... Total nonperforff ming loans .............................................. $ 79 9,324 4,233 17,873 5,298 406 37,213 — — — — — — — 37,213 $ $ 2 99 12 247 37 5 402 — — — — — — — 402 $ $ 176 7,207 4,077 20,971 5,561 420 38,413 — 1,669 — — — — 1,669 40,082 $ $ — $ 32 11 155 13 3 214 — — — — — — — 214 $ 571 7,193 5,256 19,651 5,806 377 38,854 — 2,672 38 878 141 11 3,740 42,594 $ $ — 61 7 168 22 2 260 — — — — — — — 260 97 The folff lowing tabla es present the recorded investment in non-accruarr l loans and TDRs: thtt ousandsdd )s tion.................................................................................................................. $ (i(( nii Commercial real estate: Land and construcrr Improved property ....................................................................................................................... Total commercial real estate .................................................................................................... Commercial and industrial ............................................................................................................... Residential real estate....................................................................................................................... Home equity..................................................................................................................................... Consumer ......................................................................................................................................... Total ................................................................................................................................................. $ Non-accrual Loans (1) December 31, 2022 December 31, 2021 112 16,254 16,366 2,946 13,695 5,044 134 38,185 $ $ 73 7,715 7,788 5,064 17,190 5,163 537 35,742 (1) At December 31, 2022, there were three borrowers with loan balances greater than $1.0 million totaling $11.8 million, as compm ared to three borrowers with a loan balance greater than $1.0 million totaling $4.1 million at December 31, 2021. Total non-accruarr l loans include loans that are also TDRs. Such loans are also set forff lowing tabla e as non-accruarr th in the folff l TDRs. thtt ousandsdd )s tion ................................................ $ (i(( nii Commercial real estate: Land and construcrr Improved property ...................................................... Total commercial real estate................................... Commercial and industrial.................................................. Residential real estate ......................................................... Home equity ....................................................................... Consumer............................................................................ Total.................................................................................... $ Accruing December 31, 2022 Non-Accrual Total Accruing December 31, 2021 Non-Accrual Total TDRs — $ 347 347 166 2,362 330 25 3,230 $ — $ 29 29 — 1,464 218 — 1,711 $ — $ 376 376 166 3,826 548 25 4,941 $ — $ 374 374 192 2,875 277 28 3,746 $ — $ 133 133 — 1,156 258 — 1,547 $ — 507 507 192 4,031 535 28 5,293 As of December 31, 2022 and December 31, 2021, there were no TDRs greater than $1.0 million. The concessions granted in the maja ority of loans reported as accrurr ing and non-accrurr al TDRs are extensions of the matut rity date or the amortization period, redud ctions in the interest rate below the prevailing market rate forff longer than six months. Wesbanco had unfunde d commitments to debtors whose loans were classififf ed as nonperforff ming of $0.1 million as of both December 31, 2022 ff and 2021. loans with comparabla e characteristics, and/or permitting interest-only payments forff The folff lowing tabla e presents details related to loans identififf ed as TDRs during the years ended December 31, 2022 and 2021: lll arll srr inii thtt ousands)s (dol (( Commercial real estate: Land and construcrr tion .......................................... Improved property................................................ Total commercial real estate ............................ Commercial and industrial ....................................... Residential real estate............................................... Home equity ............................................................. Consumer ................................................................. Total ......................................................................... New TDRs (1) For the Year Ended December 31, 2022 Pre- Modififf cation Outstanding Recorded Investment Post- Modififf cation Outstanding Recorded Investment Number of Modififf cations New TDRs (1) For the Year Ended December 31, 2021 Pre- Modififf cation Outstanding Recorded Investment Post- Modififf cation Outstanding Recorded Investment Number of Modififf cations 1 2 3 — — — — 3 $ $ 84 1,286 1,370 — — — — 1,370 $ $ — — — — — — — — — $ — — 1 1 1 — 3 $ — $ — — 178 103 57 — 338 $ — — — 172 100 54 — 326 (1) Excludes loans that were either paid offff or charged-offff by period end. The pre-modififf cation balance represents the balance outstanding at the beginning of the period. The post-modififf cation balance represents the outstanding balance at period end. 98 The folff that were restrucrr lowing tabla e summarizes TDRs which defaff ulted (defiff ned as past due 90 days) during the years ended December 31, 2022 and 2021 turt ed within the last twelve months prior to December 31, 2022 and 2021: lll arll srr inii thtt ousands)s (dol (( Commercial real estate: Land and construcrr tion ......................................................................... Improved property............................................................................... Total commercial real estate ........................................................... Commercial and industrial ...................................................................... Residential real estate.............................................................................. Home equity ............................................................................................ Consumer ................................................................................................ Total ........................................................................................................ Defauff lted TDRs (1) For the Year Ended December 31, 2022 Defauff lted TDRs (1) For the Year Ended December 31, 2021 Number of Defauff lts Recorded Investment Number of Defauff lts Recorded Investment — $ — — — — — — — $ — — — — — — — — — $ — — — 1 — — 1 $ — — — — 234 — — 234 (1) Excludes loans that were either charged-offff or cured by period end. The recorded investment is as of December 31, 2022 and 2021. TDRs that defaff ult are placed on non-accruarr l statust unless they are both well-secured and in the process of collection. The loans in the tabla e a above were not accruirr ng interest. Section 4013 of the CARES Act allows fiff nancial institut tions the option to temporarily suspend certain requirements under GAAP related to TDRs forff a limited period of time during the COVID-19 pandemic. These customers must meet certain criteria, such as they were in good standing and not more than 30 days past due either as of December 31, 2019, or as of the implementation of the modififf cation program under the Interagency Statement, as well as other requirements noted in the regulatoryr agencies’ revised statement. Based on this guidance, Wesbanco does not classifyff the COVID-19 loan modififf cations as TDRs, nor are the customers considered past due with regard to their delayed payments. Upon exiting the into the program. Under the loan modififf cation defeff rral program, the measurement of loan delinquency will resume where it leftff offff upon entryrr CARES Act, Wesbanco has modififf ed appr oximately 3,600 loans totaling $2.2 billion, of which $0.8 million remain in their defeff rral period as of December 31, 2022. Wesbanco originally offff eff red three to six months of defeff rred payments to commercial and retail customers impacted by the th quarter of 2020, Wesbanco offff eff red up COVID-19 pandemic depending on the type of loan and the industryrr forff based on to an additional twelve months of defeff rred payments to certain commercial loan customers, predominantly in the hospitality industry,r specififf c criteria related to the borrower, the underlying property and the potential forff commercial loans. In the four guarantors / co-borrowers. a ff The folff lowing tabla e summarizes the recognition of interest income on nonperforff ming loans: thtt ousandsdd )s (i(( nii Average nonperforff ming loans.................................................................................... $ Amount of contractuat l interest income on nonperforff ming loans............................... Amount of interest income recognized on nonperforff ming loans............................... 2022 For the years ended December 31, 2021 2020 $ 37,213 2,722 402 $ 40,082 1,213 214 42,594 2,827 260 99 The folff lowing tabla e summarizes amortized cost basis loan balances by year of origination and credit quality indicator. thtt ousandsdd )s (i(( nii Commercial real estate: land and construction 2022 Loans As of December 31, 2022 Amortized Cost Basis by Origination Year 2021 2020 2019 2018 Prior Revolving Loans Amortized Cost Basis Revolving Loans Converted to Term Total Risk rating: Pass ................................. $ Criticized - compromised ...... Classififf ed - substandard ........ ............. Classififf ed - doubtfulff Total ........................................ $ 159,769 559 — — 160,328 $ 136,131 265 — — $ 136,396 $ 138,171 — 6,001 — $ 144,172 $ 155,141 — — — $ 155,141 $ $ 61,823 24 — — 61,847 $ $ 51,381 31 124 — 51,536 $ 117,237 — — — $ 117,237 Commercial real estate: improved property Risk rating: Pass ................................. $ 1,082,984 Criticized - compromised ...... 10,554 Classififf ed - substandard ........ — ............. — Classififf ed - doubtfulff Total ........................................ $ 1,093,538 Commercial and industrial $ 620,205 354 658 — $ 621,217 $ 613,663 2,877 275 — $ 616,815 $ 528,004 7,659 15,489 — $ 551,152 $ 371,880 13,551 9,761 — $ 395,192 $ 1,551,478 85,332 29,712 — $ 1,666,522 $ $ 72,327 1,066 34 — 73,427 $ $ $ $ $ $ 92,151 450 24,629 — 117,230 $ $ 911,804 1,329 30,754 — 943,887 99,594 — — — 99,594 $ 4,940,135 121,393 55,929 — $ 5,117,457 22,206 4,124 5,420 — 31,750 $ 1,538,300 25,223 15,872 — $ 1,579,395 232,062 2,524 2,854 — 237,440 $ 526,025 7,654 1,066 — $ 534,745 478,977 853 2,680 6,654 489,164 $ $ — $ — — — — $ 190,740 — — 42 190,782 $ 2,129,095 853 3,536 7,100 $ 2,140,584 25,203 1,165 458 2,425 29,251 $ 644,430 2,260 — 16 $ 646,706 16,337 217 57 79 16,690 $ $ 25,755 31 — — 25,786 $ $ $ $ 957 38 10 434 1,439 27 — — — 27 $ $ $ $ 686,762 3,885 621 3,797 695,065 222,153 2,910 704 573 226,340 Risk rating: Pass ................................. $ Criticized - compromised ...... Classififf ed - substandard ........ ............. Classififf ed - doubtfulff Total ........................................ $ Residential real estate Loan delinquency: Current ............................. $ 30-59 days past due ............. 60-89 days past due ............. 90 days or more past due....... Total ........................................ $ Home equity Loan delinquency: Current ............................. $ 30-59 days past due ............. 60-89 days past due ............. 90 days or more past due....... Total ........................................ $ Consumer Loan delinquency: Current ............................. $ 30-59 days past due ............. 60-89 days past due ............. 90 days or more past due....... Total ........................................ $ 280,510 917 93 — 281,520 $ 184,805 1,192 3,209 — $ 189,206 $ 116,890 270 976 — $ 118,136 541,659 — — — 541,659 $ 556,928 — 442 — $ 557,370 $ 211,496 — 349 — $ 211,845 10,718 80 — — 10,798 84,817 980 184 183 86,164 $ $ $ $ 1,459 61 15 — 1,535 36,123 937 293 208 37,561 $ $ $ $ 1,133 180 — 572 1,885 25,071 488 94 69 25,722 $ $ $ $ $ $ $ $ 72,142 8,278 2,157 — 82,577 $ 103,660 264 97 — $ 104,021 97,160 — 65 285 97,510 1,774 67 50 93 1,984 25,535 159 47 32 25,773 $ $ $ $ $ $ 52,135 — — 119 52,254 1,088 34 88 257 1,467 8,488 98 29 2 8,617 $ $ $ $ $ $ $ $ 100 $ $ $ $ $ $ 62,676 526 1,256 — 64,458 $ $ 823,316 7,955 2,609 — 833,880 28,507 13,733 49 — 42,289 $ 4,400,872 222,830 81,386 — $ 4,705,088 16,226 5,029 5,136 — 26,391 $ 1,540,569 17,733 32,018 — $ 1,590,320 thtt ousandsdd )s (i(( nii Commercial real estate: land and construction 2021 Loans As of December 31, 2021 Amortized Cost Basis by Origination Year 2020 2019 2018 2017 Prior Revolving Loans Amortized Cost Basis Revolving Loans Converted to Term Total Risk rating: Pass ................................. $ Criticized - compromised ...... Classififf ed - substandard ........ ............. Classififf ed - doubtfulff Total ........................................ $ 135,179 85 — — 135,264 $ 217,389 6,236 73 — $ 223,698 $ 198,974 — — — $ 198,974 $ 117,157 33 — — $ 117,190 $ $ 27,186 — — — 27,186 $ $ 29,696 219 1,280 — 31,195 Commercial real estate: improved property Risk rating: Pass ................................. $ Criticized - compromised ...... Classififf ed - substandard ........ ............. Classififf ed - doubtfulff Total ........................................ $ 713,697 7,755 9,355 — 730,807 $ 660,856 15,195 2,686 — $ 678,737 $ 589,674 52,859 4,855 — $ 647,388 $ 405,689 17,697 3,730 — $ 427,116 $ 404,241 14,490 11,010 — $ 429,741 $ 1,539,275 99,687 49,667 — $ 1,688,629 $ $ $ $ 35,059 856 — — 35,915 58,933 1,414 34 — 60,381 Commercial and industrial Risk rating: Pass ................................. $ Criticized - compromised ...... Classififf ed - substandard ........ ............. Classififf ed - doubtfulff Total ........................................ $ Residential real estate Loan delinquency: Current ............................. $ 30-59 days past due ............. 60-89 days past due ............. 90 days or more past due....... Total ........................................ $ Home equity Loan delinquency: Current ............................. $ 30-59 days past due ............. 60-89 days past due ............. 90 days or more past due....... Total ........................................ $ Consumer Loan delinquency: Current ............................. $ 30-59 days past due ............. 60-89 days past due ............. 90 days or more past due....... Total ........................................ $ 406,495 590 134 — 407,219 $ 159,878 551 236 — $ 160,665 $ 99,472 693 18,465 — $ 118,630 $ 136,146 2,558 766 — $ 139,470 599,244 1,127 563 1,933 602,867 $ 292,653 — 91 673 $ 293,417 $ 116,147 — — 895 $ 117,042 10,076 — — 187 10,263 60,907 435 413 115 61,870 $ $ $ $ 835 84 — 88 1,007 43,871 370 375 141 44,757 $ $ $ $ 649 45 132 119 945 50,317 214 82 222 50,835 $ $ $ $ $ $ 71,253 69 271 88 71,681 379 128 15 112 634 19,289 136 19 65 19,509 $ $ $ $ $ $ $ $ 89,049 1,645 2,139 — 92,833 56,917 105 43 762 57,827 566 50 188 234 1,038 11,084 85 33 1 11,203 $ $ $ $ $ $ $ $ 223,514 1,278 1,419 — 226,211 $ 409,789 5,389 3,723 — $ 418,901 536,444 1,030 2,286 8,802 548,562 $ $ — $ — — — — $ 29,929 — — 53 29,982 $ 1,702,587 2,331 3,254 13,206 $ 1,721,378 18,064 628 267 2,550 21,509 $ 567,478 1,247 — — $ 568,725 32,343 241 286 265 33,135 $ $ 55,739 51 — 4 55,794 $ $ $ $ 1,142 58 — 361 1,561 27 — — — 27 $ $ $ $ 599,189 2,240 602 3,651 605,682 273,577 1,532 1,208 813 277,130 The folff lowing tabla e summarizes other real estate owned and repossessed assets included in other assets: thtt ousandsdd )s (i(( nii Other real estate owned.................................................................................................................... $ Repossessed assets ........................................................................................................................... Total other real estate owned and repossessed assets ...................................................................... $ December 31, 2022 2021 1,397 89 1,486 $ $ — — — Residential real estate included in other real estate owned was $0 at both December 31, 2022 and December 31, 2021. At December 31, 2022 and 2021, forff mal forff eclosure proceedings were in process on residential real estate loans totaling $4.9 million and $4.0 million, respectively. Previously, as a result of provisions of the CARES Act, certain residential real estate loans were temporarily suspended frff om entering forff eclosure proceedings, which included $0.8 million of loans as of December 31, 2021. Since this moratorium had substantially ended during the fiff rst quarter of 2022, there are currently no loans suspended frff om entering forff eclosure proceedings. 101 NOTE 5. PREMISES AND EQUIPMENT Premises and equipment include: thtt ousandsdd )s (i(( nii Land and improvements................................................................................................................... $ Buildings and improvements ........................................................................................................... Furniturt e and equipment .................................................................................................................. Total cost.......................................................................................................................................... Accumulated depreciation and amortization.................................................................................... Right of use assets............................................................................................................................ Total premises and equipment, net .................................................................................................. $ December 31, 2022 2021 57,817 216,593 111,259 385,669 (212,733) 47,956 220,892 $ $ 58,534 222,407 109,159 390,100 (208,254) 47,170 229,016 Depreciation and amortization expense of premises and equipment charged to operations forff the years ended December 31, 2022, 2021 and 2020 was $13.0 million, $13.4 million and $14.1 million, respectively. Operating leases are recorded as a right of use (“ROU”) asset and operating lease liabia lity, included in premises and equipment, net and other liabia lities, respectively, on the consolidated balance sheet. Operating lease ROU assets represent the right to use an underlying asset dudd ring the lease term and operating lease liaba ilities represent our obligation to make lease payments arising frff om the lease. ROU assets and operating lease liabia lities are recognized at lease commencement based on the present value of the remaining lease payments using a discount rate that represents our incremental borrowing rate at the lease commencement date. Operating lease expense, which is comprised of amortization of the ROU asset and the implicit interest accreted on the operating lease liabia lity, is recognized on a straight-line basis over the lease term, and is recorded primarily in net occupancy expense in the consolidated statements of comprehensive income. Operating leases relate primarily to bank branches, offff iff ce space and license agreements with remaining lease terms of generally 1 to 30 years, which include options forff multiple fiff ve and ten year extensions, with a weighted average lease term of 16.0 years. As of December 31, 2022, operating lease ROU assets and liabia lities were $38.8 million and $43.0 million, respectively, and as of December 31, 2021, operating lease operating leases was $4.6 million, $5.2 ROU assets and liabia lities were $43.1 million and $47.5 million, respectively. The lease expense forff million and $5.8 million forff the years ended December 31, 2022, 2021 and 2020, respectively. The weighted average discount rate was 2.92% as of December 31, 2022. Wesbanco also has certain softff ware licenses and maintenance agreements that are not subject to ASC 842, "Leases." Of those, the Bank has a contract with its core banking softff ware provider through 2027, in which it is projected the annual obligation dud ring the contract period will be a minimum of $10.7 million per year. Finance leases relate primarily to bank branches and offff iff ce space with remaining lease terms of generally 5 to 25 years, which include options forff multiple fiff ve and ten year extensions, with weighted-average lease terms of 20.0 years. As of December 31, 2022, the fiff nance lease ROU assets and liabia lities were $9.2 million and $9.8 million, respectively, and were $4.1 million and $4.8 million, respectively, as of December 31, 2021. The weighted average discount rate was 3.42% and 3.78% as of December 31, 2022 and 2021, respectively. Amortization the years ended December 31, 2022, 2021 and 2020, costs related to fiff nance lease ROU assets was $0.5 million, $0.4 million and $0.4 million forff respectively. Interest expense related to fiff nance lease ROU assets was $0.2 million forff each of the years ended December 31, 2022, 2021 and 2020, respectively. Futurt e minimum lease payments under non-cancellabla e leases with initial or remaining lease terms in excess of one year at Decembem r 31, 2022 are as folff lows (in tht ousandsdd ): Year 2023................................................................................................................................ $ 2024................................................................................................................................ 2025................................................................................................................................ 2026................................................................................................................................ 2027................................................................................................................................ 2028 and thereaftff er ........................................................................................................ Total lease payments...................................................................................................... $ Less: capia talized interest ................................................................................................ Present value of lease liabia lities..................................................................................... $ Operating Leases Finance Leases Total 4,812 $ 4,477 4,345 4,223 3,720 34,123 55,700 $ (12,743) 42,957 $ 951 $ 957 927 875 653 9,907 14,270 $ (4,515) 9,755 $ 5,763 5,434 5,272 5,098 4,373 44,030 69,970 (17,258) 52,712 102 NOTE 6. GOODWILL AND OTHER INTANGIBLE ASSETS Wesbanco’s Consolidated Balance Sheets include goodwill of $1.1 billion as of December 31, 2022 and 2021, respectively, all of which relates to the Community Banking segment. Wesbanco’s other intangible assets of $44.6 million and $54.9 million at December 31, 2022 and 2021, respectively, primarily consist of core deposit and other customer list intangibles, which have fiff nite lives and are amortrr ized using straight line and accelerated methods. Other intangible assets are being amortized over estimated usefulff lives ranging frff om ten to sixteen years. the years ended Amortization of core deposit and customer list intangible assets totaled $10.3 million, $11.5 million and $13.4 million forff December 31, 2022, 2021 and 2020, respectively. Wesbanco completed its annual goodwill impairment evaluation as of November 30, 2022 and determined that goodwill was not impaired as of such date as well as at December 31, 2022, as there were no signififf cant changes in market conditions, consolidated operating results, or forff ecasted futff urt e results frff om November 30, 2022. Additionally, there were no events or changes in circumstances indicating impairment of other intangible assets as of December 31, 2022. The folff lowing tabla e shows Wesbanco’s capia talized other intangible assets and related accumulated amortization: thtt ousandsdd )s (i(( nii Other intangible assets: Gross carryir ng amount ..................................................................................................................... $ Accumulated amortization ............................................................................................................... Net carryir ng amount of other intangible assets................................................................................ $ December 31, 2022 2021 110,358 (65,764) 44,594 $ $ 115,032 (60,159) 54,873 The folff lowing tabla e shows the amortization on Wesbanco’s other intangible assets forff each of the next fiff ve years (in tht ousandsdd ): Year 2023 ................................................................................................................................................................................ 2024 ................................................................................................................................................................................ 2025 ................................................................................................................................................................................ 2026 ................................................................................................................................................................................ 2027 ................................................................................................................................................................................ 2028 and thereaftff er ......................................................................................................................................................... Total................................................................................................................................................................................ $ $ Amount 9,088 8,251 7,475 6,737 6,214 6,829 44,594 103 NOTE 7. INVESTMENTS IN LIMITED PARTNERSHIPS rr Wesbanco is a limited partner in several tax-advantaged limited partnerships whose purpos oved low-income housing investment tax credit projects. These investments are accounted forff using the equity method of accounting and are included in other assets in the Consolidated Balance Sheets. The limited partnerships are considered to be VIEs as they generally do not have equity investors with voting rights or have equity investors that do not provide suffff iff cient fiff nancial resources to support their activities. The VIEs have not been consolidated because Wesbanco is not considered the primaryrr benefiff ciary.r All of Wesbanco’s investments in limited partnerships are privately held, and their market values are not readily availabla e. As of December 31, 2022 and 2021, Wesbanco had $34.2 million and $27.9 million, respectively, invested in these partnerships. Wesbanco also recognizes the unconditional unfunde d equity commitments of $15.1 million and $12.5 million at ff December 31, 2022 and 2021, respectively, in other liabia lities. Wesbanco classififf es the amortization of the investment as a component of income the years ended December 31, 2022, tax expense (benefiff t) and proportionally amortizes the investment over the tax credit period. The amount forff 2021 and 2020 was $3.6 million, $3.4 million and $3.3 million, respectively. Tax benefiff ts attributed to these partnerships include low-income housing and historic tax credits which totaled $3.5 million, $3.1 million and $3.2 million forff the years ended December 31, 2022, 2021 and 2020, respectively, which are also included in income tax expense. e is to invest in appr a Wesbanco is also a limited partner in fiff ve other limited partnerships as of December 31, 2022. These provide seed money and capaa ital to startupt companies, and fiff nancing to low-income housing projects. As of December 31, 2022 and 2021, Wesbanco had $3.3 million and $9.9 million, respectively, invested in these partnerships, which are recorded in other assets using the equity method. Wesbanco included in operations under the equity method of accounting its share of the partnerships’ net (loss) income of ($0.9) million, $3.6 million and ($0.6) million forff the years ended December 31, 2022, 2021 and 2020, respectively. (Losses) gains totaling ($1.0) million and $3.8 million related to the sale and the change in the faff ir value of the underlying investments funde ation, which is included within the partnerships' net income forff the years ended December 31, 2022 and December 31, 2021, respectively. This income is located within net gain (loss) on other real estate owned and other assets on the consolidated statements of income and predominantly relates to tht e sale and faff ir value changes in the underlying Tech Growth investment, which was sold in 2022. d by Wesbanco's Community Development Corpor ff rr The folff lowing tabla e presents the scheduled equity commitments to be paid to the limited partnerships over the next fiff ve years andaa in the aggregate thereaftff er as of December 31, 2022: Year 2023 ................................................................................................................................................................................ 2024 ................................................................................................................................................................................ 2025 ................................................................................................................................................................................ 2026 ................................................................................................................................................................................ 2027 ................................................................................................................................................................................ 2028 and thereaftff er ......................................................................................................................................................... Total................................................................................................................................................................................ $ $ Amount 3,954 6,252 2,061 922 584 1,348 15,121 NOTE 8. CERTIFICATES OF DEPOSIT Certififf cates of deposit in denominations of $250 thousand or more were $133.9 million and $313.2 million as of December 31, 2022 and the 2021, respectively. Interest expense on certififf cates of deposit of $250 thousand or more was $2.0 million, $3.8 million and $8.6 million forff years ended December 31, 2022, 2021 and 2020, respectively. At December 31, 2022, the scheduled maturt ities of total certififf cates of deposit are as folff lows (i(( n thousands)s : Year 2023 ................................................................................................................................................................................ 2024 ................................................................................................................................................................................ 2025 ................................................................................................................................................................................ 2026 ................................................................................................................................................................................ 2027 ................................................................................................................................................................................ 2028 and thereaftff er ......................................................................................................................................................... Total................................................................................................................................................................................ $ $ Amount 556,450 181,367 82,976 40,309 24,159 557 885,818 104 NOTE 9. FHLB AND OTHER SHORT-TERM BORROWINGS Wesbanco is a member of the FHLB system. Wesbanco’s FHLB borrowings, which consist of borrowings frff om the FHLB of Pittsburgh are secured by a blanket lien by the FHLB on certain residential mortgages and other loan types or securities with a market value in excess of the outstanding balances of the borrowings. As of December 31, 2022 and 2021, Wesbanco had FHLB borrowings of $705.0 million and $183.9 million, respectively, with a remaining weighted-average interest rate of 4.22% and 1.28%, respectively. The terms of the security agreement with the FHLB include a specififf c assignment of collateral that requires the maintenance of qualifyiff ng mortgage and other types of loans as pledged collateral with unpaid principal amounts in excess of the FHLB advances, when discounted at certain pre-establa ished percentages of the loans’ unpaid principal balances. FHLB stock owned by Wesbanco totaling $36.2 million and $15.9 million at December 31, 2022 and 2021, respectively, is also pledged as collateral on these advances. The remaining maximum borrowing capaa city by Wesbanco with the FHLB at oximately $3.6 billion and $3.8 billion, respectively. December 31, 2022 and 2021 was estimated to be appr a The folff lowing tabla e presents the aggregate annual maturt 2022 based on their contractuat l maturt ity dates and interest rates (dol ities and weighted-average interest rates of FHLB borrowings at December 31, (( larsrr in thousands)s : Year 2023 ................................................................................................................................................ $ 2024 ................................................................................................................................................ 2025 ................................................................................................................................................ 2026 ................................................................................................................................................ 2027 ................................................................................................................................................ 2028 and thereaftff er ......................................................................................................................... Total................................................................................................................................................ $ Scheduled Maturity Weighted Average Rate 705,000 — — — — — 705,000 4.22% — — — — — 4.22% Other short-term borrowings of $135.1 million and $141.9 million at December 31, 2022 and 2021, respectively, consist in the aggregate of securities sold under agreements to repurchase, feff deral funds purchased, and outstanding borrowings on a revolving line of credit. At December 31, 2022 and 2021, securities sold under agreements to repurchase were $135.1 million and $141.9 million, respectively, with a purchased outstanding at weighted average interest rate during the year of 0.39% and 0.15%, respectively. There were no feff deral funds December 31, 2022 or 2021, respectively. ff ff In August 2022, Wesbanco renewed a revolving line of credit, which is a senior obligation of the parent company with another fiff nancial aggregate unsecured borrowings of upu to $30.0 ion. This line of credit, which accruerr s interest at an adjusted SOFR rate, provides forff institutt million. There were no outstanding balances on the line of credit as of December 31, 2022 or 2021. 105 NOTE 10. SUBORDINATED DEBT AND JUNIOR SUBORDINATED DEBT Wesbanco completed the issuance of $150.0 million in aggregate principal amount of subordinated debenturt es on March 23, 2022. The subordinated debenturt es have a fiff xed rate of 3.75% forff the next fiff ve years at Three Month Term Secured the fiff rst fiff ve years and a flff oating rate forff Overnight Financing Rate ("SOFR") plus a spread of 1.787%. The subordinated debenturt es are callabla e aftff er fiff ve years, maturt e on April 1, 2032 and count towards Tier 2 Capia tal. the purpos t II, Wesbanco Capia tal Statutt oryr Trusrr e of issuing Trusrr t prefeff rred securities, and lending the proceeds to Wesbanco. The Trusrr ts, consisting of Wesbanco Capia tal Trusrr ts 2, 3 and 4, Community Bank Shares Statutt oryr Trusrr rr Certain trusrr ts IV, V and VI, Oak Hill Capia tal Trusrr t t II are all wholly-owned trusrr subsidiaries of Wesbanco forff med forff t Prefeff rred Securities”) into a pool of other fiff nancial services entity trusrr t Prefeff rred Securities were issued and sold in private ts were invested in Junior placement offff eff rings. The proceeds frff om the sale of the securities and the issuance of common stock by the Trusrr Subu ordinated Defeff rraba le Interest Debentut res (“Junior Subu ordinated Debt”) issued by Wesbanco and foff rmer acquired banks, which are the sole t Prefeff rred Securities at the same rate as the distributions paid by Wesbanco on the assets of the Trusrr Junior Subordinated Debt held by the Trusrr ts provide Wesbanco with the option to defeff r payment of interest on the Junior Subordinated an aggregate of 20 consecutive quarterly periods. Should any of these options be utilized, Wesbanco may not declare or pay dividends Debt forff on its common stock during any such period. Undertakings made by Wesbanco with respect to the Trusrr the Trurr sts l and unconditional guarantee by Wesbanco of the obligations of these Trusrr constitutt e a fulff ts I and II and First Federal Statutt oryr Trusrr ts pay dividends on the Trusrr t III, Wesbanco Capia tal Trusrr t Prefeff rred Securities (“Trusrr t Prefeff rred Securities forff t Prefeff rred Securities. ts. The Trusrr ts. The Trusrr The Junior Subordinated Debt is presented as a separate categoryrr of long-term debt on the Consolidated Balance Sheets. For regulatoryr t Prefeff rred Securities provide the es, at December 31, 2022, all such securities are counted as Tier 2 capia tal subject to limits. The Trusrr rr ent that has a tax-deductible interest feff aturt e not normally associated with the equity of a corpor rr purpos issuer with a unique capia tal instrumrr ation. The folff lowing tabla e shows Wesbanco’s trusrr t subsidiaries with outstanding Trusrr t Prefeff rred Securities as of December 31, 2022: thtt ousandsdd )s t II (1) .............................................. $ (i(( nii Wesbanco Capia tal Trusrr Wesbanco Capia tal Statutt oryrr Trusrr Wesbanco Capia tal Trusrr Wesbanco Capia tal Trusrr Wesbanco Capia tal Trusrr Oak Hill Capia tal Trusrr Oak Hill Capia tal Trusrr Oak Hill Capia tal Trusrr Community Bank Shares Statutt oryrr Trusrr Community Bank Shares Statutt oryrr Trusrr First Federal Statutt oryr Trusrr Total...................................................................................... $ t III (2) ............................. t IV (3)............................................. t V (3) .............................................. t VI (4)............................................. t 2 (5).................................................. t 3 (6).................................................. t 4 (7).................................................. t I (3)..................... t II (8).................... t II (9) ....................................... Trust Prefeff rred Securities Common Securities Junior Subordinated Debt 13,000 17,000 20,000 20,000 15,000 5,000 8,000 5,000 6,902 9,801 9,794 129,497 $ $ 410 526 619 619 464 155 248 155 217 310 310 4,033 $ $ 13,410 17,526 20,619 20,619 15,464 5,155 8,248 5,155 7,119 10,111 10,104 133,530 Stated Maturity Date 6/30/2033 6/26/2033 6/17/2034 6/17/2034 3/17/2035 10/18/2034 10/18/2034 6/30/2035 6/17/2034 6/15/2036 3/22/2037 Optional Redemption Date 6/30/2008 6/26/2008 6/17/2009 6/17/2009 3/17/2010 10/18/2009 10/18/2009 6/30/2015 6/17/2014 6/15/2016 3/15/2017 (1) (2) (3) (4) (5) (6) (7) (8) (9) Variabla e rate based on the three-month LIBOR plus 3.15% with a current rate of 7.88% through March 30, 2023, adjustabla e quartrr erly. Variabla e rate based on the three-month LIBOR plus 3.10% with a current rate of 7.82% through March 26, 2023, adjustabla e quartrr erly. Variabla e rate based on the three-month LIBOR plus 2.65 % with a current rate of 7.39% through March 17, 2023, adjustabla e quarterly. Variabla e rate based on the three-month LIBOR plus 1.77% with a current rate of 6.51% through March 17, 2023, adjustabla e quartrr erly. Variabla e rate based on the three-month LIBOR plus 2.40% with a current rate of 6.59% through Januaryrr 18, 2023, adjustabla e quarterly. Variabla e rate based on the three-month LIBOR plus 2.30% with a current rate of 6.49% through Januaryrr 18, 2023, adjustabla e quarterly. Variabla e rate based on the three-month LIBOR plus 1.60% with a current rate of 6.33% through March 30, 2023, adjustabla e quartrr erly. Variabla e rate based on the three-month LIBOR plus 1.70% with a current rate of 6.47% through March 15, 2023, adjustabla e quartrr erly. Variabla e rate based on the three-month LIBOR plus 1.60% with a current rate of 6.37% through March 15, 2023, adjustabla e quartrr erly. 106 NOTE 11. DERIVATIVES AND HEDGING ACTIVITIES Risk Management Objective of Using Derivatives Wesbanco is exposed to certain risks arising frff om both its business operations and economic conditions. Wesbanco principally manages its exposures to a wide variety of business and operational risks through management of its core business activities. Wesbanco manages economic risks, including interest rate, liquidity and credit risk, primarily by managing the amount, sources and duration of its assets and liabia lities. Wesbanco’s existing interest rate derivatives result frff om a service provided to certain qualifyiff ng customers and, thereforff e, are not used to manage interest rate risk in Wesbanco’s assets or liabia lities. Wesbanco manages a matched book with respect to its derivative instrumrr ents in order to minimize its net risk exposure resulting frff om such transactions. A matched book is when the Bank’s assets and liaba ilities are equally distributed but also have similar maturt ities. Loan Swaps Wesbanco executes interest rate swapsa and interest rate capsa with commercial banking customers to faff cilitate their respective risk and capsa management strategies. Those interest rate swapsa that Wesbanco executes with a third party, such that Wesbanco minimizes its net risk exposure resulting frff om such transactions. As the interest associated with this program do not meet the hedge accounting requirements of ASC 815, changes in the faff ir value of both rate swapsa and capsa the customer swapsa are recognized directly in earnings. As of December 31, 2022 and and capsa and capsa with an aggregate notional amount of $936.8 million and $730.6 2021, Wesbanco had 159 and 135, respectively, interest rate swapsa the related swapa million, respectively, related to this program. Wesbanco recognized $4.4 million, $4.5 million and $8.1 million of income forff and capa feff es forff are simultaneously economically hedged by offff sff etting interest rate swapsa the years ended December 31, 2022, 2021 and 2020, respectively. and the offff sff etting third-party swapsa and capsa and capsa Risk participation agreements are entered into as fiff nancial guarantees of perforff mance on interest rate swapa derivatives. The purchased asset or sold liabia lity allows Wesbanco to participate-in (feff e received) or participate-out (feff e paid) the risk associated with certain derivative positions executed by the borrower of the lead bank in a loan syndication. As of December 31, 2022 and 2021, Wesbanco had 16 and 13, respectively, risk participation-in agreements with an aggregate notional amount of $187.8 million and $128.2 million, respectively. As of December 31, 2022 and 2021, Wesbanco had one risk participation-out agreement with an aggregate notional amount of $9.6 million and $9.8 million, respectively. Mortgage Loans Held forff Sale and Interest Rate Lock Commitments Certain residential mortgage loans are originated forff loans with similar characteristics. Wesbanco sells loans to the secondaryr market on either a mandatoryrr or best effff orff sale in the secondaryrr mortgage loan market. These loans are classififf ed as held foff r sale and carried at faff ir value as Wesbanco has elected the faff ir value option. Fair value is determined based on rates obtained frff om the secondaryrr trr s basis. The loans market forff sold on a mandatoryrr basis are not committed to an investor until the loan is closed with the borrower. Wesbanco enters into forff wrr ard to be announced (“TBA”) contracts to manage the interest rate risk between the lock commitment and the closing of the loan. The total balance of forff ward TBA contracts entered into was $14.5 million and $48.5 million at December 31, 2022 and December 31, 2021, respectively. The loans ts basis are committed to an investor simultaneous to the interest rate commitment with the borrower, and as a result, the sold on a best effff orff a Company does not enter into a separate forff ward TBA contract to offff sff et the faff ir value risk, as the investor accepts such risk in exchange forff lower premium on sale. Fair Values of Derivative Instruments on the Balance Sheet All derivatives are carried on the consolidated balance sheet at faff ir value. Derivative assets are classififf ed in the consolidated balance sheet under other assets, and derivative liabia lities are classififf ed in the consolidated balance sheet under other liabia lities. Changes in faff ir value are recognized in earnings. None of Wesbanco’s derivatives are designated in qualifyiff ng hedging relationships under ASC 815. 107 The taba le below presents the faff ir value of Wesbanco’s derivative fiff nancial instrurr ments as well as their classififf cation on the Balance Sheet as of December 31, 2022 and 2021: December 31, 2022 December 31, 2021 Notional or Contractual Amount Asset Derivatives Liability Derivatives Notional or Contractual Amount Asset Derivatives Liability Derivatives and capsa .................................... $ 936,834 $ 75,840 $ 74,683 $ 730,552 $ 24,867 $ 26,388 thtt ousandsdd )s (i(( nii Derivatives Loan Swapsa : Interest rate swapsa Other contracts: Interest rate lock commitments............................... Forward TBA contracts .......................................... Total derivatives ......................................................... 10,071 14,500 — 53 75,893 $ 43 — 74,726 $ 28,994 48,500 9 — 24,876 $ — 21 26,409 $ Effff eff ct of Derivative Instruments on the Income Statement The tabla e below presents the change in the faff ir value of the Company’s derivative fiff nancial instrumrr ents reflff ected within the othet r non- interest income line item of the consolidated income statement forff the years ended December 31, 2022, 2021 and 2020, respectively. thtt ousandsdd )s (i(( nii Interest rate swapsa Interest rate lock commitments....................................... Mortgage banking income Forward TBA contracts .................................................. Mortgage banking income Total ................................................................................ ............................................ Other income Location of Gain/(Loss) and capsa For the Years Ended December 31, 2021 2020 2022 $ $ 2,679 (52) 3,211 5,838 $ $ 1,977 (693) 2,796 4,080 $ $ (1,966) 658 (7,442) (8,750) Credit Risk Related Contingent Features Wesbanco has agreements with its derivative counterprr arties that contain a provision where if Wesbanco defaff ults on any of its indebtedness, including defaff ult where repayment of the indebtedness has not been accelerated by the lender, then Wesbanco could also be declared in defaff ult on its derivative obligations. Wesbanco also has agreements with certain of its derivative counterparr as either a “well-" or “adequately-capia talized” institutt statust would be required to settle its obligations under the agreements. ion, then the counterparr rties that contain a provision where if Wesbanco faff ils to maintain its rty could terminate the derivative positions and Wesbanco rties. Dependent upon the net present value of the underlying swapsa , Wesbanco has minimum collateral posting thresholds with certain of its derivative counterparr If Wesbanco had breached any of these provisions at December 31, 2022, it could have been required to settle its obligations under the agreements at the termination value and would have been required to pay any additional amounts due in excess of amounts previously posted as collateral with the respective counterparr tions, Wesbanco can also request collateral frff om the rties. Due to the current rise in interest rates, as of December 31, 2022, Wesbanco is holding collateral frff om various derivative counterparr rties with a market value of $42.7 million. derivative counterparr In certain market situat rty. 108 NOTE 12. EMPLOYEE BENEFIT PLANS Defiff ned Benefiff t Pension Plan— The Wesbanco, Inc. Defiff ned Benefiff t Pension Plan (“the Plan”) establa ished on Januaryrr 1, 1985, is a non- contributory,r defiff ned benefiff t pension plan. The Plan covers all employees of Wesbanco and its subsidiaries who were hired on or befoff re August 1, 2007 who satisfyff minimum age and length of service requirements. Benefiff ts of the Plan are generally based on years of service and the benefiff ts attributed to employee’s compensation during the last fiff ve years of employment. Contributions are intended to provide not only forff the Plan. those expected to be earned in the futff urt e. Wesbanco uses a December 31 measurement date forff service to date, but also forff The benefiff t obligations and funde ff d statut s of the Plan are as folff lows: December 31, $ $ $ $ $ $ $ $ $ 2022 120,241 163,919 2,190 4,114 (36,981) (6,115) 127,127 202,783 (29,762) — (6,115) 166,906 39,779 39,779 (159) 6,548 6,389 5.23% 3.84% 6.82% 2021 152,232 168,433 2,500 3,416 (4,688) (5,742) 163,919 185,716 22,809 — (5,742) 202,783 38,864 38,864 (193) 2,700 2,507 3.03% 3.62% 5.74% lll arll srr inii thtt ousands)s (dol (( Accumulated benefiff t obligation at end of year .............................................................................. $ Change in projected benefiff t obligation: Projected benefiff t obligation at beginning of year .................................................................. $ Service cost ............................................................................................................................ Interest cost ............................................................................................................................ Actuat rial (gain) loss ............................................................................................................... Benefiff ts paid .......................................................................................................................... Projected benefiff t obligation at end of year ............................................................................ $ Change in faff ir value of plan assets: Fair value of plan assets at beginning of year........................................................................ $ Actuat l returt n on plan assets ................................................................................................... Employer contribution ........................................................................................................... Benefiff ts paid .......................................................................................................................... Fair value of plan assets at end of year .................................................................................. $ Amounts recognized in the statement of fiff nancial position: Funded statust Net amounts recognized as receivabla e pension costs in the ......................................................................................................................... $ consolidated balance sheets ................................................................................................ $ Amounts recognized in accumulated other comprehensive income consist of:ff Unrecognized prior service credit .......................................................................................... $ Unrecognized net loss ............................................................................................................ Net amounts recognized in accumulated other comprehensive income (beforff e tax) ............................................................................................................. $ Weighted average assumptions used to determine benefiff t obligations: Discount rate .......................................................................................................................... Rate of compensation increase............................................................................................... Expected long-term returt n on assets ...................................................................................... 109 The components of and weighted-average assumptions used to determine net periodic benefiff t costs are as folff lows: lll arll srr inii (dol (( Components of net periodic benefiff t cost: thtt ousands)s tt nefiff ts earned during year .......................................................... $ Service cost—be Interest cost on projected benefiff t obligation........................................................ Expected returt n on plan assets............................................................................. Amortization of prior service credit .................................................................... Amortization of net loss ...................................................................................... Net periodic pension income ................................................................................... $ Other changes in plan assets and benefiff t obligations recognized in other period..................................................................................... $ comprehensive income: Net loss (gain) forff Prior service credit............................................................................................... Amortization of prior service credit .................................................................... Amortization of net loss ...................................................................................... Total recognized in other comprehensive loss (income) ......................................... $ Total recognized in net periodic pension cost and other comprehensive income .................................................................................................................. $ Weighted-average assumptions used to determine net periodic pension cost: Discount rate........................................................................................................ Rate of compensation increase ............................................................................ Expected long-term returt n on assets.................................................................... 2022 For the Years Ended December 31, 2021 2020 $ $ $ $ $ 2,190 4,114 (11,572) (34) 506 (4,796) 4,353 — 34 (505) 3,882 (914) 3.03% 3.62% 5.74% 2,500 3,416 (11,207) (34) 2,736 (2,589) (16,290) — 34 (2,736) (18,992) (21,581) $ $ $ $ $ 2,283 4,507 (10,433) (34) 3,192 (485) 432 (313) 34 (3,192) (3,039) (3,524) 2.74% 3.30% 6.11% 3.38% 3.53% 6.30% As permitted under ASC 715-30-35-13, the amortization of any prior service cost is determined using a straight-line amortization of the cost over the average remaining service period of employees expected to receive benefiff ts under the Plan. The expected long-term rate of returt n forff based on the median of the target allocation forff the Plan’s total assets is based on the expected returt n of each of the Plan asset categories, weighted each class. lowed by the Trusrr Pension Plan Investment Policy and Strategy— The investment policy as establa ished by the Pension and Post-Retirement Plan t and Investment Services department, is to invest assets based on the target Committee, to be folff allocations shown in the tabla e below. Assets are reallocated periodically by the Trusrr th by the Committee to meet the target allocations. The investment policy is also subject to review periodically to determine if the policy should be changed. Plan assets are to be invested with the principal objective of maximizing long-term total returt n without exposing Plan assets to undue risk, taking into account the Plan’s fuff nding needs and benefiff t obligations. Assets are to be invested in a balanced portfoff lio composed primarily of equities, fiff xed income, alternative asset funds and cash or cash equivalent money market investments. tee based on the ranges set forff tee, which is Wesbanco’s Trusrr ff a a cs of the Plan, a more risk averse investment appr volatility. Thus, modififf cations were made to the returt n seeking portfolff In 2021, the Committee adopted certain changes to the investment policy forff oved the development of a glide path that adjusts the target allocations as the Plan’s funde the Defiff ned Benefiff t Pension Plan that recognizes over time the returt n requirements and risk tolerance of the plan will change. Based on an assessment of the long-term goals and desired risk levels, the changes. Given the United Committee appr opriate to reduce the fuff nded States pension regulations and demographi statust io as detailed in the plan. The eciation with returt ns that, over the long revised Plan notes that returt n seeking assets generally consist of investments that focff us on price appr term, are above the same. Additionally, the investment policy statement was changed to note that liabia lity hedging assets will be investment grade fiff xed income investments and are expected to generally behave like the Plan’s liabia lities. Since these assets focff us mainly on current income, their expected long-term returt ns will generally be lower than returt n seeking assets. The policy provides that based on the hedge path, the mix of short term, ity intermediate term, and long term fiff xed income holdings will vary.r As a result, there will not be set target allocations and range category,rr but rather to the hedge path target. Changes to the Plan’s holdings, as noted in the chart below, reflff ect the changes implemented pursuant to the change in the investment policy statement. At December 31, 2022 and 2021, the Plan’s equity securities included 55,300 shares of Wesbanco common stock with a faff ir market value of $2.0 million and $1.9 million, respectively. the interest costs of the Plan. Thus, the policy set target allocations to returt n seeking assets and rebalanced the ranges forff d statust a oach is deemed appr io and the liabia lity hedging portfolff each maturt s forff aa a a a ff 110 The folff lowing tabla e sets forff th the Plan’s weighted-average asset allocations by asset category:r Asset Category: Equity securities ....................................................................................................... Debt securities.......................................................................................................... Cash and cash equivalents........................................................................................ Total ......................................................................................................................... Target Allocation 2022 forff 55-75% 25-55% 0-5% December 31, 2022 2021 50% 48% 2% 100% 55% 43% 2% 100% The faff ir values of Wesbanco’s pension plan assets at December 31, 2022 and 2021, by asset categoryrr are as folff lows: thtt ousandsdd )s (i(( nii Defiff ned benefiff t pension plan assets: Registered investment companies.................................................... $ Equity securities............................................................................... Corpor ate debt securities.................................................................. rr Municipal obligations ...................................................................... Residential mortgage-backed securities and collateralized mortgage obligations of government sponsored entities and agencies .................................................................................. Total defiff ned benefiff t pension plan assets (1)....................................... $ December 31, 2022 Fair Value Measurements Using: Signififf cant Other Observable Inputs (Level 2) Quoted Prices in Active Markets foff r Identical Assets (Level 1) Signififf cant Unobservable Inputs (Level 3) Assets at Fair Value $ 42,622 52,914 58,342 1,764 $ 42,622 52,914 — — — $ — 58,342 1,764 10,102 165,744 $ — 95,536 $ 10,102 70,208 $ — — — — — — (1) The defiff ned benefiff t pension plan statement of net assets also includes cash, accruerr d interest and dividends, and due to/frff om brokers resulting in net assets availabla e forff benefiff ts of $166.9 million. thtt ousandsdd )s (i(( nii Defiff ned benefiff t pension plan assets: Registered investment companies .................................................... $ Equity securities ............................................................................... Corpor ate debt securities.................................................................. rr Municipal obligations....................................................................... Residential mortgage-backed securities and collateralized mortgage obligations of government sponsored entities and agencies .................................................................................. Total defiff ned benefiff t pension plan assets (1) ....................................... $ December 31, 2021 Fair Value Measurements Using: Signififf cant Other Observable Inputs (Level 2) Quoted Prices in Active Markets foff r Identical Assets (Level 1) Signififf cant Unobservable Inputs (Level 3) Assets at Fair Value $ 54,737 74,445 57,404 2,124 $ 54,737 74,445 — — — $ — 57,404 2,124 14,073 202,783 $ — 129,182 $ 14,073 73,601 $ — — — — — — (1) The defiff ned benefiff t pension plan statement of net assets also includes cash, accruerr d interest and dividends, and due to/frff om brokers resulting in net assets availabla e forff benefiff ts of $204.8 million. Regie sii tered investmt ent compani m es and equitytt securities: Valued at the closing price reported on the active market on which the individual securities are traded. 111 rr CorCC por ate debt securities, municipal ored entities and agencyc securities: Valued at faff ir value based on models that consider criteria such as dealer quotes, availabla e trade data, issuer creditworthiness, market movements, sector news, and bond and swapa yield curves. ions, and U.S.UU government spons i obligat s i Cash Flows— Wesbanco has no required minimum contribution to the Plan forff 2023 and as of December 31, 2022 does not expect to make a voluntaryrr contribution in 2023. Wesbanco did not make a contribution to the Plan in 2020, 2021 or 2022. The folff lowing tabla e presents estimated benefiff ts to be paid in each of the next fiff ve years and in aggregate forff all years thereaftff er (in thousands): Year 2023 ................................................................................................................................................................................ 2024 ................................................................................................................................................................................ 2025 ................................................................................................................................................................................ 2026 ................................................................................................................................................................................ 2027 ................................................................................................................................................................................ 2028 and thereaftff er ......................................................................................................................................................... Total................................................................................................................................................................................ $ $ Amount 7,244 7,190 7,556 7,856 8,153 265,360 303,359 FFKT Postretirement Medical Benefiff t Plan— Wesbanco assumed FFKT’s postretirement medical benefiff t plan upon acquisition, which had a liabia lity totaling $15.0 million at the acquisition date. The plan covers FFKT employees who were hired beforff e Januaryrr 1, 2016 and meet certain age and length of fulff l-time service requirements. The plan was modififf ed in August 2018, which reduced the number of eligible employees. The modififf cation resulted in a $5.5 million unrealized gain, which was recorded in accumulated other comprehensive income, net of tax, and d, a will be recognized over the lifeff of the plan participants estimated to be appr and payments to the plan participants are made by Wesbanco. oximately 17 years. Benefiff ts provided under this plan are unfunde ff The benefiff t obligation and funde ff d statust of the plan are as folff lows: December 31, 2022 2021 $ $ $ $ $ $ 11,245 266 (3,881) 320 (831) 7,119 7,119 7,119 (3,676) (2,343) (6,019) 5.20% NA NA 12,695 230 (1,096) 342 (926) 11,245 (11,245) (11,245) 249 (2,568) (2,319) 2.96% NA NA lll arll srr inii (dol (( Change in projected benefiff t obligation: thtt ousands)s Projected benefiff t obligation ...................................................................................................... $ Interest cost ............................................................................................................................... Actuat rial gain ............................................................................................................................ Participant contributions ........................................................................................................... Benefiff ts paid.............................................................................................................................. Projected benefiff t obligation at end of year................................................................................ $ Amounts recognized in the statement of fiff nancial position: Funded statust ............................................................................................................................. $ Net amounts recognized as receivabla e pension costs in the consolidated balance sheets......... $ Amounts recognized in accumulated other comprehensive income consist of:ff Unrecognized net (gain) loss..................................................................................................... $ Prior service cost ....................................................................................................................... Net amounts recognized in accumulated other comprehensive income (beforff e tax)................ $ Weighted average assumptions used to determine benefiff t obligations: Discount rate ............................................................................................................................. Rate of compensation increase.................................................................................................. Expected long-term returt n on assets ......................................................................................... 112 The components of and weighted-average assumptions used to determine net periodic benefiff t costs are as folff lows: lll arll srr inii (dol (( Components of net periodic benefiff t cost: thtt ousands)s Interest cost on projected benefiff t obligation ............................................................................. $ Amortization of prior service credit .......................................................................................... Amortization of net loss ............................................................................................................ Net periodic pension cost .............................................................................................................. $ Other changes in plan benefiff t obligations recognized in other comprehensive income: period ...................................................................................................... $ Prior service cost forff Net gain forff the period .............................................................................................................. Amortization of prior service credit .......................................................................................... Amortization of net loss ............................................................................................................ Total recognized in other comprehensive income......................................................................... $ Total recognized in net periodic pension cost and other comprehensive income ......................... $ Weighted-average assumptions used to determine net periodic pension cost: Discount rate ............................................................................................................................. Rate of compensation increase.................................................................................................. Expected long-term returt n on assets ......................................................................................... For the Years Ended December 31, 2021 2022 266 (224) 43 85 $ $ — $ (3,881) 224 (43) (3,700) (3,615) $ $ 5.10% NA NA 230 (224) 43 49 — (1,097) 224 (43) (916) (867) 2.40% NA NA The folff lowing tabla e presents estimated benefiff ts to be paid in each of the next fiff ve years and in aggregate forff all years thereaftff er (i(( n thousands)s : Year 2023 ................................................................................................................................................................................ 2024 ................................................................................................................................................................................ 2025 ................................................................................................................................................................................ 2026 ................................................................................................................................................................................ 2027 ................................................................................................................................................................................ 2028 and thereaftff er ......................................................................................................................................................... Total................................................................................................................................................................................ $ $ Amount 684 668 603 588 536 10,138 13,217 Employee Stock Ownership and 401(k) Plan (“KSOP”) — Wesbanco sponsors a KSOP plan consisting of a non-contributoryr leveraged ESOP and a contributoryrr 401(k) profiff t sharing plan covering substantially all of its employees. Under the provisions of the 401(k) plan, Wesbanco oved by the Board of Directors. For each of the past matches a portion of eligible employee contributions based on rates establa ished and appr three years, Wesbanco matched 100% of the fiff rst 3% and 50% of the next 2% of eligible employee contributions. No ESOP contribution has been made forff the KSOP was $5.5 million, $5.3 million and $5.3 million in 2022, 2021 and 2020, respectively. any of the past three years. Total expense forff a As of December 31, 2022, the KSOP held 443,848 shares of Wesbanco common stock of which all shares were allocated to specififf c employee accounts. Dividends on shares are either distributed to employee accounts or paid in cash to the participant. Wesbanco had 165,438 and 207,199 shares registered on Form S-8 remaining forff futff urt e issuance under the KSOP plan at December 31, 2022 and 2021, respectively. Incentive Bonus, Option and Restricted Stock Plan— The Incentive Bonus, Option and Restricted Stock Plan (the “Incentive Plan”), is a non-qualififf ed plan that includes the foff llowing components: an Annual Bonus and a Long-Term Incentive, which included a Total Shareholder Returt n Plan, a Stock Option component, and a Restricted Stock component forff certain key offff iff cers of the Company. The components allow foff r payments of cash, a mixturt e of cash and stock, granting of stock options, or granting of restricted stock, depending upon the component of the Incentive Plan in which the award is earned, through the attainment of certain perforff mance goals or time-based vesting requirements. Perforff mance goals or service vesting requirements are establa ished by Wesbanco’s Compensation Committee. On April 22, 2021, Wesbanco registered an additional 2,000,000 shares of Wesbanco common stock forff issuance under the Incentive Plan. Wesbanco had 1,468,140 and 1,788,174 shares registered on Form S-8 remaining forff fuff turt e issuance under equity compensation plans at December 31, 2022 and 2021, respectively. Annual Bonus Compensation expense forff key offff iff cers forff the Annual Bonus was $4.4 million, $3.5 million and $1.7 million forff 2022, 2021 and 2020, respectively. 113 Stock OptO ions On May 18, 2022, Wesbanco granted 146,900 stock options to selected participants, including certain named executive offff iff cers at an exercise price of $32.30 per share. The options granted in 2022 are service-based and vest in two equal installments on May 18, 2023 and December 31, 2023, and expire seven years frff om the date of grant. Compensation expense forff 2022, 2021 and 2020, respectively. At December 31, 2022, the total unrecognized compensation expense related to non-vested stock option grants totaled $0.5 million, with an expense recognition period of one year remaining. The maximum term of options granted under Wesbanco’s stock option plan is ten years frff om the original grant date; however, options granted in 2022 had a term of seven years. the stock option component of the Incentive Plan was $1.1 million, $0.8 million and $0.6 million forff The total intrinsic value of options exercised was $1.0 million foff r the years ended December 31, 2022 and 2021, respectively. The cash received and related tax benefiff t realized frff om stock options exercised was $3.0 million and $0.3 million in 2022 and was $2.4 million and $0.2 million in 2021. Shares issued in connection with options exercised are issued frff om treasuryrr shares acquired under Wesbanco’s share repurchase plans or frff om issuance of authorized but unissued shares, subject to prior SEC registration. The faff ir value of stock options granted is estimated at the date of grant using the Black-Scholes option-pricing model. This model requires the input of highly subjective assumptions, changes to which can materially affff eff ct the faff ir value estimate. Additionally, there may be other faff ctors that might otherwise have a signififf cant effff eff ct on the value of stock options granted that are not considered by the model. The folff lowing tabla e sets forff th the signififf cant assumptions used in calculating the faff ir value of the grants: Weighted-average lifeff .............................................................................................. Risk-frff ee interest rate............................................................................................... Dividend yield ......................................................................................................... Volatility faff ctor........................................................................................................ Fair value of the grants ............................................................................................ $ For the Years Ended December 31, 2021 2022 5.1 years 2.89% 4.15% 32.28% 6.91 $ 5.2 years 0.87% 3.32% 31.81% 7.75 $ 2020 5.7 years 0.41% 5.94% 28.38% 2.54 The weighted-average lifeff assumption is an estimate of the length of time that an employee might hold an option beforff e option exercise, option expiration or employment termination. The weighted-average lifeff assumption was developed using historical experience. Wesbanco used a weighted historical volatility of its common stock price over the weighted average lifeff prior to each issuance as the volatility faff ctor assumption, adjusted forff mal volatility during certain periods, and current and futff urt e dividend payment expectations forff the dividend assumption. a abnor The folff lowing tabla e shows the activity foff r the Stock Option component of the Incentive Plan: Outstanding at beginning of the year ............................................................................................... Granted during the year ................................................................................................................... Exercised during the year................................................................................................................. Forfeff ited or expired during the year ................................................................................................ Outstanding at end of the year ......................................................................................................... Exercisabla e at year end .................................................................................................................... For the Year Ended December 31, 2022 Number of Options 772,651 146,900 (111,050) (27,031) 781,470 637,670 $ $ $ Weighted Average Exercise Price Per Share 34.70 32.30 27.46 32.37 36.12 36.98 The aggregate intrinsic value of the outstanding shares and the shares exercisabla e at year-end was $2.3 million and $1.6 million, respectively. 114 The folff lowing tabla e shows the average remaining lifeff of the stock options at December 31, 2022: Exercisable at Year End 2,824 4,705 9,725 36,405 96,325 160,186 114,000 73,800 139,700 — 637,670 Exercise Price Range Per Share 15.35 21.37 18.33 to 20.18 22.63 to 32.37 38.88 36.97 to 45.65 38.93 21.55 38.78 — $15.35 to $45.65 Options Outstanding Weighted Average Exercise Price Weighted Avg. Remaining Contractual in Years Lifeff 2,824 4,705 9,725 36,405 96,325 160,186 114,000 73,800 139,700 143,800 781,470 $ $ 15.35 21.37 19.82 31.11 38.88 43.21 38.93 21.55 38.78 32.30 36.12 0.16 1.16 2.62 0.75 1.35 3.23 3.37 4.40 5.39 6.38 3.95 Year Issued 2013 ................................................... 2014 ................................................... 2015 ................................................... 2016 ................................................... 2017 ................................................... 2018 ................................................... 2019 ................................................... 2020 ................................................... 2021 ................................................... 2022 ................................................... Total ................................................... Restricted Stock During 2022, Wesbanco granted 176,703 shares of service-based restricted stock to certain offff iff cers and directors, which cliffff vest 36 months frff om the date of grant. The weighted average faff ir value of the restricted stock granted was $32.33 per share. The restricted stock grant provides the recipient with voting rights frff om the date of issuance. Dividends paid on these restricted shares during the restriction period are converted into additional shares of restricted stock on the date the cash dividend would have otherwise been paid, but do not vest until the related grant of the restricted shares complete their vesting. The Compensation Committee has discretion to elect to pay such dividends in cash to participants. Voting rights accruerr frff om date of issuance of these shares. Wesbanco also granted 24,444 shares of perforff mance-based restricted stock ("PBRS") to select offff iff cers. These shares have a three-year perforff mance period, beginning Januaryr 1, 2023, based on Wesbanco’s returt n on average assets and returt n on average tangible common equity measured forff oximately $11.6 billion and $29.0 billion. Earned perforff mance-based restricted shares are subject to additional service-based vesting with 50% vesting on May 18, 2026 aftff er the completion of the three-year perforff mance period and the fiff nal 50% vesting on May 18, 2027. each year, compared to a national peer group of fiff nancial institutt ions with total assets between appr a For the 2018, 2019 and 2020 PBRS, the third, second and fiff rst year reporting periods, respectively, achieved 100% of the perforff mrr ance goal measured at December 31, 2021. The Compensation Committee apa proved these goal achievements in May of 2022, and Wesbanco issued 2,694 time-based restricted shares to the select offff iff cers of the 2018 grant, of which 1,347 shares vested on May 16, 2022 and the remaining 1,347 shares will vest on May 16, 2023. For the 2019 PBRS awards, Wesbanco issued 5,352 shares to the select offff iff cers of which 2,676 will vest on May 15, 2023 and 2,676 on May 15, 2024. For the 2020 PBRS awards, Wesbanco issued 10,100 shares of time based restricted shares to the select offff iff cers of which 5,050 will vest on May 27, 2024 and the remaining 5,050 will vest on May 27, 2025. On Februarr ryrr 25, 2021, the Incentive Plan was amended to adjust the perforff mance goal to 75% and appr ove a pro-rata award based on the achievement between 75% through 99%, as the award will be prorated to the percentage achieved. a Dividends accruerr on the restricted shares once the perforff mance objective is achieved and then are converted into additional shares of restricted stock on the date the cash dividend would have otherwise been paid, but do not vest until the related grant of the restricted shares complete their vesting. Voting rights accruerr upon achievement of the perforff mance objective. Compensation expense relating to all restricted stock was $5.0 million, $5.6 million and $4.6 million in 2022, 2021 and 2020, respectively. As of December 31, 2022, the total unrecognized compensation expense related to non-vested restricted stock grants totaled $8.4 million, with a weighted average expense recognition period of 1.3 years remaining. 115 The folff lowing tabla e shows the activity foff r the Restricted Stock component of the Incentive Plan: For the Year Ended December 31, 2022 Non-vested at Januaryrr 1, 2022......................................................................................................... Granted during the year ................................................................................................................... Vested during the year ..................................................................................................................... Forfeff ited or expired during the year ................................................................................................ Dividend reinvestment ..................................................................................................................... Non-vested at end of the year .......................................................................................................... Restricted Stock 504,868 201,147 (127,532) (900) 19,197 596,780 $ $ Weighted Average Grant Date Fair Value Per Share 29.42 32.33 38.12 34.04 33.83 28.67 TotTT al Shareholdel r Return Plan On November 18, 2015, Wesbanco’s Compensation Committee adopted Administrative RulRR es forff a Total Shareholder Returt n Plan (“TSRP”). The TSRP measures the TSR on Wesbanco common stock over a three-year measurement period relative to the returt n of an establa ished peer group of publicly traded companies over the same perforff mance period. The award is determined at the end of the three-year period if the TSR of Wesbanco common stock is equal to or greater than the 50th percentile of the TSR of the peer groupu . The number of shares to be earnrr ed by the participant shall be 200% of the grant-date award if the TSR of Wesbanco common stock is equal to or greater than the 75th percentile of the TSR of the peer group. Upon achieving the market-based metric, shares determined to be earned by the participant become servirr ce-based and vest in three equal annual installments. Voting rights accruerr at such time as well. Wesbanco granted 12,000 TSRP shares in 2022 foff r the perforff mance period beginning Januaryr 1, 2022 and ending December 31, 2024 to certain executive offff iff cers. The faff ir value of the market-based awards is based on a Monte-Carlo Simulation valuation of our common stock and our peers’ common stock as of the grant date. Based on the calculation of shareholder returt n over the measurement period beginning Januaryrr 1, 2020 and ending December 31, 2022, Wesbanco stock perforff mance measured at the 55th percentile when compared to peer calculations of shareholder returt n, which exceeds the target oximately 14,640 shares relating to the 2020 TSR grant will be issued as service- of the 50th percentile. Thereforff e, in the fiff rst quarter of 2023, appr based shares since the share awards are based on the pro-rata between the 50th percentile and the 75th percentile. These shares will vest in three installments of 4,880 shares in 2023, 2024 and 2025. a Compensation expense relating to the TSR plans was $0.2 million, $0.4 million and $0.4 million in 2022, 2021 and 2020, respectively. The grant date faff ir value of the 2022 TSR award was $36.51 per share. At December 31, 2022, the total unrecognized compensation expense related to non-vested TSR awards totaled $0.5 million with a weighted average expense recognition period of 2.1 years remaining. 116 NOTE 13. REVENUE RECOGNITION Interest income, net securities gains (losses) and bank-owned lifeff insurance are not in scope of ASC 606, Revenue frff om ContCC ractstt with CusCC tomersrr . For the revenue streams in scope of ASC 606 - trusrr t feff es, service charges on deposits, net securities brokerage revenue, debit card sponsorship income, payment processing feff es, electronic banking feff es, mortgage banking income and net gain or loss on sale of other real estate owned and other assets– there are no signififf cant judgements related to the amount and timing of revenue recognition. The folff lowing tabla e summarizes the point of revenue recognition and the income recognized forff each of the revenue streams: thtt ousandsdd )s (i(( nii Revenue Streams Trurr st feff es Trusrr t account feff es................................................. WesMark feff es ....................................................... t feff es .......................................................... Total trusrr Service charges on deposits Point of Revenue Recognition For the Years Ended December 31, 2022 2021 2020 Over time Over time $ 19,134 $ 8,417 27,551 19,717 $ 9,794 29,511 Commercial banking feff es ..................................... Personal service charges....................................... At a point in time and over time Over time Total service charges on deposits ............................. Net securities brokerage revenue Annuity commissions ........................................... Equity and debt security trades............................. Managed money ................................................... Trail commissions ................................................ Total net securities brokerage revenue ..................... At a point in time At a point in time Over time Over time Debit card sponsorship income (1)........................... At a point in time and over time Payment processing feff es (1) ..................................... At a point in time and over time Electronic banking feff es ............................................ Mortgage banking income ........................................ Net gain on other real estate owned and other assets (2) ................................................................... At a point in time At a point in time At a point in time 2,372 23,909 26,281 7,258 87 1,215 965 9,525 — 3,352 20,002 5,129 482 2,088 20,324 22,412 4,331 242 1,201 1,122 6,896 646 3,100 19,318 19,528 4,816 17,753 8,582 26,335 2,337 19,606 21,943 3,906 349 952 982 6,189 2,792 3,010 17,524 22,736 103 (1) (2) Debit card sponsorship income and payment processing feff es are included in other non-interest income. The portion of this line item relating to the sale and change in the faff ir value of the underlying investments funde and totaled (losses) gains of ($1.0) million, $3.8 million and ($0.1) million forff ff the years ended December 31, 2022, 2021 and 2020, respectively. d by Wesbanco CDC is not within the scope of ASC 606, NOTE 14. OTHER OPERARR TING EXPENSES Other operating expenses consist of miscellaneous taxes, consulting feff es, ATM expenses, postage, supplies, legal feff es, communications, other real estate owned and forff eclosure expenses, and other expenses. Other operating expenses are presented below: thtt ousandsdd )s (i(( nii Franchise and other miscellaneous taxes ....................................................................... $ Consulting, regulatoryrr and advisoryr feff es....................................................................... ATM and electronic banking interchange expenses ...................................................... Postage and courier expenses......................................................................................... Supplies.......................................................................................................................... Legal feff es ....................................................................................................................... Communications ............................................................................................................ Other real estate owned and forff eclosure expenses ........................................................ Other .............................................................................................................................. Total other operating expenses ...................................................................................... $ For the Years Ended December 31, 2021 2020 2022 12,012 $ 13,168 5,903 4,602 3,865 3,165 4,688 789 16,125 64,317 $ 10,459 $ 12,642 8,238 5,151 3,819 3,440 4,157 219 21,936 70,061 $ 14,112 11,717 8,365 5,028 4,561 3,307 4,292 (108) 19,474 70,748 117 NOTE 15. INCOME TAXES On March 27, 2020, the CARES Act was signed into law. The Act provided foff r the opportut nity to carryr back certain feff deral net operating losses up to fiff ve years. Wesbanco’s net operating losses had previously been recorded at the current statutt oryrr rate of 21%. As a result of the CARES Act, Wesbanco recorded an income tax benefiff t of $0.2 million in 2020 in recognition of the rate diffff eff rential between the current statut toryr rate and the rate in effff eff ct forff which year the net operating loss will be carried back. Reconciliation frff om the feff deral statutt oryr income tax rate to the effff eff ctive tax rate is as folff lows: 2022 For the Years Ended December 31, 2021 2020 Federal statutt oryr Net tax-exempt interest income on securities and loans of state and tax rate ..................................................................................... political subdivisions ........................................................................................ State income taxes, net of feff deral tax effff eff ct ........................................................ insurance .................................................................................. Bank-owned lifeff General business credits ...................................................................................... rr t ...................................................................................................... All other—ne Effff eff ctive tax rate.................................................................................................. 21.0% (2.6%) 3.1% (1.0%) (3.0%) 1.2% 18.7% 21.0% % (1.8 ) 2.3% % ) (0.6 % (1.9 ) 0.7% 19.7% 21.0% % (4.2 ) 1.9% % ) % (3.7 ) 2.0% 15.9% (1.1 The provision forff income taxes appl a icabla e to income beforff e taxes consists of the folff lowing: thtt ousandsdd )s (i(( nii Current: 2022 For the Years Ended December 31, 2021 2020 Federal.................................................................................................................... $ State........................................................................................................................ Defeff rred: Federal.................................................................................................................... State........................................................................................................................ Total ........................................................................................................................... $ 31,560 8,239 3,560 929 44,288 $ $ 33,042 7,655 17,679 1,213 59,589 $ $ 27,924 5,629 (8,418) (2,100) 23,035 The folff lowing income tax amounts were recorded in shareholders’ equity as elements of other comprehensive income: (i(( nii thtt ousandsdd )s Securities and defiff ned benefiff t pension plan unrecognized items........................... $ 2022 2021 2020 (82,295) $ (11,322) $ 9,730 118 Defeff rred tax assets and liabia lities consist of the folff lowing: thtt ousandsdd )s credit losses .................................................................................... $ (i(( nii Defeff rred tax assets: Allowance forff Compensation and benefiff ts .................................................................................... Security gains ......................................................................................................... Non-accruarr l interest income .................................................................................. Partnership adjustments ......................................................................................... Net operating loss carryfr orff wards ........................................................................... Fair value adjustments on securities availabla e-forff -sale ......................................... Lease accruarr l.......................................................................................................... Other....................................................................................................................... Gross defeff rred tax assets............................................................................................ Defeff rred tax liabia lities: Depreciation and amortization ............................................................................... Accretion on securities........................................................................................... Defeff rred feff es and costs .......................................................................................... Purchase accounting adjustments........................................................................... Compensation and benefiff ts .................................................................................... Fair value adjustments on securities availabla e-forff -sale ......................................... Partnership adjustments ......................................................................................... Lease - right of use assets ...................................................................................... Other....................................................................................................................... Gross defeff rred tax liabia lities ...................................................................................... Net defeff rred tax assets ............................................................................................... $ 2022 December 31, 2021 2020 28,535 — 1,472 848 338 5,685 83,734 10,410 3,732 134,754 (4,786) (383) (3,289) (9,594) (47) — — (9,391) (763) (28,253) 106,501 $ $ 29,208 1,154 1,565 766 — 6,480 1,484 11,399 4,617 56,673 (3,748) (251) (2,368) (9,996) — — (127) (10,342) (1,144) (27,976) 28,697 $ $ 44,859 6,894 2,113 1,135 — 5,472 — 13,530 5,441 79,444 (3,414) (274) (3,018) (8,669) — (14,865) (555) (12,438) (168) (43,401) 36,043 No valuation allowance was establa ished forff any defeff rred tax assets, since management believes that defeff rred tax assets are likely to be realized through futff urt e reversals of existing taxabla e temporaryr diffff eff rences and futff urt e taxabla e income. As a result of the acquisition of YCB in 2016 and OLBK in 2019, Wesbanco has feff deral net operating loss (“NOL”) carryfrr orff wards of $22.4 million, which expire beginning in 2034 and 2037; respectively. Wesbanco has Marylrr and NOL carryfr orff wards of $4.6 million, which begin expiring in 2029. Wesbanco has Kentuct ky NOL carryfrr orff wards of $23.1 million, which begin expiring in 2028. The use of the feff deral NOL and other carryfrr orff wards are limited by Internal Revenue Code Section 382, but they are currently expected to be utilized beforff e their respective expiration dates. As a result of the previous acquisitions of YCB, ESB Financial Corpor Winton Financial Corpor qualifyiff ng and non-qualifyiff ng tax bad debt reserves existing as of December 31, 1987, upon which no provision forff recorded. The related amount of unrecognized defeff rred tax liabia lity is $10.5 million forff earnings is used in the futff urt e forff Inc., Western Ohio Financial Corprr oration, ation and Oak Hill Financial, Inc., retained earnings at both December 31, 2022 and 2021 included $45.9 million of income taxes has been 2021. If this portion of retained e other than to absa orbr bad debts, it would be added to futff urt e taxabla e income. 2022 and $10.8 million forff ation, Fidelity Bancorp,rr any purpos rr rr rr Federal and state income taxes appl December 31, 2022, 2021 and 2020, respectively. a icabla e to securities transactions totaled ($0.4) million, $0.2 million and $1.0 million forff the years ended Wesbanco had $0.2 million of unrecognized tax benefiff ts and interest as of both December 31, 2022 and 2021, respectively. As of December 31, 2022, $0.2 million of these tax benefiff ts would affff eff ct the effff eff ctive tax rate if recognized. At December 31, 2022 and December 31, 2021, accruerr d interest related to uncertain tax positions was immaterial. Wesbanco provides forff interest and penalties related to uncertain tax positions as part of its provision forff feff deral and state income taxes. Wesbanco is subject to U.S. feff deral income tax as well as to tax in various state income tax jurisdictions. Wesbanco and its prior acquired companies are no longer subject to any income tax examinations forff years prior to 2019. 119 Unrecognized Tax Benefiff ts A reconciliation of the beginning and ending amount of unrecognized tax benefiff ts (excluding interest and the feff deral income tax benefiff t of unrecognized state tax benefiff ts) is as folff lows: thtt ousandsdd )s (i(( nii Balance at beginning of year...................................................................................... $ Additions based on tax positions related to the current year ..................................... Reductions due to the statutt e of limitations ............................................................... Balance at end of year ................................................................................................ $ 2022 For the Years Ended December 31, 2021 2020 226 — (68) 158 $ $ 324 3 (101) 226 $ $ 434 — (110) 324 NOTE 16. FAIR VALUE MEASUREMENT Fair value estimates are based on quoted market prices, if availaba le, quoted market prices of similar assets or liaba ilities, or the present value of expected futff urt e cash flff ows and other valuation techniques. These valuations are signififf cantly affff eff cted by discount rates, cash flff ow assumptions, and risk assumptions used. Therefoff re, faff ir value estimates may not be subu stantiated by comparison to independent markets and are not intended to reflff ect the proceeds that may be realizabla e in an immediate settlement of the instrumrr ents. Fair value is determined at one point in time and is not representative of futff urt e value. These amounts do not reflff ect the total value of a going concern organization. Management does not have the intention to dispose of a signififf cant portion of its assets and liabia lities, and therefoff re the unrealized gains or losses should not be interprrr eted as a forff ecast of futff urt e earnings and cash flff ows. The folff lowing is a discussion of assets and liabia lities measured at faff ir value on a recurring basis and valuation techniques apa plied: InvII estmt ent securities: The faff ir value of investment securities which are measured on a recurring basis are determined primarily by obtaining to quoted prices on nationally recognized securities exchanges or matrix pricing, which is a mathematical technique used widely in the indud stryrr value debt securities without relying exclusively on quoted prices forff the specififf c securities but rather by relying on the securities’ relationship to other similar securities. These securities are classififf ed within level 1 or 2 in the faff ir value hierarchy. Positions that araa e not traded in active markets forff which valuations are generated using assumptions not observabla e in the market or management’s best estimate are classififf ed within level 3 of the faff ir value hierarchy. This includes certain specififf c municipal debt issues forff which the credit quality and discount rate must be estimated. Loans held forff f sale: Loans held forff sale are carried, in aggregate, at faff ir value as Wesbanco previously elected the faff ir value option. The ents are signififf cant observabla e inputs in arriving at the faff ir value and thereforff e use of a valuation model using quoted prices of similar instrumrr loans held forff sale are classififf ed within level 2 of the faff ir value hierarchy. Derivatives: Wesbanco enters into interest rate swapa agreements with qualifyiff ng commercial customers to meet their fiff nancing, interest rate and other risk management needs. These agreements provide the customer the abia lity to convert frff om variabla e to fiff xed interest rates. The credit risk associated with derivatives executed with customers is essentially the same as that involved in extending loans and is subu jb ect to normal credit policies and monitoring. Those interest rate swapsa that Wesbanco executes with are economically hedged by offff sff etting interest rate swapsa rties in order to offff sff et its exposure on the fiff xed components of the customer interest rate swapa agreements. The interest rate derivative counterparr rty is reported at faff ir value in other assets and other liabia lities on the consolidated swapa agreement with the loan customer and with the counterparr balance sheets with any resulting gain or loss recorded in current period earnings within other income. Wesbanco enters into forff ward TBA contracts to manage the interest rate risk between the loan commitments to the customer and the closing of the loan foff r loans that will be sold on a mandatoryr basis to secondaryrr market investors. The foff rward TBA contract is reported at faff ir value in other assets and other liabia lities on the consolidated balance sheets with any resulting gain or loss recorded in current period earnings as mortgage banking income. Wesbanco determines the faff ir value forff the expected cash flff ows of each derivative. This analysis reflff ects contractut al terms of the derivative, including the period to maturt observabla e market-based inputs, including interest rate curves and implied volatilities. Wesbanco incorpor a appr derivatives using widely accepted valuation techniques including discounted cash flff ow analysis on ity, and uses ates credit valuation adjd ustments to rty’s non-perforff mance risk in the faff ir value measurements. opriately reflff ect both its own non-perforff mance risk and the respective counterparr rr We may be required frff om time to time to measure certain assets and liabia lities at faff ir value on a nonrecurring basis in accordancaa e with GAAP. ication of lower of cost or market accounting or write-downs of individual assets and These adjustments to faff ir value usually result frff om the appl liabia lities. a ColCC lateral depee ndent loans: Collateral dependent loans are carried at the amortized cost basis less the specififf c allowance calculated in p accordance with CECL. Collateral dependent loans are calculated using a cost basis or collateral value appr a oach. 120 Other real estate owned and repos sessed assetstt : Other real estate owned and repossessed assets are carried at the lower of the investment aisals and management’s best judgment are in the assets or the faff ir value of the assets less estimated selling costs. The use of independent appr signififf cant inputs in arriving at the faff ir value measure of the underlying collateral. Thereforff e, other real estate owned and repossessed assets are classififf ed within level 3 of the faff ir value hierarchy. p e a The faff ir value amounts presented in the tabla e below are intended to permit reconciliation of the faff ir value hierarchy to the amounts presented at faff ir in the statements of fiff nancial position. The folff value on a recurring and nonrecurring basis by level within the faff ir value hierarchy as of December 31, 2022 and December 31, 2021: th Wesbanco’s fiff nancial assets and liabia lities that were accounted forff lowing tabla es set forff December 31, 2022 Fair Value Measurements Using: Signififf cant Other Observable Inputs (level 2) Signififf cant Unobservable Inputs (level 3) Quoted Prices in Active Markets forff Identical Assets (level 1) December 31, 2022 11,506 $ 11,506 $ — $ — — — — 1,179 — 1,179 — — 1,179 — — 878 1,486 2,364 thtt ousandsdd )s (i(( nii Recurring faiff r value measurements Equity securities .............................................................................. $ Availabla e-forff -sale debt securities: U.S. Government sponsored entities and agencies...................... Residential mortgage-backed securities and collateralized mortgage obligations of government sponsored entities and agencies ................................................................. Commercial mortgage-backed securities and collateralized mortgage obligations of government sponsored entities and agencies.............................................................................. Obligations of state and political subdivisions............................ ate debt securities ............................................................. rr Corpor -sale debt securities............................................ $ Total availabla e-forff sale........................................................................... Loans held forff Other assets—interest rate derivatives agreements ......................... Total assets recurring faff ir value measurements............................... $ Other liabia lities—interest rate derivatives agreements.................... Total liabia lities recurring faff ir value measurements ......................... $ Nonrecurring faiff r value measurements Collateral dependent loans .............................................................. $ Other real estate owned and repossessed assets .............................. Total nonrecurring faff ir value measurements ................................... $ 225,970 1,846,053 349,731 92,228 15,158 2,529,140 8,249 75,840 2,624,735 74,683 74,683 878 1,486 2,364 $ $ $ $ $ — — — — — — $ — — 11,506 — — $ $ — $ — — $ 225,970 1,846,053 349,731 91,049 15,158 2,527,961 8,249 75,840 2,612,050 74,683 74,683 $ $ $ — $ — — $ 121 December 31, 2021 Fair Value Measurements Using: Quoted Prices in Active Markets Identical forff Assets (level 1) Signififf cant Othe r Observable Inputs (level 2) Signififf cant Unobservable Inputs (level 3) December 31, 2021 13,466 $ 13,466 $ — $ thtt ousandsdd )s (i(( nii Recurring faiff r value measurements Equity securities ........................................................................................ $ Availabla e-forff -sale debt securities: U.S. Government sponsored entities and agencies................................ Residential mortgage-backed securities and collateralized mortgage obligations of government sponsored entities and agencies ........................................................................... Commercial mortgage-backed securities and collateralized mortgage obligations of government sponsored entities and agencies ....................................................................................... Obligations of state and political subdivisions...................................... ate debt securities ....................................................................... rr Corpor -sale debt securities...................................................... $ Total availabla e-forff Loans held forff sale .................................................................................... Other assets—interest rate derivatives agreements ................................... Total assets recurring faff ir value measurements ........................................ $ Other liabia lities—interest rate derivatives agreements ............................. Total liabia lities recurring faff ir value measurements ................................... $ Nonrecurring faiff r value measurements Collateral dependent loans ........................................................................ $ Other real estate owned and repossessed assets ........................................ Total nonrecurring faff ir value measurements............................................. $ 236,978 2,285,213 367,493 106,340 17,438 3,013,462 25,277 24,867 3,077,072 26,388 26,388 13,558 — 13,558 $ $ $ $ $ — — — — — — $ — — 13,466 — — $ $ — $ — — $ 236,978 2,285,213 367,493 104,847 17,438 3,011,969 25,277 24,867 3,062,113 26,388 26,388 $ $ $ — $ — — $ 13,558 — 13,558 — — — — 1,493 — 1,493 — — 1,493 — — Wesbanco’s policy is to recognize transfeff rs between levels as of the actuat l date of the event or change in circumstances that caused the transfeff r. There were no signififf cant transfeff rs between levels 1, 2, or 3 forff the years ended December 31, 2022 and 2021. The folff lowing tabla e presents additional quantitative inforff mation about a assets measured at faff ir value on a nonrecurring basis and forff which Wesbanco has utilized level 3 inputs to determine faff ir value: thtt ousandsdd )s (i(( nii December 31, 2022: Collateral dependent loans .............. $ Other real estate owned and Fair Value Estimate Valuation Techniques Unobservable Input Range / Weighted Average Quantitative Inforff mation about Level 3 Fair Value Measurements 878 Appraisal of collateral (1) Appraisal adjustments (2) Liquidation expenses (2) 0.0%/0.0% (8.0%)/(8.0%) repossessed assets......................... 1,486 Appraisal of collateral (1) (3) December 31, 2021: Collateral dependent loans .............. $ 13,558 Appraisal of collateral (1) Other real estate owned and repossessed assets......................... — Appraisal of collateral (1)(3) Appraisal adjustments (2) Liquidation expenses (2) 0.0%/0.0% (8.0%)/(8.0%) (1) Fair value is generally determined through independent appr inputs, which are not identififf abla e. a aisals of the underlying collateral, which generally include various level 3 (2) Appraisals may be adjusted by management forff qualitative faff ctors such as economic conditions and estimated liquidation expenses. The range and weighted average of appr Includes estimated liquidation expenses and numerous dissimilar qualitative adjustments by management which are not identififf aba le. aisal adjustments and liquidation expenses are presented as a percent of the appr aisal. a a (3) 122 The estimated faff ir values of Wesbanco’s fiff nancial instrumrr ents are summarized below: thtt ousandsdd )s (i(( nii Financial Assets Carrying Amount Fair Value Estimate Quoted Prices in Active Markets Fair Value Measurements at December 31, 2022 Signififf cant Other Observable Inputs (level 2) Signififf cant Unobservable Inputs (level 3) forff Identical Assets (level 1) Cash and due frff om banks .......................................... $ Equity securities........................................................ Availabla e-forff -sale debt securities.............................. ity debt securities................................ Held-to-maturt Net loans ................................................................... Loans held forff sale .................................................... Other assets—interest rate derivatives...................... Accruerr d interest receivabla e....................................... 408,411 11,506 2,529,140 1,248,409 10,584,938 8,249 75,840 68,522 $ 408,411 11,506 2,529,140 1,084,390 9,487,038 8,249 75,840 68,522 $ $ 408,411 11,506 — — — — — 68,522 — $ — 2,527,961 1,084,071 — 8,249 75,840 — — — 1,179 319 9,487,038 — — — Financial Liabilities Deposits..................................................................... Federal Home Loan Bank borrowings ...................... Other borrowings ...................................................... Subordinated debt and junior subordinated debt....... Other liabia lities—interest rate derivatives ................ Accruerr d interest payabla e........................................... 13,131,090 705,000 135,069 281,404 74,683 4,593 13,142,943 705,094 122,926 258,631 74,683 4,593 12,245,272 — 122,926 — — 4,593 897,671 705,094 — 258,631 74,683 — — — — — — — thtt ousandsdd )s (i(( nii Financial Assets Carrying Amount Fair Value Estimate Cash and due frff om banks .......................................... $ 1,251,358 Equity securities........................................................ 13,466 3,013,462 Availabla e-forff -sale debt securities.............................. Held-to-maturt 1,004,555 ity debt securities................................ 9,611,856 Net loans ................................................................... 25,277 Loans held forff sale .................................................... 24,867 Other assets—interest rate derivatives...................... 60,844 Accruerr d interest receivabla e....................................... $ 1,251,358 13,466 3,013,462 1,028,452 9,385,917 25,277 24,867 60,844 $ Financial Liabilities Deposits..................................................................... Federal Home Loan Bank borrowings ...................... Other borrowings ...................................................... Junior subordinated debt ........................................... Other liabia lities—interest rate derivatives ................ Accruerr d interest payabla e........................................... 13,565,863 183,920 141,893 132,860 26,388 1,901 13,575,477 185,684 134,288 109,186 26,388 1,901 Quoted Prices in Active Markets Fair Value Measurements at December 31, 2021 Signififf cant Other Observable Inputs (level 2) Signififf cant Unobservable Inputs (level 3) forff Identical Assets (level 1) 1,251,358 13,466 — — — — — 60,844 12,273,211 — 134,288 — — 1,901 $ — $ — 3,011,969 1,028,047 — 25,277 24,867 — — — 1,493 405 9,385,917 — — — 1,302,266 185,684 — 109,186 26,388 — — — — — — — The folff lowing methods and assumptions were used to measure the faff ir value of fiff nancial instrumrr ents recorded at cost on Wesbanco’s consolidated balance sheets: CasCC h and due frff om bankskk : The carryir ng amount forff cash and due frff om banks is a reasonabla e estimate of faff ir value. HeHH ld-dd to-maturitytt dedd bt securities: Fair values forff debt securities held-to-maturt ity are determined in the same manner as investment securities, . which are described above a 123 NeNN t loans: Fair values forff loans are estimated using a discounted cash flff ow methodology. The discount rates take into account interest rates currently being offff eff red to customers foff r loans with similar terms, the credit risk associated with the loan and other market faff ctors, including liquidity. Wesbanco believes the discount rates are consistent with transactions occurring in the marketpt lace foff r both perfoff rming and distressed loan types. The carryirr ng value is net of the allowance forff loan losses and other associated premiums and discounts. Due to the signififf cant judgment involved in evaluating credit quality, loans are classififf ed within level 3 of the faff ir value hierarchy. Accrued interest receivable: The carryir ng amount of accruerr d interest receivabla e appr a oximates its faff ir value. e Depos itstt : The carryir ng amount is considered a reasonabla e estimate of faff ir value forff ity certififf cates of deposit is estimated by a discounted cash flff ow method using rates currently offff eff red forff demand, savings and other variabla e rate deposit accountu s. deposits of The faff ir value of fiff xed maturt similar remaining matut rities. FeFF deral HomHH e Loan Bank borrowings: The faff ir value of FHLB borrowings is based on rates currently availabla e to Wesbanco forff borrowings with similar terms and remaining maturt ities. Other borrowings: The carryr ing amount of feff deral fuff nds purchased and overnrr ight sweep accounts generally apa proximate faff ir value. Other repurchase agreements are based on quoted market prices if availaba le. If market prices are not availaba le, foff r certain fiff xed and adjustabla e rate repurchase agreements, then quoted market prices of similar instrumrr ents are used. SS Subor dinated debt and junior subordinated debt: The faff ir value of subordinated debt is estimated using discounted cash flff ow analyses based similar types of borrowing arrangements. Due to the pooled naturt e of junior subordinated debt owed to ts, which are not actively traded, estimated faff ir value is based on recent similar transactions of single-issuer trurr st trusrr on the current borrowing rates forff unconsolidated subsidiaryr prefeff rred securities. Accrued interest payable: The carryirr ng amount of accruerr d interest payabla e appr a oximates its faff ir value. OfO fff -ff balance sheet fiff nancial instrumentstt : Offff -ff balance sheet fiff nancial instrumrr of credit. Fair values forff account the remaining terms of the agreements and the present credit standing of the counterparr to extend credit and letters of credit are insignififf cant and thereforff e are not presented in the above ents consist of commitments to extend credit, including letters commitments to extend credit are estimated using the feff es currently charged to enter into similar agreements, taking into rties. The estimated faff ir value of the commitments tabla es. a 124 NOTE 17. COMPREHENSIVE INCOME/(LOSS) The activity in accumulated other comprehensive income forff the years ended December 31, 2022, 2021 and 2020 is as folff lows: Accumulated Other Comprehensive Income/(Loss) (1) Defiff ned Benefiff t Plans Unrealized Gains (Losses) on Debt Securities Available-forff - Sale Unrealized Gains on Debt Securities Transfeff rred frff om Available-forff - Sale to Held-to- Maturity Total (398) $ (4,722) $ — $ (5,120) thtt ousandsdd )s (i(( nii Balance at December 31, 2021 .............................................. $ Other comprehensive income/(loss) befoff re reclassififf cations............................................................... Amounts reclassififf ed frff om accumulated other comprehensive income/(loss) ......................................... Period change......................................................................... Balance at December 31, 2022 .............................................. $ (358) 221 (137) (535) Balance at December 31, 2020 .............................................. $ (15,502) Other comprehensive income/(loss) befoff re reclassififf cations............................................................... Amounts reclassififf ed frff om accumulated other comprehensive income/(loss) ......................................... Period change......................................................................... Balance at December 31, 2021 .............................................. $ 13,192 1,912 15,104 (398) Balance at December 31, 2019 .............................................. $ (17,468) Other comprehensive income/(loss) befoff re reclassififf cations............................................................... Amounts reclassififf ed frff om accumulated other comprehensive income/(loss) ......................................... Period change......................................................................... Balance at December 31, 2020 .............................................. $ (320) 2,286 1,966 (15,502) (257,169) 10 (257,159) (261,881) 46,861 (51,540) (43) (51,583) (4,722) 18,644 30,153 (1,936) 28,217 46,861 $ $ $ $ $ $ $ $ $ $ — (257,527) — — — $ 231 (257,296) (262,416) — $ 31,359 — — — — $ (38,348) 1,869 (36,479) (5,120) $ 1,201 25 — (25) (25) — $ 29,833 325 30,158 31,359 (1) All amounts are net of tax. Related income tax expense or benefiff t is calculated using a combined Federal and State income tax rate appr all periods presented. a oximating 24% in 125 Details about Accumulated Other Comprehensive Income/(Loss) Components thtt ousandsdd )s (i(( nii Securities availabla e-forff -sale (1): Net securities losses (gains) reclassififf ed into earnings .............................................................. $ Related income tax (benefiff t) expense ............... Net effff eff ct on accumulated other comprehensive income/(loss) forff the period ................................... Securities held-to-maturt ity (1): Amortization of unrealized gain transfeff rred -sale....................................... frff om availabla e-forff Related income tax expense.............................. Net effff eff ct on accumulated other comprehensive income/(loss) forff the period ................................... Defiff ned benefiff t plans (2): Amortization of net loss and prior service Amounts Reclassififf ed frff om Accumulated Other Comprehensive Income/ (Loss) For the Years Ended December 31, 2021 2020 2022 Affff eff cted Line Item in the Statement of Net Income $ 13 (3) 10 — — — (56) $ (2,540) Net securities gains (Non-interest income) 13 Provision forff income taxes 604 (43) (1,936) — — — (32) 7 (25) Interest and dividends on securities (Interest and dividend income) Provision forff income taxes costs.................................................................... Related income tax benefiff t................................ 291 (70) 2,521 (609) 3,000 (714) Provision forff Employee benefiff ts (Non-interest expense) income taxes Net effff eff ct on accumulated other comprehensive income/(loss) forff the period ................................... Total reclassififf cations forff the period......................... $ 221 231 1,912 1,869 $ 2,286 325 $ (1) (2) For additional detail related to unrealized gains on securities and related amounts reclassififf ed frff om accumulated other comprehensive income see Note 3, “Securities.” Included in the computation of net periodic pension cost. See Note 12, “Employee Benefiff t Plans” forff additional detail. NOTE 18. COMMITMENTS AND CONTINGENT LIABILITIES ents forff commitments to extend credit and standby letters of credit is limited to the contractuat Commitments— In the normal course of business, Wesbanco offff eff rs offff -ff balance sheet credit arrangements to enabla e its customers to meet their fiff nancing objectives. Those instrurr ments involve, to varyirr ng degrees, elements of credit and interest rate risk in excess of the amount recognized in the fiff nancial statements. Wesbanco’s exposure to credit losses in the event of non-perforff mance by the other parties to the fiff nancial instrumrr l amount of those instrurr ments. Wesbanco all other lending. Commitments generally have fiff xed uses the same credit policies in making commitments and conditional obligations as forff expiration dates or other termination clauses and may require payment of a feff e. Since many of the commitments are expected to expire without being drawn upon, the total commitment amounts do not necessarily represent futff urt e cash requirements. The allowance forff credit losses associated with commitments was $8.4 million and $7.8 million as of December 31, 2022 and 2021, respectively, and is included in other liaba ilities on the Consolidated Balance Sheets. Letters of credit are conditional commitments issued by banks to guarantee the perforff mance of a customer to a third party. Those guarantees are primarily issued to support public and private borrowing arrangements, including normal business activities, bond fiff nancing and similar transactions. Letters of credit are considered guarantees. The liaba ility associated with letters of credit was $0.2 million as of December 31, 2022 and 2021. Contingent obligations to purchase loans funde d by other entities include affff orff dabla e housing plan guarantees, credit card guaranta ees, loans sold with recourse as well as obligations to the FHLB. Affff orff dabla e housing plan guarantees are perforff mance guarantees forff various building project loans. The guarantee amortizes as the loan balances decrease. Credit card guarantees are credit card balances not owned by Wesbanco, whereby the Bank guarantees the perforff mance of the cardholder. ff 126 The folff lowing tabla e presents total commitments to extend credit, guarantees and various letters of credit outstanding: a thtt ousandsdd )s (i(( nii Lines of credit .................................................................................................................................. $ Loans appr oved but not closed......................................................................................................... Overdraftff limits ................................................................................................................................ Letters of credit ................................................................................................................................ Contingent obligations and other guarantees ................................................................................... December 31, 2022 2021 $ 3,806,398 398,204 380,143 30,362 30,782 2,954,147 472,810 370,439 29,017 68,235 Contingent Liabilities— Wesbanco is a party to various legal and administrative proceedings and claims. While any litigation contains an element of uncertainty, management does not believe that a material loss related to such proceedings or claims pending or known to be threatened is reasonabla y possible. NOTE 19. WESBANCO BANK COMMUNITY DEVELOPMENT CORPORARR TION Wesbanco Bank Community Development Corpor ation (“WBCDC”), a consolidated subsidiaryrr of Wesbanco Bank, is a Certififf ed Development Entity (“CDE”) with $125.0 million of New Markets Tax Credits (“NMTC”) all of which had been invested in WBCDC at December 31, 2022. The NMTC program is administered by the Community Development Financial Institut tions Fund of the U.S. Treasuruu yr and is aimed at stimulating economic and community development and job creation in low-income communities. The program provides feff deral tax credits to investors who make qualififf ed equity investments (“QEIs”) in a CDE. The CDE is required to invest the proceeds of each QEI in low- income communities, which are generally defiff ned as those census tracts with poverty rates greater than 20% and/dd or median faff mily incomes that are less than or equal to 80% of the area median faff mily income. rr The credit provided to the investor totals 39% of each QEI in a CDE and is claimed over a seven-year credit allowance period. In each of each QEI. For each of the the fiff rst three years, the investor receives a credit equal to 5% of the total amount the investor paid to the CDE forff each QEI. As of December 31, remaining four its $125.0 million NMTC authority 2022, Wesbanco has received $32.8 million in tax credits over the seven-year credit allowance periods forff invested in WBCDC. Wesbanco is eligible to receive an additional $16.0 million in tax credits with respect to aggregate QEI amounts invested over their remaining credit allowance period. years, the investor receives a credit equal to 6% of the total amount the investor paid to the CDE forff ff Wesbanco Bank recognized $3.5 million, $2.6 million and $2.0 million in NMTC in its income tax provision forff the years ended December 31, 2022, 2021 and 2020, respectively. These tax credits are subject to certain general business tax credit limitations and are thereforff e limited in deductibility on Wesbanco’s feff deral income tax returt n. As of December 31, 2022, no prior NMTC has been carried forff ward to futff urt e tax years. The NMTC claimed by Wesbanco Bank with respect to each QEI remain subject to recapta urt e over each QEI’s credit allowance period the occurrence of any of the folff lowing: u upon • • • if less than subu stantially all (generally defiff ned as 85%) of the QEI proceeds are not used by WBCDC to make qualififf ed low-income community investments; WBCDC ceases to be a CDE; or WBCDC redeems its QEI investment prior to the end of the current credit allowance periods. As of December 31, 2022, 2021 and 2020, none of the above a events anticipated to occur in the forff eseeabla e futff urt e. Approximately half of the tax credits are no longer subject to recapta urt e. recapta urt e events had occurred, nor in the opinion of management are such For the years ended December 31, 2022 and 2021, respectively, WBCDC recognized net (losses) gains of ($1.0) million and $3.8 million on an investment that it made in a start-up fiff rm more than ten years ago that was acquired in 2021 by a public company. This gain is reported on the Consolidated Income Statements within net gain (loss) on other real estate owned and other assets. 127 The folff lowing condensed fiff nancial statements summarize the fiff nancial position of WBCDC as of December 31, 2022, and the results of its operations and cash flff ows forff the year ended December 31, 2022: BALANCE SHEET thtt ousandsdd )s (i(( nii Assets Cash and due frff om banks ............................................................................................................................................... Loans, net of allowance forff credit losses of $0.8 million .............................................................................................. Other assets..................................................................................................................................................................... Total Assets ................................................................................................................................................................... Liabilities ....................................................................................................................................................................... Shareholder Equity ...................................................................................................................................................... Total Liabilities and Shareholder Equity................................................................................................................... STATEMENT OF INCOME (i(( nii thtt ousandsdd )s Interest income Loans .......................................................................................................................................................................... Total interest income .............................................................................................................................................. credit losses .............................................................................................................................................. Provision forff Net interest income aftff er provision forff credit losses ................................................................................................. Loss on investments ....................................................................................................................................................... Non-interest expense ...................................................................................................................................................... income taxes.................................................................................................................. e provision forff Income beforff Provision forff income taxes ............................................................................................................................................. Net income..................................................................................................................................................................... STATEMENT OF CASH FLOWS thtt ousandsdd )s (i(( nii Operating Activities Net income...................................................................................................................................................................... Provision forff credit losses .............................................................................................................................................. Loss on investments ....................................................................................................................................................... Net change in other assets .............................................................................................................................................. Net change in other liabia lities......................................................................................................................................... Net cash used in operating activities .............................................................................................................................. Investing Activities Increase in loans ............................................................................................................................................................. Proceeds frff om sale of investments ................................................................................................................................. Net cash used in investing activities............................................................................................................................... Financing Activities Qualififf ed equity investment by parent company............................................................................................................ Net cash provided by fiff nancing activities ...................................................................................................................... Net increase in cash and cash equivalents.................................................................................................................. Cash and cash equivalents at beginning of year............................................................................................................. Cash and cash equivalents at end of year................................................................................................................... December 31, 2022 79,979 61,214 3,494 144,687 1,117 143,570 144,687 For the Year Ended December 31, 2022 1,360 1,360 (43) 1,403 (1,044) 298 61 (47) 108 For the Year Ended December 31, 2022 108 (43) 1,044 (1,687) 197 (381) (4,654) 4,373 (281) 12,500 12,500 11,838 68,141 79,979 $ $ $ $ $ $ $ $ 128 NOTE 20. TRARR NSACTIONS WITH RELATED PARTIES Certain directors and offff iff cers (including their affff iff liates, faff milies and entities in which they are principal owners) of Wesbanco and its subu sidiaries are customers of,ff or supu pliers to, those subu sidiaries and have had, and are expected to have, transactions with the subu sidiaries in the ordinaryrr course of business. In addition, certain directors are also directors or offff iff cers of corpor ations that are customers of,ff or suppliers to, the Bank and have had, and are expected to have, transactions with the Bank in the ordinaryr course of business. In the opinion of management, such icabla e banking regulations. Indebtedness of related parties a transactions are consistent with prude oximately $3.1 million, $10.0 million and $12.4 million as of December 31, 2022, 2021 and 2020, respectively. During 2022, aggregated appr $1.7 million in related party loans were funde d and $8.6 million were repaid or no longer related. At December 31, 2022, 2021 and 2020, none ff of the outstanding related party loans were past due 90 days or more, on non-accruarr nt banking practices and are within appl l, or considered to be a TDR. a rr rr NOTE 21. REGULATORYRR MATTERS regulator forff The Federal Reserve Bank is the primaryr the parent company, Wesbanco. Wesbanco Bank is a state non-member bank jointly ions. Wesbanco is a legal entity separate and distinct frff om its regulated by the FDIC and the West Virginia Division of Financial Institutt the payment of dividends to forff subsidiaries and is dependent upon dividends frff om its subsidiaryr bank, Wesbanco Bank, to provide funds other cash requirements. The payment of dividends by Wesbanco Bank to its current stock repurchase plan and to provide forff shareholders, fundff Wesbanco is subject to state and feff deral banking regulations. Under appl oval is required if the total of a all dividends declared by a bank in any calendar year exceeds the availabla e retained earnings or exceeds the aggregate of the bank’s net profiff ts the preceding two years. As of December 31, 2022, under FDIC (as defiff ned by regulatoryrr agencies) forff and state of West Virginia regulations, Wesbanco could receive, without prior regulatoryr appr oval, a dividend of up to $116.8 million frff om Wesbanco Bank. icabla e law, bank regulatoryr agency appr that year and its retained net profiff ts forff a a ff Wesbanco Bank is also required to maintain non-interest bearing reserve balances with the Federal Reserve Bank. The Bank did not have a reserve requirement during 2022 or 2021. Additionally, Wesbanco and Wesbanco Bank are subject to various regulatoryrr capia tal requirements (risk-based capia tal ratios) administered by feff deral banking agencies. Failure to meet minimum capia tal requirements can initiate certain mandatoryrr and possibly additional discretionaryrr actions by the regulators that, if undertaken, could have a material adverse effff eff ct on Wesbanco’s fiff nancial results. All bank holding companies and banking subsidiaries are required to have common equity Tier 1 (“CET1”) of at least 4.5%, core capia tal (“Tier 1”) of at least 6% of risk-weighted assets, total capa ital of at least 8% of risk-weighted assets, and a minimum Tier 1 leverage ratio of 4%. Tier 1 capia tal consists principally of shareholders’ equity; excluding items recorded in accumulated other comprehensive income, less goodwill and other intangibles. Total capia tal consists of Tier 1 capia tal plus the allowance forff t prefeff rred securities. The regulations also defiff ne “well-capia talized” levels of CET1, Tier 1 risk-based capia tal, total risk-based capia tal, and Tier 1 leverage capia tal as 6.5%, 8%, 10%, and 5%, respectively. Wesbanco and Wesbanco Bank were categorized as “well-capia talized” under the Federal Deposit Insurance Corpor ation Improvement Act at December 31, 2022 and 2021. There are no conditions or events since December 31, 2022 that management rr believes have changed Wesbanco’s “well-capia talized” category.r loan losses, subject to limitation, and trusrr The Basel III capia tal standards, effff eff ctive Januaryrr 1, 2015 with a phase-in period ending Januaryrr 1, 2019, establa ishes the minimum capia tal t prefeff rred securities as Tier 1 capia tal issued beforff e May 19, 2010 forff levels required under the Dodd-Frank Act, permanently grandfaff thers trusrr tion buffff eff r is also bank holding companies under $15 billion, and increases the capia tal required forff added to minimum capia tal standards that is required to be met to avoid restrictions on dividends, share repurchases, certain incentives and other restrictions. Including this capia tal conservation buffff eff r, minimum levels of CET1, Tier 1 risk-based capia tal and total risk-based capia tal are defiff ned as 7.0%, 8.5% and 10.5%, respectively. certain categories of assets. A capia tal conservarr Wesbanco currently has $133.5 million in junior subordinated debt in its Consolidated Balance Sheets presented as a separate categoryr of t subsidiaries of long-term debt. For regulatoryrr purpos Wesbanco underlying such junior subordinated debt, are considered Tier 2 capia tal in accordance with current regulatoryr reporting requirements, as Wesbanco had total consolidated assets aba ove $15 billion as of December 31, 2022 and 2021. Also, in March of 2022, Wesbanco completed the issuance of $150.0 million in aggregate principal amount of subordinated debenturt es. The subordinated debenturt es have a fiff xed rate of 3.75% forff t prefeff rred securities totaling $130.0 million, issued by unconsolidated trusrr the next fiff ve years at Three Month SOFR plus a spread of 1.787%. the fiff rst fiff ve years and a flff oating rate forff es, trusrr rr ions that adopt CECL during 2020 with the option to delay forff On March 26, 2020, regulators issued interim fiff nancial rulrr e (“IFR”) “Regulatoryrr Capia tal RulRR e: Revised Transition of the Current Expected Losses Methodology forff Allowances” in response to the disrupt ed economic activity frff om the spread of COVID-19. The IFR provides fiff nancial lowed institutt two years the estimated impact of CECL on regulatoryrr capia tal, folff by a three-year transition period to phase out the aggregate amount of the capia tal benefiff t provided by the initial two-year delay (“fiff ve year transition”). Wesbanco adopted CECL effff eff ctive Januaryr 1, 2020 and elected to implement the fiff ve year transition. Regulatoryr capa ital levels both the Bank and Wesbanco would have continued to be greater than the amounts needed without the capia tal benefiff t at December 31, 2022 forff rr 129 to be considered “well capia talized”, as the capia tal benefiff t appr risk-based capia tal would have been slightly higher without the transition. a oximated 17 to 24 basis points forff three of the four ff regulatoryr ratios, while total The folff lowing tabla e summarizes risk-based capia tal amounts and ratios forff Wesbanco and the Bank: lll arll srr inii (dol (( Wesbanco, Inc. thtt ousands)s Minimum Value (1) Well Capitalized (2) Amount Ratio Minimum Amount (1) Amount Ratio Minimum Amount (1) December 31, 2022 December 31, 2021 Tier 1 leverage ............. Tier 1 capia tal to risk- weighted assets ............ Total capia tal to risk- weighted assets ............ Common equity Tier 1. Wesbanco Bank, Inc. Tier 1 leverage ............. Tier 1 capia tal to risk- weighted assets ............ Total capia tal to risk- weighted assets ............ Common equity Tier 1. 4.00% 6.00% 8.00% 4.50% 4.00% 6.00% 8.00% 4.50% 5.00% $ 1,576,764 9.90% $ 636,966 $ 1,586,165 10.02% $ 633,089 8.00% 1,576,764 12.33% 767,334 1,586,165 14.05% 677,190 10.00% 6.50% 1,933,007 1,432,280 15.11% 1,023,112 11.20% 575,500 1,795,661 1,441,681 15.91% 902,920 12.77% 507,893 5.00% $ 1,558,305 9.80% $ 636,033 $ 1,529,227 9.68% $ 631,920 8.00% 1,558,305 12.22% 765,439 1,529,227 13.60% 674,622 10.00% 6.50% 1,634,548 1,558,305 12.81% 1,020,585 12.22% 574,079 1,608,723 1,529,227 14.31% 899,496 13.60% 505,967 (1) Minimum requirements to remain adequately capia talized. (2) Well-capia talized under prompt corrective action regulations. NOTE 22. CONDENSED PARENT COMPANY FINANCIAL STATEMENTS Presented below are the Condensed Balance Sheets, Statements of Income and Statements of Cash Flows forff the parent company: BALANCE SHEETS thtt ousandsdd )s (i(( nii ASSETS Cash and due frff om banks ................................................................................................................. $ Investment in subsidiaries—Bank ................................................................................................... Investment in subsidiaries—Nonbank ............................................................................................. Securities availabla e-forff -sale, at faff ir value........................................................................................ Other assets ...................................................................................................................................... Total Assets..................................................................................................................................... $ LIABILITIES Subordinated debt and junior subordinated debt.............................................................................. $ Dividends payabla e and other liabia lities............................................................................................ Total Liabilities .............................................................................................................................. SHAREHOLDERS’ EQUITY ...................................................................................................... Total Liabilities and Shareholders’ Equity ................................................................................. $ December 31, 2022 2021 272,179 2,408,260 11,810 — 39,131 2,731,380 281,404 23,314 304,718 2,426,662 2,731,380 $ $ $ $ 163,356 2,636,220 10,121 — 39,678 2,849,375 132,860 23,349 156,209 2,693,166 2,849,375 130 STATEMENTS OF INCOME thtt ousandsdd )s (i(( nii Dividends frff om subsidiaries—Bank .......................................................................... $ Dividends frff om subsidiaries—Nonbank .................................................................... Income frff om securities ............................................................................................... Other income .............................................................................................................. Total income............................................................................................................... Interest expense .......................................................................................................... Other expense............................................................................................................. Total expense ............................................................................................................. Income beforff e income tax benefiff t and undistributed net income of subsidiaries ...... Income tax benefiff t...................................................................................................... Income beforff e undistributed net income of subsidiaries............................................ Equity in undistributed net income (excess dividends) of subsidiaries ..................... Net income ................................................................................................................. Prefeff rred stock dividends ........................................................................................... NET INCOME AVAILABLE TO COMMON SHAREHOLDERS ................... $ 2022 For the years ended December 31, 2021 2020 172,500 1,750 — 4 174,254 10,860 5,851 16,711 157,543 (3,652) 161,195 30,918 192,113 10,125 181,988 $ $ 250,500 1,800 — — 252,300 5,673 5,698 11,371 240,929 (4,163) 245,092 (2,832) 242,260 10,125 232,135 $ $ 64,000 1,200 (22) 485 65,663 6,964 5,415 12,379 53,284 (2,471) 55,755 66,289 122,044 2,644 119,400 The details of other comprehensive income and accumulated other comprehensive income are included in the consolidated fiff nancial statements. STATEMENTS OF CASH FLOWS thtt ousandsdd )s (i(( nii OPERARR TING ACTIVITIES Net income ................................................................................................................. $ Adjustments to reconcile net income to net cash provided by operating activities: (Equity in undistributed net income) excess dividends of subsidiaries ..................... Decrease (increase) in other assets............................................................................. Net securities losses ................................................................................................... Other—ne t.................................................................................................................. rr Net cash provided by operating activities .................................................................. INVESTING ACTIVITIES Proceeds frff om sales—securities availabla e-forff Acquisitions and additional capia talization of subsidiaries, -sale.................................................... net of cash acquired................................................................................................. Net cash used in investing activities .......................................................................... FINANCING ACTIVITIES Repayment of subordinated and junior subordinated debt......................................... Issuance of subordinated debt .................................................................................... Issuance of common stock ......................................................................................... Issuance of prefeff rred stock ........................................................................................ Treasuryrr shares purchased—net ................................................................................ Dividends paid to common and prefeff rred shareholders............................................. Net cash (used in) provided by fiff nancing activities ................................................... Net increase (decrease) in cash and cash equivalents ................................................ Cash and cash equivalents at beginning of year ........................................................ Cash and cash equivalents at end of year................................................................... $ 2022 For the years ended December 31, 2021 2020 192,113 $ 242,260 $ 122,044 (30,918) 582 — 6,941 168,718 — (100) (100) — 147,702 — — (116,047) (91,450) (59,795) 108,823 163,356 272,179 $ 2,832 (1,453) — 7,984 251,623 — — — (35,000) — — — (179,882) (96,609) (311,491) (59,868) 223,224 163,356 $ (66,289) 121 22 5,865 61,763 203 (35,000) (34,797) (6,702) — 59 144,484 (24,540) (87,897) 25,404 52,370 170,854 223,224 131 NOTE 23. BUSINESS SEGMENTS Wesbanco operates two reportabla e segments: (i) Community Banking and (ii) Trusrr t and Investment Services. Wesbanco’s community banking segment offff eff rs services traditionally offff eff red by fulff l-service commercial banks, including commercial demand, individual demand and time deposit accounts, as well as commercial, mortgage and individual installment loans, and certain non-traditional offff eff rings, such as insurance and securities brokerage services. The trusrr t services as well as various alternative investment oximately $4.9 billion, $5.6 products including mutuat billion and $5.0 billion as of December 31, 2022, 2021 and 2020, respectively. These assets are held by Wesbanco, in fiff duciaryr or agency capaa their customers and thereforff e are not included as assets on Wesbanco’s Consolidated Balance Sheets. t and investment services segment offff eff rs trusrr t and investment services segment was appr . The market value of assets of the trusrr cities forff l funds a ff Condensed fiff nancial inforff mation by business segment is presented below: thtt ousandsdd )s (i(( nii For the Year Ended December 31, 2022 Interest and dividend income..................................................................................... $ Interest expense ......................................................................................................... Net interest income .................................................................................................... credit losses.......................................................................................... Provision forff Net interest income aftff er provision forff credit losses ................................................. Non-interest income................................................................................................... Non-interest expense ................................................................................................. Income beforff e provision forff income taxes ................................................................ income taxes ........................................................................................ Provision forff Net income................................................................................................................. Prefeff rred stock dividends .......................................................................................... Net income availabla e to common shareholders ......................................................... $ For the Year Ended December 31, 2021 Interest and dividend income..................................................................................... $ Interest expense ......................................................................................................... Net interest income .................................................................................................... credit losses.......................................................................................... Provision forff Net interest income aftff er provision forff credit losses ................................................. Non-interest income................................................................................................... Non-interest expense ................................................................................................. Income beforff e provision forff income taxes ................................................................ income taxes ........................................................................................ Provision forff Net income................................................................................................................. Prefeff rred stock dividends .......................................................................................... Net income availabla e to common shareholders ......................................................... $ For the Year Ended December 31, 2020 Interest and dividend income..................................................................................... $ Interest expense ......................................................................................................... Net interest income .................................................................................................... credit losses.......................................................................................... Provision forff Net interest income aftff er provision forff credit losses ................................................. Non-interest income................................................................................................... Non-interest expense ................................................................................................. Income beforff e provision forff income taxes ................................................................ income taxes ........................................................................................ Provision forff Net income................................................................................................................. Prefeff rred stock dividends .......................................................................................... Net income availabla e to common shareholders ......................................................... $ Community Banking Trust and Investment Services Consolidated 513,656 39,343 474,313 (1,663) 475,976 89,840 340,573 225,243 41,945 183,298 10,125 173,173 484,967 27,034 457,933 (64,274) 522,207 103,274 336,766 288,715 56,831 231,884 10,125 221,759 541,277 61,797 479,480 107,741 371,739 101,850 338,526 135,063 20,932 114,131 2,644 111,487 $ $ $ $ $ $ — $ — — — — 27,551 16,393 11,158 2,343 8,815 — 8,815 $ — $ — — — — 29,511 16,377 13,134 2,758 10,376 — 10,376 $ — $ — — — — 26,335 16,319 10,016 2,103 7,913 — 7,913 $ 513,656 39,343 474,313 (1,663) 475,976 117,391 356,966 236,401 44,288 192,113 10,125 181,988 484,967 27,034 457,933 (64,274) 522,207 132,785 353,143 301,849 59,589 242,260 10,125 232,135 541,277 61,797 479,480 107,741 371,739 128,185 354,845 145,079 23,035 122,044 2,644 119,400 Total non-fiff duciaryrr t customer intangibles), $3.7 million and $4.1 million at December 31, 2022, 2021 and 2020, respectively. All other assets, including goodwdd ill and the remainder of other intangible assets, were allocated to the Community Banking segment. t and investment services segment were $3.3 million (including $1.1 million of trusrr assets of the trusrr 132 ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE None. ITEM 9A. CONTROLS AND PROCEDURES Wesbanco’s management carried out an evaluation, under the supervision and with the participation of the chief executive offff iff cer and the chief fiff nancial offff iff cer, of the effff eff ctiveness of the design and operation of Wesbanco’s disclosure controls and procedures (as such term is defiff ned in RulRR es 13a-15(e) and 15d-15(e) under the Exchange Act) as of December 31, 2022, pursuant to Exchange Act RulRR e 13a-15. Based upu on that evaluation, the chief executive offff iff cer along with the chief fiff nancial offff iff cer concluded that Wesbanco’s disclosure controls and procedud res as of December 31, 2022, are effff eff ctive in timely alerting them to material inforff mation relating to Wesbanco (including its consolidated subsidiaries) required to be included in Wesbanco’s periodic fiff lings under the Exchange Act. No changes in Wesbanco's internal control over fiff nancial reporting have occurred during the period covered by this report that have materially affff eff cted, or are reasonabla y likely to materially affff eff ct, the Wesbanco's internal control over fiff nancial reporting. Management’s Report on Internal Control Over Financial Reporting Management’s Report on internal control over fiff nancial reporting and the audit report of Ernst & Young LLP, the Company’s independent registered public accounting fiff rm, on internal control over fiff nancial reporting is included within this report at the beginning of “I“ tII em 8. FiFF nancial StS atementstt and Supplementaryr Data” and is incorpor ated in this Item 9A by refeff rence. rr ITEM 9B. OTHER INFORMATION None. ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS Not Applicabla e. 133 ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORARR TE GOVERNANCE PART III The infoff rmation required by this Item 10 is incorprr orated by refeff rence to the apa plicaba le infoff rmation in our Proxy Statement set foff rth under ate Governance, Delinquent the headings Election of Directors, Nominees, Continuing Directors, Executive Offff iff cers of the Corpor Section 16(a) Reports and Audit Committee and certain other sections. ation, Corpor rr rr CODE OF ETHICS Wesbanco has adopted a Code of Business Conduct and Ethics that appl ies to our directors, offff iff cers and employees, including Wesbanco’s Chief Executive Offff iff cer, Chief Financial Offff iff cer, Controller and other executive offff iff cers. Wesbanco’s “Code of Business Conduct and Ethics” can be found //// www.wesbanco.com in the “About Us” section under “Investor Relations” under “Governrr ance Documents”. Wesbanco intends to disclose any changes or amendments to or waivers frff om Wesbanco's "Code of Business Condud ct and Ethics" on its website. posted on our website at http:t a ff Wesbanco will provide a printed copy, frff ee of charge, of Wesbanco’s Code of Business Conduct and Ethics to any shareholder requesting such inforff mation. To obtain a copy of Wesbanco’s Code of Ethics, contact: John Iannone, Wesbanco, Inc., 1 Bank Plaza, Wheeling, WV 26003. (304) 905-7021 ITEM 11. EXECUTIVE COMPENSATION The infoff rmation required by this Item 11 is incorprr orated by refeff rence to the apa plicaba le infoff rmation in our Proxy Statement set foff rth under the headings Summaryrr Compensation Tabla e, Meetings of Board of Directors and Committees and Compensation of Members, Compensation Committee Interlocks and Insider Participation, Compensation Committee Report, Compensation Discussion and Analysis and certain other sections. ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS The inforff mation required by this Item 12 (other than the inforff mation provided below under the heading Equity Compensation Plan th under the headings Ownership of Inforff mation) is incorpor Securities by Directors, Nominees and Offff iff cers and Benefiff cial Owners of More Than 5% of the Common Stock of the Corpor icabla e inforff mation in our Proxy Statement set forff ated by refeff rence to the appl ation. a rr rr The folff lowing tabla e sets forff th certain inforff mation with respect to securities authorized forff issuance under our equity compensation plans as of December 31, 2022. Equity Compensation Plan Inforff mation q p y Plan Category oved by security holders......................................... Equity compensation plans appr oved by security holders................................... a Equity compensation plans not appr a Number of securities to be issued upon exercise of outstanding options Weighted average exercise price of outstanding options 812,090 None $ 31.83 None Number of securities remaining forff fuff ture issuance under equity compensation plans 1,468,140 None ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRARR NSACTIONS, AND DIRECTOR INDEPENDENCE The infoff rmation required by this Item 13 is incorprr orated by refeff rence to the apa plicaba le infoff rmation in our Proxy Statement set foff rth under transactions is the headings Transactions with Directors and Offff iff cers and Election of Directors. Additional inforff mation concerning related partytt th in the Annual Report under Note 20, “Transactions with Related Parties” in the Consolidated Financial Statements. set forff ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVR ICES The infoff rmation required by this Item 14 is incorprr orated by refeff rence to the apa plicaba le infoff rmation in our Proxy Statement set foff rth under the heading Independent Registered Public Accounting Firm. 134 ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES (A) CERTAIN DOCUMENTS FILED AS PART OF THE FORM 10-K PART IV (1) CONSOLIDATED FINANCIAL STATEMENTS: Refeff rence is made to Part II Item 8, of this Annual Report on Form 10-K. (2) FINANCIAL STATEMENT SCHEDULES: No fiff nancial statement schedules are being fiff led since the required inforff mation is a inappl icabla e or the inforff mation is presented in the Consolidated Financial Statements or related Notes. (3) EXHIBIT LISTING Exhibits listed in the Exhibit Index of this Annual Report on Form 10-K are fiff led herein or are incorpor refeff rence. rr ated by ITEM 16. FORM 10-K SUMMARYR None. 135 EXHIBIT INDEX Exhibit Number 3.1 Document Location Bylaws of Wesbanco, Inc. (As Amended and Restated May 4, 2021). ated by refeff rence to Form 10-Q fiff led by the Registrant Incorpor rr with the Securities and Exchange Commission on May 6, 2021. 3.2 Articles of Amendment to the Articles of Incorpor rr ation of Wesbanco, Inc., dated August 27, 2015, increasing authorized common shares frff om 50,000,000 to 100,000,000 and restated Articles of Incorpor ation. rr 3.3 Articles of Amendment to the Restated Articles of Incorpor rr ation of Wesbanco, Inc. 4.1 Specimen Certififf cate of Wesbanco, Inc. Common Stock. (P) 4.2 4.3 4.4 4.5 4.6 Junior Subordinated Indenturt e dated June 19, 2003 entered into between Wesbanco, Inc., as issuer and The Bank of New York, tee and Amended and Restated Declaration of Trusrr as Trusrr Wesbanco, Inc. Capa ital Trurr st II. t of Indenturt e dated June 26, 2003 entered into between Wesbanco, Inc., as issuer and U.S. Bank National Association, as Trusrr and Amended and Restated Declaration of Trusrr Inc. Capia tal Statutt oryr Trusrr tee t of Wesbanco, t III. Indenturt e dated June 17, 2004 entered into between Wesbanco, Inc., as issuer and Wilmington Trusrr tee and Amended and Restated Declaration of Trusrr Trusrr t IV dated June 17, 2004. t Company, as Trusrr t of Wesbanco Capia tal Indenturt e dated June 17, 2004 entered into between Wesbanco, Inc., as issuer and Wilmington Trusrr tee and Amended and Restated Declaration of Trusrr Trusrr t V dated June 17, 2004. t Company, as Trusrr t of Wesbanco Capia tal Indenturt e dated March 17, 2005 entered into between Wesbanco, Inc. and Wilmington Trusrr and Restated Declaration of Trusrr dated March 17, 2005. t of Wesbanco Capia tal Trusrr t Company, as Trusrr tee and Amended t VI 4.7 Description of Securities. 4.8 Deposit Agreement, dated August 11, 2020, by and among Wesbanco, Inc., Computershare Inc. and Computershare Trusrr Company, N.A. acting jointly as the depositary,rr frff om time to time of the depositaryrr t and the holders receipts described therein. 4.9 Specimen of Certififf cate representing the Series A Prefeff rred Stock. 4.10 Form of Depositaryrr Receipt. 136 ated by refeff rence to Exhibit 3.2 of Form 10-K fiff led by Incorpor rr the Registrant with the Securities and Exchange Commission on Februarr ryrr 28, 2020. Incorpor ated by refeff rence to Exhibit 3.1 of Form 8-K fiff led by rr the Registrant with the Securities and Exchange Commission on August 11, 2020. ated by refeff rence to a prior Registration Statement on Incorpor rr Form S-4 under Registration No. 33-42157 fiff led by the Registrant with the Securities and Exchange Commission on August 9, 1991. ated by refeff rence to Form 10-Q fiff led by the Registrant Incorpor rr with the Securities and Exchange Commission on August 13, 2003. ated by refeff rence to Form 10-Q fiff led by the Registrant Incorpor rr with the Securities and Exchange Commission on August 13, 2003. ated by refeff rence to Form 10-Q fiff led by the Registrant Incorpor rr with the Securities and Exchange Commission on August 9, 2004. ated by refeff rence to Form 10-Q fiff led by the Registrant Incorpor rr with the Securities and Exchange Commission on August 9, 2004. Incorpor ated by refeff rence to Form 8-K fiff led by the Registrant rr with the Securities and Exchange Commission on March 18, 2005. ated by refeff rence to Exhibit 4.7 of Form 10-K fiff led by Incorpor rr the Registrant with the Securities and Exchange Commission on Februarr ryr 26, 2021. ated by refeff rence to Exhibit 4.1 of Form 8-K fiff led by Incorpor rr the Registrant with the Securities and Exchange Commission on August 11, 2020. ated by refeff rence to Exhibit 4.2 of Form 8-K fiff led by Incorpor rr the Registrant with the Securities and Exchange Commission on August 11, 2020. ated by refeff rence to Exhibit 4.1 of Form 8-K fiff led by Incorpor rr the Registrant with the Securities and Exchange Commission on August 11, 2020. 4.11 4.12 Indenturt e, dated March 23, 2022, by and between Wesbanco, Inc. and Wilmington Trusrr t, National Association, as trusrr tee. First Supplemental Indenturt e, dated March 23, 2022, by and between Wesbanco, Inc. and Wilmington Trusrr Association, as trusrr t, National tee. 4.13 Form of 3.75% Fixed-to-Floating Rate Subordinated Note due 2032. 10.1 Wesbanco, Inc. Incentive Bonus, Option and Restricted Stock Plan as adopted Februarr Februarr ryrr 25, 2010, Februarr ryrr 13, 1998 and as amended and restated ryrr 25, 2021. ** ryr 23, 2017 and Februarr ated by refeff rence to Exhibit 4.1 of Form 8-K fiff led by rr Incorpor the Registrant with the Securities and Exchange Commission on March 23, 2022. ated by refeff rence to Exhibit 4.2 of Form 8-K fiff led by rr Incorpor the Registrant with the Securities and Exchange Commission on March 23, 2022. ated by refeff rence to Exhibit 4.2 of Form 8-K fiff led by Incorpor rr the Registrant with the Securities and Exchange Commission on March 23, 2022. ated by refeff rence to Exhibit 10.1 of Form 8-K fiff led by Incorpor rr the Registrant with the Securities and Exchange Commission on April 21, 2021. 10.2 Letter Agreement and Committed Line of Credit Note, dated September 5, 2014, between Wesbanco, Inc. and PNC Bank, National Association. ated by refeff rence to Form 8-K fiff led by the Registrant Incorpor rr with the Securities and Exchange Commission on September 8, 2014. 10.3 Wesbanco, Inc. Defeff rred Compensation Plan – For Directors and Eligible Employees (as amended). ** ated by refeff rence to Form 10-K fiff led by the Registrant Incorpor rr with the Securities and Exchange Commission on March 10, 2006. 10.4 10.5 10.6 10.7 Form of Amended and Restated Change in Control Agreement by and between Wesbanco, Inc., Wesbanco Bank, Inc., Michael L. Perkins and Jayson M. Zatta. ** ated by refeff rence to Form 8-K fiff led by the Registrant rr Incorpor with the Securities and Exchange Commission on April 28, 2006. Form of Wesbanco, Inc. Incentive Bonus, Option & Restricted Stock Plan – Stock Option Agreement. ** ated by refeff rence to Form 10-Q fiff led by the Registrant Incorpor rr with the Securities and Exchange Commission on July 30, 2010. Form of Wesbanco, Inc. Incentive Bonus, Option & Restricted Stock Plan – Restricted Stock Agreement. ** ated by refeff rence to Form 10-Q fiff led by the Registrant Incorpor rr with the Securities and Exchange Commission on July 30, 2010. Form of Change in Control Agreement by and between Wesbanco, Inc., Wesbanco Bank, Inc., and Anthony F. Pietranton. ** ated by refeff rence to Form 8-K fiff led by the Registrant rr Incorpor with the Securities and Exchange Commission on June 5, 2013. 10.8 Amended and Restated Employment Agreement, dated April 24, 2014, by and between Wesbanco Bank, Inc., Todd F. Clossin and Wesbanco, Inc. ated by refeff rence to Form 8-K fiff led by the Registrant Incorpor rr with the Securities and Exchange Commission on April 24, 2014. 10.9 Restricted Stock Agreement by and between Wesbanco, Inc. and Todd F. Clossin. ** 10.10 Wesbanco, Inc. KSOP, Amended and Restated, effff eff ctive Januaryr 1, 2014. ** 10.11 First Amendment to the Wesbanco, Inc. KSOP, effff eff ctive Januaryr 1, 2014. ** 10.12 Second Amendment to the Wesbanco, Inc. KSOP, effff eff ctive Januaryrr 1, 2014. ** 10.13 Form of Employment Agreement by and between Wesbanco Bank, Inc., Wesbanco Inc., and executive offff iff cers (effff eff ctive date): Jayson M. Zatta (effff eff ctive March 1, 2015) and Anthony F. Pietranton (effff eff ctive Januaryr 9, 2015) ** 137 Incorpor ated by refeff rence to Form 8-K fiff led by the Registrant rr with the Securities and Exchange Commission on October 24, 2013. ated by refeff rence to Form 10-K fiff led by the Registrant ryrr 27, Incorpor rr with the Securities and Exchange Commission on Februarr 2015. ated by refeff rence to Form 10-K fiff led by the Registrant ryrr 27, Incorpor rr with the Securities and Exchange Commission on Februarr 2015. ated by refeff rence to Form 10-K fiff led by the Registrant ryrr 27, Incorpor rr with the Securities and Exchange Commission on Februarr 2015. ated by refeff rence to Form 10-Q fiff led by the Registrant rr Incorpor with the Securities and Exchange Commission on July 30, 2015. 10.14 Wesbanco, Inc. Administrative RulRR es forff the Total Shareholder Retut rn Plan. ** 10.15 Form of Wesbanco, Inc. Incentive Bonus, Option & Restricted Stock Plan—Total Shareholder Returt n Agreement. ** 10.16 Third Amendment to the Wesbanco, Inc. KSOP, effff eff ctive September 9, 2016. ** 10.17 Form of Wesbanco, Inc. Incentive Bonus, Option & Restricted Stock Plan—Perforff mance Restricted Stock Agreement.** 10.18 Fourth Amendment to the Wesbanco, Inc. KSOP effff eff ctive April 1, 2018. ** 10.19 Fiftff h Amendment to the Wesbanco, Inc. KSOP effff eff ctive August 20, 2018. ** 10.20 Sixth Amendment to the Wesbanco, Inc. KSOP effff eff ctive Januaryr 1, 2020.** 10.21 Seventh Amendment to the Wesbanco, Inc. KSOP effff eff ctive November 22, 2019. ** ated by refeff rence to Form 8-K fiff led by the Registrant Incorpor rr with the Securities and Exchange Commission on November 24, 2015. ated by refeff rence to Form 10-K fiff led by the Registrant ryrr 26, Incorpor rr with the Securities and Exchange Commission on Februarr 2016. ated by refeff rence to Form 10-K fiff led by the Registrant ryrr 27, Incorpor rr with the Securities and Exchange Commission on Februarr 2018. Incorpor ated by refeff rence to Exhibit 10.2 to Form 10-Q fiff led by rr the Registrant with the Securities and Exchange Commission on July 31, 2017. ated by refeff rence to Form 10-K fiff led by the Registrant rr Incorpor with the Securities and Exchange Commission on March 1, 2019. ated by refeff rence to Form 10-K fiff led by the Registrant Incorpor rr with the Securities and Exchange Commission on March 1, 2019. ated by refeff rence to Form 10-K fiff led by the Registrant ryrr 28, Incorpor rr with the Securities and Exchange Commission on Februarr 2020. ated by refeff rence to Form 10-K fiff led by the Registrant ryrr 28, Incorpor rr with the Securities and Exchange Commission on Februarr 2020. 10.22 Employment Agreement, dated December 16, 2021, by and between Wesbanco Bank, Inc., Daniel K. Weiss, Jr. and Wesbanco, Inc. ** ated by refeff rence to Exhibit 10.1 of Form 8-K fiff led by Incorpor rr the Registrant with the Securities and Exchange Commission on December 17, 2021. 10.23 Change in Control Agreement, dated December 16, 2021, by and between Wesbanco Bank, Inc., Daniel K. Weiss, Jr. and Wesbanco, Inc. ** ated by refeff rence to Exhibit 10.2 of Form 8-K fiff led by Incorpor rr the Registrant with the Securities and Exchange Commission on December 17, 2021. 10.24 Employment Agreement, dated Februarr ryr 16, 2022, by and between Wesbanco Bank, Inc., Michael L. Perkins and Wesbanco, Inc. ** ated by refeff rence to Exhibit 10.1 of Form 8-K fiff led by rr Incorpor the Registrant with the Securities and Exchange Commission on Februarr ryr 22, 2022. 10.25 Employment Agreement, dated July 5, 2022, by and between Wesbanco Bank, Inc., Jeffff rff ey H. Jackson and Wesbanco, Inc. ** ated by refeff rence to Exhibit 10.1 of Form 8-K fiff led by rr Incorpor the Registrant with the Securities and Exchange Commission on July 5, 2022. 10.26 Change in Control Agreement, dated July 5, 2022, by and between Wesbanco Bank, Inc., Jeffff rff ey H. Jackson and Wesbanco, Inc. ** ated by refeff rence to Exhibit 10.2 of Form 8-K fiff led by Incorpor rr the Registrant with the Securities and Exchange Commission on July 5, 2022. 10.27 Amendment to Loan Documents between Wesbanco, Inc. and PNC Bank, National Association. 10.28 Amended and Restated Revolving Line of Credit Note between Wesbanco, Inc. and PNC Bank, National Association. ated by refeff rence to Exhibit 10.1 of Form 8-K fiff led by Incorpor rr the Registrant with the Securities and Exchange Commission on August 29, 2022. ated by refeff rence to Exhibit 10.2 of Form 8-K fiff led by Incorpor rr the Registrant with the Securities and Exchange Commission on August 29, 2022. 138 11 Computation of Earnings Per Common Share. Computation of earnings per common share is set forff Note 2, “Earnings Per Common Share” of this Annual Report on Form 10-K. th under 21 23 Signififf cant Subsidiaries of the Registrant. Consent of Independent Registered Public Accounting Firm, Ernst & Young LLP. 24 Power of Attorney. 31.1 Certififf cation of Chief Executive Offff iff cer of Periodic Report Pursuant to RulRR e 13a-15(e) or RulRR e 15d-15(e). 31.2 Certififf cation of Chief Financial Offff iff cer of Periodic Report Pursuant to RulRR e 13a-15(e) or RulRR e 15d-15(e). 32.1 Certififf cation Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbar nes-Oxley Act of 2002. * * * * * * 101.INS Inline XBRL Instance Document (the instance document does *** ar in the Interactive Data File because its XBRL tags are not appe a embedded within the Inline XBRL document). 101.SCH Inline XBRL Taxonomy Extension Schema Document 101.CAL Inline XBRL Taxonomy Extension Calculation Linkbase Document 101.DEF Inline XBRL Taxonomy Extension Defiff nition Linkbase Document 101.LAB Inline XBRL Taxonomy Extension Labea l Linkbase Document 101.PRE Inline XBRL Taxonomy Extension Presentation Linkbase Document *** *** *** *** *** 104 Cover Page Interactive Data File (forff matted as inline XBRL and *** contained in Exhibit 101). * Filed herewith ** Indicates management compensatoryrr plan, contract, or arrangement *** Filed electronically r Filed (P) Papea 139 Pursuant to the Requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, on Februarr ryr 27, 2023. SIGNATURES WESBANCO, INC. By: /s/ Todd F. Clossin Todd F. Clossin President and Chief Executive Offff iff cer Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the folff lowing persons on behalf of the registrant and in the capaa cities indicated, on Februarr ryr 27, 2023. By: By: By: /s/ Todd F. Clossin Todd F. Clossin President, Chief Executive Offff iff cer, and Director (Principal Executive Offff iff cer) /s/ Daniel K. Weiss, Jr. Daniel K. Weiss, Jr. Executive Vice President and Chief Financial Offff iff cer (Principal Financial and Accounting Offff iff cer) /s/ Christopher V. Criss Christopher V. Criss Chairman of the Board The Directors of Wesbanco (listed below) executed a power of attorney apa pointing Todd F. Clossin their attorney-in-faff ct, empowering him to sign this report on their behalf.ff Rosie Allen-Herring James W. Cornelsen Michael J. Crawfoff rd Abigail M. Feinknopf Robert J. Fitzsimmons Denise Knouse-Snyder D. Bruce Knox Lisa A. Knutson By: /s/ Todd F. Clossin Todd F. Clossin t Attorney-in-facff Gary L. Libs Jay T. McCamic F. Eric Nelson, Jr. Gregory S. Proctor, Jr. Joseph R. Robinson Kerry M. Stemler Reed J. Tanner 140 Stephen J. Lawrence Executive Vice President & Chief Internal Auditor Brent E. Richmond Executive Vice President- Treasury & Strategic Planning Rachel E. White Senior Vice President & Controller Linda M. Woodfin Secretary Reed J. Tanner, CPA (retired)* Former Member Suttle & Stalnaker PLLC Morgantown, WV DIRECTORS EMERITI Ernest S. Fragale James C. Gardill Richard G. Spencer * Executive Committee ** Directors of Wesbanco, Inc. also serve as Directors of Wesbanco Bank, Inc *** Retired effective 12/31/2022 WESBANCO, INC. OFFICERS & DIRECTORS OFFICERS Christopher V. Criss Chairman of the Board Todd F. Clossin President & Chief Executive Officer Daniel K. Weiss, Jr. Executive Vice President & Chief Financial Officer Jeffrey H. Jackson Senior Executive Vice President & Chief Operating Officer Michael L. Perkins Senior Executive Vice President & Chief Risk & Administrative Officer Group Head – Risk and Administration DIRECTORS ** Rosie Allen-Herring President & CEO United Way of the National Capital Area Washington, DC Todd F. Clossin* President & Chief Executive Officer Wesbanco, Inc. & Wesbanco Bank, Inc. Wheeling, WV James W. Cornelsen Mid-Atlantic Market Chairman, Retired Wesbanco Bank, Inc. Washington, DC Michael J. Crawford Senior Vice President Assured Partners of Kentucky Bellevue, KY Christopher V. Criss* President & Chief Executive Officer Atlas Towing Company Parkersburg, WV Abigail M. Feinknopf Marketing Representative Feinknopf Photography Columbus, OH Robert J. Fitzsimmons Attorney-at-Law Fitzsimmons Law Firm, PLLC Wheeling, WV Denise Knouse-Snyder* Attorney-at-Law Phillips, Gardill, Kaiser & Altmeyer PLLC Wheeling, WV Anthony F. Pietranton Senior Executive Vice President Group Head – Human Resources & Facilities Jayson M. Zatta Senior Executive Vice President & Chief Banking Officer Group Head – Banking & Trust Jonathan D. Dargusch*** Executive Vice President- Wealth Management Robert H. Friend Executive Vice President & Chief Credit Officer D. Bruce Knox Investor McArthur, OH Lisa A. Knutson Chief Operating Officer E. W. Scripps Company Cincinnati, OH Gary L. Libs* Chairman of the Board Libs Paving Co., Inc. Floyds Knobs, IN Jay T. McCamic Attorney-at-Law McCamic Law Firm Wheeling, WV F. Eric Nelson, Jr. President Nelson Enterprises, Inc. Charleston, WV Gregory S. Proctor Jr.* President & Chief Executive Officer G.S. Proctor & Associates, Inc. Upper Marlboro, MD Joseph R. Robinson Chief Executive Officer High Peaks Solutions, LLC Mason, OH Kerry M. Stemler President & Chief Executive Officer KM Stemler Co New Albany, IN CODE OF ETHICS Wesbanco has adopted a Code of Business Conduct and Ethics that applies to our directors, officers and employees, including the Company’s Chief Executive Officer, Chief Financial Officer, Chief Accounting Officer and other executive officers. Wesbanco’s “Code of Business Conduct and Ethics” can be found posted on our website at www.wesbanco.com in the “Investors” section under “Governance Documents”. Wesbanco intends to disclose any changes or amendments to this code of ethics on its website. WESBANCO EMAIL ALERTS Readers may subscribe to Wesbanco email alerts for company events, document filings, press releases, and Wesbanco’s nightly closing stock price in the “Investors” section of the Wesbanco website at www.wesbanco.com. EQUAL OPPORTUNITY EMPLOYER is an Equal Opportunity Wesbanco, Inc. Employer. SHAREHOLDER INFORMATION 2022 High Low Fourth quarter Third quarter Second quarter First quarter $41.37 36.91 35.40 38.37 $33.45 29.50 30.42 33.85 2021 Fourth quarter Third quarter Second quarter First quarter High Low $37.93 36.58 39.87 38.72 $32.00 30.21 34.72 28.65 Dividend Declared $0.350 0.340 0.340 0.340 Dividend Declared $0.330 0.330 0.330 0.330 STOCK REGISTRAR & TRANSFER AGENT First Class/Registered/Certified Mail Computershare Investor Services, LLC P.O. Box 43006 Providence, RI 02940-3006 Overnight Delivery Computershare Investor Services, LLC 150 Royall St., Suite 101 Canton, MA 02021 (888) 294-8217 or (781) 575-3120 (non-U.S.) www.computershare.com/investor STOCK TRADING Nasdaq Global Select Market Symbol: WSBC CORPORATE HEADQUARTERS 1 Bank Plaza, Wheeling, WV 26003 Phone: (304) 234-9000 www.wesbanco.com INVESTOR RELATIONS Contact: John Iannone Phone: 304-905-7021 MARKET MAKERS IN WESBANCO STOCK This list represents the top ten registered market makers by volume in 2022 excluding electronic trading networks: BofA Securities, Inc.; Morgan Stanley & Co., LLC; UBS Securities, LLC; Goldman, Sachs & Co., LLC; J.P. Morgan Securities, LLC; Citadel Securities LLC; Virtu Americas, LLC; Latour Trading, LLC; RBC Capital Markets, LLC and Wells Fargo Securities, LLC. AUTOMATIC DIVIDEND REINVESTMENT PLAN Shareholders may elect to reinvest their dividends in additional shares of Wesbanco common stock through the Computershare Dividend Reinvestment Plan. To arrange automatic purchase of shares with quarterly dividend proceeds, please contact Computershare Investor Services, LLC at the address, phone or email noted previously. ANNUAL MEETING The Annual Meeting of Shareholders will be held Wednesday, April 19, 2023 at 12:00 noon E.D.T. in a virtual format from the corporate headquarters. DIRECT DEPOSIT If you have a deposit relationship with Wesbanco, cash dividends can be deposited directly to your bank account. Dividends will be deposited on the date the dividend is payable, and you will receive a confirmation of payment when the dividend is deposited to your account. ANNUAL DISCLOSURE STATEMENT AND NOTICE OF FORM 10-K This Annual Report on Form 10-K serves as the annual disclosure statement as required by the FDIC. Upon written request of any shareholder, the Corporation will provide, without charge, a copy of its 2022 Annual Report on Form 10-K, including financial statements and schedules, as required to be filed with the Securities and Exchange Commission. To obtain a copy of Form 10-K, contact: John Iannone SVP, Investor & Public Relations Wesbanco, Inc. 1 Bank Plaza Wheeling, WV 26003 (304) 905-7021 The Form 10-K is also available electronically on Wesbanco’s website at www.wesbanco.com or at the SEC’s website at www.sec.gov. WESBANCO, INC. 1 BANK PLAZA WHEELING, WV 26003 www.wesbanco.com 

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