KBRA Affirms Ratings for Wesbanco, Inc.

KBRA affirms the senior unsecured debt rating of BBB+, the subordinated debt rating of BBB, the preferred shares shares rating of BBB-, and the short-term debt rating of K2 for Wheeling, West Virginia-based Wesbanco, Inc. (NASDAQ: WSBC) (“Wesbanco” or “the company”). In addition, KBRA affirms the deposit and senior unsecured debt ratings of A-, the subordinated debt rating of BBB+, and the short-term deposit and debt ratings of K2 for the bank subsidiary, WesBanco Bank, Inc. The Outlook for all long-term ratings is Stable.

Key Credit Considerations

The ratings and Outlook reflect WSBC’s solid core profitability with ~1% average ROAA through various economic cycles, supported by strong credit performance and meaningful contributions from fee-generating lines of business. After a period of below-trend profitability in 2023-2024, organic NIM expansion has enhanced core profitability in recent periods, along with purchase accounting accretion, securities restructuring, and funding optimization from the company's recent acquisition of OH-based Premier Financial Corp. ("PFC"), which closed in February. These tailwinds support KBRA’s view that NIM improvement is likely to generate an ROAA above 1% on a sustained basis.

WSBC’s strong asset quality performance is supported by a granular loan portfolio, prudent underwriting policies, and an average annual NCO ratio of 0.05% over the past five years. While credit metrics have weakened modestly in recent periods, potential losses are well covered by reserves (1.19% LLR/Loans) and a 1.74% credit mark on acquired PFC loans.

The company’s funding profile is comprised primarily of highly granular, lower cost core deposits (85% of total funding) gathered across the branch footprint. Supported by a 25% contribution of NIB balances, WSBC’s cost of total deposits (1.84% during 2Q25) is lower than many peers. With loans to deposits of ~89% and ample cash and contingent liquidity sources, the company operates with a comfortable liquidity position.

Core capitalization declined with the close of the PFC transaction, inclusive of a $200 million equity raise in 3Q24, and metrics (7.6% TCE ratio, 9.9% CET1 ratio at 2Q25) are currently at the lower end of the peer range. However, WSBC has historically managed with ample capital buffers, and KBRA expects management to prioritize the rebuilding of core capital ratios toward the company’s typical operating range of 11.5%-12.5% CET1.

Rating Sensitivities

While a rating upgrade is not currently expected, materially higher levels of core profitability and core capitalization metrics could result in positive momentum if sustained over time. A downgrade is also not expected. However, negative earnings trends, a material deterioration in asset quality, or capital metrics sustained below similarly rated peers could pressure the ratings.

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