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Banks (Finance)

Moody's Assigns Ratings to WesBanco, Inc. and WesBanco Bank, Inc.

Strategic Insights

— 2 min read

WesBanco, Inc., a Wheeling, WV-based banking company, has received first-time ratings from Moody's Investors Service. The ratings reflect the bank's strong credit quality track record, granular locally-sourced deposit base, and expanding profitability. However, the ratings also consider risks to creditors, including a high concentration in commercial real estate (CRE), modest deposit market shares across its footprint, and temporarily weakened capital ratios.

Key Takeaways:

  • WesBanco, Inc. and its lead bank subsidiary, WesBanco Bank, Inc., have been assigned a long- and short-term deposit rating of A3/Prime-2 and a long-term issuer rating of Baa3 by Moody's Investors Service.
  • The bank has a baa2 Baseline Credit Assessment (BCA), reflecting its good credit quality track record, granular deposit base, and expanding profitability.
  • WesBanco's asset risk is elevated due to a high concentration in CRE, which accounts for nearly 4x tangible common equity (TCE), while construction loans represent nearly 1x TCE.
  • Management plans to moderate CRE growth relative to other commercial segments, aiming to maintain a regulatory CRE concentration ratio below 300%, currently at 298.6%.
  • The bank's capitalization was temporarily weakened by the Premier acquisition in February 2025, but is expected to recover, with projected common equity Tier 1 ratio rising to the mid-10% range over the next 12-18 months.
  • WesBanco benefits from a strong legacy trust and wealth management business, which generates almost one-third of noninterest income, and a granular core deposit base that supports its funding profile.
  • The bank's liquidity is constrained by its encumbered securities portfolio, with cash and unpledged securities accounting for just 4.2% and 4.7% of total assets, respectively.
  • WesBanco's exposure to environmental and social risks is low and moderate, respectively, and it faces low governance risks overall, but with potential challenges related to its CRE concentration and strategic initiatives.

Statistics:

  • CRE exposures account for nearly 4x tangible common equity (TCE), while construction loans represent nearly 1x TCE as of 30 June 2025.
  • WesBanco's capitalization was temporarily weakened by the Premier acquisition, with a common equity Tier 1 ratio declining to 9.99% at the end of first-quarter 2025 from 12.07% at year-end 2024.
  • The bank's net income to tangible assets ratio was 95 basis points (bps) in 2022 and 2023, and 80 bps in 2024.
  • WesBanco's deposits are reasonably diversified by geography, with a strong position in West Virginia, where the bank ranks third.
  • Uninsured deposits were 32% of the total per regulatory disclosures, with the adjusted level falling to a modest 21% excluding fully collateralized public funds.
  • The bank's on-balance sheet liquid resources represented 16.7% of total banking assets as of 30 June 2025.

Sources:

  • Moody's Investors Service, "Ratings Methodologies," available at https://ratings.moodys.com/rmc-documents/432741.
  • Moody's Investors Service, "Rating Methodologies," available at https://ratings.moodys.com

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