WSBC - NASDAQ

Good day, and welcome to the WesBanco Fourth Quarter 2025 Earnings Conference Call. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to John Iannone, Senior Vice President of Investor Relations. Please go ahead.

Good day, and welcome to the WesBanco Fourth Quarter 2025 Earnings Conference Call. Leading the call today are Jeff Jackson, President and Chief Executive Officer and Dan Weiss, Senior Executive Vice President and Chief Financial Officer. Today's call, an archive of which will be available on our website for 1 year, contains forward-looking information. Cautionary statements about this information and reconciliations of non-GAAP measures are included in our earnings-related materials issued yesterday afternoon as well as our other SEC filings and investor materials. These materials are available on the Investor Relations section of our website, wesbanco.com. All statements speak only as of January 28, 2026, and WesBanco undertakes no obligation to update them. I would now like to turn the call over to Jeff. Jeff?

Thanks, John, and good morning. On today's call, we will provide an overview on fourth quarter performance and provide our initial outlook for 2026. Key takeaways from the call today are: successful execution on our growth-oriented business model, while maintaining strong credit quality measures. Full year pretax provision earnings growth of 105% year-over-year and full year earnings per share of 45% to $3.40 when excluding merger-related charges. Loan growth fully funded by deposit growth, both year-over-year and quarter-over-quarter, helping to drive our fourth quarter net interest margin to $3.61. Continued focus on operational efficiencies and cost control, as demonstrated by our fourth quarter efficiency ratio of 52%. 2025 was another strong year for WesBanco and a clear demonstration that our growth-oriented business model continues to deliver results while maintaining disciplined credit and expense management. For the full year, we generated pretax pre-provision earnings growth of more than 100% year-over-year and earnings per share growth of 45% to $3.40 when excluding merger-related charges. Importantly, that performance was driven not by onetime actions, but by core strategic execution, including loan growth, fully funded by deposit growth, expanded net interest margin and continued efficiency gains. For the fourth quarter ending December 31, 2025, we reported net income, excluding merger and restructuring expenses available to common shareholders of $81 million and diluted earnings per share of $0.84, which increased 18% year-over-year. On a similar basis and excluding day 1 provision for credit losses, we reported full year net income of $309 million and diluted earnings per share of $3.40. Furthermore, the strength of our 2025 financial performance was reflected in our fourth quarter return on tangible common equity of 16%. Nonperforming assets to total assets of 0.33%. Our capital position remains solid with a CET1 ratio of 10.3%, giving us flexibility to support growth and navigate the operating environment ahead. We also achieved several strategic milestones in 2025. Chief among those was a successful acquisition and integration of Premier Financial, transforming WesBanco into a $28 billion asset regional financial services partner. With this historic acquisition, we now rank among the top 50 publicly traded U.S. financial institutions based on assets. At the same time, we continue to invest in organic growth. expanding into new markets through the opening of loan production offices in Northern Virginia and Knoxville, launching our new health care vertical and optimizing our financial center network and digital banking capabilities, to support evolving customer preferences, and we will soon be celebrating the opening of a new financial center in Chattanooga, our first in Tennessee. Underlying all of this is the consistent focus on relationship banking that sets us apart from others. That approach drove record treasury management revenue of $6 million and a record total wealth management assets under management of $10.4 billion. Turning to operational topics. Disciplined execution remains the theme. Our dedicated teams, supported by continued strong customer satisfaction drove deposit growth that fully funded loan growth both year-over-year and quarter-over-quarter. Our third quarter deposit campaign delivered strong second half results with total deposits increasing 5% annualized or more than 6% for core deposit categories as we strategically allowed higher cost certificates of deposits to run off. We have continued to see a significant pickup in commercial real estate project payoffs, which totaled $415 million during the fourth quarter and over $900 million for the year, $100 million more than we had anticipated last quarter as developers continue to take advantage of the current operating environment for permanent financing or sale of properties. This increase in payoffs created a 4% headwind to loan growth for both the year-over-year and quarter-over-quarter comparisons. Despite these elevated payoffs, we delivered solid fourth quarter organic loan growth as total loans increased 6% annualized from the third quarter and 5% year-over-year, driven by our commercial teams converting pipeline opportunities. Since year-end 2021, we have achieved a strong compound annual loan growth rate of 9% without sacrificing credit quality as our key measures have remained consistent the last several years and favorable to the average of all banks with assets between $20 billion and $50 billion. As of both year-end and mid-January, our commercial loan pipeline stood at over $1.2 billion, with more than 40% tied to new markets and loan production offices. Despite anticipated elevated CRE payoffs through the at least first half of the year, we continue to expect mid-single-digit year-over-year loan growth during 2026, given the current loan pipeline and the strength of our markets. During the fourth quarter, our new health care vertical team refinanced a major skilled nursing provider in Virginia, serving as the lead bank in the syndication and sole lender for the working capital line of credit. This new relationship includes all operating reserve and payroll accounts for their properties as well as a 6-figure treasury management fee relationship. This win highlights the momentum of our health care vertical and the cross-team collaboration that helps us deepen relationships and deliver exceptional service. Before turning the call over to Dan to walk through the financials and outlook, I want to recognize our team members for their exceptional execution throughout the year. Their efforts were reflected not only in our results, but also in national recognition we continue to receive for soundless stability workplace culture and trust. Dan, I'll turn it over to you.

Yes. Thanks, Jeff, and good morning. For the fourth quarter, we reported GAAP net income available to common shareholders of $78 million or $0.81 per share. And when excluding restructuring and merger-related expenses, fourth quarter net income was $81 million or $0.84 per share. On a similar basis, when excluding the day 1 provision for credit losses on acquired loans, we reported $3.40 per share for the year as compared to $2.34 last year, representing an increase of 111% from the prior year. To highlight a few of the fourth quarter accomplishments, we generated strong year-over-year pretax pre-provision core earnings growth of 90%. We funded strong loan growth with deposits, improved the net interest margin to 3.61% and reduce the efficiency ratio to just under 52%. Our balance sheet reflects the benefits of both the premier acquired balance sheet and organic growth. Total assets of $27.7 billion increased 48% year-over-year and included total portfolio loans of $19.2 billion and total securities of $4.5 billion. Total portfolio loans increased 52% year-over-year due to the acquired PFC loans of $5.9 billion and organic growth of more than $650 million, driven by commercial teams across our footprint. Commercial real estate payoffs increased more than anticipated during the fourth quarter and totaled $905 million for the year, roughly $100 million more than we anticipated on our third quarter earnings call and 2.5x last year's level. Despite this headwind, though, we delivered solid organic loan growth for both the quarter and the year. We anticipate CRE payoffs to remain elevated during 2026 and currently estimate them to be between $600 million and $800 million for the year, but weighted more towards the first half. Deposits increased 53% year-over-year to $21.7 billion due to acquired PFC deposits of $6.9 billion and organic growth of $662 million which fully funded our loan growth. On a sequential quarter basis, total deposits increased $385 million due to the efforts of our consumer and business teams during the recent deposit campaign which more than offset the intentional runoff of $55 million of higher cost certificates of deposit and the pay down of $50 million in broker deposits. Turning to capital. Credit quality continues to remain stable as key metrics have remained low from a historical perspective and within a consistent range throughout the last 5 years. As expected, our criticized and classified loans continued to decrease during the fourth quarter to 3.15% and net charge-offs declined to just 6 basis points of total loans. The allowance for credit losses to total portfolio loans was 1.14% of total loans or $219 million consistent with the third quarter as increases related to loan growth were mostly offset by macroeconomic factors and reductions in qualitative factors. The fourth quarter margin of 3.61% improved 58 basis points on a year-over-year basis through a combination of higher loan and security yields and lower funding costs. The margin increased 8 basis points from the third quarter, which was above last quarter's guide of 3 to 5 basis points of improvement, primarily due to exceptional deposit growth which allowed us to replace higher-cost Federal Home Loan Bank borrowings with lower cost core deposits. Total deposit funding costs, including noninterest-bearing deposits declined 13 basis points year-over-year and 8 basis points quarter-over-quarter to 184 basis points. For the fourth quarter, noninterest income of $43.3 million increased 19% year-over-year due primarily to the acquisition of Premier and for the year, we reported record noninterest income of $167 million, once again, due to the acquisition of Premier and organic growth, including strong treasury management revenue. We again saw a nice improvement in gross swap fees, which increased $2.1 million year-over-year to $3.4 million in the fourth quarter and doubled to $10 million for the full year reflecting both the interest rate environment and traction within our newest markets. Trust fees were also at record levels for both the fourth quarter and the year. Noninterest expense, excluding restructuring and merger-related costs for the fourth quarter of 2025 was $144.4 million, an increase of 44% year-over-year due to the addition of Premier's expense base, higher core deposit intangible asset amortization that was created from the acquisition and higher FDIC insurance expense due to our larger asset size. On a similar basis, operating expenses were down slightly from the third quarter reflecting our focus on managing discretionary expenses. As I mentioned, our fourth quarter efficiency ratio came in just below 52%. I'd like to highlight here that we have updated our methodology for calculating our efficiency ratio to exclude both net security gains or losses from the denominator and amortization of intangibles from the numerator. This update makes our ratio more consistent with how our peers and other organizations calculate efficiency ratio and the ratios for all periods reported in our fourth quarter earnings release reflect this change and a reconciliation can be found in the non-GAAP measures section of the release. Turning to capital. During the fourth quarter, we redeemed $150 million of our outstanding Series A preferred stock on November 15 and $50 million of sub debt acquired from Premier on December 30, using the proceeds from our Series B preferred stock offering. As noted in yesterday's earnings release, preferred dividends reduced earnings available to common shareholders by $13 million, which represented the overlapping quarterly dividends on both the Series A and Series B preferred stock as well as the Series A redemption premium. Our CET1 ratio as of December 31 improved 24 basis points to 10.34% and we anticipated to build 15 to 20 basis points per quarter on a go-forward basis. Turning to our outlook for 2026. We are currently modeling two 25 basis point Fed rate cuts in April and July. Reflecting our exceptional fourth quarter deposit growth, which accelerated margin expansion, we anticipate our first quarter net interest margin to be roughly consistent with our fourth quarter margin of 3.61% and then increase 3 to 5 basis points in the second quarter and then modestly grow into the high 3.60% range in the back half of the year. This assumes, among other things, that loan growth is fully funded by deposits and a slightly steeper yield curve. Generally speaking, we modeled first quarter fee income overall to be consistent with the fourth quarter. Trust fees should benefit modestly from organic growth and influenced by equity and fixed income market trends. And as a reminder, first quarter trust fees are seasonally higher due to tax preparation fees. Securities brokerage revenue is anticipated to grow slightly from the range of the last few quarters due to modest organic growth. Mortgage banking should grow modestly over 2025 beginning in the spring, driven by improved market conditions and recent hiring initiatives and total treasury management revenues should see increases from 2025 as the compounding effect of our services continue to expand. Gross commercial swap fee income, excluding market adjustments, should be in the $7 million to $10 million range. Fully debt benefit income added $700,000 to the fourth quarter, which is not expected to repeat during 2026. And similarly, the fourth quarter loss on the sale of assets is not expected to repeat. We remain focused on delivering disciplined expense management to drive positive operating leverage and we will continue our efforts throughout 2026. As previously disclosed, we successfully closed 27 financial centers on January 23rd and the anticipated annual savings of approximately $6 million will begin to be realized midway through the first quarter of 2026 hoping to offset the impact of inflation. Occupancy expense should be flat to slightly down as compared to 2025 due to branch optimization efforts, while equipment and software expenses are expected to increase somewhat as compared to $25 million as we continue to invest in products, services and technology to improve the customer experience and drive revenue growth. Marketing is expected to increase approximately $800,000 per quarter due to targeting new customers, general campaigns to increase brand awareness in our newer markets and deepen relationships with existing customers with a focus on deposit gathering campaigns. Based on what we know today, we expect our expense run rate during the first quarter to be roughly consistent with the fourth quarter increase in the second quarter from midyear merit increases, revenue-producing hires and marketing initiatives and then grow modestly in the back half of the year from the full effect of annual merit increases and investment initiatives in revenue-enhancing technology. The provision for credit losses will depend upon changes to the macroeconomic forecast and qualitative factors as well as various credit quality metrics, including potential charge-offs, criticized and classified loan balances delinquencies, changes in prepayment speeds and future loan growth. Beginning with the first quarter of 2026, the dividends on our Series B preferred stock will be $4.24 million per quarter. And lastly, we currently anticipate our full year effective tax rate to be between 20.5% and 21.5%, which is slightly higher than 2025 due to a lower percentage of tax-exempt income to total income. And so overall, we were pleased with our growth during 2025 and excited about the opportunities in 2026 as we continue to execute growth initiatives to deliver shareholder value. Operator, we're now ready to take the questions. Would you please review the instructions?

[Operator Instructions] Our first question comes from Daniel Tamayo with Raymond James.

Yes. Maybe just to start off, Jeff, on the loan growth expectation and the payoffs expectation embedded in that. I guess if you're thinking about the -- I think you said $600 million to $800 million in '26 weighted to the first half of the year. I'm assuming that implies kind of a step down from the fourth quarter number, which was really elevated to $415 million. But maybe just walk us through how you're thinking about the pace of payoffs through the year? And what's driving that assumption in your modeling?

Yes, sure. So obviously, we had a tremendous amount of payoffs last year. We do think some of that will continue, especially in the first half of the year. What we've been seeing, as we've mentioned, is large CRE payoffs, whether they're selling or whether they're refinancing to the permanent market. The pipelines continue to remain really strong. So I think that will be an offset to the payoffs. But if you think about looking back when people refinanced projects when rates were much lower prior to rates getting elevated. Normally, we would do a construction loan and then it would become stabilized and then it would typically roll off our and all banks' balance sheets. I think what you had was because rates elevated and went up so quickly, these loans stayed on ours and other banks' balance sheets for a lot longer period of time. Now that you've seen rates slightly come down and permanent marketing is really opening up we've seen these elevated payoffs. We're no different than, I think, many other banks who do a lot of CRE. But as far as this year, we do believe, just based on our current forecast and talking to customers that it should slowed down, especially compared to fourth quarter. And with putting that together along with our pipelines continuing to remain incredibly strong on top of just the other opportunities we have, with the LPOs and health care, and I can get into that more later. But that's why we feel like loan growth should be in the mid single digits. And depending on how the back half of the year goes, could be even better.

That's great. And you actually took my next question or you started to, which is perfect. Maybe you can give us some more details on that health care vertical.

Yes. Yes. It was a tremendous lift for us last year. The team, I believe, did around $500 million in new loans. We had a tremendous amount of deposits and fees. I believe they accounted for about $3 million of the swap fees that we did last year as well. So we feel like that will be one of the main growth engines of us for this year and feel like that is a great offset to many of the CRE payoffs that we should see in the first quarter even. Also kind of following up with the LPOs, those are really going well. Also, Chattanooga, Knoxville, Northern Virginia has really started to take off. And we're really continuing to look at other cities. I've mentioned Richmond before, but also looking at Atlanta and maybe even other southeastern cities as we move forward. We really kind of feel like we perfected the LPO strategy. And we're seeing it in our results, we're seeing it in our pipelines, and we're going to continue doing that, I would say, the rest of this year.

Our next question comes from Russell Gunther with Stephens.

I wanted to start on the expense guide. I appreciate the color there. It sounds like you're going to be flat in 1Q, step up a bit in 2Q. We had the branch closures kind of early in the quarter. So fair to say that that's all captured in this guide, the full savings from that. And then you guys tend to evaluate the branch network on an annual basis, typically in the back half of the year. Is that something that you would look to do again this year? And is any of that reflected in your 2026 commentary, Dan?

Yes, I'll take the branch piece. Absolutely. So as you know, we always evaluate the branch network, just throwing out that since 2019, we've closed about 93 branches. So I would anticipate us to continue to evaluate that. It is not in any of these numbers, just to be clear. But yes, I think it's safe to say we will definitely evaluate it, and that would be potential addition to reduce our expenses at some point in time this year.

Okay. Excellent. And then just a follow-up question or second question for me, switching gears to the margin outlook. Maybe, Dan, if you could just address the puts and takes behind the cadence of the NIM, flat in the coming quarter, a nice step up 2Q and then the moderation. What's sort of underpinning your expectations for that glide path?

Yes. Sure, Russell. I think first, what I would say is if you think about the guidance that we've been providing 3 to 5 basis points of margin improvement per quarter. What we really saw here, and I mentioned this in the prepared commentary, in the fourth quarter was just extraordinary growth in deposits, particularly noninterest-bearing. And that deposit growth occurred pretty early in the fourth quarter and was at time $500 million plus intra-quarter. And so we were able to pay down Federal Home Loan Bank borrowings during a good maturity of the quarter, which kind of provided a really nice lift to margin. So that's how we kind of picked up 8 basis points of margin improvement or expansion over the third quarter versus kind of that 3% to 5% that we were projecting. But what I would say is we really kind of effectively pulled forward, I would say, the next 3 to 5 basis points that would have otherwise been projected for the first quarter into the fourth quarter, and that's how we get kind of a flatter margin just on a linked quarter basis when we look towards the first quarter. I would also tell you, typically, we see deposit flows like outflows in the early half or the first half, really the first quarter. And we've seen those. And so that's another like kind of what we see as like a headwind, something that normally would -- if it's very normal from history. But at the same time, whenever you've got as much deposit growth as we had intra-quarter throughout the fourth quarter and then kind of some of those deposits pulling back some for the first half of the first quarter, that also kind of -- you're borrowing for the Federal Home Loan Bank at 4% instead of holding noninterest-bearing assets or liabilities that are funding at 2%. So I think that's really what is driving for the most part, that flattish margin compared to the first quarter. But then whenever we look forward into the second quarter, kind of 3 to 5 basis points is what we're guiding to, recognizing once again kind of the benefit -- of the continued benefit and the grind of loan and security repricing, loan growth, et cetera. We continue to see and expect to see reduction in cost of funds. We'll continue to see quick kind of downward repricing of our short-term Federal Home Loan Bank borrowings. Of our $1.2 billion, $1.1 billion is kind of 6 weeks or less. And so that -- all of this kind of will help drive that margin improvement. It's happening in the background in the first quarter as well. It's just not as apparent. The other piece I would just say is that the CD book will continue to reprice, particularly it becomes more evident in the second quarter. We have about $2.1 billion in CDs that are going to be repricing here in the next 2 quarters. About $1 billion is repricing here in the first quarter from kind of 3.75% downward 25 to 50 basis points and then another $1.1 billion in the second quarter. And really, the repricing of CDs here in the first quarter from that 3.75% down into the, say, 3.25% range is where we also see some nice lift in terms of margin as we're going to continue to see funding cost accelerate downward relative to the reduction in loan yields. So I think that's kind of how we look at it. And then again, that continued grind into the back half of the year gets us as we model today, somewhere in the high 360s.

Our next question comes from Manuel Navas with Piper Sandler. Could you just speak to.

Could you just speak to within the NIM, if there's a little bit of back book repricing that is helping on the loan yields? I know that the floating rates will come down a bit. And also, what are kind of new loan yields coming in at? Just trying to get some more on the asset side dynamics in the NIM...

Yes, sure. So we do have about $400 million of loans -- fixed rate loans that will be repricing over the next 12 months off of -- with a weighted average rate of about 4.5%. And so I would anticipate those to be replaced or refinanced, et cetera, somewhere in that like low 6%, high 5% range. I would tell you that if you look at within the presentation, you can see that the weighted average yield on new loans originated in the fourth quarter was right around 6.15%. I would tell you the spot rate for the month of December was just above 6% to kind of 6.01%, 6.02%. So that's kind of where we're at and what we're projecting more or less here for the first quarter. The other thing I'll mention is just if we think about margin benefit longer term is the securities book continues to reprice as well. So we've got about $250 million of cash flows kicking off of that securities portfolio. Those yields are about 3.3%. And right now, we're investing at about 4.7% roughly. So picking up between 125 and 150 basis points in yield on $250 million of cash flows coming in.

Is that $250 million per quarter?

Per quarter.

Yes. Okay. And then shifting over to capital for a moment. I appreciate the commentary. Just shifting over to capital. As you build and TCE has gotten over 8%, CET1 is at 10.3%. Can you discuss your kind of capital deployment priorities, growth, but also just kind of where would M&A or buybacks fit in?

Yes, sure. First, we'd start with the dividends, obviously committed to the dividend. Then we would go to loan growth and making sure we can obviously fund the loan growth with our strong capital levels. Then I would put in buybacks. We've talked about our targets being 10.5% to 11% CET1 around those ranges, we would look to buy back. And then I would put M&A at distant fourth. Right now, there -- we don't see that happening this year. We're really focused on the first 3. And specifically, when it looks at growth, obviously, we have a lot of opportunities, but we are also seeing really tremendous opportunities to acquire bankers and talented individuals to come on our team. But those would be the capital priorities. Glad to dig into any of the 4. But once again, dividends, growth, buybacks and then fare distant M&A.

Yes. And I would just add on to that, that we're growing CET1 right now at about 15 to 20 basis points a quarter. So the print that we had for the fourth quarter, 10.34% CET1, that pretty comfortably gets us over that 10.5% by the end of the second quarter. And so that does offer, as Jeff said, some flexibility there as we think about where organic growth is relative to, say, maybe beginning to explore buyback to the extent that growth opportunities are slower.

Our next question comes from Catherine Mealor with KBW.

One follow-up on the margin, and I apologize if I missed this, but any indication on just what you're expecting for the cadence of fair value accretion over 2026?

Yes. So I would say, I believe we had about 27 basis points of accretion here in the fourth quarter. And we were modeling about 25 basis points for the first quarter. And then as I've said in the past, it kind of -- it's a basis point or 2 per quarter, and it runs off over the next 6 years.

Okay. Great. That's helpful. And then the reduction in borrowings was great to see this quarter. How should we kind of think about the size of the balance sheet outside of loans and deposits kind of maybe growth in the bond book relative to what we should see from your borrowing base over the course of '26?

Sure, yes. So we're going to keep that bond book right around that, call it, 15% to 17% of total assets, it's 16% and we -- that's kind of where we feel is the sweet spot to maintain a nice level of liquidity, but also make sure that we're generating as much return on equity as possible through the higher-yielding loan book.

Okay. Great. And then maybe if I could slip one more in on just kind of big picture profitability. It feels like we've got some nice operating leverage coming into '26 6 with the revenue growth the NIM expansion and then growth in fees and your balance sheet, which kind of feels like more -- of a more stable expense base. Are there any kind of profitability target that you would look to as we move through '26?

Yes. I mean I would say at a high level, what we've continued to talk about is kind of that ROA being right around that [ 130% ] mark, average tangible common equity somewhere in the high teens. And so that's kind of what I would tell you, what we expect and what we're modeling.

Our next question comes from Karl Shepard with RBC Capital Markets.

My line cut out a little bit, so I apologize if you covered this. But just on the margin again, so the 3 to 5 basis points, are you saying that sort of burns out as we get later in the year and then maybe that high 3.60% range is kind of appropriate way to think about longer term without giving guidance for '27 or anything like that?

Yes, Karl. I would say '27 is a long way away, and it's probably -- it could be difficult to even project the back half of '26. But what we can see, and like I said, in the nearer term, is that continued 3 to 5 basis points of benefit in 2Q. Where it goes in the back half of the year is really going to be dependent on a number of things, including loan pricing, loan competition, deposit pricing, deposit competition, how well we're able to fund our loan growth with deposits and what the cost of those deposits are. So I think all of those things kind of play into the calculus here. So what we can -- we do -- we can see though that the back book, the assets are repricing upward, and that grind continues -- will continue to benefit margin. And like I said, we feel pretty comfortable based on everything we know today that we can get into that high 360s in that back half of the year.

Okay. That's helpful. And then, I guess, maybe more of a strategic question. So the LPO strategy has been out there for a few years now. You're adding a financial center in Chattanooga. Can you just maybe talk about how these things mature and get to where you want to be and then just opportunity to continue to do new LPOs or, I guess, strengthen some of those markets with additional talent? Just kind of big picture, how you're thinking about that, Jeff?

Yes, sure. Very excited about the LPOs. So Chattanooga, we should open the first branch in Tennessee. We're anticipating in April. That group has done in over $0.5 billion in loans and has done really great job with full relationships, just to be clear, some deposits and different things, treasury fees, swap fees, et cetera. So what we typically look at is depends on the mass of the team we bring on, the size of the assets and those things. So my goal would be to continue to grow Knoxville in that similar range, add a branch there. Nashville, we're looking to add to that team, but we'll also be looking to add a branch once they get around that $0.5 billion. And then as it relates to future LPOs, once again, that is what we're really focused on this year. We are seeing a tremendous amount of opportunity based on the other M&A going on or leadership changes, et cetera. And so I think that's what you'll be seeing us do this year, expanding in other markets. But most likely, we would start with the LPO offices get a little bit of a loan balances, fee businesses going and then look to at a branch. Obviously, if we took on a much larger team potentially, then we would depending on where it would be, we could add a branch immediately. Obviously, funding for these LPOs is really critical. And having a single branch in those markets, we feel like it gives us a great advantage to add more funding when we start up these LPOs. But once again, I can't tell you what tremendous opportunities we have in some of these markets in the Southeast. And I think you'll be hearing more about that from us in future quarters.

Our next question comes from Dave Bishop with Hovde Group.

Jeff, you noted the loan pipeline holding up pretty nicely here. Now you're getting traction from the new production offices and the LTOs. Just curious, and you may not have this number here, but Jeff, any line of sight maybe into the deposit pipeline into the first half of the year, first quarter of the year and maybe what spot deposit costs were exiting the quarter?

Yes, I'll comment on the pipe and I'll let Dan talk about the cost. But yes, they're still pretty strong. Once again, as Dan mentioned, we kind of go back and look over the last several years. Seasonally, January usually is a down month for us in deposits, but then February builds back up. And usually, we finished with some nice growth at the end of March. So I would say the deposit pipeline still is very good. And for us, we're always looking to bring in full relationships and then our retail employees are doing a great job driving home those deposits as well. So I would imagine that we should still show pretty good growth this year in deposits based on everything I'm seeing.

I would just add spot deposit rates at least for the month of December relative to the full quarter's average. Full quarter average is right around 2.45%, December 2.38%, so down about 7 basis points relatively speaking.

Got it. Appreciate that color. Then Jeff, maybe a follow-up. You talked about -- I appreciate the color on the new loan offices, especially in Tennessee and Northern Virginia. Are the types of loans you're seeing in those markets different than some of your core legacy markets, size, types of borrowers and such, especially in Northern Virginia, which is a big GovCon market. Just maybe speak to maybe the types of loans you're doing and size relative to the legacy market?

Yes, sure. Great question. They're pretty similar, to be honest. Once again, we have not changed our credit culture, any policies at all. So we're seeing some CRE, a lot of C&I, some health care. We did a big health care deal in Virginia. But yes, GovCon is part of Northern Virginia and D.C. area, but I can't really say we've done almost none of that. It's really been more CRE, C&I, health care, just similar things that we're doing in all our markets. The great thing that really helps our LPO strategy is we take our existing kind of credit culture and just get great talented bankers in all these markets that can operate within what we like to do, and it's working extremely well.

Our final question today comes from Manuel Navas with Piper Sandler.

I just wanted to follow up on the fee initiatives and the commercial lending team. You brought up the $6 million in treasury management. Swaps are doing well. And just kind of go into those in a little bit more detail in terms of what could be the growth next year? And what is the uptake in the Premier team using your fee products as well?

Yes. No, we're very excited about that. So I can tell you that 1.5 years ago, just starting with our treasury management fees, let me take you back a couple of years ago. So I believe in '23, we did about $2 million in treasury management fees. 2024, we did about $4 million. And then last year, we topped $6 million. I think that can continue to grow double digits this year. from a percentage perspective, if you just look at our purchase card, we basically had 5 customers back in, I believe, March of last year. Today, I believe we've got over about 130 customers with about another 45 in the pipeline. We've gone from, call it, $100,000 a month in spend to I believe we've topped $7 million a month in spend, and we think we can get it up to $10 million plus this year, as it relates to the purchase card -- commercial purchase card, multi-card. Then as it relates to swaps, I do believe we were around $9 million in just gross production last year. I think that could easily grow a good amount this year as well to be above $10 million plus depending on how the year goes and what interest rates do. So I think there is some tailwinds in both those fee businesses along with our wealth business, too. We just topped over $10 billion in assets under management when you combine our trust and securities business. So we feel like that's really going to be another driver for our profitability this year, and we could see some tremendous growth.

This concludes our question-and-answer session. I would like to turn the conference back over to Jeff Jackson for any closing remarks.

Thank you. 2025 was another year of disciplined growth and strong execution for WesBanco. We strengthened our financial metrics, advanced our strategic priorities and position the company well to continue delivering value for our customers and our shareholders. Thank you for joining us today, and we look forward to speaking with you at one of our upcoming investor events. Have a great week.