Defined Benefit Pension Plan— The Wesbanco, Inc. Defined Benefit Pension Plan (“the Plan”) established on January 1, 1985, is a non-contributory, defined benefit pension plan. The Plan covers all employees of Wesbanco and its subsidiaries who were hired on or before August 1, 2007 who satisfy minimum age and length of service requirements. Benefits of the Plan are generally based on years of service and the employee’s compensation during the last five years of employment. Contributions are intended to provide not only for benefits attributed to service to date, but also for those expected to be earned in the future. Wesbanco uses a December 31 measurement date for the Plan.

The benefit obligations and funded status of the Plan are as follows:


	December 31,
(dollars in thousands)	2023			2022
Accumulated benefit obligation at end of year	$	124,377		$	120,241
Change in projected benefit obligation:
Projected benefit obligation at beginning of year	$	127,127		$	163,919
Service cost		1,418			2,190
Interest cost		6,304			4,114
Actuarial loss (gain)		2,650			(36,981	)
Benefits paid		(6,425	)		(6,115	)
Projected benefit obligation at end of year	$	131,074		$	127,127
Change in fair value of plan assets:
Fair value of plan assets at beginning of year	$	166,906		$	202,783
Actual return on plan assets		22,396			(29,762	)
Employer contribution		—			—
Benefits paid		(6,425	)		(6,115	)
Fair value of plan assets at end of year	$	182,877		$	166,906
Amounts recognized in the statement of financial position:
Funded status	$	51,803		$	39,779
Net amounts recognized as receivable pension costs in the consolidated balance sheets	$	51,803		$	39,779
Amounts recognized in accumulated other comprehensive income consist of:
Unrecognized prior service credit	$	(124	)	$	(159	)
Unrecognized net loss		(2,947	)		6,548
Net amounts recognized in accumulated other comprehensive income (before tax)	$	(3,071	)	$	6,389
Weighted average assumptions used to determine benefit obligations:
Discount rate		5.04	%		5.23	%
Rate of compensation increase		3.78	%		3.84	%
Expected long-term return on assets		5.83	%		6.82	%

The components of and weighted-average assumptions used to determine net periodic benefit costs are as follows:


	For the Years Ended December 31,
(dollars in thousands)	2023			2022			2021
Components of net periodic benefit cost:
Service cost—benefits earned during year	$	1,418		$	2,190		$	2,500
Interest cost on projected benefit obligation		6,304			4,114			3,416
Expected return on plan assets		(11,154	)		(11,572	)		(11,207	)
Amortization of prior service credit		(34	)		(34	)		(34	)
Amortization of net loss		903			506			2,736
Net periodic pension income	$	(2,563	)	$	(4,796	)	$	(2,589	)
Other changes in plan assets and benefit obligations recognized in other comprehensive income:
Net loss (gain) for period	$	(8,592	)	$	4,353		$	(16,290	)
Prior service credit		—			—			—
Amortization of prior service credit		34			34			34
Amortization of net loss		(903	)		(505	)		(2,736	)
Total recognized in other comprehensive loss (income)	$	(9,461	)	$	3,882		$	(18,992	)
Total recognized in net periodic pension cost and other comprehensive income	$	(12,024	)	$	(914	)	$	(21,581	)
Weighted-average assumptions used to determine net periodic pension cost:
Discount rate		5.23	%		3.03	%		2.74	%
Rate of compensation increase		3.84	%		3.62	%		3.30	%
Expected long-term return on assets		6.82	%		5.74	%		6.11	%

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 benefits under the Plan.

The expected long-term rate of return for the Plan’s total assets is based on the expected return of each of the Plan asset categories, weighted based on the median of the target allocation for each class.

Pension Plan Investment Policy and Strategy— The investment policy as established by the Pension and Post-Retirement Plan Committee, to be followed by the Trustee, which is Wesbanco’s Trust and Investment Services department, is to invest assets based on the target allocations shown in the table below. Assets are reallocated periodically by the Trustee based on the ranges set forth 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 return without exposing Plan assets to undue risk, taking into account the Plan’s funding needs and benefit obligations. Assets are to be invested in a balanced portfolio composed primarily of equities, fixed income, alternative asset funds and cash or cash equivalent money market investments.

In 2021, the Committee adopted certain changes to the investment policy for the Defined Benefit Pension Plan that recognizes over time the return requirements and risk tolerance of the plan will change. Based on an assessment of the long-term goals and desired risk levels, the Committee approved the development of a glide path that adjusts the target allocations as the Plan’s funded status changes. Given the United States pension regulations and demographics of the Plan, a more risk averse investment approach is deemed appropriate to reduce the funded status volatility. Thus, modifications were made to the return seeking portfolio and the liability hedging portfolio as detailed in the plan. The revised Plan notes that return seeking assets generally consist of investments that focus on price appreciation with returns that, over the long term, are above the interest costs of the Plan. Thus, the policy set target allocations to return seeking assets and rebalanced the ranges for the same. Additionally, the investment policy statement was changed to note that liability hedging assets will be investment grade fixed income investments and are expected to generally behave like the Plan’s liabilities. Since these assets focus mainly on current income, their expected long-term returns will generally be lower than return seeking assets. The policy provides that based on the hedge path, the mix of short term, intermediate term, and long term fixed income holdings will vary. As a result, there will not be set target allocations and ranges for each maturity category, but rather to the hedge path target. Changes to the Plan’s holdings, as noted in the chart below, reflect the changes implemented pursuant to the change in the investment policy statement. At December 31, 2023 and 2022, the Plan’s equity securities included 55,300 shares of Wesbanco common stock with a fair market value of $1.7 million and $2.0 million, respectively.

The following table sets forth the Plan’s weighted-average asset allocations by asset category:


	Target
	Allocation	December 31,
	for 2023	2023			2022
Asset Category:
Equity securities	15-25%		30	%		50	%
Debt securities	75-85%		69	%		48	%
Cash and cash equivalents	0-5%		1	%		2	%
Total			100	%		100	%

The fair values of Wesbanco’s pension plan assets at December 31, 2023 and 2022, by asset category are as follows:


			December 31, 2023
			Fair Value Measurements Using:
(in thousands)	Assets at Fair Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Defined benefit pension plan assets:
Registered investment companies	$	31,642	$	31,642	$	—	$	—
Equity securities		32,363		32,363		—		—
Corporate debt securities		79,718		—		79,718		—
Municipal obligations		1,787		—		1,787		—
Residential mortgage-backed securities and collateralized mortgage obligations of government sponsored entities and agencies		35,977		—		35,977		—
Total defined benefit pension plan assets (1)	$	181,487	$	64,005	$	117,482	$	—

(1)

The defined benefit pension plan statement of net assets also includes cash, accrued interest and dividends, and due to/from brokers resulting in net assets available for benefits of $182.9 million.


			December 31, 2022
			Fair Value Measurements Using:
(in thousands)	Assets at Fair Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Defined benefit pension plan assets:
Registered investment companies	$	42,622	$	42,622	$	—	$	—
Equity securities		52,914		52,914		—		—
Corporate debt securities		58,342		—		58,342		—
Municipal obligations		1,764		—		1,764		—
Residential mortgage-backed securities and collateralized mortgage obligations of government sponsored entities and agencies		10,102		—		10,102		—
Total defined benefit pension plan assets (1)	$	165,744	$	95,536	$	70,208	$	—

(1)

The defined benefit pension plan statement of net assets also includes cash, accrued interest and dividends, and due to/from brokers resulting in net assets available for benefits of $166.9 million.

Registered investment companies and equity securities: Valued at the closing price reported on the active market on which the individual securities are traded.

Corporate debt securities, municipal obligations, and U.S. government sponsored entities and agency securities: Valued at fair value based on models that consider criteria such as dealer quotes, available trade data, issuer creditworthiness, market movements, sector news, and bond and swap yield curves.

Cash Flows— Wesbanco has no required minimum contribution to the Plan for 2024 and as of December 31, 2023 does not expect to make a voluntary contribution in 2024. Wesbanco did not make a contribution to the Plan in 2021, 2022 or 2023.

FFKT Postretirement Medical Benefit Plan— Wesbanco assumed FFKT’s postretirement medical benefit plan upon acquisition, which had a liability totaling $15.0 million at the acquisition date. The plan covers FFKT employees who were hired before January 1, 2016 and meet certain age and length of full-time service requirements. The plan was modified in August 2018, which reduced the number of eligible employees. The modification resulted in a $5.5 million unrealized gain, which was recorded in accumulated other comprehensive income, net of tax, and will be recognized over the life of the plan participants estimated to be approximately 17 years. Benefits provided under this plan are unfunded, and payments to the plan participants are made by Wesbanco.

The benefit obligation and funded status of the plan are as follows:


	December 31,
(dollars in thousands)	2023			2022
Change in projected benefit obligation:
Projected benefit obligation at beginning of year	$	7,119		$	11,245
Interest cost		332			266
Actuarial gain		(316	)		(3,881	)
Participant contributions		332			320
Benefits paid		(857	)		(831	)
Projected benefit obligation at end of year	$	6,610		$	7,119
Amounts recognized in the statement of financial position:
Funded status	$	6,610		$	7,119
Net amounts recognized as receivable pension costs in the consolidated balance sheets	$	6,610		$	7,119
Amounts recognized in accumulated other comprehensive income consist of:
Unrecognized net (gain) loss	$	(3,748	)	$	(3,676	)
Prior service cost		(2,119	)		(2,343	)
Net amounts recognized in accumulated other comprehensive income (before tax)	$	(5,867	)	$	(6,019	)
Weighted average assumptions used to determine benefit obligations:
Discount rate		5.01	%		5.20	%
Rate of compensation increase	NA			NA
Expected long-term return on assets	NA			NA

The components of and weighted-average assumptions used to determine net periodic benefit costs are as follows:


	For the Years Ended December 31,
(dollars in thousands)	2023			2022
Components of net periodic benefit cost:
Interest cost on projected benefit obligation	$	332		$	266
Amortization of prior service credit		(224	)		(224	)
Amortization of net loss		(245	)		43
Net periodic pension cost	$	(137	)	$	85
Other changes in plan benefit obligations recognized in other comprehensive income:
Prior service cost for period	$	—		$	—
Net gain for the period		(316	)		(3,881	)
Amortization of prior service credit		224			224
Amortization of net loss		245			(43	)
Total recognized in other comprehensive income	$	153		$	(3,700	)
Total recognized in net periodic pension cost and other comprehensive income	$	16		$	(3,615	)
Weighted-average assumptions used to determine net periodic pension cost:
Discount rate		4.93	%		5.10	%
Rate of compensation increase	NA			NA
Expected long-term return on assets	NA			NA

401(k) Plan — Wesbanco sponsors a 401(k) plan consisting of a contributory 401(k) profit sharing plan covering substantially all of its employees. Under the provisions of the 401(k) plan, Wesbanco matches a portion of eligible employee contributions based on rates established and approved by the Board of Directors. For each of the past three years, Wesbanco matched 100% of the first 3% and 50% of the next 2% of eligible employee contributions. Total expense for the 401(k) was $5.9 million, $5.5 million and $5.3 million in 2023, 2022 and 2021, respectively.

As of December 31, 2023, the 401(k) held 472,910 shares of Wesbanco common stock of which all shares were allocated to specific employee accounts. These shares relate in large part to the plan's prior inclusion of an employee stock ownership plan component. Dividends on shares are either distributed to employee accounts or paid in cash to the participant. Wesbanco had 65,270 and 165,438 shares registered on Form S-8 remaining for future issuance under the 401(k) plan at December 31, 2023 and 2022, respectively.

Incentive Bonus, Option and Restricted Stock Plan— The Incentive Bonus, Option and Restricted Stock Plan (the “Incentive Plan”), is a non-qualified plan that includes the following components: an Annual Bonus and a Long-Term Incentive, which included a Total Shareholder Return Plan, a Stock Option component, and a Restricted Stock component for certain key officers of the Company. The components allow for payments of cash, a mixture 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 performance goals or time-based vesting requirements. Performance goals or service vesting requirements are established by Wesbanco’s Compensation Committee. On April 22, 2021, Wesbanco registered an additional 2,000,000 shares of Wesbanco common stock for issuance under the Incentive Plan. Wesbanco had 1,069,689 and 1,468,140 shares registered on Form S-8 remaining for future issuance under equity compensation plans at December 31, 2023 and 2022, respectively.

Effective December 1, 2023, Wesbanco adopted a new incentive-based compensation recovery policy ("clawback policy") in reference to the requirements set forth in Listing Rule 5608 of the corporate governance rules of the NASDAQ Stock Market, and revoked the prior clawback policy that was in effect. Please refer to Exhibit 97 of this form 10-K for the full version of the clawback policy.

Compensation expense for key officers for the Annual Bonus was $4.4 million, $4.4 million and $3.5 million for 2023, 2022 and 2021, respectively.

On May 24, 2023, Wesbanco granted 154,600 stock options to selected participants, including certain named executive officers at an exercise price of $24.91 per share. The options granted in 2023 are service-based and vest in two equal installments on May 24, 2024 and December 31, 2024, and expire seven years from the date of grant.

Compensation expense for the stock option component of the Incentive Plan was $0.9 million, $1.1 million and $0.8 million for 2023, 2022 and 2021, respectively. At December 31, 2023, the total unrecognized compensation expense related to non-vested stock option grants totaled $0.4 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 from the original grant date; however, options granted in 2023 had a term of seven years.

The total intrinsic value of options exercised was $0.1 million and $1.0 million for the years ended December 31, 2023 and 2022, respectively. The cash received and related tax benefit realized from stock options exercised was $0.2 million and $20 thousand in 2023 and was $3.0 million and $0.3 million in 2022. Shares issued in connection with options exercised are issued from treasury shares acquired under Wesbanco’s share repurchase plans or from issuance of authorized but unissued shares, subject to prior SEC registration.

The fair 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 affect the fair value estimate. Additionally, there may be other factors that might otherwise have a significant effect on the value of stock options granted that are not considered by the model.

The following table sets forth the significant assumptions used in calculating the fair value of the grants:


	For the Years Ended December 31,
	2023			2022			2021
Weighted-average life	4.4 years			5.1 years			5.2 years
Risk-free interest rate		3.95	%		2.89	%		0.87	%
Dividend yield		5.50	%		4.15	%		3.32	%
Volatility factor		35.56	%		32.28	%		31.81	%
Fair value of the grants	$	5.27		$	6.91		$	7.75

The weighted-average life assumption is an estimate of the length of time that an employee might hold an option before option exercise, option expiration or employment termination. The weighted-average life assumption was developed using historical experience. Wesbanco used a weighted historical volatility of its common stock price over the weighted average life prior to each issuance as the volatility factor assumption, adjusted for abnormal volatility during certain periods, and current and future dividend payment expectations for the dividend assumption.

The following table shows the activity for the Stock Option component of the Incentive Plan:


	For the Year Ended December 31, 2023
	Number of Options			Weighted Average Exercise Price Per Share
Outstanding at beginning of the year		781,470		$	36.12
Granted during the year		154,600			24.91
Exercised during the year		(27,385	)		25.24
Forfeited or expired during the year		(86,200	)		36.91
Outstanding at end of the year		822,485		$	34.28
Exercisable at year end		669,985		$	36.42

The aggregate intrinsic value of the outstanding shares and the shares exercisable at year-end was $1.7 million and $0.8 million, respectively.

The following table shows the average remaining life of the stock options at December 31, 2023:


Year Issued	Exercisable at Year End		Exercise Price Range Per Share		Options Outstanding		Weighted Average Exercise Price		Weighted Avg. Remaining Contractual Life in Years
2014		1,881	$	21.37		1,881	$	21.37		0.16
2015		2,823		18.33		2,823		18.33		1.16
2016		3,764		22.63		3,764		22.63		2.15
2017		80,750		38.88		80,750		38.88		0.35
2018		135,642	36.97 to 45.65			135,642		43.28		2.23
2019		102,750		38.93		102,750		38.93		2.37
2020		67,500		21.55		67,500		21.55		3.40
2021		135,575		38.78		135,575		38.78		4.39
2022		139,300		32.30		139,300		32.30		5.38
2023		—		—		152,500		24.91		6.40
Total		669,985	$18.33 to $45.65			822,485	$	34.28		3.81

During 2023, Wesbanco granted 236,038 shares of time-based restricted stock to certain officers and directors, which cliff vest 36 months from the date of grant. The weighted average fair value of the restricted stock granted was $25.02 per share. The restricted stock grant provides the recipient with voting rights from 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 accrue from date of issuance of these shares.

Wesbanco also granted 37,224 shares of performance-based restricted stock ("PBRS") to select officers. These shares have a three-year performance period, beginning January 1, 2024, based on Wesbanco’s return on average assets and return on average tangible common equity measured for each year, compared to a national peer group of financial institutions with total assets between approximately $13.5 billion and $29.2 billion. Earned performance-based restricted shares are subject to additional service-based vesting with 50% vesting in May 2027 after the completion of the three-year performance period and the final 50% vesting in May 2028.

From the 2018 PBRS, 2,492 shares vested in May 2023. For the 2019 and 2020 PBRS, the third and second year reporting periods, respectively, achieved 85% of the performance goal measured at December 31, 2022, while the 2021 PBRS first year reporting period achieved approximately 75% of the performance goal measured at December 31, 2022. The Compensation Committee approved these goal achievements in May of 2023, and Wesbanco issued 4,550 time-based restricted shares to the select officers of the 2019 grant, which vest in equal installments in May 2023 and May 2024. For the 2020 PBRS awards, Wesbanco issued 8,584 shares to the select officers which vest in equal installments in May 2024 and May 2025. For the 2021 PBRS awards, Wesbanco issued 5,547 shares of time based restricted shares to the select officers which vest in equal installments in May 2025 and May 2026. On February 25, 2021, the Incentive Plan was amended to adjust the performance goal to 75% and approve a pro-rata award based on the achievement between 75% through 99%, as the award will be prorated to the percentage achieved.

Dividends accrue on the restricted shares once the performance 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 accrue upon achievement of the performance objective.

Compensation expense relating to all restricted stock was $5.9 million, $5.0 million and $5.6 million in 2023, 2022 and 2021, respectively. As of December 31, 2023, the total unrecognized compensation expense related to non-vested restricted stock grants totaled $9.3 million, with a weighted average expense recognition period of 1.6 years remaining.

The following table shows the activity for the Restricted Stock component of the Incentive Plan:


For the Year Ended December 31, 2023	Restricted Stock			Weighted Average Grant Date Fair Value Per Share
Non-vested at January 1, 2023		596,780		$	28.67
Granted during the year		273,262			25.01
Vested during the year		(206,274	)		23.39
Forfeited or expired during the year		(8,024	)		23.95
Dividend reinvestment		26,746			28.57
Non-vested at end of the year		682,490		$	28.85

On November 18, 2015, Wesbanco’s Compensation Committee adopted Administrative Rules for a Total Shareholder Return Plan (“TSRP”). The TSRP measures the TSR on Wesbanco common stock over a three-year measurement period relative to the return of an established peer group of publicly traded companies over the same performance 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 group. The number of shares to be earned 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 service-based and vest in three equal annual installments. Voting rights accrue at such time as well. Wesbanco granted 12,000 TSRP shares in 2023 for the performance period beginning January 1, 2023 and ending December 31, 2025 to certain executive officers. The fair 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 return over the measurement period beginning January 1, 2021 and ending December 31, 2023, Wesbanco stock performance measured at the 50th percentile when compared to peer calculations of shareholder return, which meets the target of the 50th percentile. Therefore, in the first quarter of 2024, approximately 12,000 shares relating to the 2021 TSR grant will be issued as service-based shares. These shares will vest in three installments of 4,000 shares in 2024, 2025 and 2026.

Compensation expense relating to the TSR plans was $0.3 million, $0.2 million and $0.4 million in 2023, 2022 and 2021, respectively. The grant date fair value of the 2023 TSR award was $33.47 per share. At December 31, 2023, the total unrecognized compensation expense related to non-vested TSR awards totaled $0.6 million with a weighted average expense recognition period of 2 years remaining.