Operator: Good afternoon, and welcome to the WesBanco Inc's Q3 2026 earnings conference call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing star then zero on your telephone keypad. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your telephone keypad. To withdraw your question, please press star then two. 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.
John Iannone: Thank you. Good afternoon, and welcome to WesBanco Inc's Q3 2026 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 one 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 22 October 2026, and WesBanco undertakes no obligation to update them. I would now like to turn the call over to Jeff. Jeff?
Jeff Jackson: Thanks, John, and good afternoon, everyone. Today, we will review our Q3 performance and share our current outlook for Q4. Our Q3 results demonstrate continued momentum across our franchise, particularly in three areas. We delivered strong sequential quarter and year-over-year loan growth. We saw accelerating growth in our targeted expansion markets. We drove solid profitability through disciplined execution and positive operating leverage. Turning to our financial performance, our Q3 results reflect the continued strength of WesBanco's disciplined growth strategy and relationship-focused banking model. For the quarter ending 30 September 2026, we reported net income available to common shareholders of $86 million, excluding merger and restructuring charges, or $0.89 per share. Our year-to-date results demonstrate how disciplined growth and improving operating leverage are translating into stronger profitability.
Jeff Jackson: Adjusted earnings per share increased nearly 7% to $2.72, while our return on average tangible common equity remained nearly 17%. We also improved return on average assets to 1.3% and lowered our efficiency ratio to 52%. Our capital position also remains solid with a CET1 ratio of 10.6%, which continues to provide flexibility to support our growth expectations. The defining driver of our momentum this quarter was once again strong loan growth. Total loans increased 5.1% year-over-year and 8.7% annualized sequentially as our teams converted pipeline opportunities across our footprint. C&I growth was particularly strong, increasing 11% year-over-year and 16% quarter-over-quarter annualized. Through the first nine months of the year, our commercial teams generated record loan production of nearly $4 billion, a 70% increase from prior year period.
Jeff Jackson: As we mentioned last quarter, we expected developers to continue to seek permanent financing and the sale of properties during Q3, but at a slower pace than H1 of the year. However, we experienced another sequential quarter increase as CRE payoffs totaled approximately $370 million during Q3, which caused nearly a 1% headwind to loan growth and a $1 billion headwind over the past 12 months. Despite that headwind, we generated $1 billion of net organic loan growth over the past year, demonstrating the soundness of our strategy and strength of our teams and our markets. A recent mid-Atlantic win illustrates how our relationship-focused model is contributing to this momentum. A cross-functional team developed a relationship with a prominently family-owned business in the Baltimore region and ultimately secured an eight-figure commercial loan, a seven-figure deposit relationship, and treasury management services.
Jeff Jackson: More importantly, it positions us to compete for the company's broader banking relationship. This is a great example of how collaboration across our teams can turn individual relationships into meaningful multi-product opportunities. Reflecting our team's ability to successfully convert loan opportunities, our commercial pipeline was $1.8 billion as of 30 September. With half of this from our loan production offices and former Premier markets. The pipeline has remained stable in the few weeks since the quarter end, giving us confidence in our ability to outpace CRE payoffs and deliver on our outlook of mid-single-digit loan growth in 2026. We remain excited about the opportunities in our targeted expansion markets of Florida and Tennessee as our new teams have hit the ground running. Since launching in Q2, our Florida team has developed $300 million in new loan relationships and a similar size pipeline.
Jeff Jackson: While the early majority of closed loans are CRE and owner-occupied related, nearly a third of the C&I across the various industries like healthcare, wholesale, and transportation. We are encouraged by the breadth of diversified opportunities we're seeing in South Florida and continue to evaluate additional areas where we can leverage our relationship banking model. Further, we remain on track to open our financial centers in Fort Lauderdale, West Palm, and Naples during H1 of 2027. Tennessee provides another strong proof point of our expansion strategy. Since entering the market in 2023, we have organically built a loan portfolio of more than $750 million, now representing nearly 4% of our total loans.
Jeff Jackson: We opened another loan production office in Knoxville, June of last year, and recently expanded our Nashville presence, adding a highly experienced team of approximately 20 bankers and staff with deep roots in community banking. In less than three months, the team has leveraged their extensive networks to close $100 million in new loan relationships, nearly half of which are C&I across industries like healthcare, recreation and entertainment, and finance and insurance. Finally, we're proud to have been recognized recently by Forbes as one of the world's top performing banks and to have earned our ninth consecutive Outstanding Community Reinvestment Act rating from the FDIC. Both recognitions reflect the strength of our franchise and the commitment of our teams to delivering for our customers, communities, and shareholders. I would now like to turn over the call to Dan to walk through the financials and outlook in more detail. Dan.
Dan Weiss: Thanks, Jeff, and good afternoon. For the Q3, we reported GAAP net income available to common shareholders of $85 million or $0.88 per share. When excluding restructuring of merger-related expenses, Q3 net income was $86 million or $0.89 per share. To highlight a few of the Q3's year-over-year accomplishments, we grew adjusted earnings per share nearly 7%, driven by our disciplined growth strategy that delivers strong annualized loan growth of nearly 9%. We posted record fee income levels across several categories and maintained our efficiency ratio in the low 50% range. We ended the quarter with record total assets of $28.5 billion, which included total portfolio loans of $19.9 billion and securities of $4.5 billion, with the securities book representing approximately 16% of total assets. Total portfolio loans increased 5.1% year-over-year due to our organic growth of nearly $1 billion.
Dan Weiss: Based on our current pipeline and strong loan production, we expect to generate mid-single-digit growth for the year, despite the elevated commercial real estate payoffs. Deposits of $21.6 billion increased 1.5% year-over-year and were roughly flat sequentially as higher cost CDs migrated to money markets and other transaction accounts. As we mentioned previously, we expect our loan growth to outpace deposits in the near term as we lead with lending in our new expansion markets. That said, our 91% average loan-to-deposit ratio positions our balance sheet well for additional loan growth in the coming quarters. Our credit quality metrics remain solid. Most notably, our criticized and classified loans decreased $93 million or 55 basis points from the Q2 to represent 3.19% of total loans.
Dan Weiss: This significant improvement in credit quality resulted in a four basis point reduction in the allowance for credit losses to total portfolio loans at 30 September to 1.08% of total loans, or $215 million. Net interest income for the Q3 was $227 million, an increase of $10.2 million or 4.7% year over year, driven by loan growth, upward loan repricing, and higher security yields. This increase was a significant contributor to the 5% year-over-year growth in both pre-tax and net earnings and the 7% increase in adjusted earnings per share. The Q3 net interest margin of 360 improved seven basis points year over year, primarily due to lower funding costs and was flat for the Q2 when excluding the additional three basis points of accelerated accretion from an early payoff during the Q2.
Dan Weiss: Total deposit funding costs, including non-interest-bearing deposits, declined 12 basis points year over year to 180 basis points, reflecting the runoff of the higher-cost CDs. On a sequential quarter basis, increased just a couple of basis points, demonstrating our discipline over deposit pricing. Turning to fee income, we continue to see great traction across our franchise for our fee-based services as we earned record fees from service charges on deposit products, digital banking services, and treasury management. For the Q3, non-interest income increased $1 million or 2.2% year over year to $46 million. When excluding the impact of net security gains and losses, fee income increased 5.4% year over year. The Q3 reflects a full quarter's benefit of approximately $750,000 from the increase in deposit account fees that we implemented in June.
Dan Weiss: Treasury management net revenues increased approximately 40% year over year to $2.6 million, primarily driven by increased monthly spend from our 170 multi-card customers, which is up over 80% year over year. While residential mortgage origination volume increased 24% year over year to $300 million, we retained the majority of the volume in the portfolio, which caused mortgage banking income to decrease almost $2 million from the prior year period, when also combined with a negative fair value adjustment of approximately $1 million. Non-interest expense, excluding restructuring and merger-related costs for Q3 of $150 million, increased 3.7% year over year and 1.4% sequentially, primarily due to higher salaries and wages, which increased due to the recent hiring efforts in Florida and Nashville, as well as mid-year merit increases.
Dan Weiss: Employee benefits during Q3 included a $2 million reduction in sequential quarter deferred comp expense, as well as a $2 million one-time refund from our employee healthcare prescription rebate program. We anticipate the ongoing prescription plan refund to be roughly $750,000 per quarter. Our CET1 ratio of 10.6% as of 30 September was within our targeted range of 10.5% to 11%, reflecting our continued strong loan growth. We did not repurchase any shares during Q3, and we continue to anticipate our CET1 to remain in that targeted range for Q4. Turning to the outlook, we currently anticipate two Fed rate hikes, one in December, which will have no meaningful impact on 2026 results, and another hike in March of 2027.
Dan Weiss: Earning asset yields should continue to benefit from back book repricing of loans and securities upward, while deposit pricing will also modestly increase as we have recently adjusted our top-tier money market and CD rates. With the Q3 loan growth funded with a heavier mix of higher cost wholesale borrowings, we anticipate our net interest margin for Q4 to potentially be a basis point or two below the 360 that we reported here in Q3. This assumes, among other things, that competition for loans and deposits remain stable, as well as an upward-sloping yield curve. We also expect strong deposit growth in Q4, and to the extent we experience more than modeled, this could potentially benefit margin. There are no meaningful changes to our fee income and operating expense outlooks that we provided last quarter.
Dan Weiss: We still anticipate Q4 fee income to grow in that 3% to 5% range year over year, and operating expenses to be in that $153 million range after adding back the one-time credits recognized in employee benefits during Q3. The provision for credit losses will depend upon changes to macroeconomic forecasts and qualitative factors and various credit quality metrics, including potential charge-offs, criticized and classified loan balances, delinquencies, changes in prepayment speeds, and of course, future loan growth. Finally, we currently anticipate our full-year effective tax rate to be approximately 21%. Operator, we are now ready to take questions. Would you please review the instructions?
Operator: We will now begin the question and answer session. To ask a question, you may press star, then one on your telephone keypad. If you are using a speakerphone, please pick up your handset before pressing the keys. If any time your question has been addressed and you would like to withdraw your question, please press star, then two. Please limit yourselves to one question and one follow-up, and then you can return to the queue. At this time, we will pause momentarily to assemble our roster. The first question today comes from Will Jones with KBW. Please go ahead.
Will Jones: Hey, great. Good afternoon, guys.
Jeff Jackson: Hey, Will. How it is going?
Will Jones: Hey, we are doing good. I wanted to ask just maybe on deposit growth. I was maybe a bit surprised to see balances flat this quarter. It felt like you were speaking very positively, that there was some momentum that we could see in this quarter and moving into Q4. Was there any timing that may be pushing that kind of growth and momentum into Q4? If you could just walk us maybe through some of the deposit dynamics you saw this quarter that would be great. Thanks.
Jeff Jackson: Yeah, sure. We obviously, as everybody knows, there is a tough competition out there. What I would say is in Q3, we were able to generate about 8,400 new customer accounts, and so felt really good traction there. Also, when you look at we've closed 37 branches, so I think if I was to put it in a different way, we grew deposits, but obviously when closing 37 branches, you're going to get a little bit of runoff. I feel very good about where we ended up, even though it was flat. What I would say is some of it was delayed. I can tell you this quarter, we're already up a couple hundred million dollars and feel like we will finish the quarter really, really strong as it relates to deposit growth. We've got several different initiatives that are working very well.
Jeff Jackson: Once again, we're up a couple hundred million as we speak right now. Feel like we'll continue to climb toward the end of the quarter. Once again, I feel very good where we're at. Obviously, our loan deposit ratio in the low 90s gives us plenty of room to continue to run, but it is obviously top of mind and feel like Q4 results will show we've done a good job on deposit growth.
Will Jones: Yeah, that's great color. I appreciate all that. I guess maybe just within that train of thought, where would you be okay taking the loan to deposit ratio to? What is the appropriate leveraging of the balance sheet that you guys would be okay to see there?
Jeff Jackson: Yeah. I think mid-90s is where we would probably be comfortable with, somewhere around 95-ish. Today we're obviously several percentage points lower than that. Once again, I think mid-90s would be kind of where we'd want to max out around.
Will Jones: Yeah. Okay. Thanks. Then maybe, Dan, one for you on the margin. I heard you maybe a couple basis points of compression coming, but still kind of in the 360 ballpark. You have 2 hikes in your forecast. Do you feel comfortable being able to kind of defend this level as we move through the balance and into 2027? Assuming we get a couple more Fed hikes here, or is there a point in time where deposit competition becomes the more prevailing narrative and you are okay to see a little bit of margin compression if it means continuing to see NII growth?
Dan Weiss: Yeah, you nail it there. The 360 is very defendable as we look into 2027 for sure. Certainly lots of asset back book repricing to occur between securities and loans. Every quarter I typically kind of throw out a few numbers. They haven't changed much really from last quarter, and that is on a securities book. We are still looking at about $250 million in cash flows kicking off that securities book per quarter. So it is about $1 billion on an annual basis. That will be repricing upward about 180 basis points from 330 to about 510, somewhere just north of 5%. Then we have also got certainly loan repricing. Think about our fixed rate maturities on the commercial book, about $400 million.
Dan Weiss: That is repricing at a weighted average rate over the next year, that $400 million from 4.28%, and that would be coming on at least about 200 basis points or so higher, maybe 225 basis points, given where we are seeing pipelines and rates today. Then we also have within that large variable commercial book, that reprices within every 3 months, another almost 400, $350 million or so that is actually repricing in the next 12 months from a weighted average rate of 375. So that will move upward as much as 250 to 275 basis points. So those would be kind of, I would say the tailwinds that really are going to help support that kind of stabilized 360 margin over the coming quarters.
Dan Weiss: But I think really what we expect to see is an opportunity on the. I think it really is going to come down somewhat as well to deposit pricing to your point and our success in growing deposits. I will also mention on the securities book, right now we are seeing rates a bit better than 5.10. So there is a little bit being put on a little heavier than that, but just want to be conservative.
Operator: The next question comes from Manuel Navas with Piper Sandler. Please go ahead. Manuel, your line.
Manuel Navas: Hey, good afternoon, guys.
Operator: Okay, go ahead.
Manuel Navas: Yeah. I really like hearing how strong some of your new markets are doing. Can you just also talk a little bit about, you brought up that Premier markets are a good part of the pipeline. Can you just talk about how some of the core markets are doing and kind of expectations there for growth?
Jeff Jackson: Yeah, our Cincinnati, Columbus market is doing incredibly well. They just surpassed $1 billion in production this year, an all-time record there. They are seeing tremendous growth in those markets. I would also say our Mid-Atlantic market is doing really well also. I believe they also had a record production this year as well. I would say those two markets have really done a really nice job in the core markets. As it relates to our expansion markets, I have mentioned several times, and we mentioned in the script, they have taken off. As you may recall, we opened Tennessee back kind of in 2022, 2023. I am actually going down there next month because they have surpassed $1 billion in production in three years, with about over $700 million in loans outstanding and starting a pretty good deposit base.
Jeff Jackson: Very pleased with our core markets and also our new markets as well, and really think that we should continue to see very strong growth as we wrap up this year and going into next year.
Manuel Navas: All right. That is great to hear. What is next? Where would you hire next? Where is kind of the pipeline best right now in terms of the talent side? Where would you kind of be focused next?
Jeff Jackson: We are always looking for great talented bankers. I think adding to our healthcare team, we may add one or two there. That has also been another amazing business for us. I should have mentioned it, bringing in about a great amount of deposits and fees. I would say adding healthcare. Still looking to add in Florida, one or two here or there. That has been a really good market for us to continue to hire. There is some disruption down in Florida that we are able to take advantage of. As you may recall, the people I hired in Florida, I have known for many years. Many of them have worked for me in the past, so continuing to leverage those connections I think is really important. Right now, those are kind of the markets.
Jeff Jackson: All the other markets, we are looking for great talented bankers, but I would say in healthcare and also back in Florida, looking to add a few more people there. We are always open to looking at new LPOs, but as I have said before, it really goes back to the talent and where it has worked the best and we have executed on and been successful is where we have known people in those markets. If we run across some other teams in other places, we will obviously take a look. But, right now, I would say those two areas are where we are focused in hiring.
Manuel Navas: Okay. Finally, my last question is, you are talking about leading with lending in some of these new markets and for deposits to kind of flow in. What is kind of the timeframe for that? You are expecting to have better funding 6 months, 9 months? What should we kind of think about in that process where the deposits follow after the loan comes out?
Jeff Jackson: Yeah. So related to the LPOs, specifically Florida and Tennessee, I would say Florida, we should have 3 branches open sometime near the end of Q1. I would expect deposit flow to pick up. I will tell you, we have already got a pretty steady deposit pipeline in Florida.
Jeff Jackson: I think this quarter, next quarter, we will see good flow of deposits come into Florida. Tennessee, we just opened the Chattanooga branch earlier this year. We are working on Knoxville and Nashville, I would think by Q1. So I would say sometime mid-year next year, you would really start to see the LPOs producing strong deposits, but I think there is a chance they could do it beforehand.
Operator: The next question comes from Karl Shepard with RBC Capital Markets. Please go ahead.
Karl Shepard: Hey, guys. How you doing?
Jeff Jackson: Hey, Karl. How's it going?
Dan Weiss: Hey, Karl.
Karl Shepard: Doing well. Just want to ask about loan growth again. I know the production trends continue to be really solid, and I think payoffs are still a little bit elevated. Do you see anything on the horizon that would kind of knock you off this type of production level? There is just so much opportunity in Florida and Nashville ahead of you.
Jeff Jackson: The only thing that could knock us off would be heavier CRE payoffs. The pipeline remains very solid. If you look at Florida and Nashville is just starting to hit their stride this quarter, so I would expect them to be a big contributor this quarter. Florida is hitting its stride. The overall company pipeline is very strong. So it would have to take, I would say, heavier CRE payoffs or payoffs in general, or some probably massive interest rate hike, which we do not have forecasted. I think if you had 150, 200 basis point hike, that would obviously slow down lending. I do not foresee that. You never know. I think we have got the loan engine producing at a very high rate. I would say this year, if you look at what our total production is going to be, it probably will be near $5 billion.
Jeff Jackson: If you roll back to 2024, we were doing $2 billion. So that is how much we have increased our loan production, by more than doubling it in two years. I feel like next year we could exceed that for sure. Just feel like we are in a really great place for loan production.
Karl Shepard: Okay, that is great. Then as a follow-up, I think you have talked about Florida being a $2 billion bank. I asked last quarter on the Nashville opportunity. Do you want to size that and just help us understand kind of the runway ahead of you in that market?
Jeff Jackson: Yeah, sure. So, when I talk about $2 billion, I just want to be clear, that is adding loans and deposits together. Yeah, absolutely. So I could see Florida ending this year, and once again, that prediction was sometime in 2028, just to be clear. But I could see them ending the year with about a half a billion dollars in loans, and then adding from there and growing deposits several hundred million dollars next year, so that by the end of next year, obviously, I think they would be over $1 billion, as a franchise in Florida, probably more. Then, sometime in 2028, hitting that $2 billion number. As it relates to Tennessee, as I mentioned before, we are already $750 million in loans in Tennessee, with, I believe, around $100 million plus or maybe more in deposits.
Jeff Jackson: So I could see that by 2028, just the Nashville market being $1 billion, and the state of Tennessee being that $1.5 billion to $2 billion market, sometime in 2028 as well.
Karl Shepard: Okay.
Operator: The next question comes from Russell Gunther with Stephens. Please go ahead.
Russell Gunther: Hey, good afternoon, guys.
Jeff Jackson: Hey, Russell. How's it going?
Dan Weiss: Hey, Russell.
Russell Gunther: Hey, Jeff. Hey, Dan. Thanks, guys. I wanted to ask first on expenses. I hear you on the reiterated expectations for Q4. I believe it is about this time in the year where you guys take a look at your branch network for potential incremental optimization. I wanted to get a sense for if that is part of the strategy going forward, if there is still room to reduce that brick-and-mortar and either drop some expense saves to the bottom line or contemplate any other strategic optionality around the branch network.
Jeff Jackson: Yeah, I will start with the branch network, then I will let Dan get into the total expenses. Yes. The answer to your question is there is some more options for optimization for our branch network. We are looking at that. I think you could potentially see some two-for-one, three-for-ones. I do see more cost saves that we would likely announce, potentially, with our Q4 earnings. We are kind of finalizing some things there, so could be some good opportunities for us. Probably not nearly the amount that we have done already this year. I would think mid-single digits to low double digits at this point. That would be some good cost saves for us that we are looking at and would probably finalize by the end of this quarter. Dan, you want to talk about expenses overall?
Dan Weiss: Yeah, I will just also add on to your comments there, Jeff, just even, we still have a few back-office properties with some vacant floors and still looking to see how we can optimize some of that as well, which could have some benefit for 2027. Overall, the expense guidance that we provided actually last quarter, stands here for the Q3 as well as Q4. As I explained there, through my prepared commentary, really expecting them to come in right around $153 million. The way you kind of get back to that from the $150 million, from what we reported here in the Q3, is by really adding back that $2 million in healthcare rebate.
Dan Weiss: Then there is another, call it a million or so in deferred comp expense that kind of wasn't in the Q3 run rate that would likely show up in the Q4 run rate. So that is how we get to that guide of 153. Most of it is coming through that employee benefits line item. There is always a little bit of true-up on the salary side as we get final numbers near the end of the year for annual bonus payments and things like that. That is where I see most of the movement on the expense side is in that employee benefits line, and it would be increasing some.
Russell Gunther: Got it. Okay. Helpful color. Thank you both. Then, second question would just be to follow up on the margin discussion. Sounds like you are willing to flex the loan-to-deposit ratio a little bit more here. So, Dan, maybe just as a result, how are you thinking about deposit betas in this rising rate environment? What kind of underpins your assumption to defend that 360 NIM on the funding side?
Dan Weiss: Yeah. So on the deposit beta front, we are modeling about a 50% deposit beta, if that is helpful to you, Russell. Certainly have a number of initiatives out there, including potentially higher rates on CD products, money market, private client savings accounts, et cetera. So we do think that from that perspective, we are going to see our funding costs continue to rise as we would expect. But at the same time, asset repricing is expected to entirely mute that and/or potentially offset that somewhat. So that is how we get to that relatively stable 360 margin. A lot of that also is dependent, though, upon our success in growing deposits and relative to wholesale funding and certainly that funding in general, deposit gathering, particularly new customers tends to cost a little more than what your weighted average rate of deposits are today.
Dan Weiss: But we do still anticipate that deposit growth to come in at a similar mix, so about 24% to 25% non-interest-bearing, the other 75% interest-bearing, if that is helpful.
Russell Gunther: Got it. Okay. Yeah. No, that is very helpful, Dan. Thank you guys for taking my question.
Operator: The next question comes from Daniel Tamayo with Raymond James. Please go ahead.
Daniel Tamayo: Thank you. Good afternoon, everybody. Maybe just to follow up, Dan, for you on the expense side, but looking out a little bit further. You obviously had a lot of hires in 2026. You have been talking about 3% to 5% year-over-year for the H2 of this year. Do you think that kind of plays out next year as well as we look into 2027? Is that the right way to think about it? Or, with maybe fewer hirings, is there a chance that slows? Just curious how you are thinking about those the longer term.
Dan Weiss: Yeah, Danny. So what I would tell you is we are still in process of finalizing our budget for 2027, particularly over expenses. So I want to be careful in my remarks here. But generally speaking, that is right. 3% to 5% increase in expenses year-over-year is what we have done historically, and we would anticipate to kind of remain in that range here in 2027. Certainly, there will be additional hires to continue to grow, but there is also some potential expense offsets, and a lot of that is still kind of we are in the final stages of baking that all together and running that through for one final look before we are prepared to provide that expense guidance more directly here probably in Q1.
Daniel Tamayo: Yeah. Understood. I know we are a little early for that, so I appreciate your thoughts. Secondly, on credit. I think you said the criticized and classified loans were down a good amount in Q3. The non-performers were up a bit. One of them is held for sale, looks like. Can you just talk about the dynamics of how you expect that one held for sale loan to play out that is going to be sold next quarter and any kind of expectations on losses? Is there any kind of change in how you are thinking about just the overall credit profile from here?
Jeff Jackson: Yeah. The one held for sale is one of the three credits from Premier. We expect that to be resolved. We do not expect any loss on that. Just to give you a quick update on those three. We are once again anticipating at least two of the three, if not all of them, will be resolved this quarter. Obviously, that would not be a big movement for the NPLs. Nothing has changed since last quarter. Two of them are very well collateralized. The other one we feel very good about. I do not see any sort of meaningful write-off on any of the three. Once again, very well collateralized. The slight uptick was mainly related to one property we have, which we have had a very heavy reserve on for over a year.
Jeff Jackson: That one, I do not think will get resolved in Q4, but we would expect it to be resolved in probably Q1 next year. But once again, we already have a really heavy reserve on it. Once again, feel very good about credit. Obviously, the C&C is going down significantly. Feel like we are trending in the right way. Hopefully by the end of the quarter, we get a few of these credits off our books and back into a better range for NPAs.
Daniel Tamayo: Thanks, Jeff. I guess the way to think about it from a net charge-offs perspective is this was a little bit elevated from a quarter, just looking back over the last several quarters, this is. It is not high, but it is higher than what you have had. You would expect that number to come down to something more similar to what you have been doing over the last several quarters?
Jeff Jackson: Yeah, absolutely. As it relates to the charge-off we had this quarter, it was related to an indirect auto dealership that we had fully reserved. It was really just a one credit. I would expect next quarter to be back to where we were before with almost basically no charge-offs. That is how we see it going forward.
Daniel Tamayo: Got it. Lastly, also on credit, the reserves have been bouncing around a little bit, but drifting down here, approaching 1% now. Sounds like you have some specific reserves still left in there. Just curious how you see that trending, Dan, from this point before we see that stabilize.
Dan Weiss: Yeah, I would say that calculation moves around a little bit from quarter to quarter and certainly is dependent upon specific reserves. In this quarter, for example, we saw that coverage ratio drop by about 4 basis points from 112 to 108. I would say, a good portion of that was somewhat related to that charge-off. We had it fully reserved for and charged it off. So that reserve came out of the calculation, out of the reserve. So that was probably one of the biggest drivers. I would also say, criticized and classified loans has also been a pretty big driver. It is probably the single largest qualitative factor we have in our CECL reserve. Those were down $95 million, 55 basis points quarter over quarter. So that also helped.
Dan Weiss: Then we historically have had an office qualitative factor that would have certainly been in place at the end of last year. That has also rolled off to zero at this point as well. So those are the kind of the movement in the qualitative factors. I think, unemployment has been relatively steady. So that is kind of 108, I do not see it getting much lower than that. We have been hovering around 110 allowance coverage ratio really probably for the last eight-plus quarters, plus or minus 4 or 5 basis points.
Daniel Tamayo: That is great color, Dan. Appreciate that. That is all I had, guys.
Operator: Again, if you have a question, please press star then one. Our last question comes from David Bishop with Hovde Group. Please go ahead.
David Bishop: Hey, good afternoon, gentlemen.
Jeff Jackson: Hey, how you doing?
Dan Weiss: Hey, Dave.
David Bishop: Good. Hey, Jeff, quick question. In terms of the newer markets, especially Florida, just curious, loan pricing there, any differential in terms of loan pricing compared to maybe some of your legacy markets and other markets?
Jeff Jackson: No, we have not seen any difference at all. I would tell you that that market actually is doing a really great job, probably better than average on getting loan fees. They charge fees and we are able to get fees. The market tends to lend itself to fees in Florida, and they have done a great job on that.
David Bishop: Got it. Then a follow-up question on the deposit side. I am curious if you are tweaking anything on the compensation plan side to sort of reward or drive greater sort of core operating account growth this year. Thanks.
Jeff Jackson: Absolutely. That is a great question. We have been talking about that, and we are going to tweak our incentive plans to not only incent deposits a lot more, we are also going to, for everyone, break out non-interest bearing and interest bearing. So there is going to be a heavy focus on deposits going forward, and especially next year. We have already had meetings with our regional presidents and our markets, and so they are all aware of it as well and really getting on our front foot when it looks at getting deposits. So I think you will see some great progress in Q4, would be my expectation, and then all of next year. It will be heavily incented to bring in more deposits.
David Bishop: Appreciate the color.
Jeff Jackson: Thank you.
Operator: This concludes our question and answer session. I would like to turn the conference back over to Jeff Jackson for any closing remarks.
Jeff Jackson: Thank you. To summarize, our year-to-date financial results demonstrate the strength of our growth strategy and our relationship-focused banking model as we deliver solid return ratios and earnings per share growth for our shareholders. Our success continues to be driven by talented people, strong customer relationships, and a commitment to disciplined growth. With strong momentum across our franchise and a robust commercial pipeline, we believe we are well-positioned to build on that performance in the quarters ahead. Thank you for joining us today. We appreciate your continued interest in WesBanco and look forward to speaking to you at one of our upcoming investor events. Have a great week.
Operator: The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.
