ウェスバンコ（WSBC）2026年第3四半期決算説明会：貸出成長とNIM 3.60%

主要なポイント

• ウェスバンコが発表した2026年第3四半期の普通株主に帰属するGAAP純利益は8,500万ドル（1株当たり0.88ドル）となりました。合併および事業再編費用を除く純利益は8,600万ドル（1株当たり0.89ドル）でした。
• ポートフォリオ貸出金総額は199億ドルに達し、前年同期比で5.1%増加、前期比年率で8.7%増加しました。商工業（C&I）貸出金は前年同期比で11%増加、前期比年率で16%増加しました。
• 純金利収入は前年同期比4.7%増の2億2,700万ドルとなり、純金利マージン（NIM）は3.60%と前年同期比で7ベーシスポイント上昇しました。
• 要注意・分類貸出金の減少に伴い信用指標が改善し、第2四半期から9,300万ドル（55ベーシスポイント）減少して総貸出金の3.19%となりました。貸倒引当金は1.08%（2億1,500万ドル）に低下しました。
• 経営陣は2026年の貸出金成長率について1桁台半ばとの見通しを維持しました。これは18億ドルの事業用案件パイプラインに支えられており、商業用不動産（CRE）の返済額が高水準にあるものの維持されています。
• 2026年第4四半期について、経営陣は純金利マージン（NIM）が3.60%を1〜2ベーシスポイント下回ると予想しており、手数料収入の伸びは前年同期比で3%〜5%、調整後営業費用は約1億5,300万ドルと見込んでいます。

主要財務データ

事業および営業業績

商業貸出が引き続き主な成長ドライバーとなった。WesBancoは40億ドル近くの商業貸出を実行し、2026年最初の9か月間で70%前年同期比で増加した。経営陣は通期の実行額が接近する可能性があると述べている。50億ドル（2024年の約20億ドルとの比較）。

商業用不動産（CRE）ローンの完済が引き続き逆風となりました。CREローンの完済額は第3四半期に合計約3億7,000万ドルとなり、四半期のローン成長率を約1パーセントポイント押し下げました。過去12か月間で、CREローンの完済は約10億ドルの逆風をもたらしましたが、ウェスバンコ（WesBanco）はなおも約10億ドルの実質純ローン成長を達成しました。

商業ローンのパイプラインは9月30日時点で18億ドルに達し、その約半数はローン組成オフィスおよび旧プレミア（Premier）市場によるものでした。経営陣によると、パイプラインは四半期末後も安定して推移しています。

拡大市場も引き続き貢献しました。第2四半期の立ち上げ以来、フロリダのチームは3億ドルの新規ローン取引と、同規模のパイプラインを構築しました。経営陣は2027年前半にフロリダ州で3つのファイナンシャルセンターを開設する予定です。テネシー州では2023年の市場参入以来、7億5,000万ドルを超えるローンポートフォリオを構築しており、これは総ローンの約4%を占めています。

手数料ビジネスも成長しました。有価証券損益を除く手数料収入は、前年同期比で5.4%増加しました。資金管理（トレジャリー・マネジメント）の純売上高は約40%増の260万ドルとなり、マルチカード顧客の80%を超える成長が後押ししました。住宅ローン実行額は24%増の3億ドルに増加しましたが、案件の大部分を自社保有したことや、当四半期に約100万ドルの評価損を計上したことから、住宅ローン事業収入は200万ドル近く減少しました。

経営陣の業績予想（ガイダンス）

経営陣は引き続き、2026年通期のローン成長率が1桁台半ばになると予想しており、これは高い水準のCREローン完済を相殺するのに十分な組成勢いが維持されることを前提としています。

2026年第4四半期について、ウェスバンコは以下を予想しています：

• 純金利マージン（NIM）は3.60%を1〜2ベーシスポイント下回る水準となる見通しであり、高コストな市場調達の比率上昇を反映しています。
• 手数料収入は前年同期比で3%〜5%増加する見通し。
• 調整後営業費用は約1億5,300万ドル（第3四半期の従業員給付クレジット調整後）。
• 通期の実効税率は約21%。
• 普通株式等ティアー1（CET1）比率は目標レンジである10.5%〜11%内に留まる見通し。

同社の金利前提には、2026年12月の米連邦準備理事会（FRB）による1回の利上げ（2026年業績への実質的な影響はなし）と、2027年3月のもう1回の利上げが含まれています。経営陣は、ローンおよび有価証券の改定による引き上げが2027年に向けて純金利マージンを3.60%近辺で下支えすると見込んでおり、預金ベータは約50%と試算しています。

また経営陣は、過去の年間費用増加率が3%〜5%であり、2027年もその範囲にとどまる可能性があると指摘しつつも、予算はまだ策定中であることを強調しました。

リスクと注視事項

• CREローンの完済： 堅調な新規融資の実行にもかかわらず、予想を上回る商業用不動産ローンやその他のローンの返済により、純貸出金の伸びが鈍化する可能性があります。
• 資金調達コスト： 最近の貸出増加に伴い、大口調達への依存度が高まりました。預金獲得競争や新規顧客の獲得コストがマージンを圧迫する可能性があります。
• 預金施策の実行： 短期的なマージンの安定は、一部預金の伸びにかかっています。ウエスバンコが37店舗を閉鎖したのを受け、第3四半期の預金は前四半期比でほぼ横ばいとなりました。
• 金利： 経営陣は、150〜200ベーシスポイントの大幅な利上げにより貸出が減速する可能性があるものの、これは同社の業績予測には含まれていないと述べました。
• 不良債権処理の時期： 複数の不良債権は2026年第4四半期または2027年第1四半期に処理される見込みですが、その時期には不確実性が残っています。

アナリスト質疑応答のハイライト

経営陣は、決算説明会の時点で第4四半期中に預金がすでに数億ドル増加していると述べました。ウエスバンコは約8,400件の新規顧客口座を第3四半期に獲得したものの、店舗閉鎖が預金流出の一因となりました。2027年の預金インセンティブ施策では、無利息預金と有利息預金の両方の残高獲得をより重視する方針です。

マージンの持続性について、経営陣は約2億5,000万ドルの四半期有価証券キャッシュフローが約3.30%から約5.10%へ改定される見通しを示しました。また、約4億ドルの固定金利商業用ローンについても、今後1年間で加重平均金利4.28%から少なくとも200〜225ベーシスポイント高い金利へ改定される見込みであるとしています。

経営陣は、1桁台半ばから2桁台前半の店舗数を対象とした追加の店舗最適化の機会を見込んでいます。詳細は第4四半期決算時に発表される可能性があります。また、バックオフィスの不動産最適化も2027年に効果をもたらす可能性があります。

与信面について、経営陣は引き継いだ旧プレミア社の3件の融資のうち、少なくとも2件（場合によっては3件すべて）が大きな損失を伴わずに第4四半期中に解決されると見込んでいます。また、第3四半期には全額引当済みの間接自動車ディーラー向け融資の貸倒償却が含まれていたものの、純貸倒償却額は過去の低い水準に戻ると予想しています。

決算説明会 トランスクリプト全文

決算説明会の完全なトランスクリプト

経営陣による説明

Operator

Good afternoon, and welcome to the WesBanco Inc.'s Third Quarter 2026 Earnings Conference Call. [Operator Instructions]

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 H. Iannone

Thank you. Good afternoon, and welcome to WesBanco, Inc.'s Third Quarter 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 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. And all statements speak only as of October 22, 2026, and WesBanco undertakes no obligation to update them. I would now like to turn the call over to Jeff. Jeff?

Jeffrey Jackson

Thanks, John, and good afternoon, everyone. Today, we'll review our third quarter performance and share our current outlook for fourth quarter. Our third quarter results demonstrate continued momentum across our franchise particularly in 3 areas. We delivered strong sequential quarter and year-over-year loan growth. We saw accelerating growth in our targeted expansion markets. and we drove solid profitability through disciplined execution and positive operating leverage.

Turning to our financial performance. Our third quarter results reflect the continued strength of WesBanco's disciplined growth strategy and relationship-focused banking model. For the quarter ending September 30, 2026, and 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. Adjusted earnings per share increased nearly 7% to $2.72 and 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 9 months of the year, our commercial teams generated record loan production of nearly $4 billion, a 70% increase from prior year period.

As we mentioned last quarter, we expected developers to continue to seek permanent financing and the sale of properties during the third quarter, but at a slower pace than the first half of the year. However, we experienced another sequential quarter increase as CRE payoffs totaled approximately $370 million during the third quarter, 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.

The recent Mid-Atlantic plan 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 8-figure commercial loan, a 7-figure deposit relationship in treasury management services. 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 multiproduct opportunities. Reflecting our team's ability to successfully convert loan opportunities, our commercial pipeline was $1.8 billion as of September 30, with half of this from our loan production offices and former premier markets.

The pipeline has remained stable in a 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 the second quarter, our Florida team has developed $300 million in new loan relationships and a similar-sized pipeline. While the early majority of closed loans are CRE and owner-occupied related, nearly 1/3 of the C&I across the various industries like health care, 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 Formotervalle, Busan and Naples during the first half of 2027. I Teen 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. We opened another loan production office in Knoxville, June of last year and recently expanded our national presence, adding a highly experienced team of approximately 20 bankers and staff with deep roots in community banking. In less than 3 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 health care, recreation and entertainment and finance and insurance.

Finally, we are proud to have been recognized recently by Forbes as 1 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?

Daniel Weiss

Thanks, Jeff, and good afternoon. For the third quarter, we reported GAAP net income available to common shareholders of $85 million or $0.88 per share. And when excluding restructuring and merger-related expenses, Third quarter net income was $86 million or $0.89 per share. To highlight a few of the third quarter's year-over-year accomplishments, we grew adjusted earnings per share nearly 7% and driven by our disciplined growth strategy that delivered 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 organic growth of nearly $1 billion and 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 log markets and other transaction accounts and 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 second quarter to represent 3.19% of total loans.

This significant improvement in credit quality resulted in a 4 basis point reduction in the allowance for credit losses to total portfolio loans at September 30, to 1.08% of total loans or $215 million. Net interest income for the third quarter 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 pretax and net earnings and the 7% increase in adjusted earnings per share.

The third quarter net interest margin of 360 improved 7 basis points year-over-year, primarily due to lower funding costs and was flat to the second quarter when excluding the additional 3 basis points of accelerated accretion from an early payoff during the second quarter. Total deposit funding costs including noninterest-bearing deposits declined 12 basis points year-over-year to 180 basis points, reflecting the runoff of the higher-cost CDs. And 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've earned record fees from service charges on deposit products, digital banking services and treasury management. For the third quarter, noninterest income increased $1 million or 2.2% year-over-year to $46 million. And when excluding the impact of net security gains and losses, fee income increased 5.4% year-over-year. The third quarter reflects a full quarter's benefit of approximately $750,000 from the increase in deposit account fees that we implemented in June. 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. Noninterest expense, excluding restructuring and merger-related costs, for the third quarter of $150 million increased 3.7% year-over-year and 1.4% sequentially and primarily due to higher salaries and wages, which increased due to the recent hiring efforts in Florida and Nashville as well as midyear merit increases.

Employee benefits during the third quarter included $2 million reduction in sequential quarter deferred comp expense as well as a $2 million onetime refund from our employee health care 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 September 30 was within our targeted range of 10.5% to 11%, reflecting our continued strong loan growth we did not repurchase any shares during the third quarter, and we continue to anticipate our CET1 to remain in that targeted range for the fourth quarter. Turning to the outlook. We currently anticipate 2 Fed rate hikes, 1 in December, which will have no meaningful impact on 2026 results and another hike in March of 2027.

Earning asset yields should continue to benefit from backbook repricing of loans and securities upward -- while deposit pricing will also modestly increase as we've recently adjusted our top-tier money market and CD rates. With the third quarter loan growth funded with a heavier mix of higher cost wholesale borrowings, we anticipate our net interest margin for the fourth quarter to potentially be a basis point or 2 below the 360 that we reported here in the third quarter. And this assumes, among other things, the competition for loans and deposits remain stable as well as an upward sloping yield curve. We also expect strong deposit growth in the fourth quarter and to the extent we experienced more than model, this could potentially benefit margin.

There are no meaningful changes to our fee income and operating expense outlook that we provided last quarter. We still anticipate fourth quarter 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 onetime credits recognized and employee benefits during the third quarter. The provision for credit losses will depend upon changes to macroeconomic forecast 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.

And finally, we currently anticipate our full year effective tax rate to be approximately 21%. Operator, we're now ready to take questions. Would you please review the instructions?

Operator

[Operator Instructions]

The first question today comes from Will Jones with KBW.

質疑応答

William Jones

I wanted to ask just maybe on deposit growth, maybe a bit surprised to see balances flat this quarter. It felt like you're thinking very positively that there was some momentum that we could see in this quarter and moving into fourth quarter. Was there any timing that may be pushing that kind of growth and momentum into the fourth quarter? If you could just walk us maybe through some of the deposit dynamics you saw this quarter, that would be great.

Jeffrey Jackson

Yes, sure. So we obviously, as everybody knows, there is a tough competition out there. What I would say is, in the third quarter, 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 and so I feel very good about where we ended up, even though it was flat.

What I would say is some of it was delayed. And so I can tell you this quarter, we're already up a couple of hundred million dollars, and we 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. And once again, we were up a couple of hundred million as we speak right now. We feel like we'll continue to climb toward the end of the quarter. But 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 fourth quarter results will show we've done a good job on deposit growth.

William Jones

Yes, 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 was the appropriate leveraging of the balance sheet that you guys would be okay to see there?

Jeffrey Jackson

Yes. I think mid-90s is where we would probably be comfortable with somewhere around 95-ish. And so today, we're obviously several percentage points lower than that. But once again, I think mid-90s would be kind of where we'd want to max out around.

William Jones

Yes. Okay. And then maybe 1 Daniel for you on the margin. If I heard you maybe a couple of basis points of compression coming, but that's 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 just is there a point in time where deposit competition becomes the more prevailing narrative and you're okay to see a little bit of margin impression if it means continuing to see NII growth?

Daniel Weiss

Yes. 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 clean securities and loans. Every quarter, I typically kind of throw out a few numbers and they haven't changed much really from last quarter, and that's on the securities book, we're still looking at about $250 million in cash flows kicking off that securities book per quarter.

So it's about $1 billion on an annual basis. And that will be repricing upward about 180 basis points from 330 to about 510, somewhere just north of 5%. And then we've also got certainly, loan repricing, I think about our fixed rate maturities on the commercial book, about $400 million, that's repricing at a weighted average rate over the next year, that $400 million from 4.28% and that will be coming on at least about 200 basis points or so higher, maybe 225 basis points, given where we're seeing pipelines and rates today. And then we also have within that large variable commercial book that reprices within every 3 months, another almost $400 million, $350 million or so that's actually repricing in the next 12 months from a weighted average rate of 3.75%.

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 stabilize 360 margin over the coming quarters. But I think really, what we expect to see is an opportunity on the -- I think it really comes -- it's going to come down somewhat as well to deposit pricing, to your point, and our success in growing deposits. And I'll also mention on the securities book. Right now, we are seeing rates a bit better than 5 -- 510. So there is a little bit being put on a little heavier than that, but I just want to be conservative.

Operator

The next question comes from Manuel Navas with Piper Sandler.

Manuel Navas

Can you -- 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 PSC is a good part of PSC markets are a good part of the pipeline. Can you just talk about how some of the core markets are doing any kind of expectations there for growth?

Jeffrey Jackson

Yes. Our Cincinnati, Columbus market is doing incredibly well. So they just surpassed $1 billion in production this year, an all-time record there. They're seeing tremendous growth in those markets I would also say our Mid-Atlantic market is doing really, really well also. I believe they also had a record production this year as well. So I would say those 2 markets have really done a really, really nice job in the core markets.

As it relates to our expansion markets, I've mentioned several times and we mentioned in the script, they've taken off -- as you may recall, we opened Tennessee back kind of in '22, '23. I'm actually going down there next month because they've surpassed $1 billion in production in 3 years. So with about over $700 million in loans outstanding and starting a pretty good deposit base. So 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's great to hear. Is -- what's next where would you hire next? Where is kind of the pipeline best right now in terms of the talent fund? Where would you kind of be focused next?

Jeffrey Jackson

We're always looking for great talented bankers. I think adding to our health care team, we may add 1 or 2 there. That's also been another amazing business for us. I should have mentioned it, bringing in about a great amount of deposits and fees. So I would say adding health care, still looking to add in Florida. 1 or 2 here or there. That's been a really good market for us to continue to hire. There is some disruption down in Florida that we're able to take advantage of. And as you may recall, the people I hired in Florida have known many, many years. Many of them have worked for me in the past.

So continue to leverage those connections, I think, is really, really important. But right now, those are kind of the markets -- all the other markets we're looking for great talented bankers, but I would say in health care and also back in Florida looking to add a few more people there. We're always open to looking at new LPOs, but as I've said before, it really goes back to the talent and where it's worked the best, and we've executed on and been successful is where we have known people in those markets. And so if we run across some other teams and other places, we'll obviously take a look. But right now, I would say those 2 areas are where we're focused on iron.

Manuel Navas

Okay. And finally, my last question. you're talking about leading with lending in some of these new markets and for deposits to kind of flow in. What's kind of the time frame for that you're expecting to have better funding 6 months, 9 months, what should we kind of think about in that process where the deposits followed after alone comes out?

Jeffrey Jackson

Yes. So related to the LPOs, specifically Florida and Tennessee, I would say Florida, we should have 3 branches open sometime near the end of first quarter. And I would expect deposit flow to pick up. I will tell you, we've already got a pretty steady deposit pipeline in Florida. So I think this quarter and next quarter, we will see good flow of deposits coming into Florida. Tennessee, we just opened the Chattanooga branch earlier this year. We're working on Knoxville and Nashville, I would think by first quarter. So I would say sometime midyear next year, you would really start to see the LPOs producing strong deposits, but I think there's a chance they could do it beforehand. .

Operator

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

Karl Shepard

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, but do you see anything on the horizon that would kind of knock you off this type of production level, there's just so much opportunity in Florida and Nashville ahead of you?

Jeffrey Jackson

The only thing that could knock us off would be heavier CRE payoffs. The pipeline remains very solid. And if you look at Florida, Nashville, 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 don't have forecasted.

But I think if you had 150, 200 basis point high that would obviously slow down lending. I don't foresee that, you never know. But those I think we've 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 -- it's not -- if you roll back to 2024, we were doing $2 billion. So that's how much we've increased our loan production by more than doubling it in 2 years. And so I feel like next year, we could exceed that for sure and just feel like we're in a really great place for loan production.

Karl Shepard

Okay. That's great. And then as a follow-up. I think you've talked about Florida being a $2 billion bank, and I asked last quarter on the Nashville opportunity. Do you want to size that and just help us understand kind of the runway to ahead of you in that market?

Jeffrey Jackson

Yes, sure. So that's really when I talk about $2 billion, I just want to be clear, that's adding loans and deposits together. So for Yes, absolutely. So I could see Florida ending this year. And once again, that prediction was sometime in 2028, just to be clear. But I can see them ending the year with about $0.5 billion 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 and then some time hitting that $2 billion number.

As it relates to Tennessee, as I mentioned before, we're already $750 million in loans in Tennessee with, I believe, around $100 million plus or maybe more in deposits so I could see that by 2028, just the Nashville market being $1 billion in the state of Tennessee being that $1.5 billion to $2 billion market sometime in 2028 as well.

Operator

The next question comes from Russell Gunther with Stephens.

Russell Elliott Gunther

I wanted to ask first on expenses. So I hear you on the reiterated expectations for the fourth quarter. I believe it's about this time in the year where you guys take a look at your branch network for potential incremental optimization. So I wanted to get a sense for if that is part of the strategy going forward, if there's still room to reduce that brick-and-mortar and either drop some expense saves to the bottom line or contemplating any other strategic optionality around the branch network.

Jeffrey Jackson

Yes, I'll start with the branch network, and then I'll let Dan get into the total expenses. Yes, that's 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 2 for 1, 3 for 1 and so I do see more cost saves that we would likely announce potentially with our fourth quarter earnings.

We're kind of finalizing some things there. And so it could be some good opportunities for us. probably not nearly the amount that we've done already this year. I would think mid-single digits to low double digits at this point. But 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, do you want to talk about expenses overall?

Daniel Weiss

Yes. And I would just also add on to your comments there, Jeff. Just even -- there's still, we still have a few back office properties. The some vacant floors and still looking to see how we can optimize some of that as well. which could have some benefit for 2027. But overall, the expense guidance that we provided actually last quarter stands year for the third quarter as well as fourth quarter. .

And as I explained through my prepared commentary, really expecting them to come in right around $153 million. And the way you kind of get back to that from the $150 million from what we reported here in the third quarter is by really adding back that $2 million in health care rebate and then there's another, call it, $1 million or so in deferred comp expense that kind of wasn't in the third quarter run rate that would likely show up in the fourth quarter run rate.

So that's how we get to that guide of $153 million most of it's coming through that employee benefit line item. There's 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 that. But that's where I see most of the movement on the expense side is in that employee benefits line, and it would be increasing.

Russell Elliott Gunther

Got it. Okay. Helpful color. And then Second question would just be to follow up on the margin discussion. It sounds like you are willing to flex the loan-to-deposit ratio a little bit more here. And so Dan, maybe just as a result, like 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?

Daniel Weiss

Yes. So on the deposit beta front, we're modeling about a 50% deposit beta, if that's helpful to you, Russell, certainly have a number of initiatives out there, including potentially higher rates on CD product, money market, private client savings accounts, et cetera. So we do think that from that perspective, we're going to see some of our funding costs continue to rise as we would expect. But at the same time, assets our asset repricing is expected to kind of entirely mute that and/or potentially offset that somewhat.

And so that's how we get to that kind of 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 or tends to cost a little more than what your kind of weighted average rate of deposits are today. But we do still anticipate that deposit growth to come in at a similar mix about 24%, 25% noninterest-bearing, the other 75% interest bearing.

Operator

The next question comes from Daniel Tamayo with Raymond James.

Daniel Tamayo

Thank you. Good afternoon, everybody. Maybe just to follow up, Dan, for you on the expense side, but kind of looking out a little bit further, you obviously had a lot of hires in you've been talking about 3% to 5% kind of year-over-year for 1/3 and back half of this year. Do you think that kind of plays out next year as well as we look into '27? Is that the right way to think about it? Or with maybe fewer hirings, is there a chance that slows? Just curious how you're thinking about those kind of the longer term?

Daniel Weiss

Yes, Danny. So what I would tell you is we're 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's right. 3% to 5% increase in expenses year-over-year is what we've 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's also some potential expense offsets, and a lot of that is still kind of we're in the final stages of baking that all together and running that through for 1 final look before we prepared to provide that expense guidance more directly here probably in the first quarter. .

Daniel Tamayo

YYes. Understood. I know we're a little early for that. So I appreciate your thoughts. Secondly, on credit. So I think you said the criticized and classifieds were down a good amount in the third quarter. The nonperformers 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 1 held-for-sale loan to play out that's going to be sold next quarter? And any kind of expectations on Masan then is there any kind of change in how you're thinking about just the overall credit profile from here?

Jeffrey Jackson

Yes. The 1 held for sale is 1 of the 3 credits from Premier. We expect that to be resolved. We do not expect any loss on that. So just to give you a quick update on those 3, we're once again anticipating at least 2 of the 3, if not all of them, will be resolved this quarter. Obviously, that would be a big movement for the NPLs. And yes, nothing has changed since last quarter. Two of them are very well collateralized. The other 1 we feel very good about. I don't see any sort of meaningful write-off on any of the 3, once again, very well collateralized and then the slight uptick was mainly related to 1 property we have, which we've had a very heavy reserve on for over a year. .

And that one, I don't think will get resolved in the fourth quarter, but we would expect it to be resolved in probably first quarter next year. But once again, we already have a really heavy reserve on it. And Bill, once again, feel very good about credit. Obviously, the C&C is going down significantly. I feel like we're trending in the right way. And then 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

So I guess the way to think about it from a net charge-off perspective, is this was a little bit elevated from a quarter, just looking back over the last several quarters, it's not high, but it's higher than what you've had you would expect that number to come down to more something more similar to what you've been doing over the last several quarters?

Jeffrey Jackson

Yes, absolutely. And as it relates to the charge-off we had this quarter, it was related to an indirect auto dealership that we had fully reserved and so yes, it was really just a 1 credit. So I would expect next quarter to be back to where we were before with almost basically no charge-offs. That's how we see it going forward. .

Daniel Tamayo

Got it. And then lastly, also on credit, just the reserves have been maybe bouncing around a little bit, but drifting down here approaching 1% now. It sounds like you've got some specific reserves still left in there. Just curious how you see that trending, Dan, from this point before we see some that stabilize?

Daniel Weiss

Yes, 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 dropped by about 4 basis points from 112 to 108. I would say a good portion of that was somewhat related to that charge-off had fully reserved for and charged it off. And so that reserve came out of the calculation out of the reserve. And so that kind of was probably 1 of the biggest drivers. I would also say we criticized and classified loans has also been a pretty big driver.

It is probably both single largest qualitative factor we have in our CECL reserve and those were down $95 million, 55 basis points kind of quarter-over-quarter. So that also helped. And then we historically have had an office qualitative factor that would have certainly been in place at the end of last year, and that has also kind of rolled off to 0 at this point as well. So those are the kind of the movement in the qualitative factors and I think unemployment has been relatively steady. So that's kind of 108, I don't see it getting much lower than that. we've been hovering around 110 a ounce coverage ratio really probably for the last 8-plus quarters, plus or minus 4 or 5 basis points.

Operator

[Operator Instructions]

Our last question comes from David Bishop with Hovde Group.

David Bishop

Jeff, a quick question. In terms of the newer markets, especially Florida, just curious, loan pricing there. Any differential in terms of loan pricing versus compared to maybe some of your legacy markets and other markets?

Jeffrey Jackson

No, we have not seen any difference at all. And 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're able to get fees. The market tends to wind itself to fees in Florida, and they've done a great job on that.

David Bishop

Got it. And then a follow-up question on the deposit side. And I'm curious if you're tweaking anything on the compensation plan side to sort of reward or drive greater sort of core operating account for us this year.

Jeffrey Jackson

Absolutely. That's a great question. We've been talking about that. And we are going to tweak our incentive plans to not only incent deposits a lot more. We're also going to for everyone, breakout noninterest-bearing and interest-bearing. So there is going to be a heavy, heavy focus on deposits going forward and especially next year, we've already had meetings with our regional presidents and our markets and so they're 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 fourth quarter.

It would be my expectation. And then all of next year. It will be heavily incented to bring in more deposits.

Operator

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

Jeffrey 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 1 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.