WESBANCO INC 10-Q

ITEM 1. LEGAL PROCEEDINGS Wesbanco is involved in various lawsuits, claims, investigations and proceedings, which arise in the ordinary course of business. While any litigation contains an element of uncertainty, Wesbanco does not believe that a material loss related to such proceedings or claims pending or known to be threatened is reasonably possible. ITE M 1A. RISK FACTORS In light of its entrance into the Merger Agreement and the transactions contemplated thereby, Wesbanco is supplementing its risk factors contained in Item 1A of its Annual Report on Form 10-K for the year ended December 31, 2023, as filed with the Securities and Exchange Commission on February 26, 2024 (“Annual Report”). The following risk factors should be read in conjunction with the risk factors contained in our Annual Report on Form 10-K. Any of the risks described in our Annual Report, as well as any of the risks described below, could materially adversely affect our business, financial condition and results of operations. Additional risks and uncertainties that are not presently known to us or that we deem immaterial may also adversely impact our business or financial results. Except as set forth below, there are no material changes related to risk factors from the risk factors described in Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2023. Risks Relating to the Merger Although we expect that our pending acquisition of Premier will result in cost savings, synergies and other benefits, the combined company may not realize those benefits because of integration difficulties and other challenges. The success of our acquisition of Premier Financial will depend in large part on the success of the management of the combined company in integrating the operations, strategies, technologies and personnel of the two companies following the completion of the Merger. The combined company may fail to realize some or all of the anticipated benefits of the Merger if the integration process takes longer than expected or is more costly than expected. The failure of the combined company to meet the challenges involved in successfully integrating the operations of the two companies or to otherwise realize any of the anticipated benefits of the Merger, including additional cost savings and synergies, could impair the operations of the combined company. In addition, we anticipate that the overall integration of Premier Financial will be a time-consuming and expensive process that, without proper planning and effective and timely implementation, could significantly disrupt the combined company’s business. Potential difficulties the combined company may encounter in the integration process include the following: • the integration of management teams, strategies, technologies and operations, products and services; • the disruption of ongoing businesses and distraction of their respective management teams from ongoing business concerns; • the retention of and possible decrease in business from the existing customers of both companies; • the creation of uniform standards, controls, procedures, policies and information systems; • the reduction of the costs associated with each company’s operations; • the integration of corporate cultures and maintenance of employee morale; • the retention of key employees; and • potential unknown liabilities associated with the Merger. The anticipated cost savings, synergies and other benefits of the Merger assume a successful integration of the companies and are based on projections and other assumptions, which are inherently uncertain. Even if integration is successful, anticipated cost savings, synergies and other benefits may not be achieved. We have incurred, and will incur, significant transaction-related costs in connection with the Merger. We have incurred and will incur substantial expenses in connection with the negotiation and completion of the transactions contemplated by the Merger Agreement, as well as the costs and expenses of filing, printing and mailing a joint proxy statement/prospectus, and filing and other fees to be paid to the SEC and other regulatory agencies in connection with the Merger. These fees and costs will be significant. In addition, we will incur significant costs with respect to the issuance and sale of shares of our common stock to investors in a private placement (the “Private Placement”) pursuant to a Securities Purchase Agreement that is related to the Merger. If the Merger is not completed, we may have to recognize these expenses without realizing the expected benefits of the Merger. In addition, we also expect to incur a number of non-recurring transaction-related costs associated with combining the operations of the two companies and achieving desired synergies. Additional unanticipated costs may be incurred in the integration of our business with the business of Premier Financial. There can be no assurance that the elimination of certain duplicative costs, as well as the realization of other efficiencies related to the integration of the two businesses, will offset the incremental transaction-related costs over time. Thus, any net benefit may not be achieved in the near term, the long term or at all. 56 Our pending acquisition of Premier Financial is subject to conditions, including certain conditions that may not be satisfied, and may not be completed on a timely basis, or at all. In addition, the Merger Agreement may be terminated in certain circumstances. Failure to complete the Merger could have material and adverse effects on us. The completion of the Merger is subject to a number of conditions, which make the completion and timing of the completion of the Merger uncertain. In addition, the Merger Agreement may be terminated in certain circumstances. If the Merger is not completed on a timely basis, or at all, our ongoing business may be adversely affected and, without realizing any of the benefits of having completed the Merger, we and Premier Financial will be subject to a number of risks, including the following: • we will be required to pay certain costs relating to the Merger and the Private Placement, whether or not the Merger is completed, such as legal, accounting, financial advisor and printing fees; • under the Merger Agreement, we are subject to certain restrictions on the conduct of our respective businesses prior to completing the Merger, which may adversely affect our ability to execute certain of our respective business strategies; • time and resources committed by our management to matters relating to the Merger could otherwise have been devoted to pursuing other beneficial opportunities; and • the market price of our common stock could decline to the extent that the current market prices reflect a market assumption that the Merger will not be completed In addition, if the Merger is not completed, we may experience negative reactions from the financial markets and from our customers and employees. We also could be subject to litigation related to any failure to complete the Merger or to enforcement proceedings commenced against us to perform our obligations under the Merger Agreement. If the Merger is not completed, we cannot assure its shareholders that the risks described above will not materialize and will not adversely affect the business, financial results and market price of our Common Stock. We are subject to business uncertainties and contractual restrictions while the Merger is pending, which could adversely affect our business and operations. Under the terms of the Merger Agreement, we are subject to certain restrictions on the conduct of our business prior to completing the Merger, which may adversely affect our ability to execute certain of our business strategies. Such limitations could negatively affect our businesses and operations prior to the completion of the Merger. Furthermore, the process of planning to integrate two businesses and organizations for the post-Merger period can divert management attention and resources and could ultimately have an adverse effect on us. In connection with the Merger, parties with which we do business may experience uncertainty associated with the Merger, including with respect to current or future business relationships with us or the combined business. It is possible that some customers, suppliers and other persons with whom we have a business relationship may delay or defer certain business decisions or might decide to seek to terminate, change or renegotiate their relationships with us as a result of the Merger, which could negatively affect our revenues, earnings and cash flows, as well as the market price of shares of our common stock, regardless of whether the Merger is completed. The market price of our common stock may decline in the future as a result of the Merger. The market price of our common stock may decline in the future as a result of the Merger for a number of reasons, including due to: • an unsuccessful integration of Premier Financial (including for the reasons set forth in the preceding risk factors); or • the failure of the combined company to achieve the perceived benefits of the Merger, including financial results, as rapidly as or to the extent anticipated by financial or industry analysts. These factors are, to some extent, beyond our control. As a consequence, our shareholders could lose the value of their investment in our common stock. 57