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Section 1: S-4/A (S-4/A)

S-4/A
Table of Contents

As filed with the Securities and Exchange Commission on September 23, 2019

Registration No. 333-233435

 

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

AMENDMENT NO. 1

TO

Form S-4

REGISTRATION STATEMENT

UNDER

THE SECURITIES ACT OF 1933

 

 

WESBANCO, INC.

(Exact name of registrant as specified in its charter)

 

West Virginia   6021   55-0571723
(State or other jurisdiction of   (Primary Standard Industrial   (I.R.S. Employer
incorporation or organization)   Classification Code Number)   Identification No.)

 

1 Bank Plaza

Wheeling, West Virginia 26003

(304) 234-9000

(Address, including zip code,

and telephone number, including

area code of registrant’s principal executive offices)

  

Todd F. Clossin

President and Chief Executive Officer

Wesbanco, Inc.

1 Bank Plaza

Wheeling, West Virginia 26003

(304) 234-9000

(Name, address, including zip code,

and telephone number, including

area code, of agent for service)

 

 

With Copies to:

 

James C. Gardill, Esq.   Paul C. Cancilla, Esq.   Frank C. Bonaventure, Jr., Esq.
Phillips, Gardill, Kaiser &   K&L Gates LLP   Baker, Donelson, Bearman, Caldwell
Altmeyer, PLLC   K&L Gates Center   & Berkowitz, PC
61 Fourteenth Street   210 Sixth Avenue   100 Light Street
Wheeling, West Virginia 26003   Pittsburgh, PA 15222-2613   Baltimore, Maryland 21202
(304) 232-6810   (412) 355-6500   (410) 685-1120

 

 

Approximate date of commencement of the proposed sale of the securities to the public: As soon as practicable after this registration statement becomes effective and upon completion of the merger.

If the securities being registered on this Form are being offered in connection with the formation of a holding company and there is compliance with General Instruction G, check the following box.  ☐

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  ☐

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):

 

Large accelerated filer      Accelerated filer  
Non-accelerated filer      Smaller reporting company  
     Emerging growth company  

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided purchase to Section 7(a)(2)(B) of the Securities Act.  ☐

If applicable, place an X in the box to designate the appropriate rule provision relied upon in conducting this transaction:

Exchange Act Rule 13e-4(i) (Cross-Border Issuer Tender Offer)  ☐

Exchange Act Rule 14d-1(d) (Cross-Border Third-Party Tender Offer)  ☐

 

 

The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933, as amended, or until the Registration Statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine.

 

 

 


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The information in this joint proxy statement/prospectus is not complete and may be changed. Wesbanco, Inc. may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This joint proxy statement/prospectus does not constitute an offer to sell or a solicitation of an offer to buy any securities in any jurisdiction where an offer, solicitation or sale is not permitted.

 

PRELIMINARY — SUBJECT TO COMPLETION — DATED SEPTEMBER 23, 2019

 

   LOGO    LOGO  

MERGER PROPOSAL — YOUR VOTE IS VERY IMPORTANT

The board of directors of Wesbanco, Inc., or Wesbanco, and the board of directors of Old Line Bancshares, Inc., or Old Line Bancshares, have agreed to a merger of the two companies, which we refer to as the “merger,” under the terms and subject to the conditions of the Agreement and Plan of Merger, dated as of July 23, 2019, and referred to in this document as the “merger agreement,” by and among Wesbanco, Wesbanco Bank, Inc., Old Line Bancshares and Old Line Bank. At the effective time of the merger, Old Line Bancshares will merge with and into Wesbanco with Wesbanco continuing as the surviving corporation. Immediately following the merger, Old Line Bank, Old Line Bancshares’ wholly-owned bank subsidiary, will merge with and into Wesbanco Bank, Inc., Wesbanco’s wholly-owned bank subsidiary, which we refer to as the “bank merger,” with Wesbanco Bank, Inc. surviving the bank merger.

If the merger is completed, each share of common stock, $0.01 par value per share, of Old Line Bancshares (“Old Line Bancshares common stock”) outstanding immediately prior to the effective time of the merger will be converted into the right to receive 0.7844 of a share of common stock, $2.0833 par value per share, of Wesbanco (“Wesbanco common stock”), subject to adjustment as described in the merger agreement, which we sometimes refer to as the “merger consideration” or the “exchange ratio.” The number of shares of Wesbanco common stock that Old Line Bancshares stockholders will receive for the merger consideration is fixed, so that the market value of those shares will fluctuate with the market price of Wesbanco common stock and will not be known at the time that either the Wesbanco shareholders or the Old Line Bancshares stockholders vote on the merger. Based on the closing price of Wesbanco’s common stock of $37.69 on the Nasdaq Global Select Market on July 23, 2019, the last full trading day immediately prior to the public announcement of the merger agreement, the value of the per share merger consideration payable to Old Line Bancshares stockholders was $29.56. Based on the $37.67 closing price of Wesbanco’s common stock on September 19, 2019 the last practicable trading day before the date of this joint proxy statement/prospectus, the value of the per share merger consideration payable to Old Line Bancshares stockholders was $29.55. We urge you to obtain current market quotations for Wesbanco common stock (Nasdaq trading symbol “WSBC”) and Old Line Bancshares common stock (Nasdaq trading symbol “OLBK”). Based on the exchange ratio and the number of shares of Old Line Bancshares common stock outstanding as of September 23, 2019, the number of shares that may be issued under various equity plans of Old Line Bancshares and shares that may be issued upon exercise of outstanding stock options, the estimated maximum number of shares of Wesbanco common stock issuable in the merger is expected to be approximately 13,554,745 shares.

Wesbanco and Old Line Bancshares will each hold a special meeting of their shareholders and stockholders in connection with the merger. The Wesbanco special meeting will be held in the 7th Floor Board Room of Wesbanco’s offices located at One Bank Plaza, Wheeling, West Virginia, 26003, on October 29, 2019, at 12:00 p.m. Eastern Time. At the Wesbanco special meeting, Wesbanco shareholders will be asked to vote to approve: (1) the merger agreement; (2) the issuance of shares of Wesbanco common stock in connection with the merger as contemplated by the merger agreement; and (3) adjournment of the Wesbanco special meeting, if necessary, to solicit additional proxies in favor of the approval of the merger agreement or the issuance of shares of Wesbanco common stock in connection with the merger.

The Old Line Bancshares special meeting will be held at Old Line Bancshares’ office located at 1525 Pointer Ridge Place, Bowie, Maryland, on October 29, 2019, at 10:00 a.m. Eastern Time. At the Old Line Bancshares special meeting, Old Line Bancshares stockholders will be asked to vote to approve: (1) the merger; (2) in a non-binding advisory vote, of the compensation payable to the named executive officers of Old Line Bancshares in connection with the merger; and (3) the adjournment of the Old Line Bancshares special meeting, if necessary, to solicit additional proxies in favor of the approval of the merger.

Your vote is very important. Whether or not you plan to attend your special meeting, please take the time to vote by completing and mailing the enclosed proxy card or by voting over the Internet or by telephone in accordance with the instructions on the proxy card. If you attend your special meeting and vote in person, your vote by ballot will revoke any proxy previously submitted. We cannot complete the merger unless Old Line Bancshares stockholders approve the merger and Wesbanco shareholders approve the merger agreement and the issuance of shares of Wesbanco common stock in connection with the merger.

The accompanying joint proxy statement/prospectus provides you with information about Old Line Bancshares, Wesbanco, the proposed merger, the documents related to the merger and the separate special meetings of Wesbanco shareholders and Old Line Bancshares stockholders. We encourage you to carefully and thoughtfully read this entire document, including all its annexes, and we especially encourage you to read the section entitled Risk Factors beginning on page 28. You also can obtain information about Wesbanco and Old Line Bancshares from publicly available documents filed with the Securities and Exchange Commission.

The Wesbanco board of directors recommends that Wesbanco shareholders vote “FOR” the proposal to approve the merger agreement; “FOR” the proposal to approve the issuance of shares of Wesbanco common stock in connection with the merger and “FOR” the proposal to approve the adjournment of the Wesbanco special meeting, if necessary, to solicit additional proxies in favor of the approval of the merger agreement or approval of the issuance of shares of Wesbanco common stock in connection with the merger.

The Old Line Bancshares board of directors recommends that Old Line Bancshares stockholders vote “FOR” the proposal to approve the merger, “FOR” the proposal to approve, on a non-binding, advisory basis, the compensation payable to the named executive officers of Old Line Bancshares in connection with the merger, and “FOR” the proposal to adjourn the Old Line Bancshares special meeting, if necessary, to solicit additional proxies if there are not sufficient votes to approve the merger at the scheduled time of the special meeting.

We strongly support this combination of our companies and look forward to the successful completion of the merger.

 

LOGO

 

Todd F. Clossin

President and Chief Executive Officer

Wesbanco, Inc.

  

LOGO

 

James W. Cornelsen

President and Chief Executive Officer

Old Line Bancshares, Inc.

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this joint proxy statement/prospectus is truthful or complete. Any representation to the contrary is a criminal offense. The securities Wesbanco is offering through this joint proxy statement/prospectus are not savings or deposit accounts or other obligations of any bank or savings association, and they are not insured by the Federal Deposit Insurance Corporation or any other governmental agency.

This document incorporates important business and financial information about Wesbanco and Old Line Bancshares that is not included in or delivered with this document. This information is available without charge upon written or oral request at the applicable company’s address and telephone number listed under the heading “Additional Information.” In order to ensure timely delivery, you must request Wesbanco information no later than five business days prior to the date of the Wesbanco special meeting, or October 22, 2019 and you must request Old Line Bancshares information no later than five business days prior to the date of the Old Line Bancshares special meeting, or October 22, 2019. Please see “Where You Can Find More Information About Wesbanco and Old Line Bancshares” for instructions to request this and certain other information regarding Wesbanco and Old Line Bancshares.

This joint proxy statement/prospectus is dated September 23, 2019, and is first being mailed to Wesbanco shareholders and Old Line Bancshares stockholders on or about September 26, 2019.


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LOGO

1 Bank Plaza

Wheeling, WV 26003

NOTICE OF SPECIAL MEETING OF SHAREHOLDERS

To Be Held on October 29, 2019

Notice is hereby given that a special meeting of shareholders of Wesbanco, Inc. (“Wesbanco”), a West Virginia corporation, will be held in the 7th Floor Board Room of Wesbanco’s offices located at One Bank Plaza, Wheeling, West Virginia, 26003, on October 29, 2019, at 12:00 p.m. Eastern Time, to consider and vote upon the following matters described in the accompanying joint proxy statement/prospectus:

1. A proposal to approve the Agreement and Plan of Merger, dated as of July 23, 2019, as it may be amended from time to time, by and among Wesbanco, Wesbanco Bank, Inc., a West Virginia corporation and a wholly-owned subsidiary of Wesbanco, Old Line Bancshares, Inc. a Maryland corporation (“Old Line Bancshares”), and Old Line Bank, a Maryland-chartered trust company exercising the powers of a commercial bank and a wholly-owned subsidiary of Old Line Bancshares, which we refer to as the merger agreement, which provides for, among other things, the merger of Old Line Bancshares with and into Wesbanco, with Wesbanco as the surviving entity, which we refer to as the merger, as more fully described in the attached joint proxy statement/prospectus.

2. A proposal to approve the issuance of shares of Wesbanco common stock, par value $2.0833 per share, pursuant to the merger agreement in connection with the merger.

3. A proposal to approve the adjournment of the Wesbanco special meeting, if necessary, to permit further solicitation of proxies if there are not sufficient votes at the time of the Wesbanco special meeting to approve the merger agreement and the issuance of shares of Wesbanco common stock pursuant to the merger agreement.

The merger agreement is more completely described in the accompanying joint proxy statement/prospectus, and a copy of the merger agreement is attached as Annex A to the joint proxy statement/prospectus. Please review these materials carefully and consider fully the information set forth therein.

Only holders of record of Wesbanco common stock at the close of business on September 23, 2019 will be entitled to notice of, and to vote at, the Wesbanco special meeting and any adjournment thereof. Approval of each of the proposals requires the affirmative vote of a majority of the votes cast on the proposal assuming that a quorum is present.

The Wesbanco board of directors has carefully considered the terms of the merger agreement and has approved the merger agreement and believes that the merger is in the best interests of Wesbanco and its shareholders. The board of directors of Wesbanco recommends that shareholders vote “FOR” approval of the merger agreement, “FOR” approval of the issuance of shares of Wesbanco common stock in connection with the merger and “FOR” the adjournment of the Wesbanco special meeting, if necessary, to solicit additional proxies in favor of the approval of the merger agreement or the approval of the issuance of shares of Wesbanco common stock in connection with the merger.

Your vote is important. Whether or not you plan to attend the Wesbanco special meeting in person, we urge you to read the joint proxy statement/prospectus carefully and to submit a proxy as promptly as possible by (1) accessing the Internet website specified on your proxy card, (2) calling the toll-free number specified on your proxy card or (3) marking, signing, dating and returning the enclosed proxy card, so that your shares may be represented and voted at the Wesbanco special meeting. This will assure your representation at the Wesbanco special meeting and may avoid the cost of additional communications. This will not prevent you from voting in person at the Wesbanco special meeting. You may revoke your proxy at any time before it is voted by signing and returning a later-dated proxy with respect to the same shares, by filing with the Secretary of Wesbanco a written revocation bearing a later date, by submitting a later-dated proxy by telephone or the Internet before the vote at the Wesbanco special meeting, or by attending and voting in person at the Wesbanco special meeting.

The enclosed joint proxy statement/prospectus provides a detailed description of the Wesbanco special meeting, the merger, the documents related to the merger, and other related matters. We urge you to read the joint proxy statement/prospectus, including any documents incorporated in the joint proxy statement/prospectus by reference, and its annexes carefully and in their entirety.

By Order of the Board of Directors

 

LOGO

Linda M. Woodfin

Secretary

Wheeling, West Virginia

September 23, 2019

 

YOUR VOTE IS VERY IMPORTANT

TO VOTE YOUR SHARES, PLEASE COMPLETE, DATE, SIGN AND MAIL THE ENCLOSED PROXY CARD OR VOTE BY TELEPHONE OR INTERNET PRIOR TO THE WESBANCO SPECIAL MEETING, WHETHER OR NOT YOU PLAN TO ATTEND THE SPECIAL MEETING.


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LOGO

1525 Pointer Ridge Place

Bowie, Maryland 20716

NOTICE OF SPECIAL MEETING OF STOCKHOLDERS

To Be Held On October 29, 2019

Notice is hereby given that a special meeting of the stockholders of Old Line Bancshares, Inc. (“Old Line Bancshares”), a Maryland corporation, will be held at Old Line Bancshares’ office located at 1525 Pointer Ridge Place, Bowie, Maryland, on October 29, 2019, at 10:00 a.m. Eastern Time, to consider and vote upon the following proposals described in the accompanying joint proxy statement/prospectus:

1. A proposal to approve the merger of Old Line Bancshares, Inc. (“Old Line Bancshares”) with and into Wesbanco, Inc. (“Wesbanco”) with Wesbanco as the surviving entity (the “merger”), pursuant to an Agreement and Plan of Merger, dated as of July 23, 2019, as it may be amended from time to time, by and among Wesbanco, Wesbanco Bank, Inc., a West Virginia corporation and a wholly-owned subsidiary of Wesbanco, Old Line Bancshares and Old Line Bank, a Maryland-chartered trust company exercising the powers of a commercial bank and a wholly-owned subsidiary of Old Line Bancshares, as more fully described in the attached joint proxy statement/prospectus.

2. A proposal to approve, in a non-binding advisory vote, the compensation payable to the named executive officers of Old Line Bancshares in connection with the merger.

3. A proposal to approve the adjournment of the Old Line Bancshares special meeting, if necessary, to permit further solicitation of proxies if there are not sufficient votes at the time of the Old Line Bancshares special meeting to approve the proposal to approve the merger.

Only holders of record of Old Line Bancshares common stock at the close of business on September 23, 2019 will be entitled to notice of, and to vote at, the Old Line Bancshares special meeting and any adjournment thereof. Provided that a quorum exists for the special meeting, approval of the merger requires the affirmative vote of a majority of the outstanding shares of Old Line Bancshares common stock entitled to vote thereon. Approval of each of the other proposals to be voted on at the Old Line Bancshares special meeting requires the affirmative vote of a majority of all votes cast in person or by proxy at the special meeting.

The Old Line Bancshares board of directors has carefully considered the terms of the merger agreement and believes that the merger agreement and the merger are advisable on substantially the terms and conditions set forth in the merger agreement and that the merger is in the best interests of Old Line Bancshares and its stockholders. The Old Line Bancshares board of directors has approved the merger agreement and recommends that stockholders vote: “FOR” approval of the merger; “FOR” approval, in a non-binding advisory vote, of the compensation payable to the named executive officers of Old Line Bancshares in connection with the merger; and “FOR” the adjournment of the Old Line Bancshares special meeting if necessary to solicit additional proxies in favor of the approval of the merger. In considering the recommendation of the board of directors of Old Line Bancshares, you should be aware that certain directors and executive officers of Old Line Bancshares will have interests in the merger that may be different from, or in addition to, the interests of Old Line Bancshares stockholders generally. See the section entitled “The Merger — Interests of Certain Persons the Merger” of the accompanying joint proxy statement/prospectus. In addition, all of the executive officers and directors (and one former director) of Old Line Bancshares have entered into voting agreements with Wesbanco in which he or she has agreed to vote his or her Old Line Bancshares shares of common stock in favor of approval of the merger. See “Other Material Agreements Relating to the Merger — Voting Agreements.”

Your vote is very important. Whether or not you plan to attend the Old Line Bancshares special meeting in person, we urge you to read the joint proxy statement/prospectus carefully and to submit a proxy as promptly as possible by (1) accessing the Internet website specified on your proxy card, (2) calling the toll-free number specified on your proxy card or (3) marking, signing, dating and returning the enclosed proxy card, so that your shares may be represented and voted at the Old Line Bancshares special meeting. This will assure your representation at the Old Line Bancshares special meeting and may avoid the cost of additional communications. This will not prevent you from voting in person at the Old Line Bancshares special meeting. You may revoke your proxy at any time before it is voted by signing and returning a later-dated proxy with respect to the same shares, by filing with the Secretary of Old Line Bancshares a written revocation bearing a later date, by submitting a later-dated proxy by telephone or the Internet before the vote at the Old Line Bancshares special meeting, or by attending and voting in person at the Old Line Bancshares special meeting. If you fail to submit a proxy or to attend the Old Line Bancshares special meeting in person or do not provide your bank, brokerage firm or other nominee with instructions as to how to vote your shares, as applicable, your shares of Old Line Bancshares common stock will not be counted for purposes of determining whether a quorum is present at the Old Line Bancshares special meeting and will have the same effect as a vote AGAINST the merger.

The enclosed joint proxy statement/prospectus provides a detailed description of the Old Line Bancshares special meeting, the merger, the documents related to the merger, and other related matters. We urge you to read the joint proxy statement/prospectus, including any documents incorporated in the joint proxy statement/prospectus by reference, and its annexes carefully and in their entirety.

By Order of the Board of Directors,

 

LOGO

Mark A. Semanie

Secretary

Bowie, Maryland

September 23, 2019

 

YOUR VOTE IS VERY IMPORTANT

TO VOTE YOUR SHARES, PLEASE COMPLETE, DATE, SIGN AND MAIL THE ENCLOSED PROXY CARD OR VOTE BY TELEPHONE OR INTERNET PRIOR TO THE OLD LINE BANCSHARES SPECIAL MEETING, WHETHER OR NOT YOU PLAN TO ATTEND THE SPECIAL MEETING.


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ADDITIONAL INFORMATION

This joint proxy statement/prospectus incorporates by reference important business and financial information about Wesbanco, Inc., which we refer to in this joint proxy statement/prospectus as Wesbanco, and Old Line Bancshares, Inc., which we refer to in this joint proxy statement/prospectus as Old Line Bancshares, that is not included in or delivered with this document. You should refer to “Where You Can Find More Information About Wesbanco and Old Line Bancshares” for a description of the documents incorporated by reference into this joint proxy statement/prospectus. You can obtain documents related to Wesbanco and Old Line Bancshares that are incorporated by reference into this document through the website of the Securities and Exchange Commission, which we refer to as the SEC, at www.sec.gov, through Wesbanco’s website at www.wesbanco.com and through Old Line Bancshares’ website at www.oldlinebank.com. Please note that the Internet website addresses of Wesbanco and Old Line Bancshares are provided as inactive textual references only. The information provided on the Internet websites of Wesbanco and Old Line Bancshares, other than copies of the documents that have been filed with the SEC and are specifically incorporated by reference into this joint proxy statement/prospectus by reference, is not part of this joint proxy statement/prospectus and, therefore, is not incorporated herein by reference. You may also obtain copies of these documents, including documents incorporated by reference into this joint proxy statement/prospectus, without charge by requesting them in writing or by telephone from the appropriate company or company’s proxy solicitor:

 

If you are a Wesbanco shareholder:

 

  

If you are an Old Line Bancshares stockholder:

 

Wesbanco’s Proxy Solicitor:

Georgeson LLC

1290 Avenue of the Americas, 9th Floor,

New York, New York 10104

Banks, Brokers and Shareholders Call

Toll-Free (888) 607-9107

 

Or

 

Wesbanco, Inc.

Attn: Linda M. Woodfin, Secretary

One Bank Plaza

Wheeling, West Virginia 26003

(304) 234-9000

  

Old Line Bancshares’ Proxy Solicitor:

D.F. King & Co., Inc.

48 Wall Street, 22nd Floor

New York, New York 10005

Email: [email protected]

Banks and Brokers Call Collect: (212) 269-5550

All Others Call Toll-Free: (866) 342-4881

 

Or

 

Old Line Bancshares, Inc.

Attn: Mark A. Semanie, Secretary

1525 Pointer Ridge Place

Bowie, Maryland 20716

(301) 430-2500

In order to ensure timely delivery, you must request Wesbanco information no later than five business days prior to the date of the Wesbanco special meeting, or October 22, 2019 and you must request Old Line Bancshares information no later than five business days prior to the date of the Old Line Bancshares special meeting, or October 22, 2019. You will not be charged for any of these documents that you request. For further information about Wesbanco and Old Line Bancshares, please see “Where You Can Find More Information About Wesbanco and Old Line Bancshares.”

ABOUT THIS JOINT PROXY STATEMENT/PROSPECTUS

This joint proxy statement/prospectus serves two purposes — it is a proxy statement being used by the Wesbanco board of directors and the Old Line Bancshares board of directors to solicit proxies for use at their respective special meetings, and it is also the prospectus of Wesbanco regarding the issuance of Wesbanco common stock to Old Line Bancshares stockholders if the merger is completed. This joint proxy statement/prospectus provides you with detailed information about the proposed merger of Old Line Bancshares with and into Wesbanco. We encourage you to read this entire joint proxy statement/prospectus carefully. Wesbanco has filed a registration statement on Form S-4 with the SEC, and this joint proxy statement/prospectus is the prospectus filed as part of that registration statement. This joint proxy statement/prospectus does not contain all of the information in the registration statement, nor does it include the exhibits to the registration statement. Please see “Where You Can Find More Information About Wesbanco and Old Line Bancshares.”

You should rely only on the information contained in or incorporated by reference into this joint proxy statement/prospectus. No one has been authorized to provide you with information that is different from that contained in or incorporated by reference into this joint proxy statement/prospectus. This joint proxy statement/prospectus is dated September 23, 2019.

You should not assume that the information contained in this joint proxy statement/prospectus is accurate as of any date other than the date hereof. You should not assume that the information contained in any document incorporated or deemed to be incorporated by reference herein is accurate as of any date other than the date of that document. Any statement contained in a document incorporated or deemed to be incorporated by reference into this joint proxy statement/prospectus will be deemed to be modified or superseded to the extent that a statement contained herein or in any other subsequently-filed document that also is or is deemed to be incorporated by reference into this joint proxy statement/prospectus modifies or supersedes that statement. Any statement so modified or superseded will not be deemed, except as so modified or superseded, to constitute a part of this joint proxy statement/prospectus. Neither the mailing of this joint proxy statement/prospectus to the Wesbanco shareholders or Old Line Bancshares stockholders nor the taking of any actions contemplated hereby by Wesbanco or Old Line Bancshares at any time will create any implication to the contrary.

This joint proxy statement/prospectus does not constitute an offer to sell, or a solicitation of an offer to buy, any securities, or the solicitation of a proxy, in any jurisdiction in which or from any person to whom it is not lawful to make any such offer or solicitation in such jurisdiction. Except where the context otherwise indicates, information contained in this document regarding Old Line Bancshares has been provided by Old Line Bancshares and information contained in this document regarding Wesbanco has been provided by Wesbanco.


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TABLE OF CONTENTS

 

QUESTIONS AND ANSWERS

     1  

SUMMARY

     11  

COMPARATIVE PER SHARE MARKET PRICES AND IMPLIED VALUE OF MERGER CONSIDERATION

     22  

SELECTED HISTORICAL FINANCIAL DATA OF WESBANCO

     23  

SELECTED HISTORICAL FINANCIAL DATA OF OLD LINE BANCSHARES

     24  

SELECTED UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

     25  

COMPARATIVE PER SHARE DATA

     26  

RISK FACTORS

     28  

THE WESBANCO SPECIAL MEETING

     35  

General

     35  

Date, Time and Place of the Special Meeting

     35  

Matters to be Considered

     35  

Recommendation of Wesbanco’s Board of Directors

     35  

Record Date; Stock Entitled to Vote; Broker Voting; Quorum

     35  

Required Vote; Treatment of Abstentions, Broker Non-Votes and Failures to Vote

     36  

Shares Held by Wesbanco Officers and Directors and their Affiliates

     36  

Voting of Proxies

     37  

Participants in the Wesbanco KSOP

     37  

Revocation of Proxies

     37  

Expenses of Solicitation of Proxies

     38  

Attending the Wesbanco Special Meeting

     38  

WESBANCO PROPOSALS

     39  

Wesbanco Merger Proposal

     39  

Wesbanco Stock Issuance Proposal

     39  

Wesbanco Adjournment Proposal

     40  

THE OLD LINE BANCSHARES SPECIAL MEETING

     41  

General

     41  

Date, Time and Place of the Special Meeting

     41  

Matters to be Considered

     41  

Recommendation of Old Line Bancshares’ Board of Directors

     41  

Record Date; Stock Entitled to Vote; Broker Voting; Quorum

     41  

Required Vote; Treatment of Abstentions, Broker Non-Votes and Failures to Vote

     42  

Shares Held by Old Line Bancshares Officers and Directors and their Affiliates

     43  

Voting of Proxies

     43  

Revocation of Proxies

     43  

Expenses of Solicitation of Proxies

     44  

Attending the Old Line Bancshares Special Meeting

     44  

OLD LINE BANCSHARES PROPOSALS

     45  

Old Line Bancshares Merger Proposal

     45  

Old Line Bancshares Merger-Related Compensation Proposal

     45  

Old Line Bancshares Adjournment Proposal

     46  

THE MERGER

     47  

Terms of the Merger

     47  

Old Line Bancshares’ Stockholders Will Receive Wesbanco Common Stock in the Merger

     47  

Wesbanco Shareholders Will Not Receive Any Cash, Stock or Other Consideration in the Merger

     47  

Treatment of Old Line Bancshares Equity-Based Awards

     47  

Effects of the Merger

     48  

Exchange and Payment Procedures

     48  

 

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Benefit Agreements

     49  

Background of the Merger

     51  

Wesbanco’s Reasons for the Merger and Recommendation of the Wesbanco Board of Directors

     56  

Opinion of Wesbanco’s Financial Advisor

     58  

Old Line Bancshares’ Reasons for the Merger and Recommendation of the Old Line Bancshares Board of Directors

     75  

Opinion of Old Line Bancshares’ Financial Advisor

     77  

Certain Wesbanco Prospective Financial Information

     89  

Certain Old Line Bancshares Prospective Financial Information

     90  

Interests of Certain Persons in the Merger

     91  

Merger-Related Compensation for Old Line Bancshares Named Executive Officers

     95  

Regulatory Approvals

     96  

No Dissenters’ or Appraisal Rights for Old Line Bancshares Stockholders or Wesbanco Shareholders

     98  

Delisting and Deregistration of Old Line Bancshares Common Stock Following the Merger

     98  

Shares to be Issued by Wesbanco in the Merger; Ownership of Wesbanco after the Merger

     98  

Management Following the Merger

     98  

Accounting Treatment

     98  

Material U.S. Federal Income Tax Consequences of the Merger

     99  

Representations and Warranties

     101  

Conduct of Business Prior to the Merger

     103  

Conditions to the Merger

     108  

Termination of the Merger Agreement

     109  

Expenses

     111  

Termination Fee

     111  

Amendment or Waiver

     113  

Effective Date of the Merger

     113  

OTHER MATERIAL AGREEMENTS RELATING TO THE MERGER

     114  

Voting Agreements

     114  

UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

     115  

INFORMATION ABOUT WESBANCO

     124  

INFORMATION ABOUT OLD LINE BANCSHARES

     125  

COMPARATIVE RIGHTS OF WESBANCO SHAREHOLDERS AND OLD LINE BANCSHARES STOCKHOLDERS

     126  

WHERE YOU CAN FIND MORE INFORMATION ABOUT WESBANCO AND OLD LINE BANCSHARES

     134  

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

     136  

DEADLINES FOR SUBMITTING FUTURE SHAREHOLDER OR STOCKHOLDER PROPOSALS

     138  

LEGAL MATTERS

     139  

EXPERTS

     140  

Annex A — Agreement and Plan of Merger

 

Annex B — Opinion of D. A. Davidson & Co.

 

Annex C — Opinion of Keefe, Bruyette & Woods, Inc.

 

 

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QUESTIONS AND ANSWERS

The following are some questions that you, as a shareholder of Wesbanco or a stockholder of Old Line Bancshares, may have regarding the merger and the other matters being considered at the special meetings and the answers to those questions. Wesbanco and Old Line Bancshares strongly recommend that you carefully read the remainder of this document because the information in this section does not provide all the information that might be important to you with respect to the merger and the other matters being considered at the special meetings. Additional important information is also contained in the annexes to, and the documents incorporated by reference into, this document. See “Where You Can Find More Information About Wesbanco and Old Line Bancshares.”

 

Q:

Why have I received this joint proxy statement/prospectus?

 

A:

Wesbanco and Old Line Bancshares have entered into a merger agreement, dated as of July 23, 2019, which, as it may be amended, supplemented or modified from time to time, we refer to in this joint proxy statement/prospectus as the merger agreement, providing for Old Line Bancshares to be merged with and into Wesbanco, which we refer to in this joint proxy statement/prospectus as the merger, with Wesbanco continuing as the surviving corporation. A copy of the merger agreement is attached to this joint proxy statement/prospectus as Annex A, which we encourage you to review.

This joint proxy statement/prospectus constitutes a proxy statement of Wesbanco and Old Line Bancshares and a prospectus of Wesbanco. It is a proxy statement because the boards of directors of Wesbanco and Old Line Bancshares are soliciting proxies from their respective shareholders and stockholders. It is a prospectus because Wesbanco will issue shares of Wesbanco common stock in exchange for shares of Old Line Bancshares common stock in the merger. This document contains important information about the merger and the special meetings of Wesbanco shareholders and Old Line Bancshares stockholders and you should read it carefully. The enclosed voting materials allow you to vote your shares without attending your applicable special meeting.

In order to complete the merger, Wesbanco shareholders must vote to approve the merger agreement and approve the issuance of shares of Wesbanco common stock in connection with the merger and Old Line Bancshares stockholders must vote to approve the merger. IF WESBANCO SHAREHOLDERS FAIL TO APPROVE THE MERGER AGREEMENT OR THE ISSUANCE OF SHARES OF WESBANCO COMMON STOCK IN CONNECTION WITH THE MERGER, THE MERGER WILL NOT BE COMPLETED. SIMILARLY, IF OLD LINE BANCSHARES STOCKHOLDERS FAIL TO APPROVE THE MERGER, THE MERGER CANNOT BE COMPLETED.

Your vote is very important. The boards of directors of Wesbanco and Old Line Bancshares encourage you to vote as soon as possible.

 

Q:

What matters are to be voted on at the Wesbanco special meeting?

 

A:

At the Wesbanco special meeting, holders of Wesbanco common stock as of the close of business on September 23, 2019 will be asked to consider and vote upon:

 

  1.

A proposal to approve the merger agreement, which we refer to in this joint proxy statement/prospectus as the Wesbanco Merger Proposal;

 

  2.

A proposal to approve the issuance of shares of Wesbanco common stock in connection with the merger, which we refer to in this joint proxy statement/prospectus as the Wesbanco Stock Issuance Proposal; and

 

  3.

A proposal to approve the adjournment of the Wesbanco special meeting, if necessary, to permit further solicitation of proxies if there are not sufficient votes at the time of the Wesbanco special meeting to



 

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  approve the Wesbanco Merger Proposal and to approve the Wesbanco Stock Issuance Proposal, which we refer to in this joint proxy statement/prospectus as the Wesbanco Adjournment Proposal.

 

Q:

What matters are to be voted on at the Old Line Bancshares special meeting?

 

A:

At the Old Line Bancshares special meeting, holders of Old Line Bancshares common stock as of the close of business on September 23, 2019 will be asked to consider and vote upon:

 

  1.

A proposal to approve the merger, which we refer to in this joint proxy statement/prospectus as the Old Line Bancshares Merger Proposal;

 

  2.

A proposal to approve, in a non-binding advisory vote, the compensation payable to the named executive officers of Old Line Bancshares in connection with the merger, which we refer to in this joint proxy statement/prospectus as the Old Line Bancshares Merger-Related Compensation Proposal; and

 

  3.

A proposal to approve the adjournment of the Old Line Bancshares special meeting, if necessary, to permit further solicitation of proxies if there are not sufficient votes at the time of the Old Line Bancshares special meeting to approve the Old Line Bancshares Merger Proposal, which we refer to in this joint proxy statement/prospectus as the Old Line Bancshares Adjournment Proposal.

 

Q:

What will Old Line Bancshares stockholders receive as a result of the merger?

 

A:

Old Line Bancshares stockholders will receive 0.7844 of a share of Wesbanco common stock, subject to adjustment as described in the merger agreement, which we refer to as the merger consideration or the exchange ratio, in exchange for each share of Old Line Bancshares common stock. Instead of fractional shares of Wesbanco common stock, Old Line Bancshares stockholders will receive a check for any fractional shares based on the average closing price of Wesbanco common stock during a specified period before the effective time of the merger.

Because the number of shares of Wesbanco common stock that Old Line Bancshares stockholders will receive for the merger consideration is fixed, the implied value of the merger consideration will fluctuate as the market price of Wesbanco common stock fluctuates. As a result, the value of the merger consideration that Old Line Bancshares stockholders will receive upon completion of the merger could be greater than, less than or the same as the value of the merger consideration on the date of this joint proxy statement/prospectus, at the time of the Wesbanco special meeting or at the time of the Old Line Bancshares special meeting. You should obtain current stock price quotations for Wesbanco common stock and Old Line Bancshares common stock before deciding how to vote. Wesbanco common stock is listed for trading on the Nasdaq Global Select Market under the symbol “WSBC.” Old Line Bancshares common stock is listed for trading on the Nasdaq Capital Market under the symbol “OLBK.”

 

Q:

Will Wesbanco shareholders receive any shares or cash in the merger?

 

A:

No. Wesbanco shareholders will continue to own the same number of shares of Wesbanco common stock that they owned before the merger effective time and will not receive any shares, cash or other consideration.

 

Q:

How will the merger affect Old Line Bancshares equity awards?

 

A:

Stock Options: At the effective time of the merger, each option granted by Old Line Bancshares to purchase shares of Old Line Bancshares common stock that is outstanding and unexercised immediately prior to the effective time, whether vested or unvested, shall without any further action on the part of the holder thereof, be assumed by Wesbanco and converted into an option to purchase from Wesbanco, on the same terms and



 

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  conditions as were applicable under such Old Line Bancshares options, a number of shares of Wesbanco common stock (rounded down to the nearest whole share) determined by multiplying (x) the number of shares of Old Line Bancshares common stock subject to such Old Line Bancshares stock option immediately prior to the effective time by (y) the exchange ratio. The exercise price per share (rounded up to the nearest whole cent) of each Wesbanco stock option issued for the Old Line Bancshares stock option shall equal the quotient obtained by dividing (i) the per share exercise price for each share of Old Line Bancshares common stock subject to such Old Line Bancshares stock option by (ii) the exchange ratio.

Restricted Stock: Immediately prior to the effective time of the merger, each outstanding restricted share of Old Line Bancshares common stock will fully vest and be cancelled and converted automatically into the right to receive the merger consideration, less applicable tax withholdings.

 

Q:

What do the Wesbanco and the Old Line Bancshares boards of directors recommend?

 

A:

Wesbanco. The Wesbanco board of directors has determined that the merger is in the best interests of Wesbanco and Wesbanco’s shareholders and recommends that Wesbanco shareholders vote:

 

   

FOR approval of the Wesbanco Merger Proposal;

 

   

FOR approval of the Wesbanco Stock Issuance Proposal; and

 

   

FOR approval of the Wesbanco Adjournment Proposal.

In making this determination, Wesbanco’s board of directors considered the factors described under “The Merger — Wesbanco’s Reasons for the Merger and Recommendation of the Wesbanco Board of Directors.”

Old Line Bancshares. The Old Line Bancshares board of directors has determined that the merger agreement and the merger are advisable on substantially the terms and conditions set forth in the merger agreement and that the merger is in the best interests of Old Line Bancshares and Old Line Bancshares’ stockholders and recommends that Old Line Bancshares stockholders vote:

 

   

FOR approval of the Old Line Bancshares Merger Proposal;

 

   

FOR approval of the Old Line Bancshares Merger-Related Compensation Proposal; and

 

   

FOR approval of the Old Line Bancshares Adjournment Proposal.

In making this determination, the Old Line Bancshares board of directors considered the factors described under “The Merger — Old Line Bancshares’ Reasons for the Merger and Recommendation of the Old Line Bancshares Board of Directors.”

 

Q:

When and where will the special meetings be held?

 

A:

Wesbanco. The Wesbanco special meeting will be held in the 7th Floor Board Room of Wesbanco’s offices located at One Bank Plaza, Wheeling, West Virginia, 26003, on October 29, 2019, at 12:00 p.m. Eastern Time.

Old Line Bancshares. The Old Line Bancshares special meeting will be held at Old Line Bancshares’ office located at 1525 Pointer Ridge Place, Bowie, Maryland, on October 29, 2019, at 10:00 a.m. Eastern Time.

 

Q:

Who can vote at the special meetings?

 

A:

Wesbanco Special Meeting. Holders of record at the close of business on September 23, 2019, which we refer to in this joint proxy statement/prospectus as the Wesbanco record date, of Wesbanco common stock will be entitled to notice of and to vote at the Wesbanco special meeting. Each of the shares of Wesbanco common stock issued and outstanding on the Wesbanco record date entitles the holder thereof to one vote at the Wesbanco special meeting with regard to each of the proposals described above.



 

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Old Line Bancshares Special Meeting. Holders of record of Old Line Bancshares common stock at the close of business on September 23, 2019, which we refer to in this joint proxy statement/prospectus as the Old Line Bancshares record date, will be entitled to notice of and to vote at the Old Line Bancshares special meeting. Each of the shares of Old Line Bancshares common stock issued and outstanding on the record date entitles the holder thereof to one vote at the Old Line Bancshares special meeting with regard to each of the proposals described above.

 

Q:

When do you expect to complete the merger?

 

A:

We anticipate that we will obtain all necessary regulatory approvals, and be able to consummate the merger, in the fourth quarter of 2019 or the first quarter of 2020. However, we cannot assure you when or if the merger will occur. We must first obtain the requisite approval of Wesbanco shareholders and Old Line Bancshares stockholders at their respective special meetings, and Wesbanco and Old Line Bancshares must obtain the requisite regulatory approvals, to complete the merger.

 

Q:

What happens if the merger is not completed?

 

A:

If the merger is not completed, holders of Old Line Bancshares common stock will not receive any consideration for their shares in connection with the merger. Instead, Old Line Bancshares will remain an independent public company and its common stock will continue to be listed and traded on the Nasdaq Capital Market.

 

Q:

Why are Old Line Bancshares stockholders being asked to consider and vote upon the Old Line Bancshares Merger-Related Compensation Proposal?

 

A:

Under SEC rules, Old Line Bancshares is required to seek a non-binding, advisory vote with respect to the compensation payable to Old Line Bancshares’ named executive officers in connection with the merger, which is sometimes referred to as “golden parachute” compensation.

 

Q:

What will happen if Old Line Bancshares stockholders do not approve the Old Line Bancshares Merger-Related Compensation Proposal?

 

A:

Approval of the Old Line Bancshares Merger-Related Compensation Proposal is not a condition to completion of the merger. The vote is an advisory vote and will not be binding on Old Line Bancshares. Therefore, if Wesbanco shareholders approve the Wesbanco Merger Proposal and the Wesbanco Stock Issuance Proposal and Old Line Bancshares stockholders approve the Old Line Bancshares Merger Proposal and the merger is completed, the compensation payable to Old Line Bancshares’ named executive officers in connection with the merger would still be payable regardless of the outcome of the vote on the Old Line Bancshares Merger-Related Compensation Proposal, subject to applicable conditions.

 

Q:

How do I vote?

 

A:

Wesbanco Shareholders. If you are a shareholder of record of Wesbanco as of the Wesbanco record date, you may vote in person by attending the Wesbanco special meeting or, to ensure your shares are represented at the Wesbanco special meeting, you may vote by:

 

   

accessing the Internet website specified on your proxy card;

 

   

calling the toll-free number specified on your proxy card; or

 

   

signing and returning the enclosed proxy card in the postage-paid envelope provided.



 

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Old Line Bancshares Stockholders. If you are a stockholder of record of Old Line Bancshares as of the Old Line Bancshares record date, you may vote in person by attending the Old Line Bancshares special meeting or, to ensure your shares are represented at the Old Line Bancshares special meeting, you may vote by:

 

   

accessing the Internet website specified on your proxy card;

 

   

calling the toll-free number specified on your proxy card; or

 

   

signing and returning the enclosed proxy card in the postage-paid envelope provided.

If you hold your Wesbanco or Old Line Bancshares shares in the name of a bank, broker, or other nominee, please see the discussion below under the question “My shares are held in my broker’s, bank’s or other nominee’s name (also known as “street name”). How do I vote those shares?”

 

Q:

What vote of Wesbanco shareholders is required to approve each proposal?

 

A:

To be approved, the Wesbanco Merger Proposal, the Wesbanco Stock Issuance Proposal and the Wesbanco Adjournment Proposal each require the affirmative vote of a majority of the votes cast on the proposal assuming that a quorum is present.

As of September 19, 2019, the last date before the date of this joint proxy statement/prospectus for which it was practicable to obtain this information, there were 54,690,225 shares of Wesbanco common stock outstanding and entitled to vote at the Wesbanco special meeting. As of such date, the directors and executive officers of Wesbanco controlled approximately 2.8% of the outstanding shares of Wesbanco common stock entitled to vote at the special meeting.

 

Q:

What vote of Old Line Bancshares stockholders is required to approve each proposal?

 

A:

To be approved, the Old Line Bancshares Merger Proposal requires the affirmative vote of a majority of the outstanding shares of Old Line Bancshares common stock entitled to vote thereon. To be approved, the Old Line Bancshares Merger-Related Compensation Proposal and the Old Line Bancshares Adjournment Proposal each require the affirmative vote of at least a majority of all votes cast on the matter at the special meeting assuming that a quorum is present.

As of September 19, 2019, the last date before the date of this joint proxy statement/prospectus for which it was practicable to obtain this information, there were 16,999,146 shares of Old Line Bancshares common stock outstanding and entitled to vote at the Old Line Bancshares special meeting. As of such date, the directors and executive officers of Old Line Bancshares controlled approximately 6.0% of the outstanding shares of Old Line Bancshares common stock entitled to vote at the special meeting. In addition, all of the executive officers and directors (and one former director) of Old Line Bancshares have entered into voting agreements with Wesbanco in which he or she has agreed to vote his or her Old Line Bancshares shares of common stock in favor of approval of the merger. As of September 19, 2019, the last date before the date of this joint proxy statement/prospectus for which it was practicable to obtain this information, approximately 11.1% of the outstanding shares of Old Line Bancshares common stock were subject to these voting agreements. In addition, as of such date 24,633 shares of Old Line Bancshares common stock were held by the Old Line Bancshares 401(k) Plan and will be voted by the trustees of that plan. Because two of the three trustees are Old Line Bancshares’ executive officers, we expect these shares to be voted “FOR” approval of all of the proposals presented at the Old Line Bancshares special meeting.

 

Q:

What is a quorum?

 

A:

In order for business to be conducted at the Wesbanco special meeting or the Old Line Bancshares special meeting, a quorum must be present. Shares that are voted and shares abstaining from voting are treated as being present at the Wesbanco special meeting or Old Line Bancshares special meeting, as the case may be, for purposes of determining whether a quorum is present.



 

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Wesbanco. The quorum requirement for holding and transacting business at the Wesbanco special meeting requires the presence, in person or by proxy, of at least a majority of the votes entitled to be cast at the Wesbanco special meeting.

Old Line Bancshares. The quorum requirement for holding and transacting business at the Old Line Bancshares special meeting requires the presence, in person or by proxy, of stockholders entitled to cast at least a majority of all the votes entitled to be cast at the special meeting.

 

Q:

What will happen if I abstain from voting or if I fail to vote?

 

A:

Wesbanco Shareholders.

Abstentions. If you submit a proxy in which you abstain from voting, the abstention will be counted toward a quorum at the Wesbanco special meeting, but it will have no effect on the outcome of any of the three proposals, assuming a quorum is present.

Failure to Vote. If you do not vote your shares of Wesbanco common stock, your shares will not be counted toward a quorum at the Wesbanco special meeting and will have no effect on the outcome of any of the three proposals, assuming a quorum is present.

Old Line Bancshares Stockholders.

Abstentions. If you submit a proxy in which you abstain from voting, the abstention will be counted toward a quorum at the Old Line Bancshares special meeting. Abstentions will have the effect of a vote AGAINST the Old Line Bancshares Merger Proposal but will have no effect on the outcome of the Old Line Bancshares Merger-Related Compensation Proposal or the Old Line Bancshares Adjournment Proposal, assuming a quorum is present.

Failure to Vote. If you do not vote your shares of Old Line Bancshares common stock, your shares will not be counted toward a quorum at the Old Line Bancshares special meeting. Such failure to vote will have the effect of a vote AGAINST the Old Line Bancshares Merger Proposal but will have no effect on the outcome of the Old Line Bancshares Merger-Related Compensation Proposal or the Old Line Bancshares Adjournment Proposal, assuming a quorum is present.

 

Q:

My shares are held in my broker’s, bank’s or other nominee’s name (also known as “street name”). How do I vote those shares?

 

A:

Copies of this joint proxy statement/prospectus were sent to you by your broker, bank or other nominee. The broker, bank or other nominee will request instructions from you as to how you want your shares to be voted, and will vote your shares according to your instructions (unless you have made other arrangements in this regard with a bank or other non-broker nominee).

 

Q:

If my shares are held in “street name” by a broker, bank or other nominee, won’t my broker, bank or other nominee vote those shares for me?

 

A:

Generally not. If you hold your shares in a brokerage account, your broker will not vote your shares unless you provide your broker with instructions on how to vote your “street name” shares. Under the rules of the various national and regional securities exchanges that govern brokers, when the beneficial holder of shares held in street name does not provide voting instructions, brokers have the discretion to vote those shares only on certain limited, uncontested “routine matters.” None of the proposals to be voted upon at either the Wesbanco special meeting or the Old Line Bancshares special meeting are routine matters, so brokers holding shares in street name will not be permitted to exercise voting discretion on any of those proposals. Therefore, if a beneficial holder of shares of Wesbanco common stock or Old Line Bancshares common



 

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  stock, as applicable, does not give their broker any voting instructions, the holder’s shares of common stock will not be voted on any proposals and, as a result, these shares will not be considered present at the applicable special meeting and will not count towards the satisfaction of a quorum. It is important that you be sure to provide your broker with instructions on how to vote your shares held in street name.

If your shares are held by a bank or other nominee, whether your nominee may vote your shares in the absence of instructions from you will depend on your specific arrangement with your nominee record holder, but in the absence of an arrangement granting such record holder discretionary authority to vote, your record holder nominee will not have authority to vote your shares of Wesbanco common stock or Old Line Bancshares common stock on any matter at your stockholder meeting absent specific voting instructions from you. It is important that you be sure to provide your bank or other nominee record holder with instructions on how to vote your shares held in street name

Please check the voting form used by your broker, bank or other nominee to see if it offers telephone or Internet submission of proxies.

 

Q:

How do I vote if I own shares through the Wesbanco Employee Stock Ownership and 401(k) Plan?

 

A:

If you participate in the Wesbanco, Inc. KSOP, which consists of a non-contributory leveraged Employee Stock Ownership Plan and a contributory 401(k) profit sharing plan, which we refer to in this joint proxy statement/prospectus as the Wesbanco KSOP, and shares of Wesbanco common stock have been allocated to your account in the Wesbanco KSOP, you are entitled to instruct Newport Group, Inc., the trustee of the Wesbanco KSOP, confidentially, as to how to vote those shares pursuant to the instructions provided to plan participants. The trustee will vote your shares in accordance with your duly executed instructions received by 11:59 p.m. Eastern Time on October 24, 2019. If you do not send instructions, your instructions are not timely received, or your instructions are not properly completed, the shares credited to your account in the Wesbanco KSOP will be voted by the trustee in the same proportion that it votes shares in the Wesbanco KSOP for which it did receive timely instructions. You may also revoke previously given voting instructions by 11:59 p.m. Eastern Time on October 24, 2019 by filing with the trustee either a written notice of revocation or a properly completed and signed instruction bearing a later date.

 

Q:

What happens if I return my signed proxy card without indicating how to vote?

 

A:

If you return your signed proxy card without indicating how to vote on any particular proposal, the Wesbanco or Old Line Bancshares shares represented by your proxy will be voted on each proposal presented at the Wesbanco special meeting or Old Line Bancshares special meeting, as the case may be, in accordance with the applicable board’s recommendation on that proposal. In that case, if you are a Wesbanco shareholder, your shares of Wesbanco common stock will be voted: “FOR” approval of the Wesbanco Merger Proposal; “FOR” approval of the Wesbanco Stock Issuance Proposal; and “FOR” approval of the Wesbanco Adjournment Proposal. If you are an Old Line Bancshares stockholder and you return a signed proxy card without indicating how to vote on any particular proposal, your shares of Old Line Bancshares common stock will be voted: “FOR” approval of the Old Line Bancshares Merger Proposal; “FOR” approval of the Old Line Bancshares Merger-Related Compensation Proposal; and “FOR” approval of Old Line Bancshares Adjournment Proposal.

 

Q:

Can I change my vote after I have delivered my proxy card?

 

A:

Yes. You may change your vote at any time before your proxy is voted at your special meeting. You can do this in any of the three following ways:

 

   

by sending a written notice to the corporate secretary of Wesbanco or the secretary of Old Line Bancshares, as the case may be, in time to be received before the applicable Wesbanco or Old Line Bancshares special meeting, stating that you would like to revoke your proxy;



 

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by completing, signing and dating another proxy card bearing a later date and returning it by mail in time to be received before the applicable Wesbanco or Old Line Bancshares special meeting; or you can change your vote by submitting a new, valid proxy by Internet or telephone, with a later date, in which case your later-submitted proxy will be recorded and your earlier proxy revoked; or

 

   

if you are a holder of record, by attending the applicable special meeting and voting in person.

If your shares are held in an account at a broker, bank or other nominee, you should contact your broker, bank or other nominee to change your vote.

 

Q:

Will Wesbanco shareholders or Old Line Bancshares stockholders have dissenters’ or appraisal rights?

 

A:

No. If you are a Wesbanco shareholder who objects to the merger, you may vote against approval of the Wesbanco Merger Proposal and the Wesbanco Stock Issuance Proposal. If you are an Old Line Bancshares stockholder who objects to the merger, you may vote against approval of the Old Line Bancshares Merger Proposal. However, under applicable West Virginia and Maryland law, Wesbanco shareholders and Old Line Bancshares stockholders will not be entitled to dissenters’ or appraisal rights in connection with the merger. Accordingly, neither the shareholders of Wesbanco nor the stockholders of Old Line Bancshares have the right to demand the fair value of their stock or seek an appraisal of such fair value in connection with the merger.

 

Q:

What do I need to do now?

 

A:

After you carefully read and consider the information contained in and incorporated by reference into this document, please respond as soon as possible by completing, signing and dating your proxy card and returning it in the enclosed postage-paid return envelope or, by submitting your proxy or voting instructions by telephone or through the Internet, so that your shares will be represented and voted at the Wesbanco special meeting or Old Line Bancshares special meeting, as the case may be. This will not prevent you from attending the applicable special meeting and voting in person; in order to assist us in tabulating the votes at the special meetings, however, we encourage you to vote by proxy even if you do plan to attend the applicable special meeting in person.

 

Q:

Should I send in my Old Line Bancshares stock certificates now?

 

A:

No. You should not send in your Old Line Bancshares stock certificates until you receive transmittal materials after the merger is completed.

 

Q:

What should I do if I hold my shares of Old Line Bancshares common stock in book-entry form?

 

A:

You are not required to take any special additional actions if your shares of Old Line Bancshares common stock are held in book-entry form. After the completion of the merger, shares of Old Line Bancshares common stock held in book-entry form automatically will be exchanged for book-entry shares of Wesbanco common stock.

 

Q:

Who will solicit and pay the cost of soliciting proxies?

 

A:

Wesbanco has engaged a professional proxy solicitation firm, Georgeson LLC (“Georgeson”), to assist in soliciting proxies for use at the Wesbanco special meeting. Similarly, Old Line Bancshares has engaged a



 

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  professional proxy solicitation firm, D.F. King & Co., Inc. (“King”), to assist in soliciting proxies for use at the Old Line Bancshares special meeting. Under the terms of the merger agreement, Wesbanco has agreed to pay or reimburse the fees and expenses of both Georgeson and King. Wesbanco will pay Georgeson a fee of $8,500 and will reimburse Georgeson for its out-of-pocket expenses. Wesbanco will pay (or reimburse Old Line Bancshares for such payment) King a fee of $10,500 and will reimburse King for its out-of-pocket expenses.

Each of Wesbanco’s and Old Line Bancshares’ directors, officers and employees may solicit proxies by telephone, by facsimile, by mail, on the Internet or in person. They will not be paid any additional amounts for soliciting proxies but may be reimbursed for their reasonable out-of-pocket expenses that they incur. Wesbanco and Old Line Bancshares may also reimburse banks, brokers and other custodians, nominees and fiduciaries representing beneficial owners of shares of Wesbanco common stock and Old Line Bancshares common stock, as the case may be, for their expenses in forwarding soliciting materials to beneficial owners of the Wesbanco common stock and Old Line Bancshares common stock and in obtaining voting instructions from those owners.

 

Q:

Is the merger expected to be taxable to Old Line Bancshares stockholders?

 

A:

Generally, no. The merger is structured to be treated as a reorganization within the meaning of Section 368(a) of the Internal Revenue Code of 1986, as amended, and holders of Old Line Bancshares common stock will generally not recognize any gain or loss for U.S. federal income tax purposes on the exchange of shares of Old Line Bancshares common stock for shares of Wesbanco common stock in the merger, except with respect to any cash received instead of fractional shares of Wesbanco common stock. You should read “The Merger — Material U.S. Federal Income Tax Consequences of the Merger” beginning on page 99 for a more complete discussion of the U.S. federal income tax consequences of the merger. Tax matters can be complicated and the tax consequences of the merger to you will depend on your particular tax situation. You should consult with your tax advisor to determine the specific tax consequences of the merger to you.

 

Q:

Where can I find the voting results of the Wesbanco special meeting and the Old Line Bancshares special meeting?

 

A:

The preliminary voting results will be announced at each of the respective Wesbanco and Old Line Bancshares special meetings. In addition, within four business days following certification of the final voting results, Wesbanco and Old Line Bancshares will disclose the final voting results of their respective special meetings on a Current Report on Form 8-K filed with the SEC.

 

Q:

Are there any risks that I should consider in deciding how to vote at the Wesbanco special meeting or the Old Line Bancshares special meeting?

 

A:

Yes. You should read and carefully consider the risk factors set forth in the “Risk Factors” section beginning on page 28 of this joint proxy statement/prospectus. You also should read and carefully consider the risk factors of Wesbanco and Old Line Bancshares contained in the documents that are incorporated by reference into this joint proxy statement/prospectus. See “Where You Can Find More Information About Wesbanco and Old Line Bancshares.”



 

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Q: Who can help answer any other questions that I might have?

 

A:

If you want additional copies of this document, or if you want to ask any questions about the merger, you should contact

 

If you are a Wesbanco shareholder:

 

  

If you are an Old Line Bancshares stockholder:

 

Wesbanco’s Proxy Solicitor:

Georgeson LLC

1290 Avenue of the Americas, 9th Floor,

New York, New York 10104

Banks, Brokers and Shareholders Call Toll-

Free (888) 607-9107

 

Or

 

Wesbanco, Inc.

Attn: Linda M. Woodfin, Secretary

  

Old Line Bancshares’ Proxy Solicitor:

D.F. King & Co., Inc.

48 Wall Street, 22nd Floor

New York, New York 10005

Email: [email protected]

Banks and Brokers Call Collect: (212) 269-5550

All Others Call Toll-Free: (866) 342-4881

 

Or

 

Old Line Bancshares, Inc.

One Bank Plaza    Attn: Mark A. Semanie, Secretary
Wheeling, West Virginia 26003    1525 Pointer Ridge Place
(304) 234-9000    Bowie, Maryland 20716
   (301) 430-2500


 

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SUMMARY

This summary highlights selected information from this joint proxy statement/prospectus and may not contain all of the information that is important to you. The merger agreement is attached to this joint proxy statement/prospectus as Annex A. To fully understand the merger and for a more complete description of the terms of the merger, you should carefully read this entire document, including the annexes, and the documents we refer you to under the caption “Where You Can Find More Information About Wesbanco and Old Line Bancshares.” This joint proxy statement/prospectus, including information included or incorporated by reference in this joint proxy statement/prospectus, contains a number of forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 regarding the financial condition, results of operations, earnings outlook, business and prospects of Wesbanco and Old Line Bancshares, and the potential combined company, as well as statements applicable to the period following the completion of the merger. You can find some of these statements by looking for words such as “plan,” “believe,” “expect,” “intend,” “anticipate,” “estimate,” “project,” “potential,” “possible” or other similar expressions. These forward-looking statements involve certain risks and uncertainties. The ability of either Wesbanco or Old Line Bancshares to predict results or the actual effects of our plans and strategies, particularly after the merger, is inherently uncertain. Because these forward-looking statements are subject to assumptions and uncertainties, actual results may differ materially from those expressed in or implied by these forward-looking statements. See “Cautionary Statement Regarding Forward-Looking Statements.” Each item in this summary refers to the page of this joint proxy statement/prospectus on which that subject is discussed in more detail.

The Merger (See page 47)

We propose a merger of Old Line Bancshares with and into Wesbanco. If the merger is consummated, Wesbanco will continue as the surviving corporation. The articles of incorporation and bylaws of Wesbanco will continue as the articles of incorporation and bylaws of the surviving corporation until amended or repealed in accordance with applicable law. The officers and directors of Wesbanco will continue as the officers and directors of the surviving corporation, except that two current Old Line Bancshares directors, anticipated to be James W. Cornelsen and Gregory S. Proctor, Jr., will be appointed to the board of directors of Wesbanco, and James W. Cornelsen will become an officer of Wesbanco. After the effective time of the merger and as part of the same overall transaction, Old Line Bank, the wholly-owned banking subsidiary of Old Line Bancshares, for no additional consideration and pursuant to the merger agreement, will merge with and into Wesbanco Bank, Inc., the wholly-owned banking subsidiary of Wesbanco, with Wesbanco Bank, Inc. as the surviving entity, which we refer to in this joint proxy statement/prospectus as the bank merger.

Old Line Bancshares Stockholders Will Receive Wesbanco Common Stock in the Merger (See page 47)

If the merger is completed, for each share of Old Line Bancshares common stock that you own you will receive 0.7844 of a share of Wesbanco common stock, subject to adjustment as described in the merger agreement. We sometimes refer to the 0.7844 of a share of Wesbanco common stock as the “merger consideration” or the “exchange ratio.” Instead of fractional shares of Wesbanco common stock, Old Line Bancshares stockholders will receive a check for any fractional shares based on the average closing price of Wesbanco common stock during a specified period before the effective time of the merger.

The exchange ratio is a fixed ratio. Therefore, the number of shares of Wesbanco common stock to be received by holders of Old Line Bancshares common stock in the merger will not change if the trading price of Wesbanco common stock or Old Line Bancshares common stock changes between now and the time the merger is completed. However, the exchange ratio is subject to adjustment if Wesbanco completes certain corporate transactions, such as a reorganization, recapitalization, reclassification, stock dividend, stock split, reverse stock split or other like changes in Wesbanco’s capitalization.



 

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Wesbanco shareholders will continue to own the same number of shares of Wesbanco common stock that they owned before the merger effective time and will not receive any shares, cash or other consideration.

Treatment of Old Line Bancshares Equity-Based Awards (See page 47)

Stock Options: At the effective time of the merger, each option granted by Old Line Bancshares to purchase shares of Old Line Bancshares common stock that is outstanding and unexercised immediately prior to the effective time, whether vested or unvested, shall without any further action on the part of the holder thereof, be assumed by Wesbanco and converted into an option to purchase from Wesbanco, on the same terms and conditions as were applicable under such Old Line Bancshares options, a number of shares of Wesbanco common stock (rounded down to the nearest whole share) determined by multiplying (x) the number of shares of Old Line Bancshares common stock subject to such Old Line Bancshares stock option immediately prior to the effective time by (y) the exchange ratio. The exercise price per share (rounded up to the nearest whole cent) of each Wesbanco stock option issued for the Old Line Bancshares stock option shall equal the quotient obtained by dividing (i) the per share exercise price for each share of Old Line Bancshares common stock subject to such Old Line Bancshares stock option by (ii) the exchange ratio.

Restricted Stock: Immediately prior to the effective time of the merger, each outstanding restricted share of Old Line Bancshares common stock will fully vest and be cancelled and converted automatically into the right to receive the merger consideration, less applicable tax withholdings.

Wesbanco’s Reasons for the Merger and Recommendation to Shareholders (See page 56)

The Wesbanco board of directors has determined that the merger agreement and the merger are in the best interests of Wesbanco and its shareholders, and accordingly adopted the merger agreement and approved the merger and recommends that Wesbanco shareholders vote “FOR” approval of the Wesbanco Merger Proposal and “FOR” approval of the Wesbanco Stock Issuance Proposal.

In determining whether to approve the merger agreement and recommend approval of the Wesbanco Merger Proposal and the Wesbanco Stock Issuance Proposal to the Wesbanco shareholders, Wesbanco’s board considered the factors described under “The Merger — Wesbanco’s Reasons for the Merger and Recommendation of the Wesbanco Board of Directors.”

In addition, the Wesbanco board of directors recommends that Wesbanco shareholders vote “FOR” approval of the Wesbanco Adjournment Proposal.

Old Line Bancshares’ Reasons for the Merger and Recommendation to Stockholders (See page 75)

The Old Line Bancshares board of directors has determined that the merger agreement and the merger are advisable on substantially the terms and conditions set forth in the merger agreement and that the merger is in the best interests of Old Line Bancshares and Old Line Bancshares’ stockholders, and accordingly approved the merger agreement and recommends that Old Line Bancshares stockholders vote “FOR” approval of the Old Line Bancshares Merger Proposal.

In determining whether to approve the merger agreement and recommend approval of the Old Line Bancshares Merger Proposal to the Old Line Bancshares stockholders, Old Line Bancshares’ board considered the factors described under “The Merger — Old Line Bancshares’ Reasons for the Merger and Recommendation of the Old Line Bancshares Board of Directors.”

In addition, the Old Line Bancshares board of directors recommends that Old Line Bancshares stockholders vote “FOR” approval of the Old Line Bancshares Merger-Related Compensation Proposal and “FOR” approval of the Old Line Bancshares Adjournment Proposal.



 

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Opinion of Wesbanco’s Financial Advisor (See page 58)

In connection with the Wesbanco board of directors’ consideration of the merger, Wesbanco’s financial advisor, D.A. Davidson & Co. (which we refer to as “Davidson”), provided its opinion to the Wesbanco board of directors, dated July 23, 2019, to the effect that, as of such date and based upon and subject to the assumptions made, procedures followed, matters considered, and limitations and qualifications set forth in the written opinion, the Merger Consideration was fair, from a financial point of view, to Wesbanco. A copy of this opinion is attached to this joint proxy statement/prospectus as Annex B. Wesbanco shareholders should read the opinion completely and carefully to understand the assumptions made, matters considered and limitations on the review undertaken by Davidson in providing its opinion.

Opinion of Old Line Bancshares’ Financial Advisor (See page 77)

In connection with the merger, Old Line Bancshares’ financial advisor, Keefe, Bruyette & Woods, Inc. (“KBW”), delivered a written opinion, dated July 23, 2019, to the Old Line Bancshares board of directors as to the fairness, from a financial point of view and as of the date of the opinion, to the holders of Old Line Bancshares common stock of the exchange ratio in the proposed merger. The full text of the opinion, which describes the procedures followed, assumptions made, matters considered, and qualifications and limitations on the review undertaken by KBW in preparing the opinion, is attached as Annex C to this joint proxy statement/prospectus. The opinion was for the information of, and was directed to, the Old Line Bancshares board of directors (in its capacity as such) in connection with its consideration of the financial terms of the merger. The opinion did not address the underlying business decision of Old Line Bancshares to engage in the merger or enter into the merger agreement or constitute a recommendation to the Old Line Bancshares board of directors in connection with the merger, and it does not constitute a recommendation to any holder of Old Line Bancshares common stock or any shareholder of any other entity as to how to vote in connection with the merger or any other matter.

The Wesbanco Special Meeting Will be Held on October 29, 2019 (See page 35)

A special meeting of Wesbanco’s shareholders will be held in the 7th Floor Board Room of Wesbanco’s offices located at One Bank Plaza, Wheeling, West Virginia, 26003, on October 29, 2019, at 12:00 p.m. Eastern Time. At the Wesbanco special meeting, Wesbanco shareholders will be asked to approve the: (i) Wesbanco Merger Proposal; (ii) Wesbanco Stock Issuance Proposal; and (iii) Wesbanco Adjournment Proposal.

The Old Line Bancshares Special Meeting Will be Held on October 29, 2019 (See page 41)

A special meeting of Old Line Bancshares’ stockholders will be held at Old Line Bancshares’ office located at 1525 Pointer Ridge Place, Bowie, Maryland, on October 29, 2019, at 10:00 a.m. Eastern Time. At the Old Line Bancshares special meeting, Old Line Bancshares stockholders will be asked to approve the: (i) Old Line Bancshares Merger Proposal; (ii) Old Line Bancshares Merger-Related Compensation Proposal; and (iii) Old Line Adjournment Proposal.

Record Date; Voting Power (See pages 35 and 41)

Wesbanco. You may vote at the Wesbanco special meeting only if you owned shares of Wesbanco common stock at the close of business on September 23, 2019, which we refer to as the Wesbanco record date. On September 19, 2019, the last date before the date of this joint proxy statement/prospectus for which it was practicable to obtain this information, there were 54,690,225 shares of Wesbanco common stock outstanding. You may cast one vote for each share of Wesbanco common stock you owned on the Wesbanco record date. You can vote your shares by telephone, the Internet or by returning the enclosed proxy by mail, or you may vote in person by appearing at the Wesbanco special meeting. You can change your vote by submitting a later-dated



 

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proxy by telephone, the Internet or by mail, provided that it must be received prior to the Wesbanco special meeting. You can also change your vote by attending the Wesbanco special meeting and voting in person.

Old Line Bancshares. You may vote at the Old Line Bancshares special meeting only if you owned shares of Old Line Bancshares common stock at the close of business on September 23, 2019, which we refer to as the Old Line Bancshares record date. On September 19, 2019, the last date before the date of this joint proxy statement/prospectus for which it was practicable to obtain this information, there were 16,999,146 shares of Old Line Bancshares common stock outstanding. You may cast one vote for each share of Old Line Bancshares common stock you owned on the Old Line Bancshares record date. You can vote your shares by telephone, the Internet or by returning the enclosed proxy by mail, or you may vote in person by appearing at the Old Line Bancshares special meeting. You can change your vote by submitting a later-dated proxy by telephone, the Internet or by mail, provided that it must be received prior to the Old Line Bancshares special meeting. You can also change your vote by attending the Old Line Bancshares special meeting and voting in person.

Vote Required (See pages 36 and 42)

Wesbanco Special Meeting.

Wesbanco Merger Proposal. If a quorum exists, approval of the Wesbanco Merger Proposal requires the affirmative vote of at least a majority of the votes cast on the proposal. Abstentions, failures to vote and broker non-votes are not included in calculating votes cast with respect to this proposal and will not have any effect on the outcome of this proposal, assuming a quorum is present.

Wesbanco Stock Issuance Proposal. If a quorum exists, approval of the Wesbanco Stock Issuance Proposal requires the affirmative vote of at least a majority of the votes cast on the proposal. Abstentions, failures to vote and broker non-votes are not included in calculating votes cast with respect to this proposal and will not have any effect on the outcome of this proposal, assuming a quorum is present.

Wesbanco Adjournment Proposal. If a quorum exists, approval of the Wesbanco Adjournment Proposal requires the affirmative vote of at least a majority of the votes cast on the proposal. Abstentions, failures to vote and broker non-votes are not included in calculating votes cast with respect to this proposal and will not have any effect on the outcome of this proposal, assuming a quorum is present.

Old Line Bancshares Special Meeting.

Old Line Bancshares Merger Proposal. If a quorum exists, approval of the Old Line Bancshares Merger Proposal requires the affirmative vote of at least a majority of the outstanding shares of Old Line Bancshares common stock entitled to vote thereon. Abstentions, failures to vote and broker non-votes will have the effect of a vote AGAINST this proposal, assuming a quorum is present.

Old Line Bancshares Merger-Related Compensation Proposal. If a quorum exists, approval of the Old Line Bancshares Merger-Related Compensation Proposal requires the affirmative vote of at least a majority of all votes cast on the proposal in person or by proxy. Abstentions, failures to vote and broker non-votes are not included in calculating votes cast with respect to this proposal and will not have any effect on the outcome of this proposal, assuming a quorum is present.

Old Line Bancshares Adjournment Proposal. If a quorum exists, approval of the Old Line Bancshares Adjournment Proposal requires the affirmative vote of at least a majority of all votes cast on the proposal in person or by proxy. Abstentions, failures to vote and broker non-votes are not included in calculating votes cast with respect to this proposal and will not have any effect on the outcome of this proposal, assuming a quorum is present.



 

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Voting Agreements for Old Line Bancshares Common Stock (See page 114)

In connection with the merger agreement, Wesbanco has entered into voting agreements with all of Old Line Bancshares’ executive officers and directors (and one former director). In the voting agreements, each of these stockholders has generally agreed to vote all of the shares of Old Line Bancshares common stock he or she controls to approve the Old Line Bancshares Merger Proposal.

As of September 19, 2019, the last date before the date of this joint proxy statement/prospectus for which it was practicable to obtain this information, the directors and executive officers of Old Line Bancshares controlled 1,018,802 shares of Old Line Bancshares common stock, or approximately 6.0% of the outstanding shares of Old Line Bancshares common stock entitled to vote at the Old Line Bancshares special meeting. As of the Old Line Bancshares record date, approximately 11.1% of the outstanding shares of Old Line Bancshares common stock were subject to these voting agreements.

Quorum; Abstentions; Broker Voting; Failure to Vote (See pages 35 and 41)

Wesbanco Special Meeting.

Quorum. A quorum must be present to transact business at the Wesbanco special meeting. If you submit a properly executed proxy, even if you abstain from voting, your shares will be counted for purposes of calculating whether a quorum is present at the special meeting. A quorum at the Wesbanco special meeting requires the presence, whether in person or by proxy, of at least a majority of the votes entitled to be cast at the Wesbanco special meeting.

Abstentions. An abstention occurs when a shareholder attends a meeting, either in person or by proxy, but abstains from voting on a matter. If a Wesbanco shareholder submits a proxy in which the shareholder abstains from voting, the abstention will be counted toward a quorum at the Wesbanco special meeting, but it will have no effect on any of the three proposals assuming a quorum is present.

Broker Voting. If your shares of Wesbanco common stock are held in the name of a bank, brokerage firm or other similar holder of record (referred to as “in street name”), you will receive instructions from the holder of record that you must follow for you to specify how your shares will be voted. In general, under the rules of the various national and regional securities exchanges, broker holders of record have the authority to vote shares for which their customers do not provide voting instructions on certain routine, non-contested matters, but not on non-routine proposals. In the case of non-routine items for which specific voting instructions have not been provided, the institution holding street name shares cannot vote those shares. When there is a routine proposal on a ballot or when the broker receives voting instructions on at least one non-routine proposal but not all such proposals, the non-routine proposals for which the broker has not been given voting instructions are often called “broker non-votes.” Since there are no routine items to be voted on at the Wesbanco special meeting, broker nominee record holders that do not receive voting instructions from the beneficial owners of such shares with respect to at least one proposal will not be able to return a proxy card with respect to such shares and these shares will be treated as unvoted shares. As a result, these shares will not be considered present at the Wesbanco special meeting, will not count towards the satisfaction of a quorum and will have no effect on the outcome of any of the three proposals at the Wesbanco special meeting assuming a quorum is present. Conversely, if a broker or other nominee receives voting instructions on one but not all of the proposals, those shares will be voted on that proposal, considered present at the Wesbanco special meeting and will count towards the satisfaction of a quorum.

If your shares are held by a bank or other nominee, however, whether your nominee may vote your shares in the absence of instructions from you will depend on your specific arrangement with your nominee record holder, but in the absence of an arrangement granting such record holder discretionary authority to vote, your record



 

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holder nominee will not have authority to vote your shares of Wesbanco common stock on any matter at the Wesbanco special meeting absent specific voting instructions from you. As a result, your shares will not be considered present at the Wesbanco special meeting, will not count towards the satisfaction of a quorum, and will have no effect on the outcome of any of the three proposals at the Wesbanco special meeting, assuming a quorum is present.

Failure to Vote/Unvoted Shares. If you do not vote your shares of Wesbanco common stock, your shares will not be counted toward a quorum at the Wesbanco special meeting and will have no effect on any of the three proposals assuming a quorum is present.

Old Line Bancshares Special Meeting.

Quorum. A quorum must be present to transact business at the Old Line Bancshares special meeting. If you submit a properly executed proxy, even if you abstain from voting, your shares will be counted for purposes of calculating whether a quorum is present at the Old Line Bancshares special meeting. A quorum at the Old Line Bancshares special meeting requires the presence, in person or by proxy, of stockholders entitled to cast at least a majority of all the votes entitled to be cast at the Old Line Bancshares special meeting.

Abstentions. An abstention occurs when a stockholder attends a meeting, either in person or by proxy, but abstains from voting on a matter. If an Old Line Bancshares stockholder submits a proxy in which the stockholder abstains from voting, the abstention will be counted toward a quorum at the Old Line Bancshares special meeting. Abstentions will have the effect of a vote AGAINST the Old Line Bancshares Merger Proposal but will have no effect on the outcome of the Old Line Bancshares Merger-Related Compensation Proposal or the Old Line Bancshares Adjournment Proposal, assuming a quorum is present.

Broker Voting. If your shares of Old Line Bancshares common stock are held in the name of a bank, brokerage firm or other similar holder of record (referred to as “in street name”), you will receive instructions from the holder of record that you must follow for you to specify how your shares will be voted. In general, under the rules of the various national and regional securities exchanges, broker holders of record have the authority to vote shares for which their customers do not provide voting instructions on certain routine, non-contested matters, but not on non-routine proposals. In the case of non-routine items for which specific voting instructions have not been provided, the institution holding street name shares cannot vote those shares. When there is a routine proposal on a ballot or when the broker receives voting instructions on at least one non-routine proposal but not all such proposals, the non-routine proposals for which the broker has not been given voting instructions are often called “broker non-votes.” Since there are no routine items to be voted on at the Old Line Bancshares special meeting, broker nominee record holders that do not receive voting instructions from the beneficial owners of such shares with respect to at least one proposal will not be able to return a proxy card with respect to such shares and these shares will be treated as unvoted shares. As a result, these shares will not be considered present at the Old Line Bancshares special meeting and will not count towards the satisfaction of a quorum. Therefore, the failure to instruct any such broker will have the effect of a vote AGAINST the Old Line Bancshares Merger Proposal but will have no effect on the outcome of the Old Line Bancshares Merger-Related Compensation Proposal or the Old Line Bancshares Adjournment Proposal, assuming a quorum is present. Conversely, if a broker or other nominee receives voting instructions on one but not all of the proposals, those shares will be voted on that proposal, considered present at the Old Line Bancshares special meeting and will count towards the satisfaction of a quorum.

If your shares are held by a bank or other nominee, however, whether your nominee may vote your shares in the absence of instructions from you will depend on your specific arrangement with your nominee record holder, but in the absence of an arrangement granting such record holder discretionary authority to vote, your record holder nominee will not have authority to vote your shares of Old Line Bancshares common stock on any matter



 

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at the Old Line Bancshares special meeting absent specific voting instructions from you. As a result, your shares will not be considered present at the Old Line Bancshares special meeting, will not count towards the satisfaction of a quorum, and will have the effect of a vote AGAINST the Old Line Bancshares Merger Proposal, but will have no effect on the outcome of the Old Line Bancshares Merger-Related Compensation Proposal or the Old Line Bancshares Adjournment Proposal, assuming a quorum is present.

Failure to Vote/Unvoted Shares. If you do not vote your shares of Old Line Bancshares common stock, your shares will not be counted toward a quorum at the Old Line Bancshares special meeting. Such failure to vote will have the effect of a vote AGAINST the Old Line Bancshares Merger Proposal but will have no effect on the outcome of the Old Line Bancshares Merger-Related Compensation Proposal or the Old Line Bancshares Adjournment Proposal, assuming a quorum is present.

No Dissenters’ or Appraisal Rights (See page 98)

Under applicable West Virginia and Maryland law, holders of Wesbanco or Old Line Bancshares common stock will not be entitled to dissenters’ or appraisal rights. Therefore, if you own shares of Wesbanco common stock on the Wesbanco record date but you are against the merger, you may vote against approval of the Wesbanco Merger Proposal and the Wesbanco Stock Issuance Proposal but you may not exercise dissenters’ or appraisal rights. Similarly, if you own shares of Old Line Bancshares common stock on the Old Line Bancshares record date but you are against the merger, you may vote against approval of the Old Line Bancshares Merger Proposal but you may not exercise dissenters’ or appraisal rights for your Old Line Bancshares common stock.

Shares to be Issued by Wesbanco in the Merger; Ownership of Wesbanco after the Merger (See page 98)

Wesbanco will issue a maximum of approximately 13,554,745 shares of its common stock to Old Line Bancshares stockholders in connection with the merger, based on the number of (1) shares of Old Line Bancshares common stock outstanding on the Old Line Bancshares record date (restricted and unrestricted) and (2) shares of Old Line Bancshares common stock potentially issuable pursuant to outstanding stock options that are vested or that are expected to vest prior to completion of the merger, assuming no adjustment to the exchange ratio is made. Assuming that Wesbanco issues that maximum number of shares, those shares would constitute approximately 19.9% of the outstanding stock of Wesbanco after the merger, based on the number of shares of Wesbanco common stock outstanding on September 19, 2019. The Wesbanco shares to be issued in the merger will be listed for trading on the Nasdaq Global Select Market under the symbol “WSBC.”

Material U.S. Federal Income Tax Consequences (See page 99)

It is a condition to the completion of the merger, unless waived by the parties in writing, that each of Wesbanco and Old Line Bancshares receives a legal opinion from their respective tax counsel to the effect that the merger will be treated as a “reorganization” for U.S. federal income tax purposes within the meaning of Section 368(a) of the Internal Revenue Code of 1986, as amended (the “Code”). Accordingly, holders of Old Line Bancshares common stock are not expected to recognize any gain or loss for U.S. federal income tax purposes on the exchange of Old Line Bancshares common stock for shares of Wesbanco common stock in the merger, except with respect to any cash received instead of fractional shares of Wesbanco common stock. For further information, please refer to “The Merger — Material U.S. Federal Income Tax Consequences of the Merger.”

You should read the summary under the caption “The Merger — Material U.S. Federal Income Tax Consequences of the Merger” beginning on page 99 for a more complete discussion of the U.S. federal income tax consequences of the merger. You should also consult with your own tax advisor concerning the U.S. federal, state, local and foreign tax consequences of the merger that may apply to you.



 

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Certain Differences in the Rights of Wesbanco Shareholders and Old Line Bancshares Stockholders (See page 126)

Wesbanco is a West Virginia corporation governed by West Virginia law and Old Line Bancshares is a Maryland corporation governed by Maryland law. Once the merger occurs, Old Line Bancshares stockholders will become shareholders of Wesbanco and their rights will be governed by West Virginia law and Wesbanco’s corporate governing documents rather than Maryland law and Old Line Bancshares’ governing documents. Because of the differences between the laws of the State of Maryland and the State of West Virginia and the respective corporate governing documents of Old Line Bancshares and Wesbanco, Old Line Bancshares’ stockholders’ rights as stockholders will change as a result of the merger. These include, among other things, differences in shareholders’ rights related to notice and adjournment of shareholder meetings, the calling of special meetings of shareholders, dissenters’ rights, the number and term of directors, nomination of directors, removal of directors and filling vacancies on the board of directors, cumulative voting, indemnification of officers and directors, amendment of articles of incorporation and bylaws, and statutory provisions affecting control share acquisitions and business combinations.

Conditions to the Merger (See page 108)

Completion of the merger is subject to the satisfaction or waiver of the conditions specified in the merger agreement, including, among others, those listed below:

 

   

approval of the Wesbanco Merger Proposal and the Wesbanco Stock Issuance Proposal by the shareholders of Wesbanco;

 

   

approval of the Old Line Bancshares Merger Proposal by the stockholders of Old Line Bancshares;

 

   

the absence of a law or injunction prohibiting the merger;

 

   

the receipt by Wesbanco and Old Line Bancshares of all necessary approvals of governmental and regulatory authorities;

 

   

the receipt of an opinion from each party’s tax counsel, dated as of the closing date of the merger, to the effect that for federal income tax purposes the merger will be treated as a reorganization within the meaning of Section 368(a) of the Code; and

 

   

Nasdaq shall have completed its review of the “Listing of Additional Shares Notification Form” filed by Wesbanco with respect to the shares of Wesbanco common stock to be issued in the merger.

Termination of the Merger Agreement (See page 109)

The parties can agree to terminate the merger agreement at any time prior to completion of the merger, and either Wesbanco or Old Line Bancshares can terminate the merger agreement if, among other reasons, any of the following occurs:

 

   

if Wesbanco shareholders fail to approve the Wesbanco Merger Proposal and the Wesbanco Stock Issuance Proposal;

 

   

if Old Line Bancshares Stockholders fail to approve the Old Line Bancshares Merger Proposal;

 

   

the merger is not completed by March 1, 2020;

 

   

there has been a final non-appealable denial of a required regulatory approval; or

 

   

the other party breaches or materially fails to comply with any of its representations, warranties or obligations under the merger agreement.



 

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Old Line Bancshares will also have the right to terminate the merger agreement if the average closing price of Wesbanco common stock during a specified period before the effective time of the merger is less than $30.22 and Wesbanco common stock underperforms the Nasdaq Bank Index by more than 20%. Subject to certain conditions, Old Line Bancshares may also terminate the merger agreement in order to enter into an agreement with respect to an unsolicited proposal that if consummated would be reasonably likely to result in a transaction more favorable to Old Line Bancshares’ stockholders from a financial point of view, provided that Old Line Bancshares pays the termination fee described below.

Termination Fee (See page 111)

The merger agreement provides that if the merger agreement is terminated under certain circumstances, described more fully in the “The Merger — Termination Fee” section, Old Line Bancshares will be required to pay a termination fee of $16,000,000 to Wesbanco.

We May Amend the Terms of the Merger and Waive Rights Under the Merger Agreement (See page 113)

We may jointly amend the terms of the merger agreement, and either party may waive its right to require the other party to adhere to any of those terms, to the extent legally permissible. However, after the Old Line Bancshares stockholders approve the Old Line Bancshares Merger Proposal, or the Wesbanco shareholders approve the Wesbanco Merger Proposal and the Wesbanco Stock Issuance Proposal, there may not be, without further approval of Old Line Bancshares’ stockholders or Wesbanco’s shareholders, as the case may be, any amendment of the merger agreement that requires such further approval under applicable law.

Effective Date of the Merger (See page 113)

We expect the merger to be completed as soon as practicable after all regulatory approvals and shareholder and stockholder approvals have been received. We expect this to occur during the fourth quarter of 2019 or first quarter of 2020.

Regulatory Approvals (See page 96)

The merger is subject to the approval of the Board of Governors of the Federal Reserve System (unless a waiver is granted), the West Virginia Division of Financial Institutions (“WVDFI”) and the Maryland Office of the Commissioner of Financial Regulation (the “Maryland Commissioner”). The bank merger is subject to the approval of the Federal Deposit Insurance Corporation, WVDFI and the Maryland Commissioner. These governmental authorities may impose conditions for granting approval of the merger. Neither Wesbanco nor Old Line Bancshares can offer any assurance that all necessary approvals will be obtained or the date when any such approvals will be obtained. As of the date of this joint proxy statement/prospectus, all required regulatory applications, notices and waiver requests have been filed.

Interests of Certain Persons in the Merger (See page 91)

The directors and executive officers of Old Line Bancshares have financial and other interests in the merger that differ from, or are in addition to, their interests as stockholders of Old Line Bancshares. These interests include, but are not limited to:

 

   

the continued indemnification of current and former directors and executive officers under the merger agreement and providing these individuals with directors’ and officers’ insurance for six years after the merger;

 

   

the receipt of payments by the executive officers of Old Line Bancshares pursuant to rights granted under agreements with Old Line Bancshares, Old Line Bank, Wesbanco and/or Wesbanco Bank;



 

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the continuation of certain benefits for certain officers and directors of Old Line Bancshares;

 

   

the appointment of two current Old Line Bancshares directors, anticipated to be James W. Cornelsen and Gregory S. Proctor, Jr., to the board of directors of Wesbanco and Wesbanco Bank upon completion of the merger;

 

   

the appointment of each current member of Old Line Bancshares’ board of directors to a Wesbanco advisory board for the Mid-Atlantic market;

 

   

the accelerated vesting of certain equity awards for executive officers and directors of Old Line Bancshares;

 

   

the creation of a retention bonus pool for the purpose of retaining the services of certain key employees of Old Line Bancshares; and

 

   

grants of Wesbanco restricted stock to certain key employees, including some executive officers, of Old Line Bancshares, effective upon completion of the merger, which would cliff vest after two years, for the purpose of retaining those key employees of Old Line Bancshares as Wesbanco employees after the merger.

The Old Line Bancshares board of directors knew about these additional interests, and considered them when the board approved the merger agreement. See “The Merger — Interests of Certain Persons in the Merger” for more detailed information about these interests.

Old Line Bancshares Merger-Related Compensation Proposal (See page 45)

In accordance with SEC rules, Old Line Bancshares stockholders will vote on a proposal to approve, on an advisory (non-binding) basis, certain payments that will or may be made to Old Line Bancshares’ named executive officers in connection with the merger, which we refer to the Old Line Bancshares Merger-Related Compensation Proposal. These payments are reported in the Golden Parachute Compensation table on page 95 and the associated narrative discussion.

Adjournment Proposals (See pages 40 and 46)

Wesbanco. Wesbanco shareholders are being asked to approve a proposal to grant Wesbanco’s board of directors discretionary authority to adjourn the Wesbanco special meeting, if necessary, to solicit additional proxies in favor of the Wesbanco Merger Proposal and the Wesbanco Stock Issuance Proposal if a quorum is present at the Wesbanco special meeting but there are insufficient votes to approve either of those proposals. We refer to this proposal as the Wesbanco Adjournment Proposal.

Old Line Bancshares. Old Line Bancshares stockholders are being asked to approve a proposal to grant Old Line Bancshares’ board of directors discretionary authority to adjourn the Old Line Bancshares special meeting, if necessary, to solicit additional proxies in favor of the Old Line Bancshares Merger Proposal if a quorum is present at the Old Line Bancshares special meeting but there are insufficient votes to approve that proposal. We refer to this proposal as the Old Line Bancshares Adjournment Proposal.

The Companies (See pages 124 and 125)

Wesbanco, Inc.

One Bank Plaza

Wheeling, West Virginia 26003

(304) 234-9000



 

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Wesbanco, a bank holding company headquartered in Wheeling, West Virginia, offers through its various subsidiaries a full range of financial services including retail banking, corporate banking, personal and corporate trust services, brokerage services, mortgage banking and insurance. Wesbanco’s banking subsidiary Wesbanco Bank, Inc., operates 199 financial centers in West Virginia, Ohio, Pennsylvania, Kentucky and Indiana.

As of June 30, 2019, Wesbanco had approximately $12.5 billion of consolidated total assets, $8.7 billion of deposits, $7.7 billion of loans and $2.1 billion of shareholders’ equity.

Wesbanco’s website can be accessed at http://www.wesbanco.com. Information contained in Wesbanco’s website does not constitute part of, and is not incorporated into, this joint proxy statement/prospectus. Wesbanco’s common stock trades on the Nasdaq Global Select Market under the symbol “WSBC.”

Old Line Bancshares, Inc.

1525 Pointer Ridge Place

Bowie, Maryland 20716

(301) 430-2500

Old Line Bancshares is the parent company of Old Line Bank, a Maryland-chartered trust company with the powers of a commercial bank, headquartered in Bowie, Maryland, approximately 10 miles east of Andrews Air Force Base and 20 miles east of Washington, D.C. Old Line Bank has 37 branches located in its primary market area of the suburban Maryland (Washington, D.C. suburbs, Southern Maryland and Baltimore suburbs) counties of Anne Arundel, Baltimore, Calvert, Carroll, Charles, Harford, Howard, Frederick, Montgomery, Prince George’s and St. Mary’s, and Baltimore City. It also targets customers throughout the greater Washington, D.C. and Baltimore metropolitan areas.

As of June 30, 2019, Old Line Bancshares had approximately $3.1 billion of consolidated total assets, $2.4 billion of deposits, $2.4 billion of loans and $389.3 million of stockholders’ equity.

Old Line Bancshares’ website can be accessed at http://www.oldlinebank.com. Information contained in Old Line Bancshares’ website does not constitute part of, and is not incorporated into, this joint proxy statement/prospectus. Old Line Bancshares’ common stock trades on the Nasdaq Capital Market under the symbol “OLBK.”



 

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COMPARATIVE PER SHARE MARKET PRICES AND IMPLIED VALUE OF MERGER CONSIDERATION

The following table presents the closing market prices for Wesbanco and Old Line Bancshares common stock on July 23, 2019 and September 19, 2019, respectively. July 23, 2019 was the last full trading day prior to the public announcement of the signing of the merger agreement. September 19, 2019 was the last practicable full trading day for which information was available prior to the date of this joint proxy statement/prospectus. The table also shows the implied value of the merger consideration for each share of Old Line Bancshares common stock as of the same two dates. This implied value was calculated by multiplying the closing price of Wesbanco common stock on those dates by the exchange ratio of 0.7844.

 

     Wesbanco      Old Line
Bancshares
     Implied Per Share
Value of Merger
Consideration
 

July 23, 2019

   $ 37.69      $ 26.09      $ 29.56  

September 19, 2019

   $ 37.67      $ 29.20      $ 29.55  

The above table shows only historical comparisons. These comparisons may not provide meaningful information to Wesbanco shareholders or Old Line Bancshares stockholders in determining how to vote. Wesbanco shareholders and Old Line Bancshares stockholders are urged to obtain current market quotations for shares of Wesbanco common stock and Old Line Bancshares common stock and to review carefully the other information contained in this joint proxy statement/prospectus or incorporated by reference into this joint proxy statement/prospectus in considering how to vote. The market prices of Wesbanco common stock and Old Line Bancshares common stock have fluctuated since the date of the announcement of the merger and will fluctuate between the date of this joint proxy statement/prospectus, the dates of the respective special meetings of Wesbanco and Old Line Bancshares and the date of completion of the merger. No assurance can be given concerning the market prices of Old Line Bancshares common stock or Wesbanco common stock before or after the effective date of the merger. Changes in the market price of Wesbanco common stock prior to the completion of the merger will affect the market value of the merger consideration that Old Line Bancshares stockholders will receive upon completion of the merger. Wesbanco common stock trades on the Nasdaq Global Select Market under the trading symbol “WSBC.” Old Line Bancshares common stock trades on the Nasdaq Capital Market under the trading symbol “OLBK.”

As of September 19, 2019, the last date prior to printing this joint proxy statement/prospectus for which it was practicable to obtain this information for Wesbanco and Old Line Bancshares, respectively, there were approximately 7,514 registered holders of Wesbanco common stock and approximately 820 registered holders of Old Line Bancshares common stock.

Dividends

Wesbanco and Old Line Bancshares both currently pay a quarterly cash dividend on shares of their respective common stock. Under the terms of the merger agreement, we have agreed that Wesbanco and Old Line Bancshares will coordinate the payment of any dividends and the record date and payment dates relating thereto, such that Old Line Bancshares stockholders (who will become Wesbanco shareholders after the merger) will not receive two dividends, or fail to receive one dividend, from Old Line Bancshares and/or Wesbanco for any single calendar quarter.



 

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SELECTED HISTORICAL FINANCIAL DATA OF WESBANCO

The following table sets forth certain historical financial data concerning Wesbanco as of or for the six months ended June 30, 2019 and 2018 and as of or for each of the five fiscal years ended December 31, 2018, 2017, 2016, 2015 and 2014, which is derived from Wesbanco’s consolidated financial statements. The following information is only a summary, and you should read this information in conjunction with Wesbanco’s audited consolidated financial statements and related notes included in Wesbanco’s Annual Reports on Form 10-K for the years ended December 31, 2018, 2017, 2016, 2015 and 2014, and unaudited interim consolidated financial statements included in Wesbanco’s Quarterly Reports on Form 10-Q for the quarterly periods ended June 30, 2019 and 2018, which have been filed with the SEC and are incorporated by reference into this document and from which this information is derived. See “Where You Can Find More Information About Wesbanco and Old Line Bancshares.”

 

(Dollars in thousands, except

per share amounts)                

   As of or for the Six
Months Ended

June 30,
    As of or for the years ended December 31,  
   2019     2018     2018     2017     2016     2015     2014  
     (Unaudited)                                

Summary Statements of Income

              

Net interest income

   $ 196,822     $ 155,536     $ 347,236     $ 290,295     $ 253,330     $ 236,987     $ 193,228  

Provision for credit losses

     5,254       3,876       7,764       9,986       8,478       8,353       6,405  

Other income

     58,929       47,491       100,276       88,840       81,499       74,466       68,504  

Other expense

     146,385       118,114       265,224       220,860       208,680       193,923       161,633  

Income tax provision

     18,961       14,339       31,412       53,807       31,036       28,415       23,720  

Net income available to common shareholders

     85,151       66,698       143,112       94,482       86,635       80,762       69,974  

Per Share Information

              

Earnings

              

Basic per common share

     1.56       1.47       2.93       2.15       2.16       2.15       2.39  

Diluted per common share

     1.56       1.47       2.92       2.14       2.16       2.15       2.39  

Dividends per common share

     0.62       0.58       1.16       1.04       0.96       0.92       0.88  

Book value per common share

     37.92       32.68       36.24       31.68       30.53       29.18       26.90  

Tangible common book value per share(1)

     21.40       18.59       19.63       18.42       17.19       16.51       16.09  

Selected Ratios

              

Return on average assets

     1.37     1.29     1.26     0.96     0.97     0.99     1.12

Return on average equity

     8.47     9.22     8.68     6.83     7.13     7.62     8.97

Allowance for loan losses to total loans

     0.66     0.70     0.64     0.71     0.70     0.82     1.09

Allowance for loan losses to total non-performing loans

     1.32x       1.24x       1.34x       1.04x       1.11x       0.93x       0.88x  

Shareholders’ equity to total assets

     16.60     13.92     15.88     14.21     13.70     13.25     12.52

Tangible common equity to tangible assets(1)

     10.10     8.43     9.28     8.79     8.20     7.95     7.88

Tier 1 leverage ratio

     11.09     10.21     10.74     10.39     9.81     9.38     9.88

Tier 1 capital to risk-weighted assets

     15.39     14.26     15.09     14.12     13.16     13.35     13.76

Total capital to risk-weighted assets

     16.32     15.26     15.99     15.16     14.18     14.11     14.81

Common equity tier 1 capital ratio (CET 1)

     13.83     12.38     13.14     12.14     11.28     11.66     N/A  

Selected Balance Sheet Information

              

Assets

   $ 12,494,653     $ 10,946,584     $ 12,458,632     $ 9,816,178     $ 9,790,877     $ 8,470,298     $ 6,296,565  

Securities

     3,041,706       2,829,811       3,146,800       2,284,822       2,316,214       2,422,450       1,511,094  

Net portfolio loans

     7,737,854       6,792,899       7,607,333       6,296,157       6,205,762       5,024,132       4,042,112  

Deposits

     8,694,928       7,668,604       8,831,633       7,043,588       7,040,879       6,066,299       5,048,983  

Shareholders’ equity

     2,074,116       1,524,106       1,978,827       1,395,321       1,341,408       1,122,132       788,190  

 

(1)

See Non-GAAP Financial Measures for additional information relating to the calculation of this ratio.

N/A — Not applicable



 

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SELECTED HISTORICAL FINANCIAL DATA OF OLD LINE BANCSHARES

The following table sets forth certain historical financial data concerning Old Line Bancshares as of or for the six months ended June 30, 2019 and 2018 and as of or for each of the five fiscal years ended December 31, 2018, 2017, 2016, 2015 and 2014, which is derived from Old Line Bancshares’ consolidated financial statements. The following information is only a summary, and you should read this information in conjunction with Old Line Bancshares’ audited consolidated financial statements and related notes included in Old Line Bancshares’ Annual Reports on Form 10-K for the years ended December 31, 2018, 2017, 2016, 2015 and 2014, and unaudited interim consolidated financial statements included in Old Line Bancshares’ Quarterly Reports on Form 10-Q for the quarterly periods ended June 30, 2019 and 2018, which have been filed with the SEC and are incorporated by reference into this document and from which this information is derived. See “Where You Can Find More Information About Wesbanco and Old Line Bancshares.”

 

(Dollars in thousands, except

per share amounts)

   As of or for the Six
Months Ended

June 30,
    As of or for the years ended December 31,  
   2019     2018     2018     2017     2016     2015     2014  
     (Unaudited)                                

Summary Statements of Income

              

Net interest income

   $ 46,780     $ 40,911     $ 89,946     $ 62,114     $ 52,940     $ 46,589     $ 41,703  

Provision for loan losses

     487       927       1,849       955       1,585       1,311       2,827  

Other income

     6,021       4,983       11,981       7,801       8,256       6,845       5,957  

Other expense

     28,980       32,069       62,691       44,843       39,643       36,276       35,046  

Income tax provision

     5,917       4,187       10,169       8,153       6,813       5,382       2,694  

Net income

     17,416       8,791       27,218       15,964       13,155       10,464       7,093  

Per Share Information

              

Earnings

              

Basic per common share

     1.02       0.61       1.73       1.38       1.21       0.98       0.66  

Diluted per common share

     1.02       0.60       1.71       1.35       1.20       0.97       0.65  

Dividends per common share

     0.24       0.18       0.38       0.32       0.24       0.21       0.18  

Book value per common share

     22.90       20.86       21.77       16.61       13.81       13.31       12.51  

Tangible common book value per share(1)

     16.51       14.32       15.31       14.10       12.59       12.00       11.38  

Selected Ratios

              

Return on average assets

     1.16     0.72     1.01     0.84     0.83     0.79     0.60

Return on average equity

     9.09     6.27     8.29     8.53     8.83     7.54     5.45

Allowance for loan losses to total loans

     0.32     0.29     0.31     0.35     0.45     0.43     0.46

Allowance for loan losses to total non-performing loans

     1.01x       2.17x       1.52x       3.15x       0.85x       0.82x       0.74x  

Stockholders’ equity to total assets

     12.66     12.08     12.57     9.87     8.82     9.54     11.02

Tangible common equity to tangible assets(1)

     9.46     8.62     9.18     8.50     8.10     8.68     10.13

Tier 1 leverage ratio

     10.53     10.54     10.20     9.60     9.50     10.70     12.30

Tier 1 capital to risk-weighted assets

     11.69     10.95     11.80     11.80     12.30     11.10     12.70

Total capital to risk-weighted assets

     11.99     11.21     9.40     8.80     8.60     9.10     9.90

Common equity tier 1 capital ratio (CET 1)

     11.69     10.95     10.00     9.40     9.20     10.70     N/A  

Selected Balance Sheet Information

              

Assets

   $ 3,075,613     $ 2,933,376     $ 2,950,007     $ 2,105,613     $ 1,709,020     $ 1,510,089     $ 1,227,519  

Securities

     295,970       209,942       219,706       218,353       199,505       194,706       161,680  

Net portfolio loans

     2,420,437       2,347,821       2,409,228       1,696,361       1,361,175       1,147,035       926,573  

Deposits

     2,384,481       2,207,678       2,296,049       1,652,903       1,325,881       1,235,880       1,015,739  

Stockholders’ equity

     389,312       354,344       370,771       207,727       150,667       143,731       135,264  

 

(1)

See Non-GAAP Financial Measures for additional information relating to the calculation of this ratio.

N/A — Not applicable



 

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SELECTED UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

The following table shows selected unaudited pro forma condensed combined financial information about the financial condition and results of operations of Wesbanco giving effect to the merger with Old Line Bancshares. The selected unaudited pro forma condensed combined financial information assumes that the merger is accounted for under the acquisition method of accounting, with Wesbanco treated as the acquirer. Under the acquisition method of accounting, the assets and liabilities of Old Line Bancshares, as of the effective date of the merger, will be recorded by Wesbanco at their respective estimated fair values, and the excess of the merger consideration over the fair value of Old Line Bancshares’ net assets will be allocated to goodwill.

The unaudited pro forma condensed combined financial information set forth below assumes that the merger was consummated on January 1, 2018 for purposes of the unaudited pro forma condensed combined statements of income and June 30, 2019 for purposes of the unaudited pro forma condensed combined balance sheet and gives effect to the merger, for purposes of the unaudited pro forma condensed combined statement of income, as if it had been effective during the entire period presented. The selected unaudited pro forma condensed combined financial data has been derived from, and should be read in conjunction with, the unaudited pro forma condensed combined financial information, including the notes thereto, which is included in this joint proxy statement/prospectus under “Unaudited Pro Forma Condensed Combined Financial Information.”

The unaudited pro forma condensed combined financial statements included herein are presented for informational purposes only and do not necessarily reflect the financial results of the combined company had the companies actually been combined at the beginning of each period presented. This information has been adjusted to give effect to pro forma events that are (i) directly attributable to the acquisition of Old Line Bancshares, (ii) factually supportable, and (iii) expected to have a continuing impact on the combined results. The adjustments included in these unaudited pro forma condensed financial statements are preliminary and may be revised. This information also does not reflect the benefits of the expected cost savings and expense efficiencies, opportunities to earn additional revenue, potential impacts of current market conditions on revenues, or asset dispositions, among other factors, and includes various preliminary estimates and may not necessarily be indicative of the financial position or results of operations that would have occurred if the merger had been consummated on the date or at the beginning of the period indicated or which may be attained in the future. The unaudited pro forma condensed combined financial statements and accompanying notes should be read in conjunction with and are qualified in their entirety by reference to the historical consolidated financial statements and related notes thereto of Wesbanco and its subsidiaries and of Old Line Bancshares and its subsidiaries. Such information and notes thereto are incorporated by reference herein. See “Where You Can Find More Information About Wesbanco and Old Line Bancshares” on page 134.

Selected Unaudited Pro Forma Condensed Combined Statement of Income Data

 

(Dollars in thousands, except per share data)

   For the
six months ended
June 30, 2019
     For the
year ended
December 31, 2018
 

Unaudited Pro Forma Condensed Combined Income Statement Information

     

Net interest income

   $ 248,919      $ 447,634  

Provision for loan and lease losses

     5,741        9,613  

Income before income taxes

     130,332        217,637  

Net income

     104,847        174,854  

Selected Unaudited Pro Forma Condensed Combined Balance Sheet

 

     As of
June 30, 2019
 

Unaudited Pro Forma Condensed Combined Balance Sheet Information

  

Loans and leases, net

   $ 10,124,976  

Total assets

     15,697,016  

Deposits

     11,093,909  

Total shareholders’ equity

     2,574,178  


 

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COMPARATIVE PER SHARE DATA

(Unaudited)

The following tables set forth the basic earnings, diluted earnings, cash dividends and book value per common share data for Wesbanco and Old Line Bancshares on a historical basis, on a pro forma combined basis, and on a per equivalent Old Line Bancshares share basis, as of or for the six month period ended June 30, 2019, and as of or for the fiscal year ended December 31, 2018.

The pro forma data was derived by combining the historical consolidated financial information of Wesbanco and Old Line Bancshares using the acquisition method of accounting for business combinations and assumes the transaction is completed as contemplated. The pro forma and pro forma-equivalent per share information gives effect to the merger as if the transactions had been effective on the dates presented, in the case of the book value data, and as if the transactions had become effective on January 1, 2018, in the case of the earnings per share and dividends declared data. The unaudited pro forma data in the tables assume that the merger is accounted for using the acquisition method of accounting and represent a current estimate based on available information of the combined company’s results of operations. The pro forma financial adjustments record the assets and liabilities of Old Line Bancshares at their estimated fair values and are subject to adjustment as additional information becomes available and as additional analyses are performed. The information in the following table is based on, and should be read together with, the financial information and financial statements of Wesbanco and Old Line Bancshares incorporated by reference in this joint proxy statement/prospectus. See “Where You Can Find More Information About Wesbanco and Old Line Bancshares.”

This information is presented for illustrative purposes only. You should not rely on the pro forma combined or pro forma equivalent amounts as they are not necessarily indicative of the operating results or financial position that would have occurred if the merger had been completed as of the dates indicated, nor are they necessarily indicative of the future operating results or financial position of the combined company. The pro forma information, although helpful in illustrating the financial characteristics of the combined company under one set of assumptions, does not reflect the benefits of expected cost savings, opportunities to earn additional revenue, the impact of restructuring and merger-related costs, or other factors that may result as a consequence of the merger and, accordingly, does not attempt to predict or suggest future results.

 

     Wesbanco      Old Line
Bancshares
     Pro Forma
Combined
     Per Equivalent
Old Line
Bancshares
 

Earnings per share for the six months ended
June 30, 2019:

           

Basic

   $ 1.56      $ 1.02      $ 1.54      $ 1.21  

Diluted

     1.56        1.02        1.54        1.21  

Cash dividends per share declared for the six months ended June 30, 2019(1)

     0.62        0.24        0.62        0.49  

Book value per common share as of June 30, 2019

     37.92        22.90        37.84        29.68  

Tangible common book value per share as of
June 30, 2019(2)

     21.40        16.51        20.92        16.41  


 

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     Wesbanco      Old Line
Bancshares
     Pro Forma
Combined
     Per Equivalent
Old Line
Bancshares
 

Earnings per share for the fiscal year ended
December 31, 2018:

           

Basic

   $ 2.93      $ 1.73      $ 2.81      $ 2.20  

Diluted

     2.92        1.71        2.80        2.20  

Cash dividends per share declared for the fiscal year ended December 31, 2018(1)

     1.16        0.38        1.16        0.91  

Book value per common share as of the fiscal year ended December 31, 2018

     36.24        21.77        36.35        28.51  

Tangible common book value per share as of the fiscal year ended December 31, 2018(2)

     19.63        15.31        19.36        15.18  

 

(1) Pro forma dividends per share represent Wesbanco’s historical dividends per share.

(2) See Non-GAAP Financial Measures for additional information relating to the calculation of this ratio.



 

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RISK FACTORS

In addition to the other information included in and incorporated by reference into this joint proxy statement/prospectus, including the matters addressed in “Cautionary Statement Regarding Forward-Looking Statements,” and the risk factors included in Wesbanco’s Annual Report on Form 10-K for the fiscal year ended December 31, 2018, and Old Line Bancshares’ Annual Report on Form 10-K for the fiscal year ended December 31, 2018 and Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2019, you should carefully consider the following risk factors before deciding how to vote your shares of Wesbanco common stock or Old Line Bancshares common stock, as applicable. For further discussion of these and other risk factors, please see Wesbanco’s and Old Line Bancshares’ periodic reports and other documents incorporated by reference into this joint proxy statement/prospectus. See “Where You Can Find More Information About Wesbanco and Old Line Bancshares.” Additional risks and uncertainties not presently known to Wesbanco or Old Line Bancshares that are not currently believed to be important to you, if they materialize, also may adversely affect the merger and Wesbanco as the surviving corporation in the merger.

Risks Related to the Merger and Wesbanco’s Business Upon Completion of the Merger

Because the market price of Wesbanco common stock may fluctuate, Wesbanco shareholders and Old Line Bancshares stockholders cannot be certain of the market value of the Wesbanco common stock that Old Line Bancshares stockholders will receive in the merger.

Upon completion of the merger, each share of Old Line Bancshares common stock will become the right to receive 0.7844 of a share of Wesbanco common stock. Any change in the price of Wesbanco common stock prior to completion of the merger will affect the market value of the stock that Old Line Bancshares stockholders will receive in the merger. Old Line Bancshares will not have the right to terminate the merger agreement due to a decline in the trading price of Wesbanco common stock unless both (a) the average closing price of Wesbanco common stock during a specified period before the effective time of the merger is less than $30.22 and (b) Wesbanco common stock underperforms the Nasdaq Bank Index by more than 20%. See “The Merger — Termination of the Merger Agreement” for a description of Old Line Bancshares’ right to terminate the merger agreement due to certain declines in the trading price of Wesbanco common stock.

Stock price changes may result from a variety of factors, including general market and economic conditions, changes in Wesbanco’s or Old Line Bancshares’ businesses, operations and prospects, and regulatory considerations. We urge Wesbanco shareholders and Old Line Bancshares stockholders to obtain current market quotations for Wesbanco and Old Line Bancshares common stock when deciding how to vote.

If the price of Wesbanco common stock declines, Old Line Bancshares stockholders may receive less value for their shares upon completion of the merger than the value calculated pursuant to the exchange ratio on the date the merger agreement was executed, on the date of this joint proxy statement/prospectus or on the date of the Old Line Bancshares special meeting. For example, based on the range of closing prices of Wesbanco common stock during the period from July 23, 2019, the last full trading day before public announcement of the merger, through September 19, 2019, the last practicable full trading day prior to the date of this joint proxy statement/prospectus, the exchange ratio represented a value ranging from a high of $29.71 on September 18, 2019 to a low of $26.41 on September 3, 2019 for each share of Old Line Bancshares common stock. Because the date the merger is completed will be later than the dates of Wesbanco special meeting and the Old Line Bancshares special meeting, Wesbanco shareholders and Old Line Bancshares stockholders will not know what the market value of Wesbanco common stock will be upon completion of the merger when voting at their respective special meetings.

 

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The opinions of Wesbanco’s and Old Line Bancshares’ respective financial advisors delivered to the respective Wesbanco and Old Line Bancshares boards of directors prior to the execution of the merger agreement do not reflect changes in circumstances after the dates of the opinions.

The opinion of Wesbanco’s financial advisor to the Wesbanco board of directors regarding the merger consideration to be paid by Wesbanco was delivered on, and dated, July 23, 2019. Similarly, the opinion of Old Line Bancshares’ financial advisor to the Old Line Bancshares board of directors regarding the exchange ratio in the proposed merger was delivered on, and dated, July 23, 2019. Subsequent changes in the operations and prospects of Wesbanco or Old Line Bancshares, general market and economic conditions and other factors that may be beyond the control of Wesbanco or Old Line Bancshares may significantly alter the value of Wesbanco or Old Line Bancshares or the prices of the shares of Wesbanco common stock or Old Line Bancshares common stock by the time the merger is completed. The opinions do not speak as of the time the merger is completed, or as of any other date other than the dates of the respective opinions. The opinion of Wesbanco’s financial advisor is attached as Annex B to this joint proxy statement/prospectus. The opinion of Old Line Bancshares’ financial advisor is attached as Annex C to this joint proxy statement/prospectus. See “The Merger — Opinion of Wesbanco’s Financial Advisor” and “The Merger — Opinion of Old Line Bancshares’ Financial Advisor” for descriptions of the opinions and summaries of the analyses performed by Wesbanco’s and Old Line Bancshares’ financial advisors in connection with their respective opinions.

The combined company will incur significant transaction and merger-related costs in connection with the merger.

Wesbanco and Old Line Bancshares expect to incur costs associated with combining the operations of the two companies. Wesbanco and Old Line Bancshares have just recently begun collecting information in order to formulate detailed integration plans to deliver planned synergies. Additional unanticipated costs may be incurred in the integration of the businesses of Wesbanco and Old Line Bancshares. Whether or not the merger is consummated, Wesbanco and Old Line Bancshares will incur substantial expenses, such as legal, accounting, printing and financial advisory fees, in pursuing the merger. Although Wesbanco and Old Line Bancshares expect that the elimination of duplicative costs, as well as the realization of other efficiencies related to the integration of the businesses, may offset incremental transaction and merger-related costs over time, this net benefit may not be achieved in the near term, or at all.

If the merger is not completed, Wesbanco and Old Line Bancshares will have incurred substantial expenses without their shareholders and stockholders realizing the expected benefits of the merger.

Wesbanco and Old Line Bancshares have each incurred substantial expenses in connection with the transactions described in this joint proxy statement/prospectus, which are charged to earnings as incurred. If the merger is not completed, these expenses will still be charged to earnings even though Wesbanco and Old Line Bancshares would not have realized the expected benefits of the merger. There can be no assurance that the merger will be completed.

Wesbanco may not be able to successfully integrate Old Line Bancshares or to realize the anticipated benefits of the merger.

The merger involves the combination of two companies that previously have operated independently. A successful combination of the operations of the two entities will depend substantially on Wesbanco’s ability to consolidate operations, systems and procedures and to eliminate redundancies and reduce costs of the combined operations. Wesbanco may not be able to combine the operations of Old Line Bancshares and Wesbanco without encountering difficulties, such as:

 

   

the loss of key employees and customers;

 

   

the disruption of operations and business;

 

   

the inability to maintain and increase competitive presence;

 

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those associated with entering a new geographic market;

 

   

deposit attrition, customer loss and revenue loss;

 

   

possible inconsistencies in standards, control procedures and policies;

 

   

unexpected problems with costs, operations, personnel, technology and credit; and/or

 

   

problems with the assimilation of new operations, sites or personnel, which could divert resources from regular banking operations.

Additionally, general market and economic conditions or governmental actions affecting the financial industry generally may inhibit the successful integration of Old Line Bancshares and Wesbanco.

Further, Wesbanco and Old Line Bancshares entered into the merger agreement with the expectation that the merger will result in various benefits including, among other things, benefits relating to enhanced revenues, a strengthened market position for the combined company, cross selling opportunities, technology, cost savings and operating efficiencies. Achieving the anticipated benefits of the merger is subject to a number of uncertainties, including whether Wesbanco integrates Old Line Bancshares in an efficient and effective manner, and general competitive factors in the marketplace. Failure to achieve these anticipated benefits could result in increased costs, decreases in the amount of expected revenues and diversion of management’s time and energy and could materially impact Wesbanco’s business, financial condition and operating results. Finally, any cost savings that are realized may be offset by losses in revenues or other charges to earnings.

The unaudited pro forma condensed combined financial information included in this document are preliminary and the actual financial condition and results of operations of Wesbanco after the merger may differ materially.

The unaudited pro forma condensed combined financial information in this document are presented for illustrative purposes only and are not necessarily indicative of what Wesbanco’s actual financial condition or results of operations would have been had the merger been completed on the dates indicated. The unaudited pro forma condensed combined financial information reflect adjustments, which are based upon preliminary estimates, to record the Old Line Bancshares identifiable assets acquired and liabilities assumed at fair value and the resulting goodwill recognized. The purchase price allocation reflected in this document is preliminary, and final allocation of the purchase price will be based upon the actual purchase price and the fair value of the assets and liabilities of Old Line Bancshares as of the date of the completion of the merger. Accordingly, the final acquisition accounting adjustments may differ materially from the pro forma adjustments reflected in this document. For more information, please see “Unaudited Pro Forma Condensed Combined Financial Information.”

The merger agreement may be terminated in accordance with its terms, and the merger may not be completed.

The merger agreement is subject to a number of conditions that must be fulfilled in order to complete the merger. Those conditions include, among others, approval of the Wesbanco Merger Proposal and the Wesbanco Stock Issuance Proposal by Wesbanco shareholders, approval of the Old Line Bancshares Merger Proposal by Old Line Bancshares stockholders, regulatory approvals, absence of orders prohibiting the completion of the merger, effectiveness of the registration statement of which this joint proxy statement/prospectus is a part, that Nasdaq shall have completed its review of the “Listing of Additional Shares Notification Form” filed by Wesbanco with respect to the shares of Wesbanco common stock to be issued in the merger, the continued accuracy of the representations and warranties by both parties, the performance by both parties of their covenants and agreements, and the receipt by both parties of legal opinions from their respective tax counsels. See “The Merger — Termination of the Merger Agreement” for a more complete discussion of the circumstances under which the merger agreement could be terminated. Any of these conditions to closing of the merger may not be fulfilled, and as a result the merger may not be completed.

 

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Termination of the merger agreement could negatively affect Wesbanco and/or Old Line Bancshares.

If the merger agreement is terminated, there may be various consequences, including:

 

   

Wesbanco’s and/or Old Line Bancshares’ businesses may have been adversely impacted by the failure to pursue other beneficial opportunities due to the focus of management on the merger, without realizing any of the anticipated benefits of completing the merger;

 

   

the market price of Wesbanco and/or Old Line Bancshares common stock might decline to the extent that the current market price reflects a market assumption that the merger will be completed; and

 

   

Old Line Bancshares may be required to pay a termination fee of $16,000,000 to Wesbanco under certain circumstances. See “The Merger — Termination Fee.”

In addition, if the merger agreement is terminated and Old Line Bancshares’ board of directors seeks another merger or business combination, Old Line Bancshares stockholders cannot be certain that Old Line Bancshares will be able to find a party willing to offer equivalent or more attractive consideration than the consideration Wesbanco has agreed to provide in the merger, or find another buyer at all.

Further, if the merger is not completed, Wesbanco and/or Old Line Bancshares may experience negative reactions from the financial markets and from their respective shareholders/stockholders, customers and employees. Wesbanco and/or Old Line Bancshares also could be subject to litigation related to any failure to complete the merger or to enforcement proceedings commenced against Wesbanco or Old Line Bancshares to perform their respective obligations under the merger agreement. If the merger is not completed, Wesbanco and Old Line Bancshares cannot assure their stockholders that the risks described above will not materialize and will not materially affect the business, financial results and stock prices of Wesbanco and/or Old Line Bancshares.

The merger agreement limits Old Line Bancshares’ ability to pursue alternatives to the merger.

The merger agreement contains provisions that, subject to narrow exceptions, limit Old Line Bancshares’ ability to discuss, facilitate or enter into agreements with third parties to acquire it. If Old Line Bancshares avails itself of those limited exceptions, it could be obligated to pay Wesbanco a break-up fee of $16,000,000 under certain specified circumstances. These provisions could discourage a potential competing acquiror that might have an interest in acquiring Old Line Bancshares from proposing or considering such an acquisition even if that potential acquiror were prepared to pay a higher price to Old Line Bancshares stockholders than the merger consideration.

Old Line Bancshares will be subject to business uncertainties and contractual restrictions while the merger is pending.

Uncertainties about the effect of the merger on employees and customers may have an adverse effect on Old Line Bancshares and consequently on Wesbanco. These uncertainties may impair Old Line Bancshares’ ability to attract, retain and motivate key personnel until the merger is completed, and could cause customers and others that deal with Old Line Bancshares to seek to change existing business relationships with Old Line Bancshares. Retention of certain employees may be challenging during the pendency of the merger, as certain employees may experience uncertainty about their future roles. If key employees depart because of issues relating to the uncertainty and difficulty of integration or a desire not to remain with the business, Old Line Bancshares’ business prior to the merger and the combined company’s business following the merger could be negatively impacted. In addition, the merger agreement restricts Old Line Bancshares from making certain acquisitions and taking other specified actions before the merger occurs without the consent of Wesbanco. These restrictions may prevent Old Line Bancshares from pursuing business opportunities that may arise prior to the completion of the merger and, therefore, could have a material adverse effect on Old Line Bancshares’ business, financial condition and results of operations. See “The Merger — Conduct of Business Prior to the Merger” for a description of restrictive covenants applicable to Old Line Bancshares.

 

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The need for regulatory approvals may delay the date of completion of the merger or may diminish the benefits of the merger.

Wesbanco is required to obtain the approvals of certain bank regulatory agencies prior to completing the merger and the bank merger. Satisfying any requirements of these regulatory agencies may delay the date of completion of the merger and the bank merger. The requisite regulatory approvals may not be received at all (in which case the merger and the bank merger could not be completed), may not be received in a timely fashion, or may contain conditions or restrictions on completion of the merger or the bank merger that cannot be satisfied. In addition, any conditions or restrictions imposed could have the effect of imposing additional costs on or limiting the revenues of the combined company following the merger and the bank merger, which might have an adverse effect on the combined company following the merger. You should also be aware that it is possible that, among other things, restrictions on the combined operations of the two companies, including divestitures, may be sought by governmental agencies as a condition to obtaining the required regulatory approvals. This may diminish the benefits of the merger to the combined company or otherwise have an adverse effect on the combined company following the merger. See “The Merger — Regulatory Approvals” for a description of the regulatory approvals required to complete the merger.

If the merger does not constitute a reorganization under Section 368(a) of the Code, then each Old Line Bancshares stockholder may be responsible for payment of U.S. federal income taxes related to the exchange of Old Line Bancshares common stock for Wesbanco common stock.

The U.S. Internal Revenue Service may determine that the merger does not qualify as a nontaxable reorganization under Section 368(a) of the Code. In that case, each Old Line Bancshares stockholder would recognize a gain or loss equal to the difference between (i) the sum of the fair market value of Wesbanco common stock received by the Old Line Bancshares stockholder in the merger and (ii) the Old Line Bancshares stockholder’s adjusted tax basis in the shares of Old Line Bancshares common stock exchanged therefor.

Old Line Bancshares stockholders will have less influence as shareholders of Wesbanco than they have as stockholders of Old Line Bancshares.

Old Line Bancshares stockholders currently have the right to vote in the election of the board of directors of Old Line Bancshares and on other matters affecting Old Line Bancshares. Based upon the number of shares of Old Line Bancshares common stock outstanding as of September 19, 2019, the last date before the date of this joint proxy statement/prospectus for which it was practicable to obtain this information, the current stockholders of Old Line Bancshares as a group will own approximately 19.9% of the voting power of the combined organization immediately after the merger. When the merger occurs, each Old Line Bancshares stockholder will become a shareholder of Wesbanco with a percentage ownership of the combined organization much smaller than the stockholder’s current percentage ownership of Old Line Bancshares. Because of this, Old Line Bancshares stockholders will have less influence on the management and policies of Wesbanco than they now have on the management and policies of Old Line Bancshares.

Directors and officers of Old Line Bancshares have interests in the merger that differ from the interests of non-management Old Line Bancshares stockholders.

The executive officers of Old Line Bancshares and Wesbanco, with the assistance of the parties’ respective legal counsel and financial advisors, negotiated the terms of the merger agreement. The Old Line Bancshares and Wesbanco boards of directors have approved the merger agreement, and the Wesbanco board of directors is recommending that Wesbanco shareholders vote to approve Wesbanco Merger Proposal and the Wesbanco Stock Issuance Proposal and Old Line Bancshares board of directors is recommending that Old Line Bancshares stockholders vote to approve the Old Line Bancshares Merger Proposal and the Old Line Bancshares Merger-Related Compensation Proposal. In considering these facts and the other information included in this joint proxy statement/prospectus or incorporated by reference into it, you should be aware that Old Line Bancshares’

 

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directors and executive officers have economic and other interests in the merger beyond their interests as stockholders. These include, for example:

 

   

Two current Old Line Bancshares directors, anticipated to be James W. Cornelsen and Gregory S. Proctor, Jr., will be appointed to the board of directors of Wesbanco upon completion of the merger.

 

   

All of Old Line Bancshares’ current directors will be appointed to a newly-created advisory board for Wesbanco Bank for the Mid-Atlantic market.

 

   

Wesbanco and Wesbanco Bank entered into agreements with each of the named executive officers of Old Line Bancshares, pursuant to which such executive officers will receive certain payments in connection with the completion of the merger.

 

   

Wesbanco has created a retention bonus pool for certain key employees, including some executive officers, to ensure continuity through the conversion of the data processing system of Old Line Bancshares.

 

   

Wesbanco has entered into agreements with certain Old Line Bancshares key employees, including some executive officers, pursuant to which Wesbanco will grant, immediately after and subject to the occurrence of the effective time of the merger, restricted shares of Wesbanco common stock which will cliff-vest on the second anniversary of the grant date if such employee remains employed by Wesbanco or Wesbanco Bank at that time.

 

   

The merger agreement provides that Wesbanco will continue the indemnification rights of Old Line Bancshares’ current and former directors and executive officers and will provide, for six years after completion of the merger, directors’ and officers’ insurance for these individuals.

See “The Merger—Interests of Certain Persons in the Merger.”

Following the merger, a high percentage of the combined company’s loan portfolio will be concentrated in West Virginia, Ohio, Pennsylvania, Indiana, Kentucky and Maryland and in commercial and residential real estate. Deteriorations in economic conditions in these areas or in the real estate market generally could be more harmful to the combined company compared to more diversified institutions.

As of June 30, 2019, approximately 21.1%, of Wesbanco’s loan portfolio was comprised of residential real estate loans, and 50.0% was comprised of commercial real estate loans. Assuming the merger had been completed on June 30, 2019, the combined company’s loan portfolio as of that date would have been 20.5% residential real estate loans and 53.1% commercial real estate loans.

Inherent risks of commercial real estate (“CRE”) lending include the cyclical nature of the real estate market, construction risk and interest rate risk. The cyclical nature of real estate markets can cause CRE loans to suffer considerable distress. During these times of distress, a property’s performance can be negatively affected by tenants’ deteriorating credit strength and lease expirations in times of softening demand caused by economic deterioration or over-supply conditions. Even if borrowers are able to meet their payment obligations, they may find it difficult to refinance their full loan amounts at maturity due to declines in property value. Other risks associated with CRE lending include regulatory changes and environmental liability. Regulatory changes in tax legislation, zoning or similar external conditions including environmental liability may affect property values and the economic feasibility of existing and proposed real estate projects.

The combined company’s CRE loan portfolio will be concentrated in West Virginia, Ohio, Pennsylvania, Indiana, Kentucky and Maryland. There are a wide variety of economic conditions within the local markets of the six states in which most of the combined company’s CRE loan portfolio will be situated. Rates of employment, consumer loan demand, household formation, and the level of economic activity can vary widely from state to state and among metropolitan areas, cities and towns. Metropolitan markets comprise various submarkets where property values and demand can be affected by many factors, such as demographic makeup, geographic features,

 

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transportation, recreation, local government, school systems, utility infrastructure, tax burden, building-stock age, zoning and building codes, and available land for development. Despite the merger, as a result of the continued high concentration of the combined company’s loan portfolio, the combined company may be more sensitive, compared to more diversified institutions, to future disruptions in, and deterioration of, this market, which could lead to losses that could have a material adverse effect on the business, financial condition and results of operations of the combined company.

Litigation against Old Line Bancshares or Wesbanco, or the members of the Old Line Bancshares or Wesbanco board of directors, could prevent or delay the completion of the merger.

Stockholders of Old Line Bancshares may file lawsuits against Old Line Bancshares, Wesbanco, and/or the boards of directors of either company in connection with the merger. The results of any such potential legal proceedings are difficult to predict and such legal proceedings could delay or prevent the merger from being competed in a timely manner. The existence of litigation related to the merger could affect the likelihood of obtaining the required approvals from Old Line Bancshares stockholders and Wesbanco shareholders. Moreover, any litigation could be time consuming and expensive, and could divert Old Line Bancshares’ and Wesbanco’s management’s attention away from their regular business. Any lawsuit adversely resolved against Old Line Bancshares, Wesbanco, or members of their boards of directors could have a material adverse effect on each company’s business, financial condition and results of operations.

Moreover, one of the conditions to the completion of the merger is the absence of any restraining order, preliminary or permanent injunction or other order issued by a court of competent jurisdiction or other legal restraint or prohibition preventing the consummation of the merger or the bank merger, and that no governmental authority or regulatory authority of competent jurisdiction shall have enacted, issued, promulgated, enforced, deemed applicable or entered any statute, rule, regulation, judgment, decree, injunction or other order prohibiting consummation of the transactions contemplated by the merger agreement or making the merger or the bank merger illegal. Consequently, if a settlement or other resolution is not reached in any lawsuit that is filed or any regulatory proceeding and a claimant secures injunctive or other relief or a governmental authority issues an order or other directive restricting, prohibiting or making illegal consummation of the consummation of the transactions contemplated by the merger agreement (including the merger), then such injunctive or other relief may prevent the merger from becoming effective in a timely manner or at all.

Risks Related to Wesbanco’s Business

You should read and consider risk factors specific to Wesbanco’s business that will also affect the combined company after the merger. These risks are described in the sections entitled “Risk Factors” in Wesbanco’s Annual Report on Form 10-K for the fiscal year ended December 31, 2018 and in other documents incorporated by reference into this joint proxy statement/prospectus. Please see the section entitled “Where You Can Find More Information About Wesbanco and Old Line Bancshares” in this joint proxy statement/prospectus for the location of information incorporated by reference into this joint proxy statement/prospectus.

Risks Related to Old Line Bancshares’ Business

You should read and consider risk factors specific to Old Line Bancshares’ business that will also affect the combined company after the merger. These risks are described in the sections entitled “Risk Factors” in Old Line Bancshares’ Annual Report on Form 10-K for the fiscal year ended December 31, 2018, Old Line Bancshares’ Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2019, and in other documents incorporated by reference into this proxy statement/prospectus. Please see the section entitled “Where You Can Find More Information About Wesbanco and Old Line Bancshares” in this joint proxy statement/prospectus for the location of information incorporated by reference into this joint proxy statement/prospectus.

 

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THE WESBANCO SPECIAL MEETING

General

This section contains information about the special shareholder meeting Wesbanco has called to consider and vote on proposals to: (i) approve the merger agreement, which we refer to in this joint proxy statement/prospectus as the Wesbanco Merger Proposal; (ii) approve the issuance of Wesbanco common stock in connection with the merger, which we refer to in this joint proxy statement/prospectus as the Wesbanco Stock Issuance Proposal; and (iii) approve the adjournment of the Wesbanco special meeting, if necessary, to solicit additional proxies if there are not sufficient votes to approve the Wesbanco Merger Proposal and the Wesbanco Stock Issuance Proposal at the time of the Wesbanco special meeting, which we refer to in this joint proxy statement/prospectus as the Wesbanco Adjournment Proposal. Wesbanco is mailing this joint proxy statement/prospectus to its shareholders on or about September 26, 2019. Together with this joint proxy statement/prospectus, Wesbanco is also sending to its shareholders a notice of the Wesbanco special meeting and a form of proxy that Wesbanco’s board of directors is soliciting for use at the Wesbanco special meeting and at any adjournments of the special meeting.

A copy of the merger agreement is attached to this joint proxy statement/prospectus as Annex A and is incorporated by reference into this document in its entirety. You should read the entire merger agreement carefully.

Date, Time and Place of the Special Meeting

The Wesbanco special meeting will be held in the 7th Floor Board Room of Wesbanco’s offices located at One Bank Plaza, Wheeling, West Virginia, 26003, on October 29, 2019, at 12:00 p.m. Eastern Time.

Matters to be Considered

At the Wesbanco special meeting, Wesbanco shareholders will be asked to consider and vote to approve the following matters:

 

   

Wesbanco Merger Proposal;

 

   

Wesbanco Stock Issuance Proposal; and

 

   

Wesbanco Adjournment Proposal.

Recommendation of Wesbanco’s Board of Directors

The Wesbanco board of directors recommends that you vote “FOR” approval of the Wesbanco Merger Proposal, “FOR” approval of the Wesbanco Stock Issuance Proposal and “FOR” approval of the Wesbanco Adjournment Proposal. See “The Merger — Wesbanco’s Reasons for the Merger and Recommendation of the Wesbanco Board of Directors” for a more detailed discussion of the Wesbanco board of directors’ recommendation.

Record Date; Stock Entitled to Vote; Broker Voting; Quorum

Only holders of record of Wesbanco common stock on September 23, 2019, which we refer to as the Wesbanco record date, will be entitled to notice of and to vote at the Wesbanco special meeting and any adjournments of such meeting. On September 19, 2019, the last date before the date of this joint proxy statement/prospectus for which it was practicable to obtain this information, there were 54,690,225 shares of Wesbanco common stock outstanding. You may cast one vote for each share of Wesbanco common stock you owned on the Wesbanco record date.

A quorum must be present to transact business at the Wesbanco special meeting. A quorum at the Wesbanco special meeting requires the presence, whether in person or by proxy, of at least a majority of the votes entitled to be cast at the Wesbanco special meeting. Abstentions and broker non-votes count as present for establishing a quorum. An abstention occurs when a shareholder attends a meeting, either in person or by proxy, but abstains from voting on a matter.

 

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If your shares of Wesbanco common stock are held in the name of a bank, brokerage firm or other similar holder of record (referred to as “in street name”), you will receive instructions from the holder of record that you must follow for you to specify how your shares will be voted. In general, under the rules of the various national and regional securities exchanges, broker holders of record have the authority to vote shares for which their customers do not provide voting instructions on certain routine, non-contested matters, but not on non-routine proposals. In the case of non-routine items for which specific voting instructions have not been provided, the institution holding street name shares cannot vote those shares. When there is a routine proposal on a ballot or when the broker receives voting instructions on at least one non-routine proposal but not all such proposals, the non-routine proposals for which the broker has not been given voting instructions are often called “broker non-votes.” Since there are no routine items to be voted on at the Wesbanco special meeting, broker nominee record holders that do not receive voting instructions from the beneficial owners of such shares with respect to at least one proposal will not be able to return a proxy card with respect to such shares and these shares will be treated as unvoted shares. As a result, these shares will not be considered present at the Wesbanco special meeting, will not count towards the satisfaction of a quorum and will have no effect on the outcome of any of the three proposals at the Wesbanco special meeting assuming a quorum is present. Conversely, if a broker or other nominee receives voting instructions on one but not all of the proposals, those shares will be voted on that proposal, considered present at the Wesbanco special meeting and will count towards the satisfaction of a quorum.

If your shares are held by a bank or other nominee, however, whether your nominee may vote your shares in the absence of instructions from you will depend on your specific arrangement with your nominee record holder, but in the absence of an arrangement granting such record holder discretionary authority to vote, your record holder nominee will not have authority to vote your shares of Wesbanco common stock on any matter at the Wesbanco special meeting absent specific voting instructions from you. As a result, your shares will not be considered present at the Wesbanco special meeting, will not count towards the satisfaction of a quorum, and will have no effect on the outcome of any of the three proposals at the Wesbanco special meeting, assuming a quorum is present.

If you are the record owner of your shares of Wesbanco common stock and do not vote your shares, your shares will be treated as unvoted shares and will not be counted toward a quorum at the Wesbanco special meeting and will not be voted on any proposal.

Required Vote; Treatment of Abstentions, Broker Non-Votes and Failures to Vote

Wesbanco Merger Proposal. If a quorum exists, approval of the Wesbanco Merger Proposal requires the affirmative vote of at least a majority of the votes cast on the proposal. Abstentions, failures to vote and broker non-votes are not counted as votes cast and will not have any effect on the outcome of this proposal, assuming a quorum is present.

Wesbanco Stock Issuance Proposal. If a quorum exists, approval of the Wesbanco Stock Issuance Proposal requires the affirmative vote of at least a majority of the votes cast on the proposal. Abstentions, failures to vote and broker non-votes are not counted as votes cast and will not have any effect on the outcome of this proposal, assuming a quorum is present.

Wesbanco Adjournment Proposal. If a quorum exists, approval of the Wesbanco Adjournment Proposal requires the affirmative vote of at least a majority of the votes cast on the proposal. Abstentions, failures to vote and broker non-votes are not counted as votes cast and will not have any effect on the outcome of this proposal, assuming a quorum is present.

Shares Held by Wesbanco Officers and Directors and their Affiliates

On September 19, 2019, the last date before the date of this joint proxy statement/prospectus for which it was practicable to obtain this information, the directors and executive officers of Wesbanco and their affiliates owned or controlled the vote of 1,507,390 shares of Wesbanco common stock, or approximately 2.8% of the outstanding shares of Wesbanco common stock.

 

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Voting of Proxies

Wesbanco shareholders may submit the accompanying proxy by telephone, the Internet or by mail. We urge you to submit your proxy if you do not expect to attend the Wesbanco special meeting in person or if you wish to have your Wesbanco shares voted by proxy even if you attend the Wesbanco special meeting. All shares of Wesbanco common stock represented at the Wesbanco special meeting by properly executed proxies received prior to or at the Wesbanco special meeting, and not revoked, will be voted at the Wesbanco special meeting in accordance with the instructions on the proxies. If you properly execute a proxy but include no voting instructions, your shares will be voted “FOR” approval of the (i) Wesbanco Merger Proposal, (ii) Wesbanco Stock Issuance Proposal, and (iii) Wesbanco Adjournment Proposal.

If your shares are held in “street name” (i.e., in the name of a broker, bank or other record holder), you must direct the record holder how to vote your shares in connection with the merger (unless you have granted your non-broker record holder discretionary authority to vote your shares without instructions from you). Your broker, bank or other nominee will send you directions explaining how you can direct the record holder of your shares to vote.

The Wesbanco board of directors does not know of any matters, other than those described in the notice of the Wesbanco special meeting, that are to come before the special meeting. If any other matters are properly presented at the special meeting for action, the persons named in the enclosed form of proxy will have the authority to vote on those matters in their discretion.

Participants in the Wesbanco KSOP

If you participate in the Wesbanco, Inc. KSOP, which consists of a non-contributory leveraged Employee Stock Ownership Plan and a contributory 401(k) profit sharing plan, which we refer to in this joint proxy statement/prospectus as the Wesbanco KSOP, and shares of Wesbanco common stock have been allocated to your account in the Wesbanco KSOP, you are entitled to instruct Newport Group, Inc., the trustee of the Wesbanco KSOP, confidentially, as to how to vote those shares pursuant to the instructions provided to plan participants. The trustee will vote your shares in accordance with your duly executed instructions received by 11:59 p.m. Eastern Time on October 24, 2019. If you do not send instructions, your instructions are not timely received, or your instructions are not properly completed, the shares credited to your account in the Wesbanco KSOP will be voted by the trustee in the same proportion that it votes shares in the Wesbanco KSOP for which it did receive timely instructions. You may also revoke previously given voting instructions by 11:59 p.m. Eastern Time on October 24, 2019 by filing with the trustee either a written notice of revocation or a properly completed and signed instruction bearing a later date.

Revocation of Proxies

If you give a proxy, you have the right to revoke it at any time before it is voted. You may revoke your proxy by (i) filing a written notice of revocation with the Secretary of Wesbanco that is received prior to the vote at the Wesbanco special meeting and bears a later date than the proxy, (ii) duly executing a later-dated proxy card relating to the same Wesbanco shares and delivering it to the Secretary of Wesbanco before the vote at the Wesbanco special meeting, (iii) submitting a later-dated proxy by telephone or the Internet before the vote at the Wesbanco special meeting, or (iv) attending the Wesbanco special meeting and voting in person. Your attendance at the Wesbanco special meeting will not, in and of itself, revoke your proxy. Any written notice of revocation or subsequent dated proxy should be sent to Wesbanco, Inc., 1 Bank Plaza, Wheeling, West Virginia 26003, Attention: Corporate Secretary, or hand delivered to the Wesbanco Corporate Secretary at that address. For a notice of revocation or later proxy to be valid, it must actually be received by Wesbanco prior to the vote of the Wesbanco shareholders.

If your Wesbanco shares are held by a broker, bank or other nominee in street name and you wish to change the instructions you have given your broker, bank or other nominee about how to vote your Wesbanco shares, or

 

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you wish to attend the Wesbanco special meeting and vote in person, you must follow the instructions provided by your broker, bank or other nominee.

Expenses of Solicitation of Proxies

Wesbanco will bear the entire cost of soliciting proxies from Wesbanco shareholders. Wesbanco has engaged a professional proxy solicitation firm, Georgeson LLC (“Georgeson”), to assist in soliciting proxies for use at the Wesbanco special meeting. Wesbanco will pay Georgeson a fee of $8,500 and will reimburse Georgeson for its out-of-pocket expenses. In addition to solicitation by Georgeson and use of the mail, proxies may be solicited by directors, officers and employees of Wesbanco in person or by telephone, facsimile, email or any other means of communication. These directors, officers and employees will not be additionally compensated but may be reimbursed for out-of-pocket expenses they incur in connection with the solicitation. Arrangements will also be made with brokerage houses, custodians, nominees and fiduciaries for the forwarding of solicitation materials to the beneficial owners of Wesbanco common stock held of record by such persons. Wesbanco may reimburse these custodians, nominees and fiduciaries for reasonable out-of-pocket expenses they incur.

Attending the Wesbanco Special Meeting

All holders of Wesbanco common stock, including holders of record and shareholders who hold their shares through banks, brokers or other nominees, are invited to attend the Wesbanco special meeting. Shareholders of record can vote in person at the Wesbanco special meeting. If you are not a shareholder of record, you must obtain a proxy executed in your favor from the record holder of your shares, such as a bank, broker or other nominee, to be able to vote in person at the Wesbanco special meeting. If you plan to attend the Wesbanco special meeting, you must hold your shares in your own name or have a letter from the record holder of your shares confirming your ownership. In addition, you must bring a form of personal photo identification with you in order to be admitted. Wesbanco reserves the right to refuse admittance to anyone without proper proof of share ownership and without proper photo identification.

 

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WESBANCO PROPOSALS

Wesbanco Merger Proposal

Proposal. Wesbanco is asking its shareholders to approve the Wesbanco Merger Proposal. Pursuant to this proposal, Wesbanco shareholders are being asked to approve the merger agreement and the transactions contemplated thereby, including the merger and the bank merger.

Holders of Wesbanco common stock should read this joint proxy statement/prospectus carefully and in its entirety, including the annexes, for more detailed information concerning the merger agreement and the merger. A copy of the merger agreement is attached to this joint proxy statement/prospectus as Annex A.

Vote Required. If a quorum exists, approval of the Wesbanco Merger Proposal requires the affirmative vote of at least a majority of the votes cast on the proposal. Abstentions, unvoted shares and broker non-votes will not have any effect on the outcome of this proposal, assuming a quorum is present. In the event the Wesbanco Merger Proposal is not approved by the requisite vote of Wesbanco shareholders, the merger will not be completed.

Recommendation of Wesbanco’s Board of Directors. After careful consideration, the Wesbanco board of directors adopted the merger agreement and declared the merger agreement and the transactions contemplated thereby, including the merger and the bank merger, to be advisable and in the best interests of Wesbanco and the shareholders of Wesbanco. See “The Merger — Wesbanco’s Reasons for the Merger and Recommendation of the Wesbanco Board of Directors” included elsewhere in this joint proxy statement/prospectus for a more detailed discussion of the Wesbanco board of directors’ recommendation.

The Wesbanco board of directors recommends a vote “FOR” approval of the Wesbanco Merger Proposal.

Wesbanco Stock Issuance Proposal

Proposal. Wesbanco is asking its shareholders to approve the Wesbanco Stock Issuance Proposal. Pursuant to this proposal, Wesbanco shareholders are being asked to approve the issuance of shares of Wesbanco common stock in connection with the merger pursuant to the merger agreement. In the merger, each share of Old Line Bancshares common stock (other than the excluded shares) will be converted into the right to receive 0.7844 of a share of Wesbanco common stock, together with cash in lieu of fractional Wesbanco shares. See “The Merger — Old Line Bancshares’ Stockholders Will Receive Wesbanco Common Stock in the Merger.”

Section 31D-6-621(f) of the West Virginia Business Corporation Act and Nasdaq Listing Rule 5635 require that Wesbanco shareholders approve any issuance of shares of Wesbanco common stock in which the voting power of the shares issued will constitute more than 20% of the voting power of the shares that were outstanding immediately prior to the issuance. The merger will require Wesbanco to issue shares of Wesbanco common stock in an amount that is in excess of 20% of the number of shares of Wesbanco common stock outstanding immediately prior to the merger. As a result, Wesbanco shareholder approval is required to issue the shares of Wesbanco common stock that will constitute the merger consideration.

Wesbanco shareholders should carefully read this joint proxy statement/prospectus in its entirety for more information concerning the Wesbanco Stock Issuance proposal and the issuance of the Wesbanco common stock in connection with the merger.

Vote Required. If a quorum exists, approval of the Wesbanco Stock Issuance Proposal requires the affirmative vote of at least a majority of the votes cast on the proposal. Abstentions, unvoted shares and broker non-votes will not have any effect on the outcome of this proposal, assuming a quorum is present. In the event the Wesbanco Stock Issuance Proposal is not approved by the requisite vote of Wesbanco shareholders, the merger will not be completed.

 

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Recommendation of Wesbanco’s Board of Directors. After careful consideration, the Wesbanco board of directors adopted the merger agreement and declared the merger agreement and the transactions contemplated thereby, including the issuance of shares of Wesbanco common stock in connection with the merger, to be advisable and in the best interests of Wesbanco and the shareholders of Wesbanco. See “The Merger — Wesbanco’s Reasons for the Merger and Recommendation of the Wesbanco Board of Directors” included elsewhere in this joint proxy statement/prospectus for a more detailed discussion of the Wesbanco board of directors’ recommendation.

The Wesbanco board of directors recommends a vote “FOR” approval of the Wesbanco Stock Issuance Proposal.

Wesbanco Adjournment Proposal

Proposal. Wesbanco is asking its shareholders to approve the Wesbanco Adjournment Proposal. If a quorum is present at the Wesbanco special meeting but there are insufficient votes to approve either the Wesbanco Merger Proposal or the Wesbanco Stock Issuance Proposal, such proposal will fail unless Wesbanco adjourns the Wesbanco special meeting in order to solicit additional proxies from Wesbanco’s shareholders. An adjournment under such circumstances will allow Wesbanco extra time to solicit additional proxies. Accordingly, Wesbanco is submitting to its shareholders a separate proposal, which we refer to as the Wesbanco Adjournment Proposal, to approve the adjournment of the Wesbanco special meeting, if necessary, to permit further solicitation of proxies if there are not sufficient votes at the time of the Wesbanco special meeting to approve both the Wesbanco Merger Proposal and the Wesbanco Stock Issuance Proposal. The proxy holders will vote properly submitted proxy cards “FOR” approval of the Wesbanco Adjournment Proposal, unless otherwise instructed on the proxy. If Wesbanco shareholders approve the Wesbanco Adjournment Proposal, Wesbanco is not required to give any further notice of the time and place of the adjourned Wesbanco meeting other than an announcement of the time and place at the Wesbanco special meeting.

If a quorum is not present at the Wesbanco special meeting, the meeting will be adjourned to a later time without a vote.

Vote Required. If a quorum exists, approval of the Wesbanco Adjournment Proposal requires the affirmative vote of at least a majority of the votes cast on the proposal. Abstentions, unvoted shares and broker non-votes will not have any effect on the outcome of this proposal, assuming a quorum is present.

Recommendation of Wesbanco’s Board of Directors. Wesbanco’s board of directors recommends that Wesbanco shareholders vote “FOR” approval of the Wesbanco Adjournment Proposal.

 

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THE OLD LINE BANCSHARES SPECIAL MEETING

General

This section contains information about the special stockholder meeting Old Line Bancshares has called to consider and vote on proposals to: (i) approve the merger, which we refer to in this joint proxy statement/prospectus as the Old Line Bancshares Merger Proposal; (ii) approve, in a non-binding advisory vote, the compensation payable to the named executive officers of Old Line Bancshares in connection with the merger, which we refer to in this joint proxy statement/prospectus as the Old Line Bancshares Merger-Related Compensation Proposal; and (iii) approve the adjournment of the Old Line Bancshares special meeting, if necessary, to solicit additional proxies if there are not sufficient votes to approve the Old Line Bancshares Merger Proposal at the time of the Old Line Bancshares special meeting, which we refer to in this joint proxy statement/prospectus as the Old Line Bancshares Adjournment Proposal. Old Line Bancshares is mailing this joint proxy statement/prospectus to its stockholders on or about September 26, 2019. Together with this joint proxy statement/prospectus, Old Line Bancshares is also sending to its stockholders a notice of the Old Line Bancshares special meeting and a form of proxy that Old Line Bancshares’ board of directors is soliciting for use at the Old Line Bancshares special meeting and at any adjournments of the special meeting.

A copy of the merger agreement is attached to this joint proxy statement/prospectus as Annex A and is incorporated by reference into this document in its entirety. You should read the entire merger agreement carefully.

Date, Time and Place of the Special Meeting

The Old Line Bancshares special meeting will be held at Old Line Bancshares’ office located at 1525 Pointer Ridge Place, Bowie, Maryland, on October 29, 2019, at 10:00 a.m. Eastern Time.

Matters to be Considered

At the Old Line Bancshares special meeting, Old Line Bancshares stockholders will be asked to consider and vote to approve the following matters:

 

   

Old Line Bancshares Merger Proposal;

 

   

Old Line Bancshares Merger-Related Compensation Proposal; and

 

   

Old Line Bancshares Adjournment Proposal.

Recommendation of Old Line Bancshares’ Board of Directors

The Old Line Bancshares board of directors recommends that you vote “FOR” approval of the Old Line Bancshares Merger Proposal, “FOR” approval of the Old Line Bancshares Merger-Related Compensation Proposal, and “FOR” approval of the Old Line Bancshares Adjournment Proposal. See “The Merger — Old Line Bancshares’ Reasons for the Merger and Recommendation of the Board of Directors of Old Line Bancshares” for a more detailed discussion of the Old Line Bancshares board of directors’ recommendation.

Record Date; Stock Entitled to Vote; Broker Voting; Quorum

Only holders of record of Old Line Bancshares common stock on September 23, 2019, which we refer to as the Old Line Bancshares record date, will be entitled to notice of and to vote at the Old Line Bancshares special meeting and any adjournments of such meeting. On September 19, 2019, the last date before the date of this joint proxy statement/prospectus for which it was practicable to obtain this information, there were 16,999,146 shares of Old Line Bancshares common stock outstanding and entitled to vote at the Old Line Bancshares special meeting. Owners of record of Old Line Bancshares common stock on the record date are entitled to one vote per share at the Old Line Bancshares special meeting for each share of common stock owned on the Old Line Bancshares record date.

 

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A quorum of Old Line Bancshares stockholders is necessary to have a valid meeting of Old Line Bancshares stockholders. The presence, in person or by proxy, of the holders entitled to cast at least a majority of all the votes entitled to be cast at the Old Line Bancshares special meeting is necessary to constitute a quorum at the Old Line Bancshares special meeting. Abstentions and broker non-votes count as present for establishing a quorum. An abstention occurs when a stockholder attends a meeting, either in person or by proxy, but abstains from voting on a matter.

If your shares of Old Line Bancshares common stock are held in the name of a bank, brokerage firm or other similar holder of record (referred to as “in street name”), you will receive instructions from the holder of record that you must follow for you to specify how your shares will be voted. In general, under the rules of the various national and regional securities exchanges, holders of record have the authority to vote shares for which their customers do not provide voting instructions on certain limited routine, uncontested matters, but not on non-routine proposals. In the case of non-routine items for which specific voting instructions have not been provided, the institution holding street name shares cannot vote those shares. When there is a routine proposal on a ballot or when the broker receives voting instructions on at least one non-routine proposal but not all such proposals, the non-routine proposals for which the broker has not been given voting instructions are often called “broker non-votes.” Since there are no routine items to be voted on at the Old Line Bancshares special meeting, broker record holders that do not receive voting instructions from the beneficial owners of such shares with respect to at least one proposal will not be able to return a proxy card with respect to such shares and these shares will be treated as unvoted shares. As a result, these shares will not be considered present at the Old Line Bancshares special meeting and will not count towards the satisfaction of a quorum. Therefore, the failure to vote such shares will have the effect of a vote AGAINST the Old Line Bancshares Merger Proposal but will have no effect on the outcome of the Old Line Bancshares Merger-Related Compensation Proposal or the Old Line Bancshares Adjournment Proposal, assuming a quorum is present. Conversely, if a broker receives voting instructions on one but not all of the proposals, those shares will be voted on that proposal, considered present at the Old Line Bancshares special meeting and will count towards the satisfaction of a quorum.

If your shares are held of record by a person or institution other than a broker, however, whether those shares can be voted without specific instructions from you will depend on your individual arrangement with that record holder, in particular, whether you have granted such record holder discretionary authority to vote your shares. In the absence of an arrangement with your record holder granting such discretionary authority, your record holder nominee will not have discretionary authority to vote your shares on any matter at the special meeting in the absence of specific voting instructions from you. In that case, your failure to provide instructions to your nominee record holder will have the effect of a vote AGAINST the Old Line Bancshares Merger Proposal but will have no effect on the outcome of the Old Line Bancshares Merger-Related Compensation Proposal or the Old Line Bancshares Adjournment Proposal, assuming a quorum is present, and your shares will not be considered present at the Old Line Bancshares special meeting and will not count towards the satisfaction of a quorum.

If you are the record owner of your shares of Old Line Bancshares common stock and do not vote your shares, your shares will be treated as unvoted shares and will not be counted toward a quorum at the Old Line Bancshares special meeting and will not be voted on any proposal.

Required Vote; Treatment of Abstentions, Broker Non-Votes and Failures to Vote

Old Line Bancshares Merger Proposal. If a quorum exists, approval of the Old Line Bancshares Merger Proposal requires the affirmative vote of at least a majority of the outstanding shares of Old Line Bancshares common stock entitled to vote thereon. Abstentions, failures to vote and broker non-votes will have the effect of a vote AGAINST this proposal, assuming a quorum is present.

Old Line Bancshares Merger-Related Compensation Proposal. If a quorum exists, approval of the Old Line Bancshares Merger-Related Compensation Proposal requires the affirmative vote of at least a majority of all

 

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votes cast on the proposal in person or by proxy assuming that a quorum is present. Abstentions, failures to vote and broker non-votes are not counted as votes cast and will not have any effect on the outcome of this proposal, assuming a quorum is present.

Old Line Bancshares Adjournment Proposal. If a quorum exists, approval of the Old Line Bancshares Adjournment Proposal requires the affirmative vote of at least a majority of all votes cast on the proposal in person or by proxy assuming that a quorum is present. Abstentions, failures to vote and broker non-votes are not counted as votes cast and will not have any effect on the outcome of this proposal, assuming a quorum is present.

Shares Held by Old Line Bancshares Officers and Directors and their Affiliates

On September 19, 2019, the last date before the date of this joint proxy statement/prospectus for which it was practicable to obtain this information, the directors and executive officers of Old Line Bancshares and their affiliates owned or controlled the vote of 1,018,802 shares of Old Line Bancshares common stock, or approximately 6.0% of the outstanding shares of Old Line Bancshares common stock. In addition, all of the executive officers and directors (and one former director) of Old Line Bancshares have entered into voting agreements with Wesbanco in which each such executive officer or director has agreed to vote his or her Old Line Bancshares shares in favor of approval of the merger agreement. See “Other Material Agreements Relating to the Merger — Voting Agreements.” In addition, as of September 19, 2019, 24,633 shares of Old Line Bancshares common stock were held by the Old Line Bancshares 401(k) Plan and will be voted by the trustees of that plan. Because two of the three trustees are Old Line Bancshares’ executive officers, we expect these shares to be voted “FOR” approval of all of the proposals presented at the Old Line Bancshares special meeting.

Voting of Proxies

Old Line Bancshares stockholders may submit the accompanying proxy by telephone, the Internet or by mail. We urge you to submit your proxy if you do not expect to attend the Old Line Bancshares special meeting in person or if you wish to have your Old Line Bancshares shares voted by proxy even if you attend the Old Line Bancshares special meeting. All shares of Old Line Bancshares common stock represented at the Old Line Bancshares special meeting by properly executed proxies received prior to or at the Old Line Bancshares special meeting, and not revoked, will be voted at the Old Line Bancshares special meeting in accordance with the instructions on the proxies. If you properly execute a proxy but include no voting instructions, your shares will be voted “FOR” approval of the: (i) Old Line Bancshares Merger Proposal; (ii) Old Line Bancshares Merger-Related Compensation Proposal; and (iii) Old Line Bancshares Adjournment Proposal.

If your shares are held in “street name” (i.e., in the name of a broker, bank or other record holder), you must direct the record holder how to vote your shares in connection with the merger (unless you have granted your non-broker record holder discretionary authority to vote your shares without instructions from you). Your broker, bank, or other nominee will send you directions explaining how you can direct the record holder of your shares to vote.

The Old Line Bancshares board of directors does not know of any matters, other than those described in the notice of the Old Line Bancshares special meeting, that are to come before the special meeting. If any other matters are properly presented at the special meeting for action, the persons named in the enclosed form of proxy will have the authority to vote on those matters in their discretion.

Revocation of Proxies

If you give a proxy, you have the right to revoke it at any time before it is voted. You may revoke your proxy by (i) filing a written notice of revocation with the Secretary of Old Line Bancshares that is received prior to the vote at the Old Line Bancshares special meeting and bears a later date than the proxy, (ii) duly executing a

 

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later-dated proxy card relating to the same Old Line Bancshares shares and delivering it to the Secretary of Old Line Bancshares before the vote at the Old Line Bancshares special meeting, (iii) submitting a later dated proxy by telephone or the Internet, before the vote at the Old Line Bancshares special meeting, or (iv) attending the Old Line Bancshares special meeting and voting in person. Your attendance at the Old Line Bancshares special meeting will not, in and of itself, revoke your proxy. Any written notice of revocation or subsequent dated proxy should be sent to Old Line Bancshares, Inc. 1525 Pointer Ridge Place, Bowie, Maryland 20716, Attention: Secretary, or hand delivered to the Old Line Bancshares Secretary at that address. For a notice of revocation or later proxy to be valid, it must actually be received by Old Line Bancshares prior to the vote of the Old Line Bancshares stockholders.

If your Old Line Bancshares shares are held by a broker, bank or other nominee in street name and you wish to change the instructions you have given your broker, bank or other nominee about how to vote your Old Line Bancshares shares, or you wish to attend the Old Line Bancshares special meeting and vote in person, you must follow the instructions provided by your broker, bank or other nominee.

Expenses of Solicitation of Proxies

Old Line Bancshares has engaged a professional proxy solicitation firm, D.F. King & Co., Inc. (“King”), to assist in soliciting proxies for use at the Old Line Bancshares special meeting. Under the terms of the merger agreement, Wesbanco has agreed to pay or reimburse the fees and expenses of King. King will be paid a fee of $10,500 plus reimbursement for out-of-pocket expenses. Other than with respect to King, Old Line Bancshares will bear the entire cost of soliciting proxies from Old Line Bancshares stockholders. In addition to solicitation by King and by use of the mail, proxies may be solicited by directors, officers and employees of Old Line Bancshares in person or by telephone, facsimile, email or any other means of communication. These directors, officers and employees will not be additionally compensated but may be reimbursed for out-of-pocket expenses they incur in connection with the solicitation. Arrangements will also be made with brokerage houses, custodians, nominees and fiduciaries for the forwarding of solicitation materials to the beneficial owners of Old Line Bancshares common stock held of record by such persons. Old Line Bancshares may reimburse these custodians, nominees and fiduciaries for reasonable out-of-pocket expenses they incur.

Attending the Old Line Bancshares Special Meeting

All holders of Old Line Bancshares common stock, including holders of record and stockholders who hold their shares through banks, brokers or other nominees, are invited to attend the Old Line Bancshares special meeting. Stockholders of record can vote in person at the Old Line Bancshares special meeting. If you are not a stockholder of record, you must obtain a proxy executed in your favor from the record holder of your shares, such as a bank, broker or other nominee, to be able to vote in person at the Old Line Bancshares special meeting. If you plan to attend the Old Line Bancshares special meeting, you must hold your shares in your own name or have a letter from the record holder of your shares confirming your ownership. In addition, you must bring a form of personal photo identification with you in order to be admitted. Old Line Bancshares reserves the right to refuse admittance to anyone without proper proof of share ownership and without proper photo identification.

DO NOT SEND YOUR OLD LINE BANCSHARES STOCK CERTIFICATES WITH YOUR PROXY CARD.

 

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OLD LINE BANCSHARES PROPOSALS

Old Line Bancshares Merger Proposal

Proposal. Old Line Bancshares is asking its stockholders to approve the Old Line Bancshares Merger Proposal. Pursuant to this proposal, Old Line Bancshares stockholders are being asked to approve the merger pursuant to the merger agreement. For a detailed discussion of the merger, including the terms and conditions of the merger agreement, see “The Merger.”

Holders of Old Line Bancshares common stock should read this joint proxy statement/prospectus carefully and in its entirety, including the annexes, for more detailed information concerning the merger agreement and the merger. A copy of the merger agreement is attached to this joint proxy statement/prospectus as Annex A.

Vote Required. If a quorum exists, approval of the Old Line Bancshares Merger Proposal requires the affirmative vote of at least a majority of the outstanding shares of Old Line Bancshares common stock entitled to vote thereon. Abstentions, failures to vote and broker non-votes will have the effect of a vote AGAINST this proposal, assuming a quorum is present. In the event the Old Line Bancshares Merger Proposal is not approved by the requisite vote of Old Line Bancshares stockholders, the merger will not be completed.

Recommendation of Old Line Bancshares’ Board of Directors. After careful consideration, the Old Line Bancshares board of directors approved the merger agreement and the transactions contemplated thereby, up to and including the merger, declared that the merger agreement and the merger are advisable on substantially the terms and conditions set forth in the merger agreement, and declared that the merger and Old Line Bancshares’ entry into the merger agreement and consummation of the merger are in the best interests of Old Line Bancshares and the stockholders of Old Line Bancshares. See “The Merger — Old Line Bancshares’ Reasons for the Merger and Recommendation of the Board of Directors of Old Line Bancshares” included elsewhere in this joint proxy statement/prospectus for a more detailed discussion of the Old Line Bancshares board of directors’ recommendation.

The Old Line Bancshares board of directors recommends a vote “FOR” approval of the Old Line Bancshares Merger Proposal.

Old Line Bancshares Merger-Related Compensation Proposal

Proposal. In accordance with the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, Section 14A of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and Rule 14a-21(c) promulgated thereunder, Old Line Bancshares is required to submit the Old Line Bancshares Merger-Related Compensation Proposal to its stockholders. The Old Line Bancshares Merger-Related Compensation Proposal gives Old Line Bancshares stockholders the opportunity to vote, on an advisory (non-binding) basis, on the compensation that may be paid or become payable to Old Line Bancshares’ named executive officers in connection with the merger. This compensation is summarized in the table entitled “Golden Parachute Compensation” that begins on page 95, including the associated narrative disclosure.

The Old Line Bancshares board of directors recommends that Old Line Bancshares’ stockholders approve the following resolution:

“RESOLVED, that the compensation that may be paid or become payable to the Old Line Bancshares named executive officers in connection with the merger, as disclosed in the table entitled “Golden Parachute Compensation” that begins on page 95 of the joint proxy statement/prospectus for the merger, together with the accompanying footnotes and narrative discussion relating to the named executive officers’ golden parachute compensation and the agreements or understandings pursuant to which such compensation may be paid or become payable, as set forth in the sections of the joint proxy statement/prospectus for the merger titled “The Merger — Interests of Certain Persons in the Merger” and “The Merger — Merger-Related Compensation for Old Line Bancshares Named Executive Officers,” is hereby APPROVED.”

 

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The vote on this Old Line Bancshares Merger-Related Compensation Proposal by Old Line Bancshares stockholders is a vote separate and apart from the vote on the Old Line Bancshares Merger Proposal. Accordingly, Old Line Bancshares stockholders may vote to approve the Old Line Bancshares Merger-Related Compensation Proposal and not to approve the Old Line Bancshares Merger Proposal, and vice versa. Because the vote is advisory in nature only, it will not be binding on Wesbanco, Wesbanco Bank, Old Line Bancshares or Old Line Bank. Accordingly, as the compensation to be paid in connection with the merger is contractual with the executives, regardless of the outcome of this advisory vote, that compensation will be paid, subject only to the satisfaction of the applicable conditions to payment and the merger being completed.

The named executive officers of Old Line Bancshares for which this advisory vote is being taken are James W. Cornelsen, Jack Welborn, Mark A. Semanie, M. John Miller and Elise M. Adams (f/k/a Elise M. Hubbard). This vote is not intended to address any specific item of compensation, but rather the overall compensation that may become payable to Old Line Bancshares’ named executive officers in connection with the completion of the merger. Such compensation will not be payable if the merger is not completed.

Vote Required. If a quorum exists, approval of the Old Line Bancshares Merger-Related Compensation Proposal requires the affirmative vote of at least a majority of all votes cast on the proposal. Abstentions, failures to vote and broker non-votes will not have any effect on the outcome of this proposal, assuming a quorum is present.

Recommendation of Old Line Bancshares Board of Directors. Old Line Bancshares’ board of directors recommends that Old Line Bancshares stockholders vote “FOR approval of the Old Line Bancshares Merger-Related Compensation Proposal.

Old Line Bancshares Adjournment Proposal

Proposal. Old Line Bancshares is asking its stockholders to approve the Old Line Bancshares Adjournment Proposal. If a quorum is present at the Old Line Bancshares special meeting but there are insufficient votes to approve the Old Line Bancshares Merger Proposal, that proposal will fail unless Old Line Bancshares adjourns the Old Line Bancshares special meeting in order to solicit additional proxies from Old Line Bancshares’ stockholders. An adjournment under such circumstances will allow Old Line Bancshares extra time to solicit additional proxies. Accordingly, Old Line Bancshares is submitting to its stockholders a separate proposal, which we refer to as the Old Line Bancshares Adjournment Proposal, to approve the adjournment of the Old Line Bancshares special meeting, if necessary, to permit further solicitation of proxies if there are not sufficient votes at the time of the Old Line Bancshares special meeting to approve the Old Line Bancshares Merger Proposal. The proxy holders will vote properly submitted proxy cards “FOR” approval of the Old Line Bancshares Adjournment Proposal, unless otherwise instructed on the proxy. If Old Line Bancshares stockholders approve the Old Line Bancshares Adjournment Proposal, Old Line Bancshares is not required to give any further notice of the time and place of the adjourned Old Line Bancshares meeting other than an announcement of the time and place at the Old Line Bancshares special meeting.

If a quorum is not present at the meeting, the meeting will be adjourned to a later time without a vote.

Vote Required. If a quorum exists, approval of the Old Line Bancshares Adjournment Proposal requires the affirmative vote of at least a majority of all votes cast on the proposal. Abstentions, failures to vote and broker non-votes will not have any effect on the outcome of this proposal, assuming a quorum is present.

Recommendation of Old Line Bancshares Board of Directors. Old Line Bancshares’ board of directors recommends that Old Line Bancshares stockholders vote FOR approval of the Old Line Bancshares Adjournment Proposal.

 

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THE MERGER

The following summarizes material terms of the merger and provisions of the merger agreement, a copy of which is attached to this joint proxy statement/prospectus as Annex A and which we incorporate by reference into this document. This summary does not purport to be complete and may not contain all of the information about the merger and merger agreement that is important to you. We encourage you to read carefully the merger agreement in its entirety, as the rights and obligations of the parties are governed by the express terms of the merger agreement and not by this summary or any other information contained in this joint proxy statement/prospectus. Factual disclosures about Wesbanco and Old Line Bancshares contained in this joint proxy statement/prospectus or in the companies’ public reports filed with the SEC may supplement, update or modify the factual disclosures about the companies contained in the merger agreement.

This description of the merger agreement in this joint proxy statement/prospectus has been included to provide you with information regarding the merger agreement’s terms. The merger agreement contains representations, warranties, covenants and agreements made by Wesbanco and Old Line Bancshares as of specific dates that were made for purposes of that contract between the parties and are subject to qualifications and limitations, including by information in disclosure schedules that the parties exchanged in connection with the execution of the merger agreement. In addition, certain representations and warranties may be subject to contractual standards of materiality different from those generally applicable to shareholders and stockholders, or may have been used for the purpose of allocating risk between the parties rather than establishing matters as facts. Moreover, information concerning the subject matter of the representations and warranties, which do not purport to be accurate as of the date of this joint proxy statement/prospectus, may have changed since the date of the merger agreement. Shareholders and stockholders are not third-party beneficiaries under the merger agreement.

Terms of the Merger

Wesbanco’s and Old Line Bancshares’ boards of directors have approved the merger agreement. The merger agreement provides that Old Line Bancshares will merge with and into Wesbanco, with Wesbanco being the surviving corporation. Immediately following the merger, Old Line Bank, a trust company with commercial banking powers chartered under the laws of the State of Maryland and wholly-owned subsidiary of Old Line Bancshares, will merge with and into Wesbanco Bank, a West Virginia banking corporation that is Wesbanco’s main operating subsidiary.

Old Line Bancshares’ Stockholders Will Receive Wesbanco Common Stock in the Merger

If the merger is completed, for each share of Old Line Bancshares common stock that you own you will receive 0.7844 of a share of Wesbanco common stock, subject to adjustment as described in the merger agreement. We refer to the 0.7844 of a share of Wesbanco common stock as the “merger consideration” or the “exchange ratio.” The merger agreement provides that the exchange ratio will be adjusted if Wesbanco changes the number of shares of Wesbanco common stock issued and outstanding prior to the effective time of the merger as a result of a reorganization, recapitalization, reclassification, stock dividend, stock split, reverse stock split or other like changes in Wesbanco’s capitalization.

Wesbanco Shareholders Will Not Receive Any Cash, Stock or Other Consideration in the Merger

If the merger is completed, Wesbanco shareholders will continue to own the same number of shares of Wesbanco common stock that they owned before the merger and will not receive any cash, stock or other merger consideration.

Treatment of Old Line Bancshares Equity-Based Awards

Stock Options. At the effective time of the merger, each option granted by Old Line Bancshares to purchase shares of Old Line Bancshares common stock that is outstanding and unexercised immediately prior to the

 

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effective time, whether vested or unvested, shall without any further action on the part of the holder thereof, be assumed by Wesbanco and converted into an option to purchase from Wesbanco, on the same terms and conditions as were applicable under such Old Line Bancshares options, a number of shares of Wesbanco common stock (rounded down to the nearest whole share) determined by multiplying (x) the number of shares of Old Line Bancshares common stock subject to such Old Line Bancshares stock option immediately prior to the effective time by (y) the exchange ratio. The exercise price per share (rounded up to the nearest whole cent) of each Wesbanco stock option issued for the Old Line Bancshares stock option shall equal the quotient obtained by dividing (i) the per share exercise price for each share of Old Line Bancshares common stock subject to such Old Line Bancshares stock option by (ii) the exchange ratio.

Restricted Stock. Immediately prior to the effective time of the merger, each outstanding restricted share of Old Line Bancshares common stock will fully vest and be cancelled and converted automatically into the right to receive the merger consideration, less applicable tax withholdings.

Effects of the Merger

The merger will become effective as set forth in the articles of merger that will be filed with the West Virginia Secretary of State and the articles of merger that will be filed with the Maryland State Department of Assessments and Taxation. At that time, the separate existence of Old Line Bancshares will cease and Wesbanco will be the surviving corporation. The assets, liabilities and capital of Old Line Bancshares will be merged with those of Wesbanco and those assets, liabilities and capital will then constitute part of the assets, liabilities and capital of Wesbanco. Wesbanco will continue to operate under its articles of incorporation and bylaws effective as of immediately prior to the merger, and the officers and directors of Wesbanco will continue as the officers and directors of the surviving corporation, except that two current Old Line Bancshares directors, anticipated to be James W. Cornelsen and Gregory S. Proctor, Jr., will be appointed to the board of directors of Wesbanco and James W. Cornelsen will become an officer of Wesbanco and Wesbanco Bank effective as of the effective time of the merger. See “The Merger — Interests of Certain Persons in the Merger.” The tenure of the directors and officers of Wesbanco immediately prior to the merger will be unaffected by the merger.

At the effective time of the merger, each share of Old Line Bancshares common stock issued and outstanding immediately prior to the time the merger becomes effective will be converted automatically into the right to receive the merger consideration. Shares of Old Line Bancshares common stock beneficially owned by Wesbanco or any subsidiary of Wesbanco or Old Line Bancshares (other than in a fiduciary capacity by them for others) will not be exchanged for the merger consideration in the merger. Instead, these shares will be canceled and will cease to exist.

After the merger becomes effective, each certificate evidencing shares of Old Line Bancshares common stock will be deemed to evidence only the right to receive the merger consideration and, under certain circumstances, dividends on shares of Old Line Bancshares common stock with a record date prior to the completion of the merger and dividends on shares of Wesbanco common stock with a record date after the completion of the merger. The holder of an unexchanged certificate will not receive any dividend or other distribution payable by Wesbanco until the certificate has been exchanged.

Exchange and Payment Procedures

At least one business day prior to the effective time of the merger, Wesbanco will deposit with Computershare Investor Services, LLC, the Exchange Agent, (i) book entry shares representing the aggregate number of shares of Wesbanco common stock issuable pursuant to the merger agreement in exchange for all of the shares of Old Line Bancshares common stock outstanding immediately prior to the effective time of the merger and (ii) immediately available funds equal to the aggregate amount of cash payable by Wesbanco pursuant to the merger agreement in lieu of fractional shares of Wesbanco common stock.

 

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As soon as practicable after the effective time of the merger and in no event more than seven business days thereafter, Wesbanco will mail or will cause to be mailed to each former holder of record of Old Line Bancshares common stock a letter of transmittal containing instructions for use in surrendering Old Line Bancshares stock certificates in exchange for the merger consideration, cash in lieu of fractional shares, if any, and any unpaid dividends or distributions that a holder of record of Old Line Bancshares common stock would be entitled to receive under the terms of the merger agreement. After the effective time of the merger, each holder of an Old Line Bancshares stock certificate who has surrendered that stock certificate or who has provided customary affidavits and indemnification regarding the loss or destruction of that stock certificate, together with duly executed transmittal materials, to the Exchange Agent, will be entitled to receive the merger consideration for each share of Old Line Bancshares common stock and, if applicable, any cash in lieu of fractional shares of Wesbanco common stock and any unpaid dividends or distributions. Wesbanco will have no obligation to deliver the merger consideration, any cash in lieu of fractional shares or any unpaid dividends or distributions to any former Old Line Bancshares stockholder until the Old Line Bancshares stockholder surrenders his, her or its Old Line Bancshares stock certificates.

If an Old Line Bancshares stock certificate has been lost, stolen or destroyed, the Exchange Agent will issue the merger consideration properly payable under the merger agreement upon receipt of an affidavit of that fact by the stockholder. Wesbanco may require the stockholder to post a bond in a reasonable amount as an indemnity against any claim that may be made against Wesbanco with respect to the stockholder’s lost, stolen or destroyed Old Line Bancshares stock certificate.

Old Line Bancshares stock certificates may be exchanged for the merger consideration and cash in lieu of fractional shares of Wesbanco common stock through the Exchange Agent for approximately six months after the completion of the merger. At the end of that period, the Exchange Agent will return any Wesbanco shares and cash to Wesbanco. Any holders of Old Line Bancshares common stock certificates who have not exchanged their certificates for the merger consideration before that date will then be entitled to look only to Wesbanco or its duly authorized stockholder locating agent or asset reunification service, which may be an affiliate of the Exchange Agent, to seek payment of the merger consideration, any cash in lieu of fractional shares of Wesbanco common stock and any unpaid dividends or distributions payable to the holder, in each case without interest. Neither Old Line Bancshares nor Wesbanco will be liable to any former holder of Old Line Bancshares common stock for any merger consideration that is paid to a public official or State Treasury in accordance with any applicable abandoned property, escheat or similar laws.

Following the effective time of the merger, there will be no transfers on the stock transfer books of Old Line Bancshares other than to settle transfers of Old Line Bancshares common stock that occurred prior to the effective time of the merger.

Benefit Agreements

401(k) Plan. Pursuant to the terms of the merger agreement, Wesbanco has the option to require Old Line Bancshares to terminate its 401(k) Plan immediately prior to and conditioned upon the occurrence of the effective time of the merger, or to merge the Old Line Bancshares 401(k) Plan with and into the Wesbanco 401(k) Plan after the effective time of the merger. Until the Old Line Bancshares 401(k) Plan is terminated or merged, Old Line Bancshares will continue to make contributions to the Old Line Bancshares 401(k) Plan in accordance with applicable accruals and in the ordinary course of business. If Wesbanco elects to terminate the Old Line Bancshares 401(k) Plan, then as soon as practicable following the effective time of the merger, at each employee’s option, either the account balances will be distributed to participants or transferred to an eligible tax-qualified retirement plan or individual retirement account as a participant or beneficiary may direct. Wesbanco has agreed to permit Old Line Bancshares employees who become Wesbanco employees following completion of the merger to rollover their account balances to the Wesbanco Employee Stock Ownership and 401(k) Plan, which is a qualified non-contributory employee stock ownership plan with a deferred savings plan feature under Section 401(k) of the Code.

 

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Severance, Benefits and Outplacement Services for Terminated Old Line Bancshares Employees. Employees of Old Line Bancshares who are not offered the opportunity to continue as employees of, or whose position is eliminated or who is not offered comparable employment with, Wesbanco or Wesbanco Bank after the merger, or who are terminated without cause within six months after the merger, will be entitled to receive from Wesbanco or Wesbanco Bank:

 

   

severance compensation based on the number of years of service with Old Line Bancshares and the employee’s weekly rate of pay, subject to certain minimum and maximum amounts;

 

   

accrued benefits, including paid time off, through the date of separation;

 

   

any rights to continuation of medical coverage to the extent such rights are required under applicable federal or state law and subject to the employee’s compliance with all applicable requirements for such continuation coverage, including payment of all premiums or other expenses related to such coverage; and

 

   

outplacement services with a cost of up to $2,500 for each such employee.

Employees of Old Line Bancshares who are party to any employment agreement, severance agreement, retention agreement, change in control agreement, or any other agreement that provides for any payment that would be triggered by the merger or the bank merger shall not receive the severance compensation discussed above, but will instead receive the payment provided for in such agreement unless such employee waives and relinquishes their right to any payments under any such agreement, in which case such employee will receive the severance compensation discussed above.

Benefits for Continuing Employees. From and after the effective time of the merger, the employees of Old Line Bancshares and its subsidiaries who remain with Wesbanco or any Wesbanco subsidiary (“continuing employees”) will be provided with employee benefits that are substantially similar to employee benefits provided to other comparable employees under Wesbanco’s benefit plans (excluding for this purpose any equity-based incentive plans). Additionally, each continuing employee will be credited with years of service with Old Line Bancshares and/or its subsidiaries for purposes of eligibility, vesting, entitlements to benefits and levels of benefits (but not for benefit accrual purposes under any defined benefit plan or agreement) in the employee benefit plans of Wesbanco, and will retain the paid time-off accrual earned under Old Line Bancshares’ paid time-off policy as of the effective time of the merger so that such continuing employee will receive under Wesbanco’s vacation policy a benefit no less than what such continuing employees had earned under Old Line Bancshares’ paid time-off policy as of the effective time of the merger; provided, however, that any future accrual of benefits will be in accordance with Wesbanco’s vacation policy, subject to carryover limitations applicable to such future accruals. In addition, continuing employees who become eligible to participate in Wesbanco’s compensation and benefit plans following the effective time of the merger (i) will receive full credit under such plans for any deductibles, co-payments and out-of-pocket expenses incurred by such employees and their respective dependents under the applicable Old Line Bancshares compensation and benefit plans during the portion of the applicable plan year prior to such participation, and (ii) will not be subject to any exclusion or penalty for pre-existing conditions that were covered under Old Line Bancshares compensation and benefit plans immediately prior to the effective time of the merger, or to any waiting period relating to such coverage.

Retention Bonus Pool. Wesbanco will provide a retention bonus pool for the purposes of retaining the services of employees of Old Line Bancshares and its subsidiaries who are key employees through the end of the month during which the conversion of the data processing system of Old Line Bancshares occurs. Old Line Bancshares’ Chief Executive Officer will determine, subject to approval by Wesbanco’s President and Chief Executive Officer, the Old Line Bancshares employees eligible to receive retention awards from the retention bonus pool and any criteria for payment, and will determine the final allocation of payments from the retention bonus pool.

Retention Restricted Stock Agreements. Wesbanco has entered into agreements with certain Old Line Bancshares key employees, including some executive officers, pursuant to which Wesbanco will grant,

 

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immediately after and subject to the occurrence of the effective time, restricted shares of Wesbanco common stock that will cliff-vest on the second anniversary of the grant date if such key employee remains employed by Wesbanco or Wesbanco Bank at that time. Grants under these retention restricted stock agreements will be made and become effective only upon the applicable key employees becoming employees of Wesbanco or Wesbanco Bank at or after the effective time. No grants under these retention restricted stock agreements will be made if the merger does not occur.

Other Benefit Arrangements. As of the effective time of the merger, Wesbanco will honor and assume the separation agreements, employment agreements, non-competition agreements, consulting agreements and change in control agreements in effect with the senior officers of Old Line Bancshares and Old Line Bank at the effective time of the merger, as such may be modified by agreements with Wesbanco. See “Interests of Certain Persons in the Merger.”

Background of the Merger

Old Line Bancshares regularly considers strategic merger and acquisition opportunities to the extent such opportunities arise and the institutions in question have businesses and cultures complimentary to that of Old Line Bancshares and Old Line Bank.

Further, as part of the ongoing oversight and management of Old Line Bancshares, Old Line Bancshares’ board of directors and management regularly review and assess Old Line Bancshares’ long-term strategic goals and opportunities, performance, and prospects in light of competitive and other relevant developments, all with the goal of enhancing stockholder value. These reviews have included periodic discussions regarding potential merger and acquisition transactions that could further their strategic objectives and the potential benefits and risks of any such transactions.

On April 22, 2010, Old Line Bancshares appointed a special committee of its board of directors (later reconstituted as a joint committee of Old Line Bancshares and Old Line Bank) to review potential strategic opportunities in general (the “Strategic Opportunities Committee”), which at that time included consideration of the acquisition of Maryland Bankcorp or Maryland Bank and Trust Company, N.A., which was consummated in April 2011. Since its formation, the Strategic Opportunities Committee has considered potential mergers and acquisitions on an ongoing basis, and Old Line Bancshares and Old Line Bank have consummated five acquisitions of bank holding companies and their subsidiary banks. The members of the Strategic Opportunities Committee during the time period covering the board of directors and committee meetings discussed below were Craig E. Clark (Chairperson), Gregory S. Proctor, Jr., James F. Dent, James W. Cornelsen, Eric D. Hovde, and John M. Suit, II.

As part of his ongoing responsibilities as President and Chief Executive Officer of Old Line Bancshares, Mr. Cornelsen has maintained relationships with executives of financial institutions viewed as strategically desirable partners either as potential acquisition targets or potential acquirors of Old Line Bancshares and Old Line Bank. This has included meeting with the chief executive officers of both potential acquisition targets and potential acquirors of Old Line Bancshares and Old Line Bank on a regular and ongoing basis.

In keeping with his responsibilities, Mr. Cornelsen and Mr. Clossin met on May 27, 2015. At that time, Mr. Clossin expressed an interest in Old Line Bancshares’ market area with respect to possible future growth, but indicated that he needed to learn more. Mr. Cornelsen and Mr. Clossin kept in touch over the next several years.

In mid-2018, Mr. Cornelsen learned that Wesbanco may again have an interest in acquisitions within Old Line Bank’s market area. Messrs. Clossin and Cornelsen and a representative of KBW had a dinner meeting on October 1, 2018, during which they discussed the possibility of a merger between Wesbanco and Old Line Bancshares. At that meeting, Mr. Clossin expressed that Wesbanco’s timetable would be late 2019.

 

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On November 19, 2018, Old Line Bancshares’ board of directors held an offsite strategic planning session, which it had done on a regular basis over the years. At this meeting, among other things, Mr. Cornelsen updated the board about the early-stage interest from Wesbanco regarding an acquisition of Old Line Bancshares and the status of his discussions with executives of other financial institutions that could be either acquisition targets for Old Line Bancshares or potential acquirers of Old Line Bancshares. In addition, KBW reviewed Old Line Bancshares’ performance, discussed the state of the market for financial institution mergers and acquisitions, and discussed possible strategic alternatives for Old Line Bancshares, including potential acquisition targets and potential buyers. KBW and the board of directors also discussed how the banking environment is changing and the need for Old Line Bank to successfully evolve with the expected changing environment. At the conclusion of the meeting Mr. Cornelsen and KBW met with Mr. Hovde to further discuss the market environment and Wesbanco’s interest.

In December 2018, Mr. Clossin contacted Mr. Cornelsen and stated that Wesbanco might be interested in engaging in potential merger discussions in mid-2019. On February 6, 2019, Messrs. Clossin and Cornelsen had a lunch meeting where they updated each other on the operations and status of their banks and discussed the industry and marketplace generally as well as the potential advantages of a theoretical merger of the two companies. They did not address potential transaction terms during this meeting.

Mr. Clossin and Wesbanco’s counsel, James C. Gardill of Phillips, Gardill, Kaiser & Altmeyer, PLLC, then also Chairman of the Board, began discussions with representatives of Davidson in early February 2019, and negotiated the terms of an engagement agreement which they presented to the Executive Committee of Wesbanco for approval at its meeting on February 27, 2019, at which meeting the engagement of Davidson was approved. In addition, Mr. Clossin presented an overview of the strategic opportunities of a transaction with Old Line Bancshares and Mr. Clossin was authorized to continue discussion with Old Line Bancshares.

In mid-February 2019, Mr. Clossin again contacted Mr. Cornelsen and indicated that he would like to start substantive discussions regarding Wesbanco’s potential acquisition of Old Line Bancshares. Mr. Cornelsen subsequently contacted Mr. Clark, who is Chairman of the Board of Directors as well as the Chairperson of the Strategic Opportunities Committee, Gregory S. Proctor, Jr., Vice Chairman of the board of directors and a member of the Strategic Opportunities Committee, and Frank C. Bonaventure of Baker, Donelson, Bearman, Caldwell & Berkowitz, PC, Old Line Bancshares’ outside counsel, and informed them of Wesbanco’s interest, and they suggested convening a meeting of the Strategic Opportunities Committee.

Such meeting of the Strategic Opportunities Committee was held on February 27, 2019, and representatives of KBW also attended this meeting. During this meeting, KBW discussed with the committee the current market environment and earnings outlook for banks, Old Line Bancshares’ recent performance, the current merger and acquisition environment for banks, and the merger and acquisition environment for Old Line Bancshares. KBW also reviewed with the Strategic Opportunities Committee publicly-available information regarding Wesbanco, including its business and certain financial metrics, and publicly-available information regarding potential buyers of Old Line Bancshares.

After considering the information presented at the meeting, the Strategic Opportunities Committee approved the engagement of KBW as Old Line Bancshares’ financial advisor and directed that management, with KBW’s assistance, conduct further merger discussions. Thereafter, Mr. Cornelsen contacted Mr. Clossin and informed him that Old Line Bancshares was authorized to continue discussions with Wesbanco regarding a strategic combination of the two companies.

On February 28, 2019, Messrs. Cornelsen, Clark, and Proctor traveled to Wesbanco’s headquarters in Wheeling, West Virginia, to meet with the Wesbanco management team to learn more about Wesbanco.

On March 15, 2019, Old Line Bancshares and Wesbanco entered into a mutual nondisclosure agreement (the “NDA”) to exchange non-public information with respect to a potential transaction. Following the execution

 

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of the NDA, Old Line Bancshares provided certain preliminary non-public information to Wesbanco for the purposes of Wesbanco providing Old Line Bancshares with a non-binding indication of interest letter regarding a potential transaction.

On April 4, 2019, Mr. Clossin, on behalf of Wesbanco, sent Mr. Cornelsen an initial non-binding indication of interest with respect to Wesbanco’s acquisition of all of the issued and outstanding shares of common stock of Old Line Bancshares. In the indication of interest, Wesbanco proposed to acquire all of the outstanding shares of Old Line Bancshares common stock in exchange for shares of Wesbanco common stock at a valuation of between $30.50 and $31.50 per share, based on a fixed exchange ratio of between 0.7654 and 0.7905. Wesbanco also proposed to cash out Old Line Bancshares stock options at closing, that Messrs. Cornelsen and Proctor would join the combined board of directors of Wesbanco and Wesbanco Bank, and the formation of an advisory board that the other Old Line Bancshares directors would be invited to join, as well as a 60-day exclusivity period. The indication of interest also proposed that Wesbanco would retain Mr. Cornelsen as Chairman of the Mid-Atlantic Region Advisory Board and offer him a two-year employment agreement.

Between April 4 and April 11, 2019, Old Line Bancshares and Wesbanco, with the assistance of their respective legal counsel and financial advisers, negotiated the terms of the indication of interest.

The Strategic Opportunities Committee held a meeting on April 10, 2019, to discuss Wesbanco’s proposed indication of interest. At this meeting, KBW updated the Strategic Opportunities Committee regarding the current market environment and earnings outlook for banks, the current merger and acquisition environment for banks, and Old Line Bancshares’ recent performance. KBW also reviewed the indication of interest with the Strategic Opportunities Committee, and discussed information regarding the financial terms of the indication of interest. Following discussion of the information discussed and the terms of the indication of interest, the committee authorized continued discussions with Wesbanco, approved the 60-day exclusivity period, and authorized Old Line Bancshares’ entry into an indication of interest with Wesbanco. The parties executed a final indication of interest on April 11, 2019; the material terms of the final indication of interest were consistent with those set forth in the initial indication of interest dated April 4, except that in the executed indication of interest, Wesbanco agreed to waive any requirements under Mr. Cornelsen’s agreements with Old Line Bank of employment termination as a condition to his receiving any change in control or non-competition payments that he would otherwise be entitled to thereunder.

On April 15, 2019, Old Line Bancshares opened a virtual data room to Wesbanco to provide additional detailed due diligence information; it also granted Wesbanco electronic access to Old Line Bancshares’ credit files to allow Wesbanco to conduct detailed loan due diligence. Throughout May 2019, management of Wesbanco and Old Line Bancshares had a number of due diligence calls. Further, Wesbanco management and Old Line Bancshares management participated in detailed in-person due diligence conversations in Baltimore, Maryland on May 28, 2019.

Meanwhile, the Wesbanco board of directors was informed as to a potential transaction with Old Line Bancshares at its regular meeting on April 18, 2019. The board was provided with a detailed analysis of the transaction prepared by Davidson and authorized continued discussions with Old Line Bancshares and ratified the submission of the non-binding indication of interest by Mr. Clossin.

On June 5, 2019, Wesbanco provided Old Line Bancshares access to an online data room that included detailed reverse due diligence materials.

On June 6, 2019, K&L Gates LLP provided to Baker, Donelson, Bearman, Caldwell & Berkowitz, PC, the first draft of a definitive merger agreement. Included within the first draft of the definitive merger agreement was a stated exchange ratio of 0.7780 shares of Wesbanco common stock for each share of Old Line Bancshares common stock, which represented approximately the midpoint of the range provided by Wesbanco in the indication of interest.

 

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Significant discussion of the assumptions regarding the potential transaction occurred between June 6, 2019 and June 21, 2019. On June 21, 2019, Wesbanco, through Davidson, provided an updated exchange ratio of 0.7844 shares of Wesbanco common stock for each outstanding share of Old Line Bancshares common stock based upon its updated analysis of the impacts of the proposed transaction. Due diligence on both parties continued during this time.

Between June 21, and July 2, 2019, Wesbanco and Old Line Bancshares continued with their due diligence efforts and, with the assistance of their respective legal counsel and financial advisers, negotiated the final terms of the merger agreement and the ancillary documents appearing as exhibits to the merger agreement.

On June 25, 2019, Mr. Cornelsen and KBW updated director Eric Hovde on the terms of the transaction. On the call, Mr. Hovde expressed concern about the exchange ratio and the process undertaken in the proposed merger. Mr. Hovde concluded, however, by stating that he would not block the merger from going forward. Following the call, KBW spoke to Mr. Clossin stating that the exchange ratio needed to be higher. Mr. Clossin responded that Wesbanco would not increase the exchange ratio.

On June 26, 2019, the Strategic Opportunities Committee convened to review the updated exchange ratio provided by Wesbanco. At this meeting, KBW provided an updated market overview, including a discussion about recent developments in the market for financial institution mergers and acquisitions broadly and regionally, summarized the revised material terms of the potential transaction, and discussed the financial terms of the current draft of the merger agreement. At this meeting, Mr. Hovde reiterated the concerns he expressed during the June 25, 2019 phone call with Mr. Cornelsen and KBW, as well as the statement that he would not block the merger from going forward. At the conclusion of this meeting, the Strategic Opportunities Committee voted to bring the proposed merger to the full board of directors with a recommendation that it be approved by the full board.

On June 27, 2019, the board of directors of Wesbanco met at a regularly scheduled meeting and addressed, among other matters, the status of the negotiations with Old Line Bancshares. Representatives of Davidson and the law firms of Phillips, Gardill, Kaiser & Altmeyer, PLLC, and K&L Gates LLP also participated in the meeting. Paul C. Cancilla of K&L Gates LLP summarized the terms and conditions of the merger agreement and James C. Gardill of Phillips, Gardill, Kaiser & Altmeyer, PLLC provided a summary of its due diligence process, as well as an update on proposed employment related agreements, restricted stock agreements and retention agreements. Management of Wesbanco also presented a comprehensive review of its due diligence process and the results thereof. Davidson conducted a fairness opinion presentation, reviewed a draft of a fairness opinion, subject to final negotiation of remaining issues, and the board authorized further negotiations to finalize the transaction.

During its special meeting on July 2, 2019, at which Mr. Semanie, Mr. Bonaventure, and representatives of KBW were also present, Old Line Bancshares’ board of directors considered the definitive merger agreement and ancillary documents. Mr. Bonaventure presented the board with an overview of the board’s duties and responsibilities with respect to its consideration of the proposed merger and the material terms of the merger agreement, copies of which were provided to each director before the meeting. During this meeting, the board asked Mr. Cornelsen to provide a history of discussions with Wesbanco and other institutions that led to that day’s meeting to consider the Wesbanco acquisition proposal. Mr. Cornelsen proceeded to provide an overview of his contacts with Mr. Clossin as well as other potential acquirors, as discussed above in more detail, as well as the terms of the initial and final indications of interest, and the due diligence process conducted by the parties. Following this discussion, KBW reviewed the financial terms of the Wesbanco proposal, including information as to how the exchange ratio had been determined. At request of the board, KBW reviewed with the board the financial aspects of the proposed merger and verbally rendered an opinion as to the fairness, from a financial point of view and as of that date, to the holders of Old Line Bancshares common stock of the exchange ratio in the proposed merger. Thereafter, the board discussed other potential strategic options for Old Line Bancshares, including the potential interest level of other acquirers in an acquisition of Old Line Bancshares.

 

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During the discussion, director Eric Hovde re-iterated his concern about the exchange ratio and the process undertaken in the proposed merger. Following Mr. Hovde’s comments, there was a brief discussion regarding the age of members of Old Line Bancshares’ senior management and additional discussion on the proposed exchange ratio.

Following such discussion and deliberation among the directors, and after considering all of the factors that it deemed relevant, the Old Line Bancshares board of directors, with Mr. Hovde abstaining, approved the merger agreement and the transactions contemplated by the merger agreement, up to and including the merger, declared the merger advisable, and authorized Old Line Bancshares’ President and Chief Executive Officer to execute and deliver the definitive merger agreement.

A special meeting of the Wesbanco board of directors was held at noon on July 2, 2019, telephonically with representatives of Davidson, K&L Gates LLP and Phillips, Gardill, Kaiser & Altmeyer, PLLC also participating during which the board was apprised of the abstention of Mr. Hovde at the board meeting of Old Line Bancshares held earlier that morning. The Wesbanco board of directors did proceed to receive the fairness opinion presentation, the fairness opinion of Davidson, and an update from counsel on the terms and conditions of the transaction and approved the transaction and the merger agreement subject to the express condition precedent that the board of directors of Old Line Bancshares either vote unanimously to approve the merger or Mr. Hovde enter into a voting agreement and general release satisfactory to Wesbanco and its counsel.

Following the board meetings, Mr. Clossin informed Mr. Cornelsen that Wesbanco would not move forward with the proposed merger without the unanimous approval by the Old Line Bancshares board of directors unless Mr. Hovde was willing to enter into a voting agreement and general release. Between July 2, 2019 and July 13, 2019, the parties and their legal counsel engaged in discussions and negotiations with Mr. Hovde and his legal counsel in an attempt to craft a solution that would satisfy Wesbanco, Old Line Bancshares, and Mr. Hovde. As part of these discussions, KBW again asked Wesbanco and Mr. Clossin to increase the exchange ratio. Mr. Clossin replied that Wesbanco would not increase the exchange ratio and that they were willing to terminate the discussions if an exchange ratio increase were required.

On July 13, 2019, Mr. Hovde reconsidered and agreed to vote to approve the merger and the merger agreement and negotiate acceptable terms for his executing a voting agreement.

The boards of directors of Old Line Bancshares and Wesbanco each held a meeting on July 23, 2019. Mr. Semanie, Mr. Bonaventure, and representatives of KBW also attended the July 23, 2019 meeting of the Old Line Bancshares board of directors. Updated copies of the merger agreement, which contained no substantive revisions, were provided to each director before the meeting. At this meeting, KBW again reviewed with the board the financial aspects of the proposed merger and, at the request of the board, rendered to the board of directors of Old Line Bancshares a written opinion, dated July 23, 2019, to the effect that, as of such date and subject to the procedures followed, assumptions made, matters considered, and qualifications and limitations on the review undertaken by KBW as set forth in its written opinion, the exchange ratio in the proposed merger was fair, from a financial point of view, to the holders of Old Line Bancshares common stock.

After discussion regarding the process for approval, the board of directors of Old Line Bancshares unanimously approved the merger agreement and the transactions contemplated by the merger agreement, up to and including the merger, declared the merger advisable, and approved related matters.

Mr. Clossin, Mr. Cancilla, Christopher Gardill of Phillips, Gardill, Kaiser & Altmeyer, PLLC, and representatives of Davidson also attended the July 23, 2019 meeting of the Wesbanco board of directors. Updated copies of the merger agreement, which contained no substantive revisions, were provided to each director before the meeting. At this meeting, Davidson again reviewed with the board the financial aspects of the proposed merger and at the request of the board, rendered to the board of directors of Wesbanco a written opinion, dated July 23, 2019, to the effect that, as of such date and subject to the procedures followed, assumptions made,

 

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matters considered, and qualifications and limitations on the review undertaken by Davidson as set forth in its written opinion, the exchange ratio in the proposed merger was fair, from a financial point of view, to the holders of Wesbanco common stock.

After discussion regarding the process for approval, all of the members of the Wesbanco board of directors present for the July 23, 2019 meeting approved the merger agreement and the transactions contemplated by the merger agreement, up to and including the merger, declared the merger advisable, and approved related matters. One Wesbanco director, Jay T. McCamic, was unable to attend the July 23, 2019 meeting of the Wesbanco board of directors.

The parties executed the merger agreement on July 23, 2019.

Following the close of trading markets on July 23, 2019, Wesbanco and Old Line Bancshares issued a joint press release announcing the approval, adoption, and execution of the merger agreement.

Mr. Hovde resigned from the Old Line Bancshares board of directors on July 24, 2019.

Wesbanco’s Reasons for the Merger and Recommendation of the Wesbanco Board of Directors

After careful consideration, the Wesbanco board of directors determined that the merger agreement and the merger are in the best interests of Wesbanco and its shareholders, and, accordingly, adopted the merger agreement and approved the merger and other transactions contemplated by the merger agreement and recommends that Wesbanco shareholders vote “FOR” approval of the Wesbanco Merger Proposal, “FOR” approval of the Wesbanco Stock Issuance Proposal and “FOR” approval of the Wesbanco Adjournment Proposal. In reaching these determinations, Wesbanco’s board of directors consulted with Wesbanco’s senior management, financial advisor and outside legal advisors, and drew on its knowledge of the business, operations, properties, assets, financial condition, operating results, historical market prices, and prospects of Old Line Bancshares and Wesbanco, as well as current economic and market conditions, and considered a number of other factors, including the following material factors:

 

   

Old Line Bancshares’ Location in the Attractive Mid-Atlantic Commercial Market. The Wesbanco board of directors reviewed certain market and economic indicators for the Washington, D.C. and Baltimore commercial markets and analyzed that the merger should allow Wesbanco to enter the two fastest-growing metropolitan statistical areas (“MSA”) in the Mid-Atlantic region.1

 

   

Market Share in Mid-Atlantic Market. The Wesbanco board of directors also considered that the merger should place Wesbanco in the top-10 in deposit market share in Maryland and give it strong deposit market shares in the Washington, D.C. and Baltimore MSAs.1

 

   

Limited Acquisition Opportunities. The Wesbanco board and senior management also believe that Old Line Bancshares represents one of the last standing franchises of appropriate size and other factors left in the attractive Washington, D.C. and Baltimore MSA markets with desirable branch locations. The board noted that without the merger, favorable entry for Wesbanco into the Washington, D.C. and Baltimore MSA markets would be very difficult.

 

   

Strategic Growth Opportunity. The Wesbanco board also noted that combining Wesbanco’s superior funding base, wealth management capabilities and more diversified product mix with Old Line Bancshares’ attractive growth markets should lead to strategic growth and profitability.

 

   

Retention of Well-Capitalized Status. The Wesbanco board of directors also reviewed the pro forma financial information and noted that Wesbanco should remain well in excess of the “well-capitalized” guidelines for regulatory purposes on a pro forma basis.

 

1 

Source: S&P Global Market Intelligence, deposit market share data as of June 30, 2018; does not include deposits from closed branches and excludes E*TRADE Financial Corp. from Washington D.C. MSA.

 

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Strong Financial Motivations. The Wesbanco board of directors also considered, as of the date of receipt of the Davidson fairness opinion, the expected accretion to earnings per share from the merger of approximately 4.3% in 2020 and approximately 6.2% in 2021. The Wesbanco board also noted the expected internal rate of return which was projected to be in excess of 20%.

 

   

Opinion and Analysis of the Financial Advisor to Wesbanco. Wesbanco’s board of directors considered the financial analysis reviewed and discussed with the Wesbanco board of directors by representatives of Davidson as well as the written opinion of Davidson, dated as of July 23, 2019, as to the fairness, from a financial point of view, to Wesbanco of the consideration to be issued and paid by Wesbanco in respect of the outstanding shares of Old Line Bancshares common stock in the merger pursuant to the merger agreement.

 

   

Merger Agreement Terms and Conditions. The Wesbanco board of directors reviewed with independent outside counsel the terms and conditions of the merger agreement and determined that (i) the terms and conditions were reasonable and necessary to consummate the transaction, (ii) provided adequate safeguards pending shareholder and regulatory approvals that would preserve the franchise value of Old Line Bancshares during the interim period from the date of execution of the merger agreement to the closing of the merger and the completion of the integration of Old Line Bancshares and (iii) the merger agreement included strong deal protection and termination fee provisions for Wesbanco.

 

   

Regulatory Cost Considerations. The Wesbanco board of directors analyzed the increased operating costs resulting from regulatory initiatives and compliance mandates as a result of exceeding $10 billion in total assets in 2018 and the likely effect of those on Wesbanco both with and without the proposed transaction, including that the enhanced scale from the merger should help offset those increased costs.

 

   

Board Members. The Wesbanco board of directors also considered that two of the Old Line Bancshares’ directors would become Wesbanco directors after the merger and all of the Old Line Bancshares’ directors would serve on a Wesbanco advisory board for the Mid-Atlantic market, which the Wesbanco board of directors believed would enhance the likelihood of realizing the strategic and market benefits that Wesbanco expects to derive from the merger.

 

   

Retention of Key Personnel. The Wesbanco board of directors also considered the retention of key executive officers and revenue producers through the amended employment agreements, restricted stock agreements and retention agreements executed, or to be executed, in connection with the merger as mitigating execution and integration risks. See “Interests of Certain Persons in the Merger.”

 

   

Due Diligence Results. The Wesbanco board of directors also considered the results of management’s due diligence investigation of Old Line Bancshares, its business operations, its loan and deposit portfolio and its growth strategy.

In the course of its deliberations, the Wesbanco board of directors also considered potential risks and potentially negative factors concerning the merger, including the following material factors:

 

   

the possibility of encountering difficulties in achieving anticipated cost savings in the amounts estimated or in the time frame contemplated;

 

   

the possibility of encountering difficulties in successfully integrating Old Line Bancshares business, operations, and workforce with those of Wesbanco;

 

   

the transaction-related restructuring charges and other merger-related costs, including the payments and other benefits to be received by Old Line Bancshares management in connection with the merger;

 

   

that the initial dilution to tangible book value per common share is estimated to be approximately 3.8% at closing, but Wesbanco’s management believes the earnings per share accretion strength should permit the earn back in approximately 3.3 years using the cross over method while reflecting all merger-related expenses, purchase accounting adjustments and cost savings;

 

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the risk of not achieving the expected earnings accretion of 4.3% in 2020 and 6.2% in 2021 and the expected internal rate of return in excess of 20%;

 

   

diversion of management attention and resources from the operation of Wesbanco’s business towards the completion of the merger;

 

   

the regulatory and other approvals required in connection with the merger and the risk that such regulatory approvals will not be received in a timely manner or may impose unacceptable conditions;

 

   

the risk that the stockholders of Old Line Bancshares might not approve the Old Line Bancshares Merger Proposal and the risk that the shareholders of Wesbanco might not approve the Wesbanco Merger Proposal or the Wesbanco Stock Issuance Proposal;

 

   

the risks in connection with Eric D. Hovde’s (then-director of Old Line Bancshares) expressed unhappiness with certain aspects of the process by which the merger agreement was negotiated and presented to the Old Line Bancshares board of directors for consideration; and

 

   

the risk of a competing purchaser making a competing bid for Old Line Bancshares and the risk of litigation in connection with the merger agreement and merger.

While the Wesbanco board of directors considered the foregoing potentially positive and potentially negative factors, the Wesbanco board concluded that, overall, the potentially positive factors outweighed the potentially negative factors. Accordingly, the Wesbanco board of directors determined that the merger agreement and the merger are advisable and in the best interests of Wesbanco and its shareholders.

The foregoing discussion of the information and factors considered by the Wesbanco board of directors is not intended to be exhaustive, but includes the material considerations of Wesbanco’s board of directors in adopting the merger agreement and approving the merger and other transactions contemplated by the merger agreement. In reaching the determination to approve and recommend the merger, Wesbanco’s board of directors looked at the totality of the information presented to it and did not assign any relative or specific weights to the factors considered, and individual directors may have given different weights to different factors. After considering, among other things, the matters discussed above, Wesbanco’s board of directors recommends that Wesbanco’s shareholders vote “FOR” approval of (i) the Wesbanco Merger Proposal, (ii) the Wesbanco Stock Issuance Proposal and (iii) the Wesbanco Adjournment Proposal.

It should be noted that this discussion of the Wesbanco board of directors’ reasoning presented in this section contains information that is forward-looking in nature, and therefore should be read in light of the factors discussed under the heading “Cautionary Statement Regarding Forward-Looking Statements.”

Opinion of Wesbanco’s Financial Advisor

On February 27, 2019, Wesbanco entered into an engagement agreement with D.A. Davidson & Co. to render financial advisory and investment banking services to Wesbanco. As part of its engagement, Davidson agreed to assist Wesbanco in analyzing, structuring, negotiating and, if appropriate, effecting a transaction between Wesbanco and another corporation or business entity. Davidson also agreed to provide Wesbanco’s board of directors with an opinion as to the fairness, from a financial point of view, to Wesbanco of the merger consideration to be paid to the holders of Old Line Bancshares’ common stock in the proposed merger. Wesbanco engaged Davidson because Davidson is a nationally recognized investment banking firm with substantial experience in transactions similar to the merger and is familiar with Wesbanco and its business. As part of its investment banking business, Davidson is continually engaged in the valuation of financial institutions and their securities in connection with mergers and acquisitions and other corporate transactions.

On July 23, 2019, the Wesbanco board of directors held a meeting to evaluate the proposed merger. At this meeting, Davidson reviewed the financial aspects of the proposed merger and rendered an opinion to the

 

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Wesbanco board that, as of such date and based upon and subject to assumptions made, procedures followed, matters considered and limitations on the review undertaken, the merger consideration to be paid to the holders of Old Line Bancshares’s common stock was fair, from a financial point of view, to Wesbanco in the proposed merger.

The full text of Davidson’s written opinion, dated July 23, 2019, is attached as Annex B to this joint proxy statement/prospectus and is incorporated herein by reference. The description of the opinion set forth herein is qualified in its entirety by reference to the full text of such opinion. Wesbanco’s shareholders are urged to read the opinion in its entirety.

Davidson’s opinion speaks only as of the date of the opinion and Davidson undertakes no obligation to revise or update its opinion. The opinion is directed to the Wesbanco board of directors and addresses only the fairness, from a financial point of view, to Wesbanco of the merger consideration to be paid to the holders of Old Line Bancshares’ common stock in the proposed merger. The opinion does not address, and Davidson expresses no view or opinion with respect to, (i) the underlying business decision of Wesbanco to engage in the merger, (ii) the relative merits or effect of the merger as compared to any alternative business transactions or strategies that may be or may have been available to or contemplated by Wesbanco or Wesbanco’s board of directors, or (iii) any legal, regulatory, accounting, tax or similar matters relating to Wesbanco, its shareholders or relating to or arising out of the merger. The opinion expresses no view or opinion as to any terms or other aspects of the merger, except for the merger consideration. Wesbanco and Old Line Bancshares determined the merger consideration through the negotiation process. The opinion does not express any view as to the amount or nature of the compensation to any of Wesbanco’s or Old Line Bancshares’ officers, directors or employees, or any class of such persons, relative to the merger consideration, or with respect to the fairness of any such compensation. The opinion has been reviewed and approved by Davidson’s Fairness Opinion Committee in conformity with its policies and procedures established under the requirements of Rule 5150 of the Financial Industry Regulatory Authority.

Davidson has reviewed the registration statement on Form S-4 of which this joint proxy statement/prospectus is a part and consented to the inclusion of its opinion to the Wesbanco board of directors as Annex B to this joint proxy statement/prospectus and to the references to Davidson and its opinion contained herein. A copy of the consent of Davidson is attached as Exhibit 99.8 to the registration statement on Form S-4.

In connection with rendering its opinion, Davidson reviewed, among other things, the following:

 

  (i)

the Agreement, dated July 23, 2019;

 

  (ii)

certain financial statements and other historical financial and business information about Wesbanco and Old Line Bancshares made available to Davidson from published sources and/or from the internal records of Wesbanco and Old Line Bancshares that Davidson deemed relevant;

 

  (iii)

certain financial statements and business information about Wesbanco and Old Line Bancshares in draft form, as of the quarter ended June 30, 2019;

 

  (iv)

certain publicly available analyst earnings estimates for Wesbanco for the years ending December 31, 2019 and December 31, 2020 and an estimated long-term growth rate for the years thereafter, in each case as discussed with, and confirmed by, senior management of Wesbanco;

 

  (v)

certain publicly available analyst earnings estimates for Old Line Bancshares for the years ending December 31, 2019 and December 31, 2020 and an estimated long term growth rate for the years thereafter, in each case as discussed with, and confirmed by, senior management of Wesbanco;

 

  (vi)

the current market environment generally and the banking environment in particular;

 

  (vii)

the market and trading characteristics of selected public companies and selected public bank holding companies in particular;

 

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  (viii)

the financial terms of certain other transactions in the financial institutions industry, to the extent publicly available;

 

  (ix)

the relative contributions of Wesbanco and Old Line Bancshares to the combined company;

 

  (x)

the pro forma financial impact of the transaction, taking into consideration the amounts and timing of the transaction costs, cost savings and revenue enhancements;

 

  (xi)

the net present value of Wesbanco and Old Line Bancshares with consideration of projected financial results; and

 

  (xii)

such other financial studies, analyses and investigations and financial, economic and market criteria and other information as Davidson considered relevant including discussions with management and other representatives and advisors of Wesbanco and Old Line Bancshares concerning the business, financial condition, results of operations and prospects of Wesbanco and Old Line Bancshares.

In arriving at its opinion, Davidson assumed and relied upon the accuracy and completeness of all information that was publicly available, supplied or otherwise made available to, discussed with or reviewed by or for Davidson. Davidson has relied on the assurances of management of Wesbanco that they are not aware of any facts or circumstances that would make any of such information, forecasts or analyses inaccurate or misleading. Davidson did not independently verify, and did not assume responsibility for independently verifying, such information or undertaken an independent evaluation or appraisal of any of the assets or liabilities (contingent or otherwise) of Wesbanco or Old Line Bancshares. In addition, Davidson did not assume any obligation to conduct, nor did Davidson conduct any physical inspection of the properties or facilities of Wesbanco or Old Line Bancshares and has not been provided with any reports of such physical inspections. Davidson assumed that there has been no material change in Wesbanco’s or Old Line Bancshares’ business, assets, financial condition, results of operations, cash flows, or prospects since the date of the most recent financial statements provided to Davidson.

With respect to the financial projections and other estimates (including information relating to the amounts and timing of the merger cost, cost savings, and revenue enhancements) provided to or otherwise reviewed by or for or discussed with Davidson, Davidson has been advised by management of Wesbanco that such forecasts and other analyses were reasonably prepared on bases reflecting the best currently available estimates and good faith judgments of management of Wesbanco as to the future financial performance of Wesbanco and the other matters covered thereby, and that the financial results (including the potential strategic implications and operational benefits anticipated to result from the transaction) reflected in such forecasts and analyses will be realized in the amounts and at the times projected. Davidson assumes no responsibility for and does not express an opinion as to these forecasts and analyses or the assumptions on which they were based.

Davidson did not make an independent evaluation or appraisal of the loan and lease portfolios, classified loans, other real estate owned or any other specific assets, nor has Davidson assessed the adequacy of the allowance for loan losses of Wesbanco or Old Line Bancshares. Davidson has not reviewed any individual credit files relating to Wesbanco or Old Line Bancshares. Davidson assumed that the respective allowances for loan losses for both Wesbanco and Old Line Bancshares are adequate to cover such losses and will be adequate on a pro forma basis for the combined entity. Davidson did not make an independent evaluation of the quality of Wesbanco’s or Old Line Bancshares’ deposit base, nor has Davidson independently evaluated potential deposit concentrations or the deposit composition of Wesbanco or Old Line Bancshares. Davidson did not make an independent evaluation of the quality of Wesbanco’s or Old Line Bancshares’ investment securities portfolio, nor has Davidson independently evaluated potential concentrations in the investment securities portfolio of Wesbanco or Old Line Bancshares.

Davidson assumed that all representations and warranties contained in the merger agreement and all related agreements are true and correct in all respects material to Davidson’s analysis, and that the merger will be consummated in accordance with the terms of the Agreement, without waiver, modification, or amendment of

 

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any term, condition or covenant thereof the effect of which would be in any respect material to Davidson’s analysis. Davidson has assumed that all material governmental, regulatory or other consents, approvals, and waivers necessary for the consummation of the merger will be obtained without any material adverse effect on the Company or the contemplated benefits of the merger.

Davidson assumed in all respects material to its analysis that Wesbanco and Old Line Bancshares will remain as going concerns for all periods relevant to its analysis. Davidson’s opinion was necessarily based upon information available to Davidson and economic, market, financial and other conditions as they exist and can be evaluated on the date the fairness opinion letter was delivered to Wesbanco’s board of directors.

Davidson’s opinion does not take into account individual circumstances of specific holders with respect to control, voting or other rights which may distinguish such holders.

Davidson also does not express an opinion as to the actual value of Wesbanco’s common stock when issued in the transaction or the prices at which Wesbanco’s common stock will trade following announcement of the transaction or at any future time.

Davidson has not evaluated the solvency or fair value of Wesbanco or Old Line Bancshares under any state, federal or other laws relating to bankruptcy, insolvency or similar matters. Davidson’s opinion is not a solvency opinion and does not in any way address the solvency or financial condition of Wesbanco or Old Line Bancshares. Davidson is not expressing any opinion as to the impact of the transaction on the solvency or viability of Wesbanco or Old Line Bancshares or the ability of Wesbanco or Old Line Bancshares to pay their respective obligations when they come due.

Set forth below is a summary of the material financial analyses performed by Davidson in connection with rendering its opinion. The summary of the analyses of Davidson set forth below is not a complete description of the analysis underlying its opinion, and the order in which these analyses are described below is not indicative of any relative weight or importance given to those analyses by Davidson. The following summaries of financial analyses include information presented in tabular format. You should read these tables together with the full text of the summary financial analyses, as the tables alone are not a complete description of the analyses.

Unless otherwise indicated, the following quantitative information, to the extent it is based on market data, is based on market data as of July 22, 2019, the last trading day prior to the date on which Davidson delivered the fairness opinion letter to Wesbanco’s board of directors, and is not necessarily indicative of market conditions after such date.

 

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Implied Valuation Multiples for Wesbanco based on the Merger Consideration

Davidson reviewed the financial terms of the proposed transaction. As described in the merger agreement, each share of Old Line Bancshares common stock will be converted into the right to receive 0.7844 of a share of Wesbanco common stock. The terms and conditions of the merger are more fully described in the merger agreement. For purposes of the financial analyses described below, based on the closing price of Wesbanco common stock on July 22, 2019, of $37.25, the merger consideration represented an implied value of $29.22 per share of Old Line Bancshares common stock. Based upon financial information as of or for the twelve month period ended June 30, 2019 and other financial and market information described below, Davidson calculated the following transaction ratios:

 

Transaction Ratios

 
     Per Share     Aggregate  

Transaction Price / LTM Net Income

     14.0x       14.0x  

Transaction Price / 2019E Net Income(1)

     13.4x       13.3x  

Transaction Price / 2020E Net Income(1)

     12.2x       12.2x  

Transaction Price / Book Value

     127.6     128.4

Transaction Price / Tangible Book Value

     177.0     178.2

Tangible Book Premium / Core Deposits(2)

     —         12.6

Transaction Price / Old Line Bancshares’ Closing Price as of 7/22/2019(3)

     112.7  

Transaction Price / Old Line Bancshares’ 20-Day Average Price as of 7/22/2019(4)

     111.6  

 

(1)

Financial projections for Old Line Bancshares based on average analyst earnings estimates in 2019-2020, as discussed with and confirmed by Wesbanco management

(2)

Tangible book premium / core deposits calculated by dividing the excess or deficit of the aggregate transaction value compared to tangible book value by core deposits

(3)

Based on Old Line Bancshares’ Closing Price as of July 22, 2019 of $25.92

(4)

Based on Old Line Bancshares’ 20-Day Average Price as of July 22, 2019 of $26.19

Stock Price Performance of Wesbanco and Old Line Bancshares

Davidson reviewed the history of the reported trading prices and volume of Wesbanco and Old Line Bancshares common stock and certain stock indices, including the Russell 3000 and the NASDAQ Bank Indices. Davidson compared the stock price performance of Wesbanco or Old Line Bancshares with the performance of the Russell 3000 and the NASDAQ Bank Index as follows:

 

One Year Stock Performance

 
     Beginning Index Value on 7/20/2018     Ending Index Value on 7/22/2019  

Russell 3000

     100.00     105.11

NASDAQ Bank

     100.00     85.64

Wesbanco

     100.00     77.95

Old Line Bancshares

     100.00     73.62

 

Three Year Stock Performance

 
     Beginning Index Value on 7/22/2016     Ending Index Value on 7/22/2019  

Russell 3000

     100.00     136.62

NASDAQ Bank

     100.00     127.19

Wesbanco

     100.00     119.43

Old Line Bancshares

     100.00     137.29

Contribution Analysis

Davidson analyzed the relative contribution of Wesbanco and Old Line Bancshares to certain financial and operating metrics for the pro forma combined company. Such financial and operating metrics included: (i) market capitalization; (ii) net income available to common shareholders for the twelve months ended June 30,

 

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2019; (iii) estimates for Wesbanco net income in 2019 and 2020 based on publicly available average analyst earnings estimates, as discussed with and confirmed by Wesbanco management; (iv) estimates for Old Line Bancshares net income in 2019 and 2020 based on publicly available average analyst earnings estimates, as discussed with and confirmed by Wesbanco management; (v) total assets; (vi) gross loans; (vii) total deposits; (viii) non-interest bearing demand deposits; (ix) non-CD deposits; and (x) tangible common equity. The relative contribution analysis did not give effect to the impact of any synergies as a result of the proposed merger. The results of this analysis are summarized in the table below, which also compares the results of this analysis with the implied pro forma ownership percentages of Wesbanco or Old Line Bancshares shareholders in the combined company:

 

Contribution Analysis

 
     Wesbanco
Stand-alone
     Wesbanco
% of Total
    Old Line
Bancshares

Stand-alone
     Old Line
Bancshares

% of Total
 

Market Capitalization

          

Market Capitalization (7/22/2019) (in thousands)

   $ 2,034,028        82.2   $ 441,668        17.8

Income Statement — Historical

          

LTM Net Income (in thousands)(1)

   $ 161,565        81.8   $ 35,843        18.2

Income Statement — Projections

          

2019E Net Income (in thousands)(2)(3)

   $ 177,139        82.5   $ 37,470        17.5

2020E Net Income (in thousands)(2)(3)

   $ 181,078        81.6   $ 40,952        18.4

Balance Sheet

          

Total Assets (in thousands)

   $ 12,494,653        80.2   $ 3,075,613        19.8

Gross Loans, Incl. Loans HFS (in thousands)

   $ 7,756,503        76.0   $ 2,443,770        24.0

Total Deposits (in thousands)

   $ 8,694,928        78.5   $ 2,384,481        21.5

Non-Interest Bearing Demand Deposits (in thousands)

   $ 2,481,065        80.0   $ 620,754        20.0

Non-CD Deposits (in thousands)

   $ 7,329,812        83.1   $ 1,492,942        16.9

Tangible Common Equity (in thousands)

   $ 1,170,387        80.7   $ 280,588        19.3

Pro Forma Ownership

          

Merger Transaction — Actual

        80.4        19.6

 

Note: Pro forma contribution does not include any purchase accounting or merger adjustments

(1)

Net income for the preceding twelve months ending June 30, 2019

(2)

Financial projections for Wesbanco based on average analyst earnings estimates in 2019-2020, as discussed with and confirmed by Wesbanco management

(3)

Financial projections for Old Line Bancshares based on average analyst earnings estimates in 2019-2020, as discussed with and confirmed by Wesbanco management

Wesbanco Comparable Companies Analysis

Davidson used publicly available information to compare selected financial and market trading information for Wesbanco and a group of 16 financial institutions selected by Davidson which: (i) were listed in Wesbanco’s 2019 proxy; (ii) were not pending merger targets. The 16 financial institutions were as follows:

 

1st Source Corporation

Atlantic Union Bankshares Corporation

Community Bank System, Inc.

Eagle Bancorp, Inc.

F.N.B. Corporation

First Commonwealth Financial Corporation

First Financial Bancorp.

First Merchants Corporation

  

NBT Bancorp Inc.

Old National Bancorp

Park National Corporation

Pinnacle Financial Partners, Inc.

S&T Bancorp, Inc.

Tompkins Financial Corporation

TowneBank

United Bankshares, Inc.

Note: Does not reflect impact from pending acquisitions or acquisitions closed after July 22, 2019

 

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The analysis compared the financial condition and market performance of Wesbanco and the 16 financial institutions identified above based on publicly available financial and market trading information for Wesbanco and the 16 financial institutions as of and for the most recent twelve-month or three-month period publicly available. The analysis also compared the 2019 and 2020 earnings per share multiples for Wesbanco and the 16 financial institutions identified above based on publicly available analyst earnings estimates for Wesbanco and the 16 financial institutions. The table below shows the results of this analysis (excluding the impact of earnings per share multiples considered not meaningful by Davidson).

 

Financial Condition and Performance

 
           Comparable Companies  
     Wesbanco     Median     Average     Minimum     Maximum  

Total Assets (in millions)

   $ 12,495     $ 10,478     $ 13,733     $ 6,650     $ 33,695  

Loan / Deposit Ratio

     89.2     94.6     93.3     74.0     106.4

Non-Performing Assets / Total Assets

     0.30     0.33     0.42     0.20     1.06

Tangible Common Equity Ratio

     10.10     9.42     9.49     7.15     12.60

Net Interest Margin (Most Recent Quarter)

     3.67     3.71     3.68     3.26     4.04

Cost of Deposits (Most Recent Quarter)

     0.50     0.89     0.81     0.19     1.30

Efficiency Ratio (Most Recent Quarter)

     54.9     55.8     55.3     38.0     68.1

Return on Average Tangible Common Equity (Most Recent Quarter)

     16.35     15.29     15.34     11.23     19.80

Return on Average Assets (Most Recent Quarter)

     1.44     1.31     1.35     1.03     1.74

 

Market Performance Multiples(1)

 
           Comparable Companies  
     Wesbanco     Median     Average     Minimum     Maximum  

Market Capitalization (in millions)

   $ 2,034     $ 1,897     $ 2,304     $ 1,137     $ 4,481  

Price vs. 52-Week High

     -27.1     -17.1     -18.5     -34.4     -4.9

Price vs. 52-Week Low

     9.1     18.5     18.6     3.1     35.5

Price Change (LTM)

     -22.1     -14.4     -14.4     -30.5     2.7

Price Change (YTD)

     1.5     10.5     9.9     -18.1     27.1

Price / MRQ Earnings Per Share

     11.4x       12.6x       13.4x       9.2x       18.7x  

Price / LTM Earnings Per Share

     12.4x       13.2x       13.3x       9.1x       19.7x  

Price / 2019E Earnings Per Share(2)

     11.5x       12.7x       12.9x       9.3x       19.7x  

Price / 2020E Earnings Per Share(2)

     11.3x       12.0x       12.4x       9.0x       19.1x  

Price / Tangible Book Value Per Share

     174.1     188.6     195.2     132.1     329.5

Dividend Yield (Most Recent Quarter)

     3.33     2.80     2.88     1.09     4.20

 

(1)

Market performance multiples as of July 22, 2019

(2)

Based on publicly available average analyst earnings estimates in 2019-2020

 

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Old Line Bancshares Comparable Companies Analysis

Davidson used publicly available information to compare selected financial and market trading information for Old Line Bancshares and a group of 18 financial institutions selected by Davidson which: (i) were listed in Old Line Bancshares’ 2019 proxy; (ii) were not pending merger targets. The 18 financial institutions were as follows:

 

Arrow Financial Corporation

Bar Harbor Bankshares

Bridge Bancorp, Inc.

Bryn Mawr Bank Corporation

Century Bancorp, Inc.

City Holding Company

Enterprise Bancorp, Inc.

Financial Institutions, Inc.

First of Long Island Corporation

  

Hingham Institution for Savings

Meridian Bancorp, Inc.

Northfield Bancorp, Inc.

Peapack-Gladstone Financial Corporation

Peoples Financial Services Corp.

Republic First Bancorp, Inc.

Southern National Bancorp of Virginia, Inc.

TriState Capital Holdings, Inc.

Univest Financial Corporation

Note: Does not reflect impact from pending acquisitions or acquisitions closed after July 22, 2019

The analysis compared the financial condition and market performance of Old Line Bancshares and the 18 financial institutions identified above based on publicly available financial and market trading information for Old Line Bancshares and the 18 financial institutions as of and for the most recent twelve-month or three-month period publicly available. The analysis also compared the 2019 and 2020 earnings per share multiples for Old Line Bancshares and the 18 financial institutions identified above based on publicly available analyst earnings estimates for Old Line Bancshares and the 18 financial institutions. The table below shows the results of this analysis (excluding the impact of earnings per share multiples considered not meaningful by Davidson).

 

Financial Condition and Performance

 
           Comparable Companies  
     Old Line
Bancshares
    Median     Average     Minimum     Maximum  

Total Assets (in millions)

   $ 3,076     $ 4,429     $ 4,208     $ 2,318     $ 6,846  

Loan / Deposit Ratio

     102.5     97.6     94.4     56.5     131.8

Non-Performing Assets / Total Assets

     0.28     0.24     0.27     0.02     0.54

Tangible Common Equity Ratio

     9.46     8.77     8.95     5.99     14.17

Net Interest Margin (Most Recent Quarter)

     3.49     3.05     3.04     2.03     3.96

Cost of Deposits (Most Recent Quarter)

     1.04     1.01     1.13     0.67     2.41

Efficiency Ratio (Most Recent Quarter)

     55.1     60.4     60.9     31.1     96.6

Return on Average Tangible Common Equity (Most Recent Quarter)

     13.48     12.18     11.95     0.72     17.81

Return on Average Assets (Most Recent Quarter)

     1.17     1.01     1.02     0.06     1.76

 

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Market Performance Multiples(1)

 
           Comparable Companies  
     Old Line
Bancshares
    Median     Average     Minimum     Maximum  

Market Capitalization (in millions)

   $ 442     $ 505     $ 560     $ 271     $ 1,240  

Price vs. 52-Week High

     -27.0     -16.9     -18.7     -43.8     -5.1

Price vs. 52-Week Low

     7.5     15.6     16.1     1.3     34.1

Price Change (LTM)

     -26.4     -15.1     -15.4     -40.1     6.8

Price Change (YTD)

     -1.5     7.8     7.0     -22.8     28.0

Price / MRQ Earnings Per Share

     12.5x       12.2x       13.0x       9.6x       20.6x  

Price / LTM Earnings Per Share

     12.4x       13.0x       13.2x       10.4x       19.1x  

Price / 2019E Earnings Per Share(2)

     11.9x       11.8x       12.7x       9.9x       20.6x  

Price / 2020E Earnings Per Share(2)

     10.9x       11.4x       12.6x       9.6x       21.0x  

Price / Tangible Book Value Per Share

     157.0     147.2     152.4     113.6     249.3

Dividend Yield (Most Recent Quarter)

     1.85     2.81     2.21     0.00     3.71

 

(1)

Market performance multiples as of July 22, 2019

(2)

Based on publicly available average analyst earnings estimates in 2019-2020

Precedent Transactions Analysis

Davidson reviewed three sets of comparable merger and acquisition transactions. The sets of mergers and acquisitions included: (1) “Regional Transactions,” (2) “Nationwide Transactions,” and (3) “Nationwide 100% Stock Transactions.”

“Regional Transactions” included 12 transactions where:

 

   

the selling company was a bank headquartered in Maryland, Pennsylvania, Virginia and West Virginia;

 

   

the selling company’s total assets were greater than $500 million;

 

   

the transaction was announced between January 1, 2017 and July 22, 2019;

 

   

the transaction’s pricing information was publicly available; and

 

   

the transaction was not a merger of equals.

“Nationwide” included 15 transactions where:

 

   

the selling company was a bank headquartered in the United States;

 

   

the deal value of the transaction was between $300 million and $750 million;

 

   

the transaction was announced between January 1, 2018 and July 22, 2019;

 

   

the transaction’s pricing information was publicly available; and

 

   

the transaction was not a merger of equals.

“Nationwide 100% Stock” included 15 transactions where:

 

   

the selling company was a bank headquartered nationwide;

 

   

the merger consideration comprised of 100% stock;

 

   

the selling company’s total assets were greater than $500 million;

 

   

the transaction was announced between June 30, 2018 and July 22, 2019;

 

   

the transaction’s pricing information was publicly available; and

 

   

the transaction was not a merger of equals.

 

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The following tables set forth the transactions included in “Regional Transactions,” “Nationwide Transactions,” and “Nationwide 100% Stock Transactions,” and are sorted by announcement date:

 

Regional Transactions

Announcement Date

  

Acquirer

  

Target

6/05/2019*

10/23/2018

10/05/2018

10/01/2018

8/08/2018

1/16/2018

11/13/2017

9/27/2017

8/15/2017

5/22/2017

5/16/2017

1/31/2017

  

S&T Bancorp, Inc.

Orrstown Financial Services, Inc.

Union Bankshares Corporation

American National Bankshares Inc.

WSFS Financial Corporation

Mid Penn Bancorp, Inc.

WesBanco, Inc.

Old Line Bancshares, Inc.

Howard Bancorp, Inc.

Union Bankshares Corporation

Sandy Spring Bancorp, Inc.

Bryn Mawr Bank Corporation

  

DNB Financial Corporation

Hamilton Bancorp, Inc.

Access National Corporation

HomeTown Bankshares Corporation

Beneficial Bancorp, Inc.

First Priority Financial Corp.

First Sentry Bancshares, Inc.

Bay Bancorp, Inc.

1st Mariner Bank

Xenith Bankshares, Inc.

WashingtonFirst Bankshares, Inc.

Royal Bancshares of Pennsylvania, Inc.

 

*

Indicates the transaction was pending as of July 22, 2019

 

Nationwide Transactions

Announcement Date

  

Acquirer

  

Target

6/26/2019*

5/06/2019*

11/27/2018

10/05/2018

9/20/2018

8/22/2018

6/21/2018

6/19/2018

4/30/2018

4/24/2018

4/19/2018

3/28/2018

2/12/2018

1/26/2018

1/09/2018

  

Valley National Bancorp

Banco Bradesco SA

People’s United Financial, Inc.

Union Bankshares Corporation

Independent Bank Corp.

First Busey Corporation

Old National Bancorp

People’s United Financial, Inc.

Allegiance Bancshares, Inc.

CenterState Bank Corporation

WesBanco, Inc.

Renasant Corporation

Pacific Premier Bancorp, Inc.

Ameris Bancorp

Meta Financial Group, Inc.

  

Oritani Financial Corp.

BAC Florida Bank

BSB Bancorp, Inc.

Access National Corporation

Blue Hills Bancorp, Inc.

Banc Ed Corp.

Klein Financial, Inc.

First Connecticut Bancorp, Inc.

Post Oak Bancshares, Inc.

Charter Financial Corporation

Farmers Capital Bank Corporation

Brand Group Holdings, Inc.

Grandpoint Capital, Inc.

Hamilton State Bancshares, Inc.

Crestmark Bancorp Inc.

 

*

Indicates the transaction was pending as of July 22, 2019

 

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Nationwide 100% Stock Transactions

Announcement Date

  

Acquirer

  

Target

7/15/2019*

6/26/2019*

6/05/2019*

5/16/2019*

1/16/2019

12/17/2018

12/11/2018

11/26/2018

10/11/2018

10/10/2018*

10/05/2018

10/01/2018

7/25/2018

7/24/2018

7/12/2018

  

People’s United Financial, Inc.

Valley National Bancorp

S&T Bancorp, Inc.

Heritage Commerce Corp

Heartland Financial USA, Inc.

Ameris Bancorp

Berkshire Hills Bancorp, Inc.

CenterState Bank Corporation

First Interstate BancSystem, Inc.

First Merchants Corporation

Union Bankshares Corporation

American National Bankshares Inc.

Banner Corporation

Synovus Financial Corp.

ConnectOne Bancorp, Inc.

  

United Financial Bancorp, Inc.

Oritani Financial Corp.

DNB Financial Corporation

Presidio Bank

Blue Valley Ban Corp.

Fidelity Southern Corporation

SI Financial Group, Inc.

National Commerce Corporation

Idaho Independent Bank

MBT Financial Corp.

Access National Corporation

HomeTown Bankshares Corporation

Skagit Bancorp, Inc.

FCB Financial Holdings, Inc.

Greater Hudson Bank

 

*

Indicates the transaction was pending as of July 22, 2019

For each transaction referred to above, Davidson compared, among other things, the following implied ratios:

 

   

transaction price compared to tangible book value on a per share and aggregate basis, based on the latest publicly available financial statements of the target company prior to the announcement of the transaction;

 

   

transaction price compared to earnings per share for the last twelve months, based on the latest publicly available financial statements of the target company prior to the announcement of the transaction;

 

   

transaction price per share compared to the closing stock price of the target company for the day prior to the announcement of the transaction; and

 

   

tangible book premium to core deposits based on the latest publicly available financial statements of the target company prior to the announcement of the transaction.

 

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Davidson compared the multiples of the comparable transaction groups and other operating financial data where relevant to the proposed merger multiples and other operating financial data for Old Line Bancshares as of or for the 3-month period ended June 30, 2019. The table below sets forth the results of this analysis.

 

Financial Condition and Performance

 
          Regional     Nationwide     Nationwide, 100% Stock  
    Old Line
Bancshares
    Median     Average     Minimum     Maximum     Median     Average     Minimum     Maximum     Median     Average     Minimum     Maximum  

Total Assets (in millions)

  $ 3,076     $ 904     $ 1,661     $ 525     $ 5,770     $ 2,275     $ 2,347     $ 1,113     $ 4,075     $ 1,322     $ 2,927     $ 520     $ 12,192  

Return on Average Assets (Last Twelve Months)

    1.20     0.82     0.69     -1.07     2.14     0.84     0.97     0.51     2.15     0.95     0.81     -0.59     1.49

Return on Average Equity (Last Twelve Months)

    15.58     7.04     6.62     -9.38     15.92     6.90     8.96     4.54     21.29     8.07     7.80     -5.13     14.86

Tangible Common Equity Ratio

    9.46     8.94     9.52     6.20     15.19     9.47     9.90     6.66     14.31     9.42     9.45     6.88     13.02

Efficiency Ratio (Last Twelve Months)

    54.8     68.7     70.2     53.9     98.0     64.0     60.3     34.3     74.2     65.8     63.1     34.3     78.9

Non-Performing Assets / Total Assets

    0.28     1.16     1.16     0.25     2.17     0.52     0.70     0.18     2.51     0.68     0.68     0.14     1.51

 

Transaction Multiples

 
          Regional     Nationwide     Nationwide, 100% Stock  
    Old Line
Bancshares
    Median     Average     Minimum     Maximum     Median     Average     Minimum     Maximum     Median     Average     Minimum     Maximum  

Transaction Price / Tangible Book Value (Per Share)

    177.0     194.2     197.1     125.8     261.3     204.7     216.6     139.6     404.0     202.6     192.6     117.5     250.9

Transaction Price / Tangible Book Value (Aggregate)

    178.2     198.0     200.8     127.5     271.2     216.4     220.9     139.6     404.0     207.9     196.8     118.8     266.7

Transaction Price / Last Twelve Months EPS

    14.0x       22.3x       22.7x       10.3x       39.3x       22.8x       22.6x       14.0x       35.0x       22.3x       21.2x       13.2x       34.6x  

One-Day Market Premium(1)

    12.7     20.3     26.0     7.4     64.4     8.8     8.8     -7.1     24.3     13.5     15.9     -1.8     56.6

Tangible Book Premium / Core Deposits(2)

    12.6     12.6     13.5     4.3     25.4     14.9     16.5     7.7     33.7     10.9     12.2     2.6     23.3

 

(1)

Based on Old Line Bancshares’ Closing Price as of 7/22/2019 of $25.92

(2)

Core deposits exclude time deposits with account balances greater than $100,000. Tangible book premium / core deposits calculated by dividing the excess or deficit of the aggregate transaction value over tangible book value by core deposits

Net Present Value Analysis for Old Line Bancshares

Davidson performed an analysis that estimated the net present value per share of Old Line Bancshares common stock under various circumstances. The analysis assumed: (i) Old Line Bancshares performed in accordance with publicly available analyst earnings estimates for the years ending December 31, 2019 and December 31, 2020, and (ii) an estimated long-term growth rate for the years thereafter, as discussed with and confirmed by Wesbanco management. To approximate the terminal value of Old Line Bancshares common stock at December 31, 2024, Davidson applied price to earnings multiples of 10.0x to 22.0x and multiples of tangible book value ranging from 140.0% to 260.0%. The income streams and terminal values were then discounted to present values using different discount rates ranging from 9.00% to 15.00% chosen to reflect different assumptions regarding required rates of return of holders or prospective buyers of Old Line Bancshares’ common stock. In evaluating the discount rate, Davidson used industry standard methods of adding the current risk-free rate, which is based on the 20-year Treasury yield, plus the published Duff & Phelps Industry Equity Risk Premium and plus the published Duff & Phelps Size Premium.

At the July 23, 2019 Wesbanco board of directors meeting, Davidson noted that the net present value analysis is a widely used valuation methodology, but the results of such methodology are highly dependent upon the numerous assumptions that must be made, and the results thereof are not necessarily indicative of actual values or future results.

 

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As illustrated in the following tables, the analysis indicates an imputed range of values per share of Old Line Bancshares common stock of $17.17 to $46.97 when applying the price to earnings multiples to the financial forecasts and $20.97 to $49.53 when applying the multiples of tangible book value to the financial forecasts.

Earnings Per Share Multiples

 

    Earnings Per Share Multiple  

Discount Rate

  10.0x     12.0x     14.0x     16.0x      18.0x      20.0x      22.0x  
9.00%   $ 22.72     $ 26.76     $ 30.80     $ 34.85      $ 38.89      $ 42.93      $ 46.97  
10.00%   $ 21.66     $ 25.50     $ 29.34     $ 33.19      $ 37.03      $ 40.87      $ 44.72  
11.00%   $ 20.65     $ 24.31     $ 27.97     $ 31.62      $ 35.28      $ 38.94      $ 42.59  
12.00%   $ 19.71     $ 23.19     $ 26.67     $ 30.15      $ 33.63      $ 37.11      $ 40.59  
13.00%   $ 18.81     $ 22.13     $ 25.44     $ 28.75      $ 32.07      $ 35.38      $ 38.69  
14.00%   $ 17.97     $ 21.12     $ 24.28     $ 27.44      $ 30.59      $ 33.75      $ 36.91  
15.00%   $ 17.17     $ 20.18     $ 23.18     $ 26.19      $ 29.20      $ 32.21      $ 35.22  

Tangible Book Value Multiples

 

    Tangible Book Value Per Share Multiple  

Discount Rate

  140.0%     160.0%     180.0%     200.0%      220.0%      240.0%      260.0%  
9.00%   $ 27.83     $ 31.45     $ 35.06     $ 38.68      $ 42.30      $ 45.91      $ 49.53  
10.00%   $ 26.51     $ 29.95     $ 33.39     $ 36.83      $ 40.27      $ 43.71      $ 47.15  
11.00%   $ 25.27     $ 28.55     $ 31.82     $ 35.09      $ 38.36      $ 41.63      $ 44.91  
12.00%   $ 24.10     $ 27.22     $ 30.33     $ 33.45      $ 36.56      $ 39.68      $ 42.79  
13.00%   $ 23.00     $ 25.97     $ 28.93     $ 31.90      $ 34.86      $ 37.83      $ 40.79  
14.00%   $ 21.96     $ 24.78     $ 27.61     $ 30.43      $ 33.26      $ 36.08      $ 38.90  
15.00%   $ 20.97     $ 23.66     $ 26.35     $ 29.05      $ 31.74      $ 34.43      $ 37.12  

Davidson also considered and discussed with the Wesbanco board of directors how this analysis would be affected by changes in the underlying assumptions, including variations with respect to net income. To illustrate this impact, Davidson performed a similar analysis assuming Old Line Bancshares estimated earnings per share in 2024 varied from 20.00% above projections to 20.00% below projections. This analysis resulted in the following range of per share values for Old Line Bancshares common stock, using the same price to earnings multiples of 10.0x to 22.0x and a discount rate of 12.00%.

 

Variance

to 2024

    EPS    

  Earnings Per Share Multiple  
  10.0x     12.0x     14.0x     16.0x     18.0x     20.0x     22.0x  
20.00%   $ 23.19     $ 27.36     $ 31.54     $ 35.71     $ 39.89     $ 44.07     $ 48.24  
15.00%   $ 22.32     $ 26.32     $ 30.32     $ 34.32     $ 38.32     $ 42.33     $ 46.33  
10.00%   $ 21.45     $ 25.27     $ 29.10     $ 32.93     $ 36.76     $ 40.59     $ 44.41  
5.00%   $ 20.58     $ 24.23     $ 27.88     $ 31.54     $ 35.19     $ 38.85     $ 42.50  
0.00%   $ 19.71     $ 23.19     $ 26.67     $ 30.15     $ 33.63     $ 37.11     $ 40.59  
-5.00%   $ 18.84     $ 22.14     $ 25.45     $ 28.75     $ 32.06     $ 35.37     $ 38.67  
-10.00%   $ 17.97     $ 21.10     $ 24.23     $ 27.36     $ 30.49     $ 33.63     $ 36.76  
-15.00%   $ 17.10     $ 20.05     $ 23.01     $ 25.97     $ 28.93     $ 31.89     $ 34.84  
-20.00%   $ 16.23     $ 19.01     $ 21.79     $ 24.58     $ 27.36     $ 30.15     $ 32.93  

Net Present Value Analysis for Wesbanco

Davidson performed an analysis that estimated the net present value per share of Wesbanco common stock under various circumstances. The analysis assumed: (i) Wesbanco performed in accordance with publicly available analyst earnings estimates for the years ending December 31, 2019 and December 31, 2020, and (ii) an

 

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estimated long-term growth rate for the years thereafter, as discussed with and confirmed by Wesbanco management. To approximate the terminal value of Wesbanco common stock at December 31, 2024, Davidson applied price to forward earnings multiples of 10.0x to 22.0x and multiples of tangible book value ranging from 140.0% to 260.0%. The income streams and terminal values were then discounted to present values using different discount rates ranging from 7.00% to 13.00% chosen to reflect different assumptions regarding required rates of return of holders or prospective buyers of Wesbanco’s common stock. In evaluating the discount rate, Davidson used industry standard methods of adding the current risk-free rate, which is based on the 20-year Treasury yield, plus the published Duff & Phelps Industry Equity Risk Premium and plus the published Duff & Phelps Size Premium.

At the July 23, 2019 Wesbanco board of directors meeting, Davidson noted that the net present value analysis is a widely used valuation methodology, but the results of such methodology are highly dependent upon the numerous assumptions that must be made, and the results thereof are not necessarily indicative of actual values or future results.

As illustrated in the following tables, the analysis indicates an imputed range of values per share of Wesbanco common stock of $27.69 to $70.45 when applying the price to forward earnings multiples to the financial forecasts and $32.06 to $70.66 when applying the multiples of tangible book value to the financial forecasts.

Earnings Per Share Multiples

 

    Earnings Per Share Multiple  

Discount Rate

  10.0x     12.0x     14.0x     16.0x      18.0x      20.0x      22.0x  
7.00%   $ 34.86     $ 40.79     $ 46.72     $ 52.66      $ 58.59      $ 64.52      $ 70.45  
8.00%   $ 33.51     $ 39.20     $ 44.89     $ 50.58      $ 56.27      $ 61.95      $ 67.64  
9.00%   $ 32.23     $ 37.69     $ 43.15     $ 48.60      $ 54.06      $ 59.52      $ 64.97  
10.00%   $ 31.01     $ 36.25     $ 41.49     $ 46.72      $ 51.96      $ 57.20      $ 62.43  
11.00%   $ 29.85     $ 34.88     $ 39.91     $ 44.93      $ 49.96      $ 54.99      $ 60.02  
12.00%   $ 28.75     $ 33.57     $ 38.40     $ 43.23      $ 48.06      $ 52.89      $ 57.72  
13.00%   $ 27.69     $ 32.33     $ 36.97     $ 41.61      $ 46.25      $ 50.88      $ 55.52  

Tangible Book Value Multiples

 

    Tangible Book Value Per Share Multiple  

Discount Rate

  140.0%     160.0%     180.0%     200.0%      220.0%      240.0%      260.0%  
7.00%   $ 40.45     $ 45.48     $ 50.52     $ 55.55      $ 60.59      $ 65.62      $ 70.66  
8.00%   $ 38.87     $ 43.70     $ 48.53     $ 53.36      $ 58.18      $ 63.01      $ 67.84  
9.00%   $ 37.37     $ 42.00     $ 46.63     $ 51.27      $ 55.90      $ 60.53      $ 65.16  
10.00%   $ 35.94     $ 40.39     $ 44.83     $ 49.28      $ 53.72      $ 58.17      $ 62.61  
12.00%   $ 34.59     $ 38.85     $ 43.12     $ 47.39      $ 51.66      $ 55.92      $ 60.19  
12.00%   $ 33.29     $ 37.39     $ 41.49     $ 45.59      $ 49.69      $ 53.78      $ 57.88  
13.00%   $ 32.06     $ 36.00     $ 39.93     $ 43.87      $ 47.81      $ 51.75      $ 55.68  

 

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Davidson also considered and discussed with the Wesbanco board of directors how this analysis would be affected by changes in the underlying assumptions, including variations with respect to net income. To illustrate this impact, Davidson performed a similar analysis assuming Wesbanco estimated earnings per share in 2024 varied from 20.00% above projections to 20.00% below projections. This analysis resulted in the following range of per share values for Wesbanco common stock, using the same price to forward earnings multiples of 10.0x to 22.0x and a discount rate of 10.00%.

 

Variance

to 2024

    EPS    

  Earnings Per Share Multiple  
  10.0x     12.0x     14.0x     16.0x     18.0x     20.0x     22.0x  
20.00%   $ 36.25     $ 42.53     $ 48.82     $ 55.10     $ 61.39     $ 67.67     $ 73.95  
15.00%   $ 34.94     $ 40.96     $ 46.98     $ 53.01     $ 59.03     $ 65.05     $ 71.07  
10.00%   $ 33.63     $ 39.39     $ 45.15     $ 50.91     $ 56.67     $ 62.43     $ 68.19  
5.00%   $ 32.32     $ 37.82     $ 43.32     $ 48.82     $ 54.32     $ 59.81     $ 65.31  
0.00%   $ 31.01     $ 36.25     $ 41.49     $ 46.72     $ 51.96     $ 57.20     $ 62.43  
-5.00%   $ 29.70     $ 34.68     $ 39.65     $ 44.63     $ 49.60     $ 54.58     $ 59.55  
-10.00%   $ 28.39     $ 33.11     $ 37.82     $ 42.53     $ 47.25     $ 51.96     $ 56.67  
-15.00%   $ 27.09     $ 31.54     $ 35.99     $ 40.44     $ 44.89     $ 49.34     $ 53.79  
-20.00%   $ 25.78     $ 29.97     $ 34.15     $ 38.34     $ 42.53     $ 46.72     $ 50.91  

Illustrative Net Present Value Analysis for Pro Forma Wesbanco

For illustrative purposes, Davidson performed an analysis that estimated the net present value per share of Wesbanco common stock under various circumstances, including the impact of the merger with Old Line Bancshares. The analysis assumed (i) Wesbanco performed in accordance with publicly available analyst earnings estimates for the years ending December 31, 2019 and December 31, 2020, (ii) an estimated long-term growth rate for the years thereafter, as discussed with and confirmed by Wesbanco management, and (iii) the pro forma financial impact of the merger with Old Line Bancshares including the cost savings estimates, purchase accounting adjustments and transaction expenses, as discussed with and confirmed by Wesbanco management. The analysis also assumed (i) Old Line Bancshares performed in accordance with publicly available analyst earnings estimates for the years ending December 31, 2019 and December 31, 2020, and (ii) an estimated long-term growth rate for the years thereafter, as discussed with and confirmed by Wesbanco management. To approximate the terminal value of Wesbanco common stock at December 31, 2024, Davidson applied price to forward earnings multiples of 10.0x to 22.0x and multiples of tangible book value ranging from 140.0% to 260.0%. The income streams and terminal values were then discounted to present values using different discount rates ranging from 7.00% to 13.00% chosen to reflect different assumptions regarding required rates of return of holders or prospective buyers of Wesbanco’s common stock. In evaluating the discount rate, Davidson used industry standard methods of adding the current risk-free rate, which is based on the 20-year Treasury yield, plus the published Duff & Phelps Industry Equity Risk Premium and plus the published Duff & Phelps Size Premium.

At the July 23, 2019 Wesbanco board of directors meeting, Davidson noted that the net present value analysis is a widely used valuation methodology, but the results of such methodology are highly dependent upon the numerous assumptions that must be made, and the results thereof are not necessarily indicative of actual values or future results.

As illustrated in the following tables, the analysis indicates an imputed range of values per share of Wesbanco common stock of $29.17 to $74.62 when applying the price to forward earnings multiples to the financial forecasts and $32.46 to $71.60 when applying the multiples of tangible book value to the financial forecasts.

 

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Earnings Per Share Multiples

 

    Earnings Per Share Multiple  

Discount Rate

  10.0x     12.0x     14.0x     16.0x      18.0x      20.0x      22.0x  
7.00%   $ 36.75     $ 43.06     $ 49.37     $ 55.68      $ 61.99      $ 68.31      $ 74.62  
8.00%   $ 35.33     $ 41.38     $ 47.43     $ 53.48      $ 59.53      $ 65.59      $ 71.64  
9.00%   $ 33.97     $ 39.78     $ 45.58     $ 51.39      $ 57.19      $ 63.00      $ 68.80  
10.00%   $ 32.68     $ 38.25     $ 43.83     $ 49.40      $ 54.97      $ 60.54      $ 66.11  
11.00%   $ 31.46     $ 36.80     $ 42.15     $ 47.50      $ 52.85      $ 58.20      $ 63.55  
12.00%   $ 30.29     $ 35.42     $ 40.56     $ 45.70      $ 50.83      $ 55.97      $ 61.11  
13.00%   $ 29.17     $ 34.11     $ 39.04     $ 43.98      $ 48.91      $ 53.85      $ 58.78  

Tangible Book Value Multiples

 

    Tangible Book Value Per Share Multiple  

Discount Rate

  140.0%     160.0%     180.0%     200.0%      220.0%      240.0%      260.0%  
7.00%   $ 40.96     $ 46.07     $ 51.17     $ 56.28      $ 61.39      $ 66.50      $ 71.60  
8.00%   $ 39.36     $ 44.26     $ 49.16     $ 54.05      $ 58.95      $ 63.85      $ 68.75  
9.00%   $ 37.84     $ 42.54     $ 47.24     $ 51.94      $ 56.64      $ 61.34      $ 66.03  
10.00%   $ 36.40     $ 40.90     $ 45.41     $ 49.92      $ 54.43      $ 58.94      $ 63.45  
11.00%   $ 35.02     $ 39.35     $ 43.68     $ 48.01      $ 52.34      $ 56.67      $ 60.99  
12.00%   $ 33.71     $ 37.87     $ 42.02     $ 46.18      $ 50.34      $ 54.50      $ 58.65  
13.00%   $ 32.46     $ 36.45     $ 40.45     $ 44.44      $ 48.44      $ 52.43      $ 56.43  

Davidson also considered and discussed with the Wesbanco board of directors how this analysis would be affected by changes in the underlying assumptions, including variations with respect to net income. To illustrate this impact, Davidson performed a similar analysis assuming Wesbanco’s pro forma estimated earnings per share in 2024 varied from 20.00% above projections to 20.00% below projections. This analysis resulted in the following range of per share values for Wesbanco common stock, using the same price to forward earnings multiples of 10.0x to 22.0x, and using a discount rate of 10.00%.

 

Variance

to 2024

    EPS    

  Earnings Per Share Multiple  
  10.0x     12.0x     14.0x     16.0x     18.0x     20.0x     22.0x  
20.00%   $ 38.25     $ 44.94     $ 51.63     $ 58.31     $ 65.00     $ 71.68     $ 78.37  
15.00%   $ 36.86     $ 43.27     $ 49.68     $ 56.08     $ 62.49     $ 68.90     $ 75.30  
10.00%   $ 35.47     $ 41.60     $ 47.73     $ 53.85     $ 59.98     $ 66.11     $ 72.24  
5.00%   $ 34.08     $ 39.93     $ 45.78     $ 51.63     $ 57.47     $ 63.32     $ 69.17  
0.00%   $ 32.68     $ 38.25     $ 43.83     $ 49.40     $ 54.97     $ 60.54     $ 66.11  
-5.00%   $ 31.29     $ 36.58     $ 41.88     $ 47.17     $ 52.46     $ 57.75     $ 63.05  
-10.00%   $ 29.90     $ 34.91     $ 39.93     $ 44.94     $ 49.95     $ 54.97     $ 59.98  
-15.00%   $ 28.51     $ 33.24     $ 37.98     $ 42.71     $ 47.45     $ 52.18     $ 56.92  
-20.00%   $ 27.11     $ 31.57     $ 36.03     $ 40.48     $ 44.94     $ 49.40     $ 53.85  

Financial Impact Analysis

Davidson performed pro forma merger analyses that combined projected income statement and balance sheet information of Wesbanco and Old Line Bancshares. Assumptions regarding the accounting treatment, acquisition adjustments and cost savings were used to calculate the financial impact that the merger would have on certain projected financial results of Old Line Bancshares. In the course of this analysis, Davidson used the publicly available analyst earnings estimates for Wesbanco for the years ending December 31, 2019 and December 31, 2020, and used publicly available analyst earnings estimates for Old Line Bancshares for the years ending December 31, 2019 and December 31, 2020. This analysis indicated that the merger is expected to be

 

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accretive to Wesbanco’s estimated earnings per share beginning in 2020, after excluding non-recurring transaction-related expenses. The analysis also indicated that the merger is expected to be dilutive to tangible book value per share for Wesbanco and that Wesbanco would maintain capital ratios in excess of those required for Wesbanco to be considered well-capitalized under existing regulations. For all of the above analyses, the actual results achieved by Wesbanco and Old Line Bancshares prior to and following the merger will vary from the projected results, and the variations may be material.

Davidson prepared its analyses for purposes of providing its opinion to Wesbanco’s board of directors as to the fairness, from a financial point of view, of the merger consideration to be paid to the holders of Old Line Bancshares’ common stock in the proposed merger and to assist Wesbanco’s board of directors in analyzing the proposed merger. The analyses do not purport to be appraisals or necessarily reflect the prices at which businesses or securities actually may be sold. Analyses based upon forecasts of future results are not necessarily indicative of actual future results, which may be significantly more or less favorable than those suggested by these analyses. Because these analyses are inherently subject to uncertainty, being based upon numerous factors or events beyond the control of the parties and their respective advisors, none of Wesbanco, Old Line Bancshares or Davidson or any other person assumes responsibility if future results are materially different from those forecasted.

Davidson’s opinion was one of many factors considered by the Wesbanco’s board of directors in its evaluation of the merger and should not be viewed as determinative of the views of the board of directors of Wesbanco or management with respect to the merger or the merger consideration.

Davidson and its affiliates, as part of their investment banking business, are continually engaged in performing financial analyses with respect to businesses and their securities in connection with mergers and acquisitions, negotiated underwritings, competitive biddings, secondary distributions of listed and unlisted securities, private placements and other transactions. Davidson acted as financial advisor to Wesbanco in connection with, and participated in certain negotiations leading to the merger. Davidson is a full service securities firm engaged, either directly or through its affiliates, in securities trading, investment management, financial planning and benefits counseling, financing and brokerage activities for both companies and individuals. In the ordinary course of these activities, Davidson and its affiliates may provide such services to Wesbanco, Old Line Bancshares and their respective affiliates, may actively trade the debt and equity securities (or related derivative securities) of Wesbanco and Old Line Bancshares for their own account and for the accounts of their customers and may at any time hold long and short positions of such securities. Wesbanco selected Davidson as its financial advisor because it is a recognized investment banking firm that has substantial experience in transactions similar to the merger. Pursuant to a letter agreement executed on February 27, 2019, Wesbanco engaged Davidson as its financial advisor in connection with the contemplated transaction. Pursuant to the terms of the engagement letter, Wesbanco agreed to pay Davidson a cash fee of $500,000 concurrently with the rendering of its opinion and a $25,000 retainer paid upon execution of the engagement letter. Wesbanco will pay to Davidson at the time of closing of the merger a contingent cash fee equal to 0.60% of the aggregate consideration, less than $500,000 fee paid in connection with the opinion and $25,000 fee paid in connection with the retainer. Wesbanco has also agreed to reimburse Davidson for all reasonable out-of-pocket expenses, including fees of counsel, and to indemnify Davidson and certain related persons against specified liabilities, including liabilities under the federal securities laws, relating to or arising out of its engagement.

Davidson has, in the past, provided certain investment banking services to Wesbanco and its affiliates, has had a material relationship with Wesbanco and its affiliates and has received compensation and reimbursement of out-of-pocket expenses for such services. During the two years preceding the date of the opinion, Davidson received compensation for acting as Wesbanco’s financial advisor on the acquisition of First Sentry Bancshares, Inc. Additionally, Davidson may provide investment banking services to the combined company in the future and may receive future compensation.

 

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Old Line Bancshares’ Reasons for the Merger and Recommendation of the Old Line Bancshares Board of Directors

In reaching its decision to approve and adopt the merger agreement and approve the transactions contemplated by the merger agreement, including the merger, and to recommend that Old Line Bancshares’ stockholders approve the merger, the Old Line Bancshares board of directors evaluated the merger in consultation with Old Line Bancshares’ management, as well as Old Line Bancshares’ outside financial and legal advisors, and considered a number of factors, including the following:

 

   

information with respect to the businesses, operations, financial condition, prospects, capital levels, and asset quality of Old Line Bancshares and Wesbanco (including, with respect to Wesbanco, information obtained through due diligence), both individually and as a combined company;

 

   

the perceived risks, uncertainties, and prospects of Old Line Bancshares remaining independent, including the challenges of the current market, operating, regulatory, and low interest rate environment, perceived risks related to the current economic cycle and continued volatility in the equity markets, the age of Old Line Bancshares current management and leadership, competition in Old Line Bank’s market area, and the increasing costs of maintaining historical growth and a competitive edge in the financial services industry;

 

   

Old Line Bancshares’ board of directors’ review, with the assistance of Old Line Bancshares’ management, of strategic alternatives to the merger, including the possibility of remaining independent and the challenges Old Line Bancshares would face in continuing to grow at a rate similar to its historical growth rate;

 

   

the increasing importance of operational scale and financial resources in maintaining efficiency and remaining competitive over the long-term and in being able to capitalize on technological developments that may impact industry competitive conditions;

 

   

the historical, current, and prospective merger market and the board’s belief that future merger opportunities for Old Line Bancshares might not be as favorable as the opportunity presented by the merger with Wesbanco;

 

   

Old Line Bancshares’ ability to terminate the merger agreement if the trading price of Wesbanco’s common stock declines under circumstances provided for in the merger agreement, as more fully described under the section entitled “— Termination of the Merger Agreement”;

 

   

the market values of Old Line Bancshares’ common stock and Wesbanco’s common stock prior to the execution of the merger agreement and the implied value of the merger consideration relative to the market value and book value of Old Line Bancshares’ common stock and Old Line Bancshares’ earnings;

 

   

the fact that the consideration that Old Line Bancshares’ stockholders will receive in the merger is in the form of Wesbanco common stock and the potential for Old Line Bancshares’ stockholders to participate in the future earnings and growth of the combined company, and the prospects for future appreciation of Wesbanco’s common stock based on, among other things, its performance to date, strong balance sheet, and liquidity position;

 

   

the expected receipt by Old Line Bancshares stockholders, after the effective time of the merger, of dividends declared and paid by Wesbanco on shares of Wesbanco common stock consistent with historical levels, which on a pro forma basis are significantly in excess of Old Line Bancshares’ historical dividends;

 

   

the expected pro forma financial impact of the merger, taking into account anticipated cost savings and other factors, including the fact that the merger is expected to be accretive to Wesbanco;

 

   

The culture and business model of Wesbanco Bank, which the Old Line Bancshares board of directors believes are complimentary to Old Line Bank’s culture and business model, and the perceived

 

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competence, experience, and community banking philosophy of Wesbanco Bank’s management team, both of which the board believed should increase the likelihood that Old Line Bank will be successfully integrated with Wesbanco Bank;

 

   

the impact of the merger on employees, customers, and communities served by Old Line Bank and the expectation that the combined bank will continue to provide high-quality and enhanced service to the communities and customers currently served by Old Line Bank;

 

   

the protections and benefits expected to be provided by Wesbanco to Old Line Bancshares employees, including those employees who will be adversely affected by the merger;

 

   

the continued representation of Old Line Bancshares on Wesbanco’s board of directors after the effective time of the merger through the appointment of two directors currently serving as Old Line Bancshares directors to the Wesbanco board of directors;

 

   

the geographic footprint of Wesbanco Bank and Old Line Bank and the expectation that, given the lack of branch overlap, no Old Line Bank branches should be closed as a result of the merger;

 

   

Wesbanco’s successful acquisition track record, excellent regulatory relationships, and the likelihood of receiving the required regulatory and stockholder approvals and completing the merger in a timely manner;

 

   

Old Line Bancshares’ understanding that the merger will constitute a “reorganization” under Section 368(a) of the Code and that, as a result, Old Line Bancshares’ stockholders will not recognize gain or loss with respect to their receipt of the merger consideration; and

 

   

the financial presentation, dated July 23, 2019, of KBW to the Old Line Bancshares board of directors and the opinion, dated July 23, 2019, of KBW to the Old Line Bancshares board of directors as to the fairness, from a financial point of view and as of the date of the opinion, to the holders of Old Line Bancshares common stock of the exchange ratio in the proposed merger, as more fully described below under “— Opinion of Old Line Bancshares’ Financial Advisor.”

The Old Line Bancshares board of directors also considered potential risks associated with the merger when makings its decision to approve the merger and the merger agreement, including:

 

   

with the stock consideration based on a fixed exchange ratio, the risk that the consideration to be paid to Old Line Bancshares’ stockholders could be adversely affected by a decrease in the trading price of Wesbanco’s common stock, either before or after the completion of the merger;

 

   

the risk that the terms of the merger agreement, including the provisions generally prohibiting Old Line Bancshares from soliciting, engaging in discussions, or furnishing information with respect to alternative acquisition transactions, and those relating to the payment of a termination fee under specified circumstances, which were required by Wesbanco as a condition to its willingness to enter into the transaction, could have the effect of discouraging other parties that might be interested in a transaction with Old Line Bancshares from proposing such a transaction;

 

   

the potential for diversion of management and employee attention, and for employee attrition, during the period prior to the completion of the merger and the potential effect of the pending merger on Old Line Bancshares’ business and relations with customers, service providers, and other stakeholders, whether or not the merger is completed;

 

   

the restrictions on the conduct of Old Line Bancshares’ business prior to the completion of the merger set forth in the merger agreement, which could delay or prevent Old Line Bancshares from undertaking business opportunities that may arise or taking certain other actions that it would otherwise take to operate its business absent the merger;

 

   

the possibility that the expected benefits and synergies sought in the merger, including anticipated costs savings, may not be realized or may not be realized within the expected time period, particularly given the assumed benefits and synergies;

 

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the challenges of successfully integrating Old Line Bancshares’ business, operations, and workforce with those of Wesbanco’s, which could affect the post-merger success of the combined company;

 

   

the fact that the interests of Old Line Bancshares’ directors and executive officers may be different from, or in addition to, the interests of Old Line Bancshares’ other stockholders;

 

   

the risk that, while Old Line Bancshares expects that the merger will be consummated, there can be no assurance that all conditions to the parties’ obligations to complete the merger will be satisfied and, as a result, that the merger may not be consummated;

 

   

the risk that necessary regulatory approvals may not be obtained in a timely manner or without the imposition of unacceptable conditions;

 

   

the challenges in absorbing the effect of any failure to complete the merger, including potential payment of the termination fee, the existence of a tail period for the termination fee, and market reactions; and

 

   

the risk of litigation arising from stockholders in respect of the merger agreement or transactions contemplated thereby.

The discussion and factors considered by Old Line Bancshares’ board of directors is not intended to be exhaustive, but rather includes all material factors it considered. Old Line Bancshares’ board of directors considered these factors as a whole, and considered them to be favorable to, and supportive of, its determination. Old Line Bancshares’ board of directors did not consider it practical, nor did it attempt, to quantify, rank, or otherwise assign relative weights to the specific factors that it considered in reaching its decision. In considering the factors described above, individual members of Old Line Bancshares’ board of directors may have given different weights or priority to different factors.

Old Line Bancshares’ board of directors realized there can be no assurance about future results, including results expected or considered in the factors listed above. The board of directors concluded, however, that the potential positive factors outweighed the potential risks of completing the merger. It should be noted that this explanation of Old Line Bancshares’ board of directors’ reasoning and all other information presented in this section is forward-looking in nature and, therefore, should be read in light of the factors described under “Cautionary Statement Regarding Forward-Looking Statements.”

Opinion of Old Line Bancshares’ Financial Advisor

Old Line Bancshares engaged KBW to render financial advisory and investment banking services to Old Line Bancshares, including an opinion to the Old Line Bancshares board of directors as to the fairness, from a financial point of view, to the holders of Old Line Bancshares common stock of the exchange ratio in the proposed merger of Old Line Bancshares with and into Wesbanco. Old Line Bancshares selected KBW because KBW is a nationally recognized investment banking firm with substantial experience in transactions similar to the merger. As part of its investment banking business, KBW is continually engaged in the valuation of financial services businesses and their securities in connection with mergers and acquisitions.

As part of its engagement, representatives of KBW attended the meeting of the Old Line Bancshares board of directors held on July 23, 2019, at which the Old Line Bancshares board of directors evaluated the proposed merger. At this meeting, KBW reviewed the financial aspects of the proposed merger and rendered to the Old Line Bancshares board an opinion to the effect that, as of such date and subject to the procedures followed, assumptions made, matters considered, and qualifications and limitations on the review undertaken by KBW as set forth in its opinion, the exchange ratio in the proposed merger was fair, from a financial point of view, to the holders of Old Line Bancshares common stock. The Old Line Bancshares board of directors approved the merger agreement at this meeting.

The description of the opinion set forth herein is qualified in its entirety by reference to the full text of the opinion, which is attached as Annex C to this document and is incorporated herein by reference, and describes

 

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the procedures followed, assumptions made, matters considered, and qualifications and limitations on the review undertaken by KBW in preparing the opinion.

KBW’s opinion speaks only as of the date of the opinion. The opinion was for the information of, and was directed to, the Old Line Bancshares board of directors (in its capacity as such) in connection with its consideration of the financial terms of the merger. The opinion addressed only the fairness, from a financial point of view, of the exchange ratio in the merger to the holders of Old Line Bancshares common stock. It did not address the underlying business decision of Old Line Bancshares to engage in the merger or enter into the merger agreement or constitute a recommendation to the Old Line Bancshares board of directors in connection with the merger, and it does not constitute a recommendation to any holder of Old Line Bancshares common stock or any shareholder of any other entity as to how to vote in connection with the merger or any other matter, nor does it constitute a recommendation regarding whether or not any such shareholder should enter into a voting, shareholders’ or affiliates’ agreement with respect to the merger or exercise any dissenters’ or appraisal rights that may be available to such shareholder.

KBW’s opinion was reviewed and approved by KBW’s Fairness Opinion Committee in conformity with its policies and procedures established under the requirements of Rule 5150 of the Financial Industry Regulatory Authority.

In connection with the opinion, KBW reviewed, analyzed and relied upon material bearing upon the financial and operating condition of Old Line Bancshares and Wesbanco and bearing upon the merger, including, among other things:

 

   

a draft of the merger agreement dated July 22, 2019 (the most recent draft then made available to KBW);

 

   

the audited financial statements and the Annual Reports on Form 10-K for the three fiscal years ended December 31, 2018 of Old Line Bancshares;

 

   

the unaudited quarterly financial statements and Quarterly Report on Form 10-Q for the quarter ended March 31, 2019 of Old Line Bancshares;

 

   

certain draft and unaudited quarterly financial results for the period ended June 30, 2019 of Old Line Bancshares (provided to KBW by representatives of Old Line Bancshares);

 

   

the audited financial statements and Annual Reports on Form 10-K for the three fiscal years ended December 31, 2018 of Wesbanco;

 

   

the unaudited quarterly financial statements and Quarterly Report on Form 10-Q for the quarter ended March 31, 2019 of Wesbanco;

 

   

certain draft and unaudited quarterly financial results for the period ended June 30, 2019 of Wesbanco (provided to KBW by representatives of Wesbanco);

 

   

certain regulatory filings of Old Line Bancshares and Wesbanco and their respective subsidiaries, including the quarterly reports on Form FR Y-9C and call reports filed with respect to each quarter during the three-year period ended December 31, 2018 as well as the quarter ended March 31, 2019;

 

   

certain other interim reports and other communications of Old Line Bancshares and Wesbanco to their respective shareholders; and

 

   

other financial information concerning the businesses and operations of Old Line Bancshares and Wesbanco that was furnished to KBW by Old Line Bancshares and Wesbanco or which KBW was otherwise directed to use for purposes of KBW’s analyses.

 

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KBW’s consideration of financial information and other factors that it deemed appropriate under the circumstances or relevant to its analyses included, among others, the following:

 

   

the historical and current financial position and results of operations of Old Line Bancshares and Wesbanco;

 

   

the assets and liabilities of Old Line Bancshares and Wesbanco;

 

   

the nature and terms of certain other merger transactions and business combinations in the banking industry;

 

   

a comparison of certain financial and stock market information for Old Line Bancshares and Wesbanco with similar information for certain other companies the securities of which were publicly traded;

 

   

publicly available consensus “street estimates” of Old Line Bancshares, as well as assumed long-term Old Line Bancshares growth rates provided to KBW by Old Line Bancshares management, all of which information was discussed with KBW by Old Line Bancshares management and used and relied upon by KBW at the direction of such management and with the consent of the Old Line Bancshares board of directors;

 

   

publicly available consensus “street estimates” of Wesbanco, as well as assumed long-term Wesbanco growth rates provided to KBW by Wesbanco management, all of which information was discussed with KBW by Wesbanco management and used and relied upon by KBW based on such discussions, at the direction of Old Line Bancshares management and with the consent of the Old Line Bancshares board of directors; and

 

   

estimates regarding certain pro forma financial effects of the merger on Wesbanco (including, without limitation, the cost savings and related expenses expected to result or be derived from the merger) that were prepared by, and provided to and discussed with KBW by, Wesbanco management and that were used and relied upon by KBW based on such discussions, at the direction of Old Line Bancshares management and with the consent of the Old Line Bancshares board of directors.

KBW also performed such other studies and analyses as it considered appropriate and took into account its assessment of general economic, market and financial conditions and its experience in other transactions, as well as its experience in securities valuation and knowledge of the banking industry generally. KBW also participated in discussions held by the managements of Old Line Bancshares and Wesbanco regarding the past and current business operations, regulatory relations, financial condition and future prospects of their respective companies and such other matters as KBW deemed relevant to its inquiry. KBW was not requested to, and did not, assist Old Line Bancshares with soliciting indications of interest from third parties regarding a potential transaction with Old Line Bancshares.

In conducting its review and arriving at its opinion, KBW relied upon and assumed the accuracy and completeness of all of the financial and other information that was provided to it or that was publicly available and KBW did not independently verify the accuracy or completeness of any such information or assume any responsibility or liability for such verification, accuracy or completeness. KBW relied upon the management of Old Line Bancshares as to the reasonableness and achievability of the publicly available consensus “street estimates” of Old Line Bancshares and the assumed Old Line Bancshares long-term growth rates referred to above (and the assumptions and bases therefor), and KBW assumed that all such information was reasonably prepared and represented, or in the case of the Old Line Bancshares “street estimates” referred to above that such estimates were consistent with, the best currently available estimates and judgments of such management and that the forecasts, projections and estimates reflected in such information would be realized in the amounts and in the time periods estimated. KBW further relied, with the consent of Old Line Bancshares, upon Wesbanco management as to the reasonableness and achievability of the publicly available consensus “street estimates” of Wesbanco, the assumed Wesbanco long-term growth rates, and the estimates regarding certain pro forma financial effects of the merger on Wesbanco (including, without limitation, the cost savings and related expenses

 

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expected to result or be derived from the merger), all as referred to above (and the assumptions and bases for all such information), and KBW assumed that all such information was reasonably prepared and represented, or in the case of the Wesbanco “street estimates” referred to above that such estimates were consistent with, the best currently available estimates and judgments of Wesbanco management and that the forecasts, projections and estimates reflected in such information would be realized in the amounts and in the time periods estimated.

It is understood that the portion of the foregoing financial information of Old Line Bancshares and Wesbanco that was provided to KBW was not prepared with the expectation of public disclosure and that all of the foregoing financial information, including the publicly available consensus “street estimates” of Old Line Bancshares and Wesbanco, was based on numerous variables and assumptions that are inherently uncertain (including, without limitation, factors related to general economic and competitive conditions) and, accordingly, actual results could vary significantly from those set forth in such information. KBW assumed, based on discussions with the respective managements of Old Line Bancshares and Wesbanco and with the consent of the Old Line Bancshares board of directors, that all such information provided a reasonable basis upon which KBW could form its opinion and KBW expressed no view as to any such information or the assumptions or bases therefor. KBW relied on all such information without independent verification or analysis and did not in any respect assume any responsibility or liability for the accuracy or completeness thereof.

KBW also assumed that there were no material changes in the assets, liabilities, financial condition, results of operations, business or prospects of either Old Line Bancshares or Wesbanco since the date of the last financial statements of each such entity that were made available to KBW. KBW is not an expert in the independent verification of the adequacy of allowances for loan and lease losses and KBW assumed, without independent verification and with Old Line Bancshares’ consent, that the aggregate allowances for loan and lease losses for Old Line Bancshares and Wesbanco are adequate to cover such losses. In rendering its opinion, KBW did not make or obtain any evaluations or appraisals or physical inspection of the property, assets or liabilities (contingent or otherwise) of Old Line Bancshares or Wesbanco, the collateral securing any of such assets or liabilities, or the collectability of any such assets, nor did KBW examine any individual loan or credit files, nor did it evaluate the solvency, financial capability or fair value of Old Line Bancshares or Wesbanco under any state or federal laws, including those relating to bankruptcy, insolvency or other matters. Estimates of values of companies and assets do not purport to be appraisals or necessarily reflect the prices at which companies or assets may actually be sold. Because such estimates are inherently subject to uncertainty, KBW assumed no responsibility or liability for their accuracy.

KBW assumed, in all respects material to its analyses:

 

   

that the merger and any related transactions (including the bank merger) would be completed substantially in accordance with the terms set forth in the merger agreement (the final terms of which KBW assumed would not differ in any respect material to KBW’s analyses from the draft reviewed by KBW and referred to above) with no adjustments to the exchange ratio and with no other consideration or payments in respect of Old Line Bancshares common stock;

 

   

that the representations and warranties of each party in the merger agreement and in all related documents and instruments referred to in the merger agreement were true and correct;

 

   

that each party to the merger agreement and all related documents would perform all of the covenants and agreements required to be performed by such party under such documents;

 

   

that there were no factors that would delay or subject to any adverse conditions, any necessary regulatory or governmental approval for the merger or any related transactions and that all conditions to the completion of the merger and any related transaction would be satisfied without any waivers or modifications to the merger agreement or any of the related documents; and

 

   

that in the course of obtaining the necessary regulatory, contractual, or other consents or approvals for the merger and any related transaction, no restrictions, including any divestiture requirements,

 

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termination or other payments or amendments or modifications, would be imposed that would have a material adverse effect on the future results of operations or financial condition of Old Line Bancshares, Wesbanco or the pro forma entity, or the contemplated benefits of the merger, including without limitation the cost savings and related expenses expected to result or be derived from the merger.

KBW assumed that the merger would be consummated in a manner that complies with the applicable provisions of the Securities Act of 1933, as amended, the Securities Exchange Act of 1934, as amended, and all other applicable federal and state statutes, rules and regulations. KBW was further advised by representatives of Old Line Bancshares that Old Line Bancshares relied upon advice from its advisors (other than KBW) or other appropriate sources as to all legal, financial reporting, tax, accounting and regulatory matters with respect to Old Line Bancshares, Wesbanco, the merger and any related transaction, and the merger agreement. KBW did not provide advice with respect to any such matters.

KBW’s opinion addressed only the fairness, from a financial point of view, as of the date of the opinion, of the exchange ratio in the merger to the holders of Old Line Bancshares common stock. KBW expressed no view or opinion as to any other terms or aspects of the merger or any term or aspect of any related transaction, including without limitation, the form or structure of the merger or any such related transaction, any consequences of the merger or any such related transaction to Old Line Bancshares, its shareholders, creditors or otherwise, or any terms, aspects, merits or implications of any employment, consulting, voting, support, shareholder or other agreements, arrangements or understandings contemplated or entered into in connection with the merger or otherwise. KBW’s opinion was necessarily based upon conditions as they existed and could be evaluated on the date of such opinion and the information made available to KBW through such date. Developments subsequent to the date of KBW’s opinion may have affected, and may affect, the conclusion reached in KBW’s opinion and KBW did not and does not have an obligation to update, revise or reaffirm its opinion. KBW’s opinion did not address, and KBW expressed no view or opinion with respect to:

 

   

the underlying business decision of Old Line Bancshares to engage in the merger or enter into the merger agreement;

 

   

the relative merits of the merger as compared to any strategic alternatives that are, have been or may be available to or contemplated by Old Line Bancshares or the Old Line Bancshares board of directors;

 

   

the fairness of the amount or nature of any compensation to any of Old Line Bancshares’ officers, directors or employees, or any class of such persons, relative to the compensation to the holders of Old Line Bancshares common stock;

 

   

the effect of the merger or any related transaction on, or the fairness of the consideration to be received by, holders of any class of securities of Old Line Bancshares (other than the holders of Old Line Bancshares common stock, solely with respect to the exchange ratio as described in KBW’s opinion and not relative to the consideration to be received by holders of any other class of securities) or holders of any class of securities of Wesbanco or any other party to any transaction contemplated by the merger agreement;

 

   

the actual value of Wesbanco common stock to be issued in the merger;

 

   

the prices, trading range or volume at which Old Line Bancshares common stock or Wesbanco common stock would trade following the public announcement of the merger or the prices, trading range or volume at which Wesbanco common stock would trade following the consummation of the merger;

 

   

any advice or opinions provided by any other advisor to any of the parties to the merger or any other transaction contemplated by the merger agreement; or

 

   

any legal, regulatory, accounting, tax or similar matters relating to Old Line Bancshares, Wesbanco, their respective shareholders, or relating to or arising out of or as a consequence of the merger or any

 

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related transaction (including the bank merger), including whether or not the merger would qualify as a tax-free reorganization for United States federal income tax purposes.

In performing its analyses, KBW made numerous assumptions with respect to industry performance, general business, economic, market and financial conditions and other matters, which are beyond the control of KBW, Old Line Bancshares and Wesbanco. Any estimates contained in the analyses performed by KBW are not necessarily indicative of actual values or future results, which may be significantly more or less favorable than suggested by these analyses. Additionally, estimates of the value of businesses or securities do not purport to be appraisals or to reflect the prices at which such businesses or securities might actually be sold. Accordingly, these analyses and estimates are inherently subject to substantial uncertainty. In addition, KBW’s opinion was among several factors taken into consideration by the Old Line Bancshares board of directors in making its determination to approve the merger agreement and the merger. Consequently, the analyses described below should not be viewed as determinative of the decision of the Old Line Bancshares board of directors with respect to the fairness of the exchange ratio. The type and amount of consideration payable in the merger were determined through negotiation between Old Line Bancshares and Wesbanco and the decision of Old Line Bancshares to enter into the merger agreement was solely that of the Old Line Bancshares board of directors.

The following is a summary of the material financial analyses presented by KBW to the Old Line Bancshares board of directors in connection with its opinion. The summary is not a complete description of the financial analyses underlying the opinion or the presentation made by KBW to the Old Line Bancshares board of directors, but summarizes the material analyses performed and presented in connection with such opinion. The financial analyses summarized below include information presented in tabular format. The tables alone do not constitute a complete description of the financial analyses. The preparation of a fairness opinion is a complex analytic process involving various determinations as to appropriate and relevant methods of financial analysis and the application of those methods to the particular circumstances. Therefore, a fairness opinion is not readily susceptible to partial analysis or summary description. In arriving at its opinion, KBW did not attribute any particular weight to any analysis or factor that it considered, but rather made qualitative judgments as to the significance and relevance of each analysis and factor. Accordingly, KBW believes that its analyses and the summary of its analyses must be considered as a whole and that selecting portions of its analyses and factors or focusing on the information presented below in tabular format, without considering all analyses and factors or the full narrative description of the financial analyses, including the methodologies and assumptions underlying the analyses, could create a misleading or incomplete view of the process underlying its analyses and opinion.

For purposes of the financial analyses described below, KBW utilized an implied transaction value for the merger of $29.22 per outstanding share of Old Line Bancshares common stock, or $500.1 million in the aggregate (inclusive of the implied value of in-the-money Old Line Bancshares stock options), based on the 0.7844x exchange ratio in the proposed merger and the closing price of Wesbanco common stock on July 22, 2019. In addition to the financial analyses described below, KBW reviewed with the Old Line Bancshares board of directors for informational purposes, among other things, an implied transaction multiple for the proposed merger (based on the implied transaction value for the merger of $29.22 per outstanding share of Old Line Bancshares common stock) of 13.4x Old Line Bancshares’ estimated calendar 2019 earnings per share (“EPS”) and 12.2x Old Line Bancshares’ estimated calendar 2020 EPS using the publicly available consensus “street estimate” for Old Line Bancshares available as of July 22, 2019.

Old Line Bancshares Selected Companies Analysis. Using publicly available information, KBW compared the financial performance, financial condition and market performance of Old Line Bancshares to 13 selected major exchange-traded (defined as the New York Stock Exchange, NYSE American and NASDAQ) banks in Washington D.C., Maryland, West Virginia, or Virginia with total assets between $1.5 billion and $10.0 billion.

 

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The selected companies were as follows:

 

American National Bankshares Inc.

C&F Financial Corporation

Carter Bank & Trust

City Holding Company

Community Financial Corporation

Eagle Bancorp, Inc.

  

First Community Bankshares, Inc.

Howard Bancorp, Inc.

MVB Financial Corp.

Premier Financial Bancorp, Inc.

Sandy Spring Bancorp, Inc.

Southern National Bancorp of Virginia, Inc.

Summit Financial Group, Inc.

To perform this analysis, KBW used profitability and other financial information for the most recent completed fiscal quarter (“MRQ”) available or as of the end of such period (which was either March 31, 2019 or June 30, 2019) and market price information as of July 22, 2019. KBW also used 2019 and 2020 EPS estimates taken from publicly available consensus “street estimates” for Old Line Bancshares and the 11 selected companies for which consensus “street estimates” were available. Where consolidated holding company level financial data for the selected companies was unreported, subsidiary bank level data was utilized to calculate ratios. Certain financial data prepared by KBW, and as referenced in the tables presented below, may not correspond to the data presented in Old Line Bancshares’ historical financial statements, or the data prepared by D.A. Davidson presented under the section “The Merger — Opinion of Wesbanco’s Financial Advisor,” as a result of the different periods, assumptions and methods used by KBW to compute the financial data presented.

KBW’s analysis showed the following concerning the financial performance of Old Line Bancshares and the selected companies:

 

           Selected Companies  
     Old Line
Bancshares
    25th
Percentile
    Average     Median     75th
Percentile
 

Core Return on Average Assets(1)

     1.21     0.94     1.25     1.34     1.50

Core Return on Average Tangible Common Equity(1)

     13.30     11.05     12.88     13.87     15.05

Net Interest Margin

     3.49     3.40     3.81     3.61     3.91

Fee Income / Revenue Ratio(2)

     11.6     11.4     18.3     18.6     22.4

Efficiency Ratio

     55.1     63.8     58.6     57.4     51.7

 

(1)

Core income excluded extraordinary items, nonrecurring items, gains/losses on sale of securities and amortization of intangibles.

(2)

Excluded gains/losses on sale of securities.

KBW’s analysis also showed the following concerning the financial condition of Old Line Bancshares and the selected companies:

 

           Selected Companies  
     Old Line
Bancshares
    25th
Percentile
    Average     Median     75th
Percentile
 

Tangible Common Equity / Tangible Assets

     9.46     9.20     9.85     9.49     10.30

Total Capital Ratio

     12.22     13.64     14.63     15.00     15.61

Loans / Deposits

     101.8     89.5     93.5     93.7     98.4

Loan Loss Reserve / Gross Loans

     0.32     0.70     1.00     0.80     1.05

Nonperforming Assets / Loans and OREO

     0.35     2.28     1.85     1.39     0.66

Net Charge-Offs / Average Loans

     (0.00 %)      0.28     0.23     0.11     0.04

 

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In addition, KBW’s analysis showed the following concerning the market performance of Old Line Bancshares and, to the extent publicly available, the selected companies:

 

           Selected Companies  
     Old Line
Bancshares
    25th
Percentile
    Average     Median     75th
Percentile
 

One-Year Stock Price Change

     (26.4 %)      (19.2 %)      (11.8 %)      (12.5 %)      (4.2 %) 

Year-To-Date Stock Price Change

     (1.5 %)      0.3     8.0     10.5     14.0

Stock Price / Tangible Book Value per Share

     1.57x       1.28x       1.54x       1.30x       1.64x  

Stock Price / 2019 EPS Estimate

     11.8x       11.1x       12.9x       12.1x       14.6x  

Stock Price / 2020 EPS Estimate

     10.8x       10.8x       12.2x       11.2x       14.1x  

Dividend Yield

     1.9     1.5     2.2     2.4     2.9

2019 Dividend Payout(1)

     21.9     16.2     23.8     25.6     35.6

 

(1)

Equal to the most recent quarterly dividend annualized divided by 2019 estimated EPS

No company used as a comparison in the above selected companies analysis is identical to Old Line Bancshares. Accordingly, an analysis of these results is not mathematical. Rather, it involves complex considerations and judgments concerning differences in financial and operating characteristics of the companies involved.

Wesbanco Selected Companies Analysis. Using publicly available information, KBW compared the financial performance, financial condition and market performance of Wesbanco to 25 selected major exchange-traded banks in the United States with total assets between $10.0 billion and $15.0 billion. Banks headquartered in Puerto Rico were excluded from the selected companies.

The selected companies were as follows:

 

Ameris Bancorp

Axos Financial, Inc.

Banner Corporation

Berkshire Hills Bancorp, Inc.

CenterState Bank Corporation

Columbia Banking System, Inc.

Community Bank System, Inc.

Customers Bancorp, Inc.

CVB Financial Corp.

First Financial Bancorp.

First Interstate BancSystem, Inc.

First Merchants Corporation

Glacier Bancorp, Inc.

  

Great Western Bancorp, Inc.

Heartland Financial USA, Inc.

Hilltop Holdings Inc.

Independent Bank Group, Inc.

International Bancshares Corporation

Northwest Bancshares, Inc.

Pacific Premier Bancorp, Inc.

Renasant Corporation

TowneBank

Trustmark Corporation

United Community Banks, Inc.

WSFS Financial Corporation

To perform this analysis, KBW used profitability and other financial information for the most recent completed fiscal quarter available or as of the end of such period (which was either March 31, 2019 or June 30, 2019) and market price information as of July 22, 2019. KBW also used 2019 and 2020 EPS estimates taken from publicly available consensus “street estimates” for Wesbanco and the 24 selected companies for which consensus “street estimates” were available. Where consolidated holding company level financial data for the selected companies was unreported, subsidiary bank level data was utilized to calculate ratios. Certain financial data prepared by KBW, and as referenced in the tables presented below, may not correspond to the data presented in Wesbanco’s historical financial statements, or the data prepared by D.A. Davidson presented under the section “The Merger — Opinion of Wesbanco’s Financial Advisor,” as a result of the different periods, assumptions and methods used by KBW to compute the financial data presented.

 

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KBW’s analysis showed the following concerning the financial performance of Wesbanco and the selected companies:

 

           Selected Companies  
     Wesbanco     25th
Percentile
    Average     Median     75th
Percentile
 

Core Return on Average Assets(1)

     1.42     1.25     1.41     1.47     1.61

Core Return on Average Tangible Common Equity(1)

     16.14     13.07     15.40     16.29     18.19

Net Interest Margin

     3.67     3.79     3.97     4.03     4.26

Fee Income / Revenue Ratio(2)

     21.8     15.5     22.5     20.3     24.8

Efficiency Ratio

     55.3     63.6     56.7     54.0     49.8

 

(1)

Core income excluded extraordinary items, nonrecurring items, gains/losses on sale of securities and amortization of intangibles.

(2)

Excluded gain/losses on sale of securities.

KBW’s analysis showed the following concerning the financial condition of Wesbanco and the selected companies:

 

           Selected Companies  
     Wesbanco     25th
Percentile
    Average     Median     75th
Percentile
 

Tangible Common Equity / Tangible Assets

     10.01     8.65     9.77     9.52     10.26

Total Capital Ratio

     16.32     13.09     14.36     14.01     14.79

Loans / Deposits