On July 26, 2024, WesBanco Bank and Premier Bank announced a significant merger to create a $30 billion dollar bank which includes Pennsylvania’s Allegheny and Beaver Counties. The merger is not just a financial transaction but a move that could significantly impact local communities and access to banking services. In this article, we will break down the merger, each bank’s community presence, and their performance in lending to low-moderate income (LMI) borrowers and African American applicants. PCRG has met with the bank's representatives and is working to develop a community engagement process to learn more about the benefits that would result from the merger.
A Quick Overview of the Banks
WesBanco Bank, headquartered in Wheeling, West Virginia, manages $12.5 billion in deposits. With a consistent track record of 'Outstanding' ratings in Community Reinvestment Act (CRA) exams in 2020 and 2023, WesBanco’s commitment to serving its communities has been recognized. Their branch network includes 13 branches in Allegheny County and 8 branches in Beaver County. However, only a small portion of their branches are located in Low-Moderate Income (LMI) areas—7.7% in Allegheny County and 40% in Beaver County.
Premier Bank, headquartered in Defiance, Ohio, is a smaller player with $6.99 billion in deposits and a single branch in Pennsylvania’s Beaver County. Premier received ‘Satisfactory’ ratings in its last two CRA exams, reflecting its effort to meet community credit needs, but with room for improvement. Their lone Pennsylvania branch has a limited deposit market share of 2.11% and is situated in an upper-income census tract.
Branch Distribution and Market Presence
WesBanco’s larger footprint in Allegheny and Beaver Counties gives it an advantage over Premier Bank in Pennsylvania. In Allegheny County, WesBanco holds 0.33% of the deposit market share, which may seem small but positions them strategically with $624.8 million in deposits. In Beaver County, their market share is more significant at 17.49%, making them the third largest bank by deposit market share in the county. Premier Bank, by comparison, has minimal presence in Beaver County with $59 million in deposits, which places it far behind larger competitors like Huntington and First National Bank of Pennsylvania.
Lending to Low-Moderate Income (LMI) Borrowers
WesBanco’s performance in lending to LMI borrowers reveals a mixed picture. In Allegheny County, the bank lent 21-24% of mortgage originations to LMI borrowers from 2020 to 2022. This percentage falls slightly below the median for large banks, which was 30.2% in 2022. While the bank’s overall lending aligns with the 21.9% LMI population in their assessment area, there is still room for improvement, especially in reaching low-income census tracts.
In Beaver County, however, WesBanco has outperformed the median percentage for LMI lending. They lent 43-48% of their mortgage originations to LMI borrowers, well above the 35.37% average for large banks. This success is partly due to the location of 40% of their branches in LMI areas.
On the other hand, Premier Bank’s performance in LMI lending has been inconsistent. With only one branch in Beaver County, Premier lent 17% and 15% to LMI borrowers in 2020 and 2021, respectively, before jumping to 30% in 2022. While this recent increase shows potential, their overall market share and impact remain limited due to their small footprint.
Lending to African American Applicants
One of the more critical areas where both banks have struggled is lending to African American applicants. In Allegheny County, WesBanco’s lending to African Americans ranged from 2.11% to 3.10% from 2020 to 2022, falling below the median of 4% for large banks. Even in Beaver County, WesBanco failed to make significant strides, lending only one loan to African American borrowers in 2020 and none in 2021 or 2022.
Premier Bank’s performance in this area is similarly lacking. The bank made zero loans to African American borrowers in both 2020 and 2022, with only one loan made in 2021. Given the demographic composition of these counties, both banks have considerable room for improvement in serving African American communities.
What This Merger Means for Local Communities
The merger between WesBanco and Premier is set to create a stronger regional bank, potentially expanding access to banking services and products in underserved communities. However, both banks must address gaps in lending to LMI and African American borrowers to ensure they are meeting the needs of the broader community. For WesBanco, this merger is an opportunity to build on its strengths in Beaver County and improve its performance in Allegheny County. For Premier Bank, integrating into WesBanco could provide the resources and branch network needed to serve more customers effectively.
PCRG is working closely with the banks to secure commitments to better lending practices and increased accessibility regarding the merger. As regulators and community members continue to evaluate this merger, public feedback will play a crucial role in shaping the future of the combined entity and its impact on the local communities it aims to serve.