WesBanco Preferred Dividends: A Stable Income Play with a 2025 Pivot

WesBanco, Inc. (WSBC), a regional banking powerhouse with $27.4 billion in assets, has long been a stalwart of steady income for common stockholders. But its preferred stock, the 6.75% Non-Cumulative Perpetual Preferred Stock, Series A (WSBCP), offers a compelling alternative for investors seeking reliable dividends—and a chance to participate in a structural shift in 2025. Let's dissect the reliability of these dividends, their growth potential, and why this security could be a cornerstone of conservative portfolios.

The Current Dividend Regime: Fixed Rates Until 2025

WesBanco's Series A preferred stock is underpinned by a 6.75% fixed dividend rate, payable quarterly until November 15, 2025. The most recent dividend, declared in June 2025, paid $0.421875 per depositary share—a rate that translates to a 6.7% annual yield based on the stock's current price of $25.18. This yield is competitive with high-quality corporate bonds and far exceeds the paltry returns of Treasury bills.

The consistency of these payments is notable. Since the stock's issuance in 2020, WesBanco has never missed a quarterly dividend, a testament to its conservative risk management. The bank's solid financials—$7 billion in assets under management and a 1.2% net interest margin—bolster confidence in its ability to sustain payouts.

The 2025 Pivot: Resetting Rates for New Opportunities

After November 15, 2025, the dividend rate will reset to the five-year U.S. Treasury rate plus 6.557%, recalculated every five years. This mechanism introduces both risk and reward. If Treasury rates remain low, the new rate could be lower than the current 6.75%, trimming yields. However, if rates rise—a plausible scenario as the Fed addresses inflation—the dividend could jump meaningfully.

Consider this: If the five-year Treasury rate were 4% at the reset, the new rate would be 10.557%, pushing the dividend to $0.659375 per depositary share annually. Even if rates stay near current levels (~3.5%), the new rate would still be ~10%, a compelling upgrade. Investors holding WSBCP post-2025 must monitor Treasury yields closely, but the spread (6.557%) ensures a cushion against falling rates.

Risk Factors: Non-Cumulative Structure and Liquidity

Two caveats: First, the non-cumulative nature of the preferred stock means missed dividends are gone forever. While WesBanco has no history of skipping payments, this feature is a reminder that dividends are never guaranteed. Second, the stock's liquidity is modest; it trades at a slight premium to its $25 liquidation value but sees lower daily volume than many preferred issues. Investors should be prepared for some price volatility in thinner markets.

Investment Thesis: Income Now, Growth Later

For income-focused investors, WSBCP is a buy today. The 6.7% yield is secure through 2025, and the stock's premium to par suggests market confidence in its financial stability. Holders who can stomach the reset risk might consider a “wait-and-see” approach: buying now to lock in current income, then reassessing post-2025 based on Treasury rates.

Aggressive investors could even dollar-cost average into the stock ahead of the reset, anticipating a rate environment that benefits the reset mechanism. Pair this with a broader portfolio of short-duration bonds or other dividend-rich preferred stocks to hedge interest rate risk.

Conclusion: A Dividend Machine with a Twist

WesBanco's preferred stock offers a rare combination: reliable income today and growth potential tomorrow. The fixed-rate period ensures steady payouts for years, while the reset clause injects a speculative upside. For conservative investors, this is a “set it and forget it” holding. For those willing to engage with macro trends, the 2025 reset could be a golden opportunity. Just remember: in the world of preferreds, stability and surprise often come hand in hand.

Disclosure: This analysis is for informational purposes only. Always consult a financial advisor before making investment decisions.