Registrant's telephone number, including area code:~~304-234-9000~~304-234-9000

(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☑ No ☐

Indicate by check mark whether the registrant has submitted electronically ~~and posted on its corporate Web site, if any,~~ every Interactive Data File required to be submitted ~~and posted~~ pursuant to Rule 405 of RegulationS-T (section 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit ~~and post~~ such files).

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, anon-accelerated filer, a smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule12b-2 of the Exchange Act.

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 pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined by Rule12b-2 of the Exchange Act).

As of July ~~23, 2018,~~24, 2019, there were ~~46,643,250~~54,697,199 shares of WesBanco, Inc. common stock, $2.0833 par value, outstanding.

Basis of presentation —The accompanying unaudited interim financial statements of WesBanco, Inc. and its consolidated subsidiaries (“WesBanco”) have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information and the instructions to Form10-Q and Article 10 of RegulationS-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements and should be read in conjunction with our Annual Report on Form10-K for the year ended December 31, ~~2017.~~2018.

WesBanco’s interim financial statements have been prepared following the significant accounting policies disclosed in Note 1 of the Notes to the Consolidated Financial Statements of its ~~2017~~2018 Annual Report on Form10-K filed with the Securities and Exchange Commission. In the opinion of management, the accompanying interim financial information reflects all adjustments, including normal recurring adjustments, necessary to present fairly WesBanco’s financial position and results of operations for each of the interim periods presented. Certain prior period amounts have been reclassified to conform to the current period presentation. Such reclassifications had no impact on WesBanco’s net income and stockholders’ equity. Results of operations for interim periods are not necessarily indicative of the results of operations that may be expected for a full year.

Recent accounting pronouncements —In August ~~2017,~~2018, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2018-15, “Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement that is a Service Contract.” This ASU specifically aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software and hosting arrangements that include an internal-use software license. The ASU does not affect the accounting for the service element of a hosting arrangement that is a service contract. The guidance is effective for fiscal years beginning after December 15, 2019 and interim periods within those fiscal years. Early adoption is permitted, including adoption in an interim period. WesBanco is currently assessing the impact of ASU 2018-15 on WesBanco’s Consolidated Financial Statements.

In August 2018, the FASB issued ASU~~2017-12,~~ ~~“Targeted Improvements~~ 2018-14, “Compensation—Retirement Benefits—Defined Benefit Plans—General (Topic 715-20): Disclosure Framework—Changes to ~~Accounting~~the Disclosure Requirements for ~~Hedging Activities.~~Defined Benefit Plans.” ~~The new guidance will make more financial and nonfinancial hedging strategies eligible for hedge accounting. It also amends the presentation and~~This ASU modifies ASC 715-20 to improve disclosure requirements ~~and changes how companies assess effectiveness. It~~for employers that sponsor defined benefit pension or other postretirement plans. The guidance is ~~intended to more closely align hedge accounting with companies’ risk management strategies, simplify~~effective for fiscal years ending after December 15, 2020. Early adoption is permitted. WesBanco is currently assessing the ~~application~~impact of ~~hedge accounting, and increase transparency as~~ASU 2018-14 on WesBanco’s Consolidated Financial Statements.

In August 2018, the FASB issued ASU 2018-13, “Fair Value Measurement – Disclosure Framework – Changes to the ~~scope~~Disclosure Requirements for Fair Value Measurement.” This ASU modifies the disclosure objective paragraphs of ASC 820 to eliminate (1) “at a minimum” from the phrase “an entity shall disclose at a minimum” and ~~results~~(2) other similar “open ended” disclosure requirements to promote the appropriate exercise of ~~hedging programs.~~discretion of entities. The guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, ~~2018.~~2019. Early adoption is permitted, including adoption in an interim period. WesBanco is currently assessing the impact of ASU~~2017-12~~ 2018-13 on WesBanco’s Consolidated Financial Statements.

In ~~March 2017, the FASB issued ASU2017-07~~ that changes how an employer presents the net periodic benefit cost in the income statement for an employer-sponsored defined benefit pension and/or other postretirement benefit plans. Employers will present the service cost component of net periodic benefit cost in the same income statement line item as other employee compensation costs arising from services rendered during the period. Only the service cost component will be eligible for capitalization in assets. Employers will present the other components of the net periodic benefit cost separately from the line items that includes the service cost outside of any subtotal of operating income, if one is presented. These components will not be eligible for capitalization in assets. For public business entities, the amendments in this update are effective for annual reporting periods beginning after December 15, 2017, including interim reporting periods within those annual reporting periods. Early adoption is permitted as of the beginning of an annual period (i.e., only in the first interim period). For WesBanco, this update was effective for the fiscal year beginning January 1, 2018. Upon adoption, WesBanco reclassified the service cost component from employee benefits to salaries and wages, which are both components of~~non-interest~~ ~~expense. The service cost component for the three and six months ended June 30, 2018 was $0.7 and $1.4 million, respectively.~~

~~In January 2017, the FASB issued ASU2017-01,~~ which clarifies the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. ASU~~2017-01~~ will be effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017, which for WesBanco was effective for the fiscal year beginning January 1, 2018. The adoption of this pronouncement did not have a material impact on WesBanco’s Consolidated Financial Statements.

~~In October~~September 2016, the FASB issued ASU~~2016-16~~ that provides the recognition of income tax consequences of an intra-entity transfer of an asset other than inventory when the transfer occurs. Current guidance prohibits the recognition of current and deferred income taxes for an intra-entity asset transfer until the asset has been sold to an outside party. This prohibition on recognition is an exception to the principle of comprehensive recognition of current and deferred income taxes in generally accepted accounting principles. The exception has led to diversity in practice and is a source of complexity in financial reporting. FASB decided that an entity should recognize the income tax consequences of an intra-entity transfer of an asset other than inventory when the transfer occurs. Consequently, the amendments in this update eliminate the exception for an intra-entity transfer of an asset other than inventory. The amendments in this update do not include new disclosure requirements; however, existing disclosure requirements might be applicable when accounting for the current and deferred income taxes for an intra-entity transfer of an asset other than inventory. For public business entities, the amendments in this update are effective for annual reporting periods beginning after December 15, 2017, including interim reporting periods within those annual reporting periods, 2016-13, “Financial Instruments – Credit Losses (Topic 326)”, which for WesBanco was effective for the fiscal year beginning January 1, 2018. The amendments in this update were to be applied on a modified retrospective basis through a cumulative-effect adjustment directly to retained earnings as of the beginning of the period of adoption. The adoption of this pronouncement did not have a material impact on WesBanco’s Consolidated Financial Statements.

~~In August 2016, the FASB issued ASU2016-15~~ ~~that provides guidance for the classification of cash flows related to (1) debt prepayment or extinguishment costs, (2) settlement ofzero-coupon~~ debt instruments or other debt instruments with coupon rates that are insignificant in relation to the effective interest rate on the borrowing, (3) contingent consideration payments made after a business combination, (4) proceeds from the settlement of insurance claims, (5) proceeds from the settlement of corporate-owned life insurance policies, (6) distributions received from equity method investees, (7) beneficial interests in securitization transactions and (8) separately identifiable cash flows and application of the predominance principle. Public business entities must apply the new requirements for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years, which for WesBanco was effective for the fiscal year beginning January 1, 2018. The adoption of this pronouncement did not have a material impact on WesBanco’s Consolidated Financial Statements.

~~In June 2016, the FASB issued ASU2016-13~~ ~~that~~ will require entities to use a new forward-looking “expected loss” model on trade and other receivables,held-to-maturity debt securities, loans and other instruments that generally will result in the earlier recognition of allowances for credit losses. Foravailable-for-sale debt securities with unrealized losses, entities will measure credit losses in a manner similar to what they do today, except that the losses will be recognized as allowances rather than reductions in the amortized cost of the securities. Entities will have to disclose significantly

more information, including information they use to track credit quality by year of origination for most financing receivables. Public business entities must apply the new requirements for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years, which for WesBanco will be effective for the fiscal year beginning January 1, 2020. Early adoption is permitted for fiscal years beginning after December 15, 2018. WesBanco formed a cross-functional team to oversee the implementation of this ASU, and has completed an initial data gap assessment, finalized the loan segmentation procedures, and is currently evaluating the ~~impact~~various forecasting and modeling assumptions, including qualitative factors, that will be used to estimate the initial current expected credit loss allowance. Substantial progress has been made on the identification and staging of data, development of models, refinement of economic forecasting processes, and documentation of accounting policy decisions. In conjunction with this implementation, WesBanco is reviewing business processes and evaluating potential changes to the control environment. Acquired loans or pools of loans that have experienced more-than-insignificant credit deterioration are deemed to be purchased credit deteriorated (“PCD”) loans, and are grossed-up on day 1 by the initial credit estimate through goodwill as opposed to the provision for credit losses. Acquired loans deemed not to be PCD loans will be adjusted to fair value through goodwill, with an allowance and corresponding provision for credit losses recorded in the first reporting period after acquisition through current period earnings, while the loan mark will accrete through interest income over the life of such loans. At acquisition, WesBanco will consider several factors as indicators that an acquired loan or pool of loans has experienced more-than-insignificant credit deterioration. These factors may include loans 30 days or more past due, loans with an internal risk grade of below average or lower, loans classified as non-accrual by the acquired institution, materiality of the credit and loans that have been previously modified in a troubled debt restructuring. Upon adoption of this ~~pronouncement~~standard, acquired loans from prior acquisitions that meet the guidelines under ASC 310-30 will be classified as PCD loans. The accretable portion of the loan mark as of adoption date will continue to accrete into interest income. However, the non-accretable portion of the loan mark will be added to the allowance upon adoption; while any reversals of such mark will flow through the allowance in future periods. The loan mark on ~~WesBanco’s Consolidated Financial Statements.~~ASC 310-20 loans (“the good book”) from acquisitions will continue to accrete through interest income over the life of such loans. WesBanco will perform parallel runs of the new methodology throughout the remainder of 2019 prior to adoption of the ASU. WesBanco currently anticipates that an increase to the allowance for credit losses may be recognized upon adoption to provide for expected credit losses over the estimated life of loan and investment receivables. The magnitude of the increase will depend on economic conditions and trends in the loan and securities portfolios at the time of adoption.

In February 2016, the FASB issued ASU2016-02, ~~that will require~~ “Leases (Topic 842)”, which requires entities to recognize lease assets and lease liabilities on the balance sheet and disclose key information about leasing arrangements. The principal difference from previous guidance is that the lease assets and lease liabilities arising from operating leases were not previously recognized in the balance sheet. Public business entities must apply the new requirements for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. ~~Early adoption is permitted.~~For WesBanco, this update was effective for the fiscal year beginning January 1, 2019. In January 2018, the FASB issued ASU2018-01, which allows entities the option to apply the provisions of the new lease guidance at the effective date without adjusting the comparative periods presented. In July 2018, the FASB issued ASU2018-10, which provides narrow-scope improvements to the lease ~~standard. While we are currently assessing~~standard and ASU 2018-11, which allows entities to choose an additional transition method, under which an entity initially applies the ~~impact of~~new lease standard at the adoption date and recognizes a cumulative-effect adjustment to the opening balance of ~~this pronouncement, we expect the primary impact to our consolidated financial position upon adoption will be the recognition, on a discounted basis, of our minimum commitments undernon-cancellable~~ ~~operating leases on our consolidated Balance Sheets resulting~~retained earnings in the ~~recording~~period of ~~right~~adoption. Under this transitional method, the entity shall recognize and measure the leases that exist at the adoption date and the prior comparative periods are not adjusted. WesBanco adopted this ASU as of ~~use~~January 1, 2019 using the transitional method. In addition, WesBanco utilized certain practical expedients including the following - retained the classifications of existing leases, no re-assessment to determine if existing leases have initial direct costs and utilized hindsight when determining the lease term and assessment of impairment in existing leases. WesBanco capitalized $20 million for right-of-use assets and lease ~~obligations.~~liabilities, net of existing straight-line lease liabilities and unfavorable acquired lease liabilities. See additional disclosures in Note 6, “Leases”.

In ~~January 2016,~~August 2017, the FASB issued ASU~~2016-01~~ ~~that will require entities~~ 2017-12, “Targeted Improvements to ~~measure equity investments that do not result in consolidation~~Accounting for Hedging Activities.” The new guidance makes more financial and ~~are not accounted~~nonfinancial hedging strategies eligible for ~~under~~hedge accounting. It also amended the ~~equity method at fair value~~presentation and ~~recognize any changes in fair value in net income unless~~disclosure requirements and changed how companies assess effectiveness. It was intended to more closely align hedge accounting with companies’ risk management strategies, simplify the ~~investments qualify~~application of hedge accounting, and increase transparency as to the scope and results of hedging programs. The guidance was effective for ~~the new practicability exception. The standard does not change the guidance for classifying~~fiscal years, and measuring investments in debt securities and loans. Entities will have to record changes in instrument-specific credit risk for financial liabilities measured under the fair value option in other comprehensive income. Public business entities must apply the new requirements forinterim periods within those fiscal years, beginning after December 15, ~~2017, including interim periods within those~~2018. For WesBanco, this update was effective for the fiscal ~~years.~~ year beginning January 1, 2019. Upon adoption, WesBanco reclassified $67.3 million of callable held-to-maturity municipal debt securities to available-for-sale debt securities.

In ~~February~~October 2018, the FASB issued ASU~~2018-03,~~ ~~which clarifies certain aspects~~ 2018-16, “Derivatives and Hedging (Topic 815): Inclusion of the ~~guidance issued in~~Secured Overnight Financing Rate (SOFR) Overnight Index Swap (OIS) Rate as a Benchmark Interest Rate for Hedge Accounting Purposes.” This ASU~~2016-01.~~ ~~WesBanco adopted these pronouncements as~~ modifies ASC 815 for eligible benchmark interest rates. Due to concerns about the sustainability of ~~January 1, 2018 and recognized a $1.1 million adjustment~~the London Interbank Offered Rate (LIBOR), the Federal Reserve initiated an effort to ~~retained earnings upon adoption of this pronouncement. In addition, WesBanco reclassified investment securities on the Consolidated Financial Statements into the following – equity securities,available-for-sale~~ ~~debt securities andheld-to-maturity~~ ~~debt securities.~~

~~In May 2014, the FASB issued ASU2014-09~~ related to the recognition of revenue from contracts with customers. The new revenue pronouncement creates a single source of revenue guidance for all companies in all industries and is more principles-based than current revenue guidance. The pronouncement provides a five-step model for a company to recognize revenue when it transfers control of goods or services to customers atintroduce an amount that reflects the consideration to which it expects to be entitled in exchange for those goods or services. The five steps are, (1) identify the contract with the customer, (2) identify the separate performance obligationsalternative reference rate in the ~~contract, (3) determine the transaction price, (4) allocate the transaction price to the separate performance obligations and (5) recognize revenue when each performance obligation~~United States. The Overnight Index Swap (OIS) rate, which is ~~satisfied. On July 9, 2015, the FASB approved~~based on SOFR is permitted as a~~one-year~~ ~~deferral of the effective date of the update.~~ U.S. benchmark interest rate for hedge accounting purposes. The ~~update~~guidance is effective for fiscal years, and interim ~~and annual reporting~~ periods inwithin those fiscal years, beginning after December 15, ~~2017. In March 2016,~~2018. For WesBanco, this update was effective for the ~~FASB issued ASU2016-08,~~ ~~which amends the principle versus agent guidance in the revenue standard. In April 2016, the FASB issued ASU2016-10,~~ ~~which clarifies when promised goods or services are separately identifiable in the revenue standard. In May 2016, FASB issued ASU2016-12,~~ ~~which provides narrow-scope improvements and practical expedients to the revenue standard. WesBanco adopted these pronouncements as of~~fiscal year beginning January 1, ~~2018 using the modified retrospective approach. WesBanco noted no material change to the timing~~2019. The adoption of ~~revenue recognition and there was no~~this pronouncement did not have a material impact on WesBanco’s Consolidated Financial Statements. ~~See Note 9, Revenue Recognition for further discussion on revenue within the scope of ASC 606.~~

On ~~April 5,~~August 20, 2018, WesBanco completed its acquisition of ~~First Sentry Bancshares, Inc.~~Farmers Capital Bank Corp. (“~~FTSB”~~FFKT”), a bank holding company headquartered in ~~Huntington, WV.~~Frankfort, KY. On the acquisition date, ~~FTSB~~FFKT had approximately ~~$706.1 million~~$1.6 billion in assets, excluding goodwill, which included approximately ~~$448.3 million~~$1.0 billion in loans and ~~$142.9~~$239.3 million in securities. The ~~FTSB~~FFKT acquisition was valued at ~~$108.3~~$428.9 million, based on WesBanco’s closing stock price on ~~April 5,~~August 20, 2018, of ~~$42.96,~~$49.40, and resulted in WesBanco issuing ~~2,498,761~~7,920,387 shares of its common stock and ~~$1.0~~$37.6 million in cash in exchange for all of the outstanding shares of ~~FTSB~~FFKT common ~~stock including stock options.~~stock. The assets and liabilities of ~~FTSB~~FFKT were recorded on WesBanco’s Balance Sheet at their preliminary estimated fair values as of ~~April 5,~~August 20, 2018, the acquisition date, and ~~FTSB’s~~FFKT’s results of operations have been included in WesBanco’s Consolidated Statements of Income since that date. ~~Due to the timing of the acquisition relative to the end of the reporting period, the~~The fair values for certain assets and liabilities acquired from ~~FTSB~~FFKT on ~~April 5,~~August 20, 2018 ~~represent~~represented preliminary estimates.Based on a preliminary purchase price allocation, WesBanco recorded ~~$66.2~~$220.9 million in goodwill and ~~$8.2~~$37.4 million in core deposit intangibles in its community banking segment ~~representing the principal change~~and $2.6 million in ~~goodwill~~trust customer relationship intangibles in its trust and ~~intangibles from December 31, 2017.~~investment services segment. None of the goodwill is deductible for income tax purposes, as the acquisition is accounted for as atax-free exchange for tax purposes. As a result of the full integration of the operations of ~~FTSB,~~FFKT, it is not practicable to determine revenue or net income included in WesBanco’s operating results relating to ~~FTSB~~FFKT since the date of acquisition, as ~~FTSB’s~~FFKT’s results cannot be separately identified.

For the six months ended June 30, ~~2018,~~2019, WesBanco recorded merger-related expenses of ~~$5.0~~$3.2 million associated with the ~~FTSB~~FFKT acquisition.

The preliminary purchase price of the ~~FTSB~~FFKT acquisition and resulting goodwill is summarized as follows:

The following table presents the preliminary allocation of the purchase price of the assets acquired and the liabilities assumed at the date of acquisition, as WesBanco intends to finalize its accounting for the acquisition of ~~FTSB~~FFKT within one year from the date of acquisition:

The following table presents the changes in the allocation of the purchase price of the assets acquired and Farmers Capital Bank Corporation (“FFKT”), a bank holding company headquartered in Frankfort, Kentucky with approximately $1.7 billion in assets, $1.4 billion in deposits, $1.0 billion in loans and 34 branches, jointly announced that a definitive Agreement and Plan of Merger was executed providing for the ~~merger of FFKT with and into WesBanco. On~~liabilities assumed at the date of the ~~announcement,~~acquisition previously reported as of March 31, 2019:

The fair value estimates for other assets and other liabilities have continued to fluctuate as the transaction was valued at approximately $378.2 million. Under the terms of the Agreement and Plan of Merger, which has been approved by the board of directors of both companies, WesBanco will exchange a combination of its common stock and cash for FFKT common stock. FFKT’s shareholders will be entitledfinal valuations are completed. The Company expects to ~~receive 1.053 shares of WesBanco common stock and cash in the amount of $5.00 per share for each share~~finalize purchase price accounting of FFKT ~~common stock for a total value~~within one year of ~~approximately $50.31 per share at the~~ date of ~~announcement. The receipt by FFKT shareholders of shares of WesBanco common stock in exchange for their shares of FFKT’s common stock is anticipated to qualify as atax-free~~ exchange. The acquisition has been approved by the appropriate banking regulatory authorities and the shareholders of FFKT. It is expected that the transaction will be completed in the third quarter of 2018. For the six months ended June 30, 2018, WesBanco has recorded merger-related expenses of $0.7 million associated with the FFKT acquisition.

Options to purchase ~~117,600 shares~~353,829 and ~~117,550~~117,600 shares at June 30, ~~2018~~2019 and ~~2017,~~2018, respectively, were not included in the computation of net income per diluted share for the three months ended June 30, ~~2018~~2019 and ~~2017,~~2018, respectively, because the exercise price was greater than the average market price of the common shares and, therefore, the effect would be antidilutive. Options to purchase 117,600 shares at both June 30, 2019 and 2018 were not included in the computation of net income per diluted ~~share~~shares for the six months ended June 30, 2019 and 2018, because the exercise price was greater than the average market price of the common shares and, therefore, the effect would be antidilutive. ~~All stock options were included in the computation of net income per diluted share for the six months ended June 30, 2017.~~

As of June 30, ~~2018,~~2019, 40,608 contingently issuable shares ~~totaling 42,912,~~ were estimated to be awarded under the 2018 and 2017 total shareholder return plans as stock performance targets ~~have been~~were met and are therefore included in the diluted calculation. As of June 30, 2019, the shares related to ~~date~~the 2019 total shareholder return plan were not included in the calculation because the effect would be antidilutive. Performance based restricted stock compensation totaling 30,137 shares were estimated to be awarded as of June 30, 2019 and are included in the diluted calculation. As of June 30, 2018, 42,912 contingently issuable shares were estimated to be awarded under the ~~shares related to the 2016~~2018 and 2017 total shareholder return plans as stock performance targets were ~~not~~met and are included in the ~~calculation because the effect would be antidilutive. Performance-based~~diluted calculation. Performance based restricted stock compensation totaling 17,081 shares were estimated to be awarded as of June 30, 2018 and are included in the diluted calculation.

On April 5, 2018, WesBanco issued 2,498,761 shares of common stock to complete its acquisition of FTSB and granted 9,465 shares of restricted stock to certain FTSB employees. These shares are included in average shares outstanding beginning on that date. For additional information relating to the FTSB acquisition, refer to Note 2, “Mergers and Acquisitions.”

The following table presents the fair value and amortized cost ofavailable-for-sale andheld-to-maturity debt securities:

At June 30, ~~2018,~~2019 and December 31, ~~2017,~~2018, there were no holdings of any one issuer, other than U.S. government sponsored entities and its agencies, in an amount greater than 10% of WesBanco’s shareholders’ equity.

Equity securities, of which ~~$8.3~~$8.7 million consist of investments in various mutual funds held in grantor trusts formed in connection with the Company’s deferred compensation plan, are recorded at fair value and totaled ~~$13.5~~$11.8 million and $11.7 million at June 30, ~~2018~~2019 and December 31, ~~2017.~~2018, respectively.

The following table presents the fair value ofavailable-for-sale andheld-to-maturity debt securities by contractual maturity at June 30, ~~2018.~~2019. In some instances, the issuers may have the right to call or prepay obligations without penalty prior to the contractual maturity date.

   June 30, 2018
(unaudited, in thousands)
   One Year
or less    One to
Five Years    Five to
Ten Years    After
Ten Years    Mortgage-backed
securities    Total
Available-for-sale debt securities

U.S. Treasury
   $ 9,913    $ —      $ —      $ —      $ —      $ 9,913
U.S. Government sponsored entities and agencies
   10,459    6,302    13,739    6,802    63,380    100,682
Residential mortgage-backed securities and collateralized mortgage obligations of government sponsored entities and agencies⁽¹⁾
   —      —      —      —      1,373,417    1,373,417
Commercial mortgage-backed securities and collateralized mortgage obligations of government sponsored entities and agencies⁽¹⁾
   —      —      —      —      140,647    140,647
Obligations of states and political subdivisions
   9,629    23,831    51,042    42,297    —      126,799
Corporate debt securities
   9,801    33,364    1,948    —      —      45,113












Totalavailable-for-sale debt securities
   $ 39,802    $ 63,497    $ 66,729    $ 49,099    $ 1,577,444    $ 1,796,571












Held-to-maturity debt securities⁽²⁾

U.S. Government sponsored entities and agencies
   $ —      $ —      $ —      $ —      $ 11,487    $ 11,487
Residential mortgage-backed securities and collateralized mortgage obligations of government sponsored entities and agencies⁽¹⁾
   —      —      —      —      155,553    155,553
Obligations of states and political subdivisions
   6,410    123,247    393,073    293,678       816,408
Corporate debt securities
   —      7,448    25,215    —      —      32,663












Totalheld-to-maturity debt securities
   $ 6,410    $ 130,695    $ 418,288    $ 293,678    $ 167,040    $ 1,016,111












Total debt securities
   $ 46,212    $ 194,192    $ 485,017    $ 342,777    $ 1,744,484    $ 2,812,682

Securities with aggregate fair values of ~~$1.6 billion and $1.4~~$2.0 billion at June 30, ~~2018~~2019 and December 31, ~~2017, respectively,~~2018 were pledged as security for public and trust funds, and securities sold under agreements to repurchase. Proceeds from the sale ofavailable-for-sale securities were ~~$81.5~~$66.1 million and ~~$7.8~~$81.5 million for the six months ended June 30, ~~2018~~2019 and ~~2017,~~2018, respectively. Net unrealized ~~losses~~gains (losses) onavailable-for-sale securities included in accumulated other comprehensive income net of tax, as of June 30, ~~2018~~2019 and December 31, ~~2017~~2018 were ~~$36.0~~$19.4 million and ~~$13.3~~($21.5) million, respectively.

The following table presents the gross realized gains and losses on sales and calls ofavailable-for-sale andheld-to-maturity debt securities, as well as gains and losses on equity securities from both sales and market adjustments from the adoption of ASU 2016-01 effective January 1, 2018 for the three and six months ended June 30, 2019 and 2018, ~~and 2017,~~ respectively.

The following tables provide information on unrealized losses on debt securities that have been in an unrealized loss position for less than twelve months and twelve months or more as of June 30, ~~2018~~2019 and December 31, ~~2017:~~2018, respectively:

Unrealized losses on debt securities in the tables represent temporary fluctuations resulting from changes in market rates in relation to fixed yields. Unrealized losses in theavailable-for-sale portfolio are accounted for as an adjustment, net of taxes, to other comprehensive income in shareholders’ equity.

WesBanco does not believe the securities presented above are impaired due to reasons of credit quality, as substantially all debt securities are rated above investment grade and all are paying principal and interest according to their contractual terms. WesBanco does not intend to sell, nor is it more likely than not that it will be required to sell, loss position securities prior to recovery of their cost, and therefore, management believes the unrealized losses detailed above are temporary and no impairment loss relating to these securities has been recognized.

Securities that do not have readily determinable fair values and for which WesBanco does not exercise significant influence are carried at cost. Cost method investments consist primarily of FHLB of Pittsburgh, Cincinnati and Indianapolis stock totaling ~~$59.3~~$54.7 million and ~~$45.9~~$50.8 million at June 30, ~~2018~~2019 and December 31, ~~2017,~~2018, respectively, and are included in other assets in the Consolidated Balance Sheets. Cost method investments are evaluated for impairment whenever events or circumstances suggest that their carrying value may not be recoverable.

The recorded investment in loans is presented in the Consolidated Balance Sheets net of deferred loan fees and costs, and discounts on purchased loans. ~~The net~~Net deferred loan costs were ~~$2.4~~$4.2 million and ~~$1.6~~$3.2 million at June 30, ~~2018~~2019 and December 31, ~~2017,~~2018, respectively. The unamortized discount on purchased loans from acquisitions was ~~$31.4 million, including $11.9 million related to FTSB, and $21.9~~$40.1 million at June 30, ~~2018~~2019, including $19.0 million related to FFKT, and $49.3 million at December 31, ~~2017, respectively.~~2018.

The following tables summarize changes in the allowance for credit losses applicable to each category of the loan portfolio:

The following tables present the allowance for credit losses and recorded investments in loans by category:

⁽¹⁾ Commercial loans greater than $1 million that are reported as non-accrual or as a TDR are individually evaluated for impairment.

WesBanco maintains an internal loan grading system to reflect the credit quality of commercial loans. Commercial loan risk grades are determined based on an evaluation of the relevant characteristics of each loan, assigned at the inception of each loan and adjusted thereafter at any time to reflect changes in the risk profile throughout the life of each loan. The primary factors used to determine the risk grade are the reliability and sustainability of the primary source of repayment and overall financial strength of the borrower. This includes an analysis of cash flow available to repay debt, profitability, liquidity, leverage, and overall financial trends. Other factors include management, industry or property type risks, an assessment of secondary sources of repayment such as collateral or guarantees, other terms and conditions of the loan that may increase or reduce its risk, and economic conditions and other external factors that may influence repayment capacity and financial condition.

Commercial real estate – land and construction consists of loans to finance investments in vacant land, land development, construction of residential housing, and construction of commercial buildings. Commercial real estate – improved property consists of loans for the purchase or refinance of all types of improved owner-occupied and investment properties. Factors that are considered in assigning the risk grade vary depending on the type of property financed. The risk grade assigned to construction and development loans is based on the overall viability of the project, the experience and financial capacity of the developer or builder to successfully complete the project, project specific and market absorption rates and comparable property values, and the amount ofpre-sales for residential housing construction orpre-leases for commercial investment property. The risk grade assigned to commercial investment property loans is based primarily on the adequacy of net rental income generated by the property to service the debt, the type, quality, industry and mix of tenants, and the terms of leases, but also considers the overall financial capacity of the investors and their experience in owning and managing investment property. The risk grade assigned to owner-occupied commercial real estate and commercial and industrial loans is based primarily on historical and projected earnings, the adequacy of operating cash flow to service all of the business’ debt, and the capital resources, liquidity and leverage of the business, but also considers the industry in which the business operates, the business’ specific competitive advantages or disadvantages, the quality and experience of management, and external influences on the business such as economic conditions. The type, age, condition, location and any environmental risks associated with a property are also considered for all types of commercial real estate.

Commercial and industrial (“C&I”) loans consist of revolving lines of credit to finance accounts receivable, inventory and other general business purposes; term loans to finance fixed assets other than real estate, and letters of credit to support trade, insurance or governmental requirements for a variety of businesses. Most C&I borrowers are privately-held companies with annual sales up to $100 million. Factors that are considered for ~~commercial and industrial~~C&I loans include the type, quality and marketability ofnon-real estate collateral and whether the structure of the loan increases or reduces its risk. ~~The type, age, condition, location and any environmental risks associated with a property are also considered for all types of commercial real estate.~~ The overall financial condition and repayment capacity of any guarantors is also evaluated to determine the extent to which they mitigate other risks of the loan. The following paragraphs provide descriptions of risk grades that are applicable to commercial real estate and commercial and industrial loans.

Pass loans are those that exhibit a history of positive financial results that are at least comparable to the average for their industry or type of real estate. The primary source of repayment is acceptable and these loans are expected to perform satisfactorily during most economic cycles. Pass loans typically have no significant external factors that are expected to adversely affect these borrowers more than others in the same industry or property type. Any minor unfavorable characteristics of these loans are outweighed or mitigated by other positive factors including but not limited to adequate secondary or tertiary sources of repayment.

Criticized or compromised loans are currently protected but have weaknesses, which, if not corrected, may be inadequately protected at some future date. These loans represent an unwarranted credit risk and would generally not be extended in the normal course of lending. Specific issues, which may warrant this grade, include declining financial results, increased reliance on secondary sources of repayment or guarantor support and adverse external influences that may negatively impact the business or property.

Substandard and doubtful loans are equivalent to the classifications used by banking regulators. Substandard loans are inadequately protected by the current repayment capacity and equity of the borrower or collateral pledged, if any. Substandard loans have one or more well-defined weaknesses that jeopardize their repayment or collection in full. These loans may or may not be reported asnon-accrual. Doubtful loans have all the weaknesses inherent to a substandard loan with the added characteristic that full repayment is highly questionable or improbable on the basis of currently existing facts, conditions and collateral ~~values.~~values, and are considered non-accrual. However, recognition of loss may be deferred if there are reasonably specific pending factors that will reduce the risk if they occur.

Residential real estate, home equity and consumer loans are not assigned internal risk grades other than as required by regulatory guidelines that are based primarily on the age of past due loans. WesBanco primarily evaluates the credit quality of residential real estate, home equity and consumer loans based on repayment performance and historical loss rates. The aggregate amount of residential real estate, home equity and consumer loans classified as substandard in accordance with regulatory guidelines was ~~$20.3~~$20.0 million at June 30, ~~2018~~2019 and ~~$22.8~~$22.9 million at December 31, ~~2017,~~2018, of which ~~$1.3~~$2.0 and ~~$2.5~~$3.9 million were accruing, for each period, respectively. The aggregate amount of residential real estate, home equity and consumer loans classified as substandard are not included in the tables above.

Acquired ~~FTSB~~FFKT Loans — – In conjunction with the ~~FTSB~~FFKT acquisition, WesBanco acquired loans with a book value of ~~$465.9~~$1,064.8 million as of ~~April 5,~~August 20, 2018. These loans were recorded at the ~~preliminary~~ fair value of ~~$448.3~~$1,025.8 million, with ~~$432.3~~$988.3 million categorized as ASC310-20 loans. The fair market value adjustment on these loans of ~~$10.3~~$26.0 million at the acquisition date is expected to be recognized into interest income on a level yield basis over the remaining expected life of the loans.

Loans acquired with deteriorated credit quality with a book value of ~~$5.5~~$5.3 million were recorded at the ~~preliminary~~ fair value of ~~$3.1~~$4.6 million, of which ~~$0.7~~$2.4 million were accounted for under the cost recovery method in accordance with ASC310-30 as cash flows cannot be reasonably estimated, and categorized asnon-accrual.

The carrying amount of loans acquired with deteriorated credit quality at June 30, ~~2018~~2019 was ~~$3.0~~$3.1 million, while the outstanding customer balance was ~~$5.4~~$3.6 million. At June 30, ~~2018~~2019, no allowance for loan losses has been recognized related to the ~~acquired~~FFKT-acquired impaired loans.

Certain acquired underperforming loans with aan acquired book value of ~~$17.7~~$45.2 million were sold ~~prior to June 30,~~during the fourth quarter of 2018 for ~~$12.9~~$32.9 million. The acquisition date fair value of the acquired loans was adjusted to the sale price resulting in no recognized gain or loss.

~~Other Acquired Loans~~— The carrying amount of other loans acquired with deteriorated credit quality at June 30, 2018 and December 31, 2017 was $7.6 million and $8.0 million, respectively, of which $4.1 million and $4.3 million, respectively, were accounted for under the cost recovery method in accordance with ASC~~310-30~~ ~~as cash flows cannot be reasonably estimated, and therefore were categorized asnon-accrual.~~ At June 30, 2018, the accretable yield was $7.1 million. At June 30, 2018 and December 31, 2017 an allowance for loan losses of $2.2 million and $2.0 million, respectively, has been recognized related to other acquired impaired loans, as the estimates for future cash flows on these loans have been negatively impacted.14

The following table provides changes in accretable yield for loans acquired with deteriorated credit quality:

   For the Six Months Ended
(unaudited, in thousands)
   June 30,
2018    June 30,
2017
Balance at beginning of period
   $ 1,724    $ 1,717
Acquisitions
   —      —
Reduction due to change in projected cash flows
   (86 )    —
Reclass from non-accretable difference
   5,877    738
Transfers out
   —      (216 )
Accretion
   (440 )    (279 )




Balance at end of period
   $ 7,075    $ 1,960

⁽¹⁾The difference between the unpaid principal balance and the recorded investment generally reflects amounts that have been previously charged-off and fair market value adjustments on acquired impaired loans.

The following tables present the recorded investment innon-accrual loans and TDRs:

⁽¹⁾At June 30, 2019, there were three borrowers with loans greater than $1.0 million totaling $8.2 million, as compared to one borrower with a loan greater than $1.0 million totaling $3.4 million at December 31, 2018. Total non-accrual loans include loans that are also restructured. Such loans are also set forth in the following table as non-accrual TDRs.

As of June 30, ~~2018~~2019 and December 31, ~~2017,~~2018, there were no TDRs greater than $1.0 million. The concessions granted in the majority of loans reported as accruing andnon-accrual TDRs are extensions of the maturity date or the amortization period, reductions in the interest rate below the prevailing market rate for loans with comparable characteristics, and/or permitting interest-only payments for longer than three months. WesBanco had unfunded commitments to debtors whose loans were classified as impaired of ~~$0.3~~$0.2 million and $0.1 million as of June 30, ~~2018~~2019 and December 31, ~~2017, respectively.~~2018.

The following tables present details related to loans identified as TDRs during the three and six months ended June 30, ~~2018~~2019 and ~~2017,~~2018, respectively:

⁽¹⁾Excludes loans that were either paid off or charged-off by period end. The pre-modification balance represents the balance outstanding at the beginning of the period. The post-modification balance represents the outstanding balance at period end.

   New TDRs (1)
   For the Six Months Ended
   June 30, 2018    June 30, 2017
��    Pre-    Post-       Pre-    Post-
      Modification    Modification       Modification    Modification
      Outstanding    Outstanding       Outstanding    Outstanding
   Number of    Recorded    Recorded    Number of    Recorded    Recorded
(unaudited, dollars in thousands)
   Modifications    Investment    Investment    Modifications    Investment    Investment
Commercial real estate:


Land and construction
   —      $ —      $ —      —      $ —      $ —
Improved Property
   —      —      —      —      —      —












Total commercial real estate
   —      —      —      —      —      —












Commercial and industrial
   1    10    9    2    125    120
Residential real estate
   5    203    185    2    22    18
Home equity
   1    20    20    1    45    44
Consumer
   4    45    38    3    34    29












Total
   11    $ 278    $ 252    8    $ 226    $ 211

The following table summarizes TDRs which defaulted (defined as past due 90 days) during the six months ended June 30, ~~2018~~2019 and ~~2017,~~2018, respectively, that were restructured within the last twelve months prior to June ~~2018~~30, 2019 and ~~2017,~~2018, respectively:

⁽¹⁾Excludes loans that were either charged-off or cured by period end. The recorded investment is as of June 30, 2019 and 2018, respectively.

TDRs that default are placed onnon-accrual status unless they are both well-secured and in the process of collection. The loans in the table above were not accruing interest.

The following table summarizes other real estate owned and repossessed assets included in other assets:

Residential real estate included in other real estate owned at June 30, ~~2018~~2019 and December 31, ~~2017~~2018 was ~~$0.8~~$1.2 million and ~~$1.5~~$1.3 million, respectively. At June 30, ~~2018~~2019 and December 31, ~~2017,~~2018, formal foreclosure proceedings were in process on residential real estate loans totaling ~~$5.7~~$5.8 million and ~~$3.5~~$6.0 million, respectively.

Operating leases are recorded as a right of use (“ROU”) asset and operating lease liability, included in premises and equipment, net and other liabilities, respectively, on the consolidated balance sheet beginning January 1, 2019 when WesBanco adopted ASU 2016-02 prospectively. Operating lease ROU assets represent the right to use an underlying asset during the lease term and operating lease liabilities represent our obligation to make lease payments arising from the lease. ROU assets and operating lease liabilities are recognized at lease commencement based on the present value of the remaining lease payments using a discount rate that represents our incremental borrowing rate at the lease commencement date. Operating lease expense, which is comprised of amortization of the ROU asset and the implicit interest accreted on the operating lease liability, is recognized on a straight-line basis over the lease term, and is recorded primarily in net occupancy expense in the consolidated statements of comprehensive income.

Operating leases relate primarily to bank branches, office space and license agreements with remaining lease terms of generally 1 to 21 years, which include options for multiple five- and ten- year extensions, with a weighted-average lease term of 9 years. As of June 30, 2019, operating lease ROU assets and liabilities were $18.2 million and $21.2 million, respectively. The lease expense for operating leases was $0.7 million and $1.3 million for the three and six months ended June 30, 2019, respectively. The weighted average discount rate was 3.29% as of June 30, 2019.

Future minimum lease payments under non-cancellable leases with initial or remaining lease terms in excess of one year at June 30, 2019 are as follows (unaudited, in thousands):

WesBanco is exposed to certain risks arising from both its business operations and economic conditions. WesBanco principally manages its exposures to a wide variety of business and operational risks through management of its core business activities. WesBanco manages economic risks, including interest rate, liquidity, and credit risk, primarily by managing the amount, sources, and duration of its assets and liabilities. WesBanco’s existing interest rate derivatives result from a service provided to certain qualifying customers and, therefore, are not used to manage interest rate risk in WesBanco’s assets or liabilities. WesBanco manages a matched book with respect to its derivative instruments in order to minimize its net risk exposure resulting from such transactions. A matched book is when the Bank’s assets and liabilities are equally distributed but also have similar maturities.

WesBanco executes interest rate swaps with commercial banking customers to facilitate their respective risk management strategies. Those interest rate swaps are simultaneously hedged by offsetting interest rate swaps that WesBanco executes with a third party, ~~such~~so that WesBanco minimizes its net risk exposure resulting from such transactions. As the interest rate swaps associated with this program do not meet the strict hedge accounting requirements of FASB ASC 815, changes in the fair value of both the customer swaps and the offsetting third-party swaps are recognized directly in earnings. As of June 30, ~~2018~~2019 and December 31, ~~2017,~~2018, WesBanco had 4253 and ~~39,~~43, respectively, interest rate swaps with an aggregate notional amount of ~~$305.6~~$320.1 million and ~~$298.2~~$229.8 million ~~respectively,~~ related to this program. During the six months ended June 30, ~~2018~~2019 and ~~2017,~~2018, WesBanco recognized net losses of $1.1 million and net gains ~~(net losses)~~ of $0.2 ~~million and $(0.3)~~ million, respectively, related to the changes in fair value of these swaps. Additionally, WesBanco recognized ~~$0.5~~$1.9 million and ~~$1.1~~$0.5 million of income for the related swap fees for the six months ended June 30, ~~2018~~2019 and ~~2017,~~2018, respectively.

Certain residential mortgage loans are originated for sale in the secondary mortgage loan market. These loans are classified as held for sale and carried at fair value as WesBanco has elected the fair value option. Fair value is determined based on rates obtained from the secondary market for loans with similar characteristics. WesBanco sells loans to the secondary market on a mandatory or best efforts basis. The loans sold on a mandatory basis are not committed to an investor until the loan is closed with the borrower. WesBanco enters into forward TBA contracts to manage the interest rate risk between the loan commitment and the closing of the loan. The loans sold on a best efforts basis are committed to an investor simultaneous to the interest rate commitment with the borrower.

All derivatives are carried on the consolidated balance sheet at fair value. Derivative assets are classified in the consolidated balance sheet under other assets, and derivative liabilities are classified in the consolidated balance sheet under other liabilities. Changes in fair value are recognized in earnings. None of WesBanco’s derivatives ~~are~~is designated in a qualifying hedging ~~relationships~~relationship under ASC 815.

The table below presents the fair value of WesBanco’s derivative financial instruments as well as their classification on the Balance Sheet as of June 30, ~~2018~~2019 and December 31, ~~2017:~~2018:

The table below presents the change in the fair value of the Company’s derivative financial instruments reflected within the othernon-interest income line item of the consolidated income statement for the three and six months ended June 30, 2019 and 2018, ~~and 2017,~~ respectively.

      For the Three Months Ended    For the Six Months Ended

Location of Gain/(Loss)
   June 30,    June 30,
(unaudited, in thousands)
      2018    2017    2018    2017
Interest rate swaps

Other income
   $ 44    $ (108 )    $ 211    $ (303 )
Interest rate loan commitments

Mortgage banking income
   7    —      143    123
Forward TBA contracts

Mortgage banking income
   (11 )    —      399    —








Total
      $ 40    $ (108 )    $ 753    $ (180 )

WesBanco has agreements with its derivative counterparties that contain a provision, ~~where~~which provides that if WesBanco defaults on any of its indebtedness, including default where repayment of the indebtedness has not been accelerated by the lender, then WesBanco could also be declared in default on its derivative obligations.

WesBanco also has agreements with certain of its derivative counterparties that contain a provision where if WesBanco fails to maintain its status as either a well or adequately capitalized institution, then the counterparty could terminate the derivative positions and WesBanco would be required to settle its obligations under the agreements.

WesBanco has minimum collateral posting thresholds with certain of its derivative counterparties and has posted collateral with a market value of ~~$2.3~~$21.3 million as of June 30, ~~2018.~~2019. If WesBanco had breached any of these provisions at June 30, ~~2018,~~2019, it could have been required to settle its obligations under the agreements at the termination value and would have been required to pay any additional amounts due in excess of amounts previously posted as collateral with the respective counterparty.

The following table presents the net periodic pension cost for WesBanco’s Defined Benefit Pension Plan (the “Plan”) and the related components:

The Plan covers all employees of WesBanco and its subsidiaries who were hired on or before August 1, 2007 who satisfy minimum age and length of service requirements, and is not available to employees hired after such date.

A minimum required contribution of ~~$5.1~~$4.8 million is due for ~~2018,~~2019, which could be ~~all~~offset in whole or ~~partially offset~~in part by the Plan’s ~~$56.9~~$52.5 million available credit balance. WesBanco made a voluntary contribution of ~~$2.5~~$3.0 million to the Plan in June ~~2018.~~2019.

WesBanco assumed ~~YCB’s obligation for a predecessor bank’s participation in~~FFKT’s postretirement medical benefit plan, which covers FFKT employees who meet the ~~Pentegra Defined Benefit Plan for Financial Institutions (“Pentegra Plan”). The participating employer~~service requirements. Benefits provided under this plan has been frozen to new participants since 2002. WesBanco spun off the assets from the Pentegra Plan, contributing approximately $2.8 million to satisfy the estimated final costs to do so. This spin off had no impact on earnings as the liability was included in YCB’s balance sheet as of the acquisition date. The distributed assets from the Pentegra Plan were transferred to a plan providing substantially the same benefitsare unfunded, and payments to the ~~participants.~~plan participants are made by WesBanco. The net periodic ~~pension income~~cost for ~~this~~the postretirement medical benefit plan totaled $59 thousand and $117 thousand for the three and six months ended June 30, ~~2018 was $62~~2019, respectively. The net periodic cost consisted of $115 thousand and ~~$0.1 million, respectively, which was comprised of a $0.2 million and a $0.3 million expected return on plan assets and a $3~~$228 thousand ~~and a $6 thousand recognized net actuarial gain partially offset by a $0.1 million and a $0.2 million~~in interest cost on projected benefit obligation for the three and six months ended June 30, ~~2018,~~2019, respectively, which was partially offset by a $56 thousand and a $111 thousand benefit of prior service cost amortization for the three and six months ended June 30, 2019, respectively.

~~No minimum contribution is due for this plan for fiscal year 2018; however, WesBanco made a voluntary contribution of $0.2 million to this plan in June 2018.~~

Fair value estimates are based on quoted market prices, if available, quoted market prices of similar assets or liabilities, or the present value of expected future cash flows and other valuation techniques. These valuations are significantly affected by discount rates, cash flow assumptions, and risk assumptions used. Therefore, fair value estimates may not be substantiated by comparison to independent markets and are not intended to reflect the proceeds that may be realizable in an immediate settlement of the instruments.

Fair value is determined at one point in time and is not representative of future value. These amounts do not reflect the total value of a going concern organization. Management does not have the intention to dispose of a significant portion of its assets and liabilities, and therefore the unrealized gains or losses should not be interpreted as a forecast of future earnings and cash flows.

The following is a discussion of assets and liabilities measured at fair value on a recurring basis and valuation techniques applied:

Investment securities:The fair value of investment securities which are measured on a recurring basis are determined primarily by obtaining quoted prices on nationally recognized securities exchanges or matrix pricing, which is a mathematical technique used widely in the industry to value debt securities without relying exclusively on quoted prices for the specific securities but rather by relying on the securities’ relationship to other similar securities. These securities are classified within level 1 or 2 in the fair value hierarchy. Positions that are not traded in active markets for which valuations are generated using assumptions not observable in the market or management’s best estimate are classified within level 3 of the fair value hierarchy. This includes certain specific municipal debt issues for which the credit quality and discount rate must be estimated.

Loans held for sale: Loans held for sale are carried, in aggregate, at fair value as WesBanco has elected the fair value option as of October 1, 2017. The use of a valuation model using quoted prices of similar instruments are significant inputs in arriving at the fair value and therefore loans held for sale are classified within level 2 of the fair value hierarchy.

Derivatives: WesBanco enters into interest rate swap agreements with qualifying commercial customers to meet their financing, interest rate and other risk management needs. These agreements provide the customer the ability to convert from variable to fixed interest rates. The credit risk associated with derivatives executed with customers is essentially the same as that involved in extending loans and is subject to normal credit policies and monitoring. Those interest rate swaps are economically hedged by offsetting interest rate swaps that WesBanco executes with derivative counterparties in order to offset its exposure on the fixed components of the customer interest rate swap agreements. The interest rate swap agreement with the loan customer and with the counterparty is reported at fair value in other assets and other liabilities on the consolidated balance sheet with any resulting gain or loss recorded in current period earnings as other income and other expense.

WesBanco enters into forward TBA contracts to manage the interest rate risk between the loan commitments to the customer and the closing of the loan for loans that will be sold on a mandatory basis to secondary market investors. The forward TBA contract is reported at fair value in other assets and other liabilities on the consolidated balance sheet with any resulting gain or loss recorded in current period’s earnings as mortgage banking income.

WesBanco determines the fair value for derivatives using widely accepted valuation techniques including discounted cash flow analysis on the expected cash flows of each derivative. This analysis reflects contractual terms of the derivative, including the period to maturity, and uses observable market-based inputs, including interest rate curves and implied volatilities. WesBanco incorporates credit valuation adjustments to appropriately reflect both its ownnon-performance risk and the respective counterparty’snon-performance risk in the fair value measurements.

We may be required from time to time to measure certain assets and liabilities at fair value on a nonrecurring basis in accordance with GAAP. These adjustments to fair value usually result from the application of lower of cost or market accounting or write-downs of individual assets and liabilities.

~~Impaired loans:~~ Impaired loans are carried at the lower of cost or the fair value of the collateral for collateral-dependent loans. Collateral may be in the form of real estate or business assets including equipment, inventory and accounts receivable. The use of independent appraisals, discounted cash flow models and management’s best judgment are significant inputs in arriving at the fair value measure of the underlying collateral and impaired loans are therefore classified within level 3 of the fair value hierarchy.

Other real estate owned and repossessed assets: Other real estate owned and repossessed assets are carried at the lower of the investment in the assets or the fair value of the assets less estimated selling costs. The use of independent appraisals and management’s best judgment are significant inputs in arriving at the fair value measure of the underlying collateral, and therefore other real estate owned and repossessed assets are classified within level 3 of the fair value hierarchy.

~~Loans held for sale:~~ Loans held for sale are carried, in aggregate, at fair value as WesBanco has elected the fair value option as of October 1, 2017. The use of a valuation model using quoted prices of similar instruments are significant inputs in arriving at the fair value and therefore loans held for sale are classified within level 2 of the fair value hierarchy.21

~~Certain investments that are measured at fair value using the net asset value per share (or its equivalent) practical expedient have not been categorized in the fair value hierarchy.~~ The fair value amounts presented in the table below are intended to permit reconciliation of the fair value hierarchy to the amounts presented in the statement of financial position. The following tables set forth WesBanco’s financial assets and liabilities that were accounted for at fair value on a recurring and nonrecurring basis by level within the fair value hierarchy as of June 30, ~~2018~~2019 and December 31, ~~2017:~~

      December 31, 2017
      Fair Value Measurements Using:

December 31,
   Quoted Prices in
Active Markets
for Identical
Assets    Significant
Other
Observable
Inputs    Significant
Unobservable
Inputs    Investments
Measured
at Net Asset
(unaudited, in thousands)
   2017    (level 1)    (level 2)    (level 3)    Value
Recurring fair value measurements

Equity securities
   $ 13,457    $ 11,391    $ —      $ —      $ 2,066
Debt securities -available-for-sale

U.S. Government sponsored entities and agencies
   71,843    —      71,843    —      —
Residential mortgage-backed securities and collateralized mortgage obligations of government agencies
   934,922    —      934,922    —      —
Commercial mortgage-backed securities and collateralized mortgage obligations of government sponsored entities and agencies
   114,867    —      114,867    —      —
Obligations of state and political subdivisions
   104,830    —      104,830    —      —
Corporate debt securities
   35,403    —      35,403    —      —










Total debt securities -available-for-sale
   $ 1,261,865    $ —      $ 1,261,865    $ —      $ —
Loans held for sale
   20,320    —      20,320    —      —
Other assets - interest rate derivatives agreements
   7,351    —      7,351    —      —










Total assets recurring fair value measurements
   $ 1,302,993    $ 11,391    $ 1,289,536    $ —      $ 2,066










Other liabilities - interest rate derivatives agreements
   $ 7,345    $ —      $ 7,345    $ —      $ —










Total liabilities recurring fair value measurements
   $ 7,345    $ —      $ 7,345    $ —      $ —










Nonrecurring fair value measurements


Impaired loans
   $ 1,717    $ —      $ —      $ 1,717    $ —
Other real estate owned and repossessed assets
   5,297    —      —      5,297    —










Total nonrecurring fair value measurements
   $ 7,014    $ —      $ —      $ 7,014    $ —










22

WesBanco’s policy is to recognize transfers between levels as of the actual date of the event or change in circumstances that caused the transfer. There were no significant transfers between level 1, 2 or 3 for the three and six months ended June 30, ~~2018~~2019 or for the year ended December 31, ~~2017.~~2018.

The following table presents additional quantitative information about assets measured at fair value on a nonrecurring basis and for which WesBanco has utilized level 3 inputs to determine fair value:

⁽¹⁾

(1)

Fair value is generally determined through independent appraisals of the underlying collateral, which generally include various level 3 inputs, which are not identifiable.

⁽²⁾

(2)

Appraisals may be adjusted by management for qualitative factors such as economic conditions and estimated liquidation expenses. The range and weighted average of appraisal adjustments and liquidation ~~expenses~~expense are presented as a percent of the appraisal.

⁽³⁾

(3)

Includes estimated liquidation ~~expenses~~expense and numerous dissimilar qualitative adjustments by management, which are not identifiable.

The estimated fair values of WesBanco’s financial instruments are summarized below:

																	Fair Value Measurements at
																	June 30, 2019
					Fair Value Measurements at June 30, 2018								Carrying		Fair Value		Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
*(unaudited, in thousands)*	Carrying Amount		Fair Value Estimate		Quoted Prices in Active Markets for Identical Assets (level 1)		Significant Other Observable Inputs (level 2)		Significant Unobservable Inputs (level 3)		Investments Measured at Net Asset Value		Amount		Estimate		(level 1)		(level 2)		(level 3)
Financial Assets
Cash and due from banks	$	155,559	$	155,559	$	155,559	$	—	$	—	$	—	$	194,355	$	194,355	$	194,355	$	—	$	—
Equity securities		13,494		13,494		13,494		—		—		—		11,817		11,817		11,817		—		—
Debt securitiesavailable-for-sale		1,796,571		1,796,571		—		1,796,571		—		—
Debt securitiesheld-to-maturity		1,019,746		1,016,111		—		1,015,540		571		—
Available-for-sale debt securities														2,129,284		2,129,284		—		2,127,682		1,602
Held-to-maturity debt securities														900,605		921,534		—		920,989		545
Net loans		6,745,261		6,647,280		—		—		6,647,280		—		7,686,995		7,674,887		—		—		7,674,887
Loans held for sale		12,053		12,053		—		12,053		—		—		18,649		18,649		—		18,649		—
Other assets - interest rate derivatives		11,048		11,048		—		11,048		—		—		13,281		13,281		—		13,281		—
Accrued interest receivable		33,868		33,868		33,868		—		—		—		38,450		38,450		38,450		—		—

Financial Liabilities
Deposits		7,668,604		7,678,825		6,292,076		1,386,749		—		—		8,694,928		8,695,779		7,329,812		1,365,967		—
Federal Home Loan Bank borrowings		1,248,406		1,240,239		—		1,240,239		—		—		1,121,283		1,127,210		—		1,127,210		—
Other borrowings		258,067		258,057		256,069		1,988		—		—		296,148		296,574		293,205		3,369		—
Subordinated debt and junior subordinated debt		165,420		153,405		—		153,405		—		—		156,534		144,410		—		144,410		—
Other liabilities - interest rate derivatives		10,832		10,832		—		10,832		—		—		14,774		14,774		—		14,774		—
Accrued interest payable		4,417		4,417		4,417		—		—		—		6,559		6,559		6,559		—		—

																	Fair Value Measurements at
					Fair Value Measurements at December 31, 2017												December 31, 2018
*(unaudited, in thousands)*	Carrying Amount		Fair Value Estimate		Quoted Prices in Active Markets for Identical Assets (level 1)		Significant Other Observable Inputs (level 2)		Significant Unobservable Inputs (level 3)		Investments Measured at Net Asset Value
													Carrying		Fair Value		Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
(in thousands)													Amount		Estimate		(level 1)		(level 2)		(level 3)
Financial Assets
Cash and due from banks	$	117,572	$	117,572	$	117,572	$	—	$	—	$	—	$	169,186	$	169,186	$	169,186	$	—	$	—
Equity securities		13,457		13,457		11,391		—		—		2,066		11,737		11,737		11,737		—		—
Debt securitiesavailable-for-sale		1,261,865		1,261,865		—		1,261,865		—		—
Debt securitiesheld-to-maturity		1,009,500		1,023,784		—		1,023,191		593		—
Available-for-sale debt securities														2,114,129		2,114,129		—		2,112,626		1,503
Held-to-maturity debt securities														1,020,934		1,020,743		—		1,020,195		548
Net loans		6,296,157		6,212,823		—		—		6,212,823		—		7,607,333		7,422,825		—		—		7,422,825
Loans held for sale		20,320		20,320		—		20,320		—		—		8,994		8,994		—		8,994		—
Other assets - interest rate derivatives		7,351		7,351		—		7,351		—		—		4,650		4,650		—		4,650		—
Accrued interest receivable		29,728		29,728		29,728		—		—		—		38,853		38,853		38,853		—		—

Financial Liabilities
Deposits		7,043,588		7,053,536		5,766,531		1,287,005		—		—		8,831,633		8,836,390		7,376,023		1,460,367		—
Federal Home Loan Bank borrowings		948,203		944,706		—		944,706		—		—		1,054,174		1,051,401		—		1,051,401		—
Other borrowings		184,805		184,814		182,785		2,029		—		—		290,522		290,854		288,918		1,936		—
Subordinated debt and junior subordinated debt		164,327		146,484		—		146,484		—		—		189,842		174,448		—		174,448		—
Other liabilities - interest rate derivatives		7,345		7,345		—		7,345		—		—		5,081		5,081		—		5,081		—
Accrued interest payable		3,178		3,178		3,178		—		—		—		4,627		4,627		4,627		—		—

The following methods and assumptions were used to measure the fair value of financial instruments recorded at cost on WesBanco’s consolidated balance sheets:

Cash and due from banks:The carrying amount for cash and due from banks is a reasonable estimate of fair value.

~~Debt securitiesheld-to-maturity:~~Held-to-maturity debt securities:Fair values for debt securitiesheld-to-maturity are determined in the same manner as ~~the~~ investment securities, which are described above.

Net loans:Fair values for loans are estimated using a discounted cash flow methodology. The discount rates take into account interest rates currently being offered to customers for loans with similar terms, the credit risk associated with the loan and other market factors, including liquidity.

WesBanco believes the discount rates are consistent with transactions occurring in the marketplace for both performing and distressed loan types. The carrying value is net of the allowance for loan losses and other associated premiums and discounts. Due to the significant judgment involved in evaluating credit quality, loans are classified within level 3 of the fair value hierarchy.

Accrued interest receivable:The carrying amount of accrued interest receivable approximates its fair value.

Deposits:The carrying amount is considered a reasonable estimate of fair value for demand, savings and other variable rate deposit accounts. The fair value of fixed maturity certificates of deposit is estimated by a discounted cash flow method using rates currently offered for deposits of similar remaining maturities.

Federal Home Loan Bank borrowings:The fair value of FHLB borrowings is based on rates currently available to WesBanco for borrowings with similar terms and remaining maturities.

Other borrowings:The carrying amount of federal funds purchased and overnight sweep accounts generally approximate fair value. Other repurchase agreements are based on quoted market prices if available. If market prices are not available, for certain fixed and adjustable rate repurchase agreements, then quoted market prices of similar instruments are used.

Subordinated debt and junior subordinated debt:The fair value of subordinated debt is estimated using discounted cash flow analyses based on the current borrowing rates for similar types of borrowing arrangements. Due to the pooled nature of junior subordinated debt owed to unconsolidated subsidiary trusts, which are not actively traded, estimated fair value is based on recent similar transactions of single-issuer trust preferred securities.

Accrued interest payable:The carrying amount of accrued interest payable approximates its fair value.

Off-balance sheet financial instruments:Off-balance sheet financial instruments consist of commitments to extend credit, including letters of credit. Fair values for commitments to extend credit are estimated using the fees currently charged to enter into similar agreements, taking into account the remaining terms of the agreements and the present credit standing of the counterparties. The estimated fair value of the commitments to extend credit and letters of credit are insignificant and therefore are not presented in the above tables.

NOTE 9.10. REVENUE RECOGNITION

WesBanco adopted ASU2014-09 as of January 1, 2018 under the modified retrospective approach and there was no material impact on WesBanco’s Consolidated Financial statements. Interest income, net securities gains (losses) ~~gains~~ and bank-owned life insurance are not in scope of ASC ~~606.~~606, Revenue from Contracts with Customers. For the revenue streams in scope of ASC 606 ~~including~~- trust fees, service charges on deposits, ~~electronic banking fees,~~ net securities brokerage revenue, payment processing fees, electronic banking fees, mortgage banking income and net gain or loss on sale of other real estate owned – there are no significant judgements related to the amount and timing of revenue recognition.

Trust fees: Fees are earned over a period of time between monthly and annually, per the related fee schedule. The fees are earned ratably over the period for investment, safekeeping and other services performed by WesBanco. The fees are accrued when earned based on the daily asset value on the last day of the quarter. In most cases, the fees are directly debited from the customer account.

Service charges on deposits: There are monthly service charges for both commercial and personal banking customers, which are earned over the month per the related fee schedule based on the customers’ deposits. There are also transaction-based fees, which are earned based on specific transactions or customer activity within the customers’ deposit accounts. These are earned at the time the transaction or customer activity occurs. The fees are debited from the customer account.

~~Electronic banking fees:~~ ~~Interchange and ATM fees are earned based on customer and ATM transactions. Revenue is recognized when the transaction is settled.~~

Net securities brokerage revenue: Commission income is earned based on customer transactions and management of investments. The commission income from customers’ transactions is recognized when the transaction is complete. The commission income from the management of investments is earned continuously over a quarterly period.

Payment processing fees:Payment processing fees are fees earned from the bill payment and electronic funds transfer (“EFT”) services provided under the name FirstNet. The fees are derived from both the individual consumer banking transactions and from businesses or service providers through monthly billing for total transactions occurring. These fees are earned at the time the transaction or customer activity occurs. The fees are debited from the customers’ deposit accounts or charged directly to the business or service provider.

Electronic banking fees: Interchange and ATM fees are earned based on customer and ATM transactions. Revenue is recognized when the transaction is settled.

Mortgage banking income: Income is earned when WesBanco-originated loans are sold to an investor on the secondary market. The investor bids on the loans. If the price is accepted, WesBanco delivers the loan documents to the investor. Once received and approved by the investor, revenue is recognized and the loans are derecognized from the Consolidated Balance Sheet. Prior to the loans being sold, they are classified as loans held for sale. Additionally, the changes in the fair value of the loans held for sale, loan commitments and related derivatives are included in mortgage banking income.

Net gain or loss on sale of other real estate owned: Net gain or loss is recorded when other real estate is sold to a third party and the Bank collects substantially all of the consideration to which WesBanco is entitled in exchange for the transfer of the property.

The following table summarizes the point of revenue recognition and the income recognized for each of the revenue streams for the three and six months ended June 30, ~~2018:~~2019 and 2018, respectively:


							Point of Revenue	For the Three Months Ended June 30,				For the Six Months Ended June 30,
*(unaudited, in thousands)*	Point of Revenue Recognition		For the Three Months Ended June 30, 2018		For the Six Months Ended June 30, 2018		Recognition	2019		2018		2019		2018
Revenue Streams
Trust fees
Trust account fees		Over time	$	3,558	$	7,850	Over time	$	4,208	$	3,558	$	9,263	$	7,850
WesMark fees		Over time		2,194		4,405	Over time		2,131		2,194		4,191		4,405

Total trust fees				5,752		12,255			6,339		5,752		13,454		12,255
Service charges on deposits
Commercial banking fees		Over time		462		869	Over time		499		462		967		869
Personal service charges		At a point in time & Over time		4,684		9,100	At a point in time & over time		5,698		4,684		11,780		9,100

Total service charges on deposits				5,146		9,969			6,197		5,146		12,747		9,969
Net securities brokerage revenue
Annuity commissions		At a point in time		1,310		2,510	At a point in time		1,454		1,310		2,815		2,510
Equity and debt security trades		At a point in time		87		189	At a point in time		103		87		206		189
Managed money		Over time		163		304	Over time		174		163		331		304
Trail commissions		Over time		249		476	Over time		242		249		481		476
Total net securities brokerage revenue									1,973		1,809		3,833		3,479

Total net securities brokerage revenue				1,809		3,479
Payment processing fees (1)							At a point in time & over time		785		—		1,433		—
Electronic banking fees		At a point in time		5,728		10,558	At a point in time		7,154		5,728		13,046		10,558
Mortgage banking income		At a point in time		1,670		2,776	At a point in time		1,618		1,670		2,674		2,776
Net gain or loss on sale of other real estate owned		At a point in time		229		491
Net gain on other real estate owned and other assets							At a point in time		376		229		512		491

⁽¹⁾Payment processing fees are included in other non-interest income.

NOTE ~~10.~~11. COMPREHENSIVE INCOME/(LOSS)

The activity in accumulated other comprehensive income for the ~~three and~~ six months ended June 30, ~~2018~~2019 and ~~2017~~2018 is as follows:


	Accumulated Other Comprehensive Income/(Loss)⁽¹⁾												Accumulated Other Comprehensive Income/(Loss)⁽¹⁾
*(unaudited, in thousands)*	Defined Benefit Pension Plan			Unrealized Gains (Losses) on Debt Securities Available-for-Sale			Unrealized Gains on Debt Securities Transferred from Available-for-Sale to Held-to-Maturity			Total			Defined Benefit Plans			Unrealized Gains (Losses) on Debt Securities Available-for-Sale			Unrealized Gains on Debt Securities Transferred from Available-for-Sale to Held-to-Maturity			Total
Balance at December 31, 2017	$	(18,626	)	$	(13,250	)	$	381		$	(31,495	)

Balance at December 31, 2018													$	(16,542	)	$	(21,522	)	$	193		$	(37,871	)
Other comprehensive income before reclassifications		—			(21,720	)		—			(21,720	)		—			40,996			—			40,996
Amounts reclassified from accumulated other comprehensive income		1,026			—			(100	)		926			1,129			(30	)		(111	)		988
Period change														1,129			40,966			(111	)		41,984
Balance at June 30, 2019													$	(15,413	)	$	19,444		$	82		$	4,113

Period change		1,026			(21,720	)		(100	)		(20,794	)
Adoption of Accounting Standard ASU2016-01⁽²⁾		—			(1,063	)		—			(1,063	)

Balance at June 30, 2018	$	(17,600	)	$	(36,033	)	$	281		$	(53,352	)


Balance at December 31, 2016	$	(17,758	)	$	(9,890	)	$	522		$	(27,126	)

Balance at December 31, 2017													$	(18,626	)	$	(13,250	)	$	381		$	(31,495	)
Other comprehensive income before reclassifications		—			3,932			—			3,932			—			(21,720	)		—			(21,720	)
Amounts reclassified from accumulated other comprehensive income		1,164			35			(123	)		1,076			1,026			—			(100	)		926

Period change		1,164			3,967			(123	)		5,008			1,026			(21,720	)		(100	)		(20,794	)

Balance at June 30, 2017	$	(16,594	)	$	(5,923	)	$	399		$	(22,118	)

Adoption of Accounting Standard ASU 2016-01														—			(1,063	)		—			(1,063	)
Balance at June 30, 2018													$	(17,600	)	$	(36,033	)	$	281		$	(53,352	)

⁽¹⁾ All amounts are net of tax. Related income tax expense or benefit is calculated using a combined Federal and State income tax rate approximating 23%.

⁽¹⁾	~~All amounts are net of tax. Related income tax expense or benefit is calculated using a combined Federal and State income tax rate approximating 23% in 2018 and 37% in all prior periods.~~

⁽²⁾	~~See Note 1, Summary of Significant Accounting Policies for additional information about WesBanco’s adoption of ASU2016-01.~~

The following table provides details about amounts reclassified from accumulated other comprehensive income for the three and six months ended June 30, ~~2018~~2019 and ~~2017,~~2018, respectively:


Details about Accumulated Other Comprehensive Income Components	For the Three Months Ended June 30,						For the Six Months Ended June 30,						Affected Line Item in the Statement of Net Income
Details about Accumulated Other Comprehensive Income/(Loss) Components														For the Three Months Ended June 30,						For the Six Months Ended June 30,						Affected Line Item in the Statement of Net Income
*(unaudited, in thousands)*	2018			2017			2018			2017				2019			2018			2019			2018
Securitiesavailable-for-sale⁽¹⁾:
Net securities gains/losses reclassified into earnings	$	—		$	55		$	—		$	55		Net securities gains(Non-interest income)
Related income tax benefit		—			(20	)		—			(20	)	Provision for income taxes

Debt securities available-for-sale ⁽¹⁾:
Net securities losses (gains) reclassified into earnings														$	4		$	—		$	(38	)	$	—		Net securities gains (Non-interest income)
Related income tax (benefit) expense															(1	)		—			8			—		Provision for income taxes
Net effect on accumulated other comprehensive income for the period		—			35			—			35				3			—			(30	)		—

Securitiesheld-to-maturity⁽¹⁾:
Debt securities held-to-maturity ⁽¹⁾:
Amortization of unrealized gain transferred fromavailable-for-sale		(66	)		(118	)		(131	)		(189	)	Interest and dividends on securities (Interest and dividend income)		(94	)		(66	)		(149	)		(131	)	Interest and dividends on securities (Interest and dividend income)
Related income tax expense		15			44			31			66		Provision for income taxes		21			15			38			31		Provision for income taxes

Net effect on accumulated other comprehensive income for the period		(51	)		(74	)		(100	)		(123	)			(73	)		(51	)		(111	)		(100	)

Defined benefit pension plan⁽²⁾:
Defined benefit plans ⁽²⁾:
Amortization of net loss and prior service costs		764			809			1,520			1,610		Employee benefits(Non-interest expense)		758			764			1,509			1,520		Employee benefits (Non-interest expense)
Related income tax benefit		(175	)		(300	)		(494	)		(446	)	Provision for income taxes		(173	)		(175	)		(380	)		(494	)	Provision for income taxes

Net effect on accumulated other comprehensive income for the period		589			509			1,026			1,164				585			589			1,129			1,026

Total reclassifications for the period	$	538		$	470		$	926		$	1,076			$	515		$	538		$	988		$	926

⁽¹⁾For additional detail related to unrealized gains on securities and related amounts reclassified from accumulated other comprehensive income, see Note 4, “Securities.”

⁽¹⁾	~~For additional detail related to unrealized gains on securities and related amounts reclassified from accumulated other comprehensive income, see Note 4, “Securities.”~~

⁽²⁾	~~Included in the computation of net periodic pension cost. See Note 7, “Pension Plan”~~ ⁽²⁾Included in the computation of net periodic pension cost. See Note 8, “Pension & Postretirement Medical Benefit Plans” for additional detail.

NOTE ~~11.~~12. COMMITMENTS AND CONTINGENT LIABILITIES

Commitments —In the normal course of business, WesBanco offersoff-balance sheet credit arrangements to enable its customers to meet their financing objectives. Those instruments involve, to varying degrees, elements of credit and interest rate risk in excess of the amount recognized in the financial statements. WesBanco’s exposure to credit losses in the event ofnon-performance by the other parties to the financial instruments for commitments to extend credit and standby letters of credit is limited to the contractual amount of those instruments. WesBanco uses the same credit policies in making commitments and conditional obligations as for all other lending. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. Since many of the commitments are expected to expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements. The allowance for credit losses associated with commitments was ~~$0.6~~$1.8 million and $0.7 million as of June 30, ~~2018~~2019 and December 31, ~~2017,~~2018, respectively, and is included in other liabilities on the Consolidated Balance Sheets.

Letters of credit are conditional commitments issued by banks to guarantee the performance of a customer to a third party. Those guarantees are primarily issued to support public and private borrowing arrangements, including normal business activities, bond financing and similar transactions. Letters of credit are considered guarantees. The liability associated with letters of credit was $0.2 million as of ~~both~~ June 30, ~~2018~~2019 and December 31, ~~2017.~~2018.

Contingent obligations ~~and~~to purchase loans funded by other ~~guarantees~~entities include affordable housing plan guarantees, credit card guarantees, ~~and~~loans sold with recourse as well as obligations ~~under~~to the ~~FHLB’s loan purchasing program.~~FHLB. Affordable housing plan guarantees are performance guarantees for various building project loans. The guarantee amortizes as the loan balances decrease. Credit card guarantees are credit card balances not owned by WesBanco, whereby the Bank guarantees the performance of the cardholder. ~~The mortgages sold to FHLB obligate WesBanco to reimburse the FHLB for a portion of any loan balances that default.~~

The following table presents total commitments to extend credit, guarantees and various letters of credit outstanding:


	June 30,		December 31,		June 30,		December 31,
*(unaudited, in thousands)*	2018		2017		2019		2018
Lines of credit	$	1,571,547	$	1,452,697	$	1,909,282	$	1,894,030
Loans approved but not closed		354,696		245,644		299,081		258,778
Overdraft limits		126,101		126,671		152,207		153,572
Letters of credit		38,716		31,951		45,960		42,841
Contingent obligations and other guarantees		5,818		6,700		48,654		61,509

Contingent Liabilities —WesBanco is a party to various legal and administrative proceedings and claims. While any litigation contains an element of uncertainty, management does not believe that a material loss related to such proceedings or claims pending or known to be threatened is reasonably possible.

NOTE ~~12.~~13. BUSINESS SEGMENTS

WesBanco operates two reportable segments: community banking and trust and investment services. WesBanco’s community banking segment offers services traditionally offered by full-service commercial banks, including commercial demand, individual demand and time deposit accounts, as well as commercial, mortgage and individual installment loans, and certainnon-traditional offerings, such as insurance and securities brokerage services. The trust and investment services segment offers trust services as well as various alternative investment products including mutual funds. The market value of assets managed or held in custody by the trust and investment services segment was approximately ~~$4.0~~$4.5 billion and ~~$3.8~~$4.0 billion at June 30, ~~2018~~2019 and ~~2017,~~2018, respectively. These assets are held by WesBanco in fiduciary or agency capacities for their customers and therefore are not included as assets on WesBanco’s Consolidated Balance Sheets.

Condensed financial information by business segment is presented below:


			Trust and						Trust and
	Community		Investment				Community		Investment
*(unaudited, in thousands)*	Banking		Services		Consolidated		Banking		Services		Consolidated
For the Three Months ended June 30, 2018:
For The Three Months Ended June 30, 2019
Interest and dividend income	$	98,888	$	—	$	98,888	$	119,543	$	—	$	119,543
Interest expense		16,541		—		16,541		21,083		—		21,083

Net interest income		82,347		—		82,347		98,460		—		98,460
Provision for credit losses		1,708		—		1,708		2,747		—		2,747

Net interest income after provision for credit losses		80,639		—		80,639		95,713		—		95,713
Non-interest income		17,656		5,752		23,408		24,817		6,339		31,156
Non-interest expense		60,026		3,517		63,543		67,957		3,995		71,952

Income before provision for income taxes		38,269		2,235		40,504		52,573		2,344		54,917
Provision for income taxes		6,865		470		7,335		9,611		492		10,103

Net income	$	31,404	$	1,765	$	33,169	$	42,962	$	1,852	$	44,814

For the Three Months ended June 30, 2017:
For The Three Months Ended June 30, 2018
Interest and dividend income	$	82,160	$	—	$	82,160	$	98,888	$	—	$	98,888
Interest expense		10,021		—		10,021		16,541		—		16,541

Net interest income		72,139		—		72,139		82,347		—		82,347
Provision for credit losses		2,383		—		2,383		1,708		—		1,708

Net interest income after provision for credit losses		69,756		—		69,756		80,639		—		80,639
Non-interest income		16,550		5,572		22,122		17,656		5,752		23,408
Non-interest expense		52,754		3,130		55,884		60,026		3,517		63,543

Income before provision for income taxes		33,552		2,442		35,994		38,269		2,235		40,504
Provision for income taxes		8,676		977		9,653		6,865		470		7,335

Net income	$	24,876	$	1,465	$	26,341	$	31,404	$	1,765	$	33,169

For the Six Months ended June 30, 2018:
For the Six Months Ended June 30, 2019
Interest and dividend income	$	185,203	$	—	$	185,203	$	238,596	$	—	$	238,596
Interest expense		29,667		—		29,667		41,774		—		41,774

Net interest income		155,536		—		155,536		196,822		—		196,822
Provision for credit losses		3,876		—		3,876		5,254		—		5,254

Net interest income after provision for credit losses		151,660		—		151,660		191,568		—		191,568
Non-interest income		35,236		12,255		47,491		45,475		13,454		58,929
Non-interest expense		110,920	��	7,194		118,114		138,233		8,152		146,385

Income before provision for income taxes		75,976		5,061		81,037		98,810		5,302		104,112
Provision for income taxes		13,276		1,063		14,339		17,848		1,113		18,961

Net income	$	62,700	$	3,998	$	66,698	$	80,962	$	4,189	$	85,151

For the Six Months ended June 30, 2017:
For the Six Months Ended June 30, 2018
Interest and dividend income	$	162,084	$	—	$	162,084	$	185,203	$	—	$	185,203
Interest expense		19,226		—		19,226		29,667		—		29,667

Net interest income		142,858		—		142,858		155,536		—		155,536
Provision for credit losses		5,094		—		5,094		3,876		—		3,876

Net interest income after provision for credit losses		137,764		—		137,764		151,660		—		151,660
Non-interest income		33,290		11,716		45,006		35,236		12,255		47,491
Non-interest expense		103,746		6,522		110,268		110,920		7,194		118,114

Income before provision for income taxes		67,308		5,194		72,502		75,976		5,061		81,037
Provision for income taxes		18,196		2,078		20,274		13,276		1,063		14,339

Net income	$	49,112	$	3,116	$	52,228	$	62,700	$	3,998	$	66,698

Totalnon-fiduciary assets of the trust and investment services segment were ~~$1.7~~$3.9 million (including $2.6 million of trust customer intangibles) and ~~$1.6~~$1.7 million at June 30, ~~2018~~2019 and ~~2017,~~2018, respectively. All other assets, including goodwill and the remainder of other intangible assets, were allocated to the ~~community~~Community Banking segment.

NOTE 14 SUBSEQUENT EVENTS

On July 23, 2019, WesBanco and Old Line Bancshares, Inc. (“Old Line”), a bank holding company headquartered in Bowie, MD with approximately $3.1 billion in assets, $2.4 billion in loans, $2.4 billion deposits, $0.4 billion in stockholders’ equity and 37 branches, jointly announced that a definitive Agreement and Plan of Merger was executed providing for the merger of Old Line with and into WesBanco. On the date of the announcement, the transaction was valued at approximately $500.1 million. Under the terms of the Agreement and Plan of Merger (“Agreement”), which has been approved by that board of directors of both companies, WesBanco will exchange its common stock for Old Line common stock at closing, subject to customary conditions. Old Line options will be exchanged for WesBanco shares, as adjusted as to exercise price and number of options to take into account the fixed exchange ratio stated in the Agreement. Old Line stockholders will be entitled to receive 0.7844 shares of WesBanco common stock per each share of Old Line common stock for a total value of $29.22 per share, as of the date of the announcement. The receipt by Old Line stockholders of shares of WesBanco common stock in exchange for their shares of Old Line common stock is anticipated to qualify as a tax-free exchange. The acquisition is subject to the approvals of the appropriate banking ~~segment.~~regulatory authorities and the stockholders of Old Line and WesBanco. It is expected that the transaction will be completed in the fourth quarter of 2019 or first quarter of 2020.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Management’s Discussion and Analysis (“MD&A”) represents an overview of the results of operations and financial condition of WesBanco for the three and six months ended June 30, ~~2018.~~2019. This discussion and analysis should be read in conjunction with the Consolidated Financial Statements and Notes thereto.

FORWARD-LOOKING STATEMENTS

Forward-looking statements in this report relating to WesBanco’s plans, strategies, objectives, expectations, intentions and adequacy of resources, are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. The information contained in this report should be read in conjunction with WesBanco’s Form10-K for the year ended December 31, ~~2017~~2018 and documents subsequently filed by WesBanco with the Securities and Exchange Commission (“SEC”), including WesBanco’s Form 10-Q for the quarter ended March 31, 2019, which are available at the SEC’s website, www.sec.gov or at WesBanco’s website, www.wesbanco.com. Investors are cautioned that forward-looking statements, which are not historical fact, involve risks and uncertainties, including those detailed ~~in WesBanco’s most recent Annual Report on Form10-K~~ ~~filed with the SEC~~ under “Risk Factors” in Part I, Item ~~1A.~~1A of WesBanco’s Annual Report on Form 10-K. Such statements are subject to important factors that could cause actual results to differ materially from those contemplated by such statements, including, without limitation, that the businesses of WesBanco ~~FTSB~~ and ~~FFKT~~Old Line may not be integrated successfully or such integration may take longer to accomplish than ~~expected;~~excepted; the expected cost savings and any revenue synergies from the merger of WesBanco ~~FTSB~~ and ~~FFKT~~Old Line may not be fully realized within the expected timeframes; disruption from the merger of WesBanco ~~FTSB~~ and ~~FFKT~~Old Line may make it more difficult to maintain relationships with clients, associates, or suppliers; the effects of changing regional and national economic conditions; changes in interest rates, spreads on earning assets and interest-bearing liabilities, and associated interest rate sensitivity; sources of liquidity available to WesBanco and its related subsidiary operations; potential future credit losses and the credit risk of commercial, real estate, and consumer loan customers and their borrowing activities; actions of the Federal Reserve, ~~Board,~~ the FDIC, the SEC, FINRA, the Municipal Securities Rulemaking Board, the Securities Investors Protection Corporation, and other regulatory bodies; potential legislative and federal and state regulatory actions and reform, including, without limitation, the impact of the implementation of the Dodd-Frank Act; adverse decisions of federal and state courts; fraud, scams and schemes of third parties; ~~internet hacking;~~cyber security breaches; competitive conditions in the financial services industry; rapidly changing technology affecting financial services; marketability of debt instruments and corresponding impact on fair value adjustments; and/or other external developments materially impacting WesBanco’s operational and financial performance. WesBanco does not assume any duty to update forward-looking statements.

OVERVIEW

WesBanco is a multi-state bank holding company operating through ~~177~~199 branches and ~~167~~194 ATM machines in West Virginia, Ohio, western Pennsylvania, Kentucky, and southern Indiana, offering retail banking, corporate banking, personal and corporate trust services, brokerage services, mortgage banking and insurance. WesBanco’s businesses are significantly impacted by economic factors such as market interest rates, federal monetary and regulatory policies, local and regional economic conditions and the competitive environment’s effect upon WesBanco’s business volumes. WesBanco’s deposit levels are affected by numerous factors including personal savings rates, personal income, and competitive rates on alternative investments, as well as competition from other financial institutions within the markets we serve and liquidity needs of WesBanco. Loan levels are also subject to various factors including construction demand, business financing needs, consumer spending and interest rates, as well as loan terms offered by competing lenders.

On April 5, 2018, WesBanco completed its acquisition of FTSB, a bank holding company headquartered in Huntington, WV with approximately $706.1 million in assets, excluding goodwill, $590.0 million in deposits and $448.3 million in loans. FTSB’s results were included in WesBanco’s results from the date of the merger consummation.

APPLICATION OF CRITICAL ACCOUNTING POLICIES AND ESTIMATES

WesBanco’s critical accounting policies involving the significant judgments and assumptions used in the preparation of the Consolidated Financial Statements as of June 30, ~~2018~~2019 have remained unchanged from the disclosures presented in WesBanco’s Annual Report on Form10-K for the year ended December 31, ~~2017~~2018 within the section “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

RESULTS OF OPERATIONS

EARNINGS SUMMARY

Net income for the three months ended June 30, ~~2018~~2019 was ~~$33.2~~$44.8 million, with diluted earnings per share of ~~$0.71,~~$0.82, compared to ~~$26.3~~$33.2 million and ~~$0.60~~$0.71 per diluted share, respectively, for the second quarter of ~~2017. For~~2018. Net income for the six months ended June 30, ~~2018, net income~~2019 was $85.2 million, with diluted earnings per share of $1.56, compared to $66.7 million orand $1.47 per diluted share, ~~compared~~respectively for the six months ended June 30, 2018. Excluding after-tax merger-related expenses (non-GAAP measure) in both periods, net income and diluted earnings per share would have increased 19.9% to ~~$52.2~~$44.9 million, or ~~$1.19~~$0.82 per diluted share ~~for the 2017 period. Excludingafter-tax~~ ~~merger-related expenses(non-GAAP~~ ~~measure), net income~~ for the three months ended June 30, ~~2018, increased 42.2% year-over-year to $37.4 million, or $0.80 per diluted share~~2019, as compared to ~~$0.60 per diluted share in~~ the prior year quarter; and net income for the six months ended June 30, ~~2018~~2019 increased ~~35.4%~~23.2% year-over-year to ~~$71.2~~$87.7 million, or ~~$1.57~~$1.60 per diluted share versus ~~$1.19~~$1.57 per diluted share in the prior year period.


	For the Three Months Ended June 30,										For the Six Months Ended June 30,											For The Three Months Ended June 30,											For the Six Months Ended June 30,
	2018						2017				2018						2017					2019					2018						2019						2018
*(unaudited, dollars in thousands,* *except per share amounts)*	Net Income			Diluted Earnings Per Share			Net Income		Diluted Earnings Per Share		Net Income			Diluted Earnings Per Share			Net Income			Diluted Earnings Per Share		Net Income			Diluted Earnings Per Share		Net Income			Diluted Earnings Per Share			Net Income			Diluted Earnings Per Share			Net Income			Diluted Earnings Per Share
Net income(Non-GAAP)⁽¹⁾	$	37,445		$	0.80		$	26,341	$	0.60	$	71,167		$	1.57		$	52,547		$	1.19	$	44,878		$	0.82	$	37,445		$	0.80		$	87,670		$	1.60		$	71,167		$	1.57
Less: After tax merger-related expenses		(4,276	)		(0.09	)		—		—		(4,469	)		(0.10	)		(319	)		—		(64	)		—		(4,276	)		(0.09	)		(2,519	)		(0.04	)		(4,469	)		(0.10	)

Net income (GAAP)	$	33,169		$	0.71		$	26,341	$	0.60	$	66,698		$	1.47		$	52,228		$	1.19	$	44,814		$	0.82	$	33,169		$	0.71		$	85,151		$	1.56		$	66,698		$	1.47

⁽¹⁾ Non-GAAP net income excludes after-tax merger-related expenses. The above non-GAAP financial measures used by WesBanco provide information useful to investors in understanding WesBanco’s operating performance and trends, and facilitate comparisons with the performance of WesBanco’s peers.

⁽¹⁾	~~Non-GAAP~~ ~~net income excludesafter-tax~~ ~~merger-related expenses. The abovenon-GAAP~~ financial measures used by WesBanco provide information useful to investors in understanding WesBanco’s operating performance and trends, and facilitate comparisons with the performance of WesBanco’s peers.

Net interest income increased ~~$10.2~~$16.1 million or ~~14.2% during~~19.6% in the second quarter of ~~2018 as~~2019 compared to the same quarter of ~~2017~~2018 due to ~~a 12.4%~~an 11.5% increase in average ~~total~~earning assets. In addition, the yield on earning assets ~~primarily driven~~has increased a total of 34 basis points since the second quarter of 2018 while there was somewhat of an offset by a 17 basis points increase in the ~~acquisition~~cost of ~~FTSB and related purchase accounting income. For~~interest bearing liabilities, producing an increase in the ~~six months ended June 30, 2018,~~net spread on earning assets of 17 basis points year-over-year. The net interest ~~income~~margin increased ~~$12.7 million or 8.9%~~by 24 basis points to 3.67% in the second quarter of 2019 compared to 3.43% in the second quarter of 2018. The net interest margin benefited from increases in the Federal Reserve Board’s target federal funds rate during 2018 as well as an increase in non-interest bearing demand deposits. The increase in the cost of interest bearing liabilities is primarily due to higher ~~average total earning assets from a larger investment portfolio~~rates for interest bearing public funds, higher certificates of deposit costs and ~~the earning assets acquired from FTSB.~~certain Federal Home Loan Bank and other borrowings. Accretion from prior acquisitions benefited the second quarter net interest margin by approximately 1218 basis points, as compared to 812 basis points in the prior year period.

The provision for credit losses ~~decreased~~increased to $2.7 million in the second quarter of 2019, compared to $1.7 million in the second quarter of ~~2018,~~2018. The increased provision is due primarily to a $40.8 million increase in criticized and classified loans as of June 30, 2019 as compared to ~~$2.4 million~~June 30, 2018, reflecting our normal loan grade review process post-acquisition of FFKT, as well as two larger downgraded relationships in the ~~second quarter of 2017, due to continued strength in the~~legacy loan ~~credit quality and minimal overall loan growth.~~portfolio, as reported last quarter. Net charge-offs, as a percentage of average portfolio loans ofwas 0.05% and 0.03% ~~in the~~for second quarter of 2019 and 2018, ~~were lower than the 0.09% in the second quarter of 2017.~~respectively.

For the second quarter of ~~2018,~~2019, non-interest income ~~of $23.4 million~~ increased ~~$1.3~~$7.7 million or ~~5.8% from~~33.1% compared to the second quarter of ~~2017,~~2018 driven by ~~higher~~net securities gains, electronic banking fees, service charges on deposit and ~~mortgage banking income. The $0.7~~payment processing fees. Net securities gains increased $2.6 million ~~increase in electronic~~due to the sale of WesBanco’s Visa Class B shares. Electronic banking fees ~~was primarily driven by higher volumes and an ATM fee increase. Residential mortgage origination volumes~~ increased ~~33% year-over-year during the second quarter, which was primarily responsible for the $0.7 million increase in mortgage banking income. For the six months ended June 30, 2018,non-interest~~ ~~income increased $2.5~~$1.4 million or ~~5.5% primarily driven by~~24.9%, service charges on deposits increased ~~bank-owned life insurance due to higher death benefits received during the first quarter of 2018 and increased electronic banking fees, as noted above.~~

~~Total operating expenses continued to be well-controlled in the second quarter. Excluding merger-related expenses,non-interest~~ ~~expense increased $2.2~~$1.1 million or ~~4.0%~~20.4%, payment processing fees increased $0.8 million or 100% and trust fees increased $0.6 million or 10.2% for the second quarter of ~~2018 as~~2019 compared to the second quarter of ~~2017. This increase is due to higher salaries~~2018. Payment processing fees are from a business acquired from FFKT, which provides bill payment and ~~wages, which~~electronic funds transfer services for its customers. Non-interest income increased ~~$3.3~~$11.4 million primarily due to the higher staffing levels from the acquisition of FTSB, normal salary increases and a reclassification of pension service cost from employee benefits due to the adoption of a new accounting standard as of January 1, 2018. Strong discretionary expense management across most other expense categories limited the impact of higher salaries to total expenses. Excluding merger-related expensesor 24.1% for the six months ended June 30, ~~2018,non-interest~~ ~~expense increased $2.7 million or 2.4%~~2019 as compared to the six months ended June 30, ~~2017, reflecting~~2018.

Non-interest expense in the ~~acquisition~~second quarter of 2019 increased by $8.4 million or 13.2%, compared to the second quarter of 2018, which is primarily due to the FTSB ~~partially offset by strong~~and FFKT acquisitions. Salaries and wages increased $4.8 million or 17.8% and employee benefit expense ~~management.~~

~~The effective income tax rate~~increased $1.7 million or 21.8% compared to last year’s second quarter as full-time equivalent personnel increased 15.3% due in part to the FTSB and ~~associated provision for income taxes~~FFKT acquisitions as well as additions to key revenue-producing positions throughout the markets. For the second quarter of 2019, merger-related expenses were $0.1 million related to the FFKT merger as compared to $5.4 million for the second quarter of 2018 ~~are reflective of~~related to the ~~recently enacted “Tax Cuts~~FTSB and ~~Jobs Act”, which lowered the statutory Federal income tax rate for corporations to 21%.~~ FFKT mergers.

During the second quarter, the effective tax rate was ~~18.1%~~18.40% as compared to ~~26.8%~~18.11% last year, while the provision for income taxes ~~decreased $2.3~~increased $2.8 million to ~~$7.3~~$10.1 million ~~despite~~due to higher year-over-yearpre-tax income.

NET INTEREST INCOME

TABLE 1. NET INTEREST INCOME


	For the Three Months Ended						For the Six Months Ended
	June 30,						June 30,						For the Three Months Ended June 30,						For the Six Months Ended June 30,
*(unaudited, dollars in thousands)*	2018			2017			2018			2017			2019			2018			2019			2018
Net interest income	$	82,347		$	72,139		$	155,536		$	142,858		$	98,460		$	82,347		$	196,822		$	155,536
Taxable equivalent adjustments to net interest income		1,344			2,619			2,629			5,253

Taxable equivalent adjustment to net interest income														1,367			1,344			2,840			2,629
Net interest income, fully taxable equivalent	$	83,691		$	74,758		$	158,165		$	148,111		$	99,827		$	83,691		$	199,662		$	158,165

Net interest spread,non-taxable equivalent		3.15	%		3.18	%		3.13	%		3.17	%		3.32	%		3.15	%		3.33	%		3.13	%
Benefit of netnon-interest bearing liabilities		0.23	%		0.15	%		0.22	%		0.14	%		0.30	%		0.23	%		0.30	%		0.22	%

Net interest margin		3.38	%		3.33	%		3.35	%		3.31	%		3.62	%		3.38	%		3.63	%		3.35	%
Taxable equivalent adjustment		0.05	%		0.12	%		0.06	%		0.12	%		0.05	%		0.05	%		0.05	%		0.06	%

Net interest margin, fully taxable equivalent		3.43	%		3.45	%		3.41	%		3.43	%		3.67	%		3.43	%		3.68	%		3.41	%

Net interest income, which is WesBanco’s largest source of revenue, is the difference between interest income on earning assets, primarily loans and securities, and interest expense on liabilities, ~~(deposits~~primarily deposits and short and long-term ~~borrowings).~~borrowings. Net interest income is affected by the general level of, and changes in interest rates, the steepness and shape of the yield curve, changes in the amount and composition of interest earning assets and interest bearing liabilities, as well as the frequency of repricing of existing assets and liabilities. Net interest income increased ~~$10.2~~$16.1 million or ~~14.2%~~19.6% in the second quarter of ~~2018~~2019 compared to ~~2017,~~the second quarter of 2018, due to ~~a 12.4%~~an 11.5% increase in average earning asset balances, primarily driven by the acquisition of ~~FTSB~~FFKT and related net asset accretion from purchase ~~accounting income.~~accounting. For the first six months of ~~2018,~~2019, net interest income increased ~~$12.7~~$41.3 million or ~~8.9%~~26.5% for the same reasons along with ~~higher securities balances.~~the acquisition of FTSB. Average loan balances increased by ~~6.6%~~13.5% in the second quarter of ~~2018~~2019 from the acquisition of ~~FTSB~~FFKT compared to the second quarter of ~~2017, as organic~~2018. Organic loan growth ~~was roughly flat year-over-year~~decreased 1.1% from ~~continued targeted reductions in the consumer portfolio~~last year due to ~~reduce its risk profile~~lower home equity loan balances due to lower demand as a result of higher interest rates and tax changes, elevated levels of commercial real estate loans moving to ~~an aggressive~~the secondary ~~financing market.~~market and continued deleveraging by commercial customers reflective of the current operating environment and higher cash levels from tax reform. Total average deposits increased in the second quarter of ~~2018~~2019 by ~~$585.3 million~~$1.1 billion or ~~8.2%~~14.5% compared to the second quarter of ~~2017, while certificates of deposit, which have~~2018, due specifically to the ~~highest overall~~deposits acquired from FFKT. The net interest ~~cost among deposits,~~margin increased by ~~only $11.4 million or 0.8% over~~24 basis points to 3.67% in the second quarter of 2019 from the same ~~time period.~~quarter of 2018. The ~~effect of multiple~~margin benefited from increases in the Federal Reserve’s target federal funds rate ~~over the past year~~during 2018 and higher margins on the ~~net interest margin were~~acquired FFKT assets, partially offset by ~~lower tax equivalent yields ontax-exempt~~ ~~securities resulting from~~higher funding costs and a flattening of the ~~decrease~~yield curve in ~~the corporate tax rate to 21% for 2018. Due to this adjustment intax-equivalency,~~ ~~the net interest margin decreased to 3.43% for the second quarter of 2018 compared to 3.45% in the second quarter of 2017.~~2019. Yields increased for all earning asset categories in ~~2018 except fortax-exempt~~ ~~securities.~~2019. The cost of interest bearing liabilities increased by 3017 basis points from the second quarter of ~~2017~~2018 to the second quarter of ~~2018.~~2019. The increase in the cost is primarily due to rate increases for larger balance customers in interest bearing demand deposits, which include public funds, and higher rates for ~~certain~~certificates of deposit, customer repurchase agreements, short to medium-term Federal Home Loan Bank ~~borrowings.~~borrowings and junior subordinated debentures. Approximately 1218 basis points of accretion from ~~the FTSB~~FFKT and other prior acquisitions was included in the ~~2018~~ second quarter 2019 net interest margin compared to 812 basis points in the ~~2017~~2018 second quarter net interest margin.

Interest income increased ~~$16.7~~$20.7 million or ~~20.4%~~20.9% in the second quarter of ~~2018~~2019 and ~~$23.1~~$53.4 million or ~~14.3%~~28.8% in the first half of ~~2018~~2019 compared to the same periods of ~~2017~~2018 due to higher overall earning assets, particularly from the ~~acquisition of~~ FTSB and FFKT acquisitions, and higher yields in ~~almost~~ every earning asset category. Earning asset yields were influenced positively in the second quarter of ~~2018~~2019 compared to the second quarter of ~~2017~~2018 due to ~~three~~ federal funds rate increases occurring ~~during~~through the ~~past twelve months.~~second half of 2018. Average loan balances increased by ~~$419.6~~$914.8 million or ~~6.6%~~13.5% in the second quarter of ~~2018~~2019 compared to the ~~same period~~second quarter of ~~2017,~~2018, due to the acquisition of ~~FTSB.~~FFKT. Loan yields increased by 4038 basis points during this same period to ~~4.64%~~5.02% from the previously mentioned federal funds rate ~~increases.~~increases and accretion from purchase accounting from the FFKT acquisition. Loans provide the greatest impact on interest income and the yield on earning assets as they have the largest balance and the highest yield within major earning asset categories. In the second quarter of ~~2018,~~2019, average loans represented ~~69.4%~~70.6% of average earning assets, ~~a decrease~~an increase from ~~73.2%~~69.4% in the second quarter of ~~2017, primarily due to purchases of taxable securities exceeding average loan growth.~~2018. Average taxable securities balances increased by ~~$578.3~~$207.7 million or ~~37.3%~~9.8% from the second quarter of ~~2017, consistent with management’s strategy of growing total assets above $10 billion, which occurred during~~2018, primarily due to the ~~first quarter of 2018 to improve profitability. Total~~securities acquired in the FFKT acquisition. Taxable securities yields increased by 815 basis points and tax-exempt securities yields increased by 10 basis points in ~~2018~~the second quarter of 2019 from the second quarter of ~~2017~~2018 due to higher market rates on all securities ~~but were offset somewhat by a lowertax-equivalency~~ ~~benefit ontax-exempt~~ ~~securities, resulting from~~acquired and purchased over the ~~“Tax Cuts and Jobs Act”, which decreased the corporate tax rate from 35% to 21%.Tax-exempt~~ ~~securities yields decreased 74 basis points in the second quarter of 2018 from the second quarter of 2017 from the lowertax-equivalency~~ ~~benefit; however, this yield decrease had no effect on net interest income, as the tax effect is included in the provision for income taxes.~~last four quarters. The average balance oftax-exempt securities, which have the highest yields within securities, ~~also~~ decreased to ~~26.1%~~24.1% of total average securities in ~~2018 compared to 31.7% in~~ the second quarter of ~~2017. Taxable securities yields increased by 25 basis points~~2019 compared to 26.1% in the second quarter of 2018, ~~as compared to the second quarter of 2017~~mostly due to the ~~previously mentioned purchases at higher current rates.~~sale of lower-yielding tax-exempt municipal securities late in the first quarter of 2019.

Total portfolio loans increased ~~$402.5~~$945.0 million or ~~6.3%~~13.9% over the last twelve months, while total commercial loans increased ~~$333.9~~$694.4 million or ~~8.0%~~15.5%. Loan growth was achieved through ~~$1.9~~$2.5 billion in total loan originations, led by ~~$1.2~~$1.6 billion in business loan originations for the past twelve months. Loan growth was driven by the acquisition of ~~FTSB,~~FFKT, expanded market areas and additional commercial personnel in our core markets, partially offset by significant loan paydowns or payoffs as some loans moved into the secondary lending market by customers who refinanced their ~~mortgages, and targeted reductions of the consumer portfolio to reduce the risk profile of the loan portfolio.~~commercial real estate mortgages.

Interest expense increased ~~$6.5~~$4.5 million or ~~65.1%~~27.5% in the second quarter of ~~2018~~2019 and ~~$10.4~~$12.1 million or ~~54.3%year-to-date~~40.8% for the six months ended June 30, 2019 as compared to the same periods ~~of 2017,~~in 2018, due primarily to increases in the balances of interest bearing liabilities from the ~~acquisition~~acquisitions of FTSB and FFKT and increases in the rates paid on all interest bearing liability categories. The cost of interest bearing liabilities increased by 3017 basis points from the second quarter of ~~2017~~2018 to ~~0.91%~~1.08% in ~~the first quarter of 2018.~~2019. Average interest bearing deposits increased by ~~$360.8~~$662.1 million or ~~6.8%~~11.7% from the second quarter of ~~2017,~~2018, due ~~primarily~~ to the acquisition of ~~FTSB and organic deposit growth, which offset a $247.3 million or 17.6% decrease in certificates of deposit, excluding those acquired from FTSB.~~FFKT. The rate on interest bearing deposits increased by 17 basis points from the second quarter of ~~2017,~~2018, primarily from increases in rates on

interest bearing public ~~funds.~~funds and for certain larger balance customers. Averagenon-interest bearing demand ~~deposits~~deposit balances increased from the second quarter of ~~2017~~2018 to the second quarter of ~~2018~~2019 by ~~$224.5~~$456.1 million or ~~12.4%~~22.5% and ~~are now 26.4%~~were 28.2% of total average deposits at June 30, 2019, compared to ~~25.4% in 2017,~~26.4% at June 30, 2018, reflecting ~~customers’ preferences~~the acquired FFKT non-interest bearing demand deposits and ongoing checking account marketing strategies. Organic averagenon-interest bearing demand deposits increased ~~$99.4~~by $104.0 million or ~~5.5%~~5.1% during this same time period. The increase innon-interest bearing deposits ~~reflect~~reflects positively inon the net interest margin, as the benefit ofnon-interest bearing liabilities increased by 8seven basis points from the second quarter of ~~2017~~2018 to 2019. The average balance of FHLB borrowings decreased by $172.9 million from the second quarter of ~~2018.~~2018 to 2019; however, the average rate paid increased by 48 basis points to 2.50% over this same time period due to higher interest rates on new borrowings and the maturity of some legacy lower-rate borrowings in the first half of 2019. Average other borrowings and junior subordinated debt balances increased by ~~$127.4~~$39.2 million or ~~40.1%~~8.8% from the second quarter of ~~2017,~~2018 to 2019 due to the acquisition of ~~FTSB,~~FFKT, and their average rates paid increased by 7543 and 6638 basis points, respectively, over this same time period due to increases in LIBOR, the index upon which most of this variable-rate type of borrowing is priced. ~~The~~However, the increase was partially offset by a decrease in junior subordinated debt securities average balance due to a payoff of ~~FHLB borrowings increased by $233.6~~$9.2 million ~~from~~in the ~~second~~third quarter of 2017, and their average rate paid increased by 69 basis points to 2.02% over this same time period due to higher interest rates and the replacement of some maturing shorter-term borrowings with those of a medium-term length throughout 2017 and the first half of 2018 to improve asset sensitivity and liquidity measures.2018.

TABLE 2. AVERAGE BALANCE SHEETS AND NET INTEREST MARGIN ANALYSIS


	For the Three Months Ended June 30,										For the Six Months Ended June 30,										For The Three Months Ended June 30,										For the Six Months Ended June 30,
	2018					2017					2018					2017					2019					2018					2019					2018
	Average		Average			Average		Average			Average		Average			Average		Average			Average		Average			Average		Average			Average		Average			Average		Average
*(unaudited, dollars in thousands)*	Balance		Rate			Balance		Rate			Balance		Rate			Balance		Rate			Balance		Rate			Balance		Rate			Balance		Rate			Balance		Rate
ASSETS
Due from banks – interest bearing	$	53,896		2.09	%	$	12,875		0.75	%	$	31,436		2.08	%	$	13,398		0.63	%
Due from banks - interest bearing																					$	72,563		3.46	%	$	53,896		2.09	%	$	74,774		2.55	%	$	31,436		2.08	%
Loans, net of unearned income⁽¹⁾		6,785,550		4.64	%		6,365,965		4.24	%		6,563,782		4.54	%		6,322,582		4.22	%		7,700,355		5.02	%		6,785,550		4.64	%		7,680,062		5.04	%		6,563,782		4.54	%
Securities:⁽²⁾
Taxable		2,128,446		2.67	%		1,550,114		2.42	%		1,959,828		2.63	%		1,576,578		2.41	%		2,336,099		2.82	%		2,128,446		2.67	%		2,344,929		2.83	%		1,959,828		2.63	%
Tax-exempt⁽³⁾		750,138		3.41	%		720,561		4.15	%		733,970		3.41	%		723,593		4.15	%		741,371		3.51	%		750,138		3.41	%		775,845		3.49	%		733,970		3.41	%

Total securities		2,878,584		3.05	%		2,270,675		2.97	%		2,693,798		2.84	%		2,300,171		2.95	%		3,077,470		2.98	%		2,878,584		3.05	%		3,120,774		2.99	%		2,693,798		2.84	%
Other earning assets		57,259		5.72	%		46,525		4.62	%		53,843		5.86	%		46,774		4.52	%		50,555		7.26	%		57,259		5.72	%		51,330		7.28	%		53,843		5.86	%

Total earning assets⁽³⁾		9,775,289		4.11	%		8,696,040		3.91	%		9,342,859		4.05	%		8,682,925		3.88	%		10,900,943		4.45	%		9,775,289		4.11	%		10,926,940		4.45	%		9,342,859		4.05	%

Other assets		1,143,442					1,132,435					1,115,743					1,122,181					1,588,720					1,143,442					1,572,988					1,115,743

Total Assets	$	10,918,731				$	9,828,475				$	10,458,602				$	9,805,106				$	12,489,663				$	10,918,731				$	12,499,928				$	10,458,602

LIABILITIES AND SHAREHOLDERS’ EQUITY
LIABILITIES AND SHAREHOLDERS' EQUITY
Interest bearing demand deposits	$	1,849,035		0.68	%	$	1,634,305		0.37	%	$	1,773,813		0.64	%	$	1,585,564		0.33	%	$	2,139,372		0.81	%	$	1,849,035		0.68	%	$	2,134,514		0.78	%	$	1,773,813		0.64	%
Money market accounts		1,035,567		0.42	%		1,014,682		0.25	%		1,020,486		0.39	%		1,026,567		0.24	%		1,116,124		0.72	%		1,035,567		0.42	%		1,135,237		0.69	%		1,020,486		0.39	%
Savings deposits		1,367,193		0.07	%		1,253,444		0.06	%		1,327,875		0.06	%		1,240,390		0.06	%		1,676,477		0.16	%		1,367,193		0.07	%		1,668,160		0.15	%		1,327,875		0.06	%
Certificates of deposit		1,415,259		0.84	%		1,403,818		0.71	%		1,328,724		0.84	%		1,428,892		0.69	%		1,397,167		1.18	%		1,415,259		0.84	%		1,417,703		1.14	%		1,328,724		0.84	%

Total interest bearing deposits		5,667,054		0.53	%		5,306,249		0.36	%		5,450,898		0.50	%		5,281,413		0.35	%		6,329,140		0.70	%		5,667,054		0.53	%		6,355,614		0.68	%		5,450,898		0.50	%
Federal Home Loan Bank borrowings		1,180,939		2.02	%		947,346		1.33	%		1,109,586		1.90	%		948,168		1.27	%		1,008,027		2.50	%		1,180,939		2.02	%		1,030,396		2.47	%		1,109,586		1.90	%
Other borrowings		272,208		1.43	%		153,565		0.68	%		238,707		1.29	%		175,341		0.64	%		320,269		1.86	%		272,208		1.43	%		324,033		1.89	%		238,707		1.29	%
Junior subordinated debt		172,972		5.03	%		164,184		4.37	%		168,677		4.91	%		164,050		4.43	%

Subordinated debt and junior subordinated debt																						164,108		5.41	%		172,972		5.03	%		176,746		5.41	%		168,677		4.91	%
Total interest bearing liabilities⁽¹⁾		7,293,173		0.91	%		6,571,344		0.61	%		6,967,868		0.86	%		6,568,972		0.59	%		7,821,544		1.08	%		7,293,173		0.91	%		7,886,789		1.07	%		6,967,868		0.86	%
Non-interest bearing demand deposits		2,030,649					1,806,144					1,950,581					1,793,897					2,486,710					2,030,649					2,453,770					1,950,581
Other liabilities		77,873					73,721					80,681					74,748					131,219					77,873					132,657					80,681
Shareholders’ equity		1,517,036					1,377,266					1,459,472					1,367,489					2,050,190					1,517,036					2,026,712					1,459,472

Total Liabilities and Shareholders’ Equity	$	10,918,731				$	9,828,475				$	10,458,602				$	9,805,106				$	12,489,663				$	10,918,731				$	12,499,928				$	10,458,602

Taxable equivalent net interest spread				3.20	%				3.30	%				3.19	%				3.29	%				3.37	%				3.20	%				3.38	%				3.19	%
Taxable equivalent net interest margin				3.43	%				3.45	%				3.41	%				3.43	%				3.67	%				3.43	%				3.68	%				3.41	%

⁽¹⁾Gross of allowance for loan losses and net of unearned income. Includes non-accrual and loans held for sale. Loan fees included in interest income on loans totaled $0.4 million and $0.7 million for the three months ended June 30, 2019 and 2018, respectively and $0.9 million and $1.3 million for the six months ended June 30, 2019 and 2018, respectively. Additionally, loan accretion included in net interest income on loans acquired from acquisitions was $4.7 million and $2.2 million for the three months ended June 30, 2019 and 2018, respectively, and $9.6 million and $3.4 million for the six months ended June 30, 2019 and 2018, respectively. Accretion on interest bearing liabilities from acquisitions was $0.3 million and $0.7 million for the three months ended June 30, 2019 and 2018, respectively and $0.7 million and $0.9 million for the six months ended June 30, 2019 and 2018, respectively.

~~(1)~~

~~Gross of allowance for loan losses and net of unearned income. Includesnon-accrual~~ ~~and loans held for sale. Loan fees included in interest income~~⁽²⁾ Average yields on loans totaled $0.7 million and $1.0 million for the three months ended June 30, 2018 and 2017, respectively, and $1.3 million and $1.6 million for the six months ended June 30, 2018 and 2017, respectively. Additionally, loan accretion included in net interest income on loans acquired from prior acquisitions was $2.2 million and $1.3 million for the three months ended June 30, 2018 and 2017, respectively, and $3.4 million and $2.5 million for the six months ended June 30, 2018 and 2017, respectively. Accretion on interest bearing liabilities from prior acquisitions was $0.7 million and $0.4 million for the three months ended June 30, 2018 and 2017, respectively, and $0.9 million and $0.8 million for the six months ended June 30, 2018 and 2017, respectively.

~~(2)~~

~~Average yields on~~available-for-sale debt securities are calculated based on amortized cost.

~~(3)~~

~~Taxable equivalent basis is calculated ontax-exempt~~ ~~securities using a rate of 21% for 2018 and 35% for 2017.~~

⁽³⁾Taxable equivalent basis is calculated on tax-exempt securities using a rate of 21% for each period presented.

TABLE 3. RATE/VOLUME ANALYSIS OF CHANGES IN INTEREST INCOME AND INTEREST EXPENSE


	Three Months Ended June 30, 2018								Six Months Ended June 30, 2018									For The Three Months Ended June 30, 2019							For the Six Months Ended June 30, 2019
	Compared to June 30, 2017								Compared to June 30, 2017									Compared to June 30, 2018							Compared to June 30, 2018
*(unaudited, in thousands)*	Volume		Rate			Net Increase (Decrease)			Volume			Rate			Net Increase (Decrease)			Volume			Rate		Net Increase (Decrease)		Volume			Rate		Net Increase (Decrease)
Increase (decrease) in interest income:
Due from banks – interest bearing	$	13	$	7		$	20		$	1		$	2		$	3
Due from banks - interest bearing																		$	120		$	224	$	344	$	537		$	88	$	625
Loans, net of unearned income		4,505		6,673			11,178			5,173			10,240			15,413			11,127			6,750		17,877		26,798			17,448		44,246
Taxable securities		3,779		1,040			4,819			4,918			1,850			6,768			1,434			816		2,250		5,338			2,099		7,437
Tax-exempt securities⁽¹⁾		297		(1,381	)		(1,084	)		212			(2,702	)		(2,490	)		(73	)		183		110		726			279		1,005
Other earning assets		256		264			520			271			530			801			(76	)		173		97		(69	)		360		291

Total interest income change⁽¹⁾		8,850		6,603			15,453			10,575			9,920			20,495			12,532			8,146		20,678		33,330			20,274		53,604

Increase (decrease) in interest expense:
Interest bearing demand deposits		220		1,424			1,644			341			2,733			3,074			536			628		1,164		1,273			1,313		2,586
Money market accounts		14		435			449			(7	)		761			754			91			825		916		244			1,692		1,936
Savings deposits		17		25			42			27			22			49			61			390		451		129			655		784
Certificates of deposit		20		466			486			(362	)		973			611			(38	)		1,159		1,121		390			2,098		2,488
Federal Home Loan Bank borrowings		905		1,903			2,808			1,147			3,324			4,471			(538	)		872		334		(676	)		2,849		2,173
Other borrowings		294		417			711			256			716			972			191			319		510		658			849		1,507
Junior subordinated debt		99		281			380			104			406			510

Subordinated debt and junior subordinated debt																			(94	)		140		46		203			430		633
Total interest expense change		1,569		4,951			6,520			1,506			8,935			10,441			209			4,333		4,542		2,221			9,886		12,107

Net interest income increase (decrease)⁽¹⁾	$	7,281	$	1,652		$	8,933		$	9,069		$	985		$	10,054		$	12,323		$	3,813	$	16,136	$	31,109		$	10,388	$	41,497

⁽¹⁾ Taxable equivalent basis is calculated on tax-exempt securities using a tax rate of 21%.

~~(1)~~

~~Taxable equivalent basis is calculated ontax-exempt~~ ~~securities using a tax rate of 21% for 2018 and 35% for 2017.~~

PROVISION FOR CREDIT LOSSES

The provision for credit losses is the amount to be added to the allowance for credit losses after net charge-offs have been deducted to bring the allowance to a level considered appropriate to absorb ~~probable~~ losses inincurred within the loan portfolio. The provision for credit losses also includes the amount to be added to the reserve for loan commitments to bring that reserve to a level considered appropriate to absorb ~~probable~~ losses incurred on unfunded commitments. The provision for credit losses ~~decreased~~increased to $2.7 million in the second quarter of 2019 compared to $1.7 million in the second quarter of 2018 ~~compared to $2.4 million in the second quarter of 2017~~ due primarily to the ~~consistent high quality of~~increase in the ~~loan portfolio. Overall, most credit ratios continued to improve on a percentage basis, year-over-year.~~provision for Commercial Real Estate – Improved Property. Non-performing loans (including TDRs), and ~~criticized and classified loans all~~non-performing assets both improved as a percentage of total portfolio loans from June 30, ~~2017. Totalnon-performing~~2018. Non-performing loans were ~~0.57%~~0.50% of total loans atas of June 30, ~~2018,~~2019, decreasing from ~~0.67%~~0.57% of total loans at the end of the second quarter of ~~2017.~~2018. Non-performing assets were 0.56% of total loans and other real estate and repossessed assets as of June 30, 2019, decreasing from 0.63% at the end of the second quarter of 2018. Criticized and classified loans were ~~1.08%~~1.48% of total loans, ~~improving~~increasing from ~~1.25% at~~1.08% as of June 30, ~~2017.~~2018. Past due loans at June 30, 2019 and 2018 were 0.23% of total ~~loans, compared to 0.33% at June 30, 2017.~~loans. Annualized net loan charge-offs ~~also decreased from 0.09% at~~increased slightly to 0.05% as of June 30, ~~2017~~2019 compared to 0.03% atas of June 30, 2018. (Please see the Allowance for Credit Losses section of this MD&A for additional discussion).

NON-INTEREST INCOME

~~NON-INTEREST~~ ~~INCOME~~

TABLE 4.NON-INTEREST INCOME


	For the Three Months Ended June 30,										For the Six Months Ended June 30,										For The Three Months Ended June 30,										For the Six Months Ended June 30,
*(unaudited, dollars in thousands)*	2018		2017		$ Change			% Change			2018		2017		$ Change			% Change			2019		2018		$ Change			% Change			2019		2018		$ Change			% Change
Trust fees	$	5,752	$	5,572	$	180			3.2	%	$	12,255	$	11,716	$	539			4.6	%	$	6,339	$	5,752	$	587			10.2		$	13,454	$	12,255	$	1,199			9.8
Service charges on deposits		5,146		5,081		65			1.3	%		9,969		9,933		36			0.4	%		6,197		5,146		1,051			20.4			12,747		9,969		2,778			27.9
Electronic banking fees		5,728		4,984		744			14.9	%		10,558		9,512		1,046			11.0	%		7,154		5,728		1,426			24.9			13,046		10,558		2,488			23.6
Net securities brokerage revenue		1,809		1,680		129			7.7	%		3,479		3,442		37			1.1	%		1,973		1,809		164			9.1			3,833		3,479		354			10.2
Bank-owned life insurance		1,128		1,367		(239	)		(17.5	%)		3,884		2,508		1,376			54.9	%		1,340		1,128		212			18.8			2,659		3,884		(1,225	)		(31.5	)
Mortgage banking income		1,670		968		702			72.5	%		2,776		2,408		368			15.3	%		1,618		1,670		(52	)		(3.1	)		2,674		2,776		(102	)		(3.7	)
Net securities gains		358		494		(136	)		(27.5	%)		319		506		(187	)		(37.0	%)
Payment processing fees																						785		—		785			100.0			1,433		—		1,433			100.0
Net securities gains (losses)																						2,909		358		2,551			712.6			3,566		319		3,247			1,017.9
Net gain on other real estate owned and other assets		229		342		(113	)		(33.0	%)		491		307		184			59.9	%		376		229		147			64.2			512		491		21			4.3
Net insurance services revenue		711		735		(24	)		(3.3	%)		1,602		1,652		(50	)		(3.0	%)		786		711		75			10.5			1,695		1,602		93			5.8
Swap fee and valuation income		178		65		113			173.8	%		695		822		(127	)		(15.5	%)		511		178		333			187.1			880		695		185			26.6
Other		699		834		(135	)		(16.2	%)		1,463		2,200		(737	)		(33.5	%)		1,168		699		469			67.1			2,430		1,463		967			66.1

Totalnon-interest income	$	23,408	$	22,122	$	1,286			5.8	%	$	47,491	$	45,006	$	2,485			5.5	%	$	31,156	$	23,408	$	7,748			33.1		$	58,929	$	47,491	$	11,438			24.1

Non-interest income is a significant source of revenue and an important part of WesBanco’s results of operations. WesBanco offers its customers a wide range of retail, commercial, investment and electronic banking services, which are viewed as a vital component of WesBanco’s ability to attract and maintain customers, as well as providing additional fee income beyond normal spread-related income to WesBanco. For the second quarter of ~~2018,~~2019, non-interest income increased ~~$1.3~~$7.7 million or ~~5.8%~~33.1% compared to the second quarter of ~~2017.~~2018 primarily due to the acquisition of FFKT and securities gains. The increase is driven by a ~~$0.7~~$2.6 million increase in net securities gains, a $1.4 million increase in electronic banking fees, a ~~$0.7~~$1.1 million increase in ~~mortgage banking income~~service charges on deposits, and a ~~$0.2~~$0.8 million increase in ~~trust fees, partially offset by decreases in bank-owned life insurance, net securities gains and net gain on other real estate owned and other assets compared to the second quarter of 2017.~~payment processing fees. For the six months ended June 30, ~~2018, bank-owned life insurance~~2019, non-interest income increased ~~$1.4~~$11.4 million ~~electronic banking fees increased $1.0 million, trust fees increased $0.5 million, partially offset by an other income decrease of $0.7 million compared to~~or 24.1% from the first six months ~~ended June 30, 2017.~~of 2018 for similar reasons for the three months ended.

Trust fees increased ~~$0.2~~$0.6 million or ~~3.2%~~10.2% compared to the second quarter of ~~2017~~2019 due to the acquisition of FFKT as well as market improvements and customer and revenue development initiatives. Total trust assets have increased ~~$0.2~~$0.5 billion tofrom $4.0 billion ~~as of~~at June 30, 2018 ~~compared~~ to ~~$3.8~~$4.5 billion ~~as of~~at June 30, ~~2017. For the six months ended June 30, 2018, trust fees increased $0.5 million or 4.6% as compared to June 30, 2017.~~2019. At June 30, ~~2018,~~2019, trust assets include managed assets of ~~$3.3~~$3.6 billion andnon-managed (custodial) assets of ~~$0.7~~$0.9 billion. Assets managed for the WesMark Funds, a proprietary group of mutual funds that is advised by WesBanco Trust and Investment Services, were ~~$934.9~~$922.9 million as of June 30, ~~2018~~2019 and ~~$925.6~~$934.9 million at June 30, ~~2017~~2018 and are included in ~~trust-managed~~managed assets.

Service charges on deposits increased ~~$0.1~~$1.1 million or ~~1.3% compared to~~20.4% for the second quarter of ~~2017 due~~2019 compared to the prior year period primarily because of the increased customer base from the ~~FTSB~~FFKT acquisition. ~~The increase from the FTSB acquisition was partially offset by a decrease in transaction-based fees including insufficient funds fees as compared to the second quarter 2017.~~ Deposits increased ~~$0.7~~$1.0 billion to $8.7 billion as of June 30, 2019 as compared to $7.7 billion as of June 30, ~~2018 compared to $7.0 billion as of~~2018. Included in service charges on deposits for the three months ended June 30, ~~2017.~~2019 is a $0.6 million negative adjustment for dormancy fees that will be remitted to the State of Kentucky for accounts that should have been escheated in prior periods.

Electronic banking fees, which include debit card interchange fees, ~~increased $0.7~~continued to grow, increasing $1.4 million or ~~14.9%~~24.9% compared to the second quarter of ~~2017~~2018 due to ~~an increased~~the higher customer base from the ~~FTSB~~FFKT acquisition ~~a higher~~as well as an increased volume of debit card transactions from WesBanco’s legacy ~~customers and an ATM fee increase.~~customers. The volume increase in legacy customers is due to a higher percentage of customers using these products as well as marketing initiatives. Beginning on July 1, 2019, debit card interchange fees will decrease by less than $2 million in the third quarter of 2019 ~~WesBanco will have reduced debit card interchange revenue~~and between an estimated $2.5 - $3.0 million per quarter beginning in the fourth quarter of 2019 due to the ~~applicability~~impact of the Durbin ~~Amendment~~amendment from the 2010 passage of the Dodd-Frank ~~Act.~~Act on banks with total assets of $10 billion or greater.

Bank-owned life insurance ~~decreased~~increased $0.2 million or ~~17.5%~~18.8% compared to second quarter of ~~2017~~2018 due to ~~death claims~~an increase in ~~2017.~~the total cash surrender value, attributable to the WesBanco legacy bank-owned life insurance policies as well as the acquired FFKT bank-owned life insurance policies. For the six months ended June 30, ~~2018,~~2019, bank-owned life insurance ~~increased $1.4~~decreased by $1.2 million or ~~54.9%~~31.5% compared to the six months ended June 30, ~~2017~~2018 due to ~~death benefits received~~higher mortality proceeds in ~~first quarter of 2018. The total cash surrender value of bank-owned life insurance increased $1.4 million to $191.7 million as of June 30, 2018 compared to June 30, 2017.~~the prior period.

Mortgage banking income ~~increased $0.7~~remained flat decreasing $0.1 million ~~or 72.5% compared to second quarter of 2017 partially due to a $0.2 million favorable market adjustment recognized during~~in both the second quarter of ~~2018~~2019 compared to the prior year period and ~~higher margins on loans sold. Mortgage~~the six months ended June 30, 2019 compared to the prior year period. For the first half of 2019, mortgage production was ~~$141.5~~$257.4 million, which ~~increased 33.2%~~was an increase of 19.8% from the comparable ~~2017 quarter. Mortgages sold into the secondary market represented $50.0 million or 35.4% of overall mortgage loan production in the second quarter of~~ 2018 ~~compared to $58.4 million or 55.0% in the second quarter of 2017.~~period. For the six months ended June 30, 2019, $106.4 million mortgages were sold into the secondary market at a net margin of 2.8% as compared to $108.1 million at a net margin of 2.7% in the comparable 2018 period. Included in the mortgage banking income and the calculation of net margin noted above is a $0.8 million loss and a $0.6 million gain from the fair value adjustments on loans held for sale, loan commitments and related derivatives for the six months ended June 30, 2019 and 2018, respectively.

Payment processing fees are earned from the bill payment and electronic funds transfer (“EFT”) services provided under the name FirstNet, which was acquired from FFKT. Payment processing fee income was $0.8 million for the quarter ended June 30, 2019. There was no prior period income.

Net securities gains increased ~~$0.4~~$2.6 million ~~or 15.3%~~ compared to ~~June 30, 2017.~~

~~NON-INTEREST~~ ~~EXPENSE~~

~~TABLE 5.NON-INTEREST~~ ~~EXPENSE~~

   For the Three Months
Ended June 30,    For the Six Months
Ended June 30,
(unaudited, dollars in thousands)
   2018    2017    $ Change % Change 2018    2017    $ Change % Change
Salaries and wages
   $ 26,872    $ 23,616    $ 3,256 13.8 % $ 51,878    $ 46,618 �� $ 5,260 11.3 %
Employee benefits
   7,965    7,731    234 3.0 % 14,877    15,941    (1,064 ) (6.7 %)
Net occupancy
   4,103    4,510    (407 ) (9.0 %) 8,759    8,837    (78 ) (0.9 %)
Equipment
   4,095    4,097    (2 ) (0.0 %) 8,044    8,139    (95 ) (1.2 %)
Marketing
   1,405    2,060    (655 ) (31.8 %) 2,521    2,884    (363 ) (12.6 %)
FDIC insurance
   868    906    (38 ) (4.2 %) 1,526    1,733    (207 ) (11.9 %)
Amortization of intangible assets
   1,312    1,240    72 5.8 % 2,397    2,513    (116 ) (4.6 %)
Restructuring and merger-related expenses
   5,412    —      5,412 100.0 % 5,657    491    5,166 1052.1 %
Franchise and other miscellaneous taxes
   2,083    2,045    38 1.9 % 4,318    4,129    189 4.6 %
Postage and courier expenses
   985    970    15 1.5 % 1,945    1,990    (45 ) (2.3 %)
Consulting, regulatory, accounting and advisory fees
   1,747    1,654    93 5.6 % 3,278    3,328    (50 ) (1.5 %)
Other real estate owned and foreclosure expenses
   251    326    (75 ) (23.0 %) 449    655    (206 ) (31.5 %)
Legal fees
   644    650    (6 ) (0.9 %) 1,357    1,411    (54 ) (3.8 %)
Communications
   565    634    (69 ) (10.9 %) 1,054    1,381    (327 ) (23.7 %)
ATM and electronic banking interchange expenses
   1,299    1,202    97 8.1 % 2,515    2,291    224 9.8 %
Supplies
   778    901    (123 ) (13.7 %) 1,465    1,729    (264 ) (15.3 %)
Other
   3,159    3,342    (183 ) (5.5 %) 6,074    6,198    (124 ) (2.0 %)










Totalnon-interest expense
   $ 63,543    $ 55,884    $ 7,659 13.7 % $ 118,114    $ 110,268    $ 7,846 7.1 %

~~Non-interest~~ ~~expense in~~ the second quarter of 2018, ~~increased by $7.7 million or 13.7% compared to the same quarter in 2017 primarily~~ due to a gain of $2.6 million on the ~~FTSB acquisition, which closed on April 5, 2018. Excluding merger-related expenses,non-interest~~ ~~expense increased $2.2 million or 4.0%. For~~sale of WesBanco’s Visa Class B stock in the second quarter, ~~restructuring and merger-related expenses increased $5.4 million and salaries and wages increased $3.3 million, offset by~~which was held at a ~~$0.7 million decrease in marketing, a $0.4 million decrease in net occupancy, coupled with decreases in various other expense categories.~~zero cost basis. WesBanco holds no additional shares of Visa Class B stock. For the six months ended June 30, 2019, net securities gains increased $3.2 million from the six months ended June 30, 2018.

NON-INTEREST EXPENSE

TABLE 5. NON-INTEREST EXPENSE

	For The Three Months Ended June 30,										For the Six Months Ended June 30,
(unaudited, dollars in thousands)	2019		2018		$ Change			% Change			2019		2018		$ Change			% Change
Salaries and wages	$	31,646	$	26,872	$	4,774			17.8		$	62,585	$	51,878	$	10,707			20.6
Employee benefits		9,705		7,965		1,740			21.8			19,694		14,877		4,817			32.4
Net occupancy		5,385		4,103		1,282			31.2			10,951		8,759		2,192			25.0
Equipment		4,818		4,095		723			17.7			9,651		8,044		1,607			20.0
Marketing		1,254		1,405		(151	)		(10.7	)		2,497		2,521		(24	)		(1.0	)
FDIC insurance		1,155		868		287			33.1			2,508		1,526		982			64.4
Amortization of intangible assets		2,465		1,312		1,153			87.9			4,978		2,397		2,581			107.7
Restructuring and merger-related expenses		81		5,412		(5,331	)		(98.5	)		3,188		5,657		(2,469	)		(43.6	)
Franchise and other miscellaneous taxes		3,176		2,083		1,093			52.5			6,202		4,318		1,884			43.6
Consulting, regulatory, accounting and advisory fees		2,269		1,747		522			29.9			4,085		3,278		807			24.6
ATM and electronic banking interchange expenses		1,712		1,299		413			31.8			3,434		2,515		919			36.5
Postage and courier expenses		1,198		985		213			21.6			2,747		1,945		802			41.2
Legal fees		936		644		292			45.3			1,615		1,357		258			19.0
Communications		895		565		330			58.4			1,825		1,054		771			73.1
Supplies		1,106		778		328			42.2			2,246		1,465		781			53.3
Other real estate owned and foreclosure expenses		152		251		(99	)		(39.4	)		163		449		(286	)		(63.7	)
Other		3,999		3,159		840			26.6			8,016		6,074		1,942			32.0
Total non-interest expense	$	71,952	$	63,543	$	8,409			13.2		$	146,385	$	118,114	$	28,271			23.9

Non-interest expense in the second quarter of 2019 increased by $8.4 million or 13.2% compared to the same quarter in 2018, principally from the FFKT acquisition, which closed in the third quarter of 2018. Excluding merger-related expenses, non-interest expense increased $13.7 million or 23.6%. For the second quarter, salaries and wages increased ~~$5.3~~$4.8 million, employee benefits increased $1.7 million, net occupancy increased $1.3 million, amortization of intangible assets increased $1.2 million and ~~restructuring~~franchise and ~~merger-related expenses~~other miscellaneous taxes increased ~~$5.2~~by $1.1 million, ~~which were partially~~ offset by a ~~$1.1~~decrease of $5.3 million ~~decrease~~ in ~~employee benefits.~~merger-related expenses. For the six months ended June 30, 2019, non-interest expense increased by $28.3 million or 23.9% from the first six months of 2018 for similar reasons for the three months ended.

Salaries and wages increased ~~$3.3~~$4.8 million or ~~13.8%~~17.8% from the second quarter of ~~2017~~2018 due to increased compensation expense related to a ~~4.1%~~15.3% increase in full-time equivalent (“FTE”) employees ~~primarily related to~~from the ~~FTSB acquisition. In addition, due to the adoption of a new accounting standard, salaries~~FFKT acquisition and ~~wages included $0.7 million related to pension service expense for~~from annual merit increases in the second quarter of ~~2018, which was classified within employee benefits for the second quarter of 2017. The remaining increase is due to routine annual compensation adjustments and stock based compensation increases.~~2019. Employee benefits expense increased ~~$0.2~~$1.7 million compared to the second quarter of ~~2017 due to~~2018, primarily from a ~~$0.9~~$0.8 million increase in health care costs and a ~~$0.2~~$0.3 million increase in employer payroll ~~tax expense, offset by a $1.0~~taxes, which is primarily attributable to the increased headcount of 313 FTE employees since June 30, 2018.

Net occupancy costs increased $1.3 million ~~decrease in pension costs. Pension costs excluding the service component decreased $0.3 million for the second quarter 2018~~or 31.2% compared to the second quarter of ~~2017.~~

~~Net occupancy costs decreased $0.4 million or 9.0% compared to the second quarter of 2017,~~2018, primarily due to ~~decreased~~increased building-related costs from the additional branches acquired in the FFKT acquisition including utilities, lease expense, depreciation, repairs and other seasonal maintenance costs. ~~For~~Upon core conversion of FFKT in the first quarter of 2019, WesBanco closed or consolidated six ~~months ended June 30, 2018, net occupancy costs decreased 0.9% compared~~branches in Kentucky to reduce overlapping locations, which allows the ~~six months ended June 30, 2017.~~Company to operate more cost efficiently and provide better facilities.

~~Marketing expenses decreased $0.7~~Amortization of intangible assets increased $1.2 million or ~~31.8%~~87.9% compared to the second quarter of ~~2017.~~2018. The ~~decrease is primarily due~~FFKT acquisition added approximately $37.4 million in core deposit intangibles and $2.6 million in trust customer relationship intangibles.

Merger-related expenses in the second quarter of 2019 totaled $0.1 million related to the ~~timing of advertising~~FFKT acquisition that closed on August 20, 2018, and ~~promotional expense as WesBanco focused on~~decreased $5.3 million from the ~~FTSB acquisition during~~$5.4 million in merger-related expenses that were recorded in the second quarter of 2018 ~~a portion of which is accounted~~ for ~~in merger-related expenses. For~~ the ~~six months ended June 30, 2018, marketing expense decreased $0.4~~FTSB and FFKT acquisitions.

Franchise and other miscellaneous taxes increased by $1.1 million or ~~12.6% compared~~52.5% from the same quarter of 2018 due to a $0.6 million increase in the ~~six months ended June 30, 2017.~~

~~Restructuring and merger-related expenses in 2018 relate to the FTSB acquisition that closed on April 5, 2018 as well as~~Kentucky corporate franchise tax from the FFKT acquisition, which ~~is expected to close~~was headquartered in ~~the third quarter of 2018. The restructuring~~Kentucky. Real and ~~merger-related expenses in 2017 relate~~personal property taxes also increased by $0.3 million due to the YCB acquisition that closed on September 9, 2016. Of the $5.7 million in restructuring costs for the six months ended June 30, 2018, $5.0 million relate to FTSB and $0.7 million relate to FFKT. The FTSB costs included $2.2 million in contract termination and conversion costs, $0.8 million for investment banking services and $0.7 million for~~change-in-control~~ ~~payments. The $0.7 million FFKT costs are primarily for legal and investment banking services.~~

~~Communications expense decreased $0.1 million or 10.9% compared to the second quarter~~addition of 2017. For the six months ended June 30, 2018, communications expense decreased $0.3 million or 23.7% compared to the six months ended June 30, 2017. WesBanco improved the technology and communications infrastructure at the former~~YCB-acquired~~ ~~branches, which permitted cost savings as noted in the current period.~~FFKT’s branches.

INCOME TAXES

The provision for income taxes ~~decreased $2.3~~increased $2.8 million or ~~24.0%~~37.7% in the second quarter of ~~2018~~2019 compared to the second quarter of ~~2017,~~2018, primarily due to ~~the enacted Federal tax reform legislation that reduced the corporate federal income tax rate from 35% to 21% effective January 1, 2018. Partially offsetting this decrease~~a $14.4 million or 35.6% increase in ~~income tax expense, second quarter 2018~~pre-tax ~~income was 12.5% higher. As a result of these changes, the~~ income. The effective tax rate ~~decreased~~increased to ~~18.1%~~18.4% compared to ~~26.8%~~18.1% in the second quarter of ~~2017.~~2018. For the six months ended June 30, ~~2018,~~2019, the provision for income taxes ~~decreased $5.9~~increased $4.6 million or ~~29.3%,~~32.2% as compared to the prior year period. The effective tax rate for the first half of ~~2017, due in part~~2019 was 18.2% compared to ~~the decrease~~17.7% in the ~~federal income tax rate,~~prior year period.

FINANCIAL CONDITION

Total assets and shareholders’ equity increased 0.3% and 4.8%, respectively, while deposits decreased 1.5%, compared to December 31, 2018. Total securities decreased by $105.1 million or 3.3% from December 31, 2018 to June 30, 2019, primarily driven by the sale of lower yielding municipal securities and the repayment of mortgage-backed securities, which were partially offset by a ~~11.8%~~$53.1 million increase in~~pre-tax~~ ~~income. The effective tax rate was 17.7% for~~ unrealized gains in the six months ended June 30, 2018. WesBanco Bank Community Development Corporation (“WesBanco CDC”) was awarded multi-state New Market Tax Credits (“NMTC”) from the U.S. Department of the Treasury’s Community Development Financial Institutions Fund (“CDFI Fund”) totaling $40 million of investments, which would provide a federal tax credit of $15.6 million over seven years.

~~FINANCIAL CONDITION~~

Total assets increased 11.5%, while deposits and shareholders’ equity increased 8.9% and 9.2%, respectively, compared to December 31, 2017, primarily due to the acquisition of FTSB. Total securities increased by $545.0 million or 23.9% from December 31, 2017 to June 30, 2018, and was driven by management’s strategy to exceed the $10 billion threshold in total assets during the first quarter of 2018 by purchasing taxable securities. These purchases had an average yield of approximately 3.06%. In addition, the FTSB acquisition provided $142.9 million of additional securities.available-for-sale portfolio. Total portfolio loans increased ~~$451.5~~$81.6 million or ~~7.1% with $448.3~~1.1%. Deposits decreased $136.7 million from ~~the FTSB acquisition~~year-end resulting from a 6.2%, a 3.9%, and ~~the remaining $3.2 million from WesBanco’s growth~~a 0.6% decrease in ~~strategic focus categories outpacing targeted reductions in the consumer portfolio and increased secondary~~certificates of deposit, money market ~~residential mortgage loan sales. Deposits increased $625.0 million fromyear-end,~~ ~~primarily due to the acquisition of FTSB. Organic~~ deposits, ~~increased 0.5% as a result of increases of 5.0% and 4.6% in savings~~ and demand deposits, respectively, which ~~more than~~were partially offset ~~decreases of 2.6% and 12.7%~~by a 1.5% increase in ~~money market deposits and certificates of deposit, respectively.~~savings deposits. The decrease in certificates of deposit is a result of periodically offering lower than median competitive rates for maturing certificates of deposit, primarily for single-service customers, and customer preferences for other deposit types, coupled with a ~~$26.6~~$9.9 million decrease in ~~CDARS~~^®CDARS® balances. The ~~increase~~decrease in demand deposits and ~~savings~~money market deposits ~~were~~was primarily attributable to ~~marketing, incentives paid to customers, focused retail~~initial customer run-off from the FTSB and business strategies to obtain more account relationships, and customers’ preference for short-term maturities, coupled with deposits from bonus and royalty payments for Marcellus and Utica shale gas payments from energy companies in WesBanco’s southwestern Pennsylvania, eastern Ohio and northern West Virginia markets.FFKT acquisitions. Total borrowings increased ~~28.9%~~2.6% during the first six months of ~~2018~~2019 as ~~short-term borrowings increased $73.3 million,~~FHLB new ~~FHLB~~ borrowings exceeded maturities by ~~$247.9~~$67.1 million ~~with the FTSB acquisition providing an additional $52.3~~and other short-term borrowings increased $5.6 million, ~~in FHLB borrowings, and junior subordinated debt increased $1.1 million. The FTSB acquisition provided $9.3~~which were partially offset by $33.5 million inof junior subordinated debentures ~~which was partially offset by the redemption of $8.2 million in junior subordinated debentures in June 2018. Proceeds from borrowings were utilized to purchase investment securities~~redeemed during the first six months ~~ended June 30, 2018.~~of 2019. Total shareholders’ equity increased by approximately ~~$128.8~~$95.3 million or ~~9.2%~~4.8%, compared to December 31, ~~2017,~~2018, primarily due to ~~$107.3 million of common stock issued in the FTSB acquisition and~~ net income exceeding dividends for the period by ~~$40.4~~$51.3 million ~~which was partially offset by $21.9~~and a $42.0 million ~~in additional~~ other comprehensive loss. The other comprehensive loss resulted from a $22.9 million unrealized loss in the securities portfolio, which was partially offset by a $1.0 million unrealized gain in the defined benefit pension plan during the period. The tangible equity to tangible assets ratio~~(non-GAAP~~ ~~measure) decreased from 8.79% at December 31, 2017 to 8.43% at June 30, 2018 as tangible assets increased at a faster pace than shareholders’ equity, primarily as a result of the FTSB acquisition.~~income gain.

TABLE 6. COMPOSITION OF SECURITIES (1)

													June 30,			December 31,
*(unaudited, dollars in thousands)*	June 30, 2018			December 31, 2017			$ Change			% Change			2019			2018			$ Change			% Change
Equity securities (at fair value)	$	13,495		$	13,457		$	38			0.3		$	11,817		$	11,737		$	80			0.7
Available-for-sale debt securities (at fair value)
U.S. Treasury		9,913			—			9,913			100.0			29,781			19,878			9,903			49.8
U.S. Government sponsored entities and agencies		100,682			71,843			28,839			40.1			134,587			141,652			(7,065	)		(5.0	)
Residential mortgage-backed securities and collateralized mortgage obligations of government sponsored entities and agencies		1,373,417			934,922			438,495			46.9			1,563,042			1,561,255			1,787			0.1
Commercial mortgage-backed securities and collateralized mortgage obligations of government sponsored entities and agencies		140,647			114,867			25,780			22.4			178,656			168,972			9,684			5.7
Obligations of states and political subdivisions		126,799			104,830			21,969			21.0			183,178			185,114			(1,936	)		(1.0	)
Corporate debt securities		45,113			35,403			9,710			27.4			40,040			37,258			2,782			7.5

Totalavailable-for-sale debt securities	$	1,796,571		$	1,261,865		$	534,706			42.4		$	2,129,284		$	2,114,129		$	15,155			0.7

Held-to-maturity debt securities (at amortized cost)
U.S. Government sponsored entities and agencies	$	11,877		$	11,465		$	412			3.6		$	10,020		$	10,823		$	(803	)		(7.4	)
Residential mortgage-backed securities and collateralized mortgage obligations of government sponsored entities and agencies		161,090			170,025			(8,935	)		(5.3	)		136,929			148,300			(11,371	)		(7.7	)
Obligations of states and political subdivisions		813,456			794,655			18,801			2.4			720,399			828,520			(108,121	)		(13.0	)
Corporate debt securities		33,323			33,355			(32	)		(0.1	)		33,257			33,291			(34	)		(0.1	)

Totalheld-to-maturity debt securities		1,019,746			1,009,500			10,246			1.0			900,605			1,020,934			(120,329	)		(11.8	)

Total securities	$	2,829,812		$	2,284,822		$	544,990			23.9		$	3,041,706		$	3,146,800		$	(105,094	)		(3.3	)

Available-for-sale and equity securities:
Weighted average yield at the respective period end⁽²⁾		2.63	%		2.35	%								2.76	%		2.78	%
As a % of total securities		64.0	%		55.8	%								70.4	%		67.6	%
Weighted average life (in years)		4.9			4.2									4.4			5.0

Held-to-maturity securities:
Weighted average yield at the respective period end⁽²⁾		3.44	%		3.85	%								3.53	%		3.47	%
As a % of total securities		36.0	%		44.2	%								29.6	%		32.4	%
Weighted average life (in years)		4.8			4.2									3.7			4.6

Total securities:
Weighted average yield at the respective period end⁽²⁾		2.92	%		3.01	%								2.99	%		3.00	%
As a % of total securities		100.0	%		100.0	%								100.0	%		100.0	%
Weighted average life (in years)		4.8			4.2									4.1			4.2

⁽¹⁾ At June 30, 2019 and December 31, 2018, there were no holdings of any one issuer, other than U.S. government sponsored entities and its agencies, in an amount greater than 10% of WesBanco’s shareholders’ equity.

~~(1)~~

At June 30, 2018 and December 31, 2017, there were no holdings of any one issuer, other than U.S. government sponsored entities and its agencies, in an amount greater than 10% of WesBanco’s shareholders’ equity.

~~(2)~~

~~Weighted average yields have been calculated on a taxable-equivalent basis using the federal statutory tax rate of 21% in 2018 and 35% in 2017.~~

⁽²⁾ Weighted average yields have been calculated on a taxable-equivalent basis using the federal statutory tax rate of 21%.

Total investment securities, which are a source of liquidity for WesBanco as well as a contributor to interest income, ~~increased~~decreased by ~~$545.0~~$105.1 million or ~~23.9%~~3.3% from December 31, ~~2017~~2018 to June 30, ~~2018.~~2019. Through the first six months of ~~2018,~~2019, theavailable-for-sale portfolio increased by ~~$534.7~~$15.2 million or ~~42.4%~~0.7%, while theheld-to-maturity portfolio ~~increased~~decreased by ~~$10.2~~$120.3 million or ~~1.0%. The increase~~11.8% due to $67.4 million of held-to-maturity callable municipal securities being transferred to available-for-sale, with the adoption of ASU 2017-12. WesBanco elected to use the one-time transition election to transfer these securities as they were some of the lower yielding securities in the ~~overall~~municipal portfolio, ~~from December 31, 2017 was driven partially by the acquisition~~and subsequently sold $66.1 million of ~~FTSB, and more significantly by management’s strategy to exceed the $10 billion threshold in total assets during the first quarter of 2018 by purchasing mortgage-backed~~these securities ~~and collateralized mortgage obligations, with an average yield of approximately 3.06%.~~at a $51 thousand net gain. The weighted average yield of the portfolio decreased by 9one basis ~~points~~point from ~~3.01%~~3.00% at December 31, ~~2017~~2018 to ~~2.92%~~2.99% at June 30, ~~2018. Though~~2019, primarily due to increased prepayment speeds on mortgage-backed securities as market rates ~~increased~~declined in the ~~first six months~~second quarter. During the second quarter of ~~2018 on all securities purchased, the decrease in the corporate federal tax rate from 35% to 21% reduced thetax-equivalent~~ ~~yield by approximately 67 basis points on thetax-exempt~~ ~~municipal bond portfolio, as the tax benefit was reduced. This decrease in thetax-equivalent~~ ~~yield ontax-exempt~~ ~~municipals more than offset the general market rate increases, astax-exempt~~ ~~municipals comprise approximately 33% of WesBanco’s investment portfolio. The higher-yielding 2018 purchases helped to mitigate the impact of thetax-equivalent~~ ~~yield reduction~~2019, WesBanco recorded a $2.6 million gain on the ~~municipal bonds.~~sale of its Visa class B stock, which was held at zero cost basis. WesBanco holds no additional shares of Visa class B stock.

Net unrealized ~~losses~~gains (losses) onavailable-for-sale securities included in accumulated other comprehensive income, net of tax, as of June 30, ~~2018~~2019 and December 31, ~~2017~~2018 were ~~$36.0~~$19.4 million and ~~$13.3~~($21.5) million, respectively. With approximately ~~36%~~30% of the investment portfolio in theheld-to-maturity

category, the recent volatility in interest rates does not have as much impact on other comprehensive income as if the entire portfolio were included in the categoryavailable-for-sale.

Equity securities, of which a portion consist of investments in various mutual funds held in grantor trusts formed in connection with a key officer and director deferred compensation plan, are recorded at fair value. Gains and losses due to fair value fluctuations on equity securities are included in net securities gains or losses. For those equity securities relating to the key officer and director deferred compensation plan, the corresponding change in the obligation to the employee is recognized in employee benefits expense.

WesBanco’s municipal portfolio comprises ~~33.2%~~29.7% of the overall securities portfolio as of June 30, ~~2018, which is down from 39.4%~~2019 compared to 32.2% as of December 31, ~~2017 due to the first quarter mortgage-backed~~2018, and ~~CMO purchases. Municipal bonds carry~~it carries different risks that are not as prevalent in other security types contained in the portfolio. The following table presents the allocation of the municipal bond portfolio based on the combined S&P and Moody’s ratings of the individual bonds (at fair value):

TABLE 7. MUNICIPAL BOND RATINGS

   June 30, 2018    December 31, 2017
(unaudited, dollars in thousands)
   Amount    % of Total    Amount    % of Total
Municipal bonds (at fair value) (1):

Moody’s: Aaa / S&P: AAA
   $ 103,690    11.0    $ 96,253    10.5
Moody’s: Aa1 ; Aa2 ; Aa3 / S&P: AA+ ; AA ; AA-
   700,217    74.2    685,446    74.9
Moody’s: A1 ; A2 ; A3 / S&P: A+ ; A ; A-
   124,974    13.2    125,032    13.7
Moody’s: Baa1 ; Baa2 ; Baa3 / S&P: BBB+ ; BBB ;BBB- (2)
   1,760    0.2    745    0.1
Not rated by either agency (3)
   12,566    1.4    7,764    0.8








Total municipal bond portfolio
   $ 943,207    100.0    $ 915,240    100.0

	June 30, 2019				December 31, 2018
(unaudited, dollars in thousands)	Amount		% of Total		Amount		% of Total
Municipal bonds (at fair value) ⁽¹⁾:
Moody's: Aaa / S&P: AAA	$	98,021		10.6	$	101,557		10.0
Moody's: Aa1 ; Aa2 ; Aa3 / S&P: AA+ ; AA ; AA-		592,215		64.2		654,787		64.3
Moody's: A1 ; A2 ; A3 / S&P: A+ ; A ; A-		212,664		23.0		237,847		23.4
Moody's: Baa1 ; Baa2 ; Baa3 / S&P: BBB+ ; BBB ; BBB- ⁽²⁾		7,657		0.8		7,607		0.7
Not rated by either agency		12,370		1.4		16,595		1.6
Total municipal bond portfolio	$	922,927		100.0	$	1,018,393		100.0

⁽¹⁾The lowest available rating was used when placing the bond into a category in the table.

~~(1)~~

~~The highest available rating was used when placing the bond into a category in the table.~~

~~(2)~~

~~As of June 30, 2018 and December 31, 2017, there are no securities in the municipal portfolio rated below investment grade.~~

~~(3)~~

~~Non-rated~~ ~~municipal balances increased from December 31, 2017 due tonon-rated~~ ~~West Virginia municipal bonds in the acquired FTSB investment portfolio.~~

⁽²⁾ As of June 30, 2019 and December 31, 2018, there are no securities in the municipal portfolio rated below investment grade.

WesBanco’s municipal bond portfolio at June 30, ~~2018,~~2019 consists of ~~$188.8~~$182.8 million of taxable (primarily Build ~~America)~~America Bonds) and ~~$754.4~~$740.1 million oftax-exempt general obligation and revenue bonds. The following table presents additional information regarding the municipal bond type and issuer (at fair value):

TABLE 8. COMPOSITION OF MUNICIPAL SECURITIES


	June 30, 2018				December 31, 2017				June 30, 2019				December 31, 2018
*(unaudited, dollars in thousands)*	Amount		% of Total		Amount		% of Total		Amount		% of Total		Amount		% of Total
Municipal bond type:
General Obligation	$	654,368		69.4	$	630,824		68.9	$	625,476		67.8	$	690,463		67.8
Revenue		288,839		30.6		284,416		31.1		297,451		32.2		327,930		32.2

Total municipal bond portfolio	$	943,207		100.0	$	915,240		100.0	$	922,927		100.0	$	1,018,393		100.0

Municipal bond issuer:
State Issued	$	90,981		9.6	$	95,160		10.4	$	83,841		9.1	$	98,468		9.7
Local Issued		852,226		90.4		820,080		89.6		839,086		90.9		919,925		90.3

Total municipal bond portfolio	$	943,207		100.0	$	915,240		100.0	$	922,927		100.0	$	1,018,393		100.0

WesBanco’s municipal bond portfolio is broadly spread across the United States. The following table presents the top five states of municipal bond concentration based on total fair value at June 30, ~~2018:~~2019:

TABLE 9. CONCENTRATION OF MUNICIPAL SECURITIES

   June 30, 2018
(unaudited, dollars in thousands)
   Fair Value    % of Total
Pennsylvania
   $ 197,774    21.0
Texas
   105,683    11.2
Ohio
   103,424    11.0
Illinois
   50,236    5.3
West Virginia
   40,309    4.3
All other states
   445,781    47.2




Total municipal bond portfolio
   $ 943,207    100.0

	June 30, 2019
(unaudited, dollars in thousands)	Fair Value		% of Total
Pennsylvania	$	179,483		19.4
Ohio		100,090		10.8
Texas		98,586		10.7
Kentucky		55,466		6.0
Illinois		42,990		4.7
All other states ⁽¹⁾		446,312		48.4
Total municipal bond portfolio	$	922,927		100.0

⁽¹⁾ WesBanco’s municipal bond portfolio contains obligations in the State of West Virginia totaling $39.6 million or 4.3% of the total municipal portfolio.

WesBanco uses prices from independent pricing services and, to a lesser extent, indicative(non-binding) quotes from independent brokers, to measure the fair value of its securities. WesBanco validates prices received from pricing services or brokers using a variety of methods, including, but not limited to, comparison to secondary pricing services, corroboration of pricing by reference to other independent market data such as secondary broker quotes and relevant benchmark indices, review of pricing by personnel familiar with market liquidity and other market-related conditions, review of pricing service methodologies, review of independent auditor reports received from the pricing service regarding its internal controls, and through review of inputs and assumptions used in pricing certain securities thinly traded ~~securities~~ or with limited observable data points. The procedures in place provide management with a sufficient understanding of the valuation models, assumptions, inputs and pricing to reasonably measure the fair value of WesBanco’s securities. For additional disclosure relating to fair value measurements, refer to Note 8,9, “Fair Value Measurement” in the Consolidated Financial Statements.

LOANS AND CREDIT RISK

Loans represent WesBanco’s single largest balance sheet asset classification and the largest source of interest income. Business purpose loans consist of commercial real estate (“CRE”) loans and other commercial and industrial (“C&I”) loans that are not secured by real estate. CRE loans are further segmented into land and construction loans, and loans for improved property. Consumer purpose loans consist of residential real estate loans, home equity lines of credit and other consumer ~~loans, including indirect and direct auto and truck~~ loans. Loans held for sale generally consist of residential real estate loans originated for sale in the secondary market, but at times may also include other types of loans. The outstanding balance of each major category of the loan portfolio is summarized in Table 10.

The risk that borrowers will be unable or unwilling to repay their obligations and default on loans is inherent in all lending activities. Credit risk arises from many sources including general economic conditions, external events that impact businesses or industries, isolated events that impact a major employer, individual loss of employment or other personal hardships as well as changes in interest rates or the value of collateral. Credit risk is also impacted by a concentration of exposure within a geographic market or to one or more borrowers, industries or collateral types. The primary goal in managing credit risk is to minimize the impact of default by an individual borrower or group of borrowers. Credit risk is managed through the initial underwriting process as well as through ongoing monitoring and administration of the portfolio that varies by the type of loan. The Bank’s credit policies establish standard underwriting guidelines for each type of loan and require an appropriate evaluation of the credit characteristics of each borrower. This evaluation includes the borrower’s primary source of repayment capacity; the adequacy of collateral, if any, to secure the loan; the potential value of personal guarantees as secondary sources of repayment; and other factors unique to each loan that may increase or mitigate its risk. Credit bureau scores are also considered when evaluating consumer purpose loans as well as guarantors of business purpose loans. However, the Bank ~~currently~~ does not periodically update credit bureau scores subsequent to when loans are made to determine changes in credit history.

Credit risk is mitigated for all types of loans by continuously monitoring delinquency levels and pursuing collection efforts at the earliest stage of delinquency. The Bank also monitors general economic conditions, including employment, housing activity and real estate values in its market. The Bank also periodically evaluates and ~~adjusts~~changes its underwriting standards when warranted based on market conditions, the historical performance of a category of the portfolio, or other external factors. Credit risk is also regularly evaluated for the impact of adverse economic and other events that increase the risk of default and the potential ~~inherent~~ loss in the event of default to understand their impact on the Bank’s earnings and capital.

TABLE 10. COMPOSITION OF LOANS (1)


	June 30, 2018				December 31, 2017				June 30, 2019				December 31, 2018
*(unaudited, dollars in thousands)*	Amount		% of Loans		Amount		% of Loans		Amount		% of Loans		Amount		% of Loans
Commercial real estate:
Land and construction	$	481,690		7.1	$	392,597		6.2	$	483,046		6.2	$	528,072		6.9
Improved property		2,707,645		39.8		2,601,851		40.9		3,394,587		43.8	$	3,325,623		43.4

Total commercial real estate		3,189,335		46.9		2,994,448		47.1		3,877,633		50.0		3,853,695		50.3
Commercial and industrial		1,294,488		19.0		1,125,327		17.7		1,300,577		16.8		1,265,460		16.5
Residential real estate		1,450,829		21.3		1,353,301		21.3		1,633,613		21.1		1,611,607		21.0
Home equity		535,653		7.9		529,196		8.3		590,303		7.6		599,331		7.8
Consumer		322,594		4.7		339,169		5.3		335,728		4.3		326,188		4.3

Total portfolio loans		6,792,899		99.8		6,341,441		99.7		7,737,854		99.8		7,656,281		99.9
Loans held for sale		12,053		0.2		20,320		0.3		18,649		0.2		8,994		0.1

Total loans	$	6,804,952		100.0	$	6,361,761		100.0	$	7,756,503		100.0	$	7,665,275		100.0

~~(1)~~

⁽¹⁾Loans are presented gross of the allowance for loan losses and net of unearned income, credit valuation adjustments, and unamortized net deferred loan fee income and loan origination costs.

Total loans increased ~~$443.2~~$91.2 million or 1.2% from December 31, ~~2017 with $448.3 million from the FTSB acquisition~~2018 while ~~organic~~ portfolio loans ~~decreased $5.1~~increased $945.0 million or ~~0.1%. Approximately $12.9 million in underperforming commercial loans from FTSB were sold during~~13.9% over the ~~second quarter. CRE land and construction provided the most significant organic growth, increasing 18.3% for theyear-to-date~~ ~~period.~~last twelve months. Total ~~organic~~ loan growth over the last twelve months was driven by strategic focus categories with 6.0% growth in CRE improved property and 1.1% growth in residential real estate. Secondary market loan sales of residential mortgages decreased; however, higher premiums resulted in an increase in the gain on sale of mortgages. In addition, the consumer portfolio declinedprimarily due to ~~targeted reductions~~the acquisition of FFKT. Total organic loans were down 1.1% year-over-year, resulting from lower home equity loan balances due to ~~reduce its overall credit risk, which included certain pricing adjustments for indirect installment loans.~~lower demand as a result of higher interest rates and tax changes, elevated levels of commercial real estate loans that moved to the secondary financing market, and continued deleveraging by commercial customers reflective of the current operational environment and higher cash levels from tax reform.

Total loan commitments of ~~$2.1~~$2.5 billion, including loans approved but not closed, increased ~~$233.2~~$42.5 million or ~~12.5%~~1.8% from December 31, ~~2017~~2018 due primarily to ~~unused lines of credit.~~loans approved but not closed. The line utilization percentage for the commercial portfolio was ~~slightly higher~~46.9% at ~~48.5% as of~~ June 30, ~~2018~~2019 and ~~it was 48.0% as of~~47.6% at December 31, ~~2017.~~2018.

The commercial portfolio is monitored for potential concentrations of credit risk by market, type of lending, CRE property type, C&I and owner-occupied CRE by industry, investment CRE dependence on common tenants and industries or property types that are similarly impacted by external factors.

At June 30, 2018 total exposure to core energy industries such as drilling, extraction, pipeline construction, mining equipment, investment real estate with energy-related tenants and other related support activities approximated $51.5 million or 0.64% of the total loan portfolio as compared to $55.2 million or 0.69% of the total loan portfolio at December 31, 2017. Exposure to ancillary industries such as utility distribution and transportation, engineering services, manufacturers and retailers of other heavy equipment used in core energy industries, approximates an additional $59.7 million in exposure or 0.74% of the total loan portfolio as compared to $65.3 million or 0.82% of the total loan portfolio at December 31, 2017. The largest exposure to any one borrower in either core energy or ancillary industries was $20.2 million to a company that operates as a natural gas distribution utility.39

NON-PERFORMING ASSETS, IMPAIRED LOANS AND LOANS PAST DUE 90 DAYS OR MORE

Non-performing assets consist ofnon-accrual loans and TDRs, other real estate acquired through or in lieu of foreclosure, bank premises held for sale, and repossessed automobiles acquired to satisfy defaulted consumer loans.

TABLE 11.NON-PERFORMING ASSETS


*(unaudited, dollars in thousands)*	June 30, 2018			December 31, 2017			June 30, 2019			December 31, 2018
Non-accrual loans:
Commercial real estate - land and construction	$	—		$	239		$	295		$	—
Commercial real estate - improved property		9,479			13,318			11,726			8,413
Commercial and industrial		3,191			2,958			2,854			3,260
Residential real estate		13,951			14,661			12,813			13,831
Home equity		4,726			4,762			4,886			4,610
Consumer		634			887			324			586

Totalnon-accrual loans (1)		31,981			36,825			32,898			30,700

TDRs accruing interest:
Commercial real estate - land and construction		—			—			—			—
Commercial real estate - improved property		1,410			1,650			743			880
Commercial and industrial		126			128			192			168
Residential real estate		4,428			4,321			4,005			4,185
Home equity		417			407			486			426
Consumer		79			65			61			85

Total TDRs accruing interest (1)		6,460			6,571			5,487			5,744

Totalnon-performing loans	$	38,441		$	43,396		$	38,385		$	36,444

Other real estate owned and repossessed assets		4,384			5,297			4,973			7,265

Totalnon-performing assets	$	42,825		$	48,693		$	43,358		$	43,709

Non-performing loans/total portfolio loans		0.57	%		0.68	%		0.50	%		0.48	%
Non-performing assets/total assets		0.39	%		0.50	%		0.35	%		0.35	%
Non-performing assets/total portfolio loans, other real estate and repossessed assets		0.63	%		0.77	%		0.56	%		0.57	%

⁽¹⁾ TDRs on nonaccrual of $1.9 million and $2.9 million at June 30, 2019 and December 31, 2018, respectively, are included in total nonaccrual loans.

~~(1)~~

~~TDRs on nonaccrual of $2.5 million and $2.9 million at June 30, 2018 and December 31, 2017, respectively, are included in total nonaccrual loans.~~

Non-performing loans, which consist ofnon-accrual loans and TDRs, ~~decreased $5.0~~increased $1.9 million or ~~11.4%~~5.3%, from December 31, 2017, despite a $0.7 million increase from FTSB, as cash flows could not be reasonably estimated for a small population of FTSB loans acquired with deteriorated credit quality and therefore were accounted for under the cost recovery method. Certain other such loans from FTSB identified in due diligence as underperforming were sold after the acquisition was completed in the second quarter.~~Non-accrual~~ ~~loans decreased~~2018, primarily due to ~~the paydown of one large CRE~~WesBanco’s normal loan grade review process post-acquisition in conjunction with two downgraded relationships in our legacy portfolio, as reported in the first quarter. TDRs decreased slightly by ~~$0.1~~$0.3 million due to normal repayments being slightly higher than additions to the category. (Please see ~~Note 5, “Loans and~~ the ~~Allowance~~Notes to the Consolidated Financial Statements for ~~Credit Losses”.~~additional discussion.)

Other real estate owned and repossessed assets decreased ~~$0.9~~$2.3 million from December 31, ~~2017~~2018 primarily due to continued efforts to liquidate ~~properties. The FTSB acquisition added $0.7 million to the June 30, 2018~~properties and write-downs on FFKT acquired other real estate ~~and repossessed asset totals.~~owned.

The following table presents past due and accruing loans excludingnon-accrual and TDRs:

TABLE 12. PAST DUE AND ACCRUING LOANS EXCLUDINGNON-ACCRUAL AND TDRs


*(unaudited, dollars in thousands)*	June 30, 2018			December 31, 2017			June 30, 2019			December 31, 2018
Loans past due 90 days or more:
Commercial real estate - land and construction	$	172		$	—		$	—		$	—
Commercial real estate - improved property		250			243			587			175
Commercial and industrial		219			20			97			13
Residential real estate		255			1,113			1,173			2,820
Home equity		477			742			533			705
Consumer		508			608			244			364

Total loans past due 90 days or more		1,881			2,726			2,634			4,077

Loans past due 30 to 89 days:
Commercial real estate - land and construction		362			172			1,010			1,412
Commercial real estate - improved property		1,506			316			2,437			4,439
Commercial and industrial		1,003			721			1,064			878
Residential real estate		5,627			4,392			6,779			6,542
Home equity		2,306			2,281			2,016			3,344
Consumer		2,553			3,290			2,140			2,954

Total loans past due 30 to 89 days		13,357			11,172			15,446			19,569

Total 30 days or more	$	15,238		$	13,898		$	18,080		$	23,646

Loans past due 90 days or more and accruing to total portfolio loans		0.03	%		0.04	%		0.03	%		0.05	%
Loans past due30-89 days and accruing to total portfolio loans		0.20	%		0.18	%		0.20	%		0.26	%

Loans past due 30 days or more and accruing interest excludingnon-accruals and TDRs ~~increased $1.3~~decreased $5.6 million or ~~9.6%~~23.5% from December 31, ~~2017, primarily due to the FTSB acquisition which added $2.0 million.~~2018. These loans continue to accrue interest because they are both well-secured and in the process of collection. The ~~increase~~decrease in the 30 to 89 days past due status was primarily due to a ~~$1.4~~$2.0 million ~~increase~~decrease in the commercial real estate – improved property category ~~and represented 0.20% of total loans at June 30, 2018 and 0.18% at December 31, 2017. Loans past due 90 days or more decreased $0.8 million compared to December 31, 2017~~ and represented 0.03% of total loans at June 30, ~~2018, compared to 0.04%~~2019 and 0.06% at December 31, ~~2017. These~~2018. Loans past due 90 days or more decreased $1.4 million compared to December 31, 2018 and represented 0.03% of total loans at June 30, 2019 compared to 0.05% at December 31, 2018. The continued low levels of delinquency are the result of management’s continued focus on sound initial underwriting, timely collection of loans at their earliest stage of delinquency, stable unemployment and generally improved economic conditions.

ALLOWANCE FOR CREDIT LOSSES

The allowance for loan losses of ~~$47.6~~$50.9 million represented ~~0.70%~~0.66% of total portfolio loans at June 30, ~~2018~~2019 compared to ~~0.71%~~0.64% as of December 31, ~~2017~~2018 and 0.70% as of June 30, ~~2017.~~2018. Included in the ratio are acquired ~~FTSB~~FFKT loans (recorded at fair value at the date of acquisition of ~~$448.3 million). No~~$1.0 billion) and the related allowance ~~has been recorded~~ on ~~the FTSB~~FFKT acquired loans as of $8 thousand at June 30, ~~2018.~~2019 recorded since acquisition.

The allowance for loans individually-evaluated ~~decreased~~increased $1.5 million from December 31, ~~2017~~2018 to June 30, ~~2018 primarily due to a partialcharge-off~~ ~~on one individually-evaluated commercial credit of $0.4 million.~~2019. The allowance for loans collectively-evaluated increased from December 31, ~~2017~~2018 to June 30, ~~2018~~2019 by ~~$2.7~~$0.4 million.

The allowance for loan commitments ~~of $0.6~~was $1.8 million at June 30, ~~2018 was unchanged~~2019 as compared to $0.7 million at December 31, ~~2017,~~2018, and is included in other liabilities on the Consolidated Balance Sheets. The increase in the allowance for loan commitments is due to one unfunded commitment with a credit relationship that was downgraded to classified status in the first quarter.

The allowance for credit losses by loan category, presented in Note 5, “Loans and the Allowance for Credit Losses” toof the Consolidated Financial Statements, summarizes the impact of changes in various factors that affect the allowance for loan losses in each segment of the portfolio. The allowance for all segments is impacted by changes in loan balances, as well as changes in historical loss rates adjusted for qualitative factors such as economic ~~conditions and delinquencies.~~conditions. The CRE and C&I segments of the portfolio are also impacted by changes in the risk grading distribution of the portfolio as well as the migration of CRE loans from land and construction to improved property upon the completion of construction.

The loss migration rate by internal risk grade is the primary factor for establishing the allowance for all commercial ~~loan categories,~~loans, and the portfolio segment loss history is the primary factor for establishing the allowance for residential real estate, home equity and consumer loans. The categorization of loans asnon-performing is not as significant a factor as the loss migration rate by risk grade or the segment loss history, although certainnon-performing loans that carry specific reserves are also typically considered classified under the internal risk grading system. Criticized and classified loans ~~at June 30, 2018~~ were ~~1.08%~~1.48% of total loans, ~~improving~~increasing from ~~1.25%~~1.08% at ~~June 30, 2017.~~December 31, 2018. Criticized and classified loans as a percent of total loans decreased, as overall credit quality continued to improve, enabling certain loans to be upgraded while others have paid down or paid off. Criticized and classified loans decreased $0.9increased $31.3 million from December 31, ~~2017~~2018 to ~~$73.0~~$114.2 million at June 30, ~~2018, with~~2019 primarily due to the ~~paydown and/or upgrade of several large CRE loans.~~post-acquisition loan grade review process and two larger downgraded relationships in the legacy loan portfolio in the first quarter.

Table 13 summarizes the allocation of the allowance for credit losses to each category of the loan portfolio. The ~~increase in the~~overall allowance for loans was relatively unchanged. The allowance for commercial ~~loans from December 31, 2017 is primarily~~and industrial loan commitments increased due to the downgrade of a commercial and industrial loan ~~growth in the CRE – land and construction category, while the overall allowance for retail loan categories was relatively unchanged.~~with a remaining undrawn commitment balance.

TABLE 13. ALLOCATION OF THE ALLOWANCE FOR CREDIT LOSSES


*(unaudited, dollars in thousands)*	June 30, 2018		Percent of Total		December 31, 2017		Percent of Total		June 30, 2019		Percent of Total		December 31, 2018		Percent of Total
Allowance for loan losses:
Commercial real estate - land and construction	$	4,710		9.8	$	3,117		6.8	$	3,701		7.0	$	4,039		8.1
Commercial real estate - improved property		19,476		40.3		21,166		46.2		22,367		42.5		20,848		42.0
Commercial and industrial		11,534		23.9		9,414		20.5		12,887		24.5		12,114		24.4
Residential real estate		3,893		8.1		3,206		7.0		3,455		6.6		3,822		7.7
Home equity		4,158		8.6		4,497		9.8		4,321		8.2		4,356		8.8
Consumer		2,951		6.1		3,063		6.7		2,682		5.1		2,797		5.6
Deposit account overdrafts		916		1.9		821		1.6		1,446		2.7		972		1.8

Total allowance for loan losses	$	47,638		98.7	$	45,284		98.6	$	50,859		96.6	$	48,948		98.4

Allowance for loan commitments:
Commercial real estate - land and construction	$	163		0.3	$	119		0.3	$	187		0.4	$	169		0.4
Commercial real estate - improved property		18		0.0		26		0.1		24		0.0		33		0.1
Commercial and industrial		175		0.4		173		0.4		1,257		2.4		262		0.5
Residential real estate		9		0.0		7		0.0		13		0.0		12		0.0
Home equity		205		0.5		212		0.5		249		0.5		226		0.5
Consumer		37		0.1		37		0.1		36		0.1		39		0.1

Total allowance for loan commitments		607		1.3		574		1.4		1,766		3.4		741		1.6

Total allowance for credit losses	$	48,245		100.0	$	45,858		100.0	$	52,625		100.0	$	49,689		100.0

Although the allowance for credit losses is allocated as described in Table 13, the total allowance is available to absorb actual losses in any category of the loan portfolio. However, differences between management’s estimation of probable losses and actual incurred losses in subsequent periods for any category may necessitate future adjustments to the provision for loan losses applicable to the category. Management believes the allowance for credit losses is appropriate to absorb probable losses at June 30, ~~2018.~~2019.

DEPOSITS

TABLE 14. DEPOSITS


*(unaudited, dollars in thousands)*	June 30, 2018		December 31, 2017		$ Change		% Change		June 30, 2019		December 31, 2018		$ Change			% Change
Deposits
Non-interest bearing demand	$	2,046,537	$	1,846,748	$	199,789		10.8	$	2,481,065	$	2,441,041	$	40,024			1.6
Interest bearing demand		1,809,140		1,625,015		184,125		11.3		2,079,795		2,146,508		(66,713	)		(3.1	)
Money market		1,051,043		1,024,856		26,187		2.6		1,098,917		1,142,925		(44,008	)		(3.9	)
Savings deposits		1,385,356		1,269,912		115,444		9.1		1,670,035		1,645,549		24,486			1.5
Certificates of deposit		1,376,528		1,277,057		99,471		7.8		1,365,116		1,455,610		(90,494	)		(6.2	)

Total deposits	$	7,668,604	$	7,043,588	$	625,016		8.9	$	8,694,928	$	8,831,633	$	(136,705	)		(1.5	)

Deposits, which represent WesBanco’s primary source of funds, are offered in various account forms at various rates through WesBanco’s ~~177~~199 financial centers. The FDIC insures deposits up to $250,000 per account.

Total deposits ~~increased~~decreased by ~~$625.0~~$136.7 million or ~~8.9%~~1.5% during the first six months of ~~2018 primarily due to the FTSB acquisition, which provided $586.4 million of additional~~2019. Money market deposits ~~while organic deposits increased $38.6 million or 0.5% from December 31, 2017. Interest bearing demand~~ and~~non-interest~~ interest bearing demand deposits ~~increased 11.3%~~decreased 3.9% and ~~10.8%~~3.1%, respectively, ~~while~~which were partially offset by non-interest bearing demand and savings deposits increasing by 1.6% and ~~money market~~1.5%, respectively. The growth in non-interest bearing demand deposits ~~increased 9.1%~~ and ~~2.6%, respectively, due~~savings deposits is primarily attributable to ~~the FTSB acquisition. Organic growth of $197.8 million for categories of deposits excluding certificates of deposit were the result of~~ marketing, customer incentives, focused retail and business strategies to obtain more account relationships and customers’ preferences for shorter-term ~~maturities, coupled with deposits from~~maturities. Deposit balances were also impacted by bonus and royalty payments for Marcellus and Utica shale gas payments from energy companies in WesBanco’s southwestern Pennsylvania, eastern Ohio and northern West Virginia markets. Money market deposits were influenced through WesBanco’s participation in the Insured Cash Sweep ~~(ICS~~^®(ICS®) money market deposit program. ~~ICS~~^®ICS® reciprocal balances totaled ~~$72.6~~$57.3 million at June 30, ~~2018~~2019 compared to ~~$65.9~~$61.4 million at December 31, ~~2017.~~2018.

Certificates of deposit ~~increased $99.5~~decreased $90.5 million due primarily ~~due~~ to the ~~FTSB acquisition, which provided $262.9 million in additional certificates~~effects of ~~deposit, of which $206.3 million remain as of June 30, 2018, while organic deposits decreased by 12.8%. The organic deposits decrease was affected by~~ an overall corporate strategy designed to increase and remix retail deposit relationships and ~~reducing single service~~reduce single-service customers with a focus on overall products that can be offered at a lower cost to WesBanco. The decline was also impacted by ~~lower than competitor offered rates on certain maturing certificates of deposit~~customer run-off from the FTSB and ~~customer preferences for othernon-maturity~~ ~~deposit types.~~FFKT acquisitions. WesBanco does not generally solicit brokered or other depositsout-of-market or over the internet, but does participate in the Certificate of Deposit Account Registry Services ~~(CDARS~~^®(CDARS®) ~~program and the Insured Cash Sweep (ICS~~^®~~) money market deposit~~ program. ~~CDARS~~^®CDARS® balances totaled ~~$78.4~~$39.5 million in outstanding balances at June 30, ~~2018,~~2019, of which ~~$45.5~~$16.9 million representedone-way buys, compared to ~~$105.0~~$49.4 million in total outstanding balances at December 31, ~~2017,~~2018, of which ~~$72.7~~$22.0 million representedone-way buys. Certificates of deposit greater than $250,000 were approximately ~~$333.7~~$305.5 million at June 30, ~~2018~~2019 compared to ~~$216.4~~$323.2 million at December 31, ~~2017.~~2018. Certificates of deposit of $100,000 or more were approximately ~~$695.0~~$640.3 million at June 30, ~~2018~~2019 compared to ~~$581.6~~$684.6 million at December 31, ~~2017. Certificates of deposit increased as of June 30, 2018 compared to December 31, 2017 due to the FTSB acquisition.~~2018. Certificates of deposit totaling approximately ~~$791.3~~$815.7 million at June 30, ~~2018~~2019 with a cost of ~~0.91%~~1.23% are scheduled to mature within the next 12 months. WesBanco intends to continue to focus on its core deposit strategies and improving its overall mix of transaction accounts to total deposits. From time to time, the Bank may offer special promotions or match competitor rates on certain certificates of deposit maturities and savings products based on competition, sales strategies, liquidity needs and wholesale borrowing costs.

BORROWINGS

TABLE 15. BORROWINGS


*(unaudited, dollars in thousands)*	June 30, 2018		December 31, 2017		$ Change		% Change		June 30, 2019		December 31, 2018		$ Change			% Change
Federal Home Loan Bank Borrowings	$	1,248,406	$	948,203	$	300,203		31.7	$	1,121,283	$	1,054,174	$	67,109			6.4
Other short-term borrowings		258,067		184,805		73,262		39.6		296,148		290,522		5,626			1.9
Subordinated debt and junior subordinated debt		165,420		164,327		1,093		0.7		156,534		189,842		(33,308	)		(17.5	)

Total	$	1,671,893	$	1,297,335	$	374,558		28.9	$	1,573,965	$	1,534,538	$	39,427			2.6

While borrowings are a significant source of funding for WesBanco, they are less significant as compared to total deposits. During the first six months of ~~2018,~~2019, FHLB borrowings increased ~~$300.2~~$67.1 million, as ~~$575.0~~$285.0 million in new advances ~~coupled with $52.3~~offset $217.9 million ~~in advances from the FTSB acquisition, offset $327.1 million in~~ maturities, ~~and~~ other principal ~~pay downs. In addition,~~paydowns and purchase accounting amortization. WesBanco extended the maturities of approximately ~~$320.0~~$285.0 million of maturing FHLB borrowings in the first six months ~~of 2018~~ with ~~an average maturing~~a prior cost of ~~1.35%~~approximately 1.96%, at a current ~~average rate of 2.62% and an average term of 2.2 years. WesBanco acquired a $25.0 millionoff-balance~~ ~~sheet letter of credit in the FTSB transaction. The letter of credit was issued by the~~short-term FHLB ~~and secures the deposits of a public deposits customer.~~rates approximating 2.05% - 2.32%.

Other short-term borrowings, which may consist of ~~securities sold under agreements to repurchase and~~ federal funds purchased, ~~at June 30, 2018, but may also include notes payable,~~callable repurchase agreements, overnight sweep checking accounts, and borrowings on a revolving line of credit, were ~~$258.1~~$296.1 million at June 30, ~~2018~~2019 compared to ~~$184.8~~$290.5 million at December 31, ~~2017.~~2018. The increase is primarily due to a ~~$76.3~~$0.3 million increase in ~~securities sold under~~callable repurchase agreements, ~~to repurchase, including $9.2~~coupled with a $5.3 million ~~acquired from FTSB, which was partially offset by the repayments of $3.0 million~~increase in overnight sweep checking accounts. At June 30, 2019, there were no outstanding federal funds ~~purchased outstanding at December 31, 2017.~~purchased.

Subordinated debt and junior subordinated debt were ~~$165.4~~$156.5 million at June 30, ~~2018~~2019 compared to ~~$164.3~~$189.8 million at December 31, ~~2017.~~2018. The ~~increase~~decrease is primarily ~~due to $9.3~~a result of the redemption of $33.5 million in junior subordinated debt ~~from~~during the ~~FTSB acquisition,~~first six months of 2019, which ~~was partially offset by~~were assumed in the ~~redemption of $8.2 million in junior subordinated debt in June 2018 from a prior~~FFKT acquisition.

WesBanco has a revolving line of credit, which is a senior obligation of the parent company, with another financial institution. This line of credit, which accrues interest at an adjusted LIBOR rate, provides for aggregate unsecured borrowings of up to $25.0 million. There ~~was~~were no outstanding ~~balance~~balances at either June 30, ~~2018~~2019 or December 31, ~~2017. Rates have generally increased over the past year on all borrowing types due to the federal funds and LIBOR rate increases that have occurred since early 2017.~~

2018.

OFF-BALANCE SHEET ARRANGEMENTS

WesBanco enters into financial instruments withoff-balance sheet risk in the normal course of business to meet the financing needs of its customers. These financial instruments include commitments to extend credit, letters of credit, loans approved but not closed, overdraft limits and contingent obligations to purchase loans funded by other entities. Since many of these commitments expire unused or partially used, these commitments may not reflect future cash requirements. Please refer to Note ~~11,~~12, “Commitments and Contingent Liabilities,” of the Consolidated Financial Statements and the “Loans and Credit Risk” section of this MD&A for additional information.

CAPITAL RESOURCES

~~Shareholders’~~Shareholders' equity increased ~~$128.8~~$95.3 million or ~~9.2%~~4.8% from ~~$1.4~~$2.0 billion at December 31, ~~2017.~~2018. The increase ~~was due~~resulted primarily ~~to $107.3 million of common stock issued in the FTSB acquisition, coupled with~~from net income during the currentsix-month period of ~~$66.7~~$85.2 million and a $42.0 million other comprehensive income gain, which was partially offset by the declaration of common shareholder dividends totaling ~~$26.3~~$33.8 million ~~and $21.9 million in additional other comprehensive loss~~ for the six months ended June 30, ~~2018. The other comprehensive loss was due primarily to an unrealized loss in the securities portfolio, which was partially offset by an unrealized gain in the defined benefit pension plan.~~2019. WesBanco also increased its quarterly dividend rate to ~~$0.29~~$0.31 per share in February, representing ~~an 11.5%~~a 6.9% increase over the prior quarterly rate and a cumulative ~~107%~~121% increase since 2010.

WesBanco purchased ~~14,414~~15,755 shares during thesix-month period ended June 30, ~~2018~~2019 under the current share repurchase plans. The shares were repurchased from employees for the payment of withholding taxes to facilitate stock compensation transactions. At June 30, ~~2018,~~2019, the remaining shares authorized to be purchased under the current repurchase plans totaled ~~1,092,883~~1,076,780 shares.

On February ~~22, 2018,~~27, 2019, WesBanco granted 12,000 Total Shareholder Return Plan (“TSR”) shares for the performance period beginning January 1, ~~2018~~2019 and ending December 31, ~~2020~~2021 to certain executives. The award is determined at the end of the three-year period if the TSR of WesBanco common stock is equal to or greater than the 50^th percentile of the TSR of the peer group. The number of shares to be earned by the participant shall be 200% of the grant-date award if the TSR of WesBanco common stock is equal to or greater than the 75^th percentile of the TSR of the peer group. Upon achieving the market-based metric, shares determined to be earned by the participant become time-based and vest in three equal annual installments.

On May ~~16, 2018,~~15, 2019, WesBanco granted ~~117,600~~129,850 stock options to selected officers at an exercise price of ~~$45.65.~~$38.93. These options are service-based and vest 50% at December 31, ~~2018~~2019 and 50% at December 31, ~~2019.~~2020. On the same date, WesBanco also issued ~~70,151~~105,545 shares of time-based restricted stock to selected officers and ~~8,081~~16,056 shares of performance-based restricted stock to selected officers. ~~In addition on April 5, 2018, WesBanco issued 9,465 shares of time-based restricted stock to certain former officers of FTSB who became officers of WesBanco upon the FTSB acquisition closing.~~ The time-based restricted shares are service-based and cliff-vest 36 months from the date of grant. The performance-based restricted shares have a three-year performance period, beginning January 1, ~~2019,~~2020, based on WesBanco’s return on average assets and return on average tangible common equity measured for each year, compared to a national peer group of peer financial institutions with total assets between approximately $9$11 billion and ~~$15~~$25 billion. Earned performance-based restricted shares are also subject to additional service-based vesting with 50% vesting on May ~~16, 2022~~15, 2023 after the completion of the three-year performance period and the final 50% vesting on May ~~16, 2023.~~15, 2024.

Regulatory guidelines require bank holding companies and commercial banks to maintain certain minimum capital ratios and define companies as “well capitalized” that sufficiently exceed the minimum ratios. At June 30, ~~2018,~~2019, regulatory capital levels for both the Bank and WesBanco were substantially greater than the minimum amounts needed to be considered “well capitalized” under the regulations. There are various legal limitations under federal and state laws that limit the payment of dividends from the Bank to WesBanco. As of June 30, ~~2018,~~2019, under FDIC regulations, WesBanco could receive, without prior regulatory approval, a dividend of approximately ~~$67.4~~$137.4 million from the Bank. WesBanco ~~intends~~expects to continue to improve its consolidated and Bank capital ratios as necessary over time, to fund organic growth and acquisitions, primarily from retaining a majority of its ~~increasing~~ earnings.

The following table summarizes risk-based capital amounts and ratios for WesBanco and the Bank for the periods indicated:

																											June 30, 2019								December 31, 2018
							June 30, 2018							December 31, 2017							Minimum			Well									Minimum							Minimum
*(unaudited, dollars in thousands)*	Minimum Value⁽¹⁾			Well Capitalized ⁽²⁾			Amount		Ratio			Minimum Amount⁽¹⁾		Amount		Ratio			Minimum Amount⁽¹⁾		Value ⁽¹⁾			Capitalized ⁽²⁾			Amount		Ratio				Amount ⁽¹⁾		Amount		Ratio			Amount ⁽¹⁾
WesBanco, Inc.
Tier 1 leverage		4.00	%		5.00	%	$	1,052,707		10.21	%	$	412,514	$	970,425		10.39	%	$	373,566		4.00	%		5.00	%	$	1,284,065		11.09	%		$	463,324	$	1,258,605		10.74	%	$	468,824
Common equity Tier 1		4.50	%		6.50	%		913,707		12.38	%		332,159		834,554		12.14	%		309,298		4.50	%		6.50	%		1,154,065		13.83	%			375,533		1,096,105		13.14	%		375,254
Tier 1 capital to risk-weighted assets		6.00	%		8.00	%		1,052,707		14.26	%		442,878		970,425		14.12	%		412,397		6.00	%		8.00	%		1,284,065		15.39	%			500,711		1,258,605		15.09	%		500,338
Total capital to risk-weighted assets		8.00	%		10.00	%		1,126,165		15.26	%		590,504		1,042,124		15.16	%		549,863		8.00	%		10.00	%		1,361,925		16.32	%			667,615		1,333,503		15.99	%		667,118
WesBanco Bank, Inc.
Tier 1 leverage		4.00	%		5.00	%	$	931,325		9.05	%	$	411,450	$	869,227		9.32	%	$	372,900		4.00	%		5.00	%	$	1,152,551		9.96	%	��	$	462,642	$	1,108,600		9.48	%	$	467,939
Common equity Tier 1		4.50	%		6.50	%		931,325		12.64	%		331,641		869,227		12.66	%		308,900		4.50	%		6.50	%		1,152,551		13.73	%			377,799		1,108,600		13.30	%		375,117
Tier 1 capital to risk-weighted assets		6.00	%		8.00	%		931,325		12.64	%		442,188		869,227		12.66	%		411,866		6.00	%		8.00	%		1,152,551		13.73	%			503,732		1,108,600		13.30	%		500,156
Total capital to risk-weighted assets		8.00	%		10.00	%		1,004,784		13.63	%		589,584		940,303		13.70	%		549,155		8.00	%		10.00	%		1,230,411		14.66	%			671,643		1,183,498		14.20	%		666,874

~~(1)~~

⁽¹⁾Minimum requirements to remain adequately capitalized.

~~(2)~~

~~Well-capitalized under prompt corrective action regulations.~~

⁽²⁾Well-capitalized under prompt corrective action regulations.

LIQUIDITY RISK

Liquidity is defined as a financial institution’s capacity to meet its cash and collateral obligations at a reasonable cost. Liquidity risk is the risk that an institution’s financial condition or overall safety and soundness is adversely affected by an inability, or perceived inability, to meet its obligations. An institution’s obligations, and the funding sources to meet them, depend significantly on its business mix, balance sheet structure, and the cash flows of itson- andoff-balance sheet obligations. Institutions confront various internal and external situations that can give rise to increased liquidity risk including funding mismatches, market constraints on funding sources, contingent liquidity events, changes in economic conditions, and exposure to credit, market, operation, legal and reputation risk. WesBanco actively manages liquidity risk through its ability to provide adequate funds to meet changes in loan demand, unexpected outflows in deposits and other borrowings as well as to take advantage of market opportunities and meet operating cash needs. This is accomplished by maintaining liquid assets in the form of securities, sufficient borrowing capacity and a stable core deposit base. Liquidity is centrally monitored by WesBanco’s Asset/Liability Committee (“ALCO”).

WesBanco determines the degree of required liquidity by the relationship of total holdings of liquid assets to the possible need for funds to meet unexpected deposit losses and/or loan demands. The ability to quickly convert assets to cash at a minimal loss is a primary function of WesBanco’s investment portfolio management. WesBanco believes its cash flow from the loan portfolio, the investment portfolio, and other sources, adequately meet its liquidity requirements. WesBanco’s net loans to assets ratio was ~~61.6%~~61.5% at June 30, ~~2018~~2019 and deposit balances funded ~~70.1%~~69.6% of assets.

The following table lists the sources of liquidity from assets at June 30, ~~2018~~2019 expected within the next year:


*(unaudited, in thousands)*
Cash and cash equivalents	$	155,559	$	194,355
Securities with a maturity date within the next year and callable securities		229,784		331,709
Projected payments and prepayments on mortgage-backed securities and collateralized mortgage obligations (1)		230,246		287,816
Loans held for sale		12,053		18,649
Accruing loans scheduled to mature		940,386		1,029,536
Normal loan repayments		1,187,847		2,004,119

Total sources of liquidity expected within the next year	$	2,755,875	$	3,866,184

⁽¹⁾ Projected prepayments are based on current prepayment speeds.

~~(1)~~

~~Projected prepayments are based on current prepayment speeds.~~

Deposit flows are another principal factor affecting overall WesBanco liquidity. Deposits totaled ~~$7.7~~$8.7 billion at June 30, ~~2018.~~2019. Deposit flows are impacted by current interest rates, products and rates offered by WesBanco versus various forms of competition, as well as customer behavior. Certificates of deposit scheduled to mature within one year totaled ~~$791.3~~$815.7 million at June 30, ~~2018,~~2019, which includes jumbo regular certificates of deposit totaling ~~$376.1~~$381.7 million with a weighted-average cost of ~~1.16%~~1.73%, and jumbo CDARS^® deposits of ~~$49.3~~$24.3 million with a weighted-average cost of ~~1.23%~~1.63%.

WesBanco maintains a line of credit with the FHLB as an additional funding source. Available credit with the FHLB approximated $2.3 billion at June 30, ~~2018~~2019 and December 31, ~~2017 approximated $1.7 billion and $1.8 billion, respectively.~~2018. The FHLB requires securities to be specifically pledged to the FHLB and maintained in a FHLB-approved custodial arrangement if the member wishes to include such securities in the maximum borrowing capacity calculation. WesBanco has elected not to specifically pledge to the FHLB otherwise unpledged securities. At June 30, ~~2018,~~2019, the Bank had unpledgedavailable-for-sale securities with an amortized cost of ~~$509.5 million, representing 28.4%~~$398.2 million. A portion of ~~that portfolio. These~~these securities could be sold for additional liquidity, or such securities could be pledged to secure additional FHLB borrowings. Available liquidity through the sale of investment securities is currently limited, ~~to those that are designated~~ as only approximately 19.4% of the available-for-sale ~~and are~~ portfolio is unpledged, due to the pledging agreements that WesBanco has with their public deposit customers. Public deposit balances have increased significantly through the ESB, YCB, FTSB and ~~YCB acquisitions in the past three years.~~FFKT acquisitions. WesBanco’sheld-to-maturity portfolio currently contains ~~$677.2~~$603.9 million of unpledged securities. ~~However, most~~Most of ~~the balance represents~~these securities are tax-exempt municipal ~~bonds,~~securities, which can only be pledged in limited circumstances. ~~Unless in compliance with~~Except for certain ~~criteria,~~limited, special circumstances, these securities cannot be sold without tainting the remainder of theheld-to-maturity portfolio. If tainting occurs, all remaining securities with theheld-to-maturity designation would be required to ~~move to~~be reclassified as available-for-sale, and theheld-to-maturity designation would ~~not~~no longer be available to WesBanco for some time.

WesBanco participates in the Federal Reserve Bank’sBorrower-in-Custody Program (“BIC”) whereby WesBanco pledges certain consumer loans as collateral for borrowings. At June 30, ~~2018,~~2019, WesBanco had a BIC line of credit totaling ~~$164.2~~$185.0 million, none of which was outstanding. Alternative funding sources may include the utilization of existing overnight lines of credit with third party banks totaling ~~$285.0~~$275.0 million, none of which ~~$22.0 million~~ was outstanding at June 30, ~~2018,~~2019, along with seeking other lines of credit, borrowings under repurchase agreement lines, increasing deposit rates to attract additional funds, accessing brokered deposits, or selling securitiesavailable-for-sale or certain types of loans.

Other short-term borrowings of ~~$258.1~~$296.1 million at June 30, ~~2018~~2019 consisted of callable repurchase agreements and overnight sweep checking accounts for large commercial ~~customers, and federal funds purchased.~~customers. There has not been a significant fluctuation in the average deposit balances of the overnight sweep checking accounts during ~~2018.~~the first six months of 2019. The overnight sweep checking accounts require U.S. Government securities to be pledged equal to or greater than the average deposit balance in the related customer accounts.

The principal sources of parent company liquidity are dividends from the Bank, ~~$87.9~~$106.6 million in cash and investments on hand, and a $25.0 million revolving line of credit with another bank, which did not have an outstanding balance at June 30, ~~2018.~~2019. WesBanco is in compliance with all loan covenants. There are various legal limitations under federal and state laws that limit the payment of dividends from the Bank to the parent company. As of June 30, ~~2018,~~2019, under FDIC and State of West Virginia regulations, WesBanco could receive, without prior regulatory approval, dividends of approximately ~~$67.4~~$137.4 million from the Bank. Management believes these are appropriate levels of cash for ~~WesBanco~~the parent company given the current environment. Management continuously monitors the adequacy of parent company cash levels and sources of liquidity through the use of metrics that relate current cash levels to historical and forecasted cash inflows and outflows.

WesBanco had outstanding commitments to extend credit in the ordinary course of business approximating ~~$2.1 billion and $1.8~~$2.5 billion at June 30, ~~2018~~2019 and December 31, ~~2017, respectively.~~2018. On a historical basis, only a ~~small~~ portion of these commitments will result in an outflow of funds. Please refer to Note ~~11,~~12, “Commitments and Contingent Liabilities,” of the Consolidated Financial Statements and the “Loans and ~~Loan Commitments”~~Credit Risk” section of this MD&A for additional information.

Federal financial regulatory agencies previously ~~have~~ issued guidance in 2009 to provide for sound practices for managing funding and liquidity risk and strengthening liquidity risk management practices. WesBanco maintains a comprehensive management process for identifying, measuring, monitoring, and controlling liquidity risk, which is fully integrated into its risk management process. Management believes WesBanco has sufficient current liquidity to meet current obligations to borrowers, depositors and others ~~as of June 30, 2018~~ and thatWesBanco’s current liquidity risk management policies and procedures adequately address this guidance.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The disclosures set forth in this item are qualified by the section captioned “Forward-Looking Statements” included in Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations of this report.

MARKET RISK

The primary objective of ~~WesBanco’s ALCO~~WesBanco��s Asset/Liability Committee (“ALCO”) is to maximize net interest income within established policy parameters. This objective is accomplished through the management of balance sheet composition, market risk exposures arising from changing economic conditions and liquidity risk.

Market risk is defined as the risk of loss due to adverse changes in the fair value of financial instruments resulting from fluctuations in interest rates and ~~equity~~bond prices. Management considers interest rate risk to be WesBanco’s most significant market risk. Interest rate risk is the exposure to adverse changes in net interest income due to changes in interest rates. The relative consistency of WesBanco’s net interest income is largely dependent on effective management of interest rate risk. As interest rates change in the market, rates earned on interest ~~rate sensitive~~rate-sensitive assets and rates paid on interest ~~rate sensitive~~rate-sensitive liabilities do not necessarily move concurrently. Differing rate sensitivities may arise because fixed rate assets and liabilities may not have the same maturities, or because variable rate assets and liabilities differ in the timing and/or the percentage of rate changes.

WesBanco’s ALCO is a Board-level committee with both Board and executive management ~~representation, including the Chief Executive Officer, Chief Financial Officer, Chief Risk Management Officer and Senior Treasury Officer.~~representation. It is responsible for monitoring and managing interest rate risk within Board-approved policy ~~limits. Interest rate risk is monitored through the use of an~~limits, utilizing earnings sensitivity simulation ~~model~~ and anshareholders’ equity economicvalue-at-risk ~~model, measuring the fair value of net equity.~~ models. These models are highly dependent on various assumptions, which change regularly as the balance sheet and market interest rates change. The key assumptions and strategies employed are analyzed, reviewed and ~~reviewed~~documented at least quarterly by the ~~ALCO, while appropriate documentation is maintained.~~ALCO.

The earnings sensitivity simulation model projects changes in net interest income resulting from the effect of changes in interest rates. Forecasting changes in net interest income requires management to make certain assumptions regarding loan and security prepayment rates, ~~security~~ call dates, changes to ~~variousnon-maturity~~deposit product betas andnon-maturity deposit decay rates, which may not necessarily reflect the manner in which actual cash flows, yields, and costs respond to changes in market interest rates. Assumptions ~~used~~ are based on historical experience, current market rates and economic forecasts and are ~~periodically~~internally back-tested and periodically reviewed by a third-party ~~consultants.~~consultant. The net interest income sensitivity results presented in Table 1, “Net Interest Income Sensitivity,” assumes that the balance sheet composition of interest sensitive assets and liabilities existing at the end of the period remains constant over the period being measured and also assumes that a particular change in interest rates is reflected uniformly across the yield curve, regardless of the duration of the maturity orre-pricing of specific assets and liabilities. Since the assumptions used in the model relative to changes in interest rates are uncertain, the simulation analysis may not be indicative of actual results. In addition, this analysis does not consider ~~all~~ actions that management might employ in response to changes in interest rates, as well as changes in earning asset and costing liability balances.

Management is aware of the significant effect that inflation or deflation has upon interest rates and ultimately upon financial performance. WesBanco’s ability to cope with inflation or deflation is best determined by analyzing its capability to respond to changing market interest rates, as well as its ability to manage the various elements ofnon-interest income and expense during periods of increasing or decreasing inflation or deflation. WesBanco monitors the level and mix of interest-rate sensitive assets and liabilities through ALCO in order to reduce the impact of inflation or deflation on net interest income. Management also controls the effects of inflation or deflation by conducting periodic reviews of the prices, costs and terms of its various products and services, ~~both in terms of the costs to offer the services~~ as well as ~~outside market influences upon such pricing,~~competitive factors by ~~introducing~~approving new products and services or ~~reducing~~adjusting the availability of existing products and ~~services, and by controlling overhead expenses.~~services.

Interest rate risk policy limits are determined by measuring the anticipated change in net interest income over a twelve-month period, assuming immediate and sustained market interest rate increases and decreases of 100 - 400 basis points across the entire yield curve, compared to a stable rate environment or base model. WesBanco’s current policy limits this exposure for the noted interest rate changes to a reduction of between 10% - 20% or less of net interest income from the stable rate base model over a twelve-month period. The table below shows WesBanco’s interest rate sensitivity at June 30, ~~2018~~2019 and December 31, ~~2017,~~2018, assuming the above-noted interest rate increases as compared to a base model. In the current ~~lower~~ interest rate environment, particularly for short-term rates, the ~~200 and~~ 300 - 400 basis point decreasing ~~change~~changes for both years are not shown due to the unrealistic nature of results associated with short-term negative rates.

TABLE 1. NET INTEREST INCOME SENSITIVITY


Immediate Change in Interest Rates (basis points)	Percentage Change in Net Interest Income from Base over One Year		ALCO Guidelines
Immediate Change in Interest Rates (basis points)	June 30, 2018	December 31, 2017	ALCO Guidelines
Immediate Change in				Percentage Change in
Interest Rates				Net Interest Income from Base over One Year		ALCO
(basis points)				June 30, 2019	December 31, 2018	Guidelines
+400	7.7%	8.3%	(20.0%)	11.5%	7.6%	(20.0%)
+300	6.0%	6.2%	(15.0%)	8.9%	6.4%	(15.0%)
+200	4.0%	4.0%	(12.5%)	6.1%	3.9%	(12.5%)
+100	2.2%	2.4%	(10.0%)	3.2%	2.1%	(10.0%)
-100	(2.3%)	(3.0%)	(10.0%)	(2.5%)	(2.1%)	(10.0%)
-200				(8.2%)	(5.8%)	(12.5%)

As per the table above, the earnings sensitivity simulation model at June 30, ~~2018~~2019 currently projects that net interest income for the next twelve-month period would decrease by ~~2.3%~~2.5% - 8.2% if interest rates were to fall immediately by 100 - 200 basis points, compared to a decrease of ~~3.0% for the same scenario~~2.1% - 5.8% as of December 31, ~~2017.~~

2018. For rising rate scenarios, net interest income would increase by between ~~2.2%~~3.2% - ~~7.7%~~11.5% if rates were to increase by between 100 - 400 basis points as of June 30, ~~2018,~~2019, compared to increases of between ~~2.4%~~2.1% - ~~8.3% in a 100 - 400 basis point increasing rate environment~~7.6% as of December 31, ~~2017.~~2018. The higher asset sensitivity is due to the impact of the lower rate and yield curve environment on base case net interest income and the related calculation of parallel rate shock changes in rising and falling rate scenarios.

~~Management~~In addition to the aforementioned parallel rate shock earnings sensitivity simulation model, ALCO also ~~utilizes~~reviews a ~~“Most Likely”~~“dynamic” forecast scenario to project net interest income over a rollingtwo-year time period. This forecast is updated ~~and reviewed~~at least quarterly, incorporating revisions and updated assumptions into the model ~~such as~~for estimated loan and deposit growth, expected balance sheetre-mixing strategies, changes in ~~base~~ forecasted rates for various maturities, competitive market spreads for various products and other assumptions. Such modeling ~~helps to predict~~assists in predicting changes in forecasted outcomes and ~~necessary~~potential adjustments to the plan to ~~achieve management’s~~assist in achieving earnings goals.

The balance sheet shows ~~slightly lower~~somewhat higher asset sensitivity as of June 30, ~~2018,~~2019, as compared to December 31, ~~2017,~~2018, with differences resulting from changes in the mix of, and growth in, various earning assets and costing liabilities, as well as adjustments for various modeling assumptions such as deposit beta rates, decay rates fornon-maturity deposits and loan prepayment speeds. Generally, deposit betas ~~have increased over time~~utilized in the ~~model, while~~parallel rate shock and “dynamic” models are estimated at a higher percentage for potential rate increase scenarios than has been the Bank’s experience to date through nine federal funds rate increases over the past three and a half years for competitive factors in our market areas and as public funds and institutional contract terms are renewed. The total deposit beta for interest-bearing transaction accounts, other than certificates of deposit, was 34% or 17 basis points for the trailing twelve months. Deposit decay rates and loan prepayment speeds ~~have also increased to reflect various loan classifications’ propensity to prepay over time. Management believes that overall asset~~are adjusted periodically for loans and non-maturity deposit products. Asset sensitivity in~~non-parallel~~ rising rate scenarios may be ~~somewhat neutralized~~less than anticipated due to slower prepayment speeds, rate floors, ~~lower than forecasted increases to~~below forecast loan yields, spread compression between new asset yields and funding costs, mortgage-related extension risk ~~associated with residential mortgages and mortgage-related securities,~~ and other ~~earning asset and costing liability differences versus currently modeled assumptions.~~factors. Commercial loans with floors currently average ~~4.19%~~4.26% on approximately ~~$1.2~~$1.5 billion or 28% of total commercial loans at June 30, ~~2018,~~2019, as compared to ~~$1.2~~$1.5 billion averaging 4.27% or ~~30%~~29% of commercial loans at December 31, ~~2017.~~2018. Approximately 36% or ~~$450.6~~$517.5 million of these loans are currently priced at their floor, as compared to ~~45%~~38% or ~~$552.6~~$570.5 million at December 31, ~~2017. In a less than 100 basis point rising rate environment, these~~2018. These loans ~~may~~typically do not adjust as rapidly from their current floor level as compared to loans without ~~floors.~~floors, due to the amount of the rate change as compared to the floor rate, or for reasons related to next repricing dates.

WesBanco also periodically measures the economic value of equity (“EVE”), which is defined as the market value of tangible equity in various rate scenarios. Generally, changes in the economic value of equity relate to changes in various assets and liabilities, changes in the yield curve, as well as changes in loan prepayment speeds and deposit decay rates. The following table presents these results and WesBanco’s policy limits as of June 30, 2019 and December 31, 2018, with the change since year-end related to significant changes in interest rates and their impact upon the fair values of earning assets and costing liabilities:

Immediate Change in	Percentage Change in
Interest Rates	Economic Value of Equity from Base over One Year		ALCO
(basis points)	June 30, 2019	December 31, 2018	Guidelines
+400	(4.9%)	(17.2%)	(40.0%)
+300	(3.2%)	(12.6%)	(30.0%)
+200	(1.5%)	(10.8%)	(20.0%)
+100	0.3%	(4.8%)	(10.0%)
-100	(1.9%)	2.7%	(10.0%)
-200	(6.8%)	2.3%	(20.0%)

The net interest margin ~~has decreased by two~~increased 27 basis points for the first six months of 2019 to 3.68% as compared to the same period last year and 24 basis points for the second quarter to 3.67% compared to last year, while it was one basis point below the first quarter’s net interest margin of 3.68%. The increase from last year’s first half and second quarter was primarily due to increased short-term rates, higher non-interest bearing deposits, lower than projected deposit betas and the contribution from FFKT’s higher margin assets post-acquisition, plus higher purchase accounting from both 2018 acquisitions. The core net interest margin, net of purchase accounting-related accretion, was 3.49% for both the three and six month periods ~~ended June 30, 2018~~as compared to 3.31% last year. It was also consistent with the ~~same periods last~~first quarter’s 3.49%. Currently, the federal funds market is anticipating that the Federal Reserve Board may decrease short-term rates by 25 basis points at least two times prior to year-end, which if such interest rate scenario occurs, would result in lower net interest income and margin, as the Company remains asset sensitive, suggesting that earning assets repricing downward may occur at a faster pace than reductions in deposit or borrowing rates. The current flat-to-inverted yield curve environment has reduced our base case assumption about net interest income and margin for the balance of the year as ~~thetax-exempt~~ ~~securities portfoliotax-equivalent~~compared to expectations at year-end, which anticipated a continuing rising rate ~~adjustment from 35% to 21% caused~~environment and a ~~reduction in~~higher core margin. It is currently expected that the ~~overall~~core net interest margin will slightly decline by ~~six~~a few basis ~~points. New securities purchased at~~points over the remainder of the year, excluding purchase accounting. On a total basis including purchase accounting accretion, the margin may decline slightly more as such accretion diminishes over the back half of the year by an additional one to two basis points per quarter from its current ~~rates helped to offset this reduction. In addition, highernon-interest~~ ~~bearing demand deposits and limited increases~~mid-teens basis points level. Management’s modeling currently includes two 25 basis point decreases in ~~other deposit categories resulted in some margin improvement that limited~~ the ~~decrease from thetax-equivalency~~ ~~calculation. The opportunity for margin expansion is dependent on additional~~ federal funds ~~increases and~~rate over the remainder of the year, which is relatively consistent with consensus economist expectations. The shape of the yield curve, in addition to continued execution of our business strategy to grow certain loan categories and remixing higher cost borrowings and CDs into lower cost transaction accounts, while controlling transaction account betas as rates rise. In addition, net purchase accounting accretion, which was 12 b.p. in the second quarter and 8 b.p.~~year-to-date,~~ influenced positively by the acquisition of FTSB on April 5, 2018, is expected to decrease slightly throughout the remainder of 2018 for prior acquisitions but increase somewhat due to the acquisition of FFKT expected in the third quarter. Management currently anticipates that one or two additional short-term federal funds rate increases may occur by the end of 2018, consistent with Federal Reserve and consensus economist expectations. Delays in implementing further rate increases, increaseschanges to deposit betas or rates beyond ~~our~~ current modeling assumptions as well as an inability to lower deposit rates in a declining rate scenario, or adjustments to the mix of earning assets and costing liabilities, may have a negative impact on management’s estimates of the future direction and level of the net interest margin.

~~While many Bank customers over the past few years have moved their maturing certificates of deposit balances to lower-costing transaction accounts as well as intonon-deposit~~ products, it may be anticipated that as rates rise, a portion of these lower-cost transaction account balances may migrate to higher-costing certificates of deposit or the higher-priced tiers of money market products. Runoff of certificate of deposit balances, both organically and from prior acquisitions, which has included reducing certain single-service deposit customers thru an emphasis on relationship pricing has been replaced with FHLB and other short-term borrowings. Certificates of deposit totaling approximately ~~$791.3~~$815.7 million mature within the next year at an average cost of ~~0.91%. Maturing~~1.23%; replacement borrowings are currently more expensive than the average runoff rate of these certificates of deposit. Also, maturing borrowings’ replacement rates are generally higher than the cost of the maturing borrowings’ average rate, and management may ~~be lengthened~~elect to lengthen the maturing borrowings’ terms at a higher cost ~~than the maturing borrowings’ average rate. In addition, with the recent acquisition of FTSB~~for liquidity and ~~the pending acquisition of FFKT,~~asset/liability management ~~is no longer intent on controlling the size of the balance sheet in order~~purposes. Transaction account growth helps to ~~remain under $10 billion in total assets, as it did in 2017. Increased first quarter investment purchases,~~control such factors and ~~the acquisition of FTSB in the second quarter, resulted in total assets of $10.9 billion at June 30, 2018.~~limit overall deposit costs.

The Bank has significant additional borrowing capacity with the FHLB of Pittsburgh, the Federal Reserve Bank of Cleveland and various correspondent banks, and may utilize these funding sources or interest rate swap strategies as necessary to lengthen liabilities, ~~to help~~ offset mismatches in various asset maturities and manage liquidity. ~~CDARS~~^®CDARS® and ~~ICS~~^®ICS® deposits also may be ~~used~~utilized for similar purposes ~~as well as~~ for certain customers seeking higher-yielding instruments or maintaining deposit levels below ~~individual~~ FDIC insurance limits. Significant balance sheet strategies to assist in managing the net interest margin in the current interest rate environment include:

~~increasing total loans, particularly commercial and home equity loans that have variable or adjustable features;~~

~~selling a greater portion of residential mortgage loan production into the secondary market;~~

~~growing demand deposit account types to increase the relative portion of these account types to total deposits;~~

~~employingback-to-back~~ ~~loan swaps for certain commercial loan customers desiring a certain term fixed rate loan equivalent with the Bank receiving a variable rate;~~

~~extending FHLB term borrowings to balance asset/liability mismatches;~~

•

increasing total loans, particularly commercial and home equity loans that have variable or adjustable features;

•

selling a percentage of longer-term residential mortgage loan production into the secondary market;

•

growing demand deposit account types to increase the relative portion of these account types to total deposits;

•

employing back-to-back loan swaps for certain commercial loan customers desiring a term fixed rate loan equivalent with the Bank receiving a variable rate;

•

adjusting FHLB short-term maturing borrowings to balance asset/liability mismatches;

•

using the CDARS^®and ICS^® deposit programs to manage funding needs and overall liability mix, and

~~managing~~

•

adjusting the ~~overall~~ size, mix or duration of the investment portfolio as part of ~~overall~~ liquidity and balance sheet management strategies.

WesBanco also periodically measures the economic value of equity, which is defined as the market value of tangible equity in various rate scenarios. At June 30, 2018, the market value of tangible equity as a percent of base in a 200 basis point rising rate environment indicates a decrease of 8.5%, compared to a decrease of 1.8% at December 31, 2017. In a 100 basis point falling rate environment at June 30, 2018, the model indicates an increase of 1.9%, compared to a decrease of 3.1% as of December 31, 2017. WesBanco’s policy is to limit such change to minus 10% increments for each 100 basis point change in interest rates. Generally, changes in the economic value of equity relate to changes in various assets and liabilities, as well as changes in loan prepayment speeds and deposit decay rates.

ITEM 4. CONTROLS AND PROCEDURES

EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES—WesBanco’s Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”) have concluded that WesBanco’s disclosure controls and procedures (as defined in Rules13a-15(e) and15d-15(e) under the Securities Exchange Act of 1934, as amended), based on their evaluation of these controls and procedures as of the end of the period covered by this Form10-Q, are effective to ensure that information required to be disclosed by WesBanco in the reports it files under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC and that such information is accumulated and communicated to WesBanco’s management, including its principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure.

LIMITATIONS ON THE EFFECTIVENESS OF CONTROLS—WesBanco’s management, including the CEO and CFO, does not expect that WesBanco’s disclosure controls and internal controls will prevent all errors and all fraud. While WesBanco’s disclosure controls and procedures are designed to provide reasonable assurance of achieving their objective, no control system, no matter how well conceived and operated, can provide absolute assurance that the objectives of the control system are met. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the controls.

CHANGES IN INTERNAL CONTROLS—There were no changes in WesBanco’s internal control over financial reporting that occurred during our fiscal quarter ended June 30, ~~2018~~2019 as required to be reported by paragraph (d) of Rules13a-15 and15d-15 under the Securities Exchange Act of 1934, that materially affected, or are reasonably likely to materially affect, WesBanco’s internal control over financial reporting.

PART II – OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

~~Litigation Related to the FFKT Merger~~

WesBanco, Inc. (“WesBanco”) and Farmers Capital Bank Corporation (“Farmers Capital”) entered into a definitive Agreement and Plan of Merger (the “Merger Agreement”), dated as of April 19, 2018, providing for, among other things, the merger of Farmers Capital with and into WesBanco with WesBanco surviving (the “Proposed Merger”). The Merger Agreement also provides that, immediately following the completion of the Proposed Merger, United Bank & Capital Trust Company, a Kentucky state-chartered commercial bank and a wholly-owned subsidiary of Farmers Capital (“United Bank”), will merge with and into WesBanco Bank, Inc., a West Virginia banking corporation and a wholly-owned subsidiary of WesBanco (“WesBanco Bank”), with WesBanco Bank continuing as the surviving bank.

~~On July 10, 2018 an alleged class action complaint was filed by a purported stockholder of Farmers Capital in the Franklin Circuit Court of the Commonwealth of Kentucky captioned~~~~Parshall v. Farmers Capital Bank Corporation~~ ~~(Case No.18-CI-00699)~~ against Farmers Capital, United Bank, the individual members of the board of directors of Farmers Capital (“Defendant Directors”), WesBanco and WesBanco Bank (the “Complaint”). Among other things, the Complaint alleges that the Definitive Proxy Statement filed by Farmers Capital with the Securities and Exchange Commission (“SEC”) on June 15, 2018 failed to disclose allegedly material information, including information relating to Farmers Capital’s financial projections and the valuation analyses performed by Farmers Capital’s financial advisor in connection with the Proposed Merger, and that the Director Defendants breached various of their fiduciary duties to Farmers Capital’s shareholders and that Farmers Capital, United Bank, WesBanco and WesBanco Bank aided and abetted those alleged breaches.

On July 18, 2018, solely to avoid the costs, risks and uncertainties inherent in litigation, Farmers Capital, United Bank, WesBanco, WesBanco Bank and the Director Defendants (Farmers Capital, United Bank, WesBanco, WesBanco Bank and the Director Defendants (collectively the “Defendants”), agreed with the plaintiff, among other things, that the Defendants would make certain additional disclosures concerning the Proposed Merger, and the plaintiff would dismiss his complaint with prejudice. Plaintiff’s counsel reserved the right to seek attorneys’ fees and expenses. The settlement had no impact on the timing of the special meeting of Farmers Capital shareholders, which was held on July 23, 2018 and at which Farmers Capital shareholders voted to approve the Merger Agreement. The settlement also did not affect the merger consideration to be paid to Farmers Capital’s shareholders in connection with the Proposed Merger. The additional disclosures were made pursuant to a Form~~8-K~~ ~~filed by WesBanco with the SEC on July 18, 2018.~~

~~Other Litigation~~

WesBanco is involved in various lawsuits, claims, investigations and proceedings, which arise in the ordinary course of business. While any litigation contains an element of uncertainty, WesBanco does not believe that a material loss related to such proceedings or claims pending or known to be threatened is reasonably possible.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

As of June 30, ~~2018,~~2019, WesBanco had two active one million share stock repurchase plans. The first plan was originally approved by the Board of Directors on March 21, 2007 and the second, which is incremental to the first, was approved October 22, 2015. Each provides for shares to be repurchased for general corporate purposes, which may include a subsequent resource for potential acquisitions, shareholder dividend reinvestment and employee benefit plans. The timing, price and quantity of purchases are at the discretion of WesBanco, and the plan may be discontinued or suspended at any time.

The following table presents the monthly share purchase activity during the quarter ended June 30, ~~2018:~~2019:

Period									Total Number of Shares Purchased		Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans		Maximum Number of Shares that May Yet Be Purchased Under the Plans
Balance at March 31, 2019																1,092,535

Period	Total Number of Shares Purchased		Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans		Maximum Number of Shares that May Yet Be Purchased Under the Plans
Balance at March 31, 2018								1,107,297

April 1, 2018 to April 30, 2018
April 1, 2019 to April 30, 2019
Open market repurchases		—	$	—		—		1,107,297		—		—		—		1,092,535
Other transactions (1)		16,985		42.53		N/A		N/A		20,455	$	41.08	N/A		N/A

May 1, 2018 to May 31, 2018
May 1, 2019 to May 31, 2019
Open market repurchases		—	$	—		—		1,107,297		—		—		—		1,092,535
Other transactions (1)		2,342		45.17		N/A		N/A		1,559	$	39.15	N/A		N/A

June 1, 2018 to June 30, 2018
June 1, 2019 to June 30, 2019
Open market repurchases		—	$	—		—		1,107,297		—		—		—		1,092,535
Other repurchases (2)		14,414		47.21		14,414		1,092,883		15,755	$	37.42		15,755		1,076,780
Other transactions (1)		1,673		47.46		N/A		N/A		4,336		36.82	N/A		N/A


Second Quarter 2018
Second Quarter 2019
Open market repurchases		—	$	—		—		1,107,297		—		—		—		1,092,535
Other repurchases (2)		14,414		47.21		14,414		1,092,883		15,755	$	37.42		15,755		1,076,780
Other transactions (1)		21,000		43.22		N/A		N/A		26,350		40.27	N/A		N/A

Total		35,414	$	44.84		14,414		1,092,883		42,105	$	39.20		15,755		1,076,780

(1)	Consists of open market purchases transacted for employee benefit and dividend reinvestment plans.

(2)

Consists of shares purchased from employees for the payment of withholding taxes to facilitate a vested restricted stock compensation ~~transaction~~transaction.

N/A – Not applicable

ITEM 6. EXHIBITS

2.1
~~2.1~~		Agreement and Plan of Merger, dated as of ~~April 19, 2018,~~July 23, 2019, by and between ~~Wesbanco,~~WesBanco, Inc., ~~Wesbanco~~WesBanco Bank, Inc., ~~Farmers Capital~~Old Line Bancshares, Inc. and Old Line Bank, ~~Corporation, and United Bank & Capital Trust Company~~Inc. (incorporated by reference to Exhibit 2.1 to theForm 8-K filed by the ~~Registrant~~registrant with the Securities and Exchange Commission on ~~April 20, 2018)~~July 23, 2019).

31.1		Certification of Chief Executive Officer of Periodic Report Pursuant to Rule13a-15(e) or Rule15d-15(e).

31.2		Certification of Chief Financial Officer of Periodic Report Pursuant to Rule13a-15(e) or Rule15d-15(e).

32.1		Certification Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101		The following materials from WesBanco’s Quarterly Report on Form10-Q for the quarter ended June 30, ~~2018,~~2019, formatted in ~~XBRL (Extensible~~iXBRL (Inline Extensible Business Reporting Language): (i) the Consolidated Balance Sheets at June 30, ~~2018~~2019 and December 31, ~~2017,~~2018, (ii) the Consolidated Statements of Comprehensive Income for the three and six months ended June 30, ~~2018~~2019 and ~~2017,~~2018, (iii) the Consolidated Statements of Changes in Stockholders’ Equity for the three and six months ended June 30, ~~2018~~2019 and ~~2017,~~2018, (iv) the Consolidated Statements of Cash Flows for the six months ended June 30, ~~2018~~2019 and ~~2017,~~2018, and (v) the Notes to Consolidated Financial Statements.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

			WESBANCO, INC.
			~~WESBANCO, INC.~~

~~Date: July 30, 2018~~			~~/s/ Todd F. Clossin~~

Date: July 31, 2019			/s/ Todd F. Clossin
	Todd F. Clossin
		President and Chief Executive Officer (Principal Executive Officer)

Date: July ~~30, 2018~~31, 2019			/s/ Robert H. Young

			Robert H. Young
			Executive Vice President and Chief Financial Officer
	(Principal Financial and Accounting Officer)

5850

WEST VIRGINIA		55-0571723
~~WEST VIRGINIA~~		~~55-0571723~~
(State of incorporation)		(IRS Employer Identification No.)

1 Bank Plaza, Wheeling, WV		26003
(Address of principal executive offices)		(Zip Code)

Title of each class	Trading Symbol	Name of each exchange on which registered
Common Stock $2.0833 Par Value	WSBC	NASDAQ Global Select Market


Large accelerated filer	☑	☑	Accelerated filer	☐
Non-accelerated filer	☐
~~Non-accelerated~~ ~~filer~~		~~☐ (Do not check if a smaller reporting company)~~	Smaller reporting company	☐

			Emerging growth company	☐


Item No.	ITEM	Page No.		ITEM	Page No.

	PART I – FINANCIAL INFORMATION			PART I - FINANCIAL INFORMATION
1	Financial Statements			Financial Statements	2
	Consolidated Balance Sheets at June 30, 2018 (unaudited) and December 31, 2017		3	Consolidated Balance Sheets at June 30, 2019 (unaudited) and December 31, 2018	2
	Consolidated Statements of Comprehensive Income for the three and six months ended June 30, 2018 and 2017 (unaudited)		4	Consolidated Statements of Comprehensive Income for the three and six months ended June 30, 2019 and 2018 (unaudited)	3
	Consolidated Statements of Changes in Shareholders’ Equity for the six months ended June 30, 2018 and 2017 (unaudited)		5	Consolidated Statements of Changes in Shareholders' Equity for the three and six months ended June 30, 2019 and 2018 (unaudited)	4
	Consolidated Statements of Cash Flows for the six months ended June 30, 2018 and 2017 (unaudited)		6	Consolidated Statements of Cash Flows for the six months ended June 30, 2019 and 2018 (unaudited)	5
	Notes to Consolidated Financial Statements (unaudited)		7	Notes to Consolidated Financial Statements (unaudited)	6

2	Management’s Discussion and Analysis of Financial Condition and Results of Operations		32	Management’s Discussion and Analysis of Financial Condition and Results of Operations	30

3	Quantitative and Qualitative Disclosures About Market Risk		51	Quantitative and Qualitative Disclosures About Market Risk	45

4	Controls and Procedures		54	Controls and Procedures	47

	PART II – OTHER INFORMATION			PART II – OTHER INFORMATION
1	Legal Proceedings		55	Legal Proceedings	48

2	Unregistered Sales of Equity Securities and Use of Proceeds		56	Unregistered Sales of Equity Securities and Use of Proceeds	48

6	Exhibits		57	Exhibits	49

	Signatures		58	Signatures	50

	For the Six Months Ended June 30,
(unaudited, in thousands)	2019			2018
NET CASH PROVIDED BY OPERATING ACTIVITIES	$	76,370		$	66,575
INVESTING ACTIVITIES
Net increase in loans held for investment		(71,557	)		(11,819	)
Available-for-sale debt securities:
Proceeds from sales		66,095			81,521
Proceeds from maturities, prepayments and calls		174,676			114,206
Purchases of securities		(138,310	)		(625,395	)
Held-to-maturity debt securities:
Proceeds from maturities, prepayments and calls		57,383			37,842
Purchases of securities		(6,961	)		(44,656	)
Equity securities:
Proceeds from sales		3,567			827
Proceeds from bank-owned life insurance		—			4,772
Purchases of premises and equipment – net		(6,064	)		(845	)
Net cash received from acquisition		—			86,149
Sale of portfolio loans- net		—			12,996
Net cash provided by (used in) investing activities		78,829			(344,402	)
FINANCING ACTIVITIES
(Decrease) increase in deposits		(135,689	)		36,045
Proceeds from Federal Home Loan Bank borrowings		285,000			575,000
Repayment of Federal Home Loan Bank borrowings		(218,052	)		(327,142	)
Increase in other short-term borrowings		5,626			67,103
Principal repayments of finance lease obligations		(199	)		(189	)
Decrease in federal funds purchased		—			(3,000	)
Repayment of junior subordinated debt		(33,506	)		(8,240	)
Dividends paid to common shareholders		(32,742	)		(24,226	)
Issuance of common stock		71			1,035
Treasury shares sold - net		(539	)		(572	)
Net cash (used in) provided by financing activities		(130,030	)		315,814
Net increase in cash and cash equivalents		25,169			37,987
Cash and cash equivalents at beginning of the period		169,186			117,572
Cash and cash equivalents at end of the period	$	194,355		$	155,559
SUPPLEMENTAL DISCLOSURES
Interest paid on deposits and other borrowings	$	40,501		$	29,791
Income taxes paid		17,650			10,000
Transfers of loans to other real estate owned		637			229
Transfers of loans to held for sale		—			12,996
Non-cash transactions related to FTSB acquisition		—			107,347
Transfer of held-to-maturity debt securities to available-for-sale debt securities		67,393			—
Right of use assets obtained in exchange for lease obligations		19,827			—

	June 30,			December 31,
(unaudited, in thousands, except shares)	2019			2018
ASSETS
Cash and due from banks, including interest bearing amounts of $36,390 and $44,536, respectively	$	194,355		$	169,186
Securities:
Equity securities, at fair value		11,817			11,737
Available-for-sale debt securities, at fair value		2,129,284			2,114,129
Held-to-maturity debt securities (fair values of $921,534 and $1,020,743, respectively)		900,605			1,020,934
Total securities		3,041,706			3,146,800
Loans held for sale		18,649			8,994
Portfolio loans, net of unearned income		7,737,854			7,656,281
Allowance for loan losses		(50,859	)		(48,948	)
Net portfolio loans		7,686,995			7,607,333
Premises and equipment, net		179,866			166,925
Accrued interest receivable		38,450			38,853
Goodwill and other intangible assets, net		914,678			918,850
Bank-owned life insurance		227,976			225,317
Other assets		191,978			176,374
Total Assets	$	12,494,653		$	12,458,632
LIABILITIES
Deposits:
Non-interest bearing demand	$	2,481,065		$	2,441,041
Interest bearing demand		2,079,795			2,146,508
Money market		1,098,917			1,142,925
Savings deposits		1,670,035			1,645,549
Certificates of deposit		1,365,116			1,455,610
Total deposits		8,694,928			8,831,633
Federal Home Loan Bank borrowings		1,121,283			1,054,174
Other short-term borrowings		296,148			290,522
Subordinated debt and junior subordinated debt		156,534			189,842
Total borrowings		1,573,965			1,534,538
Accrued interest payable		6,559			4,627
Other liabilities		145,085			109,007
Total Liabilities		10,420,537			10,479,805
SHAREHOLDERS' EQUITY
Preferred stock, no par value; 1,000,000 shares authorized; none outstanding		—			—
Common stock, $2.0833 par value; 100,000,000 shares authorized in 2019 and 2018, respectively; 54,697,251 and 54,604,294 shares issued, respectively; 54,697,199 and 54,598,134 shares outstanding, respectively		113,952			113,758
Capital surplus		1,168,212			1,166,701
Retained earnings		788,900			737,581
Treasury stock (52 and 6,160 shares - at cost, respectively)		(2	)		(274	)
Accumulated other comprehensive income (loss)		4,113			(37,871	)
Deferred benefits for directors		(1,059	)		(1,068	)
Total Shareholders' Equity		2,074,116			1,978,827
Total Liabilities and Shareholders' Equity	$	12,494,653		$	12,458,632


*(unaudited, in thousands, except shares)*	June 30, 2018			December 31, 2017
ASSETS
Cash and due from banks, including interest bearing amounts of$53,654 and $19,826, respectively	$	155,559		$	117,572
Securities:
Equity securities, at fair value		13,494			13,457
Available-for-sale debt securities, at fair value		1,796,571			1,261,865
Held-to-maturity debt securities (fair values of $1,016,111and $1,023,784, respectively)		1,019,746			1,009,500

Total securities		2,829,811			2,284,822

Loans held for sale		12,053			20,320

Portfolio loans, net of unearned income		6,792,899			6,341,441
Allowance for loan losses		(47,638	)		(45,284	)

Net portfolio loans		6,745,261			6,296,157

Premises and equipment, net		131,502			130,722
Accrued interest receivable		33,868			29,728
Goodwill and other intangible assets, net		661,616			589,264
Bank-owned life insurance		191,701			192,589
Other assets		185,213			155,004

Total Assets	$	10,946,584		$	9,816,178

LIABILITIES
Deposits:
Non-interest bearing demand	$	2,046,537		$	1,846,748
Interest bearing demand		1,809,140			1,625,015
Money market		1,051,043			1,024,856
Savings deposits		1,385,356			1,269,912
Certificates of deposit		1,376,528			1,277,057

Total deposits		7,668,604			7,043,588

Federal Home Loan Bank borrowings		1,248,406			948,203
Other short-term borrowings		258,067			184,805
Subordinated debt and junior subordinated debt		165,420			164,327

Total borrowings		1,671,893			1,297,335

Accrued interest payable		4,417			3,178
Other liabilities		77,564			76,756

Total Liabilities		9,422,478			8,420,857

SHAREHOLDERS’ EQUITY
Preferred stock, no par value; 1,000,000 shares authorized; none outstanding		—			—
Common stock, $2.0833 par value;100,000,000shares authorized in 2018 and 2017, respectively;46,655,012and 44,043,244 shares issued, respectively;46,643,250and 44,043,244 shares outstanding, respectively		97,197			91,756
Capital surplus		789,038			684,730
Retained earnings		692,820			651,357
Treasury stock (11,762and 0shares - at cost, respectively)		(555	)		—
Accumulated other comprehensive loss		(53,352	)		(31,495	)
Deferred benefits for directors		(1,042	)		(1,027	)

Total Shareholders’ Equity		1,524,106			1,395,321

Total Liabilities and Shareholders’ Equity	$	10,946,584		$	9,816,178

																											For the Three Months Ended June 30, 2019 and 2018
	Common Stock					Capital Surplus			Retained Earnings				Treasury Stock				Accumulated Other Comprehensive (Loss) Income				Deferred Benefits for Directors			Total																		Accumulated
*(unaudited, in thousands, except shares* *and per share amounts)*	Shares Outstanding			Amount		Capital Surplus							Treasury Stock
December 31, 2017		44,043,244		$	91,756	$	684,730		Retained Earnings			$	651,357			$	Accumulated Other Comprehensive (Loss) Income			—	Deferred Benefits for Directors			Total			$	(31,495	)	$	(1,027	)	$	1,395,321
																											Common Stock															Other			Deferred
(unaudited, in thousands, except																											Shares						Capital			Retained			Treasury			Comprehensive			Benefits for
shares and per share amounts)																											Outstanding			Amount			Surplus			Earnings			Stock			Income (Loss)			Directors			Total
March 31, 2019																												54,599,127		$	113,758		$	1,167,761		$	761,002		$	(229	)	$	(18,098	)	$	(1,055	)	$	2,023,139
Net income		—			—		—			66,698				—				—				—			66,698			—			—			—			44,814			—			—			—			44,814
Other comprehensive income		—			—		—			—				—				(20,794	)			—			(20,794	)		—			—			—			—			—			22,211			—			22,211
Comprehensive income																												—			—			—			—			—			—			—			67,025
Common dividends declared ($0.31 per share)																												—			—			—			(16,916	)		—			—			—			(16,916	)
Treasury shares acquired																												(19,378	)		—			128			—			(717	)		—			—			(589	)
Stock options exercised																												5,000			8			37			—			56			—			—			101
Restricted stock granted																												112,450			186			(1,074	)		—			888			—			—			—
Stock compensation expense																												—			—			1,364			—			—			—			—			1,364
Deferred benefits for directors- net																												—			—			(4	)		—			—			—			(4	)		(8	)
June 30, 2019																												54,697,199		$	113,952		$	1,168,212		$	788,900		$	(2	)	$	4,113		$	(1,059	)	$	2,074,116

March 31, 2018																												44,060,957		$	91,793		$	686,169		$	673,174		$	—		$	(47,076	)	$	(1,034	)	$	1,403,026
Net income																												—			—			—			33,169			—			—			—			33,169
Other comprehensive loss																												—			—			—			—			—			(6,276	)		—			(6,276	)
Comprehensive income																												—			—			—			—			—			—			—			26,893
Common dividends declared ($0.29 per share)																												—			—			—			(13,523	)		—			—			—			(13,523	)
Shares issued for acquisition																												2,498,761			5,206			102,141			—			—			—			—			107,347
Treasury shares acquired																												(15,159	)		—			34			—			(714	)		—			—			(680	)
Stock options exercised																												19,075			32			392			—			159			—			—			583
Restricted stock granted																												79,616			166			(166	)		—			—			—			—			—
Stock compensation expense																												—			—			929			—			—			—			—			929
Deferred benefits for directors- net																												—			—			(461	)		—			—			—			(8	)		(469	)
June 30, 2018																												46,643,250		$	97,197		$	789,038		$	692,820		$	(555	)	$	(53,352	)	$	(1,042	)	$	1,524,106

																											For the Six Months Ended June 30, 2019 and 2018
December 31, 2018																												54,598,134		$	113,758		$	1,166,701		$	737,581		$	(274	)	$	(37,871	)	$	(1,068	)	$	1,978,827
Net income																												—			—			—			85,151			—			—			—			85,151
Other comprehensive income																												—			—			—			—			—			41,984			—			41,984
Comprehensive income																												—			—			—			—			—			—			—			127,135
Common dividends declared ($0.62 per share)																												—			—			—			(33,832	)		—			—			—			(33,832	)
Treasury shares acquired																												(19,385	)		—			128			—			(717	)		—			—			(589	)
Stock options exercised																												6,000			8			12			—			101			—			—			121
Restricted stock granted																												112,450			186			(1,074	)		—			888			—			—			—
Stock compensation expense																												—			—			2,439			—			—			—			—			2,439
Deferred benefits for directors- net																												—			—			6			—			—			—			9			15
June 30, 2019																												54,697,199		$	113,952		$	1,168,212		$	788,900		$	(2	)	$	4,113		$	(1,059	)	$	2,074,116

December 31, 2017																												44,043,244		$	91,756		$	684,730		$	651,357		$	—		$	(31,495	)	$	(1,027	)	$	1,395,321
Net income																												—			—			—			66,698			—			—			—			66,698
Other comprehensive loss																												—			—			—			—			—			(20,794	)		—			(20,794	)
Comprehensive income		—			—		—			—				—				—				—			45,904			—			—			—			—			—			—			—			45,904
Common dividends declared ($0.58 per share)		—			—		—			(26,298	)			—				—				—			(26,298	)		—			—			—			(26,298	)		—			—			—			(26,298	)
Adoption of accounting standard ASU2016-01		—			—		—			1,063				—				(1,063	)			—			—			—			—			—			1,063			—			(1,063	)		—			—
Shares issued for acquisition		2,498,761			5,206		102,141			—				—				—				—			107,347			2,498,761			5,206			102,141			—			—			—			—			107,347
Treasury shares acquired		(15,159	)		—		34			—				(714	)			—				—			(680	)		(15,159	)		—			34			—			(714	)		—			—			(680	)
Stock options exercised		36,788			69		915			—				159				—				—			1,143			36,788			69			915			—			159			—			—			1,143
Restricted stock granted		79,616			166		(166	)						—											—			79,616			166			(166	)		—			—			—			—			—
Stock compensation expense		—			—		1,838			—				—				—				—			1,838			—			—			1,838			—			—			—			—			1,838
Deferred benefits for directors- net		—			—		(454	)		—				—				—				(15	)		(469	)		—			—			(454	)		—			—			—			(15	)		(469	)

June 30, 2018		46,643,250		$	97,197	$	789,038		$	692,820			$	(555	)		$	(53,352	)		$	(1,042	)	$	1,524,106			46,643,250		$	97,197		$	789,038		$	692,820		$	(555	)	$	(53,352	)	$	(1,042	)	$	1,524,106


December 31, 2016		43,931,715		$	91,524	$	680,507		$	597,071			$	—			$	(27,126	)		$	(568	)	$	1,341,408

Net income		—			—		—			52,228				—				—				—			52,228
Other comprehensive income		—			—		—			—				—				5,008				—			5,008

Comprehensive income		—			—		—			—				—				—				—			57,236
Common dividends declared ($0.52 per share)		—			—		—			(22,878	)			—				—				—			(22,878	)
Treasury shares acquired		(12,987	)		—		—			—				(488	)			—				—			(488	)
Stock options exercised		38,584			75		883			—				103				—				—			1,061
Restricted stock granted		74,023			154		(154	)		—				—				—				—			—
Stock compensation expense		—			—		1,198			—				—				—				—			1,198
Deferred benefits for directors- net		—			—		9			—				—				—				(9	)		—

June 30, 2017		44,031,335		$	91,753	$	682,443		$	626,421			$	(385	)		$	(22,118	)		$	(577	)	$	1,377,537


	For the Six Months Ended June 30,
*(unaudited, in thousands)*	2018			2017
NET CASH PROVIDED BY OPERATING ACTIVITIES	$	66,853		$	56,509

INVESTING ACTIVITIES
Net increase in loans held for investment		(11,819	)		(141,174	)
Debt securitiesavailable-for-sale:
Proceeds from sales		81,521			7,760
Proceeds from maturities, prepayments and calls		114,206			102,225
Purchases of securities		(625,395	)		(104,584	)
Debt securitiesheld-to-maturity:
Proceeds from maturities, prepayments and calls		37,842			64,188
Purchases of securities		(44,656	)		(29,912	)
Equity securities:
Proceeds from sales		827			—
Purchases of securities		(467	)		—
Proceeds from bank-owned life insurance		4,772			349
Purchases of premises and equipment – net		(845	)		(4,898	)
Net cash received from acquisition		86,149			—
Sale of portfolio loans – net		12,996			—

Net cash used in investing activities		(344,869	)		(106,046	)

FINANCING ACTIVITIES
Increase in deposits		36,045			32,494
Proceeds from Federal Home Loan Bank borrowings		575,000			415,000
Repayment of Federal Home Loan Bank borrowings		(327,142	)		(362,331	)
Increase (decrease) in other short-term borrowings		67,103			(6,205	)
Decrease in federal funds purchased		(3,000	)		(25,500	)
Repayment of junior subordinated debt		(8,240	)		—
Dividends paid to common shareholders		(24,226	)		(21,969	)
Issuance of common stock		1,035			990
Treasury shares purchased – net		(572	)		(417	)

Net cash provided by financing activities		316,003			32,062

Net increase (decrease) in cash and cash equivalents		37,987			(17,475	)
Cash and cash equivalents at beginning of the period		117,572			128,170

Cash and cash equivalents at end of the period	$	155,559		$	110,695

SUPPLEMENTAL DISCLOSURES
Interest paid on deposits and other borrowings	$	29,791		$	19,844
Income taxes paid		10,000			14,700
Transfers of loans to other real estate owned		229			298
Transfers of loans to held for sale		12,996			—
Non-cash transactions related to FTSB acquisition		107,347			—


*(unaudited, in thousands)*	April 5, 2018			August 20, 2018
Purchase Price:
Purchase price:
Fair value of WesBanco shares issued	$	107,347		$	391,267
Cash consideration for outstanding FTSB shares		975

Cash consideration for outstanding FFKT shares					37,634
Total purchase price	$	108,322		$	428,901
Fair value of:
Tangible assets acquired	$	610,712		$	1,369,536
Core deposit and other intangible assets acquired		8,237			39,992
Liabilities assumed		(663,970	)		(1,431,663	)
Net cash received in the acquisition		87,124			230,139

Fair value of net assets acquired		42,103			208,004

Goodwill recognized	$	66,219		$	220,897

(unaudited, in thousands)	August 20, 2018
Goodwill recognized as of March 31, 2019	$	219,418
Change in fair value of net assets acquired:
Assets
Other real estate owned		(80	)
Accrued income and other assets		430
Liabilities
Accrued expenses and other liabilities		(1,829	)
Fair value of net assets acquired	$	(1,479	)
Increase in goodwill recognized		1,479
Goodwill recognized as of June 30, 2019	$	220,897


		For the Three Months Ended June 30,				For the Six Months Ended June 30,				For the Three Months Ended June 30,				For the Six Months Ended June 30,
*(unaudited, in thousands, except shares and per share amounts)*		2018		2017		2018		2017		2019		2018		2019		2018
Numerator for both basic and diluted earnings per common share:	Numerator for both basic and diluted earnings per common share:
Net income		$	33,169	$	26,341	$	66,698	$	52,228	$	44,814	$	33,169	$	85,151	$	66,698

Denominator:
Total average basic common shares outstanding			46,498,305		43,995,749		45,281,264		43,971,789		54,628,029		46,498,305		54,613,346		45,281,264
Effect of dilutive stock options and other stock compensation			141,475		65,672		135,746		75,023		105,492		141,475		110,863		135,746

Total diluted average common shares outstanding			46,639,780		44,061,421		45,417,010		44,046,812		54,733,521		46,639,780		54,724,209		45,417,010

Earnings per common share – basic		$	0.71	$	0.60	$	1.47	$	1.19
Earnings per common share – diluted		$	0.71	$	0.60	$	1.47	$	1.19

Earnings per common share - basic										$	0.82	$	0.71	$	1.56	$	1.47
Earnings per common share - diluted										$	0.82	$	0.71	$	1.56	$	1.47


	June 30, 2018
*(unaudited, in thousands)*	One Year or less		One to Five Years		Five to Ten Years		After Ten Years		Mortgage-backed securities		Total
Available-for-sale debt securities
U.S. Treasury	$	9,913	$	—	$	—	$	—	$	—	$	9,913
U.S. Government sponsored entities and agencies		10,459		6,302		13,739		6,802		63,380		100,682
Residential mortgage-backed securities and collateralized mortgage obligations of government sponsored entities and agencies⁽¹⁾		—		—		—		—		1,373,417		1,373,417
Commercial mortgage-backed securities and collateralized mortgage obligations of government sponsored entities and agencies⁽¹⁾		—		—		—		—		140,647		140,647
Obligations of states and political subdivisions		9,629		23,831		51,042		42,297		—		126,799
Corporate debt securities		9,801		33,364		1,948		—		—		45,113

Totalavailable-for-sale debt securities	$	39,802	$	63,497	$	66,729	$	49,099	$	1,577,444	$	1,796,571

Held-to-maturity debt securities⁽²⁾
U.S. Government sponsored entities and agencies	$	—	$	—	$	—	$	—	$	11,487	$	11,487
Residential mortgage-backed securities and collateralized mortgage obligations of government sponsored entities and agencies⁽¹⁾		—		—		—		—		155,553		155,553
Obligations of states and political subdivisions		6,410		123,247		393,073		293,678				816,408
Corporate debt securities		—		7,448		25,215		—		—		32,663

Totalheld-to-maturity debt securities	$	6,410	$	130,695	$	418,288	$	293,678	$	167,040	$	1,016,111

Total debt securities	$	46,212	$	194,192	$	485,017	$	342,777	$	1,744,484	$	2,812,682


	June 30, 2018
	Less than 12 months							12 months or more							Total
	Fair		Unrealized			# of		Fair		Unrealized			# of		Fair		Unrealized			# of
*(unaudited, dollars in thousands)*	Value		Losses			Securities		Value		Losses			Securities		Value		Losses			Securities
U.S. Treasury	$	9,913	$	(13	)		1	$	—	$	—			—	$	9,913	$	(13	)		1
U.S. Government sponsored entities and agencies		71,179		(1,885	)		23		40,491		(975	)		8		111,670		(2,860	)		31
Residential mortgage-backed securities and collateralized mortgage obligations of government sponsored entities and agencies		864,036		(16,625	)		160		610,641		(29,733	)		201		1,474,677		(46,358	)		361
Commercial mortgage-backed securities and collateralized mortgage obligations of government sponsored entities and agencies		104,546		(3,531	)		13		23,225		(981	)		4		127,771		(4,512	)		17
Obligations of states and political subdivisions		357,070		(5,019	)		571		76,447		(2,256	)		163		433,517		(7,275	)		734
Corporate debt securities		43,559		(791	)		21		1,948		(41	)		1		45,507		(832	)		22

Total temporarily impaired securities	$	1,450,303	$	(27,864	)		789	$	752,752	$	(33,986	)		377	$	2,203,055	$	(61,850	)		1,166


	December 31, 2017
	Less than 12 months							12 months or more							Total
	Fair		Unrealized			# of		Fair		Unrealized			# of		Fair		Unrealized			# of
*(unaudited, dollars in thousands)*	Value		Losses			Securities		Value		Losses			Securities		Value		Losses			Securities
U.S. Government sponsored entities and agencies	$	24,776	$	(160	)		4	$	42,248	$	(771	)		8	$	67,024	$	(931	)		12
Residential mortgage-backed securities and collateralized mortgage obligations of government sponsored entities and agencies		423,794		(5,039	)		87		637,461		(16,977	)		193		1,061,255		(22,016	)		280
Commercial mortgage-backed securities and collateralized mortgage obligations of government sponsored entities and agencies		79,061		(1,089	)		10		27,852		(496	)		6		106,913		(1,585	)		16
Obligations of states and political subdivisions		132,831		(852	)		210		77,554		(1,217	)		160		210,385		(2,069	)		370
Corporate debt securities		4,015		(19	)		1		1,948		(40	)		1		5,963		(59	)		2

Total temporarily impaired securities	$	664,477	$	(7,159	)		312	$	787,063	$	(19,501	)		368	$	1,451,540	$	(26,660	)		680


	Allowance for Credit Losses By Category
	For the Six Months Ended June 30, 2018 and 2017
	Commercial			Commercial
	Real Estate-			Real Estate-																					Allowance for Credit Losses By Category
	Land and			Improved			Commercial			Residential			Home						Deposit						For the Six Months Ended June 30, 2019 and 2018
*(unaudited, in thousands)*	Construction			Property			& Industrial			Real Estate			Equity			Consumer			Overdraft			Total			Commercial Real Estate - Land and Construction			Commercial Real Estate -Improved Property			Commercial & Industrial			Residential Real Estate			Home Equity			Consumer			Deposit Overdraft			Total
Balance at December 31, 2017:
Balance at December 31, 2018
Allowance for loan losses	$	3,117		$	21,166		$	9,414		$	3,206		$	4,497		$	3,063		$	821		$	45,284		$	4,039		$	20,848		$	12,114		$	3,822		$	4,356		$	2,797		$	972		$	48,948
Allowance for loan commitments		119			26			173			7			212			37			—			574			169			33			262			12			226			39			—			741

Total beginning allowance for credit losses		3,236			21,192			9,587			3,213			4,709			3,100			821			45,858			4,208			20,881			12,376			3,834			4,582			2,836			972			49,689

Provision for credit losses:
Provision for loan losses		1,465			(1,774	)		2,100			944			54			615			439			3,843			(538	)		1,459			1,309			124			423			333			1,119			4,229
Provision for loan commitments		44			(8	)		2			2			(7	)		—			—			33			18			(9	)		995			1			23			(3	)		—			1,025

Total provision for credit losses		1,509			(1,782	)		2,102			946			47			615			439			3,876			(520	)		1,450			2,304			125			446			330			1,119			5,254

Charge-offs		(136	)		(692	)		(616	)		(509	)		(672	)		(1,793	)		(541	)		(4,959	)		—			(285	)		(1,025	)		(679	)		(673	)		(1,344	)		(860	)		(4,866	)
Recoveries		264			776			636			252			279			1,066			197			3,470			200			345			489			188			215			896			215			2,548

Net charge-offs		128			84			20			(257	)		(393	)		(727	)		(344	)		(1,489	)		200			60			(536	)		(491	)		(458	)		(448	)		(645	)		(2,318	)

Balance at June 30, 2018:
Balance at June 30, 2019
Allowance for loan losses		4,710			19,476			11,534			3,893			4,158			2,951			916			47,638			3,701			22,367			12,887			3,455			4,321			2,682			1,446			50,859
Allowance for loan commitments		163			18			175			9			205			37			—			607			187			24			1,257			13			249			36			—			1,766

Total ending allowance for credit losses	$	4,873		$	19,494		$	11,709		$	3,902		$	4,363		$	2,988		$	916		$	48,245		$	3,888		$	22,391		$	14,144		$	3,468		$	4,570		$	2,718		$	1,446		$	52,625

Balance at December 31, 2016:
Balance at December 31, 2017
Allowance for loan losses	$	4,348		$	18,628		$	8,412		$	4,106		$	3,422		$	3,998		$	760		$	43,674		$	3,117		$	21,166		$	9,414		$	3,206		$	4,497		$	3,063		$	821		$	45,284
Allowance for loan commitments		151			17			188			9			162			44			—			571			119			26			173			7			212			37			—			574

Total beginning allowance for credit losses		4,499			18,645			8,600			4,115			3,584			4,042			760			44,245			3,236			21,192			9,587			3,213			4,709			3,100			821			45,858

Provision for credit losses:
Provision for loan losses		1,039			558			1,552			39			466			970			444			5,068			1,465			(1,774	)		2,100			944			54			615			439			3,843
Provision for loan commitments		14			1			(9	)		1			17			2			—			26			44			(8	)		2			2			(7	)		—			—			33

Total provision for credit losses		1,053			559			1,543			40			483			972			444			5,094			1,509			(1,782	)		2,102			946			47			615			439			3,876

Charge-offs		—			(1,574	)		(1,205	)		(592	)		(293	)		(1,965	)		(611	)		(6,240	)		(136	)		(692	)		(616	)		(509	)		(672	)		(1,793	)		(541	)		(4,959	)
Recoveries		70			376			475			164			151			990			181			2,407			264			776			636			252			279			1,066			197			3,470

Net charge-offs		70			(1,198	)		(730	)		(428	)		(142	)		(975	)		(430	)		(3,833	)		128			84			20			(257	)		(393	)		(727	)		(344	)		(1,489	)

Balance at June 30, 2017:
Balance at June 30, 2018
Allowance for loan losses		5,457			17,988			9,234			3,717			3,746			3,993			774			44,909			4,710			19,476			11,534			3,893			4,158			2,951			916			47,638
Allowance for loan commitments		165			18			179			10			179			46			—			597			163			18			175			9			205			37			—			607

Total ending allowance for credit losses	$	5,622		$	18,006		$	9,413		$	3,727		$	3,925		$	4,039		$	774		$	45,506		$	4,873		$	19,494		$	11,709		$	3,902		$	4,363		$	2,988		$	916		$	48,245


	Allowance for Credit Losses and Recorded Investment in Loans
	Commercial		Commercial
	Real Estate-		Real Estate-		Commercial		Residential						Deposit
	Land and		Improved		and		Real		Home				Over-
*(unaudited, in thousands)*	Construction		Property		Industrial		Estate		Equity		Consumer		draft		Total
June 30, 2018
Allowance for credit losses:
Allowance for loans individually evaluated for impairment	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Allowance for loans collectively evaluated for impairment		4,710		19,476		11,534		3,893		4,158		2,951		916		47,638
Allowance for loan commitments		163		18		175		9		205		37		—		607

Total allowance for credit losses	$	4,873	$	19,494	$	11,709	$	3,902	$	4,363	$	2,988	$	916	$	48,245

Portfolio loans:
Individually evaluated for impairment⁽¹⁾	$	—	$	1,730	$	—	$	—	$	—	$	—	$	—	$	1,730
Collectively evaluated for impairment		479,526		2,699,410		1,293,708		1,449,729		535,629		322,594		—		6,780,596
Acquired with deteriorated credit quality		2,164		6,505		780		1,100		24		—		—		10,573

Total portfolio loans	$	481,690	$	2,707,645	$	1,294,488	$	1,450,829	$	535,653	$	322,594	$	—	$	6,792,899

December 31, 2017
Allowance for credit losses:
Allowance for loans individually evaluated for impairment	$	—	$	388	$	—	$	—	$	—	$	—	$	—	$	388
Allowance for loans collectively evaluated for impairment		3,117		20,778		9,414		3,206		4,497		3,063		821		44,896
Allowance for loan commitments		119		26		173		7		212		37		—		574

Total allowance for credit losses	$	3,236	$	21,192	$	9,587	$	3,213	$	4,709	$	3,100	$	821	$	45,858

Portfolio loans:
Individually evaluated for impairment⁽¹⁾	$	—	$	3,344	$	—	$	—	$	—	$	—	$	—	$	3,344
Collectively evaluated for impairment		391,140		2,593,393		1,124,544		1,352,587		529,196		339,163		—		6,330,023
Acquired with deteriorated credit quality		1,457		5,114		783		714		—		6		—		8,074

Total portfolio loans	$	392,597	$	2,601,851	$	1,125,327	$	1,353,301	$	529,196	$	339,169	$	—	$	6,341,441

	Allowance for Credit Losses and Recorded Investment in Loans
(unaudited, in thousands)	Commercial Real Estate- Land and Construction		Commercial Real Estate- Improved Property		Commercial and Industrial		Residential Real Estate		Home Equity		Consumer		Deposit Over- draft		Total
June 30, 2019
Allowance for credit losses:
Allowance for loans individually evaluated for impairment	$	—	$	1,479	$	11	$	12	$	8	$	1	$	—	$	1,511
Allowance for loans collectively evaluated for impairment		3,701		20,888		12,876		3,443		4,313		2,681		1,446		49,348
Allowance for loan commitments		187		24		1,257		13		249		36		—		1,766
Total allowance for credit losses	$	3,888	$	22,391	$	14,144	$	3,468	$	4,570	$	2,718	$	1,446	$	52,625

Portfolio loans:
Individually evaluated for impairment ⁽¹⁾	$	—	$	5,157	$	192	$	4,922	$	922	$	74	$	—	$	11,267
Collectively evaluated for impairment		482,804		3,381,541		1,299,528		1,627,047		589,381		335,654		—		7,715,955
Acquired with deteriorated credit quality		242		7,889		857		1,644		—		—		—		10,632
Total portfolio loans	$	483,046	$	3,394,587	$	1,300,577	$	1,633,613	$	590,303	$	335,728	$	—	$	7,737,854

December 31, 2018
Allowance for credit losses:
Allowance for loans individually evaluated for impairment	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Allowance for loans collectively evaluated for impairment		4,039		20,848		12,114		3,822		4,356		2,797		972		48,948
Allowance for loan commitments		169		33		262		12		226		39		—		741
Total allowance for credit losses	$	4,208	$	20,881	$	12,376	$	3,834	$	4,582	$	2,836	$	972	$	49,689

Portfolio loans:
Individually evaluated for impairment ⁽¹⁾	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Collectively evaluated for impairment		527,737		3,319,672		1,264,560		1,609,177		599,331		326,063		—		7,646,540
Acquired with deteriorated credit quality		335		5,951		900		2,430		—		125		—		9,741
Total portfolio loans	$	528,072	$	3,325,623	$	1,265,460	$	1,611,607	$	599,331	$	326,188	$	—	$	7,656,281


	Commerical Loans by Internally Assigned Risk Grade								Commercial Loans by Internally Assigned Risk Grade
*(unaudited, in thousands)*	Commercial Real Estate- Land and Construction		Commercial Real Estate- Improved Property		Commercial & Industrial		Total Commercial Loans		Commercial Real Estate- Land and Construction		Commercial Real Estate- Improved Property		Commercial & Industrial		Total Commercial Loans
As of June 30, 2018
As of June 30, 2019
Pass	$	476,242	$	2,656,226	$	1,278,328	$	4,410,796	$	476,109	$	3,319,270	$	1,268,591	$	5,063,970
Criticized - compromised		2,728		27,809		3,508		34,045		5,794		52,657		14,785		73,236
Classified - substandard		2,720		23,610		12,652		38,982		1,143		22,660		17,201		41,004
Classified - doubtful		—		—		—		—		—		—		—		—

Total	$	481,690	$	2,707,645	$	1,294,488	$	4,483,823	$	483,046	$	3,394,587	$	1,300,577	$	5,178,210

As of December 31, 2017
As of December 31, 2018
Pass	$	386,753	$	2,548,805	$	1,110,267	$	4,045,825	$	523,707	$	3,267,304	$	1,245,190	$	5,036,201
Criticized - compromised		2,984		25,673		7,435		36,092		2,297		35,566		13,847		51,710
Classified - substandard		2,860		27,373		7,625		37,858		2,068		22,753		6,423		31,244
Classified - doubtful		—		—		—		—		—		—		—		—

Total	$	392,597	$	2,601,851	$	1,125,327	$	4,119,775	$	528,072	$	3,325,623	$	1,265,460	$	5,119,155


		Age Analysis of Loans														Age Analysis of Loans
*(unaudited, in thousands)*		Current		30-59 Days Past Due		60-89 Days Past Due		90 Days or More Past Due		Total Past Due		Total Loans		90 Days or More Past Due and Accruing⁽¹⁾		Current		30-59 Days Past Due		60-89 Days Past Due		90 Days or More Past Due		Total Past Due		Total Loans		90 Days or More Past Due and Accruing (1)
As of June 30, 2018
As of June 30, 2019
Commercial real estate:
Land and construction		$	481,156	$	287	$	75	$	172	$	534	$	481,690	$	172	$	482,016	$	965	$	45	$	20	$	1,030	$	483,046	$	—
Improved property			2,697,718		1,408		165		8,354		9,927		2,707,645		250		3,382,311		2,297		1,486		8,493		12,276		3,394,587		587

Total commercial real estate			3,178,874		1,695		240		8,526		10,461		3,189,335		422		3,864,327		3,262		1,531		8,513		13,306		3,877,633		587
Commercial and industrial			1,290,411		744		435		2,898		4,077		1,294,488		219		1,296,878		922		142		2,635		3,699		1,300,577		97
Residential real estate			1,435,731		5,469		2,798		6,831		15,098		1,450,829		255		1,617,430		5,962		2,449		7,772		16,183		1,633,613		1,173
Home equity			529,625		1,593		1,232		3,203		6,028		535,653		477		584,058		2,073		412		3,760		6,245		590,303		533
Consumer			319,157		2,025		569		843		3,437		322,594		508		333,279		1,682		506		261		2,449		335,728		244

Total portfolio loans			6,753,798		11,526		5,274		22,301		39,101		6,792,899		1,881		7,695,972		13,901		5,040		22,941		41,882		7,737,854		2,634
Loans held for sale			12,053		—		—		—		—		12,053		—		18,649		—		—		—		—		18,649		—

Total loans		$	6,765,851	$	11,526	$	5,274	$	22,301	$	39,101	$	6,804,952	$	1,881	$	7,714,621	$	13,901	$	5,040	$	22,941	$	41,882	$	7,756,503	$	2,634

Impaired loans included above are as follows:	Impaired loans included above are as follows:
Non-accrual loans		$	8,525	$	1,316	$	1,734	$	20,406	$	23,456	$	31,981			$	9,310	$	1,170	$	2,169	$	20,249		23,588	$	32,898
TDRs accruing interest⁽¹⁾			6,053		139		254		14		407		6,460				5,273		10		146		58		214		5,487

Total impaired		$	14,578	$	1,455	$	1,988	$	20,420	$	23,863	$	38,441			$	14,583	$	1,180	$	2,315	$	20,307	$	23,802	$	38,385

As of December 31, 2017
As of December 31, 2018
Commercial real estate:
Land and construction		$	392,189	$	—	$	172	$	236	$	408	$	392,597	$	—	$	526,660	$	62	$	1,350	$	—	$	1,412	$	528,072	$	—
Improved property			2,589,704		374		1,200		10,573		12,147		2,601,851		243		3,314,765		2,266		2,250		6,342		10,858		3,325,623		175

Total commercial real estate			2,981,893		374		1,372		10,809		12,555		2,994,448		243		3,841,425		2,328		3,600		6,342		12,270		3,853,695		175
Commercial and industrial			1,121,957		572		196		2,602		3,370		1,125,327		20		1,261,536		323		594		3,007		3,924		1,265,460		13
Residential real estate			1,338,240		4,487		2,376		8,198		15,061		1,353,301		1,113		1,593,519		2,717		5,001		10,370		18,088		1,611,607		2,820
Home equity			522,584		2,135		683		3,794		6,612		529,196		742		591,623		2,500		1,273		3,935		7,708		599,331		705
Consumer			334,723		2,466		842		1,138		4,446		339,169		608		322,584		2,084		1,007		513		3,604		326,188		364

Total portfolio loans			6,299,397		10,034		5,469		26,541		42,044		6,341,441		2,726		7,610,687		9,952		11,475		24,167		45,594		7,656,281		4,077
Loans held for sale			20,320		—		—		—		—		20,320		—		8,994		—		—		—		—		8,994		—

Total loans		$	6,319,717	$	10,034	$	5,469	$	26,541	$	42,044	$	6,361,761	$	2,726	$	7,619,681	$	9,952	$	11,475	$	24,167	$	45,594	$	7,665,275	$	4,077

Impaired loans included above are as follows:	Impaired loans included above are as follows:
Non-accrual loans		$	9,195	$	1,782	$	2,033	$	23,815	$	27,630	$	36,825			$	8,910	$	337	$	1,370	$	20,083		21,790	$	30,700
TDRs accruing interest⁽¹⁾			6,055		348		168		—		516		6,571				5,586		59		92		7		158		5,744

Total impaired		$	15,250	$	2,130	$	2,201	$	23,815	$	28,146	$	43,396			$	14,496	$	396	$	1,462	$	20,090	$	21,948	$	36,444


	Impaired Loans																					Impaired Loans
	June 30, 2018									December 31, 2017												June 30, 2019												December 31, 2018
	Unpaid Principal Balance⁽¹⁾		Recorded Investment			Related Allowance				Unpaid Principal Balance⁽¹⁾				Recorded Investment				Related Allowance				Unpaid												Unpaid
									Principal												Recorded				Related				Principal				Recorded				Related
*(unaudited, in thousands)*									Balance (1)												Investment				Allowance				Balance (1)				Investment				Allowance
With no related specific allowance recorded:
Commercial real estate:
Land and construction	$	—		$	—		$	—				$	412			$	239			$	—			$	347			$	295			$	—			$	—			$	—			$	—
Improved property		15,521			10,889			—					18,229				12,863				—				13,499				7,312				—				14,038				9,293				—
Commercial and industrial		5,666		3,317			—				3,745				3,086				—				4,086				2,854				—				4,610				3,428				—
Residential real estate		20,312		18,379			—				20,821				18,982				—				13,572				11,896				—				20,270				18,016				—
Home equity		5,978		5,143			—				5,833				5,169				—				5,247				4,450				—				5,924				5,036				—
Consumer		875		713			—				1,084				952				—				416				311				—				846				671				—

Total impaired loans without a specific allowance		48,352		38,441			—				50,124				41,291				—				37,167				27,118				—				45,688				36,444				—

With a specific allowance recorded:
Commercial real estate:
Land and construction		—		—			—				—				—				—				—				—				—				—				—				—
Improved property		—		—			—				2,105				2,105				388				5,211				5,157				1,479				—				—				—
Commercial and industrial		—		—			—				—				—				—				194				192				11				—				—				—

Residential real estate																							5,358				4,922				12				—				—				—
Home equity																							990				922				8				—				—				—
Consumer																							113				74				1				—				—				—
Total impaired loans with a specific allowance		—		—			—				2,105				2,105				388				11,866				11,267				1,511				—				—				—

Total impaired loans	$	48,352	$	38,441		$	—			$	52,229			$	43,396			$	388			$	49,033			$	38,385			$	1,511			$	45,688			$	36,444			$	—

					Non-accrual Loans ⁽¹⁾
	Non-accrual Loans⁽¹⁾				June 30,		December 31,
*(unaudited, in thousands)*	June 30, 2018		December 31, 2017		2019		2018
Commercial real estate:
Land and construction	$	—	$	239	$	295	$	—
Improved property		9,479		13,318		11,726		8,413

Total commercial real estate		9,479		13,557		12,021		8,413

Commercial and industrial		3,191		2,958		2,854		3,260
Residential real estate		13,951		14,661		12,813		13,831
Home equity		4,726		4,762		4,886		4,610
Consumer		634		887		324		586

Total	$	31,981	$	36,825	$	32,898	$	30,700

	TDRs
	June 30, 2019						December 31, 2018
(unaudited, in thousands)	Accruing		Non-Accrual		Total		Accruing		Non-Accrual		Total
Commercial real estate:
Land and construction	$	—	$	—	$	—	$	—	$	—	$	—
Improved property		743		558		1,301		880		1,529		2,409
Total commercial real estate		743		558		1,301		880		1,529		2,409
Commercial and industrial		192		—		192		168		169		337
Residential real estate		4,005		917		4,922		4,185		921		5,106
Home equity		486		436		922		426		198		624
Consumer		61		13		74		85		38		123
Total	$	5,487	$	1,924	$	7,411	$	5,744	$	2,855	$	8,599

													New TDRs (1)
	New TDRs (1) For the Three Months Ended												For the Three Months Ended
	June 30, 2018						June 30, 2017						June 30, 2019						June 30, 2018
			Pre-		Post-				Pre-		Post-				Pre-		Post-				Pre-		Post-
			Modification		Modification				Modification		Modification				Modification		Modification				Modification		Modification
			Outstanding		Outstanding				Outstanding		Outstanding				Outstanding		Outstanding				Outstanding		Outstanding
	Number of		Recorded		Recorded		Number of		Recorded		Recorded		Number of		Recorded		Recorded		Number of		Recorded		Recorded
*(unaudited, dollars in thousands)*	Modification		Investment		Investment		Modifications		Investment		Investment		Modifications		Investment		Investment		Modifications		Investment		Investment
Commercial real estate:
Land and construction		—	$	—	$	—		—	$	—	$	—		—	$	—	$	—		—	$	—	$	—
Improved Property		—		—		—		—		—		—		—		—		—		—		—		—

Total commercial real estate		—		—		—		—		—		—		—		—		—		—		—		—

Commercial and industrial		1		9		9		—		—		—		1		44		40		1		9		9
Residential real estate		—		—		—		1		11		10		—		—		—		—		—		—
Home equity		1		20		20		1		44		44		1		199		156		1		20		20
Consumer		2		39		36		2		22		20		—		—		—		2		39		36

Total		4	$	68	$	65		4	$	77	$	74		2	$	243	$	196		4	$	68	$	65

									Defaulted TDRs ⁽¹⁾
	Defaulted TDRs⁽¹⁾								For the Six Months Ended
	For the Six Months Ended								June 30, 2019				June 30, 2018
	June 30, 2018				June 30, 2017				Number of		Recorded		Number of		Recorded
*(unaudited, dollars in thousands)*	Number of Defaults		Recorded Investment		Number of Defaults		Recorded Investment		Defaults		Investment		Defaults		Investment
Commercial real estate:
Land and construction		—	$	—		—	$	—		—	$	—		—	$	—
Improved property		1		145		—		—		—		—		1		145

Total commercial real estate		1		145		—		—		—		—		1		145

Commercial and industrial		—		—		—		—		—		—		—		—
Residential real estate		1		121		—		—		1		97		1		121
Home equity		1		7		—		—		—		—		1		7
Consumer		—		—		—		—		1		13		—		—

Total		3	$	273		—	$	—		2	$	110		3	$	273

Year	Amount
2020	$	755
2021		2,444
2022		1,713
2023		2,227
2024 and thereafter		17,686
Total lease payments	$	24,825
Less: Interest		(3,621	)
Present value of lease liabilities	$	21,204


		For the Three Months Ended						For the Six Months Ended
	Location of Gain/(Loss)	June 30,						June 30,
*(unaudited, in thousands)*	Location of Gain/(Loss)	2018			2017			2018		2017
Interest rate swaps	Other income	$	44		$	(108	)	$	211	$	(303	)
Interest rate loan commitments	Mortgage banking income		7			—			143		123
Forward TBA contracts	Mortgage banking income		(11	)		—			399		—

Total		$	40		$	(108	)	$	753	$	(180	)


					June 30, 2018															June 30, 2019
					Fair Value Measurements Using:															Fair Value Measurements Using:
		June 30, 2018			Quoted Prices in Active Markets for Identical Assets			Significant Other Observable Inputs			Significant Unobservable Inputs			Investments Measured at Net Asset			June 30,			Quoted Prices in Active Markets for Identical Assets			Significant Other Observable Inputs			Significant Unobservable Inputs
*(unaudited, in thousands)*				(level 1)			(level 2)			(level 3)			Value			2019			(level 1)			(level 2)			(level 3)
Recurring fair value measurements		June 30, 2018
Equity securities		$	13,494		$	13,494		$	—		$	—		$	—		$	11,817		$	11,817		$	—		$	—
Debt securities -available-for-sale
Available-for-sale debt securities
U.S. Treasury			9,913			—			9,913			—			—			29,781			—			29,781			—
U.S. Government sponsored entities and agencies			100,682			—			100,682			—			—			134,587			—			134,587			—
Residential mortgage-backed securities and collateralized mortgage obligations of government agencies			1,373,417			—			1,373,417			—			—			1,563,042			—			1,563,042			—
Commercial mortgage-backed securities and collateralized mortgage obligations of government sponsored entities and agencies			140,647			—			140,647			—			—			178,656			—			178,656			—
Obligations of state and political subdivisions			126,799			—			126,799			—			—			183,178			—			181,576			1,602
Corporate debt securities			45,113			—			45,113			—			—			40,040			—			40,040			—

Total debt securities -available-for-sale		$	1,796,571		$	—		$	1,796,571		$	—		$	—
Total available-for-sale debt securities																	$	2,129,284		$	—		$	2,127,682		$	1,602
Loans held for sale			12,053			—			12,053			—			—			18,649			—			18,649			—
Other assets - interest rate derivatives agreements			11,048			—			11,048			—			—			13,281			—			13,281			—

Total assets recurring fair value measurements		$	1,833,166		$	13,494		$	1,819,672		$	—		$	—		$	2,173,031		$	11,817		$	2,159,612		$	1,602

Other liabilities - interest rate derivatives agreements		$	10,832		$	—		$	10,832		$	—		$	—		$	14,774		$	—		$	14,774		$	—

Total liabilities recurring fair value measurements		$	10,832		$	—		$	10,832		$	—		$	—		$	14,774		$	—		$	14,774		$	—

Nonrecurring fair value measurements	Nonrecurring fair value measurements
Impaired loans		$	—		$	—		$	—		$	—		$	—
Impaired Loans																	$	2,434			—			—		$	2,434
Other real estate owned and repossessed assets			4,384			—			—			4,384			—			4,973			—			—			4,973

Total nonrecurring fair value measurements		$	4,384		$	—		$	—		$	4,384		$	—		$	7,407		$	—		$	—		$	7,407