UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM10-Q

(Mark One)

☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~March 31,~~June 30, 2019

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period fromto

Commission File Number000-08467

WESBANCO, INC.

(Exact name of Registrant as specified in its charter)

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)

~~Registrant’s~~

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

NOT APPLICABLE

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

Securities registered pursuant to Section 12(b) of the Act:

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

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 every Interactive Data File required to be submitted 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 such files). Yes ☑ No ☐

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.


Large accelerated filer	☑	☑	Accelerated filer	☐
Non-accelerated filer	☐
~~Non-accelerated~~ ~~filer~~		☐	Smaller reporting company	☐

			Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided 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). Yes ☐ No ☑

As of ~~April 22,~~July 24, 2019, there were ~~54,599,127~~54,697,199 shares of WesBanco, Inc. common stock, $2.0833 par value, outstanding.

WESBANCO, INC.

TABLE OF CONTENTS


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 March 31, 2019 (unaudited) and December 31, 2018		3	Consolidated Balance Sheets at June 30, 2019 (unaudited) and December 31, 2018	2
	Consolidated Statements of Comprehensive Income for the three months ended March 31, 2019 and 2018 (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 three months ended March 31, 2019 and 2018 (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 three months ended March 31, 2019 and 2018 (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		33	Management’s Discussion and Analysis of Financial Condition and Results of Operations	30

3	Quantitative and Qualitative Disclosures About Market Risk		52	Quantitative and Qualitative Disclosures About Market Risk	45

4	Controls and Procedures		55	Controls and Procedures	47

	PART II – OTHER INFORMATION			PART II – OTHER INFORMATION

1	Legal Proceedings		56	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

PART I—I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

WESBANCO, INC. CONSOLIDATED BALANCE SHEETS

							June 30,			December 31,
*(unaudited, in thousands, except shares)*	March 31, 2019			December 31, 2018			2019			2018
ASSETS
Cash and due from banks, including interest bearing amounts of$177,797 and $44,536, respectively	$	336,894		$	169,186
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		11,978			11,737			11,817			11,737
Available-for-sale debt securities, at fair value		2,145,089			2,114,129			2,129,284			2,114,129
Held-to-maturity debt securities (fair values of $948,641and $1,020,743, respectively)		936,484			1,020,934

Held-to-maturity debt securities (fair values of $921,534 and $1,020,743, respectively)								900,605			1,020,934
Total securities		3,093,551			3,146,800			3,041,706			3,146,800

Loans held for sale		8,358			8,994			18,649			8,994

Portfolio loans, net of unearned income		7,666,081			7,656,281			7,737,854			7,656,281
Allowance for loan losses		(48,866	)		(48,948	)		(50,859	)		(48,948	)

Net portfolio loans		7,617,215			7,607,333			7,686,995			7,607,333

Premises and equipment, net		180,651			166,925			179,866			166,925
Accrued interest receivable		39,662			38,853			38,450			38,853
Goodwill and other intangible assets, net		915,597			918,850			914,678			918,850
Bank-owned life insurance		226,636			225,317			227,976			225,317
Other assets		182,844			176,374			191,978			176,374

Total Assets	$	12,601,408		$	12,458,632		$	12,494,653		$	12,458,632

LIABILITIES
Deposits:
Non-interest bearing demand	$	2,511,140		$	2,441,041		$	2,481,065		$	2,441,041
Interest bearing demand		2,159,654			2,146,508			2,079,795			2,146,508
Money market		1,148,295			1,142,925			1,098,917			1,142,925
Savings deposits		1,672,967			1,645,549			1,670,035			1,645,549
Certificates of deposit		1,424,275			1,455,610			1,365,116			1,455,610

Total deposits		8,916,331			8,831,633			8,694,928			8,831,633

Federal Home Loan Bank borrowings		1,031,796			1,054,174			1,121,283			1,054,174
Other short-term borrowings		301,547			290,522			296,148			290,522
Subordinated debt and junior subordinated debt		179,632			189,842			156,534			189,842

Total borrowings		1,512,975			1,534,538			1,573,965			1,534,538

Accrued interest payable		6,030			4,627			6,559			4,627
Other liabilities		142,933			109,007			145,085			109,007

Total Liabilities		10,578,269			10,479,805			10,420,537			10,479,805

SHAREHOLDERS’ EQUITY
SHAREHOLDERS' EQUITY
Preferred stock, no par value; 1,000,000 shares authorized; none outstanding		—			—			—			—
Common stock, $2.0833 par value;100,000,000shares authorized;54,604,294shares issued in 2019 and 2018, respectively;54,599,127and 54,598,134 shares outstanding in 2019 and 2018, respectively		113,758			113,758
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		1,167,761			1,166,701			1,168,212			1,166,701
Retained earnings		761,002			737,581			788,900			737,581
Treasury stock (5,167 and 6,160shares in 2019 and 2018, respectively, at cost)		(229	)		(274	)
Accumulated other comprehensive loss		(18,098	)		(37,871	)
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		(1,055	)		(1,068	)		(1,059	)		(1,068	)

Total Shareholders’ Equity		2,023,139			1,978,827

Total Liabilities and Shareholders’ Equity	$	12,601,408		$	12,458,632

Total Shareholders' Equity								2,074,116			1,978,827
Total Liabilities and Shareholders' Equity							$	12,494,653		$	12,458,632

See Notes to Consolidated Financial Statements.

WESBANCO, INC. CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME


	For the Three Months Ended March 31,					For the Three Months Ended June 30,				For the Six Months Ended June 30,
*(unaudited, in thousands, except shares and per share amounts)*	2019		2018			2019		2018		2019		2018
INTEREST AND DIVIDEND INCOME
Loans, including fees	$	95,502	$	69,237		$	96,415	$	78,538	$	191,917	$	147,671
Interest and dividends on securities:
Taxable		16,733		11,543			16,444		14,194		33,175		25,738
Tax-exempt		5,541		4,834			5,142		5,055		10,684		9,890

Total interest and dividends on securities		22,274		16,377			21,586		19,249		43,859		35,628

Other interest income		1,277		803			1,542		1,101		2,820		1,904

Total interest and dividend income		119,053		86,417			119,543		98,888		238,596		185,203

INTEREST EXPENSE
Interest bearing demand deposits		3,946		2,524			4,314		3,150		8,259		5,673
Money market deposits		1,899		878			2,009		1,093		3,908		1,972
Savings deposits		522		189			678		227		1,200		416
Certificates of deposit		3,903		2,536			4,098		2,977		8,001		5,513

Total interest expense on deposits		10,270		6,127			11,099		7,447		21,368		13,574

Federal Home Loan Bank borrowings		6,337		4,498			6,287		5,953		12,624		10,451
Other short-term borrowings		1,556		558			1,483		973		3,039		1,532
Subordinated debt and junior subordinated debt		2,529		1,942			2,214		2,168		4,743		4,110

Total interest expense		20,692		13,125			21,083		16,541		41,774		29,667

NET INTEREST INCOME		98,361		73,292			98,460		82,347		196,822		155,536
Provision for credit losses		2,507		2,168			2,747		1,708		5,254		3,876

Net interest income after provision for credit losses		95,854		71,124			95,713		80,639		191,568		151,660

NON-INTEREST INCOME
Trust fees		7,115		6,503			6,339		5,752		13,454		12,255
Service charges on deposits		6,549		4,822			6,197		5,146		12,747		9,969
Electronic banking fees		5,892		4,829			7,154		5,728		13,046		10,558
Net securities brokerage revenue		1,860		1,670			1,973		1,809		3,833		3,479
Bank-owned life insurance		1,319		2,756			1,340		1,128		2,659		3,884
Mortgage banking income		1,056		1,004			1,618		1,670		2,674		2,776
Net securities gains (losses)		657		(39	)
Net securities gains							2,909		358		3,566		319
Net gain on other real estate owned and other assets		136		262			376		229		512		491
Other income		3,189		2,173			3,250		1,588		6,438		3,760

Totalnon-interest income		27,773		23,980			31,156		23,408		58,929		47,491

NON-INTEREST EXPENSE
Salaries and wages		30,940		25,006			31,646		26,872		62,585		51,878
Employee benefits		9,989		6,912			9,705		7,965		19,694		14,877
Net occupancy		5,566		4,656			5,385		4,103		10,951		8,759
Equipment		4,833		3,949			4,818		4,095		9,651		8,044
Marketing		1,243		1,116			1,254		1,405		2,497		2,521
FDIC insurance		1,353		658			1,155		868		2,508		1,526
Amortization of intangible assets		2,514		1,086			2,465		1,312		4,978		2,397
Restructuring and merger-related expense		3,107		245			81		5,412		3,188		5,657
Other operating expenses		14,887		10,943			15,443		11,511		30,333		22,455

Totalnon-interest expense		74,432		54,571			71,952		63,543		146,385		118,114

Income before provision for income taxes		49,195		40,533			54,917		40,504		104,112		81,037
Provision for income taxes		8,858		7,004			10,103		7,335		18,961		14,339

NET INCOME	$	40,337	$	33,529		$	44,814	$	33,169	$	85,151	$	66,698

EARNINGS PER COMMON SHARE
Basic	$	0.74	$	0.76		$	0.82	$	0.71	$	1.56	$	1.47
Diluted	$	0.74	$	0.76		$	0.82	$	0.71	$	1.56	$	1.47

AVERAGE COMMON SHARES OUTSTANDING
Basic		54,598,499		44,050,701			54,628,029		46,498,305		54,613,346		45,281,264
Diluted		54,706,337		44,168,242			54,733,521		46,639,780		54,724,209		45,417,010

DIVIDENDS DECLARED PER COMMON SHARE	$	0.31	$	0.29		$	0.31	$	0.29	$	0.62	$	0.58

COMPREHENSIVE INCOME	$	60,110	$	19,011		$	67,025	$	26,893	$	127,135	$	45,904

See Notes to Consolidated Financial Statements.

WESBANCO, INC. CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY

For the Three Months Ended March 31, 2019 and 2018
   Common Stock    Accumulated
Other
Comprehensive
(Loss) Income Deferred
Benefits
for
Directors
(unaudited, in thousands, except shares
and per share amounts)
   Shares
Outstanding Amount    Capital
Surplus Retained
Earnings Treasury
Stock Total
December 31, 2018
   54,598,134 $ 113,758    $ 1,166,701 $ 737,581 $ (274 ) $ (37,871 ) $ (1,068 ) $ 1,978,827




Net income
   —   —      —   40,337 —   —   —   40,337
Other comprehensive income
   —   —      —   —   —   19,773 —   19,773


Comprehensive income
   —   —      —   —   —   —   —   60,110
Common dividends declared
($0.31 per share)
   —   —      —   (16,916 ) —   —   —   (16,916 )
Treasury shares acquired
   (7 ) —      —   —   —   —   —   —
Stock options exercised
   1,000 —      (25 ) —   45 —   —   20
Stock compensation expense
   —   —      1,075 —   —   —   —   1,075
Deferred benefits for directors- net
   —   —      10 —   —   —   13 23




March 31, 2019
   54,599,127 $ 113,758    $ 1,167,761 $ 761,002 $ (229 ) $ (18,098 ) $ (1,055 ) $ 2,023,139




December 31, 2017
   44,043,244 $ 91,756    $ 684,730 $ 651,357 $ —   $ (31,495 ) $ (1,027 ) $ 1,395,321




Net income
   —   —      —   33,529 —   —   —   33,529
Other comprehensive loss
   —   —      —   —   —   (14,518 ) —   (14,518 )


Comprehensive income
   —   —      —   —   —   —   — �� 19,011
Common dividends declared
($0.29 per share)
   —   —      —   (12,775 ) —   —   —   (12,775 )
Adoption of accounting standard
ASU2016-01
   —   —      —   1,063 —   (1,063 ) —   —
Stock options exercised
   17,713 37    523 —   —   —   —   560
Stock compensation expense
   —   —      909 —   —   —   —   909
Deferred benefits for directors- net
   —   —      7 —   —   —   (7 ) —




March 31, 2018
   44,060,957 $ 91,793    $ 686,169 $ 673,174 $ —   $ (47,076 ) $ (1,034 ) $ 1,403,026

	For the Three Months Ended June 30, 2019 and 2018
															Accumulated
	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		—			—		—			44,814			—			—			—			44,814
Other comprehensive income		—			—		—			—			—			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
Common dividends declared ($0.58 per share)		—			—		—			(26,298	)		—			—			—			(26,298	)
Adoption of accounting standard ASU 2016-01		—			—		—			1,063			—			(1,063	)		—			—
Shares issued for acquisition		2,498,761			5,206		102,141			—			—			—			—			107,347
Treasury shares acquired		(15,159	)		—		34			—			(714	)		—			—			(680	)
Stock options exercised		36,788			69		915			—			159			—			—			1,143
Restricted stock granted		79,616			166		(166	)		—			—			—			—			—
Stock compensation expense		—			—		1,838			—			—			—			—			1,838
Deferred benefits for directors- net		—			—		(454	)		—			—			—			(15	)		(469	)
June 30, 2018		46,643,250		$	97,197	$	789,038		$	692,820		$	(555	)	$	(53,352	)	$	(1,042	)	$	1,524,106

See Notes to Consolidated Financial Statements.

WESBANCO, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS


	For the Three Months Ended March 31,						For the Six Months Ended June 30,
*(unaudited, in thousands)*	2019			2018			2019			2018
NET CASH PROVIDED BY OPERATING ACTIVITIES	$	51,190		$	31,907		$	76,370		$	66,575

INVESTING ACTIVITIES
Net (increase) decrease in loans held for investment		(5,287	)		19,923
Net increase in loans held for investment								(71,557	)		(11,819	)
Available-for-sale debt securities:
Proceeds from sales		66,095			—			66,095			81,521
Proceeds from maturities, prepayments and calls		79,051			53,496			174,676			114,206
Purchases of securities		(85,096	)		(540,624	)		(138,310	)		(625,395	)
Held-to-maturity debt securities:
Proceeds from maturities, prepayments and calls		20,067			17,121			57,383			37,842
Purchases of securities		(4,308	)		(15,343	)		(6,961	)		(44,656	)
Equity securities:
Proceeds from sales		590			—			3,567			827
Proceeds from bank-owned life insurance		—			3,506			—			4,772
Purchases of premises and equipment – net		(2,181	)		(328	)		(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		68,931			(462,249	)		78,829			(344,402	)

FINANCING ACTIVITIES
Increase in deposits		85,238			183,012
(Decrease) increase in deposits								(135,689	)		36,045
Proceeds from Federal Home Loan Bank borrowings		100,000			375,000			285,000			575,000
Repayment of Federal Home Loan Bank borrowings		(122,463	)		(156,261	)		(218,052	)		(327,142	)
Increase in other short-term borrowings		11,025			27,848			5,626			67,103
Principal repayments of finance lease obligations		(99	)		(94	)		(199	)		(189	)
Decrease in federal funds purchased		—			(5,000	)		—			(3,000	)
Repayment of junior subordinated debt		(10,310	)		—			(33,506	)		(8,240	)
Dividends paid to common shareholders		(15,824	)		(11,450	)		(32,742	)		(24,226	)
Issuance of common stock		—			560			71			1,035
Treasury shares sold—net		20			—

Net cash provided by financing activities		47,587			413,615

Net increase (decrease) in cash and cash equivalents		167,708			(16,727	)
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			169,186			117,572

Cash and cash equivalents at end of the period	$	336,894		$	100,845		$	194,355		$	155,559

SUPPLEMENTAL DISCLOSURES
Interest paid on deposits and other borrowings	$	19,645		$	12,496		$	40,501		$	29,791
Income taxes paid		—			—			17,650			10,000
Transfers of loans to other real estate owned		402			—			637			229
Transfers of loans to held for sale								—			12,996
Non-cash transactions related to FTSB acquisition								—			107,347
Transfer ofheld-to-maturity debt securities toavailable-for-sale debt securities		67,393			—			67,393			—
Right of use assets obtained in exchange for lease obligations								19,827			—

See Notes to Consolidated Financial Statements.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

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, 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 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 2018, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”)2018-15, ~~“Intangibles—~~ “Intangibles - Goodwill and~~Other—~~ Other - Internal-Use Software (Subtopic350-40): 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 obtaininternal-use software and hosting arrangements that include aninternal-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 ASU2018-15 on WesBanco’s Consolidated Financial Statements.

In August 2018, the FASB issued ASU2018-14, “Compensation—Retirement Benefits—Defined Benefit Plans—General (Topic715-20): Disclosure Framework—Changes to the Disclosure Requirements for Defined Benefit Plans.” This ASU modifies ASC715-20 to improve disclosure requirements for employers that sponsor defined benefit pension or other postretirement plans. The guidance is effective for fiscal years ending after December 15, 2020. Early adoption is permitted. WesBanco is currently assessing the impact of ASU2018-14 on WesBanco’s Consolidated Financial Statements.

In August 2018, the FASB issued ASU2018-13, “Fair Value Measurement – Disclosure Framework – Changes to the 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 (2) other similar “open ended” disclosure requirements to promote the appropriate exercise of discretion of entities. The guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. Early adoption is permitted, including adoption in an interim period. WesBanco is currently assessing the impact of ASU2018-13 on WesBanco’s Consolidated Financial Statements.

In September 2016, the FASB issued ASU2016-13, “Financial Instruments – Credit Losses (Topic 326)”, which 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 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 aregrossed-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 ~~loan~~loans 30 days or more past due, loans with an internal risk grade of below average or lower, loans classified asnon-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 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 ASC 310-20 loans (“the good book”) from acquisitions will continue to accrete through interest income over the life of such loans. WesBanco ~~plans to~~will perform ~~several~~ parallel runs of the new methodology inthroughout the remainder of 2019 prior to adoption of the ASU. WesBanco currently anticipates that an increase to the allowance for credit losses ~~will~~may be recognized upon adoption to provide for ~~the~~ expected credit losses over the estimated life of ~~the financial assets.~~loan and investment receivables. The magnitude of the increase will depend on economic conditions and trends in the loan ~~portfolio~~and securities portfolios at the time of adoption.

In February 2016, the FASB issued ASU2016-02, “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. 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 and ASU2018-11, which allows entities to choose an additional transition method, under which an entity initially applies the new lease standard at the adoption date and recognizes a cumulative-effect adjustment to the opening balance of retained earnings in the period of 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 January 1, 2019 using the transitional method. In addition, WesBanco utilized ~~the~~certain practical expedients ~~that allowed~~including the ~~Company to retain~~following - retained the classifications of existing leases, ~~notre-assess~~no re-assessment to determine if existing leases have initial direct costs and utilized hindsight when determining the lease term and assessment of ~~impairment.~~impairment in existing leases. WesBanco capitalized $20 million forright-of-use assets and lease liabilities, net of existing straight-line lease liabilities and unfavorable acquired lease liabilities. See additional disclosures in Note 6, “Leases”.

In August 2017, the FASB issued ASU2017-12, “Targeted Improvements to Accounting for Hedging Activities.” The new guidance ~~will make~~makes more financial and nonfinancial hedging strategies eligible for hedge accounting. It also ~~amends~~amended the presentation and disclosure requirements and ~~changes~~changed how companies assess effectiveness. It iswas intended to more closely align hedge accounting with companies’ risk management strategies, simplify the application of hedge accounting, and increase transparency as to the scope and results of hedging programs. The guidance iswas effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. For WesBanco, this update was effective for the fiscal year beginning January 1, 2019. Upon adoption, WesBanco reclassified $67.3 million of callableheld-to-maturity municipal debt securities toavailable-for-sale debt securities.

In October 2018, the FASB issued ASU2018-16, “Derivatives and Hedging (Topic 815): Inclusion of the Secured Overnight Financing Rate (SOFR) Overnight Index Swap (OIS) Rate as a Benchmark Interest Rate for Hedge Accounting Purposes.” This ASU modifies ASC 815 for eligible benchmark interest rates. Due to concerns about the sustainability of the London Interbank Offered Rate (LIBOR), the Federal Reserve initiated an effort to introduce an alternative reference rate in the United States. The Overnight Index Swap (OIS) rate, which is based on SOFR is permitted as a U.S. benchmark interest rate for hedge accounting purposes. The guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. For WesBanco, this update was effective for the fiscal year beginning January 1, 2019. The adoption of this pronouncement did not have a material impact on WesBanco’s Consolidated Financial Statements.

NOTE 2. MERGERS AND ACQUISITIONS

On August 20, 2018, WesBanco completed its acquisition of Farmers Capital Bank Corp. (“FFKT”), a bank holding company headquartered in Frankfort, KY. On the acquisition date, FFKT had approximately $1.6 billion in assets, excluding goodwill, which included approximately $1.0 billion in loans and $239.3 million in securities. The FFKT acquisition was valued at $428.9 million, based on WesBanco’s closing stock price on August 20, 2018, of $49.40, and resulted in WesBanco issuing 7,920,387 shares of its common stock and $37.6 million in cash in exchange for all of the outstanding shares of FFKT common stock. The assets and liabilities of FFKT were recorded on WesBanco’s Balance Sheet at their preliminary estimated fair values as of August 20, 2018, the acquisition date, and FFKT’s results of operations have been included in WesBanco’s Consolidated Statements of Income since that date. The fair values for certain assets and liabilities acquired from FFKT on August 20, 2018 represented preliminary estimates.Based on a preliminary purchase price allocation, WesBanco recorded ~~$219.4~~$220.9 million in goodwill and $37.4 million in core deposit intangibles in its community banking segment and $2.6 million in trust customer relationship intangibles in its trust and 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 FFKT, it is not practicable to determine revenue or net income included in WesBanco’s operating results relating to FFKT since the date of acquisition, as FFKT’s results cannot be separately identified.

For the ~~three~~six months ended ~~March 31,~~June 30, 2019, WesBanco recorded merger-related expenses of ~~$3.1~~$3.2 million associated with the FFKT acquisition.

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


*(unaudited, in thousands)*	August 20, 2018			August 20, 2018
Purchase price:
Fair value of WesBanco shares issued	$	391,267		$	391,267
Cash consideration for outstanding FFKT shares		37,634			37,634

Total purchase price	$	428,901		$	428,901
Fair value of:
Tangible assets acquired	$	1,369,186		$	1,369,536
Core deposit and other intangible assets acquired		39,992			39,992
Liabilities assumed		(1,429,834	)		(1,431,663	)
Net cash received in the acquisition		230,139			230,139

Fair value of net assets acquired		209,483			208,004

Goodwill recognized	$	219,418		$	220,897

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 FFKT within one year from the date of acquisition:


*(unaudited, in thousands)*	August 20, 2018		August 20, 2018
Assets acquired
Cash and due from banks	$	230,139	$	230,139
Securities		239,321		239,321
Loans		1,025,800		1,025,800
Goodwill and other intangible assets		259,410		260,889
Accrued income and other assets		104,065		104,415

Total assets acquired	$	1,858,735	$	1,860,564

Liabilities assumed
Deposits	$	1,330,328	$	1,330,328
Borrowings		71,780		71,780
Accrued expenses and other liabilities		27,726		29,555

Total liabilities assumed	$	1,429,834	$	1,431,663

Net assets acquired	$	428,901	$	428,901

The following table presents the changes in the allocation of the purchase price of the assets acquired and the liabilities assumed at the date of the acquisition previously reported as of ~~December~~March 31, ~~2018:~~2019:


*(unaudited, in thousands)*	August 20, 2018			August 20, 2018
Goodwill recognized as of December 31, 2018	$	220,240
Goodwill recognized as of March 31, 2019				$	219,418
Change in fair value of net assets acquired:
Assets
Loans		24
Premises and equipment		188
Other real estate owned		(749	)		(80	)
Accrued income and other assets		1,409			430
Liabilities
Accrued expenses and other liabilities		(50	)		(1,829	)

Fair value of net assets acquired	$	822		$	(1,479	)

Decrease in goodwill recognized		(822	)

Goodwill recognized as of March 31, 2019	$	219,418

Increase in goodwill recognized					1,479
Goodwill recognized as of June 30, 2019				$	220,897

The fair value estimates for ~~loans, premises and equipment, deferred taxes~~other assets and other ~~assets/~~liabilities have continued to fluctuate as the final valuations ~~and/or appraisals~~ are completed. The Company expects to finalize ~~the~~ purchase price ~~accounts~~accounting of FFKT within one year of ~~the~~ date of acquisition.

NOTE 3. EARNINGS PER COMMON SHARE

Earnings per common share are calculated as follows:


	For the Three Months Ended
	March 31,				For the Three Months Ended June 30,				For the Six Months Ended June 30,
*(unaudited, in thousands, except shares and per share amounts)*	2019		2018		2019		2018		2019		2018
Numerator for both basic and diluted earnings per common share:
Net income	$	40,337	$	33,529	$	44,814	$	33,169	$	85,151	$	66,698

Denominator:
Total average basic common shares outstanding		54,598,499		44,050,701		54,628,029		46,498,305		54,613,346		45,281,264
Effect of dilutive stock options and other stock compensation		107,838		117,541		105,492		141,475		110,863		135,746

Total diluted average common shares outstanding		54,706,337		44,168,242		54,733,521		46,639,780		54,724,209		45,417,010

Earnings per common share—basic	$	0.74	$	0.76
Earnings per common share—diluted	$	0.74	$	0.76

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

~~As of March 31, 2019, 117,600 options~~

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

As of June 30, 2019, 40,608 contingently issuable shares were estimated to be awarded under the 2018 and 2017 total shareholder return plans as stock performance targets were met and are therefore included in the diluted calculation. As of June 30, 2019, the shares ~~computation~~related to 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 ~~March 31, 2018.~~

June 30, 2019 and are included in the diluted calculation. As of ~~March 31, 2019,~~June 30, 2018, 42,912 contingently issuable shares ~~totaling 44,688,~~ were estimated to be awarded under the 2018 and 2017 total shareholder return plans as stock performance targets were met and are included in the diluted calculation. Performance based restricted stock compensation totaling 17,081 shares were estimated to be awarded as of ~~March 31, 2019~~June 30, 2018 and are included in the diluted calculation. As of March 31, 2018, contingently issuable shares, totaling 39,216, were estimated to be awarded under the 2018, 2017 and 2016 total shareholder return plans as stock performance targets were met and are included in the diluted calculation. Performance based restricted stock compensation totaling 9,000 shares were estimated to be awarded as of March 31, 2018 and are included in the diluted calculation.

NOTE 4. SECURITIES

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

   March 31, 2019    December 31, 2018
      Gross    Gross Estimated       Gross    Gross Estimated
   Amortized    Unrealized    Unrealized Fair    Amortized    Unrealized    Unrealized Fair
(unaudited, in thousands)
   Cost    Gains    Losses Value    Cost    Gains    Losses Value
Available-for-sale debt securities

U.S. Treasury
   $ 19,699    $ 13    $ —   $ 19,712    $ 19,882    $ 3    $ (7 ) $ 19,878
U.S. Government sponsored entities and agencies
   138,380    1,535    (625 ) 139,290    142,852    556    (1,756 ) 141,652
Residential mortgage-backed securities and collateralized mortgage obligations of government sponsored entities and agencies
   1,590,044    8,646    (15,906 ) 1,582,784    1,585,864    2,912    (27,521 ) 1,561,255
Commercial mortgage-backed securities and collateralized mortgage obligations of government sponsored entities and agencies
   177,168    1,179    (1,342 ) 177,005    171,671    264    (2,963 ) 168,972
Obligations of states and political subdivisions
   182,603    3,613    (149 ) 186,067    184,057    2,039    (982 ) 185,114
Corporate debt securities
   40,114    279    (162 ) 40,231    37,730    87    (559 ) 37,258












Totalavailable-for-sale debt securities
   $ 2,148,008    $ 15,265    $ (18,184 ) $ 2,145,089    $ 2,142,056    $ 5,861    $ (33,788 ) $ 2,114,129












Held-to-maturity debt securities

U.S. Government sponsored entities and agencies
   $ 10,627    $ 7    $ (357 ) $ 10,277    $ 10,823    $ 6    $ (329 ) $ 10,500
Residential mortgage-backed securities and collateralized mortgage obligations of government sponsored entities and agencies
   142,931    359    (2,258 ) 141,032    148,300    204    (4,170 ) 144,334
Obligations of states and political subdivisions
   749,652    14,435    (637 ) 763,450    828,520    8,771    (4,012 ) 833,279
Corporate debt securities
   33,274    644    (36 ) 33,882    33,291    12    (673 ) 32,630












Totalheld-to-maturity debt securities
   $ 936,484    $ 15,445    $ (3,288 ) $ 948,641    $ 1,020,934    $ 8,993    $ (9,184 ) $ 1,020,743












Total debt securities
   $ 3,084,492    $ 30,710    $ (21,472 ) $ 3,093,730    $ 3,162,990    $ 14,854    $ (42,972 ) $ 3,134,872

	June 30, 2019									December 31, 2018
(unaudited, in thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value		Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value
Available-for-sale debt securities
U.S. Treasury	$	29,705	$	76	$	—		$	29,781	$	19,882	$	3	$	(7	)	$	19,878
U.S. Government sponsored entities and agencies		130,578		4,147		(138	)		134,587		142,852		556		(1,756	)		141,652
Residential mortgage-backed securities and collateralized mortgage obligations of government sponsored entities and agencies		1,550,885		17,598		(5,441	)		1,563,042		1,585,864		2,912		(27,521	)		1,561,255
Commercial mortgage-backed securities and collateralized mortgage obligations of government sponsored entities and agencies		175,355		3,417		(116	)		178,656		171,671		264		(2,963	)		168,972
Obligations of states and political subdivisions		177,888		5,305		(15	)		183,178		184,057		2,039		(982	)		185,114
Corporate debt securities		39,695		499		(154	)		40,040		37,730		87		(559	)		37,258
Total available-for-sale debt securities	$	2,104,106	$	31,042	$	(5,864	)	$	2,129,284	$	2,142,056	$	5,861	$	(33,788	)	$	2,114,129
Held-to-maturity debt securities
U.S. Government sponsored entities and agencies	$	10,020	$	36	$	(104	)	$	9,952	$	10,823	$	6	$	(329	)	$	10,500
Residential mortgage-backed securities and collateralized mortgage obligations of government sponsored entities and agencies		136,929		834		(642	)		137,121		148,300		204		(4,170	)		144,334
Obligations of states and political subdivisions		720,399		19,566		(216	)		739,749		828,520		8,771		(4,012	)		833,279
Corporate debt securities		33,257		1,455		—			34,712		33,291		12		(673	)		32,630
Total held-to-maturity debt securities	$	900,605	$	21,891	$	(962	)	$	921,534	$	1,020,934	$	8,993	$	(9,184	)	$	1,020,743
Total debt securities	$	3,004,711	$	52,933	$	(6,826	)	$	3,050,818	$	3,162,990	$	14,854	$	(42,972	)	$	3,134,872

At ~~March 31,~~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.

Equity securities, of which ~~$8.5~~$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 ~~$12.0~~$11.8 million and $11.7 million at ~~March 31,~~June 30, 2019 and December 31, 2018, respectively.

The following table presents the fair value ofavailable-for-sale andheld-to-maturity debt securities by contractual maturity at ~~March 31,~~June 30, 2019. In some instances, the issuers may have the right to call or prepay obligations without penalty prior to the contractual maturity date.


	March 31, 2019
	One Year		One to		Five to		After		Mortgage-backed				June 30, 2019
*(unaudited, in thousands)*	or less		Five Years		Ten Years		Ten Years		securities		Total		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	$	19,712	$	—	$	—	$	—	$	—	$	19,712	$	29,781	$	—	$	—	$	—	$	—	$	29,781
U.S. Government sponsored entities and agencies		496		5,948		18,353		16,042		98,451		139,290		498		6,048		18,472		9,363		100,206		134,587
Residential mortgage-backed securities and collateralized mortgage obligations of government sponsored entities and agencies (1)		—		—		—		—		1,582,784		1,582,784		—		—		—		—		1,563,042		1,563,042
Commercial mortgage-backed securities and collateralized mortgage obligations of government sponsored entities and agencies (1)		—		—		—		—		177,005		177,005		—		—		—		—		178,656		178,656
Obligations of states and political subdivisions		11,253		47,331		83,027		44,456		—		186,067		8,108		53,422		76,671		44,977		—		183,178
Corporate debt securities		1,027		32,139		7,065		—		—		40,231		627		32,216		7,197		—		—		40,040

Totalavailable-for-sale debt securities	$	32,488	$	85,418	$	108,445	$	60,498	$	1,858,240	$	2,145,089	$	39,014	$	91,686	$	102,340	$	54,340	$	1,841,904	$	2,129,284

Held-to-maturity debt securities (2)
U.S. Government sponsored entities and agencies	$	—	$	—	$	—	$	—	$	10,277	$	10,277	$	—	$	—	$	—	$	—	$	9,952	$	9,952
Residential mortgage-backed securities and collateralized mortgage obligations of government sponsored entities and agencies (1)				—		—		—		141,032		141,032		—		—		—		—		137,121		137,121
Obligations of states and political subdivisions		9,048		117,502		352,924		283,976		—		763,450		15,652		115,724		334,357		274,016		—		739,749
Corporate debt securities		—		8,680		25,202		—		—		33,882		—		10,913		23,799		—		—		34,712

Totalheld-to-maturity debt securities	$	9,048	$	126,182	$	378,126	$	283,976	$	151,309	$	948,641	$	15,652	$	126,637	$	358,156	$	274,016	$	147,073	$	921,534

Total debt securities	$	41,536	$	211,600	$	486,571	$	344,474	$	2,009,549	$	3,093,730	$	54,666	$	218,323	$	460,496	$	328,356	$	1,988,977	$	3,050,818

⁽¹⁾	~~Mortgage-backed and collateralized mortgage securities, which have prepayment provisions, are not assigned to maturity categories due to fluctuations in their prepayment speeds.~~

⁽²⁾

~~Theheld-to-maturity~~ ~~debt securities portfolio is carried at an amortized cost of $936.5~~

⁽¹⁾ Mortgage-backed and collateralized mortgage securities, which have prepayment provisions, are not assigned to maturity categories due to fluctuations in their prepayment speeds.

⁽²⁾The held-to-maturity debt securities portfolio is carried at an amortized cost of $900.6 million.

Securities with aggregate fair values of $2.0 billion at ~~March 31,~~June 30, 2019 and December 31, 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 $66.1 million and $0$81.5 million for the ~~three~~six months ended ~~March 31,~~June 30, 2019 and 2018, respectively. Net unrealized ~~losses~~gains (losses) onavailable-for-sale securities included in accumulated other comprehensive income net of tax, as of ~~March 31,~~June 30, 2019 and December 31, 2018 were ~~$2.3~~$19.4 million and ~~$21.5~~($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 ASU2016-01 effective January 1, 2018 for the three and six months ended ~~March 31,~~June 30, 2019 and 2018, respectively.


	For the Three Months Ended
	March 31,						For the Three Months Ended June 30,					For the Six Months Ended June 30,
*(unaudited, in thousands)*	2019			2018			2019			2018		2019			2018
Debt securities:
Gross realized gains	$	242		$	7		$	106		$	5	$	348		$	12
Gross realized losses		(191	)		(18	)		(18	)		—		(209	)		(18	)

Net gains (losses) on debt securities	$	51		$	(11	)	$	88		$	5	$	139		$	(6	)

Equity securities:
Net unrealized gains (losses) recognized on securities still held	$	603		$	(28	)
Net unrealized gains recognized on securities still held							$	265		$	347	$	868		$	319
Net realized gains recognized on securities sold		3			—			2,556			6		2,559			6

Net gains (losses) on equity securities	$	606		$	(28	)

Net securities gains (losses)	$	657		$	(39	)

Net gains on equity securities							$	2,821		$	353	$	3,427		$	325
Net securities gains							$	2,909		$	358	$	3,566		$	319

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 ~~March 31,~~June 30, 2019 and December 31, ~~2018:~~2018, respectively:

   March 31, 2019
   Less than 12 months    12 months or more    Total
(unaudited, dollars in thousands)
   Fair
Value    Unrealized
Losses # of
Securities    Fair
Value    Unrealized
Losses # of
Securities    Fair
Value    Unrealized
Losses # of
Securities
U.S. Government sponsored entities and agencies
   $ 758    $ (4 ) 2    $ 62,057    $ (978 ) 14    $ 62,815    $ (982 ) 16
Residential mortgage-backed securities and collateralized mortgage obligations of government sponsored entities and agencies
   37,601    (198 ) 8    896,540    (17,966 ) 286    934,141    (18,164 ) 294
Commercial mortgage-backed securities and collateralized mortgage obligations of government sponsored entities and agencies
   8,208    (25 ) 4    99,578    (1,317 ) 12    107,786    (1,342 ) 16
Obligations of states and political subdivisions
   2,514    (7 ) 7    130,249    (779 ) 224    132,763    (786 ) 231
Corporate debt securities
   8,369    (118 ) 4    9,886    (80 ) 5    18,255    (198 ) 9












Total temporarily impaired securities
   $ 57,450    $ (352 ) 25    $ 1,198,310    $ (21,120 ) 541    $ 1,255,760    $ (21,472 ) 566












   December 31, 2018
   Less than 12 months    12 months or more    Total
(unaudited, dollars in thousands)
   Fair
Value    Unrealized
Losses # of
Securities    Fair
Value    Unrealized
Losses # of
Securities    Fair
Value    Unrealized
Losses # of
Securities
U.S. Treasury
   $ 9,972    $ (7 ) 1    $ —      $ —   —      $ 9,972    $ (7 ) 1
U.S. Government sponsored entities and agencies
   18,926    (148 ) 8    76,385    (1,937 ) 14    95,311    (2,085 ) 22
Residential mortgage-backed securities and collateralized mortgage obligations of government sponsored entities and agencies
   285,534    (1,862 ) 44    922,698    (29,829 ) 291    1,208,232    (31,691 ) 335
Commercial mortgage-backed securities and collateralized mortgage obligations of government sponsored entities and agencies
   9,186    (18 ) 6    111,068    (2,945 ) 14    120,254    (2,963 ) 20
Obligations of states and political subdivisions
   104,469    (439 ) 207    303,681    (4,555 ) 513    408,150    (4,994 ) 720
Corporate debt securities
   38,791    (898 ) 18    11,452    (334 ) 5    50,243    (1,232 ) 23












Total temporarily impaired securities
   $ 466,878    $ (3,372 ) 284    $ 1,425,284    $ (39,600 ) 837    $ 1,892,162    $ (42,972 ) 1,121

	June 30, 2019
	Less than 12 months							12 months or more							Total
(unaudited, dollars in thousands)	Fair Value		Unrealized Losses			# of Securities		Fair Value		Unrealized Losses			# of Securities		Fair Value		Unrealized Losses			# of Securities
U.S. Government sponsored entities and agencies	$	—	$	—			—	$	28,542	$	(242	)		7	$	28,542	$	(242	)		7
Residential mortgage-backed securities and collateralized mortgage obligations of government sponsored entities and agencies		30,301		(95	)		4		564,036		(5,988	)		211		594,337		(6,083	)		215
Commercial mortgage-backed securities and collateralized mortgage obligations of government sponsored entities and agencies		3,783		(26	)		4		26,655		(90	)		12		30,438		(116	)		16
Obligations of states and political subdivisions		609		(1	)		2		38,999		(230	)		76		39,608		(231	)		78
Corporate debt securities		7,920		(111	)		3		1,947		(43	)		1		9,867		(154	)		4
Total temporarily impaired securities	$	42,613	$	(233	)		13	$	660,179	$	(6,593	)		307	$	702,792	$	(6,826	)		320

	December 31, 2018
	Less than 12 months							12 months or more							Total
(unaudited, dollars in thousands)	Fair Value		Unrealized Losses			# of Securities		Fair Value		Unrealized Losses			# of Securities		Fair Value		Unrealized Losses			# of Securities
U.S. Treasury	$	9,972	$	(7	)		1	$	—	$	—			—	$	9,972	$	(7	)		1
U.S. Government sponsored entities and agencies		18,926		(148	)		8		76,385		(1,937	)		14		95,311		(2,085	)		22
Residential mortgage-backed securities and collateralized mortgage obligations of government sponsored entities and agencies		285,534		(1,862	)		44		922,698		(29,829	)		291		1,208,232		(31,691	)		335
Commercial mortgage-backed securities and collateralized mortgage obligations of government sponsored entities and agencies		9,186		(18	)		6		111,068		(2,945	)		14		120,254		(2,963	)		20
Obligations of states and political subdivisions		104,469		(439	)		207		303,681		(4,555	)		513		408,150		(4,994	)		720
Corporate debt securities		38,791		(898	)		18		11,452		(334	)		5		50,243		(1,232	)		23
Total temporarily impaired securities	$	466,878	$	(3,372	)		284	$	1,425,284	$	(39,600	)		837	$	1,892,162	$	(42,972	)		1,121

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 ~~$50.4~~$54.7 million and $50.8 million at ~~March 31,~~June 30, 2019 and December 31, 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.

NOTE 5. LOANS AND THE ALLOWANCE FOR CREDIT LOSSES

The recorded investment in loans is presented in the Consolidated Balance Sheets net of deferred loan fees and costs, and discounts on purchased loans. Net deferred loan costs were $4.2 million and $3.2 million at ~~March 31,~~June 30, 2019 and December 31, 2018, respectively. The unamortized discount on purchased loans from acquisitions was ~~$44.8~~$40.1 million at ~~March 31,~~June 30, 2019, including ~~$21.0~~$19.0 million related to FFKT, and $49.3 million at December 31, 2018.

						June 30,		December 31,
*(unaudited, in thousands)*		March 31, 2019		December 31, 2018		2019		2018
Commercial real estate:
Land and construction		$	505,127	$	528,072	$	483,046	$	528,072
Improved property			3,337,281		3,325,623		3,394,587		3,325,623

Total commercial real estate			3,842,408		3,853,695		3,877,633		3,853,695

Commercial and industrial			1,274,992		1,265,460		1,300,577		1,265,460
Residential real estate			1,628,067		1,611,607		1,633,613		1,611,607
Home equity	��		590,462		599,331		590,303		599,331
Consumer			330,152		326,188		335,728		326,188

Total portfolio loans			7,666,081		7,656,281		7,737,854		7,656,281

Loans held for sale			8,358		8,994		18,649		8,994

Total loans		$	7,674,439	$	7,665,275	$	7,756,503	$	7,665,275

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

																									Allowance for Credit Losses By Category
	Allowance for Credit Losses By Category For the Three Months Ended March 31, 2019 and 2018																								For the Six Months Ended June 30, 2019 and 2018
*(unaudited, in thousands)*	Commercial Real Estate - Land and Construction			Commercial Real Estate - Improved Property			Commercial & Industrial			Residential Real Estate			Home Equity			Consumer			Deposit 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, 2018:
Balance at December 31, 2018
Allowance for loan losses	$	4,039		$	20,848		$	12,114		$	3,822		$	4,356		$	2,797		$	972		$	48,948		$	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			169			33			262			12			226			39			—			741

Total beginning allowance for credit losses		4,208			20,881			12,376			3,834			4,582			2,836			972			49,689			4,208			20,881			12,376			3,834			4,582			2,836			972			49,689

Provision for credit losses:
Provision for loan losses		(6	)		(909	)		1,050			122			223			233			575			1,288			(538	)		1,459			1,309			124			423			333			1,119			4,229
Provision for loan commitments		25			(9	)		1,181			(1	)		22			1			—			1,219			18			(9	)		995			1			23			(3	)		—			1,025

Total provision for credit losses		19			(918	)		2,231			121			245			234			575			2,507			(520	)		1,450			2,304			125			446			330			1,119			5,254

Charge-offs		—			(222	)		(635	)		(320	)		(357	)		(661	)		(441	)		(2,636	)		—			(285	)		(1,025	)		(679	)		(673	)		(1,344	)		(860	)		(4,866	)
Recoveries		12			198			378			121			47			411			99			1,266			200			345			489			188			215			896			215			2,548

Net charge-offs		12			(24	)		(257	)		(199	)		(310	)		(250	)		(342	)		(1,370	)		200			60			(536	)		(491	)		(458	)		(448	)		(645	)		(2,318	)

Balance at March 31, 2019:
Balance at June 30, 2019
Allowance for loan losses		4,045			19,915			12,907			3,745			4,269			2,780			1,205			48,866			3,701			22,367			12,887			3,455			4,321			2,682			1,446			50,859
Allowance for loan commitments		194			24			1,443			11			248			40			—			1,960			187			24			1,257			13			249			36			—			1,766

Total ending allowance for credit losses	$	4,239		$	19,939		$	14,350		$	3,756		$	4,517		$	2,820		$	1,205		$	50,826		$	3,888		$	22,391		$	14,144		$	3,468		$	4,570		$	2,718		$	1,446		$	52,625

Balance at December 31, 2017:
Balance at December 31, 2017
Allowance for loan losses	$	3,117		$	21,166		$	9,414		$	3,206		$	4,497		$	3,063		$	821		$	45,284		$	3,117		$	21,166		$	9,414		$	3,206		$	4,497		$	3,063		$	821		$	45,284
Allowance for loan commitments		119			26			173			7			212			37			—			574			119			26			173			7			212			37			—			574

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

Provision for credit losses:
Provision for loan losses		1,090			(895	)		919			202			262			583			(48	)		2,113			1,465			(1,774	)		2,100			944			54			615			439			3,843
Provision for loan commitments		57			(5	)		3			—			(4	)		4			—			55			44			(8	)		2			2			(7	)		—			—			33

Total provision for credit losses		1,147			(900	)		922			202			258			587			(48	)		2,168			1,509			(1,782	)		2,102			946			47			615			439			3,876

Charge-offs		—			(279	)		(109	)		(287	)		(576	)		(1,125	)		(267	)		(2,643	)		(136	)		(692	)		(616	)		(509	)		(672	)		(1,793	)		(541	)		(4,959	)
Recoveries		117			287			270			131			120			546			109			1,580			264			776			636			252			279			1,066			197			3,470

Net charge-offs		117			8			161			(156	)		(456	)		(579	)		(158	)		(1,063	)		128			84			20			(257	)		(393	)		(727	)		(344	)		(1,489	)

Balance at March 31, 2018:
Balance at June 30, 2018
Allowance for loan losses		4,324			20,279			10,494			3,252			4,303			3,067			615			46,334			4,710			19,476			11,534			3,893			4,158			2,951			916			47,638
Allowance for loan commitments		176			21			176			7			208			41			—			629			163			18			175			9			205			37			—			607

Total ending allowance for credit losses	$	4,500		$	20,300		$	10,670		$	3,259		$	4,511		$	3,108		$	615		$	46,963		$	4,873		$	19,494		$	11,709		$	3,902		$	4,363		$	2,988		$	916		$	48,245

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


	Allowance for Credit Losses and Recorded Investment in Loans																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		Commercial Real Estate- Land and Construction		Commercial Real Estate- Improved Property		Commercial and Industrial		Residential Real Estate		Home Equity		Consumer		Deposit Over- draft		Total
March 31, 2019
June 30, 2019
Allowance for credit losses:
Allowance for loans individually evaluated for impairment	$	—	$	59	$	12	$	13	$	7	$	1	$	—	$	92	$	—	$	1,479	$	11	$	12	$	8	$	1	$	—	$	1,511
Allowance for loans collectively evaluated for impairment		4,045		19,856		12,895		3,732		4,262		2,779		1,205		48,774		3,701		20,888		12,876		3,443		4,313		2,681		1,446		49,348
Allowance for loan commitments		194		24		1,443		11		248		40		—		1,960		187		24		1,257		13		249		36		—		1,766

Total allowance for credit losses	$	4,239	$	19,939	$	14,350	$	3,756	$	4,517	$	2,820	$	1,205	$	50,826	$	3,888	$	22,391	$	14,144	$	3,468	$	4,570	$	2,718	$	1,446	$	52,625

Portfolio loans:
Individually evaluated for impairment⁽¹⁾	$	—	$	2,133	$	307	$	5,078	$	796	$	103	$	—	$	8,417	$	—	$	5,157	$	192	$	4,922	$	922	$	74	$	—	$	11,267
Collectively evaluated for impairment		504,885		3,327,142		1,273,810		1,621,169		589,666		330,049		—		7,646,721		482,804		3,381,541		1,299,528		1,627,047		589,381		335,654		—		7,715,955
Acquired with deteriorated credit quality		242		8,006		875		1,820		—		—		—		10,943		242		7,889		857		1,644		—		—		—		10,632

Total portfolio loans	$	505,127	$	3,337,281	$	1,274,992	$	1,628,067	$	590,462	$	330,152	$	—	$	7,666,081	$	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		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		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	$	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		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		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	$	528,072	$	3,325,623	$	1,265,460	$	1,611,607	$	599,331	$	326,188	$	—	$	7,656,281

~~(1)~~

~~Commercial loans greater than $1 million that are reported as~~⁽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~~ $100 million. Factors that are considered for 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 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, and are considerednon-accrual. However, recognition of loss may be deferred if there are reasonably specific pending factors that will reduce the risk if they occur.

The following tables summarize commercial loans by their 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
As of March 31, 2019

Pass
   $ 497,566    $ 3,269,034    $ 1,241,697    $ 5,008,297
Criticized—compromised
   5,599    47,464    16,628    69,691
Classified—substandard
   1,962    20,783    16,667    39,412
Classified—doubtful
   —      —      —      —








Total
   $ 505,127    $ 3,337,281    $ 1,274,992    $ 5,117,400








As of December 31, 2018

Pass
   $ 523,707    $ 3,267,304    $ 1,245,190    $ 5,036,201
Criticized—compromised
   2,297    35,566    13,847    51,710
Classified—substandard
   2,068    22,753    6,423    31,244
Classified—doubtful
   —      —      —      —








Total
   $ 528,072    $ 3,325,623    $ 1,265,460    $ 5,119,155

	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
As of June 30, 2019
Pass	$	476,109	$	3,319,270	$	1,268,591	$	5,063,970
Criticized - compromised		5,794		52,657		14,785		73,236
Classified - substandard		1,143		22,660		17,201		41,004
Classified - doubtful		—		—		—		—
Total	$	483,046	$	3,394,587	$	1,300,577	$	5,178,210

As of December 31, 2018
Pass	$	523,707	$	3,267,304	$	1,245,190	$	5,036,201
Criticized - compromised		2,297		35,566		13,847		51,710
Classified - substandard		2,068		22,753		6,423		31,244
Classified - doubtful		—		—		—		—
Total	$	528,072	$	3,325,623	$	1,265,460	$	5,119,155

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 ~~$20.1~~$20.0 million at ~~March 31,~~June 30, 2019 and $22.9 million at December 31, 2018, of which $2.0 and $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 FFKT Loans – In conjunction with the FFKT acquisition, WesBanco acquired loans with a book value of $1,064.8 million as of August 20, 2018. These loans were recorded at the ~~preliminary~~ fair value of $1,025.8 million, with $988.3 million categorized as ASC310-20 loans. The fair market value adjustment on these loans of $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 $5.3 million were recorded at the ~~preliminary~~ fair value of $4.6 million, of which $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 ~~March 31,~~June 30, 2019 was ~~$3.2~~$3.1 million, while the outstanding customer balance was ~~$3.8~~$3.6 million. At ~~March 31,~~June 30, 2019, no allowance for loan losses has been recognized related to the FFKT-acquired impaired loans. Certain acquired underperforming loans with an acquired book value of $45.2 million were sold during the fourth quarter of 2018 for $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.

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

							For the Six Months Ended
	For the Three Months Ended						June 30,			June 30,
*(unaudited, in thousands)*	March 31, 2019			March 31, 2018			2019			2018
Balance at beginning of period	$	6,203		$	1,724		$	6,203		$	1,724
Acquisitions		1,300			—			1,300			—
Reduction due to change in projected cash flows		(74	)		(86	)		(960	)		(86	)
Reclass fromnon-accretable difference		831			2,841			839			5,877
Transfers out		—			—			—			—
Accretion		(968	)		(268	)		(2,240	)		(440	)

Balance at end of period	$	7,292		$	4,211		$	5,142		$	7,075

The following tables summarize the age analysis of all categories of loans:


		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 March 31, 2019
As of June 30, 2019
Commercial real estate:
Land and construction		$	503,148	$	1,852	$	127	$	—	$	1,979	$	505,127	$	—	$	482,016	$	965	$	45	$	20	$	1,030	$	483,046	$	—
Improved property			3,325,120		5,226		864		6,071		12,161		3,337,281		558		3,382,311		2,297		1,486		8,493		12,276		3,394,587		587

Total commercial real estate			3,828,268		7,078		991		6,071		14,140		3,842,408		558		3,864,327		3,262		1,531		8,513		13,306		3,877,633		587
Commercial and industrial			1,270,957		905		115		3,015		4,035		1,274,992		221		1,296,878		922		142		2,635		3,699		1,300,577		97
Residential real estate			1,610,652		6,993		2,656		7,766		17,415		1,628,067		1,096		1,617,430		5,962		2,449		7,772		16,183		1,633,613		1,173
Home equity			583,118		2,970		398		3,976		7,344		590,462		730		584,058		2,073		412		3,760		6,245		590,303		533
Consumer			327,589		1,579		783		201		2,563		330,152		135		333,279		1,682		506		261		2,449		335,728		244

Total portfolio loans			7,620,584		19,525		4,943		21,029		45,497		7,666,081		2,740		7,695,972		13,901		5,040		22,941		41,882		7,737,854		2,634
Loans held for sale			8,358		—		—		—		—		8,358		—		18,649		—		—		—		—		18,649		—

Total loans		$	7,628,942	$	19,525	$	4,943	$	21,029	$	45,497	$	7,674,439	$	2,740	$	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		$	9,203	$	1,234	$	1,501	$	18,289		21,024	$	30,227			$	9,310	$	1,170	$	2,169	$	20,249		23,588	$	32,898
TDRs accruing interest⁽¹⁾			5,181		196		104		—		300		5,481				5,273		10		146		58		214		5,487

Total impaired		$	14,384	$	1,430	$	1,605	$	18,289	$	21,324	$	35,708			$	14,583	$	1,180	$	2,315	$	20,307	$	23,802	$	38,385

As of December 31, 2018
Commercial real estate:
Land and construction		$	526,660	$	62	$	1,350	$	—	$	1,412	$	528,072	$	—	$	526,660	$	62	$	1,350	$	—	$	1,412	$	528,072	$	—
Improved property			3,314,765		2,266		2,250		6,342		10,858		3,325,623		175		3,314,765		2,266		2,250		6,342		10,858		3,325,623		175

Total commercial real estate			3,841,425		2,328		3,600		6,342		12,270		3,853,695		175		3,841,425		2,328		3,600		6,342		12,270		3,853,695		175
Commercial and industrial			1,261,536		323		594		3,007		3,924		1,265,460		13		1,261,536		323		594		3,007		3,924		1,265,460		13
Residential real estate			1,593,519		2,717		5,001		10,370		18,088		1,611,607		2,820		1,593,519		2,717		5,001		10,370		18,088		1,611,607		2,820
Home equity			591,623		2,500		1,273		3,935		7,708		599,331		705		591,623		2,500		1,273		3,935		7,708		599,331		705
Consumer			322,584		2,084		1,007		513		3,604		326,188		364		322,584		2,084		1,007		513		3,604		326,188		364

Total portfolio loans			7,610,687		9,952		11,475		24,167		45,594		7,656,281		4,077		7,610,687		9,952		11,475		24,167		45,594		7,656,281		4,077
Loans held for sale			8,994		—		—		—		—		8,994		—		8,994		—		—		—		—		8,994		—

Total loans		$	7,619,681	$	9,952	$	11,475	$	24,167	$	45,594	$	7,665,275	$	4,077	$	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		$	8,910	$	337	$	1,370	$	20,083		21,790	$	30,700			$	8,910	$	337	$	1,370	$	20,083		21,790	$	30,700
TDRs accruing interest⁽¹⁾			5,586		59		92		7		158		5,744				5,586		59		92		7		158		5,744

Total impaired		$	14,496	$	396	$	1,462	$	20,090	$	21,948	$	36,444			$	14,496	$	396	$	1,462	$	20,090	$	21,948	$	36,444

⁽¹⁾	Loans 90 days or more past due and accruing interest exclude TDRs 90 days or more past due and accruing interest.

The following tables summarize impaired loans:

														Impaired Loans
														June 30, 2019						December 31, 2018
		Impaired Loans												Unpaid						Unpaid
		March 31, 2019						December 31, 2018						Principal		Recorded		Related		Principal		Recorded		Related
*(unaudited, in thousands)*		Unpaid Principal Balance (1)		Recorded Investment		Related Allowance		Unpaid Principal Balance (1)		Recorded Investment		Related Allowance		Balance (1)		Investment		Allowance		Balance (1)		Investment		Allowance
With no related specific allowance recorded:
Commercial real estate:
Land and construction		$	337	$	285	$	—	$	—	$	—	$	—	$	347	$	295	$	—	$	—	$	—	$	—
Improved property			11,521		7,261		—		14,038		9,293		—		13,499		7,312		—		14,038		9,293		—
Commercial and industrial			3,987		3,067		—		4,610		3,428		—		4,086		2,854		—		4,610		3,428		—
Residential real estate			13,460		11,793		—		20,270		18,016		—		13,572		11,896		—		20,270		18,016		—
Home equity			5,337		4,523		—		5,924		5,036		—		5,247		4,450		—		5,924		5,036		—
Consumer			499		362		—		846		671		—		416		311		—		846		671		—
	��
Total impaired loans without a specific allowance			35,141		27,291		—		45,688		36,444		—		37,167		27,118		—		45,688		36,444		—

With a specific allowance recorded:
Commercial real estate:
Land and construction			—		—		—		—		—		—		—		—		—		—		—		—
Improved property			2,154		2,133		59		—		—		—		5,211		5,157		1,479		—		—		—
Commercial and industrial			309		307		12		—		—		—		194		192		11		—		—		—
Residential real estate			5,519		5,078		13		—		—		—		5,358		4,922		12		—		—		—
Home equity			826		796		7		—		—		—		990		922		8		—		—		—
Consumer			144		103		1		—		—		—		113		74		1		—		—		—

Total impaired loans with a specific allowance			8,952		8,417		92		—		—		—		11,866		11,267		1,511		—		—		—

Total impaired loans		$	44,093	$	35,708	$	92	$	45,688	$	36,444	$	—	$	49,033	$	38,385	$	1,511	$	45,688	$	36,444	$	—

⁽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.

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

	Impaired Loans
	For the Three Months Ended								For the Six Months Ended
	June 30, 2019				June 30, 2018				June 30, 2019				June 30, 2018
	Average		Interest		Average		Interest		Average		Interest		Average		Interest
	Recorded		Income		Recorded		Income		Recorded		Income		Recorded		Income
(unaudited, in thousands)	Investment		Recognized		Investment		Recognized		Investment		Recognized		Investment		Recognized
With no related specific allowance recorded:
Commercial real estate:
Land and construction	$	290	$	—	$	400	$	—	$	193	$	—	$	346	$	—
Improved property		7,287		—		10,604		23		7,955		—		11,357		368
Commercial and industrial		2,961		—		3,036		2		3,116		—		3,008		4
Residential real estate		11,845		—		18,264		61		13,902		—		18,434		127
Home equity		4,487		—		5,068		6		4,670		—		5,098		11
Consumer		337		—		758		2		448		—		823		5
Total impaired loans without a specific allowance		27,207		—		38,130		94		30,284		—		39,066		515
With a specific allowance recorded:
Commercial real estate:
Land and construction		—		—		—		—		—		—		—		—
Improved property		3,645		14		1,052		—		2,430		28		1,403		—
Commercial and industrial		250		4		—		—		166		7		—		—
Residential real estate		5,000		60		—		—		3,333		118		—		—
Home equity		859		7		—		—		573		15		—		—
Consumer		89		1		—		—		59		2		—		—
Total impaired loans with a specific allowance		9,843		86		1,052		—		6,561		170		1,403		—
Total impaired loans	$	37,050	$	86	$	39,182	$	94	$	36,845	$	170	$	40,469	$	515

   Impaired Loans
   For the Three Months Ended
March 31, 2019    For the Three Months Ended
March 31, 2018
(unaudited, in thousands)
   Average
Recorded
Investment    Interest
Income
Recognized    Average
Recorded
Investment    Interest
Income
Recognized
With no related specific allowance recorded:

Commercial real estate:

Land and construction
   $ 143    $ —      $ 520    $ —
Improved property
   8,277    —      11,591    345
Commercial and industrial
   3,246    —      2,791    2
Residential real estate
   13,774    —      18,367    66
Home equity
   4,780    —      5,070    5
Consumer
   450    —      878    3








Total impaired loans without a specific allowance
   30,670    —      39,217    421








With a specific allowance recorded:

Commercial real estate:

Land and construction
   —      —      —      —
Improved property
   1,067    14    2,105    —
Commercial and industrial
   154    3    —      —
Residential real estate
   2,539    58    —      —
Home equity
   398    8    —      —
Consumer
   52    1    —      —








Total impaired loans with a specific allowance
   4,210    84    2,105    —








Total impaired loans
   $ 34,880    $ 84    $ 41,322    $ 421

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

					Non-accrual Loans ⁽¹⁾
	Non-accrual Loans (1)				June 30,		December 31,
*(unaudited, in thousands)*	March 31, 2019		December 31, 2018		2019		2018
Commercial real estate:
Land and construction	$	285	$	—	$	295	$	—
Improved property		8,639		8,413		11,726		8,413

Total commercial real estate		8,924		8,413		12,021		8,413

Commercial and industrial		3,212		3,260		2,854		3,260
Residential real estate		12,871		13,831		12,813		13,831
Home equity		4,813		4,610		4,886		4,610
Consumer		407		586		324		586

Total	$	30,227	$	30,700	$	32,898	$	30,700

⁽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.

⁽¹⁾

At March 31, 2019, there was one borrower with a loan greater than $1.0 million totaling $3.3 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 asnon-accrual~~ ~~TDRs.~~

	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

   TDRs
   March 31, 2019    December 31, 2018
(unaudited, in thousands)
   Accruing    Non-Accrual    Total    Accruing    Non-Accrual    Total
Commercial real estate:

Land and construction
   $ —      $ —      $ —      $ —      $ —      $ —
Improved property
   755    1,378    2,133    880    1,529    2,409












Total commercial real estate
   755    1,378    2,133    880    1,529    2,409












Commercial and industrial
   162    145    307    168    169    337
Residential real estate
   4,000    1,078    5,078    4,185    921    5,106
Home equity
   506    290    796    426    198    624
Consumer
   58    45    103    85    38    123












Total
   $ 5,481    $ 2,936    $ 8,417    $ 5,744    $ 2,855    $ 8,599

As of ~~March 31,~~June 30, 2019 and December 31, 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 $0.2 million and $0.1 million as of ~~March 31,~~June 30, 2019 and December 31, 2018.

The following tables present details related to loans identified as TDRs during the three and six months ended ~~March 31,~~June 30, 2019 and 2018, respectively:

													New TDRs (1)
													For the Three Months Ended
													June 30, 2019						June 30, 2018
															Pre-		Post-				Pre-		Post-
	New TDRs (1)														Modification		Modification				Modification		Modification
	For the Three Months Ended														Outstanding		Outstanding				Outstanding		Outstanding
	March 31, 2019						March 31, 2018						Number of		Recorded		Recorded		Number of		Recorded		Recorded
*(unaudited, dollars in thousands)*	Number of Modifications		Pre- Modification Outstanding Recorded Investment		Post- Modification Outstanding Recorded Investment		Number of Modifications		Pre- Modification Outstanding Recorded Investment		Post- Modification Outstanding Recorded Investment		Modifications		Investment		Investment		Modifications		Investment		Investment
Commercial real estate:
Land and construction		—	$	—	$	—		—	$	—	$	—		—	$	—	$	—		—	$	—	$	—
Improved Property		—		—		—		—		—		—		—		—		—		—		—		—

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

Commercial and industrial		—		—		—		—		—		—		1		44		40		1		9		9
Residential real estate		4		194		192		5		203		195		—		—		—		—		—		—
Home equity		2		187		185		—		—		—		1		199		156		1		20		20
Consumer		2		19		18		2		4		3		—		—		—		2		39		36

Total		8	$	400	$	395		7	$	207	$	198		2	$	243	$	196		4	$	68	$	65

⁽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.

⁽¹⁾

~~Excludes loans that were either paid off orcharged-off~~ ~~by period end. The~~

	New TDRs (1)
	For the Six Months Ended
	June 30, 2019						June 30, 2018
			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		44		40		1		10		9
Residential real estate		4		194		188		5		203		185
Home equity		3		386		340		1		20		20
Consumer		1		15		13		4		45		38
Total		9	$	639	$	581		11	$	278	$	252

The following table summarizes TDRs which defaulted (defined as past due 90 days) during the ~~three~~six months ended ~~March 31,~~June 30, 2019 and 2018, respectively, that were restructured within the last twelve months prior to ~~March 31,~~June 30, 2019 and 2018, respectively:

									Defaulted TDRs ⁽¹⁾
									For the Six Months Ended
									June 30, 2019				June 30, 2018
	Defaulted TDRs⁽¹⁾ For the Three Months Ended March 31, 2019				Defaulted TDRs⁽¹⁾ For the Three Months Ended March 31, 2018				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

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

Commercial and industrial		—		—		—		—		—		—		—		—
Residential real estate		1		58		1		122		1		97		1		121
Home equity		—		—		1		7		—		—		1		7
Consumer		—		—		—		—		1		13		—		—

Total		1	$	58		2	$	129		2	$	110		3	$	273

⁽¹⁾	~~Excludes loans that were eithercharged-off~~ ~~or cured by period end. The recorded investment is as of March 31,~~⁽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:


	March 31,		December 31,		June 30,		December 31,
*(unaudited, in thousands)*	2019		2018		2019		2018
Other real estate owned	$	5,915	$	7,173	$	4,891	$	7,173
Repossessed assets		86		92		82		92

Total other real estate owned and repossessed assets	$	6,001	$	7,265	$	4,973	$	7,265

Residential real estate included in other real estate owned at ~~March 31,~~June 30, 2019 and December 31, 2018 was ~~$1.6~~$1.2 million and $1.3 million, respectively. At ~~March 31,~~June 30, 2019 and December 31, 2018, formal foreclosure proceedings were in process on residential real estate loans totaling ~~$4.4~~$5.8 million and $6.0 million, respectively.

NOTE 6. LEASES

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 ASU2016-02 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- andten- year extensions, with a weighted-average lease term of 9 years. As of ~~March 31,~~June 30, 2019, operating lease ROU assets and liabilities were ~~$19.0~~$18.2 million and ~~$22.0~~$21.2 million, respectively. The lease expense for operating leases was ~~$0.6~~$0.7 million and $1.3 million for the three and six months ended ~~March 31, 2019.~~June 30, 2019, respectively. The weighted average discount rate was ~~3.28%~~3.29% as of ~~March 31,~~June 30, 2019.

Future minimum lease payments undernon-cancellable leases with initial or remaining lease terms in excess of one year at ~~March 31,~~June 30, 2019 are as follows (unaudited, in thousands):


Year	Amount			Amount
2020		912		$	755
2021		1,875			2,444
2022		2,105			1,713
2023		2,875			2,227
2024 and thereafter		18,032			17,686

Total lease payments	$	25,799		$	24,825

Less: Interest		(3,810	)		(3,621	)

Present value of lease liabilties	$	21,989

Present value of lease liabilities				$	21,204

NOTE 7. DERIVATIVES AND HEDGING ACTIVITIES

Risk Management Objective of Using Derivatives

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.

Loan Swaps

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 ~~March 31,~~June 30, 2019 and December 31, 2018, WesBanco had 4653 and 43, respectively, interest rate swaps with an aggregate notional amount of ~~$264.6~~$320.1 million and $229.8 million ~~respectively,~~ related to this program. During the ~~three~~six months ended ~~March 31,~~June 30, 2019 and 2018, WesBanco recognized net losses of ~~$0.3~~$1.1 million and net gains of $0.2 million, respectively, related to the changes in fair value of these swaps. Additionally, WesBanco recognized ~~$0.7~~$1.9 million and ~~$0.4~~$0.5 million of income for the related swap fees for the ~~three~~six months ended ~~March 31,~~June 30, 2019 and 2018, respectively.

Mortgage Loans Held for Sale and Loan Commitments

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.

Fair Values of Derivative Instruments on the Balance Sheet

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 is designated in a qualifying hedging 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 ~~March 31,~~June 30, 2019 and December 31, 2018:


	March 31, 2019						December 31, 2018						June 30, 2019						December 31, 2018
*(unaudited, in thousands)*	Notional or Contractual Amount		Asset Derivatives		Liability Derivatives		Notional or Contractual Amount		Asset Derivatives		Liability Derivatives		Notional or Contractual Amount		Asset Derivatives		Liability Derivatives		Notional or Contractual Amount		Asset Derivatives		Liability Derivatives
Derivatives
Loan Swaps:
Interest rate swaps	$	264,628	$	7,009	$	7,752	$	229,778	$	4,650	$	5,081	$	320,134	$	13,281	$	14,774	$	229,778	$	4,650	$	5,081
Other contracts:
Interest rate loan commitments		30,065		155		—		16,113		125		—		44,062		58		—		16,113		125		—
Forward TBA contracts		34,500		—		260		20,000		—		234		61,000		—		166		20,000		—		234

Total derivatives			$	7,164	$	8,012			$	4,775	$	5,315			$	13,339	$	14,940			$	4,775	$	5,315

Effect of Derivative Instruments on the Income Statement

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 ~~March 31,~~June 30, 2019 and 2018, respectively.

		For the Three Months Ended June 30,						For the Six Months Ended June 30,
(unaudited, in thousands)	Location of Gain/(Loss)	2019			2018			2019			2018
Interest rate swaps	Other income	$	(751	)	$	44		$	(1,063	)	$	211
Interest rate loan commitments	Mortgage banking income		(97	)		7			(67	)		143
Forward TBA contracts	Mortgage banking income		(518	)		(11	)		(852	)		399
Total		$	(1,366	)	$	40		$	(1,982	)	$	753

      For the Three Months Ended
March 31,
(unaudited, in thousands)

Location of Gain/(Loss)
   2019    2018
Interest rate swaps
   Other income    $ (312 )    $ 167
Interest rate loan commitments
   Mortgage banking income    30    136
Forward TBA contracts
   Mortgage banking income    (334 )    410




Total
      $ (616 )    $ 713

Credit-risk-related Contingent Features

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 ~~$11.8~~$21.3 million as of ~~March 31,~~June 30, 2019. If WesBanco had breached any of these provisions at ~~March 31,~~June 30, 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.

NOTE 8. PENSION & POSTRETIREMENT MEDICAL BENEFIT PLANS

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


	For the Three Months Ended March 31,						For the Three Months Ended June 30,						For the Six Months Ended June 30,
*(unaudited, in thousands)*	2019			2018			2019			2018			2019			2018
Service cost – benefits earned during year	$	554		$	699		$	560		$	707		$	1,114		$	1,406
Interest cost on projected benefit obligation		1,298			1,114			1,313			1,228			2,611			2,442
Expected return on plan assets		(2,187	)		(2,204	)		(2,211	)		(2,390	)		(4,398	)		(4,753	)
Amortization of prior service cost		7			6			6			7			13			13
Amortization of net loss		799			753			808			758			1,607			1,508

Net periodic pension cost	$	471		$	368		$	476		$	310		$	947		$	616

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 $4.8 million is due for 2019, which could be ~~all~~offset in whole or ~~partially offset~~in part by the Plan’s $52.5 million available credit balance. WesBanco ~~currently expects to make~~made a voluntary contribution of $3.0 million to the Plan in June 2019.

WesBanco assumed FFKT’s postretirement medical benefit plan, which ~~had a liability totaling $15.0 million at the acquisition date. The plan~~ covers FFKT employees who ~~were hired before January 1, 2016 and~~ meet ~~certain age and length of full-time~~the service requirements. The plan was modified in August 2018, which reduced the number of eligible employees. The modification resulted in a $5.5 million unrealized gain, which was recorded in Accumulated Other Comprehensive Income net of tax and will be recognized over the life of the plan participants, estimated to be approximately 17 years. Benefits provided under this plan are unfunded, and payments to the plan participants are made by WesBanco. The net periodic cost for the postretirement medical benefit plan totaled ~~$58~~$59 thousand and $117 thousand for the three and six months ended ~~March 31, 2019.~~June 30, 2019, respectively. The net periodic cost consisted of ~~$113~~$115 thousand and $228 thousand in interest cost on projected benefit obligation for the three and six months ended June 30, 2019, respectively, which was partially offset by a ~~$55~~$56 thousand and a $111 thousand benefit of prior service cost ~~amortization.~~amortization for the three and six months ended June 30, 2019, respectively.

NOTE 9. FAIR VALUE MEASUREMENT

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.

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.

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 ~~March 31,~~June 30, 2019 and December 31, 2018:

											June 30, 2019
											Fair Value Measurements Using:
			March 31, 2019 Fair Value Measurements Using:						June 30,		Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
*(unaudited, in thousands)*	March 31, 2019		Quoted Prices in Active Markets for Identical Assets (level 1)		Significant Other Observable Inputs (level 2)		Significant Unobservable Inputs (level 3)		2019		(level 1)		(level 2)		(level 3)
Recurring fair value measurements
Equity securities	$	11,978	$	11,978	$	—	$	—	$	11,817	$	11,817	$	—	$	—
Available-for-sale debt securities
U.S. Treasury		19,712		—		19,712		—		29,781		—		29,781		—
U.S. Government sponsored entities and agencies		139,290		—		139,290		—		134,587		—		134,587		—
Residential mortgage-backed securities and collateralized mortgage obligations of government agencies		1,582,784		—		1,582,784		—		1,563,042		—		1,563,042		—
Commercial mortgage-backed securities and collateralized mortgage obligations of government sponsored entities and agencies		177,005		—		177,005		—		178,656		—		178,656		—
Obligations of state and political subdivisions		186,067		—		184,484		1,583		183,178		—		181,576		1,602
Corporate debt securities		40,231		—		40,231		—		40,040		—		40,040		—

Totalavailable-for-sale debt securities	$	2,145,089	$	—	$	2,143,506	$	1,583	$	2,129,284	$	—	$	2,127,682	$	1,602
Loans held for sale		8,358		—		8,358		—		18,649		—		18,649		—
Other assets—interest rate derivatives agreements		7,009		—		7,009		—

Other assets - interest rate derivatives agreements										13,281		—		13,281		—
Total assets recurring fair value measurements	$	2,172,434	$	11,978	$	2,158,873	$	1,583	$	2,173,031	$	11,817	$	2,159,612	$	1,602

Other liabilities—interest rate derivatives agreements	$	7,752	$	—	$	7,752	$	—

Other liabilities - interest rate derivatives agreements									$	14,774	$	—	$	14,774	$	—
Total liabilities recurring fair value measurements	$	7,752	$	—	$	7,752	$	—	$	14,774	$	—	$	14,774	$	—

Nonrecurring fair value measurements
Impaired Loans									$	2,434		—		—	$	2,434
Other real estate owned and repossessed assets		6,001		—		—		6,001		4,973		—		—		4,973

Total nonrecurring fair value measurements	$	6,001	$	—	$	—	$	6,001	$	7,407	$	—	$	—	$	7,407

											December 31, 2018
											Fair Value Measurements Using:
			December 31, 2018 Fair Value Measurements Using:						December 31,		Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
*(in thousands)*	December 31, 2018		Quoted Prices in Active Markets for Identical Assets (level 1)		Significant Other Observable Inputs (level 2)		Significant Unobservable Inputs (level 3)		2018		(level 1)		(level 2)		(level 3)
Recurring fair value measurements
Equity securities	$	11,737	$	11,737	$	—	$	—	$	11,737	$	11,737	$	—	$	—
Available-for-sale debt securities
U.S. Treasury		19,878		—		19,878		—		19,878		—		19,878		—
U.S. Government sponsored entities and agencies		141,652		—		141,652		—		141,652		—		141,652		—
Residential mortgage-backed securities and collateralized mortgage obligations of government agencies		1,561,255		—		1,561,255		—		1,561,255		—		1,561,255		—
Commercial mortgage-backed securities and collateralized mortgage obligations of government sponsored entities and agencies		168,972		—		168,972		—		168,972		—		168,972		—
Obligations of state and political subdivisions		185,114		—		183,611		1,503		185,114		—		183,611		1,503
Corporate debt securities		37,258		—		37,258		—		37,258		—		37,258		—

Totalavailable-for-sale debt securities	$	2,114,129	$	—	$	2,112,626	$	1,503	$	2,114,129	$	—	$	2,112,626	$	1,503
Loans held for sale		8,994		—		8,994		—		8,994		—		8,994		—
Other assets—interest rate derivatives agreements		4,650		—		4,650		—

Other assets - interest rate derivatives agreements										4,650		—		4,650		—
Total assets recurring fair value measurements	$	2,139,510	$	11,737	$	2,126,270	$	1,503	$	2,139,510	$	11,737	$	2,126,270	$	1,503

Other liabilities—interest rate derivatives agreements	$	5,081	$	—	$	5,081	$	—

Other liabilities - interest rate derivatives agreements									$	5,081	$	—	$	5,081	$	—
Total liabilities recurring fair value measurements	$	5,081	$	—	$	5,081	$	—	$	5,081	$	—	$	5,081	$	—

Nonrecurring fair value measurements
Other real estate owned and repossessed assets		7,265		—		—		7,265		7,265		—		—		7,265

Total nonrecurring fair value measurements	$	7,265	$	—	$	—	$	7,265	$	7,265	$	—	$	—	$	7,265

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 ~~March 31,~~June 30, 2019 or for the year ended December 31, 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:

Quantitative Information about Level 3 Fair Value Measurements

Fair Value

Valuation

Unobservable

Range (Weighted

(unaudited, in thousands)

Fair Value
Estimate

Valuation Techniques

Unobservable
Input

Range (Weighted
Average)

Estimate

Techniques

Input

Average)

March 31, 2019

June 30, 2019

Impaired loans

2,434

Appraisal of collateral ⁽¹⁾

Appraisal adjustments ⁽²⁾

(30.5%)/((30.5%)

Liquidation expenses ⁽²⁾

(5.1%)/((5.1%)

Other real estate owned and repossessed assets

6,001

Appraisal of collateral ^(1), (2)

4,973

Appraisal of collateral ^{(1), (3)}

December 31, 2018:

December 31, 2018

Other real estate owned and repossessed assets

7,265

Appraisal of collateral ^(1), (2)

7,265

Appraisal of collateral ^{(1), (3)}

⁽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)

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 expense are presented as a percent of the appraisal.

(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 March 31, 2019						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)		Amount		Estimate		(level 1)		(level 2)		(level 3)
Financial Assets
Cash and due from banks	$	336,894	$	336,894	$	336,894	$	—	$	—	$	194,355	$	194,355	$	194,355	$	—	$	—
Equity securities		11,978		11,978		11,978		—		—		11,817		11,817		11,817		—		—
Available-for-sale debt securities		2,145,089		2,145,089		—		2,143,506		1,583		2,129,284		2,129,284		—		2,127,682		1,602
Held-to-maturity debt securities		936,484		948,641		—		948,077		564		900,605		921,534		—		920,989		545
Net loans		7,617,215		7,498,726		—		—		7,498,726		7,686,995		7,674,887		—		—		7,674,887
Loans held for sale		8,358		8,358		—		8,358		—		18,649		18,649		—		18,649		—
Other assets—interest rate derivatives		7,009		7,009		—		7,009		—
Other assets - interest rate derivatives												13,281		13,281		—		13,281		—
Accrued interest receivable		39,662		39,662		39,662		—		—		38,450		38,450		38,450		—		—

Financial Liabilities
Deposits		8,916,331		8,919,921		7,492,056		1,427,865		—		8,694,928		8,695,779		7,329,812		1,365,967		—
Federal Home Loan Bank borrowings		1,031,796		1,028,648		—		1,028,648		—		1,121,283		1,127,210		—		1,127,210		—
Other borrowings		301,547		301,915		298,322		3,593		—		296,148		296,574		293,205		3,369		—
Subordinated debt and junior subordinated debt		179,632		166,298		—		166,298		—		156,534		144,410		—		144,410		—
Other liabilities—interest rate derivatives		7,752		7,752		—		7,752		—
Other liabilities - interest rate derivatives												14,774		14,774		—		14,774		—
Accrued interest payable		6,030		6,030		6,030		—		—		6,559		6,559		6,559		—		—

															Fair Value Measurements at
															December 31, 2018
					Fair Value Measurements at December 31, 2018						Carrying		Fair Value		Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
*(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)		Amount		Estimate		(level 1)		(level 2)		(level 3)
Financial Assets
Cash and due from banks	$	169,186	$	169,186	$	169,186	$	—	$	—	$	169,186	$	169,186	$	169,186	$	—	$	—
Equity securities		11,737		11,737		11,737		—		—		11,737		11,737		11,737		—		—
Available-for-sale debt securities		2,114,129		2,114,129		—		2,112,626		1,503		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		1,020,934		1,020,743		—		1,020,195		548
Net loans		7,607,333		7,422,825		—		—		7,422,825		7,607,333		7,422,825		—		—		7,422,825
Loans held for sale		8,994		8,994		—		8,994		—		8,994		8,994		—		8,994		—
Other assets—interest rate derivatives		4,650		4,650		—		4,650		—
Other assets - interest rate derivatives												4,650		4,650		—		4,650		—
Accrued interest receivable		38,853		38,853		38,853		—		—		38,853		38,853		38,853		—		—

Financial Liabilities
Deposits		8,831,633		8,836,390		7,376,023		1,460,367		—		8,831,633		8,836,390		7,376,023		1,460,367		—
Federal Home Loan Bank borrowings		1,054,174		1,051,401		—		1,051,401		—		1,054,174		1,051,401		—		1,051,401		—
Other borrowings		290,522		290,854		288,918		1,936		—		290,522		290,854		288,918		1,936		—
Subordinated debt and junior subordinated debt		189,842		174,448		—		174,448		—		189,842		174,448		—		174,448		—
Other liabilities—interest rate derivatives		5,081		5,081		—		5,081		—
Other liabilities - interest rate derivatives												5,081		5,081		—		5,081		—
Accrued interest payable		4,627		4,627		4,627		—		—		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.

Held-to-maturity debt securities:Fair values for debt securitiesheld-to-maturity are determined in the same manner as 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 10. SHAREHOLDERS’ EQUITY~~

~~The activity in shareholders equity for the three months ended March 31, 2019 and 2018 is as follows:~~

~~WESBANCO, INC. CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY~~

For the Three Months Ended March 31, 2019 and 2018
   Common Stock    Accumulated
Other
Comprehensive
(Loss) Income Deferred
Benefits for
Directors Total
(unaudited, in thousands, except
shares and per share amounts)
   Shares
Outstanding Amount    Capital
Surplus Retained
Earnings Treasury
Stock
December 31, 2018
   54,598,134 $ 113,758    $ 1,166,701 $ 737,581 $ (274 ) $ (37,871 ) $ (1,068 ) $ 1,978,827
Net income
   —   —      —   40,337 —   —   —   40,337
Other comprehensive income
   —   —      —   —   —   19,773 —   19,773


Comprehensive income
   —   —      —   —   —   —   —   60,110
Common dividends declared
($0.31 per share)
   —   —      —   (16,916 ) —   —   —   (16,916 )
Treasury shares acquired
   (7 ) —      —   —   —   —   —   —
Stock options exercised
   1,000 —      (25 ) —   45 —   —   20
Stock compensation expense
   —   —      1,075 —   —   —   —   1,075
Deferred benefits for directors- net
   —   —      10 —   —   —   13 23




March 31, 2019
   54,599,127 $ 113,758    $ 1,167,761 $ 761,002 $ (229 ) $ (18,098 ) $ (1,055 ) $ 2,023,139




December 31, 2017
   44,043,244 $ 91,756    $ 684,730 $ 651,357 $ —   $ (31,495 ) $ (1,027 ) $ 1,395,321




Net income
   —   —      —   33,529 —   —   —   33,529
Other comprehensive loss
   —   —      —   —   —   (14,518 ) —   (14,518 )


Comprehensive income
   —   —      —   —   —   —   —   19,011
Common dividends declared
($0.29 per share)
   —   —      —   (12,775 ) —   —   —   (12,775 )
Adoption of accounting standard
ASU2016-01
   —   —      —   1,063 —   (1,063 ) —   —
Stock options exercised
   17,713 37    523 —   —   —   —   560
Stock compensation expense
   —   —      909 —   —   —   —   909
Deferred benefits for directors- net
   —   —      7 —   —   —   (7 ) —




March 31, 2018
   44,060,957 $ 91,793    $ 686,169 $ 673,174 $ —   $ (47,076 ) $ (1,034 ) $ 1,403,026

NOTE ~~11.~~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) and bank-owned life insurance are not in scope of ASC 606,Revenue from Contracts with Customers. For the revenue streams in scope of ASC ~~606—~~606 - trust fees, service charges on deposits, 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.

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 ~~March 31,~~June 30, 2019 and 2018, respectively:


	Point of Revenue Recognition		For the Three Months Ended March 31,				Point of Revenue	For the Three Months Ended June 30,				For the Six Months Ended June 30,
*(unaudited, in thousands)*	Point of Revenue Recognition		2019		2018		Recognition	2019		2018		2019		2018
Revenue Streams
Trust fees
Trust account fees		Over time	$	5,056	$	4,292	Over time	$	4,208	$	3,558	$	9,263	$	7,850
WesMark fees		Over time		2,059		2,211	Over time		2,131		2,194		4,191		4,405

Total trust fees				7,115		6,503			6,339		5,752		13,454		12,255
Service charges on deposits
Commercial banking fees		Over time		468		407	Over time		499		462		967		869
Personal service charges		At a point in time & over time		6,081		4,415	At a point in time & over time		5,698		4,684		11,780		9,100

Total service charges on deposits				6,549		4,822			6,197		5,146		12,747		9,969
Net securities brokerage revenue
Annuity commissions		At a point in time		1,362		1,200	At a point in time		1,454		1,310		2,815		2,510
Equity and debt security trades		At a point in time		102		102	At a point in time		103		87		206		189
Managed money		Over time		157		141	Over time		174		163		331		304
Trail commissions		Over time		239		227	Over time		242		249		481		476
Total net securities brokerage revenue									1,973		1,809		3,833		3,479

Total net securities brokerage revenue				1,860		1,670
Payment processing fees (1)		At a point in time & over time		648		—	At a point in time & over time		785		—		1,433		—
Electronic banking fees		At a point in time		5,892		4,829	At a point in time		7,154		5,728		13,046		10,558
Mortgage banking income		At a point in time		1,056		1,004	At a point in time		1,618		1,670		2,674		2,776
Gain/loss on sale of OREO/other assets		At a point in time		136		262

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.

~~(1)~~

~~Payment processing fees are included in othernon-interest~~ ~~income.~~

NOTE ~~12.~~11. COMPREHENSIVE INCOME/(LOSS)

The activity in accumulated other comprehensive income for the ~~three~~six months ended ~~March 31,~~June 30, 2019 and 2018 is as follows:


	Accumulated Other Comprehensive Income/(Loss)⁽¹⁾												Accumulated Other Comprehensive Income/(Loss)⁽¹⁾
*(unaudited, in thousands)*	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			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, 2018	$	(16,542	)	$	(21,522	)	$	193		$	(37,871	)	$	(16,542	)	$	(21,522	)	$	193		$	(37,871	)

Other comprehensive income before reclassifications		—			19,302			—			19,302			—			40,996			—			40,996
Amounts reclassified from accumulated other comprehensive income		543			(33	)		(39	)		471			1,129			(30	)		(111	)		988

Period change		543			19,269			(39	)		19,773			1,129			40,966			(111	)		41,984

Balance at March 31, 2019	$	(15,999	)	$	(2,253	)	$	154		$	(18,098	)
Balance at June 30, 2019													$	(15,413	)	$	19,444		$	82		$	4,113

Balance at December 31, 2017	$	(18,626	)	$	(13,250	)	$	381		$	(31,495	)	$	(18,626	)	$	(13,250	)	$	381		$	(31,495	)

Other comprehensive income before reclassifications		—			(14,905	)		—			(14,905	)		—			(21,720	)		—			(21,720	)
Amounts reclassified from accumulated other comprehensive income		437			—			(50	)		387			1,026			—			(100	)		926

Period change		437			(14,905	)		(50	)		(14,518	)		1,026			(21,720	)		(100	)		(20,794	)
Adoption of Accounting Standard ASU2016-01		—			(1,063	)		—			(1,063	)		—			(1,063	)		—			(1,063	)

Balance at March 31, 2018	$	(18,189	)	$	(29,218	)	$	331		$	(47,076	)

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%.~~

The following table provides details about amounts reclassified from accumulated other comprehensive income for the three and six months ended ~~March 31,~~June 30, 2019 and ~~2018:~~2018, respectively:


Details about Accumulated Other Comprehensive Income/(Loss) Components	Amounts Reclassified from Accumulated Other Comprehensive Income/(Loss) For the Three Months Ended March 31,						Affected Line Item in the Statement of Net Income	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)*	2019			2018				2019			2018			2019			2018
Debt securitiesavailable-for-sale⁽¹⁾:
Net securities gains reclassified into earnings	$	(43	)	$	—		Net securities gains(Non-interest income)
Related income tax expense		10			—		Provision for income taxes

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		(33	)		—				3			—			(30	)		—

Debt securitiesheld-to-maturity⁽¹⁾:
Amortization of unrealized gain transferred fromavailable-for-sale		(55	)		(66	)	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		16			16		Provision for income taxes		21			15			38			31		Provision for income taxes

Net effect on accumulated other comprehensive income for the period		(39	)		(50	)			(73	)		(51	)		(111	)		(100	)

Defined benefit plans⁽²⁾:
Amortization of net loss and prior service costs		750			756		Employee benefits(Non-interest expense)		758			764			1,509			1,520		Employee benefits (Non-interest expense)
Related income tax benefit		(207	)		(319	)	Provision for income taxes		(173	)		(175	)		(380	)		(494	)	Provision for income taxes

Net effect on accumulated other comprehensive income for the period		543			437				585			589			1,129			1,026

Total reclassifications for the period	$	471		$	387			$	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)⁽²⁾

~~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 8, “Pension & Postretirement Medical Benefit Plans” for additional detail.

NOTE ~~13.~~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 ~~$2.0~~$1.8 million and $0.7 million as of ~~March 31,~~June 30, 2019 and December 31, 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 ~~March 31,~~June 30, 2019 and December 31, 2018.

Contingent obligations to purchase loans funded by other entities include affordable housing plan guarantees, credit card guarantees, loans sold with recourse as well as obligations to the 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 following table presents total commitments to extend credit, guarantees and various letters of credit outstanding:


	March 31,		December 31,		June 30,		December 31,
*(unaudited, in thousands)*	2019		2018		2019		2018
Lines of credit	$	1,919,110	$	1,894,030	$	1,909,282	$	1,894,030
Loans approved but not closed		333,186		258,778		299,081		258,778
Overdraft limits		153,469		153,572		152,207		153,572
Letters of credit		43,587		42,841		45,960		42,841
Contingent obligations and other guarantees		50,159		61,509		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 ~~14.~~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 $4.5 billion and $4.0 billion at ~~March 31,~~June 30, 2019 and 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
							Community		Investment
(unaudited, in thousands)	Community Banking		Trust and Investment Services		Consolidated		Banking		Services		Consolidated
For the Three Months ended March 31, 2019:
For The Three Months Ended June 30, 2019
Interest and dividend income	$	119,053	$	—	$	119,053	$	119,543	$	—	$	119,543
Interest expense		20,692		—		20,692		21,083		—		21,083

Net interest income		98,361		—		98,361		98,460		—		98,460
Provision for credit losses		2,507		—		2,507		2,747		—		2,747

Net interest income after provision for credit losses		95,854		—		95,854		95,713		—		95,713
Non-interest income		20,658		7,115		27,773		24,817		6,339		31,156
Non-interest expense		70,275		4,157		74,432		67,957		3,995		71,952

Income before provision for income taxes		46,237		2,958		49,195		52,573		2,344		54,917
Provision for income taxes		8,237		621		8,858		9,611		492		10,103

Net income	$	38,000	$	2,337	$	40,337	$	42,962	$	1,852	$	44,814

For the Three Months ended March 31, 2018:
For The Three Months Ended June 30, 2018
Interest and dividend income	$	86,417	$	—	$	86,417	$	98,888	$	—	$	98,888
Interest expense		13,125		—		13,125		16,541		—		16,541

Net interest income		73,292		—		73,292		82,347		—		82,347
Provision for credit losses		2,168		—		2,168		1,708		—		1,708

Net interest income after provision for credit losses		71,124		—		71,124		80,639		—		80,639
Non-interest income		17,477		6,503		23,980		17,656		5,752		23,408
Non-interest expense		50,894		3,677		54,571		60,026		3,517		63,543

Income before provision for income taxes		37,707		2,826		40,533		38,269		2,235		40,504
Provision for income taxes		6,411		593		7,004		6,865		470		7,335

Net income	$	31,296	$	2,233	$	33,529	$	31,404	$	1,765	$	33,169

For the Six Months Ended June 30, 2019
Interest and dividend income							$	238,596	$	—	$	238,596
Interest expense								41,774		—		41,774
Net interest income								196,822		—		196,822
Provision for credit losses								5,254		—		5,254
Net interest income after provision for credit losses								191,568		—		191,568
Non-interest income								45,475		13,454		58,929
Non-interest expense								138,233		8,152		146,385
Income before provision for income taxes								98,810		5,302		104,112
Provision for income taxes								17,848		1,113		18,961
Net income							$	80,962	$	4,189	$	85,151

For the Six Months Ended June 30, 2018
Interest and dividend income							$	185,203	$	—	$	185,203
Interest expense								29,667		—		29,667
Net interest income								155,536		—		155,536
Provision for credit losses								3,876		—		3,876
Net interest income after provision for credit losses								151,660		—		151,660
Non-interest income								35,236		12,255		47,491
Non-interest expense								110,920		7,194		118,114
Income before provision for income taxes								75,976		5,061		81,037
Provision for income taxes								13,276		1,063		14,339
Net income							$	62,700	$	3,998	$	66,698

Totalnon-fiduciary assets of the trust and investment services segment were ~~$4.1~~$3.9 million (including ~~$2.4~~$2.6 million of trust customer intangibles) and ~~$1.8~~$1.7 million at ~~March 31,~~June 30, 2019 and 2018, respectively. All other assets, including goodwill and the remainder of other intangible assets, were allocated to the 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 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 ~~March 31,~~June 30, 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, 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 under “Risk Factors” in Part I, Item 1A of ~~this~~WesBanco’s Annual Report on Form10-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 and Old Line may not be integrated successfully or such integration may take longer to accomplish than excepted; the expected cost savings and any revenue synergies from the merger of WesBanco and Old Line may not be fully realized within the expected timeframes; disruption from the merger of WesBanco and 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, 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; 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 ~~203~~199 branches and ~~196~~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.

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 ~~March 31,~~June 30, 2019 have remained unchanged from the disclosures presented in WesBanco’s Annual Report on Form10-K for the year ended December 31, 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 ~~March 31,~~June 30, 2019 was ~~$40.3~~$44.8 million, with diluted earnings per share of ~~$0.74,~~$0.82, compared to ~~$33.5~~$33.2 million and ~~$0.76~~$0.71 per diluted share, respectively, for the ~~first~~second quarter of 2018. Net income for the six months ended June 30, 2019 was $85.2 million, with diluted earnings per share of $1.56, compared to $66.7 million and $1.47 per diluted share, respectively for the six months ended June 30, 2018. Excludingafter-tax merger-related expenses~~(non-GAAP~~ (non-GAAP measure) in both periods, net income and diluted earnings per share would have increased ~~26.9%~~19.9% to ~~$42.8~~$44.9 million, or ~~$0.78~~$0.82 per diluted share for the three months ended ~~March 31,~~June 30, 2019, as compared to the prior year ~~quarter.~~quarter; and net income for the six months ended June 30, 2019 increased 23.2% year-over-year to $87.7 million, or $1.60 per diluted share versus $1.57 per diluted share in the prior year period.


	*For the Three Months Ended March 31,*											For The Three Months Ended June 30,											For the Six Months Ended June 30,
	*2019*						*2018*					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(Non-GAAP)⁽¹⁾	$	42,791		$	0.78		$	33,722		$	0.76	$	44,878		$	0.82	$	37,445		$	0.80		$	87,670		$	1.60		$	71,167		$	1.57
Less: After tax merger-related expenses		(2,454	)		(0.04	)		(193	)		—		(64	)		—		(4,276	)		(0.09	)		(2,519	)		(0.04	)		(4,469	)		(0.10	)

Net income (GAAP)	$	40,337		$	0.74		$	33,529		$	0.76	$	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 ~~$25.1~~$16.1 million or ~~34.2%~~19.6% in the ~~first~~second quarter of 2019 compared to the same quarter of 2018 due to ~~a 23.0%~~an 11.5% increase in average earning assets. In addition, the yield on earning assets has increased a total of 4734 basis points since the ~~first~~second quarter of 2018 while there was somewhat of an offset by a 2617 basis points increase in the cost of interest bearing liabilities, producing an increase in the net spread on earning assets of 2117 basis points year-over-year. The net interest margin increased by 3024 basis points to ~~3.68%~~3.67% in the ~~first~~second quarter of 2019 compared to ~~3.38%~~3.43% in the ~~first~~second quarter of 2018. The net interest margin benefited from increases in the Federal Reserve Board’s target federal funds rate ~~over the past year~~during 2018 as well as an increase innon-interest bearing demand deposits. The increase in the cost of interest bearing liabilities is primarily due to higher rates for interest bearing public funds, higher certificates of deposit costs and certain Federal Home Loan Bank and other borrowings. Accretion from prior acquisitions benefited the ~~first~~second quarter net interest margin by approximately 1918 basis points, as compared to ~~six~~12 basis points in the prior year period.

The provision for credit losses increased to ~~$2.5~~$2.7 million in the ~~first~~second quarter of 2019, compared to ~~$2.2~~$1.7 million in the ~~first~~second quarter of 2018. The increased provision is due primarily to a ~~$40.7~~$40.8 million increase in criticized and classified loans as of ~~March 31,~~June 30, 2019 as compared to ~~March 31, 2018. The increase was primarily the result of WesBanco’s~~June 30, 2018, reflecting our normal loan grade review process post-acquisition of FFKT, as well as two larger downgraded relationships in the legacy loan ~~portfolio.~~portfolio, as reported last quarter. Net charge-offs, as a percentage of average portfolio loans was ~~0.07%~~0.05% and 0.03% for ~~both the first~~second quarter of 2019 and ~~2018.~~2018, respectively.

For the ~~first~~second quarter of 2019,non-interest income increased ~~$3.8~~$7.7 million or ~~15.8%~~33.1% compared to the ~~first~~second quarter of ~~2018. Service~~2018 driven by net securities gains, electronic banking fees, service charges on deposit and payment processing fees. Net securities gains increased $2.6 million due to the sale of WesBanco’s Visa Class B shares. Electronic banking fees increased $1.4 million or 24.9%, service charges on deposits increased ~~$1.7 million or 35.8%, electronic banking fees increased~~ $1.1 million or ~~22.0%~~20.4%, payment processing fees increased ~~$0.6~~$0.8 million or 100% and trust fees increased $0.6 million or ~~9.4%~~10.2% for the ~~first~~second quarter of 2019 compared to the ~~first~~second quarter of 2018. Payment processing fees are from a business acquired from FFKT, which provides bill payment and electronic funds transfer services for its customers. ~~Bank owned-life insurance decreased $1.4~~Non-interest income increased $11.4 million or ~~52.1%, due to higher death benefits received during~~24.1% for the ~~first quarter of 2018~~six months ended June 30, 2019 as compared to the ~~first quarter of 2019.~~six months ended June 30, 2018.

Non-interest expense in the ~~first~~second quarter of 2019 ~~grew~~increased by ~~$19.9~~$8.4 million or ~~36.4%~~13.2%, compared to the second quarter of 2018, ~~first quarter,~~ which is primarily due to the FTSB and FFKT acquisitions. Salaries and wages increased ~~$5.9~~$4.8 million or ~~23.7%~~17.8% and employee benefit expense increased ~~$3.0~~$1.7 million or ~~44.5%~~21.8% compared to last year’s ~~first~~second quarter as full-time equivalent personnel increased ~~20.1%~~15.3% due in part to the FTSB and FFKT acquisitions as well as additions to key revenue-producing positions throughout the markets. For the ~~first~~second quarter of 2019, merger-related expenses were ~~$3.1~~$0.1 million related to the FFKT ~~merger.~~merger as compared to $5.4 million for the second quarter of 2018 related to the FTSB and FFKT mergers.

During the ~~first~~second quarter, the effective tax rate was ~~18.01%~~18.40% as compared to ~~17.28%~~18.11% last year, while the provision for income taxes increased ~~$1.9~~$2.8 million to ~~$8.9~~$10.1 million due to higher year-over-yearpre-tax income.

NET INTEREST INCOME

TABLE 1. NET INTEREST INCOME


	For the Three Months Ended
	March 31,						For the Three Months Ended June 30,						For the Six Months Ended June 30,
*(unaudited, dollars in thousands)*	2019			2018			2019			2018			2019			2018
Net interest income	$	98,361		$	73,292		$	98,460		$	82,347		$	196,822		$	155,536
Taxable equivalent adjustment to net interest income		1,473			1,285			1,367			1,344			2,840			2,629

Net interest income, fully taxable equivalent	$	99,834		$	74,577		$	99,827		$	83,691		$	199,662		$	158,165

Net interest spread,non-taxable equivalent		3.34	%		3.12	%		3.32	%		3.15	%		3.33	%		3.13	%
Benefit of netnon-interest bearing liabilities		0.29	%		0.20	%		0.30	%		0.23	%		0.30	%		0.22	%

Net interest margin		3.63	%		3.32	%		3.62	%		3.38	%		3.63	%		3.35	%
Taxable equivalent adjustment		0.05	%		0.06	%		0.05	%		0.05	%		0.05	%		0.06	%

Net interest margin, fully taxable equivalent		3.68	%		3.38	%		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, primarily deposits and short and long-term 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 ~~$25.1~~$16.1 million or ~~34.2%~~19.6% in the second quarter of 2019 compared to the second quarter of 2018, due to ~~a 23.0%~~an 11.5% increase in average earning asset balances, primarily driven by the ~~acquisitions~~acquisition of ~~FTSB and~~ FFKT and related net asset accretion from purchase accounting. For the first six months of 2019, net interest income increased $41.3 million or 26.5% for the same reasons along with the acquisition of FTSB. Average loan balances increased by ~~20.8%~~13.5% in the ~~first~~second quarter of 2019 from the ~~acquisitions~~acquisition of ~~FTSB and~~ FFKT compared to the ~~first~~second quarter of ~~2018, as organic~~2018. Organic loan growth decreased ~~1.3%~~1.1% from last year due to lower home equity loan balances due to a lower demand as a result of higher interest rates and tax changes, elevated levels of commercial real estate loans moving to the secondary 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 ~~first~~second quarter of 2019 by ~~$1.7~~$1.1 billion or ~~23.9%~~14.5% compared to the ~~first~~second quarter of 2018, due specifically to the deposits acquired from ~~FTSB and~~ FFKT. The net interest margin increased by 3024 basis points to ~~3.68%~~3.67% in the ~~first~~second quarter of 2019 from the same ~~period~~quarter of 2018. The margin benefited from ~~the effect of four~~ increases in the Federal Reserve’s target federal funds rate during 2018 and higher margins on the acquired FFKT assets, partially offset by higher funding costs and ~~control~~a flattening of ~~deposit cost increases.~~the yield curve in 2019. Yields increased for all ~~significant~~ earning asset categories in 2019. The cost of interest bearing liabilities increased by 2617 basis points from the ~~first~~second quarter of ~~2019~~2018 to the ~~first~~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 certificates of deposit, customer repurchase agreements, short to medium-term Federal Home Loan Bank borrowings and junior subordinated debentures. Approximately 1918 basis points of accretion from ~~the FTSB,~~ FFKT and other prior acquisitions was included in the ~~first~~second quarter 2019 net interest margin compared to 612 basis points in the 2018 ~~first~~second quarter net interest margin.

Interest income increased ~~$32.6~~$20.7 million or ~~37.8%~~20.9% in the second quarter of 2019 and $53.4 million or 28.8% in the first ~~quarter~~half of 2019 compared to the ~~first quarter~~same periods of 2018 due to higher overall earning assets, particularly from the FTSB and FFKT acquisitions, and higher yields in every ~~significant~~ earning asset category. Earning asset yields were influenced positively in the ~~first~~second quarter of 2019 compared to the ~~first~~second quarter of 2018 due to ~~four~~ federal funds rate increases occurring through the second half of 2018. Average loan balances increased by ~~$1.3 billion~~$914.8 million or ~~20.8%~~13.5% in the ~~first~~second quarter of 2019 compared to the ~~first~~second quarter of 2018, due to the ~~acquisitions~~acquisition of ~~FTSB and~~ FFKT. Loan yields increased by 6338 basis points during this same period to ~~5.06%~~5.02% from the previously mentioned federal funds rate increases and accretion from purchase accounting from the ~~FTSB and~~ FFKT ~~acquisitions.~~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 ~~first~~second quarter of 2019, average loans represented ~~69.9%~~70.6% of average earning assets, ~~a decrease~~an increase from ~~71.2% in 2018, primarily due to purchases of investment securities throughout 2018 and from those assumed~~69.4% in the ~~FTSB and FFKT acquisitions exceeding average total loan growth on a percentage basis.~~second quarter of 2018. Average taxable securities balances increased by ~~$564.5~~$207.7 million or ~~31.5%~~9.8% from the ~~first~~second quarter of 2018, ~~consistent with management’s strategy of growing total assets above $10 billion~~primarily due to the securities acquired in the ~~first quarter of 2018. Total~~FFKT acquisition. Taxable securities yields increased by 1815 basis points and tax-exempt securities yields increased by 10 basis points in the ~~first~~second quarter of 2019 from the ~~first~~second quarter of 2018 due to higher market rates on all securities acquired and purchased ~~in mid to late 2018 and into~~over the ~~first quarter of 2019, as taxable securities yields increased by 26 basis points andtax-exempt~~ ~~securities yields increased by 5 basis points. Slightly mitigating the yield increase in investment securities, the~~last four quarters. The average balance oftax-exempt securities, which have the highest yields within securities, decreased to ~~25.6%~~24.1% of total average securities in the ~~first~~second quarter of 2019 compared to ~~28.6%~~26.1% in the ~~first~~second quarter of 2018, mostly due to the ~~previously mentioned purchases of taxable securities and the~~ sale of lower-yieldingtax-exempt municipal securities late in the first ~~quarter.~~quarter of 2019.

Total portfolio loans increased ~~$1.3 billion~~$945.0 million or ~~21.3%~~13.9% over the last twelve months, while total commercial loans increased ~~$1.0 billion~~$694.4 million or ~~23.8%~~15.5%. Loan growth was achieved through ~~$2.3~~$2.5 billion in total loan originations, led by ~~$1.4~~$1.6 billion in business loan originations for the past twelve months. Loan growth was driven by the ~~acquisitions~~acquisition of ~~FTSB and~~ 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 commercial real estate mortgages.

Interest expense increased ~~$7.6~~$4.5 million or ~~57.7%~~27.5% in the ~~first~~second quarter of 2019 and $12.1 million or 40.8% for the six months ended June 30, 2019 as compared to the ~~first quarter of~~same periods in 2018, due primarily to increases in the balances of interest bearing liabilities from the 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 2617 basis points from the ~~first~~second quarter of 2018 to ~~1.06%~~1.08% in 2019. Average interest bearing deposits increased by ~~$1.2 billion~~$662.1 million or ~~22.0%~~11.7% from the ~~first~~second quarter of 2018, due to the ~~acquisitions~~acquisition of ~~FTSB and~~ FFKT. The rate on interest bearing deposits increased by 1817 basis points from the ~~first~~second quarter of 2018, primarily from increases in rates on interest bearing public funds and for certain larger balance customers. Averagenon-interest

bearing demand ~~deposits~~deposit balances increased from the ~~first~~second quarter of 2018 to the ~~first~~second quarter of 2019 by ~~$550.8~~$456.1 million or ~~29.5%~~22.5% and were ~~27.5%~~28.2% of total average deposits at ~~March 31,~~June 30, 2019, compared to ~~26.3%~~26.4% at ~~March 31,~~June 30, 2018, reflecting the ~~acquisitions’~~acquired FFKT non-interest bearing demand deposits and ongoing checking account marketing strategies. Organic averagenon-interest bearing demand deposits increased by ~~$92.9~~$104.0 million or ~~4.8%~~5.1% during this same time period. The increase innon-interest bearing deposits reflects positively on the net interest margin, as the benefit ofnon-interest bearing liabilities increased by ~~nine~~seven basis points from the ~~first~~second quarter of 2018 to 2019. The average balance of FHLB borrowings ~~increased~~decreased by ~~only $15.6~~$172.9 million from the ~~first~~second quarter of 2018 to 2019; however, the average rate paid increased by 6848 basis points to ~~2.44%~~2.50% over this same time period due to higher interest rates on new borrowings and the ~~replacement~~maturity of some legacy lower-rate borrowings ~~with those of current higher rates throughout 2018 and~~in the first ~~quarter~~half of 2019. Average other borrowings and junior subordinated debt balances increased by ~~$148.2~~$39.2 million or ~~40.1%~~8.8% from the ~~first~~second quarter of 2018 to 2019 due to the ~~acquisitions~~acquisition of ~~FTSB and~~ FFKT, and their average rates paid increased by 8243 and 6238 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. However, the increase was partially offset by a decrease in junior subordinated debt securities average balance due to a payoff of $9.2 million in the third quarter of 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 March 31,										2019					2018					2019					2018
	2019					2018					Average		Average			Average		Average			Average		Average			Average		Average
*(unaudited, dollars in thousands)*	Average Balance		Average Rate			Average Balance		Average Rate			Balance		Rate			Balance		Rate			Balance		Rate			Balance		Rate
ASSETS
Due from banks—interest bearing	$	76,731		1.70	%	$	8,727		2.06	%
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⁾		7,659,542		5.06	%		6,339,550		4.43	%		7,700,355		5.02	%		6,785,550		4.64	%		7,680,062		5.04	%		6,563,782		4.54	%
Securities:⁽²⁾
Taxable		2,353,856		2.84	%		1,789,336		2.58	%		2,336,099		2.82	%		2,128,446		2.67	%		2,344,929		2.83	%		1,959,828		2.63	%
Tax-exempt⁽³⁾		810,702		3.46	%		717,624		3.41	%		741,371		3.51	%		750,138		3.41	%		775,845		3.49	%		733,970		3.41	%

Total securities		3,164,558		3.00	%		2,506,960		2.82	%		3,077,470		2.98	%		2,878,584		3.05	%		3,120,774		2.99	%		2,693,798		2.84	%
Other earning assets		52,114		7.30	%		50,388		6.02	%		50,555		7.26	%		57,259		5.72	%		51,330		7.28	%		53,843		5.86	%

Total earning assets⁽³⁾		10,952,945		4.45	%		8,905,625		3.98	%		10,900,943		4.45	%		9,775,289		4.11	%		10,926,940		4.45	%		9,342,859		4.05	%

Other assets		1,557,087					1,087,739					1,588,720					1,143,442					1,572,988					1,115,743

Total Assets	$	12,510,032				$	9,993,364				$	12,489,663				$	10,918,731				$	12,499,928				$	10,458,602

LIABILITIES AND SHAREHOLDERS’ EQUITY
LIABILITIES AND SHAREHOLDERS' EQUITY
Interest bearing demand deposits	$	2,129,601		0.75	%	$	1,697,755		0.60	%	$	2,139,372		0.81	%	$	1,849,035		0.68	%	$	2,134,514		0.78	%	$	1,773,813		0.64	%
Money market accounts		1,154,563		0.67	%		1,005,236		0.35	%		1,116,124		0.72	%		1,035,567		0.42	%		1,135,237		0.69	%		1,020,486		0.39	%
Savings deposits		1,659,751		0.13	%		1,288,120		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		1,438,468		1.10	%		1,241,228		0.83	%		1,397,167		1.18	%		1,415,259		0.84	%		1,417,703		1.14	%		1,328,724		0.84	%

Total interest bearing deposits		6,382,383		0.65	%		5,232,339		0.47	%		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		1,053,014		2.44	%		1,037,441		1.76	%		1,008,027		2.50	%		1,180,939		2.02	%		1,030,396		2.47	%		1,109,586		1.90	%
Other borrowings		327,839		1.92	%		204,833		1.10	%		320,269		1.86	%		272,208		1.43	%		324,033		1.89	%		238,707		1.29	%
Subordinated debt and junior subordinated debt		189,524		5.41	%		164,334		4.79	%		164,108		5.41	%		172,972		5.03	%		176,746		5.41	%		168,677		4.91	%

Total interest bearing liabilities⁽¹⁾		7,952,760		1.06	%		6,638,947		0.80	%		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		2,420,462					1,869,624					2,486,710					2,030,649					2,453,770					1,950,581
Other liabilities		134,100					83,522					131,219					77,873					132,657					80,681
Shareholders’ equity		2,002,710					1,401,271					2,050,190					1,517,036					2,026,712					1,459,472

Total Liabilities and Shareholders’ Equity	$	12,510,032				$	9,993,364				$	12,489,663				$	10,918,731				$	12,499,928				$	10,458,602

Taxable equivalent net interest spread				3.39	%				3.18	%				3.37	%				3.20	%				3.38	%				3.19	%
Taxable equivalent net interest margin				3.68	%				3.38	%				3.67	%				3.43	%				3.68	%				3.41	%

~~(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 on loans totaled $0.6 million for both the three months ended March 31,~~⁽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. Additionally, loan accretion included in net interest income on loans acquired from acquisitions was $4.9 million and $1.2 million for the three months ended March 31, 2019 and 2018, respectively, while accretion on interest bearing liabilities from acquisitions was $0.4 million and $0.2 million for the three months ended March 31, 2019 and 2018, respectively.

~~(2)~~

~~Average yields onavailable-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 each period presented.~~

⁽²⁾ Average yields on available-for-sale debt securities are calculated based on amortized cost.

⁽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

								For The Three Months Ended June 30, 2019							For the Six Months Ended June 30, 2019
	Three Months Ended March 31, 2019 Compared to March 31, 2018							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)
Increase (decrease) in interest income:
Due from banks—interest bearing	$	520	$	(238	)	$	282
Due from banks - interest bearing								$	120		$	224	$	344	$	537		$	88	$	625
Loans, net of unearned income		15,631		10,634			26,265		11,127			6,750		17,877		26,798			17,448		44,246
Taxable securities		3,922		1,268			5,190		1,434			816		2,250		5,338			2,099		7,437
Tax-exempt securities⁽¹⁾		804		91			895		(73	)		183		110		726			279		1,005
Other earning assets		26		166			192		(76	)		173		97		(69	)		360		291

Total interest income change⁽¹⁾		20,903		11,921			32,824		12,532			8,146		20,678		33,330			20,274		53,604

Increase (decrease) in interest expense:
Interest bearing demand deposits		722		700			1,422		536			628		1,164		1,273			1,313		2,586
Money market accounts		147		874			1,021		91			825		916		244			1,692		1,936
Savings deposits		67		266			333		61			390		451		129			655		784
Certificates of deposit		446		921			1,367		(38	)		1,159		1,121		390			2,098		2,488
Federal Home Loan Bank borrowings		68		1,771			1,839		(538	)		872		334		(676	)		2,849		2,173
Other borrowings		446		552			998		191			319		510		658			849		1,507
Subordinated debt and junior subordinated debt		319		268			587		(94	)		140		46		203			430		633

Total interest expense change		2,215		5,352			7,567		209			4,333		4,542		2,221			9,886		12,107

Net interest income increase (decrease)⁽¹⁾	$	18,688	$	6,569		$	25,257	$	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%.~~

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 losses incurred 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 losses incurred on unfunded commitments. The provision for credit losses increased to ~~$2.5~~$2.7 million in the ~~first~~second quarter of 2019 compared to ~~$2.2~~$1.7 million in the ~~first~~second quarter of 2018 due primarily to the increase in the provision for ~~loan commitments.~~Commercial Real Estate – Improved Property. Non-performing loans (including TDRs), andnon-performing assets both improved as a percentage of total portfolio loans from ~~March 31,~~June 30, 2018. ~~Totalnon-performing~~Non-performing loans were ~~0.47%~~0.50% of total loans ~~at March 31,~~as of June 30, 2019, decreasing from ~~0.62%~~0.57% of total loans at the end of the ~~first~~second quarter of 2018.Non-performing assets were ~~0.54%~~0.56% of total loans and other real estate and repossessed assets ~~at March 31,~~as of June 30, 2019, decreasing from ~~0.68%~~0.63% at the end of the ~~first~~second quarter of 2018. Criticized and classified loans were ~~1.42%~~1.48% of total loans, increasing from 1.08% ~~at March 31,~~as of June 30, 2018. Past due loans at ~~March 31,~~June 30, 2019 and 2018 were ~~0.32%~~0.23% of total ~~loans, compared to 0.25% at March 31, 2018.~~loans. Annualized net loan charge-offs ~~remained flat at 0.07% at March 31,~~increased slightly to 0.05% as of June 30, 2019 ~~and~~compared to 0.03% as 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 March 31,											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			2019		2018		$ Change			% Change
Trust fees	$	7,115	$	6,503		$	612			9.4		$	6,339	$	5,752	$	587			10.2		$	13,454	$	12,255	$	1,199			9.8
Service charges on deposits		6,549		4,822			1,727			35.8			6,197		5,146		1,051			20.4			12,747		9,969		2,778			27.9
Electronic banking fees		5,892		4,829			1,063			22.0			7,154		5,728		1,426			24.9			13,046		10,558		2,488			23.6
Net securities brokerage revenue		1,860		1,670			190			11.4			1,973		1,809		164			9.1			3,833		3,479		354			10.2
Bank-owned life insurance		1,319		2,756			(1,437	)		(52.1	)		1,340		1,128		212			18.8			2,659		3,884		(1,225	)		(31.5	)
Mortgage banking income		1,056		1,004			52			5.2			1,618		1,670		(52	)		(3.1	)		2,674		2,776		(102	)		(3.7	)
Payment processing fees		648		—			648			100.0			785		—		785			100.0			1,433		—		1,433			100.0
Net securities gains (losses)		657		(39	)		696			1,784.6			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		136		262			(126	)		(48.1	)		376		229		147			64.2			512		491		21			4.3
Net insurance services revenue		908		892			16			1.8			786		711		75			10.5			1,695		1,602		93			5.8
Swap fee and valuation income		369		517			(148	)		(28.6	)		511		178		333			187.1			880		695		185			26.6
Other		1,264		764			500			65.4			1,168		699		469			67.1			2,430		1,463		967			66.1

Totalnon-interest income	$	27,773	$	23,980		$	3,793			15.8		$	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 ~~first~~second quarter of 2019,non-interest income increased ~~$3.8~~$7.7 million or ~~15.8%~~33.1% compared to the ~~first~~second quarter of 2018 primarily due to the ~~acquisitions~~acquisition of ~~FTSB~~FFKT and ~~FFKT.~~securities gains. The increase is driven by a ~~$1.7~~$2.6 million increase in net securities gains, a $1.4 million increase in electronic banking fees, a $1.1 million increase in service charges on deposits, and a ~~$1.1 million increase in electronic banking fees, a $0.7 million increase in net securities gains, a $0.6~~$0.8 million increase in payment processing ~~fees and a $0.6~~fees. For the six months ended June 30, 2019, non-interest income increased $11.4 million ~~increase in trust fees, which was partially offset by $1.4 million decreases in bank-owned life insurance compared to~~or 24.1% from the first ~~quarter~~six months of ~~2018.~~2018 for similar reasons for the three months ended.

Trust fees increased $0.6 million or ~~9.4%~~10.2% compared to the ~~first~~second quarter of ~~2018~~2019 due to the acquisition of FFKT as well as market improvements and customer and revenue development initiatives. Total trust assets have increased $0.5 billion from $4.0 billion at ~~March 31,~~June 30, 2018 to $4.5 billion at ~~March 31,~~June 30, 2019. At ~~March 31,~~June 30, 2019, trust assets include managed assets of ~~$3.9~~$3.6 billion andnon-managed (custodial) assets of ~~$0.6~~$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 ~~$913.4~~$922.9 million as of ~~March 31,~~June 30, 2019 and ~~$933.6~~$934.9 million at ~~March 31,~~June 30, 2018 and are included in ~~trust-managed~~managed assets.

Service charges on deposits increased ~~$1.7~~$1.1 million or ~~35.8%~~20.4% for the second quarter of 2019 compared to the prior year period primarily because of the ~~FTSB and~~increased customer base from the FFKT ~~acquisitions.~~acquisition. Deposits increased ~~$1.7~~$1.0 billion to ~~$8.9~~$8.7 billion as of ~~March 31,~~June 30, 2019 as compared to ~~$7.2~~$7.7 billion as of ~~March 31,~~June 30, 2018. Included in service charges on deposits for the three months ended June 30, 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, continued to grow, increasing ~~$1.0~~$1.4 million or ~~22.0%~~24.9% compared to the ~~first three months~~second quarter of 2018 due to athe higher customer base from the ~~FTSB and~~ FFKT ~~acquisitions~~acquisition as well as an increased volume of debit card transactions from WesBanco’s legacy 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 and between an estimated~~$2.0-$3.0~~ $2.5 - $3.0 million per quarter beginning in the fourth quarter of 2019 due to the impact of the Durbin amendment from the 2010 passage of the Dodd-Frank Act on banks with total assets of $10 billion or greater.

Bank-owned life insurance ~~decreased $1.4~~increased $0.2 million or ~~52.1%~~18.8% compared to ~~first~~second quarter of 2018 due to ~~higher death benefits received during~~an increase in the ~~prior period. The~~ total cash surrender value, ofattributable to the WesBanco legacy bank-owned life insurance ~~increased $34.8 million to $226.6 million~~policies as ~~of March 31, 2019~~well as ~~compared to March 31, 2018, which is primarily attributable to~~ the acquired FFKT bank-owned life insurance ~~acquired from FFKT.~~policies. For the six months ended June 30, 2019, bank-owned life insurance decreased by $1.2 million or 31.5% compared to the six months ended June 30, 2018 due to higher mortality proceeds in the prior period.

Mortgage banking income remained flat ~~at $1.1~~decreasing $0.1 million in both the second quarter of 2019 compared to ~~$1.0 million at~~the prior year period and the six months ended June 30, 2019 compared to the prior year period. For the first ~~quarter~~half of ~~2018. Mortgage~~2019, mortgage production was ~~$94.1~~$257.4 million, which was an increase of ~~28.3%~~19.8% from the comparable 2018 ~~quarter. However,~~period. For the six months ended June 30, 2019, $106.4 million mortgages were sold into the secondary market ~~represented $39.6~~at a net margin of 2.8% as compared to $108.1 million ~~or 42.1%~~at a net margin of ~~overall mortgage loan production~~2.7% in the ~~first three months of 2019 compared to $38.6 million or 52.7% in the first three months of 2018.~~comparable 2018 period. Included in the mortgage banking income and the calculation of net margin noted above is ~~$0.3~~a $0.8 million loss and ~~$0.3~~a $0.6 million gain from the fair value adjustments on loans held for sale, ~~and~~ loan commitments and related derivatives for the ~~three~~six months ended ~~March 31,~~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 ~~$0.6~~$0.8 million for the ~~first three months of~~quarter ended June 30, 2019. There was no prior period income.

Net securities gains ~~(losses)~~ increased ~~$0.7~~$2.6 million compared to the ~~first~~second quarter of ~~2018. Included~~2018, due to a gain of $2.6 million on the sale of WesBanco’s Visa Class B stock in the second quarter, which was held at a zero cost basis. WesBanco holds no additional shares of Visa Class B stock. For the six months ended June 30, 2019, net securities gains ~~is a $0.6~~increased $3.2 million ~~market adjustment for deferred compensation and $0.1 million related to net gains on sales and calls of debt securities.~~

from the six months ended June 30, 2018.

NON-INTEREST EXPENSE

TABLE 5.NON-INTEREST EXPENSE


	For the Three Months Ended March 31,										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			2019		2018		$ Change			% Change
Salaries and wages	$	30,940	$	25,006	$	5,934			23.7		$	31,646	$	26,872	$	4,774			17.8		$	62,585	$	51,878	$	10,707			20.6
Employee benefits		9,989		6,912		3,077			44.5			9,705		7,965		1,740			21.8			19,694		14,877		4,817			32.4
Net occupancy		5,566		4,656		910			19.5			5,385		4,103		1,282			31.2			10,951		8,759		2,192			25.0
Equipment		4,833		3,949		884			22.4			4,818		4,095		723			17.7			9,651		8,044		1,607			20.0
Marketing		1,243		1,116		127			11.4			1,254		1,405		(151	)		(10.7	)		2,497		2,521		(24	)		(1.0	)
FDIC insurance		1,353		658		695			105.6			1,155		868		287			33.1			2,508		1,526		982			64.4
Amortization of intangible assets		2,514		1,086		1,428			131.5			2,465		1,312		1,153			87.9			4,978		2,397		2,581			107.7
Restructuring and merger-related expenses		3,107		245		2,862			1,168.2			81		5,412		(5,331	)		(98.5	)		3,188		5,657		(2,469	)		(43.6	)
Franchise and other miscellaneous taxes		3,026		2,235		791			35.4			3,176		2,083		1,093			52.5			6,202		4,318		1,884			43.6
Consulting, regulatory, accounting and advisory fees		1,817		1,532		285			18.6			2,269		1,747		522			29.9			4,085		3,278		807			24.6
ATM and electronic banking interchange expenses		1,723		1,216		507			41.7			1,712		1,299		413			31.8			3,434		2,515		919			36.5
Postage and courier expenses		1,549		959		590			61.5			1,198		985		213			21.6			2,747		1,945		802			41.2
Legal fees		679		713		(34	)		(4.8	)		936		644		292			45.3			1,615		1,357		258			19.0
Communications		930		488		442			90.6			895		565		330			58.4			1,825		1,054		771			73.1
Supplies		1,140		687		453			65.9			1,106		778		328			42.2			2,246		1,465		781			53.3
Other real estate owned and foreclosure expenses		12		199		(187	)		(94.0	)		152		251		(99	)		(39.4	)		163		449		(286	)		(63.7	)
Other		4,011		2,914		1,097			37.6			3,999		3,159		840			26.6			8,016		6,074		1,942			32.0

Totalnon-interest expense	$	74,432	$	54,571	$	19,861			36.4		$	71,952	$	63,543	$	8,409			13.2		$	146,385	$	118,114	$	28,271			23.9

Non-interest expense in the ~~first~~second quarter of 2019 increased by ~~$19.9~~$8.4 million or ~~36.4%~~13.2% compared to the same quarter in 2018, principally from the ~~FTSB and~~ FFKT ~~acquisitions,~~acquisition, which closed in the ~~second and~~ third quarters of 2018. In the first quarter of 2019, there was $3.1 million in merger-related expenses for the FFKT acquisition compared to $0.2 million in merger-related expenses for the FTSB acquisition in the first quarter of 2018. Excluding merger-related expenses,non-interest expense increased ~~$17.0~~$13.7 million or ~~31.3% compared to~~23.6%. For the second quarter, salaries and wages increased $4.8 million, employee benefits increased $1.7 million, net occupancy increased $1.3 million, amortization of intangible assets increased $1.2 million and franchise and other miscellaneous taxes increased by $1.1 million, offset by a decrease of $5.3 million in 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 ~~quarter~~six months of ~~2018.~~2018 for similar reasons for the three months ended.

Salaries and wages increased ~~$5.9~~$4.8 million or ~~23.7%~~17.8% from the ~~first~~second quarter of 2018 due to increased compensation expense related to a ~~20.1%~~15.3% increase in full-time equivalent (“FTE”) employees from the ~~FTSB~~FFKT acquisition and ~~FFKT acquisitions.~~from annual merit increases in the second quarter of 2019. Employee benefits expense increased ~~$3.1~~$1.7 million compared to the ~~first~~second quarter of 2018, primarily from a ~~$0.9~~$0.8 million increase in health care costs and a ~~$0.7~~$0.3 million increase in employer payroll taxes, ~~and a $0.6 million increase in the fair value of certain executive deferred compensation benefits,~~ which is ~~fully offset in net securities gains. Salaries and wages expense and benefits expense should benefit somewhat from a reduction in full-time equivalent~~primarily attributable to the increased headcount of 313 FTE employees ~~that occurred after the core technology and branch conversions of FFKT in the first quarter of 2019.~~since June 30, 2018.

Net occupancy costs increased ~~$0.9~~$1.3 million or ~~19.5%~~31.2% compared to the ~~first three months~~second quarter of 2018, primarily due to increased building-related costs from the additional branches acquired in the ~~FTSB and~~ FFKT ~~acquisitions~~acquisition including utilities, lease expense, depreciation, repairs and other seasonal maintenance ~~costs, such as snow removal.~~costs. Upon core conversion of FFKT in the first quarter of 2019, WesBanco closed or consolidated six branches in Kentucky to reduce ~~redundant~~overlapping locations, which allows the Company to operate more cost ~~effectively.~~

~~FDIC insurance increased $0.7 million or 105.6% compared to the first three months of 2018 due to a higher assessment rates resulting from the FTSB~~efficiently and FFKT acquisitions increasing WesBanco’s total assets over $10 billion and WesBanco now being assessed as a large bank. WesBanco expects to receive $3.1 million of small bank credits against future assessments once the FDIC insurance fund reaches 1.38%.provide better facilities.

Amortization of intangible assets increased ~~$1.4~~$1.2 million or ~~131.5%~~87.9% compared to the ~~same~~second quarter of 2018. ~~The FTSB acquisition added approximately $8.1 million in core deposit intangibles.~~ The 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 FFKT acquisition that closed on August 20, 2018, and ~~increased $2.9~~decreased $5.3 million from the ~~$0.2~~$5.4 million in merger-related expenses that were recorded in the ~~first~~second quarter of 2018 for the FTSB ~~acquisition. The $3.1 million of expenses recorded in the first quarter of 2019 include $1.3 million in branch consolidation costs, as six branches were closed or consolidated~~ and ~~four branches were transferred to held for sale, $1.0 million in conversion costs and professional fees, $0.4 million in staffing costs and $0.4 million in contract termination costs.~~FFKT acquisitions.

Franchise and other miscellaneous taxes increased by ~~$0.8~~$1.1 million or ~~35.4%~~52.5% from the same quarter of 2018 due to a ~~$0.3~~$0.6 million increase in the Kentucky corporate franchise tax from the FFKT acquisition, which was headquartered in Kentucky. Real and personal property taxes also increased by ~~$0.2~~$0.3 million due to the addition of ~~FTSB and~~ FFKT’s branches.

INCOME TAXES

The provision for income taxes increased ~~$1.9~~$2.8 million or ~~26.5%~~37.7% in the ~~first~~second quarter of 2019 compared to the ~~first~~second quarter of 2018, primarily due to a ~~$8.7~~$14.4 million or 35.6% increase inpre-tax income. The effective tax rate increased to ~~18.01%~~18.4% compared to ~~17.28%~~18.1% in the ~~first~~second quarter of 2018. For the six months ended June 30, 2019, the provision for income taxes increased $4.6 million or 32.2% as compared to the prior year period. The effective tax rate for the first half of 2019 was 18.2% compared to 17.7% in the prior year period.

FINANCIAL CONDITION

Total assets ~~increased 1.1%, while deposits~~ and shareholders’ equity increased ~~1.0%~~0.3% and ~~2.2%~~4.8%, respectively, while deposits decreased 1.5%, compared to December 31, 2018. Total securities decreased by ~~$53.2~~$105.1 million or ~~1.7%~~3.3% from December 31, 2018 to ~~March 31,~~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 ~~$25.0~~$53.1 million ~~reduction~~increase in unrealized ~~losses~~gains in theavailable-for-sale portfolio. Total portfolio loans ~~remained virtually unchanged increasing $9.8~~increased $81.6 million or ~~0.1%~~1.1%. Deposits ~~increased $84.7~~decreased $136.7 million fromyear-end resulting from a ~~1.8% increase in demand deposits,~~6.2%, a ~~1.7% increase in savings deposits~~3.9%, and a ~~0.5% increase in money market deposits, which more than offset the 2.2%~~0.6% decrease in certificates of ~~deposit.~~deposit, money market deposits, and demand deposits, respectively, which were partially offset by a 1.5% increase in 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 ~~an $8.7~~a $9.9 million decrease in 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 ~~decreased 1.4%~~increased 2.6% during the first ~~three~~six months of 2019 as FHLB ~~maturities exceeded~~ new borrowings exceeded maturities by ~~$22.5~~$67.1 million and ~~$10.3~~other short-term borrowings increased $5.6 million, which were partially offset by $33.5 million of junior subordinated debentures ~~were~~ redeemed during the first ~~three~~six months of ~~2019, which were partially offset by an $11.0 million increase in short-term borrowings.~~2019. Total shareholders’ equity increased by approximately ~~$44.3~~$95.3 million or ~~2.2%~~4.8%, compared to December 31, 2018, primarily due to net income exceeding dividends for the period by ~~$23.4~~$51.3 million and a ~~$19.8~~$42.0 million other comprehensive income gain.

TABLE 6. COMPOSITION OF SECURITIES (1)

													June 30,			December 31,
*(unaudited, dollars in thousands)*	March 31, 2019			December 31, 2018			$ Change			% Change			2019			2018			$ Change			% Change
Equity securities (at fair value)	$	11,978		$	11,737		$	241			2.1		$	11,817		$	11,737		$	80			0.7
Available-for-sale debt securities (at fair value)
U.S. Treasury		19,712			19,878			(166	)		(0.8	)		29,781			19,878			9,903			49.8
U.S. Government sponsored entities and agencies		139,290			141,652			(2,362	)		(1.7	)		134,587			141,652			(7,065	)		(5.0	)
Residential mortgage-backed securities and collateralized mortgage obligations of government sponsored entities and agencies		1,582,784			1,561,255			21,529			1.4			1,563,042			1,561,255			1,787			0.1
Commercial mortgage-backed securities and collateralized mortgage obligations of government sponsored entities and agencies		177,005			168,972			8,033			4.8			178,656			168,972			9,684			5.7
Obligations of states and political subdivisions		186,067			185,114			953			0.5			183,178			185,114			(1,936	)		(1.0	)
Corporate debt securities		40,231			37,258			2,973			8.0			40,040			37,258			2,782			7.5

Totalavailable-for-sale debt securities	$	2,145,089		$	2,114,129		$	30,960			1.5		$	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	$	10,627		$	10,823		$	(196	)		(1.8	)	$	10,020		$	10,823		$	(803	)		(7.4	)
Residential mortgage-backed securities and collateralized mortgage obligations of government sponsored entities and agencies		142,931			148,300			(5,369	)		(3.6	)		136,929			148,300			(11,371	)		(7.7	)
Obligations of states and political subdivisions		749,652			828,520			(78,868	)		(9.5	)		720,399			828,520			(108,121	)		(13.0	)
Corporate debt securities		33,274			33,291			(17	)		(0.1	)		33,257			33,291			(34	)		(0.1	)

Totalheld-to-maturity debt securities		936,484			1,020,934			(84,450	)		(8.3	)		900,605			1,020,934			(120,329	)		(11.8	)

Total securities	$	3,093,551		$	3,146,800		$	(53,249	)		(1.7	)	$	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⁾		2.79	%		2.78	%								2.76	%		2.78	%
As a % of total securities		69.7	%		67.6	%								70.4	%		67.6	%
Weighted average life (in years)		4.8			5.0									4.4			5.0

Held-to-maturity securities:
Weighted average yield at the respective period end⁽²⁾		3.54	%		3.47	%								3.53	%		3.47	%
As a % of total securities		30.3	%		32.4	%								29.6	%		32.4	%
Weighted average life (in years)		3.8			4.6									3.7			4.6

Total securities:
Weighted average yield at the respective period end⁽²⁾		3.02	%		3.00	%								2.99	%		3.00	%
As a % of total securities		100.0	%		100.0	%								100.0	%		100.0	%
Weighted average life (in years)		4.5			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 March 31, 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.

~~(2)~~

⁽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, decreased by ~~$53.3~~$105.1 million or ~~1.7%~~3.3% from December 31, 2018 to ~~March 31,~~June 30, 2019. Through the first ~~three~~six months of 2019, theavailable-for-sale portfolio increased by ~~$31.0~~$15.2 million or ~~1.5%~~0.7%, while theheld-to-maturity portfolio decreased by ~~$84.5~~$120.3 million or ~~8.3%~~11.8% due to $67.4 million ofheld-to-maturity callable municipal securities being transferred toavailable-for-sale, with the adoption of ASU2017-12. WesBanco elected to use theone-time transition election to transfer these securities as they were some of the lower yielding securities in the municipal portfolio, and subsequently sold $66.1 million of these securities at a $51 thousand net gain. The weighted average yield of the portfolio ~~increased~~decreased by ~~two~~one basis ~~points~~point from 3.00% at December 31, 2018 to ~~3.02%~~2.99% at ~~March 31, 2019. Though~~June 30, 2019, primarily due to increased prepayment speeds on mortgage-backed securities as market rates ~~decreased~~declined in the ~~first~~second quarter. During the second quarter of 2019, ~~thetax-equivalent~~ ~~yield increased by approximately two basis points~~WesBanco recorded a $2.6 million gain on the ~~entire portfolio fromyear-end~~ ~~due to the previously mentioned sales.~~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 ~~March 31,~~June 30, 2019 and December 31, 2018 were ~~$3.6~~$19.4 million and ~~$25.3~~($21.5) million, respectively. With approximately 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 ~~30.2%~~29.7% of the overall securities portfolio as of ~~March 31,~~June 30, 2019 compared to 32.2% as of December 31, 2018, and 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


	March 31, 2019				December 31, 2018				June 30, 2019				December 31, 2018
*(unaudited, dollars in thousands)*	Amount		% of Total		Amount		% of Total		Amount		% of Total		Amount		% of Total
Municipal bonds (at fair value) (1):
Moody’s: Aaa / S&P: AAA	$	117,264		12.3	$	101,557		10.0
Moody’s: Aa1 ; Aa2 ; Aa3 / S&P: AA+ ; AA ; AA-		688,158		72.5		654,787		64.3
Moody’s: A1 ; A2 ; A3 / S&P: A+ ; A ; A-		123,633		13.0		237,847		23.4
Moody’s: Baa1 ; Baa2 ; Baa3 / S&P: BBB+ ; BBB ;BBB- (2)		5,364		0.6		7,607		0.7
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		15,098		1.6		16,595		1.6		12,370		1.4		16,595		1.6

Total municipal bond portfolio	$	949,517		100.0	$	1,018,393		100.0	$	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 lowest available rating was used when placing the bond into a category in the table.~~

~~(2)~~

~~As of March 31,~~

⁽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 ~~March 31,~~June 30, 2019 consists of ~~$185.9~~$182.8 million taxable (primarily Build America Bonds) and ~~$763.6~~$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


	March 31, 2019				December 31, 2018				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	$	646,077		68.0	$	690,463		67.8	$	625,476		67.8	$	690,463		67.8
Revenue		303,440		32.0		327,930		32.2		297,451		32.2		327,930		32.2

Total municipal bond portfolio	$	949,517		100.0	$	1,018,393		100.0	$	922,927		100.0	$	1,018,393		100.0


Municipal bond issuer:
State Issued	$	87,444		9.2	$	98,468		9.7	$	83,841		9.1	$	98,468		9.7
Local Issued		862,073		90.8		919,925		90.3		839,086		90.9		919,925		90.3

Total municipal bond portfolio	$	949,517		100.0	$	1,018,393		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 ~~March 31,~~June 30, 2019:

TABLE 9. CONCENTRATION OF MUNICIPAL SECURITIES

   March 31, 2019
(unaudited, dollars in thousands)
   Fair Value    % of Total
Pennsylvania
   $ 187,439    19.7
Texas
   104,746    11.0
Ohio
   100,352    10.6
Kentucky
   56,170    5.9
Illinois
   43,339    4.6
All other states (1)
   457,471    48.2




Total municipal bond portfolio
   $ 949,517    100.0

~~(1)~~

~~WesBanco’s municipal bond portfolio contains obligations in the state of West Virginia totaling $37.6 million or 4.0%~~

	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 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 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. 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 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 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 loss in the event of default to understand their impact on the Bank’s earnings and capital.

TABLE 10. COMPOSITION OF LOANS (1)


	March 31, 2019				December 31, 2018				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	$	505,127		6.6	$	528,072		6.9	$	483,046		6.2	$	528,072		6.9
Improved property		3,337,281		43.5		3,325,623		43.4		3,394,587		43.8	$	3,325,623		43.4

Total commercial real estate		3,842,408		50.1		3,853,695		50.3		3,877,633		50.0		3,853,695		50.3
Commercial and industrial		1,274,992		16.6		1,265,460		16.5		1,300,577		16.8		1,265,460		16.5
Residential real estate		1,628,067		21.2		1,611,607		21.0		1,633,613		21.1		1,611,607		21.0
Home equity		590,462		7.7		599,331		7.8		590,303		7.6		599,331		7.8
Consumer		330,152		4.3		326,188		4.3		335,728		4.3		326,188		4.3

Total portfolio loans		7,666,081		99.9		7,656,281		99.9		7,737,854		99.8		7,656,281		99.9
Loans held for sale		8,358		0.1		8,994		0.1		18,649		0.2		8,994		0.1

Total loans	$	7,674,439		100.0	$	7,665,275		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 ~~$9.2~~$91.2 million or ~~0.1%~~1.2% from December 31, 2018 while portfolio loans increased ~~$1.3 billion~~$945.0 million or ~~21.3%~~13.9% over the last twelve months. Total loan growth over the last twelve months was primarily due to the ~~acquisitions~~acquisition of ~~FTSB and~~ FFKT. Total organic loans were down ~~1.3%~~1.1% year-over-year, resulting from 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 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 $2.5 billion, including loans approved but not closed, increased ~~$88.8~~$42.5 million or ~~3.7%~~1.8% from December 31, 2018 due primarily to loans approved but not closed. The line utilization percentage for the commercial portfolio was ~~47.8%~~46.9% at ~~March 31,~~June 30, 2019 and 47.6% at December 31, 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.

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)*	March 31, 2019			December 31, 2018			June 30, 2019			December 31, 2018
Non-accrual loans:
Commercial real estate—land and construction	$	285		$	—
Commercial real estate—improved property		8,639			8,413
Commercial real estate - land and construction							$	295		$	—
Commercial real estate - improved property								11,726			8,413
Commercial and industrial		3,212			3,260			2,854			3,260
Residential real estate		12,871			13,831			12,813			13,831
Home equity		4,813			4,610			4,886			4,610
Consumer		407			586			324			586

Totalnon-accrual loans (1)		30,227			30,700			32,898			30,700

TDRs accruing interest:
Commercial real estate—land and construction		—			—
Commercial real estate—improved property		755			880
Commercial real estate - land and construction								—			—
Commercial real estate - improved property								743			880
Commercial and industrial		162			168			192			168
Residential real estate		4,000			4,185			4,005			4,185
Home equity		506			426			486			426
Consumer		58			85			61			85

Total TDRs accruing interest (1)		5,481			5,744			5,487			5,744

Totalnon-performing loans	$	35,708		$	36,444		$	38,385		$	36,444

Other real estate owned and repossessed assets		6,001			7,265			4,973			7,265

Totalnon-performing assets	$	41,709		$	43,709		$	43,358		$	43,709

Non-performing loans/total portfolio loans		0.47	%		0.48	%		0.50	%		0.48	%
Non-performing assets/total assets		0.33	%		0.35	%		0.35	%		0.35	%
Non-performing assets/total portfolio loans, other real estate and repossessed assets		0.54	%		0.57	%		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 $2.9 million at March 31, 2019 and December 31, 2018, respectively, are included in total nonaccrual loans.~~

Non-performing loans, which consist ofnon-accrual loans and TDRs, ~~decreased $0.7~~increased $1.9 million or ~~2.0%~~5.3%, from December 31, 2018, primarily due to ~~the paydown of one large residential real estate~~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 $0.3 million due to normal repayments being slightly higher than additions to the category. (Please see the Notes to the Consolidated Financial Statements for additional discussion.)

Other real estate owned and repossessed assets decreased ~~$1.3~~$2.3 million from December 31, 2018 primarily due to continued efforts to liquidate properties and write-downs on FFKT acquired other real estate 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)*	March 31, 2019			December 31, 2018			June 30, 2019			December 31, 2018
Loans past due 90 days or more:
Commercial real estate—land and construction	$	—		$	—
Commercial real estate—improved property		558			175
Commercial real estate - land and construction							$	—		$	—
Commercial real estate - improved property								587			175
Commercial and industrial		221			13			97			13
Residential real estate		1,096			2,820			1,173			2,820
Home equity		730			705			533			705
Consumer		135			364			244			364

Total loans past due 90 days or more		2,740			4,077			2,634			4,077

Loans past due 30 to 89 days:
Commercial real estate—land and construction		1,979			1,412
Commercial real estate—improved property		5,285			4,439
Commercial real estate - land and construction								1,010			1,412
Commercial real estate - improved property								2,437			4,439
Commercial and industrial		861			878			1,064			878
Residential real estate		8,206			6,542			6,779			6,542
Home equity		2,778			3,344			2,016			3,344
Consumer		2,324			2,954			2,140			2,954

Total loans past due 30 to 89 days		21,433			19,569			15,446			19,569

Total 30 days or more	$	24,173		$	23,646		$	18,080		$	23,646

Loans past due 90 days or more and accruing to total portfolio loans		0.04	%		0.05	%		0.03	%		0.05	%
Loans past due30-89 days and accruing to total portfolio loans		0.28	%		0.26	%		0.20	%		0.26	%

Loans past due 30 days or more and accruing interest excludingnon-accruals and TDRs ~~increased $0.5~~decreased $5.6 million or ~~2.2%~~23.5% from December 31, 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 ~~$1.7~~$2.0 million ~~increase~~decrease in the ~~residential~~commercial real estate – improved property category and represented ~~0.11%~~0.03% of total loans at ~~March 31,~~June 30, 2019 and ~~0.09%~~0.06% at December 31, 2018. Loans past due 90 days or more decreased ~~$1.3~~$1.4 million compared to December 31, 2018 and represented ~~0.04%~~0.03% of total loans at ~~March 31,~~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 ~~$48.9~~$50.9 million represented ~~0.64%~~0.66% of total portfolio loans at ~~March 31,~~June 30, 2019 compared to 0.64% as of December 31, 2018 and ~~0.73%~~0.70% as of ~~March 31,~~June 30, 2018. Included in the ratio are acquired ~~FTSB and~~ FFKT loans (recorded at fair value at the date of acquisition of ~~$1.5~~$1.0 billion) and the related allowance on ~~FTSB and~~ FFKT acquired loans of ~~$56~~$8 thousand at ~~March 31,~~June 30, 2019 recorded since ~~acquisitions.~~acquisition.

The allowance for loans individually-evaluated increased ~~$93 thousand~~$1.5 million from December 31, 2018 to ~~March 31,~~June 30, 2019. The allowance for loans collectively-evaluated ~~decreased~~increased from December 31, 2018 to ~~March 31,~~June 30, 2019 by ~~$0.2~~$0.4 million.

The allowance for loan commitments was ~~$2.0~~$1.8 million at ~~March 31,~~June 30, 2019 as compared to $0.7 million at December 31, 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.~~status in the first quarter.

The allowance for credit losses by loan category, presented in Note 5, “Loans and the Allowance for Credit Losses” of 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. 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 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 were ~~1.42%~~1.48% of total loans, increasing from 1.08% at December 31, 2018. Criticized and classified loans increased ~~$26.1~~$31.3 million from December 31, 2018 to ~~$109.1~~$114.2 million at ~~March 31,~~June 30, 2019 primarily due to the post-acquisition loan grade review process and two larger downgraded relationships in the legacy loan ~~portfolio.~~portfolio in the first quarter.

Table 13 summarizes the allocation of the allowance for credit losses to each category of the loan portfolio. The overall allowance for loans was relatively unchanged. The allowance for commercial and industrial loan commitments increased due to the downgrade of a commercial and industrial loan with a remaining undrawn commitment balance.

TABLE 13. ALLOCATION OF THE ALLOWANCE FOR CREDIT LOSSES


*(unaudited, dollars in thousands)*	March 31, 2019		Percent of Total		December 31, 2018		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	$	4,045		7.9	$	4,039		8.1
Commercial real estate—improved property		19,915		39.2		20,848		42.0
Commercial real estate - land and construction									$	3,701		7.0	$	4,039		8.1
Commercial real estate - improved property										22,367		42.5		20,848		42.0
Commercial and industrial		12,907		25.4		12,114		24.4		12,887		24.5		12,114		24.4
Residential real estate		3,745		7.4		3,822		7.7		3,455		6.6		3,822		7.7
Home equity		4,269		8.4		4,356		8.8		4,321		8.2		4,356		8.8
Consumer		2,780		5.5		2,797		5.6		2,682		5.1		2,797		5.6
Deposit account overdrafts		1,205		2.3		972		1.8		1,446		2.7		972		1.8

Total allowance for loan losses	$	48,866		96.1	$	48,948		98.4	$	50,859		96.6	$	48,948		98.4

Allowance for loan commitments:
Commercial real estate—land and construction	$	194		0.4	$	169		0.4
Commercial real estate—improved property		24		0.1		33		0.1
Commercial real estate - land and construction									$	187		0.4	$	169		0.4
Commercial real estate - improved property										24		0.0		33		0.1
Commercial and industrial		1,443		2.8		262		0.5		1,257		2.4		262		0.5
Residential real estate		11		0.0		12		0.0		13		0.0		12		0.0
Home equity		248		0.5		226		0.5		249		0.5		226		0.5
Consumer		40		0.1		39		0.1		36		0.1		39		0.1

Total allowance for loan commitments		1,960		3.9		741		1.6		1,766		3.4		741		1.6

Total allowance for credit losses	$	50,826		100.0	$	49,689		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 ~~March 31,~~June 30, 2019.

DEPOSITS

TABLE 14. DEPOSITS


*(unaudited, dollars in thousands)*	March 31, 2019		December 31, 2018		$ Change			% Change			June 30, 2019		December 31, 2018		$ Change			% Change
Deposits
Non-interest bearing demand	$	2,511,140	$	2,441,041	$	70,099			2.9		$	2,481,065	$	2,441,041	$	40,024			1.6
Interest bearing demand		2,159,654		2,146,508		13,146			0.6			2,079,795		2,146,508		(66,713	)		(3.1	)
Money market		1,148,295		1,142,925		5,370			0.5			1,098,917		1,142,925		(44,008	)		(3.9	)
Savings deposits		1,672,967		1,645,549		27,418			1.7			1,670,035		1,645,549		24,486			1.5
Certificates of deposit		1,424,275		1,455,610		(31,335	)		(2.2	)		1,365,116		1,455,610		(90,494	)		(6.2	)

Total deposits	$	8,916,331	$	8,831,633	$	84,698			1.0		$	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 ~~203~~199 financial centers. The FDIC insures deposits up to $250,000 per account.

Total deposits ~~increased~~decreased by ~~$84.7~~$136.7 million or ~~1.0%~~1.5% during the first ~~three~~six months of 2019.~~Non-interest~~ ~~bearing demand, savings~~ Money market deposits and interest bearing demand deposits decreased 3.9% and ~~money market~~3.1%, respectively, which were partially offset by non-interest bearing demand and savings deposits ~~increased 2.9%, 1.7%, 0.6%~~increasing by 1.6% and ~~0.5%~~1.5%, respectively. ~~This~~The growth in non-interest bearing demand deposits and savings deposits is primarily attributable to marketing, customer incentives, focused retail and business strategies to obtain more account relationships and customers’ preferences for shorter-term 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®) money market deposit program. ICS® reciprocal balances totaled ~~$60.5~~$57.3 million at ~~March 31,~~June 30, 2019 compared to $61.4 million at December 31, 2018. ~~In addition, public funds increased in the first quarter due to the seasonality of local and municipal governmental tax receipts.~~

Certificates of deposit decreased ~~$31.3~~$90.5 million due primarily to the effects of an overall corporate strategy designed to increase and remix retail deposit relationships and ~~reducing~~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 offered rates on certain maturing certificates of deposit in a rising rate environment~~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. ~~CDARS~~^®CDARS® balances totaled ~~$40.7~~$39.5 million in outstanding balances at ~~March 31,~~June 30, 2019, of which ~~$17.0~~$16.9 million representedone-way buys, compared to $49.4 million in total outstanding balances at December 31, 2018, of which $22.0 million representedone-way buys. Certificates of deposit greater than $250,000 were approximately ~~$320.6~~$305.5 million at ~~March 31,~~June 30, 2019 compared to $323.2 million at December 31, 2018. Certificates of deposit of $100,000 or more were approximately ~~$671.4~~$640.3 million at ~~March 31,~~June 30, 2019 compared to $684.6 million at December 31, 2018. Certificates of deposit totaling approximately ~~$806.4~~$815.7 million at ~~March 31,~~June 30, 2019 with a cost of ~~1.15%~~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)*	March 31, 2019		December 31, 2018		$ Change			% Change			June 30, 2019		December 31, 2018		$ Change			% Change
Federal Home Loan Bank Borrowings	$	1,031,796	$	1,054,174	$	(22,378	)		(2.1	)	$	1,121,283	$	1,054,174	$	67,109			6.4
Other short-term borrowings		301,547		290,522		11,025			3.8			296,148		290,522		5,626			1.9
Subordinated debt and junior subordinated debt		179,632		189,842		(10,210	)		(5.4	)		156,534		189,842		(33,308	)		(17.5	)

Total	$	1,512,975	$	1,534,538	$	(21,563	)		(1.4	)	$	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 ~~quarter~~six months of 2019, FHLB borrowings ~~decreased $22.4~~increased $67.1 million, as ~~$122.4~~$285.0 million in new advances offset $217.9 million maturities, other principal paydowns and purchase accounting ~~amortization offset $100.0 million in new advances. In addition,~~amortization. WesBanco extended the maturities of approximately ~~$100.0~~$285.0 million of maturing FHLB borrowings in the first ~~quarter~~six months with a prior cost of approximately ~~1.86%~~1.96%, at current short-term FHLB rates approximating ~~2.59%~~2.05% - ~~2.68%~~2.32%.

Other short-term borrowings, which may consist of federal funds purchased, callable repurchase agreements, overnight sweep checking accounts, and borrowings on a revolving line of credit, were ~~$301.5~~$296.1 million at ~~March 31,~~June 30, 2019 compared to $290.5 million at December 31, 2018. The increase is primarily due to a ~~$6.4~~$0.3 million increase in callable repurchase agreements, coupled with a ~~$4.6~~$5.3 million increase in overnight sweep checking accounts. At ~~March 31,~~June 30, 2019, there were no outstanding federal funds purchased.

Subordinated debt and junior subordinated debt were ~~$179.6~~$156.5 million at ~~March 31,~~June 30, 2019 compared to $189.8 million at December 31, 2018. The decrease is primarily a result of the redemption of ~~$10.3~~$33.5 million in junior subordinated debt during the first ~~three~~six months of 2019, ~~from~~which were assumed in the FFKT acquisition. ~~On May 1, 2019, WesBanco is redeeming $23.2 million in junior subordinated debt acquired from FFKT in 2018.~~

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 ~~March 31,~~either June 30, 2019 or December 31, 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 ~~13,~~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 ~~$44.3~~$95.3 million or ~~2.2%~~4.8% from $2.0 billion at December 31, 2018. The increase resulted primarily from net income during the current ~~three-month~~six-month period of ~~$40.3~~$85.2 million and a ~~$19.8~~$42.0 million ~~reduction in~~ other comprehensive income ~~losses,~~gain, which was partially offset by the declaration of common shareholder dividends totaling ~~$16.9~~$33.8 million for the ~~three~~six months ended ~~March 31,~~June 30, 2019. WesBanco also increased its quarterly dividend rate to $0.31 per share in February, representing a 6.9% increase over the prior quarterly rate and a cumulative 121% increase since 2010.

WesBanco ~~did not purchase any~~purchased 15,755 shares during the ~~three-month~~six-month period ended ~~March 31,~~June 30, 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 ~~March 31,~~June 30, 2019, the remaining shares authorized to be purchased under the current repurchase plans totaled ~~1,092,535~~1,076,780 shares.

On February 27, 2019, WesBanco granted 12,000 Total Shareholder Return Plan (“TSR”) shares for the performance period beginning January 1, 2019 and ending December 31, 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 15, 2019, WesBanco granted 129,850 stock options to selected officers at an exercise price of $38.93. These options are service-based and vest 50% at December 31, 2019 and 50% at December 31, 2020. On the same date, WesBanco also issued 105,545 shares of time-based restricted stock to selected officers and 16,056 shares of performance-based restricted stock to selected officers. 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, 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 $11 billion and $25 billion. Earned performance-based restricted shares are also subject to additional service-based vesting with 50% vesting on May 15, 2023 after the completion of the three-year performance period and the final 50% vesting on May 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 ~~March 31,~~June 30, 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 ~~March 31,~~June 30, 2019, under FDIC regulations, WesBanco could receive, without prior regulatory approval, a dividend of approximately ~~$115.7~~$137.4 million from the Bank. WesBanco 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 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
							March 31, 2019							December 31, 2018							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	%	$	1,276,504		10.98	%	$	465,164	$	1,258,605		10.74	%	$	468,824		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	%		1,124,004		13.47	%		375,195		1,096,105		13.14	%		375,254		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	%		1,276,504		15.31	%		500,261		1,258,605		15.09	%		500,338		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	%		1,352,527		16.22	%		667,014		1,333,503		15.99	%		667,118		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	%	$	1,130,289		9.74	%	$	464,374	$	1,108,600		9.48	%	$	467,939		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	%		1,130,289		13.56	%		375,104		1,108,600		13.30	%		375,117		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	%		1,130,289		13.56	%		500,138		1,108,600		13.30	%		500,156		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	%		1,206,312		14.47	%		666,851		1,183,498		14.20	%		666,874		8.00	%		10.00	%		1,230,411		14.66	%			671,643		1,183,498		14.20	%		666,874

⁽¹⁾ Minimum requirements to remain adequately capitalized.

~~(1)~~

~~Minimum requirements to remain adequately capitalized.~~

~~(2)~~

⁽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 ~~60.4%~~61.5% at ~~March 31,~~June 30, 2019 and deposit balances funded ~~70.8%~~69.6% of assets.

The following table lists the sources of liquidity from assets at ~~March 31,~~June 30, 2019 expected within the next year:


*(unaudited, in thousands)*
Cash and cash equivalents	$	336,894	$	194,355
Securities with a maturity date within the next year and callable securities		296,873		331,709
Projected payments and prepayments on mortgage-backed securities and collateralized mortgage obligations (1)		244,100		287,816
Loans held for sale		8,358		18,649
Accruing loans scheduled to mature		1,088,626		1,029,536
Normal loan repayments		1,858,135		2,004,119

Total sources of liquidity expected within the next year	$	3,832,986	$	3,866,184

~~(1)~~

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

Deposit flows are another principal factor affecting overall WesBanco liquidity. Deposits totaled ~~$8.9~~$8.7 billion at ~~March 31,~~June 30, 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 ~~$806.4~~$815.7 million at ~~March 31,~~June 30, 2019, which includes jumbo regular certificates of deposit totaling ~~$377.1~~$381.7 million with a weighted-average cost of ~~1.68%~~1.73%, and jumbo CDARS^® deposits of ~~$21.4~~$24.3 million with a weighted-average cost of ~~1.45%~~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 ~~March 31,~~June 30, 2019 and December 31, 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 ~~March 31,~~June 30, 2019, the Bank had unpledgedavailable-for-sale securities with an amortized cost of ~~$431.9~~$398.2 million. A portion of 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, as only approximately ~~20.6%~~19.4% of theavailable-for-sale 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 FFKT acquisitions. WesBanco’sheld-to-maturity portfolio currently contains ~~$628.4~~$603.9 million of unpledged securities. Most of these securities aretax-exempt municipal securities, which can only be pledged in limited circumstances. Except for certain 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 be reclassified asavailable-for-sale, and theheld-to-maturity designation would 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 ~~March 31,~~June 30, 2019, WesBanco had a BIC line of credit totaling ~~$175.8~~$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 $275.0 million, none of which was outstanding at ~~March 31,~~June 30, 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 ~~$301.5~~$296.1 million at ~~March 31,~~June 30, 2019 consisted of callable repurchase agreements and overnight sweep checking accounts for large commercial customers. There has not been a significant fluctuation in the average deposit balances of the overnight sweep checking accounts during the first ~~three~~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, ~~$131.1~~$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 ~~March 31,~~June 30, 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 ~~March 31,~~June 30, 2019, under FDIC and State of West Virginia regulations, WesBanco could receive, without prior regulatory approval, dividends of approximately ~~$115.7~~$137.4 million from the Bank. Management believes these are appropriate levels of cash for 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 ~~$2.4~~$2.5 billion at ~~March 31,~~June 30, 2019 and December 31, 2018. On a historical basis, only a portion of these commitments will result in an outflow of funds. Please refer to Note ~~13,~~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 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 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~~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 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 assets and rates paid on interest 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 shareholders’ 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, call dates, changes to 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 are based on historical experience, current market rates and economic forecasts and are ~~periodically~~internally back-tested and periodically reviewed by a third-party 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 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 ~~March 31,~~June 30, 2019 and December 31, 2018, assuming the above-noted interest rate increases as compared to a base model. In the current interest rate environment, particularly for short-term rates, the 300 - 400 basis point decreasing 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	Percentage Change in Net Interest Income from Base over One Year		ALCO
Immediate Change in				Percentage Change in
Interest Rates				Net Interest Income from Base over One Year		ALCO
(basis points)	March 31, 2019	December 31, 2018	Guidelines	June 30, 2019	December 31, 2018	Guidelines
+400	10.7%	7.6%	(20.0%)	11.5%	7.6%	(20.0%)
+300	8.3%	6.4%	(15.0%)	8.9%	6.4%	(15.0%)
+200	5.6%	3.9%	(12.5%)	6.1%	3.9%	(12.5%)
+100	3.0%	2.1%	(10.0%)	3.2%	2.1%	(10.0%)
-100	(2.3%)	(2.1%)	(10.0%)	(2.5%)	(2.1%)	(10.0%)
-200	(7.3%)	(5.8%)	(12.5%)	(8.2%)	(5.8%)	(12.5%)

As per the table above, the earnings sensitivity simulation model at ~~March 31,~~June 30, 2019 currently projects that net interest income for the next twelve-month period would decrease by ~~2.3%~~2.5% - ~~7.3%~~8.2% if interest rates were to fall immediately by 100 - 200 basis points, compared to a decrease of 2.1% - 5.8% as of December 31, 2018. For rising rate scenarios, net interest income would increase by between ~~3.0%~~3.2% - ~~10.7%~~11.5% if rates were to increase by between 100 - 400 basis points as of ~~March 31,~~June 30, 2019, compared to increases of between 2.1% - 7.6% as of December 31, 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.

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

The balance sheet shows somewhat higher asset sensitivity as of ~~March 31,~~June 30, 2019, as compared to December 31, 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 utilized in the parallel rate shock and “dynamic” models are estimated ~~to be~~at a higher percentage for ~~future~~potential rate ~~increases, if any,~~increase scenarios than has been the Bank’s experience to date through nine federal funds rate increases ~~since December 2015, four of which occurred~~over the past three and a half years for competitive factors in ~~2018.~~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 ~~24%~~34% or 17 basis points for the trailing twelve months. Deposit decay rates and loan prepayment speeds are adjusted periodically for loans andnon-maturity deposit products. ~~Overall asset~~Asset sensitivity in~~non-parallel~~ rising rate scenarios may be ~~mitigated~~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 mortgage-related assets~~ and other ~~differences.~~factors. Commercial loans with floors currently average ~~4.23%~~4.26% on approximately $1.5 billion or ~~29%~~28% of total commercial loans at ~~March 31,~~June 30, 2019, as compared to $1.5 billion averaging 4.27% or 29% of commercial loans at December 31, 2018. Approximately ~~38%~~36% or ~~$555.6~~$517.5 million of these loans are currently priced at their floor, as compared to 38% or $570.5 million at December 31, 2018. These loans typically do not adjust as rapidly from their current floor level as compared to loans without 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 increased 3027 basis points ~~year-over-year~~for the first six months of 2019 to 3.68% as compared to the same period last year and ~~decreased four~~24 basis points ~~from~~for the ~~fourth~~second quarter to 3.67% compared to last year, while it was one basis point below the first quarter’s net interest margin of ~~2018.~~3.68%. The ~~first quarter~~ increase from last year’s first half and second quarter was primarily due to increased short-term rates, highernon-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% infor both the ~~first quarter~~three and six month periods as compared to ~~3.32%~~3.31% last ~~year and~~year. It was also consistent with the first quarter’s 3.49% ~~for the fourth quarter.~~. Currently, the federal funds market is ~~beginning to anticipate future~~anticipating that the Federal Reserve Board ~~rate decreases,~~may decrease short-term rates by 25 basis points at least two times prior to year-end, which if such interest rate ~~environment~~scenario occurs, would result in lower net interest income and margin, as the Company remains ~~somewhat~~ asset ~~sensitive.~~sensitive, suggesting that earning assets repricing downward may occur at a faster pace than reductions in deposit or borrowing rates. The currentflat-to-inverted yield curve environment has reduced our base case assumption about net interest income and margin for the ~~remainder~~balance of the year as compared to expectations ~~in the fourth quarter.~~at year-end, which anticipated a continuing rising rate environment and a higher core margin. It is currently expected that the core net interest margin ~~in 2019~~ will ~~remain relatively flat on~~slightly decline by a ~~core~~few basis ~~and, on~~points over the remainder of the year, excluding purchase accounting. On a total basis including purchase accounting accretion, ~~will~~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 ~~throughout the year~~ from ~~an expected level ofmid-teen~~its current mid-teens basis points ~~in purchase accounting accretion in the second quarter. Management~~level. Management’s modeling currently ~~anticipates no change~~includes two 25 basis point decreases in the federal funds rate ~~in 2019,~~over the remainder of the year, which is relatively consistent with ~~Federal Reserve Board and~~ consensus economist expectations. The shape of the yield curve, ~~increases~~changes to deposit betas or rates beyond 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.

Certificates of deposit totaling approximately ~~$806.4~~$815.7 million mature within the next year at an average cost of ~~1.15%~~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 elect to lengthen the maturing borrowings’ terms at a higher cost for liquidity and asset/liability management purposes. Transaction account growth helps to control such factors and 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, offset mismatches in various asset maturities and manage liquidity. ~~CDARS~~^®CDARS® and ~~ICS~~^®ICS® deposits also may be utilized for similar purposes for certain customers seeking higher-yielding instruments or maintaining deposit levels below 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 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;~~

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

~~extending FHLB short-term maturing 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

~~adjusting the size, mix or duration of the investment portfolio as part of liquidity and balance sheet management strategies.~~
•
adjusting the size, mix or duration of the investment portfolio as part of 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 March 31, 2019, the market value of tangible equity as a percent of base in a 200 basis point rising rate environment indicates a decrease of 4.7%, compared to an increase of 10.8% at December 31, 2018. In a 200 basis point falling rate environment at March 31, 2019, the model indicates a decrease of 1.3%, compared to a decrease of 2.3% as of December 31, 2018. In a 100 basis point rising rate environment at March 31, 2019, the model indicates a decrease of 1.7%, compared to a decrease of 4.8% at December 31, 2018. In a 100 basis point falling rate environment, the model indicates an increase of 1.0% at March 31, 2019, as compared to an increase of 2.7% at December 31, 2018. 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 ~~March 31,~~June 30, 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

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 ~~March 31,~~June 30, 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 ~~March 31,~~June 30, 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 December 31, 2018								1,092,535
January 1, 2019 to January 31, 2019
Open market repurchases		—		—		—		1,092,535
Other transactions (1)		23,625	$	38.13		N/A		N/A
February 1, 2019 to February 28, 2019
Open market repurchases		—		—		—		1,092,535
Other transactions (1)		7,564	$	41.46		N/A		N/A
March 1, 2019 to March 31, 2019
April 1, 2019 to April 30, 2019
Open market repurchases		—		—		—		1,092,535		—		—		—		1,092,535
Other transactions (1)		1,622	$	40.25		N/A		N/A		20,455	$	41.08	N/A		N/A

First Quarter 2019
May 1, 2019 to May 31, 2019
Open market repurchases		—		—		—		1,092,535		—		—		—		1,092,535
Other transactions (1)		32,811	$	39.00		N/A		N/A		1,559	$	39.15	N/A		N/A

June 1, 2019 to June 30, 2019
Open market repurchases										—		—		—		1,092,535
Other repurchases (2)										15,755	$	37.42		15,755		1,076,780
Other transactions (1)										4,336		36.82	N/A		N/A
Second Quarter 2019
Open market repurchases										—		—		—		1,092,535
Other repurchases (2)										15,755	$	37.42		15,755		1,076,780
Other transactions (1)										26,350		40.27	N/A		N/A
Total		32,811	$	39.00		—		1,092,535		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.

N/A – Not applicable

ITEM 6. EXHIBITS

2.1		Agreement and Plan of Merger, dated as of July 23, 2019, by and between WesBanco, Inc., WesBanco Bank, Inc., Old Line Bancshares, Inc. and Old Line Bank, Inc. (incorporated by reference to Exhibit 2.1 to the Form 8-K filed by the registrant with the Securities and Exchange Commission on July 23, 2019).
~~31.1~~
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 ~~March 31,~~June 30, 2019, formatted in ~~XBRL (Extensible~~iXBRL (Inline Extensible Business Reporting Language): (i) the Consolidated Balance Sheets at ~~March 31,~~June 30, 2019 and December 31, 2018, (ii) the Consolidated Statements of Comprehensive Income for the three and six months ended ~~March 31,~~June 30, 2019 and 2018, (iii) the Consolidated Statements of Changes in Stockholders’ Equity for the three and six months ended ~~March 31,~~June 30, 2019 and 2018, (iv) the Consolidated Statements of Cash Flows for the ~~three~~six months ended ~~March 31,~~June 30, 2019 and 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: ~~May 1,~~July 31, 2019		/s/ Todd F. Clossin
		Todd F. Clossin
		President and Chief Executive Officer (Principal Executive Officer)

Date: ~~May 1,~~July 31, 2019		/s/ Robert H. Young
		Robert H. Young
		Executive Vice President and Chief Financial Officer
	(Principal Financial and Accounting Officer)