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

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

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-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, a non-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 Rule 12b-2 of the Exchange Act.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined by Rule 12b-2 of the Exchange Act). Yes ☐ No ☑

As of April ~~28, 2021,~~27, 2022, there were ~~67,315,896~~60,274,414 shares of Wesbanco, Inc. common stock, $2.0833 par value, outstanding.

NOTE 3. SECURITIES

The following table presents the fair value and amortized cost of available-for-sale and held-to-maturity debt securities:


	March 31, 2022									December 31, 2021
(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. Government sponsored entities and agencies	$	253,475	$	549	$	(13,527	)	$	240,497	$	236,096	$	3,922	$	(3,040	)	$	236,978
Residential mortgage-backed securities and collateralized mortgage obligations of government sponsored entities and agencies		2,289,780		1,777		(132,103	)		2,159,454		2,301,170		16,489		(32,446	)		2,285,213
Commercial mortgage-backed securities and collateralized mortgage obligations of government sponsored entities and agencies		397,233		500		(3,644	)		394,089		364,486		4,252		(1,245	)		367,493
Obligations of states and political subdivisions		100,029		1,310		(1,066	)		100,273		101,003		5,372		(35	)		106,340
Corporate debt securities		16,943		195		(78	)		17,060		16,940		507		(9	)		17,438
Total available-for-sale debt securities	$	3,057,460	$	4,331	$	(150,418	)	$	2,911,373	$	3,019,695	$	30,542	$	(36,775	)	$	3,013,462
Held-to-maturity debt securities
U.S. Government sponsored entities and agencies	$	5,731	$	8	$	(233	)	$	5,506	$	5,944	$	72	$	(8	)	$	6,008
Residential mortgage-backed securities and collateralized mortgage obligations of government sponsored entities and agencies		53,989		114		(1,335	)		52,768		58,147		1,409		(16	)		59,540
Obligations of states and political subdivisions		1,067,214		5,719		(68,912	)		1,004,021		907,649		23,854		(3,500	)		928,003
Corporate debt securities		30,268		430		—			30,698		33,083		1,818		—			34,901
Total held-to-maturity debt securities (1)	$	1,157,202	$	6,271	$	(70,480	)	$	1,092,993	$	1,004,823	$	27,153	$	(3,524	)	$	1,028,452
Total debt securities	$	4,214,662	$	10,602	$	(220,898	)	$	4,004,366	$	4,024,518	$	57,695	$	(40,299	)	$	4,041,914

March 31, 2021

December 31, 2020

(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

$
29,986

$
11

$
—

$
29,997

$
39,975

$
7

$
—

$
39,982

U.S. Government sponsored entities and agencies

174,472

4,564

(2,706
)

176,330

204,109

7,715

(142
)

211,682

Residential mortgage-backed securities and collateralized mortgage obligations of government sponsored entities and agencies

2,123,853

30,901

(13,961
)

2,140,793

1,230,106

35,979

(1,348
)

1,264,737

Commercial mortgage-backed securities and collateralized mortgage obligations of government sponsored entities and agencies

284,440

7,962

(721
)

291,681

308,903

11,464

(269
)

320,098

Obligations of states and political subdivisions

105,778

6,056

(36
)

111,798

108,602

7,160

—

115,762

Corporate debt securities

23,953

660

—

24,613

24,963

912

—

25,875

Total available-for-sale debt securities

$
2,742,482

$
50,154

$
(17,424
)

$
2,775,212

$
1,916,658

$
63,237

$
(1,759
)

$
1,978,136

Held-to-maturity debt securities

U.S. Government sponsored entities and agencies

$
7,611

$
106

$
—

$
7,717

$
7,779

$
265

$
—

$
8,044

Residential mortgage-backed securities and collateralized mortgage obligations of government sponsored entities and agencies

80,376

2,738

(5
)

83,109

89,151

3,251

—

92,402

Obligations of states and political subdivisions

692,616

24,501

(3,811
)

713,306

601,128

30,173

(59
)

631,242

Corporate debt securities

33,137

2,603

—

35,740

33,154

3,341

—

36,495

Total held-to-maturity debt securities

$
813,740

$
29,948

$
(3,816
)

$
839,872

$
731,212

$
37,030

$
(59
)

$
768,183

Total debt securities

$
3,556,222

$
80,102

$
(21,240
)

$
3,615,084

$
2,647,870

$
100,267

$
(1,818
)

$
2,746,319

(1)

Total held-to-maturity debt securities are presented on the balance sheet net of their allowance for credit losses totaling $0.3 million at March 31, 2022 and December 31, 2021, respectively.

~~(1)~~

~~Total held-to-maturity debt securities are presented on the balance sheet net of their allowance for credit losses totaling $0.3 million at March 31, 2021 and December 31, 2020.~~

At March 31, ~~2021~~2022 and December 31, ~~2020,~~2021, there were 0 holdings of any one issuer, other than U.S. government sponsored entities and its agencies, in an amount greater than ~~10%~~10% of Wesbanco’s shareholders’ equity. Equity securities, of which ~~$10.1~~$10.0 million consist of investments in various mutual funds held in grantor trusts formed in connection with the Company’s deferred compensation plan, are recorded at fair value, and totaled ~~$13.1~~$12.8 million and ~~$13.0~~$13.5 million at March 31, ~~2021~~2022 and December 31, ~~2020,~~2021, respectively.

The following table presents the amortized cost and fair value of available-for-sale and held-to-maturity debt securities by contractual maturity date at March 31, ~~2021.~~2022. Actual maturities will differ from contractual maturities because borrowers may have the right to call or prepay debt obligations with or without prepayment penalties. Mortgage-backed securities and collateralized mortgage obligations are classified in the table below based on their contractual maturity date; however, regular principal payments and prepayments of principal are received on a monthly basis.


(unaudited, in thousands)	Amortized Cost		Fair Value		Amortized Cost		Fair Value
Available-for-sale debt securities
Less than one year	$	47,465	$	47,583	$	13,971	$	14,020
1-5 years		145,739		152,800		168,985		169,008
5-10 years		358,854		366,119		444,587		437,643
Over 10 years		2,190,424		2,208,710		2,429,917		2,290,702
Total available-for-sale debt securities	$	2,742,482	$	2,775,212	$	3,057,460	$	2,911,373
Held-to-maturity debt securities
Less than one year	$	11,759	$	11,872	$	24,053	$	24,232
1-5 years		133,053		140,315		115,863		117,485
5-10 years		228,148		237,907		277,300		276,045
Over 10 years		440,780		449,778		739,986		675,231
Total held-to-maturity debt securities	$	813,740	$	839,872	$	1,157,202	$	1,092,993
Total debt securities	$	3,556,222	$	3,615,084	$	4,214,662	$	4,004,366

Securities with an aggregate fair value of ~~$1.8~~$2.1 billion at March 31, ~~2021~~2022 and December 31, ~~2020, respectively,~~2021 were pledged as security for public and trust funds, and securities sold under agreements to repurchase. ~~Proceeds~~There were 0 proceeds from the sale of available-for-sale securities ~~were $0 million and $222.7 million~~ for the three months ended March 31, ~~2021~~2022 and ~~2020, respectively.~~2021. Net unrealized ~~gains~~losses on available-for-sale securities included in accumulated other comprehensive income, net of tax, as of March 31, ~~2021~~2022 and December 31, ~~2020~~2021 were ~~$24.8~~$111.0 million and ~~$46.9~~$4.7 million, respectively.

The following table presents the gross realized gains and losses on sales and calls of available-for-sale and held-to-maturity debt securities, as well as gains and losses on equity securities from both sales and market adjustments, for the three months ended March 31, ~~2021~~2022 and ~~2020,~~2021, respectively. All gains and losses presented in the table below are included in the net securities (losses) gains ~~(losses)~~ line item of the income statement. For those equity securities relating to the key officer and director deferred compensation plan, the corresponding change in the obligation to the participant is recognized in employee benefits expense.


	For the Three Months Ended March 31,						For the Three Months Ended March 31,
(unaudited, in thousands)	2021			2020			2022			2021
Debt securities:
Gross realized gains	$	140		$	3,335		$	31		$	140
Gross realized losses		(39	)		(1,031	)		(2	)		(39	)
Net gains on debt securities	$	101		$	2,304		$	29		$	101
Equity securities:
Net unrealized gains (losses) recognized on securities still held	$	178		$	(805	)
Net realized losses recognized on securities sold		—			(8	)
Net gains (losses) on equity securities	$	178		$	(813	)
Net securities gains	$	279		$	1,491
Net unrealized (losses) gains recognized on securities still held							$	(679	)	$	178
Net realized gains (losses) recognized on securities sold								—			—
Net (losses) gains on equity securities							$	(679	)	$	178
Net securities (losses) gains							$	(650	)	$	279

The corporate and municipal bonds in Wesbanco’s held-to-maturity debt portfolio are analyzed quarterly to determine if an allowance for current expected credit losses is warranted. Wesbanco uses a database of historical financials of all corporate and municipal issuers and actual historic default and recovery rates on rated and non-rated transactions to estimate expected credit losses on an individual security basis. The expected credit losses are adjusted quarterly and are recorded in an allowance for expected credit losses on the balance sheet, which is deducted from the amortized cost basis of the held-to-maturity portfolio as a contra asset. The losses are recorded on the income statement in the provision for credit losses. Accrued interest receivable on held-to-maturity securities, which was ~~$6.3~~$8.3 million and ~~$5.3~~$7.0 million as of March 31, ~~2021~~2022 and December 31, ~~2020,~~2021, respectively, is excluded from the estimate of credit losses. Held-to-maturity investments in U.S. Government sponsored entities and agencies as well as mortgage-backed securities and collateralized mortgage obligations, which are all either issued by a direct governmental entity or a government-sponsored entity, have no historical evidence supporting expected credit losses; therefore, Wesbanco has estimated these losses at 0, and will monitor this assumption in the future for any ~~economical~~economic or governmental policies that could affect this assumption.

The following table provides a roll-forward of the allowance for credit losses on held-to-maturity securities for the three months ended March 31, ~~2021~~2022 and ~~March 31, 2020, respectively:~~2021:


	Allowance for Credit Losses By Category
	For the Three Months Ended March 31, 2022 and 2021
			Residential mortgage
			-backed
			securities and
			collateralized
			mortgage obligations		Obligations of
	U.S. Government		of government		state and			Corporate
	sponsored		sponsored entities		political			debt
(unaudited, in thousands)	entities and agencies		and agencies		subdivisions			Securities			Total
Balance at December 31, 2021	$	—	$	—	$	174		$	94		$	268
Current period provision		—		—		(14	)		31			17
Write-offs		—		—		—			—			—
Recoveries		—		—		—			—			—
Balance at March 31, 2022	$	—	$	—	$	160		$	125		$	285
.
Balance at December 31, 2020	$	—	$	—	$	130		$	196		$	326
Current period provision		—		—		(12	)		(24	)		(36	)
Write-offs		—		—		—			—			—
Recoveries		—		—		—			—			—
Balance at March 31, 2021	$	—	$	—	$	118		$	172		$	290

Allowance for Credit Losses By Category

For the Three Months Ended March 31, 2021 and 2020

Residential mortgage

-backed

securities and

collateralized

mortgage obligations

Obligations of

U.S. Government

of government

state and

Corporate

sponsored

sponsored entities

political

debt

(unaudited, in thousands)
entities and agencies

and agencies

subdivisions

Securities

Total

Balance at December 31, 2020
$
—

$
—

$
130

$
196

$
326

Current period provision

—

—

(12
)

(24
)

(36
)
Write-offs

—

—

—

—

—

Recoveries

—

—

—

—

—

Balance at March 31, 2021
$
—

$
—

$
118

$
172

$
290

.

Balance at December 31, 2019
$
—

$
—

$
—

$
—

$
—

Impact of adopting ASC 326

—

—

96

133

229

Current period provision

—

—

2

5

7

Write-offs

—

—

—

—

—

Recoveries

—

—

—

—

—

Balance at March 31, 2020
$
—

$
—

$
98

$
138

$
236

The following tables provide information on unrealized losses on available-for-sale debt securities that have been in an unrealized loss position for less than twelve months and twelve months or more, for which an allowance for credit losses has not been recorded, as of March 31, ~~2021~~2022 and December 31, ~~2020,~~2021, respectively:


	March 31, 2021																					March 31, 2022
	Less than 12 months							12 months or more							Total							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		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	$	56,270	$	(2,706	)		6	$	—	$	—			—	$	56,270	$	(2,706	)		6	$	152,701	$	(8,450	)		23	$	43,624	$	(5,077	)		5	$	196,325	$	(13,527	)		28
Residential mortgage-backed securities and collateralized mortgage obligations of government sponsored entities and agencies		973,961		(13,879	)		98		3,531		(82	)		4		977,492		(13,961	)		102		1,579,619		(91,718	)		359		410,877		(40,385	)		49		1,990,496		(132,103	)		408
Commercial mortgage-backed securities and collateralized mortgage obligations of government sponsored entities and agencies		94,186		(721	)		9		—		—			—		94,186		(721	)		9		264,064		(2,329	)		47		74,408		(1,315	)		8		338,472		(3,644	)		55
Obligations of state and political subdivisions		3,767		(36	)		1		—		—			—		3,767		(36	)		1		19,150		(1,066	)		27		—		—			—		19,150		(1,066	)		27
Corporate debt and other securities																							7,922		(78	)		5		—		—			—		7,922		(78	)		5
Total	$	1,128,184	$	(17,342	)		114	$	3,531	$	(82	)		4	$	1,131,715	$	(17,424	)	$	118	$	2,023,456	$	(103,641	)		461	$	528,909	$	(46,777	)		62	$	2,552,365	$	(150,418	)		523


	December 31, 2021
	Less than 12 months							12 months or more							Total
(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	$	114,486	$	(1,865	)		12	$	32,688	$	(1,175	)		4	$	147,174	$	(3,040	)		16
Residential mortgage-backed securities and collateralized mortgage obligations of government sponsored entities and agencies		1,568,138		(29,060	)		143		141,681		(3,386	)		23		1,709,819		(32,446	)		166
Commercial mortgage-backed securities and collateralized mortgage obligations of government sponsored entities and agencies		131,970		(579	)		25		78,356		(666	)		8		210,326		(1,245	)		33
Obligations of states and political subdivisions		4,307		(35	)		2		—		—			—		4,307		(35	)		2
Corporate debt securities		6,990		(9	)		5		—		—			—		6,990		(9	)		5
Total	$	1,825,891	$	(31,548	)		187	$	252,725	$	(5,227	)		35	$	2,078,616	$	(36,775	)		222

December 31, 2020

Less than 12 months

12 months or more

Total

(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

$
18,308

$
(142
)

2

$
—

$
—

—

$
18,308

$
(142
)

2

Residential mortgage-backed securities and collateralized mortgage obligations of government sponsored entities and agencies

224,448

(1,227
)

41

4,136

(121
)

3

228,584

(1,348
)

44

Commercial mortgage-backed securities and collateralized mortgage obligations of government sponsored entities and agencies

97,266

(269
)

10

—

—

—

97,266

(269
)

10

Obligations of states and political subdivisions

—

—

—

—

—

—

—

—

—

Total

$
340,022

$
(1,638
)

53

$
4,136

$
(121
)

3

$
344,158

$
(1,759
)

56

Unrealized losses on debt securities in the table above ~~represents~~represent temporary fluctuations resulting from changes in market rates in relation to fixed yields. Unrealized losses in the available-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; therefore, management believes the unrealized losses detailed above do not require an allowance for credit losses relating to these securities to be 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 Federal Home Loan Bank (“FHLB”) of Pittsburgh ~~and Indianapolis~~ stock totaling ~~$29.3~~$13.6 million and ~~$34.0~~$15.9 million at March 31, ~~2021~~2022 and December 31, ~~2020,~~2021, 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 4. 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 ~~income was $13.3~~fee costs were $6.8 million and ~~$6.2~~$3.3 million at March 31, ~~2021~~2022 and December 31, ~~2020,~~2021, respectively. At March 31, ~~2021~~2022 and December 31, ~~2020,~~2021, respectively, the balance also included ~~$21.4~~$2.9 million and ~~$13.8~~$6.1 million of net deferred fee income from ~~PPP~~SBA Payroll Protection Program (“PPP”) loans. The un-accreted discount on purchased loans from acquisitions was ~~$35.9~~$23.4 million at March 31, ~~2021~~2022 and ~~$39.4~~$25.9 million at December 31, ~~2020.~~2021.


	March 31,		December 31,		March 31,		December 31,
(unaudited, in thousands)	2021		2020		2022		2021
Commercial real estate:
Land and construction	$	642,017	$	668,277	$	857,869	$	833,880
Improved property		5,070,725		5,037,115		4,722,213		4,705,088
Total commercial real estate		5,712,742		5,705,392		5,580,082		5,538,968
Commercial and industrial		1,598,921		1,681,182		1,436,543		1,427,645
Commercial and industrial - PPP		823,814		726,256		76,535		162,675
Residential real estate		1,644,422		1,720,961		1,767,064		1,721,378
Home equity		634,018		646,387		592,872		605,682
Consumer		289,395		309,055		280,176		277,130
Total portfolio loans		10,703,312		10,789,233		9,733,272		9,733,478
Loans held for sale		153,520		168,378		15,959		25,277
Total loans	$	10,856,832	$	10,957,611	$	9,749,231	$	9,758,755

The allowance for credit losses under the current expected credit losses methodology (“CECL”) is calculated utilizing the PDprobability of default (“PD”) / ~~LGD,~~loss given default (“LGD”), which is then discounted to net present value. PD is the probability the asset will default within a given time frame and LGD is the percentage of the asset not expected to be collected due to default. The primary macroeconomic drivers of the quantitative model include forecasts of national unemployment and interest rates, as well as modeling adjustments for changes in prepayment speeds, loan risk grades, portfolio mix, concentrations and loan growth. For the calculation as of March 31, ~~2021,~~2022, the one-year forecast was based upon a blended rate from two nationally-recognized published economic forecasts through March 31, ~~2021,~~2022, and is primarily driven by the national unemployment and interest rate spread forecasts. Wesbanco’s blended forecast of national unemployment at quarter end was projected to peak at ~~5.8%~~3.7% in the ~~second~~first quarter, and subsequently decrease to an average of ~~4.8%~~3.5% over the remainder of the forecast period. The calculation utilized a one-year reversion period back to the Company’s historical loss rate by loan classification. Included in the qualitative factors were COVID-19 pandemic factors related to the transient credit risk not covered by the traditional allowance process, adjusted to Wesbanco’s regional footprint, deferred interest on modified loans, and hospitality industry concentration. As of March 31, 2022, accrued interest receivable for loans was $45.0 million. Wesbanco made an accounting policy election to exclude accrued interest from the measurement of the allowance for credit losses because the Company has a robust policy in place to reverse or write-off accrued interest when loans are placed on non-accrual. However, Wesbanco does have a ~~$0.2~~$0.1 million reserve on the accrued interest related to loan modifications allowed under the CARES Act due to the timing and nature of these modifications. As of March 31, ~~2021,~~2022, accrued interest receivable ~~for loans was $53.5 million, including $24.9 million~~ related to COVID-19 loan modifications as permitted under the CARES ~~Act.~~Act was $20.8 million.

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
	For the Three Months Ended March 31, 2022 and 2021
(unaudited, in thousands)	Commercial Real Estate - Land and Construction			Commercial Real Estate- Improved Property			Commercial & Industrial			Residential Real Estate			Home Equity			Consumer			Deposit Overdrafts			Total
Balance at December 31, 2021
Allowance for credit losses - loans	$	7,310		$	65,355		$	26,875		$	15,401		$	724		$	3,737		$	2,220		$	121,622
Allowance for credit losses - loan commitments		4,180			201			1,497			1,576			49			272			0			7,775
Total beginning allowance for credit losses - loans and loan commitments		11,490			65,556			28,372			16,977			773			4,009			2,220			129,397
Provision for credit losses:
Provision for loan losses		243			(469	)		(1,468	)		(1,737	)		(102	)		69			(266	)		(3,730	)
Provision for loan commitments		751			119			(827	)		164			9			59			0			275
Total provision for credit losses - loans and loan commitments		994			(350	)		(2,295	)		(1,573	)		(93	)		128			(266	)		(3,455	)
Charge-offs		0			(137	)		(208	)		(142	)		(86	)		(787	)		(435	)		(1,795	)
Recoveries		25			260			336			192			139			727			89			1,768
Net (charge-offs) recoveries		25			123			128			50			53			(60	)		(346	)		(27	)
Balance at March 31, 2022
Allowance for credit losses - loans		7,578			65,009			25,535			13,714			675			3,746			1,608			117,865
Allowance for credit losses - loan commitments		4,931			320			670			1,740			58			331			0			8,050
Total ending allowance for credit losses - loans and loan commitments	$	12,509		$	65,329		$	26,205		$	15,454		$	733		$	4,077		$	1,608		$	125,915

Balance at December 31, 2020
Allowance for credit losses - loans	$	10,841		$	110,652		$	37,850		$	17,851		$	1,487		$	6,507		$	639		$	185,827
Allowance for credit losses - loan commitments		6,508			712			1,275			955			45			19			—			9,514
Total beginning allowance for credit losses - loans and loan commitments		17,349			111,364			39,125			18,806			1,532			6,526			639			195,341
Provision for credit losses:
Provision for loan losses		(3,538	)		(11,420	)		(4,256	)		(4,177	)		(394	)		(1,510	)		156			(25,139	)
Provision for loan commitments		(2,508	)		(504	)		308			(86	)		5			2			—			(2,783	)
Total provision for credit losses - loans and loan commitments		(6,046	)		(11,924	)		(3,948	)		(4,263	)		(389	)		(1,508	)		156			(27,922	)
Charge-offs		(18	)		(19	)		(750	)		(371	)		(174	)		(927	)		(201	)		(2,460	)
Recoveries		55			528			440			135			79			462			113			1,812
Net (charge-offs) recoveries		37			509			(310	)		(236	)		(95	)		(465	)		(88	)		(648	)
Balance at March 31, 2021
Allowance for credit losses - loans		7,340			99,741			33,284			13,438			998			4,532			707			160,040
Allowance for credit losses - loan commitments		4,000			208			1,583			869			50			21			0			6,731
Total ending allowance for credit losses - loans and loan commitments	$	11,340		$	99,949		$	34,867		$	14,307		$	1,048		$	4,553		$	707		$	166,771

The following tables present the allowance for credit losses and recorded investments in loans by category, as of each period-end:

Commercial loan risk grades are determined based on an evaluation of the relevant characteristics of each loan, assigned at inception 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 sufficiency, reliability and sustainability of the primary source of repayment and overall financial strength of the borrower. The rating system more heavily weights the debt service coverage, leverage and loan to value factors to derive the risk grade. Other factors that are considered at a lesser weighting include management, industry or property type risks, payment history, collateral or guarantees.

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 of pre-sales for residential housing construction or pre-leases for commercial investment property. The risk grade assigned to commercial investment property loans is based primarily on the adequacy of the net operating income generated by the property to service the debt (“debt service coverage”), the loan to appraised value, the type, quality, industry and mix of tenants, and the terms of leases. The risk grade assigned to owner-occupied commercial real estate is based primarily on global debt service coverage and the leverage of the business, but may also consider the industry in which the business operates, the business’ specific competitive advantages or disadvantages, collateral margins and the quality and experience of management.

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. Primary factors that are considered in risk rating C&I loans include debt service coverage and leverage. Other factors including operating trends, collateral coverage along with management experience are also considered.

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 loans, considered as compromised, have potential weaknesses that deserve management's close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the asset or in the bank's credit position at some future date. Criticized loans are not adversely classified by the banking regulators and do not expose the bank to sufficient risk to warrant adverse classification.

Classified loans, considered as substandard and doubtful, are equivalent to the classifications used by banking regulators. Substandard loans are inadequately protected by the current sound worth and paying capacity of the obligor or of the collateral pledged, if any. Loans so classified must have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the bank will sustain some loss if the deficiencies are not corrected. These loans may or may not be reported as non-accrual. Doubtful loans have all the weaknesses inherent in those classified substandard, with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently known facts, conditions, and values, highly questionable and improbable. These loans are reported as non-accrual.

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 ~~$29.4~~$26.8 million at March 31, ~~2021~~2022 and ~~$27.7~~$30.2 million at December 31, ~~2020,~~2021, of which ~~$5.5~~$5.5 million and ~~$4.1~~$7.4 million were accruing, for each period, respectively. ~~The aggregate amount of residential real estate, home equity and consumer~~These loans ~~classified as substandard, as well as $28.3~~are not included in the tables above. In addition, $21.3 million and ~~$28.7~~$21.7 million of unfunded commercial loan commitments are also not included in the tables above at March 31, ~~2021~~2022 and December 31, ~~2020,~~2021, respectively.

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

As of March 31, ~~2021~~2022 and December 31, ~~2020,~~2021, there were 0 TDRs greater than ~~$1.0~~$1.0 million. The concessions granted in the majority of loans reported as accruing and non-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 six ~~months.~~months. Wesbanco had unfunded commitments to debtors whose loans were classified as nonperforming of ~~$0.9~~$0.0 million and $0.1 million as of March 31, ~~2021~~2022 and December 31, ~~2020.~~2021, respectively.

~~The following table summarizes~~There have been 0 TDRs which defaulted (defined as past due 90 days) during the three months ended March 31, ~~2021~~2022 and ~~2020,~~2021, respectively, that were restructured within the last twelve months prior to March 31, 2022 and 2021, ~~and 2020, respectively:~~

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

Section 4013 of the CARES Act allows financial institutions the option to temporarily suspend certain requirements under ~~U.S.~~ GAAP related to TDRs for a limited period of time during the COVID-19 pandemic. These customers must meet certain criteria, such as they were in good standing and not more than 30 days past due either as of December 31, 2019, or as of the implementation of the modification program under the Interagency Statement, as well as other requirements noted in the regulatory agencies’ revised statement. Based on this guidance, Wesbanco does not classify the COVID-19 loan modifications as TDRs, nor are the customers considered past due with regard to their delayed payments. Upon exiting the loan modification deferral program, the measurement of loan delinquency will resume where it left off upon entry into the program. Under the CARES Act, Wesbanco has modified approximately 3,553 loans totaling ~~$2.2~~$2.2 billion, of which ~~$0.2 billion~~$51.5 million remain in their deferral period as of March 31, ~~2021.~~ 2022. Wesbanco originally offered three to six months of deferred payments to commercial and retail customers impacted by the COVID-19 pandemic depending on the type of loan and the industry for commercial loans. In the fourth quarter of 2020, Wesbanco offered up to an additional twelve months of deferred payments to certain commercial loan customers, predominantly in the hospitality industry, based on specific criteria related to the borrower, the underlying property and the potential for guarantors /or co-borrowers. On December 27, 2020, the Economic Aid to Hard-Hit Small Businesses, Nonprofits and Venues Act (“Economic Aid Act”) was signed into law and among other things, extended the relief granted by the CARES Act for TDRs, initially slated to end on December 31, 2020, by one year to December 31, 2021.

The following tables summarize amortized cost basis loan balances by year of origination and credit quality indicator:


		Loans As of March 31, 2021																			Loans As of March 31, 2022
		Amortized Cost Basis by Origination Year																			Amortized Cost Basis by Origination Year
(unaudited, in thousands)		2021		2020		2019		2018		2017		Prior		Revolving Loans Amortized Cost Basis		Revolving Loans Converted to Term		Total			2022		2021		2020		2019		2018		Prior		Revolving Loans Amortized Cost Basis		Revolving Loans Converted to Term		Total
Commercial real estate: land and construction	Commercial real estate: land and construction																			Commercial real estate: land and construction
Risk rating:
Pass		$	30,840	$	164,939	$	296,600	$	49,749	$	27,064	$	43,143	$	22,500	$	—	$	634,835		$	17,320	$	143,081	$	220,805	$	179,682	$	112,712	$	55,329	$	54,985	$	63,611	$	847,525
Criticized - compromised			—		875		—		39		228		3,618		600		—		5,360			—		266		409		—		32		214		674		213		1,808
Classified - substandard			—		—		—		74		40		1,708		—		—		1,822			—		82		5,894		—		73		1,231		—		1,256		8,536
Classified - doubtful			—		—		—		—		—		—		—		—		—			—		—		—		—		—		—		—		—		—
Total		$	30,840	$	165,814	$	296,600	$	49,862	$	27,332	$	48,469	$	23,100	$	—	$	642,017		$	17,320	$	143,429	$	227,108	$	179,682	$	112,817	$	56,774	$	55,659	$	65,080	$	857,869

Commercial real estate: improved property	Commercial real estate: improved property																			Commercial real estate: improved property
Risk rating:
Pass		$	156,789	$	787,296	$	690,398	$	639,915	$	472,801	$	1,864,909	$	67,149	$	—	$	4,679,257		$	217,572	$	684,338	$	645,602	$	564,678	$	386,418	$	1,832,877	$	76,323	$	16,532	$	4,424,340
Criticized - compromised			—		1,892		53,807		17,473		53,576		150,704		20,349		—		297,801			192		1,529		15,432		46,049		11,836		130,510		809		144		206,501
Classified - substandard			—		222		28,603		1,860		7,171		55,811		—		—		93,667			—		—		1,800		13,349		11,526		64,663		34		—		91,372
Classified - doubtful			—		—		—		—		—		—		—		—		—			—		—		—		—		—		—		—		—		—
Total		$	156,789	$	789,410	$	772,808	$	659,248	$	533,548	$	2,071,424	$	87,498	$	—	$	5,070,725		$	217,764	$	685,867	$	662,834	$	624,076	$	409,780	$	2,028,050	$	77,166	$	16,676	$	4,722,213

Commercial and industrial	Commercial and industrial																			Commercial and industrial
Risk rating:
Pass		$	401,323	$	685,632	$	232,322	$	185,484	$	135,856	$	320,788	$	404,023	$	130	$	2,365,558		$	68,510	$	287,195	$	144,757	$	94,290	$	129,505	$	296,576	$	431,270	$	11,212	$	1,463,315
Criticized - compromised			26		3,290		2,746		4,236		2,651		10,841		13,992		—		37,782			318		4,668		1,941		1,786		2,042		3,171		4,475		7,433		25,834
Classified - substandard			985		—		2,518		1,668		3,567		5,179		5,478		—		19,395			—		45		158		10,774		577		3,338		5,184		3,853		23,929
Classified - doubtful			—		—		—		—		—		—		—		—		—			—		—		—		—		—		—		—		—		—
Total		$	402,334	$	688,922	$	237,586	$	191,388	$	142,074	$	336,808	$	423,493	$	130	$	2,422,735		$	68,828	$	291,908	$	146,856	$	106,850	$	132,124	$	303,085	$	440,929	$	22,498	$	1,513,078

Residential real estate	Residential real estate																			Residential real estate
Loan delinquency:
Current		$	66,997	$	392,577	$	209,234	$	130,435	$	94,237	$	731,848	$	—	$	—	$	1,625,328		$	102,025	$	616,206	$	249,313	$	107,883	$	59,865	$	554,845	$	—	$	61,758	$	1,751,895
30-59 days past due			—		—		—		79		—		2,634		—		—		2,713			—		—		—		—		121		2,970		—		—		3,091
60-89 days past due			—		—		—		272		113		1,204		—		—		1,589			—		—		—		515		—		2,115		—		—		2,630
90 days or more past due			—		—		379		784		761		12,868		—		—		14,792			—		—		—		66		45		9,288		—		49		9,448
Total		$	66,997	$	392,577	$	209,613	$	131,570	$	95,111	$	748,554	$	—	$	—	$	1,644,422		$	102,025	$	616,206	$	249,313	$	108,464	$	60,031	$	569,218	$	—	$	61,807	$	1,767,064

Home equity	Home equity																			Home equity
Loan delinquency:
Current		$	4,724	$	15,055	$	3,290	$	2,959	$	857	$	16,995	$	573,653	$	11,240	$	628,773		$	11,418	$	459	$	634	$	621	$	869	$	18,485	$	553,083	$	1,022	$	586,591
30-59 days past due			—		—		—		—		—		400		783		30		1,213			—		—		—		26		—		800		1,104		24		1,954
60-89 days past due			—		—		—		—		—		121		76		—		197			—		29		—		81		14		252		—		61		437
90 days or more past due			—		—		—		19		150		1,565		1,355		746		3,835			—		—		35		34		204		3,199		—		418		3,890
Total		$	4,724	$	15,055	$	3,290	$	2,978	$	1,007	$	19,081	$	575,867	$	12,016	$	634,018		$	11,418	$	488	$	669	$	762	$	1,087	$	22,736	$	554,187	$	1,525	$	592,872

Consumer	Consumer																			Consumer
Loan delinquency:
Current		$	18,121	$	65,802	$	79,045	$	33,586	$	18,773	$	51,313	$	20,589	$	166	$	287,395		$	23,210	$	53,593	$	38,442	$	42,643	$	16,104	$	37,934	$	65,114	$	173	$	277,213
30-59 days past due			37		444		413		68		114		352		—		—		1,428			—		613		208		197		45		305		18		—		1,386
60-89 days past due			—		45		50		31		64		148		2		—		340			—		266		151		154		45		268		—		—		884
90 days or more past due			—		8		—		54		29		125		16		—		232			—		222		99		124		44		200		4		—		693
Total		$	18,158	$	66,299	$	79,508	$	33,739	$	18,980	$	51,938	$	20,607	$	166	$	289,395		$	23,210	$	54,694	$	38,900	$	43,118	$	16,238	$	38,707	$	65,136	$	173	$	280,176


	Loans As of December 31, 2021
	Amortized Cost Basis by Origination Year
(unaudited, in thousands)	2021		2020		2019		2018		2017		Prior		Revolving Loans Amortized Cost Basis		Revolving Loans Converted to Term		Total
Commercial real estate: land and construction
Risk rating:
Pass	$	135,179	$	217,389	$	198,974	$	117,157	$	27,186	$	29,696	$	35,059	$	62,676	$	823,316
Criticized - compromised		85		6,236		—		33		—		219		856		526		7,955
Classified - substandard		—		73		—		—		—		1,280		—		1,256		2,609
Classified - doubtful		—		—		—		—		—		—		—		—		—
Total	$	135,264	$	223,698	$	198,974	$	117,190	$	27,186	$	31,195	$	35,915	$	64,458	$	833,880

Commercial real estate: improved property
Risk rating:
Pass	$	713,697	$	660,856	$	589,674	$	405,689	$	404,241	$	1,539,275	$	58,933	$	28,507	$	4,400,872
Criticized - compromised		7,755		15,195		52,859		17,697		14,490		99,687		1,414		13,733		222,830
Classified - substandard		9,355		2,686		4,855		3,730		11,010		49,667		34		49		81,386
Classified - doubtful		—		—		—		—		—		—		—		—		—
Total	$	730,807	$	678,737	$	647,388	$	427,116	$	429,741	$	1,688,629	$	60,381	$	42,289	$	4,705,088

Commercial and industrial
Risk rating:
Pass	$	406,495	$	159,878	$	99,472	$	136,146	$	89,049	$	223,514	$	409,789	$	16,226	$	1,540,569
Criticized - compromised		590		551		693		2,558		1,645		1,278		5,389		5,029		17,733
Classified - substandard		134		236		18,465		766		2,139		1,419		3,723		5,136		32,018
Classified - doubtful		—		—		—		—		—		—		—		—		—
Total	$	407,219	$	160,665	$	118,630	$	139,470	$	92,833	$	226,211	$	418,901	$	26,391	$	1,590,320

Residential real estate
Loan delinquency:
Current	$	599,244	$	292,653	$	116,147	$	71,253	$	56,917	$	536,444	$	—	$	29,929	$	1,702,587
30-59 days past due		1,127		—		—		69		105		1,030		—		—		2,331
60-89 days past due		563		91		—		271		43		2,286		—		—		3,254
90 days or more past due		1,933		673		895		88		762		8,802		—		53		13,206
Total	$	602,867	$	293,417	$	117,042	$	71,681	$	57,827	$	548,562	$	—	$	29,982	$	1,721,378

Home equity
Loan delinquency:
Current	$	10,076	$	835	$	649	$	379	$	566	$	18,064	$	567,478	$	1,142	$	599,189
30-59 days past due		—		84		45		128		50		628		1,247		58		2,240
60-89 days past due		—		—		132		15		188		267		—		—		602
90 days or more past due		187		88		119		112		234		2,550		—		361		3,651
Total	$	10,263	$	1,007	$	945	$	634	$	1,038	$	21,509	$	568,725	$	1,561	$	605,682

Consumer
Loan delinquency:
Current	$	60,907	$	43,871	$	50,317	$	19,289	$	11,084	$	32,343	$	55,739	$	27	$	273,577
30-59 days past due		435		370		214		136		85		241		51		—		1,532
60-89 days past due		413		375		82		19		33		286		—		—		1,208
90 days or more past due		115		141		222		65		1		265		4		—		813
Total	$	61,870	$	44,757	$	50,835	$	19,509	$	11,203	$	33,135	$	55,794	$	27	$	277,130

Loans As of December 31, 2020

Amortized Cost Basis by Origination Year

(unaudited, in thousands)

2020

2019

2018

2017

2016

Prior

Revolving Loans Amortized Cost Basis

Revolving Loans Converted to Term

Total

Commercial real estate: land and construction

Risk rating:

Pass

$
133,720

$
314,614

$
109,232

$
27,483

$
16,404

$
29,685

$
26,297

$
—

$
657,435

Criticized - compromised

459

—

1,532

233

79

3,778

1,316

—

7,397

Classified - substandard

—

—

403

58

291

2,693

—

—

3,445

Classified - doubtful

—

—

—

—

—

—

—

—

—

Total

$
134,179

$
314,614

$
111,167

$
27,774

$
16,774

$
36,156

$
27,613

$
—

$
668,277

Commercial real estate: improved property

Risk rating:

Pass

$
809,516

$
670,554

$
646,629

$
474,622

$
572,733

$
1,346,552

$
89,120

$
—

$
4,609,726

Criticized - compromised

2,693

67,261

16,793

59,251

42,284

130,247

1,772

—

320,301

Classified - substandard

102

16,366

4,946

11,647

18,460

55,567

—

—

107,088

Classified - doubtful

—

—

—

—

—

—

—

—

—

Total

$
812,311

$
754,181

$
668,368

$
545,520

$
633,477

$
1,532,366

$
90,892

$
—

$
5,037,115

Commercial and industrial

Risk rating:

Pass

$
977,085

$
240,262

$
193,712

$
160,924

$
85,379

$
265,890

$
427,336

$
136

$
2,350,724

Criticized - compromised

453

2,726

4,206

2,795

324

11,640

12,453

—

34,597

Classified - substandard

—

3,817

1,947

3,771

1,603

5,073

5,906

—

22,117

Classified - doubtful

—

—

—

—

—

—

—

—

—

Total

$
977,538

$
246,805

$
199,865

$
167,490

$
87,306

$
282,603

$
445,695

$
136

$
2,407,438

Residential real estate

Loan delinquency:

Current

$
385,541

$
242,770

$
149,603

$
108,090

$
170,967

$
641,665

$
—

$
—

$
1,698,636

30-59 days past due

—

—

320

533

—

1,761

—

—

2,614

60-89 days past due

—

—

823

—

185

4,646

—

—

5,654

90 days or more past due

��
—

483

166

761

819

11,828

—

—

14,057

Total

$
385,541

$
243,253

$
150,912

$
109,384

$
171,971

$
659,900

$
—

$
—

$
1,720,961

Home equity

Loan delinquency:

Current

$
18,191

$
3,611

$
3,334

$
975

$
1,110

$
16,477

$
583,486

$
12,135

$
639,319

30-59 days past due

124

—

34

—

—

882

1,247

127

2,414

60-89 days past due

—

—

—

—

—

14

749

12

775

90 days or more past due

—

—

8

156

88

1,786

1,075

766

3,879

Total

$
18,315

$
3,611

$
3,376

$
1,131

$
1,198

$
19,159

$
586,557

$
13,040

$
646,387

Consumer

Loan delinquency:

Current

$
72,847

$
89,637

$
39,584

$
22,118

$
13,144

$
45,735

$
22,253

$
165

$
305,483

30-59 days past due

481

408

210

311

194

379

15

—

1,998

60-89 days past due

273

147

84

100

163

253

11

—

1,031

90 days or more past due

113

72

73

31

12

242

—

—

543

Total

$
73,714

$
90,264

$
39,951

$
22,560

$
13,513

$
46,609

$
22,279

$
165

$
309,055

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


	March 31,		December 31,		March 31,		December 31,
(unaudited, in thousands)	2021		2020		2022		2021
Other real estate owned	$	375	$	504	$	87	$	—
Repossessed assets		18		45		—		—
Total other real estate owned and repossessed assets	$	393	$	549	$	87	$	—

Residential real estate included in other real estate owned was ~~$0.1~~$0.1 million at March 31, ~~2021~~2022. There were 0 other real estate owned or repossessed asset balances at December 31, 2021. At March 31, 2022 and December 31, ~~2020. At March 31,~~ 2021, ~~and December 31, 2020,~~ formal foreclosure proceedings were in process on residential real estate loans totaling ~~$4.3~~$4.8 million and ~~$4.1~~$4.0 million, respectively. Previously, as a result of provisions of the CARES Act, certain residential real estate loans were temporarily suspended from entering foreclosure proceedings, which included $0.8 million of loans as of December 31, 2021. Since this moratorium had substantially ended as of March 31, 2022, there are currently 0 loans suspended from entering foreclosure proceedings.

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 Wesbanco Bank, Inc.’s (the “Bank”) assets and liabilities are equally distributed but also have similar maturities.

Wesbanco executes interest rate swaps with commercial banking customers to facilitate their respective risk management strategies. Those interest rate swaps are simultaneously hedged by offsetting interest rate swaps that Wesbanco executes with a third party, such 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 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, ~~2021~~2022, and December 31, ~~2020,~~2021, Wesbanco had ~~122~~134 and ~~112, respectively,~~135 customer interest rate swaps with an aggregate notional amount of ~~$711.0~~$726.8 million and ~~$649.9~~$730.6 million, respectively, related to this program. ~~During the three months ended March 31, 2021 and 2020,~~ Wesbanco recognized ~~net gains (losses) of $2.8 million and $(2.8) million, respectively, related to the changes in fair value of these swaps. Additionally, Wesbanco recognized $1.9 million and $2.6 million of~~ income for the related swap fees of $0.2 million and $1.9 million for the three months ended March 31, ~~2021~~2022 and ~~2020, respectively.~~2021.

Risk participation agreements are entered into as financial guarantees of performance on interest rate swap derivatives. The purchased asset or sold liability allows Wesbanco to participate-in (fee received) or participate-out (fee paid) the risk associated with certain derivative positions executed by the borrower byof the lead bank in a loan syndication. As of March 31, ~~2021~~2022 and December 31, ~~2020,~~2021, Wesbanco had 13 ~~and 12, respectively,~~ risk participation-in agreements with an aggregate notional amount of ~~$119.2~~$127.1 million and ~~$101.1~~$128.2 million, respectively. As of March 31, ~~2021~~2022 and December 31, ~~2020,~~2021, Wesbanco had 1 risk participation-out agreement with an aggregate notional amount of ~~$10.0~~$9.8 million.

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 either 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 to be announced (“TBA”) contracts to manage the interest rate risk between the loan commitment and the closing of the loan. The total balance of forward TBA contracts entered into was ~~$197.0~~$38.5 million and ~~$183.5~~$48.5 million at March 31, ~~2021~~2022 and December 31, ~~2020,~~2021, respectively. Additionally, Wesbanco recognized gains (losses) of $4.5 million and $(2.7) million, respectively, for the three months ended March 31, 2021 and 2020 related to the changes in fair value of these contracts. The loans sold on a best efforts basis are committed to an investor simultaneous to the interest rate commitment with the borrower, and as a result, the Company does not enter into a separate forward TBA contract to offset the fair value risk as the investor accepts such risk in exchange for paying a lower premium on sale.

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

Wesbanco has agreements with its derivative counterparties that contain a provision, 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 had minimum collateral posting thresholds with certain of its derivative counterparties and has posted collateral with a market value of ~~$54.2~~$6.3 million as of March 31, ~~2021.~~2022. If Wesbanco had breached any of these provisions at March 31, ~~2021,~~2022, 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.~~counterparty.

A minimum required contribution ~~of $5.2million~~ is ~~due~~not required for ~~2021, which can be offset in whole or in part by the Plan’s $64.2million available credit balance.~~2022, and Wesbanco currently does 0t0t expect to make a voluntary contribution to the Plan in ~~2021.~~2022.

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 previously elected the fair value option. 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 own non-performance risk and the respective counterparty’s non-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.

Individually-evaluated ~~nonperforming~~ loans:Individually-evaluated ~~non-performing~~ loans are carried at the amortized cost basis less the specific allowance calculated ~~with the~~under CECL. ~~Since these~~Individually-evaluated loans ~~are nonperforming, cash flows could not be estimated and thus~~ are calculated using a cost basis approach or collateral value approach.

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, ~~2021~~2022 and December 31, ~~2020:~~2021:


			March 31, 2022
			Fair Value Measurements Using:
	March 31,		Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
(unaudited, in thousands)	2022		(level 1)		(level 2)		(level 3)
Recurring fair value measurements
Equity securities	$	12,757	$	12,757	$	—	$	—
Available-for-sale debt securities
U.S. Government sponsored entities and agencies		240,497		—		240,497		—
Residential mortgage-backed securities and collateralized mortgage obligations of government sponsored entities and agencies		2,159,454		—		2,159,454		—
Commercial mortgage-backed securities and collateralized mortgage obligations of government sponsored entities and agencies		394,089		—		394,089		—
Obligations of states and political subdivisions		100,273		—		98,957		1,316
Corporate debt securities		17,060		—		17,060		—
Total available-for-sale debt securities	$	2,911,373	$	—	$	2,910,057	$	1,316
Loans held for sale		15,959		—		15,959		—
Other assets - interest rate swaps		30,767		—		30,767		—
Total assets recurring fair value measurements	$	2,970,856	$	12,757	$	2,956,783	$	1,316
Other liabilities - interest rate swaps	$	30,827	$	—	$	30,827	$	—
Total liabilities recurring fair value measurements	$	30,827	$	—	$	30,827	$	—
Nonrecurring fair value measurements
Individually-evaluated loans	$	21,346	$	—	$	—	$	21,346
Other real estate owned and repossessed assets		87		—		—		87
Total nonrecurring fair value measurements	$	21,433	$	—	$	—	$	21,433


			December 31, 2021
			Fair Value Measurements Using:
	December 31,		Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
(in thousands)	2021		(level 1)		(level 2)		(level 3)
Recurring fair value measurements
Equity securities	$	13,466	$	13,466	$	—	$	—
Available-for-sale debt securities
U.S. Government sponsored entities and agencies		236,978		—		236,978		—
Residential mortgage-backed securities and collateralized mortgage obligations of government sponsored entities and agencies		2,285,213		—		2,285,213		—
Commercial mortgage-backed securities and collateralized mortgage obligations of government sponsored entities and agencies		367,493		—		367,493		—
Obligations of states and political subdivisions		106,340		—		104,847		1,493
Corporate debt securities		17,438		—		17,438		—
Total available-for-sale debt securities	$	3,013,462	$	—	$	3,011,969	$	1,493
Loans held for sale		25,277		—		25,277		—
Other assets - interest rate swaps		24,867		—		24,867		—
Total assets recurring fair value measurements	$	3,077,072	$	13,466	$	3,062,113	$	1,493
Other liabilities - interest rate swaps	$	26,388	$	—	$	26,388	$	—
Total liabilities recurring fair value measurements	$	26,388	$	—	$	26,388	$	—
Nonrecurring fair value measurements
Individually-evaluated loans	$	13,558	$	—	$	—	$	13,558
Other real estate owned and repossessed assets		—		—		—		—
Total nonrecurring fair value measurements	$	13,558	$	—	$	—	$	13,558

March 31, 2021

Fair Value Measurements Using:

March 31,

Quoted Prices in
Active Markets
for Identical
Assets

Significant
Other
Observable
Inputs

Significant
Unobservable
Inputs

(unaudited, in thousands)

2021

(level 1)

(level 2)

(level 3)

Recurring fair value measurements

Equity securities

$
13,123

$
13,123

$
—

$
—

Available-for-sale debt securities

U.S. Treasury

29,997

—

29,997

—

U.S. Government sponsored entities and agencies

176,330

—

176,330

—

Residential mortgage-backed securities and collateralized mortgage obligations of government sponsored entities and agencies

2,140,793

—

2,140,793

—

Commercial mortgage-backed securities and collateralized mortgage obligations of government sponsored entities and agencies

291,681

—

291,681

—

Obligations of states and political subdivisions

111,798

—

110,287

1,511

Corporate debt securities

24,613

—

24,613

—

Total available-for-sale debt securities

$
2,775,212

$
—

$
2,773,701

$
1,511

Loans held for sale

153,520

—

153,520

—

Other assets - interest rate derivatives agreements

31,732

—

31,732

—

Total assets recurring fair value measurements

$
2,973,587

$
13,123

$
2,958,953

$
1,511

Other liabilities - interest rate derivatives agreements

$
32,470

$
—

$
32,470

$
—

Total liabilities recurring fair value measurements

$
32,470

$
—

$
32,470

$
—

Nonrecurring fair value measurements

Individually-evaluated nonperforming loans

$
1,909

$
—

$
—

$
1,909

Other real estate owned and repossessed assets

393

—

—

393

Total nonrecurring fair value measurements

$
2,302

$
—

$
—

$
2,302

December 31, 2020

Fair Value Measurements Using:

December 31,

Quoted Prices in
Active Markets
for Identical
Assets

Significant
Other
Observable
Inputs

Significant
Unobservable
Inputs

(in thousands)

2020

(level 1)

(level 2)

(level 3)

Recurring fair value measurements

Equity securities

$
13,047

$
13,047

$
—

$
—

Available-for-sale debt securities

U.S. Treasury

39,982

—

39,982

—

U.S. Government sponsored entities and agencies

211,682

—

211,682

—

Residential mortgage-backed securities and collateralized mortgage obligations of government sponsored entities and agencies

1,264,737

—

1,264,737

—

Commercial mortgage-backed securities and collateralized mortgage obligations of government sponsored entities and agencies

320,098

—

320,098

—

Obligations of states and political subdivisions

115,762

—

114,227

1,535

Corporate debt securities

25,875

—

25,875

—

Total available-for-sale debt securities

$
1,978,136

$
—

$
1,976,601

$
1,535

Loans held for sale

168,378

—

168,378

—

Other assets - interest rate derivatives agreements

46,418

—

46,418

—

Total assets recurring fair value measurements

$
2,205,979

$
13,047

$
2,191,397

$
1,535

Other liabilities - interest rate derivatives agreements

$
49,917

$
—

$
49,917

$
—

Total liabilities recurring fair value measurements

$
49,917

$
—

$
49,917

$
—

Nonrecurring fair value measurements

Individually-evaluated nonperforming loans

$
1,958

$
—

$
—

$
1,958

Other real estate owned and repossessed assets

549

—

—

549

Total nonrecurring fair value measurements

$
2,507

$
—

$
—

$
2,507

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 0 significant transfers between level 1, 2 or 3 for the three months ended March 31, ~~2021~~2022 or for the year ended December 31, ~~2020.~~ 2021.

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)	Estimate		Techniques	Input	Average)
March 31, 2022
Individually-evaluated loans	$	21,346	Appraisal of collateral (1)	Appraisal adjustments (2)	(30.0%)/(30.0%)
				Liquidation expenses (2)	(5.6%) to (8.0%)/(6.9%)
Other real estate owned and repossessed assets	$	87	Appraisal of collateral (1), (3)
December 31, 2021
Individually-evaluated loans	$	13,558	Appraisal of collateral (1)	Appraisal adjustments (2)	(0.0%)/(0.0%)
				Liquidation expenses (2)	(8.0%)/(8.0%)

Quantitative Information about Level 3 Fair Value Measurements

Fair Value

Valuation

Unobservable

Range (Weighted
(unaudited, in thousands)

Estimate

Techniques

Input

Average)
March 31, 2021

Individually-evaluated nonperforming loans

$
1,909

Appraisal of collateral ⁽¹⁾

Appraisal adjustments ⁽²⁾

(30.0%)/(30.0%)

Liquidation expenses ⁽²⁾

(5.6%)/(5.6%)
Other real estate owned and repossessed assets

$
393

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

December 31, 2020

Individually-evaluated nonperforming loans

$
1,958

Appraisal of collateral ⁽¹⁾

Appraisal adjustments ⁽²⁾

(30.0%)/(30.0%)

Liquidation expenses ⁽²⁾

(5.6%)/(5.6%)
Other real estate owned and repossessed assets

$
549

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 and numerous dissimilar qualitative adjustments by management, which are not identifiable.

⁽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 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										Fair Value Measurements at
					March 31, 2021										March 31, 2022
	Carrying		Fair Value		Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs		Carrying		Fair Value		Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
(unaudited, in thousands)	Amount		Estimate		(level 1)		(level 2)		(level 3)		Amount		Estimate		(level 1)		(level 2)		(level 3)
Financial Assets
Cash and due from banks	$	759,048	$	759,048	$	759,048	$	—	$	—	$	1,369,498	$	1,369,498	$	1,369,498	$	—	$	—
Equity securities		13,123		13,123		13,123		—		—		12,757		12,757		12,757		—		—
Available-for-sale debt securities		2,775,212		2,775,212		—		2,773,701		1,511		2,911,373		2,911,373		—		2,910,057		1,316
Held-to-maturity debt securities		813,450		839,872		—		839,411		461
Net held-to-maturity debt securities												1,156,917		1,092,993		—		1,092,609		384
Net loans		10,543,272		10,540,445		—		—		10,540,445		9,615,407		9,015,392		—		—		9,015,392
Loans held for sale		153,520		153,520		—		153,520		—		15,959		15,959		—		15,959		—
Other assets - interest rate derivatives		31,732		31,732		—		31,732		—
Other assets - interest rate swaps												30,767		30,767		—		30,767		—
Accrued interest receivable		68,896		68,896		68,896		—		—		60,370		60,370		60,370		—		—

Financial Liabilities
Deposits		13,286,999		13,300,728		11,731,925		1,568,803		—		13,797,874		13,805,745		12,586,866		1,218,879		—
Federal Home Loan Bank borrowings		433,984		438,211		—		438,211		—		123,898		125,441		—		125,441		—
Other borrowings		137,218		125,925		125,925		—		—		158,538		144,160		144,160		—		—
Subordinated debt and junior subordinated debt		192,430		172,142		—		105,371		66,771		280,743		281,265		—		281,265		—
Other liabilities - interest rate derivatives		32,470		32,470		—		32,470		—
Other liabilities - interest rate swaps												30,827		30,827		—		30,827		—
Accrued interest payable		3,224		3,224		3,224		—		—		1,786		1,786		1,786		—		—


					Fair Value Measurements at
					December 31, 2021
	Carrying		Fair Value		Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
(in thousands)	Amount		Estimate		(level 1)		(level 2)		(level 3)
Financial Assets
Cash and due from banks	$	1,251,358	$	1,251,358	$	1,251,358	$	—	$	—
Equity securities		13,466		13,466		13,466		—		—
Available-for-sale debt securities		3,013,462		3,013,462		—		3,011,969		1,493
Net held-to-maturity debt securities		1,004,555		1,028,452		—		1,028,047		405
Net loans		9,611,856		9,385,917		—		—		9,385,917
Loans held for sale		25,277		25,277		—		25,277		—
Other assets - interest rate swaps		24,867		24,867		—		24,867		—
Accrued interest receivable		60,844		60,844		60,844		—		—

Financial Liabilities
Deposits		13,565,863		13,575,477		12,273,211		1,302,266		—
Federal Home Loan Bank borrowings		183,920		185,684		—		185,684		—
Other borrowings		141,893		134,288		134,288		—		—
Subordinated debt and junior subordinated debt		132,860		109,186		—		109,186		—
Other liabilities - interest rate swaps		26,388		26,388		—		26,388		—
Accrued interest payable		1,901		1,901		1,901		—		—

Fair Value Measurements at

December 31, 2020

Carrying

Fair Value

Quoted Prices in
Active Markets
for Identical
Assets

Significant
Other
Observable
Inputs

Significant
Unobservable
Inputs

(in thousands)

Amount

Estimate

(level 1)

(level 2)

(level 3)

Financial Assets

Cash and due from banks

$
905,447

$
905,447

$
905,447

$
—

$
—

Equity securities

13,047

13,047

13,047

—

—

Available-for-sale debt securities

1,978,136

1,978,136

—

1,976,601

1,535

Held-to-maturity debt securities

730,886

768,183

—

767,720

463

Net loans

10,603,406

10,802,883

—

—

10,802,883

Loans held for sale

168,378

168,378

—

168,378

—

Other assets - interest rate derivatives

46,418

46,418

—

46,418

—

Accrued interest receivable

66,790

66,790

66,790

—

—

Financial Liabilities

Deposits

12,429,373

12,439,981

10,810,863

1,629,118

—

Federal Home Loan Bank borrowings

549,003

555,375

—

555,375

—

Other borrowings

241,950

235,796

235,796

—

—

Subordinated debt and junior subordinated debt

192,291

174,452

—

105,768

68,684

Other liabilities - interest rate derivatives

49,917

49,917

—

49,917

—

Accrued interest payable

4,314

4,314

4,314

—

—

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 securities held-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~~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 ~~current borrowing rates for~~securities’ relationship to other similar ~~types of borrowing arrangements.~~ securities. These securities are classified within level 2 in the fair value hierarchy.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.~~determined by using comparable corporate bond indices and swap rates from the financial services sector and factoring in the applicable credit spreads and optional early redemption provisions.

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.

The following table provides details about amounts reclassified from accumulated other comprehensive income for the three months ended March 31, ~~2021~~2022 and ~~2020:~~2021:

Commitments — In the normal course of business, Wesbanco offers off-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 of non-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 ~~$6.7~~$8.1 million and ~~$9.5~~$7.8 million at March 31, ~~2021~~2022 and December 31, ~~2020,~~2021, 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 ~~$0.1 million and $0.2~~$0.2 million as of both March 31, ~~2021~~2022 and December 31, ~~2020, respectively.~~2021.

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.

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.

Wesbanco operates 2 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 certain non-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 ~~$5.2~~$5.4 billion and ~~$4.1~~$5.2 billion at March 31, ~~2021~~2022 and ~~2020,~~2021, 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.

Total non-fiduciary assets of the trust and investment services segment were ~~$3.9~~$3.5 million (including ~~$1.7~~$1.3 million of trust customer intangibles) and ~~$3.8~~$3.9 million (including ~~$2.2~~$1.7 million of trust customer intangibles) at March 31, ~~2021~~2022 and ~~2020,~~2021, respectively. All other assets, including goodwill and the remainder of other intangible assets, were allocated to the Community Banking segment.

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 months ended March 31, ~~2021.~~2022. This discussion and analysis should be read in conjunction with the Consolidated Financial Statements and Notes thereto.

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 Form 10-K for the year ended December 31, ~~2020~~2021 and documents subsequently filed by Wesbanco with the Securities and Exchange Commission (“SEC”), which are available at the SEC’s website, www.sec.gov or at Wesbanco’s website, www.Wesbanco.com. Investors are cautioned that forward-looking statements, which are not historical fact, involve risks and uncertainties, including those detailed in Wesbanco’s most recent Annual Report on Form 10-K filed with the SEC under “Risk Factors” in Part I, Item 1A. Such statements are subject to important factors that could cause actual results to differ materially from those contemplated by such statements, including, without limitation, the effects of changing regional and national economic conditions including the effects of the COVID-19 pandemic; changes in interest rates, spreads on earning assets and interest-bearing liabilities, and associated interest rate sensitivity; sources of liquidity available to Wesbanco and its related subsidiary operations; potential future credit losses and the credit risk of commercial, real estate, and consumer loan customers and their borrowing activities; actions of the Federal Reserve Board, the Federal Deposit Insurance Corporation, the SEC, the Financial Institution Regulatory Authority, the Municipal Securities Rulemaking Board, the Securities Investors Protection Corporation, the Consumer Financial Protection Bureau 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.

Wesbanco is a multi-state bank holding company operating through ~~212~~205 branches and ~~207~~202 ATM machines in West Virginia, Ohio, western Pennsylvania, Kentucky, southern Indiana and Maryland, 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.

Wesbanco’s critical accounting policies involving the significant judgments and assumptions used in the preparation of the Consolidated Financial Statements as of March 31, ~~2021~~2022 have remained unchanged from the disclosures presented in Wesbanco’s Annual Report on Form 10-K for the year ended December 31, ~~2020~~2021 within the section “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

Net income available to common shareholders for the three months ended March 31, ~~2021~~2022 was ~~$70.6~~$41.6 million, with diluted earnings per share of ~~$1.05,~~$0.68, compared to ~~$23.4~~$70.6 million or ~~$0.35~~$1.05 per diluted share, respectively, for the first quarter of ~~2020.~~2021. Excluding after-tax restructuring and merger-related expenses (non-GAAP measure) in both periods, for the three months ended March 31, ~~2021,~~2022, net income available to common shareholders was $42.9 million or $0.70 per diluted share, as compared to $71.3 million or $1.06 per diluted share, ~~as compared~~respectively.

(1)

Non-GAAP net income excludes after-tax restructuring and merger-related expenses. The above non-GAAP financial measures used by Wesbanco provide information useful to ~~$27.5 million or $0.41 per diluted share, respectively,~~investors in understanding Wesbanco’s operating performance and trends, and facilitate comparisons with the ~~prior year quarter.~~

For The Three Months Ended March 31,

2021

2020

(unaudited, dollars in thousands, except per share amounts)

Net Income

Diluted
Earnings
Per Share

Net Income

Diluted
Earnings
Per Share

Net income available to common shareholders (Non-GAAP)⁽¹⁾

$
71,256

$
1.06

$
27,476

$
0.41

Less: After-tax restructuring and merger-related expenses

(672
)

(0.01
)

(4,080
)

(0.06
)
Net income available to common shareholders (GAAP)

$
70,584

$
1.05

$
23,396

$
0.35

performance of Wesbanco’s peers.

~~(1)~~

Non-GAAP net income excludes after-tax restructuring and 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.

Net interest income decreased ~~$3.7~~$8.8 million or ~~3.1%~~7.5% in the first quarter of ~~2021~~2022 compared to the same quarter of ~~2020,~~2021, reflecting lower loan yields, due to repricing of existing loans and new lower rates offered in the current market environment, lower purchase accounting related accretion and lower rates on investment securities, partially offset by lower interest on deposits and borrowings. As a result of the lower rates and a higher mix of securities versus loans to total assets, the net interest margin decreased by 2732 basis points to ~~3.27%~~2.95% in the first quarter of ~~2021~~2022 as compared to the first quarter of ~~2020.~~2021. Over the same time period, the yield on earning assets decreased by a total of 6844 basis points and the cost of interest bearing liabilities decreased 5418 basis points. Average loan balances ~~increased~~decreased by ~~5.0%~~10.8% from the first quarter of ~~2020,~~2021, mainly attributable to ~~participation in~~forgiveness of SBA Payroll Protection Program (“PPP”) loans and higher levels of commercial real estate loan payoffs, while average securities increased by 40.7% over the ~~PPP loan program, while average~~same time period due to excess liquidity on the balance sheet from increased customer deposits. Average deposits, excluding certificates of deposit, increased ~~24.6%~~11.0% over the same time period, due mostly to ~~stimulus deposits and~~ increased personal savings. Accretion from acquisitions benefited the first quarter ~~2021~~2022 net interest margin by 138 basis points, as compared to 2213 basis points in the prior year period. Lastly, the ~~forgiveness of~~accretion on both existing and ~~the funding of new~~forgiven PPP loans positively impacted the first quarter ~~2021~~2022 net interest margin by a net 7 basis points as compared to 11 basis ~~points.~~points for the first quarter of 2021.

Improved macroeconomic ~~factors, which include lower unemployment projections,~~forecasts utilized in the CECL calculation drove a net benefit of provision for credit losses and resulted in a negative provision of $3.4 million in the first quarter of 2022, as compared to a negative provision of $28.0 million in the first quarter of ~~2021 as compared to a provision of $29.8 million in the first quarter of 2020.~~2021. Annualized net charge-offs, as a percentage of average portfolio loans, were 0% and 0.02% for the first quarter of 2022 and ~~0.18% for~~2021, respectively.

For the first quarter of 2022, non-interest income decreased $2.8 million or 8.5% compared to the first quarter of 2021, driven primarily by lower mortgage banking income, which decreased $2.3 million or 54.9% from the first quarter of 2021 and ~~2020, respectively.~~

~~For~~by lower swap fee income and the associated swap fair value adjustments, which decreased $3.0 million or 65.2% over the same time period. While mortgage loan originations decreased by 17.0% during the first quarter of ~~2021, non-interest income increased $5.2 million or 18.6% compared to~~2022, the ~~first quarter of 2020, driven by mortgage banking income and higher commercial customer loan swap-related income. Reflecting~~amount sold in the ~~low interest rate environment and organic growth, mortgage banking income increased $3.0 million or 234.2%~~secondary market also decreased from approximately 60% in the first quarter of 2021 ~~compared~~ to ~~the prior year period, net of fair value adjustments, as residential mortgage origination dollar volume increased~~ approximately ~~50% over the prior year’s first quarter, with roughly 60% of those originations sold into the secondary market. Loan swap-related income was $4.7 million~~25% in the first quarter of ~~2021, an increase of $4.8 million over the first quarter of 2020, primarily the result of $2.8 million in positive fair value adjustments in the current period as compared~~2022, due to a ~~negative $2.8~~continued effort to keep more 1-to-4 family residential mortgages on the balance sheet. Offsetting the decreases somewhat, electronic banking fees increased $1.0 million ~~in fair value adjustments in~~or 22.5% from last year’s first ~~quarter. Offsetting these increases somewhat,~~quarter and service charges on deposits ~~were 26.0% lower in~~increased $1.2 million or 24.4% over the ~~first quarter of 2021 as compared to the first quarter of 2020,~~same time period, due to ~~higher customer deposits~~increased consumer spending associated with ~~three rounds of stimulus payments to-date and lower general consumer spending, resulting in fewer eligible account fees.~~the improving economy.

Non-interest expense, excluding restructuring and merger-related expenses in both periods, ~~decreased~~increased in the first quarter of ~~2021~~2022 by ~~$0.7~~$0.5 million or ~~0.8%~~0.6%, to ~~$85.5~~$86.0 million, compared to the first quarter of ~~2020.~~ ~~This year-over-year decrease is primarily due to a 5.2% decrease in salaries~~2021. Salaries and wages increased $2.0 million or 5.5% from the first quarter of ~~2020~~2021 to the first quarter of ~~2021~~2022 due to ~~the recent financial center closures~~lower loan contra-costs and ~~the management of open positions, as well as continuing cost controls over certain discretionary expenses. FDIC insurance~~higher salary expense ~~was down 39.3% from~~related to normal merit increases last ~~year’s first quarter. Offsetting these decreases somewhat was an increase of $1.2 million or 109.5% in marketing~~summer. Equipment and software expense for the first quarter of ~~2021 from the first quarter of 2020~~2022 increased $1.2 million or 18.4% year-over-year, due ~~to increased product advertising and brand awareness campaigns that were delayed in 2020 due~~primarily to the ~~pandemic,~~movement of online banking costs from other operating expenses. Offsetting these increases somewhat was a decrease in other operating expenses of $1.7 million or 9.8% due mostly to the aforementioned move of online banking costs as well as a reduction in ACH and ~~equipment and~~ATM processing charges related to a change in providers, in conjunction with our core banking software ~~costs increased due to higher software costs resulting from the company’s increased size.~~system conversion last year.

During the first quarter of ~~2021,~~2022, the effective tax rate was ~~19.9%~~18.3% as compared to ~~13.4%~~19.9% in last year’s first quarter, and the provision for income taxes ~~increased $14.6~~decreased by $8.3 million ~~to $18.2 million,~~over the same time period. Both of these decreases were primarily due to ~~higher~~lower pre-tax income, heavily influenced by ~~the~~a reduced negative provision for credit losses in the first quarter of 2022 as compared to the first quarter of 2021.

NET INTEREST INCOME

TABLE 1. NET INTEREST INCOME


	For the Three Months Ended March 31,						For the Three Months Ended March 31,
(unaudited, dollars in thousands)	2021			2020			2022			2021
Net interest income	$	116,478		$	120,162		$	107,711		$	116,478
Taxable equivalent adjustment to net interest income		1,039			1,184			1,155			1,039
Net interest income, fully taxable equivalent	$	117,517		$	121,346		$	108,866		$	117,517
Net interest spread, non-taxable equivalent		3.11	%		3.25	%		2.85	%		3.11	%
Benefit of net non-interest bearing liabilities		0.13	%		0.26	%		0.07	%		0.13	%
Net interest margin		3.24	%		3.51	%		2.92	%		3.24	%
Taxable equivalent adjustment		0.03	%		0.03	%		0.03	%		0.03	%
Net interest margin, fully taxable equivalent		3.27	%		3.54	%		2.95	%		3.27	%

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 decreased ~~$3.7~~$8.8 million or ~~3.1%~~7.5% in the first quarter of ~~2021~~2022 compared to the first quarter of ~~2020,~~2021, due to a 2732 basis point decrease in the net interest margin to ~~3.27%~~2.95% resulting from the lower yield environment, as the yield on earning assets decreased at a faster rate than the rate on interest bearing ~~liabilities.~~liabilities, and investment securities became a greater percentage of total assets. The net interest margin decrease was slightly mitigated by a ~~5.7%~~2.5% increase in average earning asset balances from the first quarter of 2021, primarily ~~driven by Wesbanco’s participation~~from a 40.7% increase in average securities, which were purchased with liquidity from deposit growth. Interest and fee accretion income on PPP loans decreased $6.2 million in the ~~PPP lending program. PPP loans contributed~~first quarter of 2022 from a total of $9.9 million in the first quarter of 2021. This PPP loan income positively impacted the first quarter 2022 net interest ~~and fee accretion income~~margin by a net 7 basis points as compared to 11 basis points in the first quarter of 2021. Excluding PPP loans, portfolio loans decreased by ~~4.5%~~2.3% from March 31, ~~2020,~~2021, due to lower new loan demand ~~other than residential lending, most~~and high levels of ~~which was sold in the secondary market. Total average deposits increased~~commercial real estate loan payoffs. In addition, total purchase accounting accretion decreased by $1.6 million in the first quarter of ~~2021 by $1.8 billion or 16.5%~~2022 as compared to the first quarter of ~~2020, due to an influx of deposits from the three rounds of stimulus, PPP loan proceeds deposited into customer accounts, higher personal savings rates~~2021, and lower general consumer spending. The margin’s decline was due to the continued lower rate environment and its effect on the repricing of existing loans and offered rates on loans and investment securities. In addition, purchase accounting accretion decreased in the first quarter of 2021 as approximately 138 basis points of accretion from prior acquisitions was included in the first quarter ~~2021~~2022 net interest margin as compared to 2213 basis points in the ~~2020~~2021 first quarter net interest margin. ~~The forgiveness of existing PPP loans and the funding of new PPP loans positively impacted~~Total average deposits, excluding CDs, increased in the first quarter of 2022 by $1.2 billion or 11.0% compared to the first quarter of 2021, ~~net interest margin by a net 11 basis points, mitigating the margin decrease somewhat.~~due to higher personal savings balances. The cost of interest bearing deposits decreased by 358 basis points and total liabilities decreased by 5418 basis points from the first quarter of ~~2020~~2021 to the first quarter of ~~2021.~~2022. The decrease in the cost is primarily due to ~~aggressive~~ rate decreases for interest bearing demand deposits, which include public funds, and lower rates for certificates of deposit, customer repurchase agreements, ~~short to medium-term~~term Federal Home Loan Bank borrowings and junior subordinated debentures, in response to the general decrease in overall borrowing rates in the marketplace resulting from lower rates across the yield curve. In addition, the average balance of FHLB borrowings decreased by ~~$1.0 billion~~$308.4 million or ~~66.8%~~63.1% from the first quarter of ~~2020,~~2021, as excess liquidity was used to pay off these borrowings as they matured.

Interest income decreased ~~$17.4~~$12.9 million or ~~12.2%~~10.3% in the first quarter of ~~2021~~2022 compared to the same period of ~~2020~~2021 due to lower yields in ~~every~~each of the major earning asset ~~category.~~categories. Earning asset yields ~~were~~continued to be influenced negatively ~~in the first quarter of 2021 compared~~due to ~~the first quarter of 2020 due primarily to decreases in the Federal Reserve’s federal funds rate by 150 basis points in March 2020 and~~ the continuation of the low rate environment through the current period. ~~Helping to slightly mitigate the interest income decrease, average~~Average loan balances ~~increased $515.2 million~~decreased $1.2 billion or ~~5.0%~~10.8% in the first quarter of ~~2021~~2022 compared to the first quarter of ~~2020,~~2021, due mostly to ~~originations~~forgiveness of PPP ~~loans.~~loans that were originated in 2020 and 2021. Loan yields decreased by 5618 basis points during this same period to ~~4.07% from~~3.89% due to the previously mentioned lower rate environment and its effect on the repricing of portfolio loans, as well as lower offered rates on new loans. 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 quarter of ~~2021,~~2022, average loans represented ~~74.7%~~65.0% of average earning assets, a ~~slight~~ decrease from ~~75.2%~~74.7% in the first quarter of ~~2020. Average taxable~~2021. As liquidity from higher deposit balances was invested, average total securities balances ~~decreased $270.3 million~~increased $1.2 billion or ~~10.5%~~40.7% from the first quarter of ~~2020, due to higher levels~~2021, and represented 27.2% of ~~calls and mortgage security-related paydowns.~~total earning assets in the first quarter of 2022. Taxable securities yields decreased by 6924 basis points and tax-exempt securities yields decreased by ~~five~~40 basis points in the first quarter of ~~2021~~2022 from the first quarter of ~~2020.~~2021. The continuing lower rate environment has resulted in the yield decrease for all securities, as calls, prepayments and maturities of legacy higher-rate securities have been replaced with purchases at lower overall market yields. ~~Increased prepayments on mortgage-backed securities in the lower rate environment also reduced the taxable securities yields due to higher amortization.~~ The average balance of tax-exempt securities, which have the highest yields within securities, have ~~stayed consistent at approximately~~decreased from 20.1% of total average securities in ~~both~~ the first quarter of 2021 ~~and 2020. The~~to 18.0% of total average securities ~~balance for~~in the first quarter of ~~2021 was somewhat impacted by a net securities portfolio increase of $0.9 billion, which occurred mostly late in March from the use of excess liquidity to fund securities purchases.~~

2022.Total portfolio loans increased $353.7 million or 3.4% over the last twelve months, while total commercial loans increased $729.3 million or 9.8%. Loan growth was achieved through $4.8 billion in total loan originations, led by $2.9 billion in business loan originations for the past twelve months. Loan growth was driven by PPP loans, but was partially offset by significant loan paydowns or payoffs as some loans were refinanced in the secondary lending market, some with other banks and some financed projects were sold by their developers.

Commercial loans with floors currently average ~~4.10%~~3.80% on approximately ~~$2.4~~$2.8 billion or ~~30%~~39% of total commercial loans at March 31, ~~2021,~~2022, as compared to ~~$2.3~~$2.6 billion averaging ~~4.22%~~3.83% or ~~29%~~36% of commercial loans at December 31, ~~2020.~~2021. Approximately ~~68%~~54% or ~~$1.7~~$1.5 billion of these loans are currently priced at their floor, as compared to ~~69%~~63% or $1.6 billion at December 31, ~~2020.~~2021. 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 next repricing date. ~~In addition, in a declining rate environment, some customers may request rates below existing contractual floors, which we may grant for competitive or other reasons.~~

Interest expense decreased ~~$13.7~~$4.1 million or ~~61.5%~~48.0% in the first quarter of ~~2021~~2022 as compared to the same period in ~~2020,~~2021, due to decreases in the cost of all interest bearing liability categories, as ~~market rates have dropped and, in turn,~~ management reduced certain deposit ~~rates.~~rates, and due to a decrease in the balance of outstanding FHLB borrowings. The cost of interest bearing liabilities decreased by 5418 basis points from the first quarter of ~~2020~~2021 to ~~0.37%~~0.19% in ~~2021.~~2022. Interest bearing deposits increased ~~$742.0~~$520.6 million or ~~9.5%~~6.1% from the first quarter of ~~2020,~~2021, due mostly to ~~the three rounds of stimulus payments.~~customers’ increased personal savings and deposit balances. The rate on interest bearing deposits decreased 358 basis points to ~~20 basis points~~0.12% from the first quarter of ~~2020,~~2021, primarily from ~~aggressive~~ decreases in rates on interest bearing public funds and certificates of deposit in response to the lower market ~~rates.~~rates, which are currently near their floors. Average non-interest bearing demand deposit balances increased from the first quarter of ~~2020~~2021 to the first quarter of ~~2021~~2022 by ~~$1.1 billion~~$376.0 million or ~~33.9%~~8.9%, and were ~~32.9%~~33.5% of total average deposits at March 31, ~~2021,~~2022, compared to ~~28.6%~~32.9% at March 31, ~~2020,~~2021, reflecting the previously mentioned ~~stimulus deposits, PPP loan deposits,~~ higher personal savings balances and ongoing checking

account marketing strategies. The average balance of FHLB borrowings decreased ~~$1.0 billion~~$308.4 million from the first quarter of ~~2020~~2021 to ~~2021~~2022 due to the maturity of legacy higher-rate FHLB borrowings throughout the past twelve months being redeemed with excess liquidity. These maturities ~~benefitted~~benefited the average rate paid, as it decreased by 2570 basis points to ~~2.00%~~1.30% from the first quarter of ~~2020.~~2021. Average ~~other borrowings,~~repurchase agreements combined with subordinated debt and junior subordinated debt balances decreased ~~$150.5~~$80.1 million or ~~28.2%~~20.9% from the first quarter of ~~2020~~2021 to ~~2021,~~2022, and their average rates paid decreased by 7913 and ~~122~~55 basis points, respectively, over this same time period, due primarily to decreases in LIBOR, the index upon which this variable-rate type of borrowing is ~~priced, other than fixed rates on $35.1 million~~priced.

The increasing rate environment, which began in the second half of ~~subordinated debt.~~

~~The continuing low rate environment~~the first quarter, is expected to result in the core net interest margin ~~declining several basis points over~~stabilizing in the ~~remainder~~second quarter, and assuming further anticipated federal funds rate increases in 2022, the margin will likely begin to increase in the second half of ~~the year, as securities~~2022. Securities purchased toward the end of the first quarter will ~~negatively~~further positively impact the margin. ~~Lower~~Higher anticipated earning asset yields caused by loans repricing to ~~lower~~higher rates, rates on new loan production being ~~lower~~higher than existing loans and security cash flows being reinvested at ~~lower~~higher rates ~~and~~will be slightly offset by decreasing purchase accounting accretion, ~~should be slightly mitigated by~~ price ~~reductions~~increases to deposit rates and ~~lower~~higher wholesale funding costs. The subordinated debt issuance late in the first quarter of 2022 will further increase the cost of interest-bearing liabilities. In addition, ~~Wesbanco’s participation in~~as the remaining balance of outstanding PPP ~~loan program is expected~~loans continues to ~~positively contribute to net interest income and further mitigate~~be forgiven, the ~~decreases to~~positive impact on the ~~net interest~~ margin ~~in 2021~~will lessen as ~~SBA loan forgiveness occurs for qualifying customers and~~lower net deferred fees are accreted into income at the date of loan payoff. At March 31, 2022, there were $2.9 million of remaining net deferred fees from PPP loans that will accrete into interest income as loans pay down or are forgiven by the SBA.

TABLE 2. AVERAGE BALANCE SHEETS AND NET INTEREST MARGIN ANALYSIS


	For The Three Months Ended March 31,
	2022					2021
	Average		Average			Average		Average
(unaudited, dollars in thousands)	Balance		Rate			Balance		Rate
ASSETS
Due from banks - interest bearing	$	1,161,218		0.16	%	$	776,245		0.09	%
Loans, net of unearned income (1)		9,712,085		3.89	%		10,890,370		4.07	%
Securities: (2)
Taxable		3,333,379		1.72	%		2,306,320		1.96	%
Tax-exempt (3)		729,380		3.06	%		580,199		3.46	%
Total securities		4,062,759		1.96	%		2,886,519		2.26	%
Other earning assets		15,446		3.81	%		33,240		5.89	%
Total earning assets (3)		14,951,508		3.07	%		14,586,374		3.51	%
Other assets		2,041,090					2,049,884
Total Assets	$	16,992,598				$	16,636,258

LIABILITIES AND SHAREHOLDERS' EQUITY
Interest bearing demand deposits	$	3,403,499		0.10	%	$	2,970,766		0.14	%
Money market accounts		1,806,719		0.07	%		1,725,561		0.14	%
Savings deposits		2,626,962		0.04	%		2,290,657		0.05	%
Certificates of deposit		1,254,603		0.41	%		1,584,152		0.61	%
Total interest bearing deposits		9,091,783		0.12	%		8,571,136		0.20	%
Federal Home Loan Bank borrowings		180,024		1.30	%		488,388		2.00	%
Repurchase agreements		156,167		0.12	%		191,676		0.25	%
Subordinated debt and junior subordinated debt		147,709		3.22	%		192,341		3.77	%
Total interest bearing liabilities (4)		9,575,683		0.19	%		9,443,541		0.37	%
Non-interest bearing demand deposits		4,576,749					4,200,793
Other liabilities		184,359					221,508
Shareholders’ equity		2,655,807					2,770,416
Total Liabilities and Shareholders’ Equity	$	16,992,598				$	16,636,258
Taxable equivalent net interest spread				2.88	%				3.14	%
Taxable equivalent net interest margin				2.95	%				3.27	%

For The Three Months Ended March 31,

2021

2020

Average

Average

Average

Average

(unaudited, dollars in thousands)

Balance

Rate

Balance

Rate

ASSETS

Due from banks - interest bearing

$
776,245

0.09
%

$
133,532

1.21
%
Loans, net of unearned income⁽¹⁾

10,890,370

4.07
%

10,375,187

4.63
%
Securities:⁽²⁾

Taxable

2,306,320

1.96
%

2,576,668

2.65
%
Tax-exempt ⁽³⁾

580,199

3.46
%

646,587

3.51
%
Total securities

2,886,519

2.26
%

3,223,255

2.82
%
Other earning assets

33,240

5.89
%

69,581

6.37
%
Total earning assets ⁽³⁾

14,586,374

3.51
%

13,801,555

4.19
%
Other assets

2,049,884

1,983,384

Total Assets

$
16,636,258

$
15,784,939

LIABILITIES AND SHAREHOLDERS'
EQUITY

Interest bearing demand deposits

$
2,970,766

0.14
%

$
2,342,441

0.58
%
Money market accounts

1,725,561

0.14
%

1,543,763

0.61
%
Savings deposits

2,290,657

0.05
%

1,953,487

0.19
%
Certificates of deposit

1,584,152

0.61
%

1,989,450

0.82
%
Total interest bearing deposits

8,571,136

0.20
%

7,829,141

0.55
%
Federal Home Loan Bank borrowings

488,388

2.00
%

1,471,175

2.25
%
Other borrowings

191,676

0.25
%

336,042

1.04
%
Subordinated debt and junior subordinated debt

192,341

3.77
%

198,494

��
4.99
%
Total interest bearing liabilities ⁽⁴⁾

9,443,541

0.37
%

9,834,852

0.91
%
Non-interest bearing demand deposits

4,200,793

3,137,279

Other liabilities

221,508

218,739

Shareholders’ equity

2,770,416

2,594,069

Total Liabilities and Shareholders’ Equity

$
16,636,258

$
15,784,939

Taxable equivalent net interest spread

3.14
%

3.28
%
Taxable equivalent net interest margin

3.27
%

3.54
%
(1)

Gross of allowance for credit losses and net of unearned income. Includes non-accrual and loans held for sale. Loan fees included in interest income on loans were $4.1 million and $8.2 million for the three months ended March 31, 2022 and 2021, respectively. PPP loan fees, which are included as part of total loan fees, were $3.2 million and $7.9 million for the three months ended March 31, 2022 and 2021, respectively. Additionally, loan accretion included in interest income on loans acquired from prior acquisitions was $2.5 million and $3.5 million for the three months ended March 31, 2022 and 2021, respectively.

(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 federal statutory rate of 21% for each period presented.

(4)

Accretion on interest bearing liabilities acquired from prior acquisitions was $0.4 million and $1.1 million for the three months ended March 31, 2022 and 2021, respectively.

⁽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 were $8.2 million and $0.7 million for the three months ended March 31, 2021 and 2020, respectively. PPP loan fees, which are included as part of total loan fees, were $7.9 million for the three months ended March 31, 2021. Additionally, loan accretion included in interest income on loans acquired from prior acquisitions was $3.5 million and $4.1 million for the three months ended March 31, 2021 and 2020, respectively.

⁽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 federal statutory rate of 21% for each period presented.~~

⁽⁴⁾	~~Accretion on interest bearing liabilities acquired from prior acquisitions was $1.1 million and $3.4 million for the three months ended March 31, 2021 and 2020, respectively.~~

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


	For the Three Months Ended March 31, 2022
	Compared to March 31, 2021
(unaudited, in thousands)	Volume			Rate			Net Increase (Decrease)
Increase (decrease) in interest income:
Due from banks - interest bearing	$	113		$	163		$	276
Loans, net of unearned income		(11,455	)		(4,782	)		(16,237	)
Taxable securities		4,479			(1,494	)		2,985
Tax-exempt securities (1)		1,171			(621	)		550
Other earning assets		(203	)		(135	)		(338	)
Total interest income change (1)		(5,895	)		(6,869	)		(12,764	)
Increase (decrease) in interest expense:
Interest bearing demand deposits		137			(369	)		(232	)
Money market accounts		26			(283	)		(257	)
Savings deposits		36			(36	)		-
Certificates of deposit		(431	)		(666	)		(1,097	)
Federal Home Loan Bank borrowings		(1,179	)		(660	)		(1,839	)
Repurchase agreements		(19	)		(51	)		(70	)
Subordinated debt and junior subordinated debt		(378	)		(240	)		(618	)
Total interest expense change		(1,808	)		(2,305	)		(4,113	)
Net interest income decrease (1)	$	(4,087	)	$	(4,564	)	$	(8,651	)

For The Three Months Ended March 31, 2021

Compared to March 31, 2020

(unaudited, in thousands)

Volume

Rate

Net Increase
(Decrease)

Increase (decrease) in interest income:

Due from banks - interest bearing

$
433

$
(658
)

$
(225
)
Loans, net of unearned income

5,790

(15,935
)

(10,145
)
Taxable securities

(1,648
)

(4,211
)

(5,859
)
Tax-exempt securities ⁽¹⁾

(568
)

(123
)

(691
)
Other earning assets

(535
)

(84
)

(619
)
Total interest income change ⁽¹⁾

3,472

(21,011
)

(17,539
)
Increase (decrease) in interest expense:

Interest bearing demand deposits

730

(3,081
)

(2,351
)
Money market accounts

249

(2,023
)

(1,774
)
Savings deposits

137

(796
)

(659
)
Certificates of deposit

(731
)

(953
)

(1,684
)
Federal Home Loan Bank borrowings

(4,953
)

(865
)

(5,818
)
Other borrowings

(271
)

(481
)

(752
)
Subordinated debt and junior subordinated debt

(74
)

(598
)

(672
)
Total interest expense change

(4,913
)

(8,797
)

(13,710
)
Net interest income increase (decrease) ⁽¹⁾

$
8,385

$
(12,214
)

$
(3,829
)
(1)

Taxable equivalent basis is calculated on tax-exempt securities using a federal statutory tax rate of 21%.

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

PROVISION FOR CREDIT LOSSES – LOANS AND LOAN COMMITMENTS

The provision for credit losses – loans is the amount to be added to the allowance for credit losses – loans after net ~~charge-offs~~(charge-offs) recoveries have been ~~deducted~~(deducted) added to bring the allowance to a level considered appropriate to absorb lifetime expected losses for all portfolio loans. The provision for credit losses – loan commitments is the amount to be added to the allowance for credit losses for loan commitments to bring that allowance to a level considered appropriate to absorb lifetime expected losses on unfunded loan commitments. The negative provision for credit losses - loans and loan commitments decreased byto ($3.5) million in the first quarter of 2022 compared to a negative provision of ($27.9) million in the first quarter of ~~2021 compared to $29.8~~2021. While the negative provision decreased year-over-year, the ($3.5) million of provision ~~expense~~ in the first quarter of ~~2020 as~~2022 was a result of ~~changes~~continued improvement in the macroeconomic ~~forecast. As of March 31, 2021, the macroeconomic~~ forecast ~~estimated significantly lower unemployment over the reasonable~~ and supportable forecast period of one year as compared to the forecast utilized during the first quarter of 2020, resulting in a decrease in the allowance for loan losses and allowance for loan commitments.certain qualitative factors. Non-performing loans were ~~0.36%~~0.38% of total loans as of March 31, ~~2021, decreasing~~2022, increasing from ~~0.38%~~0.36% of total loans at the end of the first quarter of ~~2020. Non-performing assets were 0.36% of total loans and other real estate and repossessed assets as of March 31, 2021, decreasing from 0.39% at the end of the first quarter of 2020.~~2021. Criticized and classified loans were ~~4.26%~~3.68% of total loans as of March 31, ~~2021, increasing~~2022, decreasing from ~~2.09%~~4.26% as of March 31, ~~2020,~~2021, primarily due to ~~recent adjustments to the internal loan classification system, which impacted risk grades, and downgrades in~~improvements within the Company’s hospitality loan portfolio. Past due loans at March 31, ~~2021~~2022 were ~~0.31%~~0.35% of total loans, compared to ~~0.46%~~0.31% at March 31, ~~2020.~~2021. Annualized net loan charge-offs decreased to ~~0.02% as of~~0% for the three months ended March 31, ~~2021~~2022 compared to ~~0.18% as of~~0.02% for the three months ended March 31, ~~2020.~~2021. (Please see the Allowance for Credit Losses – Loans and Loan Commitments section of this MD&A for additional discussion).

NON-INTEREST INCOME

TABLE 4. NON-INTEREST INCOME


	For The Three Months Ended March 31,											For The Three Months Ended March 31,
(unaudited, dollars in thousands)	2021		2020			$ Change			% Change			2022			2021		$ Change			% Change
Trust fees	$	7,631	$	6,952		$	679			9.8		$	7,835		$	7,631	$	204			2.7
Service charges on deposits		4,894		6,617			(1,723	)		(26.0	)		6,090			4,894		1,196			24.4
Electronic banking fees		4,365		4,254			111			2.6			5,345			4,365		980			22.5
Net securities brokerage revenue		1,524		1,679			(155	)		(9.2	)		2,220			1,524		696			45.7
Bank-owned life insurance		1,709		1,769			(60	)		(3.4	)		3,881			1,709		2,172			127.1
Net securities gains		279		1,491			(1,212	)		(81.3	)
Net securities (losses) gains													(650	)		279		(929	)		(333.0	)
Mortgage banking income		4,264		1,276			2,988			234.2			1,923			4,264		(2,341	)		(54.9	)
Net insurance services revenue		1,090		845			245			29.0			1,026			1,090		(64	)		(5.9	)
Debit card sponsorship income		646		708			(62	)		(8.8	)		—			646		(646	)		(100.0	)
Payment processing fees		713		680			33			4.9			742			713		29			4.1
Net gain on other real estate owned and other assets		175		169			6			3.6
Swap fee and valuation income		4,650		(102	)		4,752			4,658.8
Net (loss) gain on other real estate owned and other assets													(806	)		175		(981	)		(560.6	)
Net swap fee and valuation income													1,617			4,650		(3,033	)		(65.2	)
Other		1,268		1,671			(403	)		(24.1	)		1,159			1,268		(109	)		(8.6	)
Total non-interest income	$	33,208	$	28,009		$	5,199			18.6		$	30,382		$	33,208	$	(2,826	)		(8.5	)

Non-interest income is a significant source of revenue and an important part of Wesbanco’s results of operations, as it represents ~~22.2%~~22.0% of total revenue for the three months ended March 31, ~~2021.~~2022. 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 quarter of ~~2021,~~2022, non-interest income ~~increased $5.2~~decreased $2.8 million or ~~18.6%~~8.5% compared to the first quarter of ~~2020,~~2021, primarily due to a $3.0 million ~~or 234.2% increase~~decrease in ~~mortgage banking income and a $4.8 million increase in~~net swap fee and valuation income, and a $2.3 million decrease in mortgage banking income. The ~~increases~~decreases were ~~slightly~~somewhat offset by ~~the pandemic’s impact on~~a $2.2 million increase in bank-owned life insurance, a $1.2 million increase in service charges on deposits ~~which had~~and a ~~$1.7~~$1.0 million ~~or 26.0% decrease from the first quarter of 2020. Net securities gains also decreased $1.2 million or 81.3% from the first quarter of 2020.~~increase in electronic banking fees.

Trust fees increased ~~$0.7~~$0.2 million or ~~9.8%~~2.7% compared to the first quarter of ~~2020,~~2021, due to ~~a record~~ market value ~~of trust assets in the first quarter of 2021.~~appreciation and organic growth. Total trust assets were $5.4 billion at March 31, 2022 as compared to $5.2 billion at March 31, ~~2021 as compared to $4.1 billion at March 31, 2020.~~2021. As of March 31, ~~2021,~~2022, trust assets include managed assets of ~~$4.2~~$4.3 billion and non-managed (custodial) assets of ~~$1.0~~$1.1 billion. Assets managed for the WesMark Funds, a proprietary group of mutual funds that is advised by Wesbanco Trust and Investment Services, were $1.0 billion as of March 31, ~~2021~~2022 and ~~$816.2 million as of~~ March 31, ~~2020,~~2021, respectively, and are included in managed assets.

Service charges on deposits ~~decreased $1.7~~increased $1.2 million or ~~26.0%~~24.4% to ~~$4.9~~$6.1 million in the first quarter of ~~2021~~2022 as compared to the same period in ~~2020~~2021, as a result of increased general consumer spending over the prior period, due to higher ~~consumer deposit balances throughout~~customer demand for goods and services as business conditions improved from the ~~quarter associated with three rounds of stimulus payments to date and lower general consumer spending,~~pandemic, resulting in ~~fewer~~more eligible fee-generating transactions.

~~Net securities gains decreased $1.2~~ In addition, electronic banking fees, which include debit card interchange fees, increased $1.0 million or ~~81.3% in~~22.5% compared to the first quarter of 2021, also due to increased general consumer spending.

Bank-owned life insurance increased $2.2 million or 127.1% compared to the first quarter of 2021 due to an increase in mortality-related benefits received in the current period, as well as an increase in the cash surrender value from the purchase of an additional $40 million of bank-owned life insurance in the third quarter of 2021.

Net securities (losses) gains include both gains and losses on investment security transactions as well as market value adjustments on the Company's deferred compensation plan. For the three months ended March 31, 2022, net securities (losses) gains decreased $0.9 million or 333.0% compared to the same period of ~~2020,~~2021, due to ~~reduced securities sales, as approximately $218~~a $0.8 million ~~of mortgage-backed securities were sold~~decrease in the first quarter of 2020 at a net gain of $2.1 million to take advantage of market opportunities and to increase liquidity at the time. No securities were sold in the first quarter of 2021. Included in net securities gains were $0.2 million and ($1.3) million of market adjustments on the deferred compensation ~~plan for the three months ended March 31, 2021 and 2020, respectively, which~~plan. These market adjustments had an offsetting effect in employee benefits expense. No investment security sales occurred in either period.

Mortgage banking income ~~increased $3.0~~decreased $2.3 million or ~~234.2%~~54.9% in the first quarter of ~~2021~~2022 compared to the first quarter of ~~2020.~~2021, as Wesbanco retained more 1-to-4 family mortgages on the balance sheet, and total originations were lower in the first quarter of 2022 as compared to the prior year period, reflecting the change in economic conditions. For the first quarter of ~~2021,~~2022, mortgage production was ~~$317.3~~$269.0 million, which was ~~an increase~~a decrease of ~~47.2%~~17.6% from the comparable ~~2020~~2021 period. For the three months ended March 31, ~~2021, $214.6~~2022, $78.7 million in mortgages were sold into the secondary market at a net margin of ~~2.0%~~2.4% as compared to ~~$102.1~~$214.6 million at a net margin of ~~1.3%~~2.0% in the comparable ~~2020~~2021 period. Included in mortgage banking income and the calculation of net margin noted above are gains of $0.8 million and losses of $1.4 ~~million and $2.6~~ million from the fair value adjustments on mortgage loan commitments and related derivatives for the three months ended March 31, 2022 and 2021, ~~and 2020,~~ respectively.

Debit card sponsorship income, a non-essential revenue stream for Wesbanco that was acquired in the Old Line Bancshares, Inc. ~~(“OLBK”)~~ acquisition and generated $0.6 million of gross revenue in the first quarter of 2021, ~~has been~~was sold as of March 31, 2021 to another bank. The all-cash purchase price, which ~~will be~~is being paid out on a monthly basis over a two-year period up to a maximum of $2.8 million, is based on a 50%~~-50%~~ split of the monthly gross revenue earned by the purchasing bank. Wesbanco has recognized $0.4 million in revenue in the first three months of 2022 following the sale, which is recorded in net gain (loss) on the sale of other real estate owned and other assets.

~~Swap~~Net (loss) gain on other real estate owned and other assets decreased $1.0 million or 560.6% in the three months ended March 31, 2022 as compared to the same period in 2021, due to the market value decline on an investment made by Wesbanco’s Community Development Corporation in a start-up firm more than ten years ago that was acquired by a public company in 2021.

Net swap fee and valuation income, ~~increased $4.8~~which includes fair value adjustments, decreased $3.0 million or 65.2% in the first quarter of ~~2021~~2022 compared to the first quarter of ~~2020~~2021, due to ~~an increase~~a reduced volume of new swaps originated, resulting in ~~the~~less fee income, as well as lower fair value ~~of existing swaps.~~adjustments. For the three months ended March 31, ~~2021,~~2022, new swaps executed totaled $7.4 million in notional principal, resulting in $0.2 million of fee income, compared to new swaps executed of $65.1 million in notional principal resulting in $1.9 million of fee income ~~compared to new swaps executed of $135.6 million in notional principal resulting in $2.6 million of fee income~~ for the three months ended March 31, ~~2020.~~2021. Fair value adjustments on existing swaps for the three months ended March 31, ~~2021 and 2020~~2022 were $1.5 million as compared to $2.8 million ~~and ($2.8) million, respectively.~~ for the three months ended March 31, 2021.

NON-INTEREST EXPENSE

TABLE 5. NON-INTEREST EXPENSE


	For The Three Months Ended March 31,											For The Three Months Ended March 31,
(unaudited, dollars in thousands)	2021		2020			$ Change			% Change			2022		2021		$ Change			% Change
Salaries and wages	$	36,890	$	38,910		$	(2,020	)		(5.2	)	$	38,937	$	36,890	$	2,047			5.5
Employee benefits		10,266		10,373			(107	)		(1.0	)		9,158		10,266		(1,108	)		(10.8	)
Net occupancy		7,177		7,084			93			1.3			7,234		7,177		57			0.8
Equipment		6,765		6,039			726			12.0
Equipment and software													8,011		6,765		1,246			18.4
Marketing		2,384		1,138			1,246			109.5			2,421		2,384		37			1.6
FDIC insurance		1,282		2,113			(831	)		(39.3	)		1,522		1,282		240			18.7
Amortization of intangible assets		2,896		3,374			(478	)		(14.2	)		2,598		2,896		(298	)		(10.3	)
Restructuring and merger-related expenses		851		5,164			(4,313	)		(83.5	)		1,593		851		742			87.2
Franchise and other miscellaneous taxes		2,997		3,742			(745	)		(19.9	)		2,995		2,997		(2	)		(0.1	)
Consulting, regulatory, accounting and advisory fees		3,378		2,841			537			18.9			3,687		3,378		309			9.1
ATM and electronic banking interchange expenses		2,202		1,789			413			23.1			1,419		2,202		(783	)		(35.6	)
Postage and courier expenses		1,268		1,257			11			0.9			1,222		1,268		(46	)		(3.6	)
Legal fees		862		815			47			5.8			935		862		73			8.5
Communications		912		1,024			(112	)		(10.9	)		1,066		912		154			16.9
Supplies		1,019		1,217			(198	)		(16.3	)		866		1,019		(153	)		(15.0	)
Other real estate owned and foreclosure expenses		112		(65	)		177			272.3			258		112		146			130.4
Other		5,066		4,518			548			12.1			3,626		5,066		(1,440	)		(28.4	)
Total non-interest expense	$	86,327	$	91,333		$	(5,006	)		(5.5	)	$	87,548	$	86,327	$	1,221			1.4

Non-interest expense in the first quarter of ~~2021 decreased $5.0~~2022 increased $1.2 million or ~~5.5%~~1.4% compared to the same quarter in ~~2020,~~2021, principally ~~due to~~from a $2.0 million ~~reduction~~increase in salaries and wages, ~~as well as~~ a ~~$4.3~~$1.2 million increase in equipment and software costs and a $0.7 million increase in restructuring and merger-related expenses. These increases were slightly offset by a $1.1 million decrease in ~~restructuring~~employee benefits expense, a $0.8 million decrease in ATM and ~~merger-related~~electronic banking interchange expenses and a $1.4 million decrease in other operating expenses. In the first quarter of ~~2021,~~2022, there were $1.6 million of restructuring expenses related to the branch optimization strategy as compared to $0.9 million of restructuring expenses related to the branch optimization strategy and ~~upcoming~~the core systems conversion ~~as compared to $5.2 million of merger-related expenses related to the OLBK acquisition~~ in the first quarter of ~~2020.~~2021. Excluding restructuring and merger-related expenses, non-interest expense ~~decreased $0.7~~increased $0.5 million or ~~0.8%~~0.6% from the first quarter of ~~2020~~2021 to the first quarter of ~~2021.~~2022.

Salaries and wages ~~decreased~~increased $2.0 million or ~~5.2%~~5.5% in the first quarter of ~~2021~~2022 from the first quarter of ~~2020~~2021 due to decreases in loan-contra costs and higher salary expense related to the normal merit increases that occurred mid-year 2021. Loan contra-costs decreased by $1.1 million or 24.6% from the first quarter of 2021 to the first quarter of 2022 due to a ~~7.9%~~reduction in loan volume. These increases to salary expense were mitigated by a 1.4% reduction in full time equivalent ~~(“FTE”)~~ employees ~~resulting from cost savings realized~~ from the ~~OLBK acquisition and~~first quarter of 2021 as a result of the closure of branches ~~early~~at various points in ~~the first quarter of~~ 2021, as the branch optimization strategy was ~~executed.~~ executed, and a temporary hiring freeze earlier in 2021.

Employee benefits expense ~~remained relatively flat over the same time period.~~

~~Equipment costs increased $0.7~~decreased $1.1 million or ~~12.0% compared to~~10.8% in the first quarter of 2020, due to continuous improvements in technology and communication infrastructure, software costs as well as loan and deposit origination and customer support platforms. Specifically, service agreements and data processing expenses increased $1.0 million or 30.6%2022 from the first quarter of ~~2020~~2021 due primarily to a $0.5 million decrease in pension expense and a $0.9 reduction in deferred compensation plan expense, which mostly relate to the decline in the market value of the underlying investments. These decreases were slightly offset by increased recruiting expense and higher workers compensation expense, due to a premium refund received in the first quarter of 2021.

Equipment and software costs increased $1.2 million or 18.4% compared to the first quarter of 2021, due primarily to the ~~Company’s continued growth.~~

~~Marketing expenses increased $1.2 million or 109.5% compared to~~movement of online banking costs following the ~~first quarter of 2020 due to increased advertising and brand awareness campaigns. Some marketing-related activities were delayed from 2020 due to the COVID-19 pandemic.~~

FDIC insurance decreased $0.8 million or 39.3% compared to the first quarter of 2020, as continued efforts to update credit score information on acquired loan customers has favorably affected the assessment ratecore conversion in the ~~first~~third quarter of 2021 ~~as well as a higher capital base and~~from other ~~accrual adjustments in the prior year.~~operating expenses.

Restructuring and merger-related expenses in the first quarter of ~~2021~~2022 totaled ~~$0.9~~$1.6 million, ~~a decrease~~an increase of ~~$4.3~~$0.7 million from the first quarter of ~~2020.~~2021. The ~~$0.9 million of~~ expenses in the first quarter of ~~2021~~2022 consisted of ~~$0.7 million in expenses related to the upcoming core conversion, including~~fixed asset writedowns and lease termination ~~fees of existing contracts, and $0.2 million in branch closure and severance~~ expenses associated with the upcoming closure of eleven additional branches ~~early~~later in ~~the quarter~~2022 as a result of the continued execution of the branch optimization strategy. The restructuring and merger-related expenses in the first quarter of ~~2020~~2021 totaling ~~$5.2~~$0.9 million ~~related to the OLBK acquisition.~~

~~Franchise and miscellaneous taxes decreased~~were comprised of $0.7 million in core conversion-related expenses and $0.2 million in branch closure and severance expenses associated with the closure of 21 branches early in the first quarter of 2021.

ATM and electronic banking interchange expenses decreased by $0.8 million or ~~19.9%~~35.6% in the first quarter of 2022 from the first quarter of ~~2020~~2021 due to a reduction in ACH and ATM processing charges related to a change in providers that occurred in conjunction with our core banking software system conversion in the ~~elimination~~third quarter of ~~Kentucky bank franchise taxes effective on January 1,~~ 2021. ~~Wesbanco is now subject to Kentucky state income taxes which are reflected within the provision for income taxes on the income statement, and is part of the Company’s effective tax rate calculation.~~

~~Consulting, regulatory, accounting and advisory fees increased $0.5~~Other operating expenses decreased by $1.4 million or ~~18.9%~~28.4% in the first quarter of 2022 from the first quarter of ~~2020~~2021 due mostly to ~~increased underwriting~~the previously mentioned movement of online banking costs, following the core conversion in 2021, into equipment and ~~processing fees from a higher volume of mortgage originations in the current period.~~ software costs.

INCOME TAXES

The provision for income taxes was $9.9 million for the three months ended March 31, 2022, which is an $8.3 million decrease compared to $18.2 million for the three months ended March 31, ~~2021, which is a $14.6 million increase compared to $3.6 million for the three months ended March 31, 2020.~~2021. The ~~increase~~decrease in the provision for income taxes is due to a $37.3 million decrease in pre-tax income from the first quarter of 2021 and an ~~increase~~accompanying decrease in the effective tax rate to 18.3% in the first quarter of 2022 compared to 19.9% in the first quarter of ~~2021 compared to 13.4% in the first quarter of 2020, resulting from higher~~2021. This lower pre-tax income was primarily due to ~~the~~a $28.0 million negative provision for credit losses recorded in the first quarter of ~~2021.~~2021, as compared to a $3.4 million negative provision in the first quarter of 2022.

FINANCIAL CONDITION

Total assets and deposits increased ~~3.8%~~1.0% and ~~6.9%~~1.7%, respectively, while shareholders’ equity ~~increased 1.0%~~decreased 5.4%, compared to December 31, ~~2020.~~2021. Total securities increased ~~$909.3~~$49.6 million or ~~33.4%~~1.2% from December 31, ~~2020~~2021 to March 31, ~~2021,~~2022, primarily driven by the purchase of mortgage-backed securities and municipal ~~obligations with additional liquidity provided by~~ ~~CARES Act~~ ~~individual and family payments, as well as, deposits from small businesses obtaining loans from the PPP program.~~obligations. The securities’ increase was partially offset by a ~~$28.8~~$139.9 million ~~decrease~~increase in unrealized ~~gains~~losses in the available-for-sale portfolio. Total portfolio loans, ~~decreased~~excluding PPP loans, increased $85.9 million or ~~0.8%~~0.9% as ~~residential real estate, home equity and consumer loan pay downs outpaced~~ new originations ~~and commercial line usage decreased to 32.3% from 33.9% at year-end, which were partially offset by new PPP-related commercial originations outpacing loan forgiveness~~outpaced pay downs. Forgiveness related to the 2020 and 2021 PPP loan ~~program.~~programs totaled $86.1 million through the first three months of 2022. Deposits increased ~~$857.6~~$232.0 million from year-end, resulting from increases of ~~9.8%~~5.3%, ~~7.2%~~4.5%, and ~~5.1%~~1.3% in ~~demand~~money market deposits, savings deposits, and ~~money market~~demand deposits, respectively, which were partially offset by a ~~3.9%~~6.3% decrease in certificates of deposit. The growth in transaction-based accounts is primarily attributable to ~~CARES Act stimulus funds received,~~ increased personal savings, ~~and reduced customer spending,~~ focused retail and business strategies to obtain more account relationships and customers’ preferences for shorter-term maturities. ~~The transaction accounts also increased from business customers obtaining loans from the PPP loan program and depositing proceeds in their checking accounts.~~

Deposits were also somewhat 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. The decrease in certificates of deposit is a result of lower overall rates and management periodically offering ~~lower than median~~lower-than-median competitive rates for maturing certificates of deposit ~~and~~as well as customer preferences for other deposit ~~types, which was partially offset by a $2.3 million increase in CDARS® balances.~~types. Total borrowings ~~decreased 22.3%~~increased 22.8% or ~~$219.6~~$104.5 million during the first three months of ~~2021~~2022 primarily as ~~additional liquidity permitted~~ the result of a $150.0 million issuance of subordinated debentures at the parent company as qualifying Tier 2 risk-based capital and a $16.6 million increase in other short-term borrowings, which were partially offset by the $60.0 million pay down of maturing FHLB ~~advances by $115.0 million, coupled with a $104.7 million decrease in other short-term borrowings.~~

advances. Total shareholders’ equity ~~increased~~decreased approximately ~~$28.8~~$145.9 million or ~~1.0%~~5.4%, compared to December 31, ~~2020,~~2021, primarily due to a $106.2 million decrease in other comprehensive income and the repurchase of common shares totaling $62.3 million, which were partially offset by net income exceeding dividends for the period by $48.1 million, which was partially offset by a $21.6 million decrease in other comprehensive income. The Board of Directors also approved an additional stock repurchase plan for the purchase of up to an additional 1.7 million shares on April 22, 2021, bringing total shares available for repurchase to approximately 5% of outstanding shares.$21.1 million.

~~SECURITIES~~

SECURITIES

TABLE 6. COMPOSITION OF SECURITIES (1)


	March 31,			December 31,
(unaudited, dollars in thousands)	2022			2021			Change ($)			Change (%)
Equity securities (at fair value)	$	12,757		$	13,466		$	(709	)		(5.3	)
Available-for-sale debt securities (at fair value)
U.S. Government sponsored entities and agencies		240,497			236,978			3,519			1.5
Residential mortgage-backed securities and collateralized mortgage obligations of government sponsored entities and agencies		2,159,454			2,285,213			(125,759	)		(5.5	)
Commercial mortgage-backed securities and collateralized mortgage obligations of government sponsored entities and agencies		394,089			367,493			26,596			7.2
Obligations of states and political subdivisions		100,273			106,340			(6,067	)		(5.7	)
Corporate debt securities		17,060			17,438			(378	)		(2.2	)
Total available-for-sale debt securities	$	2,911,373		$	3,013,462		$	(102,089	)		(3.4	)
Held-to-maturity debt securities (at amortized cost)
U.S. Government sponsored entities and agencies	$	5,731		$	5,944		$	(213	)		(3.6	)
Residential mortgage-backed securities and collateralized mortgage obligations of government sponsored entities and agencies		53,989			58,147			(4,158	)		(7.2	)
Obligations of states and political subdivisions		1,067,214			907,649			159,565			17.6
Corporate debt securities		30,268			33,083			(2,815	)		(8.5	)
Total held-to-maturity debt securities		1,157,202			1,004,823			152,379			15.2
Total securities	$	4,081,332		$	4,031,751		$	49,581			1.2
Available-for-sale and equity securities:
Weighted average yield at the respective period end (2)		1.69	%		1.55	%
As a % of total securities		71.6	%		75.1	%
Weighted average life (in years)		5.4			5.0
Held-to-maturity securities:
Weighted average yield at the respective period end (2)		2.86	%		2.92	%
As a % of total securities		28.4	%		24.9	%
Weighted average life (in years)		8.4			5.6
Total securities:
Weighted average yield at the respective period end (2)		2.01	%		1.89	%
As a % of total securities		100.0	%		100.0	%
Weighted average life (in years)		6.2			5.2

March 31,

December 31,

(unaudited, dollars in thousands)

2021

2020

Change ($)

Change (%)

Equity securities (at fair value)

$
13,123

$
13,047

$
76

0.6

Available-for-sale debt securities (at fair value)

U.S. Treasury

29,997

39,982

(9,985
)

(25.0
)
U.S. Government sponsored entities and agencies

176,330

211,682

(35,352
)

(16.7
)
Residential mortgage-backed securities and
   collateralized mortgage obligations of
   government sponsored entities and agencies

2,140,793

1,264,737

876,056

69.3

Commercial mortgage-backed securities and
   collateralized mortgage obligations of
   government sponsored entities and agencies

291,681

320,098

(28,417
)

(8.9
)
Obligations of states and political subdivisions

111,798

115,762

(3,964
)

(3.4
)
Corporate debt securities

24,613

25,875

(1,262
)

(4.9
)
Total available-for-sale debt securities

$
2,775,212

$
1,978,136

$
797,076

40.3

Held-to-maturity debt securities (at amortized cost)

U.S. Government sponsored entities and agencies

$
7,611

$
7,779

$
(168
)

(2.2
)
Residential mortgage-backed securities and
   collateralized mortgage obligations of
   government sponsored entities and agencies

80,376

89,151

(8,775
)

(9.8
)
Obligations of states and political subdivisions

692,616

601,128

91,488

15.2

Corporate debt securities

33,137

33,154

(17
)

(0.1
)
Total held-to-maturity debt securities

813,740

731,212

82,528

11.3

Total securities

$
3,602,075

$
2,722,395

$
879,680

32.3

Available-for-sale and equity securities:

Weighted average yield at the respective period end ⁽²⁾

1.78
%

2.09
%

As a % of total securities

77.4
%

73.1
%

Weighted average life (in years)

4.6

3.4

Held-to-maturity securities:

Weighted average yield at the respective period end ⁽²⁾

3.19
%

3.35
%

As a % of total securities

22.6
%

26.9
%

Weighted average life (in years)

5.1

3.8

Total securities:

Weighted average yield at the respective period end ⁽²⁾

2.10
%

2.43
%

As a % of total securities

100.0
%

100.0
%

Weighted average life (in years)

4.7

3.5

(1)

At March 31, 2022 and December 31, 2021, there were no holdings of any one issuer, other than U.S. government sponsored entities and its agencies, in an amount greater than 10% of Wesbanco’s shareholders’ equity.

(2)

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

⁽¹⁾	At March 31, 2021 and December 31, 2020, there were no holdings of any one issuer, other than U.S. government sponsored entities and its agencies, in an amount greater than 10% of Wesbanco’s shareholders’ equity.

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

Total investment securities, which are a source of liquidity for Wesbanco as well as a contributor to interest income, increased ~~$879.7~~by $49.6 million or ~~32.3%~~1.2% from December 31, ~~2020~~2021 to March 31, ~~2021, and represented 21.1% of total assets at period-end as compared to 16.6% at December 31, 2020.~~2022. Through the first three months of ~~2021,~~the year, the available-for-sale portfolio ~~increased $797.1~~decreased by $102.1 million or ~~40.3%~~3.4%, primarily due to ~~excess liquidity from stimulus deposits and increased calls~~the decrease in market prices as rates began to rise, particularly in the second half of ~~agency and municipal securities funding $1.1 billion in purchases of residential mortgage-backed securities and collateralized mortgage obligations, while~~ the first quarter. The held-to-maturity portfolio increased ~~$82.5~~by $152.4 million or ~~11.3%~~15.2% due to ~~$110.3~~$177.0 million in purchases of municipal bonds. The weighted average yield of the portfolio ~~decreased by 33~~increased 12 basis points from ~~2.43%~~1.89% at December 31, ~~2020~~2021 to ~~2.10%~~2.01% at March 31, ~~2021,~~2022, primarily due to ~~calls~~decreased prepayment speeds on mortgage-backed securities as a result of ~~legacy~~the market rate increase, increased purchases of higher yielding municipal bonds and increases in the indices tied to variable rate ~~agency and municipal~~securities.

Total gross unrealized securities ~~and~~losses increased $180.6 million, from $40.3 million at December 31, 2021 to $220.9 million at March 31, 2022. The increase in unrealized losses from December 31, 2021 was due to an increase in market rates in 2022 to date, causing market prices to decrease on most securities purchased or acquired during the ~~previously mentioned purchases~~lower-yielding environment of the prior two years. Wesbanco did not allocate any allowance for credit losses to the unrealized losses on available-for-sale debt securities at ~~lower current market rates.~~ March 31, 2022. Please refer to Note 4, “Securities,” of the Consolidated Financial Statements for additional information. Wesbanco does not have any investments in private mortgage-backed securities or those that are collateralized by sub-prime mortgages, nor does Wesbanco have any exposure to collateralized debt obligations or government-sponsored enterprise preferred stocks.

Net unrealized ~~gains~~losses on available-for-sale securities included in accumulated other comprehensive income, net of tax, as of March 31, ~~2021~~2022 and December 31, ~~2020~~2021 were ~~$24.8~~$111.0 million and ~~$46.9~~$4.7 million, respectively. ~~The~~These net unrealized pre-tax ~~gains~~losses represent temporary fluctuations resulting from changes in market rates in relation to fixed yields in the available-for-sale portfolio, and on an ~~after tax-basis~~after-tax basis are accounted for as an adjustment to other comprehensive income in shareholders’ equity. Net unrealized pre-tax (losses) gains in the held-to-maturity portfolio, which are not accounted for in other comprehensive income, were ~~$26.1~~($64.2) million at March 31, ~~2021,~~2022, compared to ~~$37.0~~$23.6 million at December 31, ~~2020.~~2021. With approximately ~~23%~~28% of the investment portfolio in the held-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 available-for-sale category. ~~The decrease in unrealized gains from year-end are due to an increase in market rates towards the end of the quarter.~~

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.

The corporate and municipal bonds in Wesbanco’s held-to-maturity debt portfolio are analyzed quarterly to determine if an allowance for current expected credit losses is warranted. Wesbanco uses a database of historical financials of all corporate and municipal ~~portfolio represented 22.3%~~issuers and actual historic default and recovery rates on rated and non-rated transactions to estimate expected credit losses on an individual security basis. The expected credit losses are adjusted quarterly and are recorded in an allowance for expected credit losses on the balance sheet, which is deducted from the amortized cost basis of the ~~overall~~held-to-maturity portfolio as a contra asset. The losses are recorded on the income statement in the provision for credit losses. Accrued interest receivable on held-to-maturity securities, ~~portfolio~~which was $8.3 million and $7.0 million as of March 31, ~~2021 compared to 26.3% as of~~2022 and December 31, ~~2020,~~2021, respectively, is excluded from the estimate of credit losses. Held-to-maturity investments in U.S. Government sponsored entities and ~~it carries different risks that~~agencies as well as mortgage-backed securities and collateralized mortgage obligations, which are ~~not as prevalent in other security types contained~~all either issued by a direct governmental entity or a government-sponsored entity, have no historical evidence supporting expected credit losses; therefore, Wesbanco has estimated these losses at zero, and will monitor this assumption in the ~~portfolio. The following table presents the allocation of the individual bonds in the municipal bond portfolio based on the combined ratings of two major bond credit rating agencies (at fair value):~~ future for any economical or governmental policies that could affect this assumption.

~~TABLE 7. MUNICIPAL BOND RATINGS~~

March 31, 2021

December 31, 2020

(unaudited, dollars in thousands)

Amount

% of Total

Amount

% of Total

Municipal bonds (at fair value) ⁽¹⁾:

Investment Grade - Prime

$
89,255

10.8

$
72,861

9.8

Investment Grade - High

577,740

70.1

511,013

68.4

Investment Grade - Upper Medium

150,539

18.2

152,704

20.4

Investment Grade - Lower Medium

3,040

0.4

3,072

0.4

Non-Investment Grade - Speculative

—

—

—

—

Not rated by either agency

4,530

0.5

7,354

1.0

Total municipal bond portfolio

$
825,104

100.0

$
747,004

100.0

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

Wesbanco’s municipal bond portfolio at March 31, 2021 consists of $215.2 million of taxable and $609.9 million of tax-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, 2021

December 31, 2020

(unaudited, dollars in thousands)

Amount

% of Total

Amount

% of Total

Municipal bond type:

General Obligation

$
569,910

69.1

$
518,274

69.4

Revenue

255,194

30.9

228,730

30.6

Total municipal bond portfolio

$
825,104

100.0

$
747,004

100.0

Municipal bond issuer:

State Issued

$
47,718

5.8

$
46,843

6.3

Local Issued

777,386

94.2

700,161

93.7

Total municipal bond portfolio

$
825,104

100.0

$
747,004

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, 2021:

~~TABLE 9. CONCENTRATION OF MUNICIPAL SECURITIES~~

March 31, 2021

(unaudited, dollars in thousands)

Fair Value

% of Total

Pennsylvania

$
166,551

20.2

Ohio

94,072

11.4

California

82,247

10.0

Texas

72,075

8.7

Kentucky

40,435

4.9

All other states

369,724

44.8

Total municipal bond portfolio

$
825,104

100.0

⁽¹⁾	~~Wesbanco’s municipal bond portfolio contains obligations in the State of West Virginia totaling $36.2 million or 4.4% 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 7, “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 CRE loans and other 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, such as the current COVID-19 pandemic crisis, that increase the risk of default and the potential loss in the event of default, to understand the impact on the Bank’s earnings and capital.

Commercial loan risk grades are determined based on an evaluation of the relevant characteristics of each loan, assigned at inception 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 sufficiency, reliability and sustainability of the primary source of repayment and overall financial strength of the borrower. The rating system more heavily weights the debt service coverage, leverage and loan-to-value factors to derive the risk grade. Other factors that are considered at a lesser weighting include management, industry or property-type risks, payment history, collateral and personal guarantees.

TABLE 10. COMPOSITION OF LOANS (1)


	March 31, 2022				December 31, 2021
(unaudited, dollars in thousands)	Amount		% of Loans		Amount		% of Loans
Commercial real estate:
Land and construction	$	857,869		8.8	$	833,880		8.5
Improved property		4,722,213		48.4		4,705,088		48.2
Total commercial real estate		5,580,082		57.2		5,538,968		56.7
Commercial and industrial		1,436,543		14.7		1,427,645		14.7
Commercial and industrial - PPP		76,535		0.8		162,675		1.7
Residential real estate		1,767,064		18.1		1,721,378		17.6
Home equity		592,872		6.1		605,682		6.2
Consumer		280,176		2.9		277,130		2.8
Total portfolio loans		9,733,272		99.8		9,733,478		99.7
Loans held for sale		15,959		0.2		25,277		0.3
Total loans	$	9,749,231		100.0	$	9,758,755		100.0

March 31, 2021

December 31, 2020

(unaudited, dollars in thousands)

Amount

% of Loans

Amount

% of Loans

Commercial real estate:

Land and construction

$
642,017

5.9

$
668,277

6.1

Improved property

5,070,725

46.7

5,037,115

46.0

Total commercial real estate

5,712,742

52.6

5,705,392

52.1

Commercial and industrial

1,598,921

14.7

1,681,182

15.4

Commercial and industrial - PPP

823,814

7.6

726,256

6.6

Residential real estate

1,644,422

15.2

1,720,961

15.7

Home equity

634,018

5.8

646,387

5.9

Consumer

289,395

2.7

309,055

2.8

Total portfolio loans

10,703,312

98.6

10,789,233

98.5

Loans held for sale

153,520

1.4

168,378

1.5

Total loans

$
10,856,832

100.0

$
10,957,611

100.0

(1)

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

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

Total portfolio loans decreased ~~$100.8~~$0.2 million ~~or 0.9%~~ from December 31, ~~2020,~~2021, while they ~~increased $353.7~~decreased $970.0 million or ~~3.4%~~9.1% over the last twelve months. Most of the loan ~~growth~~decrease was due to the ~~origination~~forgiveness of ~~$1.2 billion~~$807.2 million of PPP loans ~~during~~over the last twelve months, of which ~~$823.8~~$76.5 million remain in the portfolio as of March 31, ~~2021.~~2022. Excluding PPP loans, total portfolio loans decreased over the last twelve months by ~~3.5% as~~2.3%, reflecting continued low commercial line ~~usage~~of credit utilization and the higher than anticipated payoffs of commercial real estate loans, which are down 2.3%, and commercial and industrial loans, which are down 10.2%. Larger payoffs have also caused a 6.5% decline in HELOC balances, and consumer loan demand has decreased slightly at 3.2%. While there have been year-over-year decreases in these loan segments, the most recent quarter is a promising start to 2022 with loan growth, excluding PPP loans, in all three commercial loan categories, consumer loans, and residential real estate. Excluding PPP loans, total portfolio loans increased 3.6% on an annualized basis from December 31, 2021. Residential real estate also provided a ~~higher percentage of new residential~~partial offset to the year-over-year decrease, as it increased 7.5% due to continued efforts to sell fewer loans ~~originated were sold~~ into the secondary ~~market as opposed~~market. Land and construction loans have also improved year-over-year by 33.6% due to ~~holding them~~increased originations. Loan growth will continue to be enhanced through the opening of new loan production offices in the ~~residential loan portfolio. Consumer loan demand also decreased as a result of~~Nashville and Indianapolis areas in the pandemic reducing consumer spending. Slightly offsetting the total decrease was 1.9% of growth in commercial real estate. Commercial and industrial loans decreased 11.3%, due primarily to the lower line usage mentioned above and lower overall demand. Residential real estate loans decreased 14.8% over the last twelve months, due to a greater portion of new originations sold into the secondary market and a greater portion of existing loans refinanced with other banks, while home equity loans were also refinanced into first ~~mortgages due to customer preferences for fixed rate loans.~~ quarter.

Total loan commitments of ~~$3.4~~$4.2 billion, including loans approved but not closed, increased ~~$147.8~~$417.2 million or ~~4.6%~~10.9% from December 31, ~~2020~~2021 due primarily to increases in loans approved but not closed and ~~contingent obligations.~~availabilities under lines of credit. The line utilization percentage for the commercial portfolio was ~~32.3%~~35.7% at March 31, ~~2021~~2022 compared to ~~33.9%~~34.5% as of December 31, ~~2020.~~2021.

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.

Loans held for sale at both March 31, ~~2021~~2022 and December 31, ~~2020~~2021 are originated residential mortgages that are committed to be sold into the secondary market. Loans held for sale decreased by $9.3 million or 36.9% from December 31, 2021 due to continued efforts to keep more originations in the loan portfolio and lower originations.

Wesbanco has participated in the PPP loan program as originally established by the CARES Act. As of March 31, ~~2021,~~2022, the Company has funded nearly ~~10,500~~11,300 loans totaling $1.2 billion to qualifying small businesses, non-profits and organizations throughout our six-state footprint. The loans carry an interest rate of 1%, are generally for a two-year or five-year maturity, and were originated with a percentage fee paid by the SBA directly to the Bank depending on the size of the loan originated. At March 31, ~~2021,~~2022, remaining unaccreted fees, net of deferred origination costs, were ~~$21.4 million. This total~~$2.9 million, substantially all of which is ~~comprised of $14.8 million remaining on the~~attributable to 2021 ~~originated PPP loans and $6.6 million remaining on the 2020~~ originated PPP loans. The loans are subject to forgiveness by the SBA under certain defined ~~circumstances, and it is anticipated~~circumstances; a high percentage of such loans ~~will meet~~have met such requirements (as revised) ~~over the next few~~in previous quarters, ~~with $0.4 billion of 2020 originated~~and most remaining PPP loans ~~having~~are anticipated to meet these requirements as well. The 2020-originated PPP loans totaling $850.9 million, or over 99% of those originations, and $298.8 million of 2021-originated PPP loans, or 80% of those originations, have been forgiven as of March 31, ~~2021.~~2022.

~~TABLE 11. COMMERCIAL EXPOSURE BY INDUSTRY~~

March 31, 2021

Land and Construction

Improved Property

Commercial and Industrial

PPP

(unaudited, dollars in thousands)

Balance

Commitment

Balance

Commitment

Balance

Commitment

Loan Balance

Total Loan Balance

Total
Exposure

% of
Capital (1)

Agriculture and farming

$
16,103

$
2,118

$
2,956

$
883

$
7,464

$
5,430

$
4,273

$
30,796

$
39,227

2.3

Energy

4,945

1,716

41,008

1,097

73,969

58,236

8,898

128,820

189,869

11.1

Construction

92,940

65,819

139,810

29,331

155,049

187,173

161,838

549,637

831,960

48.7

Manufacturing

378

1,753

92,544

12,523

154,854

118,303

81,921

329,697

462,276

27.1

Wholesale and distribution

190

10

45,431

2,984

115,923

74,829

26,802

188,346

266,169

15.6

Retail

4,499

4,226

272,063

19,289

91,701

82,374

40,641

408,904

514,793

30.2

Transportation and warehousing

17,272

1,491

81,094

2,053

39,610

13,844

24,660

162,636

180,024

10.5

Information and communications

1,485

115

10,335

121

7,610

8,281

3,294

22,724

31,241

1.8

Finance and insurance

557

108

13,229

2,410

79,907

135,295

7,567

101,260

239,073

14.0

Equipment leasing

—

—

21,366

498

37,917

35,712

11,954

71,237

107,447

6.3

Real estate - 1-4 family

26,639

8,398

286,645

10,488

48,925

3,764

—

362,209

384,859

22.5

Real estate - multi-family

224,196

172,055

520,366

9,043

12,113

1

—

756,675

937,774

54.9

Real estate - other retail

1,216

1,364

231,445

3,767

5,356

—

—

238,017

243,148

14.2

Real estate - shopping center

11,383

1,156

301,017

9,205

—

—

—

312,400

322,761

18.9

Real estate - office building

12,836

3,501

514,092

18,879

14,569

2,802

—

541,497

566,679

33.2

Real estate - commercial/manufacturing

5,090

463

352,702

10,253

10,992

13

—

368,784

379,513

22.2

Real estate - residential buildings

42,273

92,604

129,156

40,851

25,662

16,560

7,107

204,198

354,213

20.7

Real estate - other

51,619

18,568

432,182

90,209

49,664

33,450

7,836

541,301

683,528

40.0

Services

5,736

6,639

200,117

5,121

160,939

109,359

139,532

506,324

627,443

36.8

Schools and education services

23,667

380

33,712

604

99,832

15,720

17,867

175,078

191,782

11.2

Healthcare

45,464

41,207

358,387

8,960

125,079

67,010

103,898

632,828

750,005

43.9

Entertainment and recreation

1,305

119

48,351

1,657

13,397

3,838

12,675

75,728

81,342

4.8

Hotels

9,674

8,980

711,117

13,728

6,478

1,032

22,963

750,232

773,972

45.3

Other accommodations

1,052

6,193

32,238

319

4,034

383

765

38,089

44,984

2.6

Restaurants

3,699

5,399

98,784

1,877

58,816

24,617

64,094

225,393

257,286

15.1

Religious organizations

4,006

537

74,896

2,516

37,172

22,165

7,667

123,741

148,959

8.7

Government

33,332

4,327

18,327

1,657

132,444

31,544

6,260

190,363

227,891

13.3

Unclassified

461

2,907

7,355

29,816

29,445

60,838

61,302

98,563

192,124

11.3

Total commercial loans

$
642,017

$
452,153

$
5,070,725

$
330,139

$
1,598,921

$
1,112,573

$
823,814

$
8,135,477

$
10,030,342

587.5

⁽¹⁾	~~Represents Bank’s total risk-based capital.~~

~~TABLE 12. COMMERCIAL LOANS MODIFIED UNDER CARES ACT BY INDUSTRY~~

March 31, 2021

Land and Construction

Improved Property

Commercial and Industrial

Percent Modified

(unaudited, dollars in thousands)

Balance

Commitment

Balance

Commitment

Balance

Commitment

Total Loan Balance

Total
Exposure

Balance

Exposure

Manufacturing

$
—

$
—

$
—

$
—

$
835

$
—

$
835

$
835

0.3%

0.2%

Hotels

—

—

152,045

216

—

—

152,045

152,261

20.3%

19.7%

Total modified commercial loans

$
—

$
—

$
152,045

$
216

$
835

$
—

$
152,880

$
153,096

1.9%

1.5%

Wesbanco met the needs of the communities it serves by providing appropriate relief tailored to the individual needs of the customer, ranging from three months of interest-only for those minimally impacted, up to and including full principal and interest deferral for six months for those significantly impacted, while also providing additional tailored relief to the hospitality industry where appropriate. The relief was provided in as many as three phases depending on the circumstances.

Under the CARES Act, Wesbanco ~~has~~ modified approximately ~~3,550~~3,553 loans totaling $2.2 billion, ~~in 2020,~~ of which a total of ~~$155.3~~$51.5 million, representing ~~1.5%~~0.5% of total portfolio loans, ~~are currently~~remain in ~~their~~ deferral ~~period~~ as of March 31, ~~2021. The deferrals as~~2022. As of March 31, 2021 consisted of $152.9 million of commercial loans, representing 1.9% of the commercial loan portfolio, with a majority of the other deferrals occurring in the residential real estate portfolio. An2022, an additional ~~$98.8~~$96.4 million of commercial loans had various payment terms modified in exchange for enhancements beneficial to the Bank which were permanent improvements to the credit facility. Changes include an increase in floor rates, increase in guarantors and duration of guarantees and a change in covenants. None of the aforementioned loans were considered delinquent or on non-accrual status as of March 31, ~~2021.~~ 2022.

All of the real estate sectors combined represent the largest industry exposure at $3.9 billion, of which multi-family, office buildings and 1-4 families are the largest categories within real estate. Multi-family makes up $937.8 million or 54.9% of total risk-based capital, office buildings are $566.7 million or 33.2% of total risk-based capital and 1-4 families are $384.9 million or 22.5% of total risk-based capital.

~~The construction sectors combined represent the second largest industry exposure at $832.0 million or 48.7% of risk-based capital.~~42

The hotel sector represents the third largest industry exposure at $774.0 million or 45.3% of risk-based capital. For loan modifications allowed under the CARES Act, there were $152.0 million or 8.9% of total risk-based capital of hotel loans in deferral as of March 31, 2021. The majority of these loans were deferred for up to twelve months based on specific criteria related to the borrower.

~~Healthcare represents the fourth largest industry exposure at $750.0 million or 43.9% of total risk-based capital.~~

~~TABLE 13. COMMERCIAL LOANS MODIFIED UNDER CARES ACT BY MODIFICATION TYPE~~

March 31, 2021

Three Months Principal & Interest Plus Three Months Principal Only Deferral

Phase Three Deferral

(unaudited, in thousands)

Loan
Balance

Loan
Balance

Total Loan Balance

Manufacturing

$
835

$
—

$
835

Entertainment and recreation

—

152,045

152,045

Total modified commercial loans

$
835

$
152,045

$
152,880

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

Non-performing assets consist of non-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 ~~14.~~11. NON-PERFORMING ASSETS


(unaudited, dollars in thousands)	March 31, 2022			December 31, 2021
Non-accrual loans:
Commercial real estate - land and construction	$	73		$	73
Commercial real estate - improved property		7,391			7,715
Commercial and industrial		4,592			5,064
Residential real estate		15,512			17,190
Home equity		5,319			5,163
Consumer		485			537
Total non-accrual loans (1)		33,372			35,742
TDRs accruing interest:
Commercial real estate - land and construction		82			—
Commercial real estate - improved property		367			374
Commercial and industrial		187			192
Residential real estate		2,797			2,875
Home equity		266			277
Consumer		32			28
Total TDRs accruing interest (1)		3,731			3,746
Total non-performing loans	$	37,103		$	39,488
Other real estate owned and repossessed assets		87			—
Total non-performing assets	$	37,190		$	39,488
Non-performing loans/total portfolio loans		0.38	%		0.41	%
Non-accrual loans/total portfolio loans		0.34	%		0.37	%
Non-performing assets/total assets		0.22	%		0.23	%
Non-performing assets/total portfolio loans, other real estate and repossessed assets		0.38	%		0.41	%

(unaudited, dollars in thousands)

March 31,
2021

December 31,
2020

Non-accrual loans:

Commercial real estate - land and construction

$
120

$
469

Commercial real estate - improved property

9,007

9,494

Commercial and industrial

1,571

3,302

Residential real estate

18,358

17,925

Home equity

5,181

5,345

Consumer

338

345

Total non-accrual loans ⁽¹⁾

34,575

36,880

TDRs accruing interest:

Commercial real estate - land and construction

—

—

Commercial real estate - improved property

426

655

Commercial and industrial

104

111

Residential real estate

2,632

2,779

Home equity

388

363

Consumer

13

19

Total TDRs accruing interest ⁽¹⁾

3,563

3,927

Total non-performing loans

$
38,138

$
40,807

Other real estate owned and repossessed assets

393

549

Total non-performing assets

$
38,531

$
41,356

Non-performing loans/total portfolio loans

0.36
%

0.38
%
Non-performing assets/total assets

0.23
%

0.25
%
Non-performing assets/total portfolio loans, other real estate and repossessed assets

0.36
%

0.38
%
(1)

TDRs on non-accrual of $1.3 million as of March 31, 2022 and $1.5 million as of December 31, 2021, respectively, are included in total non-accrual loans.

⁽¹⁾	~~TDRs on non-accrual of $1.8 million as of March 31, 2021 and December 31, 2020, respectively, are included in total non-accrual loans.~~

Non-performing loans, which consist of non-accrual loans and TDRs, decreased ~~$2.7~~$2.4 million or ~~6.5%~~6.0%, from December 31, ~~2020,~~2021. Essentially all $2.4 million of the decrease is due to ~~various~~ non-accrual ~~relationships that were paid off in the first quarter of 2021. TDRs balances have decreased $0.4 million from~~loans, as there has been only one additional TDR since December ~~31, 2020 to March~~ 31, 2021. (Please see the Notes to the Consolidated Financial Statements for additional discussion.)

Section 4013 of the CARES Act allows financial institutions the option to temporarily suspend certain requirements under U.S. GAAP related to TDRs for a limited period of time during the COVID-19 pandemic. These customers must meet certain criteria, such as they were in good standing and not more than 30 days past due as of December 31, 2019, as well as other requirements. Based on this guidance, Wesbanco ~~does~~did not classify the COVID-19 loan modifications as TDRs, nor are the customers considered past due with regards to their delayed payments. Upon exiting the loan modification deferral program, the measurement of loan delinquency will resume where it left off upon entry into the program. ~~As of March 31, 2021,~~ Wesbanco has offered various deferred ~~payments~~payment schedules to commercial and retail customers impacted by the COVID-19 pandemic, depending on the type of loan and the industry-type for commercial loans. Such deferrals primarily took place in 2020, with a few in late 2021. New loan deferrals are no longer available in 2022.

Other real estate owned and repossessed assets ~~decreased $0.2~~increased to $0.1 million from December 31, ~~2020 primarily due~~2021. At March 31, 2022 and December 31, 2021, formal foreclosure proceedings were in process on residential real estate loans totaling $4.8 million and $4.0 million, respectively. Previously, as a ~~continued efforts to liquidate~~result of provisions of the CARES Act, certain residential ~~properties.~~real estate loans were temporarily suspended from entering foreclosure proceedings, which included $0.8 million of loans as of December 31, 2021. Since this moratorium substantially ended in the first quarter, there are currently no loans suspended from entering foreclosure proceedings.

4543

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

TABLE ~~15.~~12. PAST DUE AND ACCRUING LOANS EXCLUDING NON-ACCRUAL AND TDRs


(unaudited, dollars in thousands)	March 31, 2021			December 31, 2020			March 31, 2022			December 31, 2021
Loans past due 90 days or more:
Commercial real estate - land and construction	$	641		$	288		$	—		$	51
Commercial real estate - improved property		1,955			2,713			3,449			3,042
Commercial and industrial		5,314			1,899			319			559
Residential real estate		4,007			2,863			1,229			2,840
Home equity		784			706			631			685
Consumer		123			377			514			627
Total loans past due 90 days or more		12,824			8,846			6,142			7,804
Loans past due 30 to 89 days:
Commercial real estate - land and construction		1,879			2,858			—			—
Commercial real estate - improved property		5,047			8,948			11,984			14,001
Commercial and industrial		7,345			6,540			7,934			3,442
Residential real estate		3,263			7,490			4,524			4,513
Home equity		1,307			2,754			1,729			2,528
Consumer		1,761			3,006			2,151			2,668
Total loans past due 30 to 89 days		20,602			31,596			28,322			27,152
Total loans 30 days or more past due	$	33,426		$	40,442		$	34,464		$	34,956
Loans past due 90 days or more and accruing to total portfolio loans		0.12	%		0.08	%		0.06	%		0.08	%
Loans past due 30-89 days and accruing to total portfolio loans		0.19	%		0.29	%		0.29	%		0.28	%

Loans past due 30 days or more and accruing interest, excluding non-accruals and TDRs, decreased ~~$7.0~~$0.5 million or ~~17.3%~~1.4% from December 31, ~~2020.~~2021. These loans continue to accrue interest because they are both well-secured and in the process of collection. Loans 90 days or more past due ~~increased $4.0~~decreased $1.7 million and represented ~~0.12%~~0.06% and 0.08% of total portfolio loans at March 31, ~~2021 compared to 0.08% at~~2022 and December 31, 2020. While past due loans decreased overall, loans 90 days past due increased in the commercial and industrial and residential real estate loan categories. The decrease in the 30 to 89 days past due status was primarily due to the renewals of certain OLBK-acquired commercial lines of credit that are being adjusted to Wesbanco’s underwriting standards.2021, respectively. The 30 – 89 days past due category represented ~~0.19%~~0.29% of total portfolio loans at March 31, ~~2021~~2022 and ~~0.29%~~0.28% at December 31, ~~2020.~~2021. Loans currently modified as permitted by the regulatory authorities and the CARES Act are not included in Tables 1413 or ~~15,~~14, as they are not considered ~~non-performing or~~ past due.

ALLOWANCE FOR CREDIT LOSSES - LOANS AND LOAN COMMITMENTS

As of March 31, ~~2021,~~2022, the total allowance for credit losses – loans and commitments was ~~$166.8~~$125.9 million, of which ~~$160.1~~$117.9 million ~~relates~~related to loans and ~~$6.7~~$8.0 million ~~relates~~related to loan commitments. The allowance for credit losses – loans ~~is 1.50%~~was 1.21% of total portfolio loans as of March 31, ~~2021,~~2022, compared to ~~1.72%~~1.25% as of December 31, ~~2020.~~2021. Excluding PPP loans of ~~$823.8~~$76.5 million, the allowance for credit losses – loans ~~is 1.62%~~was 1.22% of total portfolio ~~loans.~~loans as of March 31, 2022, as compared to 1.27% of total portfolio loans at December 31, 2021. As per regulatory guidance, there is no calculated allowance on PPP loans due to their government guarantees by the SBA.

The allowance for credit losses - loans individually-evaluated ~~decreased $0.2~~increased $3.0 million from December 31, ~~2020~~2021 to March 31, ~~2021.~~2022. The population of individually-evaluated loans consisted primarily of eleven hotel loans, with a total outstanding loan balance of $39.5 million. The allowance for loans collectively-evaluated decreased from December 31, ~~2020~~2021 to March 31, ~~2021~~2022 by ~~$25.5~~$6.8 million.

The allowance for credit losses - loan commitments was ~~$6.7~~$8.0 million at March 31, ~~2021~~2022 as compared to ~~$9.5~~$7.8 million as of December 31, ~~2020,~~2021, and is included in other liabilities on the Consolidated Balance Sheets.

The allowance for credit losses by loan category, presented in Note 4, “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 credit losses under CECL is calculated utilizing the PD/LGD, which is then ~~discounted.~~discounted to net present value. PD is the probability the asset will default within a given time frame and LGD is the percentage of the asset not expected to be collected due to ~~default to net present value.~~default. The primary macroeconomic drivers of the quantitative model include forecasts of national unemployment and interest rates, as well as modeling adjustments for changes in prepayment speeds, loan risk grades, portfolio mix, concentrations and loan growth. For the calculation as of March 31, ~~2021,~~2022, the forecast was based upon a blend of two nationally-recognized published economic forecasts through March 31, ~~2021,~~2022, and iswas primarily driven by national unemployment and interest rate spread forecasts. At quarter-end, national unemployment was projected to peak at ~~5.8%~~3.7%, and subsequently decrease to an average of ~~4.8%~~3.5% over the remainder of the forecast period. The improvement in the macroeconomic factors and COVID qualitative factors, including those specifically for the hospitality portfolio, caused the allowance to decrease from December 31, ~~2020~~2021 to March 31, ~~2021,~~2022, by ~~$28.6~~$3.5 million.

If forecasted projections of national unemployment remain consistent with the forecast utilized by Wesbanco as of March 31, ~~2021~~2022 throughout the rest of the year, this may result in additional, but less significant, future quarterly decreases in the allowance for credit losses, depending upon other model variables such as qualitative factors specifically for hotels and the COVID-19 pandemic.

Criticized and classified loans were ~~4.3%~~3.68% of total portfolio loans, decreasing from ~~4.6%~~3.75% at December 31, ~~2020.~~2021. Criticized and classified loans decreased ~~$39.1~~from $364.5 million ~~from~~at December 31, ~~2020~~2021 to ~~$455.8~~$358.0 million at March 31, ~~2021,~~2022. The $6.5 million quarterly decline is primarily due to upgrades on certain hospitality ~~loans during~~loans. See Footnote 4, “Loans and the ~~first quarter of 2021.~~ Allowance for Credit Losses” for more information.

Table 1613 summarizes the allocation of the allowance for credit losses to each category of the loan portfolio. ~~The overall allowance for loans decreased due to improvements in forecasted economic factors.~~

TABLE ~~16.~~13. ALLOCATION OF THE ALLOWANCE FOR CREDIT LOSSES – LOANS AND LOAN COMMITMENTS


(unaudited, dollars in thousands)	March 31, 2021		Percent of Total		December 31, 2020		Percent of Total		March 31, 2022		Percent of Total		December 31, 2021		Percent of Total
Allowance for credit losses - loans:
Commercial real estate - land and construction	$	7,340		4.4	$	10,841		5.6	$	7,578		6.0	$	7,310		5.6
Commercial real estate - improved property		99,741		59.8		110,652		56.6		65,009		51.6		65,355		50.5
Commercial and industrial		33,284		20.0		37,850		19.4		25,535		20.3		26,875		20.8
Residential real estate		13,438		8.1		17,851		9.1		13,714		10.9		15,401		11.9
Home equity		998		0.6		1,487		0.8		675		0.5		724		0.6
Consumer		4,532		2.7		6,507		3.3		3,746		3.0		3,737		2.9
Deposit account overdrafts		707		0.4		639		0.3		1,608		1.3		2,220		1.7
Total allowance for credit losses - loans	$	160,040		96.0	$	185,827		95.1	$	117,865		93.6	$	121,622		94.0
Allowance for credit losses - loan commitments:
Commercial real estate - land and construction	$	4,000		2.4	$	6,508		3.3	$	4,931		3.9	$	4,180		3.2
Commercial real estate - improved property		208		0.1		712		0.4		320		0.3		201		0.2
Commercial and industrial		1,583		1.0		1,275		0.7		670		0.5		1,497		1.2
Residential real estate		869		0.5		955		0.5		1,740		1.4		1,576		1.2
Home equity		50		0.0		45		0.0		58		0.0		49		0.0
Consumer		21		0.0		19		0.0		331		0.3		272		0.2
Total allowance for credit losses - loan commitments		6,731		4.0		9,514		4.9		8,050		6.4		7,775		6.0
Total allowance for credit losses - loans and loan commitments	$	166,771		100.0	$	195,341		100.0	$	125,915		100.0	$	129,397		100.0

Although the allowance for credit losses is allocated as described in Table ~~16,~~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 net ~~chargeoffs~~charge-offs in subsequent periods for any category may necessitate future adjustments to the allowance for credit losses applicable to the category. Management believes the allowance for credit losses is appropriate to absorb expected losses at March 31, ~~2021.~~2022.

DEPOSITS

TABLE ~~17.~~14. DEPOSITS


(unaudited, dollars in thousands)	March 31, 2021		December 31, 2020		$ Change			% Change			March 31, 2022		December 31, 2021		$ Change			% Change
Deposits
Non-interest bearing demand	$	4,460,049	$	4,070,835	$	389,214			9.6		$	4,670,520	$	4,590,895	$	79,625			1.7
Interest bearing demand		3,126,186		2,839,536		286,650			10.1			3,405,610		3,380,056		25,554			0.8
Money market		1,771,703		1,685,927		85,776			5.1			1,831,683		1,739,750		91,933			5.3
Savings deposits		2,373,987		2,214,565		159,422			7.2			2,679,053		2,562,510		116,543			4.5
Certificates of deposit		1,555,074		1,618,510		(63,436	)		(3.9	)		1,211,008		1,292,652		(81,644	)		(6.3	)
Total deposits	$	13,286,999	$	12,429,373	$	857,626			6.9		$	13,797,874	$	13,565,863	$	232,011			1.7

Deposits, which represent Wesbanco’s primary source of funds, are offered in various account forms at various rates through Wesbanco’s ~~212~~205 financial centers. The FDIC insures deposits up to $250,000 per ~~account.~~account owner.

Total deposits increased by ~~$857.6~~$232.0 million or ~~6.9%~~1.7% during the first three months of ~~2021. Interest bearing demand~~2022. Money market deposits, savings deposits, non-interest bearing demand deposits, ~~savings deposits, and money market~~interest bearing demand deposits increased ~~10.1%~~5.3%, ~~9.6%~~4.5%, ~~7.2%~~1.7%, and ~~5.1%~~0.8%, respectively. The growth in transaction-based accounts is primarily attributable to~~individual~~ increased personal savings and ~~family stimulus payments, as well as deposits from small businesses obtaining loans from the PPP program~~, focused retail and business strategies to obtain more account relationships ~~and~~as well as customers’ overall ~~preference~~preferences for shorter-term maturities. Deposit balances were also ~~somewhat~~ 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 ~~$649.9~~$660.0 million at March 31, ~~2021~~2022 compared to ~~$513.9~~$641.1 million at December 31, ~~2020, as certain sweep repurchase agreements previously in short-term borrowings were moved to this product.~~2021.

Certificates of deposit decreased ~~$63.4~~$81.6 million from December 31, 2021 to March 31, 2022 due primarily to the effects of an overall corporate strategy designed to increase and remix retail deposit relationships and 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 customer run-off of higher cost certificates of deposit from the OLBK acquisition.~~ Wesbanco does not generally solicit brokered or other deposits out-of-market or over the internet, but does participate in the Certificate of Deposit Account Registry Services (CDARS®) program. CDARS® balances totaled ~~$44.9~~$44.6 million in outstanding balances at March 31, ~~2021,~~2022, compared to ~~$42.6~~$45.9 million in total outstanding balances at December 31, ~~2020.~~2021. Certificates of deposit greater than $250,000 were approximately ~~$376.9~~$274.5 million at March 31, ~~2021~~2022 compared to ~~$381.7~~$313.2 million at December 31, ~~2020.~~2021. Certificates of deposit of $100,000 or more were approximately ~~$808.2~~$612.0 million at March 31, ~~2021~~2022 compared to ~~$843.2~~$666.2 million at December 31, ~~2020.~~2021. Certificates of deposit totaling approximately ~~$952.4~~$784.5 million at March 31, ~~2021~~2022 with a cost of ~~0.52%~~0.40% 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.

~~BORROWINGS~~ 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 ~~18.~~15. BORROWINGS


(unaudited, dollars in thousands)	March 31, 2021		December 31, 2020		$ Change			% Change			March 31, 2022		December 31, 2021		$ Change			% Change
Federal Home Loan Bank Borrowings	$	433,984	$	549,003	$	(115,019	)		(21.0	)	$	123,898	$	183,920	$	(60,022	)		(32.6	)
Other short-term borrowings		137,218		241,950		(104,732	)		(43.3	)		158,538		141,893		16,645			11.7
Subordinated debt and junior subordinated debt		192,430		192,291		139			0.1			280,743		132,860		147,883			111.3
Total	$	763,632	$	983,244	$	(219,612	)		(22.3	)	$	563,179	$	458,673	$	104,506			22.8

While borrowings are a significant source of funding for Wesbanco, they are less significant as compared to total deposits. During the first three months of ~~2021, $115.0~~2022, $60.0 million in available liquidity was used for FHLB borrowings maturities and other principal pay-downs with an average cost of ~~2.60%~~1.13%. There were no new FHLB advances during the period.

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 ~~$137.2~~$158.5 million at March 31, ~~2021~~2022 compared to ~~$242.0~~$141.9 million at December 31, 2020. The decrease in these borrowings is primarily due to a $120.0 million decrease in callable repurchase agreements due to moving certain customer relationships to interest-bearing demand deposits, which was partially offset by a $15.3 million increase in overnight sweep checking accounts.2021. There were no outstanding federal funds purchased at either March 31, ~~2021~~2022 or December 31, ~~2020.~~2021.

Subordinated debt and junior subordinated debt balances increased by $147.9 million from December 31, 2021. The increase is due to the issuance of $150.0 million in aggregate principal amount of subordinated debentures by Wesbanco, Inc. on March 23, 2022. The subordinated debentures have a fixed rate of 3.75% for the first five years and a floating rate for the next five years at Three Month Term Secured Overnight Financing Rate plus 1.787%. The subordinated debentures are callable after five years, mature on April 1, 2032 and count towards Tier 2 capital.

Wesbanco renewed a revolving line of credit in August ~~2020,~~2021, 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 $30.0 million. There were no outstanding balances at either March 31, ~~2021~~2022 or December 31, ~~2020.~~

2021.

~~OFF-BALANCE SHEET ARRANGEMENTS~~CAPITAL RESOURCES

Wesbanco enters into financial instruments with off-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 10, “Commitments and Contingent Liabilities,” of the Consolidated Financial Statements and the “Loans and Credit Risk” section of this MD&A for additional information.~~

The allowance for credit losses includes an allowance for unfunded loan commitments. The allowance for credit losses represents the lifetime expected losses for all loans and unfunded loan commitments at the initial recognition date. The allowance incorporates forward-looking information and applies a reversion methodology beyond the reasonable and supportable forecast. The allowance is increased by a provision charged to operating expense and reduced by charge-offs, net of recoveries, which also includes any necessary adjustments to the reserve for unfunded loan commitments, and such reserve is accounted for in other liabilities. Management evaluates the appropriateness of the allowance at least quarterly. This evaluation is inherently subjective as it requires material estimates that may be susceptible to significant change from period to period.

During the first quarter of 2020, Wesbanco extended its contract with its existing core service provider for an additional seven years, which includes upgraded and enhanced technological services. The new contract also includes additional products and services, which were previously obtained from various other third-party service providers. It is currently anticipated that such core services will be converted in the third quarter of 2021, and that one-time charges from various contract terminations will be accounted for as of the date of the termination of any such associated contract. In addition to upgrading and enhancing technology, reflecting the current operating environment and increased utilization of digital services, Wesbanco announced, on August 27, 2020, a plan to accelerate its financial center optimization strategy. The plan consolidated a total of 24 locations and converted two others to drive-up only locations across Indiana, Kentucky, Ohio, Pennsylvania, and West Virginia. Three locations closed in 2020, and the remainder closed in January 2021. Gross cost savings of approximately $6.0 to $6.5 million are expected to be phased-in during the first half of 2021, with approximately half of the gross cost savings reinvested in enhanced customer-facing technologies and digital services. Staff at the locations that were consolidated were permitted to fill certain open positions at other nearby financial centers, somewhat reducing expected cost savings. Wesbanco incurred $0.2 million in restructuring charges in the first quarter of 2021 associated with the closures. The Company continues to review other branch locations for potential closure in the second half of 2021.

~~CAPITAL RESOURCES~~

Shareholders' equity ~~increased $28.8~~decreased $145.9 million or ~~1.0%~~5.4% from ~~$2.8~~$2.7 billion at December 31, ~~2020.~~2021. The ~~increase~~decrease resulted ~~primarily~~ from ~~net income during~~ the ~~current three-month period~~repurchase of ~~$73.1~~common shares totaling $62.3 million, ~~which were partially offset by a $21.6 million other comprehensive income loss and~~ the declaration of common and preferred shareholder dividends totaling ~~$22.5~~$20.5 million and $2.5 million, respectively, and a $106.2 million other comprehensive loss for the three months ended March 31, ~~2021.~~2022 exceeding net income during the current three-month period of $44.1 million. Wesbanco also increased its quarterly dividend rate $0.01 per quarter to ~~$0.33~~$0.34 per share in February, representing a ~~3.1%~~3.0% increase over the prior quarterly rate and a cumulative ~~136%~~143% increase since 2010.

Wesbanco ~~did not purchase any~~purchased 1,724,571 shares of its common stock on the open market at a total cost of $62.3 million or $36.14 per share during the three-month period ended March 31, ~~2021~~2022 under ~~the~~ current share repurchase ~~plans.~~authorizations. The Board of Directors approved an additional stock repurchase plan on February 24, 2022 for the purchase of up to 3.2 million shares, which was in addition to prior plans that were utilized during the quarter. At March 31, ~~2021,~~2022, the remaining shares authorized to be purchased under the ~~current repurchase plans totaled 1,704,457 shares. The Board of Directors also~~last approved ~~an additional stock~~ repurchase plan for the purchase of up to an additional 1.7 million shares on April 22, 2021. This plan is in addition to the two active stock repurchase plans as of March 31, 2021, resulting in a total of approximately 3.4 million shares available for repurchase, as the prior plans will continue to be utilized until such authorizations are complete.

In February 2021, Wesbanco granted 12,000 Total Shareholder Return Plan (“TSR”) shares for the performance period beginning January 1, 2021 and ending December 31, 2023 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.~~totaled 2,867,046 shares.

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, ~~2021,~~2022, 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, ~~2021,~~2022, under FDIC regulations, Wesbanco could receive, without prior regulatory approval, a dividend of approximately ~~$252.3~~$91.2 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.~~

On March 26, 2020, regulators issued interim financial rule (“IFR”) “Regulatory Capital Rule: Revised Transition of the Current Expected Losses Methodology for Allowances” in response to the disrupted economic activity from the spread of COVID-19. The IFR provides financial institutions that adopt CECL during 2020 with the option to delay for two years the estimated impact of CECL on regulatory capital, followed by a three-year transition period to phase out the aggregate amount of the capital benefit provided by the initial two-year delay (“~~five year~~five-year transition”). Wesbanco adopted CECL effective January 1, 2020 and elected to implement the ~~five year~~five-year transition. Regulatory capital levels without the capital benefit at March 31, ~~2021~~2022 for both the Bank and Wesbanco would have continued to be greater than the amounts needed to be considered “well capitalized”, as the capital benefit approximated 3017 to 4526 basis points for three of the four regulatory ratios, while total risk-based capital would have been slightly higher without the transition.

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


							March 31, 2022							December 31, 2021
	Minimum			Well-								Minimum							Minimum
(unaudited, dollars in thousands)	Value(1)			Capitalized(2)			Amount		Ratio			Amount(1)		Amount		Ratio			Amount(1)
Wesbanco, Inc.
Tier 1 leverage		4.00	%		5.00	%	$	1,539,123		9.67	%	$	636,446	$	1,586,165		10.02	%	$	633,089
Common equity Tier 1		4.50	%		6.50	%		1,394,639		12.01	%		522,538		1,441,681		12.77	%		507,893
Tier 1 capital to risk-weighted assets		6.00	%		8.00	%		1,539,123		13.25	%		696,717		1,586,165		14.05	%		677,190
Total capital to risk-weighted assets		8.00	%		10.00	%		1,895,163		16.32	%		928,957		1,795,661		15.91	%		902,920
Wesbanco Bank, Inc.
Tier 1 leverage		4.00	%		5.00	%	$	1,529,176		9.63	%	$	635,459	$	1,529,227		9.68	%	$	631,920
Common equity Tier 1		4.50	%		6.50	%		1,529,176		13.21	%		521,005		1,529,227		13.60	%		505,967
Tier 1 capital to risk-weighted assets		6.00	%		8.00	%		1,529,176		13.21	%		694,673		1,529,227		13.60	%		674,622
Total capital to risk-weighted assets		8.00	%		10.00	%		1,605,215		13.86	%		926,230		1,608,723		14.31	%		899,496

March 31, 2021

December 31, 2020

Minimum

Well-

Minimum

Minimum

(unaudited, dollars in thousands)

Value⁽¹⁾

Capitalized⁽²⁾

Amount

Ratio

Amount⁽¹⁾

Amount

Ratio

Amount⁽¹⁾

Wesbanco, Inc.

Tier 1 leverage

4.00
%

5.00
%

$
1,663,801

10.74
%

$
619,628

$
1,617,413

10.51
%

$
510,306

Common equity Tier 1

4.50
%

6.50
%

1,519,316

13.65
%

500,740

1,472,929

13.40
%

494,529

Tier 1 capital to risk-weighted assets

6.00
%

8.00
%

1,663,801

14.95
%

677,653

1,617,413

14.72
%

659,372

Total capital to risk-weighted assets

8.00
%

10.00
%

1,956,337

17.58
%

890,204

1,931,414

17.58
%

879,162

Wesbanco Bank, Inc.

Tier 1 leverage

4.00
%

5.00
%

$
1,579,625

10.21
%

$
618,636

$
1,536,609

10.00
%

$
614,792

Common equity Tier 1

4.50
%

6.50
%

1,579,625

14.24
%

499,228

1,536,609

14.04
%

492,549

Tier 1 capital to risk-weighted assets

6.00
%

8.00
%

1,579,625

14.24
%

665,637

1,536,609

14.04
%

656,732

Total capital to risk-weighted assets

8.00
%

10.00
%

1,707,161

15.39
%

887,516

1,685,610

15.40
%

875,643

(1)

Minimum requirements to remain adequately capitalized.

(2)

Well-capitalized under prompt corrective action regulations.

⁽¹⁾	~~Minimum requirements to remain adequately capitalized.~~

⁽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 its on- and off-balance sheet obligations. Institutions confront various internal and external situations that can give rise to increased liquidity risk including funding mismatches, market constraints on funding sources, contingent liquidity events, changes in economic conditions, and exposure to credit, market, operation, legal and reputation risk. Wesbanco actively manages liquidity risk through its ability to provide adequate funds to meet changes in loan demand, unexpected outflows in deposits and other borrowings as well as to take advantage of market opportunities and meet operating cash needs. This is accomplished by maintaining liquid assets in the form of securities, sufficient borrowing capacity and a stable core deposit base. Liquidity is centrally monitored by Wesbanco’s Asset/Liability Committee (“ALCO”).

Wesbanco determines the degree of required liquidity by the relationship of total holdings of liquid assets to the possible need for funds to meet unexpected deposit losses and/or loan demands. The ability to quickly convert assets to cash at a minimal loss is a primary function of Wesbanco’s investment portfolio management. Wesbanco believes its cash flow from the loan portfolio, the investment portfolio, and other sources, adequately meet its liquidity requirements. Wesbanco’s net loans to assets ratio was ~~61.8%~~56.2% at March 31, ~~2021~~2022 and deposit balances funded ~~77.9%~~80.7% of assets.

The following table lists the sources of liquidity from assets at March 31, ~~2021~~2022 expected within the next year:


(unaudited, in thousands)
Cash and cash equivalents	$	1,369,498
Securities with a maturity date within the next year and callable securities		206,922
Projected payments and prepayments on mortgage-backed securities and collateralized mortgage obligations (1)		611,018
Loans held for sale		15,959
Accruing loans scheduled to mature		1,052,034
Normal loan repayments		1,542,875
Total sources of liquidity expected within the next year	$	4,798,306

(unaudited, in thousands)

Cash and cash equivalents

$
759,048

Securities with a maturity date within the next year and callable securities

250,523

Projected payments and prepayments on mortgage-backed securities and collateralized mortgage obligations ⁽¹⁾

758,938

Loans held for sale

153,520

Accruing loans scheduled to mature

1,210,062

Normal loan repayments

2,492,910

Total sources of liquidity expected within the next year

$
5,625,001

(1)

Projected prepayments are based on current prepayment speeds.

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

Deposit flows are another principal factor affecting overall Wesbanco liquidity. Deposits totaled ~~$13.3~~$13.8 billion at March 31, ~~2021.~~2022. 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 ~~$952.4~~$784.5 million at March 31, ~~2021,~~2022, with a weighted average cost of 0.40%, which includes jumbo regular certificates of deposit totaling ~~$505.3~~$381.7 million with a weighted-average cost of ~~0.80%~~0.50%, and jumbo CDARS^® deposits of ~~$35.8~~$38.0 million with a weighted-average cost of ~~0.55%~~0.35%.

Wesbanco maintains a line of credit with the FHLB as an additional funding source. Available credit with the FHLB approximated ~~$4.1 billion and $3.6~~$3.8 billion at March 31, ~~2021~~2022 and December 31, ~~2020,~~2021, respectively. 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, ~~2021,~~2022, the Bank had unpledged available-for-sale securities with an amortized cost of ~~$1.1 billion,~~$922.3 million, or ~~40.1%~~30.7% of the total available-for-sale portfolio. A portion of these securities could be sold for additional liquidity, or such securities could be pledged to secure additional FHLB borrowings. A significant portion of the portfolio is pledged to public deposit customers, as public deposit balances have increased significantly through the several acquisitions made since 2015, to a total of ~~$1.4~~$1.6 billion at March 31, ~~2021.~~2022. Wesbanco’s held-to-maturity portfolio currently contains ~~$641.3 million~~$1.0 billion of unpledged securities. Most of these securities are tax-exempt municipal securities, which can only be pledged in limited circumstances. Generally, these securities cannot be sold without tainting the remainder of the held-to-maturity portfolio. If tainting occurs, all remaining securities with the held-to-maturity designation would be required to be reclassified as available-for-sale, and the held-to-maturity designation would not be available to Wesbanco for a period of time.

Wesbanco participates in the Federal Reserve Bank’s Borrower-in-Custody Program (“BIC”) whereby Wesbanco pledges certain consumer loans as collateral for borrowings. AtWesbanco did not have any BIC borrowings outstanding at March 31, ~~2021, Wesbanco had a BIC line of credit totaling $173.4 million, none of which was outstanding.~~2022. 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, ~~2021,~~2022, along with seeking other lines of credit, borrowings under repurchase agreement lines, increasing deposit rates to attract additional funds, accessing brokered deposits, or selling securities available-for-sale or certain types of loans.

Other short-term borrowings of ~~$137.2~~$158.5 million at March 31, ~~2021~~2022 consisted of callable repurchase agreements and overnight sweep checking accounts for large commercial customers. Other short-term borrowings may also include federal funds purchased. There has been a decrease of $45.4 million in the average deposit balances of overnight sweep checking accounts during the first three months of 2021, primarily from the movement of overnight sweep checking accounts to deposits. 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, ~~$225.3~~$264.4 million in cash on hand, and a $30.0 million revolving line of credit with another bank, which did not have an outstanding balance at March 31, ~~2021.~~2022. Wesbanco is in compliance with all applicable 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, ~~2021,~~2022, under FDIC and State of West Virginia regulations, Wesbanco could receive, without prior regulatory approval, dividends of approximately ~~$252.3~~$91.2 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 ~~$3.1~~$4.2 billion and ~~$3.0~~$3.8 billion at March 31, ~~2021~~2022 and December 31, ~~2020,~~2021, respectively. On a historical basis, only a portion of these commitments will result in an outflow of funds. Please refer to Note 10, “Commitments and Contingent Liabilities” of the Consolidated Financial Statements and the “Loans and Credit Risk” section of this MD&A for additional information.

Federal financial regulatory agencies have previously issued guidance 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, as periodically reviewed and adjusted, adequately address this guidance.

LIBOR TRANSITION

LIBOR is a widely used short-term reference interest rate benchmark for variable rate loans and securities, borrowings, and interest rate hedge/swap transactions. In July of 2017, the U.K. Financial Conduct Authority (“FCA”) announced the discontinuation of LIBOR after certain banks provided purported interest rate figures which did not truly reflect the rate at which they could borrow. In addition to FCA, as early as 2014, financial institution regulators and the Federal Financial Institutions Examination Council (“FFIEC”) began to work to develop a uniform approach to the phase-out of LIBOR because the continued reliance on LIBOR could present systematic risk to financial institutions. The Board of Governors of the Federal Reserve System and the Federal Reserve Bank of New York convened the Alternative Reference Rates Committee (“AARC”) to identify alternative reference rates to LIBOR. The AARC released consultations on contractual fallback language to prepare for the transition away for LIBOR and on June 22, 2017, identified SOFR as the recommended alternative to LIBOR.

On July 1, 2020, the FFIEC issued a Joint Statement on Managing the LIBOR Transition to further explain that new financial contracts should either utilize a reference rate other than LIBOR or have robust fallback language that defines an alternative reference rate after LIBOR’s discontinuation. The FFIEC statement encouraged supervised financial institutions to continue their efforts to prepare for the change and address the risks associated with the LIBOR transition.

On November 6, 2020, the Board of Governors of the Federal Reserve System, the Office of the Comptroller of the Currency, and the Federal Deposit Insurance Corporation (collectively, the “Agencies”) issued a statement providing that a financial institution may use any reference rate for its loans that the financial institution determines to be appropriate for its funding model and customer needs.

Thereafter, on November 30, 2020, the Agencies issued an additional joint statement encouraging financial institutions to continue to transition away from LIBOR as soon as practicable, but no later than December 31, 2021. Given the risks associated with the use of LIBOR, the Agencies stated that entering into new contracts that use LIBOR as a reference rate after December 31, 2021, would create safety and soundness risks.

On March 5, 2021, the U.K. FCA and Intercontinental Exchange (“ICE”) Benchmark Administration announced that the publication of the overnight, as well as, the one, three, six, and twelve month LIBOR rates will continue through June 30, 2023, which will provide additional time to wind down or renegotiate existing contracts that reference LIBOR.

On October 20, 2021, the Agencies with the Consumer Financial Protection Bureau, National Credit Union Administration, and State Bank and Credit Union Regulators, issued an additional Joint Statement on Managing the LIBOR Transition to once again emphasize the expectation that supervised institutions with LIBOR exposure continue to progress toward an orderly transition away from LIBOR. The statement confirmed that entering into new contracts, including derivatives that use LIBOR as a reference rate after December 31, 2021, would create safety and soundness risks, including litigation, operational, and consumer protection risks.

As early as 2018, in anticipation of the potential discontinuance of LIBOR, Wesbanco established a LIBOR transition committee to effectively manage the Company’s transition away from LIBOR in two phases. The first phase included adding additional fallback language to loan documents to allow Wesbanco to replace LIBOR with an equivalent rate index plus the margin to ensure the resulting interest rate is the same as it previously was using LIBOR. Also, as part of the first phase, Wesbanco began quoting to the Treasury Rate published by the Federal Reserve Board instead of the ICE LIBOR Swap Index (which is tied to LIBOR) when repricing certain term loans and originating new loans. The second phase consists of working to continue to transition existing adjustable-rate loans that fluctuate monthly or periodically that are tied to LIBOR or the ICE LIBOR Swap Index. Wesbanco is tracking the dollar amount and number of loans tied to LIBOR or the ICE LIBOR Swap Index, monitoring current industry trends, and working with legal counsel to ensure the smooth transition away from LIBOR. As of March 31, 2022, Wesbanco had a total of $1.7 billion in loans tied to either LIBOR or the ICE LIBOR Swap index, of which $1.4 billion have a maturity date after June 30, 2023. As referenced above, the U.K. FCA and ICE Benchmark Administration has extended the date of publication of certain tenors of LIBOR through June 30, 2023, giving existing LIBOR based contracts time to mature. However, in compliance with and based upon the Agencies Joint Statements referenced above, Wesbanco has not offered LIBOR for new contracts after December 31, 2021. Accordingly, Wesbanco has initially chosen the 1M Term SOFR, which is published by the Chicago Mercantile Exchange, as an alternative replacement rate for LIBOR. Wesbanco may also continue to utilize the Wall Street Journal Prime Rate, the Treasury Rates, and other indexes as part of its lending program. At a date in the future, prior to the cessation of the publication of the one month LIBOR, Wesbanco will transition all remaining LIBOR based loans to the replacement index after notification to the impacted borrowers.

With respect to its back-to-back swap program, Wesbanco worked with its swap counterparty customers to institute and accept the International Swaps and Derivatives Association 2020 Interbank Offered Rate Fallbacks Protocol to address LIBOR cessation in swap transactions. Moreover, Wesbanco has initially chosen 1M Term SOFR as its replacement index for new loans in the bank’s back-to-back swap program, beginning on January 1, 2022.

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 Asset/Liability Committee (“ALCO”)~~the 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 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 an executive management committee with Board representation, responsible for monitoring and managing interest rate risk within approved policy limits, utilizing earnings sensitivity simulation and economic value-at-risk 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 documented at least quarterly by the ALCO.

The earnings sensitivity simulation model projects changes in net interest income resulting from the effects 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 and non-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 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 or re-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.

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 - 300 basis points across the entire yield curve, as 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 7.5% - 15%, or less, of net interest income from the stable rate base model over a twelve-month period. The table below indicates Wesbanco’s interest rate sensitivity at March 31, ~~2021~~2022 and December 31, ~~2020,~~2021, 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 100 – 300 basis points decreasing changes for March 31, ~~2021~~2022 and December 31, ~~2020~~2021 are not shown due to the unrealistic and/or negative yield nature of the results.

TABLE 1. NET INTEREST INCOME SENSITIVITY


Immediate Change in	Percentage Change in			Percentage Change in
Interest Rates	Net Interest Income from Base over One Year		ALCO	Net Interest Income from Base over One Year		ALCO
(basis points)	March 31, 2021	December 31, 2020	Guidelines	March 31, 2022	December 31, 2021	Guidelines
+300	12.5%	15.3%	(15.0%)	16.3%	17.5%	(15.0%)
+200	8.4%	10.3%	(10.0%)	10.7%	11.7%	(10.0%)
+100	4.5%	5.5%	(7.5%)	5.3%	6.0%	(7.5%)

Adjustments to relative sensitivities are due to the impact of the current 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. Additional differences typically result from changes in the various earning assets and costing liabilities mix and growth rates, as well as adjustments for various modeling assumptions. Generally, deposit betas utilized in modeling are estimated at more conservative percentages for ~~both up and down~~various rate scenarios than has been the Bank’s historical experience, as a result of both competitive factors in our markets and as public funds and institutional contract terms are renewed. Deposit betas, decay rates and loan prepayment speeds are adjusted periodically in our models for non-maturity deposits and loans. Indicated model asset sensitivity in rising rate scenarios may be less than anticipated due to slower prepayment speeds, rate floors, below forecast new loan yields, spread compression between new asset yields and funding costs, mortgage-related extension risk and other factors. In a decreasing rate environment, asset sensitivity may have greater impact on the margin than currently modeled as prepayment speeds increase, customers refinance or request rate reductions on existing loans, estimated deposit betas do not perform as modeled, or for other reasons.

5150

In addition to the aforementioned parallel rate shock earnings sensitivity simulation model, the ALCO also reviews a “dynamic” forecast scenario to project net interest income over a rolling two-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 sheet re-mixing strategies, changes in forecasted rates for various maturities, competitive market spreads for various products and other assumptions. Such modeling is directionally consistent with typical parallel rate shock scenarios, and it assists in predicting changes in forecasted outcomes ~~and~~as well as suggesting potential adjustments to management plans to assist in achieving earnings goals.

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 March 31, ~~2021~~2022 and December 31, ~~2020.~~2021. Changes in EVE sensitivity since year-end ~~2020~~2021 relate to the increase in market interest rates ~~particularly in the latter half of the first quarter of 2021,~~ and their impact upon the fair values of earning assets and costing ~~liabilities:~~liabilities.


Immediate Change in	Percentage Change in			Percentage Change in
Interest Rates	Economic Value of Equity from Base over One Year		ALCO	Economic Value of Equity from Base over One Year		ALCO
(basis points)	March 31, 2021	December 31, 2020	Guidelines	March 31, 2022	December 31, 2021	Guidelines
+300	6.1%	13.4%	(30.0%)	1.5%	3.7%	(30.0%)
+200	4.5%	10.6%	(20.0%)	(0.7%)	1.6%	(20.0%)
+100	4.0%	7.1%	(10.0%)	(0.4%)	1.8%	(10.0%)

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® and 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;

•

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 terms for FHLB short-term maturing borrowings to balance asset/liability mismatches; or paying them off with excess liquidity

•

using 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.

•

~~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 terms for FHLB short-term maturing borrowings to balance asset/liability mismatches; or paying them off with excess liquidity~~

•

~~using 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.~~

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 of non-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, as well as competitive factors, by approving new products and services or adjusting the terms and availability of existing products and services for both Wesbanco as well as its business loan customers. Over the last two quarters, inflation has been trending higher and has impacted the cost of labor and purchased goods and services.

~~In anticipation of~~ Wesbanco is also monitoring the potential discontinuance of the London Interbank Offered Rate (LIBOR), which was initially slated to occur at the end of 2021, Wesbanco has created a LIBOR transition committee, which has broken the Company’s transition efforts into two phases. The first phase included adding additional language to new loansimpact that ~~allows Wesbanco to replace LIBOR with an equivalent~~inflation is having on single family home construction and multifamily properties as proposed rental rate ~~index~~caps and ~~adjust the margin to ensure the resulting interest rate is the same as it previously was using LIBOR. Also included~~controls are put in the first phase was Wesbanco transitioning from the LIBOR swap curve to treasury rates when repricing certain term loans and originating new loans. The second phase is transitioning current variable loans tied to LIBOR or on a LIBOR swap curve. Wesbanco is tracking the dollar amount and number of loans tied to LIBOR or the LIBOR swap curve, monitoring current industry trends, and engaging its legal counsel to ensure the smooth transition away from LIBOR. The date for the discontinuation of LIBOR has been extended for certain tenors and currencies by its administrator to June 30, 2023, giving existing LIBOR-based contracts time to mature. Although the cessation date has been extended, a joint agency statement on November 30, 2020 indicated that, evenplace in the event of an extension, the agencies would consider the use of LIBOR as a reference rate for new loans after December 31, 2021 as creating safety and soundness risks. As such, Wesbanco is continuing to develop its transition plan to price new loans to a suitable replacement index by the end of 2021.areas across Wesbanco’s footprint.

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 Rules 13a-15(e) and 15d-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 Form 10-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~~Wesbanco's internal control over financial reporting that occurred during our fiscal quarter ended March 31, ~~2021~~2022 as required to be reported by paragraph (d) of Rules 13a-15 and 15d-15 under the Securities Exchange Act of 1934, that materially affected, or are reasonably likely to materially affect, ~~Wesbanco’s~~the Company's internal control over financial reporting.

5352

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, ~~2021,~~2022, Wesbanco had ~~two~~one active stock repurchase ~~plans. The first active plan~~plan. It was approved by the Board of Directors on ~~October 22, 2015~~February 24, 2022 for ~~1.0~~3.2 million shares and ~~the second active plan was approved by the Board of Directors on December 19, 2019 for 1.7 million shares. 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 Board of Directors also approved an additional stock repurchase plan for the purchase of up to an additional 1.7 million shares on April 22, 2021. This plan is in addition to the two active stock repurchase plans as of March 31, 2021, and the prior plans will continue to be utilized until such authorizations are complete.

~~Repurchases~~Other repurchases in the first quarter included those for ~~the KSOP~~Wesbanco's Employee Stock Ownership and 401(k) Plan and dividend reinvestment plans.

The following table presents the monthly share purchase activity during the quarter ended March 31, ~~2021:~~2022:


Period	Total Number of Shares Purchased (1)		Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans (2)		Maximum Number of Shares that May Yet Be Purchased Under the Plans (3)
Balance at December 31, 2021								1,391,617

January 1, 2022 to January 31, 2022		442,617	$	36.71		418,384		973,233
February 1, 2022 to February 28, 2022		895,699	$	36.30		893,933		3,279,300
March 1, 2022 to March 31, 2022		414,802	$	35.17		412,254		2,867,046
Total		1,753,118	$	36.14		1,724,571		2,867,046

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, 2020

1,704,457

January 1, 2021 to January 31, 2021

Other transactions (1)

29,801

$
30.76

N/A

N/A

February 1, 2021 to February 28, 2021

Other transactions (1)

1,581

31.25

N/A

N/A

March 1, 2021 to March 31, 2021

Other transactions (1)

3,374

35.39

N/A

N/A

First Quarter 2021

Other transactions (1)

34,756

31.23

N/A

N/A

Total

34,756

$
31.23

N/A

1,704,457

(1)

Total shares purchased consist of open market purchases transacted for employee benefit and dividend reinvestment plans and open market purchases for general corporate purposes.

(2)

Represents only open market repurchases for general corporate purposes.

(3)

Reflects the impact of an additional 3.2 million shares approved on February 24, 2022.

ITEM 6. EXHIBITS


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

~~N/A – Not applicable~~

~~ITEM 5. OTHER INFORMATION~~

~~On May 4, 2021,~~ the Board of Directors of Wesbanco adopted a change to Article V, Section 1 of Wesbanco’s Amended and Restated By-laws (“Bylaws”), effective as of May 4, 2021, to harmonize with the Bank’s bylaws the positions Wesbanco and the Bank treat as officers and executive officers. The Bylaws were not amended in any other manner. The description of this Bylaw clarification is subject to and qualified in its entirety by the full text of the Bylaws filed with this Quarterly Report as Exhibit 3.1.

~~ITEM 6. EXHIBITS~~

~~3.1~~		~~Bylaws of~~Indenture, dated March 23, 2022, by and between Wesbanco, Inc. ~~(As Amended~~ and ~~Restated May 4, 2021)~~Wilmington Trust, National Association, as trustee (incorporated by reference to Exhibit 4.1 of Form 8-K filed by the Registrant with the Securities and Exchange Commission on March 23, 2022).

~~31.1~~4.2		First Supplemental Indenture, dated March 23, 2022, by and between Wesbanco, Inc. and Wilmington Trust, National Association, as trustee (incorporated by reference to Exhibit 4.2 of Form 8-K filed by the Registrant with the Securities and Exchange Commission on March 23, 2022).

4.3		Form of 3.75% Fixed-to-Floating Rate Subordinated Note due 2032 (included in Exhibit 4.2).

10.1		Employment Agreement, dated as of February 16, 2022, by and between Wesbanco, Inc., Wesbanco Bank, Inc. and Michael L. Perkins (incorporated by reference to Form 8-K filed by the Registrant with the Securities and Exchange Commission on February 22, 2022).

31.1		Certification of Chief Executive Officer of Periodic Report Pursuant to Rule 13a-15(e) or Rule 15d-15(e).

31.2		Certification of Chief Financial Officer of Periodic Report Pursuant to Rule 13a-15(e) or Rule 15d-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.INS		Inline XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document).

101.SCH		Inline XBRL Taxonomy Extension Schema Document

101.CAL		Inline XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF		Inline XBRL Taxonomy Extension Definition Linkbase Document

101.LAB		Inline XBRL Taxonomy Extension Label Linkbase Document

101.PRE		Inline XBRL Taxonomy Extension Presentation Linkbase Document

104		Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101).

~~SIGNATURES~~

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.

Date: May ~~6, 2021~~5, 2022	/s/ Todd F. Clossin
	Todd F. Clossin
	President and Chief Executive Officer (Principal Executive Officer)

Date: May ~~6, 2021~~5, 2022	/s/ ~~Robert H. Young~~Daniel K. Weiss, Jr.
	~~Robert H. Young~~Daniel K. Weiss, Jr.
	~~Senior~~ Executive Vice President and Chief Financial Officer
	(Principal Financial Officer)


West Virginia		55-0571723
(State of incorporation)		(IRS Employer Identification No.)

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


Title of each class	Trading Symbol	Name of each exchange on which registered
Common Stock $2.0833 Par Value	WSBC	NASDAQ Global Select Market
Depositary Shares (each representing 1/40th interest in a share of 6.75% Fixed-Rate Reset Non-Cumulative Perpetual Preferred Stock, Series A)	WSBCP	NASDAQ Global Select Market


Item No.	ITEM	Page No.	ITEM	Page No.

	PART I - FINANCIAL INFORMATION		PART I - FINANCIAL INFORMATION
1	Financial Statements	2	Financial Statements	2
	Consolidated Balance Sheets at March 31, 2021 (unaudited) and December 31, 2020	2	Consolidated Balance Sheets at March 31, 2022 (unaudited) and December 31, 2021	2
	Consolidated Statements of Comprehensive Income for the three months ended March 31, 2021 and 2020 (unaudited)	3	Consolidated Statements of Income and Comprehensive Income for the three months ended March 31, 2022 and 2021 (unaudited)	3
	Consolidated Statements of Changes in Shareholders' Equity for the three months ended March 31, 2021 and 2020 (unaudited)	4	Consolidated Statements of Changes in Shareholders' Equity for the three months ended March 31, 2022 and 2021 (unaudited)	4
	Consolidated Statements of Cash Flows for the three months ended March 31, 2021 and 2020 (unaudited)	5	Consolidated Condensed Statements of Cash Flows for the three months ended March 31, 2022 and 2021 (unaudited)	5
	Notes to Consolidated Financial Statements (unaudited)	6	Notes to Consolidated Financial Statements (unaudited)	6

2	Management’s Discussion and Analysis of Financial Condition and Results of Operations	31	Management’s Discussion and Analysis of Financial Condition and Results of Operations	31

3	Quantitative and Qualitative Disclosures About Market Risk	51	Quantitative and Qualitative Disclosures About Market Risk	50

4	Controls and Procedures	53	Controls and Procedures	52

	PART II – OTHER INFORMATION		PART II – OTHER INFORMATION
1	Legal Proceedings	54	Legal Proceedings	53

2	Unregistered Sales of Equity Securities and Use of Proceeds	54	Unregistered Sales of Equity Securities and Use of Proceeds	53

5	Other Information	54

6	Exhibits	55	Exhibits	54

	Signatures	56	Signatures	55


	For the Three Months Ended March 31,						For the Three Months Ended March 31,
(unaudited, in thousands)	2021			2020			2022			2021
NET CASH PROVIDED BY OPERATING ACTIVITIES	$	52,004		$	32,884		$	47,741		$	52,004
INVESTING ACTIVITIES
Net decrease (increase) in loans held for investment		100,799			(131,110	)
Net decrease in loans held for investment								6,537			100,799
Available-for-sale debt securities:
Proceeds from sales		—			222,668
Proceeds from maturities, prepayments and calls		239,259			157,954			180,092			239,259
Purchases of securities		(1,068,526	)		(197,153	)		(220,324	)		(1,068,526	)
Held-to-maturity debt securities:
Proceeds from maturities, prepayments and calls		27,147			48,093			21,801			27,147
Purchases of securities		(110,298	)		(11,734	)		(174,995	)		(110,298	)
Equity securities:
Proceeds from sales		—			50
Proceeds from bank owned life insurance		—			10			6,061			—
Purchases of premises and equipment – net		(2,362	)		(2,925	)		(559	)		(2,362	)
Sale of portfolio loans		—			28,262
Net cash (used in) provided by investing activities		(813,981	)		114,115
Net cash used in investing activities								(181,387	)		(813,981	)
FINANCING ACTIVITIES
Increase in deposits		858,853			42,892			232,640			858,853
Proceeds from Federal Home Loan Bank borrowings		—			475,000
Repayment of Federal Home Loan Bank borrowings		(115,053	)		(305,070	)		(60,048	)		(115,053	)
(Decrease) increase in other short-term borrowings		(104,732	)		59,104
Increase (decrease) in other short-term borrowings								16,645			(104,732	)
Principal repayments of finance lease obligations		(109	)		(104	)		(115	)		(109	)
Decrease in federal funds purchased		—			(7,500	)
Repayment of junior subordinated debt		—			(6,702	)
Issuance of subordinated debt, net of issuance costs								147,715			—
Dividends paid to common shareholders		(21,419	)		(21,016	)		(20,570	)		(21,419	)
Dividends paid to preferred shareholders		(2,531	)		—			(2,531	)		(2,531	)
Treasury shares sold (purchased) - net		569			(24,527	)
Treasury shares (purchased) sold - net								(61,950	)		569
Net cash provided by financing activities		615,578			212,077			251,786			615,578
Net (decrease) increase in cash, cash equivalents and restricted cash		(146,399	)		359,076
Net increase in cash, cash equivalents and restricted cash								118,140			(146,399	)
Cash, cash equivalents and restricted cash at beginning of the period		905,447			234,796			1,251,358			905,447
Cash, cash equivalents and restricted cash at end of the period	$	759,048		$	593,872		$	1,369,498		$	759,048
SUPPLEMENTAL DISCLOSURES
Interest paid on deposits and other borrowings	$	10,719		$	26,074		$	5,014		$	10,719
Income taxes paid		—			—
Transfers of loans to other real estate owned		—			28			87			—
Transfers of portfolio loans to loans held for sale		—			37,195


	For the Three Months Ended March 31,				For the Three Months Ended March 31,
(unaudited, in thousands, except shares and per share amounts)	2021		2020		2022		2021
Numerator for both basic and diluted earnings per common share:
Net income available to common shareholders	$	70,584	$	23,396	$	41,593	$	70,584
Denominator:
Total average basic common shares outstanding		67,263,714		67,486,550		61,445,399		67,263,714
Effect of dilutive stock options and other stock compensation		91,704		100,896		147,966		91,704
Total diluted average common shares outstanding		67,355,418		67,587,446		61,593,365		67,355,418
Earnings per common share - basic	$	1.05	$	0.35	$	0.68	$	1.05
Earnings per common share - diluted	$	1.05	$	0.35	$	0.68	$	1.05


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


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


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


	For the Three Months Ended March 31, 2021 and 2020																									For the Three Months Ended March 31, 2022 and 2021
																	Accumulated																									Accumulated
	Preferred		Common Stock														Other			Deferred						Preferred		Common Stock														Other			Deferred
(unaudited, in thousands, except	Stock		Shares					Capital			Retained			Treasury			Comprehensive			Benefits for						Stock		Shares					Capital			Retained			Treasury			Comprehensive			Benefits for
shares and per share amounts)	Amount		Outstanding			Amount		Surplus			Earnings			Stock			Income (Loss)			Directors			Total			Amount		Outstanding			Amount		Surplus			Earnings			Stock			Income (Loss)			Directors			Total
December 31, 2021																										$	144,484		62,307,245		$	141,834	$	1,635,642		$	977,765		$	(199,759	)	$	(5,120	)	$	(1,680	)	$	2,693,166
Net income																											—		—			—		—			44,124			—			—			—			44,124
Other comprehensive loss																											—		—			—		—			—			—			(106,192	)		—			(106,192	)
Comprehensive loss																											—		—			—		—			—			—			—			—			(62,068	)
Common dividends declared ($0.34 per share)																											—		—			—		—			(20,538	)		—			—			—			(20,538	)
Preferred dividends declared ($16.875 per share)																											—		—			—		—			(2,531	)		—			—			—			(2,531	)
Stock issued for dividend reinvestment																											—		14,531			—		—			(505	)		505			—			—			—
Treasury shares acquired																											—		(1,724,571	)		—		—			—			(62,323	)		—			—			(62,323	)
Stock options exercised																											—		16,209			—		(192	)		—			565			—			—			373
Stock compensation expense																											—		—			—		1,241			—			—			—			—			1,241
Deferred benefits for directors- net																											—		—			—		14			—			—			—			(18	)		(4	)
March 31, 2022																										$	144,484		60,613,414		$	141,834	$	1,636,705		$	998,315		$	(261,012	)	$	(111,312	)	$	(1,698	)	$	2,547,316

December 31, 2020	$	144,484		67,254,706		$	141,834	$	1,634,815		$	831,688		$	(25,949	)	$	31,359		$	(1,494	)	$	2,756,737		$	144,484		67,254,706		$	141,834	$	1,634,815		$	831,688		$	(25,949	)	$	31,359		$	(1,494	)	$	2,756,737
Net income		—		—			—		—			73,115			—			—			—			73,115			—		—			—		—			73,115			—			—			—			73,115
Other comprehensive loss		—		—			—		—			—			—			(21,556	)		—			(21,556	)		—		—			—		—			—			—			(21,556	)		—			(21,556	)
Comprehensive income		—		—			—		—			—			—			—			—			51,559			—		—			—		—			—			—			—			—			51,559
Common dividends declared ($0.33 per share)		—		—			—		—			(22,095	)		—			—			—			(22,095	)
Preferred dividends declared ($16.875 per share)		—		—			—		—			(2,531	)		—			—			—			(2,531	)
Common dividends declared ($0.33 per share)																											—		—			—		—			(22,095	)		—			—			—			(22,095	)
Preferred dividends declared ($16.875 per share)																											—		—			—		—			(2,531	)		—			—			—			(2,531	)
Stock issued for dividend reinvestment		—		11,720			—		—			(391	)		391			—			—			—			—		11,720			—		—			(391	)		391			—			—			—
Treasury shares acquired		—		(5,135	)		—		183			—			(183	)		—			—			—			—		(5,135	)		—		183			—			(183	)		—			—			—
Stock options exercised		—		20,843			—		(183	)		—			752			—			—			569			—		20,843			—		(183	)		—			752			—			—			569
Stock compensation expense		—		—			—		1,288			—			—			—			—			1,288			—		—			—		1,288			—			—			—			—			1,288
Deferred benefits for directors- net		—		—			—		—			—			—			—			(5	)		(5	)		—		—			—		—			—			—			—			(5	)		(5	)
March 31, 2021	$	144,484		67,282,134		$	141,834	$	1,636,103		$	879,786		$	(24,989	)	$	9,803		$	(1,499	)	$	2,785,522		$	144,484		67,282,134			141,834		1,636,103			879,786			(24,989	)		9,803			(1,499	)	$	2,785,522

December 31, 2019	$	—		67,824,428		$	141,827	$	1,636,966		$	824,694		$	(9,463	)	$	1,201		$	(1,304	)	$	2,593,921
Net income		—		—			—		—			23,396			—			—			—			23,396
Other comprehensive income		—		—			—		—			—			—			39,940			—			39,940
Comprehensive income		—		—			—		—			—			—			—			—			63,336
Common dividends declared ($0.32 per share)		—		—			—		—			(21,435	)		—			—			—			(21,435	)
Adoption of ASU 2016-13		—		—			—		—			(26,591	)		—			—			—			(26,591	)
Treasury shares acquired		—		(786,012	)		—		—			—			(24,972	)		—			—			(24,972	)
Stock options exercised		—		19,739			—		(276	)		—			721			—			—			445
Stock compensation expense		—		—			—		1,370			—			—			—			—			1,370
Deferred benefits for directors- net		—		—			—		62			—			—			—			(76	)		(14	)
March 31, 2020	$	—		67,058,155		$	141,827	$	1,638,122		$	800,064		$	(33,714	)	$	41,141		$	(1,380	)	$	2,586,060


	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- drafts		Total		Commercial Real Estate- Land and Construction		Commercial Real Estate- Improved Property		Commercial and Industrial		Residential Real Estate		Home Equity		Consumer		Deposit Over- drafts		Total
March 31, 2021
March 31, 2022
Allowance for credit losses:
Loans individually-evaluated	$	503	$	4,035	$	1,501	$	—	$	—	$	—	$	—	$	6,039	$	342	$	11,686	$	266	$	—	$	—	$	—	$	—	$	12,294
Loans collectively-evaluated		6,837		95,706		31,783		13,438		998		4,532		707		154,001		7,236		53,323		25,269		13,714		675		3,746		1,608		105,571
Loan commitments		4,000		208		1,583		869		50		21		—		6,731		4,931		320		670		1,740		58		331		—		8,050
Total allowance for credit losses - loans and commitments	$	11,340	$	99,949	$	34,867	$	14,307	$	1,048	$	4,553	$	707	$	166,771	$	12,509	$	65,329	$	26,205	$	15,454	$	733	$	4,077	$	1,608	$	125,915

Portfolio loans:
Individually-evaluated for credit losses⁽¹⁾	$	1,125	$	40,158	$	1,838	$	—	$	—	$	—	$	—	$	43,121
Individually-evaluated for credit losses																	$	1,174	$	52,308	$	540	$	—	$	—	$	—	$	—	$	54,022
Collectively-evaluated for credit losses		640,892		5,030,567		2,420,897		1,644,422		634,018		289,395		—		10,660,191		856,695		4,669,905		1,512,538		1,767,064		592,872		280,176		—		9,679,250
Total portfolio loans	$	642,017	$	5,070,725	$	2,422,735	$	1,644,422	$	634,018	$	289,395	$	—	$	10,703,312	$	857,869	$	4,722,213	$	1,513,078	$	1,767,064	$	592,872	$	280,176	$	—	$	9,733,272

December 31, 2020
December 31, 2021
Allowance for credit losses:
Loans individually-evaluated	$	602	$	4,196	$	1,484	$	—	$	—	$	—	$	—	$	6,282	$	381	$	8,560	$	333	$	—	$	—	$	—	$	—	$	9,274
Loans collectively-evaluated		10,239		106,456		36,366		17,851		1,487		6,507		639		179,545		6,929		56,795		26,542		15,401		724		3,737		2,220		112,348
Loan commitments		6,508		712		1,275		955		45		19		—		9,514		4,180		201		1,497		1,576		49		272		—		7,775
Total allowance for credit losses - loans and commitments	$	17,349	$	111,364	$	39,125	$	18,806	$	1,532	$	6,526	$	639	$	195,341	$	11,490	$	65,556	$	28,372	$	16,977	$	773	$	4,009	$	2,220	$	129,397

Portfolio loans:
Individually-evaluated for credit losses⁽¹⁾	$	1,455	$	40,372	$	2,863	$	—	$	—	$	—	$	—	$	44,690
Individually-evaluated for credit losses																	$	1,248	$	66,635	$	576	$	—	$	—	$	—	$	—	$	68,459
Collectively-evaluated for credit losses		666,822		4,996,743		2,404,575		1,720,961		646,387		309,055		—		10,744,543		832,632		4,638,453		1,589,744		1,721,378		605,682		277,130		—		9,665,019
Total portfolio loans	$	668,277	$	5,037,115	$	2,407,438	$	1,720,961	$	646,387	$	309,055	$	—	$	10,789,233	$	833,880	$	4,705,088	$	1,590,320	$	1,721,378	$	605,682	$	277,130	$	—	$	9,733,478


	Commercial Loans by Internally Assigned Risk Grade								Commercial Loans by Internally Assigned Risk Grade
(unaudited, in thousands)	Commercial Real Estate- Land and Construction		Commercial Real Estate- Improved Property		Commercial & Industrial		Total Commercial Loans		Commercial Real Estate- Land and Construction		Commercial Real Estate- Improved Property		Commercial & Industrial		Total Commercial Loans
As of March 31, 2021
As of March 31, 2022
Pass	$	634,835	$	4,679,257	$	2,365,558	$	7,679,650	$	847,525	$	4,424,340	$	1,463,315	$	6,735,180
Criticized - compromised		5,360		297,801		37,782		340,943		1,808		206,501		25,834		234,143
Classified - substandard		1,822		93,667		19,395		114,884		8,536		91,372		23,929		123,837
Classified - doubtful		—		—		—		—		—		—		—		—
Total	$	642,017	$	5,070,725	$	2,422,735	$	8,135,477	$	857,869	$	4,722,213	$	1,513,078	$	7,093,160

As of December 31, 2020
As of December 31, 2021
Pass	$	657,435	$	4,609,726	$	2,350,724	$	7,617,885	$	823,316	$	4,400,872	$	1,540,569	$	6,764,757
Criticized - compromised		7,397		320,301		34,597		362,295		7,955		222,830		17,733		248,518
Classified - substandard		3,445		107,088		22,117		132,650		2,609		81,386		32,018		116,013
Classified - doubtful		—		—		—		—		—		—		—		—
Total	$	668,277	$	5,037,115	$	2,407,438	$	8,112,830	$	833,880	$	4,705,088	$	1,590,320	$	7,129,288


	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)
As of March 31, 2022
Commercial real estate:
Land and construction	$	857,796	$	—	$	—	$	73	$	73	$	857,869	$	—
Improved property		4,699,859		11,590		732		10,032		22,354		4,722,213		3,449
Total commercial real estate		5,557,655		11,590		732		10,105		22,427		5,580,082		3,449
Commercial and industrial		1,502,111		7,465		527		2,975		10,967		1,513,078		319
Residential real estate		1,751,895		3,091		2,630		9,448		15,169		1,767,064		1,229
Home equity		586,591		1,954		437		3,890		6,281		592,872		631
Consumer		277,213		1,386		884		693		2,963		280,176		514
Total portfolio loans		9,675,465		25,486		5,210		27,111		57,807		9,733,272		6,142
Loans held for sale		15,959		—		—		—		—		15,959		—
Total loans	$	9,691,424	$	25,486	$	5,210	$	27,111	$	57,807	$	9,749,231	$	6,142

Nonperforming loans included above are as follows:
Non-accrual loans	$	10,557	$	1,334	$	754	$	20,727	$	22,815	$	33,372
TDRs accruing interest		3,203		229		57		242		528		3,731
Total nonperforming loans	$	13,760	$	1,563	$	811	$	20,969	$	23,343	$	37,103

As of December 31, 2021
Commercial real estate:
Land and construction	$	833,755	$	—	$	—	$	125	$	125	$	833,880	$	51
Improved property		4,681,028		6,377		7,728		9,955		24,060		4,705,088		3,042
Total commercial real estate		5,514,783		6,377		7,728		10,080		24,185		5,538,968		3,093
Commercial and industrial		1,583,347		2,275		1,213		3,485		6,973		1,590,320		559
Residential real estate		1,702,587		2,331		3,254		13,206		18,791		1,721,378		2,840
Home equity		599,189		2,240		602		3,651		6,493		605,682		685
Consumer		273,577		1,532		1,208		813		3,553		277,130		627
Total portfolio loans		9,673,483		14,755		14,005		31,235		59,995		9,733,478		7,804
Loans held for sale		25,277		—		—		—		—		25,277		—
Total loans	$	9,698,760	$	14,755	$	14,005	$	31,235	$	59,995	$	9,758,755	$	7,804

Nonperforming loans included above are as follows:
Non-accrual loans	$	11,174	$	914	$	564	$	23,090	$	24,568	$	35,742
TDRs accruing interest		3,275		3		127		341		471		3,746
Total nonperforming loans	$	14,449	$	917	$	691	$	23,431	$	25,039	$	39,488


	Nonperforming Loans
	March 31, 2022						December 31, 2021
	Unpaid						Unpaid
	Principal		Recorded		Related		Principal		Recorded		Related
(unaudited, in thousands)	Balance (1)		Investment		Allowance		Balance (1)		Investment		Allowance
With no related specific allowance recorded:
Commercial real estate:
Land and construction	$	156	$	155	$	—	$	74	$	73	$	—
Improved property		9,599		7,758		—		9,846		8,089		—
Commercial and industrial		6,136		4,779		—		6,528		5,256		—
Residential real estate		23,443		18,309		—		25,492		20,065		—
Home equity		7,156		5,585		—		6,985		5,440		—
Consumer		847		517		—		869		565		—
Total nonperforming loans without a specific allowance		47,337		37,103		—		49,794		39,488		—
Total nonperforming loans with a specific allowance		—		—		—		—		—		—
Total nonperforming loans	$	47,337	$	37,103	$	—	$	49,794	$	39,488	$	—


	Nonperforming Loans
	For the Three Months Ended
	March 31, 2022				March 31, 2021
	Average		Interest		Average		Interest
	Recorded		Income		Recorded		Income
(unaudited, in thousands)	Investment		Recognized		Investment		Recognized
With no related specific allowance recorded:
Commercial real estate:
Land and construction	$	114	$	—	$	295	$	—
Improved property		7,924		—		7,702		9
Commercial and industrial		5,018		—		2,544		1
Residential real estate		19,187		—		20,847		39
Home equity		5,513		—		5,639		6
Consumer		541		—		358		—
Total nonperforming loans without a specific allowance		38,296		—		37,385		55
With a specific allowance recorded:
Commercial real estate:
Land and construction		—		—		—		—
Improved property		—		—		2,089		—
Total nonperforming loans with a specific allowance		—		—		2,089		—
Total nonperforming loans	$	38,296	$	—	$	39,474	$	55


	Non-accrual Loans (1)
	March 31,		December 31,
(unaudited, in thousands)	2022		2021
Commercial real estate:
Land and construction	$	73	$	73
Improved property		7,391		7,715
Total commercial real estate		7,464		7,788
Commercial and industrial		4,592		5,064
Residential real estate		15,512		17,190
Home equity		5,319		5,163
Consumer		485		537
Total	$	33,372	$	35,742

	Non-accrual Loans ⁽¹⁾
	March 31,		December 31,
(unaudited, in thousands)	2021		2020
Commercial real estate:
Land and construction	$	120	$	469
Improved property		9,007		9,494
Total commercial real estate		9,127		9,963
Commercial and industrial		1,571		3,302
Residential real estate		18,358		17,925
Home equity		5,181		5,345
Consumer		338		345
Total	$	34,575	$	36,880

	TDRs
	March 31, 2021						December 31, 2020
(unaudited, in thousands)	Accruing		Non-Accrual		Total		Accruing		Non-Accrual		Total
Commercial real estate:
Land and construction	$	—	$	—	$	—	$	—	$	—	$	—
Improved property		426		157		583		655		165		820
Total commercial real estate		426		157		583		655		165		820
Commercial and industrial		104		—		104		111		—		111
Residential real estate		2,632		1,353		3,985		2,779		1,354		4,133
Home equity		388		253		641		363		300		663
Consumer		13		5		18		19		9		28
Total	$	3,563	$	1,768	$	5,331	$	3,927	$	1,828	$	5,755


	New TDRs (1)
	For the Three Months Ended
	March 31, 2022						March 31, 2021
			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		1	$	84	$	82		—	$	—	$	—
Improved property		—		—		—		—		—		—
Total commercial real estate		1		84		82		—		—		—
Commercial and industrial		—		—		—		—		—		—
Residential real estate		—		—		—		—		—		—
Home equity		—		—		—		—		—		—
Consumer		—		—		—		—		—		—
Total		1	$	84	$	82		—	$	—	$	—

	Defaulted TDRs ⁽¹⁾
	For the Three Months Ended
	March 31, 2021				March 31, 2020
	Number of		Recorded		Number of		Recorded
(unaudited, dollars in thousands)	Defaults		Investment		Defaults		Investment
Commercial real estate:
Land and construction		—	$	—		—	$	—
Improved property		—		—		—		—
Total commercial real estate		—		—		—		—
Commercial and industrial		—		—		1		13
Residential real estate		—		—		1		155
Home equity		—		—		—		—
Consumer		—		—		—		—
Total		—	$	—		2	$	168

	Loans As of December 31, 2020
	Amortized Cost Basis by Origination Year
(unaudited, in thousands)	2020		2019		2018		2017		2016		Prior		Revolving Loans Amortized Cost Basis		Revolving Loans Converted to Term		Total
Commercial real estate: land and construction
Risk rating:
Pass	$	133,720	$	314,614	$	109,232	$	27,483	$	16,404	$	29,685	$	26,297	$	—	$	657,435
Criticized - compromised		459		—		1,532		233		79		3,778		1,316		—		7,397
Classified - substandard		—		—		403		58		291		2,693		—		—		3,445
Classified - doubtful		—		—		—		—		—		—		—		—		—
Total	$	134,179	$	314,614	$	111,167	$	27,774	$	16,774	$	36,156	$	27,613	$	—	$	668,277

Commercial real estate: improved property
Risk rating:
Pass	$	809,516	$	670,554	$	646,629	$	474,622	$	572,733	$	1,346,552	$	89,120	$	—	$	4,609,726
Criticized - compromised		2,693		67,261		16,793		59,251		42,284		130,247		1,772		—		320,301
Classified - substandard		102		16,366		4,946		11,647		18,460		55,567		—		—		107,088
Classified - doubtful		—		—		—		—		—		—		—		—		—
Total	$	812,311	$	754,181	$	668,368	$	545,520	$	633,477	$	1,532,366	$	90,892	$	—	$	5,037,115

Commercial and industrial
Risk rating:
Pass	$	977,085	$	240,262	$	193,712	$	160,924	$	85,379	$	265,890	$	427,336	$	136	$	2,350,724
Criticized - compromised		453		2,726		4,206		2,795		324		11,640		12,453		—		34,597
Classified - substandard		—		3,817		1,947		3,771		1,603		5,073		5,906		—		22,117
Classified - doubtful		—		—		—		—		—		—		—		—		—
Total	$	977,538	$	246,805	$	199,865	$	167,490	$	87,306	$	282,603	$	445,695	$	136	$	2,407,438

Residential real estate
Loan delinquency:
Current	$	385,541	$	242,770	$	149,603	$	108,090	$	170,967	$	641,665	$	—	$	—	$	1,698,636
30-59 days past due		—		—		320		533		—		1,761		—		—		2,614
60-89 days past due		—		—		823		—		185		4,646		—		—		5,654
90 days or more past due	��	—		483		166		761		819		11,828		—		—		14,057
Total	$	385,541	$	243,253	$	150,912	$	109,384	$	171,971	$	659,900	$	—	$	—	$	1,720,961

Home equity
Loan delinquency:
Current	$	18,191	$	3,611	$	3,334	$	975	$	1,110	$	16,477	$	583,486	$	12,135	$	639,319
30-59 days past due		124		—		34		—		—		882		1,247		127		2,414
60-89 days past due		—		—		—		—		—		14		749		12		775
90 days or more past due		—		—		8		156		88		1,786		1,075		766		3,879
Total	$	18,315	$	3,611	$	3,376	$	1,131	$	1,198	$	19,159	$	586,557	$	13,040	$	646,387

Consumer
Loan delinquency:
Current	$	72,847	$	89,637	$	39,584	$	22,118	$	13,144	$	45,735	$	22,253	$	165	$	305,483
30-59 days past due		481		408		210		311		194		379		15		—		1,998
60-89 days past due		273		147		84		100		163		253		11		—		1,031
90 days or more past due		113		72		73		31		12		242		—		—		543
Total	$	73,714	$	90,264	$	39,951	$	22,560	$	13,513	$	46,609	$	22,279	$	165	$	309,055


	Point of Revenue	For the Three Months Ended March 31,
(unaudited, in thousands)	Recognition	2022			2021
Revenue Streams
Trust fees
Trust account fees	Over time	$	5,542		$	5,313
WesMark fees	Over time		2,293			2,318
Total trust fees			7,835			7,631
Service charges on deposits
Commercial banking fees	Over time		568			564
Personal service charges	At a point in time and over time		5,522			4,330
Total service charges on deposits			6,090			4,894
Net securities brokerage revenue
Annuity commissions	At a point in time		1,582			917
Equity and debt security trades	At a point in time		57			76
Managed money	Over time		327			283
Trail commissions	Over time		254			248
Total net securities brokerage revenue			2,220			1,524

Debit card sponsorship income (1)	At a point in time and over time		—			646
Payment processing fees (1)	At a point in time and over time		741			713
Electronic banking fees	At a point in time		5,345			4,365
Mortgage banking income	At a point in time		1,923			4,264
Net (loss) gain on other real estate owned and other assets (2)	At a point in time and over time		(806	)		175


	Accumulated Other Comprehensive Income/(Loss) (1)
(unaudited, in thousands)	Defined Benefit Plans			Unrealized Gains (Losses) on Debt Securities Available-for-Sale			Total
Balance at December 31, 2021	$	(398	)	$	(4,722	)	$	(5,120	)
Other comprehensive loss before reclassifications		0			(106,247	)		(106,247	)
Amounts reclassified from accumulated other comprehensive loss		54			1			55
Period change		54			(106,246	)		(106,192	)
Balance at March 31, 2022	$	(344	)	$	(110,968	)	$	(111,312	)

Balance at December 31, 2020	$	(15,502	)	$	46,861		$	31,359
Other comprehensive loss before reclassifications		0			(22,026	)		(22,026	)
Amounts reclassified from accumulated other comprehensive loss		472			(2	)		470
Period change		472			(22,028	)		(21,556	)
Balance at March 31, 2021	$	(15,030	)	$	24,833		$	9,803


Details about Accumulated Other Comprehensive Income/(Loss) Components	For the Three Months Ended March 31,						Affected Line Item in the Statement of Comprehensive Income
(unaudited, in thousands)	2022			2021
Debt securities available-for-sale (1):
Net securities gains reclassified into earnings	$	2		$	(3	)	Net securities gains (Non-interest income)
Related income tax expense ⁽²⁾		(1	)		1		Provision for income taxes
Net effect on accumulated other comprehensive income for the period		1			(2	)

Defined benefit plans (3):
Amortization of net loss and prior service costs		72			622		Employee benefits (Non-interest expense)
Related income tax benefit ⁽²⁾		(18	)		(150	)	Provision for income taxes
Net effect on accumulated other comprehensive income for the period		54			472
Total reclassifications for the period	$	55		$	470


				Trust and
	Community			Investment
(unaudited, in thousands)	Banking			Services		Consolidated
For The Three Months Ended March 31, 2022
Interest and dividend income	$	112,174		$	—	$	112,174
Interest expense		4,463			—		4,463
Net interest income		107,711			—		107,711
Provision for credit losses		(3,438	)		—		(3,438	)
Net interest income after provision for credit losses		111,149			—		111,149
Non-interest income		22,547			7,835		30,382
Non-interest expense		83,225			4,323		87,548
Income before provision for income taxes		50,471			3,512		53,983
Provision for income taxes		9,121			738		9,859
Net income		41,350			2,774		44,124
Preferred stock dividends		2,531			—		2,531
Net income available to common shareholders	$	38,819		$	2,774	$	41,593

For The Three Months Ended March 31, 2021
Interest and dividend income	$	125,054		$	—	$	125,054
Interest expense		8,576			—		8,576
Net interest income		116,478			—		116,478
Provision for credit losses		(27,958	)		—		(27,958	)
Net interest income after provision for credit losses		144,436			—		144,436
Non-interest income		25,577			7,631		33,208
Non-interest expense		82,011			4,316		86,327
Income before provision for income taxes		88,002			3,315		91,317
Provision for income taxes		17,506			696		18,202
Net income		70,496			2,619		73,115
Preferred stock dividends		2,531			—		2,531
Net income available to common shareholders	$	67,965		$	2,619	$	70,584

	For The Three Months Ended March 31, 2021
	Compared to March 31, 2020
(unaudited, in thousands)	Volume			Rate			Net Increase (Decrease)
Increase (decrease) in interest income:
Due from banks - interest bearing	$	433		$	(658	)	$	(225	)
Loans, net of unearned income		5,790			(15,935	)		(10,145	)
Taxable securities		(1,648	)		(4,211	)		(5,859	)
Tax-exempt securities ⁽¹⁾		(568	)		(123	)		(691	)
Other earning assets		(535	)		(84	)		(619	)
Total interest income change ⁽¹⁾		3,472			(21,011	)		(17,539	)
Increase (decrease) in interest expense:
Interest bearing demand deposits		730			(3,081	)		(2,351	)
Money market accounts		249			(2,023	)		(1,774	)
Savings deposits		137			(796	)		(659	)
Certificates of deposit		(731	)		(953	)		(1,684	)
Federal Home Loan Bank borrowings		(4,953	)		(865	)		(5,818	)
Other borrowings		(271	)		(481	)		(752	)
Subordinated debt and junior subordinated debt		(74	)		(598	)		(672	)
Total interest expense change		(4,913	)		(8,797	)		(13,710	)
Net interest income increase (decrease) ⁽¹⁾	$	8,385		$	(12,214	)	$	(3,829	)

	March 31, 2021
	Three Months Principal & Interest Plus Three Months Principal Only Deferral		Phase Three Deferral
(unaudited, in thousands)	Loan Balance		Loan Balance		Total Loan Balance
Manufacturing	$	835	$	—	$	835
Entertainment and recreation		—		152,045		152,045
Total modified commercial loans	$	835	$	152,045	$	152,880