Wesbanco 10Q 2021 Q1 Quarterly report

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q

(Mark One)

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

For the quarterly period ended March 31, 2021

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

For the transition period from to

Commission File Number 000-08467

WESBANCO, INC.

(Exact name of Registrant as specified in its charter)

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

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

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

NOT APPLICABLE

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

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

Title of each class

Trading Symbol

Name of each exchange on which registered

Common Stock $2.0833 Par Value

WSBC

NASDAQ Global Select Market

Depositary Shares (each representing 1/40^th interest in a share of 6.75% Fixed-Rate Reset Non-Cumulative Perpetual Preferred Stock, Series A)

WSBCP

NASDAQ Global Select Market

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

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of 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.

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

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

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

As of April 28, 2021, there were 67,315,896 shares of Wesbanco, Inc. common stock, $2.0833 par value, outstanding.

WESBANCO, INC.

TABLE OF CONTENTS


Item No.	ITEM	Page No.

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

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

3	Quantitative and Qualitative Disclosures About Market Risk	51

4	Controls and Procedures	53

	PART II – OTHER INFORMATION
1	Legal Proceedings	54

2	Unregistered Sales of Equity Securities and Use of Proceeds	54

5	Other Information	54

6	Exhibits	55

	Signatures	56

PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

WESBANCO, INC. CONSOLIDATED BALANCE SHEETS

	March 31,			December 31,
(unaudited, in thousands, except shares)	2021			2020
ASSETS
Cash and due from banks, including interest bearing amounts of $550,008 and $721,086, respectively	$	759,048		$	905,447
Securities:
Equity securities, at fair value		13,123			13,047
Available-for-sale debt securities, at fair value		2,775,212			1,978,136
Held-to-maturity debt securities (fair values of $839,872 and $768,183, respectively)		813,740			731,212
Allowance for credit losses, held-to-maturity debt securities		(290	)		(326	)
Net held-to-maturity debt securities		813,450			730,886
Total securities		3,601,785			2,722,069
Loans held for sale		153,520			168,378
Portfolio loans, net of unearned income		10,703,312			10,789,233
Allowance for credit losses - loans		(160,040	)		(185,827	)
Net portfolio loans		10,543,272			10,603,406
Premises and equipment, net		239,863			249,421
Accrued interest receivable		68,896			66,790
Goodwill and other intangible assets, net		1,160,195			1,163,091
Bank-owned life insurance		307,747			306,038
Other assets		223,462			240,970
Total Assets	$	17,057,788		$	16,425,610
LIABILITIES
Deposits:
Non-interest bearing demand	$	4,460,049		$	4,070,835
Interest bearing demand		3,126,186			2,839,536
Money market		1,771,703			1,685,927
Savings deposits		2,373,987			2,214,565
Certificates of deposit		1,555,074			1,618,510
Total deposits		13,286,999			12,429,373
Federal Home Loan Bank borrowings		433,984			549,003
Other short-term borrowings		137,218			241,950
Subordinated debt and junior subordinated debt		192,430			192,291
Total borrowings		763,632			983,244
Accrued interest payable		3,224			4,314
Other liabilities		218,411			251,942
Total Liabilities		14,272,266			13,668,873
SHAREHOLDERS' EQUITY
Preferred stock, no par value, 1,000,000 shares authorized; 150,000 shares 6.75% non-cumulative perpetual preferred stock, Series A, liquidation preference $150,000,000, issued and outstanding at March 31, 2021 and December 31, 2020, respectively		144,484			144,484
Common stock, $2.0833 par value; 100,000,000 shares authorized; 68,081,306 shares issued; 67,282,134 and 67,254,706 shares outstanding at March 31, 2021 and December 31, 2020, respectively		141,834			141,834
Capital surplus		1,636,103			1,634,815
Retained earnings		879,786			831,688
Treasury stock (799,172 and 826,600 shares - at cost, respectively)		(24,989	)		(25,949	)
Accumulated other comprehensive income		9,803			31,359
Deferred benefits for directors		(1,499	)		(1,494	)
Total Shareholders' Equity		2,785,522			2,756,737
Total Liabilities and Shareholders' Equity	$	17,057,788		$	16,425,610

See Notes to Consolidated Financial Statements.

WESBANCO, INC. CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

	For the Three Months Ended March 31,
(unaudited, in thousands, except shares and per share amounts)	2021			2020
INTEREST AND DIVIDEND INCOME
Loans, including fees	$	109,358			119,503
Interest and dividends on securities:
Taxable		11,127			16,986
Tax-exempt		3,910			4,456
Total interest and dividends on securities		15,037			21,442
Other interest income		659			1,503
Total interest and dividend income		125,054			142,448
INTEREST EXPENSE
Interest bearing demand deposits		1,043			3,394
Money market deposits		578			2,352
Savings deposits		264			923
Certificates of deposit		2,370			4,054
Total interest expense on deposits		4,255			10,723
Federal Home Loan Bank borrowings		2,414			8,232
Other short-term borrowings		118			870
Subordinated debt and junior subordinated debt		1,789			2,461
Total interest expense		8,576			22,286
NET INTEREST INCOME		116,478			120,162
Provision for credit losses		(27,958	)		29,821
Net interest income after provision for credit losses		144,436			90,341
NON-INTEREST INCOME
Trust fees		7,631			6,952
Service charges on deposits		4,894			6,617
Electronic banking fees		4,365			4,254
Net securities brokerage revenue		1,524			1,679
Bank-owned life insurance		1,709			1,769
Mortgage banking income		4,264			1,276
Net securities gains		279			1,491
Net gain on other real estate owned and other assets		175			169
Other income		8,367			3,802
Total non-interest income		33,208			28,009
NON-INTEREST EXPENSE
Salaries and wages		36,890			38,910
Employee benefits		10,266			10,373
Net occupancy		7,177			7,084
Equipment and software		6,765			6,039
Marketing		2,384			1,138
FDIC insurance		1,282			2,113
Amortization of intangible assets		2,896			3,374
Restructuring and merger-related expense		851			5,164
Other operating expenses		17,816			17,138
Total non-interest expense		86,327			91,333
Income before provision for income taxes		91,317			27,017
Provision for income taxes		18,202			3,621
Net income		73,115			23,396
Preferred stock dividends		2,531			—
Net income available to common shareholders	$	70,584		$	23,396
EARNINGS PER COMMON SHARE
Basic	$	1.05		$	0.35
Diluted	$	1.05		$	0.35
AVERAGE COMMON SHARES OUTSTANDING
Basic		67,263,714			67,486,550
Diluted		67,355,418			67,587,446
DIVIDENDS DECLARED PER COMMON SHARE	$	0.33		$	0.32

COMPREHENSIVE INCOME	$	51,559		$	63,336

See Notes to Consolidated Financial Statements.

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

	For the Three Months Ended March 31, 2021 and 2020
																	Accumulated
	Preferred		Common Stock														Other			Deferred
(unaudited, in thousands, except	Stock		Shares					Capital			Retained			Treasury			Comprehensive			Benefits for
shares and per share amounts)	Amount		Outstanding			Amount		Surplus			Earnings			Stock			Income (Loss)			Directors			Total
December 31, 2020	$	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
Other comprehensive loss		—		—			—		—			—			—			(21,556	)		—			(21,556	)
Comprehensive income		—		—			—		—			—			—			—			—			51,559
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			—			—			—
Treasury shares acquired		—		(5,135	)		—		183			—			(183	)		—			—			—
Stock options exercised		—		20,843			—		(183	)		—			752			—			—			569
Stock compensation expense		—		—			—		1,288			—			—			—			—			1,288
Deferred benefits for directors- net		—		—			—		—			—			—			—			(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

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

See Notes to Consolidated Financial Statements.

WESBANCO, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS

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

See Notes to Consolidated Financial Statements.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of presentation — The accompanying unaudited interim financial statements of Wesbanco, Inc. and its consolidated subsidiaries (“Wesbanco”) have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information and the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements and should be read in conjunction with our Annual Report on Form 10-K for the year ended December 31, 2020.

Wesbanco’s interim financial statements have been prepared following the significant accounting policies disclosed in Note 1 of the Notes to the Consolidated Financial Statements of its 2020 Annual Report on Form 10-K filed with the Securities and Exchange Commission. In the opinion of management, the accompanying interim financial information reflects all adjustments, including normal recurring adjustments, necessary to present fairly Wesbanco’s financial position and results of operations for each of the interim periods presented. Certain prior period amounts have been reclassified to conform to the current period presentation. Such reclassifications had no impact on Wesbanco’s net income and stockholders’ equity. Results of operations for interim periods are not necessarily indicative of the results of operations that may be expected for a full year.

Recent accounting pronouncements—The Financial Accounting Standards Board (“FASB”) issued Accounting Standards Updates (“ASU”) as noted below.

ASU 2020-04 Reference Rate Reform (Topic 848)

In March 2020, the FASB issued ASU 2020-04, “Reference Rate Reform (Topic 848)”. Due to the potential discontinuance of the London Interbank Offered Rate (LIBOR), regulators have undertaken reference rate initiatives to identify alternative reference rates that are more observable or transaction based and less susceptible to manipulation. The ASU also provides optional expedients for contract modifications that replace a reference rate affected by reference rate reform. The guidance is effective as of March 12, 2020 through December 31, 2022. Wesbanco is assessing the impact of adopting the new guidance on the consolidated financial statements on an ongoing basis with no material impacts expected at this time.

NOTE 2. EARNINGS PER COMMON SHARE

Earnings per common share are calculated as follows:

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

As of March 31, 2021 and 2020, respectively, 393,961 and 510,186 options to purchase shares were not included in the computation of net income per diluted share for the three months ended March 31, 2021 and 2020 because the exercise price was greater than the average market price of a common share, therefore, the effect would be antidilutive.

As of March 31, 2021 and 2020, shares related to the 2020 and 2019 total shareholder return plans were not included in the calculation because the effect would be antidilutive.

In addition, 0 performance-based restricted stock was estimated to be awarded as of March 31, 2021 and therefore, was not included in the diluted calculation. As of March 31, 2020, 25,618 shares were estimated to be awarded and those shares were included in the diluted calculation for the three months ended March 31, 2020.

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, 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, 2021 and December 31, 2020.

At March 31, 2021 and December 31, 2020, there were 0 holdings of any one issuer, other than U.S. government sponsored entities and its agencies, in an amount greater than 10% of Wesbanco’s shareholders’ equity. Equity securities, of which $10.1 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 million and $13.0 million at March 31, 2021 and December 31, 2020, 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. 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
Available-for-sale debt securities
Less than one year	$	47,465	$	47,583
1-5 years		145,739		152,800
5-10 years		358,854		366,119
Over 10 years		2,190,424		2,208,710
Total available-for-sale debt securities	$	2,742,482	$	2,775,212
Held-to-maturity debt securities
Less than one year	$	11,759	$	11,872
1-5 years		133,053		140,315
5-10 years		228,148		237,907
Over 10 years		440,780		449,778
Total held-to-maturity debt securities	$	813,740	$	839,872
Total debt securities	$	3,556,222	$	3,615,084

Securities with an aggregate fair value of $1.8 billion at March 31, 2021 and December 31, 2020, respectively, were pledged as security for public and trust funds, and securities sold under agreements to repurchase. Proceeds from the sale of available-for-sale securities were $0 million and $222.7 million for the three months ended March 31, 2021 and 2020, respectively. Net unrealized gains on available-for-sale securities included in accumulated other comprehensive income, net of tax, as of March 31, 2021 and December 31, 2020 were $24.8 million and $46.9 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 and 2020, respectively. All gains and losses presented in the table below are included in the net securities 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,
(unaudited, in thousands)	2021			2020
Debt securities:
Gross realized gains	$	140		$	3,335
Gross realized losses		(39	)		(1,031	)
Net gains on debt securities	$	101		$	2,304
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

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 million and $5.3 million as of March 31, 2021 and December 31, 2020, 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 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 and March 31, 2020, respectively:

	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 and December 31, 2020, respectively:

	March 31, 2021
	Less than 12 months							12 months or more							Total
(unaudited, dollars in thousands)	Fair Value		Unrealized Losses			# of Securities		Fair Value		Unrealized Losses			# of Securities		Fair Value		Unrealized Losses			# of Securities
U.S. Government sponsored entities and agencies	$	56,270	$	(2,706	)		6	$	—	$	—			—	$	56,270	$	(2,706	)		6
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
Commercial mortgage-backed securities and collateralized mortgage obligations of government sponsored entities and agencies		94,186		(721	)		9		—		—			—		94,186		(721	)		9
Obligations of state and political subdivisions		3,767		(36	)		1		—		—			—		3,767		(36	)		1
Total	$	1,128,184	$	(17,342	)		114	$	3,531	$	(82	)		4	$	1,131,715	$	(17,424	)	$	118

	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 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 million and $34.0 million at March 31, 2021 and December 31, 2020, 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 million and $6.2 million at March 31, 2021 and December 31, 2020, respectively. At March 31, 2021 and December 31, 2020, respectively, the balance included $21.4 and $13.8 million of net deferred income from PPP loans. The un-accreted discount on purchased loans from acquisitions was $35.9 million at March 31, 2021 and $39.4 million at December 31, 2020.

	March 31,		December 31,
(unaudited, in thousands)	2021		2020
Commercial real estate:
Land and construction	$	642,017	$	668,277
Improved property		5,070,725		5,037,115
Total commercial real estate		5,712,742		5,705,392
Commercial and industrial		1,598,921		1,681,182
Commercial and industrial - PPP		823,814		726,256
Residential real estate		1,644,422		1,720,961
Home equity		634,018		646,387
Consumer		289,395		309,055
Total portfolio loans		10,703,312		10,789,233
Loans held for sale		153,520		168,378
Total loans	$	10,856,832	$	10,957,611

The allowance for credit losses under the current expected credit losses methodology (“CECL”) is calculated utilizing the PD / 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, the one-year forecast was based upon a blended rate from two nationally-recognized published economic forecasts through March 31, 2021, 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% in the second quarter, and subsequently decrease to an average of 4.8% 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. 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 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, 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.

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, 2021 and 2020
(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, 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		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			—			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

Balance at December 31, 2019
Allowance for credit losses - loans	$	4,949		$	20,293		$	14,116		$	4,311		$	4,422		$	2,951		$	1,387		$	52,429
Allowance for credit losses - loan commitments		235			22			311			15			250			41			—			874
Total beginning allowance for credit losses - loans and loan commitments		5,184			20,315			14,427			4,326			4,672			2,992			1,387			53,303
Impact of adopting ASC 326		1,524			13,078			22,357			5,630			(3,936	)		2,576			213			41,442
Provision for credit losses:
Provision for loan losses	��	2,564			20,585			5,632			237			646			(1,241	)		(351	)		28,072
Provision for loan commitments		2,274			—			(582	)		49			2			—			—			1,743
Total provision for credit losses - loans and loan commitments		4,838			20,585			5,050			286			648			(1,241	)		(351	)		29,815
Charge-offs		(1	)		(1,398	)		(2,714	)		(386	)		(443	)		(856	)		(328	)		(6,126	)
Recoveries		8			293			107			272			172			415			143			1,410
Net charge-offs		7			(1,105	)		(2,607	)		(114	)		(271	)		(441	)		(185	)		(4,716	)
Balance at March 31, 2020
Allowance for credit losses - loans		6,442			52,873			39,227			9,684			1,096			3,886			1,064			114,272
Allowance for credit losses - loan commitments		5,111			—			—			444			17			—			—			5,572
Total ending allowance for credit losses - loans and loan commitments	$	11,553		$	52,873		$	39,227		$	10,128		$	1,113		$	3,886		$	1,064		$	119,844

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

	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
March 31, 2021
Allowance for credit losses:
Loans individually-evaluated	$	503	$	4,035	$	1,501	$	—	$	—	$	—	$	—	$	6,039
Loans collectively-evaluated		6,837		95,706		31,783		13,438		998		4,532		707		154,001
Loan commitments		4,000		208		1,583		869		50		21		—		6,731
Total allowance for credit losses - loans and commitments	$	11,340	$	99,949	$	34,867	$	14,307	$	1,048	$	4,553	$	707	$	166,771

Portfolio loans:
Individually-evaluated for credit losses⁽¹⁾	$	1,125	$	40,158	$	1,838	$	—	$	—	$	—	$	—	$	43,121
Collectively-evaluated for credit losses		640,892		5,030,567		2,420,897		1,644,422		634,018		289,395		—		10,660,191
Total portfolio loans	$	642,017	$	5,070,725	$	2,422,735	$	1,644,422	$	634,018	$	289,395	$	—	$	10,703,312

December 31, 2020
Allowance for credit losses:
Loans individually-evaluated	$	602	$	4,196	$	1,484	$	—	$	—	$	—	$	—	$	6,282
Loans collectively-evaluated		10,239		106,456		36,366		17,851		1,487		6,507		639		179,545
Loan commitments		6,508		712		1,275		955		45		19		—		9,514
Total allowance for credit losses - loans and commitments	$	17,349	$	111,364	$	39,125	$	18,806	$	1,532	$	6,526	$	639	$	195,341

Portfolio loans:
Individually-evaluated for credit losses⁽¹⁾	$	1,455	$	40,372	$	2,863	$	—	$	—	$	—	$	—	$	44,690
Collectively-evaluated for credit losses		666,822		4,996,743		2,404,575		1,720,961		646,387		309,055		—		10,744,543
Total portfolio loans	$	668,277	$	5,037,115	$	2,407,438	$	1,720,961	$	646,387	$	309,055	$	—	$	10,789,233

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

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 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.

The following tables summarize commercial loans by their assigned risk grade:

	Commercial Loans by Internally Assigned Risk Grade
(unaudited, in thousands)	Commercial Real Estate- Land and Construction		Commercial Real Estate- Improved Property		Commercial & Industrial		Total Commercial Loans
As of March 31, 2021
Pass	$	634,835	$	4,679,257	$	2,365,558	$	7,679,650
Criticized - compromised		5,360		297,801		37,782		340,943
Classified - substandard		1,822		93,667		19,395		114,884
Classified - doubtful		—		—		—		—
Total	$	642,017	$	5,070,725	$	2,422,735	$	8,135,477

As of December 31, 2020
Pass	$	657,435	$	4,609,726	$	2,350,724	$	7,617,885
Criticized - compromised		7,397		320,301		34,597		362,295
Classified - substandard		3,445		107,088		22,117		132,650
Classified - doubtful		—		—		—		—
Total	$	668,277	$	5,037,115	$	2,407,438	$	8,112,830

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

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

	Age Analysis of Loans
(unaudited, in thousands)	Current		30-59 Days Past Due		60-89 Days Past Due		90 Days or More Past Due		Total Past Due		Total Loans		90 Days or More Past Due and Accruing (1)
As of March 31, 2021
Commercial real estate:
Land and construction	$	639,378	$	1,120	$	759	$	760	$	2,639	$	642,017	$	641
Improved property		5,055,419		4,041		1,984		9,281		15,306		5,070,725		1,955
Total commercial real estate		5,694,797		5,161		2,743		10,041		17,945		5,712,742		2,596
Commercial and industrial		2,408,663		4,823		2,657		6,592		14,072		2,422,735		5,314
Residential real estate		1,625,328		2,713		1,589		14,792		19,094		1,644,422		4,007
Home equity		628,773		1,213		197		3,835		5,245		634,018		784
Consumer		287,395		1,428		340		232		2,000		289,395		123
Total portfolio loans		10,644,956		15,338		7,526		35,492		58,356		10,703,312		12,824
Loans held for sale		153,520		—		—		—		—		153,520		—
Total loans	$	10,798,476	$	15,338	$	7,526	$	35,492	$	58,356	$	10,856,832	$	12,824

Nonperforming loans included above are as follows:
Non-accrual loans	$	9,960	$	940	$	1,100	$	22,575	$	24,615	$	34,575
TDRs accruing interest ⁽¹⁾		3,248		63		159		93		315		3,563
Total nonperforming loans	$	13,208	$	1,003	$	1,259	$	22,668	$	24,930	$	38,138

As of December 31, 2020
Commercial real estate:
Land and construction	$	664,990	$	582	$	2,276	$	429	$	3,287	$	668,277	$	288
Improved property		5,016,812		4,876		4,118		11,309		20,303		5,037,115		2,713
Total commercial real estate		5,681,802		5,458		6,394		11,738		23,590		5,705,392		3,001
Commercial and industrial		2,395,844		4,372		2,197		5,025		11,594		2,407,438		1,899
Residential real estate		1,698,636		2,614		5,654		14,057		22,325		1,720,961		2,863
Home equity		639,319		2,414		775		3,879		7,068		646,387		706
Consumer		305,483		1,998		1,031		543		3,572		309,055		377
Total portfolio loans		10,721,084		16,856		16,051		35,242		68,149		10,789,233		8,846
Loans held for sale		168,378		—		—		—		—		168,378		—
Total loans	$	10,889,462	$	16,856	$	16,051	$	35,242	$	68,149	$	10,957,611	$	8,846

Nonperforming loans included above are as follows:
Non-accrual loans	$	9,560	$	630	$	466	$	26,224	$	27,320	$	36,880
TDRs accruing interest ⁽¹⁾		3,540		63		152		172		387		3,927
Total nonperforming loans	$	13,100	$	693	$	618	$	26,396	$	27,707	$	40,807

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

The following tables summarize nonperforming loans:

	Nonperforming Loans
	March 31, 2021						December 31, 2020
	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	$	138	$	120	$	—	$	469	$	469	$	—
Improved property		8,719		7,349		—		9,597		8,055	—
Commercial and industrial		1,860		1,675		—		4,401		3,413	—
Residential real estate		23,605		20,990		—		23,055		20,704	—
Home equity		6,518		5,569		—		6,635		5,708	—
Consumer		593		351		—		602		364	—
Total nonperforming loans without a specific allowance		41,433		36,054		—		44,759		38,713		—
With a specific allowance recorded:
Commercial real estate:
Land and construction		—		—		—	—		—		—
Improved property		2,094		2,084		175		2,094		2,094		136
Commercial and industrial		—		—		—	—		—		—
Residential real estate		—		—		—	—		—		—
Home equity		—		—		—	—		—		—
Consumer		—		—		—	—		—		—
Total nonperforming loans with a specific allowance		2,094		2,084		175		2,094		2,094		136
Total nonperforming loans	$	43,527	$	38,138	$	175	$	46,853	$	40,807	$	136

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

	Nonperforming Loans
	For the Three Months Ended
	March 31, 2021				March 31, 2020
	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	$	295	$	—	$	393	$	—
Improved property		7,702		9		5,501		20
Commercial and industrial		2,544		1		8,570		3
Residential real estate		20,847		39		18,470		55
Home equity		5,639		6		5,811		6
Consumer		358		—		390		1
Total nonperforming loans without a specific allowance		37,385		55		39,135		85
With a specific allowance recorded:
Commercial real estate:
Land and construction		—		—		—		—
Improved property		2,089		—		3,270		—
Commercial and industrial		—		—		96		—
Residential real estate		—		—		2,196		—
Home equity		—		—		352		—
Consumer		—		—		27		—
Total nonperforming loans with a specific allowance		2,089		—		5,941		—
Total nonperforming loans	$	39,474	$	55	$	45,076	$	85

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

	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

⁽¹⁾	At March 31, 2021 and December 31, 2020, there was 1 borrower with a loan balance greater than $1.0 million totaling $2.1 million. Total non-accrual loans include loans that are also restructured. Such loans are also set forth in the following table as non-accrual TDRs.

	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

As of March 31, 2021 and December 31, 2020, there were 0 TDRs greater than $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. Wesbanco had unfunded commitments to debtors whose loans were classified as nonperforming of $0.9 million as of March 31, 2021 and December 31, 2020.

The following tables present details related to loans identified as TDRs during the three months ended March 31, 2021 and 2020, respectively:

	New TDRs (1)
	For the Three Months Ended
	March 31, 2021						March 31, 2020
			Pre-		Post-				Pre-		Post-
			Modification		Modification				Modification		Modification
			Outstanding		Outstanding				Outstanding		Outstanding
	Number of		Recorded		Recorded		Number of		Recorded		Recorded
(unaudited, dollars in thousands)	Modifications		Investment		Investment		Modifications		Investment		Investment
Commercial real estate:
Land and construction		—	$	—	$	—		—	$	—	$	—
Improved Property		—		—		—		—		—		—
Total commercial real estate		—		—		—		—		—		—
Commercial and industrial		—		—		—		—		—		—
Residential real estate		—		—		—		2		332		330
Home equity		—		—		—		—		—		—
Consumer		—		—		—		—		—		—
Total		—	$	—	$	—		2	$	332	$	330

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

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

	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

⁽¹⁾	Excludes loans that were either charged-off or cured by period end. The recorded investment is as of March 31, 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 billion, of which $0.2 billion remain in their deferral period as of March 31, 2021. 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 / 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
	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	$	30,840	$	164,939	$	296,600	$	49,749	$	27,064	$	43,143	$	22,500	$	—	$	634,835
Criticized - compromised		—		875		—		39		228		3,618		600		—		5,360
Classified - substandard		—		—		—		74		40		1,708		—		—		1,822
Classified - doubtful		—		—		—		—		—		—		—		—		—
Total	$	30,840	$	165,814	$	296,600	$	49,862	$	27,332	$	48,469	$	23,100	$	—	$	642,017

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
Criticized - compromised		—		1,892		53,807		17,473		53,576		150,704		20,349		—		297,801
Classified - substandard		—		222		28,603		1,860		7,171		55,811		—		—		93,667
Classified - doubtful		—		—		—		—		—		—		—		—		—
Total	$	156,789	$	789,410	$	772,808	$	659,248	$	533,548	$	2,071,424	$	87,498	$	—	$	5,070,725

Commercial and industrial
Risk rating:
Pass	$	401,323	$	685,632	$	232,322	$	185,484	$	135,856	$	320,788	$	404,023	$	130	$	2,365,558
Criticized - compromised		26		3,290		2,746		4,236		2,651		10,841		13,992		—		37,782
Classified - substandard		985		—		2,518		1,668		3,567		5,179		5,478		—		19,395
Classified - doubtful		—		—		—		—		—		—		—		—		—
Total	$	402,334	$	688,922	$	237,586	$	191,388	$	142,074	$	336,808	$	423,493	$	130	$	2,422,735

Residential real estate
Loan delinquency:
Current	$	66,997	$	392,577	$	209,234	$	130,435	$	94,237	$	731,848	$	—	$	—	$	1,625,328
30-59 days past due		—		—		—		79		—		2,634		—		—		2,713
60-89 days past due		—		—		—		272		113		1,204		—		—		1,589
90 days or more past due		—		—		379		784		761		12,868		—		—		14,792
Total	$	66,997	$	392,577	$	209,613	$	131,570	$	95,111	$	748,554	$	—	$	—	$	1,644,422

Home equity
Loan delinquency:
Current	$	4,724	$	15,055	$	3,290	$	2,959	$	857	$	16,995	$	573,653	$	11,240	$	628,773
30-59 days past due		—		—		—		—		—		400		783		30		1,213
60-89 days past due		—		—		—		—		—		121		76		—		197
90 days or more past due		—		—		—		19		150		1,565		1,355		746		3,835
Total	$	4,724	$	15,055	$	3,290	$	2,978	$	1,007	$	19,081	$	575,867	$	12,016	$	634,018

Consumer
Loan delinquency:
Current	$	18,121	$	65,802	$	79,045	$	33,586	$	18,773	$	51,313	$	20,589	$	166	$	287,395
30-59 days past due		37		444		413		68		114		352		—		—		1,428
60-89 days past due		—		45		50		31		64		148		2		—		340
90 days or more past due		—		8		—		54		29		125		16		—		232
Total	$	18,158	$	66,299	$	79,508	$	33,739	$	18,980	$	51,938	$	20,607	$	166	$	289,395

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

Residential real estate included in other real estate owned was $0.1 million at March 31, 2021 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 million and $4.1 million, respectively.

NOTE 5. DERIVATIVES AND HEDGING ACTIVITIES

Risk Management Objective of Using Derivatives

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

Loan Swaps

Wesbanco executes interest rate swaps with commercial banking customers to facilitate their respective risk management strategies. Those interest rate swaps are simultaneously hedged by offsetting interest rate swaps that Wesbanco executes with a third party, such 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 and December 31, 2020, Wesbanco had 122 and 112, respectively, customer interest rate swaps with an aggregate notional amount of $711.0 million and $649.9 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 for the three months ended March 31, 2021 and 2020, respectively.

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 by the lead bank in a loan syndication. As of March 31, 2021 and December 31, 2020, Wesbanco had 13 and 12, respectively, risk participation-in agreements with an aggregate notional amount of $119.2 million and $101.1 million, respectively. As of March 31, 2021 and December 31, 2020, Wesbanco had 1 risk participation-out agreement with an aggregate notional amount of $10.0 million.

Mortgage Loans Held for Sale and Loan Commitments

Certain residential mortgage loans are originated for sale in the secondary mortgage loan market. These loans are classified as held for sale and carried at fair value as Wesbanco has elected the fair value option. Fair value is determined based on rates obtained from the secondary market for loans with similar characteristics. Wesbanco sells loans to the secondary market on 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 million and $183.5 million at March 31, 2021 and December 31, 2020, 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 a lower premium on sale.

Fair Values of Derivative Instruments on the Balance Sheet

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

The table below presents the fair value of Wesbanco’s derivative financial instruments as well as their classification on the Balance Sheet as of March 31, 2021 and December 31, 2020:

	March 31, 2021						December 31, 2020
(unaudited, in thousands)	Notional or Contractual Amount		Asset Derivatives		Liability Derivatives		Notional or Contractual Amount		Asset Derivatives		Liability Derivatives
Derivatives
Loan Swaps:
Interest rate swaps	$	710,986	$	31,732	$	32,470	$	649,857	$	46,418	$	49,917
Other contracts:
Interest rate loan commitments		85,435		—		314		112,119		702		—
Forward TBA contracts		197,000		1,515		—		183,500	—			1,161
Total derivatives			$	33,247	$	32,784			$	47,120	$	51,078

Effect of Derivative Instruments on the Income Statement

The table below presents the change in the fair value of the Company’s derivative financial instruments reflected within non-interest income on the consolidated income statement for the three months ended March 31, 2021 and 2020, respectively.

		For the Three Months Ended March 31,
(unaudited, in thousands)	Location of Gain/(Loss)	2021			2020
Interest rate swaps	Other income	$	2,761		$	(2,751	)
Interest rate loan commitments	Mortgage banking income		(1,016	)		(145	)
Forward TBA contracts	Mortgage banking income		4,518			(2,657	)
Total		$	6,263		$	(5,553	)

Credit-risk-related Contingent Features

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 million as of March 31, 2021. If Wesbanco had breached any of these provisions at March 31, 2021, it could have been required to settle its obligations under the agreements at the termination value and would have been required to pay any additional amounts due in excess of amounts previously posted as collateral with the respective counterparty.

NOTE 6. BENEFIT PLANS

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

	For the Three Months Ended March 31,
(unaudited, in thousands)	2021			2020
Service cost – benefits earned during year	$	616		$	568
Interest cost on projected benefit obligation		842			1,121
Expected return on plan assets		(2,763	)		(2,594	)
Amortization of prior service cost		(8	)		(9	)
Amortization of net loss		675			793
Net periodic pension income	$	(638	)	$	(121	)

The service cost of $0.6 million for both the three months ended March 31, 2021 and 2020 is included in salaries and wages, and the periodic pension income of $1.3 million and $0.7 million for the three months ended March 31, 2021 and 2020, respectively, is included in employee benefits.

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

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

NOTE 7. FAIR VALUE MEASUREMENT

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

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

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

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

Loans held for sale: Loans held for sale are carried, in aggregate, at fair value as Wesbanco 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 CECL. Since these 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 and December 31, 2020:

			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 or for the year ended December 31, 2020.

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, 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.

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

					Fair Value Measurements at
					March 31, 2021
	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)
Financial Assets
Cash and due from banks	$	759,048	$	759,048	$	759,048	$	—	$	—
Equity securities		13,123		13,123		13,123		—		—
Available-for-sale debt securities		2,775,212		2,775,212		—		2,773,701		1,511
Held-to-maturity debt securities		813,450		839,872		—		839,411		461
Net loans		10,543,272		10,540,445		—		—		10,540,445
Loans held for sale		153,520		153,520		—		153,520		—
Other assets - interest rate derivatives		31,732		31,732		—		31,732		—
Accrued interest receivable		68,896		68,896		68,896		—		—

Financial Liabilities
Deposits		13,286,999		13,300,728		11,731,925		1,568,803		—
Federal Home Loan Bank borrowings		433,984		438,211		—		438,211		—
Other borrowings		137,218		125,925		125,925		—		—
Subordinated debt and junior subordinated debt		192,430		172,142		—		105,371		66,771
Other liabilities - interest rate derivatives		32,470		32,470		—		32,470		—
Accrued interest payable		3,224		3,224		3,224		—		—

					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	</

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Wesbanco (WSBC) 10-Q2021 Q1 Quarterly report

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