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Securities
 6 Months Ended
Jun. 30, 2024
Investments, Debt and Equity Securities [Abstract]  
Securities

NOTE 3. SECURITIES

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

 

 

 

June 30, 2024

 

 

December 31, 2023

 

(unaudited, in thousands)

 

Amortized
Cost

 

 

Gross
Unrealized
Gains

 

 

Gross
Unrealized
Losses

 

 

Fair
Value

 

 

Amortized
Cost

 

 

Gross
Unrealized
Gains

 

 

Gross
Unrealized
Losses

 

 

Fair
Value

 

Available-for-sale debt securities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. Treasury

 

$

49,099

 

 

$

4

 

 

$

—

 

 

 

49,103

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

U.S. Government sponsored entities and agencies

 

 

231,912

 

 

 

—

 

 

 

(32,654

)

 

 

199,258

 

 

 

238,676

 

 

 

—

 

 

 

(30,310

)

 

 

208,366

 

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

 

 

1,791,043

 

 

 

51

 

 

 

(277,066

)

 

 

1,514,028

 

 

 

1,897,511

 

 

 

47

 

 

 

(267,874

)

 

 

1,629,684

 

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

 

 

261,150

 

 

 

40

 

 

 

(5,000

)

 

 

256,190

 

 

 

274,220

 

 

 

11

 

 

 

(5,924

)

 

 

268,307

 

Obligations of states and political subdivisions

 

 

75,609

 

 

 

6

 

 

 

(3,859

)

 

 

71,756

 

 

 

78,819

 

 

 

167

 

 

 

(2,861

)

 

 

76,125

 

Corporate debt securities

 

 

11,968

 

 

 

—

 

 

 

(180

)

 

 

11,788

 

 

 

11,962

 

 

 

—

 

 

 

(115

)

 

 

11,847

 

Total available-for-sale debt securities

 

$

2,420,781

 

 

$

101

 

 

$

(318,759

)

 

$

2,102,123

 

 

$

2,501,188

 

 

$

225

 

 

$

(307,084

)

 

$

2,194,329

 

Held-to-maturity debt securities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. Government sponsored entities and agencies

 

$

3,300

 

 

$

—

 

 

$

(321

)

 

$

2,979

 

 

$

3,587

 

 

$

—

 

 

$

(313

)

 

$

3,274

 

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

 

 

35,776

 

 

 

—

 

 

 

(3,150

)

 

 

32,626

 

 

 

38,893

 

 

 

—

 

 

 

(3,017

)

 

 

35,876

 

Obligations of states and political subdivisions

 

 

1,122,395

 

 

 

105

 

 

 

(147,546

)

 

 

974,954

 

 

 

1,136,779

 

 

 

852

 

 

 

(127,518

)

 

 

1,010,113

 

Corporate debt securities

 

 

18,213

 

 

 

—

 

 

 

(340

)

 

 

17,873

 

 

 

20,268

 

 

 

—

 

 

 

(372

)

 

 

19,896

 

Total held-to-maturity debt securities (1)

 

$

1,179,684

 

 

$

105

 

 

$

(151,357

)

 

$

1,028,432

 

 

$

1,199,527

 

 

$

852

 

 

$

(131,220

)

 

$

1,069,159

 

Total debt securities

 

$

3,600,465

 

 

$

206

 

 

$

(470,116

)

 

$

3,130,555

 

 

$

3,700,715

 

 

$

1,077

 

 

$

(438,304

)

 

$

3,263,488

 
(1)
Total held-to-maturity debt securities are presented on the balance sheet net of their allowance for credit losses totaling $0.2 million at June 30, 2024 and December 31, 2023.

At June 30, 2024 and December 31, 2023, there were no holdings of any one issuer, other than U.S. government sponsored entities and its agencies, in an amount greater than 10% of Wesbanco’s shareholders’ equity. Equity securities, of which $10.6 million and $9.7 million at June 30, 2024 and December 31, 2023, respectively, 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 $12.3 million at June 30, 2024 and December 31, 2023, 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 June 30, 2024. 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

 

 

 

 

 

 

Within one year

 

$

75,322

 

 

$

75,127

 

After 1 year through 5 years

 

 

170,101

 

 

 

165,339

 

After 5 years through 10 years

 

 

295,411

 

 

 

278,986

 

After 10 years

 

 

1,879,947

 

 

 

1,582,671

 

Total available-for-sale debt securities

 

$

2,420,781

 

 

$

2,102,123

 

Held-to-maturity debt securities

 

 

 

 

 

 

Within one year

 

$

22,438

 

 

$

22,325

 

After 1 year through 5 years

 

 

114,612

 

 

 

112,057

 

After 5 years through 10 years

 

 

501,534

 

 

 

453,682

 

After 10 years

 

 

541,100

 

 

 

440,368

 

Total held-to-maturity debt securities

 

$

1,179,684

 

 

$

1,028,432

 

Total debt securities

 

$

3,600,465

 

 

$

3,130,555

 

 

Securities with an aggregate carrying value of $2.0 billion and $2.1 billion at June 30, 2024 and December 31, 2023, 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 for the six months ended June 30, 2023 totaled $28.3 million. There were no security sales that occurred in the six months ended June 30, 2024. Net unrealized losses on available-for-sale securities included in accumulated other comprehensive income, net of tax, as of June 30, 2024 and December 31, 2023 were $241.6 million and $233.2 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 and six months ended June 30, 2024 and 2023, respectively. All gains and losses presented in the table below are included in the net securities gains (losses) line item of the consolidated 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 June 30,

 

 

For the Six Months
Ended June 30,

 

(unaudited, in thousands)

 

2024

 

 

2023

 

 

2024

 

 

2023

 

Debt securities:

 

 

 

 

 

 

 

 

 

 

 

 

Gross realized gains

 

$

—

 

 

$

2

 

 

$

—

 

 

$

65

 

Gross realized losses

 

 

(12

)

 

 

(9

)

 

 

(12

)

 

 

(206

)

Net losses on debt securities

 

 

(12

)

 

 

(7

)

 

 

(12

)

 

 

(141

)

Equity securities:

 

 

 

 

 

 

 

 

 

 

 

 

Net unrealized gains recognized on securities still held

 

 

147

 

 

 

212

 

 

 

684

 

 

 

491

 

Net securities gains

 

$

135

 

 

$

205

 

 

$

672

 

 

$

350

 

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 consolidated income statement in the provision for credit losses. Accrued interest receivable on held-to-maturity securities, which was $8.6 million and $8.8 million as of June 30, 2024 and December 31, 2023, 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 zero, and will monitor this assumption in the future for any 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 six months ended June 30, 2024 and 2023:

 

 

Allowance for Credit Losses By Category

 

 

For the Six Months Ended June 30, 2024 and 2023

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Obligations of

 

 

 

 

 

 

states and

 

Corporate

 

 

 

 

political

 

debt

 

 

(unaudited, in thousands)

subdivisions

 

Securities

 

Total

 

Balance at December 31, 2023

$

160

 

$

32

 

$

192

 

Current period provision (1)

 

(12

)

 

(17

)

 

(29

)

Write-offs

 

—

 

 

—

 

 

—

 

Recoveries

 

—

 

 

—

 

 

—

 

Balance at June 30, 2024

$

148

 

$

15

 

$

163

 

.

 

 

 

 

 

 

Balance at December 31, 2022

$

167

 

$

53

 

$

220

 

Current period provision (1)

 

(12

)

 

(15

)

 

(27

)

Write-offs

 

—

 

 

—

 

 

—

 

Recoveries

 

—

 

 

—

 

 

—

 

Balance at June 30, 2023

$

155

 

$

38

 

$

193

 

(1) The total provision for credit losses on held-to-maturity securities is reported in the consolidated statements of income in the provision for credit losses line item, which also includes the provision for credit losses - loans and loan commitments. For more information on the provision relating to loans and loan commitments, please see Note 4, "Loans and the Allowance for Credit Losses."

 

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 June 30, 2024 and December 31, 2023, respectively:

 

 

 

June 30, 2024

 

 

 

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

 

$

—

 

 

$

—

 

 

 

—

 

 

$

199,258

 

 

$

(32,654

)

 

 

45

 

 

$

199,258

 

 

$

(32,654

)

 

 

45

 

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

 

 

—

 

 

 

—

 

 

 

—

 

 

 

1,510,101

 

 

 

(277,066

)

 

 

463

 

 

 

1,510,101

 

 

 

(277,066

)

 

 

463

 

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

 

 

—

 

 

 

—

 

 

 

—

 

 

 

239,948

 

 

 

(5,000

)

 

 

59

 

 

 

239,948

 

 

 

(5,000

)

 

 

59

 

Obligations of states and political subdivisions

 

 

11,336

 

 

 

(190

)

 

 

13

 

 

 

57,038

 

 

 

(3,669

)

 

 

96

 

 

 

68,374

 

 

 

(3,859

)

 

 

109

 

Corporate debt securities

 

 

4,481

 

 

 

(19

)

 

 

4

 

 

 

7,307

 

 

 

(161

)

 

 

2

 

 

 

11,788

 

 

 

(180

)

 

 

6

 

Total

 

$

15,817

 

 

$

(209

)

 

 

17

 

 

$

2,013,652

 

 

$

(318,550

)

 

 

665

 

 

$

2,029,469

 

 

$

(318,759

)

 

 

682

 

 

 

 

December 31, 2023

 

 

 

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

 

 

$

(1

)

 

 

1

 

 

$

208,348

 

 

$

(30,309

)

 

 

45

 

 

$

208,366

 

 

$

(30,310

)

 

 

46

 

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

 

 

—

 

 

 

—

 

 

 

—

 

 

 

1,625,144

 

 

 

(267,874

)

 

 

467

 

 

 

1,625,144

 

 

 

(267,874

)

 

 

467

 

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

 

 

5,520

 

 

 

(31

)

 

 

1

 

 

 

251,765

 

 

 

(5,893

)

 

 

60

 

 

 

257,285

 

 

 

(5,924

)

 

 

61

 

Obligations of states and political subdivisions

 

 

10,387

 

 

 

(86

)

 

 

19

 

 

 

49,002

 

 

 

(2,775

)

 

 

79

 

 

 

59,389

 

 

 

(2,861

)

 

 

98

 

Corporate debt securities

 

 

4,482

 

 

 

(18

)

 

 

3

 

 

 

7,365

 

 

 

(97

)

 

 

3

 

 

 

11,847

 

 

 

(115

)

 

 

6

 

Total

 

$

20,407

 

 

$

(136

)

 

 

24

 

 

$

2,141,624

 

 

$

(306,948

)

 

 

654

 

 

$

2,162,031

 

 

$

(307,084

)

 

 

678

 

Unrealized losses on debt securities in the table above 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 stock totaling $67.2 million and $62.0 million at June 30, 2024 and December 31, 2023, 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.