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.