NOTE 3. SECURITIES

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


	September 30, 2013									December 31, 2012
*(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
Obligations of government agencies	$	71,893	$	20	$	(1,256	)	$	70,657	$	96,257	$	411	$	(56	)	$	96,612
Residential mortgage-backed securities and collateralized mortgage obligations of government agencies		686,216		4,226		(9,431	)		681,011		721,824		10,690		(304	)		732,210
Obligations of state and political subdivisions		123,423		5,069		(260	)		128,232		139,511		9,133		(9	)		148,635
Corporate debt securities		41,819		135		(372	)		41,582		32,706		213		(234	)		32,685

Total debt securities	$	923,351	$	9,450	$	(11,319	)	$	921,482	$	990,298	$	20,447	$	(603	)	$	1,010,142
Equity securities		10,244		1,729		—			11,973		10,207		916		(21	)		11,102

Total available-for-sale securities	$	933,595	$	11,179	$	(11,319	)	$	933,455	$	1,000,505	$	21,363	$	(624	)	$	1,021,244

Held-to-maturity
Residential mortgage-backed securities and collateralized mortgage obligations of government agencies	$	105,907	$	3,521	$	(744	)	$	108,684	$	152,872	$	6,421	$	(80	)	$	159,213
Other residential collateralized mortgage obligations		—		—		—			—		353		8		—			361
Obligations of state and political subdivisions		493,968		13,872		(11,854	)		495,986		449,284		31,244		(829	)		479,699
Corporate debt securities		2,713		—		(168	)		2,545		—		—		—			—

Total held-to-maturity securities	$	602,588	$	17,393	$	(12,766	)	$	607,215	$	602,509	$	37,673	$	(909	)	$	639,273

Total securities	$	1,536,183	$	28,572	$	(24,085	)	$	1,540,670	$	1,603,014	$	59,036	$	(1,533	)	$	1,660,517

At September 30, 2013, and December 31, 2012, there were no holdings of any one issuer, other than the U.S. government and its agencies, in an amount greater than 10% of WesBanco’s shareholders’ equity.

The following table presents the fair value of available-for-sale and held-to-maturity securities by contractual maturity at September 30, 2013. In some instances, the issuers may have the right to call or prepay obligations without penalty prior to the contractual maturity date.

September 30, 2013

(unaudited, in thousands)

One Year
or less

One to
Five Years

Five to
Ten Years

After
Ten Years

Mortgage-backed
and Equity

Total

Available-for-sale

Obligations of government agencies

—

17,776

39,269

13,612

—

70,657

Residential mortgage-backed securities and collateralized mortgage obligations of government agencies ⁽¹⁾

—

681,011

Obligations of states and political subdivisions

8,388

45,121

26,389

48,334

—

128,232

Corporate debt securities

5,075

16,198

15,553

4,756

—

41,582

Equity securities ⁽²⁾

—

11,973

Total available-for-sale securities

13,463

79,095

81,211

66,702

692,984

933,455

Held-to-maturity ⁽³⁾

Residential mortgage-backed securities and collateralized mortgage obligations of
obligations ⁽¹⁾

—

108,684

Obligations of states and political subdivisions

3,860

9,407

125,581

357,138

—

495,986

Corporate debt securities

—

2,545

—

2,545

Total held-to-maturity securities

3,860

9,407

128,126

357,138

108,684

607,215

Total securities

17,323

88,502

209,337

423,840

801,668

1,540,670

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

⁽²⁾	Equity securities, which have no stated maturity, are not assigned a maturity category.

⁽³⁾	The held-to-maturity portfolio is carried at an amortized cost of $602.6 million.

Securities with aggregate par values of $703.2 million and $710.5 million at September 30, 2013 and December 31, 2012, 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 $9.3 million and $48.1 million for the nine months ended September 30, 2013 and 2012, respectively. Net unrealized (losses) gains on available-for-sale securities included in accumulated other comprehensive income, net of tax, as of September 30, 2013 and December 31, 2012 were ($0.1) million and $13.0 million, respectively. Gross security gains of $0.3 million and $1.4 million on available-for-sale securities were realized for the nine months ended September 30, 2013 and 2012, respectively, while gross security losses of $0.2 million were realized for the nine months ended September 30, 2013 primarily due to the write-down of two equity securities. Additionally, gross security gains of $0.6 million and $0.3 million on held-to-maturity securities were realized for the nine months ended September 30, 2013 and 2012, respectively.

The following tables provide information on unrealized losses on investment securities that have been in an unrealized loss position for less than twelve months and twelve months or more as of September 30, 2013 and December 31, 2012:


	September 30, 2013
	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
Obligations of government agencies	$	54,318	$	(1,223	)		11	$	4,549	$	(33	)		1	$	58,867	$	(1,256	)		12

Residential mortgage-backed securities and collateralized mortgage obligations of government agencies		403,983		(10,107	)		72		4,515		(68	)		6		408,498		(10,175	)		78
Obligations of states and political subdivisions		187,215		(11,388	)		299		12,103		(726	)		13		199,318		(12,114	)		312
Corporate debt securities		19,943		(452	)		7		2,912		(88	)		1		22,855		(540	)		8

Total temporarily impaired securities	$	665,459	$	(23,170	)		389	$	24,079	$	(915	)		21	$	689,538	$	(24,085	)		410


	December 31, 2012
	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
Obligations of government agencies	$	18,894	$	(56	)		6	$	—	$	—			—	$	18,894	$	(56	)		6

Residential mortgage-backed securities and collateralized mortgage obligations of government agencies		38,913		(258	)		20		9,966		(126	)		10		48,879		(384	)		30
Obligations of states and political subdivisions		72,521		(838	)		107		—		—			—		72,521		(838	)		107
Corporate debt securities		1,526		(57	)		2		10,878		(177	)		5		12,404		(234	)		7
Equity securities		2,838		(21	)		2		—		—			—		2,838		(21	)		2

Total temporarily impaired securities	$	134,692	$	(1,230	)		137	$	20,844	$	(303	)		15	$	155,536	$	(1,533	)		152

Unrealized losses on debt securities in the table 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 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 of investment grade quality and all are paying principal and interest according to their contractual terms. WesBanco does not intend to sell, nor is it more likely than not that it will be required to sell, loss position securities prior to recovery of their cost, and therefore, management believes the unrealized losses detailed above are temporary and no impairment loss relating to these securities has been recognized.

Securities that do not have readily determinable fair values and for which WesBanco does not exercise significant influence are carried at cost. Cost method investments consist primarily of Federal Home Loan Bank (“FHLB”) of Pittsburgh and FHLB of Cincinnati stock totaling $12.0 million and $21.3 million at September 30, 2013 and December 31, 2012, 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.