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Loans and the Allowance for Credit Losses
6 Months Ended
Jun. 30, 2016
Receivables [Abstract]  
Loans and the Allowance for Credit Losses

NOTE 5. 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 of $0.6 million and $1.0 million at June 30, 2016 and December 31, 2015, respectively and discounts on purchased loans from prior transactions of $14.4 million and $15.7 million at June 30, 2016 and December 31, 2015, respectively.

 

(unaudited, in thousands)

   June 30,
2016
     December 31,
2015
 
Commercial real estate:              

Land and construction

   $ 432,663       $ 344,748   

Improved property

     1,850,535         1,911,633   
  

 

 

    

 

 

 

Total commercial real estate

     2,283,198         2,256,381   
  

 

 

    

 

 

 

Commercial and industrial

     814,055         737,878   

Residential real estate

     1,242,015         1,247,800   

Home equity

     435,187         416,889   

Consumer

     395,377         406,894   
  

 

 

    

 

 

 

Total portfolio loans

     5,169,832         5,065,842   
  

 

 

    

 

 

 

Loans held for sale

     9,974         7,899   
  

 

 

    

 

 

 

Total loans

   $ 5,179,806       $ 5,073,741   
  

 

 

    

 

 

 

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 Six Months Ended June 30, 2016 and 2015
 

(unaudited, in thousands)

   Commercial
Real Estate-
Land and
Construction
    Commercial
Real Estate-
Improved
Property
    Commercial
& Industrial
    Residential
Real Estate
    Home
Equity
    Consumer     Deposit
Overdraft
    Total  

Balance at December 31, 2015:

                

Allowance for loan losses

   $ 4,390      $ 14,748      $ 10,002      $ 4,582      $ 2,883      $ 4,763      $ 342      $ 41,710   

Allowance for loan commitments

     157        26        260        7        117        46        —          613   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total beginning allowance for credit losses

     4,547        14,774        10,262        4,589        3,000        4,809        342        42,323   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Provision for credit losses:

                

Provision for loan losses

     1,252        (559     1,999        (172     164        898        581        4,163   

Provision for loan commitments

     (10     (13     (16     1        10        —          —          (28
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total provision for credit losses

     1,242        (572     1,983        (171     174        898        581        4,135   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Charge-offs

     —          (1,328     (765     (386     (216     (2,089     (362     (5,146

Recoveries

     3        1,168        139        306        77        790        118        2,601   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net charge-offs

     3        (160     (626     (80     (139     (1,299     (244     (2,545
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Balance at June 30, 2016:

                

Allowance for loan losses

     5,645        14,029        11,375        4,330        2,908        4,362        679        43,328   

Allowance for loan commitments

     147        13        244        8        127        46        —          585   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total ending allowance for credit losses

   $ 5,792      $ 14,042      $ 11,619      $ 4,338      $ 3,035      $ 4,408      $ 679      $ 43,913   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Balance at December 31, 2014:

                

Allowance for loan losses

   $ 5,654      $ 17,573      $ 9,063      $ 5,382      $ 2,329      $ 4,078      $ 575      $ 44,654   

Allowance for loan commitments

     194        10        112        9        90        40        —          455   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total beginning allowance for credit losses

     5,848        17,583        9,175        5,391        2,419        4,118        575        45,109   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Provision for credit losses:

                

Provision for loan losses

     (551     633        1,448        25        1,254        580        231        3,620   

Provision for loan commitments

     13        10        301        3        23        —          —          350   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total provision for credit losses

     (538     643        1,749        28        1,277        580        231        3,970   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Charge-offs

     —          (1,234     (1,430     (944     (948     (1,414     (381     (6,351

Recoveries

     —          256        110        301        53        658        118        1,496   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net charge-offs

     —          (978     (1,320     (643     (895     (756     (263     (4,855
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Balance at June 30, 2015:

                

Allowance for loan losses

     5,103        17,228        9,191        4,764        2,688        3,902        543        43,419   

Allowance for loan commitments

     207        20        413        12        113        40        —          805   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total ending allowance for credit losses

   $ 5,310      $ 17,248      $ 9,604      $ 4,776      $ 2,801      $ 3,942      $ 543      $ 44,224   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

The following tables present the allowance for credit losses and recorded investments in loans by category:

 

    Allowance for Credit Losses and Recorded Investment in Loans  
    Commercial     Commercial                                      
    Real Estate-     Real Estate-     Commercial     Residential                          
    Land and     Improved     and     Real     Home                    

(unaudited, in thousands)

  Construction     Property     Industrial     Estate     Equity     Consumer     Over-draft     Total  

June 30, 2016

               

Allowance for credit losses:

               

Allowance for loans individually evaluated for impairment

  $ —        $ 504      $ 894      $ —        $ —        $ —        $ —        $ 1,398   

Allowance for loans collectively evaluated for impairment

    5,645        13,525        10,481        4,330        2,908        4,362        679        41,930   

Allowance for loan commitments

    147        13        244        8        127        46        —          585   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total allowance for credit losses

  $ 5,792      $ 14,042      $ 11,619      $ 4,338      $ 3,035      $ 4,408      $ 679      $ 43,913   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Portfolio loans:

               

Individually evaluated for impairment (1)

  $ —        $ 3,012      $ 4,049      $ —        $ —        $ —        $ —        $ 7,061   

Collectively evaluated for impairment

    432,663        1,840,005        810,006        1,242,015        435,187        395,377        —          5,155,253   

Acquired with deteriorated credit quality

    —          7,518        —          —          —          —          —          7,518   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total portfolio loans

  $ 432,663      $ 1,850,535      $ 814,055      $ 1,242,015      $ 435,187      $ 395,377      $ —        $ 5,169,832   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

December 31, 2015

               

Allowance for credit losses:

               

Allowance for loans individually evaluated for impairment

  $ —        $ 668      $ 853      $ —        $ —        $ —        $ —        $ 1,521   

Allowance for loans collectively evaluated for impairment

    4,390        14,080        9,149        4,582        2,883        4,763        342        40,189   

Allowance for loan commitments

    157        26        260        7        117        46        —          613   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total allowance for credit losses

  $ 4,547      $ 14,774      $ 10,262      $ 4,589      $ 3,000      $ 4,809      $ 342      $ 42,323   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Portfolio loans:

               

Individually evaluated for impairment (1)

  $ —        $ 4,031      $ 4,872      $ —        $ —        $ —        $ —        $ 8,903   

Collectively evaluated for impairment

    343,832        1,899,738        732,957        1,247,639        416,862        406,622        —          5,047,650   

Acquired with deteriorated credit quality

    916        7,864        49        161        27        272        —          9,289   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total portfolio loans

  $ 344,748      $ 1,911,633      $ 737,878      $ 1,247,800      $ 416,889      $ 406,894      $ —        $ 5,065,842   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

(1) Commercial loans greater than $1 million that are reported as non-accrual or as a troubled debt restructuring (“TDR”) are individually evaluated for impairment.

WesBanco maintains an internal loan grading system to reflect the credit quality of commercial loans. Commercial loan risk grades are determined based on an evaluation of the relevant characteristics of each loan, assigned at the inception of each loan 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 reliability and sustainability of the primary source of repayment and overall financial strength of the borrower. This includes an analysis of cash flow available to repay debt, profitability, liquidity, leverage, and overall financial trends. Other factors include management, industry or property type risks, an assessment of secondary sources of repayment such as collateral or guarantees, other terms and conditions of the loan that may increase or reduce its risk, and economic conditions and other external factors that may influence repayment capacity and financial condition.

        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 net rental income generated by the property to service the debt, the type, quality, industry and mix of tenants, and the terms of leases, but also considers the overall financial capacity of the investors and their experience in owning and managing investment property. The risk grade assigned to owner-occupied commercial real estate and commercial and industrial loans is based primarily on historical and projected earnings, the adequacy of operating cash flow to service all of the business’ debt, and the capital resources, liquidity and leverage of the business, but also considers the industry in which the business operates, the business’ specific competitive advantages or disadvantages, the quality and experience of management, and external influences on the business such as economic conditions. Other factors that are considered for commercial and industrial loans include the type, quality and marketability of non-real estate collateral and whether the structure of the loan increases or reduces its risk. The type, age, condition, location and any environmental risks associated with a property are also considered for all types of commercial real estate. The overall financial condition and repayment capacity of any guarantors is also evaluated to determine the extent to which they mitigate other risks of the loan. The following paragraphs provide descriptions of risk grades that are applicable to commercial real estate and commercial and industrial loans.

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 or compromised loans are currently protected but have weaknesses, which, if not corrected, may be inadequately protected at some future date. These loans represent an unwarranted credit risk and would generally not be extended in the normal course of lending. Specific issues which may warrant this grade include declining financial results, increased reliance on secondary sources of repayment or guarantor support and adverse external influences that may negatively impact the business or property.

 

Substandard and doubtful loans are equivalent to the classifications used by banking regulators. Substandard loans are inadequately protected by the current repayment capacity and equity of the borrower or collateral pledged, if any. Substandard loans have one or more well-defined weaknesses that jeopardize their repayment or collection in full. These loans may or may not be reported as non-accrual. Doubtful loans have all the weaknesses inherent to a substandard loan with the added characteristic that full repayment is highly questionable or improbable on the basis of currently existing facts, conditions and collateral values. However, recognition of loss may be deferred if there are reasonably specific pending factors that will reduce the risk if they occur.

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

 

     Commercial Loans by Internally Assigned Risk Grade  
     Commercial      Commercial                
     Real Estate-      Real Estate-             Total  
     Land and      Improved      Commercial      Commercial  

(unaudited, in thousands)

   Construction      Property      & Industrial      Loans  

As of June 30, 2016

           

Pass

   $ 425,647       $ 1,805,673       $ 786,601       $ 3,017,921   

Criticized - compromised

     5,007         11,998         9,538         26,543   

Classified - substandard

     2,009         32,864         17,916         52,789   

Classified - doubtful

     —           —           —           —     
  

 

 

    

 

 

    

 

 

    

 

 

 

Total

   $ 432,663       $ 1,850,535       $ 814,055       $ 3,097,253   
  

 

 

    

 

 

    

 

 

    

 

 

 

As of December 31, 2015

           

Pass

   $ 335,989       $ 1,864,986       $ 713,578       $ 2,914,553   

Criticized - compromised

     5,527         10,911         9,860         26,298   

Classified - substandard

     3,232         35,736         14,440         53,408   

Classified - doubtful

     —           —           —           —     
  

 

 

    

 

 

    

 

 

    

 

 

 

Total

   $ 344,748       $ 1,911,633       $ 737,878       $ 2,994,259   
  

 

 

    

 

 

    

 

 

    

 

 

 

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 were $16.4 million at June 30, 2016 and $15.8 million at December 31, 2015, of which $2.2 and $3.1 million were accruing, for each period, respectively. The aggregate amount of residential real estate, home equity and consumer loans classified as substandard are not included in the tables above.

Acquired Loans — Carrying amount of loans acquired with deteriorated credit quality at June 30, 2016 and December 31, 2015 were $7.5 million and $9.3 million, respectively, while the outstanding balance was $12.5 million and $15.0 million, respectively. At June 30, 2016 and December 31, 2015 no allowance for loan losses has been recognized related to the acquired impaired loans, as estimates of future cash flows on these loans have not been negatively impacted.

The following table provides changes in accretable yield for loans acquired with deteriorated credit quality:

 

     For the Six Months Ended  
         June 30,              June 30,      

(unaudited, in thousands)

   2016      2015  

Balance at beginning of period

   $ 1,206       $ —     

Acquisitions

     —           1,815   

Reclass from non-accretable difference

     1,064         —     

Transfers

     (328      —     

Accretion

     (266      (267
  

 

 

    

 

 

 

Balance at end of period

   $ 1,676       $ 1,548   
  

 

 

    

 

 

 

 

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

 

     Age Analysis of Loans  
                                               90 Days  
                          90 Days                    or More  
            30-59 Days      60-89 Days      or More      Total      Total      Past Due and  

(unaudited, in thousands)

   Current      Past Due      Past Due      Past Due      Past Due      Loans      Accruing (1)  

As of June 30, 2016

                    

Commercial real estate:

                    

Land and construction

   $ 432,241       $ —         $ —         $ 422       $ 422       $ 432,663       $ —     

Improved property

     1,840,665         1,616         592         7,662         9,870         1,850,535         —     
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total commercial real estate

     2,272,906         1,616         592         8,084         10,292         2,283,198         —     

Commercial and industrial

     811,320         251         743         1,741         2,735         814,055         56   

Residential real estate

     1,229,843         1,153         3,319         7,700         12,172         1,242,015         1,261   

Home equity

     431,147         1,276         373         2,391         4,040         435,187         378   

Consumer

     391,096         2,665         803         813         4,281         395,377         568   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total portfolio loans

     5,136,312         6,961         5,830         20,729         33,520         5,169,832         2,263   

Loans held for sale

     9,974         —           —           —           —           9,974         —     
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total loans

   $ 5,146,286       $ 6,961       $ 5,830       $ 20,729       $ 33,520       $ 5,179,806       $ 2,263   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Impaired loans included above are as follows:

                    

Non-accrual loans

   $ 12,374       $ 1,261       $ 763       $ 18,057       $ 20,081       $ 32,455      

TDRs accruing interest (1)

     8,195         204         171         409         784         8,979      
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

Total impaired

   $ 20,569       $ 1,465       $ 934       $ 18,466       $ 20,865       $ 41,434      
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

As of December 31, 2015

                    

Commercial real estate:

                    

Land and construction

   $ 344,184       $ —         $ —         $ 564       $ 564       $ 344,748       $ —     

Improved property

     1,901,466         909         1,097         8,161         10,167         1,911,633         —     
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total commercial real estate

     2,245,650         909         1,097         8,725         10,731         2,256,381         —     

Commercial and industrial

     734,660         298         714         2,206         3,218         737,878         33   

Residential real estate

     1,234,839         1,389         2,871         8,701         12,961         1,247,800         2,159   

Home equity

     412,450         2,252         314         1,873         4,439         416,889         407   

Consumer

     401,242         4,115         764         773         5,652         406,894         527   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total portfolio loans

     5,028,841         8,963         5,760         22,278         37,001         5,065,842         3,126   

Loans held for sale

     7,899         —           —           —           —           7,899         —     
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total loans

   $ 5,036,740       $ 8,963       $ 5,760       $ 22,278       $ 37,001       $ 5,073,741       $ 3,126   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Impaired loans included above are as follows:

                    

Non-accrual loans

   $ 11,349       $ 943       $ 2,147       $ 18,942       $ 22,032       $ 33,381      

TDRs accruing interest (1)

     10,710         390         238         210         838         11,548      
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

Total impaired

   $ 22,059       $ 1,333       $ 2,385       $ 19,152       $ 22,870       $ 44,929      
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

(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 impaired loans:

 

    Impaired Loans  
    June 30, 2016     December 31, 2015  

(unaudited, in thousands)

  Unpaid
Principal
Balance (1)
    Recorded
Investment
    Related
Allowance
    Unpaid
Principal
Balance (1)
    Recorded
Investment
    Related
Allowance
 

With no related specific allowance recorded:

           

Commercial real estate:

           

Land and construction

  $ 905      $ 801      $ —        $ 2,126      $ 1,990      $ —     

Improved property

    12,762        9,360        —          14,817        10,559        —     

Commercial and industrial

    6,113        3,339        —          4,263        3,481        —     

Residential real estate

    18,328        16,491        —          18,560        16,688        —     

Home equity

    4,092        3,574        —          3,562        3,033        —     

Consumer

    964        808        —          1,603        1,294        —     
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total impaired loans without a specific allowance

    43,164        34,373        —          44,931        37,045        —     
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

With a specific allowance recorded:

           

Commercial real estate:

           

Land and construction

    —          —          —          —          —          —     

Improved property

    3,012        3,012        504        3,012        3,012        668   

Commercial and industrial

    5,853        4,049        894        6,176        4,872        853   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total impaired loans with a specific allowance

    8,865        7,061        1,398        9,188        7,884        1,521   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total impaired loans

  $ 52,029      $ 41,434      $ 1,398      $ 54,119      $ 44,929      $ 1,521   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

(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 impaired loans.

 

    Impaired Loans  
    For the Three Months Ended     For the Six Months Ended  
    June 30, 2016     June 30, 2015     June 30, 2016     June 30, 2015  

(unaudited, in thousands)

  Average
Recorded
Investment
    Interest
Income
Recognized
    Average
Recorded
Investment
    Interest
Income
Recognized
    Average
Recorded
Investment
    Interest
Income
Recognized
    Average
Recorded
Investment
    Interest
Income
Recognized
 

With no related specific allowance recorded:

               

Commercial real estate:

               

Land and construction

  $ 840      $ 8      $ 2,493      $ 2      $ 1,223      $ 14      $ 2,158      $ 18   

Improved Property

    9,846        96        21,741        240        10,084        180        19,389        463   

Commercial and industrial

    3,303        52        2,947        49        3,362        93        2,830        62   

Residential real estate

    16,830        194        18,550        235        16,783        433        18,548        465   

Home equity

    3,428        28        2,806        21        3,296        52        2,758        41   

Consumer

    853        17        1,261        26        1,000        35        1,202        46   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total impaired loans without a specific allowance

    35,100        395        49,798        573        35,748        807        46,885        1,095   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

With a specific allowance recorded:

               

Commercial real estate:

               

Land and construction

    —          —          —          —          —          —          —          —     

Improved Property

    3,012        —          6,989        56        3,012        —          7,319        56   

Commercial and industrial

    4,312        26        3,149        118        4,498        58        2,713        137   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total impaired loans with a specific allowance

    7,324        26        10,138        174        7,510        58        10,032        193   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total impaired loans

  $ 42,424      $ 421      $ 59,936      $ 747      $ 43,258      $ 865      $ 56,917      $ 1,288   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

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

 

     Non-accrual Loans (1)  

(unaudited, in thousands)

   June 30,
2016
     December 31,
2015
 

Commercial real estate:

     

Land and construction

   $ 801       $ 1,023   

Improved property

     10,661         11,507   
  

 

 

    

 

 

 

Total commercial real estate

     11,462         12,530   
  

 

 

    

 

 

 

Commercial and industrial

     7,250         8,148   

Residential real estate

     10,071         9,461   

Home equity

     3,017         2,391   

Consumer

     655         851   
  

 

 

    

 

 

 

Total

   $ 32,455       $ 33,381   
  

 

 

    

 

 

 

 

(1)  At June 30, 2016, there were two borrowers with loans greater than $1.0 million and three at December 31, 2015. 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  
     June 30, 2016      December 31, 2015  

(unaudited, in thousands)

   Accruing      Non-Accrual      Total      Accruing      Non-Accrual      Total  

Commercial real estate:

                 

Land and construction

   $ —         $ 361       $ 361       $ 967       $ 431       $ 1,398   

Improved property

     1,711         952         2,663         2,064         1,442         3,506   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total commercial real estate

     1,711         1,313         3,024         3,031         1,873         4,904   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Commercial and industrial

     138         245         383         205         282         487   

Residential real estate

     6,420         2,115         8,535         7,227         2,060         9,287   

Home equity

     557         276         833         642         218         860   

Consumer

     153         172         325         443         184         627   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total

   $ 8,979       $ 4,121       $ 13,100       $ 11,548       $ 4,617       $ 16,165   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

As of June 30, 2016, there were no 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 three months. WesBanco had no unfunded commitments to debtors whose loans were classified as impaired as of June 30, 2016 and $0.2 million as of December 31, 2015.

The following tables present details related to loans identified as TDRs during the three and six months ended June 30, 2016 and 2015, respectively:

 

     New TDRs (1)  
     For the Three Months Ended  
     June 30, 2016      June 30, 2015  

(unaudited, dollars in thousands)

   Number of
Modifications
     Pre-
Modification
Outstanding
Recorded
Investment
     Post-
Modification
Outstanding
Recorded
Investment
     Number of
Modifications
     Pre-
Modification
Outstanding
Recorded
Investment
     Post-
Modification
Outstanding
Recorded
Investment
 

Commercial real estate:

                 

Land and construction

     —         $ —         $ —           —         $ —         $ —     

Improved Property

     —           —           —           —           —           —     
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total commercial real estate

     —           —           —           —           —           —     
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Commercial and industrial

     —           —           —           —           —           —     

Residential real estate

     1         23         22         1         41         39   

Home equity

     1         43         42         —           —           —     

Consumer

     6         38         34         —           —           —     
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total

     8       $ 104       $ 98         1       $ 41       $ 39   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

 

(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.

 

     New TDRs (1)  
     For the Six Months Ended  
     June 30, 2016      June 30, 2015  
            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

     —         $ —         $ —           2       $ 115       $ 110   

Improved Property

     —           —           —           2         835         581   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total commercial real estate

     —           —           —           4         950         691   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Commercial and industrial

     —           —           —           —           —           —     

Residential real estate

     1         23         22         7         454         443   

Home equity

     1         44         42         1         7         6   

Consumer

     6         41         34         2         19         16   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total

     8       $ 108       $ 98         14       $ 1,430       $ 1,156   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

 

(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 six months ended June 30, 2016 and 2015, respectively, that were restructured within the last twelve months prior to June 30, 2016 and 2015, respectively:

 

     Defaulted TDRs (1)  
     For the Six Months Ended  
     June 30, 2016      June 30, 2015  
     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         40         —           —     

Residential real estate

     —           —           —           —     

Home equity

     —           —           1         42   

Consumer

     —           —           —           —     
  

 

 

    

 

 

    

 

 

    

 

 

 

Total

     1       $ 40         1       $ 42   
  

 

 

    

 

 

    

 

 

    

 

 

 

 

(1) Excludes loans that were either charged-off or cured by period end. The recorded investment is as of June 30, 2016 and 2015, respectively.

TDRs that default are placed on non-accrual status unless they are both well-secured and in the process of collection. None of the loans in the table above were accruing interest.

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

 

     June 30,      December 31,  

(unaudited, in thousands)

   2016      2015  

Other real estate owned

   $ 4,361       $ 5,669   

Repossessed assets

     120         156   
  

 

 

    

 

 

 

Total other real estate owned and repossessed assets

   $ 4,481       $ 5,825   
  

 

 

    

 

 

 

Residential real estate included in other real estate owned at June 30, 2016 and December 31, 2015 was $0.8 million and $2.0 million, respectively. At June 30, 2016 and December 31, 2015, formal foreclosure proceedings were in process on residential real estate loans totaling $3.4 million and $4.1 million, respectively.