Fair Value Measurement (Tables)

6 Months Ended

Jun. 30, 2019

Schedule of Fair Value of Assets and Liabilities Measured on Recurring and Nonrecurring Basis

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 June 30, 2019 and December 31, 2018:

			June 30, 2019
			Fair Value Measurements Using:
	June 30,		Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
(unaudited, in thousands)	2019		(level 1)		(level 2)		(level 3)
Recurring fair value measurements
Equity securities	$	11,817	$	11,817	$	—	$	—
Available-for-sale debt securities
U.S. Treasury		29,781		—		29,781		—
U.S. Government sponsored entities and agencies		134,587		—		134,587		—
Residential mortgage-backed securities and collateralized mortgage obligations of government agencies		1,563,042		—		1,563,042		—
Commercial mortgage-backed securities and collateralized mortgage obligations of government sponsored entities and agencies		178,656		—		178,656		—
Obligations of state and political subdivisions		183,178		—		181,576		1,602
Corporate debt securities		40,040		—		40,040		—
Total available-for-sale debt securities	$	2,129,284	$	—	$	2,127,682	$	1,602
Loans held for sale		18,649		—		18,649		—
Other assets - interest rate derivatives agreements		13,281		—		13,281		—
Total assets recurring fair value measurements	$	2,173,031	$	11,817	$	2,159,612	$	1,602

Other liabilities - interest rate derivatives agreements	$	14,774	$	—	$	14,774	$	—
Total liabilities recurring fair value measurements	$	14,774	$	—	$	14,774	$	—

Nonrecurring fair value measurements
Impaired Loans	$	2,434		—		—	$	2,434
Other real estate owned and repossessed assets		4,973		—		—		4,973
Total nonrecurring fair value measurements	$	7,407	$	—	$	—	$	7,407

			December 31, 2018
			Fair Value Measurements Using:
	December 31,		Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
(in thousands)	2018		(level 1)		(level 2)		(level 3)
Recurring fair value measurements
Equity securities	$	11,737	$	11,737	$	—	$	—
Available-for-sale debt securities
U.S. Treasury		19,878		—		19,878		—
U.S. Government sponsored entities and agencies		141,652		—		141,652		—
Residential mortgage-backed securities and collateralized mortgage obligations of government agencies		1,561,255		—		1,561,255		—
Commercial mortgage-backed securities and collateralized mortgage obligations of government sponsored entities and agencies		168,972		—		168,972		—
Obligations of state and political subdivisions		185,114		—		183,611		1,503
Corporate debt securities		37,258		—		37,258		—
Total available-for-sale debt securities	$	2,114,129	$	—	$	2,112,626	$	1,503
Loans held for sale		8,994		—		8,994		—
Other assets - interest rate derivatives agreements		4,650		—		4,650		—
Total assets recurring fair value measurements	$	2,139,510	$	11,737	$	2,126,270	$	1,503

Other liabilities - interest rate derivatives agreements	$	5,081	$	—	$	5,081	$	—
Total liabilities recurring fair value measurements	$	5,081	$	—	$	5,081	$	—

Nonrecurring fair value measurements
Other real estate owned and repossessed assets		7,265		—		—		7,265
Total nonrecurring fair value measurements	$	7,265	$	—	$	—	$	7,265

Schedule of Assets Measured at Fair Value on Nonrecurring Basis

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)
June 30, 2019
Impaired loans	$	2,434	Appraisal of collateral ⁽¹⁾	Appraisal adjustments ⁽²⁾	(30.5%)/((30.5%)
				Liquidation expenses ⁽²⁾	(5.1%)/((5.1%)
Other real estate owned and repossessed assets	$	4,973	Appraisal of collateral ^{(1), (3)}
December 31, 2018
Other real estate owned and repossessed assets	$	7,265	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 expense and numerous dissimilar qualitative adjustments by management, which are not identifiable.

Estimates Fair Values of Financial Instruments

					Fair Value Measurements at
					June 30, 2019
	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	$	194,355	$	194,355	$	194,355	$	—	$	—
Equity securities		11,817		11,817		11,817		—		—
Available-for-sale debt securities		2,129,284		2,129,284		—		2,127,682		1,602
Held-to-maturity debt securities		900,605		921,534		—		920,989		545
Net loans		7,686,995		7,674,887		—		—		7,674,887
Loans held for sale		18,649		18,649		—		18,649		—
Other assets - interest rate derivatives		13,281		13,281		—		13,281		—
Accrued interest receivable		38,450		38,450		38,450		—		—

Financial Liabilities
Deposits		8,694,928		8,695,779		7,329,812		1,365,967		—
Federal Home Loan Bank borrowings		1,121,283		1,127,210		—		1,127,210		—
Other borrowings		296,148		296,574		293,205		3,369		—
Subordinated debt and junior subordinated debt		156,534		144,410		—		144,410		—
Other liabilities - interest rate derivatives		14,774		14,774		—		14,774		—
Accrued interest payable		6,559		6,559		6,559		—		—

					Fair Value Measurements at
					December 31, 2018
	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	$	169,186	$	169,186	$	169,186	$	—	$	—
Equity securities		11,737		11,737		11,737		—		—
Available-for-sale debt securities		2,114,129		2,114,129		—		2,112,626		1,503
Held-to-maturity debt securities		1,020,934		1,020,743		—		1,020,195		548
Net loans		7,607,333		7,422,825		—		—		7,422,825
Loans held for sale		8,994		8,994		—		8,994		—
Other assets - interest rate derivatives		4,650		4,650		—		4,650		—
Accrued interest receivable		38,853		38,853		38,853		—		—

Financial Liabilities
Deposits		8,831,633		8,836,390		7,376,023		1,460,367		—
Federal Home Loan Bank borrowings		1,054,174		1,051,401		—		1,051,401		—
Other borrowings		290,522		290,854		288,918		1,936		—
Subordinated debt and junior subordinated debt		189,842		174,448		—		174,448		—
Other liabilities - interest rate derivatives		5,081		5,081		—		5,081		—
Accrued interest payable		4,627		4,627		4,627		—		—

- Definition

Tabular disclosure of financial instruments measured at fair value, including those classified in shareholders' equity measured on a recurring or nonrecurring basis. Disclosures include, but are not limited to, fair value measurements recorded and the reasons for the measurements, level within the fair value hierarchy in which the fair value measurements are categorized and transfers between levels 1 and 2. Nonrecurring fair value measurements are those that are required or permitted in the statement of financial position in particular circumstances.

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