Fair Value Measurement (Tables)

9 Months Ended

Sep. 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 September 30, 2019 and December 31, 2018:

			September 30, 2019
			Fair Value Measurements Using:
	September 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	$	11,644	$	11,644	$	—	$	—
Available-for-sale debt securities
U.S. Treasury		29,878		—		29,878		—
U.S. Government sponsored entities and agencies		120,441		—		120,441		—
Residential mortgage-backed securities and collateralized mortgage obligations of government agencies		1,681,065		—		1,681,065		—
Commercial mortgage-backed securities and collateralized mortgage obligations of government sponsored entities and agencies		188,305		—		188,305		—
Obligations of state and political subdivisions		151,363		—		149,729		1,634
Corporate debt securities		38,147		—		38,147		—
Total available-for-sale debt securities	$	2,209,199	$	—	$	2,207,565	$	1,634
Loans held for sale		20,715		—		20,715		—
Other assets - interest rate derivatives agreements		18,672		—		18,672		—
Total assets recurring fair value measurements	$	2,260,230	$	11,644	$	2,246,952	$	1,634

Other liabilities - interest rate derivatives agreements	$	20,721	$	—	$	20,721	$	—
Total liabilities recurring fair value measurements	$	20,721	$	—	$	20,721	$	—

Nonrecurring fair value measurements
Impaired Loans	$	2,488		—		—	$	2,488
Other real estate owned and repossessed assets		3,678		—		—		3,678
Total nonrecurring fair value measurements	$	6,166	$	—	$	—	$	6,166

			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)
September 30, 2019
Impaired loans	$	2,488	Appraisal of collateral ⁽¹⁾	Appraisal adjustments ⁽²⁾	(29.1%)/(29.1%)
				Liquidation expenses ⁽²⁾	(5.2%)/(5.2%)
Other real estate owned and repossessed assets	$	3,678	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
					September 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	$	244,333	$	244,333	$	244,333	$	—	$	—
Equity securities		11,644		11,644		11,644		—		—
Available-for-sale debt securities		2,209,199		2,209,199		—		2,207,565		1,634
Held-to-maturity debt securities		852,824		877,809		—		877,258		551
Net loans		7,702,435		7,741,859		—		—		7,741,859
Loans held for sale		20,715		20,715		—		20,715		—
Other assets - interest rate derivatives		18,672		18,672		—		18,672		—
Accrued interest receivable		37,156		37,156		37,156		—		—

Financial Liabilities
Deposits		8,664,363		8,671,246		7,388,830		1,282,416		—
Federal Home Loan Bank borrowings		1,161,092		1,167,912		—		1,167,912		—
Other borrowings		325,247		325,663		322,295		3,368		—
Subordinated debt and junior subordinated debt		156,632		144,998		—		144,998		—
Other liabilities - interest rate derivatives		20,721		20,721		—		20,721		—
Accrued interest payable		5,273		5,273		5,273		—		—

					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		120,743		—		120,195		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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