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Derivatives and Hedging Activities | 9 Months Ended
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Sep. 30, 2025
Derivative Instruments and Hedging Activities Disclosure [Abstract] |
Derivatives and Hedging Activities | NOTE 8. DERIVATIVES AND HEDGING ACTIVITIES Risk Management Objective of Using Derivatives Wesbanco is exposed to certain risks arising from both its business operations and economic conditions. Wesbanco principally manages its exposures to a wide variety of business and operational risks through management of its core business activities. Wesbanco manages economic risks, including interest rate, liquidity, and credit risk, primarily by managing the amount, sources, and duration of its assets and liabilities. Wesbanco’s existing interest rate derivatives result from a service provided to certain qualifying customers and, therefore, are not used to manage interest rate risk in Wesbanco’s assets or liabilities. Wesbanco manages a matched book with respect to its derivative instruments in order to minimize its net risk exposure resulting from such transactions. A matched book is when the assets and liabilities of Wesbanco Bank, Inc., Wesbanco's banking subsidiary (the "Bank") are equally distributed but also have similar maturities. Loan Swaps Wesbanco executes interest rate swaps and interest rate caps with commercial banking customers to facilitate their respective risk management strategies. Those interest rate swaps and caps are economically hedged by offsetting interest rate swaps and caps that Wesbanco executes with a third party, such that Wesbanco minimizes its net risk exposure resulting from such transactions. As the interest rate swaps and caps associated with this program do not meet the hedge accounting requirements of ASC 815, changes in the fair value of both the customer swaps and caps and the offsetting third-party swaps and caps are recognized directly in earnings. As of September 30, 2025 and December 31, 2024, Wesbanco had 343 and 293 customer interest rate swaps and caps with an aggregate notional amount of $2.3 billion and $1.9 billion, respectively, related to this program. Wesbanco recognized income for the related swap and cap fees of $3.2 million and $1.1 million for the three months ended September 30, 2025 and 2024, respectively, and $6.6 million and $3.6 million for the nine months ended September 30, 2025 and 2024, respectively. Risk participation agreements are entered into as financial guarantees of performance on interest rate swap derivatives. The purchased asset or sold liability allows Wesbanco to participate-in (fee received) or participate-out (fee paid) the risk associated with certain derivative positions executed by the borrower of the lead bank in a loan syndication. As of September 30, 2025 and December 31, 2024, Wesbanco had 27 and 24 risk participation-in agreements with an aggregate notional amount of $276.5 million and $233.8 million, respectively. As of September 30, 2025 and December 31, 2024, Wesbanco had eight risk participation-out agreements with an aggregate notional amount of $67.2 million and $67.7 million, respectively. Mortgage Loans Held for Sale and Interest Rate Lock Commitments Certain residential mortgage loans are originated for sale in the secondary mortgage loan market. These loans are classified as held for sale and carried at fair value as Wesbanco has elected the fair value option. Fair value is determined based on rates obtained from the secondary market for loans with similar characteristics. Wesbanco sells loans to the secondary market on either a mandatory or best efforts basis. The loans sold on a mandatory basis are not committed to an investor until the loan is closed with the borrower. Wesbanco enters into forward to be announced (“TBA”) contracts to manage the interest rate risk between the lock commitment and the closing of the loan. The total balance of forward TBA contracts entered into was $137.5 million and $29.0 million at September 30, 2025 and December 31, 2024, respectively. The loans sold on a best efforts basis are committed to an investor simultaneous to the interest rate commitment with the borrower, and as a result, the Company does not enter into a separate forward TBA contract to offset the fair value risk as the investor accepts such risk in exchange for paying a lower premium on sale. Fair Values of Derivative Instruments on the Balance Sheet All derivatives are carried on the consolidated balance sheet at fair value. Derivative assets are classified in the consolidated balance sheet under other assets, and derivative liabilities are classified in the consolidated balance sheet under other liabilities. Changes in fair value are recognized in earnings. None of Wesbanco’s derivatives are designated in a qualifying hedging relationship under ASC 815. The table below presents the fair value of Wesbanco’s derivative financial instruments as well as their classification on the Balance Sheet as of September 30, 2025 and December 31, 2024:
|  | September 30, 2025 |  |  | December 31, 2024 |
(unaudited, in thousands) |  | Notional or Contractual Amount |  |  | Asset Derivative s |  |  | Liability Derivatives |  |  | Notional or Contractual Amount |  |  | Asset Derivative s |  |  | Liability Derivatives |
Derivatives |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Loan Swaps: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Interest rate swaps and caps |  | $ | 2,321,157 |  |  | $ | 65,321 |  |  | $ | 66,886 |  |  | $ | 1,906,520 |  |  | $ | 72,343 |  |  | $ | 72,204 |
Other contracts: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Interest rate lock commitments |  |  | 43,622 |  |  |  | 996 |  |  |  | — |  |  |  | 15,476 |  |  |  | — |  |  |  | 41 |
Forward TBA contracts |  |  | 137,500 |  |  |  | — |  |  |  | 468 |  |  |  | 29,000 |  |  |  | 115 |  |  |  | — |
Total derivatives |  |  |  |  | $ | 66,317 |  |  | $ | 67,354 |  |  |  |  |  | $ | 72,458 |  |  | $ | 72,245 |
Effect of Derivative Instruments on the Income Statement The table below presents the change in the fair value of the Company’s derivative financial instruments reflected within non-interest income on the consolidated income statement for the three and nine months ended September 30, 2025 and 2024, respectively.
|  |  | For the Three Months Ended September 30, |  |  | For the Nine Months Ended September 30, |
(unaudited, in thousands) | Location of Gain/(Loss) |  | 2025 |  |  | 2024 |  |  | 2025 |  |  | 2024 |
Interest rate swaps and caps | Net swap fee and valuation income |  | $ | 22 |  |  | $ | (1,702 | ) |  | $ | (1,665 | ) |  | $ | (895 | )
Interest rate lock commitments | Mortgage banking income |  |  | (532 | ) |  |  | (8 | ) |  |  | 1,037 |  |  |  | (124 | )
Forward TBA contracts | Mortgage banking income |  |  | (836 | ) |  |  | (621 | ) |  |  | (1,872 | ) |  |  | (526 | )
Total |  |  | $ | (1,346 | ) |  | $ | (2,331 | ) |  | $ | (2,500 | ) |  | $ | (1,545 | )
Credit-risk-related Contingent Features Wesbanco has agreements with its derivative counterparties that contain a provision, which provides that if Wesbanco defaults on any of its indebtedness, including default where repayment of the indebtedness has not been accelerated by the lender, then Wesbanco could also be declared in default on its derivative obligations. Wesbanco also has agreements with certain of its derivative counterparties that contain a provision where if Wesbanco fails to maintain its status as either a “well” or “adequately-capitalized” institution, then the counterparty could terminate the derivative positions and Wesbanco would be required to settle its obligations under the agreements. Dependent upon the net present value of the underlying swaps, Wesbanco has minimum collateral posting thresholds with certain of its derivative counterparties. Wesbanco has posted net cash collateral with a market value of $20.4 million as of September 30, 2025, while, as of December 31, 2024, Wesbanco was holding net cash collateral from various derivative counterparties totaling $42.6 million within interest bearing deposit accounts. If Wesbanco had breached any of these provisions at September 30, 2025, it could have been required to settle its obligations under the agreements at the termination value and would have been required to pay any additional amounts due in excess of amounts previously posted as collateral with the respective counterparties.

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