Loans and the Allowance for Credit Losses

9 Months Ended

Sep. 30, 2022

Loans and the Allowance for Credit Losses

NOTE 4. 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, and discounts on purchased loans. Net deferred loan costs were $9.9 million and $3.3 million at September 30, 2022 and December 31, 2021, respectively. At September 30, 2022 and December 31, 2021, respectively, the balance also included $0.5 million and $6.1 million of net deferred fee income from SBA Payroll Protection Program (“PPP”) loans. The un-accreted discount on purchased loans from acquisitions was $19.7 million at September 30, 2022 and $25.9 million at December 31, 2021.


	September 30,		December 31,
(unaudited, in thousands)	2022		2021
Commercial real estate:
Land and construction	$	955,644	$	833,880
Improved property		4,875,740		4,705,088
Total commercial real estate		5,831,384		5,538,968
Commercial and industrial		1,503,848		1,427,645
Commercial and industrial - PPP		13,008		162,675
Residential real estate		2,010,344		1,721,378
Home equity		609,765		605,682
Consumer		309,313		277,130
Total portfolio loans		10,277,662		9,733,478
Loans held for sale		12,887		25,277
Total loans	$	10,290,549	$	9,758,755

The allowance for credit losses under the current expected credit losses methodology (“CECL”) is calculated utilizing the probability of default (“PD”) / loss given default (“LGD”), which is then discounted to net present value. PD is the probability the asset will default within a given time frame and LGD is the percentage of the asset not expected to be collected due to default. The primary macroeconomic drivers of the quantitative model include forecasts of national unemployment and interest rates, as well as modeling adjustments for changes in prepayment speeds, loan risk grades, portfolio mix, concentrations and loan growth. For the calculation as of September 30, 2022, the one-year forecast was based upon a blended rate from three nationally-recognized published economic forecasts through September 30, 2022, and is primarily driven by the national unemployment and interest rate spread forecasts. Wesbanco’s blended forecast of national unemployment, at quarter end, was projected at 4.2% in the first quarter of the one-year forecast period, with subsequent increases to an average of 4.7% over the remainder of the forecast period. The calculation utilized an immediate reversion back to the Company’s historical loss rate by loan classification. Included in the qualitative factors were COVID-19 pandemic factors related to the transient credit risk not covered by the traditional allowance process, adjusted to Wesbanco’s regional footprint, deferred interest on modified loans, and hospitality industry concentration. As of September 30, 2022, accrued interest receivable for loans was $46.5 million. Wesbanco made an accounting policy election to exclude accrued interest from the measurement of the allowance for credit losses because the Company has a robust policy in place to reverse or write-off accrued interest when loans are placed on non-accrual. However, Wesbanco does have a $0.2 million reserve on the accrued interest related to loan modifications allowed under the CARES Act due to the timing and nature of these modifications. As of September 30, 2022, accrued interest related to COVID-19 loan modifications as permitted under the CARES Act was $18.8 million.

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 Nine Months Ended September 30, 2022 and 2021
(unaudited, in thousands)	Commercial Real Estate - Land and Construction			Commercial Real Estate- Improved Property			Commercial & Industrial			Residential Real Estate			Home Equity			Consumer			Deposit Overdrafts			Total
Balance at December 31, 2021
Allowance for credit losses - loans	$	7,310		$	65,355		$	26,875		$	15,401		$	724		$	3,737		$	2,220		$	121,622
Allowance for credit losses - loan commitments		4,180			201			1,497			1,576			49			272			—			7,775
Total beginning allowance for credit losses - loans and loan commitments		11,490			65,556			28,372			16,977			773			4,009			2,220			129,397
Provision for credit losses:
Provision for loan losses		1,369			(12,082	)		2,160			1,133			37			1,216			260			(5,907	)
Provision for loan commitments		1,618			(201	)		(1,214	)		788			7			165			—			1,163
Total provision for credit losses - loans and loan commitments		2,987			(12,283	)		946			1,921			44			1,381			260			(4,744	)
Charge-offs		(73	)		(642	)		(983	)		(282	)		(266	)		(2,511	)		(1,215	)		(5,972	)
Recoveries		25			899			871			483			293			1,992			278			4,841
Net (charge-offs) recoveries		(48	)		257			(112	)		201			27			(519	)		(937	)		(1,131	)
Balance at September 30, 2022
Allowance for credit losses - loans		8,631			53,530			28,923			16,735			788			4,434			1,543			114,584
Allowance for credit losses - loan commitments		5,798			—			283			2,364			56			437			—			8,938
Total ending allowance for credit losses - loans and loan commitments	$	14,429		$	53,530		$	29,206		$	19,099		$	844		$	4,871		$	1,543		$	123,522

Balance at December 31, 2020
Allowance for credit losses - loans	$	10,841		$	110,652		$	37,850		$	17,851		$	1,487		$	6,507		$	639		$	185,827
Allowance for credit losses - loan commitments		6,508			712			1,275			955			45			19			—			9,514
Total beginning allowance for credit losses - loans and loan commitments		17,349			111,364			39,125			18,806			1,532			6,526			639			195,341
Provision for credit losses:
Provision for loan losses		(3,665	)		(29,171	)		(10,669	)		(3,481	)		(877	)		(2,268	)		1,709			(48,422	)
Provision for loan commitments		(2,829	)		(394	)		451			254			7			287			—			(2,224	)
Total provision for credit losses - loans and loan commitments		(6,494	)		(29,565	)		(10,218	)		(3,227	)		(870	)		(1,981	)		1,709			(50,646	)
Charge-offs		(22	)		(933	)		(1,717	)		(842	)		(382	)		(2,210	)		(932	)		(7,038	)
Recoveries		110			1,053			1,737			885			471			1,718			264			6,238
Net (charge-offs) recoveries		88			120			20			43			89			(492	)		(668	)		(800	)
Balance at September 30, 2021
Allowance for credit losses - loans		7,264			81,601			27,201			14,413			699			3,747			1,680			136,605
Allowance for credit losses - loan commitments		3,679			318			1,726			1,209			52			306			—			7,290
Total ending allowance for credit losses - loans and loan commitments	$	10,943		$	81,919		$	28,927		$	15,622		$	751		$	4,053		$	1,680		$	143,895

The following tables present the allowance for credit losses and recorded investments in loans by category, as of each period-end:


	Allowance for Credit Losses and Recorded Investment in Loans
(unaudited, in thousands)	Commercial Real Estate- Land and Construction		Commercial Real Estate- Improved Property		Commercial and Industrial		Residential Real Estate		Home Equity		Consumer		Deposit Over- drafts		Total
September 30, 2022
Allowance for credit losses:
Loans individually-evaluated	$	297	$	3,940	$	184	$	—	$	—	$	—	$	—	$	4,421
Loans collectively-evaluated		8,334		49,590		28,739		16,735		788		4,434		1,543		110,163
Loan commitments		5,798		—		283		2,364		56		437		—		8,938
Total allowance for credit losses - loans and commitments	$	14,429	$	53,530	$	29,206	$	19,099	$	844	$	4,871	$	1,543	$	123,522

Portfolio loans:
Individually-evaluated for credit losses	$	1,115	$	30,732	$	437	$	—	$	—	$	—	$	—	$	32,284
Collectively-evaluated for credit losses		954,529		4,845,008		1,516,419		2,010,344		609,765		309,313		—		10,245,378
Total portfolio loans	$	955,644	$	4,875,740	$	1,516,856	$	2,010,344	$	609,765	$	309,313	$	—	$	10,277,662

December 31, 2021
Allowance for credit losses:
Loans individually-evaluated	$	381	$	8,560	$	333	$	—	$	—	$	—	$	—	$	9,274
Loans collectively-evaluated		6,929		56,795		26,542		15,401		724		3,737		2,220		112,348
Loan commitments		4,180		201		1,497		1,576		49		272		—		7,775
Total allowance for credit losses - loans and commitments	$	11,490	$	65,556	$	28,372	$	16,977	$	773	$	4,009	$	2,220	$	129,397

Portfolio loans:
Individually-evaluated for credit losses	$	1,248	$	66,635	$	576	$	—	$	—	$	—	$	—	$	68,459
Collectively-evaluated for credit losses		832,632		4,638,453		1,589,744		1,721,378		605,682		277,130		—		9,665,019
Total portfolio loans	$	833,880	$	4,705,088	$	1,590,320	$	1,721,378	$	605,682	$	277,130	$	—	$	9,733,478

Commercial loan risk grades are determined based on an evaluation of the relevant characteristics of each loan, assigned at inception 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 sufficiency, reliability and sustainability of the primary source of repayment and overall financial strength of the borrower. The rating system more heavily weights the debt service coverage, leverage and loan to value factors to derive the risk grade. Other factors that are considered at a lesser weighting include management, industry or property type risks, payment history, collateral or guarantees.

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 the net operating income generated by the property to service the debt (“debt service coverage”), the loan to appraised value, the type, quality, industry and mix of tenants, and the terms of leases. The risk grade assigned to owner-occupied commercial real estate is based primarily on global debt service coverage and the leverage of the business, but may also consider the industry in which the business operates, the business’ specific competitive advantages or disadvantages, collateral margins and the quality and experience of management.

Commercial and industrial (“C&I”) loans consist of revolving lines of credit to finance accounts receivable, inventory and other general business purposes; term loans to finance fixed assets other than real estate, and letters of credit to support trade, insurance or governmental requirements for a variety of businesses. Most C&I borrowers are privately-held companies with annual sales up to $100 million. Primary factors that are considered in risk rating C&I loans include debt service coverage and leverage. Other factors including operating trends, collateral coverage along with management experience are also considered.

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, including guarantees.

Criticized loans, considered as compromised, have potential weaknesses that deserve management's close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the asset or in the bank's credit position at some future date. Criticized loans are not adversely classified by the banking regulators and do not expose the bank to sufficient risk to warrant adverse classification.

Classified loans, considered as substandard and doubtful, are equivalent to the classifications used by banking regulators. Substandard loans are inadequately protected by the current sound worth and paying capacity of the obligor or of the collateral pledged, if any. Loans so classified must have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the bank will sustain some loss if the deficiencies are not corrected. These loans may or may not be reported as non-accrual. Doubtful loans have all the weaknesses inherent in those classified substandard, with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently known facts, conditions, and values, highly questionable and improbable. These loans are reported as non-accrual.

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


	Commercial Loans by Internally Assigned Risk Grade
(unaudited, in thousands)	Commercial Real Estate- Land and Construction		Commercial Real Estate- Improved Property		Commercial & Industrial		Total Commercial Loans
As of September 30, 2022
Pass	$	923,333	$	4,698,327	$	1,476,543	$	7,098,203
Criticized - compromised		25,180		113,584		24,412		163,176
Classified - substandard		7,131		63,829		15,901		86,861
Classified - doubtful		—		—		—		—
Total	$	955,644	$	4,875,740	$	1,516,856	$	7,348,240

As of December 31, 2021
Pass	$	823,316	$	4,400,872	$	1,540,569	$	6,764,757
Criticized - compromised		7,955		222,830		17,733		248,518
Classified - substandard		2,609		81,386		32,018		116,013
Classified - doubtful		—		—		—		—
Total	$	833,880	$	4,705,088	$	1,590,320	$	7,129,288

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 was $26.5 million at September 30, 2022 and $30.2 million at December 31, 2021, of which $7.0 million and $7.4 million were accruing, for each period, respectively. These loans are not included in the tables above. In addition, $27.3 million and $21.7 million of unfunded commercial loan commitments are also not included in the tables above at September 30, 2022 and December 31, 2021, respectively.

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


	Age Analysis of Loans
(unaudited, in thousands)	Current		30-59 Days Past Due		60-89 Days Past Due		90 Days or More Past Due		Total Past Due		Total Loans		90 Days or More Past Due and Accruing (1)
As of September 30, 2022
Commercial real estate:
Land and construction	$	955,075	$	134	$	140	$	295	$	569	$	955,644	$	295
Improved property		4,852,702		2,473		2,143		18,422		23,038		4,875,740		13,913
Total commercial real estate		5,807,777		2,607		2,283		18,717		23,607		5,831,384		14,208
Commercial and industrial		1,500,637		4,717		3,486		8,016		16,219		1,516,856		6,082
Residential real estate		1,998,214		1,079		2,758		8,293		12,130		2,010,344		2,456
Home equity		603,115		2,571		782		3,297		6,650		609,765		1,006
Consumer		305,452		2,288		895		678		3,861		309,313		559
Total portfolio loans		10,215,195		13,262		10,204		39,001		62,467		10,277,662		24,311
Loans held for sale		12,887		—		—		—		—		12,887		—
Total loans	$	10,228,082	$	13,262	$	10,204	$	39,001	$	62,467	$	10,290,549	$	24,311

Nonperforming loans included above are as follows:
Non-accrual loans	$	12,189	$	721	$	882	$	14,392	$	15,995	$	28,184
TDRs accruing interest		4,258		27		-		298		325		4,583
Total nonperforming loans	$	16,447	$	748	$	882	$	14,690	$	16,320	$	32,767

As of December 31, 2021
Commercial real estate:
Land and construction	$	833,755	$	—	$	—	$	125	$	125	$	833,880	$	51
Improved property		4,681,028		6,377		7,728		9,955		24,060		4,705,088		3,042
Total commercial real estate		5,514,783		6,377		7,728		10,080		24,185		5,538,968		3,093
Commercial and industrial		1,583,347		2,275		1,213		3,485		6,973		1,590,320		559
Residential real estate		1,702,587		2,331		3,254		13,206		18,791		1,721,378		2,840
Home equity		599,189		2,240		602		3,651		6,493		605,682		685
Consumer		273,577		1,532		1,208		813		3,553		277,130		627
Total portfolio loans		9,673,483		14,755		14,005		31,235		59,995		9,733,478		7,804
Loans held for sale		25,277		—		—		—		—		25,277		—
Total loans	$	9,698,760	$	14,755	$	14,005	$	31,235	$	59,995	$	9,758,755	$	7,804

Nonperforming loans included above are as follows:
Non-accrual loans	$	11,174	$	914	$	564	$	23,090	$	24,568	$	35,742
TDRs accruing interest		3,275		3		127		341		471		3,746
Total nonperforming loans	$	14,449	$	917	$	691	$	23,431	$	25,039	$	39,488

(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 nonperforming loans:


	Nonperforming Loans
	September 30, 2022						December 31, 2021
	Unpaid						Unpaid
	Principal		Recorded		Related		Principal		Recorded		Related
(unaudited, in thousands)	Balance (1)		Investment		Allowance		Balance (1)		Investment		Allowance
With no related specific allowance recorded:
Commercial real estate:
Land and construction	$	—	$	—	$	—	$	74	$	73	$	—
Improved property		8,424		6,767		—		9,846		8,089		—
Commercial and industrial		4,489		3,562		—		6,528		5,256		—
Residential real estate		22,264		17,125		—		25,492		20,065		—
Home equity		6,486		4,928		—		6,985		5,440		—
Consumer		698		385		—		869		565		—
Total nonperforming loans without a specific allowance		42,361		32,767		—		49,794		39,488		—
Total nonperforming loans with a specific allowance		—		—		—		—		—		—
Total nonperforming loans	$	42,361	$	32,767	$	—	$	49,794	$	39,488	$	—

(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 nonperforming loans.


	Nonperforming Loans
	For the Three Months Ended										For the Nine Months Ended
	September 30, 2022					September 30, 2021					September 30, 2022				September 30, 2021
	Average		Interest			Average		Interest			Average		Interest		Average		Interest
	Recorded		Income			Recorded		Income			Recorded		Income		Recorded		Income
(unaudited, in thousands)	Investment		Recognized			Investment		Recognized			Investment		Recognized		Investment		Recognized
With no related specific allowance recorded:
Commercial real estate:
Land and construction	$	27	$	(2	)	$	110	$	—		$	70	$	—	$	202	$	—
Improved property		7,086		57			6,271		6			7,505		71		6,987		23
Commercial and industrial		4,010		5			5,021		(2	)		4,514		8		3,783		1
Residential real estate		17,467		24			21,549		(15	)		18,327		96		21,198		125
Home equity		5,046		14			5,544		—			5,279		20		5,591		9
Consumer		396		1			411		1			468		3		384		2
Total nonperforming loans without a specific allowance		34,030		99			38,906		(10	)		36,163		198		38,145		160
With a specific allowance recorded:
Commercial real estate:
Land and construction		—		—			—		—			—		—		—		—
Improved property		—		—			2,084		—			—		—		2,087		—
Total nonperforming loans with a specific allowance		—		—			2,084		—			—		—		2,087		—
Total nonperforming loans	$	34,030	$	99		$	40,990	$	(10	)	$	36,163	$	198	$	40,232	$	160

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


	Non-accrual Loans (1)
	September 30,		December 31,
(unaudited, in thousands)	2022		2021
Commercial real estate:
Land and construction	$	—	$	73
Improved property		5,339		7,715
Total commercial real estate		5,339		7,788
Commercial and industrial		3,388		5,064
Residential real estate		14,470		17,190
Home equity		4,642		5,163
Consumer		345		537
Total	$	28,184	$	35,742

(1)

At September 30, 2022, there was one borrower with a loan balance greater than $1.0 million, which totaled $1.1 million, as compared to three borrowers with a loan balance greater than $1.0 million totaling $4.1 million at December 31, 2021. Total non-accrual loans include loans that are also TDRs. Such loans are also set forth in the following table as non-accrual TDRs.


	TDRs
	September 30, 2022						December 31, 2021
(unaudited, in thousands)	Accruing		Non-Accrual		Total		Accruing		Non-Accrual		Total
Commercial real estate:
Land and construction	$	—	$	—	$	—	$	—	$	—	$	—
Improved property		1,428		29		1,457		374		133		507
Total commercial real estate		1,428		29		1,457		374		133		507
Commercial and industrial		174		—		174		192		—		192
Residential real estate		2,655		1,503		4,158		2,875		1,156		4,031
Home equity		286		224		510		277		258		535
Consumer		40		—		40		28		—		28
Total	$	4,583	$	1,756	$	6,339	$	3,746	$	1,547	$	5,293

As of September 30, 2022, there was one TDR greater than $1.0 million, which totaled $1.1 million; there were no such TDRs as of December 31, 2021. 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 six months. Wesbanco had unfunded commitments to debtors whose loans were classified as nonperforming of $0.1 million as of both September 30, 2022 and December 31, 2021.

The following table presents details related to loans identified as TDRs during the three and nine months ended September 30, 2022 and 2021, respectively:


	New TDRs (1)
	For the Three Months Ended
	September 30, 2022						September 30, 2021
			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		—	$	—	$	—		—	$	—	$	—
Improved property		1		1,097		1,075		—		—		—
Total commercial real estate		1		1,097		1,075		—		—		—
Commercial and industrial		—		—		—		—		—		—
Residential real estate		—		—		—		1		102		101
Home equity		—		—		—		—		—		—
Consumer		—		—		—		—		—		—
Total		1	$	1,097	$	1,075		1	$	102	$	101

	New TDRs (1)
	For the Nine Months Ended
	September 30, 2022						September 30, 2021
			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		1	$	84	$	—		—	$	—	$	—
Improved property		2		1,286		1,075		—		—		—
Total commercial real estate		3		1,370		1,075		—		—		—
Commercial and industrial		—		—		—		—		—		—
Residential real estate		—		—		—		1		103		101
Home equity		—		—		—		1		57		55
Consumer		—		—		—		—		—		—
Total		3	$	1,370	$	1,075		2	$	160	$	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 nine months ended September 30, 2022 and 2021, respectively, that were restructured within the last twelve months prior to September 30, 2022 and 2021, respectively.


	Defaulted TDRs (1)
	For the Nine Months Ended
	September 30, 2022				September 30, 2021
	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		—		—		—		—
Residential real estate		—		—		1		234
Home equity		—		—		—		—
Consumer		—		—		—		—
Total		—	$	—		1	$	234

(1)

Excludes loans that were either charged-off or cured by period end. The recorded investment is as of September 30, 2022 and 2021, respectively.

TDRs that default are placed on non-accrual status unless they are both well-secured and in the process of collection. The loans in the table above were not accruing interest.

Section 4013 of the CARES Act allows financial institutions the option to temporarily suspend certain requirements under GAAP related to TDRs for a limited period of time during the COVID-19 pandemic. These customers must meet certain criteria, such as they were in good standing and not more than 30 days past due either as of December 31, 2019, or as of the implementation of the modification program under the Interagency Statement, as well as other requirements noted in the regulatory agencies’ revised statement. Based on this guidance, Wesbanco does not classify the COVID-19 loan modifications as TDRs, nor are the customers considered past due with regard to their delayed payments. Upon exiting the loan modification deferral program, the measurement of loan delinquency will resume where it left off upon entry into the program. Under the CARES Act, Wesbanco has modified approximately 3,553 loans totaling $2.2 billion, of which $32.6 million remain in their deferral period as of September 30, 2022. Wesbanco originally offered three to six months of deferred payments to commercial and retail customers impacted by the COVID-19 pandemic depending on the type of loan and the industry for commercial loans. In the fourth quarter of 2020, Wesbanco offered up to an additional twelve months of deferred payments to certain commercial loan customers, predominantly in the hospitality industry, based on specific criteria related to the borrower, the underlying property and the potential for guarantors or co-borrowers. On December 27, 2020, the Economic Aid to Hard-Hit Small Businesses, Nonprofits and Venues Act (“Economic Aid Act”) was signed into law and among other things, extended the relief granted by the CARES Act for TDRs, initially slated to end on December 31, 2020, by one year to December 31, 2021.

The following tables summarize amortized cost basis loan balances by year of origination and credit quality indicator:


	Loans As of September 30, 2022
	Amortized Cost Basis by Origination Year
(unaudited, in thousands)	2022		2021		2020		2019		2018		Prior		Revolving Loans Amortized Cost Basis		Revolving Loans Converted to Term		Total
Commercial real estate: land and construction
Risk rating:
Pass	$	129,030	$	155,816	$	164,359	$	182,096	$	92,973	$	54,518	$	93,043	$	51,498	$	923,333
Criticized - compromised		—		393		—		—		24,448		339		—		—		25,180
Classified - substandard		—		—		6,001		—		—		1,130		—		—		7,131
Classified - doubtful		—		—		—		—		—		—		—		—		—
Total	$	129,030	$	156,209	$	170,360	$	182,096	$	117,421	$	55,987	$	93,043	$	51,498	$	955,644

Commercial real estate: improved property
Risk rating:
Pass	$	799,090	$	617,653	$	619,263	$	539,169	$	359,321	$	1,654,366	$	82,767	$	26,698	$	4,698,327
Criticized - compromised		134		989		2,602		6,153		13,343		89,320		1,043		—		113,584
Classified - substandard		—		—		402		16,951		9,911		36,531		34		—		63,829
Classified - doubtful		—		—		—		—		—		—		—		—		—
Total	$	799,224	$	618,642	$	622,267	$	562,273	$	382,575	$	1,780,217	$	83,844	$	26,698	$	4,875,740

Commercial and industrial
Risk rating:
Pass	$	193,429	$	203,882	$	124,640	$	79,989	$	109,885	$	260,849	$	492,838	$	11,031	$	1,476,543
Criticized - compromised		297		728		298		8,695		199		2,359		7,592		4,244		24,412
Classified - substandard		—		3,383		1,001		2,388		405		2,585		558		5,581		15,901
Classified - doubtful		—		—		—		—		—		—		—		—		—
Total	$	193,726	$	207,993	$	125,939	$	91,072	$	110,489	$	265,793	$	500,988	$	20,856	$	1,516,856

Residential real estate
Loan delinquency:
Current	$	393,074	$	640,158	$	238,285	$	99,970	$	61,470	$	500,020	$	—	$	65,237	$	1,998,214
30-59 days past due		—		—		—		—		—		1,079		—		—		1,079
60-89 days past due		—		365		—		282		101		2,010		—		—		2,758
90 days or more past due		—		—		—		287		120		7,840		—		46		8,293
Total	$	393,074	$	640,523	$	238,285	$	100,539	$	61,691	$	510,949	$	—	$	65,283	$	2,010,344

Home equity
Loan delinquency:
Current	$	14,454	$	874	$	575	$	1,146	$	888	$	17,428	$	567,035	$	715	$	603,115
30-59 days past due		39		—		—		93		77		908		1,454		—		2,571
60-89 days past due		175		—		376		26		115		90		—		—		782
90 days or more past due		—		66		117		85		199		2,091		—		739		3,297
Total	$	14,668	$	940	$	1,068	$	1,350	$	1,279	$	20,517	$	568,489	$	1,454	$	609,765

Consumer
Loan delinquency:
Current	$	68,756	$	40,850	$	29,033	$	30,726	$	10,761	$	28,804	$	96,352	$	170	$	305,452
30-59 days past due		661		653		346		71		75		330		152		—		2,288
60-89 days past due		267		280		118		37		47		146		—		—		895
90 days or more past due		118		178		95		40		16		214		17		—		678
Total	$	69,802	$	41,961	$	29,592	$	30,874	$	10,899	$	29,494	$	96,521	$	170	$	309,313


	Loans As of December 31, 2021
	Amortized Cost Basis by Origination Year
(unaudited, in thousands)	2021		2020		2019		2018		2017		Prior		Revolving Loans Amortized Cost Basis		Revolving Loans Converted to Term		Total
Commercial real estate: land and construction
Risk rating:
Pass	$	135,179	$	217,389	$	198,974	$	117,157	$	27,186	$	29,696	$	35,059	$	62,676	$	823,316
Criticized - compromised		85		6,236		—		33		—		219		856		526		7,955
Classified - substandard		—		73		—		—		—		1,280		—		1,256		2,609
Classified - doubtful		—		—		—		—		—		—		—		—		—
Total	$	135,264	$	223,698	$	198,974	$	117,190	$	27,186	$	31,195	$	35,915	$	64,458	$	833,880

Commercial real estate: improved property
Risk rating:
Pass	$	713,697	$	660,856	$	589,674	$	405,689	$	404,241	$	1,539,275	$	58,933	$	28,507	$	4,400,872
Criticized - compromised		7,755		15,195		52,859		17,697		14,490		99,687		1,414		13,733		222,830
Classified - substandard		9,355		2,686		4,855		3,730		11,010		49,667		34		49		81,386
Classified - doubtful		—		—		—		—		—		—		—		—		—
Total	$	730,807	$	678,737	$	647,388	$	427,116	$	429,741	$	1,688,629	$	60,381	$	42,289	$	4,705,088

Commercial and industrial
Risk rating:
Pass	$	406,495	$	159,878	$	99,472	$	136,146	$	89,049	$	223,514	$	409,789	$	16,226	$	1,540,569
Criticized - compromised		590		551		693		2,558		1,645		1,278		5,389		5,029		17,733
Classified - substandard		134		236		18,465		766		2,139		1,419		3,723		5,136		32,018
Classified - doubtful		—		—		—		—		—		—		—		—		—
Total	$	407,219	$	160,665	$	118,630	$	139,470	$	92,833	$	226,211	$	418,901	$	26,391	$	1,590,320

Residential real estate
Loan delinquency:
Current	$	599,244	$	292,653	$	116,147	$	71,253	$	56,917	$	536,444	$	—	$	29,929	$	1,702,587
30-59 days past due		1,127		—		—		69		105		1,030		—		—		2,331
60-89 days past due		563		91		—		271		43		2,286		—		—		3,254
90 days or more past due		1,933		673		895		88		762		8,802		—		53		13,206
Total	$	602,867	$	293,417	$	117,042	$	71,681	$	57,827	$	548,562	$	—	$	29,982	$	1,721,378

Home equity
Loan delinquency:
Current	$	10,076	$	835	$	649	$	379	$	566	$	18,064	$	567,478	$	1,142	$	599,189
30-59 days past due		—		84		45		128		50		628		1,247		58		2,240
60-89 days past due		—		—		132		15		188		267		—		—		602
90 days or more past due		187		88		119		112		234		2,550		—		361		3,651
Total	$	10,263	$	1,007	$	945	$	634	$	1,038	$	21,509	$	568,725	$	1,561	$	605,682

Consumer
Loan delinquency:
Current	$	60,907	$	43,871	$	50,317	$	19,289	$	11,084	$	32,343	$	55,739	$	27	$	273,577
30-59 days past due		435		370		214		136		85		241		51		—		1,532
60-89 days past due		413		375		82		19		33		286		—		—		1,208
90 days or more past due		115		141		222		65		1		265		4		—		813
Total	$	61,870	$	44,757	$	50,835	$	19,509	$	11,203	$	33,135	$	55,794	$	27	$	277,130

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


	September 30,		December 31,
(unaudited, in thousands)	2022		2021
Other real estate owned	$	1,467	$	—
Repossessed assets		128		—
Total other real estate owned and repossessed assets	$	1,595	$	—

Residential real estate included in other real estate owned was $0.1 million and $0 at September 30, 2022 and December 31, 2021, respectively. At September 30, 2022 and December 31, 2021, formal foreclosure proceedings were in process on residential real estate loans totaling $3.7 million and $4.0 million, respectively. Previously, as a result of provisions of the CARES Act, certain residential real estate loans were temporarily suspended from entering foreclosure proceedings, which included $0.8 million of loans as of December 31, 2021. Since this moratorium had substantially ended during the first quarter of 2022, there are currently no loans suspended from entering foreclosure proceedings.