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Securities
 9 Months Ended
Sep. 30, 2019
Investments Debt And Equity Securities [Abstract]  
Securities

NOTE 4. SECURITIES

The following table presents the fair value and amortized cost of available-for-sale and held-to-maturity debt securities:

 

 

 

September 30, 2019

 

 

December 31, 2018

 

(unaudited, in thousands)

 

Amortized

Cost

 

 

Gross

Unrealized

Gains

 

 

Gross

Unrealized

Losses

 

 

Estimated

Fair

Value

 

 

Amortized

Cost

 

 

Gross

Unrealized

Gains

 

 

Gross

Unrealized

Losses

 

 

Estimated

Fair

Value

 

Available-for-sale debt securities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. Treasury

 

$

29,817

 

 

$

61

 

 

$

—

 

 

$

29,878

 

 

$

19,882

 

 

$

3

 

 

$

(7

)

 

$

19,878

 

U.S. Government sponsored entities and

   agencies

 

 

116,508

 

 

 

4,012

 

 

 

(79

)

 

 

120,441

 

 

 

142,852

 

 

 

556

 

 

 

(1,756

)

 

 

141,652

 

Residential mortgage-backed securities and

   collateralized mortgage obligations of

   government sponsored entities and

   agencies

 

 

1,663,942

 

 

 

21,469

 

 

 

(4,346

)

 

 

1,681,065

 

 

 

1,585,864

 

 

 

2,912

 

 

 

(27,521

)

 

 

1,561,255

 

Commercial mortgage-backed securities

   and collateralized mortgage obligations

   of government sponsored entities and

   agencies

 

 

183,634

 

 

 

4,716

 

 

 

(45

)

 

 

188,305

 

 

 

171,671

 

 

 

264

 

 

 

(2,963

)

 

 

168,972

 

Obligations of states and political

   subdivisions

 

 

145,593

 

 

 

5,771

 

 

 

(1

)

 

 

151,363

 

 

 

184,057

 

 

 

2,039

 

 

 

(982

)

 

 

185,114

 

Corporate debt securities

 

 

37,684

 

 

 

592

 

 

 

(129

)

 

 

38,147

 

 

 

37,730

 

 

 

87

 

 

 

(559

)

 

 

37,258

 

Total available-for-sale debt securities

 

$

2,177,178

 

 

$

36,621

 

 

$

(4,600

)

 

$

2,209,199

 

 

$

2,142,056

 

 

$

5,861

 

 

$

(33,788

)

 

$

2,114,129

 

Held-to-maturity debt securities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. Government sponsored entities and

   agencies

 

$

9,854

 

 

$

53

 

 

$

(46

)

 

$

9,861

 

 

$

10,823

 

 

$

6

 

 

$

(329

)

 

$

10,500

 

Residential mortgage-backed securities and

   collateralized mortgage obligations of

   government sponsored entities and

   agencies

 

 

129,797

 

 

 

1,273

 

 

 

(155

)

 

 

130,915

 

 

 

148,300

 

 

 

204

 

 

 

(4,170

)

 

 

144,334

 

Obligations of states and political

   subdivisions

 

 

679,932

 

 

 

22,244

 

 

 

(170

)

 

 

702,006

 

 

 

828,520

 

 

 

8,771

 

 

 

(4,012

)

 

 

833,279

 

Corporate debt securities

 

 

33,241

 

 

 

1,786

 

 

 

—

 

 

 

35,027

 

 

 

33,291

 

 

 

12

 

 

 

(673

)

 

 

32,630

 

Total held-to-maturity debt securities

 

$

852,824

 

 

$

25,356

 

 

$

(371

)

 

$

877,809

 

 

$

1,020,934

 

 

$

8,993

 

 

$

(9,184

)

 

$

1,020,743

 

Total debt securities

 

$

3,030,002

 

 

$

61,977

 

 

$

(4,971

)

 

$

3,087,008

 

 

$

3,162,990

 

 

$

14,854

 

 

$

(42,972

)

 

$

3,134,872

 

 

At September 30, 2019 and December 31, 2018, there were no holdings of any one issuer, other than U.S. government sponsored entities and its agencies, in an amount greater than 10% of WesBanco’s shareholders’ equity.

Equity securities, of which $8.5 million consist of investments in various mutual funds held in grantor trusts formed in connection with the Company’s deferred compensation plan, are recorded at fair value, and totaled $11.6 million and $11.7 million at September 30, 2019 and December 31, 2018, respectively.

The following table presents the amortized cost and fair value of available-for-sale and held-to-maturity debt securities by contractual maturity date at September 30, 2019.  Actual maturities will differ from contractual maturities because borrowers may have the right to call or prepay debt obligations with or without prepayment penalties.  Mortgage-backed securities and collateralized mortgage obligations are classified in the table below based on their contractual maturity date; however, principal payments are received on a monthly basis.  

 

(unaudited, in thousands)

 

Amortized Cost

 

 

Fair Value

 

Available-for-sale debt securities

 

 

 

 

 

 

 

 

Less than one year

 

$

61,932

 

 

$

61,992

 

1-5 years

 

 

116,281

 

 

 

117,740

 

5-10 years

 

 

407,897

 

 

 

416,454

 

Over 10 years

 

 

1,591,068

 

 

 

1,613,013

 

Total available-for-sale debt securities

 

$

2,177,178

 

 

$

2,209,199

 

Held-to-maturity debt securities

 

 

 

 

 

 

 

 

Less than one year

 

$

18,138

 

 

$

18,201

 

1-5 years

 

 

127,140

 

 

 

130,634

 

5-10 years

 

 

328,315

 

 

 

338,075

 

Over 10 years

 

 

379,231

 

 

 

390,899

 

Total held-to-maturity debt securities

 

$

852,824

 

 

$

877,809

 

Total debt securities

 

$

3,030,002

 

 

$

3,087,008

 

 

Securities with aggregate fair values of $2.0 billion at both September 30, 2019 and December 31, 2018 were pledged as security for public and trust funds, and securities sold under agreements to repurchase. Proceeds from the sale of available-for-sale securities were $125.2 million and $82.1 million for the nine months ended September 30, 2019 and 2018, respectively.  Net unrealized gains (losses) on available-for-sale securities included in accumulated other comprehensive income, net of tax, as of September 30, 2019 and December 31, 2018 were $24.7 million and ($21.5) million, respectively.

The following table presents the gross realized gains and losses on sales and calls of available-for-sale and held-to-maturity debt securities, as well as gains and losses on equity securities from both sales and market adjustments from the adoption of ASU 2016-01 effective January 1, 2018, for the three and nine months ended September 30, 2019 and 2018, respectively.  

 

 

 

For the Three Months

Ended September 30,

 

 

For the Nine Months

Ended September 30,

 

(unaudited, in thousands)

 

2019

 

 

2018

 

 

2019

 

 

2018

 

Debt securities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross realized gains

 

$

1,096

 

 

$

88

 

 

$

1,443

 

 

$

100

 

Gross realized losses

 

 

(741

)

 

 

(13

)

 

 

(950

)

 

 

(31

)

Net gains (losses) on debt securities

 

$

355

 

 

$

75

 

 

$

493

 

 

$

69

 

Equity securities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net unrealized gains (losses) recognized on securities still held

 

$

(120

)

 

$

11

 

 

$

748

 

 

$

330

 

Net realized gains (losses) recognized on securities sold

 

 

—

 

 

 

(2

)

 

 

2,559

 

 

 

4

 

Net gains (losses) on equity securities

 

$

(120

)

 

$

9

 

 

$

3,307

 

 

$

334

 

Net securities gains

 

$

235

 

 

$

84

 

 

$

3,800

 

 

$

403

 

 

The following tables provide information on unrealized losses on debt securities that have been in an unrealized loss position for less than twelve months and twelve months or more as of September 30, 2019 and December 31, 2018, respectively:

 

 

 

September 30, 2019

 

 

 

Less than 12 months

 

 

12 months or more

 

 

Total

 

(unaudited, dollars in thousands)

 

Fair

Value

 

 

Unrealized

Losses

 

 

# of

Securities

 

 

Fair

Value

 

 

Unrealized

Losses

 

 

# of

Securities

 

 

Fair

Value

 

 

Unrealized

Losses

 

 

# of

Securities

 

U.S. Government sponsored entities

   and agencies

 

$

5,383

 

 

$

(17

)

 

 

4

 

 

$

6,781

 

 

$

(108

)

 

 

2

 

 

$

12,164

 

 

$

(125

)

 

 

6

 

Residential mortgage-backed securities

   and collateralized mortgage obligations

   of government sponsored entities and

   agencies

 

 

347,848

 

 

 

(1,515

)

 

 

70

 

 

 

306,696

 

 

 

(2,986

)

 

 

128

 

 

 

654,544

 

 

 

(4,501

)

 

 

198

 

Commercial mortgage-backed securities

   and collateralized mortgage obligations

   of government sponsored entities and

   agencies

 

 

11,066

 

 

 

(38

)

 

 

3

 

 

 

3,729

 

 

 

(7

)

 

 

2

 

 

 

14,795

 

 

 

(45

)

 

 

5

 

Obligations of states and political

   subdivisions

 

 

12,650

 

 

 

(39

)

 

 

21

 

 

 

7,581

 

 

 

(132

)

 

 

17

 

 

 

20,231

 

 

 

(171

)

 

 

38

 

Corporate debt securities

 

 

—

 

 

 

—

 

 

 

—

 

 

 

7,896

 

 

 

(129

)

 

 

3

 

 

 

7,896

 

 

 

(129

)

 

 

3

 

Total temporarily impaired securities

 

$

376,947

 

 

$

(1,609

)

 

 

98

 

 

$

332,683

 

 

$

(3,362

)

 

 

152

 

 

$

709,630

 

 

$

(4,971

)

 

$

250

 

 

 

 

December 31, 2018

 

 

 

Less than 12 months

 

 

12 months or more

 

 

Total

 

(unaudited, dollars in thousands)

 

Fair

Value

 

 

Unrealized

Losses

 

 

# of

Securities

 

 

Fair

Value

 

 

Unrealized

Losses

 

 

# of

Securities

 

 

Fair

Value

 

 

Unrealized

Losses

 

 

# of

Securities

 

U.S. Treasury

 

$

9,972

 

 

$

(7

)

 

 

1

 

 

$

—

 

 

$

—

 

 

 

—

 

 

$

9,972

 

 

$

(7

)

 

 

1

 

U.S. Government sponsored entities

   and agencies

 

 

18,926

 

 

 

(148

)

 

 

8

 

 

 

76,385

 

 

 

(1,937

)

 

 

14

 

 

 

95,311

 

 

 

(2,085

)

 

 

22

 

Residential mortgage-backed securities

   and collateralized mortgage obligations

   of government sponsored entities and

   agencies

 

 

285,534

 

 

 

(1,862

)

 

 

44

 

 

 

922,698

 

 

 

(29,829

)

 

 

291

 

 

 

1,208,232

 

 

 

(31,691

)

 

 

335

 

Commercial mortgage-backed securities

   and collateralized mortgage obligations

   of government sponsored entities and

   agencies

 

 

9,186

 

 

 

(18

)

 

 

6

 

 

 

111,068

 

 

 

(2,945

)

 

 

14

 

 

 

120,254

 

 

 

(2,963

)

 

 

20

 

Obligations of states and political

   subdivisions

 

 

104,469

 

 

 

(439

)

 

 

207

 

 

 

303,681

 

 

 

(4,555

)

 

 

513

 

 

 

408,150

 

 

 

(4,994

)

 

 

720

 

Corporate debt securities

 

 

38,791

 

 

 

(898

)

 

 

18

 

 

 

11,452

 

 

 

(334

)

 

 

5

 

 

 

50,243

 

 

 

(1,232

)

 

 

23

 

Total temporarily impaired securities

 

$

466,878

 

 

$

(3,372

)

 

 

284

 

 

$

1,425,284

 

 

$

(39,600

)

 

 

837

 

 

$

1,892,162

 

 

$

(42,972

)

 

 

1,121

 

 

Unrealized losses on debt securities in the tables represent temporary fluctuations resulting from changes in market rates in relation to fixed yields.  Unrealized losses in the available-for-sale portfolio are accounted for as an adjustment, net of taxes, to other comprehensive income in shareholders’ equity.

WesBanco does not believe the securities presented above are impaired due to reasons of credit quality, as substantially all debt securities are rated above investment grade and all are paying principal and interest according to their contractual terms. WesBanco does not intend to sell, nor is it more likely than not that it will be required to sell, loss position securities prior to recovery of their cost; therefore, management believes the unrealized losses detailed above are temporary and no impairment loss relating to these securities has been recognized.

Securities that do not have readily determinable fair values and for which WesBanco does not exercise significant influence are carried at cost.  Cost method investments consist primarily of FHLB of Pittsburgh, Cincinnati and Indianapolis stock totaling $56.3 million and $50.8 million at September 30, 2019 and December 31, 2018, respectively, and are included in other assets in the Consolidated Balance Sheets.  Cost method investments are evaluated for impairment whenever events or circumstances suggest that their carrying value may not be recoverable.