(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☑ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (section 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☑ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined by Rule 12b-2 of the Exchange Act). Yes ☐ No ☑

As of July 24, ~~2019,~~2020, there were ~~54,697,199~~67,211,192 shares of ~~WesBanco,~~Wesbanco, Inc. common stock, $2.0833 par value, outstanding.


Item No.	ITEM	Page No.	ITEM	Page No.

	PART I - FINANCIAL INFORMATION		PART I - FINANCIAL INFORMATION
1	Financial Statements	2	Financial Statements	2
	Consolidated Balance Sheets at June 30, 2019 (unaudited) and December 31, 2018	2	Consolidated Balance Sheets at June 30, 2020 (unaudited) and December 31, 2019	2
	Consolidated Statements of Comprehensive Income for the three and six months ended June 30, 2019 and 2018 (unaudited)	3	Consolidated Statements of Comprehensive Income for the three and six months ended June 30, 2020 and 2019 (unaudited)	3
	Consolidated Statements of Changes in Shareholders' Equity for the three and six months ended June 30, 2019 and 2018 (unaudited)	4	Consolidated Statements of Changes in Shareholders' Equity for the three and six months ended June 30, 2020 and 2019 (unaudited)	4
	Consolidated Statements of Cash Flows for the six months ended June 30, 2019 and 2018 (unaudited)	5	Consolidated Statements of Cash Flows for the six months ended June 30, 2020 and 2019 (unaudited)	5
	Notes to Consolidated Financial Statements (unaudited)	6	Notes to Consolidated Financial Statements (unaudited)	6

2	Management’s Discussion and Analysis of Financial Condition and Results of Operations	30	Management’s Discussion and Analysis of Financial Condition and Results of Operations	36

3	Quantitative and Qualitative Disclosures About Market Risk	45	Quantitative and Qualitative Disclosures About Market Risk	60

4	Controls and Procedures	47	Controls and Procedures	62

	PART II – OTHER INFORMATION		PART II – OTHER INFORMATION
1	Legal Proceedings	48	Legal Proceedings	63

1A			Risk Factors	63

2	Unregistered Sales of Equity Securities and Use of Proceeds	48	Unregistered Sales of Equity Securities and Use of Proceeds	64

6	Exhibits	49	Exhibits	65

	Signatures	50	Signatures	66

	June 30,			December 31,			June 30,			December 31,
(unaudited, in thousands, except shares)	2019			2018			2020			2019
ASSETS
Cash and due from banks, including interest bearing amounts of $36,390 and $44,536, respectively	$	194,355		$	169,186
Cash and due from banks, including interest bearing amounts of $671,312 and $51,891, respectively							$	890,334		$	234,796
Securities:
Equity securities, at fair value		11,817			11,737			12,277			12,343
Available-for-sale debt securities, at fair value		2,129,284			2,114,129			2,073,949			2,393,558
Held-to-maturity debt securities (fair values of $921,534 and $1,020,743, respectively)		900,605			1,020,934
Held-to-maturity debt securities (fair values of $802,666 and $874,523, respectively)								766,416			851,753
Allowance for credit losses, held-to-maturity debt securities								(817	)		—
Net held-to-maturity debt securities								765,599			851,753
Total securities		3,041,706			3,146,800			2,851,825			3,257,654
Loans held for sale		18,649			8,994			53,324			43,013
Portfolio loans, net of unearned income		7,737,854			7,656,281			11,074,143			10,267,985
Allowance for loan losses		(50,859	)		(48,948	)
Allowance for credit losses - loans								(168,475	)		(52,429	)
Net portfolio loans		7,686,995			7,607,333			10,905,668			10,215,556
Premises and equipment, net		179,866			166,925			255,306			261,014
Accrued interest receivable		38,450			38,853			59,151			43,648
Goodwill and other intangible assets, net		914,678			918,850			1,166,853			1,149,153
Bank-owned life insurance		227,976			225,317			303,022			299,516
Other assets		191,978			176,374			269,912			215,762
Total Assets	$	12,494,653		$	12,458,632		$	16,755,395		$	15,720,112
LIABILITIES
Deposits:
Non-interest bearing demand	$	2,481,065		$	2,441,041		$	4,067,903		$	3,178,270
Interest bearing demand		2,079,795			2,146,508			2,596,132			2,316,855
Money market		1,098,917			1,142,925			1,610,248			1,518,314
Savings deposits		1,670,035			1,645,549			2,103,154			1,934,647
Certificates of deposit		1,365,116			1,455,610			1,809,016			2,055,920
Total deposits		8,694,928			8,831,633			12,186,453			11,004,006
Federal Home Loan Bank borrowings		1,121,283			1,054,174			1,129,631			1,415,615
Other short-term borrowings		296,148			290,522			390,777			282,362
Subordinated debt and junior subordinated debt		156,534			189,842			192,080			199,869
Total borrowings		1,573,965			1,534,538			1,712,488			1,897,846
Accrued interest payable		6,559			4,627			6,040			8,077
Other liabilities		145,085			109,007			280,893			216,262
Total Liabilities		10,420,537			10,479,805			14,185,874			13,126,191
SHAREHOLDERS' EQUITY
Preferred stock, no par value; 1,000,000 shares authorized; none outstanding		—			—
Common stock, $2.0833 par value; 100,000,000 shares authorized in 2019 and 2018, respectively; 54,697,251 and 54,604,294 shares issued, respectively; 54,697,199 and 54,598,134 shares outstanding, respectively		113,952			113,758
Preferred stock, no par value; 1,000,000 shares authorized; NaN outstanding								—			—
Common stock, $2.0833 par value; 100,000,000 shares authorized in 2020 and 2019, respectively; 68,078,116 and 68,078,116 shares issued, respectively; 67,211,192 and 67,824,428 shares outstanding, respectively								141,827			141,827
Capital surplus		1,168,212			1,166,701			1,633,079			1,636,966
Retained earnings		788,900			737,581			782,990			824,694
Treasury stock (52 and 6,160 shares - at cost, respectively)		(2	)		(274	)
Accumulated other comprehensive income (loss)		4,113			(37,871	)
Treasury stock (866,924 and 253,688 shares - at cost, respectively)								(27,518	)		(9,463	)
Accumulated other comprehensive income								40,516			1,201
Deferred benefits for directors		(1,059	)		(1,068	)		(1,373	)		(1,304	)
Total Shareholders' Equity		2,074,116			1,978,827			2,569,521			2,593,921
Total Liabilities and Shareholders' Equity	$	12,494,653		$	12,458,632		$	16,755,395		$	15,720,112

	For the Three Months Ended June 30,				For the Six Months Ended June 30,				For the Three Months Ended June 30,					For the Six Months Ended June 30,
(unaudited, in thousands, except shares and per share amounts)	2019		2018		2019		2018		2020			2019		2020		2019
INTEREST AND DIVIDEND INCOME
Loans, including fees	$	96,415	$	78,538	$	191,917	$	147,671	$	115,068		$	96,415	$	234,571	$	191,917
Interest and dividends on securities:
Taxable		16,444		14,194		33,175		25,738		14,047			16,444		31,034		33,175
Tax-exempt		5,142		5,055		10,684		9,890		4,302			5,142		8,758		10,684
Total interest and dividends on securities		21,586		19,249		43,859		35,628		18,349			21,586		39,792		43,859
Other interest income		1,542		1,101		2,820		1,904		1,277			1,542		2,779		2,820
Total interest and dividend income		119,543		98,888		238,596		185,203		134,694			119,543		277,142		238,596
INTEREST EXPENSE
Interest bearing demand deposits		4,314		3,150		8,259		5,673		1,350			4,314		4,745		8,259
Money market deposits		2,009		1,093		3,908		1,972		879			2,009		3,231		3,908
Savings deposits		678		227		1,200		416		297			678		1,220		1,200
Certificates of deposit		4,098		2,977		8,001		5,513		3,514			4,098		7,568		8,001
Total interest expense on deposits		11,099		7,447		21,368		13,574		6,040			11,099		16,764		21,368
Federal Home Loan Bank borrowings		6,287		5,953		12,624		10,451		7,293			6,287		15,525		12,624
Other short-term borrowings		1,483		973		3,039		1,532		279			1,483		1,149		3,039
Subordinated debt and junior subordinated debt		2,214		2,168		4,743		4,110		2,069			2,214		4,530		4,743
Total interest expense		21,083		16,541		41,774		29,667		15,681			21,083		37,968		41,774
NET INTEREST INCOME		98,460		82,347		196,822		155,536		119,013			98,460		239,174		196,822
Provision for credit losses		2,747		1,708		5,254		3,876		61,841			2,747		91,661		5,254
Net interest income after provision for credit losses		95,713		80,639		191,568		151,660		57,172			95,713		147,513		191,568
NON-INTEREST INCOME
Trust fees		6,339		5,752		13,454		12,255		6,202			6,339		13,154		13,454
Service charges on deposits		6,197		5,146		12,747		9,969		4,323			6,197		10,940		12,747
Electronic banking fees		7,154		5,728		13,046		10,558		4,066			7,154		8,320		13,046
Net securities brokerage revenue		1,973		1,809		3,833		3,479		1,384			1,973		3,063		3,833
Bank-owned life insurance		1,340		1,128		2,659		3,884		1,752			1,340		3,521		2,659
Mortgage banking income		1,618		1,670		2,674		2,776		7,531			1,618		8,807		2,674
Net securities gains		2,909		358		3,566		319		1,299			2,909		2,790		3,566
Net gain on other real estate owned and other assets		376		229		512		491
Net (loss) gain on other real estate owned and other assets										(66	)		376		103		512
Other income		3,250		1,588		6,438		3,760		6,369			3,250		10,171		6,438
Total non-interest income		31,156		23,408		58,929		47,491		32,860			31,156		60,869		58,929
NON-INTEREST EXPENSE
Salaries and wages		31,646		26,872		62,585		51,878		36,773			31,646		75,683		62,585
Employee benefits		9,705		7,965		19,694		14,877		10,138			9,705		20,511		19,694
Net occupancy		5,385		4,103		10,951		8,759		6,634			5,385		13,717		10,951
Equipment		4,818		4,095		9,651		8,044		5,722			4,818		11,761		9,651
Marketing		1,254		1,405		2,497		2,521		1,567			1,254		2,705		2,497
FDIC insurance		1,155		868		2,508		1,526		2,395			1,155		4,508		2,508
Amortization of intangible assets		2,465		1,312		4,978		2,397		3,365			2,465		6,739		4,978
Restructuring and merger-related expense		81		5,412		3,188		5,657		468			81		5,633		3,188
Other operating expenses		15,443		11,511		30,333		22,455		18,440			15,443		35,578		30,333
Total non-interest expense		71,952		63,543		146,385		118,114		85,502			71,952		176,835		146,385
Income before provision for income taxes		54,917		40,504		104,112		81,037		4,530			54,917		31,547		104,112
Provision for income taxes		10,103		7,335		18,961		14,339		42			10,103		3,663		18,961
NET INCOME	$	44,814	$	33,169	$	85,151	$	66,698	$	4,488		$	44,814	$	27,884	$	85,151
EARNINGS PER COMMON SHARE
Basic	$	0.82	$	0.71	$	1.56	$	1.47	$	0.07		$	0.82	$	0.41	$	1.56
Diluted	$	0.82	$	0.71	$	1.56	$	1.47	$	0.07		$	0.82	$	0.41	$	1.56
AVERAGE COMMON SHARES OUTSTANDING
Basic		54,628,029		46,498,305		54,613,346		45,281,264		67,104,628			54,628,029		67,295,589		54,613,346
Diluted		54,733,521		46,639,780		54,724,209		45,417,010		67,181,755			54,733,521		67,410,460		54,724,209
DIVIDENDS DECLARED PER COMMON SHARE	$	0.31	$	0.29	$	0.62	$	0.58	$	0.32		$	0.31	$	0.64	$	0.62

COMPREHENSIVE INCOME	$	67,025	$	26,893	$	127,135	$	45,904	$	3,863		$	67,025	$	67,199	$	127,135

	For the Three Months Ended June 30, 2019 and 2018																							For the Three Months Ended June 30, 2020 and 2019
															Accumulated																							Accumulated
	Common Stock														Other			Deferred						Common Stock														Other			Deferred
(unaudited, in thousands, except	Shares					Capital			Retained			Treasury			Comprehensive			Benefits for						Shares					Capital			Retained			Treasury			Comprehensive			Benefits for
shares and per share amounts)	Outstanding			Amount		Surplus			Earnings			Stock			Income (Loss)			Directors			Total			Outstanding			Amount		Surplus			Earnings			Stock			Income (Loss)			Directors			Total
March 31, 2020																									67,058,155		$	141,827	$	1,638,122		$	800,064		$	(33,714	)	$	41,141		$	(1,380	)	$	2,586,060
Net income																									—			—		—			4,488			—			—			—			4,488
Other comprehensive loss																									—			—		—			—			—			(625	)		—			(625	)
Comprehensive income																									—			—		—			—			—			—			—			3,863
Common dividends declared ($0.32 per share)																									—			—		—			(21,562	)		—			—			—			(21,562	)
Treasury shares acquired																									(23,887	)		—		117			—			(372	)		—			—			(255	)
Restricted stock granted																									176,924			—		(6,568	)		—			6,568			—			—			—
Stock compensation expense																									—			—		1,357			—			—			—			—			1,357
Deferred benefits for directors- net																									—			—		51			—			—			—			7			58
June 30, 2020																									67,211,192		$	141,827	$	1,633,079		$	782,990		$	(27,518	)	$	40,516		$	(1,373	)	$	2,569,521

March 31, 2019		54,599,127		$	113,758	$	1,167,761		$	761,002		$	(229	)	$	(18,098	)	$	(1,055	)	$	2,023,139			54,599,127		$	113,758	$	1,167,761		$	761,002		$	(229	)	$	(18,098	)	$	(1,055	)	$	2,023,139
Net income		—			—		—			44,814			—			—			—			44,814			—			—		—			44,814			—			—			—			44,814
Other comprehensive income		—			—		—			—			—			22,211			—			22,211			—			—		—			—			—			22,211			—			22,211
Comprehensive income		—			—		—			—			—			—			—			67,025			—			—		—			—			—			—			—			67,025
Common dividends declared ($0.31 per share)		—			—		—			(16,916	)		—			—			—			(16,916	)		—			—		—			(16,916	)		—			—			—			(16,916	)
Treasury shares acquired		(19,378	)		—		128			—			(717	)		—			—			(589	)		(19,378	)		—		128			—			(717	)		—			—			(589	)
Stock options exercised		5,000			8		37			—			56			—			—			101			5,000			8		37			—			56			—			—			101
Restricted stock granted		112,450			186		(1,074	)		—			888			—			—			—			112,450			186		(1,074	)		—			888			—			—			—
Stock compensation expense		—			—		1,364			—			—			—			—			1,364			—			—		1,364			—			—			—			—			1,364
Deferred benefits for directors- net		—			—		(4	)		—			—			—			(4	)		(8	)		—			—		(4	)		—			—			—			(4	)		(8	)
June 30, 2019		54,697,199		$	113,952	$	1,168,212		$	788,900		$	(2	)	$	4,113		$	(1,059	)	$	2,074,116			54,697,199		$	113,952	$	1,168,212		$	788,900		$	(2	)	$	4,113		$	(1,059	)	$	2,074,116

March 31, 2018		44,060,957		$	91,793	$	686,169		$	673,174		$	—		$	(47,076	)	$	(1,034	)	$	1,403,026
																								For the Six Months Ended June 30, 2020 and 2019
																																						Accumulated
																								Common Stock														Other			Deferred
(unaudited, in thousands, except																								Shares					Capital			Retained			Treasury			Comprehensive			Benefits for
shares and per share amounts)																								Outstanding			Amount		Surplus			Earnings			Stock			Income (Loss)			Directors			Total
December 31, 2019																									67,824,428		$	141,827	$	1,636,966		$	824,694		$	(9,463	)	$	1,201		$	(1,304	)	$	2,593,921
Net income		—			—		—			33,169			—			—			—			33,169			—			—		—			27,884			—			—			—			27,884
Other comprehensive loss		—			—		—			—			—			(6,276	)		—			(6,276	)
Other comprehensive income																									—			—		—			—			—			39,315			—			39,315
Comprehensive income		—			—		—			—			—			—			—			26,893			—			—		—			—			—			—			—			67,199
Common dividends declared ($0.29 per share)		—			—		—			(13,523	)		—			—			—			(13,523	)
Shares issued for acquisition		2,498,761			5,206		102,141			—			—			—			—			107,347
Common dividends declared ($0.64 per share)																									—			—		—			(42,997	)		—			—			—			(42,997	)
Adoption of accounting standard																									—			—		—			(26,591	)		—			—			—			(26,591	)
Treasury shares acquired		(15,159	)		—		34			—			(714	)		—			—			(680	)		(809,899	)		—		117			—			(25,344	)		—			—			(25,227	)
Stock options exercised		19,075			32		392			—			159			—			—			583			19,739			—		(276	)		—			721			—			—			445
Restricted stock granted		79,616			166		(166	)		—			—			—			—			—			176,924			—		(6,568	)		—			6,568			—			—			—
Stock compensation expense		—			—		929			—			—			—			—			929			—			—		2,727			—			—			—			—			2,727
Deferred benefits for directors- net		—			—		(461	)		—			—			—			(8	)		(469	)		—			—		113			—			—			—			(69	)		44
June 30, 2018		46,643,250		$	97,197	$	789,038		$	692,820		$	(555	)	$	(53,352	)	$	(1,042	)	$	1,524,106

June 30, 2020																									67,211,192		$	141,827	$	1,633,079		$	782,990		$	(27,518	)	$	40,516		$	(1,373	)	$	2,569,521
	For the Six Months Ended June 30, 2019 and 2018
December 31, 2018		54,598,134		$	113,758	$	1,166,701		$	737,581		$	(274	)	$	(37,871	)	$	(1,068	)	$	1,978,827			54,598,134		$	113,758	$	1,166,701		$	737,581		$	(274	)	$	(37,871	)	$	(1,068	)	$	1,978,827
Net income		—			—		—			85,151			—			—			—			85,151			—			—		—			85,151			—			—			—			85,151
Other comprehensive income		—			—		—			—			—			41,984			—			41,984			—			—		—			—			—			41,984			—			41,984
Comprehensive income		—			—		—			—			—			—			—			127,135			—			—		—			—			—			—			—			127,135
Common dividends declared ($0.62 per share)		—			—		—			(33,832	)		—			—			—			(33,832	)		—			—		—			(33,832	)		—			—			—			(33,832	)
Treasury shares acquired		(19,385	)		—		128			—			(717	)		—			—			(589	)		(19,385	)		—		128			—			(717	)		—			—			(589	)
Stock options exercised		6,000			8		12			—			101			—			—			121			6,000			8		12			—			101			—			—			121
Restricted stock granted		112,450			186		(1,074	)		—			888			—			—			—			112,450			186		(1,074	)		—			888			—			—
Stock compensation expense		—			—		2,439			—			—			—			—			2,439			—			—		2,439			—			—			—			—			2,439
Deferred benefits for directors- net		—			—		6			—			—			—			9			15			—			—		6			—			—			—			9			15
June 30, 2019		54,697,199		$	113,952	$	1,168,212		$	788,900		$	(2	)	$	4,113		$	(1,059	)	$	2,074,116			54,697,199		$	113,952	$	1,168,212		$	788,900		$	(2	)	$	4,113		$	(1,059	)	$	2,074,116

December 31, 2017		44,043,244		$	91,756	$	684,730		$	651,357		$	—		$	(31,495	)	$	(1,027	)	$	1,395,321
Net income		—			—		—			66,698			—			—			—			66,698
Other comprehensive loss		—			—		—			—			—			(20,794	)		—			(20,794	)
Comprehensive income		—			—		—			—			—			—			—			45,904
Common dividends declared ($0.58 per share)		—			—		—			(26,298	)		—			—			—			(26,298	)
Adoption of accounting standard ASU 2016-01		—			—		—			1,063			—			(1,063	)		—			—
Shares issued for acquisition		2,498,761			5,206		102,141			—			—			—			—			107,347
Treasury shares acquired		(15,159	)		—		34			—			(714	)		—			—			(680	)
Stock options exercised		36,788			69		915			—			159			—			—			1,143
Restricted stock granted		79,616			166		(166	)		—			—			—			—			—
Stock compensation expense		—			—		1,838			—			—			—			—			1,838
Deferred benefits for directors- net		—			—		(454	)		—			—			—			(15	)		(469	)
June 30, 2018		46,643,250		$	97,197	$	789,038		$	692,820		$	(555	)	$	(53,352	)	$	(1,042	)	$	1,524,106

	For the Six Months Ended June 30,						For the Six Months Ended June 30,
(unaudited, in thousands)	2019			2018			2020			2019
NET CASH PROVIDED BY OPERATING ACTIVITIES	$	76,370		$	66,575		$	89,394		$	76,370
INVESTING ACTIVITIES
Net increase in loans held for investment		(71,557	)		(11,819	)		(853,709	)		(71,557	)
Available-for-sale debt securities:
Proceeds from sales		66,095			81,521			226,099			66,095
Proceeds from maturities, prepayments and calls		174,676			114,206			353,835			174,676
Purchases of securities		(138,310	)		(625,395	)		(212,777	)		(138,310	)
Held-to-maturity debt securities:
Proceeds from maturities, prepayments and calls		57,383			37,842			101,816			57,383
Purchases of securities		(6,961	)		(44,656	)		(18,245	)		(6,961	)
Equity securities:
Proceeds from sales		3,567			827			50			3,567
Proceeds from bank-owned life insurance		—			4,772
Proceeds from bank owned life insurance								10			—
Purchases of premises and equipment – net		(6,064	)		(845	)		(4,861	)		(6,064	)
Net cash received from acquisition		—			86,149
Sale of portfolio loans- net		—			12,996
Net cash provided by (used in) investing activities		78,829			(344,402	)
Sale of portfolio loans								37,195			—
Net cash (used in) provided by investing activities								(370,587	)		78,829
FINANCING ACTIVITIES
(Decrease) increase in deposits		(135,689	)		36,045
Increase (decrease) in deposits								1,188,717			(135,689	)
Proceeds from Federal Home Loan Bank borrowings		285,000			575,000			475,000			285,000
Repayment of Federal Home Loan Bank borrowings		(218,052	)		(327,142	)		(761,098	)		(218,052	)
Increase in other short-term borrowings		5,626			67,103			115,915			5,626
Principal repayments of finance lease obligations		(199	)		(189	)		(208	)		(199	)
Decrease in federal funds purchased		—			(3,000	)		(7,500	)		—
Repayment of junior subordinated debt		(33,506	)		(8,240	)		(6,702	)		(33,506	)
Dividends paid to common shareholders		(32,742	)		(24,226	)		(42,450	)		(32,742	)
Issuance of common stock		71			1,035			—			71
Treasury shares sold - net		(539	)		(572	)
Net cash (used in) provided by financing activities		(130,030	)		315,814
Net increase in cash and cash equivalents		25,169			37,987
Cash and cash equivalents at beginning of the period		169,186			117,572
Cash and cash equivalents at end of the period	$	194,355		$	155,559
Treasury shares purchased - net								(24,943	)		(539	)
Net cash provided by (used in) financing activities								936,731			(130,030	)
Net increase in cash, cash equivalents and restricted cash								655,538			25,169
Cash, cash equivalents and restricted cash at beginning of the period								234,796			169,186
Cash, cash equivalents and restricted cash at end of the period							$	890,334		$	194,355
SUPPLEMENTAL DISCLOSURES
Interest paid on deposits and other borrowings	$	40,501		$	29,791		$	45,965		$	40,501
Income taxes paid		17,650			10,000			1,125			17,650
Transfers of loans to other real estate owned		637			229			263			637
Transfers of loans to held for sale		—			12,996
Non-cash transactions related to FTSB acquisition		—			107,347
Transfers of portfolio loans to loans held for sale								37,195			—
Transfer of held-to-maturity debt securities to available-for-sale debt securities		67,393			—			—			67,393
Right of use assets obtained in exchange for lease obligations		19,827			—			—			19,827

Basis of presentation — The accompanying unaudited interim financial statements of ~~WesBanco,~~Wesbanco, Inc. and its consolidated subsidiaries (“~~WesBanco”~~Wesbanco”) have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information and the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements and should be read in conjunction with our Annual Report on Form 10-K for the year ended December 31, ~~2018.~~2019.

~~WesBanco’s~~Wesbanco’s interim financial statements have been prepared following the significant accounting policies disclosed in Note 1 of the Notes to the Consolidated Financial Statements of its ~~2018~~2019 Annual Report on Form 10-K filed with the Securities and Exchange Commission. In the opinion of management, the accompanying interim financial information reflects all adjustments, including normal recurring adjustments, necessary to present fairly ~~WesBanco’s~~Wesbanco’s financial position and results of operations for each of the interim periods presented. Certain prior period amounts have been reclassified to conform to the current period presentation. Such reclassifications had no impact on ~~WesBanco’s~~Wesbanco’s net income and stockholders’ equity. Results of operations for interim periods are not necessarily indicative of the results of operations that may be expected for a full year.

Loans and Loans Held for Sale — Loans originated by Wesbanco are reported at the principal amount outstanding, net of unearned income including credit valuation adjustments, unamortized deferred loan fee income and loan origination costs. Interest is accrued as earned on loans except where doubt exists as to collectability, in which case accrual of income is discontinued. Loans originated and intended for sale are carried, in aggregate, at the estimated market value as Wesbanco elected the fair value option on October 1, 2017.

Loan origination fees and direct costs are deferred and accreted or amortized into interest income, as an adjustment to the yield, over the life of the loan using the level yield method. When a loan is paid off, the remaining unaccreted or unamortized net origination fees or costs are immediately recognized into income.

Loans are generally placed on non-accrual when they are 90 days past due, unless the loan is well-secured and in the process of collection. Loans may be returned to accrual status when a borrower has resumed paying principal and interest for a sustained period of at least six months and Wesbanco is reasonably assured of collecting the remaining contractual principal and interest. Loans are returned to accrual status at an amount equal to the principal balance of the loan at the time of non-accrual status less any payments applied to principal during the non-accrual period. Loans are reported as a troubled debt restructuring when Wesbanco for economic or legal reasons related to a borrower’s financial difficulties grants a concession to the borrower that it would not otherwise consider. Refer to the “Troubled Debt Restructuring” policy below for additional detail.

A loan is considered non-performing, based on current information and events, if it is probable that Wesbanco will be unable to collect the payments of principal and interest when due according to the contractual terms of the loan agreement. Non-performing loans include all non-accrual loans and troubled debt restructurings. Wesbanco recognizes interest income on non-accrual loans on the cash basis only if recovery of principal is reasonably assured.

Consumer loans are charged down to the net realizable value at 120 days past due for closed-end loans and 180 days past due for open-end revolving lines of credit. Residential real estate loans are charged down to the net realizable value of the collateral at 180 days past due. Commercial loans are charged down to the net realizable value when it is determined that Wesbanco will be unable to collect the principal amount in full. Loans are reclassified to other assets at the net realizable value when foreclosure or repossession of the collateral occurs. Refer to the “Other Real Estate Owned and Repossessed Assets” policy below for additional detail.

On March 27, 2020, the Coronavirus Aid, Relief and Economic Security Act ("CARES Act") was signed into law, which, in part, established a loan program administered through the U.S. Small Business Administration ("SBA"), referred to as the Paycheck Protection Program ("PPP"). Under the PPP, small businesses, sole proprietorships, independent contractors, non-profit organizations and self-employed individuals could apply for loans from existing SBA lenders and other approved regulated lenders that enroll in the program, subject to numerous limitations and eligibility criteria. Wesbanco is participating as a lender in the PPP program. All loans have a 1% interest rate and Wesbanco earns a fee that is based upon a tiered schedule corresponding with the amount of the loan to the borrower, which is deferred and recognized over the life of the loan. Based upon the borrower meeting certain criteria as defined by the CARES act, the loan may be forgiven by the SBA. Wesbanco reports these loans at their principal amount outstanding, net of unearned income, unamortized deferred loan fee income and loan origination costs. Interest is accrued as earned and loan origination fees and direct costs are deferred and accreted or amortized into interest income, as an adjustment to the yield, over the life of the loan using the level yield method. When a PPP loan is paid off or forgiven by the SBA, the remaining unaccreted or unamortized net origination fees or costs are immediately recognized into income

Troubled Debt Restructurings (“TDR”) — A restructuring of a loan constitutes a TDR if the creditor, for economic or legal reasons related to the debtor's financial difficulties, grants a concession to the debtor that it would not otherwise consider. The determination of whether a concession has been granted includes an evaluation of the debtor’s ability to access funds at a market rate for debt with similar risk characteristics and among other things, the significance of the modification relative to unpaid principal or collateral value of the debt, and/or the significance of a delay in the timing of payments relative to the frequency of payments, original maturity date, or the expected duration of the loan. The most common concessions granted generally include one or more modifications to the terms of the debt such as a reduction in the interest rate below the prevailing market rate for the remaining life of the debt, an extension of the maturity date at an interest rate lower than the prevailing market rate for new debt with similar risk, or reduction of the unpaid principal or interest. Additionally, all consumer bankruptcies are considered TDR; all TDRs are considered nonperforming loans.

When determining whether a debtor is experiencing financial difficulties, consideration is given to any known default on any of its debt or whether it is probable that the debtor would be in payment default in the foreseeable future without the modification. Other indicators of financial

difficulty include whether the debtor has declared or is in the process of declaring bankruptcy, the debtor’s ability to continue as a going concern, or the debtor’s projected cash flow to service its debt (including principal & interest) in accordance with the contractual terms for the foreseeable future, without a modification. If the payment of principal at original maturity is primarily dependent on the value of collateral, the current value of that collateral is considered in determining whether the principal will be paid.

The restructuring of a loan does not increase the allowance or provision for credit losses unless the loan is extended or the loans are commercial loans that are individually evaluated for impairment, in which case a specific reserve is established pursuant to GAAP. Portfolio segment loss history is the primary factor for establishing the allowance for residential real estate, home equity and consumer loans.

Non-accrual loans that are restructured remain on non-accrual, but may move to accrual status after they have performed according to the restructured terms for a period of time. TDRs on accrual status generally remain on accrual as long as they continue to perform in accordance with their modified terms. TDRs may also be placed on non-accrual if they do not perform in accordance with the restructured terms. Loans may be removed from TDR status after they have performed according to the renegotiated terms for a period of time if the interest rate under the modified terms is at or above market, or if the loan returns to its original terms.

Section 4013 of the CARES Act, “Temporary Relief From Troubled Debt Restructurings,” allows financial institutions the option to temporarily suspend certain requirements under U.S. GAAP related to TDRs for a limited period of time during the COVID-19 pandemic. On April 7, 2020, the joint federal regulatory agencies issued a statement, “Interagency Statement on Loan Modifications and Reporting for Financial Institutions Working With Customers Affected by the Coronavirus (Revised)” (“Interagency Statement)”), which further discusses loan modifications related to COVID-19. Wesbanco has extended up to a 180 day delay in loan principal and/or interest payments for customers affected by 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 other requirements noted in the regulatory agencies’ revised statement. Based on the CARES Act provisions and the guidance noted above, Wesbanco does not classify the COVID-19 loan modifications as TDRs, nor are the customers considered past due with regards to their delayed payments to the extent they meet the criteria. Upon exiting the loan modification deferral program, the measurement of loan delinquency will resume where it left off upon entry into the program.

Acquired Loans - Loans acquired in connection with acquisitions are recorded at their acquisition-date fair value with no carryover of related allowance for credit losses. Acquired loans are classified into two categories; purchased financial instruments with more than insignificant credit deterioration (“PCD”) loans, and loans with insignificant credit deterioration (“non-PCD”). PCD loans are defined as a loan or group of loans that have experienced more than insignificant credit deterioration since origination. Non-PCD loans will have an allowance established on acquisition date, which is recognized in the current period provision for credit losses. For PCD loans, an allowance is recognized on day 1 by adding it to the fair value of the loan, which is the “Day 1 amortized cost”. There is no credit loss expense recognized on PCD loans because the initial allowance is established by grossing-up the amortized cost of the PCD loan. Determining the fair value of the acquired loans involves estimating the principal and interest cash flows expected to be collected on the loans and discounting those cash flows at a market rate of interest. Management considers a number of factors in evaluating the acquisition-date fair value including the remaining life of the acquired loans, delinquency status, estimated prepayments, payment options and other loan features, internal risk grade, estimated value of the underlying collateral and interest rate environment.

PCD loans are accounted for in accordance with Accounting Standards Codification (“ASC”) 326-20, Financial Instruments – Credit Losses – Measure at Amortized Cost, if, at acquisition, the loan or pool of loans has experienced more-than-insignificant credit deterioration since origination. At acquisition, Wesbanco considers several factors as indicators that an acquired loan or pool of loans has experienced more-than-insignificant credit deterioration. These factors include loans 30 days or more past due, loans with an internal risk grade of below average or lower, loans classified as non-accrual by the acquired institution, the materiality of the credit and loans that have been previously modified in a troubled debt restructuring.

Under the ASC 326-20, a group of loans with similar risk characteristics can be assessed to determine if the pool of loans is PCD. However, if a loan does not have similar risk characteristics as any other acquired loan, the loan is individually assessed to determine if it is PCD. In addition, the initial allowance related to acquired loans can be estimated for a pool of loans if the loans have similar risk characteristics. Even if the loans were individually assessed to determine if they were PCD, they can be grouped together in the initial allowance calculation if they share similar risk characteristics. Since Wesbanco uses the discounted cash flow (DCF) approach, the initial allowance calculation for PCD loans is calculated as the expected contractual cash shortfalls, discounted at the rate that equates the present value of estimated future cash flows expected to be collected with the purchase price of the loan(s). If a PCD loan has an unfunded commitment at acquisition, the initial allowance for credit losses calculation reflects only the expected credit losses associated with the funded portion of the PCD loan. Expected credit losses associated with the unfunded commitment are included in the initial measurement of the commitment.

For PCD loans, the non-credit discount or premium is allocated to individual loans as determined by the difference between the loan’s amortized cost basis and the unpaid principal balance. The non-credit premium or discount is recognized into interest income on a level yield basis over the remaining expected life of the loan. For non-PCD loans, the interest and credit discount or premium is allocated to individual loans as determined by the difference between the loan’s amortized cost basis and the unpaid principal balance. The premium or discount is recognized into interest income on a level yield basis over the remaining expected life of the loan.

Allowance for Credit Losses — The allowance for credit losses reduces the loan portfolio to the net amount expected to be collected and establishes an allowance for unfunded loan commitments. The allowance for credit losses represents the lifetime expected losses for all loans and unfunded loan commitments at the initial recognition date. The allowance incorporates forward-looking information and applies a reversion methodology beyond the reasonable and supportable forecast. The allowance is increased by a provision charged to operating expense and reduced by charge-offs, net of recoveries. Management evaluates the appropriateness of the allowance at least quarterly. This evaluation is inherently subjective as it requires material estimates that may be susceptible to significant change from period to period.

The allowance for credit loss calculation is based on the loan’s amortized cost basis, which is comprised of the unpaid principal balance of the loan, deferred loan fees (costs), acquired premium (discount) less write-downs. 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 a loan is placed on non-accrual. Wesbanco made an accounting policy election to reverse accrued interest deemed uncollectible as a reversal of interest income. However, Wesbanco is reserving for accrued interest on loan modifications under the CARES Act due to nature and timing of these deferrals.

The allowance for credit losses reflects the risk of loss on the loan portfolio. To appropriately measure expected credit losses, management disaggregates the loan portfolio into pools of similar risk characteristics. The Company utilizes the probability of default (“PD”) / loss given default (“LGD”) approach to calculate the expected loss for each segment, which is then discounted. PD is the probability the asset will default within a given timeframe and LGD is the percentage of the assets not expected to be collected due to default. The primary macroeconomic drivers of the quantitative model include forecasts of national unemployment and interest rate spreads. Management relies on macroeconomic forecasts obtained from various reputable sources, which may include the Federal Open Market Committee (FOMC) forecast and other publicly available forecasts from well recognized, leading economists. These forecasts can range from one to two years, depending upon the facts and circumstances of the current state of the economy, portfolio segment and management’s judgement of what can be reasonably supported. The model reversion period ranges from one to three years.

The allowance for credit losses is calculated over the loan’s contractual life. For term loans, the contractual life is calculated based on the maturity date. For commercial and industrial (“C&I”) revolving loans with no stated maturity date, the contractual life is calculated based on the internal review date. For all other revolving loans, the contractual life is based on either the estimated maturity date or a default date. The contractual term does not include expected extension, renewals or modifications unless management has a reasonable expectation as of the reporting period that Wesbanco will execute a troubled debt restructuring (“TDR”) with the borrower. Management assumes a loan will become a TDR if a consumer loan has matured, has a principal balance, and has previously been partially charged-off. This assumption extends the maturity of these loans to the six months beyond maturity date.

The loan portfolio is segmented based on the risk profiles of the loans. Commercial loans are segmented between commercial real estate (“CRE”), which are collateralized by real estate and commercial & industrial (“C&I”), which are typically utilized for general business purposes. CRE is further segmented between land and construction (“LCD”) and improved property, which are generally loans to purchase or refinance owner-occupied and investment properties. LCD loans have a unique risk that the developer or builder may not complete the project or not complete it on time or within budget. Improved property loans are reviewed for risk based on the underlying real estate property such as rental income and current lease terms. Retail loans are a homogenous group, generally consisting of standardized products that are smaller in amount and distributed over a large number of individual borrowers. The group is segmented into 3 categories – residential real estate, HELOC and consumer.

Contractual terms must be adjusted for prepayments to arrive at expected cash flows. Wesbanco models term loans with a “prepayment” rate, annualized to one year. When Wesbanco has a specific expectation of differing payment behavior for a given loan, the loan may be evaluated individually. For revolving loans that do not have a principal payment schedule, a curtailment rate is factored into the cash flow.

The evaluation also considers qualitative factors such as economic trends and conditions, which includes levels of regional unemployment, real estate values and the impact on specific industries and geographical markets, changes in lending policies and underwriting standards, delinquency and other credit quality trends, concentrations of credit risk, if any, the results of internal loan reviews and examinations by bank regulatory agencies, the volatility of historical loss rates and the velocity of changes in historical loss rates pertaining to the allowance for credit losses. Management relies on observable data from internal and external sources to the extent it is available to evaluate each of these factors and adjusts the model’s quantitative results to reflect the impact these factors may have on probable losses in the portfolio.

Commercial loans, include commercial real estate (“CRE”) and C&I, greater than $1 million that are reported as non-accrual, a troubled debt restructuring or that have unique characteristics are tested individually for estimated credit losses. Specific reserves are established when appropriate for such loans based on the present value of expected future cash flows of the loan or the estimated realizable value of the collateral, if any.

Management may also adjust its assumptions to account for differences between expected and actual losses from period to period. The variability of management’s assumptions could alter the level of the allowance for credit losses and may have a material impact on future results of operations and financial condition. The loss estimation models and methods used to determine the allowance for credit losses are continually refined and enhanced.

Recent accounting pronouncements —– ~~In August 2018, the~~The Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) as noted below.

In March 2020, the FASB issued ASU 2020-04, “Reference Rate Reform (Topic 848)”. Due to the potential discontinuance of the London Interbank Offered Rate (LIBOR), regulators have undertaken reference rate initiatives to identify alternative reference rates that are more observable or transaction based and less susceptible to manipulation. The ASU also provides option expedients for contract modifications that replace a reference rate affected by reference rate reform. The guidance is effective as of March 12, 2020 through December 31, 2022. Wesbanco is currently assessing the impact of ASU 2020-04 on Wesbanco’s Consolidated Financial Statements.

In August 2018, the FASB issued ASU 2018-15, “Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement that is a Service Contract.” This ASU specifically aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software and hosting arrangements that include an internal-use software license. The ASU does not affect the accounting for the service element of a hosting arrangement that is a service contract. The guidance is effective for fiscal years beginning after December 15, 2019 and interim periods within those fiscal years. ~~Early~~For Wesbanco, this update was effective January 1, 2020. The adoption ~~is permitted, including adoption in an interim period. WesBanco is currently assessing the~~of this pronouncement did not have a material impact ~~of ASU 2018-15~~ on ~~WesBanco’s~~Wesbanco’s Consolidated Financial Statements.

ASU 2018-14 Compensation—Retirement Benefits—Defined Benefit Plans—General (Topic 715-20)

In August 2018, the FASB issued ASU 2018-14, “Compensation—Retirement Benefits—Defined Benefit Plans—General (Topic 715-20): Disclosure Framework—Changes to the Disclosure Requirements for Defined Benefit Plans.” This ASU modifies ~~ASC~~Accounting Standards Codification (“ASC”) 715-20 to improve disclosure requirements for employers that sponsor defined benefit pension or other postretirement plans. The guidance is effective for fiscal years ending after December 15, 2020. Early adoption is permitted. ~~WesBanco~~Wesbanco is currently assessing the impact of ASU 2018-14 on ~~WesBanco’s~~Wesbanco’s Consolidated Financial Statements.

ASU 2018-13 Fair Value Measurement – Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement

In August 2018, the FASB issued ASU 2018-13, “Fair Value Measurement – Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement.” This ASU modifies the disclosure objective paragraphs of ASC 820 to eliminate (1) “at a minimum” from the phrase “an entity shall disclose at a minimum” and (2) other similar “open ended” disclosure requirements to promote the appropriate exercise of discretion of entities. The guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. ~~Early~~For Wesbanco, this update was effective January 1, 2020. The adoption ~~is permitted, including adoption in an interim period. WesBanco is currently assessing the~~of this pronouncement did not have a material impact ~~of ASU 2018-13~~ on ~~WesBanco’s~~Wesbanco’s Consolidated Financial Statements.

In September 2016, the FASB issued ASU 2016-13, “Financial Instruments – Credit Losses (Topic 326),”, which ~~will~~ require entities to use a new forward-looking “expected loss” model also referred to as the current expected credit loss model (“CECL”) on trade and other receivables, held-to-maturity debt securities, loans and other instruments that generally will result in the earlier recognition of allowances for credit losses. For available-for-sale debt securities with unrealized losses, entities ~~will~~ measure credit losses in a manner ~~similar~~similarly to ~~what they do today,~~current procedures, except that the losses will be recognized as allowances rather than reductions in the amortized cost of the securities. Entities will have to disclose significantly more information, including information they use to track credit quality by year of origination for most financing receivables. In April 2019, the FASB issued ASU 2019-04, “Codification Improvements to Topic 326, Financial Instruments – Credit Losses, Topic 815, Derivatives and Hedging and Topic 825, Financial Instruments” and in May 2019 the FASB issued ASU 2019-05, “Financial Instruments – Credit Losses (Topic 326), Targeted Transition Relief. Public business entities must apply the new requirements for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years, which for ~~WesBanco will be~~Wesbanco was effective ~~for the fiscal year beginning~~ January 1, 2020. ~~Early~~In December 2018, the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation (“FDIC”) and the Office of Comptroller of the Currency (“OCC”) approved a final rule to address changes to credit loss accounting under GAAP, including banking organizations’ adoption ~~is permitted~~of the CECL methodology. The final rule provides banking organizations the option to phase-in, over a three-year period, the day-one adverse effects on regulatory capital that may result from the adoption of the new accounting standard. In response to the COVID-19 pandemic, the joint federal bank regulatory agencies issued an optional extension of the regulatory capital transition, which allows for ~~fiscal~~a two-year delay and then a three-year transition period from January 1, 2022 through December 31, 2024. Under the interim final rule, the amount of adjustments to regulatory capital deferred until the phase-in period includes both the initial impact of our adoption of CECL at January 1, 2020 and 25% of subsequent changes in our allowance for credit losses during each quarter of the two-year period ended December 31, 2021, (collectively, the “CECL regulatory capital transition adjustment”). Wesbanco has elected to defer the impact of CECL for two years ~~beginning after December 15, 2018. WesBanco formed a cross-functional team to oversee~~and then will phase in the ~~implementation~~impact of the adoption of this ASU, and has completed an initial data gap assessment, finalized the loan segmentation procedures, and is currently evaluating the various forecasting and modeling assumptions, including qualitative factors, that will be used to estimate the initial current expected credit loss allowance. Substantial progress has been madestandard on the identification and staging of data, development of models, refinement of economic forecasting processes, and documentation of accounting policy decisions. In conjunction with this implementation, WesBanco is reviewing business processes and evaluating potential changes tocompany’s regulatory capital over the ~~control environment. Acquired~~subsequent three-year period.

Under CECL, acquired loans or pools of loans that have experienced more-than-insignificant credit deterioration are deemed to be purchased credit deteriorated (“PCD”) loans, and are grossed-up on day 1 by the initial credit estimate through ~~goodwill~~the allowance as opposed to a reduction in the ~~provision for~~loan’s amortized cost. The credit ~~losses. Acquired~~mark on acquired loans deemed not to be PCD loans ~~will be adjusted to fair value through goodwill,~~are reflected as a reduction in the loan’s amortized cost, with an allowance and corresponding provision for credit losses recorded in the first reporting period after acquisition through current period earnings, while the loan mark will accrete through interest income over the life of such loans. At acquisition, ~~WesBanco~~Wesbanco will consider several factors as indicators that an acquired loan or pool of loans has experienced more-than-insignificant credit deterioration. These factors may include loans 30 days or more past due, loans with an internal risk grade of below average or lower, loans classified as non-accrual by the acquired institution, materiality of the credit and loans that have been previously modified in a troubled debt ~~restructuring.~~restructuring (“TDR”). Upon adoption of this standard, acquired loans from prior acquisitions that meet the guidelines under ASC 310-30 ~~will be classified~~(formerly known as “purchased credit impaired”) were reclassified as PCD loans. The accretable portion of the loan mark as of adoption date ~~will continue~~continues to accrete into interest income. However, the non-accretable portion of the loan mark ~~will be~~was added to the allowance upon ~~adoption; while~~adoption, and any reversals of such mark will flow through the allowance in future periods. The loan mark on ASC 310-20 loans (“~~the good book”~~non-purchased credit impaired”) from prior acquisitions ~~will continue~~continues to accrete through interest income over the life of such loans. ~~WesBanco will perform~~

reasonable and supportable, including certain qualitative factors that were developed to estimate the initial current expected credit loss allowance. Wesbanco engaged a third-party to validate the data inputs and the models utilized in the CECL calculation. In addition, the Company prepared documentation of the ~~new methodology throughout~~accounting policy decisions, changes to the ~~remainder of 2019 prior to~~business processes and procedures, and the control environment under the adoption of ~~the ASU. WesBanco currently anticipates that an increase to~~this standard. The day 1 impact on the allowance for credit losses ~~may be recognized upon adoption~~was $41.4 million, which included a $6.7 million adjustment for PCD loans and a $3.0 million adjustment related to ~~provide for expected credit losses over the estimated life of~~ loan ~~and investment receivables.~~commitments. The ~~magnitude of the increase will depend~~after-tax effect on ~~economic conditions and trends in the loan and securities portfolios at the time of adoption.~~

In February 2016, the FASB issued ASU 2016-02, “Leases (Topic 842)”, which requires entities to recognize lease assets and lease liabilities on the balance sheet and disclose key information about leasing arrangements. The principal difference from previous guidance is that the lease assets and lease liabilities arising from operating leases were not previously recognized in the balance sheet. Public business entities must apply the new requirements for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. For WesBanco, this update was effective for the fiscal year beginning January 1, 2019. In January 2018, the FASB issued ASU 2018-01, which allows entities the option to apply the provisions of the new lease guidance at the effective date without adjusting the comparative periods presented. In July 2018, the FASB issued ASU 2018-10, which provides narrow-scope improvements to the lease standard and ASU 2018-11, which allows entities to choose an additional transition method, under which an entity initially applies the new lease standard at the adoption date and recognizes a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. Under this transitional method, the entity shall recognize and measure the leases that exist at the adoption date and the prior comparative periods are not adjusted. WesBanco adopted this ASUwas $26.6 million as of January 1, ~~2019 using~~2020. The day 1 CECL calculation is derived from the ~~transitional method. In addition, WesBanco utilized certain practical expedients including~~selected assumption of a one-year reasonable and supportable forecast, which was obtained from a third-party vendor. After the ~~following - retained~~forecast period, Wesbanco reverts back over a one year period to historical loss rates adjusting for prepayments and curtailments, to estimate losses over the ~~classifications~~remaining life of ~~existing leases, no re-assessment to determine if existing leases have initial direct costs~~loans. The most sensitive assumptions include the length of the forecast and ~~utilized hindsight when determining the lease term~~reversion periods, forecast of unemployment and ~~assessment~~interest rate spreads and prepayment speeds. See Note 5, “Loans and Allowance for Credit Losses” for further detail.

Wesbanco recognized an allowance for credit losses for held-to-maturity (“HTM”) debt securities of ~~impairment in existing leases. WesBanco capitalized $20~~$0.2 million ~~for right-of-use assets and lease liabilities, net~~as of ~~existing straight-line lease liabilities and unfavorable acquired lease liabilities. See additional disclosures in Note 6, “Leases”.~~

In August 2017, the FASB issued ASU 2017-12, “Targeted Improvements to Accounting for Hedging Activities.” The new guidance makes more financial and nonfinancial hedging strategies eligible for hedge accounting. It also amended the presentation and disclosure requirements and changed how companies assess effectiveness. It was intended to more closely align hedge accounting with companies’ risk management strategies, simplify the application of hedge accounting, and increase transparency as to the scope and results of hedging programs. The guidance was effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. For WesBanco, this update was effective for the fiscal year beginning January 1, ~~2019. Upon adoption, WesBanco reclassified $67.3 million of callable held-to-maturity municipal debt securities to available-for-sale debt securities.~~

In October 2018, the FASB issued ASU 2018-16, “Derivatives and Hedging (Topic 815): Inclusion of the Secured Overnight Financing Rate (SOFR) Overnight Index Swap (OIS) Rate as a Benchmark Interest Rate for Hedge Accounting Purposes.” This ASU modifies ASC 815 for eligible benchmark interest rates. Due to concerns about the sustainability of the London Interbank Offered Rate (LIBOR), the Federal Reserve initiated an effort to introduce an alternative reference rate in the United States. The Overnight Index Swap (OIS) rate, which is based on SOFR is permitted as a U.S. benchmark interest rate for hedge accounting purposes. The guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. For WesBanco, this update was effective for the fiscal year beginning January 1, 2019. The2020 upon adoption of this ~~pronouncement did not have a material impact on WesBanco’s Consolidated Financial Statements.~~standard. See Note 4, “Investments” for further detail.

On ~~August 20, 2018, WesBanco~~November 22, 2019, Wesbanco completed its acquisition of ~~Farmers Capital Bank Corp. (“FFKT”),~~OLBK, a bank holding company headquartered in ~~Frankfort, KY.~~Bowie, MD. On the acquisition date, ~~FFKT~~OLBK had approximately ~~$1.6~~$3.0 billion in assets, excluding goodwill, which included approximately ~~$1.0~~$2.5 billion in loans and ~~$239.3~~$182.5 million in securities. The ~~FFKT~~OLBK acquisition was valued at ~~$428.9~~$494.0 million, based on ~~WesBanco’s~~Wesbanco’s closing stock price on ~~August 20, 2018,~~November 22, 2019, of ~~$49.40,~~$36.75 and resulted in ~~WesBanco~~Wesbanco issuing ~~7,920,387~~13,351,837 shares of its common stock ~~and $37.6 million in cash~~ in exchange for all of the outstanding shares of ~~FFKT~~OLBK common ~~stock.~~stock including stock options of which the fair value was $3.3 million. The assets and liabilities of ~~FFKT~~OLBK were recorded on ~~WesBanco’s~~Wesbanco’s Balance Sheet at their preliminary estimated fair values as of ~~August 20, 2018,~~November 22, 2019, the acquisition date, and ~~FFKT’s~~OLBK’s results of operations have been included in ~~WesBanco’s~~Wesbanco’s Consolidated Statements of Income since that date. ~~The fair values for certain assets and liabilities acquired from FFKT on August 20, 2018 represented preliminary estimates.~~Based on a preliminary purchase price allocation, ~~WesBanco~~Wesbanco recorded ~~$220.9~~$228.9 million in goodwill and ~~$37.4~~$32.9 million in core deposit intangibles in its ~~community banking segment and $2.6 million in trust customer relationship intangibles in its trust and investment services~~Community Banking segment. None of the goodwill is deductible for income tax purposes, as the acquisition is accounted for as a tax-free exchange for tax purposes. As a result of the ~~full~~ integration of the operations of ~~FFKT,~~OLBK, it is not practicable to determine revenue or net income included in ~~WesBanco’s~~Wesbanco’s operating results relating to ~~FFKT~~OLBK since the date of acquisition, as ~~FFKT’s~~OLBK’s results cannot be separately identified.

For the six months ended June 30, ~~2019, WesBanco~~2020, Wesbanco recorded merger-related expenses of ~~$3.2~~$5.6 million associated with the ~~FFKT~~OLBK acquisition.

The preliminary purchase price of the ~~FFKT~~OLBK acquisition and resulting goodwill is summarized as follows:

(unaudited, in thousands)	August 20, 2018			November 22, 2019
Purchase price:
Fair value of WesBanco shares issued	$	391,267
Cash consideration for outstanding FFKT shares		37,634
Fair value of Wesbanco shares issued				$	493,936
Cash consideration for outstanding OLBK shares					16
Total purchase price	$	428,901		$	493,952
Fair value of:
Tangible assets acquired	$	1,369,536		$	2,894,104
Core deposit and other intangible assets acquired		39,992			32,899
Liabilities assumed		(1,431,663	)		(2,721,999	)
Net cash received in the acquisition		230,139			60,041
Fair value of net assets acquired		208,004			265,045
Goodwill recognized	$	220,897		$	228,907

The following table presents the preliminary allocation of the purchase price of the assets acquired and the liabilities assumed at the date of acquisition, as ~~WesBanco~~Wesbanco intends to finalize its accounting for the acquisition of ~~FFKT~~OLBK within one year ~~from~~of the date of acquisition:

(unaudited, in thousands)	August 20, 2018		November 22, 2019
Assets acquired
Cash and due from banks	$	230,139	$	60,041
Securities		239,321		182,455
Loans		1,025,800		2,514,011
Goodwill and other intangible assets		260,889		261,806
Accrued income and other assets		104,415		197,638
Total assets acquired	$	1,860,564	$	3,215,951
Liabilities assumed
Deposits	$	1,330,328	$	2,375,574
Borrowings		71,780		286,047
Accrued expenses and other liabilities		29,555		60,378
Total liabilities assumed	$	1,431,663	$	2,721,999
Net assets acquired	$	428,901	$	493,952

The following table presents the changes in the allocation of the purchase price of the assets acquired and the liabilities assumed at the date of the acquisition previously reported as of March 31, ~~2019:~~2020:

(unaudited, in thousands)	August 20, 2018			November 22, 2019
Goodwill recognized as of March 31, 2019	$	219,418
Goodwill recognized as of March 31, 2020				$	228,757
Change in fair value of net assets acquired:
Assets
Other real estate owned		(80	)
Investment securities					-
Loans					(289	)
Other intangible assets					-
Deferred tax assets					139
Accrued income and other assets		430			-
Liabilities
Borrowings					-
Accrued expenses and other liabilities		(1,829	)		-
Fair value of net assets acquired	$	(1,479	)	$	(150	)
Increase in goodwill recognized		1,479			150
Goodwill recognized as of June 30, 2019	$	220,897
Goodwill recognized as of June 30, 2020				$	228,907

The fair value estimates for ~~other assets~~loans (including loan classifications), premises and equipment, deferred taxes and other assets/liabilities ~~have continued~~will continue to fluctuate asuntil the final valuations are completed. The Company expects to finalize the purchase price accounting ~~of FFKT~~for OLBK within one year of the date of acquisition.

	For the Three Months Ended June 30,				For the Six Months Ended June 30,				For the Three Months Ended June 30,				For the Six Months Ended June 30,
(unaudited, in thousands, except shares and per share amounts)	2019		2018		2019		2018		2020		2019		2020		2019
Numerator for both basic and diluted earnings per common share:
Net income	$	44,814	$	33,169	$	85,151	$	66,698	$	4,488	$	44,814	$	27,884	$	85,151
Denominator:
Total average basic common shares outstanding		54,628,029		46,498,305		54,613,346		45,281,264		67,104,628		54,628,029		67,295,589		54,613,346
Effect of dilutive stock options and other stock compensation		105,492		141,475		110,863		135,746		77,127		105,492		114,871		110,863
Total diluted average common shares outstanding		54,733,521		46,639,780		54,724,209		45,417,010		67,181,755		54,733,521		67,410,460		54,724,209
Earnings per common share - basic	$	0.82	$	0.71	$	1.56	$	1.47	$	0.07	$	0.82	$	0.41	$	1.56
Earnings per common share - diluted	$	0.82	$	0.71	$	1.56	$	1.47	$	0.07	$	0.82	$	0.41	$	1.56

~~Options to purchase 353,829~~As of June 30, 2020 and ~~117,600 shares at~~ June 30, 2019 respectively,567,685 shares and ~~2018, respectively,~~353,829 options to purchase shares were not included in the computation of net income per diluted share for the three months ended June 30, ~~2019~~2020 and ~~2018, respectively,~~2019 because the exercise price was greater than the average market price of the common ~~shares and,~~share, therefore, the effect would be antidilutive. ~~Options to purchase 117,600 shares at both~~

As of June 30, 2020 and June 30, 2019 respectively,538,761 shares and ~~2018~~117,600 options to purchase shares were not included in the computation of net income per diluted ~~shares~~share for the six months ended June 30, ~~2019~~2020 and ~~2018,~~2019 because the exercise price was greater than the average market price of the common ~~shares and,~~share, therefore, the effect would be antidilutive.

As of June 30, 2020, shares related to the 2020, 2019 and 2018 total shareholder return plans were not included in the calculation because the effect would be antidilutive. As of June 30, 2019, 40,608 contingently issuable shares were estimated to be awarded under the 2018 and 2017 total shareholder return plans, as stock performance targets ~~were~~had been met as of such date and ~~are~~ therefore those shares were included in the diluted calculation. ~~As of June 30, 2019, the shares related to the 2019 total shareholder return plan were not included in the calculation because the effect would be antidilutive. Performance based~~

Performance-based restricted stock compensation totaling 46,530 and 30,137 shares were estimated to be awarded as of June 30, 2020 and 2019, respectively, and are included in the diluted calculation. As

On November 22, 2019, Wesbanco issued 13,351,837 shares of ~~June 30, 2018, 42,912 contingently issuable~~common stock to complete its acquisition of OLBK and granted 34,998 shares ~~were estimated~~of restricted stock to ~~be awarded under the 2018 and 2017 total shareholder return plans as stock performance targets were met and~~certain OLBK employees. These shares are included in average shares outstanding beginning on that date. For additional information relating to the ~~diluted calculation. Performance based restricted stock compensation totaling 17,081 shares were estimated~~OLBK acquisition, refer to ~~be awarded as of June 30, 2018~~Note 2, “Mergers and ~~are included in the diluted calculation.~~Acquisitions.”

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

	June 30, 2019									December 31, 2018									June 30, 2020									December 31, 2019
(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		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	$	29,705	$	76	$	—		$	29,781	$	19,882	$	3	$	(7	)	$	19,878	$	19,941	$	38	$	—		$	19,979	$	32,790	$	47	$	(1	)	$	32,836
U.S. Government sponsored entities and agencies		130,578		4,147		(138	)		134,587		142,852		556		(1,756	)		141,652		155,764		7,223		(74	)		162,913		157,088		2,862		(322	)		159,628
Residential mortgage-backed securities and collateralized mortgage obligations of government sponsored entities and agencies		1,550,885		17,598		(5,441	)		1,563,042		1,585,864		2,912		(27,521	)		1,561,255		1,446,059		47,202		(626	)		1,492,635		1,803,268		18,850		(6,131	)		1,815,987
Commercial mortgage-backed securities and collateralized mortgage obligations of government sponsored entities and agencies		175,355		3,417		(116	)		178,656		171,671		264		(2,963	)		168,972		208,469		12,905		(9	)		221,365		187,268		3,270		(129	)		190,409
Obligations of states and political subdivisions		177,888		5,305		(15	)		183,178		184,057		2,039		(982	)		185,114		125,167		7,062		—			132,229		140,357		5,253		(1	)		145,609
Corporate debt securities		39,695		499		(154	)		40,040		37,730		87		(559	)		37,258		43,991		976		(139	)		44,828		48,645		581		(137	)		49,089
Total available-for-sale debt securities	$	2,104,106	$	31,042	$	(5,864	)	$	2,129,284	$	2,142,056	$	5,861	$	(33,788	)	$	2,114,129	$	1,999,391	$	75,406	$	(848	)	$	2,073,949	$	2,369,416	$	30,863	$	(6,721	)	$	2,393,558
Held-to-maturity debt securities
U.S. Government sponsored entities and agencies	$	10,020	$	36	$	(104	)	$	9,952	$	10,823	$	6	$	(329	)	$	10,500	$	8,381	$	273	$	—		$	8,654	$	9,216	$	30	$	(116	)	$	9,130
Residential mortgage-backed securities and collateralized mortgage obligations of government sponsored entities and agencies		136,929		834		(642	)		137,121		148,300		204		(4,170	)		144,334		108,984		4,137		(1	)		113,120		122,937		1,031		(261	)		123,707
Obligations of states and political subdivisions		720,399		19,566		(216	)		739,749		828,520		8,771		(4,012	)		833,279		615,862		28,630		(4	)		644,488		686,376		20,475		(258	)		706,593
Corporate debt securities		33,257		1,455		—			34,712		33,291		12		(673	)		32,630		33,189		3,215		—			36,404		33,224		1,869		—			35,093
Total held-to-maturity debt securities	$	900,605	$	21,891	$	(962	)	$	921,534	$	1,020,934	$	8,993	$	(9,184	)	$	1,020,743	$	766,416	$	36,255	$	(5	)	$	802,666	$	851,753	$	23,405	$	(635	)	$	874,523
Total debt securities	$	3,004,711	$	52,933	$	(6,826	)	$	3,050,818	$	3,162,990	$	14,854	$	(42,972	)	$	3,134,872	$	2,765,807	$	111,661	$	(853	)	$	2,876,615	$	3,221,169	$	54,268	$	(7,356	)	$	3,268,081

At June 30, ~~2019~~2020 and December 31, ~~2018,~~2019, there were no0 holdings of any one issuer, other than U.S. government sponsored entities and its agencies, in an amount greater than 10% of ~~WesBanco’s~~Wesbanco’s shareholders’ equity.

Equity securities, of which ~~$8.7~~$8.8 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 ~~$11.8 million and $11.7~~$12.3 million at June 30, ~~2019~~2020 and December 31, ~~2018, respectively.~~2019.

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 June 30, ~~2019. In some instances, the issuers~~2020. Actual maturities will differ from contractual maturities because borrowers may have the right to call or prepay debt obligations with or without ~~penalty prior to the contractual maturity date.~~

⁽¹⁾prepayment penalties. Mortgage-backed securities and collateralized mortgage ~~securities, which have prepayment provisions,~~obligations are ~~not assigned to~~classified in the table below based on their contractual maturity ~~categories due to fluctuations in their prepayment speeds.~~date; however, principal payments are received on a monthly basis.

⁽²⁾~~The held-to-maturity debt securities portfolio is carried at an amortized cost of $900.6 million.~~

Securities with an aggregate fair ~~values~~value of $2.0 billion at June 30, ~~2019~~2020 and December 31, ~~2018~~2019, 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 ~~$66.1~~$226.1 million and ~~$81.5~~$66.1 million for the six months ended June 30, ~~2019~~2020 and ~~2018,~~2019, respectively. Net unrealized gains ~~(losses)~~ on available-for-sale securities included in accumulated other comprehensive income, net of tax, as of June 30, ~~2019~~2020 and December 31, ~~2018~~2019 were ~~$19.4~~$56.8 million and ~~($21.5)~~$20.7 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 six months ended June 30, ~~2019~~2020 and ~~2018,~~2019, respectively.

	For the Three Months Ended June 30,					For the Six Months Ended June 30,						For the Three Months Ended June 30,						For the Six Months Ended June 30,
(unaudited, in thousands)	2019			2018		2019			2018			2020			2019			2020			2019
Debt securities:
Gross realized gains	$	106		$	5	$	348		$	12		$	279		$	106		$	3,615		$	348
Gross realized losses		(18	)		—		(209	)		(18	)		(34	)		(18	)		(1,066	)		(209	)
Net gains (losses) on debt securities	$	88		$	5	$	139		$	(6	)
Net gains on debt securities												$	245		$	88		$	2,549		$	139
Equity securities:
Net unrealized gains recognized on securities still held	$	265		$	347	$	868		$	319		$	1,054		$	265		$	249		$	868
Net realized gains recognized on securities sold		2,556			6		2,559			6
Net realized gains (losses) recognized on securities sold													—			2,556			(8	)		2,559
Net gains on equity securities	$	2,821		$	353	$	3,427		$	325		$	1,054		$	2,821		$	241		$	3,427
Net securities gains	$	2,909		$	358	$	3,566		$	319		$	1,299		$	2,909		$	2,790		$	3,566

On January 1, 2020, Wesbanco adopted CECL. Upon adoption, the Company recognized $0.2 million to opening retained earnings, which represents the CECL allowance as of January 1, 2020. The corporate and municipal bonds in Wesbanco’s held-to-maturity debt portfolio are analyzed quarterly to determine if an allowance for current expected credit losses is warranted. Wesbanco uses a database of historical financials of all corporate and municipal issuers and actual historic default and recovery rates on rated and non-rated transactions to estimate expected credit losses on an individual security basis. The expected credit losses are adjusted quarterly and are recorded in an allowance for expected credit losses on the balance sheet, which is deducted from the amortized cost basis of the held-to-maturity portfolio as a contra asset. The losses are recorded on the income statement in the provision for credit losses. Accrued interest receivable on held-to-maturity securities, which was $5.9 million as of June 30, 2020, is excluded from the estimate of credit losses. Held-to-maturity investments in U.S. Government sponsored entities and agencies as well as mortgage-backed securities and collateralized mortgage obligations, which are all either issued by a direct governmental entity or a government-sponsored entity, have no historical evidence supporting expected credit losses; therefore, Wesbanco has estimated these losses at 0, and will monitor this assumption in the future for any economical or governmental policies that could affect this assumption.

The following table provides a rollforward of the allowance for credit losses on held-to-maturity securities for the six months ended June 30, 2020:

The following ~~tables provide~~table provides information on unrealized losses on available-for-sale debt securities that have been in an unrealized loss position for less than twelve months and twelve months or more, for which an allowance for credit losses has not been recorded as of June 30, ~~2019 and December 31, 2018, respectively:~~2020:

Unrealized losses on debt securities in the tables above 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~~ 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~~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, and~~cost; therefore, management believes the unrealized losses detailed above ~~are temporary and no impairment loss~~do not require an allowance for credit losses relating to these securities ~~has been~~to be recognized.

Securities that do not have readily determinable fair values and for which ~~WesBanco~~Wesbanco does not exercise significant influence are carried at cost. Cost method investments consist primarily of FHLB of Pittsburgh, Cincinnati and Indianapolis stock totaling ~~$54.7~~$59.4 million and ~~$50.8~~$66.8 million at June 30, ~~2019~~2020 and December 31, ~~2018,~~2019, 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.

11The following table provides information on unrealized losses on held-to-maturity and available-for-sale debt securities that have been in an unrealized loss position for less than twelve months and twelve months or more as of December 31, 2019, prior to the date of adoption of the credit loss standard, and as defined by the previous accounting guidance in effect at that time:

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~~income/(costs) were ~~$4.2~~$19.3 million and ~~$3.2~~($4.8) million at June 30, ~~2019~~2020 and December 31, ~~2018,~~2019, respectively. The ~~unamortized~~June 30, 2020 balance included $24.3 million of net deferred income from PPP loans. The unaccreted discount on purchased loans from acquisitions was ~~$40.1~~$48.3 million at June 30, ~~2019,~~2020, including ~~$19.0~~$25.9 million related to ~~FFKT,~~OLBK, and ~~$49.3~~$51.9 million at December 31, ~~2018.~~2019.

	June 30,		December 31,		June 30,		December 31,
(unaudited, in thousands)	2019		2018		2020		2019
Commercial real estate:
Land and construction	$	483,046	$	528,072	$	671,486	$	777,151
Improved property		3,394,587		3,325,623		5,022,971		4,947,857
Total commercial real estate		3,877,633		3,853,695		5,694,457		5,725,008
Commercial and industrial		1,300,577		1,265,460		1,659,296		1,644,699
Commercial and industrial - PPP						836,800		—
Residential real estate		1,633,613		1,611,607		1,893,544		1,873,647
Home equity		590,303		599,331		646,323		649,678
Consumer		335,728		326,188		343,723		374,953
Total portfolio loans		7,737,854		7,656,281		11,074,143		10,267,985
Loans held for sale		18,649		8,994		53,324		43,013
Total loans	$	7,756,503	$	7,665,275	$	11,127,467	$	10,310,998

On January 1, 2020, Wesbanco adopted ASU 2016-13 (Topic 326), Measurement of Credit Losses on Financial Instruments. Upon adoption, the Company recognized $41.4 million as an increase to the allowance for credit losses, which represents the difference in the incurred allowance as of December 31, 2019 and the CECL allowance as of January 1, 2020. This adjustment includes a $6.7 million increase to the allowance related to PCD loans as of January 1, 2020. See Note 1, “Summary of Significant Accounting Policies” for the Company’s revised accounting policies related to Loans and Allowance for Credit Losses and adoption of this standard.

The allowance for credit losses under CECL is calculated utilizing the PD / LGD, which is then discounted. 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 June 30, 2020, the one-year forecast was based upon a blended rate from two nationally-recognized published economic forecasts through June 30, 2020, 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 to peak at 9.4% in the fourth quarter, and subsequently decrease to an average of 8.7% over the remainder of the forecast period. The calculation utilized a one-year reversion period. Included in the qualitative factors were COVID-19 pandemic factors related to deferred interest on modified loans and industry concentrations such as hospitality and retail. 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 $0.3 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 June 30, 2020, accrued interest receivable for loans was $49.2 million, including $18.9 million related to COVID-19 loan modifications allowed under the CARES Act.

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																								Allowance for Credit Losses By Category
	For the Six Months Ended June 30, 2019 and 2018																								For the Six Months Ended June 30, 2020 and 2019
(unaudited, in thousands)	Commercial Real Estate - Land and Construction			Commercial Real Estate -Improved Property			Commercial & Industrial			Residential Real Estate			Home Equity			Consumer			Deposit Overdraft			Total			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, 2019
Allowance for credit losses - loans																									$	4,949		$	20,293		$	14,116		$	4,311		$	4,422		$	2,951		$	1,387		$	52,429
Allowance for credit losses - loan commitments																										235			22			311			15			250			41			—			874
Total beginning allowance for credit losses - loans and loan commitments																										5,184			20,315			14,427			4,326			4,672			2,992			1,387			53,303
Impact of adopting ASC 326																										1,524			13,078			22,357			5,630			(3,936	)		2,576			213			41,442
Provision for credit losses:
Provision for loan losses																										6,388			58,706			10,390			4,554			1,486			3,102			(409	)		84,217
Provision for loan commitments																										5,223			—			1,280			318			35			—			—			6,856
Total provision for credit losses - loans and loan commitments																										11,611			58,706			11,670			4,872			1,521			3,102			(409	)		91,073
Charge-offs																										(1	)		(1,895	)		(3,187	)		(667	)		(562	)		(2,183	)		(516	)		(9,011	)
Recoveries																										77			396			227			376			255			768			254			2,353
Net charge-offs																										76			(1,499	)		(2,960	)		(291	)		(307	)		(1,415	)		(262	)		(6,658	)
Balance at June 30, 2020
Allowance for credit losses - loans																										10,335			90,600			43,632			13,824			1,900			7,255			929			168,475
Allowance for credit losses - loan commitments																										8,060			—			1,862			713			50			—			—			10,685
Total ending allowance for credit losses - loans and loan commitments																									$	18,395		$	90,600		$	45,494		$	14,537		$	1,950		$	7,255		$	929		$	179,160

Balance at December 31, 2018
Allowance for loan losses	$	4,039		$	20,848		$	12,114		$	3,822		$	4,356		$	2,797		$	972		$	48,948		$	4,039		$	20,848		$	12,114		$	3,822		$	4,356		$	2,797		$	972		$	48,948
Allowance for loan commitments		169			33			262			12			226			39			—			741			169			33			262			12			226			39			—			741
Total beginning allowance for credit losses		4,208			20,881			12,376			3,834			4,582			2,836			972			49,689			4,208			20,881			12,376			3,834			4,582			2,836			972			49,689
Provision for credit losses:
Provision for loan losses		(538	)		1,459			1,309			124			423			333			1,119			4,229			(538	)		1,459			1,309			124			423			333			1,119			4,229
Provision for loan commitments		18			(9	)		995			1			23			(3	)		—			1,025			18			(9	)		995			1			23			(3	)		—			1,025
Total provision for credit losses		(520	)		1,450			2,304			125			446			330			1,119			5,254			(520	)		1,450			2,304			125			446			330			1,119			5,254
Charge-offs		—			(285	)		(1,025	)		(679	)		(673	)		(1,344	)		(860	)		(4,866	)		—			(285	)		(1,025	)		(679	)		(673	)		(1,344	)		(860	)		(4,866	)
Recoveries		200			345			489			188			215			896			215			2,548			200			345			489			188			215			896			215			2,548
Net charge-offs		200			60			(536	)		(491	)		(458	)		(448	)		(645	)		(2,318	)		200			60			(536	)		(491	)		(458	)		(448	)		(645	)		(2,318	)
Balance at June 30, 2019
Allowance for loan losses		3,701			22,367			12,887			3,455			4,321			2,682			1,446			50,859			3,701			22,367			12,887			3,455			4,321			2,682			1,446			50,859
Allowance for loan commitments		187			24			1,257			13			249			36			—			1,766			187			24			1,257			13			249			36			—			1,766
Total ending allowance for credit losses	$	3,888		$	22,391		$	14,144		$	3,468		$	4,570		$	2,718		$	1,446		$	52,625		$	3,888		$	22,391		$	14,144		$	3,468		$	4,570		$	2,718		$	1,446		$	52,625

Balance at December 31, 2017
Allowance for loan losses	$	3,117		$	21,166		$	9,414		$	3,206		$	4,497		$	3,063		$	821		$	45,284
Allowance for loan commitments		119			26			173			7			212			37			—			574
Total beginning allowance for credit losses		3,236			21,192			9,587			3,213			4,709			3,100			821			45,858
Provision for credit losses:
Provision for loan losses		1,465			(1,774	)		2,100			944			54			615			439			3,843
Provision for loan commitments		44			(8	)		2			2			(7	)		—			—			33
Total provision for credit losses		1,509			(1,782	)		2,102			946			47			615			439			3,876
Charge-offs		(136	)		(692	)		(616	)		(509	)		(672	)		(1,793	)		(541	)		(4,959	)
Recoveries		264			776			636			252			279			1,066			197			3,470
Net charge-offs		128			84			20			(257	)		(393	)		(727	)		(344	)		(1,489	)
Balance at June 30, 2018
Allowance for loan losses		4,710			19,476			11,534			3,893			4,158			2,951			916			47,638
Allowance for loan commitments		163			18			175			9			205			37			—			607
Total ending allowance for credit losses	$	4,873		$	19,494		$	11,709		$	3,902		$	4,363		$	2,988		$	916		$	48,245

The following tables present the allowance for credit losses and recorded investments in loans by category:

	Allowance for Credit Losses and Recorded Investment in Loans																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- draft		Total		Commercial Real Estate- Land and Construction		Commercial Real Estate- Improved Property		Commercial and Industrial		Residential Real Estate		Home Equity		Consumer		Deposit Over- drafts		Total
June 30, 2019
June 30, 2020
Allowance for credit losses:
Loans individually-evaluated																	$	698	$	4,098	$	2,056	$	—	$	—	$	—	$	—	$	6,852
Loans collectively-evaluated																		9,637		86,502		41,576		13,824		1,900		7,255		929		161,623
Loan commitments																		8,060		—		1,862		713		50		—		—		10,685
Total allowance for credit losses - loans and commitments																	$	18,395	$	90,600	$	45,494	$	14,537	$	1,950	$	7,255	$	929	$	179,160

Portfolio loans:
Individually-evaluated for credit losses⁽¹⁾																	$	1,508	$	17,967	$	4,253	$	—	$	—	$	—	$	—	$	23,728
Collectively-evaluated for credit losses																		669,978		5,005,004		2,491,843		1,893,544		646,323		343,723		—		11,050,415
Total portfolio loans																	$	671,486	$	5,022,971	$	2,496,096	$	1,893,544	$	646,323	$	343,723	$	—	$	11,074,143

December 31, 2019
Allowance for credit losses:
Allowance for loans individually evaluated for impairment	$	—	$	1,479	$	11	$	12	$	8	$	1	$	—	$	1,511	$	—	$	93	$	10	$	14	$	6	$	1	$	—	$	124
Allowance for loans collectively evaluated for impairment		3,701		20,888		12,876		3,443		4,313		2,681		1,446		49,348		4,949		20,200		14,106		4,297		4,416		2,950		1,387		52,305
Allowance for loan commitments		187		24		1,257		13		249		36		—		1,766		235		22		311		15		250		41		—		874
Total allowance for credit losses	$	3,888	$	22,391	$	14,144	$	3,468	$	4,570	$	2,718	$	1,446	$	52,625	$	5,184	$	20,315	$	14,427	$	4,326	$	4,672	$	2,992	$	1,387	$	53,303

Portfolio loans:
Individually evaluated for impairment ⁽¹⁾	$	—	$	5,157	$	192	$	4,922	$	922	$	74	$	—	$	11,267	$	—	$	3,907	$	11,961	$	4,392	$	704	$	53	$	—	$	21,017
Collectively evaluated for impairment		482,804		3,381,541		1,299,528		1,627,047		589,381		335,654		—		7,715,955		777,033		4,935,383		1,631,855		1,865,151		648,221		374,812		—		10,232,455
Acquired with deteriorated credit quality		242		7,889		857		1,644		—		—		—		10,632		118		8,567		883		4,104		753		88		—		14,513
Total portfolio loans	$	483,046	$	3,394,587	$	1,300,577	$	1,633,613	$	590,303	$	335,728	$	—	$	7,737,854	$	777,151	$	4,947,857	$	1,644,699	$	1,873,647	$	649,678	$	374,953	$	—	$	10,267,985

December 31, 2018
Allowance for credit losses:
Allowance for loans individually evaluated for impairment	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Allowance for loans collectively evaluated for impairment		4,039		20,848		12,114		3,822		4,356		2,797		972		48,948
Allowance for loan commitments		169		33		262		12		226		39		—		741
Total allowance for credit losses	$	4,208	$	20,881	$	12,376	$	3,834	$	4,582	$	2,836	$	972	$	49,689

Portfolio loans:
Individually evaluated for impairment ⁽¹⁾	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Collectively evaluated for impairment		527,737		3,319,672		1,264,560		1,609,177		599,331		326,063		—		7,646,540
Acquired with deteriorated credit quality		335		5,951		900		2,430		—		125		—		9,741
Total portfolio loans	$	528,072	$	3,325,623	$	1,265,460	$	1,611,607	$	599,331	$	326,188	$	—	$	7,656,281

⁽¹⁾ ~~Commercial loans greater than $1 million that are reported as non-accrual or as a TDR are individually evaluated for impairment.~~

~~WesBanco maintains an internal loan grading system to reflect the credit quality of commercial loans.~~ Commercial loan risk grades are determined based on an evaluation of the relevant characteristics of each loan, assigned at ~~the~~ inception ~~of each loan~~ 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. ~~This includes an analysis of cash flow available to repay~~The rating system more heavily weights the debt ~~profitability, liquidity,~~service coverage, leverage and ~~overall financial trends.~~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, ~~an assessment of secondary sources of repayment such as~~payment history, collateral or guarantees, other terms and conditions of the loan that may increase or reduce its risk, and economic conditions and other external factors that may influence repayment capacity and financial condition. 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 ~~rental~~operating income generated by the property to service the debt, the loan to appraised value, the type, quality, industry and mix of tenants, and the terms of ~~leases, but also considers the overall financial capacity of the investors and their experience in owning and managing investment property.~~leases. The risk grade assigned to owner-occupied commercial real estate ~~and commercial and industrial loans~~ is based primarily on ~~historical~~global debt service coverage and ~~projected earnings,~~ the ~~adequacy of operating cash flow to service all of the business’ debt, and the capital resources, liquidity and~~ leverage of the business, but may also ~~considers~~consider the industry in which the business operates, the business’ specific competitive advantages or disadvantages, collateral margins and the quality and experience of management, and external influences on the business such as economic conditions. The type, age, condition, location and any environmental risks associated with a property are also considered for all types of commercial real estate.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. ~~Factors~~Primary factors that are considered ~~for~~in risk rating C&I loans include ~~the type, quality~~debt service coverage and ~~marketability of non-real estate~~leverage. Other factors including operating trends, collateral ~~and whether the structure of the loan increases or reduces its risk. The overall financial condition and repayment capacity of any guarantors is~~coverage along with management experience are also evaluated to determine the extent to which they mitigate other risks of the loan. The following paragraphs provide descriptions of risk grades that are applicable to commercial real estate and commercial and industrial loans.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.

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 ~~compromised loans are currently protected but have weaknesses, which, if not corrected, may be inadequately protected~~in the bank's credit position at some future date. ~~These~~Criticized loans ~~represent an unwarranted credit~~are not adversely classified by the banking regulators and do not expose the bank to sufficient risk ~~and would generally not be extended in the normal course of lending. Specific issues, which may~~to warrant ~~this grade, include declining financial results, increased reliance on secondary sources of repayment or guarantor support and~~ adverse ~~external influences that may negatively impact the business or property.~~classification.

~~Substandard~~Classified loans, considered as substandard and doubtful, ~~loans~~ are equivalent to the classifications used by banking regulators. Substandard loans are inadequately protected by the current ~~repayment~~sound worth and paying capacity ~~and equity~~ of the ~~borrower~~obligor or of the collateral pledged, if any. ~~Substandard loans~~Loans so classified must have ~~one~~a well-defined weakness or ~~more well-defined~~ weaknesses that jeopardize ~~their repayment or collection in full.~~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 ~~to a~~in those classified substandard, ~~loan~~ with the added characteristic that ~~full repayment is highly questionable~~the weaknesses make collection or ~~improbable~~liquidation in full, on the basis of currently ~~existing~~known facts, conditions, and ~~collateral~~ values, highly questionable and improbable. These loans are ~~considered~~reported as non-accrual. ~~However, recognition of loss may be deferred if there are reasonably specific pending factors that will reduce the risk if they occur.~~

	Commercial Loans by Internally 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		Commercial Real Estate- Land and Construction		Commercial Real Estate- Improved Property		Commercial & Industrial		Total Commercial Loans
As of June 30, 2019
As of June 30, 2020
Pass	$	476,109	$	3,319,270	$	1,268,591	$	5,063,970	$	657,061	$	4,833,481	$	2,453,304	$	7,943,846
Criticized - compromised		5,794		52,657		14,785		73,236		10,074		113,958		24,548		148,580
Classified - substandard		1,143		22,660		17,201		41,004		4,351		75,532		18,244		98,127
Classified - doubtful		—		—		—		—		—		—		—		—
Total	$	483,046	$	3,394,587	$	1,300,577	$	5,178,210	$	671,486	$	5,022,971	$	2,496,096	$	8,190,553

As of December 31, 2018
As of December 31, 2019
Pass	$	523,707	$	3,267,304	$	1,245,190	$	5,036,201	$	769,537	$	4,807,003	$	1,570,689	$	7,147,229
Criticized - compromised		2,297		35,566		13,847		51,710		4,338		65,612		49,009		118,959
Classified - substandard		2,068		22,753		6,423		31,244		3,276		75,242		13,231		91,749
Classified - doubtful		—		—		—		—		—		—		11,770		11,770
Total	$	528,072	$	3,325,623	$	1,265,460	$	5,119,155	$	777,151	$	4,947,857	$	1,644,699	$	7,369,707

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~~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 ~~$20.0~~$32.4 million at June 30, ~~2019~~2020 and ~~$22.9~~$28.3 million at December 31, ~~2018,~~2019, of which ~~$2.0~~$9.8 million and ~~$3.9~~$5.1 million were accruing, for each period, respectively. The aggregate amount of residential real estate, home equity and consumer loans classified as substandard as well as $26.9 million of unfunded commercial loan commitments are not included in the tables above.

Acquired ~~FFKT~~OLBK Loans ~~– In~~—In conjunction with the ~~FFKT~~OLBK acquisition, ~~WesBanco~~Wesbanco acquired loans with a book value of ~~$1,064.8~~$2,570.0 million as of ~~August 20, 2018.~~November 22, 2019 (prior to the adoption of CECL on January 1, 2020). These loans were recorded at the preliminary fair value of ~~$1,025.8~~$2,514.0 million, with ~~$988.3~~$2,544.4 million categorized as ASC 310-20 ~~loans.~~loans, of which $56.6 million of loans were sold during the first quarter of 2020 for $36.4 million. For the loans sold, the acquisition date fair value was adjusted to the sale price resulting in no recognized gain or loss. The fair market value adjustment on these loans retained of ~~$26.0~~$28.9 million at ~~the~~ acquisition date is expected to be recognized into interest income on a level yield basis over the remaining expected life of the loans. Loans acquired with deteriorated credit quality (ASC 310-30) with a book value of ~~$5.3~~$25.6 million were recorded at the preliminary fair value of ~~$4.6~~$18.7 million, of which ~~$2.4~~$4.0 million were accounted for under the cost recovery method ~~in accordance with ASC 310-30~~ as cash flows ~~cannot~~could not be reasonably estimated, and therefore they are categorized as non-accrual. Upon adoption of CECL on January 1, 2020, $6.1 million of credit mark on OLBK PCD loans was reclassified to allowance for credit loss. At June 30, 2020, the allowance for credit losses on individually analyzed OLBK-acquired loans was $6.1 million. The carrying amount of loans acquired with deteriorated credit quality at June 30, ~~2019~~2020 was ~~$3.1~~$20.8 million, while the outstanding customer balance was ~~$3.6 million. At June 30, 2019, no allowance for loan losses has been recognized related to the FFKT-acquired impaired~~$21.3 million, and included $2.2 million of non-performing loans. Certain acquired underperforming loans with an acquired book value of $45.2 million were sold during the fourth quarter of 2018 for $32.9 million. The acquisition date fair value of the acquired loans was adjusted to the sale price resulting in no recognized gain or loss.

~~The following table provides changes in accretable yield for loans acquired with deteriorated credit quality:~~

	Age Analysis 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)		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 June 30, 2019
As of June 30, 2020
Commercial real estate:
Land and construction															$	664,121	$	2,052	$	-	$	5,313	$	7,365	$	671,486	$	4,891
Improved property																4,991,167		7,524		1,549		22,731		31,804		5,022,971		13,973
Total commercial real estate																5,655,288		9,576		1,549		28,044		39,169		5,694,457		18,864
Commercial and industrial																2,479,555		2,965		2,750		10,826		16,541		2,496,096		8,363
Residential real estate																1,864,748		2,140		8,428		18,228		28,796		1,893,544		8,343
Home equity																639,617		1,934		827		3,945		6,706		646,323		714
Consumer																340,728		1,261		986		748		2,995		343,723		619
Total portfolio loans																10,979,936		17,876		14,540		61,791		94,207		11,074,143		36,903
Loans held for sale																53,324		—		—		—		—		53,324		—
Total loans															$	11,033,260	$	17,876	$	14,540	$	61,791	$	94,207	$	11,127,467	$	36,903

Nonperforming loans included above are as follows:
Non-accrual loans															$	9,016	$	626	$	1,036	$	24,780		26,442	$	35,458
TDRs accruing interest ⁽¹⁾																4,838		4		155		108		267		5,105
Total non-performing															$	13,854	$	630	$	1,191	$	24,888	$	26,709	$	40,563

As of December 31, 2019
Commercial real estate:
Land and construction	$	482,016	$	965	$	45	$	20	$	1,030	$	483,046	$	—	$	776,153	$	529	$	121	$	348	$	998	$	777,151	$	26
Improved property		3,382,311		2,297		1,486		8,493		12,276		3,394,587		587		4,921,721		10,207		5,639		10,290		26,136		4,947,857		4,709
Total commercial real estate		3,864,327		3,262		1,531		8,513		13,306		3,877,633		587		5,697,874		10,736		5,760		10,638		27,134		5,725,008		4,735
Commercial and industrial		1,296,878		922		142		2,635		3,699		1,300,577		97		1,635,232		2,519		2,813		4,135		9,467		1,644,699		1,793
Residential real estate		1,617,430		5,962		2,449		7,772		16,183		1,633,613		1,173		1,850,806		4,421		5,372		13,048		22,841		1,873,647		3,643
Home equity		584,058		2,073		412		3,760		6,245		590,303		533		641,026		3,323		621		4,708		8,652		649,678		985
Consumer		333,279		1,682		506		261		2,449		335,728		244		370,934		2,537		965		517		4,019		374,953		457
Total portfolio loans		7,695,972		13,901		5,040		22,941		41,882		7,737,854		2,634		10,195,872		23,536		15,531		33,046		72,113		10,267,985		11,613
Loans held for sale		18,649		—		—		—		—		18,649		—		43,013		—		—		—		—		43,013		—
Total loans	$	7,714,621	$	13,901	$	5,040	$	22,941	$	41,882	$	7,756,503	$	2,634	$	10,238,885	$	23,536	$	15,531	$	33,046	$	72,113	$	10,310,998	$	11,613

Impaired loans included above are as follows:
Non-accrual loans	$	9,310	$	1,170	$	2,169	$	20,249		23,588	$	32,898			$	21,061	$	897	$	1,559	$	21,396		23,852	$	44,913
TDRs accruing interest ⁽¹⁾		5,273		10		146		58		214		5,487				5,113		151		130		37		318		5,431
Total impaired	$	14,583	$	1,180	$	2,315	$	20,307	$	23,802	$	38,385			$	26,174	$	1,048	$	1,689	$	21,433	$	24,170	$	50,344

As of December 31, 2018
Commercial real estate:
Land and construction	$	526,660	$	62	$	1,350	$	—	$	1,412	$	528,072	$	—
Improved property		3,314,765		2,266		2,250		6,342		10,858		3,325,623		175
Total commercial real estate		3,841,425		2,328		3,600		6,342		12,270		3,853,695		175
Commercial and industrial		1,261,536		323		594		3,007		3,924		1,265,460		13
Residential real estate		1,593,519		2,717		5,001		10,370		18,088		1,611,607		2,820
Home equity		591,623		2,500		1,273		3,935		7,708		599,331		705
Consumer		322,584		2,084		1,007		513		3,604		326,188		364
Total portfolio loans		7,610,687		9,952		11,475		24,167		45,594		7,656,281		4,077
Loans held for sale		8,994		—		—		—		—		8,994		—
Total loans	$	7,619,681	$	9,952	$	11,475	$	24,167	$	45,594	$	7,665,275	$	4,077

Impaired loans included above are as follows:
Non-accrual loans	$	8,910	$	337	$	1,370	$	20,083		21,790	$	30,700
TDRs accruing interest ⁽¹⁾		5,586		59		92		7		158		5,744
Total impaired	$	14,496	$	396	$	1,462	$	20,090	$	21,948	$	36,444

⁽¹⁾~~Loans 90 days or more past due and accruing interest exclude TDRs 90 days or more past due and accruing interest.~~

	Impaired Loans												Nonperforming Loans
	June 30, 2019						December 31, 2018						June 30, 2020						December 31, 2019
	Unpaid						Unpaid						Unpaid						Unpaid
	Principal		Recorded		Related		Principal		Recorded		Related		Principal		Recorded		Related		Principal		Recorded		Related
(unaudited, in thousands)	Balance (1)		Investment		Allowance		Balance (1)		Investment		Allowance		Balance (1)		Investment		Allowance		Balance (1)		Investment		Allowance
With no related specific allowance recorded:
Commercial real estate:
Land and construction	$	347	$	295	$	—	$	—	$	—	$	—	$	655	$	605	$	—	$	616	$	580	$	—
Improved property		13,499		7,312		—		14,038		9,293		—		9,969		7,925		—		5,097		4,229		—
Commercial and industrial		4,086		2,854		—		4,610		3,428		—		4,147		2,896		—		15,182		14,313		—
Residential real estate		13,572		11,896		—		20,270		18,016		—		22,605		20,095		—		17,753		15,952		—
Home equity		5,247		4,450		—		5,924		5,036		—		7,118		6,017		—		6,523		5,610		—
Consumer		416		311		—		846		671		—		665		393		—		546		413		—
Total impaired loans without a specific allowance		37,167		27,118		—		45,688		36,444		—
Total nonperforming loans without a specific allowance														45,159		37,931		—		45,717		41,097		—
With a specific allowance recorded:
Commercial real estate:
Land and construction		—		—		—		—		—		—		—		—		—		—		—		—
Improved property		5,211		5,157		1,479		—		—		—		2,632		2,632		166		4,207		3,907		93
Commercial and industrial		194		192		11		—		—		—		—		—		—		193		191		10
Residential real estate		5,358		4,922		12		—		—		—		—		—		—		4,772		4,392		14
Home equity		990		922		8		—		—		—		—		—		—		724		704		6
Consumer		113		74		1		—		—		—		—		—		—		104		53		1
Total impaired loans with a specific allowance		11,866		11,267		1,511		—		—		—
Total impaired loans	$	49,033	$	38,385	$	1,511	$	45,688	$	36,444	$	—
Total nonperforming loans with a specific allowance														2,632		2,632		166		10,000		9,247		124
Total nonperforming loans													$	47,791	$	40,563	$	166	$	55,717	$	50,344	$	124

⁽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 impaired loans.

Impaired Loans

For the Three Months Ended

For the Six Months Ended

June 30, 2019

June 30, 2018

June 30, 2019

June 30, 2018

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

$
290

$
—

$
400

$
—

$
193

$
—

$
346

$
—

Improved property

7,287

—

10,604

23

7,955

—

11,357

368

Commercial and industrial

2,961

—

3,036

2

3,116

—

3,008

4

Residential real estate

11,845

—

18,264

61

13,902

—

18,434

127

Home equity

4,487

—

5,068

6

4,670

—

5,098

11

Consumer

337

—

758

2

448

—

823

5

Total impaired loans without a specific
allowance

27,207

—

38,130

94

30,284

—

39,066

515

With a specific allowance recorded:

Commercial real estate:

Land and construction

—

—

—

—

—

—

—

—

Improved property

3,645

14

1,052

—

2,430

28

1,403

—

Commercial and industrial

250

4

—

—

166

7

—

—

Residential real estate

5,000

60

—

—

3,333

118

—

—

Home equity

859

7

—

—

573

15

—

—

Consumer

89

1

—

—

59

2

—

—

Total impaired loans with a specific allowance

9,843

86

1,052

—

6,561

170

1,403

—

Total impaired loans

$
37,050

$
86

$
39,182

$
94

$
36,845

$
170

$
40,469

$
515

⁽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 impaired loans.

	Nonperforming Loans
	For the Three Months Ended								For the Six Months Ended
	June 30, 2020				June 30, 2019				June 30, 2020				June 30, 2019
	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	$	405	$	—	$	290	$	—	$	463	$	—	$	193	$	—
Improved property		7,349		15		7,287		—		6,309		35		7,955		—
Commercial and industrial		2,862		3		2,961		—		6,679		6		3,116		—
Residential real estate		20,541		43		11,845		—		19,011		98		13,902		—
Home equity		6,015		6		4,487		—		5,880		12		4,670		—
Consumer		380		—		337		—		391		1		448		—
Total nonperforming loans without a specific allowance		37,552		67		27,207		—		38,733		152		30,284		—
With a specific allowance recorded:
Commercial real estate:
Land and construction		—		—		—		—		—		—		—		—
Improved property		2,632		—		3,645		14		3,057		—		2,430		28
Commercial and industrial		—		—		250		4		64		—		166		7
Residential real estate		—		—		5,000		60		1,464		—		3,333		118
Home equity		—		—		859		7		235		—		573		15
Consumer		—		—		89		1		18		—		59		2
Total nonperforming loans with a specific allowance		2,632		—		9,843		86		4,838		—		6,561		170
Total nonperforming loans	$	40,184	$	67	$	37,050	$	86	$	43,571	$	152	$	36,845	$	170

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

	Non-accrual Loans ⁽¹⁾				Non-accrual Loans ⁽¹⁾
	June 30,		December 31,		June 30,		December 31,
(unaudited, in thousands)	2019		2018		2020		2019
Commercial real estate:
Land and construction	$	295	$	—	$	605	$	580
Improved property		11,726		8,413		9,468		6,815
Total commercial real estate		12,021		8,413		10,073		7,395
Commercial and industrial		2,854		3,260		2,732		14,313
Residential real estate		12,813		13,831		16,677		16,867
Home equity		4,886		4,610		5,612		5,903
Consumer		324		586		364		435
Total	$	32,898	$	30,700	$	35,458	$	44,913

⁽¹⁾At June 30, 2019, there were three borrowers with loans greater than $1.0 million totaling $8.2 million, as compared to one borrower with a loan greater than $1.0 million totaling $3.4 million at December 31, 2018. Total non-accrual loans include loans that are also restructured. Such loans are also set forth in the following table as non-accrual TDRs.

As of June 30, ~~2019~~2020 and December 31, ~~2018,~~2019, there were no0 TDRs greater than $1.0 million. 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 ~~three~~six months. ~~WesBanco~~Wesbanco had unfunded commitments to debtors whose loans were classified as impaired of $0.2 million and ~~$0.1~~$3.3 million as of June 30, ~~2019~~2020 and December 31, ~~2018.~~2019, respectively.

The following tables present details related to loans identified as TDRs during the three and six months ended June 30, ~~2019~~2020 and ~~2018,~~2019, respectively:

	New TDRs (1)												New TDRs (1)
	For the Three Months Ended												For the Three Months Ended
	June 30, 2019						June 30, 2018						June 30, 2020						June 30, 2019
			Pre-		Post-				Pre-		Post-				Pre-		Post-				Pre-		Post-
			Modification		Modification				Modification		Modification				Modification		Modification				Modification		Modification
			Outstanding		Outstanding				Outstanding		Outstanding				Outstanding		Outstanding				Outstanding		Outstanding
	Number of		Recorded		Recorded		Number of		Recorded		Recorded		Number of		Recorded		Recorded		Number of		Recorded		Recorded
(unaudited, dollars in thousands)	Modifications		Investment		Investment		Modifications		Investment		Investment		Modifications		Investment		Investment		Modifications		Investment		Investment
Commercial real estate:
Land and construction		—	$	—	$	—		—	$	—	$	—		—	$	—	$	—		—	$	—	$	—
Improved Property		—		—		—		—		—		—		—		—		—		—		—		—
Total commercial real estate		—		—		—		—		—		—		—		—		—		—		—		—
Commercial and industrial		1		44		40		1		9		9		—		—		—		1		44		40
Residential real estate		—		—		—		—		—		—		—		—		—		—		—		—
Home equity		1		199		156		1		20		20		1		49		48		1		199		156
Consumer		—		—		—		2		39		36		1		8		8		—		—		—
Total		2	$	243	$	196		4	$	68	$	65		2	$	57	$	56		2	$	243	$	196

													New TDRs (1)
													For the Six Months Ended
													June 30, 2020						June 30, 2019
															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														—		—		—		—		—		—
Total commercial real estate														—		—		—		—		—		—
Commercial and industrial														—		—		—		1		44		40
Residential real estate														2		332		328		4		194		188
Home equity														1		50		48		3		386		340
Consumer														1		8		8		1		15		13
Total														4	$	390	$	384		9	$	639	$	581

The following table summarizes TDRs which defaulted (defined as past due 90 days) during the six months ended June 30, ~~2019~~2020 and ~~2018,~~2019, respectively, that were restructured within the last twelve months prior to June 30, ~~2019~~2020 and ~~2018,~~2019, respectively:

	Defaulted TDRs ⁽¹⁾								Defaulted TDRs ⁽¹⁾
	For the Six Months Ended								For the Six Months Ended
	June 30, 2019				June 30, 2018				June 30, 2020				June 30, 2019
	Number of		Recorded		Number of		Recorded		Number of		Recorded		Number of		Recorded
(unaudited, dollars in thousands)	Defaults		Investment		Defaults		Investment		Defaults		Investment		Defaults		Investment
Commercial real estate:
Land and construction		—	$	—		—	$	—		—	$	—		—	$	—
Improved property		—		—		1		145		—		—		—		—
Total commercial real estate		—		—		1		145		—		—		—		—
Commercial and industrial		—		—		—		—		—		—		—		—
Residential real estate		1		97		1		121		1		155		1		97
Home equity		—		—		1		7		—		—		—		—
Consumer		1		13		—		—		—		—		1		13
Total		2	$	110		3	$	273		1	$	155		2	$	110

⁽¹⁾~~Excludes loans that were either charged-off or cured by period end. The recorded investment is as of June 30, 2019 and 2018, 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 U.S. 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 Statements, as well other requirements. Based on this guidance, Wesbanco does not classify the COVID-19 loan modifications as TDRs, nor are the customers considered past due with regards 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 3,540 loans totaling $2.1 billion of which $1.9 billion are currently in their deferral period as of June 30, 2020. Wesbanco 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.

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

	Loans As of June 30, 2020
	Amortized Cost Basis by Origination Year
(unaudited, in thousands)	2020		2019			2018			2017			2016			Prior			Revolving Loans Amortized Cost Basis			Revolving Loans Converted to Term		Total
Commercial real estate: land and construction
Risk rating:
Pass	$	66,390	$	257,532		$	163,839		$	62,088		$	20,357		$	36,752		$	50,103		$	—	$	657,061
Criticized - compromised		—		2,833			3,822			352			1,065			1,757			245			—		10,074
Classified - substandard		—		—			812			—			298			3,241			—			—		4,351
Classified - doubtful		—		—			—			—			—			—			—			—		—
Total	$	66,390	$	260,365		$	168,473		$	62,440		$	21,720		$	41,750		$	50,348		$	—	$	671,486
Commercial real estate: land and construction
Current-period net write-offs	$	—	$	—		$	—		$	61		$	—		$	15		$	—		$	—	$	76

Commercial real estate: improved property
Risk rating:
Pass	$	452,689	$	755,545		$	632,680		$	582,849		$	699,610		$	1,599,975		$	110,133		$	—	$	4,833,481
Criticized - compromised		—		5,172			9,468			23,610			8,001			66,255			1,452			—		113,958
Classified - substandard		—		70			5,315			7,869			10,075			52,203			—			—		75,532
Classified - doubtful		—		—			—			—			—			—			—			—		—
Total	$	452,689	$	760,787		$	647,463		$	614,328		$	717,686		$	1,718,433		$	111,585		$	—	$	5,022,971
Commercial real estate: improved property
Current-period net write-offs	$	—	$	—		$	—		$	13		$	(1,638	)	$	126		$	—		$	—	$	(1,499	)

Commercial and industrial
Risk rating:
Pass	$	921,736	$	286,373		$	221,620		$	171,362		$	98,766		$	312,874		$	440,427		$	146	$	2,453,304
Criticized - compromised		28		1,554			4,256			1,344			250			11,020			6,096			—		24,548
Classified - substandard		—		687			885			2,052			1,489			6,827			6,304			—		18,244
Classified - doubtful		—		—			—			—			—			—			—			—		—
Total	$	921,764	$	288,614		$	226,761		$	174,758		$	100,505		$	330,721		$	452,827		$	146	$	2,496,096
Commercial and industrial
Current-period net write-offs	$	—	$	—		$	(817	)	$	(171	)	$	(39	)	$	(529	)	$	(1,404	)	$	—	$	(2,960	)

Residential real estate
Loan delinquency:
Current	$	217,501	$	299,896		$	208,763		$	140,025		$	200,262		$	796,346		$	1,955		$	—	$	1,864,748
30-59 days past due		—		—			—			92			—			2,048			—			—		2,140
60-89 days past due		299		3,382			-			303			336			4,108			—			—		8,428
90 days or more past due		572		66			1,344			761			1,065			14,420			—			—		18,228
Total	$	218,372	$	303,344		$	210,107		$	141,181		$	201,663		$	816,922		$	1,955		$	—	$	1,893,544
Residential real estate
Current-period net write-offs	$	—	$	(24	)	$	(8	)	$	(11	)	$	(81	)	$	(167	)	$	—		$	—	$	(291	)

Home equity
Loan delinquency:
Current	$	12,460	$	4,609		$	4,864		$	1,431		$	1,208		$	19,416		$	582,334		$	13,295	$	639,617
30-59 days past due		—		—			—			—			72			374			1,365			123		1,934
60-89 days past due		—		6			45			—			—			322			350			104		827
90 days or more past due		—		10			17			2			48			2,517			913			438		3,945
Total	$	12,460	$	4,625		$	4,926		$	1,433		$	1,328		$	22,629		$	584,962		$	13,960	$	646,323
Home equity
Current-period net write-offs	$	—	$	—		$	—		$	—		$	—		$	82		$	(389	)	$	—	$	(307	)

Consumer
Loan delinquency:
Current	$	41,383	$	111,993		$	51,145		$	30,764		$	19,165		$	62,345		$	23,735		$	198	$	340,728
30-59 days past due		88		354			220			236			92			261			10			—		1,261
60-89 days past due		76		256			93			201			81			192			87			—		986
90 days or more past due		42		150			128			24			47			341			16			—		748
Total	$	41,589	$	112,753		$	51,586		$	31,225		$	19,385		$	63,139		$	23,848		$	198	$	343,723
Consumer
Current-period net write-offs	$	—	$	(552	)	$	(372	)	$	(344	)	$	(111	)	$	(36	)	$	—		$	—	$	(1,415	)

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

	June 30,		December 31,		June 30,		December 31,
(unaudited, in thousands)	2019		2018		2020		2019
Other real estate owned	$	4,891	$	7,173	$	1,191	$	4,062
Repossessed assets		82		92		21		116
Total other real estate owned and repossessed assets	$	4,973	$	7,265	$	1,212	$	4,178

Residential real estate included in other real estate owned at June 30, ~~2019~~2020 and December 31, ~~2018~~2019 was ~~$1.2~~$0.7 million and ~~$1.3~~$0.6 million, respectively. At June 30, ~~2019~~2020 and December 31, ~~2018,~~2019, formal foreclosure proceedings were in process on residential real estate loans totaling ~~$5.8~~$5.6 million and ~~$6.0~~$8.1 million, respectively.

Operating leases are recorded as a right of use (“ROU”) asset and operating lease liability, included in premises and equipment, net and other liabilities, respectively, on the consolidated balance sheet beginning January 1, 2019 when WesBanco adopted ASU 2016-02 prospectively. Operating lease ROU assets represent the right to use an underlying asset during the lease term and operating lease liabilities represent our obligation to make lease payments arising from the lease. ROU assets and operating lease liabilities are recognized at lease commencement based on the present value of the remaining lease payments using a discount rate that represents our incremental borrowing rate at the lease commencement date. Operating lease expense, which is comprised of amortization of the ROU asset and the implicit interest accreted on the operating lease liability, is recognized on a straight-line basis over the lease term, and is recorded primarily in net occupancy expense in the consolidated statements of comprehensive income.

Operating leases relate primarily to bank branches, office space and license agreements with remaining lease terms of generally 1 to 21 years, which include options for multiple five- and ten- year extensions, with a weighted-average lease term of 9 years. As of June 30, 2019, operating lease ROU assets and liabilities were $18.2 million and $21.2 million, respectively. The lease expense for operating leases was $0.7 million and $1.3 million for the three and six months ended June 30, 2019, respectively. The weighted average discount rate was 3.29% as of June 30, 2019.

~~Future minimum lease payments under non-cancellable leases with initial or remaining lease terms in excess of one year at June 30, 2019 are as follows (unaudited, in thousands~~):

~~WesBanco~~Wesbanco is exposed to certain risks arising from both its business operations and economic conditions. ~~WesBanco~~Wesbanco principally manages its exposures to a wide variety of business and operational risks through management of its core business activities. ~~WesBanco~~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~~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~~Wesbanco’s assets or liabilities. ~~WesBanco~~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 Bank’s assets and liabilities are equally distributed but also have similar maturities.

~~WesBanco~~Wesbanco executes interest rate swaps with commercial banking customers to facilitate their respective risk management strategies. Those interest rate swaps are simultaneously hedged by offsetting interest rate swaps that ~~WesBanco~~Wesbanco executes with a third party, so that ~~WesBanco~~Wesbanco minimizes its net risk exposure resulting from such transactions. As the interest rate swaps associated with this program do not meet the strict hedge accounting requirements of ~~FASB~~ ASC 815, changes in the fair value of both the customer swaps and the offsetting third-party swaps are recognized directly in earnings. As of June 30, ~~2019~~2020 and December 31, ~~2018, WesBanco~~2019, Wesbanco had 5391 and ~~43,~~65, respectively, customer interest rate swaps with an aggregate notional amount of ~~$320.1~~$599.3 million and ~~$229.8~~$399.9 million, respectively, related to this program. During the six months ended June 30, 2020 and 2019, ~~and 2018, WesBanco~~respectively, Wesbanco recognized net losses of ~~$1.1~~$3.3 million and ~~net gains of $0.2~~$1.1 million, respectively, related to the changes in fair value of these swaps. Additionally, ~~WesBanco~~Wesbanco recognized ~~$1.9~~$6.1 million and ~~$0.5~~$1.9 million of income for the related swap fees for the six months ended June 30, 2020 and 2019, 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 by the lead bank in a loan syndication. As of June 30, 2020 and ~~2018,~~December 31, 2019, Wesbanco had 11 and 10, respectively, risk participation in agreements with an aggregate notional amount of $96.1 million and $96.5 million, respectively. As of June 30, 2020 and December 31, 2019, Wesbanco had 1 risk participation out agreement with an aggregate notional amount of $6.9 million and $7.0 million, respectively.

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~~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~~Wesbanco sells loans to the secondary market on 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~~Wesbanco enters into forward TBA contracts to manage the interest rate risk between the loan commitment and the closing of the loan. The total balance of forward TBA contracts entered into was $159.5 million and $50.0 million at June 30, 2020 and December 31, 2019, respectively. Additionally, Wesbanco recognized losses of $3.8 million and $0.9 million, respectively, for the six months ended June 30, 2020 and 2019 related to the changes in fair value of these contracts. The loans sold on a best efforts basis are committed to an investor simultaneous to the interest rate commitment with the borrower.

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~~Wesbanco’s derivatives is designated in a qualifying hedging relationship under ASC 815.

The table below presents the fair value of ~~WesBanco’s~~Wesbanco’s derivative financial instruments as well as their classification on the Balance Sheet as of June 30, ~~2019~~2020 and December 31, ~~2018:~~2019:

	June 30, 2019						December 31, 2018						June 30, 2020						December 31, 2019
(unaudited, in thousands)	Notional or Contractual Amount		Asset Derivatives		Liability Derivatives		Notional or Contractual Amount		Asset Derivatives		Liability Derivatives		Notional or Contractual Amount		Asset Derivatives		Liability Derivatives		Notional or Contractual Amount		Asset Derivatives		Liability Derivatives
Derivatives
Loan Swaps:
Interest rate swaps	$	320,134	$	13,281	$	14,774	$	229,778	$	4,650	$	5,081	$	599,324	$	55,708	$	60,493	$	399,860	$	14,585	$	16,117
Other contracts:
Interest rate loan commitments		44,062		58		—		16,113		125		—		131,099		1,189		—		34,236		44		—
Forward TBA contracts		61,000		—		166		20,000		—		234		159,500		—		759		50,000		—		88
Total derivatives			$	13,339	$	14,940			$	4,775	$	5,315			$	56,897	$	61,252			$	14,629	$	16,205

The table below presents the change in the fair value of the Company’s derivative financial instruments reflected within ~~the other~~ non-interest income ~~line item of~~on the consolidated income statement for the three and six months ended June 30, ~~2019~~2020 and ~~2018,~~2019, respectively.

		For the Three Months Ended June 30,						For the Six Months Ended June 30,						For the Three Months Ended June 30,						For the Six Months Ended June 30,
(unaudited, in thousands)	Location of Gain/(Loss)	2019			2018			2019			2018		Location of Gain/(Loss)	2020			2019			2020			2019
Interest rate swaps	Other income	$	(751	)	$	44		$	(1,063	)	$	211	Other income	$	(501	)	$	(751	)	$	(3,252	)	$	(1,063	)
Interest rate loan commitments	Mortgage banking income		(97	)		7			(67	)		143	Mortgage banking income		1,290			(97	)		1,145			(67	)
Forward TBA contracts	Mortgage banking income		(518	)		(11	)		(852	)		399	Mortgage banking income		(1,191	)		(518	)		(3,848	)		(852	)
Total		$	(1,366	)	$	40		$	(1,982	)	$	753		$	(402	)	$	(1,366	)	$	(5,955	)	$	(1,982	)

~~WesBanco~~Wesbanco has agreements with its derivative counterparties that contain a provision, which provides that if ~~WesBanco~~Wesbanco defaults on any of its indebtedness, including default where repayment of the indebtedness has not been accelerated by the lender, then ~~WesBanco~~Wesbanco could also be declared in default on its derivative obligations.

~~WesBanco~~Wesbanco also has agreements with certain of its derivative counterparties that contain a provision where if ~~WesBanco~~Wesbanco fails to maintain its status as either a well or adequately capitalized institution, then the counterparty could terminate the derivative positions and ~~WesBanco~~Wesbanco would be required to settle its obligations under the agreements.

~~WesBanco has~~Wesbanco had minimum collateral posting thresholds with certain of its derivative counterparties and ~~has~~had posted collateral with a market value of ~~$21.3~~$91.1 million as of June 30, ~~2019.~~2020. If ~~WesBanco~~Wesbanco had breached any of these provisions at June 30, ~~2019,~~2020, 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 counterparty.

The following table presents the net periodic pension cost for ~~WesBanco’s~~Wesbanco’s Defined Benefit Pension Plan (the “Plan”) and the related components:

	For the Three Months Ended June 30,						For the Six Months Ended June 30,						For the Three Months Ended June 30,						For the Six Months Ended June 30,
(unaudited, in thousands)	2019			2018			2019			2018			2020			2019			2020			2019
Service cost – benefits earned during year	$	560		$	707		$	1,114		$	1,406		$	568		$	560		$	1,136		$	1,114
Interest cost on projected benefit obligation		1,313			1,228			2,611			2,442			1,121			1,313			2,242			2,611
Expected return on plan assets		(2,211	)		(2,390	)		(4,398	)		(4,753	)		(2,594	)		(2,211	)		(5,188	)		(4,398	)
Amortization of prior service cost		6			7			13			13			(9	)		6			(18	)		13
Amortization of net loss		808			758			1,607			1,508			794			808			1,587			1,607
Net periodic pension cost	$	476		$	310		$	947		$	616
Net periodic pension (income) cost													$	(120	)	$	476		$	(241	)	$	947

The service cost of $1.1 million for both the six months ended June 30, 2020 and 2019 is included in salaries and wages, and the periodic pension income of $1.4 million and $0.2 million for the six months ended June 30, 2020 and 2019, respectively, is included in employee benefits.

The Plan covers all employees of ~~WesBanco~~Wesbanco and its subsidiaries who were hired on or before August 1, 2007 who satisfy minimum age and length of service requirements, and is not available to employees hired after such date.

A minimum required contribution of ~~$4.8~~$5.0 million is due for ~~2019,~~2020, which ~~could~~can be offset in whole or in part by the Plan’s ~~$52.5~~$60.9 million available credit balance. ~~WesBanco made~~Wesbanco currently does 0t expect to make a voluntary contribution ~~of $3.0 million~~ to the Plan in ~~June 2019.~~2020.

~~WesBanco assumed FFKT’s postretirement medical benefit plan, which covers FFKT employees who meet the service requirements.~~ Benefits provided under this plan are unfunded, and payments to the plan participants are made by WesBanco. The net periodic cost for the postretirement medical benefit plan totaled $59 thousand and $117 thousand for the three and six months ended June 30, 2019, respectively. The net periodic cost consisted of $115 thousand and $228 thousand in interest cost on projected benefit obligation for the three and six months ended June 30, 2019, respectively, which was partially offset by a $56 thousand and a $111 thousand benefit of prior service cost amortization for the three and six months ended June 30, 2019, respectively.

Fair value estimates are based on quoted market prices, if available, quoted market prices of similar assets or liabilities, or the present value of expected future cash flows and other valuation techniques. These valuations are significantly affected by discount rates, cash flow assumptions, and risk assumptions used. Therefore, fair value estimates may not be substantiated by comparison to independent markets and are not intended to reflect the proceeds that may be realizable in an immediate settlement of the instruments.

Fair value is determined at one point in time and is not representative of future value. These amounts do not reflect the total value of a going concern organization. Management does not have the intention to dispose of a significant portion of its assets and liabilities, and therefore the unrealized gains or losses should not be interpreted as a forecast of future earnings and cash flows.

The following is a discussion of assets and liabilities measured at fair value on a recurring basis and valuation techniques applied:

Investment securities: The fair value of investment securities which are measured on a recurring basis are determined primarily by obtaining quoted prices on nationally recognized securities exchanges or matrix pricing, which is a mathematical technique used widely in the industry to value debt securities without relying exclusively on quoted prices for the specific securities but rather by relying on the securities’ relationship to other similar securities. These securities are classified within level 1 or 2 in the fair value hierarchy. Positions that are not traded in active markets for which valuations are generated using assumptions not observable in the market or management’s best estimate are classified within level 3 of the fair value hierarchy. This includes certain specific municipal debt issues for which the credit quality and discount rate must be estimated.

Loans held for sale: Loans held for sale are carried, in aggregate, at fair value as ~~WesBanco has~~Wesbanco previously elected the fair value ~~option as of October 1, 2017.~~option. The use of a valuation model using quoted prices of similar instruments are significant inputs in arriving at the fair value and therefore loans held for sale are classified within level 2 of the fair value hierarchy.

Derivatives: ~~WesBanco~~Wesbanco enters into interest rate swap agreements with qualifying commercial customers to meet their financing, interest rate and other risk management needs. These agreements provide the customer the ability to convert from variable to fixed interest rates. The credit risk associated with derivatives executed with customers is essentially the same as that involved in extending loans and is subject to normal credit policies and monitoring. Those interest rate swaps are economically hedged by offsetting interest rate swaps that ~~WesBanco~~Wesbanco executes with derivative counterparties in order to offset its exposure on the fixed components of the customer interest rate swap agreements. The interest rate swap agreement with the loan customer and with the counterparty is reported at fair value in other assets and other liabilities on the consolidated balance sheet with any resulting gain or loss recorded in current period earnings as other income and other expense.

~~WesBanco~~Wesbanco enters into forward TBA contracts to manage the interest rate risk between the loan commitments to the customer and the closing of the loan for loans that will be sold on a mandatory basis to secondary market investors. The forward TBA contract is reported at fair value in other assets and other liabilities on the consolidated balance sheet with any resulting gain or loss recorded in current period’s earnings as mortgage banking income.

~~WesBanco~~Wesbanco determines the fair value for derivatives using widely accepted valuation techniques including discounted cash flow analysis on the expected cash flows of each derivative. This analysis reflects contractual terms of the derivative, including the period to maturity, and uses observable market-based inputs, including interest rate curves and implied volatilities. ~~WesBanco~~Wesbanco incorporates credit valuation adjustments to appropriately reflect both its own non-performance risk and the respective counterparty’s non-performance risk in the fair value measurements.

We may be required from time to time to measure certain assets and liabilities at fair value on a nonrecurring basis in accordance with GAAP. These adjustments to fair value usually result from the application of lower of cost or market accounting or write-downs of individual assets and liabilities.

Individually-evaluated nonperforming loans:Individually-evaluated non-performing loans are carried at the amortized cost basis less the specific allowance calculated with the CECL. Since these loans are nonperforming, cash flows could not be estimated and thus are calculated using a cost basis approach or collateral value approach.

Other real estate owned and repossessed assets: Other real estate owned and repossessed assets are carried at the lower of the investment in the assets or the fair value of the assets less estimated selling costs. The use of independent appraisals and management’s best judgment are significant inputs in arriving at the fair value measure of the underlying collateral, and therefore other real estate owned and repossessed assets are classified within level 3 of the fair value hierarchy.

The fair value amounts presented in the table below are intended to permit reconciliation of the fair value hierarchy to the amounts presented in the statement of financial position. The following tables set forth ~~WesBanco’s~~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~~2020 and December 31, ~~2018:~~2019:

			June 30, 2019								June 30, 2020
			Fair Value Measurements Using:								Fair Value Measurements Using:
	June 30,		Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs		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)		2020		(level 1)		(level 2)		(level 3)
Recurring fair value measurements
Equity securities	$	11,817	$	11,817	$	—	$	—	$	12,277	$	11,992	$	—	$	285
Available-for-sale debt securities
U.S. Treasury		29,781		—		29,781		—		19,979		—		19,979		—
U.S. Government sponsored entities and agencies		134,587		—		134,587		—		162,913		—		162,913		—
Residential mortgage-backed securities and collateralized mortgage obligations of government agencies		1,563,042		—		1,563,042		—		1,492,635		—		1,492,635		—
Commercial mortgage-backed securities and collateralized mortgage obligations of government sponsored entities and agencies		178,656		—		178,656		—		221,365		—		221,365		—
Obligations of state and political subdivisions		183,178		—		181,576		1,602		132,229		—		130,603		1,626
Corporate debt securities		40,040		—		40,040		—		44,828		—		44,828		—
Total available-for-sale debt securities	$	2,129,284	$	—	$	2,127,682	$	1,602	$	2,073,949	$	—	$	2,072,323	$	1,626
Loans held for sale		18,649		—		18,649		—		53,324		—		53,324		—
Other assets - interest rate derivatives agreements		13,281		—		13,281		—		55,708		—		55,708		—
Total assets recurring fair value measurements	$	2,173,031	$	11,817	$	2,159,612	$	1,602	$	2,195,258	$	11,992	$	2,181,355	$	1,911

Other liabilities - interest rate derivatives agreements	$	14,774	$	—	$	14,774	$	—	$	60,493	$	—	$	60,493	$	—
Total liabilities recurring fair value measurements	$	14,774	$	—	$	14,774	$	—	$	60,493	$	—	$	60,493	$	—

Nonrecurring fair value measurements
Impaired Loans	$	2,434		—		—	$	2,434
Individually-evaluated nonperforming loans									$	2,466	$	—	$	—	$	2,466
Other real estate owned and repossessed assets		4,973		—		—		4,973		1,212		—		—		1,212
Total nonrecurring fair value measurements	$	7,407	$	—	$	—	$	7,407	$	3,678	$	—	$	—	$	3,678

			December 31, 2018								December 31, 2019
			Fair Value Measurements Using:								Fair Value Measurements Using:
	December 31,		Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs		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)		2019		(level 1)		(level 2)		(level 3)
Recurring fair value measurements
Equity securities	$	11,737	$	11,737	$	—	$	—	$	12,343	$	12,343	$	—	$	—
Available-for-sale debt securities
U.S. Treasury		19,878		—		19,878		—		32,836		—		32,836		—
U.S. Government sponsored entities and agencies		141,652		—		141,652		—		159,628		—		159,628		—
Residential mortgage-backed securities and collateralized mortgage obligations of government agencies		1,561,255		—		1,561,255		—		1,815,987		—		1,815,987		—
Commercial mortgage-backed securities and collateralized mortgage obligations of government sponsored entities and agencies		168,972		—		168,972		—		190,409		—		190,409		—
Obligations of state and political subdivisions		185,114		—		183,611		1,503		145,609		—		144,004		1,605
Corporate debt securities		37,258		—		37,258		—		49,089		—		49,089		—
Total available-for-sale debt securities	$	2,114,129	$	—	$	2,112,626	$	1,503	$	2,393,558	$	—	$	2,391,953	$	1,605
Loans held for sale		8,994		—		8,994		—		43,013		—		43,013		—
Other assets - interest rate derivatives agreements		4,650		—		4,650		—		14,585		—		14,585		—
Total assets recurring fair value measurements	$	2,139,510	$	11,737	$	2,126,270	$	1,503	$	2,463,499	$	12,343	$	2,449,551	$	1,605

Other liabilities - interest rate derivatives agreements	$	5,081	$	—	$	5,081	$	—	$	16,117	$	—	$	16,117	$	—
Total liabilities recurring fair value measurements	$	5,081	$	—	$	5,081	$	—	$	16,117	$	—	$	16,117	$	—

Nonrecurring fair value measurements
Impaired loans									$	2,362	$	—	$	—	$	2,362
Other real estate owned and repossessed assets		7,265		—		—		7,265		4,178		—		—		4,178
Total nonrecurring fair value measurements	$	7,265	$	—	$	—	$	7,265	$	6,540	$	—	$	—	$	6,540

~~WesBanco’s~~Wesbanco’s policy is to recognize transfers between levels as of the actual date of the event or change in circumstances that caused the transfer. There were no0 significant transfers between level 1, 2 or 3 for the three and six months ended June 30, ~~2019~~2020 or for the year ended December 31, ~~2018.~~2019.

The following table presents additional quantitative information about assets measured at fair value on a nonrecurring basis and for which ~~WesBanco~~Wesbanco has utilized level 3 inputs to determine fair value:

Quantitative Information about Level 3 Fair Value Measurements

Fair Value

Valuation

Unobservable

Range (Weighted

Fair Value

Valuation

Unobservable

Range (Weighted

(unaudited, in thousands)

Estimate

Techniques

Input

Average)

Estimate

Techniques

Input

Average)

June 30, 2019

June 30, 2020

Individually-evaluated nonperforming loans

2,466

Appraisal of collateral ⁽¹⁾

Appraisal adjustments ⁽²⁾

—

Other real estate owned and repossessed assets

1,212

Appraisal of collateral ^{(1), (3)}

Liquidation expenses ⁽²⁾

—

December 31, 2019

Impaired loans

2,434

Appraisal of collateral ⁽¹⁾

Appraisal adjustments ⁽²⁾

(30.5%)/((30.5%)

2,362

Appraisal of collateral ⁽¹⁾

Appraisal adjustments ⁽²⁾

—

Liquidation expenses ⁽²⁾

(5.1%)/((5.1%)

Other real estate owned and repossessed assets

4,973

Appraisal of collateral ^{(1), (3)}

4,178

Appraisal of collateral ^{(1), (3)}

Liquidation expenses ⁽²⁾

—

December 31, 2018

Other real estate owned and repossessed assets

7,265

Appraisal of collateral ^{(1), (3)}

The estimated fair values of ~~WesBanco’s~~Wesbanco’s financial instruments are summarized below:

					Fair Value Measurements at										Fair Value Measurements at
					June 30, 2019										June 30, 2020
	Carrying		Fair Value		Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs		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)		Amount		Estimate		(level 1)		(level 2)		(level 3)
Financial Assets
Cash and due from banks	$	194,355	$	194,355	$	194,355	$	—	$	—	$	890,334	$	890,334	$	890,334	$	—	$	—
Equity securities		11,817		11,817		11,817		—		—		12,277		12,277		11,992		—		285
Available-for-sale debt securities		2,129,284		2,129,284		—		2,127,682		1,602		2,073,949		2,073,949		—		2,072,323		1,626
Held-to-maturity debt securities		900,605		921,534		—		920,989		545		765,599		802,666		—		802,180		486
Net loans		7,686,995		7,674,887		—		—		7,674,887		10,905,668		10,942,230		—		—		10,942,230
Loans held for sale		18,649		18,649		—		18,649		—		53,324		53,324		—		53,324		—
Other assets - interest rate derivatives		13,281		13,281		—		13,281		—		55,708		55,708		—		55,708		—
Accrued interest receivable		38,450		38,450		38,450		—		—		59,151		59,151		59,151		—		—

Financial Liabilities
Deposits		8,694,928		8,695,779		7,329,812		1,365,967		—		12,186,453		12,190,491		10,377,437		1,813,054		—
Federal Home Loan Bank borrowings		1,121,283		1,127,210		—		1,127,210		—		1,129,631		1,142,820		—		1,142,820		—
Other borrowings		296,148		296,574		293,205		3,369		—		390,777		391,314		391,314		—		—
Subordinated debt and junior subordinated debt		156,534		144,410		—		144,410		—		192,080		182,664		—		113,091		69,573
Other liabilities - interest rate derivatives		14,774		14,774		—		14,774		—		60,493		60,493		—		60,493		—
Accrued interest payable		6,559		6,559		6,559		—		—		6,040		6,040		6,040		—		—

					Fair Value Measurements at										Fair Value Measurements at
					December 31, 2018										December 31, 2019
	Carrying		Fair Value		Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs		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)		Amount		Estimate		(level 1)		(level 2)		(level 3)
Financial Assets
Cash and due from banks	$	169,186	$	169,186	$	169,186	$	—	$	—	$	234,796	$	234,796	$	234,796	$	—	$	—
Equity securities		11,737		11,737		11,737		—		—		12,343		12,343		12,343		—		—
Available-for-sale debt securities		2,114,129		2,114,129		—		2,112,626		1,503		2,393,558		2,393,558		—		2,391,953		1,605
Held-to-maturity debt securities		1,020,934		1,020,743		—		1,020,195		548		851,753		874,523		—		873,995		528
Net loans		7,607,333		7,422,825		—		—		7,422,825		10,215,556		10,297,989		—		—		10,297,989
Loans held for sale		8,994		8,994		—		8,994		—		43,013		43,013		—		43,013		—
Other assets - interest rate derivatives		4,650		4,650		—		4,650		—		14,585		14,585		—		14,585		—
Accrued interest receivable		38,853		38,853		38,853		—		—		43,648		43,648		43,648		—		—

Financial Liabilities
Deposits		8,831,633		8,836,390		7,376,023		1,460,367		—		11,004,006		10,989,818		8,948,086		2,041,732		—
Federal Home Loan Bank borrowings		1,054,174		1,051,401		—		1,051,401		—		1,415,615		1,420,302		—		1,420,302		—
Other borrowings		290,522		290,854		288,918		1,936		—		282,362		282,691		279,345		3,346		—
Subordinated debt and junior subordinated debt		189,842		174,448		—		174,448		—		199,869		188,349		—		122,934		65,415
Other liabilities - interest rate derivatives		5,081		5,081		—		5,081		—		16,117		16,117		—		16,117		—
Accrued interest payable		4,627		4,627		4,627		—		—		8,077		8,077		8,077		—		—

The following methods and assumptions were used to measure the fair value of financial instruments recorded at cost on ~~WesBanco’s~~Wesbanco’s consolidated balance sheets:

Cash and due from banks: The carrying amount for cash and due from banks is a reasonable estimate of fair value.

Held-to-maturity debt securities: Fair values for debt securities held-to-maturity are determined in the same manner as investment securities, which are described above.

Net loans: Fair values for loans are estimated using a discounted cash flow methodology. The discount rates take into account interest rates currently being offered to customers for loans with similar terms, the credit risk associated with the loan and other market factors, including liquidity. ~~WesBanco~~Wesbanco believes the discount rates are consistent with transactions occurring in the marketplace for both performing and distressed loan types. The carrying value is net of the allowance for loan losses and other associated premiums and discounts. Due to the significant judgment involved in evaluating credit quality, loans are classified within level 3 of the fair value hierarchy.

Accrued interest receivable: The carrying amount of accrued interest receivable approximates its fair value.

Deposits: The carrying amount is considered a reasonable estimate of fair value for demand, savings and other variable rate deposit accounts. The fair value of fixed maturity certificates of deposit is estimated by a discounted cash flow method using rates currently offered for deposits of similar remaining maturities.

Federal Home Loan Bank borrowings: The fair value of FHLB borrowings is based on rates currently available to ~~WesBanco~~Wesbanco for borrowings with similar terms and remaining maturities.

Other borrowings: The carrying amount of federal funds purchased and overnight sweep accounts generally approximate fair value. Other repurchase agreements are based on quoted market prices if available. If market prices are not available, for certain fixed and adjustable rate repurchase agreements, then quoted market prices of similar instruments are used.

Subordinated debt and junior subordinated debt: The fair value of subordinated debt is estimated using discounted cash flow analyses based on the current borrowing rates for similar types of borrowing arrangements. Due to the pooled nature of junior subordinated debt owed to unconsolidated subsidiary trusts, which are not actively traded, estimated fair value is based on recent similar transactions of single-issuer trust preferred securities.

Accrued interest payable: The carrying amount of accrued interest payable approximates its fair value.

Off-balance sheet financial instruments: Off-balance sheet financial instruments consist of commitments to extend credit, including letters of credit. Fair values for commitments to extend credit are estimated using the fees currently charged to enter into similar agreements, taking into account the remaining terms of the agreements and the present credit standing of the counterparties. The estimated fair value of the commitments to extend credit and letters of credit are insignificant and therefore are not presented in the above tables.

~~WesBanco adopted ASU 2014-09 as of January 1, 2018 under the modified retrospective approach and there was no material impact on WesBanco’s Consolidated Financial statements.~~ Interest income, net securities gains (losses) and bank-owned life insurance are not in scope of ASC 606, Revenue from Contracts with Customers. For the revenue streams in scope of ASC 606 - trust fees, service charges on deposits, net securities brokerage revenue, debit card sponsorship income, payment processing fees, electronic banking fees, mortgage banking income and net gain or loss on sale of other real estate owned – there are no significant judgements related to the amount and timing of revenue recognition.

Trust fees: Fees are earned over a period of time between monthly and annually, per the related fee schedule. The fees are earned ratably over the period for investment, safekeeping and other services performed by ~~WesBanco.~~Wesbanco. The fees are accrued when earned based on the daily asset value on the last day of the quarter. In most cases, the fees are directly debited from the customer account. WesMark fees consist of investment advisory fees and shareholder service fees and are paid to Wesbanco by the WesMark mutual funds on a monthly basis for Wesbanco’s involvement with the management of the funds.

Service charges on deposits: There are monthly service charges for both commercial and personal banking customers, which are earned over the month per the related fee schedule based on the customers’ deposits. There are also transaction-based fees, which are earned based on specific transactions or customer activity within the customers’ deposit accounts. These are earned at the time the transaction or customer activity occurs. The fees are debited from the customer account.

Net securities brokerage revenue: Commission income is earned based on customer transactions and management of investments. The commission income from customers’ transactions is recognized when the transaction is ~~complete.~~complete and approved. Annuity commissions are earned based upon the carrier’s commission rate for the annuity product chosen by the investing customer. The commission income from the management of investments over time is earned continuously over a quarterly period.

Debit card sponsorship income:Debit card sponsorship income is earned from Wesbanco’s sponsorship of its customers, which include independent service organizations, processors and other banks into different debit networks. For providing this service, the customers pay the bank a per transaction fee for each transaction processed through the network. In some cases, customers are also charged annual sponsorship fees and non-compliance fees as applicable. The fees are earned at the time the transaction or customer activity occurs. The fees are either directly debited from the customers' deposit accounts or are billed to the customer.

Payment processing fees: Payment processing fees are ~~fees~~ earned from the bill payment and electronic funds transfer (“EFT”) services provided under the name FirstNet. The fees are derived from both the individual consumer banking transactions and from businesses or service providers through monthly billing for total transactions occurring. These fees are earned at the time the transaction or customer activity occurs. The fees are debited from the customers’ deposit accounts or charged directly to the business or service provider.

Electronic banking fees: Interchange and ATM fees are earned based on customer and ATM transactions. Revenue is recognized when the transaction is settled.

Mortgage banking income: Income is earned when ~~WesBanco-originated~~Wesbanco-originated loans are sold to an investor on the secondary market. The investor bids on the loans. If the price is accepted, ~~WesBanco~~Wesbanco delivers the loan documents to the investor. Once received and approved by the investor, revenue is recognized and the loans are derecognized from the Consolidated Balance Sheet. Prior to the loans being sold, they are classified as loans held for sale. Additionally, the changes in the fair value of the loans held for sale, loan commitments and related derivatives are included in mortgage banking income.

Net gain or loss on sale of other real estate owned: Net gain or loss is recorded when other real estate is sold to a third party and the Bank collects substantially all of the consideration to which ~~WesBanco~~Wesbanco is entitled in exchange for the transfer of the property.

The following table summarizes the point of revenue recognition and the income recognized for each of the revenue streams for the three and six months ended June 30, ~~2019~~2020 and ~~2018,~~2019, respectively:


	Point of Revenue	For the Three Months Ended June 30,				For the Six Months Ended June 30,				Point of Revenue	For the Three Months Ended June 30,					For the Six Months Ended June 30,
(unaudited, in thousands)	Recognition	2019		2018		2019		2018		Recognition	2020			2019		2020		2019
Revenue Streams
Trust fees
Trust account fees	Over time	$	4,208	$	3,558	$	9,263	$	7,850	Over time	$	4,189		$	4,208	$	9,046	$	9,263
WesMark fees	Over time		2,131		2,194		4,191		4,405	Over time		2,013			2,131		4,108		4,191
Total trust fees			6,339		5,752		13,454		12,255			6,202			6,339		13,154		13,454
Service charges on deposits
Commercial banking fees	Over time		499		462		967		869	Over time		586			499		1,171		967
Personal service charges	At a point in time & over time		5,698		4,684		11,780		9,100	At a point in time and over time		3,737			5,698		9,769		11,780
Total service charges on deposits			6,197		5,146		12,747		9,969			4,323			6,197		10,940		12,747
Net securities brokerage revenue
Annuity commissions	At a point in time		1,454		1,310		2,815		2,510	At a point in time		845			1,454		1,883		2,815
Equity and debt security trades	At a point in time		103		87		206		189	At a point in time		94			103		253		206
Managed money	Over time		174		163		331		304	Over time		214			174		449		331
Trail commissions	Over time		242		249		481		476	Over time		231			242		478		481
Total net securities brokerage revenue			1,973		1,809		3,833		3,479			1,384			1,973		3,063		3,833

Debit card sponsorship income (1)										At a point in time and over time		644			—		1,351		—
Payment processing fees (1)	At a point in time & over time		785		—		1,433		—	At a point in time and over time		784			785		1,464		1,433
Electronic banking fees	At a point in time		7,154		5,728		13,046		10,558	At a point in time		4,066			7,154		8,320		13,046
Mortgage banking income	At a point in time		1,618		1,670		2,674		2,776	At a point in time		7,531			1,618		8,807		2,674
Net gain on other real estate owned and other assets	At a point in time		376		229		512		491
Net (loss) gain on other real estate owned and other assets										At a point in time		(66	)		376		103		512

The activity in accumulated other comprehensive income for the six months ended June 30, ~~2019~~2020 and ~~2018~~2019 is as follows:

	Accumulated Other Comprehensive Income/(Loss)⁽¹⁾												Accumulated Other Comprehensive Income/(Loss)⁽¹⁾
(unaudited, in thousands)	Defined Benefit Plans			Unrealized Gains (Losses) on Debt Securities Available-for-Sale			Unrealized Gains on Debt Securities Transferred from Available-for-Sale to Held-to-Maturity			Total			Defined Benefit Plans			Unrealized Gains (Losses) on Debt Securities Available-for-Sale			Unrealized Gains on Debt Securities Transferred from Available-for-Sale to Held-to-Maturity			Total
Balance at December 31, 2019													$	(17,468	)	$	18,644		$	25		$	1,201
Other comprehensive income before reclassifications														—			40,091			—			40,091
Amounts reclassified from accumulated other comprehensive income/(loss)														1,137			(1,906	)		(7	)		(776	)
Period change														1,137			38,185			(7	)		39,315
Balance at June 30, 2020													$	(16,331	)	$	56,829		$	18		$	40,516

Balance at December 31, 2018	$	(16,542	)	$	(21,522	)	$	193		$	(37,871	)	$	(16,542	)	$	(21,522	)	$	193		$	(37,871	)
Other comprehensive income before reclassifications		—			40,996			—			40,996			—			40,996			—			40,996
Amounts reclassified from accumulated other comprehensive income		1,129			(30	)		(111	)		988
Amounts reclassified from accumulated other comprehensive income/(loss)														1,129			(30	)		(111	)		988
Period change		1,129			40,966			(111	)		41,984			1,129			40,966			(111	)		41,984
Balance at June 30, 2019	$	(15,413	)	$	19,444		$	82		$	4,113		$	(15,413	)	$	19,444		$	82		$	4,113

Balance at December 31, 2017	$	(18,626	)	$	(13,250	)	$	381		$	(31,495	)
Other comprehensive income before reclassifications		—			(21,720	)		—			(21,720	)
Amounts reclassified from accumulated other comprehensive income		1,026			—			(100	)		926
Period change		1,026			(21,720	)		(100	)		(20,794	)
Adoption of Accounting Standard ASU 2016-01		—			(1,063	)		—			(1,063	)
Balance at June 30, 2018	$	(17,600	)	$	(36,033	)	$	281		$	(53,352	)

⁽¹⁾ ~~All amounts are net of tax. Related income tax expense or benefit is calculated using a combined Federal and State income tax rate approximating 23%.~~

The following table provides details about amounts reclassified from accumulated other comprehensive income for the three and six months ended June 30, ~~2019~~2020 and ~~2018, respectively:~~2019:

⁽¹⁾~~For additional detail related to unrealized gains on securities and related amounts reclassified from accumulated other comprehensive income, see Note 4, “Securities.”~~

⁽²⁾~~Included in the computation of net periodic pension cost. See Note 8, “Pension & Postretirement Medical Benefit~~

Commitments — In the normal course of business, ~~WesBanco~~Wesbanco offers off-balance sheet credit arrangements to enable its customers to meet their financing objectives. Those instruments involve, to varying degrees, elements of credit and interest rate risk in excess of the amount recognized in the financial statements. ~~WesBanco’s~~Wesbanco’s exposure to credit losses in the event of non-performance by the other parties to the financial instruments for commitments to extend credit and standby letters of credit is limited to the contractual amount of those instruments. ~~WesBanco~~Wesbanco uses the same credit policies in making commitments and conditional obligations as for all other lending. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. Since many of the commitments are expected to expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements. The allowance for credit losses associated with commitments was ~~$1.8~~$10.7 million and ~~$0.7~~$0.9 million as of June 30, ~~2019~~2020 and December 31, ~~2018,~~2019, respectively, and is included in other liabilities on the Consolidated Balance Sheets.

Letters of credit are conditional commitments issued by banks to guarantee the performance of a customer to a third party. Those guarantees are primarily issued to support public and private borrowing arrangements, including normal business activities, bond financing and similar transactions. Letters of credit are considered guarantees. The liability associated with letters of credit was $0.2 million as of June 30, ~~2019~~2020 and December 31, ~~2018.~~2019.

Contingent obligations to purchase loans funded by other entities include affordable housing plan guarantees, credit card guarantees, loans sold with recourse as well as obligations to the FHLB. Affordable housing plan guarantees are performance guarantees for various building project loans. The guarantee amortizes as the loan balances decrease. Credit card guarantees are credit card balances not owned by ~~WesBanco,~~Wesbanco, whereby the Bank guarantees the performance of the cardholder.

The following table presents total commitments to extend credit, guarantees and various letters of credit outstanding:

	June 30,		December 31,		June 30,		December 31,
(unaudited, in thousands)	2019		2018		2020		2019
Lines of credit	$	1,909,282	$	1,894,030	$	2,583,139	$	2,469,676
Loans approved but not closed		299,081		258,778		346,499		504,623
Overdraft limits		152,207		153,572		155,396		149,519
Letters of credit		45,960		42,841		57,709		57,205
Contingent obligations and other guarantees		48,654		61,509		115,393		81,551

Contingent Liabilities — ~~WesBanco~~Wesbanco is a party to various legal and administrative proceedings and claims. While any litigation contains an element of uncertainty, management does not believe that a material loss related to such proceedings or claims pending or known to be threatened is reasonably possible.

~~WesBanco~~Wesbanco operates ~~two~~2 reportable segments: community banking and trust and investment services. ~~WesBanco’s~~Wesbanco’s community banking segment offers services traditionally offered by full-service commercial banks, including commercial demand, individual demand and time deposit accounts, as well as commercial, mortgage and individual installment loans, and certain non-traditional offerings, such as insurance and securities brokerage services. The trust and investment services segment offers trust services as well as various alternative investment products including mutual funds. The market value of assets managed or held in custody by the trust and investment services segment was approximately $4.5 billion and ~~$4.0~~$4.5 billion at June 30, ~~2019~~2020 and ~~2018,~~2019, respectively. These assets are held by ~~WesBanco~~Wesbanco in fiduciary or agency capacities for their customers and therefore are not included as assets on ~~WesBanco’s~~Wesbanco’s Consolidated Balance Sheets.

			Trust and							Trust and
	Community		Investment				Community			Investment
(unaudited, in thousands)	Banking		Services		Consolidated		Banking			Services		Consolidated
For The Three Months Ended June 30, 2020
Interest and dividend income							$	134,694		$	—	$	134,694
Interest expense								15,681			—		15,681
Net interest income								119,013			—		119,013
Provision for credit losses								61,841			—		61,841
Net interest income after provision for credit losses								57,172			—		57,172
Non-interest income								26,659			6,201		32,860
Non-interest expense								81,588			3,914		85,502
Income before provision for income taxes								2,243			2,287		4,530
Provision for income taxes								(438	)		480		42
Net income							$	2,681		$	1,807	$	4,488

For The Three Months Ended June 30, 2019
Interest and dividend income	$	119,543	$	—	$	119,543	$	119,543		$	—	$	119,543
Interest expense		21,083		—		21,083		21,083			—		21,083
Net interest income		98,460		—		98,460		98,460			—		98,460
Provision for credit losses		2,747		—		2,747		2,747			—		2,747
Net interest income after provision for credit losses		95,713		—		95,713		95,713			—		95,713
Non-interest income		24,817		6,339		31,156		24,817			6,339		31,156
Non-interest expense		67,957		3,995		71,952		67,957			3,995		71,952
Income before provision for income taxes		52,573		2,344		54,917		52,573			2,344		54,917
Provision for income taxes		9,611		492		10,103		9,611			492		10,103
Net income	$	42,962	$	1,852	$	44,814	$	42,962		$	1,852	$	44,814

For The Three Months Ended June 30, 2018
For the Six Months Ended June 30, 2020
Interest and dividend income	$	98,888	$	—	$	98,888	$	277,142		$	—	$	277,142
Interest expense		16,541		—		16,541		37,968			—		37,968
Net interest income		82,347		—		82,347		239,174			—		239,174
Provision for credit losses		1,708		—		1,708		91,661			—		91,661
Net interest income after provision for credit losses		80,639		—		80,639		147,513			—		147,513
Non-interest income		17,656		5,752		23,408		47,715			13,154		60,869
Non-interest expense		60,026		3,517		63,543		168,505			8,330		176,835
Income before provision for income taxes		38,269		2,235		40,504		26,723			4,824		31,547
Provision for income taxes		6,865		470		7,335		2,650			1,013		3,663
Net income	$	31,404	$	1,765	$	33,169	$	24,073		$	3,811	$	27,884

For the Six Months Ended June 30, 2019
Interest and dividend income	$	238,596	$	—	$	238,596	$	238,596		$	—	$	238,596
Interest expense		41,774		—		41,774		41,774			—		41,774
Net interest income		196,822		—		196,822		196,822			—		196,822
Provision for credit losses		5,254		—		5,254		5,254			—		5,254
Net interest income after provision for credit losses		191,568		—		191,568		191,568			—		191,568
Non-interest income		45,475		13,454		58,929		45,475			13,454		58,929
Non-interest expense		138,233		8,152		146,385		138,233			8,152		146,385
Income before provision for income taxes		98,810		5,302		104,112		98,810			5,302		104,112
Provision for income taxes		17,848		1,113		18,961		17,848			1,113		18,961
Net income	$	80,962	$	4,189	$	85,151	$	80,962		$	4,189	$	85,151

For the Six Months Ended June 30, 2018
Interest and dividend income	$	185,203	$	—	$	185,203
Interest expense		29,667		—		29,667
Net interest income		155,536		—		155,536
Provision for credit losses		3,876		—		3,876
Net interest income after provision for credit losses		151,660		—		151,660
Non-interest income		35,236		12,255		47,491
Non-interest expense		110,920		7,194		118,114
Income before provision for income taxes		75,976		5,061		81,037
Provision for income taxes		13,276		1,063		14,339
Net income	$	62,700	$	3,998	$	66,698

Total non-fiduciary assets of the trust and investment services segment were $4.1 million (including $2.2 million of trust customer intangibles) and $3.9 million (including $2.6 million of trust customer intangibles) ~~and $1.7 million~~ at June 30, ~~2019~~2020 and ~~2018,~~2019, respectively. All other assets, including goodwill and the remainder of other intangible assets, were allocated to the Community Banking segment.

On July 23, 2019, WesBanco and Old Line Bancshares, Inc. (“Old Line”), a bank holding company headquartered in Bowie, MD with approximately $3.1 billion in assets, $2.4 billion in loans, $2.4 billion deposits, $0.4 billion in stockholders’ equity and 37 branches, jointly announced that a definitive Agreement and Plan of Merger was executed providing for the merger of Old Line with and into WesBanco. On the date of the announcement, the transaction was valued at approximately $500.1 million. Under the terms of the Agreement and Plan of Merger (“Agreement”), which has been approved by that board of directors of both companies, WesBanco will exchange its common stock for Old Line common stock at closing, subject to customary conditions. Old Line options will be exchanged for WesBanco shares, as adjusted as to exercise price and number of options to take into account the fixed exchange ratio stated in the Agreement. Old Line stockholders will be entitled to receive 0.7844 shares of WesBanco common stock per each share of Old Line common stock for a total value of $29.22 per share, as of the date of the announcement. The receipt by Old Line stockholders of shares of WesBanco common stock in exchange for their shares of Old Line common stock is anticipated to qualify as a tax-free exchange. The acquisition is subject to the approvals of the appropriate banking regulatory authorities and the stockholders of Old Line and WesBanco. It is expected that the transaction will be completed in the fourth quarter of 2019 or first quarter of 2020.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Management’s Discussion and Analysis (“MD&A”) represents an overview of the results of operations and financial condition of ~~WesBanco~~Wesbanco for the three and six months ended June 30, ~~2019.~~2020. This discussion and analysis should be read in conjunction with the Consolidated Financial Statements and Notes thereto.

Forward-looking statements in this report relating to ~~WesBanco’s~~Wesbanco’s plans, strategies, objectives, expectations, intentions and adequacy of resources, are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. The information contained in this report should be read in conjunction with ~~WesBanco’s~~Wesbanco’s Form 10-K for the year ended December 31, ~~2018~~2019 and documents subsequently filed by ~~WesBanco~~Wesbanco with the Securities and Exchange Commission (“SEC”), including ~~WesBanco’s~~Wesbanco’s Form 10-Q for the quarter ended March 31, ~~2019,~~2020, which are available at the SEC’s website, www.sec.gov or at ~~WesBanco’s~~Wesbanco’s website, ~~www.wesbanco.com.~~www.Wesbanco.com. Investors are cautioned that forward-looking statements, which are not historical fact, involve risks and uncertainties, including those detailed in Wesbanco’s most recent Annual Report on Form 10-K filed with the SEC under “Risk Factors” in Part I, Item 1A and under “Risk Factors” in Part II, Item 1A of ~~WesBanco’s Annual~~Wesbanco’s March 31, 2020 Quarterly Report on Form ~~10-K.~~10-Q. Such statements are subject to important factors that could cause actual results to differ materially from those contemplated by such statements, including, without limitation, that the businesses of WesBanco and Old Line may not be integrated successfully or such integration may take longer to accomplish than excepted; the expected cost savings and any revenue synergies from the merger of WesBanco and Old Line may not be fully realized within the expected timeframes; disruption from the merger of WesBanco and Old Line may make it more difficult to maintain relationships with clients, associates, or suppliers; the effects of changing regional and national economic ~~conditions;~~conditions including the effects of the COVID-19 pandemic; changes in interest rates, spreads on earning assets and interest-bearing liabilities, and associated interest rate sensitivity; sources of liquidity available to ~~WesBanco~~Wesbanco and its related subsidiary operations; potential future credit losses and the credit risk of commercial, real estate, and consumer loan customers and their borrowing activities; actions of the Federal Reserve Board, the ~~FDIC,~~Federal Deposit Insurance Corporation, the SEC, ~~FINRA,~~the Financial Institution Regulatory Authority, the Municipal Securities Rulemaking Board, the Securities Investors Protection Corporation, and other regulatory bodies; potential legislative and federal and state regulatory actions and reform, including, without limitation, the impact of the implementation of the Dodd-Frank Act; adverse decisions of federal and state courts; fraud, scams and schemes of third parties; ~~cyber security~~cyber-security breaches; competitive conditions in the financial services industry; rapidly changing technology affecting financial services; marketability of debt instruments and corresponding impact on fair value adjustments; and/or other external developments materially impacting ~~WesBanco’s~~Wesbanco’s operational and financial performance. ~~WesBanco~~Wesbanco does not assume any duty to update forward-looking statements.

~~WesBanco~~Wesbanco is a multi-state bank holding company operating through ~~199~~236 branches and ~~194~~228 ATM machines in West Virginia, Ohio, western Pennsylvania, Kentucky, ~~and~~ southern Indiana and Maryland, offering retail banking, corporate banking, personal and corporate trust services, brokerage services, mortgage banking and insurance. ~~WesBanco’s~~Wesbanco’s businesses are significantly impacted by economic factors such as market interest rates, federal monetary and regulatory policies, local and regional economic conditions and the competitive environment’s effect upon ~~WesBanco’s~~Wesbanco’s business volumes. ~~WesBanco’s~~Wesbanco’s deposit levels are affected by numerous factors including personal savings rates, personal income, and competitive rates on alternative investments, as well as competition from other financial institutions within the markets we serve and liquidity needs of ~~WesBanco.~~Wesbanco. Loan levels are also subject to various factors including construction demand, business financing needs, consumer spending and interest rates, as well as loan terms offered by competing lenders.

~~WesBanco’s~~Wesbanco’s critical accounting policies involving the significant judgments and assumptions used in the preparation of the Consolidated Financial Statements as of June 30, ~~2019~~2020 have remained unchanged, except as noted below, from the disclosures presented in ~~WesBanco’s~~Wesbanco’s Annual Report on Form 10-K for the year ended December 31, ~~2018~~2019 within the section “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

Allowance for Credit Losses—In September 2016, the FASB issued ASU 2016-13, “Financial Instruments – Credit Losses (Topic 326),” which require entities to use a new forward-looking “expected loss” model also referred to as the current expected credit loss model, CECL, on trade and other receivables, held-to-maturity debt securities, loans and other instruments that generally will result in the earlier recognition of allowances for credit losses. For available-for-sale debt securities with unrealized losses, entities measure credit losses in a manner similarly to current procedures, except that the losses will be recognized as allowances rather than reductions in the amortized cost of the securities. Entities will have to disclose significantly more information, including information they use to track credit quality by year of origination for most financing receivables. In April 2019, the FASB issued ASU 2019-04, “Codification Improvements to Topic 326, Financial Instruments – Credit Losses, Topic 815, Derivatives and Hedging and Topic 825, Financial Instruments” and in May 2019 the FASB issued ASU 2019-05, “Financial Instruments – Credit Losses (Topic 326), Targeted Transition Relief. Public business entities must apply the new requirements for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years, which for Wesbanco was effective January 1, 2020. In December 2018, the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation (“FDIC”) and the Office of Comptroller of the Currency (“OCC”) approved a final rule to address changes to credit loss accounting under GAAP, including banking organizations’ adoption of the CECL methodology. The final rule provides banking organizations the option to phase-in, over a three-year period, the day-one adverse effects on regulatory capital that may result from the adoption of the new accounting standard. In response to the COVID-19 pandemic, the joint federal bank regulatory agencies issued an optional extension of the regulatory capital transition, which allows for a two-year delay and then a three-year transition period from January 1, 2022 through December 31, 2024. Under the interim final rule, the amount of adjustments to regulatory capital deferred until the phase-in period includes both the initial impact of our adoption of CECL at January 1, 2020 and 25% of subsequent changes in our allowance for credit losses during each quarter of the two-year period ended December 31, 2021, (collectively the “CECL regulatory capital transition adjustment”). Wesbanco has elected to defer the impact of CECL for two years and then will phase-in the impact of the adoption of this standard on the company’s regulatory capital over the subsequent three-year period.

Under CECL, acquired loans or pools of loans that have experienced more-than-insignificant credit deterioration are deemed to be purchased credit deteriorated, PCD, loans, and are grossed-up on day 1 by the initial credit estimate through the allowance as opposed to a reduction in the loan’s amortized cost. The credit mark on acquired loans deemed not to be PCD loans are reflected as a reduction in the loan’s amortized cost, with an allowance and corresponding provision for credit losses recorded in the first reporting period after acquisition through current period earnings, while the loan mark will accrete through interest income over the life of such loans. At acquisition, Wesbanco will consider several factors as indicators that an acquired loan or pool of loans has experienced more-than-insignificant credit deterioration. These factors include loans 30 days or more past due, loans with an internal risk grade of below average or lower, loans classified as non-accrual by the acquired institution, the materiality of the credit and loans that have been previously modified in a troubled debt restructuring, TDR. Upon adoption of this standard, acquired loans from prior acquisitions that met the guidelines under ASC 310-30 (formerly known as “purchased credit impaired”) were reclassified as PCD loans. The accretable portion of the loan mark as of adoption date continues to accrete into interest income. However, the non-accretable portion of the loan mark was added to the allowance upon adoption, and any reversals of such mark will flow through the allowance in future periods. The loan mark on ASC 310-20 loans (“non-purchased credit impaired”) from prior acquisitions continues to accrete through interest income over the life of such loans.

Wesbanco formed a cross-functional team in 2016 to oversee the implementation of CECL. The team was responsible for completing an initial data gap assessment, determining if additional data was needed or current data could be improved upon, finalizing the loan segmentation procedures, analyzing the methodology options regarding the calculation of expected credit losses and concluding why the selected methodology is reasonable and in-line with accounting guidance. Wesbanco completed parallel runs in 2019 to ensure the various forecasting and modeling assumptions were reasonable and supportable, including certain qualitative factors that were developed to estimate the initial current expected credit loss allowance. Wesbanco engaged a third-party to validate the data inputs and the models utilized in the CECL calculation. In addition, the Company prepared documentation of the accounting policy decisions, changes to the business processes and procedures, and the control environment under the adoption of this standard. The day 1 impact on the allowance for credit losses was an increase of $41.4 million, which included a $6.7 million adjustment for PCD loans and a $3.0 million adjustment related to loan commitments. The after-tax effect on retained earnings was $26.6 million as of January 1, 2020. The day 1 CECL calculation is derived from the selected assumption of a one-year reasonable and supportable forecast, which was obtained from one or more third-party macroeconomic forecasting sources. After the forecast period, Wesbanco reverts back over a one-year period to historical loss rates, adjusted for prepayments and curtailments, to estimate losses over the remaining life of loans. The most sensitive assumptions include the length of the forecast and reversion periods, forecast of unemployment and interest rate spreads, and prepayment speeds. See Note 5, “Loans and Allowance for Credit Losses” for further detail.

The allowance for credit losses reduces the loan portfolio to the net amount expected to be collected and establishes an allowance for unfunded loan commitments, which is recorded in other liabilities. The allowance for credit losses represents the lifetime expected losses for all loans and unfunded loan commitments at the initial recognition date. The allowance incorporates forward-looking information and applies a reversion methodology beyond the reasonable and supportable forecast. The allowance is increased by a provision charged to operating expense and reduced by charge-offs, net of recoveries. The provision also includes any necessary adjustments to the reserve for unfunded loan commitments, and such reserve is accounted for in other liabilities. Management evaluates the appropriateness of the allowance at least quarterly. This evaluation is inherently subjective as it requires material estimates that may be susceptible to significant change from period to period.

The allowance for credit loss calculation is based on the loan’s amortized cost basis, which is comprised of the unpaid principal balance of the loan, deferred loan fees (costs), acquired premium (discount) less write-downs. Wesbanco made an accounting policy election to exclude accrued interest from the measurement of the allowance for credit losses, except for recent loan modifications allowed under the CARES Act due to the timing and nature of these modifications, because the Company has a robust policy in place to reverse or write-off accrued interest when the loan is placed on non-accrual. Wesbanco made an accounting policy election to reverse accrued interest deemed uncollectible as a reversal of interest income.

The allowance for credit loss reflects the risk of loss in the loan portfolio. To appropriately measure expected credit losses, management disaggregates the loan portfolio into pools of similar risk characteristics. The Company utilizes the probability of default, PD, / loss given default, LGD, approach to calculate the expected loss for each segment, which is then discounted. PD is the probability the asset will default within a given timeframe and LGD is the percentage of the assets not expected to be collected due to default. The primary macroeconomic drivers of the quantitative model include forecasts of national unemployment and interest rate spreads. Management relies on macroeconomic forecasts obtained from various reputable sources, which may include the Federal Open Market Committee (FOMC) forecast and other third party forecasts from well recognized, leading economists. These forecasts can range from one to two years, depending upon the facts and circumstances of the current state of the economy, portfolio segment and management’s judgement of what can be reasonably supported. The model reversion period may range from one to three years.

The allowance for credit losses is calculated over the loan’s contractual life. For term loans, the contractual life is calculated based on the maturity date. For commercial and industrial (“C&I”) revolving loans with no stated maturity date, the contractual life is calculated based on the internal review date. For all other revolving loans, the contractual life is based on either the estimated maturity date or a default date. The contractual term does not include any expected extensions, renewals or modifications unless management has a reasonable expectation as of the reporting period that Wesbanco will execute a troubled debt restructuring, TDR, with the borrower. Management assumes a loan will become a TDR if a loan has matured, has a principal balance, and has previously been partially charged-off. This assumption extends the maturity of these loans to six months beyond their respective maturity dates.

Contractual terms must be adjusted for prepayments to arrive at expected cash flows. Wesbanco models term loans with a prepayment rate, annualized to one year. When Wesbanco has a specific expectation of differing payment behavior for a given loan, the loan may be evaluated individually. For revolving loans that do not have a principal payment schedule, a curtailment rate is factored into the cash flow.

The evaluation also considers qualitative factors such as economic trends and conditions, which includes levels of regional unemployment, real estate values and the impact on specific industries and geographical markets, changes in lending policies and underwriting standards, delinquency and other credit quality trends, risk grading imprecision, concentrations of credit risk, if any, volume of activity, changes in lending staff, type of collateral and the results of internal loan reviews and examinations by bank regulatory agencies. Management relies on observable data from internal and external sources to the extent it is available to evaluate each of these factors and adjusts the actual historical loss rates to reflect the impact these factors may have on probable losses in the portfolio.

Commercial loans, including commercial real estate (“CRE”) and C&I, are individually-evaluated if they have unique characteristics, reported as TDRs, or reported as non-accrual loans greater than $1 million. Specific reserves are established when appropriate for such loans based on the present value of expected future cash flows of the loan or the estimated realizable value of the collateral, if any.

On March 27, 2020, the CARES Act was signed into law. Section 4013 of the CARES Act, “Temporary Relief From Troubled Debt Restructurings,” allows financial institutions the option to temporarily suspend certain requirements under U.S. GAAP related to TDRs for a limited period of time during the COVID-19 pandemic. On April 7, 2020, the joint federal regulatory agencies issued a statement, “Interagency Statement on Loan Modifications and Reporting for Financial Institutions Working With Customers Affected by the Coronavirus (Revised),” which further discusses loan modifications related to COVID-19. Wesbanco has extended loan principal and/or interest payments up to 180 days for customers affected by the COVID-19 pandemic. These customers must meet certain criteria, such as being 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 other requirements noted in the regulatory agencies’ revised statement. Based on the CARES Act provision and the guidance noted above, Wesbanco does not classify the COVID-19 loan modifications as TDRs, nor are the customers considered late with regard to their delayed payments to the extent they meet the criteria. Upon exiting the loan modification deferral program, the measurement of loan delinquency will resume where it was determined upon entry into the program.

In response to the COVID-19 pandemic, Wesbanco launched a number of initiatives and precautionary measures intended to mitigate the impact of the COVID-19 virus outbreak by offering payment relief to affected borrowers through loan modifications, payment deferrals, and working capital facilities; adjusting branch operations to help protect the health and safety of our customers and employees while maintaining access to our services; and supporting local non-profit organizations through our grant programs. Through July 20, 2020 we have assisted our residential mortgage customers with over 525 loan modifications totaling $133 million, our consumer and home equity loan customers with over 700 loan modifications totaling $27 million, and our commercial and business customers with more than 2,300 loan modifications totaling $2.0 billion, including most customers in our hotel loan portfolio. In addition, we have been an active participant in the Small Business Administration’s Paycheck Protection Program (“PPP”), as established by the CARES Act. As of July 20, 2020, Wesbanco has lent over 6,800 PPP loans for approximately $841 million.

~~Net~~Reflecting the impact from the 2020 adoption of the new CECL accounting standard and the current macroeconomic environment, net income for the three months ended June 30, ~~2019~~2020 was ~~$44.8~~$4.5 million, with diluted earnings per share of ~~$0.82,~~$0.07, compared to ~~$33.2~~$44.8 million and ~~$0.71~~$0.82 per diluted share, respectively, for the second quarter of ~~2018.~~2019. Net income for the six months ended June 30, ~~2019~~2020 was ~~$85.2~~$27.9 million, ~~with diluted earnings per share of $1.56, compared to $66.7 million and $1.47~~or $0.41 per diluted share, ~~respectively~~as compared to $85.2 million, or $1.56 per diluted share, for the ~~six months ended June 30, 2018.~~2019 period. Excluding after-tax merger-related expenses (non-GAAP measure) in both periods, ~~net income and diluted earnings per share would have increased 19.9% to $44.9 million, or $0.82 per diluted share~~ for the three months ended June 30, ~~2019,~~2020, net income was $4.9 million, or $0.07 per diluted share, as compared to $44.9 million and $0.82 per diluted share, respectively, in the prior year quarter; and net income for the six months ended June 30, ~~2019 increased 23.2% year-over-year~~2020 was $32.3 million, or $0.48 per diluted share compared to $87.7 million or $1.60 ~~per diluted share versus $1.57~~ per diluted share in the prior year period.

	For The Three Months Ended June 30,											For the Six Months Ended June 30,												For The Three Months Ended June 30,											For the Six Months Ended June 30,
	2019					2018						2019						2018						2020						2019					2020						2019
(unaudited, dollars in thousands, except per share amounts)	Net Income			Diluted Earnings Per Share		Net Income			Diluted Earnings Per Share			Net Income			Diluted Earnings Per Share			Net Income			Diluted Earnings Per Share			Net Income			Diluted Earnings Per Share			Net Income			Diluted Earnings Per Share		Net Income			Diluted Earnings Per Share			Net Income			Diluted Earnings Per Share
Net income (Non-GAAP)⁽¹⁾	$	44,878		$	0.82	$	37,445		$	0.80		$	87,670		$	1.60		$	71,167		$	1.57		$	4,858		$	0.07		$	44,878		$	0.82	$	32,334		$	0.48		$	87,670		$	1.60
Less: After tax merger-related expenses		(64	)		—		(4,276	)		(0.09	)		(2,519	)		(0.04	)		(4,469	)		(0.10	)		(370	)		(0.00	)		(64	)		0.00		(4,450	)		(0.07	)		(2,519	)		(0.04	)
Net income (GAAP)	$	44,814		$	0.82	$	33,169		$	0.71		$	85,151		$	1.56		$	66,698		$	1.47		$	4,488		$	0.07		$	44,814		$	0.82	$	27,884		$	0.41		$	85,151		$	1.56

⁽¹⁾ Non-GAAP net income excludes after-tax merger-related expenses. The above non-GAAP financial measures used by WesBanco provide information useful to investors in understanding WesBanco’s operating performance and trends, and facilitate comparisons with the performance of WesBanco’s

Net interest income increased ~~$16.1~~$20.6 million or ~~19.6%~~20.9% in the second quarter of ~~2019~~2020 compared to the same quarter of ~~2018~~2019 due to ~~an 11.5%~~a 33.7% increase in average total earning ~~assets. In addition,~~assets, due primarily to the OLBK acquisition and related accretion from purchase accounting. As a result of five federal funds rate decreases totaling 225 basis points from July 2019 to March 2020 and aggressive deposit rate reductions in late March, the yield on earning assets ~~has increased~~decreased a total of 3470 basis points ~~since the second quarter of 2018 while there was somewhat of an offset by a 17 basis points increase in~~and the cost of interest bearing liabilities ~~producing an increase~~decreased 45 basis points from the second quarter of 2019 to the same period of 2020. This resulted in the net ~~spread on earning assets of 17~~interest margin decreasing by 35 basis points ~~year-over-year. The net interest margin increased by 24 basis points~~to 3.32% in the second quarter of 2020 compared to 3.67% in the second quarter of ~~2019 compared to 3.43% in~~2019. Average loan balances increased by 42.3% from the second quarter of ~~2018. The net interest margin benefited from increases~~2019, mainly attributable to both the OLBK acquisition and participation in the ~~Federal Reserve Board’s target federal funds rate during 2018 as well as an increase in non-interest bearing demand deposits. The increase in~~SBA PPP program, while average deposits increased 35.3% over the ~~cost of interest bearing liabilities is primarily due to higher rates for interest bearing public funds, higher certificates of deposit costs and certain Federal Home Loan Bank and other borrowings.~~ same time period. Accretion from ~~prior~~ acquisitions benefited the second quarter net interest margin by ~~approximately 18~~19 basis points, as compared to 1218 basis points in the prior year ~~period.~~period and 22 basis points during the first quarter of 2020. Lastly, the funding of SBA PPP loans negatively impacted the second quarter of 2020 net interest margin by a net two basis points.

The provision for credit losses increased to ~~$2.7~~$61.8 million in the second quarter of ~~2019, compared~~2020, due specifically to ~~$1.7 million in~~ the ~~second quarter~~implementation of ~~2018. The increased provision is due primarily to a $40.8 million increase in criticized~~the CECL accounting standard on January 1, 2020, and ~~classified loans as~~the effect of ~~June 30, 2019 as compared to June 30, 2018, reflecting our normal loan grade review process post-acquisition of FFKT, as well as two larger downgraded relationships in~~ the ~~legacy loan portfolio, as reported last quarter.~~COVID-19 pandemic. Net charge-offs, as a percentage of average portfolio loans, ~~was~~were 0.07% and 0.05% ~~and 0.03%~~ for the second quarter of 2020 and 2019, ~~and 2018,~~ respectively.

For the second quarter of ~~2019,~~2020, non-interest income increased ~~$7.7~~$1.7 million or ~~33.1%~~5.5% compared to the second quarter of ~~2018~~2019, driven by ~~net securities gains, electronic~~mortgage banking ~~fees, service charges on deposit~~income and ~~payment processing fees. Net securities gains~~higher commercial customer loan swap-related income. Reflecting the low interest rate environment and organic growth, mortgage banking income increased ~~$2.6~~$5.9 million or 365.5% in the second quarter of 2020 compared to the prior year period, due to growth of roughly 123% in residential mortgage origination dollar volume and the associated sale of ~~WesBanco’s Visa Class B shares. Electronic banking fees~~approximately one-half of those originations into the secondary market. Loan swap-related income increased ~~$1.4~~$2.4 million or ~~24.9%, service charges on deposits increased $1.1 million or 20.4%, payment processing fees increased $0.8 million or 100% and trust fees increased $0.6 million or 10.2% for~~477.2% from the second quarter of 2019 ~~compared~~to $2.9 million, due to commercial loan customer demand in the current rate environment. Offsetting these increases somewhat, electronic banking fees decreased $3.1 million or 43.2% due to the ~~second quarter~~negative impact of ~~2018. Payment processing fees are from a business acquired from FFKT, which provides bill payment~~the Durbin amendment to the 2010 Dodd-Frank Wall Street Reform and ~~electronic funds transfer services for its customers. Non-interest income increased $11.4~~Consumer Protection Act, and service charges on deposits decreased $1.9 million or ~~24.1% for the six months ended June 30, 2019 as compared~~30.2% due to ~~the six months ended June 30, 2018.~~higher customer deposits associated with CARES Act stimulus payments and lower consumer spending.

Non-interest expense, excluding merger-related expenses in both periods, increased in the second quarter of ~~2019 increased~~2020 by ~~$8.4~~$13.2 million or ~~13.2%~~18.3%, compared to the second quarter of ~~2018, which~~2019. This year-over-year increase is primarily due to ~~the FTSB and FFKT acquisitions. Salaries~~higher salaries and wages, ~~increased $4.8 million or 17.8%~~employee benefits, net occupancy, equipment, and ~~employee benefit expense increased $1.7 million or 21.8% compared to~~other operating costs associated with additional staffing and financial center locations from the OLBK acquisition. In addition, salaries and wages reflect the annual mid-year merit increases implemented last ~~year’s second quarter as full-time equivalent personnel increased 15.3% due in part to the FTSB and FFKT acquisitions as well as additions to key revenue-producing positions throughout the markets.~~ summer. For the second quarter of ~~2019,~~2020, merger-related expenses were ~~$0.1~~$0.5 million related to the ~~FFKT~~OLBK merger, as compared to ~~$5.4~~$0.1 million for the second quarter of ~~2018~~2019, which were related to the ~~FTSB and~~ FFKT ~~mergers.~~merger.

During the second quarter, the effective tax rate was ~~18.40%~~0.9% as compared to ~~18.11%~~18.4% last year, ~~while~~and the provision for income taxes ~~increased $2.8~~decreased $10.1 million to ~~$10.1 million~~$42 thousand, primarily due to ~~higher~~lower year-over-year pre-tax income.

In response to the current economic environment as a result of the COVID-19 pandemic, Wesbanco completed an interim goodwill impairment analysis as of June 30, 2020 with the assistance of a third-party. Wesbanco concluded that goodwill, which has a carrying value of $1.1 billion, was not impaired as of June 30, 2020. If events and circumstances continue, such as the effects of the COVID-19 pandemic, Wesbanco will continue to quarterly assess goodwill for potential impairment.

	For the Three Months Ended June 30,						For the Six Months Ended June 30,						For the Three Months Ended June 30,						For the Six Months Ended June 30,
(unaudited, dollars in thousands)	2019			2018			2019			2018			2020			2019			2020			2019
Net interest income	$	98,460		$	82,347		$	196,822		$	155,536		$	119,013		$	98,460		$	239,174		$	196,822
Taxable equivalent adjustment to net interest income		1,367			1,344			2,840			2,629			1,143			1,367			2,328			2,840
Net interest income, fully taxable equivalent	$	99,827		$	83,691		$	199,662		$	158,165		$	120,156		$	99,827		$	241,502		$	199,662
Net interest spread, non-taxable equivalent		3.32	%		3.15	%		3.33	%		3.13	%		3.09	%		3.32	%		3.16	%		3.33	%
Benefit of net non-interest bearing liabilities		0.30	%		0.23	%		0.30	%		0.22	%		0.20	%		0.30	%		0.23	%		0.30	%
Net interest margin		3.62	%		3.38	%		3.63	%		3.35	%		3.29	%		3.62	%		3.39	%		3.63	%
Taxable equivalent adjustment		0.05	%		0.05	%		0.05	%		0.06	%		0.03	%		0.05	%		0.03	%		0.05	%
Net interest margin, fully taxable equivalent		3.67	%		3.43	%		3.68	%		3.41	%		3.32	%		3.67	%		3.42	%		3.68	%

Net interest income, which is ~~WesBanco’s~~Wesbanco’s largest source of revenue, is the difference between interest income on earning assets, primarily loans and securities, and interest expense on liabilities, primarily deposits and short and long-term borrowings. Net interest income is affected by the general level of, and changes in interest rates, the steepness and shape of the yield curve, changes in the amount and composition of interest earning assets and interest bearing liabilities, as well as the frequency of repricing of existing assets and liabilities. Net interest income increased ~~$16.1~~$20.6 million or ~~19.6%~~20.9% in the second quarter of ~~2019~~2020 compared to the second quarter of ~~2018,~~2019, due to ~~an 11.5%~~a 33.7% increase in average earning asset balances, primarily driven by the acquisition of ~~FFKT~~OLBK which closed midway through the fourth quarter of 2019, and ~~related net asset accretion from purchase accounting.~~Wesbanco’s participation in the PPP lending program. For the first six months of ~~2019,~~2020, net interest income increased ~~$41.3~~$42.4 million or ~~26.5%~~21.5% from the first six months of 2019, for the same ~~reasons along with the acquisition of FTSB.~~reasons. Average loan balances increased ~~by 13.5%~~42.3% in the second quarter of ~~2019~~2020 primarily from the acquisition of ~~FFKT~~OLBK and from $836.8 million of PPP loans originated throughout the second quarter of 2020, compared to the second quarter of ~~2018. Organic loan~~2019. Excluding the OLBK acquisition and PPP loans, portfolio loans increased by 0.4% from June 30, 2019, as growth ~~decreased 1.1% from last year~~remained relatively flat due to ~~lower home equity loan balances due to lower demand as a result~~the impact of ~~higher interest rates and tax changes, elevated levels of commercial real estate loans moving to~~shuttered state economies from the ~~secondary market and continued deleveraging by commercial customers reflective of the current operating environment and higher cash levels from tax reform.~~pandemic. Total average deposits increased in the second quarter of ~~2019~~2020 by ~~$1.1~~$3.1 billion or ~~14.5%~~35.3% compared to the second quarter of ~~2018,~~2019, due ~~specifically~~ to the deposits acquired from ~~FFKT.~~OLBK and from an influx of deposits from the stimulus package associated with the CARES Act and PPP loan proceeds deposited into customer accounts. The net interest margin ~~increased~~decreased by 2435 basis points to ~~3.67%~~3.32% in the second quarter of ~~2019~~2020 from the same quarter of ~~2018.~~2019. The ~~margin benefited from increases~~margin’s decline was due to multiple decreases during late 2019 and the first quarter of 2020 in the Federal Reserve’s target federal funds rate, ~~during 2018~~a flat to sometimes inverted yield curve, additional balance sheet liquidity over the last three to four months and ~~higher~~the lower margins on ~~the acquired FFKT assets,~~PPP loans, and was partially offset by higher ~~funding costs~~purchase accounting accretion. Approximately 19 basis points of accretion from OLBK and ~~a flattening~~other prior acquisitions was included in the second quarter 2020 net interest margin compared to 18 basis points in the 2019 second quarter net interest margin. The funding of the ~~yield curve in 2019.~~previously mentioned PPP loans negatively impacted the second quarter of 2020 net interest margin by a net two basis points. Yields ~~increased~~decreased for ~~all~~most earning asset categories in ~~2019.~~2020. The cost of interest bearing liabilities ~~increased~~decreased by 1745 basis points from the second quarter of ~~2018~~2019 to the second quarter of ~~2019.~~2020. The ~~increase~~decrease in the cost is primarily due to aggressive rate ~~increases~~decreases for ~~larger balance customers in~~ interest bearing demand deposits, which include public funds, and ~~higher~~lower rates for certificates of deposit, customer repurchase agreements, short to medium-term Federal Home Loan Bank borrowings and junior subordinated ~~debentures. Approximately 18 basis points of accretion from FFKT and other prior acquisitions was included~~debentures in response to the general decrease in overall borrowing rates in the ~~second quarter 2019 net interest margin compared to 12 basis points in~~marketplace resulting from lower rates across the ~~2018 second quarter net interest margin.~~yield curve.

Interest income increased ~~$20.7~~$15.2 million or ~~20.9%~~12.7% in the second quarter of ~~2019~~2020 and ~~$53.4~~$38.5 million or ~~28.8%~~16.2% in the first ~~half~~six months of ~~2019~~2020 compared to the same periods of ~~2018~~2019 due to higher overall earning assets, ~~particularly from~~mostly attributable to the ~~FTSB~~OLBK acquisition and ~~FFKT acquisitions, and higher~~PPP loan originations, partially offset by lower yields in almost every major earning asset category. Earning asset yields were influenced ~~positively~~negatively by COVID-19 in the second quarter of ~~2019~~2020 compared to the second quarter of ~~2018 due~~2019. In March, the Federal Reserve dropped the federal fund rate by 150 basis points, in addition to ~~federal funds rate increases occurring through~~ the ~~second~~75 basis points that occurred in the last half of ~~2018.~~2019. Average loan balances increased ~~by $914.8 million or 13.5%~~$3.3 billion in the second quarter of ~~2019~~2020 compared to the second quarter of ~~2018,~~2019, due primarily to the acquisition of ~~FFKT.~~OLBK, and originations of PPP loans. Loan yields ~~increased~~decreased by 3880 basis points during this same period to ~~5.02%~~4.22% from the previously mentioned federal funds rate ~~increases~~decreases and ~~accretion from purchase accounting from the FFKT acquisition.~~lower yields on PPP loans. Loans provide the greatest impact on interest income and the yield on earning assets as they have the largest balance and the highest yield within major earning asset categories. In the second quarter of ~~2019,~~2020, average loans represented ~~70.6%~~75.2% of average earning assets, an increase from ~~69.4%~~70.6% in the second quarter of ~~2018.~~2019. Average taxable securities balances ~~increased by $207.7~~decreased $47.7 million or ~~9.8%~~2.0% from the second quarter of ~~2018, primarily~~2019, due to the sale of approximately $218 million of mortgage-backed securities ~~acquired in~~at the ~~FFKT acquisition.~~end of the first quarter, to take advantage of market opportunities and to create liquidity for COVID-19 related reasons. Taxable securities yields ~~increased~~decreased by 1535 basis points and tax-exempt securities yields increased by 10one basis ~~points~~point in the second quarter of ~~2019~~2020 from the second quarter of ~~2018~~2019. The recent flat and inverted yield curve has resulted in the yield decrease for taxable securities, as calls and maturities of tax-exempt securities have been replaced with purchases of taxable securities due to their lower overall yield. Increased prepayments on mortgage-backed securities in the lower rate environment also reduced the taxable securities yields due to higher ~~market rates on all securities acquired and purchased over the last four quarters.~~amortization. The average balance of tax-exempt securities, which have the highest yields within securities, decreased to ~~24.1%~~21.4% of total average securities in the second quarter of ~~2019~~2020 compared to ~~26.1%~~24.1% in the second ~~quarter of 2018, mostly due to the sale of lower-yielding tax-exempt municipal securities late in the first~~ quarter of 2019.

Total portfolio loans increased ~~$945.0 million~~$3.3 billion or ~~13.9%~~43.1% over the last twelve months, while total commercial loans increased ~~$694.4 million~~$3.0 billion or ~~15.5%~~58.2%. Loan growth was achieved through ~~$2.5~~$4.3 billion in total loan originations, led by ~~$1.6~~$3.0 billion in business loan originations for the past twelve months. Loan growth was driven by the acquisition of ~~FFKT,~~OLBK in 2019, SBA PPP loans, expanded market areas and additional commercial personnel in our core markets, but was partially offset by significant loan paydowns or payoffs as some loans moved into the secondary lending market by customers who refinanced their commercial real estate ~~mortgages.~~mortgages, and some financed projects were sold by their developers.

Commercial loans with floors currently average 4.30% on approximately $2.1 billion or 26% of total commercial loans at June 30, 2020, as compared to $2.4 billion averaging 4.50% or 33% of commercial loans at December 31, 2019. Approximately 69% or $1.5 billion of these loans are currently priced at their floor, as compared to 49% or $1.2 billion at December 31, 2019. These loans typically do not adjust as rapidly from their current floor level as compared to loans without floors, due to the amount of the rate change as compared to the floor rate or next repricing dates. In addition, in a declining rate environment, some customers may request rates below existing contractual floors, which we may grant for competitive or other reasons.

Interest expense ~~increased $4.5~~decreased $5.4 million or ~~27.5%~~25.6% in the second quarter of ~~2019 and $12.1 million or 40.8% for the six months ended June 30, 2019~~2020 as compared to the same ~~periods~~period in ~~2018,~~2019, due ~~primarily~~ to ~~increases~~decreases in the ~~balances~~cost of ~~interest bearing liabilities from the acquisitions of FTSB and FFKT and increases in the rates paid on~~ all interest bearing liability ~~categories.~~categories as market rates dropped in reaction to COVID-19 and management reduced certain deposit rates, as well as higher purchase accounting deposit accretion. The cost of interest bearing liabilities ~~increased~~decreased by 1745 basis points from the second quarter of ~~2018~~2019 to ~~1.08%~~0.63% in ~~2019. Average interest~~2020. Interest bearing deposits increased ~~by $662.1 million~~$1.7 billion or ~~11.7%~~27.5% from the second quarter of ~~2018,~~2019, due to the acquisition of ~~FFKT.~~OLBK and increases in organic deposits heavily driven by CARES Act stimulus deposits. The rate on interest bearing deposits ~~increased by 17~~decreased 40 basis points from the second quarter of ~~2018,~~2019, primarily from ~~increases~~aggressive decreases in rates on interest bearing public funds and ~~for certain larger balance customers.~~certificates of deposit in response to the COVID-19 pandemic. Average non-interest bearing demand deposit balances increased from the second quarter of ~~2018~~2019 to the second quarter of ~~2019~~2020 by ~~$456.1 million~~$1.4 billion or ~~22.5%~~55.1% and were ~~28.2%~~32.3% of total average deposits at June 30, ~~2019,~~2020, compared to ~~26.4%~~28.2% at June 30, ~~2018,~~2020, reflecting the acquired ~~FFKT~~OLBK non-interest bearing demand deposits, CARES Act stimulus deposits, PPP loan deposits, and ongoing checking account marketing strategies. Organic average non-interest bearing demand deposits increased by $104.0 million or 5.1% during this same time period. The increase in non-interest bearing deposits reflects positively on the net interest margin, as the benefit of non-interest bearing liabilities increased by seven basis points from the second quarter of 2018 to 2019. The average balance of FHLB borrowings ~~decreased by $172.9~~increased $373.1 million from the second quarter of ~~2018~~2019 to ~~2019;~~2020 due to borrowings acquired in the OLBK acquisition and also as Wesbanco increased liquidity sources in response to the COVID-19 pandemic; however, the average rate paid ~~increased~~decreased by 4838 basis points to ~~2.50%~~2.12% over this same time period due to ~~higher~~lower interest rates on new borrowings and the maturity of some legacy ~~lower-rate~~higher-rate borrowings in the first half of ~~2019.~~2020. Average other borrowings and junior subordinated debt balances increased ~~by $39.2~~$73.4 million or ~~8.8%~~15.2% from the second quarter of ~~2018~~2019 to ~~2019~~2020, partially due to the acquisition of ~~FFKT,~~OLBK, and their average rates paid ~~increased~~decreased by 43155 and 38108 basis points, respectively, over this same time period due to ~~increases~~decreases in LIBOR, the index upon which most of this variable-rate type of borrowing is priced. ~~However,~~

The 150 basis points in total federal funds rate cuts in the ~~increase was~~first quarter of 2020, as well as the generally lower rates across the yield curve, are expected to result in the core net interest margin declining a few basis points over the remainder of the year. Lower anticipated earning asset yields caused by loans repricing to lower rates, new loan production rates being lower than existing loan rates, and security cash flows being reinvested at lower rates are expected to be partially offset by ~~a decrease in junior subordinated debt securities average balance due~~price reductions to ~~a payoff of $9.2 million~~deposit rates and lower wholesale funding costs. Wesbanco’s participation in the ~~third quarter~~PPP program is expected to positively contribute to net interest income resulting in a modest positive adjustment to the net interest margin in the back half of ~~2018.~~ the year as SBA loan forgiveness occurs for qualifying customers and net deferred fees are accreted into income at the date of loan payoff.

	For The Three Months Ended June 30,										For the Six Months Ended June 30,										For The Three Months Ended June 30,										For the Six Months Ended June 30,
	2019					2018					2019					2018					2020					2019					2020					2019
	Average		Average			Average		Average			Average		Average			Average		Average			Average		Average			Average		Average			Average		Average			Average		Average
(unaudited, dollars in thousands)	Balance		Rate			Balance		Rate			Balance		Rate			Balance		Rate			Balance		Rate			Balance		Rate			Balance		Rate			Balance		Rate
ASSETS
Due from banks - interest bearing	$	72,563		3.46	%	$	53,896		2.09	%	$	74,774		2.55	%	$	31,436		2.08	%	$	637,979		0.17	%	$	72,563		3.46	%	$	385,755		0.35	%	$	74,774		2.55	%
Loans, net of unearned income⁽¹⁾		7,700,355		5.02	%		6,785,550		4.64	%		7,680,062		5.04	%		6,563,782		4.54	%		10,955,694		4.22	%		7,700,355		5.02	%		10,665,441		4.42	%		7,680,062		5.04	%
Securities:⁽²⁾
Taxable		2,336,099		2.82	%		2,128,446		2.67	%		2,344,929		2.83	%		1,959,828		2.63	%		2,288,409		2.47	%		2,336,099		2.82	%		2,432,539		2.57	%		2,344,929		2.83	%
Tax-exempt ⁽³⁾		741,371		3.51	%		750,138		3.41	%		775,845		3.49	%		733,970		3.41	%		622,637		3.52	%		741,371		3.51	%		634,612		3.51	%		775,845		3.49	%
Total securities		3,077,470		2.98	%		2,878,584		3.05	%		3,120,774		2.99	%		2,693,798		2.84	%		2,911,046		2.69	%		3,077,470		2.98	%		3,067,151		2.76	%		3,120,774		2.99	%
Other earning assets		50,555		7.26	%		57,259		5.72	%		51,330		7.28	%		53,843		5.86	%		71,493		5.68	%		50,555		7.26	%		70,537		6.02	%		51,330		7.28	%
Total earning assets ⁽³⁾		10,900,943		4.45	%		9,775,289		4.11	%		10,926,940		4.45	%		9,342,859		4.05	%		14,576,212		3.75	%		10,900,943		4.45	%		14,188,884		3.96	%		10,926,940		4.45	%
Other assets		1,588,720					1,143,442					1,572,988					1,115,743					2,138,999					1,588,720					2,061,191					1,572,988
Total Assets	$	12,489,663				$	10,918,731				$	12,499,928				$	10,458,602				$	16,715,211				$	12,489,663				$	16,250,075				$	12,499,928

LIABILITIES AND SHAREHOLDERS' EQUITY
Interest bearing demand deposits	$	2,139,372		0.81	%	$	1,849,035		0.68	%	$	2,134,514		0.78	%	$	1,773,813		0.64	%	$	2,558,768		0.21	%	$	2,139,372		0.81	%	$	2,450,605		0.39	%	$	2,134,514		0.78	%
Money market accounts		1,116,124		0.72	%		1,035,567		0.42	%		1,135,237		0.69	%		1,020,486		0.39	%		1,603,395		0.22	%		1,116,124		0.72	%		1,573,579		0.41	%		1,135,237		0.69	%
Savings deposits		1,676,477		0.16	%		1,367,193		0.07	%		1,668,160		0.15	%		1,327,875		0.06	%		2,060,392		0.06	%		1,676,477		0.16	%		2,006,940		0.12	%		1,668,160		0.15	%
Certificates of deposit		1,397,167		1.18	%		1,415,259		0.84	%		1,417,703		1.14	%		1,328,724		0.84	%		1,846,929		0.77	%		1,397,167		1.18	%		1,918,189		0.79	%		1,417,703		1.14	%
Total interest bearing deposits		6,329,140		0.70	%		5,667,054		0.53	%		6,355,614		0.68	%		5,450,898		0.50	%		8,069,484		0.30	%		6,329,140		0.70	%		7,949,313		0.42	%		6,355,614		0.68	%
Federal Home Loan Bank borrowings		1,008,027		2.50	%		1,180,939		2.02	%		1,030,396		2.47	%		1,109,586		1.90	%		1,381,093		2.12	%		1,008,027		2.50	%		1,426,134		2.19	%		1,030,396		2.47	%
Other borrowings		320,269		1.86	%		272,208		1.43	%		324,033		1.89	%		238,707		1.29	%		365,793		0.31	%		320,269		1.86	%		350,917		0.66	%		324,033		1.89	%
Subordinated debt and junior subordinated debt		164,108		5.41	%		172,972		5.03	%		176,746		5.41	%		168,677		4.91	%		192,021		4.33	%		164,108		5.41	%		195,257		4.67	%		176,746		5.41	%
Total interest bearing liabilities ⁽¹⁾		7,821,544		1.08	%		7,293,173		0.91	%		7,886,789		1.07	%		6,967,868		0.86	%		10,008,391		0.63	%		7,821,544		1.08	%		9,921,621		0.77	%		7,886,789		1.07	%
Non-interest bearing demand deposits		2,486,710					2,030,649					2,453,770					1,950,581					3,856,291					2,486,710					3,496,784					2,453,770
Other liabilities		131,219					77,873					132,657					80,681					247,591					131,219					233,166					132,657
Shareholders’ equity		2,050,190					1,517,036					2,026,712					1,459,472					2,602,938					2,050,190					2,598,504					2,026,712
Total Liabilities and Shareholders’ Equity	$	12,489,663				$	10,918,731				$	12,499,928				$	10,458,602				$	16,715,211				$	12,489,663				$	16,250,075				$	12,499,928
Taxable equivalent net interest spread				3.37	%				3.20	%				3.38	%				3.19	%				3.12	%				3.37	%				3.19	%				3.38	%
Taxable equivalent net interest margin				3.67	%				3.43	%				3.68	%				3.41	%				3.32	%				3.67	%				3.42	%				3.68	%

⁽¹⁾Gross of allowance for loan losses and net of unearned income. Includes non-accrual and loans held for sale. Loan fees included in interest income on loans totaled $0.4 million and $0.7 million for the three months ended June 30, 2019 and 2018, respectively and $0.9 million and $1.3 million for the six months ended June 30, 2019 and 2018, respectively. Additionally, loan accretion included in net interest income on loans acquired from acquisitions was $4.7 million and $2.2 million for the three months ended June 30, 2019 and 2018, respectively, and $9.6 million and $3.4 million for the six months ended June 30, 2019 and 2018, respectively. Accretion on interest bearing liabilities from acquisitions was $0.3 million and $0.7 million for the three months ended June 30, 2019 and 2018, respectively and $0.7 million and $0.9 million for the six months ended June 30, 2019 and 2018, respectively.

⁽²⁾ ~~Average yields on available-for-sale debt securities are calculated based on amortized cost.~~

⁽³⁾~~Taxable equivalent basis is calculated on tax-exempt securities using a rate of 21% for each period presented.~~

TABLE 3. RATE/VOLUME ANALYSIS OF CHANGES IN INTEREST INCOME AND INTEREST EXPENSE

	For The Three Months Ended June 30, 2019							For the Six Months Ended June 30, 2019							For The Three Months Ended June 30, 2020									For the Six Months Ended June 30, 2020
	Compared to June 30, 2018							Compared to June 30, 2018							Compared to June 30, 2019									Compared to June 30, 2019
(unaudited, in thousands)	Volume			Rate		Net Increase (Decrease)		Volume			Rate		Net Increase (Decrease)		Volume			Rate			Net Increase (Decrease)			Volume			Rate			Net Increase (Decrease)
Increase (decrease) in interest income:
Due from banks - interest bearing	$	120		$	224	$	344	$	537		$	88	$	625	$	742		$	(1,100	)	$	(358	)	$	1,127		$	(1,410	)	$	(283	)
Loans, net of unearned income		11,127			6,750		17,877		26,798			17,448		44,246		36,004			(17,351	)		18,653			67,767			(25,113	)		42,654
Taxable securities		1,434			816		2,250		5,338			2,099		7,437		(330	)		(2,067	)		(2,397	)		1,206			(3,348	)		(2,142	)
Tax-exempt securities ⁽¹⁾		(73	)		183		110		726			279		1,005		(1,038	)		(25	)		(1,063	)		(2,467	)		29			(2,438	)
Other earning assets		(76	)		173		97		(69	)		360		291		325			(232	)		93			615			(372	)		243
Total interest income change ⁽¹⁾		12,532			8,146		20,678		33,330			20,274		53,604		35,703			(20,775	)		14,928			68,248			(30,214	)		38,034
Increase (decrease) in interest expense:
Interest bearing demand deposits		536			628		1,164		1,273			1,313		2,586		715			(3,679	)		(2,964	)		1,083			(4,597	)		(3,514	)
Money market accounts		91			825		916		244			1,692		1,936		642			(1,772	)		(1,130	)		1,211			(1,888	)		(677	)
Savings deposits		61			390		451		129			655		784		129			(510	)		(381	)		222			(202	)		20
Certificates of deposit		(38	)		1,159		1,121		390			2,098		2,488		1,098			(1,682	)		(584	)		2,366			(2,799	)		(433	)
Federal Home Loan Bank borrowings		(538	)		872		334		(676	)		2,849		2,173		2,075			(1,069	)		1,006			4,430			(1,529	)		2,901
Other borrowings		191			319		510		658			849		1,507		185			(1,389	)		(1,204	)		234			(2,124	)		(1,890	)
Subordinated debt and junior subordinated debt		(94	)		140		46		203			430		633		342			(487	)		(145	)		467			(680	)		(213	)
Total interest expense change		209			4,333		4,542		2,221			9,886		12,107		5,186			(10,588	)		(5,402	)		10,013			(13,819	)		(3,806	)
Net interest income increase (decrease) ⁽¹⁾	$	12,323		$	3,813	$	16,136	$	31,109		$	10,388	$	41,497	$	30,517		$	(10,187	)	$	20,330		$	58,235		$	(16,395	)	$	41,840

The provision for credit losses – loans is the amount to be added to the allowance for credit losses – loans after net charge-offs have been deducted to bring the allowance to a level considered appropriate to absorb losses incurred within the loan portfolio. The provision for credit losses ~~also includes~~– loan commitments is the amount to be added to the ~~reserve~~allowance for credit losses for loan commitments to bring that ~~reserve~~allowance to a level considered appropriate to absorb losses incurred on unfunded commitments. The provision for credit losses - loans and loan commitments increased to $61.8 million in the second quarter of 2020 compared to $2.7 million in the second quarter of 2019 ~~compared~~due to ~~$1.7 million~~the adoption of CECL on January 1, 2020, and as a result of changes in the ~~second quarter~~macroeconomic forecast resulting in expected significantly higher unemployment over the reasonable and supportable forecast period of ~~2018 due~~one year, primarily toincreasing the ~~increase in the provision~~allowance for ~~Commercial Real Estate – Improved Property. Non-performing loans (including TDRs),~~loan losses and ~~non-performing assets both improved as a percentage of total portfolio loans from June 30, 2018.~~allowance for loan commitments. Non-performing loans were ~~0.50%~~0.37% of total loans as of June 30, ~~2019,~~2020, decreasing from ~~0.57%~~0.50% of total loans at the end of the second quarter of ~~2018.~~2019. Non-performing assets were ~~0.56%~~0.38% of total loans and other real estate and repossessed assets as of June 30, ~~2019,~~2020, decreasing from ~~0.63%~~0.56% at the end of the second quarter of ~~2018.~~2019. Criticized and classified loans were ~~1.48%~~2.23% of total loans, increasing from ~~1.08%~~1.48% as of June 30, ~~2018.~~2019, primarily due to recent adjustments to the internal loan classification system which impacted risk grades. Past due loans at June 30, ~~2019 and 2018~~2020 were ~~0.23%~~0.61% of total ~~loans.~~loans, compared to 0.23% at June 30, 2019. Annualized net loan charge-offs increased ~~slightly~~to 0.07% as of June 30, 2020 compared to 0.05% as of June 30, ~~2019 compared to 0.03% as of June 30, 2018.~~2019. (Please see the Allowance for Credit Losses – Loans and Loan Commitments section of this MD&A for additional discussion).

	For The Three Months Ended June 30,										For the Six Months Ended June 30,										For The Three Months Ended June 30,											For the Six Months Ended June 30,
(unaudited, dollars in thousands)	2019		2018		$ Change			% Change			2019		2018		$ Change			% Change			2020			2019		$ Change			% Change			2020		2019		$ Change			% Change
Trust fees	$	6,339	$	5,752	$	587			10.2		$	13,454	$	12,255	$	1,199			9.8		$	6,202		$	6,339	$	(137	)		(2.2	)	$	13,154	$	13,454	$	(300	)		(2.2	)
Service charges on deposits		6,197		5,146		1,051			20.4			12,747		9,969		2,778			27.9			4,323			6,197		(1,874	)		(30.2	)		10,940		12,747		(1,807	)		(14.2	)
Electronic banking fees		7,154		5,728		1,426			24.9			13,046		10,558		2,488			23.6			4,066			7,154		(3,088	)		(43.2	)		8,320		13,046		(4,726	)		(36.2	)
Net securities brokerage revenue		1,973		1,809		164			9.1			3,833		3,479		354			10.2			1,384			1,973		(589	)		(29.9	)		3,063		3,833		(770	)		(20.1	)
Bank-owned life insurance		1,340		1,128		212			18.8			2,659		3,884		(1,225	)		(31.5	)		1,752			1,340		412			30.7			3,521		2,659		862			32.4
Net securities gains																						1,299			2,909		(1,610	)		(55.3	)		2,790		3,566		(776	)		(21.8	)
Mortgage banking income		1,618		1,670		(52	)		(3.1	)		2,674		2,776		(102	)		(3.7	)		7,531			1,618		5,913			365.5			8,807		2,674		6,133			229.4
Net insurance services revenue																						936			786		150			19.1			1,781		1,695		86			5.1
Debit card sponsorship income																						644			—		644			100.0			1,351		—		1,351			100.0
Payment processing fees		785		—		785			100.0			1,433		—		1,433			100.0			784			785		(1	)		(0.1	)		1,464		1,433		31			2.2
Net securities gains (losses)		2,909		358		2,551			712.6			3,566		319		3,247			1,017.9
Net gain on other real estate owned and other assets		376		229		147			64.2			512		491		21			4.3			(66	)		376		(442	)		(117.6	)		103		512		(409	)		(79.9	)
Net insurance services revenue		786		711		75			10.5			1,695		1,602		93			5.8
Swap fee and valuation income		511		178		333			187.1			880		695		185			26.6			2,949			511		2,438			477.1			2,847		880		1,967			223.5
Other		1,168		699		469			67.1			2,430		1,463		967			66.1			1,056			1,168		(112	)		(9.6	)		2,728		2,430		298			12.3
Total non-interest income	$	31,156	$	23,408	$	7,748			33.1		$	58,929	$	47,491	$	11,438			24.1		$	32,860		$	31,156	$	1,704			5.5		$	60,869	$	58,929	$	1,940			3.3

Non-interest income is a significant source of revenue and an important part of ~~WesBanco’s~~Wesbanco’s results of ~~operations. WesBanco~~operations as it represents 20.3% of total revenue for the six months ended June 30, 2020. Wesbanco offers its customers a wide range of retail, commercial, investment and electronic banking services, which are viewed as a vital component of ~~WesBanco’s~~Wesbanco’s ability to attract and maintain customers, as well as providing additional fee income beyond normal spread-related income to ~~WesBanco.~~Wesbanco. For the second quarter of ~~2019,~~2020, non-interest income increased ~~$7.7~~$1.7 million or ~~33.1%~~5.5% compared to the second quarter of ~~2018~~2019, primarily due to ~~the acquisition of FFKT and securities gains. The increase is driven by~~ a ~~$2.6~~$5.9 million or 365.5% increase in ~~net securities gains,~~mortgage banking income and a ~~$1.4~~$2.4 million or 477.1% increase in swap fee and valuation income. The increases were offset by the Durbin amendment and its impact on electronic banking fees ~~a $1.1 million increase~~and the COVID-19 impact on several revenue streams with the largest decreases in service charges on deposits and ~~a $0.8 million increase in payment processing~~electronic banking fees. For the six months ended June 30, ~~2019,~~2020, non-interest income increased ~~$11.4~~$1.9 million or ~~24.1%~~3.3% from the ~~first~~ six months ~~of 2018~~ended June 30, 2019 for similar reasons ~~for~~as the three months then ended.

Trust fees ~~increased $0.6~~decreased $0.1 million or ~~10.2%~~2.2% compared to the second quarter of 2019 due to a decrease in the ~~acquisition~~market value of ~~FFKT as well as market improvements and customer and revenue development initiatives.~~trust assets earlier in the second quarter of 2020 due to the pandemic. Total trust assets ~~have increased $0.5 billion from $4.0 billion at June 30, 2018 to~~were $4.5 billion at June 30, ~~2019.~~2019 and June 30, 2020. At June 30, ~~2019,~~2020, trust assets include managed assets of $3.6 billion and non-managed (custodial) assets of $0.9 billion. Assets managed for the WesMark Funds, a proprietary group of mutual funds that is advised by ~~WesBanco~~Wesbanco Trust and Investment Services, were ~~$922.9~~$903.0 million as of June 30, ~~2019~~2020 and ~~$934.9~~$922.9 million at June 30, ~~2018~~2019, and are included in managed assets.

Service charges on deposits ~~increased $1.1~~decreased $1.9 million or ~~20.4% for~~30.2% to $4.3 million in the second quarter of ~~2019~~2020 as compared to the ~~prior year~~same period ~~primarily because of~~in 2019 due to higher consumer deposit balances throughout the ~~increased customer base from~~quarter associated with CARES Act stimulus payments and lower general consumer spending, resulting in fewer eligible fee generating transactions. For the ~~FFKT acquisition. Deposits increased $1.0 billion to $8.7 billion as of~~six months ended June 30, ~~2019 as compared to $7.7 billion as of June 30, 2018. Included in~~2020, service charges on deposits ~~for~~decreased $1.8 million or 14.2% compared to the ~~three~~six months ended June 30, ~~2019 is a $0.6 million negative adjustment for dormancy fees that will be remitted to the State of Kentucky for accounts that should have been escheated in prior periods.~~2019.

Electronic banking fees, which include debit card interchange fees, ~~continued to grow, increasing $1.4~~decreased $3.1 million or ~~24.9%~~43.2% compared to the second quarter of ~~2018 due~~2019, which reflected an approximate $2.7 million impact on second quarter 2020 fees from the ongoing limitation on interchange fees for debit card processing that resulted from the Durbin amendment to the ~~higher customer base from the FFKT acquisition as well as an increased volume of debit card transactions from WesBanco’s legacy customers. The volume increase~~2010 Dodd-Frank Wall Street Reform and Consumer Protection Act. This limitation only applies to banks with greater than $10 billion in legacy customers is due to a higher percentage of customers using these products as well as marketing initiatives. Beginning on July 1, 2019, debit card interchange fees will decrease by less than $2 milliontotal assets, and took effect for Wesbanco in the third quarter of ~~2019 and between an estimated $2.5 - $3.0~~2019.

Net securities gains decreased $1.6 million ~~per quarter beginning~~or 55.3% in the ~~fourth~~second quarter of 2020 compared to the same period of 2019, due to a gain of $2.6 million on the ~~impact~~sale of Wesbanco’s VISA Class B stock in the ~~Durbin amendment from the 2010 passage of the Dodd-Frank Act on banks with total assets of $10 billion or greater.~~

~~Bank-owned life insurance increased $0.2 million or 18.8% compared to~~ second quarter of ~~2018 due to an increase~~2019. This stock was held at a zero cost basis and Wesbanco holds no additional shares of VISA Class B stock. This decrease was partially offset by a $1.0 million market adjustment recorded in the ~~total cash surrender value, attributable to~~second quarter of 2020 on the ~~WesBanco legacy bank-owned life insurance policies as well as~~underlying investments of the ~~acquired FFKT bank-owned life insurance policies.~~deferred compensation plan. For the six months ended June 30, ~~2019, bank-owned life insurance~~2020, net securities gains decreased ~~by $1.2~~$0.8 million or ~~31.5%~~21.8% compared to the six months ended June 30, ~~2018 due to higher mortality proceeds in the prior period.~~2019.

Mortgage banking income ~~remained flat decreasing $0.1~~increased $5.9 million ~~in both~~or 365.5% from the second quarter of 2019 ~~compared~~ to the ~~prior year period and the six months ended June 30, 2019 compared to the prior year period.~~second quarter of 2020. For the ~~first half~~second quarter of ~~2019,~~2020, mortgage production was ~~$257.4~~$368.3 million, which was an increase of ~~19.8%~~125.6% from the comparable ~~2018~~2019 period. For the ~~six~~three months ended June 30, ~~2019, $106.4~~2020, $268.9 million in mortgages were sold into the secondary market at a net margin of 2.8% as compared to ~~$108.1~~$106.4 million at a net margin of ~~2.7%~~1.5% in the comparable ~~2018~~2019 period. Included in ~~the~~ mortgage banking income and the calculation of net margin noted above is a ~~$0.8~~$0.1 million ~~loss~~gain and a $0.6 million ~~gain~~loss from the fair value adjustments on ~~loans held for sale,~~mortgage loan commitments and related derivatives for the ~~six~~three months ended June 30, 2020 and 2019, ~~and 2018,~~ respectively.

~~Payment processing~~Debit card sponsorship income is a new revenue stream for Wesbanco that was acquired in the OLBK acquisition on November 22, 2019. The fees are earned from Wesbanco’s sponsorship of certain customers into various debit networks and are generated from the ~~bill payment and electronic funds transfer (“EFT”) services provided under~~total transactions processed on the ~~name FirstNet, which was acquired from FFKT. Payment processing fee~~debit networks. Debit sponsorship income was ~~$0.8~~$0.6 million for the quarter ended June 30, ~~2019. There was no prior period income.~~2020. Wesbanco intends to reduce this program’s customer-related revenues over the next 12-18 months for risk-related reasons.

Swap fee and valuation income increased ~~$2.6~~$2.4 million or 477.1% for the second quarter of 2020 compared to the second quarter of ~~2018,~~2019 due to ~~a gain~~an increased volume of ~~$2.6 million on the sale of WesBanco’s Visa Class B stock~~new loan swaps in the second quarter ~~which was held at~~of 2020, slightly offset by a ~~zero cost basis. WesBanco holds no additional shares~~decrease in the fair value of ~~Visa Class B stock.~~existing swaps resulting from the lower and inverted yield curve during 2020. For the ~~six~~three months ended June 30, ~~2019, net securities gains increased $3.2~~2020, new swaps executed totaled $131.4 million ~~from~~in notional principal resulting in $3.5 million of fee income, compared to new swaps executed of $62.9 million in notional principal resulting in $1.3 million of fee income for the ~~six~~three months ended June 30, ~~2018.~~ 2019. Fair value adjustments on existing swaps for the three months ended June 30, 2020 and 2019 were ($0.5) million and ($0.8) million, respectively.

	For The Three Months Ended June 30,										For the Six Months Ended June 30,										For The Three Months Ended June 30,										For the Six Months Ended June 30,
(unaudited, dollars in thousands)	2019		2018		$ Change			% Change			2019		2018		$ Change			% Change			2020		2019		$ Change			% Change			2020			2019		$ Change			% Change
Salaries and wages	$	31,646	$	26,872	$	4,774			17.8		$	62,585	$	51,878	$	10,707			20.6		$	36,773	$	31,646	$	5,127			16.2		$	75,683		$	62,585	$	13,098			20.9
Employee benefits		9,705		7,965		1,740			21.8			19,694		14,877		4,817			32.4			10,138		9,705		433			4.5			20,511			19,694		817			4.1
Net occupancy		5,385		4,103		1,282			31.2			10,951		8,759		2,192			25.0			6,634		5,385		1,249			23.2			13,717			10,951		2,766			25.3
Equipment		4,818		4,095		723			17.7			9,651		8,044		1,607			20.0			5,722		4,818		904			18.8			11,761			9,651		2,110			21.9
Marketing		1,254		1,405		(151	)		(10.7	)		2,497		2,521		(24	)		(1.0	)		1,567		1,254		313			25.0			2,705			2,497		208			8.3
FDIC insurance		1,155		868		287			33.1			2,508		1,526		982			64.4			2,395		1,155		1,240			107.4			4,508			2,508		2,000			79.7
Amortization of intangible assets		2,465		1,312		1,153			87.9			4,978		2,397		2,581			107.7			3,365		2,465		900			36.5			6,739			4,978		1,761			35.4
Restructuring and merger-related expenses		81		5,412		(5,331	)		(98.5	)		3,188		5,657		(2,469	)		(43.6	)		468		81		387			477.8			5,633			3,188		2,445			76.7
Franchise and other miscellaneous taxes		3,176		2,083		1,093			52.5			6,202		4,318		1,884			43.6			3,470		3,176		294			9.3			7,212			6,202		1,010			16.3
Consulting, regulatory, accounting and advisory fees		2,269		1,747		522			29.9			4,085		3,278		807			24.6			3,238		2,269		969			42.7			6,080			4,085		1,995			48.8
ATM and electronic banking interchange expenses		1,712		1,299		413			31.8			3,434		2,515		919			36.5			1,962		1,712		250			14.6			3,752			3,434		318			9.3
Postage and courier expenses		1,198		985		213			21.6			2,747		1,945		802			41.2			1,330		1,198		132			11.0			2,588			2,747		(159	)		(5.8	)
Legal fees		936		644		292			45.3			1,615		1,357		258			19.0			836		936		(100	)		(10.7	)		1,650			1,615		35			2.2
Communications		895		565		330			58.4			1,825		1,054		771			73.1			1,220		895		325			36.3			2,244			1,825		419			23.0
Supplies		1,106		778		328			42.2			2,246		1,465		781			53.3			1,310		1,106		204			18.4			2,527			2,246		281			12.5
Other real estate owned and foreclosure expenses		152		251		(99	)		(39.4	)		163		449		(286	)		(63.7	)		48		152		(104	)		(68.4	)		(17	)		163		(180	)		(110.4	)
Other		3,999		3,159		840			26.6			8,016		6,074		1,942			32.0			5,026		3,999		1,027			25.7			9,542			8,016		1,526			19.0
Total non-interest expense	$	71,952	$	63,543	$	8,409			13.2		$	146,385	$	118,114	$	28,271			23.9		$	85,502	$	71,952	$	13,550			18.8		$	176,835		$	146,385	$	30,450			20.8

Non-interest expense in the second quarter of ~~2019~~2020 increased ~~by $8.4~~$13.6 million or ~~13.2%~~18.8% compared to the same quarter in ~~2018,~~2019, principally ~~from~~due to the OLBK acquisition, which increased assets by $3.0 billion, excluding goodwill, and added 37 offices to our branch network. In the second quarter of 2020, there were $0.5 million of merger-related expenses for the OLBK acquisition, as compared to $0.1 million in the second quarter of 2019 for the FFKT ~~acquisition, which closed in the third quarter of 2018.~~acquisition. Excluding merger-related expenses, non-interest expense increased ~~$13.7~~$13.2 million or ~~23.6%. For~~18.3% from the second quarter ~~salaries~~of 2019 to the second quarter of 2020 and ~~wages~~ increased $4.8 million, employee benefits increased $1.7 million, net occupancy increased $1.3 million, amortization of intangible assets increased $1.2 million and franchise and other miscellaneous taxes increased by $1.1 million, offset by a decrease of $5.3 million in merger-related expenses. For the six months ended June 30, 2019, non-interest expense increased by $28.3$28.0 million or ~~23.9%~~19.6% from the first six months of ~~2018 for similar reasons for~~2019 to the ~~three~~first six months ~~ended.~~of 2020.

Salaries and wages increased ~~$4.8~~$5.1 million or ~~17.8%~~16.2% from the second quarter of ~~2018~~2019 due to increased compensation expense related to ~~a 15.3%~~an increase in full-time equivalent (“FTE”) employees from the ~~FFKT~~OLBK acquisition and from annual merit increases in ~~the second quarter of 2019.~~mid-2019. Employee benefits expense increased ~~$1.7~~$0.4 million or 4.5% compared to the second quarter of ~~2018, primarily from~~2019, due specifically to a ~~$0.8~~$1.1 million ~~increase~~market adjustment in ~~health care costs and a $0.3 million increase in employer payroll taxes, which is primarily attributable to the increased headcount of 313 FTE employees since June 30, 2018.~~

~~Net occupancy costs increased $1.3 million or 31.2% compared to~~ the second quarter of ~~2018, primarily~~2020 on the underlying investments of the deferred compensation plan. Excluding this market adjustment, employee benefits expense decreased from the prior year quarter due to a decrease in health insurance claim expense during the pandemic.

Net occupancy increased $1.2 million or 23.2% from the second quarter of 2020, principally due to increased building-related costs ~~from the additional branches acquired in the FFKT acquisition~~ including utilities, lease expense, depreciation, repairs and other seasonal maintenance ~~costs. Upon core conversion~~costs, mostly from the acquired retail branches, as well as normal building maintenance and repair costs of ~~FFKT in~~ the ~~first~~legacy branch network and other infrastructure needs. For the six months ended June 30, 2020, net occupancy increased $2.8 million or 25.3% compared to the six months ended June 30, 2019.

Equipment costs increased $0.9 million or 18.8% compared to the second quarter of 2019, ~~WesBanco closed~~due to the OLBK acquisition and increases in service agreements expense from continuous improvements in technology and communication infrastructure, software costs and loan origination and customer support centers.

FDIC insurance increased $1.2 million or ~~consolidated~~107.4% compared to the second quarter of 2019, due to the growth in the Bank’s balance sheet primarily from the OLBK acquisition in November 2019, which caused the assessment base to increase, and risk factors related to various balance sheet categories in the more complex calculation for large banks over $10 billion in total assets. For the six ~~branches in Kentucky~~months ended June 30, 2020, FDIC insurance increased $2.0 million or 79.7% compared to ~~reduce overlapping locations, which allows~~ the ~~Company to operate more cost efficiently and provide better facilities.~~six months ended June 30, 2019.

Amortization of intangible assets increased ~~$1.2~~$0.9 million or ~~87.9%~~36.5% compared to the second quarter of ~~2018.~~2019. The ~~FFKT~~OLBK acquisition added approximately ~~$37.4~~$32.9 million in core deposit ~~intangibles~~intangibles. For the six months ended June 30, 2020, amortization of intangible assets increased $1.8 million or 35.4% compared to the six months ended June 30, 2019.

~~Merger-related~~merger-related expenses in the second quarter of ~~2019~~2020 totaled ~~$0.1~~$0.5 million, all of which were related to the ~~FFKT~~OLBK acquisition that closed ~~on August 20, 2018,~~in the fourth quarter of 2019. The merger-related expenses included $0.2 million in change in control payments, $0.2 million in non-refundable one-time conversion costs and ~~decreased $5.3~~$0.1 million in retention bonuses.

Consulting, regulatory, accounting and advisory fees increased $1.0 million or 42.7% from the ~~$5.4 million in merger-related expenses that were recorded~~second quarter of 2019 due to increased swap clearing expense from a higher volume of cleared swaps in the second quarter of ~~2018 for the FTSB~~2020 compared to same period of 2019, as well as increased underwriting and ~~FFKT acquisitions.~~

~~Franchise and other miscellaneous taxes increased by $1.1 million or 52.5%~~processing fees from ~~the same quarter~~a higher volume of ~~2018 due to a $0.6 million increase~~mortgage originations in the Kentucky corporate franchise tax from the FFKT acquisition, which was headquartered in Kentucky. Real and personal property taxes also increased by $0.3 million due to the addition of FFKT’s branches.current period.

The provision for income taxes ~~increased $2.8~~is $42 thousand for the three months ended June 30, 2020, which is a $10.1 million ~~or 37.7% in the second quarter of 2019~~decrease compared to the ~~second quarter of 2018,~~three months ended June 30, 2019. The decrease in the provision for income taxes is primarily ~~due to a $14.4~~driven by the $50.4 million ~~or 35.6% increase~~decrease in pre-tax income. The effective tax rate ~~increased~~decreased to ~~18.4%~~0.9% compared to ~~18.1%~~18.4% in the second quarter of ~~2018.~~2019. For the six months ended June 30, ~~2019,~~2020, the provision for income taxes ~~increased $4.6~~was $3.7 million, ~~or 32.2% as~~which is a $15.3 million decrease compared to the ~~prior year period.~~six months ended June 30, 2019. The decrease in the provision for income taxes is primarily driven by the $72.6 million decrease in pre-tax income and $0.9 million of discrete benefit items in the first half of 2020. The effective tax rate decreased to 11.6% compared to 18.1%, for the first half of ~~2019 was 18.2% compared to 17.7% in the prior year period.~~2019.

Total assets and ~~shareholders’ equity~~deposits increased ~~0.3%~~6.6% and ~~4.8%~~10.7%, respectively, while ~~deposits~~shareholders’ equity decreased ~~1.5%~~0.9%, compared to December 31, ~~2018.~~2019. Total securities decreased ~~by $105.1~~$405.8 million or ~~3.3%~~12.5% from December 31, ~~2018~~2019 to June 30, ~~2019,~~2020, primarily driven by the sale of ~~lower yielding municipal~~mortgage-backed securities and ~~the repayment~~collateralized mortgage obligations, at a net gain of ~~mortgage-backed securities, which were~~$2.1 million, to provide for additional liquidity related to potential COVID-19 requirements. The securities’ decrease was partially offset by a ~~$53.1~~$50.4 million increase in unrealized gains in the available-for-sale portfolio. Total portfolio loans increased ~~$81.6~~$806.2 million or ~~1.1%.~~7.9% as participation in the SBA PPP loan program provided approximately $836.8 million in loans. Deposits ~~decreased $136.7 million~~increased $1.2 billion from year-end resulting from ~~a 6.2%~~increases of 21.3%, ~~a 3.9%~~8.7%, and ~~a 0.6% decrease~~6.1% in ~~certificates of deposit, money market~~demand deposits, savings deposits, and ~~demand~~money market deposits, respectively, which were partially offset by a ~~1.5% increase~~12.0% decrease in ~~savings deposits.~~certificates of deposit. The growth in transaction-based accounts is primarily attributable to marketing, customer incentives, focused retail and business strategies to obtain more account relationships and customer preferences for shorter-term maturities. The transaction-based accounts increased towards the end of the first quarter and into the second quarter from the CARES Act individual and family payments, as well as deposits from businesses obtaining loans from the SBA PPP loans. Deposit balances were also impacted by bonus and royalty payments for Marcellus and Utica shale gas payments from energy companies in Wesbanco’s southwestern Pennsylvania, eastern Ohio, and northern West Virginia markets. The decrease in certificates of deposit is a result of periodically offering lower than median competitive rates for maturing certificates of deposit, primarily for single-service customers, and customer preferences for other deposit types, coupled with a ~~$9.9~~$0.6 million decrease in CDARS® balances. The ~~decrease in demand deposits and money market deposits~~decline was ~~primarily attributable to initial~~also impacted by customer run-off of higher cost certificates of deposit from the ~~FTSB and FFKT acquisitions.~~OLBK acquisition. Total borrowings ~~increased 2.6%~~decreased 9.8% or $185.4 million during the first six months of ~~2019~~2020 as FHLB maturities exceeded new FHLB borrowings ~~exceeded maturities~~ by ~~$67.1~~$286 million, ~~and~~coupled with $6.7 million of junior subordinated debentures, acquired from OLBK, which were redeemed during the first quarter of 2020. These decreases were partially offset by a $108.4 million increase in other short-term borrowings, ~~increased $5.6~~mostly customer repurchase agreements. Total shareholders’ equity decreased approximately $24.4 million or 0.9%, compared to December 31, 2019, primarily due to the retained earnings effect of ASU 2016-13 adoption totaling $26.6 million, share repurchase and restricted stock vesting activity totaling $25.2 million, and dividends exceeding net income for the period by $15.1 million, which were partially offset by $33.5 million of junior subordinated debentures redeemed during the first six months of 2019. Total shareholders’ equity increased by approximately $95.3 million or 4.8%, compared to December 31, 2018, primarily due to net income exceeding dividends for the period by $51.3 million and a ~~$42.0~~$39.3 million other comprehensive income gain.

	June 30,			December 31,									June 30,			December 31,
(unaudited, dollars in thousands)	2019			2018			$ Change			% Change			2020			2019			Change ($)			Change (%)
Equity securities (at fair value)	$	11,817		$	11,737		$	80			0.7		$	12,277		$	12,343		$	(66	)		(0.5	)
Available-for-sale debt securities (at fair value)
U.S. Treasury		29,781			19,878			9,903			49.8			19,979			32,836			(12,857	)		(39.2	)
U.S. Government sponsored entities and agencies		134,587			141,652			(7,065	)		(5.0	)		162,913			159,628			3,285			2.1
Residential mortgage-backed securities and collateralized mortgage obligations of government sponsored entities and agencies		1,563,042			1,561,255			1,787			0.1			1,492,635			1,815,987			(323,352	)		(17.8	)
Commercial mortgage-backed securities and collateralized mortgage obligations of government sponsored entities and agencies		178,656			168,972			9,684			5.7			221,365			190,409			30,956			16.3
Obligations of states and political subdivisions		183,178			185,114			(1,936	)		(1.0	)		132,229			145,609			(13,380	)		(9.2	)
Corporate debt securities		40,040			37,258			2,782			7.5			44,828			49,089			(4,261	)		(8.7	)
Total available-for-sale debt securities	$	2,129,284		$	2,114,129		$	15,155			0.7		$	2,073,949		$	2,393,558		$	(319,609	)		(13.4	)
Held-to-maturity debt securities (at amortized cost)
U.S. Government sponsored entities and agencies	$	10,020		$	10,823		$	(803	)		(7.4	)	$	8,381		$	9,216		$	(835	)		(9.1	)
Residential mortgage-backed securities and collateralized mortgage obligations of government sponsored entities and agencies		136,929			148,300			(11,371	)		(7.7	)		108,984			122,937			(13,953	)		(11.3	)
Obligations of states and political subdivisions		720,399			828,520			(108,121	)		(13.0	)		615,862			686,376			(70,514	)		(10.3	)
Corporate debt securities		33,257			33,291			(34	)		(0.1	)		33,189			33,224			(35	)		(0.1	)
Total held-to-maturity debt securities		900,605			1,020,934			(120,329	)		(11.8	)		766,416			851,753			(85,337	)		(10.0	)
Total securities	$	3,041,706		$	3,146,800		$	(105,094	)		(3.3	)	$	2,852,642		$	3,257,654		$	(405,012	)		(12.4	)
Available-for-sale and equity securities:
Weighted average yield at the respective period end ⁽²⁾		2.76	%		2.78	%								2.53	%		2.67	%
As a % of total securities		70.4	%		67.6	%								73.1	%		73.9	%
Weighted average life (in years)		4.4			5.0									3.6			4.1
Held-to-maturity securities:
Weighted average yield at the respective period end ⁽²⁾		3.53	%		3.47	%								3.48	%		3.51	%
As a % of total securities		29.6	%		32.4	%								26.9	%		26.1	%
Weighted average life (in years)		3.7			4.6									3.6			3.8
Total securities:
Weighted average yield at the respective period end ⁽²⁾		2.99	%		3.00	%								2.80	%		2.89	%
As a % of total securities		100.0	%		100.0	%								100.0	%		100.0	%
Weighted average life (in years)		4.1			4.2									3.6			4.0

⁽¹⁾ At June 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.

Total investment securities, which are a source of liquidity for ~~WesBanco~~Wesbanco as well as a contributor to interest income, decreased ~~by $105.1~~$405.0 million or ~~3.3%~~12.4% from December 31, ~~2018~~2019 to June 30, ~~2019.~~2020. Through the first six months of ~~2019,~~2020, the available-for-sale portfolio ~~increased by $15.2~~decreased $319.6 million or ~~0.7%,~~13.4% primarily due to the sale of residential mortgage-backed securities at the end of the first quarter to take advantage of market opportunities and to free up cash for COVID-19 related needs, such as larger commercial or home equity line withdrawals, while the held-to-maturity portfolio decreased ~~by $120.3~~$85.3 million or ~~11.8%~~10.0% due to ~~$67.4 million~~calls of ~~held-to-maturity callable~~ municipal securities being transferred to available-for-sale, with the adoption of ASU 2017-12. WesBanco elected to use the one-time transition election to transfer these securities as they were some of the lower yielding securities in the ~~municipal portfolio, and subsequently sold $66.1 million of these securities at a $51 thousand net gain.~~current lower rate environment. The weighted average yield of the portfolio decreased by ~~one~~9 basis ~~point~~points from ~~3.00%~~2.89% at December 31, ~~2018~~2019 to ~~2.99%~~2.80% at June 30, ~~2019, primarily~~2020, due to increased prepayment speeds on mortgage-backed securities and calls of legacy higher rate agency and municipal securities as market rates declined in the ~~second quarter. During the second quarter~~first half of ~~2019, WesBanco recorded a $2.6 million gain on the sale of its Visa class B stock, which was held at zero cost basis. WesBanco holds no additional shares of Visa class B stock.~~2020.

Net unrealized gains ~~(losses)~~ on available-for-sale securities included in accumulated other comprehensive income, net of tax, as of June 30, ~~2019~~2020 and December 31, ~~2018~~2019 were ~~$19.4~~$56.8 million and ~~($21.5)~~$20.7 million, respectively. The net unrealized pre-tax gains represent temporary fluctuations resulting from changes in market rates in relation to fixed yields in the available-for-sale portfolio, and on an after tax-basis are accounted for as an adjustment to other comprehensive income in shareholders’ equity. Net unrealized pre-tax gains in the held-to-maturity portfolio, which are not accounted for in other comprehensive income, were $36.3 million at June 30, 2020, compared to $22.8 million at December 31, 2019. With approximately ~~30%~~27% of the investment portfolio in the held-to-maturity category, the recent volatility in interest rates does not have as much impact on other comprehensive income as if the entire portfolio were included in the ~~category available-for-sale.~~available-for-sale category. The increase in unrealized gains from year-end are due to the significant decrease in market rates and the shape of the yield curve throughout the first half of 2020 resulting from COVID-19 and the federal funds rate decreases. Volatility in the municipal and corporate bond markets mitigated the overall increase in unrealized gains for those sectors of the portfolio.

Equity securities, of which a portion consist of investments in various mutual funds held in grantor trusts formed in connection with a key officer and director deferred compensation plan, are recorded at fair value. Gains and losses due to fair value fluctuations on equity securities are included in net securities gains or losses. For those equity securities relating to the key officer and director deferred compensation plan, the corresponding change in the obligation to the employee is recognized in employee benefits expense.

~~WesBanco’s~~On January 1, 2020, Wesbanco adopted ASU 2016-13 (Topic 326), Measurement of Credit Losses on Financial Instruments. Upon adoption, the Company recognized $0.2 million to opening retained earnings, which represented the CECL allowance as of January 1, 2020. The corporate and municipal bonds in Wesbanco’s held-to-maturity debt portfolio are analyzed quarterly to determine if an allowance for current expected credit losses is warranted. Wesbanco uses a database of historical financials of all corporate and municipal issuers and actual historical default and recovery rates on rated and non-rated transactions to estimate expected credit losses on an individual security basis. The expected credit losses are adjusted quarterly and are recorded in an allowance for expected credit losses on the balance sheet, which is deducted from the amortized cost basis of the held-to-maturity portfolio as a contra asset. The losses are recorded on the income statement in the provision for credit losses. Held-to-maturity investments in U.S. Government sponsored entities and agencies as well as mortgage-backed securities and collateralized mortgage obligations, which are all either issued by a direct governmental entity or a government-sponsored entity, have no historical evidence supporting expected credit losses; therefore, Wesbanco has estimated these losses at zero, and will monitor this assumption in the future for any economic or governmental policies that could affect this assumption.

Wesbanco’s municipal portfolio ~~comprises 29.7%~~represented 26.2% of the overall securities portfolio as of June 30, ~~2019~~2020 compared to ~~32.2%~~25.5% as of December 31, ~~2018,~~2019, and it carries different risks that are not as prevalent in other security types contained in the portfolio. The following table presents the allocation of the individual bonds in the municipal bond portfolio based on the combined ~~S&P and Moody’s~~ ratings of ~~the individual bonds~~two major bond credit rating agencies (at fair value):

	June 30, 2019				December 31, 2018				June 30, 2020				December 31, 2019
(unaudited, dollars in thousands)	Amount		% of Total		Amount		% of Total		Amount		% of Total		Amount		% of Total
Municipal bonds (at fair value) ⁽¹⁾:
Moody's: Aaa / S&P: AAA	$	98,021		10.6	$	101,557		10.0
Moody's: Aa1 ; Aa2 ; Aa3 / S&P: AA+ ; AA ; AA-		592,215		64.2		654,787		64.3
Moody's: A1 ; A2 ; A3 / S&P: A+ ; A ; A-		212,664		23.0		237,847		23.4
Moody's: Baa1 ; Baa2 ; Baa3 / S&P: BBB+ ; BBB ; BBB- ⁽²⁾		7,657		0.8		7,607		0.7
Investment Grade - Prime									$	68,827		8.9	$	78,730		9.2
Investment Grade - High										535,141		68.8		569,085		66.7
Investment Grade - Upper Medium										161,406		20.8		190,696		22.4
Investment Grade - Lower Medium										3,070		0.4		3,042		0.4
Non-Investment Grade - Speculative										—		—		638		0.1
Not rated by either agency		12,370		1.4		16,595		1.6		8,273		1.1		10,011		1.2
Total municipal bond portfolio	$	922,927		100.0	$	1,018,393		100.0	$	776,717		100.0	$	852,202		100.0

⁽¹⁾~~The lowest available rating was used when placing the bond into a category in the table.~~

⁽²⁾ ~~As of June 30, 2019 and December 31, 2018, there are no securities in the municipal portfolio rated below investment grade.~~

~~WesBanco’s~~Wesbanco’s municipal bond portfolio at June 30, ~~2019~~2020 consists of ~~$182.8~~$141.5 million of taxable (primarily Build America Bonds) and ~~$740.1~~$635.2 million of tax-exempt general obligation and revenue bonds. The following table presents additional information regarding the municipal bond type and issuer (at fair value):

	June 30, 2019				December 31, 2018				June 30, 2020				December 31, 2019
(unaudited, dollars in thousands)	Amount		% of Total		Amount		% of Total		Amount		% of Total		Amount		% of Total
Municipal bond type:
General Obligation	$	625,476		67.8	$	690,463		67.8	$	534,869		68.9	$	581,105		68.2
Revenue		297,451		32.2		327,930		32.2		241,848		31.1		271,097		31.8
Total municipal bond portfolio	$	922,927		100.0	$	1,018,393		100.0	$	776,717		100.0	$	852,202		100.0
Municipal bond issuer:
State Issued	$	83,841		9.1	$	98,468		9.7	$	55,127		7.1	$	76,228		8.9
Local Issued		839,086		90.9		919,925		90.3		721,590		92.9		775,974		91.1
Total municipal bond portfolio	$	922,927		100.0	$	1,018,393		100.0	$	776,717		100.0	$	852,202		100.0

~~WesBanco’s~~Wesbanco’s municipal bond portfolio is broadly spread across the United States. The following table presents the top five states of municipal bond concentration based on total fair value at June 30, ~~2019:~~2020:

	June 30, 2019				June 30, 2020
(unaudited, dollars in thousands)	Fair Value		% of Total		Fair Value		% of Total
Pennsylvania	$	179,483		19.4	$	175,433		22.6
Ohio		100,090		10.8		90,585		11.7
Texas		98,586		10.7		69,635		9.0
Kentucky		55,466		6.0		41,613		5.4
Illinois		42,990		4.7
West Virginia						35,740		4.6
All other states ⁽¹⁾		446,312		48.4		363,711		46.7
Total municipal bond portfolio	$	922,927		100.0	$	776,717		100.0

⁽¹⁾ ~~WesBanco’s municipal bond portfolio contains obligations in the State of West Virginia totaling $39.6 million or 4.3% of the total municipal portfolio.~~

~~WesBanco~~Wesbanco uses prices from independent pricing services and, to a lesser extent, indicative (non-binding) quotes from independent brokers, to measure the fair value of its securities. ~~WesBanco~~Wesbanco validates prices received from pricing services or brokers using a variety of methods, including, but not limited to, comparison to secondary pricing services, corroboration of pricing by reference to other independent market data such as secondary broker quotes and relevant benchmark indices, review of pricing by personnel familiar with market liquidity and other market-related conditions, review of pricing service methodologies, review of independent auditor reports received from the pricing service regarding its internal controls, and through review of inputs and assumptions used in pricing certain securities thinly traded or with limited observable data points. The procedures in place provide management with a sufficient understanding of the valuation models, assumptions, inputs and pricing to reasonably measure the fair value of ~~WesBanco’s~~Wesbanco’s securities. For additional disclosure relating to fair value measurements, refer to Note 9,8, “Fair Value Measurement” in the Consolidated Financial Statements.

Loans represent ~~WesBanco’s~~Wesbanco’s single largest balance sheet asset classification and the largest source of interest income. Business purpose loans consist of commercial real estate (“CRE”) loans and other commercial and industrial (“C&I”) loans that are not secured by real estate. CRE loans are further segmented into land and construction loans, and loans for improved property. Consumer purpose loans consist of residential real estate loans, home equity lines of credit and other consumer loans. Loans held for sale generally consist of residential real estate loans originated for sale in the secondary market, but at times may also include other types of loans. The outstanding balance of each major category of the loan portfolio is summarized in Table 10.

The risk that borrowers will be unable or unwilling to repay their obligations and default on loans is inherent in all lending activities. Credit risk arises from many sources including general economic conditions, external events that impact businesses or industries, isolated events that impact a major employer, individual loss of employment or other personal hardships as well as changes in interest rates or the value of collateral. Credit risk is also impacted by a concentration of exposure within a geographic market or to one or more borrowers, industries or collateral types. The primary goal in managing credit risk is to minimize the impact of default by an individual borrower or group of borrowers. Credit risk is managed through the initial underwriting process as well as through ongoing monitoring and administration of the portfolio that varies by the type of loan. The Bank’s credit policies establish standard underwriting guidelines for each type of loan and require an appropriate evaluation of the credit characteristics of each borrower. This evaluation includes the borrower’s primary source of repayment capacity; the adequacy of collateral, if any, to secure the loan; the potential value of personal guarantees as secondary sources of repayment; and other factors unique to each loan that may increase or mitigate its risk. Credit bureau scores are also considered when evaluating consumer purpose loans as well as guarantors of business purpose loans. However, the Bank does not periodically update credit bureau scores subsequent to when loans are made to determine changes in credit history.

Credit risk is mitigated for all types of loans by continuously monitoring delinquency levels and pursuing collection efforts at the earliest stage of delinquency. The Bank also monitors general economic conditions, including employment, housing activity and real estate values in its market. The Bank also periodically evaluates and changes its underwriting standards when warranted based on market conditions, the historical performance of a category of the portfolio, or other external factors. Credit risk is also regularly evaluated for the impact of adverse economic and other events, such as the current COVID-19 pandemic crisis, that increase the risk of default and the potential loss in the event of default, to understand their impact on the Bank’s earnings and capital.

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.

	June 30, 2019				December 31, 2018				June 30, 2020				December 31, 2019
(unaudited, dollars in thousands)	Amount		% of Loans		Amount		% of Loans		Amount		% of Loans		Amount		% of Loans
Commercial real estate:
Land and construction	$	483,046		6.2	$	528,072		6.9	$	671,486		6.0	$	777,151		7.5
Improved property		3,394,587		43.8	$	3,325,623		43.4		5,022,971		45.2		4,947,857		48.0
Total commercial real estate		3,877,633		50.0		3,853,695		50.3		5,694,457		51.2		5,725,008		55.5
Commercial and industrial		1,300,577		16.8		1,265,460		16.5		1,659,296		14.9		1,644,699		16.0
Commercial and industrial - PPP										836,800		7.5		—		-
Residential real estate		1,633,613		21.1		1,611,607		21.0		1,893,544		17.0		1,873,647		18.2
Home equity		590,303		7.6		599,331		7.8		646,323		5.8		649,678		6.3
Consumer		335,728		4.3		326,188		4.3		343,723		3.1		374,953		3.6
Total portfolio loans		7,737,854		99.8		7,656,281		99.9		11,074,143		99.5		10,267,985		99.6
Loans held for sale		18,649		0.2		8,994		0.1		53,324		0.5		43,013		0.4
Total loans	$	7,756,503		100.0	$	7,665,275		100.0	$	11,127,467		100.0	$	10,310,998		100.0

Total loans increased ~~$91.2~~$816.5 million or ~~1.2%~~7.9% from December 31, ~~2018~~2019, while portfolio loans increased ~~$945.0 million~~$3.3 billion or ~~13.9%~~43.1% over the last twelve months. ~~Total~~Most of the loan growth over the last twelve months was ~~primarily~~ due to the acquisition of ~~FFKT.~~OLBK in November 2019, totaling $2.5 billion, as well as the origination of $836.8 million of PPP loans during the second quarter of 2020. Total organic ~~loans were down 1.1% year-over-year, resulting from lower~~loan growth over the last twelve months was 0.2% driven by strategic focus categories with 3.79% organic growth in commercial real estate and 1.62% organic growth in residential real estate. There was no growth in home equity organic loan balances due to lower demand as a result of higher interest rates earlier in 2019 and tax ~~changes, elevated levels of~~changes. Organic commercial ~~real estate~~and industrial loans ~~that moved to~~decreased 8.3% over the ~~secondary financing market, and continued deleveraging by commercial customers reflective of the current operational environment and higher cash levels from tax reform.~~last twelve months.

Total loan commitments of ~~$2.5~~$3.3 billion, including loans approved but not closed, ~~increased $42.5~~decreased $4.4 million or ~~1.8%~~0.1% from December 31, ~~2018~~2019 due primarily to ~~loans approved but not closed.~~a decrease in lines of credit. The line utilization percentage for the commercial portfolio was ~~46.9%~~34.4% at June 30, ~~2019 and 47.6% at~~2020 compared to 44.5% as of December 31, ~~2018.~~2019.

The commercial portfolio is monitored for potential concentrations of credit risk by market, type of lending, CRE property type, C&I and owner-occupied CRE by industry, investment CRE dependence on common tenants and industries or property types that are similarly impacted by external factors.

39During the first quarter of 2020, Wesbanco sold $36.7 million of certain under-performing loans acquired from OLBK. The majority of these loans settled by March 31, 2020; however, $8.9 million settled in April 2020, and therefore they were classified as loans held for sale as of March 31, 2020. Loans held for sale at June 30, 2020 are originated residential mortgages that will be sold into the secondary market.

Wesbanco is participating in the PPP loan program as established by the CARES Act. As of June 30, 2020, the Company has funded nearly 6,800 loans totaling $836.8 million to qualifying small businesses, non-profits and organizations throughout our six-state footprint. The loans carry an interest rate of 1%, are generally for a two-year maturity, and were originated with a percentage fee paid by the SBA directly to the Bank depending on the size of the loan originated. At June 30, 2020, remaining unaccreted fees, net of deferred origination costs were $24.3 million. The loans are subject to forgiveness by the SBA under certain defined circumstances, and it is anticipated a high percentage of such loans will meet such requirements (as revised) over the next two years.

	June 30, 2020
	Land and Construction				Improved Property				Commercial and Industrial				PPP
(unaudited, in thousands)	Balance		Commitment		Balance		Commitment		Balance		Commitment		Loan Balance		Total Loan Balance		Total Exposure		% of Capital (2)
Agriculture and farming	$	19,206	$	1,921	$	3,097	$	527	$	8,154	$	5,912	$	2,772	$	33,229	$	41,589		2.7
Energy		1,577		—		43,340		1,527		89,703		58,838		10,342		144,962		205,327		13.4
Construction		146,166		119,018		142,663		42,078		175,100		187,183		159,541		623,470		971,749		63.2
Manufacturing		529		8		82,223		9,020		161,348		119,487		68,074		312,174		440,689		28.7
Wholesale and distribution		166		34		43,208		2,509		119,804		60,020		31,789		194,967		257,530		16.8
Retail		3,011		2,354		249,439		7,240		91,011		77,273		41,182		384,643		471,510		30.7
Transportation and warehousing		7,249		9,842		72,052		2,555		40,206		16,864		19,769		139,276		168,537		11.0
Information and communications		68		121		4,129		-		8,179		3,221		4,266		16,642		19,984		1.3
Finance and insurance		1,591		—		12,105		479		75,527		116,822		12,399		101,622		218,923		14.2
Equipment leasing		822		—		13,556		313		56,331		29,922		12,921		83,630		113,865		7.4
Real estate - 1-4 family		5,285		2,373		319,910		10,979		82,831		4,485		—		408,026		425,863		27.7
Real estate - multi-family		196,838		201,714		508,014		12,568		1,840		281		—		706,692		921,255		59.9
Real estate - other retail		14,848		9,936		247,142		4,152		5,599		266		—		267,589		281,943		18.3
Real estate - shopping center		562		1,838		248,138		5,217		2,005		—		—		250,705		257,760		16.8
Real estate - office building		27,286		21,877		497,802		7,028		9,004		3,875		—		534,092		566,872		36.9
Real estate - commercial/manufacturing		23		3,977		375,140		8,972		10,605		52		—		385,768		398,769		25.9
Real estate - residential buildings		37,797		77,377		134,150		31,557		31,790		16,659		9,393		213,130		338,723		22.0
Real estate - other		64,232		44,559		45,284		58,890		54,880		25,294		7,221		171,617		300,360		46.3
Services		14,421		4,211		196,668		4,349		165,948		119,511		131,634		508,671		636,742		41.4
Schools and education services		15,006		9,015		24,142		551		92,712		16,923		11,381		143,241		169,730		11.0
Healthcare		39,241		84,487		329,151		17,714		120,634		60,073		83,791		572,817		735,091		47.8
Entertainment and recreation		1,304		103		55,257		2,248		15,340		4,140		8,709		80,610		87,101		5.7
Hotels		31,866		15,748		694,659		14,982		2,654		3,039		11,897		741,076		774,845		50.4
Other accommodations		61		—		55,740		214		4,195		1,238		566		60,562		62,014		4.0
Restaurants		819		—		100,654		2,254		69,079		23,034		44,395		214,947		240,235		15.6
Religious organizations		771		750		82,531		1,376		47,230		20,359		7,974		138,506		160,991		10.5
Government		34,913		—		17,259		641		115,837		45,213		5,573		173,582		219,436		14.3
Unclassified		5,828		4,787		425,518		21,188		1,750		63,109		151,211		584,307		673,391		43.8
Total commercial loans	$	671,486	$	616,050	$	5,022,971	$	271,127	$	1,659,296	$	1,083,093	$	836,800	$	8,190,553	$	10,160,823		661.0

	June 30, 2020
	Land and Construction				Improved Property				Commercial and Industrial								Percent Modified
(unaudited, in thousands)	Balance		Commitment		Balance		Commitment		Balance		Commitment		Total Loan Balance		Total Exposure		Balance	Exposure
Agriculture and farming	$	473	$	—	$	—	$	—	$	173	$	45	$	646	$	691	1.9%	1.7%
Energy		—		—		1,625		—		5,140		509		6,765		7,275	4.7%	3.5%
Construction		10,762		1,019		11,594		68		9,776		379		32,132		33,596	5.2%	3.5%
Manufacturing		—		—		19,147		3		7,299		29		26,446		26,480	8.5%	6.0%
Wholesale and distribution		—		—		12,104		—		31,794		777		43,898		44,675	22.5%	17.3%
Retail		1,029		—		40,413		65		15,619		7,126		57,061		64,251	14.8%	13.6%
Transportation and warehousing		—		—		11,720		—		12,778		49		24,498		24,547	17.6%	14.6%
Information and communications		68		121		2,464		—		3,468		283		6,000		6,404	36.1%	32.0%
Finance and insurance		216		—		884		—		69		10		1,169		1,179	1.2%	0.5%
Equipment leasing		—		—		2,453		—		6,096		35		8,549		8,584	10.2%	7.5%
Real estate - 1-4 family		206		190		71,970		15		14,038		—		86,214		86,419	21.1%	20.3%
Real estate - multi-family		398		1		89,130		7		—		—		89,528		89,536	12.7%	9.7%
Real estate - other retail		8,470		1,630		100,802		—		5,018		266		114,290		116,186	42.7%	41.2%
Real estate - shopping center		—		—		121,618		1,036		—		—		121,618		122,654	48.5%	47.6%
Real estate - office building		—		—		80,935		518		75		1		81,010		81,529	15.2%	14.4%
Real estate - commercial/manufacturing		—		—		111,672		—		18		—		111,690		111,690	29.0%	28.0%
Real estate - residential buildings		268		—		30,826		57		3,792		39		34,886		34,982	16.4%	10.3%
Real estate - other		2,061		984		110,633		2,863		4,545		1		117,239		121,087	68.3%	40.3%
Services		111		—		29,314		136		50,831		1,519		80,256		81,911	15.8%	12.9%
Schools and education services		—		—		1,950		—		337		—		2,287		2,287	1.6%	1.3%
Healthcare		619		89		91,472		143		18,936		695		111,027		111,954	19.4%	15.2%
Entertainment and recreation		—		—		34,697		3		4,097		215		38,794		39,012	48.1%	44.8%
Hotels		13,922		204		446,994		1,325		318		—		461,234		462,763	62.2%	59.7%
Other accommodations		—		—		30,292		33		—		—		30,292		30,325	50.0%	48.9%
Restaurants		103		—		45,050		1		24,893		338		70,046		70,385	32.6%	29.3%
Religious organizations		—		—		21,018		—		8,481		10		29,499		29,509	21.3%	18.3%
Government		—		—		1,006		249		312		86		1,318		1,653	0.8%	0.8%
Unclassified		420		108		1,965		—		631		—		3,016		3,124	0.5%	0.5%
Total modified commercial loans	$	39,126	$	4,346	$	1,523,748	$	6,522	$	228,534	$	12,412	$	1,791,408	$	1,814,687	21.9%	17.9%

Under the CARES Act, Wesbanco has modified approximately 3,540 loans totaling $2.1 billion of which $1.9 billion, or 17.5% of total loans, are currently in their deferral period as of June 30, 2020. Wesbanco offered three months deferral of principal and interest and then three additional months of principal, only, three months deferral interest, three months deferral of principal and interest, and three months deferral of principal depending on the type of loan and industry sector (for commercial loans).

All of the real estate sectors combined represent the largest industry exposure at $3.9 billion, of which multi-family, office buildings and 1-4 families are the largest categories within real estate. Multi-family makes up $921.3 million or 59.9% of total risk-based capital, office buildings are $566.9 million or 36.9% of total risk-based capital and 1-4 families are $425.9 million or 27.7% of total risk-based capital. For loan modifications as allowed under the CARES Act, $764.1 million or 49.1% of total risk-based capital of commercial real estate loans, is in deferral as of June 30, 2020.

The construction sectors combined represent the second largest industry exposure at $971.1 million or 63.2% of risk-based capital. For loan modifications allowed under the CARES Act, there were $33.6 million or 2.2% of total risk-based capital of construction loans in deferral as of June 30, 2020.

The hotel sector represents the third largest industry exposure at $774.8 million or 50.4% of risk-based capital. For loan modifications allowed under the CARES Act, there were $462.8 million or 30.1% of total risk-based capital of hotel loans in deferral as of June 30, 2020. The majority of these loans were deferred for three months of principal and interest with three additional months of principal.

Healthcare represents the fourth largest industry exposure at $735.1 million or 47.8% of total risk-based capital. For loan modifications allowed under the CARES Act, there were $112.0 million or 7.3% of total risk-based capital of healthcare loans in deferral as of June 30, 2020.

Non-performing assets consist of non-accrual loans and TDRs, other real estate acquired through or in lieu of foreclosure, bank premises held for sale, and repossessed automobiles acquired to satisfy defaulted consumer loans.

(unaudited, dollars in thousands)	June 30, 2019			December 31, 2018			June 30, 2020			December 31, 2019
Non-accrual loans:
Commercial real estate - land and construction	$	295		$	—		$	605		$	580
Commercial real estate - improved property		11,726			8,413			9,468			6,815
Commercial and industrial		2,854			3,260			2,732			14,313
Residential real estate		12,813			13,831			16,677			16,867
Home equity		4,886			4,610			5,612			5,903
Consumer		324			586			364			435
Total non-accrual loans ⁽¹⁾		32,898			30,700			35,458			44,913
TDRs accruing interest:
Commercial real estate - land and construction		—			—			—			—
Commercial real estate - improved property		743			880			1,089			1,321
Commercial and industrial		192			168			164			191
Residential real estate		4,005			4,185			3,418			3,477
Home equity		486			426			405			411
Consumer		61			85			29			31
Total TDRs accruing interest ⁽¹⁾		5,487			5,744			5,105			5,431
Total non-performing loans	$	38,385		$	36,444		$	40,563		$	50,344
Other real estate owned and repossessed assets		4,973			7,265			1,212			4,178
Total non-performing assets	$	43,358		$	43,709		$	41,775		$	54,522
Non-performing loans/total portfolio loans		0.50	%		0.48	%		0.37	%		0.49	%
Non-performing assets/total assets		0.35	%		0.35	%		0.25	%		0.35	%
Non-performing assets/total portfolio loans, other real estate and repossessed assets		0.56	%		0.57	%		0.38	%		0.53	%

⁽¹⁾ ~~TDRs on nonaccrual of $1.9 million and $2.9 million at June 30, 2019 and December 31, 2018, respectively, are included in total nonaccrual~~

Non-performing loans, which consist of non-accrual loans and TDRs, ~~increased $1.9~~decreased $9.8 million or ~~5.3%~~19.4%, from December 31, ~~2018,~~2019, primarily due to ~~WesBanco’s normal loan grade review process post-acquisition in conjunction with two downgraded relationships in our legacy portfolio, as reported in the first quarter.~~one $10.8 million non-accrual relationship that was paid. TDRs ~~decreased slightly by $0.3 million due~~balances have remained constant from December 31, 2019 to ~~normal repayments being slightly higher than additions to the category.~~June 30, 2020. (Please see the Notes to the Consolidated Financial Statements for additional discussion.)

Other real estate owned and repossessed assets decreased ~~$2.3~~$3.0 million from December 31, ~~2018~~2019 primarily due to the disposition of one commercial property and continued efforts to liquidate ~~properties and write-downs on FFKT acquired other real estate owned.~~residential properties.

The following table presents past due and accruing loans excluding non-accrual and TDRs:

(unaudited, dollars in thousands)	June 30, 2019			December 31, 2018			June 30, 2020			December 31, 2019
Loans past due 90 days or more:
Commercial real estate - land and construction	$	—		$	—		$	4,891		$	26
Commercial real estate - improved property		587			175			13,973			4,709
Commercial and industrial		97			13			8,363			1,793
Residential real estate		1,173			2,820			8,343			3,643
Home equity		533			705			714			985
Consumer		244			364			619			457
Total loans past due 90 days or more		2,634			4,077			36,903			11,613
Loans past due 30 to 89 days:
Commercial real estate - land and construction		1,010			1,412			2,052			650
Commercial real estate - improved property		2,437			4,439			8,922			15,256
Commercial and industrial		1,064			878			5,714			5,312
Residential real estate		6,779			6,542			9,261			8,183
Home equity		2,016			3,344			2,433			3,558
Consumer		2,140			2,954			2,213			3,371
Total loans past due 30 to 89 days		15,446			19,569			30,595			36,330
Total 30 days or more	$	18,080		$	23,646
Total loans 30 days or more past due							$	67,498		$	47,943
Loans past due 90 days or more and accruing to total portfolio loans		0.03	%		0.05	%		0.33	%		0.11	%
Loans past due 30-89 days and accruing to total portfolio loans		0.20	%		0.26	%		0.28	%		0.35	%

Loans past due 30 days or more and accruing interest excluding non-accruals and TDRs ~~decreased $5.6~~increased $19.6 million or ~~23.5%~~40.8% from December 31, ~~2018.~~2019. These loans continue to accrue interest because they are both well-secured and in the process of collection. Loans 90 days or more past due increased $25.3 million and represented 0.33% of total loans at June 30, 2020 compared to 0.11% at December 31, 2019. Loan 90 days past due increased primarily in CRE, which these loans are secured by underlying collateral. The decrease in the 30 to 89 days past due status was primarily due ~~to a $2.0 million decrease in the commercial real estate~~timing of payments. The 30 – ~~improved property category and~~89 days past due represented ~~0.03%~~0.28% of total loans at June 30, ~~2019~~2020 and ~~0.06%~~0.35% at December 31, ~~2018.~~2019. Loans past due 90 days or more ~~decreased $1.4~~increased $25.3 million compared to December 31, ~~2018~~2019. Loans currently modified as permitted by the regulatory authorities and ~~represented 0.03% of total loans at June 30, 2019 compared to 0.05% at December 31, 2018. The continued low levels of delinquency~~the CARES Act are the result of management’s continued focus on sound initial underwriting, timely collection of loans at their earliest stage of delinquency, stable unemployment and generally improved economic conditions.not included in Tables 14 or 15, as they are not considered non-performing TDRs, or past due.

On January 1, 2020, Wesbanco adopted CECL, which resulted in a $41.4 million increase to the allowance for credit losses. Of the $41.4 million, $38.4 million related to the loan portfolio and $3.0 million relate to loan commitments. The effect on retained earnings (tax-effected) was $26.6 million.

As of June 30, 2020, the total allowance for credit losses – loans and commitments was $179.2 million of which $168.5 million relates to loans and $10.7 million relates to loan commitments. The allowance for credit losses – loans is 1.52% of total portfolio loans as of June 30, 2020 compared to 0.51% as of December 31, 2019 when the allowance for loan losses (prior to the adoption of CECL) was $52.4 million. Excluding PPP loans of $836.8 million, the allowance for credit losses – loans is 1.65% of total portfolio loans. As per regulatory guidance, there is no allowance on PPP loans due to their government guarantees by the SBA.

The allowance for ~~loan~~credit losses of $50.9 million represented 0.66% of total portfolio loans at June 30, 2019 compared to 0.64% as of December 31, 2018 and 0.70% as of June 30, 2018. Included in the ratio are acquired FFKT loans (recorded at fair value at the date of acquisition of $1.0 billion) and the related allowance on FFKT acquired loans of $8 thousand at June 30, 2019 recorded since acquisition.

~~The allowance for~~- loans individually-evaluated increased ~~$1.5~~$6.7 million from December 31, ~~2018~~2019 to June 30, ~~2019.~~2020 due to PCD loans acquired from the OLBK acquisition. The allowance for loans collectively-evaluated increased from December 31, ~~2018~~2019 to June 30, ~~2019~~2020 by ~~$0.4 million.~~$109.3 million which includes $31.7 million related to the adoption of CECL as of January 1, 2020.

The allowance for credit losses - loan commitments was ~~$1.8~~$10.7 million at June 30, ~~2019~~2020 as compared to ~~$0.7~~$0.9 million atas of December 31, ~~2018,~~2019, and is included in other liabilities on the Consolidated Balance Sheets. The ~~increase in the~~ allowance for credit losses - loan commitments ~~is due~~includes a $3.0 million adjustment related to ~~one unfunded commitment with a credit relationship that was downgraded to classified status in~~ the ~~first quarter.~~adoption of CECL as of January 1, 2020.

The allowance for credit losses by loan category, presented in Note 5, “Loans and the Allowance for Credit Losses” of the Consolidated Financial Statements, summarizes the impact of changes in various factors that affect the allowance for loan losses in each segment of the portfolio. The allowance for ~~all segments~~credit losses under CECL is ~~impacted by changes in loan balances,~~calculated utilizing the PD/LGD, which is then discounted. 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 ~~historical loss rates adjusted for~~prepayment speeds, loan risk grades, portfolio mix, concentrations and loan growth. For the calculation as of June 30, 2020, the forecast was based upon a blend of two nationally-recognized published economic forecasts through June 30, 2020, and is primarily driven by national unemployment and interest rate spread forecasts. At quarter-end, national unemployment was projected to peak at 9.4%, and subsequently decrease to an average of 8.7% over the remainder of the forecast period. The macroeconomic factors primarily caused the allowance to increase $52.6 million from March 31, 2020 to June 30, 2020, along with certain other qualitative factors, ~~such~~which is an increase of $82.5 million since January 1, 2020.

If forecasted projections of national unemployment remain consistent with the forecast utilized by Wesbanco as ~~economic conditions. The CRE and C&I segments~~of June 30, 2020 throughout the rest of the ~~portfolio are also impacted by changes~~year, this may result in ~~the risk grading distribution of the portfolio as well as the migration of CRE loans from land and construction to improved property upon the completion of construction.~~

~~The loss migration rate by internal risk grade is the primary factor for establishing~~less significant quarterly increases in the allowance for all commercial loans, and the portfolio segment loss history is the primary factor for establishing the allowance for residential real estate, home equity and consumer loans. The categorization of loans as non-performing is not as significant a factor as the loss migration rate by risk grade or the segment loss history, although certain non-performing loans that carry specific reserves are also typically considered classified under the internal risk grading system. credit losses, assuming other model variables remain relatively constant.

Criticized and classified loans were ~~1.48%~~2.23% of total loans, increasing from ~~1.08%~~2.17% at December 31, ~~2018.~~2019. Criticized and classified loans increased ~~$31.3~~$24.2 million from December 31, ~~2018~~2019 to ~~$114.2~~$246.7 million at June 30, ~~2019~~2020, primarily due to ~~the post-acquisition loan grade review process and two larger downgraded relationships~~changes in classifications in the ~~legacy loan~~CRE portfolio, inwhich accounted for $48.6 million of the total. The CRE increase is due to various smaller credits downgraded during the second quarter of 2020. This was partially offset by one C&I credit that was paid off during the first ~~quarter.~~ quarter of 2020.

Table 1316 summarizes the allocation of the allowance for credit losses to each category of the loan portfolio. The overall allowance for loans ~~was relatively unchanged. The~~increased due the adoption of CECL. Additionally, the allowance for ~~commercial and industrial~~credit losses on LCD loan commitments has increased ~~due~~ to $8.0 million as of June 30, 2020 driven by three new unadvanced credits in the ~~downgrade~~first half of ~~a commercial and industrial loan with a remaining undrawn commitment balance.~~ 2020 for approximately $71 million.

TABLE ~~13.~~16. ALLOCATION OF THE ALLOWANCE FOR CREDIT LOSSES – LOANS AND LOAN COMMITMENTS

(unaudited, dollars in thousands)	June 30, 2019		Percent of Total		December 31, 2018		Percent of Total		June 30, 2020		Percent of Total		December 31, 2019		Percent of Total
Allowance for loan losses:
Allowance for credit losses - loans:
Commercial real estate - land and construction	$	3,701		7.0	$	4,039		8.1	$	10,335		5.8	$	4,949		9.3
Commercial real estate - improved property		22,367		42.5		20,848		42.0		90,600		50.6		20,293		38.1
Commercial and industrial		12,887		24.5		12,114		24.4		43,632		24.4		14,116		26.5
Residential real estate		3,455		6.6		3,822		7.7		13,824		7.7		4,311		8.1
Home equity		4,321		8.2		4,356		8.8		1,900		1.1		4,422		8.3
Consumer		2,682		5.1		2,797		5.6		7,255		4.0		2,951		5.5
Deposit account overdrafts		1,446		2.7		972		1.8		929		0.5		1,387		2.6
Total allowance for loan losses	$	50,859		96.6	$	48,948		98.4
Allowance for loan commitments:
Total allowance for credit losses - loans									$	168,475		94.1	$	52,429		98.4
Allowance for credit losses - loan commitments:
Commercial real estate - land and construction	$	187		0.4	$	169		0.4	$	8,060		4.5	$	235		0.4
Commercial real estate - improved property		24		0.0		33		0.1		—		0.0		22		0.0
Commercial and industrial		1,257		2.4		262		0.5		1,862		1.0		311		0.6
Residential real estate		13		0.0		12		0.0		713		0.4		15		0.0
Home equity		249		0.5		226		0.5		50		0.0		250		0.5
Consumer		36		0.1		39		0.1		—		0.0		41		0.1
Total allowance for loan commitments		1,766		3.4		741		1.6
Total allowance for credit losses	$	52,625		100.0	$	49,689		100.0
Total allowance for credit losses - loan commitments										10,685		5.9		874		1.6
Total allowance for credit losses - loans and loan commitments									$	179,160		100.0	$	53,303		100.0

Although the allowance for credit losses is allocated as described in Table ~~13,~~16, the total allowance is available to absorb actual losses in any category of the loan portfolio. However, differences between management’s estimation of probable losses and actual incurred losses in subsequent periods for any category may necessitate future adjustments to the ~~provision~~allowance for ~~loan~~credit losses applicable to the category. Management believes the allowance for credit losses is appropriate to absorb ~~probable~~expected losses at June 30, ~~2019.~~2020.

(unaudited, dollars in thousands)	June 30, 2019		December 31, 2018		$ Change			% Change			June 30, 2020		December 31, 2019		$ Change			% Change
Deposits
Non-interest bearing demand	$	2,481,065	$	2,441,041	$	40,024			1.6		$	4,067,903	$	3,178,270	$	889,633			28.0
Interest bearing demand		2,079,795		2,146,508		(66,713	)		(3.1	)		2,596,132		2,316,855		279,277			12.1
Money market		1,098,917		1,142,925		(44,008	)		(3.9	)		1,610,248		1,518,314		91,934			6.1
Savings deposits		1,670,035		1,645,549		24,486			1.5			2,103,154		1,934,647		168,507			8.7
Certificates of deposit		1,365,116		1,455,610		(90,494	)		(6.2	)		1,809,016		2,055,920		(246,904	)		(12.0	)
Total deposits	$	8,694,928	$	8,831,633	$	(136,705	)		(1.5	)	$	12,186,453	$	11,004,006	$	1,182,447			10.7

Deposits, which represent ~~WesBanco’s~~Wesbanco’s primary source of funds, are offered in various account forms at various rates through ~~WesBanco’s 199~~Wesbanco’s 236 financial centers. The FDIC insures deposits up to $250,000 per account. The CARES Act provided the authorization to the FDIC to allow for a temporary increase in the insured limit through December 31, 2020, which has not yet been adopted in rule-making.

Total deposits ~~decreased~~increased by ~~$136.7 million~~$1.2 billion or ~~1.5%~~10.7% during the first six months of ~~2019. Money market~~2020. Non-interest bearing demand deposits, ~~and~~ interest bearing demand deposits, ~~decreased 3.9% and 3.1%, respectively, which were partially offset by non-interest bearing demand and~~ savings deposits, ~~increasing by 1.6%~~ and ~~1.5%~~money market deposits increased 28.0%, 12.1%, 8.7%, and 6.1%, respectively. The growth in ~~non-interest bearing demand deposits and savings deposits~~transaction-based accounts is primarily attributable to the OLBK acquisition, marketing, customer incentives, focused retail and business strategies to obtain more account relationships and customers’ preferences for shorter-term maturities. The transaction-based accounts increased towards the end of the first quarter and into the second quarter from the CARES Act individual and family payments, as well as deposits from the small businesses obtaining loans from the PPP program. Deposit balances were also impacted by bonus and royalty payments for Marcellus and Utica shale gas payments from energy companies in ~~WesBanco’s~~Wesbanco’s southwestern Pennsylvania, eastern Ohio and northern West Virginia markets. ~~Money~~The money market ~~deposits were~~deposit increase as influenced through ~~WesBanco’s~~Wesbanco’s participation in the Insured Cash Sweep (ICS®) money market deposit ~~program. ICS®~~program, as such, reciprocal balances totaled ~~$57.3~~$358.8 million at June 30, ~~2019~~2020 compared to ~~$61.4~~$232.2 million at December 31, ~~2018.~~2019.

Certificates of deposit decreased ~~$90.5~~$246.9 million, due primarily to the effects of an overall corporate strategy designed to increase and remix retail deposit relationships and reduce single-service customers with a focus on overall products that can be offered at a lower cost to ~~WesBanco.~~Wesbanco. The decline was also impacted by customer run-off of higher cost certificates of deposit from the ~~FTSB~~OLBK acquisition, and ~~FFKT acquisitions. WesBanco~~customer preference for other account types in the current lower interest rate environment. Wesbanco does not generally solicit brokered or other deposits out-of-market or over the internet, but does participate in the Certificate of Deposit Account Registry Services (CDARS®) program. CDARS® balances totaled ~~$39.5~~$72.7 million ~~in outstanding balances~~ at June 30, ~~2019,~~2020, of which ~~$16.9~~$21.8 million represented one-way buys, compared to ~~$49.4~~$73.3 million in total outstanding balances at December 31, ~~2018,~~2019, of which ~~$22.0~~$11.8 million represented one-way buys. Certificates of deposit greater than $250,000 were approximately ~~$305.5~~$435.9 million at June 30, ~~2019~~2020, compared to ~~$323.2~~$524.2 million at December 31, ~~2018.~~2019. Certificates of deposit of $100,000 or more were approximately ~~$640.3~~$975.5 million at June 30, ~~2019~~2020, compared to ~~$684.6 million~~$1.2 billion at December 31, ~~2018.~~2019. Certificates of deposit totaling approximately ~~$815.7 million~~$1.1 billion at June 30, ~~2019~~2020 with a cost of ~~1.23%~~1.21% are scheduled to mature within the next 12 months. ~~WesBanco~~Wesbanco intends to continue to focus on its core deposit strategies and improving its overall mix of transaction accounts to total deposits. From time to time, the Bank may offer special promotions or match competitor rates on certain certificates of deposit maturities and savings products based on competition, sales strategies, liquidity needs and wholesale borrowing costs.

(unaudited, dollars in thousands)	June 30, 2019		December 31, 2018		$ Change			% Change			June 30, 2020		December 31, 2019		$ Change			% Change
Federal Home Loan Bank Borrowings	$	1,121,283	$	1,054,174	$	67,109			6.4		$	1,129,631	$	1,415,615	$	(285,984	)		(20.2	)
Other short-term borrowings		296,148		290,522		5,626			1.9			390,777		282,362		108,415			38.4
Subordinated debt and junior subordinated debt		156,534		189,842		(33,308	)		(17.5	)		192,080		199,869		(7,789	)		(3.9	)
Total	$	1,573,965	$	1,534,538	$	39,427			2.6		$	1,712,488	$	1,897,846	$	(185,358	)		(9.8	)

While borrowings are a significant source of funding for ~~WesBanco,~~Wesbanco, they are less significant as compared to total deposits. During the first six months of ~~2019,~~2020, FHLB borrowings ~~increased $67.1~~decreased $286.0 million, as ~~$285.0~~$761.0 million in maturities and other principal paydowns offset $475.0 million in new advances offset $217.9 million maturities, other principal paydowns and purchase accounting amortization. WesBanco extended the maturities of approximately $285.0 million of maturing FHLB borrowings inadvances. The average cost during the first six months ~~with a prior~~of 2020 of maturing and paid-off FHLB borrowings was 1.93%, compared to the average cost of ~~approximately 1.96%, at current short-term~~1.38% for new FHLB ~~rates approximating 2.05% - 2.32%.~~advances during the period.

Other short-term borrowings, which may consist of federal funds purchased, callable repurchase agreements, overnight sweep checking accounts, and borrowings on a revolving line of credit, were ~~$296.1~~$390.8 million at June 30, ~~2019~~2020 compared to ~~$290.5~~$282.4 million at December 31, ~~2018.~~2019. The increase is primarily due to a ~~$0.3~~$71.4 million increase in overnight sweep checking accounts, coupled with a $44.5 million increase in callable repurchase agreements, ~~coupled with~~which were partially offset by a ~~$5.3~~$7.5 million ~~increase~~decrease in ~~overnight sweep checking accounts. At June 30, 2019, there were no outstanding~~ federal funds purchased.

Subordinated debt and junior subordinated debt were ~~$156.5~~$192.1 million at June 30, ~~2019~~2020 compared to ~~$189.8~~$199.9 million at December 31, ~~2018.~~2019. The decrease is primarily a result of the redemption of ~~$33.5~~$6.7 million in junior subordinated debt during the first six months of ~~2019,~~2020, which were assumed in the ~~FFKT~~OLBK acquisition.

~~WesBanco~~Wesbanco has a revolving line of credit, which is a senior obligation of the parent company, with another financial institution. This line of credit, which accrues interest at an adjusted LIBOR rate, provides for aggregate unsecured borrowings of up to ~~$25.0~~$30.0 million. There were no outstanding balances at either June 30, ~~2019~~2020 or December 31, ~~2018.~~2019.

~~WesBanco~~Wesbanco enters into financial instruments with off-balance sheet risk in the normal course of business to meet the financing needs of its customers. These financial instruments include commitments to extend credit, letters of credit, loans approved but not closed, overdraft limits and contingent obligations to purchase loans funded by other entities. Since many of these commitments expire unused or partially used, these commitments may not reflect future cash requirements. Please refer to Note ~~12,~~11, “Commitments and Contingent Liabilities,” of the Consolidated Financial Statements and the “Loans and Credit Risk” section of this MD&A for additional information.

The allowance for credit losses includes an allowance for unfunded loan commitments. The allowance for credit losses represents the lifetime expected losses for all loans and unfunded loan commitments at the initial recognition date. The allowance incorporates forward-looking information and applies a reversion methodology beyond the reasonable and supportable forecast. The allowance is increased by a provision charged to operating expense and reduced by charge-offs, net of recoveries, which also includes any necessary adjustments to the reserve for unfunded loan commitments, and such reserve is accounted for in other liabilities. Management evaluates the appropriateness of the allowance at least quarterly. This evaluation is inherently subjective as it requires material estimates that may be susceptible to significant change from period to period.

During the first quarter of 2020, Wesbanco extended its contract with its existing core service provider for an additional seven years, which includes upgraded and enhanced technological services. The new contract also includes additional products and services, which were previously obtained from various other third-party service providers. It is currently anticipated that such core services will begin to be converted later this year, through next summer, and that any one-time charges from various contract terminations will be accounted for as of the date of the termination of any such associated contract. In addition to upgrading and enhancing the Company’s technology, Wesbanco is undergoing a branch rationalization evaluation given the current pandemic environment as well as Wesbanco’s branch count as compared to the Company’s size. The evaluation is expected to be complete by the end of the year.

Shareholders' equity ~~increased $95.3~~decreased $24.4 million or ~~4.8%~~0.9% from ~~$2.0~~$2.6 billion at December 31, ~~2018.~~2019. The ~~increase~~decrease resulted primarily from ~~net income during~~ the ~~current six-month period~~retained earnings effect of ~~$85.2~~the CECL adoption totaling $26.6 million, the repurchase of common shares and restricted stock vesting activity totaling $25.2 million, and ~~a $42.0 million other comprehensive income gain, which was partially offset by~~ the declaration of common shareholder dividends totaling ~~$33.8~~$43.0 million, for the six months ended June 30, ~~2019. WesBanco~~2020. Such factors were partially offset by net income during the current six month period of $27.9 million and a $39.3 million other comprehensive income gain. Wesbanco also increased its quarterly dividend rate $0.01 per quarter to ~~$0.31~~$0.32 per share in February, representing a ~~6.9%~~3.2% increase over the prior quarterly rate and a cumulative ~~121%~~129% increase since 2010.

~~WesBanco~~Wesbanco purchased ~~15,755~~786,010 shares ~~during~~of its common stock on the ~~six-month period ended June 30, 2019~~open market at a total cost of $25.0 million, or $31.77 per share under the current share repurchase ~~plans. The shares were repurchased from employees for~~plans, before suspending the ~~payment~~share buyback program in early March, in an abundance of ~~withholding taxes~~caution related to ~~facilitate stock compensation transactions.~~the growing COVID-19 pandemic. At June 30, ~~2019,~~2020, the remaining shares authorized to be purchased under the current repurchase plans totaled ~~1,076,780~~1,730,283 shares.

OnIn February ~~27, 2019, WesBanco~~2020, Wesbanco granted 12,000 Total Shareholder Return Plan (“TSR”) shares for the performance period beginning January 1, ~~2019~~2020 and ending December 31, ~~2021~~2022 to certain executives. The award is determined at the end of the three-year period if the TSR of ~~WesBanco~~Wesbanco common stock is equal to or greater than the 50^th percentile of the TSR of the peer group. The number of shares to be earned by the participant shall be 200% of the grant-date award if the TSR of ~~WesBanco~~Wesbanco common stock is equal to or greater than the 75^th percentile of the TSR of the peer group. Upon achieving the market-based metric, shares determined to be earned by the participant become time-based and vest in three equal annual installments.

On May ~~15, 2019, WesBanco~~26, 2020, Wesbanco granted ~~129,850~~142,600 stock options to selected officers at an exercise price of ~~$38.93.~~$21.55. These options are service-based and vest 50% at December 31, ~~2019~~2020 and 50% at December 31, ~~2020.~~2021. On the same date, ~~WesBanco~~Wesbanco also issued ~~105,545~~169,291 shares of time-based restricted stock to selected officers and ~~16,056~~30,298 shares of performance-based restricted stock to selected officers. The time-based restricted shares are service-based and cliff-vest 36 months from the date of grant. The performance-based restricted shares have a three-year performance period, beginning on January 1, ~~2020,~~2021, based on ~~WesBanco’s~~Wesbanco’s return on average assets and return on average tangible common equity measured for each year, compared to a national ~~peer group~~set of peer financial institutions with total assets between approximately $11 billion and $25 billion. Earned performance-based restricted shares are also subject to additional service-based vesting with 50% vesting on May 15, 2023 after the completion of the three-year performance period and the final 50% vesting on May 15, 2024.institutions.

Regulatory guidelines require bank holding companies and commercial banks to maintain certain minimum capital ratios and define companies as “well capitalized” that sufficiently exceed the minimum ratios. At June 30, ~~2019,~~2020, regulatory capital levels for both the Bank and ~~WesBanco~~Wesbanco were substantially greater than the minimum amounts needed to be considered “well capitalized” under the regulations. There are various legal limitations under federal and state laws that limit the payment of dividends from the Bank to ~~WesBanco.~~Wesbanco. As of June 30, ~~2019,~~2020, under FDIC regulations, ~~WesBanco~~Wesbanco could receive, without prior regulatory approval, a dividend of approximately ~~$137.4~~$185.3 million from the Bank. ~~WesBanco~~Wesbanco expects to continue to improve its consolidated and Bank capital ratios as necessary over time, to fund organic growth and acquisitions, primarily from retaining a majority of its earnings. The tier 1 leverage ratio decreased from December 31, 2019 to June 30, 2020 due to the full impact of OLBK’s acquired assets in 2020 due to the calculations use of average assets and period end capital. The tier 1 leverage ratio was further impacted by the PPP loans originated in the second quarter of 2020.

43On March 26, 2020, regulators issued interim financial rule (“IFR”) “Regulatory Capital Rule: Revised Transition of the Current Expected Losses Methodology for Allowances” in response to the disrupted economic activity from the spread of COVID-19. The IFR provides financial institutions that adopt CECL during 2020 with the option to delay for two years the estimated impact of CECL on regulatory capital, followed by a three-year transition period to phase out the aggregate amount of the capital benefit provided by the initial two-year delay (“five year transition”). Wesbanco adopted CECL effective January 1, 2020 and elected to implement the five year transition. Regulatory capital levels without the capital benefit at June 30, 2020 for both the Bank and Wesbanco would have continued to be greater than the amounts needed to be considered “well capitalized” as the capital benefit approximated 30 to 45 basis points for three of the four regulatory ratios, while total risk-based capital would have been slightly higher without the transition.

The following table summarizes risk-based capital amounts and ratios for ~~WesBanco~~Wesbanco and the Bank for the periods indicated:

							June 30, 2019								December 31, 2018													June 30, 2020							December 31, 2019
	Minimum			Well									Minimum							Minimum		Minimum			Well								Minimum							Minimum
(unaudited, dollars in thousands)	Value ⁽¹⁾			Capitalized ⁽²⁾			Amount		Ratio				Amount ⁽¹⁾		Amount		Ratio			Amount ⁽¹⁾		Value ⁽¹⁾			Capitalized ⁽²⁾			Amount		Ratio			Amount ⁽¹⁾		Amount		Ratio			Amount ⁽¹⁾
WesBanco, Inc.
Wesbanco, Inc.
Tier 1 leverage		4.00	%		5.00	%	$	1,284,065		11.09	%		$	463,324	$	1,258,605		10.74	%	$	468,824		4.00	%		5.00	%	$	1,412,239		9.09	%	$	621,411	$	1,441,738		11.30	%	$	510,306
Common equity Tier 1		4.50	%		6.50	%		1,154,065		13.83	%			375,533		1,096,105		13.14	%		375,254		4.50	%		6.50	%		1,412,239		12.59	%		504,828		1,441,738		12.89	%		503,486
Tier 1 capital to risk-weighted assets		6.00	%		8.00	%		1,284,065		15.39	%			500,711		1,258,605		15.09	%		500,338		6.00	%		8.00	%		1,412,239		12.59	%		673,105		1,441,738		12.89	%		671,314
Total capital to risk-weighted assets		8.00	%		10.00	%		1,361,925		16.32	%			667,615		1,333,503		15.99	%		667,118		8.00	%		10.00	%		1,719,493		15.33	%		897,473		1,691,764		15.12	%		895,086
WesBanco Bank, Inc.
Wesbanco Bank, Inc.
Tier 1 leverage		4.00	%		5.00	%	$	1,152,551		9.96	%	��	$	462,642	$	1,108,600		9.48	%	$	467,939		4.00	%		5.00	%	$	1,394,913		8.99	%	$	620,795	$	1,419,968		11.12	%	$	510,591
Common equity Tier 1		4.50	%		6.50	%		1,152,551		13.73	%			377,799		1,108,600		13.30	%		375,117		4.50	%		6.50	%		1,394,913		12.30	%		510,151		1,419,968		12.74	%		501,713
Tier 1 capital to risk-weighted assets		6.00	%		8.00	%		1,152,551		13.73	%			503,732		1,108,600		13.30	%		500,156		6.00	%		8.00	%		1,394,913		12.30	%		680,201		1,419,968		12.74	%		668,951
Total capital to risk-weighted assets		8.00	%		10.00	%		1,230,411		14.66	%			671,643		1,183,498		14.20	%		666,874		8.00	%		10.00	%		1,537,168		13.56	%		906,934		1,498,494		13.44	%		891,935

Liquidity is defined as a financial institution’s capacity to meet its cash and collateral obligations at a reasonable cost. Liquidity risk is the risk that an institution’s financial condition or overall safety and soundness is adversely affected by an inability, or perceived inability, to meet its obligations. An institution’s obligations, and the funding sources to meet them, depend significantly on its business mix, balance sheet structure, and the cash flows of its on- and off-balance sheet obligations. Institutions confront various internal and external situations that can give rise to increased liquidity risk including funding mismatches, market constraints on funding sources, contingent liquidity events, changes in economic conditions, and exposure to credit, market, operation, legal and reputation risk. ~~WesBanco~~Wesbanco actively manages liquidity risk through its ability to provide adequate funds to meet changes in loan demand, unexpected outflows in deposits and other borrowings as well as to take advantage of market opportunities and meet operating cash needs. This is accomplished by maintaining liquid assets in the form of securities, sufficient borrowing capacity and a stable core deposit base. Liquidity is centrally monitored by ~~WesBanco’s~~Wesbanco’s Asset/Liability Committee (“ALCO”).

~~WesBanco~~Wesbanco determines the degree of required liquidity by the relationship of total holdings of liquid assets to the possible need for funds to meet unexpected deposit losses and/or loan demands. The ability to quickly convert assets to cash at a minimal loss is a primary function of ~~WesBanco’s~~Wesbanco’s investment portfolio management. ~~WesBanco~~Wesbanco believes its cash flow from the loan portfolio, the investment portfolio, and other sources, adequately meet its liquidity requirements. ~~WesBanco’s~~Wesbanco’s net loans to assets ratio was ~~61.5%~~65.1% at June 30, ~~2019~~2020 and deposit balances funded ~~69.6%~~72.7% of assets.

The following table lists the sources of liquidity from assets at June 30, ~~2019~~2020 expected within the next year:

(unaudited, in thousands)
Cash and cash equivalents	$	194,355	$	890,334
Securities with a maturity date within the next year and callable securities		331,709		268,511
Projected payments and prepayments on mortgage-backed securities and collateralized mortgage obligations ⁽¹⁾		287,816		516,928
Loans held for sale		18,649		53,324
Accruing loans scheduled to mature		1,029,536		1,130,562
Normal loan repayments		2,004,119		2,491,881
Total sources of liquidity expected within the next year	$	3,866,184	$	5,351,540

Deposit flows are another principal factor affecting overall ~~WesBanco~~Wesbanco liquidity. Deposits totaled ~~$8.7~~$12.2 billion at June 30, ~~2019.~~2020. Deposit flows are impacted by current interest rates, products and rates offered by ~~WesBanco~~Wesbanco versus various forms of competition, as well as customer behavior. Certificates of deposit scheduled to mature within one year totaled ~~$815.7 million~~$1.1 billion at June 30, ~~2019,~~2020, which includes jumbo regular certificates of deposit totaling ~~$381.7~~$577.9 million with a weighted-average cost of ~~1.73%~~1.45%, and jumbo CDARS^® deposits of ~~$24.3~~$61.5 million with a weighted-average cost of ~~1.63%~~1.36%.

~~WesBanco~~Wesbanco maintains a line of credit with the FHLB as an additional funding source. Available credit with the FHLB approximated ~~$2.3~~$3.4 billion and $3.2 billion at June 30, ~~2019~~2020 and December 31, ~~2018.~~2019, respectively. The FHLB requires securities to be specifically pledged to the FHLB and maintained in a FHLB-approved custodial arrangement if the member wishes to include such securities in the maximum borrowing capacity calculation. ~~WesBanco~~Wesbanco has elected not to specifically pledge to the FHLB otherwise unpledged securities. At June 30, ~~2019,~~2020, the Bank had unpledged available-for-sale securities with an amortized cost of ~~$398.2~~$230.0 million. A portion of these securities could be sold for additional liquidity, or such securities could be pledged to secure additional FHLB borrowings. Available liquidity through the sale of investment securities is currently limited, as only approximately ~~19.4%~~11.8% of the available-for-sale portfolio is unpledged, due to the pledging agreements that ~~WesBanco~~Wesbanco has with their public deposit customers. Public deposit balances have increased significantly through the ~~ESB, YCB, FTSB and FFKT acquisitions. WesBanco’s~~several acquisitions made since 2015. Wesbanco’s held-to-maturity portfolio currently contains ~~$603.9~~$564.4 million of unpledged securities. Most of these securities are tax-exempt municipal securities, which can only be pledged in limited circumstances. Except for certain limited, special circumstances, these securities cannot be sold without tainting the

remainder of the held-to-maturity portfolio. If tainting occurs, all remaining securities with the held-to-maturity designation would be required to be reclassified as available-for-sale, and the held-to-maturity designation would ~~no longer~~not be available to ~~WesBanco~~Wesbanco for some time.

~~WesBanco~~Wesbanco participates in the Federal Reserve Bank’s Borrower-in-Custody Program (“BIC”) whereby ~~WesBanco~~Wesbanco pledges certain consumer loans as collateral for borrowings. At June 30, ~~2019, WesBanco~~2020, Wesbanco had a BIC line of credit totaling ~~$185.0~~$200.6 million, none of which was outstanding. Alternative funding sources may include the utilization of existing overnight lines of credit with third party banks totaling $275.0 million, none of which was outstanding at June 30, ~~2019,~~2020, along with seeking other lines of credit, borrowings under repurchase agreement lines, increasing deposit rates to attract additional funds, accessing brokered deposits, or selling securities available-for-sale or certain types of loans.

Other short-term borrowings of ~~$296.1~~$390.8 million at June 30, ~~2019~~2020 consisted of callable repurchase agreements and overnight sweep checking accounts for large commercial customers. Other short-term borrowings may also include federal funds purchased. There has ~~not~~ been ~~a significant fluctuation~~an increase of $23.2 million in the average deposit balances of ~~the~~ overnight sweep checking accounts during the first six months of ~~2019.~~2020, primarily from the OLBK acquisition. The overnight sweep checking accounts require U.S. Government securities to be pledged equal to or greater than the average deposit balance in the related customer accounts.

The principal sources of parent company liquidity are dividends from the Bank, ~~$106.6~~$157.3 million in cash and investments on hand, and a ~~$25.0~~$30.0 million revolving line of credit with another bank, which did not have an outstanding balance at June 30, ~~2019. WesBanco~~2020. Wesbanco is in compliance with all applicable loan covenants. There are various legal limitations under federal and state laws that limit the payment of dividends from the Bank to the parent company. As of June 30, ~~2019,~~2020, under FDIC and State of West Virginia regulations, ~~WesBanco~~Wesbanco could receive, without prior regulatory approval, dividends of approximately ~~$137.4~~$185.3 million from the Bank. Management believes these are appropriate levels of cash for the parent company given the current environment. Management continuously monitors the adequacy of parent company cash levels and sources of liquidity through the use of metrics that relate current cash levels to historical and forecasted cash inflows and outflows.

~~WesBanco~~Wesbanco had outstanding commitments to extend credit in the ordinary course of business approximating ~~$2.5~~$3.1 billion and $3.3 billion at June 30, ~~2019~~2020 and December 31, ~~2018.~~2019, respectively. On a historical basis, only a portion of these commitments will result in an outflow of funds. Please refer to Note ~~12,~~11, “Commitments and Contingent ~~Liabilities,”~~Liabilities” of the Consolidated Financial Statements and the “Loans and Credit Risk” section of this MD&A for additional information.

Federal financial regulatory agencies previously issued guidance in 2009 to provide for sound practices for managing funding and liquidity risk and strengthening liquidity risk management practices. ~~WesBanco~~Wesbanco maintains a comprehensive management process for identifying, measuring, monitoring, and controlling liquidity risk, which is fully integrated into its risk management process. Management believes ~~WesBanco~~Wesbanco has sufficient current liquidity to meet current obligations to borrowers, depositors and others and that ~~WesBanco’s~~Wesbanco’s current liquidity risk management policies and procedures, as periodically reviewed and adjusted, adequately address this guidance.

The disclosures set forth in this item are qualified by the section captioned “Forward-Looking Statements” included in Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations of this report.

The primary objective of ~~WesBanco��s~~Wesbanco’s Asset/Liability Committee (“ALCO”) is to maximize net interest income within established policy parameters. This objective is accomplished through the management of balance sheet composition, market risk exposures arising from changing economic conditions and liquidity risk.

Market risk is defined as the risk of loss due to adverse changes in the fair value of financial instruments resulting from fluctuations in interest rates and bond prices. Management considers interest rate risk to be ~~WesBanco’s~~Wesbanco’s most significant market risk. Interest rate risk is the exposure to adverse changes in net interest income due to changes in interest rates. The ~~relative~~ consistency of ~~WesBanco’s~~Wesbanco’s net interest income is largely dependent on effective management of interest rate risk. As interest rates change in the market, rates earned on interest rate-sensitive assets and rates paid on interest rate-sensitive liabilities do not necessarily move concurrently. Differing rate sensitivities may arise because fixed rate assets and liabilities may not have the same maturities, or because variable rate assets and liabilities differ in the timing and/or the percentage of rate changes.

~~WesBanco’s~~Wesbanco’s ALCO is ~~a Board-level~~an executive management committee with ~~both~~ Board ~~and executive management representation. It is~~representation, responsible for monitoring and managing interest rate risk within ~~Board-approved~~approved policy limits, utilizing earnings sensitivity simulation and ~~shareholders’ equity~~ economic value-at-risk models. These models are highly dependent on various assumptions, which change regularly as the balance sheet and market interest rates change. The key assumptions and strategies employed are analyzed, reviewed and documented at least quarterly by the ALCO.

The earnings sensitivity simulation model projects changes in net interest income resulting from the ~~effect~~effects of changes in interest rates. Forecasting changes in net interest income requires management to make certain assumptions regarding loan and security prepayment rates, call dates, changes to deposit product betas and non-maturity deposit decay rates, which may not necessarily reflect the manner in which actual cash flows, yields, and costs respond to changes in market interest rates. Assumptions are based on historical experience, current market rates and economic forecasts, and are internally back-tested and periodically reviewed by a third-party consultant. The net interest income sensitivity results presented in Table 1, “Net Interest Income Sensitivity,” assumes that the balance sheet composition of interest sensitive assets and liabilities existing at the end of the period remains constant over the period being measured and also assumes that a particular change in interest rates is reflected uniformly across the yield curve, regardless of the duration of the maturity or re-pricing of specific assets and liabilities. Since the assumptions used in the model relative to changes in interest rates are uncertain, the simulation analysis may not be indicative of actual results. In addition, this analysis does not consider actions that management might employ in response to changes in interest rates, as well as changes in earning asset and costing liability balances.

Management is aware of the significant effect that inflation or deflation has upon interest rates and ultimately upon financial performance. WesBanco’s ability to cope with inflation or deflation is best determined by analyzing its capability to respond to changing market interest rates, as well as its ability to manage the various elements of non-interest income and expense during periods of increasing or decreasing inflation or deflation. WesBanco monitors the level and mix of interest-rate sensitive assets and liabilities through ALCO in order to reduce the impact of inflation or deflation on net interest income. Management also controls the effects of inflation or deflation by conducting periodic reviews of the prices, costs and terms of its various products and services, as well as competitive factors by approving new products and services or adjusting the availability of existing products and services.

Interest rate risk policy limits are determined by measuring the anticipated change in net interest income over a twelve-month period, assuming immediate and sustained market interest rate increases and decreases of 100 - ~~400~~300 basis points across the entire yield curve, as compared to a stable rate environment or base model. ~~WesBanco’s~~Wesbanco’s current policy limits this exposure for the noted interest rate changes to a reduction of between 10% - ~~20%~~15%, or less, of net interest income from the stable rate base model over a twelve-month period. The table below ~~shows WesBanco’s~~indicates Wesbanco’s interest rate sensitivity at June 30, ~~2019~~2020 and December 31, ~~2018,~~2019, assuming the above-noted interest rate increases, as compared to a base model. In the current interest rate environment, particularly for short-term rates, the 100 – 300 ~~- 400~~ basis ~~point~~points decreasing changes for ~~both years~~June 30, 2020 and the 200 – 300 basis points decreasing changes for December 31, 2019 are not shown due to the unrealistic nature of ~~results associated with short-term negative rates.~~the results.

Immediate Change in	Percentage Change in			Percentage Change in
Interest Rates	Net Interest Income from Base over One Year		ALCO	Net Interest Income from Base over One Year		ALCO
(basis points)	June 30, 2019	December 31, 2018	Guidelines	June 30, 2020	December 31, 2019	Guidelines
+400	11.5%	7.6%	(20.0%)
+300	8.9%	6.4%	(15.0%)	10.5%	5.6%	(15.0%)
+200	6.1%	3.9%	(12.5%)	7.4%	3.9%	(12.5%)
+100	3.2%	2.1%	(10.0%)	4.1%	2.2%	(10.0%)
-100	(2.5%)	(2.1%)	(10.0%)	N/A	(4.2%)	(10.0%)
-200	(8.2%)	(5.8%)	(12.5%)

As per the table above, the earnings sensitivity simulation model at June 30, 2019 currently projects that net interest income for the next twelve-month period would decrease by 2.5% - 8.2% if interest rates wereAdjustments to fall immediately by 100 - 200 basis points, compared to a decrease of 2.1% - 5.8% as of December 31, 2018. For rising rate scenarios, net interest income would increase by between 3.2% - 11.5% if rates were to increase by between 100 - 400 basis points as of June 30, 2019, compared to increases of between 2.1% - 7.6% as of December 31, 2018. The higher asset sensitivity isrelative sensitivities are due to the impact of the current lower rate and yield curve environment on base case net interest income and the related calculation of parallel rate shock changes in rising and falling rate scenarios. Additional differences typically result from changes in the various earning assets and costing liabilities mix and growth rates, as well as adjustments for various modeling assumptions. Generally, deposit betas utilized in modeling are estimated at more conservative percentages for both up and down rate scenarios than has been the Bank’s historical experience, as a result of both competitive factors in our markets and as public funds and institutional contract terms are renewed. Deposit betas, decay rates and loan prepayment speeds are adjusted periodically in our models for non-maturity deposits and loans. Indicated model asset sensitivity in rising rate scenarios may be less than anticipated due to slower prepayment speeds, rate floors, below forecast loan yields, spread compression between new asset yields and funding costs, mortgage-related extension risk and other factors. In a decreasing rate environment, asset sensitivity may have greater impact on the margin than currently modeled as prepayment speeds increase, customers refinance or request rate reductions on existing loans, estimated deposit betas do not perform as modeled, or for other reasons.

In addition to the aforementioned parallel rate shock earnings sensitivity simulation model, the ALCO also reviews a “dynamic” forecast scenario to project net interest income over a rolling two-year time period. This forecast is updated at least quarterly, incorporating revisions and updated assumptions into the model for estimated loan and deposit growth, expected balance sheet re-mixing strategies, changes in forecasted rates for various maturities, competitive market spreads for various products and other assumptions. Such modeling is directionally consistent with typical parallel rate shock scenarios, and it assists in predicting changes in forecasted outcomes and potential adjustments to ~~the plan~~management plans to assist in achieving earnings goals.

The balance sheet shows somewhat higher asset sensitivity as of June 30, 2019, as compared to December 31, 2018, with differences resulting from changes in the mix of, and growth in, various earning assets and costing liabilities, as well as adjustments for various modeling assumptions such as deposit beta rates, decay rates for non-maturity deposits and loan prepayment speeds. Generally, deposit betas utilized in the parallel rate shock and “dynamic” models are estimated at a higher percentage for potential rate increase scenarios than has been the Bank’s experience to date through nine federal funds rate increases over the past three and a half years for competitive factors in our market areas and as public funds and institutional contract terms are renewed. The total deposit beta for interest-bearing transaction accounts, other than certificates of deposit, was 34% or 17 basis points for the trailing twelve months. Deposit decay rates and loan prepayment speeds are adjusted periodically for loans and non-maturity deposit products. Asset sensitivity in rising rate scenarios may be less than anticipated due to slower prepayment speeds, rate floors, below forecast loan yields, spread compression between new asset yields and funding costs, mortgage-related extension risk and other factors. Commercial loans with floors currently average 4.26% on approximately $1.5 billion or 28% of total commercial loans at June 30, 2019, as compared to $1.5 billion averaging 4.27% or 29% of commercial loans at December 31, 2018. Approximately 36% or $517.5 million of these loans are currently priced at their floor, as compared to 38% or $570.5 million at December 31, 2018. These loans typically do not adjust as rapidly from their current floor level as compared to loans without floors, due to the amount of the rate change as compared to the floor rate, or for reasons related to next repricing dates.

~~WesBanco~~Wesbanco also periodically measures the economic value of equity (“EVE”), which is defined as the market value of tangible equity in various rate scenarios. Generally, changes in the economic value of equity relate to changes in various assets and liabilities, changes in the yield curve, as well as changes in loan prepayment speeds and deposit decay rates. The following table presents these results and ~~WesBanco’s~~Wesbanco’s policy limits as of June 30, ~~2019~~2020 and December 31, ~~2018, with the change~~2019. Changes in EVE sensitivity since year-end ~~related~~2019 relate to the significant ~~changes~~decrease in market interest rates, particularly in the latter half of the first quarter of 2020, and their impact upon the fair values of earning assets and costing liabilities:

Immediate Change in	Percentage Change in			Percentage Change in
Interest Rates	Economic Value of Equity from Base over One Year		ALCO	Economic Value of Equity from Base over One Year		ALCO
(basis points)	June 30, 2019	December 31, 2018	Guidelines	June 30, 2020	December 31, 2019	Guidelines
+400	(4.9%)	(17.2%)	(40.0%)
+300	(3.2%)	(12.6%)	(30.0%)	11.2%	2.6%	(30.0%)
+200	(1.5%)	(10.8%)	(20.0%)	10.4%	3.4%	(20.0%)
+100	0.3%	(4.8%)	(10.0%)	7.9%	4.1%	(10.0%)
-100	(1.9%)	2.7%	(10.0%)	N/A	(5.4%)	(10.0%)
-200	(6.8%)	2.3%	(20.0%)

The net interest margin increased 27 basis points for the first six months of 2019 to 3.68% as compared to the same period last year and 24 basis points for the second quarter to 3.67% compared to last year, while it was one basis point below the first quarter’s net interest margin of 3.68%. The increase from last year’s first half and second quarter was primarily due to increased short-term rates, higher non-interest bearing deposits, lower than projected deposit betas and the contribution from FFKT’s higher margin assets post-acquisition, plus higher purchase accounting from both 2018 acquisitions. The core net interest margin, net of purchase accounting-related accretion, was 3.49% for both the three and six month periods as compared to 3.31% last year. It was also consistent with the first quarter’s 3.49%. Currently, the federal funds market is anticipating that the Federal Reserve Board may decrease short-term rates by 25 basis points at least two times prior to year-end, which if such interest rate scenario occurs, would result in lower net interest income and margin, as the Company remains asset sensitive, suggesting that earning assets repricing downward may occur at a faster pace than reductions in deposit or borrowing rates. The current flat-to-inverted yield curve environment has reduced our base case assumption about net interest income and margin for the balance of the year as compared to expectations at year-end, which anticipated a continuing rising rate environment and a higher core margin. It is currently expected that the core net interest margin will slightly decline by a few basis points over the remainder of the year, excluding purchase accounting. On a total basis including purchase accounting accretion, the margin may decline slightly more as such accretion diminishes over the back half of the year by an additional one to two basis points per quarter from its current mid-teens basis points level. Management’s modeling currently includes two 25 basis point decreases in the federal funds rate over the remainder of the year, which is relatively consistent with consensus economist expectations. The shape of the yield curve, changes to deposit betas or rates beyond current modeling assumptions as well as an inability to lower deposit rates in a declining rate scenario, or adjustments to the mix of earning assets and costing liabilities, may have a negative impact on management’s estimates of the future direction and level of the net interest margin.

Certificates of deposit totaling approximately $815.7 million mature within the next year at an average cost of 1.23%; replacement borrowings are currently more expensive than the average runoff rate of these certificates of deposit. Also, maturing borrowings’ replacement rates are generally higher than the cost of the maturing borrowings’ average rate, and management may elect to lengthen the maturing borrowings’ terms at a higher cost for liquidity and asset/liability management purposes. Transaction account growth helps to control such factors and limit overall deposit costs.

The Bank has significant additional borrowing capacity with the FHLB of Pittsburgh, the Federal Reserve Bank of Cleveland and various correspondent banks, and may utilize these funding sources or interest rate swap strategies as necessary to lengthen liabilities, offset mismatches in various asset maturities and manage liquidity. CDARS® and ICS® deposits also may be utilized for similar purposes for certain customers seeking higher-yielding instruments or maintaining deposit levels below FDIC insurance limits. Significant balance sheet strategies to assist in managing the net interest margin in the current interest rate environment include:

Management is aware of the significant effect that inflation or deflation has upon interest rates and ultimately upon financial performance. Wesbanco’s ability to cope with inflation or deflation is best determined by analyzing its capability to respond to changing market interest rates, as well as its ability to manage the various elements of non-interest income and expense during periods of increasing or decreasing inflation or deflation. Wesbanco monitors the level and mix of interest-rate sensitive assets and liabilities through ALCO in order to reduce the impact of inflation or deflation on net interest income. Management also controls the effects of inflation or deflation by conducting periodic reviews of the prices, costs and terms of its various products and services, as well as competitive factors, by approving new products and services or adjusting the terms and availability of existing products and services.

In anticipation of the potential discontinuance of the London Interbank Offered Rate (LIBOR) at the end of 2021, Wesbanco has created a LIBOR transition committee, which has broken the Company’s transition efforts into two phases. The first phase included adding additional language to new loans that allows Wesbanco to replace LIBOR with an equivalent rate index and adjust the margin to ensure the resulting interest rate is the same as it previously was using LIBOR. Also included in the first phase was Wesbanco transitioning from the LIBOR swap curve to treasury rates when repricing certain loans and originating new loans. The second phase is transitioning current variable loans tied to LIBOR or on a LIBOR swap curve. Wesbanco is tracking the dollar amount and number of loans tied to LIBOR or the LIBOR swap curve, monitoring current industry trends, and engaging its legal counsel to ensure the smooth transition away from LIBOR.

EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES— ~~WesBanco’s~~Wesbanco’s Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”) have concluded that ~~WesBanco’s~~Wesbanco’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended), based on their evaluation of these controls and procedures as of the end of the period covered by this Form 10-Q, are effective to ensure that information required to be disclosed by ~~WesBanco~~Wesbanco in the reports it files under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC and that such information is accumulated and communicated to ~~WesBanco’s~~Wesbanco’s management, including its principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure.

LIMITATIONS ON THE EFFECTIVENESS OF CONTROLS— ~~WesBanco’s~~Wesbanco’s management, including the CEO and CFO, does not expect that ~~WesBanco’s~~Wesbanco’s disclosure controls and internal controls will prevent all errors and all fraud. While ~~WesBanco’s~~Wesbanco’s disclosure controls and procedures are designed to provide reasonable assurance of achieving their objective, no control system, no matter how well conceived and operated, can provide absolute assurance that the objectives of the control system are met. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the controls.

CHANGES IN INTERNAL CONTROLS—There were no changes in ~~WesBanco’s~~Wesbanco’s internal control over financial reporting that occurred during our fiscal quarter ended June 30, ~~2019~~2020 as required to be reported by paragraph (d) of Rules 13a-15 and 15d-15 under the Securities Exchange Act of 1934, that materially affected, or are reasonably likely to materially affect, ~~WesBanco’s~~Wesbanco’s internal control over financial reporting.

~~WesBanco~~Wesbanco is involved in various lawsuits, claims, investigations and proceedings, which arise in the ordinary course of business. While any litigation contains an element of uncertainty, ~~WesBanco~~Wesbanco does not believe that a material loss related to such proceedings or claims pending or known to be threatened is reasonably possible.

In light of recent developments relating to COVID-19, and as previously disclosed in its Quarterly Report on Form 10-Q filed with the SEC on May 8, 2020, Wesbanco is supplementing its risk factors contained in Item 1A of its Annual Report on Form 10-K for the year ended December 31, 2019, as filed with the Securities and Exchange Commission on February 28, 2020 (“Annual Report”). The following risk factors should be read in conjunction with the risk factors contained in our Annual Report on Form 10-K. Any of the risks described in our Annual Report on Form 10-K, as well as any of the risks described below, could materially adversely affect our business, financial condition and results of operations. Additional risks and uncertainties that are not presently known to us or that we deem immaterial may also adversely impact our business or financial results. Moreover, the effects of the COVID-19 pandemic may heighten many of the other risk factors in our Annual Report and any subsequent Quarterly Report on Form 10-Q or Current Report on Form 8-K including, but not limited to, risks of credit deterioration, interest rate changes, rating agency actions, governmental actions, market volatility, theft, fraud, security breaches and technology interruptions. Except as set forth below, there are no material changes related to risk factors from the risk factors described in Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2019.

The COVID-19 pandemic is adversely affecting THE OPERATIONS OF us and our customers.

The spread of COVID-19 has created a global public-health crisis that has resulted in widespread volatility and deteriorations in household, business, economic, and market conditions. This pandemic has caused many state governments to enact “shelter in place” orders and the institution of social distancing requirements, which have adversely impacted the economy due to the vast restrictions and forced closures of non-essential businesses during the quarantine period. As a result, many of our customers have been adversely affected by business closures. Accordingly, COVID-19 may result in a significant decrease in our customer’ business and/or cause our customers to be unable to meet existing payment or other obligations to us. These adverse impacts on the businesses of our customers could cause a material adverse effect to our business, financial condition, and results of operations.

NEGATIVE ECONOMIC FACTORS MAY ADVERSELY AFFECT WESBANCO’S FINANCIAL PERFORMANCE.

Negative economic conditions in our markets may adversely affect Wesbanco’s financial performance. Current shelter-in-place orders in many of Wesbanco’s markets of West Virginia, Ohio, western Pennsylvania, Kentucky, southern Indiana and Maryland, will result in negative economic factors depending on the length of such government restrictions. Negative changes in economic and financial market conditions could result in additional deceases in market value of financial instruments, impairment of goodwill and intangible assets and decreases in interest income. A rise in unemployment from the forced closures of non-essential businesses, could have a negative impact on our customers’ ability to repay their loans as well as a decrease in the customer deposit base as they use their savings to pay current expenses. This could result in increased risk of delinquencies, defaults, foreclosures and losses on our loans, negatively impact regional economic conditions, result in a decline in local loan demand, loan originations and deposit availability. Any one or more of these developments could have a material adverse effect on our business, financial condition and results of operations.

Additionally, the COVID-19 pandemic has significantly affected the financial markets and has resulted in a number of Federal Reserve actions. Market interest rates have declined significantly. On March 3, 2020, the 10-year Treasury yield fell below 1.00% for the first time, and the Federal Reserve reduced the target federal funds rate by 50 basis points to 1.00% to 1.25%. On March 15, 2020, the Federal Reserve further reduced the target federal funds rate by 100 basis points to 0.00% to 0.25% and announced a $700 billion quantitative easing program in response to the expected economic downturn caused by the COVID-19 pandemic. The Federal Reserve reduced the interest that it pays on excess reserves from 1.60% to 1.10% on March 3, 2020, and then to 0.10% on March 15, 2020. We expect that these reductions in interest rates, especially if prolonged, could adversely affect our net interest income and margins and our profitability.

MARKET VOLATILITY AND PROLONGED PERIODS OF ECONOMIC STRESS MAY AFFECT WESBANCO’S CAPITAL AND LIQUIDITY.

The COVID-19 pandemic has caused volatility in financial markets and could potentially cause prolonged periods of economic stress. This may result in decreased capital and liquidity. In addition to the potential affects from negative economic conditions noted above, Wesbanco instituted a program to help COVID-19 impacted customers. This program allows a 90 day deferral of loan principal and/or interest payments as long as the customer meets certain requirements. Depending on how many customer apply for this program, Wesbanco’s liquidity could be negatively impacted if a significant number of customers apply and are approved for the deferral of payments. In addition, if these deferrals are not effective in mitigating the effect of COVID-19 on our customers, it may adversely affect our business and results of operations more substantially over a longer period of time. If the economic situation deteriorates, federal and state regulators may also consider taking actions such as suspension of dividends and other capital distributions in order to conserve capital and retain capacity, any of which could adversely impact our business.

The extent to which the COVID-19 pandemic impacts our business, financial condition and results of operation, as well as our regulatory capital and liquidity ratios, will depend on future developments, which are highly uncertain and cannot be predicted, including the scope and duration of the pandemic and the efficacy of actions taken by governmental authorities and other third parties in response to the pandemic.

As of June 30, ~~2019, WesBanco~~2020, Wesbanco had two active ~~one million share~~ stock repurchase plans. The first active plan was ~~originally~~ approved by the Board of Directors on ~~March 21, 2007~~approved October 22, 2015 for 1.0 million shares, and the second ~~which is incremental to the first,~~active plan was approved ~~October 22, 2015.~~by the Board of Directors on December 19, 2019 for 1.7 million shares. Each provides for shares to be repurchased for general corporate purposes, which may include a subsequent resource for potential acquisitions, shareholder dividend reinvestment and employee benefit plans. The timing, price and quantity of purchases are at the discretion of ~~WesBanco,~~Wesbanco, and the plan may be discontinued or suspended at any time.

Repurchases in the first quarter included open market purchases and those for the KSOP and dividend reinvestment plans. Wesbanco has suspended continuing open market purchases while it assesses the economic impact of the pandemic.

The following table presents the monthly share purchase activity during the quarter ended June 30, ~~2019:~~2020:

Period	Total Number of Shares Purchased		Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans		Maximum Number of Shares that May Yet Be Purchased Under the Plans		Total Number of Shares Purchased		Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans		Maximum Number of Shares that May Yet Be Purchased Under the Plans
Balance at March 31, 2019								1,092,535
Balance at March 31, 2020																1,730,283

April 1, 2019 to April 30, 2019
April 1, 2020 to April 30, 2020
Open market repurchases		—		—		—		1,092,535		—	$	—		—		1,730,283
Other transactions (1)		20,455	$	41.08	N/A		N/A			44,510		23.14	N/A		N/A

May 1, 2019 to May 31, 2019
Open market repurchases		—		—		—		1,092,535
Other transactions (1)		1,559	$	39.15	N/A		N/A

June 1, 2019 to June 30, 2019
May 1, 2020 to May 31, 2020
Open market repurchases		—		—		—		1,092,535		—	$	—		—		1,730,283
Other repurchases (2)		15,755	$	37.42		15,755		1,076,780		22,632		18.35		22,632		1,707,651
Other transactions (1)		4,336		36.82	N/A		N/A			23,481		20.62	N/A		N/A
Second Quarter 2019

June 1, 2020 to June 30, 2020
Open market repurchases										—	$	—		—		1,707,651
Other transactions (1)										5,769		21.17	N/A		N/A
Second Quarter 2020
Open market repurchases		—		—		—		1,092,535		—	$	—		—		1,730,283
Other repurchases (2)		15,755	$	37.42		15,755		1,076,780		22,632		18.35		22,632		1,707,651
Other transactions (1)		26,350		40.27	N/A		N/A			73,760		22.18	N/A		N/A
Total		42,105	$	39.20		15,755		1,076,780		96,392	$	—		22,632		1,707,651

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

~~WEST VIRGINIA~~West Virginia		55-0571723
(State of incorporation)		(IRS Employer Identification No.)

1 Bank Plaza, Wheeling, WV		26003
(Address of principal executive offices)		(Zip Code)

Title of each class	Trading Symbol	Name of each exchange on which registered
Common Stock $2.0833 Par Value	WSBC	NASDAQ Global Select Market

(unaudited, in thousands)	Amortized Cost		Fair Value
Available-for-sale debt securities
Less than one year	$	47,697	$	47,753
1-5 years		132,194		138,577
5-10 years		314,985		331,227
Over 10 years		1,504,515		1,556,392
Total available-for-sale debt securities	$	1,999,391	$	2,073,949
Held-to-maturity debt securities
Less than one year	$	12,286	$	12,371
1-5 years		120,597		126,763
5-10 years		281,742		294,293
Over 10 years		351,791		369,239
Total held-to-maturity debt securities	$	766,416	$	802,666
Total debt securities	$	2,765,807	$	2,876,615

	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

Large accelerated filer	☑	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☐

	June 30, 2019
(unaudited, in thousands)	One Year or less		One to Five Years		Five to Ten Years		After Ten Years		Mortgage- backed securities		Total
Available-for-sale debt securities
U.S. Treasury	$	29,781	$	—	$	—	$	—	$	—	$	29,781
U.S. Government sponsored entities and agencies		498		6,048		18,472		9,363		100,206		134,587
Residential mortgage-backed securities and collateralized mortgage obligations of government sponsored entities and agencies (1)		—		—		—		—		1,563,042		1,563,042
Commercial mortgage-backed securities and collateralized mortgage obligations of government sponsored entities and agencies (1)		—		—		—		—		178,656		178,656
Obligations of states and political subdivisions		8,108		53,422		76,671		44,977		—		183,178
Corporate debt securities		627		32,216		7,197		—		—		40,040
Total available-for-sale debt securities	$	39,014	$	91,686	$	102,340	$	54,340	$	1,841,904	$	2,129,284
Held-to-maturity debt securities (2)
U.S. Government sponsored entities and agencies	$	—	$	—	$	—	$	—	$	9,952	$	9,952
Residential mortgage-backed securities and collateralized mortgage obligations of government sponsored entities and agencies (1)		—		—		—		—		137,121		137,121
Obligations of states and political subdivisions		15,652		115,724		334,357		274,016		—		739,749
Corporate debt securities		—		10,913		23,799		—		—		34,712
Total held-to-maturity debt securities	$	15,652	$	126,637	$	358,156	$	274,016	$	147,073	$	921,534
Total debt securities	$	54,666	$	218,323	$	460,496	$	328,356	$	1,988,977	$	3,050,818

	Allowance for Credit Losses By Category
	For the Six Months Ended June 30, 2020
			Residential mortgage
			-backed
			securities and
			collateralized
			mortgage obligations		Obligations of
	U.S. Government		of government		state and		Corporate
	sponsored		sponsored entities		political		debt
(unaudited, in thousands)	entities and agencies		and agencies		subdivisions		Securities		Total
Beginning balance at January 1, 2020	$	—	$	—	$	96	$	133	$	229
Current period provision		—		—		521		67		588
Write-offs		—		—		—		—		—
Recoveries		—		—		—		—		—
Ending balance at June 30, 2020	$	—	$	—	$	617	$	200	$	817

	TDRs
	June 30, 2019						December 31, 2018
(unaudited, in thousands)	Accruing		Non-Accrual		Total		Accruing		Non-Accrual		Total
Commercial real estate:
Land and construction	$	—	$	—	$	—	$	—	$	—	$	—
Improved property		743		558		1,301		880		1,529		2,409
Total commercial real estate		743		558		1,301		880		1,529		2,409
Commercial and industrial		192		—		192		168		169		337
Residential real estate		4,005		917		4,922		4,185		921		5,106
Home equity		486		436		922		426		198		624
Consumer		61		13		74		85		38		123
Total	$	5,487	$	1,924	$	7,411	$	5,744	$	2,855	$	8,599

Year	Amount
2020	$	755
2021		2,444
2022		1,713
2023		2,227
2024 and thereafter		17,686
Total lease payments	$	24,825
Less: Interest		(3,621	)
Present value of lease liabilities	$	21,204

Details about Accumulated Other Comprehensive Income/(Loss) Components	For the Three Months Ended June 30,						For the Six Months Ended June 30,						Affected Line Item in the Statement of Net Income
(unaudited, in thousands)	2019			2018			2019			2018
Debt securities available-for-sale ⁽¹⁾:
Net securities losses (gains) reclassified into earnings	$	4		$	—		$	(38	)	$	—		Net securities gains (Non-interest income)
Related income tax (benefit) expense		(1	)		—			8			—		Provision for income taxes
Net effect on accumulated other comprehensive income for the period		3			—			(30	)		—

Debt securities held-to-maturity ⁽¹⁾:
Amortization of unrealized gain transferred from available-for-sale		(94	)		(66	)		(149	)		(131	)	Interest and dividends on securities (Interest and dividend income)
Related income tax expense		21			15			38			31		Provision for income taxes
Net effect on accumulated other comprehensive income for the period		(73	)		(51	)		(111	)		(100	)

Defined benefit plans ⁽²⁾:
Amortization of net loss and prior service costs		758			764			1,509			1,520		Employee benefits (Non-interest expense)
Related income tax benefit		(173	)		(175	)		(380	)		(494	)	Provision for income taxes
Net effect on accumulated other comprehensive income for the period		585			589			1,129			1,026
Total reclassifications for the period	$	515		$	538		$	988		$	926

	June 30, 2020
	Three Months Principal & Interest Plus Three Months Principal Only Deferral		Three Months Interest Only Deferral		Three Months Principal & Interest Deferral		Three Months Principal Only Deferral
(unaudited, in thousands)	Loan Balance		Loan Balance		Loan Balance		Loan Balance		Total Loan Balance
Agriculture and farming	$	—	$	55	$	591	$	—	$	646
Energy		—		804		5,632		329		6,765
Construction		—		12,446		10,380		9,306		32,132
Manufacturing		460		977		13,310		11,699		26,446
Wholesale and distribution		—		791		4,726		38,381		43,898
Retail		8,545		5,882		35,188		7,446		57,061
Transportation and warehousing		496		466		15,241		8,295		24,498
Information and communications		—		485		3,256		2,259		6,000
Finance and insurance		—		69		1,100		—		1,169
Equipment leasing		—		165		6,960		1,424		8,549
Real estate - 1-4 family		29,541		3,253		48,521		4,899		86,214
Real estate - multi-family		6,740		25,016		42,591		15,181		89,528
Real estate - other retail		25,437		8,584		58,277		21,992		114,290
Real estate - shopping center		38,395		18,747		39,340		25,136		121,618
Real estate - office building		22,947		—		45,867		12,196		81,010
Real estate - commercial/manufacturing		30,387		—		60,748		20,555		111,690
Real estate - residential buildings		3,402		1,081		25,780		4,623		34,886
Real estate - other		32,334		10,405		49,835		24,665		117,239
Services		9,643		2,232		26,342		42,039		80,256
Schools and education services		—		—		1,539		748		2,287
Healthcare		835		5,600		41,367		63,225		111,027
Entertainment and recreation		9,600		84		26,485		2,625		38,794
Hotels		344,158		13,278		77,238		26,560		461,234
Other accommodations		22,272		—		8,020		—		30,292
Restaurants		4,351		1,766		57,251		6,678		70,046
Religious organizations		130		34		26,291		3,044		29,499
Government		883		—		435		—		1,318
Unclassified		353		—		1,638		1,025		3,016
Total modified commercial loans	$	590,909	$	112,220	$	733,949	$	354,330	$	1,791,408

~~2.1~~		Agreement and Plan of Merger, dated as of July 23, 2019, by and between WesBanco, Inc., WesBanco Bank, Inc., Old Line Bancshares, Inc. and Old Line Bank, Inc. (incorporated by reference to Exhibit 2.1 to the Form 8-K filed by the registrant with the Securities and Exchange Commission on July 23, 2019).

31.1		Certification of Chief Executive Officer of Periodic Report Pursuant to Rule 13a-15(e) or Rule 15d-15(e).

31.2		Certification of Chief Financial Officer of Periodic Report Pursuant to Rule 13a-15(e) or Rule 15d-15(e).

32.1		Certification Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

~~101~~101.INS		~~The following materials from WesBanco’s Quarterly Report on Form 10-Q for~~Inline XBRL Instance Document (the instance document does not appear in the ~~quarter ended June 30, 2019, formatted~~Interactive Data File because its XBRL tags are embedded within the Inline XBRL document).

101.SCH		Inline XBRL Taxonomy Extension Schema Document

101.CAL		Inline XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF		Inline XBRL Taxonomy Extension Definition Linkbase Document

101.LAB		Inline XBRL Taxonomy Extension Label Linkbase Document

101.PRE		Inline XBRL Taxonomy Extension Presentation Linkbase Document

104		Cover Page Interactive Data File (formatted as inline XBRL and contained in iXBRL (Inline Extensible Business Reporting Language): (i) the Consolidated Balance Sheets at June 30, 2019 and December 31, 2018, (ii) the Consolidated Statements of Comprehensive Income for the three and six months ended June 30, 2019 and 2018, (iii) the Consolidated Statements of Changes in Stockholders’ Equity for the three and six months ended June 30, 2019 and 2018, (iv) the Consolidated Statements of Cash Flows for the six months ended June 30, 2019 and 2018, and (v) the Notes to Consolidated Financial Statements.Exhibit 101).

	WESBANCO, INC.

Date: July ~~31, 2019~~29, 2020	/s/ Todd F. Clossin
	Todd F. Clossin
	President and Chief Executive Officer (Principal Executive Officer)

Date: July ~~31, 2019~~29, 2020	/s/ Robert H. Young
	Robert H. Young
	Senior Executive Vice President and Chief Financial Officer
	(Principal Financial and Accounting Officer)