Company: WSBC
Filing Date: 2025-03-03
Form Type: 10-K
Source: 0000950170-25-030795
Chunk: 95

Company: WESBANCO INC
Filing Date: 2025-03-03
Form: 10-K
Item: Item 8
Chunk 95
---
 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 previously elected the fair value 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 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 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 sheets with any resulting gain or loss recorded in current period earnings within net swap fee and valuation income.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 sheets