WSBC » Topics » PROVISION FOR LOAN LOSSES

These excerpts taken from the WSBC 10-K filed Mar 11, 2009.

PROVISION FOR LOAN LOSSES

The provision for loan losses is determined by management as the amount to be added to the allowance for loan losses after net charge-offs have been deducted to bring the allowance to a level considered appropriate to absorb probable losses in the loan portfolio. The provision for loan losses for the year ended December 31, 2008 increased $24.3 million or 293% to $32.5 million compared to $8.3 million for the year ended December 31, 2007. This increase in the provision for loan losses reflects both increased uncertainty in loan performance and changing economic conditions adversely impacting WesBanco markets which have caused net charge-offs, loan delinquencies and non-performing loans to increase. Economic conditions generally worsened throughout the year and were exacerbated in the fourth quarter of 2008 by a sharp increase in unemployment, and declining real estate values, particularly in the Ohio metropolitan markets of Columbus, Dayton and Cincinnati. As a result, net charge-offs for 2008 increased 100% to 0.56% of average total loans compared to 0.28% for 2007 (see Allowance for Loan Losses section of this MD&A). The provision for 2008 exceeded net charge-offs by approximately $11.3 million and increased the allowance for loan losses to 1.38% of total loans at December 31, 2008 compared to 1.03% at December 31, 2007.

 

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PROVISION FOR LOAN LOSSES

STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%">The provision for loan losses is determined by management as the amount to be added to the allowance for loan losses after net charge-offs have been
deducted to bring the allowance to a level considered appropriate to absorb probable losses in the loan portfolio. The provision for loan losses for the year ended December 31, 2008 increased $24.3 million or 293% to $32.5 million compared to
$8.3 million for the year ended December 31, 2007. This increase in the provision for loan losses reflects both increased uncertainty in loan performance and changing economic conditions adversely impacting WesBanco markets which have caused
net charge-offs, loan delinquencies and non-performing loans to increase. Economic conditions generally worsened throughout the year and were exacerbated in the fourth quarter of 2008 by a sharp increase in unemployment, and declining real estate
values, particularly in the Ohio metropolitan markets of Columbus, Dayton and Cincinnati. As a result, net charge-offs for 2008 increased 100% to 0.56% of average total loans compared to 0.28% for 2007 (see Allowance for Loan Losses section of this
MD&A). The provision for 2008 exceeded net charge-offs by approximately $11.3 million and increased the allowance for loan losses to 1.38% of total loans at December 31, 2008 compared to 1.03% at December 31, 2007.

STYLE="margin-top:0px;margin-bottom:0px"> 


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These excerpts taken from the WSBC 10-K filed Mar 12, 2008.

PROVISION FOR LOAN LOSSES

The provision for loan losses is determined by management as the amount to be added to the allowance for loan losses after net charge-offs have been deducted to bring the allowance to a level considered appropriate to absorb probable losses in the loan portfolio. The provision for loan losses for the year ended December 31, 2007 decreased 5% compared to the year ended December 31, 2006. However, the provision for 2006 included approximately $2.4 million to replenish the allowance for a net loss on a single commercial loan that was not previously reserved. Excluding that charge from 2006 results, the provision for 2007 increased $2.2 million or 34% compared to 2006 primarily due to general economic conditions and higher probable losses in all categories of loans. For additional information, see the “Allowance for Loan Losses” section of this MD&A.

 

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PROVISION FOR LOAN LOSSES

STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%">The provision for loan losses is determined by management as the amount to be added to the allowance for loan losses after net charge-offs have been
deducted to bring the allowance to a level considered appropriate to absorb probable losses in the loan portfolio. The provision for loan losses for the year ended December 31, 2007 decreased 5% compared to the year ended December 31,
2006. However, the provision for 2006 included approximately $2.4 million to replenish the allowance for a net loss on a single commercial loan that was not previously reserved. Excluding that charge from 2006 results, the provision for 2007
increased $2.2 million or 34% compared to 2006 primarily due to general economic conditions and higher probable losses in all categories of loans. For additional information, see the “Allowance for Loan Losses” section of this MD&A.

 


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This excerpt taken from the WSBC 10-K filed Mar 13, 2007.

PROVISION FOR LOAN LOSSES

The provision for loan losses is determined by management as the amount to be added to the allowance for loan losses after net charge-offs have been deducted to bring the allowance to a level considered appropriate to absorb probable losses in the loan portfolio. The provision for loan losses for the year ended December 31, 2006 increased 8.6% compared to the year ended December 31, 2005 primarily due to higher levels of under-performing and other impaired loans, higher probable losses associated with the deposit account overdraft program introduced in 2005, and changes in the distribution of commercial and industrial and commercial real estate loans among internal risk grades. The provision for 2006 also included approximately $2.4 million to replenish the allowance for the net loss on a $5.0 million commercial loan participation that was not previously reserved. This loan was first identified as being in default in January 2006, at which time the loan was placed on non-accrual but the estimable loss was minimal. As more information became available about the loan, the estimate of loss increased and a charge-off approximating $3.1 million was recorded in the second quarter of 2006, which was subsequently reduced by recoveries of approximately $0.7 million. For additional information, see the “Allowance for Loan Losses” section of this MD&A.

 

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This excerpt taken from the WSBC 10-K filed Mar 10, 2006.

PROVISION FOR LOAN LOSSES

 

The provision for loan losses is determined by management as the amount to be added to the allowance for loan losses after net charge-offs have been deducted to bring the allowance to a level considered appropriate to absorb probable losses in the loan portfolio. The provision for loan losses for the year ended December 31, 2005 increased $0.3 million or 4.0% to $8.0 million compared to $7.7 million for the year ended December 31, 2004. This increase primarily reflects the inherent risk of probable loss associated with organic growth during the year, heightened consumer bankruptcies experienced in the third and fourth quarters, and other factors considered when determining the level of the allowance for loan losses.

 

On January 25, 2006, WesBanco was notified by the lead lender of a default on a $5 million commercial loan participation, which prompted the loan to be classified as substandard and placed on non-accrual subsequent to December 31, 2005. The allowance for loan losses was considered adequate to absorb a probable loss on this loan based on information available at that time. Wesbanco anticipates no significant impact upon the provision for loan losses during the first quarter of 2006, but will continue to actively monitor this loan for future developments. For additional information on the provision for loan losses, see the “Allowance for Loan Losses” section of “Loans and Credit Risk” included in this MD&A.

 

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This excerpt taken from the WSBC 10-K filed Mar 16, 2005.

PROVISION FOR LOAN LOSSES

 

The provision for loan losses is determined by management as the amount to be added to the allowance for loan losses after net charge-offs have been deducted to bring the allowance to a level considered appropriate to absorb probable losses in the loan portfolio. The provision for loan losses for the year ended December 31, 2004 decreased $1.9 million or 19.5% to $7.7 million compared to $9.6 million for the year ended December 31, 2003. This decrease is attributable to overall improvement in credit quality, a significant reduction in delinquent loans, lower charge-offs in all categories of loans, and higher consumer loan recoveries. For additional information, see the “Allowance for Loan Losses” section of “Loans and Credit Risk” included in this Management’s Discussion and Analysis.

 

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