10-K

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

x      Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.

For the Fiscal Year Ended December 31, 2017

OR

o      Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.

For the transition period from _____ to _____     

Commission File No. 001-34582

NORTHWEST BANCSHARES, INC.

(Exact name of registrant as specified in its charter)

Maryland	27-0950358
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification Number)
100 Liberty Street, Warren, Pennsylvania	16365
(Address of Principal Executive Offices)	(Zip Code)

(814) 726-2140

(Registrant’s telephone number) 

Securities Registered Pursuant to Section 12(b) of the Act: 

Title of each class	Name of each exchange on which registered
Common Stock, $0.01 Par Value	NASDAQ Stock Market, LLC

Securities Registered Pursuant to Section 12(g) of the Act:

None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.  YES x  NO o

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.  YES o  NO x

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 twelve months (or for such shorter period that the Registrant was required to file such reports) and (2) has been subject to such requirements for the past 90 days.  YES x  NO o

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of Registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.  o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). YES x  NO o

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

xLarge accelerated filer     oAccelerated filer

oNon-accelerated filer (Do not check if a smaller reporting company)                                 o    Smaller reporting company

o    Emerging growth company

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. o

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  YES o  NO x

As of February 16, 2018, there were 102,549,072 shares outstanding of the Registrant’s Common Stock. 

The aggregate market value of the voting and non-voting common equity held by non-affiliates of the Registrant, computed by reference to the last sale price on June 30, 2017, as reported by the Nasdaq Global Select Market, was approximately $1.595 billion. 

DOCUMENTS INCORPORATED BY REFERENCE

                               Proxy Statement for the 2018 Annual Meeting of Stockholders of the Registrant (Part III).

TABLE OF CONTENTS

PART I
ITEM 1.	BUSINESS	2
ITEM 1A.	RISK FACTORS	15
ITEM 1B.	UNRESOLVED STAFF COMMENTS	24
ITEM 2.	PROPERTIES	24
ITEM 3.	LEGAL PROCEEDINGS	24
ITEM 4.	MINE SAFETY DISCLOSURES	24
PART II
ITEM 5.	MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES	25
ITEM 6.	SELECTED FINANCIAL DATA	27
ITEM 7.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINACIAL CONDITION AND RESULTS OF OPERATIONS	29
ITEM 7A.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	52
ITEM 8.	FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA	56
ITEM 9.	CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE	129
ITEM 9A.	CONTROLS AND PROCEDURES	129
ITEM 9B.	OTHER INFORMATION	129
PART III
ITEM 10.	DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE	129
ITEM 11.	EXECUTIVE COMPENSATION	130
ITEM 12.	SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS	130
ITEM 13.	CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE	131
ITEM 14.	PRINCIPAL ACCOUNTANT FEES AND SERVICES	131
PART IV
ITEM 15.	EXHIBITS AND FINANCIAL STATEMENT SCHEDULES	131
ITEM 16.	FORM 10-K SUMMARY	134
SIGNATURES		135
EX — 23
EX — 31.1
EX — 31.2
EX — 32
EX — 101

FORWARD-LOOKING STATEMENTS

This document contains forward-looking statements, which can be identified by the use of words such as “estimate,” “project,” “believe,” “intend,” “anticipate,” “plan,” “seek,” “expect” and words of similar meaning. These forward-looking statements include, but are not limited to:

• statements of our goals, intentions and expectations;

• statements regarding our business plans, prospects, growth and operating strategies;

• statements regarding the asset quality of our loan and investment portfolios; and

• estimates of our risks and future costs and benefits.

 These forward-looking statements are based on current beliefs and expectations of our management and are inherently subject to significant business, economic and competitive uncertainties and contingencies, many of which are beyond our control. In addition, these forward-looking statements are subject to assumptions with respect to future business strategies and decisions that are subject to change.

The following factors, among others, could cause actual results to differ materially from the anticipated results or other expectations expressed in the forward-looking statements:

• changes in laws or government regulations or policies affecting financial institutions, including changes in regulatory fees and capital requirements;

• general economic conditions, either nationally or in our market areas, that are different than expected;

• inflation and changes in the interest rate environment that reduce our margins or reduce the fair value of financial instruments;

• adverse changes in the securities and credit markets;

• cyber-security concerns, including an interruption or breach in the security of our website or other information systems;

• technological changes that may be more difficult or expensive than expected;

• the ability of third-party providers to perform their obligations to us;

• competition among depository and other financial institutions;

• our ability to enter new markets successfully and capitalize on growth opportunities;

• managing our internal growth and our ability to successfully integrate acquired entities, businesses or branch offices;

• changes in consumer spending, borrowing and savings habits;

• our ability to continue to increase and manage our commercial and personal loans;

• possible impairments of securities held by us, including those issued by government entities and government sponsored enterprises;

• the impact of the economy on our loan portfolio (including cash flow and collateral values), investment portfolio, customers and capital market activities;

• our ability to receive regulatory approvals for proposed transactions or new lines of business;

• changes in the financial performance and/ or condition of our borrowers; and

• the effect of changes in accounting policies and practices, as may be adopted by the regulatory agencies, as well as the Securities and Exchange Commission, the Public Company Accounting Oversight Board, the Financial Accounting Standards Board and other accounting standard setters.

Because of these and other uncertainties, our actual future results may be materially different from the results indicated by these forward-looking statements.  Please see “Item 1A. Risk Factors.”

Except as may be required by law, we disclaim any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

ITEM 1.BUSINESS

Northwest Bancshares, Inc.

Northwest Bancshares, Inc., a Maryland corporation, was incorporated in September 2009 to be the successor corporation to Northwest Bancorp, Inc., the former stock holding company for Northwest Bank, upon completion of the mutual-to-stock conversion of Northwest Bancorp, MHC. The terms “Northwest”, “the Company”, “we”, “us” and “our” refer to Northwest Bancshares, Inc.

The conversion was completed December 18, 2009 when the Company sold 68,878,267 shares of common stock at $10.00 per share in the related offering.  Concurrent with the completion of the offering, shares of Northwest Bancorp, Inc. common stock owned by public stockholders were exchanged for 2.25 shares of Northwest Bancshares, Inc.’s common stock.  We also issued 1,277,565 shares of common stock and contributed $1.0 million in cash from the offering proceeds to Northwest Charitable Foundation, a charitable foundation that we established for the benefit of the communities in which Northwest Bank operates.  As of December 31, 2017, the Company had 102,394,828 shares outstanding and a market capitalization of approximately $1.713 billion.

Our executive offices are located at 100 Liberty Street, Warren, Pennsylvania 16365.  Our telephone number at this address is (814) 726-2140.

The Company’s website (www.northwest.com) contains a direct link to Northwest Bancshares, Inc.’s filings with the Securities and Exchange Commission, including copies of annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to these filings, if any. Information on our website shall not be considered a part of this report. Copies of our filings may be obtained, without charge, by written request to Shareholder Relations, P.O. Box 128, Warren, Pennsylvania 16365.

Northwest Bank

Northwest Bank is a Pennsylvania-chartered stock savings bank headquartered in Warren, Pennsylvania, which is located in northwestern Pennsylvania. Northwest Bank is a community-oriented financial institution offering personal and business banking solutions, investment management and trust services and insurance products. Northwest Bank’s mutual savings bank predecessor was founded in 1896.

As of December 31, 2017, Northwest Bank operated 172 community-banking locations throughout its market area in central and western Pennsylvania, western New York and eastern Ohio. Northwest Bank also offers investment management and trust services and employee benefits and property and casualty insurance. Our principal lending activities are the origination of loans secured by first mortgages on owner-occupied, one-to four-family residences, shorter term consumer loans, and commercial business and commercial real estate loans.

Our principal sources of funds are personal and business deposits, borrowed funds and the principal and interest payments on loans and marketable securities. Our principal source of income is interest received on loans and marketable securities. Our principal expenses are the cost of employee compensation and benefits and the interest paid on deposits and borrowed funds.

Northwest Bank’s principal executive office is located at 100 Liberty Street, Warren, Pennsylvania, and its telephone number at that address is (814) 726-2140.

Market Area and Competition

We are headquartered in northwestern Pennsylvania and have expanded primarily through acquisitions, into the southwestern and central regions of Pennsylvania, as well as western New York and northeastern Ohio.  As of December 31, 2017, we operated 114 community banking locations in Pennsylvania, 22 community banking offices in Ohio and 36 community banking offices in New York.  All of the aforementioned market areas are served by a number of competing financial institutions. As a result, we encounter strong competition both in attracting deposits and in originating loans. Our most direct competition for deposits comes from other banks, brokerage houses and credit unions in our market areas.  We expect continued competition from these financial institutions in the foreseeable future. With the continued acceptance of internet banking by our customers and consumers generally, competition for deposits has increased from institutions operating outside of our market area as well as from insurance companies.

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The following description of our market area is based upon information obtained from SNL Securities, the Bureau of Labor Statistics, The Federal Housing Financial Agency and the Mortgage Bankers Association.

Pennsylvania Market Area.  Our retail branch network within the state of Pennsylvania encompasses 28 counties. Our western Pennsylvania market has a diverse economy driven by healthcare and education industries, service businesses, technology companies and small manufacturing operations. Our southeastern Pennsylvania market is primarily driven by service businesses but also serves as a bedroom community to the cities of Baltimore, Maryland and Philadelphia, Pennsylvania.

Pennsylvania is a stable banking market with a total population of approximately12.8 million and total households of approximately 5.1 million as of December 31, 2017. The Pennsylvania markets in which we operate our retail branch contain approximately half of Pennsylvania’s population and a similar percentage of households. These markets have experienced a 2.1% decrease in population between 2010 and 2017. As of December 31, 2017, the markets' average median household income increased over the last year by 4.9%, to $53,244, compared to the national median income level of $61,045. The household income growth rate in Pennsylvania of 9.6%, is projected to exceed the expected national average growth rates during the next five years of 8.9%.As of December 31, 2017, the market's unemployment rate was 4.4%, below the state of Pennsylvania rate of 4.7%, and slightly above the national average of 4.1%.

As of September 30, 2017, the House Price Index for the last four quarters in the state of Pennsylvania increased by 4.3%, compared to an increase in the national average of 6.5%. Nationally, foreclosures have receded from their record highs to the lowest levels since the fourth quarter of 2006. As of September 30, 2016, the foreclosure rate for mortgage loans on one-to-four unit residential properties in the state of Pennsylvania was 1.6%, compared to the national average of 1.2%.

Western New York Market Area. Our retail branch network of 36 community banking offices in New York encompasses five counties in the western portion of the state. This market has a diverse economy driven by healthcare and education industries, service businesses, technology companies and small manufacturing operations. 

Our New York market area has a total population of approximately 2.1 million and total households of approximately 873,000 as of December 31, 2017. This area has experienced a decrease in population between 2010 and 2017, of 1.1%. The average median household income in this market increased by 6.6% over the last year to $55,761 as of December 31, 2017, compared to the national median income level of $61,045. As of December 31, 2017, the unemployment rate for our New York market area was 5.4%, compared to the national average of 4.1%.

As of September 30, 2017, the House Price Index for the last four quarters in our New York market increased by 5.8%, compared to an increase in the national average of 6.5%. As of September 30, 2016, the foreclosure rate for mortgage loans on one-to-four unit residential properties in the state of New York was 3.7%, compared to the national average of 1.2%.

Northeastern Ohio Market Area. Our branch network includes five counties in northeastern Ohio, including the Cleveland metro area. The major employment sectors in this market are similar to the contiguous market in western Pennsylvania.

Our Ohio market area has a total population of approximately 2.4 million and total households of approximately 1.0 million as of December 31, 2017. This area has experienced an increase in population between 2010 and 2017, of 1.5%. The median household income for our Ohio market increased 5.7% over the last year to $58,014 as of December 31, 2017, compared to the national median income level of $61,045. As of December 31, 2017, the unemployment rate for our Ohio market was 4.8%, compared to the national average of 4.1%.

As of September 30, 2017, the House Price Index for the last four quarters in our Ohio market area increased by 5.9%, compared to an increase in the national average of 6.5%. As of September 30, 2016, the foreclosure rate for mortgage loans on one-to-four unit residential properties in the state of Ohio was 1.6%, compared to the national average of 1.2%.

Lending Activities

General.  Our principal lending activities are the origination of fixed and adjustable-rate loans collateralized by one-to four-family residential real estate, shorter term consumer loans and loans collateralized by multi-family residential and commercial real estate as well as commercial business loans. Generally, we focus our lending activities in the geographic areas where we maintain offices.

In an effort to manage interest rate risk, we have sought to make our interest-earning assets more interest rate sensitive by originating adjustable-rate loans, such as adjustable-rate residential mortgage loans and home equity lines of credit, and by originating short-term and medium-term fixed-rate consumer loans. In recent years we have emphasized the origination of commercial real estate loans and commercial business loans, which generally have adjustable-rates of interest and shorter maturities

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than one-to four-family residential real estate loans. Because we originate a substantial amount of long-term fixed-rate mortgage loans collateralized by one-to four-family residential real estate, when possible, we originate and underwrite loans according to standards that allow us to sell them into the secondary mortgage market for purposes of managing interest-rate risk and liquidity.  The sale of mortgage loans supports our strategy to grow the consumer and commercial loan portfolios faster than our portfolio of long-term fixed-rate residential mortgage loans. We currently sell low-yielding fixed-rate residential mortgage loans with maturities of more than 15 years, and on a more limited basis, those with maturities of 15 years or less, while retaining all adjustable-rate residential mortgage loans. Although we sell a portion of the residential mortgage loans that we originate, we continue to be a portfolio lender, and at any one time hold relatively few loans identified as held-for-sale.  We currently retain servicing on the mortgage loans we sell which generates monthly service fee income.  We generally retain in our portfolio all consumer loans that we originate while we periodically sell participations in the multi-family residential, commercial real estate or commercial business loans that we originate in an effort to reduce the concentration of certain individual credits and the risk associated with certain businesses, industries or geographies.

Residential Mortgage Loans.  We offer residential mortgage loans with terms typically ranging from 15 to 30 years, with either fixed or adjustable interest rates. Our mortgage loans are amortized on a monthly basis with both principal and interest due monthly. Originations of fixed-rate residential mortgage loans versus adjustable-rate residential mortgage loans are monitored on an ongoing basis. The percentage of adjustable-rate residential mortgage originations to total originations is affected significantly by the level of market interest rates, customer preference, our interest rate sensitivity and liquidity position, as well as loan products offered by our competitors. Therefore, even when our strategy is to increase the origination of adjustable-rate residential mortgage loans, market conditions may be such that there is greater demand for fixed-rate mortgage loans. Adjustable-rate residential mortgage loans totaled $53.0 million, or 0.7%, of our gross loan portfolio at December 31, 2017.

Our fixed-rate residential mortgage loan products offer fixed-rates for up to 30 years. Whenever possible, our fixed-rate residential mortgages are originated and underwritten according to secondary mortgage market guidelines in order to manage credit risk, as well as interest rate risk and liquidity. Our adjustable-rate residential mortgage loans offer initial interest rate adjustment periods of one, three, and five years, terms up to 30 years and adjustments based on changes in designated market indices. 

Regulations limit the amount that a savings bank may lend relative to appraised values of real estate securing the loans, as determined by an appraisal at the time of loan origination.  Appraisals are performed by in-house appraiser staff or by appraisers deemed qualified by our chief appraiser.  Such regulations permit a maximum loan-to-value of 95% for residential properties and 80% for all other real estate secured loans. We generally limit the maximum loan-to-value on both fixed- and adjustable-rate residential mortgage loans without private mortgage insurance, to 80% of the lesser of appraised values or purchase prices of real estate serving as collateral for our mortgage loans.  Limited special financing programs allow for insured loans with loan-to-value ratios of up to 97%, and uninsured loans with loan-to-value ratios up to 90%. The appraisal process is managed by Northwest Appraisal Services, and appraisals are performed by in-house appraiser staff or by appraisers deemed qualified by our chief appraiser. We require fire and casualty insurance, as well as a title guaranty regarding good title, on all properties securing our residential mortgage loans. We also require flood insurance for loans secured by properties located within special flood hazard areas.

Included in our $2.773 billion portfolio of residential mortgage loans are construction loans of $16.8 million, or 0.2% of our gross loan portfolio.  We offer fixed-rate and adjustable-rate residential construction-to-perm loans primarily for the construction of owner-occupied one-to four-family residences in our market area to builders or owners who have a contract for construction.  Construction loans are originated with terms of up to 30 years with an allowance of up to one year for construction.  Advances are made as construction is completed, and interest is charged on the total amount of credit extended.  At the end of the construction period, repayment terms convert to fully amortizing payments, with both principal and interest due monthly. Construction lending generally involves a greater degree of credit risk than permanent residential mortgage lending, as repayment of construction loans is often dependent upon the successful completion of construction projects.  Construction delays or the inability of borrowers to sell properties once construction is completed may impair borrowers’ ability to repay loans.  Private mortgage insurance is required for construction loans with loan-to-value ratios in excess of 80%, and the maximum loan-to-value ratio for construction loans is 95% of the lower of cost to build or as-completed appraised value.

In addition, we originate loans within our market area that are secured by individual unimproved or improved lots.  Land loans for the construction of owner-occupied residential real estate properties are currently offered with fixed-rates for terms of up to ten years.  The maximum loan-to-value ratio for these loans is 80% of the as-completed appraised value.

Our residential mortgage loans customarily include due-on-sale clauses, which are provisions giving us the right to declare loans immediately due and payable in the event, among other things, borrowers sell or otherwise dispose of underlying real properties serving as collateral for loans.

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Home Equity Loans.  Generally, our home equity loans are secured by the borrower’s principal residence with a maximum loan-to-value ratio, including the principal balances of both the first and second mortgage loans, of 90% or less. We generally underwrite home equity loans and lines of credit in a manner similar to our underwriting of residential mortgage loans.

Home equity loans are offered on a fixed-rate basis with amortized terms of up to 20 years. Principal and interest is due monthly.  At December 31, 2017, our fixed-rate home equity loans totaled $717.3 million, or 9.0% of gross loans.

Home equity lines of credit are offered on an adjustable-rate basis with terms of up to 30 years, including draw and repayment periods of up to 15 years each. Although home equity lines of credit require interest only payments during draw periods, they are underwritten using amortizing principal and interest payments based on current rates of equivalent fixed-rate products. The disbursed portion of home equity lines of credit totaled $593.0 million, or 7.4% of gross loans, with $664.0 million remaining undisbursed as of December 31, 2017.

Other Consumer Loans.  The principal types of other consumer loans we offer are direct and indirect automobile loans, sales finance loans, unsecured personal loans, credit card loans, and loans secured by deposit accounts. These loans are typically offered with maturities of ten years or less.

The underwriting standards we employ for consumer loans include a determination of the applicant’s credit history and an assessment of ability to meet existing obligations and payments on the proposed loan. The stability of the applicant’s monthly income may be determined by verification of gross monthly income from primary employment, and additionally, from any verifiable secondary income. Creditworthiness of the applicant is of primary consideration; however, the underwriting process also includes a comparison of the value of the collateral in relation to the proposed loan amount.

Consumer loans entail greater credit risk than residential mortgage loans, particularly in the case of consumer loans that are unsecured or secured by assets that depreciate rapidly, such as automobiles, mobile homes, boats, recreation vehicles, appliances and furniture. In such cases, repossessed collateral for a defaulted consumer loan may not provide an adequate source of repayment for the outstanding loan and the remaining deficiency often does not warrant further substantial collection efforts against the borrower. In particular, amounts realizable on the sale of repossessed automobiles may be significantly reduced based upon the condition of the automobiles and the lack of demand for used automobiles.  At December 31, 2017, other consumer loans totaled $657.3 million, or 8.2% of gross loans.

Commercial Real Estate Loans.  Our multi-family commercial real estate loans are secured by multi-family residences, such as rental properties. Our commercial real estate loans are secured by nonresidential properties such as hotels, commercial offices, medical buildings, manufacturing facilities and retail establishments. At December 31, 2017, a significant portion of our multi-family commercial real estate and commercial real estate loans were secured by properties located within our market area. Our largest multi-family commercial real estate loan relationship at December 31, 2017 had a principal balance of $42.5 million, and was secured by a residential development. This loan was performing in accordance with its terms as of December 31, 2017. Our largest commercial real estate loan relationship at December 31, 2017 had a principal balance of $85.6 million and was secured by 15 commercial real estate properties including student housing, a medical office, commercial office, industrial and retail. These loans were performing in accordance with their terms as of December 31, 2017. Multi-family commercial and commercial real estate loans are offered with both adjustable and fixed interest rates. The terms of each multi-family residential and commercial real estate loan are negotiated on a case-by-case basis. We generally originate multi-family commercial and commercial real estate loans in amounts up to 80% of the appraised value of the property collateralizing the loan.

Loans secured by multi-family commercial and commercial real estate generally involve a greater degree of credit risk than residential mortgage loans and carry larger loan balances. This increased credit risk is a result of several factors, including the concentration of principal in a limited number of loans and borrowers, the effects of general economic conditions on income producing properties, and the increased difficulty of evaluating and monitoring these types of loans. Furthermore, the repayment of loans secured by multi-family commercial and commercial real estate is typically dependent upon the successful operation of the related real estate property. If the cash flow from the project is reduced, the borrower’s ability to repay the loan may be impaired.

Commercial Loans.  We offer commercial loans to finance various activities in our market area, some of which are secured in part by additional real estate collateral. At December 31, 2017, our largest commercial loan relationship had a principal balance of $44.2 million, and was unsecured. This loan was performing in accordance with its terms as of December 31, 2017.

Commercial business loans are offered with both fixed and adjustable interest rates. Underwriting standards we employ for commercial business loans include a determination of the applicant’s ability to meet existing obligations and payments on the proposed loan from operating cash flows generated by the applicant’s business. The financial strength of each applicant is also assessed through a review of financial statements provided by the applicant.

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We originate commercial loans through our network of Small Business and Commercial Loan Officers located in our Regional areas. In addition, our Commercial Finance group originates loans where multiple banks may be involved in the credit facilities. These loans are made to companies residing in our market area. Many of these companies carry public debt ratings. 

Commercial loans generally have higher interest rates than residential loans, but they also may involve a higher risk of default since their repayment is generally dependent on the successful operation of the borrower’s business.  We strive to obtain personal guarantees from the borrower or a third party as a condition to originating commercial loans.

Loan Originations, Solicitation, Processing and Commitments.  Upon receiving a retail loan application, we obtain a credit report and employment verification to verify specific information relating to the applicant’s employment, income, and credit standing.  In the case of a real estate loan, either an in-house appraiser, or an approved external appraiser, appraises the real estate intended to secure the proposed loan.  A loan processor checks the loan document file for accuracy and completeness, and verifies the information provided.

For our personal loans, including residential mortgage loans, home equity loans and lines of credit, automobile loans, credit cards and other unsecured loans, we have implemented a credit approval process based on a laddered individual loan authority system. Real estate secured loans are underwritten centrally by our licensed mortgage loan originators. Non-real estate loans are underwritten by local loan officers who are granted various levels of authority based on their lending experience and expertise.  These authority levels are reviewed by the Credit Committee on at least an annual basis. As part of the approval process, we assign independent credit officers to review the creditworthiness of all loans exceeding $500,000. If the credit officer has concerns regarding a loan that has been approved at a specific level, they have the authority to request that the loan be reviewed and approved at the next higher level.

Our commercial loan policy assigns individual lending limits for our various commercial loan officers and dual authority consisting of an individual from Commercial Lending and Credit Administration. Lending authorities are established by the Credit Committee. The Senior Loan Committee may approve extensions of credit in excess of the maximum dual authority. The Credit Committee meets quarterly to review the assigned lending limits and to monitor our lending policies, loan activity, economic conditions and concentrations of credit.

Our general policy is to make no loans either individually or in the aggregate to one customer in excess of $20.0 million.  Under certain circumstances, for instance well qualified customers or customers with multiple individually qualified projects, this limit may be exceeded subject to the approval of the Senior Loan Committee. Loans exceeding $5.0 million or unusual loan requests are reviewed with the Risk Management Committee of the Board of Directors at each quarterly meeting.  In addition, the Chief Credit Officer has the authority to require that the Board of Directors review any loan that has been approved by the Senior Loan Committee with which the Chief Credit Officer has specific concerns. Fire and casualty insurance is required at the time the loan is made and throughout the term of the loan, and flood insurance is required as determined by regulation.  After a loan is approved, a loan commitment letter is promptly issued to the borrower.  At December 31, 2017, we had commitments to originate $181.1 million of loans.

The commitment letter specifies the terms and conditions of the proposed loan including the amount, interest rate, amortization period, maturity, a description of the required collateral and required insurance coverage. Property searches are requested, as needed, on all loans secured by real property.

Loan Origination Fees.  We defer loan origination fees received from borrowers and costs to originate loans and amortize such amounts as an adjustment of yield over the life of the loan by using the level yield method. Deferred loan fees and costs are recognized as part of interest income immediately upon prepayment or the sale of the related loan. At December 31, 2017, we had $27.8 million of net deferred loan origination costs. Loan origination fees vary with the volume and type of loans and commitments originated and purchased, principal repayments, and competitive conditions in the marketplace.

Income from net loan origination fees was $11.6 million, $11.3 million and $9.2 million for the years ended December 31, 2017, 2016 and 2015, respectively.

Loans-to-One Borrower.  As of December 31, 2017, the largest aggregate amount loaned to one borrower, or related borrowers, totaled $85.6 million and was secured by 15 commercial real estate properties including student housing, a medical office, commercial office, industrial and retail. Our second largest lending relationship totaled $79.2 million and was secured by 28 commercial real estate properties including hotels, office and retail space, multi-family, self-storage and a charter school. Our third largest lending relationship totaled $44.2 million and was unsecured. Our fourth largest lending relationship totaled $44.0 million and was secured by eight commercial office buildings. Our fifth largest lending relationship totaled $42.5 million and was secured by a residential development. All of these loans were performing in accordance with their terms at December 31, 2017.

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Investment Activities

Our Board of Directors has primary responsibility for establishing and overseeing our investment policy. The Board of Directors has delegated authority to implement the investment policy to our Chief Financial Officer. The investment policy is reviewed at least annually, and any changes to the policy are subject to approval by the Board of Directors.  The overall objectives of the investment policy are to maintain a portfolio of high quality and diversified investments, to provide liquidity, and to control interest rate risk while providing an acceptable return. The investment portfolio is also used to provide collateral for qualified deposits and borrowings, to provide additional earnings when loan production is low, and to reduce our tax liability. The policy dictates that investment decisions give consideration to the safety of principal, liquidity requirements and potential returns. All purchase and sale transactions are reported to the Board of Directors on a monthly basis.

Our investment policy does not permit the purchase of complex securities and derivatives as defined in federal banking regulations and other high-risk securities, nor does it permit additional investments in non-agency mortgage-backed securities, pooled trust preferred securities, or single issuer trust preferred securities.

At the time of purchase, we designate a security as either held-to-maturity or available-for-sale based upon our ability and intentions.  Securities available-for-sale are carried at fair value and securities held-to-maturity are carried at amortized cost.  A periodic review and evaluation of the available-for-sale and held-to-maturity securities portfolios is conducted to determine if the fair value of any security has declined below its carrying value and whether such decline is other-than-temporary.  If impairment exists, credit related impairment losses are recorded in earnings while noncredit related impairment losses are recorded in accumulated other comprehensive income (for available-for-sale securities).  The fair values of our securities are based on published or securities dealers’ market values, when available.  See note 3 to the Consolidated Financial Statements for a detailed analysis and description of our investment portfolio and valuation techniques.

We purchase debentures and mortgage-backed securities that generally are issued by the Federal Home Loan Bank ("FHLB"), Fannie Mae ("FNMA"), Freddie Mac ("FHLMC") or Ginnie Mae ("GNMA").  Historically, we have invested in mortgage-backed securities to achieve positive interest rate spreads with minimal administrative expense and to lower our credit risk as a result of the guarantees provided by FHLMC, FNMA or GNMA. 

Sources of Funds

General. Deposits are the major funding source for lending and other investing purposes. In addition to deposits, we derive funds from the amortization, prepayment and sale of loans and mortgage-backed securities, the maturity of investment securities, operations and, if needed, borrowings. Scheduled loan principal repayments are a relatively stable source of funds, while deposit inflows and outflows and loan prepayments and sales are influenced significantly by general interest rates and market conditions. Borrowings may be used on a short-term basis to compensate for reductions in the availability of funds from other sources or on a longer term basis for general business purposes, including to manage interest rate risk.

Deposits. Personal and business deposits are generated from our market area by offering a broad selection of deposit instruments including checking accounts, savings accounts, money market deposit accounts, term certificate accounts and individual retirement accounts. While we accept deposits of $250,000 or more, we do not offer premium rates for such deposits. We accept brokered deposits through the CDARS program, but generally do not solicit funds outside our market area.  As of December 31, 2017, we had deposits through the CDARS program with an aggregate balance of $6.9 million. Deposit account terms vary according to the minimum balance required, the period of time during which the funds must remain on deposit, and the interest rate, among other factors. We regularly execute changes in our deposit rates based upon general market interest rates, competition, and liquidity requirements.

Borrowings. We may rely upon borrowings to supplement our supply of lendable funds and to meet deposit withdrawal requirements. Borrowings from the Federal Home Loan Bank of Pittsburgh typically are collateralized by a portion of our real estate loans. In addition to the Federal Home Loan Bank of Pittsburgh, we have borrowing facilities with the Federal Reserve Bank, two correspondent banks and we borrow funds, in the form of corporate repurchase agreements, from municipalities, corporations and school districts.

The Federal Home Loan Bank of Pittsburgh functions as a central bank providing credit for Northwest Bank and other member financial institutions.  As a member, Northwest Bank is required to own capital stock in the Federal Home Loan Bank of Pittsburgh and is authorized to apply for borrowings on the security of certain of its real estate loans, provided certain standards related to creditworthiness have been met.  Borrowings are made pursuant to several different programs.  Each credit program has its own interest rate and range of maturities.  Depending on the program, limitations on the amount of borrowings are based either on a fixed percentage of a member institution’s net worth or on the Federal Home Loan Bank of Pittsburgh’s assessment of the institution’s creditworthiness. 

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Subsidiary Activities

Northwest Bancshares, Inc.’s sole direct consolidated subsidiary is Northwest Bank. Northwest Bancshares, Inc. also owns all of the common stock of three statutory business trusts: Northwest Bancorp Capital Trust III, a Delaware statutory business trust, Northwest Bancorp Statutory Trust IV, a Connecticut statutory business trust, and LNB Trust II, a Delaware statutory business trust (the “Trusts”). At December 31, 2017, the Trusts have issued a total of $107.9 million of trust preferred securities. The Trusts are not consolidated with Northwest Bancshares, Inc.  At December 31, 2017, Northwest Bancshares, Inc.’s investment in the Trusts totaled $3.3 million, and the Trusts had assets of $111.2 million.

At December 31, 2017 Northwest Bank had five active wholly-owned subsidiaries - Great Northwest Corporation, Northwest Advisors, Inc., Allegheny Services, Inc., Northwest Capital Group, Inc., and The Bert Company.  For financial reporting purposes all of these companies are included in the consolidated financial statements of Northwest Bancshares, Inc.

Great Northwest Corporation holds equity investments in government-assisted, low-income housing projects in various locations throughout our market area.  At December 31, 2017, Northwest Bank had an equity investment in Great Northwest Corporation of $11.4 million.  For the year ended December 31, 2017, Great Northwest Corporation had net income of $490,000, generated primarily from federal low-income housing tax credits.

Allegheny Services, Inc. is a Delaware investment company that holds mortgage loans originated through our wholesale lending operation as well as municipal bonds. At December 31, 2017, Northwest Bank had an equity investment in Allegheny Services, Inc. of $796.8 million, and for the year ended December 31, 2017, Allegheny Services, Inc. had net income of $18.3 million.

Northwest Capital Group, Inc’s principal activity is to own, operate and ultimately divest of properties that were acquired in foreclosure.  At December 31, 2017, Northwest Bank had an equity investment of $11.7 million in Northwest Capital Group, Inc., which reported a net loss of $8,000 for the year ended December 31, 2017.

The Bert Company (doing business as Northwest Insurance Services) is an employee benefits and property and casualty insurance agency specializing in commercial and personal insurance as well as retirement benefit plans.  At December 31, 2017, Northwest Bank had an equity investment of $10.2 million in The Bert Company and for the year ended December 31, 2017, The Bert Company had net income of $265,000. 

Northwest Advisors, Inc., a federally registered investment advisor, provides investment management programs and investment portfolio planning services. At December 31, 2017, Northwest Bank had an equity investment in Northwest Advisors, Inc. of $2.5 million, and for the year ended December 31, 2017, Northwest Advisors, Inc. had net income of $346,000. Starting in January 2018 all income and related expenses will be recognized by Northwest Bank.

During 2017 Northwest Bank strategically ceased operating several business line.

Northwest Settlement Agency, LLC ceased writing new title insurance business during the fourth quarter of 2016 and ceased operations and became inactive during 2017. At December 31, 2017, Northwest Bank had an equity investment in Northwest Settlement Agency, LLC of $3.9 million. For the year ended December 31, 2017, Northwest Settlement Agency, LLC had net loss of $61,000.

On July 14, 2017, Northwest Consumer Discount Company, Inc. became inactive as all consumer finance offices were closed.  At December 31, 2017, Northwest Bank had an equity investment in Northwest Consumer Discount Company of $44.3 million and for the year ended December 31, 2017, Northwest Consumer Discount Company had a net loss of $510,000.

Boetger and Associates, Inc. (doing business as Northwest Retirement Services) was sold on December 8, 2017.  While a subsidiary of Northwest Bank, Boetger and Associates, Inc. had net income of $62,000 for the year ended December 31, 2017.

Federal regulations require insured institutions to provide 30 days advance notice to the Federal Deposit Insurance Corporation (“FDIC”) before establishing or acquiring a subsidiary or conducting a new activity in a subsidiary.  The insured institution must also provide the FDIC such information as may be required by applicable regulations and must conduct the activity in accordance with the rules and orders of the FDIC. In addition to other enforcement and supervision powers, the FDIC may determine after notice and opportunity for a hearing that the continuation of a savings bank’s ownership of or relation to a subsidiary constitutes a serious risk to the safety, soundness or stability of the savings bank, or is inconsistent with the purposes of federal banking laws.  Upon the making of such a determination, the FDIC may order the savings bank to divest the subsidiary or take other actions.

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Personnel

As of December 31, 2017, we had 1,957 full-time and 297 part-time employees. None of our employees are represented by a collective bargaining group. We believe we have a good working relationship with our employees.

SUPERVISION AND REGULATION

General

As a savings and loan holding company, we are required to comply with the rules and regulations of the Board of Governors of the Federal Reserve System (the “Federal Reserve Board”), and are also required to file certain reports with and are subject to examination by the Federal Reserve Board. We are also subject to the rules and regulations of the Securities and Exchange Commission under the federal securities laws.

Northwest Bank is a Pennsylvania-chartered stock savings bank and our deposit accounts are insured up to applicable limits by the FDIC’s Deposit Insurance Fund (the "DIF"). Northwest Bank is subject to extensive regulation by the Department of Banking and Securities of the Commonwealth of Pennsylvania (the “Department of Banking”), as its chartering agency, and by the FDIC, as the insurer of its deposit accounts. Northwest Bank must file reports with the Department of Banking and the FDIC concerning its activities and financial condition in addition to obtaining regulatory approvals prior to entering into certain transactions including acquisitions of other financial institutions. Northwest Bank is examined periodically by the Department of Banking and the FDIC to test Northwest Bank’s compliance with various laws and regulations. This regulation and supervision, as well as federal and state law, establishes a comprehensive framework of activities in which Northwest Bank may engage and is intended primarily for the protection of the DIF and depositors. The regulatory structure also gives the regulatory authorities extensive discretion in connection with their supervisory and enforcement activities and with their examination policies, including policies with respect to the classification of assets and the establishment of adequate loan loss reserves for regulatory purposes. Any change in these laws or regulations, whether by the Department of Banking or the FDIC, could have a material adverse impact on the Company, Northwest Bank and their respective operations. Additionally, when the consolidated assets of a financial institution and its holding company exceed $10 billion, the financial institution becomes subject to additional statutory and regulatory requirements that will result in additional costs. This includes enhanced risk management and corporate governance processes, stress-testing based on scenarios specified by the federal regulatory agencies and examination for compliance with federal financial consumer protection laws by the Consumer Financial Protection Bureau rather than the FDIC. As of December 31, 2017, our consolidated assets were $9.364 billion.

Set forth below is a brief description of certain regulatory requirements that are applicable to Northwest Bank and Northwest Bancshares, Inc. The description below is limited to certain material aspects of the statutes and regulations addressed, and is not intended to be a complete description of such statutes and regulations and their effects on Northwest Bank and Northwest Bancshares, Inc.

Pennsylvania Savings Bank Law

The Pennsylvania Banking Code of 1965, as amended (the “Banking Code”) contains detailed provisions governing the organization, operations, corporate powers, savings and investment authority, branching rights and responsibilities of directors, officers and employees of Pennsylvania savings banks. A Pennsylvania savings bank may locate or change the location of its principal place of business and establish an office anywhere in, or adjacent to, Pennsylvania, with the prior approval of the Department of Banking. The Banking Code delegates extensive rulemaking power and administrative discretion to the Department of Banking in its supervision and regulation of state-chartered savings banks.

Although the Department of Banking may accept the examinations and reports of the FDIC in lieu of its own examination, the current practice is for the Department of Banking to conduct joint examinations with the FDIC. The Department of Banking may order any savings bank to discontinue any violation of law or unsafe or unsound business practice and may direct any director, officer, or employee of a savings bank engaged in a violation of law, unsafe or unsound practice or breach of fiduciary duty to show cause at a hearing before the Department of Banking why such person should not be removed. The Department of Banking may also appoint a receiver or conservator for an institution in appropriate cases.

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The “Banking Law Modernization Package” was Pennsylvania legislation effective in 2012. The legislation was intended to update, simplify and modernize the banking laws of Pennsylvania and reduce regulatory burden where possible. The legislation, among other things, increased the threshold for investments in bank premises without Department of Banking approval from 25% of capital, surplus, undivided profits and capital securities to 100%, eliminated certain lending requirements and pricing restrictions and changed the procedure for a Pennsylvania state chartered institution to close a branch from an application for approval to a notice. The legislation also clarified the Department of Banking’s examination and enforcement authority over subsidiaries of Pennsylvania institutions and authorized the assessment of civil money penalties of up to $25,000 under certain circumstances for violations of laws or orders related to the institution or unsafe or unsound practices or breaches of fiduciary duties.

Federal Deposit Insurance

The FDIC currently maintains the DIF, which was created in 2006 through the merger of the Bank Insurance Fund and the Savings Association Insurance Fund.  The deposit accounts of our subsidiary bank are insured by the DIF to the maximum amount provided by law.  This insurance is backed by the full faith and credit of the United States Government.

As insurer, the FDIC is authorized to conduct examinations of and to require reporting by DIF-insured institutions.  It also may prohibit any DIF-insured institution from engaging in any activity the FDIC determines by regulation or order to pose a serious threat to the DIF.  The FDIC also has the authority to take enforcement actions against insured institutions.

The FDIC charges insured depository institutions premiums to maintain the Deposit Insurance Fund. Under the FDIC’s risk-based assessment system, insured institutions were assigned a risk category based on supervisory evaluations, regulatory capital levels and certain other factors. An institution’s rate depended upon the category to which it is assigned, and certain adjustments specified by FDIC regulations. Institutions deemed less risky pay lower FDIC assessments. The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2016 (the “Dodd-Frank Act”) required the FDIC to revise its procedures to base its assessments upon each insured institution’s total assets less tangible equity instead of deposits. The FDIC finalized a rule, effective April 1, 2011, that set the assessment range at 2.5 to 45 basis points of total assets less tangible equity.

Effective July 1, 2016, the FDIC adopted changes that eliminated the risk categories. Assessments for most institutions are now based on financial measures and supervisory ratings derived from statistical modeling estimating the probability of failure within three years. In conjunction with the Deposit Insurance Fund reserve ratio achieving 1.15%, the assessment range was reduced for most banks and savings associations of less than $10 billion in total assets to 1.5 basis points from 30 basis points (inclusive of possible adjustments), effective July 1, 2016. The Dodd-Frank Act specifies that banks of greater than $10 billion in assets be required to bear the burden of raising the reserve ratio form 1.15% to 1.35%. Such institutions are subject to an annual surcharge of 4.5 basis points of total assets exceeding $10 billion. This surcharge will remain in place until the earlier of the Deposit Insurance Fund reaching the 1.35% ratio or December 31, 2018, at which point a shortfall assessment would be applied.

In addition, all institutions with deposits insured by the FDIC are required to pay assessments to fund interest payments on bonds issued by the Financing Corporation, a mixed-ownership government corporation established to recapitalize a predecessor to the Deposit Insurance Fund.  These assessments will continue until the Financing Corporation bonds mature in 2019.

Insurance of deposits may be terminated by the FDIC upon a finding that the institution has engaged or is engaging in unsafe and unsound practices, is in an unsafe or unsound condition to continue operations or has violated any applicable law, regulation, rule, order or condition imposed by the FDIC or written agreement entered into with the FDIC. The management of the Bank does not know of any practice, condition or violation that might lead to termination of deposit insurance.

Capital Requirements

Federal regulations require federally insured depository institutions to meet several minimum capital standards: a common equity Tier 1 capital to risk-based assets ratio of 4.5%, a Tier 1 capital to risk-based assets ratio of 6.0%, a total capital to risk-based assets of 8.0%, and a 4.0% Tier 1 capital to total assets leverage ratio. These capital requirements were effective January 1, 2015 and are the result of a final rule implementing recommendations of the Basel Committee on Banking Supervision and certain requirements of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (the “Dodd-Frank Act”).

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In determining the amount of risk-weighted assets for purposes of calculating risk-based capital ratios, all assets, including certain off-balance sheet assets (e.g., recourse obligations, direct credit substitutes, residual interests) are multiplied by a risk weight factor assigned by the regulations based on the risks believed inherent in the type of asset. Higher levels of capital are required for asset categories believed to present greater risk. Common equity Tier 1 capital is generally defined as common stockholders’ equity and retained earnings. Tier 1 capital is generally defined as common equity Tier 1 and additional Tier 1 capital. Additional Tier 1 capital includes certain noncumulative perpetual preferred stock and related surplus and minority interests in equity accounts of consolidated subsidiaries. Total capital includes Tier 1 capital (common equity Tier 1 capital plus additional Tier 1 capital) and Tier 2 capital. Tier 2 capital is comprised of capital instruments and related surplus, meeting specified requirements, and may include cumulative preferred stock and long-term perpetual preferred stock, mandatory convertible securities, intermediate preferred stock and subordinated debt. Also included in Tier 2 capital is the allowance for loan and lease losses limited to a maximum of 1.25% of risk-weighted assets and, for institutions that have exercised an opt-out election regarding the treatment of Accumulated Other Comprehensive Income, up to 45% of net unrealized gains on available-for-sale equity securities with readily determinable fair market values. Calculation of all types of regulatory capital is subject to deductions and adjustments specified in the regulations. In assessing an institution’s capital adequacy, the FDIC takes into consideration, not only these numeric factors, but qualitative factors as well, and has the authority to establish higher capital requirements for individual institutions where deemed necessary.

Any institution that fails any of the regulatory capital requirements is subject to enforcement action by the FDIC. Such action may include a capital directive, a cease and desist order, civil money penalties, restrictions on an institution’s operations, termination of federal deposit insurance, and the appointment of a conservator or receiver. Such action, through enforcement proceedings or otherwise, may require a variety of corrective measures. The regulations limit capital distributions and certain discretionary bonus payments to management if the institution does not hold a “capital conservation buffer” consisting of 2.5% of common equity Tier 1 capital to risk-weighted asset above the amount necessary to meet its minimum risk-based capital requirements. The capital conservation buffer requirement is being phased in beginning January 1, 2016 at 0.625% of risk-weighted assets and increasing each year until fully implemented at 2.5% on January 1, 2019. The capital conservation buffer was 1.25% for calendar 2017 and increased to 1.875% effective January 1, 2018.

The following table shows the Basel III regulatory capital levels that must be maintained to avoid limitations on capital distributions and discretionary bonus payments for the periods indicated: 

	January 1,
	2017		2018		2019
Common equity Tier 1 ratio plus capital conservation buffer	5.750	%	6.375	%	7.000	%
Tier 1 risk-based capital ratio plus capital conservation buffer	7.250	%	7.875	%	8.500	%
Total risk-based capital ratio plus capital conservation buffer	9.250	%	9.875	%	10.500	%

Northwest Bank is also subject to capital guidelines of the Department of Banking. Although not adopted in regulation form, the Department of Banking requires 6% leverage capital and 10% risk-based capital. The components of leverage and risk-based capital are substantially the same as those defined by the FDIC.

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Prompt Corrective Action

Federal law requires, among other things, that federal bank regulators take “prompt corrective action” with respect to institutions that do not meet minimum capital requirements. For this purpose, the law establishes five capital categories: well capitalized, adequately capitalized, undercapitalized, significantly undercapitalized and critically undercapitalized. The applicable FDIC regulations were amended to incorporate the previously mentioned increased regulatory capital standards that were effective January 1, 2015. Under the amended regulations, an institution is deemed to be “well capitalized” if it has a total risk-based capital ratio of 10.0% or greater, a Tier 1 risk-based capital ratio of 8.0% or greater, a leverage ratio of 5.0% or greater and a common equity Tier 1 ratio of 6.5% or greater. An institution is “adequately capitalized” if it has a total risk-based capital ratio of 8.0% or greater, a Tier 1 risk-based capital ratio of 6.0% or greater, a leverage ratio of 4.0% or greater and a common equity Tier 1 ratio of 4.5% or greater. An institution is “undercapitalized” if it has a total risk-based capital ratio of less than 8.0%, a Tier 1 risk-based capital ratio of less than 6.0%, a leverage ratio of less than 4.0% or a common equity Tier 1 ratio of less than 4.5%. An institution is deemed to be “significantly undercapitalized” if it has a total risk-based capital ratio of less than 6.0%, a Tier 1 risk-based capital ratio of less than 4.0%, a leverage ratio of less than 3.0% or a common equity Tier 1 ratio of less than 3.0%. An institution is considered to be “critically undercapitalized” if it has a ratio of tangible equity (as defined in the regulations) to total assets that is equal to or less than 2.0%. Institutions that fall into an “undercapitalized” category are subject to a variety of mandatory and discretionary supervisory actions, including a restriction on capital distributions and the requirement to file a capital restoration plan with the regulators. Performance under the capital restoration plan must be guaranteed by the parent holding company up to the lesser of the amount of the capital deficiency when deemed undercapitalized or 5% of the institution’s total assets. Federal regulations also specify circumstances under which a federal banking agency may reclassify a well capitalized institution as adequately capitalized, and may require an adequately capitalized institution to comply with supervisory actions as if it were in the next lower category (except that the Federal Deposit Insurance Corporation may not reclassify a significantly undercapitalized institution as critically undercapitalized). As of December 31, 2017, Northwest Bank was “well-capitalized” for this purpose.

Loans-to-One Borrower Limitation

In accordance with the Banking Code, a Pennsylvania chartered savings bank, with certain limited exceptions, may lend to a single or related group of borrowers on an “unsecured” basis an amount equal to 15% of its capital accounts, the aggregate of capital, surplus, undivided profits, capital securities and reserve for loan losses. The Credit Committee has established an internal lending limit, either individually or in the aggregate to one customer, of $20.0 million. Under certain circumstances, for instance well qualified customers or customers with multiple individually qualified projects, this limit may be exceeded subject to the approval of the Senior Loan Committee. As of December 31, 2017 we had 23 credit relationships that equal or exceed our $20.0 million internal limit.

Activities and Investments of Insured State-Chartered Banks

Federal law generally limits the activities and equity investments of state-chartered banks insured by the FDIC to those that are permissible for national banks. Under regulations dealing with equity investments, an insured state bank generally may not, directly or indirectly, acquire or retain any equity investment of a type, or in an amount, that is not permissible for a national bank. An insured state bank is not prohibited from, among other things: (i) acquiring or retaining a majority interest in a subsidiary; (ii) investing as a limited partner in a partnership the sole purpose of which is direct or indirect investment in the acquisition, rehabilitation, or new construction of a qualified housing project, provided that such limited partnership investments may not exceed 2% of the bank’s total assets; (iii) acquiring up to 10% of the voting stock of a company that solely provides or reinsures liability insurance for directors, trustees or officers, or blanket bond group insurance coverage for insured depository institutions; and (iv) acquiring or retaining the voting shares of a depository institution if certain requirements are met. Activities of state banks and their subsidiaries are generally limited to those permissible for national banks. Exceptions include where the bank meets applicable regulatory capital requirements and the FDIC determines that the proposed activity does not pose a significant risk to the deposit insurance fund.

The USA PATRIOT Act

The USA Patriot Act gives the federal government powers to address terrorist threats through enhanced domestic security measures, expanded surveillance powers, increased information sharing and broadened anti-money laundering requirements. The USA Patriot Act also requires the federal banking agencies to take into consideration the effectiveness of controls designed to combat money-laundering activities in determining whether to approve a merger or other acquisition application of a member institution. Accordingly, if we engage in a merger or other acquisition, our controls designed to combat money laundering would be considered as part of the application process. We have established policies, procedures and systems designed to comply with these regulations.

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Holding Company Regulation

General. Federal law allows a state savings bank, such as Northwest Bank, to elect to be treated as a savings association for purposes of the savings and loan company provisions of the Home Owners’ Loan Act of 1933, as amended, provided that it qualifies as a “Qualified Thrift Lender.” Such election results in its holding company being regulated as a savings and loan holding company by the Federal Reserve Board rather than as a bank holding company. Northwest Bank has made such an election. Therefore, Northwest Bancshares, Inc. is a savings and loan holding company within the meaning of the Home Owners’ Loan Act of 1933, as amended. As such, we are registered as a savings and loan holding company with the Federal Reserve Board and are subject to Federal Reserve Board regulations, examinations, supervision and reporting requirements. In addition, the Federal Reserve Board has enforcement authority over the Company and any non-savings institution subsidiaries of the Company. Among other things, this authority permits the Federal Reserve Board to restrict or prohibit activities that are determined to be a serious risk to the subsidiary savings institution.

Permissible Activities. The business activities of Northwest Bancshares, Inc. are generally limited to those activities permissible for financial holding companies under Section 4(k) of the Bank Holding Company Act of 1956, as amended, or for multiple savings and loan holding companies. A financial holding company may engage in activities that are financial in nature, including underwriting equity securities and insurance as well as activities that are incidental to financial activities or complementary to financial activities. The Dodd-Frank Act and Federal Reserve Board regulations specify that a savings and loan holding company may only engage in financial holding company activities if it meets the qualitative criteria necessary for a bank holding company to engage in such activities and files an election with the Federal Reserve Board. Northwest Bancshares, Inc. has not chosen to be regulated as a financial holding company up to this time. A multiple savings and loan holding company is generally limited to activities permissible for bank holding companies under Section 4(c)(8) of the Bank Holding Company Act, subject to the prior approval of the Federal Reserve Board, and certain additional activities authorized by Federal Reserve Board regulations.

Federal law prohibits a savings and loan holding company, including Northwest Bancshares, Inc., directly or indirectly, or through one or more subsidiaries, from acquiring more than 5% of another savings institution or holding company thereof, without prior written approval of the Federal Reserve Board. It also prohibits, with certain exceptions, the acquisition or retention of more than 5% of a non-subsidiary company engaged in activities that are not closely related to banking or financial in nature, or acquiring or retaining control of an institution that is not federally insured. In evaluating applications by holding companies to acquire savings institutions, the Federal Reserve Board must consider, among other factors, the financial and managerial resources and future prospects of the company and institution involved, the effect of the acquisition on the risk to the federal deposit insurance fund, the convenience and needs of the community and competitive factors.

The Federal Reserve Board is prohibited from approving any acquisition that would result in a multiple savings and loan holding company controlling savings institutions in more than one state, subject to two exceptions:

(i) the approval of interstate supervisory acquisitions by savings and loan holding companies; and

(ii) the acquisition of a savings institution in another state if the laws of the state of the target savings institution specifically permit such acquisition.

The states vary in the extent to which they permit interstate savings and loan holding company acquisitions.

Qualified Thrift Lender Test. To be regulated as a savings and loan holding company (rather than as a bank holding company), Northwest Bank must qualify as a Qualified Thrift Lender. To qualify as a Qualified Thrift Lender, Northwest Bank must be a “domestic building and loan association,” as defined in the Internal Revenue Code, or comply with the Qualified Thrift Lender test. Under the Qualified Thrift Lender test, a savings institution is required to maintain at least 65% of its “portfolio assets” (total assets less: (1) specified liquid assets up to 20% of total assets; (2) intangibles, including goodwill; and (3) the value of property used to conduct business) in certain “qualified thrift investments” (primarily residential mortgages and related investments, including certain mortgage-backed and related securities) in at least nine months out of each 12-month period. As of December 31, 2017, Northwest Bank met the Qualified Thrift Lender test.

Capital Requirements. Savings and loan holding companies have not historically been subjected to consolidated regulatory capital requirements. However, the Dodd-Frank Act required the Federal Reserve Board to establish, for all depository institution holding companies, minimum consolidated capital levels that are as stringent as those required for the insured depository subsidiaries. The previously discussed final rule regarding regulatory capital requirements implements the Dodd-Frank Act as to savings and loan holding companies. Consolidated regulatory capital requirements identical to those applicable to the subsidiary depository institutions applied to savings and loan holding companies (of greater than $1 billion in consolidated assets), as of January 1, 2015. As is the case with institutions themselves, the capital conservation buffer is being phased in between 2016 and 2019.

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Source of Strength/ Capital Distributions. The Dodd-Frank Act extended to savings and loan holding companies the Federal Reserve Board’s “source of strength” doctrine, which has long applied to bank holding companies. The Federal Reserve Board has promulgated regulations implementing the “source of strength” policy, which requires holding companies to act as a source of strength to their subsidiary depository institutions by providing capital, liquidity and other support in times of financial stress.

The Federal Reserve Board has issued a policy statement regarding capital distributions by bank holding companies that it has made applicable to savings and loan holding companies as well. In general, the policy provides that dividends should be paid only out of current earnings and only if the prospective rate of earnings retention by the holding company appears consistent with the organization’s capital needs, asset quality and overall financial condition. The ability of a holding company to pay dividends may be restricted if a subsidiary depository institution becomes undercapitalized. Regulatory guidance provides for prior regulatory consultation with respect to dividends in certain circumstances, such as where the company’s net income for the past four quarters, net of dividends previously paid over that period, is insufficient to fully fund the dividend or the company’s overall rate of earnings retention is inconsistent with the company’s capital needs and overall financial condition. The guidance similarly provides for regulatory review of stock repurchases or redemptions under certain circumstances. These regulatory policies could affect our ability to pay dividends or otherwise engage in capital distributions, including stock repurchases.

As a subsidiary of a savings and loan holding company, Northwest Bank must notify the Federal Reserve Board thirty days before declaring any dividend to the Company. The dividend notice may be objected to under certain circumstances, such as where the dividend raises safety or soundness concerns, the dividend would cause the savings bank to be undercapitalized or the dividend would violate a law, regulation, regulatory condition or enforcement order.

Federal Securities Laws

Our common stock is registered with the SEC under Section 12(b) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). We are also subject to the proxy rules, tender offer rules, insider trading restrictions, annual and periodic reporting, and other requirements of the Exchange Act.

Sarbanes-Oxley Act of 2002

The Sarbanes-Oxley Act of 2002 was enacted to increase corporate responsibility, to provide for enhanced penalties for accounting and auditing improprieties at publicly traded companies, and to protect investors by improving the accuracy and reliability of corporate disclosures pursuant to the securities laws. The Sarbanes-Oxley Act generally applies to all companies that file or are required to file periodic reports with the Securities and Exchange Commission, under the Securities Exchange Act of 1934.

As directed by the Sarbanes-Oxley Act, our Chief Executive Officer and Chief Financial Officer are required to certify that our quarterly and annual reports do not contain any untrue statement of a material fact. The rules adopted by the Securities and Exchange Commission under the Sarbanes-Oxley Act have several requirements, including having these officers certify that: they are responsible for establishing, maintaining and regularly evaluating the effectiveness of our internal control over financial reporting; they have made certain disclosures to our auditors and the audit committee of the board of directors about our internal control over financial reporting; and they have included information in our quarterly and annual reports about their evaluation and whether there have been changes in our internal control over financial reporting or in other factors that could materially affect internal control over financial reporting.

FEDERAL AND STATE TAXATION

Federal Taxation.  For federal income tax purposes, Northwest Bancshares, Inc. files a consolidated federal income tax return with its wholly-owned subsidiaries on a calendar year basis. The applicable federal income tax expense or benefit is properly allocated to each subsidiary based upon taxable income or loss calculated on a separate company basis.

We account for income taxes using the asset and liability method which accounts for deferred income taxes by applying the enacted statutory rates in effect at the balance sheet date to differences between the book basis and the tax basis of assets and liabilities.  The resulting deferred tax liabilities and assets are adjusted to reflect changes in tax laws.

On December 22, 2017, H.R.1, commonly known as the Tax Cuts and Jobs Act (the “Act”), was signed into law. The Act includes many provisions that will affect our income tax expense, including reducing our federal tax rate from 35.0% to 21.0% effective January 1, 2018. As a result of the rate reduction, we are required to re-measure, through income tax expense in the period of enactment, our deferred tax assets and liabilities using the enacted rate at which we expect them to be recovered or settled. The re-measurement of our net deferred tax liability resulted in a 2017 income tax benefit of $3.1 million.

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State Taxation.  As a Maryland business corporation, Northwest Bancshares, Inc. is required to file annual tax returns with the State of Maryland.  In addition, Northwest Bancshares, Inc. is subject to Pennsylvania’s corporate net income tax.  Dividends received from Northwest Bank qualify for a 100% dividends received deduction and are not subject to corporate net income tax.

Northwest Bank is subject to Pennsylvania’s mutual thrift institutions tax based on Northwest Bank’s net income determined in accordance with generally accepted accounting principles, with certain adjustments.  The tax rate under the mutual thrift institutions tax is 11.5%.  Interest on Pennsylvania and federal obligations is excluded from net income.  An allocable portion of interest expense incurred to carry the tax-free obligations is disallowed as a deduction.  Northwest Bank is also subject to taxes in the other states in which it conducts business.  These taxes are apportioned based upon the volume of business conducted in those states as a percentage of the whole.  Because a majority of Northwest Bank’s affairs are conducted in Pennsylvania, taxes paid to other states are not material.

The subsidiaries of Northwest Bank are subject to a Pennsylvania corporate net income tax and are also subject to other applicable taxes in the states where they conduct business.

ITEM 1A.RISK FACTORS

In addition to factors discussed in the description of our business and elsewhere in this report, the following are factors that could adversely affect our future results of operations and financial condition.

A worsening of economic conditions in our market area could reduce demand for our products and services and/or result in increases in our level of non-performing loans, which could adversely affect our operations, financial condition and earnings.

Our performance is significantly impacted by the general economic conditions in our primary markets in Pennsylvania, New York and Ohio. At December 31, 2017, 59.7% of our loan portfolio was secured by properties located in Pennsylvania, with a large portion of the rest of our loans secured by real estate located in New York and Ohio. Local economic conditions have a significant impact on the ability of our borrowers to repay loans and the value of the collateral securing loans.

A deterioration in economic conditions could result in the following consequences, any of which could have a material adverse affect on our business, financial condition, liquidity and results of operations:

• demand for our products and services may decline;

• loan delinquencies, problem assets and foreclosures may increase;

• collateral for loans, especially real estate, may decline in value, in turn reducing customers’ future borrowing power, and reducing the value of assets and collateral associated with existing loans; and

• the net worth and liquidity of loan guarantors may decline, impairing their ability to honor commitments to us.

In addition, deflationary pressures, while possibly lowering our operating costs, could have a significant negative effect on our borrowers, especially our business borrowers, and the values of underlying collateral securing loans, which could negatively affect our financial performance.

Changes in laws and regulations and the cost of compliance with new laws and regulations may adversely affect our operations and our income.

The Company and Northwest Bank are subject to extensive regulation, supervision and examination by the Federal Reserve Board, the Department of Banking and the FDIC. These regulatory authorities have extensive discretion in connection with their supervisory and enforcement activities, including the ability to impose restrictions on Northwest Bank’s operations, reclassify assets, determine the adequacy of Northwest Bank’s allowance for loan losses and determine the level of deposit insurance premiums assessed. The laws and regulations applicable to us are subject to frequent change and interpretations. Any change in these regulations and oversight, whether in the form of regulatory policy, new regulations or legislation or additional deposit insurance premiums could have a material impact on our operations.

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The potential exists for additional federal or state laws and regulations, or changes in policy, affecting lending and funding practices and liquidity standards. Moreover, bank regulatory agencies have been active in responding to concerns and trends identified in examinations, and have issued many formal enforcement orders requiring capital ratios in excess of regulatory requirements. Bank regulatory agencies, such as the Federal Reserve Board, the Department of Banking, the Consumer Financial Protection Bureau and the FDIC, govern the activities in which we may engage, primarily for the protection of depositors, and not for the protection or benefit of potential investors. In addition, new laws and regulations may increase our costs of regulatory compliance and of doing business, and otherwise affect our operations. New laws and regulations may significantly affect the markets in which we do business, the markets for and value of our loans and investments, the fees we can charge and our ongoing operations, costs and profitability.

We have become subject to more stringent capital requirements, which may adversely impact our return on equity, require us to raise additional capital, or constrain us from paying dividends or repurchasing shares.

Final capital rules effective January 1, 2015 include new minimum risk-based capital and leverage ratios and refined the definition of what constitutes “capital” for purposes of calculating these ratios. The new minimum capital requirements are: (i) a new common equity Tier 1 capital ratio of 4.5%; (ii) a Tier 1 to risk-based assets capital ratio of 6% (increased from 4%); (iii) a total capital ratio of 8% (unchanged from current rules); and (iv) a Tier 1 leverage ratio of 4%. The final rule also establishes a “capital conservation buffer” of 2.5%, and will result in the following minimum ratios: (i) a common equity Tier 1 capital ratio of 7.0%, (ii) a Tier 1 to risk-based assets capital ratio of 8.5%, and (iii) a total capital ratio of 10.5%. The new capital conservation buffer requirement is being phased in beginning in January 2016 at 0.625% of risk-weighted assets and would increase each year until fully implemented in January 2019. An institution will be subject to limitations on paying dividends, engaging in share repurchases, and paying discretionary bonuses if its capital level falls below the buffer amount. These limitations will establish a maximum percentage of eligible retained income that can be utilized for such actions.

The application of more stringent capital requirements for Northwest Bank could, among other things, result in lower returns on equity, require the raising of additional capital, and result in regulatory actions constraining us from paying dividends or repurchasing shares if we were to be unable to comply with such requirements.

The corporate governance provisions in our articles of incorporation and bylaws, and the corporate governance provisions under Maryland law, may prevent or impede the holders of our common stock from obtaining representation on our Board of Directors and may impede takeovers of the Company that our board might conclude are not in the best interest of us or our stockholders.

Provisions in our articles of incorporation and bylaws may prevent or impede holders of our common stock from obtaining representation on our Board of Directors and may make takeovers of Northwest Bancshares, Inc. more difficult. As a result, our stockholders may not have the opportunity to participate in such a transaction, which could provide a premium over the prevailing price of our common stock. The provisions that may discourage takeover attempts or make them more difficult include that our Board of Directors is divided into three staggered classes. A classified board makes it more difficult for stockholders to change a majority of the directors because it generally takes at least two annual elections of directors for this to occur. Our articles of incorporation include a provision that no person will be entitled to vote any shares of our common stock in excess of 10% of our outstanding shares of common stock. This limitation does not apply to the purchase of shares by a tax-qualified employee stock benefit plan established by us. In addition, our articles of incorporation and bylaws restrict who may call special meetings of stockholders and how directors may be removed from office. Additionally, in certain instances, the Maryland General Corporation Law requires a supermajority vote of our stockholders to approve a merger or other business combination with a large stockholder, if the proposed transaction is not approved by a majority of our directors.

Changes in interest rates could adversely affect our results of operations and financial condition.

While we strive to control the impact of changes in interest rates on our net income, our results of operations and financial condition could be significantly affected by changes in interest rates. Our results of operations depend substantially on our net interest income, which is the difference between the interest income we earn on our interest-earning assets, such as loans and investment securities, and the interest expense we pay on our interest-bearing liabilities, such as deposits, borrowings and trust preferred securities. Because it is difficult to perfectly match the maturities and cash flows from our financial assets and liabilities our net income could be adversely impacted by changes in the level of interest rates or the slope of the Treasury yield curve.

Changes in interest rates may also affect the average life of loans and mortgage-related securities. Decreases in interest rates can result in increased prepayments of loans and mortgage-related securities, as borrowers refinance to reduce their borrowing costs. Under these circumstances, we are subject to reinvestment risk to the extent that we are unable to reinvest the cash received from such prepayments at rates that are comparable to the rates on existing loans and investment securities. Additionally, increases in interest rates may decrease loan demand and make it more difficult for borrowers to repay adjustable rate loans. Also, increases

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in interest rates may extend the life of fixed rate assets, which would restrict our ability to reinvest in higher yielding alternatives, and may result in customers withdrawing certificates of deposit early so long as the early withdrawal penalty is less than the interest they could receive as a result of the higher interest rates.

Changes in interest rates also affect the current fair value of our interest-earning investment securities portfolio. Generally, the value of securities moves inversely with changes in interest rates. At December 31, 2017, the fair value of our investment and mortgage-backed securities portfolio totaled $822.2 million. Net unrealized losses on these securities totaled $7.6 million at December 31, 2017.

Any increase in market interest rates may reduce our mortgage banking income. We generate revenues primarily from gains on the sale of mortgage loans to investors, and from the amortization of deferred mortgage servicing rights. We recognized noninterest income of $1.4 million on mortgage banking activities during the year ended December 31, 2017. We also earn interest on loans held for sale while awaiting delivery to our investors.  In a rising or higher interest rate environment, our mortgage loan originations may decrease, resulting in fewer loans that are available for sale. This would result in a decrease in interest income and a decrease in revenues from loan sales. In addition, our results of operations are affected by the amount of noninterest expense associated with mortgage banking activities, such as salaries and employee benefits, occupancy, equipment, data processing and other operating costs. During periods of reduced loan demand, our results of operations may be adversely affected to the extent that we are unable to reduce expenses commensurate with the decline in mortgage loan origination activity.

At December 31, 2017, our interest rate risk analysis indicated that the market value of our equity would decrease by 7.3% if there was an instant parallel 200 basis point increase in market interest rates. See “Item 7A. Quantitative and Qualitative Disclosures About Market Risk.”

We are a community bank and our ability to maintain our reputation is critical to the success of our business and the failure to do so may materially adversely affect our performance.

We are a community bank, and our reputation is one of the most valuable components of our business. A key component of our business strategy is to rely on our reputation for customer service and knowledge of local markets to expand our presence by capturing new business opportunities from existing and prospective customers in our current market and contiguous areas. As such, we strive to conduct our business in a manner that enhances our reputation. This is done, in part, by recruiting, hiring and retaining employees who share our core values of being an integral part of the communities we serve, delivering superior service to our customers and caring about our customers and associates. If our reputation is negatively affected, by the actions of our employees, by our inability to conduct our operations in a manner that is appealing to current or prospective customers, or otherwise, our business and operating results may be adversely affected.

If the allowance for loan losses is not sufficient to cover actual loan losses, our earnings could decrease.

Our customers may not repay their loans according to the original terms, and the collateral, if any, securing the payment of these loans may be insufficient to pay any remaining loan balance. We may experience significant loan losses, which may have a material adverse effect on operating results. We make various assumptions and judgments about the collectability of the loan portfolio, including the creditworthiness of borrowers and the value of the real estate and other assets serving as collateral for the repayment of loans. If our assumptions prove to be incorrect, the allowance for loan losses may not be sufficient to cover losses inherent in our loan portfolio, resulting in additions to the allowance. Material additions to the allowance would materially decrease net income.

Our emphasis on originating commercial real estate and commercial loans is one of the more significant factors in evaluating the allowance for loan losses. As we continue to increase the amount of such loans, increased provisions for loan losses may be necessary, which would decrease our earnings.

The FASB has adopted a new accounting standard that will be effective for our first fiscal year after December 15, 2019. This standard, referred to as Current Expected Credit Loss ("CECL"), will require financial institutions to determine periodic estimates of lifetime expected credit losses on loans, and recognize the expected credit losses as allowances for loan losses. This will change the current method of providing allowances for loan losses that are probable, which may require us to increase our allowance for loan losses, and to greatly increase the types of data we would need to collect and review to determine the appropriate level of the allowance for loan losses. We are currently evaluating the impact this standard will have on our results of operations and financial position.

Bank regulators periodically review our allowance for loan losses and may require an increase to the provision for loan losses or further loan charge-offs. Any increase in our allowance for loan losses or loan charge-offs as required by these regulatory authorities may have a material adverse effect on our results of operations or financial condition.

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Our commercial loan portfolio is increasing and the inherently higher risk of loss may lead to additional provisions for loan losses or charge-offs, which would negatively impact earnings and capital.

Commercial loans generally expose a lender to greater risk of non-payment and loss than one- to four-family residential mortgage loans because repayment of the loans often depends on the successful operation of the business and the income stream of the borrowers.  Such loans typically involve larger loan balances to single borrowers or groups of related borrowers compared to one- to four-family residential mortgage loans.  Also, many of our commercial borrowers have more than one loan outstanding with us.  Consequently, an adverse development with respect to one loan or one credit relationship can expose us to a significantly greater risk of loss compared to an adverse development with respect to a one- to four-family residential mortgage loan.  Commercial business loans expose us to additional risk since they typically are dependent on the borrower’s ability to make repayments from the cash flows of the business and are secured by non-real estate collateral that may depreciate over time.  Further, our commercial business loans may be secured by collateral other than real estate, such as inventory and accounts receivable, the value of which may be more difficult to appraise, control or collect and may be more susceptible to fluctuation in value at the time of default.

We could record future losses on our investment securities portfolio.

A number of factors or combinations of factors could require us to conclude in one or more future reporting periods that an unrealized loss that exists with respect to these and other securities constitutes an impairment that is other-than-temporary, which could result in material losses to us. These factors include, but are not limited to, failure by the issuer to make scheduled interest payments, an increase in the severity of the unrealized loss on a particular security, an increase in the continuous duration of the unrealized loss without an improvement in value or changes in market conditions and/or industry or issuer specific factors that would render us unable to forecast a full recovery in value. In addition, the fair values of securities could decline if the overall economy and the financial condition of some of the issuers deteriorates and there remains limited liquidity for these securities.

See “Item 7 Management’s Discussion and Analysis of Financial Condition and Results of Operations-Balance Sheet Analysis-Securities” for a discussion of our securities portfolio and the unrealized losses related to the portfolio, as well as the “Marketable Securities” and “Disclosures about Fair Value of Financial Instruments” footnotes to the audited financial statements.

Non-compliance with the USA PATRIOT Act, Bank Secrecy Act, or other laws and regulations could result in fines or sanctions.

The USA PATRIOT and Bank Secrecy Acts require financial institutions to develop programs to prevent financial institutions from being used for money laundering and terrorist activities. If such activities are detected, financial institutions are obligated to file suspicious activity reports with the U.S. Treasury’s Office of Financial Crimes Enforcement Network. These rules require financial institutions to establish procedures for identifying and verifying the identity of customers seeking to open new financial accounts. Failure to comply with these regulations could result in fines or sanctions or affect our ability to pursue further acquisition opportunities. During the last year, several banking institutions have received large fines for non-compliance with these laws and regulations. While we have developed policies and procedures designed to assist in compliance with these laws and regulations, these policies and procedures may not be effective in preventing violations of these laws and regulations.

We are subject to the Community Reinvestment Act and fair lending laws, and failure to comply with these laws could lead to material penalties.

The Community Reinvestment Act (“CRA”), the Equal Credit Opportunity Act, the Fair Housing Act and other fair lending laws and regulations impose nondiscriminatory lending requirements on financial institutions. A successful regulatory challenge to an institution’s performance under the CRA or fair lending laws and regulations could result in a wide variety of sanctions, including the required payment of damages and civil money penalties, injunctive relief, imposition of restrictions on mergers and acquisitions activity and restrictions on expansion. Private parties may also have the ability to challenge an institution’s performance under fair lending laws in private class action litigation. Such actions could have a material adverse effect on our business, financial condition and results of operations.

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The Federal Reserve Board may require us to commit capital resources to support Northwest Bank.

Federal law requires that a holding company act as a source of financial and managerial strength to its subsidiary bank and to commit resources to support such subsidiary bank. Under the “source of strength” doctrine, the Federal Reserve Board may require a holding company to make capital injections into a troubled subsidiary bank and may charge the holding company with engaging in unsafe and unsound practices for failure to commit resources to a subsidiary bank. A capital injection may be required at times when the holding company may not have the resources to provide it and therefore may be required to borrow the funds or raise capital. Any loans by a holding company to its subsidiary bank are subordinate in right of payment to deposits and to certain other indebtedness of such subsidiary bank. In the event of a holding company’s bankruptcy, the bankruptcy trustee will assume any commitment by the holding company to a federal bank regulatory agency to maintain the capital of a subsidiary bank. Moreover, bankruptcy law provides that claims based on any such commitment will be entitled to a priority of payment over the claims of the institution’s general unsecured creditors, including the holders of its note obligations. Thus, any borrowing that must be done by the Company to make a required capital injection becomes more difficult and expensive and could have an adverse effect on our business, financial condition and results of operations.

If our intangible assets, including goodwill, are either partially or fully impaired in the future, it would decrease earnings.

We are required to test our goodwill and other identifiable intangible assets for impairment on an annual basis and more regularly if indicators of impairment exist. The impairment testing process considers a variety of factors, including the current market price of our common stock, the estimated net present value of our assets and liabilities and information concerning the terminal valuation of similar insured depository institutions. Future impairment testing may result in a partial or full impairment of the value of our goodwill or other identifiable intangible assets, or both. If an impairment determination is made in a future reporting period, our earnings and the book value of these intangible assets will be reduced by the amount of the impairment. However, the recording of such an impairment loss would have no impact on the tangible book value of our shares of common stock or our regulatory capital levels.

Strong competition may limit growth and profitability.

Competition in the banking and financial services industry is intense. We compete with commercial banks, savings institutions, mortgage brokerage firms, credit unions, finance companies, fintech companies, mutual funds, insurance companies, and brokerage and investment banking firms operating locally and elsewhere. Many of these competitors (whether regional or national institutions) have substantially greater resources and lending limits than we have and may offer certain services that we do not or cannot provide. In addition, some have competitive advantages such as the credit union exemption from paying Federal income tax. Our profitability depends upon our ability to successfully compete in our market areas.

Future legislative or regulatory actions responding to perceived financial and market problems could impair our ability to foreclose on collateral.

There have been proposals made by members of Congress and others that would reduce the amount distressed borrowers are otherwise contractually obligated to pay under their mortgage loans and limit an institution’s ability to foreclose on mortgage collateral. Were proposals such as these, or other proposals limiting our rights as a creditor, to be implemented, we could experience increased credit losses or increased expense in pursuing our remedies as a creditor.

Legal and regulatory proceedings and related matters could adversely affect us or the financial services industry in general.

We, and other participants in the financial services industry upon whom we rely to operate, have been and may in the future become involved in legal and regulatory proceedings. Most of the proceedings we consider to be in the normal course of our business or typical for the industry; however, it is inherently difficult to assess the outcome of these matters, and other participants in the financial services industry or we may not prevail in any proceeding or litigation. There could be substantial cost and management diversion in such litigation and proceedings, and any adverse determination could have a materially adverse effect on our business, brand or image, or our financial condition and results of our operations.

Monetary policies and regulations of the Federal Reserve Board could adversely affect our business, financial condition and results of operations.

In addition to being affected by general economic conditions, our earnings and growth are affected by the policies of the Federal Reserve Board. An important function of the Federal Reserve Board is to regulate the money supply and credit conditions. Among the instruments used by the Federal Reserve Board to implement these objectives are open market purchases and sales of U.S. government securities, adjustments of the discount rate and changes in banks’ reserve requirements against bank deposits.

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These instruments are used in varying combinations to influence overall economic growth and the distribution of credit, bank loans, investments and deposits. Their use also affects interest rates charged on loans or paid on deposits.

The monetary policies and regulations of the Federal Reserve Board have had a significant effect on the operating results of financial institutions in the past and are expected to continue to do so in the future. The effects of such policies upon our business, financial condition and results of operations cannot be predicted.

Our exposure to municipalities may lead to operating losses.

Our municipal bond portfolio may be impacted by the effects of economic stress on state and local governments. At December 31, 2017, we had $51.0 million invested in debt obligations of states, municipalities and political subdivisions (collectively referred to as our municipal bond portfolio). We also had $157.2 million of loans outstanding to municipalities and political subdivisions. Widespread concern currently exists regarding the stress on state and local governments emanating from: (i) declining revenues; (ii) large unfunded liabilities to government workers; and (iii) entrenched cost structures. Debt-to-gross domestic product ratios for the majority of states have been deteriorating due to, among other factors, declines in federal monetary assistance provided as the United States is currently experiencing the largest deficit in its history. This concern has led to speculation about the potential for a significant deterioration in the municipal bond market, which could materially affect our results of operations, financial condition and liquidity. We may not be able to mitigate the exposure in our municipal portfolio if state and local governments are unable to fulfill their obligations. The risk of widespread issuer defaults may also increase if there are changes in legislation that permit states, or additional municipalities and political subdivisions, to file for bankruptcy protection or if there are judicial interpretations that, in a bankruptcy or other proceeding, lessen the value of any structural protections.

The financial services sector represents a significant concentration within our investment portfolio.

Within our investment portfolio, we have a significant amount of corporate debt and mortgage-backed securities issued by companies in the financial services sector. Given current market conditions, this sector has an enhanced level of credit risk.

Risks associated with system failures, interruptions, or breaches of security could negatively affect our earnings.

Information technology systems are critical to our business.  We use various technology systems to manage our customer relationships, general ledger, deposits, and loans.  We have established policies and procedures to prevent or limit the impact of system failures, interruptions, and security breaches, but such events may still occur or may not be adequately addressed if they do occur.  In addition, any compromise of our systems could deter customers from using our products and services.  Although we rely on security systems to provide security and authentication necessary to effect the secure transmission of data, these precautions may not protect our systems from compromises or breaches of security.

Our business is subject to the Gramm-Leach-Bliley Act which, among other things: (i) imposes certain limitations on our ability to share nonpublic personal information about our customers with nonaffiliated third parties; (ii) requires that we provide certain disclosures to customers about our information collection, sharing and security practices and afford customers the right to “opt out” of any information sharing by us with nonaffiliated third parties (with certain exceptions); and (iii) requires that we develop, implement and maintain a written comprehensive information security program containing appropriate safeguards based on our size and complexity, the nature and scope of our activities, and the sensitivity of customer information we process, as well as plans for responding to data security breaches. Ensuring that our collection, use, transfer and storage of personal information complies with all applicable laws and regulations can increase our costs. Despite the defensive measures we take to manage our internal technological and operational infrastructure, threats may originate externally from third parties such as foreign governments, organized crime and other hackers, and outsource or infrastructure-support providers and application developers, or may originate internally from within our organization. Furthermore, we may not be able to ensure that all of our clients, suppliers, counterparties and other third parties have appropriate controls in place to protect the confidentiality of the information that they exchange with us, particularly where such information is transmitted by electronic means.

In addition, we outsource a significant amount of our data processing to certain third-party providers.  If these third-party providers encounter difficulties, or if we have difficulty communicating with them, our ability to adequately process and account for transactions could be affected, and our business operations could be adversely affected.  Threats to information security also exist in the processing of customer information through various other vendors and their personnel.

The occurrence of any system failures, interruption, or breach of security could damage our reputation and result in a loss of customers and business, could subject us to additional regulatory scrutiny, or could expose us to litigation and possible financial liability.  Any of these events could have a material adverse effect on our financial condition and results of operations.

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Our risk management framework may not be effective in mitigating risk and reducing the potential for significant losses.

Our risk management framework is designed to minimize risk and loss to us. We seek to identify, measure, monitor, report and control our exposure to risk, including strategic, market, liquidity, credit, interest rate, compliance and operational risks. While we use a broad and diversified set of risk monitoring and mitigation techniques, these techniques are inherently limited because they cannot anticipate the existence or future development of currently unanticipated or unknown risks. Recent economic conditions and heightened legislative and regulatory scrutiny of the financial services industry, among other developments, have increased our level of risk. Accordingly, we could suffer losses as a result of our failure to properly anticipate and manage these risks.

Our business may be adversely affected by an increasing prevalence of fraud and other financial crimes.

Our loans to businesses and individuals and our deposit relationships and related transactions are subject to exposure to the risk of loss due to fraud and other financial crimes.  Nationally, reported incidents of fraud and other financial crimes have increased.  We have also experienced losses due to apparent fraud and other financial crimes.  While we have policies and procedures designed to prevent such losses, losses may still occur.

Acquisitions may disrupt our business and dilute stockholder value.

We regularly evaluate merger and acquisition opportunities with other financial institutions and financial services companies. As a result, negotiations may take place and future mergers or acquisitions involving cash, debt, or equity securities may occur at any time. We would seek acquisition partners that offer us either significant market presence or the potential to expand our market footprint and improve profitability through economies of scale or expanded services.

     Acquiring other banks, businesses, or branches may have an adverse effect on our financial results and may involve various other risks commonly associated with acquisitions, including, among other things:

• difficulty in estimating the value of the target company;

• payment of a premium over book and market values that may dilute our tangible book value and earnings per share in the short and long term;

• potential exposure to unknown or contingent liabilities of the target company;

• exposure to potential asset quality problems of the target company;

• potential volatility in reported income associated with goodwill impairment losses;

• difficulty and expense of integrating the operations and personnel of the target company;

• inability to realize the expected revenue increases, cost savings, increases in geographic or product presence, and/ or other projected benefits of the acquisition;

• potential disruption to our business;

• potential diversion of our management’s time and attention;

• the possible loss of key employees and customers of the target company; and

• potential changes in banking or tax laws or regulations that may affect the target company.

Acquisitions may not enhance our cash flows, business, financial condition, results of operations or prospects as expected and such acquisitions may have an adverse effect on our results of operations, particularly during periods in which the acquisitions are being integrated into our operations.

Our continued pace of growth may require us to raise additional capital in the future, but that capital may not be available when it is needed.

We are required by federal regulatory authorities to maintain adequate levels of capital to support our operations.  We anticipate that we will have sufficient capital resources to satisfy our capital requirements for the foreseeable future.  We may at some point, however, need to raise additional capital to support our continued growth.  If we raise capital through the issuance of additional shares of our common stock or other securities, it would dilute the ownership interests of existing stockholders and may dilute the per share book value of our common stock.  New investors may also have rights, preferences and privileges senior to our current stockholders, which may adversely impact our current stockholders.  Also, the need to raise additional capital may force our management to spend more time in managerial and financing-related activities than in operational activities.

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Our ability to raise additional capital, if needed, will depend on conditions in the capital markets at that time, which are outside of our control, and on our financial performance.  Accordingly, we may not be able to raise additional capital, if needed, with favorable terms.  If we cannot raise additional capital when needed, our ability to further expand our operations through internal growth and acquisitions could be materially impaired.

Provisions of the Dodd-Frank Act that are applicable to savings banks and their holding companies with $10 billion or more in assets may decrease our fee income and increase our operating costs or otherwise have a material effect on our business, financial condition or results of operations.

The Dodd-Frank Act resulted in several new requirements for banking institutions with $10 billion or more in assets. As of December 31, 2017, we had consolidated assets of $9.364 billion. If we surpass this threshold, these provisions, subject to a phase-in period, may significantly increase our compliance or operating costs or otherwise have a significant impact on our business, financial condition and results of operations. Such provisions include:

• The Dodd-Frank Act created the Consumer Financial Protection Bureau (the “CFPB”), which has broad powers to supervise and enforce consumer protection laws. The CFPB has broad rule-making authority for a wide range of consumer protection laws that apply to all banks, including the authority to prohibit “unfair, deceptive or abusive” acts and practices. Currently, the Pennsylvania Department of Banking and the FDIC examine Northwest Bank for compliance with consumer protection laws. However, the CFPB has examination and enforcement authority over all banks with more than $10 billion in assets, and accordingly would assume examination and enforcement authority over us in the event our consolidated assets exceed $10 billion in the future.

• Interchange fees for electronic debt transactions by a payment card issuer would be limited to $0.21 plus five basis points times the value of the transaction, plus up to $0.01 for fraud prevention costs. This would lower significantly our interchange or “swipe” revenue. Currently, we estimate this decrease in interchange fee income to be approximately $8.0 million, before tax.

• The Dodd-Frank Act established 1.35% as the minimum Deposit Insurance Fund reserve ratio and the FDIC has adopted a plan under which it will meet the statutory minimum fund reserve ratio of 1.35% by September 30, 2020. The Dodd-Frank Act requires the FDIC to offset the effect of the increase in the statutory minimum fund reserve ratio to 1.35% from the former statutory minimum of 1.15% on institutions with assets less than $10 billion. We would not be entitled to benefit from the offset.

• The Dodd-Frank Act requires a publicly traded savings and loan holding company with $10 billion or more in assets to establish and maintain a risk committee responsible for oversight of enterprise-wide risk management practices, which must be commensurate with the bank’s structure, risk profile, complexity, activities and size.

• A savings and loan holding company with more than $10 billion in assets is required under the Dodd-Frank Act to conduct annual stress tests to determine whether the capital planning of the combined company, assessment of its capital adequacy and risk management practices adequately protect it and its affiliates in the event of an economic downturn. A company is required to report the results of its annual stress tests to the Federal Reserve Board, and is required to consider the results of the stress tests as part of its capital planning and risk management practices. In advance of the date a company is subject to the DFAST regime, the company needs to undertake the planning and other actions that it deems reasonably necessary to achieve timely compliance. Currently, we estimate this additional cost to be approximately $3.0 million, before tax.

It is difficult to predict the overall compliance cost of these provisions. However, compliance with these provisions would likely require additional staffing, engagement of external consultants and other operating costs that could have a material adverse effect on our future financial condition and results of operations.

Our business strategy includes growth, and our financial condition and results of operations could be negatively affected if we fail to grow or fail to manage our growth effectively.

Our business strategy includes growth in assets, deposits and the scale of our operations. Achieving our growth targets will require us to attract customers that currently bank at other financial institutions in our market, thereby increasing our share of the market. Our ability to successfully grow will depend on a variety of factors, including our ability to attract and retain experienced bankers, the continued availability of desirable business opportunities, the competitive responses from other financial institutions in our market area and our ability to manage our growth. Growth opportunities may not be available or we may not be able to manage our growth successfully. If we do not manage our growth effectively, our financial condition and operating results could be negatively affected.

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Our funding sources may prove insufficient to replace deposits at maturity and support our future growth.

We must maintain sufficient funds to respond to the needs of depositors and borrowers. As a part of our liquidity management, we use a number of funding sources in addition to core deposit growth and repayments and maturities of loans and investments. As we continue to grow, we are likely to become more dependent on these sources, which may include Federal Home Loan Bank advances, proceeds from the sale of loans, federal funds purchased and brokered certificates of deposit. Adverse operating results or changes in industry conditions could lead to difficulty or an inability to access these additional funding sources. Our financial flexibility will be severely constrained if we are unable to maintain our access to funding or if adequate financing is not available to accommodate future growth at acceptable interest rates. If we are required to rely more heavily on more expensive funding sources to support future growth, our revenues may not increase proportionately to cover our costs. In this case, our operating margins and profitability would be adversely affected.

Changes in card network rules or standards could adversely affect our business.

In order to provide our debit card and cash management solutions, we are members of the Visa network. As such, we are subject to card network rules that could subject us to a variety of fines or penalties that may be assessed on us. The termination of our membership or any changes in card network rules or standards, including interpretation and implementation of existing rules or standards, could increase the cost of operating our merchant services business or limit our ability to provide debit card and cash management solutions to or through our customers, and could have a material adverse effect on our business, financial condition and results of operations.

Changes in card network fees could impact our operations.

From time to time, the card networks increase the fees (known as interchange fees) that they charge to acquirers and that we charge to our merchants. It is possible that competitive pressures will result in us absorbing a portion of such increases in the future, which would increase our costs, reduce our profit margin and adversely affect our business and financial condition. In addition, the card networks require certain capital requirements. An increase in the required capital level would further limit our use of capital for other purposes.

Our business could suffer if there is a decline in the use of debit cards as a payment mechanism or if there are adverse developments with respect to the financial services industry in general.

As the financial services industry evolves, consumers may find debit financial services to be less attractive than traditional or other financial services. Consumers might not use debit card financial services for any number of reasons, including the general perception of our industry. If consumers do not continue or increase their usage of debit cards, including making changes in the way debit cards are loaded, our operating revenues and debit card deposits may remain at current levels or decline. Any projected growth for the industry may not occur or may occur more slowly than estimated. If consumer acceptance of debit financial services does not continue to develop or develops more slowly than expected or if there is a shift in the mix of payment forms, such as cash, credit cards, traditional debit cards and debit cards, away from our products and services, it could have a material adverse effect on our financial position and results of operations.

Changes in management’s estimates and assumptions may have a material impact on our consolidated financial statements and our financial condition or operating results.

In preparing this annual report as well as periodic reports we are required to file under the Securities Exchange Act of 1934, including our consolidated financial statements, our management is and will be required under applicable rules and regulations to make estimates and assumptions as of a specified date. These estimates and assumptions are based on management’s best estimates and experience as of that date and are subject to substantial risk and uncertainty. Materially different results may occur as circumstances change and additional information becomes known. Areas requiring significant estimates and assumptions by management include our valuation of investment securities, our determination of our income tax provision and goodwill, and our evaluation of the adequacy of our allowance for loan losses.

We could be adversely affected by the soundness of other financial institutions and other third parties we rely on.

Financial services institutions are interrelated as a result of trading, clearing, counterparty or other relationships. We have exposure to many different industries and counterparties, and routinely execute transactions with counterparties in the financial services industry, including commercial banks, brokers and dealers, investment banks and other institutional customers. Many of these transactions expose us to credit risk in the event of a default by a counterparty or client. In addition, our credit risk may be exacerbated when our collateral cannot be foreclosed upon or is liquidated at prices not sufficient to recover the full amount of the credit or derivative exposure due. Furthermore, successful operation of our debit card and cash management solutions business

23

depends on the soundness of third party processors, clearing agents and others that we rely on to conduct our merchant business. Any losses resulting from such third parties could adversely affect our business, financial condition and results of operations.

We are subject to environmental liability risk associated with lending activities.

A significant portion of our loan portfolio is secured by real estate, and we could become subject to environmental liabilities with respect to one or more of these properties. During the ordinary course of business, we may foreclose on and take title to properties securing defaulted loans. In doing so, there is a risk that hazardous or toxic substances could be found on these properties. If hazardous conditions or toxic substances are found on these properties, we may be liable for remediation costs, as well as for personal injury and property damage, civil fines and criminal penalties regardless of when the hazardous conditions or toxic substances first affected any particular property. Environmental laws may require us to incur substantial expenses to address unknown liabilities and may materially reduce the affected property’s value or limit our ability to use or sell the affected property. In addition, future laws or more stringent interpretations or enforcement policies with respect to existing laws may increase our exposure to environmental liability. Although we have policies and procedures to perform an environmental review before initiating any foreclosure action on nonresidential real property, these reviews may not be sufficient to detect all potential environmental hazards. The remediation costs and any other financial liabilities associated with an environmental hazard could have a material adverse effect on us.

ITEM 1B.UNRESOLVED STAFF COMMENTS

Not applicable.

ITEM 2.PROPERTIES

As of December 31, 2017, we conducted our business through our main office located in Warren, Pennsylvania, 106 other full-service offices and seven free-standing drive-though locations throughout our market area in central and western Pennsylvania, 34 full-service offices and two free-standing drive-through location in western New York and 21 full-service offices and one free-standing drive-through location in eastern Ohio. At December 31, 2017, our premises and equipment had an aggregate net book value of approximately $151.9 million. 

ITEM 3.LEGAL PROCEEDINGS

Northwest Bancshares, Inc. and its subsidiaries are subject to various legal actions arising in the normal course of business.  In the opinion of management, the resolution of these legal actions is not expected to have a material adverse effect on our financial condition and/or results of operations. See note 18 in the notes to the Consolidated Financial Statements.

ITEM 4.MINE SAFETY DISCLOSURES

Not applicable.

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PART II

ITEM 5.MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

Our common stock is listed on the Nasdaq Global Select Market under the symbol “NWBI.” As of February 16, 2018, we had 19 registered market makers, 13,142 stockholders of record (excluding the number of persons or entities holding stock in street name through various brokerage firms), and 102,549,072 shares outstanding. The following table sets forth market price and dividend information for our common stock.

Year ended December 31, 2017	High		Low		Cash dividends declared
First Quarter	$	18.63	$	16.21	$	0.16
Second Quarter	$	17.39	$	14.95	$	0.16
Third Quarter	$	17.41	$	15.06	$	0.16
Fourth Quarter	$	17.78	$	15.34	$	0.16

Year ended December 31, 2016	High		Low		Cash dividends declared
First Quarter	$	13.71	$	11.78	$	0.15
Second Quarter	$	14.89	$	13.09	$	0.15
Third Quarter	$	15.75	$	14.47	$	0.15
Fourth Quarter	$	19.10	$	15.26	$	0.15

Payment of dividends on our shares of common stock is subject to determination and declaration by the Board of Directors and will depend upon a number of factors, including capital requirements, regulatory limitations on the payment of dividends, our results of operations and financial condition, tax considerations and general economic conditions. No assurance can be given that dividends will continue to be declared or, if declared, what the amount of dividends will be. See Item 1. Business “Supervision and Regulation — Holding Company Regulation — Source of Strength/ Capital Distributions” for additional information regarding our ability to pay dividends.

There were no sales of unregistered securities during the quarter ended December 31, 2017.

The following table discloses information regarding the repurchase of shares of common stock during the quarter ended December 31, 2017, and authorized by the repurchase program announced on December 13, 2012, which is for approximately 5,000,000 shares and does not have an expiration date. Amounts are not in thousands.

Month	Number of shares  purchased	Average price paid per share		Total number of shares purchased as part of a publicly announced repurchase plan	Maximum number of shares yet to be purchased under the plan
October	—	$	—	—	4,834,089
November	—	—		—	4,834,089
December	—	—		—	4,834,089
	—	—

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Stock Performance Graph

Set forth hereunder is a stock performance graph comparing (a) the cumulative total return on our Common Stock between December 31, 2012 and December 31, 2017, (b) the cumulative total return on stocks included in the Total Return Index for the Nasdaq Stock Market (US) over such period, and (c) the cumulative total return on stocks included in the Nasdaq Bank Index over such period.  Cumulative return assumes the reinvestment of dividends, and is expressed in dollars based on an assumed investment of $100. 

There can be no assurance that our stock performance will continue in the future with the same or similar trend depicted in the graph.  We will not make or endorse any predictions as to future stock performance.

COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN*

 Among Northwest Bancshares, Inc., the NASDAQ Composite Index, and the NASDAQ Bank Index

*$100 invested on 12/31/2012 in stock or index, including reinvestment of dividends.

Fiscal year ending December 31.

	12/31/2012	12/31/2013	12/31/2014	12/31/2015	12/31/2016	12/31/2017
Northwest Bancshares, Inc.	100.00	126.43	120.64	134.78	189.48	182.78
NASDAQ Composite	100.00	141.63	162.09	173.33	187.19	242.29
NASDAQ Bank	100.00	140.76	146.90	157.63	216.24	227.94

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ITEM 6.                SELECTED FINANCIAL DATA

Selected Financial and Other Data

The summary financial information presented below is derived in part from the Company’s consolidated financial statements.  The following is only a summary and should be read in conjunction with the consolidated financial statements and notes included elsewhere in this document.  The information at December 31, 2017 and 2016 and for the years ended December 31, 2017, 2016 and 2015 is derived in part from the audited consolidated financial statements that appear in this document.  The information at December 31, 2015, 2014 and 2013, and for the years ended December 31, 2014 and 2013, is derived in part from audited consolidated financial statements that do not appear in this document.

	At December 31,
	2017		2016	2015	2014	2013
	(In thousands)
Selected Consolidated Financial Data:
Total assets	$	9,363,934	9,623,640	8,951,899	7,775,033	7,879,859
Investment securities held-to-maturity	—		4,808	6,610	66,752	69,316
Investment securities available-for-sale	261,809		378,666	395,688	427,259	439,693
Mortgage-backed securities held-to-maturity	29,678		15,170	25,079	36,943	52,050
Mortgage-backed securities available-for-sale	530,726		447,534	478,717	485,112	577,074
Loans receivable net of allowance for loan losses:
Residential mortgage loans	2,772,248		2,693,439	2,717,385	2,494,724	2,451,674
Home equity	1,305,521		1,340,837	1,201,861	1,082,732	1,100,149
Consumer loans	658,056		634,334	512,691	236,626	222,861
Commercial real estate loans	2,431,266		2,315,414	2,317,647	1,767,795	1,597,308
Commercial loans	569,523		512,384	409,865	344,861	367,613
Total loans receivable, net (1)	7,736,614		7,496,408	7,159,449	5,922,373	5,734,943
Deposits	7,826,989		7,882,321	6,612,581	5,632,542	5,668,879
Borrowed funds	108,238		142,899	975,007	888,109	881,645
Shareholders’ equity	1,207,724		1,170,663	1,163,163	1,062,647	1,155,185

(1) Total includes unallocated allowance for loan losses of $4.4 million and $4.7 million for December 31, 2014 and 2013, respectively.

	For the year ended December 31,
	2017		2016	2015	2014	2013
	(In thousands except per share data)
Selected Consolidated Operating Data:
Total interest income	$	358,856	345,634	319,580	305,427	313,097
Total interest expense	28,071		38,299	56,327	56,587	61,162
Net interest income	330,785		307,335	263,253	248,840	251,935
Provision for loan losses	19,751		13,542	9,712	20,314	18,519
Net interest income after provision for loan losses	311,034		293,793	253,541	228,526	233,416
Noninterest income	110,480		85,360	68,836	70,766	66,476
Noninterest expense	285,603		307,838	233,877	215,535	207,134
Income before income tax expense	135,911		71,315	88,500	83,757	92,758
Income tax expense	41,444		21,648	27,960	21,795	26,199
Net income	$	94,467	49,667	60,540	61,962	66,559
Earnings per share:
Basic	$	0.94	0.50	0.64	0.68	0.73
Diluted	$	0.92	0.49	0.64	0.67	0.73

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	At or for the year ended December 31,
	2017		2016		2015		2014		2013
Selected Financial Ratios and Other Data:
Return on average assets (1), (5), (6), (7)	0.99	%	0.55	%	0.73	%	0.79	%	0.84	%
Return on average equity (2), (5), (6), (7)	7.95	%	4.28	%	5.49	%	5.69	%	5.87	%
Average capital to average assets	12.51	%	12.73	%	13.25	%	13.80	%	14.30	%
Capital to total assets	12.90	%	12.16	%	12.99	%	13.67	%	14.66	%
Tangible common equity to tangible assets	9.68	%	8.95	%	10.28	%	11.64	%	12.70	%
Net interest rate spread (3)	3.72	%	3.60	%	3.29	%	3.27	%	3.31	%
Net interest margin (4)	3.82	%	3.73	%	3.49	%	3.47	%	3.51	%
Noninterest expense to average assets (5), (6)	3.01	%	3.38	%	2.81	%	2.73	%	2.61	%
Efficiency ratio (5), (6), (7)	63.19	%	77.31	%	69.92	%	67.02	%	64.67	%
Noninterest income to average assets (7)	1.16	%	0.94	%	0.83	%	0.92	%	0.84	%
Net interest income to noninterest expense (5), (6)	1.16x		1.00x		1.13x		1.15x		1.22x
Dividend payout ratio	69.60	%	122.45	%	87.50	%	241.80	%	68.49	%
Nonperforming loans to net loans receivable	0.84	%	1.07	%	1.02	%	1.35	%	1.88	%
Nonperforming assets to total assets	0.75	%	0.88	%	0.91	%	1.25	%	1.60	%
Allowance for loan losses to nonperforming loans	87.43	%	76.00	%	85.86	%	84.35	%	66.12	%
Allowance for loan losses to net loans receivable	0.73	%	0.81	%	0.88	%	1.14	%	1.24	%
Average interest-earning assets to average interest-bearing liabilities	1.31x		1.28	x	1.26	x	1.25x		1.24x
Number of banking offices	172		176		181		162		165
Number of consumer finance offices	—		49		51		51		50

(1) Represents net income divided by average assets.

(2) Represents net income divided by average equity.

(3) Represents average yield on interest-earning assets less average cost of interest-bearing liabilities (shown on an FTE basis).

(4) Represents net interest income as a percentage of average interest-earning assets (shown on a FTE basis).

(5) 2016 includes $37.0 million FHLB prepayment penalty, $12.2 million restructuring/ acquisition expense and $5.1 million ESOP termination expense.

(6) 2017 includes $4.4 million restructuring/ acquisition expense.

(7) 2017 includes $17.2 million gain on sale of offices.

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ITEM 7.MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Overview

Our principal business consists of collecting deposits and making loans secured by various types of collateral, including real estate and other assets in the markets in which we operate.  Attracting and maintaining deposits is affected by a number of factors, including interest rates paid on competing investments offered by other financial and non-financial institutions, account maturities, fee structures, and levels of personal income and savings.  Lending activities are affected by the demand for funds and thus are influenced by interest rates, the number and quality of lenders and regional economic conditions. Sources of funds for lending activities include deposits, borrowings, repayments on loans, cash flows from investment and mortgage-backed securities and income provided from operations.

Our earnings depend primarily on net interest income, which is the difference between interest earned on our interest-earning assets, consisting primarily of loans and investment securities, and the interest paid on interest-bearing liabilities, consisting primarily of deposits, borrowed funds, and trust-preferred securities. Net interest income is a function of our interest rate spread, which is the difference between the average yield earned on our interest-earning assets and the average rate paid on our interest-bearing liabilities, as well as a function of the average balance of interest-earning assets compared to the average balance of interest-bearing liabilities.  Also contributing to our earnings is noninterest income, which consists primarily of service charges and fees on loan and deposit products and services, fees related to insurance and investment management and trust services, and net gains and losses on the sale of assets.  Net interest income and noninterest income are offset by provisions for loan losses, general administrative and other expenses, including employee compensation and benefits and occupancy and processing costs, as well as by state and federal income tax expense.

Our net income was $94.5 million, or $0.92 per diluted share, for the year ended December 31, 2017 compared to $49.7 million, or $0.49 per diluted share, for the year ended December 31, 2016 and $60.5 million, or $0.64 per diluted share, for the year ended December 31, 2015.  The loan loss provision was $19.8 million for the year ended December 31, 2017 compared to $13.5 million for the year ended December 31, 2016 and $9.7 million for the year ended December 31, 2015.

Critical Accounting Policies

Certain accounting policies are important to the understanding of our financial condition, since they require management to make difficult, complex or subjective judgments, some of which may relate to matters that are inherently uncertain. Estimates associated with these policies are susceptible to material changes as a result of changes in facts and circumstances, including, but without limitation, changes in interest rates, performance of the economy, financial condition of borrowers and laws and regulations.  The following are the accounting policies we believe are critical.

Allowance for Loan Losses.  We recognize that losses will be experienced on loans and that the risk of loss varies with the type of loan, the creditworthiness of the borrower, general economic conditions and the quality of the collateral for the loan.  We maintain an allowance for losses inherent in the loan portfolio. The allowance for loan losses represents management’s estimate of probable losses based on all available information. The allowance for loan losses is based on management’s evaluation of the collectability of the loan portfolio, including past loan loss experience, known and inherent losses, information about specific borrower situations, estimated collateral values, and current economic conditions. The loan portfolio is reviewed regularly by management in its determination of the allowance for loan losses. The methodology for assessing the appropriateness of the allowance includes a review of historical losses, peer group comparisons, industry data and economic conditions. As an integral part of their examination process, regulatory agencies periodically review our allowance for loan losses and may require us to make additional provisions for estimated losses based upon judgments different from those of management. In establishing the allowance for loan losses, loss factors are applied to various pools of outstanding loans. Loss factors are derived using our historical loss experience and may be adjusted for factors that affect the collectability of the portfolio as of the evaluation date. Commercial loans over $1.0 million that are criticized are evaluated individually to determine the required allowance for loan losses and to evaluate the potential impairment.  Although management believes that it uses the best information available to establish the allowance for loan losses, future adjustments to the allowance for loan losses may be necessary and results of operations could be adversely affected if circumstances differ substantially from the assumptions used in making the determinations. Because future events affecting borrowers and collateral cannot be predicted with certainty, there can be no assurance that the existing allowance for loan losses is adequate or that increases will not be necessary should the quality of loans deteriorate as a result of the factors discussed previously. Any material increase in the allowance for loan losses may adversely affect our financial condition and results of operations. The allowance is based on information known at the time of the review. Changes in factors underlying the assessment could have a material impact on the amount of the allowance that is necessary and the amount of provision to be charged against earnings. Such changes could impact future results.  For further information related to our allowance for loan losses, see note 1(f) of the notes to the Consolidated Financial Statements.

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Valuation of Investment Securities.  Our investment securities are classified as either held-to-maturity or available-for-sale.  Held-to-maturity securities are carried at amortized cost, while available-for-sale securities are carried at fair value.  Unrealized gains or losses on available-for-sale securities, net of deferred taxes, are reported in other comprehensive income. Fair values are determined as described in note 15 of the notes to the Consolidated Financial Statements. Semi-annually (at May 31 and November 30), we validate the prices received from third parties by comparing them to prices provided by a different independent pricing service. We have reviewed the detailed valuation methodologies provided to us by our pricing services. Additional information related to our investment securities can be found in note 1(d) of the notes to the Consolidated Financial Statements.

We conduct a quarterly review of all investment securities to determine if any declines in fair value are other than temporary. In making this determination, we consider the period of time the securities have been in an unrealized loss position, the percentage decline in comparison to the securities’ amortized cost, the financial condition of the issuer, if applicable, and the delinquency or default rates of underlying collateral. We consider our intent to sell the investment securities evaluated and the likelihood that we will not have to sell the investment securities before recovery of their cost basis.  If impairment exists, credit related impairment losses are recorded in earnings while noncredit related impairment losses are recorded in accumulated other comprehensive income, net of income taxes. Any future deterioration in the fair value of an investment security, or the determination that the existing unrealized loss of an investment security is other-than-temporary, may have a material adverse affect on future earnings.

Goodwill. Goodwill is not subject to amortization but is tested for impairment at least annually and possibly more frequently if certain events occur or changes in circumstances arise. In testing goodwill for impairment, we have the option to first assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying value. If, after assessing the totality of events and circumstances, we determine if it is not more likely than not that the fair value of a reporting unit is less than its carrying value, then performing the two-step impairment test would be unnecessary. However, if we conclude otherwise, it would then be required to perform the first step of the goodwill impairment test, and continue to the second step, if necessary. Step 1 requires the fair value of each reporting unit be compared to its carrying amount, including goodwill. Determining the fair value of a reporting unit requires a high degree of subjective judgment, including developing cash flow projections, selecting appropriate discount rates, identifying relevant market comparables, incorporating general economic and market conditions and selecting an appropriate control premium. 

Future changes in the economic environment or the operations of the reporting units could cause changes to these variables, which could give rise to declines in the estimated fair value of goodwill.  Declines in fair value could result in impairment being identified.  We have established June 30 of each year as the date for conducting our annual goodwill impairment assessment.  Quarterly, we evaluate if there are any triggering events that would require an update to our previous assessment.  The variables are selected as of June 30 and the valuation model is run to determine the fair value of the reporting unit. We have determined that goodwill was not impaired as of June 30, 2017.

Deferred Income Taxes.  We use the asset and liability method of accounting for income taxes. Using this method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases.  If current available information raises doubt as to the realization of the deferred tax assets, a valuation allowance is established.  Deferred tax assets and liabilities are measured using enacted tax rates expected to be applied to taxable income in the years in which those temporary differences are expected to be recovered or settled.  We exercise significant judgment in evaluating the amount and timing of recognition of the resulting tax liabilities and assets.  These judgments require us to make projections of future taxable income.  The judgments and estimates we make in determining our deferred tax assets, which are inherently subjective, are reviewed on an ongoing basis as regulatory and business factors change.  A reduction in estimated future taxable income could require us to record a valuation allowance.  Changes in levels of valuation allowances could result in increased income tax expense, and could negatively affect earnings.

Pension Benefits.  Pension expense and obligations depend on assumptions used in calculating such amounts.  These assumptions include discount rates, anticipated salary increases, interest costs, expected return on plan assets, mortality rates, and other factors.  In accordance with U.S. generally accepted accounting principles, actual results that differ from the assumptions are amortized over average future service and, therefore, generally affect recognized expense.  While management believes that the assumptions used are appropriate, differences in actual experience or changes in assumptions may affect our pension obligations and future expense.

In determining the projected benefit obligations for pension benefits at December 31, 2017 and 2016, we used a discount rate of 3.53% and 4.06%, respectively.  We use the Citigroup Pension Liability Index rates matching the duration of our benefit payments as of the measurement date, December 31, to determine the discount rate. 

30

Balance Sheet Analysis

Assets.  Total assets at December 31, 2017 were $9.364 billion, a decrease of $259.7 million, or 2.7%, from $9.624 billion at December 31, 2016. This decrease in assets was due primarily to the sale of our Maryland offices, which included $215.7 million of deposits and a decrease in cash and cash equivalents. A discussion of significant changes follows.

Cash and cash equivalents. Cash and cash equivalents decreased by $312.2 million, or 80.1%, to $77.7 million at December 31, 2017, from $389.9 million at December 31, 2016. This decrease was a result of funding loan growth of $236.1 million, a decrease in deposits of $55.3 million and the cash payment to fund the Maryland office sale of $45.9 million.

Investment securities.  Investment securities decreased by $24.0 million, or 2.8%, to $822.2 million at December 31, 2017, from $846.2 million at December 31, 2016. This decrease was a result of using the cash flow generated from these portfolios to fund loan growth.

The following table sets forth certain information regarding the amortized cost and fair value of our available-for-sale investment securities portfolio and mortgage-backed securities portfolio at the dates indicated.

	At December 31,
	2017			2016		2015
	Amortized cost		Fair value	Amortized cost	Fair value	Amortized cost	Fair value
	(In thousands)
Residential mortgage-backed securities available for sale:
Fixed-rate pass through certificates	$	144,411	142,702	175,398	174,567	118,266	120,326
Variable-rate pass through certificates	33,079		34,537	43,587	45,588	54,292	56,901
Fixed-rate non-agency CMOs	15		15	100	101	2,519	2,749
Fixed-rate agency CMOs	284,320		279,086	165,535	162,265	215,719	212,227
Variable-rate agency CMOs	74,274		74,386	64,874	65,013	86,090	86,514
Total residential mortgage-backed securities available for sale	$	536,099	530,726	449,494	447,534	476,886	478,717
Investment securities available for sale:
U.S. Government, agency and GSEs	$	212,024	209,270	296,508	294,176	295,510	294,451
Municipal securities	50,511		51,056	61,832	63,070	80,697	82,868
Corporate debt issues	909		909	14,367	16,980	14,463	16,475
Equity securities and mutual funds	551		574	3,351	4,440	1,400	1,894
Total investment securities available for sale	$	263,995	261,809	376,058	378,666	392,070	395,688

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The following table sets forth certain information regarding the amortized cost and fair value of our held-to-maturity investment securities portfolio and mortgage-backed securities portfolio at the dates indicated.

	At December 31,
	2017			2016		2015
	Amortized cost		Fair value	Amortized cost	Fair value	Amortized cost	Fair value
	(In thousands)
Residential mortgage-backed securities held to maturity:
Fixed-rate pass through certificates	$	3,760	3,900	4,807	5,024	6,458	6,809
Variable-rate pass through certificates	2,283		2,347	2,848	2,906	3,618	3,659
Fixed-rate agency CMOs	22,906		22,678	6,674	6,768	14,033	14,252
Variable-rate agency CMOs	729		742	841	855	970	982
Total residential mortgage-backed securities held to maturity	$	29,678	29,667	15,170	15,553	25,079	25,702
Investment securities held to maturity:
Municipal securities	$	—	—	4,808	4,873	6,610	6,850
Total investment securities held to maturity	$	—	—	4,808	4,873	6,610	6,850

The following table sets forth information regarding the issuers and the carrying value of our mortgage-backed securities at the dates indicated.

	At December 31,
	2017		2016	2015
	(In thousands)
Residential mortgage-backed securities:
FNMA	$	286,031	210,373	234,204
GNMA	37,796		42,221	48,283
FHLMC	236,007		202,822	209,788
SBA	—		6,608	8,166
Other (non-agency)	570		680	3,355
Total mortgage-backed securities	$	560,404	462,704	503,796

32

Investment Portfolio Maturities and Yields.  The following table sets forth the scheduled maturities, carrying values, amortized cost, market values and weighted average yields for our investment securities and mortgage-backed securities portfolios at December 31, 2017. Adjustable-rate mortgage-backed securities are included in the period in which interest rates are next scheduled to adjust.

	One year or less				More than one year to five years				More than five years to ten years				More than ten years				Total
	Amortized cost		Annualized weighted average yield		Amortized cost		Annualized weighted average yield		Amortized cost		Annualized weighted average yield		Amortized cost		Annualized weighted average yield		Amortized cost		Fair value	Annualized weighted average yield
	(Dollars in thousands)
Investment securities available-for-sale:
Government sponsored entities	$	66,566	1.07	%	$	140,624	1.28	%	$	—	—	%	$	4,833	2.01	%	$	212,023	209,269	1.23	%
U.S. Government and agency obligations	1		1.45	%	—		—	%	—		—	%	—		—	%	1		1	1.45	%
Municipal securities	2,492		3.73	%	7,072		2.56	%	14,576		3.23	%	26,371		3.93	%	50,511		51,056	3.53	%
Corporate debt issues	—		—	%	—		—	%	—		—	%	909		10.35	%	909		909	10.35	%
Equity securities and mutual funds	—		—	%	—		—	%	—		—	%	551		5.59	%	551		574	5.59	%
Total investment securities available-for-sale	69,059		1.16	%	147,696		1.34	%	14,576		3.23	%	32,664		4.17	%	263,995		261,809	1.75	%
Residential mortgage-backed securities available-for-sale:
Pass through certificates	33,113		2.91	%	8,459		2.53	%	53,239		1.86	%	82,679		2.60	%	177,490		177,239	2.43	%
CMOs	74,722		1.93	%	36,191		1.67	%	64,852		1.60	%	182,844		2.16	%	358,609		353,487	1.96	%
Total residential mortgage-backed securities available-for-sale	107,835		2.23	%	44,650		1.83	%	118,091		1.71	%	265,523		2.30	%	536,099		530,726	2.12	%
Investment securities held-to-maturity:
Residential mortgage-backed securities held-to-maturity:
Pass through certificates	2,283		2.01	%	—				2,824		3.63	%	936		4.00	%	6,043		6,247	3.08	%
CMOs	728		2.03	%	671		2.39	%	—		—	%	22,236		2.51	%	23,635		23,420	2.49	%
Total residential mortgage-backed securities held-to-maturity	3,011		2.02	%	671		2.39	%	2,824		3.63	%	23,172		57.00	%	29,678		29,667	2.61	%
Total investment securities and mortgage-backed	$	179,905	1.82	%	$	193,017	1.46	%	$	135,491	1.92	%	$	321,359	2.51	%	$	829,772	822,202	2.02	%

Further information and analysis of our investment portfolio, including tables with information related to gross unrealized gains and losses on available-for sale and held-to-maturity investment securities and tables showing the fair value and gross unrealized losses on investment securities aggregated by investment category and length of time that the individual securities have been in a continuous unrealized loss position are located in note 3 of the notes to the Consolidated Financial Statements.

33

Loans receivable.  Net loans receivable increased by $240.2 million, or 3.2%, to $7.793 billion at December 31, 2017, from $7.496 billion at December 31, 2016. This increase was due primarily to success in growing our commercial banking and indirect automobile portfolios as well as, decreased sales of residential mortgage loans.

Set forth below are selected data related to the composition of our loan portfolio by type of loan as of the dates indicated.

	At December 31,
	2017					2016					2015					2014					2013
	Amount			Percent		Amount			Percent		Amount			Percent		Amount			Percent		Amount			Percent
	(Dollars in thousands)
Personal Banking:
Residential mortgage loans	$	2,772,549		34.8	%	$	2,699,131		34.8	%	$	2,722,480		36.7	%	$	2,505,089		40.9	%	$	2,468,683		41.8	%
Home equity loans	1,310,355			16.4	%	1,345,370			17.4	%	1,205,903			16.3	%	1,087,282			17.7	%	1,107,394			18.7	%
Consumer loans:
Automobile	492,464			6.2	%	431,802			5.6	%	345,794			4.7	%	92,659			1.5	%	82,194			1.4	%
Education loans	4,200			0.1	%	5,720			0.1	%	7,541			0.1	%	9,890			0.2	%	12,394			0.2	%
Loans on savings accounts	6,846			0.1	%	7,443			0.1	%	7,918			0.1	%	8,466			0.1	%	9,040			0.2	%
Other (1)	153,818			1.9	%	186,294			2.4	%	149,364			2.0	%	131,729			2.1	%	124,720			2.1	%
Total Consumer loans	657,328			8.3	%	631,259			8.2	%	510,617			7.0	%	242,744			4.0	%	228,348			3.9	%
Total Personal Banking	4,740,232			59.5	%	4,675,760			60.4	%	4,439,000			60.0	%	3,835,115			62.6	%	3,804,425			64.4	%
Commercial Banking:
Commercial real estate	2,599,340			32.6	%	2,513,669			32.4	%	2,524,274			34.1	%	1,874,944			30.6	%	1,689,382			28.6	%
Commercial loans	633,163			7.9	%	557,219			7.2	%	437,715			5.9	%	419,525			6.8	%	413,451			7.0	%
Total Commercial Banking	3,232,503			40.5	%	3,070,888			39.6	%	2,961,989			40.0	%	2,294,469			37.4	%	2,102,833			35.6	%
Total loans receivable, gross	7,972,735			100.0	%	7,746,648			100.0	%	7,400,989			100.0	%	6,129,584			100.0	%	5,907,258			100.0	%
Deferred loan costs	27,782					22,375					20,065					6,095					2,461
Undisbursed loan proceeds	(207,108		)			(211,676		)			(198,933		)			(145,788		)			(103,428		)
Allowance for loan losses:
Personal Banking:
Residential mortgage loans	(3,955		)			(4,727		)			(4,710		)			(5,581		)			(7,875		)
Home equity loans	(4,834		)			(4,533		)			(4,042		)			(4,550		)			(7,245		)
Consumer loans:	(13,333		)			(8,627		)			(7,598		)			(6,118		)			(5,487		)
Total Personal Banking	(22,122		)			(17,887		)			(16,350		)			(16,249		)			(20,607		)
Commercial Banking:
Commercial real estate	(23,460		)			(26,675		)			(33,787		)			(32,937		)			(34,969		)
Commercial loans	(11,213		)			(16,377		)			(12,535		)			(13,967		)			(11,110		)
Total Commercial Banking	(34,673		)			(43,052		)			(46,322		)			(46,904		)			(46,079		)
Unallocated	—					—					—					(4,365		)			(4,662		)
Total allowance for loan losses	(56,795		)			(60,939		)			(62,672		)			(67,518		)			(71,348		)
Total loans receivable, net	$	7,736,614				$	7,496,408				$	7,159,449				$	5,922,373				$	5,734,943

(1)     Consists primarily of secured and unsecured personal loans.

34

The following table sets forth the maturity of our loan portfolio at December 31, 2017.  Demand loans and loans having no stated schedule of repayments and no stated maturity are reported as due in one year or less. Adjustable and floating-rate loans are included in the period in which they contractually mature, and fixed-rate loans are included in the period in which the contractual repayment is due.

At December 31, 2017 (In thousands)	Due in one year or less		Due after one year through two years	Due after two years through three years	Due after three years through five years	Due after five years	Total
Personal Banking:
Residential mortgage loans	$	121,465	122,401	122,991	258,268	2,147,424	2,772,549
Home equity loans	118,820		88,475	81,681	143,282	878,097	1,310,355
Consumer loans	205,218		139,645	120,132	139,541	52,792	657,328
Total Personal Banking	445,503		350,521	324,804	541,091	3,078,313	4,740,232
Commercial Banking:
Commercial real estate loans	627,264		384,109	296,309	473,590	818,068	2,599,340
Commercial loans	252,829		72,964	62,224	141,670	103,476	633,163
Total Commercial Banking	880,093		457,073	358,533	615,260	921,544	3,232,503
Total	$	1,325,596	807,594	683,337	1,156,351	3,999,857	7,972,735

The following table sets forth at December 31, 2017, the dollar amount of all fixed-rate and adjustable-rate loans due one year or more after December 31, 2017.  Adjustable and floating-rate loans are included in the table based on the contractual due date of the loan. 

At December 31, 2017 (In thousands)	Fixed		Adjustable	Total
Personal Banking:
Residential mortgage loans	$	2,598,980	52,104	2,651,084
Home equity loans	679,194		512,341	1,191,535
Consumer loans	418,685		33,425	452,110
Total Personal Banking	3,696,859		597,870	4,294,729
Commercial Banking:
Commercial real estate loans	957,140		1,014,936	1,972,076
Commercial loans	185,644		194,690	380,334
Total Commercial Banking	1,142,784		1,209,626	2,352,410
Total	$	4,839,643	1,807,496	6,647,139

Deposits. Total deposits decreased by $55.3 million, or 0.7%, to $7.827 billion at December 31, 2017 from $7.882 billion at December 31, 2016, due to decreases in time deposits and money market deposit accounts as customers continue to prefer more liquid accounts despite recent rate increases. Time deposits decreased by $128.0 million, or 8.3%, to $1.413 billion at December 31, 2017 from $1.541 billion at December 31, 2016 and money market deposit accounts decreased by $134.1 million, or 7.3%, to $1.707 billion at December 31, 2017 from $1.842 billion at December 31, 2016. As a result of our efforts to procure new checking account customers and increase low-cost deposits, demand deposits increased by $176.0 million, or 6.1%, to $3.053 billion at December 31, 2017 from $2.877 billion at December 31, 2016. Additionally, savings deposits increased by $30.7 million, or 1.9%, to $1.654 billion at December 31, 2017 from $1.623 billion at December 31, 2016.

35

The following table sets forth the dollar amount of deposits in each state indicated as of December 31, 2017.

State	Balance		Percent
	(Dollars in thousands)
Pennsylvania	$	4,776,488	61.0	%
New York	2,156,349		27.6	%
Ohio	894,152		11.4	%
Total	$	7,826,989	100.0	%

The following table indicates the amount of our certificates of deposit of $100,000 or more by time remaining until maturity at December 31, 2017.

Maturity period	Certificates of deposit
	(In thousands)
Three months or less	$	74,973
Over three months through six months	61,466
Over six months through twelve months	87,801
Over twelve months	212,156
Total	$	436,396

The following table sets forth the dollar amount of deposits in the various types of accounts we offered at the dates indicated.

	At December 31,
	2017						2016						2015
	Balance		Percent (1)		Rate (2)		Balance		Percent (1)		Rate (2)		Balance		Percent (1)		Rate (2)
	(Dollars in thousands)
Savings deposits	$	1,653,579	21.1	%	0.18	%	$	1,622,879	20.6	%	0.18	%	$	1,386,017	21.0	%	0.24	%
Demand deposits	3,053,337		39.0	%	0.08	%	2,877,289		36.5	%	0.01	%	2,257,342		34.1	%	0.03	%
Money market deposit accounts	1,707,450		21.8	%	0.24	%	1,841,567		23.4	%	0.24	%	1,274,504		19.3	%	0.28	%
Time deposits:
Maturing within 1 year	666,348		8.5	%	0.83	%	836,525		10.6	%	0.85	%	929,351		14.1	%	0.95	%
Maturing 1 to 3 years	427,825		5.5	%	1.26	%	465,684		5.9	%	1.08	%	654,132		9.9	%	1.20	%
Maturing more than 3 years	318,450		4.1	%	1.70	%	238,377		3.0	%	1.51	%	111,235		1.7	%	1.45	%
Total certificates	1,412,623		18.1	%	1.16	%	1,540,586		19.5	%	1.01	%	1,694,718		25.6	%	1.08	%
Total deposits	$	7,826,989	100.1	%	0.33	%	$	7,882,321	100.0	%	0.30	%	$	6,612,581	100.0	%	0.39	%

(1)   Represents percentage of total deposits.

(2)   Represents weighted average nominal rate at year end.

36

Borrowings.  Borrowings decreased by $34.7 million, or 24.3%, to $108.2 million at December 31, 2017 from $142.9 million at December 31, 2016, due to normal fluctuations in collateralized borrowings.

The following table sets forth information concerning our borrowings at the dates and for the periods indicated. 

	During the years ended December 31,
	2017			2016		2015
	(Dollars in thousands)
Federal Home Loan Bank of Pittsburgh borrowings:
Average balance outstanding	$	11,331		450,917		780,946
Maximum outstanding at end of any month during year	87,300			820,317		856,343
Balance outstanding at end of year	—			—		856,343
Weighted average interest rate during year	1.34		%	2.27	%	3.44	%
Weighted average interest rate at end of year	—		%	—	%	3.12	%
Collateralized borrowings:
Average balance outstanding	$	121,019		141,664		144,737
Maximum outstanding at end of any month during year	137,191			158,367		166,403
Balance outstanding at end of year	108,238			142,899		118,664
Weighted average interest rate during year	0.18		%	0.19	%	0.23	%
Weighted average interest rate at end of year	0.20		%	0.17	%	0.22	%
Total borrowings:
Average balance outstanding	$	132,350		592,581		925,683
Maximum outstanding at end of any month during year	199,247			959,696		976,794
Balance outstanding at end of year	108,238			142,899		975,007
Weighted average interest rate during year	0.26		%	1.73	%	2.95	%
Weighted average interest rate at end of year	0.20		%	0.17	%	2.77	%

Shareholders’ equity.  Total shareholders’ equity at December 31, 2017 was $1.208 billion, an increase of $37.1 million, or 3.2%, from $1.171 billion at December 31, 2016. This increase in equity was primarily the result of net income of $94.5 million, which was partially offset by the payment of cash dividends of $65.2 million.

37

Average Balance Sheets

The following tables set forth average balance sheets, average yields (on a fully taxable equivalent "FTE" basis) and costs, and certain other information at and for the periods indicated.  All average balances are daily average balances.  Non-accrual loans are included in the computation of average balances.  The yields set forth below include the effect of deferred fees and discounts and premiums that are amortized or accreted to interest income or expense.  The average yield for loans receivable and investment securities are calculated on a fully-taxable equivalent basis.

	For the years ended december 31,
	2017						2016						2015
	Average outstanding balance			Interest	Average yield/ cost (10)		Average outstanding balance			Interest	Average yield/ cost (10)		Average outstanding balance			Interest	Average yield/ cost (10)
	(Dollars in thousands)
Interest-earning assets:
Loans receivable (includes FTE adjustments of $2,188, $2,283 and $1,973, respectively) (1), (2), (3)	$	7,664,288		342,180	4.46	%	$	7,391,456		331,322	4.48	%	$	6,460,078		300,638	4.65	%
Mortgage-backed securities (5)	563,696			11,343	2.01	%	467,560			8,540	1.83	%	500,797			8,823	1.76	%
Investment securities (includes FTE adjustments of $1,090, $1,471 and $2,322, respectively) (4), (5)	350,870			6,862	1.96	%	344,575			7,612	2.21	%	469,568			11,155	2.38	%
Federal Home Loan Bank stock (11)	8,186			250	3.05	%	26,386			1,371	5.20	%	37,500			2,828	4.77	%
Interest-earning deposits	158,229			1,499	0.93	%	100,336			543	0.53	%	179,201			431	0.24	%
Total interest-earning assets (includes FTE adjustments of $3,278, $3,754 and $4,295, respectively)	8,745,269			362,134	4.14	%	8,330,313			349,388	4.19	%	7,647,144			323,875	4.22	%
Non-interest-earning assets (6)	757,249						781,274						677,441
Total assets	$	9,502,518					$	9,111,587					$	8,324,585
Interest-bearing liabilities:
Savings deposits	$	1,688,451		3,062	0.18	%	$	1,500,655		3,218	0.21	%	$	1,300,102		3,387	0.26	%
Interest-bearing demand deposits	1,432,134			1,027	0.07	%	1,209,325			462	0.04	%	976,789			568	0.06	%
Money market deposit accounts	1,810,083			4,203	0.23	%	1,473,897			3,621	0.25	%	1,202,143			3,222	0.27	%
Time deposits	1,490,378			14,765	0.99	%	1,630,424			16,164	0.99	%	1,540,905			16,878	1.10	%
Borrowed funds (7)	132,350			348	0.26	%	592,581			10,274	1.73	%	925,683			27,347	2.95	%
Junior subordinated deferrable interest debentures	111,213			4,666	4.14	%	111,213			4,560	4.03	%	108,507			4,925	4.48	%
Total interest-bearing liabilities	6,664,609			28,071	0.42	%	6,518,095			38,299	0.59	%	6,054,129			56,327	0.93	%
Non-interest-bearing checking (12)	1,556,511						1,245,320						1,001,263
Non-interest-bearing liabilities	92,611						188,381						166,531
Total liabilities	8,313,731						7,951,796						7,221,923
Shareholders’ equity	1,188,787						1,159,791						1,102,662
Total liabilities and stockholders’ equity	$	9,502,518					$	9,111,587					$	8,324,585
Net interest income				334,063						311,089						267,548
Net interest rate spread (8)					3.72	%					3.60	%					3.29	%
Net interest-earning assets/ net interest margin (9)	$	2,080,660			3.82	%	$	1,812,218			3.73	%	$	1,593,015			3.49	%
Ratio of average interest-earning assets to average interest-bearing liabilities	1.31		x				1.28		x				1.26		x

(1) Average gross loans receivable includes loans held as available-for-sale and loans placed on nonaccrual status.

(2) Interest income includes accretion/ amortization of deferred loan fees/ expenses, which was not material.

(3) Interest income on tax-free loans is presented on a taxable equivalent basis including adjustments as indicated.

(4) Interest income on tax-free investment securities is presented on a taxable equivalent basis including adjustments as indicated.

(5) Average balances do not include the effect of unrealized gains or losses on securities held as available-for-sale.

(6) Average balances include the effect of unrealized gains or losses on securities held as available-for-sale.

(7) Average balances include Federal Home Loan Bank advances and collateralized borrowings.

(8) Net interest rate spread represents the difference between the average yield on interest-earning assets and the average cost of interest-bearing liabilities.

(9) Net interest margin represents net interest income as a percentage of average interest-earning assets.

(10) Shown on a FTE basis. GAAP basis yields for the years ended December 31, 2017, 2016 and 2015 were: loans - 4.44%, 4.45% and 4.62%, respectively, investment securities - 1.65%, 1.78% and 1.88%, respectively, interest-earning assets - 4.10%, 4.15% and 4.17%, respectively, GAAP basis net interest rate spreads were 3.68%, 3.56% and 3.24%, respectively, and GAAP basis net interest margins were 3.78%, 3.69% and 3.43%, respectively.

(11) Average yield calculation excludes the $1.0 million special dividend paid in February 2015, the average yield was 7.54% with the special dividend included.

(12) Average cost of deposits were 0.29%, 0.33% and 0.40%, respectively.

38

Rate/Volume Analysis

The following table presents, on an FTE basis, the changes in interest income and interest expense for major components of interest-earning assets and interest-bearing liabilities for the year ended December 31, 2017 compared to 2016 and for the year ended December 31, 2016 compared to 2015. For each category of interest-earning assets and interest-bearing liabilities, information is provided on changes attributable to: (1) changes in volume multiplied by the prior year rate; (2) changes in rate multiplied by the prior year volume; and (3) the total increase or decrease. Changes not solely attributable to rate or volume have been allocated proportionately to the change due to volume and the change due to rate.

	Years ended December 31, 2017 vs. 2016							Years ended December 31, 2016 vs. 2015
	Increase (decrease)					Total		Increase (decrease)				Total
	Due to					increase		Due to				increase
	Rate			Volume		(decrease)		Rate		Volume		(decrease)
	(In thousands)
Interest-earning assets:
Loans receivable	$	(1,323	)	12,181		10,858		(14,863	)	45,547		30,684
Mortgage-backed securities	1,047			1,756		2,803		303		(586	)	(283	)
Investment securities	(873		)	123		(750	)	(782	)	(2,761	)	(3,543	)
Federal Home Loan Bank stock	(370		)	(751	)	(1,121	)	(880	)	(577	)	(1,457	)
Interest-earning deposits	643			313		956		539		(427	)	112
Total interest-earning assets	(876		)	13,622		12,746		(15,683	)	41,196		25,513
Interest-bearing liabilities:
Savings deposits	(497		)	341		(156	)	(691	)	522		(169	)
Interest-bearing demand deposits	405			160		565		(195	)	89		(106	)
Money market deposit accounts	(199		)	781		582		(330	)	729		399
Time deposits	(12		)	(1,387	)	(1,399	)	(1,694	)	980		(714	)
Borrowed funds	(3,216		)	(6,710	)	(9,926	)	(9,233	)	(7,840	)	(17,073	)
Junior subordinated deferrable interest debentures	106			—		106		(489	)	124		(365	)
Total interest-bearing liabilities	(3,413		)	(6,815	)	(10,228	)	(12,632	)	(5,396	)	(18,028	)
Net change in net interest income	$	2,537		20,437		22,974		(3,051	)	46,592		43,541

Comparison of Results of Operations for the Years Ended December 31, 2017 and 2016

General. Net income for the year ended December 31, 2017 was $94.5 million, or $0.92 per diluted share, an increase of $44.8 million, or 90.2%, from $49.7 million, or $0.49 per diluted share, for the year ended December 31, 2016. The increase in net income resulted from increases in noninterest income of $25.1 million, or 29.4%, and net interest income of $23.5 million, or 7.6%, and a decrease in noninterest expense of $22.2 million, or 7.2%. Partially offsetting these factors were increases in income tax expense of $19.8 million, or 91.4%, and provision for loan losses of $6.2 million, or 45.8%.

Net income for the year ended December 31, 2017 represents returns on average equity and average assets of 7.95% and 0.99%, respectively, compared to 4.28% and 0.55% for the year ended December 31, 2016. A discussion of significant changes follows.

Interest Income. Total interest income increased by $13.3 million, or 3.8%, to $358.9 million for the year ended December 31, 2017 from $345.6 million for the year ended December 31, 2016. This increase is the result of an increase in the average balance of interest earning assets of $415.0 million, or 5.0%, to $8.745 billion for the year ended December 31, 2017 from $8.330 billion for the year ended December 31, 2016. Partially offsetting this increase was a decrease in the average yield on interest-earning assets to 4.10% for the year ended December 31, 2017 from 4.15% for the year ended December 31, 2016.

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Interest income on loans receivable increased by $11.0 million, or 3.3%, to $340.0 million for the year ended December 31, 2017 from $329.0 million for the year ended December 31, 2016.  This increase in interest income on loans receivable is attributed to an increase in the average balance of loans receivable of $272.8 million, or 3.7%, to $7.664 billion for the year ended December 31, 2017 from $7.391 billion for the year ended December 31, 2016. This increase is due primarily to $236.1 million of organic loan growth during 2017, as we continue our focus on expanding commercial banking and indirect consumer portfolios, as well as a reduction in the sale of residential mortgage loans into the secondary market. Partially offsetting this increase was a decrease in the average yield on loans receivable to 4.44% for the year ended December 31, 2017 from 4.45% for the year ended December 31, 2016. The average loan yield was negatively affected by the origination of fixed rate residential mortgage loans at lower rates than the existing portfolio yield as well as the runoff of higher rate consumer loans originated by our consumer discount subsidiary prior to its closure. Partially offsetting these declines was the increase in rates on adjustable rate loans in response to increases in short-term rates by the Federal Reserve.

Interest income on mortgage-backed securities increased by $2.8 million, or 32.8%, to $11.3 million for the year ended December 31, 2017 from $8.5 million for the year ended December 31, 2016. This increase is the result of increases in both the average balance and average yield. The average balance of mortgage-backed securities increased by $96.1 million, or 20.6%, to $563.7 million for the year ended December 31, 2017 from $467.6 million for the year ended December 31, 2016. The increase in the average balance was due to the investment of excess cash during the first half of 2017. The average yield on mortgage-backed securities increased to 2.01% for the year ended December 31, 2017 from 1.83% for the year ended December 31, 2016 due to both an increase in short-term market interest rates that positively impacted the yield of adjustable rate mortgage-backed securities and the purchase of fixed rate mortgage-backed securities with yields higher than the existing portfolio.

Interest income on investment securities decreased by $369,000, or 6.0%, to $5.8 million for year ended December 31, 2017 from $6.1 million for the year ended December 31, 2016. This decrease was the result of a decrease in the average yield on investment securities to 1.65% for the year ended December 31, 2017 from 1.78% for the year ended December 31, 2016.  This decrease is primarily the result of higher rate, tax-free, municipal securities maturing or being called and replaced by lower yielding, shorter duration, government agency securities. Partially offsetting this decrease was an increase in the average balance of investment securities of $6.3 million, or 1.8%, to $350.9 million for the year ended December 31, 2017 from $344.6 million for the year ended December 31, 2016. This increase is due primarily to the investment of excess cash during the first half of 2017.

Dividends on FHLB stock decreased by $1.1 million, or 81.8%, to $250,000 for the year ended December 31, 2017 from $1.4 million for the year ended December 31, 2016. This decrease is the result of decreases in both the average balance and average yield. The average balance on FHLB stock decreased by $18.2 million, or 69.0%, to $8.2 million for the year ended December 31, 2017 from $26.4 million for the year ended December 31, 2016. Additionally, the average yield on FHLB stock decreased to 3.05% for the year ended December 31, 2017 from 5.20% for the year ended December 31, 2016. Required FHLB stock holdings fluctuate with, among other things, the utilization of our borrowing capacity as well as capital requirements established by the FHLB.

Interest income on interest-earning deposits increased by $956,000 to $1.5 million for the year ended December 31, 2017 from $543,000 for the year ended December 31, 2016.  This increase is the result of increases in both the average balance of and average yield earned on interest-earning deposits. The average balance increased by $57.9 million, or 57.7%, to $158.2 million for the year ended December 31, 2017 from $100.3 million for the year ended December 31, 2016, due to the excess cash received from the December 2016 office acquisition. Additionally, the average yield on interest-earning deposits increased to 0.93% for the year ended December 31, 2017 from 0.53% for the year ended December 31, 2016, as a result of recent increases in the targeted Federal Funds rate by the Federal Reserve Board.

Interest Expense. Interest expense decreased by $10.2 million, or 26.7%, to $28.1 million for the year ended December 31, 2017 from $38.3 million for the year ended December 31, 2016.  This decrease in interest expense was due to a decrease in the average cost of interest-bearing liabilities to 0.42% for the year ended December 31, 2017 from 0.59% for the year ended December 31, 2016, and a decrease in the average balance of borrowed funds of $460.2 million, or 77.7%. The decrease in both the average cost of interest-bearing liabilities and the average balance of borrowed funds is due primarily to the payoff of all FHLB advances in the third quarter of 2016 with the cash received from acquiring 18 offices and related deposits in western New York. Additionally, the continued change in our deposit mix from time deposits to lower cost savings and checking products lowered our interest-bearing deposit cost to 0.36% from 0.40%. Partially offsetting the decrease in cost was an increase in the average balance of interest-bearing deposits of $146.5 million, or 2.2%, to $6.665 billion for the year ended December 31, 2017 from $6.518 billion for the year ended December 31, 2016. This increase is due primarily to the addition of $1.643 billion, at fair value, of deposit balances from the office acquisition in the third quarter of 2016, which was augmented by the success in our efforts to procure new checking relationships.

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Net Interest Income. Net interest income increased by $23.5 million, or 7.6%, to $330.8 million for the year ended December 31, 2017 from $307.3 million for the year ended December 31, 2016. This increase is attributable to the factors discussed above. The repayment of all FHLB advances with funds received from the aforementioned office acquisition improved net interest spread and margin. Net interest rate spread increased to 3.68% for the year ended December 31, 2017 from 3.56% for the year ended December 31, 2016 while net interest margin increased to 3.78% for the year ended December 31, 2017 from 3.69% for the year ended December 31, 2016.

Provision for Loan Losses. We analyze the allowance for loan losses as described in note 1(f) of the notes to the Consolidated Financial Statements. The provision for loan losses increased by $6.3 million, or 45.8%, to $19.8 million for the year ended December 31, 2017 from $13.5 million for the year ended December 31, 2016. This increase is due primarily to reserves related to the closure of our consumer finance subsidiary, as well as growth in our commercial loan and indirect automobile portfolios. Partially offsetting these factors was a decrease in total nonaccrual loans of $15.0 million, or 19.0%, to $64.5 million, or 0.83% of total loans, at December 31, 2017 from $79.5 million, or 1.05% of total loans, at December 31, 2016. Additionally, total loan delinquency decreased to $117.5 million, or 1.51% of total loans at December 31, 2017 from $121.6 million, or 1.61% of total loans at December 31, 2016.

In determining the amount of the current period provision, we considered current economic conditions, including unemployment levels, bankruptcy filings, and changes in real estate values, and assessed the impact of these factors on the quality of our loan portfolio and historical loss factors.  We analyze the allowance for loan losses as described in the section entitled “Allowance for Loan Losses.”  The provision that is recorded is sufficient, in our judgment, to bring this reserve to a level that reflects the losses inherent in our loan portfolio relative to loan mix, economic conditions and historical loss experience.

Noninterest Income. Noninterest income increased by $25.1 million, or 29.4%, to $110.5 million for the year ended December 31, 2017 from $85.4 million for the year ended December 31, 2016. The increase is primarily attributable to the $17.2 million gain on the sale of our three Maryland offices in May 2017. Additionally, service charges and fees increased by $5.6 million, or 12.7%, to $49.7 million for the year ended December 31, 2017 from $44.1 million for the year ended December 31, 2016, due primarily to the growth in checking accounts from the September 2016 office acquisition and the successful execution of organic checking account growth initiatives. Trust and other financial services income increased by $3.9 million, or 27.5%, to $18.0 million for the year ended December 31, 2017 from $14.1 million for the year ended December 31, 2016, due to an increase in assets under management from both the 2016 office acquisition and organic growth. Additionally, other operating income increased by $2.9 million, or 50.8%, due primarily to gains on the sale of properties closed during our recent restructuring. Partially offsetting these increases in non-interest income, was a decrease in mortgage banking income of $3.5 million, or 71.0%, as a result of a reduction in the sale of residential mortgage loans into the secondary market. Additionally, insurance commission income decreased by $1.5 million, or 14.3%, due primarily to the closure of our consumer finance subsidiary and the discontinuance of related consumer loan originations.

Noninterest Expense. Noninterest expense decreased by $22.2 million, or 7.2%, to $285.6 million for the year ended December 31, 2017 from $317.8 million for the year ended December 31, 2016. This decrease is primarily the result of the $37.0 million prepayment penalty incurred as a result of paying off $715.0 million of FHLB long-term advances during the second quarter of 2016. In addition, acquisition and restructuring costs decreased by $7.8 million, or 63.8%. to $4.4 million for the current year related to the sale of our Maryland region offices and the closure of our consumer finance subsidiary. These costs totaled $12.2 million in the prior year, which included costs associated with the consolidation of 24 legacy Northwest offices, as well as the expense elated to the purchase of 18 western New York offices. Partially offsetting this decrease was an increase in compensation and employee benefits of $9.3 million, or 6.6%, to $150.2 million for the year ended December 31, 2017 from $140.9 million for the year ended December 31, 2016. This increase is due primarily to the employees added from the aforementioned acquisition, as well as increases in health-care costs and other employee benefits. Additionally, processing expenses increased by $4.2 million, amortization of intangible assets increased by $2.5 million, premises and occupancy costs increased by $2.7 million, and office operations increased by $1.4 million, due primarily to the incremental costs associated with the 18 offices acquired in the third quarter of 2016.

Income Taxes. The provision for income taxes increased by $19.8 million, or 91.4%, to $41.4 million for the year ended December 31, 2017 from $21.6 million for the year ended December 31, 2016. This increase in income tax expense is primarily the result of an increase in pretax income of $64.6 million. Partially offsetting this increase was a $3.1 million tax benefit due to the re-measurement of our net deferred tax liability as a result of the Act, which was signed into law on December 22, 2017.

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Comparison of Results of Operations for the Years Ended December 31, 2016 and 2015

General. Net income for the year ended December 31, 2016 was $49.7 million, or $0.49 per diluted share, a decrease of $10.8 million, or 18.0%, from $60.5 million, or $0.64 per diluted share, for the year ended December 31, 2015.  The decrease in net income resulted from increases in noninterest expense of $73.9 million, or 31.6%, and provision for loan losses of $3.8 million, or 39.4%. Partially offsetting these factors were increases in net interest income of $44.0 million, or 16.7%, and noninterest income of $16.6 million, or 24.0%, as well as a decrease in income tax expense of of $6.4 million, or 22.6%.

Net income for the year ended December 31, 2016 represents returns on average equity and average assets of 4.28% and 0.55%, respectively, compared to 5.49% and 0.73% for the year ended December 31, 2015.  A discussion of significant changes follows.

Interest Income. Total interest income increased by $26.0 million, or 8.2%, to $345.6 million for the year ended December 31, 2016 from $319.6 million for the year ended December 31, 2015. This increase is the result of an increase in the average balance of interest earning assets of $683.2 million, or 8.9%, to $8.330 billion for the year ended December 31, 2016 from $7.647 billion for the year ended December 31, 2015. Partially offsetting this increase was a decrease in the average yield on interest-earning assets to 4.15% for the year ended December 31, 2016 from 4.17% for the year ended December 31, 2015.

Interest income on loans receivable increased by $31.3 million, or 10.2%, to $329.0 million for the year ended December 31, 2016 from $298.7 million for the year ended December 31, 2015.  This increase can be attributed to an increase in the average balance of loans receivable of $931.4 million, or 14.4%, to $7.391 billion for the year ended December 31, 2016 from $6.460 billion for the year ended December 31, 2015. This increase is due primarily to the addition of $928.1 million and $455.9 million of loan balances, at fair value, from the LNB and FNFG acquisitions, on December 9, 2016 and August 14, 2015, respectively. Also contributing to this increase was internal loan growth of $170.5 million during the past year due to continued success in growing our commercial and indirect automobile loan portfolios. Partially offsetting this increase was a decrease in the average yield on loans receivable to 4.45% for the year ended December 31, 2016 from 4.62% for the year ended December 31, 2015. The decrease in average yield is due primarily to the continued low interest rate environment, as well as the overall lower yield on the loans acquired in the LNB acquisition.

Interest income on mortgage-backed securities decreased by $283,000, or 3.2%, to $8.5 million for the year ended December 31, 2016 and from $8.8 million for the year ended December 31, 2015. The average balance of mortgage-backed securities decreased by $33.2 million, or 6.6%, to $467.6 million for the year ended December 31, 2016 from $500.8 million for the year ended December 31, 2015. The cash flow from these securities was used to pay off FHLB advances and fund loan growth.  Partially offsetting this decrease was an increase in the average yield on mortgage-backed securities to 1.83% for the year ended December 31, 2016 from 1.77% for the year ended December 31, 2015 due to the acquisition of the higher yielding LNB portfolio.

Interest income on investment securities decreased by $2.7 million, or 31.5%, to $6.1 million for the year ended December 31, 2016 from $8.8 million for the year ended December 31, 2015. This decrease is the result of decreases in both the average balance and average yield. The average balance of investment securities decreased by $125.0 million, or 26.6%, to $344.6 million for the year ended December 31, 2016 from $469.6 million for the year ended December 31, 2015.  This decrease is due primarily to the maturity or call of municipal and government agency securities and the use of these proceeds to pay off FHLB advances and fund loan growth. The average yield on investment securities decreased to 1.78% for the year ended December 31, 2016 from 1.88% for the year ended December 31, 2015.  This decrease is primarily the result of higher rate, tax-free, municipal securities maturing or being called and, if replaced, being replaced by lower yielding, shorter duration government agency securities. 

Dividends on FHLB stock decreased by $1.4 million, or 51.5%, to $1.4 million for the year ended December 31, 2016 from $2.8 million for the year ended December 31, 2015. This decrease is due primarily to the $1.0 million special dividend paid in the first quarter of 2015 which was not paid in 2016.  The average balance of FHLB stock decreased by $11.1 million, or 29.6%, to $26.4 million for the year ended December 31, 2016 from $37.5 million for the year ended December 31, 2015. Additionally, the average yield, including the special dividend, decreased to 5.20% for the year ended December 31, 2016 from 7.54% for the year ended December 31, 2015. Required FHLB stock holdings fluctuate with, among other things, the utilization of our borrowing capacity as well as capital requirements established by the FHLB.

Interest income on interest-earning deposits increased by $112,000, or 26.0%, to $543,000 for the year ended December 31, 2016 from $431,000 for the year ended December 31, 2015.  This increase is due to an increase in the average yield on interest-earning deposits to 0.53% for the year ended December 31, 2016 from 0.24% for the year ended December 31, 2015, as a result of the Federal Reserve Board increasing the targeted Federal Funds rate by 25 basis points in both December 2015 and 2016. Partially offsetting this increase was a decrease in the average balance of $78.9 million, or 44.0%, to $100.3 million for the year ended December 31, 2016 from $179.2 million for the year ended December 31, 2015, due to the utilization of cash to pay off FHLB advances and fund loan growth. 

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Interest Expense. Interest expense decreased by $18.0 million, or 32.0%, to $38.3 million for the year ended December 31, 2016 from $56.3 million for the year ended December 31, 2015.  This decrease in interest expense was due to a decrease in the average cost of interest-bearing liabilities to 0.59% for the year ended December 31, 2016 from 0.93% for the year ended December 31, 2015. This decrease is due primarily to the replacement of long-term FHLB borrowings with lower cost short-term FHLB advances in May 2016 and the replacement of those short-term advances in December 2016 with the deposits received from the FNFG branch acquisition. Also contributing to this decrease was a shift in deposit mix to a heavier weighting of low interest rate and noninterest bearing deposits. Additionally, the average cost of each deposit type decreased from the prior year due to the continued low interest rate environment. Partially offsetting this decrease was an increase in the average balance of interest-bearing liabilities of $464.0 million, or 7.7%, to $6.518 billion for the year ended December 31, 2016 from $6.054 billion for the year ended December 31, 2015. This increase was due primarily to the addition of $1.034 billion and $1.643 billion, at fair value, of deposit balances from the LNB and FNFG acquisitions, respectively, and success in attracting new checking account customers.

Net Interest Income. Net interest income increased by $44.0 million, or 16.7%, to $317.3 million for the year ended December 31, 2016 from $263.3 million for the year ended December 31, 2015.  This increase is attributable to the factors discussed above. The full-year impact of the additional net interest income contributed by the LNB acquisition, which provided $1.140 billion of interest-earning assets, and the refinancing and subsequent replacement of high-cost FHLB advances with $1.643 billion of deposits received from the FNFG branch acquisition, improved both net interest spread and margin. Our net interest rate spread increased to 3.56% for the year ended December 31, 2016 from 3.24% for the year ended December 31, 2015 while net interest margin increased to 3.69% for the year ended December 31, 2016 from 3.43% for the year ended December 31, 2015.

Provision for Loan Losses. We analyze the allowance for loan losses as described in note 1(f) of the notes to the Consolidated Financial Statements. The provision for loan losses increased by $3.8 million, or 39.4%, to $13.5 million for the year ended December 31, 2016 from $9.7 million for the year ended December 31, 2015.  This increase is due primarily to the downgrade of five commercial loans throughout the year which required an additional $2.7 million in combined reserves. Additionally, reserves were increased in recognition of the substantial growth in our indirect auto portfolio.

In determining the amount of the current period provision, we considered current economic conditions, including unemployment levels, bankruptcy filings, and changes in real estate values, and assessed the impact of these factors on the quality of our loan portfolio and historical loss factors.  We analyze the allowance for loan losses as described in the section entitled “Allowance for Loan Losses.”  The provision that is recorded is sufficient, in our judgment, to bring this reserve to a level that reflects the losses inherent in our loan portfolio relative to loan mix, economic conditions and historical loss experience.

Noninterest Income. Noninterest income increased by $16.6 million, or 24.0%, to $85.4 million for the year ended December 31, 2016 from $68.8 million for the year ended December 31, 2015. This increase is attributable to increases in all noninterest income categories with the exception of gain on sale of investments. Service charges and fees increased by $5.7 million, or 15.0%, to $44.1 million for the year ended December 31, 2016 from $38.4 million for the year ended December 31, 2015 due primarily to the growth in checking accounts from both the LNB and FNFG acquisitions, and the successful execution of internal growth initiatives. Mortgage banking income increased by $4.0 million, or 424.5%, to $4.9 million for the year ended December 31, 2016 from $933,000 for the year ended December 31, 2015, due to the resumption of sales of residential mortgage loan originations into the secondary market to manage balance sheet growth and mitigate interest rate risk. Also contributing to the increase in noninterest income was a decrease in loss on sale of real estate owned of $2.0 million, or 98.0%, as we recognized a net loss of $39,000 for the year ended December 31, 2016 compared to a net loss of $2.0 million for the year ended December 31, 2015. In addition, other operating income increased by $1.5 million, or 34.8%, to $5.8 million for the year ended December 31, 2016 from $4.3 million for the year ended December 31, 2015 due primarily to income recognized from paid-off purchased credit impaired loans. Finally, both trust and other financial services income and insurance commission income increased by $1.8 million and $996,000, respectively, due to both internal and acquisition related growth.

Noninterest Expense. Noninterest expense increased by $73.9 million, or 31.6%, to $317.8 million for the year ended December 31, 2016 from $233.9 million for the year ended December 31, 2015.  This increase is primarily the result of a FHLB prepayment penalty and, to a lesser extent, increases in compensation and employee benefit expense, restructuring and acquisition expense, other expense, and processing expense. In May 2016, we replaced long-term FHLB borrowings with lower cost short-term advances incurring a $37.0 million prepayment penalty. This refinancing was prompted by the anticipated receipt of deposits of approximately $1.600 billion from the FNFG branch acquisition, the proceeds from which would be used to pay off the short-term advances. Compensation and employee benefits increased by $21.1 million, or 17.6%, to $140.9 million for the year ended December 31, 2016 from $119.8 million for the year ended December 31, 2015.  This increase is the result of the employees retained from both the LNB and FNFG acquisitions, higher health-care costs, and the costs associated with the termination of Northwest Bank's ESOP. Additionally, acquisition and restructuring expenses increased by $2.4 million, or 25.2%. Acquisition and restructuring expense in the prior year related to the LNB acquisition. In the current year such charges related to the FNFG branch acquisition in December 2016 and the consolidation of 24 Northwest offices in April 2016. Also contributing to this increase

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in noninterest expense was an increase in other expense of $4.0 million, or 44.1%, as a result of an increase in charitable contributions made to utilize Pennsylvania Education Improvement Tax Credits and the assessment of a full year of Ohio Bank Franchise tax. Processing expense increased by $4.1 million, or 13.3%, to $34.9 million for the year ended December 31, 2016 from $31.8 million for the year ended December 31, 2015, due primarily to technology upgrades, the additional maintenance costs attributable to the addition of the LNB and FNFG franchises, and the replacement of debit cards in an effort to enhance customer security. 

Income Taxes. The provision for income taxes decreased by $6.4 million, or 22.6%, to $21.6 million for the year ended December 31, 2016 from $28.0 million for the year ended December 31, 2015 primarily due to a decrease in pretax income of $17.2 million, or 19.4%. In addition, our effective tax rate for the year ended December 31, 2016 decreased to 31.4% from 31.6% in the prior year, due primarily to an increased amount of Pennsylvania state tax credits taken in 2016.

Asset Quality

We actively manage asset quality through our underwriting practices and collection procedures. Our underwriting practices are focused on balancing risk and return while our collection operations focus on diligently working with delinquent borrowers in an effort to minimize losses.

Collection procedures. Our collection procedures for personal loans generally provide that when a loan is five days past due, a computer-generated late notice is sent to the borrower requesting payment. If delinquency continues, at 15 days a delinquent notice, plus a notice of a late charge, is sent and personal contact efforts are attempted by telephone to strengthen the collection process and obtain reasons for the delinquency. Also, plans to establish a payment program are developed. Personal contact efforts are continued throughout the collection process, as necessary. Generally, if a loan becomes 60 days past due, a collection letter is sent and the loan becomes subject to possible legal action if suitable arrangements for payment have not been made. In addition, the borrower is given information which provides access to consumer counseling services to the extent required by the regulations of the Department of Housing and Urban Development and other applicable authorities. When a loan continues in a delinquent status for 90 days or more, and a payment schedule has not been developed or kept by the borrower, we may send the borrower a notice of intent to foreclose, giving 30 days to cure the delinquency. If not cured, foreclosure proceedings are initiated.

Nonperforming assets. Loans are reviewed on a regular basis and are placed on a nonaccrual status when, in the opinion of management, the collection of all contractual principal and/ or interest is doubtful. Loans are automatically placed on nonaccrual status when either principal or interest is 90 days or more past due. Interest accrued and unpaid at the time a loan is placed on a nonaccrual status is reversed and charged against interest income.

Real estate acquired as a result of foreclosure or by deed in lieu of foreclosure is classified as real estate owned until such time that it is sold. When real estate is acquired through foreclosure or by deed in lieu of foreclosure, it is recorded at the lower of the related loan balance or its fair value as determined by an appraisal, less estimated costs of disposal. If the value of the property is less than the principal balance, less any related specific loan loss reserve allocations, the difference is charged against the allowance for loan losses. Any subsequent write-down of real estate owned or loss at the time of disposition is charged against earnings.

Nonaccrual, Past Due, Restructured Loans and Nonperforming Assets. The following table sets forth information with respect to nonperforming assets. Nonaccrual loans are those loans on which the accrual of interest has ceased. Generally, when a loan becomes 90 days past due, we fully reverse all accrued interest thereon and cease to accrue interest thereafter. Exceptions are made for loans that have contractually matured, are in the process of being modified to extend the maturity date and are otherwise current as to principal and interest, and well secured loans that are in process of collection. Loans may also be placed on nonaccrual before they reach 90 days past due if conditions exist that call into question our ability to collect all contractual principal and/or interest. Other nonperforming assets represent property acquired through foreclosure or repossession. Foreclosed property is carried at the lower of its fair value less estimated costs to sell, or the principal balance of the related loan.

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At December 31, 2017, we expect to collect the carrying value of our purchased credit impaired loans and have determined that we can reasonably estimate their future cash flows including those loans that are 90 days or more delinquent. As a result, we do not consider these loans to be nonaccrual or impaired and continue to recognize interest income on these loans, including the loans’ accretable discount.

	At December 31,
	2017			2016		2015		2014		2013
	(Dollars in thousands)
Loans 90 days or more past due:
Residential mortgage loans	$	13,890		13,621		16,354		17,704		24,625
Home equity loans	7,469			5,756		6,112		6,606		8,345
Consumer loans	4,208			3,923		3,902		2,656		2,723
Commercial real estate loans	16,284			21,834		19,237		10,215		18,433
Commercial loans	3,140			3,520		2,747		4,380		4,321
Total loans 90 days or more past due	$	44,991		48,654		48,352		41,561		58,447
Total real estate owned (REO)	$	5,666		4,889		8,725		16,759		18,203
Total loans 90 days or more past due and REO	50,657			53,543		57,077		58,320		76,650
Total loans 90 days or more past due to net loans receivable	0.58		%	0.65	%	0.68	%	0.70	%	1.02	%
Total loans 90 days or more past due and REO to total assets	0.54		%	0.56	%	0.64	%	0.75	%	0.97	%
Nonperforming assets:
Nonaccrual loans - loans 90 days or more past due	$	43,077		45,181		43,268		41,326		57,757
Nonaccrual loans - loans less than 90 days past due	21,378			34,355		28,394		38,482		49,464
Loans 90 days or more past due still accruing	502			649		1,334		235		690
Total nonperforming loans	64,957			80,185		72,996		80,043		107,911
Total nonperforming assets	$	70,623		85,074		81,721		96,802		126,114
Nonaccrual troubled debt restructured loans (1)	$	12,285		16,346		21,118		24,459		28,889
Accruing troubled debt restructured loans	19,819			26,580		29,997		37,329		50,277
Total troubled debt restructured loans	$	32,104		42,926		51,115		61,788		79,166

(1) Also included in nonaccrual loans above.

During the year ended December 31, 2017, gross interest income of approximately $3.7 million would have been recorded on loans accounted for on a nonaccrual basis if the loans had been current and in accordance with their original terms throughout the year. We recognized $1.2 million of interest income on nonaccrual and troubled debt restructured loans during the year ended December 31, 2017.

Classification of Assets. Our policies, consistent with regulatory guidelines, provide for the classification of loans considered to be of lesser quality as “substandard,” “doubtful,” or “loss” assets. An asset is considered “substandard” if it is inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged, if any. “Substandard” assets include those characterized by the “distinct possibility” that the financial institution will sustain “some loss” if the deficiencies are not corrected. Assets classified as “doubtful” have all of the weaknesses inherent in those classified “substandard” with the added characteristic that the weaknesses present make “collection or liquidation in full,” on the basis of currently existing facts, conditions, and values, “highly questionable and improbable.” Assets classified as “loss” are those considered “uncollectible” so that their continuance as assets without the establishment of a specific loss reserve is not warranted. Assets that do not expose the savings institution to risk sufficient to warrant classification in one of the aforementioned categories, but which possess some weaknesses, are required to be designated “special mention.” At December 31, 2017, we had 205 loans, with an aggregate principal balance of $102.8 million, designated as special mention.

We regularly review our asset portfolio to determine whether any assets require classification in accordance with applicable regulations. Our largest classified assets generally are also our largest nonperforming assets.

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The following table sets forth the aggregate amount of our classified assets at the dates indicated.

	At December 31,
	2017		2016	2015
	(In thousands)
Substandard assets	$	261,692	223,681	199,009
Doubtful assets	—		—	1,225
Loss assets	—		—	1,340
Total classified assets	$	261,692	223,681	201,574

Allowance for Loan Losses. Our Board of Directors has adopted an “Allowance for Loan and Lease Losses” (“ALL”) policy designed to provide management with a systematic methodology for determining and documenting the ALL each reporting period.  This methodology was developed to provide a consistent process and review procedure to ensure that the ALL is in conformity with GAAP, our policies and procedures and other supervisory and regulatory guidelines.

On an ongoing basis, the Credit Administration department, as well as loan officers, branch managers and department heads, review and monitor the loan portfolio for problem loans.  This portfolio monitoring includes a review of the monthly delinquency reports as well as historical comparisons and trend analysis.  In addition, a meeting is held every quarter with each region to monitor the performance and status of loans on an internal watch list.  On an on-going basis the loan officer, in conjunction with a portfolio manager, grades or classifies problem loans or potential problem loans based upon their knowledge of the lending relationship and other information previously accumulated.  This rating is also reviewed independently by our Loan Review department on a periodic basis.  Our loan grading system for problem loans is consistent with industry regulatory guidelines which classify loans as “substandard”, “doubtful” or “loss.”  Loans that do not expose us to risk sufficient to warrant classification in one of the previous categories, but which possess some weaknesses, are designated as “special mention”.  A “substandard” loan is any loan that is 90 days or more contractually delinquent or is inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged, if any.  Loans classified as “doubtful” have all the weaknesses inherent in those classified as “substandard” with the added characteristic that the weaknesses present make collection or liquidation in full, on the basis of currently existing facts, conditions or values, highly questionable and improbable.  Loans classified as “loss” are considered uncollectible so that their continuance as assets without the establishment of a specific loss allowance is not warranted.

Credit relationships that have been classified as substandard or doubtful and are greater than or equal to $1.0 million are reviewed by the Credit Administration department for possible impairment.  A loan is considered impaired when, based on current information and events, it is probable that we will be unable to collect all amounts due according to the contractual terms of the loan agreement, including both contractual principal and interest payments.

If such an individual loan is deemed to be impaired, the Credit Administration department determines the proper measure of impairment for each loan based on one of three methods: (1) the present value of expected future cash flows discounted at the loan’s effective interest rate; (2) the loan’s observable market price; or (3) the fair value of the collateral if the loan is collateral dependent, less costs of sale or disposal.  If the measurement of the impaired loan is more or less than the recorded investment in the loan, the Credit Administration department adjusts the specific allowance associated with that individual loan accordingly.

If a substandard or doubtful loan is not considered individually for impairment, it is grouped with other loans that possess common characteristics for impairment evaluation and analysis.  This segmentation is accomplished by grouping loans of similar product types, risk characteristics and industry concentration into homogeneous pools.  Historical loss ratios are analyzed and adjusted based on delinquency trends as well as the current economic, political, regulatory, and interest rate environment and used to estimate the current measure of impairment.

The individual impairment measures along with the estimated loss for each homogeneous pool are consolidated into one summary document. This summary schedule along with the support documentation used to establish this schedule is presented to management’s Allowances for Loan Losses Committee monthly. The Allowances for Loan Losses Committee reviews the processes and documentation presented. Quarterly management's Credit Committee reviews the allowance for loan loss committee's report, reviews the concentration of credit by industry and customer, lending products and activity, competition and collateral values, as well as economic conditions in general and in each of our market areas.  Based on this review and discussion, the appropriate amount of ALL is estimated and any adjustments to reconcile the actual ALL with this estimate are determined.  In addition, the Credit Committee considers if any changes to the methodology are needed.  The Credit Committee also reviews and discusses delinquency trends, nonperforming asset amounts and ALL levels and ratios compared to our peer group as well as state and national statistics.  Similarly, following the Credit Committee’s review and approval, a review is performed by the Risk Management Committee of the Board of Directors on a quarterly basis.

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In addition to the reviews by management’s Credit Committee and the Board of Directors’ Risk Management Committee, regulators from either the FDIC or the Pennsylvania Department of Banking and Securities perform an extensive review on an annual basis for the adequacy of the ALL and its conformity with regulatory guidelines and pronouncements.  Any recommendations or enhancements from these independent parties are considered by management and the Credit Committee and implemented accordingly.

We acknowledge that this is a dynamic process and consists of factors, many of which are external and out of our control that can change often, rapidly and substantially.  The adequacy of the ALL is based upon estimates using all the information previously discussed as well as current and known circumstances and events.  There is no assurance that actual portfolio losses will not be substantially different than those that were estimated.

We utilize a structured methodology each period when analyzing the adequacy of the allowance for loan losses and the related provision for loan losses, which the Credit Committee assesses regularly for appropriateness.  As part of the analysis as of December 31, 2017, we considered the economic conditions in our markets, such as unemployment and bankruptcy levels as well as changes in estimates of real estate collateral values; and no material changes in methodology were determined necessary. In addition, we considered the overall trends in asset quality, specific reserves already established for criticized loans, historical loss rates and collateral valuations. The allowance for loan losses decreased by $4.1 million, or 6.8%, to $56.8 million, or 0.73% of total loans at December 31, 2017 from $60.9 million, or 0.81% of total loans, at December 31, 2016. This decrease is due primarily to improvements in the historical loss rates used to calculated the ALL for commercial banking loans.

We also consider how the levels of non-accrual loans and historical charge-offs have influenced the required amount of allowance for loan losses.  Nonaccrual loans of $64.5 million or 0.83% of total loans receivable at December 31, 2017 decreased by $15.0 million, or 19.0%, from $79.5 million, or 1.05% of total loans receivable, at December 31, 2016. As a percentage of average loans, net charge-offs increased to 0.31% for the year ended December 31, 2017 compared to 0.21% for the year ended December 31, 2016. However, this increase was concentrated primarily in the discontinued consumer finance company business line.

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Analysis of the Allowance for Loan Losses. The following table sets forth the analysis of the allowance for loan losses for the periods indicated.

	Years ended December 31,
	2017			2016		2015		2014		2013
	(Dollars in thousands)
Net loans receivable	$	7,736,614		7,496,408		7,159,449		5,922,373		5,734,943
Average loans outstanding	7,664,288			7,391,456		6,460,078		5,883,244		5,682,431
Allowance for loan losses
Balance at beginning of period	60,939			62,672		67,518		71,348		73,219
Provision for loan losses	19,751			13,542		9,712		20,314		18,519
Charge offs:
Residential mortgage loans	(1,039		)	(3,480	)	(1,126	)	(2,181	)	(2,501	)
Home equity loans	(2,259		)	(2,539	)	(2,424	)	(1,783	)	(2,239	)
Consumer loans	(20,292		)	(10,905	)	(8,274	)	(6,423	)	(6,055	)
Commercial real estate loans	(4,174		)	(3,740	)	(6,326	)	(8,422	)	(10,042	)
Commercial loans	(3,490		)	(4,217	)	(8,183	)	(11,936	)	(5,007	)
Total charge-offs	(31,254		)	(24,881	)	(26,333	)	(30,745	)	(25,844	)
Recoveries:
Residential mortgage loans	472			445		304		443		420
Home equity loans	583			672		976		194		258
Consumer loans	2,188			1,810		1,581		1,190		1,082
Commercial real estate loans	1,991			4,331		4,639		2,195		2,305
Commercial loans	2,125			2,348		4,275		2,579		1,389
Total recoveries	7,359			9,606		11,775		6,601		5,454
Balance at end of period	$	56,795		60,939		62,672		67,518		71,348
Allowance for loan losses as a percentage of net loans receivable	0.73		%	0.81	%	0.88	%	1.14	%	1.24	%
Net charge-offs as a percentage of average loans outstanding	0.31		%	0.21	%	0.23	%	0.41	%	0.36	%
Allowance for loan losses as a percentage of nonperforming loans	87.43		%	76.00	%	85.86	%	84.35	%	66.12	%
Allowance for loan losses as a percentage of nonperforming loans and real estate owned	80.42		%	71.63	%	76.69	%	69.75	%	56.57	%

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Allocation of Allowance for Loan Losses.  The following tables set forth the allocation of allowance for loan losses by loan category at the dates indicated.  The allowance for loan losses allocated to each category is not necessarily indicative of future losses in any particular category.

	At December 31,
	2017				2016				2015
	Amount		% of total loans (1)		Amount		% of total loans (1)		Amount		% of total loans (1)
	(Dollars in thousands)
Balance at end of year applicable to:
Residential mortgage loans	$	3,955	34.8	%	$	4,727	35.1	%	$	4,710	37.1	%
Home equity loans	4,834		16.4	%	4,533		17.2	%	4,042		16.0	%
Consumer loans	13,333		8.3	%	8,627		8.1	%	7,598		6.9	%
Commercial real estate loans	23,460		32.6	%	26,675		32.4	%	33,787		34.1	%
Commercial loans	11,213		7.9	%	16,377		7.2	%	12,535		5.9	%
Total allocated allowance	56,795				60,939				62,672
Unallocated	—		—		—		—		—		—
Total	$	56,795	100.0	%	$	60,939	100	%	$	62,672	100.0	%

	At December 31,
	2014				2013
	Amount		% of total loans (1)		Amount		% of total loans (1)
	(Dollars in thousands)
Balance at end of year applicable to:
Residential mortgage loans	$	5,581	41.2	%	$	7,875	42.2	%
Home equity loans	4,550		17.4	%	7,245		18.3	%
Consumer loans	6,118		4.0	%	5,487		3.9	%
Commercial real estate loans	33,389		29.8	%	35,199		28.2	%
Commercial loans	13,515		7.6	%	10,880		7.4	%
Total allocated allowance	63,153				66,686
Unallocated	4,365		—		4,662		—
Total	$	67,518	100.0	%	$	71,348	100.0	%

(1) Represents percentage of loans in each category to total loans.

Liquidity and Capital Resources

Northwest Bank is required to maintain a sufficient level of liquid assets, as determined by management and defined and reviewed for adequacy by the Federal Deposit Insurance Corporation during their regular examinations.  The Federal Deposit Insurance Corporation, however, does not prescribe by regulation a minimum amount or percentage of liquid assets. The Federal Deposit Insurance Corporation allows us to consider any unencumbered, available-for-sale marketable security, whose sale would not impair our capital adequacy, to be eligible for liquidity.  Liquidity is monitored through the use of a standard liquidity ratio of liquid assets to borrowings plus deposits.  Using this formula, Northwest Bank’s liquidity ratio was 9.1% as of December 31, 2017. We adjust our liquidity level in order to meet funding needs of deposit outflows, repayment of borrowings and loan commitments.  We also adjust liquidity as appropriate to meet our asset and liability management objectives. Liquidity needs can also be met by temporarily drawing upon lines-of-credit established for such reasons.  As of December 31, 2017, Northwest Bank had $3.119 billion of additional borrowing capacity available with the Federal Home Loan Bank of Pittsburgh, including a $150.0 million overnight line of credit, as well as a $65.5 million borrowing capacity available with the Federal Reserve Bank and $80.0 million with two correspondent banks.

In addition to deposits, our primary sources of funds are the amortization and repayment of loans and mortgage-backed securities, maturities of investment securities and other short-term investments, and earnings and funds provided from operations.  While scheduled principal repayments on loans and mortgage-backed securities are a relatively predictable source of funds, deposit flows and loan prepayments are greatly influenced by general interest rate levels, economic conditions, and competition.  We manage the pricing of our deposits to maintain a desired deposit balance.  In addition, we invest excess funds in short-term interest earning and other assets, which provide liquidity to meet lending requirements.  Short-term interest-earning deposits amounted to

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$14.9 million at December 31, 2017.  For additional information about our cash flows from operating, financing, and investing activities, see the Statements of Cash Flows included in the Consolidated Financial Statements.

A portion of our liquidity consists of cash and cash equivalents, which are a product of our operating, investing, and financing activities.  The primary sources of cash during the current year were net income and principal repayments on loans and mortgage-backed securities.

Liquidity management is both a daily and long-term function of business management.  If we require funds beyond our ability to generate them internally, borrowing agreements exist with the Federal Home Loan Bank of Pittsburgh and the Federal Reserve Bank of Cleveland, which provide an additional source of funds. At December 31, 2017 Northwest Bank did not have any advances from the Federal Home Loan Bank of Pittsburgh or the Federal Reserve Bank of Cleveland. We borrow from these sources to reduce interest rate risk and to provide liquidity when necessary.

At December 31, 2017, our customers had $872.7 million of unused lines of credit available and $181.1 million in loan commitments. This amount does not include the unfunded portion of loans in process. Time deposits scheduled to mature in less than one year at December 31, 2017, totaled $666.3 million. We believe that a significant portion of such deposits will remain with us.

The major sources of our cash flows are in the areas of deposits, loans, marketable securities, and borrowed funds.

Deposits are our primary source of externally generated funds. The level of deposit inflows during any given period is heavily influenced by factors outside of our control, such as consumer savings tendencies, the general level of short-term and long-term market interest rates, as well as higher alternative yields that investors may obtain on competing investments such as money market mutual funds. Financial institutions, such as Northwest Bank, are also subject to deposit outflows. Our net deposits decreased by $55.3 million for the year ended December 31, 2017, Net deposits increased by $1.270 billion, with $1.643 billion of deposits coming from the FNFG acquisition for the year ended December 31, 2016 and by $980.0 million, with $1.034 billion of deposits coming from the LNB acquisition for the year ended December 31, 2015.

Similarly, the amount of principal repayments on loans and the amount of new loan originations is heavily influenced by the general level of market interest rates, consumer confidence and consumer spending. Funds received from loan maturities and principal payments on loans for the years ended December 31, 2017, 2016 and 2015 were $2.657 billion, $2.673 billion and $2.001 billion, respectively.  Loan originations for the years ended December 31, 2017, 2016 and 2015 were $2.844 billion, $2.959 billion and $2.322 billion, respectively.  We also sell a portion of the loans we originate, and the cash flows from such sales for the years ended December 31, 2017, 2016 and 2015 were $73.1 million, $242.4 million and $2.5 million, respectively.

We experience significant cash flows from our portfolio of marketable securities as principal payments are received on mortgage-backed securities and as investment securities mature or are called. Cash flow from the repayment of principal and the maturity or call of marketable securities for the years ended December 31, 2017, 2016 and 2015 were $220.0 million, $290.3 million and $352.5 million, respectively.

When necessary, we utilize borrowings as a source of liquidity and as a source of funds for long-term investment when market conditions permit. The net cash flow from the receipt and repayment of borrowings was a net decrease of $34.7 million, and increases of $832.1 million and $86.9 million for the years ended December 31, 2017, 2016 and 2015, respectively.

Northwest Bancshares, Inc. is a separate legal entity from Northwest Bank and must provide for its own liquidity to pay dividends to shareholders and to repurchase its common stock and for other corporate purposes. Northwest Bancshares' primary source of liquidity is the dividend payments it receives from Northwest Bank. The payment of dividends by Northwest Bank is subject to regulatory requirements. At December 31, 2017, Northwest Bancshares, Inc. (on an unconsolidated basis) had liquid assets of $26.6 million.

Other activity with respect to cash flow was the payment of cash dividends on common stock in the amount of $65.2 million, $60.2 million and $52.8 million for the ended December 31, 2017, 2016 and 2015, respectively.

At December 31, 2017, stockholders’ equity totaled $1.171 billion. During 2017 our Board of Directors declared regular quarterly dividends totaling $0.64 per share of common stock.

We monitor the capital levels of Northwest Bank to provide for current and future business opportunities and to meet regulatory guidelines for “well capitalized” institutions. Northwest Bank is required by the Pennsylvania Department of Banking and Securities and the FDIC to meet minimum capital adequacy requirements.  At December 31, 2017, Northwest Bank exceeded all regulatory minimum capital requirements and is considered to be “well capitalized.” In addition, as of December 31, 2017, we

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were not aware of any recommendation by a regulatory authority that, if it were implemented, would have a material effect on liquidity, capital resources or operations.

Regulatory Capital Requirements

Northwest Bank is subject to minimum capital requirements established by the Federal Deposit Insurance Corporation. See Item 1. Business “Supervision and Regulation — Capital Requirements and Prompt Corrective Action”.  The following table summarizes Northwest Bank’s total shareholders' equity, regulatory capital, total risk-based assets, and leverage and risk-based capital ratios at the dates indicated.

	At December 31,
	2017			2016
	(Dollars in thousands)
Total shareholders' equity (GAAP capital)	$	1,197,461		1,189,836
Accumulated other comprehensive income	19,686			15,152
Less: non-qualifying intangible assets	(256,704		)	(304,660	)
CET 1 capital	960,443			900,328
Additions to Tier 1 capital	—			—
Leverage or Tier 1 capital	960,443			900,328
Plus: Tier 2 capital (1)	56,808			60,951
Total risk-based capital	$	1,017,251		961,279
Average assets for leverage ratio	$	9,237,051		9,393,372
Net risk-weighted assets including off-balance sheet items	$	7,169,503		7,063,749
CET 1 capital ratio	13.396		%	12.746	%
Minimum requirement	5.750		%	5.125	%
Leverage capital ratio	10.400		%	9.585	%
Minimum requirement	4.000		%	4.000	%
Total risk-based capital ratio	14.190		%	13.609	%
Minimum requirement	9.250		%	8.625	%

(1) Tier 2 capital consists of the allowance for loan losses, which is limited to 1.25% of total risk-weighted assets as detailed under the regulations of the FDIC, and 45% of pre-tax net unrealized gains on securities available-for-sale.

Northwest Bank is also subject to capital guidelines of the Pennsylvania Department of Banking. Although not adopted in regulation form, the Department of Banking requires 6% leverage capital and 10% total risk-based capital.  See “Item 1. Business — Supervision and Regulation — Capital Requirements” and “Prompt Corrective Action”.

Contractual Obligations

We are obligated to make future payments according to various contracts.  The following table presents the expected future payments of the contractual obligations aggregated by obligation type at December 31, 2017. 

	Payments due
	Less than one year		One year to less than three years	Three years to less than five years	Five years or greater	Total
	(In thousands)
Long-term debt (1)	$	—	—	—	—	—
Junior subordinated debentures (1)	—		—	—	111,213	111,213
Operating leases (2)	4,395		6,026	3,852	7,413	21,686
Total	$	4,395	6,026	3,852	118,626	132,899
Commitments to extend credit	$	181,058	—	—	—	181,058

(1) See note 10 to the consolidated financial statements, Borrowed Funds, for additional information.

(2) See note 7 to the consolidated financial statements, Premises and Equipment, for additional information.

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Impact of Inflation and Changing Prices

The Consolidated Financial Statements and notes thereto, presented elsewhere herein, have been prepared in accordance with generally accepted accounting principles, which require the measurement of financial position and operating results in terms of historical dollars without considering the change in the relative purchasing power of money over time and due to inflation.  The impact of inflation is reflected in the increased cost of our operations.  Unlike most industrial companies, nearly all of our assets and liabilities are monetary.  As a result, interest rates have a greater impact on our performance than do the effects of general levels of inflation.  Interest rates do not necessarily move in the same direction or to the same extent as the price of goods and services.

Off-Balance Sheet Arrangements

As a financial services provider, we routinely are a party to various financial instruments with off-balance-sheet risks, such as commitments to extend credit and unused lines of credit.  While these contractual obligations represent our future cash requirements, a significant portion of commitments to extend credit may expire without being drawn upon.  Such commitments are subject to the same credit policies and approval process accorded to loans we make.  In addition, we routinely enter into commitments to purchase and sell residential mortgage loans.

ITEM 7A.             QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Market Risk Management

The matching of assets and liabilities may be analyzed by examining the extent to which such assets and liabilities are “interest rate sensitive” and by monitoring an institution’s interest rate sensitivity “gap.”  An asset or liability is said to be interest rate sensitive within a specific time period if it will mature or re-price within that time period.  The interest rate sensitivity gap is defined as the difference between the amount of interest-earning assets maturing or re-pricing within a specific time period and the amount of interest-bearing liabilities maturing or re-pricing within that same time period.  A gap is considered positive when the amount of interest rate sensitive assets exceeds the amount of interest rate sensitive liabilities. A gap is considered negative when the amount of interest rate sensitive liabilities exceeds the amount of interest rate sensitive assets.  During a period of rising interest rates, a negative gap would tend to adversely affect net interest income while a positive gap would tend to positively affect net interest income.  Similarly, during a period of falling interest rates, a negative gap would tend to positively affect net interest income while a positive gap would tend to adversely affect net interest income.

Our practice is to reduce our exposure to interest rate risk generally by matching the maturities of our interest rate sensitive assets and liabilities and by increasing the interest rate sensitivity of our interest-earning assets. We purchase adjustable-rate investment securities and mortgage-backed securities which at December 31, 2017 totaled $146.2 million, and originate adjustable-rate loans, which at December 31, 2017, totaled $2.856 billion or 35.8% of our gross loan portfolio. Of our $8.603 billion of interest-earning assets at December 31, 2017, $3.017 billion, or 35.1%, consisted of assets with adjustable rates of interest.  When market conditions are favorable, we also attempt to reduce interest rate risk by lengthening the maturities of our interest-bearing liabilities by using FHLB advances as a source of long-term fixed-rate funds, if necessary, and by promoting longer-term certificates of deposit.

At December 31, 2017, total interest-earning assets maturing or re-pricing within one year exceeded total interest-bearing liabilities maturing or re-pricing in the same period by $268.2 million, representing a positive one-year gap ratio of 2.87%.

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The following table sets forth, on a carrying value basis, the amounts of interest-earning assets and interest-bearing liabilities outstanding at December 31, 2017, which are expected to re-price or mature, based upon certain assumptions, in each of the future time periods shown.  Except as stated below, the amounts of assets and liabilities shown that re-price or mature during a particular period were determined in accordance with the earlier of the term of re-pricing or the contractual term of the asset or liability.  We believe that these assumptions approximate the standards used in the financial services industry and consider them appropriate and reasonable.

	Amounts maturing or re-pricing
	Within 1 year			Over 1-3 years		Over 3-5 years		Over 5-10 years		Over 10-20 years		Total
	(Dollars in thousands)
Rate-sensitive assets:
Interest-earning deposits	$	14,900		—		—		—		—		14,900
Mortgage-backed securities:
Fixed rate	85,777			137,529		103,672		121,491		—		448,469
Variable-rate	111,935			—		—		—		—		111,935
Investment securities	109,880			91,768		53,366		6,795		—		261,809
Mortgage loans:
Adjustable rate	27,370			13,567		8,352		3,563		—		52,852
Fixed-rate	292,204			547,753		509,147		966,721		393,805		2,709,630
Home equity loans:
Adjustable rate	593,014			—		—		—		—		593,014
Fixed-rate	144,971			290,206		187,997		94,151		16		717,341
Consumer loans	351,371			285,897		20,032		28		—		657,328
Commercial real estate loans	1,279,543			761,992		355,416		57,401		374		2,454,726
Commercial loans	417,102			100,767		47,429		13,192		2,246		580,736
Total rate-sensitive assets	3,428,067			2,229,479		1,285,411		1,263,342		396,441		8,602,740
Rate-sensitive liabilities:
Time deposits	698,613			430,572		273,573		9,777		88		1,412,623
Money market demand accounts	1,682,271			—		—		—		25,179		1,707,450
Savings deposits	204,922			356,268		356,268		736,121		—		1,653,579
Interest-bearing demand deposits	354,604			175,232		175,232		438,080		299,779		1,442,927
Other borrowings	108,238			—		—		—		—		108,238
Trust preferred securities	111,213			—		—		—		—		111,213
Total rate-sensitive liabilities	3,159,861			962,072		805,073		1,183,978		325,046		6,436,030
Interest sensitivity gap per period	$	268,206		1,267,407		480,338		79,364		71,395		2,166,710
Cumulative interest sensitivity gap	$	268,206		1,535,613		2,015,951		2,095,315		2,166,710		2,166,710
Cumulative interest sensitivity gap as a percentage of total assets	2.87		%	16.40	%	21.54	%	22.38	%	23.15	%	23.15	%
Cumulative interest-earning assets as a percent of cumulative interest-bearing liabilities	108.49		%	137.25	%	140.92	%	134.29	%	133.67	%	133.67	%

We have an Asset/ Liability Committee, consisting of members of management, which meets monthly to review market interest rates, economic conditions, the pricing of interest earning assets and interest bearing liabilities and our balance sheet structure.  On a quarterly basis, this committee also reviews our interest rate risk position and our cash flow projections.

Our Board of Directors has a Risk Management Committee, which meets quarterly and reviews interest rate risks and trends, our interest sensitivity position, our liquidity position and the market risk inherent in our investment portfolio.

In an effort to assess market risk, we use a simulation model to determine the effect of immediate incremental increases and decreases in interest rates on net interest income, net income and the market value of our equity.  Certain assumptions are made regarding loan prepayments and decay rates of savings and interest-bearing demand deposit accounts.  Because it is difficult

53

to accurately project the market reaction of depositors and borrowers, the effect of actual changes in interest rates on these assumptions may differ from simulated results.  We have established the following guidelines for assessing interest rate risk:

Net interest income simulation.  Given a parallel shift of 100 basis points (“bps”), 200 bps, and 300 bps in interest rates, the estimated net interest income may not decrease by more than 5%, 10%, and 15%, respectively, within a one-year period.

Net income simulation.  Given a parallel shift of 100 bps, 200 bps, and 300 bps in interest rates, the estimated net income may not decrease by more than 10%, 20%, and 30%, respectively, within a one-year period.

Market value of equity simulation.  The market value of our equity is the present value of our assets and liabilities.  Given a parallel shift of 100 bps, 200 bps, and 300 bps in interest rates, the market value of equity may not decrease by more than 15%, 30%, and 35%, respectively, from the computed economic value at current interest rate levels.

The following table illustrates the simulated impact of a parallel 100 bps, 200 bps or 300 bps upward or 100 bps downward movement in interest rates on net interest income, net income, return on average equity, earnings per share, and market value of equity.  These analyses were prepared assuming that total interest-earning asset and interest-bearing liability levels at December 31, 2017 remain constant.  The impact of the rate movements was computed by simulating the effect of an immediate and sustained shift in interest rates over a twelve-month period from December 31, 2017 levels.

	Increase									Decrease
Parallel shift in interest rates over the next 12 months	100 bps			200 bps			300 bps			100 bps
Projected percentage increase/ (decrease) in net interest income	0.2		%	0.8		%	0.8		%	(6.0		)%
Projected percentage increase/ (decrease) in net income	2.0		%	4.8		%	5.5		%	(14.9		)%
Projected increase/ (decrease) in return on average equity	1.9		%	4.6		%	5.3		%	(14.3		)%
Projected increase/ (decrease) in earnings per share	$	0.02		$	0.06		$	0.06		$	(0.17	)
Projected percentage decrease in market value of equity	(3.9		)%	(7.3		)%	(11.4		)%	0.3		%

The following table illustrates the simulated impact of a parallel 100 bps, 200 bps or 300 bps upward or 100 bps downward movement in interest rates on net interest income, net income, return on average equity, earnings per share, and market value of equity.  These analyses were prepared assuming that total interest-earning asset and interest-bearing liability levels at December 31, 2016 remain constant.  The impact of the rate movements was computed by simulating the effect of an immediate and sustained shift in interest rates over a twelve-month period from December 31, 2016 levels.

	Increase									Decrease
Parallel shift in interest rates over the next 12 months	100 bps			200 bps			300 bps			100 bps
Projected percentage increase/ (decrease) in net interest income	0.5		%	0.7		%	0.8		%	(6.2		)%
Projected percentage increase/ (decrease) in net income	3.0		%	5.3		%	6.5		%	(17.0		)%
Projected increase/ (decrease) in return on average equity	2.9		%	5.0		%	6.3		%	(16.5		)%
Projected increase/ (decrease) in earnings per share	$	0.03		$	0.05		$	0.06		$	(0.16	)
Projected percentage decrease in market value of equity	(2.5		)%	(5.1		)%	(8.1		)%	—		%

The figures included in the tables above represent projections that were computed based upon certain assumptions including loan prepayment rates and deposit decay rates.  These assumptions are inherently uncertain and, as a result, we cannot precisely predict the impact of changes in interest rates.  Actual results may differ significantly due to timing, magnitude and frequency of interest rate changes and changes in market conditions.

54

When assessing our interest rate sensitivity, analysis of historical trends indicates that loans will prepay at various speeds (or annual rates) depending on the variance between the weighted average portfolio rates and the current market rates.  In preparing the table above, the following assumptions were used:  (i) adjustable-rate mortgage loans will prepay at an annual rate of 6% to 14%; (ii) fixed-rate mortgage loans will prepay at an annual rate of 5% to 14%, depending on the type of loan; (iii) commercial loans will prepay at an annual rate of 8% to 14%; (iv) consumer loans held by Northwest Bank will prepay at an annual rate of 18% to 24%; and (v) consumer loans that were formerly held by Northwest Consumer Discount Company will prepay at an annual rate of 55% to 70%.  In regards to our deposits, it has been assumed that (i) fixed maturity deposits will not be withdrawn prior to maturity; (ii) a significant majority of money market accounts will re-price immediately; (iii) savings accounts will gradually re-price over three years; and (iv) checking accounts will re-price either when the rates on such accounts re-price as interest rate levels change, or when deposit holders withdraw funds from such accounts and select other types of deposit accounts, such as certificate accounts, which may have higher interest rates.  For purposes of this analysis, management has estimated, based on historical trends, that $354.6 million, or 24.6%, of our interest-bearing demand accounts and $204.9 million, or 12.4%, of our savings deposits are interest sensitive and may re-price in one year or less, and that the remainder may re-price over longer time periods.

The above assumptions are annual percentages based on remaining balances and should not be regarded as indicative of the actual prepayments and withdrawals that we may experience. Moreover, certain shortcomings are inherent in the analysis presented by the foregoing table. For example, although certain assets and liabilities may have similar maturities or periods to re-pricing, they may react in different degrees to changes in market interest rates.  Also, interest rates on certain types of assets and liabilities may fluctuate in advance of or lag behind changes in market interest rates. Additionally, certain assets, such as some adjustable-rate loans, have features that restrict changes in interest rates on a short-term basis and over the life of the asset.  Moreover, in the event of a change in interest rates, prepayment and early withdrawal levels would likely deviate significantly from those assumed in preparing the table.

In addition, we regularly measure and monitor the market value of our net assets and the changes therein.  While fluctuations are expected because of changes in interest rates, we have established policy limits for various interest rate scenarios.  Given interest rate shocks of +100 to +300 bps and -100 bps the market value of net assets is not expected to decrease by more than 15% to 35%.

55

ITEM 8.               FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Management’s Report on Internal Control Over Financial Reporting

Management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Rule 13a-15(f) under the Securities Exchange Act of 1934.

Management, including the principal executive officer and principal financial officer, has assessed the effectiveness of the Company’s internal control over financial reporting as of December 31, 2017.  In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission in Internal Control — Integrated Framework (2013).  Based on such assessment, management concluded that, as of December 31, 2017, the Company’s internal control over financial reporting is effective based upon those criteria.

KPMG LLP, an independent registered public accounting firm, has audited the consolidated financial statements included in this Report and has issued a report with respect to the effectiveness of the Company’s internal control over financial reporting.

/s/ William J. Wagner	/s/ William W. Harvey, Jr.
William J. Wagner	William W. Harvey, Jr.
Chief Executive Officer	Chief Financial Officer

56

Report of Independent Registered Public Accounting Firm

To the Board of Directors and Shareholders

Northwest Bancshares, Inc.:

Opinion on Internal Control Over Financial Reporting

We have audited Northwest Bancshares, Inc.’s (the “Company”) internal control over financial reporting as of December 31, 2017, based on criteria established in Internal Control Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2017, based on criteria established in Internal Control Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the consolidated statements of financial condition of the Company as of December 31, 2017 and 2016, the related consolidated statements of income, comprehensive income, shareholders’ equity, and cash flows for each of the years in the three-year period ended December 31, 2017, and the related notes (collectively, the consolidated financial statements), and our report dated March 1, 2018 expressed an unqualified opinion on those consolidated financial statements. 

Basis for Opinion

The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Form 10-K Management Assertions on the Effectiveness of Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audit also included performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

Definition and Limitations of Internal Control Over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

/s/ KPMG LLP 

Pittsburgh, Pennsylvania

March 1, 2018

57

Report of Independent Registered Public Accounting Firm

To the Board of Directors and Shareholders

Northwest Bancshares, Inc.:

Opinion on the Consolidated Financial Statements

We have audited the accompanying consolidated statements of financial condition of Northwest Bancshares, Inc. (the “Company”) as of December 31, 2017 and 2016, the related consolidated statements of income, comprehensive income, shareholders’ equity, and cash flows for each of the years in the three year period ended December 31, 2017, and the related notes (collectively, the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2017 and 2016, and the results of its operations and its cash flows for each of the years in the three year period ended December 31, 2017, in conformity with U.S. generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the Company’s internal control over financial reporting as of December 31, 2017, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission, and our report dated March 1, 2018 expressed an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting.

Basis for Opinion

These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.

/s/ KPMG LLP

We have served as the Company’s auditor since 1963.

Pittsburgh, Pennsylvania

March 1, 2018

58

NORTHWEST BANCSHARES, INC.

CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION

(Amounts in thousands, excluding per share data)

	December 31,
	2017			2016
Assets
Cash and cash equivalents	$	77,710		389,867
Marketable securities available-for-sale (amortized cost of $800,094 and $825,552)	792,535			826,200
Marketable securities held-to-maturity (fair value of $29,667 and $20,426)	29,678			19,978
Loans receivable, net of allowance for loan losses of $56,795 and $60,939	7,736,614			7,496,408
Assets held-for-sale	—			152,528
Accrued interest receivable	23,352			21,699
Real estate owned, net	5,666			4,889
Federal Home Loan Bank stock, at cost	11,733			7,390
Premises and equipment, net	151,944			161,185
Bank owned life insurance	171,547			171,449
Goodwill	307,420			307,420
Other intangible assets	25,669			32,433
Other assets	30,066			32,194
Total assets	$	9,363,934		9,623,640
Liabilities and Shareholders’ equity
Liabilities:
Deposits	$	7,826,989		7,882,321
Liabilities held-for-sale	—			215,657
Borrowed funds	108,238			142,899
Advances by borrowers for taxes and insurance	40,825			36,879
Accrued interest payable	460			635
Other liabilities	68,485			63,373
Junior subordinated deferrable interest debentures held by trusts that issued guaranteed capital debt securities	111,213			111,213
Total liabilities	8,156,210			8,452,977
Shareholders’ equity:
Preferred stock, $0.01 par value: 50,000,000 authorized, no shares issued	—			—
Common stock, $0.01 par value: 500,000,000 shares authorized, 102,394,828 and 101,699,406 shares issued, respectively	1,027			1,017
Paid-in capital	730,719			718,834
Retained earnings	508,058			478,803
Accumulated other comprehensive loss	(32,080		)	(27,991	)
Total shareholders’ equity	1,207,724			1,170,663
Total liabilities and shareholders’ equity	$	9,363,934		9,623,640

See accompanying notes to consolidated financial statements.

59

NORTHWEST BANCSHARES, INC.

CONSOLIDATED STATEMENTS OF INCOME

(Amounts in thousands, excluding per share data)

	Years ended December 31,
	2017			2016		2015
Interest income:
Loans receivable	$	339,992		329,039		298,665
Mortgage-backed securities	11,343			8,540		8,823
Taxable investment securities	3,749			3,409		4,520
Tax-free investment securities	2,023			2,732		4,313
FHLB dividends	250			1,371		2,828
Interest-earning deposits	1,499			543		431
Total interest income	358,856			345,634		319,580
Interest expense:
Deposits	23,057			23,465		24,055
Borrowed funds	5,014			14,834		32,272
Total interest expense	28,071			38,299		56,327
Net interest income	330,785			307,335		263,253
Provision for loan losses	19,751			13,542		9,712
Net interest income after provision for loan losses	311,034			293,793		253,541
Noninterest income:
Gain on sale of investments, net	1,148			625		1,037
Service charges and fees	49,717			44,113		38,362
Trust and other financial services income	17,987			14,103		12,342
Insurance commission income	9,013			10,522		9,526
Loss on real estate owned, net	(797		)	(39	)	(1,989	)
Income from bank owned life insurance	6,093			5,361		4,338
Mortgage banking income	1,418			4,894		933
Gain on sale offices	17,186			—		—
Other operating income	8,715			5,781		4,287
Total noninterest income	110,480			85,360		68,836
Noninterest expense:
Compensation and employee benefits	150,228			140,927		119,818
Premises and occupancy costs	28,863			26,134		24,641
Office operations	16,342			14,898		12,337
Collections expense	2,849			2,431		3,247
Processing expenses	39,086			34,859		30,780
Marketing expenses	9,607			8,852		8,499
Federal deposit insurance premiums	3,518			4,404		5,109
Professional services	10,293			7,865		6,906
Amortization of intangible assets	6,764			4,259		1,688
Real estate owned expense	1,004			1,004		2,070
Restructuring/ acquisition expense	4,419			12,213		9,751
FHLB prepayment penalty	—			36,978		—
Other expense	12,630			13,014		9,031
Total noninterest expense	285,603			307,838		233,877
Income before income taxes	135,911			71,315		88,500
Provision for income taxes:
Federal	34,801			20,313		24,010
State	6,643			1,335		3,950
Total provision for income taxes	41,444			21,648		27,960
Net income	$	94,467		49,667		60,540
Basic earnings per share	$	0.94		0.50		0.64
Diluted earnings per share	$	0.92		0.49		0.64

See accompanying notes to consolidated financial statements

60

NORTHWEST BANCSHARES, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Amounts in thousands)

	Years ended December 31,
	2017			2016		2015
Net Income	$	94,467		49,667		60,540
Other comprehensive income net of tax:
Net unrealized holding gains/ (losses) on marketable securities:
Unrealized holding gains/ (losses), net of tax of $1,915, $1,742 and $(204), respectively	(2,478		)	(2,728	)	315
Reclassification adjustment for gains included in net income, net of tax of $1,488, $129 and $289, respectively	(2,326		)	(202	)	(451	)
Net unrealized holding losses on marketable securities	(4,804		)	(2,930	)	(136	)
Change in fair value of interest rate swaps, net of tax of $(585), $(539) and $(699), respectively	1,087			1,001		1,299
Defined benefit plans:
Net loss, net of tax of $826, $3,061 and $1,408, respectively	(1,254		)	(2,399	)	(2,203	)
Amortization of prior service costs, net of tax of $(613), $(606) and $(560), respectively	882			872		875
Net loss on defined benefit plans	(372		)	(1,527	)	(1,328	)
Other comprehensive loss	(4,089		)	(3,456	)	(165	)
Total comprehensive income	$	90,378		46,211		60,375

See accompanying notes to consolidated financial statements

61

NORTHWEST BANCSHARES, INC.

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY

For the years ended December 31, 2017, 2016 and 2015

(Amounts in thousands, excluding per share data)

	Common stock			Paid-in capital		Retained earnings		Accumulated other comprehensive income/ (loss)		Unallocated common stock of ESOP		Total shareholders’ equity
Balance at December 31, 2014	$	947		626,134		481,577		(24,370	)	(21,641	)	1,062,647
Comprehensive income:
Net income	—			—		60,540		—		—		60,540
Other comprehensive loss, net of tax of $234	—			—		—		(165	)	—		(165	)
Total comprehensive income	—			—		60,540		(165	)	—		60,375
Shares issued to acquire LNB Bancorp, Inc.	70			90,538		—		—		—		90,608
Exercise of stock options	5			4,298		—		—		—		4,303
Share repurchases	(6		)	(7,841	)	—		—		—		(7,847	)
Stock-based compensation expense, including tax benefits of $332	3			4,474		—		—		1,425		5,902
Dividends paid ($0.56 per share)	—			—		(52,825	)	—		—		(52,825	)
Balance at December 31, 2015	1,019			717,603		489,292		(24,535	)	(20,216	)	1,163,163
Comprehensive income:
Net income	—			—		49,667		—		—		49,667
Other comprehensive loss, net of tax of $3,787	—			—		—		(3,456	)	—		(3,456	)
Total comprehensive income	—			—		49,667		(3,456	)	—		46,211
ESOP termination	(14		)	(13,896	)	—		—		13,910		—
Exercise of stock options	11			10,845		—		—		—		10,856
Share repurchases	(2		)	(1,750	)	—		—		—		(1,752	)
Stock-based compensation expense, including tax benefits of $1,425	3			6,032		—		—		6,306		12,341
Dividends paid ($0.60 per share)	—			—		(60,156	)	—		—		(60,156	)
Balance at December 31, 2016	1,017			718,834		478,803		(27,991	)	—		1,170,663
Comprehensive income:
Net income	—			—		94,467		—		—		94,467
Other comprehensive loss, net of tax of $3,031	—			—		—		(4,089	)	—		(4,089	)
Total comprehensive income	—			—		94,467		(4,089	)	—		90,378
Exercise of stock options	6			6,995		—		—		—		7,001
Stock-based compensation expense	4			4,890		—		—		—		4,894
Dividends paid ($0.64 per share)	—			—		(65,212	)	—		—		(65,212	)
Balance at December 31, 2017	$	1,027		730,719		508,058		(32,080	)	—		1,207,724

 See accompanying notes to consolidated financial statements

62

NORTHWEST BANCSHARES, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Amounts in thousands)

	Years ended December 31,
	2017			2016		2015
Operating activities:
Net Income	$	94,467		49,667		60,540
Adjustments to reconcile net income to net cash provided by operating activities:
Provision for loan losses	19,751			13,542		9,712
Net gain on sale of assets	(627		)	(4,499	)	(921	)
Net gain on sale offices	(17,186		)	—		—
Net depreciation, amortization and accretion	14,293			15,424		8,958
Decrease in other assets	7,161			25,953		37,969
Increase/ (decrease) in other liabilities	11,694			4,801		(18,998	)
Net amortization of premium on marketable securities	2,017			2,139		1,149
Noncash compensation expense related to stock benefit plans	4,894			10,916		5,570
Noncash impairment of real estate owned	1,231			1,481		2,923
Deferred income tax expense	11,317			2,734		6,290
FHLB prepayment penalty	—			24,520		—
Origination of loans held for sale	(66,058		)	(252,204	)	(2,504	)
Proceeds from sale of loans held for sale	73,103			242,428		2,514
Net cash provided by operating activities	156,057			136,902		113,202
Investing activities:
Purchase of marketable securities held-to-maturity	(23,621		)	—		—
Purchase of marketable securities available-for-sale	(218,292		)	(238,673	)	(59,980	)
Proceeds from maturities and principal reductions of marketable securities held-to-maturity	13,902			11,700		72,265
Proceeds from maturities and principal reductions of marketable securities available-for-sale	206,089			278,621		280,277
Proceeds from sale of marketable securities available-for-sale	36,811			1,951		1,246
Net increase in loans	(120,076		)	(33,434	)	(319,088	)
Net (purchases)/ redemptions of Federal Home Loan Bank stock	(4,343		)	33,513		(3,770	)
Proceeds from sale of real estate owned	4,342			8,113		13,961
Sale of real estate owned for investment	608			607		608
Purchases of premises and equipment	(3,719		)	(15,227	)	(13,223	)
Acquisitions, net of cash received	—			1,102,237		(61,108	)
Net cash provided by/ (used in) investing activities	(108,299		)	1,149,408		(88,812	)

63

NORTHWEST BANCSHARES, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Amounts in thousands)

	Years ended December 31,
	2017			2016		2015
Financing activities:
Net decrease in deposits	$	(270,989	)	(157,457	)	(60,236	)
Proceeds from long-term borrowings	—			—		135,000
Repayments of long-term borrowings	—			(774,863	)	(172,552	)
Net increase/ (decrease) in short-term borrowings	(34,661		)	(81,765	)	61,281
Increase/ (decrease) in advances by borrowers for taxes and insurance	3,946			(139	)	2,975
Redemption of Junior subordinated debentures	—			—		(8,119	)
Share repurchases	—			(1,752	)	(7,847	)
Cash dividends paid on common stock	(65,212		)	(60,156	)	(52,825	)
Proceeds from stock options exercised	7,001			10,856		4,303
Excess tax benefit from stock-based compensation	—			1,425		332
Net cash used in financing activities	(359,915		)	(1,063,851	)	(97,688	)
Net increase/ (decrease) in cash and cash equivalents	$	(312,157	)	222,459		(73,298	)
Cash and cash equivalents at beginning of period	$	389,867		167,408		240,706
Net increase/ (decrease) in cash and cash equivalents	(312,157		)	222,459		(73,298	)
Cash and cash equivalents at end of period	$	77,710		389,867		167,408
Cash paid during the period for:
Interest on deposits and borrowings (including interest credited to deposit accounts of $22,385, $22,213 and $21,949, respectively)	$	28,254		39,649		55,270
Income taxes	32,270			9,710		16,719
Noncash activities:
Business acquisitions
Fair value of assets acquired	$	—		546,247		1,160,190
Net cash (paid)/ received	—			1,102,237		(61,108	)
Liabilities assumed	$	—		1,648,484		1,099,082
Loan foreclosures and repossessions	$	8,130		6,252		7,633
Sale of real estate owned financed by the Company	168			498		768

 See accompanying notes to consolidated financial statements

64

NORTHWEST BANCSHARES, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements 

December 31, 2017, 2016 and 2015

(All dollar amounts presented in tables are in thousands, except as indicated)

(1)Summary of Significant Accounting Policies

(a)Nature of Operations

Northwest Bancshares, Inc., a Maryland corporation headquartered in Warren, Pennsylvania, is the federal savings and loan holding company for its wholly owned subsidiary, Northwest Bank. Northwest Bank, a Pennsylvania chartered savings bank, offers personal and business deposit and loan products as well as investment management and insurance services through its 172 banking locations in Pennsylvania, New York, and Ohio.

(b)Principles of Consolidation

The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries after elimination of all intercompany accounts and transactions.

(c)Cash and Cash Equivalents

For purposes of the statements of financial condition and cash flows, cash and cash equivalents include cash and amounts due from banks, interest-bearing deposits in other financial institutions, federal funds sold, and other short-term investments with original maturities of three months or less.

(d)Investment Securities

We classify marketable securities at the time of purchase as held-to-maturity, available-for-sale, or trading. Securities for which management has the intent and ability to hold until maturity are classified as held-to-maturity and are carried at cost, adjusted for amortization of premiums and accretion of discounts on a level yield basis (amortized cost).  If it is management’s intent at the time of purchase to hold securities for an indefinite period of time and/ or to use such securities as part of its asset/ liability management strategy, the securities are classified as available-for-sale and are carried at fair value, with unrealized gains and losses reported as accumulated other comprehensive income/ (loss), a separate component of shareholders’ equity, net of tax. Securities classified as available-for-sale include securities that may be sold in response to changes in interest rates, resultant prepayment risk, or other market factors. Securities that are bought and held principally for the purpose of selling them in the near term are classified as trading and are reported at fair value, with changes in fair value included in earnings. The cost of securities sold is determined on a specific identification basis. We held no securities classified as trading at or during the years ended December 31, 2017 and 2016.

On at least a quarterly basis, we review our investments for other-than-temporary impairment (“OTTI”).  An investment security is deemed impaired if the fair value of the investment is less than its amortized cost.  If an investment security is determined to be impaired, we evaluate whether the decline in value is other-than-temporary.  We consider whether or not we expect to receive all of the contractual cash flows from the investment security based on factors that include, but are not limited to the creditworthiness of the issuer and the historical and projected performance of the underlying collateral.  Also, we may evaluate the business and financial outlook of the issuer, as well as broader economic performance indicators.  We consider both our intent to sell and the likelihood that we will not have to sell the investment securities before recovery of their cost basis during our evaluation. Impairment that is deemed credit related is recognized in earnings while impairment deemed noncredit related is recorded in accumulated other comprehensive income, if we do not intend to sell nor it is not likely we will be required to sell the investment security.  If we intend to sell the investment security or if it is more likely than not that we will be required to sell the investment security, the entire impairment is recorded in earnings.

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NORTHWEST BANCSHARES, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements 

December 31, 2017, 2016 and 2015

(All dollar amounts presented in tables are in thousands, except as indicated)

(e)Loans Receivable

Our loan segments consist of Personal Banking and Business Banking loans.  Personal Banking loans include; residential mortgage, home equity and consumer loans.  Business Banking loans include; commercial real estate and commercial loans.  Originated loans are carried at their unpaid principal balance net of any deferred origination fees or costs and the allowance for loan losses. Interest income on loans is credited to income as earned. Interest earned on loans for which no payments were received during the month is accrued at month end. Accrued interest on loans more than 90 days delinquent is reversed and such loans are placed on nonaccrual status.

All loans are placed on nonaccrual status when principal or interest is 90 days or more delinquent or when there is reasonable doubt that interest or principal will not be collected in accordance with the contractual terms. Interest receipts on all nonaccrual and impaired loans are recognized as interest income when it has been determined that all principal and interest will be collected or are applied to principal when collectability of contractual principal is in doubt.  Nonaccrual loans generally are restored to an accrual basis when principal and interest become current and a period of performance has been established in accordance with the contractual terms, typically six months.

A loan is considered to be a troubled debt restructured loan ("TDR") when the borrower is experiencing financial difficulties and the restructuring constitutes a concession. TDRs may include modifications of terms of loans, receipts of assets from borrowers in partial or full satisfaction of loans, or a combination thereof. TDRs are impaired loans. A modified loan is determined to be a TDR based on the contractual terms as specified by the original loan agreement or the most recent modification. Once classified a TDR, a loan is removed from such classification under three circumstances: (1) the loan is paid off, (2) the loan is charged off, or (3) if, at the beginning of the current fiscal year, the loan has performed in accordance with the modified terms for a minimum of six consecutive months and at the time of modification the loan’s interest rate represented a then current market interest rate for a loan of similar risk.

Loan delinquency is measured based on the number of days since the payment due date.  Past due status is measured using the loan’s contractual maturity date.

Loan fees and certain direct loan origination costs are deferred and the net deferred fee or cost is then recognized using the level-yield method over the contractual life of the loan as an adjustment to interest income.

We identify certain residential mortgage loans which will be sold prior to maturity, as loans held for sale. These loans are recorded at the lower of amortized cost or fair value less estimated cost to sell. At December 31, 2017 and 2016, there were $3.1 million and $9.6 million residential mortgage loans classified as held for sale, respectively.

Acquired loans are initially measured at fair value with no carryover of the related allowance for loan losses. Determining the fair value of the loans involves estimating the amount and timing of principal and interest cash flows expected to be collected on the loans and discounting those cash flows at a market rate of interest.

The excess of cash flows expected at acquisition over the estimated fair value is referred to as the accretable discount and is recognized into interest income over the remaining life of the loan. The difference between contractually required payments at acquisition and the cash flows expected to be collected at acquisition is referred to as the nonaccretable discount. The nonaccretable discount represents estimated future credit losses expected to be incurred over the life of the loan. Subsequent decreases to the expected cash flows require us to evaluate the need for an allowance for loan losses. Subsequent improvements in expected cash flows result in the reversal of a corresponding amount of the nonaccretable discount which we then reclassify as accretable discount that is recognized into interest income over the remaining life of the loan using the interest method. Charge-offs of the principal amount on acquired loans would be first applied to the nonaccretable discount portion of the fair value adjustment.

Acquired loans that met the criteria for nonaccrual of interest prior to the acquisition may be considered performing upon acquisition, regardless of whether the customer is contractually delinquent, if we can reasonably estimate the timing and amount of the expected cash flows on such loans and if we expect to fully collect the new carrying value of the loans. As such, we may no longer consider the loan to be nonaccrual or nonperforming and may accrue interest on these loans, including the impact of any accretable discount. We have determined that we can reasonably estimate future cash flows on our current portfolio of acquired

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NORTHWEST BANCSHARES, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements 

December 31, 2017, 2016 and 2015

(All dollar amounts presented in tables are in thousands, except as indicated)

loans that are past due 90 days or more and on which we are accruing interest and we expect to fully collect the carrying value of the loans.

(f)Allowance for Loan Losses and Provision for Loan Losses

Provisions for estimated loan losses and the amount of the allowance for loan losses are based on losses inherent in the loan portfolio that are both probable and can be reasonably estimated at the date of the financial statements.

We consider a loan to be impaired when it is probable that we will be unable to collect all amounts due according to the contractual terms of the loan agreement. In evaluating whether a loan is impaired, we consider not only the amount that we expect to collect but also the timing of collection. Generally, if a delay in payment is insignificant (e.g., less than 30 days), a loan is not deemed to be impaired.

Business Banking loans greater than or equal to $1.0 million are reviewed to determine if they should be individually evaluated for impairment. Smaller balance, homogeneous loans (e.g., primarily residential mortgage, home equity and consumer loans) are evaluated collectively for impairment. When a loan is considered to be impaired, the amount of impairment is measured based on the present value of expected future cash flows discounted at the loan’s effective interest rate, the loan’s market price, or fair value of the collateral, less estimated cost to sell, if the loan is collateral dependent. Impairment losses are included in the allowance for loan losses. Impaired loans are charged-off or charged down when we believe that the ultimate collectability of a loan is not likely or the collateral value no longer supports the carrying value of the loan.

Interest income on non-performing loans is recognized using the cash basis method. For non-performing loans interest collected is credited to income in the period of recovery or applied to reduce principal if there is sufficient doubt about the collectability of principal.

The allowance for loan losses is shown as a valuation allowance to loans. The accounting policy for the determination of the adequacy of the allowance by portfolio segment requires us to make numerous complex and subjective estimates and assumptions relating to amounts which are inherently uncertain. The allowance for loan losses is maintained to absorb losses inherent in the loan portfolio as of the balance sheet date. The methodology used to determine the allowance for loan losses is designed to provide procedural discipline in assessing the appropriateness of the allowance for loan losses. Losses are charged against and recoveries are added to the allowance for loan losses.

For Business Banking loans the allowance for loan losses consists of:

• An allowance for impaired loans;

• An allowance for homogenous loans based on historical losses; and

• An allowance for homogenous loans based on environmental factors.

The allowance for impaired loans is based on individual analysis of all nonperforming loans greater than or equal to $1.0 million. The allowance is measured by the difference between the recorded value of impaired loans and their impaired value. The impaired value is either the present value of the expected future cash flows from the borrower, the market value of the loan, or the fair value of the collateral, less estimated cost to sell.

The allowance for homogeneous loans based on historical factors is a rolling three-year average of incurred losses, adjusted for a loss emergence period (the period of time from the event of loss to loss realization), applied to homogenous pools of loans categorized by similar risk characteristics, not including loans evaluated individually for impairment.

The allowance for homogeneous loans based on environmental factors augments the historical loss factors for changes in: economic conditions, lending policies and procedures, the nature and volume of the loan portfolio, management, delinquency trends, loan administration, collateral values, concentrations of credit, and other external factors including legal and regulatory factors.

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NORTHWEST BANCSHARES, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements 

December 31, 2017, 2016 and 2015

(All dollar amounts presented in tables are in thousands, except as indicated)

For Personal Banking loans the allowance for loan losses consists of:

• An allowance for loans 90 days or more delinquent;

• An allowance for homogenous loans based on historical losses; and

• An allowance for homogenous loans based on environmental factors.

The allowance for loans 90 days or more delinquent is based on the loss history of loans that have become 90 days or more delinquent.  We apply a historical loss factor to homogeneous pools of loans that are 90 days or more delinquent.

The allowance for homogeneous loans based on historical losses is a rolling three-year average of actual losses incurred, adjusted for a loss realization period, applied to homogenous pools of loans categorized by similar risk characteristics, not including loans that are 90 days or more delinquent.

The allocation of the allowance for loan losses is inherently subjective, and the entire allowance for loan losses is available to absorb loan losses regardless of the nature of the loss.

Personal Banking loans are charged-off or charged down when they become 180 days delinquent, unless the borrower has filed for bankruptcy.  Business Banking loans are charged-off or charged down when, in our opinion, they are no longer collectible or when it has been determined that the collateral value no longer supports the carrying value of the loan, for loans that are collateral dependent.

We have not made any material changes to our methodology for the calculation of the allowance for loan losses during the current year.

(g)Real Estate Owned

Real estate owned is comprised of property either acquired through foreclosure or voluntarily conveyed by borrowers. These assets are recorded on the date acquired at the lower of the loan balance or fair value of the collateral, less estimated disposition costs, with the fair value being determined by an appraisal. Any initial write-down is charged to the allowance for loan losses. Subsequently, foreclosed assets are valued at the lower of the amount recorded at acquisition date or the current fair value, less estimated disposition costs. Any subsequent write-down or gains or losses realized from the disposition of such property are credited or charged to noninterest income.

(h)    Restricted Investment in Federal Home Loan Bank Stock

Federal law requires a member institution of the Federal Home Loan Bank ("FHLB") system to hold stock of its district FHLB according to a predetermined formula. FHLB stock is carried at cost and evaluated or impairment based on the ultimate recoverability of the par value. FHLB stock can only be purchased, redeemed and transferred at par value. Dividends are reported in interest income in the Consolidated Statements of Income.

(i)Premises and Equipment

Premises and equipment are carried at cost, less accumulated depreciation and amortization. Depreciation is accumulated on a straight-line basis over the estimated useful lives of the related assets. Estimated lives range from three to 39 years. Amortization of leasehold improvements is accumulated on a straight-line basis over the terms of the related leases or the useful lives of the related assets, whichever is shorter.

(j)Goodwill

Goodwill is generated from the premium paid for an acquisition and is allocated to reporting units, which are either our reportable segments or one level below.  Reporting units are identified based upon analyzing each individual operating segment. A reporting unit is defined as a distinct, separately identifiable component of an operating segment for which complete, discrete financial information is available that management regularly reviews. 

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NORTHWEST BANCSHARES, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements 

December 31, 2017, 2016 and 2015

(All dollar amounts presented in tables are in thousands, except as indicated)

Goodwill is not subject to amortization but is tested for impairment at least annually and possibly more frequently if certain events occur or changes in circumstances arise. In testing goodwill for impairment, we have the option to first assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying value. If, after assessing all events and circumstances, we determine it is not more likely than not that the fair value of a reporting unit is less than its carrying value, then performing the two-step impairment test would be unnecessary. However, if we conclude otherwise, it would then be required to perform the first step of the goodwill impairment test, and continue to the second step, if necessary. Step 1 requires the fair value of each reporting unit be compared to its carrying amount, including goodwill. Determining the fair value of a reporting unit requires a high degree of subjective judgment, including developing cash flow projections, selecting appropriate discount rates, identifying relevant market comparables, incorporating general economic and market conditions and selecting an appropriate control premium. 

We conducted our annual impairment assessment as of June 30, 2017 by first performing a qualitative assessment of goodwill to determine if it was more likely than not that the fair value was less than the carrying value.  In performing a qualitative analysis, factors considered include, but are not limited to, macroeconomic conditions, industry and market conditions and overall financial performance.  The results of the qualitative assessment for 2017 indicated that it was not more likely than not that the fair value of the reporting unit was less than the carrying value.  Consequently, no additional quantitative two-step impairment test was required, and no impairment was recorded in 2017.  As of June 30, 2016, we performed a quantitative impairment test that did not result in any impairment.  Future events could cause us to conclude that goodwill has become impaired, which would result in recording an impairment loss. There were no changes in our operations that would cause us to update the assessment performed as of June 30, 2017 and 2016. Accordingly, we have determined that goodwill is not impaired as of December 31, 2017 and 2016.

(k)Core Deposit and Other Identifiable Intangibles

Through the assistance of an independent third party, we analyze and prepare a core deposit study for all bank acquisitions or other identifiable intangible asset study, such as customer lists, for all non-bank acquisitions. The core deposit study reflects the cumulative present value benefit of acquiring deposits versus an alternative source of funding. The other identifiable intangible asset study reflects the cumulative present value benefit of acquiring the income stream from an existing customer base versus developing new business relationships. Based upon analysis, the amount of the premium related to the core deposits or other identifiable intangibles of the business purchased is calculated along with the estimated life of the intangible. The intangible, which is recorded in other intangible assets, is then amortized to expense on an accelerated basis over an approximate life of typically between seven to eleven years.

(l)Bank-Owned Life Insurance

We own insurance on the lives of a certain group of current and former employees and directors. The policies were purchased to help offset the increase in the costs of various benefit plans, including healthcare, as well as the directors deferred compensation plan.  The cash surrender value of these policies is included as an asset on the consolidated statements of financial condition, and any increases in the cash surrender value are recorded as tax-free noninterest income on the consolidated statements of income. In the event of the death of an insured individual covered by these policies, after distribution to the insured’s beneficiaries, if any, we receive a tax-free death benefit, which is recorded as noninterest income.

(m)Deposits

Interest on deposits is accrued and charged to expense monthly and is paid or credited in accordance with the terms of the accounts.

(n)Pension Plans

We maintain multiple noncontributory defined benefit pension plans for substantially all of our employees.  The net periodic pension cost has been calculated using service cost, interest cost, expected returns on plan assets and net amortization.

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NORTHWEST BANCSHARES, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements 

December 31, 2017, 2016 and 2015

(All dollar amounts presented in tables are in thousands, except as indicated)

(o)Income Taxes

We join with our wholly owned subsidiaries in filing a consolidated federal income tax return.  In accordance with an intercompany tax allocation agreement, the applicable federal income tax expense or benefit is allocated to each subsidiary based upon taxable income or loss calculated on a separate company basis.  Each subsidiary is responsible for payment of its own federal income tax liability or receives reimbursement of federal income tax benefit.  In addition, deferred taxes are calculated and maintained on a separate company basis.

We account for income taxes under the asset and liability method.  The objective of the asset and liability method is to establish deferred tax assets and liabilities for temporary differences between the financial reporting and tax basis of our assets and liabilities based on the tax rates expected to be in effect when such amounts are realized or settled. The effect on deferred tax assets and liabilities with regard to a change in tax rates is recognized in the tax provision in the period the change is enacted.

(p)Stock-Related Compensation

We determine the fair value of each option award, estimated on the grant date, using the Black-Scholes-Merton option-pricing model. The Black-Scholes-Merton option-pricing model uses variables including; expected volatilities, expected term, risk-free discount rate and annual rate of quarterly dividends. Expected volatilities are based on historical volatility of the Company’s stock. The expected terms are based upon actual exercise and forfeiture experience of previous option grants. The risk-free rate is based on yields on U.S. Treasury securities of a similar maturity to the expected term of the options. For options outstanding at December 31, 2017 the following assumptions were used to determine the options fair value: (1) annual rate of quarterly dividends ranging from 3.2% to 5.1% based on historical dividends and market prices; (2) expected volatility of 17.0% to 22.0% based on historical average monthly volatility; (3) risk-free discount rates ranging from 1.7% to 3.1%; and (4) expected lives of seven to nine years based on previous grants. During the year ended December 31, 2017, we awarded 754,210 stock options to employees and 64,800 stock options to directors. Option awards are generally granted with an exercise price equal to the closing market price of the Company’s stock on the day before the grant date. The options granted in 2017 vest over a ten-year period, with the first vesting occurring on the grant date. New shares are issued when options are exercised.

During the year ended December 31, 2017, we awarded 353,750 common shares to employees and 24,300 common shares to directors. The common share awards granted in 2017 vest over a ten-year period, with the first vesting occurring on the grant date. For additional information regarding grants of stock options and common shares see note 14.

Stock-based employee compensation expense related to common share awards of $3.8 million, $3.5 million and $3.0 million was included in income before income taxes during the years ended December 31, 2017, 2016 and 2015, respectively. The effect on net income for the years ended December 31, 2017, 2016 and 2015 was a reduction of $2.3 million, $2.2 million and $1.8 million, respectively. Total compensation expense for unvested stock options of $4.1 million has yet to be recognized as of December 31, 2017. The weighted average period over which this remaining stock option expense will be recognized is approximately 4 years.

(q)Segment Reporting

As a result of the closure of the Northwest Consumer Discount Company in the third quarter 2017, we have determined that we have one reportable segment beginning in the fourth quarter 2017.  The Company provides services traditionally offered by full-service community banks, including business and personal deposit accounts and business and personal loans, as well as insurance, brokerage and investment management and trust services.  The Company’s non-banking activities are immaterial and, therefore, separate information has not been disclosed.

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NORTHWEST BANCSHARES, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements 

December 31, 2017, 2016 and 2015

(All dollar amounts presented in tables are in thousands, except as indicated)

(r)Derivative financial instruments

We recognize all derivative financial instruments as either assets or liabilities in the balance sheet and measure those instruments at fair value.  The accounting for changes in the fair value of a derivative depends on the intended use of the derivative and the resulting designation.  An entity that elects to use hedge accounting is required, at inception, to establish the method it will use for assessing the effectiveness of the hedging derivative and the measurement approach for determining the ineffective aspect of the hedge.  Those methods must be consistent with our approach to managing risk.

We utilize interest rate swap agreements as part of the management of interest rate risk to hedge the interest rate risk on our trust preferred debentures.  Amounts receivable or payable are recognized as accrued under the terms of the agreements and the differential is recorded as an adjustment to interest expense.  The interest rate swaps are designated as cash flow hedges, with the effective portion of the derivative’s unrealized gain or loss recorded as a component of other comprehensive income which is subsequently reclassified into earnings in the period that the hedged forecasted transaction affects earnings. The ineffective portion of the unrealized gain or loss, if any, would be recorded in other expense. For derivatives that are not designated as hedging instruments, any gain or loss is recognized immediately in earnings.

(s)Off-Balance-Sheet Instruments

In the normal course of business, we extend credit in the form of loan commitments, undisbursed lines of credit, and standby letters of credit. These off-balance-sheet instruments involve, to various degrees, elements of credit and interest rate risk not reported in the consolidated statement of financial condition. We utilize the same underwriting standards for these instruments as other extensions of credit.

(t)Use of Estimates

The preparation of financial statements, in conformity with accounting principles generally accepted in the United States of America, requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amount of revenues and expenses during the reporting period. The estimates and assumptions that we deem important to our financial statements relate to the allowance for loan losses, the accounting treatment and valuation of our investment securities portfolio, the analysis of the carrying value of goodwill, pension and income taxes. These estimates and assumptions are based on management’s best estimates and judgment and we evaluate them using historical experience and other factors, including the current economic environment. We adjust our estimates and assumptions when facts and circumstances dictate. As future events cannot be determined, actual results could differ significantly from our estimates.

(u)Reclassification of Prior Years’ Statements

Certain items previously reported have been reclassified to conform with the current year’s reporting format.

(2)Recent Accounting Pronouncements

In May 2014 the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2014-09, “Revenue from Contracts with Customers (Topic 606)”. This guidance supersedes the revenue recognition requirements in Topic 605, Revenue Recognition, and most industry-specific guidance. The core principle of this guidance requires an entity to recognize revenue upon the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services and provides five steps to be analyzed to accomplish the core principle. This guidance is effective retrospectively for annual reporting periods beginning after December 15, 2017, including interim periods within those years and early adoption is not permitted. Our revenue is comprised of net interest income on financial assets and financial liabilities, which is explicitly excluded from the scope of ASU 2014-09, and non-interest income. With respect to non-interest income we are complete with our overall assessment of revenue streams and review of related contracts potentially affected by the ASU, including service charges and fees, trust and other financial services income, insurance commission income, and other operating income. The adoption of this ASU will not materially change the method in which we currently recognize revenue for these revenue streams. We are also complete with our evaluation of certain costs related to these revenue streams to

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NORTHWEST BANCSHARES, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements 

December 31, 2017, 2016 and 2015

(All dollar amounts presented in tables are in thousands, except as indicated)

determine whether such costs should be presented as expenses or contra-revenue (i.e., gross vs. net). We adopted ASU No. 2014-09 on January 1, 2018 utilizing the modified retrospective approach. Since there was no net income impact, a cumulative effect adjustment to opening retained earnings was deemed not necessary. We are completing our evaluation of the ASU's expanded disclosure requirements and expect them to be primarily qualitative in nature, such as providing greater detail on revenue streams and related performance obligations.

In January 2016 the FASB issued ASU 2016-01, “Financial Instruments - Overall (Subtopic 825-10)”. This guidance requires equity investments (except those accounted for under the equity method of accounting or those that result in consolidation of the investee) to be measured at fair value with changes in fair value recognized in net income. Additionally, this guidance requires entities to use the exit price notion when measuring the fair value of financial instruments for disclosure purposes and eliminates the requirement for public business entities to disclose the method(s) and significant assumptions used to estimate the fair value that is required to be disclosed for financial instruments measured at amortized cost on the balance sheet. This guidance is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. We do not expected this guidance to have a material impact on our results of operations and financial position.

In February 2016 the FASB issued ASU 2016-2, “Leases”. This guidance requires a lessee to recognize in the statement of financial condition a liability to make lease payments and a right-of-use asset representing the right to use the underlying asset for the term of the lease. Optional periods should only be recognized if the lessee is reasonably certain to exercise the option. For leases with a term of twelve months or less, the lessee is permitted not to recognize lease assets and lease liabilities and should recognize lease expense for such leases generally on a straight-line basis over the term of the lease. This guidance is effective for annual periods beginning after December 15, 2018, including interim periods within those years and early adoption is permitted. We are currently evaluating the impact this guidance will have on our results of operations and financial position.

In June 2016, the FASB issued ASU 2016-13, "Financial Instruments - Credit Losses (Topic 326) - Measurement of Credit Losses on Financial Instruments", which eliminates the probable initial recognition threshold for credit losses requiring, instead, that all financial assets (or group of financial assets) measured at amortized cost be presented at the net amount expected to be collected inclusive of the entity’s current estimate of all lifetime expected credit losses. This guidance also applies to certain off-balance-sheet credit exposures such as unfunded commitments and non-derivative financial guarantees. The allowance for credit losses is a valuation account that is deducted from the amortized cost basis of the financial asset(s) in order to present the net carrying value at the amount expected to be collected on the financial asset. The measurement of expected credit losses is based on relevant information about past events, including historical experience, current conditions, and reasonable and supportable forecasts that affect the collectability of the reported amount. The income statement under this guidance will reflect the initial recognition of current expected credit losses for newly recognized assets, as well as any increases or decreases of expected credit losses that have occurred during the period. This guidance retains many currently-existing disclosures related to the credit quality of an entity’s assets and the related allowance for credit losses amended to reflect the change to an expected credit loss methodology, as well as enhanced disclosures to provide information to users at a more disaggregated level. Upon adoption, ASU 2016-13 provides for a modified retrospective transition by means of a cumulative-effect adjustment to equity as of the beginning of the period in which the guidance is effective, except for debt securities for which an other-than-temporary impairment has previously been recognized. For these debt securities, a prospective transition is provided in order to maintain the same amortized cost prior to and subsequent to the effective date of the ASU. This guidance is effective for annual reporting periods beginning after December 15, 2019, and interim periods within those annual periods with early adoption permitted for fiscal years beginning after December 15, 2018, and interim periods within those annual periods. Management created a formal working group to govern the implementation of these amendments consisting of key stakeholders from finance, risk, and accounting. We are currently in the process of designing current expected credit loss estimation methodologies and systems, and collecting data to be able to comply with the standard. We are also evaluating the effect this guidance will have on our results of operations, financial position and related disclosures. The impact of the ASU will depend upon the state of the economy and the nature of our portfolios at the date of adoption.

In August 2016, the FASB issued ASU No. 2016-15, “Classification of Certain Cash Receipts and Cash Payments”. The main objective of this ASU is to reduce diversity in practice in how certain transactions are classified in the statement of cash flows. The amendments in this Update provide guidance on the following eight specific cash flow issues: debt prepayment or debt extinguishment costs, settlement of zero-coupon debt instruments, contingent consideration payments made after a business combination, proceeds from the settlement of insurance claims, proceeds from the settlement of bank-owned life insurance (BOLI)

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NORTHWEST BANCSHARES, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements 

December 31, 2017, 2016 and 2015

(All dollar amounts presented in tables are in thousands, except as indicated)

policies, distributions received from equity method investments, beneficial interests in securitization transactions, and separately identifiable cash flows and application of the predominance principle. This guidance is effective for interim and annual reporting periods in fiscal years beginning after December 15, 2017. Early adoption is permitted, provided that all of the amendments are adopted in the same period. The provisions of this ASU will not materially impact our results of operations and financial position.

In January 2017 the FASB issued ASU 2017-04, "Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment". This guidance eliminates the requirement to determine the fair value of individual assets and liabilities of a reporting unit to measure goodwill impairment. Under this guidance goodwill impairment testing will be performed by comparing the fair value of the reporting unit with its carrying amount and recognizing an impairment charge for the amount by which the carrying amount exceeds the reporting unit's fair value. This guidance is effective for annual and interim goodwill impairment tests in fiscal years beginning after December 15, 2019, and should be applied on a prospective basis. Early adoption is permitted for annual and interim goodwill impairment testing dates after January 1, 2017. We do not expected this guidance to have a material impact on our consolidated financial statements.

In March 2017, the FASB issued ASU No. 2017-07, “Compensation Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Costs and Net Periodic Postretirement Benefit Costs". This guidance provides financial statement users with clearer and disaggregated information related to the components of net periodic benefit cost and improve transparency of the presentation of net periodic benefit cost in the financial statements. This guidance is effective for annual and interim periods beginning after December 15, 2017. Early adoption is permitted and this guidance should be applied retrospectively. We intend to early adopt the provisions of this standard effective with our March 31, 2018 quarterly report on Form 10-Q and do not anticipate that the adoption of this guidance will not have a material impact on our results of operations, however it will impact the presentation of our Consolidated Statements of Income.

 In March 2017 the FASB issued ASU 2017-08, "Receivables - Nonrefundable Fees and Other Costs (Subtopic 310-20): Premium Amortization on Purchased Callable Debt Securities". This guidance shortens the amortization period for certain callable debt securities held at a premium to the earliest call date from the maturity date. This guidance is effective for annual and interim periods beginning after December 15, 2018. Early adoption is permitted in any interim period. We intend to early adopt the provisions of this standard effective with our March 31, 2018 quarterly report on Form 10-Q and do not expect the adoption to have a material impact on our results of operations or financial position.

In May 2017 the FASB issued ASU 2017-09, “Compensation - Stock Compensation (Topic 718) - Scope of Modification Accounting”. This guidance clarifies when changes to the terms or conditions of a share-based payment award must be accounted for as modifications. Under ASU 2017-09, an entity will not apply modification accounting to a share-based payment award if all of the following are the same immediately before and after the change: (i) the award's fair value, (ii) the award's vesting conditions and (iii) the award's classification as an equity or liability instrument. This guidance is effective for annual and interim periods beginning after December 15, 2017 and is not expected to have a material impact on our consolidated financial statements.

In February 2018 the FASB issued ASU 2018-02, "Income Statement - Reporting Comprehensive Income (Topic 220) - Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income." This guidance permits a reclassification from accumulated other comprehensive income to retained earnings of the stranded tax effects resulting from the Tax Cuts and Jobs Act. This guidance is effective for annual or interim reporting periods beginning after December 15, 2018. Early adoption is permitted and the guidance should be applied either in the period of adoption or retrospectively to each period impacted by the change in the Federal corporate income tax rate change. We intend to early adopt the provisions of this standard effective with our March 31, 2018 quarterly report on Form 10-Q and do not expect the adoption to have a material impact on our consolidated financial statements

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NORTHWEST BANCSHARES, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements 

December 31, 2017, 2016 and 2015

(All dollar amounts presented in tables are in thousands, except as indicated)

(3)    Marketable Securities

Marketable securities available-for-sale at December 31, 2017 are as follows: 

	Amortized cost		Gross unrealized holding gains	Gross unrealized holding losses		Fair value
Debt issued by the U.S. government and agencies:
Due in one year or less	$	1	—	—		1
Debt issued by government sponsored enterprises:			3
Due in one year or less	66,566		14	(289	)	66,291
Due after one year through five years	140,624		—	(2,402	)	138,222
Due after five years through ten years	—		—	—		—
Due after ten years	4,833		—	(77	)	4,756
Equity securities	551		29	(6	)	574
Municipal securities:
Due in one year or less	2,492		7	(1	)	2,498
Due after one year through five years	7,072		82	(6	)	7,148
Due after five years through ten years	14,576		171	—		14,747
Due after ten years	26,371		292	—		26,663
Corporate debt issues:
Due after ten years	909		—	—		909
Residential mortgage-backed securities:
Fixed rate pass-through	144,411		1,108	(2,817	)	142,702
Variable rate pass-through	33,079		1,464	(6	)	34,537
Fixed rate non-agency CMOs	15		—	—		15
Fixed rate agency CMOs	284,320		37	(5,271	)	279,086
Variable rate agency CMOs	74,274		249	(137	)	74,386
Total residential mortgage-backed securities	536,099		2,858	(8,231	)	530,726
Total marketable securities available-for-sale	$	800,094	3,453	(11,012	)	792,535

Marketable securities held to maturity at December 31, 2017 are as follows: 

	Amortized cost		Gross unrealized holding gains	Gross unrealized holding losses		Fair value
Residential mortgage-backed securities:
Fixed rate pass-through	$	3,760	140	—		3,900
Variable rate pass-through	2,283		64	—		2,347
Fixed rate agency CMOs	22,906		20	(248	)	22,678
Variable rate agency CMOs	729		13	—		742
Total residential mortgage-backed securities	29,678		237	(248	)	29,667
Total marketable securities held-to-maturity	$	29,678	237	(248	)	29,667

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NORTHWEST BANCSHARES, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements 

December 31, 2017, 2016 and 2015

(All dollar amounts presented in tables are in thousands, except as indicated)

Marketable securities available-for-sale at December 31, 2016 are as follows:

	Amortized cost		Gross unrealized holding gains	Gross unrealized holding losses		Fair value
Debt issued by the U.S. government and agencies:
Due in one year or less	$	6	—	—		6
Debt issued by government sponsored enterprises:
Due in one year or less	74,980		5	(33	)	74,952
Due after one year through five years	220,937		203	(2,504	)	218,636
Due after five years through ten years	585		—	(3	)	582
Due after ten years	—		—	—		—
Equity securities	3,351		1,095	(6	)	4,440
Municipal securities:
Due in one year or less	2,449		7	—		2,456
Due after one year through five years	9,448		105	(21	)	9,532
Due after five years through ten years	11,794		137	(1	)	11,930
Due after ten years	38,141		1,027	(16	)	39,152
Corporate debt issues:
Due after ten years	14,367		2,935	(322	)	16,980
Residential mortgage-backed securities:
Fixed rate pass-through	175,398		1,849	(2,680	)	174,567
Variable rate pass-through	43,587		2,007	(6	)	45,588
Fixed rate non-agency CMOs	100		1	—		101
Fixed rate agency CMOs	165,535		185	(3,455	)	162,265
Variable rate agency CMOs	64,874		306	(167	)	65,013
Total residential mortgage-backed securities	449,494		4,348	(6,308	)	447,534
Total marketable securities available-for-sale	$	825,552	9,862	(9,214	)	826,200

Marketable securities held to maturity at December 31, 2016 are as follows: 

	Amortized cost		Gross unrealized holding gains	Gross unrealized holding losses	Fair value
Municipal securities:
Due after ten years	$	4,808	65	—	4,873
Residential mortgage-backed securities:
Fixed rate pass-through	4,807		217	—	5,024
Variable rate pass-through	2,848		58	—	2,906
Fixed rate agency CMOs	6,674		94	—	6,768
Variable rate agency CMOs	841		14	—	855
Total residential mortgage-backed securities	15,170		383	—	15,553
Total marketable securities held-to-maturity	$	19,978	448	—	20,426

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NORTHWEST BANCSHARES, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements 

December 31, 2017, 2016 and 2015

(All dollar amounts presented in tables are in thousands, except as indicated)

The following table presents information regarding the issuers and the carrying values of our mortgage-backed securities at December 31, 2017 and 2016: 

	December 31,
	2017		2016
Residential mortgage backed securities:
FNMA	$	286,031	210,373
GNMA	37,796		42,221
FHLMC	236,007		202,822
SBA	—		6,608
Other (including non-agency)	570		680
Total residential mortgage-backed securities	$	560,404	462,704

Marketable securities having a carrying value of $161.6 million at December 31, 2017, were pledged under collateral agreements. During the year ended December 31, 2017, we sold marketable securities classified as available-for-sale for $36.8 million, with gross realized gains of $1.8 million and gross realized losses of $626,000. During the year ended December 31, 2016, we sold marketable securities classified as available-for-sale for $2.0 million, with gross realized gains of $268,000 and gross realized losses of $0. During the year ended December 31, 2015, we sold marketable securities classified as available-for-sale for $1.2 million, with gross realized gains of $121,000 and gross realized losses of $67,000. During the years ended December 31, 2017, 2016 and 2015, we did not recognize non-cash credit related other-than-temporary-impairment in our investment portfolio.

The following table shows the fair value and gross unrealized losses on investment securities, aggregated by investment category and length of time that the individual securities have been in a continuous unrealized loss position at December 31, 2017: 

	Less than 12 months				12 months or more			Total
			Unrealized			Unrealized			Unrealized
	Fair value		loss		Fair value	loss		Fair value	loss
Government sponsored enterprises	$	5,006	(7	)	197,695	(2,761	)	202,701	(2,768	)
Corporate debt issues	—		—		—	—		—	—
Equity securities	—		—		544	(6	)	544	(6	)
Municipal securities	4,563		(7	)	—	—		4,563	(7	)
Residential mortgage-backed securities - agency	239,703		(2,522	)	202,344	(5,957	)	442,047	(8,479	)
Total temporarily impaired securities	$	249,272	(2,536	)	400,583	(8,724	)	649,855	(11,260	)

The following table shows the fair value and gross unrealized losses on investment securities, aggregated by investment category and length of time that the individual securities have been in a continuous unrealized loss position at December 31, 2016:

	Less than 12 months				12 months or more			Total
			Unrealized			Unrealized			Unrealized
	Fair value		loss		Fair value	loss		Fair value	loss
Government sponsored enterprises	$	238,003	(2,448	)	9,205	(92	)	247,208	(2,540	)
Corporate debt issues	—		—		2,107	(322	)	2,107	(322	)
Equity securities	—		—		544	(6	)	544	(6	)
Municipal securities	5,621		(37	)	66	(1	)	5,687	(38	)
Residential mortgage-backed securities - agency	213,662		(3,837	)	87,723	(2,471	)	301,385	(6,308	)
Total temporarily impaired securities	$	457,286	(6,322	)	99,645	(2,892	)	556,931	(9,214	)

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NORTHWEST BANCSHARES, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements 

December 31, 2017, 2016 and 2015

(All dollar amounts presented in tables are in thousands, except as indicated)

We perform an assessment to determine whether there have been any events or economic circumstances that indicate a security which has an unrealized loss is impaired other-than-temporarily. The assessment considers many factors including the severity and duration of the impairment; recent events specific to the issuer or industry; and for debt securities, external credit ratings, underlying collateral position and recent downgrades.  For asset backed securities, we evaluate current characteristics of each security such as delinquency and foreclosure levels, credit enhancement and projected losses and coverage.  It is possible that the underlying collateral of these securities will perform worse than current expectations, which may lead to adverse changes in cash flows on these securities and potential future losses.  Events that may trigger material declines in fair values for these securities in the future would be, but are not limited to: deterioration of credit metrics, significantly higher levels of default and severity of loss on the underlying collateral, deteriorating credit enhancement and loss coverage ratios, or further illiquidity.  For debt securities, credit related other-than-temporary impairment is recognized in earnings, while noncredit related other-than-temporary impairment on securities not expected to be sold, or otherwise disposed of, is recognized in other comprehensive income. We assert that we do not have the intent to sell these securities and it is more likely than not that we will not have to sell these securities before a recovery of our cost basis.  For these reasons, we consider the unrealized losses to be temporary impairment losses. There are approximately 173 positions that are temporarily impaired at December 31, 2017. The aggregate carrying amount of cost-method investments, including both held-to-maturity and available-for-sale, at December 31, 2017 was $822.2 million, of which all were evaluated for impairment.

The following table sets forth the categories of investment securities as of December 31, 2017 on which other-than-temporary impairment charges have been recorded in earnings:

	Total				Accumulated
Category	Amortized cost		Fair value	Unrealized gain	impairment charges
Freddie Mac preferred shares	$	1	30	29	119
Trust preferred investments	—		—	—	352
Total	$	1	30	29	471

The table below shows a cumulative roll forward of credit related impairment losses recognized in earnings for debt securities held and not intended to be sold: 

	December 31,
	2017			2016
Beginning balance as of January 1, (1)	$	7,942		8,436
Credit losses on debt securities for which other-than-temporary impairment was not previously recognized	—			—
Credit losses on debt securities for which other-than-temporary impairment was previously recognized	(7,265		)	(494	)
Reduction for securities sold realized during the year	(325		)	—
Additional credit losses on debt securities for which other-than-temporary impairment was previously recognized	—			—
Ending balance as of December 31,	$	352		7,942

(1) The beginning balance represents credit losses included in other-than-temporary impairment charges recognized on debt securities in prior periods.

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Notes to Consolidated Financial Statements 

December 31, 2017, 2016 and 2015

(All dollar amounts presented in tables are in thousands, except as indicated)

(4)    Loans Receivable and Allowance for Loan Losses

Loans receivable at December 31, 2017 and 2016 are summarized in the table below: 

	December 31, 2017							December 31, 2016
	Originated			Acquired		Total		Originated		Acquired		Total
Personal Banking:
Residential mortgage loans (1)	$	2,658,726		113,823		2,772,549		2,565,620		133,511		2,699,131
Home equity loans	1,051,558			258,797		1,310,355		1,042,913		302,457		1,345,370
Consumer finance loans (2)	18,619			—		18,619		48,981		—		48,981
Consumer loans	540,832			97,877		638,709		418,656		163,622		582,278
Total Personal Banking	4,269,735			470,497		4,740,232		4,076,170		599,590		4,675,760
Commercial Banking:
Commercial real estate loans	2,303,179			296,161		2,599,340		2,140,678		372,991		2,513,669
Commercial loans	572,341			60,822		633,163		481,543		75,676		557,219
Total Commercial Banking	2,875,520			356,983		3,232,503		2,622,221		448,667		3,070,888
Total loans receivable, gross	7,145,255			827,480		7,972,735		6,698,391		1,048,257		7,746,648
Deferred loan costs	26,255			1,527		27,782		20,081		2,294		22,375
Allowance for loan losses	(50,572		)	(6,223	)	(56,795	)	(55,293	)	(5,646	)	(60,939	)
Undisbursed loan proceeds:
Residential mortgage loans	(10,067		)	—		(10,067	)	(11,638	)	—		(11,638	)
Commercial real estate loans	(141,967		)	(2,647	)	(144,614	)	(168,595	)	(2,985	)	(171,580	)
Commercial loans	(51,143		)	(1,284	)	(52,427	)	(26,168	)	(2,290	)	(28,458	)
Total loans receivable, net	$	6,917,761		818,853		7,736,614		6,456,778		1,039,630		7,496,408

(1) Includes $3.1 million and $9.6 million of loans held for sale at December 31, 2017 and 2016, respectively.

(2) Represents loans from our consumer finance subsidiary that was closed in 2017 which are no longer being originated.

As of December 31, 2017, 2016 and 2015, we serviced loans for others approximating $887.3 million, $918.9 million and $776.0 million, respectively. These loans serviced for others are not our assets and are not included in our financial statements.

As of December 31, 2017 and 2016, approximately 60% and 62%, respectively, of our loan portfolio was secured by properties located in Pennsylvania. We do not believe we have significant concentrations of credit risk to any one group of borrowers given our underwriting and collateral requirements.

Loans receivable as of December 31, 2017 and 2016 include $2.856 billion and $2.755 billion, respectively, of adjustable rate loans and $5.117 billion and $4.992 billion, respectively, of fixed rate loans.

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Notes to Consolidated Financial Statements 

December 31, 2017, 2016 and 2015

(All dollar amounts presented in tables are in thousands, except as indicated)

The following table provides information related to the outstanding principal balance and related carrying value of acquired loans for the dates indicated: 

	December 31,
	2017		2016
Acquired loans evaluated individually for future credit losses:
Outstanding principal balance	$	9,735	16,108
Carrying value	6,875		12,665
Acquired loans evaluated collectively for future credit losses:
Outstanding principal balance	824,205		1,040,378
Carrying value	818,201		1,032,611
Total acquired loans:
Outstanding principal balance	833,940		1,056,486
Carrying value	825,076		1,045,276

The following table provides information related to the changes in the accretable discount, which includes income recognized from contractual cash flows for the dates indicated:

	Total
Balance at December 31, 2015	$	2,019
Accretion	(1,170		)
Net reclassification from nonaccretable yield	1,338
Balance at December 31, 2016	2,187
Accretion	(1,318		)
Net reclassification from nonaccretable yield	671
Balance at December 31, 2017	$	1,540

The following table provides information related to purchased credit impaired loans by portfolio segment and by class of financing receivable at and for the year ended December 31, 2017: 

	Carrying value		Outstanding principal balance	Related impairment reserve	Average recorded investment in impaired loans	Interest income/ accretion recognized
Personal Banking:
Residential mortgage loans	$	1,182	1,880	24	1,251	181
Home equity loans	1,143		2,219	21	1,253	157
Consumer loans	59		160	4	97	51
Total Personal Banking	2,384		4,259	49	2,601	389
Commercial Banking:
Commercial real estate loans	4,388		5,363	39	6,992	914
Commercial loans	103		113	—	177	15
Total Commercial Banking	4,491		5,476	39	7,169	929
Total	$	6,875	9,735	88	9,770	1,318

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NORTHWEST BANCSHARES, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements 

December 31, 2017, 2016 and 2015

(All dollar amounts presented in tables are in thousands, except as indicated)

The following table provides information related to purchased credit impaired loans by portfolio segment and by class of financing receivable at and for the year ended December 31, 2016:

	Carrying value		Outstanding principal balance	Related impairment reserve	Average recorded investment in impaired loans	Interest income/ accretion recognized
Personal Banking:
Residential mortgage loans	$	1,319	2,062	204	1,650	202
Home equity loans	1,363		2,669	8	1,724	185
Consumer loans	136		303	3	201	51
Total Personal Banking	2,818		5,034	215	3,575	438
Commercial Banking:
Commercial real estate loans	9,596		10,809	52	10,942	721
Commercial loans	251		265	—	249	11
Total Commercial Banking	9,847		11,074	52	11,191	732
Total	$	12,665	16,108	267	14,766	1,170

80

NORTHWEST BANCSHARES, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements 

December 31, 2017, 2016 and 2015

(All dollar amounts presented in tables are in thousands, except as indicated)

The following table provides information related to changes in the allowance for losses on loans receivable for the year ended December 31, 2017: 

	Balance December 31, 2017		Provision		Charge-offs		Recoveries	Balance December 31, 2016
Originated loans
Personal Banking:
Residential mortgage loans	$	3,824	(390	)	(834	)	392	4,656
Home equity loans	4,072		1,474		(1,080	)	192	3,486
Consumer finance loans	3,968		8,444		(8,369	)	448	3,445
Consumer loans	8,475		13,601		(11,128	)	1,473	4,529
Total Personal Banking	20,339		23,129		(21,411	)	2,505	16,116
Commercial Banking:
Commercial real estate loans	19,911		(3,663	)	(1,344	)	1,251	23,667
Commercial loans	10,322		(4,777	)	(2,462	)	2,051	15,510
Total Commercial Banking	30,233		(8,440	)	(3,806	)	3,302	39,177
Total originated loans	50,572		14,689		(25,217	)	5,807	55,293
Acquired loans
Personal Banking:
Residential mortgage loans	131		185		(205	)	80	71
Home equity loans	762		503		(1,179	)	391	1,047
Consumer loans	890		765		(795	)	267	653
Total Personal Banking	1,783		1,453		(2,179	)	738	1,771
Commercial Banking:
Commercial real estate loans	3,549		2,631		(2,830	)	740	3,008
Commercial loans	891		978		(1,028	)	74	867
Total Commercial Banking	4,440		3,609		(3,858	)	814	3,875
Total acquired loans	6,223		5,062		(6,037	)	1,552	5,646
Total	$	56,795	19,751		(31,254	)	7,359	60,939

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Notes to Consolidated Financial Statements 

December 31, 2017, 2016 and 2015

(All dollar amounts presented in tables are in thousands, except as indicated)

The following table provides information related to changes in the allowance for losses on loans receivable for the year ended December 31, 2016: 

	Balance December 31, 2016		Provision		Charge-offs		Recoveries	Balance December 31, 2015
Originated loans
Personal Banking:
Residential mortgage loans	$	4,656	2,906		(3,228	)	286	4,692
Home equity loans	3,486		293		(1,090	)	342	3,941
Consumer finance loans	3,445		3,117		(3,323	)	376	3,275
Consumer loans	4,529		5,935		(6,902	)	1,283	4,213
Total Personal Banking	16,116		12,251		(14,543	)	2,287	16,121
Commercial Banking:
Commercial real estate loans	23,667		(9,819	)	(2,403	)	3,541	32,348
Commercial loans	15,510		4,834		(4,165	)	2,340	12,501
Total Commercial Banking	39,177		(4,985	)	(6,568	)	5,881	44,849
Total originated loans	55,293		7,266		(21,111	)	8,168	60,970
Acquired loans
Personal Banking:
Residential mortgage loans	71		146		(252	)	159	18
Home equity loans	1,047		2,065		(1,449	)	330	101
Consumer loans	653		1,072		(680	)	151	110
Total Personal Banking	1,771		3,283		(2,381	)	640	229
Commercial Banking:
Commercial real estate loans	3,008		2,116		(1,337	)	790	1,439
Commercial loans	867		877		(52	)	8	34
Total Commercial Banking	3,875		2,993		(1,389	)	798	1,473
Total acquired loans	5,646		6,276		(3,770	)	1,438	1,702
Total	$	60,939	13,542		(24,881	)	9,606	62,672

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Notes to Consolidated Financial Statements 

December 31, 2017, 2016 and 2015

(All dollar amounts presented in tables are in thousands, except as indicated)

The following table provides information related to changes in the allowance for losses on loans receivable for the year ended December 31, 2015: 

	Balance December 31, 2015		Provision		Charge-offs		Recoveries	Balance December 31, 2014
Originated loans
Personal Banking:
Residential mortgage loans	$	4,692	(96	)	(1,057	)	264	5,581
Home equity loans	3,941		693		(1,716	)	414	4,550
Consumer finance loans	3,275		2,853		(3,056	)	404	3,074
Consumer loans	4,213		5,132		(5,017	)	1,054	3,044
Total Personal Banking	16,121		8,582		(10,846	)	2,136	16,249
Commercial Banking:
Commercial real estate loans	32,348		540		(5,741	)	4,160	33,389
Commercial loans	12,501		2,768		(7,814	)	4,032	13,515
Total Commercial Banking	44,849		3,308		(13,555	)	8,192	46,904
Unallocated	—		(4,365	)	—		—	4,365
Total originated loans	60,970		7,525		(24,401	)	10,328	67,518
Acquired loans
Personal Banking:
Residential mortgage loans	18		47		(69	)	40	—
Home equity loans	101		247		(708	)	562	—
Other consumer loans	110		188		(201	)	123	—
Total Personal Banking	229		482		(978	)	725	—
Business Banking:
Commercial real estate loans	1,439		1,545		(585	)	479	—
Commercial loans	34		160		(369	)	243	—
Total Business Banking	1,473		1,705		(954	)	722	—
Total acquired loans	1,702		2,187		(1,932	)	1,447	—
Total	$	62,672	9,712		(26,333	)	11,775	67,518

While we use available information to provide for losses, future additions to the allowance may be necessary based on changes in economic conditions. In addition, various regulatory agencies, as an integral part of their examination process, periodically review our allowance for loan losses. Such agencies may require us to recognize additions to the allowance based on their judgments about information available to them at the time of their examination. Management believes, to the best of their knowledge, that all known losses as of the balance sheet dates have been recorded.

83

NORTHWEST BANCSHARES, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements 

December 31, 2017, 2016 and 2015

(All dollar amounts presented in tables are in thousands, except as indicated)

The following table provides information related to the loan portfolio by portfolio segment and by class of financing receivable as of December 31, 2017:

	Recorded  investment in  loans  receivable		Allowance for  loan losses	Recorded  investment in  loans on  nonaccrual  (1)	Recorded  investment in  loans 90 days or more past maturity and  still accruing	TDRs  (1)	Allowance  for loan losses related to  TDRs	Additional  commitments  to customers  with loans  classified as  TDRs
Personal Banking:
Residential mortgage loans	$	2,776,203	3,955	14,791	—	8,000	815	—
Home equity loans	1,310,355		4,834	8,907	120	1,716	462	4
Consumer finance loans	18,619		3,968	199	3	—	—	—
Consumer loans	652,770		9,365	4,673	379	—	—	—
Total Personal Banking	4,757,947		22,122	28,570	502	9,716	1,277	4
Commercial Banking:
Commercial real estate loans	2,454,726		23,460	28,473	—	15,691	1,125	235
Commercial loans	580,736		11,213	7,412	—	6,697	742	8
Total Commercial Banking	3,035,462		34,673	35,885	—	22,388	1,867	243
Total	$	7,793,409	56,795	64,455	502	32,104	3,144	247

(1) Includes $12.3 million of nonaccrual TDRs.

The following table provides information related to the loan portfolio by portfolio segment and by class of financing receivable as of December 31, 2016: 

	Recorded  investment in  loans  receivable		Allowance for  loan losses	Recorded  investment in  loans on  nonaccrual  (1)	Recorded  investment in  loans 90 days or more past maturity and  still accruing	TDRs  (1)	Allowance  for loan losses related to  TDRs	Additional  commitments  to customers  with loans  classified as  TDRs
Personal Banking:
Residential mortgage loans	$	2,698,166	4,727	18,264	—	7,299	708	—
Home equity loans	1,345,370		4,533	7,865	—	1,813	450	4
Consumer finance loans	48,981		3,445	743	—	—	—	—
Consumer loans	593,980		5,182	4,366	85	—	—	—
Total Personal Banking	4,686,497		17,887	31,238	85	9,112	1,158	4
Commercial Banking:
Commercial real estate loans	2,342,089		26,675	38,724	564	24,483	2,072	417
Commercial loans	528,761		16,377	9,574	—	9,331	1,360	17
Total Commercial Banking	2,870,850		43,052	48,298	564	33,814	3,432	434
Total	$	7,557,347	60,939	79,536	649	42,926	4,590	438

(1) Includes $16.3 million of nonaccrual TDRs.

84

NORTHWEST BANCSHARES, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements 

December 31, 2017, 2016 and 2015

(All dollar amounts presented in tables are in thousands, except as indicated)

A loan is considered to be impaired, when, based on current information and events it is probable that we will be unable to collect all amounts due according to the contractual terms of the loan agreement including both contractual principal and interest payments.  This includes non-accrual loans, loans more than 90 days delinquent and still accruing interest, loans for which we perform an impairment review and TDRs. Impairment is measured using one of three methods: (1) the present value of expected future cash flows discounted at the loan’s effective interest rate; (2) the loan’s observable market price; or (3) the fair value of collateral if the loan is collateral dependent, less costs of sale or disposition.  If the measure of the impaired loan is less than the recorded investment in the loan, a specific allowance is allocated for the impairment.

The following table provides information related to the composition of impaired loans by portfolio segment and by class of financing receivable at and for the year ended December 31, 2017: 

	Nonaccrual  loans 90 or  more days  delinquent		Nonaccrual  loans less  than 90 days  delinquent	Loans less  than 90 days  delinquent  reviewed for  impairment	TDRs less  than 90 days  delinquent  not included  elsewhere	Total  impaired  loans	Average  recorded  investment  in impaired  loans	Interest  income  recognized  on impaired  loans
Personal Banking:
Residential mortgage loans	$	13,509	1,282	—	6,814	21,605	21,531	892
Home equity loans	7,251		1,656	—	1,449	10,356	9,150	452
Consumer finance loans	199		—	—	—	199	379	20
Consumer loans	3,617		1,056	—	—	4,673	4,042	188
Total Personal Banking	24,576		3,994	—	8,263	36,833	35,102	1,552
Commercial Banking:
Commercial real estate loans	15,361		13,112	4,431	4,123	37,027	49,981	1,758
Commercial loans	3,140		4,272	906	2,447	10,765	12,110	672
Total Commercial Banking	18,501		17,384	5,337	6,570	47,792	62,091	2,430
Total	$	43,077	21,378	5,337	14,833	84,625	97,193	3,982

The following table provides information related to the composition of impaired loans by portfolio segment and by class of financing receivable at and for the year ended December 31, 2016: 

	Nonaccrual  loans 90 or  more days  delinquent		Nonaccrual  loans less  than 90 days  delinquent	Loans less  than 90 days  delinquent  reviewed for  impairment	TDRs less  than 90 days  delinquent  not included  elsewhere	Total  impaired  loans	Average  recorded  investment  in impaired  loans	Interest  income  recognized  on impaired  loans
Personal Banking:
Residential mortgage loans	$	13,169	5,095	—	5,929	24,193	24,483	1,079
Home equity loans	5,552		2,313	—	1,439	9,304	9,234	496
Consumer finance loans	743		—	—	—	743	772	35
Consumer loans	3,080		1,286	—	—	4,366	2,931	131
Total Personal Banking	22,544		8,694	—	7,368	38,606	37,420	1,741
Commercial Banking:
Commercial real estate loans	19,264		19,460	3,622	11,582	53,928	64,350	2,864
Commercial loans	3,373		6,201	2,837	3,116	15,527	16,905	991
Total Commercial Banking	22,637		25,661	6,459	14,698	69,455	81,255	3,855
Total	$	45,181	34,355	6,459	22,066	108,061	118,675	5,596

85

NORTHWEST BANCSHARES, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements 

December 31, 2017, 2016 and 2015

(All dollar amounts presented in tables are in thousands, except as indicated)

The following table provides information related to the composition of impaired loans by portfolio segment and by class of financing receivable at and for the year ended December 31, 2015:

	Nonaccrual  loans 90 or  more days  delinquent		Nonaccrual  loans less  than 90 days  delinquent	Loans less  than 90 days  delinquent  reviewed for  impairment	TDRs less  than 90 days  delinquent  not included  elsewhere	Total  impaired  loans	Average  recorded  investment  in impaired  loans	Interest  income  recognized  on impaired  loans
Personal Banking:
Residential mortgage loans	$	15,810	3,962	—	5,086	24,858	24,554	944
Home equity loans	5,650		1,872	—	1,847	9,369	9,644	497
Consumer finance loans	792		—	—	—	792	768	29
Consumer loans	2,108		552	—	—	2,660	2,209	72
Total Personal Banking	24,360		6,386	—	6,933	37,679	37,175	1,542
Commercial Banking:
Commercial real estate loans	16,449		16,972	16,121	16,467	66,009	77,166	3,226
Commercial loans	2,459		5,036	2,014	4,654	14,163	16,187	694
Total Commercial Banking	18,908		22,008	18,135	21,121	80,172	93,353	3,920
Total	$	43,268	28,394	18,135	28,054	117,851	130,528	5,462

The following table provides information related to the evaluation of impaired loans by portfolio segment and by class of financing receivable as of and for the year ended December 31, 2017:

	Loans collectively evaluated for impairment		Loans individually evaluated for impairment	Loans individually evaluated for impairment for which there is a related impairment reserve	Related impairment reserve	Loans individually evaluated for impairment for which there is no related reserve
Personal Banking:
Residential mortgage loans	$	2,767,635	8,568	8,568	816	—
Home equity loans	1,308,639		1,716	1,716	461	—
Consumer finance loans	18,619		—	—	—	—
Consumer loans	652,685		85	85	25	—
Total Personal Banking	4,747,578		10,369	10,369	1,302	—
Commercial Banking:
Commercial real estate loans	2,433,755		20,971	18,470	1,859	2,501
Commercial loans	571,412		9,324	8,572	829	752
Total Commercial Banking	3,005,167		30,295	27,042	2,688	3,253
Total	$	7,752,745	40,664	37,411	3,990	3,253

86

NORTHWEST BANCSHARES, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements 

December 31, 2017, 2016 and 2015

(All dollar amounts presented in tables are in thousands, except as indicated)

The following table provides information related to the evaluation of impaired loans by portfolio segment and by class of financing receivable as of and for the year ended December 31, 2016: 

	Loans collectively evaluated for impairment		Loans individually evaluated for impairment	Loans individually evaluated for impairment for which there is a related impairment reserve	Related impairment reserve	Loans individually evaluated for impairment for which there is no related reserve
Personal Banking:
Residential mortgage loans	$	2,689,886	8,280	8,280	709	—
Home equity loans	1,343,556		1,814	1,814	450	—
Consumer finance loans	48,981		—	—	—	—
Consumer loans	593,854		126	126	29	—
Total Personal Banking	4,676,277		10,220	10,220	1,188	—
Commercial Banking:
Commercial real estate loans	2,309,186		32,903	27,594	3,545	5,309
Commercial loans	518,449		10,312	10,242	1,390	70
Total Commercial Banking	2,827,635		43,215	37,836	4,935	5,379
Total	$	7,503,912	53,435	48,056	6,123	5,379

Our loan portfolios include certain loans that have been modified in a TDR, where economic concessions have been granted to borrowers who have experienced financial difficulties. These concessions typically result from our loss mitigation activities and could include: extending the note’s maturity date, permitting interest only payments, reducing the interest rate to a rate lower than current market rates for new debt with similar risk, reducing the principal payment, principal forbearance or other actions.  These concessions are applicable to all loan segments and classes. Certain TDRs are classified as nonperforming at the time of restructuring and typically are returned to performing status after considering the borrower’s sustained repayment performance for a reasonable period of at least six consecutive months.

When we modify loans in a TDR, we evaluate any possible impairment similar to other impaired loans based on the present value of expected future cash flows, discounted at the contractual interest rate of the original loan agreement, the loan’s observable market price or the current fair value of the collateral, less selling costs, for collateral dependent loans.  If we determine that the value of the modified loan is less than the recorded investment in the loan (net of previous charge-offs, deferred loan fees or costs and unamortized premium or discount), impairment is recognized through an allowance estimate or a charge-off to the allowance.  In periods subsequent to modification, we evaluate all TDRs, including those that have payment defaults, for possible impairment, using ASC 310-10. As a result, loans modified in a TDR may have the financial effect of increasing the specific allowance associated with the loan.

Loans modified in a TDR are closely monitored for delinquency as an early indicator of possible future default.  If loans modified in a TDR subsequently default, we evaluate the loan for possible further impairment. The allowance may be increased, adjustments may be made in the allocation of the allowance, partial charge-offs may be taken to further write-down the carrying value of the loan, or the loan may be charged-off completely.

87

NORTHWEST BANCSHARES, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements 

December 31, 2017, 2016 and 2015

(All dollar amounts presented in tables are in thousands, except as indicated)

The following table provides a roll forward of troubled debt restructurings for the periods indicated: 

	For the years ended December 31,
	2017				2016
	Number of contracts	Amount			Number of contracts	Amount
Beginning TDR balance:	225	$	42,926		227	$	51,115
New TDRs	24	5,450			34	6,365
Re-modified TDRs	5	2,099			7	3,414
Net paydowns		(11,538		)		(9,037		)
Charge-offs:
Residential mortgage loans	1	(77		)	—	—
Home equity loans	1	(48		)	—	—
Commercial real estate loans	2	(2,498		)	1	(120		)
Commercial loans	6	(259		)	2	(142		)
Paid-off loans:
Residential mortgage loans	—	—			4	(151		)
Home equity loans	8	(62		)	7	(534		)
Commercial real estate loans	15	(1,633		)	12	(6,170		)
Commercial loans	11	(2,256		)	10	(1,814		)
Ending TDR balance:	205	$	32,104		225	$	42,926
Accruing TDRs		$	19,819			$	26,580
Non-accrual TDRs		12,285				16,346

     The following table provides information related to troubled debt restructurings (including re-modified TDRs) by portfolio segment and by class of financing receivable during the year ended December 31, 2017: 

	Number of contracts	Recorded investment at the time of modification		Current recorded investment	Current allowance
Troubled debt restructurings:
Personal Banking:
Residential mortgage loans	8	$	1,604	1,555	158
Home equity loans	3	152		148	40
Total Personal Banking	11	1,756		1,703	198
Commercial Banking:
Commercial real estate loans	11	5,232		4,889	364
Commercial loans	7	561		526	37
Total Commercial Banking	18	5,793		5,415	401
Total	29	$	7,549	7,118	599

88

NORTHWEST BANCSHARES, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements 

December 31, 2017, 2016 and 2015

(All dollar amounts presented in tables are in thousands, except as indicated)

	Number of contracts	Recorded investment at the time of modification		Current recorded investment	Current allowance
Troubled debt restructurings modified within the previous twelve months that have subsequently defaulted:
Personal Banking:
Residential mortgage loans	1	$	336	334	34
Home equity loans	—	—		—	—
Total Personal Banking	1	336		334	34
Commercial Banking:
Commercial real estate loans	2	438		426	35
Commercial loans	—	—		—	—
Total Commercial Banking	2	438		426	35
Total	3	$	774	760	69

The following table provides information related to troubled debt restructurings (including re-modified TDRs) by portfolio segment and by class of financing receivable during the year ended December 31, 2016: 

	Number of contracts	Recorded investment at the time of modification		Current recorded investment	Current allowance
Troubled debt restructurings:
Personal Banking:
Residential mortgage loans	7	$	1,199	1,177	114
Home equity loans	7	475		471	110
Total Personal Banking	14	1,674		1,648	224
Commercial Banking:
Commercial real estate loans	7	3,729		3,643	485
Commercial loans	20	4,376		2,218	508
Total Commercial Banking	27	8,105		5,861	993
Total	41	$	9,779	7,509	1,217

89

NORTHWEST BANCSHARES, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements 

December 31, 2017, 2016 and 2015

(All dollar amounts presented in tables are in thousands, except as indicated)

	Number of contracts	Recorded investment at the time of modification		Current recorded investment	Current allowance
Troubled debt restructurings modified within the previous twelve months that have subsequently defaulted:
Personal Banking:
Residential mortgage loans	—	$	—	—	—
Home equity loans	—	—		—	—
Total Personal Banking	—	—		—	—
Commercial Banking:
Commercial real estate loans	1	429		425	31
Commercial loans	3	533		533	533
Total Business Banking	4	962		958	564
Total	4	$	962	958	564

The following table provides information related to troubled debt restructurings (including re-modified TDRs) by portfolio segment and by class of financing receivable during the year ended December 31, 2015:

	Number of contracts	Recorded investment at the time of modification		Current recorded investment	Current allowance
Troubled debt restructurings:
Personal Banking:
Residential mortgage loans	6	$	364	357	21
Home equity loans	3	101		97	21
Total Personal Banking	9	465		454	42
Commercial Banking:
Commercial real estate loans	11	12,258		12,243	1,047
Commercial loans	9	2,200		2,184	156
Total Commercial Banking	20	14,458		14,427	1,203
Total	29	$	14,923	14,881	1,245

At December 31, 2015, no TDRs that were modified in the previous twelve months had subsequently defaulted.

90

NORTHWEST BANCSHARES, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements 

December 31, 2017, 2016 and 2015

(All dollar amounts presented in tables are in thousands, except as indicated)

The following table provides information for troubled debt restructurings (including re-modified TDRs) by type of modification, by portfolio segment and class of financing receivable during the year ended December 31, 2017: 

	Number of	Type of modification
	contracts	Rate		Payment	Maturity date	Other	Total
Personal Banking:
Residential mortgage loans	8	$	359	—	8	1,188	1,555
Home equity loans	3	118		—	—	30	148
Total Personal Banking	11	477		—	8	1,218	1,703
Commercial Banking:
Commercial real estate loans	11	—		2,688	2,201	—	4,889
Commercial loans	7	—		—	422	104	526
Total Commercial Banking	18	—		2,688	2,623	104	5,415
Total	29	$	477	2,688	2,631	1,322	7,118

The following table provides information for troubled debt restructurings (including re-modified TDRs) by type of modification, by portfolio segment and class of financing receivable during the year ended December 31, 2016: 

	Number of	Type of modification
	contracts	Rate		Payment	Maturity date	Other	Total
Personal Banking:
Residential mortgage loans	7	$	358	—	771	48	1,177
Home equity loans	7	120		—	3	348	471
Total Personal Banking	14	478		—	774	396	1,648
Commercial Banking:
Commercial real estate loans	7	—		425	1,980	1,238	3,643
Commercial loans	20	—		328	1,178	712	2,218
Total Commercial Banking	27	—		753	3,158	1,950	5,861
Total	41	$	478	753	3,932	2,346	7,509

91

NORTHWEST BANCSHARES, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements 

December 31, 2017, 2016 and 2015

(All dollar amounts presented in tables are in thousands, except as indicated)

The following table provides information related to re-modified troubled debt restructurings by portfolio segment and by class of financing receivable for the year ended December 31, 2017: 

	Number of  re-modified	Type of re-modification
	TDRs	Rate		Payment	Maturity date	Other	Total
Personal Banking:
Residential mortgage loans	2	$	250	—	—	429	679
Home equity loans	1	12		—	—	—	12
Total Personal Banking	3	262		—	—	429	691
Commercial Banking:
Commercial real estate loans	1	—		—	1,299	—	1,299
Commercial loans	1	—		—	83	—	83
Total Commercial Banking	2	—		—	1,382	—	1,382
Total	5	$	262	—	1,382	429	2,073

The following table provides information related to re-modified troubled debt restructurings by portfolio segment and by class of financing receivable for the year ended December 31, 2016: 

	Number of  re-modified	Type of re-modification
	TDRs	Rate		Payment	Maturity date	Other	Total
Personal Banking:
Residential mortgage loans	—	$	—	—	—	—	—
Home equity loans	1	—		—	—	192	192
Total Personal Banking	1	—		—	—	192	192
Commercial Banking:
Commercial real estate loans	2	—		—	1,329	173	1,502
Commercial loans	4	—		502	—	—	502
Total Commercial Banking	6	—		502	1,329	173	2,004
Total	7	$	—	502	1,329	365	2,196

92

NORTHWEST BANCSHARES, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements 

December 31, 2017, 2016 and 2015

(All dollar amounts presented in tables are in thousands, except as indicated)

The following table provides information related to loan delinquencies as of December 31, 2017:

	30-59 days delinquent		60-89 days delinquent	90 days or greater delinquent	Total delinquency	Current	Total loans	90 days or greater delinquent and accruing (1)
Originated loans
Personal Banking:
Residential mortgage loans	$	23,786	6,030	12,613	42,429	2,619,951	2,662,380	—
Home equity loans	6,094		2,333	6,043	14,470	1,037,088	1,051,558	—
Consumer finance loans	2,128		1,113	199	3,440	15,179	18,619	—
Consumer loans	9,762		2,834	3,274	15,870	537,496	553,366	—
Total Personal Banking	41,770		12,310	22,129	76,209	4,209,714	4,285,923	—
Commercial Banking:
Commercial real estate loans	5,520		2,133	10,629	18,282	2,142,930	2,161,212	—
Commercial loans	1,469		204	2,806	4,479	516,719	521,198	—
Total Commercial Banking	6,989		2,337	13,435	22,761	2,659,649	2,682,410	—
Total originated loans	48,759		14,647	35,564	98,970	6,869,363	6,968,333	—
Acquired loans
Personal Banking:
Residential mortgage loans	1,998		205	1,277	3,480	110,343	113,823	381
Home equity loans	1,367		538	1,306	3,211	255,586	258,797	98
Consumer loans	1,150		517	353	2,020	97,384	99,404	10
Total Personal Banking	4,515		1,260	2,936	8,711	463,313	472,024	489
Commercial Banking:
Commercial real estate loans	2,795		406	5,655	8,856	284,658	293,514	923
Commercial loans	396		237	334	967	58,571	59,538	—
Total Commercial Banking	3,191		643	5,989	9,823	343,229	353,052	923
Total acquired loans	7,706		1,903	8,925	18,534	806,542	825,076	1,412
Total loans	$	56,465	16,550	44,489	117,504	7,675,905	7,793,409	1,412

 (1) Represents acquired loans that were originally recorded at fair value upon acquisition. These loans are considered to be accruing because we can reasonably estimate future cash flows and expect to fully collect the carrying value of these loans. Therefore, we are accreting the difference between the carrying value and their expected cash flows into interest income.

93

NORTHWEST BANCSHARES, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements 

December 31, 2017, 2016 and 2015

(All dollar amounts presented in tables are in thousands, except as indicated)

The following table provides information related to loan delinquencies as of December 31, 2016: 

	30-59 days delinquent		60-89 days delinquent	90 days or greater delinquent	Total delinquency	Current	Total loans	90 days or greater delinquent and accruing (1)
Originated loans
Personal Banking:
Residential mortgage loans	$	26,212	5,806	12,792	44,810	2,519,845	2,564,655	—
Home equity loans	5,785		1,305	4,783	11,873	1,031,040	1,042,913	—
Consumer finance loans	1,255		766	743	2,764	46,217	48,981
Consumer loans	7,343		2,438	2,775	12,556	415,508	428,064	—
Total Personal Banking	40,595		10,315	21,093	72,003	4,012,610	4,084,613	—
Commercial Banking:
Commercial real estate loans	7,674		3,674	16,508	27,856	1,944,227	1,972,083	—
Commercial loans	1,067		1,957	3,107	6,131	449,244	455,375	—
Total Commercial Banking	8,741		5,631	19,615	33,987	2,393,471	2,427,458	—
Total originated loans	49,336		15,946	40,708	105,990	6,406,081	6,512,071	—
Acquired loans
Personal Banking:
Residential mortgage loans	1,174		421	829	2,424	131,087	133,511	452
Home equity loans	1,020		258	973	2,251	300,206	302,457	204
Consumer loans	1,270		405	320	1,995	163,921	165,916	15
Total Personal Banking	3,464		1,084	2,122	6,670	595,214	601,884	671
Commercial Banking:
Commercial real estate loans	2,703		821	4,762	8,286	361,720	370,006	2,006
Commercial loans	111		124	413	648	72,738	73,386	147
Total Commercial Banking	2,814		945	5,175	8,934	434,458	443,392	2,153
Total acquired loans	6,278		2,029	7,297	15,604	1,029,672	1,045,276	2,824
Total loans	$	55,614	17,975	48,005	121,594	7,435,753	7,557,347	2,824

(1) Represents acquired loans that were originally recorded at fair value upon acquisition. These loans are considered to be accruing because we can reasonably estimate future cash flows and expect to fully collect the carrying value of these loans. Therefore, we are accreting the difference between the carrying value and their expected cash flows into interest income.

94

NORTHWEST BANCSHARES, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements 

December 31, 2017, 2016 and 2015

(All dollar amounts presented in tables are in thousands, except as indicated)

Credit quality indicators:  We categorize loans into risk categories based on relevant information about the ability of borrowers to service their debt such as: current financial information, historical payment experience, credit documentation, public information, and current economic trends, among other factors. We analyze business loans individually by classifying the loans by credit risk.  Relationships greater than or equal to $1.0 million classified as special mention or substandard are reviewed quarterly for further deterioration or improvement to determine if the loan is appropriately classified.  We use the following definitions for risk ratings other than pass:

Special mention — Loans designated as special mention have specific, well-defined risk issues, which create a high level of uncertainty regarding the long-term viability of the business. Loans in this class are considered to have high-risk characteristics.  A special mention loan exhibits material negative financial trends due to company-specific or systemic conditions.  If these potential weaknesses are not mitigated, they threaten the borrower’s capacity to meet its debt obligations.  Special mention loans still demonstrate sufficient financial flexibility to react to and positively address the root cause of the adverse financial trends without significant deviations from their current business strategy. Their potential weaknesses deserve our close attention and warrant enhanced monitoring.

Substandard — Loans classified as substandard are inadequately protected by the current net worth and payment capacity of the obligor or of the collateral pledged, if any.  Loans so classified have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt.  They are characterized by the distinct possibility that we will sustain some loss if the deficiencies are not corrected.

Doubtful — Loans classified as doubtful have all the weaknesses inherent in those classified as substandard.   In addition, those weaknesses make collection or liquidation in full highly questionable and improbable.   A loan classified as doubtful exhibits discernible loss potential, but a complete loss seems very unlikely.  The possibility of a loss on a doubtful loan is high, but because of certain important and reasonably specific pending factors that may strengthen the loan, its classification as an estimated loss is deferred until a more exact status can be determined.

Loss — Loans classified as loss are considered uncollectible and of such value that the continuance as a loan is not warranted.  A loss classification does not mean that the loan has no recovery or salvage value; instead, it means that it is not practical or desirable to defer writing off all or a portion of a basically worthless loan even though partial recovery may be affected in the future.

95

NORTHWEST BANCSHARES, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements 

December 31, 2017, 2016 and 2015

(All dollar amounts presented in tables are in thousands, except as indicated)

The following table sets forth information about credit quality indicators as of December 31, 2017: 

	Pass		Special mention	Substandard	Doubtful	Loss	Total
Originated loans
Personal Banking:
Residential mortgage loans	$	2,645,475	—	16,905	—	—	2,662,380
Home equity loans	1,042,965		—	8,593	—	—	1,051,558
Consumer finance loans	18,420		—	199	—	—	18,619
Consumer loans	549,550		—	3,816	—	—	553,366
Total Personal Banking	4,256,410		—	29,513	—	—	4,285,923
Commercial Banking:
Commercial real estate loans	1,964,565		78,699	117,948	—	—	2,161,212
Commercial loans	461,962		15,510	43,726	—	—	521,198
Total Commercial Banking	2,426,527		94,209	161,674	—	—	2,682,410
Total originated loans	6,682,937		94,209	191,187	—	—	6,968,333
Acquired loans
Personal Banking:
Residential mortgage loans	112,990		—	833	—	—	113,823
Home equity loans	257,312		—	1,485	—	—	258,797
Consumer loans	98,659		—	745	—	—	99,404
Total Personal Banking	468,961		—	3,063	—	—	472,024
Commercial Banking:
Commercial real estate loans	251,761		4,838	36,915	—	—	293,514
Commercial loans	49,073		3,787	6,678	—	—	59,538
Total Commercial Banking	300,834		8,625	43,593	—	—	353,052
Total acquired loans	769,795		8,625	46,656	—	—	825,076
Total loans	$	7,452,732	102,834	237,843	—	—	7,793,409

96

NORTHWEST BANCSHARES, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements 

December 31, 2017, 2016 and 2015

(All dollar amounts presented in tables are in thousands, except as indicated)

The following table sets forth information about credit quality indicators as of December 31, 2016: 

	Pass		Special mention	Substandard	Doubtful	Loss	Total
Originated loans
Personal Banking:
Residential mortgage loans	$	2,548,390	—	16,265	—	—	2,564,655
Home equity loans	1,035,496		—	7,417	—	—	1,042,913
Consumer finance loans	48,238		—	743	—	—	48,981
Consumer loans	425,712		—	2,352	—	—	428,064
Total Personal Banking	4,057,836		—	26,777	—	—	4,084,613
Commercial Banking:
Commercial real estate loans	1,821,548		36,321	114,214	—	—	1,972,083
Commercial loans	401,866		15,203	38,306	—	—	455,375
Total Commercial Banking	2,223,414		51,524	152,520	—	—	2,427,458
Total originated loans	6,281,250		51,524	179,297	—	—	6,512,071
Acquired loans
Personal Banking:
Residential mortgage loans	131,717		—	1,794	—	—	133,511
Home equity loans	300,100		—	2,357	—	—	302,457
Consumer loans	165,094		—	822	—	—	165,916
Total Personal Banking	596,911		—	4,973	—	—	601,884
Commercial Banking:
Commercial real estate loans	331,780		7,403	30,823	—	—	370,006
Commercial loans	68,127		1,989	3,270	—	—	73,386
Total Commercial Banking	399,907		9,392	34,093	—	—	443,392
Total acquired loans	996,818		9,392	39,066	—	—	1,045,276
Total loans	$	7,278,068	60,916	218,363	—	—	7,557,347

Our exposure to credit loss in the event of nonperformance by the other party to off-balance-sheet financial instruments is represented by the contract amount of the financial instrument. We use the same credit policies in making commitments for off-balance-sheet financial instruments as we do for on-balance-sheet instruments. Financial instruments with off-balance-sheet risk as of December 31, 2017 and 2016 are presented in the following table: 

	December 31,
	2017		2016
Loan commitments	$	181,058	109,032
Undisbursed lines of credit	872,700		843,457
Standby letters of credit	25,718		25,039
Total	$	1,079,476	977,528

97

NORTHWEST BANCSHARES, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements 

December 31, 2017, 2016 and 2015

(All dollar amounts presented in tables are in thousands, except as indicated)

Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. We evaluate each customer’s creditworthiness on a case-by-case basis. The amount of collateral we obtain upon extension of credit is based on management’s credit evaluation of the counterparty. Collateral held varies but generally may include cash, marketable securities, real estate and other property.

Outstanding loan commitments at December 31, 2017, for fixed rate loans, were $40.7 million. The interest rates on these commitments approximate market rates at December 31, 2017. Outstanding loan commitments at December 31, 2017 for adjustable rate loans were $140.4 million.  The fair values of these commitments are affected by fluctuations in market rates of interest.

We issue standby letters of credit in the normal course of business. Standby letters of credit are conditional commitments issued to guarantee the performance of a customer to a third party. Standby letters of credit generally are contingent upon the failure of the customer to perform according to the terms of the underlying contract with the third party. We are required to perform under a standby letter of credit when drawn upon by the guaranteed third party in the case of nonperformance by our customer. The credit risk associated with standby letters of credit is essentially the same as that involved in extending loans to customers and is subject to normal credit policies. Collateral may be obtained based on management’s credit assessment of the customer. As of December 31, 2017, the maximum potential amount of future payments we could be required to make under these standby letters of credit is $25.7 million, of which $17.2 million is fully collateralized. A liability (which represents deferred income) of $169,000 and $178,000 has been recognized for the obligations as of December 31, 2017 and 2016, respectively, and there are no recourse provisions that would enable us to recover any amounts from third parties.

Mortgage servicing assets are recognized as separate assets when servicing rights are created through loan originations and the underlying loan is sold. Upon sale, the mortgage servicing right (“MSR”) is established, which represents the then-fair value of future net cash flows expected to be realized for performing the servicing activities. The fair value of the MSRs are estimated by calculating the present value of estimated future net servicing cash flows, taking into consideration actual and expected mortgage loan prepayment rates, discount rates, servicing costs and other economic factors, which are determined based on current market conditions. In determining the fair value of the MSRs, stochastic modeling is performed using variables such as the forward yield curve, prepayment rates, annual service cost, average life expectancy and option adjusted spreads. MSRs are amortized against mortgage banking income in proportion to, and over the period of, the estimated future net servicing income of the underlying mortgage loans. MSRs are recorded in other assets on the consolidated statements of financial condition.

Capitalized MSRs are evaluated quarterly for impairment based on the estimated fair value of those rights. The MSRs are stratified by certain risk characteristics, primarily loan term and note rate. If impairment exists within a risk stratification tranche, a valuation allowance is established through a charge to income equal to the amount by which the carrying value exceeds the fair value. If it is later determined all or a portion of the temporary impairment no longer exists for a particular tranche, the valuation allowance is reduced or eliminated. We do not directly hedge against realized or potential future impairment losses on our MSRs.

The following table shows changes in MSRs as of and for the years ended December 31, 2017 and 2016:

	Servicing rights			Valuation allowance		Net carrying value and fair value
Balance at December 31, 2015	$	1,666		—		1,666
Additions	3,523			(4	)	3,519
Amortization	(950		)	—		(950	)
Balance at December 31, 2016	4,239			(4	)	4,235
Additions	833			4		837
Amortization	(1,549		)	—		(1,549	)
Balance at December 31, 2017	$	3,523		—		3,523

98

NORTHWEST BANCSHARES, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements 

December 31, 2017, 2016 and 2015

(All dollar amounts presented in tables are in thousands, except as indicated)

(5)Accrued Interest Receivable

Accrued interest receivable as of December 31, 2017 and 2016 is presented in the following table: 

	December 31,
	2017		2016
Investment securities	$	1,260	1,613
Mortgage-backed securities	1,107		910
Loans receivable	20,985		19,176
	$	23,352	21,699

(6)    Federal Home Loan Bank Stock

Northwest Bank is a member of the Federal Home Loan Bank system.  As a member, we are required to maintain an investment in the capital stock of the FHLB of Pittsburgh in accordance with their 2015 Capital Plan, at cost, in two subclasses based on the following ranges:  Membership stock purchase (Subclass B-1) ranging from 0.05% to 1.0% of the member asset value as defined by the FHLB, currently at 0.10%; and Activity-based stock purchase (Subclass B-2) ranging from 2.0% to 6.0% of outstanding advances, currently at 4.0%; 0.0% to 6.0% of acquired member assets, currently at 4.0%; 0.0% to 4.0% of certain letters of credit, currently at 0.75%; and 0.0% to 6.0% of outstanding advance commitments settling more than 30 days after trade, currently at 0.0%. We received dividends on capital stock during the years ended December 31, 2017 and 2016 of $250,000 and $1.4 million, respectively.  Future dividends may be established at different rates for the two subclasses of capital stock.

(7)Premises and Equipment

Premises and equipment at December 31, 2017 and 2016 are summarized by major classification in the following table:

	December 31,
	2017			2016
Land and land improvements	$	21,563		21,229
Office buildings and improvements	150,056			156,162
Furniture, fixtures and equipment	125,347			120,391
Leasehold improvements	19,909			19,859
Total, at cost	316,875			317,641
Less accumulated depreciation and amortization	(164,931		)	(156,456	)
Premises and equipment, net	$	151,944		161,185

Depreciation and amortization expense for the years ended December 31, 2017, 2016 and 2015 was $12.4 million, $13.7 million and $13.3 million, respectively.

Premises used by certain of our offices are occupied under formal operating lease arrangements. The leases expire on various dates through 2027. Minimum annual rentals by fiscal year are summarized in the following table: 

2018	$	4,395
2019	3,300
2020	2,726
2021	2,232
2022	1,620
Thereafter	7,413
Total	$	21,686

Rental expense for the years ended December 31, 2017, 2016 and 2015 was $5.6 million, $5.3 million and $4.6 million, respectively.

99

NORTHWEST BANCSHARES, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements 

December 31, 2017, 2016 and 2015

(All dollar amounts presented in tables are in thousands, except as indicated)

(8)    Goodwill and Other Intangible Assets

The following table provides information for intangible assets subject to amortization for the years ended December 31, 2017 and 2016: 

	December 31,
	2017			2016
Amortizable intangible assets:
Core deposit intangibles - gross	$	63,685		37,953
Acquisitions	—			25,732
Less: accumulated amortization	(40,029		)	(34,378	)
Core deposit intangibles - net	$	23,656		29,307
Customer and Contract intangible assets - gross	$	10,474		8,496
Acquisitions	—			1,978
Less: accumulated amortization	(8,461		)	(7,348	)
Customer and Contract intangible assets - net	$	2,013		3,126

The following information shows the actual aggregate amortization expense for the years ended December 31, 2017, 2016 and 2015 as well as the estimated aggregate amortization expense, based upon current levels of intangible assets, for each of the five succeeding fiscal years: 

For the year ended December 31, 2015	$	1,688
For the year ended December 31, 2016	4,259
For the year ended December 31, 2017	6,764
For the year ending December 31, 2018	5,848
For the year ending December 31, 2019	4,933
For the year ending December 31, 2020	4,017
For the year ending December 31, 2021	3,188
For the year ending December 31, 2022	2,456

The following table provides information for the changes in the carrying amount of goodwill:

	Total
Balance at December 31, 2015	$	261,736
Goodwill acquired	45,684
Balance at December 31, 2016	307,420
Goodwill acquired	—
Balance at December 31, 2017	$	307,420

We have determined that goodwill is not impaired as of December 31, 2017 and 2016. There were no changes in our operations that would cause us to update the goodwill impairment test performed as of June 30, 2017.

100

NORTHWEST BANCSHARES, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements 

December 31, 2017, 2016 and 2015

(All dollar amounts presented in tables are in thousands, except as indicated)

(9)    Deposits

Deposit balances at December 31, 2017 and 2016 are shown in the table below:

	December 31,
	2017		2016
Savings deposits	$	1,653,579	1,622,879
Interest-bearing demand deposits	1,442,928		1,428,317
Noninterest-bearing demand deposits	1,610,409		1,448,972
Money market deposit accounts	1,707,450		1,841,567
Time deposits	1,412,623		1,540,586
Total deposits	$	7,826,989	7,882,321

The aggregate amount of time deposits with a minimum denomination of $100,000 at December 31, 2017 and 2016 was $436.4 million and $451.6 million, respectively. 

Generally, deposits in excess of $250,000 are not federally insured. At December 31, 2017 we had $1.639 billion of deposits in accounts exceeding $250,000.

The following table summarizes the contractual maturity of time deposits at December 31, 2017 and 2016: 

	December 31,
	2017		2016
Due within 12 months	$	666,348	836,525
Due between 12 and 24 months	226,171		311,976
Due between 24 and 36 months	201,654		153,708
Due between 36 and 48 months	131,530		90,777
Due between 48 and 60 months	174,704		134,687
After 60 months	12,216		12,913
Total time deposits	$	1,412,623	1,540,586

The following table summarizes the interest expense incurred on the respective deposits for the years ended December 31, 2017, 2016 and 2015: 

	Years ended December 31,
	2017		2016	2015
Savings deposits	$	3,062	3,218	3,387
Interest-bearing demand deposits	1,027		462	568
Money market deposit accounts	4,203		3,621	3,222
Time deposits	14,765		16,164	16,878
Total interest expense	$	23,057	23,465	24,055

101

NORTHWEST BANCSHARES, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements 

December 31, 2017, 2016 and 2015

(All dollar amounts presented in tables are in thousands, except as indicated)

(10)     Borrowed Funds

(a)Borrowings

Borrowed funds at December 31, 2017 and 2016 are presented in the following table:

	December 31,
	2017				2016
	Amount		Average rate		Amount		Average rate
Collateralized borrowings, due within one year	$	108,238	0.20	%	$	142,899	0.17	%

Borrowings from the FHLB of Pittsburgh, if any, are secured by our residential first mortgage and other qualifying loans. Certain of these borrowings are subject to restrictions or penalties in the event of prepayment.

The revolving line of credit with the FHLB of Pittsburgh carries a commitment of $150.0 million. The rate is adjusted daily by the FHLB of Pittsburgh, and any borrowings on this line may be repaid at any time without penalty.

At December 31, 2017 collateralized borrowings, due within one year were $108.2 million, and $142.9 million at December 31, 2016. The collateralized borrowings are collateralized by various securities held in safekeeping by the FHLB of Pittsburgh. The market value of these securities exceeds the value of the collateralized borrowings. The average amount of collateralized borrowings outstanding in the years ended December 31, 2017, 2016 and 2015 was $121.0 million, $141.6 million and $144.7 million, respectively. The maximum amount of collateralized borrowings outstanding during the years ended December 31, 2017, 2016 and 2015 was $137.2 million, $158.4 million and $166.4 million, respectively.

(b)Trust Preferred Securities

We have three statutory business trusts: Northwest Bancorp Capital Trust III, a Delaware statutory business trust, Northwest Bancorp Statutory Trust IV, a Connecticut statutory business trust and LNB Trust II, a Delaware statutory business trusts (the Trusts). The trusts exist solely to issue preferred securities to third parties for cash, issue common securities to the Company in exchange for capitalization of the Trusts, invest the proceeds from the sale of trust securities in an equivalent amount of debentures of the Company, and engage in other activities that are incidental to those previously listed. Northwest Bancorp Capital Trust III issued 50,000 cumulative trust preferred securities in a private transaction to a pooled investment vehicle on December 5, 2005 (liquidation value of $1,000 per preferred security or $50,000,000) with a stated maturity of December 30, 2035 and a floating rate of interest, which is reset quarterly, equal to three-month LIBOR plus 1.38%. Northwest Bancorp Statutory Trust IV issued 50,000 cumulative trust preferred securities in a private transaction to a pooled investment vehicle on December 15, 2005 (liquidation value of $1,000 per preferred security or $50,000,000) with a stated maturity of December 15, 2035 and a floating rate of interest, which is reset quarterly, equal to three-month LIBOR plus 1.38%.  LNB Trust II had 7,875 cumulative trust preferred securities outstanding (liquidation value of $1,000 per preferred security or $7,875,000) with a stated maturity of June 15, 2037 an a floating rate of interest, which resets quarterly, equal to three-month LIBOR plus 1.48%. As the shareholders of the trust preferred securities are the primary beneficiaries of the Trusts, the Trusts are not consolidated in our financial statements.

The Trusts have invested the proceeds of the offerings in junior subordinated deferrable interest debentures issued by the Company. The structure of these debentures mirrors the structure of the trust-preferred securities.  Northwest Bancorp Capital Trust III holds $51,547,000 of the Company’s junior subordinated debentures due December 30, 2035 with a floating rate of interest, reset quarterly, of three-month LIBOR plus 1.38%. The rate in effect at December 31, 2017 was 3.07%. Northwest Bancorp Statutory Trust IV holds $51,547,000 of the Company’s junior subordinated debentures due December 15, 2035 with a floating rate of interest, reset quarterly, of three-month LIBOR plus 1.38%. The rate in effect at December 31, 2017 was 2.97%. LNB Trust II holds $8,119,000 of the Company's junior subordinated debentures due June 15, 2037, with a floating rate of interest, reset quarterly, of three-month LIBOR plus 1.48%. The rate in effect at December 31, 2017 was 3.07%.

Cash distributions on the trust securities are made on a quarterly basis to the extent interest on the debentures is received by the Trusts.  We have the right to defer payment of interest on the subordinated debentures at any time, or from time-to-time,

102

NORTHWEST BANCSHARES, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements 

December 31, 2017, 2016 and 2015

(All dollar amounts presented in tables are in thousands, except as indicated)

for periods not exceeding 5 years. If interest payments on the subordinated debentures are deferred, the distributions on the trust securities also are deferred. To date there have been no interest deferrals. Interest on the subordinated debentures and distributions on the trust securities is cumulative. Our obligation constitutes a full, irrevocable, and unconditional guarantee on a subordinated basis of the obligations of the trust under the preferred securities.

The Trusts must redeem the preferred securities when the debentures are paid at maturity or upon an earlier redemption of the debentures to the extent the debentures are redeemed. All or part of the debentures may be redeemed at any time. Also, the debentures may be redeemed at any time if existing laws or regulations, or the interpretation or application of these laws or regulations, change causing:

• the interest on the debentures to no longer be deductible by the Company for federal income tax purposes;

• the trust to become subject to federal income tax or to certain other taxes or governmental charges;

• the trust to register as an investment company; or

• the preferred securities do not qualify as Tier I capital. 

We may, at any time, dissolve any of the Trusts and distribute the debentures to the trust security holders, subject to receipt of any required regulatory approval(s).

The following table sets forth a summary of guaranteed capital debt securities and junior subordinated deferrable interest debentures held by the trusts as of December 31, 2017 and 2016: 

	Capital debt		December 31,
	securities		2017	2016
Northwest Bancorp Capital Trust III	$	50,000	51,547	51,547
Northwest Bancorp Statutory Trust IV	50,000		51,547	51,547
LNB Trust II	7,875		8,119	8,119
Total	$	107,875	111,213	111,213

(11)Income Taxes

Total income tax was allocated for the years ended December 31, 2017, 2016 and 2015 as follows: 

	Years ended December 31,
	2017			2016		2015
Income before income taxes	$	41,444		21,648		27,960
Shareholders’ equity for unrealized (loss)/ gain on securities available-for-sale	(3,403		)	(1,871	)	(85	)
Shareholders’ equity for tax benefit for excess of fair value above cost of stock benefit plans	—			(1,425	)	(332	)
Shareholders’ equity for pension adjustment	(213		)	(2,455	)	(848	)
Shareholders’ equity for swap fair value adjustment	585			539		699
Unallocated income tax	$	38,413		16,436		27,394

Income tax expense applicable to income before taxes consists of: 

	Years ended December 31,
	2017		2016	2015
Current	$	30,127	18,914	21,670
Deferred	11,317		2,734	6,290
Total income tax expense	$	41,444	21,648	27,960

103

NORTHWEST BANCSHARES, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements 

December 31, 2017, 2016 and 2015

(All dollar amounts presented in tables are in thousands, except as indicated)

A reconciliation of the expected federal statutory income tax rate to the effective rate, expressed as a percentage of pretax income for the years ended December 31, 2017, 2016 and 2015, is as follows:

	Years ended December 31,
	2017		2016		2015
Expected tax rate	35.0	%	35.0	%	35.0	%
Tax-exempt interest income	(1.5	)%	(3.3	)%	(3.0	)%
State income tax, net of federal benefit	3.2	%	1.2	%	2.9	%
Bank-owned life insurance	(1.6	)%	(2.6	)%	(1.7	)%
Stock-based compensation	(0.9	)%	—	%	—	%
Dividends on stock plans	(1.1	)%	(2.0	)%	(0.8	)%
Low income housing and historic tax credits	(0.5	)%	(1.0	)%	(1.4	)%
Non-deductible acquisition expense	—	%	—	%	0.5	%
ESOP termination	—	%	3.4	%	—	%
Adjustment to net deferred tax liabilities for enacted changes in tax laws and rates	(2.3	)%	—	%	—	%
Other	0.2	%	(0.3	)%	0.1	%
Effective tax rate	30.5	%	30.4	%	31.6	%

The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities at December 31, 2017 and 2016 are presented below: 

	December 31,
	2017		2016
Deferred tax assets:
Deferred rent	$	87	187
Deferred compensation expense	1,040		2,893
Bad debts	10,277		18,823
Other reserves	953		1,823
Accrued postretirement benefit cost	413		641
Stock benefit plans	744		1,085
Writedown of investment securities	104		2,875
Accrued expenses	35		95
Pension and postretirement benefits	13,033		18,491
Unrealized loss on the fair value of derivatives	223		958
Unrealized loss on the fair value of securities available-for-sale	2,160		—
Purchase accounting	—		1,215
Deferred income	1,001		253
Other	141		153
Total deferred tax assets	30,211		49,492
Deferred tax liabilities:
Pension expense	5,542		8,689
Unrealized gain on the fair value of securities available-for-sale	—		252
Purchase accounting	303		—
Intangible assets	13,546		21,927
Mortgage servicing rights	777		1,559
Fixed assets	4,940		8,107
Net deferred loan fees	4,690		—
Other	274		635
Total deferred tax liabilities	30,072		41,169
Net deferred tax asset	$	139	8,323

104

NORTHWEST BANCSHARES, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements 

December 31, 2017, 2016 and 2015

(All dollar amounts presented in tables are in thousands, except as indicated)

We recorded a valuation allowance against state deferred tax assets of a Northwest subsidiary since the subsidiary is not expected to utilize its deferred tax assets in the foreseeable future. This valuation allowance is netted against other deferred tax assets in the preceding table.

Other than stated above, we have determined that no valuation allowance is necessary for the deferred tax assets because it is more likely than not that these assets will be realized through future reversals of existing temporary differences and through future taxable income. We will continue to review the criteria related to the recognition of deferred tax assets on a regular basis.

We utilize a comprehensive model to recognize, measure, present and disclose in our financial statements uncertain tax positions that the company has taken or expects to take on a tax return.  At December 31, 2017, there were no unrecognized tax benefits that, if recognized, would favorably affect the effective income tax rate.  We recognize interest accrued and penalties (if any) related to unrecognized tax benefits in income tax expense.  During the year ended December 31, 2017, we did not accrue any interest.  At December 31, 2017, we had no amount accrued for interest or the payment of penalties.

We are subject to routine audits of our tax returns by the Internal Revenue Service as well as all states in which we conduct business.  We are subject to audit by the Internal Revenue Service for the tax periods ended December 31, 2017, 2016, 2015 and 2014 and subject to audit by any state in which we conduct business for the tax periods ended December 31, 2017, 2016, 2015 and 2014. The New York State audit of the Company's 2011to 2014 tax years was finalized in 2016, resulting in an additional tax liability of $444,000. The Internal Revenue Service audit of the 2013 tax year of LNB was concluded in 2016 and resulted in no additional tax liability.

The Act reduces our corporate federal tax rate from 35.0% to 21.0% effective January 1, 2018. As a result we are required to re-measure, through income tax expense, our deferred tax assets and liabilities using the enacted rate at which we expect them to be recovered or settled. The re-measurement of our net deferred tax liability resulted in a 2017 income tax benefit of $3.1 million.

Also on December 22, 2017, the U.S. Securities and Exchange Commission (“SEC”) released Staff Accounting Bulletin No. 118 (“SAB 118”) to address any uncertainty or diversity of views in practice in accounting for the income tax effects of the Act in situations where a registrant does not have the necessary information available, prepared, or analyzed in reasonable detail to complete this accounting in the reporting period that includes the enactment date. SAB 118 allows for a measurement period not to extend beyond one year from the Act’s enactment date to complete the necessary accounting.

We recorded provisional amounts of deferred income taxes using reasonable estimates in five areas where information necessary to complete the accounting was not available, prepared, or analyzed: (i) our deferred tax liability for temporary differences between the tax and financial reporting bases of fixed assets is awaiting completion and implementation of software updates to process the calculations associated with the Act's provisions allowing for 100% bonus depreciation on fixed assets purchased and placed in service after September 27, 2017; (ii) our deferred tax asset for temporary differences associated with accrued compensation is awaiting final determinations of amounts that will be paid on or before March 15, 2018 and deducted on the 2017 income tax returns; (iii) our deferred tax liability for temporary differences associated with equity investments in partnerships is awaiting receipt of Schedules K-1 from outside preparers, which is necessary to determine our 2017 tax impact from these investments; (iv) our deferred tax liability for temporary differences related to our qualified pension plan is based upon actuarial reports from our third party provider, however we are still in the process of determining if a contribution related to the 2017 plan year will be made; (v) our deferred tax liability for temporary differences related to deferred loans fees is based upon the assumption the IRS will accept the tax treatment requested in the consent change in tax accounting method filed in 2017.

In a sixth area, we made no adjustments to deferred tax assets representing future deductions for accrued compensation that may be subject to new limitations under Internal Revenue Code Section 162(m) which, generally, limits the annual deduction for certain compensation paid to certain employees to $1 million. There is uncertainty in applying the newly-enacted rules to existing contracts, and we are seeking further clarifications before completing our analysis. We will complete and record the income tax effects of these provisional items during the period the necessary information becomes available. This measurement period will not extend beyond December 22, 2018.

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NORTHWEST BANCSHARES, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements 

December 31, 2017, 2016 and 2015

(All dollar amounts presented in tables are in thousands, except as indicated)

(12)    Shareholders’ Equity

Retained earnings are partially restricted in connection with regulations related to the insurance of deposit accounts, which requires Northwest to maintain certain statutory reserves. Northwest may not pay dividends on or repurchase any of its common stock if the effect thereof would reduce retained earnings below the level of adequate capitalization as defined by federal and state regulators.

In tax years prior to fiscal 1997, Northwest was permitted, under the Internal Revenue Code ("IRC"), to deduct an annual addition to a reserve for bad debts in determining taxable income, subject to certain limitations. Bad debt deductions for income tax purposes are included in taxable income of later years only if the bad debt reserve is used subsequently for purposes other than to absorb bad debt losses. Because Northwest does not intend to use the reserve for purposes other than to absorb losses, no deferred income taxes have been provided prior to fiscal 1987. Retained earnings at December 31, 2017 and 2016 include approximately $39.1 million representing such bad debt deductions for which no deferred income taxes have been provided.

(13)    Earnings Per Share

Basic earnings per common share ("EPS") is computed by dividing net income available to common shareholders by the weighted average number of common shares outstanding for the period, without considering any dilutive items.  Diluted EPS reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that then shared in our earnings. All stock options outstanding during the years ended December 31, 2017 and 2016 were included in the computation of diluted earnings per share because the stock options exercise price was less than the average market price of the common shares of $16.64 and $14.79, respectively. For the year ended December 31, 2015 there were 524,250 options outstanding with a weighted average exercise price of $13.15 per share that were excluded in the computation of diluted earnings per share because the stock options’ exercise price was greater than the average market price of the common shares of $12.64. 

The computation of basic and diluted earnings per share for the years ended December 31, 2017, 2016 and 2015 follows: 

	Years ended December 31,
	2017		2016	2015
Net income available to common shareholders	$	94,467	49,667	60,540
Weighted average common shares outstanding	101,015,083		99,439,174	94,314,420
Dilutive potential shares due to effect of stock options	1,549,822		1,225,514	515,369
Total weighted average common shares and dilutive potential shares	102,564,905		100,664,688	94,829,789
Basic earnings per share (1)	$	0.94	0.50	0.64
Diluted earnings per share (1)	$	0.92	0.49	0.64

(1)  Not in thousands.

(14)    Employee Benefit Plans

(a)Pension Plans

We maintain noncontributory defined benefit pension plans covering substantially all employees and members of our board of directors. Retirement benefits are based on certain compensation levels, age, and length of service. Contributions are based on an actuarially determined amount to fund not only benefits attributed to service to date but also for those expected to be earned in the future. In addition, we have an unfunded Supplemental Executive Retirement Plan (“SERP”) to compensate those executive participants eligible for the defined benefit pension plan whose benefits are limited by Section 415 of the IRC.

We also sponsor a retirement savings plan in which substantially all employees participate. We provide a matching contribution of 100% of each employee’s contribution to a maximum of 4% of the employee’s compensation.

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Notes to Consolidated Financial Statements 

December 31, 2017, 2016 and 2015

(All dollar amounts presented in tables are in thousands, except as indicated)

Total expense for all retirement plans, including defined benefit pension plans, was approximately $6.8 million, $5.8 million and $4.6 million, for the years ended December 31, 2017, 2016 and 2015, respectively.

Components of net periodic pension cost and other amounts recognized in other comprehensive income:

The following table sets forth the net periodic pension cost for the defined benefit pension plans for the years ended December 31, 2017, 2016 and 2015: 

	Years ended December 31,
	2017			2016		2015
Service cost	$	6,149		5,496		5,721
Interest cost	6,879			6,781		6,125
Expected return on plan assets	(10,512		)	(9,897	)	(10,371	)
Net amortization and deferral	1,388			1,388		1,375
Net periodic pension cost	$	3,904		3,768		2,850

The following table sets forth other changes in the defined benefit pension plans’ plan assets and benefit obligations recognized in other comprehensive income: 

	Years ended December 31,
	2017			2016	2015
Net loss/ (gain)	$	(1,647	)	1,550	(420	)
Prior service cost/ (credit)	—			—	—
Amortization of prior service cost	2,323			2,323	2,323
Total recognized in other comprehensive income	$	676		3,873	1,903
Total recognized in net periodic pension cost and other comprehensive income/ (loss)	$	4,580		7,641	4,753

The estimated net loss and prior service credit for the defined benefit pension plan that will be amortized from accumulated other comprehensive income into net periodic cost over the next year is $3.3 million and $(2.3) million, respectively.

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Notes to Consolidated Financial Statements 

December 31, 2017, 2016 and 2015

(All dollar amounts presented in tables are in thousands, except as indicated)

The following table sets forth information for the defined benefit pension plans’ funded status at December 31, 2017 and 2016: 

	December 31,
	2017			2016
Change in benefit obligation:
Benefit obligation at beginning of year	$	172,208		162,133
Service cost	6,149			5,496
Interest cost	6,879			6,781
Acquisition	—			—
Actuarial (gain)/ loss	14,807			4,267
Benefits paid	(6,901		)	(6,469	)
Benefit obligation at end of year	$	193,142		172,208
Change in plan assets:
Fair value of plan assets at beginning of year	$	152,625		143,655
Actual return on plan assets	23,255			8,903
Employer contributions	4,689			6,536
Acquisition	—			—
Benefits paid	(6,901		)	(6,469	)
Fair value of plan assets at end of period	$	173,668		152,625
Funded status at end of year	$	(19,474	)	(19,583	)

The following table sets forth the assumptions used to develop the net periodic pension cost: 

	Years ended December 31,
	2017		2016		2015
Discount rate	4.06	%	4.25	%	3.89	%
Expected long-term rate of return on assets	7.00	%	7.00	%	7.50	%
Rate of increase in compensation levels	3.00	%	3.00	%	3.00	%

The following table sets forth the assumptions used to determine benefit obligations at the end of each period:

	Years ended December 31,
	2017		2016		2015
Discount rate	3.53	%	4.06	%	4.25	%
Expected long-term rate of return on assets	7.00	%	7.00	%	7.00	%
Rate of increase in compensation levels	3.00	%	3.00	%	3.00	%

The expected long-term rate of return on assets is based on the expected return of each of the asset categories, weighted based on the median of the target allocation for each category.  We use the Citigroup Pension Liability Index rates matching the duration of our benefit payments as of the measurement date to determine the discount rate.

The accumulated benefit obligation for the funded defined benefit pension plan was $186.9 million, $165.9 million and $155.9 million at December 31, 2017, 2016 and 2015, respectively. The accumulated benefit obligation for all unfunded defined benefit plans was $6.2 million, $6.3 million and $6.3 million at December 31, 2017, 2016 and 2015, respectively.

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NORTHWEST BANCSHARES, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements 

December 31, 2017, 2016 and 2015

(All dollar amounts presented in tables are in thousands, except as indicated)

The following table sets forth certain information related to our pension plans: 

	December 31,
	2017		2016
Projected benefit obligation	$	193,142	172,208
Accumulated benefit obligation	193,142		172,208
Fair value of plan assets	173,668		152,625

We anticipate making a contribution to our defined benefit pension plan of $4.0 million to $6.0 million during the year ending December 31, 2018.

The investment policy as established by the Plan Administrative Committee, to be followed by the Trustee, is to invest assets based on the target allocations shown in the table below. To meet target allocation ranges set forth by the Plan Administrative Committee, periodically, the assets are reallocated by the Trustee.  The investment policy is reviewed periodically to determine if the policy should be changed. Pension assets are conservatively invested with the goal of providing market or better returns with below market risks. Assets are invested in a balanced portfolio composed primarily of equities, fixed income, and cash or cash equivalent investments. The Trustee tries to maintain an approximate asset mix position of 30% to 60% equities and 20% to 50% bonds.

A maximum of 10% may be invested in any one stock, including the stock of Northwest Bancshares, Inc. The objective of holding equity securities is to provide capital appreciation consistent with the ownership of the common stocks of medium to large companies. Acceptable bond investments are direct or agency obligations of the U.S. Government or investment grade corporate bonds. The average maturity of the bond portfolio shall not exceed 10 years.

The following table sets forth the weighted average asset allocation of defined benefit plans: 

	Target	December 31,
	allocation	2017		2016
Debt securities	20 – 50%	23	%	23	%
Equity securities	30 – 60%	73	%	72	%
Other	5 – 50%	4	%	5	%
Total		100	%	100	%

All of the assets held by the defined benefit pension plan are measured and recorded at estimated fair value on our balance sheet on a recurring basis as Level 1 assets, as defined by the fair value hierarchy defined in note 15.

The following table sets forth the pension plan assets as of December 31, 2017 and 2016: 

	December 31,
	2017		2016
Mutual funds - debt	$	40,010	35,224
Mutual funds - equity	125,871		110,078
Cash and cash equivalents	7,787		7,322

The benefits expected to be paid in each year from 2018 to 2022 are $5.9 million, $6.4 million, $6.6 million, $7.0 million and $7.5 million, respectively. The aggregate benefits expected to be paid in the five years from 2023 to 2027 are $42.6 million. The expected benefits to be paid are based on the same assumptions used to measure our benefit obligations at December 31, 2017 and include estimated future employee service.

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NORTHWEST BANCSHARES, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements 

December 31, 2017, 2016 and 2015

(All dollar amounts presented in tables are in thousands, except as indicated)

(b)Postretirement Healthcare Plan

In addition to pension benefits, we provide postretirement healthcare benefits for certain employees who were employed as of October 1, 1993 and were at least 55 years of age on that date. We use the accrual method of accounting for postretirement benefits other than pensions.

Components of net periodic benefit cost and other amounts recognized in other comprehensive income:

The following table sets forth the net periodic benefit cost for the postretirement healthcare benefits plan for the years ended December 31, 2017, 2016 and 2015:

	Years ended December 31,
	2017		2016	2015
Service cost	$	—	—	—
Interest cost	68		70	58
Amortization of net loss	108		90	60
Net period benefit cost	$	176	160	118

The following table sets forth other changes in the postretirement healthcare plan’s plan assets and benefit obligations recognized in other comprehensive income: 

	Years ended December 31,
	2017			2016	2015
Net loss/ (gain)	$	(156	)	109	273
Total recognized in other comprehensive income	$	(156	)	109	273
Total recognized in net periodic benefit cost and other comprehensive income	$	20		269	391

The estimated net loss for the postretirement healthcare benefit plan that will be amortized from accumulated other comprehensive income into net periodic benefit cost over the year ending December 31, 2018 is $98,000.

The following table sets forth the funded status of the postretirement healthcare benefit plan at December 31, 2017 and 2016: 

	December 31,
	2017			2016
Change in benefit obligation:
Benefit obligation at beginning of year	$	1,779		1,737
Service cost	—			—
Interest cost	68			70
Actuarial loss	(48		)	200
Benefits paid	(162		)	(228	)
Benefit obligation at end of year	$	1,637		1,779
Change in plan assets:
Fair value of plan assets at beginning of year	$	—		—
Employer contributions	162			228
Benefits paid	(162		)	(228	)
Fair value of plan assets at end of year	$	—		—
Funded status at year end	$	(1,637	)	(1,779	)

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NORTHWEST BANCSHARES, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements 

December 31, 2017, 2016 and 2015

(All dollar amounts presented in tables are in thousands, except as indicated)

The assumptions used to develop the preceding information for postretirement healthcare benefits are as follows: 

	Years ended December 31,
	2017			2016		2015
Discount rate	4.06		%	4.25	%	3.89	%
Monthly cost of healthcare insurance per beneficiary (1)	$	548		539		470
Annual rate of increase in healthcare costs	4.00		%	4.00	%	4.00	%

(1)   Not in thousands

If the assumed rate of increase in healthcare costs was increased by one percentage point to 5% from the level presented above, the interest cost component of net periodic postretirement healthcare benefit cost would increase by $8,000 and the accumulated postretirement benefit obligation for healthcare benefits would increase by $58,000.

The following table sets forth information for plans with an accumulated benefit obligation in excess of plan assets: 

	December 31,
	2017		2016
Projected benefit obligation	$	1,637	1,779
Accumulated benefit obligation	1,637		1,779
Fair value of plan assets	—		—

(c)Employee Stock Ownership Plan

On September 30, 2016, the Northwest Savings Bank Employee Stock Ownership Plan ("ESOP") was terminated and merged into the Northwest Bank 401(k) Plan.

ESOP compensation expense was $0, $6.3 million and $335,000 for the years ended December 31, 2017, 2016 and 2015, respectively.

Compensation expense related to the ESOP was recognized at an amount equal to the number of common shares committed to be released by the ESOP to participants’ accounts multiplied by the average fair value of the common stock during the reporting period. The difference between the fair value of the shares of the common stock committed to be allocated by the ESOP to participants’ accounts for the period and the average cost of those common shares is recorded as an adjustment to either additional paid-in capital or retained earnings.

(d)Common Stock Awards

On April 20, 2011, we established the Northwest Bancshares, Inc. 2011 Equity Incentive Plan with 2,806,233 common shares authorized.  On May 20, 2015, we awarded employees 282,050 common shares and outside directors 24,300 common shares with a grant date fair value of $12.31 per share (total market value of $3.8 million at issuance). On May 18, 2016, we awarded employees 310,160 common shares and outside directors 24,300 common shares with a grant date fair value of $14.51 per share (total market value of $4.9 million at issuance). On May 17, 2017, we awarded employees 378,050 common shares and outside directors 24,300 common shares with a grant date fair value of $15.24 per share (total market value of $5.8 million at issuance). Total common shares forfeited from the 2011 plan were 415,154, of which, 105,600 shares were forfeited during the year ended December 31, 2017. Forfeited shares may be awarded to other eligible recipients in future grants until the plan termination date in 2021.  Common shares vest over a 10-year period with the first vesting occurring on the grant date.  As of December 31, 2017, 30% of the 2015 issuances have vested, 20% of the 2016 issuances have vested and 10% of the 2017 issuances have vested.  Once shares have vested, they are no longer restricted. Compensation expense, in the amount of the fair market value of the common stock at the date of the grant, will be recognized pro rata over the periods in which the shares vest. While restricted, the recipients are entitled to all shareholder rights, except that the shares may not be sold, pledged, or otherwise disposed of and are required to be held in a trust.

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Notes to Consolidated Financial Statements 

December 31, 2017, 2016 and 2015

(All dollar amounts presented in tables are in thousands, except as indicated)

(e)Stock Option Plans

The Northwest Bancshares, Inc. 2011 Equity Incentive Plan also authorizes the granting of 7,015,583 stock options.  On May 20, 2015, we granted employees 660,570 stock options and outside directors 64,800 stock options with an exercise price of $12.37 per share.  On May 18, 2016, we granted employees 660,600 stock options and outside directors 64,800 stock options with an exercise price of $14.15 per share.  On May 17, 2017, we granted employees 754,210 stock options and outside directors 64,800 stock options with an exercise price of $15.57 per share.  Awarded stock options vest over a ten-year period with the first vesting occurring on the grant date with a ten year exercise period from the grant date.

The following table summarizes the activity in our option plans during the years ended December 31, 2017, 2016 and 2015 (amounts in this table are not in thousands): 

	Years ended December 31,
	2017				2016				2015
	Number		Weighted average exercise price		Number		Weighted average exercise price		Number		Weighted average exercise price
Balance at beginning of year	5,804,105		$	12.25	6,306,496		$	11.81	6,402,407		$	11.65
Granted (1)	819,010		15.57		725,400		14.15		665,370		12.37
Exercised (2)	(630,591	)	11.66		(1,081,072	)	11.01		(474,253	)	10.27
Forfeited/ expired	(296,954	)	12.43		(146,719	)	12.71		(287,028	)	12.26
Balance at end of year	5,695,570		12.75		5,804,105		12.25		6,306,496		11.81
Exercisable at end of year	3,016,367		11.99		3,035,718		11.71		3,431,113		11.42

(1) Weighted average fair value of options at grant date: $1.55, $1.52 and $1.14, respectively.

(2) The total intrinsic value of options exercised was $3.5 million, $5.1 million and $1.2 million, respectively.

The aggregate intrinsic value of all options expected to vest and fully vested options at December 31, 2017 is $8.6 million and $14.3 million, respectively.  The following table summarizes the number of options outstanding, number of options exercisable, and weighted average remaining life of all option grants as of December 31, 2017: 

	Exercise price $7.48	Exercise price $9.79	Exercise price $11.12	Exercise price $11.49	Exercise price $11.70	Exercise price $12.12	Exercise price $12.17
Options outstanding:
Number of options	164,289	143,224	48,027	260,456	384,380	342,789	14,500
Weighted average remaining contract life (years)	1.25	1.00	0.25	2.25	4.50	3.25	3.50
Options exercisable:
Number of options	164,289	143,224	48,027	260,456	237,916	299,253	13,000
Weighted average remaining term - vested (years)	1.25	1.00	0.25	2.25	4.50	3.25	3.50

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Notes to Consolidated Financial Statements 

December 31, 2017, 2016 and 2015

(All dollar amounts presented in tables are in thousands, except as indicated)

	Exercise price $12.32	Exercise price $12.37	Exercise price $12.44	Exercise price $13.15	Exercise price $14.15	Exercise price $15.57	Total $12.75
Options outstanding:
Number of options	1,537,329	522,750	427,090	440,653	643,998	766,085	5,695,570
Weighted average remaining contract life (years)	3.50	7.50	5.50	6.50	8.50	9.50	5.46
Options exercisable:
Number of options	1,079,159	163,646	226,292	178,091	126,374	76,640	3,016,367
Weighted average remaining term - vested (years)	3.50	7.50	5.50	6.50	8.50	9.50	4.04

(15)Disclosures About Fair Value of Financial Instruments

We are required to disclose fair value information about financial instruments whether or not recognized in the consolidated statement of financial condition. Fair value information of certain financial instruments and all nonfinancial instruments is not required to be disclosed. Accordingly, the aggregate fair value amounts presented do not represent the underlying value of the Company.

Financial assets and liabilities recognized or disclosed at fair value on a recurring basis and certain financial assets and liabilities on a non-recurring basis are accounted for using a three-level hierarchy of valuation techniques based on whether the inputs to those valuation techniques are observable or unobservable.  This hierarchy gives the highest priority to quoted prices with readily available independent data in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable market inputs (Level 3).  When various inputs for measurement fall within different levels of the fair value hierarchy, the lowest level input that has a significant impact on fair value measurement is used.

Financial assets and liabilities are categorized based upon the following characteristics or inputs to the valuation techniques:

• Level 1 - Financial assets and liabilities for which inputs are observable and are obtained from reliable quoted prices for identical assets or liabilities in actively traded markets.  This is the most reliable fair value measurement and includes, for example, active exchange-traded equity securities. 

• Level 2 - Financial assets and liabilities for which values are based on quoted prices in markets that are not active or for which values are based on similar assets or liabilities that are actively traded.  Level 2 also includes pricing models in which the inputs are corroborated by market data, for example, matrix pricing. 

• Level 3 - Financial assets and liabilities for which values are based on prices or valuation techniques that require inputs that are both unobservable and significant to the overall fair value measurement.  Level 3 inputs include the following: 

• Quotes from brokers or other external sources that are not considered binding;

• Quotes from brokers or other external sources where it cannot be determined that market participants would in fact transact for the asset or liability at the quoted price;

• Quotes and other information from brokers or other external sources where the inputs are not deemed observable. 

We are responsible for the valuation process and as part of this process may use data from outside sources in establishing fair value.  We perform due diligence to understand the inputs used or how the data was calculated or derived.  We also corroborate the reasonableness of external inputs in the valuation process.

The carrying amounts reported in the consolidated statement of financial condition approximate fair value for the following financial instruments: cash on hand, interest-earning deposits in other institutions, federal funds sold and other short-term investments, accrued interest receivable, accrued interest payable, and marketable securities available-for-sale.

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Notes to Consolidated Financial Statements 

December 31, 2017, 2016 and 2015

(All dollar amounts presented in tables are in thousands, except as indicated)

Marketable Securities

Where available, market values are based on quoted market prices, dealer quotes, and prices obtained from independent pricing services.

Debt securities — available-for-sale - Generally, debt securities are valued using pricing for similar securities, recently executed transactions and other pricing models utilizing observable inputs. The valuation for most debt securities is classified as Level 2. Securities within Level 2 include corporate bonds, municipal bonds, mortgage-backed securities and US government obligations. Certain debt securities which were AAA rated at purchase do not have an active market and as such we have used an alternative method to determine the fair value of these securities. The fair value has been determined using a discounted cash flow model using market assumptions, which generally include cash flow, collateral and other market assumptions. As such, securities which otherwise would have been classified as level 2 securities if an active market for those assets or similar assets existed are included herein as level 3 assets. Other debt securities, pooled trust preferred securities rated below AA at purchase, have a fair value based on a discounted cash flow model using similar assumptions to those noted above and accordingly are classified as level 3 assets.

Equity securities — available-for-sale - Level 1 securities include publicly traded securities valued using quoted market prices. We consider the financial condition of the issuer to determine if the securities have indicators of impairment.

Debt securities — held-to-maturity - The fair value of debt securities held to maturity is determined in the same manner as debt securities available for sale.

Loans Receivable

Loans with comparable characteristics including collateral and re-pricing structures are segregated for valuation purposes. Each loan pool is separately valued utilizing a discounted cash flow analysis. Projected monthly cash flows are discounted to present value using a market rate for comparable loans, which is not considered an exit price. Characteristics of comparable loans include remaining term, coupon interest, and estimated prepayment speeds. Delinquent loans are separately evaluated given the impact delinquency has on the projected future cash flow of the loan including the approximate discount or market rate, which is not considered an exit price.

FHLB Stock

Due to the restrictions placed on the transferability of FHLB stock it is not practical to determine the fair value.

Deposit Liabilities

The estimated fair value of deposits with no stated maturity, which includes demand deposits, money market, and other savings accounts, is the amount payable on demand. Although market premiums paid for depository institutions reflect an additional value for these low-cost deposits, adjusting fair value for any value expected to be derived from retaining those deposits for a future period of time or from the benefit that results from the ability to fund interest-earning assets with these deposit liabilities is prohibited. The fair value estimates of deposit liabilities do not include the benefit that results from the low-cost funding provided by these deposits compared to the cost of borrowing funds in the market. Fair values for time deposits are estimated using a discounted cash flow calculation that applies contractual cost currently being offered in the existing portfolio to current market rates being offered locally for deposits of similar remaining maturities. The valuation adjustment for the portfolio consists of the present value of the difference of these two cash flows, discounted at the assumed market rate of the corresponding maturity.

Borrowed Funds

Fixed rate advances are valued by comparing their contractual cost to the prevailing market cost.  The carrying amount of repurchase agreements approximates fair value.

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Notes to Consolidated Financial Statements 

December 31, 2017, 2016 and 2015

(All dollar amounts presented in tables are in thousands, except as indicated)

Junior Subordinated Debentures

The fair value of junior subordinated debentures is calculated using the discounted cash flows at the prevailing rate of interest.

Interest rate and foreign exchange swap agreements

The fair value of the interest rate swaps is based upon the present value of the expected future cash flows using the LIBOR swap curve, the basis for the underlying interest rate. To price interest rate swaps, cash flows are first projected for each payment date using the fixed rate for the fixed side of the swap and the forward rates for the floating side of the swap. These swap cash flows are then discounted to time zero using LIBOR zero-coupon interest rates. The sum of the present value of both legs is the fair market value of the interest rate swap. These valuations have been derived from our third party vendor’s proprietary models rather than actual market quotations. The proprietary models are based upon financial principles and assumptions that we believe to be reasonable. The fair value of the foreign exchange swap is derived from proprietary models rather than actual market quotations. The proprietary models are based upon financial principles and assumptions we believe to be reasonable. 

Off-Balance Sheet Financial Instruments

These financial instruments generally are not sold or traded, and estimated fair values are not readily available. However, the fair value of commitments to extend credit and standby letters of credit is estimated using the fees currently charged to enter into similar agreements. Commitments to extend credit are generally short-term in nature and, if drawn upon, are issued under current market terms. At December 31, 2017 and 2016, there was no significant unrealized appreciation or depreciation on these financial instruments.

The following table sets forth the carrying amount and estimated fair value of our financial instruments included in the consolidated statement of financial condition at December 31, 2017 and 2016: 

	December 31, 2017
	Carrying		Estimated
	amount		fair value	Level 1	Level 2	Level 3
Financial assets:
Cash and cash equivalents	$	77,710	77,710	77,710	—	—
Securities available-for-sale	792,535		792,535	574	791,961	—
Securities held-to-maturity	29,678		29,667	—	29,667	—
Loans receivable, net	7,736,614		7,762,562	3,128	—	7,759,434
Accrued interest receivable	23,352		23,352	23,352	—	—
Interest rate swaps	214		214	—	214	—
FHLB Stock	11,733		11,733	—	—	—
Total financial assets	$	8,671,836	8,697,773	104,764	821,842	7,759,434
Financial liabilities:
Savings and checking accounts	$	6,414,366	6,414,366	6,414,366	—	—
Time deposits	1,412,623		1,433,380	—	—	1,433,380
Borrowed funds	108,238		108,238	108,238	—	—
Junior subordinated debentures	111,213		110,954	—	—	110,954
Interest rate swaps	1,278		1,278	—	1,278	—
Foreign exchange swaps	61		61	—	61	—
Accrued interest payable	460		460	460	—	—
Total financial liabilities	$	8,048,239	8,068,737	6,523,064	1,339	1,544,334

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Notes to Consolidated Financial Statements 

December 31, 2017, 2016 and 2015

(All dollar amounts presented in tables are in thousands, except as indicated)

	December 31, 2016
	Carrying		Estimated
	amount		fair value	Level 1	Level 2	Level 3
Financial assets:
Cash and cash equivalents	$	389,867	389,867	389,867	—	—
Securities available-for-sale	826,200		826,200	4,440	812,394	9,366
Securities held-to-maturity	19,978		20,426	—	20,426	—
Loans receivable, net	7,496,408		7,878,815	9,625	—	7,869,190
Accrued interest receivable	21,699		21,699	21,699	—	—
Interest rate swaps	238		238	—	238	—
FHLB Stock	7,390		7,390	—	—	—
Total financial assets	$	8,761,780	9,144,635	425,631	833,058	7,878,556
Financial liabilities:
Savings and checking accounts	$	6,341,735	6,341,735	6,341,735	—	—
Time deposits	1,540,586		1,626,434	—	—	1,626,434
Borrowed funds	142,899		142,899	142,899	—	—
Junior subordinated debentures	111,213		113,313	—	—	113,313
Interest rate swaps	2,974		2,974	—	2,974	—
Accrued interest payable	643		643	643	—	—
Total financial liabilities	$	8,140,050	8,227,998	6,485,277	2,974	1,739,747

Fair value estimates are made at a point-in-time, based on relevant market data and information about the instrument. The preceding methods and assumptions were used in estimating the fair value of financial instruments at December 31, 2017 and 2016.  There were no transfers of financial instruments between Level 1 and Level 2 during the years ended December 31, 2017 and 2016.

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Notes to Consolidated Financial Statements 

December 31, 2017, 2016 and 2015

(All dollar amounts presented in tables are in thousands, except as indicated)

The following table represents assets and liabilities measured at fair value on a recurring basis as of December 31, 2017: 

	Level 1		Level 2	Level 3	Total at fair value
Assets
Equity securities	$	574	—	—	574
Debt securities:
U.S. government and agencies	—		1	—	1
Government sponsored enterprises	—		209,269	—	209,269
States and political subdivisions	—		51,056	—	51,056
Corporate	—		909	—	909
Total debt securities	—		261,235	—	261,235
Residential mortgage-backed securities:
GNMA	—		29,695	—	29,695
FNMA	—		82,969	—	82,969
FHLMC	—		64,021	—	64,021
Non-agency	—		555	—	555
Collateralized mortgage obligations:
GNMA	—		4,769	—	4,769
FNMA	—		191,512	—	191,512
FHLMC	—		157,190	—	157,190
Non-agency	—		15	—	15
Total mortgage-backed securities	—		530,726	—	530,726
Interest rate swaps	—		214	—	214
Total assets	$	574	792,175	—	792,749
Liabilities
Interest rate swaps	$	—	1,278	—	1,278
Foreign exchange swaps	—		61	—	61
Total liabilities	$	—	1,339	—	1,339

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Notes to Consolidated Financial Statements 

December 31, 2017, 2016 and 2015

(All dollar amounts presented in tables are in thousands, except as indicated)

The following table represents assets and liabilities measured at fair value on a recurring basis as of December 31, 2016: 

	Level 1		Level 2	Level 3	Total at fair value
Assets
Equity securities	$	4,440	—	—	4,440
Debt securities:
U.S. government and agencies	—		6	—	6
Government sponsored enterprises	—		294,170	—	294,170
States and political subdivisions	—		63,070	—	63,070
Corporate	—		7,614	9,366	16,980
Total debt securities	—		364,860	9,366	374,226
Residential mortgage-backed securities:
GNMA	—		30,883	—	30,883
FNMA	—		106,578	—	106,578
FHLMC	—		82,115	—	82,115
Non-agency	—		579	—	579
Collateralized mortgage obligations:
GNMA	—		6,287	—	6,287
FNMA	—		95,186	—	95,186
FHLMC	—		119,197	—	119,197
SBA	—		6,608	—	6,608
Non-agency	—		101	—	101
Total mortgage-backed securities	—		447,534	—	447,534
Interest rate swaps	—		238	—	238
Total assets	$	4,440	812,632	9,366	826,438
Liabilities
Interest rate swaps	$	—	2,974	—	2,974
Total liabilities	$	—	2,974	—	2,974

The table below presents a reconciliation of all assets and liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the year ended December 31, 2017 and 2016: 

	December 31,
	2017			2016
	Debt securities
Beginning balance January 1,	$	9,366		8,955
Total net realized investment gains/ (losses) and net change in unrealized appreciation/ (depreciation):
Included in net income as OTTI	—			—
Included in other comprehensive income	1,282			411
Purchases	—			—
Sales	(10,648		)	—
Transfers into Level 3	—			—
Transfers out of Level 3	—			—
Ending balance December 31,	$	—		9,366

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Notes to Consolidated Financial Statements 

December 31, 2017, 2016 and 2015

(All dollar amounts presented in tables are in thousands, except as indicated)

Certain assets and liabilities are measured at fair value on a nonrecurring basis after initial recognition such as loans held for sale, loans measured for impairment, real estate owned, and mortgage servicing rights.

The following table represents the fair market measurement for only those nonrecurring assets that had a fair market value below the carrying amount as of December 31, 2017:

	Level 1		Level 2	Level 3	Total assets at fair value
Loans evaluated for impairment	$	—	—	33,421	33,421
Real estate owned	—		—	5,666	5,666
Total assets	$	—	—	39,087	39,087

The following table represents the fair market measurement for only those nonrecurring assets that had a fair market value below the carrying amount as of December 31, 2016:

	Level 1		Level 2	Level 3	Total assets at fair value
Loans evaluated for impairment	$	—	—	41,933	41,933
Mortgage servicing rights	—		—	246	246
Real estate owned	—		—	4,889	4,889
Total assets	$	—	—	47,068	47,068

Loans measured for impairment - A loan is considered to be impaired as described in note 1(f). We classify impaired loans as nonrecurring Level 3.

Mortgage servicing rights - Mortgage servicing rights represent the value of servicing residential mortgage loans, when the mortgage loans have been sold into the secondary market and the associated servicing has been retained. The value is determined through a discounted cash flow analysis, which uses interest rates, prepayment speeds and delinquency rate assumptions as inputs. All of these assumptions require a significant degree of management judgment. Servicing rights and the related mortgage loans are segregated into categories or homogeneous pools based upon common characteristics. Adjustments are only made when the estimated discounted future cash flows are less than the carrying value, as determined by individual pool. As such, mortgage servicing rights are classified as nonrecurring Level 3.

Real estate owned - Real estate owned is comprised of property acquired through foreclosure or voluntarily conveyed by borrowers.  These assets are recorded on the date acquired at the lower of the related loan balance or fair value, less estimated disposition costs, with the fair value being determined by appraisal.  Subsequently, foreclosed assets are valued at the lower of the amount recorded at acquisition date or fair value, less estimated disposition costs.  We classify real estate owned as nonrecurring Level 3.

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Notes to Consolidated Financial Statements 

December 31, 2017, 2016 and 2015

(All dollar amounts presented in tables are in thousands, except as indicated)

The following table presents additional quantitative information about assets measured at fair value on a recurring and nonrecurring basis and for which we have utilized Level 3 inputs to determine fair value at December 31, 2017:

	Fair value		Valuation techniques	Significant  unobservable inputs	Range (weighted average)
Loans measured for impairment	$	33,421	Appraisal	Estimated costs to sell	10%
			value (1)
			Discounted cash	Discount rate	4.25% to 10.0% (7.50%)
			flow
Real estate owned	5,666		Appraisal	Estimated costs to sell	10%
			value (1)

(1)  Fair value is generally determined through independent appraisals of the underlying collateral, which may include Level 3 inputs that are not identifiable, or by using the discounted cash flow method if the loan is not collateral dependent.

(16)         Regulatory Capital Requirements

We and our banking subsidiary are subject to various regulatory capital requirements administered by the federal and state banking agencies. Failure to meet minimum capital requirements can initiate certain mandatory, and possibly additional discretionary actions by the regulators that, if undertaken, could have a direct material effect on our financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, specific capital guidelines that involve quantitative measures of assets, liabilities, and certain off-balance sheet items as calculated under regulatory accounting practices must be met. The capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weightings, and other factors.

In July 2013, the FDIC and the other federal regulatory agencies issued a final rule that revised their leverage and risk-based capital requirements and the method for calculating risk-weighted assets to make them consistent with agreements that were reached by the Basel Committee on Banking Supervision and certain provisions of the Dodd-Frank Act. The rule limits an organization’s capital distributions and certain discretionary bonus payments if the organization does not hold a “capital conservation buffer” consisting of 2.5% of Total, Tier 1 and Common Equity Tier 1 ("CET1") capital to risk-weighted assets in addition to the amount necessary to meet its minimum risk-based capital requirements.

Quantitative measures established by regulation to ensure capital adequacy require us and our banking subsidiary to maintain minimum amounts and ratios (set forth in the table below) of total, Tier 1, and CET1 capital (as defined in the regulations) to risk-weighted assets (as defined) and of Tier I capital to average assets (as defined). As of December 31, 2017 and 2016, we and our banking subsidiary exceeded all capital adequacy requirements to which we were subject.

As of December 15, 2017, the most recent notification from the FDIC categorized Northwest Bank as “well capitalized” under the regulatory framework for prompt corrective action. To be categorized as “well capitalized,” the bank must maintain total risk-based, Tier 1 risk-based, CET 1 risk-based, and Tier 1 leverage ratios as set forth in the table. There are no conditions or events since that notification that management believes have changed the bank’s categories. 

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NORTHWEST BANCSHARES, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements 

December 31, 2017, 2016 and 2015

(All dollar amounts presented in tables are in thousands, except as indicated)

The actual, required, and well capitalized levels as of December 31, 2017 and 2016 were as follows: 

	At December 31, 2017
					Minimum capital				Well capitalized
	Actual				requirements (1)				requirements
	Amount		Ratio		Amount		Ratio		Amount		Ratio
Total capital (to risk weighted assets)
Northwest Bancshares, Inc.	$	1,136,076	15.831	%	$	663,823	9.250	%	$	717,647	10.000	%
Northwest Bank	1,017,251		14.189	%	663,179		9.250	%	716,951		10.000	%
Tier 1 capital (to risk weighted assets)
Northwest Bancshares, Inc.	1,079,270		15.039	%	520,294		7.250	%	574,117		8.000	%
Northwest Bank	960,443		13.396	%	519,789		7.250	%	573,560		8.000	%
CET 1 capital (to risk weighted assets)
Northwest Bancshares, Inc.	971,395		13.536	%	412,647		5.750	%	466,470		6.500	%
Northwest Bank	960,443		13.396	%	412,247		5.750	%	430,170		6.000	%
Tier 1 capital (leverage) (to average assets)
Northwest Bancshares, Inc.	1,079,270		11.676	%	369,735		4.000	%	462,169		5.000	%
Northwest Bank	960,443		10.400	%	369,482		4.000	%	461,853		5.000	%

(1) Amounts and ratios include the 2017 capital conservation buffer of 1.250% with the exception of Tier 1 capital to average assets. For further information related to the capital conservation buffer, see Item 1. Business - "Supervision and Regulation".

	At December 31, 2016
					Minimum capital				Well capitalized
	Actual				requirements (1)				requirements
	Amount		Ratio		Amount		Ratio		Amount		Ratio
Total capital (to risk weighted assets)
Northwest Bancshares, Inc.	$	1,051,582	14.873	%	$	609,835	8.625	%	$	707,056	10.000	%
Northwest Bank	961,279		13.609	%	609,248		8.625	%	706,375		10.000	%
Tier 1 capital (to risk weighted assets)
Northwest Bancshares, Inc.	990,153		14.004	%	468,424		6.625	%	565,644		8.000	%
Northwest Bank	900,328		12.746	%	467,973		6.625	%	565,100		8.000	%
CET 1 capital (to risk weighted assets)
Northwest Bancshares, Inc.	882,278		12.478	%	362,366		5.125	%	459,586		6.500	%
Northwest Bank	900,328		12.746	%	362,017		5.125	%	459,144		6.500	%
Tier I capital (leverage) (to average assets)
Northwest Bancshares, Inc.	990,153		10.530	%	376,116		4.000	%	470,145		5.000	%
Northwest Bank	900,328		9.585	%	375,735		4.000	%	469,669		5.000	%

(1) Amounts and ratios include the 2016 capital conservation buffer of 0.625% with the exception of Tier 1 capital to average assets. For further information related to the capital conservation buffer, see Item 1. Business - "Supervision and Regulation".

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Notes to Consolidated Financial Statements 

December 31, 2017, 2016 and 2015

(All dollar amounts presented in tables are in thousands, except as indicated)

(17)         Contingent Liabilities

We and our subsidiaries are subject to a number of asserted and unasserted claims encountered in the normal course of business. Management believes that the aggregate liability, if any, that may result from such potential litigation will not have a material adverse effect on our financial statements. However, we cannot presently determine whether or not any claims against us will have a material adverse effect on our results of operations in any future reporting period.

(18)         Legal Proceedings

We establish accruals for legal proceedings when information related to the loss contingencies represented by those matters indicates both that a loss is probable and that the amount of loss can be reasonably estimated.  As of December 31, 2017 we have not accrued for legal proceedings based on our analysis of currently available information which is subject to significant judgment and a variety of assumptions and uncertainties. Any such accruals are adjusted thereafter as appropriate to reflect changes in circumstances. Due to the inherent subjectivity of assessments and unpredictability of outcomes of legal proceedings, any amounts accrued may not represent the ultimate loss to us from legal proceedings.

(19)       Components of Accumulated Other Comprehensive Income

The following table sets forth the components of accumulated other comprehensive income as of December 31, 2017 and 2016: 

	December 31,
	2017			2016
Unrealized gain on marketable securities available-for-sale	$	(4,409	)	395
Fair value of interest rate swaps	(691		)	(1,778	)
Defined benefit pension plans	(26,980		)	(26,608	)
Accumulated other comprehensive income	$	(32,080	)	(27,991	)

The following table shows the changes in accumulated other comprehensive income by component for the year ended December 31, 2017: 

	Unrealized gains and losses on securities available-for- sale			Change in fair value of interest rate swaps		Change in defined benefit pension plans		Total
Balance as of January 1,	$	395		(1,778	)	(26,608	)	(27,991	)
Other comprehensive income/ (loss) before reclassification adjustments	(2,478		)	1,087		(1,254	)	(2,645	)
Amounts reclassified from accumulated other comprehensive income (1), (2)	(2,326		)	—		882		(1,444	)
Net other comprehensive income/ (loss)	(4,804		)	1,087		(372	)	(4,089	)
Balance as of December 31,	$	(4,409	)	(691	)	(26,980	)	(32,080	)

(1) Consists of realized gains on securities (gain on sales of investments, net) of $3,814, net of tax (income tax expense) of $1,488.

(2) Consists of amortization of prior service cost (compensation and employee benefits) of $2,323 and amortization of net loss (compensation and employee benefits) of $(3,818), net of tax (income tax expense) of $613. 

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Notes to Consolidated Financial Statements 

December 31, 2017, 2016 and 2015

(All dollar amounts presented in tables are in thousands, except as indicated)

The following table shows the changes in accumulated other comprehensive income by component for the year ended December 31, 2016: 

	Unrealized gains and losses on securities available-for- sale			Change in fair value of interest rate swaps		Change in defined benefit pension plans		Total
Balance as of January 1,	$	3,325		(2,779	)	(25,081	)	(24,535	)
Other comprehensive income/ (loss) before reclassification adjustments	(2,728		)	1,001		(2,399	)	(4,126	)
Amounts reclassified from accumulated other comprehensive income (1), (2)	(202		)	—		872		670
Net other comprehensive income/ (loss)	(2,930		)	1,001		(1,527	)	(3,456	)
Balance as of December 31,	$	395		(1,778	)	(26,608	)	(27,991	)

(1) Consists of realized gains on securities (gain on sales of investments, net) of $331 net of tax (income tax expense) of $(129).

(2) Consists of amortization of prior service cost (compensation and employee benefits) of $2,323 and amortization of net loss (compensation and employee benefits) of $(3,801), net of tax (income tax expense) of $606. 

The following table shows the changes in accumulated other comprehensive income by component for the year ended December 31, 2015: 

	Unrealized gains and losses on securities available-for- sale			Change in fair value of interest rate swaps		Change in defined benefit pension plans		Total
Balance as of January 1,	$	3,461		(4,078	)	(23,753	)	(24,370	)
Other comprehensive income/ (loss) before reclassification adjustments	315			1,299		(2,203	)	(589	)
Amounts reclassified from accumulated other comprehensive income (1), (2)	(451		)	—		875		424
Net other comprehensive income/ (loss)	(136		)	1,299		(1,328	)	(165	)
Balance as of December 31,	$	3,325		(2,779	)	(25,081	)	(24,535	)

(1) Consists of realized losses on securities (gain on sales of investments, net) of $740 net of tax (income tax expense) of $(289).

(2) Consists of amortization of prior service cost (compensation and employee benefits) of $2,323 and amortization of net loss (compensation and employee benefits) of $(3,758), net of tax (income tax expense) of $560. 

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Notes to Consolidated Financial Statements 

December 31, 2017, 2016 and 2015

(All dollar amounts presented in tables are in thousands, except as indicated)

(20)Parent Company Only Financial Statements - Condensed

Statements of Financial Condition

	December 31,
	2017		2016
Assets
Cash and cash equivalents	$	26,088	34,521
Marketable securities available-for-sale	545		4,413
Investment in bank subsidiary	1,200,799		1,193,175
Other assets	92,712		52,645
Total assets	$	1,320,144	1,284,754
Liabilities and Shareholders’ Equity
Liabilities:
Debentures payable	$	111,213	111,213
Other liabilities	1,207		2,878
Total liabilities	112,420		114,091
Shareholders’ equity	1,207,724		1,170,663
Total liabilities and shareholders’ equity	$	1,320,144	1,284,754

Statements of Income

	Years ended December 31,
	2017			2016		2015
Income:
Interest income	$	137		737		1,258
Other income	2,297			709		659
Dividends from bank subsidiary	90,000			50,000		135,000
Undistributed earnings from equity investment in bank subsidiary	7,255			2,760		(70,854	)
Total income	99,689			54,206		66,063
Expense:
Compensation and benefits	1,282			1,129		1,061
Other expense	553			561		1,356
Interest expense	4,666			4,560		4,926
Total expense	6,501			6,250		7,343
Income before income taxes	93,188			47,956		58,720
Federal and state income taxes	(1,279		)	(1,711	)	(1,820	)
Net income	$	94,467		49,667		60,540

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Notes to Consolidated Financial Statements 

December 31, 2017, 2016 and 2015

(All dollar amounts presented in tables are in thousands, except as indicated)

Statements of Cash Flows

	Years ended December 31,
	2017			2016		2015
Operating activities:
Net income	$	94,467		49,667		60,540
Adjustments to reconcile net income to net cash provided by operating activities:
Undistributed earnings of subsidiary	(7,255		)	(2,760	)	70,854
Noncash stock benefit plan compensation expense	4,894			10,916		5,654
Gain on sale of marketable securities	(1,615		)	(43	)	(54	)
Net change in other assets and liabilities	(43,513		)	(63,533	)	(5,824	)
Net cash provided by/ (used in) operating activities	46,978			(5,753	)	131,170
Investing activities:
Net sale of marketable securities	2,800			(1,952	)	1,192
Acquisition, net of cash received	—			—		(89,398	)
Net cash provided by/ (used in) investing activities	2,800			(1,952	)	(88,206	)
Financing activities:
Cash dividends paid	(65,212		)	(60,156	)	(52,825	)
Share repurchases	—			(1,752	)	(7,847	)
Repayment of loan to ESOP	—			797		1,549
Redemption of junior subordinated debt	—			—		(8,119	)
Excess tax benefit from stock-based compensation	—			1,425		332
Proceeds from options exercised	7,001			10,856		4,303
Net cash used in financing activities	(58,211		)	(48,830	)	(62,607	)
Net decrease in cash and cash equivalents	$	(8,433	)	(56,535	)	(19,643	)
Cash and cash equivalents at beginning of year	$	34,521		91,056		110,699
Net decrease in cash and cash equivalents	(8,433		)	(56,535	)	(19,643	)
Cash and cash equivalents at end of year	$	26,088		34,521		91,056

(21)    Derivative Financial Instruments

We are a party to derivative financial instruments in the normal course of business to manage our own exposure to fluctuations in interest rates and to meet the needs of our customers. The primary derivatives that we use are interest rate swaps and caps and foreign exchange contracts, which are entered into with counterparties that meet established credit standards. We believe that the credit risk inherent in all of our derivative contracts is minimal based on our credit standards and the netting and collateral provisions of the interest rate swap agreements

(a)     Derivatives Designated in Hedging Relationships

We are currently a counterparty to two interest rate swap agreements (swaps), designating the swaps as cash flow hedges.  The swaps are intended to protect against the variability of cash flows associated with Northwest Bancorp Capital Trust III and Northwest Bancorp Capital Trust IV.  The first swap modifies the re-pricing characteristics of Northwest Bancorp Capital Trust III, wherein for a 10 years period expiring in September 2018, the Company receives interest of three-month LIBOR from a counterparty and pays a fixed rate of 4.61% to the same counterparty calculated on a notional amount of $25.0 million.  The second swap modifies the re-pricing characteristics of Northwest Bancorp Capital Trust IV, wherein for a ten years period expiring in December 2018, the Company receives interest of three-month LIBOR from a counterparty and pays a fixed rate of 4.09% to the same counterparty calculated on a notional amount of $25.0 million.  The swap agreements were entered into with a counterparty that met our credit standards and the agreements contain collateral provisions protecting the at-risk party.  We believe that the credit risk inherent in the contracts is not significant.  At December 31, 2017, $1.6 million of cash was pledged as collateral to the counterparty.

125

NORTHWEST BANCSHARES, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements 

December 31, 2017, 2016 and 2015

(All dollar amounts presented in tables are in thousands, except as indicated)

These cash flow hedges are recorded within other liabilities on the consolidated statement of financial condition at their estimated fair value. At December 31, 2017, the fair value of the swap agreements was $(1.1) million, and there was no hedge ineffectiveness for any of the swaps discussed above. During the next twelve months, as the swaps expire, we estimate that $700,000 will be reclassified from accumulated other comprehensive income into interest expense.  

(b)     Derivatives Not Designated in Hedge Relationships

In addition to our derivatives designated in hedge relationships, we act as an interest rate or foreign exchange swap counterparty for certain commercial borrowers in the normal course of servicing our customers, which are accounted for at fair value. We manage our exposure to such interest rate or foreign exchange swaps by entering into corresponding and offsetting interest rate swaps with third parties that mirror the terms of the swaps we have with the commercial borrowers. These positions (referred to as “customer swaps”) directly offset each other and our exposure is fair value of the derivatives due to changes in credit risk of our commercial borrowers and third parties. Customer swaps are recorded within other assets or other liabilities on the consolidated statement of financial condition at their estimated fair value. Changes to the fair value of assets and liabilities arising from these derivatives are included, net, in other operating income in the consolidated statement of income.

The following table presents information regarding our derivative financial instruments, at December 31,:

	Asset derivatives			Liability derivatives
	Notional amount		Fair value	Notional amount	Fair value
2017:
Derivatives designated as hedging instruments:
Interest rate swap agreements	$	—	—	50,000	1,064
Derivatives not designated as hedging instruments:
Interest rate swap agreements	92,631		214	92,631	214
Foreign exchange swap agreements	—		—	12,344	61
Total derivatives	$	92,631	214	154,975	1,339
2016:
Derivatives designated as hedging instruments:
Interest rate swap agreements	$	—	—	50,000	2,736
Derivatives not designated as hedging instruments:
Interest rate swap agreements	10,559		238	10,559	238
Foreign exchange swap agreements	—		—	—	—
Total derivatives	$	10,559	238	60,559	2,974

The following table indicates the gain or loss recognized in income on derivatives for the periods indicated:

	For the years ended December 31,
	2017			2016	2015
Non-hedging swap derivatives:
Increase/ (decrease) in other income	$	(373	)	—	—
Hedging interest rate derivatives:
Increase in interest expense	1,599			1,866	2,922

126

NORTHWEST BANCSHARES, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements 

December 31, 2017, 2016 and 2015

(All dollar amounts presented in tables are in thousands, except as indicated)

(22)Selected Quarterly Financial Data - Unaudited

	Quarters ended
	March 31,		June 30,	September 30,	December 31,
	(In thousands, except per share data)
2017:
Interest income	$	87,267	89,797	90,231	91,561
Interest expense	6,690		7,066	6,994	7,321
Net interest income	80,577		82,731	83,237	84,240
Provision for loan losses	4,637		5,562	3,027	6,525
Noninterest income	21,504		41,477	24,594	22,905
Noninterest expenses	71,646		73,262	68,799	71,896
Income before income taxes	25,798		45,384	36,005	28,724
Income tax expense	8,052		14,402	12,414	6,576
Net income	$	17,746	30,982	23,591	22,148
Basic earnings per share	$	0.18	0.31	0.23	0.22
Diluted earnings per share	$	0.17	0.30	0.23	0.22

	Quarters ended
	March 31,		June 30,		September 30,	December 31,
	(In thousands, except per share data)
2016:
Interest income	$	85,298	85,555		84,748	90,033
Interest expense	13,746		10,008		7,454	7,091
Net interest income	71,552		75,547		77,294	82,942
Provision for loan losses	1,660		4,199		5,538	2,145
Noninterest income	19,448		20,275		20,818	24,819
Noninterest expenses	63,275		102,122		73,680	68,761
Income before income taxes	26,065		(10,499	)	18,894	36,855
Income tax expense	8,081		(3,491	)	4,697	12,361
Net income	$	17,984	(7,008	)	14,197	24,494
Basic earnings per share	$	0.18	(0.07	)	0.14	0.24
Diluted earnings per share	$	0.18	(0.07	)	0.14	0.24

127

NORTHWEST BANCSHARES, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements 

December 31, 2017, 2016 and 2015

(All dollar amounts presented in tables are in thousands, except as indicated)

	Quarters ended
	March 31,		June 30,	September 30,	December 31,
	(In thousands, except per share data)
2015:
Interest income	$	76,880	75,970	81,091	85,639
Interest expense	13,899		13,792	14,150	14,486
Net interest income	62,981		62,178	66,941	71,153
Provision for loan losses	900		1,050	3,167	4,595
Noninterest income	14,625		16,525	18,140	19,546
Noninterest expenses	53,711		55,135	63,804	61,227
Income before income taxes	22,995		22,518	18,110	24,877
Income tax expense	6,825		7,213	5,238	8,684
Net income	$	16,170	15,305	12,872	16,193
Basic earnings per share	$	0.18	0.17	0.14	0.16
Diluted earnings per share	$	0.18	0.17	0.13	0.16

128

ITEM 9.CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

Not Applicable

ITEM 9A.CONTROLS AND PROCEDURES

Under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, we evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) under the Exchange Act) as of the end of the period covered by this report. Based upon that evaluation, the principal executive officer and principal financial officer concluded that, as of the end of the period covered by this report, our disclosure controls and procedures were effective.

There were no changes made in our internal controls during the quarter ended December 31, 2017 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

See Management’s Report On Internal Control Over Financial Reporting - filed herewith under Part II, Item 8, “Financial Statements and Supplementary Data.”

ITEM 9B.OTHER INFORMATION

Not Applicable.

PART III

ITEM 10.DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

Directors

The “Proposal I—Election of Directors” section of the Company’s definitive proxy statement for the Company’s 2018 Annual Meeting of Stockholders (the “2018 Proxy Statement”) is incorporated herein by reference.

Executive Officers

The “Proposal I-Election of Directors-Executive Officers who are not Directors” section of the 2018 Proxy Statement is incorporated herein by reference.

Compliance with Section 16(a) of the Exchange Act

The cover page and the “Proposal I-Election of Directors-Section 16(a) Beneficial Ownership Reporting Compliance” section of the 2018 Proxy Statement is incorporated herein by reference.

Code of Ethics

The “Proposal I-Election of Directors-Codes of Ethics” section of the 2018 Proxy Statement is incorporated herein by reference. A copy of the Code of Ethics is available to shareholders on the “Governance Documents” portion of the Investor Relations’ section on the Company’s website at www.northwest.com.

Corporate Governance

Information regarding the audit committee and its composition and the audit committee’s financial expert required by this item is incorporated herein by reference to the section captioned “Proposal I-Election of Directors-Meetings and Committees of the Board of Directors-Audit Committee” section of the 2018 Proxy Statement.

129

ITEM 11.EXECUTIVE COMPENSATION

The “Proposal I—Election of Directors-Meetings and Committees of the Board of Directors-Compensation Committee,” “-Compensation Committee Interlocks and Insider Participation,” “-Compensation Committee Report,” “-Compensation Discussion and Analysis,” “-Executive Compensation,” “-Employment Agreements/Change in Control Agreements,” “-Potential Payments to Named Executive Officers,” “-Defined Benefit Plans,” “-Supplemental Executive Retirement Plan,” “-Life Insurance Coverage” and “-Directors’ Compensation” sections of the Company’s 2018 Proxy Statement are incorporated herein by reference.

ITEM 12.SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

The “Proposal I—Election of Directors” section of the Company’s 2018 Proxy Statement is incorporated herein by reference.

The Company does not have any equity compensation program that was not approved by stockholders.

Set forth below is certain information as of December 31, 2017 regarding equity compensation plans that have been approved by stockholders.

Equity compensation plans approved by stockholders	Number of securities to be issued upon exercise of outstanding options and rights	Weighted average exercise price (1)		Number of securities remaining available for issuance under plan
Northwest Bancorp, Inc. 2004 Stock Option Plan	48,027	$	11.12	—
Northwest Bancorp, Inc. 2008 Stock Option Plan	1,806,736	11.52		670,821
Northwest Bancshares, Inc. 2011 Equity Incentive Plan	3,840,807	13.35		2,820,677
Total	5,695,570	12.75		3,491,498

(1) Reflects exercise price of options only.

130

ITEM 13.CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

The “Proposal I-Election of Directors-Board Independence” and “Proposal I-Election of Directors- Transactions with Certain Related Persons” sections of the Company’s 2018 Proxy Statement are incorporated  herein by reference.

ITEM 14.PRINCIPAL ACCOUNTANT FEES AND SERVICES

The “Proposal II — Ratification of Appointment of Independent Registered Public Accounting Firm” section of the Company’s 2018 Proxy Statement is incorporated herein by reference.

PART IV

ITEM 15.EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

(a)(1) Financial Statements

The following documents are filed as part of this Form 10-K.

(A) Management’s Report on Internal Control Over Financial Reporting

(B) Report of Independent Registered Public Accounting Firm on Internal Control Over Financial Reporting

(C) Report of Independent Registered Public Accounting Firm

(D) Consolidated Statements of Financial Condition - At December 31, 2017 and 2016

(E) Consolidated Statements of Income — Years ended December 31, 2017, 2016 and 2015

(F) Consolidated Statements of Comprehensive Income — Years ended December 31, 2017, 2016 and 2015

(G) Consolidated Statements of Changes in Shareholders’ Equity — Years ended December 31, 2017, 2016 and 2015

(H) Consolidated Statements of Cash Flows — Years ended December 31, 2017, 2016 and 2015

(I) Notes to the Consolidated Financial Statements.

(a)(2) Financial Statement Schedules

None.

(a)(3) Exhibits

131

Regulation S-K Exhibit  Number	Document	Reference to Prior Filing or Exhibit Number Attached Hereto
2	Plan of acquisition, reorganization, arrangement, liquidation or succession	None
3.1	Articles of Incorporation	(2)
3.2	Bylaws	(2)
4	Form of Common Stock Certificate	(2)
9	Voting trust agreement	None
10.1	Amendment and Restatement of Deferred Compensation Plan for Outside Directors Of Northwest Savings Bank and Eligible Affiliates	(3)
10.2	Retirement Plan for Outside Directors of Northwest Savings Bank and Eligible Affiliates	(3)
10.3	Amended and Restated Northwest Savings Bank Nonqualified Supplemental Retirement Plan	(3)
10.4	Employee Stock Ownership Plan	(1)- intentionally omitted
10.5	Northwest Bancorp, Inc. 2004 Stock Option Plan	(4)
10.6	Northwest Bancorp, Inc. 2004 Recognition and Retention Plan	(4)
10.7	Management Bonus Plan	(8)
10.8	Northwest Bancorp, Inc. 2008 Stock Option Plan	(5)
10.9	Amended and Restated Northwest Savings Bank and Affiliates Upper Managers Bonus Deferred Compensation Plan	(3)
10.10	Employment Agreement for William J. Wagner	(6)
10.11	Employment Agreement for William W. Harvey, Jr.	(6)
10.12	Employment Agreement for Steven G. Fisher	(6)
10.13	Change in Control Agreement for Michael G. Smelko	(6)
10.14	Change in Control Agreement for Michael W. Bickerton	(9)
10.15	Employment Agreement for Ronald J. Seiffert	(10)

132

10.16	Northwest Bancshares, Inc. 2011 Equity Incentive Plan	(7)
10.17	Acknowledgment and Waiver William J. Wagner	Filed herewith as Exhibit 10.17
10.18	Acknowledgment and Waiver William W. Harvey, Jr.	Filed herewith as Exhibit 10.18
10.19	Acknowledgment and Waiver Steven G. Fisher	Filed herewith as Exhibit 10.19
11	Statement re: computation of per share earnings	None
12	Statement re: computation of ratios	Not required
16	Letter re: change in certifying accountant	None
18	Letter re: change in accounting principles	None
21	Subsidiaries of Registrant	(3)
22	Published report regarding matters submitted to vote of security holders	None
23	Consent of experts and counsel	Filed herewith as Exhibit 23
24	Power of Attorney	Not Required
28	Information from reports furnished to State insurance regulatory authorities	None
31.1	Certification pursuant to Rule 13a-14 of the Securities Exchange Act of 1934, as Amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002	Filed herewith as Exhibit 31.1
31.2	Certification pursuant to Rule 13a-14 of the Securities Exchange Act of 1934, as Amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002	Filed herewith as Exhibit 31.2
32	Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002	Filed herewith as Exhibit 32
101	Interactive Data File (XBRL)	Filed herewith as Exhibit 101

133

(1)	Incorporated by reference to the Company’s Registration Statement on Form S-4 (File No. 333-31687), originally filed with the SEC on July 21, 1997, as amended on October 9, 1997 and November 4, 1997.
(2)	Incorporated by reference to the Company’s Registration Statement on Form S-1 (File No. 333-161805), filed with the SEC on September 9, 2009.
(3)	Incorporated by reference to the Company’s annual Report on Form 10-K (File No. 000-23817), file with the SEC on March 4, 2009.
(4)	Incorporated by reference to the Definitive Proxy Statement for the 2004 Annual Meeting of Shareholders (File No. 000-23817), filed with the SEC on October 6, 2004.
(5)	Incorporated by reference to the Definitive Proxy Statement for the 2008 Annual Meeting of Shareholders (File No. 000-23817), filed with the SEC on April 11, 2008.
(6)	Incorporated by reference to the Periodic Report on Form 8-K (File No. 001-34582), filed with the SEC on March 9, 2015.
(7)	Incorporated by reference to the Company’s Annual Report on Form 10-K (File No. 001-34582), filed with the SEC on March 1, 2011.
(8)	Incorporated by reference to the Company’s Annual Report on Form 10-K (File No. 001-34582), filed with the SEC on February 29, 2012.
(9)	Incorporated by reference to the Company’s Annual Report on Form 10-K (File No. 001-34582), filed with the SEC on March 1, 2017.
(10)	Incorporated by reference to the Current Report on Form 8-K (File No. 001-34582), filed with the SEC on November 2, 2017.

ITEM 16.FORM 10K SUMMARY

Not applicable.

134

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) 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.

NORTHWEST BANCSHARES, INC.

Date: March 1, 2018	By:	/s/ William J. Wagner
		William J. Wagner, Chairman and Chief Executive Officer
		(Principal Executive Officer)

Pursuant to the requirements of the Securities Exchange of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.

Date: March 1, 2018	By:	/s/ William J. Wagner
		William J. Wagner, Chairman and Chief Executive Officer
		(Principal Executive Officer)
Date: March 1, 2018	By:	/s/ William W. Harvey, Jr.,
		William W. Harvey, Jr., Senior Executive Vice President, Finance,
		and Chief Financial Officer (Principal Financial Officer)
Date: March 1, 2018	By:	/s/ Gerald J. Ritzert
		Gerald J. Ritzert, Executive Vice President, and
		Controller (Principal Accounting Officer)
Date: March 1, 2018	By:	/s/ Robert M. Campana
		Robert M. Campana
Date: March 1, 2018	By:	/s/ Deborah J. Chadsey
		Deborah J. Chadsey, Director
Date: March 1, 2018	By:	/s/ Timothy B. Fannin
		Timothy B. Fannin, Director
Date: March 1, 2018	By:	/s/ Timothy M. Hunter
		Timothy M. Hunter
Date: March 1, 2018	By:	/s/ John P. Meegan
		John P. Meegan, Director
Date: March 1, 2018	By:	/s/ William F. McKnight
		William F. McKnight, Director
Date: March 1, 2018	By:	/s/ Mark A. Paup
		Mark A. Paup, Director
Date: March 1, 2018	By:	/s/ Sonia M. Probst
		Sonia M. Probst, Director
Date: March 1, 2018	By:	/s/ Philip M. Tredway
		Philip M. Tredway, Director

135

EX-10.17

Exhibit 10.17

ACKNOWLEDGEMENT AND WAIVER

WILLIAM J. WAGNER

This Acknowledgment and Waiver, dated as of December 21, 2017, relates to the Employment Agreement by and between Northwest Bank (“Bank”) and Northwest Bancshares, Inc., (“Company”) and William J. Wagner (“Executive”) dated March 4, 2015 (“Agreement”).

WHEREAS, Section 4(a)(ii)(B) of the Agreement provides that Executive is entitled to terminate his employment for “Good Reason” as a result of a change in Executive’s function, duties, or responsibilities, which change would cause the Executive’s position to become one of lesser responsibility, importance, or scope from the position described in Section 1 of the Agreement; and

WHEREAS, terms and conditions of the Agreement may be waived by the written agreement of the parties pursuant to Section 13 of the Agreement; and

WHEREAS,the Company and the Bank have established a new executive position of President and Chief Operating Officer and have hired Ronald J. Seiffert as their new President and Chief Operating Officer; and

WHEREAS,as the result of the establishment of a new President and Chief Operating Officer position and the hiring of Mr. Seiffert to fill that position, it is expected that Mr. Seiffert will be assigned some of duties currently exercised by Executive; and

WHEREAS, the Company, the Bank and Executive have discussed the establishment of the new position of President and Chief Operating Officer of the Company and the Bank and the proposed assignment of duties to such newly established position, and wish to memorialize their agreement and understanding that establishment of such position and the assignment of duties to Mr. Seiffert as the President and Chief Operating Officer (or to any other person succeeding to such position) does not cause Executive’s position to become one of lesser responsibility, importance, or scope from Executive’s position as described in Section 1 of the Agreement, and therefore Executive is not entitled to terminate his employment for Good Reason under Section 4(a)(ii)(B) of the Agreement; and

WHEREAS, in the alternative, if the duties assigned to the office of President and Chief Operating Officer could be construed as causing Executive’s position to become one of lesser responsibility, importance, or scope from Executive’s position as described in Section 1 of the Agreement, Executive hereby waives any right to terminate the Agreement pursuant to Section 4(a)(ii)(B) of the Agreement as the result of the establishment of the position of President and Chief Operating Officer and the assignment of duties attendant to such position.

NOW THEREFORE, each of the Company, the Bank and Executive hereby agree that the establishment of the new position of President and Chief Operating Officer of the Company and the Bank and the proposed assignment of duties to such newly established position does not cause Executive’s position to become one of lesser responsibility, importance, or scope from Executive’s position as described in Section 1 of the Agreement.

FURTHER, if the duties assigned to the office of President and Chief Operating Officer could be construed as causing Executive’s position to become one of lesser responsibility, importance, or scope from Executive’s position as described in Section 1 of the Agreement, Executive hereby waives any right to terminate the Agreement pursuant to Section 4(a)(ii)(B) of the Agreement as the result of the establishment of the position of President and Chief Operating Officer and the assignment of duties attendant to such position, with this Acknowledgment and Waiver constituting a continuing waiver as to the executive position of President and Chief Operating Officer.

IN WITNESS WHEREOF, the Bank, the Company and the Executive have signed this Acknowledgment and Waiver as of the date first written above

		NORTHWEST BANK
Date: December 21, 2017	By:	/s/ Julia W. McTavish
		Julia W. McTavish, Chief Human Resources Officer
		NORTHWEST BANCSHARES, INC.
Date: December 21, 2017	By:	/s/ Julia W. McTavish
		Julia W. McTavish, Chief Human Resources Officer
		EXECUTIVE
Date: December 21, 2017	By:	/s/ William J. Wagner
		William J. Wagner

EX-10.18

Exhibit 10.18

ACKNOWLEDGEMENT AND WAIVER

WILLIAM W. HARVEY, JR.

This Acknowledgment and Waiver, dated as of December 21, 2017, relates to the Employment Agreement by and between Northwest Bank (“Bank”) and Northwest Bancshares, Inc., (“Company”) and William J. Harvey, Jr. (“Executive”) dated March 4, 2015 (“Agreement”).

WHEREAS, Section 4(a)(ii)(B) of the Agreement provides that Executive is entitled to terminate his employment for “Good Reason” as a result of a change in Executive’s function, duties, or responsibilities, which change would cause the Executive’s position to become one of lesser responsibility, importance, or scope from the position described in Section 1 of the Agreement; and

WHEREAS, terms and conditions of the Agreement may be waived by the written agreement of the parties pursuant to Section 13 of the Agreement; and

WHEREAS,the Company and the Bank have established a new executive position of President and Chief Operating Officer and have hired Ronald J. Seiffert as their new President and Chief Operating Officer; and

WHEREAS,as the result of the establishment of a new President and Chief Operating Officer position and the hiring of Mr. Seiffert to fill that position, it is expected that Mr. Seiffert will be assigned some of duties currently exercised by Executive; and

WHEREAS, the Company, the Bank and Executive have discussed the establishment of the new position of President and Chief Operating Officer of the Company and the Bank and the proposed assignment of duties to such newly established position, and wish to memorialize their agreement and understanding that establishment of such position and the assignment of duties to Mr. Seiffert as the President and Chief Operating Officer (or to any other person succeeding to such position) does not cause Executive’s position to become one of lesser responsibility, importance, or scope from Executive’s position as described in Section 1 of the Agreement, and therefore Executive is not entitled to terminate his employment for Good Reason under Section 4(a)(ii)(B) of the Agreement; and

WHEREAS, in the alternative, if the duties assigned to the office of President and Chief Operating Officer could be construed as causing Executive’s position to become one of lesser responsibility, importance, or scope from Executive’s position as described in Section 1 of the Agreement, Executive hereby waives any right to terminate the Agreement pursuant to Section 4(a)(ii)(B) of the Agreement as the result of the establishment of the position of President and Chief Operating Officer and the assignment of duties attendant to such position.

NOW THEREFORE, each of the Company, the Bank and Executive hereby agree that the establishment of the new position of President and Chief Operating Officer of the Company and the Bank and the proposed assignment of duties to such newly established position does not cause Executive’s position to become one of lesser responsibility, importance, or scope from Executive’s position as described in Section 1 of the Agreement.

FURTHER, if the duties assigned to the office of President and Chief Operating Officer could be construed as causing Executive’s position to become one of lesser responsibility, importance, or scope from Executive’s position as described in Section 1 of the Agreement, Executive hereby waives any right to terminate the Agreement pursuant to Section 4(a)(ii)(B) of the Agreement as the result of the establishment of the position of President and Chief Operating Officer and the assignment of duties attendant to such position, with this Acknowledgment and Waiver constituting a continuing waiver as to the executive position of President and Chief Operating Officer (it being understood that such waiver does not apply to the assignment of any duties customarily related to the position of chief financial officer in an organization that maintains a chief financial officer and a chief operating officer).

IN WITNESS WHEREOF, the Bank, the Company and the Executive have signed this Acknowledgment and Waiver as of the date first written above.

		NORTHWEST BANK
Date: December 21, 2017	By:	/s/ William J. Wagner
		William J. Wagner, Chief Executive Officer
		NORTHWEST BANCSHARES, INC.
Date: December 21, 2017	By:	/s/ William J. Wagner
		William J. Wagner, Chief Executive Officer
		EXECUTIVE
Date: December 21, 2017	By:	/s/ William W. Harvey, Jr.
		William W. Harvey, Jr.

EX-10.19

Exhibit 10.19

ACKNOWLEDGEMENT AND WAIVER

STEVEN G. FISHER

This Acknowledgment and Waiver, dated as of December 21, 2017, relates to the Employment Agreement by and between Northwest Bank (“Bank”) and Northwest Bancshares, Inc., (“Company”) and Steven G. Fisher (“Executive”) dated March 4, 2015 (“Agreement”).

WHEREAS, Section 4(a)(ii)(B) of the Agreement provides that Executive is entitled to terminate his employment for “Good Reason” as a result of a change in Executive’s function, duties, or responsibilities, which change would cause the Executive’s position to become one of lesser responsibility, importance, or scope from the position described in Section 1 of the Agreement; and

WHEREAS, terms and conditions of the Agreement may be waived by the written agreement of the parties pursuant to Section 13 of the Agreement; and

WHEREAS,the Company and the Bank have established a new executive position of President and Chief Operating Officer and have hired Ronald J. Seiffert as their new President and Chief Operating Officer; and

WHEREAS,as the result of the establishment of a new President and Chief Operating Officer position and the hiring of Mr. Seiffert to fill that position, it is expected that Mr. Seiffert will be assigned some of duties currently exercised by Executive; and

WHEREAS, the Company, the Bank and Executive have discussed the establishment of the new position of President and Chief Operating Officer of the Company and the Bank and the proposed assignment of duties to such newly established position, and wish to memorialize their agreement and understanding that establishment of such position and the assignment of duties to Mr. Seiffert as the President and Chief Operating Officer (or to any other person succeeding to such position) does not cause Executive’s position to become one of lesser responsibility, importance, or scope from Executive’s position as described in Section 1 of the Agreement, and therefore Executive is not entitled to terminate his employment for Good Reason under Section 4(a)(ii)(B) of the Agreement; and

WHEREAS, in the alternative, if the duties assigned to the office of President and Chief Operating Officer could be construed as causing Executive’s position to become one of lesser responsibility, importance, or scope from Executive’s position as described in Section 1 of the Agreement, Executive hereby waives any right to terminate the Agreement pursuant to Section 4(a)(ii)(B) of the Agreement as the result of the establishment of the position of President and Chief Operating Officer and the assignment of duties attendant to such position.

NOW THEREFORE, each of the Company, the Bank and Executive hereby agree that the establishment of the new position of President and Chief Operating Officer of the Company and the Bank and the proposed assignment of duties to such newly established position does not cause Executive’s position to become one of lesser responsibility, importance, or scope from Executive’s position as described in Section 1 of the Agreement.

FURTHER, if the duties assigned to the office of President and Chief Operating Officer could be construed as causing Executive’s position to become one of lesser responsibility, importance, or scope from Executive’s position as described in Section 1 of the Agreement, Executive hereby waives any right to terminate the Agreement pursuant to Section 4(a)(ii)(B) of the Agreement as the result of the establishment of the position of President and Chief Operating Officer and the assignment of duties attendant to such position, with this Acknowledgment and Waiver constituting a continuing waiver as to the executive position of President and Chief Operating Officer.

IN WITNESS WHEREOF, the Bank, the Company and the Executive have signed this Acknowledgment and Waiver as of the date first written above.

		NORTHWEST BANK
Date: December 21, 2017	By:	/s/ William J. Wagner
		William J. Wagner, Chief Executive Officer
		NORTHWEST BANCSHARES, INC.
Date: December 21, 2017	By:	/s/ William J. Wagner
		William J. Wagner, Chief Executive Officer
		EXECUTIVE
Date: December 21, 2017	By:	/s/ Steven G. Fisher
		Steven G. Fisher

EX-23

Exhibit 23

Consent of Independent Registered Public Accounting Firm

The Board of Directors

Northwest Bancshares, Inc.:

We consent to the incorporation by reference in the registration statements (333-178077, 333-170624, and 333-169740) on Form S-8 and the registration statement (333-221674) on Form S-3 of Northwest Bancshares, Inc. of our reports dated March 1, 2018, with respect to the consolidated statements of financial condition of Northwest Bancshares, Inc. and subsidiaries as of December 31, 2017 and 2016, and the related statements of income, comprehensive income, changes in shareholders’ equity, and cash flows for each of the years in the three-year period ended December 31, 2017, and the effectiveness of internal control over financial reporting as of December 31, 2017, which reports appear in the December 31, 2017 annual report on Form 10-K of Northwest Bancshares, Inc.

/s/ KPMG LLP

Pittsburgh, Pennsylvania

March 1, 2018

EX-31.1

EXHIBIT 31.1

Certification pursuant to Rule 13a-14

Of the Securities Exchange Act of 1934, as Amended,

As adopted pursuant to

Section 302 of the Sarbanes-Oxley Act of 2002

I, William J. Wagner, certify that:

1. I have reviewed this Annual Report on Form 10-K of Northwest Bancshares, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

March 1, 2018	/s/ William J. Wagner
Date	William J. Wagner
	President and Chief Executive Officer

EX-31.2

EXHIBIT 31.2

Certification pursuant to Rule 13a-14

Of the Securities Exchange Act of 1934, as amended,

As adopted pursuant to

Section 302 of the Sarbanes-Oxley Act of 2002

I, William W. Harvey, Jr., certify that:

1. I have reviewed this Annual Report on Form 10-K of Northwest Bancshares, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

March 1, 2018	/s/ William W. Harvey, Jr.
Date	William W. Harvey, Jr.
	Senior Executive Vice President, Finance and
	Chief Financial Officer

EX-32

EXHIBIT 32

Certification pursuant to

18 U.S.C. Section 1350,

as adopted pursuant to

Section 906 of the Sarbanes-Oxley Act of 2002

The undersigned officers of Northwest Bancshares, Inc. (the “Company”) hereby certify that, to the best of their knowledge:

1. the Company’s Annual Report on Form 10-K for the Year Ended December 31, 2017 (the “Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, and

2. that as of the date of this Certification, the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

March 1, 2018	/s/ William J. Wagner
Date	William J. Wagner
	President and Chief Executive Officer
March 1, 2018	/s/ William W. Harvey, Jr.
Date	William W. Harvey, Jr.
	Senior Executive Vice President, Finance and
	Chief Financial Officer

The purpose of this statement is solely to comply with Title 18, Chapter 63, Section 1350 of the United States Code, as amended by Section 906 of the Sarbanes-Oxley Act of 2002.

A signed original of this written statement required by Section 906 has been provided to Northwest Bancshares, Inc. and will be retained by Northwest Bancshares, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.

XML

Document and Entity Information - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2017	Feb. 16, 2018	Jun. 30, 2017
Document and Entity Information
Entity Registrant Name	Northwest Bancshares, Inc.
Entity Central Index Key	0001471265
Current Fiscal Year End Date	--12-31
Entity Filer Category	Large Accelerated Filer
Document Type	10-K
Document Period End Date	Dec. 31, 2017
Document Fiscal Year Focus	2017
Document Fiscal Period Focus	FY
Amendment Flag	false
Entity Common Stock, Shares Outstanding		102,549,072
Entity Well-known Seasoned Issuer	Yes
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Public Float			$ 1,595

XML

CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016
Assets
Cash and cash equivalents	$ 77,710	$ 389,867
Marketable securities available-for-sale (amortized cost of $800,094 and $825,552)	792,535	826,200
Marketable securities held-to-maturity (fair value of $29,667 and $20,426)	29,678	19,978
Loans receivable, net of allowance for loan losses of $56,795 and $60,939	7,736,614	7,496,408
Assets held-for-sale	0	152,528
Accrued interest receivable	23,352	21,699
Real estate owned, net	5,666	4,889
Federal Home Loan Bank stock, at cost	11,733	7,390
Premises and equipment, net	151,944	161,185
Bank owned life insurance	171,547	171,449
Goodwill	307,420	307,420
Other intangible assets	25,669	32,433
Other assets	30,066	32,194
Total assets	9,363,934	9,623,640
Liabilities:
Deposits	7,826,989	7,882,321
Liabilities held-for-sale	0	215,657
Borrowed funds	108,238	142,899
Advances by borrowers for taxes and insurance	40,825	36,879
Accrued interest payable	460	635
Other liabilities	68,485	63,373
Junior subordinated deferrable interest debentures held by trusts that issued guaranteed capital debt securities	111,213	111,213
Total liabilities	8,156,210	8,452,977
Shareholders’ equity:
Preferred stock, $0.01 par value: 50,000,000 authorized, no shares issued	0	0
Common stock, $0.01 par value: 500,000,000 shares authorized, 102,687,811 and 101,699,406 shares issued, respectively	1,027	1,017
Paid-in capital	730,719	718,834
Retained earnings	508,058	478,803
Accumulated other comprehensive loss	(32,080)	(27,991)
Total shareholders’ equity	1,207,724	1,170,663
Total liabilities and shareholders’ equity	$ 9,363,934	$ 9,623,640

XML

CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (Parenthetical) - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016
Statement of Financial Position [Abstract]
Marketable securities available-for-sale, amortized cost	$ 800,094	$ 825,552
Marketable securities held-to-maturity, fair value	29,667	20,426
Allowance for loan losses	$ 56,795	$ 60,939
Preferred stock, par value (in dollars per share)	$ 0.01	$ 0.01
Preferred stock, shares authorized	50,000,000	50,000,000
Preferred stock, shares issued	0	0
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, shares authorized	500,000,000	500,000,000
Common stock, shares issued	102,394,828	101,699,406

XML

CONSOLIDATED STATEMENTS OF INCOME - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Interest income:
Loans receivable	$ 339,992	$ 329,039	$ 298,665
Mortgage-backed securities	11,343	8,540	8,823
Taxable investment securities	3,749	3,409	4,520
Tax-free investment securities	2,023	2,732	4,313
FHLB dividends	250	1,371	2,828
Interest-earning deposits	1,499	543	431
Total interest income	358,856	345,634	319,580
Interest expense:
Deposits	23,057	23,465	24,055
Borrowed funds	5,014	14,834	32,272
Total interest expense	28,071	38,299	56,327
Net interest income	330,785	307,335	263,253
Provision for loan losses	19,751	13,542	9,712
Net interest income after provision for loan losses	311,034	293,793	253,541
Noninterest income:
Gain on sale of investments, net	1,148	625	1,037
Service charges and fees	49,717	44,113	38,362
Trust and other financial services income	17,987	14,103	12,342
Insurance commission income	9,013	10,522	9,526
Loss on real estate owned, net	(797)	(39)	(1,989)
Income from bank owned life insurance	6,093	5,361	4,338
Mortgage banking income	1,418	4,894	933
Gain on sale offices	17,186	0	0
Other operating income	8,715	5,781	4,287
Total noninterest income	110,480	85,360	68,836
Noninterest expense:
Compensation and employee benefits	150,228	140,927	119,818
Premises and occupancy costs	28,863	26,134	24,641
Office operations	16,342	14,898	12,337
Collections expense	2,849	2,431	3,247
Processing expenses	39,086	34,859	30,780
Marketing expenses	9,607	8,852	8,499
Federal deposit insurance premiums	3,518	4,404	5,109
Professional services	10,293	7,865	6,906
Amortization of intangible assets	6,764	4,259	1,688
Real estate owned expense	1,004	1,004	2,070
Restructuring/ acquisition expense	4,419	12,213	9,751
FHLB prepayment penalty	0	36,978	0
Other expense	12,630	13,014	9,031
Total noninterest expense	285,603	307,838	233,877
Income before income taxes	135,911	71,315	88,500
Provision for income taxes:
Federal	34,801	20,313	24,010
State	6,643	1,335	3,950
Total provision for income taxes	41,444	21,648	27,960
Net income	$ 94,467	$ 49,667	$ 60,540
Basic earnings per share (in dollars per share)	$ 0.94	$ 0.50	$ 0.64
Diluted earnings per share (in dollars per share)	$ 0.92	$ 0.49	$ 0.64

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CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Statement of Comprehensive Income [Abstract]
Net Income	$ 94,467	$ 49,667	$ 60,540
Net unrealized holding gains/ (losses) on marketable securities:
Unrealized holding gains/ (losses), net of tax of $1,915, $1,742 and $(204), respectively	(2,478)	(2,728)	315
Reclassification adjustment for gains included in net income, net of tax of $1,488, $129 and $289, respectively	(2,326)	(202)	(451)
Net unrealized holding losses on marketable securities	(4,804)	(2,930)	(136)
Change in fair value of interest rate swaps, net of tax of $(585), $(539) and $(699), respectively	1,087	1,001	1,299
Defined benefit plans:
Net loss, net of tax of $826, $3,061 and $1,408, respectively	(1,254)	(2,399)	(2,203)
Amortization of prior service costs, net of tax of $(613), $(606) and $(560), respectively	882	872	875
Net loss on defined benefit plans	(372)	(1,527)	(1,328)
Other comprehensive loss	(4,089)	(3,456)	(165)
Total comprehensive income	$ 90,378	$ 46,211	$ 60,375

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CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Parenthetical) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Statement of Comprehensive Income [Abstract]
Income tax (expense) benefit related to unrealized holding gains/ losses on securities	$ 1,915	$ 1,742	$ (204)
Income tax (expense) benefit related to (gain) loss on securities	1,488	129	289
Income tax (expense) benefit related to derivatives qualifying as hedges	(585)	(539)	(699)
Income tax on defined benefit plan gain (loss)	826	3,061	1,408
Income tax expense (benefit) related to compensation and employee benefits	$ (613)	$ (606)	$ (560)

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CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY - USD ($) $ in Thousands	Total	Common stock	Paid-in capital	Retained earnings	Accumulated other comprehensive income/ (loss)	Unallocated common stock of ESOP
Balance at beginning of the period at Dec. 31, 2014	$ 1,062,647	$ 947	$ 626,134	$ 481,577	$ (24,370)	$ (21,641)
Comprehensive income:
Net Income	60,540			60,540
Other comprehensive loss, net of tax	(165)				(165)
Total comprehensive income	60,375			60,540	(165)
Shares issued to acquire LNB Bancorp, Inc.	90,608	70	90,538
Exercise of stock options	4,303	5	4,298
Share repurchases	(7,847)	(6)	(7,841)
Stock-based compensation expense including tax benefits	5,902	3	4,474			1,425
Dividends paid	(52,825)			(52,825)
Balance at end of the period at Dec. 31, 2015	1,163,163	1,019	717,603	489,292	(24,535)	(20,216)
Comprehensive income:
Net Income	49,667			49,667
Other comprehensive loss, net of tax	(3,456)				(3,456)
Total comprehensive income	46,211			49,667	(3,456)
ESOP termination	0	(14)	(13,896)			13,910
Exercise of stock options	10,856	11	10,845
Share repurchases	(1,752)	(2)	(1,750)
Stock-based compensation expense including tax benefits	12,341	3	6,032	0		6,306
Dividends paid	(60,156)			(60,156)
Balance at end of the period at Dec. 31, 2016	1,170,663	1,017	718,834	478,803	(27,991)	0
Comprehensive income:
Net Income	94,467			94,467
Other comprehensive loss, net of tax	(4,089)				(4,089)
Total comprehensive income	90,378			94,467	(4,089)
Exercise of stock options	7,001	6	6,995
Stock-based compensation expense including tax benefits	4,894	4	4,890			0
Dividends paid	(65,212)			(65,212)
Balance at end of the period at Dec. 31, 2017	$ 1,207,724	$ 1,027	$ 730,719	$ 508,058	$ (32,080)	$ 0

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CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (Parenthetical) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Statement of Stockholders' Equity [Abstract]
Other comprehensive income, tax	$ 3,031	$ 3,787	$ 234
Stock-based compensation expense, tax benefits		$ 1,425	$ 332
Dividends paid, per share (in dollars per share)	$ 0.64	$ 0.6	$ 0.56

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CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Operating activities:
Net Income	$ 94,467	$ 49,667	$ 60,540
Adjustments to reconcile net income to net cash provided by operating activities:
Provision for loan losses	19,751	13,542	9,712
Net gain on sale of assets	(627)	(4,499)	(921)
Net gain on sale offices	(17,186)	0	0
Net depreciation, amortization and accretion	14,293	15,424	8,958
Decrease in other assets	7,161	25,953	37,969
Increase/ (decrease) in other liabilities	11,694	4,801	(18,998)
Net amortization of premium on marketable securities	2,017	2,139	1,149
Noncash compensation expense related to stock benefit plans	4,894	10,916	5,570
Noncash impairment of real estate owned	1,231	1,481	2,923
Deferred income tax expense	11,317	2,734	6,290
FHLB prepayment penalty	0	24,520	0
Origination of loans held for sale	(66,058)	(252,204)	(2,504)
Proceeds from sale of loans held for sale	73,103	242,428	2,514
Net cash provided by operating activities	156,057	136,902	113,202
Investing activities:
Purchase of marketable securities held-to-maturity	(23,621)	0	0
Purchase of marketable securities available-for-sale	(218,292)	(238,673)	(59,980)
Proceeds from maturities and principal reductions of marketable securities held-to-maturity	13,902	11,700	72,265
Proceeds from maturities and principal reductions of marketable securities available-for-sale	206,089	278,621	280,277
Proceeds from sale of marketable securities available-for-sale	36,811	1,951	1,246
Net increase in loans	(120,076)	(33,434)	(319,088)
Net (purchases)/ redemptions of Federal Home Loan Bank stock	(4,343)	33,513	(3,770)
Proceeds from sale of real estate owned	4,342	8,113	13,961
Sale of real estate owned for investment	608	607	608
Purchases of premises and equipment	(3,719)	(15,227)	(13,223)
Acquisitions, net of cash received	0	1,102,237	(61,108)
Net cash provided by/ (used in) investing activities	(108,299)	1,149,408	(88,812)
Financing activities:
Net decrease in deposits	(270,989)	(157,457)	(60,236)
Proceeds from long-term borrowings	0	0	135,000
Repayments of long-term borrowings	0	(774,863)	(172,552)
Net increase/ (decrease) in short-term borrowings	(34,661)	(81,765)	61,281
Increase/ (decrease) in advances by borrowers for taxes and insurance	3,946	(139)	2,975
Redemption of Junior subordinated debentures	0	0	(8,119)
Share repurchases	0	(1,752)	(7,847)
Cash dividends paid on common stock	(65,212)	(60,156)	(52,825)
Proceeds from stock options exercised	7,001	10,856	4,303
Excess tax benefit from stock-based compensation	0	1,425	332
Net cash used in financing activities	(359,915)	(1,063,851)	(97,688)
Cash and cash equivalents at beginning of period	389,867	167,408	240,706
Net increase/ (decrease) in cash and cash equivalents	(312,157)	222,459	(73,298)
Cash and cash equivalents at end of period	77,710	389,867	167,408
Cash paid during the period for:
Interest on deposits and borrowings (including interest credited to deposit accounts of $22,385, $22,213 and $21,949, respectively)	28,254	39,649	55,270
Income taxes	32,270	9,710	16,719
Business acquisitions
Fair value of assets acquired	0	546,247	1,160,190
Net cash (paid)/ received	0	1,102,237	(61,108)
Liabilities assumed	0	1,648,484	1,099,082
Loan foreclosures and repossessions	8,130	6,252	7,633
Sale of real estate owned financed by the Company	$ 168	$ 498	$ 768

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CONSOLIDATED STATEMENTS OF CASH FLOWS (Parenthetical) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Statement of Cash Flows [Abstract]
Interest on deposits and borrowings, interest credited to deposit accounts	$ 22,385	$ 22,213	$ 21,949

XML

Summary of Significant Accounting Policies

12 Months Ended

Dec. 31, 2017

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Summary of Significant Accounting Policies

Summary of Significant Accounting Policies

(a)Nature of Operations

Northwest Bancshares, Inc., a Maryland corporation headquartered in Warren, Pennsylvania, is the federal savings and loan holding company for its wholly owned subsidiary, Northwest Bank. Northwest Bank, a Pennsylvania chartered savings bank, offers personal and business deposit and loan products as well as investment management and insurance services through its 172 banking locations in Pennsylvania, New York, and Ohio.

(b)Principles of Consolidation

The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries after elimination of all intercompany accounts and transactions.

(c)Cash and Cash Equivalents

For purposes of the statements of financial condition and cash flows, cash and cash equivalents include cash and amounts due from banks, interest-bearing deposits in other financial institutions, federal funds sold, and other short-term investments with original maturities of three months or less.

(d)Investment Securities

We classify marketable securities at the time of purchase as held-to-maturity, available-for-sale, or trading. Securities for which management has the intent and ability to hold until maturity are classified as held-to-maturity and are carried at cost, adjusted for amortization of premiums and accretion of discounts on a level yield basis (amortized cost).  If it is management’s intent at the time of purchase to hold securities for an indefinite period of time and/ or to use such securities as part of its asset/ liability management strategy, the securities are classified as available-for-sale and are carried at fair value, with unrealized gains and losses reported as accumulated other comprehensive income/ (loss), a separate component of shareholders’ equity, net of tax. Securities classified as available-for-sale include securities that may be sold in response to changes in interest rates, resultant prepayment risk, or other market factors. Securities that are bought and held principally for the purpose of selling them in the near term are classified as trading and are reported at fair value, with changes in fair value included in earnings. The cost of securities sold is determined on a specific identification basis. We held no securities classified as trading at or during the years ended December 31, 2017 and 2016.

On at least a quarterly basis, we review our investments for other-than-temporary impairment (“OTTI”).  An investment security is deemed impaired if the fair value of the investment is less than its amortized cost.  If an investment security is determined to be impaired, we evaluate whether the decline in value is other-than-temporary.  We consider whether or not we expect to receive all of the contractual cash flows from the investment security based on factors that include, but are not limited to the creditworthiness of the issuer and the historical and projected performance of the underlying collateral.  Also, we may evaluate the business and financial outlook of the issuer, as well as broader economic performance indicators.  We consider both our intent to sell and the likelihood that we will not have to sell the investment securities before recovery of their cost basis during our evaluation. Impairment that is deemed credit related is recognized in earnings while impairment deemed noncredit related is recorded in accumulated other comprehensive income, if we do not intend to sell nor it is not likely we will be required to sell the investment security.  If we intend to sell the investment security or if it is more likely than not that we will be required to sell the investment security, the entire impairment is recorded in earnings.

(e)Loans Receivable

Our loan segments consist of Personal Banking and Business Banking loans.  Personal Banking loans include; residential mortgage, home equity and consumer loans.  Business Banking loans include; commercial real estate and commercial loans.  Originated loans are carried at their unpaid principal balance net of any deferred origination fees or costs and the allowance for loan losses. Interest income on loans is credited to income as earned. Interest earned on loans for which no payments were received during the month is accrued at month end. Accrued interest on loans more than 90 days delinquent is reversed and such loans are placed on nonaccrual status.

All loans are placed on nonaccrual status when principal or interest is 90 days or more delinquent or when there is reasonable doubt that interest or principal will not be collected in accordance with the contractual terms. Interest receipts on all nonaccrual and impaired loans are recognized as interest income when it has been determined that all principal and interest will be collected or are applied to principal when collectability of contractual principal is in doubt.  Nonaccrual loans generally are restored to an accrual basis when principal and interest become current and a period of performance has been established in accordance with the contractual terms, typically six months.

A loan is considered to be a troubled debt restructured loan ("TDR") when the borrower is experiencing financial difficulties and the restructuring constitutes a concession. TDRs may include modifications of terms of loans, receipts of assets from borrowers in partial or full satisfaction of loans, or a combination thereof. TDRs are impaired loans. A modified loan is determined to be a TDR based on the contractual terms as specified by the original loan agreement or the most recent modification. Once classified a TDR, a loan is removed from such classification under three circumstances: (1) the loan is paid off, (2) the loan is charged off, or (3) if, at the beginning of the current fiscal year, the loan has performed in accordance with the modified terms for a minimum of six consecutive months and at the time of modification the loan’s interest rate represented a then current market interest rate for a loan of similar risk.

Loan delinquency is measured based on the number of days since the payment due date.  Past due status is measured using the loan’s contractual maturity date.

Loan fees and certain direct loan origination costs are deferred and the net deferred fee or cost is then recognized using the level-yield method over the contractual life of the loan as an adjustment to interest income.

We identify certain residential mortgage loans which will be sold prior to maturity, as loans held for sale. These loans are recorded at the lower of amortized cost or fair value less estimated cost to sell. At December 31, 2017 and 2016, there were $3.1 million and $9.6 million residential mortgage loans classified as held for sale, respectively.

Acquired loans are initially measured at fair value with no carryover of the related allowance for loan losses. Determining the fair value of the loans involves estimating the amount and timing of principal and interest cash flows expected to be collected on the loans and discounting those cash flows at a market rate of interest.

The excess of cash flows expected at acquisition over the estimated fair value is referred to as the accretable discount and is recognized into interest income over the remaining life of the loan. The difference between contractually required payments at acquisition and the cash flows expected to be collected at acquisition is referred to as the nonaccretable discount. The nonaccretable discount represents estimated future credit losses expected to be incurred over the life of the loan. Subsequent decreases to the expected cash flows require us to evaluate the need for an allowance for loan losses. Subsequent improvements in expected cash flows result in the reversal of a corresponding amount of the nonaccretable discount which we then reclassify as accretable discount that is recognized into interest income over the remaining life of the loan using the interest method. Charge-offs of the principal amount on acquired loans would be first applied to the nonaccretable discount portion of the fair value adjustment.

Acquired loans that met the criteria for nonaccrual of interest prior to the acquisition may be considered performing upon acquisition, regardless of whether the customer is contractually delinquent, if we can reasonably estimate the timing and amount of the expected cash flows on such loans and if we expect to fully collect the new carrying value of the loans. As such, we may no longer consider the loan to be nonaccrual or nonperforming and may accrue interest on these loans, including the impact of any accretable discount. We have determined that we can reasonably estimate future cash flows on our current portfolio of acquired loans that are past due 90 days or more and on which we are accruing interest and we expect to fully collect the carrying value of the loans.

(f)Allowance for Loan Losses and Provision for Loan Losses

Provisions for estimated loan losses and the amount of the allowance for loan losses are based on losses inherent in the loan portfolio that are both probable and can be reasonably estimated at the date of the financial statements.

We consider a loan to be impaired when it is probable that we will be unable to collect all amounts due according to the contractual terms of the loan agreement. In evaluating whether a loan is impaired, we consider not only the amount that we expect to collect but also the timing of collection. Generally, if a delay in payment is insignificant (e.g., less than 30 days), a loan is not deemed to be impaired.

Business Banking loans greater than or equal to $1.0 million are reviewed to determine if they should be individually evaluated for impairment. Smaller balance, homogeneous loans (e.g., primarily residential mortgage, home equity and consumer loans) are evaluated collectively for impairment. When a loan is considered to be impaired, the amount of impairment is measured based on the present value of expected future cash flows discounted at the loan’s effective interest rate, the loan’s market price, or fair value of the collateral, less estimated cost to sell, if the loan is collateral dependent. Impairment losses are included in the allowance for loan losses. Impaired loans are charged-off or charged down when we believe that the ultimate collectability of a loan is not likely or the collateral value no longer supports the carrying value of the loan.

Interest income on non-performing loans is recognized using the cash basis method. For non-performing loans interest collected is credited to income in the period of recovery or applied to reduce principal if there is sufficient doubt about the collectability of principal.

The allowance for loan losses is shown as a valuation allowance to loans. The accounting policy for the determination of the adequacy of the allowance by portfolio segment requires us to make numerous complex and subjective estimates and assumptions relating to amounts which are inherently uncertain. The allowance for loan losses is maintained to absorb losses inherent in the loan portfolio as of the balance sheet date. The methodology used to determine the allowance for loan losses is designed to provide procedural discipline in assessing the appropriateness of the allowance for loan losses. Losses are charged against and recoveries are added to the allowance for loan losses.

For Business Banking loans the allowance for loan losses consists of:

• An allowance for impaired loans;

• An allowance for homogenous loans based on historical losses; and

• An allowance for homogenous loans based on environmental factors.

The allowance for impaired loans is based on individual analysis of all nonperforming loans greater than or equal to $1.0 million. The allowance is measured by the difference between the recorded value of impaired loans and their impaired value. The impaired value is either the present value of the expected future cash flows from the borrower, the market value of the loan, or the fair value of the collateral, less estimated cost to sell.

The allowance for homogeneous loans based on historical factors is a rolling three-year average of incurred losses, adjusted for a loss emergence period (the period of time from the event of loss to loss realization), applied to homogenous pools of loans categorized by similar risk characteristics, not including loans evaluated individually for impairment.

The allowance for homogeneous loans based on environmental factors augments the historical loss factors for changes in: economic conditions, lending policies and procedures, the nature and volume of the loan portfolio, management, delinquency trends, loan administration, collateral values, concentrations of credit, and other external factors including legal and regulatory factors.

For Personal Banking loans the allowance for loan losses consists of:

• An allowance for loans 90 days or more delinquent;

• An allowance for homogenous loans based on historical losses; and

• An allowance for homogenous loans based on environmental factors.

The allowance for loans 90 days or more delinquent is based on the loss history of loans that have become 90 days or more delinquent.  We apply a historical loss factor to homogeneous pools of loans that are 90 days or more delinquent.

The allowance for homogeneous loans based on historical losses is a rolling three-year average of actual losses incurred, adjusted for a loss realization period, applied to homogenous pools of loans categorized by similar risk characteristics, not including loans that are 90 days or more delinquent.

The allocation of the allowance for loan losses is inherently subjective, and the entire allowance for loan losses is available to absorb loan losses regardless of the nature of the loss.

Personal Banking loans are charged-off or charged down when they become 180 days delinquent, unless the borrower has filed for bankruptcy.  Business Banking loans are charged-off or charged down when, in our opinion, they are no longer collectible or when it has been determined that the collateral value no longer supports the carrying value of the loan, for loans that are collateral dependent.

We have not made any material changes to our methodology for the calculation of the allowance for loan losses during the current year.

(g)Real Estate Owned

Real estate owned is comprised of property either acquired through foreclosure or voluntarily conveyed by borrowers. These assets are recorded on the date acquired at the lower of the loan balance or fair value of the collateral, less estimated disposition costs, with the fair value being determined by an appraisal. Any initial write-down is charged to the allowance for loan losses. Subsequently, foreclosed assets are valued at the lower of the amount recorded at acquisition date or the current fair value, less estimated disposition costs. Any subsequent write-down or gains or losses realized from the disposition of such property are credited or charged to noninterest income.

(h)    Restricted Investment in Federal Home Loan Bank Stock

Federal law requires a member institution of the Federal Home Loan Bank ("FHLB") system to hold stock of its district FHLB according to a predetermined formula. FHLB stock is carried at cost and evaluated or impairment based on the ultimate recoverability of the par value. FHLB stock can only be purchased, redeemed and transferred at par value. Dividends are reported in interest income in the Consolidated Statements of Income.

(i)Premises and Equipment

Premises and equipment are carried at cost, less accumulated depreciation and amortization. Depreciation is accumulated on a straight-line basis over the estimated useful lives of the related assets. Estimated lives range from three to 39 years. Amortization of leasehold improvements is accumulated on a straight-line basis over the terms of the related leases or the useful lives of the related assets, whichever is shorter.

(j)Goodwill

Goodwill is generated from the premium paid for an acquisition and is allocated to reporting units, which are either our reportable segments or one level below.  Reporting units are identified based upon analyzing each individual operating segment. A reporting unit is defined as a distinct, separately identifiable component of an operating segment for which complete, discrete financial information is available that management regularly reviews. 

Goodwill is not subject to amortization but is tested for impairment at least annually and possibly more frequently if certain events occur or changes in circumstances arise. In testing goodwill for impairment, we have the option to first assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying value. If, after assessing all events and circumstances, we determine it is not more likely than not that the fair value of a reporting unit is less than its carrying value, then performing the two-step impairment test would be unnecessary. However, if we conclude otherwise, it would then be required to perform the first step of the goodwill impairment test, and continue to the second step, if necessary. Step 1 requires the fair value of each reporting unit be compared to its carrying amount, including goodwill. Determining the fair value of a reporting unit requires a high degree of subjective judgment, including developing cash flow projections, selecting appropriate discount rates, identifying relevant market comparables, incorporating general economic and market conditions and selecting an appropriate control premium. 

We conducted our annual impairment assessment as of June 30, 2017 by first performing a qualitative assessment of goodwill to determine if it was more likely than not that the fair value was less than the carrying value.  In performing a qualitative analysis, factors considered include, but are not limited to, macroeconomic conditions, industry and market conditions and overall financial performance.  The results of the qualitative assessment for 2017 indicated that it was not more likely than not that the fair value of the reporting unit was less than the carrying value.  Consequently, no additional quantitative two-step impairment test was required, and no impairment was recorded in 2017.  As of June 30, 2016, we performed a quantitative impairment test that did not result in any impairment.  Future events could cause us to conclude that goodwill has become impaired, which would result in recording an impairment loss. There were no changes in our operations that would cause us to update the assessment performed as of June 30, 2017 and 2016. Accordingly, we have determined that goodwill is not impaired as of December 31, 2017 and 2016.

(k)Core Deposit and Other Identifiable Intangibles

Through the assistance of an independent third party, we analyze and prepare a core deposit study for all bank acquisitions or other identifiable intangible asset study, such as customer lists, for all non-bank acquisitions. The core deposit study reflects the cumulative present value benefit of acquiring deposits versus an alternative source of funding. The other identifiable intangible asset study reflects the cumulative present value benefit of acquiring the income stream from an existing customer base versus developing new business relationships. Based upon analysis, the amount of the premium related to the core deposits or other identifiable intangibles of the business purchased is calculated along with the estimated life of the intangible. The intangible, which is recorded in other intangible assets, is then amortized to expense on an accelerated basis over an approximate life of typically between seven to eleven years.

(l)Bank-Owned Life Insurance

We own insurance on the lives of a certain group of current and former employees and directors. The policies were purchased to help offset the increase in the costs of various benefit plans, including healthcare, as well as the directors deferred compensation plan.  The cash surrender value of these policies is included as an asset on the consolidated statements of financial condition, and any increases in the cash surrender value are recorded as tax-free noninterest income on the consolidated statements of income. In the event of the death of an insured individual covered by these policies, after distribution to the insured’s beneficiaries, if any, we receive a tax-free death benefit, which is recorded as noninterest income.

(m)Deposits

Interest on deposits is accrued and charged to expense monthly and is paid or credited in accordance with the terms of the accounts.

(n)Pension Plans

We maintain multiple noncontributory defined benefit pension plans for substantially all of our employees.  The net periodic pension cost has been calculated using service cost, interest cost, expected returns on plan assets and net amortization.

(o)Income Taxes

We join with our wholly owned subsidiaries in filing a consolidated federal income tax return.  In accordance with an intercompany tax allocation agreement, the applicable federal income tax expense or benefit is allocated to each subsidiary based upon taxable income or loss calculated on a separate company basis.  Each subsidiary is responsible for payment of its own federal income tax liability or receives reimbursement of federal income tax benefit.  In addition, deferred taxes are calculated and maintained on a separate company basis.

We account for income taxes under the asset and liability method.  The objective of the asset and liability method is to establish deferred tax assets and liabilities for temporary differences between the financial reporting and tax basis of our assets and liabilities based on the tax rates expected to be in effect when such amounts are realized or settled. The effect on deferred tax assets and liabilities with regard to a change in tax rates is recognized in the tax provision in the period the change is enacted.

(p)Stock-Related Compensation

We determine the fair value of each option award, estimated on the grant date, using the Black-Scholes-Merton option-pricing model. The Black-Scholes-Merton option-pricing model uses variables including; expected volatilities, expected term, risk-free discount rate and annual rate of quarterly dividends. Expected volatilities are based on historical volatility of the Company’s stock. The expected terms are based upon actual exercise and forfeiture experience of previous option grants. The risk-free rate is based on yields on U.S. Treasury securities of a similar maturity to the expected term of the options. For options outstanding at December 31, 2017 the following assumptions were used to determine the options fair value: (1) annual rate of quarterly dividends ranging from 3.2% to 5.1% based on historical dividends and market prices; (2) expected volatility of 17.0% to 22.0% based on historical average monthly volatility; (3) risk-free discount rates ranging from 1.7% to 3.1%; and (4) expected lives of seven to nine years based on previous grants. During the year ended December 31, 2017, we awarded 754,210 stock options to employees and 64,800 stock options to directors. Option awards are generally granted with an exercise price equal to the closing market price of the Company’s stock on the day before the grant date. The options granted in 2017 vest over a ten-year period, with the first vesting occurring on the grant date. New shares are issued when options are exercised.

During the year ended December 31, 2017, we awarded 353,750 common shares to employees and 24,300 common shares to directors. The common share awards granted in 2017 vest over a ten-year period, with the first vesting occurring on the grant date. For additional information regarding grants of stock options and common shares see note 14.

Stock-based employee compensation expense related to common share awards of $3.8 million, $3.5 million and $3.0 million was included in income before income taxes during the years ended December 31, 2017, 2016 and 2015, respectively. The effect on net income for the years ended December 31, 2017, 2016 and 2015 was a reduction of $2.3 million, $2.2 million and $1.8 million, respectively. Total compensation expense for unvested stock options of $4.1 million has yet to be recognized as of December 31, 2017. The weighted average period over which this remaining stock option expense will be recognized is approximately 4 years.

(q)Segment Reporting

As a result of the closure of the Northwest Consumer Discount Company in the third quarter 2017, we have determined that we have one reportable segment beginning in the fourth quarter 2017.  The Company provides services traditionally offered by full-service community banks, including business and personal deposit accounts and business and personal loans, as well as insurance, brokerage and investment management and trust services.  The Company’s non-banking activities are immaterial and, therefore, separate information has not been disclosed.

(r)Derivative financial instruments

We recognize all derivative financial instruments as either assets or liabilities in the balance sheet and measure those instruments at fair value.  The accounting for changes in the fair value of a derivative depends on the intended use of the derivative and the resulting designation.  An entity that elects to use hedge accounting is required, at inception, to establish the method it will use for assessing the effectiveness of the hedging derivative and the measurement approach for determining the ineffective aspect of the hedge.  Those methods must be consistent with our approach to managing risk.

We utilize interest rate swap agreements as part of the management of interest rate risk to hedge the interest rate risk on our trust preferred debentures.  Amounts receivable or payable are recognized as accrued under the terms of the agreements and the differential is recorded as an adjustment to interest expense.  The interest rate swaps are designated as cash flow hedges, with the effective portion of the derivative’s unrealized gain or loss recorded as a component of other comprehensive income which is subsequently reclassified into earnings in the period that the hedged forecasted transaction affects earnings. The ineffective portion of the unrealized gain or loss, if any, would be recorded in other expense. For derivatives that are not designated as hedging instruments, any gain or loss is recognized immediately in earnings.

(s)Off-Balance-Sheet Instruments

In the normal course of business, we extend credit in the form of loan commitments, undisbursed lines of credit, and standby letters of credit. These off-balance-sheet instruments involve, to various degrees, elements of credit and interest rate risk not reported in the consolidated statement of financial condition. We utilize the same underwriting standards for these instruments as other extensions of credit.

(t)Use of Estimates

The preparation of financial statements, in conformity with accounting principles generally accepted in the United States of America, requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amount of revenues and expenses during the reporting period. The estimates and assumptions that we deem important to our financial statements relate to the allowance for loan losses, the accounting treatment and valuation of our investment securities portfolio, the analysis of the carrying value of goodwill, pension and income taxes. These estimates and assumptions are based on management’s best estimates and judgment and we evaluate them using historical experience and other factors, including the current economic environment. We adjust our estimates and assumptions when facts and circumstances dictate. As future events cannot be determined, actual results could differ significantly from our estimates.

(u)Reclassification of Prior Years’ Statements

Certain items previously reported have been reclassified to conform with the current year’s reporting format.

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Recent Accounting Pronouncements

12 Months Ended

Dec. 31, 2017

Accounting Changes and Error Corrections [Abstract]

Recent Accounting Pronouncements

Recent Accounting Pronouncements

In May 2014 the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2014-09, “Revenue from Contracts with Customers (Topic 606)”. This guidance supersedes the revenue recognition requirements in Topic 605, Revenue Recognition, and most industry-specific guidance. The core principle of this guidance requires an entity to recognize revenue upon the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services and provides five steps to be analyzed to accomplish the core principle. This guidance is effective retrospectively for annual reporting periods beginning after December 15, 2017, including interim periods within those years and early adoption is not permitted. Our revenue is comprised of net interest income on financial assets and financial liabilities, which is explicitly excluded from the scope of ASU 2014-09, and non-interest income. With respect to non-interest income we are complete with our overall assessment of revenue streams and review of related contracts potentially affected by the ASU, including service charges and fees, trust and other financial services income, insurance commission income, and other operating income. The adoption of this ASU will not materially change the method in which we currently recognize revenue for these revenue streams. We are also complete with our evaluation of certain costs related to these revenue streams to determine whether such costs should be presented as expenses or contra-revenue (i.e., gross vs. net). We adopted ASU No. 2014-09 on January 1, 2018 utilizing the modified retrospective approach. Since there was no net income impact, a cumulative effect adjustment to opening retained earnings was deemed not necessary. We are completing our evaluation of the ASU's expanded disclosure requirements and expect them to be primarily qualitative in nature, such as providing greater detail on revenue streams and related performance obligations.

In January 2016 the FASB issued ASU 2016-01, “Financial Instruments - Overall (Subtopic 825-10)”. This guidance requires equity investments (except those accounted for under the equity method of accounting or those that result in consolidation of the investee) to be measured at fair value with changes in fair value recognized in net income. Additionally, this guidance requires entities to use the exit price notion when measuring the fair value of financial instruments for disclosure purposes and eliminates the requirement for public business entities to disclose the method(s) and significant assumptions used to estimate the fair value that is required to be disclosed for financial instruments measured at amortized cost on the balance sheet. This guidance is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. We do not expected this guidance to have a material impact on our results of operations and financial position.

In February 2016 the FASB issued ASU 2016-2, “Leases”. This guidance requires a lessee to recognize in the statement of financial condition a liability to make lease payments and a right-of-use asset representing the right to use the underlying asset for the term of the lease. Optional periods should only be recognized if the lessee is reasonably certain to exercise the option. For leases with a term of twelve months or less, the lessee is permitted not to recognize lease assets and lease liabilities and should recognize lease expense for such leases generally on a straight-line basis over the term of the lease. This guidance is effective for annual periods beginning after December 15, 2018, including interim periods within those years and early adoption is permitted. We are currently evaluating the impact this guidance will have on our results of operations and financial position.

In June 2016, the FASB issued ASU 2016-13, "Financial Instruments - Credit Losses (Topic 326) - Measurement of Credit Losses on Financial Instruments", which eliminates the probable initial recognition threshold for credit losses requiring, instead, that all financial assets (or group of financial assets) measured at amortized cost be presented at the net amount expected to be collected inclusive of the entity’s current estimate of all lifetime expected credit losses. This guidance also applies to certain off-balance-sheet credit exposures such as unfunded commitments and non-derivative financial guarantees. The allowance for credit losses is a valuation account that is deducted from the amortized cost basis of the financial asset(s) in order to present the net carrying value at the amount expected to be collected on the financial asset. The measurement of expected credit losses is based on relevant information about past events, including historical experience, current conditions, and reasonable and supportable forecasts that affect the collectability of the reported amount. The income statement under this guidance will reflect the initial recognition of current expected credit losses for newly recognized assets, as well as any increases or decreases of expected credit losses that have occurred during the period. This guidance retains many currently-existing disclosures related to the credit quality of an entity’s assets and the related allowance for credit losses amended to reflect the change to an expected credit loss methodology, as well as enhanced disclosures to provide information to users at a more disaggregated level. Upon adoption, ASU 2016-13 provides for a modified retrospective transition by means of a cumulative-effect adjustment to equity as of the beginning of the period in which the guidance is effective, except for debt securities for which an other-than-temporary impairment has previously been recognized. For these debt securities, a prospective transition is provided in order to maintain the same amortized cost prior to and subsequent to the effective date of the ASU. This guidance is effective for annual reporting periods beginning after December 15, 2019, and interim periods within those annual periods with early adoption permitted for fiscal years beginning after December 15, 2018, and interim periods within those annual periods. Management created a formal working group to govern the implementation of these amendments consisting of key stakeholders from finance, risk, and accounting. We are currently in the process of designing current expected credit loss estimation methodologies and systems, and collecting data to be able to comply with the standard. We are also evaluating the effect this guidance will have on our results of operations, financial position and related disclosures. The impact of the ASU will depend upon the state of the economy and the nature of our portfolios at the date of adoption.

In August 2016, the FASB issued ASU No. 2016-15, “Classification of Certain Cash Receipts and Cash Payments”. The main objective of this ASU is to reduce diversity in practice in how certain transactions are classified in the statement of cash flows. The amendments in this Update provide guidance on the following eight specific cash flow issues: debt prepayment or debt extinguishment costs, settlement of zero-coupon debt instruments, contingent consideration payments made after a business combination, proceeds from the settlement of insurance claims, proceeds from the settlement of bank-owned life insurance (BOLI) policies, distributions received from equity method investments, beneficial interests in securitization transactions, and separately identifiable cash flows and application of the predominance principle. This guidance is effective for interim and annual reporting periods in fiscal years beginning after December 15, 2017. Early adoption is permitted, provided that all of the amendments are adopted in the same period. The provisions of this ASU will not materially impact our results of operations and financial position.

In January 2017 the FASB issued ASU 2017-04, "Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment". This guidance eliminates the requirement to determine the fair value of individual assets and liabilities of a reporting unit to measure goodwill impairment. Under this guidance goodwill impairment testing will be performed by comparing the fair value of the reporting unit with its carrying amount and recognizing an impairment charge for the amount by which the carrying amount exceeds the reporting unit's fair value. This guidance is effective for annual and interim goodwill impairment tests in fiscal years beginning after December 15, 2019, and should be applied on a prospective basis. Early adoption is permitted for annual and interim goodwill impairment testing dates after January 1, 2017. We do not expected this guidance to have a material impact on our consolidated financial statements.

In March 2017, the FASB issued ASU No. 2017-07, “Compensation Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Costs and Net Periodic Postretirement Benefit Costs". This guidance provides financial statement users with clearer and disaggregated information related to the components of net periodic benefit cost and improve transparency of the presentation of net periodic benefit cost in the financial statements. This guidance is effective for annual and interim periods beginning after December 15, 2017. Early adoption is permitted and this guidance should be applied retrospectively. We intend to early adopt the provisions of this standard effective with our March 31, 2018 quarterly report on Form 10-Q and do not anticipate that the adoption of this guidance will not have a material impact on our results of operations, however it will impact the presentation of our Consolidated Statements of Income.

 In March 2017 the FASB issued ASU 2017-08, "Receivables - Nonrefundable Fees and Other Costs (Subtopic 310-20): Premium Amortization on Purchased Callable Debt Securities". This guidance shortens the amortization period for certain callable debt securities held at a premium to the earliest call date from the maturity date. This guidance is effective for annual and interim periods beginning after December 15, 2018. Early adoption is permitted in any interim period. We intend to early adopt the provisions of this standard effective with our March 31, 2018 quarterly report on Form 10-Q and do not expect the adoption to have a material impact on our results of operations or financial position.

In May 2017 the FASB issued ASU 2017-09, “Compensation - Stock Compensation (Topic 718) - Scope of Modification Accounting”. This guidance clarifies when changes to the terms or conditions of a share-based payment award must be accounted for as modifications. Under ASU 2017-09, an entity will not apply modification accounting to a share-based payment award if all of the following are the same immediately before and after the change: (i) the award's fair value, (ii) the award's vesting conditions and (iii) the award's classification as an equity or liability instrument. This guidance is effective for annual and interim periods beginning after December 15, 2017 and is not expected to have a material impact on our consolidated financial statements.

In February 2018 the FASB issued ASU 2018-02, "Income Statement - Reporting Comprehensive Income (Topic 220) - Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income." This guidance permits a reclassification from accumulated other comprehensive income to retained earnings of the stranded tax effects resulting from the Tax Cuts and Jobs Act. This guidance is effective for annual or interim reporting periods beginning after December 15, 2018. Early adoption is permitted and the guidance should be applied either in the period of adoption or retrospectively to each period impacted by the change in the Federal corporate income tax rate change. We intend to early adopt the provisions of this standard effective with our March 31, 2018 quarterly report on Form 10-Q and do not expect the adoption to have a material impact on our consolidated financial statements

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Marketable Securities

12 Months Ended

Dec. 31, 2017

Investments, Debt and Equity Securities [Abstract]

Marketable Securities

Marketable Securities

Marketable securities available-for-sale at December 31, 2017 are as follows: 

	Amortized cost		Gross unrealized holding gains	Gross unrealized holding losses		Fair value
Debt issued by the U.S. government and agencies:
Due in one year or less	$	1	—	—		1
Debt issued by government sponsored enterprises:			3
Due in one year or less	66,566		14	(289	)	66,291
Due after one year through five years	140,624		—	(2,402	)	138,222
Due after five years through ten years	—		—	—		—
Due after ten years	4,833		—	(77	)	4,756
Equity securities	551		29	(6	)	574
Municipal securities:
Due in one year or less	2,492		7	(1	)	2,498
Due after one year through five years	7,072		82	(6	)	7,148
Due after five years through ten years	14,576		171	—		14,747
Due after ten years	26,371		292	—		26,663
Corporate debt issues:
Due after ten years	909		—	—		909
Residential mortgage-backed securities:
Fixed rate pass-through	144,411		1,108	(2,817	)	142,702
Variable rate pass-through	33,079		1,464	(6	)	34,537
Fixed rate non-agency CMOs	15		—	—		15
Fixed rate agency CMOs	284,320		37	(5,271	)	279,086
Variable rate agency CMOs	74,274		249	(137	)	74,386
Total residential mortgage-backed securities	536,099		2,858	(8,231	)	530,726
Total marketable securities available-for-sale	$	800,094	3,453	(11,012	)	792,535

Marketable securities held to maturity at December 31, 2017 are as follows: 

	Amortized cost		Gross unrealized holding gains	Gross unrealized holding losses		Fair value
Residential mortgage-backed securities:
Fixed rate pass-through	$	3,760	140	—		3,900
Variable rate pass-through	2,283		64	—		2,347
Fixed rate agency CMOs	22,906		20	(248	)	22,678
Variable rate agency CMOs	729		13	—		742
Total residential mortgage-backed securities	29,678		237	(248	)	29,667
Total marketable securities held-to-maturity	$	29,678	237	(248	)	29,667

Marketable securities available-for-sale at December 31, 2016 are as follows:

	Amortized cost		Gross unrealized holding gains	Gross unrealized holding losses		Fair value
Debt issued by the U.S. government and agencies:
Due in one year or less	$	6	—	—		6
Debt issued by government sponsored enterprises:
Due in one year or less	74,980		5	(33	)	74,952
Due after one year through five years	220,937		203	(2,504	)	218,636
Due after five years through ten years	585		—	(3	)	582
Due after ten years	—		—	—		—
Equity securities	3,351		1,095	(6	)	4,440
Municipal securities:
Due in one year or less	2,449		7	—		2,456
Due after one year through five years	9,448		105	(21	)	9,532
Due after five years through ten years	11,794		137	(1	)	11,930
Due after ten years	38,141		1,027	(16	)	39,152
Corporate debt issues:
Due after ten years	14,367		2,935	(322	)	16,980
Residential mortgage-backed securities:
Fixed rate pass-through	175,398		1,849	(2,680	)	174,567
Variable rate pass-through	43,587		2,007	(6	)	45,588
Fixed rate non-agency CMOs	100		1	—		101
Fixed rate agency CMOs	165,535		185	(3,455	)	162,265
Variable rate agency CMOs	64,874		306	(167	)	65,013
Total residential mortgage-backed securities	449,494		4,348	(6,308	)	447,534
Total marketable securities available-for-sale	$	825,552	9,862	(9,214	)	826,200

Marketable securities held to maturity at December 31, 2016 are as follows: 

	Amortized cost		Gross unrealized holding gains	Gross unrealized holding losses	Fair value
Municipal securities:
Due after ten years	$	4,808	65	—	4,873
Residential mortgage-backed securities:
Fixed rate pass-through	4,807		217	—	5,024
Variable rate pass-through	2,848		58	—	2,906
Fixed rate agency CMOs	6,674		94	—	6,768
Variable rate agency CMOs	841		14	—	855
Total residential mortgage-backed securities	15,170		383	—	15,553
Total marketable securities held-to-maturity	$	19,978	448	—	20,426

The following table presents information regarding the issuers and the carrying values of our mortgage-backed securities at December 31, 2017 and 2016: 

	December 31,
	2017		2016
Residential mortgage backed securities:
FNMA	$	286,031	210,373
GNMA	37,796		42,221
FHLMC	236,007		202,822
SBA	—		6,608
Other (including non-agency)	570		680
Total residential mortgage-backed securities	$	560,404	462,704

Marketable securities having a carrying value of $161.6 million at December 31, 2017, were pledged under collateral agreements. During the year ended December 31, 2017, we sold marketable securities classified as available-for-sale for $36.8 million, with gross realized gains of $1.8 million and gross realized losses of $626,000. During the year ended December 31, 2016, we sold marketable securities classified as available-for-sale for $2.0 million, with gross realized gains of $268,000 and gross realized losses of $0. During the year ended December 31, 2015, we sold marketable securities classified as available-for-sale for $1.2 million, with gross realized gains of $121,000 and gross realized losses of $67,000. During the years ended December 31, 2017, 2016 and 2015, we did not recognize non-cash credit related other-than-temporary-impairment in our investment portfolio.

The following table shows the fair value and gross unrealized losses on investment securities, aggregated by investment category and length of time that the individual securities have been in a continuous unrealized loss position at December 31, 2017: 

	Less than 12 months				12 months or more			Total
			Unrealized			Unrealized			Unrealized
	Fair value		loss		Fair value	loss		Fair value	loss
Government sponsored enterprises	$	5,006	(7	)	197,695	(2,761	)	202,701	(2,768	)
Corporate debt issues	—		—		—	—		—	—
Equity securities	—		—		544	(6	)	544	(6	)
Municipal securities	4,563		(7	)	—	—		4,563	(7	)
Residential mortgage-backed securities - agency	239,703		(2,522	)	202,344	(5,957	)	442,047	(8,479	)
Total temporarily impaired securities	$	249,272	(2,536	)	400,583	(8,724	)	649,855	(11,260	)

The following table shows the fair value and gross unrealized losses on investment securities, aggregated by investment category and length of time that the individual securities have been in a continuous unrealized loss position at December 31, 2016:

	Less than 12 months				12 months or more			Total
			Unrealized			Unrealized			Unrealized
	Fair value		loss		Fair value	loss		Fair value	loss
Government sponsored enterprises	$	238,003	(2,448	)	9,205	(92	)	247,208	(2,540	)
Corporate debt issues	—		—		2,107	(322	)	2,107	(322	)
Equity securities	—		—		544	(6	)	544	(6	)
Municipal securities	5,621		(37	)	66	(1	)	5,687	(38	)
Residential mortgage-backed securities - agency	213,662		(3,837	)	87,723	(2,471	)	301,385	(6,308	)
Total temporarily impaired securities	$	457,286	(6,322	)	99,645	(2,892	)	556,931	(9,214	)

We perform an assessment to determine whether there have been any events or economic circumstances that indicate a security which has an unrealized loss is impaired other-than-temporarily. The assessment considers many factors including the severity and duration of the impairment; recent events specific to the issuer or industry; and for debt securities, external credit ratings, underlying collateral position and recent downgrades.  For asset backed securities, we evaluate current characteristics of each security such as delinquency and foreclosure levels, credit enhancement and projected losses and coverage.  It is possible that the underlying collateral of these securities will perform worse than current expectations, which may lead to adverse changes in cash flows on these securities and potential future losses.  Events that may trigger material declines in fair values for these securities in the future would be, but are not limited to: deterioration of credit metrics, significantly higher levels of default and severity of loss on the underlying collateral, deteriorating credit enhancement and loss coverage ratios, or further illiquidity.  For debt securities, credit related other-than-temporary impairment is recognized in earnings, while noncredit related other-than-temporary impairment on securities not expected to be sold, or otherwise disposed of, is recognized in other comprehensive income. We assert that we do not have the intent to sell these securities and it is more likely than not that we will not have to sell these securities before a recovery of our cost basis.  For these reasons, we consider the unrealized losses to be temporary impairment losses. There are approximately 173 positions that are temporarily impaired at December 31, 2017. The aggregate carrying amount of cost-method investments, including both held-to-maturity and available-for-sale, at December 31, 2017 was $822.2 million, of which all were evaluated for impairment.

The following table sets forth the categories of investment securities as of December 31, 2017 on which other-than-temporary impairment charges have been recorded in earnings:

	Total				Accumulated
Category	Amortized cost		Fair value	Unrealized gain	impairment charges
Freddie Mac preferred shares	$	1	30	29	119
Trust preferred investments	—		—	—	352
Total	$	1	30	29	471

The table below shows a cumulative roll forward of credit related impairment losses recognized in earnings for debt securities held and not intended to be sold: 

	December 31,
	2017			2016
Beginning balance as of January 1, (1)	$	7,942		8,436
Credit losses on debt securities for which other-than-temporary impairment was not previously recognized	—			—
Credit losses on debt securities for which other-than-temporary impairment was previously recognized	(7,265		)	(494	)
Reduction for securities sold realized during the year	(325		)	—
Additional credit losses on debt securities for which other-than-temporary impairment was previously recognized	—			—
Ending balance as of December 31,	$	352		7,942

(1) The beginning balance represents credit losses included in other-than-temporary impairment charges recognized on debt securities in prior periods.

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Loans Receivable and Allowance for Loan Losses

12 Months Ended

Dec. 31, 2017

Receivables [Abstract]

Loans Receivable and Allowance for Loan Losses

Loans Receivable and Allowance for Loan Losses

Loans receivable at December 31, 2017 and 2016 are summarized in the table below: 

	December 31, 2017							December 31, 2016
	Originated			Acquired		Total		Originated		Acquired		Total
Personal Banking:
Residential mortgage loans (1)	$	2,658,726		113,823		2,772,549		2,565,620		133,511		2,699,131
Home equity loans	1,051,558			258,797		1,310,355		1,042,913		302,457		1,345,370
Consumer finance loans (2)	18,619			—		18,619		48,981		—		48,981
Consumer loans	540,832			97,877		638,709		418,656		163,622		582,278
Total Personal Banking	4,269,735			470,497		4,740,232		4,076,170		599,590		4,675,760
Commercial Banking:
Commercial real estate loans	2,303,179			296,161		2,599,340		2,140,678		372,991		2,513,669
Commercial loans	572,341			60,822		633,163		481,543		75,676		557,219
Total Commercial Banking	2,875,520			356,983		3,232,503		2,622,221		448,667		3,070,888
Total loans receivable, gross	7,145,255			827,480		7,972,735		6,698,391		1,048,257		7,746,648
Deferred loan costs	26,255			1,527		27,782		20,081		2,294		22,375
Allowance for loan losses	(50,572		)	(6,223	)	(56,795	)	(55,293	)	(5,646	)	(60,939	)
Undisbursed loan proceeds:
Residential mortgage loans	(10,067		)	—		(10,067	)	(11,638	)	—		(11,638	)
Commercial real estate loans	(141,967		)	(2,647	)	(144,614	)	(168,595	)	(2,985	)	(171,580	)
Commercial loans	(51,143		)	(1,284	)	(52,427	)	(26,168	)	(2,290	)	(28,458	)
Total loans receivable, net	$	6,917,761		818,853		7,736,614		6,456,778		1,039,630		7,496,408

(1) Includes $3.1 million and $9.6 million of loans held for sale at December 31, 2017 and 2016, respectively.

(2) Represents loans from our consumer finance subsidiary that was closed in 2017 which are no longer being originated.

As of December 31, 2017, 2016 and 2015, we serviced loans for others approximating $887.3 million, $918.9 million and $776.0 million, respectively. These loans serviced for others are not our assets and are not included in our financial statements.

As of December 31, 2017 and 2016, approximately 60% and 62%, respectively, of our loan portfolio was secured by properties located in Pennsylvania. We do not believe we have significant concentrations of credit risk to any one group of borrowers given our underwriting and collateral requirements.

Loans receivable as of December 31, 2017 and 2016 include $2.856 billion and $2.755 billion, respectively, of adjustable rate loans and $5.117 billion and $4.992 billion, respectively, of fixed rate loans.

The following table provides information related to the outstanding principal balance and related carrying value of acquired loans for the dates indicated: 

	December 31,
	2017		2016
Acquired loans evaluated individually for future credit losses:
Outstanding principal balance	$	9,735	16,108
Carrying value	6,875		12,665
Acquired loans evaluated collectively for future credit losses:
Outstanding principal balance	824,205		1,040,378
Carrying value	818,201		1,032,611
Total acquired loans:
Outstanding principal balance	833,940		1,056,486
Carrying value	825,076		1,045,276

The following table provides information related to the changes in the accretable discount, which includes income recognized from contractual cash flows for the dates indicated:

	Total
Balance at December 31, 2015	$	2,019
Accretion	(1,170		)
Net reclassification from nonaccretable yield	1,338
Balance at December 31, 2016	2,187
Accretion	(1,318		)
Net reclassification from nonaccretable yield	671
Balance at December 31, 2017	$	1,540

The following table provides information related to purchased credit impaired loans by portfolio segment and by class of financing receivable at and for the year ended December 31, 2017: 

	Carrying value		Outstanding principal balance	Related impairment reserve	Average recorded investment in impaired loans	Interest income/ accretion recognized
Personal Banking:
Residential mortgage loans	$	1,182	1,880	24	1,251	181
Home equity loans	1,143		2,219	21	1,253	157
Consumer loans	59		160	4	97	51
Total Personal Banking	2,384		4,259	49	2,601	389
Commercial Banking:
Commercial real estate loans	4,388		5,363	39	6,992	914
Commercial loans	103		113	—	177	15
Total Commercial Banking	4,491		5,476	39	7,169	929
Total	$	6,875	9,735	88	9,770	1,318

The following table provides information related to purchased credit impaired loans by portfolio segment and by class of financing receivable at and for the year ended December 31, 2016:

	Carrying value		Outstanding principal balance	Related impairment reserve	Average recorded investment in impaired loans	Interest income/ accretion recognized
Personal Banking:
Residential mortgage loans	$	1,319	2,062	204	1,650	202
Home equity loans	1,363		2,669	8	1,724	185
Consumer loans	136		303	3	201	51
Total Personal Banking	2,818		5,034	215	3,575	438
Commercial Banking:
Commercial real estate loans	9,596		10,809	52	10,942	721
Commercial loans	251		265	—	249	11
Total Commercial Banking	9,847		11,074	52	11,191	732
Total	$	12,665	16,108	267	14,766	1,170

The following table provides information related to changes in the allowance for losses on loans receivable for the year ended December 31, 2017: 

	Balance December 31, 2017		Provision		Charge-offs		Recoveries	Balance December 31, 2016
Originated loans
Personal Banking:
Residential mortgage loans	$	3,824	(390	)	(834	)	392	4,656
Home equity loans	4,072		1,474		(1,080	)	192	3,486
Consumer finance loans	3,968		8,444		(8,369	)	448	3,445
Consumer loans	8,475		13,601		(11,128	)	1,473	4,529
Total Personal Banking	20,339		23,129		(21,411	)	2,505	16,116
Commercial Banking:
Commercial real estate loans	19,911		(3,663	)	(1,344	)	1,251	23,667
Commercial loans	10,322		(4,777	)	(2,462	)	2,051	15,510
Total Commercial Banking	30,233		(8,440	)	(3,806	)	3,302	39,177
Total originated loans	50,572		14,689		(25,217	)	5,807	55,293
Acquired loans
Personal Banking:
Residential mortgage loans	131		185		(205	)	80	71
Home equity loans	762		503		(1,179	)	391	1,047
Consumer loans	890		765		(795	)	267	653
Total Personal Banking	1,783		1,453		(2,179	)	738	1,771
Commercial Banking:
Commercial real estate loans	3,549		2,631		(2,830	)	740	3,008
Commercial loans	891		978		(1,028	)	74	867
Total Commercial Banking	4,440		3,609		(3,858	)	814	3,875
Total acquired loans	6,223		5,062		(6,037	)	1,552	5,646
Total	$	56,795	19,751		(31,254	)	7,359	60,939

The following table provides information related to changes in the allowance for losses on loans receivable for the year ended December 31, 2016: 

	Balance December 31, 2016		Provision		Charge-offs		Recoveries	Balance December 31, 2015
Originated loans
Personal Banking:
Residential mortgage loans	$	4,656	2,906		(3,228	)	286	4,692
Home equity loans	3,486		293		(1,090	)	342	3,941
Consumer finance loans	3,445		3,117		(3,323	)	376	3,275
Consumer loans	4,529		5,935		(6,902	)	1,283	4,213
Total Personal Banking	16,116		12,251		(14,543	)	2,287	16,121
Commercial Banking:
Commercial real estate loans	23,667		(9,819	)	(2,403	)	3,541	32,348
Commercial loans	15,510		4,834		(4,165	)	2,340	12,501
Total Commercial Banking	39,177		(4,985	)	(6,568	)	5,881	44,849
Total originated loans	55,293		7,266		(21,111	)	8,168	60,970
Acquired loans
Personal Banking:
Residential mortgage loans	71		146		(252	)	159	18
Home equity loans	1,047		2,065		(1,449	)	330	101
Consumer loans	653		1,072		(680	)	151	110
Total Personal Banking	1,771		3,283		(2,381	)	640	229
Commercial Banking:
Commercial real estate loans	3,008		2,116		(1,337	)	790	1,439
Commercial loans	867		877		(52	)	8	34
Total Commercial Banking	3,875		2,993		(1,389	)	798	1,473
Total acquired loans	5,646		6,276		(3,770	)	1,438	1,702
Total	$	60,939	13,542		(24,881	)	9,606	62,672

The following table provides information related to changes in the allowance for losses on loans receivable for the year ended December 31, 2015: 

	Balance December 31, 2015		Provision		Charge-offs		Recoveries	Balance December 31, 2014
Originated loans
Personal Banking:
Residential mortgage loans	$	4,692	(96	)	(1,057	)	264	5,581
Home equity loans	3,941		693		(1,716	)	414	4,550
Consumer finance loans	3,275		2,853		(3,056	)	404	3,074
Consumer loans	4,213		5,132		(5,017	)	1,054	3,044
Total Personal Banking	16,121		8,582		(10,846	)	2,136	16,249
Commercial Banking:
Commercial real estate loans	32,348		540		(5,741	)	4,160	33,389
Commercial loans	12,501		2,768		(7,814	)	4,032	13,515
Total Commercial Banking	44,849		3,308		(13,555	)	8,192	46,904
Unallocated	—		(4,365	)	—		—	4,365
Total originated loans	60,970		7,525		(24,401	)	10,328	67,518
Acquired loans
Personal Banking:
Residential mortgage loans	18		47		(69	)	40	—
Home equity loans	101		247		(708	)	562	—
Other consumer loans	110		188		(201	)	123	—
Total Personal Banking	229		482		(978	)	725	—
Business Banking:
Commercial real estate loans	1,439		1,545		(585	)	479	—
Commercial loans	34		160		(369	)	243	—
Total Business Banking	1,473		1,705		(954	)	722	—
Total acquired loans	1,702		2,187		(1,932	)	1,447	—
Total	$	62,672	9,712		(26,333	)	11,775	67,518

While we use available information to provide for losses, future additions to the allowance may be necessary based on changes in economic conditions. In addition, various regulatory agencies, as an integral part of their examination process, periodically review our allowance for loan losses. Such agencies may require us to recognize additions to the allowance based on their judgments about information available to them at the time of their examination. Management believes, to the best of their knowledge, that all known losses as of the balance sheet dates have been recorded.

The following table provides information related to the loan portfolio by portfolio segment and by class of financing receivable as of December 31, 2017:

	Recorded  investment in  loans  receivable		Allowance for  loan losses	Recorded  investment in  loans on  nonaccrual  (1)	Recorded  investment in  loans 90 days or more past maturity and  still accruing	TDRs  (1)	Allowance  for loan losses related to  TDRs	Additional  commitments  to customers  with loans  classified as  TDRs
Personal Banking:
Residential mortgage loans	$	2,776,203	3,955	14,791	—	8,000	815	—
Home equity loans	1,310,355		4,834	8,907	120	1,716	462	4
Consumer finance loans	18,619		3,968	199	3	—	—	—
Consumer loans	652,770		9,365	4,673	379	—	—	—
Total Personal Banking	4,757,947		22,122	28,570	502	9,716	1,277	4
Commercial Banking:
Commercial real estate loans	2,454,726		23,460	28,473	—	15,691	1,125	235
Commercial loans	580,736		11,213	7,412	—	6,697	742	8
Total Commercial Banking	3,035,462		34,673	35,885	—	22,388	1,867	243
Total	$	7,793,409	56,795	64,455	502	32,104	3,144	247

(1) Includes $12.3 million of nonaccrual TDRs.

The following table provides information related to the loan portfolio by portfolio segment and by class of financing receivable as of December 31, 2016: 

	Recorded  investment in  loans  receivable		Allowance for  loan losses	Recorded  investment in  loans on  nonaccrual  (1)	Recorded  investment in  loans 90 days or more past maturity and  still accruing	TDRs  (1)	Allowance  for loan losses related to  TDRs	Additional  commitments  to customers  with loans  classified as  TDRs
Personal Banking:
Residential mortgage loans	$	2,698,166	4,727	18,264	—	7,299	708	—
Home equity loans	1,345,370		4,533	7,865	—	1,813	450	4
Consumer finance loans	48,981		3,445	743	—	—	—	—
Consumer loans	593,980		5,182	4,366	85	—	—	—
Total Personal Banking	4,686,497		17,887	31,238	85	9,112	1,158	4
Commercial Banking:
Commercial real estate loans	2,342,089		26,675	38,724	564	24,483	2,072	417
Commercial loans	528,761		16,377	9,574	—	9,331	1,360	17
Total Commercial Banking	2,870,850		43,052	48,298	564	33,814	3,432	434
Total	$	7,557,347	60,939	79,536	649	42,926	4,590	438

(1) Includes $16.3 million of nonaccrual TDRs.

A loan is considered to be impaired, when, based on current information and events it is probable that we will be unable to collect all amounts due according to the contractual terms of the loan agreement including both contractual principal and interest payments.  This includes non-accrual loans, loans more than 90 days delinquent and still accruing interest, loans for which we perform an impairment review and TDRs. Impairment is measured using one of three methods: (1) the present value of expected future cash flows discounted at the loan’s effective interest rate; (2) the loan’s observable market price; or (3) the fair value of collateral if the loan is collateral dependent, less costs of sale or disposition.  If the measure of the impaired loan is less than the recorded investment in the loan, a specific allowance is allocated for the impairment.

The following table provides information related to the composition of impaired loans by portfolio segment and by class of financing receivable at and for the year ended December 31, 2017: 

	Nonaccrual  loans 90 or  more days  delinquent		Nonaccrual  loans less  than 90 days  delinquent	Loans less  than 90 days  delinquent  reviewed for  impairment	TDRs less  than 90 days  delinquent  not included  elsewhere	Total  impaired  loans	Average  recorded  investment  in impaired  loans	Interest  income  recognized  on impaired  loans
Personal Banking:
Residential mortgage loans	$	13,509	1,282	—	6,814	21,605	21,531	892
Home equity loans	7,251		1,656	—	1,449	10,356	9,150	452
Consumer finance loans	199		—	—	—	199	379	20
Consumer loans	3,617		1,056	—	—	4,673	4,042	188
Total Personal Banking	24,576		3,994	—	8,263	36,833	35,102	1,552
Commercial Banking:
Commercial real estate loans	15,361		13,112	4,431	4,123	37,027	49,981	1,758
Commercial loans	3,140		4,272	906	2,447	10,765	12,110	672
Total Commercial Banking	18,501		17,384	5,337	6,570	47,792	62,091	2,430
Total	$	43,077	21,378	5,337	14,833	84,625	97,193	3,982

The following table provides information related to the composition of impaired loans by portfolio segment and by class of financing receivable at and for the year ended December 31, 2016: 

	Nonaccrual  loans 90 or  more days  delinquent		Nonaccrual  loans less  than 90 days  delinquent	Loans less  than 90 days  delinquent  reviewed for  impairment	TDRs less  than 90 days  delinquent  not included  elsewhere	Total  impaired  loans	Average  recorded  investment  in impaired  loans	Interest  income  recognized  on impaired  loans
Personal Banking:
Residential mortgage loans	$	13,169	5,095	—	5,929	24,193	24,483	1,079
Home equity loans	5,552		2,313	—	1,439	9,304	9,234	496
Consumer finance loans	743		—	—	—	743	772	35
Consumer loans	3,080		1,286	—	—	4,366	2,931	131
Total Personal Banking	22,544		8,694	—	7,368	38,606	37,420	1,741
Commercial Banking:
Commercial real estate loans	19,264		19,460	3,622	11,582	53,928	64,350	2,864
Commercial loans	3,373		6,201	2,837	3,116	15,527	16,905	991
Total Commercial Banking	22,637		25,661	6,459	14,698	69,455	81,255	3,855
Total	$	45,181	34,355	6,459	22,066	108,061	118,675	5,596

The following table provides information related to the composition of impaired loans by portfolio segment and by class of financing receivable at and for the year ended December 31, 2015:

	Nonaccrual  loans 90 or  more days  delinquent		Nonaccrual  loans less  than 90 days  delinquent	Loans less  than 90 days  delinquent  reviewed for  impairment	TDRs less  than 90 days  delinquent  not included  elsewhere	Total  impaired  loans	Average  recorded  investment  in impaired  loans	Interest  income  recognized  on impaired  loans
Personal Banking:
Residential mortgage loans	$	15,810	3,962	—	5,086	24,858	24,554	944
Home equity loans	5,650		1,872	—	1,847	9,369	9,644	497
Consumer finance loans	792		—	—	—	792	768	29
Consumer loans	2,108		552	—	—	2,660	2,209	72
Total Personal Banking	24,360		6,386	—	6,933	37,679	37,175	1,542
Commercial Banking:
Commercial real estate loans	16,449		16,972	16,121	16,467	66,009	77,166	3,226
Commercial loans	2,459		5,036	2,014	4,654	14,163	16,187	694
Total Commercial Banking	18,908		22,008	18,135	21,121	80,172	93,353	3,920
Total	$	43,268	28,394	18,135	28,054	117,851	130,528	5,462

The following table provides information related to the evaluation of impaired loans by portfolio segment and by class of financing receivable as of and for the year ended December 31, 2017:

	Loans collectively evaluated for impairment		Loans individually evaluated for impairment	Loans individually evaluated for impairment for which there is a related impairment reserve	Related impairment reserve	Loans individually evaluated for impairment for which there is no related reserve
Personal Banking:
Residential mortgage loans	$	2,767,635	8,568	8,568	816	—
Home equity loans	1,308,639		1,716	1,716	461	—
Consumer finance loans	18,619		—	—	—	—
Consumer loans	652,685		85	85	25	—
Total Personal Banking	4,747,578		10,369	10,369	1,302	—
Commercial Banking:
Commercial real estate loans	2,433,755		20,971	18,470	1,859	2,501
Commercial loans	571,412		9,324	8,572	829	752
Total Commercial Banking	3,005,167		30,295	27,042	2,688	3,253
Total	$	7,752,745	40,664	37,411	3,990	3,253

The following table provides information related to the evaluation of impaired loans by portfolio segment and by class of financing receivable as of and for the year ended December 31, 2016: 

	Loans collectively evaluated for impairment		Loans individually evaluated for impairment	Loans individually evaluated for impairment for which there is a related impairment reserve	Related impairment reserve	Loans individually evaluated for impairment for which there is no related reserve
Personal Banking:
Residential mortgage loans	$	2,689,886	8,280	8,280	709	—
Home equity loans	1,343,556		1,814	1,814	450	—
Consumer finance loans	48,981		—	—	—	—
Consumer loans	593,854		126	126	29	—
Total Personal Banking	4,676,277		10,220	10,220	1,188	—
Commercial Banking:
Commercial real estate loans	2,309,186		32,903	27,594	3,545	5,309
Commercial loans	518,449		10,312	10,242	1,390	70
Total Commercial Banking	2,827,635		43,215	37,836	4,935	5,379
Total	$	7,503,912	53,435	48,056	6,123	5,379

Our loan portfolios include certain loans that have been modified in a TDR, where economic concessions have been granted to borrowers who have experienced financial difficulties. These concessions typically result from our loss mitigation activities and could include: extending the note’s maturity date, permitting interest only payments, reducing the interest rate to a rate lower than current market rates for new debt with similar risk, reducing the principal payment, principal forbearance or other actions.  These concessions are applicable to all loan segments and classes. Certain TDRs are classified as nonperforming at the time of restructuring and typically are returned to performing status after considering the borrower’s sustained repayment performance for a reasonable period of at least six consecutive months.

When we modify loans in a TDR, we evaluate any possible impairment similar to other impaired loans based on the present value of expected future cash flows, discounted at the contractual interest rate of the original loan agreement, the loan’s observable market price or the current fair value of the collateral, less selling costs, for collateral dependent loans.  If we determine that the value of the modified loan is less than the recorded investment in the loan (net of previous charge-offs, deferred loan fees or costs and unamortized premium or discount), impairment is recognized through an allowance estimate or a charge-off to the allowance.  In periods subsequent to modification, we evaluate all TDRs, including those that have payment defaults, for possible impairment, using ASC 310-10. As a result, loans modified in a TDR may have the financial effect of increasing the specific allowance associated with the loan.

Loans modified in a TDR are closely monitored for delinquency as an early indicator of possible future default.  If loans modified in a TDR subsequently default, we evaluate the loan for possible further impairment. The allowance may be increased, adjustments may be made in the allocation of the allowance, partial charge-offs may be taken to further write-down the carrying value of the loan, or the loan may be charged-off completely.

The following table provides a roll forward of troubled debt restructurings for the periods indicated: 

	For the years ended December 31,
	2017				2016
	Number of contracts	Amount			Number of contracts	Amount
Beginning TDR balance:	225	$	42,926		227	$	51,115
New TDRs	24	5,450			34	6,365
Re-modified TDRs	5	2,099			7	3,414
Net paydowns		(11,538		)		(9,037		)
Charge-offs:
Residential mortgage loans	1	(77		)	—	—
Home equity loans	1	(48		)	—	—
Commercial real estate loans	2	(2,498		)	1	(120		)
Commercial loans	6	(259		)	2	(142		)
Paid-off loans:
Residential mortgage loans	—	—			4	(151		)
Home equity loans	8	(62		)	7	(534		)
Commercial real estate loans	15	(1,633		)	12	(6,170		)
Commercial loans	11	(2,256		)	10	(1,814		)
Ending TDR balance:	205	$	32,104		225	$	42,926
Accruing TDRs		$	19,819			$	26,580
Non-accrual TDRs		12,285				16,346

     The following table provides information related to troubled debt restructurings (including re-modified TDRs) by portfolio segment and by class of financing receivable during the year ended December 31, 2017: 

	Number of contracts	Recorded investment at the time of modification		Current recorded investment	Current allowance
Troubled debt restructurings:
Personal Banking:
Residential mortgage loans	8	$	1,604	1,555	158
Home equity loans	3	152		148	40
Total Personal Banking	11	1,756		1,703	198
Commercial Banking:
Commercial real estate loans	11	5,232		4,889	364
Commercial loans	7	561		526	37
Total Commercial Banking	18	5,793		5,415	401
Total	29	$	7,549	7,118	599

	Number of contracts	Recorded investment at the time of modification		Current recorded investment	Current allowance
Troubled debt restructurings modified within the previous twelve months that have subsequently defaulted:
Personal Banking:
Residential mortgage loans	1	$	336	334	34
Home equity loans	—	—		—	—
Total Personal Banking	1	336		334	34
Commercial Banking:
Commercial real estate loans	2	438		426	35
Commercial loans	—	—		—	—
Total Commercial Banking	2	438		426	35
Total	3	$	774	760	69

The following table provides information related to troubled debt restructurings (including re-modified TDRs) by portfolio segment and by class of financing receivable during the year ended December 31, 2016: 

	Number of contracts	Recorded investment at the time of modification		Current recorded investment	Current allowance
Troubled debt restructurings:
Personal Banking:
Residential mortgage loans	7	$	1,199	1,177	114
Home equity loans	7	475		471	110
Total Personal Banking	14	1,674		1,648	224
Commercial Banking:
Commercial real estate loans	7	3,729		3,643	485
Commercial loans	20	4,376		2,218	508
Total Commercial Banking	27	8,105		5,861	993
Total	41	$	9,779	7,509	1,217

	Number of contracts	Recorded investment at the time of modification		Current recorded investment	Current allowance
Troubled debt restructurings modified within the previous twelve months that have subsequently defaulted:
Personal Banking:
Residential mortgage loans	—	$	—	—	—
Home equity loans	—	—		—	—
Total Personal Banking	—	—		—	—
Commercial Banking:
Commercial real estate loans	1	429		425	31
Commercial loans	3	533		533	533
Total Business Banking	4	962		958	564
Total	4	$	962	958	564

The following table provides information related to troubled debt restructurings (including re-modified TDRs) by portfolio segment and by class of financing receivable during the year ended December 31, 2015:

	Number of contracts	Recorded investment at the time of modification		Current recorded investment	Current allowance
Troubled debt restructurings:
Personal Banking:
Residential mortgage loans	6	$	364	357	21
Home equity loans	3	101		97	21
Total Personal Banking	9	465		454	42
Commercial Banking:
Commercial real estate loans	11	12,258		12,243	1,047
Commercial loans	9	2,200		2,184	156
Total Commercial Banking	20	14,458		14,427	1,203
Total	29	$	14,923	14,881	1,245

At December 31, 2015, no TDRs that were modified in the previous twelve months had subsequently defaulted.

The following table provides information for troubled debt restructurings (including re-modified TDRs) by type of modification, by portfolio segment and class of financing receivable during the year ended December 31, 2017: 

	Number of	Type of modification
	contracts	Rate		Payment	Maturity date	Other	Total
Personal Banking:
Residential mortgage loans	8	$	359	—	8	1,188	1,555
Home equity loans	3	118		—	—	30	148
Total Personal Banking	11	477		—	8	1,218	1,703
Commercial Banking:
Commercial real estate loans	11	—		2,688	2,201	—	4,889
Commercial loans	7	—		—	422	104	526
Total Commercial Banking	18	—		2,688	2,623	104	5,415
Total	29	$	477	2,688	2,631	1,322	7,118

The following table provides information for troubled debt restructurings (including re-modified TDRs) by type of modification, by portfolio segment and class of financing receivable during the year ended December 31, 2016: 

	Number of	Type of modification
	contracts	Rate		Payment	Maturity date	Other	Total
Personal Banking:
Residential mortgage loans	7	$	358	—	771	48	1,177
Home equity loans	7	120		—	3	348	471
Total Personal Banking	14	478		—	774	396	1,648
Commercial Banking:
Commercial real estate loans	7	—		425	1,980	1,238	3,643
Commercial loans	20	—		328	1,178	712	2,218
Total Commercial Banking	27	—		753	3,158	1,950	5,861
Total	41	$	478	753	3,932	2,346	7,509

The following table provides information related to re-modified troubled debt restructurings by portfolio segment and by class of financing receivable for the year ended December 31, 2017: 

	Number of  re-modified	Type of re-modification
	TDRs	Rate		Payment	Maturity date	Other	Total
Personal Banking:
Residential mortgage loans	2	$	250	—	—	429	679
Home equity loans	1	12		—	—	—	12
Total Personal Banking	3	262		—	—	429	691
Commercial Banking:
Commercial real estate loans	1	—		—	1,299	—	1,299
Commercial loans	1	—		—	83	—	83
Total Commercial Banking	2	—		—	1,382	—	1,382
Total	5	$	262	—	1,382	429	2,073

The following table provides information related to re-modified troubled debt restructurings by portfolio segment and by class of financing receivable for the year ended December 31, 2016: 

	Number of  re-modified	Type of re-modification
	TDRs	Rate		Payment	Maturity date	Other	Total
Personal Banking:
Residential mortgage loans	—	$	—	—	—	—	—
Home equity loans	1	—		—	—	192	192
Total Personal Banking	1	—		—	—	192	192
Commercial Banking:
Commercial real estate loans	2	—		—	1,329	173	1,502
Commercial loans	4	—		502	—	—	502
Total Commercial Banking	6	—		502	1,329	173	2,004
Total	7	$	—	502	1,329	365	2,196

The following table provides information related to loan delinquencies as of December 31, 2017:

	30-59 days delinquent		60-89 days delinquent	90 days or greater delinquent	Total delinquency	Current	Total loans	90 days or greater delinquent and accruing (1)
Originated loans
Personal Banking:
Residential mortgage loans	$	23,786	6,030	12,613	42,429	2,619,951	2,662,380	—
Home equity loans	6,094		2,333	6,043	14,470	1,037,088	1,051,558	—
Consumer finance loans	2,128		1,113	199	3,440	15,179	18,619	—
Consumer loans	9,762		2,834	3,274	15,870	537,496	553,366	—
Total Personal Banking	41,770		12,310	22,129	76,209	4,209,714	4,285,923	—
Commercial Banking:
Commercial real estate loans	5,520		2,133	10,629	18,282	2,142,930	2,161,212	—
Commercial loans	1,469		204	2,806	4,479	516,719	521,198	—
Total Commercial Banking	6,989		2,337	13,435	22,761	2,659,649	2,682,410	—
Total originated loans	48,759		14,647	35,564	98,970	6,869,363	6,968,333	—
Acquired loans
Personal Banking:
Residential mortgage loans	1,998		205	1,277	3,480	110,343	113,823	381
Home equity loans	1,367		538	1,306	3,211	255,586	258,797	98
Consumer loans	1,150		517	353	2,020	97,384	99,404	10
Total Personal Banking	4,515		1,260	2,936	8,711	463,313	472,024	489
Commercial Banking:
Commercial real estate loans	2,795		406	5,655	8,856	284,658	293,514	923
Commercial loans	396		237	334	967	58,571	59,538	—
Total Commercial Banking	3,191		643	5,989	9,823	343,229	353,052	923
Total acquired loans	7,706		1,903	8,925	18,534	806,542	825,076	1,412
Total loans	$	56,465	16,550	44,489	117,504	7,675,905	7,793,409	1,412

 (1) Represents acquired loans that were originally recorded at fair value upon acquisition. These loans are considered to be accruing because we can reasonably estimate future cash flows and expect to fully collect the carrying value of these loans. Therefore, we are accreting the difference between the carrying value and their expected cash flows into interest income.

The following table provides information related to loan delinquencies as of December 31, 2016: 

	30-59 days delinquent		60-89 days delinquent	90 days or greater delinquent	Total delinquency	Current	Total loans	90 days or greater delinquent and accruing (1)
Originated loans
Personal Banking:
Residential mortgage loans	$	26,212	5,806	12,792	44,810	2,519,845	2,564,655	—
Home equity loans	5,785		1,305	4,783	11,873	1,031,040	1,042,913	—
Consumer finance loans	1,255		766	743	2,764	46,217	48,981
Consumer loans	7,343		2,438	2,775	12,556	415,508	428,064	—
Total Personal Banking	40,595		10,315	21,093	72,003	4,012,610	4,084,613	—
Commercial Banking:
Commercial real estate loans	7,674		3,674	16,508	27,856	1,944,227	1,972,083	—
Commercial loans	1,067		1,957	3,107	6,131	449,244	455,375	—
Total Commercial Banking	8,741		5,631	19,615	33,987	2,393,471	2,427,458	—
Total originated loans	49,336		15,946	40,708	105,990	6,406,081	6,512,071	—
Acquired loans
Personal Banking:
Residential mortgage loans	1,174		421	829	2,424	131,087	133,511	452
Home equity loans	1,020		258	973	2,251	300,206	302,457	204
Consumer loans	1,270		405	320	1,995	163,921	165,916	15
Total Personal Banking	3,464		1,084	2,122	6,670	595,214	601,884	671
Commercial Banking:
Commercial real estate loans	2,703		821	4,762	8,286	361,720	370,006	2,006
Commercial loans	111		124	413	648	72,738	73,386	147
Total Commercial Banking	2,814		945	5,175	8,934	434,458	443,392	2,153
Total acquired loans	6,278		2,029	7,297	15,604	1,029,672	1,045,276	2,824
Total loans	$	55,614	17,975	48,005	121,594	7,435,753	7,557,347	2,824

(1) Represents acquired loans that were originally recorded at fair value upon acquisition. These loans are considered to be accruing because we can reasonably estimate future cash flows and expect to fully collect the carrying value of these loans. Therefore, we are accreting the difference between the carrying value and their expected cash flows into interest income.

Credit quality indicators:  We categorize loans into risk categories based on relevant information about the ability of borrowers to service their debt such as: current financial information, historical payment experience, credit documentation, public information, and current economic trends, among other factors. We analyze business loans individually by classifying the loans by credit risk.  Relationships greater than or equal to $1.0 million classified as special mention or substandard are reviewed quarterly for further deterioration or improvement to determine if the loan is appropriately classified.  We use the following definitions for risk ratings other than pass:

Special mention — Loans designated as special mention have specific, well-defined risk issues, which create a high level of uncertainty regarding the long-term viability of the business. Loans in this class are considered to have high-risk characteristics.  A special mention loan exhibits material negative financial trends due to company-specific or systemic conditions.  If these potential weaknesses are not mitigated, they threaten the borrower’s capacity to meet its debt obligations.  Special mention loans still demonstrate sufficient financial flexibility to react to and positively address the root cause of the adverse financial trends without significant deviations from their current business strategy. Their potential weaknesses deserve our close attention and warrant enhanced monitoring.

Substandard — Loans classified as substandard are inadequately protected by the current net worth and payment capacity of the obligor or of the collateral pledged, if any.  Loans so classified have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt.  They are characterized by the distinct possibility that we will sustain some loss if the deficiencies are not corrected.

Doubtful — Loans classified as doubtful have all the weaknesses inherent in those classified as substandard.   In addition, those weaknesses make collection or liquidation in full highly questionable and improbable.   A loan classified as doubtful exhibits discernible loss potential, but a complete loss seems very unlikely.  The possibility of a loss on a doubtful loan is high, but because of certain important and reasonably specific pending factors that may strengthen the loan, its classification as an estimated loss is deferred until a more exact status can be determined.

Loss — Loans classified as loss are considered uncollectible and of such value that the continuance as a loan is not warranted.  A loss classification does not mean that the loan has no recovery or salvage value; instead, it means that it is not practical or desirable to defer writing off all or a portion of a basically worthless loan even though partial recovery may be affected in the future.

The following table sets forth information about credit quality indicators as of December 31, 2017: 

	Pass		Special mention	Substandard	Doubtful	Loss	Total
Originated loans
Personal Banking:
Residential mortgage loans	$	2,645,475	—	16,905	—	—	2,662,380
Home equity loans	1,042,965		—	8,593	—	—	1,051,558
Consumer finance loans	18,420		—	199	—	—	18,619
Consumer loans	549,550		—	3,816	—	—	553,366
Total Personal Banking	4,256,410		—	29,513	—	—	4,285,923
Commercial Banking:
Commercial real estate loans	1,964,565		78,699	117,948	—	—	2,161,212
Commercial loans	461,962		15,510	43,726	—	—	521,198
Total Commercial Banking	2,426,527		94,209	161,674	—	—	2,682,410
Total originated loans	6,682,937		94,209	191,187	—	—	6,968,333
Acquired loans
Personal Banking:
Residential mortgage loans	112,990		—	833	—	—	113,823
Home equity loans	257,312		—	1,485	—	—	258,797
Consumer loans	98,659		—	745	—	—	99,404
Total Personal Banking	468,961		—	3,063	—	—	472,024
Commercial Banking:
Commercial real estate loans	251,761		4,838	36,915	—	—	293,514
Commercial loans	49,073		3,787	6,678	—	—	59,538
Total Commercial Banking	300,834		8,625	43,593	—	—	353,052
Total acquired loans	769,795		8,625	46,656	—	—	825,076
Total loans	$	7,452,732	102,834	237,843	—	—	7,793,409

The following table sets forth information about credit quality indicators as of December 31, 2016: 

	Pass		Special mention	Substandard	Doubtful	Loss	Total
Originated loans
Personal Banking:
Residential mortgage loans	$	2,548,390	—	16,265	—	—	2,564,655
Home equity loans	1,035,496		—	7,417	—	—	1,042,913
Consumer finance loans	48,238		—	743	—	—	48,981
Consumer loans	425,712		—	2,352	—	—	428,064
Total Personal Banking	4,057,836		—	26,777	—	—	4,084,613
Commercial Banking:
Commercial real estate loans	1,821,548		36,321	114,214	—	—	1,972,083
Commercial loans	401,866		15,203	38,306	—	—	455,375
Total Commercial Banking	2,223,414		51,524	152,520	—	—	2,427,458
Total originated loans	6,281,250		51,524	179,297	—	—	6,512,071
Acquired loans
Personal Banking:
Residential mortgage loans	131,717		—	1,794	—	—	133,511
Home equity loans	300,100		—	2,357	—	—	302,457
Consumer loans	165,094		—	822	—	—	165,916
Total Personal Banking	596,911		—	4,973	—	—	601,884
Commercial Banking:
Commercial real estate loans	331,780		7,403	30,823	—	—	370,006
Commercial loans	68,127		1,989	3,270	—	—	73,386
Total Commercial Banking	399,907		9,392	34,093	—	—	443,392
Total acquired loans	996,818		9,392	39,066	—	—	1,045,276
Total loans	$	7,278,068	60,916	218,363	—	—	7,557,347

Our exposure to credit loss in the event of nonperformance by the other party to off-balance-sheet financial instruments is represented by the contract amount of the financial instrument. We use the same credit policies in making commitments for off-balance-sheet financial instruments as we do for on-balance-sheet instruments. Financial instruments with off-balance-sheet risk as of December 31, 2017 and 2016 are presented in the following table: 

	December 31,
	2017		2016
Loan commitments	$	181,058	109,032
Undisbursed lines of credit	872,700		843,457
Standby letters of credit	25,718		25,039
Total	$	1,079,476	977,528

Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. We evaluate each customer’s creditworthiness on a case-by-case basis. The amount of collateral we obtain upon extension of credit is based on management’s credit evaluation of the counterparty. Collateral held varies but generally may include cash, marketable securities, real estate and other property.

Outstanding loan commitments at December 31, 2017, for fixed rate loans, were $40.7 million. The interest rates on these commitments approximate market rates at December 31, 2017. Outstanding loan commitments at December 31, 2017 for adjustable rate loans were $140.4 million.  The fair values of these commitments are affected by fluctuations in market rates of interest.

We issue standby letters of credit in the normal course of business. Standby letters of credit are conditional commitments issued to guarantee the performance of a customer to a third party. Standby letters of credit generally are contingent upon the failure of the customer to perform according to the terms of the underlying contract with the third party. We are required to perform under a standby letter of credit when drawn upon by the guaranteed third party in the case of nonperformance by our customer. The credit risk associated with standby letters of credit is essentially the same as that involved in extending loans to customers and is subject to normal credit policies. Collateral may be obtained based on management’s credit assessment of the customer. As of December 31, 2017, the maximum potential amount of future payments we could be required to make under these standby letters of credit is $25.7 million, of which $17.2 million is fully collateralized. A liability (which represents deferred income) of $169,000 and $178,000 has been recognized for the obligations as of December 31, 2017 and 2016, respectively, and there are no recourse provisions that would enable us to recover any amounts from third parties.

Mortgage servicing assets are recognized as separate assets when servicing rights are created through loan originations and the underlying loan is sold. Upon sale, the mortgage servicing right (“MSR”) is established, which represents the then-fair value of future net cash flows expected to be realized for performing the servicing activities. The fair value of the MSRs are estimated by calculating the present value of estimated future net servicing cash flows, taking into consideration actual and expected mortgage loan prepayment rates, discount rates, servicing costs and other economic factors, which are determined based on current market conditions. In determining the fair value of the MSRs, stochastic modeling is performed using variables such as the forward yield curve, prepayment rates, annual service cost, average life expectancy and option adjusted spreads. MSRs are amortized against mortgage banking income in proportion to, and over the period of, the estimated future net servicing income of the underlying mortgage loans. MSRs are recorded in other assets on the consolidated statements of financial condition.

Capitalized MSRs are evaluated quarterly for impairment based on the estimated fair value of those rights. The MSRs are stratified by certain risk characteristics, primarily loan term and note rate. If impairment exists within a risk stratification tranche, a valuation allowance is established through a charge to income equal to the amount by which the carrying value exceeds the fair value. If it is later determined all or a portion of the temporary impairment no longer exists for a particular tranche, the valuation allowance is reduced or eliminated. We do not directly hedge against realized or potential future impairment losses on our MSRs.

The following table shows changes in MSRs as of and for the years ended December 31, 2017 and 2016:

	Servicing rights			Valuation allowance		Net carrying value and fair value
Balance at December 31, 2015	$	1,666		—		1,666
Additions	3,523			(4	)	3,519
Amortization	(950		)	—		(950	)
Balance at December 31, 2016	4,239			(4	)	4,235
Additions	833			4		837
Amortization	(1,549		)	—		(1,549	)
Balance at December 31, 2017	$	3,523		—		3,523

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Accrued Interest Receivable

12 Months Ended

Dec. 31, 2017

Interest Receivable and Other Assets [Abstract]

Accrued Interest Receivable

Accrued Interest Receivable

Accrued interest receivable as of December 31, 2017 and 2016 is presented in the following table: 

	December 31,
	2017		2016
Investment securities	$	1,260	1,613
Mortgage-backed securities	1,107		910
Loans receivable	20,985		19,176
	$	23,352	21,699

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Federal Home Loan Bank Stock

12 Months Ended

Dec. 31, 2017

Federal Home Loan Banks [Abstract]

Federal Home Loan Bank Stock

Federal Home Loan Bank Stock

Northwest Bank is a member of the Federal Home Loan Bank system.  As a member, we are required to maintain an investment in the capital stock of the FHLB of Pittsburgh in accordance with their 2015 Capital Plan, at cost, in two subclasses based on the following ranges:  Membership stock purchase (Subclass B-1) ranging from 0.05% to 1.0% of the member asset value as defined by the FHLB, currently at 0.10%; and Activity-based stock purchase (Subclass B-2) ranging from 2.0% to 6.0% of outstanding advances, currently at 4.0%; 0.0% to 6.0% of acquired member assets, currently at 4.0%; 0.0% to 4.0% of certain letters of credit, currently at 0.75%; and 0.0% to 6.0% of outstanding advance commitments settling more than 30 days after trade, currently at 0.0%. We received dividends on capital stock during the years ended December 31, 2017 and 2016 of $250,000 and $1.4 million, respectively.  Future dividends may be established at different rates for the two subclasses of capital stock.

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Premises and Equipment

12 Months Ended

Dec. 31, 2017

Property, Plant and Equipment [Abstract]

Premises and Equipment

Premises and Equipment

Premises and equipment at December 31, 2017 and 2016 are summarized by major classification in the following table:

	December 31,
	2017			2016
Land and land improvements	$	21,563		21,229
Office buildings and improvements	150,056			156,162
Furniture, fixtures and equipment	125,347			120,391
Leasehold improvements	19,909			19,859
Total, at cost	316,875			317,641
Less accumulated depreciation and amortization	(164,931		)	(156,456	)
Premises and equipment, net	$	151,944		161,185

Depreciation and amortization expense for the years ended December 31, 2017, 2016 and 2015 was $12.4 million, $13.7 million and $13.3 million, respectively.

Premises used by certain of our offices are occupied under formal operating lease arrangements. The leases expire on various dates through 2027. Minimum annual rentals by fiscal year are summarized in the following table: 

2018	$	4,395
2019	3,300
2020	2,726
2021	2,232
2022	1,620
Thereafter	7,413
Total	$	21,686

Rental expense for the years ended December 31, 2017, 2016 and 2015 was $5.6 million, $5.3 million and $4.6 million, respectively.

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Goodwill and Other Intangible Assets

12 Months Ended

Dec. 31, 2017

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Other Intangible Assets

Goodwill and Other Intangible Assets

The following table provides information for intangible assets subject to amortization for the years ended December 31, 2017 and 2016: 

	December 31,
	2017			2016
Amortizable intangible assets:
Core deposit intangibles - gross	$	63,685		37,953
Acquisitions	—			25,732
Less: accumulated amortization	(40,029		)	(34,378	)
Core deposit intangibles - net	$	23,656		29,307
Customer and Contract intangible assets - gross	$	10,474		8,496
Acquisitions	—			1,978
Less: accumulated amortization	(8,461		)	(7,348	)
Customer and Contract intangible assets - net	$	2,013		3,126

The following information shows the actual aggregate amortization expense for the years ended December 31, 2017, 2016 and 2015 as well as the estimated aggregate amortization expense, based upon current levels of intangible assets, for each of the five succeeding fiscal years: 

For the year ended December 31, 2015	$	1,688
For the year ended December 31, 2016	4,259
For the year ended December 31, 2017	6,764
For the year ending December 31, 2018	5,848
For the year ending December 31, 2019	4,933
For the year ending December 31, 2020	4,017
For the year ending December 31, 2021	3,188
For the year ending December 31, 2022	2,456

The following table provides information for the changes in the carrying amount of goodwill:

	Total
Balance at December 31, 2015	$	261,736
Goodwill acquired	45,684
Balance at December 31, 2016	307,420
Goodwill acquired	—
Balance at December 31, 2017	$	307,420

We have determined that goodwill is not impaired as of December 31, 2017 and 2016. There were no changes in our operations that would cause us to update the goodwill impairment test performed as of June 30, 2017.

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Deposits

12 Months Ended

Dec. 31, 2017

Deposits [Abstract]

Deposits

Deposits

Deposit balances at December 31, 2017 and 2016 are shown in the table below:

	December 31,
	2017		2016
Savings deposits	$	1,653,579	1,622,879
Interest-bearing demand deposits	1,442,928		1,428,317
Noninterest-bearing demand deposits	1,610,409		1,448,972
Money market deposit accounts	1,707,450		1,841,567
Time deposits	1,412,623		1,540,586
Total deposits	$	7,826,989	7,882,321

The aggregate amount of time deposits with a minimum denomination of $100,000 at December 31, 2017 and 2016 was $436.4 million and $451.6 million, respectively. 

Generally, deposits in excess of $250,000 are not federally insured. At December 31, 2017 we had $1.639 billion of deposits in accounts exceeding $250,000.

The following table summarizes the contractual maturity of time deposits at December 31, 2017 and 2016: 

	December 31,
	2017		2016
Due within 12 months	$	666,348	836,525
Due between 12 and 24 months	226,171		311,976
Due between 24 and 36 months	201,654		153,708
Due between 36 and 48 months	131,530		90,777
Due between 48 and 60 months	174,704		134,687
After 60 months	12,216		12,913
Total time deposits	$	1,412,623	1,540,586

The following table summarizes the interest expense incurred on the respective deposits for the years ended December 31, 2017, 2016 and 2015: 

	Years ended December 31,
	2017		2016	2015
Savings deposits	$	3,062	3,218	3,387
Interest-bearing demand deposits	1,027		462	568
Money market deposit accounts	4,203		3,621	3,222
Time deposits	14,765		16,164	16,878
Total interest expense	$	23,057	23,465	24,055

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Borrowed Funds

12 Months Ended

Dec. 31, 2017

Debt Disclosure [Abstract]

Borrowed Funds

Borrowed Funds

(a)Borrowings

Borrowed funds at December 31, 2017 and 2016 are presented in the following table:

	December 31,
	2017				2016
	Amount		Average rate		Amount		Average rate
Collateralized borrowings, due within one year	$	108,238	0.20	%	$	142,899	0.17	%

Borrowings from the FHLB of Pittsburgh, if any, are secured by our residential first mortgage and other qualifying loans. Certain of these borrowings are subject to restrictions or penalties in the event of prepayment.

The revolving line of credit with the FHLB of Pittsburgh carries a commitment of $150.0 million. The rate is adjusted daily by the FHLB of Pittsburgh, and any borrowings on this line may be repaid at any time without penalty.

At December 31, 2017 collateralized borrowings, due within one year were $108.2 million, and $142.9 million at December 31, 2016. The collateralized borrowings are collateralized by various securities held in safekeeping by the FHLB of Pittsburgh. The market value of these securities exceeds the value of the collateralized borrowings. The average amount of collateralized borrowings outstanding in the years ended December 31, 2017, 2016 and 2015 was $121.0 million, $141.6 million and $144.7 million, respectively. The maximum amount of collateralized borrowings outstanding during the years ended December 31, 2017, 2016 and 2015 was $137.2 million, $158.4 million and $166.4 million, respectively.

(b)Trust Preferred Securities

We have three statutory business trusts: Northwest Bancorp Capital Trust III, a Delaware statutory business trust, Northwest Bancorp Statutory Trust IV, a Connecticut statutory business trust and LNB Trust II, a Delaware statutory business trusts (the Trusts). The trusts exist solely to issue preferred securities to third parties for cash, issue common securities to the Company in exchange for capitalization of the Trusts, invest the proceeds from the sale of trust securities in an equivalent amount of debentures of the Company, and engage in other activities that are incidental to those previously listed. Northwest Bancorp Capital Trust III issued 50,000 cumulative trust preferred securities in a private transaction to a pooled investment vehicle on December 5, 2005 (liquidation value of $1,000 per preferred security or $50,000,000) with a stated maturity of December 30, 2035 and a floating rate of interest, which is reset quarterly, equal to three-month LIBOR plus 1.38%. Northwest Bancorp Statutory Trust IV issued 50,000 cumulative trust preferred securities in a private transaction to a pooled investment vehicle on December 15, 2005 (liquidation value of $1,000 per preferred security or $50,000,000) with a stated maturity of December 15, 2035 and a floating rate of interest, which is reset quarterly, equal to three-month LIBOR plus 1.38%.  LNB Trust II had 7,875 cumulative trust preferred securities outstanding (liquidation value of $1,000 per preferred security or $7,875,000) with a stated maturity of June 15, 2037 an a floating rate of interest, which resets quarterly, equal to three-month LIBOR plus 1.48%. As the shareholders of the trust preferred securities are the primary beneficiaries of the Trusts, the Trusts are not consolidated in our financial statements.

The Trusts have invested the proceeds of the offerings in junior subordinated deferrable interest debentures issued by the Company. The structure of these debentures mirrors the structure of the trust-preferred securities.  Northwest Bancorp Capital Trust III holds $51,547,000 of the Company’s junior subordinated debentures due December 30, 2035 with a floating rate of interest, reset quarterly, of three-month LIBOR plus 1.38%. The rate in effect at December 31, 2017 was 3.07%. Northwest Bancorp Statutory Trust IV holds $51,547,000 of the Company’s junior subordinated debentures due December 15, 2035 with a floating rate of interest, reset quarterly, of three-month LIBOR plus 1.38%. The rate in effect at December 31, 2017 was 2.97%. LNB Trust II holds $8,119,000 of the Company's junior subordinated debentures due June 15, 2037, with a floating rate of interest, reset quarterly, of three-month LIBOR plus 1.48%. The rate in effect at December 31, 2017 was 3.07%.

Cash distributions on the trust securities are made on a quarterly basis to the extent interest on the debentures is received by the Trusts.  We have the right to defer payment of interest on the subordinated debentures at any time, or from time-to-time, for periods not exceeding 5 years. If interest payments on the subordinated debentures are deferred, the distributions on the trust securities also are deferred. To date there have been no interest deferrals. Interest on the subordinated debentures and distributions on the trust securities is cumulative. Our obligation constitutes a full, irrevocable, and unconditional guarantee on a subordinated basis of the obligations of the trust under the preferred securities.

The Trusts must redeem the preferred securities when the debentures are paid at maturity or upon an earlier redemption of the debentures to the extent the debentures are redeemed. All or part of the debentures may be redeemed at any time. Also, the debentures may be redeemed at any time if existing laws or regulations, or the interpretation or application of these laws or regulations, change causing:

• the interest on the debentures to no longer be deductible by the Company for federal income tax purposes;

• the trust to become subject to federal income tax or to certain other taxes or governmental charges;

• the trust to register as an investment company; or

• the preferred securities do not qualify as Tier I capital. 

We may, at any time, dissolve any of the Trusts and distribute the debentures to the trust security holders, subject to receipt of any required regulatory approval(s).

The following table sets forth a summary of guaranteed capital debt securities and junior subordinated deferrable interest debentures held by the trusts as of December 31, 2017 and 2016: 

	Capital debt		December 31,
	securities		2017	2016
Northwest Bancorp Capital Trust III	$	50,000	51,547	51,547
Northwest Bancorp Statutory Trust IV	50,000		51,547	51,547
LNB Trust II	7,875		8,119	8,119
Total	$	107,875	111,213	111,213

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Income Taxes

12 Months Ended

Dec. 31, 2017

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

Total income tax was allocated for the years ended December 31, 2017, 2016 and 2015 as follows: 

	Years ended December 31,
	2017			2016		2015
Income before income taxes	$	41,444		21,648		27,960
Shareholders’ equity for unrealized (loss)/ gain on securities available-for-sale	(3,403		)	(1,871	)	(85	)
Shareholders’ equity for tax benefit for excess of fair value above cost of stock benefit plans	—			(1,425	)	(332	)
Shareholders’ equity for pension adjustment	(213		)	(2,455	)	(848	)
Shareholders’ equity for swap fair value adjustment	585			539		699
Unallocated income tax	$	38,413		16,436		27,394

Income tax expense applicable to income before taxes consists of: 

	Years ended December 31,
	2017		2016	2015
Current	$	30,127	18,914	21,670
Deferred	11,317		2,734	6,290
Total income tax expense	$	41,444	21,648	27,960

A reconciliation of the expected federal statutory income tax rate to the effective rate, expressed as a percentage of pretax income for the years ended December 31, 2017, 2016 and 2015, is as follows:

	Years ended December 31,
	2017		2016		2015
Expected tax rate	35.0	%	35.0	%	35.0	%
Tax-exempt interest income	(1.5	)%	(3.3	)%	(3.0	)%
State income tax, net of federal benefit	3.2	%	1.2	%	2.9	%
Bank-owned life insurance	(1.6	)%	(2.6	)%	(1.7	)%
Stock-based compensation	(0.9	)%	—	%	—	%
Dividends on stock plans	(1.1	)%	(2.0	)%	(0.8	)%
Low income housing and historic tax credits	(0.5	)%	(1.0	)%	(1.4	)%
Non-deductible acquisition expense	—	%	—	%	0.5	%
ESOP termination	—	%	3.4	%	—	%
Adjustment to net deferred tax liabilities for enacted changes in tax laws and rates	(2.3	)%	—	%	—	%
Other	0.2	%	(0.3	)%	0.1	%
Effective tax rate	30.5	%	30.4	%	31.6	%

The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities at December 31, 2017 and 2016 are presented below: 

	December 31,
	2017		2016
Deferred tax assets:
Deferred rent	$	87	187
Deferred compensation expense	1,040		2,893
Bad debts	10,277		18,823
Other reserves	953		1,823
Accrued postretirement benefit cost	413		641
Stock benefit plans	744		1,085
Writedown of investment securities	104		2,875
Accrued expenses	35		95
Pension and postretirement benefits	13,033		18,491
Unrealized loss on the fair value of derivatives	223		958
Unrealized loss on the fair value of securities available-for-sale	2,160		—
Purchase accounting	—		1,215
Deferred income	1,001		253
Other	141		153
Total deferred tax assets	30,211		49,492
Deferred tax liabilities:
Pension expense	5,542		8,689
Unrealized gain on the fair value of securities available-for-sale	—		252
Purchase accounting	303		—
Intangible assets	13,546		21,927
Mortgage servicing rights	777		1,559
Fixed assets	4,940		8,107
Net deferred loan fees	4,690		—
Other	274		635
Total deferred tax liabilities	30,072		41,169
Net deferred tax asset	$	139	8,323

We recorded a valuation allowance against state deferred tax assets of a Northwest subsidiary since the subsidiary is not expected to utilize its deferred tax assets in the foreseeable future. This valuation allowance is netted against other deferred tax assets in the preceding table.

Other than stated above, we have determined that no valuation allowance is necessary for the deferred tax assets because it is more likely than not that these assets will be realized through future reversals of existing temporary differences and through future taxable income. We will continue to review the criteria related to the recognition of deferred tax assets on a regular basis.

We utilize a comprehensive model to recognize, measure, present and disclose in our financial statements uncertain tax positions that the company has taken or expects to take on a tax return.  At December 31, 2017, there were no unrecognized tax benefits that, if recognized, would favorably affect the effective income tax rate.  We recognize interest accrued and penalties (if any) related to unrecognized tax benefits in income tax expense.  During the year ended December 31, 2017, we did not accrue any interest.  At December 31, 2017, we had no amount accrued for interest or the payment of penalties.

We are subject to routine audits of our tax returns by the Internal Revenue Service as well as all states in which we conduct business.  We are subject to audit by the Internal Revenue Service for the tax periods ended December 31, 2017, 2016, 2015 and 2014 and subject to audit by any state in which we conduct business for the tax periods ended December 31, 2017, 2016, 2015 and 2014. The New York State audit of the Company's 2011to 2014 tax years was finalized in 2016, resulting in an additional tax liability of $444,000. The Internal Revenue Service audit of the 2013 tax year of LNB was concluded in 2016 and resulted in no additional tax liability.

The Act reduces our corporate federal tax rate from 35.0% to 21.0% effective January 1, 2018. As a result we are required to re-measure, through income tax expense, our deferred tax assets and liabilities using the enacted rate at which we expect them to be recovered or settled. The re-measurement of our net deferred tax liability resulted in a 2017 income tax benefit of $3.1 million.

Also on December 22, 2017, the U.S. Securities and Exchange Commission (“SEC”) released Staff Accounting Bulletin No. 118 (“SAB 118”) to address any uncertainty or diversity of views in practice in accounting for the income tax effects of the Act in situations where a registrant does not have the necessary information available, prepared, or analyzed in reasonable detail to complete this accounting in the reporting period that includes the enactment date. SAB 118 allows for a measurement period not to extend beyond one year from the Act’s enactment date to complete the necessary accounting.

We recorded provisional amounts of deferred income taxes using reasonable estimates in five areas where information necessary to complete the accounting was not available, prepared, or analyzed: (i) our deferred tax liability for temporary differences between the tax and financial reporting bases of fixed assets is awaiting completion and implementation of software updates to process the calculations associated with the Act's provisions allowing for 100% bonus depreciation on fixed assets purchased and placed in service after September 27, 2017; (ii) our deferred tax asset for temporary differences associated with accrued compensation is awaiting final determinations of amounts that will be paid on or before March 15, 2018 and deducted on the 2017 income tax returns; (iii) our deferred tax liability for temporary differences associated with equity investments in partnerships is awaiting receipt of Schedules K-1 from outside preparers, which is necessary to determine our 2017 tax impact from these investments; (iv) our deferred tax liability for temporary differences related to our qualified pension plan is based upon actuarial reports from our third party provider, however we are still in the process of determining if a contribution related to the 2017 plan year will be made; (v) our deferred tax liability for temporary differences related to deferred loans fees is based upon the assumption the IRS will accept the tax treatment requested in the consent change in tax accounting method filed in 2017.

In a sixth area, we made no adjustments to deferred tax assets representing future deductions for accrued compensation that may be subject to new limitations under Internal Revenue Code Section 162(m) which, generally, limits the annual deduction for certain compensation paid to certain employees to $1 million. There is uncertainty in applying the newly-enacted rules to existing contracts, and we are seeking further clarifications before completing our analysis. We will complete and record the income tax effects of these provisional items during the period the necessary information becomes available. This measurement period will not extend beyond December 22, 2018.

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Shareholders' Equity

12 Months Ended

Dec. 31, 2017

Stockholders' Equity Note [Abstract]

Shareholders' Equity

Shareholders’ Equity

Retained earnings are partially restricted in connection with regulations related to the insurance of deposit accounts, which requires Northwest to maintain certain statutory reserves. Northwest may not pay dividends on or repurchase any of its common stock if the effect thereof would reduce retained earnings below the level of adequate capitalization as defined by federal and state regulators.

In tax years prior to fiscal 1997, Northwest was permitted, under the Internal Revenue Code ("IRC"), to deduct an annual addition to a reserve for bad debts in determining taxable income, subject to certain limitations. Bad debt deductions for income tax purposes are included in taxable income of later years only if the bad debt reserve is used subsequently for purposes other than to absorb bad debt losses. Because Northwest does not intend to use the reserve for purposes other than to absorb losses, no deferred income taxes have been provided prior to fiscal 1987. Retained earnings at December 31, 2017 and 2016 include approximately $39.1 million representing such bad debt deductions for which no deferred income taxes have been provided.

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Earnings Per Share

12 Months Ended

Dec. 31, 2017

Earnings Per Share [Abstract]

Earnings Per Share

Earnings Per Share

Basic earnings per common share ("EPS") is computed by dividing net income available to common shareholders by the weighted average number of common shares outstanding for the period, without considering any dilutive items.  Diluted EPS reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that then shared in our earnings. All stock options outstanding during the years ended December 31, 2017 and 2016 were included in the computation of diluted earnings per share because the stock options exercise price was less than the average market price of the common shares of $16.64 and $14.79, respectively. For the year ended December 31, 2015 there were 524,250 options outstanding with a weighted average exercise price of $13.15 per share that were excluded in the computation of diluted earnings per share because the stock options’ exercise price was greater than the average market price of the common shares of $12.64. 

The computation of basic and diluted earnings per share for the years ended December 31, 2017, 2016 and 2015 follows: 

	Years ended December 31,
	2017		2016	2015
Net income available to common shareholders	$	94,467	49,667	60,540
Weighted average common shares outstanding	101,015,083		99,439,174	94,314,420
Dilutive potential shares due to effect of stock options	1,549,822		1,225,514	515,369
Total weighted average common shares and dilutive potential shares	102,564,905		100,664,688	94,829,789
Basic earnings per share (1)	$	0.94	0.50	0.64
Diluted earnings per share (1)	$	0.92	0.49	0.64

(1)  Not in thousands.

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Employee Benefit Plans

12 Months Ended

Dec. 31, 2017

Retirement Benefits [Abstract]

Employee Benefit Plans

Employee Benefit Plans

(a)Pension Plans

We maintain noncontributory defined benefit pension plans covering substantially all employees and members of our board of directors. Retirement benefits are based on certain compensation levels, age, and length of service. Contributions are based on an actuarially determined amount to fund not only benefits attributed to service to date but also for those expected to be earned in the future. In addition, we have an unfunded Supplemental Executive Retirement Plan (“SERP”) to compensate those executive participants eligible for the defined benefit pension plan whose benefits are limited by Section 415 of the IRC.

We also sponsor a retirement savings plan in which substantially all employees participate. We provide a matching contribution of 100% of each employee’s contribution to a maximum of 4% of the employee’s compensation.

Total expense for all retirement plans, including defined benefit pension plans, was approximately $6.8 million, $5.8 million and $4.6 million, for the years ended December 31, 2017, 2016 and 2015, respectively.

Components of net periodic pension cost and other amounts recognized in other comprehensive income:

The following table sets forth the net periodic pension cost for the defined benefit pension plans for the years ended December 31, 2017, 2016 and 2015: 

	Years ended December 31,
	2017			2016		2015
Service cost	$	6,149		5,496		5,721
Interest cost	6,879			6,781		6,125
Expected return on plan assets	(10,512		)	(9,897	)	(10,371	)
Net amortization and deferral	1,388			1,388		1,375
Net periodic pension cost	$	3,904		3,768		2,850

The following table sets forth other changes in the defined benefit pension plans’ plan assets and benefit obligations recognized in other comprehensive income: 

	Years ended December 31,
	2017			2016	2015
Net loss/ (gain)	$	(1,647	)	1,550	(420	)
Prior service cost/ (credit)	—			—	—
Amortization of prior service cost	2,323			2,323	2,323
Total recognized in other comprehensive income	$	676		3,873	1,903
Total recognized in net periodic pension cost and other comprehensive income/ (loss)	$	4,580		7,641	4,753

The estimated net loss and prior service credit for the defined benefit pension plan that will be amortized from accumulated other comprehensive income into net periodic cost over the next year is $3.3 million and $(2.3) million, respectively.

The following table sets forth information for the defined benefit pension plans’ funded status at December 31, 2017 and 2016: 

	December 31,
	2017			2016
Change in benefit obligation:
Benefit obligation at beginning of year	$	172,208		162,133
Service cost	6,149			5,496
Interest cost	6,879			6,781
Acquisition	—			—
Actuarial (gain)/ loss	14,807			4,267
Benefits paid	(6,901		)	(6,469	)
Benefit obligation at end of year	$	193,142		172,208
Change in plan assets:
Fair value of plan assets at beginning of year	$	152,625		143,655
Actual return on plan assets	23,255			8,903
Employer contributions	4,689			6,536
Acquisition	—			—
Benefits paid	(6,901		)	(6,469	)
Fair value of plan assets at end of period	$	173,668		152,625
Funded status at end of year	$	(19,474	)	(19,583	)

The following table sets forth the assumptions used to develop the net periodic pension cost: 

	Years ended December 31,
	2017		2016		2015
Discount rate	4.06	%	4.25	%	3.89	%
Expected long-term rate of return on assets	7.00	%	7.00	%	7.50	%
Rate of increase in compensation levels	3.00	%	3.00	%	3.00	%

The following table sets forth the assumptions used to determine benefit obligations at the end of each period:

	Years ended December 31,
	2017		2016		2015
Discount rate	3.53	%	4.06	%	4.25	%
Expected long-term rate of return on assets	7.00	%	7.00	%	7.00	%
Rate of increase in compensation levels	3.00	%	3.00	%	3.00	%

The expected long-term rate of return on assets is based on the expected return of each of the asset categories, weighted based on the median of the target allocation for each category.  We use the Citigroup Pension Liability Index rates matching the duration of our benefit payments as of the measurement date to determine the discount rate.

The accumulated benefit obligation for the funded defined benefit pension plan was $186.9 million, $165.9 million and $155.9 million at December 31, 2017, 2016 and 2015, respectively. The accumulated benefit obligation for all unfunded defined benefit plans was $6.2 million, $6.3 million and $6.3 million at December 31, 2017, 2016 and 2015, respectively.

The following table sets forth certain information related to our pension plans: 

	December 31,
	2017		2016
Projected benefit obligation	$	193,142	172,208
Accumulated benefit obligation	193,142		172,208
Fair value of plan assets	173,668		152,625

We anticipate making a contribution to our defined benefit pension plan of $4.0 million to $6.0 million during the year ending December 31, 2018.

The investment policy as established by the Plan Administrative Committee, to be followed by the Trustee, is to invest assets based on the target allocations shown in the table below. To meet target allocation ranges set forth by the Plan Administrative Committee, periodically, the assets are reallocated by the Trustee.  The investment policy is reviewed periodically to determine if the policy should be changed. Pension assets are conservatively invested with the goal of providing market or better returns with below market risks. Assets are invested in a balanced portfolio composed primarily of equities, fixed income, and cash or cash equivalent investments. The Trustee tries to maintain an approximate asset mix position of 30% to 60% equities and 20% to 50% bonds.

A maximum of 10% may be invested in any one stock, including the stock of Northwest Bancshares, Inc. The objective of holding equity securities is to provide capital appreciation consistent with the ownership of the common stocks of medium to large companies. Acceptable bond investments are direct or agency obligations of the U.S. Government or investment grade corporate bonds. The average maturity of the bond portfolio shall not exceed 10 years.

The following table sets forth the weighted average asset allocation of defined benefit plans: 

	Target	December 31,
	allocation	2017		2016
Debt securities	20 – 50%	23	%	23	%
Equity securities	30 – 60%	73	%	72	%
Other	5 – 50%	4	%	5	%
Total		100	%	100	%

All of the assets held by the defined benefit pension plan are measured and recorded at estimated fair value on our balance sheet on a recurring basis as Level 1 assets, as defined by the fair value hierarchy defined in note 15.

The following table sets forth the pension plan assets as of December 31, 2017 and 2016: 

	December 31,
	2017		2016
Mutual funds - debt	$	40,010	35,224
Mutual funds - equity	125,871		110,078
Cash and cash equivalents	7,787		7,322

The benefits expected to be paid in each year from 2018 to 2022 are $5.9 million, $6.4 million, $6.6 million, $7.0 million and $7.5 million, respectively. The aggregate benefits expected to be paid in the five years from 2023 to 2027 are $42.6 million. The expected benefits to be paid are based on the same assumptions used to measure our benefit obligations at December 31, 2017 and include estimated future employee service.

(b)Postretirement Healthcare Plan

In addition to pension benefits, we provide postretirement healthcare benefits for certain employees who were employed as of October 1, 1993 and were at least 55 years of age on that date. We use the accrual method of accounting for postretirement benefits other than pensions.

Components of net periodic benefit cost and other amounts recognized in other comprehensive income:

The following table sets forth the net periodic benefit cost for the postretirement healthcare benefits plan for the years ended December 31, 2017, 2016 and 2015:

	Years ended December 31,
	2017		2016	2015
Service cost	$	—	—	—
Interest cost	68		70	58
Amortization of net loss	108		90	60
Net period benefit cost	$	176	160	118

The following table sets forth other changes in the postretirement healthcare plan’s plan assets and benefit obligations recognized in other comprehensive income: 

	Years ended December 31,
	2017			2016	2015
Net loss/ (gain)	$	(156	)	109	273
Total recognized in other comprehensive income	$	(156	)	109	273
Total recognized in net periodic benefit cost and other comprehensive income	$	20		269	391

The estimated net loss for the postretirement healthcare benefit plan that will be amortized from accumulated other comprehensive income into net periodic benefit cost over the year ending December 31, 2018 is $98,000.

The following table sets forth the funded status of the postretirement healthcare benefit plan at December 31, 2017 and 2016: 

	December 31,
	2017			2016
Change in benefit obligation:
Benefit obligation at beginning of year	$	1,779		1,737
Service cost	—			—
Interest cost	68			70
Actuarial loss	(48		)	200
Benefits paid	(162		)	(228	)
Benefit obligation at end of year	$	1,637		1,779
Change in plan assets:
Fair value of plan assets at beginning of year	$	—		—
Employer contributions	162			228
Benefits paid	(162		)	(228	)
Fair value of plan assets at end of year	$	—		—
Funded status at year end	$	(1,637	)	(1,779	)

The assumptions used to develop the preceding information for postretirement healthcare benefits are as follows: 

	Years ended December 31,
	2017			2016		2015
Discount rate	4.06		%	4.25	%	3.89	%
Monthly cost of healthcare insurance per beneficiary (1)	$	548		539		470
Annual rate of increase in healthcare costs	4.00		%	4.00	%	4.00	%

(1)   Not in thousands

If the assumed rate of increase in healthcare costs was increased by one percentage point to 5% from the level presented above, the interest cost component of net periodic postretirement healthcare benefit cost would increase by $8,000 and the accumulated postretirement benefit obligation for healthcare benefits would increase by $58,000.

The following table sets forth information for plans with an accumulated benefit obligation in excess of plan assets: 

	December 31,
	2017		2016
Projected benefit obligation	$	1,637	1,779
Accumulated benefit obligation	1,637		1,779
Fair value of plan assets	—		—

(c)Employee Stock Ownership Plan

On September 30, 2016, the Northwest Savings Bank Employee Stock Ownership Plan ("ESOP") was terminated and merged into the Northwest Bank 401(k) Plan.

ESOP compensation expense was $0, $6.3 million and $335,000 for the years ended December 31, 2017, 2016 and 2015, respectively.

Compensation expense related to the ESOP was recognized at an amount equal to the number of common shares committed to be released by the ESOP to participants’ accounts multiplied by the average fair value of the common stock during the reporting period. The difference between the fair value of the shares of the common stock committed to be allocated by the ESOP to participants’ accounts for the period and the average cost of those common shares is recorded as an adjustment to either additional paid-in capital or retained earnings.

(d)Common Stock Awards

On April 20, 2011, we established the Northwest Bancshares, Inc. 2011 Equity Incentive Plan with 2,806,233 common shares authorized.  On May 20, 2015, we awarded employees 282,050 common shares and outside directors 24,300 common shares with a grant date fair value of $12.31 per share (total market value of $3.8 million at issuance). On May 18, 2016, we awarded employees 310,160 common shares and outside directors 24,300 common shares with a grant date fair value of $14.51 per share (total market value of $4.9 million at issuance). On May 17, 2017, we awarded employees 378,050 common shares and outside directors 24,300 common shares with a grant date fair value of $15.24 per share (total market value of $5.8 million at issuance). Total common shares forfeited from the 2011 plan were 415,154, of which, 105,600 shares were forfeited during the year ended December 31, 2017. Forfeited shares may be awarded to other eligible recipients in future grants until the plan termination date in 2021.  Common shares vest over a 10-year period with the first vesting occurring on the grant date.  As of December 31, 2017, 30% of the 2015 issuances have vested, 20% of the 2016 issuances have vested and 10% of the 2017 issuances have vested.  Once shares have vested, they are no longer restricted. Compensation expense, in the amount of the fair market value of the common stock at the date of the grant, will be recognized pro rata over the periods in which the shares vest. While restricted, the recipients are entitled to all shareholder rights, except that the shares may not be sold, pledged, or otherwise disposed of and are required to be held in a trust.

(e)Stock Option Plans

The Northwest Bancshares, Inc. 2011 Equity Incentive Plan also authorizes the granting of 7,015,583 stock options.  On May 20, 2015, we granted employees 660,570 stock options and outside directors 64,800 stock options with an exercise price of $12.37 per share.  On May 18, 2016, we granted employees 660,600 stock options and outside directors 64,800 stock options with an exercise price of $14.15 per share.  On May 17, 2017, we granted employees 754,210 stock options and outside directors 64,800 stock options with an exercise price of $15.57 per share.  Awarded stock options vest over a ten-year period with the first vesting occurring on the grant date with a ten year exercise period from the grant date.

The following table summarizes the activity in our option plans during the years ended December 31, 2017, 2016 and 2015 (amounts in this table are not in thousands): 

	Years ended December 31,
	2017				2016				2015
	Number		Weighted average exercise price		Number		Weighted average exercise price		Number		Weighted average exercise price
Balance at beginning of year	5,804,105		$	12.25	6,306,496		$	11.81	6,402,407		$	11.65
Granted (1)	819,010		15.57		725,400		14.15		665,370		12.37
Exercised (2)	(630,591	)	11.66		(1,081,072	)	11.01		(474,253	)	10.27
Forfeited/ expired	(296,954	)	12.43		(146,719	)	12.71		(287,028	)	12.26
Balance at end of year	5,695,570		12.75		5,804,105		12.25		6,306,496		11.81
Exercisable at end of year	3,016,367		11.99		3,035,718		11.71		3,431,113		11.42

(1) Weighted average fair value of options at grant date: $1.55, $1.52 and $1.14, respectively.

(2) The total intrinsic value of options exercised was $3.5 million, $5.1 million and $1.2 million, respectively.

The aggregate intrinsic value of all options expected to vest and fully vested options at December 31, 2017 is $8.6 million and $14.3 million, respectively.  The following table summarizes the number of options outstanding, number of options exercisable, and weighted average remaining life of all option grants as of December 31, 2017: 

	Exercise price $7.48	Exercise price $9.79	Exercise price $11.12	Exercise price $11.49	Exercise price $11.70	Exercise price $12.12	Exercise price $12.17
Options outstanding:
Number of options	164,289	143,224	48,027	260,456	384,380	342,789	14,500
Weighted average remaining contract life (years)	1.25	1.00	0.25	2.25	4.50	3.25	3.50
Options exercisable:
Number of options	164,289	143,224	48,027	260,456	237,916	299,253	13,000
Weighted average remaining term - vested (years)	1.25	1.00	0.25	2.25	4.50	3.25	3.50

	Exercise price $12.32	Exercise price $12.37	Exercise price $12.44	Exercise price $13.15	Exercise price $14.15	Exercise price $15.57	Total $12.75
Options outstanding:
Number of options	1,537,329	522,750	427,090	440,653	643,998	766,085	5,695,570
Weighted average remaining contract life (years)	3.50	7.50	5.50	6.50	8.50	9.50	5.46
Options exercisable:
Number of options	1,079,159	163,646	226,292	178,091	126,374	76,640	3,016,367
Weighted average remaining term - vested (years)	3.50	7.50	5.50	6.50	8.50	9.50	4.04

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Disclosures About Fair Value of Financial Instruments

12 Months Ended

Dec. 31, 2017

Fair Value Disclosures [Abstract]

Disclosures About Fair Value of Financial Instruments

Disclosures About Fair Value of Financial Instruments

We are required to disclose fair value information about financial instruments whether or not recognized in the consolidated statement of financial condition. Fair value information of certain financial instruments and all nonfinancial instruments is not required to be disclosed. Accordingly, the aggregate fair value amounts presented do not represent the underlying value of the Company.

Financial assets and liabilities recognized or disclosed at fair value on a recurring basis and certain financial assets and liabilities on a non-recurring basis are accounted for using a three-level hierarchy of valuation techniques based on whether the inputs to those valuation techniques are observable or unobservable.  This hierarchy gives the highest priority to quoted prices with readily available independent data in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable market inputs (Level 3).  When various inputs for measurement fall within different levels of the fair value hierarchy, the lowest level input that has a significant impact on fair value measurement is used.

Financial assets and liabilities are categorized based upon the following characteristics or inputs to the valuation techniques:

• Level 1 - Financial assets and liabilities for which inputs are observable and are obtained from reliable quoted prices for identical assets or liabilities in actively traded markets.  This is the most reliable fair value measurement and includes, for example, active exchange-traded equity securities. 

• Level 2 - Financial assets and liabilities for which values are based on quoted prices in markets that are not active or for which values are based on similar assets or liabilities that are actively traded.  Level 2 also includes pricing models in which the inputs are corroborated by market data, for example, matrix pricing. 

• Level 3 - Financial assets and liabilities for which values are based on prices or valuation techniques that require inputs that are both unobservable and significant to the overall fair value measurement.  Level 3 inputs include the following: 

• Quotes from brokers or other external sources that are not considered binding;

• Quotes from brokers or other external sources where it cannot be determined that market participants would in fact transact for the asset or liability at the quoted price;

• Quotes and other information from brokers or other external sources where the inputs are not deemed observable. 

We are responsible for the valuation process and as part of this process may use data from outside sources in establishing fair value.  We perform due diligence to understand the inputs used or how the data was calculated or derived.  We also corroborate the reasonableness of external inputs in the valuation process.

The carrying amounts reported in the consolidated statement of financial condition approximate fair value for the following financial instruments: cash on hand, interest-earning deposits in other institutions, federal funds sold and other short-term investments, accrued interest receivable, accrued interest payable, and marketable securities available-for-sale.

Marketable Securities

Where available, market values are based on quoted market prices, dealer quotes, and prices obtained from independent pricing services.

Debt securities — available-for-sale - Generally, debt securities are valued using pricing for similar securities, recently executed transactions and other pricing models utilizing observable inputs. The valuation for most debt securities is classified as Level 2. Securities within Level 2 include corporate bonds, municipal bonds, mortgage-backed securities and US government obligations. Certain debt securities which were AAA rated at purchase do not have an active market and as such we have used an alternative method to determine the fair value of these securities. The fair value has been determined using a discounted cash flow model using market assumptions, which generally include cash flow, collateral and other market assumptions. As such, securities which otherwise would have been classified as level 2 securities if an active market for those assets or similar assets existed are included herein as level 3 assets. Other debt securities, pooled trust preferred securities rated below AA at purchase, have a fair value based on a discounted cash flow model using similar assumptions to those noted above and accordingly are classified as level 3 assets.

Equity securities — available-for-sale - Level 1 securities include publicly traded securities valued using quoted market prices. We consider the financial condition of the issuer to determine if the securities have indicators of impairment.

Debt securities — held-to-maturity - The fair value of debt securities held to maturity is determined in the same manner as debt securities available for sale.

Loans Receivable

Loans with comparable characteristics including collateral and re-pricing structures are segregated for valuation purposes. Each loan pool is separately valued utilizing a discounted cash flow analysis. Projected monthly cash flows are discounted to present value using a market rate for comparable loans, which is not considered an exit price. Characteristics of comparable loans include remaining term, coupon interest, and estimated prepayment speeds. Delinquent loans are separately evaluated given the impact delinquency has on the projected future cash flow of the loan including the approximate discount or market rate, which is not considered an exit price.

FHLB Stock

Due to the restrictions placed on the transferability of FHLB stock it is not practical to determine the fair value.

Deposit Liabilities

The estimated fair value of deposits with no stated maturity, which includes demand deposits, money market, and other savings accounts, is the amount payable on demand. Although market premiums paid for depository institutions reflect an additional value for these low-cost deposits, adjusting fair value for any value expected to be derived from retaining those deposits for a future period of time or from the benefit that results from the ability to fund interest-earning assets with these deposit liabilities is prohibited. The fair value estimates of deposit liabilities do not include the benefit that results from the low-cost funding provided by these deposits compared to the cost of borrowing funds in the market. Fair values for time deposits are estimated using a discounted cash flow calculation that applies contractual cost currently being offered in the existing portfolio to current market rates being offered locally for deposits of similar remaining maturities. The valuation adjustment for the portfolio consists of the present value of the difference of these two cash flows, discounted at the assumed market rate of the corresponding maturity.

Borrowed Funds

Fixed rate advances are valued by comparing their contractual cost to the prevailing market cost.  The carrying amount of repurchase agreements approximates fair value.

Junior Subordinated Debentures

The fair value of junior subordinated debentures is calculated using the discounted cash flows at the prevailing rate of interest.

Interest rate and foreign exchange swap agreements

The fair value of the interest rate swaps is based upon the present value of the expected future cash flows using the LIBOR swap curve, the basis for the underlying interest rate. To price interest rate swaps, cash flows are first projected for each payment date using the fixed rate for the fixed side of the swap and the forward rates for the floating side of the swap. These swap cash flows are then discounted to time zero using LIBOR zero-coupon interest rates. The sum of the present value of both legs is the fair market value of the interest rate swap. These valuations have been derived from our third party vendor’s proprietary models rather than actual market quotations. The proprietary models are based upon financial principles and assumptions that we believe to be reasonable. The fair value of the foreign exchange swap is derived from proprietary models rather than actual market quotations. The proprietary models are based upon financial principles and assumptions we believe to be reasonable. 

Off-Balance Sheet Financial Instruments

These financial instruments generally are not sold or traded, and estimated fair values are not readily available. However, the fair value of commitments to extend credit and standby letters of credit is estimated using the fees currently charged to enter into similar agreements. Commitments to extend credit are generally short-term in nature and, if drawn upon, are issued under current market terms. At December 31, 2017 and 2016, there was no significant unrealized appreciation or depreciation on these financial instruments.

The following table sets forth the carrying amount and estimated fair value of our financial instruments included in the consolidated statement of financial condition at December 31, 2017 and 2016: 

	December 31, 2017
	Carrying		Estimated
	amount		fair value	Level 1	Level 2	Level 3
Financial assets:
Cash and cash equivalents	$	77,710	77,710	77,710	—	—
Securities available-for-sale	792,535		792,535	574	791,961	—
Securities held-to-maturity	29,678		29,667	—	29,667	—
Loans receivable, net	7,736,614		7,762,562	3,128	—	7,759,434
Accrued interest receivable	23,352		23,352	23,352	—	—
Interest rate swaps	214		214	—	214	—
FHLB Stock	11,733		11,733	—	—	—
Total financial assets	$	8,671,836	8,697,773	104,764	821,842	7,759,434
Financial liabilities:
Savings and checking accounts	$	6,414,366	6,414,366	6,414,366	—	—
Time deposits	1,412,623		1,433,380	—	—	1,433,380
Borrowed funds	108,238		108,238	108,238	—	—
Junior subordinated debentures	111,213		110,954	—	—	110,954
Interest rate swaps	1,278		1,278	—	1,278	—
Foreign exchange swaps	61		61	—	61	—
Accrued interest payable	460		460	460	—	—
Total financial liabilities	$	8,048,239	8,068,737	6,523,064	1,339	1,544,334

	December 31, 2016
	Carrying		Estimated
	amount		fair value	Level 1	Level 2	Level 3
Financial assets:
Cash and cash equivalents	$	389,867	389,867	389,867	—	—
Securities available-for-sale	826,200		826,200	4,440	812,394	9,366
Securities held-to-maturity	19,978		20,426	—	20,426	—
Loans receivable, net	7,496,408		7,878,815	9,625	—	7,869,190
Accrued interest receivable	21,699		21,699	21,699	—	—
Interest rate swaps	238		238	—	238	—
FHLB Stock	7,390		7,390	—	—	—
Total financial assets	$	8,761,780	9,144,635	425,631	833,058	7,878,556
Financial liabilities:
Savings and checking accounts	$	6,341,735	6,341,735	6,341,735	—	—
Time deposits	1,540,586		1,626,434	—	—	1,626,434
Borrowed funds	142,899		142,899	142,899	—	—
Junior subordinated debentures	111,213		113,313	—	—	113,313
Interest rate swaps	2,974		2,974	—	2,974	—
Accrued interest payable	643		643	643	—	—
Total financial liabilities	$	8,140,050	8,227,998	6,485,277	2,974	1,739,747

Fair value estimates are made at a point-in-time, based on relevant market data and information about the instrument. The preceding methods and assumptions were used in estimating the fair value of financial instruments at December 31, 2017 and 2016.  There were no transfers of financial instruments between Level 1 and Level 2 during the years ended December 31, 2017 and 2016.

The following table represents assets and liabilities measured at fair value on a recurring basis as of December 31, 2017: 

	Level 1		Level 2	Level 3	Total at fair value
Assets
Equity securities	$	574	—	—	574
Debt securities:
U.S. government and agencies	—		1	—	1
Government sponsored enterprises	—		209,269	—	209,269
States and political subdivisions	—		51,056	—	51,056
Corporate	—		909	—	909
Total debt securities	—		261,235	—	261,235
Residential mortgage-backed securities:
GNMA	—		29,695	—	29,695
FNMA	—		82,969	—	82,969
FHLMC	—		64,021	—	64,021
Non-agency	—		555	—	555
Collateralized mortgage obligations:
GNMA	—		4,769	—	4,769
FNMA	—		191,512	—	191,512
FHLMC	—		157,190	—	157,190
Non-agency	—		15	—	15
Total mortgage-backed securities	—		530,726	—	530,726
Interest rate swaps	—		214	—	214
Total assets	$	574	792,175	—	792,749
Liabilities
Interest rate swaps	$	—	1,278	—	1,278
Foreign exchange swaps	—		61	—	61
Total liabilities	$	—	1,339	—	1,339

The following table represents assets and liabilities measured at fair value on a recurring basis as of December 31, 2016: 

	Level 1		Level 2	Level 3	Total at fair value
Assets
Equity securities	$	4,440	—	—	4,440
Debt securities:
U.S. government and agencies	—		6	—	6
Government sponsored enterprises	—		294,170	—	294,170
States and political subdivisions	—		63,070	—	63,070
Corporate	—		7,614	9,366	16,980
Total debt securities	—		364,860	9,366	374,226
Residential mortgage-backed securities:
GNMA	—		30,883	—	30,883
FNMA	—		106,578	—	106,578
FHLMC	—		82,115	—	82,115
Non-agency	—		579	—	579
Collateralized mortgage obligations:
GNMA	—		6,287	—	6,287
FNMA	—		95,186	—	95,186
FHLMC	—		119,197	—	119,197
SBA	—		6,608	—	6,608
Non-agency	—		101	—	101
Total mortgage-backed securities	—		447,534	—	447,534
Interest rate swaps	—		238	—	238
Total assets	$	4,440	812,632	9,366	826,438
Liabilities
Interest rate swaps	$	—	2,974	—	2,974
Total liabilities	$	—	2,974	—	2,974

The table below presents a reconciliation of all assets and liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the year ended December 31, 2017 and 2016: 

	December 31,
	2017			2016
	Debt securities
Beginning balance January 1,	$	9,366		8,955
Total net realized investment gains/ (losses) and net change in unrealized appreciation/ (depreciation):
Included in net income as OTTI	—			—
Included in other comprehensive income	1,282			411
Purchases	—			—
Sales	(10,648		)	—
Transfers into Level 3	—			—
Transfers out of Level 3	—			—
Ending balance December 31,	$	—		9,366

Certain assets and liabilities are measured at fair value on a nonrecurring basis after initial recognition such as loans held for sale, loans measured for impairment, real estate owned, and mortgage servicing rights.

The following table represents the fair market measurement for only those nonrecurring assets that had a fair market value below the carrying amount as of December 31, 2017:

	Level 1		Level 2	Level 3	Total assets at fair value
Loans evaluated for impairment	$	—	—	33,421	33,421
Real estate owned	—		—	5,666	5,666
Total assets	$	—	—	39,087	39,087

The following table represents the fair market measurement for only those nonrecurring assets that had a fair market value below the carrying amount as of December 31, 2016:

	Level 1		Level 2	Level 3	Total assets at fair value
Loans evaluated for impairment	$	—	—	41,933	41,933
Mortgage servicing rights	—		—	246	246
Real estate owned	—		—	4,889	4,889
Total assets	$	—	—	47,068	47,068

Loans measured for impairment - A loan is considered to be impaired as described in note 1(f). We classify impaired loans as nonrecurring Level 3.

Mortgage servicing rights - Mortgage servicing rights represent the value of servicing residential mortgage loans, when the mortgage loans have been sold into the secondary market and the associated servicing has been retained. The value is determined through a discounted cash flow analysis, which uses interest rates, prepayment speeds and delinquency rate assumptions as inputs. All of these assumptions require a significant degree of management judgment. Servicing rights and the related mortgage loans are segregated into categories or homogeneous pools based upon common characteristics. Adjustments are only made when the estimated discounted future cash flows are less than the carrying value, as determined by individual pool. As such, mortgage servicing rights are classified as nonrecurring Level 3.

Real estate owned - Real estate owned is comprised of property acquired through foreclosure or voluntarily conveyed by borrowers.  These assets are recorded on the date acquired at the lower of the related loan balance or fair value, less estimated disposition costs, with the fair value being determined by appraisal.  Subsequently, foreclosed assets are valued at the lower of the amount recorded at acquisition date or fair value, less estimated disposition costs.  We classify real estate owned as nonrecurring Level 3.

The following table presents additional quantitative information about assets measured at fair value on a recurring and nonrecurring basis and for which we have utilized Level 3 inputs to determine fair value at December 31, 2017:

	Fair value		Valuation techniques	Significant  unobservable inputs	Range (weighted average)
Loans measured for impairment	$	33,421	Appraisal	Estimated costs to sell	10%
			value (1)
			Discounted cash	Discount rate	4.25% to 10.0% (7.50%)
			flow
Real estate owned	5,666		Appraisal	Estimated costs to sell	10%
			value (1)

(1)  Fair value is generally determined through independent appraisals of the underlying collateral, which may include Level 3 inputs that are not identifiable, or by using the discounted cash flow method if the loan is not collateral dependent.

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Regulatory Capital Requirements

12 Months Ended

Dec. 31, 2017

Regulatory Capital Requirements [Abstract]

Regulatory Capital Requirements

Regulatory Capital Requirements

We and our banking subsidiary are subject to various regulatory capital requirements administered by the federal and state banking agencies. Failure to meet minimum capital requirements can initiate certain mandatory, and possibly additional discretionary actions by the regulators that, if undertaken, could have a direct material effect on our financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, specific capital guidelines that involve quantitative measures of assets, liabilities, and certain off-balance sheet items as calculated under regulatory accounting practices must be met. The capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weightings, and other factors.

In July 2013, the FDIC and the other federal regulatory agencies issued a final rule that revised their leverage and risk-based capital requirements and the method for calculating risk-weighted assets to make them consistent with agreements that were reached by the Basel Committee on Banking Supervision and certain provisions of the Dodd-Frank Act. The rule limits an organization’s capital distributions and certain discretionary bonus payments if the organization does not hold a “capital conservation buffer” consisting of 2.5% of Total, Tier 1 and Common Equity Tier 1 ("CET1") capital to risk-weighted assets in addition to the amount necessary to meet its minimum risk-based capital requirements.

Quantitative measures established by regulation to ensure capital adequacy require us and our banking subsidiary to maintain minimum amounts and ratios (set forth in the table below) of total, Tier 1, and CET1 capital (as defined in the regulations) to risk-weighted assets (as defined) and of Tier I capital to average assets (as defined). As of December 31, 2017 and 2016, we and our banking subsidiary exceeded all capital adequacy requirements to which we were subject.

As of December 15, 2017, the most recent notification from the FDIC categorized Northwest Bank as “well capitalized” under the regulatory framework for prompt corrective action. To be categorized as “well capitalized,” the bank must maintain total risk-based, Tier 1 risk-based, CET 1 risk-based, and Tier 1 leverage ratios as set forth in the table. There are no conditions or events since that notification that management believes have changed the bank’s categories. 

The actual, required, and well capitalized levels as of December 31, 2017 and 2016 were as follows: 

	At December 31, 2017
					Minimum capital				Well capitalized
	Actual				requirements (1)				requirements
	Amount		Ratio		Amount		Ratio		Amount		Ratio
Total capital (to risk weighted assets)
Northwest Bancshares, Inc.	$	1,136,076	15.831	%	$	663,823	9.250	%	$	717,647	10.000	%
Northwest Bank	1,017,251		14.189	%	663,179		9.250	%	716,951		10.000	%
Tier 1 capital (to risk weighted assets)
Northwest Bancshares, Inc.	1,079,270		15.039	%	520,294		7.250	%	574,117		8.000	%
Northwest Bank	960,443		13.396	%	519,789		7.250	%	573,560		8.000	%
CET 1 capital (to risk weighted assets)
Northwest Bancshares, Inc.	971,395		13.536	%	412,647		5.750	%	466,470		6.500	%
Northwest Bank	960,443		13.396	%	412,247		5.750	%	430,170		6.000	%
Tier 1 capital (leverage) (to average assets)
Northwest Bancshares, Inc.	1,079,270		11.676	%	369,735		4.000	%	462,169		5.000	%
Northwest Bank	960,443		10.400	%	369,482		4.000	%	461,853		5.000	%

(1) Amounts and ratios include the 2017 capital conservation buffer of 1.250% with the exception of Tier 1 capital to average assets. For further information related to the capital conservation buffer, see Item 1. Business - "Supervision and Regulation".

	At December 31, 2016
					Minimum capital				Well capitalized
	Actual				requirements (1)				requirements
	Amount		Ratio		Amount		Ratio		Amount		Ratio
Total capital (to risk weighted assets)
Northwest Bancshares, Inc.	$	1,051,582	14.873	%	$	609,835	8.625	%	$	707,056	10.000	%
Northwest Bank	961,279		13.609	%	609,248		8.625	%	706,375		10.000	%
Tier 1 capital (to risk weighted assets)
Northwest Bancshares, Inc.	990,153		14.004	%	468,424		6.625	%	565,644		8.000	%
Northwest Bank	900,328		12.746	%	467,973		6.625	%	565,100		8.000	%
CET 1 capital (to risk weighted assets)
Northwest Bancshares, Inc.	882,278		12.478	%	362,366		5.125	%	459,586		6.500	%
Northwest Bank	900,328		12.746	%	362,017		5.125	%	459,144		6.500	%
Tier I capital (leverage) (to average assets)
Northwest Bancshares, Inc.	990,153		10.530	%	376,116		4.000	%	470,145		5.000	%
Northwest Bank	900,328		9.585	%	375,735		4.000	%	469,669		5.000	%

(1) Amounts and ratios include the 2016 capital conservation buffer of 0.625% with the exception of Tier 1 capital to average assets. For further information related to the capital conservation buffer, see Item 1. Business - "Supervision and Regulation".

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Contingent Liabilities

12 Months Ended

Dec. 31, 2017

Commitments and Contingencies Disclosure [Abstract]

Contingent Liabilities

Contingent Liabilities

We and our subsidiaries are subject to a number of asserted and unasserted claims encountered in the normal course of business. Management believes that the aggregate liability, if any, that may result from such potential litigation will not have a material adverse effect on our financial statements. However, we cannot presently determine whether or not any claims against us will have a material adverse effect on our results of operations in any future reporting period.

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Legal Proceedings

12 Months Ended

Dec. 31, 2017

Commitments and Contingencies Disclosure [Abstract]

Legal Proceedings

Legal Proceedings

We establish accruals for legal proceedings when information related to the loss contingencies represented by those matters indicates both that a loss is probable and that the amount of loss can be reasonably estimated.  As of December 31, 2017 we have not accrued for legal proceedings based on our analysis of currently available information which is subject to significant judgment and a variety of assumptions and uncertainties. Any such accruals are adjusted thereafter as appropriate to reflect changes in circumstances. Due to the inherent subjectivity of assessments and unpredictability of outcomes of legal proceedings, any amounts accrued may not represent the ultimate loss to us from legal proceedings.

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Components of Accumulated Other Comprehensive Income

12 Months Ended

Dec. 31, 2017

Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract]

Components of Accumulated Other Comprehensive Income

Components of Accumulated Other Comprehensive Income

The following table sets forth the components of accumulated other comprehensive income as of December 31, 2017 and 2016: 

	December 31,
	2017			2016
Unrealized gain on marketable securities available-for-sale	$	(4,409	)	395
Fair value of interest rate swaps	(691		)	(1,778	)
Defined benefit pension plans	(26,980		)	(26,608	)
Accumulated other comprehensive income	$	(32,080	)	(27,991	)

The following table shows the changes in accumulated other comprehensive income by component for the year ended December 31, 2017: 

	Unrealized gains and losses on securities available-for- sale			Change in fair value of interest rate swaps		Change in defined benefit pension plans		Total
Balance as of January 1,	$	395		(1,778	)	(26,608	)	(27,991	)
Other comprehensive income/ (loss) before reclassification adjustments	(2,478		)	1,087		(1,254	)	(2,645	)
Amounts reclassified from accumulated other comprehensive income (1), (2)	(2,326		)	—		882		(1,444	)
Net other comprehensive income/ (loss)	(4,804		)	1,087		(372	)	(4,089	)
Balance as of December 31,	$	(4,409	)	(691	)	(26,980	)	(32,080	)

(1) Consists of realized gains on securities (gain on sales of investments, net) of $3,814, net of tax (income tax expense) of $1,488.

(2) Consists of amortization of prior service cost (compensation and employee benefits) of $2,323 and amortization of net loss (compensation and employee benefits) of $(3,818), net of tax (income tax expense) of $613. 

The following table shows the changes in accumulated other comprehensive income by component for the year ended December 31, 2016: 

	Unrealized gains and losses on securities available-for- sale			Change in fair value of interest rate swaps		Change in defined benefit pension plans		Total
Balance as of January 1,	$	3,325		(2,779	)	(25,081	)	(24,535	)
Other comprehensive income/ (loss) before reclassification adjustments	(2,728		)	1,001		(2,399	)	(4,126	)
Amounts reclassified from accumulated other comprehensive income (1), (2)	(202		)	—		872		670
Net other comprehensive income/ (loss)	(2,930		)	1,001		(1,527	)	(3,456	)
Balance as of December 31,	$	395		(1,778	)	(26,608	)	(27,991	)

(1) Consists of realized gains on securities (gain on sales of investments, net) of $331 net of tax (income tax expense) of $(129).

(2) Consists of amortization of prior service cost (compensation and employee benefits) of $2,323 and amortization of net loss (compensation and employee benefits) of $(3,801), net of tax (income tax expense) of $606. 

The following table shows the changes in accumulated other comprehensive income by component for the year ended December 31, 2015: 

	Unrealized gains and losses on securities available-for- sale			Change in fair value of interest rate swaps		Change in defined benefit pension plans		Total
Balance as of January 1,	$	3,461		(4,078	)	(23,753	)	(24,370	)
Other comprehensive income/ (loss) before reclassification adjustments	315			1,299		(2,203	)	(589	)
Amounts reclassified from accumulated other comprehensive income (1), (2)	(451		)	—		875		424
Net other comprehensive income/ (loss)	(136		)	1,299		(1,328	)	(165	)
Balance as of December 31,	$	3,325		(2,779	)	(25,081	)	(24,535	)

(1) Consists of realized losses on securities (gain on sales of investments, net) of $740 net of tax (income tax expense) of $(289).

(2) Consists of amortization of prior service cost (compensation and employee benefits) of $2,323 and amortization of net loss (compensation and employee benefits) of $(3,758), net of tax (income tax expense) of $560.

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Parent Company Only Financial Statements - Condensed

12 Months Ended

Dec. 31, 2017

Condensed Financial Information of Parent Company Only Disclosure [Abstract]

Parent Company Only Financial Statements - Condensed

Parent Company Only Financial Statements - Condensed

Statements of Financial Condition

	December 31,
	2017		2016
Assets
Cash and cash equivalents	$	26,088	34,521
Marketable securities available-for-sale	545		4,413
Investment in bank subsidiary	1,200,799		1,193,175
Other assets	92,712		52,645
Total assets	$	1,320,144	1,284,754
Liabilities and Shareholders’ Equity
Liabilities:
Debentures payable	$	111,213	111,213
Other liabilities	1,207		2,878
Total liabilities	112,420		114,091
Shareholders’ equity	1,207,724		1,170,663
Total liabilities and shareholders’ equity	$	1,320,144	1,284,754

Statements of Income

	Years ended December 31,
	2017			2016		2015
Income:
Interest income	$	137		737		1,258
Other income	2,297			709		659
Dividends from bank subsidiary	90,000			50,000		135,000
Undistributed earnings from equity investment in bank subsidiary	7,255			2,760		(70,854	)
Total income	99,689			54,206		66,063
Expense:
Compensation and benefits	1,282			1,129		1,061
Other expense	553			561		1,356
Interest expense	4,666			4,560		4,926
Total expense	6,501			6,250		7,343
Income before income taxes	93,188			47,956		58,720
Federal and state income taxes	(1,279		)	(1,711	)	(1,820	)
Net income	$	94,467		49,667		60,540

Statements of Cash Flows

	Years ended December 31,
	2017			2016		2015
Operating activities:
Net income	$	94,467		49,667		60,540
Adjustments to reconcile net income to net cash provided by operating activities:
Undistributed earnings of subsidiary	(7,255		)	(2,760	)	70,854
Noncash stock benefit plan compensation expense	4,894			10,916		5,654
Gain on sale of marketable securities	(1,615		)	(43	)	(54	)
Net change in other assets and liabilities	(43,513		)	(63,533	)	(5,824	)
Net cash provided by/ (used in) operating activities	46,978			(5,753	)	131,170
Investing activities:
Net sale of marketable securities	2,800			(1,952	)	1,192
Acquisition, net of cash received	—			—		(89,398	)
Net cash provided by/ (used in) investing activities	2,800			(1,952	)	(88,206	)
Financing activities:
Cash dividends paid	(65,212		)	(60,156	)	(52,825	)
Share repurchases	—			(1,752	)	(7,847	)
Repayment of loan to ESOP	—			797		1,549
Redemption of junior subordinated debt	—			—		(8,119	)
Excess tax benefit from stock-based compensation	—			1,425		332
Proceeds from options exercised	7,001			10,856		4,303
Net cash used in financing activities	(58,211		)	(48,830	)	(62,607	)
Net decrease in cash and cash equivalents	$	(8,433	)	(56,535	)	(19,643	)
Cash and cash equivalents at beginning of year	$	34,521		91,056		110,699
Net decrease in cash and cash equivalents	(8,433		)	(56,535	)	(19,643	)
Cash and cash equivalents at end of year	$	26,088		34,521		91,056

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Derivative Financial Instruments Derivative Financial Instruments

12 Months Ended

Dec. 31, 2017

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative Financial Instruments

Derivative Financial Instruments

We are a party to derivative financial instruments in the normal course of business to manage our own exposure to fluctuations in interest rates and to meet the needs of our customers. The primary derivatives that we use are interest rate swaps and caps and foreign exchange contracts, which are entered into with counterparties that meet established credit standards. We believe that the credit risk inherent in all of our derivative contracts is minimal based on our credit standards and the netting and collateral provisions of the interest rate swap agreements

(a)     Derivatives Designated in Hedging Relationships

We are currently a counterparty to two interest rate swap agreements (swaps), designating the swaps as cash flow hedges.  The swaps are intended to protect against the variability of cash flows associated with Northwest Bancorp Capital Trust III and Northwest Bancorp Capital Trust IV.  The first swap modifies the re-pricing characteristics of Northwest Bancorp Capital Trust III, wherein for a 10 years period expiring in September 2018, the Company receives interest of three-month LIBOR from a counterparty and pays a fixed rate of 4.61% to the same counterparty calculated on a notional amount of $25.0 million.  The second swap modifies the re-pricing characteristics of Northwest Bancorp Capital Trust IV, wherein for a ten years period expiring in December 2018, the Company receives interest of three-month LIBOR from a counterparty and pays a fixed rate of 4.09% to the same counterparty calculated on a notional amount of $25.0 million.  The swap agreements were entered into with a counterparty that met our credit standards and the agreements contain collateral provisions protecting the at-risk party.  We believe that the credit risk inherent in the contracts is not significant.  At December 31, 2017, $1.6 million of cash was pledged as collateral to the counterparty.

These cash flow hedges are recorded within other liabilities on the consolidated statement of financial condition at their estimated fair value. At December 31, 2017, the fair value of the swap agreements was $(1.1) million, and there was no hedge ineffectiveness for any of the swaps discussed above. During the next twelve months, as the swaps expire, we estimate that $700,000 will be reclassified from accumulated other comprehensive income into interest expense.  

(b)     Derivatives Not Designated in Hedge Relationships

In addition to our derivatives designated in hedge relationships, we act as an interest rate or foreign exchange swap counterparty for certain commercial borrowers in the normal course of servicing our customers, which are accounted for at fair value. We manage our exposure to such interest rate or foreign exchange swaps by entering into corresponding and offsetting interest rate swaps with third parties that mirror the terms of the swaps we have with the commercial borrowers. These positions (referred to as “customer swaps”) directly offset each other and our exposure is fair value of the derivatives due to changes in credit risk of our commercial borrowers and third parties. Customer swaps are recorded within other assets or other liabilities on the consolidated statement of financial condition at their estimated fair value. Changes to the fair value of assets and liabilities arising from these derivatives are included, net, in other operating income in the consolidated statement of income.

The following table presents information regarding our derivative financial instruments, at December 31,:

	Asset derivatives			Liability derivatives
	Notional amount		Fair value	Notional amount	Fair value
2017:
Derivatives designated as hedging instruments:
Interest rate swap agreements	$	—	—	50,000	1,064
Derivatives not designated as hedging instruments:
Interest rate swap agreements	92,631		214	92,631	214
Foreign exchange swap agreements	—		—	12,344	61
Total derivatives	$	92,631	214	154,975	1,339
2016:
Derivatives designated as hedging instruments:
Interest rate swap agreements	$	—	—	50,000	2,736
Derivatives not designated as hedging instruments:
Interest rate swap agreements	10,559		238	10,559	238
Foreign exchange swap agreements	—		—	—	—
Total derivatives	$	10,559	238	60,559	2,974

The following table indicates the gain or loss recognized in income on derivatives for the periods indicated:

	For the years ended December 31,
	2017			2016	2015
Non-hedging swap derivatives:
Increase/ (decrease) in other income	$	(373	)	—	—
Hedging interest rate derivatives:
Increase in interest expense	1,599			1,866	2,922

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Selected Quarterly Financial Data - Unaudited

12 Months Ended

Dec. 31, 2017

Quarterly Financial Information Disclosure [Abstract]

Selected Quarterly Financial Data - Unaudited

Selected Quarterly Financial Data - Unaudited

	Quarters ended
	March 31,		June 30,	September 30,	December 31,
	(In thousands, except per share data)
2017:
Interest income	$	87,267	89,797	90,231	91,561
Interest expense	6,690		7,066	6,994	7,321
Net interest income	80,577		82,731	83,237	84,240
Provision for loan losses	4,637		5,562	3,027	6,525
Noninterest income	21,504		41,477	24,594	22,905
Noninterest expenses	71,646		73,262	68,799	71,896
Income before income taxes	25,798		45,384	36,005	28,724
Income tax expense	8,052		14,402	12,414	6,576
Net income	$	17,746	30,982	23,591	22,148
Basic earnings per share	$	0.18	0.31	0.23	0.22
Diluted earnings per share	$	0.17	0.30	0.23	0.22

	Quarters ended
	March 31,		June 30,		September 30,	December 31,
	(In thousands, except per share data)
2016:
Interest income	$	85,298	85,555		84,748	90,033
Interest expense	13,746		10,008		7,454	7,091
Net interest income	71,552		75,547		77,294	82,942
Provision for loan losses	1,660		4,199		5,538	2,145
Noninterest income	19,448		20,275		20,818	24,819
Noninterest expenses	63,275		102,122		73,680	68,761
Income before income taxes	26,065		(10,499	)	18,894	36,855
Income tax expense	8,081		(3,491	)	4,697	12,361
Net income	$	17,984	(7,008	)	14,197	24,494
Basic earnings per share	$	0.18	(0.07	)	0.14	0.24
Diluted earnings per share	$	0.18	(0.07	)	0.14	0.24

	Quarters ended
	March 31,		June 30,	September 30,	December 31,
	(In thousands, except per share data)
2015:
Interest income	$	76,880	75,970	81,091	85,639
Interest expense	13,899		13,792	14,150	14,486
Net interest income	62,981		62,178	66,941	71,153
Provision for loan losses	900		1,050	3,167	4,595
Noninterest income	14,625		16,525	18,140	19,546
Noninterest expenses	53,711		55,135	63,804	61,227
Income before income taxes	22,995		22,518	18,110	24,877
Income tax expense	6,825		7,213	5,238	8,684
Net income	$	16,170	15,305	12,872	16,193
Basic earnings per share	$	0.18	0.17	0.14	0.16
Diluted earnings per share	$	0.18	0.17	0.13	0.16

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Summary of Significant Accounting Policies (Policies)

12 Months Ended

Dec. 31, 2017

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Nature of Operations

Nature of Operations

Northwest Bancshares, Inc., a Maryland corporation headquartered in Warren, Pennsylvania, is the federal savings and loan holding company for its wholly owned subsidiary, Northwest Bank. Northwest Bank, a Pennsylvania chartered savings bank, offers personal and business deposit and loan products as well as investment management and insurance services through its 172 banking locations in Pennsylvania, New York, and Ohio.

Principles of Consolidation

Principles of Consolidation

The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries after elimination of all intercompany accounts and transactions.

Cash and Cash Equivalents

Cash and Cash Equivalents

For purposes of the statements of financial condition and cash flows, cash and cash equivalents include cash and amounts due from banks, interest-bearing deposits in other financial institutions, federal funds sold, and other short-term investments with original maturities of three months or less.

Investment Securities

Investment Securities

We classify marketable securities at the time of purchase as held-to-maturity, available-for-sale, or trading. Securities for which management has the intent and ability to hold until maturity are classified as held-to-maturity and are carried at cost, adjusted for amortization of premiums and accretion of discounts on a level yield basis (amortized cost).  If it is management’s intent at the time of purchase to hold securities for an indefinite period of time and/ or to use such securities as part of its asset/ liability management strategy, the securities are classified as available-for-sale and are carried at fair value, with unrealized gains and losses reported as accumulated other comprehensive income/ (loss), a separate component of shareholders’ equity, net of tax. Securities classified as available-for-sale include securities that may be sold in response to changes in interest rates, resultant prepayment risk, or other market factors. Securities that are bought and held principally for the purpose of selling them in the near term are classified as trading and are reported at fair value, with changes in fair value included in earnings. The cost of securities sold is determined on a specific identification basis. We held no securities classified as trading at or during the years ended December 31, 2017 and 2016.

On at least a quarterly basis, we review our investments for other-than-temporary impairment (“OTTI”).  An investment security is deemed impaired if the fair value of the investment is less than its amortized cost.  If an investment security is determined to be impaired, we evaluate whether the decline in value is other-than-temporary.  We consider whether or not we expect to receive all of the contractual cash flows from the investment security based on factors that include, but are not limited to the creditworthiness of the issuer and the historical and projected performance of the underlying collateral.  Also, we may evaluate the business and financial outlook of the issuer, as well as broader economic performance indicators.  We consider both our intent to sell and the likelihood that we will not have to sell the investment securities before recovery of their cost basis during our evaluation. Impairment that is deemed credit related is recognized in earnings while impairment deemed noncredit related is recorded in accumulated other comprehensive income, if we do not intend to sell nor it is not likely we will be required to sell the investment security.  If we intend to sell the investment security or if it is more likely than not that we will be required to sell the investment security, the entire impairment is recorded in earnings.

Loans Receivable

Loans Receivable

Our loan segments consist of Personal Banking and Business Banking loans.  Personal Banking loans include; residential mortgage, home equity and consumer loans.  Business Banking loans include; commercial real estate and commercial loans.  Originated loans are carried at their unpaid principal balance net of any deferred origination fees or costs and the allowance for loan losses. Interest income on loans is credited to income as earned. Interest earned on loans for which no payments were received during the month is accrued at month end. Accrued interest on loans more than 90 days delinquent is reversed and such loans are placed on nonaccrual status.

All loans are placed on nonaccrual status when principal or interest is 90 days or more delinquent or when there is reasonable doubt that interest or principal will not be collected in accordance with the contractual terms. Interest receipts on all nonaccrual and impaired loans are recognized as interest income when it has been determined that all principal and interest will be collected or are applied to principal when collectability of contractual principal is in doubt.  Nonaccrual loans generally are restored to an accrual basis when principal and interest become current and a period of performance has been established in accordance with the contractual terms, typically six months.

A loan is considered to be a troubled debt restructured loan ("TDR") when the borrower is experiencing financial difficulties and the restructuring constitutes a concession. TDRs may include modifications of terms of loans, receipts of assets from borrowers in partial or full satisfaction of loans, or a combination thereof. TDRs are impaired loans. A modified loan is determined to be a TDR based on the contractual terms as specified by the original loan agreement or the most recent modification. Once classified a TDR, a loan is removed from such classification under three circumstances: (1) the loan is paid off, (2) the loan is charged off, or (3) if, at the beginning of the current fiscal year, the loan has performed in accordance with the modified terms for a minimum of six consecutive months and at the time of modification the loan’s interest rate represented a then current market interest rate for a loan of similar risk.

Loan delinquency is measured based on the number of days since the payment due date.  Past due status is measured using the loan’s contractual maturity date.

Loan fees and certain direct loan origination costs are deferred and the net deferred fee or cost is then recognized using the level-yield method over the contractual life of the loan as an adjustment to interest income.

We identify certain residential mortgage loans which will be sold prior to maturity, as loans held for sale. These loans are recorded at the lower of amortized cost or fair value less estimated cost to sell. At December 31, 2017 and 2016, there were $3.1 million and $9.6 million residential mortgage loans classified as held for sale, respectively.

Acquired loans are initially measured at fair value with no carryover of the related allowance for loan losses. Determining the fair value of the loans involves estimating the amount and timing of principal and interest cash flows expected to be collected on the loans and discounting those cash flows at a market rate of interest.

The excess of cash flows expected at acquisition over the estimated fair value is referred to as the accretable discount and is recognized into interest income over the remaining life of the loan. The difference between contractually required payments at acquisition and the cash flows expected to be collected at acquisition is referred to as the nonaccretable discount. The nonaccretable discount represents estimated future credit losses expected to be incurred over the life of the loan. Subsequent decreases to the expected cash flows require us to evaluate the need for an allowance for loan losses. Subsequent improvements in expected cash flows result in the reversal of a corresponding amount of the nonaccretable discount which we then reclassify as accretable discount that is recognized into interest income over the remaining life of the loan using the interest method. Charge-offs of the principal amount on acquired loans would be first applied to the nonaccretable discount portion of the fair value adjustment.

Acquired loans that met the criteria for nonaccrual of interest prior to the acquisition may be considered performing upon acquisition, regardless of whether the customer is contractually delinquent, if we can reasonably estimate the timing and amount of the expected cash flows on such loans and if we expect to fully collect the new carrying value of the loans. As such, we may no longer consider the loan to be nonaccrual or nonperforming and may accrue interest on these loans, including the impact of any accretable discount. We have determined that we can reasonably estimate future cash flows on our current portfolio of acquired loans that are past due 90 days or more and on which we are accruing interest and we expect to fully collect the carrying value of the loans.

Allowance for Loan Losses and Provision for Loan Losses

Allowance for Loan Losses and Provision for Loan Losses

Provisions for estimated loan losses and the amount of the allowance for loan losses are based on losses inherent in the loan portfolio that are both probable and can be reasonably estimated at the date of the financial statements.

We consider a loan to be impaired when it is probable that we will be unable to collect all amounts due according to the contractual terms of the loan agreement. In evaluating whether a loan is impaired, we consider not only the amount that we expect to collect but also the timing of collection. Generally, if a delay in payment is insignificant (e.g., less than 30 days), a loan is not deemed to be impaired.

Business Banking loans greater than or equal to $1.0 million are reviewed to determine if they should be individually evaluated for impairment. Smaller balance, homogeneous loans (e.g., primarily residential mortgage, home equity and consumer loans) are evaluated collectively for impairment. When a loan is considered to be impaired, the amount of impairment is measured based on the present value of expected future cash flows discounted at the loan’s effective interest rate, the loan’s market price, or fair value of the collateral, less estimated cost to sell, if the loan is collateral dependent. Impairment losses are included in the allowance for loan losses. Impaired loans are charged-off or charged down when we believe that the ultimate collectability of a loan is not likely or the collateral value no longer supports the carrying value of the loan.

Interest income on non-performing loans is recognized using the cash basis method. For non-performing loans interest collected is credited to income in the period of recovery or applied to reduce principal if there is sufficient doubt about the collectability of principal.

The allowance for loan losses is shown as a valuation allowance to loans. The accounting policy for the determination of the adequacy of the allowance by portfolio segment requires us to make numerous complex and subjective estimates and assumptions relating to amounts which are inherently uncertain. The allowance for loan losses is maintained to absorb losses inherent in the loan portfolio as of the balance sheet date. The methodology used to determine the allowance for loan losses is designed to provide procedural discipline in assessing the appropriateness of the allowance for loan losses. Losses are charged against and recoveries are added to the allowance for loan losses.

For Business Banking loans the allowance for loan losses consists of:

• An allowance for impaired loans;

• An allowance for homogenous loans based on historical losses; and

• An allowance for homogenous loans based on environmental factors.

The allowance for impaired loans is based on individual analysis of all nonperforming loans greater than or equal to $1.0 million. The allowance is measured by the difference between the recorded value of impaired loans and their impaired value. The impaired value is either the present value of the expected future cash flows from the borrower, the market value of the loan, or the fair value of the collateral, less estimated cost to sell.

The allowance for homogeneous loans based on historical factors is a rolling three-year average of incurred losses, adjusted for a loss emergence period (the period of time from the event of loss to loss realization), applied to homogenous pools of loans categorized by similar risk characteristics, not including loans evaluated individually for impairment.

The allowance for homogeneous loans based on environmental factors augments the historical loss factors for changes in: economic conditions, lending policies and procedures, the nature and volume of the loan portfolio, management, delinquency trends, loan administration, collateral values, concentrations of credit, and other external factors including legal and regulatory factors.

For Personal Banking loans the allowance for loan losses consists of:

• An allowance for loans 90 days or more delinquent;

• An allowance for homogenous loans based on historical losses; and

• An allowance for homogenous loans based on environmental factors.

The allowance for loans 90 days or more delinquent is based on the loss history of loans that have become 90 days or more delinquent.  We apply a historical loss factor to homogeneous pools of loans that are 90 days or more delinquent.

The allowance for homogeneous loans based on historical losses is a rolling three-year average of actual losses incurred, adjusted for a loss realization period, applied to homogenous pools of loans categorized by similar risk characteristics, not including loans that are 90 days or more delinquent.

The allocation of the allowance for loan losses is inherently subjective, and the entire allowance for loan losses is available to absorb loan losses regardless of the nature of the loss.

Personal Banking loans are charged-off or charged down when they become 180 days delinquent, unless the borrower has filed for bankruptcy.  Business Banking loans are charged-off or charged down when, in our opinion, they are no longer collectible or when it has been determined that the collateral value no longer supports the carrying value of the loan, for loans that are collateral dependent.

We have not made any material changes to our methodology for the calculation of the allowance for loan losses during the current year.

Real Estate Owned

Real Estate Owned

Real estate owned is comprised of property either acquired through foreclosure or voluntarily conveyed by borrowers. These assets are recorded on the date acquired at the lower of the loan balance or fair value of the collateral, less estimated disposition costs, with the fair value being determined by an appraisal. Any initial write-down is charged to the allowance for loan losses. Subsequently, foreclosed assets are valued at the lower of the amount recorded at acquisition date or the current fair value, less estimated disposition costs. Any subsequent write-down or gains or losses realized from the disposition of such property are credited or charged to noninterest income.

Restricted Investment in Federal Home Loan Bank Stock

Restricted Investment in Federal Home Loan Bank Stock

Federal law requires a member institution of the Federal Home Loan Bank ("FHLB") system to hold stock of its district FHLB according to a predetermined formula. FHLB stock is carried at cost and evaluated or impairment based on the ultimate recoverability of the par value. FHLB stock can only be purchased, redeemed and transferred at par value. Dividends are reported in interest income in the Consolidated Statements of Income.

Premises and Equipment

Premises and Equipment

Premises and equipment are carried at cost, less accumulated depreciation and amortization. Depreciation is accumulated on a straight-line basis over the estimated useful lives of the related assets. Estimated lives range from three to 39 years. Amortization of leasehold improvements is accumulated on a straight-line basis over the terms of the related leases or the useful lives of the related assets, whichever is shorter.

Goodwill

Goodwill

Goodwill is generated from the premium paid for an acquisition and is allocated to reporting units, which are either our reportable segments or one level below.  Reporting units are identified based upon analyzing each individual operating segment. A reporting unit is defined as a distinct, separately identifiable component of an operating segment for which complete, discrete financial information is available that management regularly reviews. 

Goodwill is not subject to amortization but is tested for impairment at least annually and possibly more frequently if certain events occur or changes in circumstances arise. In testing goodwill for impairment, we have the option to first assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying value. If, after assessing all events and circumstances, we determine it is not more likely than not that the fair value of a reporting unit is less than its carrying value, then performing the two-step impairment test would be unnecessary. However, if we conclude otherwise, it would then be required to perform the first step of the goodwill impairment test, and continue to the second step, if necessary. Step 1 requires the fair value of each reporting unit be compared to its carrying amount, including goodwill. Determining the fair value of a reporting unit requires a high degree of subjective judgment, including developing cash flow projections, selecting appropriate discount rates, identifying relevant market comparables, incorporating general economic and market conditions and selecting an appropriate control premium. 

We conducted our annual impairment assessment as of June 30, 2017 by first performing a qualitative assessment of goodwill to determine if it was more likely than not that the fair value was less than the carrying value.  In performing a qualitative analysis, factors considered include, but are not limited to, macroeconomic conditions, industry and market conditions and overall financial performance.  The results of the qualitative assessment for 2017 indicated that it was not more likely than not that the fair value of the reporting unit was less than the carrying value.  Consequently, no additional quantitative two-step impairment test was required, and no impairment was recorded in 2017.  As of June 30, 2016, we performed a quantitative impairment test that did not result in any impairment.  Future events could cause us to conclude that goodwill has become impaired, which would result in recording an impairment loss. There were no changes in our operations that would cause us to update the assessment performed as of June 30, 2017 and 2016. Accordingly, we have determined that goodwill is not impaired as of December 31, 2017 and 2016.

Core Deposit and Other Identifiable Intangibles

Core Deposit and Other Identifiable Intangibles

Through the assistance of an independent third party, we analyze and prepare a core deposit study for all bank acquisitions or other identifiable intangible asset study, such as customer lists, for all non-bank acquisitions. The core deposit study reflects the cumulative present value benefit of acquiring deposits versus an alternative source of funding. The other identifiable intangible asset study reflects the cumulative present value benefit of acquiring the income stream from an existing customer base versus developing new business relationships. Based upon analysis, the amount of the premium related to the core deposits or other identifiable intangibles of the business purchased is calculated along with the estimated life of the intangible. The intangible, which is recorded in other intangible assets, is then amortized to expense on an accelerated basis over an approximate life of typically between seven to eleven years.

Bank-Owned Life Insurance

Bank-Owned Life Insurance

We own insurance on the lives of a certain group of current and former employees and directors. The policies were purchased to help offset the increase in the costs of various benefit plans, including healthcare, as well as the directors deferred compensation plan.  The cash surrender value of these policies is included as an asset on the consolidated statements of financial condition, and any increases in the cash surrender value are recorded as tax-free noninterest income on the consolidated statements of income. In the event of the death of an insured individual covered by these policies, after distribution to the insured’s beneficiaries, if any, we receive a tax-free death benefit, which is recorded as noninterest income.

Deposits

Deposits

Interest on deposits is accrued and charged to expense monthly and is paid or credited in accordance with the terms of the accounts.

Pension Plans

Pension Plans

We maintain multiple noncontributory defined benefit pension plans for substantially all of our employees.  The net periodic pension cost has been calculated using service cost, interest cost, expected returns on plan assets and net amortization.

Income Taxes

Income Taxes

We join with our wholly owned subsidiaries in filing a consolidated federal income tax return.  In accordance with an intercompany tax allocation agreement, the applicable federal income tax expense or benefit is allocated to each subsidiary based upon taxable income or loss calculated on a separate company basis.  Each subsidiary is responsible for payment of its own federal income tax liability or receives reimbursement of federal income tax benefit.  In addition, deferred taxes are calculated and maintained on a separate company basis.

We account for income taxes under the asset and liability method.  The objective of the asset and liability method is to establish deferred tax assets and liabilities for temporary differences between the financial reporting and tax basis of our assets and liabilities based on the tax rates expected to be in effect when such amounts are realized or settled. The effect on deferred tax assets and liabilities with regard to a change in tax rates is recognized in the tax provision in the period the change is enacted.

Stock-Related Compensation

Stock-Related Compensation

We determine the fair value of each option award, estimated on the grant date, using the Black-Scholes-Merton option-pricing model. The Black-Scholes-Merton option-pricing model uses variables including; expected volatilities, expected term, risk-free discount rate and annual rate of quarterly dividends. Expected volatilities are based on historical volatility of the Company’s stock. The expected terms are based upon actual exercise and forfeiture experience of previous option grants. The risk-free rate is based on yields on U.S. Treasury securities of a similar maturity to the expected term of the options.

Segment Reporting

Segment Reporting

As a result of the closure of the Northwest Consumer Discount Company in the third quarter 2017, we have determined that we have one reportable segment beginning in the fourth quarter 2017.  The Company provides services traditionally offered by full-service community banks, including business and personal deposit accounts and business and personal loans, as well as insurance, brokerage and investment management and trust services.  The Company’s non-banking activities are immaterial and, therefore, separate information has not been disclosed.

Derivative financial instruments

Derivative financial instruments

We recognize all derivative financial instruments as either assets or liabilities in the balance sheet and measure those instruments at fair value.  The accounting for changes in the fair value of a derivative depends on the intended use of the derivative and the resulting designation.  An entity that elects to use hedge accounting is required, at inception, to establish the method it will use for assessing the effectiveness of the hedging derivative and the measurement approach for determining the ineffective aspect of the hedge.  Those methods must be consistent with our approach to managing risk.

We utilize interest rate swap agreements as part of the management of interest rate risk to hedge the interest rate risk on our trust preferred debentures.  Amounts receivable or payable are recognized as accrued under the terms of the agreements and the differential is recorded as an adjustment to interest expense.  The interest rate swaps are designated as cash flow hedges, with the effective portion of the derivative’s unrealized gain or loss recorded as a component of other comprehensive income which is subsequently reclassified into earnings in the period that the hedged forecasted transaction affects earnings. The ineffective portion of the unrealized gain or loss, if any, would be recorded in other expense. For derivatives that are not designated as hedging instruments, any gain or loss is recognized immediately in earnings.

Off-Balance-Sheet Instruments

Off-Balance-Sheet Instruments

In the normal course of business, we extend credit in the form of loan commitments, undisbursed lines of credit, and standby letters of credit. These off-balance-sheet instruments involve, to various degrees, elements of credit and interest rate risk not reported in the consolidated statement of financial condition. We utilize the same underwriting standards for these instruments as other extensions of credit.

Use of Estimates

Use of Estimates

The preparation of financial statements, in conformity with accounting principles generally accepted in the United States of America, requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amount of revenues and expenses during the reporting period. The estimates and assumptions that we deem important to our financial statements relate to the allowance for loan losses, the accounting treatment and valuation of our investment securities portfolio, the analysis of the carrying value of goodwill, pension and income taxes. These estimates and assumptions are based on management’s best estimates and judgment and we evaluate them using historical experience and other factors, including the current economic environment. We adjust our estimates and assumptions when facts and circumstances dictate. As future events cannot be determined, actual results could differ significantly from our estimates.

Reclassification of Prior Years' Statements

Reclassification of Prior Years’ Statements

Certain items previously reported have been reclassified to conform with the current year’s reporting format.

Recent Accounting Pronouncements

Recent Accounting Pronouncements

In May 2014 the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2014-09, “Revenue from Contracts with Customers (Topic 606)”. This guidance supersedes the revenue recognition requirements in Topic 605, Revenue Recognition, and most industry-specific guidance. The core principle of this guidance requires an entity to recognize revenue upon the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services and provides five steps to be analyzed to accomplish the core principle. This guidance is effective retrospectively for annual reporting periods beginning after December 15, 2017, including interim periods within those years and early adoption is not permitted. Our revenue is comprised of net interest income on financial assets and financial liabilities, which is explicitly excluded from the scope of ASU 2014-09, and non-interest income. With respect to non-interest income we are complete with our overall assessment of revenue streams and review of related contracts potentially affected by the ASU, including service charges and fees, trust and other financial services income, insurance commission income, and other operating income. The adoption of this ASU will not materially change the method in which we currently recognize revenue for these revenue streams. We are also complete with our evaluation of certain costs related to these revenue streams to determine whether such costs should be presented as expenses or contra-revenue (i.e., gross vs. net). We adopted ASU No. 2014-09 on January 1, 2018 utilizing the modified retrospective approach. Since there was no net income impact, a cumulative effect adjustment to opening retained earnings was deemed not necessary. We are completing our evaluation of the ASU's expanded disclosure requirements and expect them to be primarily qualitative in nature, such as providing greater detail on revenue streams and related performance obligations.

In January 2016 the FASB issued ASU 2016-01, “Financial Instruments - Overall (Subtopic 825-10)”. This guidance requires equity investments (except those accounted for under the equity method of accounting or those that result in consolidation of the investee) to be measured at fair value with changes in fair value recognized in net income. Additionally, this guidance requires entities to use the exit price notion when measuring the fair value of financial instruments for disclosure purposes and eliminates the requirement for public business entities to disclose the method(s) and significant assumptions used to estimate the fair value that is required to be disclosed for financial instruments measured at amortized cost on the balance sheet. This guidance is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. We do not expected this guidance to have a material impact on our results of operations and financial position.

In February 2016 the FASB issued ASU 2016-2, “Leases”. This guidance requires a lessee to recognize in the statement of financial condition a liability to make lease payments and a right-of-use asset representing the right to use the underlying asset for the term of the lease. Optional periods should only be recognized if the lessee is reasonably certain to exercise the option. For leases with a term of twelve months or less, the lessee is permitted not to recognize lease assets and lease liabilities and should recognize lease expense for such leases generally on a straight-line basis over the term of the lease. This guidance is effective for annual periods beginning after December 15, 2018, including interim periods within those years and early adoption is permitted. We are currently evaluating the impact this guidance will have on our results of operations and financial position.

In June 2016, the FASB issued ASU 2016-13, "Financial Instruments - Credit Losses (Topic 326) - Measurement of Credit Losses on Financial Instruments", which eliminates the probable initial recognition threshold for credit losses requiring, instead, that all financial assets (or group of financial assets) measured at amortized cost be presented at the net amount expected to be collected inclusive of the entity’s current estimate of all lifetime expected credit losses. This guidance also applies to certain off-balance-sheet credit exposures such as unfunded commitments and non-derivative financial guarantees. The allowance for credit losses is a valuation account that is deducted from the amortized cost basis of the financial asset(s) in order to present the net carrying value at the amount expected to be collected on the financial asset. The measurement of expected credit losses is based on relevant information about past events, including historical experience, current conditions, and reasonable and supportable forecasts that affect the collectability of the reported amount. The income statement under this guidance will reflect the initial recognition of current expected credit losses for newly recognized assets, as well as any increases or decreases of expected credit losses that have occurred during the period. This guidance retains many currently-existing disclosures related to the credit quality of an entity’s assets and the related allowance for credit losses amended to reflect the change to an expected credit loss methodology, as well as enhanced disclosures to provide information to users at a more disaggregated level. Upon adoption, ASU 2016-13 provides for a modified retrospective transition by means of a cumulative-effect adjustment to equity as of the beginning of the period in which the guidance is effective, except for debt securities for which an other-than-temporary impairment has previously been recognized. For these debt securities, a prospective transition is provided in order to maintain the same amortized cost prior to and subsequent to the effective date of the ASU. This guidance is effective for annual reporting periods beginning after December 15, 2019, and interim periods within those annual periods with early adoption permitted for fiscal years beginning after December 15, 2018, and interim periods within those annual periods. Management created a formal working group to govern the implementation of these amendments consisting of key stakeholders from finance, risk, and accounting. We are currently in the process of designing current expected credit loss estimation methodologies and systems, and collecting data to be able to comply with the standard. We are also evaluating the effect this guidance will have on our results of operations, financial position and related disclosures. The impact of the ASU will depend upon the state of the economy and the nature of our portfolios at the date of adoption.

In August 2016, the FASB issued ASU No. 2016-15, “Classification of Certain Cash Receipts and Cash Payments”. The main objective of this ASU is to reduce diversity in practice in how certain transactions are classified in the statement of cash flows. The amendments in this Update provide guidance on the following eight specific cash flow issues: debt prepayment or debt extinguishment costs, settlement of zero-coupon debt instruments, contingent consideration payments made after a business combination, proceeds from the settlement of insurance claims, proceeds from the settlement of bank-owned life insurance (BOLI) policies, distributions received from equity method investments, beneficial interests in securitization transactions, and separately identifiable cash flows and application of the predominance principle. This guidance is effective for interim and annual reporting periods in fiscal years beginning after December 15, 2017. Early adoption is permitted, provided that all of the amendments are adopted in the same period. The provisions of this ASU will not materially impact our results of operations and financial position.

In January 2017 the FASB issued ASU 2017-04, "Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment". This guidance eliminates the requirement to determine the fair value of individual assets and liabilities of a reporting unit to measure goodwill impairment. Under this guidance goodwill impairment testing will be performed by comparing the fair value of the reporting unit with its carrying amount and recognizing an impairment charge for the amount by which the carrying amount exceeds the reporting unit's fair value. This guidance is effective for annual and interim goodwill impairment tests in fiscal years beginning after December 15, 2019, and should be applied on a prospective basis. Early adoption is permitted for annual and interim goodwill impairment testing dates after January 1, 2017. We do not expected this guidance to have a material impact on our consolidated financial statements.

In March 2017, the FASB issued ASU No. 2017-07, “Compensation Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Costs and Net Periodic Postretirement Benefit Costs". This guidance provides financial statement users with clearer and disaggregated information related to the components of net periodic benefit cost and improve transparency of the presentation of net periodic benefit cost in the financial statements. This guidance is effective for annual and interim periods beginning after December 15, 2017. Early adoption is permitted and this guidance should be applied retrospectively. We intend to early adopt the provisions of this standard effective with our March 31, 2018 quarterly report on Form 10-Q and do not anticipate that the adoption of this guidance will not have a material impact on our results of operations, however it will impact the presentation of our Consolidated Statements of Income.

 In March 2017 the FASB issued ASU 2017-08, "Receivables - Nonrefundable Fees and Other Costs (Subtopic 310-20): Premium Amortization on Purchased Callable Debt Securities". This guidance shortens the amortization period for certain callable debt securities held at a premium to the earliest call date from the maturity date. This guidance is effective for annual and interim periods beginning after December 15, 2018. Early adoption is permitted in any interim period. We intend to early adopt the provisions of this standard effective with our March 31, 2018 quarterly report on Form 10-Q and do not expect the adoption to have a material impact on our results of operations or financial position.

In May 2017 the FASB issued ASU 2017-09, “Compensation - Stock Compensation (Topic 718) - Scope of Modification Accounting”. This guidance clarifies when changes to the terms or conditions of a share-based payment award must be accounted for as modifications. Under ASU 2017-09, an entity will not apply modification accounting to a share-based payment award if all of the following are the same immediately before and after the change: (i) the award's fair value, (ii) the award's vesting conditions and (iii) the award's classification as an equity or liability instrument. This guidance is effective for annual and interim periods beginning after December 15, 2017 and is not expected to have a material impact on our consolidated financial statements.

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Marketable Securities (Tables)

12 Months Ended

Dec. 31, 2017

Investments, Debt and Equity Securities [Abstract]

Schedule of the portfolio of investment securities available-for-sale

Marketable securities available-for-sale at December 31, 2017 are as follows: 

	Amortized cost		Gross unrealized holding gains	Gross unrealized holding losses		Fair value
Debt issued by the U.S. government and agencies:
Due in one year or less	$	1	—	—		1
Debt issued by government sponsored enterprises:			3
Due in one year or less	66,566		14	(289	)	66,291
Due after one year through five years	140,624		—	(2,402	)	138,222
Due after five years through ten years	—		—	—		—
Due after ten years	4,833		—	(77	)	4,756
Equity securities	551		29	(6	)	574
Municipal securities:
Due in one year or less	2,492		7	(1	)	2,498
Due after one year through five years	7,072		82	(6	)	7,148
Due after five years through ten years	14,576		171	—		14,747
Due after ten years	26,371		292	—		26,663
Corporate debt issues:
Due after ten years	909		—	—		909
Residential mortgage-backed securities:
Fixed rate pass-through	144,411		1,108	(2,817	)	142,702
Variable rate pass-through	33,079		1,464	(6	)	34,537
Fixed rate non-agency CMOs	15		—	—		15
Fixed rate agency CMOs	284,320		37	(5,271	)	279,086
Variable rate agency CMOs	74,274		249	(137	)	74,386
Total residential mortgage-backed securities	536,099		2,858	(8,231	)	530,726
Total marketable securities available-for-sale	$	800,094	3,453	(11,012	)	792,535

Marketable securities available-for-sale at December 31, 2016 are as follows:

	Amortized cost		Gross unrealized holding gains	Gross unrealized holding losses		Fair value
Debt issued by the U.S. government and agencies:
Due in one year or less	$	6	—	—		6
Debt issued by government sponsored enterprises:
Due in one year or less	74,980		5	(33	)	74,952
Due after one year through five years	220,937		203	(2,504	)	218,636
Due after five years through ten years	585		—	(3	)	582
Due after ten years	—		—	—		—
Equity securities	3,351		1,095	(6	)	4,440
Municipal securities:
Due in one year or less	2,449		7	—		2,456
Due after one year through five years	9,448		105	(21	)	9,532
Due after five years through ten years	11,794		137	(1	)	11,930
Due after ten years	38,141		1,027	(16	)	39,152
Corporate debt issues:
Due after ten years	14,367		2,935	(322	)	16,980
Residential mortgage-backed securities:
Fixed rate pass-through	175,398		1,849	(2,680	)	174,567
Variable rate pass-through	43,587		2,007	(6	)	45,588
Fixed rate non-agency CMOs	100		1	—		101
Fixed rate agency CMOs	165,535		185	(3,455	)	162,265
Variable rate agency CMOs	64,874		306	(167	)	65,013
Total residential mortgage-backed securities	449,494		4,348	(6,308	)	447,534
Total marketable securities available-for-sale	$	825,552	9,862	(9,214	)	826,200

Schedule of the portfolio of investment securities held-to-maturity

Marketable securities held to maturity at December 31, 2016 are as follows: 

	Amortized cost		Gross unrealized holding gains	Gross unrealized holding losses	Fair value
Municipal securities:
Due after ten years	$	4,808	65	—	4,873
Residential mortgage-backed securities:
Fixed rate pass-through	4,807		217	—	5,024
Variable rate pass-through	2,848		58	—	2,906
Fixed rate agency CMOs	6,674		94	—	6,768
Variable rate agency CMOs	841		14	—	855
Total residential mortgage-backed securities	15,170		383	—	15,553
Total marketable securities held-to-maturity	$	19,978	448	—	20,426

Marketable securities held to maturity at December 31, 2017 are as follows: 

	Amortized cost		Gross unrealized holding gains	Gross unrealized holding losses		Fair value
Residential mortgage-backed securities:
Fixed rate pass-through	$	3,760	140	—		3,900
Variable rate pass-through	2,283		64	—		2,347
Fixed rate agency CMOs	22,906		20	(248	)	22,678
Variable rate agency CMOs	729		13	—		742
Total residential mortgage-backed securities	29,678		237	(248	)	29,667
Total marketable securities held-to-maturity	$	29,678	237	(248	)	29,667

Information regarding the issuers and the carrying values of the entity's mortgage-backed securities

The following table presents information regarding the issuers and the carrying values of our mortgage-backed securities at December 31, 2017 and 2016: 

	December 31,
	2017		2016
Residential mortgage backed securities:
FNMA	$	286,031	210,373
GNMA	37,796		42,221
FHLMC	236,007		202,822
SBA	—		6,608
Other (including non-agency)	570		680
Total residential mortgage-backed securities	$	560,404	462,704

Schedule of the fair value and gross unrealized losses on investment securities, aggregated by investment category and length of time individual securities have been in a continuous unrealized loss position

The following table shows the fair value and gross unrealized losses on investment securities, aggregated by investment category and length of time that the individual securities have been in a continuous unrealized loss position at December 31, 2017: 

	Less than 12 months				12 months or more			Total
			Unrealized			Unrealized			Unrealized
	Fair value		loss		Fair value	loss		Fair value	loss
Government sponsored enterprises	$	5,006	(7	)	197,695	(2,761	)	202,701	(2,768	)
Corporate debt issues	—		—		—	—		—	—
Equity securities	—		—		544	(6	)	544	(6	)
Municipal securities	4,563		(7	)	—	—		4,563	(7	)
Residential mortgage-backed securities - agency	239,703		(2,522	)	202,344	(5,957	)	442,047	(8,479	)
Total temporarily impaired securities	$	249,272	(2,536	)	400,583	(8,724	)	649,855	(11,260	)

The following table shows the fair value and gross unrealized losses on investment securities, aggregated by investment category and length of time that the individual securities have been in a continuous unrealized loss position at December 31, 2016:

	Less than 12 months				12 months or more			Total
			Unrealized			Unrealized			Unrealized
	Fair value		loss		Fair value	loss		Fair value	loss
Government sponsored enterprises	$	238,003	(2,448	)	9,205	(92	)	247,208	(2,540	)
Corporate debt issues	—		—		2,107	(322	)	2,107	(322	)
Equity securities	—		—		544	(6	)	544	(6	)
Municipal securities	5,621		(37	)	66	(1	)	5,687	(38	)
Residential mortgage-backed securities - agency	213,662		(3,837	)	87,723	(2,471	)	301,385	(6,308	)
Total temporarily impaired securities	$	457,286	(6,322	)	99,645	(2,892	)	556,931	(9,214	)

Schedule of categories of investment securities on which other-than-temporary impairment charges have been recorded in earnings

The following table sets forth the categories of investment securities as of December 31, 2017 on which other-than-temporary impairment charges have been recorded in earnings:

	Total				Accumulated
Category	Amortized cost		Fair value	Unrealized gain	impairment charges
Freddie Mac preferred shares	$	1	30	29	119
Trust preferred investments	—		—	—	352
Total	$	1	30	29	471

Schedule of the cumulative roll forward of credit related impairment losses recognized in earnings for debt securities held and not intended to be sold

The table below shows a cumulative roll forward of credit related impairment losses recognized in earnings for debt securities held and not intended to be sold: 

	December 31,
	2017			2016
Beginning balance as of January 1, (1)	$	7,942		8,436
Credit losses on debt securities for which other-than-temporary impairment was not previously recognized	—			—
Credit losses on debt securities for which other-than-temporary impairment was previously recognized	(7,265		)	(494	)
Reduction for securities sold realized during the year	(325		)	—
Additional credit losses on debt securities for which other-than-temporary impairment was previously recognized	—			—
Ending balance as of December 31,	$	352		7,942

(1) The beginning balance represents credit losses included in other-than-temporary impairment charges recognized on debt securities in prior periods.

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Loans Receivable and Allowance for Loan Losses (Tables)

12 Months Ended

Dec. 31, 2017

Receivables [Abstract]

Summary of loans receivable

Loans receivable at December 31, 2017 and 2016 are summarized in the table below: 

	December 31, 2017							December 31, 2016
	Originated			Acquired		Total		Originated		Acquired		Total
Personal Banking:
Residential mortgage loans (1)	$	2,658,726		113,823		2,772,549		2,565,620		133,511		2,699,131
Home equity loans	1,051,558			258,797		1,310,355		1,042,913		302,457		1,345,370
Consumer finance loans (2)	18,619			—		18,619		48,981		—		48,981
Consumer loans	540,832			97,877		638,709		418,656		163,622		582,278
Total Personal Banking	4,269,735			470,497		4,740,232		4,076,170		599,590		4,675,760
Commercial Banking:
Commercial real estate loans	2,303,179			296,161		2,599,340		2,140,678		372,991		2,513,669
Commercial loans	572,341			60,822		633,163		481,543		75,676		557,219
Total Commercial Banking	2,875,520			356,983		3,232,503		2,622,221		448,667		3,070,888
Total loans receivable, gross	7,145,255			827,480		7,972,735		6,698,391		1,048,257		7,746,648
Deferred loan costs	26,255			1,527		27,782		20,081		2,294		22,375
Allowance for loan losses	(50,572		)	(6,223	)	(56,795	)	(55,293	)	(5,646	)	(60,939	)
Undisbursed loan proceeds:
Residential mortgage loans	(10,067		)	—		(10,067	)	(11,638	)	—		(11,638	)
Commercial real estate loans	(141,967		)	(2,647	)	(144,614	)	(168,595	)	(2,985	)	(171,580	)
Commercial loans	(51,143		)	(1,284	)	(52,427	)	(26,168	)	(2,290	)	(28,458	)
Total loans receivable, net	$	6,917,761		818,853		7,736,614		6,456,778		1,039,630		7,496,408

(1) Includes $3.1 million and $9.6 million of loans held for sale at December 31, 2017 and 2016, respectively.

(2) Represents loans from our consumer finance subsidiary that was closed in 2017 which are no longer being originated.

Schedule of information related to the outstanding principal balance and related carrying value of acquired loans

The following table provides information related to the outstanding principal balance and related carrying value of acquired loans for the dates indicated: 

	December 31,
	2017		2016
Acquired loans evaluated individually for future credit losses:
Outstanding principal balance	$	9,735	16,108
Carrying value	6,875		12,665
Acquired loans evaluated collectively for future credit losses:
Outstanding principal balance	824,205		1,040,378
Carrying value	818,201		1,032,611
Total acquired loans:
Outstanding principal balance	833,940		1,056,486
Carrying value	825,076		1,045,276

Schedule of the changes in the accretable discount

The following table provides information related to the changes in the accretable discount, which includes income recognized from contractual cash flows for the dates indicated:

	Total
Balance at December 31, 2015	$	2,019
Accretion	(1,170		)
Net reclassification from nonaccretable yield	1,338
Balance at December 31, 2016	2,187
Accretion	(1,318		)
Net reclassification from nonaccretable yield	671
Balance at December 31, 2017	$	1,540

Schedule of the composition of impaired loans by portfolio segment and by class of financing receivable

The following table provides information related to the composition of impaired loans by portfolio segment and by class of financing receivable at and for the year ended December 31, 2017: 

	Nonaccrual  loans 90 or  more days  delinquent		Nonaccrual  loans less  than 90 days  delinquent	Loans less  than 90 days  delinquent  reviewed for  impairment	TDRs less  than 90 days  delinquent  not included  elsewhere	Total  impaired  loans	Average  recorded  investment  in impaired  loans	Interest  income  recognized  on impaired  loans
Personal Banking:
Residential mortgage loans	$	13,509	1,282	—	6,814	21,605	21,531	892
Home equity loans	7,251		1,656	—	1,449	10,356	9,150	452
Consumer finance loans	199		—	—	—	199	379	20
Consumer loans	3,617		1,056	—	—	4,673	4,042	188
Total Personal Banking	24,576		3,994	—	8,263	36,833	35,102	1,552
Commercial Banking:
Commercial real estate loans	15,361		13,112	4,431	4,123	37,027	49,981	1,758
Commercial loans	3,140		4,272	906	2,447	10,765	12,110	672
Total Commercial Banking	18,501		17,384	5,337	6,570	47,792	62,091	2,430
Total	$	43,077	21,378	5,337	14,833	84,625	97,193	3,982

The following table provides information related to the composition of impaired loans by portfolio segment and by class of financing receivable at and for the year ended December 31, 2016: 

	Nonaccrual  loans 90 or  more days  delinquent		Nonaccrual  loans less  than 90 days  delinquent	Loans less  than 90 days  delinquent  reviewed for  impairment	TDRs less  than 90 days  delinquent  not included  elsewhere	Total  impaired  loans	Average  recorded  investment  in impaired  loans	Interest  income  recognized  on impaired  loans
Personal Banking:
Residential mortgage loans	$	13,169	5,095	—	5,929	24,193	24,483	1,079
Home equity loans	5,552		2,313	—	1,439	9,304	9,234	496
Consumer finance loans	743		—	—	—	743	772	35
Consumer loans	3,080		1,286	—	—	4,366	2,931	131
Total Personal Banking	22,544		8,694	—	7,368	38,606	37,420	1,741
Commercial Banking:
Commercial real estate loans	19,264		19,460	3,622	11,582	53,928	64,350	2,864
Commercial loans	3,373		6,201	2,837	3,116	15,527	16,905	991
Total Commercial Banking	22,637		25,661	6,459	14,698	69,455	81,255	3,855
Total	$	45,181	34,355	6,459	22,066	108,061	118,675	5,596

The following table provides information related to the composition of impaired loans by portfolio segment and by class of financing receivable at and for the year ended December 31, 2015:

	Nonaccrual  loans 90 or  more days  delinquent		Nonaccrual  loans less  than 90 days  delinquent	Loans less  than 90 days  delinquent  reviewed for  impairment	TDRs less  than 90 days  delinquent  not included  elsewhere	Total  impaired  loans	Average  recorded  investment  in impaired  loans	Interest  income  recognized  on impaired  loans
Personal Banking:
Residential mortgage loans	$	15,810	3,962	—	5,086	24,858	24,554	944
Home equity loans	5,650		1,872	—	1,847	9,369	9,644	497
Consumer finance loans	792		—	—	—	792	768	29
Consumer loans	2,108		552	—	—	2,660	2,209	72
Total Personal Banking	24,360		6,386	—	6,933	37,679	37,175	1,542
Commercial Banking:
Commercial real estate loans	16,449		16,972	16,121	16,467	66,009	77,166	3,226
Commercial loans	2,459		5,036	2,014	4,654	14,163	16,187	694
Total Commercial Banking	18,908		22,008	18,135	21,121	80,172	93,353	3,920
Total	$	43,268	28,394	18,135	28,054	117,851	130,528	5,462

The following table provides information related to purchased credit impaired loans by portfolio segment and by class of financing receivable at and for the year ended December 31, 2017: 

	Carrying value		Outstanding principal balance	Related impairment reserve	Average recorded investment in impaired loans	Interest income/ accretion recognized
Personal Banking:
Residential mortgage loans	$	1,182	1,880	24	1,251	181
Home equity loans	1,143		2,219	21	1,253	157
Consumer loans	59		160	4	97	51
Total Personal Banking	2,384		4,259	49	2,601	389
Commercial Banking:
Commercial real estate loans	4,388		5,363	39	6,992	914
Commercial loans	103		113	—	177	15
Total Commercial Banking	4,491		5,476	39	7,169	929
Total	$	6,875	9,735	88	9,770	1,318

The following table provides information related to purchased credit impaired loans by portfolio segment and by class of financing receivable at and for the year ended December 31, 2016:

	Carrying value		Outstanding principal balance	Related impairment reserve	Average recorded investment in impaired loans	Interest income/ accretion recognized
Personal Banking:
Residential mortgage loans	$	1,319	2,062	204	1,650	202
Home equity loans	1,363		2,669	8	1,724	185
Consumer loans	136		303	3	201	51
Total Personal Banking	2,818		5,034	215	3,575	438
Commercial Banking:
Commercial real estate loans	9,596		10,809	52	10,942	721
Commercial loans	251		265	—	249	11
Total Commercial Banking	9,847		11,074	52	11,191	732
Total	$	12,665	16,108	267	14,766	1,170

Schedule of the changes in the allowance for losses on loans receivable

The following table provides information related to changes in the allowance for losses on loans receivable for the year ended December 31, 2017: 

	Balance December 31, 2017		Provision		Charge-offs		Recoveries	Balance December 31, 2016
Originated loans
Personal Banking:
Residential mortgage loans	$	3,824	(390	)	(834	)	392	4,656
Home equity loans	4,072		1,474		(1,080	)	192	3,486
Consumer finance loans	3,968		8,444		(8,369	)	448	3,445
Consumer loans	8,475		13,601		(11,128	)	1,473	4,529
Total Personal Banking	20,339		23,129		(21,411	)	2,505	16,116
Commercial Banking:
Commercial real estate loans	19,911		(3,663	)	(1,344	)	1,251	23,667
Commercial loans	10,322		(4,777	)	(2,462	)	2,051	15,510
Total Commercial Banking	30,233		(8,440	)	(3,806	)	3,302	39,177
Total originated loans	50,572		14,689		(25,217	)	5,807	55,293
Acquired loans
Personal Banking:
Residential mortgage loans	131		185		(205	)	80	71
Home equity loans	762		503		(1,179	)	391	1,047
Consumer loans	890		765		(795	)	267	653
Total Personal Banking	1,783		1,453		(2,179	)	738	1,771
Commercial Banking:
Commercial real estate loans	3,549		2,631		(2,830	)	740	3,008
Commercial loans	891		978		(1,028	)	74	867
Total Commercial Banking	4,440		3,609		(3,858	)	814	3,875
Total acquired loans	6,223		5,062		(6,037	)	1,552	5,646
Total	$	56,795	19,751		(31,254	)	7,359	60,939

The following table provides information related to changes in the allowance for losses on loans receivable for the year ended December 31, 2016: 

	Balance December 31, 2016		Provision		Charge-offs		Recoveries	Balance December 31, 2015
Originated loans
Personal Banking:
Residential mortgage loans	$	4,656	2,906		(3,228	)	286	4,692
Home equity loans	3,486		293		(1,090	)	342	3,941
Consumer finance loans	3,445		3,117		(3,323	)	376	3,275
Consumer loans	4,529		5,935		(6,902	)	1,283	4,213
Total Personal Banking	16,116		12,251		(14,543	)	2,287	16,121
Commercial Banking:
Commercial real estate loans	23,667		(9,819	)	(2,403	)	3,541	32,348
Commercial loans	15,510		4,834		(4,165	)	2,340	12,501
Total Commercial Banking	39,177		(4,985	)	(6,568	)	5,881	44,849
Total originated loans	55,293		7,266		(21,111	)	8,168	60,970
Acquired loans
Personal Banking:
Residential mortgage loans	71		146		(252	)	159	18
Home equity loans	1,047		2,065		(1,449	)	330	101
Consumer loans	653		1,072		(680	)	151	110
Total Personal Banking	1,771		3,283		(2,381	)	640	229
Commercial Banking:
Commercial real estate loans	3,008		2,116		(1,337	)	790	1,439
Commercial loans	867		877		(52	)	8	34
Total Commercial Banking	3,875		2,993		(1,389	)	798	1,473
Total acquired loans	5,646		6,276		(3,770	)	1,438	1,702
Total	$	60,939	13,542		(24,881	)	9,606	62,672

The following table provides information related to changes in the allowance for losses on loans receivable for the year ended December 31, 2015: 

	Balance December 31, 2015		Provision		Charge-offs		Recoveries	Balance December 31, 2014
Originated loans
Personal Banking:
Residential mortgage loans	$	4,692	(96	)	(1,057	)	264	5,581
Home equity loans	3,941		693		(1,716	)	414	4,550
Consumer finance loans	3,275		2,853		(3,056	)	404	3,074
Consumer loans	4,213		5,132		(5,017	)	1,054	3,044
Total Personal Banking	16,121		8,582		(10,846	)	2,136	16,249
Commercial Banking:
Commercial real estate loans	32,348		540		(5,741	)	4,160	33,389
Commercial loans	12,501		2,768		(7,814	)	4,032	13,515
Total Commercial Banking	44,849		3,308		(13,555	)	8,192	46,904
Unallocated	—		(4,365	)	—		—	4,365
Total originated loans	60,970		7,525		(24,401	)	10,328	67,518
Acquired loans
Personal Banking:
Residential mortgage loans	18		47		(69	)	40	—
Home equity loans	101		247		(708	)	562	—
Other consumer loans	110		188		(201	)	123	—
Total Personal Banking	229		482		(978	)	725	—
Business Banking:
Commercial real estate loans	1,439		1,545		(585	)	479	—
Commercial loans	34		160		(369	)	243	—
Total Business Banking	1,473		1,705		(954	)	722	—
Total acquired loans	1,702		2,187		(1,932	)	1,447	—
Total	$	62,672	9,712		(26,333	)	11,775	67,518

Schedule of loan portfolio by portfolio segment and by class of financing receivable

The following table provides information related to the loan portfolio by portfolio segment and by class of financing receivable as of December 31, 2017:

	Recorded  investment in  loans  receivable		Allowance for  loan losses	Recorded  investment in  loans on  nonaccrual  (1)	Recorded  investment in  loans 90 days or more past maturity and  still accruing	TDRs  (1)	Allowance  for loan losses related to  TDRs	Additional  commitments  to customers  with loans  classified as  TDRs
Personal Banking:
Residential mortgage loans	$	2,776,203	3,955	14,791	—	8,000	815	—
Home equity loans	1,310,355		4,834	8,907	120	1,716	462	4
Consumer finance loans	18,619		3,968	199	3	—	—	—
Consumer loans	652,770		9,365	4,673	379	—	—	—
Total Personal Banking	4,757,947		22,122	28,570	502	9,716	1,277	4
Commercial Banking:
Commercial real estate loans	2,454,726		23,460	28,473	—	15,691	1,125	235
Commercial loans	580,736		11,213	7,412	—	6,697	742	8
Total Commercial Banking	3,035,462		34,673	35,885	—	22,388	1,867	243
Total	$	7,793,409	56,795	64,455	502	32,104	3,144	247

(1) Includes $12.3 million of nonaccrual TDRs.

The following table provides information related to the loan portfolio by portfolio segment and by class of financing receivable as of December 31, 2016: 

	Recorded  investment in  loans  receivable		Allowance for  loan losses	Recorded  investment in  loans on  nonaccrual  (1)	Recorded  investment in  loans 90 days or more past maturity and  still accruing	TDRs  (1)	Allowance  for loan losses related to  TDRs	Additional  commitments  to customers  with loans  classified as  TDRs
Personal Banking:
Residential mortgage loans	$	2,698,166	4,727	18,264	—	7,299	708	—
Home equity loans	1,345,370		4,533	7,865	—	1,813	450	4
Consumer finance loans	48,981		3,445	743	—	—	—	—
Consumer loans	593,980		5,182	4,366	85	—	—	—
Total Personal Banking	4,686,497		17,887	31,238	85	9,112	1,158	4
Commercial Banking:
Commercial real estate loans	2,342,089		26,675	38,724	564	24,483	2,072	417
Commercial loans	528,761		16,377	9,574	—	9,331	1,360	17
Total Commercial Banking	2,870,850		43,052	48,298	564	33,814	3,432	434
Total	$	7,557,347	60,939	79,536	649	42,926	4,590	438

(1) Includes $16.3 million of nonaccrual TDRs.

Schedule of the evaluation of impaired loans by portfolio segment and by class of financing receivable

The following table provides information related to the evaluation of impaired loans by portfolio segment and by class of financing receivable as of and for the year ended December 31, 2017:

	Loans collectively evaluated for impairment		Loans individually evaluated for impairment	Loans individually evaluated for impairment for which there is a related impairment reserve	Related impairment reserve	Loans individually evaluated for impairment for which there is no related reserve
Personal Banking:
Residential mortgage loans	$	2,767,635	8,568	8,568	816	—
Home equity loans	1,308,639		1,716	1,716	461	—
Consumer finance loans	18,619		—	—	—	—
Consumer loans	652,685		85	85	25	—
Total Personal Banking	4,747,578		10,369	10,369	1,302	—
Commercial Banking:
Commercial real estate loans	2,433,755		20,971	18,470	1,859	2,501
Commercial loans	571,412		9,324	8,572	829	752
Total Commercial Banking	3,005,167		30,295	27,042	2,688	3,253
Total	$	7,752,745	40,664	37,411	3,990	3,253

The following table provides information related to the evaluation of impaired loans by portfolio segment and by class of financing receivable as of and for the year ended December 31, 2016: 

	Loans collectively evaluated for impairment		Loans individually evaluated for impairment	Loans individually evaluated for impairment for which there is a related impairment reserve	Related impairment reserve	Loans individually evaluated for impairment for which there is no related reserve
Personal Banking:
Residential mortgage loans	$	2,689,886	8,280	8,280	709	—
Home equity loans	1,343,556		1,814	1,814	450	—
Consumer finance loans	48,981		—	—	—	—
Consumer loans	593,854		126	126	29	—
Total Personal Banking	4,676,277		10,220	10,220	1,188	—
Commercial Banking:
Commercial real estate loans	2,309,186		32,903	27,594	3,545	5,309
Commercial loans	518,449		10,312	10,242	1,390	70
Total Commercial Banking	2,827,635		43,215	37,836	4,935	5,379
Total	$	7,503,912	53,435	48,056	6,123	5,379

Schedule of roll forward of troubled debt restructurings

The following table provides a roll forward of troubled debt restructurings for the periods indicated: 

	For the years ended December 31,
	2017				2016
	Number of contracts	Amount			Number of contracts	Amount
Beginning TDR balance:	225	$	42,926		227	$	51,115
New TDRs	24	5,450			34	6,365
Re-modified TDRs	5	2,099			7	3,414
Net paydowns		(11,538		)		(9,037		)
Charge-offs:
Residential mortgage loans	1	(77		)	—	—
Home equity loans	1	(48		)	—	—
Commercial real estate loans	2	(2,498		)	1	(120		)
Commercial loans	6	(259		)	2	(142		)
Paid-off loans:
Residential mortgage loans	—	—			4	(151		)
Home equity loans	8	(62		)	7	(534		)
Commercial real estate loans	15	(1,633		)	12	(6,170		)
Commercial loans	11	(2,256		)	10	(1,814		)
Ending TDR balance:	205	$	32,104		225	$	42,926
Accruing TDRs		$	19,819			$	26,580
Non-accrual TDRs		12,285				16,346

Schedule of troubled debt restructurings (including re-modified TDRs) by portfolio segment and by class of financing receivable

The following table provides information related to troubled debt restructurings (including re-modified TDRs) by portfolio segment and by class of financing receivable during the year ended December 31, 2017: 

	Number of contracts	Recorded investment at the time of modification		Current recorded investment	Current allowance
Troubled debt restructurings:
Personal Banking:
Residential mortgage loans	8	$	1,604	1,555	158
Home equity loans	3	152		148	40
Total Personal Banking	11	1,756		1,703	198
Commercial Banking:
Commercial real estate loans	11	5,232		4,889	364
Commercial loans	7	561		526	37
Total Commercial Banking	18	5,793		5,415	401
Total	29	$	7,549	7,118	599

	Number of contracts	Recorded investment at the time of modification		Current recorded investment	Current allowance
Troubled debt restructurings modified within the previous twelve months that have subsequently defaulted:
Personal Banking:
Residential mortgage loans	1	$	336	334	34
Home equity loans	—	—		—	—
Total Personal Banking	1	336		334	34
Commercial Banking:
Commercial real estate loans	2	438		426	35
Commercial loans	—	—		—	—
Total Commercial Banking	2	438		426	35
Total	3	$	774	760	69

The following table provides information related to troubled debt restructurings (including re-modified TDRs) by portfolio segment and by class of financing receivable during the year ended December 31, 2016: 

	Number of contracts	Recorded investment at the time of modification		Current recorded investment	Current allowance
Troubled debt restructurings:
Personal Banking:
Residential mortgage loans	7	$	1,199	1,177	114
Home equity loans	7	475		471	110
Total Personal Banking	14	1,674		1,648	224
Commercial Banking:
Commercial real estate loans	7	3,729		3,643	485
Commercial loans	20	4,376		2,218	508
Total Commercial Banking	27	8,105		5,861	993
Total	41	$	9,779	7,509	1,217

	Number of contracts	Recorded investment at the time of modification		Current recorded investment	Current allowance
Troubled debt restructurings modified within the previous twelve months that have subsequently defaulted:
Personal Banking:
Residential mortgage loans	—	$	—	—	—
Home equity loans	—	—		—	—
Total Personal Banking	—	—		—	—
Commercial Banking:
Commercial real estate loans	1	429		425	31
Commercial loans	3	533		533	533
Total Business Banking	4	962		958	564
Total	4	$	962	958	564

The following table provides information related to troubled debt restructurings (including re-modified TDRs) by portfolio segment and by class of financing receivable during the year ended December 31, 2015:

	Number of contracts	Recorded investment at the time of modification		Current recorded investment	Current allowance
Troubled debt restructurings:
Personal Banking:
Residential mortgage loans	6	$	364	357	21
Home equity loans	3	101		97	21
Total Personal Banking	9	465		454	42
Commercial Banking:
Commercial real estate loans	11	12,258		12,243	1,047
Commercial loans	9	2,200		2,184	156
Total Commercial Banking	20	14,458		14,427	1,203
Total	29	$	14,923	14,881	1,245

Schedule of troubled debt restructurings (including re-modified TDRs) by type of modification by portfolio segment and by class of financing receivable

The following table provides information for troubled debt restructurings (including re-modified TDRs) by type of modification, by portfolio segment and class of financing receivable during the year ended December 31, 2017: 

	Number of	Type of modification
	contracts	Rate		Payment	Maturity date	Other	Total
Personal Banking:
Residential mortgage loans	8	$	359	—	8	1,188	1,555
Home equity loans	3	118		—	—	30	148
Total Personal Banking	11	477		—	8	1,218	1,703
Commercial Banking:
Commercial real estate loans	11	—		2,688	2,201	—	4,889
Commercial loans	7	—		—	422	104	526
Total Commercial Banking	18	—		2,688	2,623	104	5,415
Total	29	$	477	2,688	2,631	1,322	7,118

The following table provides information for troubled debt restructurings (including re-modified TDRs) by type of modification, by portfolio segment and class of financing receivable during the year ended December 31, 2016: 

	Number of	Type of modification
	contracts	Rate		Payment	Maturity date	Other	Total
Personal Banking:
Residential mortgage loans	7	$	358	—	771	48	1,177
Home equity loans	7	120		—	3	348	471
Total Personal Banking	14	478		—	774	396	1,648
Commercial Banking:
Commercial real estate loans	7	—		425	1,980	1,238	3,643
Commercial loans	20	—		328	1,178	712	2,218
Total Commercial Banking	27	—		753	3,158	1,950	5,861
Total	41	$	478	753	3,932	2,346	7,509

Schedule of re-modified troubled debt restructurings by portfolio segment and by class of financing receivable

The following table provides information related to re-modified troubled debt restructurings by portfolio segment and by class of financing receivable for the year ended December 31, 2017: 

	Number of  re-modified	Type of re-modification
	TDRs	Rate		Payment	Maturity date	Other	Total
Personal Banking:
Residential mortgage loans	2	$	250	—	—	429	679
Home equity loans	1	12		—	—	—	12
Total Personal Banking	3	262		—	—	429	691
Commercial Banking:
Commercial real estate loans	1	—		—	1,299	—	1,299
Commercial loans	1	—		—	83	—	83
Total Commercial Banking	2	—		—	1,382	—	1,382
Total	5	$	262	—	1,382	429	2,073

The following table provides information related to re-modified troubled debt restructurings by portfolio segment and by class of financing receivable for the year ended December 31, 2016: 

	Number of  re-modified	Type of re-modification
	TDRs	Rate		Payment	Maturity date	Other	Total
Personal Banking:
Residential mortgage loans	—	$	—	—	—	—	—
Home equity loans	1	—		—	—	192	192
Total Personal Banking	1	—		—	—	192	192
Commercial Banking:
Commercial real estate loans	2	—		—	1,329	173	1,502
Commercial loans	4	—		502	—	—	502
Total Commercial Banking	6	—		502	1,329	173	2,004
Total	7	$	—	502	1,329	365	2,196

Schedule of loan delinquencies

The following table provides information related to loan delinquencies as of December 31, 2017:

	30-59 days delinquent		60-89 days delinquent	90 days or greater delinquent	Total delinquency	Current	Total loans	90 days or greater delinquent and accruing (1)
Originated loans
Personal Banking:
Residential mortgage loans	$	23,786	6,030	12,613	42,429	2,619,951	2,662,380	—
Home equity loans	6,094		2,333	6,043	14,470	1,037,088	1,051,558	—
Consumer finance loans	2,128		1,113	199	3,440	15,179	18,619	—
Consumer loans	9,762		2,834	3,274	15,870	537,496	553,366	—
Total Personal Banking	41,770		12,310	22,129	76,209	4,209,714	4,285,923	—
Commercial Banking:
Commercial real estate loans	5,520		2,133	10,629	18,282	2,142,930	2,161,212	—
Commercial loans	1,469		204	2,806	4,479	516,719	521,198	—
Total Commercial Banking	6,989		2,337	13,435	22,761	2,659,649	2,682,410	—
Total originated loans	48,759		14,647	35,564	98,970	6,869,363	6,968,333	—
Acquired loans
Personal Banking:
Residential mortgage loans	1,998		205	1,277	3,480	110,343	113,823	381
Home equity loans	1,367		538	1,306	3,211	255,586	258,797	98
Consumer loans	1,150		517	353	2,020	97,384	99,404	10
Total Personal Banking	4,515		1,260	2,936	8,711	463,313	472,024	489
Commercial Banking:
Commercial real estate loans	2,795		406	5,655	8,856	284,658	293,514	923
Commercial loans	396		237	334	967	58,571	59,538	—
Total Commercial Banking	3,191		643	5,989	9,823	343,229	353,052	923
Total acquired loans	7,706		1,903	8,925	18,534	806,542	825,076	1,412
Total loans	$	56,465	16,550	44,489	117,504	7,675,905	7,793,409	1,412

 (1) Represents acquired loans that were originally recorded at fair value upon acquisition. These loans are considered to be accruing because we can reasonably estimate future cash flows and expect to fully collect the carrying value of these loans. Therefore, we are accreting the difference between the carrying value and their expected cash flows into interest income.

The following table provides information related to loan delinquencies as of December 31, 2016: 

	30-59 days delinquent		60-89 days delinquent	90 days or greater delinquent	Total delinquency	Current	Total loans	90 days or greater delinquent and accruing (1)
Originated loans
Personal Banking:
Residential mortgage loans	$	26,212	5,806	12,792	44,810	2,519,845	2,564,655	—
Home equity loans	5,785		1,305	4,783	11,873	1,031,040	1,042,913	—
Consumer finance loans	1,255		766	743	2,764	46,217	48,981
Consumer loans	7,343		2,438	2,775	12,556	415,508	428,064	—
Total Personal Banking	40,595		10,315	21,093	72,003	4,012,610	4,084,613	—
Commercial Banking:
Commercial real estate loans	7,674		3,674	16,508	27,856	1,944,227	1,972,083	—
Commercial loans	1,067		1,957	3,107	6,131	449,244	455,375	—
Total Commercial Banking	8,741		5,631	19,615	33,987	2,393,471	2,427,458	—
Total originated loans	49,336		15,946	40,708	105,990	6,406,081	6,512,071	—
Acquired loans
Personal Banking:
Residential mortgage loans	1,174		421	829	2,424	131,087	133,511	452
Home equity loans	1,020		258	973	2,251	300,206	302,457	204
Consumer loans	1,270		405	320	1,995	163,921	165,916	15
Total Personal Banking	3,464		1,084	2,122	6,670	595,214	601,884	671
Commercial Banking:
Commercial real estate loans	2,703		821	4,762	8,286	361,720	370,006	2,006
Commercial loans	111		124	413	648	72,738	73,386	147
Total Commercial Banking	2,814		945	5,175	8,934	434,458	443,392	2,153
Total acquired loans	6,278		2,029	7,297	15,604	1,029,672	1,045,276	2,824
Total loans	$	55,614	17,975	48,005	121,594	7,435,753	7,557,347	2,824

(1) Represents acquired loans that were originally recorded at fair value upon acquisition. These loans are considered to be accruing because we can reasonably estimate future cash flows and expect to fully collect the carrying value of these loans. Therefore, we are accreting the difference between the carrying value and their expected cash flows into interest income.

Schedule of credit quality indicators

The following table sets forth information about credit quality indicators as of December 31, 2017: 

	Pass		Special mention	Substandard	Doubtful	Loss	Total
Originated loans
Personal Banking:
Residential mortgage loans	$	2,645,475	—	16,905	—	—	2,662,380
Home equity loans	1,042,965		—	8,593	—	—	1,051,558
Consumer finance loans	18,420		—	199	—	—	18,619
Consumer loans	549,550		—	3,816	—	—	553,366
Total Personal Banking	4,256,410		—	29,513	—	—	4,285,923
Commercial Banking:
Commercial real estate loans	1,964,565		78,699	117,948	—	—	2,161,212
Commercial loans	461,962		15,510	43,726	—	—	521,198
Total Commercial Banking	2,426,527		94,209	161,674	—	—	2,682,410
Total originated loans	6,682,937		94,209	191,187	—	—	6,968,333
Acquired loans
Personal Banking:
Residential mortgage loans	112,990		—	833	—	—	113,823
Home equity loans	257,312		—	1,485	—	—	258,797
Consumer loans	98,659		—	745	—	—	99,404
Total Personal Banking	468,961		—	3,063	—	—	472,024
Commercial Banking:
Commercial real estate loans	251,761		4,838	36,915	—	—	293,514
Commercial loans	49,073		3,787	6,678	—	—	59,538
Total Commercial Banking	300,834		8,625	43,593	—	—	353,052
Total acquired loans	769,795		8,625	46,656	—	—	825,076
Total loans	$	7,452,732	102,834	237,843	—	—	7,793,409

The following table sets forth information about credit quality indicators as of December 31, 2016: 

	Pass		Special mention	Substandard	Doubtful	Loss	Total
Originated loans
Personal Banking:
Residential mortgage loans	$	2,548,390	—	16,265	—	—	2,564,655
Home equity loans	1,035,496		—	7,417	—	—	1,042,913
Consumer finance loans	48,238		—	743	—	—	48,981
Consumer loans	425,712		—	2,352	—	—	428,064
Total Personal Banking	4,057,836		—	26,777	—	—	4,084,613
Commercial Banking:
Commercial real estate loans	1,821,548		36,321	114,214	—	—	1,972,083
Commercial loans	401,866		15,203	38,306	—	—	455,375
Total Commercial Banking	2,223,414		51,524	152,520	—	—	2,427,458
Total originated loans	6,281,250		51,524	179,297	—	—	6,512,071
Acquired loans
Personal Banking:
Residential mortgage loans	131,717		—	1,794	—	—	133,511
Home equity loans	300,100		—	2,357	—	—	302,457
Consumer loans	165,094		—	822	—	—	165,916
Total Personal Banking	596,911		—	4,973	—	—	601,884
Commercial Banking:
Commercial real estate loans	331,780		7,403	30,823	—	—	370,006
Commercial loans	68,127		1,989	3,270	—	—	73,386
Total Commercial Banking	399,907		9,392	34,093	—	—	443,392
Total acquired loans	996,818		9,392	39,066	—	—	1,045,276
Total loans	$	7,278,068	60,916	218,363	—	—	7,557,347

Schedule of financial instruments with off-balance-sheet risk

Financial instruments with off-balance-sheet risk as of December 31, 2017 and 2016 are presented in the following table: 

	December 31,
	2017		2016
Loan commitments	$	181,058	109,032
Undisbursed lines of credit	872,700		843,457
Standby letters of credit	25,718		25,039
Total	$	1,079,476	977,528

Schedule of changes in mortgage servicing rights

The following table shows changes in MSRs as of and for the years ended December 31, 2017 and 2016:

	Servicing rights			Valuation allowance		Net carrying value and fair value
Balance at December 31, 2015	$	1,666		—		1,666
Additions	3,523			(4	)	3,519
Amortization	(950		)	—		(950	)
Balance at December 31, 2016	4,239			(4	)	4,235
Additions	833			4		837
Amortization	(1,549		)	—		(1,549	)
Balance at December 31, 2017	$	3,523		—		3,523

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Accrued Interest Receivable (Tables)

12 Months Ended

Dec. 31, 2017

Interest Receivable and Other Assets [Abstract]

Schedule of accrued interest receivable

Accrued interest receivable as of December 31, 2017 and 2016 is presented in the following table: 

	December 31,
	2017		2016
Investment securities	$	1,260	1,613
Mortgage-backed securities	1,107		910
Loans receivable	20,985		19,176
	$	23,352	21,699

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Premises and Equipment (Tables)

12 Months Ended

Dec. 31, 2017

Property, Plant and Equipment [Abstract]

Schedule of premises and equipment

Premises and equipment at December 31, 2017 and 2016 are summarized by major classification in the following table:

	December 31,
	2017			2016
Land and land improvements	$	21,563		21,229
Office buildings and improvements	150,056			156,162
Furniture, fixtures and equipment	125,347			120,391
Leasehold improvements	19,909			19,859
Total, at cost	316,875			317,641
Less accumulated depreciation and amortization	(164,931		)	(156,456	)
Premises and equipment, net	$	151,944		161,185

Schedule of minimum annual rentals

Minimum annual rentals by fiscal year are summarized in the following table: 

2018	$	4,395
2019	3,300
2020	2,726
2021	2,232
2022	1,620
Thereafter	7,413
Total	$	21,686

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Goodwill and Other Intangible Assets (Tables)

12 Months Ended

Dec. 31, 2017

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of intangible assets subject to amortization

The following table provides information for intangible assets subject to amortization for the years ended December 31, 2017 and 2016: 

	December 31,
	2017			2016
Amortizable intangible assets:
Core deposit intangibles - gross	$	63,685		37,953
Acquisitions	—			25,732
Less: accumulated amortization	(40,029		)	(34,378	)
Core deposit intangibles - net	$	23,656		29,307
Customer and Contract intangible assets - gross	$	10,474		8,496
Acquisitions	—			1,978
Less: accumulated amortization	(8,461		)	(7,348	)
Customer and Contract intangible assets - net	$	2,013		3,126

Schedule of the actual aggregate amortization expense as well as estimated aggregate amortization expense, based upon current levels of intangible assets

The following information shows the actual aggregate amortization expense for the years ended December 31, 2017, 2016 and 2015 as well as the estimated aggregate amortization expense, based upon current levels of intangible assets, for each of the five succeeding fiscal years: 

For the year ended December 31, 2015	$	1,688
For the year ended December 31, 2016	4,259
For the year ended December 31, 2017	6,764
For the year ending December 31, 2018	5,848
For the year ending December 31, 2019	4,933
For the year ending December 31, 2020	4,017
For the year ending December 31, 2021	3,188
For the year ending December 31, 2022	2,456

Schedule of the changes in carrying amount of goodwill

The following table provides information for the changes in the carrying amount of goodwill:

	Total
Balance at December 31, 2015	$	261,736
Goodwill acquired	45,684
Balance at December 31, 2016	307,420
Goodwill acquired	—
Balance at December 31, 2017	$	307,420

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Deposits (Tables)

12 Months Ended

Dec. 31, 2017

Deposits [Abstract]

Schedule of deposit balances

Deposit balances at December 31, 2017 and 2016 are shown in the table below:

	December 31,
	2017		2016
Savings deposits	$	1,653,579	1,622,879
Interest-bearing demand deposits	1,442,928		1,428,317
Noninterest-bearing demand deposits	1,610,409		1,448,972
Money market deposit accounts	1,707,450		1,841,567
Time deposits	1,412,623		1,540,586
Total deposits	$	7,826,989	7,882,321

Summarizes the contractual maturity of the certificate accounts

The following table summarizes the contractual maturity of time deposits at December 31, 2017 and 2016: 

	December 31,
	2017		2016
Due within 12 months	$	666,348	836,525
Due between 12 and 24 months	226,171		311,976
Due between 24 and 36 months	201,654		153,708
Due between 36 and 48 months	131,530		90,777
Due between 48 and 60 months	174,704		134,687
After 60 months	12,216		12,913
Total time deposits	$	1,412,623	1,540,586

Summarizes the interest expense incurred on the deposits

The following table summarizes the interest expense incurred on the respective deposits for the years ended December 31, 2017, 2016 and 2015: 

	Years ended December 31,
	2017		2016	2015
Savings deposits	$	3,062	3,218	3,387
Interest-bearing demand deposits	1,027		462	568
Money market deposit accounts	4,203		3,621	3,222
Time deposits	14,765		16,164	16,878
Total interest expense	$	23,057	23,465	24,055

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Borrowed Funds (Tables)

12 Months Ended

Dec. 31, 2017

Debt Disclosure [Abstract]

Schedule of borrowed funds

Borrowed funds at December 31, 2017 and 2016 are presented in the following table:

	December 31,
	2017				2016
	Amount		Average rate		Amount		Average rate
Collateralized borrowings, due within one year	$	108,238	0.20	%	$	142,899	0.17	%

Schedule of capital debt securities and junior subordinated deferrable interest debentures

The following table sets forth a summary of guaranteed capital debt securities and junior subordinated deferrable interest debentures held by the trusts as of December 31, 2017 and 2016: 

	Capital debt		December 31,
	securities		2017	2016
Northwest Bancorp Capital Trust III	$	50,000	51,547	51,547
Northwest Bancorp Statutory Trust IV	50,000		51,547	51,547
LNB Trust II	7,875		8,119	8,119
Total	$	107,875	111,213	111,213

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Income Taxes (Tables)

12 Months Ended

Dec. 31, 2017

Income Tax Disclosure [Abstract]

Schedule of allocation of income tax

Total income tax was allocated for the years ended December 31, 2017, 2016 and 2015 as follows: 

	Years ended December 31,
	2017			2016		2015
Income before income taxes	$	41,444		21,648		27,960
Shareholders’ equity for unrealized (loss)/ gain on securities available-for-sale	(3,403		)	(1,871	)	(85	)
Shareholders’ equity for tax benefit for excess of fair value above cost of stock benefit plans	—			(1,425	)	(332	)
Shareholders’ equity for pension adjustment	(213		)	(2,455	)	(848	)
Shareholders’ equity for swap fair value adjustment	585			539		699
Unallocated income tax	$	38,413		16,436		27,394

Schedule of income tax expense (benefit) applicable to income before taxes

Income tax expense applicable to income before taxes consists of: 

	Years ended December 31,
	2017		2016	2015
Current	$	30,127	18,914	21,670
Deferred	11,317		2,734	6,290
Total income tax expense	$	41,444	21,648	27,960

Schedule of reconciliation of the expected federal statutory rate to the effective rate

A reconciliation of the expected federal statutory income tax rate to the effective rate, expressed as a percentage of pretax income for the years ended December 31, 2017, 2016 and 2015, is as follows:

	Years ended December 31,
	2017		2016		2015
Expected tax rate	35.0	%	35.0	%	35.0	%
Tax-exempt interest income	(1.5	)%	(3.3	)%	(3.0	)%
State income tax, net of federal benefit	3.2	%	1.2	%	2.9	%
Bank-owned life insurance	(1.6	)%	(2.6	)%	(1.7	)%
Stock-based compensation	(0.9	)%	—	%	—	%
Dividends on stock plans	(1.1	)%	(2.0	)%	(0.8	)%
Low income housing and historic tax credits	(0.5	)%	(1.0	)%	(1.4	)%
Non-deductible acquisition expense	—	%	—	%	0.5	%
ESOP termination	—	%	3.4	%	—	%
Adjustment to net deferred tax liabilities for enacted changes in tax laws and rates	(2.3	)%	—	%	—	%
Other	0.2	%	(0.3	)%	0.1	%
Effective tax rate	30.5	%	30.4	%	31.6	%

Tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities

The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities at December 31, 2017 and 2016 are presented below: 

	December 31,
	2017		2016
Deferred tax assets:
Deferred rent	$	87	187
Deferred compensation expense	1,040		2,893
Bad debts	10,277		18,823
Other reserves	953		1,823
Accrued postretirement benefit cost	413		641
Stock benefit plans	744		1,085
Writedown of investment securities	104		2,875
Accrued expenses	35		95
Pension and postretirement benefits	13,033		18,491
Unrealized loss on the fair value of derivatives	223		958
Unrealized loss on the fair value of securities available-for-sale	2,160		—
Purchase accounting	—		1,215
Deferred income	1,001		253
Other	141		153
Total deferred tax assets	30,211		49,492
Deferred tax liabilities:
Pension expense	5,542		8,689
Unrealized gain on the fair value of securities available-for-sale	—		252
Purchase accounting	303		—
Intangible assets	13,546		21,927
Mortgage servicing rights	777		1,559
Fixed assets	4,940		8,107
Net deferred loan fees	4,690		—
Other	274		635
Total deferred tax liabilities	30,072		41,169
Net deferred tax asset	$	139	8,323

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Earnings Per Share (Tables)

12 Months Ended

Dec. 31, 2017

Earnings Per Share [Abstract]

Schedule of computation of basic and diluted earnings per share

The computation of basic and diluted earnings per share for the years ended December 31, 2017, 2016 and 2015 follows: 

	Years ended December 31,
	2017		2016	2015
Net income available to common shareholders	$	94,467	49,667	60,540
Weighted average common shares outstanding	101,015,083		99,439,174	94,314,420
Dilutive potential shares due to effect of stock options	1,549,822		1,225,514	515,369
Total weighted average common shares and dilutive potential shares	102,564,905		100,664,688	94,829,789
Basic earnings per share (1)	$	0.94	0.50	0.64
Diluted earnings per share (1)	$	0.92	0.49	0.64

(1)  Not in thousands.

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Employee Benefit Plans (Tables)

12 Months Ended

Dec. 31, 2017

Retirement Benefits [Abstract]

Schedule of net periodic costs for the defined benefit pension plans and the post retirement healthcare plans

The following table sets forth the net periodic pension cost for the defined benefit pension plans for the years ended December 31, 2017, 2016 and 2015: 

	Years ended December 31,
	2017			2016		2015
Service cost	$	6,149		5,496		5,721
Interest cost	6,879			6,781		6,125
Expected return on plan assets	(10,512		)	(9,897	)	(10,371	)
Net amortization and deferral	1,388			1,388		1,375
Net periodic pension cost	$	3,904		3,768		2,850

The following table sets forth the net periodic benefit cost for the postretirement healthcare benefits plan for the years ended December 31, 2017, 2016 and 2015:

	Years ended December 31,
	2017		2016	2015
Service cost	$	—	—	—
Interest cost	68		70	58
Amortization of net loss	108		90	60
Net period benefit cost	$	176	160	118

Schedule of other changes in the defined benefit pension plans' plan assets and benefit obligations recognized in other comprehensive income

The following table sets forth other changes in the defined benefit pension plans’ plan assets and benefit obligations recognized in other comprehensive income: 

	Years ended December 31,
	2017			2016	2015
Net loss/ (gain)	$	(1,647	)	1,550	(420	)
Prior service cost/ (credit)	—			—	—
Amortization of prior service cost	2,323			2,323	2,323
Total recognized in other comprehensive income	$	676		3,873	1,903
Total recognized in net periodic pension cost and other comprehensive income/ (loss)	$	4,580		7,641	4,753

The following table sets forth other changes in the postretirement healthcare plan’s plan assets and benefit obligations recognized in other comprehensive income: 

	Years ended December 31,
	2017			2016	2015
Net loss/ (gain)	$	(156	)	109	273
Total recognized in other comprehensive income	$	(156	)	109	273
Total recognized in net periodic benefit cost and other comprehensive income	$	20		269	391

Schedule of defined benefit pension plans' funded status

The following table sets forth information for the defined benefit pension plans’ funded status at December 31, 2017 and 2016: 

	December 31,
	2017			2016
Change in benefit obligation:
Benefit obligation at beginning of year	$	172,208		162,133
Service cost	6,149			5,496
Interest cost	6,879			6,781
Acquisition	—			—
Actuarial (gain)/ loss	14,807			4,267
Benefits paid	(6,901		)	(6,469	)
Benefit obligation at end of year	$	193,142		172,208
Change in plan assets:
Fair value of plan assets at beginning of year	$	152,625		143,655
Actual return on plan assets	23,255			8,903
Employer contributions	4,689			6,536
Acquisition	—			—
Benefits paid	(6,901		)	(6,469	)
Fair value of plan assets at end of period	$	173,668		152,625
Funded status at end of year	$	(19,474	)	(19,583	)

The following table sets forth the funded status of the postretirement healthcare benefit plan at December 31, 2017 and 2016: 

	December 31,
	2017			2016
Change in benefit obligation:
Benefit obligation at beginning of year	$	1,779		1,737
Service cost	—			—
Interest cost	68			70
Actuarial loss	(48		)	200
Benefits paid	(162		)	(228	)
Benefit obligation at end of year	$	1,637		1,779
Change in plan assets:
Fair value of plan assets at beginning of year	$	—		—
Employer contributions	162			228
Benefits paid	(162		)	(228	)
Fair value of plan assets at end of year	$	—		—
Funded status at year end	$	(1,637	)	(1,779	)

Schedule of assumptions used to develop the net periodic pension cost

The assumptions used to develop the preceding information for postretirement healthcare benefits are as follows: 

	Years ended December 31,
	2017			2016		2015
Discount rate	4.06		%	4.25	%	3.89	%
Monthly cost of healthcare insurance per beneficiary (1)	$	548		539		470
Annual rate of increase in healthcare costs	4.00		%	4.00	%	4.00	%

(1)   Not in thousands

The following table sets forth the assumptions used to develop the net periodic pension cost: 

	Years ended December 31,
	2017		2016		2015
Discount rate	4.06	%	4.25	%	3.89	%
Expected long-term rate of return on assets	7.00	%	7.00	%	7.50	%
Rate of increase in compensation levels	3.00	%	3.00	%	3.00	%

Schedule of assumptions used to determine benefit obligations

The following table sets forth the assumptions used to determine benefit obligations at the end of each period:

	Years ended December 31,
	2017		2016		2015
Discount rate	3.53	%	4.06	%	4.25	%
Expected long-term rate of return on assets	7.00	%	7.00	%	7.00	%
Rate of increase in compensation levels	3.00	%	3.00	%	3.00	%

Schedule of certain information related to pension plans

The following table sets forth certain information related to our pension plans: 

	December 31,
	2017		2016
Projected benefit obligation	$	193,142	172,208
Accumulated benefit obligation	193,142		172,208
Fair value of plan assets	173,668		152,625

Schedule of weighted average asset allocation of defined benefit plans

The following table sets forth the weighted average asset allocation of defined benefit plans: 

	Target	December 31,
	allocation	2017		2016
Debt securities	20 – 50%	23	%	23	%
Equity securities	30 – 60%	73	%	72	%
Other	5 – 50%	4	%	5	%
Total		100	%	100	%

Schedule of allocation of plan assets

The following table sets forth the pension plan assets as of December 31, 2017 and 2016: 

	December 31,
	2017		2016
Mutual funds - debt	$	40,010	35,224
Mutual funds - equity	125,871		110,078
Cash and cash equivalents	7,787		7,322

Schedule of accumulated benefit obligation in excess of plan assets

The following table sets forth information for plans with an accumulated benefit obligation in excess of plan assets: 

	December 31,
	2017		2016
Projected benefit obligation	$	1,637	1,779
Accumulated benefit obligation	1,637		1,779
Fair value of plan assets	—		—

Schedule of activity under option plans

The following table summarizes the activity in our option plans during the years ended December 31, 2017, 2016 and 2015 (amounts in this table are not in thousands): 

	Years ended December 31,
	2017				2016				2015
	Number		Weighted average exercise price		Number		Weighted average exercise price		Number		Weighted average exercise price
Balance at beginning of year	5,804,105		$	12.25	6,306,496		$	11.81	6,402,407		$	11.65
Granted (1)	819,010		15.57		725,400		14.15		665,370		12.37
Exercised (2)	(630,591	)	11.66		(1,081,072	)	11.01		(474,253	)	10.27
Forfeited/ expired	(296,954	)	12.43		(146,719	)	12.71		(287,028	)	12.26
Balance at end of year	5,695,570		12.75		5,804,105		12.25		6,306,496		11.81
Exercisable at end of year	3,016,367		11.99		3,035,718		11.71		3,431,113		11.42

(1) Weighted average fair value of options at grant date: $1.55, $1.52 and $1.14, respectively.

(2) The total intrinsic value of options exercised was $3.5 million, $5.1 million and $1.2 million, respectively.

Schedule of number of options outstanding, number of options exercisable, and weighted average remaining life of all option grants

The following table summarizes the number of options outstanding, number of options exercisable, and weighted average remaining life of all option grants as of December 31, 2017: 

	Exercise price $7.48	Exercise price $9.79	Exercise price $11.12	Exercise price $11.49	Exercise price $11.70	Exercise price $12.12	Exercise price $12.17
Options outstanding:
Number of options	164,289	143,224	48,027	260,456	384,380	342,789	14,500
Weighted average remaining contract life (years)	1.25	1.00	0.25	2.25	4.50	3.25	3.50
Options exercisable:
Number of options	164,289	143,224	48,027	260,456	237,916	299,253	13,000
Weighted average remaining term - vested (years)	1.25	1.00	0.25	2.25	4.50	3.25	3.50

	Exercise price $12.32	Exercise price $12.37	Exercise price $12.44	Exercise price $13.15	Exercise price $14.15	Exercise price $15.57	Total $12.75
Options outstanding:
Number of options	1,537,329	522,750	427,090	440,653	643,998	766,085	5,695,570
Weighted average remaining contract life (years)	3.50	7.50	5.50	6.50	8.50	9.50	5.46
Options exercisable:
Number of options	1,079,159	163,646	226,292	178,091	126,374	76,640	3,016,367
Weighted average remaining term - vested (years)	3.50	7.50	5.50	6.50	8.50	9.50	4.04

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Disclosures About Fair Value of Financial Instruments (Tables)

12 Months Ended

Dec. 31, 2017

Fair Value Disclosures [Abstract]

Schedule of the carrying amount and estimated fair value of the entity's financial instruments included in the consolidated statement of financial condition

The following table sets forth the carrying amount and estimated fair value of our financial instruments included in the consolidated statement of financial condition at December 31, 2017 and 2016: 

	December 31, 2017
	Carrying		Estimated
	amount		fair value	Level 1	Level 2	Level 3
Financial assets:
Cash and cash equivalents	$	77,710	77,710	77,710	—	—
Securities available-for-sale	792,535		792,535	574	791,961	—
Securities held-to-maturity	29,678		29,667	—	29,667	—
Loans receivable, net	7,736,614		7,762,562	3,128	—	7,759,434
Accrued interest receivable	23,352		23,352	23,352	—	—
Interest rate swaps	214		214	—	214	—
FHLB Stock	11,733		11,733	—	—	—
Total financial assets	$	8,671,836	8,697,773	104,764	821,842	7,759,434
Financial liabilities:
Savings and checking accounts	$	6,414,366	6,414,366	6,414,366	—	—
Time deposits	1,412,623		1,433,380	—	—	1,433,380
Borrowed funds	108,238		108,238	108,238	—	—
Junior subordinated debentures	111,213		110,954	—	—	110,954
Interest rate swaps	1,278		1,278	—	1,278	—
Foreign exchange swaps	61		61	—	61	—
Accrued interest payable	460		460	460	—	—
Total financial liabilities	$	8,048,239	8,068,737	6,523,064	1,339	1,544,334

	December 31, 2016
	Carrying		Estimated
	amount		fair value	Level 1	Level 2	Level 3
Financial assets:
Cash and cash equivalents	$	389,867	389,867	389,867	—	—
Securities available-for-sale	826,200		826,200	4,440	812,394	9,366
Securities held-to-maturity	19,978		20,426	—	20,426	—
Loans receivable, net	7,496,408		7,878,815	9,625	—	7,869,190
Accrued interest receivable	21,699		21,699	21,699	—	—
Interest rate swaps	238		238	—	238	—
FHLB Stock	7,390		7,390	—	—	—
Total financial assets	$	8,761,780	9,144,635	425,631	833,058	7,878,556
Financial liabilities:
Savings and checking accounts	$	6,341,735	6,341,735	6,341,735	—	—
Time deposits	1,540,586		1,626,434	—	—	1,626,434
Borrowed funds	142,899		142,899	142,899	—	—
Junior subordinated debentures	111,213		113,313	—	—	113,313
Interest rate swaps	2,974		2,974	—	2,974	—
Accrued interest payable	643		643	643	—	—
Total financial liabilities	$	8,140,050	8,227,998	6,485,277	2,974	1,739,747

Schedule of assets and liabilities measured at fair value on a recurring basis

The following table represents assets and liabilities measured at fair value on a recurring basis as of December 31, 2017: 

	Level 1		Level 2	Level 3	Total at fair value
Assets
Equity securities	$	574	—	—	574
Debt securities:
U.S. government and agencies	—		1	—	1
Government sponsored enterprises	—		209,269	—	209,269
States and political subdivisions	—		51,056	—	51,056
Corporate	—		909	—	909
Total debt securities	—		261,235	—	261,235
Residential mortgage-backed securities:
GNMA	—		29,695	—	29,695
FNMA	—		82,969	—	82,969
FHLMC	—		64,021	—	64,021
Non-agency	—		555	—	555
Collateralized mortgage obligations:
GNMA	—		4,769	—	4,769
FNMA	—		191,512	—	191,512
FHLMC	—		157,190	—	157,190
Non-agency	—		15	—	15
Total mortgage-backed securities	—		530,726	—	530,726
Interest rate swaps	—		214	—	214
Total assets	$	574	792,175	—	792,749
Liabilities
Interest rate swaps	$	—	1,278	—	1,278
Foreign exchange swaps	—		61	—	61
Total liabilities	$	—	1,339	—	1,339

The following table represents assets and liabilities measured at fair value on a recurring basis as of December 31, 2016: 

	Level 1		Level 2	Level 3	Total at fair value
Assets
Equity securities	$	4,440	—	—	4,440
Debt securities:
U.S. government and agencies	—		6	—	6
Government sponsored enterprises	—		294,170	—	294,170
States and political subdivisions	—		63,070	—	63,070
Corporate	—		7,614	9,366	16,980
Total debt securities	—		364,860	9,366	374,226
Residential mortgage-backed securities:
GNMA	—		30,883	—	30,883
FNMA	—		106,578	—	106,578
FHLMC	—		82,115	—	82,115
Non-agency	—		579	—	579
Collateralized mortgage obligations:
GNMA	—		6,287	—	6,287
FNMA	—		95,186	—	95,186
FHLMC	—		119,197	—	119,197
SBA	—		6,608	—	6,608
Non-agency	—		101	—	101
Total mortgage-backed securities	—		447,534	—	447,534
Interest rate swaps	—		238	—	238
Total assets	$	4,440	812,632	9,366	826,438
Liabilities
Interest rate swaps	$	—	2,974	—	2,974
Total liabilities	$	—	2,974	—	2,974

Schedule of reconciliation of debt securities measured at fair value on a recurring basis using significant unobservable inputs (Level 3)

The table below presents a reconciliation of all assets and liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the year ended December 31, 2017 and 2016: 

	December 31,
	2017			2016
	Debt securities
Beginning balance January 1,	$	9,366		8,955
Total net realized investment gains/ (losses) and net change in unrealized appreciation/ (depreciation):
Included in net income as OTTI	—			—
Included in other comprehensive income	1,282			411
Purchases	—			—
Sales	(10,648		)	—
Transfers into Level 3	—			—
Transfers out of Level 3	—			—
Ending balance December 31,	$	—		9,366

Schedule of fair value measurement for nonrecurring assets

The following table represents the fair market measurement for only those nonrecurring assets that had a fair market value below the carrying amount as of December 31, 2017:

	Level 1		Level 2	Level 3	Total assets at fair value
Loans evaluated for impairment	$	—	—	33,421	33,421
Real estate owned	—		—	5,666	5,666
Total assets	$	—	—	39,087	39,087

The following table represents the fair market measurement for only those nonrecurring assets that had a fair market value below the carrying amount as of December 31, 2016:

	Level 1		Level 2	Level 3	Total assets at fair value
Loans evaluated for impairment	$	—	—	41,933	41,933
Mortgage servicing rights	—		—	246	246
Real estate owned	—		—	4,889	4,889
Total assets	$	—	—	47,068	47,068

Schedule of quantitative information about assets measured at fair value on a recurring and nonrecurring basis for Level 3 Fair Value Measurements

The following table presents additional quantitative information about assets measured at fair value on a recurring and nonrecurring basis and for which we have utilized Level 3 inputs to determine fair value at December 31, 2017:

	Fair value		Valuation techniques	Significant  unobservable inputs	Range (weighted average)
Loans measured for impairment	$	33,421	Appraisal	Estimated costs to sell	10%
			value (1)
			Discounted cash	Discount rate	4.25% to 10.0% (7.50%)
			flow
Real estate owned	5,666		Appraisal	Estimated costs to sell	10%
			value (1)

(1)  Fair value is generally determined through independent appraisals of the underlying collateral, which may include Level 3 inputs that are not identifiable, or by using the discounted cash flow method if the loan is not collateral dependent.

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Regulatory Capital Requirements (Tables)

12 Months Ended

Dec. 31, 2017

Regulatory Capital Requirements [Abstract]

Schedule of actual, required, and well capitalized levels

The actual, required, and well capitalized levels as of December 31, 2017 and 2016 were as follows: 

	At December 31, 2017
					Minimum capital				Well capitalized
	Actual				requirements (1)				requirements
	Amount		Ratio		Amount		Ratio		Amount		Ratio
Total capital (to risk weighted assets)
Northwest Bancshares, Inc.	$	1,136,076	15.831	%	$	663,823	9.250	%	$	717,647	10.000	%
Northwest Bank	1,017,251		14.189	%	663,179		9.250	%	716,951		10.000	%
Tier 1 capital (to risk weighted assets)
Northwest Bancshares, Inc.	1,079,270		15.039	%	520,294		7.250	%	574,117		8.000	%
Northwest Bank	960,443		13.396	%	519,789		7.250	%	573,560		8.000	%
CET 1 capital (to risk weighted assets)
Northwest Bancshares, Inc.	971,395		13.536	%	412,647		5.750	%	466,470		6.500	%
Northwest Bank	960,443		13.396	%	412,247		5.750	%	430,170		6.000	%
Tier 1 capital (leverage) (to average assets)
Northwest Bancshares, Inc.	1,079,270		11.676	%	369,735		4.000	%	462,169		5.000	%
Northwest Bank	960,443		10.400	%	369,482		4.000	%	461,853		5.000	%

(1) Amounts and ratios include the 2017 capital conservation buffer of 1.250% with the exception of Tier 1 capital to average assets. For further information related to the capital conservation buffer, see Item 1. Business - "Supervision and Regulation".

	At December 31, 2016
					Minimum capital				Well capitalized
	Actual				requirements (1)				requirements
	Amount		Ratio		Amount		Ratio		Amount		Ratio
Total capital (to risk weighted assets)
Northwest Bancshares, Inc.	$	1,051,582	14.873	%	$	609,835	8.625	%	$	707,056	10.000	%
Northwest Bank	961,279		13.609	%	609,248		8.625	%	706,375		10.000	%
Tier 1 capital (to risk weighted assets)
Northwest Bancshares, Inc.	990,153		14.004	%	468,424		6.625	%	565,644		8.000	%
Northwest Bank	900,328		12.746	%	467,973		6.625	%	565,100		8.000	%
CET 1 capital (to risk weighted assets)
Northwest Bancshares, Inc.	882,278		12.478	%	362,366		5.125	%	459,586		6.500	%
Northwest Bank	900,328		12.746	%	362,017		5.125	%	459,144		6.500	%
Tier I capital (leverage) (to average assets)
Northwest Bancshares, Inc.	990,153		10.530	%	376,116		4.000	%	470,145		5.000	%
Northwest Bank	900,328		9.585	%	375,735		4.000	%	469,669		5.000	%

(1) Amounts and ratios include the 2016 capital conservation buffer of 0.625% with the exception of Tier 1 capital to average assets. For further information related to the capital conservation buffer, see Item 1. Business - "Supervision and Regulation".

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Components of Accumulated Other Comprehensive Income (Tables)

12 Months Ended

Dec. 31, 2017

Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract]

Schedule of the components of accumulated other comprehensive income

The following table sets forth the components of accumulated other comprehensive income as of December 31, 2017 and 2016: 

	December 31,
	2017			2016
Unrealized gain on marketable securities available-for-sale	$	(4,409	)	395
Fair value of interest rate swaps	(691		)	(1,778	)
Defined benefit pension plans	(26,980		)	(26,608	)
Accumulated other comprehensive income	$	(32,080	)	(27,991	)

Schedule of the changes in accumulated other comprehensive income by component

The following table shows the changes in accumulated other comprehensive income by component for the year ended December 31, 2017: 

	Unrealized gains and losses on securities available-for- sale			Change in fair value of interest rate swaps		Change in defined benefit pension plans		Total
Balance as of January 1,	$	395		(1,778	)	(26,608	)	(27,991	)
Other comprehensive income/ (loss) before reclassification adjustments	(2,478		)	1,087		(1,254	)	(2,645	)
Amounts reclassified from accumulated other comprehensive income (1), (2)	(2,326		)	—		882		(1,444	)
Net other comprehensive income/ (loss)	(4,804		)	1,087		(372	)	(4,089	)
Balance as of December 31,	$	(4,409	)	(691	)	(26,980	)	(32,080	)

(1) Consists of realized gains on securities (gain on sales of investments, net) of $3,814, net of tax (income tax expense) of $1,488.

(2) Consists of amortization of prior service cost (compensation and employee benefits) of $2,323 and amortization of net loss (compensation and employee benefits) of $(3,818), net of tax (income tax expense) of $613. 

The following table shows the changes in accumulated other comprehensive income by component for the year ended December 31, 2016: 

	Unrealized gains and losses on securities available-for- sale			Change in fair value of interest rate swaps		Change in defined benefit pension plans		Total
Balance as of January 1,	$	3,325		(2,779	)	(25,081	)	(24,535	)
Other comprehensive income/ (loss) before reclassification adjustments	(2,728		)	1,001		(2,399	)	(4,126	)
Amounts reclassified from accumulated other comprehensive income (1), (2)	(202		)	—		872		670
Net other comprehensive income/ (loss)	(2,930		)	1,001		(1,527	)	(3,456	)
Balance as of December 31,	$	395		(1,778	)	(26,608	)	(27,991	)

(1) Consists of realized gains on securities (gain on sales of investments, net) of $331 net of tax (income tax expense) of $(129).

(2) Consists of amortization of prior service cost (compensation and employee benefits) of $2,323 and amortization of net loss (compensation and employee benefits) of $(3,801), net of tax (income tax expense) of $606. 

The following table shows the changes in accumulated other comprehensive income by component for the year ended December 31, 2015: 

	Unrealized gains and losses on securities available-for- sale			Change in fair value of interest rate swaps		Change in defined benefit pension plans		Total
Balance as of January 1,	$	3,461		(4,078	)	(23,753	)	(24,370	)
Other comprehensive income/ (loss) before reclassification adjustments	315			1,299		(2,203	)	(589	)
Amounts reclassified from accumulated other comprehensive income (1), (2)	(451		)	—		875		424
Net other comprehensive income/ (loss)	(136		)	1,299		(1,328	)	(165	)
Balance as of December 31,	$	3,325		(2,779	)	(25,081	)	(24,535	)

(1) Consists of realized losses on securities (gain on sales of investments, net) of $740 net of tax (income tax expense) of $(289).

(2) Consists of amortization of prior service cost (compensation and employee benefits) of $2,323 and amortization of net loss (compensation and employee benefits) of $(3,758), net of tax (income tax expense) of $560. 

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Parent Company Only Financial Statements - Condensed (Tables)

12 Months Ended

Dec. 31, 2017

Condensed Financial Information of Parent Company Only Disclosure [Abstract]

Schedule of statements of financial condition

	December 31,
	2017		2016
Assets
Cash and cash equivalents	$	26,088	34,521
Marketable securities available-for-sale	545		4,413
Investment in bank subsidiary	1,200,799		1,193,175
Other assets	92,712		52,645
Total assets	$	1,320,144	1,284,754
Liabilities and Shareholders’ Equity
Liabilities:
Debentures payable	$	111,213	111,213
Other liabilities	1,207		2,878
Total liabilities	112,420		114,091
Shareholders’ equity	1,207,724		1,170,663
Total liabilities and shareholders’ equity	$	1,320,144	1,284,754

Schedule of statements of income

	Years ended December 31,
	2017			2016		2015
Income:
Interest income	$	137		737		1,258
Other income	2,297			709		659
Dividends from bank subsidiary	90,000			50,000		135,000
Undistributed earnings from equity investment in bank subsidiary	7,255			2,760		(70,854	)
Total income	99,689			54,206		66,063
Expense:
Compensation and benefits	1,282			1,129		1,061
Other expense	553			561		1,356
Interest expense	4,666			4,560		4,926
Total expense	6,501			6,250		7,343
Income before income taxes	93,188			47,956		58,720
Federal and state income taxes	(1,279		)	(1,711	)	(1,820	)
Net income	$	94,467		49,667		60,540

Schedule of statements of cash flows

	Years ended December 31,
	2017			2016		2015
Operating activities:
Net income	$	94,467		49,667		60,540
Adjustments to reconcile net income to net cash provided by operating activities:
Undistributed earnings of subsidiary	(7,255		)	(2,760	)	70,854
Noncash stock benefit plan compensation expense	4,894			10,916		5,654
Gain on sale of marketable securities	(1,615		)	(43	)	(54	)
Net change in other assets and liabilities	(43,513		)	(63,533	)	(5,824	)
Net cash provided by/ (used in) operating activities	46,978			(5,753	)	131,170
Investing activities:
Net sale of marketable securities	2,800			(1,952	)	1,192
Acquisition, net of cash received	—			—		(89,398	)
Net cash provided by/ (used in) investing activities	2,800			(1,952	)	(88,206	)
Financing activities:
Cash dividends paid	(65,212		)	(60,156	)	(52,825	)
Share repurchases	—			(1,752	)	(7,847	)
Repayment of loan to ESOP	—			797		1,549
Redemption of junior subordinated debt	—			—		(8,119	)
Excess tax benefit from stock-based compensation	—			1,425		332
Proceeds from options exercised	7,001			10,856		4,303
Net cash used in financing activities	(58,211		)	(48,830	)	(62,607	)
Net decrease in cash and cash equivalents	$	(8,433	)	(56,535	)	(19,643	)
Cash and cash equivalents at beginning of year	$	34,521		91,056		110,699
Net decrease in cash and cash equivalents	(8,433		)	(56,535	)	(19,643	)
Cash and cash equivalents at end of year	$	26,088		34,521		91,056

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Derivative Financial Instruments Derivative Fainncial Instruments (Tables)

12 Months Ended

Dec. 31, 2017

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Schedule of Derivative Instruments

The following table presents information regarding our derivative financial instruments, at December 31,:

	Asset derivatives			Liability derivatives
	Notional amount		Fair value	Notional amount	Fair value
2017:
Derivatives designated as hedging instruments:
Interest rate swap agreements	$	—	—	50,000	1,064
Derivatives not designated as hedging instruments:
Interest rate swap agreements	92,631		214	92,631	214
Foreign exchange swap agreements	—		—	12,344	61
Total derivatives	$	92,631	214	154,975	1,339
2016:
Derivatives designated as hedging instruments:
Interest rate swap agreements	$	—	—	50,000	2,736
Derivatives not designated as hedging instruments:
Interest rate swap agreements	10,559		238	10,559	238
Foreign exchange swap agreements	—		—	—	—
Total derivatives	$	10,559	238	60,559	2,974

Gain (Loss) on Derivative Instruments

The following table indicates the gain or loss recognized in income on derivatives for the periods indicated:

	For the years ended December 31,
	2017			2016	2015
Non-hedging swap derivatives:
Increase/ (decrease) in other income	$	(373	)	—	—
Hedging interest rate derivatives:
Increase in interest expense	1,599			1,866	2,922

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Selected Quarterly Financial Data - Unaudited (Tables)

12 Months Ended

Dec. 31, 2017

Quarterly Financial Information Disclosure [Abstract]

Schedule of selected quarterly financial data

	Quarters ended
	March 31,		June 30,	September 30,	December 31,
	(In thousands, except per share data)
2017:
Interest income	$	87,267	89,797	90,231	91,561
Interest expense	6,690		7,066	6,994	7,321
Net interest income	80,577		82,731	83,237	84,240
Provision for loan losses	4,637		5,562	3,027	6,525
Noninterest income	21,504		41,477	24,594	22,905
Noninterest expenses	71,646		73,262	68,799	71,896
Income before income taxes	25,798		45,384	36,005	28,724
Income tax expense	8,052		14,402	12,414	6,576
Net income	$	17,746	30,982	23,591	22,148
Basic earnings per share	$	0.18	0.31	0.23	0.22
Diluted earnings per share	$	0.17	0.30	0.23	0.22

	Quarters ended
	March 31,		June 30,		September 30,	December 31,
	(In thousands, except per share data)
2016:
Interest income	$	85,298	85,555		84,748	90,033
Interest expense	13,746		10,008		7,454	7,091
Net interest income	71,552		75,547		77,294	82,942
Provision for loan losses	1,660		4,199		5,538	2,145
Noninterest income	19,448		20,275		20,818	24,819
Noninterest expenses	63,275		102,122		73,680	68,761
Income before income taxes	26,065		(10,499	)	18,894	36,855
Income tax expense	8,081		(3,491	)	4,697	12,361
Net income	$	17,984	(7,008	)	14,197	24,494
Basic earnings per share	$	0.18	(0.07	)	0.14	0.24
Diluted earnings per share	$	0.18	(0.07	)	0.14	0.24

	Quarters ended
	March 31,		June 30,	September 30,	December 31,
	(In thousands, except per share data)
2015:
Interest income	$	76,880	75,970	81,091	85,639
Interest expense	13,899		13,792	14,150	14,486
Net interest income	62,981		62,178	66,941	71,153
Provision for loan losses	900		1,050	3,167	4,595
Noninterest income	14,625		16,525	18,140	19,546
Noninterest expenses	53,711		55,135	63,804	61,227
Income before income taxes	22,995		22,518	18,110	24,877
Income tax expense	6,825		7,213	5,238	8,684
Net income	$	16,170	15,305	12,872	16,193
Basic earnings per share	$	0.18	0.17	0.14	0.16
Diluted earnings per share	$	0.18	0.17	0.13	0.16

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Summary of Significant Accounting Policies - Loans Receivable and Allowance for Loan Losses and Other Narrative Information (Details)	12 Months Ended
	Dec. 31, 2017 USD ($) bank	Dec. 31, 2016 USD ($)
Nature of Operations
Number of banking locations | bank	172
Investment Securities
Securities classified as trading	$ 0	$ 0
Loans Receivable
Number of days in delinquency for accrued interest on loans to be considered for reversal, minimum	90 days
Number of days delinquent for loans to be placed on non-accrual status, minimum	90 days
Period of time to return TDRs included in impaired loans to performing status through the fulfilling of contractual terms	6 months
Residential mortgage loans classified as held-for-sale	$ 3,100,000	$ 9,600,000
Allowance for Loan Losses and Provision for Loan Losses
Number of days for loans not deemed to be impaired	30 days
Commercial Banking
Allowance for Loan Losses and Provision for Loan Losses
Financing receivable, individually evaluated for impairment, threshold amount for analysis	$ 1,000,000.0
Actual losses incurred through average number of rolling years	3 years
Personal Banking
Allowance for Loan Losses and Provision for Loan Losses
Actual losses incurred through average number of rolling years	3 years
Number of days delinquent for allowance for loans	90 days
Number of days delinquent for loans to be charged off or charged down unless that borrower has filed for bankruptcy	180 days

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Summary of Significant Accounting Policies - Premises and Equipment and Goodwill (Details)	12 Months Ended
	Dec. 31, 2017
Minimum
Premises and Equipment
Estimated lives	3 years
Core Deposit Intangibles
Useful life of core deposit intangibles	7 years
Maximum
Premises and Equipment
Estimated lives	39 years
Core Deposit Intangibles
Useful life of core deposit intangibles	11 years

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Summary of Significant Accounting Policies - Stock Related Compensation and Segments (Details) $ in Millions				12 Months Ended
	May 17, 2017 shares	May 18, 2016 shares	May 20, 2015 shares	Dec. 31, 2017 USD ($) segment shares	Dec. 31, 2016 USD ($) shares	Dec. 31, 2015 USD ($) shares
Segment Reporting
Number of reportable segments | segment				1
Stock options
Stock Related Compensation
Expected volatility, minimum (as a percent)				17.00%
Expected volatility, maximum (as a percent)				22.00%
Risk-free interest rates, minimum (as a percent)				1.70%
Risk-free interest rates, maximum (as a percent)				3.10%
Number of shares awarded				819,010	725,400	665,370
Vesting period				10 years
Stock-based aggregate disclosure
Compensation expense for unvested common share awards which is yet to be recognized | $				$ 4.1
Weighted average period over which stock option expense will be recognized				4 years
Stock options | Minimum
Stock Related Compensation
Dividend yields (as a percent)				3.20%
Expected lives				7 years
Stock options | Maximum
Stock Related Compensation
Dividend yields (as a percent)				5.10%
Expected lives				9 years
Stock options | Employees
Stock Related Compensation
Number of shares awarded	754,210	660,600	660,570	754,210
Stock options | Director
Stock Related Compensation
Number of shares awarded	64,800	64,800	64,800	64,800
Restricted common shares
Stock Related Compensation
Vesting period				10 years
Stock-based aggregate disclosure
Stock-based employee compensation expense | $				$ 3.8	$ 3.5	$ 3.0
Effect of compensation expense on net income included in income before income taxes | $				$ 2.3	$ 2.2	$ 1.8
Restricted common shares | Employees
Stock Related Compensation
Number of shares awarded	378,050	310,160	282,050	353,750
Restricted common shares | Director
Stock Related Compensation
Number of shares awarded	24,300	24,300	24,300	24,300

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Marketable Securities - Available For Sale (Details) - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016
Amortized cost
Marketable securities available-for-sale, amortized cost	$ 800,094	$ 825,552
Gross unrealized holding gains
Marketable securities available-for-sale, gross unrealized holding gains	3,453	9,862
Gross unrealized holding losses
Marketable securities available-for-sale, gross unrealized holding losses	(11,012)	(9,214)
Fair value
Marketable securities available-for-sale, total fair value	792,535	826,200
U.S. Government and agencies
Amortized cost
Due in one year or less	1	6
Gross unrealized holding gains
Due in one year or less	0	0
Gross unrealized holding losses
Due in one year or less	0	0
Fair value
Due in one year or less	1	6
Government sponsored enterprises
Amortized cost
Due in one year or less	66,566	74,980
Due after one year through five years	140,624	220,937
Due after five years through ten years	0	585
Due after ten years	4,833	0
Gross unrealized holding gains
Due in one year or less	14	5
Due after one year through five years	0	203
Due after five years through ten years	0	0
Due after ten years	0	0
Gross unrealized holding losses
Due in one year or less	(289)	(33)
Due after one year through five years	(2,402)	(2,504)
Due after five years through ten years	0	(3)
Due after ten years	(77)	0
Fair value
Due in one year or less	66,291	74,952
Due after one year through five years	138,222	218,636
Due after five years through ten years	0	582
Due after ten years	4,756	0
Equity securities
Amortized cost
Marketable securities available-for-sale, amortized cost	551	3,351
Gross unrealized holding gains
Marketable securities available-for-sale, gross unrealized holding gains	29	1,095
Gross unrealized holding losses
Marketable securities available-for-sale, gross unrealized holding losses	(6)	(6)
Fair value
Marketable securities available-for-sale, total fair value	574	4,440
Municipal securities
Amortized cost
Due in one year or less	2,492	2,449
Due after one year through five years	7,072	9,448
Due after five years through ten years	14,576	11,794
Due after ten years	26,371	38,141
Gross unrealized holding gains
Due in one year or less	7	7
Due after one year through five years	82	105
Due after five years through ten years	171	137
Due after ten years	292	1,027
Gross unrealized holding losses
Due in one year or less	(1)	0
Due after one year through five years	(6)	(21)
Due after five years through ten years	0	(1)
Due after ten years	0	(16)
Fair value
Due in one year or less	2,498	2,456
Due after one year through five years	7,148	9,532
Due after five years through ten years	14,747	11,930
Due after ten years	26,663	39,152
Corporate debt issues
Amortized cost
Due after ten years	909	14,367
Gross unrealized holding gains
Due after ten years	0	2,935
Gross unrealized holding losses
Due after ten years	0	(322)
Fair value
Due after ten years	909	16,980
Residential mortgage-backed securities
Amortized cost
Marketable securities available-for-sale, amortized cost	536,099	449,494
Gross unrealized holding gains
Marketable securities available-for-sale, gross unrealized holding gains	2,858	4,348
Gross unrealized holding losses
Marketable securities available-for-sale, gross unrealized holding losses	(8,231)	(6,308)
Fair value
Marketable securities available-for-sale, total fair value	530,726	447,534
Fixed rate | Pass-through
Amortized cost
Marketable securities available-for-sale, amortized cost	144,411	175,398
Gross unrealized holding gains
Marketable securities available-for-sale, gross unrealized holding gains	1,108	1,849
Gross unrealized holding losses
Marketable securities available-for-sale, gross unrealized holding losses	(2,817)	(2,680)
Fair value
Marketable securities available-for-sale, total fair value	142,702	174,567
Fixed rate | Non-agency CMOs
Amortized cost
Marketable securities available-for-sale, amortized cost	15	100
Gross unrealized holding gains
Marketable securities available-for-sale, gross unrealized holding gains	0	1
Gross unrealized holding losses
Marketable securities available-for-sale, gross unrealized holding losses	0	0
Fair value
Marketable securities available-for-sale, total fair value	15	101
Fixed rate | Agency CMOs
Amortized cost
Marketable securities available-for-sale, amortized cost	284,320	165,535
Gross unrealized holding gains
Marketable securities available-for-sale, gross unrealized holding gains	37	185
Gross unrealized holding losses
Marketable securities available-for-sale, gross unrealized holding losses	(5,271)	(3,455)
Fair value
Marketable securities available-for-sale, total fair value	279,086	162,265
Variable rate | Pass-through
Amortized cost
Marketable securities available-for-sale, amortized cost	33,079	43,587
Gross unrealized holding gains
Marketable securities available-for-sale, gross unrealized holding gains	1,464	2,007
Gross unrealized holding losses
Marketable securities available-for-sale, gross unrealized holding losses	(6)	(6)
Fair value
Marketable securities available-for-sale, total fair value	34,537	45,588
Variable rate | Agency CMOs
Amortized cost
Marketable securities available-for-sale, amortized cost	74,274	64,874
Gross unrealized holding gains
Marketable securities available-for-sale, gross unrealized holding gains	249	306
Gross unrealized holding losses
Marketable securities available-for-sale, gross unrealized holding losses	(137)	(167)
Fair value
Marketable securities available-for-sale, total fair value	$ 74,386	$ 65,013

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Marketable Securities - Held To Maturity (Details) - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016
Amortized cost
Held-to-maturity securities, amortized cost	$ 29,678	$ 19,978
Gross unrealized holding gains
Held-to-maturity securities, gross unrealized holding gains	237	448
Gross unrealized holding losses
Held-to-maturity securities, gross unrealized holding losses	(248)	0
Fair value
Held-to-maturity securities, fair value	29,667	20,426
Municipal securities
Amortized cost
Due after ten years		4,808
Gross unrealized holding gains
Due after ten years		65
Gross unrealized holding losses
Due after ten years		0
Fair value
Due after ten years		4,873
Residential mortgage-backed securities
Amortized cost
Held-to-maturity securities, amortized cost	29,678	15,170
Gross unrealized holding gains
Held-to-maturity securities, gross unrealized holding gains	237	383
Gross unrealized holding losses
Held-to-maturity securities, gross unrealized holding losses	(248)	0
Fair value
Held-to-maturity securities, fair value	29,667	15,553
Fixed rate | Pass-through
Amortized cost
Held-to-maturity securities, amortized cost	3,760	4,807
Gross unrealized holding gains
Held-to-maturity securities, gross unrealized holding gains	140	217
Gross unrealized holding losses
Held-to-maturity securities, gross unrealized holding losses	0	0
Fair value
Held-to-maturity securities, fair value	3,900	5,024
Fixed rate | Agency CMOs
Amortized cost
Held-to-maturity securities, amortized cost	22,906	6,674
Gross unrealized holding gains
Held-to-maturity securities, gross unrealized holding gains	20	94
Gross unrealized holding losses
Held-to-maturity securities, gross unrealized holding losses	(248)	0
Fair value
Held-to-maturity securities, fair value	22,678	6,768
Variable rate | Pass-through
Amortized cost
Held-to-maturity securities, amortized cost	2,283	2,848
Gross unrealized holding gains
Held-to-maturity securities, gross unrealized holding gains	64	58
Gross unrealized holding losses
Held-to-maturity securities, gross unrealized holding losses	0	0
Fair value
Held-to-maturity securities, fair value	2,347	2,906
Variable rate | Agency CMOs
Amortized cost
Held-to-maturity securities, amortized cost	729	841
Gross unrealized holding gains
Held-to-maturity securities, gross unrealized holding gains	13	14
Gross unrealized holding losses
Held-to-maturity securities, gross unrealized holding losses	0	0
Fair value
Held-to-maturity securities, fair value	$ 742	$ 855

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Marketable Securities - Issuers and the Carrying Values of Mortgage-Backed Securities (Details) - USD ($)	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Marketable securities
Carrying value of marketable securities pledged	$ 161,600,000
Marketable securities classified as available-for-sale sold	36,811,000	$ 1,951,000	$ 1,246,000
Gross realized gains	1,800,000	268,000	121,000
Gross realized losses	626,000	0	67,000
Non-cash credit related other-than-temporary impairment	0	0	$ 0
Residential mortgage-backed securities
Marketable securities
Total residential mortgage-backed securities	560,404,000	462,704,000
Residential mortgage-backed securities | FNMA
Marketable securities
Total residential mortgage-backed securities	286,031,000	210,373,000
Residential mortgage-backed securities | GNMA
Marketable securities
Total residential mortgage-backed securities	37,796,000	42,221,000
Residential mortgage-backed securities | FHLMC
Marketable securities
Total residential mortgage-backed securities	236,007,000	202,822,000
Residential mortgage-backed securities | SBA
Marketable securities
Total residential mortgage-backed securities	0	6,608,000
Residential mortgage-backed securities | Other (including non-agency)
Marketable securities
Total residential mortgage-backed securities	$ 570,000	$ 680,000

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Marketable Securities - Fair Value and Gross Unrealized Losses on Investment Securities (Details) $ in Thousands	12 Months Ended
	Dec. 31, 2017 USD ($) investment	Dec. 31, 2016 USD ($)
Marketable securities
Less than 12 months - Fair value	$ 249,272	$ 457,286
Less than 12 months - Unrealized loss	(2,536)	(6,322)
12 months or more - Fair value	400,583	99,645
12 months or more - Unrealized loss	(8,724)	(2,892)
Total - Fair value	649,855	556,931
Total - Unrealized loss	$ (11,260)	(9,214)
Number of investments that are temporarily impaired | investment	173
Aggregate carrying amount of cost-method investment	$ 822,200
Government sponsored enterprises
Marketable securities
Less than 12 months - Fair value	5,006	238,003
Less than 12 months - Unrealized loss	(7)	(2,448)
12 months or more - Fair value	197,695	9,205
12 months or more - Unrealized loss	(2,761)	(92)
Total - Fair value	202,701	247,208
Total - Unrealized loss	(2,768)	(2,540)
Corporate debt issues
Marketable securities
Less than 12 months - Fair value	0	0
Less than 12 months - Unrealized loss	0	0
12 months or more - Fair value	0	2,107
12 months or more - Unrealized loss	0	(322)
Total - Fair value	0	2,107
Total - Unrealized loss	0	(322)
Equity securities
Marketable securities
Less than 12 months - Fair value	0	0
Less than 12 months - Unrealized loss	0	0
12 months or more - Fair value	544	544
12 months or more - Unrealized loss	(6)	(6)
Total - Fair value	544	544
Total - Unrealized loss	(6)	(6)
Municipal securities
Marketable securities
Less than 12 months - Fair value	4,563	5,621
Less than 12 months - Unrealized loss	(7)	(37)
12 months or more - Fair value	0	66
12 months or more - Unrealized loss	0	(1)
Total - Fair value	4,563	5,687
Total - Unrealized loss	(7)	(38)
Residential mortgage-backed securities - agency | Agency CMOs
Marketable securities
Less than 12 months - Fair value	239,703	213,662
Less than 12 months - Unrealized loss	(2,522)	(3,837)
12 months or more - Fair value	202,344	87,723
12 months or more - Unrealized loss	(5,957)	(2,471)
Total - Fair value	442,047	301,385
Total - Unrealized loss	$ (8,479)	$ (6,308)

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Marketable Securities - Categories of Investment Securities (Details) $ in Thousands	12 Months Ended
	Dec. 31, 2017 USD ($)
Marketable securities
Total - Amortized cost	$ 1
Total - Fair value	30
Total - Unrealized gain	29
Accumulated impairment charges	(471)
Freddie Mac preferred shares
Marketable securities
Total - Amortized cost	1
Total - Fair value	30
Total - Unrealized gain	29
Accumulated impairment charges	(119)
Trust preferred investments
Marketable securities
Total - Amortized cost	0
Total - Fair value	0
Total - Unrealized gain	0
Accumulated impairment charges	$ (352)

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Marketable Securities - Cumulative Roll Forward of Credit Related Impairment Losses Recognized in Earnings for Debt Securities Held and Not Intended to be Sold (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Cumulative roll forward of credit related impairment losses recognized in earnings for debt securities held and not intended to be sold:
Beginning balance	$ 7,942	$ 8,436
Credit losses on debt securities for which other-than-temporary impairment was not previously recognized	0	0
Credit losses on debt securities for which other-than-temporary impairment was previously recognized	(7,265)	(494)
Reduction for securities sold realized during the year	(325)	0
Additional credit losses on debt securities for which other-than-temporary impairment was previously recognized	0	0
Ending balance	$ 352	$ 7,942

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Loans Receivable and Allowance for Loan Losses - Summary of Originated and Acquired Loans (Details) - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans receivable, gross	$ 7,972,735	$ 7,746,648
Deferred loan costs	27,782	22,375
Allowance for loan losses	(56,795)	(60,939)	$ (62,672)	$ (67,518)
Loans Receivable, Net	7,736,614	7,496,408
Residential mortgage loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Undisbursed loan proceeds	(10,067)	(11,638)
Commercial real estate loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Undisbursed loan proceeds	(144,614)	(171,580)
Commercial loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Undisbursed loan proceeds	(52,427)	(28,458)
Personal Banking
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans receivable, gross	4,740,232	4,675,760
Allowance for loan losses		(16,116)	(16,121)
Personal Banking | Residential mortgage loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans receivable, gross	2,772,549	2,699,131
Allowance for loan losses		(4,656)	(4,692)
Loans held-for-sale	3,100	9,600
Personal Banking | Home equity loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans receivable, gross	1,310,355	1,345,370
Allowance for loan losses		(3,486)	(3,941)
Personal Banking | Consumer Finance Loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans receivable, gross	18,619	48,981
Personal Banking | Consumer loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans receivable, gross	638,709	582,278
Allowance for loan losses		(4,529)	(4,213)
Commercial Banking
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans receivable, gross	3,232,503	3,070,888
Allowance for loan losses		(39,177)	(44,849)
Commercial Banking | Commercial real estate loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans receivable, gross	2,599,340	2,513,669
Allowance for loan losses		(23,667)	(32,348)
Commercial Banking | Commercial loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans receivable, gross	633,163	557,219
Allowance for loan losses		(15,510)	(12,501)
Originated
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans receivable, gross	7,145,255	6,698,391
Deferred loan costs	26,255	20,081
Allowance for loan losses	(50,572)	(55,293)	(60,970)	(67,518)
Loans Receivable, Net	6,917,761	6,456,778
Originated | Residential mortgage loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Undisbursed loan proceeds	(10,067)	(11,638)
Originated | Commercial real estate loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Undisbursed loan proceeds	(141,967)	(168,595)
Originated | Commercial loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Undisbursed loan proceeds	(51,143)	(26,168)
Originated | Personal Banking
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans receivable, gross	4,269,735	4,076,170
Allowance for loan losses	(20,339)	(16,116)	(16,121)	(16,249)
Originated | Personal Banking | Residential mortgage loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans receivable, gross	2,658,726	2,565,620
Allowance for loan losses	(3,824)	(4,656)	(4,692)	(5,581)
Originated | Personal Banking | Home equity loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans receivable, gross	1,051,558	1,042,913
Allowance for loan losses	(4,072)	(3,486)	(3,941)	(4,550)
Originated | Personal Banking | Consumer Finance Loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans receivable, gross	18,619	48,981
Originated | Personal Banking | Consumer loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans receivable, gross	540,832	418,656
Allowance for loan losses	(8,475)	(4,529)	(4,213)	(3,044)
Originated | Commercial Banking
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans receivable, gross	2,875,520	2,622,221
Allowance for loan losses	(30,233)	(39,177)	(44,849)	(46,904)
Originated | Commercial Banking | Commercial real estate loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans receivable, gross	2,303,179	2,140,678
Allowance for loan losses	(19,911)	(23,667)	(32,348)	(33,389)
Originated | Commercial Banking | Commercial loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans receivable, gross	572,341	481,543
Allowance for loan losses	(10,322)	(15,510)	(12,501)	(13,515)
Acquired
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans receivable, gross	827,480	1,048,257
Deferred loan costs	1,527	2,294
Allowance for loan losses	(6,223)	(5,646)	(1,702)	0
Loans Receivable, Net	818,853	1,039,630
Acquired | Residential mortgage loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Undisbursed loan proceeds	0	0
Acquired | Commercial real estate loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Undisbursed loan proceeds	(2,647)	(2,985)
Acquired | Commercial loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Undisbursed loan proceeds	(1,284)	(2,290)
Acquired | Personal Banking
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans receivable, gross	470,497	599,590
Allowance for loan losses	(1,783)	(1,771)	(229)	0
Acquired | Personal Banking | Residential mortgage loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans receivable, gross	113,823	133,511
Allowance for loan losses	(131)	(71)	(18)	0
Acquired | Personal Banking | Home equity loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans receivable, gross	258,797	302,457
Allowance for loan losses	(762)	(1,047)	(101)	0
Acquired | Personal Banking | Consumer Finance Loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans receivable, gross	0	0
Acquired | Personal Banking | Consumer loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans receivable, gross	97,877	163,622
Allowance for loan losses	(890)	(653)	(110)	0
Acquired | Commercial Banking
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans receivable, gross	356,983	448,667
Allowance for loan losses	(4,440)	(3,875)	(1,473)	0
Acquired | Commercial Banking | Commercial real estate loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans receivable, gross	296,161	372,991
Allowance for loan losses	(3,549)	(3,008)	(1,439)	0
Acquired | Commercial Banking | Commercial loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans receivable, gross	60,822	75,676
Allowance for loan losses	$ (891)	$ (867)	$ (34)	$ 0

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Loans Receivable and Allowance for Loan Losses - Narrative (Details) - USD ($) $ in Millions	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Receivables [Abstract]
Serviced loans for others	$ 887.3	$ 918.9	$ 776.0
Percentage of loan portfolio secured by properties located in Pennsylvania	60.00%	62.00%
Adjustable rate loans	$ 2,856.0	$ 2,755.0
Fixed rate loans	$ 5,117.0	$ 4,992.0

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Loans Receivable and Allowance for Loan Losses - Outstanding Principal Balance and Related Carrying Value of Acquired Loans (Details) - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016
Acquired
Accounts, Notes, Loans and Financing Receivable [Line Items]
Outstanding principal balance	$ 833,940	$ 1,056,486
Carrying value	825,076	1,045,276
Acquired loans evaluated individually for future credit losses
Accounts, Notes, Loans and Financing Receivable [Line Items]
Outstanding principal balance	9,735	16,108
Carrying value	6,875	12,665
Acquired loans evaluated collectively for future credit losses
Accounts, Notes, Loans and Financing Receivable [Line Items]
Outstanding principal balance	824,205	1,040,378
Carrying value	$ 818,201	$ 1,032,611

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Loans Receivable and Allowance for Loan Losses - Changes in the Accretable Discount (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Receivables [Abstract]
Beginning balance	$ 2,187	$ 2,019
Accretion	(1,318)	(1,170)
Net reclassification from nonaccretable yield	671	1,338
Ending balance	$ 1,540	$ 2,187

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Loans Receivable and Allowance for Loan Losses - Composition of Acquired Impaired Loans by Portfolio Segment and by Class of Financing Receivable (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Composition of impaired loans by portfolio segment and by class of financing receivable
Carrying value	$ 84,625	$ 108,061	$ 117,851
Average recorded investment in impaired loans	97,193	118,675	130,528
Interest income/ accretion recognized	3,982	5,596	5,462
Acquired loans evaluated individually for future credit losses
Composition of impaired loans by portfolio segment and by class of financing receivable
Carrying value	6,875	12,665
Outstanding principal balance	9,735	16,108
Related impairment reserve	88	267
Average recorded investment in impaired loans	9,770	14,766
Interest income/ accretion recognized	1,318	1,170
Personal Banking
Composition of impaired loans by portfolio segment and by class of financing receivable
Carrying value	36,833	38,606	37,679
Average recorded investment in impaired loans	35,102	37,420	37,175
Interest income/ accretion recognized	1,552	1,741	1,542
Personal Banking | Acquired loans evaluated individually for future credit losses
Composition of impaired loans by portfolio segment and by class of financing receivable
Carrying value	2,384	2,818
Outstanding principal balance	4,259	5,034
Related impairment reserve	49	215
Average recorded investment in impaired loans	2,601	3,575
Interest income/ accretion recognized	389	438
Personal Banking | Residential mortgage loans
Composition of impaired loans by portfolio segment and by class of financing receivable
Carrying value	21,605	24,193	24,858
Average recorded investment in impaired loans	21,531	24,483	24,554
Interest income/ accretion recognized	892	1,079	944
Personal Banking | Residential mortgage loans | Acquired loans evaluated individually for future credit losses
Composition of impaired loans by portfolio segment and by class of financing receivable
Carrying value	1,182	1,319
Outstanding principal balance	1,880	2,062
Related impairment reserve	24	204
Average recorded investment in impaired loans	1,251	1,650
Interest income/ accretion recognized	181	202
Personal Banking | Home equity loans
Composition of impaired loans by portfolio segment and by class of financing receivable
Carrying value	10,356	9,304	9,369
Average recorded investment in impaired loans	9,150	9,234	9,644
Interest income/ accretion recognized	452	496	497
Personal Banking | Home equity loans | Acquired loans evaluated individually for future credit losses
Composition of impaired loans by portfolio segment and by class of financing receivable
Carrying value	1,143	1,363
Outstanding principal balance	2,219	2,669
Related impairment reserve	21	8
Average recorded investment in impaired loans	1,253	1,724
Interest income/ accretion recognized	157	185
Personal Banking | Consumer loans
Composition of impaired loans by portfolio segment and by class of financing receivable
Carrying value	4,673	4,366	2,660
Average recorded investment in impaired loans	4,042	2,931	2,209
Interest income/ accretion recognized	188	131	72
Personal Banking | Consumer loans | Acquired loans evaluated individually for future credit losses
Composition of impaired loans by portfolio segment and by class of financing receivable
Carrying value	59	136
Outstanding principal balance	160	303
Related impairment reserve	4	3
Average recorded investment in impaired loans	97	201
Interest income/ accretion recognized	51	51
Commercial Banking
Composition of impaired loans by portfolio segment and by class of financing receivable
Carrying value	47,792	69,455	80,172
Average recorded investment in impaired loans	62,091	81,255	93,353
Interest income/ accretion recognized	2,430	3,855	3,920
Commercial Banking | Acquired loans evaluated individually for future credit losses
Composition of impaired loans by portfolio segment and by class of financing receivable
Carrying value	4,491	9,847
Outstanding principal balance	5,476	11,074
Related impairment reserve	39	52
Average recorded investment in impaired loans	7,169	11,191
Interest income/ accretion recognized	929	732
Commercial Banking | Commercial real estate loans
Composition of impaired loans by portfolio segment and by class of financing receivable
Carrying value	37,027	53,928	66,009
Average recorded investment in impaired loans	49,981	64,350	77,166
Interest income/ accretion recognized	1,758	2,864	3,226
Commercial Banking | Commercial real estate loans | Acquired loans evaluated individually for future credit losses
Composition of impaired loans by portfolio segment and by class of financing receivable
Carrying value	4,388	9,596
Outstanding principal balance	5,363	10,809
Related impairment reserve	39	52
Average recorded investment in impaired loans	6,992	10,942
Interest income/ accretion recognized	914	721
Commercial Banking | Commercial loans
Composition of impaired loans by portfolio segment and by class of financing receivable
Carrying value	10,765	15,527	14,163
Average recorded investment in impaired loans	12,110	16,905	16,187
Interest income/ accretion recognized	672	991	$ 694
Commercial Banking | Commercial loans | Acquired loans evaluated individually for future credit losses
Composition of impaired loans by portfolio segment and by class of financing receivable
Carrying value	103	251
Outstanding principal balance	113	265
Related impairment reserve	0	0
Average recorded investment in impaired loans	177	249
Interest income/ accretion recognized	$ 15	$ 11

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Loans Receivable and Allowance for Loan Losses - Changes in the Allowance for Losses on Loans Receivable (Details) - USD ($) $ in Thousands	3 Months Ended												12 Months Ended
	Dec. 31, 2017	Sep. 30, 2017	Jun. 30, 2017	Mar. 31, 2017	Dec. 31, 2016	Sep. 30, 2016	Jun. 30, 2016	Mar. 31, 2016	Dec. 31, 2015	Sep. 30, 2015	Jun. 30, 2015	Mar. 31, 2015	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Changes in allowance for losses on allocated loans receivable
Balance at the beginning of the period				$ 60,939				$ 62,672				$ 67,518	$ 60,939	$ 62,672	$ 67,518
Provision	$ 6,525	$ 3,027	$ 5,562	4,637	$ 2,145	$ 5,538	$ 4,199	1,660	$ 4,595	$ 3,167	$ 1,050	900	19,751	13,542	9,712
Charge-offs													(31,254)	(24,881)	(26,333)
Recoveries													7,359	9,606	11,775
Balance at the end of the period	56,795				60,939				62,672				56,795	60,939	62,672
Personal Banking
Changes in allowance for losses on allocated loans receivable
Balance at the beginning of the period				16,116				16,121					16,116	16,121
Provision														12,251
Charge-offs														(14,543)
Recoveries														2,287
Balance at the end of the period					16,116				16,121					16,116	16,121
Personal Banking | Residential mortgage loans
Changes in allowance for losses on allocated loans receivable
Balance at the beginning of the period				4,656				4,692					4,656	4,692
Provision														2,906
Charge-offs														(3,228)
Recoveries														286
Balance at the end of the period					4,656				4,692					4,656	4,692
Personal Banking | Home equity loans
Changes in allowance for losses on allocated loans receivable
Balance at the beginning of the period				3,486				3,941					3,486	3,941
Provision														293
Charge-offs														(1,090)
Recoveries														342
Balance at the end of the period					3,486				3,941					3,486	3,941
Personal Banking | Consumer Finance Loans
Changes in allowance for losses on allocated loans receivable
Balance at the beginning of the period				3,445				3,275					3,445	3,275
Provision														3,117
Charge-offs														(3,323)
Recoveries														376
Balance at the end of the period					3,445				3,275					3,445	3,275
Personal Banking | Consumer loans
Changes in allowance for losses on allocated loans receivable
Balance at the beginning of the period				4,529				4,213					4,529	4,213
Provision														5,935
Charge-offs														(6,902)
Recoveries														1,283
Balance at the end of the period					4,529				4,213					4,529	4,213
Commercial Banking
Changes in allowance for losses on allocated loans receivable
Balance at the beginning of the period				39,177				44,849					39,177	44,849
Provision														(4,985)
Charge-offs														(6,568)
Recoveries														5,881
Balance at the end of the period					39,177				44,849					39,177	44,849
Commercial Banking | Commercial real estate loans
Changes in allowance for losses on allocated loans receivable
Balance at the beginning of the period				23,667				32,348					23,667	32,348
Provision														(9,819)
Charge-offs														(2,403)
Recoveries														3,541
Balance at the end of the period					23,667				32,348					23,667	32,348
Commercial Banking | Commercial loans
Changes in allowance for losses on allocated loans receivable
Balance at the beginning of the period				15,510				12,501					15,510	12,501
Provision														4,834
Charge-offs														(4,165)
Recoveries														2,340
Balance at the end of the period					15,510				12,501					15,510	12,501
Originated
Changes in allowance for losses on allocated loans receivable
Balance at the beginning of the period				55,293				60,970				67,518	55,293	60,970	67,518
Provision													14,689	7,266	7,525
Charge-offs													(25,217)	(21,111)	(24,401)
Recoveries													5,807	8,168	10,328
Balance at the end of the period	50,572				55,293				60,970				50,572	55,293	60,970
Originated | Personal Banking
Changes in allowance for losses on allocated loans receivable
Balance at the beginning of the period				16,116				16,121				16,249	16,116	16,121	16,249
Provision													23,129		8,582
Charge-offs													(21,411)		(10,846)
Recoveries													2,505		2,136
Balance at the end of the period	20,339				16,116				16,121				20,339	16,116	16,121
Originated | Personal Banking | Residential mortgage loans
Changes in allowance for losses on allocated loans receivable
Balance at the beginning of the period				4,656				4,692				5,581	4,656	4,692	5,581
Provision													(390)		(96)
Charge-offs													(834)		(1,057)
Recoveries													392		264
Balance at the end of the period	3,824				4,656				4,692				3,824	4,656	4,692
Originated | Personal Banking | Home equity loans
Changes in allowance for losses on allocated loans receivable
Balance at the beginning of the period				3,486				3,941				4,550	3,486	3,941	4,550
Provision													1,474		693
Charge-offs													(1,080)		(1,716)
Recoveries													192		414
Balance at the end of the period	4,072				3,486				3,941				4,072	3,486	3,941
Originated | Personal Banking | Consumer Finance Loans
Changes in allowance for losses on allocated loans receivable
Balance at the beginning of the period				3,445				3,275				3,074	3,445	3,275	3,074
Provision													8,444		2,853
Charge-offs													(8,369)		(3,056)
Recoveries													448		404
Balance at the end of the period	3,968				3,445				3,275				3,968	3,445	3,275
Originated | Personal Banking | Consumer loans
Changes in allowance for losses on allocated loans receivable
Balance at the beginning of the period				4,529				4,213				3,044	4,529	4,213	3,044
Provision													13,601		5,132
Charge-offs													(11,128)		(5,017)
Recoveries													1,473		1,054
Balance at the end of the period	8,475				4,529				4,213				8,475	4,529	4,213
Originated | Commercial Banking
Changes in allowance for losses on allocated loans receivable
Balance at the beginning of the period				39,177				44,849				46,904	39,177	44,849	46,904
Provision													(8,440)		3,308
Charge-offs													(3,806)		(13,555)
Recoveries													3,302		8,192
Balance at the end of the period	30,233				39,177				44,849				30,233	39,177	44,849
Originated | Commercial Banking | Commercial real estate loans
Changes in allowance for losses on allocated loans receivable
Balance at the beginning of the period				23,667				32,348				33,389	23,667	32,348	33,389
Provision													(3,663)		540
Charge-offs													(1,344)		(5,741)
Recoveries													1,251		4,160
Balance at the end of the period	19,911				23,667				32,348				19,911	23,667	32,348
Originated | Commercial Banking | Commercial loans
Changes in allowance for losses on allocated loans receivable
Balance at the beginning of the period				15,510				12,501				13,515	15,510	12,501	13,515
Provision													(4,777)		2,768
Charge-offs													(2,462)		(7,814)
Recoveries													2,051		4,032
Balance at the end of the period	10,322				15,510				12,501				10,322	15,510	12,501
Originated | Unallocated
Changes in allowance for losses on allocated loans receivable
Balance at the beginning of the period								0				4,365		0	4,365
Provision															(4,365)
Charge-offs															0
Recoveries															0
Balance at the end of the period									0						0
Acquired
Changes in allowance for losses on allocated loans receivable
Balance at the beginning of the period				5,646				1,702				0	5,646	1,702	0
Provision													5,062	6,276	2,187
Charge-offs													(6,037)	(3,770)	(1,932)
Recoveries													1,552	1,438	1,447
Balance at the end of the period	6,223				5,646				1,702				6,223	5,646	1,702
Acquired | Personal Banking
Changes in allowance for losses on allocated loans receivable
Balance at the beginning of the period				1,771				229				0	1,771	229	0
Provision													1,453	3,283	482
Charge-offs													(2,179)	(2,381)	(978)
Recoveries													738	640	725
Balance at the end of the period	1,783				1,771				229				1,783	1,771	229
Acquired | Personal Banking | Residential mortgage loans
Changes in allowance for losses on allocated loans receivable
Balance at the beginning of the period				71				18				0	71	18	0
Provision													185	146	47
Charge-offs													(205)	(252)	(69)
Recoveries													80	159	40
Balance at the end of the period	131				71				18				131	71	18
Acquired | Personal Banking | Home equity loans
Changes in allowance for losses on allocated loans receivable
Balance at the beginning of the period				1,047				101				0	1,047	101	0
Provision													503	2,065	247
Charge-offs													(1,179)	(1,449)	(708)
Recoveries													391	330	562
Balance at the end of the period	762				1,047				101				762	1,047	101
Acquired | Personal Banking | Consumer loans
Changes in allowance for losses on allocated loans receivable
Balance at the beginning of the period				653				110				0	653	110	0
Provision													765	1,072	188
Charge-offs													(795)	(680)	(201)
Recoveries													267	151	123
Balance at the end of the period	890				653				110				890	653	110
Acquired | Commercial Banking
Changes in allowance for losses on allocated loans receivable
Balance at the beginning of the period				3,875				1,473				0	3,875	1,473	0
Provision													3,609	2,993	1,705
Charge-offs													(3,858)	(1,389)	(954)
Recoveries													814	798	722
Balance at the end of the period	4,440				3,875				1,473				4,440	3,875	1,473
Acquired | Commercial Banking | Commercial real estate loans
Changes in allowance for losses on allocated loans receivable
Balance at the beginning of the period				3,008				1,439				0	3,008	1,439	0
Provision													2,631	2,116	1,545
Charge-offs													(2,830)	(1,337)	(585)
Recoveries													740	790	479
Balance at the end of the period	3,549				3,008				1,439				3,549	3,008	1,439
Acquired | Commercial Banking | Commercial loans
Changes in allowance for losses on allocated loans receivable
Balance at the beginning of the period				$ 867				$ 34				$ 0	867	34	0
Provision													978	877	160
Charge-offs													(1,028)	(52)	(369)
Recoveries													74	8	243
Balance at the end of the period	$ 891				$ 867				$ 34				$ 891	$ 867	$ 34

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Loans Receivable and Allowance for Loan Losses - Loan Portfolio by Portfolio Segment and by Class of Financing Receivable (Details) - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Accounts, Notes, Loans and Financing Receivable [Line Items]
Recorded investment in loans receivable	$ 7,793,409	$ 7,557,347
Allowance for loan losses	56,795	60,939
Recorded investment in loans on nonaccrual	64,455	79,536
Recorded investment in loans 90 days or more past maturity and still accruing	502	649
TDRs	32,104	42,926	$ 51,115
Allowance for loan losses related to TDRs	3,144	4,590
Additional commitments to customers with loans classified as TDRs	247	438
Nonaccrual TDRs	12,285	16,346
Personal Banking
Accounts, Notes, Loans and Financing Receivable [Line Items]
Recorded investment in loans receivable	4,757,947	4,686,497
Allowance for loan losses	22,122	17,887
Recorded investment in loans on nonaccrual	28,570	31,238
Recorded investment in loans 90 days or more past maturity and still accruing	502	85
TDRs	9,716	9,112
Allowance for loan losses related to TDRs	1,277	1,158
Additional commitments to customers with loans classified as TDRs	4	4
Personal Banking | Residential mortgage loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Recorded investment in loans receivable	2,776,203	2,698,166
Allowance for loan losses	3,955	4,727
Recorded investment in loans on nonaccrual	14,791	18,264
Recorded investment in loans 90 days or more past maturity and still accruing	0	0
TDRs	8,000	7,299
Allowance for loan losses related to TDRs	815	708
Additional commitments to customers with loans classified as TDRs	0	0
Personal Banking | Home equity loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Recorded investment in loans receivable	1,310,355	1,345,370
Allowance for loan losses	4,834	4,533
Recorded investment in loans on nonaccrual	8,907	7,865
Recorded investment in loans 90 days or more past maturity and still accruing	120	0
TDRs	1,716	1,813
Allowance for loan losses related to TDRs	462	450
Additional commitments to customers with loans classified as TDRs	4	4
Personal Banking | Consumer Finance Loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Recorded investment in loans receivable	18,619	48,981
Allowance for loan losses	3,968	3,445
Recorded investment in loans on nonaccrual	199	743
Recorded investment in loans 90 days or more past maturity and still accruing	3	0
TDRs	0	0
Allowance for loan losses related to TDRs	0	0
Additional commitments to customers with loans classified as TDRs	0	0
Personal Banking | Consumer loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Recorded investment in loans receivable	652,770	593,980
Allowance for loan losses	9,365	5,182
Recorded investment in loans on nonaccrual	4,673	4,366
Recorded investment in loans 90 days or more past maturity and still accruing	379	85
TDRs	0	0
Allowance for loan losses related to TDRs	0	0
Additional commitments to customers with loans classified as TDRs	0	0
Commercial Banking
Accounts, Notes, Loans and Financing Receivable [Line Items]
Recorded investment in loans receivable	3,035,462	2,870,850
Allowance for loan losses	34,673	43,052
Recorded investment in loans on nonaccrual	35,885	48,298
Recorded investment in loans 90 days or more past maturity and still accruing	0	564
TDRs	22,388	33,814
Allowance for loan losses related to TDRs	1,867	3,432
Additional commitments to customers with loans classified as TDRs	243	434
Commercial Banking | Commercial real estate loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Recorded investment in loans receivable	2,454,726	2,342,089
Allowance for loan losses	23,460	26,675
Recorded investment in loans on nonaccrual	28,473	38,724
Recorded investment in loans 90 days or more past maturity and still accruing	0	564
TDRs	15,691	24,483
Allowance for loan losses related to TDRs	1,125	2,072
Additional commitments to customers with loans classified as TDRs	235	417
Commercial Banking | Commercial loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Recorded investment in loans receivable	580,736	528,761
Allowance for loan losses	11,213	16,377
Recorded investment in loans on nonaccrual	7,412	9,574
Recorded investment in loans 90 days or more past maturity and still accruing	0	0
TDRs	6,697	9,331
Allowance for loan losses related to TDRs	742	1,360
Additional commitments to customers with loans classified as TDRs	$ 8	$ 17

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Loans Receivable and Allowance for Loan Losses - Composition of Impaired Loans by Portfolio Segment and Class of Financing Receivable (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Composition of impaired loans by portfolio segment and by class of financing receivable
Nonaccrual loans	$ 64,455	$ 79,536
Total impaired loans	84,625	108,061	$ 117,851
Average recorded investment in impaired loans	97,193	118,675	130,528
Interest income/ accretion recognized	3,982	5,596	5,462
Personal Banking
Composition of impaired loans by portfolio segment and by class of financing receivable
Nonaccrual loans	28,570	31,238
Total impaired loans	36,833	38,606	37,679
Average recorded investment in impaired loans	35,102	37,420	37,175
Interest income/ accretion recognized	1,552	1,741	1,542
Commercial Banking
Composition of impaired loans by portfolio segment and by class of financing receivable
Nonaccrual loans	35,885	48,298
Total impaired loans	47,792	69,455	80,172
Average recorded investment in impaired loans	62,091	81,255	93,353
Interest income/ accretion recognized	2,430	3,855	3,920
Residential mortgage loans | Personal Banking
Composition of impaired loans by portfolio segment and by class of financing receivable
Nonaccrual loans	14,791	18,264
Total impaired loans	21,605	24,193	24,858
Average recorded investment in impaired loans	21,531	24,483	24,554
Interest income/ accretion recognized	892	1,079	944
Home equity loans | Personal Banking
Composition of impaired loans by portfolio segment and by class of financing receivable
Nonaccrual loans	8,907	7,865
Total impaired loans	10,356	9,304	9,369
Average recorded investment in impaired loans	9,150	9,234	9,644
Interest income/ accretion recognized	452	496	497
Consumer Finance Loans | Personal Banking
Composition of impaired loans by portfolio segment and by class of financing receivable
Nonaccrual loans	199	743
Total impaired loans	199	743	792
Average recorded investment in impaired loans	379	772	768
Interest income/ accretion recognized	20	35	29
Consumer loans | Personal Banking
Composition of impaired loans by portfolio segment and by class of financing receivable
Nonaccrual loans	4,673	4,366
Total impaired loans	4,673	4,366	2,660
Average recorded investment in impaired loans	4,042	2,931	2,209
Interest income/ accretion recognized	188	131	72
Commercial real estate loans | Commercial Banking
Composition of impaired loans by portfolio segment and by class of financing receivable
Nonaccrual loans	28,473	38,724
Total impaired loans	37,027	53,928	66,009
Average recorded investment in impaired loans	49,981	64,350	77,166
Interest income/ accretion recognized	1,758	2,864	3,226
Commercial loans | Commercial Banking
Composition of impaired loans by portfolio segment and by class of financing receivable
Nonaccrual loans	7,412	9,574
Total impaired loans	10,765	15,527	14,163
Average recorded investment in impaired loans	12,110	16,905	16,187
Interest income/ accretion recognized	672	991	694
90 days or greater delinquent
Composition of impaired loans by portfolio segment and by class of financing receivable
Nonaccrual loans	43,077	45,181	43,268
90 days or greater delinquent | Personal Banking
Composition of impaired loans by portfolio segment and by class of financing receivable
Nonaccrual loans	24,576	22,544	24,360
90 days or greater delinquent | Commercial Banking
Composition of impaired loans by portfolio segment and by class of financing receivable
Nonaccrual loans	18,501	22,637	18,908
90 days or greater delinquent | Residential mortgage loans | Personal Banking
Composition of impaired loans by portfolio segment and by class of financing receivable
Nonaccrual loans	13,509	13,169	15,810
90 days or greater delinquent | Home equity loans | Personal Banking
Composition of impaired loans by portfolio segment and by class of financing receivable
Nonaccrual loans	7,251	5,552	5,650
90 days or greater delinquent | Consumer Finance Loans | Personal Banking
Composition of impaired loans by portfolio segment and by class of financing receivable
Nonaccrual loans	199	743	792
90 days or greater delinquent | Consumer loans | Personal Banking
Composition of impaired loans by portfolio segment and by class of financing receivable
Nonaccrual loans	3,617	3,080	2,108
90 days or greater delinquent | Commercial real estate loans | Commercial Banking
Composition of impaired loans by portfolio segment and by class of financing receivable
Nonaccrual loans	15,361	19,264	16,449
90 days or greater delinquent | Commercial loans | Commercial Banking
Composition of impaired loans by portfolio segment and by class of financing receivable
Nonaccrual loans	3,140	3,373	2,459
Less than 90 days delinquent
Composition of impaired loans by portfolio segment and by class of financing receivable
Nonaccrual loans	21,378	34,355	28,394
Loans less than 90 days delinquent reviewed for impairment	5,337	6,459	18,135
TDRs less than 90 days delinquent not included elsewhere	14,833	22,066	28,054
Less than 90 days delinquent | Personal Banking
Composition of impaired loans by portfolio segment and by class of financing receivable
Nonaccrual loans	3,994	8,694	6,386
Loans less than 90 days delinquent reviewed for impairment	0	0	0
TDRs less than 90 days delinquent not included elsewhere	8,263	7,368	6,933
Less than 90 days delinquent | Commercial Banking
Composition of impaired loans by portfolio segment and by class of financing receivable
Nonaccrual loans	17,384	25,661	22,008
Loans less than 90 days delinquent reviewed for impairment	5,337	6,459	18,135
TDRs less than 90 days delinquent not included elsewhere	6,570	14,698	21,121
Less than 90 days delinquent | Residential mortgage loans | Personal Banking
Composition of impaired loans by portfolio segment and by class of financing receivable
Nonaccrual loans	1,282	5,095	3,962
Loans less than 90 days delinquent reviewed for impairment	0	0	0
TDRs less than 90 days delinquent not included elsewhere	6,814	5,929	5,086
Less than 90 days delinquent | Home equity loans | Personal Banking
Composition of impaired loans by portfolio segment and by class of financing receivable
Nonaccrual loans	1,656	2,313	1,872
Loans less than 90 days delinquent reviewed for impairment	0	0	0
TDRs less than 90 days delinquent not included elsewhere	1,449	1,439	1,847
Less than 90 days delinquent | Consumer Finance Loans | Personal Banking
Composition of impaired loans by portfolio segment and by class of financing receivable
Nonaccrual loans	0	0	0
Loans less than 90 days delinquent reviewed for impairment	0	0	0
TDRs less than 90 days delinquent not included elsewhere	0	0	0
Less than 90 days delinquent | Consumer loans | Personal Banking
Composition of impaired loans by portfolio segment and by class of financing receivable
Nonaccrual loans	1,056	1,286	552
Loans less than 90 days delinquent reviewed for impairment	0	0	0
TDRs less than 90 days delinquent not included elsewhere	0	0	0
Less than 90 days delinquent | Commercial real estate loans | Commercial Banking
Composition of impaired loans by portfolio segment and by class of financing receivable
Nonaccrual loans	13,112	19,460	16,972
Loans less than 90 days delinquent reviewed for impairment	4,431	3,622	16,121
TDRs less than 90 days delinquent not included elsewhere	4,123	11,582	16,467
Less than 90 days delinquent | Commercial loans | Commercial Banking
Composition of impaired loans by portfolio segment and by class of financing receivable
Nonaccrual loans	4,272	6,201	5,036
Loans less than 90 days delinquent reviewed for impairment	906	2,837	2,014
TDRs less than 90 days delinquent not included elsewhere	$ 2,447	$ 3,116	$ 4,654

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Loans Receivable and Allowance for Loan Losses - Evaluation of Impaired Loans by Portfolio Segment and by Class of Financing Receivable (Details) - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016
Evaluation of impaired loans by portfolio segment and by class of financing receivable
Loans collectively evaluated for impairment	$ 7,752,745	$ 7,503,912
Loans individually evaluated for impairment	40,664	53,435
Loans individually evaluated for impairment for which there is a related impairment reserve	37,411	48,056
Related impairment reserve	3,990	6,123
Loans individually evaluated for impairment for which there is no related reserve	3,253	5,379
Personal Banking
Evaluation of impaired loans by portfolio segment and by class of financing receivable
Loans collectively evaluated for impairment	4,747,578	4,676,277
Loans individually evaluated for impairment	10,369	10,220
Loans individually evaluated for impairment for which there is a related impairment reserve	10,369	10,220
Related impairment reserve	1,302	1,188
Loans individually evaluated for impairment for which there is no related reserve	0	0
Personal Banking | Residential mortgage loans
Evaluation of impaired loans by portfolio segment and by class of financing receivable
Loans collectively evaluated for impairment	2,767,635	2,689,886
Loans individually evaluated for impairment	8,568	8,280
Loans individually evaluated for impairment for which there is a related impairment reserve	8,568	8,280
Related impairment reserve	816	709
Loans individually evaluated for impairment for which there is no related reserve	0	0
Personal Banking | Home equity loans
Evaluation of impaired loans by portfolio segment and by class of financing receivable
Loans collectively evaluated for impairment	1,308,639	1,343,556
Loans individually evaluated for impairment	1,716	1,814
Loans individually evaluated for impairment for which there is a related impairment reserve	1,716	1,814
Related impairment reserve	461	450
Loans individually evaluated for impairment for which there is no related reserve	0	0
Personal Banking | Consumer Finance Loans
Evaluation of impaired loans by portfolio segment and by class of financing receivable
Loans collectively evaluated for impairment	18,619	48,981
Loans individually evaluated for impairment	0	0
Loans individually evaluated for impairment for which there is a related impairment reserve	0	0
Related impairment reserve	0	0
Loans individually evaluated for impairment for which there is no related reserve	0	0
Personal Banking | Consumer loans
Evaluation of impaired loans by portfolio segment and by class of financing receivable
Loans collectively evaluated for impairment	652,685	593,854
Loans individually evaluated for impairment	85	126
Loans individually evaluated for impairment for which there is a related impairment reserve	85	126
Related impairment reserve	25	29
Loans individually evaluated for impairment for which there is no related reserve	0	0
Commercial Banking
Evaluation of impaired loans by portfolio segment and by class of financing receivable
Loans collectively evaluated for impairment	3,005,167	2,827,635
Loans individually evaluated for impairment	30,295	43,215
Loans individually evaluated for impairment for which there is a related impairment reserve	27,042	37,836
Related impairment reserve	2,688	4,935
Loans individually evaluated for impairment for which there is no related reserve	3,253	5,379
Commercial Banking | Commercial real estate loans
Evaluation of impaired loans by portfolio segment and by class of financing receivable
Loans collectively evaluated for impairment	2,433,755	2,309,186
Loans individually evaluated for impairment	20,971	32,903
Loans individually evaluated for impairment for which there is a related impairment reserve	18,470	27,594
Related impairment reserve	1,859	3,545
Loans individually evaluated for impairment for which there is no related reserve	2,501	5,309
Commercial Banking | Commercial loans
Evaluation of impaired loans by portfolio segment and by class of financing receivable
Loans collectively evaluated for impairment	571,412	518,449
Loans individually evaluated for impairment	9,324	10,312
Loans individually evaluated for impairment for which there is a related impairment reserve	8,572	10,242
Related impairment reserve	829	1,390
Loans individually evaluated for impairment for which there is no related reserve	$ 752	$ 70

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Loans Receivable and Allowance for Loan Losses - Roll Forward of Troubled Debt Restructurings (Details) $ in Thousands	12 Months Ended
	Dec. 31, 2017 USD ($) contract	Dec. 31, 2016 USD ($) contract
Number of contract
Beginning balance | contract	225	227
Number of contracts new TDRs | contract	24	34
Number of re-modified TDRs | contract	5	7
Ending balance | contract	205	225
Roll forward of troubled debt restructurings
Beginning TDR balance:	$ 42,926	$ 51,115
New TDRs	5,450	6,365
Re-modified TDRs	2,099	3,414
Net paydowns	(11,538)	(9,037)
Ending TDR balance:	32,104	42,926
Accruing TDRs	19,819	26,580
Non-accrual TDRs	$ 12,285	$ 16,346
Residential mortgage loans
Number of contract
Number of contracts charged off | contract	1	0
Number of contracts paid off | contract	0	4
Roll forward of troubled debt restructurings
Amount of contracts charged off	$ (77)	$ 0
Amount of contracts paid off	$ 0	$ (151)
Home equity loans
Number of contract
Number of contracts charged off | contract	1	0
Number of contracts paid off | contract	8	7
Roll forward of troubled debt restructurings
Amount of contracts charged off	$ (48)	$ 0
Amount of contracts paid off	$ (62)	$ (534)
Commercial real estate loans
Number of contract
Number of contracts charged off | contract	2	1
Number of contracts paid off | contract	15	12
Roll forward of troubled debt restructurings
Amount of contracts charged off	$ (2,498)	$ (120)
Amount of contracts paid off	$ (1,633)	$ (6,170)
Commercial loans
Number of contract
Number of contracts charged off | contract	6	2
Number of contracts paid off | contract	11	10
Roll forward of troubled debt restructurings
Amount of contracts charged off	$ (259)	$ (142)
Amount of contracts paid off	$ (2,256)	$ (1,814)

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Loans Receivable and Allowance for Loan Losses - Troubled Debt Restructuring (Including Re-Modified TDRs) by Portfolio Segment and by Class of Financing Receivable (Details) $ in Thousands	12 Months Ended
	Dec. 31, 2017 USD ($) contract	Dec. 31, 2016 USD ($) contract	Dec. 31, 2015 USD ($) contract
Financing Receivable, Modifications [Line Items]
Number of contracts | contract	29	41	29
Recorded investment at the time of modification	$ 7,549	$ 9,779	$ 14,923
Current recorded investment	7,118	7,509	14,881
Current allowance	$ 599	$ 1,217	$ 1,245
Troubled debt restructurings that subsequently defaulted:
Number of contracts | contract	3	4
Recorded investment at the time of modification	$ 774	$ 962
Current recorded investment	760	958
Current allowance	$ 69	$ 564
Personal Banking
Financing Receivable, Modifications [Line Items]
Number of contracts | contract	11	14	9
Recorded investment at the time of modification	$ 1,756	$ 1,674	$ 465
Current recorded investment	1,703	1,648	454
Current allowance	$ 198	$ 224	$ 42
Troubled debt restructurings that subsequently defaulted:
Number of contracts | contract	1	0
Recorded investment at the time of modification	$ 336	$ 0
Current recorded investment	334	0
Current allowance	$ 34	$ 0
Personal Banking | Residential mortgage loans
Financing Receivable, Modifications [Line Items]
Number of contracts | contract	8	7	6
Recorded investment at the time of modification	$ 1,604	$ 1,199	$ 364
Current recorded investment	1,555	1,177	357
Current allowance	$ 158	$ 114	$ 21
Troubled debt restructurings that subsequently defaulted:
Number of contracts | contract	1	0
Recorded investment at the time of modification	$ 336	$ 0
Current recorded investment	334	0
Current allowance	$ 34	$ 0
Personal Banking | Home equity loans
Financing Receivable, Modifications [Line Items]
Number of contracts | contract	3	7	3
Recorded investment at the time of modification	$ 152	$ 475	$ 101
Current recorded investment	148	471	97
Current allowance	$ 40	$ 110	$ 21
Troubled debt restructurings that subsequently defaulted:
Number of contracts | contract	0	0
Recorded investment at the time of modification	$ 0	$ 0
Current recorded investment	0	0
Current allowance	$ 0	$ 0
Personal Banking | Commercial real estate loans
Troubled debt restructurings that subsequently defaulted:
Number of contracts | contract	2
Commercial Banking
Financing Receivable, Modifications [Line Items]
Number of contracts | contract	18	27	20
Recorded investment at the time of modification	$ 5,793	$ 8,105	$ 14,458
Current recorded investment	5,415	5,861	14,427
Current allowance	$ 401	$ 993	$ 1,203
Troubled debt restructurings that subsequently defaulted:
Number of contracts | contract	2	4
Recorded investment at the time of modification	$ 438	$ 962
Current recorded investment	426	958
Current allowance	$ 35	$ 564
Commercial Banking | Commercial real estate loans
Financing Receivable, Modifications [Line Items]
Number of contracts | contract	11	7	11
Recorded investment at the time of modification	$ 5,232	$ 3,729	$ 12,258
Current recorded investment	4,889	3,643	12,243
Current allowance	364	$ 485	$ 1,047
Troubled debt restructurings that subsequently defaulted:
Number of contracts | contract		1
Recorded investment at the time of modification	438	$ 429
Current recorded investment	426	425
Current allowance	$ 35	$ 31
Commercial Banking | Commercial loans
Financing Receivable, Modifications [Line Items]
Number of contracts | contract	7	20	9
Recorded investment at the time of modification	$ 561	$ 4,376	$ 2,200
Current recorded investment	526	2,218	2,184
Current allowance	$ 37	$ 508	$ 156
Troubled debt restructurings that subsequently defaulted:
Number of contracts | contract	0	3
Recorded investment at the time of modification	$ 0	$ 533
Current recorded investment	0	533
Current allowance	$ 0	$ 533

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Loans Receivable and Allowance for Loan Losses - Troubled Debt Restructurings by Type of Modification (Details) $ in Thousands	12 Months Ended
	Dec. 31, 2017 USD ($) contract	Dec. 31, 2016 USD ($) contract	Dec. 31, 2015 USD ($) contract
Troubled debt restructurings
Number of contracts | contract	29	41	29
Total	$ 7,118	$ 7,509	$ 14,881
Number of re-modified TDRs | contract	5	7
Total	$ 2,073	$ 2,196
Rate
Troubled debt restructurings
Total	477	478
Total	262	0
Payment
Troubled debt restructurings
Total	2,688	753
Total	0	502
Maturity date
Troubled debt restructurings
Total	2,631	3,932
Total	1,382	1,329
Other
Troubled debt restructurings
Total	1,322	2,346
Total	$ 429	$ 365
Personal Banking
Troubled debt restructurings
Number of contracts | contract	11	14	9
Total	$ 1,703	$ 1,648	$ 454
Number of re-modified TDRs | contract	3	1
Total	$ 691	$ 192
Personal Banking | Rate
Troubled debt restructurings
Total	477	478
Total	262	0
Personal Banking | Payment
Troubled debt restructurings
Total	0	0
Total	0	0
Personal Banking | Maturity date
Troubled debt restructurings
Total	8	774
Total	0	0
Personal Banking | Other
Troubled debt restructurings
Total	1,218	396
Total	$ 429	$ 192
Personal Banking | Residential mortgage loans
Troubled debt restructurings
Number of contracts | contract	8	7	6
Total	$ 1,555	$ 1,177	$ 357
Number of re-modified TDRs | contract	2	0
Total	$ 679	$ 0
Personal Banking | Residential mortgage loans | Rate
Troubled debt restructurings
Total	359	358
Total	250	0
Personal Banking | Residential mortgage loans | Payment
Troubled debt restructurings
Total	0	0
Total	0	0
Personal Banking | Residential mortgage loans | Maturity date
Troubled debt restructurings
Total	8	771
Total	0	0
Personal Banking | Residential mortgage loans | Other
Troubled debt restructurings
Total	1,188	48
Total	$ 429	$ 0
Personal Banking | Home equity loans
Troubled debt restructurings
Number of contracts | contract	3	7	3
Total	$ 148	$ 471	$ 97
Number of re-modified TDRs | contract	1	1
Total	$ 12	$ 192
Personal Banking | Home equity loans | Rate
Troubled debt restructurings
Total	118	120
Total	12	0
Personal Banking | Home equity loans | Payment
Troubled debt restructurings
Total	0	0
Total	0	0
Personal Banking | Home equity loans | Maturity date
Troubled debt restructurings
Total	0	3
Total	0	0
Personal Banking | Home equity loans | Other
Troubled debt restructurings
Total	30	348
Total	$ 0	$ 192
Commercial Banking
Troubled debt restructurings
Number of contracts | contract	18	27	20
Total	$ 5,415	$ 5,861	$ 14,427
Number of re-modified TDRs | contract	2	6
Total	$ 1,382	$ 2,004
Commercial Banking | Rate
Troubled debt restructurings
Total	0	0
Total	0	0
Commercial Banking | Payment
Troubled debt restructurings
Total	2,688	753
Total	0	502
Commercial Banking | Maturity date
Troubled debt restructurings
Total	2,623	3,158
Total	1,382	1,329
Commercial Banking | Other
Troubled debt restructurings
Total	104	1,950
Total	$ 0	$ 173
Commercial Banking | Commercial real estate loans
Troubled debt restructurings
Number of contracts | contract	11	7	11
Total	$ 4,889	$ 3,643	$ 12,243
Number of re-modified TDRs | contract	1	2
Total	$ 1,299	$ 1,502
Commercial Banking | Commercial real estate loans | Rate
Troubled debt restructurings
Total	0	0
Total	0	0
Commercial Banking | Commercial real estate loans | Payment
Troubled debt restructurings
Total	2,688	425
Total	0	0
Commercial Banking | Commercial real estate loans | Maturity date
Troubled debt restructurings
Total	2,201	1,980
Total	1,299	1,329
Commercial Banking | Commercial real estate loans | Other
Troubled debt restructurings
Total	0	1,238
Total	$ 0	$ 173
Commercial Banking | Commercial loans
Troubled debt restructurings
Number of contracts | contract	7	20	9
Total	$ 526	$ 2,218	$ 2,184
Number of re-modified TDRs | contract	1	4
Total	$ 83	$ 502
Commercial Banking | Commercial loans | Rate
Troubled debt restructurings
Total	0	0
Total	0	0
Commercial Banking | Commercial loans | Payment
Troubled debt restructurings
Total	0	328
Total	0	502
Commercial Banking | Commercial loans | Maturity date
Troubled debt restructurings
Total	422	1,178
Total	83	0
Commercial Banking | Commercial loans | Other
Troubled debt restructurings
Total	104	712
Total	$ 0	$ 0

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Loans Receivable and Allowance for Loan Losses - Loan Delinquencies (Details) - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016
Loan payment delinquencies
Total delinquency	$ 117,504	$ 121,594
Current	7,675,905	7,435,753
Total loans	7,793,409	7,557,347
90 days or greater delinquent and accruing	1,412	2,824
Personal Banking
Loan payment delinquencies
Total loans	4,757,947	4,686,497
Personal Banking | Residential mortgage loans
Loan payment delinquencies
Total loans	2,776,203	2,698,166
Personal Banking | Home equity loans
Loan payment delinquencies
Total loans	1,310,355	1,345,370
Personal Banking | Consumer Finance Loans
Loan payment delinquencies
Total loans	18,619	48,981
Personal Banking | Consumer loans
Loan payment delinquencies
Total loans	652,770	593,980
Commercial Banking
Loan payment delinquencies
Total loans	3,035,462	2,870,850
Commercial Banking | Commercial real estate loans
Loan payment delinquencies
Total loans	2,454,726	2,342,089
Commercial Banking | Commercial loans
Loan payment delinquencies
Total loans	580,736	528,761
Originated
Loan payment delinquencies
Total delinquency	98,970	105,990
Current	6,869,363	6,406,081
Total loans	6,968,333	6,512,071
90 days or greater delinquent and accruing	0	0
Originated | Personal Banking
Loan payment delinquencies
Total delinquency	76,209	72,003
Current	4,209,714	4,012,610
Total loans	4,285,923	4,084,613
90 days or greater delinquent and accruing	0	0
Originated | Personal Banking | Residential mortgage loans
Loan payment delinquencies
Total delinquency	42,429	44,810
Current	2,619,951	2,519,845
Total loans	2,662,380	2,564,655
90 days or greater delinquent and accruing	0	0
Originated | Personal Banking | Home equity loans
Loan payment delinquencies
Total delinquency	14,470	11,873
Current	1,037,088	1,031,040
Total loans	1,051,558	1,042,913
90 days or greater delinquent and accruing	0	0
Originated | Personal Banking | Consumer Finance Loans
Loan payment delinquencies
Total delinquency	3,440	2,764
Current	15,179	46,217
Total loans	18,619	48,981
90 days or greater delinquent and accruing	0
Originated | Personal Banking | Consumer loans
Loan payment delinquencies
Total delinquency	15,870	12,556
Current	537,496	415,508
Total loans	553,366	428,064
90 days or greater delinquent and accruing	0	0
Originated | Commercial Banking
Loan payment delinquencies
Total delinquency	22,761	33,987
Current	2,659,649	2,393,471
Total loans	2,682,410	2,427,458
90 days or greater delinquent and accruing	0	0
Originated | Commercial Banking | Commercial real estate loans
Loan payment delinquencies
Total delinquency	18,282	27,856
Current	2,142,930	1,944,227
Total loans	2,161,212	1,972,083
90 days or greater delinquent and accruing	0	0
Originated | Commercial Banking | Commercial loans
Loan payment delinquencies
Total delinquency	4,479	6,131
Current	516,719	449,244
Total loans	521,198	455,375
90 days or greater delinquent and accruing	0	0
Acquired
Loan payment delinquencies
Total delinquency	18,534	15,604
Current	806,542	1,029,672
Total loans	825,076	1,045,276
90 days or greater delinquent and accruing	1,412	2,824
Acquired | Personal Banking
Loan payment delinquencies
Total delinquency	8,711	6,670
Current	463,313	595,214
Total loans	472,024	601,884
90 days or greater delinquent and accruing	489	671
Acquired | Personal Banking | Residential mortgage loans
Loan payment delinquencies
Total delinquency	3,480	2,424
Current	110,343	131,087
Total loans	113,823	133,511
90 days or greater delinquent and accruing	381	452
Acquired | Personal Banking | Home equity loans
Loan payment delinquencies
Total delinquency	3,211	2,251
Current	255,586	300,206
Total loans	258,797	302,457
90 days or greater delinquent and accruing	98	204
Acquired | Personal Banking | Consumer loans
Loan payment delinquencies
Total delinquency	2,020	1,995
Current	97,384	163,921
Total loans	99,404	165,916
90 days or greater delinquent and accruing	10	15
Acquired | Commercial Banking
Loan payment delinquencies
Total delinquency	9,823	8,934
Current	343,229	434,458
Total loans	353,052	443,392
90 days or greater delinquent and accruing	923	2,153
Acquired | Commercial Banking | Commercial real estate loans
Loan payment delinquencies
Total delinquency	8,856	8,286
Current	284,658	361,720
Total loans	293,514	370,006
90 days or greater delinquent and accruing	923	2,006
Acquired | Commercial Banking | Commercial loans
Loan payment delinquencies
Total delinquency	967	648
Current	58,571	72,738
Total loans	59,538	73,386
90 days or greater delinquent and accruing	0	147
30-59 days delinquent
Loan payment delinquencies
Total delinquency	56,465	55,614
30-59 days delinquent | Originated
Loan payment delinquencies
Total delinquency	48,759	49,336
30-59 days delinquent | Originated | Personal Banking
Loan payment delinquencies
Total delinquency	41,770	40,595
30-59 days delinquent | Originated | Personal Banking | Residential mortgage loans
Loan payment delinquencies
Total delinquency	23,786	26,212
30-59 days delinquent | Originated | Personal Banking | Home equity loans
Loan payment delinquencies
Total delinquency	6,094	5,785
30-59 days delinquent | Originated | Personal Banking | Consumer Finance Loans
Loan payment delinquencies
Total delinquency	2,128	1,255
30-59 days delinquent | Originated | Personal Banking | Consumer loans
Loan payment delinquencies
Total delinquency	9,762	7,343
30-59 days delinquent | Originated | Commercial Banking
Loan payment delinquencies
Total delinquency	6,989	8,741
30-59 days delinquent | Originated | Commercial Banking | Commercial real estate loans
Loan payment delinquencies
Total delinquency	5,520	7,674
30-59 days delinquent | Originated | Commercial Banking | Commercial loans
Loan payment delinquencies
Total delinquency	1,469	1,067
30-59 days delinquent | Acquired
Loan payment delinquencies
Total delinquency	7,706	6,278
30-59 days delinquent | Acquired | Personal Banking
Loan payment delinquencies
Total delinquency	4,515	3,464
30-59 days delinquent | Acquired | Personal Banking | Residential mortgage loans
Loan payment delinquencies
Total delinquency	1,998	1,174
30-59 days delinquent | Acquired | Personal Banking | Home equity loans
Loan payment delinquencies
Total delinquency	1,367	1,020
30-59 days delinquent | Acquired | Personal Banking | Consumer loans
Loan payment delinquencies
Total delinquency	1,150	1,270
30-59 days delinquent | Acquired | Commercial Banking
Loan payment delinquencies
Total delinquency	3,191	2,814
30-59 days delinquent | Acquired | Commercial Banking | Commercial real estate loans
Loan payment delinquencies
Total delinquency	2,795	2,703
30-59 days delinquent | Acquired | Commercial Banking | Commercial loans
Loan payment delinquencies
Total delinquency	396	111
60-89 days delinquent
Loan payment delinquencies
Total delinquency	16,550	17,975
60-89 days delinquent | Originated
Loan payment delinquencies
Total delinquency	14,647	15,946
60-89 days delinquent | Originated | Personal Banking
Loan payment delinquencies
Total delinquency	12,310	10,315
60-89 days delinquent | Originated | Personal Banking | Residential mortgage loans
Loan payment delinquencies
Total delinquency	6,030	5,806
60-89 days delinquent | Originated | Personal Banking | Home equity loans
Loan payment delinquencies
Total delinquency	2,333	1,305
60-89 days delinquent | Originated | Personal Banking | Consumer Finance Loans
Loan payment delinquencies
Total delinquency	1,113	766
60-89 days delinquent | Originated | Personal Banking | Consumer loans
Loan payment delinquencies
Total delinquency	2,834	2,438
60-89 days delinquent | Originated | Commercial Banking
Loan payment delinquencies
Total delinquency	2,337	5,631
60-89 days delinquent | Originated | Commercial Banking | Commercial real estate loans
Loan payment delinquencies
Total delinquency	2,133	3,674
60-89 days delinquent | Originated | Commercial Banking | Commercial loans
Loan payment delinquencies
Total delinquency	204	1,957
60-89 days delinquent | Acquired
Loan payment delinquencies
Total delinquency	1,903	2,029
60-89 days delinquent | Acquired | Personal Banking
Loan payment delinquencies
Total delinquency	1,260	1,084
60-89 days delinquent | Acquired | Personal Banking | Residential mortgage loans
Loan payment delinquencies
Total delinquency	205	421
60-89 days delinquent | Acquired | Personal Banking | Home equity loans
Loan payment delinquencies
Total delinquency	538	258
60-89 days delinquent | Acquired | Personal Banking | Consumer loans
Loan payment delinquencies
Total delinquency	517	405
60-89 days delinquent | Acquired | Commercial Banking
Loan payment delinquencies
Total delinquency	643	945
60-89 days delinquent | Acquired | Commercial Banking | Commercial real estate loans
Loan payment delinquencies
Total delinquency	406	821
60-89 days delinquent | Acquired | Commercial Banking | Commercial loans
Loan payment delinquencies
Total delinquency	237	124
90 days or greater delinquent
Loan payment delinquencies
Total delinquency	44,489	48,005
90 days or greater delinquent | Originated
Loan payment delinquencies
Total delinquency	35,564	40,708
90 days or greater delinquent | Originated | Personal Banking
Loan payment delinquencies
Total delinquency	22,129	21,093
90 days or greater delinquent | Originated | Personal Banking | Residential mortgage loans
Loan payment delinquencies
Total delinquency	12,613	12,792
90 days or greater delinquent | Originated | Personal Banking | Home equity loans
Loan payment delinquencies
Total delinquency	6,043	4,783
90 days or greater delinquent | Originated | Personal Banking | Consumer Finance Loans
Loan payment delinquencies
Total delinquency	199	743
90 days or greater delinquent | Originated | Personal Banking | Consumer loans
Loan payment delinquencies
Total delinquency	3,274	2,775
90 days or greater delinquent | Originated | Commercial Banking
Loan payment delinquencies
Total delinquency	13,435	19,615
90 days or greater delinquent | Originated | Commercial Banking | Commercial real estate loans
Loan payment delinquencies
Total delinquency	10,629	16,508
90 days or greater delinquent | Originated | Commercial Banking | Commercial loans
Loan payment delinquencies
Total delinquency	2,806	3,107
90 days or greater delinquent | Acquired
Loan payment delinquencies
Total delinquency	8,925	7,297
90 days or greater delinquent | Acquired | Personal Banking
Loan payment delinquencies
Total delinquency	2,936	2,122
90 days or greater delinquent | Acquired | Personal Banking | Residential mortgage loans
Loan payment delinquencies
Total delinquency	1,277	829
90 days or greater delinquent | Acquired | Personal Banking | Home equity loans
Loan payment delinquencies
Total delinquency	1,306	973
90 days or greater delinquent | Acquired | Personal Banking | Consumer loans
Loan payment delinquencies
Total delinquency	353	320
90 days or greater delinquent | Acquired | Commercial Banking
Loan payment delinquencies
Total delinquency	5,989	5,175
90 days or greater delinquent | Acquired | Commercial Banking | Commercial real estate loans
Loan payment delinquencies
Total delinquency	5,655	4,762
90 days or greater delinquent | Acquired | Commercial Banking | Commercial loans
Loan payment delinquencies
Total delinquency	$ 334	$ 413

XML

Loans Receivable and Allowance for Loan Losses - Credit Quality Indicators (Details) - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016
Credit quality indicators
Total loans	$ 7,793,409	$ 7,557,347
Pass
Credit quality indicators
Total loans	7,452,732	7,278,068
Special mention
Credit quality indicators
Total loans	102,834	60,916
Substandard
Credit quality indicators
Total loans	237,843	218,363
Doubtful
Credit quality indicators
Total loans	0	0
Loss
Credit quality indicators
Total loans	0	0
Special mention or substandard | Minimum
Credit quality indicators
Total loans	1,000
Personal Banking
Credit quality indicators
Total loans	4,757,947	4,686,497
Personal Banking | Residential mortgage loans
Credit quality indicators
Total loans	2,776,203	2,698,166
Personal Banking | Home equity loans
Credit quality indicators
Total loans	1,310,355	1,345,370
Personal Banking | Consumer Finance Loans
Credit quality indicators
Total loans	18,619	48,981
Personal Banking | Consumer loans
Credit quality indicators
Total loans	652,770	593,980
Commercial Banking
Credit quality indicators
Total loans	3,035,462	2,870,850
Commercial Banking | Commercial real estate loans
Credit quality indicators
Total loans	2,454,726	2,342,089
Commercial Banking | Commercial loans
Credit quality indicators
Total loans	580,736	528,761
Originated
Credit quality indicators
Total loans	6,968,333	6,512,071
Originated | Pass
Credit quality indicators
Total loans	6,682,937	6,281,250
Originated | Special mention
Credit quality indicators
Total loans	94,209	51,524
Originated | Substandard
Credit quality indicators
Total loans	191,187	179,297
Originated | Doubtful
Credit quality indicators
Total loans	0	0
Originated | Loss
Credit quality indicators
Total loans	0	0
Originated | Personal Banking
Credit quality indicators
Total loans	4,285,923	4,084,613
Originated | Personal Banking | Pass
Credit quality indicators
Total loans	4,256,410	4,057,836
Originated | Personal Banking | Special mention
Credit quality indicators
Total loans	0	0
Originated | Personal Banking | Substandard
Credit quality indicators
Total loans	29,513	26,777
Originated | Personal Banking | Doubtful
Credit quality indicators
Total loans	0	0
Originated | Personal Banking | Loss
Credit quality indicators
Total loans	0	0
Originated | Personal Banking | Residential mortgage loans
Credit quality indicators
Total loans	2,662,380	2,564,655
Originated | Personal Banking | Residential mortgage loans | Pass
Credit quality indicators
Total loans	2,645,475	2,548,390
Originated | Personal Banking | Residential mortgage loans | Special mention
Credit quality indicators
Total loans	0	0
Originated | Personal Banking | Residential mortgage loans | Substandard
Credit quality indicators
Total loans	16,905	16,265
Originated | Personal Banking | Residential mortgage loans | Doubtful
Credit quality indicators
Total loans	0	0
Originated | Personal Banking | Residential mortgage loans | Loss
Credit quality indicators
Total loans	0	0
Originated | Personal Banking | Home equity loans
Credit quality indicators
Total loans	1,051,558	1,042,913
Originated | Personal Banking | Home equity loans | Pass
Credit quality indicators
Total loans	1,042,965	1,035,496
Originated | Personal Banking | Home equity loans | Special mention
Credit quality indicators
Total loans	0	0
Originated | Personal Banking | Home equity loans | Substandard
Credit quality indicators
Total loans	8,593	7,417
Originated | Personal Banking | Home equity loans | Doubtful
Credit quality indicators
Total loans	0	0
Originated | Personal Banking | Home equity loans | Loss
Credit quality indicators
Total loans	0	0
Originated | Personal Banking | Consumer Finance Loans
Credit quality indicators
Total loans	18,619	48,981
Originated | Personal Banking | Consumer Finance Loans | Pass
Credit quality indicators
Total loans	18,420	48,238
Originated | Personal Banking | Consumer Finance Loans | Special mention
Credit quality indicators
Total loans	0	0
Originated | Personal Banking | Consumer Finance Loans | Substandard
Credit quality indicators
Total loans	199	743
Originated | Personal Banking | Consumer Finance Loans | Doubtful
Credit quality indicators
Total loans	0	0
Originated | Personal Banking | Consumer Finance Loans | Loss
Credit quality indicators
Total loans	0	0
Originated | Personal Banking | Consumer loans
Credit quality indicators
Total loans	553,366	428,064
Originated | Personal Banking | Consumer loans | Pass
Credit quality indicators
Total loans	549,550	425,712
Originated | Personal Banking | Consumer loans | Special mention
Credit quality indicators
Total loans	0	0
Originated | Personal Banking | Consumer loans | Substandard
Credit quality indicators
Total loans	3,816	2,352
Originated | Personal Banking | Consumer loans | Doubtful
Credit quality indicators
Total loans	0	0
Originated | Personal Banking | Consumer loans | Loss
Credit quality indicators
Total loans	0	0
Originated | Commercial Banking
Credit quality indicators
Total loans	2,682,410	2,427,458
Originated | Commercial Banking | Pass
Credit quality indicators
Total loans	2,426,527	2,223,414
Originated | Commercial Banking | Special mention
Credit quality indicators
Total loans	94,209	51,524
Originated | Commercial Banking | Substandard
Credit quality indicators
Total loans	161,674	152,520
Originated | Commercial Banking | Doubtful
Credit quality indicators
Total loans	0	0
Originated | Commercial Banking | Loss
Credit quality indicators
Total loans	0	0
Originated | Commercial Banking | Commercial real estate loans
Credit quality indicators
Total loans	2,161,212	1,972,083
Originated | Commercial Banking | Commercial real estate loans | Pass
Credit quality indicators
Total loans	1,964,565	1,821,548
Originated | Commercial Banking | Commercial real estate loans | Special mention
Credit quality indicators
Total loans	78,699	36,321
Originated | Commercial Banking | Commercial real estate loans | Substandard
Credit quality indicators
Total loans	117,948	114,214
Originated | Commercial Banking | Commercial real estate loans | Doubtful
Credit quality indicators
Total loans	0	0
Originated | Commercial Banking | Commercial real estate loans | Loss
Credit quality indicators
Total loans	0	0
Originated | Commercial Banking | Commercial loans
Credit quality indicators
Total loans	521,198	455,375
Originated | Commercial Banking | Commercial loans | Pass
Credit quality indicators
Total loans	461,962	401,866
Originated | Commercial Banking | Commercial loans | Special mention
Credit quality indicators
Total loans	15,510	15,203
Originated | Commercial Banking | Commercial loans | Substandard
Credit quality indicators
Total loans	43,726	38,306
Originated | Commercial Banking | Commercial loans | Doubtful
Credit quality indicators
Total loans	0	0
Originated | Commercial Banking | Commercial loans | Loss
Credit quality indicators
Total loans	0	0
Acquired
Credit quality indicators
Total loans	825,076	1,045,276
Acquired | Pass
Credit quality indicators
Total loans	769,795	996,818
Acquired | Special mention
Credit quality indicators
Total loans	8,625	9,392
Acquired | Substandard
Credit quality indicators
Total loans	46,656	39,066
Acquired | Doubtful
Credit quality indicators
Total loans	0	0
Acquired | Loss
Credit quality indicators
Total loans	0	0
Acquired | Personal Banking
Credit quality indicators
Total loans	472,024	601,884
Acquired | Personal Banking | Pass
Credit quality indicators
Total loans	468,961	596,911
Acquired | Personal Banking | Special mention
Credit quality indicators
Total loans	0	0
Acquired | Personal Banking | Substandard
Credit quality indicators
Total loans	3,063	4,973
Acquired | Personal Banking | Doubtful
Credit quality indicators
Total loans	0	0
Acquired | Personal Banking | Loss
Credit quality indicators
Total loans	0	0
Acquired | Personal Banking | Residential mortgage loans
Credit quality indicators
Total loans	113,823	133,511
Acquired | Personal Banking | Residential mortgage loans | Pass
Credit quality indicators
Total loans	112,990	131,717
Acquired | Personal Banking | Residential mortgage loans | Special mention
Credit quality indicators
Total loans	0	0
Acquired | Personal Banking | Residential mortgage loans | Substandard
Credit quality indicators
Total loans	833	1,794
Acquired | Personal Banking | Residential mortgage loans | Doubtful
Credit quality indicators
Total loans	0	0
Acquired | Personal Banking | Residential mortgage loans | Loss
Credit quality indicators
Total loans	0	0
Acquired | Personal Banking | Home equity loans
Credit quality indicators
Total loans	258,797	302,457
Acquired | Personal Banking | Home equity loans | Pass
Credit quality indicators
Total loans	257,312	300,100
Acquired | Personal Banking | Home equity loans | Special mention
Credit quality indicators
Total loans	0	0
Acquired | Personal Banking | Home equity loans | Substandard
Credit quality indicators
Total loans	1,485	2,357
Acquired | Personal Banking | Home equity loans | Doubtful
Credit quality indicators
Total loans	0	0
Acquired | Personal Banking | Home equity loans | Loss
Credit quality indicators
Total loans	0	0
Acquired | Personal Banking | Consumer loans
Credit quality indicators
Total loans	99,404	165,916
Acquired | Personal Banking | Consumer loans | Pass
Credit quality indicators
Total loans	98,659	165,094
Acquired | Personal Banking | Consumer loans | Special mention
Credit quality indicators
Total loans	0	0
Acquired | Personal Banking | Consumer loans | Substandard
Credit quality indicators
Total loans	745	822
Acquired | Personal Banking | Consumer loans | Doubtful
Credit quality indicators
Total loans	0	0
Acquired | Personal Banking | Consumer loans | Loss
Credit quality indicators
Total loans	0	0
Acquired | Commercial Banking
Credit quality indicators
Total loans	353,052	443,392
Acquired | Commercial Banking | Pass
Credit quality indicators
Total loans	300,834	399,907
Acquired | Commercial Banking | Special mention
Credit quality indicators
Total loans	8,625	9,392
Acquired | Commercial Banking | Substandard
Credit quality indicators
Total loans	43,593	34,093
Acquired | Commercial Banking | Doubtful
Credit quality indicators
Total loans	0	0
Acquired | Commercial Banking | Loss
Credit quality indicators
Total loans	0	0
Acquired | Commercial Banking | Commercial real estate loans
Credit quality indicators
Total loans	293,514	370,006
Acquired | Commercial Banking | Commercial real estate loans | Pass
Credit quality indicators
Total loans	251,761	331,780
Acquired | Commercial Banking | Commercial real estate loans | Special mention
Credit quality indicators
Total loans	4,838	7,403
Acquired | Commercial Banking | Commercial real estate loans | Substandard
Credit quality indicators
Total loans	36,915	30,823
Acquired | Commercial Banking | Commercial real estate loans | Doubtful
Credit quality indicators
Total loans	0	0
Acquired | Commercial Banking | Commercial real estate loans | Loss
Credit quality indicators
Total loans	0	0
Acquired | Commercial Banking | Commercial loans
Credit quality indicators
Total loans	59,538	73,386
Acquired | Commercial Banking | Commercial loans | Pass
Credit quality indicators
Total loans	49,073	68,127
Acquired | Commercial Banking | Commercial loans | Special mention
Credit quality indicators
Total loans	3,787	1,989
Acquired | Commercial Banking | Commercial loans | Substandard
Credit quality indicators
Total loans	6,678	3,270
Acquired | Commercial Banking | Commercial loans | Doubtful
Credit quality indicators
Total loans	0	0
Acquired | Commercial Banking | Commercial loans | Loss
Credit quality indicators
Total loans	$ 0	$ 0

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Loans Receivable and Allowance for Loan Losses - Off-Balance Sheet Financial Instruments (Details) - USD ($)	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Financial instruments with off-balance-sheet risk
Financial instruments with off-balance-sheet risk	$ 1,079,476,000	$ 977,528,000
Recourse provisions for recovery of amounts from third parties	0	0
Loan commitments
Financial instruments with off-balance-sheet risk
Financial instruments with off-balance-sheet risk	181,058,000	109,032,000
Outstanding loan commitments for fixed rate loans	40,700,000
Outstanding loan commitments for adjustable rate loans	140,400,000
Undisbursed lines of credit
Financial instruments with off-balance-sheet risk
Financial instruments with off-balance-sheet risk	872,700,000	843,457,000
Standby letters of credit
Financial instruments with off-balance-sheet risk
Financial instruments with off-balance-sheet risk	25,718,000	25,039,000
Maximum potential amount of future payments	25,700,000
Maximum potential amount of future payments fully collateralized	17,200,000
Liability recognized for the obligations	$ 169,000	$ 178,000

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Loans Receivable and Allowance for Loan Losses - Mortgage Servicing Assets (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Servicing Asset at Amortized Cost, Gross, Balance [Roll Forward]
Servicing rights, balance	$ 4,239	$ 1,666
Additions	833	3,523
Amortization	(1,549)	(950)
Servicing rights, balance	3,523	4,239
Valuation Allowance for Impairment of Recognized Servicing Assets [Roll Forward]
Valuation allowance, balance	(4)	0
Additions	4	(4)
Valuation allowance, balance	0	(4)
Servicing Asset at Amortized Cost, Balance [Roll Forward]
Net carrying and fair value, balance	4,235	1,666
Additions	837	3,519
Amortization	(1,549)	(950)
Net carrying and fair value, balance	$ 3,523	$ 4,235

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Accrued Interest Receivable (Details) - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016
Interest Receivable and Other Assets [Abstract]
Investment securities	$ 1,260	$ 1,613
Mortgage-backed securities	1,107	910
Loans receivable	20,985	19,176
Accrued interest receivable	$ 23,352	$ 21,699

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Federal Home Loan Bank Stock (Details) - Federal Home Loan Bank of Pittsburgh $ in Thousands	12 Months Ended
	Dec. 31, 2017 USD ($) capital_stock	Dec. 31, 2016 USD ($)
Federal Home Loan Bank, Advances, Branch of FHLB Bank [Line Items]
Number of subclasses of capital stock required to invest in for membership | capital_stock	2
Dividend received on capital stock | $	$ 250	$ 1,400
Subclass B-1
Federal Home Loan Bank, Advances, Branch of FHLB Bank [Line Items]
Investment in capital stock of FHLB, at cost, as a percent of member asset value, as defined by FHLB	0.10%
Subclass B-1 | Minimum
Federal Home Loan Bank, Advances, Branch of FHLB Bank [Line Items]
Investment in capital stock of FHLB, at cost, as a percent of member asset value, as defined by FHLB	0.05%
Subclass B-1 | Maximum
Federal Home Loan Bank, Advances, Branch of FHLB Bank [Line Items]
Investment in capital stock of FHLB, at cost, as a percent of member asset value, as defined by FHLB	1.00%
Subclass B-2
Federal Home Loan Bank, Advances, Branch of FHLB Bank [Line Items]
Investment in capital stock of FHLB, at cost, as a percent of borrowings outstanding	4.00%
Investment in capital stock of FHLB, at cost, as a percent of acquired member assets	4.00%
Investment in capital stock of FHLB, at cost, as a percent of certain letters of credit	0.75%
Investment in capital stock of FHLB, at cost, as a percent of outstanding advance commitments settling more than 30 days after trade	0.00%
Subclass B-2 | Minimum
Federal Home Loan Bank, Advances, Branch of FHLB Bank [Line Items]
Investment in capital stock of FHLB, at cost, as a percent of borrowings outstanding	2.00%
Investment in capital stock of FHLB, at cost, as a percent of acquired member assets	0.00%
Investment in capital stock of FHLB, at cost, as a percent of certain letters of credit	0.00%
Investment in capital stock of FHLB, at cost, as a percent of outstanding advance commitments settling more than 30 days after trade	0.00%
Subclass B-2 | Maximum
Federal Home Loan Bank, Advances, Branch of FHLB Bank [Line Items]
Investment in capital stock of FHLB, at cost, as a percent of borrowings outstanding	6.00%
Investment in capital stock of FHLB, at cost, as a percent of acquired member assets	6.00%
Investment in capital stock of FHLB, at cost, as a percent of certain letters of credit	4.00%
Investment in capital stock of FHLB, at cost, as a percent of outstanding advance commitments settling more than 30 days after trade	6.00%

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Premises and Equipment - By Major Classification (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Premises and Equipment
Total, at cost	$ 316,875	$ 317,641
Less accumulated depreciation and amortization	(164,931)	(156,456)
Premises and equipment, net	151,944	161,185
Depreciation and amortization expense	12,400	13,700	$ 13,300
Land and land improvements
Premises and Equipment
Total, at cost	21,563	21,229
Office buildings and improvements
Premises and Equipment
Total, at cost	150,056	156,162
Furniture, fixtures and equipment
Premises and Equipment
Total, at cost	125,347	120,391
Leasehold improvements
Premises and Equipment
Total, at cost	$ 19,909	$ 19,859

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Premises and Equipment - Minimum Annual Rentals by Fiscal Year (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Minimum annual rentals
2018	$ 4,395
2019	3,300
2020	2,726
2021	2,232
2022	1,620
Thereafter	7,413
Total	21,686
Rental expense	$ 5,600	$ 5,300	$ 4,600

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Goodwill and Other Intangible Assets (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Amortizable intangible assets:
Amortization expense	$ 6,764	$ 4,259	$ 1,688
Estimated amortization expense
For the year ended December 31, 2018	5,848
For the year ending December 31, 2019	4,933
For the year ending December 31, 2020	4,017
For the year ending December 31, 2021	3,188
For the year ending December 31, 2022	2,456
Core Deposits
Amortizable intangible assets:
Intangible asset - gross	63,685	37,953
Acquisitions	0	25,732
Less: accumulated amortization	(40,029)	(34,378)
Intangible asset - net	23,656	29,307
Customer and Contract
Amortizable intangible assets:
Intangible asset - gross	10,474	8,496
Acquisitions	0	1,978
Less: accumulated amortization	(8,461)	(7,348)
Intangible asset - net	$ 2,013	$ 3,126

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Goodwill and Other Intangible Assets - Changes in the Carrying Amount of Goodwill (Details) - USD ($)	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Changes in the carrying amount of goodwill
Balance at the beginning of the period	$ 307,420,000	$ 261,736,000
Goodwill acquired	0	45,684,000
Balance at the end of the period	307,420,000	307,420,000
Goodwill impairment	$ 0	$ 0

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Deposits (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Deposits [Abstract]
Savings deposits	$ 1,653,579	$ 1,622,879
Interest-bearing demand deposits	1,442,928	1,428,317
Noninterest-bearing demand deposits	1,610,409	1,448,972
Money market deposit accounts	1,707,450	1,841,567
Time deposits	1,412,623	1,540,586
Total deposits	7,826,989	7,882,321
Aggregate amount of certificates of deposit with a minimum denomination of $100,000	436,400	451,600
Deposits in accounts exceeding $250,000	1,639,000
Contractual maturity of the certificate accounts
Due within 12 months	666,348	836,525
Due between 12 and 24 months	226,171	311,976
Due between 24 and 36 months	201,654	153,708
Due between 36 and 48 months	131,530	90,777
Due between 48 and 60 months	174,704	134,687
After 60 months	12,216	12,913
Total time deposits	1,412,623	1,540,586
Interest expense incurred on deposits
Savings deposits	3,062	3,218	$ 3,387
Interest-bearing demand deposits	1,027	462	568
Money market deposit accounts	4,203	3,621	3,222
Time deposits	14,765	16,164	16,878
Total interest expense	$ 23,057	$ 23,465	$ 24,055

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Borrowed Funds - Schedule of Borrowed Funds (Details) - Collateralized borrowings, due within one year - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016
Debt Instrument [Line Items]
Due within one year, amount	$ 108,238	$ 142,899
Due within one year, average rate	0.20%	0.17%

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Borrowed Funds - Narrative (Details)			12 Months Ended
	Dec. 15, 2005 USD ($) $ / shares shares	Dec. 05, 2005 USD ($) $ / shares shares	Dec. 31, 2017 USD ($) trust $ / shares shares	Dec. 31, 2016 USD ($)	Dec. 31, 2015 USD ($)
Debt Instrument [Line Items]
Number of statutory business trusts owned | trust			3
Junior subordinated deferrable interest debentures held by trusts that issued guaranteed capital debt securities			$ 111,213,000	$ 111,213,000
FHLB of Pittsburgh
Debt Instrument [Line Items]
Maximum commitment			150,000,000
Collateralized borrowings, due within one year
Debt Instrument [Line Items]
Average amount of agreements outstanding			121,000,000	141,600,000	$ 144,700,000
Due within one year, amount			108,238,000	142,899,000
Maximum amount of outstanding security repurchase agreement			137,200,000	158,400,000	$ 166,400,000
Trust preferred investments
Debt Instrument [Line Items]
Total value of cumulative trust preferred securities issued			107,875,000
Junior subordinated deferrable interest debentures held by trusts that issued guaranteed capital debt securities			$ 111,213,000	111,213,000
Maximum period for which interest payment on the subordinated debentures can be deferred			5 years
Interest deferral			$ 0
Trust preferred investments | Northwest Bancorp Capital Trust III
Debt Instrument [Line Items]
Cumulative trust preferred securities issued (in shares) | shares		50,000
Cumulative trust preferred securities issued, liquidation value per preferred security (in dollars per security) | $ / shares		$ 1,000
Total value of cumulative trust preferred securities issued		$ 50,000,000	$ 50,000,000
Variable rate basis		three-month LIBOR
Spread on variable rate basis (as a percent)		1.38%	1.38%
Effective interest rate (as a percent)			3.07%
Junior subordinated deferrable interest debentures held by trusts that issued guaranteed capital debt securities			$ 51,547,000	51,547,000
Trust preferred investments | Northwest Bancorp Statutory Trust IV
Debt Instrument [Line Items]
Cumulative trust preferred securities issued (in shares) | shares	50,000
Cumulative trust preferred securities issued, liquidation value per preferred security (in dollars per security) | $ / shares	$ 1,000
Total value of cumulative trust preferred securities issued	$ 50,000,000		$ 50,000,000
Variable rate basis			three-month LIBOR
Spread on variable rate basis (as a percent)	1.38%		1.38%
Effective interest rate (as a percent)			2.97%
Junior subordinated deferrable interest debentures held by trusts that issued guaranteed capital debt securities			$ 51,547,000	51,547,000
Trust preferred investments | LNB Trust II
Debt Instrument [Line Items]
Total value of cumulative trust preferred securities issued			$ 7,875,000
Effective interest rate (as a percent)			3.07%
Junior subordinated deferrable interest debentures held by trusts that issued guaranteed capital debt securities			$ 8,119,000	$ 8,119,000
Cumulative Preferred Stock | Trust preferred investments | LNB Trust II
Debt Instrument [Line Items]
Securities outstanding (in shares) | shares			7,875
Liquidation value per preferred security (in dollars per security) | $ / shares			$ 1,000
Securities outstanding, liquidation value			$ 7,875,000
LIBOR | Trust preferred investments | LNB Trust II
Debt Instrument [Line Items]
Spread on variable rate basis (as a percent)			1.48%

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Borrowed Funds - Schedule of Capital Debt Securities (Details) - USD ($)	Dec. 31, 2017	Dec. 31, 2016	Dec. 15, 2005	Dec. 05, 2005
Debt Instrument [Line Items]
Junior subordinated debentures	$ 111,213,000	$ 111,213,000
Trust preferred investments
Debt Instrument [Line Items]
Junior subordinated debentures	111,213,000	111,213,000
Total value of cumulative trust preferred securities issued	107,875,000
Trust preferred investments | Northwest Bancorp Capital Trust III
Debt Instrument [Line Items]
Junior subordinated debentures	51,547,000	51,547,000
Total value of cumulative trust preferred securities issued	50,000,000			$ 50,000,000
Trust preferred investments | Northwest Bancorp Statutory Trust IV
Debt Instrument [Line Items]
Junior subordinated debentures	51,547,000	51,547,000
Total value of cumulative trust preferred securities issued	50,000,000		$ 50,000,000
Trust preferred investments | LNB Trust II
Debt Instrument [Line Items]
Junior subordinated debentures	8,119,000	$ 8,119,000
Total value of cumulative trust preferred securities issued	$ 7,875,000

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Income Taxes (Details) - USD ($) $ in Thousands	3 Months Ended												12 Months Ended
	Dec. 31, 2017	Sep. 30, 2017	Jun. 30, 2017	Mar. 31, 2017	Dec. 31, 2016	Sep. 30, 2016	Jun. 30, 2016	Mar. 31, 2016	Dec. 31, 2015	Sep. 30, 2015	Jun. 30, 2015	Mar. 31, 2015	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Allocation of total income tax
Income before income taxes	$ 6,576	$ 12,414	$ 14,402	$ 8,052	$ 12,361	$ 4,697	$ (3,491)	$ 8,081	$ 8,684	$ 5,238	$ 7,213	$ 6,825	$ 41,444	$ 21,648	$ 27,960
Shareholders’ equity for unrealized (loss)/ gain on securities available-for-sale													(3,403)	(1,871)	(85)
Shareholders’ equity for tax benefit for excess of fair value above cost of stock benefit plans													0	(1,425)	(332)
Shareholders’ equity for pension adjustment													(213)	(2,455)	(848)
Shareholders’ equity for swap fair value adjustment													585	539	699
Unallocated income tax													38,413	16,436	27,394
Income tax expense applicable to income before taxes
Current													30,127	18,914	21,670
Deferred													11,317	2,734	6,290
Total provision for income taxes	6,576	$ 12,414	$ 14,402	$ 8,052	12,361	$ 4,697	$ (3,491)	$ 8,081	$ 8,684	$ 5,238	$ 7,213	$ 6,825	$ 41,444	$ 21,648	$ 27,960
Reconciliation of the expected federal statutory income tax rate to the effective rate
Expected tax rate (as a percent)													35.00%	35.00%	35.00%
Tax-exempt interest income (as a percent)													(1.50%)	(3.30%)	(3.00%)
State income tax, net of federal benefit (as a percent)													3.20%	1.20%	2.90%
Bank-owned life insurance (as a percent)													(1.60%)	(2.60%)	(1.70%)
Stock-based compensation (as a percent)													(0.90%)	(0.00%)	(0.00%)
Dividends on stock plans (as a percent)													(1.10%)	(2.00%)	(0.80%)
Low income housing and historic tax credits (as a percent)													(0.50%)	(1.00%)	(1.40%)
Non-deductible acquisition expense (as a percent)													0.00%	0.00%	0.50%
ESOP termination (as a percent)													0.00%	3.40%	0.00%
Adjustment to net deferred tax liabilities for enacted changes in tax laws and rates (as a percent)													(2.30%)	0.00%	0.00%
Other (as a percent)													0.20%	(0.30%)	0.10%
Effective tax rate (as a percent)													30.50%	30.40%	31.60%
Deferred tax assets:
Deferred rent	87				187								$ 87	$ 187
Deferred compensation expense	1,040				2,893								1,040	2,893
Bad debts	10,277				18,823								10,277	18,823
Other reserves	953				1,823								953	1,823
Accrued postretirement benefit cost	413				641								413	641
Stock benefit plans	744				1,085								744	1,085
Writedown of investment securities	104				2,875								104	2,875
Accrued expenses	35				95								35	95
Pension and postretirement benefits	13,033				18,491								13,033	18,491
Unrealized loss on the fair value of derivatives	223				958								223	958
Unrealized loss on the fair value of securities available-for-sale	2,160				0								2,160	0
Purchase accounting	0				1,215								0	1,215
Deferred income	1,001				253								1,001	253
Other	141				153								141	153
Total deferred tax assets	30,211				49,492								30,211	49,492
Deferred tax liabilities:
Pension expense	5,542				8,689								5,542	8,689
Unrealized gain on the fair value of securities available-for-sale	0				252								0	252
Purchase accounting	303				0								303	0
Intangible assets	13,546				21,927								13,546	21,927
Mortgage servicing rights	777				1,559								777	1,559
Fixed assets	4,940				8,107								4,940	8,107
Net deferred loan fees	4,690				0								4,690	0
Other	274				635								274	635
Total deferred tax liabilities	30,072				41,169								30,072	41,169
Net deferred tax asset	$ 139				$ 8,323								$ 139	$ 8,323

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Income Taxes - Narrative (Details)	12 Months Ended
	Dec. 31, 2017 USD ($)
Income Tax Disclosure [Abstract]
Valuation allowance for deferred tax assets	$ 0
Operating loss carryforwards
Unrecognized tax benefits that would impact effective tax rate if recognized	0
Accrued interest on income taxes expense	0
Accrued amount of payment of interest or penalties	0
Income tax benefit, due to tax reform	3,100,000
State and Local Jurisdiction
Operating loss carryforwards
Income tax examination, additional tax liability	444,000
Domestic Tax Authority | LNB
Operating loss carryforwards
Income tax examination, additional tax liability	$ 0

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Shareholders' Equity (Details) - USD ($) $ in Millions	Dec. 31, 2017	Dec. 31, 2016
Stockholders' Equity Note [Abstract]
Bad debt deductions for which no deferred income taxes have been provided	$ 39.1	$ 39.1

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Earnings Per Share - Narrative (Details) - $ / shares	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Antidilutive securities excluded from the calculation of earnings per share
Options excluded from the calculation of earnings per share (in shares)			524,250
Stock options
Antidilutive securities excluded from the calculation of earnings per share
Average share price during the reporting period (in dollars per share)	$ 16.64	$ 14.79	$ 12.64
Weighted average share price during the reporting period (in dollars per share)			$ 13.15

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Earnings Per Share - Computation of Basic and Diluted Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended												12 Months Ended
	Dec. 31, 2017	Sep. 30, 2017	Jun. 30, 2017	Mar. 31, 2017	Dec. 31, 2016	Sep. 30, 2016	Jun. 30, 2016	Mar. 31, 2016	Dec. 31, 2015	Sep. 30, 2015	Jun. 30, 2015	Mar. 31, 2015	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Earnings Per Share [Abstract]
Net income available to common shareholders	$ 22,148	$ 23,591	$ 30,982	$ 17,746	$ 24,494	$ 14,197	$ (7,008)	$ 17,984	$ 16,193	$ 12,872	$ 15,305	$ 16,170	$ 94,467	$ 49,667	$ 60,540
Weighted average common shares outstanding													101,015,083	99,439,174	94,314,420
Dilutive potential shares due to effect of stock options													1,549,822	1,225,514	515,369
Total weighted average common shares and dilutive potential shares													102,564,905	100,664,688	94,829,789
Basic earnings per share (in dollars per share)	$ 0.22	$ 0.23	$ 0.31	$ 0.18	$ 0.24	$ 0.14	$ (0.07)	$ 0.18	$ 0.16	$ 0.14	$ 0.17	$ 0.18	$ 0.94	$ 0.50	$ 0.64
Diluted earnings per share (in dollars per share)	$ 0.22	$ 0.23	$ 0.30	$ 0.17	$ 0.24	$ 0.14	$ (0.07)	$ 0.18	$ 0.16	$ 0.13	$ 0.17	$ 0.18	$ 0.92	$ 0.49	$ 0.64

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Employee Benefit Plans - Pension Plans, Narrative (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Employee benefit plans
Employer matching contribution	100.00%
Employee matching contribution	4.00%
Total expense for all retirement plans	$ 6.8	$ 5.8	$ 4.6
Pension Plans
Employee benefit plans
Estimated net loss that will be amortized from accumulated other comprehensive income into net periodic cost over the next year	3.3
Prior service credit that will be amortized from accumulated other comprehensive income into net periodic cost over the next year	(2.3)
Accumulated benefit obligation for funded defined benefit pension plan	186.9	165.9	155.9
Accumulated benefit obligation for unfunded defined benefit pension plan	$ 6.2	$ 6.3	$ 6.3
Target allocation of any one stock, maximum (as a percent)	10.00%
Maximum average maturity of bond portfolio	10 years
2018	$ 5.9
2019	6.4
2020	6.6
2021	7.0
2022	7.5
2023 to 2027	42.6
Pension Plans | Minimum
Employee benefit plans
Contributions to defined benefit pension plan	4.0
Pension Plans | Maximum
Employee benefit plans
Contributions to defined benefit pension plan	$ 6.0
Pension Plans | Equity securities | Minimum
Employee benefit plans
Target allocation percentage	.3
Pension Plans | Equity securities | Maximum
Employee benefit plans
Target allocation percentage	0.6
Pension Plans | Debt securities | Minimum
Employee benefit plans
Target allocation percentage	.2
Pension Plans | Debt securities | Maximum
Employee benefit plans
Target allocation percentage	.5

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Employee Benefit Plans - Pension Plans - Components of Net Periodic Pension Cost and Other Amounts Recognized In OCI (Details) - Pension Plans - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Components of net periodic pension cost
Service cost	$ 6,149	$ 5,496	$ 5,721
Interest cost	6,879	6,781	6,125
Expected return on plan assets	(10,512)	(9,897)	(10,371)
Net amortization and deferral	1,388	1,388	1,375
Net periodic pension cost	3,904	3,768	2,850
Changes in the defined benefit pension plans’ plan assets and benefit obligations recognized in other comprehensive income
Net loss/ (gain)	(1,647)	1,550	(420)
Prior service cost/ (credit)	0	0	0
Amortization of prior service cost	2,323	2,323	2,323
Total recognized in other comprehensive income	676	3,873	1,903
Total recognized in net periodic benefit cost and other comprehensive income	$ 4,580	$ 7,641	$ 4,753

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Employee Benefit Plans - Defined Benefit Pension Plans' Funded Status (Details) - Pension Plans - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Change in benefit obligation:
Benefit obligation at beginning of year	$ 172,208	$ 162,133
Service cost	6,149	5,496	$ 5,721
Interest cost	6,879	6,781	6,125
Acquisition	0	0
Actuarial (gain)/ loss	14,807	4,267
Benefits paid	(6,901)	(6,469)
Benefit obligation at end of year	193,142	172,208	162,133
Change in plan assets:
Fair value of plan assets at beginning of year	152,625	143,655
Actual return on plan assets	23,255	8,903
Employer contributions	4,689	6,536
Acquisition	0	0
Benefits paid	(6,901)	(6,469)
Fair value of plan assets at end of period	173,668	152,625	$ 143,655
Funded status at end of year	$ (19,474)	$ (19,583)
Assumptions used to develop the net periodic pension cost
Discount rate	4.06%	4.25%	3.89%
Expected long-term rate of return on assets	7.00%	7.00%	7.50%
Rate of increase in compensation levels	3.00%	3.00%	3.00%
Assumptions used to determine benefit obligations
Discount rate	3.53%	4.06%	4.25%
Expected long-term rate of return on assets	7.00%	7.00%	7.00%
Rate of increase in compensation levels	3.00%	3.00%	3.00%

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Employee Benefit Plans - Defined Benefit Plans Certain Information and Weighted Average Asset Allocation (Details) - Pension Plans - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Employee benefit plans
Projected benefit obligation	$ 193,142	$ 172,208	$ 162,133
Accumulated benefit obligation	193,142	172,208
Fair value of plan assets	$ 173,668	$ 152,625	$ 143,655
Weighted average asset allocation of defined benefit plans
Total (as a percent)	100.00%	100.00%
Debt securities
Weighted average asset allocation of defined benefit plans
Total (as a percent)	23.00%	23.00%
Equity securities
Weighted average asset allocation of defined benefit plans
Total (as a percent)	73.00%	72.00%
Other
Weighted average asset allocation of defined benefit plans
Total (as a percent)	4.00%	5.00%
Minimum | Debt securities
Weighted average asset allocation of defined benefit plans
Target allocation, (as a percent)	20.00%	20.00%
Minimum | Equity securities
Weighted average asset allocation of defined benefit plans
Target allocation, (as a percent)	30.00%	30.00%
Minimum | Other
Weighted average asset allocation of defined benefit plans
Target allocation, (as a percent)	5.00%	5.00%
Maximum | Debt securities
Weighted average asset allocation of defined benefit plans
Target allocation, (as a percent)	50.00%	50.00%
Maximum | Equity securities
Weighted average asset allocation of defined benefit plans
Target allocation, (as a percent)	60.00%	60.00%
Maximum | Other
Weighted average asset allocation of defined benefit plans
Target allocation, (as a percent)	50.00%	50.00%

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Employee Benefit Plans - Pension Plan Assets (Details) - Pension Plans - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Employee benefit plans
Fair value of plan assets	$ 173,668	$ 152,625	$ 143,655
Level 1 | Mutual funds - debt
Employee benefit plans
Fair value of plan assets	40,010	35,224
Level 1 | Mutual funds - equity
Employee benefit plans
Fair value of plan assets	125,871	110,078
Level 1 | Cash and cash equivalents
Employee benefit plans
Fair value of plan assets	$ 7,787	$ 7,322

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Employee Benefit Plans - Postretirement Healthcare Plan, Narrative (Details) - Postretirement Healthcare Plan $ in Thousands	12 Months Ended
	Dec. 31, 2017 USD ($)
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items]
Requisite service age, minimum	55 years
Estimated net loss that will be amortized from accumulated other comprehensive income into net periodic cost over the next year	$ 98
Effect of one percentage point increase on healthcare cost (as a percent)	5.00%
Effect of 1-percent increase in assumed health care cost trend rates on interest cost in current period	$ 8
Effect of 1-percent increase in assumed health care cost trend rates on postretirement benefit obligation	$ 58

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Employee Benefit Plans - Postretirement Healthcare Plan - Components of Net Periodic Benefit Cost and Other Amounts Recognized in OCI (Details) - Postretirement Healthcare Plan - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items]
Service cost	$ 0	$ 0	$ 0
Interest cost	68	70	58
Net amortization and deferral	108	90	60
Net periodic pension cost	176	160	118
Net loss/ (gain)	(156)	109	273
Total recognized in other comprehensive income	(156)	109	273
Total recognized in net periodic benefit cost and other comprehensive income	$ 20	$ 269	$ 391

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Employee Benefit Plans - Postretirement Healthcare Plan - Funded Status (Details) - Postretirement Healthcare Plan - USD ($)	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2017	Dec. 31, 2016
Change in benefit obligation:
Benefit obligation at beginning of year	$ 1,779,000	$ 1,737,000
Service cost	0	0	$ 0
Interest cost	68,000	70,000	58,000
Actuarial (gain)/ loss	(48,000)	200,000
Benefits paid	(162,000)	(228,000)
Benefit obligation at end of year	1,637,000	1,779,000	1,737,000
Change in plan assets:
Fair value of plan assets at beginning of year	0	0
Employer contributions	162,000	228,000
Benefits paid	(162,000)	(228,000)
Fair value of plan assets at end of period	$ 0	$ 0	$ 0
Funded status at end of year				$ (1,637,000)	$ (1,779,000)
Defined Benefit Plan, Assumptions Used in Calculations [Abstract]
Discount rate	4.06%	4.25%	3.89%
Monthly cost of healthcare insurance per beneficiary	$ 548	$ 539	$ 470
Annual rate of increase in healthcare costs	4.00%	4.00%	4.00%
Defined Benefit Plan, Pension Plan with Accumulated Benefit Obligation in Excess of Plan Assets [Abstract]
Projected benefit obligation	$ 1,779,000	$ 1,737,000	$ 1,737,000	1,637,000	1,779,000
Accumulated benefit obligation				1,637,000	1,779,000
Fair value of plan assets	$ 0	$ 0	$ 0	$ 0	$ 0

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Employee Benefit Plans - Employee Stock Ownership Plan, Narrative (Details) - USD ($)	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Employee Stock Ownership Plan
Employee Stock Ownership Plan (ESOP) Disclosures [Line Items]
Compensation expense	$ 0	$ 6,300,000	$ 335,000

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Employee Benefit Plans - Common Stock Awards, Narrative (Details) - Restricted common shares - USD ($) $ / shares in Units, $ in Millions				12 Months Ended
	May 17, 2017	May 18, 2016	May 20, 2015	Dec. 31, 2017	Apr. 20, 2011
Stock Related Compensation
Weighted average grant date fair value of shares issued (in dollars per share)	$ 15.24	$ 14.51	$ 12.31
Market value of shares issued	$ 5.8	$ 4.9	$ 3.8
Number of shares forfeited				105,600
Vesting period				10 years
2011 Equity Incentive Plan
Stock Related Compensation
Number of shares authorized					2,806,233
Number of shares forfeited				415,154
Employees
Stock Related Compensation
Number of shares awarded	378,050	310,160	282,050	353,750
Director
Stock Related Compensation
Number of shares awarded	24,300	24,300	24,300	24,300
2015 issuance
Stock Related Compensation
Percentage of granted awards which will vest				30.00%
2016 issuance
Stock Related Compensation
Percentage of granted awards which will vest				20.00%
2017 issuance
Stock Related Compensation
Percentage of granted awards which will vest				10.00%

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Employee Benefit Plans - Stock Option Plans, Narrative (Details) - Stock options - USD ($) $ / shares in Units, $ in Millions				12 Months Ended
	May 17, 2017	May 18, 2016	May 20, 2015	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Outstanding and exercisable options
Granted (in shares)				819,010	725,400	665,370
Weighted average fair value of options at grant date (in dollars per share)			$ 12.37	$ 1.55	$ 1.52	$ 1.14
Granted (in dollars per share)	$ 15.57	$ 14.15		$ 15.57	$ 14.15	$ 12.37
Vesting period				10 years
Exercise period				10 years
Total intrinsic value of options exercised				$ 3.5	$ 5.1	$ 1.2
Aggregate intrinsic value of all options expected to vest				8.6
Aggregate intrinsic value of all options fully vested				$ 14.3
2011 Equity Incentive Plan
Outstanding and exercisable options
Number of shares authorized				7,015,583
Employees
Outstanding and exercisable options
Granted (in shares)	754,210	660,600	660,570	754,210
Director
Outstanding and exercisable options
Granted (in shares)	64,800	64,800	64,800	64,800

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Employee Benefit Plans - Share-Based Awards (Details) - Stock options - $ / shares			12 Months Ended
	May 17, 2017	May 18, 2016	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Number
Balance at beginning of year (in shares)			5,804,105	6,306,496	6,402,407
Granted (in shares)			819,010	725,400	665,370
Exercised (in shares)			(630,591)	(1,081,072)	(474,253)
Forfeited/ expired (in shares)			(296,954)	(146,719)	(287,028)
Balance at end of year (in shares)			5,695,570	5,804,105	6,306,496
Exercisable at end of year (in shares)			3,016,367	3,035,718	3,431,113
Weighted average exercise price
Balance at beginning of year (in dollars per share)			$ 12.25	$ 11.81	$ 11.65
Granted (in dollars per share)	$ 15.57	$ 14.15	15.57	14.15	12.37
Exercised (in dollars per share)			11.66	11.01	10.27
Forfeited (in dollars per share)			12.43	12.71	12.26
Balance at end of year (in dollars per share)			12.75	12.25	11.81
Exercisable at end of year (in dollars per share)			$ 11.99	$ 11.71	$ 11.42

XML

Employee Benefit Plans - Number of Options Outstanding and Exercisable and Weighted Average Remaining Life of All Option Grants (Details) - $ / shares	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Exercise price $7.48
Options outstanding:
Number of options (in shares)	164,289
Weighted average remaining contract life (years)	1 year 3 months
Options exercisable:
Number of options (in shares)	164,289
Weighted average remaining term - vested (years)	1 year 3 months
Exercise price $9.79
Options outstanding:
Number of options (in shares)	143,224
Weighted average remaining contract life (years)	1 year
Options exercisable:
Number of options (in shares)	143,224
Weighted average remaining term - vested (years)	1 year
Exercise price $11.12
Options outstanding:
Number of options (in shares)	48,027
Weighted average remaining contract life (years)	3 months
Options exercisable:
Number of options (in shares)	48,027
Weighted average remaining term - vested (years)	3 months
Exercise price $11.49
Options outstanding:
Number of options (in shares)	260,456
Weighted average remaining contract life (years)	2 years 3 months
Options exercisable:
Number of options (in shares)	260,456
Weighted average remaining term - vested (years)	2 years 3 months
Exercise price $11.70
Options outstanding:
Number of options (in shares)	384,380
Weighted average remaining contract life (years)	4 years 6 months
Options exercisable:
Number of options (in shares)	237,916
Weighted average remaining term - vested (years)	4 years 6 months
Exercise price $12.12
Options outstanding:
Number of options (in shares)	342,789
Weighted average remaining contract life (years)	3 years 3 months
Options exercisable:
Number of options (in shares)	299,253
Weighted average remaining term - vested (years)	3 years 3 months
Exercise price $12.17
Options outstanding:
Number of options (in shares)	14,500
Weighted average remaining contract life (years)	3 years 6 months
Options exercisable:
Number of options (in shares)	13,000
Weighted average remaining term - vested (years)	3 years 6 months
Exercise price $12.32
Options outstanding:
Number of options (in shares)	1,537,329
Weighted average remaining contract life (years)	3 years 6 months
Options exercisable:
Number of options (in shares)	1,079,159
Weighted average remaining term - vested (years)	3 years 6 months
Exercise price $12.37
Options outstanding:
Number of options (in shares)	522,750
Weighted average remaining contract life (years)	7 years 6 months
Options exercisable:
Number of options (in shares)	163,646
Weighted average remaining term - vested (years)	7 years 6 months
Exercise price $12.44
Options outstanding:
Number of options (in shares)	427,090
Weighted average remaining contract life (years)	5 years 6 months
Options exercisable:
Number of options (in shares)	226,292
Weighted average remaining term - vested (years)	5 years 6 months
Exercise price $13.15
Options outstanding:
Number of options (in shares)	440,653
Weighted average remaining contract life (years)	6 years 6 months
Options exercisable:
Number of options (in shares)	178,091
Weighted average remaining term - vested (years)	6 years 6 months
Exercise price $14.15
Options outstanding:
Number of options (in shares)	643,998
Weighted average remaining contract life (years)	8 years 6 months
Options exercisable:
Number of options (in shares)	126,374
Weighted average remaining term - vested (years)	8 years 6 months
Exercise price $15.57
Options outstanding:
Number of options (in shares)	766,085
Weighted average remaining contract life (years)	9 years 6 months
Options exercisable:
Number of options (in shares)	76,640
Weighted average remaining term - vested (years)	9 years 6 months
Total $12.75
Options outstanding:
Number of options (in shares)	5,695,570
Weighted average remaining contract life (years)	5 years 5 months 16 days
Options exercisable:
Number of options (in shares)	3,016,367
Weighted average remaining term - vested (years)	4 years 15 days
Stock options | Exercise price $7.48
Outstanding and exercisable options
Exercise price (in dollars per share)	$ 7.48
Stock options | Exercise price $9.79
Outstanding and exercisable options
Exercise price (in dollars per share)	9.79
Stock options | Exercise price $11.12
Outstanding and exercisable options
Exercise price (in dollars per share)	11.12
Stock options | Exercise price $11.49
Outstanding and exercisable options
Exercise price (in dollars per share)	11.49
Stock options | Exercise price $11.70
Outstanding and exercisable options
Exercise price (in dollars per share)	11.70
Stock options | Exercise price $12.12
Outstanding and exercisable options
Exercise price (in dollars per share)	12.12
Stock options | Exercise price $12.17
Outstanding and exercisable options
Exercise price (in dollars per share)	$ 12.17
Stock options | Exercise price $12.32
Outstanding and exercisable options
Exercise price (in dollars per share)		$ 12.32
Stock options | Exercise price $12.37
Outstanding and exercisable options
Exercise price (in dollars per share)		12.37
Stock options | Exercise price $12.44
Outstanding and exercisable options
Exercise price (in dollars per share)		12.44
Stock options | Exercise price $13.15
Outstanding and exercisable options
Exercise price (in dollars per share)		13.15
Stock options | Exercise price $14.15
Outstanding and exercisable options
Exercise price (in dollars per share)		14.15
Stock options | Exercise price $15.57
Outstanding and exercisable options
Exercise price (in dollars per share)		15.57
Stock options | Total $12.75
Outstanding and exercisable options
Exercise price (in dollars per share)		$ 12.75

XML

Disclosures About Fair Value of Financial Instruments - Carrying Amount and Estimated Fair Value of Financial Instruments (Details) - USD ($)	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Fair Value Disclosures [Abstract]
Significant unrealized appreciation or depreciation in financial instruments	$ 0	$ 0
Financial assets:
Securities available-for-sale	792,535,000	826,200,000
Securities held-to-maturity	29,667,000	20,426,000
Accrued interest receivable	23,352,000	21,699,000
Derivative asset	214,000	238,000
Financial liabilities:
Borrowed funds	108,238,000	142,899,000
Junior subordinated debentures	111,213,000	111,213,000
Cash flow hedges - interest rate swaps	1,339,000	2,974,000
Assets transferred between Level 1 and Level 2	0	0
Level 1
Financial assets:
Cash and cash equivalents	77,710,000	389,867,000
Securities available-for-sale	574,000	4,440,000
Securities held-to-maturity	0	0
Loans receivable, net	3,128,000	9,625,000
Accrued interest receivable	23,352,000	21,699,000
Derivative asset	0	0
FHLB Stock	0	0
Total assets	104,764,000	425,631,000
Financial liabilities:
Savings and checking accounts	6,414,366,000	6,341,735,000
Time deposits	0	0
Borrowed funds	108,238,000	142,899,000
Junior subordinated debentures	0	0
Cash flow hedges - interest rate swaps		0
Accrued interest payable	460,000	643,000
Total financial liabilities	6,523,064,000	6,485,277,000
Level 2
Financial assets:
Cash and cash equivalents	0	0
Securities available-for-sale	791,961,000	812,394,000
Securities held-to-maturity	29,667,000	20,426,000
Loans receivable, net	0	0
Accrued interest receivable	0	0
Derivative asset	214,000	238,000
FHLB Stock	0	0
Total assets	821,842,000	833,058,000
Financial liabilities:
Savings and checking accounts	0	0
Time deposits	0	0
Borrowed funds	0	0
Junior subordinated debentures	0	0
Cash flow hedges - interest rate swaps		2,974,000
Accrued interest payable	0	0
Total financial liabilities	1,339,000	2,974,000
Level 3
Financial assets:
Cash and cash equivalents	0	0
Securities available-for-sale	0	9,366,000
Securities held-to-maturity	0	0
Loans receivable, net	7,759,434,000	7,869,190,000
Accrued interest receivable	0	0
Derivative asset	0	0
FHLB Stock	0	0
Total assets	7,759,434,000	7,878,556,000
Financial liabilities:
Savings and checking accounts	0	0
Time deposits	1,433,380,000	1,626,434,000
Borrowed funds	0	0
Junior subordinated debentures	110,954,000	113,313,000
Cash flow hedges - interest rate swaps		0
Accrued interest payable	0	0
Total financial liabilities	1,544,334,000	1,739,747,000
Carrying amount
Financial assets:
Cash and cash equivalents	77,710,000	389,867,000
Securities available-for-sale	792,535,000	826,200,000
Securities held-to-maturity	29,678,000	19,978,000
Loans receivable, net	7,736,614,000	7,496,408,000
Accrued interest receivable	23,352,000	21,699,000
Derivative asset	214,000	238,000
FHLB Stock	11,733,000	7,390,000
Total assets	8,671,836,000	8,761,780,000
Financial liabilities:
Savings and checking accounts	6,414,366,000	6,341,735,000
Time deposits	1,412,623,000	1,540,586,000
Borrowed funds	108,238,000	142,899,000
Junior subordinated debentures	111,213,000	111,213,000
Cash flow hedges - interest rate swaps		2,974,000
Accrued interest payable	460,000	643,000
Total financial liabilities	8,048,239,000	8,140,050,000
Estimated fair value
Financial assets:
Cash and cash equivalents	77,710,000	389,867,000
Securities available-for-sale	792,535,000	826,200,000
Securities held-to-maturity	29,667,000	20,426,000
Loans receivable, net	7,762,562,000	7,878,815,000
Accrued interest receivable	23,352,000	21,699,000
Derivative asset	214,000	238,000
FHLB Stock	11,733,000	7,390,000
Total assets	8,697,773,000	9,144,635,000
Financial liabilities:
Savings and checking accounts	6,414,366,000	6,341,735,000
Time deposits	1,433,380,000	1,626,434,000
Borrowed funds	108,238,000	142,899,000
Junior subordinated debentures	110,954,000	113,313,000
Cash flow hedges - interest rate swaps		2,974,000
Accrued interest payable	460,000	643,000
Total financial liabilities	8,068,737,000	$ 8,227,998,000
Interest rate swaps | Level 1
Financial liabilities:
Cash flow hedges - interest rate swaps	0
Interest rate swaps | Level 2
Financial liabilities:
Cash flow hedges - interest rate swaps	1,278,000
Interest rate swaps | Level 3
Financial liabilities:
Cash flow hedges - interest rate swaps	0
Interest rate swaps | Carrying amount
Financial liabilities:
Cash flow hedges - interest rate swaps	1,278,000
Interest rate swaps | Estimated fair value
Financial liabilities:
Cash flow hedges - interest rate swaps	1,278,000
Foreign exchange swaps | Level 1
Financial liabilities:
Cash flow hedges - interest rate swaps	0
Foreign exchange swaps | Level 2
Financial liabilities:
Cash flow hedges - interest rate swaps	61,000
Foreign exchange swaps | Level 3
Financial liabilities:
Cash flow hedges - interest rate swaps	0
Foreign exchange swaps | Carrying amount
Financial liabilities:
Cash flow hedges - interest rate swaps	61,000
Foreign exchange swaps | Estimated fair value
Financial liabilities:
Cash flow hedges - interest rate swaps	$ 61,000

XML

Disclosures About Fair Value of Financial Instruments - Assets and Liabilities Measured at Fair Value on a Recurring Basis (Details) - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016
Assets and liabilities measured at fair value on a recurring basis
Securities available-for-sale	$ 792,535	$ 826,200
Derivative asset	214	238
Cash flow hedges - swaps	1,339	2,974
Level 1
Assets and liabilities measured at fair value on a recurring basis
Securities available-for-sale	574	4,440
Derivative asset	0	0
Total assets	104,764	425,631
Cash flow hedges - swaps		0
Level 2
Assets and liabilities measured at fair value on a recurring basis
Securities available-for-sale	791,961	812,394
Derivative asset	214	238
Total assets	821,842	833,058
Cash flow hedges - swaps		2,974
Level 3
Assets and liabilities measured at fair value on a recurring basis
Securities available-for-sale	0	9,366
Derivative asset	0	0
Total assets	7,759,434	7,878,556
Cash flow hedges - swaps		0
Measured on recurring basis
Assets and liabilities measured at fair value on a recurring basis
Total assets	792,749	826,438
Total liabilities	1,339	2,974
Measured on recurring basis | Equity securities
Assets and liabilities measured at fair value on a recurring basis
Securities available-for-sale	574	4,440
Measured on recurring basis | Debt securities
Assets and liabilities measured at fair value on a recurring basis
Securities available-for-sale	261,235	374,226
Measured on recurring basis | Debt securities | U.S. Government and agencies
Assets and liabilities measured at fair value on a recurring basis
Securities available-for-sale	1	6
Measured on recurring basis | Debt securities | Government sponsored enterprises
Assets and liabilities measured at fair value on a recurring basis
Securities available-for-sale	209,269	294,170
Measured on recurring basis | Debt securities | States and political subdivisions
Assets and liabilities measured at fair value on a recurring basis
Securities available-for-sale	51,056	63,070
Measured on recurring basis | Debt securities | Corporate
Assets and liabilities measured at fair value on a recurring basis
Securities available-for-sale	909	16,980
Measured on recurring basis | Interest rate swaps
Assets and liabilities measured at fair value on a recurring basis
Derivative asset	214	238
Cash flow hedges - swaps	1,278	2,974
Measured on recurring basis | Mortgage-backed securities
Assets and liabilities measured at fair value on a recurring basis
Mortgage-backed securities	530,726	447,534
Measured on recurring basis | Residential mortgage-backed securities | GNMA
Assets and liabilities measured at fair value on a recurring basis
Mortgage-backed securities	29,695	30,883
Measured on recurring basis | Residential mortgage-backed securities | FNMA
Assets and liabilities measured at fair value on a recurring basis
Mortgage-backed securities	82,969	106,578
Measured on recurring basis | Residential mortgage-backed securities | FHLMC
Assets and liabilities measured at fair value on a recurring basis
Mortgage-backed securities	64,021	82,115
Measured on recurring basis | Residential mortgage-backed securities | Non-agency
Assets and liabilities measured at fair value on a recurring basis
Mortgage-backed securities	555	579
Measured on recurring basis | Collateralized mortgage obligations | GNMA
Assets and liabilities measured at fair value on a recurring basis
Mortgage-backed securities	4,769	6,287
Measured on recurring basis | Collateralized mortgage obligations | FNMA
Assets and liabilities measured at fair value on a recurring basis
Mortgage-backed securities	191,512	95,186
Measured on recurring basis | Collateralized mortgage obligations | FHLMC
Assets and liabilities measured at fair value on a recurring basis
Mortgage-backed securities	157,190	119,197
Measured on recurring basis | Collateralized mortgage obligations | SBA
Assets and liabilities measured at fair value on a recurring basis
Mortgage-backed securities		6,608
Measured on recurring basis | Collateralized mortgage obligations | Non-agency
Assets and liabilities measured at fair value on a recurring basis
Mortgage-backed securities	15	101
Measured on recurring basis | Foreign exchange swaps
Assets and liabilities measured at fair value on a recurring basis
Cash flow hedges - swaps	61
Measured on recurring basis | Level 1
Assets and liabilities measured at fair value on a recurring basis
Total assets	574	4,440
Total liabilities	0	0
Measured on recurring basis | Level 1 | Equity securities
Assets and liabilities measured at fair value on a recurring basis
Securities available-for-sale	574	4,440
Measured on recurring basis | Level 1 | Debt securities
Assets and liabilities measured at fair value on a recurring basis
Securities available-for-sale	0	0
Measured on recurring basis | Level 1 | Debt securities | U.S. Government and agencies
Assets and liabilities measured at fair value on a recurring basis
Securities available-for-sale	0	0
Measured on recurring basis | Level 1 | Debt securities | Government sponsored enterprises
Assets and liabilities measured at fair value on a recurring basis
Securities available-for-sale	0	0
Measured on recurring basis | Level 1 | Debt securities | States and political subdivisions
Assets and liabilities measured at fair value on a recurring basis
Securities available-for-sale	0	0
Measured on recurring basis | Level 1 | Debt securities | Corporate
Assets and liabilities measured at fair value on a recurring basis
Securities available-for-sale	0	0
Measured on recurring basis | Level 1 | Interest rate swaps
Assets and liabilities measured at fair value on a recurring basis
Derivative asset	0	0
Cash flow hedges - swaps	0	0
Measured on recurring basis | Level 1 | Mortgage-backed securities
Assets and liabilities measured at fair value on a recurring basis
Mortgage-backed securities	0	0
Measured on recurring basis | Level 1 | Residential mortgage-backed securities | GNMA
Assets and liabilities measured at fair value on a recurring basis
Mortgage-backed securities	0	0
Measured on recurring basis | Level 1 | Residential mortgage-backed securities | FNMA
Assets and liabilities measured at fair value on a recurring basis
Mortgage-backed securities	0	0
Measured on recurring basis | Level 1 | Residential mortgage-backed securities | FHLMC
Assets and liabilities measured at fair value on a recurring basis
Mortgage-backed securities	0	0
Measured on recurring basis | Level 1 | Residential mortgage-backed securities | Non-agency
Assets and liabilities measured at fair value on a recurring basis
Mortgage-backed securities	0	0
Measured on recurring basis | Level 1 | Collateralized mortgage obligations | GNMA
Assets and liabilities measured at fair value on a recurring basis
Mortgage-backed securities	0	0
Measured on recurring basis | Level 1 | Collateralized mortgage obligations | FNMA
Assets and liabilities measured at fair value on a recurring basis
Mortgage-backed securities	0	0
Measured on recurring basis | Level 1 | Collateralized mortgage obligations | FHLMC
Assets and liabilities measured at fair value on a recurring basis
Mortgage-backed securities	0	0
Measured on recurring basis | Level 1 | Collateralized mortgage obligations | SBA
Assets and liabilities measured at fair value on a recurring basis
Mortgage-backed securities		0
Measured on recurring basis | Level 1 | Collateralized mortgage obligations | Non-agency
Assets and liabilities measured at fair value on a recurring basis
Mortgage-backed securities	0	0
Measured on recurring basis | Level 1 | Foreign exchange swaps
Assets and liabilities measured at fair value on a recurring basis
Cash flow hedges - swaps	0
Measured on recurring basis | Level 2
Assets and liabilities measured at fair value on a recurring basis
Total assets	792,175	812,632
Total liabilities	1,339	2,974
Measured on recurring basis | Level 2 | Equity securities
Assets and liabilities measured at fair value on a recurring basis
Securities available-for-sale	0	0
Measured on recurring basis | Level 2 | Debt securities
Assets and liabilities measured at fair value on a recurring basis
Securities available-for-sale	261,235	364,860
Measured on recurring basis | Level 2 | Debt securities | U.S. Government and agencies
Assets and liabilities measured at fair value on a recurring basis
Securities available-for-sale	1	6
Measured on recurring basis | Level 2 | Debt securities | Government sponsored enterprises
Assets and liabilities measured at fair value on a recurring basis
Securities available-for-sale	209,269	294,170
Measured on recurring basis | Level 2 | Debt securities | States and political subdivisions
Assets and liabilities measured at fair value on a recurring basis
Securities available-for-sale	51,056	63,070
Measured on recurring basis | Level 2 | Debt securities | Corporate
Assets and liabilities measured at fair value on a recurring basis
Securities available-for-sale	909	7,614
Measured on recurring basis | Level 2 | Interest rate swaps
Assets and liabilities measured at fair value on a recurring basis
Derivative asset	214	238
Cash flow hedges - swaps	1,278	2,974
Measured on recurring basis | Level 2 | Mortgage-backed securities
Assets and liabilities measured at fair value on a recurring basis
Mortgage-backed securities	530,726	447,534
Measured on recurring basis | Level 2 | Residential mortgage-backed securities | GNMA
Assets and liabilities measured at fair value on a recurring basis
Mortgage-backed securities	29,695	30,883
Measured on recurring basis | Level 2 | Residential mortgage-backed securities | FNMA
Assets and liabilities measured at fair value on a recurring basis
Mortgage-backed securities	82,969	106,578
Measured on recurring basis | Level 2 | Residential mortgage-backed securities | FHLMC
Assets and liabilities measured at fair value on a recurring basis
Mortgage-backed securities	64,021	82,115
Measured on recurring basis | Level 2 | Residential mortgage-backed securities | Non-agency
Assets and liabilities measured at fair value on a recurring basis
Mortgage-backed securities	555	579
Measured on recurring basis | Level 2 | Collateralized mortgage obligations | GNMA
Assets and liabilities measured at fair value on a recurring basis
Mortgage-backed securities	4,769	6,287
Measured on recurring basis | Level 2 | Collateralized mortgage obligations | FNMA
Assets and liabilities measured at fair value on a recurring basis
Mortgage-backed securities	191,512	95,186
Measured on recurring basis | Level 2 | Collateralized mortgage obligations | FHLMC
Assets and liabilities measured at fair value on a recurring basis
Mortgage-backed securities	157,190	119,197
Measured on recurring basis | Level 2 | Collateralized mortgage obligations | SBA
Assets and liabilities measured at fair value on a recurring basis
Mortgage-backed securities		6,608
Measured on recurring basis | Level 2 | Collateralized mortgage obligations | Non-agency
Assets and liabilities measured at fair value on a recurring basis
Mortgage-backed securities	15	101
Measured on recurring basis | Level 2 | Foreign exchange swaps
Assets and liabilities measured at fair value on a recurring basis
Cash flow hedges - swaps	61
Measured on recurring basis | Level 3
Assets and liabilities measured at fair value on a recurring basis
Total assets	0	9,366
Total liabilities	0	0
Measured on recurring basis | Level 3 | Equity securities
Assets and liabilities measured at fair value on a recurring basis
Securities available-for-sale	0	0
Measured on recurring basis | Level 3 | Debt securities
Assets and liabilities measured at fair value on a recurring basis
Securities available-for-sale	0	9,366
Measured on recurring basis | Level 3 | Debt securities | U.S. Government and agencies
Assets and liabilities measured at fair value on a recurring basis
Securities available-for-sale	0	0
Measured on recurring basis | Level 3 | Debt securities | Government sponsored enterprises
Assets and liabilities measured at fair value on a recurring basis
Securities available-for-sale	0	0
Measured on recurring basis | Level 3 | Debt securities | States and political subdivisions
Assets and liabilities measured at fair value on a recurring basis
Securities available-for-sale	0	0
Measured on recurring basis | Level 3 | Debt securities | Corporate
Assets and liabilities measured at fair value on a recurring basis
Securities available-for-sale	0	9,366
Measured on recurring basis | Level 3 | Interest rate swaps
Assets and liabilities measured at fair value on a recurring basis
Derivative asset	0	0
Cash flow hedges - swaps	0	0
Measured on recurring basis | Level 3 | Mortgage-backed securities
Assets and liabilities measured at fair value on a recurring basis
Mortgage-backed securities	0	0
Measured on recurring basis | Level 3 | Residential mortgage-backed securities | GNMA
Assets and liabilities measured at fair value on a recurring basis
Mortgage-backed securities	0	0
Measured on recurring basis | Level 3 | Residential mortgage-backed securities | FNMA
Assets and liabilities measured at fair value on a recurring basis
Mortgage-backed securities	0	0
Measured on recurring basis | Level 3 | Residential mortgage-backed securities | FHLMC
Assets and liabilities measured at fair value on a recurring basis
Mortgage-backed securities	0	0
Measured on recurring basis | Level 3 | Residential mortgage-backed securities | Non-agency
Assets and liabilities measured at fair value on a recurring basis
Mortgage-backed securities	0	0
Measured on recurring basis | Level 3 | Collateralized mortgage obligations | GNMA
Assets and liabilities measured at fair value on a recurring basis
Mortgage-backed securities	0	0
Measured on recurring basis | Level 3 | Collateralized mortgage obligations | FNMA
Assets and liabilities measured at fair value on a recurring basis
Mortgage-backed securities	0	0
Measured on recurring basis | Level 3 | Collateralized mortgage obligations | FHLMC
Assets and liabilities measured at fair value on a recurring basis
Mortgage-backed securities	0	0
Measured on recurring basis | Level 3 | Collateralized mortgage obligations | SBA
Assets and liabilities measured at fair value on a recurring basis
Mortgage-backed securities		0
Measured on recurring basis | Level 3 | Collateralized mortgage obligations | Non-agency
Assets and liabilities measured at fair value on a recurring basis
Mortgage-backed securities	0	$ 0
Measured on recurring basis | Level 3 | Foreign exchange swaps
Assets and liabilities measured at fair value on a recurring basis
Cash flow hedges - swaps	$ 0

XML

Disclosures About Fair Value of Financial Instruments - Reconciliation of all Assets and Liabilities Measured at Fair Value on a Recurring Basis Using Significant Unobservable Inputs (Level 3) (Details) - Level 3 - Debt securities - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Reconciliation of all assets and liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3)
Balance at the beginning of the period	$ 9,366	$ 8,955
Total net realized investment gains/ (losses) and net change in unrealized appreciation/ (depreciation):
Included in net income as OTTI	0	0
Included in other comprehensive income	1,282	411
Purchases	0	0
Sales	(10,648)	0
Transfers into Level 3	0	0
Transfers out of Level 3	0	0
Balance at the end of the period	$ 0	$ 9,366

XML

Disclosures About Fair Value of Financial Instruments - Nonrecurring Assets that had Fair Market Values Below the Carrying Amount (Details) - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016
Fair value measurement for nonrecurring assets that had a fair market value below the carrying amount
Total assets	$ 39,087	$ 47,068
Level 1
Fair value measurement for nonrecurring assets that had a fair market value below the carrying amount
Total assets	0	0
Level 2
Fair value measurement for nonrecurring assets that had a fair market value below the carrying amount
Total assets	0	0
Level 3
Fair value measurement for nonrecurring assets that had a fair market value below the carrying amount
Total assets	39,087	47,068
Loans evaluated for impairment
Fair value measurement for nonrecurring assets that had a fair market value below the carrying amount
Total assets	33,421	41,933
Loans evaluated for impairment | Level 1
Fair value measurement for nonrecurring assets that had a fair market value below the carrying amount
Total assets	0	0
Loans evaluated for impairment | Level 2
Fair value measurement for nonrecurring assets that had a fair market value below the carrying amount
Total assets	0	0
Loans evaluated for impairment | Level 3
Fair value measurement for nonrecurring assets that had a fair market value below the carrying amount
Total assets	33,421	41,933
Mortgage servicing rights
Fair value measurement for nonrecurring assets that had a fair market value below the carrying amount
Total assets		246
Mortgage servicing rights | Level 1
Fair value measurement for nonrecurring assets that had a fair market value below the carrying amount
Total assets		0
Mortgage servicing rights | Level 2
Fair value measurement for nonrecurring assets that had a fair market value below the carrying amount
Total assets		0
Mortgage servicing rights | Level 3
Fair value measurement for nonrecurring assets that had a fair market value below the carrying amount
Total assets		246
Real estate owned
Fair value measurement for nonrecurring assets that had a fair market value below the carrying amount
Total assets	5,666	4,889
Real estate owned | Level 1
Fair value measurement for nonrecurring assets that had a fair market value below the carrying amount
Total assets	0	0
Real estate owned | Level 2
Fair value measurement for nonrecurring assets that had a fair market value below the carrying amount
Total assets	0	0
Real estate owned | Level 3
Fair value measurement for nonrecurring assets that had a fair market value below the carrying amount
Total assets	$ 5,666	$ 4,889

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Disclosures About Fair Value of Financial Instruments - Additional Quantitative Information, Assets Measured at Fair Value, Recurring and Nonrecurring Basis, Level 3 Input (Details) $ in Thousands	12 Months Ended
	Dec. 31, 2017 USD ($)
Loans evaluated for impairment
Quantitative information for Level 3 Fair Value Measurements Assets
Fair value	$ 33,421
Loans evaluated for impairment | Discounted cash flow | Minimum
Quantitative information for Level 3 Fair Value Measurements Assets
Discount rate	4.25%
Loans evaluated for impairment | Discounted cash flow | Maximum
Quantitative information for Level 3 Fair Value Measurements Assets
Discount rate	10.00%
Loans evaluated for impairment | Discounted cash flow | Weighted Average
Quantitative information for Level 3 Fair Value Measurements Assets
Discount rate	7.50%
Loans evaluated for impairment | Appraisal Value
Quantitative information for Level 3 Fair Value Measurements Assets
Estimated costs to sell	10.00%
Real estate owned
Quantitative information for Level 3 Fair Value Measurements Assets
Fair value	$ 5,666

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Regulatory Capital Requirements (Details) - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016
Tier 1 capital (leverage) (to average assets)
Minimum capital requirements (as a percent)	1.25%	0.625%
Northwest Bank
Total capital (to risk weighted assets)
Actual amount	$ 1,017,251	$ 961,279
Actual ratio (as a percent)	14.189%	13.609%
Capital required for capital adequacy	$ 663,179	$ 609,248
Minimum capital requirements ratio (as a percent)	9.25%	8.625%
Well capitalized requirements amount	$ 716,951	$ 706,375
Well capitalized requirements ratio (as a percent)	10.00%	10.00%
Tier 1 capital (to risk weighted assets)
Actual amount	$ 960,443	$ 900,328
Actual ratio (as a percent)	13.396%	12.746%
Minimum capital requirements amount	$ 519,789	$ 467,973
Minimum capital requirements ratio (as a percent)	7.25%	6.625%
Well capitalized requirements amount	$ 573,560	$ 565,100
Well capitalized requirements ratio (as a percent)	8.00%	8.00%
CET 1 capital (to risk weighted assets)
Actual amount	$ 960,443	$ 900,328
Actual ratio (as a percent)	13.396%	12.746%
Minimum capital requirements amount	$ 412,247	$ 362,017
Minimum capital requirements ratio (as a percent)	5.75%	5.125%
Well capitalized requirements amount	$ 430,170	$ 459,144
Well capitalized requirements ratio (as a percent)	6.00%	6.50%
Tier 1 capital (leverage) (to average assets)
Actual amount	$ 960,443	$ 900,328
Actual ratio (as a percent)	10.40%	9.585%
Minimum capital requirements amount	$ 369,482	$ 375,735
Minimum capital requirements ratio (as a percent)	4.00%	4.00%
Well capitalized requirements amount	$ 461,853	$ 469,669
Well capitalized requirements ratio (as a percent)	5.00%	5.00%
Northwest Bancshares, Inc.
Total capital (to risk weighted assets)
Actual amount	$ 1,136,076	$ 1,051,582
Actual ratio (as a percent)	15.831%	14.873%
Capital required for capital adequacy	$ 663,823	$ 609,835
Minimum capital requirements ratio (as a percent)	9.25%	8.625%
Well capitalized requirements amount	$ 717,647	$ 707,056
Well capitalized requirements ratio (as a percent)	10.00%	10.00%
Tier 1 capital (to risk weighted assets)
Actual amount	$ 1,079,270	$ 990,153
Actual ratio (as a percent)	15.039%	14.004%
Minimum capital requirements amount	$ 520,294	$ 468,424
Minimum capital requirements ratio (as a percent)	7.25%	6.625%
Well capitalized requirements amount	$ 574,117	$ 565,644
Well capitalized requirements ratio (as a percent)	8.00%	8.00%
CET 1 capital (to risk weighted assets)
Actual amount	$ 971,395	$ 882,278
Actual ratio (as a percent)	13.536%	12.478%
Minimum capital requirements amount	$ 412,647	$ 362,366
Minimum capital requirements ratio (as a percent)	5.75%	5.125%
Well capitalized requirements amount	$ 466,470	$ 459,586
Well capitalized requirements ratio (as a percent)	6.50%	6.50%
Tier 1 capital (leverage) (to average assets)
Actual amount	$ 1,079,270	$ 990,153
Actual ratio (as a percent)	11.676%	10.53%
Minimum capital requirements amount	$ 369,735	$ 376,116
Minimum capital requirements ratio (as a percent)	4.00%	4.00%
Well capitalized requirements amount	$ 462,169	$ 470,145
Well capitalized requirements ratio (as a percent)	5.00%	5.00%

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Components of Accumulated Other Comprehensive Income - (Details) - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Accumulated other comprehensive income (net of tax)
Shareholders’ equity	$ 1,207,724	$ 1,170,663	$ 1,163,163	$ 1,062,647
Unrealized gain on marketable securities available-for-sale
Accumulated other comprehensive income (net of tax)
Shareholders’ equity	(4,409)	395	3,325	3,461
Fair value of interest rate swaps
Accumulated other comprehensive income (net of tax)
Shareholders’ equity	(691)	(1,778)	(2,779)	(4,078)
Defined benefit pension plans
Accumulated other comprehensive income (net of tax)
Shareholders’ equity	(26,980)	(26,608)	(25,081)	(23,753)
Accumulated other comprehensive income
Accumulated other comprehensive income (net of tax)
Shareholders’ equity	$ (32,080)	$ (27,991)	$ (24,535)	$ (24,370)

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Components of Accumulated Other Comprehensive Income - Changes in Accumulated Other Comprehensive Income by Component (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Changes in accumulated other comprehensive income by component
Balance at beginning of the period	$ 1,170,663	$ 1,163,163	$ 1,062,647
Other comprehensive income/ (loss) before reclassification adjustments	(2,645)
Amounts reclassified from accumulated other comprehensive income	(1,444)
Other comprehensive loss	(4,089)	(3,456)	(165)
Balance at end of the period	1,207,724	1,170,663	1,163,163
Reclassification adjustment for gains (losses) on securities, net of tax	2,326	202	451
Income tax (expense) benefit related to (gain) loss on securities	(1,488)	(129)	(289)
Amortization of prior service cost (compensation and employee benefits)	882	872	875
Income tax expense (benefit) related to compensation and employee benefits	613	606	560
Unrealized gain on marketable securities available-for-sale
Changes in accumulated other comprehensive income by component
Balance at beginning of the period	395	3,325	3,461
Other comprehensive income/ (loss) before reclassification adjustments	(2,478)	(2,728)	315
Amounts reclassified from accumulated other comprehensive income	(2,326)	(202)	(451)
Other comprehensive loss	(4,804)	(2,930)	(136)
Balance at end of the period	(4,409)	395	3,325
Reclassification adjustment for gains (losses) on securities, net of tax	3,814	331	(740)
Income tax (expense) benefit related to (gain) loss on securities	(1,488)	(129)	(289)
Fair value of interest rate swaps
Changes in accumulated other comprehensive income by component
Balance at beginning of the period	(1,778)	(2,779)	(4,078)
Other comprehensive income/ (loss) before reclassification adjustments	1,087	1,001	1,299
Amounts reclassified from accumulated other comprehensive income	0	0	0
Other comprehensive loss	1,087	1,001	1,299
Balance at end of the period	(691)	(1,778)	(2,779)
Defined benefit pension plans
Changes in accumulated other comprehensive income by component
Balance at beginning of the period	(26,608)	(25,081)	(23,753)
Other comprehensive income/ (loss) before reclassification adjustments	(1,254)	(2,399)	(2,203)
Amounts reclassified from accumulated other comprehensive income	882	872	875
Other comprehensive loss	(372)	(1,527)	(1,328)
Balance at end of the period	(26,980)	(26,608)	(25,081)
Amortization of prior service cost (compensation and employee benefits)	2,323	2,323	2,323
Amortization of net loss (compensation and employee benefits)	(3,818)	(3,801)	(3,758)
Income tax expense (benefit) related to compensation and employee benefits	613	606	560
Accumulated other comprehensive income
Changes in accumulated other comprehensive income by component
Balance at beginning of the period	(27,991)	(24,535)	(24,370)
Other comprehensive income/ (loss) before reclassification adjustments		(4,126)	(589)
Amounts reclassified from accumulated other comprehensive income		670	424
Other comprehensive loss	(4,089)	(3,456)	(165)
Balance at end of the period	$ (32,080)	$ (27,991)	$ (24,535)

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Parent Company Only Financial Statements - Condensed - Statements of Financial Condition (Details) - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Assets
Total cash and cash equivalents	$ 77,710	$ 389,867	$ 167,408	$ 240,706
Marketable securities available-for-sale (amortized cost of $800,094 and $825,552)	792,535	826,200
Other assets	30,066	32,194
Total assets	9,363,934	9,623,640
Liabilities:
Debentures payable	111,213	111,213
Other liabilities	68,485	63,373
Total liabilities	8,156,210	8,452,977
Shareholders’ equity	1,207,724	1,170,663	1,163,163	1,062,647
Total liabilities and shareholders’ equity	9,363,934	9,623,640
Parent Company
Assets
Total cash and cash equivalents	26,088	34,521	$ 91,056	$ 110,699
Marketable securities available-for-sale (amortized cost of $800,094 and $825,552)	545	4,413
Investment in bank subsidiary	1,200,799	1,193,175
Other assets	92,712	52,645
Total assets	1,320,144	1,284,754
Liabilities:
Debentures payable	111,213	111,213
Other liabilities	1,207	2,878
Total liabilities	112,420	114,091
Shareholders’ equity	1,207,724	1,170,663
Total liabilities and shareholders’ equity	$ 1,320,144	$ 1,284,754

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Parent Company Only Financial Statements - Condensed - Statements of Income (Details) - USD ($) $ in Thousands	3 Months Ended												12 Months Ended
	Dec. 31, 2017	Sep. 30, 2017	Jun. 30, 2017	Mar. 31, 2017	Dec. 31, 2016	Sep. 30, 2016	Jun. 30, 2016	Mar. 31, 2016	Dec. 31, 2015	Sep. 30, 2015	Jun. 30, 2015	Mar. 31, 2015	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Income:
Interest income	$ 91,561	$ 90,231	$ 89,797	$ 87,267	$ 90,033	$ 84,748	$ 85,555	$ 85,298	$ 85,639	$ 81,091	$ 75,970	$ 76,880	$ 358,856	$ 345,634	$ 319,580
Expense:
Other expense													12,630	13,014	9,031
Interest expense	7,321	6,994	7,066	6,690	7,091	7,454	10,008	13,746	14,486	14,150	13,792	13,899	28,071	38,299	56,327
Income before income taxes	28,724	36,005	45,384	25,798	36,855	18,894	(10,499)	26,065	24,877	18,110	22,518	22,995	135,911	71,315	88,500
Federal and state income taxes	6,576	12,414	14,402	8,052	12,361	4,697	(3,491)	8,081	8,684	5,238	7,213	6,825	41,444	21,648	27,960
Net income	$ 22,148	$ 23,591	$ 30,982	$ 17,746	$ 24,494	$ 14,197	$ (7,008)	$ 17,984	$ 16,193	$ 12,872	$ 15,305	$ 16,170	94,467	49,667	60,540
Parent Company
Income:
Interest income													137	737	1,258
Other income													2,297	709	659
Dividends from bank subsidiary													90,000	50,000	135,000
Undistributed earnings from equity investment in bank subsidiary													7,255	2,760	(70,854)
Total income													99,689	54,206	66,063
Expense:
Compensation and benefits													1,282	1,129	1,061
Other expense													553	561	1,356
Interest expense													4,666	4,560	4,926
Total expense													6,501	6,250	7,343
Income before income taxes													93,188	47,956	58,720
Federal and state income taxes													(1,279)	(1,711)	(1,820)
Net income													$ 94,467	$ 49,667	$ 60,540

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Parent Company Only Financial Statements - Condensed - Statements of Cash Flows (Details) - USD ($) $ in Thousands	3 Months Ended												12 Months Ended
	Dec. 31, 2017	Sep. 30, 2017	Jun. 30, 2017	Mar. 31, 2017	Dec. 31, 2016	Sep. 30, 2016	Jun. 30, 2016	Mar. 31, 2016	Dec. 31, 2015	Sep. 30, 2015	Jun. 30, 2015	Mar. 31, 2015	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Operating activities:
Net Income	$ 22,148	$ 23,591	$ 30,982	$ 17,746	$ 24,494	$ 14,197	$ (7,008)	$ 17,984	$ 16,193	$ 12,872	$ 15,305	$ 16,170	$ 94,467	$ 49,667	$ 60,540
Adjustments to reconcile net income to net cash provided by operating activities:
Noncash stock benefit plan compensation expense													4,894	10,916	5,570
Gain on sale of marketable securities													(1,148)	(625)	(1,037)
Net cash provided by operating activities													156,057	136,902	113,202
Investing activities:
Net sale of marketable securities													36,811	1,951	1,246
Acquisition, net of cash received													0	1,102,237	(61,108)
Net cash provided by/ (used in) investing activities													(108,299)	1,149,408	(88,812)
Financing activities:
Cash dividends paid													(65,212)	(60,156)	(52,825)
Share repurchases													0	(1,752)	(7,847)
Redemption of junior subordinated debt													0	0	(8,119)
Excess tax benefit from stock-based compensation													0	1,425	332
Proceeds from options exercised													7,001	10,856	4,303
Net cash used in financing activities													(359,915)	(1,063,851)	(97,688)
Net increase/ (decrease) in cash and cash equivalents													(312,157)	222,459	(73,298)
Cash and cash equivalents at beginning of period				389,867				167,408				240,706	389,867	167,408	240,706
Cash and cash equivalents at end of period	77,710				389,867				167,408				77,710	389,867	167,408
Parent Company
Operating activities:
Net Income													94,467	49,667	60,540
Adjustments to reconcile net income to net cash provided by operating activities:
Undistributed earnings of subsidiary													(7,255)	(2,760)	70,854
Noncash stock benefit plan compensation expense													4,894	10,916	5,654
Gain on sale of marketable securities													(1,615)	(43)	(54)
Net change in other assets and liabilities													(43,513)	(63,533)	(5,824)
Net cash provided by operating activities													46,978	(5,753)	131,170
Investing activities:
Net sale of marketable securities													2,800	(1,952)	1,192
Acquisition, net of cash received													0	0	(89,398)
Net cash provided by/ (used in) investing activities													2,800	(1,952)	(88,206)
Financing activities:
Cash dividends paid													(65,212)	(60,156)	(52,825)
Share repurchases													0	(1,752)	(7,847)
Repayment of loan to ESOP													0	797	1,549
Redemption of junior subordinated debt													0	0	(8,119)
Excess tax benefit from stock-based compensation													0	1,425	332
Proceeds from options exercised													7,001	10,856	4,303
Net cash used in financing activities													(58,211)	(48,830)	(62,607)
Net increase/ (decrease) in cash and cash equivalents													(8,433)	(56,535)	(19,643)
Cash and cash equivalents at beginning of period				$ 34,521				$ 91,056				$ 110,699	34,521	91,056	110,699
Cash and cash equivalents at end of period	$ 26,088				$ 34,521				$ 91,056				$ 26,088	$ 34,521	$ 91,056

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Derivative Financial Instruments - Narrative (Details)	12 Months Ended
	Dec. 31, 2017 USD ($) derivative	Dec. 31, 2016 USD ($)
Derivative [Line Items]
Fair value of swap agreements	$ 1,339,000	$ 2,974,000
Interest rate swaps
Derivative [Line Items]
Number of interest rate swap agreements held | derivative	2
Derivative liability, notional amount	$ 1,600,000
Amount of ineffectiveness on net investment hedges	0
Gain (loss) reclassified within twelve months	$ 700,000
Northwest Bancorp Capital Trust III | Interest rate swaps
Derivative [Line Items]
Derivative expiration period	10 years
Fixed rate	4.61%
Northwest Bancorp Statutory Trust IV | Interest rate swaps
Derivative [Line Items]
Derivative expiration period	10 years
Cash flow hedges | Northwest Bancorp Capital Trust III | Interest rate swaps
Derivative [Line Items]
Notional amount	$ 25,000,000
Trust preferred investments | Northwest Bancorp Statutory Trust IV | Derivative Instrument
Derivative [Line Items]
Fixed rate	4.09%
Trust preferred investments | Cash flow hedges | Northwest Bancorp Statutory Trust IV | Derivative Instrument
Derivative [Line Items]
Notional amount	$ 25,000,000
Derivatives designated as hedging instruments: | Interest rate swaps
Derivative [Line Items]
Fair value of swap agreements	$ 1,064,000	$ 2,736,000

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Derivative Financial Instruments - Schedule of Derivative Instruments (Details) - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016
Derivative [Line Items]
Derivative asset, notional amount	$ 92,631	$ 10,559
Derivative asset	214	238
Derivative liability, notional amount	154,975	60,559
Cash flow hedges - interest rate swaps	1,339	2,974
Derivatives designated as hedging instruments: | Interest rate swaps
Derivative [Line Items]
Derivative asset, notional amount	0	0
Derivative asset	0	0
Derivative liability, notional amount	50,000	50,000
Cash flow hedges - interest rate swaps	1,064	2,736
Derivatives not designated as hedging instruments: | Interest rate swaps
Derivative [Line Items]
Derivative asset, notional amount	92,631	10,559
Derivative asset	214	238
Derivative liability, notional amount	92,631	10,559
Cash flow hedges - interest rate swaps	214	238
Derivatives not designated as hedging instruments: | Foreign exchange swaps
Derivative [Line Items]
Derivative asset, notional amount	0	0
Derivative asset	0	0
Derivative liability, notional amount	12,344	0
Cash flow hedges - interest rate swaps	$ 61	$ 0

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Derivative Financial Instruments - Gain (Loss) on Derivative Instruments (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Derivative [Line Items]
Gain (loss) on non-hedging swap derivatives	$ (373)	$ 0	$ 0
Gain (loss) on hedging interest rate derivatives	$ 1,599	$ 1,866	$ 2,922

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Selected Quarterly Financial Data - Unaudited (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended												12 Months Ended
	Dec. 31, 2017	Sep. 30, 2017	Jun. 30, 2017	Mar. 31, 2017	Dec. 31, 2016	Sep. 30, 2016	Jun. 30, 2016	Mar. 31, 2016	Dec. 31, 2015	Sep. 30, 2015	Jun. 30, 2015	Mar. 31, 2015	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Quarterly Financial Information Disclosure [Abstract]
Interest income	$ 91,561	$ 90,231	$ 89,797	$ 87,267	$ 90,033	$ 84,748	$ 85,555	$ 85,298	$ 85,639	$ 81,091	$ 75,970	$ 76,880	$ 358,856	$ 345,634	$ 319,580
Interest expense	7,321	6,994	7,066	6,690	7,091	7,454	10,008	13,746	14,486	14,150	13,792	13,899	28,071	38,299	56,327
Net interest income	84,240	83,237	82,731	80,577	82,942	77,294	75,547	71,552	71,153	66,941	62,178	62,981	330,785	307,335	263,253
Provision for loan losses	6,525	3,027	5,562	4,637	2,145	5,538	4,199	1,660	4,595	3,167	1,050	900	19,751	13,542	9,712
Noninterest income	22,905	24,594	41,477	21,504	24,819	20,818	20,275	19,448	19,546	18,140	16,525	14,625	110,480	85,360	68,836
Noninterest expenses	71,896	68,799	73,262	71,646	68,761	73,680	102,122	63,275	61,227	63,804	55,135	53,711	285,603	307,838	233,877
Income before income taxes	28,724	36,005	45,384	25,798	36,855	18,894	(10,499)	26,065	24,877	18,110	22,518	22,995	135,911	71,315	88,500
Income tax expense/ (benefit)	6,576	12,414	14,402	8,052	12,361	4,697	(3,491)	8,081	8,684	5,238	7,213	6,825	41,444	21,648	27,960
Net income	$ 22,148	$ 23,591	$ 30,982	$ 17,746	$ 24,494	$ 14,197	$ (7,008)	$ 17,984	$ 16,193	$ 12,872	$ 15,305	$ 16,170	$ 94,467	$ 49,667	$ 60,540
Basic earnings per share (in dollars per share)	$ 0.22	$ 0.23	$ 0.31	$ 0.18	$ 0.24	$ 0.14	$ (0.07)	$ 0.18	$ 0.16	$ 0.14	$ 0.17	$ 0.18	$ 0.94	$ 0.50	$ 0.64
Diluted earnings per share (in dollars per share)	$ 0.22	$ 0.23	$ 0.30	$ 0.17	$ 0.24	$ 0.14	$ (0.07)	$ 0.18	$ 0.16	$ 0.13	$ 0.17	$ 0.18	$ 0.92	$ 0.49	$ 0.64