10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

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

For the quarterly period ended March 31, 2012

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 Number 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 No.)

100 Liberty Street, Warren, Pennsylvania	16365
(Address of principal executive offices)	(Zip Code)

(814) 726-2140

(Registrant’s telephone number, including area code)

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

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes x  No 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 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, or a smaller reporting company.  See definition of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.  (Check one):

Large Accelerated Filer x	Accelerated Filer o
Non-Accelerated Filer o	Smaller reporting company 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

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date:

Common Stock ($0.01 par value) 97,602,357 shares outstanding as of April 30, 2012

NORTHWEST BANCSHARES, INC.

INDEX

		PAGE
PART I	FINANCIAL INFORMATION
Item 1.	Financial Statements (unaudited)
	Consolidated Statements of Financial Condition as of March 31, 2012 and December 31, 2011	1
	Consolidated Statements of Income for the three months ended March 31, 2012 and 2011	2
	Consolidated Statements of Comprehensive Income for the three months ended March 31, 2012 and 2011	3
	Consolidated Statements of Changes in Shareholders’ Equity for the three months ended March 31, 2012 and 2011	4
	Consolidated Statements of Cash Flows for the three months ended March 31, 2012 and 2011	5
	Notes to Consolidated Financial Statements— Unaudited	7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	39
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	53
Item 4.	Controls and Procedures	54
PART II	OTHER INFORMATION
Item 1.	Legal Proceedings	54
Item 1A.	Risk Factors	55
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	55
Item 3.	Defaults Upon Senior Securities	55
Item 4.	Mine Safety Disclosures	55
Item 5.	Other Information	55
Item 6.	Exhibits	55
	Signatures	57
	Certifications

ITEM 1. FINANCIAL STATEMENTS

NORTHWEST BANCSHARES, INC.

CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION

(in thousands, except share data)

	(Unaudited)
	March 31,			December 31,
	2012			2011
Assets
Cash and due from banks	$	85,050		94,276
Interest-earning deposits in other financial institutions	672,887			593,388
Federal funds sold and other short-term investments	952			633
Marketable securities available-for-sale (amortized cost of $894,232 and $885,408)	919,578			908,349
Marketable securities held-to-maturity (fair value of $224,630 and $239,412)	216,956			231,389
Total cash and investments	1,895,423			1,828,035
Personal Banking:
Loans held for sale	14,222			967
Residental mortgage loans	2,412,711			2,396,399
Home equity loans	1,058,938			1,084,786
Other consumer loans	237,591			245,689
Total Personal Banking	3,723,462			3,727,841
Business Banking:
Commercial real estate loans	1,475,576			1,435,767
Commercial loans	408,894			387,911
Total Business Banking	1,884,470			1,823,678
Total loans	5,607,932			5,551,519
Allowance for loan losses	(72,941		)	(71,138	)
Total loans, net	5,534,991			5,480,381
Federal Home Loan Bank stock, at cost	47,090			48,935
Accrued interest receivable	25,072			24,599
Real estate owned, net	28,895			26,887
Premises and equipment, net	133,599			132,152
Bank owned life insurance	134,615			133,524
Goodwill	171,882			171,882
Other intangible assets	1,828			2,123
Other assets	95,613			109,187
Total assets	$	8,069,008		7,957,705
Liabilities and Shareholders’ equity
Liabilities:
Noninterest-bearing demand deposits	$	732,361		658,560
Interest-bearing demand deposits	833,342			800,676
Savings deposits	2,124,269			2,036,272
Time deposits	2,179,789			2,284,817
Total deposits	5,869,761			5,780,325
Borrowed funds	836,410			827,925
Junior subordinated deferrable interest debentures held by trusts that issued guaranteed capital debt securities	103,094			103,094
Advances by borrowers for taxes and insurance	27,683			23,571
Accrued interest payable	1,119			1,104
Other liabilities	68,466			66,782
Total liabilities	6,906,533			6,802,801
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, 97,593,396 and 97,493,046 shares issued, respectively	976			975
Paid-in capital	660,933			659,523
Retained earnings	547,352			543,598
Unallocated common stock of Employee Stock Ownership Plan	(25,568		)	(25,966	)
Accumulated other comprehensive loss	(21,218		)	(23,226	)
Total shareholders’ equity	1,162,475			1,154,904
Total liabilities and shareholders’ equity	$	8,069,008		7,957,705

See accompanying notes to consolidated financial statements - unaudited

1

NORTHWEST BANCSHARES, INC.

CONSOLIDATED STATEMENTS OF INCOME (Unaudited)

(in thousands, except per share amounts)

	Three months ended
	March 31,
	2012			2011
Interest income:
Loans receivable	$	78,159		80,457
Mortgage-backed securities	4,691			6,756
Taxable investment securities	573			398
Tax-free investment securities	2,446			3,074
Interest-earning deposits	380			407
Total interest income	86,249			91,092
Interest expense:
Deposits	12,944			16,063
Borrowed funds	7,899			7,989
Total interest expense	20,843			24,052
Net interest income	65,406			67,040
Provision for loan losses	6,287			7,244
Net interest income after provision for loan losses	59,119			59,796
Noninterest income:
Impairment losses on securities	(545		)	—
Noncredit related losses on securities not expected to be sold (recognized in other comprehensive income)	307			—
Net impairment losses	(238		)	—
Gain on sale of investments, net	44			4
Service charges and fees	8,425			8,928
Trust and other financial services income	2,116			1,910
Insurance commission income	1,718			1,380
Loss on real estate owned, net	(1,070		)	(27	)
Income from bank owned life insurance	1,117			1,166
Mortgage banking income	531			197
Other operating income	997			768
Total noninterest income	13,640			14,326
Noninterest expense:
Compensation and employee benefits	27,838			25,499
Premises and occupancy costs	5,748			6,191
Office operations	3,324			3,100
Processing expenses	6,142			5,767
Marketing expenses	2,036			1,959
Federal deposit insurance premiums	1,620			2,427
Professional services	1,697			1,256
Amortization of intangible assets	295			491
Real estate owned expense	740			431
Other expenses	1,836			2,257
Total noninterest expense	51,276			49,378
Income before income taxes	21,483			24,744
Federal and state income taxes	6,302			7,491
Net income	$	15,181		17,253
Basic earnings per share	$	0.16		0.16
Diluted earnings per share	$	0.16		0.16

See accompanying notes to unaudited consolidated financial statements

2

NORTHWEST BANCSHARES, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited)

(in thousands)

	Three months ended
	March 31,
	2012			2011
Net Income	$	15,181		17,253
Other comprehensive income net of tax:
Net unrealized holding gains on marketable securities:
Unrealized holding gains net of tax of $(870) and $(1,131), respectively	1,361			2,101
Other-than-temporary impairment on securities included in net income, net of tax of $(93) and $0, respectively	145			—
Reclassification adjustment for gains included in net income, net of tax of $31 and $8, respectively	(49		)	(16	)
Net unrealized holding gains on marketable securities	1,457			2,085
Change in fair value of interest rate swaps, net of tax of $(297) and $(481), respectively	551			894
Other comprehensive income	2,008			2,979
Total comprehensive income	$	17,189		20,232

See accompanying notes to unaudited consolidated financial statements

3

NORTHWEST BANCSHARES, INC.

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY (Unaudited)

(dollars in thousands, except dividends per share data)

										Accumulated
										Other		Unallocated		Total
	Common Stock					Paid-in		Retained		Comprehensive		common stock		Shareholders’
Three months ended March 31, 2011	Shares		Amount			Capital		Earnings		Income/ (loss)		of ESOP		Equity
Beginning balance at December 31, 2010	110,295,117		$	1,103		824,164		523,089		(13,497	)	(27,409	)	1,307,450
Comprehensive income:
Net income	—		—			—		17,253		—		—		17,253
Other comprehensive income, net of tax of $(1,604)	—		—			—		—		2,979		—		2,979
Total comprehensive income	—		—			—		17,253		2,979		—		20,232
Exercise of stock options	56,738		1			352		—		—		—		353
Stock compensation expense	—		—			483		—		—		384		867
Share repurchases	(2,618,423	)	(26		)	(31,048	)	—		—		—		(31,074	)
Dividends paid ($0.10 per share)	—		—			—		(10,712	)	—		—		(10,712	)
Ending balance at March 31, 2011	107,733,432		$	1,078		793,951		529,630		(10,518	)	(27,025	)	1,287,116

							Accumulated
							Other		Unallocated		Total
	Common Stock			Paid-in	Retained		Comprehensive		common stock		Shareholders’
Three months ended March 31, 2012	Shares	Amount		Capital	Earnings		Income/ (loss)		of ESOP		Equity
Beginning balance at December 31, 2011	97,493,046	$	975	659,523	543,598		(23,226	)	(25,966	)	1,154,904
Comprehensive income:
Net income	—	—		—	15,181		—		—		15,181
Other comprehensive income, net of tax of $(1,229)	—	—		—	—		2,008		—		2,008
Total comprehensive income	—	—		—	15,181		2,008		—		17,189
Exercise of stock options	100,350	1		785	—		—		—		786
Stock compensation expense	—	—		625	—		—		398		1,023
Dividends paid ($0.12 per share)	—	—		—	(11,427	)	—		—		(11,427	)
Ending balance at March 31, 2012	97,593,396	$	976	660,933	547,352		(21,218	)	(25,568	)	1,162,475

See accompanying notes to unaudited consolidated financial statements

4

NORTHWEST BANCSHARES, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)

(in thousands)

	Three months ended
	March 31,
	2012			2011
OPERATING ACTIVITIES:
Net Income	$	15,181		17,253
Adjustments to reconcile net income to net cash provided by operating activities:
Provision for loan losses	6,287			7,244
Net loss on sale of assets	1,164			608
Net depreciation, amortization and accretion	2,467			4,108
Decrease in other assets	9,896			8,358
Increase / (decrease) in other liabilities	2,547			(4,045	)
Net amortization of premium on marketable securities	(54		)	(344	)
Noncash impairment losses on investment securities	238			—
Noncash write-down of real estate owned	536			416
Origination of loans held for sale	(50,110		)	(15,385	)
Proceeds from sale of loans held for sale	36,982			23,215
Noncash compensation expense related to stock benefit plans	1,023			867
Net cash provided by operating activities	26,157			42,295
INVESTING ACTIVITIES:
Purchase of marketable securities available-for-sale	(77,491		)	(91,695	)
Purchase of marketable securities held-to-maturity	—			—
Proceeds from maturities and principal reductions of marketable securities available-for-sale	68,558			63,997
Proceeds from maturities and principal reductions of marketable securities held-to-maturity	14,401			43,320
Loan originations	(480,303		)	(375,303	)
Proceeds from loan maturities and principal reductions	427,002			405,521
Proceeds from sale of Federal Home Loan Bank stock	1,845			3,004
Proceeds from sale of real estate owned	3,263			2,866
Sale of real estate owned for investment, net	114			102
Purchase of premises and equipment	(4,346		)	(1,931	)
Net cash (used in)/ provided by investing activities	(46,957		)	49,881

5

NORTHWEST BANCSHARES, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited) (continued)

(in thousands)

	Three months ended
	March 31,
	2012			2011
FINANCING ACTIVITIES:
Increase in deposits, net	$	89,436		56,201
Repayments of long-term borrowings	(17		)	(50,017	)
Net increase/ (decrease) in short-term borrowings	8,502			(9,701	)
Increase in advances by borrowers for taxes and insurance	4,112			3,323
Cash dividends paid	(11,427		)	(10,712	)
Purchase of common stock for retirement	—			(31,074	)
Proceeds from stock options exercised	786			353
Net cash (used in) / provided by financing activities	91,392			(41,627	)
Net increase in cash and cash equivalents	$	70,592		50,549
Cash and cash equivalents at beginning of period	$	688,297		719,111
Net increase in cash and cash equivalents	70,592			50,549
Cash and cash equivalents at end of period	$	758,889		769,660
Cash and cash equivalents:
Cash and due from banks	$	85,050		78,446
Interest-earning deposits in other financial institutions	672,887			690,581
Federal funds sold and other short-term investments	952			633
Total cash and cash equivalents	$	758,889		769,660
Cash paid during the period for:
Interest on deposits and borrowings (including interest credited to deposit accounts of $11,065 and $13,731, respectively)	$	20,828		24,598
Income taxes	$	955		917
Non-cash activities:
Loan foreclosures and repossessions	$	6,557		2,052
Sale of real estate owned financed by the Company	$	100		140

See accompanying notes to unaudited consolidated financial statements

6

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Unaudited

(1)Basis of Presentation and Informational Disclosures

Northwest Bancshares, Inc. (the “Company”)or (“NWBI”), is a Maryland incorporated company headquartered in Warren, Pennsylvania, is a savings and loan holding company regulated by the Board of Governors of the Federal Reserve System.  The Company was incorporated to be the successor to Northwest Bancorp, Inc. upon the completion of the mutual-to-stock conversion of Northwest Bancorp, MHC.  The primary activity of the Company is the ownership of all of the issued and outstanding common stock of Northwest Savings Bank, a Pennsylvania-chartered savings bank (“Northwest”).  Northwest is regulated by the FDIC and the Pennsylvania Department of Banking.  At March 31, 2012, Northwest operated 168 community-banking offices throughout Pennsylvania, western New York, eastern Ohio and Maryland.

The accompanying unaudited consolidated financial statements include the accounts of the Company and its subsidiary, Northwest, and Northwest’s subsidiaries Northwest Settlement Agency, LLC, Northwest Consumer Discount Company, Northwest Financial Services, Inc., Northwest Advisors, Inc., Northwest Capital Group, Inc., Boetger & Associates, Inc., Allegheny Services, Inc., Great Northwest Corporation and Veracity Benefits Design.  The unaudited consolidated financial statements have been prepared in accordance with United States generally accepted accounting principles for interim financial information and with the instructions for Form 10-Q and Article 10 of Regulation S-X.  Accordingly, they do not include all of the information and footnotes required for complete annual financial statements.  In the opinion of management, all adjustments necessary for the fair presentation of the Company’s financial position and results of operations have been included.  The consolidated statements have been prepared using the accounting policies described in the financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2011 updated, as required, for any new pronouncements or changes.

The results of operations for the three months ended March 31, 2012 are not necessarily indicative of the results that may be expected for the year ending December 31, 2012.

Stock-Based Compensation

Stock-based compensation expense of $1.0 million and $867,000 for the three months ended March 31, 2012 and 2011, respectively, was recognized in compensation expense relating to our stock benefit plans.  At March 31, 2012 there was compensation expense of $5.6 million to be recognized for awarded but unvested stock options and $12.8 million for unvested common shares.

Income Taxes- Uncertain Tax Positions

Accounting standards prescribe a comprehensive model for how a company should recognize, measure, present and disclose in its financial statements uncertain tax positions that the company has taken or expects to take on a tax return.  A tax benefit from an uncertain position may be recognized only if it is “more likely than not” that the position is sustainable, based on its technical merits.  The tax benefit of a qualifying position is the largest amount of tax benefit that is greater than 50% likely of being realized upon ultimate settlement with a taxing authority having full knowledge of all relevant information.  As of March 31, 2012 we had no liability for unrecognized tax benefits.

We recognize interest accrued related to: (1) unrecognized tax benefits in federal and state income taxes and (2) refund claims in other operating income.  We recognize penalties (if any) in federal and state income taxes.  There is no amount accrued for the payment of interest or penalties at March 31, 2012.  We are subject to audit by the Internal Revenue Service and any state in which we conduct business for the tax periods ended December 31, 2010, 2009 and 2008.

7

(2)Business Segments

We operate in two reportable business segments: Community Banking and Consumer Finance.  The Community Banking segment provides services traditionally offered by full-service community banks, including commercial and personal demand, savings and time deposit accounts and commercial and personal loans, as well as insurance, brokerage and investment management and trust services.  The Consumer Finance segment, which is comprised of Northwest Consumer Discount Company, a subsidiary of Northwest, operates 52 offices in Pennsylvania and offers personal installment loans for a variety of consumer and real estate products.  This activity is funded primarily through an intercompany borrowing relationship with Allegheny Services, Inc., a subsidiary of Northwest.  Net income is the primary measure used by management to measure segment performance.  The following tables provide financial information for these reportable segments.  The “All Other” column represents the parent company and elimination entries necessary to reconcile to the consolidated amounts presented in the financial statements.

At or for the three months ended:

	Community		Consumer
March 31, 2012 ($ in 000’s)	Banking		Finance	All Other *		Consolidated
External interest income	$	80,405	5,531	313		86,249
Intersegment interest income	748		—	(748	)	—
Interest expense	19,540		748	555		20,843
Provision for loan losses	5,500		787	—		6,287
Noninterest income	13,082		511	47		13,640
Noninterest expense	47,878		3,196	202		51,276
Income tax expense (benefit)	6,221		504	(423	)	6,302
Net income	15,096		807	(722	)	15,181
Total assets	$	7,917,340	113,271	38,397		8,069,008

	Community		Consumer
March 31, 2011 ($ in 000’s)	Banking		Finance	All Other *		Consolidated
External interest income	$	85,616	5,247	229		91,092
Intersegment interest income	770		—	(770	)	—
Interest expense	22,960		770	322		24,052
Provision for loan losses	6,500		744	—		7,244
Noninterest income	13,860		453	13		14,326
Noninterest expense	46,101		3,037	240		49,378
Income tax expense (benefit)	7,396		477	(382	)	7,491
Net income	17,289		672	(708	)	17,253
Total assets	$	7,986,834	112,716	22,654		8,122,204

* Eliminations consist of intercompany loans, interest income and interest expense.

8

(3)Investment securities and impairment of investment securities

The following table shows the portfolio of investment securities available-for-sale at March 31, 2012 (in thousands):

			Gross	Gross
			unrealized	unrealized
	Amortized		holding	holding		Fair
	cost		gains	losses		value
Debt issued by the U.S. government and agencies:
Due in one year or less	$	56	—	—		56
Debt issued by government sponsored enterprises:
Due in one year - five years	26,296		44	—		26,340
Due in five years - ten years	29,163		474	—		29,637
Due after ten years	9,125		—	(35	)	9,090
Equity securities	12,398		4,676	(3	)	17,071
Municipal securities:
Due in one year - five years	8,880		245	—		9,125
Due in five years - ten years	26,427		1,093	—		27,520
Due after ten years	116,529		5,905	(110	)	122,324
Corporate debt issues:
Due in one year - five years	500		—	—		500
Due after ten years	25,019		275	(6,135	)	19,159
Residential mortgage-backed securities:
Fixed rate pass-through	102,152		7,528	(16	)	109,664
Variable rate pass-through	129,112		6,636	(4	)	135,744
Fixed rate non-agency CMOs	8,280		178	(307	)	8,151
Fixed rate agency CMOs	143,158		3,126	—		146,284
Variable rate non-agency CMOs	1,023		—	(135	)	888
Variable rate agency CMOs	256,114		2,038	(127	)	258,025
Total residential mortgage-backed securities	639,839		19,506	(589	)	658,756
Total marketable securities available-for-sale	$	894,232	32,218	(6,872	)	919,578

9

The following table shows the portfolio of investment securities available-for-sale at December 31, 2011 (in thousands):

			Gross	Gross
			unrealized	unrealized
	Amortized		holding	holding		Fair
	cost		gains	losses		value
Debt issued by the U.S. government and agencies:
Due in one year or less	$	59	—	—		59
Debt issued by government sponsored enterprises:
Due in one year - five years	36,295		134	—		36,429
Due in five years - ten years	29,557		638	(61	)	30,134
Due after ten years	9,665		—	(49	)	9,616
Equity securities	12,080		644	(259	)	12,465
Municipal securities:
Due in one year - five years	10,633		291	—		10,924
Due in five years - ten years	27,817		1,336	—		29,153
Due after ten years	124,041		5,350	(180	)	129,211
Corporate debt issues:
Due in one year or less	500		—	—		500
Due after ten years	25,036		233	(4,635	)	20,634
Residential mortgage-backed securities:
Fixed rate pass-through	110,364		8,201	(1	)	118,564
Variable rate pass-through	135,103		6,679	(4	)	141,778
Fixed rate non-agency CMOs	9,521		188	(735	)	8,974
Fixed rate CMOs	112,670		3,466	—		116,136
Variable rate non-agency CMOs	1,104		—	(154	)	950
Variable rate CMOs	240,963		1,991	(132	)	242,822
Total residential mortgage-backed securities	609,725		20,525	(1,026	)	629,224
Total marketable securities available-for-sale	$	885,408	29,151	(6,210	)	908,349

The following table shows the portfolio of investment securities held-to-maturity at March 31, 2012 (in thousands):

			Gross	Gross
			unrealized	unrealized
	Amortized		holding	holding	Fair
	cost		gains	losses	value
Municipal securities:
Due in Five years - ten years	$	3,678	171	—	3,849
Due after ten years	69,592		3,649	—	73,241
Residential mortgage-backed securities:
Fixed rate pass-through	22,815		1,117	—	23,932
Variable rate pass-through	8,649		54	—	8,703
Fixed rate agency CMOs	100,008		2,436	—	102,444
Variable rate agency CMOs	12,214		247	—	12,461
Total residential mortgage-backed securities	143,686		3,854	—	147,540
Total marketable securities held-to-maturity	$	216,956	7,674	—	224,630

10

The following table shows the portfolio of investment securities held-to-maturity at December 31, 2011 (in thousands):

			Gross	Gross
			unrealized	unrealized
	Amortized		holding	holding	Fair
	cost		gains	losses	value
Municipal securities:
Due in five years - ten years	$	3,677	174	—	3,851
Due after ten years	71,015		3,615	—	74,630
Residential mortgage-backed securities:
Fixed rate pass-through	24,160		1,099	—	25,259
Variable rate pass-through	9,066		94	—	9,160
Fixed rate agency CMOs	108,881		2,761	—	111,642
Variable rate agency CMOs	14,590		280	—	14,870
Total residential mortgage-backed securities	156,697		4,234	—	160,931
Total marketable securities held-to-maturity	$	231,389	8,023	—	239,412

We review our investment portfolio on a quarterly basis for indications of impairment.  This review includes analyzing the length of time and the extent to which the fair value has been lower than the amortized cost, the financial condition and near-term prospects of the issuer, including any specific events which may influence the operations of the issuer, and the intent to hold the investments for a period of time sufficient to allow for a recovery in value.  Other investments are evaluated using our best estimate of future cash flows. If the estimate of cash flows indicate that an adverse change has occurred, other-than-temporary impairment would be recognized for the amount of the loss that was deemed credit related.

The following table shows the fair value of 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 March 31, 2012 (in thousands):

	Less than 12 months				12 months or more			Total
			Unrealized			Unrealized			Unrealized
	Fair value		loss		Fair value	loss		Fair value	loss
U.S. government and agencies	$	—	—		9,090	(35	)	9,090	(35	)
Municipal securities	899		(17	)	1,489	(93	)	2,388	(110	)
Corporate issues	1,580		(171	)	13,479	(5,964	)	15,059	(6,135	)
Equity securities	—		—		16	(3	)	16	(3	)
Residential mortgage- backed securities - non-agency	—		—		4,899	(442	)	4,899	(442	)
Residential mortgage- backed securities - agency	80,745		(128	)	15,592	(19	)	96,337	(147	)
Total temporarily impaired securities	$	83,224	(316	)	44,565	(6,556	)	127,789	(6,872	)

11

The following table shows the fair value of 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, 2011 (in thousands):

	Less than 12 months				12 months or more			Total
			Unrealized			Unrealized			Unrealized
	Fair value		loss		Fair value	loss		Fair value	loss
U.S. government and agencies	$	24,601	(61	)	9,648	(49	)	34,249	(110	)
Municipal securities	—		—		2,317	(180	)	2,317	(180	)
Corporate issues	3,537		(219	)	15,067	(4,416	)	18,604	(4,635	)
Equities	4,178		(258	)	18	(1	)	4,196	(259	)
Residential mortgage- backed securities - non-agency	—		—		4,971	(889	)	4,971	(889	)
Residential mortgage- backed securities - agency	85,921		(100	)	14,353	(37	)	100,274	(137	)
Total temporarily impaired securities	$	118,237	(638	)	46,374	(5,572	)	164,611	(6,210	)

Corporate issues

As of March 31, 2012, we had six investments with a total book value of $19.4 million and total fair value of $13.5 million, where the book value exceeded the carrying value for more than 12 months.  These investments were two single issuer trust preferred investments and four pooled trust preferred investments.  The single issuer trust preferred investments were evaluated for other-than-temporary impairment by determining the strength of the underlying issuer.  In both cases, the underlying issuer was “well-capitalized” for regulatory purposes. Neither of the issuers have deferred interest payments or announced the intention to defer interest payments, nor have either been downgraded.  We believe the decline in fair value is related to the spread over three month LIBOR, on which the quarterly interest payments are based, as the spread over LIBOR is significantly lower than current market spreads on similar investments.  We concluded the impairment of these two investments was considered noncredit related and temporary.  In making that determination, we also considered the duration and the severity of the losses and whether we intend to hold these securities until the value is recovered, the securities are redeemed or maturity.  The pooled trust preferred investments were evaluated for other-than-temporary impairment by considering the duration and severity of the losses, actual cash flows, projected cash flows, performing collateral, the class of investment owned and the amount of additional defaults the structure could withstand prior to the investment experiencing a disruption in cash flows.  None of these investments experienced a cash flow disruption or are projecting a cash flow disruption.

We concluded, based on all facts evaluated, the impairment of these investments was considered noncredit related and temporary.  Management asserts that we do not have the intent to sell these investments and that it is more likely than not, we will not have to sell the investments before recovery of their cost basis.

12

The following table provides class, book value, fair value and ratings information for our portfolio of corporate securities that have an unrealized loss at March 31, 2012 (in thousands):

		Total
		Book		Fair	Unrealized		Moody’s/ Fitch
Description	Class	Value		Value	Losses		Ratings
Bank Boston Capital Trust (1)	N/A	$	989	694	(295	)	Ba1/ BB
Huntington Capital Trust	N/A	1,425		1,038	(387	)	Baa3/ BB
Commercebank Capital Trust	N/A	887		880	(7	)	Not rated
Ocean Shore Capital Trust	N/A	864		700	(164	)	Not rated
I-PreTSL I	Mezzanine	1,500		443	(1,057	)	Not rated/ CCC
I-PreTSL II	Mezzanine	1,500		605	(895	)	Not rated/ B
PreTSL XIX	Senior A-1	8,626		6,365	(2,261	)	Baa2/ BBB
PreTSL XX	Senior A-1	5,403		4,334	(1,069	)	Ba2/ BB
		$	21,194	15,059	(6,135	)

(1) — Bank Boston was acquired by Bank of America.

The following table provides collateral information on the entire pool for the trust preferred securities included in the previous table at March 31, 2012 (in thousands):

					Additional
					Immediate
					defaults before
			Current		causing an
	Total		deferrals	Performing	interest
Description *	Collateral		and defaults	Collateral	shortfall
I-PreTSL I	$	188,500	32,500	156,000	93,251
I-PreTSL II	340,500		17,500	323,000	156,787
PreTSL XIX	649,981		179,150	470,831	146,000
PreTSL XX	552,238		174,500	377,738	96,500

Mortgage-backed securities

Mortgage-backed securities include agency (FNMA, FHLMC and GNMA) mortgage-backed securities and non-agency collateralized mortgage obligations (“CMOs”).  We review our portfolio of agency mortgage-backed securities quarterly for impairment.  As of March 31, 2012, we believe that the impairment within our portfolio of agency mortgage-backed securities is noncredit related and temporary.  As of March 31, 2012, we had ten non-agency CMOs with a total book value of $9.3 million and a total fair value of $9.0 million.  During the three months ended March 31, 2012, we recognized other-than-temporary credit related impairment of $238,000 related to one of these investments.  After recognizing the other-than-temporary impairment, our book value on this investment was $4.3 million, with a fair value of $4.0 million.  We determined how much of the impairment was credit related and noncredit related by analyzing cash flow estimates, estimated prepayment speeds, loss severity and conditional default rates.  We consider the discounted cash flow analysis to be our primary evidence when determining whether credit related other-than-temporary impairment exists.  The impairment on the other nine non-agency

13

CMOs, with book value of $5.0 million and fair value of $5.0 million, were also reviewed considering the severity and length of impairment.  After this review, we determined that the impairment on these securities was noncredit related and temporary.

The following table shows issuer specific information, book value, fair value, unrealized gain or loss and other-than-temporary impairment recorded in earnings for the portfolio of non-agency CMOs at March 31, 2012 (in thousands):

								Total
						Impairment		impairment
						recorded in		recorded in
	Book		Fair	Unrealized		current period		prior period
Description	Value		Value	Gain/ (loss)		earnings		earnings
AMAC 2003-6 2A2	$	323	331	8		—		—
AMAC 2003-6 2A8	667		686	19		—		—
AMAC 2003-7 A3	395		399	4		—		—
BOAMS 2005-11 1A8	1,501		1,629	128		—		(146	)
CWALT 2005-J14 A3	4,318		4,011	(307	)	(238	)	(676	)
CFSB 2003-17 2A2	615		625	10		—		—
WAMU 2003-S2 A4	461		470	9		—		—
CMLTI 2005-10 1A5B	58		3	(55	)	—		(3,531	)
SARM 2005-21 4A2	23		16	(7	)	—		(3,193	)
WFMBS 2003-B A2	942		869	(73	)	—		—
	$	9,303	9,039	(264	)	(238	)	(7,546	)

Municipal Securities

At March 31, 2012, we had two investments in municipal securities with a total book value of $1.6 million and a total fair value of $1.5 million, where book value exceeded fair value for more than 12 months.  We initially evaluate municipal securities for other-than-temporary impairment by comparing the fair value, provided to us by two third party pricing sources using quoted prices for similar assets that are actively traded, to the carrying value.  When an investment’s fair value is below 80% of the carrying value we then look at the stated interest rate and compare the stated interest rate to current market interest rates to determine if the decline in fair value is considered to be attributable to interest rates.  If the interest rate approximates current interest rates for similar securities, we determine if the investment is rated and if so, if the rating has changed in the current period.  If the rating has not changed during the current period, we review publicly available information to determine if there has been any negative change in the underlying municipality.  As of March 31, 2012, we have determined that all of the impairment in our municipal securities portfolio is noncredit related and temporary. The two investments in municipal securities discussed above were issued by two Pennsylvania municipalities.

14

The following table provides information for our portfolio of municipal securities that have unrealized losses for greater than 12 months at March 31, 2012 (in thousands):

		Total
		Book		Fair	Unrealized
Description	State	Value		Value	Losses		Rating
Cambridge Area JT Revenue	PA	$	595	566	(29	)	Not rated
West Reading General Obligation	PA	987		923	(64	)	BBB
		$	1,582	1,489	(93	)

Credit related other-than-temporary impairment on debt securities is recognized in earnings while noncredit related other-than-temporary impairment on debt securities, not expected to be sold, is recognized in other comprehensive income.

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

	2012		2011
Beginning balance at Janaury 1, (a)	$	16,382	15,445
Credit losses on debt securities for which other-than-temporary impairment was not previously recognized	—		—
Additional credit losses on debt securities for which other-than-temporary impairment was previously recognized	238		—
Ending balance at March 31,	$	16,620	15,445

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

15

(4)Loans receivable

We have defined our portfolio segments as Personal Banking loans and Business Banking loans.  Classes of Personal Banking loans are residential mortgage loans, home equity loans and other consumer loans.  Classes of Business Banking loans are commercial real estate loans and commercial loans. The following table shows a summary of our loans receivable at March 31, 2012 and December 31, 2011 (in thousands):

	March 31,			December 31,
	2012			2011
Personal Banking:
Residential mortgage loans	$	2,449,991		2,414,992
Home equity loans	1,058,938			1,084,786
Other consumer loans	237,591			245,689
Total Personal Banking	3,746,520			3,745,467
Business Banking:
Commercial real estate	1,516,583			1,481,127
Commercial loans	430,902			408,462
Total Business Banking	1,947,485			1,889,589
Total loans receivable, gross	5,694,005			5,635,056
Deferred loan fees	(4,026		)	(4,752	)
Allowance for loan losses	(72,941		)	(71,138	)
Undisbursed loan proceeds:
Residential mortgage loans	(19,032		)	(12,874	)
Commercial real estate	(41,007		)	(45,360	)
Commercial loans	(22,008		)	(20,551	)
Total loans receivable, net	$	5,534,991		5,480,381

16

The following table provides information related to the allowance for loan losses by portfolio segment and by class of financing receivable at March 31, 2012 (in thousands):

	Balance December 31, 2011		Current period provision	Charge-offs		Recoveries	Balance March 31, 2012
Personal Banking:
Residental mortgage loans	$	8,482	327	(1,043	)	98	7,864
Home equity loans	8,687		128	(892	)	24	7,947
Other consumer loans	5,325		207	(1,287	)	344	4,589
Total Personal Banking	22,494		662	(3,222	)	466	20,400
Business Banking:
Commercial real estate loans	32,148		4,319	(1,473	)	297	35,291
Commercial loans	12,080		1,192	(649	)	97	12,720
Total Business Banking	44,228		5,511	(2,122	)	394	48,011
Unallocated	4,416		114	—		—	4,530
Total	$	71,138	6,287	(5,344	)	860	72,941

The following table provides information related to the allowance for loan losses by portfolio segment and by class of financing receivable at March 31, 2011 (in thousands):

	Balance December 31, 2010		Current period provision		Charge-offs		Recoveries	Balance March 31, 2011
Personal Banking:
Residental mortgage loans	$	6,854	2,286		(1,205	)	71	8,006
Home equity loans	7,675		1,403		(2,255	)	17	6,840
Other consumer loans	5,810		581		(1,232	)	397	5,556
Total Personal Banking	20,339		4,270		(4,692	)	485	20,402
Business Banking:
Commercial real estate loans	35,832		278		(2,276	)	206	34,040
Commercial loans	15,770		2,869		(1,041	)	112	17,710
Total Business Banking	51,602		3,147		(3,317	)	318	51,750
Unallocated	4,471		(173	)	—		—	4,298
Total	$	76,412	7,244		(8,009	)	803	76,450

17

The following table provides information related to the loan portfolio by portfolio segment and by class of financing receivable at March 31, 2012 (in thousands):

	Recorded investment in loans receivable		Allowance for loan losses	Recorded investment in loans on nonaccrual	Recorded investment in loans past due 90 days or more and still accruing	TDRs
Personal Banking:
Residental mortgage loans	$	2,426,933	7,864	28,696	11	806
Home equity loans	1,058,938		7,947	9,100	342	—
Other consumer loans	237,591		4,589	1,983	423	—
Total Personal Banking	3,723,462		20,400	39,779	776	806
Business Banking:
Commercial real estate loans	1,475,576		35,291	58,400	—	38,995
Commercial loans	408,894		12,720	26,834	24	27,502
Total Business Banking	1,884,470		48,011	85,234	24	66,497
Total	$	5,607,932	68,411	125,013	800	67,303

The following table provides information related to the loan portfolio by portfolio segment and by class of financing receivable at December 31, 2011 (in thousands):

	Recorded investment in loans receivable		Allowance for loan losses	Recorded investment in loans on nonaccrual	Recorded investment in loans past due 90 days or more and still accruing	TDRs
Personal Banking:
Residental mortgage loans	$	2,397,366	8,482	28,221	12	806
Home equity loans	1,084,786		8,687	9,560	221	—
Other consumer loans	245,689		5,325	2,667	277	—
Total Personal Banking	3,727,841		22,494	40,448	510	806
Business Banking:
Commercial real estate loans	1,435,767		32,148	62,494	—	38,216
Commercial loans	387,911		12,080	28,163	—	30,407
Total Business Banking	1,823,678		44,228	90,657	—	68,623
Total	$	5,551,519	66,722	131,105	510	69,429

18

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 quarter ended March 31, 2012 (in thousands):

	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:
Residental mortgage loans	$	28,696	—	—	—	28,696	29,327	170
Home equity loans	9,100		—	—	—	9,100	9,545	68
Other consumer loans	1,983		—	—	—	1,983	2,499	13
Total Personal Banking	39,779		—	—	—	39,779	41,371	251
Business Banking:
Commercial real estate loans	34,601		23,799	24,012	9,218	91,630	91,747	878
Commercial loans	15,810		11,024	8,332	8,744	43,910	45,802	369
Total Business Banking	50,411		34,823	32,344	17,962	135,540	137,549	1,247
Total	$	90,190	34,823	32,344	17,962	175,319	178,920	1,498

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, 2011 (in thousands):

	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:
Residental mortgage loans	$	28,221	—	—	361	28,582	30,731	538
Home equity loans	9,560		—	—	—	9,560	9,574	182
Other consumer loans	2,667		—	—	—	2,667	2,340	34
Total Personal Banking	40,448		—	—	361	40,809	42,645	754
Business Banking:
Commercial real estate loans	44,603		17,891	15,467	16,097	94,058	101,731	3,640
Commercial loans	10,785		17,378	7,337	8,991	44,491	59,897	1,642
Total Business Banking	55,388		35,269	22,804	25,088	138,549	161,628	5,282
Total	$	95,836	35,269	22,804	25,449	179,358	204,273	6,036

19

The following table provides information related to the evaluation of impaired loans by portfolio segment and by class of financing receivable at March 31, 2012 (in thousands):

	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:
Residental mortgage loans	$	2,426,933	—	—	—	—
Home equity loans	1,058,938		—	—	—	—
Other consumer loans	237,591		—	—	—	—
Total Personal Banking	3,723,462		—	—	—	—
Business Banking:
Commercial real estate loans	1,432,081		43,495	16,334	4,918	27,161
Commercial loans	384,711		24,183	4,614	1,114	19,569
Total Business Banking	1,816,792		67,678	20,948	6,032	46,730
Total	$	5,540,254	67,678	20,948	6,032	46,730

The following table provides information related to the evaluation of impaired loans by portfolio segment and by class of financing receivable at December 31, 2011 (in thousands):

	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:
Residental mortgage loans	$	2,397,366	—	—	—	—
Home equity loans	1,084,786		—	—	—	—
Other consumer loans	245,689		—	—	—	—
Total Personal Banking	3,727,841		—	—	—	—
Business Banking:
Commercial real estate loans	1,395,634		40,133	15,576	3,025	24,557
Commercial loans	361,033		26,878	5,897	1,519	20,981
Total Business Banking	1,756,667		67,011	21,473	4,544	45,538
Total	$	5,484,508	67,011	21,473	4,544	45,538

20

Our loan portfolios include certain loans that have been modified in a troubled debt restructuring (TDR), where 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 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. 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.

During the three months ended March 31, 2012, one commercial real estate loan TDR with a balance of $282,000 was charged off and one commercial loan TDR with a balance of $213,000 was paid off.

21

The following table provides information related to troubled debt restructurings by portfolio segment and by class of financing receivable for the periods indicated (dollars in thousands):

	For the three months ended March 31, 2012
	Number of contracts	Recorded investment at the time of modification		Current recorded investment	Current allowance
Troubled debt restructurings:
Personal Banking:
Residential mortgage loans	—	$	—	—	—
Home equity loans	—	—		—	—
Other consumer loans	—	—		—	—
Total Personal Banking	—	—		—	—
Business Banking:
Commercial real estate loans	3	1,400		1,391	636
Commercial loans	3	1,645		1,446	84
Total Business Banking	6	3,045		2,837	720
Total	6	$	3,045	2,837	720
Troubled debt restructurings that subsequently defaulted:
Personal Banking:
Residential mortgage loans	1	$	449	361	470
Home equity loans	—	—		—	—
Other consumer loans	—	—		—	—
Total Personal Banking	1	449		361	470
Business Banking:
Commercial real estate loans	1	575		520	—
Commercial loans	—	—		—	—
Total Business Banking	1	575		520	—
Total	2	$	1,024	881	470

22

The following table provides information related to troubled debt restructurings by portfolio segment and by class of financing receivable for the periods indicated (dollars in thousands):

	For the three months ended March 31, 2011
	Number of contracts	Recorded investment at the time of modification		Current recorded investment	Current allowance
Troubled debt restructurings:
Personal Banking:
Residential mortgage loans	1	$	449	363	1
Home equity loans	—	—		—	—
Other consumer loans	—	—		—	—
Total Personal Banking	1	449		363	1
Business Banking:
Commercial real estate loans	3	1,758		1,734	129
Commercial loans	5	12,934		11,684	3,754
Total Business Banking	8	14,692		13,418	3,883
Total	9	$	15,141	13,781	3,884
Troubled debt restructurings that subsequently defaulted:
Personal Banking:
Residential mortgage loans	—	$	—	—	—
Home equity loans	—	—		—	—
Other consumer loans	—	—		—	—
Total Personal Banking	—	—		—	—
Business Banking:
Commercial real estate loans	—	—		—	—
Commercial loans	1	9,303		9,180	918
Total Business Banking	1	9,303		9,180	918
Total	1	$	9,303	9,180	918

23

The following table provides information related to loan delinquencies at March 31, 2012 (in thousands):

	30-59 Days Delinquent		60-89 Days Delinquent	90 Days or Greater Delinquent	Total Delinquency	Current	Total Loans
Personal Banking:
Residential mortgage loans	$	29,414	1,466	28,696	59,576	2,367,357	2,426,933
Home equity loans	7,086		2,313	9,100	18,499	1,040,439	1,058,938
Other consumer loans	2,854		1,083	1,983	5,920	231,671	237,591
Total Personal Banking	39,354		4,862	39,779	83,995	3,639,467	3,723,462
Business Banking:
Commercial real estate loans	9,275		3,203	34,601	47,079	1,428,497	1,475,576
Commercial loans	7,069		1,376	15,810	24,255	384,639	408,894
Total Business Banking	16,344		4,579	50,411	71,334	1,813,136	1,884,470
Total	$	55,698	9,441	90,190	155,329	5,452,603	5,607,932

The following table provides information related to loan delinquencies at December 31, 2011 (in thousands):

	30-59 Days Delinquent		60-89 Days Delinquent	90 Days or Greater Delinquent	Total Delinquency	Current	Total Loans
Personal Banking:
Residential mortgage loans	$	33,671	8,629	28,221	70,521	2,326,845	2,397,366
Home equity loans	7,426		1,953	9,560	18,939	1,065,847	1,084,786
Other consumer loans	4,854		1,787	2,667	9,308	236,381	245,689
Total Personal Banking	45,951		12,369	40,448	98,768	3,629,073	3,727,841
Business Banking:
Commercial real estate loans	10,680		3,122	44,603	58,405	1,377,362	1,435,767
Commercial loans	2,027		4,958	10,785	17,770	370,141	387,911
Total Business Banking	12,707		8,080	55,388	76,175	1,747,503	1,823,678
Total	$	58,658	20,449	95,836	174,943	5,376,576	5,551,519

Credit quality indicators:  We categorize Business Banking 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 Banking loans individually by classifying the loans by credit risk.  Loans designated as special mention or classified 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

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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, which were updated during the quarter ended March 31, 2012 (in thousands):

	Pass		Special Mention	Substandard	Doubtful	Loss	Total
Personal Banking:
Residential mortgage loans	$	2,403,635	—	21,989	23	1,286	2,426,933
Home equity loans	1,049,352		—	9,586	—	—	1,058,938
Other consumer loans	236,817		—	774	—	—	237,591
Total Personal Banking	3,689,804		—	32,349	23	1,286	3,723,462
Business Banking:
Commercial real estate loans	1,259,031		78,960	132,711	4,874	—	1,475,576
Commercial loans	319,677		27,053	59,376	2,788	—	408,894
Total Business Banking	1,578,708		106,013	192,087	7,662	—	1,884,470
Total	$	5,268,512	106,013	224,436	7,685	1,286	5,607,932

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The following table sets forth information about credit quality indicators, which were updated during the year ended December 31, 2011 (in thousands):

	Pass		Special Mention	Substandard	Doubtful	Loss	Total
Personal Banking:
Residential mortgage loans	$	2,373,275	—	22,843	11	1,237	2,397,366
Home equity loans	1,074,512		—	10,274	—	—	1,084,786
Other consumer loans	244,491		—	1,198	—	—	245,689
Total Personal Banking	3,692,278		—	34,315	11	1,237	3,727,841
Business Banking:
Commercial real estate loans	1,211,583		75,981	144,947	3,256	—	1,435,767
Commercial loans	298,597		23,887	62,753	2,674	—	387,911
Total Business Banking	1,510,180		99,868	207,700	5,930	—	1,823,678
Total	$	5,202,458	99,868	242,015	5,941	1,237	5,551,519

(5)Goodwill and Other Intangible Assets

The following table provides information for intangible assets subject to amortization at the dates indicated (in thousands):

	March 31,			December 31,
	2012			2011
Amortizable intangible assets:
Core deposit intangibles — gross	$	30,578		30,578
Acquisitions	—			—
Less: accumulated amortization	(29,748		)	(29,549	)
Core deposit intangibles — net	830			1,029
Customer and Contract intangible assets — gross	3,779			3,779
Less: accumulated amortization	(2,781		)	(2,685	)
Customer and Contract intangible assets — net	$	998		1,094

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The following table shows the actual aggregate amortization expense for the current quarter and prior year’s same quarter, as well as the estimated aggregate amortization expense, based upon current levels of intangible assets, for the current fiscal year and each of the five succeeding fiscal years (in thousands):

For the three months ended March 31, 2012	$	295
For the three months ended March 31, 2011	491
For the year ending December 31, 2012	1,013
For the year ending December 31, 2013	605
For the year ending December 31, 2014	296
For the year ending December 31, 2015	140
For the year ending December 31, 2016	70
For the year ending December 31, 2017	—

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

	Community		Consumer
	Banks		Finance	Total
Balance at December 31, 2010	$	170,269	1,613	171,882
Goodwill acquired	—		—	—
Impairment losses	—		—	—
Balance at December 31, 2011	170,269		1,613	171,882
Goodwill acquired	—		—	—
Impairment losses	—		—	—
Balance at March 31, 2012	$	170,269	1,613	171,882

We performed our annual goodwill impairment test as of June 30, 2011 and concluded that goodwill was not impaired.  At March 31, 2012, there were no changes in our operations that would cause us to update the goodwill impairment test performed as of June 30, 2011.

(6)          Guarantees

We issue standby letters of credit in the normal course of business.  Standby letters of credit are conditional commitments issued by the Company 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 loan underwriting procedures.  Collateral may be obtained based on management’s credit assessment of the customer.  At March 31, 2012, the maximum potential amount of future payments we could be required to make under these standby letters of credit was $63.2 million, of which $62.0 million is fully collateralized.  At March 31, 2012, we had a liability, which represents deferred income, of $701,000 related to the standby letters of credit.  There are no recourse provisions that would enable us to recover any amounts from third parties.

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(7)         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 the earnings of the Company. All shares outstanding during the three months ended March 31, 2012 were included in the computation of diluted earnings per share for this period because the options’ exercise price was not greater than the average market price of the common shares of $12.63.  Stock options to purchase 579,793 shares of common stock with a weighted average exercise price of $12.12 per share were outstanding during the three months ended March 31, 2011 but were not included in the computation of diluted earnings per share for this period because the options’ exercise price was greater than the average market price of the common shares of $12.10.

The computation of basic and diluted earnings per share follows (in thousands, except share data and per share amounts):

	Quarter ended
	March 31,
	2012		2011
Reported net income	$	15,181	17,253
Weighted average common shares outstanding	94,115,522		106,571,262
Dilutive potential shares due to effect of stock options	549,811		687,058
Total weighted average common shares and dilutive potential shares	94,665,333		107,258,320
Basic earnings per share:	$	0.16	0.16
Diluted earnings per share:	$	0.16	0.16

(8)           Pension and Other Post-retirement Benefits (in thousands):

Components of Net Periodic Benefit Cost

	Quarter ended March 31,
	Pension Benefits					Other Post-retirement Benefits
	2012			2011		2012	2011
Service cost	$	1,858		1,428		—	—
Interest cost	1,432			1,363		17	21
Expected return on plan assets	(1,948		)	(1,502	)	—	—
Amortization of prior service cost	(40		)	(40	)	—	—
Amortization of the net loss	690			169		12	13
Net periodic benefit cost	$	1,992		1,418		29	34

We made no contribution to our pension or other post-retirement benefit plans during the three month period ended March 31, 2012.  Once determined, we anticipate making a tax-deductible contribution to our defined benefit pension plan for the year ending December 31, 2012.

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(9)         Disclosures About Fair Value of Financial Instruments

Fair value information about financial instruments, whether or not recognized in the consolidated statement of financial condition, is required to be disclosed. These requirements exclude certain financial instruments and all nonfinancial instruments. 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 technique 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,

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municipal bonds, mortgage-backed securities and US government obligations.  Certain corporate debt securities do not have an active market and as such the broker pricing received uses alternative methods. The fair value of these corporate debt securities is determined by using a discounted cash flow model using market assumptions, which generally include cash flow, collateral and other market assumptions.  As such, these securities are included herein 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 were segregated for valuation purposes. Each loan pool was separately valued utilizing a discounted cash flow analysis. Projected monthly cash flows were discounted to present value using a market rate for comparable loans, which is not considered an exit price. Characteristics of comparable loans included remaining term, coupon interest, and estimated prepayment speeds. Delinquent loans were separately evaluated given the impact delinquency has on the projected future cash flow of the loan and the approximate discount or market rate.

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

The fixed rate advances were valued by comparing their contractual cost to the prevailing market cost.  The carrying amount of repurchase agreements approximates the 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.

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Cash flow hedges — Interest rate swap agreements (“swaps”)

The fair value of the swaps is the amount we would have expected to pay to terminate the agreements and is based upon the present value of the expected future cash flows using the LIBOR swap curve, the basis for the underlying interest rate.

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 March 31, 2012 and December 31, 2011, 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 March 31, 2012 and December 31, 2011:

	March 31, 2012						December 31, 2011
	Carrying		Estimated				Carrying	Estimated
	amount		fair value	Level 1	Level 2	Level 3	amount	fair value
Financial assets:
Cash and cash equivalents	$	758,889	758,889	758,889	—	—	688,297	688,297
Securities available-for-sale	919,578		919,578	17,071	894,217	8,290	908,349	908,349
Securities held-to-maturity	216,956		224,630	—	224,630	—	231,389	239,412
Loans receivable, net	5,534,991		5,885,894	14,222	—	5,871,672	5,480,381	5,839,674
Accrued interest receivable	25,072		25,072	25,072	—	—	24,599	24,599
FHLB Stock	47,090		47,090	—	—	—	48,935	48,935
Total financial assets	$	7,502,576	7,861,153	815,254	1,118,847	5,879,962	7,381,950	7,749,266
Financial liabilities:
Savings and checking accounts	$	3,689,972	3,689,972	3,689,972	—	—	3,495,508	3,495,508
Time deposits	2,179,789		2,226,527	—	—	2,226,527	2,284,817	2,329,451
Borrowed funds	836,410		900,260	140,843	—	759,417	827,925	899,547
Junior subordinated debentures	103,094		115,940	—	—	115,940	103,094	116,725
Cash flow hedges - swaps	12,789		12,789	—	12,789	—	13,637	13,637
Accrued interest payable	1,119		1,119	1,119	—	—	1,104	1,104
Total financial liabilities	$	6,823,173	6,946,607	3,831,934	12,789	3,101,884	6,726,085	6,855,972

Fair value estimates are made at a point-in-time, based on relevant market data and information about the instrument. The methods and assumptions detailed above were used in estimating the fair value of financial instruments at both March 31, 2012 and December 31, 2011.  There were no transfers of financial instruments between Level 1 and Level 2 during the quarter ended March 31, 2012.

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The following table represents assets measured at fair value on a recurring basis at March 31, 2012 (in thousands):

						Total
						assets at
	Level 1		Level 2		Level 3	fair value
Equity securities	$	17,071	—		—	17,071
Debt securities:
U.S. government and agencies	—		56		—	56
Government sponsored enterprises	—		65,067		—	65,067
States and political subdivisions	—		158,969		—	158,969
Corporate	—		11,369		8,290	19,659
Total debt securities	—		235,461		8,290	243,751
Residential mortgage-backed securities:
GNMA	—		46,572		—	46,572
FNMA	—		128,839		—	128,839
FHLMC	—		69,283		—	69,283
Non-agency	—		715		—	715
Collateralized mortgage obligations:
GNMA	—		27,770		—	27,770
FNMA	—		137,805		—	137,805
FHLMC	—		221,023		—	221,023
SBA	—		17,710		—	17,710
Non-agency	—		9,039		—	9,039
Total mortgage-backed securities	—		658,756		—	658,756
Interest rate swaps	—		(12,789	)	—	(12,789	)
Total assets	$	17,071	881,428		8,290	906,789

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The following table represents assets measured at fair value on a recurring basis at December 31, 2011 (in thousands):

						Total
						assets at
	Level 1		Level 2		Level 3	fair value
Equity securities	$	12,465	—		—	12,465
Debt securities:
U.S. government and agencies	—		59		—	59
Government sponsored enterprises	—		76,179		—	76,179
States and political subdivisions	—		169,288		—	169,288
Corporate	—		11,477		9,657	21,134
Total debt securities	—		257,003		9,657	266,660
Residential mortgage-backed securities:
GNMA	—		48,297		—	48,297
FNMA	—		138,340		—	138,340
FHLMC	—		72,980		—	72,980
Non-agency	—		725		—	725
Collateralized mortgage obligations:
GNMA	—		30,759		—	30,759
FNMA	—		118,526		—	118,526
FHLMC			191,049			191,049
SBA	—		18,624		—	18,624
Non-agency	—		9,924		—	9,924
Total mortgage-backed securities	—		629,224		—	629,224
Interest rate swaps	—		(13,637	)	—	(13,637	)
Total assets	$	12,465	872,590		9,657	894,712

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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 quarter ended March 31, 2012 (in thousands):

	Debt
	securities
Balance at December 31, 2011	$	9,657
Total net realized investment gains/ (losses) and net change in unrealized appreciation/ (depreciation):
Included in net income as OTTI	—
Included in other comprehensive income	(1,367		)
Purchases	—
Sales	—
Transfers in to Level 3	—
Transfers out of Level 3	—
Balance at March 31, 2012	$	8,290

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 quarter ended March 31, 2011 (in thousands):

	Debt
	securities
Balance at December 31, 2010	$	9,209
Total net realized investment gains/ (losses) and net change in unrealized appreciation/ (depreciation):
Included in net income as OTTI	—
Included in other comprehensive income	102
Purchases	—
Sales	—
Transfers in to of Level 3
Transfers out of of Level 3	—
Balance at March 31, 2011	$	9,311

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Certain assets and liabilities are measured at fair value on a nonrecurring basis after initial recognition such as loans measured for impairment, loans held for sale and real estate owned.  The following table represents the fair value measurement for nonrecurring assets at March 31, 2012 (in thousands):

					Total
					assets at
	Level 1		Level 2	Level 3	fair value
Loans measured for impairment	$	—	—	14,916	14,916
Loans held for sale	14,222		—	—	14,222
Real estate owned	—		—	28,895	28,895
Total assets	$	14,222	—	43,811	58,033

Certain assets and liabilities are measured at fair value on a nonrecurring basis after initial recognition such as loans measured for impairment and real estate owned.  The following table represents the fair value measurement for nonrecurring assets at December 31, 2011 (in thousands):

					Total
					assets at
	Level 1		Level 2	Level 3	fair value
Loans measured for impairment	$	—	—	16,929	16,929
Real estate owned	—		—	26,887	26,887
Total assets	$	—	—	43,816	43,816

Impaired loans — A loan is considered to be impaired when it is probable that all of the principal and interest due under the original terms of the loan may not be collected.  Impairment is measured based on the fair value of the underlying collateral or discounted cash flows when collateral does not exist.  We measure impairment on all nonaccrual commercial and commercial real estate loans for which we have established specific reserves as part of the specific allocated allowance component of the allowance for loan losses.  We classify loans individually evaluated for impairment that require a specific reserve as nonrecurring Level 3.

Real Estate Owned — Real estate owned is comprised of property acquired through foreclosure or voluntarily conveyed by delinquent 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 all real estate owned as nonrecurring Level 3.

Loans held for sale — Mortgage loans held for sale are recorded at the lower of carrying value or fair value.  The fair value is based on what secondary markets are currently offering.  As the fair value is determined by a quoted price from FHLMC, and we only have open delivery contracts with FHLMC, we classify loans held for sale as nonrecurring Level 1.

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The table below 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 March 31, 2012 (dollar amounts in thousands):

	Fair value		Valuation techniques	Significant unobservable inputs	Range (weighted average)
Debt securities	$	8,290	Discounted cash flow	Discount margin	0.35% to 2.1% (0.72)%
				Default rates	2.00%
				Prepayment speeds	1.00% annually
Loans measured for impairment	14,916		Appraisal value (1)	N/A	N/A
Real estate owned	28,895		Appraisal value (1)	N/A	N/A

(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.

The significant unobservable inputs used in the fait value measurement of our debt securities are discount margins, default rates and prepayment speeds.  Significant increases in any of those rates would result in a significantly lower fair value measurement.

(10)         Mortgage Loan Servicing

Mortgage servicing assets are recognized as separate assets when servicing rights are acquired 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, mortgage interest rates, which are used to determine prepayment rates and discount rates, are held constant over the estimated life of the portfolio.  MSRs are amortized into mortgage banking income in proportion to, and over the period of, the estimated future net servicing income of the underlying mortgage loans.

Capitalized MSRs are evaluated 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 temporary 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.

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The following table shows changes in MSRs at and for the three months ended March 31, 2012 (in thousands):

				Net
				Carrying
	Servicing		Valuation	Value and
	Rights		Allowance	Fair Value
Balance at December 31, 2011	3,655		—	3,655
Additions/ (reductions)	513		—	513
Amortization	(734	)	—	(734	)
Balance at March 31, 2012	3,434		—	3,434

The following table shows changes in MSRs at and for the three months ended March 31, 2011 (in thousands):

					Net
					Carrying
	Servicing			Valuation	Value and
	Rights			Allowance	Fair Value
Balance at December 31, 2010	$	5,969		—	5,969
Additions/ (reductions)	285			—	285
Amortization	(922		)	—	(922	)
Balance at March 31, 2011	$	5,332		—	5,332

(11)         Guaranteed Preferred Beneficial Interests in the Company’s Junior Subordinated Deferrable Interest Debentures (Trust Preferred Securities) and Interest Rate Swaps

We have two statutory business trusts: Northwest Bancorp Capital Trust III, a Delaware statutory business trust and Northwest Bancorp Statutory Trust IV, a Connecticut statutory business trust (“Trusts”).  These 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 the 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 (Trust III) issued 50,000 cumulative trust preferred securities in a private transaction to a pooled investment vehicle on December 5, 2006 (liquidation value of $1,000 per preferred security or $50,000,000) with a stated maturity of December 30, 2035.  These securities carry a floating interest rate, which is reset quarterly, equal to three-month LIBOR plus 1.38%.  Northwest Bancorp Statutory Trust IV (Trust IV) issued 50,000 cumulative trust preferred securities in a private transaction to a pooled investment vehicle on December 15, 2006 (liquidation value of $1,000 per preferred security or $50,000,000) with a stated maturity of December 15, 2035.  These securities carry a floating interest rate, which is reset quarterly, equal to three-month LIBOR plus 1.38%.  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.  Trust III holds $51,547,000 of the Company’s junior subordinated debentures and Trust IV holds $51,547,000 of the Company’s junior subordinated debentures.  These subordinated debentures are the sole assets of the Trusts.   Cash distributions on the trust securities are made on a quarterly basis to the extent interest on the debentures is

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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 five years.  If interest payments on the subordinated debentures are deferred, the distributions on the trust preferred securities are also deferred.  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.

We entered into four 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 Trust III and Trust IV.  The first two swaps modify the re-pricing characteristics of Trust III, wherein (i) the Company receives interest of three-month LIBOR from a counterparty and pays a fixed rate of 4.20% to the same counterparty calculated on a notional amount of $25.0 million and (ii) 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 terms of these two swaps are five years and ten years, which expire September 2013 and September 2018, respectively.  The second two swaps modify the re-pricing characteristics of Trust IV, wherein (i) the Company receives interest of three-month LIBOR from a counterparty and pays a fixed rate of 3.85% to the same counterparty calculated on a notional amount of $25.0 million and (ii) 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 terms of these two swaps are seven years and ten years, which expire September 2015 and September 2018, respectively.  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 March 31, 2012, $12.8 million was pledged as collateral to the counterparty.

At March 31, 2012, the fair value of the swap agreements was $(12.8) million and was the amount we would have expected to pay if the contracts were terminated.  There was no material hedge ineffectiveness for these swaps.

The following table shows liability derivatives, included in other liabilities, at March 31, 2012 and December 31, 2011 (in thousands):

	March 31,		December 31,
	2012		2011
Fair value	$	12,789	13,637
Notional amount	100,000		100,000
Collateral posted	12,789		13,637

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

Forward-Looking Statements:

In addition to historical information, this document may contain certain forward-looking statements, as defined in the Private Securities Litigation Reform Act of 1995.  These forward-looking statements contained herein are subject to certain risks and uncertainties that could cause actual results to differ materially from those expressed or implied in the forward-looking statements.  Readers are cautioned not to place undue reliance on these forward-looking statements, as they reflect management’s analysis only as of the date of this report.  We have no obligation to revise or update these forward-looking statements to reflect events or circumstances that arise after the date of this report.

Important factors that might cause such a difference include, but are not limited to:

·Changes in interest rates which could impact our net interest margin;

·Adverse changes in our loan portfolio or investment securities portfolio and the resulting credit risk-related losses and/ or market value adjustments;

·The impact of the uncertain economic environment on our loan portfolio (including cash flow and collateral values), investment portfolio, customers and capital market activities;

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

·Our ability to continue to increase and manage our commercial and residential real estate, multifamily and commercial and industrial loans;

·The adequacy of the allowance for loan losses;

·Changes in the financial performance and/ or condition of our borrowers;

·Changes in general economic or business conditions resulting in changes in demand for credit and other services, among other things;

·Changes in consumer confidence, spending and savings habits relative to the bank and non-bank financial services we provide;

·Compliance with laws and regulatory requirements of federal and state agencies;

·New legislation affecting the financial services industry;

·The impact of the current governmental effort to restructure the U.S. financial and regulatory system;

·The level of future deposit premium assessments;

·Competition from other financial institutions in originating loans and attracting deposits;

·The effect of changes in accounting policies and practices, as may be adopted by the regulatory agencies, as well as the SEC, Public Company Accounting Oversight Board, the Financial Accounting Standards Board and other accounting standards setters;

·Our ability to effectively implement technology driven products and services;

·Sources of liquidity; and

·Our success in managing the risks involved in the foregoing.

Overview of Critical Accounting Policies Involving Estimates

Critical accounting policies involve accounting estimates that: a) require assumptions about highly uncertain matters, and b) could vary sufficiently enough to have a material effect on our financial condition and/ or results of operations.

Allowance 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 reasonably estimable at the date of the financial statements. Management believes, to the best of their knowledge, that all known losses as of the statement of condition dates have been recorded.

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For all classes of loans, management considers 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, management considers 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.

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 cost to sell, if the loan is collateral dependent. Business banking loans greater than or equal to $1.0 million are evaluated individually for impairment. Smaller balance, homogeneous loans (e.g., primarily consumer and residential mortgages) are evaluated collectively for impairment. 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 impaired loans is recognized using the cash basis method. For impaired 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 statement of condition dates based on our judgment. 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 the allowance for loan losses and recoveries are added to the allowance for loan losses.

The allowance for loan losses for all classes of Business Banking loans consists of three elements:

·              An allowance for impaired loans;

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

·              An allowance for homogenous loans based on judgmental factors.

The first element, 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. 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 cost to sell if the loan is collateral dependent.

The second element is a rolling three year average of actual losses incurred, adjusted for a loss realization period (the period of time from the event of loss to loss realization), applied to homogenous pools of loans categorized by similar risk characteristics.

The third element 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, underlying collateral and concentrations of credit.

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The allowance for loan losses for all classes of Personal Banking loans consists of three elements:

·              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 judgmental factors.

The first element, 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 for loans that have been 90 days or more delinquent.

The second element is a rolling three year average of actual losses incurred, adjusted for a loss realization period (the period of time from the event of loss to loss realization), applied to homogenous pools of loans categorized by similar risk characteristics.

The third element 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, underlying collateral and concentrations of credit.

We also have an unallocated allowance which is based on our judgment regarding economic conditions, collateral values, specific loans and industry conditions and results of bank regulatory and internal credit exams.

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

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

Personal Banking loans are charged-off or charged down when they become no more than 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, for commercial loans, or when it has been determined that the collateral value no longer supports the carrying value of the loan, for commercial real estate loans.

Valuation of Investment Securities.  Unrealized gains or losses, net of deferred taxes, on available for sale securities are reported in other comprehensive income and as a separate component of shareholders’ equity and on the statement of comprehensive income.  In general, fair value is based upon quoted market prices of identical assets, when available.  Semi-annually (as of June 30 and December 31) we receive quoted market prices from a second independent pricing service. If quoted market prices are not available, fair value is based upon valuation models that use cash flow, security structure and other observable information.  Where sufficient data is not available to produce a fair valuation, fair value is based on broker quotes for similar assets.  Broker quotes may be adjusted to ensure that financial instruments are recorded at fair value.  Adjustments may include unobservable parameters, among other things.

We conduct a quarterly review and evaluation of our 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 were in a 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.  In addition, we consider our intent to sell the investment securities currently in an

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unrealized loss position and whether it is more likely than not that we will be required to sell the security before recovery of its cost basis.  Any valuation decline that we determine to be other than temporary would require us to write down the security to fair value through a charge to earnings for the credit loss component.

Goodwill.  Goodwill is not subject to amortization but must be evaluated for impairment at least annually and possibly more frequently if certain events or changes in circumstances arise.  Under a quantitative approach, impairment testing requires that the fair value of each reporting unit be compared to its carrying amount, including goodwill.  Reporting units are identified based upon analyzing each of our individual operating segments.  A reporting unit is defined as any distinct, separately identifiable component of an operating segment for which complete, discrete financial information is available that management regularly reviews.  Determining the fair value of a reporting unit requires a high degree of subjective management judgment.  We have established June 30th of each year as the date for conducting the annual goodwill impairment assessment.  As of June 30, 2011, we, through the assistance of an external third party, performed an impairment test on goodwill.  We valued each reporting unit by using a weighted average of four valuation methodologies; comparable transaction approach, control premium approach, public market peers approach and discounted cash flow approach.  Declines in fair value could result in impairment being identified.  At June 30, 2011, we did not identify any individual reporting unit where the fair value was less than the carrying value.  No material changes have occurred since that date that would lead us to any other conclusions. Future changes in the economic environment or the operations of the operating units could cause changes to the variables used, which could give rise to declines in the estimated fair value of the reporting units.

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.  Management exercises 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 made 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.

Other Intangible Assets.  Using the purchase method of accounting for acquisitions, we are required to record the assets acquired, including identified intangible assets, and liabilities assumed at their fair values.  These fair values often involve estimates based on third party valuations, including appraisals, or internal valuations based on discounted cash flow analyses or other valuation techniques, which are inherently subjective.  Core deposit and other intangible assets are recorded in purchase accounting.  Intangible assets, which are determined to have finite lives, are amortized based on the period of estimated economic benefits received, primarily on an accelerated basis.  If it is subsequently determined that the period of economic benefit has decreased or no longer exists, accelerated amortization or impairment may occur.

Executive Summary and Comparison of Financial Condition

Total assets at March 31, 2012 were $8.069 billion, an increase of $111.3 million, or 1.4%, from $7.958 billion at December 31, 2011.  This increase in assets was due to increases in loans receivable of

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$56.4 million and cash and cash equivalents of $70.6 million, which were partially offset by a decrease in other assets of $13.6 million. The net increase in total assets resulted from a net increase in funding sources as deposits and borrowed funds increased by $89.4 million and $8.5 million, respectively.

Loans receivable increased by $56.4 million, or 1.0%, to $5.608 billion at March 31, 2012, from $5.552 billion at December 31, 2011.  Loan demand was strong during the three months ended March 31, 2012, with originations of $530.4 million.  Due to our continued efforts to expand business banking relationships our business banking loan portfolio increased by $60.8 million, or 3.3%, to $1.884 billion at March 31, 2012 from $1.824 billion at December 31, 2011, led by commercial real estate loans which increased $39.8 million, or 2.8% during the quarter.  Additionally, commercial loans increased by $21.0 million, or 5.4%. Our personal banking loan portfolio decreased by $4.4 million, or 0.1%, to $3.723 billion at March 31, 2012 from $3.728 billion at December 31, 2011.  With consumers continuing their propensity to pay down debt, home equity loans decreased by $25.8 million, or 2.4%, and consumer loans decreased by $8.1 million, or 3.3% during the quarter.  These decreases were partially offset by an increase in mortgage loans of $29.6 million, or 1.2%.

Deposit balances increased across all product types with the exception of time deposits. Total deposits increased by $89.4 million, or 1.5%, to $5.870 billion at March 31, 2012 from $5.780 billion at December 31, 2011.  Noninterest-bearing demand deposits increased by $73.8 million, or 11.2%, to $732.4 million at March 31, 2012 from $658.6 million at December 31, 2011. Interest-bearing demand deposits increased by $32.6 million, or 4.1%, to $833.3 million at March 31, 2012 from $800.7 million at December 31, 2011. Savings deposits, including insured money fund accounts, increased by $88.0 million, or 4.3%, to $2.124 billion at March 31, 2012 from $2.036 billion at December 31, 2011. Time deposits decreased by $105.0 million, or 4.6%, to $2.180 billion at March 31, 2012 from $2.285 billion at December 31, 2011.  We believe this continued movement of funds from time deposits to more liquid types of deposit accounts reflects our depositors concerns regarding potentially higher interest rates.

Borrowed funds increased by $8.5 million, or 1.0%, to $836.4 million at March 31, 2012, from $827.9 million at December 31, 2011 due to an increase in repurchase agreements. None of our FHLB advances matured during the quarter and the next scheduled maturity is in 2015.

Total shareholders’ equity at March 31, 2012 was $1.162 billion, or $11.91 per share, an increase of $7.6 million, or 0.7%, from $1.155 billion, or $11.85 per share, at December 31, 2011.  This increase was primarily attributable to net income of $15.2 million and other comprehensive income of $2.0 million, which was partially offset by cash dividends paid of $11.4 million.

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Financial institutions and their holding companies are subject to various regulatory capital requirements administered by state and federal 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 a company’s financial statements.  Under capital adequacy guidelines and the regulatory framework for prompt corrective action, financial institutions must meet specific capital guidelines that involve quantitative measures of its assets, liabilities and certain off-balance sheet items as calculated under regulatory accounting practices.  Capital amounts and classifications are also subject to qualitative judgments made by the regulators about components, risk-weighting and other factors.

Quantitative measures, established by regulation to ensure capital adequacy, require financial institutions to maintain minimum amounts and ratios (set forth in the table below) of Total and Tier I capital (as defined in the regulations) to risk-weighted assets (as defined), and of Tier I capital to average assets (as defined).  Capital ratios are presented in the tables below.  Dollar amounts in the accompanying tables are in thousands.

At March 31, 2012

					Minimum capital			Well capitalized
	Actual				Requirements			Requirements
	Amount		Ratio		Amount	Ratio		Amount	Ratio
Total capital (to risk weighted assts)
Northwest Bancshares, Inc.	$	1,161,927	23.16	%	401,391	8.00	%	501,739	10.00	%
Northwest Savings Bank	999,865		20.01	%	399,685	8.00	%	499,606	10.00	%
Tier I capital (to risk weighted assets)
Northwest Bancshares, Inc.	1,098,971		21.90	%	200,696	4.00	%	301,044	6.00	%
Northwest Savings Bank	937,096		18.76	%	199,842	4.00	%	299,764	6.00	%
Tier I capital (leverage) (to average assets)
Northwest Bancshares, Inc.	1,098,971		14.03	%	235,070	3.00	%	391,784	5.00	%
Northwest Savings Bank	937,096		12.01	%	234,099	3.00	% *	390,165	5.00	%

At December 31, 2011

					Minimum capital			Well capitalized
	Actual				Requirements			Requirements
	Amount		Ratio		Amount	Ratio		Amount	Ratio
Total capital (to risk weighted assts)
Northwest Bancshares, Inc.	$	1,155,490	23.14	%	399,503	8.00	%	499,378	10.00	%
Northwest Savings Bank	982,156		19.78	%	397,302	8.00	%	496,627	10.00	%
Tier I capital (to risk weighted assets)
Northwest Bancshares, Inc.	1,092,787		21.88	%	199,751	4.00	%	299,627	6.00	%
Northwest Savings Bank	919,807		18.52	%	198,651	4.00	%	297,976	6.00	%
Tier I capital (leverage) (to average assets)
Northwest Bancshares, Inc.	1,092,787		13.98	%	234,551	3.00	%	390,918	5.00	%
Northwest Savings Bank	919,807		11.81	%	233,573	3.00	% *	389,288	5.00	%

* The FDIC has indicated that the most highly rated institutions which meet certain criteria will be required to maintain a ratio of 3%, and all other institutions will be required to maintain an additional capital cushion of 100 to 200 basis points.  As of March 31, 2012, Northwest Savings Bank has not been advised of any additional requirements in this regard.

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We are required to maintain a sufficient level of liquid assets, as determined by management and reviewed for adequacy by the FDIC and the Pennsylvania Department of Banking during their regular examinations.  Northwest monitors its liquidity position primarily using the ratio of unencumbered available-for-sale liquid assets as a percentage of deposits and borrowings (“liquidity ratio”).  Northwest’s liquidity ratio at March 31, 2012 was 23.3%.  We adjust liquidity levels in order to meet funding needs for deposit outflows, payment of real estate taxes and insurance on mortgage loan escrow accounts, repayment of borrowings and loan commitments.  As of March 31, 2012 Northwest had $1.795 billion of additional borrowing capacity available with the FHLB, including $150.0 million on an overnight line of credit, as well as $193.6 million of borrowing capacity available with the Federal Reserve Bank and $80.0 million with two correspondent banks.

We paid $11.4 million and $10.7 million in cash dividends during the quarters ended March 31, 2012 and 2011, respectively.  The increase is the result of an increase of $0.02 per share in the dividends paid.  The common stock dividend payout ratio (dividends declared per share divided by net income per share) was 74.4% and 62.5% for the quarters ended March 31, 2012 and 2011, respectively, on dividends of $0.12 per share and $0.10 per share, respectively.  The Board of Directors declared a dividend of $0.12 per share payable on May 17, 2012 to shareholders of record as of May 3, 2012.  This represents the 70th consecutive quarter we have paid a cash dividend.

Nonperforming Assets

The following table sets forth information with respect to the Company’s nonperforming assets.  Nonaccrual loans are those loans on which the accrual of interest has ceased.  Loans are automatically placed on nonaccrual status when they are 90 days or more contractually delinquent and may also be placed on nonaccrual status even if not 90 days or more delinquent but other conditions exist.  Other nonperforming assets represent property acquired by the Company 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.

	March 31, 2012			December 31, 2011
	(Dollars in Thousands)
Loans accounted for on a nonaccrual basis
Personal Banking:
Residential mortgage loans	$	28,696		28,221
Home equity loans	9,100			9,560
Other consumer loans	1,983			2,667
Total Personal Banking	39,779			40,448
Business Banking:
Commercial real estate loans	58,400			62,494
Commercial loans	26,834			28,163
Total Business Banking	85,234			90,657
Total	125,013			131,105
Total nonaccrual loans as a percentage of total loans	2.23		%	2.36	%
Total real estate acquired through foreclosure and other real estate owned (“REO”)	28,895			26,887
Total nonperforming assets	$	153,908		157,992
Total nonperforming assets as a percentage of total assets	1.91		%	1.99	%

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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.  The amount of impairment is required to be 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.  If the measure of the impaired loan is less than the recorded investment in the loan, a specific allowance is allocated for the impairment.  Impaired loans at March 31, 2012 and December 31, 2011 were $175.3 million and $179.4 million, respectively.

Allowance for Loan Losses

Our Board of Directors has adopted an “Allowance for Loan 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 of our seven regions to monitor the performance and status of loans on an internal watch list.  On an on-going basis the loan officer along with the Loan Review department grades or classifies problem loans or potential problem loans based upon their knowledge of the lending relationship and other information previously accumulated.  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 subsequent categories, but which possess some weaknesses, are designated as “special mention”.  A “substandard” loan is any loan that is more than 90 days 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.

The loans that have been classified as substandard or doubtful 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 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.  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

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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 the Credit Committee on a quarterly basis.  The Credit Committee reviews the processes and documentation presented, reviews the concentration of credit by industry and customer, lending products, 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.

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 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 consistent methodology each period when analyzing the adequacy of the allowance for loan losses and the related provision for loan losses.  As part of the analysis as of March 31, 2012, we considered the economic conditions in our markets, such as the unemployment and bankruptcy levels as well as changes in real estate collateral values.  In addition, we considered the overall trends in asset quality, specific reserves already established for criticized loans, historical loss rates and collateral valuations.  As a result of this analysis, the allowance for loan losses increased $1.8 million to $72.9 million, or 1.30% of total loans, at March 31, 2012 from $71.1 million, or 1.28% of total loans, at December 31, 2011. The increase is primarily attributable to the increase in our business banking loan portfolio as business banking loans typically have the highest reserve factors and historical loss ratios.

We also consider how the level of nonperforming loans and historical charge-offs have influenced the required amount of allowance for loan losses.  Nonperforming loans of $125.0 million or 2.23% of total loans, at March 31, 2012 decreased by $6.1 million, or 4.7%, from $131.1 million, or 2.36% of total loans, at December 31, 2011.  As a percentage of average loans, annualized net charge-offs decreased to 0.32% for the quarter ended March 31, 2012 compared to 0.52% for the quarter ended March 31, 2011.  We believe all known losses as of the balance sheet dates have been recorded.

Comparison of Operating Results for the Quarters Ended March 31, 2012 and 2011

Net income for the quarter ended March 31, 2012 was $15.2 million, or $0.16 per diluted share, a decrease of $2.1 million, or 12.0%, from $17.3 million, or $0.16 per diluted share, for the same quarter last year.  The decrease in net income resulted primarily from a decrease in net interest income of $1.6 million,

47

a decrease in noninterest income of $686,000 as well as an increase in noninterest expense of $1.9 million. Partially offsetting these items were decreases in the provision for loan losses of $957,000 and income tax expense of $1.2 million. A discussion of significant changes follows.  Annualized, net income for the quarter ended March 31, 2012 represents a 5.29% and 0.76% return on average equity and return on average assets, respectively, compared to 5.39% and 0.86% for the same quarter last year.

Interest Income

Total interest income decreased by $4.8 million, or 5.3%, to $86.2 million for the quarter ended March 31, 2012 due to both a decrease in the average yield earned on interest earning assets and a decrease in the average balance of interest earning assets.  The average yield on interest earning assets decreased to 4.70% for the quarter ended March 31, 2012 from 4.83% for the quarter ended March 31, 2011.  The average yield on all categories of interest earning assets decreased when compared to the prior year period.  Average interest earning assets decreased by $166.0 million, or 2.2%, to $7.376 billion for the quarter ended March 31, 2012 from $7.542 billion for the quarter ended March 31, 2011.

Interest income on loans decreased $2.3 million, or 2.9%, to $78.2 million for the quarter ended March 31, 2012 compared to $80.5 for the quarter ended March 31, 2011.  The average yield on loans receivable decreased to 5.63% for the quarter ended March 31, 2012 from 5.87% for the quarter ended March 31, 2011.  The decrease in average yield is primarily attributable to our variable rate loans adjusting downward as re-pricing dates occur, as well as increased competition for credit relationships.  This decrease in average yield was partially offset by an increase in the average balance of loans receivable.  The balance of average loans receivable increased by $62.8 million, or 1.1%, to $5.579 billion for the quarter ended March 31, 2012 from $5.516 billion for the quarter ended March 31, 2011. Leading this increase was growth in our business banking loan portfolio which was facilitated by our emphasis on building quality business banking relationships and modest improvements in economic conditions.  The growth in our mortgage loan portfolio was primarily the result of consumers taking advantage of historically low interest rates to refinance and consolidate other debt.

Interest income on mortgage-backed securities decreased by $2.1 million, or 30.6%, to $4.7 million for the quarter ended March 31, 2012 from $6.8 million for the quarter ended March 31, 2011.  This decrease is the result of decreases in both the average balance and average yield. The average balance of mortgage-backed securities decreased by $179.3, or 19.4%, to $747.0 million for the quarter ended March 31, 2012 from $926.3 for the quarter ended March 31, 2011 due primarily to redirecting cash flows to fund increased loan demand and the repurchase of common stock shares during 2011.  The average yield on mortgage-backed securities decreased to 2.51% for the quarter ending March 31, 2012 from 2.92% for the quarter ending March 31, 2011. The decrease in average yield resulted from variable rate securities continuing to re-price downward and the purchase of mortgage-backed securities at generally lower interest rates than the existing portfolio yield.

Interest income on investment securities decreased by $453,000, or 13.0%, to $3.0 million for the quarter ended March 31, 2012 from $3.5 million for the quarter ended March 31, 2011.  This decrease is due to decreases in both the average balance and the average yield.  The average balance of investment securities decreased by $11.7 million, or 3.3%, to $343.1 million for the quarter ended March 31, 2012 from $354.8 million for the quarter ended March 31, 2011 due primarily to called or maturing bonds. The average yield on investment securities decreased to 3.52% for the quarter ended March 31, 2012 from 3.91% for the quarter ended March 31, 2011, as a result of higher rate municipal and government agency securities maturing or being called.

Interest income on interest-earning deposits decreased by $27,000, or 6.6%, to $380,000 for the quarter ended March 31, 2012 from $407,000 for the quarter ended March 31, 2011.  This decrease is due

48

to the use of cash to fund loan demand causing the average balance of interest-earning deposits to decrease by $27.2 million, or 4.0%, to $658.7 million for the quarter ended March 31, 2012 from $685.9 million for the quarter ended March 31, 2011.  The average yield on interest-earning deposits decreased to 0.23% for the quarter ended March 31, 2012 from 0.24% for the quarter ended March 31, 2011.

Interest Expense

Interest expense decreased by $3.3 million, or 13.3%, to $20.8 million for the quarter ended March 31, 2012 from $24.1 million for the quarter ended March 31, 2011.  This decrease in interest expense was due to a decrease in the average cost of interest-bearing liabilities, which decreased to 1.38% from 1.59%, and a decrease in the average balance of interest-bearing liabilities.  Average interest-bearing liabilities decreased by $99.7 million, or 1.6%, to $6.036 billion for the quarter ended March 31, 2012 from $6.136 billion for the quarter ended March 31, 2011.  The decrease in the cost of funds resulted primarily from a decrease in the level of market interest rates which enabled us to reduce the rate of interest paid on all deposit products.  In addition, we continue to grow low cost checking, savings and insured money market accounts. The decrease in interest-bearing liabilities resulted primarily from a reduction in time deposits.

Net Interest Income

Net interest income decreased by $1.6 million, or 2.4%, to $65.4 million for the quarter ended March 31, 2012 from $67.0 million for the quarter ended March 31, 2011.  This decrease is attributable to the factors discussed above.  Despite a slight improvement in our interest rate spread to 3.31% for the quarter ended March 31, 2012 from 3.24% for the quarter ended March 31, 2011, our net interest margin decreased 0.01% to 3.55% at March 31, 2012 which resulted from a decrease in total interest-earning assets of $166.0 million, or 2.2%.

Provision for Loan Losses

The provision for loan losses decreased by $957,000, or 13.2%, to $6.3 million for the quarter ended March 31, 2012 from $7.2 million for the quarter ended March 31, 2011.  This decrease is primarily due to reductions in some of the loss factors used to determine the reserve requirement for loans collectively evaluated for impairment and improved credit quality. At March 31, 2012, classified assets decreased $12.5 million, or 4.5%, and loans 90 days or more delinquent decreased $34.6 million, or 27.8%, compared to March 31, 2011.  Partially offsetting these factors was an increase in loans receivable of $56.4 million, or 1.0%, and the downgrade of a Maryland commercial real estate loan requiring a $1.9 million specific reserve.

In determining the amount of the current period provision, we considered the current economic conditions, including unemployment levels and bankruptcy filings, and changes in real estate values, the impact of these factors on the quality of our loan portfolio and historical loss factors.  Net charge-offs for the quarter ended March 31, 2012 were $4.5 million compared to $7.2 million for the quarter ended March 31, 2011.  Annualized net charge-offs to average loans decreased to 0.32% for the quarter ended March 31, 2012 from 0.52% for the quarter ended March 31, 2011. 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.  We believe, to the best of our knowledge, that all known losses as of the balance sheet dates have been recorded.

Noninterest Income

Noninterest income decreased by $686,000, or 4.8%, to $13.6 million for the quarter ended March 31, 2012 from $14.3 million for the quarter ended March 31, 2011.  The decrease is primarily attributable an increase on the loss of real estate owned and a decrease in service charges and fees. Loss on real estate owned increased by $1.0 million, to $1.1 million for the quarter ended March 31, 2012 due to the

49

management of our inventory of foreclosed properties, resulting in losses on the sale of properties and write-downs on some of the remaining properties.  Service charges and fees decreased by $503,000, or 5.6%, to $8.4 million for the quarter ended March 31, 2012 from $8.9 million for the quarter ended March 31, 2011 due to lower NSF and overdraft income. Partially offsetting these decreases were increases in insurance commission income and mortgage banking income.  Insurance commission income increased by $338,000, or 24.5%, to $1.7 million for the quarter ended March 31, 2012 from $1.4 million for the quarter ended March 31, 2011 due to the growth of our employee benefits subsidiary.  Mortgage banking income increased by $334,000, or 169.5%, to $531,000 for the quarter ended March 31, 2012 from $197,000 for the quarter ended March 31, 2011.  This increase is due to increased sales of residential mortgage loans into the secondary market.

Noninterest Expense

Noninterest expense increased by $1.9 million, or 3.8%, to $51.3 million for the quarter ended March 31, 2012 from $49.4 million for the quarter ended March 31, 2011.  This increase is primarily the result of increases in compensation and employee benefits expense and professional services.  Compensation and employee benefits expense increased by $2.3 million, or 9.2%, to $27.8 million for the quarter ended March 31, 2012 from $25.5 million for the quarter ended March 31, 2011.  This increase is primarily attributable to increased staffing levels and increases in pension expense and health insurance costs.  We have added 77 full-time equivalent employees compared to last year primarily in the areas of commercial lending, loan servicing, credit review and regulatory compliance.  Professional services increased by $441,000, or 35.1%, to $1.7 million for the quarter ended March 31, 2012 from $1.3 million for the quarter ended March 31, 2011 primarily due to our ongoing efforts to improve compliance and satisfy the conditions of the FDIC Consent Order.  These increases were partially offset by decreases in federal deposit insurance premiums and premises and occupancy costs.  Federal deposit insurance premiums decreased by $807,000, or 33.3%, to $1.6 million for the quarter ended March 31, 2012 from $2.4 million for the quarter ended March 31, 2011. This decrease was due to the new assessment formula which calculates premiums based on assets rather than deposits.  Premises and occupancy costs decreased by $443,000, or 7.2%, to $5.7 million for the quarter ended March 31, 2012 from $6.2 million for the quarter ended March 31, 2011 primarily due to lower utility and snow removal costs because of the mild winter.

Income Taxes

The provision for income taxes for the quarter ended March 31, 2012 decreased by $1.2 million, or 15.9%, to $6.3 million, compared to the same period last year.  This decrease in income tax is primarily a result of a decrease in income before income taxes of $3.3 million, or 13.2%.  Our effective tax rate for the quarter ended March 31, 2012 was 29.3% compared to 30.3% for the prior year period.  We do not anticipate our effective tax rate to change substantially during the year.

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Average Balance Sheet

(Dollars in thousands)

The following table sets forth certain information relating to the Company’s average balance sheet and reflects the average yield on assets and average cost of liabilities for the periods indicated.  Such yields and costs are derived by dividing income or expense by the average balance of assets or liabilities, respectively, for the periods presented.  Average balances are calculated using daily averages.

	Quarter ended March 31,
	2012					2011
				Avg.					Avg.
	Average			Yield/		Average			Yield/
	Balance		Interest	Cost (g)		Balance		Interest	Cost (g)
Assets:
Interest-earning assets:
Loans receivable (a) (b) (includes FTE adjustments of $532 and $390, respectively)	$	5,579,071	78,691	5.67	%	$	5,516,254	80,847	5.89	%
Mortgage-backed securities (c)	746,954		4,691	2.51	%	926,349		6,756	2.92	%
Investment securities (c) (includes FTE adjustments of $1,317 and $1,665, respectively)	343,059		4,336	5.06	%	354,786		5,128	5.78	%
FHLB stock	48,246		—	—		58,845		—	—
Other interest-earning deposits	658,747		380	0.23	%	685,864		407	0.24	%
Total interest-earning assets (includes FTE adjustments of $1,849 and $2,045, respectively)	7,376,077		88,098	4.80	%	7,542,098		93,138	4.96	%
Noninterest earning assets (d)	615,734					592,981
Total assets	$	7,991,811				$	8,135,079
Liabilities and shareholders’ equity:
Interest-bearing liabilities:
Savings accounts	$	1,100,312	1,106	0.40	%	$	1,063,696	1,429	0.55	%
Interest-bearing demand accounts	785,935		227	0.12	%	773,633		232	0.12	%
Money market accounts	976,194		965	0.40	%	915,768		1,155	0.51	%
Certificate accounts	2,236,823		10,646	1.91	%	2,431,952		13,247	2.21	%
Borrowed funds (e)	833,843		6,477	3.12	%	847,784		6,584	3.15	%
Junior subordinated debentures	103,094		1,422	5.46	%	103,094		1,405	5.45	%
Total interest-bearing liabilities (f)	6,036,201		20,843	1.38	%	6,135,927		24,052	1.59	%
Noninterest bearing liabilities	801,157					701,633
Total liabilities	6,837,358					6,837,560
Shareholders’ equity	1,154,453					1,297,519
Total liabilities and shareholders’ equity	$	7,991,811				$	8,135,079
Net interest income/ Interest rate spread			67,255	3.42	%			69,086	3.37	%
Net interest-earning assets/ Net interest margin	$	1,339,876		3.65	%	$	1,406,171		3.66	%
Ratio of interest-earning assets to interest-bearing liabilities	1.22X					1.23X

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

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

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

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

(e) Average balances include FHLB borrowings, securities sold under agreements to repurchase and other borrowings.

(f) Balances include noninterest-bearing checking accounts.

(g) Annualized. Shown on a fully tax-equivalent basis (“FTE”). The FTE basis adjusts for the tax benefit of income on certain tax exempt loans and investments using the federal statutory rate of 35% for each period presented. We believe this measure to be the preferred industry measurement of net interest income and provides relevant comparison between taxable and non-taxable amounts. GAAP basis yields were: Loans — 5.63% and 5.87%; respectively, Investment securities — 3.52% and 3.91%; respectively, interest-earning assets — 4.70% and 4.83%; respectively. GAAP basis net interest rate spreads were 3.31% and 3.24%, respectively and GAAP basis net interest margins were 3.55% and 3.56%, respectively.

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Rate/ Volume Analysis

(Dollars in Thousands)

The following table represents the extent to which changes in interest rates and changes in the volume of interest-earning assets and interest-bearing liabilities have affected interest income and interest expense during the periods indicated.  Information is provided in each category with respect to (i) changes attributable to changes in volume (changes in volume multiplied by prior rate), (ii) changes attributable to changes in rate (changes in rate multiplied by prior volume), and (iii) net change.  Changes that cannot be attributed to either rate or volume have been allocated to both rate and volume. 

Quarter ended March 31, 2012 and 2011

						Net
	Rate			Volume		Change
Interest earning assets:
Loans	$	(3,081	)	925		(2,156	)
Mortgage-backed securities	(848		)	(1,217	)	(2,065	)
Investment securities	(624		)	(168	)	(792	)
FHLB stock	—			—		—
Other interest-earning deposits	(11		)	(16	)	(27	)
Total interest-earning assets	(4,564		)	(476	)	(5,040	)
Interest-bearing liabilities:
Savings accounts	(373		)	50		(323	)
Now accounts	(10		)	5		(5	)
Money market demand accounts	(266		)	76		(190	)
Certificate accounts	(1,633		)	(968	)	(2,601	)
Borrowed funds	(34		)	(73	)	(107	)
Debentures	17			—		17
Total interest-bearing liabilities	(2,299		)	(910	)	(3,209	)
Net change in net interest income	$	(2,265	)	434		(1,831	)

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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

As the holding company for a savings bank, one of our primary market risks is interest rate risk.  Interest rate risk is the sensitivity of net interest income to variations in interest rates over a specified time period.  The sensitivity results from differences in the time periods in which interest rate sensitive assets and liabilities mature or re-price.  We attempt to control interest rate risk by matching, within acceptable limits, the re-pricing periods of assets and liabilities.  We have attempted to limit our exposure to interest sensitivity by increasing core deposits, enticing customers to extend certificates of deposit maturities, borrowing funds with fixed-rates and longer maturities and by shortening the maturities of our assets by emphasizing the origination of more short-term fixed rate loans and adjustable rate loans. We also continue to sell a portion of the long-term, fixed-rate mortgage loans that we originate.  In addition, we purchase shorter term or adjustable-rate investment securities and adjustable-rate mortgage-backed securities.

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

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

In an effort to assess market risk, we utilize a simulation model to determine the effect of immediate incremental increases and decreases in interest rates on net income and the market value of equity.  Certain assumptions are made regarding loan prepayments and decay rates of passbook and NOW accounts.  Because it is difficult 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 income simulation.  Given a parallel shift of 2% in interest rates, the estimated net income may not decrease by more than 20% within a one-year period.

Market value of equity simulation.  The market value of equity is the present value of assets and liabilities.  Given a parallel shift of 2% in interest rates, the market value of equity may not decrease by more than 30% of total shareholders’ equity.

53

The following table illustrates the simulated impact of a 1%, 2% or 3% upward or 1% downward movement in interest rates on net income, return on average equity, earnings per share and market value of equity.  This analysis was prepared assuming that interest-earning asset and interest-earning liability levels at March 31, 2012 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 March 31, 2012 levels.

	Increase									Decrease
Parallel shift in interest rates over the next 12 months	1.0		%	2.0		%	3.0		%	1.0		%
Projected percentage increase/ (decrease) in net income	5.5		%	7.4		%	5.7		%	(3.0		)%
Projected increase/ (decrease) in return on average equity	5.3		%	7.1		%	4.8		%	(3.0		)%
Projected increase/ (decrease) in earnings per share	$	0.04		$	0.06		$	0.04		$	(0.02	)
Projected percentage increase/ (decrease) in market value of equity	(6.8		)%	(15.1		)%	(23.0		)%	(4.6		)%

The figures included in the table above represent projections that were computed based upon certain assumptions including prepayment rates and decay rates.  These assumptions are inherently uncertain and, as a result, 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.

ITEM 4. CONTROLS AND PROCEDURES

Under the supervision of and with the participation of management, including the Principal Executive Officer and Principal Financial Officer, we evaluated the effectiveness of the design and operation of its disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act) as of the end of the period covered by this quarterly report (the “Evaluation Date”).  Based upon that evaluation, the Principal Executive Officer and Principal Financial Officer concluded that, as of the Evaluation Date, these disclosure controls and procedures were effective.

There were no changes in the internal controls over financial reporting during the period covered by this report or in other factors that have materially affected, or are reasonably likely to materially affect the internal control over financial reporting.

PART II.                OTHER INFORMATION

Item 1. Legal Proceedings

We 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 the financial statements.

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Item 1A.  Risk Factors

There are no material changes to the risk factors as previously discussed in Item 1A, to Part I of our 2011 Annual report on Form 10-K.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

a.)Not applicable.

b.)Not applicable.

c.)The following table discloses information regarding the repurchase of shares of common stock during the quarter ending March 31, 2012:

Month	Number of shares purchased	Average price paid per share		Total number of shares purchased as part of a publicly announced repurchase plan (1)	Maximum number of shares yet to be purchased under the plan (1)
January	—	$	—	—	1,157,747
February	—	—		—	1,157,747
March	—	—		—	1,157,747
	—	$	—

Month	Number of shares purchased	Average price paid per share		Total number of shares purchased as part of a publicly announced repurchase plan (2)	Maximum number of shares yet to be purchased under the plan (2)
January	—	$	—	—	4,750,000
February	—	—		—	4,750,000
March	—	—		—	4,750,000
	—	$	—

(1)  Reflects program for 5,150,000 shares announced August 10, 2011. 

(2)  Reflects program for 4,750,000 shares announced September 26, 2011. 

Item 3. Defaults Upon Senior Securities

Not applicable.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

Not applicable.

Item 6. Exhibits

31.1Certification of the Chief Executive Officer pursuant to Rule 13a-15 or 15d-15 of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

55

31.2Certification of the Chief Financial Officer pursuant to Rule 13a-15 or 15d-15 of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1Certification of the Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101.INS	XBRL Instance Document
101.SCH	XBRL Taxonomy Extension Schema Document
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document
101.LAB	XBRL Taxonomy Extension Label Linkbase
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document

56

Signature

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

		NORTHWEST BANCSHARES, INC.
		(Registrant)
Date:	May 8, 2012	By:	/s/ William J. Wagner
			William J. Wagner
			President and Chief Executive Officer
			(Duly Authorized Officer)
Date:	May 8, 2012	By:	/s/ Gerald J. Ritzert
			Gerald J. Ritzert
			Controller
			(Principal Accounting Officer of the Registrant)

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EX-31.1

Exhibit 31.1

Certification

I, William J. Wagner, certify that:

1.I have reviewed this quarterly report on Form 10-Q of Northwest Bancshares, Inc.;

2.Based on my knowledge, this report does not contain any untrue statements 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 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 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.

May 8, 2012	/s/ William J. Wagner
Date	William J. Wagner
	Chief Executive Officer

EX-31.2

Exhibit 31.2

Certification

I, William W. Harvey, Jr., certify that:

1.I have reviewed this quarterly report on Form 10-Q of Northwest Bancshares, Inc.;

2.Based on my knowledge, this report does not contain any untrue statements 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 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 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.

May 8, 2012	/s/ William W. Harvey, Jr.
Date	William W. Harvey, Jr.
	Chief Financial Officer

EX-32.1

Exhibit 32.1

Certification by the Chief Executive Officer and Chief Financial Officer

The undersigned officers of Northwest Bancshares, Inc. (the “Company”) hereby certify that, to the best of their knowledge:

1.The Company’s quarterly report on Form 10-Q for the period ended March 31, 2012 (the “Report”) fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934, and

2.The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

May 8, 2012	/s/ William J. Wagner
Date	William J. Wagner
	Chief Executive Officer
May 8, 2012	/s/ William W. Harvey, Jr.
Date	William W. Harvey, Jr.
	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.

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Investment securities and impairment of investment securities (Details 6) (USD $)	3 Months Ended
	Mar. 31, 2012	Dec. 31, 2011	Mar. 31, 2011	Dec. 31, 2010
Book value, fair value, unrealized losses and other-than-temporary impairment recorded in earnings
Book Value	$ 21,194,000
Fair Value	919,578,000	908,349,000
Unrealized Gain/ (Loss)	(6,872,000)	(6,210,000)
Impairment reocrded in current period earnings	238,000
Total impairment recorded in prior period earnings	(16,620,000)	(16,382,000)	(15,445,000)	(15,445,000)
Non-agency CMOs
Marketable securities
Number of investments	10
Book value, fair value, unrealized losses and other-than-temporary impairment recorded in earnings
Book Value	9,303,000
Fair Value	9,039,000
Unrealized Gain/ (Loss)	(264,000)
Total impairment recorded in prior period earnings	(7,546,000)
Non-agency CMOs | AMAC 2003-6 2A2
Book value, fair value, unrealized losses and other-than-temporary impairment recorded in earnings
Book Value	323,000
Fair Value	331,000
Unrealized Gain/ (Loss)	8,000
Impairment reocrded in current period earnings	(238,000)
Non-agency CMOs | AMAC 2003-6 2A8
Book value, fair value, unrealized losses and other-than-temporary impairment recorded in earnings
Book Value	667,000
Fair Value	686,000
Unrealized Gain/ (Loss)	19,000
Non-agency CMOs | AMAC 2003-7 A3
Book value, fair value, unrealized losses and other-than-temporary impairment recorded in earnings
Book Value	395,000
Fair Value	399,000
Unrealized Gain/ (Loss)	4,000
Non-agency CMOs | BOAMS 2005-11 1A8
Book value, fair value, unrealized losses and other-than-temporary impairment recorded in earnings
Book Value	1,501,000
Fair Value	1,629,000
Unrealized Gain/ (Loss)	128,000
Total impairment recorded in prior period earnings	(146,000)
Non-agency CMOs | CWALT 2005-J14 A3
Book value, fair value, unrealized losses and other-than-temporary impairment recorded in earnings
Book Value	4,318,000
Fair Value	4,011,000
Unrealized Gain/ (Loss)	(307,000)
Impairment reocrded in current period earnings	(238,000)
Total impairment recorded in prior period earnings	(676,000)
Non-agency CMOs | CFSB 2003-17 2A2
Book value, fair value, unrealized losses and other-than-temporary impairment recorded in earnings
Book Value	615,000
Fair Value	625,000
Unrealized Gain/ (Loss)	10,000
Non-agency CMOs | WAMU 2003-S2 A4
Book value, fair value, unrealized losses and other-than-temporary impairment recorded in earnings
Book Value	461,000
Fair Value	470,000
Unrealized Gain/ (Loss)	9,000
Non-agency CMOs | CMLTI 2005-10 1A5B
Book value, fair value, unrealized losses and other-than-temporary impairment recorded in earnings
Book Value	58,000
Fair Value	3,000
Unrealized Gain/ (Loss)	(55,000)
Total impairment recorded in prior period earnings	(3,531,000)
Non-agency CMOs | SARM 2005-21 4A2
Book value, fair value, unrealized losses and other-than-temporary impairment recorded in earnings
Book Value	23,000
Fair Value	16,000
Unrealized Gain/ (Loss)	(7,000)
Total impairment recorded in prior period earnings	(3,193,000)
Non-agency CMOs | WFMBS 2003-B A2
Book value, fair value, unrealized losses and other-than-temporary impairment recorded in earnings
Book Value	942,000
Fair Value	869,000
Unrealized Gain/ (Loss)	(73,000)
One of non-agency collateralized mortgage obligations
Marketable securities
Number of investments	1
Book value, fair value, unrealized losses and other-than-temporary impairment recorded in earnings
Book Value	9,300,000
Fair Value	9,000,000
Total impairment recorded in prior period earnings	(238,000)
Other nine of non-agency collateralized mortgage obligations
Marketable securities
Number of investments	9
Book value, fair value, unrealized losses and other-than-temporary impairment recorded in earnings
Book Value	5,000,000
Fair Value	$ 5,000,000

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Earnings Per Share (Details 2) (USD $) In Thousands, except Share data, unless otherwise specified	3 Months Ended
	Mar. 31, 2012	Mar. 31, 2011
Earnings Per Share
Net income	$ 15,181	$ 17,253
Weighted average common shares outstanding	94,115,522	106,571,262
Dilutive potential shares due to effect of stock options	549,811	687,058
Total weighted average common shares and dilutive potential shares	94,665,333	107,258,320
Basic earnings per share (in dollars per share)	$ 0.16	$ 0.16
Diluted earnings per share (in dollars per share)	$ 0.16	$ 0.16

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Loans receivable (Details 7) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2012	Dec. 31, 2011	Mar. 31, 2011
Loan delinquencies
30-59 Days Delinquent	$ 55,598	$ 58,658
60-89 Days Delinquent	9,441	20,449
90 Days or Greater Delinquent	90,190	95,836
Total Delinquency	155,329	174,943
Current	5,452,603	5,376,576
Total loans	5,607,932	5,551,519	5,551,519
Personal Banking
Loan delinquencies
30-59 Days Delinquent	39,354	45,951
60-89 Days Delinquent	4,862	12,369
90 Days or Greater Delinquent	39,779	40,448
Total Delinquency	83,995	98,768
Current	3,639,467	3,629,073
Total loans	3,723,462	3,727,841	3,727,841
Personal Banking | Residential mortgage loans
Loan delinquencies
30-59 Days Delinquent	29,414	33,671
60-89 Days Delinquent	1,466	8,629
90 Days or Greater Delinquent	28,696	28,221
Total Delinquency	59,576	70,521
Current	2,367,367	2,326,845
Total loans	2,426,933	2,397,366	2,397,366
Personal Banking | Home equity loans
Loan delinquencies
30-59 Days Delinquent	7,086	7,426
60-89 Days Delinquent	2,313	1,953
90 Days or Greater Delinquent	9,100	9,560
Total Delinquency	18,499	18,939
Current	1,040,439	1,065,847
Total loans	1,058,938	1,084,786	1,084,786
Personal Banking | Other consumer loans
Loan delinquencies
30-59 Days Delinquent	2,854	4,854
60-89 Days Delinquent	1,083	1,787
90 Days or Greater Delinquent	1,983	2,667
Total Delinquency	5,920	9,308
Current	231,671	236,381
Total loans	237,591	245,689	245,689
Business Banking
Loan delinquencies
30-59 Days Delinquent	16,344	12,707
60-89 Days Delinquent	4,579	8,080
90 Days or Greater Delinquent	50,411	55,388
Total Delinquency	71,334	76,175
Current	1,813,136	1,747,503
Total loans	1,884,470	1,823,678	1,823,678
Business Banking | Commercial real estate
Loan delinquencies
30-59 Days Delinquent	9,275	10,680
60-89 Days Delinquent	3,203	3,122
90 Days or Greater Delinquent	34,601	44,603
Total Delinquency	47,079	58,405
Current	1,428,497	1,377,362
Total loans	1,475,576	1,435,767	1,435,767
Business Banking | Commercial loans
Loan delinquencies
30-59 Days Delinquent	7,069	2,027
60-89 Days Delinquent	1,376	4,958
90 Days or Greater Delinquent	15,810	10,785
Total Delinquency	24,255	17,770
Current	384,639	370,141
Total loans	$ 408,894	$ 387,911	$ 387,911

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Pension and Other Post-retirement Benefits (in thousands): (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2012	Mar. 31, 2011
Pension Plans
Components of net periodic pension cost
Service cost	$ 1,858	$ 1,428
Interest cost	1,432	1,363
Expected return on plan assets	(1,948)	(1,502)
Amortization of prior service cost	(40)	(40)
Amortization of net loss	690	169
Net periodic benefit cost	1,992	1,418
Other Post-retirement Benefits
Components of net periodic pension cost
Interest cost	17	21
Amortization of net loss	12	13
Net periodic benefit cost	$ 29	$ 34

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Loans receivable (Details 5) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2012	Dec. 31, 2011
Impaired loans by portfolio segment and by class of financing receivable
Loans collectively evaluated for impairment	$ 5,540,254	$ 5,484,508
Loans individually evaluated for impairment	67,678	67,011
Related impairment reserve	6,032	4,544
With related impairment reserve
Impaired loans by portfolio segment and by class of financing receivable
Loans individually evaluated for impairment	20,948	21,473
No related impairment reserve
Impaired loans by portfolio segment and by class of financing receivable
Loans individually evaluated for impairment	46,730	45,538
Personal Banking
Impaired loans by portfolio segment and by class of financing receivable
Loans collectively evaluated for impairment	3,723,462	3,727,841
Personal Banking | Residential mortgage loans
Impaired loans by portfolio segment and by class of financing receivable
Loans collectively evaluated for impairment	2,426,933	2,397,366
Personal Banking | Home equity loans
Impaired loans by portfolio segment and by class of financing receivable
Loans collectively evaluated for impairment	1,058,938	1,084,786
Personal Banking | Other consumer loans
Impaired loans by portfolio segment and by class of financing receivable
Loans collectively evaluated for impairment	237,591	245,689
Business Banking
Impaired loans by portfolio segment and by class of financing receivable
Loans collectively evaluated for impairment	1,816,792	1,756,667
Loans individually evaluated for impairment	67,678	67,011
Related impairment reserve	6,032	4,544
Business Banking | With related impairment reserve
Impaired loans by portfolio segment and by class of financing receivable
Loans individually evaluated for impairment	20,948	21,473
Business Banking | No related impairment reserve
Impaired loans by portfolio segment and by class of financing receivable
Loans individually evaluated for impairment	46,730	45,538
Business Banking | Commercial real estate
Impaired loans by portfolio segment and by class of financing receivable
Loans collectively evaluated for impairment	1,432,081	1,395,634
Loans individually evaluated for impairment	43,495	40,133
Related impairment reserve	4,918	3,025
Business Banking | Commercial real estate | With related impairment reserve
Impaired loans by portfolio segment and by class of financing receivable
Loans individually evaluated for impairment	16,334	15,576
Business Banking | Commercial real estate | No related impairment reserve
Impaired loans by portfolio segment and by class of financing receivable
Loans individually evaluated for impairment	27,161	24,557
Business Banking | Commercial loans
Impaired loans by portfolio segment and by class of financing receivable
Loans collectively evaluated for impairment	384,711	361,033
Loans individually evaluated for impairment	24,183	26,878
Related impairment reserve	1,114	1,519
Business Banking | Commercial loans | With related impairment reserve
Impaired loans by portfolio segment and by class of financing receivable
Loans individually evaluated for impairment	4,614	5,897
Business Banking | Commercial loans | No related impairment reserve
Impaired loans by portfolio segment and by class of financing receivable
Loans individually evaluated for impairment	$ 19,569	$ 20,981

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Business Segments (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2012 segment office	Mar. 31, 2011	Dec. 31, 2011
Business Segments
Number of reportable business segments	2
Number of consumer finance offices	52
Business Segments
Interest income	$ 86,249	$ 91,092
Interest expense	20,843	24,052
Provision for loan losses	6,287	7,244
Noninterest income	13,640	14,326
Noninterest expense	51,276	49,378
Income tax expenses (benefit)	6,302	7,491
Net income	15,181	17,253
Total assets	8,069,008	8,122,204	7,957,705
Community Banking
Business Segments
Interest income	80,405	85,616
Interest expense	19,540	22,960
Provision for loan losses	5,500	6,500
Noninterest income	13,082	13,860
Noninterest expense	47,878	46,101
Income tax expenses (benefit)	6,221	7,396
Net income	15,096	17,289
Total assets	7,917,340	7,986,834
Community Banking | Business Intersegment, Eliminations
Business Segments
Interest income	748	770
Consumer Finance
Business Segments
Interest income	5,531	5,247
Interest expense	748	770
Provision for loan losses	787	744
Noninterest income	511	453
Noninterest expense	3,196	3,037
Income tax expenses (benefit)	504	477
Net income	807	672
Total assets	113,271	112,716
All Other
Business Segments
Interest income	313	229
Interest expense	555	322
Noninterest income	47	13
Noninterest expense	202	240
Income tax expenses (benefit)	(423)	(382)
Net income	(722)	(708)
Total assets	38,397	22,654
All Other | Business Intersegment, Eliminations
Business Segments
Interest income	$ (748)	$ (770)

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Disclosures About Fair Value of Financial Instruments (Details 2) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2012	Dec. 31, 2011
Assets measured at fair value on a recurring basis
Available-for-sale securities	$ 919,578	$ 908,349
Non-agency
Assets measured at fair value on a recurring basis
Available-for-sale securities	9,039
Level 1
Assets measured at fair value on a recurring basis
Available-for-sale securities	17,071
Total financial assets	815,254
Level 2
Assets measured at fair value on a recurring basis
Available-for-sale securities	894,217
Interest rate swaps	(12,789)
Total financial assets	1,118,847
Level 3
Assets measured at fair value on a recurring basis
Available-for-sale securities	8,290
Total financial assets	5,879,962
Measured on recurring basis
Assets measured at fair value on a recurring basis
Mortgage-backed securities	658,756	629,224
Total financial assets	906,789	894,712
Measured on recurring basis | Equity securities
Assets measured at fair value on a recurring basis
Available-for-sale securities	17,071	12,465
Measured on recurring basis | Debt securities
Assets measured at fair value on a recurring basis
Available-for-sale securities	243,751	266,660
Measured on recurring basis | U.S. government and agencies
Assets measured at fair value on a recurring basis
Available-for-sale securities	56	59
Measured on recurring basis | Government sponsored enterprises
Assets measured at fair value on a recurring basis
Available-for-sale securities	65,067	76,179
Measured on recurring basis | States and political subdivisions
Assets measured at fair value on a recurring basis
Available-for-sale securities	158,969	169,288
Measured on recurring basis | Corporate
Assets measured at fair value on a recurring basis
Available-for-sale securities	19,659	21,134
Measured on recurring basis | Residential mortgage-backed securities | GNMA
Assets measured at fair value on a recurring basis
Mortgage-backed securities	46,572	48,297
Measured on recurring basis | Residential mortgage-backed securities | FNMA
Assets measured at fair value on a recurring basis
Mortgage-backed securities	128,839	138,340
Measured on recurring basis | Residential mortgage-backed securities | FHLMC
Assets measured at fair value on a recurring basis
Mortgage-backed securities	69,283	72,980
Measured on recurring basis | Residential mortgage-backed securities | Non-agency
Assets measured at fair value on a recurring basis
Mortgage-backed securities	715	725
Measured on recurring basis | Collateralized mortgage obligations | GNMA
Assets measured at fair value on a recurring basis
Mortgage-backed securities	27,770	30,759
Measured on recurring basis | Collateralized mortgage obligations | FNMA
Assets measured at fair value on a recurring basis
Mortgage-backed securities	137,805	118,526
Measured on recurring basis | Collateralized mortgage obligations | FHLMC
Assets measured at fair value on a recurring basis
Mortgage-backed securities	221,023	191,049
Measured on recurring basis | Collateralized mortgage obligations | Non-agency
Assets measured at fair value on a recurring basis
Mortgage-backed securities	9,039	9,924
Measured on recurring basis | Collateralized mortgage obligations | SBA
Assets measured at fair value on a recurring basis
Mortgage-backed securities	17,710	18,624
Measured on recurring basis | Interest rate swaps
Assets measured at fair value on a recurring basis
Interest rate swaps	(12,789)	(13,637)
Measured on recurring basis | Level 1
Assets measured at fair value on a recurring basis
Total financial assets	17,071	12,465
Measured on recurring basis | Level 1 | Equity securities
Assets measured at fair value on a recurring basis
Available-for-sale securities	17,071	12,465
Measured on recurring basis | Level 2
Assets measured at fair value on a recurring basis
Mortgage-backed securities	658,756	629,224
Total financial assets	881,428	872,590
Measured on recurring basis | Level 2 | Debt securities
Assets measured at fair value on a recurring basis
Available-for-sale securities	235,461	257,003
Measured on recurring basis | Level 2 | U.S. government and agencies
Assets measured at fair value on a recurring basis
Available-for-sale securities	56	59
Measured on recurring basis | Level 2 | Government sponsored enterprises
Assets measured at fair value on a recurring basis
Available-for-sale securities	65,067	76,179
Measured on recurring basis | Level 2 | States and political subdivisions
Assets measured at fair value on a recurring basis
Available-for-sale securities	158,969	169,288
Measured on recurring basis | Level 2 | Corporate
Assets measured at fair value on a recurring basis
Available-for-sale securities	11,369	11,477
Measured on recurring basis | Level 2 | Residential mortgage-backed securities | GNMA
Assets measured at fair value on a recurring basis
Mortgage-backed securities	46,572	48,297
Measured on recurring basis | Level 2 | Residential mortgage-backed securities | FNMA
Assets measured at fair value on a recurring basis
Mortgage-backed securities	128,839	138,340
Measured on recurring basis | Level 2 | Residential mortgage-backed securities | FHLMC
Assets measured at fair value on a recurring basis
Mortgage-backed securities	69,283	72,980
Measured on recurring basis | Level 2 | Residential mortgage-backed securities | Non-agency
Assets measured at fair value on a recurring basis
Mortgage-backed securities	715	725
Measured on recurring basis | Level 2 | Collateralized mortgage obligations | GNMA
Assets measured at fair value on a recurring basis
Mortgage-backed securities	27,770	30,759
Measured on recurring basis | Level 2 | Collateralized mortgage obligations | FNMA
Assets measured at fair value on a recurring basis
Mortgage-backed securities	137,805	118,526
Measured on recurring basis | Level 2 | Collateralized mortgage obligations | FHLMC
Assets measured at fair value on a recurring basis
Mortgage-backed securities	221,023	191,049
Measured on recurring basis | Level 2 | Collateralized mortgage obligations | Non-agency
Assets measured at fair value on a recurring basis
Mortgage-backed securities	9,039	9,924
Measured on recurring basis | Level 2 | Collateralized mortgage obligations | SBA
Assets measured at fair value on a recurring basis
Mortgage-backed securities	17,710	18,624
Measured on recurring basis | Level 2 | Interest rate swaps
Assets measured at fair value on a recurring basis
Interest rate swaps	(12,789)	(13,637)
Measured on recurring basis | Level 3
Assets measured at fair value on a recurring basis
Total financial assets	8,290	9,657
Measured on recurring basis | Level 3 | Debt securities
Assets measured at fair value on a recurring basis
Available-for-sale securities	8,290	9,657
Measured on recurring basis | Level 3 | Corporate
Assets measured at fair value on a recurring basis
Available-for-sale securities	$ 8,290	$ 9,657

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Goodwill and Other Intangible Assets (Tables)

3 Months Ended

Mar. 31, 2012

Goodwill and Other Intangible Assets

Intangible Assets Subject to Amortization

	March 31,			December 31,
	2012			2011
Amortizable intangible assets:
Core deposit intangibles — gross	$	30,578		30,578
Acquisitions	—			—
Less: accumulated amortization	(29,748		)	(29,549	)
Core deposit intangibles — net	830			1,029
Customer and Contract intangible assets — gross	3,779			3,779
Less: accumulated amortization	(2,781		)	(2,685	)
Customer and Contract intangible assets — net	$	998		1,094

Actual aggregate amortization expense, as well as estimated aggregate amortization expense

For the three months ended March 31, 2012	$	295
For the three months ended March 31, 2011	491
For the year ending December 31, 2012	1,013
For the year ending December 31, 2013	605
For the year ending December 31, 2014	296
For the year ending December 31, 2015	140
For the year ending December 31, 2016	70
For the year ending December 31, 2017	—

Changes in Carrying Amount of Goodwill

	Community		Consumer
	Banks		Finance	Total
Balance at December 31, 2010	$	170,269	1,613	171,882
Goodwill acquired	—		—	—
Impairment losses	—		—	—
Balance at December 31, 2011	170,269		1,613	171,882
Goodwill acquired	—		—	—
Impairment losses	—		—	—
Balance at March 31, 2012	$	170,269	1,613	171,882

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Goodwill and Other Intangible Assets (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2012	Mar. 31, 2011	Mar. 31, 2012 Core Deposits	Dec. 31, 2011 Core Deposits	Mar. 31, 2012 Customer and Contract	Dec. 31, 2011 Customer and Contract
Amortizable intangible assets:
Intangible asset - gross			$ 30,578	$ 30,578	$ 3,779	$ 3,779
Less: accumulated amortization			(29,748)	(29,549)	(2,781)	(2,685)
Intangible asset - net			830	1,029	998	1,094
Amortization expense	295	491
Estimated amortization expense
For the year ending December 31, 2012	1,013
For the year ending December 31, 2013	605
For the year ending December 31, 2014	296
For the year ending December 31, 2015	140
For the year ending December 31, 2016	$ 70

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Loans receivable (Details) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2012	Dec. 31, 2011	Mar. 31, 2011	Dec. 31, 2010
Loans Receivable
Total loans receivable, gross	$ 5,694,005	$ 5,635,056
Deferred loan fees	(4,026)	(4,752)
Allowance for loan loss	(72,941)	(71,138)	(76,450)	(76,412)
Total loans, net	5,534,991	5,480,381
Residential mortgage loans
Loans Receivable
Undisbursed loan proceeds (real estate loans)	(19,032)	(12,874)
Commercial real estate
Loans Receivable
Undisbursed loan proceeds (real estate loans)	(41,007)	(45,360)
Commercial loans
Loans Receivable
Undisbursed loan proceeds (real estate loans)	(22,008)	(20,551)
Personal Banking
Loans Receivable
Total loans receivable, gross	3,746,520	3,745,467
Personal Banking | Residential mortgage loans
Loans Receivable
Total loans receivable, gross	2,449,991	2,414,992
Personal Banking | Home equity loans
Loans Receivable
Total loans receivable, gross	1,058,938	1,084,786
Personal Banking | Other consumer loans
Loans Receivable
Total loans receivable, gross	237,591	245,689
Business Banking
Loans Receivable
Total loans receivable, gross	1,947,485	1,889,589
Business Banking | Commercial real estate
Loans Receivable
Total loans receivable, gross	1,516,583	1,481,127
Business Banking | Commercial loans
Loans Receivable
Total loans receivable, gross	430,902	408,462
Unallocated
Loans Receivable
Allowance for loan loss	$ (4,530)	$ (4,416)	$ (4,298)	$ (4,471)

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Investment securities and impairment of investment securities (Details 4) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2012	Dec. 31, 2011
Marketable securities
Total Book Value	$ 21,194
Total Fair Value	127,789	164,611
Total Unrealized Losses	(6,872)	(6,210)
Corporate investments | Bank Boston Capital Trust
Marketable securities
Total Book Value	989
Total Fair Value	694
Total Unrealized Losses	(295)
Corporate investments | Huntington Capital Trust
Marketable securities
Total Book Value	1,425
Total Fair Value	1,038
Total Unrealized Losses	(387)
Corporate investments | Commercebank Capital Trust
Marketable securities
Total Book Value	887
Total Fair Value	880
Total Unrealized Losses	(7)
Corporate investments | Ocean Shore Capital Trust
Marketable securities
Total Book Value	864
Total Fair Value	700
Total Unrealized Losses	(164)
Corporate investments | I-PreTSL I
Marketable securities
Total Book Value	1,500
Total Fair Value	443
Total Unrealized Losses	(1,057)
Corporate investments | I-PreTSL II
Marketable securities
Total Book Value	1,500
Total Fair Value	605
Total Unrealized Losses	(895)
Corporate investments | PreTSL XIX
Marketable securities
Total Book Value	8,626
Total Fair Value	6,365
Total Unrealized Losses	(2,261)
Corporate investments | PreTSL XX
Marketable securities
Total Book Value	5,403
Total Fair Value	4,334
Total Unrealized Losses	$ (1,069)

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Guarantees (Details) (USD $)	Mar. 31, 2012
Guarantees
Maximum potential amount of future payments	$ 63,200,000
Maximum potential amount of future payments fully collateralized	62,000,000
Liability recognized for the obligations	$ 701,000

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Mortgage Loan Servicing (Details) (MSRs, USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2012	Mar. 31, 2011
MSRs
Servicing rights
Balance at the beginning of the period	$ 3,655	$ 5,969
Additions/ (reductions)	513	285
Amortization	(734)	(922)
Balance at the end of the period	3,434	5,332
Net Carrying Value and Fair Value
Balance at the beginning of the period	3,655	5,969
Additions/ (reductions)	513	285
Amortization	(734)	(922)
Balance at the end of the period	$ 3,434	$ 5,332

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Loans receivable (Details 6) (USD $)	3 Months Ended
	Mar. 31, 2012 contract	Mar. 31, 2011 contract
Troubled debt restructurings:
Number of contracts	6	9
Recorded investment at the time of modification	$ 3,045,000	$ 15,141,000
Current recorded investment	2,837,000	13,781,000
Current allowance	720,000	3,884,000
Troubled debt restructurings that subsequently defaulted:
Number of contracts	1	1
Recorded investment at the time of modification	575,000	9,303,000
Current recorded investment	520,000	9,180,000
Current allowance		918,000
Commercial real estate
Troubled debt restructurings that subsequently defaulted:
Number of contracts charged-off	1
Amount of contracts charged-off	282,000
Number of contracts paid off	$ 1
Amount of contracts paid off	213,000
Personal Banking
Troubled debt restructurings:
Number of contracts		1
Recorded investment at the time of modification		449,000
Current recorded investment		363,000
Current allowance		1,000
Troubled debt restructurings that subsequently defaulted:
Number of contracts	1
Recorded investment at the time of modification	449,000
Current recorded investment	361,000
Current allowance	470,000
Personal Banking | Residential mortgage loans
Troubled debt restructurings:
Number of contracts		1
Recorded investment at the time of modification		449,000
Current recorded investment		363,000
Current allowance		1,000
Troubled debt restructurings that subsequently defaulted:
Number of contracts	1
Recorded investment at the time of modification	449,000
Current recorded investment	361,000
Current allowance	470,000
Business Banking
Troubled debt restructurings:
Number of contracts	6	8
Recorded investment at the time of modification	3,045,000	14,692,000
Current recorded investment	2,837,000	13,418,000
Current allowance	720,000	3,883,000
Troubled debt restructurings that subsequently defaulted:
Number of contracts	1	1
Recorded investment at the time of modification	575,000	9,303,000
Current recorded investment	520,000	9,180,000
Current allowance		918,000
Business Banking | Commercial real estate
Troubled debt restructurings:
Number of contracts	3	3
Recorded investment at the time of modification	1,400,000	1,758,000
Current recorded investment	1,391,000	1,734,000
Current allowance	636,000	129,000
Troubled debt restructurings that subsequently defaulted:
Number of contracts	1
Recorded investment at the time of modification	575,000
Current recorded investment	520,000
Business Banking | Commercial loans
Troubled debt restructurings:
Number of contracts	3	5
Recorded investment at the time of modification	1,645,000	12,934,000
Current recorded investment	1,446,000	11,684,000
Current allowance	84,000	3,754,000
Troubled debt restructurings that subsequently defaulted:
Number of contracts		1
Recorded investment at the time of modification		9,303,000
Current recorded investment		9,180,000
Current allowance		$ 918,000

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CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2012	Mar. 31, 2011
OPERATING ACTIVITIES:
Net Income	$ 15,181	$ 17,253
Adjustments to reconcile net income to net cash provided by operating activities:
Provision for loan losses	6,287	7,244
Net loss on sale of assets	1,164	608
Net depreciation, amortization and accretion	2,467	4,108
Decrease in other assets	9,896	8,358
Increase / (decrease) in other liabilities	2,547	(4,045)
Net amortization of premium on marketable securities	(54)	(344)
Noncash impairment losses on investment securities	238
Noncash write-down of real estate owned	536	416
Origination of loans held for sale	(50,110)	(15,385)
Proceeds from sale of loans held for sale	36,982	23,215
Noncash compensation expense related to stock benefit plans	1,023	867
Net cash provided by operating activities	26,157	42,295
INVESTING ACTIVITIES:
Purchase of marketable securities available-for-sale	(77,491)	(91,695)
Purchase of marketable securities held-to-maturity	0
Proceeds from maturities and principal reductions of marketable securities available-for-sale	68,558	63,997
Proceeds from maturities and principal reductions of marketable securities held-to-maturity	14,401	43,320
Loan originations	(480,303)	(375,303)
Proceeds from loan maturities and principal reductions	427,002	405,521
Proceeds from sale of Federal Home Loan Bank stock	1,845	3,004
Proceeds from sale of real estate owned	3,263	2,866
Sale of real estate owned for investment, net	114	102
Purchase of premises and equipment	(4,346)	(1,931)
Net cash (used in)/ provided by investing activities	(46,957)	49,881
FINANCING ACTIVITIES:
Increase in deposits, net	89,436	56,201
Repayments of long-term borrowings	(17)	(50,017)
Net increase/ (decrease) in short-term borrowings	8,502	(9,701)
Increase in advances by borrowers for taxes and insurance	4,112	3,323
Cash dividends paid	(11,427)	(10,712)
Purchase of common stock for retirement		(31,074)
Proceeds from stock options exercised	786	353
Net cash (used in) / provided by financing activities	91,392	(41,627)
Net increase in cash and cash equivalents	70,592	50,549
Cash and cash equivalents at beginning of period	688,297	719,111
Net increase in cash and cash equivalents	70,592	50,549
Cash and cash equivalents at end of period	758,889	769,660
Cash and cash equivalents:
Cash and due from banks	85,050	78,446
Interest-earning deposits in other financial institutions	672,887	690,581
Federal funds sold and other short-term investments	952	633
Total cash and cash equivalents	758,889	769,660
Cash paid during the period for:
Interest on deposits and borrowings (including interest credited to deposit accounts of $11,065 and $13,731, respectively)	20,828	24,598
Income taxes	955	917
Non-cash activities:
Loan foreclosures and repossessions	6,557	2,052
Sale of real estate owned financed by the Company	$ 100	$ 140

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Guaranteed Preferred Beneficial Interests in Company's Junior Subordinated Deferrable Interest Debentures (Trust Preferred Securities) and Interest Rate Swaps (Details) (USD $)					3 Months Ended			3 Months Ended		1 Months Ended				1 Months Ended			3 Months Ended
	Mar. 31, 2012 trust	Dec. 31, 2011	Mar. 31, 2012 Interest rate swap agreements agreement	Mar. 31, 2012 Northwest Bancorp Capital Trust III Interest rate swap agreements agreement	Mar. 31, 2012 Northwest Bancorp Capital Trust III Swap 1 Interest rate swap agreements Y	Mar. 31, 2012 Northwest Bancorp Capital Trust III Swap 2 Interest rate swap agreements Y	Mar. 31, 2012 Northwest Bancorp Statutory Trust IV Interest rate swap agreements agreement	Mar. 31, 2012 Northwest Bancorp Statutory Trust IV Swap 3 Interest rate swap agreements Y	Mar. 31, 2012 Trust-Preferred Securities Y	Dec. 31, 2006 Trust-Preferred Securities Northwest Bancorp Capital Trust III	Mar. 31, 2012 Trust-Preferred Securities Northwest Bancorp Capital Trust III	Dec. 05, 2006 Trust-Preferred Securities Northwest Bancorp Capital Trust III	Mar. 31, 2012 Trust-Preferred Securities Northwest Bancorp Capital Trust III Swap 1	Dec. 31, 2006 Trust-Preferred Securities Northwest Bancorp Statutory Trust IV	Mar. 31, 2012 Trust-Preferred Securities Northwest Bancorp Statutory Trust IV	Dec. 15, 2006 Trust-Preferred Securities Northwest Bancorp Statutory Trust IV	Mar. 31, 2012 Trust-Preferred Securities Northwest Bancorp Statutory Trust IV Swap 4 Y
Guaranteed Preferred Beneficial Interest in Company's Junior Subordinated Deferrable Interest Debentures (Trust Preferred Securities) and Interest Rate Swap Agreements
Number of statutory business trusts owned	2
Cumulative trust preferred securities issued (in shares)	0	0										50,000				50,000
Cumulative trust preferred securities issued, liquidation value per preferred security (in dollars per share)												$ 1,000				$ 1,000
Cumulative trust preferred securities issued, liquidation value per preferred security												$ 50,000,000				$ 50,000,000
Variable rate basis										three-month LIBOR				three-month LIBOR
Spread on variable rate basis (as a percent)												1.38%				1.38%
Junior subordinated deferrable interest debentures held by the trusts	103,094,000	103,094,000									51,547,000				51,547,000
Maximum period for which interest payment on the subordinated debentures can be deferred (in years)									5
Number of agreements			4	2			2
Fixed rate (as a percent)						4.61%		3.85%					4.20%				4.09%
Notional amount			$ 12,800,000			$ 25,000,000		$ 25,000,000					$ 25,000,000				$ 25,000,000
Original term of swaps (in years)					5	10		7									10

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Loans receivable (Details 2) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2012	Mar. 31, 2011
Changes in allowance for losses on allocated loans receivable
Balance at the beginning of the period	$ 71,138	$ 76,412
Current period provision	6,287	7,244
Charge-offs	(5,344)	(8,009)
Recoveries	860	803
Balance at the end of the period	72,941	76,450
Changes in allowance for losses on loans receivable
Balance at the beginning of the period	71,138	76,412
Current period provision	6,287	7,244
Charge-offs	(5,344)	(8,009)
Recoveries	860	803
Balance at the end of the period	72,941	76,450
Personal Banking
Changes in allowance for losses on allocated loans receivable
Balance at the beginning of the period	22,494	20,339
Current period provision	662	4,270
Charge-offs	(3,222)	(4,692)
Recoveries	466	485
Balance at the end of the period	20,400	20,402
Changes in allowance for losses on loans receivable
Current period provision	662	4,270
Charge-offs	(3,222)	(4,692)
Recoveries	466	485
Personal Banking | Residential mortgage loans
Changes in allowance for losses on allocated loans receivable
Balance at the beginning of the period	8,482	6,854
Current period provision	327	2,286
Charge-offs	(1,043)	(1,205)
Recoveries	98	71
Balance at the end of the period	7,864	8,006
Changes in allowance for losses on loans receivable
Current period provision	327	2,286
Charge-offs	(1,043)	(1,205)
Recoveries	98	71
Personal Banking | Home equity loans
Changes in allowance for losses on allocated loans receivable
Balance at the beginning of the period	8,687	7,675
Current period provision	128	1,403
Charge-offs	(892)	(2,255)
Recoveries	24	17
Balance at the end of the period	7,947	6,840
Changes in allowance for losses on loans receivable
Current period provision	128	1,403
Charge-offs	(892)	(2,255)
Recoveries	24	17
Personal Banking | Other consumer loans
Changes in allowance for losses on allocated loans receivable
Balance at the beginning of the period	5,325	5,810
Current period provision	207	581
Charge-offs	(1,287)	(1,232)
Recoveries	344	397
Balance at the end of the period	4,589	5,556
Changes in allowance for losses on loans receivable
Current period provision	207	581
Charge-offs	(1,287)	(1,232)
Recoveries	344	397
Business Banking
Changes in allowance for losses on allocated loans receivable
Balance at the beginning of the period	44,228	51,602
Current period provision	5,511	3,147
Charge-offs	(2,122)	(3,317)
Recoveries	394	318
Balance at the end of the period	48,011	51,750
Changes in allowance for losses on loans receivable
Current period provision	5,511	3,147
Charge-offs	(2,122)	(3,317)
Recoveries	394	318
Business Banking | Commercial real estate
Changes in allowance for losses on allocated loans receivable
Balance at the beginning of the period	32,148	35,832
Current period provision	4,319	278
Charge-offs	(1,473)	(2,276)
Recoveries	297	206
Balance at the end of the period	35,291	34,040
Changes in allowance for losses on loans receivable
Current period provision	4,319	278
Charge-offs	(1,473)	(2,276)
Recoveries	297	206
Business Banking | Commercial loans
Changes in allowance for losses on allocated loans receivable
Balance at the beginning of the period	12,080	15,770
Current period provision	1,192	2,869
Charge-offs	(649)	(1,041)
Recoveries	97	112
Balance at the end of the period	12,720	17,710
Changes in allowance for losses on loans receivable
Current period provision	1,192	2,869
Charge-offs	(649)	(1,041)
Recoveries	97	112
Unallocated
Changes in allowance for losses on allocated loans receivable
Current period provision	114	(173)
Changes in allowance for losses on loans receivable
Balance at the beginning of the period	4,416	4,471
Current period provision	114	(173)
Balance at the end of the period	$ 4,530	$ 4,298

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Mortgage Loan Servicing (Tables)

3 Months Ended

Mar. 31, 2012

Mortgage Loan Servicing

Schedule of changes in MSRs

The following table shows changes in MSRs at and for the three months ended March 31, 2012 (in thousands):

				Net
				Carrying
	Servicing		Valuation	Value and
	Rights		Allowance	Fair Value
Balance at December 31, 2011	3,655		—	3,655
Additions/ (reductions)	513		—	513
Amortization	(734	)	—	(734	)
Balance at March 31, 2012	3,434		—	3,434

The following table shows changes in MSRs at and for the three months ended March 31, 2011 (in thousands):

					Net
					Carrying
	Servicing			Valuation	Value and
	Rights			Allowance	Fair Value
Balance at December 31, 2010	$	5,969		—	5,969
Additions/ (reductions)	285			—	285
Amortization	(922		)	—	(922	)
Balance at March 31, 2011	$	5,332		—	5,332

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Disclosures About Fair Value of Financial Instruments (Tables)

3 Months Ended

Mar. 31, 2012

Disclosures About Fair Value of Financial Instruments

Schedule of the carrying amount and estimated fair value of the entity's financial instruments included in the consolidated statement of financial condition

	March 31, 2012						December 31, 2011
	Carrying		Estimated				Carrying	Estimated
	amount		fair value	Level 1	Level 2	Level 3	amount	fair value
Financial assets:
Cash and cash equivalents	$	758,889	758,889	758,889	—	—	688,297	688,297
Securities available-for-sale	919,578		919,578	17,071	894,217	8,290	908,349	908,349
Securities held-to-maturity	216,956		224,630	—	224,630	—	231,389	239,412
Loans receivable, net	5,534,991		5,885,894	14,222	—	5,871,672	5,480,381	5,839,674
Accrued interest receivable	25,072		25,072	25,072	—	—	24,599	24,599
FHLB Stock	47,090		47,090	—	—	—	48,935	48,935
Total financial assets	$	7,502,576	7,861,153	815,254	1,118,847	5,879,962	7,381,950	7,749,266
Financial liabilities:
Savings and checking accounts	$	3,689,972	3,689,972	3,689,972	—	—	3,495,508	3,495,508
Time deposits	2,179,789		2,226,527	—	—	2,226,527	2,284,817	2,329,451
Borrowed funds	836,410		900,260	140,843	—	759,417	827,925	899,547
Junior subordinated debentures	103,094		115,940	—	—	115,940	103,094	116,725
Cash flow hedges - swaps	12,789		12,789	—	12,789	—	13,637	13,637
Accrued interest payable	1,119		1,119	1,119	—	—	1,104	1,104
Total financial liabilities	$	6,823,173	6,946,607	3,831,934	12,789	3,101,884	6,726,085	6,855,972

Schedule of assets measured at fair value on a recurring basis

The following table represents assets measured at fair value on a recurring basis at March 31, 2012 (in thousands):

						Total
						assets at
	Level 1		Level 2		Level 3	fair value
Equity securities	$	17,071	—		—	17,071
Debt securities:
U.S. government and agencies	—		56		—	56
Government sponsored enterprises	—		65,067		—	65,067
States and political subdivisions	—		158,969		—	158,969
Corporate	—		11,369		8,290	19,659
Total debt securities	—		235,461		8,290	243,751
Residential mortgage-backed securities:
GNMA	—		46,572		—	46,572
FNMA	—		128,839		—	128,839
FHLMC	—		69,283		—	69,283
Non-agency	—		715		—	715
Collateralized mortgage obligations:
GNMA	—		27,770		—	27,770
FNMA	—		137,805		—	137,805
FHLMC	—		221,023		—	221,023
SBA	—		17,710		—	17,710
Non-agency	—		9,039		—	9,039
Total mortgage-backed securities	—		658,756		—	658,756
Interest rate swaps	—		(12,789	)	—	(12,789	)
Total assets	$	17,071	881,428		8,290	906,789

The following table represents assets measured at fair value on a recurring basis at December 31, 2011 (in thousands):

						Total
						assets at
	Level 1		Level 2		Level 3	fair value
Equity securities	$	12,465	—		—	12,465
Debt securities:
U.S. government and agencies	—		59		—	59
Government sponsored enterprises	—		76,179		—	76,179
States and political subdivisions	—		169,288		—	169,288
Corporate	—		11,477		9,657	21,134
Total debt securities	—		257,003		9,657	266,660
Residential mortgage-backed securities:
GNMA	—		48,297		—	48,297
FNMA	—		138,340		—	138,340
FHLMC	—		72,980		—	72,980
Non-agency	—		725		—	725
Collateralized mortgage obligations:
GNMA	—		30,759		—	30,759
FNMA	—		118,526		—	118,526
FHLMC			191,049			191,049
SBA	—		18,624		—	18,624
Non-agency	—		9,924		—	9,924
Total mortgage-backed securities	—		629,224		—	629,224
Interest rate swaps	—		(13,637	)	—	(13,637	)
Total assets	$	12,465	872,590		9,657	894,712

Schedule of reconciliation of all assets and liabilities 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 quarter ended March 31, 2012 (in thousands):

	Debt
	securities
Balance at December 31, 2011	$	9,657
Total net realized investment gains/ (losses) and net change in unrealized appreciation/ (depreciation):
Included in net income as OTTI	—
Included in other comprehensive income	(1,367		)
Purchases	—
Sales	—
Transfers in to Level 3	—
Transfers out of Level 3	—
Balance at March 31, 2012	$	8,290

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 quarter ended March 31, 2011 (in thousands):

	Debt
	securities
Balance at December 31, 2010	$	9,209
Total net realized investment gains/ (losses) and net change in unrealized appreciation/ (depreciation):
Included in net income as OTTI	—
Included in other comprehensive income	102
Purchases	—
Sales	—
Transfers in to of Level 3
Transfers out of of Level 3	—
Balance at March 31, 2011	$	9,311

Schedule of fair value measurement for nonrecurring assets that had a fair market value below the carrying amount

Certain assets and liabilities are measured at fair value on a nonrecurring basis after initial recognition such as loans measured for impairment, loans held for sale and real estate owned.  The following table represents the fair value measurement for nonrecurring assets at March 31, 2012 (in thousands):

					Total
					assets at
	Level 1		Level 2	Level 3	fair value
Loans measured for impairment	$	—	—	14,916	14,916
Loans held for sale	14,222		—	—	14,222
Real estate owned	—		—	28,895	28,895
Total assets	$	14,222	—	43,811	58,033

Certain assets and liabilities are measured at fair value on a nonrecurring basis after initial recognition such as loans measured for impairment and real estate owned.  The following table represents the fair value measurement for nonrecurring assets at December 31, 2011 (in thousands):

					Total
					assets at
	Level 1		Level 2	Level 3	fair value
Loans measured for impairment	$	—	—	16,929	16,929
Real estate owned	—		—	26,887	26,887
Total assets	$	—	—	43,816	43,816

Schedule of quantitative information for Level 3 Fair Value Measurements

The table below 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 March 31, 2012 (dollar amounts in thousands):

	Fair value		Valuation techniques	Significant unobservable inputs	Range (weighted average)
Debt securities	$	8,290	Discounted cash flow	Discount margin	0.35% to 2.1% (0.72)%
				Default rates	2.00%
				Prepayment speeds	1.00% annually
Loans measured for impairment	14,916		Appraisal value (1)	N/A	N/A
Real estate owned	28,895		Appraisal value (1)	N/A	N/A

(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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Disclosures About Fair Value of Financial Instruments (Details) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2012	Dec. 31, 2011
Financial assets:
Securities available-for-sale	$ 919,578	$ 908,349
Accrued interest receivable	25,072	24,599
Financial liabilities:
Borrowed funds	836,410	827,925
Junior subordinated debentures	103,094	103,094
Level 1
Financial assets:
Cash and cash equivalents	758,889
Securities available-for-sale	17,071
Loans receivable, net	14,222
Accrued interest receivable	25,072
Total financial assets	815,254
Financial liabilities:
Savings and checking accounts	3,689,972
Borrowed funds	140,843
Accrued interest payable	1,119
Total financial liabilities	3,831,934
Level 2
Financial assets:
Securities available-for-sale	894,217
Securities held-to-maturity	224,630
Total financial assets	1,118,847
Financial liabilities:
Cash flow hedges - swaps	12,789
Total financial liabilities	12,789
Level 3
Financial assets:
Securities available-for-sale	8,290
Loans receivable, net	5,871,672
Total financial assets	5,879,962
Financial liabilities:
Time deposits	2,226,527
Borrowed funds	759,417
Junior subordinated debentures	115,940
Total financial liabilities	3,101,884
Carrying amount
Financial assets:
Cash and cash equivalents	758,889	688,297
Securities available-for-sale	919,578	908,349
Securities held-to-maturity	216,956	231,389
Loans receivable, net	5,534,991	5,480,381
Accrued interest receivable	25,072	24,599
FHLB Stock	47,090	48,935
Total financial assets	7,502,576	7,381,950
Financial liabilities:
Savings and checking accounts	3,689,972	3,495,508
Time deposits	2,179,789	2,284,817
Borrowed funds	836,410	827,925
Junior subordinated debentures	103,094	103,094
Cash flow hedges - swaps	12,789	13,637
Accrued interest payable	1,119	1,104
Total financial liabilities	6,823,173	6,726,085
Estimated fair value
Financial assets:
Cash and cash equivalents	758,889	688,297
Securities available-for-sale	919,578	908,349
Securities held-to-maturity	224,630	239,412
Loans receivable, net	5,885,894	5,839,674
Accrued interest receivable	25,072	24,599
FHLB Stock	47,090	48,935
Total financial assets	7,861,153	7,749,266
Financial liabilities:
Savings and checking accounts	3,689,972	3,495,508
Time deposits	2,226,527	2,329,451
Borrowed funds	900,260	899,547
Junior subordinated debentures	115,940	116,725
Cash flow hedges - swaps	12,789	13,637
Accrued interest payable	1,119	1,104
Total financial liabilities	$ 6,946,607	$ 6,855,972

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Loans receivable (Details 3) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2012	Dec. 31, 2011	Mar. 31, 2011	Dec. 31, 2010
Loan portfolio by portfolio segment and by class of financing receivable
Recorded investment in loans receivable	$ 5,607,932	$ 5,551,519	$ 5,551,519
Allowance for loan losses	72,941	71,138	76,450	76,412
Recorded investment in loans on nonaccrual	125,013	131,105
Recorded investment > 90 days past due and still accruing	800	510
TDRs	67,303	69,429
Personal Banking
Loan portfolio by portfolio segment and by class of financing receivable
Recorded investment in loans receivable	3,723,462	3,727,841	3,727,841
Allowance for loan losses	20,400	22,494	20,402	20,339
Recorded investment in loans on nonaccrual	39,779	40,448
Recorded investment > 90 days past due and still accruing	776	510
TDRs	806	806
Personal Banking | Residential mortgage loans
Loan portfolio by portfolio segment and by class of financing receivable
Recorded investment in loans receivable	2,426,933	2,397,366	2,397,366
Allowance for loan losses	7,864	8,482	8,006	6,854
Recorded investment in loans on nonaccrual	28,696	28,221
Recorded investment > 90 days past due and still accruing	11	12
TDRs	806	806
Personal Banking | Home equity loans
Loan portfolio by portfolio segment and by class of financing receivable
Recorded investment in loans receivable	1,058,938	1,084,786	1,084,786
Allowance for loan losses	7,947	8,687
Recorded investment in loans on nonaccrual	9,100	9,560
Recorded investment > 90 days past due and still accruing	342	221
Personal Banking | Other consumer loans
Loan portfolio by portfolio segment and by class of financing receivable
Recorded investment in loans receivable	237,591	245,689	245,689
Allowance for loan losses	4,589	5,325	5,556	5,810
Recorded investment in loans on nonaccrual	1,983	2,667
Recorded investment > 90 days past due and still accruing	423	277
Business Banking
Loan portfolio by portfolio segment and by class of financing receivable
Recorded investment in loans receivable	1,884,470	1,823,678	1,823,678
Allowance for loan losses	48,011	44,228	51,750	51,602
Recorded investment in loans on nonaccrual	85,234	90,657
Recorded investment > 90 days past due and still accruing	24
TDRs	66,497	68,623
Business Banking | Commercial real estate
Loan portfolio by portfolio segment and by class of financing receivable
Recorded investment in loans receivable	1,475,576	1,435,767	1,435,767
Allowance for loan losses	35,291	32,148	34,040	35,832
Recorded investment in loans on nonaccrual	58,400	62,494
TDRs	38,995	30,216
Business Banking | Commercial loans
Loan portfolio by portfolio segment and by class of financing receivable
Recorded investment in loans receivable	408,894	387,911	387,911
Allowance for loan losses	12,720	12,080	17,710	15,770
Recorded investment in loans on nonaccrual	26,834	28,163
Recorded investment > 90 days past due and still accruing	24
TDRs	$ 27,502	$ 30,407

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Guaranteed Preferred Beneficial Interests in Company's Junior Subordinated Deferrable Interest Debentures (Trust Preferred Securities) and Interest Rate Swaps (Tables)

3 Months Ended

Mar. 31, 2012

Guaranteed Preferred Beneficial Interests in the Company's Junior Subordinated Deferrable Interest Debentures (Trust Preferred Securities) and Interest Rate Swaps

Liability Derivatives, Included in Other Liabilities

	March 31,		December 31,
	2012		2011
Fair value	$	12,789	13,637
Notional amount	100,000		100,000
Collateral posted	12,789		13,637

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Basis of Presentation and Informational Disclosures (Details)	Mar. 31, 2012 branch
Nature of Operations
Number of banking locations (in branch)	168

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CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (Parenthetical) (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended
	Mar. 31, 2012	Mar. 31, 2011
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
Other comprehensive income, tax (in dollars)	$ (1,229)	$ (1,604)
Dividends paid, per share (in dollars per share)	$ 0.12	$ 0.10

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Basis of Presentation and Informational Disclosures (Details 2) (USD $)	3 Months Ended
	Mar. 31, 2012	Mar. 31, 2011
Compensation expense for unvested common shares which is yet to be recognized
Stock-based aggregate disclosure
Stock-based employee compensation expense	$ 1,000,000	$ 867,000
Compensation expense for unvested stock options which is yet to be recognized	12,800,000
Stock options
Stock-based aggregate disclosure
Compensation expense for unvested stock options which is yet to be recognized	$ 5,600,000

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Investment securities and impairment of investment securities (Details 7) (USD $)			3 Months Ended
	Mar. 31, 2012	Dec. 31, 2011	Mar. 31, 2012 Municipal securities party investment	Mar. 31, 2012 Municipal securities Cambridge Area JT Revenue	Mar. 31, 2012 Municipal securities West Reading general Obligation
Marketable securities
Number of investments			2
Number of third party pricing sources			2
Number of Pennsylvania municipalities issuing municipal securities			2
Minimum fair value as percentage of carrying value to compare the stated interest rate to current market rate			80.00%
Information for portfolio of municipal securities that have been in an unrealized loss position for more than 12 months
Total Book Value			$ 1,582,000	$ 595,000	$ 987,000
Total Fair Value	44,565,000	46,374,000	1,489,000	566,000	923,000
Total Fair Value			1,500,000
Total Unrealized Losses	$ (6,556,000)	$ (5,572,000)	$ (93,000)	$ (29,000)	$ (64,000)

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Earnings Per Share (Details) (Stock options, USD $)	3 Months Ended
	Mar. 31, 2011	Mar. 31, 2012 Minimum	Mar. 31, 2011 Minimum	Mar. 31, 2012 Maximum
Antidilutive securities excluded from the calculation of earnings per share
Options excluded from the calculation of earnings per share	579,793
Weighted average share price during the reporting period	$ 12.12	$ 12.10	$ 12.10	$ 12.63

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CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (USD $) In Thousands, unless otherwise specified	Mar. 31, 2012	Dec. 31, 2011
Assets
Cash and due from banks	$ 85,050	$ 94,276
Interest-earning deposits in other financial institutions	672,887	593,388
Federal funds sold and other short-term investments	952	633
Marketable securities available-for-sale (amortized cost of $894,232 and $885,408)	919,578	908,349
Marketable securities held-to-maturity (fair value of $224,630 and $239,412)	216,956	231,389
Total cash and investments	1,895,423	1,828,035
Personal Banking:
Loans held for sale	14,222	967
Residental mortgage loans	2,412,711	2,396,399
Home equity loans	1,058,938	1,084,786
Other consumer loans	237,591	245,689
Total Personal Banking	3,723,462	3,727,841
Business Banking:
Commercial real estate loans	1,475,576	1,435,767
Commercial loans	408,894	387,911
Total Business Banking	1,884,470	1,823,678
Total loans	5,607,932	5,551,519
Allowance for loan losses	(72,941)	(71,138)
Total loans, net	5,534,991	5,480,381
Federal Home Loan Bank stock, at cost	47,090	48,935
Accrued interest receivable	25,072	24,599
Real estate owned, net	28,895	26,887
Premises and equipment, net	133,599	132,152
Bank owned life insurance	134,615	133,524
Goodwill	171,882	171,882
Other intangible assets	1,828	2,123
Other assets	95,613	109,187
Total assets	8,069,008	7,957,705
Liabilities:
Noninterest-bearing demand deposits	732,361	658,560
Interest-bearing demand deposits	833,342	800,676
Savings deposits	2,124,269	2,036,272
Time deposits	2,179,789	2,284,817
Total deposits	5,869,761	5,780,325
Borrowed funds	836,410	827,925
Junior subordinated deferrable interest debentures held by trusts that issued guaranteed capital debt securities	103,094	103,094
Advances by borrowers for taxes and insurance	27,683	23,571
Accrued interest payable	1,119	1,104
Other liabilities	68,466	66,782
Total liabilities	6,906,533	6,802,801
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, 97,593,396 and 97,493,046 shares issued, respectively	976	975
Paid-in capital	660,933	659,523
Retained earnings	547,352	543,598
Unallocated common stock of Employee Stock Ownership Plan	(25,568)	(25,966)
Accumulated other comprehensive loss	(21,218)	(23,226)
Total shareholders' equity	1,162,475	1,154,904
Total liabilities and shareholders' equity	$ 8,069,008	$ 7,957,705

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Loans receivable (Details 4) (USD $) In Thousands, unless otherwise specified	3 Months Ended	12 Months Ended
	Mar. 31, 2012	Dec. 31, 2011
Composition of impaired loans by portfolio segment and by class of financing receivable
Nonaccrual loans 90 or more days delinquent	$ 90,190	$ 95,836
Nonaccrual loans less than 90 days delinquent	34,823	35,269
Loans less than 90 days delinquent reviewed for impairment	32,344	22,804
TDRs less than 90 days delinquent not included elsewhere	17,962	25,449
Total impaired loans	175,319	179,358
Average recorded investment in nonaccrual impaired loans	178,920	204,273
Interest income recognized on nonaccrual impaired loans	1,498	6,036
Personal Banking
Composition of impaired loans by portfolio segment and by class of financing receivable
Nonaccrual loans 90 or more days delinquent	39,779	40,448
TDRs less than 90 days delinquent not included elsewhere		361
Total impaired loans	39,779	40,809
Average recorded investment in nonaccrual impaired loans	41,371	42,645
Interest income recognized on nonaccrual impaired loans	251	754
Personal Banking | Residential mortgage loans
Composition of impaired loans by portfolio segment and by class of financing receivable
Nonaccrual loans 90 or more days delinquent	28,696	28,221
TDRs less than 90 days delinquent not included elsewhere		361
Total impaired loans	28,696	28,582
Average recorded investment in nonaccrual impaired loans	29,327	30,731
Interest income recognized on nonaccrual impaired loans	170	538
Personal Banking | Home equity loans
Composition of impaired loans by portfolio segment and by class of financing receivable
Nonaccrual loans 90 or more days delinquent	9,100	9,560
Total impaired loans	9,100	9,560
Average recorded investment in nonaccrual impaired loans	9,545	9,574
Interest income recognized on nonaccrual impaired loans	68	182
Personal Banking | Other consumer loans
Composition of impaired loans by portfolio segment and by class of financing receivable
Nonaccrual loans 90 or more days delinquent	1,983	2,667
Total impaired loans	1,983	2,667
Average recorded investment in nonaccrual impaired loans	2,499	2,340
Interest income recognized on nonaccrual impaired loans	13	34
Business Banking
Composition of impaired loans by portfolio segment and by class of financing receivable
Nonaccrual loans 90 or more days delinquent	50,411	55,388
Nonaccrual loans less than 90 days delinquent	34,823	35,269
Loans less than 90 days delinquent reviewed for impairment	32,344	22,804
TDRs less than 90 days delinquent not included elsewhere	17,962	25,088
Total impaired loans	135,540	138,549
Average recorded investment in nonaccrual impaired loans	137,549	161,628
Interest income recognized on nonaccrual impaired loans	1,247	5,282
Business Banking | Commercial real estate
Composition of impaired loans by portfolio segment and by class of financing receivable
Nonaccrual loans 90 or more days delinquent	34,601	44,603
Nonaccrual loans less than 90 days delinquent	23,799	17,891
Loans less than 90 days delinquent reviewed for impairment	24,012	15,467
TDRs less than 90 days delinquent not included elsewhere	9,218	16,097
Total impaired loans	91,630	94,058
Average recorded investment in nonaccrual impaired loans	91,747	101,731
Interest income recognized on nonaccrual impaired loans	878	3,640
Business Banking | Commercial loans
Composition of impaired loans by portfolio segment and by class of financing receivable
Nonaccrual loans 90 or more days delinquent	15,810	10,785
Nonaccrual loans less than 90 days delinquent	11,024	17,378
Loans less than 90 days delinquent reviewed for impairment	8,332	7,337
TDRs less than 90 days delinquent not included elsewhere	8,744	8,991
Total impaired loans	43,910	44,491
Average recorded investment in nonaccrual impaired loans	45,802	59,897
Interest income recognized on nonaccrual impaired loans	$ 369	$ 1,642

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CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Parenthetical) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2012	Mar. 31, 2011
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Unrealized holding gains, tax	$ (870)	$ (1,131)
Other-than-temporary impairment on securities included in net income, tax	(93)	0
Reclassification adjustment for gains included in net income, tax	31	8
Change in fair value of interest rate swaps, tax	$ (297)	$ (481)

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Disclosures About Fair Value of Financial Instruments (Details 4) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2012	Dec. 31, 2011
Fair value measurement for nonrecurring assets that had a fair market value below the carrying amount
Total assets	$ 58,033	$ 43,816
Loans evaluated for impairment
Fair value measurement for nonrecurring assets that had a fair market value below the carrying amount
Total assets	14,916	16,929
Loans held for sale
Fair value measurement for nonrecurring assets that had a fair market value below the carrying amount
Total assets	14,222
Real estate owned
Fair value measurement for nonrecurring assets that had a fair market value below the carrying amount
Total assets	28,895	26,887
Level 3
Fair value measurement for nonrecurring assets that had a fair market value below the carrying amount
Total assets	43,811	43,816
Level 3 | Loans evaluated for impairment
Fair value measurement for nonrecurring assets that had a fair market value below the carrying amount
Total assets	14,916	16,929
Level 3 | Real estate owned
Fair value measurement for nonrecurring assets that had a fair market value below the carrying amount
Total assets	28,895	26,887
Level 1
Fair value measurement for nonrecurring assets that had a fair market value below the carrying amount
Total assets	14,222
Level 1 | Loans held for sale
Fair value measurement for nonrecurring assets that had a fair market value below the carrying amount
Total assets	$ 14,222

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Investment securities and impairment of investment securities (Details 2) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2012	Dec. 31, 2011
Amortized cost
Total	$ 216,956	$ 231,389
Gross unrealized holding gains
Total	7,674	8,023
Fair value
Total	224,630	239,412
Municipal securities
Amortized cost
Due in five years - ten years	3,678	3,677
Due after ten years	69,592	71,015
Gross unrealized holding gains
Due in five years - ten years	171	174
Due after ten years	3,649	3,615
Fair value
Due in five years - ten years	3,849	3,851
Due after ten years	73,241	74,630
Residential mortgage-backed securities
Amortized cost
Total	143,686	156,697
Gross unrealized holding gains
Total	3,854	4,234
Fair value
Total	147,540	160,931
Fixed rate | Pass-through
Amortized cost
Total	22,815	24,160
Gross unrealized holding gains
Total	1,117	1,099
Fair value
Total	23,932	25,259
Fixed rate | Agency CMOs
Amortized cost
Total	100,008	108,881
Gross unrealized holding gains
Total	2,436	2,761
Fair value
Total	102,444	111,642
Variable rate | Pass-through
Amortized cost
Total	8,649	9,066
Gross unrealized holding gains
Total	54	94
Fair value
Total	8,703	9,160
Variable rate | Agency CMOs
Amortized cost
Total	12,214	14,590
Gross unrealized holding gains
Total	247	280
Fair value
Total	$ 12,461	$ 14,870

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Business Segments (Tables)

3 Months Ended

Mar. 31, 2012

Business Segments

Financial information for reportable segments

At or for the three months ended:

	Community		Consumer
March 31, 2012 ($ in 000’s)	Banking		Finance	All Other *		Consolidated
External interest income	$	80,405	5,531	313		86,249
Intersegment interest income	748		—	(748	)	—
Interest expense	19,540		748	555		20,843
Provision for loan losses	5,500		787	—		6,287
Noninterest income	13,082		511	47		13,640
Noninterest expense	47,878		3,196	202		51,276
Income tax expense (benefit)	6,221		504	(423	)	6,302
Net income	15,096		807	(722	)	15,181
Total assets	$	7,917,340	113,271	38,397		8,069,008

	Community		Consumer
March 31, 2011 ($ in 000’s)	Banking		Finance	All Other *		Consolidated
External interest income	$	85,616	5,247	229		91,092
Intersegment interest income	770		—	(770	)	—
Interest expense	22,960		770	322		24,052
Provision for loan losses	6,500		744	—		7,244
Noninterest income	13,860		453	13		14,326
Noninterest expense	46,101		3,037	240		49,378
Income tax expense (benefit)	7,396		477	(382	)	7,491
Net income	17,289		672	(708	)	17,253
Total assets	$	7,986,834	112,716	22,654		8,122,204

* Eliminations consist of intercompany loans, interest income and interest expense.

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Investment securities and impairment of investment securities (Details 3) (USD $)	3 Months Ended
	Mar. 31, 2012	Dec. 31, 2011
Fair value and gross unrealized losses on investment securities
Less than 12 months - Fair value	$ 83,224,000	$ 118,237,000
Less than 12 months - Unrealized loss	(316,000)	(638,000)
12 months or more - Fair value	44,565,000	46,374,000
12 months or more - Unrealized loss	(6,556,000)	(5,572,000)
Total - Fair value	127,789,000	164,611,000
Total - Unrealized loss	(6,872,000)	(6,210,000)
Investments where the book value exceeded the fair value for more than 12 months, total fair value	13,500,000
Variable rate basis	three month LIBOR
Non-agency CMOs
Fair value and gross unrealized losses on investment securities
Number of investments	10
U.S. government and agencies
Fair value and gross unrealized losses on investment securities
Less than 12 months - Fair value		24,601,000
Less than 12 months - Unrealized loss		(61,000)
12 months or more - Fair value	9,090,000	9,648,000
12 months or more - Unrealized loss	(35,000)	(49,000)
Total - Fair value	9,090,000	34,249,000
Total - Unrealized loss	(35,000)	(110,000)
Municipal securities
Fair value and gross unrealized losses on investment securities
Less than 12 months - Fair value	899,000
Less than 12 months - Unrealized loss	(17,000)
12 months or more - Fair value	1,489,000	2,317,000
12 months or more - Unrealized loss	(93,000)	(180,000)
Total - Fair value	2,388,000	2,317,000
Total - Unrealized loss	(110,000)	(180,000)
Corporate debt issues
Fair value and gross unrealized losses on investment securities
Less than 12 months - Fair value	1,580,000	3,537,000
Less than 12 months - Unrealized loss	(171,000)	(219,000)
12 months or more - Fair value	13,479,000	15,067,000
12 months or more - Unrealized loss	(5,964,000)	(4,416,000)
Total - Fair value	15,059,000	18,604,000
Total - Unrealized loss	(6,135,000)	(4,635,000)
Number of investments	6
Investments where the book value exceeded the fair value for more than 12 months, total fair value	19,400,000
Single issuer trust preferred investments
Fair value and gross unrealized losses on investment securities
Number of investments	2
Pooled trust preferred investments
Fair value and gross unrealized losses on investment securities
Number of investments	4
Equity securities
Fair value and gross unrealized losses on investment securities
Less than 12 months - Fair value		4,178,000
Less than 12 months - Unrealized loss		(258,000)
12 months or more - Fair value	16,000	18,000
12 months or more - Unrealized loss	(3,000)	(1,000)
Total - Fair value	16,000	4,196,000
Total - Unrealized loss	(3,000)	(259,000)
Residential mortgage-backed securities | Non-agency CMOs
Fair value and gross unrealized losses on investment securities
12 months or more - Fair value	4,899,000	4,971,000
12 months or more - Unrealized loss	(442,000)	(889,000)
Total - Fair value	4,899,000	4,971,000
Total - Unrealized loss	(442,000)	(889,000)
Residential mortgage-backed securities | Agency CMOs
Fair value and gross unrealized losses on investment securities
Less than 12 months - Fair value	80,745,000	85,921,000
Less than 12 months - Unrealized loss	(128,000)	(100,000)
12 months or more - Fair value	15,592,000	14,353,000
12 months or more - Unrealized loss	(19,000)	(37,000)
Total - Fair value	96,337,000	100,274,000
Total - Unrealized loss	$ (147,000)	$ (137,000)

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Loans receivable (Tables)

3 Months Ended

Mar. 31, 2012

Loans Receivable.

Summary of loans receivable

	March 31,			December 31,
	2012			2011
Personal Banking:
Residential mortgage loans	$	2,449,991		2,414,992
Home equity loans	1,058,938			1,084,786
Other consumer loans	237,591			245,689
Total Personal Banking	3,746,520			3,745,467
Business Banking:
Commercial real estate	1,516,583			1,481,127
Commercial loans	430,902			408,462
Total Business Banking	1,947,485			1,889,589
Total loans receivable, gross	5,694,005			5,635,056
Deferred loan fees	(4,026		)	(4,752	)
Allowance for loan losses	(72,941		)	(71,138	)
Undisbursed loan proceeds:
Residential mortgage loans	(19,032		)	(12,874	)
Commercial real estate	(41,007		)	(45,360	)
Commercial loans	(22,008		)	(20,551	)
Total loans receivable, net	$	5,534,991		5,480,381

Schedule of allowance for loans receivable

The following table provides information related to the allowance for loan losses by portfolio segment and by class of financing receivable at March 31, 2012 (in thousands):

	Balance December 31, 2011		Current period provision	Charge-offs		Recoveries	Balance March 31, 2012
Personal Banking:
Residental mortgage loans	$	8,482	327	(1,043	)	98	7,864
Home equity loans	8,687		128	(892	)	24	7,947
Other consumer loans	5,325		207	(1,287	)	344	4,589
Total Personal Banking	22,494		662	(3,222	)	466	20,400
Business Banking:
Commercial real estate loans	32,148		4,319	(1,473	)	297	35,291
Commercial loans	12,080		1,192	(649	)	97	12,720
Total Business Banking	44,228		5,511	(2,122	)	394	48,011
Unallocated	4,416		114	—		—	4,530
Total	$	71,138	6,287	(5,344	)	860	72,941

The following table provides information related to the allowance for loan losses by portfolio segment and by class of financing receivable at March 31, 2011 (in thousands):

	Balance December 31, 2010		Current period provision		Charge-offs		Recoveries	Balance March 31, 2011
Personal Banking:
Residental mortgage loans	$	6,854	2,286		(1,205	)	71	8,006
Home equity loans	7,675		1,403		(2,255	)	17	6,840
Other consumer loans	5,810		581		(1,232	)	397	5,556
Total Personal Banking	20,339		4,270		(4,692	)	485	20,402
Business Banking:
Commercial real estate loans	35,832		278		(2,276	)	206	34,040
Commercial loans	15,770		2,869		(1,041	)	112	17,710
Total Business Banking	51,602		3,147		(3,317	)	318	51,750
Unallocated	4,471		(173	)	—		—	4,298
Total	$	76,412	7,244		(8,009	)	803	76,450

Information related to loans 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 at March 31, 2012 (in thousands):

	Recorded investment in loans receivable		Allowance for loan losses	Recorded investment in loans on nonaccrual	Recorded investment in loans past due 90 days or more and still accruing	TDRs
Personal Banking:
Residental mortgage loans	$	2,426,933	7,864	28,696	11	806
Home equity loans	1,058,938		7,947	9,100	342	—
Other consumer loans	237,591		4,589	1,983	423	—
Total Personal Banking	3,723,462		20,400	39,779	776	806
Business Banking:
Commercial real estate loans	1,475,576		35,291	58,400	—	38,995
Commercial loans	408,894		12,720	26,834	24	27,502
Total Business Banking	1,884,470		48,011	85,234	24	66,497
Total	$	5,607,932	68,411	125,013	800	67,303

The following table provides information related to the loan portfolio by portfolio segment and by class of financing receivable at December 31, 2011 (in thousands):

	Recorded investment in loans receivable		Allowance for loan losses	Recorded investment in loans on nonaccrual	Recorded investment in loans past due 90 days or more and still accruing	TDRs
Personal Banking:
Residental mortgage loans	$	2,397,366	8,482	28,221	12	806
Home equity loans	1,084,786		8,687	9,560	221	—
Other consumer loans	245,689		5,325	2,667	277	—
Total Personal Banking	3,727,841		22,494	40,448	510	806
Business Banking:
Commercial real estate loans	1,435,767		32,148	62,494	—	38,216
Commercial loans	387,911		12,080	28,163	—	30,407
Total Business Banking	1,823,678		44,228	90,657	—	68,623
Total	$	5,551,519	66,722	131,105	510	69,429

Schedule 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 quarter ended March 31, 2012 (in thousands):

	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:
Residental mortgage loans	$	28,696	—	—	—	28,696	29,327	170
Home equity loans	9,100		—	—	—	9,100	9,545	68
Other consumer loans	1,983		—	—	—	1,983	2,499	13
Total Personal Banking	39,779		—	—	—	39,779	41,371	251
Business Banking:
Commercial real estate loans	34,601		23,799	24,012	9,218	91,630	91,747	878
Commercial loans	15,810		11,024	8,332	8,744	43,910	45,802	369
Total Business Banking	50,411		34,823	32,344	17,962	135,540	137,549	1,247
Total	$	90,190	34,823	32,344	17,962	175,319	178,920	1,498

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, 2011 (in thousands):

	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:
Residental mortgage loans	$	28,221	—	—	361	28,582	30,731	538
Home equity loans	9,560		—	—	—	9,560	9,574	182
Other consumer loans	2,667		—	—	—	2,667	2,340	34
Total Personal Banking	40,448		—	—	361	40,809	42,645	754
Business Banking:
Commercial real estate loans	44,603		17,891	15,467	16,097	94,058	101,731	3,640
Commercial loans	10,785		17,378	7,337	8,991	44,491	59,897	1,642
Total Business Banking	55,388		35,269	22,804	25,088	138,549	161,628	5,282
Total	$	95,836	35,269	22,804	25,449	179,358	204,273	6,036

Schedule of the evaluatuion of impaired loans by portfolio segment and 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 at March 31, 2012 (in thousands):

	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:
Residental mortgage loans	$	2,426,933	—	—	—	—
Home equity loans	1,058,938		—	—	—	—
Other consumer loans	237,591		—	—	—	—
Total Personal Banking	3,723,462		—	—	—	—
Business Banking:
Commercial real estate loans	1,432,081		43,495	16,334	4,918	27,161
Commercial loans	384,711		24,183	4,614	1,114	19,569
Total Business Banking	1,816,792		67,678	20,948	6,032	46,730
Total	$	5,540,254	67,678	20,948	6,032	46,730

The following table provides information related to the evaluation of impaired loans by portfolio segment and by class of financing receivable at December 31, 2011 (in thousands):

	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:
Residental mortgage loans	$	2,397,366	—	—	—	—
Home equity loans	1,084,786		—	—	—	—
Other consumer loans	245,689		—	—	—	—
Total Personal Banking	3,727,841		—	—	—	—
Business Banking:
Commercial real estate loans	1,395,634		40,133	15,576	3,025	24,557
Commercial loans	361,033		26,878	5,897	1,519	20,981
Total Business Banking	1,756,667		67,011	21,473	4,544	45,538
Total	$	5,484,508	67,011	21,473	4,544	45,538

Schedule of troubled debt restructurings by portfolio segment and by class of financing receivable

	For the three months ended March 31, 2012
	Number of contracts	Recorded investment at the time of modification		Current recorded investment	Current allowance
Troubled debt restructurings:
Personal Banking:
Residential mortgage loans	—	$	—	—	—
Home equity loans	—	—		—	—
Other consumer loans	—	—		—	—
Total Personal Banking	—	—		—	—
Business Banking:
Commercial real estate loans	3	1,400		1,391	636
Commercial loans	3	1,645		1,446	84
Total Business Banking	6	3,045		2,837	720
Total	6	$	3,045	2,837	720
Troubled debt restructurings that subsequently defaulted:
Personal Banking:
Residential mortgage loans	1	$	449	361	470
Home equity loans	—	—		—	—
Other consumer loans	—	—		—	—
Total Personal Banking	1	449		361	470
Business Banking:
Commercial real estate loans	1	575		520	—
Commercial loans	—	—		—	—
Total Business Banking	1	575		520	—
Total	2	$	1,024	881	470

	For the three months ended March 31, 2011
	Number of contracts	Recorded investment at the time of modification		Current recorded investment	Current allowance
Troubled debt restructurings:
Personal Banking:
Residential mortgage loans	1	$	449	363	1
Home equity loans	—	—		—	—
Other consumer loans	—	—		—	—
Total Personal Banking	1	449		363	1
Business Banking:
Commercial real estate loans	3	1,758		1,734	129
Commercial loans	5	12,934		11,684	3,754
Total Business Banking	8	14,692		13,418	3,883
Total	9	$	15,141	13,781	3,884
Troubled debt restructurings that subsequently defaulted:
Personal Banking:
Residential mortgage loans	—	$	—	—	—
Home equity loans	—	—		—	—
Other consumer loans	—	—		—	—
Total Personal Banking	—	—		—	—
Business Banking:
Commercial real estate loans	—	—		—	—
Commercial loans	1	9,303		9,180	918
Total Business Banking	1	9,303		9,180	918
Total	1	$	9,303	9,180	918

Schedule of loan delinquencies

The following table provides information related to loan delinquencies at March 31, 2012 (in thousands):

	30-59 Days Delinquent		60-89 Days Delinquent	90 Days or Greater Delinquent	Total Delinquency	Current	Total Loans
Personal Banking:
Residential mortgage loans	$	29,414	1,466	28,696	59,576	2,367,357	2,426,933
Home equity loans	7,086		2,313	9,100	18,499	1,040,439	1,058,938
Other consumer loans	2,854		1,083	1,983	5,920	231,671	237,591
Total Personal Banking	39,354		4,862	39,779	83,995	3,639,467	3,723,462
Business Banking:
Commercial real estate loans	9,275		3,203	34,601	47,079	1,428,497	1,475,576
Commercial loans	7,069		1,376	15,810	24,255	384,639	408,894
Total Business Banking	16,344		4,579	50,411	71,334	1,813,136	1,884,470
Total	$	55,698	9,441	90,190	155,329	5,452,603	5,607,932

The following table provides information related to loan delinquencies at December 31, 2011 (in thousands):

	30-59 Days Delinquent		60-89 Days Delinquent	90 Days or Greater Delinquent	Total Delinquency	Current	Total Loans
Personal Banking:
Residential mortgage loans	$	33,671	8,629	28,221	70,521	2,326,845	2,397,366
Home equity loans	7,426		1,953	9,560	18,939	1,065,847	1,084,786
Other consumer loans	4,854		1,787	2,667	9,308	236,381	245,689
Total Personal Banking	45,951		12,369	40,448	98,768	3,629,073	3,727,841
Business Banking:
Commercial real estate loans	10,680		3,122	44,603	58,405	1,377,362	1,435,767
Commercial loans	2,027		4,958	10,785	17,770	370,141	387,911
Total Business Banking	12,707		8,080	55,388	76,175	1,747,503	1,823,678
Total	$	58,658	20,449	95,836	174,943	5,376,576	5,551,519

Schedule of credit quality indicators

The following table sets forth information about credit quality indicators, which were updated during the quarter ended March 31, 2012 (in thousands):

	Pass		Special Mention	Substandard	Doubtful	Loss	Total
Personal Banking:
Residential mortgage loans	$	2,403,635	—	21,989	23	1,286	2,426,933
Home equity loans	1,049,352		—	9,586	—	—	1,058,938
Other consumer loans	236,817		—	774	—	—	237,591
Total Personal Banking	3,689,804		—	32,349	23	1,286	3,723,462
Business Banking:
Commercial real estate loans	1,259,031		78,960	132,711	4,874	—	1,475,576
Commercial loans	319,677		27,053	59,376	2,788	—	408,894
Total Business Banking	1,578,708		106,013	192,087	7,662	—	1,884,470
Total	$	5,268,512	106,013	224,436	7,685	1,286	5,607,932

The following table sets forth information about credit quality indicators, which were updated during the year ended December 31, 2011 (in thousands):

	Pass		Special Mention	Substandard	Doubtful	Loss	Total
Personal Banking:
Residential mortgage loans	$	2,373,275	—	22,843	11	1,237	2,397,366
Home equity loans	1,074,512		—	10,274	—	—	1,084,786
Other consumer loans	244,491		—	1,198	—	—	245,689
Total Personal Banking	3,692,278		—	34,315	11	1,237	3,727,841
Business Banking:
Commercial real estate loans	1,211,583		75,981	144,947	3,256	—	1,435,767
Commercial loans	298,597		23,887	62,753	2,674	—	387,911
Total Business Banking	1,510,180		99,868	207,700	5,930	—	1,823,678
Total	$	5,202,458	99,868	242,015	5,941	1,237	5,551,519

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CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (USD $) In Thousands, except Share data, unless otherwise specified	Total	Common Stock	Paid-in Capital	Retained Earnings	Accumulated Other Comprehensive Income/ (loss)	Unallocated common stock of ESOP	Comprehensive Income
Balance at Dec. 31, 2010	$ 1,307,450	$ 1,103	$ 824,164	$ 523,089	$ (13,497)	$ (27,409)
Balance (in shares) at Dec. 31, 2010		110,295,117
Comprehensive income:
Net income	17,253			17,253			17,253
Other comprehensive income, net of tax of $(1,229) and $(1,604) for the three months ended March 31, 2012 and 2011, respectively	2,979				2,979		2,979
Total comprehensive income	20,232			17,253	2,979		20,232
Exercise of stock options	353	1	352
Exercise of stock options (in shares)		56,738
Stock compensation expense	867		483			384
Share repurchases	(31,074)	(26)	(31,048)
Share repurchases (in shares)		(2,618,423)
Dividends paid ($0.12 and $0.10 per share for the three months ended March 31, 2012 and 2011, respectively)	(10,712)			(10,712)
Balance at Mar. 31, 2011	1,287,116	1,078	793,951	529,630	(10,518)	(27,025)
Balance (in shares) at Mar. 31, 2011		107,733,432
Balance at Dec. 31, 2011	1,154,904	975	659,523	543,598	(23,226)	(25,966)
Balance (in shares) at Dec. 31, 2011		97,493,046
Comprehensive income:
Net income	15,181			15,181			15,181
Other comprehensive income, net of tax of $(1,229) and $(1,604) for the three months ended March 31, 2012 and 2011, respectively	2,008				2,008		2,008
Total comprehensive income	17,189			15,181	2,008		17,189
Exercise of stock options	786	1	785
Exercise of stock options (in shares)		100,350
Stock compensation expense	1,023		625			398
Dividends paid ($0.12 and $0.10 per share for the three months ended March 31, 2012 and 2011, respectively)	(11,427)			(11,427)
Balance at Mar. 31, 2012	$ 1,162,475	$ 976	$ 660,933	$ 547,352	$ (21,218)	$ (25,568)
Balance (in shares) at Mar. 31, 2012		97,593,396

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CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (Parenthetical) (USD $) In Thousands, except Share data, unless otherwise specified	Mar. 31, 2012	Dec. 31, 2011
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
Marketable securities available-for-sale, amortized cost (in dollars)	$ 894,232	$ 885,408
Marketable securities held-to-maturity, fair value (in dollars)	$ 224,630	$ 239,412
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	97,593,396	97,493,046

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Earnings Per Share

3 Months Ended

Mar. 31, 2012

Earnings Per Share

Earnings Per Share

(7)         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 the earnings of the Company. All shares outstanding during the three months ended March 31, 2012 were included in the computation of diluted earnings per share for this period because the options’ exercise price was not greater than the average market price of the common shares of $12.63.  Stock options to purchase 579,793 shares of common stock with a weighted average exercise price of $12.12 per share were outstanding during the three months ended March 31, 2011 but were not included in the computation of diluted earnings per share for this period because the options’ exercise price was greater than the average market price of the common shares of $12.10.

The computation of basic and diluted earnings per share follows (in thousands, except share data and per share amounts):

	Quarter ended
	March 31,
	2012		2011
Reported net income	$	15,181	17,253
Weighted average common shares outstanding	94,115,522		106,571,262
Dilutive potential shares due to effect of stock options	549,811		687,058
Total weighted average common shares and dilutive potential shares	94,665,333		107,258,320
Basic earnings per share:	$	0.16	0.16
Diluted earnings per share:	$	0.16	0.16

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Document and Entity Information	3 Months Ended
	Mar. 31, 2012	Apr. 30, 2012
Document and Entity Information
Entity Registrant Name	Northwest Bancshares, Inc.
Entity Central Index Key	0001471265
Document Type	10-Q
Document Period End Date	Mar. 31, 2012
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Current Reporting Status	Yes
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		97,602,357
Document Fiscal Year Focus	2012
Document Fiscal Period Focus	Q1

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Pension and Other Post-retirement Benefits (in thousands):

3 Months Ended

Mar. 31, 2012

Pension and Other Post-retirement Benefits (in thousands):

Pension and Other Post-retirement Benefits (in thousands):

(8)           Pension and Other Post-retirement Benefits (in thousands):

Components of Net Periodic Benefit Cost

	Quarter ended March 31,
	Pension Benefits					Other Post-retirement Benefits
	2012			2011		2012	2011
Service cost	$	1,858		1,428		—	—
Interest cost	1,432			1,363		17	21
Expected return on plan assets	(1,948		)	(1,502	)	—	—
Amortization of prior service cost	(40		)	(40	)	—	—
Amortization of the net loss	690			169		12	13
Net periodic benefit cost	$	1,992		1,418		29	34

We made no contribution to our pension or other post-retirement benefit plans during the three month period ended March 31, 2012.  Once determined, we anticipate making a tax-deductible contribution to our defined benefit pension plan for the year ending December 31, 2012.

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CONSOLIDATED STATEMENTS OF INCOME (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended
	Mar. 31, 2012	Mar. 31, 2011
Interest income:
Loans receivable	$ 78,159	$ 80,457
Mortgage-backed securities	4,691	6,756
Taxable investment securities	573	398
Tax-free investment securities	2,446	3,074
Interest-earning deposits	380	407
Total interest income	86,249	91,092
Interest expense:
Deposits	12,944	16,063
Borrowed funds	7,899	7,989
Total interest expense	20,843	24,052
Net interest income	65,406	67,040
Provision for loan losses	6,287	7,244
Net interest income after provision for loan losses	59,119	59,796
Noninterest income:
Impairment losses on securities	(545)
Noncredit related losses on securities not expected to be sold (recognized in other comprehensive income)	307
Net impairment losses	(238)
Gain on sale of investments, net	44	4
Service charges and fees	8,425	8,928
Trust and other financial services income	2,116	1,910
Insurance commission income	1,718	1,380
Loss on real estate owned, net	(1,070)	(27)
Income from bank owned life insurance	1,117	1,166
Mortgage banking income	531	197
Other operating income	997	768
Total noninterest income	13,640	14,326
Noninterest expense:
Compensation and employee benefits	27,838	25,499
Premises and occupancy costs	5,748	6,191
Office operations	3,324	3,100
Processing expenses	6,142	5,767
Marketing expenses	2,036	1,959
Federal deposit insurance premiums	1,620	2,427
Professional services	1,697	1,256
Amortization of intangible assets	295	491
Real estate owned expense	740	431
Other expenses	1,836	2,257
Total noninterest expense	51,276	49,378
Income before income taxes	21,483	24,744
Federal and state income taxes	6,302	7,491
Net income	$ 15,181	$ 17,253
Basic earnings per share (in dollars per share)	$ 0.16	$ 0.16
Diluted earnings per share (in dollars per share)	$ 0.16	$ 0.16

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Business Segments

3 Months Ended

Mar. 31, 2012

Business Segments

Business Segments

(2)Business Segments

We operate in two reportable business segments: Community Banking and Consumer Finance.  The Community Banking segment provides services traditionally offered by full-service community banks, including commercial and personal demand, savings and time deposit accounts and commercial and personal loans, as well as insurance, brokerage and investment management and trust services.  The Consumer Finance segment, which is comprised of Northwest Consumer Discount Company, a subsidiary of Northwest, operates 52 offices in Pennsylvania and offers personal installment loans for a variety of consumer and real estate products.  This activity is funded primarily through an intercompany borrowing relationship with Allegheny Services, Inc., a subsidiary of Northwest.  Net income is the primary measure used by management to measure segment performance.  The following tables provide financial information for these reportable segments.  The “All Other” column represents the parent company and elimination entries necessary to reconcile to the consolidated amounts presented in the financial statements.

At or for the three months ended:

	Community		Consumer
March 31, 2012 ($ in 000’s)	Banking		Finance	All Other *		Consolidated
External interest income	$	80,405	5,531	313		86,249
Intersegment interest income	748		—	(748	)	—
Interest expense	19,540		748	555		20,843
Provision for loan losses	5,500		787	—		6,287
Noninterest income	13,082		511	47		13,640
Noninterest expense	47,878		3,196	202		51,276
Income tax expense (benefit)	6,221		504	(423	)	6,302
Net income	15,096		807	(722	)	15,181
Total assets	$	7,917,340	113,271	38,397		8,069,008

	Community		Consumer
March 31, 2011 ($ in 000’s)	Banking		Finance	All Other *		Consolidated
External interest income	$	85,616	5,247	229		91,092
Intersegment interest income	770		—	(770	)	—
Interest expense	22,960		770	322		24,052
Provision for loan losses	6,500		744	—		7,244
Noninterest income	13,860		453	13		14,326
Noninterest expense	46,101		3,037	240		49,378
Income tax expense (benefit)	7,396		477	(382	)	7,491
Net income	17,289		672	(708	)	17,253
Total assets	$	7,986,834	112,716	22,654		8,122,204

* Eliminations consist of intercompany loans, interest income and interest expense.

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Basis of Presentation and Informational Disclosures

3 Months Ended

Mar. 31, 2012

Basis of Presentation and Informational Disclosures

Basis of Presentation and Informational Disclosures

(1)Basis of Presentation and Informational Disclosures

Northwest Bancshares, Inc. (the “Company”)or (“NWBI”), is a Maryland incorporated company headquartered in Warren, Pennsylvania, is a savings and loan holding company regulated by the Board of Governors of the Federal Reserve System.  The Company was incorporated to be the successor to Northwest Bancorp, Inc. upon the completion of the mutual-to-stock conversion of Northwest Bancorp, MHC.  The primary activity of the Company is the ownership of all of the issued and outstanding common stock of Northwest Savings Bank, a Pennsylvania-chartered savings bank (“Northwest”).  Northwest is regulated by the FDIC and the Pennsylvania Department of Banking.  At March 31, 2012, Northwest operated 168 community-banking offices throughout Pennsylvania, western New York, eastern Ohio and Maryland.

The accompanying unaudited consolidated financial statements include the accounts of the Company and its subsidiary, Northwest, and Northwest’s subsidiaries Northwest Settlement Agency, LLC, Northwest Consumer Discount Company, Northwest Financial Services, Inc., Northwest Advisors, Inc., Northwest Capital Group, Inc., Boetger & Associates, Inc., Allegheny Services, Inc., Great Northwest Corporation and Veracity Benefits Design.  The unaudited consolidated financial statements have been prepared in accordance with United States generally accepted accounting principles for interim financial information and with the instructions for Form 10-Q and Article 10 of Regulation S-X.  Accordingly, they do not include all of the information and footnotes required for complete annual financial statements.  In the opinion of management, all adjustments necessary for the fair presentation of the Company’s financial position and results of operations have been included.  The consolidated statements have been prepared using the accounting policies described in the financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2011 updated, as required, for any new pronouncements or changes.

The results of operations for the three months ended March 31, 2012 are not necessarily indicative of the results that may be expected for the year ending December 31, 2012.

Stock-Based Compensation

Stock-based compensation expense of $1.0 million and $867,000 for the three months ended March 31, 2012 and 2011, respectively, was recognized in compensation expense relating to our stock benefit plans.  At March 31, 2012 there was compensation expense of $5.6 million to be recognized for awarded but unvested stock options and $12.8 million for unvested common shares.

Income Taxes- Uncertain Tax Positions

Accounting standards prescribe a comprehensive model for how a company should recognize, measure, present and disclose in its financial statements uncertain tax positions that the company has taken or expects to take on a tax return.  A tax benefit from an uncertain position may be recognized only if it is “more likely than not” that the position is sustainable, based on its technical merits.  The tax benefit of a qualifying position is the largest amount of tax benefit that is greater than 50% likely of being realized upon ultimate settlement with a taxing authority having full knowledge of all relevant information.  As of March 31, 2012 we had no liability for unrecognized tax benefits.

We recognize interest accrued related to: (1) unrecognized tax benefits in federal and state income taxes and (2) refund claims in other operating income.  We recognize penalties (if any) in federal and state income taxes.  There is no amount accrued for the payment of interest or penalties at March 31, 2012.  We are subject to audit by the Internal Revenue Service and any state in which we conduct business for the tax periods ended December 31, 2010, 2009 and 2008.

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Investment securities and impairment of investment securities (Tables)

3 Months Ended

Mar. 31, 2012

Investment securities and impairment of investment securities

Schedule of marketable securities available-for-sale

The following table shows the portfolio of investment securities available-for-sale at March 31, 2012 (in thousands):

			Gross	Gross
			unrealized	unrealized
	Amortized		holding	holding		Fair
	cost		gains	losses		value
Debt issued by the U.S. government and agencies:
Due in one year or less	$	56	—	—		56
Debt issued by government sponsored enterprises:
Due in one year - five years	26,296		44	—		26,340
Due in five years - ten years	29,163		474	—		29,637
Due after ten years	9,125		—	(35	)	9,090
Equity securities	12,398		4,676	(3	)	17,071
Municipal securities:
Due in one year - five years	8,880		245	—		9,125
Due in five years - ten years	26,427		1,093	—		27,520
Due after ten years	116,529		5,905	(110	)	122,324
Corporate debt issues:
Due in one year - five years	500		—	—		500
Due after ten years	25,019		275	(6,135	)	19,159
Residential mortgage-backed securities:
Fixed rate pass-through	102,152		7,528	(16	)	109,664
Variable rate pass-through	129,112		6,636	(4	)	135,744
Fixed rate non-agency CMOs	8,280		178	(307	)	8,151
Fixed rate agency CMOs	143,158		3,126	—		146,284
Variable rate non-agency CMOs	1,023		—	(135	)	888
Variable rate agency CMOs	256,114		2,038	(127	)	258,025
Total residential mortgage-backed securities	639,839		19,506	(589	)	658,756
Total marketable securities available-for-sale	$	894,232	32,218	(6,872	)	919,578

The following table shows the portfolio of investment securities available-for-sale at December 31, 2011 (in thousands):

			Gross	Gross
			unrealized	unrealized
	Amortized		holding	holding		Fair
	cost		gains	losses		value
Debt issued by the U.S. government and agencies:
Due in one year or less	$	59	—	—		59
Debt issued by government sponsored enterprises:
Due in one year - five years	36,295		134	—		36,429
Due in five years - ten years	29,557		638	(61	)	30,134
Due after ten years	9,665		—	(49	)	9,616
Equity securities	12,080		644	(259	)	12,465
Municipal securities:
Due in one year - five years	10,633		291	—		10,924
Due in five years - ten years	27,817		1,336	—		29,153
Due after ten years	124,041		5,350	(180	)	129,211
Corporate debt issues:
Due in one year or less	500		—	—		500
Due after ten years	25,036		233	(4,635	)	20,634
Residential mortgage-backed securities:
Fixed rate pass-through	110,364		8,201	(1	)	118,564
Variable rate pass-through	135,103		6,679	(4	)	141,778
Fixed rate non-agency CMOs	9,521		188	(735	)	8,974
Fixed rate CMOs	112,670		3,466	—		116,136
Variable rate non-agency CMOs	1,104		—	(154	)	950
Variable rate CMOs	240,963		1,991	(132	)	242,822
Total residential mortgage-backed securities	609,725		20,525	(1,026	)	629,224
Total marketable securities available-for-sale	$	885,408	29,151	(6,210	)	908,349

Schedule of marketable securities held to maturity

The following table shows the portfolio of investment securities held-to-maturity at March 31, 2012 (in thousands):

			Gross	Gross
			unrealized	unrealized
	Amortized		holding	holding	Fair
	cost		gains	losses	value
Municipal securities:
Due in Five years - ten years	$	3,678	171	—	3,849
Due after ten years	69,592		3,649	—	73,241
Residential mortgage-backed securities:
Fixed rate pass-through	22,815		1,117	—	23,932
Variable rate pass-through	8,649		54	—	8,703
Fixed rate agency CMOs	100,008		2,436	—	102,444
Variable rate agency CMOs	12,214		247	—	12,461
Total residential mortgage-backed securities	143,686		3,854	—	147,540
Total marketable securities held-to-maturity	$	216,956	7,674	—	224,630

The following table shows the portfolio of investment securities held-to-maturity at December 31, 2011 (in thousands):

			Gross	Gross
			unrealized	unrealized
	Amortized		holding	holding	Fair
	cost		gains	losses	value
Municipal securities:
Due in five years - ten years	$	3,677	174	—	3,851
Due after ten years	71,015		3,615	—	74,630
Residential mortgage-backed securities:
Fixed rate pass-through	24,160		1,099	—	25,259
Variable rate pass-through	9,066		94	—	9,160
Fixed rate agency CMOs	108,881		2,761	—	111,642
Variable rate agency CMOs	14,590		280	—	14,870
Total residential mortgage-backed securities	156,697		4,234	—	160,931
Total marketable securities held-to-maturity	$	231,389	8,023	—	239,412

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 of 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 March 31, 2012 (in thousands):

	Less than 12 months				12 months or more			Total
			Unrealized			Unrealized			Unrealized
	Fair value		loss		Fair value	loss		Fair value	loss
U.S. government and agencies	$	—	—		9,090	(35	)	9,090	(35	)
Municipal securities	899		(17	)	1,489	(93	)	2,388	(110	)
Corporate issues	1,580		(171	)	13,479	(5,964	)	15,059	(6,135	)
Equity securities	—		—		16	(3	)	16	(3	)
Residential mortgage- backed securities - non-agency	—		—		4,899	(442	)	4,899	(442	)
Residential mortgage- backed securities - agency	80,745		(128	)	15,592	(19	)	96,337	(147	)
Total temporarily impaired securities	$	83,224	(316	)	44,565	(6,556	)	127,789	(6,872	)

The following table shows the fair value of 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, 2011 (in thousands):

	Less than 12 months				12 months or more			Total
			Unrealized			Unrealized			Unrealized
	Fair value		loss		Fair value	loss		Fair value	loss
U.S. government and agencies	$	24,601	(61	)	9,648	(49	)	34,249	(110	)
Municipal securities	—		—		2,317	(180	)	2,317	(180	)
Corporate issues	3,537		(219	)	15,067	(4,416	)	18,604	(4,635	)
Equities	4,178		(258	)	18	(1	)	4,196	(259	)
Residential mortgage- backed securities - non-agency	—		—		4,971	(889	)	4,971	(889	)
Residential mortgage- backed securities - agency	85,921		(100	)	14,353	(37	)	100,274	(137	)
Total temporarily impaired securities	$	118,237	(638	)	46,374	(5,572	)	164,611	(6,210	)

Class, book value, fair value and ratings information for portfolio of corporate securities that have an unrealized loss

The following table provides class, book value, fair value and ratings information for our portfolio of corporate securities that have an unrealized loss at March 31, 2012 (in thousands):

		Total
		Book		Fair	Unrealized		Moody’s/ Fitch
Description	Class	Value		Value	Losses		Ratings
Bank Boston Capital Trust (1)	N/A	$	989	694	(295	)	Ba1/ BB
Huntington Capital Trust	N/A	1,425		1,038	(387	)	Baa3/ BB
Commercebank Capital Trust	N/A	887		880	(7	)	Not rated
Ocean Shore Capital Trust	N/A	864		700	(164	)	Not rated
I-PreTSL I	Mezzanine	1,500		443	(1,057	)	Not rated/ CCC
I-PreTSL II	Mezzanine	1,500		605	(895	)	Not rated/ B
PreTSL XIX	Senior A-1	8,626		6,365	(2,261	)	Baa2/ BBB
PreTSL XX	Senior A-1	5,403		4,334	(1,069	)	Ba2/ BB
		$	21,194	15,059	(6,135	)

(1) — Bank Boston was acquired by Bank of America.

Collateral information on pooled trust preferred securities

The following table provides collateral information on the entire pool for the trust preferred securities included in the previous table at March 31, 2012 (in thousands):

					Additional
					Immediate
					defaults before
			Current		causing an
	Total		deferrals	Performing	interest
Description *	Collateral		and defaults	Collateral	shortfall
I-PreTSL I	$	188,500	32,500	156,000	93,251
I-PreTSL II	340,500		17,500	323,000	156,787
PreTSL XIX	649,981		179,150	470,831	146,000
PreTSL XX	552,238		174,500	377,738	96,500

Schedule of issuer specific information, book value, fair value, unrealized losses and other-than-temporary impairment recorded in earnings for non-agency collateralized mortgage obligations

The following table shows issuer specific information, book value, fair value, unrealized gain or loss and other-than-temporary impairment recorded in earnings for the portfolio of non-agency CMOs at March 31, 2012 (in thousands):

								Total
						Impairment		impairment
						recorded in		recorded in
	Book		Fair	Unrealized		current period		prior period
Description	Value		Value	Gain/ (loss)		earnings		earnings
AMAC 2003-6 2A2	$	323	331	8		—		—
AMAC 2003-6 2A8	667		686	19		—		—
AMAC 2003-7 A3	395		399	4		—		—
BOAMS 2005-11 1A8	1,501		1,629	128		—		(146	)
CWALT 2005-J14 A3	4,318		4,011	(307	)	(238	)	(676	)
CFSB 2003-17 2A2	615		625	10		—		—
WAMU 2003-S2 A4	461		470	9		—		—
CMLTI 2005-10 1A5B	58		3	(55	)	—		(3,531	)
SARM 2005-21 4A2	23		16	(7	)	—		(3,193	)
WFMBS 2003-B A2	942		869	(73	)	—		—
	$	9,303	9,039	(264	)	(238	)	(7,546	)

Portfolio of municipal securities that have unrealized losses for greater than 12 months

The following table provides information for our portfolio of municipal securities that have unrealized losses for greater than 12 months at March 31, 2012 (in thousands):

		Total
		Book		Fair	Unrealized
Description	State	Value		Value	Losses		Rating
Cambridge Area JT Revenue	PA	$	595	566	(29	)	Not rated
West Reading General Obligation	PA	987		923	(64	)	BBB
		$	1,582	1,489	(93	)

Cumulative roll forward of credit losses recognized in earnings for debt securities held and not intended to be sold

	2012		2011
Beginning balance at Janaury 1, (a)	$	16,382	15,445
Credit losses on debt securities for which other-than-temporary impairment was not previously recognized	—		—
Additional credit losses on debt securities for which other-than-temporary impairment was previously recognized	238		—
Ending balance at March 31,	$	16,620	15,445

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

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Disclosures About Fair Value of Financial Instruments

3 Months Ended

Mar. 31, 2012

Disclosures About Fair Value of Financial Instruments

Disclosures About Fair Value of Financial Instruments

(9)         Disclosures About Fair Value of Financial Instruments

Fair value information about financial instruments, whether or not recognized in the consolidated statement of financial condition, is required to be disclosed. These requirements exclude certain financial instruments and all nonfinancial instruments. 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 technique 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 corporate debt securities do not have an active market and as such the broker pricing received uses alternative methods. The fair value of these corporate debt securities is determined by using a discounted cash flow model using market assumptions, which generally include cash flow, collateral and other market assumptions.  As such, these securities are included herein 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 were segregated for valuation purposes. Each loan pool was separately valued utilizing a discounted cash flow analysis. Projected monthly cash flows were discounted to present value using a market rate for comparable loans, which is not considered an exit price. Characteristics of comparable loans included remaining term, coupon interest, and estimated prepayment speeds. Delinquent loans were separately evaluated given the impact delinquency has on the projected future cash flow of the loan and the approximate discount or market rate.

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

The fixed rate advances were valued by comparing their contractual cost to the prevailing market cost.  The carrying amount of repurchase agreements approximates the 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.

Cash flow hedges — Interest rate swap agreements (“swaps”)

The fair value of the swaps is the amount we would have expected to pay to terminate the agreements and is based upon the present value of the expected future cash flows using the LIBOR swap curve, the basis for the underlying interest rate.

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 March 31, 2012 and December 31, 2011, 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 March 31, 2012 and December 31, 2011:

	March 31, 2012						December 31, 2011
	Carrying		Estimated				Carrying	Estimated
	amount		fair value	Level 1	Level 2	Level 3	amount	fair value
Financial assets:
Cash and cash equivalents	$	758,889	758,889	758,889	—	—	688,297	688,297
Securities available-for-sale	919,578		919,578	17,071	894,217	8,290	908,349	908,349
Securities held-to-maturity	216,956		224,630	—	224,630	—	231,389	239,412
Loans receivable, net	5,534,991		5,885,894	14,222	—	5,871,672	5,480,381	5,839,674
Accrued interest receivable	25,072		25,072	25,072	—	—	24,599	24,599
FHLB Stock	47,090		47,090	—	—	—	48,935	48,935
Total financial assets	$	7,502,576	7,861,153	815,254	1,118,847	5,879,962	7,381,950	7,749,266
Financial liabilities:
Savings and checking accounts	$	3,689,972	3,689,972	3,689,972	—	—	3,495,508	3,495,508
Time deposits	2,179,789		2,226,527	—	—	2,226,527	2,284,817	2,329,451
Borrowed funds	836,410		900,260	140,843	—	759,417	827,925	899,547
Junior subordinated debentures	103,094		115,940	—	—	115,940	103,094	116,725
Cash flow hedges - swaps	12,789		12,789	—	12,789	—	13,637	13,637
Accrued interest payable	1,119		1,119	1,119	—	—	1,104	1,104
Total financial liabilities	$	6,823,173	6,946,607	3,831,934	12,789	3,101,884	6,726,085	6,855,972

Fair value estimates are made at a point-in-time, based on relevant market data and information about the instrument. The methods and assumptions detailed above were used in estimating the fair value of financial instruments at both March 31, 2012 and December 31, 2011.  There were no transfers of financial instruments between Level 1 and Level 2 during the quarter ended March 31, 2012.

The following table represents assets measured at fair value on a recurring basis at March 31, 2012 (in thousands):

						Total
						assets at
	Level 1		Level 2		Level 3	fair value
Equity securities	$	17,071	—		—	17,071
Debt securities:
U.S. government and agencies	—		56		—	56
Government sponsored enterprises	—		65,067		—	65,067
States and political subdivisions	—		158,969		—	158,969
Corporate	—		11,369		8,290	19,659
Total debt securities	—		235,461		8,290	243,751
Residential mortgage-backed securities:
GNMA	—		46,572		—	46,572
FNMA	—		128,839		—	128,839
FHLMC	—		69,283		—	69,283
Non-agency	—		715		—	715
Collateralized mortgage obligations:
GNMA	—		27,770		—	27,770
FNMA	—		137,805		—	137,805
FHLMC	—		221,023		—	221,023
SBA	—		17,710		—	17,710
Non-agency	—		9,039		—	9,039
Total mortgage-backed securities	—		658,756		—	658,756
Interest rate swaps	—		(12,789	)	—	(12,789	)
Total assets	$	17,071	881,428		8,290	906,789

The following table represents assets measured at fair value on a recurring basis at December 31, 2011 (in thousands):

						Total
						assets at
	Level 1		Level 2		Level 3	fair value
Equity securities	$	12,465	—		—	12,465
Debt securities:
U.S. government and agencies	—		59		—	59
Government sponsored enterprises	—		76,179		—	76,179
States and political subdivisions	—		169,288		—	169,288
Corporate	—		11,477		9,657	21,134
Total debt securities	—		257,003		9,657	266,660
Residential mortgage-backed securities:
GNMA	—		48,297		—	48,297
FNMA	—		138,340		—	138,340
FHLMC	—		72,980		—	72,980
Non-agency	—		725		—	725
Collateralized mortgage obligations:
GNMA	—		30,759		—	30,759
FNMA	—		118,526		—	118,526
FHLMC			191,049			191,049
SBA	—		18,624		—	18,624
Non-agency	—		9,924		—	9,924
Total mortgage-backed securities	—		629,224		—	629,224
Interest rate swaps	—		(13,637	)	—	(13,637	)
Total assets	$	12,465	872,590		9,657	894,712

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 quarter ended March 31, 2012 (in thousands):

	Debt
	securities
Balance at December 31, 2011	$	9,657
Total net realized investment gains/ (losses) and net change in unrealized appreciation/ (depreciation):
Included in net income as OTTI	—
Included in other comprehensive income	(1,367		)
Purchases	—
Sales	—
Transfers in to Level 3	—
Transfers out of Level 3	—
Balance at March 31, 2012	$	8,290

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 quarter ended March 31, 2011 (in thousands):

	Debt
	securities
Balance at December 31, 2010	$	9,209
Total net realized investment gains/ (losses) and net change in unrealized appreciation/ (depreciation):
Included in net income as OTTI	—
Included in other comprehensive income	102
Purchases	—
Sales	—
Transfers in to of Level 3
Transfers out of of Level 3	—
Balance at March 31, 2011	$	9,311

Certain assets and liabilities are measured at fair value on a nonrecurring basis after initial recognition such as loans measured for impairment, loans held for sale and real estate owned.  The following table represents the fair value measurement for nonrecurring assets at March 31, 2012 (in thousands):

					Total
					assets at
	Level 1		Level 2	Level 3	fair value
Loans measured for impairment	$	—	—	14,916	14,916
Loans held for sale	14,222		—	—	14,222
Real estate owned	—		—	28,895	28,895
Total assets	$	14,222	—	43,811	58,033

Certain assets and liabilities are measured at fair value on a nonrecurring basis after initial recognition such as loans measured for impairment and real estate owned.  The following table represents the fair value measurement for nonrecurring assets at December 31, 2011 (in thousands):

					Total
					assets at
	Level 1		Level 2	Level 3	fair value
Loans measured for impairment	$	—	—	16,929	16,929
Real estate owned	—		—	26,887	26,887
Total assets	$	—	—	43,816	43,816

Impaired loans — A loan is considered to be impaired when it is probable that all of the principal and interest due under the original terms of the loan may not be collected.  Impairment is measured based on the fair value of the underlying collateral or discounted cash flows when collateral does not exist.  We measure impairment on all nonaccrual commercial and commercial real estate loans for which we have established specific reserves as part of the specific allocated allowance component of the allowance for loan losses.  We classify loans individually evaluated for impairment that require a specific reserve as nonrecurring Level 3.

Real Estate Owned — Real estate owned is comprised of property acquired through foreclosure or voluntarily conveyed by delinquent 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 all real estate owned as nonrecurring Level 3.

Loans held for sale — Mortgage loans held for sale are recorded at the lower of carrying value or fair value.  The fair value is based on what secondary markets are currently offering.  As the fair value is determined by a quoted price from FHLMC, and we only have open delivery contracts with FHLMC, we classify loans held for sale as nonrecurring Level 1.

The table below 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 March 31, 2012 (dollar amounts in thousands):

	Fair value		Valuation techniques	Significant unobservable inputs	Range (weighted average)
Debt securities	$	8,290	Discounted cash flow	Discount margin	0.35% to 2.1% (0.72)%
				Default rates	2.00%
				Prepayment speeds	1.00% annually
Loans measured for impairment	14,916		Appraisal value (1)	N/A	N/A
Real estate owned	28,895		Appraisal value (1)	N/A	N/A

(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.

The significant unobservable inputs used in the fait value measurement of our debt securities are discount margins, default rates and prepayment speeds.  Significant increases in any of those rates would result in a significantly lower fair value measurement.

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Goodwill and Other Intangible Assets

3 Months Ended

Mar. 31, 2012

Goodwill and Other Intangible Assets

Goodwill and Other Intangible Assets

(5)Goodwill and Other Intangible Assets

The following table provides information for intangible assets subject to amortization at the dates indicated (in thousands):

	March 31,			December 31,
	2012			2011
Amortizable intangible assets:
Core deposit intangibles — gross	$	30,578		30,578
Acquisitions	—			—
Less: accumulated amortization	(29,748		)	(29,549	)
Core deposit intangibles — net	830			1,029
Customer and Contract intangible assets — gross	3,779			3,779
Less: accumulated amortization	(2,781		)	(2,685	)
Customer and Contract intangible assets — net	$	998		1,094

The following table shows the actual aggregate amortization expense for the current quarter and prior year’s same quarter, as well as the estimated aggregate amortization expense, based upon current levels of intangible assets, for the current fiscal year and each of the five succeeding fiscal years (in thousands):

For the three months ended March 31, 2012	$	295
For the three months ended March 31, 2011	491
For the year ending December 31, 2012	1,013
For the year ending December 31, 2013	605
For the year ending December 31, 2014	296
For the year ending December 31, 2015	140
For the year ending December 31, 2016	70
For the year ending December 31, 2017	—

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

	Community		Consumer
	Banks		Finance	Total
Balance at December 31, 2010	$	170,269	1,613	171,882
Goodwill acquired	—		—	—
Impairment losses	—		—	—
Balance at December 31, 2011	170,269		1,613	171,882
Goodwill acquired	—		—	—
Impairment losses	—		—	—
Balance at March 31, 2012	$	170,269	1,613	171,882

We performed our annual goodwill impairment test as of June 30, 2011 and concluded that goodwill was not impaired.  At March 31, 2012, there were no changes in our operations that would cause us to update the goodwill impairment test performed as of June 30, 2011.

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Disclosures About Fair Value of Financial Instruments (Details 5) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2012
Debt securities
Quantitative information for Level 3 Fair Value Measurements Assets
Fair value	8,290
Debt securities | Discounted Cash Flow Valuation Technique [Member]
Quantitative information for Level 3 Fair Value Measurements Assets
Default rate	2.00%
Prepayment speeds	1.00%
Debt securities | Discounted Cash Flow Valuation Technique [Member] | Minimum
Quantitative information for Level 3 Fair Value Measurements Assets
Discount margin	0.35%
Debt securities | Discounted Cash Flow Valuation Technique [Member] | Maximum
Quantitative information for Level 3 Fair Value Measurements Assets
Discount margin	2.10%
Debt securities | Discounted Cash Flow Valuation Technique [Member] | Weighted Average [Member]
Quantitative information for Level 3 Fair Value Measurements Assets
Discount margin	0.72%
Loans evaluated for impairment
Quantitative information for Level 3 Fair Value Measurements Assets
Fair value	14,916
Real estate owned
Quantitative information for Level 3 Fair Value Measurements Assets
Fair value	28,895

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Investment securities and impairment of investment securities

3 Months Ended

Mar. 31, 2012

Investment securities and impairment of investment securities

Investment securities and impairment of investment securities

(3)Investment securities and impairment of investment securities

The following table shows the portfolio of investment securities available-for-sale at March 31, 2012 (in thousands):

			Gross	Gross
			unrealized	unrealized
	Amortized		holding	holding		Fair
	cost		gains	losses		value
Debt issued by the U.S. government and agencies:
Due in one year or less	$	56	—	—		56
Debt issued by government sponsored enterprises:
Due in one year - five years	26,296		44	—		26,340
Due in five years - ten years	29,163		474	—		29,637
Due after ten years	9,125		—	(35	)	9,090
Equity securities	12,398		4,676	(3	)	17,071
Municipal securities:
Due in one year - five years	8,880		245	—		9,125
Due in five years - ten years	26,427		1,093	—		27,520
Due after ten years	116,529		5,905	(110	)	122,324
Corporate debt issues:
Due in one year - five years	500		—	—		500
Due after ten years	25,019		275	(6,135	)	19,159
Residential mortgage-backed securities:
Fixed rate pass-through	102,152		7,528	(16	)	109,664
Variable rate pass-through	129,112		6,636	(4	)	135,744
Fixed rate non-agency CMOs	8,280		178	(307	)	8,151
Fixed rate agency CMOs	143,158		3,126	—		146,284
Variable rate non-agency CMOs	1,023		—	(135	)	888
Variable rate agency CMOs	256,114		2,038	(127	)	258,025
Total residential mortgage-backed securities	639,839		19,506	(589	)	658,756
Total marketable securities available-for-sale	$	894,232	32,218	(6,872	)	919,578

The following table shows the portfolio of investment securities available-for-sale at December 31, 2011 (in thousands):

			Gross	Gross
			unrealized	unrealized
	Amortized		holding	holding		Fair
	cost		gains	losses		value
Debt issued by the U.S. government and agencies:
Due in one year or less	$	59	—	—		59
Debt issued by government sponsored enterprises:
Due in one year - five years	36,295		134	—		36,429
Due in five years - ten years	29,557		638	(61	)	30,134
Due after ten years	9,665		—	(49	)	9,616
Equity securities	12,080		644	(259	)	12,465
Municipal securities:
Due in one year - five years	10,633		291	—		10,924
Due in five years - ten years	27,817		1,336	—		29,153
Due after ten years	124,041		5,350	(180	)	129,211
Corporate debt issues:
Due in one year or less	500		—	—		500
Due after ten years	25,036		233	(4,635	)	20,634
Residential mortgage-backed securities:
Fixed rate pass-through	110,364		8,201	(1	)	118,564
Variable rate pass-through	135,103		6,679	(4	)	141,778
Fixed rate non-agency CMOs	9,521		188	(735	)	8,974
Fixed rate CMOs	112,670		3,466	—		116,136
Variable rate non-agency CMOs	1,104		—	(154	)	950
Variable rate CMOs	240,963		1,991	(132	)	242,822
Total residential mortgage-backed securities	609,725		20,525	(1,026	)	629,224
Total marketable securities available-for-sale	$	885,408	29,151	(6,210	)	908,349

The following table shows the portfolio of investment securities held-to-maturity at March 31, 2012 (in thousands):

			Gross	Gross
			unrealized	unrealized
	Amortized		holding	holding	Fair
	cost		gains	losses	value
Municipal securities:
Due in Five years - ten years	$	3,678	171	—	3,849
Due after ten years	69,592		3,649	—	73,241
Residential mortgage-backed securities:
Fixed rate pass-through	22,815		1,117	—	23,932
Variable rate pass-through	8,649		54	—	8,703
Fixed rate agency CMOs	100,008		2,436	—	102,444
Variable rate agency CMOs	12,214		247	—	12,461
Total residential mortgage-backed securities	143,686		3,854	—	147,540
Total marketable securities held-to-maturity	$	216,956	7,674	—	224,630

The following table shows the portfolio of investment securities held-to-maturity at December 31, 2011 (in thousands):

			Gross	Gross
			unrealized	unrealized
	Amortized		holding	holding	Fair
	cost		gains	losses	value
Municipal securities:
Due in five years - ten years	$	3,677	174	—	3,851
Due after ten years	71,015		3,615	—	74,630
Residential mortgage-backed securities:
Fixed rate pass-through	24,160		1,099	—	25,259
Variable rate pass-through	9,066		94	—	9,160
Fixed rate agency CMOs	108,881		2,761	—	111,642
Variable rate agency CMOs	14,590		280	—	14,870
Total residential mortgage-backed securities	156,697		4,234	—	160,931
Total marketable securities held-to-maturity	$	231,389	8,023	—	239,412

We review our investment portfolio on a quarterly basis for indications of impairment.  This review includes analyzing the length of time and the extent to which the fair value has been lower than the amortized cost, the financial condition and near-term prospects of the issuer, including any specific events which may influence the operations of the issuer, and the intent to hold the investments for a period of time sufficient to allow for a recovery in value.  Other investments are evaluated using our best estimate of future cash flows. If the estimate of cash flows indicate that an adverse change has occurred, other-than-temporary impairment would be recognized for the amount of the loss that was deemed credit related.

The following table shows the fair value of 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 March 31, 2012 (in thousands):

	Less than 12 months				12 months or more			Total
			Unrealized			Unrealized			Unrealized
	Fair value		loss		Fair value	loss		Fair value	loss
U.S. government and agencies	$	—	—		9,090	(35	)	9,090	(35	)
Municipal securities	899		(17	)	1,489	(93	)	2,388	(110	)
Corporate issues	1,580		(171	)	13,479	(5,964	)	15,059	(6,135	)
Equity securities	—		—		16	(3	)	16	(3	)
Residential mortgage- backed securities - non-agency	—		—		4,899	(442	)	4,899	(442	)
Residential mortgage- backed securities - agency	80,745		(128	)	15,592	(19	)	96,337	(147	)
Total temporarily impaired securities	$	83,224	(316	)	44,565	(6,556	)	127,789	(6,872	)

The following table shows the fair value of 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, 2011 (in thousands):

	Less than 12 months				12 months or more			Total
			Unrealized			Unrealized			Unrealized
	Fair value		loss		Fair value	loss		Fair value	loss
U.S. government and agencies	$	24,601	(61	)	9,648	(49	)	34,249	(110	)
Municipal securities	—		—		2,317	(180	)	2,317	(180	)
Corporate issues	3,537		(219	)	15,067	(4,416	)	18,604	(4,635	)
Equities	4,178		(258	)	18	(1	)	4,196	(259	)
Residential mortgage- backed securities - non-agency	—		—		4,971	(889	)	4,971	(889	)
Residential mortgage- backed securities - agency	85,921		(100	)	14,353	(37	)	100,274	(137	)
Total temporarily impaired securities	$	118,237	(638	)	46,374	(5,572	)	164,611	(6,210	)

Corporate issues

As of March 31, 2012, we had six investments with a total book value of $19.4 million and total fair value of $13.5 million, where the book value exceeded the carrying value for more than 12 months.  These investments were two single issuer trust preferred investments and four pooled trust preferred investments.  The single issuer trust preferred investments were evaluated for other-than-temporary impairment by determining the strength of the underlying issuer.  In both cases, the underlying issuer was “well-capitalized” for regulatory purposes. Neither of the issuers have deferred interest payments or announced the intention to defer interest payments, nor have either been downgraded.  We believe the decline in fair value is related to the spread over three month LIBOR, on which the quarterly interest payments are based, as the spread over LIBOR is significantly lower than current market spreads on similar investments.  We concluded the impairment of these two investments was considered noncredit related and temporary.  In making that determination, we also considered the duration and the severity of the losses and whether we intend to hold these securities until the value is recovered, the securities are redeemed or maturity.  The pooled trust preferred investments were evaluated for other-than-temporary impairment by considering the duration and severity of the losses, actual cash flows, projected cash flows, performing collateral, the class of investment owned and the amount of additional defaults the structure could withstand prior to the investment experiencing a disruption in cash flows.  None of these investments experienced a cash flow disruption or are projecting a cash flow disruption.

We concluded, based on all facts evaluated, the impairment of these investments was considered noncredit related and temporary.  Management asserts that we do not have the intent to sell these investments and that it is more likely than not, we will not have to sell the investments before recovery of their cost basis.

The following table provides class, book value, fair value and ratings information for our portfolio of corporate securities that have an unrealized loss at March 31, 2012 (in thousands):

		Total
		Book		Fair	Unrealized		Moody’s/ Fitch
Description	Class	Value		Value	Losses		Ratings
Bank Boston Capital Trust (1)	N/A	$	989	694	(295	)	Ba1/ BB
Huntington Capital Trust	N/A	1,425		1,038	(387	)	Baa3/ BB
Commercebank Capital Trust	N/A	887		880	(7	)	Not rated
Ocean Shore Capital Trust	N/A	864		700	(164	)	Not rated
I-PreTSL I	Mezzanine	1,500		443	(1,057	)	Not rated/ CCC
I-PreTSL II	Mezzanine	1,500		605	(895	)	Not rated/ B
PreTSL XIX	Senior A-1	8,626		6,365	(2,261	)	Baa2/ BBB
PreTSL XX	Senior A-1	5,403		4,334	(1,069	)	Ba2/ BB
		$	21,194	15,059	(6,135	)

(1) — Bank Boston was acquired by Bank of America.

The following table provides collateral information on the entire pool for the trust preferred securities included in the previous table at March 31, 2012 (in thousands):

					Additional
					Immediate
					defaults before
			Current		causing an
	Total		deferrals	Performing	interest
Description *	Collateral		and defaults	Collateral	shortfall
I-PreTSL I	$	188,500	32,500	156,000	93,251
I-PreTSL II	340,500		17,500	323,000	156,787
PreTSL XIX	649,981		179,150	470,831	146,000
PreTSL XX	552,238		174,500	377,738	96,500

Mortgage-backed securities

Mortgage-backed securities include agency (FNMA, FHLMC and GNMA) mortgage-backed securities and non-agency collateralized mortgage obligations (“CMOs”).  We review our portfolio of agency mortgage-backed securities quarterly for impairment.  As of March 31, 2012, we believe that the impairment within our portfolio of agency mortgage-backed securities is noncredit related and temporary.  As of March 31, 2012, we had ten non-agency CMOs with a total book value of $9.3 million and a total fair value of $9.0 million.  During the three months ended March 31, 2012, we recognized other-than-temporary credit related impairment of $238,000 related to one of these investments.  After recognizing the other-than-temporary impairment, our book value on this investment was $4.3 million, with a fair value of $4.0 million.  We determined how much of the impairment was credit related and noncredit related by analyzing cash flow estimates, estimated prepayment speeds, loss severity and conditional default rates.  We consider the discounted cash flow analysis to be our primary evidence when determining whether credit related other-than-temporary impairment exists.  The impairment on the other nine non-agency CMOs, with book value of $5.0 million and fair value of $5.0 million, were also reviewed considering the severity and length of impairment.  After this review, we determined that the impairment on these securities was noncredit related and temporary.

The following table shows issuer specific information, book value, fair value, unrealized gain or loss and other-than-temporary impairment recorded in earnings for the portfolio of non-agency CMOs at March 31, 2012 (in thousands):

								Total
						Impairment		impairment
						recorded in		recorded in
	Book		Fair	Unrealized		current period		prior period
Description	Value		Value	Gain/ (loss)		earnings		earnings
AMAC 2003-6 2A2	$	323	331	8		—		—
AMAC 2003-6 2A8	667		686	19		—		—
AMAC 2003-7 A3	395		399	4		—		—
BOAMS 2005-11 1A8	1,501		1,629	128		—		(146	)
CWALT 2005-J14 A3	4,318		4,011	(307	)	(238	)	(676	)
CFSB 2003-17 2A2	615		625	10		—		—
WAMU 2003-S2 A4	461		470	9		—		—
CMLTI 2005-10 1A5B	58		3	(55	)	—		(3,531	)
SARM 2005-21 4A2	23		16	(7	)	—		(3,193	)
WFMBS 2003-B A2	942		869	(73	)	—		—
	$	9,303	9,039	(264	)	(238	)	(7,546	)

Municipal Securities

At March 31, 2012, we had two investments in municipal securities with a total book value of $1.6 million and a total fair value of $1.5 million, where book value exceeded fair value for more than 12 months.  We initially evaluate municipal securities for other-than-temporary impairment by comparing the fair value, provided to us by two third party pricing sources using quoted prices for similar assets that are actively traded, to the carrying value.  When an investment’s fair value is below 80% of the carrying value we then look at the stated interest rate and compare the stated interest rate to current market interest rates to determine if the decline in fair value is considered to be attributable to interest rates.  If the interest rate approximates current interest rates for similar securities, we determine if the investment is rated and if so, if the rating has changed in the current period.  If the rating has not changed during the current period, we review publicly available information to determine if there has been any negative change in the underlying municipality.  As of March 31, 2012, we have determined that all of the impairment in our municipal securities portfolio is noncredit related and temporary. The two investments in municipal securities discussed above were issued by two Pennsylvania municipalities.

The following table provides information for our portfolio of municipal securities that have unrealized losses for greater than 12 months at March 31, 2012 (in thousands):

		Total
		Book		Fair	Unrealized
Description	State	Value		Value	Losses		Rating
Cambridge Area JT Revenue	PA	$	595	566	(29	)	Not rated
West Reading General Obligation	PA	987		923	(64	)	BBB
		$	1,582	1,489	(93	)

Credit related other-than-temporary impairment on debt securities is recognized in earnings while noncredit related other-than-temporary impairment on debt securities, not expected to be sold, is recognized in other comprehensive income.

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

	2012		2011
Beginning balance at Janaury 1, (a)	$	16,382	15,445
Credit losses on debt securities for which other-than-temporary impairment was not previously recognized	—		—
Additional credit losses on debt securities for which other-than-temporary impairment was previously recognized	238		—
Ending balance at March 31,	$	16,620	15,445

(a) — 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

3 Months Ended

Mar. 31, 2012

Loans receivable

Loans receivable

(4)Loans receivable

We have defined our portfolio segments as Personal Banking loans and Business Banking loans.  Classes of Personal Banking loans are residential mortgage loans, home equity loans and other consumer loans.  Classes of Business Banking loans are commercial real estate loans and commercial loans. The following table shows a summary of our loans receivable at March 31, 2012 and December 31, 2011 (in thousands):

	March 31,			December 31,
	2012			2011
Personal Banking:
Residential mortgage loans	$	2,449,991		2,414,992
Home equity loans	1,058,938			1,084,786
Other consumer loans	237,591			245,689
Total Personal Banking	3,746,520			3,745,467
Business Banking:
Commercial real estate	1,516,583			1,481,127
Commercial loans	430,902			408,462
Total Business Banking	1,947,485			1,889,589
Total loans receivable, gross	5,694,005			5,635,056
Deferred loan fees	(4,026		)	(4,752	)
Allowance for loan losses	(72,941		)	(71,138	)
Undisbursed loan proceeds:
Residential mortgage loans	(19,032		)	(12,874	)
Commercial real estate	(41,007		)	(45,360	)
Commercial loans	(22,008		)	(20,551	)
Total loans receivable, net	$	5,534,991		5,480,381

The following table provides information related to the allowance for loan losses by portfolio segment and by class of financing receivable at March 31, 2012 (in thousands):

	Balance December 31, 2011		Current period provision	Charge-offs		Recoveries	Balance March 31, 2012
Personal Banking:
Residental mortgage loans	$	8,482	327	(1,043	)	98	7,864
Home equity loans	8,687		128	(892	)	24	7,947
Other consumer loans	5,325		207	(1,287	)	344	4,589
Total Personal Banking	22,494		662	(3,222	)	466	20,400
Business Banking:
Commercial real estate loans	32,148		4,319	(1,473	)	297	35,291
Commercial loans	12,080		1,192	(649	)	97	12,720
Total Business Banking	44,228		5,511	(2,122	)	394	48,011
Unallocated	4,416		114	—		—	4,530
Total	$	71,138	6,287	(5,344	)	860	72,941

The following table provides information related to the allowance for loan losses by portfolio segment and by class of financing receivable at March 31, 2011 (in thousands):

	Balance December 31, 2010		Current period provision		Charge-offs		Recoveries	Balance March 31, 2011
Personal Banking:
Residental mortgage loans	$	6,854	2,286		(1,205	)	71	8,006
Home equity loans	7,675		1,403		(2,255	)	17	6,840
Other consumer loans	5,810		581		(1,232	)	397	5,556
Total Personal Banking	20,339		4,270		(4,692	)	485	20,402
Business Banking:
Commercial real estate loans	35,832		278		(2,276	)	206	34,040
Commercial loans	15,770		2,869		(1,041	)	112	17,710
Total Business Banking	51,602		3,147		(3,317	)	318	51,750
Unallocated	4,471		(173	)	—		—	4,298
Total	$	76,412	7,244		(8,009	)	803	76,450

The following table provides information related to the loan portfolio by portfolio segment and by class of financing receivable at March 31, 2012 (in thousands):

	Recorded investment in loans receivable		Allowance for loan losses	Recorded investment in loans on nonaccrual	Recorded investment in loans past due 90 days or more and still accruing	TDRs
Personal Banking:
Residental mortgage loans	$	2,426,933	7,864	28,696	11	806
Home equity loans	1,058,938		7,947	9,100	342	—
Other consumer loans	237,591		4,589	1,983	423	—
Total Personal Banking	3,723,462		20,400	39,779	776	806
Business Banking:
Commercial real estate loans	1,475,576		35,291	58,400	—	38,995
Commercial loans	408,894		12,720	26,834	24	27,502
Total Business Banking	1,884,470		48,011	85,234	24	66,497
Total	$	5,607,932	68,411	125,013	800	67,303

The following table provides information related to the loan portfolio by portfolio segment and by class of financing receivable at December 31, 2011 (in thousands):

	Recorded investment in loans receivable		Allowance for loan losses	Recorded investment in loans on nonaccrual	Recorded investment in loans past due 90 days or more and still accruing	TDRs
Personal Banking:
Residental mortgage loans	$	2,397,366	8,482	28,221	12	806
Home equity loans	1,084,786		8,687	9,560	221	—
Other consumer loans	245,689		5,325	2,667	277	—
Total Personal Banking	3,727,841		22,494	40,448	510	806
Business Banking:
Commercial real estate loans	1,435,767		32,148	62,494	—	38,216
Commercial loans	387,911		12,080	28,163	—	30,407
Total Business Banking	1,823,678		44,228	90,657	—	68,623
Total	$	5,551,519	66,722	131,105	510	69,429

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 quarter ended March 31, 2012 (in thousands):

	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:
Residental mortgage loans	$	28,696	—	—	—	28,696	29,327	170
Home equity loans	9,100		—	—	—	9,100	9,545	68
Other consumer loans	1,983		—	—	—	1,983	2,499	13
Total Personal Banking	39,779		—	—	—	39,779	41,371	251
Business Banking:
Commercial real estate loans	34,601		23,799	24,012	9,218	91,630	91,747	878
Commercial loans	15,810		11,024	8,332	8,744	43,910	45,802	369
Total Business Banking	50,411		34,823	32,344	17,962	135,540	137,549	1,247
Total	$	90,190	34,823	32,344	17,962	175,319	178,920	1,498

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, 2011 (in thousands):

	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:
Residental mortgage loans	$	28,221	—	—	361	28,582	30,731	538
Home equity loans	9,560		—	—	—	9,560	9,574	182
Other consumer loans	2,667		—	—	—	2,667	2,340	34
Total Personal Banking	40,448		—	—	361	40,809	42,645	754
Business Banking:
Commercial real estate loans	44,603		17,891	15,467	16,097	94,058	101,731	3,640
Commercial loans	10,785		17,378	7,337	8,991	44,491	59,897	1,642
Total Business Banking	55,388		35,269	22,804	25,088	138,549	161,628	5,282
Total	$	95,836	35,269	22,804	25,449	179,358	204,273	6,036

The following table provides information related to the evaluation of impaired loans by portfolio segment and by class of financing receivable at March 31, 2012 (in thousands):

	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:
Residental mortgage loans	$	2,426,933	—	—	—	—
Home equity loans	1,058,938		—	—	—	—
Other consumer loans	237,591		—	—	—	—
Total Personal Banking	3,723,462		—	—	—	—
Business Banking:
Commercial real estate loans	1,432,081		43,495	16,334	4,918	27,161
Commercial loans	384,711		24,183	4,614	1,114	19,569
Total Business Banking	1,816,792		67,678	20,948	6,032	46,730
Total	$	5,540,254	67,678	20,948	6,032	46,730

The following table provides information related to the evaluation of impaired loans by portfolio segment and by class of financing receivable at December 31, 2011 (in thousands):

	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:
Residental mortgage loans	$	2,397,366	—	—	—	—
Home equity loans	1,084,786		—	—	—	—
Other consumer loans	245,689		—	—	—	—
Total Personal Banking	3,727,841		—	—	—	—
Business Banking:
Commercial real estate loans	1,395,634		40,133	15,576	3,025	24,557
Commercial loans	361,033		26,878	5,897	1,519	20,981
Total Business Banking	1,756,667		67,011	21,473	4,544	45,538
Total	$	5,484,508	67,011	21,473	4,544	45,538

Our loan portfolios include certain loans that have been modified in a troubled debt restructuring (TDR), where 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 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. 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.

During the three months ended March 31, 2012, one commercial real estate loan TDR with a balance of $282,000 was charged off and one commercial loan TDR with a balance of $213,000 was paid off.

The following table provides information related to troubled debt restructurings by portfolio segment and by class of financing receivable for the periods indicated (dollars in thousands):

	For the three months ended March 31, 2012
	Number of contracts	Recorded investment at the time of modification		Current recorded investment	Current allowance
Troubled debt restructurings:
Personal Banking:
Residential mortgage loans	—	$	—	—	—
Home equity loans	—	—		—	—
Other consumer loans	—	—		—	—
Total Personal Banking	—	—		—	—
Business Banking:
Commercial real estate loans	3	1,400		1,391	636
Commercial loans	3	1,645		1,446	84
Total Business Banking	6	3,045		2,837	720
Total	6	$	3,045	2,837	720
Troubled debt restructurings that subsequently defaulted:
Personal Banking:
Residential mortgage loans	1	$	449	361	470
Home equity loans	—	—		—	—
Other consumer loans	—	—		—	—
Total Personal Banking	1	449		361	470
Business Banking:
Commercial real estate loans	1	575		520	—
Commercial loans	—	—		—	—
Total Business Banking	1	575		520	—
Total	2	$	1,024	881	470

The following table provides information related to troubled debt restructurings by portfolio segment and by class of financing receivable for the periods indicated (dollars in thousands):

	For the three months ended March 31, 2011
	Number of contracts	Recorded investment at the time of modification		Current recorded investment	Current allowance
Troubled debt restructurings:
Personal Banking:
Residential mortgage loans	1	$	449	363	1
Home equity loans	—	—		—	—
Other consumer loans	—	—		—	—
Total Personal Banking	1	449		363	1
Business Banking:
Commercial real estate loans	3	1,758		1,734	129
Commercial loans	5	12,934		11,684	3,754
Total Business Banking	8	14,692		13,418	3,883
Total	9	$	15,141	13,781	3,884
Troubled debt restructurings that subsequently defaulted:
Personal Banking:
Residential mortgage loans	—	$	—	—	—
Home equity loans	—	—		—	—
Other consumer loans	—	—		—	—
Total Personal Banking	—	—		—	—
Business Banking:
Commercial real estate loans	—	—		—	—
Commercial loans	1	9,303		9,180	918
Total Business Banking	1	9,303		9,180	918
Total	1	$	9,303	9,180	918

The following table provides information related to loan delinquencies at March 31, 2012 (in thousands):

	30-59 Days Delinquent		60-89 Days Delinquent	90 Days or Greater Delinquent	Total Delinquency	Current	Total Loans
Personal Banking:
Residential mortgage loans	$	29,414	1,466	28,696	59,576	2,367,357	2,426,933
Home equity loans	7,086		2,313	9,100	18,499	1,040,439	1,058,938
Other consumer loans	2,854		1,083	1,983	5,920	231,671	237,591
Total Personal Banking	39,354		4,862	39,779	83,995	3,639,467	3,723,462
Business Banking:
Commercial real estate loans	9,275		3,203	34,601	47,079	1,428,497	1,475,576
Commercial loans	7,069		1,376	15,810	24,255	384,639	408,894
Total Business Banking	16,344		4,579	50,411	71,334	1,813,136	1,884,470
Total	$	55,698	9,441	90,190	155,329	5,452,603	5,607,932

The following table provides information related to loan delinquencies at December 31, 2011 (in thousands):

	30-59 Days Delinquent		60-89 Days Delinquent	90 Days or Greater Delinquent	Total Delinquency	Current	Total Loans
Personal Banking:
Residential mortgage loans	$	33,671	8,629	28,221	70,521	2,326,845	2,397,366
Home equity loans	7,426		1,953	9,560	18,939	1,065,847	1,084,786
Other consumer loans	4,854		1,787	2,667	9,308	236,381	245,689
Total Personal Banking	45,951		12,369	40,448	98,768	3,629,073	3,727,841
Business Banking:
Commercial real estate loans	10,680		3,122	44,603	58,405	1,377,362	1,435,767
Commercial loans	2,027		4,958	10,785	17,770	370,141	387,911
Total Business Banking	12,707		8,080	55,388	76,175	1,747,503	1,823,678
Total	$	58,658	20,449	95,836	174,943	5,376,576	5,551,519

Credit quality indicators:  We categorize Business Banking 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 Banking loans individually by classifying the loans by credit risk.  Loans designated as special mention or classified 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, which were updated during the quarter ended March 31, 2012 (in thousands):

	Pass		Special Mention	Substandard	Doubtful	Loss	Total
Personal Banking:
Residential mortgage loans	$	2,403,635	—	21,989	23	1,286	2,426,933
Home equity loans	1,049,352		—	9,586	—	—	1,058,938
Other consumer loans	236,817		—	774	—	—	237,591
Total Personal Banking	3,689,804		—	32,349	23	1,286	3,723,462
Business Banking:
Commercial real estate loans	1,259,031		78,960	132,711	4,874	—	1,475,576
Commercial loans	319,677		27,053	59,376	2,788	—	408,894
Total Business Banking	1,578,708		106,013	192,087	7,662	—	1,884,470
Total	$	5,268,512	106,013	224,436	7,685	1,286	5,607,932

The following table sets forth information about credit quality indicators, which were updated during the year ended December 31, 2011 (in thousands):

	Pass		Special Mention	Substandard	Doubtful	Loss	Total
Personal Banking:
Residential mortgage loans	$	2,373,275	—	22,843	11	1,237	2,397,366
Home equity loans	1,074,512		—	10,274	—	—	1,084,786
Other consumer loans	244,491		—	1,198	—	—	245,689
Total Personal Banking	3,692,278		—	34,315	11	1,237	3,727,841
Business Banking:
Commercial real estate loans	1,211,583		75,981	144,947	3,256	—	1,435,767
Commercial loans	298,597		23,887	62,753	2,674	—	387,911
Total Business Banking	1,510,180		99,868	207,700	5,930	—	1,823,678
Total	$	5,202,458	99,868	242,015	5,941	1,237	5,551,519

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Guarantees

3 Months Ended

Mar. 31, 2012

Guarantees

Guarantees

(6)          Guarantees

We issue standby letters of credit in the normal course of business.  Standby letters of credit are conditional commitments issued by the Company 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 loan underwriting procedures.  Collateral may be obtained based on management’s credit assessment of the customer.  At March 31, 2012, the maximum potential amount of future payments we could be required to make under these standby letters of credit was $63.2 million, of which $62.0 million is fully collateralized.  At March 31, 2012, we had a liability, which represents deferred income, of $701,000 related to the standby letters of credit.  There are no recourse provisions that would enable us to recover any amounts from third parties.

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Guaranteed Preferred Beneficial Interests in Company's Junior Subordinated Deferrable Interest Debentures (Trust Preferred Securities) and Interest Rate Swaps (Details 2) (Interest rate swap agreements, USD $) In Thousands, unless otherwise specified	Mar. 31, 2012	Dec. 31, 2011
Interest rate swap agreements
Liability Derivatives, Included in Other Liabilities
Fair value	$ 12,789	$ 13,637
Notional amount	100,000	100,000
Collateral posted	$ 12,789	$ 13,637

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Investment securities and impairment of investment securities (Details) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2012	Dec. 31, 2011
Amortized cost
Total	$ 894,232	$ 885,408
Gross unrealized holding gains
Total	32,218	29,151
Gross unrealized holding losses
Total	(6,872)	(6,210)
Fair value
Total	919,578	908,349
Non-agency CMOs
Gross unrealized holding losses
Total	(264)
Fair value
Total	9,039
Debt issued by the U.S. government and agencies
Amortized cost
Due in one year or less	56	59
Fair value
Due in one year or less	56	59
Debt issued by government sponsored enterprises
Amortized cost
Due in one year - five years	26,296	36,295
Due in five years - ten years	29,163	29,557
Due after ten years	9,125	9,665
Gross unrealized holding gains
Due in one year - five years	44	134
Due in five years - ten years	474	638
Gross unrealized holding losses
Due in five years - ten years		(61)
Due after ten years	(35)	(49)
Fair value
Due in one year - five years	26,340	36,429
Due in five years - ten years	29,637	30,134
Due after ten years	9,090	9,616
Equity securities
Amortized cost
Total	12,398	12,080
Gross unrealized holding gains
Total	4,676	644
Gross unrealized holding losses
Total	(3)	(259)
Fair value
Total	17,071	12,465
Municipal securities
Amortized cost
Due in one year - five years	8,880	10,633
Due in five years - ten years	26,427	27,817
Due after ten years	116,529	124,041
Gross unrealized holding gains
Due in one year - five years	245	291
Due in five years - ten years	1,093	1,336
Due after ten years	5,905	5,350
Gross unrealized holding losses
Due after ten years	(110)	(180)
Fair value
Due in one year - five years	9,125	10,924
Due in five years - ten years	27,520	29,153
Due after ten years	122,324	129,211
Corporate debt issues
Amortized cost
Due in one year or less		500
Due in one year - five years	500
Due after ten years	25,019	25,036
Gross unrealized holding gains
Due after ten years	275	233
Gross unrealized holding losses
Due after ten years	(6,135)	(4,635)
Fair value
Due in one year or less		500
Due in one year - five years	500
Due after ten years	19,159	20,634
Residential mortgage-backed securities
Amortized cost
Total	639,839	609,725
Gross unrealized holding gains
Total	19,506	20,525
Gross unrealized holding losses
Total	(589)	(1,026)
Fair value
Total	658,756	629,224
Fixed rate | Pass-through
Amortized cost
Total	102,152	110,364
Gross unrealized holding gains
Total	7,528	8,201
Gross unrealized holding losses
Total	(16)	(1)
Fair value
Total	109,664	118,564
Fixed rate | Non-agency CMOs
Amortized cost
Total	8,280	9,521
Gross unrealized holding gains
Total	178	188
Gross unrealized holding losses
Total	(307)	(735)
Fair value
Total	8,151	8,974
Fixed rate | Agency CMOs
Amortized cost
Total	143,158	112,670
Gross unrealized holding gains
Total	3,126	3,466
Fair value
Total	146,284	116,136
Variable rate | Pass-through
Amortized cost
Total	129,112	135,103
Gross unrealized holding gains
Total	6,636	6,679
Gross unrealized holding losses
Total	(4)	(4)
Fair value
Total	135,744	141,778
Variable rate | Non-agency CMOs
Amortized cost
Total	1,023	1,104
Gross unrealized holding losses
Total	(135)	(154)
Fair value
Total	888	950
Variable rate | Agency CMOs
Amortized cost
Total	256,114	240,963
Gross unrealized holding gains
Total	2,038	1,991
Gross unrealized holding losses
Total	(127)	(132)
Fair value
Total	$ 258,025	$ 242,822

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Goodwill and Other Intangible Assets (Details 2) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2012	Dec. 31, 2011	Dec. 31, 2010
Changes in the carrying amount of goodwill
Balance at the beginning of the period	$ 171,882	$ 171,882	$ 171,882
Balance at the end of the period	171,882	171,882	171,882
Community Banks
Changes in the carrying amount of goodwill
Balance at the beginning of the period	170,269	170,269	170,050
Balance at the end of the period	170,269	170,269	170,050
Consumer Finance
Changes in the carrying amount of goodwill
Balance at the beginning of the period	1,613	1,613	1,613
Balance at the end of the period	$ 1,613	$ 1,613	$ 1,613

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Guaranteed Preferred Beneficial Interests in the Company's Junior Subordinated Deferrable Interest Debentures (Trust Preferred Securities) and Interest Rate Swaps

3 Months Ended

Mar. 31, 2012

Guaranteed Preferred Beneficial Interests in the Company's Junior Subordinated Deferrable Interest Debentures (Trust Preferred Securities) and Interest Rate Swaps

Guaranteed Preferred Beneficial Interests in the Company's Junior Subordinated Deferrable Interest Debentures (Trust Preferred Securities) and Interest Rate Swaps

(11)         Guaranteed Preferred Beneficial Interests in the Company’s Junior Subordinated Deferrable Interest Debentures (Trust Preferred Securities) and Interest Rate Swaps

We have two statutory business trusts: Northwest Bancorp Capital Trust III, a Delaware statutory business trust and Northwest Bancorp Statutory Trust IV, a Connecticut statutory business trust (“Trusts”).  These 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 the 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 (Trust III) issued 50,000 cumulative trust preferred securities in a private transaction to a pooled investment vehicle on December 5, 2006 (liquidation value of $1,000 per preferred security or $50,000,000) with a stated maturity of December 30, 2035.  These securities carry a floating interest rate, which is reset quarterly, equal to three-month LIBOR plus 1.38%.  Northwest Bancorp Statutory Trust IV (Trust IV) issued 50,000 cumulative trust preferred securities in a private transaction to a pooled investment vehicle on December 15, 2006 (liquidation value of $1,000 per preferred security or $50,000,000) with a stated maturity of December 15, 2035.  These securities carry a floating interest rate, which is reset quarterly, equal to three-month LIBOR plus 1.38%.  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.  Trust III holds $51,547,000 of the Company’s junior subordinated debentures and Trust IV holds $51,547,000 of the Company’s junior subordinated debentures.  These subordinated debentures are the sole assets of the Trusts.      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 five years.  If interest payments on the subordinated debentures are deferred, the distributions on the trust preferred securities are also deferred.  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.

We entered into four 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 Trust III and Trust IV.  The first two swaps modify the re-pricing characteristics of Trust III, wherein (i) the Company receives interest of three-month LIBOR from a counterparty and pays a fixed rate of 4.20% to the same counterparty calculated on a notional amount of $25.0 million and (ii) 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 terms of these two swaps are five years and ten years, which expire September 2013 and September 2018, respectively.  The second two swaps modify the re-pricing characteristics of Trust IV, wherein (i) the Company receives interest of three-month LIBOR from a counterparty and pays a fixed rate of 3.85% to the same counterparty calculated on a notional amount of $25.0 million and (ii) 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 terms of these two swaps are seven years and ten years, which expire September 2015 and September 2018, respectively.  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 March 31, 2012, $12.8 million was pledged as collateral to the counterparty.

At March 31, 2012, the fair value of the swap agreements was $(12.8) million and was the amount we would have expected to pay if the contracts were terminated.  There was no material hedge ineffectiveness for these swaps.

The following table shows liability derivatives, included in other liabilities, at March 31, 2012 and December 31, 2011 (in thousands):

	March 31,		December 31,
	2012		2011
Fair value	$	12,789	13,637
Notional amount	100,000		100,000
Collateral posted	12,789		13,637

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Earnings Per Share (Tables)

3 Months Ended

Mar. 31, 2012

Earnings Per Share

Schedule of computation of basic and diluted earnings per share

	Quarter ended
	March 31,
	2012		2011
Reported net income	$	15,181	17,253
Weighted average common shares outstanding	94,115,522		106,571,262
Dilutive potential shares due to effect of stock options	549,811		687,058
Total weighted average common shares and dilutive potential shares	94,665,333		107,258,320
Basic earnings per share:	$	0.16	0.16
Diluted earnings per share:	$	0.16	0.16

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Loans receivable (Details 8) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2012	Dec. 31, 2011	Mar. 31, 2011
Credit quality indicators
Total loans	$ 5,607,932	$ 5,551,519	$ 5,551,519
Pass
Credit quality indicators
Total loans	5,268,512	5,202,458
Special Mention
Credit quality indicators
Total loans	106,013	99,868
Substandard
Credit quality indicators
Total loans	224,436	242,015
Doubtful
Credit quality indicators
Total loans	7,685	5,941
Loss
Credit quality indicators
Total loans	1,286	1,237
Personal Banking
Credit quality indicators
Total loans	3,723,462	3,727,841	3,727,841
Personal Banking | Pass
Credit quality indicators
Total loans	3,689,804	3,692,278
Personal Banking | Substandard
Credit quality indicators
Total loans	32,349	34,315
Personal Banking | Doubtful
Credit quality indicators
Total loans	23	11
Personal Banking | Loss
Credit quality indicators
Total loans	1,286	1,237
Personal Banking | Residential mortgage loans
Credit quality indicators
Total loans	2,426,933	2,397,366	2,397,366
Personal Banking | Residential mortgage loans | Pass
Credit quality indicators
Total loans	2,403,635	2,373,275
Personal Banking | Residential mortgage loans | Substandard
Credit quality indicators
Total loans	21,989	22,843
Personal Banking | Residential mortgage loans | Doubtful
Credit quality indicators
Total loans	23	11
Personal Banking | Residential mortgage loans | Loss
Credit quality indicators
Total loans	1,286	1,237
Personal Banking | Home equity loans
Credit quality indicators
Total loans	1,058,938	1,084,786	1,084,786
Personal Banking | Home equity loans | Pass
Credit quality indicators
Total loans	1,049,352	1,074,512
Personal Banking | Home equity loans | Substandard
Credit quality indicators
Total loans	9,586	10,274
Personal Banking | Other consumer loans
Credit quality indicators
Total loans	237,591	245,689	245,689
Personal Banking | Other consumer loans | Pass
Credit quality indicators
Total loans	236,817	244,491
Personal Banking | Other consumer loans | Substandard
Credit quality indicators
Total loans	774	1,198
Business Banking
Credit quality indicators
Total loans	1,884,470	1,823,678	1,823,678
Business Banking | Pass
Credit quality indicators
Total loans	1,578,708	1,510,180
Business Banking | Special Mention
Credit quality indicators
Total loans	106,013	99,868
Business Banking | Substandard
Credit quality indicators
Total loans	192,087	207,700
Business Banking | Doubtful
Credit quality indicators
Total loans	7,662	5,930
Business Banking | Commercial real estate
Credit quality indicators
Total loans	1,475,576	1,435,767	1,435,767
Business Banking | Commercial real estate | Pass
Credit quality indicators
Total loans	1,259,031	1,211,583
Business Banking | Commercial real estate | Special Mention
Credit quality indicators
Total loans	78,960	75,981
Business Banking | Commercial real estate | Substandard
Credit quality indicators
Total loans	132,711	144,947
Business Banking | Commercial real estate | Doubtful
Credit quality indicators
Total loans	4,874	3,256
Business Banking | Commercial loans
Credit quality indicators
Total loans	408,894	387,911	387,911
Business Banking | Commercial loans | Pass
Credit quality indicators
Total loans	319,677	298,597
Business Banking | Commercial loans | Special Mention
Credit quality indicators
Total loans	27,053	23,887
Business Banking | Commercial loans | Substandard
Credit quality indicators
Total loans	59,376	62,753
Business Banking | Commercial loans | Doubtful
Credit quality indicators
Total loans	$ 2,788	$ 2,674

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Investment securities and impairment of investment securities (Details 8) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2012	Mar. 31, 2011	Dec. 31, 2010
Cumulative roll forward of credit losses recognized in earnings for debt securities held and not intended to be sold:
Beginning balance	$ 16,382	$ 15,445	$ 15,445
Additional credit losses on debt securities for which other-than-temporary impairment was previously recognized	238
Ending balance	$ 16,620	$ 15,445	$ 15,445

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CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2012	Mar. 31, 2011
Net Income	$ 15,181	$ 17,253
Net unrealized holding gains on marketable securities:
Unrealized holding gains net of tax of $(870) and $(1,131), respectively	1,361	2,101
Other-than-temporary impairment on securities included in net income, net of tax of $(93) and $0, respectively	145
Reclassification adjustment for gains included in net income, net of tax of $31 and $8, respectively	(49)	(16)
Net unrealized holding gains on marketable securities	1,457	2,085
Change in fair value of interest rate swaps, net of tax of $(297) and $(481), respectively	551	894
Other comprehensive income	2,008	2,979
Total comprehensive income	$ 17,189	$ 20,232

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CONSOLIDATED STATEMENTS OF CASH FLOWS (Parenthetical) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2012	Mar. 31, 2011
CONSOLIDATED STATEMENTS OF CASH FLOWS
Interest on deposits and borrowings, interest credited to deposit accounts	$ 11,065	$ 13,731

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Disclosures About Fair Value of Financial Instruments (Details 3) (Debt securities, USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2012	Mar. 31, 2011
Debt securities
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	$ 9,657	$ 9,209
Total net realized investment gains/ (losses) and net change in unrealized appreciation/ (depreciation):
Included in other comprehensive income	(1,367)	102
Balance at the end of the period	$ 8,290	$ 9,311

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Pension and Other Post-retirement Benefits (in thousands): (Tables)

3 Months Ended

Mar. 31, 2012

Pension and Other Post-retirement Benefits (in thousands):

Schedule of components of net periodic benefit cost

	Quarter ended March 31,
	Pension Benefits					Other Post-retirement Benefits
	2012			2011		2012	2011
Service cost	$	1,858		1,428		—	—
Interest cost	1,432			1,363		17	21
Expected return on plan assets	(1,948		)	(1,502	)	—	—
Amortization of prior service cost	(40		)	(40	)	—	—
Amortization of the net loss	690			169		12	13
Net periodic benefit cost	$	1,992		1,418		29	34

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Investment securities and impairment of investment securities (Details 5) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2012
I-PreTSL I
Collateral information
Total Collateral	$ 188,500
Current deferrals and defaults	32,500
Performing Collateral	156,000
Additional Immediate defaults before causing an interest shortfall	93,251
I-PreTSL II
Collateral information
Total Collateral	340,500
Current deferrals and defaults	17,500
Performing Collateral	323,000
Additional Immediate defaults before causing an interest shortfall	156,787
PreTSL XIX
Collateral information
Total Collateral	649,981
Current deferrals and defaults	179,150
Performing Collateral	470,831
Additional Immediate defaults before causing an interest shortfall	146,000
PreTSL XX
Collateral information
Total Collateral	552,238
Current deferrals and defaults	174,500
Performing Collateral	377,738
Additional Immediate defaults before causing an interest shortfall	$ 96,500

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Mortgage Loan Servicing

3 Months Ended

Mar. 31, 2012

Mortgage Loan Servicing

Mortgage Loan Servicing

(10)         Mortgage Loan Servicing

Mortgage servicing assets are recognized as separate assets when servicing rights are acquired 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, mortgage interest rates, which are used to determine prepayment rates and discount rates, are held constant over the estimated life of the portfolio.  MSRs are amortized into mortgage banking income in proportion to, and over the period of, the estimated future net servicing income of the underlying mortgage loans.

Capitalized MSRs are evaluated 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 temporary 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.

The following table shows changes in MSRs at and for the three months ended March 31, 2012 (in thousands):

				Net
				Carrying
	Servicing		Valuation	Value and
	Rights		Allowance	Fair Value
Balance at December 31, 2011	3,655		—	3,655
Additions/ (reductions)	513		—	513
Amortization	(734	)	—	(734	)
Balance at March 31, 2012	3,434		—	3,434

The following table shows changes in MSRs at and for the three months ended March 31, 2011 (in thousands):

					Net
					Carrying
	Servicing			Valuation	Value and
	Rights			Allowance	Fair Value
Balance at December 31, 2010	$	5,969		—	5,969
Additions/ (reductions)	285			—	285
Amortization	(922		)	—	(922	)
Balance at March 31, 2011	$	5,332		—	5,332