10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

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

For the quarterly period ended September 30, 2012

or

oTransition 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) 97,635,138 shares outstanding as of October 31, 2012

NORTHWEST BANCSHARES, INC.

INDEX

			PAGE
PART I		FINANCIAL INFORMATION
Item 1.		Financial Statements (unaudited)
		Consolidated Statements of Financial Condition as of September 30, 2012 and December 31, 2011	1
		Consolidated Statements of Income for the quarter ended and nine months ended September 30, 2012 and 2011	2
		Consolidated Statements of Comprehensive Income for the quarter ended and nine months ended September 30, 2012 and 2011	3
		Consolidated Statements of Changes in Shareholders’ Equity for the quarter ended September 30, 2012 and 2011	4
		Consolidated Statements of Changes in Shareholders’ Equity for the nine months ended September 30, 2012 and 2011	5
		Consolidated Statements of Cash Flows for the nine months ended September 30, 2012 and 2011	6
		Notes to Consolidated Financial Statements - Unaudited	8
Item 2.		Management’s Discussion and Analysis of Financial Condition and Results of Operations	44
Item 3.		Quantitative and Qualitative Disclosures about Market Risk	63
Item 4.		Controls and Procedures	64
PART II	OTHER INFORMATION
Item 1.		Legal Proceedings	65
Item 1A.		Risk Factors	65
Item 2.		Unregistered Sales of Equity Securities and Use of Proceeds	65
Item 3.		Defaults Upon Senior Securities	66
Item 4.		Mine Safety Disclosures	66
Item 5.		Other information	66
Item 6.		Exhibits	66
		Signature	67
		Certifications

ITEM 1. FINANCIAL STATEMENTS

NORTHWEST BANCSHARES, INC.

CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION

(in thousands, except share data)

	(Unaudited)
	September 30,			December 31,
	2012			2011
Assets
Cash and due from banks	$	91,286		94,276
Interest-earning deposits in other financial institutions	546,149			593,388
Federal funds sold and other short-term investments	633			633
Marketable securities available-for-sale (amortized cost of $922,684 and $885,408)	951,879			908,349
Marketable securities held-to-maturity (fair value of $174,821 and $239,412)	167,739			231,389
Total cash and investments	1,757,686			1,828,035
Personal Banking:
Residential mortgage loans held for sale	14,152			967
Residential mortgage loans	2,410,124			2,396,399
Home equity loans	1,100,879			1,084,786
Other consumer loans	235,693			245,689
Total Personal Banking	3,760,848			3,727,841
Business Banking:
Commercial real estate loans	1,560,966			1,435,767
Commercial loans	406,819			387,911
Total Business Banking	1,967,785			1,823,678
Total loans	5,728,633			5,551,519
Allowance for loan losses	(71,177		)	(71,138	)
Total loans, net	5,657,456			5,480,381
Federal Home Loan Bank stock, at cost	46,834			48,935
Accrued interest receivable	25,324			24,599
Real estate owned, net	29,291			26,887
Premises and equipment, net	135,455			132,152
Bank owned life insurance	136,871			133,524
Goodwill	171,882			171,882
Other intangible assets	1,330			2,123
Other assets	85,542			109,187
Total assets	$	8,047,671		7,957,705
Liabilities and Shareholders’ equity
Liabilities:
Noninterest-bearing demand deposits	$	763,839		658,560
Interest-bearing demand deposits	842,389			800,676
Savings deposits	2,256,544			2,036,272
Time deposits	1,961,984			2,284,817
Total deposits	5,824,756			5,780,325
Borrowed funds	855,552			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	11,570			23,571
Accrued interest payable	1,111			1,104
Other liabilities	76,962			66,782
Total liabilities	6,873,045			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, 97,844,382 and 97,493,046 shares issued and outstanding, respectively	978			975
Paid-in capital	661,589			659,523
Retained earnings	556,502			543,598
Unallocated common stock of employee stock ownership plan	(24,817		)	(25,966	)
Accumulated other comprehensive loss	(19,626		)	(23,226	)
	1,174,626			1,154,904
Total liabilities and shareholders’ equity	$	8,047,671		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)

	Quarter ended						Nine months ended
	September 30,						September 30,
	2012			2011			2012		2011
Interest income:
Loans receivable	$	77,109		80,562			232,690		241,012
Mortgage-backed securities	3,941			5,544			13,041		18,373
Taxable investment securities	577			684			1,585		1,676
Tax-free investment securities	2,223			2,848			6,987		8,914
Interest-earning deposits	364			393			1,217		1,289
Total interest income	84,214			90,031			255,520		271,264
Interest expense:
Deposits	10,207			14,958			34,335		46,494
Borrowed funds	8,013			8,061			23,824		24,039
Total interest expense	18,220			23,019			58,159		70,533
Net interest income	65,994			67,012			197,361		200,731
Provision for loan losses	6,915			8,057			18,165		23,668
Net interest income after provision for loan losses	59,079			58,955			179,196		177,063
Noninterest income:
Impairment losses on securities	(340		)	—			(885	)	(577	)
Noncredit related losses on securities not expected to be sold (recognized in other comprehensive income)	247			—			554		70
Net impairment losses	(93		)	—			(331	)	(507	)
Gain on sale of investments, net	260			152			260		201
Service charges and fees	8,772			8,499			25,899		26,748
Trust and other financial services income	2,122			2,063			6,256		6,158
Insurance commission income	1,480			1,796			4,801		4,966
Loss on real estate owned, net	(1,187		)	(1,340		)	(2,839	)	(1,960	)
Income from bank owned life insurance	1,148			1,938			3,372		4,820
Mortgage banking income	1,484			400			2,804		887
Other operating income	949			1,002			3,190		2,785
Total noninterest income	14,935			14,510			43,412		44,098
Noninterest expense:
Compensation and employee benefits	28,171			26,004			83,425		81,161
Premises and occupancy costs	5,498			5,658			16,729		17,499
Office operations	3,141			3,209			9,805		9,564
Processing expenses	6,340			5,896			18,541		17,350
Marketing expenses	1,830			2,788			7,695		6,855
Federal deposit insurance premiums	1,305			1,386			4,343		6,168
Professional services	1,939			1,238			5,136		3,783
Amortization of other intangible assets	219			475			793		1,445
Real estate owned expense	832			483			2,143		1,163
Other expenses	2,528			2,786			6,435		6,803
Total noninterest expense	51,803			49,923			155,045		151,791
Income before income taxes	22,211			23,542			67,563		69,370
Federal and state income taxes	6,518			6,822			20,328		20,394
Net income	$	15,693		$	16,720		47,235		48,976
Basic earnings per share	$	0.17		0.17			0.50		0.48
Diluted earnings per share	$	0.17		0.17			0.50		0.48

See accompanying notes to unaudited consolidated financial statements

2

NORTHWEST BANCSHARES, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited)

(in thousands)

	Quarter ended					Nine months ended
	September 30,					September 30,
	2012			2011		2012		2011
Net Income	$	15,693		16,720		47,235		48,976
Other comprehensive income net of tax:
Net unrealized holding gains on marketable securities:
Unrealized holding gains net of tax of $(998), $(1,502), $(2,471) and $(5,123), respectively	1,550			2,789		3,805		9,512
Other-than-temporary impairment on securities included in net income, net of tax of $(36), $0, $(129) and $(177), respectively	57			—		202		330
Reclassification adjustment for (gains)/ losses included in net income, net of tax of $16, ($155), $138 and $(247), respectively	(25		)	289		(215	)	459
Net unrealized holding gains on marketable securities	1,582			3,078		3,792		10,301
Change in fair value of interest rate swaps, net of tax of $55, $1,424, $103 and $1,647, respectively	(102		)	(2,644	)	(192	)	(3,059	)
Other comprehensive income	1,480			434		3,600		7,242
Total comprehensive income	$	17,173		17,154		50,835		56,218

See accompanying notes to unaudited consolidated financial statements

3

NORTHWEST BANCSHARES, INC.

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY (Unaudited)

(dollars in thousands)

										Accumulated
										Other		Unallocated		Total
	Common Stock					Paid-in		Retained		Comprehensive		common stock		Shareholders’
Quarter ended September 30, 2011	Shares		Amount			Capital		Earnings		Income/ (loss)		of ESOP		Equity
Beginning balance at June, 2011	103,266,045		$	1,033		726,207		533,229		(6,689	)	(26,639	)	1,227,141
Comprehensive income:
Net income	—		—			—		16,720		—		—		16,720
Other comprehensive income, net of tax of $(233)	—		—			—		—		434		—		434
Total comprehensive income	—		—			—		16,720		434		—		17,154
Exercise of stock options	145,487		1			598		—		—		—		599
Stock compensation expense	—		1			654		—		—		381		1,036
Share repurchases	(5,835,164	)	(59		)	(68,027	)	—		—		—		(68,086	)
Dividends paid ($0.11 per share)	—		—			—		(11,067	)	—		—		(11,067	)
Ending balance at September 30, 2011	97,576,368		$	976		659,432		538,882		(6,255	)	(26,258	)	1,166,777
										Accumulated
										Other		Unallocated		Total
	Common Stock					Paid-in		Retained		Comprehensive		common stock		Shareholders’
Quarter ended September 30, 2012	Shares		Amount			Capital		Earnings		Income/ (loss)		of ESOP		Equity
Beginning balance at June 30, 2012	97,880,874		$	979		662,183		552,278		(21,106	)	(25,192	)	1,169,142
Comprehensive income:
Net income	—		—			—		15,693		—		—		15,693
Other comprehensive income, net of tax of $(963)	—		—			—		—		1,480		—		1,480
Total comprehensive income	—		—			—		15,693		1,480		—		17,173
Exercise of stock options	147,288		1			897		—		—		—		898
Stock compensation expense	—		—			713		—		—		375		1,088
Share repurchases	(183,780	)	(2		)	(2,204	)	—		—		—		(2,206	)
Dividends paid ($0.12 per share)	—		—			—		(11,469	)	—		—		(11,469	)
Ending balance at September 30, 2012	97,844,382		$	978		661,589		556,502		(19,626	)	(24,817	)	1,174,626

See accompanying notes to unaudited consolidated financial statements

4

NORTHWEST BANCSHARES, INC.

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY (unaudited)

(dollars in thousands)

										Accumulated
										Other		Unallocated		Total
	Common Stock					Paid-in		Retained		Comprehensive		common stock		Shareholders’
Nine months ended September 30, 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	—		—			—		48,976		—		—		48,976
Other comprehensive income, net of tax of $(3,900)	—		—			—		—		7,242		—		7,242
Total comprehensive income	—		—			—		48,976		7,242		—		56,218
Exercise of stock options	274,455		3			1,336		—		—		—		1,339
Stock-based compensation expense	1,273,949		13			4,521		—		—		1,151		5,685
Share repurchases	(14,267,153	)	(143		)	(170,589	)	—		—		—		(170,732	)
Dividends paid ($0.32 per share)	—		—			—		(33,183	)	—		—		(33,183	)
Ending balance at September 30, 2011	97,576,368		$	976		659,432		538,882		(6,255	)	(26,258	)	1,166,777
										Accumulated
										Other		Unallocated		Total
	Common Stock					Paid-in		Retained		Comprehensive		common stock		Shareholders’
Nine months ended September 30, 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	—		—			—		47,235		—		—		47,235
Other comprehensive income, net of tax of $(2,359)	—		—			—		—		3,600		—		3,600
Total comprehensive income	—		—			—		47,235		3,600		—		50,835
Exercise of stock options	271,739		2			1,891		—		—		—		1,893
Stock-based compensation expense	263,377		3			2,379		—		—		1,149		3,531
Share repurchases	(183,780	)	(2		)	(2,204	)	—		—		—		(2,206	)
Dividends paid ($0.36 per share)	—		—			—		(34,331	)	—		—		(34,331	)
Ending balance at September 30, 2012	97,844,382		$	978		661,589		556,502		(19,626	)	(24,817	)	1,174,626

See accompanying notes to unaudited consolidated financial statements

5

NORTHWEST BANCSHARES, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)

(in thousands)

	Nine months ended
	September 30,
	2012			2011
OPERATING ACTIVITIES:
Net Income	$	47,235		48,976
Adjustments to reconcile net income to net cash provided by operating activities:
Provision for loan losses	18,165			23,668
Net loss on sale of assets	1,639			3,273
Net depreciation, amortization and accretion	7,166			6,857
Decrease in other assets	14,476			9,311
Increase in other liabilities	9,892			2,150
Net amortization of premium on marketable securities	(59		)	(241	)
Noncash impairment losses on investment securities	331			507
Noncash write-down of real estate owned	2,129			2,198
Origination of loans held for sale	(180,319		)	(77,498	)
Proceeds from sale of loans held for sale	168,442			87,871
Noncash compensation expense related to stock benefit plans	3,531			5,685
Net cash provided by operating activities	92,628			112,757
INVESTING ACTIVITIES:
Purchase of marketable securities available-for-sale	(299,414		)	(197,752	)
Proceeds from maturities and principal reductions of marketable securities available-for-sale	262,192			193,906
Proceeds from maturities and principal reductions of marketable securities held-to-maturity	63,583			88,967
Loan originations	(1,568,290		)	(1,318,398	)
Proceeds from loan maturities and principal reductions	1,371,874			1,289,071
Proceeds from redemption of Federal Home Loan Bank stock	2,101			8,569
Proceeds from sale of real estate owned	11,145			6,961
Sale/ (purchase) of real estate owned for investment, net	343			(137	)
Purchase of premises and equipment	(11,804		)	(4,445	)
Net cash (used in)/ provided by investing activities	(168,270		)	66,742

6

NORTHWEST BANCSHARES, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited) (continued)

(in thousands)

	Nine months ended
	September 30,
	2012			2011
FINANCING ACTIVITIES:
Increase in deposits, net	$	44,431		48,414
Repayments of long-term borrowings	(52		)	(50,049	)
Net increase/ (decrease) in short-term borrowings	27,679			(12,570	)
Decrease in advances by borrowers for taxes and insurance	(12,001		)	(10,788	)
Cash dividends paid	(34,331		)	(33,183	)
Purchase of common stock for retirement	(2,206		)	(170,732	)
Proceeds from stock options exercised	1,893			1,339
Net cash provided by/ (used in) financing activities	25,413			(227,569	)
Net decrease in cash and cash equivalents	$	(50,229	)	(48,070	)
Cash and cash equivalents at beginning of period	$	688,297		719,111
Net decrease in cash and cash equivalents	(50,229		)	(48,070	)
Cash and cash equivalents at end of period	$	638,068		671,041
Cash and cash equivalents:
Cash and due from banks	$	91,286		90,493
Interest-earning deposits in other financial institutions	546,149			579,915
Federal funds sold and other short-term investments	633			633
Total cash and cash equivalents	$	638,068		671,041
Cash paid during the period for:
Interest on deposits and borrowings (including interest credited to deposit accounts of $29,606 and $39,477, respectively)	$	58,152		71,177
Income taxes	$	10,389		16,320
Non-cash activities:
Loans foreclosures and repossessions	$	17,141		9,719
Sale of real estate owned financed by the Company	$	428		266

See accompanying notes to unaudited consolidated financial statements

7

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Unaudited

(1)Basis of Presentation and Informational Disclosures

Northwest Bancshares, Inc. (the “Company”) or (“NWBI”), a Maryland corporation 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 in December 2009.  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 September 30, 2012, Northwest operated 166 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, which operates 52 offices in Pennsylvania, 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 quarter ended and nine months ended September 30, 2012 are not necessarily indicative of the results that may be expected for the year ending December 31, 2012.

Stock-Based Compensation

On May 23, 2012, we awarded employees 508,573 stock options and directors 64,800 stock options with an exercise price of $11.70 and a grant date fair value of $1.23 per stock option.  On May 23, 2012, we also awarded employees 239,077 restricted common shares and directors 24,300 restricted common shares with a grant date fair value of $11.64.  Awarded stock options and common shares vest over a ten-year period with the first vesting occurring on the grant date.  Stock-based compensation expense of $1.1 million and $1.0 million for the quarter ended September 30, 2012 and 2011, respectively, and $3.5 million and $5.7 million for the nine months ended September 30, 2012 and 2011, respectively, was recognized in compensation expense relating to our stock benefit plans.  At September 30, 2012 there was compensation expense of $5.8 million to be recognized for awarded but unvested stock options and $14.6 million for unvested restricted 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 September 30, 2012 we had no liability for unrecognized tax benefits.

8

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 September 30, 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, 2011, 2010 and 2009.

(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 business and personal demand, savings and time deposit accounts and business and personal loans, as well as insurance, brokerage and investment management and trust services.  The Consumer Finance segment, comprised of Northwest Consumer Discount Company, 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.  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 quarter ended:

	Community		Consumer
September 30, 2012 ($ in 000’s)	Banking		Finance	All other *		Consolidated
External interest income	$	78,386	5,513	315		84,214
Intersegment interest income	748		—	(748	)	—
Interest expense	16,881		748	591		18,220
Provision for loan losses	6,000		915	—		6,915
Noninterest income	14,412		509	14		14,935
Noninterest expense	48,484		3,120	199		51,803
Income tax expense (benefit)	6,442		507	(431	)	6,518
Net income	15,739		732	(778	)	15,693
Total assets	$	7,889,245	116,112	42,314		8,047,671

	Community		Consumer
September 30, 2011 ($ in 000’s)	Banking		Finance	All other *		Consolidated
External interest income	$	84,267	5,479	285		90,031
Intersegment interest income	770		—	(770	)	—
Interest expense	21,672		770	577		23,019
Provision for loan losses	7,300		757	—		8,057
Noninterest income	13,693		804	13		14,510
Noninterest expense	46,794		3,016	113		49,923
Income tax expense (benefit)	6,521		721	(420	)	6,822
Net income	16,443		1,019	(742	)	16,720
Total assets	$	7,838,335	115,084	35,924		7,989,343

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

9

At or for the nine months ended:

	Community		Consumer
September 30, 2012 ($ in 000’s)	Banking		Finance	All other *		Consolidated
External interest income	$	238,081	16,556	883		255,520
Intersegment interest income	2,234		—	(2,234	)	—
Interest expense	54,206		2,234	1,719		58,159
Provision for loan losses	15,750		2,415	—		18,165
Noninterest income	41,735		1,601	76		43,412
Noninterest expense	144,949		9,496	600		155,045
Income tax expense (benefit)	19,967		1,658	(1,297	)	20,328
Net income	47,178		2,354	(2,297	)	47,235
Total assets	$	7,889,245	116,112	42,314		8,047,671

	Community		Consumer
September 30, 2011 ($ in 000’s)	Banking		Finance	All other *		Consolidated
External interest income	$	254,403	16,111	750		271,264
Intersegment interest income	2,306		—	(2,306	)	—
Interest expense	66,875		2,306	1,352		70,533
Provision for loan losses	21,450		2,218	—		23,668
Noninterest income	42,230		1,829	39		44,098
Noninterest expense	142,227		9,058	506		151,791
Income tax expense (benefit)	19,782		1,809	(1,197	)	20,394
Net income	48,605		2,549	(2,178	)	48,976
Total assets	$	7,838,335	115,084	35,924		7,989,343

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

10

(3)Investment securities and impairment of investment securities

The following table shows the portfolio of investment securities available-for-sale at September 30, 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	$	41	—	—		41
Debt issued by government sponsored enterprises:
Due in one year - five years	57,427		135	—		57,562
Due in five years - ten years	58,610		692	(11	)	59,291
Due after ten years	7,512		—	(11	)	7,501
Equity securities	13,020		7,133	(85	)	20,068
Municipal securities:
Due in one year - five years	7,626		229	—		7,855
Due in five years - ten years	21,377		832	—		22,209
Due after ten years	105,527		6,273	(1	)	111,799
Corporate debt issues:
Due after ten years	24,914		249	(4,868	)	20,295
Residential mortgage-backed securities:
Fixed rate pass-through	94,048		7,869	—		101,917
Variable rate pass-through	111,574		6,101	(2	)	117,673
Fixed rate non-agency CMOs	6,404		153	(247	)	6,310
Fixed rate agency CMOs	159,880		3,035	—		162,915
Variable rate non-agency CMOs	898		—	(20	)	878
Variable rate agency CMOs	253,826		1,975	(236	)	255,565
Total residential mortgage-backed securities	626,630		19,133	(505	)	645,258
Total marketable securities available-for-sale	$	922,684	34,676	(5,481	)	951,879

11

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 September 30, 2012 (in thousands):

			Gross	Gross
			unrealized	unrealized
	Amortized		holding	holding		Fair
	cost		gains	losses		value
Municipal securities:
Due in five years - ten years	$	3,679	167	—		3,846
Due after ten years	65,595		4,080	—		69,675
Residential mortgage-backed securities:
Fixed rate pass-through	18,478		1,145	—		19,623
Variable rate pass-through	7,101		5	—		7,106
Fixed rate agency CMOs	65,025		1,588	(53	)	66,560
Variable rate agency CMOs	7,861		150	—		8,011
Total residential mortgage-backed securities	98,465		2,888	(53	)	101,300
Total marketable securities held-to-maturity	$	167,739	7,135	(53	)	174,821

12

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 amortized cost has exceeded fair values, 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.  Certain investments are evaluated using our best estimate of future cash flows. If the estimate of cash flows indicates that an adverse change has occurred, other-than-temporary impairment would be recognized for the amount of the unrealized 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 September 30, 2012 (in thousands):

	Less than 12 months				12 months or more			Total
			Unrealized			Unrealized			Unrealized
	Fair value		loss		Fair value	loss		Fair value	loss
Government sponsored enterprises	$	10,566	(11	)	7,502	(11	)	18,068	(22	)
Municipal securities	—		—		594	(1	)	594	(1	)
Corporate issues	850		(38	)	15,330	(4,830	)	16,180	(4,868	)
Equity securities	539		(83	)	17	(2	)	556	(85	)
Residential mortgage-backed securities - non-agency	—		—		4,524	(267	)	4,524	(267	)
Residential mortgage-backed securities - agency	59,366		(268	)	8,116	(23	)	67,482	(291	)
Total temporarily impaired securities	$	71,321	(400	)	36,083	(5,134	)	107,404	(5,534	)

13

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
Government sponsored emterprises	$	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 September 30, 2012, we had seven investments with a total amortized cost of $20.1 million and total fair value of $15.3 million, where the amortized cost exceeded the carrying value for more than 12 months.  These investments were three 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 all cases, the underlying issuer was “well-capitalized” for regulatory purposes. None of the issuers have deferred interest payments or announced the intention to defer interest payments.  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 three investments was considered noncredit related.  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 noncredit related.  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.

14

The following table provides class, amortized cost, fair value and ratings information for our portfolio of corporate securities that have an unrealized loss, both greater than and less than twelve months, at September 30, 2012 (in thousands):

		Total
		Amortized		Fair	Unrealized		Moody’s/ Fitch
Description	Class	cost		value	losses		ratings
Bank Boston Capital Trust (1)	N/A	$	990	725	(265	)	Ba2/ BB
Huntington Capital Trust	N/A	1,426		1,060	(366	)	Baa3/ BB
Commercebank Capital Trust	N/A	888		850	(38	)	Not rated
Ocean Shore Capital Trust	N/A	866		800	(66	)	Not rated
I-PreTSL I	Mezzanine	1,500		511	(989	)	Not rated/ CCC
I-PreTSL II	Mezzanine	1,500		608	(892	)	Not rated/ B
PreTSL XIX	Senior A-1	8,486		6,939	(1,547	)	Baa2/ BBB
PreTSL XX	Senior A-1	5,392		4,687	(705	)	Ba2/ BB
		$	21,048	16,180	(4,868	)

(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 September 30, 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	95,310
I-PreTSL II	340,500		24,500	316,000	316,000
PreTSL XIX	644,881		182,150	462,731	148,500
PreTSL XX	552,238		174,500	377,738	99,500

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 mortgage-backed securities quarterly for impairment.  As of September 30, 2012, we believe that the impairment within our portfolio of agency mortgage-backed securities is noncredit related.  As of September 30, 2012, we had seven non-agency CMOs with a total amortized cost of $7.3 million and a total fair value of $7.2 million, including two non-agency CMOs with an amortized cost of $4.8 million and a fair value of $4.5 million, where the amortized cost exceeded the carrying value for more than 12 months.  During the quarter and nine months ended September 30, 2012, we recognized other-than-temporary credit related impairment of $93,000 and $331,000, respectively on one of these securities.  After recognizing the other-than-temporary impairment, our amortized cost on this investment was $3.9 million, with a fair value of $3.6 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.

15

We consider the discounted cash flow analysis to be our primary evidence when determining whether credit related other-than-temporary impairment exists.  After this review, we determined that the remaining impairment on these securities was noncredit related.

The following table shows issuer specific information, amortized cost, fair value, unrealized gain or loss and other-than-temporary impairment recorded in earnings for the portfolio of non-agency CMOs at September 30, 2012 (in thousands):

								Total
						Impairment		impairment
						recorded in		recorded in
	Amortized		Fair	Unrealized		current period		prior period
Description	cost		value	gain/ (loss)		earnings		earnings
AMAC 2003-6 2A2	$	233	239	6		—		—
AMAC 2003-6 2A8	481		496	15		—		—
BOAMS 2005-11 1A8	965		1,081	116		—		(146	)
CWALT 2005-J14 A3	3,893		3,646	(247	)	(93	)	(1,007	)
CFSB 2003-17 2A2	469		478	9		—		—
WAMU 2003-S2 A4	363		370	7		—		—
WFMBS 2003-B A2	898		878	(20	)	—		—
	$	7,302	7,188	(114	)	(93	)	(1,153	)

Municipal Securities

As of September 30, 2012, we had one Pennsylvania municipal security with a total amortized cost of $595,000 and a total fair value of $594,000, where amortized cost 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 amortized cost.  When an investment’s fair value is below 80% of the amortized cost 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.  At September 30, 2012, we have determined that all of the impairment in our municipal securities portfolio is noncredit related.

16

The following table provides information for our portfolio of municipal securities that have unrealized losses for greater than 12 months at September 30, 2012 (in thousands):

		Total
		Amortized		Fair	Unrealized
Description	State	cost		value	losses		Rating
Cambridge Area JT Revenue	PA	$	595	594	(1	)	Not rated
		$	595	594	(1	)

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 for the quarter ended (in thousands):

	2012		2011
Beginning balance at July 1, (a)	$	16,620	15,952
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	93		—
Ending balance at September 30,	$	16,713	15,952

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

The table below shows a cumulative roll forward of credit losses recognized in earnings for debt securities held and not intended to be sold for the nine months ended (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	331		507
Ending balance at September 30,	$	16,713	15,952

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

17

(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 September 30, 2012 and December 31, 2011 (in thousands):

	September 30,			December 31,
	2012			2011
Personal Banking:
Residential mortgage loans	$	2,446,034		2,414,992
Home equity loans	1,100,879			1,084,786
Other consumer loans	235,693			245,689
Total Personal Banking	3,782,606			3,745,467
Business Banking:
Commercial real estate	1,603,774			1,481,127
Commercial loans	440,579			408,462
Total Business Banking	2,044,353			1,889,589
Total loans receivable, gross	5,826,959			5,635,056
Deferred loan fees	(2,624		)	(4,752	)
Allowance for loan losses	(71,177		)	(71,138	)
Undisbursed loan proceeds:
Residential mortgage loans	(19,134		)	(12,874	)
Commercial real estate	(42,808		)	(45,360	)
Commercial loans	(33,760		)	(20,551	)
Total loans receivable, net	$	5,657,456		5,480,381

18

The following table provides information related to the allowance for loan losses by portfolio segment and by class of financing receivable for the quarter ended September 30, 2012 (in thousands):

	Balance June 30, 2012		Current period provision		Charge-offs		Recoveries	Balance September 30, 2012
Personal Banking:
Residential mortgage loans	$	7,997	1,440		(1,197	)	121	8,361
Home equity loans	8,634		710		(1,268	)	42	8,118
Other consumer loans	4,665		1,073		(1,536	)	579	4,781
Total Personal Banking	21,296		3,223		(4,001	)	742	21,260
Business Banking:
Commercial real estate loans	34,781		538		(1,385	)	403	34,337
Commercial loans	9,431		3,401		(1,641	)	34	11,225
Total Business Banking	44,212		3,939		(3,026	)	437	45,562
Unallocated	4,602		(247	)	—		—	4,355
Total	$	70,110	6,915		(7,027	)	1,179	71,177

The following table provides information related to the allowance for loan losses by portfolio segment and by class of financing receivable for the quarter ended September 30, 2011 (in thousands):

	Balance June 30, 2011		Current period provision		Charge-offs		Recoveries	Balance September 30, 2011
Personal Banking:
Residential mortgage loans	$	8,463	707		(634	)	75	8,611
Home equity loans	7,699		1,465		(588	)	20	8,596
Other consumer loans	5,144		1,299		(1,307	)	277	5,413
Total Personal Banking	21,306		3,471		(2,529	)	372	22,620
Business Banking:
Commercial real estate loans	31,690		3,188		(3,675	)	190	31,393
Commercial loans	17,963		1,620		(4,791	)	129	14,921
Total Business Banking	49,653		4,808		(8,466	)	319	46,314
Unallocated	4,496		(222	)	—		—	4,274
Total	$	75,455	8,057		(10,995	)	691	73,208

19

The following table provides information related to the allowance for loan losses by portfolio segment and by class of financing receivable for the nine months ended September 30, 2012 (in thousands):

	Balance December 31, 2011		Current period provision		Charge-offs		Recoveries	Balance September 30, 2012
Personal Banking:
Residential mortgage loans	$	8,482	3,017		(3,459	)	321	8,361
Home equity loans	8,687		2,078		(2,749	)	102	8,118
Other consumer loans	5,325		2,619		(4,327	)	1,164	4,781
Total Personal Banking	22,494		7,714		(10,535	)	1,587	21,260
Business Banking:
Commercial real estate loans	32,148		6,631		(5,817	)	1,375	34,337
Commercial loans	12,080		3,881		(5,009	)	273	11,225
Total Business Banking	44,228		10,512		(10,826	)	1,648	45,562
Unallocated	4,416		(61	)	—		—	4,355
Total	$	71,138	18,165		(21,361	)	3,235	71,177

The following table provides information related to the allowance for loan losses by portfolio segment and by class of financing receivable for the nine months ended September 30, 2011 (in thousands):

	Balance December 31, 2010		Current period provision		Charge-offs		Recoveries	Balance September 30, 2011
Personal Banking:
Residential mortgage loans	$	6,854	4,190		(2,668	)	235	8,611
Home equity loans	7,675		4,586		(3,736	)	71	8,596
Other consumer loans	5,810		2,437		(3,816	)	982	5,413
Total Personal Banking	20,339		11,213		(10,220	)	1,288	22,620
Business Banking:
Commercial real estate loans	35,832		3,092		(8,220	)	689	31,393
Commercial loans	15,770		9,560		(10,706	)	297	14,921
Total Business Banking	51,602		12,652		(18,926	)	986	46,314
Unallocated	4,471		(197	)	—		—	4,274
Total	$	76,412	23,668		(29,146	)	2,274	73,208

20

The following table provides information related to the loan portfolio by portfolio segment and by class of financing receivable at September, 30, 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:
Residential mortgage loans	$	2,424,276	8,361	24,476	807	3,545
Home equity loans	1,100,879		8,118	9,365	—	630
Other consumer loans	235,693		4,781	1,494	—	—
Total Personal Banking	3,760,848		21,260	35,335	807	4,175
Business Banking:
Commercial real estate loans	1,560,966		34,337	61,632	—	44,996
Commercial loans	406,819		11,225	23,805	—	37,154
Total Business Banking	1,967,785		45,562	85,437	—	82,150
Total	$	5,728,633	66,822	120,772	807	86,325

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:
Residential 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

21

The following table provides geographical and delinquency information related to the loan portfolio by portfolio segment and by class of financing receivable at September, 30, 2012 (in thousands):

	Pennsylvania		(1)		New York	(1)		Ohio	(1)		Maryland	(1)		Other	(1)		Total
Recorded investment in loans receivable:
Personal Banking:
Residential mortgage loans	$	2,028,697	83.6	%	157,552	6.5	%	19,261	0.8	%	156,528	6.5	%	62,238	2.6	%	2,424,276	100.0	%
Home equity loans	937,206		85.2	%	113,844	10.3	%	11,186	1.0	%	30,919	2.8	%	7,724	0.7	%	1,100,879	100.0	%
Other consumer loans	217,323		92.2	%	10,673	4.5	%	2,981	1.3	%	1,290	0.5	%	3,426	1.5	%	235,693	100.0	%
Total Personal Banking	3,183,226		84.6	%	282,069	7.5	%	33,428	0.9	%	188,737	5.0	%	73,388	2.0	%	3,760,848	100.0	%
Business Banking:
Commercial real estate loans	863,722		55.3	%	438,955	28.1	%	36,185	2.3	%	142,877	9.2	%	79,227	5.1	%	1,560,966	100.0	%
Commercial loans	301,161		74.0	%	47,915	11.8	%	11,452	2.8	%	26,784	6.6	%	19,507	4.8	%	406,819	100.0	%
Total Business Banking	1,164,883		59.3	%	486,870	24.7	%	47,637	2.4	%	169,661	8.6	%	98,734	5.0	%	1,967,785	100.0	%
Total	$	4,348,109	75.9	%	768,939	13.4	%	81,065	1.4	%	358,398	6.3	%	172,122	3.0	%	5,728,633	100.0	%

(1) Percentage of total loans receivable per state by class of financing receivable.

	Pennsylvania		(2)		New York	(2)		Ohio	(2)		Maryland	(2)		Other	(2)		Total
Loans 90 or more days delinquent:
Personal Banking:
Residential mortgage loans	$	15,856	0.8	%	1,292	0.8	%	231	1.2	%	4,373	2.8	%	2,724	4.4	%	24,476	1.0	%
Home equity loans	5,811		0.6	%	1,561	1.4	%	131	1.2	%	1,486	4.8	%	376	4.9	%	9,365	0.9	%
Other consumer loans	1,452		0.7	%	39	0.4	%	—	0.0	%	—	0.0	%	3	0.1	%	1,494	0.6	%
Total Personal Banking	23,119		0.7	%	2,892	1.0	%	362	1.1	%	5,859	3.1	%	3,103	4.2	%	35,335	0.9	%
Business Banking:
Commercial real estate loans	16,078		1.9	%	6,364	1.4	%	—	0.0	%	5,236	3.7	%	7,552	9.5	%	35,230	2.3	%
Commercial loans	5,305		1.8	%	—	0.0	%	16	0.1	%	1,724	6.4	%	2,819	14.5	%	9,864	2.4	%
Total Business Banking	21,383		1.8	%	6,364	1.3	%	16	0.0	%	6,960	4.1	%	10,371	10.5	%	45,094	2.3	%
Total	$	44,502	1.0	%	9,256	1.2	%	378	0.5	%	12,819	3.6	%	13,474	7.8	%	80,429	1.4	%

(2) Percentage of loans 90 or more days delinquent in that state by class of financing receivable.

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

	Pennsylvania		(1)		New York	(1)		Ohio	(1)		Maryland	(1)		Other	(1)		Total
Recorded investment in loans receivable:
Personal Banking:
Residential mortgage loans	$	1,978,512	82.5	%	159,389	6.6	%	19,895	0.8	%	168,247	7.0	%	71,323	3.1	%	2,397,366	100.0	%
Home equity loans	925,368		85.3	%	104,194	9.6	%	11,677	1.1	%	33,816	3.1	%	9,731	0.9	%	1,084,786	100.0	%
Other consumer loans	225,827		91.9	%	11,191	4.6	%	3,022	1.2	%	1,417	0.6	%	4,232	1.7	%	245,689	100.0	%
Total Personal Banking	3,129,707		84.0	%	274,774	7.4	%	34,594	0.9	%	203,480	5.5	%	85,286	2.2	%	3,727,841	100.0	%
Business Banking:
Commercial real estate loans	849,702		59.2	%	356,868	24.9	%	35,882	2.5	%	114,839	8.0	%	78,476	5.4	%	1,435,767	100.0	%
Commercial loans	258,775		66.7	%	56,128	14.5	%	10,072	2.6	%	25,942	6.7	%	36,994	9.5	%	387,911	100.0	%
Total Business Banking	1,108,477		60.7	%	412,996	22.6	%	45,954	2.5	%	140,781	7.7	%	115,470	6.5	%	1,823,678	100.0	%
Total	$	4,238,184	76.3	%	687,770	12.4	%	80,548	1.5	%	344,261	6.2	%	200,756	3.6	%	5,551,519	100.0	%

(1) Percentage of total loans receivable per state by class of financing receivable.

	Pennsylvania		(2)		New York	(2)		Ohio	(2)		Maryland	(2)		Other	(2)		Total
Loans 90 or more days delinquent:
Personal Banking:
Residential mortgage loans	$	16,971	0.9	%	1,358	0.9	%	305	1.5	%	4,436	2.6	%	5,151	7.2	%	28,221	1.2	%
Home equity loans	6,559		0.7	%	1,031	1.0	%	23	0.2	%	1,496	4.4	%	451	4.6	%	9,560	0.9	%
Other consumer loans	2,537		1.1	%	54	0.5	%	23	0.8	%	—	0.0	%	53	1.3	%	2,667	1.1	%
Total Personal Banking	26,067		0.8	%	2,443	0.9	%	351	1.0	%	5,932	2.9	%	5,655	6.6	%	40,448	1.1	%
Business Banking:
Commercial real estate loans	17,753		2.1	%	8,625	2.4	%	88	0.2	%	6,573	5.7	%	11,564	14.7	%	44,603	3.1	%
Commercial loans	5,075		2.0	%	281	0.5	%	—	0.0	%	2,514	9.7	%	2,915	7.9	%	10,785	2.8	%
Total Business Banking	22,828		2.1	%	8,906	2.2	%	88	0.2	%	9,087	6.5	%	14,479	12.5	%	55,388	3.0	%
Total	$	48,895	1.2	%	11,349	1.7	%	439	0.5	%	15,019	4.4	%	20,134	10.0	%	95,836	1.7	%

(2) Percentage of loans 90 or more days delinquent in that state by class of financing receivable.

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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 nine months ended September 30, 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:
Residential mortgage loans	$	24,476	—	—	2,434	26,910	27,248	495
Home equity loans	9,365		—	—	500	9,865	9,776	212
Other consumer loans	1,494		—	—	—	1,494	1,853	28
Total Personal Banking	35,335		—	—	2,934	38,269	38,877	735
Business Banking:
Commercial real estate loans	35,230		26,402	33,593	15,335	110,560	97,340	2,809
Commercial loans	9,864		13,941	18,963	10,031	52,799	52,327	1,409
Total Business Banking	45,094		40,343	52,556	25,366	163,359	149,667	4,218
Total	$	80,429	40,343	52,556	28,300	201,628	188,544	4,953

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:
Residential 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

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The following table provides information related to the evaluation of impaired loans by portfolio segment and by class of financing receivable at September 30, 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:
Residential mortgage loans	$	2,420,731	3,545	3,545	886	—
Home equity loans	1,100,249		630	630	174	—
Other consumer loans	235,693		—	—	—	—
Total Personal Banking	3,756,673		4,175	4,175	1,060	—
Business Banking:
Commercial real estate loans	1,504,183		56,783	31,220	5,721	25,563
Commercial loans	374,693		32,126	21,894	1,324	10,232
Total Business Banking	1,878,876		88,909	53,114	7,045	35,795
Total	$	5,635,549	93,084	57,289	8,105	35,795

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:
Residential 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

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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 nine months ended September 30, 2012, two commercial real estate loan TDRs with combined balances of $554,000 were charged off and three commercial loan TDRs with combined balances of $787,000 were paid off.

25

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 quarter ended September 30, 2012					For the nine months ended September 30, 2012
	Number of contracts	Recorded investment at the time of modification		Current recorded investment	Current allowance	Number of contracts	Recorded investment at the time of modification		Current recorded investment	Current allowance
Troubled debt restructurings:
Personal Banking:
Residential mortgage loans	19	$	3,422	2,739	729	19	$	3,422	2,739	729
Home equity loans	7	724		630	174	7	724		630	174
Other consumer loans	—	—		—	—	—	—		—	—
Total Personal Banking	26	4,146		3,369	903	26	4,146		3,369	903
Business Banking:
Commercial real estate loans	25	6,294		6,102	716	35	9,267		9,014	910
Commercial loans	28	7,008		6,778	228	41	20,586		19,159	746
Total Business Banking	53	13,302		12,880	944	76	29,853		28,173	1,656
Total	79	$	17,448	16,249	1,847	102	$	33,999	31,542	2,559
Troubled debt restructurings that subsequently defaulted:
Personal Banking:
Residential mortgage loans	—	$	—	—	—	1	$	449	361	117
Home equity loans	—	—		—	—	—	—		—	—
Other consumer loans	—	—		—	—	—	—		—	—
Total Personal Banking	—	—		—	—	1	449		361	117
Business Banking:
Commercial real estate loans	1	230		230	23	4	1,381		1,313	81
Commercial loans	8	1,830		819	82	8	1,830		819	82
Total Business Banking	9	2,060		1,049	105	12	3,211		2,132	163
Total	9	$	2,060	1,049	105	13	$	3,660	2,493	280

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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 quarter ended September 30, 2011					For the nine months ended September 30, 2011
	Number of contracts	Recorded investment at the time of modification		Current recorded investment	Current allowance	Number of contracts	Recorded investment at the time of modification		Current recorded investment	Current allowance
Troubled debt restructurings:
Personal Banking:
Residential mortgage loans	1	$	445	445	127	2	$	894	806	244
Home equity loans	—	—		—	—	—	—		—	—
Other consumer loans	—	—		—	—	—	—		—	—
Total Personal Banking	1	445		445	127	2	894		806	244
Business Banking:
Commercial real estate loans	4	10,168		10,126	1,013	12	13,642		13,331	1,279
Commercial loans	2	2,382		2,382	211	19	20,944		11,380	393
Total Business Banking	6	12,550		12,508	1,224	31	34,586		24,711	1,672
Total	7	$	12,995	12,953	1,351	33	$	35,480	25,517	1,916
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	1	500		496	50	4	1,501		960	251
Commercial loans	1	437		255	—	2	9,740		9,123	887
Total Business Banking	2	937		751	50	6	11,241		10,083	1,138
Total	2	$	937	751	50	6	$	11,241	10,083	1,138

The following table provides information related to loan delinquencies at September 30, 2012 (in thousands):

	30-59 Days delinquent		60-89 Days delinquent	90 Days or greater delinquent	Total delinquency	Current	Recorded investment in loans receivable
Personal Banking:
Residential mortgage loans	$	5,971	7,621	24,476	38,068	2,386,208	2,424,276
Home equity loans	5,027		2,116	9,365	16,508	1,084,371	1,100,879
Other consumer loans	4,470		1,424	1,494	7,388	228,305	235,693
Total Personal Banking	15,468		11,161	35,335	61,964	3,698,884	3,760,848
Business Banking:
Commercial real estate loans	18,512		2,544	35,230	56,286	1,504,680	1,560,966
Commercial loans	791		1,855	9,864	12,510	394,309	406,819
Total Business Banking	19,303		4,399	45,094	68,796	1,898,989	1,967,785
Total	$	34,771	15,560	80,429	130,760	5,597,873	5,728,633

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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	Recorded investment in loans receivable
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: The primary indicator of credit quality for Personal Banking loans is delinquency status and the primary indicators of credit quality for Business Banking loans are delinquency status and our internal loan risk rating.  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

28

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 September 30, 2012 (in thousands):

	Pass		Special mention	Substandard	Doubtful	Loss	Recorded investment in loans receivable
Personal Banking:
Residential mortgage loans	$	2,403,993	—	18,910	16	1,357	2,424,276
Home equity loans	1,091,530		—	9,349	—	—	1,100,879
Other consumer loans	234,765		—	928	—	—	235,693
Total Personal Banking	3,730,288		—	29,187	16	1,357	3,760,848
Business Banking:
Commercial real estate loans	1,327,799		81,854	147,063	4,250	—	1,560,966
Commercial loans	326,229		15,415	61,747	3,428	—	406,819
Total Business Banking	1,654,028		97,269	208,810	7,678	—	1,967,785
Total	$	5,384,316	97,269	237,997	7,694	1,357	5,728,633

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	Recorded investment in loans receivable
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

29

(5)Goodwill and Other Intangible Assets

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

	September 30,			December 31,
	2012			2011
Amortizable intangible assets:
Core deposit intangibles — gross	$	30,578		30,578
Acquisitions	—			—
Less: accumulated amortization	(30,056		)	(29,549	)
Core deposit intangibles — net	522			1,029
Customer and Contract intangible assets — gross	3,779			3,779
Less: accumulated amortization	(2,971		)	(2,685	)
Customer and Contract intangible assets — net	$	808		1,094

The following table shows the actual aggregate amortization expense for the quarter ended and nine months ended September 30, 2012 and 2011, 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 quarter ended September 30, 2012	$	219
For the quarter ended September 30, 2011	475
For the nine months ended September 30, 2012	793
For the nine months ended September 30, 2011	1,445
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	69
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 September 30, 2012	$	170,269	1,613	171,882

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

(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 September 30, 2012, the maximum potential amount of future payments we could be required to make under these standby letters of credit was $70.2 million, of which $69.2 million is fully collateralized.  At September 30, 2012, we had a liability, which represents deferred income, of $973,000 related to the standby letters of credit.  There are no recourse provisions that would enable us to recover any amounts from third parties.

(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 stock options 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. Stock options to purchase 3,119,002 shares of common stock with a weighted average exercise price of $12.28 per share were outstanding during the quarter and nine months ended September 30, 2012 but were not included in the computation of diluted earnings per share for these periods because the options’ exercise price was greater than the average market price of the common shares of $11.98 and $12.17, respectively.  Stock options to purchase 2,636,398 shares of common stock with a weighted average exercise price of $12.32 per share were outstanding during the quarter and nine months ended September 30, 2011 but were not included in the computation of diluted earnings per share for these periods because the options’ exercise price was greater than the average market price of the common shares of $12.06 and $12.15, respectively.

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

	Quarter ended			Nine months ended
	September 30,			September 30,
	2012		2011	2012	2011
Reported net income	$	15,693	16,720	47,235	48,976
Weighted average common shares outstanding	94,422,878		96,918,016	94,277,362	101,866,461
Dilutive potential shares due to effect of stock options	187,778		206,312	314,040	402,466
Total weighted average common shares and dilutive potential shares	94,610,656		97,124,328	94,591,402	102,268,927
Basic earnings per share:	$	0.17	0.17	0.50	0.48
Diluted earnings per share:	$	0.17	0.17	0.50	0.48

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

Components of net periodic benefit cost

	Quarter ended September 30,
	Pension benefits					Other post-retirement benefits
	2012			2011		2012	2011
Service cost	$	1,858		1,429		—	—
Interest cost	1,432			1,363		16	21
Expected return on plan assets	(1,948		)	(1,502	)	—	—
Amortization of prior service cost	(40		)	(40	)	—	—
Amortization of the net loss	690			169		13	13
Net periodic benefit cost	$	1,992		1,419		29	34

Components of net periodic benefit cost

	Nine months ended September 30,
	Pension benefits					Other post-retirement benefits
	2012			2011		2012	2011
Service cost	$	5,573		4,285		—	—
Interest cost	4,297			4,089		49	72
Expected return on plan assets	(5,844		)	(4,506	)	—	—
Amortization of prior service cost	(120		)	(120	)	—	—
Amortization of the net loss	2,070			507		38	39
Net periodic benefit cost	$	5,976		4,255		87	111

We made no contribution to our pension or other post-retirement benefit plans during the nine months ended September 30, 2012.  Once determined, we anticipate making a tax-deductible contribution to our defined benefit pension plan for the year ending December 31, 2012.

(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 techniques based on whether the inputs to those valuation techniques are observable or unobservable.  This hierarchy gives the highest priority to quoted prices with readily available independent data in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable market inputs (Level 3).  When various inputs for measurement fall within different levels of the fair value hierarchy, the lowest level input that has a significant impact on fair value measurement is used.

Financial assets and liabilities are categorized based upon the following characteristics or inputs to the valuation techniques:

·Level 1 — Financial assets and liabilities for which inputs are observable and are obtained from reliable quoted prices for identical assets or liabilities in actively traded markets.  This is the most reliable fair value measurement and includes, for example, active exchange-traded equity securities.

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·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 are segregated for valuation purposes. Each loan pool is separately valued utilizing a discounted cash flow analysis. Projected monthly cash flows are discounted to present value using a market rate for comparable loans, which is not considered an exit price. Characteristics of comparable loans include remaining term, coupon interest, and estimated prepayment speeds. Delinquent loans are separately evaluated given the impact delinquency has on the projected future cash flow of the loan and the approximate discount or market rate.

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FHLB Stock

Due to the restrictions placed on the transferability of FHLB stock it is not practical to determine the fair value.

Deposit Liabilities

The estimated fair value of deposits with no stated maturity, which includes demand deposits, money market, and other savings accounts, is the amount payable on demand. Although market premiums paid for depository institutions reflect an additional value for these low-cost deposits, adjusting fair value for any value expected to be derived from retaining those deposits for a future period of time or from the benefit that results from the ability to fund interest-earning assets with these deposit liabilities is prohibited. The fair value estimates of deposit liabilities do not include the benefit that results from the low-cost funding provided by these deposits compared to the cost of borrowing funds in the market. Fair values for time deposits are estimated using a discounted cash flow calculation that applies contractual cost currently being offered in the existing portfolio to current market rates being offered locally for deposits of similar remaining maturities. The valuation adjustment for the portfolio consists of the present value of the difference of these two cash flows, discounted at the assumed market rate of the corresponding maturity.

Borrowed Funds

Fixed rate advances are valued by comparing their contractual cost to the prevailing market cost.  The carrying amount of repurchase agreements approximates fair value.

Junior Subordinated Debentures

The fair value of junior subordinated debentures is calculated using the discounted cash flows at the prevailing rate of interest.

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 September 30, 2012 and December 31, 2011, there was no significant unrealized appreciation or depreciation on these financial instruments.

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The following table sets forth the carrying amount and estimated fair value of financial instruments included in the consolidated statement of financial condition at September 30, 2012 and December 31, 2011:

	September 30, 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	$	638,068	638,068	638,068	—	—	688,297	688,297
Securities available-for-sale	951,879		951,879	20,068	922,981	8,830	908,349	908,349
Securities held-to-maturity	167,739		174,821	—	174,821	—	231,389	239,412
Loans receivable, net	5,657,456		5,982,671	14,152	—	5,968,519	5,480,381	5,839,674
Accrued interest receivable	25,324		25,324	25,324	—	—	24,599	24,599
FHLB Stock	46,834		46,834	—	—	—	48,935	48,935
Total financial assets	$	7,487,300	7,819,597	697,612	1,097,802	5,977,349	7,381,950	7,749,266
Financial liabilities:
Savings and checking accounts	$	3,862,772	3,862,772	3,862,772	—	—	3,495,508	3,495,508
Time deposits	1,961,984		2,004,067	—	—	2,004,067	2,284,817	2,329,451
Borrowed funds	855,552		914,459	160,019	—	754,440	827,925	899,547
Junior subordinated debentures	103,094		117,059	—	—	117,059	103,094	116,725
Cash flow hedges - swaps	13,932		13,932	—	13,932	—	13,637	13,637
Accrued interest payable	1,111		1,111	1,111	—	—	1,104	1,104
Total financial liabilities	$	6,798,445	6,913,400	4,023,902	13,932	2,875,566	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 September 30, 2012 and December 31, 2011.  There were no transfers of financial instruments between Level 1 and Level 2 during the nine months ended September 30, 2012.

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The following table represents assets and liabilities measured at fair value on a recurring basis at September 30, 2012 (in thousands):

						Total
						assets at
	Level 1		Level 2		Level 3	fair value
Equity securities	$	20,068	—		—	20,068
Debt securities:
U.S. government and agencies	—		41		—	41
Government sponsored enterprises	—		124,354		—	124,354
States and political subdivisions	—		141,863		—	141,863
Corporate	—		11,465		8,830	20,295
Total debt securities	—		277,723		8,830	286,553
Residential mortgage-backed securities:
GNMA	—		42,438		—	42,438
FNMA	—		117,605		—	117,605
FHLMC	—		58,844		—	58,844
Non-agency	—		703		—	703
Collateralized mortgage obligations:
GNMA	—		28,960		—	28,960
FNMA	—		161,442		—	161,442
FHLMC	—		211,657		—	211,657
SBA	—		16,421		—	16,421
Non-agency	—		7,188		—	7,188
Total mortgage-backed securities	—		645,258		—	645,258
Interest rate swaps	—		(13,932	)	—	(13,932	)
Total assets	$	20,068	909,049		8,830	937,947

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The following table represents assets and liabilities 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 debt securities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the periods indicated (in thousands):

	Quarter ended			Nine months ended
	September 30, 2012		September 30, 2011	September 30, 2012		September 30, 2011
Beginning balance	$	8,296	9,040	9,657		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	534		881	(827	)	712
Purchases	—		—	—		—
Sales	—		—	—		—
Transfers in to Level 3	—		—	—		—
Transfers out of Level 3	—		—	—		—
Ending balance	$	8,830	9,921	8,830		9,921

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 September 30, 2012 (in thousands):

					Total
					assets at
	Level 1		Level 2	Level 3	fair value
Loans measured for impairment	$	—	—	49,184	49,184
Real estate owned	—		—	29,291	29,291
Total assets	$	—	—	78,475	78,475

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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 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.

The following table presents additional quantitative information about assets measured at fair value on a recurring and nonrecurring basis and for which we have utilized Level 3 inputs to determine fair value at September 30, 2012 (dollar amounts in thousands):

	Fair value		Valuation techniques	Significant unobservable inputs	Range (weighted average)
Debt securities	$	8,830	Discounted cash flow	Discount margin	0.35% to 2.10% (0.67)%
				Default rates	2.00%
				Prepayment speeds	1.00% annually
Loans measured for impairment	49,184		Appraisal value (1)	N/A	N/A
Real estate owned	29,291		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 fair 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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(10)Mortgage Loan Servicing

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

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

The following table shows changes in MSRs at and for the quarter ended September 30, 2012 (in thousands):

						Net
						carrying
	Servicing			Valuation		value and
	rights			allowance		fair value
Balance at June 30, 2012	$	3,503		(84	)	3,419
Additions/ (reductions)	438			84		522
Amortization	(553		)	—		(553	)
Balance at September 30, 2012	$	3,388		—		3,388

The following table shows changes in MSRs at and for the nine months ended September 30, 2012 (in thousands):

					Net
					carrying
	Servicing			Valuation	value and
	rights			allowance	fair value
Balance at December 31, 2011	$	3,655		—	3,655
Additions/ (reductions)	1,780			—	1,780
Amortization	(2,047		)	—	(2,047	)
Balance at September 30, 2012	$	3,388		—	3,388

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The following table shows changes in MSRs at and for the quarter ended September 30, 2011 (in thousands):

					Net
					carrying
	Servicing			Valuation	value and
	rights			allowance	fair value
Balance at June 30, 2011	$	4,842		—	4,842
Additions/ (reductions)	510			—	510
Amortization	(854		)	—	(854	)
Balance at September 30, 2011	$	4,498		—	4,498

The following table shows changes in MSRs at and for the nine months ended September 30, 2011 (in thousands):

					Net
					carrying
	Servicing			Valuation	value and
	rights			allowance	fair value
Balance at December 31, 2010	$	5,969		—	5,969
Additions/ (reductions)	1,145			—	1,145
Amortization	(2,616		)	—	(2,616	)
Balance at September 30, 2011	$	4,498		—	4,498

The following table presents additional information about the inputs used to determine the fair value of our MSRs at the periods indicated:

	September 30,			September 30,
	2012 *			2011 **
	(Weighted average)
Forward yield curve (5 year LIBOR swap)	0.8		%	1.3		%
Prepayment rates	20.0		%	20.6		%
Annual service cost per loan	$	67		$	67
Average life expectancy (months)	52			49
Option adjusted spread (basis points)	800			—
Discount rate	—			10.5		%

*  Stochastic modeling

**  Static modeling

(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.

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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 distri-butions 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 September 30, 2012, $14.5 million was pledged as collateral to the counterparty.

At September 30, 2012, the fair value of the swap agreements was $(13.9) 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.

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The following table shows liability derivatives, included in other liabilities, at September 30, 2012 and December 31, 2011 (in thousands):

	September 30,		December 31,
	2012		2011
Fair value	$	13,932	13,637
Notional amount	100,000		100,000
Collateral posted	14,455		13,855

(12)Legal Proceedings

We establish accruals for legal proceedings when information related to the loss contingencies represented by those matters indicates both that a loss is probable and that the amount of loss can be reasonably estimated. Any such accruals are adjusted thereafter as appropriate to reflect changed circumstances. Due to the inherent subjectivity of assessments and unpredictability of outcomes of legal proceedings, any amounts accrued may not represent the ultimate loss to us from legal proceedings.

Toth v. Northwest Savings Bank

On May 7, 2012, we were named as a defendant in an alleged class action lawsuit filed in the Court of Common Pleas of Allegheny County, Pennsylvania, captioned as Toth v. Northwest Savings Bank, No. GD-12-8014. The Complaint challenges the manner in which debit card transaction overdraft fees were charged and the policies related to the posting order of debit card transactions. The Complaint asserts various claims under state law and seeks compensatory damages and attorneys’ fees. We filed preliminary objections seeking dismissal of the case on June 29, 2012.  In response, the plaintiff filed an Amended Complaint on September 6, 2012.  We intend to vigorously defend against the plaintiff’s claims and to oppose any effort to certify a class in this case. At this stage of the lawsuit, it is not yet possible to estimate potential losses, if any. Although it is not possible to predict the ultimate resolution or financial liability with respect to this litigation, management after consultation with legal counsel, currently does not anticipate that the aggregate liability, if any, arising out of this proceeding will have a material adverse effect on our financial position, or cash flows; although, at the present time, management is not in a position to determine whether such proceeding will have a material adverse effect on our results of operations in any future quarterly reporting period.

Daly v. Northwest Savings Bank

On July 11, 2011, we were named as a defendant in an alleged class action lawsuit filed in the United States District Court for the Western District of Pennsylvania, captioned as Daly v. Northwest Savings Bank, No. 2:11-cv-00911-DSC. The Complaint challenges the credit disclosures provided to residential mortgage loan applicants and the policies related to the residential mortgage loan application process and the prequalification request process. The Complaint asserts statutory claims under the Fair Credit Reporting Act, 15 U.S.C. 1681g(g), and seeks statutory damages and attorneys’ fees. We have filed a motion for summary judgment and intend to continue to vigorously defend against the plaintiff’s claims. The plaintiff has filed a motion for class certification and we subsequently filed an opposition. Both motions are presently pending before the Court. At this stage of the lawsuit, it is not yet possible to estimate potential losses, if any. Although it is not possible to predict the ultimate resolution or financial liability with respect to this litigation, management, after consultation with legal counsel, currently does not anticipate that the aggregate liability, if any, arising out of this proceeding will have a material adverse effect on our financial position, or cash flows; although, at the present time, management is not in a position to determine whether such proceeding will have a material adverse effect on our results of operations in any future quarterly reporting period.

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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, demand for credit 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 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 as of 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 original 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.

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

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·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 as well as 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 significant 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 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.  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 of a specific security, 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.  Semi-annually (as of May 31 and November 30) we receive quoted market prices from a second independent pricing service.

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 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

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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 that could negatively affect its value.  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, 2012, through the assistance of an external third party, we 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, 2012, we did not identify any individual reporting units where the fair value was less than the carrying value.  No events or material changes have occurred since that date that would require an updated evaluation. 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 which 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.

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Executive Summary and Comparison of Financial Condition

Total assets at September 30, 2012 were $8.048 billion, an increase of $90.0 million, or 1.1%, from $7.958 billion at December 31, 2011.  This increase in assets was due to an increase in loans receivable of $177.1 million, which was partially offset by decreases in total cash, interest-earning deposits and marketable securities of $70.3 million and other assets of $23.6 million. The net increase in total assets primarily resulted from a net increase in funding sources as deposits and borrowed funds increased by $44.4 million and $27.6 million, respectively, and shareholder’s equity grew by $19.7 million primarily driven by earnings.

Loans receivable increased by $177.1 million, or 3.2%, to $5.729 billion at September 30, 2012, from $5.552 billion at December 31, 2011.  Loan demand was strong during the nine months ended September 30, 2012, with originations of $1.749 billion.  Due to our continued efforts to expand business banking relationships, our business banking loan portfolio increased by $144.1 million, or 7.9%, to $1.968 billion at September 30, 2012 from $1.824 billion at December 31, 2011. Commercial real estate loans and commercial loans increased during the first nine months of the year by $125.2 million, or 8.7%, and $18.9 million, or 4.9%, respectively.  Our personal banking loan portfolio increased by $33.0 million, or 0.9%, to $3.761 billion at September 30, 2012 from $3.728 billion at December 31, 2011.  With consumers taking advantage of continued low interest rates on loans secured by residential properties, mortgage loans increased by $26.9 million, or 1.1%, and home equity loans increased by $16.1 million, or 1.5%.  These increases were partially offset by a decrease in consumer loans of $10.0 million, or 4.1%.

Total deposits increased by $44.4 million, or 0.8%, to $5.825 billion at September 30, 2012 from $5.780 billion at December 31, 2011.  Deposit balances increased across all product types with the exception of time deposits. Noninterest-bearing demand deposits increased by $105.2 million, or 16.0%, to $763.8 million at September 30, 2012 from $658.6 million at December 31, 2011. Interest-bearing demand deposits increased by $41.7 million, or 5.2%, to $842.4 million at September 30, 2012 from $800.7 million at December 31, 2011. Savings deposits, including insured money fund accounts, increased by $220.3 million, or 10.8%, to $2.257 billion at September 30, 2012 from $2.036 billion at December 31, 2011. Time deposits decreased by $322.8 million, or 14.1%, to $1.962 billion at September 30, 2012 from $2.285 billion at December 31, 2011.  We believe this continued movement of funds from time deposits to other deposit products reflects depositors’ concerns about the current economic environment and their desire to retain liquidity and flexibility for the possibility of a future increase in market interest rates.

Borrowed funds increased by $27.7 million, or 3.3%, to $855.6 million at September 30, 2012, from $827.9 million at December 31, 2011 due to an increase in corporate sweep repurchase agreements. None of our FHLB advances matured during the quarter and the next scheduled maturity is in 2015.

Total shareholders’ equity at September 30, 2012 was $1.175 billion, or $12.00 per share, an increase of $19.7 million, or 1.7%, from $1.155 billion, or $11.85 per share, at December 31, 2011.  This increase was primarily attributable to net income of $47.2 million and other comprehensive income of $3.6 million, which was partially offset by cash dividends paid of $34.3 million and the repurchase of common stock of $2.2 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 September 30, 2012

					Minimum capital			Well capitalized
	Actual				requirements *			requirements *
	Amount		Ratio		Amount	Ratio		Amount	Ratio
Total capital (to risk weighted assts)
Northwest Bancshares, Inc.	$	1,177,648	22.91	%	—	—		—	—
Northwest Savings Bank	1,038,223		20.30	%	409,161	8.00	%	511,451	10.00	%
Tier I capital (to risk weighted assets)
Northwest Bancshares, Inc.	1,110,124		21.59	%	—	—		—	—
Northwest Savings Bank	973,909		19.04	%	204,580	4.00	%	306,870	6.00	%
Tier I capital (leverage) (to average assets)
Northwest Bancshares, Inc.	1,110,124		14.04	%	—	—		—	—
Northwest Savings Bank	973,909		12.36	%	315,250	4.00	%	394,063	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	%	—	—		—	—
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	%	—	—		—	—
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	%	—	—		—	—
Northwest Savings Bank	919,807		11.81	%	311,431	4.00	%	389,288	5.00	%

* Currently the Federal Reserve does not have capital requirements established for Savings and Loan holding companies.

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

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liquidity ratio at September 30, 2012 was 16.4%.  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 September 30, 2012 Northwest had $1.918 billion of additional borrowing capacity available with the FHLB, including $150.0 million on an overnight line of credit, as well as $194.0 million of borrowing capacity available with the Federal Reserve Bank and $80.0 million with two correspondent banks.

We paid $11.5 million and $11.1 million in cash dividends during the quarters ended September 30, 2012 and 2011, respectively, and $34.3 million and $33.2 million during the nine months ended September 30, 2012 and 2011, respectively.  Dividends paid for the quarter ended and nine months ended September 30, 2012 increased compared to the same periods in the prior year due to an increase in dividends per share of $0.01 and $0.04, respectively. This increase was partially offset by the large number of shares of common stock that were repurchased and retired during 2011.  The common stock dividend payout ratio (dividends declared per share divided by net income per share) was 70.1% and 64.7% on dividends of $0.12 and $0.11 for the quarters ended September 30, 2012 and 2011, respectively.  The common stock dividend payout ratio for the nine month periods ended September 30, 2012 and 2011 was 72.0% and 66.7%, respectively, on dividends of $0.36 and $0.32 per share, respectively.  The Board of Directors declared a cash dividend of $0.12 per share payable on November 15, 2012 to shareholders of record as of November 1, 2012.  This represents the 72nd consecutive quarter we have paid a cash dividend. On October 19, 2012 Northwest paid a dividend of $175.0 million to the Company as part of our on-going capital management strategy.

Nonperforming Assets

The following table sets forth information with respect to our 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.

	September 30, 2012			December 31, 2011
	(Dollars in thousands)
Loans accounted for on a nonaccrual basis
Personal Banking:
Residential mortgage loans	$	24,476		28,221
Home equity loans	9,365			9,560
Other consumer loans	1,494			2,667
Total Personal Banking	35,335			40,448
Business Banking:
Commercial real estate loans	61,632			62,494
Commercial loans	23,805			28,163
Total Business Banking	85,437			90,657
Total nonaccrual loans	120,772			131,105
Total nonaccrual loans as a percentage of total loans	2.11		%	2.36	%
Total real estate acquired through foreclosure and other real estate owned (“REO”)	29,291			26,887
Total nonperforming assets	$	150,063		157,992
Total nonperforming assets as a percentage of total assets	1.86		%	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 September 30, 2012 and December 31, 2011 were $201.6 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 region to monitor the performance and status of loans on an internal watch list.  On an on-going basis the loan officer in conjunction with a portfolio manager grades or classifies problem loans or potential problem loans based upon their knowledge of the lending relationship and other information previously accumulated.  This rating is also reviewed independently by our Loan Review department on a periodic basis.  Our loan grading system for problem loans is consistent with industry regulatory guidelines which classify loans as “substandard”, “doubtful” or “loss.”  Loans that do not expose us to risk sufficient to warrant classification in one of the 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 and are greater than $1,000,000 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

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segmentation is accomplished by grouping loans of similar product types, risk characteristics and industry concentration into homogeneous pools.  Historical loss ratios are analyzed and adjusted based on delinquency trends as well as the current economic, political, regulatory and interest rate environment and used to estimate the current measure of impairment.

The individual impairment measures along with the estimated loss for each homogeneous pool are consolidated into one summary document.  This summary schedule along with the supporting 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 September 30, 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 of $71.2 million, or 1.24% of total loans at September 30, 2012 remained consistent with the December 31, 2011 levels. Business banking loans typically have the highest reserve factors and historical loss ratios.   Given the robust growth in our business banking portfolio the existing level of allowance for loan losses remains appropriate.

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 $120.8 million, or 2.11% of total loans, at September 30, 2012 decreased by $10.3 million, or 7.9%, 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 0.43% for the nine months ended September 30, 2012 compared to 0.65% for the nine months ended September 30, 2011.  Additionally, criticized loans decreased by $4.8 million, or 1.4%, to $344.3 million at September 30, 2012 compared to $349.1 million at December 31, 2011.  We believe all known losses as of the balance sheet dates have been recorded.

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Comparison of Operating Results for the Quarters Ended September 30, 2012 and 2011

Net income for the quarter ended September 30, 2012 was $15.7 million, or $0.17 per diluted share, a decrease of $1.0 million, or 6.1%, from $16.7 million, or $0.17 per diluted share, for the same quarter last year.  The decrease in net income resulted from an increase in noninterest expense of $1.9 million and a decrease in net interest income of $1.0 million. Partially offsetting these factors were an increase in noninterest income of $425,000 and decreases in the provision for loan losses of $1.2 million and income tax expense of $304,000. A discussion of significant changes follows.  Annualized, net income for the quarter ended September 30, 2012 represents a 5.37% and 0.78% return on average equity and return on average assets, respectively, compared to 5.62% and 0.83% for the same quarter last year.

Interest Income

Total interest income decreased by $5.8 million, or 6.5%, to $84.2 million for the quarter ended September 30, 2012 due to a decrease in the average yield earned on interest earning assets partially offset by a shift in the average balance of interest-earning assets from cash and investments into loans.  The average yield on interest earning assets decreased to 4.52% for the quarter ended September 30, 2012 from 4.79% for the quarter ended September 30, 2011.  The average yield on all categories of interest earning assets, with the exception of other interest earning deposits and cash dividends on FHLB stock, decreased when compared to the prior year period.  Average interest earning assets decreased by $46.1 million, or 0.6%, to $7.421 billion for the quarter ended September 30, 2012 from $7.467 billion for the quarter ended September 30, 2011.

Interest income on loans decreased $3.5 million, or 4.3%, to $77.1 million for the quarter ended September 30, 2012 compared to $80.6 for the quarter ended September 30, 2011.  This decrease was due to the decrease in the average yield on loans receivable to 5.39% for the quarter ended September 30, 2012 from 5.82% for the quarter ended September 30, 2011.  The decrease in average yield is primarily attributable to our variable rate loans adjusting downward as re-pricing dates occur, refinancing by customers of our existing portfolio and increased pricing competition on new loan originations.  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 $212.6 million, or 3.9%, to $5.703 billion for the quarter ended September 30, 2012 from $5.491 billion for the quarter ended September 30, 2011. Leading this increase was growth in our business banking loan portfolio which was facilitated by our emphasis on building quality business banking relationships.  We believe the growth in our mortgage and home equity loan portfolios 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 $1.6 million, or 28.9%, to $3.9 million for the quarter ended September 30, 2012 from $5.5 million for the quarter ended September 30, 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 $135.5 million, or 15.8%, to $722.4 million for the quarter ended September 30, 2012 from $857.9 million for the quarter ended September 30, 2011 due primarily to redirecting cash flow to fund new loan originations.  The average yield on mortgage-backed securities decreased to 2.18% for the quarter ending September 30, 2012 from 2.58% for the quarter ending September 30, 2011. The decrease in average yield resulted from variable rate securities continuing to re-price downward and the purchase of mortgage-backed securities at lower interest rates than the existing portfolio yield.

Interest income on investment securities decreased by $732,000, or 20.7%, to $2.8 million for the quarter ended September 30, 2012 from $3.5 million for the quarter ended September 30, 2011, due to decreases in both the average balance and the average yield.  The average balance of investment securities decreased by $62.8 million, or 15.2%, to $350.1 million for the quarter ended September 30, 2012 from

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$412.9 million for the quarter ended September 30, 2011 due primarily to bonds that matured and were called. The average yield on investment securities decreased to 3.20% for the quarter ended September 30, 2012 from 3.42% for the quarter ended September 30, 2011, primarily as a result of higher rate municipal securities being called and replaced with government agency securities with lower market interest rates.

Interest income on interest-earning deposits decreased by $29,000, or 7.4%, to $364,000 for the quarter ended September 30, 2012 from $393,000 for the quarter ended September 30, 2011.  This decrease is due to the use of cash to fund new loans causing the average balance of interest-earning deposits to decrease by $54.9 million, or 8.4%, to $598.1 million for the quarter ended September 30, 2012 from $653.0 million for the quarter ended September 30, 2011.  The average yield on interest-earning deposits remained unchanged at 0.24% for the quarters ended September 30, 2012 and 2011.

Interest Expense

Interest expense decreased by $4.8 million, or 20.8%, to $18.2 million for the quarter ended September 30, 2012 from $23.0 million for the quarter ended September 30, 2011.  This decrease in interest expense was due to decreases in both the average cost and the average balance of interest-bearing liabilities. The average cost of interest-bearing liabilities decreased to 1.20% for the quarter ended September 30, 2012 from 1.49% for the quarter ended September 30, 2011.  Average interest-bearing liabilities decreased by $95.2 million, or 1.6%, to $6.017 billion for the quarter ended September 30, 2012 from $6.112 billion for the quarter ended September 30, 2011.  The decrease in the cost of funds resulted primarily from continued decreases in the level of market interest rates which enabled us to reduce the rate of interest paid on all deposit products.  In addition, there continues to be a shift from time deposits to low cost deposits such as checking, savings and insured money fund accounts. The average balance of time deposits decreased by $346.4 million, while all other deposit types increased by $235.5 million in the current quarter, when compared to the same period last year.

Net Interest Income

Net interest income decreased by $1.0 million, or 1.5%, to $66.0 million for the quarter ended September 30, 2012 from $67.0 million for the quarter ended September 30, 2011.  This decrease is attributable to the factors discussed above.  Despite the challenging interest rate environment, our interest rate spread increased to 3.32% for the quarter ended September 30, 2012 from 3.29% for the quarter ended September 30, 2011.  This is primarily due to the shift in asset mix from cash and marketable securities to higher yielding loans and the shift from time deposits to lower cost deposits. In addition, total interest-bearing liabilities decreased by twice the amount of interest-earning assets.

Provision for Loan Losses

The provision for loan losses decreased by $1.2 million, or 14.2%, to $6.9 million for the quarter ended September 30, 2012 from $8.1 million for the quarter ended September 30, 2011.  This decrease is primarily the result of a decrease in classified loans of $13.1 million, or 5.0%, to $247.0 million at September 30, 2012 from $260.1 million at September 30, 2011. Additionally, loans 90 days or more delinquent were at the lowest level in more than four years, decreasing $31.8 million, or 33.2%, to $80.4 million at September 30, 2012, compared to $112.2 million at September 30, 2011.  Partially offsetting the reduction in the required provision resulting from these improvements was an additional provision for two large loans that were downgraded to doubtful.

In determining the amount of the current period provision, we considered the current economic conditions, including unemployment levels and bankruptcy filings, changes in real estate values and the impact of these factors on the quality of our loan portfolio and historical loss factors.  We also consider net charge-offs, which for the quarter ended September 30, 2012 were $5.8 million compared to $10.3 million for the quarter ended September 30, 2011, a reduction of 43.2%.  Annualized net charge-offs to average

54

loans decreased to 0.41% for the quarter ended September 30, 2012 from 0.75% for the quarter ended September 30, 2011. We also analyzed the allowance for loan losses as described in the section entitled “Allowance for Loan Losses.”  The provision that was 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 increased by $425,000, or 2.9%, to $14.9 million for the quarter ended September 30, 2012 from $14.5 million for the quarter ended September 30, 2011.  The increase is primarily attributable to increases in mortgage banking income and service charges and fees.  Mortgage banking income increased by $1.1 million, or 271.0%, to $1.5 million for the quarter ended September 30, 2012 from $400,000 for the quarter ended September 30, 2011 due to the increased number of residential mortgage loans sold into the secondary market at favorable pricing.  Service charges and fees increased by $273,000, or 3.2%, to $8.8 million from $8.5 million for the same period last year.  This increase is primarily attributable to increases in the number of loan and deposit relationships we have secured over the past year. Partially offsetting these increases were decreases in income from bank owned life insurance and insurance commission income.  Income on bank owned life insurance decreased by $790,000, or 40.8%, to $1.1 million for the quarter ended September 30, 2012 from $1.9 million for the quarter ended September 30, 2011 due to the payment of benefits on two policies during the third quarter of 2011.  Insurance commission income decreased by $316,000, or 17.6%, to $1.5 million for the quarter ended September 30, 2012 from $1.8 million for the quarter ended September 30, 2011, due to decreased sales of loan insurance by our consumer finance subsidiary.

Noninterest Expense

Noninterest expense increased by $1.9 million, or 3.8%, to $51.8 million for the quarter ended September 30, 2012 from $49.9 million for the quarter ended September 30, 2011.  This increase is primarily the result of increases in compensation and employee benefits expense, professional services and processing expenses.  Compensation and employee benefits expense increased by $2.2 million, or 8.3%, to $28.2 million for the quarter ended September 30, 2012 from $26.0 million for the quarter ended September 30, 2011.  This increase is attributable to increases in health insurance costs and the addition of 77 full time equivalent employees this year.  This increase in personnel has primarily been a result of our efforts to improve our credit and compliance oversight.  Professional services increased by $701,000, or 56.6%, to $1.9 million for the quarter ended September 30, 2012 from $1.2 million for the quarter ended September 30, 2011 primarily due to ongoing internal audit outsourcing and compliance management system enhancements.  Processing expenses increased by $444,000, or 7.5% to $6.3 million for the quarter ended September 30, 2012 from $5.9 million in the same period last year.  This increase is primarily due to increased software licensing fees and expense related to our ATM replacement program.  These increases were partially offset by decreases in marketing expense and other expense.  Marketing expense decreased by $958,000, or 34.4%, to $1.8 million for the quarter ended September 30, 2012 from $2.8 million for the quarter ended September, 2011. This decrease was due to the timing of several major campaigns.  Other expense decreased by $258,000, or 9.3%, to $2.5 million for the quarter ended September 30, 2012 from $2.8 million for the quarter ended September 30, 2011 primarily due to the timing of charitable contributions.

Income Taxes

The provision for income taxes for the quarter ended September 30, 2012 decreased by $304,000, or 4.5%, to $6.5 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 $1.3 million, or 5.7%.  Our effective tax rate for the quarter ended September 30, 2012 was 29.3% compared to 29.0% for the prior year period.  The current

55

year effective tax rate was affected by a decrease in tax-free municipal securities income of $625,000, or 21.9%, compared to last year.

Comparison of operating results for the nine months ended September 30, 2012 and 2011

Net income for the nine months ended September 30, 2012 was $47.2 million, or $0.50 per diluted share, a decrease of $1.8 million, or 3.6%, from $49.0 million, or $0.48 per diluted share, for the same period last year.  The decrease in net income resulted primarily from decreases in net interest income of $3.3 million and noninterest income of $686,000 as well as an increase in noninterest expense of $3.2 million.  These changes were partially offset by a decrease in provision for loan losses of $5.5 million.  A discussion of significant changes follows.  Annualized, net income for the nine months ended September 30, 2012 represents a 5.42% and 0.79% return on average equity and return on average assets, respectively, compared to 5.25% and 0.81% for the same period last year.

Interest Income

Total interest income decreased by $15.7 million, or 5.8%, to $255.5 million for the nine months ended September 30, 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 4.60% for the nine months ended September 30, 2012 from 4.80% for the nine months ended September 30, 2011.  The average yield on all categories of interest earning assets, with the exception of other interest earning deposits and cash dividends on FHLB stock, decreased compared to the same period last year.  Average interest earning assets decreased by $114.1 million, or 1.5%, to $7.407 billion for the nine months ended September 30, 2012 from $7.521 billion for the nine months ended September 30, 2011.

Interest income on loans decreased by $8.3 million, or 3.5%, to $232.7 million for the nine months ended September 30, 2012 from $241.0 million for the nine months ended September 30, 2011.  The average yield on loans receivable decreased to 5.51% for the nine months ended September 30, 2012 from 5.84% for the nine months ended September 30, 2011. The decrease in average yield is primarily attributable to the interest rates on variable rate loans adjusting downward as market interest rates have continued to decrease, refinancing by customers of our existing portfolio and the origination of new loans in a lower interest rate and highly competitive environment.  This decrease was partially offset by an increase in the average balance of loans receivable of $139.9 million, or 2.5%, to $5.637 billion from $5.497 billion at September 30, 2011. This increase is primarily attributable to our emphasis on expanding our traditional mortgage and home equity loan niche and continuing to build commercial loan and commercial real estate loan relationships.

Interest income on mortgage-backed securities decreased by $5.4 million, or 29.0%, to $13.0 million for the nine months ended September 30, 2012 from $18.4 million for the nine months ended September 30, 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 $156.8 million, or 17.4%, to $743.6 million for the nine months ended September 30, 2012 from $900.4 for the nine months ended September 30, 2011 due primarily to redirecting cash flows to fund increased loan demand and repurchase common stock.  The average yield on mortgage-backed securities decreased to 2.34% for the nine months ended September 30, 2012 from 2.72% for the nine months ended September 30, 2011.  The decrease in average yield resulted from adjustable rate mortgage-backed securities re-pricing downward and purchasing mortgage-backed securities during this period of historically low market interest rates.

Interest income on investment securities decreased by $2.0 million, or 19.1%, to $8.6 million for the nine months ended September 30, 2012 from $10.6 million for the nine months ended September 30, 2011. This decrease is the result of decreases in both the average balance and average yield.  The average

56

balance of investment securities decreased by $52.2 million, or 13.5%, to $334.8 million for the nine months ended September 30, 2012 from $387.0 million for the nine months ended September 30, 2011, due primarily to called and maturing bonds.  The average yield on investment securities decreased to 3.41% for the nine months ended September 30, 2012 from 3.65% for the nine months ended September 30, 2011, as a result of municipal and government agency bonds with higher interest rates being called.

Interest income on interest-earning deposits decreased by $72,000, or 5.6%, to $1.2 million for the nine months ended September 30, 2012 from $1.3 million for the nine months ended September 30, 2011.  This decrease is due to the average balance decreasing by $36.9 million, or 5.4%, to $644.6 million for the nine months ended September 30, 2012 from $681.5 million for the nine months ended September 30, 2011.  The average balance decreased due to increased loan demand and a decrease in time deposit balances.  The average yield on interest-earning deposits remained unchanged at 0.25% for the nine months ended September 30, 2012 and 2011.

Interest Expense

Interest expense decreased by $12.3 million, or 17.5%, to $58.2 million for the nine months ended September 30, 2012 from $70.5 million for the nine months ended September 30, 2011.  This decrease in interest expense was due to a decrease in the average cost of interest-bearing liabilities of 0.25% to 1.29% for the nine months ended September 30, 2012 from 1.54% for the nine months ended September 30, 2011. In addition, the average balance of interest-bearing liabilities decreased by $104.2 million, or 1.7%, to $6.030 billion for the nine months ended September 30, 2012 from $6.134 billion for the nine months ended September 30, 2011.  The decrease in the cost of funds was primarily due to a decrease in the level of market interest rates resulting in a decrease in the rates on all deposit products.  The decrease in interest-bearing liabilities is the result of a decrease in average balance of time deposits of $275.1 million, or 11.6%, as consumers continue to forgo the nominal increases in return that time deposits provide in favor of more liquid alternatives during this period of historically low interest rates.

Net Interest Income

Net interest income decreased by $3.3 million, or 1.7%, to $197.4 million for the nine months ended September 30, 2012 from $200.7 million for the nine months ended September 30, 2011.  This decrease in net interest income was attributable to the factors discussed above as well as a decrease in total interest-earning assets.  Our net interest rate spread increased to 3.31% for the nine months ended September 30, 2012 from 3.27% for the nine months ended September 30, 2011, while our net interest margin decreased slightly to 3.55% from 3.56% for the same periods.

Provision for Loan Losses

The provision for loan losses decreased by $5.5 million, or 23.3%, to $18.2 million for the nine months ended September 30, 2012 from $23.7 million for the nine months ended September 30, 2011.  Facilitating this decrease was the reduction in some of the loss factors used to determine the reserve requirement for loans collectively evaluated for impairment as well as improved credit quality over the last twelve months.  Total nonperforming loans decreased $40.6 million, or 31.0%, to $120.8 million at September 30, 2012 compared to $161.4 at September 30, 2011. Total criticized loans decreased by $16.2 million, or 4.5%, to $344.3 million at September 30, 2012 from $360.5 million at September 30, 2011. Additionally, total loan delinquency decreased $26.9 million, or 17.1%, when compared to September 30, 2011.  Partially offsetting these factors was an increase in specific reserves required for four large commercial banking loans which were downgraded to doubtful.

In determining the amount of the current period provision, we considered economic conditions, including unemployment levels, bankruptcy filings and changes in real estate values and the impact of these factors on the quality of our loan portfolio and historical loss factors.  We also considered net charge-offs

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which for the nine months ended September 30, 2012, decreased by $8.8 million, or 32.5%, to $18.1 million, compared to $26.9 million for the nine months ended September 30, 2011.  Annualized net charge-offs to average loans was 0.43% for the nine months ended September 30, 2012 compared to 0.65% for the nine months ended September 30, 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 1.6%, to $43.4 million for the nine months ended September 30, 2012 from $44.1 million for the nine months ended September 30, 2011, due primarily to a decrease in income from bank owned life insurance and service charges and fees as well as an increase in loss on real estate owned.  Income on bank owned life insurance decreased by $1.4 million, or 30.0%, to $3.4 million for the nine months ended September 30, 2012 from $4.8 million for the nine months ended September 30, 2011 due to benefit payments received on four policies during the prior year.  Service charges and fees decreased by $849,000, or 3.2%, to $25.9 million for the nine months ended September 30, 2012 compared to $26.7 million for the same period in the prior year due to changes in overdraft fees assessed on transactional deposit accounts. Loss on real estate owned increased $879,000, or 44.8%, to $2.8 million for the nine months ended September 30, 2012 as we continue to actively manage our portfolio of properties, currently valued at $29.3 million. The increase is due to losses on the sale of properties and write-downs on some of the remaining properties.  Partially offsetting these factors was an increase in mortgage banking income of $1.9 million, or 216.1%, to $2.8 million for the nine months ended September 30, 2012 from $887,000 for the nine months ended September 30, 2011, as we have increased the amount of long-term, low-rate residential mortgage loans sold into the secondary market.

Noninterest Expense

Noninterest expense increased by $3.2 million, or 2.1%, to $155.0 million for the nine months ended September 30, 2012 from $151.8 million for the nine months ended September 30, 2011.  This increase is primarily attributable to increases in compensation and employee benefits, processing expenses and professional services.  Compensation and employee benefits increased by $2.2 million, or 2.8%, to $83.4 million for the nine months ended September 30, 2012 from $81.2 million for the nine months ended September 30, 2011. This increase was due to the addition of 101 full time equivalent employees since September 30, 2011 and increased health insurance and pension costs.  Processing expenses increased by $1.1 million, or 6.9%, to $18.5 million for the nine months ended September 30, 2012 from $17.4 million for the nine months ended September 30, 2011 as a result of regular system and software upgrades and replacements.  Professional services expenses increased by $1.3 million, or 35.8%, to $5.1 million for the nine months ended September 30, 2012 from $3.8 million for the nine months ended September 30, 2011 as a result of the continued engagement of consultants to assist in our efforts to strengthen consumer compliance and attorneys fees related to legal proceedings.  Partially offsetting these increases was a decrease in federal deposit insurance premiums of $1.9 million, or 29.6%, to $4.3 million for the nine months ended September 30, 2012 compared to $6.2 million at September 30, 2011 due to changes in the assessment of premiums which were enacted last year.  Additionally, premises and occupancy costs decreased by $770,000, or 4.4%, to $16.7 million for the nine months ended September 30, 2012 due primarily to reduced utilities and snow removal expenses as a result of the unusually mild winter and a decrease in furniture and equipment depreciation expense.

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Income Taxes

The provision for income taxes for the nine months ended September 30, 2012 decreased by $66,000, or 0.3%, to $20.3 from $20.4 million for the nine months ended September 30, 2011 due to a decrease in income before income taxes of $1.8 million, or 2.6%. Our effective tax rate for the nine months ended September 30, 2012 was 30.1% compared to 29.4% experienced in the same period last year.  This increase is primarily the result of a decrease in tax-free income from our investment in municipal securities and bank owned life insurance which had the effect of increasing the amount of taxable income.  We do not anticipate our effective tax rate to change significantly during the year.

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Average Balance Sheet

(Dollars in thousands)

The following table sets forth certain information relating to our 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.

	Quarters ended September 30,
	2012					2011
				Avg.				Avg.
	Average			yield/		Average		yield/
	balance		Interest	cost (f)		balance	Interest	cost (f)
Assets:
Interest-earning assets:
Loans receivable (a) (b) (includes FTE adjustments of $589 and $463, respectively)	$	5,703,380	77,698	5.43	%	5,490,795	81,025	5.86	%
Mortgage-backed securities (c)	722,368		3,941	2.18	%	857,898	5,544	2.58	%
Investment securities (c) (includes FTE adjustments of $1,197 and $1,534, respectively)	350,081		3,997	4.57	%	412,927	5,066	4.91	%
FHLB stock	46,834		12	0.10	%	52,336	—	—
Other interest-earning deposits	598,114		364	0.24	%	652,958	393	0.24	%
Total interest-earning assets (includes FTE adjustments of $1,786 and $1,997, respectively)	7,420,777		86,012	4.62	%	7,466,914	92,028	4.90	%
Noninterest earning assets (d)	625,460					560,951
Total assets	$	8,046,237				8,027,865
Liabilities and shareholders’ equity:
Interest-bearing liabilities:
Savings accounts	$	1,154,104	1,060	0.37	%	1,081,721	1,157	0.42	%
Interest-bearing demand accounts	834,890		180	0.09	%	798,424	244	0.12	%
Money market accounts	1,076,799		920	0.34	%	950,113	1,016	0.42	%
Certificate accounts	1,991,987		8,047	1.61	%	2,338,436	12,541	2.13	%
Borrowed funds (e)	856,292		6,576	3.06	%	840,560	6,625	3.13	%
Junior subordinated debentures	103,094		1,437	5.45	%	103,094	1,436	5.45	%
Total interest-bearing liabilities	6,017,166		18,220	1.20	%	6,112,348	23,019	1.49	%
Noninterest bearing checking	740,188					625,317
Noninterest bearing liabilities	119,365					100,856
Total liabilities	6,876,719					6,838,521
Shareholders’ equity	1,169,518					1,189,344
Total liabilities and shareholders’ equity	$	8,046,237				8,027,865
Net interest income/ Interest rate spread			67,792	3.42	%		69,009	3.41	%
Net interest-earning assets/ Net interest margin	$	1,403,611		3.65	%	1,354,566		3.70	%
Ratio of interest-earning assets to interest-bearing liabilities	1.23X					1.22X

(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 and securities sold under agreements to repurchase.

(f) 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 — 5.39% and 5.82%; respectively, Investment securities — 3.20% and 3.42%; respectively, interest-earning assets — 4.52% and 4.79%; respectively. GAAP basis net interest rate spreads were 3.32% and 3.29%, respectively and GAAP basis net interest margins were 3.56% and 3.59%, 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.

Quarters ended September 30, 2012 and 2011
						Net
	Rate			Volume		Change
Interest earning assets:
Loans	$	(6,439	)	3,112		(3,327	)
Mortgage-backed securities	(794		)	(809	)	(1,603	)
Investment securities	(325		)	(744	)	(1,069	)
FHLB stock	13			(1	)	12
Other interest-earning deposits	4			(33	)	(29	)
Total interest-earning assets	(7,541		)	1,525		(6,016	)
Interest-bearing liabilities:
Savings accounts	(174		)	77		(97	)
Now accounts	(75		)	11		(64	)
Money market demand accounts	(231		)	135		(96	)
Certificate accounts	(2,760		)	(1,734	)	(4,494	)
Borrowed funds	(173		)	124		(49	)
Debentures	1			—		1
Total interest-bearing liabilities	(3,412		)	(1,387	)	(4,799	)
Net change in net interest income	$	(4,129	)	2,912		(1,217	)

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Average Balance Sheet

(Dollars in thousands)

The following table sets forth certain information relating to our 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.

	Nine months ended September 30,
	2012					2011
				Avg.				Avg.
	Average			yield/		Average		yield/
	balance		Interest	cost (f)		balance	Interest	cost (f)
Assets:
Interest-earning assets:
Loans receivable (a) (b) (includes FTE adjustments of $1,681 and $1,250, respectively)	$	5,636,905	234,371	5.55	%	5,496,988	242,262	5.87	%
Mortgage-backed securities (c)	743,568		13,041	2.34	%	900,414	18,373	2.72	%
Investment securities (c) (includes FTE adjustments of $3,763 and $4,800, respectively)	334,799		12,335	4.91	%	387,034	15,390	5.30	%
FHLB stock	47,330		36	0.10	%	55,403	—	—
Other interest-earning deposits	644,602		1,217	0.25	%	681,464	1,289	0.25	%
Total interest-earning assets (includes FTE adjustments of $5,444 and $6,050, respectively)	7,407,204		261,000	4.70	%	7,521,303	277,314	4.91	%
Noninterest earning assets (d)	611,578					570,231
Total assets	$	8,018,782				8,091,534
Liabilities and shareholders’ equity:
Interest-bearing liabilities:
Savings accounts	$	1,133,876	3,200	0.38	%	1,079,718	3,861	0.48	%
Interest-bearing demand accounts	817,474		648	0.11	%	795,183	722	0.12	%
Money market accounts	1,024,971		2,762	0.36	%	932,617	3,231	0.46	%
Certificate accounts	2,105,367		27,725	1.76	%	2,380,466	38,680	2.17	%
Borrowed funds (e)	845,499		19,543	3.09	%	843,366	19,778	3.14	%
Junior subordinated debentures	103,094		4,281	5.46	%	103,094	4,261	5.45	%
Total interest-bearing liabilities	6,030,281		58,159	1.29	%	6,134,444	70,533	1.54	%
Noninterest bearing checking	714,454					611,624
Noninterest bearing liabilities	111,584					101,054
Total liabilities	6,856,319					6,847,122
Shareholders’ equity	1,162,463					1,244,412
Total liabilities and shareholders’ equity	$	8,018,782				8,091,534
Net interest income/ Interest rate spread			202,841	3.41	%		206,781	3.37	%
Net interest-earning assets/ Net interest margin	$	1,376,923		3.65	%	1,386,859		3.67	%
Ratio of interest-earning assets to interest-bearing liabilities	1.23X					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 and securities sold under agreements to repurchase.

(f) 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 — 5.51% and 5.84%; respectively, Investment securities — 3.41% and 3.65%; respectively, interest-earning assets — 4.60% and 4.80%; respectively. GAAP basis net interest rate spreads were 3.31% and 3.27%, respectively and GAAP basis net interest margins were 3.55% and 3.56%, respectively.

62

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.

Nine months ended September 30, 2012 and 2011
						Net
	Rate			Volume		Change
Interest earning assets:
Loans	$	(14,050	)	6,159		(7,891	)
Mortgage-backed securities	(2,356		)	(2,976	)	(5,332	)
Investment securities	(1,055		)	(2,000	)	(3,055	)
FHLB stock	42			(6	)	36
Other interest-earning deposits	(2		)	(70	)	(72	)
Total interest-earning assets	(17,421		)	1,107		(16,314	)
Interest-bearing liabilities:
Savings accounts	(855		)	194		(661	)
Now accounts	(94		)	20		(74	)
Money market demand accounts	(789		)	320		(469	)
Certificate accounts	(6,925		)	(4,030	)	(10,955	)
Borrowed funds	(303		)	68		(235	)
Debentures	20			—		20
Total interest-bearing liabilities	(8,946		)	(3,428	)	(12,374	)
Net change in net interest income	$	(8,475	)	4,535		(3,940	)

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

63

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 interest-bearing demand 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 1%, 2% and 3% in interest rates, the estimated net income may not decrease by more than 10%, 20% and 30%, respectively, within a one-year period.

Market value of equity simulation.  The market value of equity is the present value of assets and liabilities.  Given a parallel shift of 1%, 2% and 3% in interest rates, the market value of equity may not decrease by more than 15%, 30% and 35%, respectively, of total shareholders’ equity.

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 September 30, 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 September 30, 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	8.6		%	15.3		%	17.7		%	(5.1		)%
Projected increase/ (decrease) in return on average equity	8.3		%	14.8		%	17.1		%	(5.1		)%
Projected increase/ (decrease) in earnings per share	$	0.06		$	0.10		$	0.12		$	(0.03	)
Projected percentage increase/ (decrease) in market value of equity	(3.6		)%	(11.7		)%	(9.9		)%	(7.4		)%

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.

64

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.  However, we cannot presently determine whether or not any claims against us will have a material adverse effect on our results of operations in any future reporting period.  Refer to Note 12.

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 September 30, 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)
July	—	$	—	—	1,157,747
August	183,780	12.00		183,780	973,967
September	—	—		—	973,967
	183,780	$	12.00
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)
July	—	$	—	—	4,750,000
August	—	—		—	4,750,000
September	—	—		—	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.

65

Item 3. Defaults Upon Senior Securities

Not applicable.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

Not applicable.

Item 6. Exhibits

31.1	Certification 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.
31.2	Certification 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.
32.1	Certification 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

66

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:	November 5, 2012	By:	/s/ William J. Wagner
			William J. Wagner
			President and Chief Executive Officer
			(Duly Authorized Officer)
Date:	November 5, 2012	By:	/s/ Gerald J. Ritzert
			Gerald J. Ritzert
			Controller
			(Principal Accounting Officer of the Registrant)

67

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.

November 5, 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.

November 5, 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 September 30, 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.

November 5, 2012	/s/ William J. Wagner
Date	William J. Wagner
	Chief Executive Officer
November 5, 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.

XML

Investment securities and impairment of investment securities (Details 5) (USD $) In Thousands, unless otherwise specified	Sep. 30, 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	95,310
I-PreTSL II
Collateral information
Total Collateral	340,500
Current deferrals and defaults	24,500
Performing Collateral	316,000
Additional Immediate defaults before causing an interest shortfall	316,000
PreTSL XIX
Collateral information
Total Collateral	644,881
Current deferrals and defaults	182,150
Performing Collateral	462,731
Additional Immediate defaults before causing an interest shortfall	148,500
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	$ 99,500

XML

Guarantees (Details) (USD $)	Sep. 30, 2012
Guarantees
Maximum potential amount of future payments	$ 70,200,000
Maximum potential amount of future payments fully collateralized	69,200,000
Liability recognized for the obligations	$ 973,000

XML

Loans receivable (Details 6) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2012	Dec. 31, 2011
Impaired loans by portfolio segment and by class of financing receivable
Loans collectively evaluated for impairment	$ 5,635,549	$ 5,484,508
Loans individually evaluated for impairment	93,084	67,011
Related impairment reserve	8,105	4,544
With related impairment reserve
Impaired loans by portfolio segment and by class of financing receivable
Loans individually evaluated for impairment	57,289	21,473
No related impairment reserve
Impaired loans by portfolio segment and by class of financing receivable
Loans individually evaluated for impairment	35,795	45,538
Personal Banking
Impaired loans by portfolio segment and by class of financing receivable
Loans collectively evaluated for impairment	3,756,673	3,727,841
Loans individually evaluated for impairment	4,175
Related impairment reserve	1,060
Personal Banking | With related impairment reserve
Impaired loans by portfolio segment and by class of financing receivable
Loans individually evaluated for impairment	4,175
Personal Banking | Residential mortgage loans
Impaired loans by portfolio segment and by class of financing receivable
Loans collectively evaluated for impairment	2,420,731	2,397,366
Loans individually evaluated for impairment	3,545
Related impairment reserve	886
Personal Banking | Residential mortgage loans | With related impairment reserve
Impaired loans by portfolio segment and by class of financing receivable
Loans individually evaluated for impairment	3,545
Personal Banking | Home equity loans
Impaired loans by portfolio segment and by class of financing receivable
Loans collectively evaluated for impairment	1,100,249	1,084,786
Loans individually evaluated for impairment	630
Related impairment reserve	174
Personal Banking | Home equity loans | With related impairment reserve
Impaired loans by portfolio segment and by class of financing receivable
Loans individually evaluated for impairment	630
Personal Banking | Other consumer loans
Impaired loans by portfolio segment and by class of financing receivable
Loans collectively evaluated for impairment	235,693	245,689
Business Banking
Impaired loans by portfolio segment and by class of financing receivable
Loans collectively evaluated for impairment	1,878,876	1,756,667
Loans individually evaluated for impairment	88,909	67,011
Related impairment reserve	7,045	4,544
Business Banking | With related impairment reserve
Impaired loans by portfolio segment and by class of financing receivable
Loans individually evaluated for impairment	53,114	21,473
Business Banking | No related impairment reserve
Impaired loans by portfolio segment and by class of financing receivable
Loans individually evaluated for impairment	35,795	45,538
Business Banking | Commercial real estate
Impaired loans by portfolio segment and by class of financing receivable
Loans collectively evaluated for impairment	1,504,183	1,395,634
Loans individually evaluated for impairment	56,783	40,133
Related impairment reserve	5,721	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	31,220	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	25,563	24,557
Business Banking | Commercial loans
Impaired loans by portfolio segment and by class of financing receivable
Loans collectively evaluated for impairment	374,693	361,033
Loans individually evaluated for impairment	32,126	26,878
Related impairment reserve	1,324	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	21,894	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	$ 10,232	$ 20,981

XML

Earnings Per Share (Details) (Stock options, USD $)	3 Months Ended		9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011
Antidilutive securities excluded from the calculation of earnings per share
Options excluded from the calculation of earnings per share (in shares)	3,119,002	2,636,398	3,119,002	2,636,398
Weighted average share price during the reporting period (in dollars per share)			$ 12.28	$ 12.32
Minimum
Antidilutive securities excluded from the calculation of earnings per share
Weighted average share price during the reporting period (in dollars per share)	11.98	12.06	$ 12.17	$ 12.15

XML

Loans receivable (Details 4) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2012	Dec. 31, 2011
Loan delinquencies
Recorded investment in loans receivable	$ 5,728,633	$ 5,551,519
Recorded investment in loans receivable (as a percent)	100.00%	100.00%
Loans 90 or more days delinquent	80,429	95,836
Loans 90 or more days delinquent (as a percent)	1.40%	1.70%
Pennsylvania
Loan delinquencies
Recorded investment in loans receivable	4,348,109	4,238,184
Recorded investment in loans receivable (as a percent)	75.90%	76.30%
Loans 90 or more days delinquent	44,502	48,895
Loans 90 or more days delinquent (as a percent)	1.00%	1.20%
New York
Loan delinquencies
Recorded investment in loans receivable	768,939	687,770
Recorded investment in loans receivable (as a percent)	13.40%	12.40%
Loans 90 or more days delinquent	9,256	11,349
Loans 90 or more days delinquent (as a percent)	1.20%	1.70%
Ohio
Loan delinquencies
Recorded investment in loans receivable	81,065	80,548
Recorded investment in loans receivable (as a percent)	1.40%	1.50%
Loans 90 or more days delinquent	378	439
Loans 90 or more days delinquent (as a percent)	0.50%	0.50%
Maryland
Loan delinquencies
Recorded investment in loans receivable	358,398	344,261
Recorded investment in loans receivable (as a percent)	6.30%	6.20%
Loans 90 or more days delinquent	12,819	15,019
Loans 90 or more days delinquent (as a percent)	3.60%	4.40%
Other
Loan delinquencies
Recorded investment in loans receivable	172,122	200,756
Recorded investment in loans receivable (as a percent)	3.00%	3.60%
Loans 90 or more days delinquent	13,474	20,134
Loans 90 or more days delinquent (as a percent)	7.80%	10.00%
Personal Banking
Loan delinquencies
Recorded investment in loans receivable	3,760,848	3,727,841
Recorded investment in loans receivable (as a percent)	100.00%	100.00%
Loans 90 or more days delinquent	35,335	40,448
Loans 90 or more days delinquent (as a percent)	0.90%	1.10%
Personal Banking | Pennsylvania
Loan delinquencies
Recorded investment in loans receivable	3,183,226	3,129,707
Recorded investment in loans receivable (as a percent)	84.60%	84.00%
Loans 90 or more days delinquent	23,119	26,067
Loans 90 or more days delinquent (as a percent)	0.70%	0.80%
Personal Banking | New York
Loan delinquencies
Recorded investment in loans receivable	282,069	274,774
Recorded investment in loans receivable (as a percent)	7.50%	7.40%
Loans 90 or more days delinquent	2,892	2,443
Loans 90 or more days delinquent (as a percent)	1.00%	0.90%
Personal Banking | Ohio
Loan delinquencies
Recorded investment in loans receivable	33,428	34,594
Recorded investment in loans receivable (as a percent)	0.90%	0.90%
Loans 90 or more days delinquent	362	351
Loans 90 or more days delinquent (as a percent)	1.10%	1.00%
Personal Banking | Maryland
Loan delinquencies
Recorded investment in loans receivable	188,737	203,480
Recorded investment in loans receivable (as a percent)	5.00%	5.50%
Loans 90 or more days delinquent	5,859	5,932
Loans 90 or more days delinquent (as a percent)	3.10%	2.90%
Personal Banking | Other
Loan delinquencies
Recorded investment in loans receivable	73,388	85,286
Recorded investment in loans receivable (as a percent)	2.00%	2.20%
Loans 90 or more days delinquent	3,103	5,655
Loans 90 or more days delinquent (as a percent)	4.20%	6.60%
Personal Banking | Residential mortgage loans
Loan delinquencies
Recorded investment in loans receivable	2,424,276	2,397,366
Recorded investment in loans receivable (as a percent)	100.00%	100.00%
Loans 90 or more days delinquent	24,476	28,221
Loans 90 or more days delinquent (as a percent)	1.00%	1.20%
Personal Banking | Residential mortgage loans | Pennsylvania
Loan delinquencies
Recorded investment in loans receivable	2,028,697	1,978,512
Recorded investment in loans receivable (as a percent)	83.60%	82.50%
Loans 90 or more days delinquent	15,856	16,971
Loans 90 or more days delinquent (as a percent)	0.80%	0.90%
Personal Banking | Residential mortgage loans | New York
Loan delinquencies
Recorded investment in loans receivable	157,552	159,389
Recorded investment in loans receivable (as a percent)	6.50%	6.60%
Loans 90 or more days delinquent	1,292	1,358
Loans 90 or more days delinquent (as a percent)	0.80%	0.90%
Personal Banking | Residential mortgage loans | Ohio
Loan delinquencies
Recorded investment in loans receivable	19,261	19,895
Recorded investment in loans receivable (as a percent)	0.80%	0.80%
Loans 90 or more days delinquent	231	305
Loans 90 or more days delinquent (as a percent)	1.20%	1.50%
Personal Banking | Residential mortgage loans | Maryland
Loan delinquencies
Recorded investment in loans receivable	156,528	168,247
Recorded investment in loans receivable (as a percent)	6.50%	7.00%
Loans 90 or more days delinquent	4,373	4,436
Loans 90 or more days delinquent (as a percent)	2.80%	2.60%
Personal Banking | Residential mortgage loans | Other
Loan delinquencies
Recorded investment in loans receivable	62,238	71,323
Recorded investment in loans receivable (as a percent)	2.60%	3.10%
Loans 90 or more days delinquent	2,724	5,151
Loans 90 or more days delinquent (as a percent)	4.40%	7.20%
Personal Banking | Home equity loans
Loan delinquencies
Recorded investment in loans receivable	1,100,879	1,084,786
Recorded investment in loans receivable (as a percent)	100.00%	100.00%
Loans 90 or more days delinquent	9,365	9,560
Loans 90 or more days delinquent (as a percent)	0.90%	0.90%
Personal Banking | Home equity loans | Pennsylvania
Loan delinquencies
Recorded investment in loans receivable	937,206	925,368
Recorded investment in loans receivable (as a percent)	85.20%	85.30%
Loans 90 or more days delinquent	5,811	6,559
Loans 90 or more days delinquent (as a percent)	0.60%	0.70%
Personal Banking | Home equity loans | New York
Loan delinquencies
Recorded investment in loans receivable	113,844	104,194
Recorded investment in loans receivable (as a percent)	10.30%	9.60%
Loans 90 or more days delinquent	1,561	1,031
Loans 90 or more days delinquent (as a percent)	1.40%	1.00%
Personal Banking | Home equity loans | Ohio
Loan delinquencies
Recorded investment in loans receivable	11,186	11,677
Recorded investment in loans receivable (as a percent)	1.00%	1.10%
Loans 90 or more days delinquent	131	23
Loans 90 or more days delinquent (as a percent)	1.20%	0.20%
Personal Banking | Home equity loans | Maryland
Loan delinquencies
Recorded investment in loans receivable	30,919	33,816
Recorded investment in loans receivable (as a percent)	2.80%	3.10%
Loans 90 or more days delinquent	1,486	1,496
Loans 90 or more days delinquent (as a percent)	4.80%	4.40%
Personal Banking | Home equity loans | Other
Loan delinquencies
Recorded investment in loans receivable	7,724	9,731
Recorded investment in loans receivable (as a percent)	0.70%	0.90%
Loans 90 or more days delinquent	376	451
Loans 90 or more days delinquent (as a percent)	4.90%	4.60%
Personal Banking | Other consumer loans
Loan delinquencies
Recorded investment in loans receivable	235,693	245,689
Recorded investment in loans receivable (as a percent)	100.00%	100.00%
Loans 90 or more days delinquent	1,494	2,667
Loans 90 or more days delinquent (as a percent)	0.60%	1.10%
Personal Banking | Other consumer loans | Pennsylvania
Loan delinquencies
Recorded investment in loans receivable	217,323	225,827
Recorded investment in loans receivable (as a percent)	92.20%	91.90%
Loans 90 or more days delinquent	1,452	2,537
Loans 90 or more days delinquent (as a percent)	0.70%	1.10%
Personal Banking | Other consumer loans | New York
Loan delinquencies
Recorded investment in loans receivable	10,673	11,191
Recorded investment in loans receivable (as a percent)	4.50%	4.60%
Loans 90 or more days delinquent	39	54
Loans 90 or more days delinquent (as a percent)	0.40%	0.50%
Personal Banking | Other consumer loans | Ohio
Loan delinquencies
Recorded investment in loans receivable	2,981	3,022
Recorded investment in loans receivable (as a percent)	1.30%	1.20%
Loans 90 or more days delinquent		23
Loans 90 or more days delinquent (as a percent)	0.00%	0.80%
Personal Banking | Other consumer loans | Maryland
Loan delinquencies
Recorded investment in loans receivable	1,290	1,417
Recorded investment in loans receivable (as a percent)	0.50%	0.60%
Loans 90 or more days delinquent (as a percent)	0.00%	0.00%
Personal Banking | Other consumer loans | Other
Loan delinquencies
Recorded investment in loans receivable	3,426	4,232
Recorded investment in loans receivable (as a percent)	1.50%	1.70%
Loans 90 or more days delinquent	3	53
Loans 90 or more days delinquent (as a percent)	0.10%	1.30%
Business Banking
Loan delinquencies
Recorded investment in loans receivable	1,967,785	1,823,678
Recorded investment in loans receivable (as a percent)	100.00%	100.00%
Loans 90 or more days delinquent	45,094	55,388
Loans 90 or more days delinquent (as a percent)	2.30%	3.00%
Business Banking | Pennsylvania
Loan delinquencies
Recorded investment in loans receivable	1,164,883	1,108,477
Recorded investment in loans receivable (as a percent)	59.30%	60.70%
Loans 90 or more days delinquent	21,383	22,828
Loans 90 or more days delinquent (as a percent)	1.80%	2.10%
Business Banking | New York
Loan delinquencies
Recorded investment in loans receivable	486,870	412,996
Recorded investment in loans receivable (as a percent)	24.70%	22.60%
Loans 90 or more days delinquent	6,364	8,906
Loans 90 or more days delinquent (as a percent)	1.30%	2.20%
Business Banking | Ohio
Loan delinquencies
Recorded investment in loans receivable	47,637	45,954
Recorded investment in loans receivable (as a percent)	2.40%	2.50%
Loans 90 or more days delinquent	16	88
Loans 90 or more days delinquent (as a percent)	0.00%	0.20%
Business Banking | Maryland
Loan delinquencies
Recorded investment in loans receivable	169,661	140,781
Recorded investment in loans receivable (as a percent)	8.60%	7.70%
Loans 90 or more days delinquent	6,960	9,087
Loans 90 or more days delinquent (as a percent)	4.10%	6.50%
Business Banking | Other
Loan delinquencies
Recorded investment in loans receivable	98,734	115,470
Recorded investment in loans receivable (as a percent)	5.00%	6.50%
Loans 90 or more days delinquent	10,371	14,479
Loans 90 or more days delinquent (as a percent)	10.50%	12.50%
Business Banking | Commercial real estate
Loan delinquencies
Recorded investment in loans receivable	1,560,966	1,435,767
Recorded investment in loans receivable (as a percent)	100.00%	100.00%
Loans 90 or more days delinquent	35,230	44,603
Loans 90 or more days delinquent (as a percent)	2.30%	3.10%
Business Banking | Commercial real estate | Pennsylvania
Loan delinquencies
Recorded investment in loans receivable	863,722	849,702
Recorded investment in loans receivable (as a percent)	55.30%	59.20%
Loans 90 or more days delinquent	16,078	17,753
Loans 90 or more days delinquent (as a percent)	1.90%	2.10%
Business Banking | Commercial real estate | New York
Loan delinquencies
Recorded investment in loans receivable	438,955	356,868
Recorded investment in loans receivable (as a percent)	28.10%	24.90%
Loans 90 or more days delinquent	6,364	8,625
Loans 90 or more days delinquent (as a percent)	1.40%	2.40%
Business Banking | Commercial real estate | Ohio
Loan delinquencies
Recorded investment in loans receivable	36,185	35,882
Recorded investment in loans receivable (as a percent)	2.30%	2.50%
Loans 90 or more days delinquent		88
Loans 90 or more days delinquent (as a percent)	0.00%	0.20%
Business Banking | Commercial real estate | Maryland
Loan delinquencies
Recorded investment in loans receivable	142,877	114,839
Recorded investment in loans receivable (as a percent)	9.20%	8.00%
Loans 90 or more days delinquent	5,236	6,573
Loans 90 or more days delinquent (as a percent)	3.70%	5.70%
Business Banking | Commercial real estate | Other
Loan delinquencies
Recorded investment in loans receivable	79,227	78,476
Recorded investment in loans receivable (as a percent)	5.10%	5.40%
Loans 90 or more days delinquent	7,552	11,564
Loans 90 or more days delinquent (as a percent)	9.50%	14.70%
Business Banking | Commercial loans
Loan delinquencies
Recorded investment in loans receivable	406,819	387,911
Recorded investment in loans receivable (as a percent)	100.00%	100.00%
Loans 90 or more days delinquent	9,864	10,785
Loans 90 or more days delinquent (as a percent)	2.40%	2.80%
Business Banking | Commercial loans | Pennsylvania
Loan delinquencies
Recorded investment in loans receivable	301,161	258,775
Recorded investment in loans receivable (as a percent)	74.00%	66.70%
Loans 90 or more days delinquent	5,305	5,075
Loans 90 or more days delinquent (as a percent)	1.80%	2.00%
Business Banking | Commercial loans | New York
Loan delinquencies
Recorded investment in loans receivable	47,915	56,128
Recorded investment in loans receivable (as a percent)	11.80%	14.50%
Loans 90 or more days delinquent		281
Loans 90 or more days delinquent (as a percent)	0.00%	0.50%
Business Banking | Commercial loans | Ohio
Loan delinquencies
Recorded investment in loans receivable	11,452	10,072
Recorded investment in loans receivable (as a percent)	2.80%	2.60%
Loans 90 or more days delinquent	16
Loans 90 or more days delinquent (as a percent)	0.10%	0.00%
Business Banking | Commercial loans | Maryland
Loan delinquencies
Recorded investment in loans receivable	26,784	25,942
Recorded investment in loans receivable (as a percent)	6.60%	6.70%
Loans 90 or more days delinquent	1,724	2,514
Loans 90 or more days delinquent (as a percent)	6.40%	9.70%
Business Banking | Commercial loans | Other
Loan delinquencies
Recorded investment in loans receivable	19,507	36,994
Recorded investment in loans receivable (as a percent)	4.80%	9.50%
Loans 90 or more days delinquent	$ 2,819	$ 2,915
Loans 90 or more days delinquent (as a percent)	14.50%	7.90%

XML

Basis of Presentation and Informational Disclosures (Details 2) (USD $) In Millions, except Share data, unless otherwise specified	1 Months Ended	3 Months Ended		9 Months Ended		1 Months Ended					1 Months Ended
	May 31, 2012 Compensation expense for unvested common shares which is yet to be recognized	Sep. 30, 2012 Compensation expense for unvested common shares which is yet to be recognized	Sep. 30, 2011 Compensation expense for unvested common shares which is yet to be recognized	Sep. 30, 2012 Compensation expense for unvested common shares which is yet to be recognized	Sep. 30, 2011 Compensation expense for unvested common shares which is yet to be recognized	May 31, 2012 Compensation expense for unvested common shares which is yet to be recognized Employees	May 31, 2012 Compensation expense for unvested common shares which is yet to be recognized Director	May 31, 2012 Stock options	Sep. 30, 2012 Stock options	May 23, 2012 Stock options	May 31, 2012 Stock options Employees	May 31, 2012 Stock options Director
Stock Related Compensation
Shares awarded											508,573	64,800
Exercise price (in dollars per share)										$ 11.70
Grant date fair value (in dollars per share)	$ 11.64							$ 1.23
Shares awarded						239,077	24,300
Vesting period (in years)	10 years							10 years
Stock-based aggregate disclosure
Stock-based employee compensation expense		$ 1.1	$ 1.0	$ 3.5	$ 5.7
Compensation expense for unvested stock options which is yet to be recognized		$ 14.6		$ 14.6					$ 5.8

XML

Pension and Other Post-retirement Benefits (in thousands): (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011
Pension Plans
Components of net periodic pension cost
Service cost	$ 1,858	$ 1,429	$ 5,573	$ 4,285
Interest cost	1,432	1,363	4,297	4,089
Expected return on plan assets	(1,948)	(1,502)	(5,844)	(4,506)
Amortization of prior service cost	(40)	(40)	(120)	(120)
Amortization of net loss	690	169	2,070	507
Net periodic benefit cost	1,992	1,419	5,976	4,255
Other Post-retirement Benefits
Components of net periodic pension cost
Interest cost	16	21	49	72
Amortization of net loss	13	13	38	39
Net periodic benefit cost	$ 29	$ 34	$ 87	$ 111

XML

Loans receivable (Tables)

9 Months Ended

Sep. 30, 2012

Loans receivable

Summary of loans receivable

	September 30,			December 31,
	2012			2011
Personal Banking:
Residential mortgage loans	$	2,446,034		2,414,992
Home equity loans	1,100,879			1,084,786
Other consumer loans	235,693			245,689
Total Personal Banking	3,782,606			3,745,467
Business Banking:
Commercial real estate	1,603,774			1,481,127
Commercial loans	440,579			408,462
Total Business Banking	2,044,353			1,889,589
Total loans receivable, gross	5,826,959			5,635,056
Deferred loan fees	(2,624		)	(4,752	)
Allowance for loan losses	(71,177		)	(71,138	)
Undisbursed loan proceeds:
Residential mortgage loans	(19,134		)	(12,874	)
Commercial real estate	(42,808		)	(45,360	)
Commercial loans	(33,760		)	(20,551	)
Total loans receivable, net	$	5,657,456		5,480,381

Schedule of the allowance for loan losses by portfolio segment and by class of financing receivable

The following table provides information related to the allowance for loan losses by portfolio segment and by class of financing receivable for the quarter ended September 30, 2012 (in thousands):

	Balance June 30, 2012		Current period provision		Charge-offs		Recoveries	Balance September 30, 2012
Personal Banking:
Residential mortgage loans	$	7,997	1,440		(1,197	)	121	8,361
Home equity loans	8,634		710		(1,268	)	42	8,118
Other consumer loans	4,665		1,073		(1,536	)	579	4,781
Total Personal Banking	21,296		3,223		(4,001	)	742	21,260
Business Banking:
Commercial real estate loans	34,781		538		(1,385	)	403	34,337
Commercial loans	9,431		3,401		(1,641	)	34	11,225
Total Business Banking	44,212		3,939		(3,026	)	437	45,562
Unallocated	4,602		(247	)	—		—	4,355
Total	$	70,110	6,915		(7,027	)	1,179	71,177

The following table provides information related to the allowance for loan losses by portfolio segment and by class of financing receivable for the quarter ended September 30, 2011 (in thousands):

	Balance June 30, 2011		Current period provision		Charge-offs		Recoveries	Balance September 30, 2011
Personal Banking:
Residential mortgage loans	$	8,463	707		(634	)	75	8,611
Home equity loans	7,699		1,465		(588	)	20	8,596
Other consumer loans	5,144		1,299		(1,307	)	277	5,413
Total Personal Banking	21,306		3,471		(2,529	)	372	22,620
Business Banking:
Commercial real estate loans	31,690		3,188		(3,675	)	190	31,393
Commercial loans	17,963		1,620		(4,791	)	129	14,921
Total Business Banking	49,653		4,808		(8,466	)	319	46,314
Unallocated	4,496		(222	)	—		—	4,274
Total	$	75,455	8,057		(10,995	)	691	73,208

The following table provides information related to the allowance for loan losses by portfolio segment and by class of financing receivable for the nine months ended September 30, 2012 (in thousands):

	Balance December 31, 2011		Current period provision		Charge-offs		Recoveries	Balance September 30, 2012
Personal Banking:
Residential mortgage loans	$	8,482	3,017		(3,459	)	321	8,361
Home equity loans	8,687		2,078		(2,749	)	102	8,118
Other consumer loans	5,325		2,619		(4,327	)	1,164	4,781
Total Personal Banking	22,494		7,714		(10,535	)	1,587	21,260
Business Banking:
Commercial real estate loans	32,148		6,631		(5,817	)	1,375	34,337
Commercial loans	12,080		3,881		(5,009	)	273	11,225
Total Business Banking	44,228		10,512		(10,826	)	1,648	45,562
Unallocated	4,416		(61	)	—		—	4,355
Total	$	71,138	18,165		(21,361	)	3,235	71,177

The following table provides information related to the allowance for loan losses by portfolio segment and by class of financing receivable for the nine months ended September 30, 2011 (in thousands):

	Balance December 31, 2010		Current period provision		Charge-offs		Recoveries	Balance September 30, 2011
Personal Banking:
Residential mortgage loans	$	6,854	4,190		(2,668	)	235	8,611
Home equity loans	7,675		4,586		(3,736	)	71	8,596
Other consumer loans	5,810		2,437		(3,816	)	982	5,413
Total Personal Banking	20,339		11,213		(10,220	)	1,288	22,620
Business Banking:
Commercial real estate loans	35,832		3,092		(8,220	)	689	31,393
Commercial loans	15,770		9,560		(10,706	)	297	14,921
Total Business Banking	51,602		12,652		(18,926	)	986	46,314
Unallocated	4,471		(197	)	—		—	4,274
Total	$	76,412	23,668		(29,146	)	2,274	73,208

Information related to loan portfolio by portfolio segment and by class of financing receivable

The following table provides information related to the loan portfolio by portfolio segment and by class of financing receivable at September, 30, 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:
Residential mortgage loans	$	2,424,276	8,361	24,476	807	3,545
Home equity loans	1,100,879		8,118	9,365	—	630
Other consumer loans	235,693		4,781	1,494	—	—
Total Personal Banking	3,760,848		21,260	35,335	807	4,175
Business Banking:
Commercial real estate loans	1,560,966		34,337	61,632	—	44,996
Commercial loans	406,819		11,225	23,805	—	37,154
Total Business Banking	1,967,785		45,562	85,437	—	82,150
Total	$	5,728,633	66,822	120,772	807	86,325

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:
Residential 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 geographical and delinquency information related to loans by portfolio segment and by class of financing receivable

The following table provides geographical and delinquency information related to the loan portfolio by portfolio segment and by class of financing receivable at September, 30, 2012 (in thousands):

	Pennsylvania		(1)		New York	(1)		Ohio	(1)		Maryland	(1)		Other	(1)		Total
Recorded investment in loans receivable:
Personal Banking:
Residential mortgage loans	$	2,028,697	83.6	%	157,552	6.5	%	19,261	0.8	%	156,528	6.5	%	62,238	2.6	%	2,424,276	100.0	%
Home equity loans	937,206		85.2	%	113,844	10.3	%	11,186	1.0	%	30,919	2.8	%	7,724	0.7	%	1,100,879	100.0	%
Other consumer loans	217,323		92.2	%	10,673	4.5	%	2,981	1.3	%	1,290	0.5	%	3,426	1.5	%	235,693	100.0	%
Total Personal Banking	3,183,226		84.6	%	282,069	7.5	%	33,428	0.9	%	188,737	5.0	%	73,388	2.0	%	3,760,848	100.0	%
Business Banking:
Commercial real estate loans	863,722		55.3	%	438,955	28.1	%	36,185	2.3	%	142,877	9.2	%	79,227	5.1	%	1,560,966	100.0	%
Commercial loans	301,161		74.0	%	47,915	11.8	%	11,452	2.8	%	26,784	6.6	%	19,507	4.8	%	406,819	100.0	%
Total Business Banking	1,164,883		59.3	%	486,870	24.7	%	47,637	2.4	%	169,661	8.6	%	98,734	5.0	%	1,967,785	100.0	%
Total	$	4,348,109	75.9	%	768,939	13.4	%	81,065	1.4	%	358,398	6.3	%	172,122	3.0	%	5,728,633	100.0	%

(1) Percentage of total loans receivable per state by class of financing receivable.

	Pennsylvania		(2)		New York	(2)		Ohio	(2)		Maryland	(2)		Other	(2)		Total
Loans 90 or more days delinquent:
Personal Banking:
Residential mortgage loans	$	15,856	0.8	%	1,292	0.8	%	231	1.2	%	4,373	2.8	%	2,724	4.4	%	24,476	1.0	%
Home equity loans	5,811		0.6	%	1,561	1.4	%	131	1.2	%	1,486	4.8	%	376	4.9	%	9,365	0.9	%
Other consumer loans	1,452		0.7	%	39	0.4	%	—	0.0	%	—	0.0	%	3	0.1	%	1,494	0.6	%
Total Personal Banking	23,119		0.7	%	2,892	1.0	%	362	1.1	%	5,859	3.1	%	3,103	4.2	%	35,335	0.9	%
Business Banking:
Commercial real estate loans	16,078		1.9	%	6,364	1.4	%	—	0.0	%	5,236	3.7	%	7,552	9.5	%	35,230	2.3	%
Commercial loans	5,305		1.8	%	—	0.0	%	16	0.1	%	1,724	6.4	%	2,819	14.5	%	9,864	2.4	%
Total Business Banking	21,383		1.8	%	6,364	1.3	%	16	0.0	%	6,960	4.1	%	10,371	10.5	%	45,094	2.3	%
Total	$	44,502	1.0	%	9,256	1.2	%	378	0.5	%	12,819	3.6	%	13,474	7.8	%	80,429	1.4	%

(2) Percentage of loans 90 or more days delinquent in that state by class of financing receivable.

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

	Pennsylvania		(1)		New York	(1)		Ohio	(1)		Maryland	(1)		Other	(1)		Total
Recorded investment in loans receivable:
Personal Banking:
Residential mortgage loans	$	1,978,512	82.5	%	159,389	6.6	%	19,895	0.8	%	168,247	7.0	%	71,323	3.1	%	2,397,366	100.0	%
Home equity loans	925,368		85.3	%	104,194	9.6	%	11,677	1.1	%	33,816	3.1	%	9,731	0.9	%	1,084,786	100.0	%
Other consumer loans	225,827		91.9	%	11,191	4.6	%	3,022	1.2	%	1,417	0.6	%	4,232	1.7	%	245,689	100.0	%
Total Personal Banking	3,129,707		84.0	%	274,774	7.4	%	34,594	0.9	%	203,480	5.5	%	85,286	2.2	%	3,727,841	100.0	%
Business Banking:
Commercial real estate loans	849,702		59.2	%	356,868	24.9	%	35,882	2.5	%	114,839	8.0	%	78,476	5.4	%	1,435,767	100.0	%
Commercial loans	258,775		66.7	%	56,128	14.5	%	10,072	2.6	%	25,942	6.7	%	36,994	9.5	%	387,911	100.0	%
Total Business Banking	1,108,477		60.7	%	412,996	22.6	%	45,954	2.5	%	140,781	7.7	%	115,470	6.5	%	1,823,678	100.0	%
Total	$	4,238,184	76.3	%	687,770	12.4	%	80,548	1.5	%	344,261	6.2	%	200,756	3.6	%	5,551,519	100.0	%

(1) Percentage of total loans receivable per state by class of financing receivable.

	Pennsylvania		(2)		New York	(2)		Ohio	(2)		Maryland	(2)		Other	(2)		Total
Loans 90 or more days delinquent:
Personal Banking:
Residential mortgage loans	$	16,971	0.9	%	1,358	0.9	%	305	1.5	%	4,436	2.6	%	5,151	7.2	%	28,221	1.2	%
Home equity loans	6,559		0.7	%	1,031	1.0	%	23	0.2	%	1,496	4.4	%	451	4.6	%	9,560	0.9	%
Other consumer loans	2,537		1.1	%	54	0.5	%	23	0.8	%	—	0.0	%	53	1.3	%	2,667	1.1	%
Total Personal Banking	26,067		0.8	%	2,443	0.9	%	351	1.0	%	5,932	2.9	%	5,655	6.6	%	40,448	1.1	%
Business Banking:
Commercial real estate loans	17,753		2.1	%	8,625	2.4	%	88	0.2	%	6,573	5.7	%	11,564	14.7	%	44,603	3.1	%
Commercial loans	5,075		2.0	%	281	0.5	%	—	0.0	%	2,514	9.7	%	2,915	7.9	%	10,785	2.8	%
Total Business Banking	22,828		2.1	%	8,906	2.2	%	88	0.2	%	9,087	6.5	%	14,479	12.5	%	55,388	3.0	%
Total	$	48,895	1.2	%	11,349	1.7	%	439	0.5	%	15,019	4.4	%	20,134	10.0	%	95,836	1.7	%

(2) Percentage of loans 90 or more days delinquent in that state by class of financing receivable.

Schedule of the composition of impaired loans by portfolio segment and by class of financing receivable

The following table provides information related to the composition of impaired loans by portfolio segment and by class of financing receivable at and for the nine months ended September 30, 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:
Residential mortgage loans	$	24,476	—	—	2,434	26,910	27,248	495
Home equity loans	9,365		—	—	500	9,865	9,776	212
Other consumer loans	1,494		—	—	—	1,494	1,853	28
Total Personal Banking	35,335		—	—	2,934	38,269	38,877	735
Business Banking:
Commercial real estate loans	35,230		26,402	33,593	15,335	110,560	97,340	2,809
Commercial loans	9,864		13,941	18,963	10,031	52,799	52,327	1,409
Total Business Banking	45,094		40,343	52,556	25,366	163,359	149,667	4,218
Total	$	80,429	40,343	52,556	28,300	201,628	188,544	4,953

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:
Residential 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 evaluation 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 September 30, 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:
Residential mortgage loans	$	2,420,731	3,545	3,545	886	—
Home equity loans	1,100,249		630	630	174	—
Other consumer loans	235,693		—	—	—	—
Total Personal Banking	3,756,673		4,175	4,175	1,060	—
Business Banking:
Commercial real estate loans	1,504,183		56,783	31,220	5,721	25,563
Commercial loans	374,693		32,126	21,894	1,324	10,232
Total Business Banking	1,878,876		88,909	53,114	7,045	35,795
Total	$	5,635,549	93,084	57,289	8,105	35,795

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:
Residential 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 quarter ended September 30, 2012					For the nine months ended September 30, 2012
	Number of contracts	Recorded investment at the time of modification		Current recorded investment	Current allowance	Number of contracts	Recorded investment at the time of modification		Current recorded investment	Current allowance
Troubled debt restructurings:
Personal Banking:
Residential mortgage loans	19	$	3,422	2,739	729	19	$	3,422	2,739	729
Home equity loans	7	724		630	174	7	724		630	174
Other consumer loans	—	—		—	—	—	—		—	—
Total Personal Banking	26	4,146		3,369	903	26	4,146		3,369	903
Business Banking:
Commercial real estate loans	25	6,294		6,102	716	35	9,267		9,014	910
Commercial loans	28	7,008		6,778	228	41	20,586		19,159	746
Total Business Banking	53	13,302		12,880	944	76	29,853		28,173	1,656
Total	79	$	17,448	16,249	1,847	102	$	33,999	31,542	2,559
Troubled debt restructurings that subsequently defaulted:
Personal Banking:
Residential mortgage loans	—	$	—	—	—	1	$	449	361	117
Home equity loans	—	—		—	—	—	—		—	—
Other consumer loans	—	—		—	—	—	—		—	—
Total Personal Banking	—	—		—	—	1	449		361	117
Business Banking:
Commercial real estate loans	1	230		230	23	4	1,381		1,313	81
Commercial loans	8	1,830		819	82	8	1,830		819	82
Total Business Banking	9	2,060		1,049	105	12	3,211		2,132	163
Total	9	$	2,060	1,049	105	13	$	3,660	2,493	280

	For the quarter ended September 30, 2011					For the nine months ended September 30, 2011
	Number of contracts	Recorded investment at the time of modification		Current recorded investment	Current allowance	Number of contracts	Recorded investment at the time of modification		Current recorded investment	Current allowance
Troubled debt restructurings:
Personal Banking:
Residential mortgage loans	1	$	445	445	127	2	$	894	806	244
Home equity loans	—	—		—	—	—	—		—	—
Other consumer loans	—	—		—	—	—	—		—	—
Total Personal Banking	1	445		445	127	2	894		806	244
Business Banking:
Commercial real estate loans	4	10,168		10,126	1,013	12	13,642		13,331	1,279
Commercial loans	2	2,382		2,382	211	19	20,944		11,380	393
Total Business Banking	6	12,550		12,508	1,224	31	34,586		24,711	1,672
Total	7	$	12,995	12,953	1,351	33	$	35,480	25,517	1,916
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	1	500		496	50	4	1,501		960	251
Commercial loans	1	437		255	—	2	9,740		9,123	887
Total Business Banking	2	937		751	50	6	11,241		10,083	1,138
Total	2	$	937	751	50	6	$	11,241	10,083	1,138

Schedule of loan delinquencies

The following table provides information related to loan delinquencies at September 30, 2012 (in thousands):

	30-59 Days delinquent		60-89 Days delinquent	90 Days or greater delinquent	Total delinquency	Current	Recorded investment in loans receivable
Personal Banking:
Residential mortgage loans	$	5,971	7,621	24,476	38,068	2,386,208	2,424,276
Home equity loans	5,027		2,116	9,365	16,508	1,084,371	1,100,879
Other consumer loans	4,470		1,424	1,494	7,388	228,305	235,693
Total Personal Banking	15,468		11,161	35,335	61,964	3,698,884	3,760,848
Business Banking:
Commercial real estate loans	18,512		2,544	35,230	56,286	1,504,680	1,560,966
Commercial loans	791		1,855	9,864	12,510	394,309	406,819
Total Business Banking	19,303		4,399	45,094	68,796	1,898,989	1,967,785
Total	$	34,771	15,560	80,429	130,760	5,597,873	5,728,633

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	Recorded investment in loans receivable
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 September 30, 2012 (in thousands):

	Pass		Special mention	Substandard	Doubtful	Loss	Recorded investment in loans receivable
Personal Banking:
Residential mortgage loans	$	2,403,993	—	18,910	16	1,357	2,424,276
Home equity loans	1,091,530		—	9,349	—	—	1,100,879
Other consumer loans	234,765		—	928	—	—	235,693
Total Personal Banking	3,730,288		—	29,187	16	1,357	3,760,848
Business Banking:
Commercial real estate loans	1,327,799		81,854	147,063	4,250	—	1,560,966
Commercial loans	326,229		15,415	61,747	3,428	—	406,819
Total Business Banking	1,654,028		97,269	208,810	7,678	—	1,967,785
Total	$	5,384,316	97,269	237,997	7,694	1,357	5,728,633

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	Recorded investment in loans receivable
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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Loans receivable (Details 8) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2012	Dec. 31, 2011
Loan delinquencies
30-59 Days Delinquent	$ 34,771	$ 58,658
60-89 Days Delinquent	15,560	20,449
90 Days or Greater Delinquent	80,429	95,836
Total Delinquency	130,760	174,943
Current	5,597,873	5,376,576
Total loans	5,728,633	5,551,519
Personal Banking
Loan delinquencies
30-59 Days Delinquent	15,468	45,951
60-89 Days Delinquent	11,161	12,369
90 Days or Greater Delinquent	35,335	40,448
Total Delinquency	61,964	98,768
Current	3,698,884	3,629,073
Total loans	3,760,848	3,727,841
Personal Banking | Residential mortgage loans
Loan delinquencies
30-59 Days Delinquent	5,971	33,671
60-89 Days Delinquent	7,621	8,629
90 Days or Greater Delinquent	24,476	28,221
Total Delinquency	38,068	70,521
Current	2,386,208	2,326,845
Total loans	2,424,276	2,397,366
Personal Banking | Home equity loans
Loan delinquencies
30-59 Days Delinquent	5,027	7,426
60-89 Days Delinquent	2,116	1,953
90 Days or Greater Delinquent	9,365	9,560
Total Delinquency	16,508	18,939
Current	1,084,371	1,065,847
Total loans	1,100,879	1,084,786
Personal Banking | Other consumer loans
Loan delinquencies
30-59 Days Delinquent	4,470	4,854
60-89 Days Delinquent	1,424	1,787
90 Days or Greater Delinquent	1,494	2,667
Total Delinquency	7,388	9,308
Current	228,305	236,381
Total loans	235,693	245,689
Business Banking
Loan delinquencies
30-59 Days Delinquent	19,303	12,707
60-89 Days Delinquent	4,399	8,080
90 Days or Greater Delinquent	45,094	55,388
Total Delinquency	68,796	76,175
Current	1,898,989	1,747,503
Total loans	1,967,785	1,823,678
Business Banking | Commercial real estate
Loan delinquencies
30-59 Days Delinquent	18,512	10,680
60-89 Days Delinquent	2,544	3,122
90 Days or Greater Delinquent	35,230	44,603
Total Delinquency	56,286	58,405
Current	1,504,680	1,377,362
Total loans	1,560,966	1,435,767
Business Banking | Commercial loans
Loan delinquencies
30-59 Days Delinquent	791	2,027
60-89 Days Delinquent	1,855	4,958
90 Days or Greater Delinquent	9,864	10,785
Total Delinquency	12,510	17,770
Current	394,309	370,141
Total loans	$ 406,819	$ 387,911

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Investment securities and impairment of investment securities (Details 8) (USD $) In Thousands, unless otherwise specified	3 Months Ended	9 Months Ended
	Sep. 30, 2012	Sep. 30, 2012	Sep. 30, 2011	Jun. 30, 2011
Cumulative roll forward of credit losses recognized in earnings for debt securities held and not intended to be sold:
Beginning balance	$ 16,620	$ 16,382	$ 15,445	$ 15,952
Additional credit losses on debt securities for which other-than-temporary impairment was previously recognized	93	331	507
Ending balance	$ 16,713	$ 16,713	$ 15,952	$ 15,952

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Investment securities and impairment of investment securities (Details 3) (USD $)	9 Months Ended
	Sep. 30, 2012	Dec. 31, 2011
Fair value and gross unrealized losses on investment securities
Less than 12 months - Fair value		$ 118,237,000
Less than 12 months - Fair value	71,321,000
Less than 12 months - Unrealized loss		(638,000)
Less than 12 months - Unrealized loss	(400,000)
12 months or more - Fair value	36,083,000	46,374,000
12 months or more - Unrealized loss	(5,134,000)	(5,572,000)
Total - Fair value		164,611,000
Total - Fair value	107,404,000
Total - Unrealized loss		(6,210,000)
Total - Unrealized loss	(5,534,000)
Investments where the book value exceeded the fair value for more than 12 months, total fair value	15,300,000
Variable rate basis	three month LIBOR
Non-agency CMOs
Fair value and gross unrealized losses on investment securities
Number of investments	7
U.S. government and agencies
Fair value and gross unrealized losses on investment securities
Less than 12 months - Fair value	10,566,000	24,601,000
Less than 12 months - Unrealized loss	(11,000)	(61,000)
12 months or more - Fair value	7,502,000	9,648,000
12 months or more - Unrealized loss	(11,000)	(49,000)
Total - Fair value	18,068,000	34,249,000
Total - Unrealized loss	(22,000)	(110,000)
Municipal securities
Fair value and gross unrealized losses on investment securities
12 months or more - Fair value	594,000	2,317,000
12 months or more - Unrealized loss	(1,000)	(180,000)
Total - Fair value	594,000	2,317,000
Total - Unrealized loss	(1,000)	(180,000)
Corporate debt issues
Fair value and gross unrealized losses on investment securities
Less than 12 months - Fair value	850,000	3,537,000
Less than 12 months - Unrealized loss	(38,000)	(219,000)
12 months or more - Fair value	15,330,000	15,067,000
12 months or more - Unrealized loss	(4,830,000)	(4,416,000)
Total - Fair value	16,180,000	18,604,000
Total - Unrealized loss	(4,868,000)	(4,635,000)
Number of investments	7
Investments where the book value exceeded the fair value for more than 12 months, total fair value	20,100,000
Single issuer trust preferred investments
Fair value and gross unrealized losses on investment securities
Number of investments	3
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	539,000	4,178,000
Less than 12 months - Unrealized loss	(83,000)	(258,000)
12 months or more - Fair value	17,000	18,000
12 months or more - Unrealized loss	(2,000)	(1,000)
Total - Fair value	556,000	4,196,000
Total - Unrealized loss	(85,000)	(259,000)
Residential mortgage-backed securities | Non-agency CMOs
Fair value and gross unrealized losses on investment securities
12 months or more - Fair value	4,524,000	4,971,000
12 months or more - Unrealized loss	(267,000)	(889,000)
Total - Fair value	4,524,000	4,971,000
Total - Unrealized loss	(267,000)	(889,000)
Residential mortgage-backed securities | Agency CMOs
Fair value and gross unrealized losses on investment securities
Less than 12 months - Fair value		85,921,000
Less than 12 months - Fair value	59,366,000
Less than 12 months - Unrealized loss		(100,000)
Less than 12 months - Unrealized loss	(268,000)
12 months or more - Fair value	8,116,000	14,353,000
12 months or more - Unrealized loss	(23,000)	(37,000)
Total - Fair value		100,274,000
Total - Fair value	67,482,000
Total - Unrealized loss		(137,000)
Total - Unrealized loss	$ (291,000)

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Goodwill and Other Intangible Assets (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012 Core Deposits	Dec. 31, 2011 Core Deposits	Sep. 30, 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					(30,056)	(29,549)	(2,971)	(2,685)
Intangible asset - net					522	1,029	808	1,094
Amortization expense	219	475	793	1,445
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			$ 69

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Disclosures About Fair Value of Financial Instruments (Details 4) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2012	Dec. 31, 2011
Fair value measurement for nonrecurring assets that had a fair market value below the carrying amount
Total assets	$ 78,475	$ 43,816
Loans evaluated for impairment
Fair value measurement for nonrecurring assets that had a fair market value below the carrying amount
Total assets	49,184	16,929
Real estate owned
Fair value measurement for nonrecurring assets that had a fair market value below the carrying amount
Total assets	29,291	26,887
Level 3
Fair value measurement for nonrecurring assets that had a fair market value below the carrying amount
Total assets	78,475	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	49,184	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	$ 29,291	$ 26,887

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Loans receivable (Details 5) (USD $) In Thousands, unless otherwise specified	9 Months Ended	12 Months Ended
	Sep. 30, 2012	Dec. 31, 2011
Composition of impaired loans by portfolio segment and by class of financing receivable
Nonaccrual loans 90 or more days delinquent	$ 80,429	$ 95,836
Nonaccrual loans less than 90 days delinquent	40,343	35,269
Loans less than 90 days delinquent reviewed for impairment	52,556	22,804
TDRs less than 90 days delinquent not included elsewhere	28,300	25,449
Total impaired loans	201,628	179,358
Average recorded investment in nonaccrual impaired loans	188,544	204,273
Interest income recognized on nonaccrual impaired loans	4,953	6,036
Personal Banking
Composition of impaired loans by portfolio segment and by class of financing receivable
Nonaccrual loans 90 or more days delinquent	35,335	40,448
TDRs less than 90 days delinquent not included elsewhere	2,934	361
Total impaired loans	38,269	40,809
Average recorded investment in nonaccrual impaired loans	38,877	42,645
Interest income recognized on nonaccrual impaired loans	735	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	24,476	28,221
TDRs less than 90 days delinquent not included elsewhere	2,434	361
Total impaired loans	26,910	28,582
Average recorded investment in nonaccrual impaired loans	27,248	30,731
Interest income recognized on nonaccrual impaired loans	495	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	9,365	9,560
TDRs less than 90 days delinquent not included elsewhere	500
Total impaired loans	9,865	9,560
Average recorded investment in nonaccrual impaired loans	9,776	9,574
Interest income recognized on nonaccrual impaired loans	212	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	1,494	2,667
Total impaired loans	1,494	2,667
Average recorded investment in nonaccrual impaired loans	1,853	2,340
Interest income recognized on nonaccrual impaired loans	28	34
Business Banking
Composition of impaired loans by portfolio segment and by class of financing receivable
Nonaccrual loans 90 or more days delinquent	45,094	55,388
Nonaccrual loans less than 90 days delinquent	40,343	35,269
Loans less than 90 days delinquent reviewed for impairment	52,556	22,804
TDRs less than 90 days delinquent not included elsewhere	25,366	25,088
Total impaired loans	163,359	138,549
Average recorded investment in nonaccrual impaired loans	149,667	161,628
Interest income recognized on nonaccrual impaired loans	4,218	5,282
Business Banking | Commercial loans
Composition of impaired loans by portfolio segment and by class of financing receivable
Nonaccrual loans 90 or more days delinquent	9,864	10,785
Nonaccrual loans less than 90 days delinquent	13,941	17,378
Loans less than 90 days delinquent reviewed for impairment	18,963	7,337
TDRs less than 90 days delinquent not included elsewhere	10,031	8,991
Total impaired loans	52,799	44,491
Average recorded investment in nonaccrual impaired loans	52,327	59,897
Interest income recognized on nonaccrual impaired loans	1,409	1,642
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	35,230	44,603
Nonaccrual loans less than 90 days delinquent	26,402	17,891
Loans less than 90 days delinquent reviewed for impairment	33,593	15,467
TDRs less than 90 days delinquent not included elsewhere	15,335	16,097
Total impaired loans	110,560	94,058
Average recorded investment in nonaccrual impaired loans	97,340	101,731
Interest income recognized on nonaccrual impaired loans	$ 2,809	$ 3,640

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CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) In Thousands, unless otherwise specified	9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011
OPERATING ACTIVITIES:
Net Income	$ 47,235	$ 48,976
Adjustments to reconcile net income to net cash provided by operating activities:
Provision for loan losses	18,165	23,668
Net loss on sale of assets	1,639	3,273
Net depreciation, amortization and accretion	7,166	6,857
Decrease in other assets	14,476	9,311
Increase in other liabilities	9,892	2,150
Net amortization of premium on marketable securities	(59)	(241)
Noncash impairment losses on investment securities	331	507
Noncash write-down of real estate owned	2,129	2,198
Origination of loans held for sale	(180,319)	(77,498)
Proceeds from sale of loans held for sale	168,442	87,871
Noncash compensation expense related to stock benefit plans	3,531	5,685
Net cash provided by operating activities	92,628	112,757
INVESTING ACTIVITIES:
Purchase of marketable securities available-for-sale	(299,414)	(197,752)
Proceeds from maturities and principal reductions of marketable securities available-for-sale	262,192	193,906
Proceeds from maturities and principal reductions of marketable securities held-to-maturity	63,583	88,967
Loan originations	(1,568,290)	(1,318,398)
Proceeds from loan maturities and principal reductions	1,371,874	1,289,071
Proceeds from redemption of Federal Home Loan Bank stock	2,101	8,569
Proceeds from sale of real estate owned	11,145	6,961
Sale/ (purchase) of real estate owned for investment, net	343	(137)
Purchase of premises and equipment	(11,804)	(4,445)
Net cash (used in)/ provided by investing activities	(168,270)	66,742
FINANCING ACTIVITIES:
Increase in deposits, net	44,431	48,414
Repayments of long-term borrowings	(52)	(50,049)
Net increase/ (decrease) in short-term borrowings	27,679	(12,570)
Decrease in advances by borrowers for taxes and insurance	(12,001)	(10,788)
Cash dividends paid	(34,331)	(33,183)
Purchase of common stock for retirement	(2,206)	(170,732)
Proceeds from stock options exercised	1,893	1,339
Net cash provided by/ (used in) financing activities	25,413	(227,569)
Net decrease in cash and cash equivalents	(50,229)	(48,070)
Cash and cash equivalents at beginning of period	688,297	719,111
Net decrease in cash and cash equivalents	(50,229)	(48,070)
Cash and cash equivalents at end of period	638,068	671,041
Cash and cash equivalents:
Cash and due from banks	91,286	90,493
Interest-earning deposits in other financial institutions	546,149	579,915
Federal funds sold and other short-term investments	633	633
Total cash and cash equivalents	638,068	671,041
Cash paid during the period for:
Interest on deposits and borrowings (including interest credited to deposit accounts of $29,606 and $39,477, respectively)	58,152	71,177
Income taxes	10,389	16,320
Non-cash activities:
Loans foreclosures and repossessions	17,141	9,719
Sale of real estate owned financed by the Company	$ 428	$ 266

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Disclosures About Fair Value of Financial Instruments (Details 5) (USD $) In Thousands, unless otherwise specified	9 Months Ended
	Sep. 30, 2012
Debt securities
Quantitative information for Level 3 Fair Value Measurements Assets
Fair value	8,830
Debt securities | Discounted cash flow
Quantitative information for Level 3 Fair Value Measurements Assets
Default rate (as a percent)	2.00%
Prepayment speeds (as a percent)	1.00%
Debt securities | Discounted cash flow | Minimum
Quantitative information for Level 3 Fair Value Measurements Assets
Discount margin (as a percent)	0.35%
Debt securities | Discounted cash flow | Maximum
Quantitative information for Level 3 Fair Value Measurements Assets
Discount margin (as a percent)	2.10%
Debt securities | Discounted cash flow | Weighted Average
Quantitative information for Level 3 Fair Value Measurements Assets
Discount margin (as a percent)	0.67%
Loans evaluated for impairment
Quantitative information for Level 3 Fair Value Measurements Assets
Fair value	49,184
Real estate owned
Quantitative information for Level 3 Fair Value Measurements Assets
Fair value	29,291

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Loans receivable (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2012	Jun. 30, 2012	Dec. 31, 2011	Sep. 30, 2011	Jun. 30, 2011	Dec. 31, 2010
Loans Receivable
Total loans receivable, gross	$ 5,826,959		$ 5,635,056
Deferred loan fees	(2,624)		(4,752)
Allowance for loan losses	(71,177)	(70,110)	(71,138)	(73,208)	(75,455)	(76,412)
Total loans, net	5,657,456		5,480,381
Residential mortgage loans
Loans Receivable
Undisbursed loan proceeds (real estate loans)	(19,134)		(12,874)
Commercial real estate
Loans Receivable
Undisbursed loan proceeds (real estate loans)	(42,808)		(45,360)
Commercial loans
Loans Receivable
Undisbursed loan proceeds (real estate loans)	(33,760)		(20,551)
Personal Banking
Loans Receivable
Total loans receivable, gross	3,782,606		3,745,467
Allowance for loan losses	(21,260)	(21,296)	(22,494)	(22,620)	(21,306)	(20,339)
Personal Banking | Residential mortgage loans
Loans Receivable
Total loans receivable, gross	2,446,034		2,414,992
Allowance for loan losses	(8,361)	(7,997)	(8,482)	(8,611)	(8,463)	(6,854)
Personal Banking | Home equity loans
Loans Receivable
Total loans receivable, gross	1,100,879		1,084,786
Allowance for loan losses	(8,118)		(8,687)
Personal Banking | Other consumer loans
Loans Receivable
Total loans receivable, gross	235,693		245,689
Allowance for loan losses	(4,781)	(4,665)	(5,325)	(5,413)	(5,144)	(5,810)
Business Banking
Loans Receivable
Total loans receivable, gross	2,044,353		1,889,589
Allowance for loan losses	(45,562)	(44,212)	(44,228)	(46,314)	(49,653)	(51,602)
Business Banking | Commercial real estate
Loans Receivable
Total loans receivable, gross	1,603,774		1,481,127
Allowance for loan losses	(34,337)	(34,781)	(32,148)	(31,393)	(31,690)	(35,832)
Business Banking | Commercial loans
Loans Receivable
Total loans receivable, gross	440,579		408,462
Allowance for loan losses	$ (11,225)	$ (9,431)	$ (12,080)	$ (14,921)	$ (17,963)	$ (15,770)

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Disclosures About Fair Value of Financial Instruments (Tables)

9 Months Ended

Sep. 30, 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

	September 30, 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	$	638,068	638,068	638,068	—	—	688,297	688,297
Securities available-for-sale	951,879		951,879	20,068	922,981	8,830	908,349	908,349
Securities held-to-maturity	167,739		174,821	—	174,821	—	231,389	239,412
Loans receivable, net	5,657,456		5,982,671	14,152	—	5,968,519	5,480,381	5,839,674
Accrued interest receivable	25,324		25,324	25,324	—	—	24,599	24,599
FHLB Stock	46,834		46,834	—	—	—	48,935	48,935
Total financial assets	$	7,487,300	7,819,597	697,612	1,097,802	5,977,349	7,381,950	7,749,266
Financial liabilities:
Savings and checking accounts	$	3,862,772	3,862,772	3,862,772	—	—	3,495,508	3,495,508
Time deposits	1,961,984		2,004,067	—	—	2,004,067	2,284,817	2,329,451
Borrowed funds	855,552		914,459	160,019	—	754,440	827,925	899,547
Junior subordinated debentures	103,094		117,059	—	—	117,059	103,094	116,725
Cash flow hedges - swaps	13,932		13,932	—	13,932	—	13,637	13,637
Accrued interest payable	1,111		1,111	1,111	—	—	1,104	1,104
Total financial liabilities	$	6,798,445	6,913,400	4,023,902	13,932	2,875,566	6,726,085	6,855,972

Schedule of assets measured at fair value on a recurring basis

The following table represents assets and liabilities measured at fair value on a recurring basis at September 30, 2012 (in thousands):

						Total
						assets at
	Level 1		Level 2		Level 3	fair value
Equity securities	$	20,068	—		—	20,068
Debt securities:
U.S. government and agencies	—		41		—	41
Government sponsored enterprises	—		124,354		—	124,354
States and political subdivisions	—		141,863		—	141,863
Corporate	—		11,465		8,830	20,295
Total debt securities	—		277,723		8,830	286,553
Residential mortgage-backed securities:
GNMA	—		42,438		—	42,438
FNMA	—		117,605		—	117,605
FHLMC	—		58,844		—	58,844
Non-agency	—		703		—	703
Collateralized mortgage obligations:
GNMA	—		28,960		—	28,960
FNMA	—		161,442		—	161,442
FHLMC	—		211,657		—	211,657
SBA	—		16,421		—	16,421
Non-agency	—		7,188		—	7,188
Total mortgage-backed securities	—		645,258		—	645,258
Interest rate swaps	—		(13,932	)	—	(13,932	)
Total assets	$	20,068	909,049		8,830	937,947

The following table represents assets and liabilities 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 debt securities measured at fair value on a recurring basis using significant unobservable inputs (Level 3)

The table below presents a reconciliation of debt securities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the periods indicated (in thousands):

	Quarter ended			Nine months ended
	September 30, 2012		September 30, 2011	September 30, 2012		September 30, 2011
Beginning balance	$	8,296	9,040	9,657		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	534		881	(827	)	712
Purchases	—		—	—		—
Sales	—		—	—		—
Transfers in to Level 3	—		—	—		—
Transfers out of Level 3	—		—	—		—
Ending balance	$	8,830	9,921	8,830		9,921

Schedule of fair value measurement for nonrecurring assets

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 September 30, 2012 (in thousands):

					Total
					assets at
	Level 1		Level 2	Level 3	fair value
Loans measured for impairment	$	—	—	49,184	49,184
Real estate owned	—		—	29,291	29,291
Total assets	$	—	—	78,475	78,475

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 about assets measured at fair value on a recurring basis and nonrecurring basis for Level 3 Fair Value Measurements

The following table presents additional quantitative information about assets measured at fair value on a recurring and nonrecurring basis and for which we have utilized Level 3 inputs to determine fair value at September 30, 2012 (dollar amounts in thousands):

	Fair value		Valuation techniques	Significant unobservable inputs	Range (weighted average)
Debt securities	$	8,830	Discounted cash flow	Discount margin	0.35% to 2.10% (0.67)%
				Default rates	2.00%
				Prepayment speeds	1.00% annually
Loans measured for impairment	49,184		Appraisal value (1)	N/A	N/A
Real estate owned	29,291		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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Pension and Other Post-retirement Benefits (in thousands): (Tables)

9 Months Ended

Sep. 30, 2012

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

Schedule of the components of pension and other post-retirement periodic benefit costs (in thousands)

	Quarter ended September 30,
	Pension benefits					Other post-retirement benefits
	2012			2011		2012	2011
Service cost	$	1,858		1,429		—	—
Interest cost	1,432			1,363		16	21
Expected return on plan assets	(1,948		)	(1,502	)	—	—
Amortization of prior service cost	(40		)	(40	)	—	—
Amortization of the net loss	690			169		13	13
Net periodic benefit cost	$	1,992		1,419		29	34

	Nine months ended September 30,
	Pension benefits					Other post-retirement benefits
	2012			2011		2012	2011
Service cost	$	5,573		4,285		—	—
Interest cost	4,297			4,089		49	72
Expected return on plan assets	(5,844		)	(4,506	)	—	—
Amortization of prior service cost	(120		)	(120	)	—	—
Amortization of the net loss	2,070			507		38	39
Net periodic benefit cost	$	5,976		4,255		87	111

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Earnings Per Share (Details 2) (USD $) In Thousands, except Share data, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011
Earnings Per Share
Net income	$ 15,693	$ 16,720	$ 47,235	$ 48,976
Weighted average common shares outstanding	94,422,878	96,918,016	94,277,362	101,866,461
Dilutive potential shares due to effect of stock options	187,778	206,312	314,040	402,466
Total weighted average common shares and dilutive potential shares	94,610,656	97,124,328	94,591,402	102,268,927
Basic earnings per share (in dollars per share)	$ 0.17	$ 0.17	$ 0.50	$ 0.48
Diluted earnings per share (in dollars per share)	$ 0.17	$ 0.17	$ 0.50	$ 0.48

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Loans receivable (Details 2) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011
Changes in allowance for losses on allocated loans receivable
Balance at the beginning of the period	$ 70,110	$ 75,455	$ 71,138	$ 76,412
Current period provision	6,915	8,057	18,165	23,668
Charge-offs	(7,027)	(10,995)	(21,361)	(29,146)
Recoveries	1,179	691	3,235	2,274
Balance at the end of the period	71,177	73,208	71,177	73,208
Changes in allowance for losses on loans receivable
Balance at the beginning of the period	70,110	75,455	71,138	76,412
Current period provision	6,915	8,057	18,165	23,668
Charge-offs	(7,027)	(10,995)	(21,361)	(29,146)
Recoveries	1,179	691	3,235	2,274
Balance at the end of the period	71,177	73,208	71,177	73,208
Personal Banking
Changes in allowance for losses on allocated loans receivable
Balance at the beginning of the period	21,296	21,306	22,494	20,339
Current period provision	3,223	3,471	7,714	11,213
Charge-offs	(4,001)	(2,529)	(10,535)	(10,220)
Recoveries	742	372	1,587	1,288
Balance at the end of the period	21,260	22,620	21,260	22,620
Changes in allowance for losses on loans receivable
Current period provision	3,223	3,471	7,714	11,213
Charge-offs	(4,001)	(2,529)	(10,535)	(10,220)
Recoveries	742	372	1,587	1,288
Personal Banking | Residential mortgage loans
Changes in allowance for losses on allocated loans receivable
Balance at the beginning of the period	7,997	8,463	8,482	6,854
Current period provision	1,440	707	3,017	4,190
Charge-offs	(1,197)	(634)	(3,459)	(2,668)
Recoveries	121	75	321	235
Balance at the end of the period	8,361	8,611	8,361	8,611
Changes in allowance for losses on loans receivable
Current period provision	1,440	707	3,017	4,190
Charge-offs	(1,197)	(634)	(3,459)	(2,668)
Recoveries	121	75	321	235
Personal Banking | Home equity loans
Changes in allowance for losses on allocated loans receivable
Balance at the beginning of the period	8,634	7,699	8,687	7,675
Current period provision	710	1,465	2,078	4,586
Charge-offs	(1,268)	(588)	(2,749)	(3,736)
Recoveries	42	20	102	71
Balance at the end of the period	8,118	8,596	8,118	8,596
Changes in allowance for losses on loans receivable
Current period provision	710	1,465	2,078	4,586
Charge-offs	(1,268)	(588)	(2,749)	(3,736)
Recoveries	42	20	102	71
Personal Banking | Other consumer loans
Changes in allowance for losses on allocated loans receivable
Balance at the beginning of the period	4,665	5,144	5,325	5,810
Current period provision	1,073	1,299	2,619	2,437
Charge-offs	(1,536)	(1,307)	(4,327)	(3,816)
Recoveries	579	277	1,164	982
Balance at the end of the period	4,781	5,413	4,781	5,413
Changes in allowance for losses on loans receivable
Current period provision	1,073	1,299	2,619	2,437
Charge-offs	(1,536)	(1,307)	(4,327)	(3,816)
Recoveries	579	277	1,164	982
Business Banking
Changes in allowance for losses on allocated loans receivable
Balance at the beginning of the period	44,212	49,653	44,228	51,602
Current period provision	3,939	4,808	10,512	12,652
Charge-offs	(3,026)	(8,466)	(10,826)	(18,926)
Recoveries	437	319	1,648	986
Balance at the end of the period	45,562	46,314	45,562	46,314
Changes in allowance for losses on loans receivable
Current period provision	3,939	4,808	10,512	12,652
Charge-offs	(3,026)	(8,466)	(10,826)	(18,926)
Recoveries	437	319	1,648	986
Business Banking | Commercial real estate
Changes in allowance for losses on allocated loans receivable
Balance at the beginning of the period	34,781	31,690	32,148	35,832
Current period provision	538	3,188	6,631	3,092
Charge-offs	(1,385)	(3,675)	(5,817)	(8,220)
Recoveries	403	190	1,375	689
Balance at the end of the period	34,337	31,393	34,337	31,393
Changes in allowance for losses on loans receivable
Current period provision	538	3,188	6,631	3,092
Charge-offs	(1,385)	(3,675)	(5,817)	(8,220)
Recoveries	403	190	1,375	689
Business Banking | Commercial loans
Changes in allowance for losses on allocated loans receivable
Balance at the beginning of the period	9,431	17,963	12,080	15,770
Current period provision	3,401	1,620	3,881	9,560
Charge-offs	(1,641)	(4,791)	(5,009)	(10,706)
Recoveries	34	129	273	297
Balance at the end of the period	11,225	14,921	11,225	14,921
Changes in allowance for losses on loans receivable
Current period provision	3,401	1,620	3,881	9,560
Charge-offs	(1,641)	(4,791)	(5,009)	(10,706)
Recoveries	34	129	273	297
Unallocated
Changes in allowance for losses on allocated loans receivable
Current period provision	(247)	(222)	(61)	(197)
Changes in allowance for losses on loans receivable
Balance at the beginning of the period	4,602	4,496	4,416	4,471
Current period provision	(247)	(222)	(61)	(197)
Balance at the end of the period	$ 4,355	$ 4,274	$ 4,355	$ 4,274

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Mortgage Loan Servicing (Tables)

9 Months Ended

Sep. 30, 2012

Mortgage Loan Servicing

Schedule of changes in MSRs

The following table shows changes in MSRs at and for the quarter ended September 30, 2012 (in thousands):

						Net
						carrying
	Servicing			Valuation		value and
	rights			allowance		fair value
Balance at June 30, 2012	$	3,503		(84	)	3,419
Additions/ (reductions)	438			84		522
Amortization	(553		)	—		(553	)
Balance at September 30, 2012	$	3,388		—		3,388

The following table shows changes in MSRs at and for the nine months ended September 30, 2012 (in thousands):

					Net
					carrying
	Servicing			Valuation	value and
	rights			allowance	fair value
Balance at December 31, 2011	$	3,655		—	3,655
Additions/ (reductions)	1,780			—	1,780
Amortization	(2,047		)	—	(2,047	)
Balance at September 30, 2012	$	3,388		—	3,388

The following table shows changes in MSRs at and for the quarter ended September 30, 2011 (in thousands):

					Net
					carrying
	Servicing			Valuation	value and
	rights			allowance	fair value
Balance at June 30, 2011	$	4,842		—	4,842
Additions/ (reductions)	510			—	510
Amortization	(854		)	—	(854	)
Balance at September 30, 2011	$	4,498		—	4,498

The following table shows changes in MSRs at and for the nine months ended September 30, 2011 (in thousands):

					Net
					carrying
	Servicing			Valuation	value and
	rights			allowance	fair value
Balance at December 31, 2010	$	5,969		—	5,969
Additions/ (reductions)	1,145			—	1,145
Amortization	(2,616		)	—	(2,616	)
Balance at September 30, 2011	$	4,498		—	4,498

Schedule of inputs used to determine the fair value of mortgage servicing right

The following table presents additional information about the inputs used to determine the fair value of our MSRs at the periods indicated:

	September 30,			September 30,
	2012 *			2011 **
	(Weighted average)
Forward yield curve (5 year LIBOR swap)	0.8		%	1.3		%
Prepayment rates	20.0		%	20.6		%
Annual service cost per loan	$	67		$	67
Average life expectancy (months)	52			49
Option adjusted spread (basis points)	800			—
Discount rate	—			10.5		%

*  Stochastic modeling

**  Static modeling

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

9 Months Ended

Sep. 30, 2012

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

Schedule of liability derivatives included in other liabilities

	September 30,		December 31,
	2012		2011
Fair value	$	13,932	13,637
Notional amount	100,000		100,000
Collateral posted	14,455		13,855

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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		9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
Other comprehensive income, tax (in dollars)	$ (963)	$ (233)	$ (2,359)	$ (3,900)
Dividends paid, per share (in dollars per share)	$ 0.12	$ 0.11	$ 0.36	$ 0.32

XML

Basis of Presentation and Informational Disclosures (Details)	Sep. 30, 2012 item branch
Nature of Operations
Number of banking locations (in branch)	166
Number of consumer finance offices	52

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Investment securities and impairment of investment securities (Details 6) (USD $) In Thousands, unless otherwise specified	3 Months Ended	9 Months Ended
	Sep. 30, 2012	Sep. 30, 2012	Sep. 30, 2011	Jun. 30, 2012	Dec. 31, 2011	Jun. 30, 2011	Dec. 31, 2010
Book value, fair value, unrealized losses and other-than-temporary impairment recorded in earnings
Book Value	$ 21,047	$ 21,047
Fair Value	951,879	951,879			908,349
Unrealized Gain/ (Loss)	(5,481)	(5,481)			(6,210)
Impairment recorded in current period earnings	93	331	507
Total impairment recorded in prior period earnings	(16,713)	(16,713)	(15,952)	(16,620)	(16,382)	(15,952)	(15,445)
Non-agency CMOs
Marketable securities
Number of investments	7	7
Book value, fair value, unrealized losses and other-than-temporary impairment recorded in earnings
Book Value	7,302	7,302
Fair Value	7,188	7,188
Unrealized Gain/ (Loss)	(114)	(114)
Impairment recorded in current period earnings		(93)
Total impairment recorded in prior period earnings	(1,153)	(1,153)
Non-agency CMOs | AMAC 2003-6 2A2
Book value, fair value, unrealized losses and other-than-temporary impairment recorded in earnings
Book Value	233	233
Fair Value	239	239
Unrealized Gain/ (Loss)	6	6
Non-agency CMOs | AMAC 2003-6 2A8
Book value, fair value, unrealized losses and other-than-temporary impairment recorded in earnings
Book Value	481	481
Fair Value	496	496
Unrealized Gain/ (Loss)	15	15
Non-agency CMOs | BOAMS 2005-11 1A8
Book value, fair value, unrealized losses and other-than-temporary impairment recorded in earnings
Book Value	965	965
Fair Value	1,081	1,081
Unrealized Gain/ (Loss)	116	116
Total impairment recorded in prior period earnings	(146)	(146)
Non-agency CMOs | CWALT 2005-J14 A3
Book value, fair value, unrealized losses and other-than-temporary impairment recorded in earnings
Book Value	3,893	3,893
Fair Value	3,646	3,646
Unrealized Gain/ (Loss)	(247)	(247)
Impairment recorded in current period earnings		(93)
Total impairment recorded in prior period earnings	(1,007)	(1,007)
Non-agency CMOs | CFSB 2003-17 2A2
Book value, fair value, unrealized losses and other-than-temporary impairment recorded in earnings
Book Value	469	469
Fair Value	478	478
Unrealized Gain/ (Loss)	9	9
Non-agency CMOs | WAMU 2003-S2 A4
Book value, fair value, unrealized losses and other-than-temporary impairment recorded in earnings
Book Value	363	363
Fair Value	370	370
Unrealized Gain/ (Loss)	7	7
Non-agency CMOs | WFMBS 2003-B A2
Book value, fair value, unrealized losses and other-than-temporary impairment recorded in earnings
Book Value	898	898
Fair Value	878	878
Unrealized Gain/ (Loss)	(20)	(20)
Non-agency CMOs for which book value exceeds carrying value
Marketable securities
Number of investments	2	2
Book value, fair value, unrealized losses and other-than-temporary impairment recorded in earnings
Book Value	4,800	4,800
Fair Value	$ 4,500	$ 4,500
One of non-agency collateralized mortgage obligations
Marketable securities
Number of investments	1	1

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Goodwill and Other Intangible Assets (Details 2) (USD $) In Thousands, unless otherwise specified	Sep. 30, 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	170,269
Balance at the end of the period	170,269	170,269	170,269
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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CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (USD $) In Thousands, unless otherwise specified	Sep. 30, 2012	Dec. 31, 2011
Assets
Cash and due from banks	$ 91,286	$ 94,276
Interest-earning deposits in other financial institutions	546,149	593,388
Federal funds sold and other short-term investments	633	633
Marketable securities available-for-sale (amortized cost of $922,684 and $885,408)	951,879	908,349
Marketable securities held-to-maturity (fair value of $174,821 and $239,412)	167,739	231,389
Total cash and investments	1,757,686	1,828,035
Personal Banking:
Residential mortgage loans held for sale	14,152	967
Residential mortgage loans	2,410,124	2,396,399
Home equity loans	1,100,879	1,084,786
Other consumer loans	235,693	245,689
Total Personal Banking	3,760,848	3,727,841
Business Banking:
Commercial real estate loans	1,560,966	1,435,767
Commercial loans	406,819	387,911
Total Business Banking	1,967,785	1,823,678
Total loans	5,728,633	5,551,519
Allowance for loan losses	(71,177)	(71,138)
Total loans, net	5,657,456	5,480,381
Federal Home Loan Bank stock, at cost	46,834	48,935
Accrued interest receivable	25,324	24,599
Real estate owned, net	29,291	26,887
Premises and equipment, net	135,455	132,152
Bank owned life insurance	136,871	133,524
Goodwill	171,882	171,882
Other intangible assets	1,330	2,123
Other assets	85,542	109,187
Total assets	8,047,671	7,957,705
Liabilities:
Noninterest-bearing demand deposits	763,839	658,560
Interest-bearing demand deposits	842,389	800,676
Savings deposits	2,256,544	2,036,272
Time deposits	1,961,984	2,284,817
Total deposits	5,824,756	5,780,325
Borrowed funds	855,552	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	11,570	23,571
Accrued interest payable	1,111	1,104
Other liabilities	76,962	66,782
Total liabilities	6,873,045	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, 97,844,382 and 97,493,046 shares issued and outstanding, respectively	978	975
Paid-in capital	661,589	659,523
Retained earnings	556,502	543,598
Unallocated common stock of employee stock ownership plan	(24,817)	(25,966)
Accumulated other comprehensive loss	(19,626)	(23,226)
Total shareholders' equity	1,174,626	1,154,904
Total liabilities and shareholders' equity	$ 8,047,671	$ 7,957,705

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Loans receivable (Details 3) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2012	Dec. 31, 2011
Loan portfolio by portfolio segment and by class of financing receivable
Recorded investment in loans receivable	$ 5,728,633	$ 5,551,519
Allowance for loan losses	66,822	66,722
Recorded investment in loans on nonaccrual	120,772	131,105
Recorded investment > 90 days past due and still accruing	807	510
TDRs	86,325	69,429
Personal Banking
Loan portfolio by portfolio segment and by class of financing receivable
Recorded investment in loans receivable	3,760,848	3,727,841
Allowance for loan losses	21,260	22,494
Recorded investment in loans on nonaccrual	35,335	40,448
Recorded investment > 90 days past due and still accruing	807	510
TDRs	4,175	806
Personal Banking | Residential mortgage loans
Loan portfolio by portfolio segment and by class of financing receivable
Recorded investment in loans receivable	2,424,276	2,397,366
Allowance for loan losses	8,361	8,482
Recorded investment in loans on nonaccrual	24,476	28,221
Recorded investment > 90 days past due and still accruing	807	12
TDRs	3,545	806
Personal Banking | Home equity loans
Loan portfolio by portfolio segment and by class of financing receivable
Recorded investment in loans receivable	1,100,879	1,084,786
Allowance for loan losses	8,118	8,687
Recorded investment in loans on nonaccrual	9,365	9,560
Recorded investment > 90 days past due and still accruing		221
TDRs	630
Personal Banking | Other consumer loans
Loan portfolio by portfolio segment and by class of financing receivable
Recorded investment in loans receivable	235,693	245,689
Allowance for loan losses	4,781	5,325
Recorded investment in loans on nonaccrual	1,494	2,667
Recorded investment > 90 days past due and still accruing		277
Business Banking
Loan portfolio by portfolio segment and by class of financing receivable
Recorded investment in loans receivable	1,967,785	1,823,678
Allowance for loan losses	45,562	44,228
Recorded investment in loans on nonaccrual	85,437	90,657
TDRs	82,150	68,623
Business Banking | Commercial real estate
Loan portfolio by portfolio segment and by class of financing receivable
Recorded investment in loans receivable	1,560,966	1,435,767
Allowance for loan losses	34,337	32,148
Recorded investment in loans on nonaccrual	61,632	62,494
TDRs	44,996	38,216
Business Banking | Commercial loans
Loan portfolio by portfolio segment and by class of financing receivable
Recorded investment in loans receivable	406,819	387,911
Allowance for loan losses	11,225	12,080
Recorded investment in loans on nonaccrual	23,805	28,163
TDRs	$ 37,154	$ 30,407

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CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Parenthetical) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Unrealized holding gains, tax	$ (998)	$ (1,502)	$ (2,471)	$ (5,123)
Other-than-temporary impairment on securities included in net income, tax	(36)	0	(129)	(177)
Reclassification adjustment for (gains)/ losses included in net income, tax	16	(155)	138	(247)
Change in fair value of interest rate swaps, tax	$ 55	$ 1,424	$ 103	$ 1,647

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Disclosures About Fair Value of Financial Instruments (Details 2) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2012	Dec. 31, 2011
Assets measured at fair value on a recurring basis
Available-for-sale securities	$ 951,879	$ 908,349
Non-agency
Assets measured at fair value on a recurring basis
Available-for-sale securities	7,188
Level 1
Assets measured at fair value on a recurring basis
Available-for-sale securities	20,068
Total financial assets	697,612
Level 2
Assets measured at fair value on a recurring basis
Available-for-sale securities	922,981
Interest rate swaps	(13,932)
Total financial assets	1,097,802
Level 3
Assets measured at fair value on a recurring basis
Available-for-sale securities	8,830
Total financial assets	5,977,349
Measured on recurring basis
Assets measured at fair value on a recurring basis
Mortgage-backed securities	645,258	629,224
Total financial assets	937,947	894,712
Measured on recurring basis | Equity securities
Assets measured at fair value on a recurring basis
Available-for-sale securities	20,068	12,465
Measured on recurring basis | Debt securities
Assets measured at fair value on a recurring basis
Available-for-sale securities	286,553	266,660
Measured on recurring basis | U.S. government and agencies
Assets measured at fair value on a recurring basis
Available-for-sale securities	41	59
Measured on recurring basis | Government sponsored enterprises
Assets measured at fair value on a recurring basis
Available-for-sale securities	124,354	76,179
Measured on recurring basis | States and political subdivisions
Assets measured at fair value on a recurring basis
Available-for-sale securities	141,863	169,288
Measured on recurring basis | Corporate
Assets measured at fair value on a recurring basis
Available-for-sale securities	20,295	21,134
Measured on recurring basis | Residential mortgage-backed securities | GNMA
Assets measured at fair value on a recurring basis
Mortgage-backed securities	42,438	48,297
Measured on recurring basis | Residential mortgage-backed securities | FNMA
Assets measured at fair value on a recurring basis
Mortgage-backed securities	117,605	138,340
Measured on recurring basis | Residential mortgage-backed securities | FHLMC
Assets measured at fair value on a recurring basis
Mortgage-backed securities	58,844	72,980
Measured on recurring basis | Residential mortgage-backed securities | Non-agency
Assets measured at fair value on a recurring basis
Mortgage-backed securities	703	725
Measured on recurring basis | Collateralized mortgage obligations | GNMA
Assets measured at fair value on a recurring basis
Mortgage-backed securities	28,960	30,759
Measured on recurring basis | Collateralized mortgage obligations | FNMA
Assets measured at fair value on a recurring basis
Mortgage-backed securities	161,442	118,526
Measured on recurring basis | Collateralized mortgage obligations | FHLMC
Assets measured at fair value on a recurring basis
Mortgage-backed securities	211,657	191,049
Measured on recurring basis | Collateralized mortgage obligations | SBA
Assets measured at fair value on a recurring basis
Mortgage-backed securities	16,421	18,624
Measured on recurring basis | Collateralized mortgage obligations | Non-agency
Assets measured at fair value on a recurring basis
Mortgage-backed securities	7,188	9,924
Measured on recurring basis | Interest rate swaps
Assets measured at fair value on a recurring basis
Interest rate swaps	(13,932)	(13,637)
Measured on recurring basis | Level 1
Assets measured at fair value on a recurring basis
Total financial assets	20,068	12,465
Measured on recurring basis | Level 1 | Equity securities
Assets measured at fair value on a recurring basis
Available-for-sale securities	20,068	12,465
Measured on recurring basis | Level 2
Assets measured at fair value on a recurring basis
Mortgage-backed securities	645,258	629,224
Total financial assets	909,049	872,590
Measured on recurring basis | Level 2 | Debt securities
Assets measured at fair value on a recurring basis
Available-for-sale securities	277,723	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	41	59
Measured on recurring basis | Level 2 | Government sponsored enterprises
Assets measured at fair value on a recurring basis
Available-for-sale securities	124,354	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	141,863	169,288
Measured on recurring basis | Level 2 | Corporate
Assets measured at fair value on a recurring basis
Available-for-sale securities	11,465	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	42,438	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	117,605	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	58,844	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	703	725
Measured on recurring basis | Level 2 | Collateralized mortgage obligations | GNMA
Assets measured at fair value on a recurring basis
Mortgage-backed securities	28,960	30,759
Measured on recurring basis | Level 2 | Collateralized mortgage obligations | FNMA
Assets measured at fair value on a recurring basis
Mortgage-backed securities	161,442	118,526
Measured on recurring basis | Level 2 | Collateralized mortgage obligations | FHLMC
Assets measured at fair value on a recurring basis
Mortgage-backed securities	211,657	191,049
Measured on recurring basis | Level 2 | Collateralized mortgage obligations | SBA
Assets measured at fair value on a recurring basis
Mortgage-backed securities	16,421	18,624
Measured on recurring basis | Level 2 | Collateralized mortgage obligations | Non-agency
Assets measured at fair value on a recurring basis
Mortgage-backed securities	7,188	9,924
Measured on recurring basis | Level 2 | Interest rate swaps
Assets measured at fair value on a recurring basis
Interest rate swaps	(13,932)	(13,637)
Measured on recurring basis | Level 3
Assets measured at fair value on a recurring basis
Total financial assets	8,830	9,657
Measured on recurring basis | Level 3 | Debt securities
Assets measured at fair value on a recurring basis
Available-for-sale securities	8,830	9,657
Measured on recurring basis | Level 3 | Corporate
Assets measured at fair value on a recurring basis
Available-for-sale securities	$ 8,830	$ 9,657

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Investment securities and impairment of investment securities (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2012	Dec. 31, 2011
Amortized cost
Total	$ 922,684	$ 885,408
Gross unrealized holding gains
Total	34,676	29,151
Gross unrealized holding losses
Total	(5,481)	(6,210)
Fair value
Total	951,879	908,349
Non-agency CMOs
Gross unrealized holding losses
Total	(114)
Fair value
Total	7,188
Debt issued by the U.S. government and agencies
Amortized cost
Due in one year or less	41	59
Fair value
Due in one year or less	41	59
Debt issued by government sponsored enterprises
Amortized cost
Due in one year - five years	57,427	36,295
Due in five years - ten years	58,610	29,557
Due after ten years	7,512	9,665
Gross unrealized holding gains
Due in one year - five years	135	134
Due in five years - ten years	692	638
Gross unrealized holding losses
Due in five years - ten years	(11)	(61)
Due after ten years	(11)	(49)
Fair value
Due in one year - five years	57,562	36,429
Due in five years - ten years	59,291	30,134
Due after ten years	7,501	9,616
Equity securities
Amortized cost
Total	13,020	12,080
Gross unrealized holding gains
Total	7,133	644
Gross unrealized holding losses
Total	(85)	(259)
Fair value
Total	20,068	12,465
Municipal securities
Amortized cost
Due in one year - five years	7,626	10,633
Due in five years - ten years	21,377	27,817
Due after ten years	105,527	124,041
Gross unrealized holding gains
Due in one year - five years	229	291
Due in five years - ten years	832	1,336
Due after ten years	6,273	5,350
Gross unrealized holding losses
Due after ten years	(1)	(180)
Fair value
Due in one year - five years	7,855	10,924
Due in five years - ten years	22,209	29,153
Due after ten years	111,799	129,211
Corporate debt issues
Amortized cost
Due in one year or less		500
Due after ten years	24,914	25,036
Gross unrealized holding gains
Due after ten years	249	233
Gross unrealized holding losses
Due after ten years	(4,868)	(4,635)
Fair value
Due in one year or less		500
Due after ten years	20,295	20,634
Residential mortgage-backed securities
Amortized cost
Total	626,630	609,725
Gross unrealized holding gains
Total	19,133	20,525
Gross unrealized holding losses
Total	(505)	(1,026)
Fair value
Total	645,258	629,224
Fixed rate | Pass-through
Amortized cost
Total	94,048	110,364
Gross unrealized holding gains
Total	7,869	8,201
Gross unrealized holding losses
Total		(1)
Fair value
Total	101,917	118,564
Fixed rate | Non-agency CMOs
Amortized cost
Total	6,404	9,521
Gross unrealized holding gains
Total	153	188
Gross unrealized holding losses
Total	(247)	(735)
Fair value
Total	6,310	8,974
Fixed rate | Agency CMOs
Amortized cost
Total	159,880	112,670
Gross unrealized holding gains
Total	3,035	3,466
Fair value
Total	162,915	116,136
Variable rate | Pass-through
Amortized cost
Total	111,574	135,103
Gross unrealized holding gains
Total	6,101	6,679
Gross unrealized holding losses
Total	(2)	(4)
Fair value
Total	117,673	141,778
Variable rate | Non-agency CMOs
Amortized cost
Total	898	1,104
Gross unrealized holding losses
Total	(20)	(154)
Fair value
Total	878	950
Variable rate | Agency CMOs
Amortized cost
Total	253,826	240,963
Gross unrealized holding gains
Total	1,975	1,991
Gross unrealized holding losses
Total	(236)	(132)
Fair value
Total	$ 255,565	$ 242,822

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Guaranteed Preferred Beneficial Interests in the 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	Sep. 30, 2012	Dec. 31, 2011
Interest rate swap agreements
Liability Derivatives, Included in Other Liabilities
Fair value	$ 13,932	$ 13,637
Notional amount	100,000	100,000
Collateral posted	$ 13,932	$ 13,637

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Legal Proceedings

9 Months Ended

Sep. 30, 2012

Legal Proceedings

Legal Proceedings

(12)Legal Proceedings

We establish accruals for legal proceedings when information related to the loss contingencies represented by those matters indicates both that a loss is probable and that the amount of loss can be reasonably estimated. Any such accruals are adjusted thereafter as appropriate to reflect changed circumstances. Due to the inherent subjectivity of assessments and unpredictability of outcomes of legal proceedings, any amounts accrued may not represent the ultimate loss to us from legal proceedings.

Toth v. Northwest Savings Bank

On May 7, 2012, we were named as a defendant in an alleged class action lawsuit filed in the Court of Common Pleas of Allegheny County, Pennsylvania, captioned as Toth v. Northwest Savings Bank, No. GD-12-8014. The Complaint challenges the manner in which debit card transaction overdraft fees were charged and the policies related to the posting order of debit card transactions. The Complaint asserts various claims under state law and seeks compensatory damages and attorneys’ fees. We filed preliminary objections seeking dismissal of the case on June 29, 2012.  In response, the plaintiff filed an Amended Complaint on September 6, 2012.  We intend to vigorously defend against the plaintiff’s claims and to oppose any effort to certify a class in this case. At this stage of the lawsuit, it is not yet possible to estimate potential losses, if any. Although it is not possible to predict the ultimate resolution or financial liability with respect to this litigation, management after consultation with legal counsel, currently does not anticipate that the aggregate liability, if any, arising out of this proceeding will have a material adverse effect on our financial position, or cash flows; although, at the present time, management is not in a position to determine whether such proceeding will have a material adverse effect on our results of operations in any future quarterly reporting period.

Daly v. Northwest Savings Bank

On July 11, 2011, we were named as a defendant in an alleged class action lawsuit filed in the United States District Court for the Western District of Pennsylvania, captioned as Daly v. Northwest Savings Bank, No. 2:11-cv-00911-DSC. The Complaint challenges the credit disclosures provided to residential mortgage loan applicants and the policies related to the residential mortgage loan application process and the prequalification request process. The Complaint asserts statutory claims under the Fair Credit Reporting Act, 15 U.S.C. 1681g(g), and seeks statutory damages and attorneys’ fees. We have filed a motion for summary judgment and intend to continue to vigorously defend against the plaintiff’s claims. The plaintiff has filed a motion for class certification and we subsequently filed an opposition. Both motions are presently pending before the Court. At this stage of the lawsuit, it is not yet possible to estimate potential losses, if any. Although it is not possible to predict the ultimate resolution or financial liability with respect to this litigation, management, after consultation with legal counsel, currently does not anticipate that the aggregate liability, if any, arising out of this proceeding will have a material adverse effect on our financial position, or cash flows; although, at the present time, management is not in a position to determine whether such proceeding will have a material adverse effect on our results of operations in any future quarterly reporting period.

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Investment securities and impairment of investment securities (Details 2) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2012	Dec. 31, 2011
Amortized cost
Total	$ 167,739	$ 231,389
Gross unrealized holding gains
Total	7,135	8,023
Gross unrealized holding losses
Total	(53)
Fair value
Total	174,821	239,412
Municipal securities
Amortized cost
Due in five years - ten years	3,679	3,677
Due after ten years	65,595	71,015
Gross unrealized holding gains
Due in five years - ten years	167	174
Due after ten years	4,080	3,615
Fair value
Due in five years - ten years	3,846	3,851
Due after ten years	69,675	74,630
Residential mortgage-backed securities
Amortized cost
Total	98,465	156,697
Gross unrealized holding gains
Total	2,888	4,234
Gross unrealized holding losses
Total	(53)
Fair value
Total	101,300	160,931
Fixed rate | Pass-through
Amortized cost
Total	18,478	24,160
Gross unrealized holding gains
Total	1,145	1,099
Fair value
Total	19,623	25,259
Fixed rate | Agency CMOs
Amortized cost
Total	65,025	108,881
Gross unrealized holding gains
Total	1,588	2,761
Gross unrealized holding losses
Total	(53)
Fair value
Total	66,560	111,642
Variable rate | Pass-through
Amortized cost
Total	7,101	9,066
Gross unrealized holding gains
Total	5	94
Fair value
Total	7,106	9,160
Variable rate | Agency CMOs
Amortized cost
Total	7,861	14,590
Gross unrealized holding gains
Total	150	280
Fair value
Total	$ 8,011	$ 14,870

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Investment securities and impairment of investment securities (Tables)

9 Months Ended

Sep. 30, 2012

Investment securities and impairment of investment securities

Schedule of the portfolio of investment securities available-for-sale

The following table shows the portfolio of investment securities available-for-sale at September 30, 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	$	41	—	—		41
Debt issued by government sponsored enterprises:
Due in one year - five years	57,427		135	—		57,562
Due in five years - ten years	58,610		692	(11	)	59,291
Due after ten years	7,512		—	(11	)	7,501
Equity securities	13,020		7,133	(85	)	20,068
Municipal securities:
Due in one year - five years	7,626		229	—		7,855
Due in five years - ten years	21,377		832	—		22,209
Due after ten years	105,527		6,273	(1	)	111,799
Corporate debt issues:
Due after ten years	24,914		249	(4,868	)	20,295
Residential mortgage-backed securities:
Fixed rate pass-through	94,048		7,869	—		101,917
Variable rate pass-through	111,574		6,101	(2	)	117,673
Fixed rate non-agency CMOs	6,404		153	(247	)	6,310
Fixed rate agency CMOs	159,880		3,035	—		162,915
Variable rate non-agency CMOs	898		—	(20	)	878
Variable rate agency CMOs	253,826		1,975	(236	)	255,565
Total residential mortgage-backed securities	626,630		19,133	(505	)	645,258
Total marketable securities available-for-sale	$	922,684	34,676	(5,481	)	951,879

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 the portfolio of investment securities held-to-maturity

The following table shows the portfolio of investment securities held-to-maturity at September 30, 2012 (in thousands):

			Gross	Gross
			unrealized	unrealized
	Amortized		holding	holding		Fair
	cost		gains	losses		value
Municipal securities:
Due in five years - ten years	$	3,679	167	—		3,846
Due after ten years	65,595		4,080	—		69,675
Residential mortgage-backed securities:
Fixed rate pass-through	18,478		1,145	—		19,623
Variable rate pass-through	7,101		5	—		7,106
Fixed rate agency CMOs	65,025		1,588	(53	)	66,560
Variable rate agency CMOs	7,861		150	—		8,011
Total residential mortgage-backed securities	98,465		2,888	(53	)	101,300
Total marketable securities held-to-maturity	$	167,739	7,135	(53	)	174,821

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

Schedule of the fair value and gross unrealized losses on investment securities, aggregated by investment category and length of time individual securities have been in a continuous unrealized loss position

The following table shows the fair value 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 September 30, 2012 (in thousands):

	Less than 12 months				12 months or more			Total
			Unrealized			Unrealized			Unrealized
	Fair value		loss		Fair value	loss		Fair value	loss
Government sponsored enterprises	$	10,566	(11	)	7,502	(11	)	18,068	(22	)
Municipal securities	—		—		594	(1	)	594	(1	)
Corporate issues	850		(38	)	15,330	(4,830	)	16,180	(4,868	)
Equity securities	539		(83	)	17	(2	)	556	(85	)
Residential mortgage-backed securities - non-agency	—		—		4,524	(267	)	4,524	(267	)
Residential mortgage-backed securities - agency	59,366		(268	)	8,116	(23	)	67,482	(291	)
Total temporarily impaired securities	$	71,321	(400	)	36,083	(5,134	)	107,404	(5,534	)

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
Government sponsored emterprises	$	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	)

Schedule of the class, amortized cost, fair value and ratings information for the portfolio of corporate securities that have an unrealized loss

The following table provides class, amortized cost, fair value and ratings information for our portfolio of corporate securities that have an unrealized loss, both greater than and less than twelve months, at September 30, 2012 (in thousands):

		Total
		Amortized		Fair	Unrealized		Moody’s/ Fitch
Description	Class	cost		value	losses		ratings
Bank Boston Capital Trust (1)	N/A	$	990	725	(265	)	Ba2/ BB
Huntington Capital Trust	N/A	1,426		1,060	(366	)	Baa3/ BB
Commercebank Capital Trust	N/A	888		850	(38	)	Not rated
Ocean Shore Capital Trust	N/A	866		800	(66	)	Not rated
I-PreTSL I	Mezzanine	1,500		511	(989	)	Not rated/ CCC
I-PreTSL II	Mezzanine	1,500		608	(892	)	Not rated/ B
PreTSL XIX	Senior A-1	8,486		6,939	(1,547	)	Baa2/ BBB
PreTSL XX	Senior A-1	5,392		4,687	(705	)	Ba2/ BB
		$	21,048	16,180	(4,868	)

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

Schedule of the collateral information on the entire pooled for the trust preferred securities

The following table provides collateral information on the entire pool for the trust preferred securities included in the previous table at September 30, 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	95,310
I-PreTSL II	340,500		24,500	316,000	316,000
PreTSL XIX	644,881		182,150	462,731	148,500
PreTSL XX	552,238		174,500	377,738	99,500

Schedule of issuer specific information, amortized cost, fair value, unrealized gain or loss and other-than-temporary impairment recorded in earnings for the portfolio of non-agency collateralized mortgage obligations

The following table shows issuer specific information, amortized cost, fair value, unrealized gain or loss and other-than-temporary impairment recorded in earnings for the portfolio of non-agency CMOs at September 30, 2012 (in thousands):

								Total
						Impairment		impairment
						recorded in		recorded in
	Amortized		Fair	Unrealized		current period		prior period
Description	cost		value	gain/ (loss)		earnings		earnings
AMAC 2003-6 2A2	$	233	239	6		—		—
AMAC 2003-6 2A8	481		496	15		—		—
BOAMS 2005-11 1A8	965		1,081	116		—		(146	)
CWALT 2005-J14 A3	3,893		3,646	(247	)	(93	)	(1,007	)
CFSB 2003-17 2A2	469		478	9		—		—
WAMU 2003-S2 A4	363		370	7		—		—
WFMBS 2003-B A2	898		878	(20	)	—		—
	$	7,302	7,188	(114	)	(93	)	(1,153	)

Schedule of the 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 September 30, 2012 (in thousands):

		Total
		Amortized		Fair	Unrealized
Description	State	cost		value	losses		Rating
Cambridge Area JT Revenue	PA	$	595	594	(1	)	Not rated
		$	595	594	(1	)

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

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

	2012		2011
Beginning balance at July 1, (a)	$	16,620	15,952
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	93		—
Ending balance at September 30,	$	16,713	15,952

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

The table below shows a cumulative roll forward of credit losses recognized in earnings for debt securities held and not intended to be sold for the nine months ended (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	331		507
Ending balance at September 30,	$	16,713	15,952

(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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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	48,976			48,976			48,976
Other comprehensive income, net of tax of $(963) and $(233) for the three months ended September 30, 2012 and 2011 and $(2,359) and $(3,900) for the nine months ended September 30, 2012 and 2011, respectively	7,242				7,242		7,242
Total comprehensive income	56,218			48,976	7,242		56,218
Exercise of stock options	1,339	3	1,336
Exercise of stock options (in shares)		274,455
Stock compensation expense	5,685	13	4,521			1,151
Stock compensation expense (in shares)		1,273,949
Share repurchases	(170,732)	(143)	(170,589)
Share repurchases (in shares)		(14,267,153)
Dividends paid ($0.12 and $0.11 per share for the three months ended September 30, 2012 and 2011 and $0.36 and $0.32 per share for the nine months ended September 30, 2012 and 2011, respectively)	(33,183)			(33,183)
Balance at Sep. 30, 2011	1,166,777	976	659,432	538,882	(6,255)	(26,258)
Balance (in shares) at Sep. 30, 2011		97,576,368
Balance at Jun. 30, 2011	1,227,141	1,033	726,207	533,229	(6,689)	(26,639)
Balance (in shares) at Jun. 30, 2011		103,266,045
Comprehensive income:
Net income	16,720			16,720			16,720
Other comprehensive income, net of tax of $(963) and $(233) for the three months ended September 30, 2012 and 2011 and $(2,359) and $(3,900) for the nine months ended September 30, 2012 and 2011, respectively	434				434		434
Total comprehensive income	17,154			16,720	434		17,154
Exercise of stock options	599	1	598
Exercise of stock options (in shares)		145,487
Stock compensation expense	1,036	1	654			381
Share repurchases	(68,086)	(59)	(68,027)
Share repurchases (in shares)		(5,835,164)
Dividends paid ($0.12 and $0.11 per share for the three months ended September 30, 2012 and 2011 and $0.36 and $0.32 per share for the nine months ended September 30, 2012 and 2011, respectively)	(11,067)			(11,067)
Balance at Sep. 30, 2011	1,166,777	976	659,432	538,882	(6,255)	(26,258)
Balance (in shares) at Sep. 30, 2011		97,576,368
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	47,235			47,235			47,235
Other comprehensive income, net of tax of $(963) and $(233) for the three months ended September 30, 2012 and 2011 and $(2,359) and $(3,900) for the nine months ended September 30, 2012 and 2011, respectively	3,600				3,600		3,600
Total comprehensive income	50,835			47,235	3,600		50,835
Exercise of stock options	1,893	2	1,891
Exercise of stock options (in shares)		271,739
Stock compensation expense	3,531	3	2,379			1,149
Stock compensation expense (in shares)		263,377
Share repurchases	(2,206)	(2)	(2,204)
Share repurchases (in shares)		(183,780)
Dividends paid ($0.12 and $0.11 per share for the three months ended September 30, 2012 and 2011 and $0.36 and $0.32 per share for the nine months ended September 30, 2012 and 2011, respectively)	(34,331)			(34,331)
Balance at Sep. 30, 2012	1,174,626	978	661,589	556,502	(19,626)	(24,817)
Balance (in shares) at Sep. 30, 2012		97,844,382
Balance at Jun. 30, 2012	1,169,142	979	662,183	552,278	(21,106)	(25,192)
Balance (in shares) at Jun. 30, 2012		97,880,874
Comprehensive income:
Net income	15,693			15,693			15,693
Other comprehensive income, net of tax of $(963) and $(233) for the three months ended September 30, 2012 and 2011 and $(2,359) and $(3,900) for the nine months ended September 30, 2012 and 2011, respectively	1,480				1,480		1,480
Total comprehensive income	17,173			15,693	1,480		17,173
Exercise of stock options	898	1	897
Exercise of stock options (in shares)		147,288
Stock compensation expense	1,088		713			375
Share repurchases	(2,206)	(2)	(2,204)
Share repurchases (in shares)		(183,780)
Dividends paid ($0.12 and $0.11 per share for the three months ended September 30, 2012 and 2011 and $0.36 and $0.32 per share for the nine months ended September 30, 2012 and 2011, respectively)	(11,469)			(11,469)
Balance at Sep. 30, 2012	$ 1,174,626	$ 978	$ 661,589	$ 556,502	$ (19,626)	$ (24,817)
Balance (in shares) at Sep. 30, 2012		97,844,382

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CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (Parenthetical) (USD $) In Thousands, except Share data, unless otherwise specified	Sep. 30, 2012	Dec. 31, 2011
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
Marketable securities available-for-sale, amortized cost (in dollars)	$ 922,684	$ 885,408
Marketable securities held-to-maturity, fair value (in dollars)	$ 174,821	$ 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	97,844,382	97,493,046
Common stock, shares outstanding	97,844,382	97,493,046

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Earnings Per Share

9 Months Ended

Sep. 30, 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 stock options 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. Stock options to purchase 3,119,002 shares of common stock with a weighted average exercise price of $12.28 per share were outstanding during the quarter and nine months ended September 30, 2012 but were not included in the computation of diluted earnings per share for these periods because the options’ exercise price was greater than the average market price of the common shares of $11.98 and $12.17, respectively.  Stock options to purchase 2,636,398 shares of common stock with a weighted average exercise price of $12.32 per share were outstanding during the quarter and nine months ended September 30, 2011 but were not included in the computation of diluted earnings per share for these periods because the options’ exercise price was greater than the average market price of the common shares of $12.06 and $12.15, respectively.

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

	Quarter ended			Nine months ended
	September 30,			September 30,
	2012		2011	2012	2011
Reported net income	$	15,693	16,720	47,235	48,976
Weighted average common shares outstanding	94,422,878		96,918,016	94,277,362	101,866,461
Dilutive potential shares due to effect of stock options	187,778		206,312	314,040	402,466
Total weighted average common shares and dilutive potential shares	94,610,656		97,124,328	94,591,402	102,268,927
Basic earnings per share:	$	0.17	0.17	0.50	0.48
Diluted earnings per share:	$	0.17	0.17	0.50	0.48

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Document and Entity Information	9 Months Ended
	Sep. 30, 2012	Oct. 31, 2012
Document and Entity Information
Entity Registrant Name	Northwest Bancshares, Inc.
Entity Central Index Key	0001471265
Document Type	10-Q
Document Period End Date	Sep. 30, 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		97,635,138
Document Fiscal Year Focus	2012
Document Fiscal Period Focus	Q3

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

9 Months Ended

Sep. 30, 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 September 30,
	Pension benefits					Other post-retirement benefits
	2012			2011		2012	2011
Service cost	$	1,858		1,429		—	—
Interest cost	1,432			1,363		16	21
Expected return on plan assets	(1,948		)	(1,502	)	—	—
Amortization of prior service cost	(40		)	(40	)	—	—
Amortization of the net loss	690			169		13	13
Net periodic benefit cost	$	1,992		1,419		29	34

Components of net periodic benefit cost

	Nine months ended September 30,
	Pension benefits					Other post-retirement benefits
	2012			2011		2012	2011
Service cost	$	5,573		4,285		—	—
Interest cost	4,297			4,089		49	72
Expected return on plan assets	(5,844		)	(4,506	)	—	—
Amortization of prior service cost	(120		)	(120	)	—	—
Amortization of the net loss	2,070			507		38	39
Net periodic benefit cost	$	5,976		4,255		87	111

We made no contribution to our pension or other post-retirement benefit plans during the nine months ended September 30, 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		9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011
Interest income:
Loans receivable	$ 77,109	$ 80,562	$ 232,690	$ 241,012
Mortgage-backed securities	3,941	5,544	13,041	18,373
Taxable investment securities	577	684	1,585	1,676
Tax-free investment securities	2,223	2,848	6,987	8,914
Interest-earning deposits	364	393	1,217	1,289
Total interest income	84,214	90,031	255,520	271,264
Interest expense:
Deposits	10,207	14,958	34,335	46,494
Borrowed funds	8,013	8,061	23,824	24,039
Total interest expense	18,220	23,019	58,159	70,533
Net interest income	65,994	67,012	197,361	200,731
Provision for loan losses	6,915	8,057	18,165	23,668
Net interest income after provision for loan losses	59,079	58,955	179,196	177,063
Noninterest income:
Impairment losses on securities	(340)		(885)	(577)
Noncredit related losses on securities not expected to be sold (recognized in other comprehensive income)	247		554	70
Net impairment losses	(93)		(331)	(507)
Gain on sale of investments, net	260	152	260	201
Service charges and fees	8,772	8,499	25,899	26,748
Trust and other financial services income	2,122	2,063	6,256	6,158
Insurance commission income	1,480	1,796	4,801	4,966
Loss on real estate owned, net	(1,187)	(1,340)	(2,839)	(1,960)
Income from bank owned life insurance	1,148	1,938	3,372	4,820
Mortgage banking income	1,484	400	2,804	887
Other operating income	949	1,002	3,190	2,785
Total noninterest income	14,935	14,510	43,412	44,098
Noninterest expense:
Compensation and employee benefits	28,171	26,004	83,425	81,161
Premises and occupancy costs	5,498	5,658	16,729	17,499
Office operations	3,141	3,209	9,805	9,564
Processing expenses	6,340	5,896	18,541	17,350
Marketing expenses	1,830	2,788	7,695	6,855
Federal deposit insurance premiums	1,305	1,386	4,343	6,168
Professional services	1,939	1,238	5,136	3,783
Amortization of other intangible assets	219	475	793	1,445
Real estate owned expense	832	483	2,143	1,163
Other expenses	2,528	2,786	6,435	6,803
Total noninterest expense	51,803	49,923	155,045	151,791
Income before income taxes	22,211	23,542	67,563	69,370
Federal and state income taxes	6,518	6,822	20,328	20,394
Net income	$ 15,693	$ 16,720	$ 47,235	$ 48,976
Basic earnings per share (in dollars per share)	$ 0.17	$ 0.17	$ 0.50	$ 0.48
Diluted earnings per share (in dollars per share)	$ 0.17	$ 0.17	$ 0.50	$ 0.48

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Business Segments

9 Months Ended

Sep. 30, 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 business and personal demand, savings and time deposit accounts and business and personal loans, as well as insurance, brokerage and investment management and trust services.  The Consumer Finance segment, comprised of Northwest Consumer Discount Company, 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.  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 quarter ended:

	Community		Consumer
September 30, 2012 ($ in 000’s)	Banking		Finance	All other *		Consolidated
External interest income	$	78,386	5,513	315		84,214
Intersegment interest income	748		—	(748	)	—
Interest expense	16,881		748	591		18,220
Provision for loan losses	6,000		915	—		6,915
Noninterest income	14,412		509	14		14,935
Noninterest expense	48,484		3,120	199		51,803
Income tax expense (benefit)	6,442		507	(431	)	6,518
Net income	15,739		732	(778	)	15,693
Total assets	$	7,889,245	116,112	42,314		8,047,671

	Community		Consumer
September 30, 2011 ($ in 000’s)	Banking		Finance	All other *		Consolidated
External interest income	$	84,267	5,479	285		90,031
Intersegment interest income	770		—	(770	)	—
Interest expense	21,672		770	577		23,019
Provision for loan losses	7,300		757	—		8,057
Noninterest income	13,693		804	13		14,510
Noninterest expense	46,794		3,016	113		49,923
Income tax expense (benefit)	6,521		721	(420	)	6,822
Net income	16,443		1,019	(742	)	16,720
Total assets	$	7,838,335	115,084	35,924		7,989,343

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

At or for the nine months ended:

	Community		Consumer
September 30, 2012 ($ in 000’s)	Banking		Finance	All other *		Consolidated
External interest income	$	238,081	16,556	883		255,520
Intersegment interest income	2,234		—	(2,234	)	—
Interest expense	54,206		2,234	1,719		58,159
Provision for loan losses	15,750		2,415	—		18,165
Noninterest income	41,735		1,601	76		43,412
Noninterest expense	144,949		9,496	600		155,045
Income tax expense (benefit)	19,967		1,658	(1,297	)	20,328
Net income	47,178		2,354	(2,297	)	47,235
Total assets	$	7,889,245	116,112	42,314		8,047,671

	Community		Consumer
September 30, 2011 ($ in 000’s)	Banking		Finance	All other *		Consolidated
External interest income	$	254,403	16,111	750		271,264
Intersegment interest income	2,306		—	(2,306	)	—
Interest expense	66,875		2,306	1,352		70,533
Provision for loan losses	21,450		2,218	—		23,668
Noninterest income	42,230		1,829	39		44,098
Noninterest expense	142,227		9,058	506		151,791
Income tax expense (benefit)	19,782		1,809	(1,197	)	20,394
Net income	48,605		2,549	(2,178	)	48,976
Total assets	$	7,838,335	115,084	35,924		7,989,343

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

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Basis of Presentation and Informational Disclosures

9 Months Ended

Sep. 30, 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”), a Maryland corporation 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 in December 2009.  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 September 30, 2012, Northwest operated 166 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, which operates 52 offices in Pennsylvania, 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 quarter ended and nine months ended September 30, 2012 are not necessarily indicative of the results that may be expected for the year ending December 31, 2012.

Stock-Based Compensation

On May 23, 2012, we awarded employees 508,573 stock options and directors 64,800 stock options with an exercise price of $11.70 and a grant date fair value of $1.23 per stock option.  On May 23, 2012, we also awarded employees 239,077 restricted common shares and directors 24,300 restricted common shares with a grant date fair value of $11.64.  Awarded stock options and common shares vest over a ten-year period with the first vesting occurring on the grant date.  Stock-based compensation expense of $1.1 million and $1.0 million for the quarter ended September 30, 2012 and 2011, respectively, and $3.5 million and $5.7 million for the nine months ended September 30, 2012 and 2011, respectively, was recognized in compensation expense relating to our stock benefit plans.  At September 30, 2012 there was compensation expense of $5.8 million to be recognized for awarded but unvested stock options and $14.6 million for unvested restricted 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 September 30, 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 September 30, 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, 2011, 2010 and 2009.

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Business Segments (Tables)

9 Months Ended

Sep. 30, 2012

Business Segments

Financial information for reportable segments

At or for the quarter ended:

	Community		Consumer
September 30, 2012 ($ in 000’s)	Banking		Finance	All other *		Consolidated
External interest income	$	78,386	5,513	315		84,214
Intersegment interest income	748		—	(748	)	—
Interest expense	16,881		748	591		18,220
Provision for loan losses	6,000		915	—		6,915
Noninterest income	14,412		509	14		14,935
Noninterest expense	48,484		3,120	199		51,803
Income tax expense (benefit)	6,442		507	(431	)	6,518
Net income	15,739		732	(778	)	15,693
Total assets	$	7,889,245	116,112	42,314		8,047,671

	Community		Consumer
September 30, 2011 ($ in 000’s)	Banking		Finance	All other *		Consolidated
External interest income	$	84,267	5,479	285		90,031
Intersegment interest income	770		—	(770	)	—
Interest expense	21,672		770	577		23,019
Provision for loan losses	7,300		757	—		8,057
Noninterest income	13,693		804	13		14,510
Noninterest expense	46,794		3,016	113		49,923
Income tax expense (benefit)	6,521		721	(420	)	6,822
Net income	16,443		1,019	(742	)	16,720
Total assets	$	7,838,335	115,084	35,924		7,989,343

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

At or for the nine months ended:

	Community		Consumer
September 30, 2012 ($ in 000’s)	Banking		Finance	All other *		Consolidated
External interest income	$	238,081	16,556	883		255,520
Intersegment interest income	2,234		—	(2,234	)	—
Interest expense	54,206		2,234	1,719		58,159
Provision for loan losses	15,750		2,415	—		18,165
Noninterest income	41,735		1,601	76		43,412
Noninterest expense	144,949		9,496	600		155,045
Income tax expense (benefit)	19,967		1,658	(1,297	)	20,328
Net income	47,178		2,354	(2,297	)	47,235
Total assets	$	7,889,245	116,112	42,314		8,047,671

	Community		Consumer
September 30, 2011 ($ in 000’s)	Banking		Finance	All other *		Consolidated
External interest income	$	254,403	16,111	750		271,264
Intersegment interest income	2,306		—	(2,306	)	—
Interest expense	66,875		2,306	1,352		70,533
Provision for loan losses	21,450		2,218	—		23,668
Noninterest income	42,230		1,829	39		44,098
Noninterest expense	142,227		9,058	506		151,791
Income tax expense (benefit)	19,782		1,809	(1,197	)	20,394
Net income	48,605		2,549	(2,178	)	48,976
Total assets	$	7,838,335	115,084	35,924		7,989,343

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

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Disclosures About Fair Value of Financial Instruments

9 Months Ended

Sep. 30, 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 techniques based on whether the inputs to those valuation techniques are observable or unobservable.  This hierarchy gives the highest priority to quoted prices with readily available independent data in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable market inputs (Level 3).  When various inputs for measurement fall within different levels of the fair value hierarchy, the lowest level input that has a significant impact on fair value measurement is used.

Financial assets and liabilities are categorized based upon the following characteristics or inputs to the valuation techniques:

·Level 1 — Financial assets and liabilities for which inputs are observable and are obtained from reliable quoted prices for identical assets or liabilities in actively traded markets.  This is the most reliable fair value measurement and includes, for example, active exchange-traded equity securities.

·Level 2 — Financial assets and liabilities for which values are based on quoted prices in markets that are not active or for which values are based on similar assets or liabilities that are actively traded.  Level 2 also includes pricing models in which the inputs are corroborated by market data, for example, matrix pricing.

·Level 3 — Financial assets and liabilities for which values are based on prices or valuation techniques that require inputs that are both unobservable and significant to the overall fair value measurement.  Level 3 inputs include the following:

·Quotes from brokers or other external sources that are not considered binding;

·Quotes from brokers or other external sources where it cannot be determined that market participants would in fact transact for the asset or liability at the quoted price;

·Quotes and other information from brokers or other external sources where the inputs are not deemed observable.

We are responsible for the valuation process and as part of this process may use data from outside sources in establishing fair value.  We perform due diligence to understand the inputs used or how the data was calculated or derived.  We also corroborate the reasonableness of external inputs in the valuation process.

The carrying amounts reported in the consolidated statement of financial condition approximate fair value for the following financial instruments: cash on hand, interest-earning deposits in other institutions, federal funds sold and other short-term investments, accrued interest receivable, accrued interest payable, and marketable securities available-for-sale.

Marketable Securities

Where available, market values are based on quoted market prices, dealer quotes, and prices obtained from independent pricing services.

Debt securities — available for sale - Generally, debt securities are valued using pricing for similar securities, recently executed transactions and other pricing models utilizing observable inputs.  The valuation for most debt securities is classified as level 2.  Securities within level 2 include corporate bonds, municipal bonds, mortgage-backed securities and US government obligations.  Certain 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 are segregated for valuation purposes. Each loan pool is separately valued utilizing a discounted cash flow analysis. Projected monthly cash flows are discounted to present value using a market rate for comparable loans, which is not considered an exit price. Characteristics of comparable loans include remaining term, coupon interest, and estimated prepayment speeds. Delinquent loans are separately evaluated given the impact delinquency has on the projected future cash flow of the loan 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

Fixed rate advances are valued by comparing their contractual cost to the prevailing market cost.  The carrying amount of repurchase agreements approximates fair value.

Junior Subordinated Debentures

The fair value of junior subordinated debentures is calculated using the discounted cash flows at the prevailing rate of interest.

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 September 30, 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 financial instruments included in the consolidated statement of financial condition at September 30, 2012 and December 31, 2011:

	September 30, 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	$	638,068	638,068	638,068	—	—	688,297	688,297
Securities available-for-sale	951,879		951,879	20,068	922,981	8,830	908,349	908,349
Securities held-to-maturity	167,739		174,821	—	174,821	—	231,389	239,412
Loans receivable, net	5,657,456		5,982,671	14,152	—	5,968,519	5,480,381	5,839,674
Accrued interest receivable	25,324		25,324	25,324	—	—	24,599	24,599
FHLB Stock	46,834		46,834	—	—	—	48,935	48,935
Total financial assets	$	7,487,300	7,819,597	697,612	1,097,802	5,977,349	7,381,950	7,749,266
Financial liabilities:
Savings and checking accounts	$	3,862,772	3,862,772	3,862,772	—	—	3,495,508	3,495,508
Time deposits	1,961,984		2,004,067	—	—	2,004,067	2,284,817	2,329,451
Borrowed funds	855,552		914,459	160,019	—	754,440	827,925	899,547
Junior subordinated debentures	103,094		117,059	—	—	117,059	103,094	116,725
Cash flow hedges - swaps	13,932		13,932	—	13,932	—	13,637	13,637
Accrued interest payable	1,111		1,111	1,111	—	—	1,104	1,104
Total financial liabilities	$	6,798,445	6,913,400	4,023,902	13,932	2,875,566	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 September 30, 2012 and December 31, 2011.  There were no transfers of financial instruments between Level 1 and Level 2 during the nine months ended September 30, 2012.

The following table represents assets and liabilities measured at fair value on a recurring basis at September 30, 2012 (in thousands):

						Total
						assets at
	Level 1		Level 2		Level 3	fair value
Equity securities	$	20,068	—		—	20,068
Debt securities:
U.S. government and agencies	—		41		—	41
Government sponsored enterprises	—		124,354		—	124,354
States and political subdivisions	—		141,863		—	141,863
Corporate	—		11,465		8,830	20,295
Total debt securities	—		277,723		8,830	286,553
Residential mortgage-backed securities:
GNMA	—		42,438		—	42,438
FNMA	—		117,605		—	117,605
FHLMC	—		58,844		—	58,844
Non-agency	—		703		—	703
Collateralized mortgage obligations:
GNMA	—		28,960		—	28,960
FNMA	—		161,442		—	161,442
FHLMC	—		211,657		—	211,657
SBA	—		16,421		—	16,421
Non-agency	—		7,188		—	7,188
Total mortgage-backed securities	—		645,258		—	645,258
Interest rate swaps	—		(13,932	)	—	(13,932	)
Total assets	$	20,068	909,049		8,830	937,947

The following table represents assets and liabilities 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 debt securities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the periods indicated (in thousands):

	Quarter ended			Nine months ended
	September 30, 2012		September 30, 2011	September 30, 2012		September 30, 2011
Beginning balance	$	8,296	9,040	9,657		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	534		881	(827	)	712
Purchases	—		—	—		—
Sales	—		—	—		—
Transfers in to Level 3	—		—	—		—
Transfers out of Level 3	—		—	—		—
Ending balance	$	8,830	9,921	8,830		9,921

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 September 30, 2012 (in thousands):

					Total
					assets at
	Level 1		Level 2	Level 3	fair value
Loans measured for impairment	$	—	—	49,184	49,184
Real estate owned	—		—	29,291	29,291
Total assets	$	—	—	78,475	78,475

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.

The following table presents additional quantitative information about assets measured at fair value on a recurring and nonrecurring basis and for which we have utilized Level 3 inputs to determine fair value at September 30, 2012 (dollar amounts in thousands):

	Fair value		Valuation techniques	Significant unobservable inputs	Range (weighted average)
Debt securities	$	8,830	Discounted cash flow	Discount margin	0.35% to 2.10% (0.67)%
				Default rates	2.00%
				Prepayment speeds	1.00% annually
Loans measured for impairment	49,184		Appraisal value (1)	N/A	N/A
Real estate owned	29,291		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 fair 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

9 Months Ended

Sep. 30, 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):

	September 30,			December 31,
	2012			2011
Amortizable intangible assets:
Core deposit intangibles — gross	$	30,578		30,578
Acquisitions	—			—
Less: accumulated amortization	(30,056		)	(29,549	)
Core deposit intangibles — net	522			1,029
Customer and Contract intangible assets — gross	3,779			3,779
Less: accumulated amortization	(2,971		)	(2,685	)
Customer and Contract intangible assets — net	$	808		1,094

The following table shows the actual aggregate amortization expense for the quarter ended and nine months ended September 30, 2012 and 2011, 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 quarter ended September 30, 2012	$	219
For the quarter ended September 30, 2011	475
For the nine months ended September 30, 2012	793
For the nine months ended September 30, 2011	1,445
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	69
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 September 30, 2012	$	170,269	1,613	171,882

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

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Disclosures About Fair Value of Financial Instruments (Details 3) (Debt securities, USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011
Debt securities
Reconciliation of debt securities measured at fair value on a recurring basis using significant unobservable inputs (Level 3)
Balance at the beginning of the period	$ 8,296	$ 9,040	$ 9,657	$ 9,209
Total net realized investment gains/ (losses) and net change in unrealized appreciation/ (depreciation):
Included in other comprehensive income	534	881	(827)	712
Balance at the end of the period	$ 8,830	$ 9,921	$ 8,830	$ 9,921

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Investment securities and impairment of investment securities

9 Months Ended

Sep. 30, 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 September 30, 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	$	41	—	—		41
Debt issued by government sponsored enterprises:
Due in one year - five years	57,427		135	—		57,562
Due in five years - ten years	58,610		692	(11	)	59,291
Due after ten years	7,512		—	(11	)	7,501
Equity securities	13,020		7,133	(85	)	20,068
Municipal securities:
Due in one year - five years	7,626		229	—		7,855
Due in five years - ten years	21,377		832	—		22,209
Due after ten years	105,527		6,273	(1	)	111,799
Corporate debt issues:
Due after ten years	24,914		249	(4,868	)	20,295
Residential mortgage-backed securities:
Fixed rate pass-through	94,048		7,869	—		101,917
Variable rate pass-through	111,574		6,101	(2	)	117,673
Fixed rate non-agency CMOs	6,404		153	(247	)	6,310
Fixed rate agency CMOs	159,880		3,035	—		162,915
Variable rate non-agency CMOs	898		—	(20	)	878
Variable rate agency CMOs	253,826		1,975	(236	)	255,565
Total residential mortgage-backed securities	626,630		19,133	(505	)	645,258
Total marketable securities available-for-sale	$	922,684	34,676	(5,481	)	951,879

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 September 30, 2012 (in thousands):

			Gross	Gross
			unrealized	unrealized
	Amortized		holding	holding		Fair
	cost		gains	losses		value
Municipal securities:
Due in five years - ten years	$	3,679	167	—		3,846
Due after ten years	65,595		4,080	—		69,675
Residential mortgage-backed securities:
Fixed rate pass-through	18,478		1,145	—		19,623
Variable rate pass-through	7,101		5	—		7,106
Fixed rate agency CMOs	65,025		1,588	(53	)	66,560
Variable rate agency CMOs	7,861		150	—		8,011
Total residential mortgage-backed securities	98,465		2,888	(53	)	101,300
Total marketable securities held-to-maturity	$	167,739	7,135	(53	)	174,821

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 amortized cost has exceeded fair values, 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.  Certain investments are evaluated using our best estimate of future cash flows. If the estimate of cash flows indicates that an adverse change has occurred, other-than-temporary impairment would be recognized for the amount of the unrealized 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 September 30, 2012 (in thousands):

	Less than 12 months				12 months or more			Total
			Unrealized			Unrealized			Unrealized
	Fair value		loss		Fair value	loss		Fair value	loss
Government sponsored enterprises	$	10,566	(11	)	7,502	(11	)	18,068	(22	)
Municipal securities	—		—		594	(1	)	594	(1	)
Corporate issues	850		(38	)	15,330	(4,830	)	16,180	(4,868	)
Equity securities	539		(83	)	17	(2	)	556	(85	)
Residential mortgage-backed securities - non-agency	—		—		4,524	(267	)	4,524	(267	)
Residential mortgage-backed securities - agency	59,366		(268	)	8,116	(23	)	67,482	(291	)
Total temporarily impaired securities	$	71,321	(400	)	36,083	(5,134	)	107,404	(5,534	)

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
Government sponsored emterprises	$	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 September 30, 2012, we had seven investments with a total amortized cost of $20.1 million and total fair value of $15.3 million, where the amortized cost exceeded the carrying value for more than 12 months.  These investments were three 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 all cases, the underlying issuer was “well-capitalized” for regulatory purposes. None of the issuers have deferred interest payments or announced the intention to defer interest payments.  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 three investments was considered noncredit related.  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 noncredit related.  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, amortized cost, fair value and ratings information for our portfolio of corporate securities that have an unrealized loss, both greater than and less than twelve months, at September 30, 2012 (in thousands):

		Total
		Amortized		Fair	Unrealized		Moody’s/ Fitch
Description	Class	cost		value	losses		ratings
Bank Boston Capital Trust (1)	N/A	$	990	725	(265	)	Ba2/ BB
Huntington Capital Trust	N/A	1,426		1,060	(366	)	Baa3/ BB
Commercebank Capital Trust	N/A	888		850	(38	)	Not rated
Ocean Shore Capital Trust	N/A	866		800	(66	)	Not rated
I-PreTSL I	Mezzanine	1,500		511	(989	)	Not rated/ CCC
I-PreTSL II	Mezzanine	1,500		608	(892	)	Not rated/ B
PreTSL XIX	Senior A-1	8,486		6,939	(1,547	)	Baa2/ BBB
PreTSL XX	Senior A-1	5,392		4,687	(705	)	Ba2/ BB
		$	21,048	16,180	(4,868	)

(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 September 30, 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	95,310
I-PreTSL II	340,500		24,500	316,000	316,000
PreTSL XIX	644,881		182,150	462,731	148,500
PreTSL XX	552,238		174,500	377,738	99,500

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 mortgage-backed securities quarterly for impairment.  As of September 30, 2012, we believe that the impairment within our portfolio of agency mortgage-backed securities is noncredit related.  As of September 30, 2012, we had seven non-agency CMOs with a total amortized cost of $7.3 million and a total fair value of $7.2 million, including two non-agency CMOs with an amortized cost of $4.8 million and a fair value of $4.5 million, where the amortized cost exceeded the carrying value for more than 12 months.  During the quarter and nine months ended September 30, 2012, we recognized other-than-temporary credit related impairment of $93,000 and $331,000, respectively on one of these securities.  After recognizing the other-than-temporary impairment, our amortized cost on this investment was $3.9 million, with a fair value of $3.6 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.  After this review, we determined that the remaining impairment on these securities was noncredit related.

The following table shows issuer specific information, amortized cost, fair value, unrealized gain or loss and other-than-temporary impairment recorded in earnings for the portfolio of non-agency CMOs at September 30, 2012 (in thousands):

								Total
						Impairment		impairment
						recorded in		recorded in
	Amortized		Fair	Unrealized		current period		prior period
Description	cost		value	gain/ (loss)		earnings		earnings
AMAC 2003-6 2A2	$	233	239	6		—		—
AMAC 2003-6 2A8	481		496	15		—		—
BOAMS 2005-11 1A8	965		1,081	116		—		(146	)
CWALT 2005-J14 A3	3,893		3,646	(247	)	(93	)	(1,007	)
CFSB 2003-17 2A2	469		478	9		—		—
WAMU 2003-S2 A4	363		370	7		—		—
WFMBS 2003-B A2	898		878	(20	)	—		—
	$	7,302	7,188	(114	)	(93	)	(1,153	)

Municipal Securities

As of September 30, 2012, we had one Pennsylvania municipal security with a total amortized cost of $595,000 and a total fair value of $594,000, where amortized cost 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 amortized cost.  When an investment’s fair value is below 80% of the amortized cost 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.  At September 30, 2012, we have determined that all of the impairment in our municipal securities portfolio is noncredit related.

The following table provides information for our portfolio of municipal securities that have unrealized losses for greater than 12 months at September 30, 2012 (in thousands):

		Total
		Amortized		Fair	Unrealized
Description	State	cost		value	losses		Rating
Cambridge Area JT Revenue	PA	$	595	594	(1	)	Not rated
		$	595	594	(1	)

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 for the quarter ended (in thousands):

	2012		2011
Beginning balance at July 1, (a)	$	16,620	15,952
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	93		—
Ending balance at September 30,	$	16,713	15,952

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

The table below shows a cumulative roll forward of credit losses recognized in earnings for debt securities held and not intended to be sold for the nine months ended (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	331		507
Ending balance at September 30,	$	16,713	15,952

(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

9 Months Ended

Sep. 30, 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 September 30, 2012 and December 31, 2011 (in thousands):

	September 30,			December 31,
	2012			2011
Personal Banking:
Residential mortgage loans	$	2,446,034		2,414,992
Home equity loans	1,100,879			1,084,786
Other consumer loans	235,693			245,689
Total Personal Banking	3,782,606			3,745,467
Business Banking:
Commercial real estate	1,603,774			1,481,127
Commercial loans	440,579			408,462
Total Business Banking	2,044,353			1,889,589
Total loans receivable, gross	5,826,959			5,635,056
Deferred loan fees	(2,624		)	(4,752	)
Allowance for loan losses	(71,177		)	(71,138	)
Undisbursed loan proceeds:
Residential mortgage loans	(19,134		)	(12,874	)
Commercial real estate	(42,808		)	(45,360	)
Commercial loans	(33,760		)	(20,551	)
Total loans receivable, net	$	5,657,456		5,480,381

The following table provides information related to the allowance for loan losses by portfolio segment and by class of financing receivable for the quarter ended September 30, 2012 (in thousands):

	Balance June 30, 2012		Current period provision		Charge-offs		Recoveries	Balance September 30, 2012
Personal Banking:
Residential mortgage loans	$	7,997	1,440		(1,197	)	121	8,361
Home equity loans	8,634		710		(1,268	)	42	8,118
Other consumer loans	4,665		1,073		(1,536	)	579	4,781
Total Personal Banking	21,296		3,223		(4,001	)	742	21,260
Business Banking:
Commercial real estate loans	34,781		538		(1,385	)	403	34,337
Commercial loans	9,431		3,401		(1,641	)	34	11,225
Total Business Banking	44,212		3,939		(3,026	)	437	45,562
Unallocated	4,602		(247	)	—		—	4,355
Total	$	70,110	6,915		(7,027	)	1,179	71,177

The following table provides information related to the allowance for loan losses by portfolio segment and by class of financing receivable for the quarter ended September 30, 2011 (in thousands):

	Balance June 30, 2011		Current period provision		Charge-offs		Recoveries	Balance September 30, 2011
Personal Banking:
Residential mortgage loans	$	8,463	707		(634	)	75	8,611
Home equity loans	7,699		1,465		(588	)	20	8,596
Other consumer loans	5,144		1,299		(1,307	)	277	5,413
Total Personal Banking	21,306		3,471		(2,529	)	372	22,620
Business Banking:
Commercial real estate loans	31,690		3,188		(3,675	)	190	31,393
Commercial loans	17,963		1,620		(4,791	)	129	14,921
Total Business Banking	49,653		4,808		(8,466	)	319	46,314
Unallocated	4,496		(222	)	—		—	4,274
Total	$	75,455	8,057		(10,995	)	691	73,208

The following table provides information related to the allowance for loan losses by portfolio segment and by class of financing receivable for the nine months ended September 30, 2012 (in thousands):

	Balance December 31, 2011		Current period provision		Charge-offs		Recoveries	Balance September 30, 2012
Personal Banking:
Residential mortgage loans	$	8,482	3,017		(3,459	)	321	8,361
Home equity loans	8,687		2,078		(2,749	)	102	8,118
Other consumer loans	5,325		2,619		(4,327	)	1,164	4,781
Total Personal Banking	22,494		7,714		(10,535	)	1,587	21,260
Business Banking:
Commercial real estate loans	32,148		6,631		(5,817	)	1,375	34,337
Commercial loans	12,080		3,881		(5,009	)	273	11,225
Total Business Banking	44,228		10,512		(10,826	)	1,648	45,562
Unallocated	4,416		(61	)	—		—	4,355
Total	$	71,138	18,165		(21,361	)	3,235	71,177

The following table provides information related to the allowance for loan losses by portfolio segment and by class of financing receivable for the nine months ended September 30, 2011 (in thousands):

	Balance December 31, 2010		Current period provision		Charge-offs		Recoveries	Balance September 30, 2011
Personal Banking:
Residential mortgage loans	$	6,854	4,190		(2,668	)	235	8,611
Home equity loans	7,675		4,586		(3,736	)	71	8,596
Other consumer loans	5,810		2,437		(3,816	)	982	5,413
Total Personal Banking	20,339		11,213		(10,220	)	1,288	22,620
Business Banking:
Commercial real estate loans	35,832		3,092		(8,220	)	689	31,393
Commercial loans	15,770		9,560		(10,706	)	297	14,921
Total Business Banking	51,602		12,652		(18,926	)	986	46,314
Unallocated	4,471		(197	)	—		—	4,274
Total	$	76,412	23,668		(29,146	)	2,274	73,208

The following table provides information related to the loan portfolio by portfolio segment and by class of financing receivable at September, 30, 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:
Residential mortgage loans	$	2,424,276	8,361	24,476	807	3,545
Home equity loans	1,100,879		8,118	9,365	—	630
Other consumer loans	235,693		4,781	1,494	—	—
Total Personal Banking	3,760,848		21,260	35,335	807	4,175
Business Banking:
Commercial real estate loans	1,560,966		34,337	61,632	—	44,996
Commercial loans	406,819		11,225	23,805	—	37,154
Total Business Banking	1,967,785		45,562	85,437	—	82,150
Total	$	5,728,633	66,822	120,772	807	86,325

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:
Residential 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 geographical and delinquency information related to the loan portfolio by portfolio segment and by class of financing receivable at September, 30, 2012 (in thousands):

	Pennsylvania		(1)		New York	(1)		Ohio	(1)		Maryland	(1)		Other	(1)		Total
Recorded investment in loans receivable:
Personal Banking:
Residential mortgage loans	$	2,028,697	83.6	%	157,552	6.5	%	19,261	0.8	%	156,528	6.5	%	62,238	2.6	%	2,424,276	100.0	%
Home equity loans	937,206		85.2	%	113,844	10.3	%	11,186	1.0	%	30,919	2.8	%	7,724	0.7	%	1,100,879	100.0	%
Other consumer loans	217,323		92.2	%	10,673	4.5	%	2,981	1.3	%	1,290	0.5	%	3,426	1.5	%	235,693	100.0	%
Total Personal Banking	3,183,226		84.6	%	282,069	7.5	%	33,428	0.9	%	188,737	5.0	%	73,388	2.0	%	3,760,848	100.0	%
Business Banking:
Commercial real estate loans	863,722		55.3	%	438,955	28.1	%	36,185	2.3	%	142,877	9.2	%	79,227	5.1	%	1,560,966	100.0	%
Commercial loans	301,161		74.0	%	47,915	11.8	%	11,452	2.8	%	26,784	6.6	%	19,507	4.8	%	406,819	100.0	%
Total Business Banking	1,164,883		59.3	%	486,870	24.7	%	47,637	2.4	%	169,661	8.6	%	98,734	5.0	%	1,967,785	100.0	%
Total	$	4,348,109	75.9	%	768,939	13.4	%	81,065	1.4	%	358,398	6.3	%	172,122	3.0	%	5,728,633	100.0	%

(1) Percentage of total loans receivable per state by class of financing receivable.

	Pennsylvania		(2)		New York	(2)		Ohio	(2)		Maryland	(2)		Other	(2)		Total
Loans 90 or more days delinquent:
Personal Banking:
Residential mortgage loans	$	15,856	0.8	%	1,292	0.8	%	231	1.2	%	4,373	2.8	%	2,724	4.4	%	24,476	1.0	%
Home equity loans	5,811		0.6	%	1,561	1.4	%	131	1.2	%	1,486	4.8	%	376	4.9	%	9,365	0.9	%
Other consumer loans	1,452		0.7	%	39	0.4	%	—	0.0	%	—	0.0	%	3	0.1	%	1,494	0.6	%
Total Personal Banking	23,119		0.7	%	2,892	1.0	%	362	1.1	%	5,859	3.1	%	3,103	4.2	%	35,335	0.9	%
Business Banking:
Commercial real estate loans	16,078		1.9	%	6,364	1.4	%	—	0.0	%	5,236	3.7	%	7,552	9.5	%	35,230	2.3	%
Commercial loans	5,305		1.8	%	—	0.0	%	16	0.1	%	1,724	6.4	%	2,819	14.5	%	9,864	2.4	%
Total Business Banking	21,383		1.8	%	6,364	1.3	%	16	0.0	%	6,960	4.1	%	10,371	10.5	%	45,094	2.3	%
Total	$	44,502	1.0	%	9,256	1.2	%	378	0.5	%	12,819	3.6	%	13,474	7.8	%	80,429	1.4	%

(2) Percentage of loans 90 or more days delinquent in that state by class of financing receivable.

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

	Pennsylvania		(1)		New York	(1)		Ohio	(1)		Maryland	(1)		Other	(1)		Total
Recorded investment in loans receivable:
Personal Banking:
Residential mortgage loans	$	1,978,512	82.5	%	159,389	6.6	%	19,895	0.8	%	168,247	7.0	%	71,323	3.1	%	2,397,366	100.0	%
Home equity loans	925,368		85.3	%	104,194	9.6	%	11,677	1.1	%	33,816	3.1	%	9,731	0.9	%	1,084,786	100.0	%
Other consumer loans	225,827		91.9	%	11,191	4.6	%	3,022	1.2	%	1,417	0.6	%	4,232	1.7	%	245,689	100.0	%
Total Personal Banking	3,129,707		84.0	%	274,774	7.4	%	34,594	0.9	%	203,480	5.5	%	85,286	2.2	%	3,727,841	100.0	%
Business Banking:
Commercial real estate loans	849,702		59.2	%	356,868	24.9	%	35,882	2.5	%	114,839	8.0	%	78,476	5.4	%	1,435,767	100.0	%
Commercial loans	258,775		66.7	%	56,128	14.5	%	10,072	2.6	%	25,942	6.7	%	36,994	9.5	%	387,911	100.0	%
Total Business Banking	1,108,477		60.7	%	412,996	22.6	%	45,954	2.5	%	140,781	7.7	%	115,470	6.5	%	1,823,678	100.0	%
Total	$	4,238,184	76.3	%	687,770	12.4	%	80,548	1.5	%	344,261	6.2	%	200,756	3.6	%	5,551,519	100.0	%

(1) Percentage of total loans receivable per state by class of financing receivable.

	Pennsylvania		(2)		New York	(2)		Ohio	(2)		Maryland	(2)		Other	(2)		Total
Loans 90 or more days delinquent:
Personal Banking:
Residential mortgage loans	$	16,971	0.9	%	1,358	0.9	%	305	1.5	%	4,436	2.6	%	5,151	7.2	%	28,221	1.2	%
Home equity loans	6,559		0.7	%	1,031	1.0	%	23	0.2	%	1,496	4.4	%	451	4.6	%	9,560	0.9	%
Other consumer loans	2,537		1.1	%	54	0.5	%	23	0.8	%	—	0.0	%	53	1.3	%	2,667	1.1	%
Total Personal Banking	26,067		0.8	%	2,443	0.9	%	351	1.0	%	5,932	2.9	%	5,655	6.6	%	40,448	1.1	%
Business Banking:
Commercial real estate loans	17,753		2.1	%	8,625	2.4	%	88	0.2	%	6,573	5.7	%	11,564	14.7	%	44,603	3.1	%
Commercial loans	5,075		2.0	%	281	0.5	%	—	0.0	%	2,514	9.7	%	2,915	7.9	%	10,785	2.8	%
Total Business Banking	22,828		2.1	%	8,906	2.2	%	88	0.2	%	9,087	6.5	%	14,479	12.5	%	55,388	3.0	%
Total	$	48,895	1.2	%	11,349	1.7	%	439	0.5	%	15,019	4.4	%	20,134	10.0	%	95,836	1.7	%

(2) Percentage of loans 90 or more days delinquent in that state 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 nine months ended September 30, 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:
Residential mortgage loans	$	24,476	—	—	2,434	26,910	27,248	495
Home equity loans	9,365		—	—	500	9,865	9,776	212
Other consumer loans	1,494		—	—	—	1,494	1,853	28
Total Personal Banking	35,335		—	—	2,934	38,269	38,877	735
Business Banking:
Commercial real estate loans	35,230		26,402	33,593	15,335	110,560	97,340	2,809
Commercial loans	9,864		13,941	18,963	10,031	52,799	52,327	1,409
Total Business Banking	45,094		40,343	52,556	25,366	163,359	149,667	4,218
Total	$	80,429	40,343	52,556	28,300	201,628	188,544	4,953

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:
Residential 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 September 30, 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:
Residential mortgage loans	$	2,420,731	3,545	3,545	886	—
Home equity loans	1,100,249		630	630	174	—
Other consumer loans	235,693		—	—	—	—
Total Personal Banking	3,756,673		4,175	4,175	1,060	—
Business Banking:
Commercial real estate loans	1,504,183		56,783	31,220	5,721	25,563
Commercial loans	374,693		32,126	21,894	1,324	10,232
Total Business Banking	1,878,876		88,909	53,114	7,045	35,795
Total	$	5,635,549	93,084	57,289	8,105	35,795

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:
Residential 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 nine months ended September 30, 2012, two commercial real estate loan TDRs with combined balances of $554,000 were charged off and three commercial loan TDRs with combined balances of $787,000 were 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 quarter ended September 30, 2012					For the nine months ended September 30, 2012
	Number of contracts	Recorded investment at the time of modification		Current recorded investment	Current allowance	Number of contracts	Recorded investment at the time of modification		Current recorded investment	Current allowance
Troubled debt restructurings:
Personal Banking:
Residential mortgage loans	19	$	3,422	2,739	729	19	$	3,422	2,739	729
Home equity loans	7	724		630	174	7	724		630	174
Other consumer loans	—	—		—	—	—	—		—	—
Total Personal Banking	26	4,146		3,369	903	26	4,146		3,369	903
Business Banking:
Commercial real estate loans	25	6,294		6,102	716	35	9,267		9,014	910
Commercial loans	28	7,008		6,778	228	41	20,586		19,159	746
Total Business Banking	53	13,302		12,880	944	76	29,853		28,173	1,656
Total	79	$	17,448	16,249	1,847	102	$	33,999	31,542	2,559
Troubled debt restructurings that subsequently defaulted:
Personal Banking:
Residential mortgage loans	—	$	—	—	—	1	$	449	361	117
Home equity loans	—	—		—	—	—	—		—	—
Other consumer loans	—	—		—	—	—	—		—	—
Total Personal Banking	—	—		—	—	1	449		361	117
Business Banking:
Commercial real estate loans	1	230		230	23	4	1,381		1,313	81
Commercial loans	8	1,830		819	82	8	1,830		819	82
Total Business Banking	9	2,060		1,049	105	12	3,211		2,132	163
Total	9	$	2,060	1,049	105	13	$	3,660	2,493	280

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 quarter ended September 30, 2011					For the nine months ended September 30, 2011
	Number of contracts	Recorded investment at the time of modification		Current recorded investment	Current allowance	Number of contracts	Recorded investment at the time of modification		Current recorded investment	Current allowance
Troubled debt restructurings:
Personal Banking:
Residential mortgage loans	1	$	445	445	127	2	$	894	806	244
Home equity loans	—	—		—	—	—	—		—	—
Other consumer loans	—	—		—	—	—	—		—	—
Total Personal Banking	1	445		445	127	2	894		806	244
Business Banking:
Commercial real estate loans	4	10,168		10,126	1,013	12	13,642		13,331	1,279
Commercial loans	2	2,382		2,382	211	19	20,944		11,380	393
Total Business Banking	6	12,550		12,508	1,224	31	34,586		24,711	1,672
Total	7	$	12,995	12,953	1,351	33	$	35,480	25,517	1,916
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	1	500		496	50	4	1,501		960	251
Commercial loans	1	437		255	—	2	9,740		9,123	887
Total Business Banking	2	937		751	50	6	11,241		10,083	1,138
Total	2	$	937	751	50	6	$	11,241	10,083	1,138

The following table provides information related to loan delinquencies at September 30, 2012 (in thousands):

	30-59 Days delinquent		60-89 Days delinquent	90 Days or greater delinquent	Total delinquency	Current	Recorded investment in loans receivable
Personal Banking:
Residential mortgage loans	$	5,971	7,621	24,476	38,068	2,386,208	2,424,276
Home equity loans	5,027		2,116	9,365	16,508	1,084,371	1,100,879
Other consumer loans	4,470		1,424	1,494	7,388	228,305	235,693
Total Personal Banking	15,468		11,161	35,335	61,964	3,698,884	3,760,848
Business Banking:
Commercial real estate loans	18,512		2,544	35,230	56,286	1,504,680	1,560,966
Commercial loans	791		1,855	9,864	12,510	394,309	406,819
Total Business Banking	19,303		4,399	45,094	68,796	1,898,989	1,967,785
Total	$	34,771	15,560	80,429	130,760	5,597,873	5,728,633

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	Recorded investment in loans receivable
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: The primary indicator of credit quality for Personal Banking loans is delinquency status and the primary indicators of credit quality for Business Banking loans are delinquency status and our internal loan risk rating.  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 September 30, 2012 (in thousands):

	Pass		Special mention	Substandard	Doubtful	Loss	Recorded investment in loans receivable
Personal Banking:
Residential mortgage loans	$	2,403,993	—	18,910	16	1,357	2,424,276
Home equity loans	1,091,530		—	9,349	—	—	1,100,879
Other consumer loans	234,765		—	928	—	—	235,693
Total Personal Banking	3,730,288		—	29,187	16	1,357	3,760,848
Business Banking:
Commercial real estate loans	1,327,799		81,854	147,063	4,250	—	1,560,966
Commercial loans	326,229		15,415	61,747	3,428	—	406,819
Total Business Banking	1,654,028		97,269	208,810	7,678	—	1,967,785
Total	$	5,384,316	97,269	237,997	7,694	1,357	5,728,633

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	Recorded investment in loans receivable
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

9 Months Ended

Sep. 30, 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 September 30, 2012, the maximum potential amount of future payments we could be required to make under these standby letters of credit was $70.2 million, of which $69.2 million is fully collateralized.  At September 30, 2012, we had a liability, which represents deferred income, of $973,000 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 the Company's Junior Subordinated Deferrable Interest Debentures (Trust Preferred Securities) and Interest Rate Swaps (Details) (USD $)					9 Months Ended			9 Months Ended			1 Months Ended				1 Months Ended
	Sep. 30, 2012 item	Dec. 31, 2011	Sep. 30, 2012 Interest rate swap agreements item	Sep. 30, 2012 Northwest Bancorp Capital Trust III Interest rate swap agreements item	Sep. 30, 2012 Northwest Bancorp Capital Trust III Swap 1 Interest rate swap agreements Y	Sep. 30, 2012 Northwest Bancorp Capital Trust III Swap 2 Interest rate swap agreements Y	Sep. 30, 2012 Northwest Bancorp Statutory Trust IV Interest rate swap agreements item	Sep. 30, 2012 Northwest Bancorp Statutory Trust IV Swap 3 Interest rate swap agreements Y	Sep. 30, 2012 Northwest Bancorp Statutory Trust IV Swap 4 Interest rate swap agreements Y	Sep. 30, 2012 Trust-Preferred Securities Y	Dec. 31, 2006 Trust-Preferred Securities Northwest Bancorp Capital Trust III	Sep. 30, 2012 Trust-Preferred Securities Northwest Bancorp Capital Trust III	Dec. 05, 2006 Trust-Preferred Securities Northwest Bancorp Capital Trust III	Sep. 30, 2012 Trust-Preferred Securities Northwest Bancorp Capital Trust III Swap 1	Dec. 31, 2006 Trust-Preferred Securities Northwest Bancorp Statutory Trust IV	Sep. 30, 2012 Trust-Preferred Securities Northwest Bancorp Statutory Trust IV	Dec. 15, 2006 Trust-Preferred Securities Northwest Bancorp Statutory Trust IV	Sep. 30, 2012 Trust-Preferred Securities Northwest Bancorp Statutory Trust IV Swap 4
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						$ 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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Mortgage Loan Servicing (Details) (MSRs, USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011
Servicing rights
Balance at the beginning of the period	$ 3,503	$ 4,842	$ 3,655	$ 5,969
Additions/ (reductions)	438	510	1,780	1,145
Amortization	(553)	(854)	(2,047)	(2,616)
Balance at the end of the period	3,388	4,498	3,388	4,498
Valuation Allowance
Balance at the beginning of the period	84
Additions/ (reductions)	(84)
Net Carrying Value and Fair Value
Balance at the beginning of the period	3,419	4,842	3,655	5,969
Additions/ (reductions)	522	510	1,780	1,145
Amortization	(553)	(854)	(2,047)	(2,616)
Balance at the end of the period	3,388	4,498	3,388	4,498
Additional information about the inputs used to determine the fair value of mortgage servicing right
Variable rate basis of loan receivable			5 year LIBOR
Weighted Average
Additional information about the inputs used to determine the fair value of mortgage servicing right
Forward yield curve (as a percent)			0.80%	1.30%
Prepayment rates (as a percent)			20.00%	20.60%
Annual service cost per loan			$ 67	$ 67
Average life expectancy			52 months	49 months
Option adjusted spread			800.00%
Discount rate (as a percent)				10.50%

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Business Segments (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012 segment	Sep. 30, 2011	Dec. 31, 2011
Business Segments
Number of reportable business segments			2
Business Segments
External interest income	$ 84,214	$ 90,031	$ 255,520	$ 271,264
Interest expense	18,220	23,019	58,159	70,533
Provision for loan losses	6,915	8,057	18,165	23,668
Noninterest income	14,935	14,510	43,412	44,098
Noninterest expense	51,803	49,923	155,045	151,791
Income tax expenses (benefit)	6,518	6,822	20,328	20,394
Net income	15,693	16,720	47,235	48,976
Total assets	8,047,671	7,989,343	8,047,671	7,989,343	7,957,705
Community Banking
Business Segments
External interest income	78,386	84,267	238,081	254,403
Intersegment interest income	748	770	2,234	2,306
Interest expense	16,881	21,672	54,206	66,875
Provision for loan losses	6,000	7,300	15,750	21,450
Noninterest income	14,412	13,693	41,735	42,230
Noninterest expense	48,484	46,794	144,949	142,227
Income tax expenses (benefit)	6,442	6,521	19,967	19,782
Net income	15,739	16,443	47,178	48,605
Total assets	7,889,245	7,838,335	7,889,245	7,838,335
Community Banking | Business Intersegment, Eliminations
Business Segments
Intersegment interest income	748	770	2,234	2,306
Consumer Finance
Business Segments
External interest income	5,513	5,479	16,556	16,111
Interest expense	748	770	2,234	2,306
Provision for loan losses	915	757	2,415	2,218
Noninterest income	509	804	1,601	1,829
Noninterest expense	3,120	3,016	9,496	9,058
Income tax expenses (benefit)	507	721	1,658	1,809
Net income	732	1,019	2,354	2,549
Total assets	116,112	115,084	116,112	115,084
All Other
Business Segments
External interest income	315	285	883	750
Intersegment interest income	(748)	(770)	(2,234)	(2,306)
Interest expense	591	577	1,719	1,352
Noninterest income	14	13	76	39
Noninterest expense	199	113	600	506
Income tax expenses (benefit)	(431)	(420)	(1,297)	(1,197)
Net income	(778)	(742)	(2,297)	(2,178)
Total assets	42,314	35,924	42,314	35,924
All Other | Business Intersegment, Eliminations
Business Segments
Intersegment interest income	$ (738)	$ (770)	$ (2,234)	$ (2,306)

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Loans receivable (Details 9) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2012	Dec. 31, 2011
Credit quality indicators
Total loans	$ 5,728,633	$ 5,551,519
Pass
Credit quality indicators
Total loans	5,384,316	5,202,458
Special Mention
Credit quality indicators
Total loans	97,269	99,868
Substandard
Credit quality indicators
Total loans	237,997	242,015
Doubtful
Credit quality indicators
Total loans	7,694	5,941
Loss
Credit quality indicators
Total loans	1,357	1,237
Personal Banking
Credit quality indicators
Total loans	3,760,848	3,727,841
Personal Banking | Pass
Credit quality indicators
Total loans	3,730,288	3,692,278
Personal Banking | Substandard
Credit quality indicators
Total loans	29,187	34,315
Personal Banking | Doubtful
Credit quality indicators
Total loans	16	11
Personal Banking | Loss
Credit quality indicators
Total loans	1,357	1,237
Personal Banking | Residential mortgage loans
Credit quality indicators
Total loans	2,424,276	2,397,366
Personal Banking | Residential mortgage loans | Pass
Credit quality indicators
Total loans	2,403,993	2,373,275
Personal Banking | Residential mortgage loans | Substandard
Credit quality indicators
Total loans	18,910	22,843
Personal Banking | Residential mortgage loans | Doubtful
Credit quality indicators
Total loans	16	11
Personal Banking | Residential mortgage loans | Loss
Credit quality indicators
Total loans	1,357	1,237
Personal Banking | Home equity loans
Credit quality indicators
Total loans	1,100,879	1,084,786
Personal Banking | Home equity loans | Pass
Credit quality indicators
Total loans	1,091,530	1,074,512
Personal Banking | Home equity loans | Substandard
Credit quality indicators
Total loans	9,349	10,274
Personal Banking | Other consumer loans
Credit quality indicators
Total loans	235,693	245,689
Personal Banking | Other consumer loans | Pass
Credit quality indicators
Total loans	234,765	244,491
Personal Banking | Other consumer loans | Substandard
Credit quality indicators
Total loans	928	1,198
Business Banking
Credit quality indicators
Total loans	1,967,785	1,823,678
Business Banking | Pass
Credit quality indicators
Total loans	1,654,028	1,510,180
Business Banking | Special Mention
Credit quality indicators
Total loans	97,269	99,868
Business Banking | Substandard
Credit quality indicators
Total loans	208,810	207,700
Business Banking | Doubtful
Credit quality indicators
Total loans	7,678	5,930
Business Banking | Commercial real estate
Credit quality indicators
Total loans	1,560,966	1,435,767
Business Banking | Commercial real estate | Pass
Credit quality indicators
Total loans	1,327,799	1,211,583
Business Banking | Commercial real estate | Special Mention
Credit quality indicators
Total loans	81,854	75,981
Business Banking | Commercial real estate | Substandard
Credit quality indicators
Total loans	147,063	144,947
Business Banking | Commercial real estate | Doubtful
Credit quality indicators
Total loans	4,250	3,256
Business Banking | Commercial loans
Credit quality indicators
Total loans	406,819	387,911
Business Banking | Commercial loans | Pass
Credit quality indicators
Total loans	326,229	298,597
Business Banking | Commercial loans | Special Mention
Credit quality indicators
Total loans	15,415	23,887
Business Banking | Commercial loans | Substandard
Credit quality indicators
Total loans	61,747	62,753
Business Banking | Commercial loans | Doubtful
Credit quality indicators
Total loans	$ 3,428	$ 2,674

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

9 Months Ended

Sep. 30, 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 distri-butions 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 September 30, 2012, $14.5 million was pledged as collateral to the counterparty.

At September 30, 2012, the fair value of the swap agreements was $(13.9) 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 September 30, 2012 and December 31, 2011 (in thousands):

	September 30,		December 31,
	2012		2011
Fair value	$	13,932	13,637
Notional amount	100,000		100,000
Collateral posted	14,455		13,855

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Goodwill and Other Intangible Assets (Tables)

9 Months Ended

Sep. 30, 2012

Goodwill and Other Intangible Assets

Schedule of intangible assets subject to amortization

	September 30,			December 31,
	2012			2011
Amortizable intangible assets:
Core deposit intangibles — gross	$	30,578		30,578
Acquisitions	—			—
Less: accumulated amortization	(30,056		)	(29,549	)
Core deposit intangibles — net	522			1,029
Customer and Contract intangible assets — gross	3,779			3,779
Less: accumulated amortization	(2,971		)	(2,685	)
Customer and Contract intangible assets — net	$	808		1,094

Schedule of the actual aggregate amortization expense, as well as estimated aggregate amortization expense, based upon current levels of intangible assets

For the quarter ended September 30, 2012	$	219
For the quarter ended September 30, 2011	475
For the nine months ended September 30, 2012	793
For the nine months ended September 30, 2011	1,445
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	69
For the year ending December 31, 2017	—

Schedule of the 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 September 30, 2012	$	170,269	1,613	171,882

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Loans receivable (Details 7) (USD $)	3 Months Ended		9 Months Ended
	Sep. 30, 2012 item	Sep. 30, 2011 item	Sep. 30, 2012 item	Sep. 30, 2011 item
Troubled debt restructurings:
Number of contracts	79	7	102	33
Recorded investment at the time of modification	$ 17,448,000	$ 12,995,000	$ 33,999,000	$ 35,480,000
Current recorded investment	16,249,000	12,953,000	31,542,000	25,517,000
Current allowance	1,847,000	1,351,000	2,559,000	1,916,000
Troubled debt restructurings that subsequently defaulted:
Number of contracts	9	2	13	6
Recorded investment at the time of modification	2,060,000	937,000	3,660,000	11,241,000
Current recorded investment	1,049,000	751,000	2,493,000	10,083,000
Current allowance	105,000	50,000	280,000	1,138,000
Commercial real estate
Troubled debt restructurings that subsequently defaulted:
Number of contracts charged-off			2
Amount of contracts charged-off			554,000
Commercial loans
Troubled debt restructurings that subsequently defaulted:
Number of contracts paid off			3
Amount of contracts paid off			787,000
Personal Banking
Troubled debt restructurings:
Number of contracts	26	1	26	2
Recorded investment at the time of modification	4,146,000	445,000	4,146,000	894,000
Current recorded investment	3,369,000	445,000	3,369,000	806,000
Current allowance	903,000	127,000	903,000	244,000
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			117,000
Personal Banking | Residential mortgage loans
Troubled debt restructurings:
Number of contracts	19	1	19	2
Recorded investment at the time of modification	3,422,000	445,000	3,422,000	894,000
Current recorded investment	2,739,000	445,000	2,739,000	806,000
Current allowance	729,000	127,000	729,000	244,000
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			117,000
Personal Banking | Home equity loans
Troubled debt restructurings:
Number of contracts	7		7
Recorded investment at the time of modification	724,000		724,000
Current recorded investment	630,000		630,000
Current allowance	174,000		174,000
Business Banking
Troubled debt restructurings:
Number of contracts	53	6	76	31
Recorded investment at the time of modification	13,302,000	12,550,000	29,853,000	34,586,000
Current recorded investment	12,880,000	12,508,000	28,173,000	24,711,000
Current allowance	944,000	1,224,000	1,656,000	1,672,000
Troubled debt restructurings that subsequently defaulted:
Number of contracts	9	2	12	6
Recorded investment at the time of modification	2,060,000	937,000	3,211,000	11,241,000
Current recorded investment	1,049,000	751,000	2,132,000	10,083,000
Current allowance	105,000	50,000	163,000	1,138,000
Business Banking | Commercial real estate
Troubled debt restructurings:
Number of contracts	25	4	35	12
Recorded investment at the time of modification	6,294,000	10,168,000	9,267,000	13,642,000
Current recorded investment	6,102,000	10,126,000	9,014,000	13,331,000
Current allowance	716,000	1,013,000	910,000	1,279,000
Troubled debt restructurings that subsequently defaulted:
Number of contracts	1	1	4	4
Recorded investment at the time of modification	230,000	500,000	1,381,000	1,501,000
Current recorded investment	230,000	496,000	1,313,000	960,000
Current allowance	23,000	50,000	81,000	251,000
Business Banking | Commercial loans
Troubled debt restructurings:
Number of contracts	28	2	41	19
Recorded investment at the time of modification	7,008,000	2,382,000	20,586,000	20,944,000
Current recorded investment	6,778,000	2,382,000	19,159,000	11,380,000
Current allowance	228,000	211,000	746,000	393,000
Troubled debt restructurings that subsequently defaulted:
Number of contracts	8	1	8	2
Recorded investment at the time of modification	1,830,000	437,000	1,830,000	9,740,000
Current recorded investment	819,000	255,000	819,000	9,123,000
Current allowance	$ 82,000		$ 82,000	$ 887,000

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Investment securities and impairment of investment securities (Details 7) (USD $) In Thousands, unless otherwise specified	9 Months Ended
	Sep. 30, 2012 party	Dec. 31, 2011
Information for portfolio of municipal securities that have been in an unrealized loss position for more than 12 months
Total Fair Value	$ 36,083	$ 46,374
Total Unrealized Losses	(5,134)	(5,572)
Municipal securities
Marketable securities
Number of third party pricing sources	2
Number of Pennsylvania municipalities issuing municipal securities	1
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	595
Total Fair Value	594	2,317
Total Unrealized Losses	(1)	(180)
Municipal securities | Cambridge Area JT Revenue
Information for portfolio of municipal securities that have been in an unrealized loss position for more than 12 months
Total Book Value	595
Total Fair Value	594
Total Unrealized Losses	$ (1)

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CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011
Net Income	$ 15,693	$ 16,720	$ 47,235	$ 48,976
Net unrealized holding gains on marketable securities:
Unrealized holding gains net of tax of $(998), $(1,502) for the three months ended September 30, 2012 and 2011 and $(2,471) and $(5,123) for the nine months ended September 30, 2012 and 2011, respectively	1,550	2,789	3,805	9,512
Other-than-temporary impairment on securities included in net income, net of tax of $(36), $0 for the three months ended September 30, 2012 and 2011 and $(129) and $(177) for the nine months ended September 30, 2012 and 2011, respectively	57		202	330
Reclassification adjustment for (gains)/ losses included in net income, net of tax of $16, $(155) for the three months ended September 30, 2012 and 2011 and $138 and $(247) for the nine months ended September 30, 2012 and 2011, respectively	(25)	289	(215)	459
Net unrealized holding gains on marketable securities	1,582	3,078	3,792	10,301
Change in fair value of interest rate swaps, net of tax of $55, $1,424 for the three months ended September 30, 2012 and 2011 and $103 and $1,647 for the nine months ended September 30, 2012 and 2011, respectively	(102)	(2,644)	(192)	(3,059)
Other comprehensive income	1,480	434	3,600	7,242
Total comprehensive income	$ 17,173	$ 17,154	$ 50,835	$ 56,218

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CONSOLIDATED STATEMENTS OF CASH FLOWS (Parenthetical) (USD $) In Thousands, unless otherwise specified	9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011
CONSOLIDATED STATEMENTS OF CASH FLOWS
Interest on deposits and borrowings, interest credited to deposit accounts	$ 29,606	$ 39,477

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Disclosures About Fair Value of Financial Instruments (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2012	Dec. 31, 2011
Financial assets:
Securities available-for-sale	$ 951,879	$ 908,349
Accrued interest receivable	25,324	24,599
Financial liabilities:
Borrowed funds	855,552	827,925
Junior subordinated debentures	103,094	103,094
Level 1
Financial assets:
Cash and cash equivalents	638,068
Securities available-for-sale	20,068
Loans receivable, net	14,152
Accrued interest receivable	25,324
Total financial assets	697,612
Financial liabilities:
Savings and checking accounts	3,862,772
Borrowed funds	160,019
Accrued interest payable	1,111
Total financial liabilities	4,023,902
Level 2
Financial assets:
Securities available-for-sale	922,981
Securities held-to-maturity	174,821
Total financial assets	1,097,802
Financial liabilities:
Cash flow hedges - swaps	13,932
Total financial liabilities	13,932
Level 3
Financial assets:
Securities available-for-sale	8,830
Loans receivable, net	5,968,519
Total financial assets	5,977,349
Financial liabilities:
Time deposits	2,004,067
Borrowed funds	754,440
Junior subordinated debentures	117,059
Total financial liabilities	2,875,566
Carrying amount
Financial assets:
Cash and cash equivalents	638,068	688,297
Securities available-for-sale	951,879	908,349
Securities held-to-maturity	167,739	231,389
Loans receivable, net	5,728,633	5,480,381
Accrued interest receivable	25,324	24,599
FHLB Stock	46,834	48,935
Total financial assets	7,558,477	7,381,950
Financial liabilities:
Savings and checking accounts	3,862,772	3,495,508
Time deposits	1,961,984	2,284,817
Borrowed funds	855,552	827,925
Junior subordinated debentures	103,094	103,094
Cash flow hedges - swaps	13,932	13,637
Accrued interest payable	1,111	1,104
Total financial liabilities	6,798,445	6,726,085
Estimated fair value
Financial assets:
Cash and cash equivalents	638,068	688,297
Securities available-for-sale	951,879	908,349
Securities held-to-maturity	174,821	239,412
Loans receivable, net	5,982,671	5,839,674
Accrued interest receivable	25,324	24,599
FHLB Stock	46,834	48,935
Total financial assets	7,819,597	7,749,266
Financial liabilities:
Savings and checking accounts	3,862,772	3,495,508
Time deposits	2,004,067	2,329,451
Borrowed funds	914,459	899,547
Junior subordinated debentures	117,059	116,725
Cash flow hedges - swaps	13,932	13,637
Accrued interest payable	1,111	1,104
Total financial liabilities	$ 6,913,400	$ 6,855,972

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Earnings Per Share (Tables)

9 Months Ended

Sep. 30, 2012

Earnings Per Share

Schedule of computation of basic and diluted earnings per share

	Quarter ended			Nine months ended
	September 30,			September 30,
	2012		2011	2012	2011
Reported net income	$	15,693	16,720	47,235	48,976
Weighted average common shares outstanding	94,422,878		96,918,016	94,277,362	101,866,461
Dilutive potential shares due to effect of stock options	187,778		206,312	314,040	402,466
Total weighted average common shares and dilutive potential shares	94,610,656		97,124,328	94,591,402	102,268,927
Basic earnings per share:	$	0.17	0.17	0.50	0.48
Diluted earnings per share:	$	0.17	0.17	0.50	0.48

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Investment securities and impairment of investment securities (Details 4) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2012	Dec. 31, 2011
Marketable securities
Total Book Value	$ 21,047
Total Fair Value		164,611
Total Unrealized Losses		(6,210)
Corporate investments
Marketable securities
Total Fair Value	16,180	18,604
Total Unrealized Losses	(4,868)	(4,635)
Corporate investments | Bank Boston Capital Trust
Marketable securities
Total Book Value	989
Total Fair Value	724
Total Unrealized Losses	(265)
Corporate investments | Huntington Capital Trust
Marketable securities
Total Book Value	1,426
Total Fair Value	1,060
Total Unrealized Losses	(366)
Corporate investments | Commercebank Capital Trust
Marketable securities
Total Book Value	888
Total Fair Value	850
Total Unrealized Losses	(38)
Corporate investments | Ocean Shore Capital Trust
Marketable securities
Total Book Value	866
Total Fair Value	800
Total Unrealized Losses	(66)
Corporate investments | I-PreTSL I
Marketable securities
Total Book Value	1,500
Total Fair Value	511
Total Unrealized Losses	(989)
Corporate investments | I-PreTSL II
Marketable securities
Total Book Value	1,500
Total Fair Value	608
Total Unrealized Losses	(892)
Corporate investments | PreTSL XIX
Marketable securities
Total Book Value	8,486
Total Fair Value	6,939
Total Unrealized Losses	(1,547)
Corporate investments | PreTSL XX
Marketable securities
Total Book Value	5,392
Total Fair Value	4,687
Total Unrealized Losses	$ (705)

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Mortgage Loan Servicing

9 Months Ended

Sep. 30, 2012

Mortgage Loan Servicing

Mortgage Loan Servicing

(10)Mortgage Loan Servicing

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

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

The following table shows changes in MSRs at and for the quarter ended September 30, 2012 (in thousands):

						Net
						carrying
	Servicing			Valuation		value and
	rights			allowance		fair value
Balance at June 30, 2012	$	3,503		(84	)	3,419
Additions/ (reductions)	438			84		522
Amortization	(553		)	—		(553	)
Balance at September 30, 2012	$	3,388		—		3,388

The following table shows changes in MSRs at and for the nine months ended September 30, 2012 (in thousands):

					Net
					carrying
	Servicing			Valuation	value and
	rights			allowance	fair value
Balance at December 31, 2011	$	3,655		—	3,655
Additions/ (reductions)	1,780			—	1,780
Amortization	(2,047		)	—	(2,047	)
Balance at September 30, 2012	$	3,388		—	3,388

The following table shows changes in MSRs at and for the quarter ended September 30, 2011 (in thousands):

					Net
					carrying
	Servicing			Valuation	value and
	rights			allowance	fair value
Balance at June 30, 2011	$	4,842		—	4,842
Additions/ (reductions)	510			—	510
Amortization	(854		)	—	(854	)
Balance at September 30, 2011	$	4,498		—	4,498

The following table shows changes in MSRs at and for the nine months ended September 30, 2011 (in thousands):

					Net
					carrying
	Servicing			Valuation	value and
	rights			allowance	fair value
Balance at December 31, 2010	$	5,969		—	5,969
Additions/ (reductions)	1,145			—	1,145
Amortization	(2,616		)	—	(2,616	)
Balance at September 30, 2011	$	4,498		—	4,498

The following table presents additional information about the inputs used to determine the fair value of our MSRs at the periods indicated:

	September 30,			September 30,
	2012 *			2011 **
	(Weighted average)
Forward yield curve (5 year LIBOR swap)	0.8		%	1.3		%
Prepayment rates	20.0		%	20.6		%
Annual service cost per loan	$	67		$	67
Average life expectancy (months)	52			49
Option adjusted spread (basis points)	800			—
Discount rate	—			10.5		%

*  Stochastic modeling

**  Static modeling