10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

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

For the quarterly period ended March 31, 2013

or

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

For the transition period from                          to                         

Commission File Number 001-34582

NORTHWEST BANCSHARES, INC.

(Exact name of registrant as specified in its charter)

Maryland	27-0950358
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

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

(814) 726-2140

(Registrant’s telephone number, including area code)

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

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes  x  No  o

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

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

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

Indicate by check mark whether the registrant is a Shell Company (as defined in Rule 12b-2 of the Exchange Act). Yes  o  No  x

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

Common Stock ($0.01 par value) 93,735,174 shares outstanding as of April 30, 2013

NORTHWEST BANCSHARES, INC.

INDEX

		PAGE
PART I	FINANCIAL INFORMATION
Item 1.	Financial Statements (unaudited)
	Consolidated Statements of Financial Condition as of March 31, 2013 and December 31, 2012	1
	Consolidated Statements of Income for the quarter ended March 31, 2013 and 2012	2
	Consolidated Statements of Comprehensive Income for the quarter ended March 31, 2013 and 2012	3
	Consolidated Statements of Changes in Shareholders’ Equity for the quarter ended March 31, 2013 and 2012	4
	Consolidated Statements of Cash Flows for the quarter ended March 31, 2013 and 2012	5
	Notes to Consolidated Financial Statements - Unaudited	7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	44
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	58
Item 4.	Controls and Procedures	59
PART II	OTHER INFORMATION
Item 1.	Legal Proceedings	59
Item 1A.	Risk Factors	60
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	60
Item 3.	Defaults Upon Senior Securities	60
Item 4.	Mine Safety Disclosures	60
Item 5.	Other information	60
Item 6.	Exhibits	60
	Signature	62
	Certifications

ITEM 1. FINANCIAL STATEMENTS

NORTHWEST BANCSHARES, INC.

CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION

(in thousands, except share data)

	(Unaudited)
	March 31,			December 31,
	2013			2012
Assets
Cash and due from banks	$	71,607		88,277
Interest-earning deposits in other financial institutions	512,949			362,794
Federal funds sold and other short-term investments	634			633
Marketable securities available-for-sale (amortized cost of $1,085,155 and $1,053,122)	1,112,104			1,079,074
Marketable securities held-to-maturity (fair value of $149,105 and $161,969)	143,253			155,081
Total cash and investments	1,840,547			1,685,859
Personal Banking:
Loans held for sale	3,823			15,441
Residental mortgage loans	2,370,561			2,400,208
Home equity loans	1,052,485			1,076,637
Other consumer loans	218,464			235,367
Total Personal Banking	3,645,333			3,727,653
Business Banking:
Commercial real estate loans	1,572,948			1,585,833
Commercial loans	392,004			388,994
Total Business Banking	1,964,952			1,974,827
Total loans	5,610,285			5,702,480
Allowance for loan losses	(72,009		)	(73,219	)
Total loans, net	5,538,276			5,629,261
Federal Home Loan Bank stock, at cost	47,332			46,834
Accrued interest receivable	23,963			23,313
Real estate owned, net	24,035			26,165
Premises and equipment, net	138,950			138,824
Bank owned life insurance	138,123			137,044
Goodwill	174,463			174,461
Other intangible assets	3,181			3,529
Other assets	65,620			77,310
Total assets	$	7,994,490		7,942,600
Liabilities and Shareholders’ equity
Liabilities:
Noninterest-bearing demand deposits	$	787,308		755,429
Interest-bearing demand deposits	864,168			851,771
Savings deposits	2,327,623			2,271,311
Time deposits	1,821,052			1,886,089
Total deposits	5,800,151			5,764,600
Borrowed funds	859,860			860,047
Junior subordinated deferrable interest debentures held by trusts that issued guaranteed capital debt securities	103,094			103,094
Advances by borrowers for taxes and insurance	27,160			23,325
Accrued interest payable	1,180			888
Other liabilities	55,465			62,177
Total liabilities	6,846,910			6,814,131
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, 93,802,335 and 93,652,960 shares issued, respectively	938			937
Paid-in capital	615,160			613,249
Retained earnings	565,594			550,296
Unallocated common stock of Employee Stock Ownership Plan	(24,137		)	(24,525	)
Accumulated other comprehensive loss	(9,975		)	(11,488	)
Total shareholders’ equity	1,147,580			1,128,469
Total liabilities and shareholders’ equity	$	7,994,490		7,942,600

See accompanying notes to unaudited consolidated financial statements

1

NORTHWEST BANCSHARES, INC.

CONSOLIDATED STATEMENTS OF INCOME (Unaudited)

(in thousands, except per share data)

	Three months ended
	March 31,
	2013			2012
Interest income:
Loans receivable	$	73,474		78,159
Mortgage-backed securities	3,441			4,691
Taxable investment securities	905			573
Tax-free investment securities	2,063			2,446
Interest-earning deposits	251			380
Total interest income	80,134			86,249
Interest expense:
Deposits	7,814			12,944
Borrowed funds	7,831			7,899
Total interest expense	15,645			20,843
Net interest income	64,489			65,406
Provision for loan losses	7,158			6,287
Net interest income after provision for loan losses	57,331			59,119
Noninterest income:
Impairment losses on securities	—			(545	)
Noncredit related losses on securities not expected to be sold (recognized in other comprehensive income)	—			307
Net impairment losses	—			(238	)
Gain on sale of investments, net	101			44
Service charges and fees	8,190			8,425
Trust and other financial services income	2,204			2,116
Insurance commission income	2,295			1,718
Loss on real estate owned, net	(130		)	(1,070	)
Income from bank owned life insurance	1,085			1,117
Mortgage banking income	956			531
Other operating income	1,176			997
Total noninterest income	15,877			13,640
Noninterest expense:
Compensation and employee benefits	27,930			27,838
Premises and occupancy costs	6,153			5,748
Office operations	3,268			3,324
Processing expenses	5,853			6,142
Marketing expenses	1,900			2,036
Federal deposit insurance premiums	1,438			1,620
Professional services	1,693			1,697
Amortization of intangible assets	348			295
Real estate owned expense	599			740
Other expenses	2,289			1,836
Total noninterest expense	51,471			51,276
Income before income taxes	21,737			21,483
Federal and state income taxes	6,439			6,302
Net income	$	15,298		15,181
Basic earnings per share	$	0.17		0.16
Diluted earnings per share	$	0.17		0.16

See accompanying notes to unaudited consolidated financial statements

2

NORTHWEST BANCSHARES, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited)

(in thousands)

	Three months ended
	March 31,
	2013			2012
Net Income	$	15,298		15,181
Other comprehensive income net of tax:
Net unrealized holding gains on marketable securities:
Unrealized holding gains net of tax of $(436) and $(870), respectively	670			1,361
Other-than-temporary impairment on securities included in net income, net of tax of $0 and $(93), respectively	—			145
Reclassification adjustment for gains included in net income, net of tax of $43 and $31, respectively	(66		)	(49	)
Net unrealized holding gains on marketable securities	604			1,457
Change in fair value of interest rate swaps, net of tax of $(367) and $(297), respectively	680			551
Defined benefit plan:
Reclassification adjustment for prior period service costs included in net income, net of tax of $(123) and $(231), respectively	229			431
Other comprehensive income	1,513			2,439
Total comprehensive income	$	16,811		17,620

See accompanying notes to unaudited consolidated financial statements

3

NORTHWEST BANCSHARES, INC.

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY (Unaudited)

(dollars in thousands, except per share data)

							Accumulated
							Other		Unallocated		Total
	Common Stock			Paid-in	Retained		Comprehensive		common stock		Shareholders’
Three months ended March 31, 2012	Shares	Amount		Capital	Earnings		Income/ (loss)		of ESOP		Equity
Beginning balance at December 31, 2011	97,493,046	$	975	659,523	543,598		(23,226	)	(25,966	)	1,154,904
Comprehensive income:
Net income	—	—		—	15,181		—		—		15,181
Other comprehensive income, net of tax of $(1,461)	—	—		—	—		2,439		—		2,439
Total comprehensive income	—	—		—	15,181		2,439		—		17,620
Exercise of stock options	100,350	1		785	—		—		—		786
Stock compensation expense	—	—		625	—		—		398		1,023
Dividends paid ($0.12 per share)	—	—		—	(11,427	)	—		—		(11,427	)
Ending balance at March 31, 2012	97,593,396	$	976	660,933	547,352		(20,787	)	(25,568	)	1,162,906

						Accumulated
						Other		Unallocated		Total
	Common Stock			Paid-in	Retained	Comprehensive		common stock		Shareholders’
Three months ended March 31, 2013	Shares	Amount		Capital	Earnings	Income/ (loss)		of ESOP		Equity
Beginning balance at December 31, 2012	93,652,960	$	937	613,249	550,296	(11,488	)	(24,525	)	1,128,469
Comprehensive income:
Net income	—	—		—	15,298	—		—		15,298
Other comprehensive income, net of tax of $(883)	—	—		—	—	1,513		—		1,513
Total comprehensive income	—	—		—	15,298	1,513		—		16,811
Exercise of stock options	149,375	1		1,217	—	—		—		1,218
Stock compensation expense	—	—		694	—	—		388		1,082
Dividends paid	—	—		—	—	—		—		—
Ending balance at March 31, 2013	93,802,335	$	938	615,160	565,594	(9,975	)	(24,137	)	1,147,580

See accompanying notes to unaudited consolidated financial statements

4

NORTHWEST BANCSHARES, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)

(in thousands)

	Three months ended
	March 31,
	2013			2012
OPERATING ACTIVITIES:
Net Income	$	15,298		15,181
Adjustments to reconcile net income to net cash provided by operating activities:
Provision for loan losses	7,158			6,287
Net (gain)/ loss on sale of assets	(727		)	628
Net depreciation, amortization and accretion	3,056			2,467
Decrease in other assets	8,754			10,432
(Decrease)/ increase in other liabilities	(5,022		)	2,547
Net amortization/ (accretion) on marketable securities	57			(54	)
Noncash impairment losses on investment securities	—			238
Noncash write-down of real estate owned	446			536
Origination of loans held for sale	(32,883		)	(50,110	)
Proceeds from sale of loans held for sale	45,010			36,982
Noncash compensation expense related to stock benefit plans	1,082			1,023
Net cash provided by operating activities	42,229			26,157
INVESTING ACTIVITIES:
Purchase of marketable securities available-for-sale	(108,326		)	(77,491	)
Proceeds from maturities and principal reductions of marketable securities held-to-maturity	11,856			14,401
Proceeds from maturities and principal reductions of marketable securities available-for-sale	76,309			68,558
Loan originations	(407,122		)	(480,303	)
Proceeds from loan maturities and principal reductions	477,091			427,002
(Purchase of)/ proceeds from sale of Federal Home Loan Bank stock	(498		)	1,845
Proceeds from sale of real estate owned	4,700			3,263
Sale of real estate owned for investment, net	114			114
Purchase of premises and equipment	(3,284		)	(4,346	)
Net cash provided by/ (used in) investing activities	50,840			(46,957	)

5

NORTHWEST BANCSHARES, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited) (continued)

(in thousands)

	Three months ended
	March 31,
	2013			2012
FINANCING ACTIVITIES:
Increase in deposits, net	$	35,551		89,436
Proceeds from long-term borrowings	20,000			—
Repayments of long-term borrowings	(17		)	(17	)
Net (decrease)/ increase in short-term borrowings	(20,170		)	8,502
Increase in advances by borrowers for taxes and insurance	3,835			4,112
Cash dividends paid	—			(11,427	)
Proceeds from stock options exercised	1,218			786
Net cash provided by financing activities	40,417			91,392
Net increase in cash and cash equivalents	$	133,486		70,592
Cash and cash equivalents at beginning of period	$	451,704		688,297
Net increase in cash and cash equivalents	133,486			70,592
Cash and cash equivalents at end of period	$	585,190		758,889
Cash and cash equivalents:
Cash and due from banks	$	71,607		85,050
Interest-earning deposits in other financial institutions	512,949			672,887
Federal funds sold and other short-term investments	634			952
Total cash and cash equivalents	$	585,190		758,889
Cash paid during the period for:
Interest on deposits and borrowings (including interest credited to deposit accounts of $7,031 and $11,065, respectively)	$	15,353		20,828
Income taxes	$	3,587		955
Non-cash activities:
Loan foreclosures and repossessions	$	2,985		6,557
Sale of real estate owned financed by the Company	$	269		100

See accompanying notes to unaudited consolidated financial statements

6

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Unaudited

(1)Basis of Presentation and Informational Disclosures

Northwest Bancshares, Inc. (the “Company”) or (“NWBI”), 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 March 31, 2013, 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, Northwest Financial Services, Inc., Northwest Advisors, Inc., Northwest Capital Group, Inc., Boetger & Associates, Inc., Allegheny Services, Inc., Great Northwest Corporation, Veracity Benefit Designs, Inc. and The Bert Company.  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, 2012 updated, as required, for any new pronouncements or changes.

The results of operations for the three months ended March 31, 2013 are not necessarily indicative of the results that may be expected for the year ending December 31, 2013, or any other period.

Stock-Based Compensation

Stock-based compensation expense of $1.1 million and $1.0 million for the three months ended March 31, 2013 and 2012, respectively, was recognized in compensation expense relating to our stock benefit plans.  At March 31, 2013 there was compensation expense of $5.3 million to be recognized for awarded but unvested stock options and $13.7 million for unvested common share awards.

Income Taxes- Uncertain Tax Positions

Accounting standards prescribe a comprehensive model for how a company should recognize, measure, present and disclose in its financial statements uncertain tax positions that the company has taken or expects to take on a tax return.  A tax benefit from an uncertain position may be recognized only if it is “more likely than not” that the position is sustainable, based on its technical merits.  The tax benefit of a qualifying position is the largest amount of tax benefit that is greater than 50% likely of being realized upon ultimate settlement with a taxing authority having full knowledge of all relevant information.  As of March 31, 2013 we had no liability for unrecognized tax benefits.

We recognize interest accrued related to: (1) unrecognized tax benefits in federal and state income taxes and (2) refund claims in other operating income.  We recognize penalties (if any) in federal and state income taxes.  There is no amount accrued for the payment of interest or penalties at March 31, 2013.  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.

7

Recent Accounting Pronouncements

In February 2013, FASB issued ASU No. 2013-02, “Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income.”  This guidance requires entities to provide information about the amounts reclassified out of accumulated other comprehensive income by component. Additionally, entities are required to present significant amounts reclassified out of other comprehensive income by the respective line items of net income, but only if the amount reclassified is required under U.S. GAAP to be reclassified to net income in its entirety in the same reporting period.  For other amounts that are not required to be reclassified in their entirety to net income, entities are required to provide additional detail about these amounts.  This guidance is effective prospectively for reporting periods beginning after December 15, 2012.  The adoption of this standard did not have a material impact on our Consolidated Financial Statements.  See Note 13.

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

At or for the quarter ended:

	Community		Consumer
March 31, 2013 ($ in 000’s)	Banking		Finance	All other (1)		Consolidated
External interest income	$	74,595	5,201	338		80,134
Intersegment interest income	700		—	(700	)	—
Interest expense	14,394		700	551		15,645
Provision for loan losses	6,306		852	—		7,158
Noninterest income	15,523		319	35		15,877
Noninterest expense	48,112		3,144	215		51,471
Income tax expense (benefit)	6,511		342	(414	)	6,439
Net income	15,495		482	(679	)	15,298
Total assets	$	7,841,301	110,775	42,414		7,994,490

	Community		Consumer
March 31, 2012 ($ in 000’s)	Banking		Finance	All other (1)		Consolidated
External interest income	$	80,405	5,531	313		86,249
Intersegment interest income	748		—	(748	)	—
Interest expense	19,540		748	555		20,843
Provision for loan losses	5,500		787	—		6,287
Noninterest income	13,082		511	47		13,640
Noninterest expense	47,878		3,196	202		51,276
Income tax expense (benefit)	6,221		504	(423	)	6,302
Net income	15,096		807	(722	)	15,181
Total assets	$	7,917,340	113,271	38,397		8,069,008

(1)Eliminations consist of intercompany loans, interest income and interest expense.

8

(3)Investment securities and impairment of investment securities

The following table shows the portfolio of investment securities available-for-sale at March 31, 2013 (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	$	38	—	—		38
Debt issued by government sponsored enterprises:
Due in one year or less	1,999		4	—		2,003
Due in one year - five years	143,055		376	(117	)	143,314
Due in five years - ten years	111,204		103	(171	)	111,136
Equity securities	15,263		10,235	—		25,498
Municipal securities:
Due in one year - five years	10,123		215	—		10,338
Due in five years - ten years	17,100		544	—		17,644
Due after ten years	95,060		4,455	—		99,515
Corporate debt issues:
Due after ten years	22,455		481	(2,379	)	20,557
Residential mortgage-backed securities:
Fixed rate pass-through	92,590		5,359	(45	)	97,904
Variable rate pass-through	96,929		4,892	(6	)	101,815
Fixed rate non-agency CMOs	5,096		378	—		5,474
Fixed rate agency CMOs	275,899		2,985	(1,133	)	277,751
Variable rate non-agency CMOs	805		—	(27	)	778
Variable rate agency CMOs	197,539		1,079	(279	)	198,339
Total residential mortgage-backed securities	668,858		14,693	(1,490	)	682,061
Total marketable securities available-for-sale	$	1,085,155	31,106	(4,157	)	1,112,104

9

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

			Gross	Gross
			unrealized	unrealized
	Amortized		holding	holding		Fair
	cost		gains	losses		value
Debt issued by the U.S. government and agencies:
Due in one year or less	$	40	—	—		40
Debt issued by government sponsored enterprises:
Due in one year or less	1,999		5	—		2,004
Due in one year - five years	140,352		183	(22	)	140,513
Due in five years - ten years	95,602		460	(265	)	95,797
Equity securities	13,301		6,025	(22	)	19,304
Municipal securities:
Due in one year - five years	9,629		233	—		9,862
Due in five years - ten years	17,355		668	—		18,023
Due after ten years	100,644		5,679	—		106,323
Corporate debt issues:
Due after ten years	24,911		483	(2,691	)	22,703
Residential mortgage-backed securities:
Fixed rate pass-through	85,134		6,266	—		91,400
Variable rate pass-through	104,591		5,314	(6	)	109,899
Fixed rate non-agency CMOs	5,700		156	(236	)	5,620
Fixed rate agency CMOs	227,608		3,462	(744	)	230,326
Variable rate non-agency CMOs	873		—	(20	)	853
Variable rate agency CMOs	225,383		1,345	(321	)	226,407
Total residential mortgage-backed securities	649,289		16,543	(1,327	)	664,505
Total marketable securities available-for-sale	$	1,053,122	30,279	(4,327	)	1,079,074

The following table shows the portfolio of investment securities held-to-maturity at March 31, 2013 (in thousands):

			Gross	Gross
			unrealized	unrealized
	Amortized		holding	holding	Fair
	cost		gains	losses	value
Municipal securities:
Due in Five years - ten years	$	4,715	224	—	4,939
Due after ten years	64,573		2,796	—	67,369
Residential mortgage-backed securities:
Fixed rate pass-through	14,430		814	—	15,244
Variable rate pass-through	6,144		128	—	6,272
Fixed rate agency CMOs	49,205		1,840	—	51,045
Variable rate agency CMOs	4,186		50	—	4,236
Total residential mortgage-backed securities	73,965		2,832	—	76,797
Total marketable securities held-to-maturity	$	143,253	5,852	—	149,105

10

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

			Gross	Gross
			unrealized	unrealized
	Amortized		holding	holding		Fair
	cost		gains	losses		value
Municipal securities:
Due in five years - ten years	$	3,679	160	—		3,839
Due after ten years	65,596		3,743	—		69,339
Residential mortgage-backed securities:
Fixed rate pass-through	16,369		912	—		17,281
Variable rate pass-through	6,548		—	(14	)	6,534
Fixed rate agency CMOs	56,713		2,006	—		58,719
Variable rate agency CMOs	6,176		81	—		6,257
Total residential mortgage-backed securities	85,806		2,999	(14	)	88,791
Total marketable securities held-to-maturity	$	155,081	6,902	(14	)	161,969

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 March 31, 2013 (in thousands):

	Less than 12 months				12 months or more			Total
			Unrealized			Unrealized			Unrealized
	Fair value		loss		Fair value	loss		Fair value	loss
U.S. government and agencies	$	110,396	(288	)	—	—		110,396	(288	)
Corporate issues	850		(40	)	12,083	(2,339	)	12,933	(2,379	)
Residential mortgage- backed securities - non-agency	—		—		778	(27	)	778	(27	)
Residential mortgage- backed securities - agency	196,799		(1,336	)	23,618	(127	)	220,417	(1,463	)
Total temporarily impaired securities	$	308,045	(1,664	)	36,479	(2,493	)	344,524	(4,157	)

11

The following table shows the fair value of and gross unrealized losses on investment securities, aggregated by investment category and length of time that the individual securities have been in a continuous unrealized loss position at December 31, 2012 (in thousands):

	Less than 12 months				12 months or more			Total
			Unrealized			Unrealized			Unrealized
	Fair value		loss		Fair value	loss		Fair value	loss
U.S. government and agencies	$	70,128	(286	)	6,537	(1	)	76,665	(287	)
Corporate debt issues	850		(39	)	12,095	(2,652	)	12,945	(2,691	)
Equity securities	601		(21	)	17	(1	)	618	(22	)
Residential mortgage-backed securities - non-agency	—		—		4,357	(256	)	4,357	(256	)
Residential mortgage-backed securities - agency	167,294		(1,055	)	14,231	(30	)	181,525	(1,085	)
Total temporarily impaired securities	$	238,873	(1,401	)	37,237	(2,940	)	276,110	(4,341	)

Corporate issues

As of March 31, 2013, we had six investments with a total amortized cost of $14.4 million and total fair value of $12.1 million, where the amortized cost exceeded the carrying value for more than 12 months.  These investments were three single issuer trust preferred investments and three 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 three 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.

12

The following table provides class, amortized cost, fair value and ratings information for our portfolio of corporate securities that have an unrealized loss at March 31, 2013 (in thousands):

		Total
		Amortized		Fair	Unrealized		Moody’s/ Fitch
Description	Class	cost		value	losses		ratings
Bank Boston Capital Trust (1)	N/A	$	989	771	(218	)	Ba2/ BB
Huntington Capital Trust	N/A	1,428		1,082	(346	)	Baa3/ BB
Commercebank Capital Trust	N/A	890		850	(40	)	Not rated
Ocean Shore Capital Trust	N/A	867		800	(67	)	Not rated
I-PreTSL I	Mezzanine	1,500		590	(910	)	Not rated/ CCC
I-PreTSL II	Mezzanine	1,500		766	(734	)	Not rated/ B
PreTSL XIX	Senior A-1	8,138		8,074	(64	)	Baa2/ BBB
		$	15,312	12,933	(2,379	)

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

The following table provides collateral information on the pooled trust preferred securities included in the previous table at March 31, 2013 (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	99,981
I-PreTSL II	325,500		24,500	301,000	301,000
PreTSL XIX	624,881		137,001	487,880	181,000

Mortgage-backed securities

Mortgage-backed securities include agency (FNMA, FHLMC, GNMA and SBA) mortgage-backed securities and non-agency collateralized mortgage obligations (“CMOs”).  We review our portfolio of mortgage-backed securities quarterly for impairment.  As of March 31, 2013, we believe the impairment within our portfolio of agency mortgage-backed securities is noncredit related.  As of March 31, 2013, we had seven non-agency CMOs with a total amortized cost of $5.9 million and a total fair value of $6.3 million. Included in this total was one non-agency CMO with an amortized cost of $805,000 and a fair value of $778,000, where the amortized cost exceeded the fair value for more than 12 months.  During the quarter ended March 31, 2013, we did not recognize other-than-temporary credit related impairment on this security.  We determined the impairment was noncredit related by analyzing cash flow estimates, estimated prepayment speeds, loss severity and conditional default rates.  We considered the discounted cash flow analysis as our primary evidence when we determined the impairment on this security was noncredit related.

13

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 March 31, 2013 (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	$	177	182	5		—	—
AMAC 2003-6 2A8	366		376	10		—	—
BOAMS 2005-11 1A8	346		487	141		—	(146	)
CWALT 2005-J14 A3	3,581		3,796	215		—	(1,007	)
CFSB 2003-17 2A2	352		357	5		—	—
WAMU 2003-S2 A4	274		276	2		—	—
WFMBS 2003-B A2	805		778	(27	)	—	—
	$	5,901	6,252	351		—	(1,153	)

Municipal Securities

We review our portfolio of municipal securities quarterly for impairment.  We initially evaluate municipal securities for other-than-temporary impairment by comparing the fair value, provided to us by a third party pricing source using quoted prices for similar assets that are actively traded, to the carrying value.  When an investment’s fair value is below 80% of the amortized cost we then assess 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 stated interest rate approximates current interest rates for similar securities, we determine if the investment is rated and if so, if the rating has changed in the current period.  If the rating has not changed during the current period, we review publicly available information to determine if there has been any negative change in the underlying municipality.  As of March 31, 2013, none of the investments in our municipal securities portfolio had an amortized cost that exceeded the fair value for more than twelve months.

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.

14

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

	2013			2012
Beginning balance at Janaury 1, (1)	$	9,811		11,633
Credit losses on debt securities for which other-than-temporary impairment was not previously recognized	—			—
Reduction for losses realized during the year	(67		)	(1,311	)
Additional credit losses on debt securities for which other-than-temporary impairment was previously recognized	—			238
Ending balance at March 31,	$	9,744		10,560

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

(4)Loans receivable

The following table shows a summary of our loans receivable at March 31, 2013 and December 31, 2012 (in thousands):

	March 31,			December 31,
	2013			2012
Personal Banking:
Loans held for sale	$	3,823		15,441
Residential mortgage loans	2,380,892			2,416,419
Home equity loans	1,052,485			1,076,637
Other consumer loans	218,464			235,367
Total Personal Banking	3,655,664			3,743,864
Business Banking:
Commercial real estate	1,609,531			1,615,701
Commercial loans	438,623			432,944
Total Business Banking	2,048,154			2,048,645
Total loans receivable, gross	5,703,818			5,792,509
Deferred loan fees	(1,174		)	(1,624	)
Allowance for loan losses	(72,009		)	(73,219	)
Undisbursed loan proceeds:
Residential mortgage loans	(9,157		)	(14,587	)
Commercial real estate	(36,583		)	(29,868	)
Commercial loans	(46,619		)	(43,950	)
Total loans receivable, net	$	5,538,276		5,629,261

15

The following table provides information related to the allowance for loan losses by portfolio segment and by class of financing receivable at March 31, 2013 (in thousands):

	Balance March 31, 2013		Current period provision	Charge-offs		Recoveries	Balance December 31, 2012
Personal Banking:
Residental mortgage loans	$	7,878	452	(679	)	103	8,002
Home equity loans	8,211		224	(370	)	63	8,294
Other consumer loans	4,860		796	(1,404	)	312	5,156
Total Personal Banking	20,949		1,472	(2,453	)	478	21,452
Business Banking:
Commercial real estate loans	35,560		4,857	(3,990	)	194	34,499
Commercial loans	11,473		828	(2,680	)	83	13,242
Total Business Banking	47,033		5,685	(6,670	)	277	47,741
Unallocated	4,027		1	—		—	4,026
Total	$	72,009	7,158	(9,123	)	755	73,219

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

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

16

The following table provides information related to the loan portfolio by portfolio segment and by class of financing receivable at March 31, 2013 (in thousands):

	Recorded investment in loans receivable		Allowance for loan losses	Recorded investment in loans on nonaccrual	Recorded investment in loans past due 90 days or more and still accruing	TDRs
Personal Banking:
Residental mortgage loans	$	2,374,384	7,878	29,902	8	5,196
Home equity loans	1,052,485		8,211	9,569	—	2,128
Other consumer loans	218,464		4,860	1,989	750	—
Total Personal Banking	3,645,333		20,949	41,460	758	7,324
Business Banking:
Commercial real estate loans	1,572,948		35,560	55,018	—	50,944
Commercial loans	392,004		11,473	29,264	23	33,097
Total Business Banking	1,964,952		47,033	84,282	23	84,041
Total	$	5,610,285	67,982	125,742	781	91,365

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

	Recorded investment in loans receivable		Allowance for loan losses	Recorded investment in loans on nonaccrual	Recorded investment in loans past due 90 days or more and still accruing	TDRs
Personal Banking:
Residental mortgage loans	$	2,415,649	8,002	25,083	9	5,045
Home equity loans	1,076,637		8,294	9,114	2	1,891
Other consumer loans	235,367		5,156	1,980	776	—
Total Personal Banking	3,727,653		21,452	36,177	787	6,936
Business Banking:
Commercial real estate loans	1,585,833		34,499	57,861	388	49,826
Commercial loans	388,994		13,242	26,174	523	32,682
Total Business Banking	1,974,827		47,741	84,035	911	82,508
Total	$	5,702,480	69,193	120,212	1,698	89,444

17

The following table provides geographical and delinquency information related to the loan portfolio by portfolio segment and class of financing receivable at March 31, 2013 (in thousands):

	Pennsylvania			New York		Ohio		Maryland		Other		Total
Recorded investment in loans receivable:
Personal Banking:
Residential mortgage loans	$	1,996,459		155,288		19,139		146,116		57,382		2,374,384
Home equity loans	899,546			108,371		10,361		28,185		6,022		1,052,485
Other consumer loans	201,368			9,879		2,832		1,208		3,177		218,464
Total Personal Banking	3,097,373			273,538		32,332		175,509		66,581		3,645,333
Business Banking:
Commercial real estate loans	883,200			452,805		28,060		138,983		69,900		1,572,948
Commercial loans	277,015			57,974		19,406		24,272		13,337		392,004
Total Business Banking	1,160,215			510,779		47,466		163,255		83,237		1,964,952
Total	$	4,257,588		784,317		79,798		338,764		149,818		5,610,285
Percentage of total loans in geographic area	75.9		%	14.0	%	1.4	%	6.0	%	2.7	%	100.0	%

	Pennsylvania			New York		Ohio		Maryland		Other		Total
Loans 90 or more days delinquent:
Personal Banking:
Residential mortgage loans	$	15,506		949		231		4,563		3,167		24,416
Home equity loans	5,023			1,378		163		1,246		157		7,967
Other consumer loans	1,722			76		—		—		4		1,802
Total Personal Banking	22,251			2,403		394		5,809		3,328		34,185
Business Banking:
Commercial real estate loans	15,389			541		105		4,027		2,142		22,204
Commercial loans	2,674			—		—		2,695		10,877		16,246
Total Business Banking	18,063			541		105		6,722		13,019		38,450
Total	$	40,314		2,944		499		12,531		16,347		72,635
Percentage of loans 90 or more days delinquent in geographic area.	0.9		%	0.4	%	0.6	%	3.7	%	10.9	%	1.3	%

18

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

	Pennsylvania			New York		Ohio		Maryland		Other		Total
Recorded investment in loans receivable:
Personal Banking:
Residential mortgage loans	$	2,024,520		158,090		19,290		152,676		61,073		2,415,649
Home equity loans	917,645			111,461		10,828		29,734		6,969		1,076,637
Other consumer loans	213,604			10,235		3,066		1,291		7,171		235,367
Total Personal Banking	3,155,769			279,786		33,184		183,701		75,213		3,727,653
Business Banking:
Commercial real estate loans	853,290			443,940		34,261		136,600		117,742		1,585,833
Commercial loans	269,415			55,517		12,878		25,497		25,687		388,994
Total Business Banking	1,122,705			499,457		47,139		162,097		143,429		1,974,827
Total	$	4,278,474		779,243		80,323		345,798		218,642		5,702,480
Percentage of total loans in geographic area	75.0		%	13.7	%	1.4	%	6.1	%	3.8	%	100.0	%

	Pennsylvania			New York		Ohio		Maryland		Other		Total
Loans 90 or more days delinquent:
Personal Banking:
Residential mortgage loans	$	15,694		1,430		231		3,932		2,999		24,286
Home equity loans	5,096			1,515		132		1,428		308		8,479
Other consumer loans	1,861			69		—		5		1		1,936
Total Personal Banking	22,651			3,014		363		5,365		3,308		34,701
Business Banking:
Commercial real estate loans	17,406			706		—		4,298		2,140		24,550
Commercial loans	3,493			7		—		2,678		2,918		9,096
Total Business Banking	20,899			713		—		6,976		5,058		33,646
Total	$	43,550		3,727		363		12,341		8,366		68,347
Percentage of loans 90 or more days delinquent in geographic area.	1.0		%	0.5	%	0.5	%	3.6	%	3.8	%	1.2	%

19

The following table provides information related to the composition of impaired loans by portfolio segment and by class of financing receivable at and for the quarter ended March 31, 2013 (in thousands):

	Nonaccrual loans 90 or more days delinquent		Nonaccrual loans less than 90 days delinquent	Loans less than 90 days delinquent reviewed for impairment	TDRs less than 90 days delinquent not included elsewhere	Total impaired loans	Average recorded investment in impaired loans	Interest income recognized on impaired loans
Personal Banking:
Residental mortgage loans	$	24,416	5,486	—	3,000	32,902	31,013	190
Home equity loans	7,967		1,602	—	1,274	10,843	10,312	87
Other consumer loans	1,802		187	—	—	1,989	2,024	12
Total Personal Banking	34,185		7,275	—	4,274	45,734	43,349	289
Business Banking:
Commercial real estate loans	22,204		32,814	25,471	12,778	93,267	88,531	875
Commercial loans	16,246		13,018	3,643	5,511	38,418	45,656	272
Total Business Banking	38,450		45,832	29,114	18,289	131,685	134,187	1,147
Total	$	72,635	53,107	29,114	22,563	177,419	177,536	1,436

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, 2012 (in thousands):

	Nonaccrual loans 90 or more days delinquent		Nonaccrual loans less than 90 days delinquent	Loans less than 90 days delinquent reviewed for impairment	TDRs less than 90 days delinquent not included elsewhere	Total impaired loans	Average recorded investment in impaired loans	Interest income recognized on impaired loans
Personal Banking:
Residental mortgage loans	$	24,286	797	—	3,011	28,094	28,078	683
Home equity loans	8,479		635	—	1,352	10,466	10,535	342
Other consumer loans	1,936		44	—	—	1,980	1,841	35
Total Personal Banking	34,701		1,476	—	4,363	40,540	40,454	1,060
Business Banking:
Commercial real estate loans	24,550		33,311	33,282	16,274	107,417	98,891	3,636
Commercial loans	9,096		17,078	—	10,180	36,354	51,131	1,828
Total Business Banking	33,646		50,389	33,282	26,454	143,771	150,022	5,464
Total	$	68,347	51,865	33,282	30,817	184,311	190,476	6,524

20

The following table provides information related to the evaluation of impaired loans by portfolio segment and by class of financing receivable at March 31, 2013 (in thousands):

	Loans collectively evaluated for impairment		Loans individually evaluated for impairment	Loans individually evaluated for impairment for which there is a related impairment reserve	Related impairment reserve	Loans individually evaluated for impairment for which there is no related reserve
Personal Banking:
Residental mortgage loans	$	2,368,221	6,163	6,163	1,119	—
Home equity loans	1,050,094		2,391	2,391	390	—
Other consumer loans	218,464		—	—	—	—
Total Personal Banking	3,636,779		8,554	8,554	1,509	—
Business Banking:
Commercial real estate loans	1,498,738		74,210	56,806	9,939	17,404
Commercial loans	357,138		34,866	32,465	4,572	2,401
Total Business Banking	1,855,876		109,076	89,271	14,511	19,805
Total	$	5,492,655	117,630	97,825	16,020	19,805

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

	Loans collectively evaluated for impairment		Loans individually evaluated for impairment	Loans individually evaluated for impairment for which there is a related impairment reserve	Related impairment reserve	Loans individually evaluated for impairment for which there is no related reserve
Personal Banking:
Residental mortgage loans	$	2,411,932	3,717	3,717	992	—
Home equity loans	1,076,012		625	625	189	—
Other consumer loans	235,367		—	—	—	—
Total Personal Banking	3,723,311		4,342	4,342	1,181	—
Business Banking:
Commercial real estate loans	1,501,032		84,801	61,136	9,789	23,665
Commercial loans	352,752		36,242	35,622	5,637	620
Total Business Banking	1,853,784		121,043	96,758	15,426	24,285
Total	$	5,577,095	125,385	101,100	16,607	24,285

21

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 quarter ended March 31, 2013, one home equity loan TDR with a balance of $23,000, two commercial real estate loan TDRs with a combined balance of $650,000 and two commercial loan TDRs with a combined balance of $17,000 were charged off.  Additionally, one commercial real estate loan TDR with a balance of $310,000 and eight commercial loan TDRs with a combined balance of $353,000 were paid off.

22

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

	For the quarter ended March 31, 2013
	Number of contracts	Recorded investment at the time of modification		Current recorded investment	Current allowance
Troubled debt restructurings:
Personal Banking:
Residential mortgage loans	2	$	179	162	26
Home equity loans	3	287		285	133
Other consumer loans	—	—		—	—
Total Personal Banking	5	466		447	159
Business Banking:
Commercial real estate loans	32	3,417		2,878	270
Commercial loans	21	1,728		1,513	171
Total Business Banking	53	5,145		4,391	441
Total	58	$	5,611	4,838	600
Troubled debt restructurings that subsequently defaulted:
Personal Banking:
Residential mortgage loans	1	$	244	237	30
Home equity loans	1	183		130	106
Other consumer loans	—	—		—	—
Total Personal Banking	2	427		367	136
Business Banking:
Commercial real estate loans	3	778		713	38
Commercial loans	6	16,267		11,708	2,174
Total Business Banking	9	17,045		12,421	2,212
Total	11	$	17,472	12,788	2,348

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

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The following table provides information related to loan delinquencies at March 31, 2013 (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	$	33,054	4,577	24,416	62,047	2,312,337	2,374,384
Home equity loans	6,254		2,321	7,967	16,542	1,035,943	1,052,485
Other consumer loans	3,684		1,145	1,802	6,631	211,833	218,464
Total Personal Banking	42,992		8,043	34,185	85,220	3,560,113	3,645,333
Business Banking:
Commercial real estate loans	12,833		4,448	22,204	39,485	1,533,463	1,572,948
Commercial loans	4,620		1,654	16,246	22,520	369,484	392,004
Total Business Banking	17,453		6,102	38,450	62,005	1,902,947	1,964,952
Total	$	60,445	14,145	72,635	147,225	5,463,060	5,610,285

The following table provides information related to loan delinquencies at December 31, 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	$	32,921	9,387	24,286	66,594	2,349,055	2,415,649
Home equity loans	6,534		1,977	8,479	16,990	1,059,647	1,076,637
Other consumer loans	5,456		1,830	1,936	9,222	226,145	235,367
Total Personal Banking	44,911		13,194	34,701	92,806	3,634,847	3,727,653
Business Banking:
Commercial real estate loans	13,001		4,596	24,550	42,147	1,543,686	1,585,833
Commercial loans	3,233		10,158	9,096	22,487	366,507	388,994
Total Business Banking	16,234		14,754	33,646	64,634	1,910,193	1,974,827
Total	$	61,145	27,948	68,347	157,440	5,545,040	5,702,480

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

Special mention — Loans designated as special mention have specific, well-defined risk issues, which create a high level of uncertainty regarding the long-term viability of the business. Loans in this class are considered to have high-risk characteristics.  A special mention loan exhibits material negative financial trends due to company-specific or systemic conditions.  If these potential

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weaknesses are not mitigated, they threaten the borrower’s capacity to meet its debt obligations.  Special mention loans still demonstrate sufficient financial flexibility to react to and positively address the root cause of the adverse financial trends without significant deviations from their current business strategy. Their potential weaknesses deserve our close attention and warrant enhanced monitoring.

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

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

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

The following table sets forth information about credit quality indicators, which were updated during the quarter ended March 31, 2013 (in thousands):

	Pass		Special mention	Substandard	Doubtful	Loss	Recorded investment in loans receivable
Personal Banking:
Residential mortgage loans	$	2,355,253	—	17,952	—	1,179	2,374,384
Home equity loans	1,044,568		—	7,917	—	—	1,052,485
Other consumer loans	217,215		—	1,249	—	—	218,464
Total Personal Banking	3,617,036		—	27,118	—	1,179	3,645,333
Business Banking:
Commercial real estate loans	1,351,901		67,543	149,190	4,314	—	1,572,948
Commercial loans	324,303		13,955	52,539	1,207	—	392,004
Total Business Banking	1,676,204		81,498	201,729	5,521	—	1,964,952
Total	$	5,293,240	81,498	228,847	5,521	1,179	5,610,285

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

	Pass		Special mention	Substandard	Doubtful	Loss	Recorded investment in loans receivable
Personal Banking:
Residential mortgage loans	$	2,395,809	—	18,743	48	1,049	2,415,649
Home equity loans	1,068,183		—	8,454	—	—	1,076,637
Other consumer loans	234,106		—	1,261	—	—	235,367
Total Personal Banking	3,698,098		—	28,458	48	1,049	3,727,653
Business Banking:
Commercial real estate loans	1,352,118		68,130	163,751	1,834	—	1,585,833
Commercial loans	320,228		13,077	52,742	2,947	—	388,994
Total Business Banking	1,672,346		81,207	216,493	4,781	—	1,974,827
Total	$	5,370,444	81,207	244,951	4,829	1,049	5,702,480

(5)Goodwill and Other Intangible Assets

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

	March 31,			December 31,
	2013			2012
Amortizable intangible assets:
Core deposit intangibles — gross	$	30,578		30,578
Acquisitions	—			—
Less: accumulated amortization	(30,284		)	(30,181	)
Core deposit intangibles — net	294			397
Customer and Contract intangible assets — gross	6,197			3,779
Acquisition of The Bert Company	—			2,418
Less: accumulated amortization	(3,310		)	(3,065	)
Customer and Contract intangible assets — net	$	2,887		3,132

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

For the three months ended March 31, 2013	$	348
For the three months ended March 31, 2012	295
For the year ending December 31, 2013	1,210
For the year ending December 31, 2014	814
For the year ending December 31, 2015	571
For the year ending December 31, 2016	415
For the year ending December 31, 2017	259
For the year ending December 31, 2018	173

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, 2011	$	170,269	1,613	171,882
Goodwill acquired	2,579		—	2,579
Impairment losses	—		—	—
Balance at December 31, 2012	172,848		1,613	174,461
Goodwill acquired	2		—	2
Impairment losses	—		—	—
Balance at March 31, 2013	$	172,850	1,613	174,463

We performed our annual goodwill impairment test as of June 30, 2012 and concluded that goodwill was not impaired.  At March 31, 2013, there were no significant 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 March 31, 2013, the maximum potential amount of future payments we could be required to make under these standby letters of credit was $43.6 million, of which $42.8 million is fully collateralized.  At March 31, 2013, we had a liability, which represents deferred income, of $834,000 related to the standby letters of credit.  There are no recourse provisions that would enable us to recover any amounts from third parties.

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(7)           Earnings Per Share

Basic earnings per common share (EPS) is computed by dividing net income available to common shareholders by the weighted-average number of common shares outstanding for the period, without considering any dilutive items. Diluted EPS reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that then shared in the earnings of the Company.  Stock options to purchase 4,500 shares of common stock with a weighted average exercise price of $12.48 per share were outstanding during the three months ended March 31, 2013 but were not included in the computation of diluted earnings per share for this period because the options’ exercise price was greater than the average market price of the common shares of $12.45.  All stock options outstanding during the three months ended March 31, 2012 were included in the computation of diluted earnings per share because the stock options’ exercise price was not greater than the average market price of the common shares of $12.63.

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

	Quarter ended
	March 31,
	2013		2012
Reported net income	$	15,298	15,181
Weighted average common shares outstanding	90,403,909		94,115,522
Dilutive potential shares due to effect of stock options	474,994		549,811
Total weighted average common shares and dilutive potential shares	90,878,903		94,665,333
Basic earnings per share:	$	0.17	0.16
Diluted earnings per share:	$	0.17	0.16

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

The following table sets forth the net periodic costs for the defined benefit pension plans and the postretirement healthcare plans for the period indicated (in thousands):

Components of net periodic benefit cost

	Quarter ended March 31,
	Pension benefits					Other post-retirement benefits
	2013			2012		2013	2012
Service cost	$	1,138		1,858		—	—
Interest cost	1,301			1,432		16	17
Expected return on plan assets	(2,138		)	(1,948	)	—	—
Amortization of prior service cost	(580		)	(40	)	—	—
Amortization of the net loss	919			690		13	12
Net periodic benefit cost	$	640		1,992		29	29

The defined benefit pension plan was amended to lock-in all benefits earned through March 31, 2013 based on the plan formula using years of service and average monthly compensation as of March 31,

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2013.  The amendments also provide that, for service commencing January 1, 2013, additional benefits will be earned equal to 1% of career average pay for each year that a participant completes at least 1,000 hours of service.  Also, effective April 1, 2013, participants who are eligible to receive required minimum distributions due to attaining age 70 ½ will be required to begin payment of benefits even though they may remain employed by us.

We made no contribution to our pension or other post-retirement benefit plans during the quarter ended March 31, 2013.  While we are not required to make a minimum contribution, we anticipate making a $4.5 million tax-deductible contribution to our defined benefit pension plan for the year ending December 31, 2013.

(9)         Disclosures About Fair Value of Financial Instruments

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

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

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

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

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

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

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

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

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

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

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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 included 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.

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Borrowed Funds

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

Junior Subordinated Debentures

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

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

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

Off-Balance Sheet Financial Instruments

These financial instruments generally are not sold or traded, and estimated fair values are not readily available. However, the fair value of commitments to extend credit and standby letters of credit is estimated using the fees currently charged to enter into similar agreements. Commitments to extend credit are generally short-term in nature and, if drawn upon, are issued under current market terms. At March 31, 2013 and December 31, 2012, there was no significant unrealized appreciation or depreciation on these financial instruments.

The following table sets forth the carrying amount and estimated fair value of our financial instruments included in the consolidated statement of financial condition at March 31, 2013:

	Carrying		Estimated
	amount		fair value	Level 1	Level 2	Level 3
Financial assets:
Cash and cash equivalents	$	585,190	585,190	585,190	—	—
Securities available-for-sale	1,112,104		1,112,104	25,498	1,075,536	11,070
Securities held-to-maturity	143,253		149,105	—	149,105	—
Loans receivable, net	5,538,276		5,880,565	3,823	—	5,876,742
Accrued interest receivable	23,963		23,963	23,963	—	—
FHLB Stock	47,332		47,332	—	—	—
Total financial assets	$	7,450,118	7,798,259	638,474	1,224,641	5,887,812
Financial liabilities:
Savings and checking accounts	$	3,979,099	3,979,099	3,979,099	—	—
Time deposits	1,821,052		1,864,197	—	—	1,864,197
Borrowed funds	859,860		922,004	144,484	—	777,520
Junior subordinated debentures	103,094		115,032	—	—	115,032
Cash flow hedges - swaps	11,885		11,885	—	11,885	—
Accrued interest payable	1,180		1,180	1,180	—	—
Total financial liabilities	$	6,776,170	6,893,397	4,124,763	11,885	2,756,749

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

	Carrying		Estimated
	amount		fair value	Level 1	Level 2	Level 3
Financial assets:
Cash and cash equivalents	$	451,704	451,704	451,704	—	—
Securities available-for-sale	1,079,074		1,079,074	19,304	1,048,651	11,119
Securities held-to-maturity	155,081		161,969	—	161,969	—
Loans receivable, net	5,629,261		5,952,688	15,441	—	5,937,247
Accrued interest receivable	23,313		23,313	23,313	—	—
FHLB Stock	46,834		46,834	—	—	—
Total financial assets	$	7,385,267	7,715,582	509,762	1,210,620	5,948,366
Financial liabilities:
Savings and checking accounts	$	3,878,511	3,878,511	3,878,511	—	—
Time deposits	1,886,089		1,927,844	—	—	1,927,844
Borrowed funds	860,047		935,384	164,531	—	770,853
Junior subordinated debentures	103,094		116,066	—	—	116,066
Cash flow hedges - swaps	12,932		12,932	—	12,932	—
Accrued interest payable	888		888	888	—	—
Total financial liabilities	$	6,741,561	6,871,625	4,043,930	12,932	2,814,763

Fair value estimates are made at a point-in-time, based on relevant market data and information about the instrument. The methods and assumptions detailed above were used in estimating the fair value of financial instruments at both March 31, 2013 and December 31, 2012.  There were no transfers of financial instruments between Level 1 and Level 2 during the quarter ended March 31, 2013.

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The following table represents assets and liabilities measured at fair value on a recurring basis at March 31, 2013 (in thousands):

						Total
						assets at
	Level 1		Level 2		Level 3	fair value
Equity securities	$	25,498	—		—	25,498
Debt securities:
U.S. government and agencies	—		38		—	38
Government sponsored enterprises	—		256,453		—	256,453
States and political subdivisions	—		127,497		—	127,497
Corporate	—		9,487		11,070	20,557
Total debt securities	—		393,475		11,070	404,545
Residential mortgage-backed securities:
GNMA	—		38,020		—	38,020
FNMA	—		96,837		—	96,837
FHLMC	—		64,174		—	64,174
Non-agency	—		689		—	689
Collateralized mortgage obligations:
GNMA	—		17,104		—	17,104
FNMA	—		200,737		—	200,737
FHLMC	—		243,876		—	243,876
SBA	—		14,372		—	14,372
Non-agency	—		6,252		—	6,252
Total mortgage-backed securities	—		682,061		—	682,061
Interest rate swaps	—		(11,885	)	—	(11,885	)
Total assets	$	25,498	1,063,651		11,070	1,100,219

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

						Total
						assets at
	Level 1		Level 2		Level 3	fair value
Equity securities	$	19,304	—		—	19,304
Debt securities:
U.S. government and agencies	—		40		—	40
Government sponsored enterprises	—		238,314		—	238,314
States and political subdivisions	—		134,208		—	134,208
Corporate	—		11,584		11,119	22,703
Total debt securities	—		384,146		11,119	395,265
Residential mortgage-backed securities:
GNMA	—		41,182		—	41,182
FNMA	—		106,863		—	106,863
FHLMC	—		52,559		—	52,559
Non-agency	—		695		—	695
Collateralized mortgage obligations:
GNMA	—		22,963		—	22,963
FNMA	—		189,364		—	189,364
FHLMC			228,631			228,631
SBA	—		15,775		—	15,775
Non-agency	—		6,473		—	6,473
Total mortgage-backed securities	—		664,505		—	664,505
Interest rate swaps	—		(12,932	)	—	(12,932	)
Total assets	$	19,304	1,035,719		11,119	1,066,142

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The table below presents a reconciliation of all assets and liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the quarters ended March 31, 2013 and 2012 (in thousands):

	2013			2012
	Debt			Debt
	securities			securities
Balance at January 1,	$	11,119		9,657
Total net realized investment gains/ (losses) and net change in unrealized appreciation/(depreciation):
Included in net income as OTTI	—			—
Included in other comprehensive income	(49		)	(1,367	)
Purchases	—			—
Sales	—			—
Transfers in to Level 3	—			—
Transfers out of Level 3	—			—
Balance at March 31,	$	11,070		8,290

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 March 31, 2013 (in thousands):

					Total
					assets at
	Level 1		Level 2	Level 3	fair value
Loans measured for impairment	$	—	—	81,805	81,805
Real estate owned	—		—	24,035	24,035
Total assets	$	—	—	105,840	105,840

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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, 2012 (in thousands):

					Total
					assets at
	Level 1		Level 2	Level 3	fair value
Loans measured for impairment	$	—	—	84,493	84,493
Real estate owned	—		—	26,165	26,165
Total assets	$	—	—	110,658	110,658

Impaired loans — A loan is considered to be impaired as described in the Overview of Critical Accounting Policies Involving Estimates, Allowance for Loan Losses section.  We classify loans individually evaluated for impairment that require a specific or TDR 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 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 March 31, 2013 (dollar amounts in thousands):

	Fair value		Valuation techniques	Significant unobservable inputs	Range (weighted average)
Debt securities	$	11,070	Discounted cash flow	Discount margin	0.35% to 2.1% (0.68)%
				Default rates	1.00%
				Prepayment speeds	1.00% annually
Loans measured for impairment	81,805		Appraisal value (1)	Estimated cost to sell	10%
Real estate owned	24,035		Appraisal value (1)	Estimated cost to sell	10%

(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 through loan originations and purchases 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 March 31, 2013 (in thousands):

					Net
					carrying
	Servicing			Valuation	value and
	rights			allowance	fair value
Balance at December 31, 2012	$	3,291		—	3,291
Additions/ (reductions)	382			—	382
Amortization	(591		)	—	(591	)
Balance at March 31, 2013	$	3,082		—	3,082

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

					Net
					carrying
	Servicing			Valuation	value and
	rights			allowance	fair value
Balance at December 31, 2011	$	3,655		—	3,655
Additions/ (reductions)	513			—	513
Amortization	(734		)	—	(734	)
Balance at March 31, 2012	$	3,434		—	3,434

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

	March 31,			March 31,
	2013			2012
	(Weighted average)
Forward yield curve (5 year LIBOR swap)	0.9		%	1.3		%
Prepayment rates	15.9		%	20.6		%
Annual service cost per loan	$	68		$	67
Average life expectancy (months)	65			48
Option adjusted spread (basis points) (1)	800			—
Discount rate (2)	—			10.5		%

(1) Stochastic modeling

(2)  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.

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

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three-month LIBOR from a counterparty and pays a fixed rate of 4.61% to the same counterparty calculated on a notional amount of $25.0 million.  The terms of these two swaps are five years and ten years, which expire September 2013 and September 2018, respectively.  The second two swaps modify the re-pricing characteristics of Trust IV, wherein (i) the Company receives interest of three-month LIBOR from a counterparty and pays a fixed rate of 3.85% to the same counterparty calculated on a notional amount of $25.0 million and (ii) the Company receives interest of three-month LIBOR from a counterparty and pays a fixed rate of 4.09% to the same counterparty calculated on a notional amount of $25.0 million.  The terms of these two swaps are seven years and ten years, which expire September 2015 and September 2018, respectively.  The swap agreements were entered into with a counterparty that met our credit standards and the agreements contain collateral provisions protecting the at-risk party.  We believe that the credit risk inherent in the contracts is not significant.  At March 31, 2013, $12.5 million was pledged as collateral to the counterparty.

At March 31, 2013, the fair value of the swap agreements was $(11.9) 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 March 31, 2013 and December 31, 2012 (in thousands):

	March 31,		December 31,
	2012		2011
Fair value	$	11,885	12,932
Notional amount	100,000		100,000
Collateral posted	12,455		13,505

(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.  As of March 31, 2013 we have accrued $2.2 million.  This amount is based on our analysis of currently available information and is subject to significant judgment and a variety of assumptions and uncertainties.  Any such accruals are adjusted thereafter as appropriate to reflect changes in circumstances.  Due to the inherent subjectivity of assessments and unpredictability of outcomes of legal proceedings, any amounts accrued may not represent the ultimate loss to us from legal proceedings.

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 filed a motion for summary judgment and the plaintiff filed a motion for class certification, which we opposed. By way of Opinion and Order dated March 20, 2013, the Court denied our motion for summary judgment as to plaintiff’s individual claims, but also denied plaintiff’s motion for class certification.  Plaintiff has filed a renewed motion for class certification and we will continue to vigorously defend against the plaintiff’s claims and 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

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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, we are 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.

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.  On November 5, 2012, we filed preliminary objections to the Amended Complaint.  Plaintiff filed her opposition to our preliminary objections on December 6, 2012, and we filed our reply in support of the preliminary objections on January 3, 2013. Subsequent briefing has been filed as directed by the Court and we await an Opinion and Order. 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, we are 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.

American Equity Rentals One, LLC v. Northwest Savings Bank

On August 3, 2012, we were named as a defendant in a lawsuit filed in the Circuit Court for Baltimore County, Maryland, No. 03-C-12-00797807 by American Equity Rentals One, LLC, and others, obligors against whom we obtained confessed judgments, upon the borrowers’ default on several related credit facilities.  The obligor-plaintiffs allege tort claims against us and one of our loan officers arising out of the lending relationship.  We are vigorously defending the matter and have moved to dismiss the Plaintiffs’ claims in their entirety for failure to state claims upon which relief can be granted.  The Court has not yet ruled on the motion. 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, we are 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.

USDA v. Kathleen M. Schwab and Brian G. Schwab v. Northwest Savings Bank

On December 19, 2012, the Schwabs filed a Complaint against us in the Court of Common Pleas of Clarion County, Pennsylvania, No. 409-2012 to join us as an additional defendant alleging that if it is determined that the United States Department of Agriculture (“USDA”) is entitled to relief (the mortgages are reformed and corrected by the Court so as to add Brian G. Schwab’s name to the mortgages), then we are solely liable to the USDA or we are jointly liable with the Schwabs, or liable over the Schwabs, with regard to the mortgages held by the USDA.  On February 1, 2013, we filed Preliminary Objections to the Complaint joining us on the grounds that the USDA’s lawsuit does not involve any claim for money.  We await a decision on our Preliminary Objections.  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

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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, we are 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.

Northwest Savings Bank v. Albert S. Marshal and Boca Rio Townhome Association, Inc.

On July 8, 2011, we initiated a mortgage foreclosure lawsuit filed in the Court of Common Pleas, Dauphin County, Pennsylvania, captioned as Northwest Savings Bank v. Albert S. Marshal and Boca Rio Townhome Association, Inc. (“Boca Rio”), No. 2011 CV 6719 MF.  The Complaint seeks to foreclose on mortgages with respect to the real property located at 920 West Areba Avenue, Hershey, Dauphin County, Pennsylvania 17033 (the “Property”).  Defendant Marshal was the mortgagor and Boca Rio is the party to whom the Property was transferred without the mortgages having been paid in full.  In response, on August 8, 2011, Defendant Boca Rio filed its Answer with New Matter and Counterclaim.  In the Counterclaim, Defendant Boca Rio alleges that we violated the Mortgage Satisfaction Act, 21 P.S. §721-1 et. seq., because we did not satisfy the mortgages that Defendant Boca Rio alleges they paid in full.  On August 29, 2011, we filed Preliminary Objections to Defendant Boca Rio’s Counterclaim, seeking dismissal of the Counterclaim because Defendant Boca Rio was not a mortgagor under the Mortgage Satisfaction Act and therefore, did not have standing to bring a claim.  On September 15, 2011, Defendant Boca Rio filed an Answer with New Matter and Amended Counterclaim.  On September 30, 2011, we filed Preliminary Objections to Defendant Boca Rio’s Amended Counterclaim.  On October 11, 2011, Defendant Boca Rio filed its Answer to our Preliminary Objections.  The Court denied our Preliminary Objections on March 6, 2012.  Once discovery is complete, we intend to file a motion for summary judgment, seeking dismissal of the Counterclaim and intend to continue to vigorously defend against Defendant Boca Rio’s claims asserted in the Counterclaim as well as continue to prosecute the mortgage foreclosure action.  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, we are 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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(13)Changes in Accumulated Other Comprehensive Income

The following table shows the changes in accumulated other comprehensive income by component for the periods indicated (in thousands):

	For the quarter ended March 31, 2013
	Unrealized gains and losses on securities available- for-sale			Change in fair value of interest rate swaps		Change in defined benefit pension plans		Total
Balance as of December 31, 2012	$	15,853		(8,405	)	(18,936	)	(11,488	)
Other comprehensive income before reclassification adjustments	670			680		—		1,350
Amounts reclassified from accumulated other comprehensive income (1), (2)	(66		)	—		229		163
Net other comprehensive income	604			680		229		1,513
Balance as of March 31, 2013	$	16,457		(7,725	)	(18,707	)	(9,975	)

	For the quarter ended March 31, 2012
	Unrealized gains and losses on securities available- for-sale		Change in fair value of interest rate swaps		Change in defined benefit pension plans		Total
Balance as of December 31, 2011	$	14,046	(8,864	)	(28,408	)	(23,226	)
Other comprehensive income before reclassification adjustments	1,361		551		—		1,912
Amounts reclassified from accumulated other comprehensive income (3), (4)	96		—		431		527
Net other comprehensive income	1,457		551		431		2,439
Balance as of March 31, 2012	$	15,503	(8,313	)	(27,977	)	(20,787	)

(1)Consists of realized gains on securities (gain on sales of investments, net) of $109, net of tax (income tax expense) of $(43).

(2)Consists of amortization of prior service cost (compensation and employee benefits) of $580 and amortization of net loss (compensation and employee benefits) of $(932), net of tax (income tax expense) of $123.  See note 8.

(3)Consists of realized gains on securities (gain on sales of investments, net) of $80 and other-than-temporary-impairment losses (net impairment losses) of $(238), net of tax (income tax expense) of $62.

(4)Consists of amortization of prior service cost (compensation and employee benefits) of $40 and amortization of net loss (compensation and employee benefits) of $(702), net of tax (income tax expense) of $231.  See note 8.

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

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

· competition among depository and other financial institutions;

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

· adverse changes in the securities markets;

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

· our ability to successfully integrate acquired entities, if any;

· changes in consumer spending, borrowing and savings habits;

· our ability to continue to increase and manage our commercial and residential real estate, multi-family, and commercial and industrial loans;

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

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

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

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

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

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 can be reasonably estimated at the date of the financial statements. We believe, to the best of our knowledge, that all known losses as of the statement of condition dates have been recorded.

For all classes of loans, we consider a loan to be impaired when it is probable that we will be unable to collect all amounts due according to the contractual terms of the loan agreement. In evaluating whether

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a loan is impaired, we consider not only the amount that we expect to collect but also the timing of collection. Generally, if a delay in payment is insignificant (e.g., less than 30 days), a loan is not deemed to be impaired.

When a loan is considered to be impaired, the amount of impairment is measured based on the present value of expected future cash flows discounted at the loan’s effective interest rate, the loan’s market price, or fair value of the collateral, less estimated cost to sell, if the loan is collateral dependent and it is possible we would foreclose on the property. Business Banking loans greater than or equal to $1.0 million are reviewed to determine if they should be individually evaluated for impairment. Smaller balance, homogeneous loans (e.g., primarily residential mortgage and consumer loans) 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 non-performing loans is recognized using the cash basis method. For non-performing loans interest collected is credited to income in the period of recovery or applied to reduce principal if there is sufficient doubt about the collectability of principal.

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

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

·An allowance for impaired loans;

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

·An allowance for homogenous loans based on environmental factors.

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

The allowance for homogeneous loans based on historical factors is a rolling three-year average of 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, not including loans evaluated individually for impairment.

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

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

·An allowance for loans 90 days or more delinquent;

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

·An allowance for homogenous loans based on environmental factors.

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

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

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

We also have an unallocated allowance which is based on our judgment regarding economic conditions, collateral values and industry conditions.

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.

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

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

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

On at least a quarterly basis, we review our investments that are in an unrealized loss position for other-than-temporary impairment (“OTTI”).  An investment security is deemed impaired if the fair value of the investment is less than its amortized cost.  If an investment security is determined to be impaired, we evaluate whether the decline in value is other-than-temporary.  We also consider whether or not we expect to receive all of the contractual cash flows from the investment security based on factors that include, but are not limited to: the credit worthiness of the issuer and the historical and projected performance of the

46

underlying collateral.  Also, we may evaluate the business and financial outlook of the issuer, as well as broader economic performance indicators.  We consider our intent to sell the investment securities and the likelihood that we will not have to sell the investment securities before recovery of their cost basis during our evaluation. Declines in fair value of investment securities that are deemed credit related are recognized in earnings while declines in fair value of investment securities deemed noncredit related are recorded in accumulated other comprehensive income, if we do not intend to sell and it is not likely we will be required to sell.  If we intend to sell the security or if it’s more likely than not that we will be required to sell the security the entire unrealized loss is recorded in earnings.

Goodwill - Goodwill is not subject to amortization but must be evaluated for impairment at least annually and possibly more frequently if certain events or changes in circumstances arise.  Under a quantitative approach, impairment testing requires that the fair value of each reporting unit be compared to its carrying amount, including goodwill.  Reporting units are identified based upon analyzing each of our individual operating segments.  A reporting unit is defined as any distinct, separately identifiable component of an operating segment for which complete, discrete financial information is available that management regularly reviews.  Determining the fair value of a reporting unit requires a high degree of subjective management judgment.  We have established June 30th of each year as the date for conducting the annual goodwill impairment assessment.  As of June 30, 2012, we, through the assistance of an external third party, performed an impairment test on goodwill.  We valued each reporting unit by using a weighted average of four valuation methodologies; comparable transaction approach, control premium approach, public market peers approach and discounted cash flow approach.  Declines in fair value could result in impairment being identified.  As of June 30, 2012, we did not identify any individual reporting unit where the fair value was less than the carrying value.  As of March 31, 2013 no material changes have occurred since that date that would lead us to any other conclusions. Future changes in the economic environment or the operations of the operating units could cause changes to the variables used, which could give rise to declines in the estimated fair value of the reporting units.

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

Other Intangible Assets - Using the purchase method of accounting for acquisitions, we are required to record the assets acquired, including identified intangible assets, and liabilities assumed at their fair values.  Through the assistance of an independent third party, we analyze and prepare a core deposit study for all bank acquisitions or other identifiable intangible asset study, such as customer lists, for all non-bank acquisitions. The core deposit study reflects the cumulative present value benefit of acquiring deposits versus an alternative source of funding. The other identifiable intangible asset study reflects the cumulative present value benefit of acquiring the income stream from an existing customer base versus developing new business relationships.  Based upon analysis, the amount of the premium related to the core deposits or other identifiable intangibles of the business purchased is calculated along with the

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estimated life of the intangible. The intangible, which is recorded in other intangible assets, is then amortized to expense on an accelerated basis over an approximate life of seven years.  If it is subsequently determined that the period of economic benefit has decreased or no longer exists, accelerated amortization or impairment may occur.

Executive Summary and Comparison of Financial Condition

Total assets at March 31, 2013 were $7.994 billion, an increase of $51.9 million, or 0.7%, from $7.943 billion at December 31, 2012.  This increase in assets was due to increases in interest-earning deposits in other financial institutions of $150.2 million and marketable securities available-for-sale of $33.0 million, which were partially offset by a decrease in total loans receivable of $92.2 million. The net increase in total assets was funded by increases in deposits and advances from borrowers for taxes and insurance of $35.6 million and $3.8 million, respectively, as well as net income for the quarter of $15.3 million.

Total loans receivable decreased by $92.2 million, or 1.6%, to $5.610 billion at March 31, 2013, from $5.702 billion at December 31, 2012.  Loan demand was slow during the three months ended March 31, 2013, with originations and line of credit advances of $440.0 million, which was more than offset by loan maturities and principal repayments of $477.1 million and mortgage loan sales of $45.0 million.  Due primarily to the payoff of three classified commercial real estate loans, with a combined balance of $9.5 million, our business banking loan portfolio decreased by $9.9 million, or 0.5%, to $1.965 billion at March 31, 2013 from $1.975 billion at December 31, 2012. Our personal banking loan portfolio decreased by $82.3 million, or 2.2%, to $3.645 billion at March 31, 2013 from $3.728 billion at December 31, 2012.  We believe this decrease is due primarily to consumers’ continued propensity to pay down personal debt and the prolonged winter throughout most of our market area.  We anticipate residential mortgage loan sales to slow and historically approximately fifty percent of our home equity loan production occurs in the second quarter.

Deposit balances continue to increase across all product types with the exception of time deposits. Total deposits increased by $35.6 million, or 0.6%, to $5.800 billion at March 31, 2013 from $5.765 billion at December 31, 2012.  Noninterest-bearing demand deposits increased by $31.9 million, or 4.2%, to $787.3 million at March 31, 2013 from $755.4 million at December 31, 2012. Interest-bearing demand deposits increased by $12.4 million, or 1.5%, to $864.2 million at March 31, 2013 from $851.8 million at December 31, 2012. Savings deposits, including insured money fund accounts, increased by $56.3 million, or 2.5%, to $2.328 billion at March 31, 2013 from $2.271 billion at December 31, 2012. Time deposits decreased by $65.0 million, or 3.4%, to $1.821 billion at March 31, 2013 from $1.886 billion at December 31, 2012.  We believe this continued movement of funds from time deposits to more liquid types of deposit accounts continues to reflect depositors’ dissatisfaction with time deposit rates and their calculated positioning for higher rates in the future.

Borrowed funds decreased by $187,000 to $859.9 million at March 31, 2013, from $860.0 million at December 31, 2012 due to a decrease in repurchase agreements. During the quarter we borrowed $20.0 million from the FHLB with an average maturity of 8.5 years and an average interest rate of approximately 2.0%.  None of our FHLB advances matured during the quarter and the next scheduled maturity is in 2015.

Total shareholders’ equity at March 31, 2013 was $1.148 billion, or $12.23 per share, an increase of $19.1 million, or 1.7%, from $1.128 billion, or $12.05 per share, at December 31, 2012.  This increase was primarily attributable to net income of $15.3 million and other comprehensive income of $1.5 million.

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

48

requirements can initiate certain mandatory, and possibly additional discretionary actions by the regulators that, if undertaken, could have a direct material effect on a company’s financial statements.  Under capital adequacy guidelines and the regulatory framework for prompt corrective action, financial institutions must meet specific capital guidelines that involve quantitative measures of its assets, liabilities and certain off-balance sheet items as calculated under regulatory accounting practices.  Capital amounts and classifications are also subject to qualitative judgments made by the regulators about components, risk-weighting and other factors.

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

	At March 31, 2013
					Minimum capital			Well capitalized
	Actual				requirements (1)			requirements (1)
	Amount		Ratio		Amount	Ratio		Amount	Ratio
Total capital (to risk weighted assts)
Northwest Bancshares, Inc.	$	1,136,409	22.59	%	—	—		—	—
Northwest Savings Bank	890,399		17.80	%	400,218	8.00	%	500,273	10.00	%
Tier I capital (to risk weighted assets)
Northwest Bancshares, Inc.	1,068,819		21.25	%	—	—		—	—
Northwest Savings Bank	827,280		16.54	%	200,109	4.00	%	300,164	6.00	%
Tier I capital (leverage) (to average assets)
Northwest Bancshares, Inc.	1,068,819		13.70	%	—	—		—	—
Northwest Savings Bank	827,280		10.57	%	313,038	4.00	%	391,298	5.00	%

	At December 31, 2012
					Minimum capital			Well capitalized
	Actual				requirements (1)			requirements (1)
	Amount		Ratio		Amount	Ratio		Amount	Ratio
Total capital (to risk weighted assts)
Northwest Bancshares, Inc.	$	1,117,979	21.53	%	—	—		—	—
Northwest Savings Bank	875,676		16.94	%	413,424	8.00	%	516,780	10.00	%
Tier I capital (to risk weighted assets)
Northwest Bancshares, Inc.	1,050,261		20.22	%	—	—		—	—
Northwest Savings Bank	810,727		15.69	%	206,712	4.00	%	310,068	6.00	%
Tier I capital (leverage) (to average assets)
Northwest Bancshares, Inc.	1,050,261		13.43	%	—	—		—	—
Northwest Savings Bank	810,727		10.41	%	311,473	4.00	%	389,340	5.00	%

(1) The Federal Reserve does not yet have formal 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 liquidity ratio as of March 31, 2013 was 17.0%.  We adjust liquidity levels in order to meet funding needs for

49

deposit outflows, payment of real estate taxes and insurance on mortgage loan escrow accounts, repayment of borrowings and loan commitments.  As of March 31, 2013 Northwest had $1.799 billion of additional borrowing capacity available with the FHLB, including $150.0 million on an overnight line of credit, as well as $196.1 million of borrowing capacity available with the Federal Reserve Bank and $80.0 million with two correspondent banks.

We paid $0 and $11.4 million in cash dividends during the quarters ended March 31, 2013 and 2012, respectively.  As was previously announced, the payment of the regular dividend for the first quarter of 2013 was accelerated into the fourth quarter of 2012.  The common stock dividend payout ratio (dividends declared per share divided by net income per share) was 0.0% and 74.4% for the quarters ended March 31, 2013 and 2012, respectively, on dividends of $0.00 per share and $0.12 per share, respectively.  On April 17, 2013, the Board of Directors declared a regular dividend of $0.12 per share and a special dividend of $0.12 per share, both of which are payable on May 16, 2013 to shareholders of record as of May 2, 2013.  This represents the 74th consecutive quarter we have paid a cash dividend.

Nonperforming Assets

The following table sets forth information with respect to nonperforming assets.  Nonaccrual loans are those loans on which the accrual of interest has ceased.  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 through foreclosure or repossession.  Foreclosed property is carried at the lower of its fair value less estimated costs to sell, or the principal balance of the related loan.

	March 31, 2013			December 31, 2012
	(Dollars in thousands)
Loans accounted for on a nonaccrual basis
Personal Banking:
Residential mortgage loans	$	29,902		25,083
Home equity loans	9,569			9,114
Other consumer loans	1,989			1,980
Total Personal Banking	41,460			36,177
Business Banking:
Commercial real estate loans	55,018			57,861
Commercial loans	29,264			26,174
Total Business Banking	84,282			84,035
Total nonaccrual loans	125,742			120,212
Total nonaccrual loans as a percentage of total loans	2.24		%	2.11	%
Total real estate acquired through foreclosure and other real estate owned (“REO”)	24,035			26,165
Total nonperforming assets	$	149,777		146,377
Total nonperforming assets as a percentage of total assets	1.87		%	1.84	%

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

50

in the loan, a specific allowance is allocated for the impairment.  Impaired loans at March 31, 2013 and December 31, 2012 were $177.4 million and $184.3 million, respectively.

Allowance for Loan Losses

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

On an ongoing basis, the Credit Administration department, as well as loan officers, branch managers and department heads, review and monitor the loan portfolio for problem loans.  This portfolio monitoring includes a review of the monthly delinquency reports as well as historical comparisons and trend analysis.  In addition, a meeting is held every quarter with each region to monitor the performance and status of loans on an internal watch list.  On an on-going basis the loan officer in conjunction with a portfolio manager grades or classifies problem loans or potential problem loans based upon their knowledge of the lending relationship and other information previously accumulated.  This rating is also reviewed independently by our Loan Review department on a periodic basis.  Our loan grading system for problem loans is consistent with industry regulatory guidelines which classify loans as “substandard”, “doubtful” or “loss.”  Loans that do not expose us to risk sufficient to warrant classification in one of the previous categories, but which possess some weaknesses, are designated as “special mention”.  A “substandard” loan is any loan that is 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.

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

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

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

The individual impairment measures along with the estimated loss for each homogeneous pool are consolidated into one summary document.   This summary schedule along with the support documentation

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used to establish this schedule is presented to the Credit Committee on a quarterly basis.  The Credit Committee reviews the processes and documentation presented, reviews the concentration of credit by industry and customer, lending products, activity, competition and collateral values, as well as economic conditions in general and in each of our market areas.  Based on this review and discussion, the appropriate amount of ALL is estimated and any adjustments to reconcile the actual ALL with this estimate are determined.  In addition, the Credit Committee considers if any changes to the methodology are needed.  The Credit Committee also reviews and discusses delinquency trends, nonperforming asset amounts and ALL levels and ratios compared to our peer group as well as state and national statistics.  Similarly, following the Credit Committee’s review and approval, a review is performed by the Risk Management Committee of the Board of Directors on a quarterly basis.

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

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

We utilize a consistent methodology each period when analyzing the adequacy of the allowance for loan losses and the related provision for loan losses.  As part of the analysis as of March 31, 2013, 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 decreased $1.2 million, or 1.7%, to $72.0 million, or 1.28% of total loans, at March 31, 2013 from $73.2 million, or 1.28% of total loans, at December 31, 2012. This decrease is primarily attributable to a decrease in classified loans of $15.3 million, or 6.1%, to $235.5 million at March 31, 2013 from $250.8 million at December 31, 2012, a decrease in total delinquent loans of $10.2 million, or 6.5%, to $147.2 million at March 31, 2013 from $157.4 million at December 31, 2012 and a decrease in our total loan portfolio of $92.2 million, or 1.6%, during the quarter.

We also consider how the level of nonperforming loans and historical charge-offs have influenced the required amount of allowance for loan losses.   Nonperforming loans of $125.7 million or 2.24% of total loans, at March 31, 2013 increased by $5.5 million, or 4.6%, from $120.2 million, or 2.11% of total loans, at December 31, 2012.  As a percentage of average loans, annualized net charge-offs increased to 0.59% for the quarter ended March 31, 2013 compared to 0.43% for the quarter ended December 31, 2012.  We believe, to the best of our knowledge, all known losses as of the balance sheet dates have been recorded.

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Comparison of Operating Results for the Quarters Ended March 31, 2013 and 2012

Net income for the quarter ended March 31, 2013 was $15.3 million, or $0.17 per diluted share, an increase of $117,000, or 0.8%, from $15.2 million, or $0.16 per diluted share, for the same quarter last year.  The increase in net income resulted from an increase in noninterest income of $2.3 million. Partially offsetting this increase were a decrease in net interest income of $917,000 and increases in the provision for losses and noninterest expense of $871,000 and $195,000, respectively. A discussion of significant changes follows.  Annualized, net income for the quarter ended March 31, 2013 represents a 5.45% and 0.78% return on average equity and return on average assets, respectively, compared to 5.29% and 0.76% for the same quarter last year.

Interest Income

Total interest income decreased by $6.1 million, or 7.1%, to $80.1 million for the quarter ended March 31, 2013 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 4.37% for the quarter ended March 31, 2013 from 4.70% for the quarter ended March 31, 2012.  The average yield on all categories of interest earning assets decreased when compared to the prior year period, with the exception of Federal Home Loan Bank of Pittsburgh stock (“FHLB”).  Average interest earning assets decreased by $42.6 million, or 0.6%, to $7.333 billion for the quarter ended March 31, 2013 from $7.376 billion for the quarter ended March 31, 2012.

Interest income on loans receivable decreased $4.7 million, or 6.0%, to $73.5 million for the quarter ended March 31, 2013 compared to $78.2 for the quarter ended March 31, 2012.  This decrease in interest income on loans receivable can be attributed to a decline in the average yield which decreased to 5.21% for the quarter ended March 31, 2013 from 5.63% for the quarter ended March 31, 2012.  The continued decline in average yield is due primarily to our variable rate loans adjusting downward as re-pricing dates occur, the historically low level of market interest rates in general and continued pricing pressure for new, as well as existing, credit relationships.  This decrease in average yield was partially offset by an increase in the average balance of loans receivable.  The average balance of loans receivable increased by $59.3 million, or 1.1%, to $5.638 billion for the quarter ended March 31, 2013 from $5.579 billion for the quarter ended March 31, 2012. This increase in average balances can be attributed to growth in our commercial real estate loan portfolio throughout last year which was facilitated by our continued emphasis on building quality business banking relationships.

Interest income on mortgage-backed securities decreased by $1.3 million, or 26.6%, to $3.4 million for the quarter ended March 31, 2013 from $4.7 million for the quarter ended March 31, 2012.  This decrease is the result of decreases in both the average balance and average yield. The average balance of mortgage-backed securities decreased by $21.5 million, or 2.9%, to $725.5 million for the quarter ended March 31, 2013 from $747.0 for the quarter ended March 31, 2012 due primarily to redirecting cash flows to fund the purchase of government agency securities with a shorter duration.  The average yield on mortgage-backed securities decreased to 1.90% for the quarter ending March 31, 2013 from 2.51% for the quarter ending March 31, 2012. The decrease in average yield resulted primarily from the purchase of mortgage-backed securities at generally lower interest rates than the existing portfolio yield.

Interest income on investment securities decreased by $51,000, or 1.7%, to $2.9 million for the quarter ended March 31, 2013 from $3.0 million for the quarter ended March 31, 2012.  This decrease is due to a decrease in the average yield to 2.52% for the quarter ended March 31, 2013 from 3.52% for the quarter ended March 31, 2012.  This decrease is primarily the result of higher rate municipal securities maturing or being called and the purchase of lower yielding, shorter duration government agency securities.  Partially offsetting this decrease was an increase in the average balance of investment securities of $127.3 million, or 37.1%, to $470.4 million for the quarter ended March 31, 2013 from $343.1 million for

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the quarter ended March 31, 2012.  This increase resulted from utilizing excess cash flow in an effort to maintain our net interest margin.

During the second quarter of 2012 the FHLB resumed dividend payments, which had been suspended in 2008.  For the quarter ended March 31, 2013 we received dividends on FHLB stock of $38,000 on an average balance of $46.9 million, resulting in a yield of 0.32%.

Interest income on interest-earning deposits decreased by $129,000, or 33.9%, to $251,000 for the quarter ended March 31, 2013 from $380,000 for the quarter ended March 31, 2012.  This decrease is due to decreases in both the average balance and average yield.  The average balance of interest-earning deposits decreased by $206.3 million, or 31.3%, to $452.4 million for the quarter ended March 31, 2013 from $658.7 million for the quarter ended March 31, 2012, due to the repurchase of common stock and strong loan demand in 2012.  The average yield on interest-earning deposits decreased to 0.22% for the quarter ended March 31, 2013 from 0.23% for the quarter ended March 31, 2012.

Interest Expense

Interest expense decreased by $5.2 million, or 24.9%, to $15.6 million for the quarter ended March 31, 2013 from $20.8 million for the quarter ended March 31, 2012.  This decrease in interest expense was due to a decrease in the average cost of interest-bearing liabilities, which decreased to 1.07% from 1.38%, and a decrease in the average balance of interest-bearing liabilities.  Average interest-bearing liabilities decreased by $101.6 million, or 1.7%, to $5.935 billion for the quarter ended March 31, 2013 from $6.036 billion for the quarter ended March 31, 2012.  The decrease in the cost of funds resulted primarily from the current level of market interest rates which enabled us to reduce the rate of interest paid on all deposit products.  The decrease in average interest-bearing liabilities resulted from a reduction in average time deposits of $387.0 million, or 17.3%, compared to last year.   However, we continue to grow our low cost checking, savings and insured money market accounts, which increased by $265.8 million, or 9.3%, compared to March 31, 2012.

Net Interest Income

Net interest income decreased by $917,000, or 1.4%, to $64.5 million for the quarter ended March 31, 2013 from $65.4 million for the quarter ended March 31, 2012.  This decrease is attributable to the factors discussed above.  As competitive pricing pressure reduces the interest rates on new loan originations and with little room to move downward on the interest rates paid on deposit accounts, we experienced a slight compression of both our net interest spread and margin.  Our net interest rate spread decreased to 3.30% for the quarter ended March 31, 2013 from 3.31% for the quarter ended March 31, 2012 and our net interest margin decreased to 3.52% at March 31, 2013 from 3.55% for the quarter ended March 31, 2012.

Provision for Loan Losses

The provision for loan losses increased by $871,000, or 13.9%, to $7.2 million for the quarter ended March 31, 2013 from $6.3 million for the quarter ended March 31, 2012.  This increase is primarily due to a $24.1 million, or 35.8%, increase in TDRs compared to the prior year and the downgrade of a commercial real estate loan requiring a charge-off of $861,000 which was not previously reserved.  Partially offsetting these factors was a decrease in loans delinquent 90 or more days of $17.6 million, or 19.5%, to $72.6 million at March 31, 2013 from $90.2 million at March 31, 2012.

In determining the amount of the current period provision, we considered the current economic conditions, including unemployment levels and bankruptcy filings, and changes in real estate values and the impact of these factors on the quality of our loan portfolio and historical loss factors.  Net charge-offs for the quarter ended March 31, 2013 were $8.4 million compared to $4.5 million for the quarter ended March

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31, 2012.  Annualized net charge-offs to average loans increased to 0.59% for the quarter ended March 31, 2013 from 0.32% for the quarter ended March 31, 2012. 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 increased by $2.3 million, or 16.4%, to $15.9 million for the quarter ended March 31, 2013 from $13.6 million for the quarter ended March 31, 2012.  The increase is primarily attributable to an increase in insurance commission income and mortgage banking income and a decrease in loss on real estate owned. Loss on real estate owned decreased by $940,000, or 87.9%, to $130,000 for the quarter ended March 31, 2013 from $1.1 million for the quarter ended March 31, 2012. This decrease was due primarily to gains on the sale of properties and the reduction of our portfolio by $4.9 million, to $24.0 million compared to last year.  Insurance commission income increased by $577,000, or 33.6%, to $2.3 million for the quarter ended March 31, 2013 from $1.7 million for the quarter ended March 31, 2012 due to the acquisition of the Bert Insurance Group on December 31, 2012.  Mortgage banking income increased by $425,000, or 80.0%, to $956,000 for the quarter ended March 31, 2013 from $531,000 for the quarter ended March 31, 2012.  This increase resulted from increased sales of residential mortgage loans into the secondary market during the current quarter compared to the same period last year.  Partially offsetting these increases was a decrease in service charges and fees of $235,000, or 2.8%, to $8.2 million for the quarter ended March 31, 2013 from $8.4 million for the quarter ended March 31, 2012, due to lower loan and deposit fee income.

Noninterest Expense

Noninterest expense increased by $195,000, or 0.4%, to $51.5 million for the quarter ended March 31, 2013 from $51.3 million for the quarter ended March 31, 2012.  This increase is primarily the result of increases in premises and occupancy costs and other expense.  Premises and occupancy costs increased by $405,000, or 7.0%, to $6.2 million for the quarter ended March 31, 2013 from $5.7 million for the quarter ended March 31, 2012, due primarily to increased snow removal costs. Other expense increased by $453,000, or 24.7%, to $2.3 million for the quarter ended March 31, 2013 from $1.8 million for the quarter ended March 31, 2012, due primarily to the timing of charitable contributions.  These increases were partially offset by decreases in processing expense, federal deposit insurance premiums and real estate owned expense.  Processing expense decreased by $289,000, or 4.7%, to $5.9 million for the quarter ended March 31, 2013 from $6.1 million for the quarter ended March, 31 2012.  This decrease resulted primarily from lower ATM and debit card processing costs.  Federal deposit insurance premiums decreased by $182,000, or 11.2%, to $1.4 million for the quarter ended March 31, 2013 from $1.6 million for the quarter ended March 31, 2012. This decrease was due to changes by the FDIC in the factors used to calculate premiums.  Real estate owned expense decreased by $141,000, or 19.1%, to $599,000 for the quarter ended March 31, 2013 from $740,000 for the quarter ended March 31, 2012, due primarily to a reduction in the portfolio of foreclosed commercial properties.

Income Taxes

The provision for income taxes for the quarter ended March 31, 2013 increased by $137,000, or 2.2%, to $6.4 million, compared to the same period last year.  This increase in income tax is primarily a result of an increase in income before income taxes of $254,000, or 1.2%.  Our effective tax rate for the quarter ended March 31, 2013 was 29.6% compared to 29.3% for the prior year period.  We do not anticipate our effective tax rate to change substantially during the year.

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Average Balance Sheet

(Dollars in thousands)

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

	Quarter ended March 31,
	2013					2012
				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 $554 and $532, respectively)	$	5,638,332	74,028	5.25	%	5,579,071	78,691	5.67	%
Mortgage-backed securities (c)	725,524		3,441	1.90	%	746,954	4,691	2.51	%
Investment securities (c) (includes FTE adjustments of $1,111and $1,317, respectively)	470,386		4,079	3.47	%	343,059	4,336	5.06	%
FHLB stock	46,868		38	0.32	%	48,246	—	—
Other interest-earning deposits	452,385		251	0.22	%	658,747	380	0.23	%
Total interest-earning assets (includes FTE adjustments of $1,665 and $1,849, respectively)	7,333,495		81,837	4.46	%	7,376,077	88,098	4.80	%
Noninterest earning assets (d)	585,516					615,734
Total assets	$	7,919,011				7,991,811
Liabilities and shareholders’ equity:
Interest-bearing liabilities:
Savings accounts	$	1,180,487	894	0.31	%	1,100,312	1,106	0.40	%
Interest-bearing demand accounts	840,264		139	0.07	%	785,935	227	0.12	%
Money market accounts	1,107,522		742	0.27	%	976,194	965	0.40	%
Certificate accounts	1,849,782		6,039	1.32	%	2,236,823	10,646	1.91	%
Borrowed funds (e)	853,487		6,426	3.05	%	833,843	6,477	3.12	%
Junior subordinated debentures	103,094		1,405	5.45	%	103,094	1,422	5.46	%
Total interest-bearing liabilities	5,934,636		15,645	1.07	%	6,036,201	20,843	1.38	%
Noninterest bearing checking	768,071					715,558
Noninterest bearing liabilities	77,106					85,599
Total liabilities	6,779,813					6,837,358
Shareholders’ equity	1,139,198					1,154,453
Total liabilities and shareholders’ equity	$	7,919,011				7,991,811
Net interest income/ Interest rate spread			66,192	3.39	%		67,255	3.42	%
Net interest-earning assets/ Net interest margin	$	1,398,859		3.61	%	1,339,876		3.65	%
Ratio of interest-earning assets to interest-bearing liabilities	1.24X					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 – 5.21% and 5.63%, respectively; Investment securities – 2.52% and 3.52%, respectively; interest-earning assets – 4.37% and 4.70%, respectively. GAAP basis net interest rate spreads were 3.30% and 3.31%, respectively; and GAAP basis net interest margins were 3.52% and 3.55%, respectively.

56

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 March 31, 2013 and 2012

						Net
	Rate			Volume		Change
Interest earning assets:
Loans	$	(5,668	)	1,005		(4,663	)
Mortgage-backed securities	(1,115		)	(135	)	(1,250	)
Investment securities	(1,866		)	1,609		(257	)
FHLB stock	38			—		38
Other interest-earning deposits	(15		)	(114	)	(129	)
Total interest-earning assets	(8,626		)	2,365		(6,261	)
Interest-bearing liabilities:
Savings accounts	(292		)	80		(212	)
Interest-bearing demand accounts	(104		)	16		(88	)
Money market accounts	(332		)	109		(223	)
Certificate accounts	(2,980		)	(1,627	)	(4,607	)
Borrowed funds	(202		)	151		(51	)
Debentures	(17		)	—		(17	)
Total interest-bearing liabilities	(3,927		)	(1,271	)	(5,198	)
Net change in net interest income	$	(4,699	)	3,636		(1,063	)

57

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 mortgage-backed securities.

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

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

In an effort to assess market risk, we utilize a simulation model to determine the effect of immediate incremental increases and decreases in interest rates on net income and the market value of equity.  Certain assumptions are made regarding loan prepayments and decay rates of savings 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 non-parallel shift of 100 basis points (“bps”), 200 bps and 300 bps in interest rates, the estimated net income may not decrease by more than 10%, 20% and 30%, respectively, within a one-year period.

Market value of equity simulation.  The market value of equity is the present value of assets and liabilities.  Given a non-parallel shift of 100 bps, 200 bps and 300 bps in interest rates, the market value of equity may not decrease by more than 15%, 30% and 35%, respectively, of total shareholders’ equity.

58

The following table illustrates the simulated impact of a 100 bps, 200 bps or 300 bps upward or a 100 bps 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-bearing liability levels at March 31, 2013 remain constant.  The impact of the rate movements was computed by simulating the effect of an immediate and sustained shift in interest rates over a twelve-month period from March 31, 2013 levels.

	Increase									Decrease
	100 bps			200 bps			300 bps			100 bps
Non-parallel shift in interest rates over the next 12 months
Projected percentage increase/ (decrease) in net income	8.1		%	15.5		%	19.1		%	(5.1		)%
Projected increase/ (decrease) in return on average equity	7.9		%	15.1		%	18.6		%	(5.0		)%
Projected increase/ (decrease) in earnings per share	$	0.06		$	0.11		$	0.13		$	(0.03	)
Projected percentage increase/ (decrease) in market value of equity	(3.4		)%	(10.7		)%	(17.3		)%	(4.3		)%

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

ITEM 4. CONTROLS AND PROCEDURES

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

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

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

We are subject to a number of asserted and unasserted claims encountered in the normal course of business.  We believe that any additional liability, other than that which has already been accrued, 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.  See Note 12.

59

Item 1A.  Risk Factors

There are no material changes to the risk factors as previously discussed in Item 1A, to Part I of our 2012 Annual Report on Form 10-K.

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

a.)Not applicable.

b.)Not applicable.

c.)The following table discloses information regarding the repurchase of shares of common stock during the quarter ending March 31, 2013:

Month	Number of shares purchased	Average price paid per share		Total number of shares purchased as part of a publicly announced repurchase plan (1)	Maximum number of shares yet to be purchased under the plan (1)
January	—	$	—	—	1,417,989
February	—	—		—	1,417,989
March	—	—		—	1,417,989
	—	$	—

Month	Number of shares purchased	Average price paid per share		Total number of shares purchased as part of a publicly announced repurchase plan (2)	Maximum number of shares yet to be purchased under the plan (2)
January	—	$	—	—	5,000,000
February	—	—		—	5,000,000
March	—	—		—	5,000,000
	—	$	—

(1)  Reflects the program for 4,750,000 shares announced Septenber 26, 2011.

(2)  Reflects the program for 5,000,000 shares announced December 13, 2012.

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.

60

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

61

Signature

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

		NORTHWEST BANCSHARES, INC.
		(Registrant)
Date:	May 10, 2013	By:	/s/ William J. Wagner
			William J. Wagner
			President and Chief Executive Officer
			(Duly Authorized Officer)
Date:	May 10, 2013	By:	/s/ Gerald J. Ritzert
			Gerald J. Ritzert
			Controller
			(Principal Accounting Officer of the Registrant)

62

EX-31.1

Exhibit 31.1

Certification

I, William J. Wagner, certify that:

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

2.Based on my knowledge, this report does not contain any untrue statements of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

May 10, 2013	/s/ William J. Wagner
Date	William J. Wagner
	Chief Executive Officer

EX-31.2

Exhibit 31.2

Certification

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

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

2.Based on my knowledge, this report does not contain any untrue statements of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

May 10, 2013	/s/ William W. Harvey, Jr.
Date	William W. Harvey, Jr.
	Chief Financial Officer

EX-32.1

Exhibit 32.1

Certification by the Chief Executive Officer and Chief Financial Officer

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

1.	The Company’s quarterly report on Form 10-Q for the period ended March 31, 2013 (the “Report”) fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934, and
2.	The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

May 10, 2013	/s/ William J. Wagner
Date	William J. Wagner
	Chief Executive Officer
May 10, 2013	/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 4) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2013	Dec. 31, 2012
Marketable securities
Total Fair Value	$ 344,524	$ 276,110
Total - Unrealized loss	(4,157)	(4,341)
Corporate investments
Marketable securities
Total Amortized Value	15,312
Total Fair Value	12,933	12,945
Total - Unrealized loss	(2,379)	(2,691)
Corporate investments | Bank Boston Capital Trust
Marketable securities
Total Amortized Value	989
Total Fair Value	771
Total - Unrealized loss	(218)
Corporate investments | Huntington Capital Trust
Marketable securities
Total Amortized Value	1,428
Total Fair Value	1,082
Total - Unrealized loss	(346)
Corporate investments | Commercebank Capital Trust
Marketable securities
Total Amortized Value	890
Total Fair Value	850
Total - Unrealized loss	(40)
Corporate investments | Ocean Shore Capital Trust
Marketable securities
Total Amortized Value	867
Total Fair Value	800
Total - Unrealized loss	(67)
Corporate investments | I-PreTSL I
Marketable securities
Total Amortized Value	1,500
Total Fair Value	590
Total - Unrealized loss	(910)
Corporate investments | I-PreTSL II
Marketable securities
Total Amortized Value	1,500
Total Fair Value	766
Total - Unrealized loss	(734)
Corporate investments | PreTSL XIX
Marketable securities
Total Amortized Value	8,138
Total Fair Value	8,074
Total - Unrealized loss	$ (64)

XML

Goodwill and Other Intangible Assets (Details 2) (USD $) In Thousands, unless otherwise specified	3 Months Ended	12 Months Ended	3 Months Ended	12 Months Ended
	Mar. 31, 2013	Dec. 31, 2012	Mar. 31, 2013 Community Banks	Dec. 31, 2012 Community Banks	Mar. 31, 2013 Consumer Finance	Dec. 31, 2012 Consumer Finance	Dec. 31, 2011 Consumer Finance
Changes in the carrying amount of goodwill
Balance at the beginning of the period	$ 174,461	$ 171,882	$ 172,848	$ 170,269	$ 1,613	$ 1,613	$ 1,613
Goodwill acquired	2	2,579	2	2,579
Balance at the end of the period	$ 174,463	$ 174,461	$ 172,850	$ 172,848	$ 1,613	$ 1,613	$ 1,613
Significant changes in operations	0.00%

XML

Loans receivable (Details 5) (USD $) In Thousands, unless otherwise specified	3 Months Ended	12 Months Ended
	Mar. 31, 2013	Dec. 31, 2012
Composition of impaired loans by portfolio segment and by class of financing receivable
Nonaccrual loans 90 or more days delinquent	$ 72,635	$ 68,347
Nonaccrual loans less than 90 days delinquent	53,107	51,865
Loans less than 90 days delinquent reviewed for impairment	29,114	33,282
TDRs less than 90 days delinquent not included elsewhere	22,563	30,817
Total impaired loans	177,419	184,311
Average recorded investment in nonaccrual impaired loans	177,536	190,476
Interest income recognized on nonaccrual impaired loans	1,436	6,524
Residential mortgage loans
Composition of impaired loans by portfolio segment and by class of financing receivable
Nonaccrual loans 90 or more days delinquent	24,416	24,286
Home equity loans
Composition of impaired loans by portfolio segment and by class of financing receivable
Nonaccrual loans 90 or more days delinquent	7,967	8,479
Other consumer loans
Composition of impaired loans by portfolio segment and by class of financing receivable
Nonaccrual loans 90 or more days delinquent	1,802	1,936
Commercial real estate
Composition of impaired loans by portfolio segment and by class of financing receivable
Nonaccrual loans 90 or more days delinquent	22,204	24,550
Commercial loans
Composition of impaired loans by portfolio segment and by class of financing receivable
Nonaccrual loans 90 or more days delinquent	16,246	9,096
Personal Banking
Composition of impaired loans by portfolio segment and by class of financing receivable
Nonaccrual loans 90 or more days delinquent	34,185	34,701
Nonaccrual loans less than 90 days delinquent	7,275	1,476
TDRs less than 90 days delinquent not included elsewhere	4,274	4,363
Total impaired loans	45,734	40,540
Average recorded investment in nonaccrual impaired loans	43,349	40,454
Interest income recognized on nonaccrual impaired loans	289	1,060
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	24,416	24,286
Nonaccrual loans less than 90 days delinquent	5,486	797
TDRs less than 90 days delinquent not included elsewhere	3,000	3,011
Total impaired loans	32,902	28,094
Average recorded investment in nonaccrual impaired loans	31,013	28,078
Interest income recognized on nonaccrual impaired loans	190	683
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	7,967	8,479
Nonaccrual loans less than 90 days delinquent	1,602	635
TDRs less than 90 days delinquent not included elsewhere	1,274	1,352
Total impaired loans	10,843	10,466
Average recorded investment in nonaccrual impaired loans	10,312	10,535
Interest income recognized on nonaccrual impaired loans	87	342
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	1,802	1,936
Nonaccrual loans less than 90 days delinquent	187	44
Total impaired loans	1,989	1,980
Average recorded investment in nonaccrual impaired loans	2,024	1,841
Interest income recognized on nonaccrual impaired loans	12	35
Business Banking
Composition of impaired loans by portfolio segment and by class of financing receivable
Nonaccrual loans 90 or more days delinquent	38,450	33,646
Nonaccrual loans less than 90 days delinquent	45,832	50,389
Loans less than 90 days delinquent reviewed for impairment	29,114	33,282
TDRs less than 90 days delinquent not included elsewhere	18,289	26,454
Total impaired loans	131,685	143,771
Average recorded investment in nonaccrual impaired loans	134,187	150,022
Interest income recognized on nonaccrual impaired loans	1,147	5,464
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	22,204	24,550
Nonaccrual loans less than 90 days delinquent	32,814	33,311
Loans less than 90 days delinquent reviewed for impairment	25,471	33,282
TDRs less than 90 days delinquent not included elsewhere	12,778	16,274
Total impaired loans	93,267	107,417
Average recorded investment in nonaccrual impaired loans	88,531	98,891
Interest income recognized on nonaccrual impaired loans	875	3,636
Business Banking | Commercial loans
Composition of impaired loans by portfolio segment and by class of financing receivable
Nonaccrual loans 90 or more days delinquent	16,246	9,096
Nonaccrual loans less than 90 days delinquent	13,018	17,078
Loans less than 90 days delinquent reviewed for impairment	3,643
TDRs less than 90 days delinquent not included elsewhere	5,511	10,180
Total impaired loans	38,418	36,354
Average recorded investment in nonaccrual impaired loans	45,656	51,131
Interest income recognized on nonaccrual impaired loans	$ 272	$ 1,828

XML

Guarantees (Details) (USD $)	3 Months Ended
	Mar. 31, 2013
Guarantees
Maximum potential amount of future payments	$ 43,600,000
Maximum potential amount of future payments fully collateralized	42,800,000
Liability recognized for the obligations	834,000
Recourse provisions for recovery of amounts from third parties	$ 0

XML

Loans receivable (Details 3) (USD $) In Thousands, unless otherwise specified	3 Months Ended	12 Months Ended
	Mar. 31, 2013	Dec. 31, 2012
Loan portfolio by portfolio segment and by class of financing receivable
Recorded investment in loans receivable	$ 5,610,285	$ 5,702,480
Allowance for loan losses	67,982	69,193
Recorded investment in loans on nonaccrual	125,742	120,212
Recorded investment in loans past due 90 days or more and still accruing	781	1,698
TDRs	91,365	89,444
Minimum number of days past due and still accruing	90 days	90 days
Residential mortgage loans
Loan portfolio by portfolio segment and by class of financing receivable
Recorded investment in loans receivable	2,374,384	2,415,649
Home equity loans
Loan portfolio by portfolio segment and by class of financing receivable
Recorded investment in loans receivable	1,052,485	1,076,637
Other consumer loans
Loan portfolio by portfolio segment and by class of financing receivable
Recorded investment in loans receivable	218,464	235,367
Commercial real estate
Loan portfolio by portfolio segment and by class of financing receivable
Recorded investment in loans receivable	1,572,948	1,585,833
Commercial loans
Loan portfolio by portfolio segment and by class of financing receivable
Recorded investment in loans receivable	392,004	388,994
Personal Banking
Loan portfolio by portfolio segment and by class of financing receivable
Recorded investment in loans receivable	3,645,333	3,727,653
Allowance for loan losses	20,949	21,452
Recorded investment in loans on nonaccrual	41,460	36,177
Recorded investment in loans past due 90 days or more and still accruing	758	787
TDRs	7,324	6,936
Personal Banking | Residential mortgage loans
Loan portfolio by portfolio segment and by class of financing receivable
Recorded investment in loans receivable	2,374,384	2,415,649
Allowance for loan losses	7,878	8,002
Recorded investment in loans on nonaccrual	29,902	25,083
Recorded investment in loans past due 90 days or more and still accruing	8	9
TDRs	5,196	5,045
Personal Banking | Home equity loans
Loan portfolio by portfolio segment and by class of financing receivable
Recorded investment in loans receivable	1,052,485	1,076,637
Allowance for loan losses	8,211	8,294
Recorded investment in loans on nonaccrual	9,569	9,114
Recorded investment in loans past due 90 days or more and still accruing		2
TDRs	2,128	1,891
Personal Banking | Other consumer loans
Loan portfolio by portfolio segment and by class of financing receivable
Recorded investment in loans receivable	218,464	235,367
Allowance for loan losses	4,860	5,156
Recorded investment in loans on nonaccrual	1,989	1,980
Recorded investment in loans past due 90 days or more and still accruing	750	776
Business Banking
Loan portfolio by portfolio segment and by class of financing receivable
Recorded investment in loans receivable	1,964,952	1,974,827
Allowance for loan losses	47,033	47,741
Recorded investment in loans on nonaccrual	84,282	84,035
Recorded investment in loans past due 90 days or more and still accruing	23	911
TDRs	84,041	82,508
Business Banking | Commercial real estate
Loan portfolio by portfolio segment and by class of financing receivable
Recorded investment in loans receivable	1,572,948	1,585,833
Allowance for loan losses	35,560	34,499
Recorded investment in loans on nonaccrual	55,018	57,861
Recorded investment in loans past due 90 days or more and still accruing		388
TDRs	50,944	49,826
Business Banking | Commercial loans
Loan portfolio by portfolio segment and by class of financing receivable
Recorded investment in loans receivable	392,004	388,994
Allowance for loan losses	11,473	13,242
Recorded investment in loans on nonaccrual	29,264	26,174
Recorded investment in loans past due 90 days or more and still accruing	23	523
TDRs	$ 33,097	$ 32,682

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Changes in Accumulated Other Comprehensive Income (Tables)

3 Months Ended

Mar. 31, 2013

Changes in Accumulated Other Comprehensive Income

Schedule of changes in accumulated other comprehensive income by component

The following table shows the changes in accumulated other comprehensive income by component for the periods indicated (in thousands):

	For the quarter ended March 31, 2013
	Unrealized gains and losses on securities available- for-sale			Change in fair value of interest rate swaps		Change in defined benefit pension plans		Total
Balance as of December 31, 2012	$	15,853		(8,405	)	(18,936	)	(11,488	)
Other comprehensive income before reclassification adjustments	670			680		—		1,350
Amounts reclassified from accumulated other comprehensive income (1), (2)	(66		)	—		229		163
Net other comprehensive income	604			680		229		1,513
Balance as of March 31, 2013	$	16,457		(7,725	)	(18,707	)	(9,975	)

	For the quarter ended March 31, 2012
	Unrealized gains and losses on securities available- for-sale		Change in fair value of interest rate swaps		Change in defined benefit pension plans		Total
Balance as of December 31, 2011	$	14,046	(8,864	)	(28,408	)	(23,226	)
Other comprehensive income before reclassification adjustments	1,361		551		—		1,912
Amounts reclassified from accumulated other comprehensive income (3), (4)	96		—		431		527
Net other comprehensive income	1,457		551		431		2,439
Balance as of March 31, 2012	$	15,503	(8,313	)	(27,977	)	(20,787	)

(1) Consists of realized gains on securities (gain on sales of investments, net) of $109, net of tax (income tax expense) of $(43).

(2) Consists of amortization of prior service cost (compensation and employee benefits) of $580 and amortization of net loss (compensation and employee benefits) of $(932), net of tax (income tax expense) of $123.  See note 8.

(3) Consists of realized gains on securities (gain on sales of investments, net) of $80 and other-than-temporary-impairment losses (net impairment losses) of $(238), net of tax (income tax expense) of $62.

(4) Consists of amortization of prior service cost (compensation and employee benefits) of $40 and amortization of net loss (compensation and employee benefits) of $(702), net of tax (income tax expense) of $231.  See note 8.

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Earnings Per Share (Details 2) (USD $) In Thousands, except Share data, unless otherwise specified	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012
Earnings Per Share
Net income	$ 15,298	$ 15,181
Weighted average common shares outstanding	90,403,909	94,115,522
Dilutive potential shares due to effect of stock options	474,994	549,811
Total weighted average common shares and dilutive potential shares	90,878,903	94,665,333
Basic earnings per share (in dollars per share)	$ 0.17	$ 0.16
Diluted earnings per share (in dollars per share)	$ 0.17	$ 0.16

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Investment securities and impairment of investment securities (Tables)

3 Months Ended

Mar. 31, 2013

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 March 31, 2013 (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	$	38	—	—		38
Debt issued by government sponsored enterprises:
Due in one year or less	1,999		4	—		2,003
Due in one year - five years	143,055		376	(117	)	143,314
Due in five years - ten years	111,204		103	(171	)	111,136
Equity securities	15,263		10,235	—		25,498
Municipal securities:
Due in one year - five years	10,123		215	—		10,338
Due in five years - ten years	17,100		544	—		17,644
Due after ten years	95,060		4,455	—		99,515
Corporate debt issues:
Due after ten years	22,455		481	(2,379	)	20,557
Residential mortgage-backed securities:
Fixed rate pass-through	92,590		5,359	(45	)	97,904
Variable rate pass-through	96,929		4,892	(6	)	101,815
Fixed rate non-agency CMOs	5,096		378	—		5,474
Fixed rate agency CMOs	275,899		2,985	(1,133	)	277,751
Variable rate non-agency CMOs	805		—	(27	)	778
Variable rate agency CMOs	197,539		1,079	(279	)	198,339
Total residential mortgage-backed securities	668,858		14,693	(1,490	)	682,061
Total marketable securities available-for-sale	$	1,085,155	31,106	(4,157	)	1,112,104

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

			Gross	Gross
			unrealized	unrealized
	Amortized		holding	holding		Fair
	cost		gains	losses		value
Debt issued by the U.S. government and agencies:
Due in one year or less	$	40	—	—		40
Debt issued by government sponsored enterprises:
Due in one year or less	1,999		5	—		2,004
Due in one year - five years	140,352		183	(22	)	140,513
Due in five years - ten years	95,602		460	(265	)	95,797
Equity securities	13,301		6,025	(22	)	19,304
Municipal securities:
Due in one year - five years	9,629		233	—		9,862
Due in five years - ten years	17,355		668	—		18,023
Due after ten years	100,644		5,679	—		106,323
Corporate debt issues:
Due after ten years	24,911		483	(2,691	)	22,703
Residential mortgage-backed securities:
Fixed rate pass-through	85,134		6,266	—		91,400
Variable rate pass-through	104,591		5,314	(6	)	109,899
Fixed rate non-agency CMOs	5,700		156	(236	)	5,620
Fixed rate agency CMOs	227,608		3,462	(744	)	230,326
Variable rate non-agency CMOs	873		—	(20	)	853
Variable rate agency CMOs	225,383		1,345	(321	)	226,407
Total residential mortgage-backed securities	649,289		16,543	(1,327	)	664,505
Total marketable securities available-for-sale	$	1,053,122	30,279	(4,327	)	1,079,074

Schedule of the portfolio of investment securities held-to-maturity

The following table shows the portfolio of investment securities held-to-maturity at March 31, 2013 (in thousands):

			Gross	Gross
			unrealized	unrealized
	Amortized		holding	holding	Fair
	cost		gains	losses	value
Municipal securities:
Due in Five years - ten years	$	4,715	224	—	4,939
Due after ten years	64,573		2,796	—	67,369
Residential mortgage-backed securities:
Fixed rate pass-through	14,430		814	—	15,244
Variable rate pass-through	6,144		128	—	6,272
Fixed rate agency CMOs	49,205		1,840	—	51,045
Variable rate agency CMOs	4,186		50	—	4,236
Total residential mortgage-backed securities	73,965		2,832	—	76,797
Total marketable securities held-to-maturity	$	143,253	5,852	—	149,105

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

			Gross	Gross
			unrealized	unrealized
	Amortized		holding	holding		Fair
	cost		gains	losses		value
Municipal securities:
Due in five years - ten years	$	3,679	160	—		3,839
Due after ten years	65,596		3,743	—		69,339
Residential mortgage-backed securities:
Fixed rate pass-through	16,369		912	—		17,281
Variable rate pass-through	6,548		—	(14	)	6,534
Fixed rate agency CMOs	56,713		2,006	—		58,719
Variable rate agency CMOs	6,176		81	—		6,257
Total residential mortgage-backed securities	85,806		2,999	(14	)	88,791
Total marketable securities held-to-maturity	$	155,081	6,902	(14	)	161,969

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

The following table shows the fair value of and gross unrealized losses on investment securities, aggregated by investment category and length of time that the individual securities have been in a continuous unrealized loss position at March 31, 2013 (in thousands):

	Less than 12 months				12 months or more			Total
			Unrealized			Unrealized			Unrealized
	Fair value		loss		Fair value	loss		Fair value	loss
U.S. government and agencies	$	110,396	(288	)	—	—		110,396	(288	)
Corporate issues	850		(40	)	12,083	(2,339	)	12,933	(2,379	)
Residential mortgage- backed securities - non-agency	—		—		778	(27	)	778	(27	)
Residential mortgage- backed securities - agency	196,799		(1,336	)	23,618	(127	)	220,417	(1,463	)
Total temporarily impaired securities	$	308,045	(1,664	)	36,479	(2,493	)	344,524	(4,157	)

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, 2012 (in thousands):

	Less than 12 months				12 months or more			Total
			Unrealized			Unrealized			Unrealized
	Fair value		loss		Fair value	loss		Fair value	loss
U.S. government and agencies	$	70,128	(286	)	6,537	(1	)	76,665	(287	)
Corporate debt issues	850		(39	)	12,095	(2,652	)	12,945	(2,691	)
Equity securities	601		(21	)	17	(1	)	618	(22	)
Residential mortgage-backed securities - non-agency	—		—		4,357	(256	)	4,357	(256	)
Residential mortgage-backed securities - agency	167,294		(1,055	)	14,231	(30	)	181,525	(1,085	)
Total temporarily impaired securities	$	238,873	(1,401	)	37,237	(2,940	)	276,110	(4,341	)

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 at March 31, 2013 (in thousands):

		Total
		Amortized		Fair	Unrealized		Moody’s/ Fitch
Description	Class	cost		value	losses		ratings
Bank Boston Capital Trust (1)	N/A	$	989	771	(218	)	Ba2/ BB
Huntington Capital Trust	N/A	1,428		1,082	(346	)	Baa3/ BB
Commercebank Capital Trust	N/A	890		850	(40	)	Not rated
Ocean Shore Capital Trust	N/A	867		800	(67	)	Not rated
I-PreTSL I	Mezzanine	1,500		590	(910	)	Not rated/ CCC
I-PreTSL II	Mezzanine	1,500		766	(734	)	Not rated/ B
PreTSL XIX	Senior A-1	8,138		8,074	(64	)	Baa2/ BBB
		$	15,312	12,933	(2,379	)

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

Schedule of the collateral information on the pooled trust preferred securities

The following table provides collateral information on the pooled trust preferred securities included in the previous table at March 31, 2013 (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	99,981
I-PreTSL II	325,500		24,500	301,000	301,000
PreTSL XIX	624,881		137,001	487,880	181,000

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 March 31, 2013 (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	$	177	182	5		—	—
AMAC 2003-6 2A8	366		376	10		—	—
BOAMS 2005-11 1A8	346		487	141		—	(146	)
CWALT 2005-J14 A3	3,581		3,796	215		—	(1,007	)
CFSB 2003-17 2A2	352		357	5		—	—
WAMU 2003-S2 A4	274		276	2		—	—
WFMBS 2003-B A2	805		778	(27	)	—	—
	$	5,901	6,252	351		—	(1,153	)

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 (in thousands):

	2013			2012
Beginning balance at Janaury 1, (1)	$	9,811		11,633
Credit losses on debt securities for which other-than-temporary impairment was not previously recognized	—			—
Reduction for losses realized during the year	(67		)	(1,311	)
Additional credit losses on debt securities for which other-than-temporary impairment was previously recognized	—			238
Ending balance at March 31,	$	9,744		10,560

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

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Loans receivable (Details 7) (USD $)	3 Months Ended
	Mar. 31, 2013 item	Mar. 31, 2012 item
Troubled debt restructurings:
Period of time to return TDRs included in impaired loans to performing status through the fulfilling of contractual terms	6 months	6 months
Number of contracts	58	6
Recorded investment at the time of modification	$ 5,611,000	$ 3,045,000
Current recorded investment	4,838,000	2,837,000
Current allowance	600,000	720,000
Troubled debt restructurings that subsequently defaulted:
Number of contracts	11	2
Recorded investment at the time of modification	17,472,000	1,024,000
Current recorded investment	12,788,000	881,000
Current allowance	2,348,000
Commercial real estate
Troubled debt restructurings that subsequently defaulted:
Number of contracts charged-off	2
Amount of contracts charged-off	650,000
Number of contracts paid off	1
Amount of contracts paid off	310,000
Commercial loans
Troubled debt restructurings that subsequently defaulted:
Number of contracts charged-off	2
Amount of contracts charged-off	17,000
Number of contracts paid off	8
Amount of contracts paid off	353,000
Home equity loans
Troubled debt restructurings that subsequently defaulted:
Number of contracts charged-off	1
Amount of contracts charged-off	23,000
Personal Banking
Troubled debt restructurings:
Number of contracts	5
Recorded investment at the time of modification	466,000
Current recorded investment	447,000
Current allowance	159,000
Troubled debt restructurings that subsequently defaulted:
Number of contracts	2	1
Recorded investment at the time of modification	427,000	449,000
Current recorded investment	367,000	361,000
Current allowance	136,000
Personal Banking | Residential mortgage loans
Troubled debt restructurings:
Number of contracts	2
Recorded investment at the time of modification	179,000
Current recorded investment	162,000
Current allowance	26,000
Troubled debt restructurings that subsequently defaulted:
Number of contracts	1	1
Recorded investment at the time of modification	244,000	449,000
Current recorded investment	237,000	361,000
Current allowance	30,000
Personal Banking | Home equity loans
Troubled debt restructurings:
Number of contracts	3
Recorded investment at the time of modification	287,000
Current recorded investment	285,000
Current allowance	133,000
Troubled debt restructurings that subsequently defaulted:
Number of contracts	1
Recorded investment at the time of modification	183,000
Current recorded investment	130,000
Current allowance	106,000
Business Banking
Troubled debt restructurings:
Number of contracts	53	6
Recorded investment at the time of modification	5,145,000	3,045,000
Current recorded investment	4,391,000	2,837,000
Current allowance	441,000	720,000
Troubled debt restructurings that subsequently defaulted:
Number of contracts	9	1
Recorded investment at the time of modification	17,045,000	575,000
Current recorded investment	12,421,000	520,000
Current allowance	2,212,000
Business Banking | Commercial real estate
Troubled debt restructurings:
Number of contracts	32	3
Recorded investment at the time of modification	3,417,000	1,400,000
Current recorded investment	2,878,000	1,391,000
Current allowance	270,000	636,000
Troubled debt restructurings that subsequently defaulted:
Number of contracts	3	1
Recorded investment at the time of modification	778,000	575,000
Current recorded investment	713,000	520,000
Current allowance	38,000
Business Banking | Commercial loans
Troubled debt restructurings:
Number of contracts	21	3
Recorded investment at the time of modification	1,728,000	1,645,000
Current recorded investment	1,513,000	1,446,000
Current allowance	171,000	84,000
Troubled debt restructurings that subsequently defaulted:
Number of contracts	6
Recorded investment at the time of modification	16,267,000
Current recorded investment	11,708,000
Current allowance	$ 2,174,000

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Investment securities and impairment of investment securities (Details 7) (Municipal securities, USD $)	3 Months Ended
	Mar. 31, 2013
Municipal securities
Marketable securities
Maximum fair value as percentage of amortized cost to compare the stated interest rate to current market rate	80.00%
Municipal securities for which amortized cost exceeds fair value	$ 0

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Investment securities and impairment of investment securities (Details 2) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2013	Dec. 31, 2012
Amortized cost
Total	$ 143,253	$ 155,081
Gross unrealized holding gains
Total	5,852	6,902
Gross unrealized holding losses
Total		(14)
Fair value
Total	149,105	161,969
Municipal securities
Amortized cost
Due in five years - ten years	4,715	3,679
Due after ten years	64,573	65,596
Gross unrealized holding gains
Due in five years - ten years	224	160
Due after ten years	2,796	3,743
Fair value
Due in five years - ten years	4,939	3,839
Due after ten years	67,369	69,339
Residential mortgage-backed securities
Amortized cost
Total	73,965	85,806
Gross unrealized holding gains
Total	2,832	2,999
Gross unrealized holding losses
Total		(14)
Fair value
Total	76,797	88,791
Fixed rate | Pass-through
Amortized cost
Total	14,430	16,369
Gross unrealized holding gains
Total	814	912
Fair value
Total	15,244	17,281
Fixed rate | Agency CMOs
Amortized cost
Total	49,205	56,713
Gross unrealized holding gains
Total	1,840	2,006
Fair value
Total	51,045	58,719
Variable rate | Pass-through
Amortized cost
Total	6,144	6,548
Gross unrealized holding gains
Total	128
Gross unrealized holding losses
Total		(14)
Fair value
Total	6,272	6,534
Variable rate | Agency CMOs
Amortized cost
Total	4,186	6,176
Gross unrealized holding gains
Total	50	81
Fair value
Total	$ 4,236	$ 6,257

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Loans receivable (Details 9) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2013	Dec. 31, 2012
Credit quality indicators
Total loans	$ 5,610,285	$ 5,702,480
Pass
Credit quality indicators
Total loans	5,293,240	5,370,444
Special Mention
Credit quality indicators
Total loans	81,498	81,207
Substandard
Credit quality indicators
Total loans	228,847	244,951
Doubtful
Credit quality indicators
Total loans	5,521	4,829
Loss
Credit quality indicators
Total loans	1,179	1,049
Special mention or substandard | Minimum
Credit quality indicators
Total loans	1,000
Residential mortgage loans
Credit quality indicators
Total loans	2,374,384	2,415,649
Home equity loans
Credit quality indicators
Total loans	1,052,485	1,076,637
Other consumer loans
Credit quality indicators
Total loans	218,464	235,367
Commercial real estate
Credit quality indicators
Total loans	1,572,948	1,585,833
Commercial loans
Credit quality indicators
Total loans	392,004	388,994
Personal Banking
Credit quality indicators
Total loans	3,645,333	3,727,653
Personal Banking | Pass
Credit quality indicators
Total loans	3,617,036	3,698,098
Personal Banking | Substandard
Credit quality indicators
Total loans	27,118	28,458
Personal Banking | Doubtful
Credit quality indicators
Total loans		48
Personal Banking | Loss
Credit quality indicators
Total loans	1,179	1,049
Personal Banking | Residential mortgage loans
Credit quality indicators
Total loans	2,374,384	2,415,649
Personal Banking | Residential mortgage loans | Pass
Credit quality indicators
Total loans	2,355,253	2,395,809
Personal Banking | Residential mortgage loans | Substandard
Credit quality indicators
Total loans	17,952	18,743
Personal Banking | Residential mortgage loans | Doubtful
Credit quality indicators
Total loans		48
Personal Banking | Residential mortgage loans | Loss
Credit quality indicators
Total loans	1,179	1,049
Personal Banking | Home equity loans
Credit quality indicators
Total loans	1,052,485	1,076,637
Personal Banking | Home equity loans | Pass
Credit quality indicators
Total loans	1,044,568	1,068,183
Personal Banking | Home equity loans | Substandard
Credit quality indicators
Total loans	7,917	8,454
Personal Banking | Other consumer loans
Credit quality indicators
Total loans	218,464	235,367
Personal Banking | Other consumer loans | Pass
Credit quality indicators
Total loans	217,215	234,106
Personal Banking | Other consumer loans | Substandard
Credit quality indicators
Total loans	1,249	1,261
Business Banking
Credit quality indicators
Total loans	1,964,952	1,974,827
Business Banking | Pass
Credit quality indicators
Total loans	1,676,204	1,672,346
Business Banking | Special Mention
Credit quality indicators
Total loans	81,498	81,207
Business Banking | Substandard
Credit quality indicators
Total loans	201,729	216,493
Business Banking | Doubtful
Credit quality indicators
Total loans	5,521	4,781
Business Banking | Commercial real estate
Credit quality indicators
Total loans	1,572,948	1,585,833
Business Banking | Commercial real estate | Pass
Credit quality indicators
Total loans	1,351,901	1,352,118
Business Banking | Commercial real estate | Special Mention
Credit quality indicators
Total loans	67,543	68,130
Business Banking | Commercial real estate | Substandard
Credit quality indicators
Total loans	149,190	163,751
Business Banking | Commercial real estate | Doubtful
Credit quality indicators
Total loans	4,314	1,834
Business Banking | Commercial loans
Credit quality indicators
Total loans	392,004	388,994
Business Banking | Commercial loans | Pass
Credit quality indicators
Total loans	324,303	320,228
Business Banking | Commercial loans | Special Mention
Credit quality indicators
Total loans	13,955	13,077
Business Banking | Commercial loans | Substandard
Credit quality indicators
Total loans	52,539	52,742
Business Banking | Commercial loans | Doubtful
Credit quality indicators
Total loans	$ 1,207	$ 2,947

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Legal Proceedings (Details) (USD $) In Millions, unless otherwise specified	Mar. 31, 2013
Legal Proceedings
Loss contingencies accrued	$ 2.2

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Disclosures About Fair Value of Financial Instruments (Details 3) (Debt securities, USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012
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	$ 11,119	$ 9,657
Total net realized investment gains/ (losses) and net change in unrealized appreciation/ (depreciation):
Included in other comprehensive income	49	1,367
Balance at the end of the period	$ 11,070	$ 8,290

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Loans receivable (Details 4) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2013	Dec. 31, 2012
Loan delinquencies
Recorded investment in loans receivable	$ 5,610,285	$ 5,702,480
Recorded investment in loans receivable (as a percent)	100.00%	100.00%
90 Days or Greater Delinquent	72,635	68,347
Loans 90 or more days delinquent (as a percent)	1.20%	1.20%
Pennsylvania
Loan delinquencies
Recorded investment in loans receivable	4,257,588	4,278,474
Recorded investment in loans receivable (as a percent)	75.90%	75.00%
90 Days or Greater Delinquent	40,314	43,550
Loans 90 or more days delinquent (as a percent)	1.00%	1.00%
New York
Loan delinquencies
Recorded investment in loans receivable	784,317	779,243
Recorded investment in loans receivable (as a percent)	14.00%	13.70%
90 Days or Greater Delinquent	2,944	3,727
Loans 90 or more days delinquent (as a percent)	0.50%	0.50%
Ohio
Loan delinquencies
Recorded investment in loans receivable	79,798	80,323
Recorded investment in loans receivable (as a percent)	1.40%	1.40%
90 Days or Greater Delinquent	499	363
Loans 90 or more days delinquent (as a percent)	0.50%	0.50%
Maryland
Loan delinquencies
Recorded investment in loans receivable	338,764	345,798
Recorded investment in loans receivable (as a percent)	6.00%	6.10%
90 Days or Greater Delinquent	12,531	12,341
Loans 90 or more days delinquent (as a percent)	3.60%	3.60%
Other
Loan delinquencies
Recorded investment in loans receivable	149,818	218,642
Recorded investment in loans receivable (as a percent)	2.70%	3.80%
90 Days or Greater Delinquent	16,347	8,366
Loans 90 or more days delinquent (as a percent)	3.80%	3.80%
Residential mortgage loans
Loan delinquencies
Recorded investment in loans receivable	2,374,384	2,415,649
90 Days or Greater Delinquent	24,416	24,286
Residential mortgage loans | Pennsylvania
Loan delinquencies
Recorded investment in loans receivable	1,996,459	2,024,520
90 Days or Greater Delinquent	15,506	15,694
Residential mortgage loans | New York
Loan delinquencies
Recorded investment in loans receivable	155,288	158,090
90 Days or Greater Delinquent	949	1,430
Residential mortgage loans | Ohio
Loan delinquencies
Recorded investment in loans receivable	19,139	19,290
90 Days or Greater Delinquent	231	231
Residential mortgage loans | Maryland
Loan delinquencies
Recorded investment in loans receivable	146,116	152,676
90 Days or Greater Delinquent	4,563	3,932
Residential mortgage loans | Other
Loan delinquencies
Recorded investment in loans receivable	57,382	61,073
90 Days or Greater Delinquent	3,167	2,999
Home equity loans
Loan delinquencies
Recorded investment in loans receivable	1,052,485	1,076,637
90 Days or Greater Delinquent	7,967	8,479
Home equity loans | Pennsylvania
Loan delinquencies
Recorded investment in loans receivable	899,546	917,645
90 Days or Greater Delinquent	5,023	5,096
Home equity loans | New York
Loan delinquencies
Recorded investment in loans receivable	108,371	111,461
90 Days or Greater Delinquent	1,378	1,515
Home equity loans | Ohio
Loan delinquencies
Recorded investment in loans receivable	10,361	10,828
90 Days or Greater Delinquent	163	132
Home equity loans | Maryland
Loan delinquencies
Recorded investment in loans receivable	28,185	29,734
90 Days or Greater Delinquent	1,246	1,428
Home equity loans | Other
Loan delinquencies
Recorded investment in loans receivable	6,022	6,969
90 Days or Greater Delinquent	157	308
Other consumer loans
Loan delinquencies
Recorded investment in loans receivable	218,464	235,367
90 Days or Greater Delinquent	1,802	1,936
Other consumer loans | Pennsylvania
Loan delinquencies
Recorded investment in loans receivable	201,368	213,604
90 Days or Greater Delinquent	1,722	1,861
Other consumer loans | New York
Loan delinquencies
Recorded investment in loans receivable	9,879	10,235
90 Days or Greater Delinquent	76	69
Other consumer loans | Ohio
Loan delinquencies
Recorded investment in loans receivable	2,832	3,066
Other consumer loans | Maryland
Loan delinquencies
Recorded investment in loans receivable	1,208	1,291
90 Days or Greater Delinquent		5
Other consumer loans | Other
Loan delinquencies
Recorded investment in loans receivable	3,177	7,171
90 Days or Greater Delinquent	4	1
Commercial real estate
Loan delinquencies
Recorded investment in loans receivable	1,572,948	1,585,833
90 Days or Greater Delinquent	22,204	24,550
Commercial real estate | Pennsylvania
Loan delinquencies
Recorded investment in loans receivable	883,200	853,290
90 Days or Greater Delinquent	15,389	17,406
Commercial real estate | New York
Loan delinquencies
Recorded investment in loans receivable	452,805	443,940
90 Days or Greater Delinquent	541	706
Commercial real estate | Ohio
Loan delinquencies
Recorded investment in loans receivable	28,060	34,261
90 Days or Greater Delinquent	105
Commercial real estate | Maryland
Loan delinquencies
Recorded investment in loans receivable	138,983	136,600
90 Days or Greater Delinquent	4,027	4,298
Commercial real estate | Other
Loan delinquencies
Recorded investment in loans receivable	69,900	117,742
90 Days or Greater Delinquent	2,142	2,140
Commercial loans
Loan delinquencies
Recorded investment in loans receivable	392,004	388,994
90 Days or Greater Delinquent	16,246	9,096
Commercial loans | Pennsylvania
Loan delinquencies
Recorded investment in loans receivable	277,015	269,415
90 Days or Greater Delinquent	2,674	3,493
Commercial loans | New York
Loan delinquencies
Recorded investment in loans receivable	57,974	55,517
90 Days or Greater Delinquent		7
Commercial loans | Ohio
Loan delinquencies
Recorded investment in loans receivable	19,406	12,878
Commercial loans | Maryland
Loan delinquencies
Recorded investment in loans receivable	24,272	25,497
90 Days or Greater Delinquent	2,695	2,678
Commercial loans | Other
Loan delinquencies
Recorded investment in loans receivable	13,337	25,687
90 Days or Greater Delinquent	10,877	2,918
Personal Banking
Loan delinquencies
Recorded investment in loans receivable	3,645,333	3,727,653
90 Days or Greater Delinquent	34,185	34,701
Personal Banking | Pennsylvania
Loan delinquencies
Recorded investment in loans receivable	3,097,373	3,155,769
90 Days or Greater Delinquent	22,251	22,651
Personal Banking | New York
Loan delinquencies
Recorded investment in loans receivable	273,538	279,786
90 Days or Greater Delinquent	2,403	3,014
Personal Banking | Ohio
Loan delinquencies
Recorded investment in loans receivable	32,332	33,184
90 Days or Greater Delinquent	394	363
Personal Banking | Maryland
Loan delinquencies
Recorded investment in loans receivable	175,509	183,701
90 Days or Greater Delinquent	5,809	5,365
Personal Banking | Other
Loan delinquencies
Recorded investment in loans receivable	66,581	75,213
90 Days or Greater Delinquent	3,328	3,308
Personal Banking | Residential mortgage loans
Loan delinquencies
Recorded investment in loans receivable	2,374,384	2,415,649
90 Days or Greater Delinquent	24,416	24,286
Personal Banking | Home equity loans
Loan delinquencies
Recorded investment in loans receivable	1,052,485	1,076,637
90 Days or Greater Delinquent	7,967	8,479
Personal Banking | Other consumer loans
Loan delinquencies
Recorded investment in loans receivable	218,464	235,367
90 Days or Greater Delinquent	1,802	1,936
Business Banking
Loan delinquencies
Recorded investment in loans receivable	1,964,952	1,974,827
90 Days or Greater Delinquent	38,450	33,646
Business Banking | Pennsylvania
Loan delinquencies
Recorded investment in loans receivable	1,160,215	1,122,705
90 Days or Greater Delinquent	18,063	20,899
Business Banking | New York
Loan delinquencies
Recorded investment in loans receivable	510,779	499,457
90 Days or Greater Delinquent	541	713
Business Banking | Ohio
Loan delinquencies
Recorded investment in loans receivable	47,466	47,139
90 Days or Greater Delinquent	105
Business Banking | Maryland
Loan delinquencies
Recorded investment in loans receivable	163,255	162,097
90 Days or Greater Delinquent	6,722	6,976
Business Banking | Other
Loan delinquencies
Recorded investment in loans receivable	83,237	143,429
90 Days or Greater Delinquent	13,019	5,058
Business Banking | Commercial real estate
Loan delinquencies
Recorded investment in loans receivable	1,572,948	1,585,833
90 Days or Greater Delinquent	22,204	24,550
Business Banking | Commercial loans
Loan delinquencies
Recorded investment in loans receivable	392,004	388,994
90 Days or Greater Delinquent	$ 16,246	$ 9,096

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CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012
OPERATING ACTIVITIES:
Net Income	$ 15,298	$ 15,181
Adjustments to reconcile net income to net cash provided by operating activities:
Provision for loan losses	7,158	6,287
Net (gain)/ loss on sale of assets	(727)	628
Net depreciation, amortization and accretion	3,056	2,467
Decrease in other assets	8,754	10,432
(Decrease)/ increase in other liabilities	(5,022)	2,547
Net amortization/ (accretion) on marketable securities	57	(54)
Noncash impairment losses on investment securities		238
Noncash write-down of real estate owned	446	536
Origination of loans held for sale	(32,883)	(50,110)
Proceeds from sale of loans held for sale	45,010	36,982
Noncash compensation expense related to stock benefit plans	1,082	1,023
Net cash provided by operating activities	42,229	26,157
INVESTING ACTIVITIES:
Purchase of marketable securities available-for-sale	(108,326)	(77,491)
Proceeds from maturities and principal reductions of marketable securities held-to-maturity	11,856	14,401
Proceeds from maturities and principal reductions of marketable securities available-for-sale	76,309	68,558
Loan originations	(407,122)	(480,303)
Proceeds from loan maturities and principal reductions	477,091	427,002
(Purchase of)/ proceeds from sale of Federal Home Loan Bank stock	(498)	1,845
Proceeds from sale of real estate owned	4,700	3,263
Sale of real estate owned for investment, net	114	114
Purchase of premises and equipment	(3,284)	(4,346)
Net cash provided by/ (used in) investing activities	50,840	(46,957)
FINANCING ACTIVITIES:
Increase in deposits, net	35,551	89,436
Proceeds from long-term borrowings	20,000
Repayments of long-term borrowings	(17)	(17)
Net (decrease)/ increase in short-term borrowings	(20,170)	8,502
Increase in advances by borrowers for taxes and insurance	3,835	4,112
Cash dividends paid		(11,427)
Proceeds from stock options exercised	1,218	786
Net cash provided by financing activities	40,417	91,392
Net increase in cash and cash equivalents	133,486	70,592
Cash and cash equivalents at beginning of period	451,704	688,297
Net increase in cash and cash equivalents	133,486	70,592
Cash and cash equivalents at end of period	585,190	758,889
Cash and cash equivalents:
Cash and due from banks	71,607	85,050
Interest-earning deposits in other financial institutions	512,949	672,887
Federal funds sold and other short-term investments	634	952
Total cash and cash equivalents	585,190	758,889
Cash paid during the period for:
Interest on deposits and borrowings (including interest credited to deposit accounts of $7,031 and $11,065, respectively)	15,353	20,828
Income taxes	3,587	955
Non-cash activities:
Loan foreclosures and repossessions	2,985	6,557
Sale of real estate owned financed by the Company	$ 269	$ 100

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Disclosures About Fair Value of Financial Instruments (Details 4) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2013	Dec. 31, 2012
Fair value measurement for nonrecurring assets that had a fair market value below the carrying amount
Total assets	$ 105,840	$ 110,658
Loans evaluated for impairment
Fair value measurement for nonrecurring assets that had a fair market value below the carrying amount
Total assets	81,805	84,493
Real estate owned
Fair value measurement for nonrecurring assets that had a fair market value below the carrying amount
Total assets	24,035	26,165
Level 3
Fair value measurement for nonrecurring assets that had a fair market value below the carrying amount
Total assets	105,840	110,658
Level 3 | Loans evaluated for impairment
Fair value measurement for nonrecurring assets that had a fair market value below the carrying amount
Total assets	81,805	84,493
Level 3 | Real estate owned
Fair value measurement for nonrecurring assets that had a fair market value below the carrying amount
Total assets	$ 24,035	$ 26,165

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Investment securities and impairment of investment securities (Details 8) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012
Cumulative roll forward of credit losses recognized in earnings for debt securities held and not intended to be sold:
Beginning balance	$ 9,811	$ 11,633
Reduction for losses realized during the year	(67)	(1,311)
Additional credit losses on debt securities for which other-than-temporary impairment was previously recognized		238
Ending balance	$ 9,744	$ 10,560

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Pension and Other Post-retirement Benefits (Tables)

3 Months Ended

Mar. 31, 2013

Employee benefit plans

Schedule of net periodic costs for the defined benefit pension plans and the postretirement healthcare plans

The following table sets forth the net periodic costs for the defined benefit pension plans and the postretirement healthcare plans for the period indicated (in thousands):

Components of net periodic benefit cost

	Quarter ended March 31,
	Pension benefits					Other post-retirement benefits
	2013			2012		2013	2012
Service cost	$	1,138		1,858		—	—
Interest cost	1,301			1,432		16	17
Expected return on plan assets	(2,138		)	(1,948	)	—	—
Amortization of prior service cost	(580		)	(40	)	—	—
Amortization of the net loss	919			690		13	12
Net periodic benefit cost	$	640		1,992		29	29

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Earnings Per Share (Tables)

3 Months Ended

Mar. 31, 2013

Earnings Per Share

Schedule of computation of basic and diluted earnings per share

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

	Quarter ended
	March 31,
	2013		2012
Reported net income	$	15,298	15,181
Weighted average common shares outstanding	90,403,909		94,115,522
Dilutive potential shares due to effect of stock options	474,994		549,811
Total weighted average common shares and dilutive potential shares	90,878,903		94,665,333
Basic earnings per share:	$	0.17	0.16
Diluted earnings per share:	$	0.17	0.16

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Earnings Per Share (Details) (USD $)			3 Months Ended
	Mar. 31, 2013 Minimum	Mar. 31, 2012 Minimum	Mar. 31, 2013 Stock options
Antidilutive securities excluded from the calculation of earnings per share
Options excluded from the calculation of earnings per share (in shares)			4,500
Average share price during the reporting period (in dollars per share)			$ 12.48
Weighted average exercise price during the reporting period (in dollars per share)	$ 12.45	$ 12.63

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Loans receivable (Details) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2013	Dec. 31, 2012	Mar. 31, 2012	Dec. 31, 2011
Loans Receivable
Total loans receivable, gross	$ 5,703,818	$ 5,792,509
Deferred loan fees	(1,174)	(1,624)
Allowance for loan losses	(72,009)	(73,219)	(72,941)	(71,138)
Total loans, net	5,538,276	5,629,261
Residential mortgage loans
Loans Receivable
Undisbursed loan proceeds	(9,157)	(14,587)
Commercial real estate
Loans Receivable
Undisbursed loan proceeds	(36,583)	(29,868)
Commercial loans
Loans Receivable
Undisbursed loan proceeds	(46,619)	(43,950)
Personal Banking
Loans Receivable
Total loans receivable, gross	3,655,664	3,743,864
Allowance for loan losses	(20,949)	(21,452)	(20,400)	(22,494)
Personal Banking | Loans held for sale
Loans Receivable
Total loans receivable, gross	3,823	15,441
Personal Banking | Residential mortgage loans
Loans Receivable
Total loans receivable, gross	2,380,892	2,416,419
Allowance for loan losses	(7,878)	(8,002)	(7,864)	(8,482)
Personal Banking | Home equity loans
Loans Receivable
Total loans receivable, gross	1,052,485	1,076,637
Allowance for loan losses	(8,211)	(8,294)	(7,947)	(8,687)
Personal Banking | Other consumer loans
Loans Receivable
Total loans receivable, gross	218,464	235,367
Allowance for loan losses	(4,860)	(5,156)	(4,589)	(5,325)
Business Banking
Loans Receivable
Total loans receivable, gross	2,048,154	2,048,645
Allowance for loan losses	(47,033)	(47,741)	(48,011)	(44,228)
Business Banking | Commercial real estate
Loans Receivable
Total loans receivable, gross	1,609,531	1,615,701
Allowance for loan losses	(35,560)	(34,499)	(35,291)	(32,148)
Business Banking | Commercial loans
Loans Receivable
Total loans receivable, gross	438,623	432,944
Allowance for loan losses	$ (11,473)	$ (13,242)	$ (12,720)	$ (12,080)

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Disclosures About Fair Value of Financial Instruments (Tables)

3 Months Ended

Mar. 31, 2013

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

The following table sets forth the carrying amount and estimated fair value of our financial instruments included in the consolidated statement of financial condition at March 31, 2013:

	Carrying		Estimated
	amount		fair value	Level 1	Level 2	Level 3
Financial assets:
Cash and cash equivalents	$	585,190	585,190	585,190	—	—
Securities available-for-sale	1,112,104		1,112,104	25,498	1,075,536	11,070
Securities held-to-maturity	143,253		149,105	—	149,105	—
Loans receivable, net	5,538,276		5,880,565	3,823	—	5,876,742
Accrued interest receivable	23,963		23,963	23,963	—	—
FHLB Stock	47,332		47,332	—	—	—
Total financial assets	$	7,450,118	7,798,259	638,474	1,224,641	5,887,812
Financial liabilities:
Savings and checking accounts	$	3,979,099	3,979,099	3,979,099	—	—
Time deposits	1,821,052		1,864,197	—	—	1,864,197
Borrowed funds	859,860		922,004	144,484	—	777,520
Junior subordinated debentures	103,094		115,032	—	—	115,032
Cash flow hedges - swaps	11,885		11,885	—	11,885	—
Accrued interest payable	1,180		1,180	1,180	—	—
Total financial liabilities	$	6,776,170	6,893,397	4,124,763	11,885	2,756,749

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

	Carrying		Estimated
	amount		fair value	Level 1	Level 2	Level 3
Financial assets:
Cash and cash equivalents	$	451,704	451,704	451,704	—	—
Securities available-for-sale	1,079,074		1,079,074	19,304	1,048,651	11,119
Securities held-to-maturity	155,081		161,969	—	161,969	—
Loans receivable, net	5,629,261		5,952,688	15,441	—	5,937,247
Accrued interest receivable	23,313		23,313	23,313	—	—
FHLB Stock	46,834		46,834	—	—	—
Total financial assets	$	7,385,267	7,715,582	509,762	1,210,620	5,948,366
Financial liabilities:
Savings and checking accounts	$	3,878,511	3,878,511	3,878,511	—	—
Time deposits	1,886,089		1,927,844	—	—	1,927,844
Borrowed funds	860,047		935,384	164,531	—	770,853
Junior subordinated debentures	103,094		116,066	—	—	116,066
Cash flow hedges - swaps	12,932		12,932	—	12,932	—
Accrued interest payable	888		888	888	—	—
Total financial liabilities	$	6,741,561	6,871,625	4,043,930	12,932	2,814,763

Schedule of assets and liabilities measured at fair value on a recurring basis

The following table represents assets and liabilities measured at fair value on a recurring basis at March 31, 2013 (in thousands):

						Total
						assets at
	Level 1		Level 2		Level 3	fair value
Equity securities	$	25,498	—		—	25,498
Debt securities:
U.S. government and agencies	—		38		—	38
Government sponsored enterprises	—		256,453		—	256,453
States and political subdivisions	—		127,497		—	127,497
Corporate	—		9,487		11,070	20,557
Total debt securities	—		393,475		11,070	404,545
Residential mortgage-backed securities:
GNMA	—		38,020		—	38,020
FNMA	—		96,837		—	96,837
FHLMC	—		64,174		—	64,174
Non-agency	—		689		—	689
Collateralized mortgage obligations:
GNMA	—		17,104		—	17,104
FNMA	—		200,737		—	200,737
FHLMC	—		243,876		—	243,876
SBA	—		14,372		—	14,372
Non-agency	—		6,252		—	6,252
Total mortgage-backed securities	—		682,061		—	682,061
Interest rate swaps	—		(11,885	)	—	(11,885	)
Total assets	$	25,498	1,063,651		11,070	1,100,219

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

						Total
						assets at
	Level 1		Level 2		Level 3	fair value
Equity securities	$	19,304	—		—	19,304
Debt securities:
U.S. government and agencies	—		40		—	40
Government sponsored enterprises	—		238,314		—	238,314
States and political subdivisions	—		134,208		—	134,208
Corporate	—		11,584		11,119	22,703
Total debt securities	—		384,146		11,119	395,265
Residential mortgage-backed securities:
GNMA	—		41,182		—	41,182
FNMA	—		106,863		—	106,863
FHLMC	—		52,559		—	52,559
Non-agency	—		695		—	695
Collateralized mortgage obligations:
GNMA	—		22,963		—	22,963
FNMA	—		189,364		—	189,364
FHLMC			228,631			228,631
SBA	—		15,775		—	15,775
Non-agency	—		6,473		—	6,473
Total mortgage-backed securities	—		664,505		—	664,505
Interest rate swaps	—		(12,932	)	—	(12,932	)
Total assets	$	19,304	1,035,719		11,119	1,066,142

Schedule of reconciliation of debt securities measured at fair value on a recurring basis using significant unobservable inputs (Level 3)

The table below presents a reconciliation of all assets and liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the quarters ended March 31, 2013 and 2012 (in thousands):

	2013			2012
	Debt			Debt
	securities			securities
Balance at January 1,	$	11,119		9,657
Total net realized investment gains/ (losses) and net change in unrealized appreciation/(depreciation):
Included in net income as OTTI	—			—
Included in other comprehensive income	(49		)	(1,367	)
Purchases	—			—
Sales	—			—
Transfers in to Level 3	—			—
Transfers out of Level 3	—			—
Balance at March 31,	$	11,070		8,290

Schedule of fair value measurement for nonrecurring assets

 The following table represents the fair value measurement for nonrecurring assets at March 31, 2013 (in thousands):

					Total
					assets at
	Level 1		Level 2	Level 3	fair value
Loans measured for impairment	$	—	—	81,805	81,805
Real estate owned	—		—	24,035	24,035
Total assets	$	—	—	105,840	105,840

The following table represents the fair value measurement for nonrecurring assets at December 31, 2012 (in thousands):

					Total
					assets at
	Level 1		Level 2	Level 3	fair value
Loans measured for impairment	$	—	—	84,493	84,493
Real estate owned	—		—	26,165	26,165
Total assets	$	—	—	110,658	110,658

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

The 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 March 31, 2013 (dollar amounts in thousands):

	Fair value		Valuation techniques	Significant unobservable inputs	Range (weighted average)
Debt securities	$	11,070	Discounted cash flow	Discount margin	0.35% to 2.1% (0.68)%
				Default rates	1.00%
				Prepayment speeds	1.00% annually
Loans measured for impairment	81,805		Appraisal value (1)	Estimated cost to sell	10%
Real estate owned	24,035		Appraisal value (1)	Estimated cost to sell	10%

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Mortgage Loan Servicing (Tables)

3 Months Ended

Mar. 31, 2013

Mortgage Loan Servicing

Schedule of changes in MSRs

The following table shows changes in MSRs at and for the quarter ended March 31, 2013 (in thousands):

					Net
					carrying
	Servicing			Valuation	value and
	rights			allowance	fair value
Balance at December 31, 2012	$	3,291		—	3,291
Additions/ (reductions)	382			—	382
Amortization	(591		)	—	(591	)
Balance at March 31, 2013	$	3,082		—	3,082

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

					Net
					carrying
	Servicing			Valuation	value and
	rights			allowance	fair value
Balance at December 31, 2011	$	3,655		—	3,655
Additions/ (reductions)	513			—	513
Amortization	(734		)	—	(734	)
Balance at March 31, 2012	$	3,434		—	3,434

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

	March 31,			March 31,
	2013			2012
	(Weighted average)
Forward yield curve (5 year LIBOR swap)	0.9		%	1.3		%
Prepayment rates	15.9		%	20.6		%
Annual service cost per loan	$	68		$	67
Average life expectancy (months)	65			48
Option adjusted spread (basis points) (1)	800			—
Discount rate (2)	—			10.5		%

(1) Stochastic modeling

(2)  Static modeling

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CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (Parenthetical) (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS EQUITY
Other comprehensive income, tax (in dollars)	$ (883)	$ (1,461)
Dividends paid, per share (in dollars per share)		$ 0.12

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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)

3 Months Ended

Mar. 31, 2013

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

The following table shows liability derivatives, included in other liabilities, at March 31, 2013 and December 31, 2012 (in thousands):

	March 31,		December 31,
	2012		2011
Fair value	$	11,885	12,932
Notional amount	100,000		100,000
Collateral posted	12,455		13,505

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Investment securities and impairment of investment securities (Details 5) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2013
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	99,981
I-PreTSL II
Collateral information
Total Collateral	325,500
Current deferrals and defaults	24,500
Performing Collateral	301,000
Additional Immediate defaults before causing an interest shortfall	301,000
PreTSL XIX
Collateral information
Total Collateral	624,881
Current deferrals and defaults	137,001
Performing Collateral	487,880
Additional Immediate defaults before causing an interest shortfall	$ 181,000

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Goodwill and Other Intangible Assets (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012	Mar. 31, 2013 Core Deposits	Dec. 31, 2012 Core Deposits	Mar. 31, 2013 Customer and Contract	Dec. 31, 2012 Customer and Contract
Amortizable intangible assets:
Intangible asset - gross			$ 30,578	$ 30,578	$ 6,197	$ 3,779
Acquisitions - The Bert Company						2,418
Less: accumulated amortization			(30,284)	(30,181)	(3,310)	(3,065)
Intangible asset - net			294	397	2,887	3,132
Amortization expense	348	295
Estimated amortization expense
For the year ending December 31, 2013	1,210
For the year ending December 31, 2014	814
For the year ending December 31, 2015	571
For the year ending December 31, 2016	415
For the year ending December 31, 2017	259
For the year ending December 31, 2018	$ 173

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CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (USD $) In Thousands, unless otherwise specified	Mar. 31, 2013	Dec. 31, 2012
Assets
Cash and due from banks	$ 71,607	$ 88,277
Interest-earning deposits in other financial institutions	512,949	362,794
Federal funds sold and other short-term investments	634	633
Marketable securities available-for-sale (amortized cost of $1,085,155 and $1,053,122)	1,112,104	1,079,074
Marketable securities held-to-maturity (fair value of $149,105 and $161,969)	143,253	155,081
Total cash and investments	1,840,547	1,685,859
Personal Banking:
Loans held for sale	3,823	15,441
Residental mortgage loans	2,370,561	2,400,208
Home equity loans	1,052,485	1,076,637
Other consumer loans	218,464	235,367
Total Personal Banking	3,645,333	3,727,653
Business Banking:
Commercial real estate loans	1,572,948	1,585,833
Commercial loans	392,004	388,994
Total Business Banking	1,964,952	1,974,827
Total loans	5,610,285	5,702,480
Allowance for loan losses	(72,009)	(73,219)
Total loans, net	5,538,276	5,629,261
Federal Home Loan Bank stock, at cost	47,332	46,834
Accrued interest receivable	23,963	23,313
Real estate owned, net	24,035	26,165
Premises and equipment, net	138,950	138,824
Bank owned life insurance	138,123	137,044
Goodwill	174,463	174,461
Other intangible assets	3,181	3,529
Other assets	65,620	77,310
Total assets	7,994,490	7,942,600
Liabilities:
Noninterest-bearing demand deposits	787,308	755,429
Interest-bearing demand deposits	864,168	851,771
Savings deposits	2,327,623	2,271,311
Time deposits	1,821,052	1,886,089
Total deposits	5,800,151	5,764,600
Borrowed funds	859,860	860,047
Junior subordinated deferrable interest debentures held by trusts that issued guaranteed capital debt securities	103,094	103,094
Advances by borrowers for taxes and insurance	27,160	23,325
Accrued interest payable	1,180	888
Other liabilities	55,465	62,177
Total liabilities	6,846,910	6,814,131
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, 93,802,335 and 93,652,960 shares issued, respectively	938	937
Paid-in capital	615,160	613,249
Retained earnings	565,594	550,296
Unallocated common stock of Employee Stock Ownership Plan	(24,137)	(24,525)
Accumulated other comprehensive loss	(9,975)	(11,488)
Total shareholders' equity	1,147,580	1,128,469
Total liabilities and shareholders' equity	$ 7,994,490	$ 7,942,600

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Loans receivable (Details 2) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012
Changes in allowance for losses on allocated loans receivable
Balance at the beginning of the period	$ 73,219	$ 71,138
Current period provision	(7,158)	(6,287)
Charge-offs	(9,123)	(5,344)
Recoveries	755	860
Balance at the end of the period	72,009	72,941
Personal Banking
Changes in allowance for losses on allocated loans receivable
Balance at the beginning of the period	21,452	22,494
Current period provision	1,472	662
Charge-offs	(2,453)	(3,222)
Recoveries	478	466
Balance at the end of the period	20,949	20,400
Personal Banking | Residential mortgage loans
Changes in allowance for losses on allocated loans receivable
Balance at the beginning of the period	8,002	8,482
Current period provision	452	327
Charge-offs	(679)	(1,043)
Recoveries	103	98
Balance at the end of the period	7,878	7,864
Personal Banking | Home equity loans
Changes in allowance for losses on allocated loans receivable
Balance at the beginning of the period	8,294	8,687
Current period provision	224	128
Charge-offs	(370)	(892)
Recoveries	63	24
Balance at the end of the period	8,211	7,947
Personal Banking | Other consumer loans
Changes in allowance for losses on allocated loans receivable
Balance at the beginning of the period	5,156	5,325
Current period provision	796	207
Charge-offs	(1,404)	(1,287)
Recoveries	312	344
Balance at the end of the period	4,860	4,589
Business Banking
Changes in allowance for losses on allocated loans receivable
Balance at the beginning of the period	47,741	44,228
Current period provision	5,685	5,511
Charge-offs	(6,670)	(2,122)
Recoveries	277	394
Balance at the end of the period	47,033	48,011
Business Banking | Commercial real estate
Changes in allowance for losses on allocated loans receivable
Balance at the beginning of the period	34,499	32,148
Current period provision	4,857	4,319
Charge-offs	(3,990)	(1,473)
Recoveries	194	297
Balance at the end of the period	35,560	35,291
Business Banking | Commercial loans
Changes in allowance for losses on allocated loans receivable
Balance at the beginning of the period	13,242	12,080
Current period provision	828	1,192
Charge-offs	(2,680)	(649)
Recoveries	83	97
Balance at the end of the period	11,473	12,720
Unallocated
Changes in allowance for losses on allocated loans receivable
Balance at the beginning of the period	4,026	4,416
Current period provision	1	114
Balance at the end of the period	$ 4,027	$ 4,530

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CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Parenthetical) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Unrealized holding gains, tax	$ (436)	$ (870)
Other-than-temporary impairment on securities included in net income, tax	0	(93)
Reclassification adjustment for gains included in net income, tax	43	31
Change in fair value of interest rate swaps, tax	(367)	(297)
Reclassification adjustment for prior period service costs included in net income, tax	$ (123)	$ (231)

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Disclosures About Fair Value of Financial Instruments (Details) (USD $)	3 Months Ended	12 Months Ended
	Mar. 31, 2013	Dec. 31, 2012
Disclosures About Fair Value of Financial Instruments
Significant unrealized appreciation or depreciation in financial instruments	$ 0	$ 0
Financial assets:
Securities available-for-sale	1,112,104,000	1,079,074,000
Accrued interest receivable	23,963,000	23,313,000
Financial liabilities:
Borrowed funds	859,860,000	860,047,000
Junior subordinated debentures	103,094,000	103,094,000
Assets transferred between Level 1 and Level 2	0
Liabilities transferred between Level 1 and Level 2	0
Level 1
Financial assets:
Cash and cash equivalents	585,190,000	451,704,000
Securities available-for-sale	25,498,000	19,304,000
Loans receivable, net	3,823,000	15,441,000
Accrued interest receivable	23,963,000	23,313,000
Total financial assets	638,474,000	509,762,000
Financial liabilities:
Savings and checking accounts	3,979,099,000	3,878,511,000
Borrowed funds	144,484,000	164,531,000
Accrued interest payable	1,180,000	888,000
Total financial liabilities	4,124,763,000	4,043,930,000
Level 2
Financial assets:
Securities available-for-sale	1,075,536,000	1,048,651,000
Securities held-to-maturity	149,105,000	161,969,000
Total financial assets	1,224,641,000	1,210,620,000
Financial liabilities:
Cash flow hedges - swaps	11,885,000	12,932,000
Total financial liabilities	11,885,000	12,932,000
Level 3
Financial assets:
Securities available-for-sale	11,070,000	11,119,000
Loans receivable, net	5,876,742,000	5,937,247,000
Total financial assets	5,887,812,000	5,948,366,000
Financial liabilities:
Time deposits	1,864,197,000	1,927,844,000
Borrowed funds	777,520,000	770,853,000
Junior subordinated debentures	115,032,000	116,066,000
Total financial liabilities	2,756,749,000	2,814,763,000
Carrying amount
Financial assets:
Cash and cash equivalents	585,190,000	451,704,000
Securities available-for-sale	1,112,104,000	1,079,074,000
Securities held-to-maturity	143,253,000	155,081,000
Loans receivable, net	5,538,276,000	5,629,261,000
Accrued interest receivable	23,963,000	23,313,000
FHLB Stock	47,332,000	46,834,000
Total financial assets	7,450,118,000	7,385,267,000
Financial liabilities:
Savings and checking accounts	3,979,099,000	3,878,511,000
Time deposits	1,821,052,000	1,886,089,000
Borrowed funds	859,860,000	860,047,000
Junior subordinated debentures	103,094,000	103,094,000
Cash flow hedges - swaps	11,885,000	12,932,000
Accrued interest payable	1,180,000	888,000
Total financial liabilities	6,776,170,000	6,741,561,000
Estimated fair value
Financial assets:
Cash and cash equivalents	585,190,000	451,704,000
Securities available-for-sale	1,112,104,000	1,079,074,000
Securities held-to-maturity	149,105,000	161,969,000
Loans receivable, net	5,880,565,000	5,952,688,000
Accrued interest receivable	23,963,000	23,313,000
FHLB Stock	47,332,000	46,834,000
Total financial assets	7,798,259,000	7,715,582,000
Financial liabilities:
Savings and checking accounts	3,979,099,000	3,878,511,000
Time deposits	1,864,197,000	1,927,844,000
Borrowed funds	922,004,000	935,384,000
Junior subordinated debentures	115,032,000	116,066,000
Cash flow hedges - swaps	11,885,000	12,932,000
Accrued interest payable	1,180,000	888,000
Total financial liabilities	$ 6,893,397,000	$ 6,871,625,000

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Business Segments (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2013 segment item	Mar. 31, 2012	Dec. 31, 2012
Business Segments
Number of reportable business segments	2
Number of consumer finance offices	52
Business Segments
External interest income	$ 80,134	$ 86,249
Interest expense	15,645	20,843
Provision for loan losses	(7,158)	(6,287)
Noninterest income	15,877	13,640
Noninterest expense	51,471	51,276
Income tax expense (benefit)	6,439	6,302
Net income	15,298	15,181
Total assets	7,994,490	8,069,008	7,942,600
Community Banking
Business Segments
External interest income	74,595	80,405
Intersegment interest income	700	748
Interest expense	14,394	19,540
Provision for loan losses	6,306	5,500
Noninterest income	15,523	13,082
Noninterest expense	48,112	47,878
Income tax expense (benefit)	6,511	6,221
Net income	15,495	15,096
Total assets	7,841,301	7,917,340
Consumer Finance
Business Segments
External interest income	5,201	5,531
Interest expense	700	748
Provision for loan losses	852	787
Noninterest income	319	511
Noninterest expense	3,144	3,196
Income tax expense (benefit)	342	504
Net income	482	807
Total assets	110,775	113,271
All Other
Business Segments
External interest income	338	313
Intersegment interest income	(700)	(748)
Interest expense	551	555
Noninterest income	35	47
Noninterest expense	215	202
Income tax expense (benefit)	(414)	(423)
Net income	(679)	(722)
Total assets	$ 42,414	$ 38,397

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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 $)						3 Months Ended				3 Months Ended			1 Months Ended			1 Months Ended
	Mar. 31, 2013 item	Dec. 31, 2012	Mar. 31, 2013 Interest rate swap agreements item	Mar. 31, 2013 Northwest Bancorp Capital Trust III	Mar. 31, 2013 Northwest Bancorp Capital Trust III Interest rate swap agreements item	Mar. 31, 2013 Northwest Bancorp Capital Trust III Swap 1 Interest rate swap agreements	Mar. 31, 2013 Northwest Bancorp Capital Trust III Swap 2 Interest rate swap agreements	Mar. 31, 2013 Northwest Bancorp Statutory Trust IV	Mar. 31, 2013 Northwest Bancorp Statutory Trust IV Interest rate swap agreements item	Mar. 31, 2013 Northwest Bancorp Statutory Trust IV Swap 3 Interest rate swap agreements	Mar. 31, 2013 Northwest Bancorp Statutory Trust IV Swap 4 Interest rate swap agreements	Mar. 31, 2013 Trust-Preferred Securities	Dec. 31, 2006 Trust-Preferred Securities Northwest Bancorp Capital Trust III	Dec. 05, 2006 Trust-Preferred Securities Northwest Bancorp Capital Trust III	Mar. 31, 2013 Trust-Preferred Securities Northwest Bancorp Capital Trust III Swap 1	Dec. 31, 2006 Trust-Preferred Securities Northwest Bancorp Statutory Trust IV	Dec. 15, 2006 Trust-Preferred Securities Northwest Bancorp Statutory Trust IV	Mar. 31, 2013 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														50,000			50,000
Cumulative trust preferred securities issued, liquidation value per preferred security (in dollars per security)														$ 1,000			$ 1,000
Total value of cumulative trust preferred securities issued														$ 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												5 years
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						5 years	10 years			7 years	10 years

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Legal Proceedings

3 Months Ended

Mar. 31, 2013

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.  As of March 31, 2013 we have accrued $2.2 million.  This amount is based on our analysis of currently available information and is subject to significant judgment and a variety of assumptions and uncertainties.  Any such accruals are adjusted thereafter as appropriate to reflect changes in circumstances.  Due to the inherent subjectivity of assessments and unpredictability of outcomes of legal proceedings, any amounts accrued may not represent the ultimate loss to us from legal proceedings.

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 filed a motion for summary judgment and the plaintiff filed a motion for class certification, which we opposed. By way of Opinion and Order dated March 20, 2013, the Court denied our motion for summary judgment as to plaintiff’s individual claims, but also denied plaintiff’s motion for class certification.  Plaintiff has filed a renewed motion for class certification and we will continue to vigorously defend against the plaintiff’s claims and 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, we are 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.

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.  On November 5, 2012, we filed preliminary objections to the Amended Complaint.  Plaintiff filed her opposition to our preliminary objections on December 6, 2012, and we filed our reply in support of the preliminary objections on January 3, 2013. Subsequent briefing has been filed as directed by the Court and we await an Opinion and Order. 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, we are 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.

American Equity Rentals One, LLC v. Northwest Savings Bank

On August 3, 2012, we were named as a defendant in a lawsuit filed in the Circuit Court for Baltimore County, Maryland, No. 03-C-12-00797807 by American Equity Rentals One, LLC, and others, obligors against whom we obtained confessed judgments, upon the borrowers’ default on several related credit facilities.  The obligor-plaintiffs allege tort claims against us and one of our loan officers arising out of the lending relationship.  We are vigorously defending the matter and have moved to dismiss the Plaintiffs’ claims in their entirety for failure to state claims upon which relief can be granted.  The Court has not yet ruled on the motion. 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, we are 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.

USDA v. Kathleen M. Schwab and Brian G. Schwab v. Northwest Savings Bank

On December 19, 2012, the Schwabs filed a Complaint against us in the Court of Common Pleas of Clarion County, Pennsylvania, No. 409-2012 to join us as an additional defendant alleging that if it is determined that the United States Department of Agriculture (“USDA”) is entitled to relief (the mortgages are reformed and corrected by the Court so as to add Brian G. Schwab’s name to the mortgages), then we are solely liable to the USDA or we are jointly liable with the Schwabs, or liable over the Schwabs, with regard to the mortgages held by the USDA.  On February 1, 2013, we filed Preliminary Objections to the Complaint joining us on the grounds that the USDA’s lawsuit does not involve any claim for money.  We await a decision on our Preliminary Objections.  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, we are 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.

Northwest Savings Bank v. Albert S. Marshal and Boca Rio Townhome Association, Inc.

On July 8, 2011, we initiated a mortgage foreclosure lawsuit filed in the Court of Common Pleas, Dauphin County, Pennsylvania, captioned as Northwest Savings Bank v. Albert S. Marshal and Boca Rio Townhome Association, Inc. (“Boca Rio”), No. 2011 CV 6719 MF.  The Complaint seeks to foreclose on mortgages with respect to the real property located at 920 West Areba Avenue, Hershey, Dauphin County, Pennsylvania 17033 (the “Property”).  Defendant Marshal was the mortgagor and Boca Rio is the party to whom the Property was transferred without the mortgages having been paid in full.  In response, on August 8, 2011, Defendant Boca Rio filed its Answer with New Matter and Counterclaim.  In the Counterclaim, Defendant Boca Rio alleges that we violated the Mortgage Satisfaction Act, 21 P.S. §721-1 et. seq., because we did not satisfy the mortgages that Defendant Boca Rio alleges they paid in full.  On August 29, 2011, we filed Preliminary Objections to Defendant Boca Rio’s Counterclaim, seeking dismissal of the Counterclaim because Defendant Boca Rio was not a mortgagor under the Mortgage Satisfaction Act and therefore, did not have standing to bring a claim.  On September 15, 2011, Defendant Boca Rio filed an Answer with New Matter and Amended Counterclaim.  On September 30, 2011, we filed Preliminary Objections to Defendant Boca Rio’s Amended Counterclaim.  On October 11, 2011, Defendant Boca Rio filed its Answer to our Preliminary Objections.  The Court denied our Preliminary Objections on March 6, 2012.  Once discovery is complete, we intend to file a motion for summary judgment, seeking dismissal of the Counterclaim and intend to continue to vigorously defend against Defendant Boca Rio’s claims asserted in the Counterclaim as well as continue to prosecute the mortgage foreclosure action.  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, we are 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) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2013	Dec. 31, 2012
Amortized cost
Total	$ 1,085,155	$ 1,053,122
Gross unrealized holding gains
Total	31,106	30,279
Gross unrealized holding losses
Total	(4,157)	(4,327)
Fair value
Total	1,112,104	1,079,074
Non-agency CMOs
Gross unrealized holding losses
Total	(351)
Fair value
Total	6,252
Debt issued by the U.S. government and agencies
Amortized cost
Due in one year or less	38	40
Fair value
Due in one year or less	38	40
Debt issued by government sponsored enterprises
Amortized cost
Due in one year or less	1,999	1,999
Due in one year - five years	143,055	140,352
Due in five years - ten years	111,204	95,602
Gross unrealized holding gains
Due in one year or less	4	5
Due in one year - five years	376	183
Due in five years - ten years	103	460
Gross unrealized holding losses
Due in one year - five years	(117)	(22)
Due in five years - ten years	(171)	(265)
Fair value
Due in one year or less	2,003	2,004
Due in one year - five years	143,314	140,513
Due in five years - ten years	111,136	95,797
Equity securities
Amortized cost
Total	15,263	13,301
Gross unrealized holding gains
Total	10,235	6,025
Gross unrealized holding losses
Total		(22)
Fair value
Total	25,498	19,304
Municipal securities
Amortized cost
Due in one year - five years	10,123	9,629
Due in five years - ten years	17,100	17,355
Due after ten years	95,060	100,644
Gross unrealized holding gains
Due in one year - five years	215	233
Due in five years - ten years	544	668
Due after ten years	4,455	5,679
Fair value
Due in one year - five years	10,338	9,862
Due in five years - ten years	17,644	18,023
Due after ten years	99,515	106,323
Corporate debt issues
Amortized cost
Due after ten years	22,455	24,911
Gross unrealized holding gains
Due after ten years	481	483
Gross unrealized holding losses
Due after ten years	(2,379)	(2,691)
Fair value
Due after ten years	20,557	22,703
Residential mortgage-backed securities
Amortized cost
Total	668,858	649,289
Gross unrealized holding gains
Total	14,693	16,543
Gross unrealized holding losses
Total	(1,490)	(1,327)
Fair value
Total	682,061	664,505
Fixed rate | Pass-through
Amortized cost
Total	92,590	85,134
Gross unrealized holding gains
Total	5,359	6,266
Gross unrealized holding losses
Total	(45)
Fair value
Total	97,904	91,400
Fixed rate | Non-agency CMOs
Amortized cost
Total	5,096	5,700
Gross unrealized holding gains
Total	378	156
Gross unrealized holding losses
Total		(236)
Fair value
Total	5,474	5,620
Fixed rate | Agency CMOs
Amortized cost
Total	275,899	227,608
Gross unrealized holding gains
Total	2,985	3,462
Gross unrealized holding losses
Total	(1,133)	(744)
Fair value
Total	277,751	230,326
Variable rate | Pass-through
Amortized cost
Total	96,929	104,591
Gross unrealized holding gains
Total	4,892	5,314
Gross unrealized holding losses
Total	(6)	(6)
Fair value
Total	101,815	109,899
Variable rate | Non-agency CMOs
Amortized cost
Total	805	873
Gross unrealized holding losses
Total	(27)	(20)
Fair value
Total	778	853
Variable rate | Agency CMOs
Amortized cost
Total	197,539	225,383
Gross unrealized holding gains
Total	1,079	1,345
Gross unrealized holding losses
Total	(279)	(321)
Fair value
Total	$ 198,339	$ 226,407

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Business Segments (Tables)

3 Months Ended

Mar. 31, 2013

Business Segments

Financial information for reportable segments

	Community		Consumer
March 31, 2013 ($ in 000’s)	Banking		Finance	All other (1)		Consolidated
External interest income	$	74,595	5,201	338		80,134
Intersegment interest income	700		—	(700	)	—
Interest expense	14,394		700	551		15,645
Provision for loan losses	6,306		852	—		7,158
Noninterest income	15,523		319	35		15,877
Noninterest expense	48,112		3,144	215		51,471
Income tax expense (benefit)	6,511		342	(414	)	6,439
Net income	15,495		482	(679	)	15,298
Total assets	$	7,841,301	110,775	42,414		7,994,490

	Community		Consumer
March 31, 2012 ($ in 000’s)	Banking		Finance	All other (1)		Consolidated
External interest income	$	80,405	5,531	313		86,249
Intersegment interest income	748		—	(748	)	—
Interest expense	19,540		748	555		20,843
Provision for loan losses	5,500		787	—		6,287
Noninterest income	13,082		511	47		13,640
Noninterest expense	47,878		3,196	202		51,276
Income tax expense (benefit)	6,221		504	(423	)	6,302
Net income	15,096		807	(722	)	15,181
Total assets	$	7,917,340	113,271	38,397		8,069,008

(1) Eliminations consist of intercompany loans, interest income and interest expense.

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Changes in Accumulated Other Comprehensive Income(Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012
Changes in accumulated other comprehensive income (net of tax)
Balance at the beginning of the period	$ (11,488)	$ (23,226)
Other comprehensive income before reclassification adjustments	1,350	1,912
Amounts reclassified from accumulated other comprehensive income	163	527
Other comprehensive income	1,513	2,439
Balance at the end of the period	(9,975)	(20,787)
Income tax expense related to compensation and employee benefits	(123)	(231)
Unrealized gains and losses on securities available-for-sale
Changes in accumulated other comprehensive income (net of tax)
Balance at the beginning of the period	15,853	14,046
Other comprehensive income before reclassification adjustments	670	1,361
Amounts reclassified from accumulated other comprehensive income	(66)	96
Other comprehensive income	604	1,457
Balance at the end of the period	16,457	15,503
Realized gains on securities, net of tax	109	80
Other than temporary impairment losses (net impairment losses)		238
Tax on realized gains on securities	43	62
Change in fair value of interest rate swaps
Changes in accumulated other comprehensive income (net of tax)
Balance at the beginning of the period	(8,405)	(8,864)
Other comprehensive income before reclassification adjustments	680	551
Other comprehensive income	680	551
Balance at the end of the period	(7,725)	(8,313)
Change in defined benefit pension plans
Changes in accumulated other comprehensive income (net of tax)
Balance at the beginning of the period	(18,936)	(28,408)
Amounts reclassified from accumulated other comprehensive income	229	431
Other comprehensive income	229	431
Balance at the end of the period	(18,707)	(27,977)
Amortization of prior service cost (compensation and employee benefits)	580	40
Amortization of net loss (compensation and employee benefits)	932	702
Income tax expense related to compensation and employee benefits	$ (123)	$ (231)

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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, 2011	$ 1,154,904	$ 975	$ 659,523	$ 543,598	$ (23,226)	$ (25,966)
Balance (in shares) at Dec. 31, 2011		97,493,046
Comprehensive income:
Net income	15,181			15,181			15,181
Other comprehensive income, net of tax of $(883) and $(1,461) for the three months ended March 31, 2013 and 2012, respectively	2,439				2,439		2,439
Total comprehensive income	17,620			15,181	2,439		17,620
Exercise of stock options	786	1	785
Exercise of stock options (in shares)		100,350
Stock compensation expense	1,023		625			398
Dividends paid ($0.12 per share for the three months ended March 31, 2012)	(11,427)			(11,427)
Balance at Mar. 31, 2012	1,162,906	976	660,933	547,352	(20,787)	(25,568)
Balance (in shares) at Mar. 31, 2012		97,593,396
Balance at Dec. 31, 2012	1,128,469	937	613,249	550,296	(11,488)	(24,525)
Balance (in shares) at Dec. 31, 2012		93,652,960
Comprehensive income:
Net income	15,298			15,298			15,298
Other comprehensive income, net of tax of $(883) and $(1,461) for the three months ended March 31, 2013 and 2012, respectively	1,513				1,513		1,513
Total comprehensive income	16,811			15,298	1,513		16,811
Exercise of stock options	1,218	1	1,217
Exercise of stock options (in shares)		149,375
Stock compensation expense	1,082		694			388
Balance at Mar. 31, 2013	$ 1,147,580	$ 938	$ 615,160	$ 565,594	$ (9,975)	$ (24,137)
Balance (in shares) at Mar. 31, 2013		93,802,335

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CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (Parenthetical) (USD $) In Thousands, except Share data, unless otherwise specified	Mar. 31, 2013	Dec. 31, 2012
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
Marketable securities available-for-sale, amortized cost (in dollars)	$ 1,085,155	$ 1,053,122
Marketable securities held-to-maturity, fair value (in dollars)	$ 149,105	$ 161,969
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	93,802,335	93,652,960

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Earnings Per Share

3 Months Ended

Mar. 31, 2013

Earnings Per Share

Earnings Per Share

(7)           Earnings Per Share

Basic earnings per common share (EPS) is computed by dividing net income available to common shareholders by the weighted-average number of common shares outstanding for the period, without considering any dilutive items. Diluted EPS reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that then shared in the earnings of the Company.  Stock options to purchase 4,500 shares of common stock with a weighted average exercise price of $12.48 per share were outstanding during the three months ended March 31, 2013 but were not included in the computation of diluted earnings per share for this period because the options’ exercise price was greater than the average market price of the common shares of $12.45.  All stock options outstanding during the three months ended March 31, 2012 were included in the computation of diluted earnings per share because the stock options’ exercise price was not greater than the average market price of the common shares of $12.63.

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

	Quarter ended
	March 31,
	2013		2012
Reported net income	$	15,298	15,181
Weighted average common shares outstanding	90,403,909		94,115,522
Dilutive potential shares due to effect of stock options	474,994		549,811
Total weighted average common shares and dilutive potential shares	90,878,903		94,665,333
Basic earnings per share:	$	0.17	0.16
Diluted earnings per share:	$	0.17	0.16

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Document and Entity Information	3 Months Ended
	Mar. 31, 2013	Apr. 30, 2013
Document and Entity Information
Entity Registrant Name	Northwest Bancshares, Inc.
Entity Central Index Key	0001471265
Document Type	10-Q
Document Period End Date	Mar. 31, 2013
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		93,735,174
Document Fiscal Year Focus	2013
Document Fiscal Period Focus	Q1

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

3 Months Ended

Mar. 31, 2013

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):

The following table sets forth the net periodic costs for the defined benefit pension plans and the postretirement healthcare plans for the period indicated (in thousands):

Components of net periodic benefit cost

	Quarter ended March 31,
	Pension benefits					Other post-retirement benefits
	2013			2012		2013	2012
Service cost	$	1,138		1,858		—	—
Interest cost	1,301			1,432		16	17
Expected return on plan assets	(2,138		)	(1,948	)	—	—
Amortization of prior service cost	(580		)	(40	)	—	—
Amortization of the net loss	919			690		13	12
Net periodic benefit cost	$	640		1,992		29	29

The defined benefit pension plan was amended to lock-in all benefits earned through March 31, 2013 based on the plan formula using years of service and average monthly compensation as of March 31, 2013.  The amendments also provide that, for service commencing January 1, 2013, additional benefits will be earned equal to 1% of career average pay for each year that a participant completes at least 1,000 hours of service.  Also, effective April 1, 2013, participants who are eligible to receive required minimum distributions due to attaining age 70 ½ will be required to begin payment of benefits even though they may remain employed by us.

We made no contribution to our pension or other post-retirement benefit plans during the quarter ended March 31, 2013.  While we are not required to make a minimum contribution, we anticipate making a $4.5 million tax-deductible contribution to our defined benefit pension plan for the year ending December 31, 2013.

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CONSOLIDATED STATEMENTS OF INCOME (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012
Interest income:
Loans receivable	$ 73,474	$ 78,159
Mortgage-backed securities	3,441	4,691
Taxable investment securities	905	573
Tax-free investment securities	2,063	2,446
Interest-earning deposits	251	380
Total interest income	80,134	86,249
Interest expense:
Deposits	7,814	12,944
Borrowed funds	7,831	7,899
Total interest expense	15,645	20,843
Net interest income	64,489	65,406
Provision for loan losses	7,158	6,287
Net interest income after provision for loan losses	57,331	59,119
Noninterest income:
Impairment losses on securities		(545)
Noncredit related losses on securities not expected to be sold (recognized in other comprehensive income)		307
Net impairment losses		(238)
Gain on sale of investments, net	101	44
Service charges and fees	8,190	8,425
Trust and other financial services income	2,204	2,116
Insurance commission income	2,295	1,718
Loss on real estate owned, net	(130)	(1,070)
Income from bank owned life insurance	1,085	1,117
Mortgage banking income	956	531
Other operating income	1,176	997
Total noninterest income	15,877	13,640
Noninterest expense:
Compensation and employee benefits	27,930	27,838
Premises and occupancy costs	6,153	5,748
Office operations	3,268	3,324
Processing expenses	5,853	6,142
Marketing expenses	1,900	2,036
Federal deposit insurance premiums	1,438	1,620
Professional services	1,693	1,697
Amortization of intangible assets	348	295
Real estate owned expense	599	740
Other expenses	2,289	1,836
Total noninterest expense	51,471	51,276
Income before income taxes	21,737	21,483
Federal and state income taxes	6,439	6,302
Net income	$ 15,298	$ 15,181
Basic earnings per share (in dollars per share)	$ 0.17	$ 0.16
Diluted earnings per share (in dollars per share)	$ 0.17	$ 0.16

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Business Segments

3 Months Ended

Mar. 31, 2013

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

At or for the quarter ended:

	Community		Consumer
March 31, 2013 ($ in 000’s)	Banking		Finance	All other (1)		Consolidated
External interest income	$	74,595	5,201	338		80,134
Intersegment interest income	700		—	(700	)	—
Interest expense	14,394		700	551		15,645
Provision for loan losses	6,306		852	—		7,158
Noninterest income	15,523		319	35		15,877
Noninterest expense	48,112		3,144	215		51,471
Income tax expense (benefit)	6,511		342	(414	)	6,439
Net income	15,495		482	(679	)	15,298
Total assets	$	7,841,301	110,775	42,414		7,994,490

	Community		Consumer
March 31, 2012 ($ in 000’s)	Banking		Finance	All other (1)		Consolidated
External interest income	$	80,405	5,531	313		86,249
Intersegment interest income	748		—	(748	)	—
Interest expense	19,540		748	555		20,843
Provision for loan losses	5,500		787	—		6,287
Noninterest income	13,082		511	47		13,640
Noninterest expense	47,878		3,196	202		51,276
Income tax expense (benefit)	6,221		504	(423	)	6,302
Net income	15,096		807	(722	)	15,181
Total assets	$	7,917,340	113,271	38,397		8,069,008

(1) Eliminations consist of intercompany loans, interest income and interest expense.

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Basis of Presentation and Informational Disclosures

3 Months Ended

Mar. 31, 2013

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 March 31, 2013, 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, Northwest Financial Services, Inc., Northwest Advisors, Inc., Northwest Capital Group, Inc., Boetger & Associates, Inc., Allegheny Services, Inc., Great Northwest Corporation, Veracity Benefit Designs, Inc. and The Bert Company.  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, 2012 updated, as required, for any new pronouncements or changes.

The results of operations for the three months ended March 31, 2013 are not necessarily indicative of the results that may be expected for the year ending December 31, 2013, or any other period.

Stock-Based Compensation

Stock-based compensation expense of $1.1 million and $1.0 million for the three months ended March 31, 2013 and 2012, respectively, was recognized in compensation expense relating to our stock benefit plans.  At March 31, 2013 there was compensation expense of $5.3 million to be recognized for awarded but unvested stock options and $13.7 million for unvested common share awards.

Income Taxes- Uncertain Tax Positions

Accounting standards prescribe a comprehensive model for how a company should recognize, measure, present and disclose in its financial statements uncertain tax positions that the company has taken or expects to take on a tax return.  A tax benefit from an uncertain position may be recognized only if it is “more likely than not” that the position is sustainable, based on its technical merits.  The tax benefit of a qualifying position is the largest amount of tax benefit that is greater than 50% likely of being realized upon ultimate settlement with a taxing authority having full knowledge of all relevant information.  As of March 31, 2013 we had no liability for unrecognized tax benefits.

We recognize interest accrued related to: (1) unrecognized tax benefits in federal and state income taxes and (2) refund claims in other operating income.  We recognize penalties (if any) in federal and state income taxes.  There is no amount accrued for the payment of interest or penalties at March 31, 2013.  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.

Recent Accounting Pronouncements

In February 2013, FASB issued ASU No. 2013-02, “Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income.”  This guidance requires entities to provide information about the amounts reclassified out of accumulated other comprehensive income by component. Additionally, entities are required to present significant amounts reclassified out of other comprehensive income by the respective line items of net income, but only if the amount reclassified is required under U.S. GAAP to be reclassified to net income in its entirety in the same reporting period.  For other amounts that are not required to be reclassified in their entirety to net income, entities are required to provide additional detail about these amounts.  This guidance is effective prospectively for reporting periods beginning after December 15, 2012.  The adoption of this standard did not have a material impact on our Consolidated Financial Statements.  See Note 13.

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Changes in Accumulated Other Comprehensive Income

3 Months Ended

Mar. 31, 2013

Changes in Accumulated Other Comprehensive Income

Changes in Accumulated Other Comprehensive Income

(13) Changes in Accumulated Other Comprehensive Income

The following table shows the changes in accumulated other comprehensive income by component for the periods indicated (in thousands):

	For the quarter ended March 31, 2013
	Unrealized gains and losses on securities available- for-sale			Change in fair value of interest rate swaps		Change in defined benefit pension plans		Total
Balance as of December 31, 2012	$	15,853		(8,405	)	(18,936	)	(11,488	)
Other comprehensive income before reclassification adjustments	670			680		—		1,350
Amounts reclassified from accumulated other comprehensive income (1), (2)	(66		)	—		229		163
Net other comprehensive income	604			680		229		1,513
Balance as of March 31, 2013	$	16,457		(7,725	)	(18,707	)	(9,975	)

	For the quarter ended March 31, 2012
	Unrealized gains and losses on securities available- for-sale		Change in fair value of interest rate swaps		Change in defined benefit pension plans		Total
Balance as of December 31, 2011	$	14,046	(8,864	)	(28,408	)	(23,226	)
Other comprehensive income before reclassification adjustments	1,361		551		—		1,912
Amounts reclassified from accumulated other comprehensive income (3), (4)	96		—		431		527
Net other comprehensive income	1,457		551		431		2,439
Balance as of March 31, 2012	$	15,503	(8,313	)	(27,977	)	(20,787	)

(1) Consists of realized gains on securities (gain on sales of investments, net) of $109, net of tax (income tax expense) of $(43).

(2) Consists of amortization of prior service cost (compensation and employee benefits) of $580 and amortization of net loss (compensation and employee benefits) of $(932), net of tax (income tax expense) of $123.  See note 8.

(3) Consists of realized gains on securities (gain on sales of investments, net) of $80 and other-than-temporary-impairment losses (net impairment losses) of $(238), net of tax (income tax expense) of $62.

(4) Consists of amortization of prior service cost (compensation and employee benefits) of $40 and amortization of net loss (compensation and employee benefits) of $(702), net of tax (income tax expense) of $231.  See note 8.

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Disclosures About Fair Value of Financial Instruments

3 Months Ended

Mar. 31, 2013

Disclosures About Fair Value of Financial Instruments

Disclosures About Fair Value of Financial Instruments

(9)         Disclosures About Fair Value of Financial Instruments

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

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

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

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

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

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

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

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

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

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

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

Marketable Securities

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

Debt securities — available for sale - Generally, debt securities are valued using pricing for similar securities, recently executed transactions and other pricing models utilizing observable inputs.  The valuation for most debt securities is classified as Level 2.  Securities within Level 2 include corporate bonds, municipal bonds, mortgage-backed securities and US government obligations.  Certain corporate debt securities do not have an active market and as such the broker pricing received uses alternative methods. The fair value of these corporate debt securities is determined by using a discounted cash flow model using market assumptions, which generally include cash flow, collateral and other market assumptions.  As such, these securities are included herein as Level 3 assets.

Equity securities — available for sale - Level 1 securities include publicly traded securities valued using quoted market prices.  We consider the financial condition of the issuer to determine if the securities have indicators of impairment.

Debt securities — held to maturity- The fair value of debt securities held to maturity is determined in the same manner as debt securities available for sale.

Loans Receivable

Loans with comparable characteristics including collateral and re-pricing structures 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 included 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 the fair value.

Junior Subordinated Debentures

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

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

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

Off-Balance Sheet Financial Instruments

These financial instruments generally are not sold or traded, and estimated fair values are not readily available. However, the fair value of commitments to extend credit and standby letters of credit is estimated using the fees currently charged to enter into similar agreements. Commitments to extend credit are generally short-term in nature and, if drawn upon, are issued under current market terms. At March 31, 2013 and December 31, 2012, there was no significant unrealized appreciation or depreciation on these financial instruments.

The following table sets forth the carrying amount and estimated fair value of our financial instruments included in the consolidated statement of financial condition at March 31, 2013:

	Carrying		Estimated
	amount		fair value	Level 1	Level 2	Level 3
Financial assets:
Cash and cash equivalents	$	585,190	585,190	585,190	—	—
Securities available-for-sale	1,112,104		1,112,104	25,498	1,075,536	11,070
Securities held-to-maturity	143,253		149,105	—	149,105	—
Loans receivable, net	5,538,276		5,880,565	3,823	—	5,876,742
Accrued interest receivable	23,963		23,963	23,963	—	—
FHLB Stock	47,332		47,332	—	—	—
Total financial assets	$	7,450,118	7,798,259	638,474	1,224,641	5,887,812
Financial liabilities:
Savings and checking accounts	$	3,979,099	3,979,099	3,979,099	—	—
Time deposits	1,821,052		1,864,197	—	—	1,864,197
Borrowed funds	859,860		922,004	144,484	—	777,520
Junior subordinated debentures	103,094		115,032	—	—	115,032
Cash flow hedges - swaps	11,885		11,885	—	11,885	—
Accrued interest payable	1,180		1,180	1,180	—	—
Total financial liabilities	$	6,776,170	6,893,397	4,124,763	11,885	2,756,749

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

	Carrying		Estimated
	amount		fair value	Level 1	Level 2	Level 3
Financial assets:
Cash and cash equivalents	$	451,704	451,704	451,704	—	—
Securities available-for-sale	1,079,074		1,079,074	19,304	1,048,651	11,119
Securities held-to-maturity	155,081		161,969	—	161,969	—
Loans receivable, net	5,629,261		5,952,688	15,441	—	5,937,247
Accrued interest receivable	23,313		23,313	23,313	—	—
FHLB Stock	46,834		46,834	—	—	—
Total financial assets	$	7,385,267	7,715,582	509,762	1,210,620	5,948,366
Financial liabilities:
Savings and checking accounts	$	3,878,511	3,878,511	3,878,511	—	—
Time deposits	1,886,089		1,927,844	—	—	1,927,844
Borrowed funds	860,047		935,384	164,531	—	770,853
Junior subordinated debentures	103,094		116,066	—	—	116,066
Cash flow hedges - swaps	12,932		12,932	—	12,932	—
Accrued interest payable	888		888	888	—	—
Total financial liabilities	$	6,741,561	6,871,625	4,043,930	12,932	2,814,763

Fair value estimates are made at a point-in-time, based on relevant market data and information about the instrument. The methods and assumptions detailed above were used in estimating the fair value of financial instruments at both March 31, 2013 and December 31, 2012.  There were no transfers of financial instruments between Level 1 and Level 2 during the quarter ended March 31, 2013.

The following table represents assets and liabilities measured at fair value on a recurring basis at March 31, 2013 (in thousands):

						Total
						assets at
	Level 1		Level 2		Level 3	fair value
Equity securities	$	25,498	—		—	25,498
Debt securities:
U.S. government and agencies	—		38		—	38
Government sponsored enterprises	—		256,453		—	256,453
States and political subdivisions	—		127,497		—	127,497
Corporate	—		9,487		11,070	20,557
Total debt securities	—		393,475		11,070	404,545
Residential mortgage-backed securities:
GNMA	—		38,020		—	38,020
FNMA	—		96,837		—	96,837
FHLMC	—		64,174		—	64,174
Non-agency	—		689		—	689
Collateralized mortgage obligations:
GNMA	—		17,104		—	17,104
FNMA	—		200,737		—	200,737
FHLMC	—		243,876		—	243,876
SBA	—		14,372		—	14,372
Non-agency	—		6,252		—	6,252
Total mortgage-backed securities	—		682,061		—	682,061
Interest rate swaps	—		(11,885	)	—	(11,885	)
Total assets	$	25,498	1,063,651		11,070	1,100,219

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

						Total
						assets at
	Level 1		Level 2		Level 3	fair value
Equity securities	$	19,304	—		—	19,304
Debt securities:
U.S. government and agencies	—		40		—	40
Government sponsored enterprises	—		238,314		—	238,314
States and political subdivisions	—		134,208		—	134,208
Corporate	—		11,584		11,119	22,703
Total debt securities	—		384,146		11,119	395,265
Residential mortgage-backed securities:
GNMA	—		41,182		—	41,182
FNMA	—		106,863		—	106,863
FHLMC	—		52,559		—	52,559
Non-agency	—		695		—	695
Collateralized mortgage obligations:
GNMA	—		22,963		—	22,963
FNMA	—		189,364		—	189,364
FHLMC			228,631			228,631
SBA	—		15,775		—	15,775
Non-agency	—		6,473		—	6,473
Total mortgage-backed securities	—		664,505		—	664,505
Interest rate swaps	—		(12,932	)	—	(12,932	)
Total assets	$	19,304	1,035,719		11,119	1,066,142

The table below presents a reconciliation of all assets and liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the quarters ended March 31, 2013 and 2012 (in thousands):

	2013			2012
	Debt			Debt
	securities			securities
Balance at January 1,	$	11,119		9,657
Total net realized investment gains/ (losses) and net change in unrealized appreciation/(depreciation):
Included in net income as OTTI	—			—
Included in other comprehensive income	(49		)	(1,367	)
Purchases	—			—
Sales	—			—
Transfers in to Level 3	—			—
Transfers out of Level 3	—			—
Balance at March 31,	$	11,070		8,290

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 March 31, 2013 (in thousands):

					Total
					assets at
	Level 1		Level 2	Level 3	fair value
Loans measured for impairment	$	—	—	81,805	81,805
Real estate owned	—		—	24,035	24,035
Total assets	$	—	—	105,840	105,840

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, 2012 (in thousands):

					Total
					assets at
	Level 1		Level 2	Level 3	fair value
Loans measured for impairment	$	—	—	84,493	84,493
Real estate owned	—		—	26,165	26,165
Total assets	$	—	—	110,658	110,658

Impaired loans — A loan is considered to be impaired as described in the Overview of Critical Accounting Policies Involving Estimates, Allowance for Loan Losses section.  We classify loans individually evaluated for impairment that require a specific or TDR 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 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 March 31, 2013 (dollar amounts in thousands):

	Fair value		Valuation techniques	Significant unobservable inputs	Range (weighted average)
Debt securities	$	11,070	Discounted cash flow	Discount margin	0.35% to 2.1% (0.68)%
				Default rates	1.00%
				Prepayment speeds	1.00% annually
Loans measured for impairment	81,805		Appraisal value (1)	Estimated cost to sell	10%
Real estate owned	24,035		Appraisal value (1)	Estimated cost to sell	10%

(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

3 Months Ended

Mar. 31, 2013

Goodwill and Other Intangible Assets

Goodwill and Other Intangible Assets

(5) Goodwill and Other Intangible Assets

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

	March 31,			December 31,
	2013			2012
Amortizable intangible assets:
Core deposit intangibles — gross	$	30,578		30,578
Acquisitions	—			—
Less: accumulated amortization	(30,284		)	(30,181	)
Core deposit intangibles — net	294			397
Customer and Contract intangible assets — gross	6,197			3,779
Acquisition of The Bert Company	—			2,418
Less: accumulated amortization	(3,310		)	(3,065	)
Customer and Contract intangible assets — net	$	2,887		3,132

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

For the three months ended March 31, 2013	$	348
For the three months ended March 31, 2012	295
For the year ending December 31, 2013	1,210
For the year ending December 31, 2014	814
For the year ending December 31, 2015	571
For the year ending December 31, 2016	415
For the year ending December 31, 2017	259
For the year ending December 31, 2018	173

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, 2011	$	170,269	1,613	171,882
Goodwill acquired	2,579		—	2,579
Impairment losses	—		—	—
Balance at December 31, 2012	172,848		1,613	174,461
Goodwill acquired	2		—	2
Impairment losses	—		—	—
Balance at March 31, 2013	$	172,850	1,613	174,463

We performed our annual goodwill impairment test as of June 30, 2012 and concluded that goodwill was not impaired.  At March 31, 2013, there were no significant 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 2) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2013	Dec. 31, 2012
Assets measured at fair value on a recurring basis
Available-for-sale securities	$ 1,112,104	$ 1,079,074
Non-agency
Assets measured at fair value on a recurring basis
Available-for-sale securities	6,252
Level 1
Assets measured at fair value on a recurring basis
Available-for-sale securities	25,498	19,304
Total financial assets	638,474	509,762
Level 2
Assets measured at fair value on a recurring basis
Available-for-sale securities	1,075,536	1,048,651
Interest rate swaps	(11,885)	(12,932)
Total financial assets	1,224,641	1,210,620
Level 3
Assets measured at fair value on a recurring basis
Available-for-sale securities	11,070	11,119
Total financial assets	5,887,812	5,948,366
Measured on recurring basis
Assets measured at fair value on a recurring basis
Total financial assets	1,100,219	1,066,142
Measured on recurring basis | Equity securities
Assets measured at fair value on a recurring basis
Available-for-sale securities	25,498	19,304
Measured on recurring basis | Debt securities
Assets measured at fair value on a recurring basis
Available-for-sale securities	404,545	395,265
Measured on recurring basis | Debt securities | U.S. government and agencies
Assets measured at fair value on a recurring basis
Available-for-sale securities	38	40
Measured on recurring basis | Debt securities | Government sponsored enterprises
Assets measured at fair value on a recurring basis
Available-for-sale securities	256,453	238,314
Measured on recurring basis | Debt securities | States and political subdivisions
Assets measured at fair value on a recurring basis
Available-for-sale securities	127,497	134,208
Measured on recurring basis | Debt securities | Corporate
Assets measured at fair value on a recurring basis
Available-for-sale securities	20,557	22,703
Measured on recurring basis | Mortgage-backed securities
Assets measured at fair value on a recurring basis
Mortgage-backed securities	682,061	664,505
Measured on recurring basis | Residential mortgage-backed securities | GNMA
Assets measured at fair value on a recurring basis
Mortgage-backed securities	38,020	41,182
Measured on recurring basis | Residential mortgage-backed securities | FNMA
Assets measured at fair value on a recurring basis
Mortgage-backed securities	96,837	106,863
Measured on recurring basis | Residential mortgage-backed securities | FHLMC
Assets measured at fair value on a recurring basis
Mortgage-backed securities	64,174	52,559
Measured on recurring basis | Residential mortgage-backed securities | Non-agency
Assets measured at fair value on a recurring basis
Mortgage-backed securities	689	695
Measured on recurring basis | Collateralized mortgage obligations | GNMA
Assets measured at fair value on a recurring basis
Mortgage-backed securities	17,104	22,963
Measured on recurring basis | Collateralized mortgage obligations | FNMA
Assets measured at fair value on a recurring basis
Mortgage-backed securities	200,737	189,364
Measured on recurring basis | Collateralized mortgage obligations | FHLMC
Assets measured at fair value on a recurring basis
Mortgage-backed securities	243,876	228,631
Measured on recurring basis | Collateralized mortgage obligations | SBA
Assets measured at fair value on a recurring basis
Mortgage-backed securities	14,372	15,775
Measured on recurring basis | Collateralized mortgage obligations | Non-agency
Assets measured at fair value on a recurring basis
Mortgage-backed securities	6,252	6,473
Measured on recurring basis | Interest rate swaps
Assets measured at fair value on a recurring basis
Interest rate swaps	(11,885)	(12,932)
Measured on recurring basis | Level 1
Assets measured at fair value on a recurring basis
Total financial assets	25,498	19,304
Measured on recurring basis | Level 1 | Equity securities
Assets measured at fair value on a recurring basis
Available-for-sale securities	25,498	19,304
Measured on recurring basis | Level 2
Assets measured at fair value on a recurring basis
Total financial assets	1,063,651	1,035,719
Measured on recurring basis | Level 2 | Debt securities
Assets measured at fair value on a recurring basis
Available-for-sale securities	393,475	384,146
Measured on recurring basis | Level 2 | Debt securities | U.S. government and agencies
Assets measured at fair value on a recurring basis
Available-for-sale securities	38	40
Measured on recurring basis | Level 2 | Debt securities | Government sponsored enterprises
Assets measured at fair value on a recurring basis
Available-for-sale securities	256,453	238,314
Measured on recurring basis | Level 2 | Debt securities | States and political subdivisions
Assets measured at fair value on a recurring basis
Available-for-sale securities	127,497	134,208
Measured on recurring basis | Level 2 | Debt securities | Corporate
Assets measured at fair value on a recurring basis
Available-for-sale securities	9,487	11,584
Measured on recurring basis | Level 2 | Mortgage-backed securities
Assets measured at fair value on a recurring basis
Mortgage-backed securities	682,061	664,505
Measured on recurring basis | Level 2 | Residential mortgage-backed securities | GNMA
Assets measured at fair value on a recurring basis
Mortgage-backed securities	38,020	41,182
Measured on recurring basis | Level 2 | Residential mortgage-backed securities | FNMA
Assets measured at fair value on a recurring basis
Mortgage-backed securities	96,837	106,863
Measured on recurring basis | Level 2 | Residential mortgage-backed securities | FHLMC
Assets measured at fair value on a recurring basis
Mortgage-backed securities	64,174	52,559
Measured on recurring basis | Level 2 | Residential mortgage-backed securities | Non-agency
Assets measured at fair value on a recurring basis
Mortgage-backed securities	689	695
Measured on recurring basis | Level 2 | Collateralized mortgage obligations | GNMA
Assets measured at fair value on a recurring basis
Mortgage-backed securities	17,104	22,963
Measured on recurring basis | Level 2 | Collateralized mortgage obligations | FNMA
Assets measured at fair value on a recurring basis
Mortgage-backed securities	200,737	189,364
Measured on recurring basis | Level 2 | Collateralized mortgage obligations | FHLMC
Assets measured at fair value on a recurring basis
Mortgage-backed securities	243,876	228,631
Measured on recurring basis | Level 2 | Collateralized mortgage obligations | SBA
Assets measured at fair value on a recurring basis
Mortgage-backed securities	14,372	15,775
Measured on recurring basis | Level 2 | Collateralized mortgage obligations | Non-agency
Assets measured at fair value on a recurring basis
Mortgage-backed securities	6,252	6,473
Measured on recurring basis | Level 2 | Interest rate swaps
Assets measured at fair value on a recurring basis
Interest rate swaps	(11,885)	(12,932)
Measured on recurring basis | Level 3
Assets measured at fair value on a recurring basis
Total financial assets	11,070	11,119
Measured on recurring basis | Level 3 | Debt securities
Assets measured at fair value on a recurring basis
Available-for-sale securities	11,070	11,119
Measured on recurring basis | Level 3 | Debt securities | Corporate
Assets measured at fair value on a recurring basis
Available-for-sale securities	$ 11,070	$ 11,119

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Investment securities and impairment of investment securities

3 Months Ended

Mar. 31, 2013

Investment securities and impairment of investment securities

Investment securities and impairment of investment securities

(3) Investment securities and impairment of investment securities

The following table shows the portfolio of investment securities available-for-sale at March 31, 2013 (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	$	38	—	—		38
Debt issued by government sponsored enterprises:
Due in one year or less	1,999		4	—		2,003
Due in one year - five years	143,055		376	(117	)	143,314
Due in five years - ten years	111,204		103	(171	)	111,136
Equity securities	15,263		10,235	—		25,498
Municipal securities:
Due in one year - five years	10,123		215	—		10,338
Due in five years - ten years	17,100		544	—		17,644
Due after ten years	95,060		4,455	—		99,515
Corporate debt issues:
Due after ten years	22,455		481	(2,379	)	20,557
Residential mortgage-backed securities:
Fixed rate pass-through	92,590		5,359	(45	)	97,904
Variable rate pass-through	96,929		4,892	(6	)	101,815
Fixed rate non-agency CMOs	5,096		378	—		5,474
Fixed rate agency CMOs	275,899		2,985	(1,133	)	277,751
Variable rate non-agency CMOs	805		—	(27	)	778
Variable rate agency CMOs	197,539		1,079	(279	)	198,339
Total residential mortgage-backed securities	668,858		14,693	(1,490	)	682,061
Total marketable securities available-for-sale	$	1,085,155	31,106	(4,157	)	1,112,104

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

			Gross	Gross
			unrealized	unrealized
	Amortized		holding	holding		Fair
	cost		gains	losses		value
Debt issued by the U.S. government and agencies:
Due in one year or less	$	40	—	—		40
Debt issued by government sponsored enterprises:
Due in one year or less	1,999		5	—		2,004
Due in one year - five years	140,352		183	(22	)	140,513
Due in five years - ten years	95,602		460	(265	)	95,797
Equity securities	13,301		6,025	(22	)	19,304
Municipal securities:
Due in one year - five years	9,629		233	—		9,862
Due in five years - ten years	17,355		668	—		18,023
Due after ten years	100,644		5,679	—		106,323
Corporate debt issues:
Due after ten years	24,911		483	(2,691	)	22,703
Residential mortgage-backed securities:
Fixed rate pass-through	85,134		6,266	—		91,400
Variable rate pass-through	104,591		5,314	(6	)	109,899
Fixed rate non-agency CMOs	5,700		156	(236	)	5,620
Fixed rate agency CMOs	227,608		3,462	(744	)	230,326
Variable rate non-agency CMOs	873		—	(20	)	853
Variable rate agency CMOs	225,383		1,345	(321	)	226,407
Total residential mortgage-backed securities	649,289		16,543	(1,327	)	664,505
Total marketable securities available-for-sale	$	1,053,122	30,279	(4,327	)	1,079,074

The following table shows the portfolio of investment securities held-to-maturity at March 31, 2013 (in thousands):

			Gross	Gross
			unrealized	unrealized
	Amortized		holding	holding	Fair
	cost		gains	losses	value
Municipal securities:
Due in Five years - ten years	$	4,715	224	—	4,939
Due after ten years	64,573		2,796	—	67,369
Residential mortgage-backed securities:
Fixed rate pass-through	14,430		814	—	15,244
Variable rate pass-through	6,144		128	—	6,272
Fixed rate agency CMOs	49,205		1,840	—	51,045
Variable rate agency CMOs	4,186		50	—	4,236
Total residential mortgage-backed securities	73,965		2,832	—	76,797
Total marketable securities held-to-maturity	$	143,253	5,852	—	149,105

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

			Gross	Gross
			unrealized	unrealized
	Amortized		holding	holding		Fair
	cost		gains	losses		value
Municipal securities:
Due in five years - ten years	$	3,679	160	—		3,839
Due after ten years	65,596		3,743	—		69,339
Residential mortgage-backed securities:
Fixed rate pass-through	16,369		912	—		17,281
Variable rate pass-through	6,548		—	(14	)	6,534
Fixed rate agency CMOs	56,713		2,006	—		58,719
Variable rate agency CMOs	6,176		81	—		6,257
Total residential mortgage-backed securities	85,806		2,999	(14	)	88,791
Total marketable securities held-to-maturity	$	155,081	6,902	(14	)	161,969

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 March 31, 2013 (in thousands):

	Less than 12 months				12 months or more			Total
			Unrealized			Unrealized			Unrealized
	Fair value		loss		Fair value	loss		Fair value	loss
U.S. government and agencies	$	110,396	(288	)	—	—		110,396	(288	)
Corporate issues	850		(40	)	12,083	(2,339	)	12,933	(2,379	)
Residential mortgage- backed securities - non-agency	—		—		778	(27	)	778	(27	)
Residential mortgage- backed securities - agency	196,799		(1,336	)	23,618	(127	)	220,417	(1,463	)
Total temporarily impaired securities	$	308,045	(1,664	)	36,479	(2,493	)	344,524	(4,157	)

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, 2012 (in thousands):

	Less than 12 months				12 months or more			Total
			Unrealized			Unrealized			Unrealized
	Fair value		loss		Fair value	loss		Fair value	loss
U.S. government and agencies	$	70,128	(286	)	6,537	(1	)	76,665	(287	)
Corporate debt issues	850		(39	)	12,095	(2,652	)	12,945	(2,691	)
Equity securities	601		(21	)	17	(1	)	618	(22	)
Residential mortgage-backed securities - non-agency	—		—		4,357	(256	)	4,357	(256	)
Residential mortgage-backed securities - agency	167,294		(1,055	)	14,231	(30	)	181,525	(1,085	)
Total temporarily impaired securities	$	238,873	(1,401	)	37,237	(2,940	)	276,110	(4,341	)

Corporate issues

As of March 31, 2013, we had six investments with a total amortized cost of $14.4 million and total fair value of $12.1 million, where the amortized cost exceeded the carrying value for more than 12 months.  These investments were three single issuer trust preferred investments and three 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 three 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 at March 31, 2013 (in thousands):

		Total
		Amortized		Fair	Unrealized		Moody’s/ Fitch
Description	Class	cost		value	losses		ratings
Bank Boston Capital Trust (1)	N/A	$	989	771	(218	)	Ba2/ BB
Huntington Capital Trust	N/A	1,428		1,082	(346	)	Baa3/ BB
Commercebank Capital Trust	N/A	890		850	(40	)	Not rated
Ocean Shore Capital Trust	N/A	867		800	(67	)	Not rated
I-PreTSL I	Mezzanine	1,500		590	(910	)	Not rated/ CCC
I-PreTSL II	Mezzanine	1,500		766	(734	)	Not rated/ B
PreTSL XIX	Senior A-1	8,138		8,074	(64	)	Baa2/ BBB
		$	15,312	12,933	(2,379	)

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

The following table provides collateral information on the pooled trust preferred securities included in the previous table at March 31, 2013 (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	99,981
I-PreTSL II	325,500		24,500	301,000	301,000
PreTSL XIX	624,881		137,001	487,880	181,000

Mortgage-backed securities

Mortgage-backed securities include agency (FNMA, FHLMC, GNMA and SBA) mortgage-backed securities and non-agency collateralized mortgage obligations (“CMOs”).  We review our portfolio of mortgage-backed securities quarterly for impairment.  As of March 31, 2013, we believe the impairment within our portfolio of agency mortgage-backed securities is noncredit related.  As of March 31, 2013, we had seven non-agency CMOs with a total amortized cost of $5.9 million and a total fair value of $6.3 million. Included in this total was one non-agency CMO with an amortized cost of $805,000 and a fair value of $778,000, where the amortized cost exceeded the fair value for more than 12 months.  During the quarter ended March 31, 2013, we did not recognize other-than-temporary credit related impairment on this security.  We determined the impairment was noncredit related by analyzing cash flow estimates, estimated prepayment speeds, loss severity and conditional default rates.  We considered the discounted cash flow analysis as our primary evidence when we determined the impairment on this security 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 March 31, 2013 (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	$	177	182	5		—	—
AMAC 2003-6 2A8	366		376	10		—	—
BOAMS 2005-11 1A8	346		487	141		—	(146	)
CWALT 2005-J14 A3	3,581		3,796	215		—	(1,007	)
CFSB 2003-17 2A2	352		357	5		—	—
WAMU 2003-S2 A4	274		276	2		—	—
WFMBS 2003-B A2	805		778	(27	)	—	—
	$	5,901	6,252	351		—	(1,153	)

Municipal Securities

We review our portfolio of municipal securities quarterly for impairment.  We initially evaluate municipal securities for other-than-temporary impairment by comparing the fair value, provided to us by a third party pricing source using quoted prices for similar assets that are actively traded, to the carrying value.  When an investment’s fair value is below 80% of the amortized cost we then assess 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 stated interest rate approximates current interest rates for similar securities, we determine if the investment is rated and if so, if the rating has changed in the current period.  If the rating has not changed during the current period, we review publicly available information to determine if there has been any negative change in the underlying municipality.  As of March 31, 2013, none of the investments in our municipal securities portfolio had an amortized cost that exceeded the fair value for more than twelve months.

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

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

	2013			2012
Beginning balance at Janaury 1, (1)	$	9,811		11,633
Credit losses on debt securities for which other-than-temporary impairment was not previously recognized	—			—
Reduction for losses realized during the year	(67		)	(1,311	)
Additional credit losses on debt securities for which other-than-temporary impairment was previously recognized	—			238
Ending balance at March 31,	$	9,744		10,560

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

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Loans receivable

3 Months Ended

Mar. 31, 2013

Loans receivable

Loans receivable

(4) Loans receivable

The following table shows a summary of our loans receivable at March 31, 2013 and December 31, 2012 (in thousands):

	March 31,			December 31,
	2013			2012
Personal Banking:
Loans held for sale	$	3,823		15,441
Residential mortgage loans	2,380,892			2,416,419
Home equity loans	1,052,485			1,076,637
Other consumer loans	218,464			235,367
Total Personal Banking	3,655,664			3,743,864
Business Banking:
Commercial real estate	1,609,531			1,615,701
Commercial loans	438,623			432,944
Total Business Banking	2,048,154			2,048,645
Total loans receivable, gross	5,703,818			5,792,509
Deferred loan fees	(1,174		)	(1,624	)
Allowance for loan losses	(72,009		)	(73,219	)
Undisbursed loan proceeds:
Residential mortgage loans	(9,157		)	(14,587	)
Commercial real estate	(36,583		)	(29,868	)
Commercial loans	(46,619		)	(43,950	)
Total loans receivable, net	$	5,538,276		5,629,261

The following table provides information related to the allowance for loan losses by portfolio segment and by class of financing receivable at March 31, 2013 (in thousands):

	Balance March 31, 2013		Current period provision	Charge-offs		Recoveries	Balance December 31, 2012
Personal Banking:
Residental mortgage loans	$	7,878	452	(679	)	103	8,002
Home equity loans	8,211		224	(370	)	63	8,294
Other consumer loans	4,860		796	(1,404	)	312	5,156
Total Personal Banking	20,949		1,472	(2,453	)	478	21,452
Business Banking:
Commercial real estate loans	35,560		4,857	(3,990	)	194	34,499
Commercial loans	11,473		828	(2,680	)	83	13,242
Total Business Banking	47,033		5,685	(6,670	)	277	47,741
Unallocated	4,027		1	—		—	4,026
Total	$	72,009	7,158	(9,123	)	755	73,219

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

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

The following table provides information related to the loan portfolio by portfolio segment and by class of financing receivable at March 31, 2013 (in thousands):

	Recorded investment in loans receivable		Allowance for loan losses	Recorded investment in loans on nonaccrual	Recorded investment in loans past due 90 days or more and still accruing	TDRs
Personal Banking:
Residental mortgage loans	$	2,374,384	7,878	29,902	8	5,196
Home equity loans	1,052,485		8,211	9,569	—	2,128
Other consumer loans	218,464		4,860	1,989	750	—
Total Personal Banking	3,645,333		20,949	41,460	758	7,324
Business Banking:
Commercial real estate loans	1,572,948		35,560	55,018	—	50,944
Commercial loans	392,004		11,473	29,264	23	33,097
Total Business Banking	1,964,952		47,033	84,282	23	84,041
Total	$	5,610,285	67,982	125,742	781	91,365

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

	Recorded investment in loans receivable		Allowance for loan losses	Recorded investment in loans on nonaccrual	Recorded investment in loans past due 90 days or more and still accruing	TDRs
Personal Banking:
Residental mortgage loans	$	2,415,649	8,002	25,083	9	5,045
Home equity loans	1,076,637		8,294	9,114	2	1,891
Other consumer loans	235,367		5,156	1,980	776	—
Total Personal Banking	3,727,653		21,452	36,177	787	6,936
Business Banking:
Commercial real estate loans	1,585,833		34,499	57,861	388	49,826
Commercial loans	388,994		13,242	26,174	523	32,682
Total Business Banking	1,974,827		47,741	84,035	911	82,508
Total	$	5,702,480	69,193	120,212	1,698	89,444

The following table provides geographical and delinquency information related to the loan portfolio by portfolio segment and class of financing receivable at March 31, 2013 (in thousands):

	Pennsylvania			New York		Ohio		Maryland		Other		Total
Recorded investment in loans receivable:
Personal Banking:
Residential mortgage loans	$	1,996,459		155,288		19,139		146,116		57,382		2,374,384
Home equity loans	899,546			108,371		10,361		28,185		6,022		1,052,485
Other consumer loans	201,368			9,879		2,832		1,208		3,177		218,464
Total Personal Banking	3,097,373			273,538		32,332		175,509		66,581		3,645,333
Business Banking:
Commercial real estate loans	883,200			452,805		28,060		138,983		69,900		1,572,948
Commercial loans	277,015			57,974		19,406		24,272		13,337		392,004
Total Business Banking	1,160,215			510,779		47,466		163,255		83,237		1,964,952
Total	$	4,257,588		784,317		79,798		338,764		149,818		5,610,285
Percentage of total loans in geographic area	75.9		%	14.0	%	1.4	%	6.0	%	2.7	%	100.0	%

	Pennsylvania			New York		Ohio		Maryland		Other		Total
Loans 90 or more days delinquent:
Personal Banking:
Residential mortgage loans	$	15,506		949		231		4,563		3,167		24,416
Home equity loans	5,023			1,378		163		1,246		157		7,967
Other consumer loans	1,722			76		—		—		4		1,802
Total Personal Banking	22,251			2,403		394		5,809		3,328		34,185
Business Banking:
Commercial real estate loans	15,389			541		105		4,027		2,142		22,204
Commercial loans	2,674			—		—		2,695		10,877		16,246
Total Business Banking	18,063			541		105		6,722		13,019		38,450
Total	$	40,314		2,944		499		12,531		16,347		72,635
Percentage of loans 90 or more days delinquent in geographic area.	0.9		%	0.4	%	0.6	%	3.7	%	10.9	%	1.3	%

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

	Pennsylvania			New York		Ohio		Maryland		Other		Total
Recorded investment in loans receivable:
Personal Banking:
Residential mortgage loans	$	2,024,520		158,090		19,290		152,676		61,073		2,415,649
Home equity loans	917,645			111,461		10,828		29,734		6,969		1,076,637
Other consumer loans	213,604			10,235		3,066		1,291		7,171		235,367
Total Personal Banking	3,155,769			279,786		33,184		183,701		75,213		3,727,653
Business Banking:
Commercial real estate loans	853,290			443,940		34,261		136,600		117,742		1,585,833
Commercial loans	269,415			55,517		12,878		25,497		25,687		388,994
Total Business Banking	1,122,705			499,457		47,139		162,097		143,429		1,974,827
Total	$	4,278,474		779,243		80,323		345,798		218,642		5,702,480
Percentage of total loans in geographic area	75.0		%	13.7	%	1.4	%	6.1	%	3.8	%	100.0	%

	Pennsylvania			New York		Ohio		Maryland		Other		Total
Loans 90 or more days delinquent:
Personal Banking:
Residential mortgage loans	$	15,694		1,430		231		3,932		2,999		24,286
Home equity loans	5,096			1,515		132		1,428		308		8,479
Other consumer loans	1,861			69		—		5		1		1,936
Total Personal Banking	22,651			3,014		363		5,365		3,308		34,701
Business Banking:
Commercial real estate loans	17,406			706		—		4,298		2,140		24,550
Commercial loans	3,493			7		—		2,678		2,918		9,096
Total Business Banking	20,899			713		—		6,976		5,058		33,646
Total	$	43,550		3,727		363		12,341		8,366		68,347
Percentage of loans 90 or more days delinquent in geographic area.	1.0		%	0.5	%	0.5	%	3.6	%	3.8	%	1.2	%

The following table provides information related to the composition of impaired loans by portfolio segment and by class of financing receivable at and for the quarter ended March 31, 2013 (in thousands):

	Nonaccrual loans 90 or more days delinquent		Nonaccrual loans less than 90 days delinquent	Loans less than 90 days delinquent reviewed for impairment	TDRs less than 90 days delinquent not included elsewhere	Total impaired loans	Average recorded investment in impaired loans	Interest income recognized on impaired loans
Personal Banking:
Residental mortgage loans	$	24,416	5,486	—	3,000	32,902	31,013	190
Home equity loans	7,967		1,602	—	1,274	10,843	10,312	87
Other consumer loans	1,802		187	—	—	1,989	2,024	12
Total Personal Banking	34,185		7,275	—	4,274	45,734	43,349	289
Business Banking:
Commercial real estate loans	22,204		32,814	25,471	12,778	93,267	88,531	875
Commercial loans	16,246		13,018	3,643	5,511	38,418	45,656	272
Total Business Banking	38,450		45,832	29,114	18,289	131,685	134,187	1,147
Total	$	72,635	53,107	29,114	22,563	177,419	177,536	1,436

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, 2012 (in thousands):

	Nonaccrual loans 90 or more days delinquent		Nonaccrual loans less than 90 days delinquent	Loans less than 90 days delinquent reviewed for impairment	TDRs less than 90 days delinquent not included elsewhere	Total impaired loans	Average recorded investment in impaired loans	Interest income recognized on impaired loans
Personal Banking:
Residental mortgage loans	$	24,286	797	—	3,011	28,094	28,078	683
Home equity loans	8,479		635	—	1,352	10,466	10,535	342
Other consumer loans	1,936		44	—	—	1,980	1,841	35
Total Personal Banking	34,701		1,476	—	4,363	40,540	40,454	1,060
Business Banking:
Commercial real estate loans	24,550		33,311	33,282	16,274	107,417	98,891	3,636
Commercial loans	9,096		17,078	—	10,180	36,354	51,131	1,828
Total Business Banking	33,646		50,389	33,282	26,454	143,771	150,022	5,464
Total	$	68,347	51,865	33,282	30,817	184,311	190,476	6,524

The following table provides information related to the evaluation of impaired loans by portfolio segment and by class of financing receivable at March 31, 2013 (in thousands):

	Loans collectively evaluated for impairment		Loans individually evaluated for impairment	Loans individually evaluated for impairment for which there is a related impairment reserve	Related impairment reserve	Loans individually evaluated for impairment for which there is no related reserve
Personal Banking:
Residental mortgage loans	$	2,368,221	6,163	6,163	1,119	—
Home equity loans	1,050,094		2,391	2,391	390	—
Other consumer loans	218,464		—	—	—	—
Total Personal Banking	3,636,779		8,554	8,554	1,509	—
Business Banking:
Commercial real estate loans	1,498,738		74,210	56,806	9,939	17,404
Commercial loans	357,138		34,866	32,465	4,572	2,401
Total Business Banking	1,855,876		109,076	89,271	14,511	19,805
Total	$	5,492,655	117,630	97,825	16,020	19,805

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

	Loans collectively evaluated for impairment		Loans individually evaluated for impairment	Loans individually evaluated for impairment for which there is a related impairment reserve	Related impairment reserve	Loans individually evaluated for impairment for which there is no related reserve
Personal Banking:
Residental mortgage loans	$	2,411,932	3,717	3,717	992	—
Home equity loans	1,076,012		625	625	189	—
Other consumer loans	235,367		—	—	—	—
Total Personal Banking	3,723,311		4,342	4,342	1,181	—
Business Banking:
Commercial real estate loans	1,501,032		84,801	61,136	9,789	23,665
Commercial loans	352,752		36,242	35,622	5,637	620
Total Business Banking	1,853,784		121,043	96,758	15,426	24,285
Total	$	5,577,095	125,385	101,100	16,607	24,285

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 quarter ended March 31, 2013, one home equity loan TDR with a balance of $23,000, two commercial real estate loan TDRs with a combined balance of $650,000 and two commercial loan TDRs with a combined balance of $17,000 were charged off.  Additionally, one commercial real estate loan TDR with a balance of $310,000 and eight commercial loan TDRs with a combined balance of $353,000 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 March 31, 2013
	Number of contracts	Recorded investment at the time of modification		Current recorded investment	Current allowance
Troubled debt restructurings:
Personal Banking:
Residential mortgage loans	2	$	179	162	26
Home equity loans	3	287		285	133
Other consumer loans	—	—		—	—
Total Personal Banking	5	466		447	159
Business Banking:
Commercial real estate loans	32	3,417		2,878	270
Commercial loans	21	1,728		1,513	171
Total Business Banking	53	5,145		4,391	441
Total	58	$	5,611	4,838	600
Troubled debt restructurings that subsequently defaulted:
Personal Banking:
Residential mortgage loans	1	$	244	237	30
Home equity loans	1	183		130	106
Other consumer loans	—	—		—	—
Total Personal Banking	2	427		367	136
Business Banking:
Commercial real estate loans	3	778		713	38
Commercial loans	6	16,267		11,708	2,174
Total Business Banking	9	17,045		12,421	2,212
Total	11	$	17,472	12,788	2,348

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

The following table provides information related to loan delinquencies at March 31, 2013 (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	$	33,054	4,577	24,416	62,047	2,312,337	2,374,384
Home equity loans	6,254		2,321	7,967	16,542	1,035,943	1,052,485
Other consumer loans	3,684		1,145	1,802	6,631	211,833	218,464
Total Personal Banking	42,992		8,043	34,185	85,220	3,560,113	3,645,333
Business Banking:
Commercial real estate loans	12,833		4,448	22,204	39,485	1,533,463	1,572,948
Commercial loans	4,620		1,654	16,246	22,520	369,484	392,004
Total Business Banking	17,453		6,102	38,450	62,005	1,902,947	1,964,952
Total	$	60,445	14,145	72,635	147,225	5,463,060	5,610,285

The following table provides information related to loan delinquencies at December 31, 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	$	32,921	9,387	24,286	66,594	2,349,055	2,415,649
Home equity loans	6,534		1,977	8,479	16,990	1,059,647	1,076,637
Other consumer loans	5,456		1,830	1,936	9,222	226,145	235,367
Total Personal Banking	44,911		13,194	34,701	92,806	3,634,847	3,727,653
Business Banking:
Commercial real estate loans	13,001		4,596	24,550	42,147	1,543,686	1,585,833
Commercial loans	3,233		10,158	9,096	22,487	366,507	388,994
Total Business Banking	16,234		14,754	33,646	64,634	1,910,193	1,974,827
Total	$	61,145	27,948	68,347	157,440	5,545,040	5,702,480

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

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

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

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

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

The following table sets forth information about credit quality indicators, which were updated during the quarter ended March 31, 2013 (in thousands):

	Pass		Special mention	Substandard	Doubtful	Loss	Recorded investment in loans receivable
Personal Banking:
Residential mortgage loans	$	2,355,253	—	17,952	—	1,179	2,374,384
Home equity loans	1,044,568		—	7,917	—	—	1,052,485
Other consumer loans	217,215		—	1,249	—	—	218,464
Total Personal Banking	3,617,036		—	27,118	—	1,179	3,645,333
Business Banking:
Commercial real estate loans	1,351,901		67,543	149,190	4,314	—	1,572,948
Commercial loans	324,303		13,955	52,539	1,207	—	392,004
Total Business Banking	1,676,204		81,498	201,729	5,521	—	1,964,952
Total	$	5,293,240	81,498	228,847	5,521	1,179	5,610,285

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

	Pass		Special mention	Substandard	Doubtful	Loss	Recorded investment in loans receivable
Personal Banking:
Residential mortgage loans	$	2,395,809	—	18,743	48	1,049	2,415,649
Home equity loans	1,068,183		—	8,454	—	—	1,076,637
Other consumer loans	234,106		—	1,261	—	—	235,367
Total Personal Banking	3,698,098		—	28,458	48	1,049	3,727,653
Business Banking:
Commercial real estate loans	1,352,118		68,130	163,751	1,834	—	1,585,833
Commercial loans	320,228		13,077	52,742	2,947	—	388,994
Total Business Banking	1,672,346		81,207	216,493	4,781	—	1,974,827
Total	$	5,370,444	81,207	244,951	4,829	1,049	5,702,480

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Guarantees

3 Months Ended

Mar. 31, 2013

Guarantees

Guarantees

(6)           Guarantees

We issue standby letters of credit in the normal course of business.  Standby letters of credit are conditional commitments issued by the Company to guarantee the performance of a customer to a third party.  Standby letters of credit generally are contingent upon the failure of the customer to perform according to the terms of the underlying contract with the third party.  We are required to perform under a standby letter of credit when drawn upon by the guaranteed third party in the case of nonperformance by our customer.  The credit risk associated with standby letters of credit is essentially the same as that involved in extending loans to customers and is subject to normal loan underwriting procedures.  Collateral may be obtained based on management’s credit assessment of the customer.  At March 31, 2013, the maximum potential amount of future payments we could be required to make under these standby letters of credit was $43.6 million, of which $42.8 million is fully collateralized.  At March 31, 2013, we had a liability, which represents deferred income, of $834,000 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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Mortgage Loan Servicing (Details) (MSRs, USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012
Servicing rights
Balance at the beginning of the period	$ 3,291	$ 3,655
Additions/ (reductions)	382	513
Amortization	(591)	(734)
Balance at the end of the period	3,082	3,434
Net carrying value and fair value
Balance at the beginning of the period	3,291	3,655
Additions/ (reductions)	382	513
Amortization	(591)	(734)
Balance at the end of the period	3,082	3,434
Weighted Average
Additional information about the inputs used to determine the fair value of mortgage servicing right
Variable rate basis of loan receivable	5 year LIBOR swap
Forward yield curve (as a percent)	0.90%	1.30%
Prepayment rates (as a percent)	15.90%	20.60%
Annual service cost per loan	$ 68	$ 67
Average life expectancy	65 months	48 months
Option adjusted spread	8.00%
Discount rate (as a percent)		10.50%

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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) (USD $)	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2013 Interest rate swap agreements	Dec. 31, 2012 Interest rate swap agreements
Liability Derivatives, Included in Other Liabilities
Fair value		$ 11,885,000	$ 12,932,000
Notional amount		100,000,000	100,000,000
Collateral posted		12,455,000	13,505,000
Hedge ineffectiveness for swaps	$ 0

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Disclosures About Fair Value of Financial Instruments (Details 5) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2013
Debt securities
Quantitative information for Level 3 Fair Value Measurements Assets
Fair value	11,070
Debt securities | Discounted cash flow
Quantitative information for Level 3 Fair Value Measurements Assets
Default rate (as a percent)	1.00%
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)	0.68%
Loan measured for impairment
Quantitative information for Level 3 Fair Value Measurements Assets
Fair value	81,805
Estimated costs to sell (as a percent)	10.00%
Real estate owned
Quantitative information for Level 3 Fair Value Measurements Assets
Fair value	24,035
Estimated costs to sell (as a percent)	10.00%

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Basis of Presentation and Informational Disclosures (Details) (USD $)	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012
Basis of Presentation and Informational Disclosures
Number of banking locations	166
Stock-based aggregate disclosure
Compensation expense for unvested common share awards which is yet to be recognized	$ 13,700,000
Income Taxes- Uncertain Tax Positions
Unrecognized tax benefits liability	0
Accrued amount of payment of interest or penalties	0
Compensation expense for unvested common shares which is yet to be recognized
Stock-based aggregate disclosure
Stock-based employee compensation expense	1,100,000	1,000,000
Stock options
Stock-based aggregate disclosure
Compensation expense for unvested common share awards which is yet to be recognized	$ 5,300,000

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Loans receivable (Details 8) (USD $)	Mar. 31, 2013	Dec. 31, 2012
Loan delinquencies
30-59 Days Delinquent	$ 60,445,000	$ 61,145,000
60-89 Days Delinquent	14,145,000	27,948,000
90 Days or Greater Delinquent	72,635,000	68,347,000
Total Delinquency	147,225,000	157,440,000
Current	5,463,060,000	5,545,040,000
Total loans	5,610,285,000	5,702,480,000
Recovery or salvage value of financing receivable	0
Residential mortgage loans
Loan delinquencies
90 Days or Greater Delinquent	24,416,000	24,286,000
Total loans	2,374,384,000	2,415,649,000
Home equity loans
Loan delinquencies
90 Days or Greater Delinquent	7,967,000	8,479,000
Total loans	1,052,485,000	1,076,637,000
Other consumer loans
Loan delinquencies
90 Days or Greater Delinquent	1,802,000	1,936,000
Total loans	218,464,000	235,367,000
Commercial real estate
Loan delinquencies
90 Days or Greater Delinquent	22,204,000	24,550,000
Total loans	1,572,948,000	1,585,833,000
Commercial loans
Loan delinquencies
90 Days or Greater Delinquent	16,246,000	9,096,000
Total loans	392,004,000	388,994,000
Personal Banking
Loan delinquencies
30-59 Days Delinquent	42,992,000	44,911,000
60-89 Days Delinquent	8,043,000	13,194,000
90 Days or Greater Delinquent	34,185,000	34,701,000
Total Delinquency	85,220,000	92,806,000
Current	3,560,113,000	3,634,847,000
Total loans	3,645,333,000	3,727,653,000
Personal Banking | Residential mortgage loans
Loan delinquencies
30-59 Days Delinquent	33,054,000	32,921,000
60-89 Days Delinquent	4,577,000	9,387,000
90 Days or Greater Delinquent	24,416,000	24,286,000
Total Delinquency	62,047,000	66,594,000
Current	2,312,337,000	2,349,055,000
Total loans	2,374,384,000	2,415,649,000
Personal Banking | Home equity loans
Loan delinquencies
30-59 Days Delinquent	6,254,000	6,534,000
60-89 Days Delinquent	2,321,000	1,977,000
90 Days or Greater Delinquent	7,967,000	8,479,000
Total Delinquency	16,542,000	16,990,000
Current	1,035,943,000	1,059,647,000
Total loans	1,052,485,000	1,076,637,000
Personal Banking | Other consumer loans
Loan delinquencies
30-59 Days Delinquent	3,684,000	5,456,000
60-89 Days Delinquent	1,145,000	1,830,000
90 Days or Greater Delinquent	1,802,000	1,936,000
Total Delinquency	6,631,000	9,222,000
Current	211,833,000	226,145,000
Total loans	218,464,000	235,367,000
Business Banking
Loan delinquencies
30-59 Days Delinquent	17,453,000	16,234,000
60-89 Days Delinquent	6,102,000	14,754,000
90 Days or Greater Delinquent	38,450,000	33,646,000
Total Delinquency	62,005,000	64,634,000
Current	1,902,947,000	1,910,193,000
Total loans	1,964,952,000	1,974,827,000
Business Banking | Commercial real estate
Loan delinquencies
30-59 Days Delinquent	12,833,000	13,001,000
60-89 Days Delinquent	4,448,000	4,596,000
90 Days or Greater Delinquent	22,204,000	24,550,000
Total Delinquency	39,485,000	42,147,000
Current	1,533,463,000	1,543,686,000
Total loans	1,572,948,000	1,585,833,000
Business Banking | Commercial loans
Loan delinquencies
30-59 Days Delinquent	4,620,000	3,233,000
60-89 Days Delinquent	1,654,000	10,158,000
90 Days or Greater Delinquent	16,246,000	9,096,000
Total Delinquency	22,520,000	22,487,000
Current	369,484,000	366,507,000
Total loans	$ 392,004,000	$ 388,994,000

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

3 Months Ended

Mar. 31, 2013

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 March 31, 2013, $12.5 million was pledged as collateral to the counterparty.

At March 31, 2013, the fair value of the swap agreements was $(11.9) 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 March 31, 2013 and December 31, 2012 (in thousands):

	March 31,		December 31,
	2012		2011
Fair value	$	11,885	12,932
Notional amount	100,000		100,000
Collateral posted	12,455		13,505

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Loans receivable (Tables)

3 Months Ended

Mar. 31, 2013

Loans receivable

Summary of loans receivable

The following table shows a summary of our loans receivable at March 31, 2013 and December 31, 2012 (in thousands):

	March 31,			December 31,
	2013			2012
Personal Banking:
Loans held for sale	$	3,823		15,441
Residential mortgage loans	2,380,892			2,416,419
Home equity loans	1,052,485			1,076,637
Other consumer loans	218,464			235,367
Total Personal Banking	3,655,664			3,743,864
Business Banking:
Commercial real estate	1,609,531			1,615,701
Commercial loans	438,623			432,944
Total Business Banking	2,048,154			2,048,645
Total loans receivable, gross	5,703,818			5,792,509
Deferred loan fees	(1,174		)	(1,624	)
Allowance for loan losses	(72,009		)	(73,219	)
Undisbursed loan proceeds:
Residential mortgage loans	(9,157		)	(14,587	)
Commercial real estate	(36,583		)	(29,868	)
Commercial loans	(46,619		)	(43,950	)
Total loans receivable, net	$	5,538,276		5,629,261

Schedule of the changes in the allowance for losses on loans receivable

The following table provides information related to the allowance for loan losses by portfolio segment and by class of financing receivable at March 31, 2013 (in thousands):

	Balance March 31, 2013		Current period provision	Charge-offs		Recoveries	Balance December 31, 2012
Personal Banking:
Residental mortgage loans	$	7,878	452	(679	)	103	8,002
Home equity loans	8,211		224	(370	)	63	8,294
Other consumer loans	4,860		796	(1,404	)	312	5,156
Total Personal Banking	20,949		1,472	(2,453	)	478	21,452
Business Banking:
Commercial real estate loans	35,560		4,857	(3,990	)	194	34,499
Commercial loans	11,473		828	(2,680	)	83	13,242
Total Business Banking	47,033		5,685	(6,670	)	277	47,741
Unallocated	4,027		1	—		—	4,026
Total	$	72,009	7,158	(9,123	)	755	73,219

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

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

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 March 31, 2013 (in thousands):

	Recorded investment in loans receivable		Allowance for loan losses	Recorded investment in loans on nonaccrual	Recorded investment in loans past due 90 days or more and still accruing	TDRs
Personal Banking:
Residental mortgage loans	$	2,374,384	7,878	29,902	8	5,196
Home equity loans	1,052,485		8,211	9,569	—	2,128
Other consumer loans	218,464		4,860	1,989	750	—
Total Personal Banking	3,645,333		20,949	41,460	758	7,324
Business Banking:
Commercial real estate loans	1,572,948		35,560	55,018	—	50,944
Commercial loans	392,004		11,473	29,264	23	33,097
Total Business Banking	1,964,952		47,033	84,282	23	84,041
Total	$	5,610,285	67,982	125,742	781	91,365

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

	Recorded investment in loans receivable		Allowance for loan losses	Recorded investment in loans on nonaccrual	Recorded investment in loans past due 90 days or more and still accruing	TDRs
Personal Banking:
Residental mortgage loans	$	2,415,649	8,002	25,083	9	5,045
Home equity loans	1,076,637		8,294	9,114	2	1,891
Other consumer loans	235,367		5,156	1,980	776	—
Total Personal Banking	3,727,653		21,452	36,177	787	6,936
Business Banking:
Commercial real estate loans	1,585,833		34,499	57,861	388	49,826
Commercial loans	388,994		13,242	26,174	523	32,682
Total Business Banking	1,974,827		47,741	84,035	911	82,508
Total	$	5,702,480	69,193	120,212	1,698	89,444

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 class of financing receivable at March 31, 2013 (in thousands):

	Pennsylvania			New York		Ohio		Maryland		Other		Total
Recorded investment in loans receivable:
Personal Banking:
Residential mortgage loans	$	1,996,459		155,288		19,139		146,116		57,382		2,374,384
Home equity loans	899,546			108,371		10,361		28,185		6,022		1,052,485
Other consumer loans	201,368			9,879		2,832		1,208		3,177		218,464
Total Personal Banking	3,097,373			273,538		32,332		175,509		66,581		3,645,333
Business Banking:
Commercial real estate loans	883,200			452,805		28,060		138,983		69,900		1,572,948
Commercial loans	277,015			57,974		19,406		24,272		13,337		392,004
Total Business Banking	1,160,215			510,779		47,466		163,255		83,237		1,964,952
Total	$	4,257,588		784,317		79,798		338,764		149,818		5,610,285
Percentage of total loans in geographic area	75.9		%	14.0	%	1.4	%	6.0	%	2.7	%	100.0	%

	Pennsylvania			New York		Ohio		Maryland		Other		Total
Loans 90 or more days delinquent:
Personal Banking:
Residential mortgage loans	$	15,506		949		231		4,563		3,167		24,416
Home equity loans	5,023			1,378		163		1,246		157		7,967
Other consumer loans	1,722			76		—		—		4		1,802
Total Personal Banking	22,251			2,403		394		5,809		3,328		34,185
Business Banking:
Commercial real estate loans	15,389			541		105		4,027		2,142		22,204
Commercial loans	2,674			—		—		2,695		10,877		16,246
Total Business Banking	18,063			541		105		6,722		13,019		38,450
Total	$	40,314		2,944		499		12,531		16,347		72,635
Percentage of loans 90 or more days delinquent in geographic area.	0.9		%	0.4	%	0.6	%	3.7	%	10.9	%	1.3	%

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

	Pennsylvania			New York		Ohio		Maryland		Other		Total
Recorded investment in loans receivable:
Personal Banking:
Residential mortgage loans	$	2,024,520		158,090		19,290		152,676		61,073		2,415,649
Home equity loans	917,645			111,461		10,828		29,734		6,969		1,076,637
Other consumer loans	213,604			10,235		3,066		1,291		7,171		235,367
Total Personal Banking	3,155,769			279,786		33,184		183,701		75,213		3,727,653
Business Banking:
Commercial real estate loans	853,290			443,940		34,261		136,600		117,742		1,585,833
Commercial loans	269,415			55,517		12,878		25,497		25,687		388,994
Total Business Banking	1,122,705			499,457		47,139		162,097		143,429		1,974,827
Total	$	4,278,474		779,243		80,323		345,798		218,642		5,702,480
Percentage of total loans in geographic area	75.0		%	13.7	%	1.4	%	6.1	%	3.8	%	100.0	%

	Pennsylvania			New York		Ohio		Maryland		Other		Total
Loans 90 or more days delinquent:
Personal Banking:
Residential mortgage loans	$	15,694		1,430		231		3,932		2,999		24,286
Home equity loans	5,096			1,515		132		1,428		308		8,479
Other consumer loans	1,861			69		—		5		1		1,936
Total Personal Banking	22,651			3,014		363		5,365		3,308		34,701
Business Banking:
Commercial real estate loans	17,406			706		—		4,298		2,140		24,550
Commercial loans	3,493			7		—		2,678		2,918		9,096
Total Business Banking	20,899			713		—		6,976		5,058		33,646
Total	$	43,550		3,727		363		12,341		8,366		68,347
Percentage of loans 90 or more days delinquent in geographic area.	1.0		%	0.5	%	0.5	%	3.6	%	3.8	%	1.2	%

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 quarter ended March 31, 2013 (in thousands):

	Nonaccrual loans 90 or more days delinquent		Nonaccrual loans less than 90 days delinquent	Loans less than 90 days delinquent reviewed for impairment	TDRs less than 90 days delinquent not included elsewhere	Total impaired loans	Average recorded investment in impaired loans	Interest income recognized on impaired loans
Personal Banking:
Residental mortgage loans	$	24,416	5,486	—	3,000	32,902	31,013	190
Home equity loans	7,967		1,602	—	1,274	10,843	10,312	87
Other consumer loans	1,802		187	—	—	1,989	2,024	12
Total Personal Banking	34,185		7,275	—	4,274	45,734	43,349	289
Business Banking:
Commercial real estate loans	22,204		32,814	25,471	12,778	93,267	88,531	875
Commercial loans	16,246		13,018	3,643	5,511	38,418	45,656	272
Total Business Banking	38,450		45,832	29,114	18,289	131,685	134,187	1,147
Total	$	72,635	53,107	29,114	22,563	177,419	177,536	1,436

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, 2012 (in thousands):

	Nonaccrual loans 90 or more days delinquent		Nonaccrual loans less than 90 days delinquent	Loans less than 90 days delinquent reviewed for impairment	TDRs less than 90 days delinquent not included elsewhere	Total impaired loans	Average recorded investment in impaired loans	Interest income recognized on impaired loans
Personal Banking:
Residental mortgage loans	$	24,286	797	—	3,011	28,094	28,078	683
Home equity loans	8,479		635	—	1,352	10,466	10,535	342
Other consumer loans	1,936		44	—	—	1,980	1,841	35
Total Personal Banking	34,701		1,476	—	4,363	40,540	40,454	1,060
Business Banking:
Commercial real estate loans	24,550		33,311	33,282	16,274	107,417	98,891	3,636
Commercial loans	9,096		17,078	—	10,180	36,354	51,131	1,828
Total Business Banking	33,646		50,389	33,282	26,454	143,771	150,022	5,464
Total	$	68,347	51,865	33,282	30,817	184,311	190,476	6,524

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 March 31, 2013 (in thousands):

	Loans collectively evaluated for impairment		Loans individually evaluated for impairment	Loans individually evaluated for impairment for which there is a related impairment reserve	Related impairment reserve	Loans individually evaluated for impairment for which there is no related reserve
Personal Banking:
Residental mortgage loans	$	2,368,221	6,163	6,163	1,119	—
Home equity loans	1,050,094		2,391	2,391	390	—
Other consumer loans	218,464		—	—	—	—
Total Personal Banking	3,636,779		8,554	8,554	1,509	—
Business Banking:
Commercial real estate loans	1,498,738		74,210	56,806	9,939	17,404
Commercial loans	357,138		34,866	32,465	4,572	2,401
Total Business Banking	1,855,876		109,076	89,271	14,511	19,805
Total	$	5,492,655	117,630	97,825	16,020	19,805

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

	Loans collectively evaluated for impairment		Loans individually evaluated for impairment	Loans individually evaluated for impairment for which there is a related impairment reserve	Related impairment reserve	Loans individually evaluated for impairment for which there is no related reserve
Personal Banking:
Residental mortgage loans	$	2,411,932	3,717	3,717	992	—
Home equity loans	1,076,012		625	625	189	—
Other consumer loans	235,367		—	—	—	—
Total Personal Banking	3,723,311		4,342	4,342	1,181	—
Business Banking:
Commercial real estate loans	1,501,032		84,801	61,136	9,789	23,665
Commercial loans	352,752		36,242	35,622	5,637	620
Total Business Banking	1,853,784		121,043	96,758	15,426	24,285
Total	$	5,577,095	125,385	101,100	16,607	24,285

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

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 March 31, 2013
	Number of contracts	Recorded investment at the time of modification		Current recorded investment	Current allowance
Troubled debt restructurings:
Personal Banking:
Residential mortgage loans	2	$	179	162	26
Home equity loans	3	287		285	133
Other consumer loans	—	—		—	—
Total Personal Banking	5	466		447	159
Business Banking:
Commercial real estate loans	32	3,417		2,878	270
Commercial loans	21	1,728		1,513	171
Total Business Banking	53	5,145		4,391	441
Total	58	$	5,611	4,838	600
Troubled debt restructurings that subsequently defaulted:
Personal Banking:
Residential mortgage loans	1	$	244	237	30
Home equity loans	1	183		130	106
Other consumer loans	—	—		—	—
Total Personal Banking	2	427		367	136
Business Banking:
Commercial real estate loans	3	778		713	38
Commercial loans	6	16,267		11,708	2,174
Total Business Banking	9	17,045		12,421	2,212
Total	11	$	17,472	12,788	2,348

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

Schedule of loan delinquencies

The following table provides information related to loan delinquencies at March 31, 2013 (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	$	33,054	4,577	24,416	62,047	2,312,337	2,374,384
Home equity loans	6,254		2,321	7,967	16,542	1,035,943	1,052,485
Other consumer loans	3,684		1,145	1,802	6,631	211,833	218,464
Total Personal Banking	42,992		8,043	34,185	85,220	3,560,113	3,645,333
Business Banking:
Commercial real estate loans	12,833		4,448	22,204	39,485	1,533,463	1,572,948
Commercial loans	4,620		1,654	16,246	22,520	369,484	392,004
Total Business Banking	17,453		6,102	38,450	62,005	1,902,947	1,964,952
Total	$	60,445	14,145	72,635	147,225	5,463,060	5,610,285

The following table provides information related to loan delinquencies at December 31, 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	$	32,921	9,387	24,286	66,594	2,349,055	2,415,649
Home equity loans	6,534		1,977	8,479	16,990	1,059,647	1,076,637
Other consumer loans	5,456		1,830	1,936	9,222	226,145	235,367
Total Personal Banking	44,911		13,194	34,701	92,806	3,634,847	3,727,653
Business Banking:
Commercial real estate loans	13,001		4,596	24,550	42,147	1,543,686	1,585,833
Commercial loans	3,233		10,158	9,096	22,487	366,507	388,994
Total Business Banking	16,234		14,754	33,646	64,634	1,910,193	1,974,827
Total	$	61,145	27,948	68,347	157,440	5,545,040	5,702,480

Schedule of credit quality indicators

The following table sets forth information about credit quality indicators, which were updated during the quarter ended March 31, 2013 (in thousands):

	Pass		Special mention	Substandard	Doubtful	Loss	Recorded investment in loans receivable
Personal Banking:
Residential mortgage loans	$	2,355,253	—	17,952	—	1,179	2,374,384
Home equity loans	1,044,568		—	7,917	—	—	1,052,485
Other consumer loans	217,215		—	1,249	—	—	218,464
Total Personal Banking	3,617,036		—	27,118	—	1,179	3,645,333
Business Banking:
Commercial real estate loans	1,351,901		67,543	149,190	4,314	—	1,572,948
Commercial loans	324,303		13,955	52,539	1,207	—	392,004
Total Business Banking	1,676,204		81,498	201,729	5,521	—	1,964,952
Total	$	5,293,240	81,498	228,847	5,521	1,179	5,610,285

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

	Pass		Special mention	Substandard	Doubtful	Loss	Recorded investment in loans receivable
Personal Banking:
Residential mortgage loans	$	2,395,809	—	18,743	48	1,049	2,415,649
Home equity loans	1,068,183		—	8,454	—	—	1,076,637
Other consumer loans	234,106		—	1,261	—	—	235,367
Total Personal Banking	3,698,098		—	28,458	48	1,049	3,727,653
Business Banking:
Commercial real estate loans	1,352,118		68,130	163,751	1,834	—	1,585,833
Commercial loans	320,228		13,077	52,742	2,947	—	388,994
Total Business Banking	1,672,346		81,207	216,493	4,781	—	1,974,827
Total	$	5,370,444	81,207	244,951	4,829	1,049	5,702,480

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Loans receivable (Details 6) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2013	Dec. 31, 2012
Impaired loans by portfolio segment and by class of financing receivable
Loans collectively evaluated for impairment	$ 5,492,655	$ 5,577,095
Loans individually evaluated for impairment	117,630	125,385
Related impairment reserve	16,020	16,607
With related impairment reserve
Impaired loans by portfolio segment and by class of financing receivable
Loans individually evaluated for impairment	97,825	101,100
No related impairment reserve
Impaired loans by portfolio segment and by class of financing receivable
Loans individually evaluated for impairment	19,805	24,285
Personal Banking
Impaired loans by portfolio segment and by class of financing receivable
Loans collectively evaluated for impairment	3,636,779	3,723,311
Loans individually evaluated for impairment	8,554	4,342
Related impairment reserve	1,509	1,181
Personal Banking | With related impairment reserve
Impaired loans by portfolio segment and by class of financing receivable
Loans individually evaluated for impairment	8,554	4,342
Personal Banking | Residential mortgage loans
Impaired loans by portfolio segment and by class of financing receivable
Loans collectively evaluated for impairment	2,368,221	2,411,932
Loans individually evaluated for impairment	6,163	3,717
Related impairment reserve	1,119	992
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	6,163	3,717
Personal Banking | Home equity loans
Impaired loans by portfolio segment and by class of financing receivable
Loans collectively evaluated for impairment	1,050,094	1,076,012
Loans individually evaluated for impairment	2,391	625
Related impairment reserve	390	189
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	2,391	625
Personal Banking | Other consumer loans
Impaired loans by portfolio segment and by class of financing receivable
Loans collectively evaluated for impairment	218,464	235,367
Business Banking
Impaired loans by portfolio segment and by class of financing receivable
Loans collectively evaluated for impairment	1,855,876	1,853,784
Loans individually evaluated for impairment	109,076	121,043
Related impairment reserve	14,511	15,426
Business Banking | With related impairment reserve
Impaired loans by portfolio segment and by class of financing receivable
Loans individually evaluated for impairment	89,271	96,758
Business Banking | No related impairment reserve
Impaired loans by portfolio segment and by class of financing receivable
Loans individually evaluated for impairment	19,805	24,285
Business Banking | Commercial real estate
Impaired loans by portfolio segment and by class of financing receivable
Loans collectively evaluated for impairment	1,498,738	1,501,032
Loans individually evaluated for impairment	74,210	84,801
Related impairment reserve	9,939	9,789
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	56,806	61,136
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	17,404	23,665
Business Banking | Commercial loans
Impaired loans by portfolio segment and by class of financing receivable
Loans collectively evaluated for impairment	357,138	352,752
Loans individually evaluated for impairment	34,866	36,242
Related impairment reserve	4,572	5,637
Business Banking | Commercial loans | With related impairment reserve
Impaired loans by portfolio segment and by class of financing receivable
Loans individually evaluated for impairment	32,465	35,622
Business Banking | Commercial loans | No related impairment reserve
Impaired loans by portfolio segment and by class of financing receivable
Loans individually evaluated for impairment	$ 2,401	$ 620

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Investment securities and impairment of investment securities (Details 6) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2013	Dec. 31, 2012	Mar. 31, 2012	Dec. 31, 2011
Book value, fair value, unrealized losses and other-than-temporary impairment recorded in earnings
Total Fair Value	$ 1,112,104	$ 1,079,074
Unrealized gain/ (loss)	4,157	4,327
Total impairment recorded in prior period earnings	9,744	9,811	10,560	11,633
Non-agency CMOs
Marketable securities
Number of investments	7
Book value, fair value, unrealized losses and other-than-temporary impairment recorded in earnings
Amortized cost	5,901
Total Fair Value	6,252
Unrealized gain/ (loss)	351
Total impairment recorded in prior period earnings	(1,153)
Non-agency CMOs | AMAC 2003-6 2A2
Book value, fair value, unrealized losses and other-than-temporary impairment recorded in earnings
Amortized cost	177
Total Fair Value	182
Unrealized gain/ (loss)	5
Non-agency CMOs | AMAC 2003-6 2A8
Book value, fair value, unrealized losses and other-than-temporary impairment recorded in earnings
Amortized cost	366
Total Fair Value	376
Unrealized gain/ (loss)	10
Non-agency CMOs | BOAMS 2005-11 1A8
Book value, fair value, unrealized losses and other-than-temporary impairment recorded in earnings
Amortized cost	346
Total Fair Value	487
Unrealized gain/ (loss)	141
Total impairment recorded in prior period earnings	(146)
Non-agency CMOs | CWALT 2005-J14 A3
Book value, fair value, unrealized losses and other-than-temporary impairment recorded in earnings
Amortized cost	3,581
Total Fair Value	3,796
Unrealized gain/ (loss)	215
Total impairment recorded in prior period earnings	(1,007)
Non-agency CMOs | CFSB 2003-17 2A2
Book value, fair value, unrealized losses and other-than-temporary impairment recorded in earnings
Amortized cost	352
Total Fair Value	357
Unrealized gain/ (loss)	5
Non-agency CMOs | WAMU 2003-S2 A4
Book value, fair value, unrealized losses and other-than-temporary impairment recorded in earnings
Amortized cost	274
Total Fair Value	276
Unrealized gain/ (loss)	2
Non-agency CMOs | WFMBS 2003-B A2
Book value, fair value, unrealized losses and other-than-temporary impairment recorded in earnings
Amortized cost	805
Total Fair Value	778
Unrealized gain/ (loss)	(27)
Non-agency CMOs for which book value exceeds carrying value
Marketable securities
Number of investments	1
Book value, fair value, unrealized losses and other-than-temporary impairment recorded in earnings
Amortized cost	805
Total Fair Value	$ 778

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CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Net Income	$ 15,298	$ 15,181
Net unrealized holding gains on marketable securities:
Unrealized holding gains net of tax of $(436) and $(870), respectively	670	1,361
Other-than-temporary impairment on securities included in net income, net of tax of $0 and $(93), respectively		145
Reclassification adjustment for gains included in net income, net of tax of $43 and $31, respectively	(66)	(49)
Net unrealized holding gains on marketable securities	604	1,457
Change in fair value of interest rate swaps, net of tax of $(367) and $(297), respectively	680	551
Defined benefit plan:
Reclassification adjustment for prior period service costs included in net income, net of tax of $(123) and $(231), respectively	229	431
Other comprehensive income	1,513	2,439
Total comprehensive income	$ 16,811	$ 17,620

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CONSOLIDATED STATEMENTS OF CASH FLOWS (Parenthetical) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012
CONSOLIDATED STATEMENTS OF CASH FLOWS
Interest on deposits and borrowings, interest credited to deposit accounts	$ 7,031	$ 11,065

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Pension and Other Post-retirement Benefits (Details) (USD $)	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012
Pension Plans
Components of net periodic pension cost
Service cost	$ 1,138,000	$ 1,858,000
Interest cost	1,301,000	1,432,000
Expected return on plan assets	(2,138,000)	(1,948,000)
Amortization of prior service cost	(580,000)	(40,000)
Amortization of net loss	919,000	690,000
Net periodic benefit cost	640,000	1,992,000
Additional benefits as a percentage of career average pay for each year	1.00%
Number of hours of service need to be completed to avail additional benefit under amendment	1000 hours
Employee age required to participate in the plan	70 years 6 months
Employer contribution to pension or other post-retirement	0
Anticipated tax deductible contribution	4,500,000
Postretirement Healthcare Plan
Components of net periodic pension cost
Interest cost	16,000	17,000
Amortization of net loss	13,000	12,000
Net periodic benefit cost	29,000	29,000
Employer contribution to pension or other post-retirement	$ 0

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Goodwill and Other Intangible Assets (Tables)

3 Months Ended

Mar. 31, 2013

Goodwill and Other Intangible Assets

Schedule of intangible assets subject to amortization

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

	March 31,			December 31,
	2013			2012
Amortizable intangible assets:
Core deposit intangibles — gross	$	30,578		30,578
Acquisitions	—			—
Less: accumulated amortization	(30,284		)	(30,181	)
Core deposit intangibles — net	294			397
Customer and Contract intangible assets — gross	6,197			3,779
Acquisition of The Bert Company	—			2,418
Less: accumulated amortization	(3,310		)	(3,065	)
Customer and Contract intangible assets — net	$	2,887		3,132

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

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

For the three months ended March 31, 2013	$	348
For the three months ended March 31, 2012	295
For the year ending December 31, 2013	1,210
For the year ending December 31, 2014	814
For the year ending December 31, 2015	571
For the year ending December 31, 2016	415
For the year ending December 31, 2017	259
For the year ending December 31, 2018	173

Schedule of the changes in carrying amount of goodwill

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, 2011	$	170,269	1,613	171,882
Goodwill acquired	2,579		—	2,579
Impairment losses	—		—	—
Balance at December 31, 2012	172,848		1,613	174,461
Goodwill acquired	2		—	2
Impairment losses	—		—	—
Balance at March 31, 2013	$	172,850	1,613	174,463

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Investment securities and impairment of investment securities (Details 3) (USD $)	3 Months Ended
	Mar. 31, 2013 item	Dec. 31, 2012
Information for portfolio of municipal securities that have been in an unrealized loss position for more than 12 months
Less than 12 months - Fair value	$ 308,045,000	$ 238,873,000
Less than 12 months - Unrealized loss	(1,664,000)	(1,401,000)
12 months or more - Fair value	36,479,000	37,237,000
12 months or more - Unrealized loss	(2,493,000)	(2,940,000)
Total - Fair value	344,524,000	276,110,000
Total - Unrealized loss	(4,157,000)	(4,341,000)
Number of investments which experienced cash flow disruption	0
Non-agency CMOs
Information for portfolio of municipal securities that have been in an unrealized loss position for more than 12 months
Number of investments	7
U.S. government and agencies
Information for portfolio of municipal securities that have been in an unrealized loss position for more than 12 months
Less than 12 months - Fair value	110,396,000	70,128,000
Less than 12 months - Unrealized loss	(288,000)	(286,000)
12 months or more - Fair value		6,537,000
12 months or more - Unrealized loss		(1,000)
Total - Fair value	110,396,000	76,665,000
Total - Unrealized loss	(288,000)	(287,000)
Corporate debt issues
Information for portfolio of municipal securities that have been in an unrealized loss position for more than 12 months
Less than 12 months - Fair value	850,000	850,000
Less than 12 months - Unrealized loss	(40,000)	(39,000)
12 months or more - Fair value	12,083,000	12,095,000
12 months or more - Unrealized loss	(2,339,000)	(2,652,000)
Total - Fair value	12,933,000	12,945,000
Total - Unrealized loss	(2,379,000)	(2,691,000)
Number of investments	6
Number of impaired investments considered noncredit related	3
Investments where the amortized cost exceeded the fair value for more than 12 months, total amortized cost	14,400,000
Variable rate basis	three month LIBOR
Single issuer trust preferred investments
Information for portfolio of municipal securities that have been in an unrealized loss position for more than 12 months
Number of investments	3
Pooled trust preferred investments
Information for portfolio of municipal securities that have been in an unrealized loss position for more than 12 months
Number of investments	3
Equity securities
Information for portfolio of municipal securities that have been in an unrealized loss position for more than 12 months
Less than 12 months - Fair value		601,000
Less than 12 months - Unrealized loss		(21,000)
12 months or more - Fair value		17,000
12 months or more - Unrealized loss		(1,000)
Total - Fair value		618,000
Total - Unrealized loss		(22,000)
Residential mortgage-backed securities | Non-agency CMOs
Information for portfolio of municipal securities that have been in an unrealized loss position for more than 12 months
12 months or more - Fair value	778,000	4,357,000
12 months or more - Unrealized loss	(27,000)	(256,000)
Total - Fair value	778,000	4,357,000
Total - Unrealized loss	(27,000)	(256,000)
Residential mortgage-backed securities | Agency CMOs
Information for portfolio of municipal securities that have been in an unrealized loss position for more than 12 months
Less than 12 months - Fair value	196,799,000	167,294,000
Less than 12 months - Unrealized loss	(1,336,000)	(1,055,000)
12 months or more - Fair value	23,618,000	14,231,000
12 months or more - Unrealized loss	(127,000)	(30,000)
Total - Fair value	220,417,000	181,525,000
Total - Unrealized loss	$ (1,463,000)	$ (1,085,000)

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Mortgage Loan Servicing

3 Months Ended

Mar. 31, 2013

Mortgage Loan Servicing

Mortgage Loan Servicing

(10) Mortgage Loan Servicing

Mortgage servicing assets are recognized as separate assets when through loan originations and purchases 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 March 31, 2013 (in thousands):

					Net
					carrying
	Servicing			Valuation	value and
	rights			allowance	fair value
Balance at December 31, 2012	$	3,291		—	3,291
Additions/ (reductions)	382			—	382
Amortization	(591		)	—	(591	)
Balance at March 31, 2013	$	3,082		—	3,082

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

					Net
					carrying
	Servicing			Valuation	value and
	rights			allowance	fair value
Balance at December 31, 2011	$	3,655		—	3,655
Additions/ (reductions)	513			—	513
Amortization	(734		)	—	(734	)
Balance at March 31, 2012	$	3,434		—	3,434

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

	March 31,			March 31,
	2013			2012
	(Weighted average)
Forward yield curve (5 year LIBOR swap)	0.9		%	1.3		%
Prepayment rates	15.9		%	20.6		%
Annual service cost per loan	$	68		$	67
Average life expectancy (months)	65			48
Option adjusted spread (basis points) (1)	800			—
Discount rate (2)	—			10.5		%

(1) Stochastic modeling

(2)  Static modeling