By ALLISSA KLINE
akline@bizjournals.com | 716-541-1612

The parent of Northwest Savings Bank will not purchase a small bank in Pennsylvania after all.

Northwest Bancshares Inc. said Monday that its plan to buy NexTier Inc., a move that would boost its presence in the western end of the state, is being terminated due to "the expectation that the merger would not receive required approval" from the Federal Deposit Insurance Corp. A press release issued by the Warren, Pa.-based bank said the FDIC is unhappy with "various components" of the bank's consumer compliance program.

Northwest said it will address the concerns and expects to receive a formal enforcement order from the FDIC about its compliance program.

Simultaneously, the financial company is authorizing the repurchase of no more than 11 million outstanding shares of common stock. Repurchases will begin no sooner than Dec. 18.

"The repurchases of common shares, when permitted by regulation and during periods of favorable market conditions, continues to be an integral part of our capital management program," Northwest President and CEO William Wagner said. "We believe shareholder value can be enhanced through a share repurchase program."

Northwest operates 171 branches in five states, including eight in Western New York. Some are known as Jamestown Savings Bank.

The bank announced in May that it planned to pay $20.3 million in cash to purchase NexTier Inc., the parent of NexTier Bank. The deal, which included 15 additional branches in Pennsylvania's Allegany, Armstrong and Butler counties, was supposed to close during the fourth quarter of 2010.