"We see the potential for significant growth in this market and want to be adequately positioned, from a capital perspective, to act on the opportunities that become available," Glenn Moyer, National Penn Bancshares Inc.'s chief executive officer, said yesterday.

National Penn, of Boyertown, said it experienced a pickup in demand for loans last month, as borrowers started migrating from bigger banks that were having troubles. The bank had net loan growth of $74 million, or 1.2 percent.

Among small and midsize banks with between $1 billion and $12 billion in loans, Wilmington Trust Corp. led the way by posting a net gain of nearly $300 million in loans - or 3.2 percent - from July through September.

Ted Cecala, the Wilmington bank's chairman and chief executive, attributed the better-than-expected growth to the Mid-Atlantic region's broad range of industries.

"That diversification continues to provide opportunities," he said.

At the same time, bank executives said, they are being cautious about lending, as is always the case during cyclical economic downturns when bad loans mount. The great uncertainty is just how many borrowers are going to fail to make their payments.

The current downturn is different from others because it has been accompanied by extraordinary problems at the highest levels of finance and at the biggest banks, leading to unprecedented interventions by the Federal Reserve and the U.S. Department of the Treasury.

In most economic cycles, the largest banks are seen as the stable ones. In this case, the opposite may be true. "Psychologically," Cecala said, "that's had a real impact on the marketplace."

Beyond the psychological impact that caused debilitating uncertainty, some of the biggest banks have been forced to shrink their balance sheets because of losses on loans and investments. In some cases, that means they sever relationships with customers, creating opportunities for others.

"We're getting some market share because some other banks aren't lending," said R. Scott Smith, chairman and chief executive of Fulton Financial Corp., of Lancaster. "We're trying to manage that because we don't have unlimited capital or funding."

New business is coming not so much from companies that are expanding, but from companies that were rebuffed by other lenders trying to conserve capital, Smith said. For example, he said, a local auto dealer that lost its usual financing from a car manufacturer recently has gotten credit from Fulton Financial.

Regional banks do not appear to be jacking up prices to take advantage of the market turmoil.

Tom Panzarella, president and chief executive of manufacturer Cook Technologies Inc., in Montgomery County, said he just got new credit lines with very good terms from Univest Corp., where he has banked for 30 years. "I think it's because they know me and our company," he said.

Paul D. Geraghty, CEO of Univest competitor Harleysville National Corp., said he had seen the cost of loans increasing only slightly. "I think it's still pretty competitive. I haven't seen pricing in the last six weeks, eight weeks move much."

Something to watch is how many banks get money from the Treasury Department's planned $125 billion investment in banks, beyond the nine that got the first $125 billion.

"Anybody who's healthy who isn't thinking pretty hard about taking some of it would be making a mistake," Geraghty said. "We're looking at it in excruciating detail."

Geraghty said the Montgomery County bank would use the money to make loans to companies with $100 million or less in annual revenue, though the bank would do it with extreme care.

The state of the economy has made a big difference in how Geraghty spends his time.

"I probably average the better part of 90 minutes a day talking about credit, looking at numbers, giving people ideas on numbers to run," he said. "A year ago, it would have been 45 minutes."

Loan Growth

While credit worldwide dried up during the third quarter, some Philadelphia-area banks increased their lending.

Bank                 Loan total on 9/30 % change from 6/30

Wilmington Trust         $9.5 billion +3.22

Univest                $1.4 billion +3.06

Susquehanna             $9.3 billion +2.37

Fulton Financial       $11.7 billion +2.02

Harleysville National    $2.5 billion +1.21

National Penn            $6.2 billion +1.21

SOURCE: Individual banks