NORWICH – NBT Bancorp Inc. reported today net income for the quarter that ended Sept. 30, 2006 was $14.5 million, up 7.5 percent or $1.0 million from net income of $13.5 million reported for the same period in 2005.
Net income per diluted share for the three months ended Sept. 30 was $0.43 per share, compared with $0.41 per share for the same period in 2005. Return on average assets and return on average equity were 1.15% and 14.89%, respectively, for the quarter ended Sept. 30, compared with 1.23% and 16.06% respectively, for the same period in 2005. The increase in net income for the quarter ended Sept. 30, was primarily the result of a $1.0 million increase in net interest income and a $2.2 million increase in noninterest income.
In addition, the company experienced a decrease in the provision for loan and lease losses of $0.3 million for the quarter ended Sept. 30, compared with the same period in 2005. The aforementioned increases in income and reduction of the provision for loan and lease losses were partially offset by a $1.3 million increase in noninterest expense. Results for the three months ended Sept. 30, include $0.4 million in pre-tax salaries and benefits expense related to stock options resulting from the adoption on January 1, 2006, of Statement of Financial Accounting Standard No. 123 (revised 2004) (FAS 123R) “Share-Based Payment,” which requires companies to measure and recognize compensation expense for all share-based payments. The adoption of FAS 123R lowered diluted earnings per share by $0.01 for the three months ended Sept. 30.
 Net income for the nine months ended Sept. 30, was $42.3 million, up 7.2% or $2.9 million from net income of $39.4 million reported for the same period in 2005. Net income per diluted share for the nine month period ended Sept. 30 was $1.24 per share, compared with $1.20 per share for the same period in 2005. Return on average assets and return on average equity were 1.16% and 14.93%, respectively, for the nine months ended Sept. 30, compared with 1.23% and 16.03%, respectively, for the same period in 2005. The increase in net income for the nine months ended Sept. 30 was primarily the result of a $4.3 million increase in net interest income and a $4.2 million increase in noninterest income. In addition, the company experienced a decrease in the provision for loan and lease losses of $1.0 million for the nine months ended Sept. 30, compared with the same period in 2005. The aforementioned increases in income were partially offset by a $5.9 million increase in noninterest expense. Results for the nine months ended Sept. 30, include $1.4 million in pre-tax salaries and benefits expense related to stock options resulting from the adoption of FAS 123R on January 1, 2006. This lowered diluted earnings per share by $0.03 for the nine months ended Sept. 30.
The comparability of financial information is affected by the acquisition of CNB Bancorp, Inc. (“CNB”). Operating results include the operations of CNB from the date of acquisition, which was February 10, 2006.
NBT President and CEO Martin A. Dietrich said, “Despite the continuing flat/inverted yield curve environment in our industry, we were able to sustain our growth and eclipse $5 billion in total assets during the quarter. While net interest margins continue to tighten, we were able to post improved earnings due to our noninterest income and the growth of our earning assets. We overcame the effects of the historic June flooding with minimal financial impact and minimal business interruption due to the focus and commitment of our people.”