NBT Bancorp Inc. in Norwich, N.Y., said its third-quarter earnings were flat from a year earlier, at $15.1 million, or 46 cents a share.

Higher expenses offset a 14.2% increase in net interest income, to $47 million, and a 14.7% increase in noninterest income, to $19 million, the $5.3 billion-asset NBT said late Monday.

The loan-loss provision rose 50%, to $7.2 million. NBT said it charged off a large commercial loan for which it had no reserve set aside.

Still, net chargeoffs dropped 16%, to $5.9 million, and the chargeoff ratio fell 17 basis points, to 0.65% of average loans and leases.

NBT said chargeoffs had been higher in the third quarter of last year because of troubled agricultural loans.

Nonperforming loans decreased 20%, to $24.7 million, or 0.69% of the total.

NBT said operating expenses went up partly because of a $500,000 hike in the insurance premium it pays to the Federal Deposit Insurance Corp. It also took a $2 million impairment charge on lease residual assets after incurring higher losses on the sale of leased vehicles that had been returned.

Martin Dietrich, NBT's president and chief executive officer, said in a press release that he was "extremely pleased" with the results, given the credit crisis.

Higher loan volume helped the net interest margin rise 38 basis points, to 3.94%.

The yield on earning assets fell 47 basis points, but the amount NBT had to pay on deposits fell by twice that amount.

Initiatives to increase fee income also paid off. Service charges on accounts and debit cards increased by $1.4 million, NBT said. Insurance revenue rose $1.3 million as a result of the acquisition of Mang Insurance Agency.

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