94% and 3.53%
for the quarters ending March 31, 2005 and 2004, respectively.17%.1 billion at March 31, 2004.3 billion from the levels at March 31, 2004.
KNBT's total shareholders' equity decreased by $29. Copies
of these documents may be obtained from KNBT upon request and without charge
(except for the exhibits thereto) or can be accessed at the website maintained
by the SEC at http://www.17 $0.
Cardholders can make a free ATM cash withdrawal after each payment at
any AmSouth or Allpoint ATM.

fnma faxed

The dividend will be paid on
June 1, 2005 to shareholders of record May 16, 2005.1 million for the three months ended December 31, 2004. At March
31, 2005, KNBT's total non-performing assets equaled $4. At March 31, 2005,
KNBT's allowance for loan losses equaled 257.5 million from $2.
Consolidated Statements of Income
(unaudited)

For the Three Months Ended
March 31, Dec 31, Sept 30, June 30, March 31,
2005 2004 2004 2004 2004
(dollars in thousands)
Interest
Income $26,966 $26,973 $24,772 $23,195 $22,351

Interest
Expense 10,827 10,476 8,777 7,318 6,875

Net Interest
Income 16,139 16,497 15,995 15,877 15,476

Provision for
Loan Losses 734 1,095 742 971 1,500

Net Interest
Income after
Provision for
Loan Losses 15,405 15,402 15,253 14,906 13,976

Non-Interest Income:
Deposit Service
Charges 1,105 1,117 1,040 1,009 1,311
Securities Gains
(Losses), net 432 46 338 20 (8)
Trust and
Investment
Services Income 946 712 504 489 513
Bank-Owned Life
Insurance 652 661 669 655 667
Other 1,307 1,653 1,289 1,265 1,484

Total Non-Interest
Income 4,442 4,189 3,840 3,438 3,967

Non-Interest
Expenses:
Salaries , Wages and
Employee
Benefits 7,848 7,451 7,473 7,309 7,245
Net Occupancy and
Equipment
Expense 2,113 2,230 2,318 1,962 1,825
Other 3,464 4,000 3,705 3,746 3,435

Total Non-Interest
Expense 13,425 13,681 13,496 13,017 12,505

Income before
Income Taxes 6,422 5,910 5,597 5,327 5,438

Income Tax
Expense 1,592 1,174 1,150 1,019 1,323

Net Income $4,830 $4,736 $4,447 $4,308 $4,115

Per Common Share Data

Weighted Average
Common Shares-
Diluted 28,537,778 29,077,739 29,285,250 29,655,263 30,011,264

Weighted Average
Common Shares-
Basic 28,226,035 28,586,796 28,875,080 29,232,941 29,555,238

Net Income Per
Share- Diluted $ 0.14

Net Income Per
Share- Basic $ 0.14

Book Value $13.38% 204.80% 0.

recordkeeper mjk

1 million and its
ratio of non-performing loans to total assets was 0.

About KNBT Bancorp, Inc.17 $ 0.21% 0.
The Spectrum Card provides the cardholder a safer option than
cashing their child support check, as well as a monthly record of
their transactions both online and via a paper statement, and is
convenient and widely accepted. AmSouth
operates in Florida, Tennessee, Alabama, Mississippi, Louisiana and
Georgia.

calculates fnma

2 billion
for the quarter ended March 31, 2005 compared to $1. The increase
reflected primarily the effects of a $603,000 increase in salaries and
benefits and a $288,000 increase in net occupancy and equipment expense.7% or $107. Sobol, Senior Executive Vice President, Chief Financial Officer
and Chief Operating Officer, KNBT Bancorp, Inc.01% 0.98% 0.

quicken recurring

68% for the same period in 2004.01% of its total loans. Keystone Nazareth Bank + Trust Company is a
Pennsylvania chartered savings bank headquartered in Bethlehem, Pennsylvania
with 41 branch offices in Lehigh, Northampton , Carbon and Monroe Counties,
Pennsylvania.01% 1.39% 206.83% 17.
(unaudited)

Three Months Ended
March 31,
2005 2004
(dollars in thousands,
except per share data)

Interest Income $26,966 $22,351

Interest Expense 10,827 6,875

Net Interest Income 16,139 15,476

Provision for Loan Losses 734 1,500

Net Interest Income After
Provision for Loan Losses 15,405 13,976

Deposit Service Charges 1,105 1,311
Securities gains (losses), net 432 (8)
Trust and Investment Services Income 946 513
Bank-Owned Life Insurance 652 667
Other Income 1,307 1,484

Total Other Operating Income 4,442 3,967

Salaries, Wages and Employee Benefits 7,848 7,245
Net Occupancy and Equipment Expense 2,113 1,825
Other Expenses 3,464 3,435

Total Other Operating Expenses 13,425 12,505

Income Before Income Taxes 6,422 5,438

Income Tax Expense 1,592 1,323

Net Income $4,830 $4,115

Net Income Per Share- Diluted $0.

recurring mmr

and Keystone Nazareth Bank +
Trust Company, 610-861-5000

The information contained in this press release may contain forward-
looking statements (as defined in the Securities Exchange Act of 1934 and the
regulations thereunder) which are not historical facts or as to KNBT Bancorp,
Inc.35 $13.99% 0.
(unaudited)

June 30, March 31,
Balances (Period End) 2004 2004
(dollars in thousands)

Assets $2,184,688 $2,057,085

Earning Assets 1,960,698 1,845,189
Investment Securities 973,984 882,684
Loans 966,551 913,518
Loans Held for Sale 1,532 3,745
Other Earning Assets 18,631 45,242

Total Deposits 1,310,982 1,294,215
Non-Interest Bearing Deposits 124,456 112,856
Interest Bearing Checking 171,506 169,184
Money Market 260,329 245,826
Savings 222,754 223,370
Certificates of Deposit 429,224 439,089
IRA and Koegh 102 ,713 103,890

Other Borrowings 31,076 28 ,393
Federal Home Loan Bank 433,428 308,540
Shareholders ' Equity 376,222 397,866

For the Three Months Ended
March 31 , Dec 31, Sept 30,
Balances (Daily Average) 2005 2004 2004
(dollars in thousands)

Assets $2,400,263 $2,400,764 $2,206,304

Earning Assets 2,197,956 2,193,147 1,989,102
Investment securities 1,126,471 1,151,902 996,775
Loans 1,009,517 1,004,141 982 ,126
Loans Held for Sale 1,425 386 929
Other Earning Assets 60,543 36,718 9,272

Total Deposits 1,322,272 1,318,604 1,299,164
Non-Interest Bearing Accounts 123,805 123,830 119,156
Interest Bearing Checking 176,622 174,712 174 ,871
Money Market 247,648 253,298 250,345
Savings 209,538 212,964 220,901
Certificates of Deposit 463,777 452,815 432,307
IRA and Koegh 100 ,882 100,985 101,584

Other Borrowings 18,732 18,115 24,739
Federal Home Loan Bank 651,901 648,902 472,495
Shareholders' Equity 377,925 382,811 380,437

June 30, March 31,
Balances (Daily Average) 2004 2004
(dollars in thousands)

Assets $2,070,220 $1,979,186

Earning Assets 1,852,924 1,755,180
Investment securities 878,553 815,507
Loans 938,987 903,253
Loans Held for Sale 3 ,735 30
Other Earning Assets 31,649 36,390

Total Deposits 1,302,837 1,292,969
Non-Interest Bearing Accounts 117,570 115,925
Interest Bearing Checking 171,152 178,104
Money Market 254,073 238,371
Savings 226,276 224,034
Certificates of Deposit 431,062 433,512
IRA and Koegh 102,704 103,023

Other Borrowings 24,127 23,296
Federal Home Loan Bank 328,562 248,470
Shareholders' Equity 386,266 393,393

For the Three Months Ended
March 31, Dec 31, Sept 30, June 30, March 31,
Ratios 2005 2004 2004 2004 2004
Return on Average
Equity 5.12% 3.17 $0.

balances essentia

0 million annually.3 million to $646.
Beginning on June 1st 2005, twenty thousand parents who receive
child support payments through the Alabama Central Disbursement
Division (ACDD) will have the option of receiving the payments on
AmSouth's Spectrum Card rather than by direct deposit or paper check. We
are looking for ways to reduce the cost of printing checks, and up
until now , our only option was regular Direct Deposit. The card will also provide security
and convenience for parents who don't have a checking account.com

speedresearch smartmoney

1 million for the first
quarter of 2005 compared to $15. Without the
adjustment for tax-free income, the net interest margin was 2.6
million at March 31, 2005 compared to March 31, 2004.15 $ 0.15 $ 0.40% 0.99%
Total Loans at
Period End 1.84% 0.03% 13.

withdraw checkbooks

20 per share.
Scott V.
Average interest-earning assets increased by $442.
Non-interest expense was $13.1 million to $1.50% 0.45% 0.18%
Return on Average
Assets 0.19% 64.77% 14.

checkbook smartmoney

4%
increase over the first quarter of 2004.5 million for the same period in
2004, and $1.

Website: http://www.15 $ 0.03% 1.66% 326.

recordkeeper recurring

("NEPF") are proceeding on schedule. The increase in the dividend and our continued stock
buyback program further demonstrates our commitment to enhance shareholder
value.0 billion while deposits increased 3. Advances from the
Federal Home Loan Bank ("FHLB") increased by $338. ("KNBT" or "Holding Company") management's intentions, plans, beliefs,
expectations or opinions or with respect to the operation of the Caruso
Benefits Group, Inc.01% 1.

essentia balances

17 for the quarter ended March 31, 2005, a 21.06 per common share. We look forward to the successful
completion of this transaction the middle of the second quarter.7 million increases in the average balance of the investment
portfolio and the loan portfolio, respectively.05% compared to 3.

Provision for Loan Losses and Related Allowance for Loan Losses
The provision for loan losses declined substantially to $734,000 for the
quarter ended March 31, 2005 compared to $1. Non-interest income increased $253,000
for the quarter ended March 31, 2005 compared to the quarter ended December
31 , 2004, primarily due to a net increase in security gains of $386,000.
Investment securities increased $215.1 billion.com

Contacts:
Scott V.33 $13.04 $13.
Asset Quality
(unaudited)

At Period End or
For the Three Months Ended
March 31, Dec 31, Sept 30, June 30, March 31,
2005 2004 2004 2004 2004
(dollars in thousands)
Non-Accruing
Loans $3,768 $4,544 $3 ,801 $4,020 $2,747

Accruing Loans
90 Days or more
Past Due 292 511 653 654 7

Total Non-Performing
Loans 4,060 5,055 4,454 4,674 2,754

Other Real
Estate Owned - 71 32 201 153

Total Non-Performing
Assets $4,060 $5,126 $4,486 $4,875 $2,907

Total Non-Performing
Loans as a
Percentage of
Loans, net 0.30%

Total Non -Performing
Loans as a Percentage
of Total Assets 0.21% 0.04% 1.83%
Net interest Margin
(tax equivalent) 3.89% 15.

mjk checkbook

8 million for the quarter ended
March 31, 2005, an increase of $715,000 or 17.4% compared to net income of
$4."

Net Interest Income and Net Interest Margin
Net interest income increased by $663,000 to $16. is the parent bank holding company for Keystone
Nazareth Bank + Trust Company.17% 0.34% 3. In
addition , they can now enjoy the freedom and convenience that comes
with carrying a Visa card product," explains David Clarke, Vice
President and Product Manager, Commercial Card Services, at AmSouth.

essentia smartmoney

The net interest margin on a tax-equivalent basis for the quarter ended
March 31, 2005 was 3.
and Keystone Nazareth Bank + Trust Company, 610-861-5000

Eugene T. KNBT undertakes no obligation to update
these forward-looking statements to reflect events or circumstances that occur
after the date on which such statements were made.79% 0.62% 16.
"The Spectrum Card will allow the recipients access to their funds
without the hassle or fees associated with cashing their checks. AmSouth also offers a complete line of banking products and
services at its web site, www.

checkbooks checkbook

This quarterly dividend
represents a 20% increase over the current dividend. In addition, our integration
plans for the pending acquisition of Northeast Pennsylvania Financial Corp.

Non-Interest Income and Non -Interest Expense
Non-interest income was $4.4 million for the quarter ended March 31,
2005 , an increase of $920,000 over the same period in 2004.2
million to $1.17% 0.19% 0.56% 3.97% 64.17% 17. AmSouth is a leader among regional banks in the Southeast in
several key business segments, including consumer and commercial
banking, small business banking, mortgage lending , equipment leasing,
annuity and mutual fund sales, and trust and investment management
services .

balances osx

KNBT Bancorp Inc. Announces First Quarter Earnings And Declares 20% Increase In Quarterly Dividend

KNBT reported diluted
earnings per share of $0.
KNBT also announced that its Board of Directors declared a dividend for
the second quarter of $0. This growth was primarily attributable to the $311
million and $107.4 million for the quarter ended March 31, 2005,
an increase of $475 ,000 over the amount earned in the comparable period in
2004. The decrease reflected
the cost of repurchasing 964,000 shares as part of KNBT's announced buyback
program and purchasing 808,047 shares for the 2004 Management Recognition and
Retention Plan, as well as the payment of cash dividends .
KNBT Bancorp, Inc. The following factors, among others, could
cause actual results to differ materially from the anticipated results or
other expectations expressed in the forward-looking statements: (1) economic
and competitive conditions which could affect the volume of loan originations,
deposit flows and real estate values; (2) the levels of non-interest income
and expense and the amount of loan losses; (3) estimated cost savings from the
acquisition of NEPF cannot be fully realized within the expected time frame;
(4) revenues following the acquisitions of Caruso and NEPF are lower than
expected; (5) competitive pressure among depository institutions increases
significantly; (6) costs or difficulties related to the integration of the
businesses of KNBT, NEPF and Caruso are greater than expected; (7) changes in
the interest rate environment may reduce interest margins; (8) general
economic conditions, either nationally or in the markets in which KNBT is or
will be doing business , are less favorable than expected; (9) legislation or
changes in regulatory requirements adversely affect the business in which KNBT
would be engaged; (10) regulatory approvals to acquire NEPF are not obtained;
or (11) factors which result in a condition to the acquisition of NEPF not
being met as well as other factors discussed in the documents filed by KNBT
with the Securities and Exchange Commission ("SEC") from time to time.21% 0.13%

Total Non-Performing
Assets as a Percentage
of Total Assets 0.

recordkeeper osx

Approximately 2."
"In early April we announced the completion of the acquisition of Caruso
Benefits Group, Inc.8 million to $2.39% of its non-performing loans
and 1.

KNBT Bancorp, Inc.03% 0.11% 4. So we're very
excited about working with AmSouth to offer this option, along with
the convenience it offers the customer," said Joe Bruner, Assistant
Manager at the ACDD.

faxed mjk

1 million for the quarter ended March 31, 2004.8 billion for the quarter
ended March 31, 2004.6 million to $1. ("NEPF").80%

KNBT Bancorp, Inc.95% 4.49% 4.

Business Editors

BIRMINGHAM , Ala.

mjk checkbooks

9 million
at March 31, 2005 and were used to fund purchases of investment securities.gov.14 %

Allowance for
Loan Losses,
Beginning of Period $10,461 $9,905 $9 ,519 $9,000 $7,910

Provision for
Loan Losses 734 1,095 742 971 1,500

Total Charge Offs (763) (559) (395) (567 ) (491)
Recoveries on Loans
Previously
Charged-Off 18 20 39 115 81

Net Loans Charged Off (745) (539) (356) (452) (410)

Allowance for
Loan Losses, at
Period End $10,450 $10,461 $9,905 $9,519 $9,000

Allowance for Loan Losses
at Period End to:
Average Net Loans 1.28% 61.14

About AmSouth

AmSouth is a regional bank holding company with $50 billion in
assets, more than 685 branch banking offices and 1,240 ATMs.

mmr rebates

The primary contributors to the increase were a net gain of $433,000 in
income from Trust Services and from KNBT Securities, our wholly owned
securities brokerage subsidiary, combined with an aggregate increase of
$440,000 in gains on securities sold that more than offset the decline in
deposit service charges of $206,000.2 million to $368.knbt.16 $ 0.16 $13.22% 0.94 % 222.68%
Efficiency Ratio 62. Now,
with the Spectrum Card, they will no longer have to wait for their
checks to arrive by mail, where they could be lost or stolen. In addition, cardholders can get cash back at no charge when
they make purchases at the 1.2 million locations such as grocery
stores and other points of sale where Visa debit cards are accepted.amsouth.

budgeting mjk

During the quarter , KNBT
made solid progress on our stated key areas of growth. All
necessary regulatory approvals have been received and NEPF's stockholders
voted to approve the transaction at the special meeting held on April 14,
2005."
"By taking advantage of acquisition opportunities, we have been able to
strategically deploy capital in a manner that we believe will return value to
our shareholders .4 billion at March 31, 2005, an increase of
$361. These statements include, but are not
limited to, financial projections and estimates and their underlying
assumptions; statements regarding plans , objectives and expectations with
respect to future operations, products and services; and statements regarding
future performance.17 $ 0.44

KNBT Bancorp , Inc.20% 0.05% 3.32% 63.22% 19.34%
Tangible Equity to
Total Assets 13.

State Turns to AmSouth to Make Child-Support More Convenient

smartmoney homeworks

(Nasdaq: KNBT), the holding company for Keystone Nazareth Bank + Trust Company
(the "Bank"), today reported net income of $4 . Fainor, President and Chief Executive Officer of KNBT, stated,
"I'm pleased by the Company's first quarter results.
For the period ended March 31, 2005, the net loan portfolio increased
11 . Such statements are subject to certain risks and
uncertainties, many of which are difficult to predict and generally beyond the
control of KNBT and its management, that could cause actual results to differ
materially from those expressed in, or implied or projected by, the forward-
looking information and statements.

dbase smartmoney

, KNBT Bancorp, Inc. During the first quarter
of 2005, KNBT repurchased 314,000 shares of common stock at an average cost of
$16.1 million shares remain to be purchased
under the stock buyback program approved by the Board of Directors in October
2004.97%

Non-Performing 257.16%

KNBT Bancorp, Inc.14
Net Income Per Share- Basic $0.

osx recurring

We anticipate that this transaction will enhance fee
income by approximately $5.5 million in the first quarter of 2004. ("Caruso") and the pending acquisition of Northeast
Pennsylvania Financial Corp.15 $ 0.17 $ 0.48% 0.
(unaudited)

March 31, Dec 31, Sept 30,
Balances (Period End) 2005 2004 2004
(dollars in thousands)

Assets $2,418,580 $2,415,103 $2,292,382
Earning Assets 2,215,130 2,209,612 2,087,615
Investment Securities 1,098,243 1,150,151 1,076 ,178
Loans 1,020,592 1,002,741 996,814
Loans Held for Sale 954 718 1,980
Other Earning Assets 95,341 56,002 12,643

Total Deposits 1,344 ,380 1,323,053 1,286,824
Non-Interest Bearing Deposits 129,354 128,498 116,590
Interest Bearing Checking 180,255 180,811 168,348
Money Market 254,154 241,826 239,815
Savings 211,231 210,258 214,315
Certificates of Deposit 468 ,101 461,294 446,292
IRA and Koegh 101,285 100,366 101,464

Other Borrowings 24,496 22,643 20,501
Federal Home Loan Bank 646,852 660,674 568,113
Shareholders' Equity 368,650 377,354 385,743

KNBT Bancorp , Inc.18%
Stockholders' Equity
to Total Assets 15.
"AmSouth is pleased to partner with the state of Alabama to
provide child support check recipients with this new service. With 32 ,000 AllPoint network ATMs
nationwide -- the country's largest surcharge-free ATM network -- as
well as AmSouth's 1,240 ATMs across the Southeast, Spectrum
cardholders will have easy access to ATMs where they can withdraw
cash.

balances checkbook

LEHIGH VALLEY, Pa.
KNBT presents its net interest margin on a tax equivalent basis because
management believes that presentation of its net interest margin on a tax-
equivalent basis provides information that is useful for a proper
understanding of the operating results of KNBT's business. These disclosures
should neither be viewed as a substitute for operating results determined in
accordance with GAAP nor are they necessarily comparable to non -GAAP
performance measures which may be presented by other companies.

Balance Sheet Overview
KNBT's total assets were $2.9% or $50. Fainor, President and Chief Executive Officer, KNBT Bancorp , Inc.sec.68% 4.81% 0.24% 15.----When the State of
Alabama wanted to make paying court -ordered child support less
expensive, more efficient, and easier for parents, it turned to
AmSouth Bank (NYSE:ASO) and its Spectrum Card, a Visa-branded payroll
card that works like a debit card.

The state loads payments onto the card and cardholders will be
able to use their cards anywhere Visa debit cards are accepted.