NBT Bancorp Inc. Announces Second Quarter Earnings of $0.34 per Share; Declares Cash Dividend

• Press Release
• Source: NBT Bancorp Inc.
• On 6:02 pm EDT, Monday July 27, 2009

NORWICH, NY--(Marketwire - 07/27/09) - NBT Bancorp Inc. (NBT) (NASDAQ:NBTB - News) reported today net income per diluted share for the three months ended June 30, 2009 of $0.34 per share, as compared with $0.45 per share for the three months ended June 30, 2008. Annualized return on average assets and return on average equity were 0.85% and 9.63%, respectively, for the three months ended June 30, 2009, compared with 1.12% and 14.49%, respectively, for the three months ended June 30, 2008. Net income for the three months ended June 30, 2009 was $11.6 million, down $3.1 million, or 21.1%, from $14.7 million for the second quarter last year. The decrease in net income for the three months ended June 30, 2009 compared with the three months ended June 30, 2008 was primarily the result of an increase in FDIC expenses, including a special assessment, and an increase in the provision for loan and lease losses.

Net income per diluted share for the six months ended June 30, 2009 was $0.74 per share, as compared with $0.88 per share for the six months ended June 30, 2008. Annualized return on average assets and return on average equity were 0.92% and 10.82%, respectively, for the six months ended June 30, 2009, compared with 1.10% and 14.09%, respectively, for the six months ended June 30, 2008. Net income for the six months ended June 30, 2009 was $24.6 million, down $3.7 million, or 13.2%, from the six months ended June 30, 2008. The decrease in net income for the six months ended June 30, 2009 compared with the six months ended June 30, 2008 was primarily the result of an increase in FDIC expenses, including a special assessment, and an increase in the provision for loan and lease losses.

Like all FDIC insured financial institutions, the Company has been subjected to substantial increases in FDIC recurring premiums, as well as a special assessment levied by the FDIC in the second quarter of 2009, which had a significant impact on 2009 second quarter and year to date earnings. For the three months ended June 30, 2009, FDIC expenses increased $3.8 million over the three months ended June 30, 2008, including the special assessment of approximately $2.5 million. For the six months ended June 30, 2009, FDIC expenses increased $5.2 million over the six months ended June 30, 2008, including the aforementioned special assessment. Excluding the effect of the FDIC premiums increases and special assessment, net income per diluted share would have been $0.41 per diluted share for the three months ended June 30, 2009 and $0.84 per diluted share for the six months ended June 30, 2009.

NBT President and CEO Martin Dietrich said: "I am pleased with our results for the first six months of the year, which are consistent with our all time record earnings in 2008, but for increased FDIC and pension expenses. In addition, asset quality indicators continue to hold up well relative to national and local trends, despite an increase in nonaccrual loans this quarter. We have continued to take advantage of our strong earnings momentum to fund new initiatives, such as expansion into Vermont, technology investments and branch upgrades. Recently, NBT received national recognition applauding our performance when we were ranked 19th on US Banker's 2009 Top 100 Mid-Tier Banks and Thrifts list and ranked 39th on the Bank Director's 2008 Bank Performance Scorecard of 150 national banks."

Loan and Lease Quality and Provision for Loan and Lease Losses

Nonperforming loans at June 30, 2009 were $40.2 million or 1.10% of total loans and leases compared with $26.5 million or 0.73% at December 31, 2008. The increase in nonperforming loans at June 30, 2009 was primarily the result of an increase in nonaccrual loans, due in large part to four commercial credits and two agricultural credits which were identified as potential problem loans in prior quarters. The four commercial credits consisted of a community center, a motel, a real estate holding company and a machine and tool manufacturer. The allowance for loan and lease losses totaled $62.7 million at June 30, 2009, as compared with $58.6 million at December 31, 2008. This increase was due primarily to an increase in specific reserves on two of the aforementioned commercial credits and both of the aforementioned agricultural credits. The Company's allowance for loan and lease losses was 1.72% of loans and leases at June 30, 2009, compared with 1.60% at December 31, 2008. Past due loans as a percentage of total loans decreased to 0.81% at June 30, 2009, as compared with 0.91% at December 31, 2008.

The Company recorded a provision for loan and lease losses of $9.2 million during the second quarter of 2009 compared with $5.8 million during the second quarter of 2008. The increase in the provision for loan and lease losses for the three months ended June 30, 2009 was due primarily to an increase in specific reserves on certain impaired loans. Net charge-offs totaled $5.8 million for the three month period ending June 30, 2009, down from $7.8 million for the three months ending June 30, 2008, due primarily to a charge-off related to one large commercial loan during the second quarter of 2008. Net charge-offs to average loans and leases for the three months ended June 30, 2009 were 0.63%, compared with 0.88% for the three months ended June 30, 2008.

The Company recorded a provision for loan and lease losses of $15.7 million during the six months ended June 30, 2009 compared with $12.3 million during the six months ended June 30, 2008. The increase in the provision for loan and lease losses for the six months ended June 30, 2009 was due primarily to an increase in specific reserves on certain impaired loans. Net charge-offs totaled $11.5 million for the six month period ending June 30, 2009, down from $12.0 million for the six months ending June 30, 2008. Net charge-offs to average loans and leases for the six months ended June 30, 2009 were 0.63%, compared with 0.68% for the six months ended June 30, 2008.

Net Interest Income

Net interest income was up 4.4% to $48.1 million for the three months ended June 30, 2009 compared with $46.0 million for the three months ended June 30, 2008. The Company's fully taxable equivalent (FTE) net interest margin was 3.95% for the three months ended June 30, 2009, as compared with 3.94% for the three months ended June 30, 2008. In addition, the Company experienced a 3.5% growth in average earning assets for the three months ending June 30, 2009 as compared with the three months ending June 30, 2008, due primarily to increases in average loans and leases and average short-term interest bearing accounts. As a result of our excess liquidity, our Federal Funds sold position had a negative impact of 6 bp on our net interest margin for the three months ended June 30, 2009.

Although the yield on interest earning assets decreased 60 basis points, the yield on interest bearing liabilities declined 69 basis points, which contributed to the increase in the net interest margin for the three months ended June 30, 2009 compared to the same period for 2008. The yield on time deposits was 2.72% for the three months ended June 30, 2009, as compared with 3.72% for the three months ended June 30, 2008. The yield on money market deposit accounts was 1.33% for the three months ended June 30, 2009, as compared with 1.65% for the three months ended June 30, 2008. The yield on short term borrowings declined 172 basis points for the three months ended June 30, 2009 as compared to the three months ended June 30, 2008 as a result of the 175 basis point drop in the Fed Funds Target Rate from 2.00% at June 30, 2008 to 0.25% at June 30, 2009.

Net interest income was up 6.8% to $96.2 million for the six months ended June 30, 2009 compared with $90.1 million for the six months ended June 30, 2008. The Company's fully taxable equivalent (FTE) net interest margin was 4.02% for the six months ended June 30, 2009, as compared with 3.89% for the six months ended June 30, 2008. In addition, the Company experienced a 3.3% growth in average earning assets for the six months ending June 30, 2009 as compared with the six months ending June 30, 2008, due primarily to an increase in average loans and leases. As a result of our excess liquidity, our Federal Funds sold position had a negative impact of 11 bp on our net interest margin for the six months ended June 30, 2009.

Although the yield on interest earning assets decreased 58 basis points, the yield on interest bearing liabilities declined 83 basis points, which contributed to the increase in the net interest margin for the six months ended June 30, 2009 compared to the same period for 2008. The yield on time deposits was 2.84% for the six months ended June 30, 2009, as compared with 3.95% for the six months ended June 30, 2008. The yield on money market deposit accounts was 1.34% for the six months ended June 30, 2009, as compared with 2.01% for the six months ended June 30, 2008. The yield on short term borrowings declined 224 basis points for the six months ended June 30, 2009 as compared to the six months ended June 30, 2008 as a result of the aforementioned drop in the Fed Funds Target Rate.

Noninterest Income

Noninterest income for the three months ended June 30, 2009 was $19.8 million, up $3.4 million or 20.9% from $16.4 million for the same period in 2008. The increase in noninterest income was due primarily to an increase in insurance and broker/dealer revenue, which increased approximately $2.9 million for the three month period ended June 30, 2009 as compared with the three month period ended June 30, 2008. This increase was due primarily to revenue generated by Mang Insurance Agency, LLC, which was acquired during the third quarter of 2008. In addition, retirement plan administration fees increased approximately $0.5 million for the three month period ended June 30, 2009 as compared with the three month period ended June 30, 2008 as a result of organic growth from new business. These increases were partially offset by a decrease in trust administration income of approximately $0.3 million for the three months ended June 30, 2009 as compared with the three months ended June 30, 2008 due primarily to a decline in the market value of trust assets under administration.

Noninterest income for the six months ended June 30, 2009 was $39.4 million, up $6.9 million or 21.3% from $32.5 million for the same period in 2008. The increase in noninterest income was due primarily to an increase in insurance and broker/dealer revenue, which increased approximately $7.1 million for the six month period ended June 30, 2009 as compared with the six month period ended June 30, 2008. This increase was due primarily to revenue generated by Mang Insurance Agency, LLC as previously mentioned. In addition, retirement plan administration fees increased approximately $0.6 million for the six month period ended June 30, 2009 as compared with the six month period ended June 30, 2008 as a result of organic growth from new business. These increases were partially offset by a decrease in trust administration income of approximately $0.7 million for the six months ended June 30, 2009 as compared with the six months ended June 30, 2008 due primarily to a decline in the market value of trust assets under administration.

Noninterest Expense and Income Tax Expense

Noninterest expense for the three months ended June 30, 2009 was $41.9 million, up from $35.4 million for the same period in 2008. FDIC expenses increased approximately $3.8 million for the three months ended June 30, 2009, compared with the same period in 2008. This increase was due in large part to the special assessment imposed by the FDIC totaling approximately $2.5 million during the second quarter of 2009. In addition, recurring FDIC premiums increased to $1.5 million for the three months ended June 30, 2009 as compared with $0.2 million for the same period last year. Salaries and employee benefits increased $3.0 million, or 18.0%, for the three months ended June 30, 2009 compared with the same period in 2008. This increase was due primarily to increases in full-time-equivalent employees during 2009, largely due to the aforementioned acquisition and new branch activity. In addition, the Company experienced increases of approximately $0.7 million and $0.4 million in pension and medical expenses, respectively, for the three months ended June 30, 2009 as compared with the same period in 2008. Amortization of intangible assets was $0.8 million for the three months ended June 30, 2009, up from $0.4 million for same period in 2008 due to the aforementioned acquisition. These increases were partially offset by a decrease in other operating expenses. For the three month period ended June 30, 2009, other operating expenses totaled $3.7 million, down $1.3 million or 25.8%, from $5.0 million for the three months ended June 30, 2008. This decrease resulted primarily from the settlement of a lease residual insurance policy for $1.2 million during the second quarter of 2009. Income tax expense for the three month period ended June 30, 2009 was $5.2 million, down from $6.5 million for the same period in 2008. The effective rates were 31.0% and 30.9% for the three month periods ended June 30, 2009 and 2008, respectively.

Noninterest expense for the six months ended June 30, 2009 was $84.2 million, up from $69.5 million for the same period in 2008. FDIC expenses increased approximately $5.2 million for the six months ended June 30, 2009, compared with the same period in 2008. This increase was due in large part to the special assessment imposed by the FDIC totaling approximately $2.5 million during the second quarter of 2009. In addition, recurring FDIC premiums increased to $3.1 million for the six months ended June 30, 2009 as compared with $0.4 million for the same period last year. Salaries and employee benefits increased $7.7 million, or 22.9%, for the six months ended June 30, 2009 compared with the same period in 2008. This increase was due primarily to increases in full-time-equivalent employees during 2009, largely due to the aforementioned acquisition and new branch activity. In addition, the Company experienced increases of approximately $1.5 million and $0.9 million in pension and medical expenses, respectively, for the six months ended June 30, 2009 as compared with the same period in 2008. Amortization of intangible assets was $1.6 million for the six months ended June 30, 2009, up from $0.8 million for same period in 2008 due to the aforementioned acquisition. Income tax expense for the six month period ended June 30, 2009 was $11.1 million, down from $12.5 million for the same period in 2008. The effective rates were 31.0% and 30.5% for the six month periods ended June 30, 2009 and 2008, respectively.

Balance Sheet

Total assets were $5.4 billion at June 30, 2009, up $81.0 million or 1.5% from $5.3 billion at December 31, 2008. Loans and leases were $3.6 billion at June 30, 2009 and December 31, 2008. Total deposits were $4.1 billion at June 30, 2009, up $134.8 million or 3.4% from December 31, 2008. The increase from December 31, 2008 was due in large part to a $216.2 million, or 11.5%, increase in NOW, savings and money market accounts, partially offset by a $124.2 million decrease in time deposits. Stockholders' equity was $482.1 million, representing a total equity-to-total assets ratio of 8.90% at June 30, 2009, compared with $431.8 million or a total equity-to-total assets ratio of 8.09% at December 31, 2008.

Stock Repurchase Program

The Company made no purchases of its common stock securities during the six months ended June 30, 2009. At June 30, 2009, there were 1,000,000 shares available for repurchase under a previously announced stock repurchase plan. This plan was authorized on January 28, 2008 in the amount of 1,000,000 shares and expires on December 31, 2009.

Dividend Declared

The NBT Board of Directors declared a 2009 third-quarter cash dividend of $0.20 per share at a meeting held today. The dividend will be paid on September 15, 2009, to shareholders of record as of September 1, 2009.

Corporate Overview

NBT Bancorp Inc. is a financial holding company headquartered in Norwich, NY, with total assets of $5.4 billion at June 30, 2009. The company primarily operates through NBT Bank, N.A., a full-service community bank with two divisions, and through two financial services companies. NBT Bank, N.A. has 123 locations, including 84 NBT Bank offices in upstate New York, 38 Pennstar Bank offices in northeastern Pennsylvania, and one office in Burlington, Vermont. EPIC Advisors, Inc., based in Rochester, NY, is a full-service 401(k) plan recordkeeping firm. Mang Insurance Agency, LLC, based in Binghamton, NY, is a full-service insurance agency. More information about NBT and its divisions can be found on the Internet at: www.nbtbancorp.com, www.nbtbank.com, www.pennstarbank.com, www.epic1st.com and www.manginsurance.com.

Forward-Looking Statements

This news release contains forward-looking statements. These forward-looking statements involve risks and uncertainties and are based on the beliefs and assumptions of the management of NBT Bancorp and its subsidiaries and on the information available to management at the time that these statements were made. There are a number of factors, many of which are beyond NBT's control, that could cause actual conditions, events or results to differ significantly from those described in the forward-looking statements. Factors that may cause actual results to differ materially from those contemplated by such forward-looking statements include, among others, the following possibilities: (1) competitive pressures among depository and other financial institutions may increase significantly; (2) revenues may be lower than expected; (3) changes in the interest rate environment may reduce interest margins; (4) general economic conditions, either nationally or regionally, may be less favorable than expected, resulting in, among other things, a deterioration in credit quality and/or a reduced demand for credit; (5) legislative or regulatory changes, including changes in accounting standards and tax laws, may adversely affect the businesses in which NBT is engaged; (6) competitors may have greater financial resources and develop products that enable such competitors to compete more successfully than NBT; and (7) adverse changes may occur in the securities markets or with respect to inflation. Forward-looking statements speak only as of the date they are made. Except as required by law, NBT does not undertake to update forward-looking statements to reflect subsequent circumstances or events.

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                           NBT Bancorp Inc. and Subsidiaries
                             SELECTED FINANCIAL HIGHLIGHTS
                                     (unaudited)


                                                     Net         Percent
                        2009          2008         Change        Change
                    ------------  ------------  ------------  ------------
                      (dollars in thousands,
                       except per share data)

Three Months Ended
 June 30,
Net Income          $     11,560  $     14,657  $     (3,097)          -21%
Diluted Earnings
 Per Share          $       0.34  $       0.45  $      (0.11)          -24%
Weighted Average
 Diluted Common
 Shares Outstanding   34,314,291    32,241,642     2,072,649             6%
Return on Average
 Assets (1)                 0.85%         1.12%        -0.27%          -24%
Return on Average
 Equity (1)                 9.63%        14.49%        -4.86%          -34%
Net Interest Margin
 (2)                        3.95%         3.94%         0.01%            0%
                    ============  ============  ============  ============

Six Months Ended
 June 30,
Net Income          $     24,632  $     28,373  $     (3,741)          -13%
Diluted Earnings
 Per Share          $       0.74  $       0.88  $      (0.14)          -16%
Weighted Average
 Diluted Common
 Shares Outstanding   33,483,222    32,246,644     1,236,578             4%
Return on Average
 Assets                     0.92%         1.10%        -0.18%          -16%
Return on Average
 Equity                    10.82%        14.09%        -3.27%          -23%
Net Interest Margin
 (2)                        4.02%         3.89%         0.13%            3%
                    ============  ============  ============  ============


Asset Quality          June 30,    December 31,
                        2009          2008
                    ------------  ------------
Nonaccrual Loans    $     37,646  $     24,191
90 Days Past Due
 and Still Accruing $      2,529  $      2,305
Total Nonperforming
 Loans              $     40,175  $     26,496
Other Real Estate
 Owned              $      1,688  $        665
Total Nonperforming
 Assets             $     41,863  $     27,161
Past Due Loans      $     29,545  $     33,098
Allowance for Loan
 and Lease Losses   $     62,734  $     58,564
Year-to-Date (YTD)
 Net Charge-Offs    $     11,480  $     22,800
Allowance for Loan
 and Lease Losses
 to Total Loans and
 Leases                     1.72%         1.60%
Total Nonperforming
 Loans to Total
 Loans and Leases           1.10%         0.73%
Total Nonperforming
 Assets to Total
 Assets                     0.77%         0.51%
Past Due Loans to
 Total Loans and
 Leases                     0.81%         0.91%
Allowance for Loan
 and Lease Losses
 to Total
 Nonperforming
 Loans                    156.15%       221.03%
Net Charge-Offs to
 YTD Average Loans
 and Leases                 0.63%         0.64%
                    ============  ============  ============  ============

Capital
Equity to Assets            8.90%         8.09%
Book Value Per
 Share              $      14.06  $      13.24
Tangible Book Value
 Per Share          $      10.06  $       9.01
Tier 1 Leverage
 Ratio                      8.08%         7.17%
Tier 1 Capital
 Ratio                     11.00%         9.75%
Total Risk-Based
 Capital Ratio             12.26%        11.00%
                    ============  ============  ============  ============

                    ------------  ------------  ------------
Quarterly Common
 Stock Price            2009          2008          2007
Quarter End         High    Low   High    Low   High    Low
                    ----    ---   ----    ---   ----    ---
March 31          $28.37 $15.42 $23.65 $17.95 $25.81 $21.73
June 30           $25.22 $20.49  25.00  20.33  23.45  21.80
September 30                     36.47  19.05  23.80  17.10
December 31                      30.83  21.71  25.00  20.58
                    ------------  ------------  ------------

(1)  Annualized
(2)  Calculated on a FTE basis



                           NBT Bancorp Inc. and Subsidiaries
                             SELECTED FINANCIAL HIGHLIGHTS
                                     (unaudited)

                              June 30,    December 31,      Net     Percent
                                2009          2008        Change    Change
                           ------------- ------------- ------------  -----
                             (dollars in thousands,
                              except per share data)
Balance Sheet
Loans and Leases           $   3,649,546 $   3,651,911 $     (2,365)     0%
Earning Assets             $   5,006,639 $   4,933,099 $     73,540      1%
Total Assets               $   5,417,057 $   5,336,088 $     80,969      2%
Deposits                   $   4,058,071 $   3,923,258 $    134,813      3%
Stockholders' Equity       $     482,140 $     431,845 $     50,295     12%
                           ============= ============= ============  =====

                                2009          2008
                           ------------- -------------
                             (dollars in thousands,
Average Balances              except per share data)
Three Months Ended June 30,
Loans and Leases           $   3,653,166 $   3,561,632 $     91,534      3%
Securities Available For
 Sale
(excluding unrealized
 gains or losses)          $   1,085,147 $   1,101,362 $    (16,215)    -1%
Securities Held To
 Maturity                  $     138,180 $     157,822 $    (19,642)   -12%
Trading Securities         $       1,854 $       2,389         (535)   -22%
Regulatory Equity
 Investment                $      38,221 $      41,274 $     (3,053)    -7%
Short-Term Interest
 Bearing Accounts          $     126,318 $       7,100 $    119,218   1679%
Total Earning Assets       $   5,041,032 $   4,869,190 $    171,842      4%
Total Assets               $   5,448,440 $   5,241,686 $    206,754      4%
Interest Bearing Deposits  $   3,381,288 $   3,196,393 $    184,895      6%
Non-Interest Bearing
 Deposits                  $     707,022 $     668,299 $     38,723      6%
Short-Term Borrowings      $     120,272 $     257,376 $   (137,104)   -53%
Long-Term Borrowings       $     684,495 $     643,758 $     40,737      6%
Total Interest Bearing
 Liabilities               $   4,186,055 $   4,097,527 $     88,528      2%
Stockholders' Equity       $     481,308 $     406,709 $     74,599     18%
                           ============= ============= ============  =====

Average Balances
Six Months Ended June 30,
Loans and Leases           $   3,655,909 $   3,513,996 $    141,913      4%
Securities Available For
 Sale (excluding unrealized
 gains or losses)          $   1,087,317 $   1,110,809 $    (23,492)    -2%
Securities Held To
 Maturity                  $     138,439 $     155,341 $    (16,902)   -11%
Trading Securities         $       1,644 $       2,450 $       (806)   -33%
Regulatory Equity
 Investment                $      38,535 $      39,391 $       (856)    -2%
Short-Term Interest
 Bearing Accounts          $      64,843 $       7,750 $     57,093    737%
Total Earning Assets       $   4,985,043 $   4,827,287 $    157,756      3%
Total Assets               $   5,400,226 $   5,203,015 $    197,211      4%
Interest Bearing Deposits  $   3,347,130 $   3,214,697 $    132,433      4%
Non-Interest Bearing
 Deposits                  $     694,001 $     663,858 $     30,143      5%
Short-Term Borrowings      $     134,282 $     280,476 $   (146,194)   -52%
Long-Term Borrowings       $     695,517 $     572,026 $    123,491     22%
Total Interest Bearing
 Liabilities               $   4,176,929 $   4,067,199 $    109,730      3%
Stockholders' Equity       $     459,120 $     404,937 $     54,183     13%
                           ============= ============= ============  =====




NBT Bancorp Inc. and Subsidiaries                June 30,     December 31,
Consolidated Balance Sheets (unaudited)            2009           2008
(in thousands)                                 -------------  -------------

ASSETS
Cash and due from banks                        $     102,986  $     107,409
Short term interest bearing accounts                  88,533          2,987
Securities available for sale, at fair value       1,114,330      1,119,665
Securities held to maturity (fair value of
 $142,286 and $141,308 at June 30, 2009 and
 December 31, 2008, respectively)                    140,952        140,209
Trading securities                                     2,052          1,407
Federal Reserve and Federal Home Loan Bank
 stock                                                38,229         39,045
Loans and leases                                   3,649,546      3,651,911
Less allowance for loan and lease losses              62,734         58,564
                                               =============  =============
    Net loans and leases                           3,586,812      3,593,347
Premises and equipment, net                           64,797         65,241
Goodwill                                             114,942        114,838
Intangible assets, net                                22,197         23,367
Bank owned life insurance                             72,764         72,276
Other assets                                          68,463         56,297
                                               -------------  -------------
TOTAL ASSETS                                   $   5,417,057  $   5,336,088
                                               =============  =============

LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits:
  Demand (noninterest bearing)                 $     728,340  $     685,495
  Savings, NOW, and money market                   2,101,703      1,885,551
  Time                                             1,228,028      1,352,212
                                               -------------  -------------
    Total deposits                                 4,058,071      3,923,258
Short-term borrowings                                120,104        206,492
Long-term debt                                       604,708        632,209
Trust preferred debentures                            75,422         75,422
Other liabilities                                     76,612         66,862
                                               -------------  -------------
    Total liabilities                              4,934,917      4,904,243


Total stockholders' equity                           482,140        431,845
                                               =============  =============

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY     $   5,417,057  $   5,336,088
                                               =============  =============



NBT Bancorp Inc. and Subsidiaries    Three months ended   Six months ended
Consolidated Statements of Income         June 30,            June 30,
 (unaudited)                           2009      2008      2009      2008
                                    --------- --------- --------- ---------
(in thousands, except per share
 data)
Interest, fee and dividend income:
Loans and leases                    $  54,886 $  57,220 $ 110,297 $ 115,837
Securities available for sale          11,671    13,417    24,046    27,163
Securities held to maturity             1,209     1,478     2,443     2,992
Other                                     606       739       967     1,514
                                    --------- --------- --------- ---------
  Total interest, fee and dividend
   income                              68,372    72,854   137,753   147,506
                                    --------- --------- --------- ---------
Interest expense:
Deposits                               13,123    18,712    26,962    41,410
Short-term borrowings                     124     1,362       271     3,702
Long-term debt                          5,998     5,629    12,195     9,931
Trust preferred debentures              1,076     1,146     2,162     2,393
                                    --------- --------- --------- ---------
  Total interest expense               20,321    26,849    41,590    57,436
                                    --------- --------- --------- ---------
Net interest income                    48,051    46,005    96,163    90,070
Provision for loan and lease losses     9,199     5,803    15,650    12,281
                                    --------- --------- --------- ---------
Net interest income after provision
 for loan and lease losses             38,852    40,202    80,513    77,789
                                    --------- --------- --------- ---------
Noninterest income:
Trust                                   1,761     2,099     3,170     3,873
Service charges on deposit accounts     6,950     6,938    13,247    13,463
ATM and debit card fees                 2,368     2,225     4,550     4,322
Insurance and broker/dealer revenue     4,220     1,366     9,558     2,473
Net securities gains                       17        18        17        33
Bank owned life insurance income          670       708     1,542     1,515
Retirement plan administration fees     2,194     1,671     3,935     3,379
Other                                   1,665     1,394     3,416     3,456
                                    --------- --------- --------- ---------
  Total noninterest income             19,845    16,419    39,435    32,514
                                    --------- --------- --------- ---------
Noninterest expense:
Salaries and employee benefits         19,947    16,906    41,374    33,676
Office supplies and postage             1,429     1,331     2,959     2,670
Occupancy                               3,610     3,427     7,775     7,037
Equipment                               2,005     1,862     4,027     3,687
Professional fees and outside
 services                               2,407     2,521     5,129     5,620
Data processing and communications      3,324     3,115     6,619     6,285
Amortization of intangible assets         825       378     1,638       769
Loan collection and other real
 estate owned                             674       730     1,422     1,297
FDIC expenses                           4,032       184     5,561       372
Other operating                         3,686     4,969     7,740     8,044
                                    --------- --------- --------- ---------
  Total noninterest expense            41,939    35,423    84,244    69,457
                                    --------- --------- --------- ---------
Income before income taxes             16,758    21,198    35,704    40,846
Income taxes                            5,198     6,541    11,072    12,473
                                    --------- --------- --------- ---------
   Net income                       $  11,560 $  14,657 $  24,632 $  28,373
                                    --------- --------- --------- ---------
Earnings Per Share:
     Basic                          $    0.34 $    0.46 $    0.74 $    0.89
     Diluted                        $    0.34 $    0.45 $    0.74 $    0.88
                                    ========= ========= ========= =========




NBT Bancorp Inc. and Subsidiaries
Quarterly Consolidated
 Statements of Income        2Q        1Q        4Q        3Q        2Q
 (unaudited)                2009      2009      2008      2008      2008
                          --------- --------- --------  --------- ---------
(in thousands, except per
 share data)
Interest, fee and
 dividend income:
Loans and leases          $  54,886 $  55,411 $ 58,164  $  58,154 $  57,220
Securities available for
 sale                        11,671    12,375   13,434     13,451    13,417
Securities held to
 maturity                     1,209     1,234    1,253      1,343     1,478
Other                           606       361      436        673       739
                          --------- --------- --------  --------- ---------
  Total interest, fee and
   dividend income           68,372    69,381   73,287     73,621    72,854
                          --------- --------- --------  --------- ---------
Interest expense:
Deposits                     13,123    13,839   16,371     18,351    18,712
Short-term borrowings           124       147      382        763     1,362
Long-term debt                5,998     6,197    6,401      6,310     5,629
Trust preferred
 debentures                   1,076     1,086    1,200      1,154     1,146
                          --------- --------- --------  --------- ---------
  Total interest expense     20,321    21,269   24,354     26,578    26,849
                          --------- --------- --------  --------- ---------
Net interest income          48,051    48,112   48,933     47,043    46,005
Provision for loan and
 lease losses                 9,199     6,451    7,721      7,179     5,803
                          --------- --------- --------  --------- ---------
Net interest income after
 provision for loan and
 lease losses                38,852    41,661   41,212     39,864    40,202
                          --------- --------- --------  --------- ---------
Noninterest income:
Trust                         1,761     1,409    1,685      1,720     2,099
Service charges on
 deposit accounts             6,950     6,297    7,266      7,414     6,938
ATM and debit card fees       2,368     2,182    2,176      2,334     2,225
Insurance and
 broker/dealer revenue        4,220     5,338    3,915      2,338     1,366
Net securities gains
 (losses)                        17         -       (8)     1,510        18
Bank owned life insurance
 income                         670       872    2,484        924       708
Retirement plan
 administration fees          2,194     1,741    1,468      1,461     1,671
Other                         1,665     1,751    1,244      1,261     1,394
                          --------- --------- --------  --------- ---------
  Total noninterest
   income                    19,845    19,590   20,230     18,962    16,419
                          --------- --------- --------  --------- ---------
Noninterest expense:
Salaries and employee
 benefits                    19,947    21,427   20,633     16,850    16,906
Office supplies and
 postage                      1,429     1,530    1,354      1,322     1,331
Occupancy                     3,610     4,165    3,385      3,359     3,427
Equipment                     2,005     2,022    1,944      1,908     1,862
Professional fees and
 outside services             2,407     2,722    2,651      2,205     2,521
Data processing and
 communications               3,324     3,295    3,254      3,155     3,115
Amortization of
 intangible assets              825       813      874        462       378
Loan collection and other
 real estate owned              674       748      692        505       730
Impairment on lease
 residual assets                  -         -        -      2,000         -
FDIC expenses                 4,032     1,529      827        614       184
Other operating               3,686     4,054    4,684      4,678     4,969
                          --------- --------- --------  --------- ---------
  Total noninterest
   expense                   41,939    42,305   40,298     37,058    35,423
                          --------- --------- --------  --------- ---------
Income before income
 taxes                       16,758    18,946   21,144     21,768    21,198
Income taxes                  5,198     5,874    6,247      6,685     6,541
                          --------- --------- --------  --------- ---------
   Net income             $  11,560 $  13,072 $ 14,897  $  15,083 $  14,657
                          ========= ========= ========  ========= =========
Earnings per share:
   Basic                  $    0.34 $    0.40 $   0.46  $    0.47 $    0.46
   Diluted                $    0.34 $    0.40 $   0.45  $    0.46 $    0.45
                          ========= ========= ========  ========= =========




NBT Bancorp Inc. and Subsidiaries
Average Balances and Net Interest Income


   Three months
    ended June 30,

                               2009                          2008
(dollars in       Average             Yield/    Average             Yield/
 thousands)       Balance    Interest Rates     Balance    Interest Rates
                ----------- --------- ------  ----------- --------- ------

ASSETS
Short-term
 interest
 bearing
 accounts       $   126,318 $      63   0.20% $     7,100 $      47   2.64%
Securities
 available for
 sale (1)
 (excluding
 unrealized
 gains or
 losses)          1,085,147    12,425   4.59%   1,101,362    14,110   5.15%
Securities held
 to maturity (1)    138,180     1,822   5.29%     157,822     2,233   5.69%
Trading
 securities           1,854         -   0.00%       2,389         -   5.69%
Investment in
 FRB and FHLB
 Banks               38,221       543   5.70%      41,274       692   6.74%
                ----------- ---------         ----------- ---------
Loans and
 leases (2)       3,653,166    55,094   6.05%   3,561,632    57,434   6.49%
                            ---------                     ---------
 Total interest
  earning
  assets          5,042,886    69,947   5.56%   4,871,579    74,516   6.16%
Other assets    $   405,554                       370,107
                -----------                   -----------
Total assets      5,448,440                     5,241,686
                -----------                   -----------

LIABILITIES AND STOCKHOLDERS' EQUITY
Money market
 deposit
 accounts       $ 1,017,217     3,381   1.33%     718,542     2,953   1.65%
NOW deposit
 accounts       $   581,534       848   0.58%     453,364       887   0.79%
Savings
 deposits       $   503,485       205   0.16%     472,039       504   0.43%
Time deposits   $ 1,279,052     8,690   2.72%   1,552,448    14,368   3.72%
                ----------- ---------         ----------- ---------
  Total
   interest
   bearing
   deposits       3,381,288    13,124   1.56%   3,196,393    18,712   2.35%
Short-term
 borrowings     $   120,272       124   0.41%     257,376     1,362   2.13%
Trust preferred
 debentures     $    75,422     1,076   5.72%      75,422     1,146   6.11%
Long-term debt  $   609,073     5,997   3.95%     568,336     5,629   3.98%
                ----------- ---------         ----------- ---------
  Total
   interest
   bearing
   liabilities    4,186,055    20,321   1.95%   4,097,527    26,849   2.64%
                            ---------                     ---------
Demand deposits $   707,022                       668,299
Other
 liabilities    $    74,055                        69,151
Stockholders'
 equity         $   481,308                       406,709
                -----------                   -----------
Total
 liabilities
 and
 stockholders'
 equity         $ 5,448,440                   $ 5,241,686
                -----------                   -----------
  Net interest
   income (FTE)                49,626                        47,667
                            ---------                     ---------
Interest rate
 spread                                 3.61%                         3.52%
Net interest
 margin                                 3.95%                         3.94%
Taxable
 equivalent
 adjustment                     1,575                         1,662
                            ---------                     ---------
Net interest
 income                     $  48,051                     $  46,005


(1) Securities are shown at average amortized cost

(2) For purposes of these computations, nonaccrual loans are included in
    the average loan balances outstanding



NBT Bancorp Inc. and Subsidiaries
Average Balances and Net Interest Income


   Six months
    ended June 30,

                                2009                         2008
(dollars in         Average             Yield/   Average             Yield/
 thousands)         Balance   Interest  Rates    Balance   Interest  Rates
                  ----------- --------- ------ ----------- --------- ------
ASSETS
Short-term
 interest bearing
 accounts         $    64,843 $      76  0.24% $     7,750 $     125  3.25%
Securities
 available for
 sale (1)
 (excluding
 unrealized gains
 or losses)         1,087,317    25,539  4.74%   1,110,809    28,530  5.16%
Securities held
 to maturity (1)      138,439     3,682  5.36%     155,341     4,518  5.85%
Trading
 securities             1,644         -  0.00%       2,450         -  5.85%
Investment in FRB
 and FHLB Banks        38,535       892  4.67%      39,391     1,389  7.09%
                  ----------- ---------        ----------- ---------
Loans and leases
 (2)                3,655,909   110,722  6.11%   3,513,996   116,264  6.65%
                              ---------                    ---------
 Total interest
  earning assets    4,986,687   140,911  5.70%   4,829,737   150,826  6.28%
Other assets          413,539                      373,278
                  -----------                  -----------
Total assets        5,400,226                    5,203,015
                  -----------                  -----------

LIABILITIES AND STOCKHOLDERS' EQUITY
Money market
 deposit accounts $   979,927     6,489  1.34%     714,252     7,132  2.01%
NOW deposit
 accounts             565,974     1,634  0.58%     450,608     1,882  0.84%
Savings deposits      490,829       415  0.17%     466,673     1,265  0.55%
Time deposits       1,310,400    18,424  2.84%   1,583,164    31,131  3.95%
                  ----------- ---------        ----------- ---------
  Total interest
   bearing
   deposits         3,347,130    26,962  1.62%   3,214,697    41,410  2.59%
Short-term
 borrowings           134,282       271  0.41%     280,476     3,702  2.65%
Trust preferred
 debentures            75,422     2,162  5.78%      75,422     2,393  6.38%
Long-term debt        620,095    12,195  3.97%     496,604     9,931  4.02%
                  ----------- ---------        ----------- ---------
  Total interest
   bearing
   liabilities      4,176,929    41,590  2.01%   4,067,199    57,436  2.84%
                              ---------                    ---------
Demand deposits       694,001                      663,858
Other liabilities      70,176                       67,021
Stockholders'
 equity               459,120                      404,937
                  -----------                  -----------
Total liabilities
 and stockholders'
 equity           $ 5,400,226                  $ 5,203,015
                  -----------                  -----------
  Net interest
   income (FTE)                  99,321                       93,390
                              ---------                    ---------
Interest rate
 spread                                  3.69%                        3.44%
Net interest
 margin                                  4.02%                        3.89%
Taxable
 equivalent
 adjustment                       3,158                        3,320
                              ---------                    ---------
Net interest
 income                          96,163                    $  90,070


(1) Securities are shown at average amortized cost

(2) For purposes of these computations, nonaccrual loans are included in
    the average loan balances outstanding




NBT Bancorp Inc. and Subsidiaries
Loans and Leases (Unaudited)
                                                               December 31,
(In thousands)                                   June 30, 2009     2008
                                                  -----------  -----------
Residential real estate mortgages                 $   676,994  $   722,723
Commercial                                            579,845      572,059
Commercial real estate mortgages                      670,334      669,720
Real estate construction and development               71,388       67,859
Agricultural and agricultural real estate
 mortgages                                            119,932      113,566
Consumer                                              847,257      795,123
Home equity                                           607,889      627,603
Lease financing                                        75,907       83,258
                                                  -----------  -----------
  Total loans and leases                          $ 3,649,546  $ 3,651,911
                                                  ===========  ===========

 
Contact:
Martin A. Dietrich
CEO
Michael J. Chewens
CFO
NBT Bancorp Inc.
52 South Broad Street
Norwich, NY 13815
607-337-6119