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NBT Bancorp Inc. Announces Annual Earnings of $57.4 Million and Second Highest Earnings in Company's History at $1.66; Declares Cash Dividend

01/24/11

NORWICH, NY, Jan 24, 2011 (MARKETWIRE via COMTEX) --

NBT Bancorp Inc. (NBT) (NASDAQ: NBTB) reported today net income per diluted share for the year ended December 31, 2010 was $1.66 per share, as compared with $1.53 per share for the year ended December 31, 2009. Return on average assets and return on average equity were 1.05% and 10.92%, respectively, for the year ended December 31, 2010, compared with 0.96% and 10.90%, respectively, for the year ended December 31, 2009. Net interest margin (on a fully taxable equivalent basis ("FTE")) was 4.15% for the year ended December 31, 2010, up 11 basis points ("bp") from 4.04% for the year ended December 31, 2009. Net income for the year ended December 31, 2010 was $57.4 million, up $5.4 million, or 10.4%, from the year ended December 31, 2009.

Net income per diluted share for the three months ended December 31, 2010 was $0.42, as compared with $0.40 per share for the three months ended December 31, 2009. Annualized return on average assets and return on average equity were 1.05% and 10.68%, respectively, for the three months ended December 31, 2010, compared with 1.00% and 10.92%, respectively, for the three months ended December 31, 2009. FTE net interest margin was 4.09% for the three months ended December 31, 2010, down 6 bp from 4.15% for the three months ended December 31, 2009. Net income for the three months ended December 31, 2010 was $14.4 million, up $0.6 million, or 4.6%, from $13.8 million for the fourth quarter last year.

Selected highlights for 2010 include:

--  Net income of $57.4 million approached our record high of
    $58.4 million in 2008.
--  Diluted earnings per share of $1.66 was the second highest in the
    history of the Company.
--  Asset quality indicators continued to stabilize. While nonperforming
    and potential problem loans are up slightly from 2009, past due loans
    and net charge-offs are both down from 2009.
--  Net interest margin of 4.15% in 2010 was the highest since 2003.
--  Noninterest income of $83.9 million in 2010 was an all-time high.
--  Continued strategic expansion in Queensbury and Schenectady, NY and
    Williston, VT during 2010.

NBT President and CEO Martin Dietrich said, "I am pleased to report that NBT achieved near record results in 2010, including the second highest net income and earnings per share levels in the history of the Company. While the economy and the financial services industry continued to face challenges in 2010, our team remained focused on aggressively managing our conservative banking strategy, as well as continued strategic investment and new market expansion to support future growth. Ultimately, our success flows directly from the quality of our team members and their commitment to serving the needs of our customers."

Loan and Lease Quality and Provision for Loan and Lease Losses

Past due loans as a percentage of total loans has improved to 0.86% at December 31, 2010, as compared with 0.89% at December 31, 2009. Nonperforming loans increased slightly to $44.8 million or 1.24% of total loans and leases at December 31, 2010 compared with $41.3 million or 1.13% at December 31, 2009, primarily due to one large commercial credit of approximately $2.7 million.

Net charge-offs for the year ended December 31, 2010 were $25.1 million compared to $25.4 million for the year ended December 31, 2009. Net charge-offs to average loans and leases for the year ended December 31, 2010 was 0.69%, a slight improvement from 0.70% for the year ended December 31, 2009. Net charge-offs for the three months ended December 31, 2010 were $7.3 million compared to $6.7 million for the same period in 2009. The annualized net charge-off ratio for the three months ended December 31, 2010 was 0.81% compared to 0.74% for the three months ended December 31, 2009. The primary driver for this increase was the charge-off of one large commercial credit of approximately $1.2 million which was previously fully provided for in the quarter ending September 30, 2010.

The allowance for loan and lease losses totaled $71.2 million at December 31, 2010 as compared with $66.6 million at December 31, 2009. The allowance for loan and lease losses as a percentage of loans and leases was 1.97% at December 31, 2010 as compared to 1.83% at December 31, 2009. The increase in the allowance for loan and lease losses is primarily due to an increase in the general allocation of the allowance for loan and lease losses relative to certain portfolios, including commercial, residential and home equity loans.

The Company recorded a provision for loan and lease losses of $29.8 million during the year ended December 31, 2010, as compared with $33.4 million during the year ended December 31, 2009. The Company recorded a provision for loan and lease losses of $6.7 million during the fourth quarter of 2010 compared with $8.6 million during the fourth quarter of 2009. The decrease in total provision is due to ongoing modeling of the required levels of reserves which considers historical charge-offs, loan growth and economic trends.

Net Interest Income

Net interest income was up 3.1% to $202.5 million for the year ended December 31, 2010 compared with $196.5 million for the year ended December 31, 2009. The Company's FTE net interest margin was 4.15% for the year ended December 31, 2010, as compared with 4.04% for the year ended December 31, 2009. The Company has chosen to maintain its excess liquidity position in 2010 as a result of the unfavorable interest rate environment. As a result of this excess liquidity, our Federal Funds sold position had a net negative impact of approximately 5 bp on our net interest margin for the year ended December 31, 2010 as compared to the year ended December 31, 2009.

The yield on interest earning assets decreased 37 bp for the year ended December 31, 2010 as compared with the year ended December 31, 2009, primarily due to decreases in the yields on securities available for sale and loans and leases. The yield on securities available for sale was 3.56% for the year ended December 31, 2010, as compared with 4.47% for the year ended December 31, 2009, while the yield on loans and leases was 5.90% for the year ended December 31, 2010, as compared with 6.07% for the year ended December 31, 2009. The rate on interest bearing liabilities declined 53 bp for the year ended December 31, 2010 as compared with the year ended December 31, 2009, primarily due to decreases in the rate on interest bearing deposits. The rate on time deposits was 2.06% for the year ended December 31, 2010, as compared with 2.64% for the year ended December 31, 2009. The rate on money market deposit accounts was 0.57% for the year ended December 31, 2010, as compared with 1.20% for the year ended December 31, 2009.

Net interest income was down slightly to $50.5 million for the three months ended December 31, 2010 compared with $51.6 million for the three months ended December 31, 2009. The Company's FTE net interest margin was 4.09% for the three months ended December 31, 2010, as compared with 4.15% for the three months ended December 31, 2009. As a result of the Company's excess liquidity, our Federal Funds sold position had a net negative impact of approximately 2 bp on our net interest margin for the three months ended December 31, 2010 as compared to the three months ended December 31, 2009.

The yield on interest earning assets decreased 40 bp for the three months ended December 31, 2010 as compared with the three months ended December 31, 2009, primarily due to decreases in the yields on securities available for sale and loans and leases. The yield on securities available for sale was 3.05% for the three months ended December 31, 2010, as compared with 4.07% for the three months ended December 31, 2009, while the yield on loans and leases was 5.85% for the three months ended December 31, 2010, as compared with 6.07% for the three months ended December 31, 2009. The rate on interest bearing liabilities declined 38 bp for the three months ended December 31, 2010 as compared with the three months ended December 31, 2009, primarily due to decreases in the rate on interest bearing deposits. The rate on time deposits was 1.94% for the three months ended December 31, 2010, as compared with 2.23% for the three months ended December 31, 2009. The rate on money market deposit accounts was 0.44% for the three months ended December 31, 2010, as compared with 0.88% for the three months ended December 31, 2009.

Noninterest Income

Noninterest income for the year ended December 31, 2010 was $83.9 million, up $3.8 million or 4.7% from $80.1 million for the year ended December 31, 2009. The increase in noninterest income was due primarily to an increase in net securities gains of approximately $3.1 million for the year ended December 31, 2010 as compared to the year ended December 31, 2009 due primarily to the sale of two equity positions and certain collateralized mortgage obligations ("CMO's") during 2010. In addition, the Company experienced an increase in retirement plan administration fees of approximately $1.3 million for the year ended December 31, 2010 as compared with the year ended December 31, 2009 as a result of organic growth and increased asset values from improved market conditions. Insurance and other financial services revenue increased approximately $1.1 million for the year ended December 31, 2010 as compared to the year ended December 31, 2009, due primarily to new business and expansion into new markets within our footprint. Trust revenue increased approximately $1.0 million for the year ended December 31, 2010 as compared to the year ended December 31, 2009 due primarily to an increase in fair market value of trust assets under administration. These increases were partially offset by a decrease in service charges on deposit accounts of approximately $3.1 million as a result of a decrease in overdraft activity due to changes in consumer behavior caused by economic conditions as well as the effects of implementing new regulations regarding overdraft fees.

Noninterest income for the three months ended December 31, 2010 was $22.2 million, up $2.4 million or 12.0% from $19.8 million for the same period in 2009. Net securities gains increased approximately $2.1 million for the three months ended December 31, 2010 as compared to the same period in 2009. This increase was due primarily to the sale of one equity position and certain CMO's in the three months ending December 31, 2010. Slight increases in ATM and debit card fees and insurance and other financial services revenue also contributed to the increase in noninterest income. These increases were offset by a decrease in service charges on deposit accounts of approximately $1.2 million, or 16.9%, for the three months ended December 31, 2010 as compared with the same period in 2009. The decrease in service charges was the result of the aforementioned decrease in overdraft activity due to changes in consumer behavior caused by economic conditions as well as the effects of implementing new regulations regarding overdraft fees.

Noninterest Expense and Income Tax Expense

Noninterest expense for the year ended December 31, 2010 was $178.3 million, up from $170.6 million, or 4.5%, for the year ended December 31, 2009. Salaries and employee benefits increased $8.2 million, or 9.5%, for the year ended December 31, 2010 compared with the year ended December 31, 2009. This increase was due primarily to increases in full-time-equivalent employees (primarily driven by market expansions), merit increases, employee benefits, and incentive compensation. In addition, the Company incurred debt prepayment penalties totaling $4.5 million to pay off long-term debt during the year ended December 31, 2010, as compared with prepayment penalties totaling $0.8 million for the year ended December 31, 2009. The debt prepayments in 2010 benefited interest expense by approximately $1.0 million in 2010, with future benefits expected in 2011 and 2012. These increases were partially offset by a decrease in FDIC expenses of approximately $2.3 million for the year ended December 31, 2010, as compared with the year ended December 31, 2009. This decrease resulted from the special assessment levied by the FDIC in the second quarter of 2009. In addition, professional fees and outside services decreased by $1.5 million, or 14.0%, for the year ended December 31, 2010 as compared with the year ended December 31, 2009. This decrease was due primarily to nonrecurring legal fees incurred during 2009 related to de novo branch activity as well as non-recurring systems consulting services incurred in 2009. Income tax expense for the year ended December 31, 2010 was $20.9 million, up slightly from $20.6 million for the year ended December 31, 2009. The effective tax rate was 26.7% for the year ended December 31, 2010, as compared to 28.4% for the year ended December 31, 2009. This decrease in the effective tax rate is primarily the result of an amendment to New York State tax law to conform to the bad debt treatment afforded under Federal law, which resulted in a reduction to tax expense of $0.6 million, as well as a favorable New York State audit settlement, which resulted in a reduction to tax expense of $0.6 million for the year ended December 31, 2010.

Noninterest expense for the three months ended December 31, 2010 was $47.3 million, up from $45.3 million, or 4.3%, for the same period in 2009. The Company incurred debt prepayment penalties totaling $3.3 million to pay off long-term debt during the fourth quarter of 2010, as compared to prepayment penalties totaling $0.8 million for the same period in 2009. Salaries and employee benefits, occupancy, and loan collection expenses were up slightly for the three months ended December 31, 2010 as compared to the same period in 2009. These increases were partially offset by a decrease in other operating expenses of approximately $1.0 million for the three month period ended December 31, 2010, as compared with the three months ended December 31, 2009. This decrease resulted primarily from a termination fee associated with the early termination of a vendor contract in the fourth quarter of 2009. Income tax expense for the three month period ended December 31, 2010 was $4.4 million, up from $3.7 million for the same period in 2009. The effective tax rate was 23.2% for the three months ended December 31, 2010, as compared to 21.3% for the same period in 2009.

Balance Sheet

Total assets were $5.3 billion at December 31, 2010, down $125.2 million or 2.3% from December 31, 2009. Loans and leases were $3.6 billion at December 31, 2010, down $35.4 million from December 31, 2009. Total deposits were $4.1 billion at December 31, 2010, up $41.3 million from December 31, 2009. Stockholders' equity was $533.6 million, representing a total equity-to-total assets ratio of 9.99% at December 31, 2010, compared with $505.1 million or a total equity-to-total assets ratio of 9.24% at December 31, 2009.

Stock Repurchase Program

Under previously disclosed stock repurchase plans, the Company purchased 23,810 shares of its common stock during the year ended December 31, 2010, for a total of $0.5 million at an average price of $20.03 per share. At December 31, 2010, there were 976,190 shares available for repurchase under this previously announced stock repurchase plan. This plan was authorized on October 26, 2009 in the amount of 1,000,000 shares and expires on December 31, 2011.

Dividend Declared

The NBT Board of Directors declared a 2011 first-quarter cash dividend of $0.20 per share at a meeting held today. The dividend will be paid on March 15, 2011 to shareholders of record as of March 1, 2011.

Corporate Overview

NBT Bancorp Inc. is a financial holding company headquartered in Norwich, NY, with total assets of $5.3 billion at December 31, 2010. 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 124 locations, including 85 NBT Bank offices in upstate New York, two NBT Bank offices in northwestern Vermont and 37 Pennstar Bank offices in northeastern Pennsylvania. EPIC Advisors, Inc., based in Rochester, NY, is a full-service 401(k) plan recordkeeping firm. Mang Insurance Agency, LLC, based in Norwich, 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.

                    NBT Bancorp Inc. and Subsidiaries
                      SELECTED FINANCIAL HIGHLIGHTS
                                (unaudited)
                                                         Net      Percent
                            2010           2009         Change     Change
                        -------------  -------------  ---------- ---------
                           (dollars in thousands,
                           except per share data)
Three Months Ended
 December 31,
Net Income              $      14,434  $      13,801  $      633         5%
Diluted Earnings Per
 Share                  $        0.42  $        0.40  $     0.02         5%
Weighted Average
 Diluted Common Shares
 Outstanding               34,590,063     34,348,189     241,874         1%
Return on Average
 Assets (1)                      1.05%          1.00%       5 bp         5%
Return on Average
 Equity (1)                     10.68%         10.92%     -24 bp        -2%
Net Interest Margin (2)          4.09%          4.15%      -6 bp        -1%
                        -------------  -------------  ---------- ---------
Year Ended December 31,
Net Income              $      57,404  $      52,011  $    5,393        10%
Diluted Earnings Per
 Share                  $        1.66  $        1.53  $     0.13         8%
Weighted Average
 Diluted Common Shares
 Outstanding               34,508,959     33,902,517     606,442         2%
Return on Average
 Assets                          1.05%          0.96%       9 bp         9%
Return on Average
 Equity                         10.92%         10.90%       2 bp         0%
Net Interest Margin (2)          4.15%          4.04%      11 bp         3%
                        -------------  -------------  ---------- ---------
Asset Quality            December 31,   December 31,
                            2010           2009
                        -------------  -------------
Nonaccrual Loans        $      42,467  $      38,746
90 Days Past Due and
 Still Accruing         $       2,325  $       2,526
Total Nonperforming
 Loans                  $      44,792  $      41,272
Other Real Estate Owned $         901  $       2,358
Total Nonperforming
 Assets                 $      45,693  $      43,630
Past Due Loans          $      31,004  $      32,349
Potential Problem Loans $      82,247  $      79,072
Allowance for Loan and
 Lease Losses           $      71,234  $      66,550
Year-to-Date (YTD) Net
 Charge-Offs            $      25,125  $      25,406
Allowance for Loan and
 Lease Losses to Total
 Loans and Leases                1.97%          1.83%
Total Nonperforming
 Loans to Total Loans
 and Leases                      1.24%          1.13%
Total Nonperforming
 Assets to Total Assets          0.86%          0.80%
Past Due Loans to Total
 Loans and Leases                0.86%          0.89%
Allowance for Loan and
 Lease Losses to Total
 Nonperforming Loans           159.03%        161.25%
Net Charge-Offs to YTD
 Average Loans and
 Leases                          0.69%          0.70%
                        -------------  -------------  ---------- ---------
Capital
Equity to Assets                 9.99%          9.24%
Book Value Per Share    $       15.51  $       14.69
Tangible Book Value Per
 Share                  $       11.67  $       10.75
Tier 1 Leverage Ratio            9.16%          8.35%
Tier 1 Capital Ratio            12.44%         11.34%
Total Risk-Based
 Capital Ratio                  13.70%         12.59%
                        -------------  -------------  ---------- ---------
Quarterly Common Stock
 Price                       2010              2009
Quarter End              High    Low       High    Low
                       -------  ------   -------  ------
March 31               $ 23.99  $19.15   $ 28.37  $15.42
June 30                $ 25.96  $20.33   $ 25.22  $20.49
September 30           $ 23.06  $19.27   $ 24.16  $20.57
December 31            $ 24.96  $21.41   $ 23.59  $19.43
                       ---------------   ---------------
(1)  Annualized
(2)  Calculated on a FTE basis
                    NBT Bancorp Inc. and Subsidiaries
                      SELECTED FINANCIAL HIGHLIGHTS
                                (unaudited)
                            December 31,    December 31,     Net   Percent
                               2010            2009         Change  Change
                          --------------- --------------- ---------  -----
                          (dollars in thousands, except
                                  per share data)
Balance Sheet
Loans and Leases          $     3,610,006 $    3,645,398  $ (35,392)    -1%
Earning Assets            $     4,914,972 $    5,009,251  $ (94,279)    -2%
Total Assets              $     5,338,856 $    5,464,026  $(125,170)    -2%
Deposits                  $     4,134,352 $    4,093,046  $  41,306      1%
Stockholders' Equity      $       533,572 $      505,123  $  28,449      6%
                          --------------- --------------- ---------  -----
                               2010            2009
                          --------------- ---------------
                           (dollars in thousands, except
Average Balances                  per share data)
Three Months Ended
 December 31,
Loans and Leases          $     3,603,867 $    3,628,244  $ (24,377)
Securities Available For
 Sale (excluding
 unrealized gains or
 losses)                  $     1,097,887 $    1,124,877  $ (26,990)
Securities Held To
 Maturity                 $       100,204 $      165,108  $ (64,904)
Trading Securities        $         2,703 $        2,312  $     391
Regulatory Equity
 Investment               $        28,911 $       37,091  $  (8,180)
Short-Term Interest
 Bearing Accounts         $       187,099 $      122,104  $  64,995
Total Earning Assets      $     5,017,968 $    5,077,424  $ (59,456)
Total Assets              $     5,449,848 $    5,499,273  $ (49,425)
Interest Bearing Deposits $     3,334,559 $    3,352,879  $ (18,320)
Non-Interest Bearing
 Deposits                 $       854,361 $      748,451  $ 105,910
Short-Term Borrowings     $       164,311 $      159,050  $   5,261
Long-Term Borrowings      $       482,279 $      654,592  $(172,313)
Total Interest Bearing
 Liabilities              $     3,981,149 $    4,166,521  $(185,372)
Stockholders' Equity      $       536,197 $      501,225  $  34,972
                          --------------- --------------- ---------
Average Balances
Year Ended December 31,
Loans and Leases          $     3,629,047 $    3,641,852  $ (12,805)
Securities Available For
 Sale (excluding
 unrealized gains or
 losses)                  $     1,088,376 $    1,095,609  $  (7,233)
Securities Held To
 Maturity                 $       128,727 $      151,078  $ (22,351)
Trading Securities        $         2,563 $        1,929  $     634
Regulatory Equity
 Investment               $        31,850 $       37,878  $  (6,028)
Short-Term Interest
 Bearing Accounts         $       137,818 $       88,012  $  49,806
Total Earning Assets      $     5,015,818 $    5,014,429  $   1,389
Total Assets              $     5,454,334 $    5,429,009  $  25,325
Interest Bearing Deposits $     3,340,873 $    3,340,735  $     138
Non-Interest Bearing
 Deposits                 $       805,594 $      718,580  $  87,014
Short-Term Borrowings     $       158,280 $      140,066  $  18,214
Long-Term Borrowings      $       544,931 $      676,461  $(131,530)
Total Interest Bearing
 Liabilities              $     4,044,084 $    4,157,262  $(113,178)
Stockholders' Equity      $       525,474 $      477,299  $  48,175
                          --------------- --------------- ---------
NBT Bancorp Inc. and Subsidiaries                     December   December
Consolidated Balance Sheets (unaudited)               31, 2010   31, 2009
                                                    ----------- -----------
(in thousands)
ASSETS
Cash and due from banks                             $    99,673 $   107,980
Short term interest bearing accounts                     69,119      79,181
Securities available for sale, at fair value          1,129,368   1,116,758
Securities held to maturity (fair value of $98,759
 and $161,851 at December 31, 2010
 and December 31, 2009, respectively)                    97,310     159,946
Trading securities                                        2,808       2,410
Federal Reserve and Federal Home Loan Bank stock         27,246      35,979
Loans and leases                                      3,610,006   3,645,398
Less allowance for loan and lease losses                 71,234      66,550
                                                    =========== ===========
  Net loans and leases                                3,538,772   3,578,848
Premises and equipment, net                              67,404      66,221
Goodwill                                                114,841     114,938
Intangible assets, net                                   17,543      20,590
Bank owned life insurance                                75,301      74,751
Other assets                                             99,471     106,424
                                                    ----------- -----------
TOTAL ASSETS                                        $ 5,338,856 $ 5,464,026
                                                    =========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits:
 Demand (noninterest bearing)                       $   911,741 $   789,989
 Savings, NOW, and money market                       2,291,833   2,269,779
 Time                                                   930,778   1,033,278
                                                    ----------- -----------
  Total deposits                                      4,134,352   4,093,046
Short-term borrowings                                   159,434     155,977
Long-term debt                                          369,874     554,698
Trust preferred debentures                               75,422      75,422
Other liabilities                                        66,202      79,760
                                                    ----------- -----------
  Total liabilities                                   4,805,284   4,958,903
Total stockholders' equity                              533,572     505,123
                                                    =========== ===========
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY          $ 5,338,856 $ 5,464,026
                                                    =========== ===========
                                    Three months ended      Year ended
NBT Bancorp Inc. and Subsidiaries      December 31,        December 31,
Consolidated Statements of Income
 (unaudited)                          2010      2009      2010      2009
                                    --------- --------  --------- ---------
(in thousands, except per share
 data)
Interest, fee and dividend income:
Loans and leases                    $  52,933 $ 55,361  $ 213,429 $ 220,324
Securities available for sale           7,944   10,810     36,167    45,972
Securities held to maturity               845    1,212      3,968     4,894
Other                                     627      621      2,174     2,203
                                    --------- --------  --------- ---------
  Total interest, fee and dividend
   income                              62,349   68,004    255,738   273,393
                                    --------- --------  --------- ---------
Interest expense:
Deposits                                6,727    9,532     30,354    48,496
Short-term borrowings                      64      139        402       552
Long-term debt                          4,025    5,673     18,314    23,629
Trust preferred debentures              1,034    1,036      4,140     4,247
                                    --------- --------  --------- ---------
  Total interest expense               11,850   16,380     53,210    76,924
                                    --------- --------  --------- ---------
Net interest income                    50,499   51,624    202,528   196,469
Provision for loan and lease losses     6,687    8,641     29,809    33,392
                                    --------- --------  --------- ---------
Net interest income after provision
 for loan and lease losses             43,812   42,983    172,719   163,077
                                    --------- --------  --------- ---------
Noninterest income:
Trust                                   2,261    1,881      7,722     6,719
Service charges on deposit accounts     5,657    6,808     24,041    27,165
ATM and debit card fees                 2,546    2,346     10,035     9,339
Insurance and other financial
 services revenue                       4,327    3,799     18,867    17,725
Net securities gains (losses)           2,063       (2)     3,274       144
Bank owned life insurance income          872      910      3,316     3,135
Retirement plan administration fees     2,759    2,739     10,356     9,086
Other                                   1,751    1,365      6,277     6,818
                                    --------- --------  --------- ---------
  Total noninterest income             22,236   19,846     83,888    80,131
                                    --------- --------  --------- ---------
Noninterest expense:
Salaries and employee benefits         23,200   22,919     93,718    85,565
Office supplies and postage             1,564    1,472      6,102     5,857
Occupancy                               3,823    3,608     15,350    14,864
Equipment                               2,123    2,115      8,317     8,139
Professional fees and outside
 services                               2,489    2,688      9,032    10,508
Data processing and communications      2,893    3,314     12,347    13,238
Amortization of intangible assets         744      781      3,072     3,246
Loan collection and other real
 estate owned                             761      589      3,036     2,766
Advertising                             1,266      936      3,487     3,455
FDIC expenses                           1,347    1,312      6,081     8,408
Prepayment penalty on long-term
 debt                                   3,321      810      4,526       810
Other operating                         3,719    4,746     13,223    13,710
                                    --------- --------  --------- ---------
  Total noninterest expense            47,250   45,290    178,291   170,566
                                    --------- --------  --------- ---------
Income before income taxes             18,798   17,539     78,316    72,642
Income taxes                            4,364    3,738     20,912    20,631
                                    --------- --------  --------- ---------
   Net income                       $  14,434 $ 13,801  $  57,404 $  52,011
                                    --------- --------  --------- ---------
Earnings Per Share:
     Basic                          $    0.42 $   0.40  $    1.67 $    1.54
     Diluted                        $    0.42 $   0.40  $    1.66 $    1.53
                                    ========= ========  ========= =========
NBT Bancorp Inc. and Subsidiaries
Quarterly Consolidated
 Statements of Income             4Q       3Q       2Q       1Q       4Q
 (unaudited)                     2010     2010     2010     2010     2009
                               -------- -------- -------- -------- -------
(in thousands, except per
 share data)
Interest, fee and dividend
 income:
Loans and leases               $ 52,933 $ 53,301 $ 53,503 $ 53,692 $55,361
Securities available for sale     7,944    8,621    9,556   10,046  10,810
Securities held to maturity         845      908    1,078    1,137   1,212
Other                               627      482      469      596     621
                               -------- -------- -------- -------- -------
  Total interest, fee and
   dividend income               62,349   63,312   64,606   65,471  68,004
                               -------- -------- -------- -------- -------
Interest expense:
Deposits                          6,727    7,174    7,999    8,454   9,532
Short-term borrowings                64       91      123      124     139
Long-term debt                    4,025    4,374    4,850    5,065   5,673
Trust preferred debentures        1,034    1,046    1,033    1,027   1,036
                               -------- -------- -------- -------- -------
  Total interest expense         11,850   12,685   14,005   14,670  16,380
                               -------- -------- -------- -------- -------
Net interest income              50,499   50,627   50,601   50,801  51,624
Provision for loan and lease
 losses                           6,687    7,529    6,350    9,243   8,641
                               -------- -------- -------- -------- -------
Net interest income after
 provision for loan and lease
 losses                          43,812   43,098   44,251   41,558  42,983
                               -------- -------- -------- -------- -------
Noninterest income:
Trust                             2,261    1,786    1,909    1,766   1,881
Service charges on deposit
 accounts                         5,657    5,953    6,301    6,130   6,808
ATM and debit card fees           2,546    2,660    2,462    2,367   2,346
Insurance and other financial
 services revenue                 4,327    4,595    4,700    5,245   3,799
Net securities gains/(losses)     2,063    1,120       63       28      (2)
Bank owned life insurance
 income                             872      655      808      981     910
Retirement plan administration
 fees                             2,759    2,612    2,595    2,390   2,739
Other                             1,751    1,610    1,482    1,434   1,365
                               -------- -------- -------- -------- -------
  Total noninterest income       22,236   20,991   20,320   20,341  19,846
                               -------- -------- -------- -------- -------
Noninterest expense:
Salaries and employee benefits   23,200   24,090   24,224   22,204  22,919
Office supplies and postage       1,564    1,542    1,454    1,542   1,472
Occupancy                         3,823    3,709    3,666    4,152   3,608
Equipment                         2,123    2,053    2,041    2,100   2,115
Professional fees and outside
 services                         2,489    2,068    2,191    2,284   2,688
Data processing and
 communications                   2,893    2,971    3,265    3,218   3,314
Amortization of intangible
 assets                             744      767      780      781     781
Loan collection and other real
 estate owned                       761      548      668    1,059     589
Advertising                       1,266      730      825      667     936
FDIC expenses                     1,347    1,621    1,560    1,553   1,312
Prepayment penalty on
 long-term debt                   3,321    1,205        -        -     810
Other operating                   3,719    3,380    3,523    2,600   4,746
                               -------- -------- -------- -------- -------
  Total noninterest expense      47,250   44,684   44,197   42,160  45,290
                               -------- -------- -------- -------- -------
Income before income taxes       18,798   19,405   20,374   19,739  17,539
Income taxes                      4,364    4,835    5,950    5,763   3,738
                               -------- -------- -------- -------- -------
   Net income                  $ 14,434 $ 14,570 $ 14,424 $ 13,976 $13,801
                               ======== ======== ======== ======== =======
Earnings per share:
   Basic                       $   0.42 $   0.42 $   0.42 $   0.41 $  0.40
   Diluted                     $   0.42 $   0.42 $   0.42 $   0.41 $  0.40
                               ======== ======== ======== ======== =======
   Three Months ended December 31,
                                 2010                        2009
(dollars in          Average            Yield/   Average            Yield/
 thousands)          Balance   Interest Rates    Balance   Interest Rates
                    ---------- -------- ------  ---------- -------- ------
ASSETS
Short-term interest
 bearing accounts   $  187,099 $    135   0.29% $  122,104 $     87   0.28%
Securities
 available for sale
 (1)(excluding
 unrealized gains
 or losses)          1,097,887    8,433   3.05%  1,124,877   11,552   4.07%
Securities held to
 maturity (1)          100,204    1,402   5.55%    165,108    1,832   4.40%
Investment in FRB
 and FHLB Banks         28,911      492   6.75%     37,091      533   5.70%
Loans and leases
 (2)                 3,603,867   53,160   5.85%  3,628,244   55,551   6.07%
                    ---------- --------         ---------- --------
  Total interest
   earning assets   $5,017,968 $ 63,622   5.03% $5,077,424 $ 69,555   5.43%
                               --------                    --------
Other assets           431,880                     421,849
                    ----------                  ----------
Total assets        $5,449,848                  $5,499,273
                    ----------                  ----------
LIABILITIES AND
 STOCKHOLDERS'
 EQUITY
Money market
 deposit accounts   $1,068,707    1,188   0.44% $1,067,763 $  2,359   0.88%
NOW deposit
 accounts              762,567      732   0.38%    688,376      831   0.48%
Savings deposits       555,622      174   0.12%    505,131      195   0.15%
Time deposits          947,663    4,633   1.94%  1,091,609    6,147   2.23%
                    ---------- --------         ---------- --------
  Total interest
   bearing deposits $3,334,559 $  6,727   0.80% $3,352,879 $  9,532   1.13%
Short-term
 borrowings            164,311       64   0.16%    159,050      139   0.35%
Trust preferred
 debentures             75,422    1,034   5.44%     75,422    1,036   5.45%
Long-term debt         406,857    4,025   3.93%    579,170    5,673   3.89%
                    ---------- --------         ---------- --------
  Total interest
   bearing
   liabilities      $3,981,149 $ 11,850   1.18% $4,166,521 $ 16,380   1.56%
                               --------                    --------
Demand deposits        854,361                     748,451
Other liabilities       78,141                      83,076
Stockholders'
 equity                536,197                     501,225
                    ----------                  ----------
Total liabilities
 and stockholders'
 equity             $5,449,848                  $5,499,273
                    ----------                  ----------
  Net interest
   income (FTE)                  51,772                      53,175
                               --------                    --------
Interest rate
 spread                                   3.85%                       3.87%
Net interest margin                       4.09%                       4.15%
Taxable equivalent
 adjustment                       1,273                       1,551
                               --------                    --------
Net interest income            $ 50,499                    $ 51,624
(1) Securities are shown at average amortized cost
(2) For purposes of these computations, nonaccrual loans are included in
    the average loan balances outstanding
   Year ended December 31,
                                 2010                        2009
(dollars in          Average            Yield/   Average            Yield/
 thousands)          Balance   Interest Rates    Balance   Interest Rates
                    ---------- -------- ------  ---------- -------- ------
ASSETS
Short-term interest
 bearing accounts   $  137,818 $    354   0.26% $   88,012 $    238   0.27%
Securities
 available for sale
 (1)(excluding
 unrealized gains
 or losses)          1,088,376   38,759   3.56%  1,095,609   48,951   4.47%
Securities held to
 maturity (1)          128,727    6,104   4.74%    151,078    7,385   4.89%
Investment in FRB
 and FHLB Banks         31,850    1,821   5.72%     37,878    1,966   5.19%
Loans and leases
 (2)                 3,629,047  214,258   5.90%  3,641,852  221,128   6.07%
                    ---------- --------         ---------- --------
  Total interest
   earning assets   $5,015,818 $261,296   5.21% $5,014,429 $279,668   5.58%
                               --------                    --------
Other assets           438,516                     414,580
                    ----------                  ----------
Total assets        $5,454,334                  $5,429,009
                    ----------                  ----------
LIABILITIES AND
 STOCKHOLDERS'
 EQUITY
Money market
 deposit accounts   $1,092,789    6,273   0.57% $1,013,514 $ 12,165   1.20%
NOW deposit
 accounts              709,920    2,938   0.41%    600,943    3,159   0.53%
Savings deposits       552,660      797   0.14%    499,079      826   0.17%
Time deposits          985,504   20,346   2.06%  1,227,199   32,346   2.64%
                    ---------- --------         ---------- --------
  Total interest
   bearing deposits $3,340,873 $ 30,354   0.91% $3,340,735 $ 48,496   1.45%
Short-term
 borrowings            158,280      402   0.25%    140,066      552   0.39%
Trust preferred
 debentures             75,422    4,140   5.49%     75,422    4,247   5.63%
Long-term debt         469,509   18,314   3.90%    601,039   23,629   3.93%
                    ---------- --------         ---------- --------
  Total interest
   bearing
   liabilities      $4,044,084 $ 53,210   1.32% $4,157,262 $ 76,924   1.85%
                               --------                    --------
Demand deposits        805,594                     718,580
Other liabilities       79,182                      75,868
Stockholders'
 equity                525,474                     477,299
                    ----------                  ----------
Total liabilities
 and stockholders'
 equity             $5,454,334                  $5,429,009
                    ----------                  ----------
  Net interest
   income (FTE)                 208,086                     202,744
                               --------                    --------
Interest rate
 spread                                   3.89%                       3.73%
Net interest margin                       4.15%                       4.04%
Taxable equivalent
 adjustment                       5,558                       6,275
                               --------                    --------
Net interest income            $202,528                    $196,469
(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)
                                                        At December 31,
                                                    -----------------------
(In thousands)                                         2010        2009
                                                    ----------- -----------
Residential real estate mortgages                   $   559,213 $   622,898
Commercial                                              605,238     581,870
Commercial real estate mortgages                        805,905     718,235
Real estate construction and development                 50,164      76,721
Agricultural and agricultural real estate mortgages     112,738     122,466
Consumer                                                870,425     856,956
Home equity                                             575,678     603,585
Lease financing                                          30,645      62,667
                                                    ----------- -----------
  Total loans and leases                            $ 3,610,006 $ 3,645,398
                                                    =========== ===========


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

SOURCE: NBT Bancorp Inc.

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