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NBT Bancorp Inc. Announces Quarterly Earnings of $12.1 Million; Declares Cash Dividend; Authorizes Buyback of an Additional 1,000,000 Shares

07/23/07

NORWICH, NY, Jul 23, 2007 (MARKET WIRE via COMTEX News Network) -- NBT Bancorp Inc. (NBT) (NASDAQ: NBTB) reported today that net income for the six months ended June 30, 2007, was $26.2 million, down 5.6% or $1.6 million from net income of $27.8 million reported for the same period in 2006. Net income per diluted share for the six month period ended June 30, 2007, was $0.77 per share, compared with $0.81 per share for the same period in 2006. Return on average assets and return on average equity were 1.04% and 12.98%, respectively, for the six months ended June 30, 2007, compared with 1.17% and 14.93%, respectively, for the same period in 2006. The decrease in net income for the six months ended June 30, 2007, was primarily the result of an $8.4 million increase in provision for loan and lease losses compared to the same period last year. This increase in expense was partially offset by a $2.9 million increase in noninterest income and a $3.3 million decrease in noninterest expense.

Net income for the three months ended June 30, 2007, was $12.1 million, down 14.9% or $2.1 million from net income of $14.2 million reported for the same period in 2006. Net income per diluted share for the three months ended June 30, 2007, was $0.36 per share, compared with $0.41 per share for the same period in 2006. Return on average assets and return on average equity were 0.95% and 11.90%, respectively, for the three months ended June 30, 2007, compared with 1.15% and 14.71%, respectively, for the same period in 2006. The decrease in net income for the three months ended June 30, 2007, was primarily the result of an $8.1 million increase in provision for loan and lease losses compared to the same period last year. This increase in expense was partially offset by a $1.4 million increase in noninterest income and a $3.7 million decrease in noninterest expense.

The comparability of financial information for the six months ended June 30, 2007 and 2006, is affected by the acquisition of CNB Bancorp, Inc. ("CNB"). Operating results include the operations of CNB from the date of acquisition, which was February 10, 2006.

Loan and Lease Quality and Provision for Loan and Lease Losses

Nonperforming loans at June 30, 2007, were $34.4 million or 1.00% of total loans and leases compared with $17.4 million or 0.51% of total loans and leases at March 31, 2007, $15.3 million or 0.45% of total loans and leases at December 31, 2006, and $12.9 million or 0.38% of total loans and leases at June 30, 2006. This increase is primarily due to one owner-occupied commercial real estate relationship, as well as several dairy credits. Annualized net charge-offs to average loans and leases for the six months ended June 30, 2007, were 0.32%, compared with 0.20% for the six months ended June 30, 2006 and 0.26% for the year ended December 31, 2006. The Company's allowance for loan and lease losses was 1.66% of loans and leases at June 30, 2007, compared with 1.50% at June 30, 2006, and 1.48% at December 31, 2006.

For the three months and six months ended June 30, 2007, the provision for loan and lease losses totaled $9.8 million and $11.9 million, respectively, compared with $1.7 million and $3.4 million for the same periods in 2006. The increase in the provision is primarily due to the increase in nonperforming loans and charge-offs.

Net Interest Income

Net interest income was up 0.6% to $82.0 million for the six months ended June 30, 2007, compared with $81.5 million for the same period a year ago. Despite a decrease in the Company's fully taxable equivalent (FTE) net interest margin, from 3.80% for the six months ended June 30, 2006, to 3.63% for the same period in 2007, the Company experienced a slight increase in net interest income that was primarily attributable to an 5.8% growth in average earning assets. The growth in average earning assets was due primarily to consumer loan growth.

Net interest income remained consistent at $41.4 million for the three months ended June 30, 2007, compared with the same period a year ago. Despite a decrease in the Company's FTE net interest margin, from 3.73% for the three months ended June 30, 2006, to 3.63% for the same period in 2007, the Company's net interest income remained steady. This was primarily attributable to a 3.5% growth in average earning assets. The growth in average earning assets was due to organic loan growth, particularly consumer loans.

The decline in the net interest margin from the prior year is due largely to the effect from our borrowings, money market accounts and time deposits repricing in a higher interest rate environment. Earning assets, particularly those tied to a fixed rate, have not realized the benefit of the higher interest rate environment, since yields on earning assets with terms of three years or longer have remained relatively flat during this period. The Company anticipates that margin pressure will persist into the next several quarters, given the current interest rate environment. Our net interest margin has remained flat from the prior quarter and if the yield curve remains flat or inverted, we expect net interest income to remain relatively flat through 2007.

NBT President and CEO Martin A. Dietrich said, "The increase in non-performing loans is generally limited to the areas already mentioned above and we believe we have recognized these issues in a timely and prudent manner. Despite the increased level of non-performing loans, I remain pleased with our financial performance this year given the challenging environment in which we operate. A sharp focus on our cost structure, as well as steady growth in certain fee income categories has improved our efficiency ratio. In addition, our margin, which had compressed for several quarters, held steady in the second quarter compared to the first."

Noninterest Income

Noninterest income for the six months ended June 30, 2007, was $26.7 million, up $2.9 million or 12.2% from $23.8 million for the same period in 2006. The increase in noninterest income was due primarily to an increase in fees from service charges on deposit accounts and ATM and debit cards, which collectively increased $1.2 million from growth in our debit card base as well as growth in our demand deposit accounts. In addition, trust administration income increased $0.4 million for the six months ended June 30, 2007, compared with the same period in 2006. This increase stems from market appreciation of existing accounts and an increase in customer accounts resulting from successful business development. Retirement plan administration fees for the three months ended June 30, 2007, increased $0.5 million, compared with the same period in 2006, as a result of our growing client base. Net securities losses for the six months ended June 30, 2006, were $0.9 million. Excluding the effect of these securities transactions, noninterest income increased $2.0 million, or 8.0%, for the six months ended June 30, 2007, compared with the same period in 2006.

Noninterest income for the three months ended June 30, 2007, was $14.0 million, up $1.4 million or 11.4% from $12.6 million for the same period in 2006. The increase in noninterest income was due primarily to an increase in fees from service charges on deposit accounts and ATM and debit cards, which collectively increased $0.7 million from growth in our debit card base as well as growth in our demand deposit accounts. In addition, trust administration income increased $0.3 million for the three months ended June 30, 2007, compared with the same period in 2006. This increase stems from market appreciation of existing accounts and an increase in customer accounts resulting from successful business development. Retirement plan administration fees for the three months ended June 30, 2007, increased $0.2 million, compared with the same period in 2006, as a result of our growing client base.

Noninterest Expense and Income Tax Expense

Noninterest expense for the six months ended June 30, 2007, was $58.9 million, down from $62.2 million for the same period in 2006. This decrease was principally the result of a decrease of $3.1 million, or 9.7%, in salaries and employee benefits. This decrease was due primarily to a reduction in incentive compensation and pension expenses incurred in 2007. Income tax expense for the six months ended June 30, 2007, was $11.7 million, down from $11.9 million for the same period in 2006. The effective rate for the six months ended June 30, 2007, was 30.9%, up from 30.0% for the same period in 2006. The increase in the effective tax rate for the six months ended June 30, 2007, compared with the same period in 2006 resulted primarily from a tax refund received in the first quarter of 2006.

Noninterest expense for the three months ended June 30, 2007, was $28.0 million, down from $31.7 million for the same period in 2006. This decrease was principally the result of a decrease of $3.3 million, or 20.3%, in salaries and employee benefits. This decrease was due primarily to a reduction in incentive compensation and pension expenses incurred during the first six months of 2007. Office expenses, such as supplies and postage, occupancy, equipment and data processing and communications charges, decreased by $0.3 million, or 3.6%, for the three months ended June 30, 2007, compared with the same period in 2006. Income tax expense for the three months ended June 30, 2007, was $5.5 million, down from $6.4 million for the same period in 2006. The effective rate for the three months ended June 30, 2007, was 31.3%, up from 31.0% for the same period in 2006.

Balance Sheet

Total assets were $5.1 billion at June 30, 2007, up $125.7 million from $5.0 billion at June 30, 2006, and up $34.1 million from December 31, 2006. Loans and leases were $3.4 billion at June 30, 2007, up $84.4 million or 2.5% from $3.3 billion at June 30, 2006, and up $19.6 million or 0.6% from $3.4 billion at December 31, 2006. These increases were due primarily to an increase in consumer loans. Total deposits were $4.0 billion at June 30, 2007, up $211.3 million or 5.6% from $3.7 billion at June 30, 2006, and up $162.9 million or 4.3% from $3.8 billion at December 31, 2006. These increases were due primarily to growth in time deposits, money market accounts and savings accounts. Stockholders' equity was $390.9 million, representing total equity to total assets of 7.63% at June 30, 2007, compared with $377.6 million or total equity to total asset ratio of 7.56% at June 30, 2006, and $403.8 million or total equity to total asset ratio of 7.94% at December 31, 2006.

Stock Repurchase Program

On July 23, 2007, the NBT Board of Directors authorized a new repurchase program whereby NBT intends to repurchase up to an additional 1,000,000 shares (approximately 3%) of its outstanding common stock, as market conditions warrant in open market and privately negotiated transactions. When this repurchase was authorized, there were 636,780 shares remaining under previous authorizations. These remaining shares were combined with this new authorization, increasing the total shares available for repurchase to 1,636,780.

Under previously mentioned stock repurchase plans, the Company purchased 1,100,367 shares of its common stock during the six-month period ended June 30, 2007, for a total of $25.0 million at an average price of $22.76 per share. For the three-month period ended June 30, 2007, the Company purchased 726,400 shares of its common stock for a total of $16.5 million at an average price of $22.69 per share.

Dividend Declared

The NBT Board of Directors declared a third-quarter cash dividend of $0.20 per share at a meeting held today. The dividend will be paid on September 15, 2007, to shareholders of record as of September 1, 2007.

Corporate Overview

NBT is a financial holding company headquartered in Norwich, NY, with total assets of $5.1 billion at June 30, 2007. 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 118 locations, including 80 NBT Bank offices in upstate New York and 38 Pennstar Bank offices in northeastern Pennsylvania. EPIC Advisors, Inc., based in Rochester, NY, is a full-service 401(k) plan recordkeeping firm. Hathaway Insurance Agency, Inc., based in Gloversville, 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.hathawayagency.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
                                  2007        2006       Change    Change
                               ----------  ----------  ----------  -------
                               (dollars in thousands,
                               except per share data)
Six Months Ended June 30,
Net Income                     $   26,196  $   27,757  $   (1,561)      -6%
Diluted Earnings Per Share     $     0.77  $     0.81  $    (0.04)      -5%
Weighted Average Diluted
   Common Shares Outstanding   34,195,110  34,111,076      84,034        0%
Return on Average Assets (1)         1.04%       1.17%      -0.13%     -11%
Return on Average Equity (1)        12.98%      14.93%      -1.95%     -13%
Net Interest Margin (2)              3.63%       3.80%      -0.17%      -4%
                               ==========  ==========  ==========  =======
Three Months Ended June 30,
Net Income                     $   12,064  $   14,169  $   (2,105)     -15%
Diluted Earnings Per Share     $     0.36  $     0.41  $    (0.05)     -12%
Weighted Average Diluted
   Common Shares Outstanding   33,936,096  34,471,723    -535,627       -2%
Return on Average Assets (1)         0.95%       1.15%      -0.20%     -17%
Return on Average Equity (1)        11.90%      14.71%      -2.81%     -19%
Net Interest Margin (2)              3.63%       3.73%      -0.10%      -3%
                               ==========  ==========  ==========  =======
Asset Quality                    June 30,   December 31, June 30,
                                   2007        2006        2006
                               ----------  ----------  ----------
Nonaccrual Loans               $   33,730  $   13,665  $   12,277
90 Days Past Due and Still
 Accruing                      $      689  $    1,642  $      580
Total Nonperforming Loans      $   34,419  $   15,307  $   12,857
Other Real Estate Owned (OREO) $      981  $      389  $      423
Total Nonperforming Assets     $   35,400  $   15,696  $   13,280
Allowance for Loan and Lease
 Losses                        $   57,058  $   50,587  $   50,148
Year-to-Date (YTD) Net
 Charge-Offs                   $    5,395  $    8,673  $    3,148
Allowance for Loan and Lease
 Losses to Total Loans and
 Leases                              1.66%       1.48%       1.50%
Total Nonperforming Loans to
 Total Loans and Leases              1.00%       0.45%       0.38%
Total Nonperforming Assets to
 Total Assets                        0.69%       0.31%       0.27%
Allowance for Loan and Lease
 Losses to Total Nonperforming
 Loans                             165.77%     330.48%     390.04%
Annualized Net Charge-Offs to
   YTD Average Loans and Leases      0.32%       0.26%       0.20%
                               ==========  ==========  ==========
Capital
Equity to Assets                     7.63%       7.94%       7.56%
Book Value Per Share           $    11.72  $    11.79  $    11.15
Tangible Book Value Per Share  $     8.29  $     8.42  $     7.72
Tier 1 Leverage Ratio                7.37%       7.57%       7.27%
Tier 1 Capital Ratio                10.21%      10.42%       9.90%
Total Risk-Based Capital Ratio      11.46%      11.67%      11.15%
                               ==========  ==========  ==========
Quarterly Common
 Stock Price            2007                2006                2005
Quarter End       High        Low     High        Low     High        Low
                --------    ------- -------     ------- -------     -------
March 31        $  25.81    $ 21.73 $ 23.90     $ 21.02 $ 25.66     $ 21.48
June 30         $  23.45    $ 21.80   23.24       21.03   24.15       20.10
September 30                          24.57       21.44   25.50       22.79
December 31                           26.47       22.36   23.79       20.75
                ------------------- ------------------- -------------------
(1) Annualized
(2) Calculated on a FTE basis
                    NBT Bancorp Inc. and Subsidiaries
                      SELECTED FINANCIAL HIGHLIGHTS
                                (unaudited)
                                                           Net     Percent
                                  2007        2006       Change    Change
                               ----------- ----------- ----------  -------
                               (dollars in thousands,
                               except per share data)
Balance Sheet as of June 30,
Loans and Leases               $ 3,432,300 $ 3,347,876 $   84,424        3%
Earning Assets                 $ 4,756,527 $ 4,636,111 $  120,416        3%
Total Assets                   $ 5,121,634 $ 4,995,912 $  125,722        3%
Deposits                       $ 3,959,166 $ 3,747,901 $  211,265        6%
Stockholders' Equity           $   390,934 $   377,606 $   13,328        4%
                               =========== =========== ==========  =======
Average Balances
Six Months Ended June 30,
Loans and Leases               $ 3,410,928 $ 3,225,053 $  185,875        6%
Securities Available For Sale
(excluding unrealized gains or
 losses)                       $ 1,126,209 $ 1,093,566 $   32,643        3%
Securities Held To Maturity    $   144,683 $    99,425 $   45,258       46%
Regulatory Equity Investment   $    33,684 $    40,357 $   (6,673)     -17%
Short-Term Interest Bearing
 Accounts                      $     8,934 $     7,543 $    1,391       18%
Total Earning Assets           $ 4,724,438 $ 4,465,944 $  258,494        6%
Total Assets                   $ 5,083,653 $ 4,802,333 $  281,320        6%
Interest Bearing Deposits      $ 3,276,368 $ 2,925,441 $  350,927       12%
Non-Interest Bearing Deposits  $   622,083 $   602,632 $   19,451        3%
Short-Term Borrowings          $   257,687 $   359,039 $ (101,352)     -28%
Long-Term Borrowings           $   465,655 $   487,742 $  (22,087)      -5%
Total Interest Bearing
 Liabilities                   $ 3,999,710 $ 3,772,222 $  227,488        6%
Stockholders' Equity           $   407,128 $   375,658 $   31,470        8%
                               =========== =========== ==========  =======
Average Balances
Quarter Ended June 30,
Loans and Leases               $ 3,423,130 $ 3,302,136 $  120,994        4%
Securities Available For Sale
(excluding unrealized gains or
 losses)                       $ 1,128,973 $ 1,132,330 $   (3,357)       0%
Securities Held To Maturity    $   148,467 $   101,481 $   46,986       46%
Regulatory Equity Investment   $    32,576 $    40,166 $   (7,590)     -19%
Short-Term Interest Bearing
 Accounts                      $     8,618 $     7,346 $    1,272       17%
Total Earning Assets           $ 4,741,764 $ 4,583,459 $  158,305        3%
Total Assets                   $ 5,098,649 $ 4,937,007 $  161,642        3%
Interest Bearing Deposits      $ 3,307,241 $ 3,039,915 $  267,326        9%
Non-Interest Bearing Deposits  $   627,172 $   614,049 $   13,123        2%
Short-Term Borrowings          $   250,112 $   346,585 $  (96,473)     -28%
Long-Term Borrowings           $   449,464 $   499,598 $  (50,134)     -10%
Total Interest Bearing
 Liabilities                   $ 4,006,817 $ 3,886,098 $  120,719        3%
Stockholders' Equity           $   406,741 $   386,183 $   20,558        5%
                               =========== =========== ==========  =======
NBT Bancorp Inc. and Subsidiaries        June 30,  December 31,  June 30,
Consolidated Balance Sheets (unaudited)    2007        2006        2006
                                        ----------- ----------- -----------
(in thousands)
ASSETS
Cash and due from banks                 $   134,058 $   130,936 $   136,005
Short term interest bearing accounts          7,252       7,857       9,575
Securities available for sale, at fair
 value                                    1,118,124   1,106,322   1,100,416
Securities held to maturity (fair value
 of $146,944, $136,287 and $109,562 at
 June 30, 2007, December 31, 2006 and
 June 30, 2006, respectively)               147,537     136,314     110,331
Federal Reserve and Federal Home Loan
 Bank stock                                  33,061      38,812      40,338
Loans and leases                          3,432,300   3,412,654   3,347,876
Less allowance for loan and lease
 losses                                      57,058      50,587      50,148
                                        =========== =========== ===========
  Net loans and leases                    3,375,242   3,362,067   3,297,728
Premises and equipment, net                  65,286      66,982      66,948
Goodwill                                    103,412     103,356     102,803
Intangible assets, net                       10,998      11,984      13,338
Bank owned life insurance                    42,667      41,783      40,926
Other assets                                 83,997      81,159      77,504
                                        ----------- ----------- -----------
TOTAL ASSETS                            $ 5,121,634 $ 5,087,572 $ 4,995,912
                                        =========== =========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits:
  Demand (noninterest bearing)          $   681,732 $   646,377 $   642,901
  Savings, NOW, and money market          1,606,473   1,566,557   1,567,171
  Time                                    1,670,961   1,583,304   1,537,829
                                        ----------- ----------- -----------
    Total deposits                        3,959,166   3,796,238   3,747,901
Short-term borrowings                       290,387     345,408     320,637
Long-term debt                              352,151     417,728     421,736
Trust preferred debentures                   75,422      75,422      75,422
Other liabilities                            53,574      48,959      52,610
                                        ----------- ----------- -----------
    Total liabilities                     4,730,700   4,683,755   4,618,306
Total stockholders' equity                  390,934     403,817     377,606
                                        =========== =========== ===========
TOTAL LIABILITIES AND STOCKHOLDERS'
 EQUITY                                 $ 5,121,634 $ 5,087,572 $ 4,995,912
                                        =========== =========== ===========
NBT Bancorp Inc. and              Three months ended     Six months ended
 Subsidiaries                         June 30,              June 30,
Consolidated Statements of        2007       2006       2007       2006
 Income (unaudited)              ---------- ---------- ---------- ---------
(in thousands, except per share
 data)
Interest, fee and dividend
 income:
Loans and leases                $   60,689 $   57,085 $  120,497 $ 109,918
Securities available for sale       13,562     13,084     27,029    24,961
Securities held to maturity          1,525      1,043      2,969     2,028
Other                                  719        619      1,459     1,230
                                ---------- ---------- ---------- ---------
   Total interest, fee and
    dividend income                 76,495     71,831    151,954   138,137
                                ---------- ---------- ---------- ---------
Interest expense:
Deposits                            26,950     20,869     52,934    38,094
Short-term borrowings                2,918      4,111      6,010     8,048
Long-term debt                       3,997      4,227      8,483     8,369
Trust preferred debentures           1,272      1,255      2,540     2,138
                                ---------- ---------- ---------- ---------
   Total interest expense           35,137     30,462     69,967    56,649
                                ---------- ---------- ---------- ---------
Net interest income                 41,358     41,369     81,987    81,488
Provision for loan and lease
 losses                              9,770      1,703     11,866     3,431
                                ---------- ---------- ---------- ---------
Net interest income after
 provision for loan and lease
 losses                             31,588     39,666     70,121    78,057
                                ---------- ---------- ---------- ---------
Noninterest income:
Trust                                1,792      1,459      3,229     2,817
Service charges on deposit
 accounts                            4,936      4,493      9,405     8,712
ATM and debit card fees              2,041      1,789      3,937     3,434
Broker/dealer and insurance
 revenue                             1,093        967      2,176     1,875
Net securities gains (losses)           21         22         16      (912)
Bank owned life insurance
 income                                450        392        884       773
Retirement plan administration
 fees                                1,601      1,431      3,193     2,662
Other                                2,058      2,003      3,842     4,419
                                ---------- ---------- ---------- ---------
   Total noninterest income         13,992     12,556     26,682    23,780
                                ---------- ---------- ---------- ---------
Noninterest expense:
Salaries and employee benefits      13,022     16,335     28,986    32,083
Office supplies and postage          1,334      1,456      2,630     2,637
Occupancy                            2,585      2,747      5,754     5,735
Equipment                            1,837      2,067      3,770     4,223
Professional fees and outside
 services                            1,926      1,800      3,584     3,632
Data processing and
 communications                      2,845      2,649      5,722     5,351
Amortization of intangible
 assets                                410        466        819       789
Loan collection and other real
 estate owned                          228        289        605       500
Other operating                      3,827      3,885      7,016     7,216
                                ---------- ---------- ---------- ---------
   Total noninterest expense        28,014     31,694     58,886    62,166
                                ---------- ---------- ---------- ---------
Income before income taxes          17,566     20,528     37,917    39,671
Income taxes                         5,502      6,359     11,721    11,914
                                ---------- ---------- ---------- ---------
   Net income                   $   12,064 $   14,169 $   26,196 $  27,757
                                ---------- ---------- ---------- ---------
Earnings Per Share:
   Basic                        $     0.36 $     0.41 $     0.77 $    0.82
   Diluted                      $     0.36 $     0.41 $     0.77 $    0.81
                                ========== ========== ========== =========
NBT Bancorp Inc. and Subsidiaries
Quarterly Consolidated
 Statements of Income             2Q       1Q       4Q       3Q       2Q
 (unaudited)                     2007     2007     2006     2006     2006
                               -------- -------  -------- -------- --------
(in thousands, except per
 share data)
Interest, fee and dividend
 income:
Loans and leases               $ 60,689 $59,808  $ 60,795 $ 59,329 $ 57,085
Securities available for sale    13,562  13,467    13,296   13,342   13,084
Securities held to maturity       1,525   1,444     1,409    1,293    1,043
Other                               719     740       517      724      619
                               -------- -------  -------- -------- --------
   Total interest, fee and
    dividend income              76,495  75,459    76,017   74,688   71,831
                               -------- -------  -------- -------- --------
Interest expense:
Deposits                         26,950  25,984    25,652   24,052   20,869
Short-term borrowings             2,918   3,092     3,572    3,828    4,111
Long-term debt                    3,997   4,486     4,091    4,603    4,227
Trust preferred debentures        1,272   1,268     1,277    1,285    1,255
                               -------- -------  -------- -------- --------
   Total interest expense        35,137  34,830    34,592   33,768   30,462
                               -------- -------  -------- -------- --------
Net interest income              41,358  40,629    41,425   40,920   41,369
Provision for loan and lease
 losses                           9,770   2,096     3,484    2,480    1,703
                               -------- -------  -------- -------- --------
Net interest income after
 provision for loan and lease
 losses                          31,588  38,533    37,941   38,440   39,666
                               -------- -------  -------- -------- --------
Noninterest income:
Trust                             1,792   1,437     1,387    1,425    1,459
Service charges on deposit
 accounts                         4,936   4,469     4,418    4,460    4,493
ATM and debit card fees           2,041   1,896     1,764    1,888    1,789
Broker/dealer and insurance
 fees                             1,093   1,083     1,037    1,024      967
Net securities gains (losses)        21      (5)       30        7       22
Bank owned life insurance
 income                             450     434       425      431      392
Retirement plan administration
 fees                             1,601   1,592     1,424    1,450    1,431
Other                             2,058   1,784     1,847    1,832    2,003
                               -------- -------  -------- -------- --------
   Total noninterest income      13,992  12,690    12,332   12,517   12,556
                               -------- -------  -------- -------- --------
Noninterest expense:
Salaries and employee benefits   13,022  15,964    15,166   15,628   16,335
Office supplies and postage       1,334   1,296     1,418    1,275    1,456
Occupancy                         2,585   3,169     2,739    3,044    2,747
Equipment                         1,837   1,933     2,069    2,040    2,067
Professional fees and outside
 services                         1,926   1,658     2,502    1,627    1,800
Data processing and
 communications                   2,845   2,877     2,466    2,637    2,649
Amortization of intangible
 assets                             410     409       389      471      466
Loan collection and other real
 estate owned                       228     377       629      222      289
Other operating                   3,827   3,189     3,504    2,974    3,885
                               -------- -------  -------- -------- --------
   Total noninterest expense     28,014  30,872    30,882   29,918   31,694
                               -------- -------  -------- -------- --------
Income before income taxes       17,566  20,351    19,391   21,039   20,528
Income taxes                      5,502   6,219     5,743    6,497    6,359
                               -------- -------  -------- -------- --------
   Net income                  $ 12,064 $14,132  $ 13,648 $ 14,542 $ 14,169
                               ======== =======  ======== ======== ========
Earnings per share:
   Basic                       $   0.36 $  0.41  $   0.40 $   0.43 $   0.41
   Diluted                     $   0.36 $  0.41  $   0.40 $   0.43 $   0.41
                               ======== =======  ======== ======== ========

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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