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NBT Bancorp Inc. Announces Record Annual Earnings of $1.80 per Diluted Share, Up 19.2% From 2007; Declares Cash Dividend

01/26/09

NORWICH, NY, Jan 26, 2009 (MARKET WIRE via COMTEX News Network) -- NBT Bancorp Inc. (NBT) (NASDAQ: NBTB) reported today that net income for the year ended December 31, 2008 was $58.4 million, up $8.1 million, or 15.9%, from net income of $50.3 million reported in 2007. Net income per diluted share for the year ended December 31, 2008 was $1.80 per share, compared with $1.51 per share for 2007. Return on average assets and return on average equity were 1.11% and 14.16%, respectively, for the year ended December 31, 2008, compared with 0.98% and 12.60%, respectively, for 2007.

Net income for the three months ended December 31, 2008 was $14.9 million, up $5.9 million, or 65.8%, from net income of $9.0 million reported for the same period in 2007. Net income per diluted share for the three months ended December 31, 2008 was $0.45 per share, compared with $0.28 per share for the same period in 2007. Return on average assets and return on average equity were 1.11% and 13.88%, respectively, for the three months ended December 31, 2008, compared with 0.69% and 9.06%, respectively, for the same period in 2007.

NBT President and CEO Martin Dietrich said: "Although 2008 presented many challenges for the financial services industry and the economy in general, I am extremely pleased with the record earnings we achieved in this difficult environment. While the current financial crisis has caused many banks to struggle, we were able to post record diluted earnings per share of $1.80 and record net income of $58.4 million. In addition, the return on our stock, including reinvested dividends, was up over 26% as of December 31, 2008, compared with December 31, 2007. Our strong 2008 performance can be attributed to many factors, including growth in net interest income resulting from strategic management of our earning assets and interest bearing liabilities. Our net interest margin was 3.95% in 2008, compared with 3.61% for 2007. In addition, our efforts to grow our noninterest income resulted in a 20.1% increase over 2007. We have also seen several asset quality indicators improve from 2007. Our nonperforming assets were down approximately 12.8% from 2007, and net charge-offs were down approximately 14.0% from last year. During 2008, we continued our controlled growth initiative by opening three new branches within our footprint. While 2009 may be a very challenging year given the economic environment, I am confident in our ability to successfully navigate through the challenges ahead and deliver long-term value to our shareholders and customers."

Loan and Lease Quality and Provision for Loan and Lease Losses

Nonperforming loans at December 31, 2008 were $26.5 million or 0.73% of total loans and leases compared with $30.6 million or 0.88% at December 31, 2007. The decrease in nonperforming loans at December 31, 2008 from December 31, 2007 was primarily the result of net charge-offs during the 12 month period ending December 31, 2008 related to two large commercial loans, both of which had been previously identified and reserved for in 2007. The allowance for loan and lease losses totaled $58.6 million at December 31, 2008, compared with $54.2 million at December 31, 2007.

The Company recorded a provision for loan and lease losses of $27.2 million for the year ended December 31, 2008, compared with $30.1 million for the 12 months ended December 31, 2007. Net charge-offs totaled $22.8 million for the 12 months ended December 31, 2008, down from $26.5 million for the same period a year ago. The decrease in net charge-offs for the 12 months ended December 31, 2008 was due primarily to charge-offs in 2007 related to one large commercial real estate loan. Net charge-offs to average loans and leases for the 12 months ended December 31, 2008 were 0.64%, compared with 0.77% for the 12 months ended December 31, 2007.

The Company recorded a provision for loan and lease losses of $7.7 million during the fourth quarter of 2008 compared with $13.4 million for the three months ending December 31, 2007. The decrease in the provision for loan and lease losses for the three months ended December 31, 2008, compared with the three months ended December 31, 2007, was due primarily to the provision in the fourth quarter of 2007 related to one large commercial non-real estate loan. Net charge-offs totaled $5.0 million for the three month period ending December 31, 2008, down from $14.1 million for the three months ended December 31, 2007. The decrease in net charge-offs for the three months ended December 31, 2008, compared with the three months ended December 31, 2007, was due primarily to charge-offs in the fourth quarter of 2007 related to the aforementioned commercial real estate loan. Annualized net charge-offs to average loans and leases for the three months ended December 31, 2008 were 0.54%, compared with 1.62% for the three months ended December 31, 2007. The Company's allowance for loan and lease losses was 1.60% of loans and leases at December 31, 2008, compared with 1.57% at December 31, 2007.

Net Interest Income

Net interest income was up 12.7% to $186.0 million for the year ended December 31, 2008, compared with $165.0 million for the year ended December 31, 2007. The Company's fully taxable equivalent (FTE) net interest margin increased from 3.61% for the year ended December 31, 2007 to 3.95% for the year ended December 31, 2008. In addition, the Company experienced a 2.8% growth in average earning assets for the year ended December 31, 2008, compared with the year ended December 31, 2007, due primarily to an increase in average loans and leases. Although the yield on interest earning assets decreased 41 basis points, the yield on interest bearing liabilities declined 88 basis points, which contributed to the increase in the net interest margin from the 12 months ended December 31, 2007. The yield on money market deposit accounts declined from 3.38% for the 12 months ended December 31, 2007 to 1.85% for the 12 months ended December 31, 2008, while the yield on time deposits decreased 86 basis points for the same period. The yield on short term borrowings declined 245 basis points for the 12 months ended December 31, 2008, compared with the 12 months ended December 31, 2007, as a result of the 400 basis point drop in the Federal Reserve's target for the federal funds rate from 4.25% at December 31, 2007 to 0.25% at December 31, 2008.

Net interest income was up 16.9% to $48.9 million for the three months ended December 31, 2008 compared with $41.9 million for the three months ended December 31, 2007. The Company's FTE net interest margin increased from 3.61% for the three months ended December 31, 2007 to 4.06% for the three months ended December 31, 2008. In addition, the Company experienced a 3.7% growth in average earning assets for the three months ending December 31, 2008, compared with the three months ending December 31, 2007, due primarily to an increase in average loans and leases. Although the yield on interest earning assets decreased 51 basis points, the yield on interest bearing liabilities declined 113 basis points, which contributed to the increase in the net interest margin for the three months ended December 31, 2008, compared with the same period for 2007. The yield on money market deposit accounts declined from 3.24% for the three months ended December 31, 2007 to 1.61% for the three months ended December 31, 2008, while the yield on time deposits decreased 124 basis points for the same period. The yield on short term borrowings declined 344 basis points for the three months ended December 31, 2008, compared with the three months ended December 31, 2007, as a result of the aforementioned 400 basis point drop in the Federal Reserve's target for the federal funds rate.

Noninterest Income

Noninterest income for the year ended December 31, 2008 was $71.7 million, up $12.0 million or 20.1% from $59.7 million for the same period in 2007. The increase in noninterest income was due primarily to an increase in service charges on deposit accounts and ATM and debit card fees, which collectively increased $6.0 million due to various initiatives in 2008. In addition, trust administration income increased $0.8 million for the year ended December 31, 2008, compared with the same period in 2007. This increase stems primarily from an increase in customer accounts resulting from successful business development. Broker/dealer and insurance revenue increased approximately $4.5 million for the year ended December 31, 2008, primarily due to the acquisition of Mang Insurance Agency, LLC during the third quarter of 2008. Other noninterest income increased $0.7 million for the year ended December 31, 2008, compared with the same period in 2007. This increase was due primarily to a death benefit realized during the fourth quarter of 2008 from a life insurance policy. Net securities gains for the 12 month period ending December 31, 2008 were $1.5 million, compared with $2.1 million for the 12 month period ending December 31, 2007. Excluding the effects of these securities transactions, noninterest income increased $12.6 million, or 21.9%, for the 12 months ended December 31, 2008, compared with 2007.

Noninterest income for the three months ended December 31, 2008 was $20.2 million, up $3.7 million or 22.7% from $16.5 million for the same period in 2007. The increase in noninterest income was due primarily to an increase in broker/dealer and insurance revenue of approximately $2.9 million for the three month period ended December 31, 2008, due primarily to revenue generated by the aforementioned acquisition of Mang Insurance Agency, LLC. Other noninterest income increased $0.8 million for the three month period ended December 31, 2008, compared with the same period in 2007. This increase was due primarily to the aforementioned death benefit realized during the fourth quarter of 2008 from a life insurance policy. Net securities losses for the three month period ending December 31, 2008 were nominal, compared with $0.6 million in net securities gains during the three month period ending December 31, 2007. Excluding the effects of these securities transactions, noninterest income increased $4.4 million, or 27.5%, for the three months ended December 31, 2008, compared with the same period in 2007.

Noninterest Expense and Income Tax Expense

Noninterest expense for the year ended December 31, 2008 was $146.8 million, up from $122.5 million for the same period in 2007. Salaries and employee benefits increased $11.6 million, or 19.6%, for the year ended December 31, 2008, compared with the same period in 2007. This increase was due primarily to increases in full time equivalent employees during 2008 and reduced levels of incentive compensation in 2007 compared with 2008. The increase in full time equivalent employees was largely due to new branch activity and the aforementioned acquisition. Occupancy, equipment and data processing and communications expenses were $34.0 million for the year ended December 31, 2008, up $3.5 million, or 11.7%, from $30.5 million for the year ended December 31, 2007. This increase was due primarily to an increase in expenses related to new branch activity during the past year. Professional fees and outside services increased $1.3 million for the year ended December 31, 2008, compared with the same period in 2007, due primarily to increases in legal and audit fees incurred in 2008, as well as increases in fees related to the aforementioned noninterest income initiatives. Loan collection and other real estate owned expenses were $2.5 million for the year ended December 31, 2008, up from $1.6 million for same period in 2007. The Company recorded an other than temporary impairment charge on lease residual assets totaling $2.0 million during the third quarter of 2008 as a result of declines in the fair value of lease residual assets associated with certain leased vehicles. Other operating expenses were $19.2 million for the year ended December 31, 2008, up $4.2 million from $15.0 million for the year ended December 31, 2007. This increase resulted primarily from losses incurred from sales of certain returned lease vehicles totaling approximately $1.4 million during the period due to reduced values of those vehicles. In addition, Federal Deposit Insurance Corporation ("FDIC") insurance premiums increased approximately $1.4 million for the year ended December 31, 2008, compared with the same period in 2007. Income tax expense for the year ended December 31, 2008 was $25.4 million, up from $21.8 million for the same period in 2007. The effective rates were 30.3% and 30.2% for the years ended December 31, 2008 and 2007, respectively.

Noninterest expense for the three months ended December 31, 2008 was $40.3 million, up from $32.4 million for the same period in 2007. Salaries and employee benefits increased $6.0 million, or 40.8%, for the three months ended December 31, 2008, compared with the same period in 2007. This increase was due primarily to increases in full time equivalent employees during 2008 and reduced levels of incentive compensation in 2007. Occupancy, equipment and data processing and communications expenses were $8.6 million for the three months ended December 31, 2008, up $0.9 million, or 11.4%, from $7.7 million for the three months ended December 31, 2007. This increase was due primarily to an increase in expenses related to the aforementioned branch openings. Other operating expenses were $5.5 million for the three months ended December 31, 2008, up $0.9 million from $4.6 million for the three months ended December 31, 2007. This increase resulted primarily from an increase in FDIC insurance premiums of approximately $0.7 million for the three month period ending December 31, 2008, compared with the same period in 2007. Income tax expense for the three month period ended December 31, 2008 was $6.2 million, up from $3.5 million for the same period in 2007. The effective rates were 29.5% and 28.1% for the three month periods ended December 31, 2008 and 2007, respectively.

Balance Sheet

Total assets were $5.3 billion at December 31, 2008, up $134.3 million or 2.6% from $5.2 billion at December 31, 2007. Loans and leases were $3.7 billion at December 31, 2008, up $196.1 million or 5.7% from $3.5 billion at December 31, 2007. The increase in loans and leases at December 31, 2008, compared with December 31, 2007, was due in large part to an increase in consumer loans of approximately $186.5 million. Total deposits were $3.9 billion at December 31, 2008, up $51.2 million or 1.3% from December 31, 2007. The increase from December 31, 2007 was due in large part to a $271.3 million, or 16.8%, increase in NOW, savings and money market accounts, partially offset by a $238.9 million decrease in time deposits. Stockholders' equity was $431.8 million, representing a total equity to total assets ratio of 8.09% at December 31, 2008, compared with $397.3 million or a total equity to total assets ratio of 7.64% at December 31, 2007.

Stock Repurchase Program

Under previously disclosed stock repurchase plans, the Company purchased 272,840 shares of its common stock during the year ended December 31, 2008, for a total of $5.9 million at an average price of $21.77 per share. There were no shares purchased during the three month period ended December 31, 2008. At December 31, 2008, there were 1,203,040 shares available for repurchase under previously announced plans.

Dividend Declared

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

2009 Outlook

While the Company reported record earnings for 2008, it anticipates that current global economic conditions and challenges in the financial services industry may negatively impact earnings in 2009. In particular, the Company currently expects that in 2009:

  • premiums paid to the Federal Deposit Insurance Corporation will increase significantly;
  • pension and postretirement expenses will increase significantly;
  • revenue from Federal Home Loan Bank dividends may decrease significantly;
  • payments representing interest and principal on currently outstanding loans and investments will most likely be reinvested at rates that are lower than the rates on currently outstanding loans and investments; and
  • the economy may have an adverse affect on asset quality indicators and the provision for loan and lease losses, and therefore credit costs, which have trended higher in recent years are not expected to decline until economic indicators improve.

Due to current uncertainty in economic conditions and the financial services industry in general, it is particularly difficult to estimate certain revenues, expenses and other related matters. There may be factors in addition to those identified above that impact 2009 results. For a discussion of risks and uncertainties that could impact the Company's future results, see "Risk Factors" in the Company's Annual Report on Form 10-K for the year ended December 31, 2007 and its Quarterly Report on Form 10-Q for the quarter ended September 30, 2008.

Corporate Overview

NBT Bancorp, Inc. is a financial holding company headquartered in Norwich, NY, with total assets of $5.4 billion at December 31, 2008. The company primarily operates through NBT Bank, N.A., a full-service community bank with two divisions, and through three financial services companies. NBT Bank, N.A. has 122 locations, including 84 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. 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.hathawayagency.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
                        2008            2007           Change      Change
                   --------------  --------------  --------------  -------
                   (dollars in thousands, except
                          per share data)
Three Months Ended
 December 31,
Net Income         $       14,897  $        8,985  $        5,912       66%
Diluted Earnings
 Per Share         $         0.45  $         0.28  $         0.17       61%
Weighted Average
 Diluted
  Common Shares
   Outstanding         32,758,405      32,398,179         360,226        1%
Return on Average
 Assets (1)                  1.11%           0.69%           0.42%      61%
Return on Average
 Equity (1)                 13.88%           9.06%           4.82%      53%
Net Interest
 Margin (2)                  4.06%           3.61%           0.45%      12%
                   ==============  ==============  ==============  =======
Twelve Months
 Ended December
 31,
Net Income         $       58,353  $       50,328  $        8,025       16%
Diluted Earnings
 Per Share         $         1.80  $         1.51  $         0.29       19%
Weighted Average
 Diluted
  Common Shares
   Outstanding         32,427,193      33,421,078        -993,885       -3%
Return on Average
 Assets                      1.11%           0.98%           0.13%      13%
Return on Average
 Equity                     14.16%          12.60%           1.56%      12%
Net Interest
 Margin (2)                  3.95%           3.61%           0.34%       9%
                   ==============  ==============  ==============  =======
Asset Quality        December 31,    December 31,
                         2008            2007
                   --------------  --------------
Nonaccrual Loans   $       24,191  $       29,697
90 Days Past Due
 and Still
 Accruing          $        2,305  $          882
Total
 Nonperforming
 Loans             $       26,496  $       30,579
Other Real Estate
 Owned             $          665  $          560
Total
 Nonperforming
 Assets            $       27,161  $       31,139
Past Due Loans     $       33,098  $       25,914
Allowance for Loan
 and Lease Losses  $       58,564  $       54,183
Year-to-Date (YTD)
 Net Charge-Offs   $       22,800  $       26,498
Allowance for Loan
 and Lease Losses
 to Total Loans
 and Leases                  1.60%           1.57%
Total
 Nonperforming
 Loans to Total
 Loans and Leases            0.73%           0.88%
Total
 Nonperforming
 Assets to Total
 Assets                      0.51%           0.60%
Past Due Loans to
 Total Loans and
 Leases                      0.91%           0.75%
Allowance for Loan
 and Lease Losses
 to Total
 Nonperforming
 Loans                     221.03%         177.19%
Net Charge-Offs to
 YTD Average Loans
 and Leases                  0.64%           0.77%
                   ==============  ==============  ==============  =======
Capital
Equity to Assets             8.09%           7.64%
Book Value Per
 Share             $        13.24  $        12.29
Tangible Book
 Value Per Share   $         9.01  $         8.78
Tier 1 Leverage
 Ratio                       7.17%           7.14%
Tier 1 Capital
 Ratio                       9.75%           9.85%
Total Risk-Based
 Capital Ratio              11.00%          11.10%
                   ==============  ==============  ==============  =======
                   --------------  --------------  --------------
Quarterly Common
 Stock Price            2008            2007            2006
Quarter End         High     Low    High     Low    High     Low
                   ------  ------  ------  ------  ------  ------
March 31           $23.65  $17.95  $25.81  $21.73  $23.90  $21.02
June 30             25.00   20.33   23.45   21.80   23.24   21.03
September 30        36.47   19.05   23.80   17.10   24.57   21.44
December 31         30.83   21.71   25.00   20.58   26.47   22.36
                   --------------  --------------  --------------
(1)  Annualized
(2)  Calculated on a FTE basis
                    NBT Bancorp Inc. and Subsidiaries
                      SELECTED FINANCIAL HIGHLIGHTS
                                (unaudited)
                                                           Net     Percent
                                  2008        2007       Change    Change
                               ----------- ----------- ----------  -------
                               (dollars in thousands,
                               except per share data)
Balance Sheet as of December
 31,
Loans and Leases               $ 3,651,911 $ 3,455,851 $  196,060        6%
Earning Assets                 $ 4,933,099 $ 4,783,519 $  149,580        3%
Total Assets                   $ 5,336,088 $ 5,201,776 $  134,312        3%
Deposits                       $ 3,923,258 $ 3,872,093 $   51,165        1%
Stockholders' Equity           $   431,845 $   397,300 $   34,545        9%
                               =========== =========== ==========  =======
Average Balances
Three Months Ended December
 31,
Loans and Leases               $ 3,634,346 $ 3,441,150 $  193,196        6%
Securities Available For Sale
(excluding unrealized gains or
 losses)                       $ 1,117,469 $ 1,144,639 $  (27,170)      -2%
Securities Held To Maturity    $   140,141 $   143,999 $   (3,858)      -3%
Regulatory Equity Investment   $    39,751 $    35,073 $    4,678       13%
Short-Term Interest Bearing
 Accounts                      $    17,151 $     8,015 $    9,136      114%
Total Earning Assets           $ 4,948,858 $ 4,772,876 $  175,982        4%
Total Assets                   $ 5,349,609 $ 5,148,099 $  201,510        4%
Interest Bearing Deposits      $ 3,267,893 $ 3,273,248 $   (5,355)       0%
Non-Interest Bearing Deposits  $   695,696 $   656,784 $   38,912        6%
Short-Term Borrowings          $   181,032 $   282,296 $ (101,264)     -36%
Long-Term Borrowings           $   708,867 $   477,190 $  231,677       49%
Total Interest Bearing
 Liabilities                   $ 4,157,792 $ 4,032,734 $  125,058        3%
Stockholders' Equity           $   426,918 $   393,333 $   33,585        9%
                               =========== =========== ==========  =======
Average Balances
Twelve Months Ended December
 31,
Loans and Leases               $ 3,567,299 $ 3,425,318 $  141,981        4%
Securities Available For Sale
(excluding unrealized gains or
 losses)                       $ 1,113,810 $ 1,134,837 $  (21,027)      -2%
Securities Held To Maturity    $   149,775 $   144,518 $    5,257        4%
Regulatory Equity Investment   $    39,735 $    34,022 $    5,713       17%
Short-Term Interest Bearing
 Accounts                      $     9,190 $     8,395 $      795        9%
Total Earning Assets           $ 4,879,809 $ 4,747,090 $  132,719        3%
Total Assets                   $ 5,264,655 $ 5,109,587 $  155,068        3%
Interest Bearing Deposits      $ 3,239,029 $ 3,273,332 $  (34,303)      -1%
Non-Interest Bearing Deposits  $   682,656 $   639,423 $   43,233        7%
Short-Term Borrowings          $   223,830 $   280,162 $  (56,332)     -20%
Long-Term Borrowings           $   638,882 $   459,439 $  179,443       39%
Total Interest Bearing
 Liabilities                   $ 4,101,741 $ 4,012,933 $   88,808        2%
Stockholders' Equity           $   412,102 $   399,299 $   12,803        3%
                               =========== =========== ==========  =======
NBT Bancorp Inc. and Subsidiaries                 December 31, December 31,
Consolidated Balance Sheets (unaudited)               2008         2007
                                                  ------------ ------------
(in thousands)
ASSETS
Cash and due from banks                           $    107,409 $    155,495
Short term interest bearing accounts                     2,987        7,451
Securities available for sale, at fair value         1,119,665    1,132,230
Securities held to maturity (fair value of
 $141,308 and $149,519 at December 31, 2008
   and December 31, 2007, respectively)                140,209      149,111
Federal Reserve and Federal Home Loan Bank stock        39,045       38,102
Loans and leases                                     3,651,911    3,455,851
Less allowance for loan and lease losses                58,564       54,183
                                                  ============ ============
  Net loans and leases                               3,593,347    3,401,668
Premises and equipment, net                             65,241       64,042
Goodwill                                               114,838      103,398
Intangible assets, net                                  23,367       10,173
Bank owned life insurance                               46,030       43,614
Other assets                                            83,950       96,492
                                                  ------------ ------------
TOTAL ASSETS                                      $  5,336,088 $  5,201,776
                                                  ============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits:
  Demand (noninterest bearing)                    $    685,495 $    666,698
  Savings, NOW, and money market                     1,885,551    1,614,289
  Time                                               1,352,212    1,591,106
                                                  ------------ ------------
    Total deposits                                   3,923,258    3,872,093
Short-term borrowings                                  206,492      368,467
Long-term debt                                         632,209      424,887
Trust preferred debentures                              75,422       75,422
Other liabilities                                       66,862       63,607
                                                  ------------ ------------
    Total liabilities                                4,904,243    4,804,476
Total stockholders' equity                             431,845      397,300
                                                  ============ ============
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY        $  5,336,088 $  5,201,776
                                                  ============ ============
                                    Three months ended  Twelve months ended
NBT Bancorp Inc. and Subsidiaries      December 31,        December 31,
Consolidated Statements of Income
 (unaudited)                          2008      2007      2008      2007
                                    --------  --------- --------- ---------
(in thousands, except per share
 data)
Interest, fee and dividend income:
Loans and leases                    $ 58,164  $  60,817 $ 232,155 $ 242,497
Securities available for sale         13,434     13,971    54,048    54,847
Securities held to maturity            1,253      1,458     5,588     5,898
Other                                    436        736     2,623     2,875
                                    --------  --------- --------- ---------
  Total interest, fee and dividend
   income                             73,287     76,982   294,414   306,117
                                    --------  --------- --------- ---------
Interest expense:
Deposits                              16,371     26,578    76,132   106,574
Short-term borrowings                    382      3,048     4,847    12,943
Long-term debt                         6,401      4,233    22,642    16,486
Trust preferred debentures             1,200      1,270     4,747     5,087
                                    --------  --------- --------- ---------
  Total interest expense              24,354     35,129   108,368   141,090
                                    --------  --------- --------- ---------
Net interest income                   48,933     41,853   186,046   165,027
Provision for loan and lease losses    7,721     13,440    27,181    30,094
                                    --------  --------- --------- ---------
Net interest income after provision
 for loan and lease losses            41,212     28,413   158,865   134,933
                                    --------  --------- --------- ---------
Noninterest income:
Trust                                  1,685      1,584     7,278     6,514
Service charges on deposit accounts    7,266      7,142    28,143    22,742
ATM and debit card fees                2,176      2,089     8,832     8,185
Broker/dealer and insurance revenue    3,915      1,052     8,726     4,255
Net securities (losses) gains             (8)       613     1,535     2,113
Bank owned life insurance income         993        480     2,416     1,831
Retirement plan administration fees    1,468      1,557     6,308     6,336
Other                                  2,735      1,973     8,468     7,723
                                    --------  --------- --------- ---------
  Total noninterest income            20,230     16,490    71,706    59,699
                                    --------  --------- --------- ---------
Noninterest expense:
Salaries and employee benefits        20,633     14,654    71,159    59,516
Office supplies and postage            1,354      1,136     5,346     5,120
Occupancy                              3,385      2,948    13,781    11,630
Equipment                              1,944      1,855     7,539     7,422
Professional fees and outside
 services                              2,651      3,295    10,476     9,135
Data processing and communications     3,254      2,899    12,694    11,400
Amortization of intangible assets        874        413     2,105     1,645
Loan collection and other real
 estate owned                            692        597     2,494     1,633
Impairment on lease residual assets        -          -     2,000         -
Other operating                        5,511      4,607    19,219    15,016
                                    --------  --------- --------- ---------
  Total noninterest expense           40,298     32,404   146,813   122,517
                                    --------  --------- --------- ---------
Income before income taxes            21,144     12,499    83,758    72,115
Income taxes                           6,247      3,514    25,405    21,787
                                    --------  --------- --------- ---------
   Net income                       $ 14,897  $   8,985 $  58,353 $  50,328
                                    --------  --------- --------- ---------
Earnings Per Share:
     Basic                          $   0.46  $    0.28 $    1.81 $    1.52
     Diluted                        $   0.45  $    0.28 $    1.80 $    1.51
                                    ========  ========= ========= =========
NBT Bancorp Inc. and Subsidiaries
Quarterly Consolidated
 Statements of Income        4Q        3Q        2Q        1Q        4Q
 (unaudited)                2008      2008      2008      2008      2007
                          --------  --------- --------- --------- ---------
(in thousands, except per
 share data)
Interest, fee and
 dividend income:
Loans and leases          $ 58,164  $  58,154 $  57,220 $  58,617 $  60,817
Securities available for
 sale                       13,434     13,451    13,417    13,746    13,971
Securities held to
 maturity                    1,253      1,343     1,478     1,514     1,458
Other                          436        673       739       775       736
                          --------  --------- --------- --------- ---------
  Total interest, fee and
   dividend income          73,287     73,621    72,854    74,652    76,982
                          --------  --------- --------- --------- ---------
Interest expense:
Deposits                    16,371     18,351    18,712    22,698    26,578
Short-term borrowings          382        763     1,362     2,340     3,048
Long-term debt               6,401      6,310     5,629     4,302     4,233
Trust preferred
 debentures                  1,200      1,154     1,146     1,247     1,270
                          --------  --------- --------- --------- ---------
  Total interest expense    24,354     26,578    26,849    30,587    35,129
                          --------  --------- --------- --------- ---------
Net interest income         48,933     47,043    46,005    44,065    41,853
Provision for loan and
 lease losses                7,721      7,179     5,803     6,478    13,440
                          --------  --------- --------- --------- ---------
Net interest income after
 provision for loan and
 lease losses               41,212     39,864    40,202    37,587    28,413
                          --------  --------- --------- --------- ---------
Noninterest income:
Trust                        1,685      1,720     2,099     1,774     1,584
Service charges on
 deposit accounts            7,266      7,414     6,938     6,525     7,142
ATM and debit card fees      2,176      2,334     2,225     2,097     2,089
Broker/dealer and
 insurance fees              3,915      2,338     1,366     1,107     1,052
Net securities (losses)
 gains                          (8)     1,510        18        15       613
Bank owned life insurance
 income                        993        491       480       452       480
Retirement plan
 administration fees         1,468      1,461     1,671     1,708     1,557
Other                        2,735      1,694     1,622     2,417     1,973
                          --------  --------- --------- --------- ---------
  Total noninterest
   income                   20,230     18,962    16,419    16,095    16,490
                          --------  --------- --------- --------- ---------
Noninterest expense:
Salaries and employee
 benefits                   20,633     16,850    16,906    16,770    14,654
Office supplies and
 postage                     1,354      1,322     1,331     1,339     1,136
Occupancy                    3,385      3,359     3,427     3,610     2,948
Equipment                    1,944      1,908     1,862     1,825     1,855
Professional fees and
 outside services            2,651      2,205     2,521     3,099     3,295
Data processing and
 communications              3,254      3,155     3,115     3,170     2,899
Amortization of
 intangible assets             874        462       378       391       413
Loan collection and other
 real estate owned             692        505       730       567       597
Impairment on lease
 residual assets                 -      2,000         -         -         -
Other operating              5,511      5,292     5,153     3,263     4,607
                          --------  --------- --------- --------- ---------
  Total noninterest
   expense                  40,298     37,058    35,423    34,034    32,404
                          --------  --------- --------- --------- ---------
Income before income
 taxes                      21,144     21,768    21,198    19,648    12,499
Income taxes                 6,247      6,685     6,541     5,932     3,514
                          --------  --------- --------- --------- ---------
   Net income             $ 14,897  $  15,083 $  14,657 $  13,716 $   8,985
                          ========  ========= ========= ========= =========
Earnings per share:
   Basic                  $   0.46  $    0.47 $    0.46 $    0.43 $    0.28
   Diluted                $   0.45  $    0.46 $    0.45 $    0.43 $    0.28
                          ========  ========= ========= ========= =========

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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