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NBT Bancorp Inc. Announces Second Quarter Earnings of $0.42 per Diluted Share, Up 24% From Last Year; Declares Cash Dividend

07/26/10

NORWICH, NY, Jul 26, 2010 (MARKETWIRE via COMTEX) --

NBT Bancorp Inc. (NBT) (NASDAQ: NBTB) reported today net income per diluted share for the three months ended June 30, 2010 of $0.42, as compared with $0.34 per share for the three months ended June 30, 2009. Annualized return on average assets and return on average equity were 1.06% and 11.09%, respectively, for the three months ended June 30, 2010, compared with 0.85% and 9.63%, respectively, for the three months ended June 30, 2009. Net interest margin (on a fully taxable equivalent basis ("FTE")) was 4.14% for the three months ended June 30, 2010, up 19 basis points ("bp") from 3.95% for the three months ended June 30, 2009. Net income for the three months ended June 30, 2010 was $14.4 million, up $2.8 million, or 24.8%, from $11.6 million for the second quarter last year.

Net income per diluted share for the six months ended June 30, 2010 was $0.82 per share, as compared with $0.74 per share for the six months ended June 30, 2009. Annualized return on average assets and return on average equity were 1.04% and 11.07%, respectively, for the six months ended June 30, 2010, compared with 0.92% and 10.82%, respectively, for the six months ended June 30, 2009. FTE net interest margin was 4.17% for the six months ended June 30, 2010, up 15 bp from 4.02% for the six months ended June 30, 2009. Net income for the six months ended June 30, 2010 was $28.4 million, up $3.8 million, or 15.3%, from the six months ended June 30, 2009.

NBT President and CEO Martin Dietrich said: "We are very pleased with our financial performance during the second quarter of 2010. Especially encouraging is our nearly 25% gain in net income from the same quarter last year. We are also encouraged by the continuing improvement in our asset quality. While the economy remains challenging, we believe we are well positioned in terms of our performance and strategic investments for future growth."

Loan and Lease Quality and Provision for Loan and Lease Losses

Nonperforming loans at June 30, 2010 were $39.2 million or 1.07% of total loans and leases compared with $40.8 million or 1.12% at March 31, 2010. Past due loans as a percentage of total loans has improved to 0.82% at June 30, 2010, as compared with 0.87% at March 31, 2010.

The allowance for loan and lease losses totaled $70.3 million at June 30, 2010 as compared with $70.2 million at March 31, 2010. The allowance for loan and lease losses as a percentage of loans and leases remained at 1.93% at June 30, 2010 as compared to March 31, 2010. Certain asset quality indicators such as nonperforming loans and past due loans have shown some encouraging trends, while potential problem loans have increased slightly from $82.4 million at March 31, 2010 to $87.7 million at June 30, 2010. The increase in potential problems loans was due primarily to the migration of four commercial loans to classified status, partially offset by a decrease in nonperforming loans. If these indicators continue to improve, it could result in a decrease in provisions for loan and lease losses in future periods.

The Company recorded a provision for loan and lease losses of $6.4 million during the second quarter of 2010, consistent with net charge-offs during the period of $6.2 million. The Company recorded a provision for loan and lease losses of $9.2 million during the second quarter of 2009, as compared with net charge-offs during the period of $5.8 million.

The Company recorded a provision for loan and lease losses of $15.6 million during the six months ended June 30, 2010, as compared with net charge-offs during the period of $11.8 million. The Company recorded a provision for loan and lease losses of $15.7 million during the six months ended June 30, 2009, as compared with net charge-offs during the period of $11.5 million.

Net Interest Income

Net interest income was up 5.3% to $50.6 million for the three months ended June 30, 2010 compared with $48.1 million for the three months ended June 30, 2009. The Company's fully taxable equivalent (FTE) net interest margin was 4.14% for the three months ended June 30, 2010, as compared with 3.95% for the three months ended June 30, 2009.

While the yield on interest earning assets decreased 31 basis points, the yield on interest bearing liabilities declined 58 basis points, which resulted in an increase in the net interest margin for the three months ended June 30, 2010 compared to the same period for 2009. The yield on securities available for sale was 3.70% for the three months ended June 30, 2010, as compared with 4.59% for the three months ended June 30, 2009. The yield on loans and leases was 5.92% for the three months ended June 30, 2010, as compared with 6.05% for the three months ended June 30, 2009. The yield on time deposits was 2.12% for the three months ended June 30, 2010, as compared with 2.72% for the three months ended June 30, 2009. The yield on money market deposit accounts was 0.62% for the three months ended June 30, 2010, as compared with 1.33% for the three months ended June 30, 2009.

Net interest income was up 5.4% to $101.4 million for the six months ended June 30, 2010 compared with $96.2 million for the six months ended June 30, 2009. The Company's fully taxable equivalent (FTE) net interest margin was 4.17% for the six months ended June 30, 2010, as compared with 4.02% for the six months ended June 30, 2009. The Company experienced a 77.9% growth in average short-term interest bearing accounts for the six months ending June 30, 2010 as compared with the six months ending June 30, 2009. 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 six months ended June 30, 2010 as compared to the six months ended June 30, 2009.

While the yield on interest earning assets decreased 38 basis points, the yield on interest bearing liabilities declined 61 basis points, which resulted in an increase in the net interest margin for the six months ended June 30, 2010 compared to the same period for 2009. The yield on securities available for sale was 3.86% for the six months ended June 30, 2010, as compared with 4.74% for the six months ended June 30, 2009. The yield on loans and leases was 5.96% for the six months ended June 30, 2010, as compared with 6.11% for the six months ended June 30, 2009. The yield on time deposits was 2.16% for the six months ended June 30, 2010, as compared with 2.84% for the six months ended June 30, 2009. The yield on money market deposit accounts was 0.66% for the six months ended June 30, 2010, as compared with 1.34% for the six months ended June 30, 2009.

Noninterest Income

Noninterest income for the three months ended June 30, 2010 was $20.3 million, up $0.5 million or 2.4% from $19.8 million for the same period in 2009. The increase in noninterest income was due primarily to an increase in other financial services revenue of approximately $0.5 million for the three months ended June 30, 2010 as compared to the same period in 2009. Retirement plan administration fees increased approximately $0.4 million for the three month period ended June 30, 2010 as compared with the three month period ended June 30, 2009 as a result of organic growth. In addition, trust revenue increased approximately $0.1 million for the three months ended June 30, 2010 as compared to the same period in 2009 due primarily to an increase in fair value of trust assets under administration. These increases were partially offset by a decrease in service charges on deposit accounts of approximately $0.6 million due primarily to a decrease in overdraft activity in the second quarter of 2010 as compared with the second quarter of 2009.

Noninterest income for the six months ended June 30, 2010 was $40.7 million, up $1.3 million or 3.1% from $39.4 million for the same period in 2009. The increase in noninterest income was due primarily to an increase in retirement plan administration fees of approximately $1.1 million for the six month period ended June 30, 2010 as compared with the six month period ended June 30, 2009 as a result of organic growth. Trust revenue increased approximately $0.5 million for the six months ended June 30, 2010 as compared to the same period in 2009 due primarily to an increase in fair value of trust assets under administration. In addition, other financial services revenue increased approximately $0.4 million for the six months ended June 30, 2010 as compared to the same period in 2009. These increases were partially offset by a decrease in service charges on deposit accounts of approximately $0.8 million due primarily to a decrease in overdraft activity in the first six months of 2010 as compared with the first six months of 2009.

Noninterest Expense and Income Tax Expense

Noninterest expense for the three months ended June 30, 2010 was $44.2 million, up from $41.9 million, or 5.4%, for the same period in 2009. Salaries and employee benefits increased $4.3 million, or 21.4%, for the three months ended June 30, 2010 compared with the same period in 2009. This increase was due primarily to increases in full-time-equivalent employees, merit increases and other employee benefits. Other operating expenses increased approximately $0.7 million, or 18.0%, for the three month period ended June 30, 2010 as compared with the three months ended June 30, 2009. The 2009 expense was lower due to the settlement of a lease residual insurance policy for $1.2 million. These increases were partially offset by a decrease in FDIC expenses of approximately $2.5 million for the three month period ended June 30, 2010, as compared with the three months ended June 30, 2009. This decrease resulted from the special assessment levied by the FDIC in the second quarter of 2009. Income tax expense for the three month period ended June 30, 2010 was $6.0 million, up from $5.2 million for the same period in 2009.

Noninterest expense for the six months ended June 30, 2010 was $86.4 million, up from $84.2 million for the same period in 2009. Salaries and employee benefits increased $5.1 million, or 12.2%, for the six months ended June 30, 2010 compared with the same period in 2009. This increase was due primarily to increases in full-time-equivalent employees, merit increases and other employee benefits. Loan collection and other real estate owned expenses increased approximately $0.3 million, or 21.4%, for the six month period ended June 30, 2010 as compared with the six months ended June 30, 2009. This increase was due to higher property taxes paid by the Company on collateral securing certain loans during the six month period ending June 30, 2010. These increases were partially offset by a decrease in FDIC expenses of approximately $2.4 million for the six month period ended June 30, 2010, as compared with the six months ended June 30, 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 $0.7 million, or 12.8%, for the six month period ended June 30, 2010 as compared with the six months ended June 30, 2009. This decrease was due to legal fees incurred during the second quarter of 2009 related to de novo branch activity. Income tax expense for the six month period ended June 30, 2010 was $11.7 million, up from $11.1 million for the same period in 2009.

Balance Sheet

Total assets were $5.4 billion at June 30, 2010, down $48.9 million or 0.9% from December 31, 2009. Loans and leases were $3.6 billion at June 30, 2010, up $2.0 million from December 31, 2009. Total deposits were $4.1 billion at June 30, 2010, up $8.3 million from December 31, 2009. Stockholders' equity was $527.0 million, representing a total equity-to-total assets ratio of 9.73% at June 30, 2010, compared with $505.1 million or a total equity-to-total assets ratio of 9.24% at December 31, 2009.

Stock Repurchase Program

The Company made no purchases of its common stock securities during the six month period ending June 30, 2010. At June 30, 2010, there were 1,000,000 shares available for repurchase under a 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 2010 third-quarter cash dividend of $0.20 per share at a meeting held today. The dividend will be paid on September 15, 2010 to shareholders of record as of September 1, 2010.

Corporate Overview

NBT Bancorp Inc. is a financial holding company headquartered in Norwich, NY, with total assets of $5.4 billion at June 30, 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 123 locations, including 85 NBT Bank offices in upstate New York, 37 Pennstar Bank offices in northeastern Pennsylvania and one office in Burlington, Vermont. EPIC Advisors, Inc., based in Rochester, NY, is a full-service 401(k) plan recordkeeping firm. Mang Insurance Agency, LLC, based in 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 June 30,
Net Income                  $     14,424  $     11,560  $   2,864       25%
Diluted Earnings Per Share  $       0.42  $       0.34  $    0.08       24%
Weighted Average Diluted
  Common Shares Outstanding   34,565,005    34,314,291    250,714        1%
Return on Average Assets
 (1)                                1.06%         0.85%     21 bp       25%
Return on Average Equity
 (1)                               11.09%         9.63%    146 bp       15%
Net Interest Margin (2)             4.14%         3.95%     19 bp        5%
                            ============  ============  ========= ========
Six Months Ended June 30,
Net Income                  $     28,400  $     24,632  $   3,768       15%
Diluted Earnings Per Share  $       0.82  $       0.74  $    0.08       11%
Weighted Average Diluted
  Common Shares Outstanding   34,485,201    33,483,222  1,001,979        3%
Return on Average Assets            1.04%         0.92%     12 bp       13%
Return on Average Equity           11.07%        10.82%     25 bp        2%
Net Interest Margin (2)             4.17%         4.02%     15 bp        4%
                            ============  ============  ========= ========
Asset Quality                 June 30,     December 31,
                                2010          2009
                            ------------  ------------
Nonaccrual Loans            $     37,508  $     38,746
90 Days Past Due and Still
 Accruing                   $      1,684  $      2,526
Total Nonperforming Loans   $     39,192  $     41,272
Other Real Estate Owned     $      1,466  $      2,358
Total Nonperforming Assets  $     40,658  $     43,630
Past Due Loans              $     29,776  $     32,349
Potential Problem Loans     $     87,744  $     79,072
Allowance for Loan and
 Lease Losses               $     70,300  $     66,550
Allowance for Loan and
 Lease Losses to Total
 Loans and Leases                   1.93%         1.83%
Total Nonperforming Loans
 to Total Loans and Leases          1.07%         1.13%
Total Nonperforming Assets
 to Total Assets                    0.75%         0.80%
Past Due Loans to Total
 Loans and Leases                   0.82%         0.89%
Allowance for Loan and
 Lease Losses to Total
 Nonperforming Loans              179.37%       161.25%
Net Charge-Offs to YTD
 Average Loans and Leases           0.66%         0.70%
                            ============  ============
Capital
Equity to Assets                    9.73%         9.24%
Book Value Per Share        $      15.28  $      14.69
Tangible Book Value Per
 Share                      $      11.40  $      10.75
Tier 1 Leverage Ratio               8.75%         8.35%
Tier 1 Capital Ratio               11.88%        11.34%
Total Risk-Based Capital
 Ratio                             13.14%        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                              24.16  20.57
December 31                               23.59  19.43
                           ------------- -------------
(1)  Annualized
(2)  Calculated on a FTE basis
                    NBT Bancorp Inc. and Subsidiaries
                      SELECTED FINANCIAL HIGHLIGHTS
                                (unaudited)
                               June 30,   December 31,    Net     Percent
                                 2010        2009       Change     Change
                              ----------- ----------- ----------  --------
                              (dollars in thousands,
                              except per share data)
Balance Sheet
Loans and Leases              $ 3,647,445 $ 3,645,398 $    2,047         0%
Earning Assets                $ 4,968,203 $ 5,009,251 $  (41,048)       -1%
Total Assets                  $ 5,415,161 $ 5,464,026 $  (48,865)       -1%
Deposits                      $ 4,101,331 $ 4,093,046 $    8,285         0%
Stockholders' Equity          $   527,022 $   505,123 $   21,899         4%
                              =========== =========== ==========  ========
                                  2010       2009
                              ----------- ----------- ----------
Average Balances              (dollars in thousands,
                              except per share data)
Three Months Ended June 30,
Loans and Leases              $ 3,640,915 $ 3,653,166 $  (12,251)
Securities Available For Sale
(excluding unrealized gains or
 losses)                      $ 1,114,315 $ 1,085,147 $   29,168
Securities Held To Maturity   $   148,568 $   138,180 $   10,388
Trading Securities            $     2,605 $     1,854 $      751
Federal Reserve and Federal
 Home Loan Bank stock         $    33,199 $    38,221 $   (5,022)
Short-Term Interest Bearing
 Accounts                     $   106,784 $   126,318 $  (19,534)
Total Earning Assets          $ 5,043,781 $ 5,041,032 $    2,749
Total Assets                  $ 5,482,336 $ 5,448,440 $   33,896
Interest Bearing Deposits     $ 3,372,297 $ 3,381,288 $   (8,991)
Non-Interest Bearing Deposits $   779,841 $   707,022 $   72,819
Short-Term Borrowings         $   151,985 $   120,272 $   31,713
Long-Term Borrowings          $   577,179 $   684,495 $ (107,316)
Total Interest Bearing
 Liabilities                  $ 4,101,461 $ 4,186,055 $  (84,594)
Stockholders' Equity          $   521,632 $   481,308 $   40,324
                              =========== =========== ==========
Average Balances
Six Months Ended June 30,
Loans and Leases              $ 3,640,528 $ 3,655,909 $  (15,381)
Securities Available For Sale
(excluding unrealized gains or
 losses)                      $ 1,101,530 $ 1,087,317 $   14,213
Securities Held To Maturity   $   152,164 $   138,439 $   13,725
Trading Securities            $     2,517 $     1,644 $      873
Federal Reserve and Federal
 Home Loan Bank stock         $    33,959 $    38,535 $   (4,576)
Short-Term Interest Bearing
 Accounts                     $   115,354 $    64,843 $   50,511
Total Earning Assets          $ 5,043,535 $ 4,985,043 $   58,492
Total Assets                  $ 5,485,920 $ 5,400,226 $   85,694
Interest Bearing Deposits     $ 3,374,231 $ 3,347,130 $   27,101
Non-Interest Bearing Deposits $   769,744 $   694,001 $   75,743
Short-Term Borrowings         $   154,605 $   134,282 $   20,323
Long-Term Borrowings          $   589,396 $   695,517 $ (106,121)
Total Interest Bearing
 Liabilities                  $ 4,118,232 $ 4,176,929 $  (58,697)
Stockholders' Equity          $   517,426 $   459,120 $   58,306
                              =========== =========== ==========
NBT Bancorp Inc. and Subsidiaries                 June 30,    December 31,
Consolidated Balance Sheets (unaudited)             2010          2009
                                                ------------- -------------
(in thousands)
ASSETS
Cash and due from banks                         $     105,329 $     107,980
Short term interest bearing accounts                   61,708        79,181
Securities available for sale, at fair value        1,137,986     1,116,758
Securities held to maturity (fair value of
 $124,456 and $161,851 at June 30, 2010 and
 December 31, 2009, respectively)                     122,549       159,946
Trading securities                                      2,495         2,410
Federal Reserve and Federal Home Loan Bank
 stock                                                 32,178        35,979
Loans and leases                                    3,647,445     3,645,398
Less allowance for loan and lease losses               70,300        66,550
                                                ============= =============
  Net loans and leases                              3,577,145     3,578,848
Premises and equipment, net                            66,305        66,221
Goodwill                                              114,841       114,938
Intangible assets, net                                 19,055        20,590
Bank owned life insurance                              73,773        74,751
Other assets                                          101,797       106,424
                                                ------------- -------------
TOTAL ASSETS                                    $   5,415,161 $   5,464,026
                                                ============= =============
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits:
 Demand (noninterest bearing)                   $     798,454 $     789,989
 Savings, NOW, and money market                     2,337,642     2,269,779
 Time                                                 965,235     1,033,278
                                                ------------- -------------
  Total deposits                                    4,101,331     4,093,046
Short-term borrowings                                 159,036       155,977
Long-term debt                                        479,461       554,698
Trust preferred debentures                             75,422        75,422
Other liabilities                                      72,889        79,760
                                                ------------- -------------
  Total liabilities                                 4,888,139     4,958,903
Total stockholders' equity                            527,022       505,123
                                                ============= =============
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY      $   5,415,161 $   5,464,026
                                                ============= =============
NBT Bancorp Inc. and Subsidiaries   Three months ended   Six months ended
Consolidated Statements of Income        June 30,            June 30,
 (unaudited)                          2010      2009      2010      2009
                                    --------- --------- --------- ---------
(in thousands, except per share
 data)
Interest, fee and dividend income:
Loans and leases                    $  53,503 $  54,886 $ 107,195 $ 110,297
Securities available for sale           9,556    11,671    19,602    24,046
Securities held to maturity             1,078     1,209     2,215     2,443
Other                                     469       606     1,065       967
                                    --------- --------- --------- ---------
  Total interest, fee and dividend
   income                              64,606    68,372   130,077   137,753
                                    --------- --------- --------- ---------
Interest expense:
Deposits                                7,999    13,123    16,453    26,962
Short-term borrowings                     123       124       247       271
Long-term debt                          4,850     5,998     9,915    12,195
Trust preferred debentures              1,033     1,076     2,060     2,162
                                    --------- --------- --------- ---------
  Total interest expense               14,005    20,321    28,675    41,590
                                    --------- --------- --------- ---------
Net interest income                    50,601    48,051   101,402    96,163
Provision for loan and lease losses     6,350     9,199    15,593    15,650
                                    --------- --------- --------- ---------
Net interest income after provision
 for loan and lease losses             44,251    38,852    85,809    80,513
                                    --------- --------- --------- ---------
Noninterest income:
Trust                                   1,909     1,761     3,675     3,170
Service charges on deposit accounts     6,301     6,950    12,431    13,247
ATM and debit card fees                 2,462     2,368     4,829     4,550
Insurance and other financial
 services revenue                       4,700     4,220     9,945     9,558
Net securities gains                       63        17        91        17
Bank owned life insurance income          808       670     1,789     1,542
Retirement plan administration fees     2,595     2,194     4,985     3,935
Other                                   1,482     1,665     2,916     3,416
                                    --------- --------- --------- ---------
  Total noninterest income             20,320    19,845    40,661    39,435
                                    --------- --------- --------- ---------
Noninterest expense:
Salaries and employee benefits         24,224    19,947    46,428    41,374
Office supplies and postage             1,454     1,429     2,996     2,959
Occupancy                               3,666     3,610     7,818     7,775
Equipment                               2,041     2,005     4,141     4,027
Professional fees and outside
 services                               2,191     2,407     4,475     5,129
Data processing and communications      3,265     3,324     6,483     6,619
Amortization of intangible assets         780       825     1,561     1,638
Loan collection and other real
 estate owned                             668       674     1,727     1,422
FDIC expenses                           1,560     4,032     3,113     5,561
Other operating                         4,348     3,686     7,615     7,740
                                    --------- --------- --------- ---------
  Total noninterest expense            44,197    41,939    86,357    84,244
                                    --------- --------- --------- ---------
Income before income taxes             20,374    16,758    40,113    35,704
Income taxes                            5,950     5,198    11,713    11,072
                                    --------- --------- --------- ---------
   Net income                       $  14,424 $  11,560 $  28,400 $  24,632
                                    --------- --------- --------- ---------
Earnings Per Share:
     Basic                          $    0.42 $    0.34 $    0.83 $    0.74
     Diluted                        $    0.42 $    0.34 $    0.82 $    0.74
                                    ========= ========= ========= =========
NBT Bancorp Inc. and Subsidiaries
Quarterly Consolidated Statements    2Q      1Q      4Q       3Q      2Q
 of Income (unaudited)              2010    2010     2009    2009    2009
                                   ------- ------- -------  ------- -------
(in thousands, except per share
 data)
Interest, fee and dividend income:
Loans and leases                   $53,503 $53,692 $55,361  $54,666 $54,886
Securities available for sale        9,556  10,046  10,810   11,116  11,671
Securities held to maturity          1,078   1,137   1,212    1,239   1,209
Other                                  469     596     621      615     606
                                   ------- ------- -------  ------- -------
  Total interest, fee and dividend
   income                           64,606  65,471  68,004   67,636  68,372
                                   ------- ------- -------  ------- -------
Interest expense:
Deposits                             7,999   8,454   9,532   12,002  13,123
Short-term borrowings                  123     124     139      142     124
Long-term debt                       4,850   5,065   5,673    5,761   5,998
Trust preferred debentures           1,033   1,027   1,036    1,049   1,076
                                   ------- ------- -------  ------- -------
  Total interest expense            14,005  14,670  16,380   18,954  20,321
                                   ------- ------- -------  ------- -------
Net interest income                 50,601  50,801  51,624   48,682  48,051
Provision for loan and lease
 losses                              6,350   9,243   8,641    9,101   9,199
                                   ------- ------- -------  ------- -------
Net interest income after
 provision for loan and lease
 losses                             44,251  41,558  42,983   39,581  38,852
                                   ------- ------- -------  ------- -------
Noninterest income:
Trust                                1,909   1,766   1,881    1,668   1,761
Service charges on deposit
 accounts                            6,301   6,130   6,808    7,110   6,950
ATM and debit card fees              2,462   2,367   2,346    2,443   2,368
Insurance and other financial
 services revenue                    4,700   5,245   3,799    4,368   4,220
Net securities gains/(losses)           63      28      (2)     129      17
Bank owned life insurance income       808     981     910      683     670
Retirement plan administration
 fees                                2,595   2,390   2,739    2,412   2,194
Other                                1,482   1,434   1,365    2,037   1,665
                                   ------- ------- -------  ------- -------
  Total noninterest income          20,320  20,341  19,846   20,850  19,845
                                   ------- ------- -------  ------- -------
Noninterest expense:
Salaries and employee benefits      24,224  22,204  22,919   21,272  19,947
Office supplies and postage          1,454   1,542   1,472    1,426   1,429
Occupancy                            3,666   4,152   3,608    3,481   3,610
Equipment                            2,041   2,100   2,115    1,997   2,005
Professional fees and outside
 services                            2,191   2,284   2,688    2,691   2,407
Data processing and communications   3,265   3,218   3,314    3,305   3,324
Amortization of intangible assets      780     781     781      827     825
Loan collection and other real
 estate owned                          668   1,059     589      755     674
FDIC expenses                        1,560   1,553   1,312    1,535   4,032
Other operating                      4,348   3,267   6,492    3,743   3,686
                                   ------- ------- -------  ------- -------
  Total noninterest expense         44,197  42,160  45,290   41,032  41,939
                                   ------- ------- -------  ------- -------
Income before income taxes          20,374  19,739  17,539   19,399  16,758
Income taxes                         5,950   5,763   3,738    5,821   5,198
                                   ------- ------- -------  ------- -------
   Net income                      $14,424 $13,976 $13,801  $13,578 $11,560
                                   ======= ======= =======  ======= =======
Earnings per share:
   Basic                           $  0.42 $  0.41 $  0.40  $  0.40 $  0.34
   Diluted                         $  0.42 $  0.41 $  0.40  $  0.40 $  0.34
                                   ======= ======= =======  ======= =======
Three months ended June 30,
                       Average    2010    Yield/  Average    2009    Yield/
(dollars in thousands) Balance   Interest Rates   Balance   Interest Rates
                      ---------- ------- ------  ---------- ------- ------
ASSETS
Short-term interest
 bearing accounts     $  106,784 $    75   0.28% $  126,318 $    63   0.20%
Securities available
 for sale
 (1)(excluding
 unrealized gains or
 losses)               1,114,315  10,286   3.70%  1,085,147  12,425   4.59%
Securities held to
 maturity (1)            148,568   1,624   4.38%    138,180   1,822   5.29%
Investment in FRB and
 FHLB Banks               33,199     394   4.76%     38,221     543   5.70%
Loans and leases (2)   3,640,915  53,713   5.92%  3,653,166  55,094   6.05%
                      ---------- -------         ---------- -------
 Total interest
  earning assets      $5,043,781 $66,092   5.25% $5,041,032 $69,947   5.56%
                                 -------                    -------
Other assets             438,555                    407,408
                      ----------                 ----------
Total assets          $5,482,336                 $5,448,440
                      ----------                 ----------
LIABILITIES AND STOCKHOLDERS' EQUITY
Money market deposit
 accounts             $1,130,124   1,743   0.62% $1,017,217 $ 3,381   1.33%
NOW deposit accounts     689,079     770   0.45%    581,534     848   0.58%
Savings deposits         557,109     214   0.15%    503,485     205   0.16%
Time deposits            995,985   5,272   2.12%  1,279,052   8,689   2.72%
                      ---------- -------         ---------- -------
  Total interest
   bearing deposits   $3,372,297 $ 7,999   0.95% $3,381,288 $13,123   1.56%
Short-term borrowings    151,985     123   0.32%    120,272     124   0.41%
Trust preferred
 debentures               75,422   1,033   5.49%     75,422   1,076   5.72%
Long-term debt           501,757   4,850   3.88%    609,073   5,998   3.95%
                      ---------- -------         ---------- -------
  Total interest
   bearing liabilities$4,101,461 $14,005   1.37% $4,186,055 $20,321   1.95%
                                 -------                    -------
Demand deposits          779,841                    707,022
Other liabilities         79,402                     74,055
Stockholders' equity     521,632                    481,308
                      ----------                 ----------
Total liabilities and
 stockholders' equity $5,482,336                 $5,448,440
                      ----------                 ----------
  Net interest income
   (FTE)                          52,087                     49,626
                                 -------                    -------
Interest rate spread                       3.88%                      3.61%
Net interest margin                        4.14%                      3.95%
Taxable equivalent
 adjustment                        1,486                      1,575
                                 -------                    -------
Net interest income              $50,601                    $48,051
(1) Securities are shown at average amortized cost
(2) For purposes of these computations, nonaccrual loans are included in
    the average loan balances outstanding
Six months ended June 30,
                       Average    2010    Yield/  Average    2009    Yield/
(dollars in thousands) Balance   Interest Rates   Balance   Interest Rates
                      ---------- -------- -----  ---------- -------- -----
ASSETS
Short-term interest
 bearing accounts     $  115,354 $    142  0.25% $   64,843 $     76  0.24%
Securities available
 for sale
 (1)(excluding
 unrealized gains or
 losses)               1,101,530   21,068  3.86%  1,087,317   25,539  4.74%
Securities held to
 maturity (1)            152,164    3,338  4.42%    138,439    3,682  5.36%
Investment in FRB and
 FHLB Banks               33,959      924  5.48%     38,535      892  4.67%
Loans and leases (2)   3,640,528  107,591  5.96%  3,655,909  110,722  6.11%
                      ---------- --------        ---------- --------
 Total interest
  earning assets      $5,043,535 $133,063  5.32% $4,985,043 $140,911  5.70%
                                 --------                   --------
Other assets             442,385                    415,183
                      ----------                 ----------
Total assets          $5,485,920                 $5,400,226
                      ----------                 ----------
LIABILITIES AND
 STOCKHOLDERS' EQUITY
Money market deposit
 accounts             $1,112,154    3,639  0.66% $  979,927 $  6,489  1.34%
NOW deposit accounts     705,538    1,591  0.45%    565,974    1,634  0.58%
Savings deposits         544,961      407  0.15%    490,829      415  0.17%
Time deposits          1,011,578   10,816  2.16%  1,310,400   18,424  2.84%
                      ---------- --------        ---------- --------
  Total interest
   bearing deposits   $3,374,231 $ 16,453  0.98% $3,347,130 $ 26,962  1.62%
Short-term borrowings    154,605      247  0.32%    134,282      271  0.41%
Trust preferred
 debentures               75,422    2,060  5.51%     75,422    2,162  5.78%
Long-term debt           513,974    9,915  3.89%    620,095   12,195  3.97%
                      ---------- --------        ---------- --------
  Total interest
   bearing
   liabilities        $4,118,232 $ 28,675  1.40% $4,176,929 $ 41,590  2.01%
                                 --------                   --------
Demand deposits          769,744                    694,001
Other liabilities         80,518                     70,176
Stockholders' equity     517,426                    459,120
                      ----------                 ----------
Total liabilities and
 stockholders' equity $5,485,920                 $5,400,226
                      ----------                 ----------
  Net interest income
   (FTE)                          104,388                     99,321
                                 --------                   --------
Interest rate spread                       3.91%                      3.69%
Net interest margin                        4.17%                      4.02%
Taxable equivalent
 adjustment                         2,986                      3,158
                                 --------                   --------
Net interest income              $101,402                   $ 96,163
(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)
                                                    June 30,   December 31,
(In thousands)                                       2010          2009
                                                ------------- -------------
Residential real estate mortgages               $     584,472 $     622,898
Commercial                                            615,642       581,870
Commercial real estate mortgages                      761,179       718,235
Real estate construction and development               76,346        76,721
Agricultural and agricultural real estate
 mortgages                                            116,332       122,466
Consumer                                              854,343       856,956
Home equity                                           594,495       603,585
Lease financing                                        44,636        62,667
                                                ------------- -------------
  Total loans and leases                        $   3,647,445 $   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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