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NBT Bancorp Inc. Announces Second Quarter Earnings of $0.45 per Share, up 25% From the Second Quarter of 2007; Declares Cash Dividend

07/28/08

NORWICH, NY, Jul 28, 2008 (MARKET WIRE via COMTEX News Network) -- NBT Bancorp Inc. (NBT) (NASDAQ: NBTB) reported today that net income per diluted share for the three months ended June 30, 2008 was $0.45 per share, up $0.09, or 25.0%, from $0.36 per share for the three months ended June 30, 2007. Return on average assets and return on average equity were 1.12% and 14.49%, respectively, for the three months ended June 30, 2008, compared with 0.95% and 11.90%, respectively, for the three months ended June 30, 2007. Net income for the three months ended June 30, 2008 was $14.7 million, up $2.6 million, or 21.5%, from the three months ended June 30, 2007. The increase in net income for the three months ended June 30, 2008 compared with the three months ended June 30, 2007 was primarily the result of an increase in net interest income, an increase in noninterest income, and a decrease in the provision for loan and lease losses, partially offset by an increase in noninterest expense.

Net income per diluted share for the six months ended June 30, 2008 was $0.88 per share, up $0.11, or 14.3%, from $0.77 per share for the six months ended June 30, 2007. Return on average assets and return on average equity were 1.10% and 14.09%, respectively, for the six months ended June 30, 2008, compared with 1.04% and 12.98%, respectively, for the six months ended June 30, 2007. Net income for the six months ended June 30, 2008 was $28.4 million, up $2.2 million, or 8.3%, from the six months ended June 30, 2007. The increase in net income for the six months ended June 30, 2008 compared with the six months ended June 30, 2007 was primarily the result of increases in net interest income and noninterest income, partially offset by an increase in noninterest expense.

NBT President and CEO Martin A. Dietrich said: "We are very pleased with our earnings through the first six months of 2008. Even though the economy is creating unique challenges for the banking industry, we were able to post record earnings per share through the first half of this year. We continue to see growth in noninterest income, which was up 17.3% for the second quarter of 2008, compared with the second quarter of 2007, primarily due to our continued focus on fee initiatives and other areas of noninterest income. Our net interest margin continues to climb despite the difficult rate environment. Our net interest margin was 3.94% for the second quarter of 2008, up from 3.84% for the first quarter of 2008 and up from 3.63% for the second quarter of 2007. This increase, coupled with the continued growth in our earning assets, has resulted in a 4.4% increase in net interest income over the first quarter of 2008 and in an 11.2% increase over the second quarter of 2007. In addition, we maintain capital levels in excess of regulatory standards for 'well-capitalized' institutions. As of June 30, 2008, NBT's ratio of core capital to tangible assets stands at 7.23%, while the applicable regulatory standard to be determined as 'well-capitalized' is 5%. We have also seen improvement in our asset quality. Our delinquency ratio improved to 0.68% for the period ending June 30, 2008, compared with 0.85% for the period ending June 30, 2007. Solid operating results from all areas of the bank have contributed to our strong first half performance."

Loan and Lease Quality and Provision for Loan and Lease Losses

Nonperforming loans at June 30, 2008 were $22.8 million or 0.63% of total loans and leases compared with $30.4 million or 0.87% at March 31, 2008, and $34.4 million or 1.00% at June 30, 2007. The decrease in nonperforming loans at June 30, 2008 was primarily the result of $7.8 million in net charge-offs during the second quarter related primarily to one large commercial loan, which had been previously identified and reserved for in 2007. The allowance for loan and lease losses totaled $54.5 million at June 30, 2008, as compared with $56.5 million at March 31, 2008, and $57.1 million at June 30, 2007.

The Company recorded a provision for loan and lease losses of $5.8 million during the second quarter of 2008 compared with $6.5 million and $9.8 million for the three months ending March 31, 2008 and June 30, 2007, respectively. Net charge-offs totaled $7.8 million for the three month period ending June 30, 2008, up from $4.2 million for the three months ending March 31, 2008, and up from $3.3 million for the three months ended June 30, 2007. The decrease in the provision for loan and lease losses for the three months ended June 30, 2008 was due primarily to improvement in nonperforming and classified loans. The increase in net charge-offs for the three months ended June 30, 2008 was due primarily to a charge-off related to one large commercial loan, which had been previously identified and reserved for in 2007. Net charge-offs to average loans and leases for the three months ended June 30, 2008 were 0.88%, compared with 0.48% for the three months ended March 31, 2008 and 0.38% for the three months ended June 30, 2007. The Company's allowance for loan and lease losses was 1.51% of loans and leases at June 30, 2008, compared with 1.61% at March 31, 2008 and 1.66% at June 30, 2007.

The Company recorded a provision for loan and lease losses of $12.3 million during the six months ended June 30, 2008 as compared with $11.9 million for the six months ended June 30, 2007. Net charge-offs totaled $12.0 million for the six months ended June 30, 2008, up from $5.4 million for the same period a year ago. The increase in net charge-offs for the six months ended June 30, 2008 was due primarily to additional charge-offs in the first and second quarters of 2008 related to one large commercial loan, which had been previously identified and reserved for in 2007. Net charge-offs to average loans and leases for the six months ended June 30, 2008 were 0.68%, compared with 0.32% for the six months ended June 30, 2007.

Net Interest Income

Net interest income was up 11.2% to $46.0 million for the three months ended June 30, 2008 compared with $41.4 million for the three months ended June 30, 2007. The Company's fully taxable equivalent (FTE) net interest margin increased from 3.63% for the three months ended June 30, 2007 to 3.94% for the three months ended June 30, 2008. In addition, the Company experienced a 2.7% growth in average earning assets for the three months ending June 30, 2008 as compared to the three months ending June 30, 2007, due primarily to an increase in average loans and leases. Although the yield on interest earning assets decreased 44 basis points, the yield on interest bearing liabilities declined 88 basis points, which contributed to the increase in the net interest margin for the three months ended June 30, 2008 compared to the same period for 2007. The yield on money market deposit accounts declined from 3.44% for the three months ended June 30, 2007 to 1.65% for the three months ended June 30, 2008, while the yield on time deposits decreased 85 basis points for the same period. The yield on short term borrowings declined 255 basis points for the three months ended June 30, 2008 as compared to the three months ended June 30, 2007 as a result of the 325 basis points drop in the Fed Funds Target Rate from 5.25% at June 30, 2007 to 2.00% at June 30, 2008.

Net interest income was up 9.9% to $90.1 million for the six months ended June 30, 2008 compared with $82.0 million for the six months ended June 30, 2007. The Company's FTE net interest margin increased from 3.63% for the six months ended June 30, 2007 to 3.89% for the six months ended June 30, 2008. In addition, the Company experienced a 2.2% growth in average earning assets for the six months ending June 30, 2008 as compared to the six months ending June 30, 2007 due primarily to an increase in average loans and leases. Although the yield on interest earning assets decreased 34 basis points, the yield on interest bearing liabilities declined 69 basis points, which contributed to the increase in the net interest margin from the six months ended June 30, 2007. The yield on money market deposit accounts declined from 3.44% for the six months ended June 30, 2007 to 2.01% for the six months ended June 30, 2008, while the yield on time deposits decreased 58 basis points for the same period. The yield on short term borrowings declined 205 basis points for the six months ended June 30, 2008 as compared to the six months ended June 30, 2007 as a result of the 325 basis points drop in the Fed Funds Target Rate from 5.25% at June 30, 2007 to 2.00% at June 30, 2008.

Noninterest Income

Noninterest income for the three months ended June 30, 2008 was $16.4 million, up $2.4 million or 17.3% from $14.0 million for the same period in 2007. 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 $2.2 million as the Company continued to focus on enhancing fee income through various initiatives. In addition, trust administration income increased $0.3 million for the three month period ended June 30, 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 $0.3 million for the three month period ended June 30, 2008 as we expanded our sales force and increased the number of accounts being serviced. Other noninterest income decreased $0.4 million for the three month period ended June 30, 2008, compared with the same period in 2007. Net securities gains for the three month periods ended June 30, 2008 and 2007 were nominal and had no significant effect on noninterest income.

Noninterest income for the six months ended June 30, 2008 was $32.5 million, up $5.8 million or 21.9% from $26.7 million for the same period in 2007. 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 $4.4 million as the Company focused on enhancing fee income through various initiatives. In addition, trust administration income increased $0.6 million for the six month period ended June 30, 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 $0.3 million for the six month period ended June 30, 2008 as we expanded our sales force and increased the number of accounts being serviced. Net securities gains for the six month periods ended June 30, 2008 and 2007 were nominal and had no significant effect on noninterest income.

Noninterest Expense and Income Tax Expense

Noninterest expense for the three months ended June 30, 2008 was $35.4 million, up from $28.0 million for the same period in 2007. Office expenses, such as supplies and postage, occupancy, equipment and data processing and communications charges were $9.7 million for the three months ended June 30, 2008, up $1.1 million, or 13.2%, from $8.6 million for the three months ended June 30, 2007. This increase was due primarily to an increase in expenses related to the five new branches the Company has opened within the past eight months. Salaries and employee benefits increased $3.9 million, or 29.8%, for the three months ended June 30, 2008 compared with the same period in 2007. This increase was due primarily to increases in full time employees during 2008 and reduced levels of incentive compensation in 2007. Professional fees and outside services increased $0.6 million for the three month period ended June 30, 2008, compared with the same period in 2007, due primarily to fees and costs related to the aforementioned noninterest income initiatives. Other operating expenses were $5.2 million for the three months ended June 30, 2008, up $1.4 million or 34.6%, from $3.8 million for the three months ended June 30, 2008. This increase was primarily due to increases in advertising expenses. Income tax expense for the three month period ended June 30, 2008 was $6.5 million, up from $5.5 million for the same period in 2007. The effective rates were 30.9% and 31.3% for the three month periods ended June 30, 2008 and 2007, respectively.

Noninterest expense for the six months ended June 30, 2008 was $69.5 million, up from $58.9 million for the same period in 2007. Office expenses, such as supplies and postage, occupancy, equipment and data processing and communications charges were $19.7 million for the six months ended June 30, 2008, up $1.8 million, or 10.1%, from $17.9 million for the six months ended June 30, 2007. This increase was due primarily to an increase in expenses related to the aforementioned branch openings. Salaries and employee benefits increased $4.7 million, or 16.2%, for the six months ended June 30, 2008 compared with the same period in 2007. This increase was due primarily to increases in full time employees during 2008 and reduced levels of incentive compensation in 2007. Professional fees and outside services increased $2.0 million for the six month period ended June 30, 2008, compared with the same period in 2007, due primarily to fees and costs related to the aforementioned noninterest income initiatives. Other operating expenses were $8.4 million for the six months ended June 30, 2008, up $1.4 million or 20.0%, from $7.0 million for the six months ended June 30, 2008. This increase was primarily due to increases in advertising expenses. Income tax expense for the six month period ended June 30, 2008 was $12.5 million, up from $11.7 million for the same period in 2007. The effective rates were 30.5% and 30.9% for the six month periods ended June 30, 2008 and 2007, respectively.

Balance Sheet

Total assets were $5.3 billion at June 30, 2008, up $107.7 million or 2.1% from $5.2 billion at December 31, 2007, and up $187.9 million or 3.7% from $5.1 billion at June 30, 2007. Loans and leases were $3.6 billion at June 30, 2008, up $147.0 million or 4.3% from $3.5 billion at December 31, 2007, and up $170.6 million or 5.0% from $3.4 billion at June 30, 2007. The increase in loans and leases at June 30, 2008 as compared to December 31, 2007 and June 30, 2007 was due in large part to an increase in consumer loans of approximately $113.6 million and $150.4 million, respectively. Total deposits were $3.9 billion at June 30, 2008, up $67.0 million or 1.7% from December 31, 2007, and down $20.1 million or 0.5% from June 30, 2007. The increase from December 31, 2007 was due in large part to a $33.6 million, or 5.0%, increase in demand deposits and a $29.4 million, or 1.8%, increase in savings, NOW, and money market accounts. Stockholders' equity was $403.9 million, representing a total equity to total assets ratio of 7.61% at June 30, 2008, compared with $397.3 million or a total equity to total assets ratio of 7.64% at December 31, 2007, and $390.9 million or a total equity to total assets ratio of 7.63% at June 30, 2007.

Stock Repurchase Program

Under previously disclosed stock repurchase plans, the Company purchased 272,840 shares of its common stock during the six month period ended June 30, 2008, for a total of $5.9 million at an average price of $21.77 per share. At June 30, 2008, there were 1,203,040 shares available for repurchase under previously announced plans.

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, 2008, to shareholders of record as of September 1, 2008.

Corporate Overview

NBT is a financial holding company headquartered in Norwich, NY, with total assets of $5.3 billion at June 30, 2008. The company primarily operates through NBT Bank, N.A., a full-service community bank with two divisions, and through two financial services companies. NBT Bank, N.A. has 124 locations, including 85 NBT Bank offices in upstate New York and 39 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. As filed on Form 8-K on July 9, 2008, NBT Bancorp Inc. signed a definitive agreement to acquire Mang Insurance Agency on July 3, 2008 and the acquisition is expected to close in the third quarter of 2008. 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
                               2008        2007       Change      Change
                            ----------  ----------  ----------  ----------
                            (dollars in thousands,
                            except per share data)
Three Months Ended June 30,
Net Income                  $   14,657  $   12,064  $    2,593          21%
Diluted Earnings Per Share  $     0.45  $     0.36  $     0.09          25%
Weighted Average Diluted
 Common Shares Outstanding  32,241,642  33,936,096  -1,694,454          -5%
Return on Average Assets(1)       1.12%       0.95%       0.17%         18%
Return on Average Equity(1)      14.49%      11.90%       2.59%         22%
Net Interest Margin(2)            3.94%       3.63%       0.31%          9%
                            ==========  ==========  ==========  ==========
Six Months Ended June 30,
Net Income                  $   28,373  $   26,196  $    2,177           8%
Diluted Earnings Per Share  $     0.88  $     0.77  $     0.11          14%
Weighted Average Diluted
 Common Shares Outstanding  32,246,644  34,195,110  -1,948,466          -6%
Return on Average Assets(1)       1.10%       1.04%       0.06%          6%
Return on Average Equity(1)      14.09%      12.98%       1.11%          9%
Net Interest Margin(2)            3.89%       3.63%       0.26%          7%
                            ==========  ==========  ==========  ==========
Asset Quality                  June      December      June
                                30,         31,         30,
                               2008        2007        2007
                            ----------  ----------  ----------
Nonaccrual Loans            $   22,039  $   29,697  $   33,730
90 Days Past Due and Still
 Accruing                   $      717  $      882  $      689
Total Nonperforming Loans   $   22,756  $   30,579  $   34,419
Other Real Estate Owned     $    1,140  $      560  $      981
Total Nonperforming Assets  $   23,896  $   31,139  $   35,400
Past Due Loans              $   24,484  $   25,914  $   29,332
Allowance for Loan and
 Lease Losses               $   54,510  $   54,183  $   57,058
Year-to-Date (YTD) Net
 Charge-Offs                $   11,954  $   26,498  $    5,395
Allowance for Loan and
 Lease Losses to Total
 Loans and Leases                 1.51%       1.57%       1.66%
Total Nonperforming Loans
 to Total Loans and Leases        0.63%       0.88%       1.00%
Total Nonperforming Assets
 to Total Assets                  0.45%       0.60%       0.69%
Past Due Loans to Total
 Loans and Leases                 0.68%       0.75%       0.85%
Allowance for Loan and
 Lease Losses to Total
 Nonperforming Loans            239.54%     177.19%     165.77%
Net Charge-Offs to YTD
 Average Loans and Leases         0.68%       0.77%       0.32%
                            ==========  ==========  ==========  ==========
Capital
Equity to Assets                  7.61%       7.64%       7.63%
Book Value Per Share        $    12.56  $    12.29  $    11.72
Tangible Book Value Per
 Share                      $     9.05  $     8.78  $     8.29
Tier 1 Leverage Ratio             7.23%       7.14%       7.37%
Tier 1 Capital Ratio              9.67%       9.85%      10.21%
Total Risk-Based Capital
 Ratio                           10.92%      11.10%      11.46%
                            ==========  ==========  ==========  ==========
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                         23.80   17.10    24.57   21.44
December 31                          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 June 30,
Loans and Leases            $ 3,602,895 $ 3,432,300  $  170,595          5%
Earning Assets              $ 4,898,448 $ 4,756,527  $  141,921          3%
Total Assets                $ 5,309,500 $ 5,121,634  $  187,866          4%
Deposits                    $ 3,939,113 $ 3,959,166 ($   20,053)        -1%
Stockholders' Equity        $   403,872 $   390,934  $   12,938          3%
                            =========== ===========  ==========  =========
Average Balances
Three Months Ended June 30,
Loans and Leases            $ 3,561,632 $ 3,423,130  $  138,502          4%
Securities Available For
 Sale (excluding unrealized
 gains or losses)           $ 1,101,362 $ 1,128,973 ($   27,611)        -2%
Securities Held To Maturity $   157,822 $   148,467  $    9,355          6%
Regulatory Equity
 Investment                 $    41,274 $    32,576  $    8,698         27%
Short-Term Interest Bearing
 Accounts                   $     7,100 $     8,618 ($    1,518)       -18%
Total Earning Assets        $ 4,869,190 $ 4,741,764  $  127,426          3%
Total Assets                $ 5,241,686 $ 5,098,649  $  143,037          3%
Interest Bearing Deposits   $ 3,196,393 $ 3,307,241 ($  110,848)        -3%
Non-Interest Bearing
 Deposits                   $   668,299 $   627,172  $   41,127          7%
Short-Term Borrowings       $   257,376 $   250,112  $    7,264          3%
Long-Term Borrowings        $   643,758 $   449,464  $  194,294         43%
Total Interest Bearing
 Liabilities                $ 4,097,527 $ 4,006,817  $   90,710          2%
Stockholders' Equity        $   406,709 $   406,741 ($       32)         0%
                            =========== ===========  ==========  =========
Average Balances
Six Months Ended June 30,
Loans and Leases            $ 3,513,996 $ 3,410,928  $  103,068          3%
Securities Available For
 Sale (excluding unrealized
 gains or losses)           $ 1,110,809 $ 1,126,209 ($   15,400)        -1%
Securities Held To Maturity $   155,341 $   144,683  $   10,658          7%
Regulatory Equity
 Investment                 $    39,391 $    33,684  $    5,707         17%
Short-Term Interest Bearing
 Accounts                   $     7,750 $     8,934 ($    1,184)       -13%
Total Earning Assets        $ 4,827,287 $ 4,724,438  $  102,849          2%
Total Assets                $ 5,203,015 $ 5,083,653  $  119,362          2%
Interest Bearing Deposits   $ 3,214,697 $ 3,276,368 ($   61,671)        -2%
Non-Interest Bearing
 Deposits                   $   663,858 $   622,083  $   41,775          7%
Short-Term Borrowings       $   280,476 $   257,687  $   22,789          9%
Long-Term Borrowings        $   572,026 $   465,655  $  106,371         23%
Total Interest Bearing
 Liabilities                $ 4,067,199 $ 3,999,710  $   67,489          2%
Stockholders' Equity        $   404,937 $   407,128 ($    2,191)        -1%
                            =========== ===========  ==========  =========
NBT Bancorp Inc. and Subsidiaries         June 30,  December 31,  June 30,
Consolidated Balance Sheets (unaudited)     2008        2007        2007
                                        ----------- ----------- -----------
(in thousands)
ASSETS
Cash and due from banks                 $   145,635 $   155,495 $   134,058
Short term interest bearing accounts          1,782       7,451       7,252
Securities available for sale, at fair
 value                                    1,104,491   1,132,230   1,109,543
Securities held to maturity (fair value
 of $148,952, $149,519 and $146,944 at
 June 30, 2008, December 31, 2007 and
 June 30, 2007, respectively)               148,656     149,111     147,537
Federal Reserve and Federal Home Loan
 Bank stock                                  41,323      38,102      33,061
Loans and leases                          3,602,895   3,455,851   3,432,300
Less allowance for loan and lease
 losses                                      54,510      54,183      57,058
                                        =========== =========== ===========
  Net loans and leases                    3,548,385   3,401,668   3,375,242
Premises and equipment, net                  64,871      64,042      65,286
Goodwill                                    103,398     103,398     103,412
Intangible assets, net                        9,404      10,173      10,998
Bank owned life insurance                    44,546      43,614      42,667
Other assets                                 97,009      96,492      92,578
                                        ----------- ----------- -----------
TOTAL ASSETS                            $ 5,309,500 $ 5,201,776 $ 5,121,634
                                        =========== =========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits:
  Demand (noninterest bearing)          $   700,279 $   666,698 $   681,732
  Savings, NOW, and money market          1,643,702   1,614,289   1,606,473
  Time                                    1,595,132   1,591,106   1,670,961
                                        ----------- ----------- -----------
    Total deposits                        3,939,113   3,872,093   3,959,166
Short-term borrowings                       205,624     368,467     290,387
Long-term debt                              619,720     424,887     352,151
Trust preferred debentures                   75,422      75,422      75,422
Other liabilities                            65,749      63,607      53,574
                                        ----------- ----------- -----------
    Total liabilities                     4,905,628   4,804,476   4,730,700
Total stockholders' equity                  403,872     397,300     390,934
                                        =========== =========== ===========
TOTAL LIABILITIES AND STOCKHOLDERS'
 EQUITY                                 $ 5,309,500 $ 5,201,776 $ 5,121,634
                                        =========== =========== ===========
NBT Bancorp Inc. and Subsidiaries   Three months ended   Six months ended
Consolidated Statements of Income        June 30,            June 30,
 (unaudited)                          2008      2007      2008      2007
                                    --------- --------- --------- ---------
(in thousands, except per share
 data)
Interest, fee and dividend income:
Loans and leases                    $  57,220 $  60,689 $ 115,837 $ 120,497
Securities available for sale          13,417    13,562    27,163    27,029
Securities held to maturity             1,478     1,525     2,992     2,969
Other                                     739       719     1,514     1,459
                                    --------- --------- --------- ---------
  Total interest, fee and dividend
   income                              72,854    76,495   147,506   151,954
                                    --------- --------- --------- ---------
Interest expense:
Deposits                               18,712    26,950    41,410    52,934
Short-term borrowings                   1,362     2,918     3,702     6,010
Long-term debt                          5,629     3,997     9,931     8,483
Trust preferred debentures              1,146     1,272     2,393     2,540
                                    --------- --------- --------- ---------
  Total interest expense               26,849    35,137    57,436    69,967
                                    --------- --------- --------- ---------
Net interest income                    46,005    41,358    90,070    81,987
Provision for loan and lease losses     5,803     9,770    12,281    11,866
                                    --------- --------- --------- ---------
Net interest income after provision
 for loan and lease losses             40,202    31,588    77,789    70,121
                                    --------- --------- --------- ---------
Noninterest income:
Trust                                   2,099     1,792     3,873     3,229
Service charges on deposit accounts     6,938     4,936    13,463     9,405
ATM and debit card fees                 2,225     2,041     4,322     3,937
Broker/dealer and insurance revenue     1,366     1,093     2,473     2,176
Net securities gains (losses)              18        21        33        16
Bank owned life insurance income          480       450       932       884
Retirement plan administration fees     1,671     1,601     3,379     3,193
Other                                   1,622     2,058     4,039     3,842
                                    --------- --------- --------- ---------
  Total noninterest income             16,419    13,992    32,514    26,682
                                    --------- --------- --------- ---------
Noninterest expense:
Salaries and employee benefits         16,906    13,022    33,676    28,986
Office supplies and postage             1,331     1,334     2,670     2,630
Occupancy                               3,427     2,585     7,037     5,754
Equipment                               1,862     1,837     3,687     3,770
Professional fees and outside
 services                               2,521     1,926     5,620     3,584
Data processing and communications      3,115     2,845     6,285     5,722
Amortization of intangible assets         378       410       769       819
Loan collection and other real
 estate owned                             730       228     1,297       605
Other operating                         5,153     3,827     8,416     7,016
                                    --------- --------- --------- ---------
  Total noninterest expense            35,423    28,014    69,457    58,886
                                    --------- --------- --------- ---------
Income before income taxes             21,198    17,566    40,846    37,917
Income taxes                            6,541     5,502    12,473    11,721
                                    --------- --------- --------- ---------
   Net income                       $  14,657 $  12,064 $  28,373 $  26,196
                                    --------- --------- --------- ---------
Earnings Per Share:
     Basic                          $    0.46 $    0.36 $    0.89 $    0.77
     Diluted                        $    0.45 $    0.36 $    0.88 $    0.77
                                    ========= ========= ========= =========
NBT Bancorp Inc. and Subsidiaries
Quarterly Consolidated Statements
 of Income                        2Q       1Q       4Q       3Q       2Q
 (unaudited)                     2008     2008     2007     2007     2007
                               -------- -------- -------- -------- --------
(in thousands, except per
 share data)
Interest, fee and dividend
 income:
Loans and leases               $ 57,220 $ 58,617 $ 60,817 $ 61,183 $ 60,689
Securities available for sale    13,417   13,746   13,971   13,847   13,562
Securities held to maturity       1,478    1,514    1,458    1,471    1,525
Other                               739      775      736      680      719
                               -------- -------- -------- -------- --------
  Total interest, fee and
   dividend income               72,854   74,652   76,982   77,181   76,495
                               -------- -------- -------- -------- --------
Interest expense:
Deposits                         18,712   22,698   26,578   27,062   26,950
Short-term borrowings             1,362    2,340    3,048    3,885    2,918
Long-term debt                    5,629    4,302    4,233    3,770    3,997
Trust preferred debentures        1,146    1,247    1,270    1,277    1,272
                               -------- -------- -------- -------- --------
  Total interest expense         26,849   30,587   35,129   35,994   35,137
                               -------- -------- -------- -------- --------
Net interest income              46,005   44,065   41,853   41,187   41,358
Provision for loan and lease
 losses                           5,803    6,478   13,440    4,788    9,770
                               -------- -------- -------- -------- --------
Net interest income after
 provision for loan and lease
 losses                          40,202   37,587   28,413   36,399   31,588
                               -------- -------- -------- -------- --------
Noninterest income:
Trust                             2,099    1,774    1,584    1,701    1,792
Service charges on deposit
 accounts                         6,938    6,525    7,142    6,195    4,936
ATM and debit card fees           2,225    2,097    2,089    2,159    2,041
Broker/dealer and insurance
 fees                             1,366    1,107    1,052    1,027    1,093
Net securities gains (losses)        18       15      613    1,484       21
Bank owned life insurance
 income                             480      452      480      467      450
Retirement plan administration
 fees                             1,671    1,708    1,557    1,586    1,601
Other                             1,622    2,417    1,973    1,908    2,058
                               -------- -------- -------- -------- --------
  Total noninterest income       16,419   16,095   16,490   16,527   13,992
                               -------- -------- -------- -------- --------
Noninterest expense:
Salaries and employee benefits   16,906   16,770   14,654   15,876   13,022
Office supplies and postage       1,331    1,339    1,136    1,354    1,334
Occupancy                         3,427    3,610    2,948    2,928    2,585
Equipment                         1,862    1,825    1,855    1,797    1,837
Professional fees and outside
 services                         2,521    3,099    3,295    2,256    1,926
Data processing and
 communications                   3,115    3,170    2,899    2,779    2,845
Amortization of intangible
 assets                             378      391      413      413      410
Loan collection and other real
 estate owned                       730      567      597      431      228
Other operating                   5,153    3,263    4,607    3,393    3,827
                               -------- -------- -------- -------- --------
  Total noninterest expense      35,423   34,034   32,404   31,227   28,014
                               -------- -------- -------- -------- --------
Income before income taxes       21,198   19,648   12,499   21,699   17,566
Income taxes                      6,541    5,932    3,514    6,552    5,502
                               -------- -------- -------- -------- --------
   Net income                  $ 14,657 $ 13,716 $  8,985 $ 15,147 $ 12,064
                               ======== ======== ======== ======== ========
Earnings per share:
   Basic                       $   0.46 $   0.43 $   0.28 $   0.46 $   0.36
   Diluted                     $   0.45 $   0.43 $   0.28 $   0.46 $   0.36
                               ======== ======== ======== ======== ========

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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