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NBT Bancorp Inc. Announces Third Quarter Earnings of $0.46 per Share; Declares Cash Dividend

10/27/08

NORWICH, NY, Oct 27, 2008 (MARKET WIRE via COMTEX News Network) -- NBT Bancorp Inc. (NBT) (NASDAQ: NBTB) reported today net income per diluted share for the three months ended September 30, 2008 of $0.46 per share, which is the same per share earnings as the third quarter last year. Similarly, net income for the three months ended September 30, 2008 was $15.1 million, the same as net income for the third quarter last year. Return on average assets and return on average equity were 1.13% and 14.58%, respectively, for the three months ended September 30, 2008, compared with 1.17% and 15.41%, respectively, for the three months ended September 30, 2007.

Net income per diluted share for the nine months ended September 30, 2008 was $1.34 per share, up $0.12, or 9.8%, from $1.22 per share for the nine months ended September 30, 2007. Return on average assets and return on average equity were 1.11% and 14.26%, respectively, for the nine months ended September 30, 2008, compared with 1.08% and 13.77%, respectively, for the nine months ended September 30, 2007. Net income for the nine months ended September 30, 2008 was $43.5 million, up $2.1 million, or 5.1%, from the nine months ended September 30, 2007. The increase in net income for the nine months ended September 30, 2008 compared with the nine months ended September 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 Dietrich said: "Given the current economic conditions and the credit crisis throughout our financial system, many challenges face the banking industry today. Despite these challenges, we are extremely pleased with our earnings through the first nine months of 2008. While many banks are currently distracted by major credit problems, we have maintained focus on our diligent underwriting practices and are proud of our disciplined credit culture. We continue to maintain our capital above the minimum levels required to be 'well capitalized' by our regulators. Our efforts to stimulate our noninterest income growth through various fee income initiatives and other areas of noninterest income continue to produce outstanding results. Noninterest income is up 19.1% year to date as of September 30, 2008, as compared with the same period last year. In addition, we continue to grow our net interest income in this rate environment by strategically managing earning assets and interest bearing liabilities. Our net interest margin was 3.91% for the nine months ended September 30, 2008, up from 3.61% for the same period in 2007. We will continue to navigate through these difficult economic times focused on positioning our company for continued future success."

Loan and Lease Quality and Provision for Loan and Lease Losses

Nonperforming loans at September 30, 2008 were $24.7 million or 0.69% of total loans and leases compared with $30.6 million or 0.88% at December 31, 2007, and $30.7 million or 0.90% at September 30, 2007. The decrease in nonperforming loans at September 30, 2008 from December 31, 2007 and September 30, 2007 was primarily the result of net charge-offs during the nine month period ending September 30, 2008 related to two large commercial loans, both of which had been previously identified and one of the two reserved for in 2007. The allowance for loan and lease losses totaled $55.8 million at September 30, 2008, as compared with $54.2 million at December 31, 2007, and $54.8 million at September 30, 2007.

The Company recorded a provision for loan and lease losses of $7.2 million during the third quarter of 2008 compared with $4.8 million for the three months ending September 30, 2007. The increase in the provision for loan and lease losses for the three months ended September 30, 2008 compared to the three months ended September 30, 2007 was due primarily to an additional charge off in the third quarter of 2008 related to the aforementioned large commercial loan which had not previously been reserved for. Net charge-offs totaled $5.9 million for the three month period ending September 30, 2008, down from $7.0 million for the three months ended September 30, 2007. The decrease in net charge-offs for the three months ended September 30, 2008 compared to the three months ended September 30, 2007 was due primarily to agricultural loan credit charge-offs in the third quarter of 2007, which did not repeat in the third quarter of 2008. Net charge-offs to average loans and leases for the three months ended September 30, 2008 were 0.65%, compared with 0.82% for the three months ended September 30, 2007. The Company's allowance for loan and lease losses was 1.55% of loans and leases at September 30, 2008, compared with 1.57% at December 31, 2008 and 1.60% at September 30, 2007.

The Company recorded a provision for loan and lease losses of $19.5 million during the nine months ended September 30, 2008 as compared with $16.7 million for the nine months ended September 30, 2007. Net charge-offs totaled $17.8 million for the nine months ended September 30, 2008, up from $12.4 million for the same period a year ago. The increase in net charge-offs for the nine months ended September 30, 2008 was due primarily to additional charge-offs in 2008 related to two large commercial loans, which had been previously identified and reserved for in 2007 and an additional charge-off related to one of the aforementioned large commercial loans in the third quarter, which had not previously been reserved for. Net charge-offs to average loans and leases for the nine months ended September 30, 2008 were 0.67%, compared with 0.49% for the nine months ended September 30, 2007.

Net Interest Income

Net interest income was up 14.2% to $47.0 million for the three months ended September 30, 2008 compared with $41.2 million for the three months ended September 30, 2007. The Company's fully taxable equivalent (FTE) net interest margin increased from 3.56% for the three months ended September 30, 2007 to 3.94% for the three months ended September 30, 2008. In addition, the Company experienced a 3.1% growth in average earning assets for the three months ending September 30, 2008 as compared to the three months ending September 30, 2007, due primarily to an increase in average loans and leases. Although the yield on interest earning assets decreased 47 basis points, the yield on interest bearing liabilities declined 98 basis points, which contributed to the increase in the net interest margin for the three months ended September 30, 2008 compared to the same period for 2007. The yield on money market deposit accounts declined from 3.38% for the three months ended September 30, 2007 to 1.83% for the three months ended September 30, 2008, while the yield on time deposits decreased 113 basis points for the same period. The yield on short term borrowings declined 282 basis points for the three months ended September 30, 2008 as compared to the three months ended September 30, 2007 as a result of the 275 basis point drop in the Fed Funds Target Rate from 4.75% at September 30, 2007 to 2.00% at September 30, 2008.

Net interest income was up 11.3% to $137.1 million for the nine months ended September 30, 2008 compared with $123.2 million for the nine months ended September 30, 2007. The Company's FTE net interest margin increased from 3.61% for the nine months ended September 30, 2007 to 3.91% for the nine months ended September 30, 2008. In addition, the Company experienced a 2.5% growth in average earning assets for the nine months ending September 30, 2008 as compared to the nine months ending September 30, 2007 due primarily to an increase in average loans and leases. Although the yield on interest earning assets decreased 38 basis points, the yield on interest bearing liabilities declined 79 basis points, which contributed to the increase in the net interest margin from the nine months ended September 30, 2007. The yield on money market deposit accounts declined from 3.42% for the nine months ended September 30, 2007 to 1.95% for the nine months ended September 30, 2008, while the yield on time deposits decreased 75 basis points for the same period. The yield on short term borrowings declined 223 basis points for the nine months ended September 30, 2008 as compared to the nine months ended September 30, 2007 as a result of the aforementioned 275 basis point drop in the Fed Funds Target Rate.

Noninterest Income

Noninterest income for the three months ended September 30, 2008 was $19.0 million, up $2.5 million or 14.7% from $16.5 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 $1.4 million as the benefits of various initiatives continued to enhance fee income. In addition, broker/dealer and insurance revenue increased approximately $1.3 million for the three month period ended September 30, 2008 due primarily to revenue generated by Mang Insurance Agency, LLC, which was acquired during the third quarter of 2008. Other noninterest income decreased $0.2 million for the three month period ended September 30, 2008, compared with the same period in 2007. Net securities gains for the three month periods ended September 30, 2008 and 2007 were approximately $1.5 million for both periods.

Noninterest income for the nine months ended September 30, 2008 was $51.5 million, up $8.3 million or 19.1% from $43.2 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 $5.8 million as the benefits of various initiatives continued to enhance fee income. In addition, trust administration income increased $0.7 million for the nine month period ended September 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 $1.6 million for the nine month period ended September 30, 2008 primarily due to the aforementioned acquisition. Net securities gains for the nine month periods ended September 30, 2008 and 2007 were approximately $1.5 million for both periods.

Noninterest Expense and Income Tax Expense

Noninterest expense for the three months ended September 30, 2008 was $37.1 million, up from $31.2 million for the same period in 2007. Salaries and employee benefits increased $1.0 million, or 6.1%, for the three months ended September 30, 2008 compared with the same period in 2007. This increase was due primarily to increases in full time equivalent employees during 2008 largely due to new branch activity as well as the aforementioned acquisition. Occupancy, equipment and data processing and communications charges were $8.4 million for the three months ended September 30, 2008, up $0.9 million, or 12.2%, from $7.5 million for the three months ended September 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 year. The Company recorded an impairment on lease residual assets totaling $2.0 million as a result of a growth in losses incurred from the sales of certain returned leased vehicles. Other operating expenses were $5.3 million for the three months ended September 30, 2008, up $1.9 million from $3.4 million for the three months ended September 30, 2007. This increase resulted primarily from the aforementioned losses incurred from sales of certain returned lease vehicles totaling approximately $0.9 million during the third quarter of 2008 due to reduced values of the vehicles. In addition, Federal Deposit Insurance Corporation ("FDIC") insurance premiums increased approximately $0.5 million for the three month period ending September 30, 2008 as compared to the same period in 2007. Income tax expense for the three month period ended September 30, 2008 was $6.7 million, up from $6.6 million for the same period in 2007. The effective rates were 30.7% and 30.2% for the three month periods ended September 30, 2008 and 2007, respectively.

Noninterest expense for the nine months ended September 30, 2008 was $106.5 million, up from $90.1 million for the same period in 2007. Salaries and employee benefits increased $5.7 million, or 12.6%, for the nine months ended September 30, 2008 compared with the same period in 2007. This increase was due primarily to increases in full time equivalent employees during 2008 largely due to new branch activity as well as the aforementioned acquisition, and reduced levels of incentive compensation in 2007. Occupancy, equipment and data processing and communications charges were $25.4 million for the nine months ended September 30, 2008, up $2.6 million, or 11.8%, from $22.8 million for the nine months ended September 30, 2007. This increase was due primarily to an increase in expenses related to the aforementioned branch openings. Professional fees and outside services increased $2.0 million for the nine month period ended September 30, 2008, compared with the same period in 2007, due primarily to fees and costs related to the aforementioned noninterest income initiatives. Loan collection and other real estate owned expenses were $1.8 million for the nine month period ended September 30, 2008, up from $1.0 million for same period in 2007. The Company recorded an impairment on lease residual assets totaling $2.0 million as a result of a growth in losses incurred from the sales of certain returned leased vehicles. Other operating expenses were $13.7 million for the nine months ended September 30, 2008, up $3.3 million from $10.4 million for the nine months ended September 30, 2007. This increase resulted primarily from the aforementioned losses incurred from sales of certain returned lease vehicles totaling approximately $1.0 million during the period due to reduced values of the vehicles. In addition, FDIC insurance premiums increased approximately $0.6 million for the nine month period ending September 30, 2008 as compared to the same period in 2007. Income tax expense for the nine month period ended September 30, 2008 was $19.2 million, up from $18.3 million for the same period in 2007. The effective rates were 30.6% and 30.7% for the nine month periods ended September 30, 2008 and 2007, respectively.

Balance Sheet

Total assets were $5.3 billion at September 30, 2008, up $133.4 million or 2.6% from $5.2 billion at December 31, 2007, and up $184.1 million or 3.6% from $5.2 billion at September 30, 2007. Loans and leases were $3.6 billion at September 30, 2008, up $151.5 million or 4.4% from $3.5 billion at December 31, 2007, and up $185.1 million or 5.4% from $3.4 billion at September 30, 2007. The increase in loans and leases at September 30, 2008 as compared to December 31, 2007 and September 30, 2007 was due in large part to an increase in consumer loans of approximately $152.4 million and $168.4 million, respectively. Total deposits were $4.0 billion at September 30, 2008, up $118.7 million or 3.1% from December 31, 2007, and up $40.7 million or 1.0% from September 30, 2007. The increase from December 31, 2007 was due in large part to a $261.3 million, or 22.6%, increase in NOW and money market accounts, partially offset by a $178.3 million decrease in time deposits. The increase from September 30, 2007 was due in large part to a $288.8 million, or 25.6%, increase in NOW and money market accounts, partially offset by a $269.9 million decrease in time deposits. Stockholders' equity was $421.1 million, representing a total equity to total assets ratio of 7.89% at September 30, 2008, compared with $397.3 million or a total equity to total assets ratio of 7.64% at December 31, 2007, and $385.6 million or a total equity to total assets ratio of 7.49% at September 30, 2007.

Stock Repurchase Program

Under previously disclosed stock repurchase plans, the Company purchased 272,840 shares of its common stock during the nine month period ended September 30, 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 September 30, 2008. At September 30, 2008, there were 1,203,040 shares available for repurchase under previously announced plans.

Dividend Declared

The NBT Board of Directors declared a fourth quarter cash dividend of $0.20 per share at a meeting held today. The dividend will be paid on December 15, 2008, to shareholders of record as of December 1, 2008.

Corporate Overview

NBT is a financial holding company headquartered in Norwich, NY, with total assets of $5.3 billion at September 30, 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. Hathaway Insurance Agency, Inc., based in Gloversville, NY, is a full-service insurance agency. On September 1, 2008, NBT Bancorp Inc. acquired Mang Insurance Agency, a full-service insurance agency based in Binghamton, NY. 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
 September 30,
Net Income            $      15,083  $      15,147 ($          64)       0%
Diluted Earnings Per
 Share                $        0.46  $        0.46  $        0.00        0%
Weighted Average
 Diluted Common
 Shares Outstanding      32,453,307     32,921,286       -467,979       -1%
Return on Average
 Assets (1)                    1.13%          1.17%         -0.04%      -3%
Return on Average
 Equity (1)                   14.58%         15.41%         -0.83%      -5%
Net Interest Margin(2)         3.94%          3.56%          0.38%      11%
                      =============  =============  =============  =======
Nine Months Ended
 September 30,
Net Income            $      43,456  $      41,343  $       2,113        5%
Diluted Earnings Per
 Share                $        1.34  $        1.22  $        0.12       10%
Weighted Average
 Diluted Common
 Shares Outstanding      32,315,744     33,765,835     -1,450,091       -4%
Return on Average
 Assets (1)                    1.11%          1.08%          0.03%       3%
Return on Average
 Equity (1)                   14.26%         13.77%          0.49%       4%
Net Interest Margin(2)         3.91%          3.61%          0.30%       8%
                      =============  =============  =============  =======
Asset Quality         September 30,   December 31,  September 30,
                           2008           2007           2007
                      -------------  -------------  -------------
Nonaccrual Loans      $      23,031  $      29,697  $      29,087
90 Days Past Due and
 Still Accruing       $       1,691  $         882  $       1,620
Total Nonperforming
 Loans                $      24,722  $      30,579  $      30,707
Other Real Estate
 Owned                $         855  $         560  $         917
Total Nonperforming
 Assets               $      25,577  $      31,139  $      31,624
Past Due Loans        $      24,880  $      25,914  $      24,044
Allowance for Loan
 and Lease Losses     $      55,803  $      54,183  $      54,808
Year-to-Date (YTD)
 Net Charge-Offs      $      17,840  $      26,498  $      12,433
Allowance for Loan
 and Lease Losses to
 Total Loans and
 Leases                        1.55%          1.57%          1.60%
Total Nonperforming
 Loans to Total Loans
 and Leases                    0.69%          0.88%          0.90%
Total Nonperforming
 Assets to Total
 Assets                        0.48%          0.60%          0.61%
Past Due Loans to
 Total Loans and
 Leases                        0.69%          0.75%          0.70%
Allowance for Loan
 and Lease Losses to
 Total Nonperforming
 Loans                       225.72%        177.19%        178.49%
Net Charge-Offs to
 YTD Average Loans
 and Leases (1)                0.67%          0.77%          0.49%
                      =============  =============  =============
Capital
Equity to Assets               7.89%          7.64%          7.49%
Book Value Per Share  $       12.95  $       12.29  $       11.97
Tangible Book Value
 Per Share            $        8.71  $        8.78  $        8.43
Tier 1 Leverage Ratio          7.04%          7.14%          7.06%
Tier 1 Capital Ratio           9.51%          9.85%          9.77%
Total Risk-Based
 Capital Ratio                10.77%         11.10%         11.02%
                      =============  =============  =============
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                           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)
Balance Sheet as of September
 30,
Loans and Leases                $ 3,607,321 $ 3,422,217  $ 185,104       5%
Earning Assets                  $ 4,899,934 $ 4,757,886  $ 142,048       3%
Total Assets                    $ 5,335,158 $ 5,151,072  $ 184,086       4%
Deposits                        $ 3,990,794 $ 3,950,065  $  40,729       1%
Stockholders' Equity            $   421,128 $   385,646  $  35,482       9%
                                =========== ===========  =========  ======
Average Balances
Three Months Ended September
 30,
Loans and Leases                $ 3,605,700 $ 3,437,798  $ 167,902       5%
Securities Available For Sale
(excluding unrealized gains or
 losses)                        $ 1,116,089 $ 1,142,009 ($  25,920)     -2%
Securities Held To Maturity     $   148,397 $   144,713  $   3,684       3%
Regulatory Equity Investment    $    40,401 $    33,637  $   6,764      20%
Short-Term Interest Bearing
 Accounts                       $     4,077 $     7,714 ($   3,637)    -47%
Total Earning Assets            $ 4,914,664 $ 4,765,871  $ 148,793       3%
Total Assets                    $ 5,301,640 $ 5,122,096  $ 179,544       4%
Interest Bearing Deposits       $ 3,258,301 $ 3,267,440 ($   9,139)      0%
Non-Interest Bearing Deposits   $   706,803 $   656,176  $  50,627       8%
Short-Term Borrowings           $   154,567 $   322,245 ($ 167,678)    -52%
Long-Term Borrowings            $   701,155 $   429,459  $ 271,696      63%
Total Interest Bearing
 Liabilities                    $ 4,114,023 $ 4,019,144  $  94,879       2%
Stockholders' Equity            $   411,459 $   389,863  $  21,596       6%
                                =========== ===========  =========  ======
Average Balances
Nine Months Ended September 30,
Loans and Leases                $ 3,544,787 $ 3,419,983  $ 124,804       4%
Securities Available For Sale
(excluding unrealized gains or
 losses)                        $ 1,112,582 $ 1,131,533 ($  18,951)     -2%
Securities Held To Maturity     $   153,010 $   144,693  $   8,317       6%
Regulatory Equity Investment    $    39,730 $    33,668  $   6,062      18%
Short-Term Interest Bearing
 Accounts                       $     6,517 $     8,523 ($   2,006)    -24%
Total Earning Assets            $ 4,856,626 $ 4,738,400  $ 118,226       2%
Total Assets                    $ 5,236,130 $ 5,096,608  $ 139,522       3%
Interest Bearing Deposits       $ 3,229,338 $ 3,273,359 ($  44,021)     -1%
Non-Interest Bearing Deposits   $   678,277 $   633,572  $  44,705       7%
Short-Term Borrowings           $   238,200 $   279,443 ($  41,243)    -15%
Long-Term Borrowings            $   615,383 $   453,457  $ 161,926      36%
Total Interest Bearing
 Liabilities                    $ 4,082,921 $ 4,006,259  $  76,662       2%
Stockholders' Equity            $   407,127 $   401,310  $   5,817       1%
                                =========== ===========  =========  ======
                                        September    December   September
NBT Bancorp Inc. and Subsidiaries           30,         31,         30,
Consolidated Balance Sheets (unaudited)    2008        2007        2007
                                        ----------- ----------- -----------
(in thousands)
ASSETS
Cash and due from banks                 $   141,167 $   155,495 $   139,453
Short term interest bearing accounts          2,426       7,451       9,028
Securities available for sale, at fair
 value                                    1,101,103   1,132,230   1,137,890
Securities held to maturity (fair value
 of $144,303, $149,519 and $143,483 at
 September 30, 2008, December 31, 2007
 and September 30, 2007, respectively)      149,952     149,111     143,447
Federal Reserve and Federal Home Loan
 Bank stock                                  39,122      38,102      33,218
Loans and leases                          3,607,321   3,455,851   3,422,217
Less allowance for loan and lease
 losses                                      55,803      54,183      54,808
                                        =========== =========== ===========
  Net loans and leases                    3,551,518   3,401,668   3,367,409
Premises and equipment, net                  65,201      64,042      64,406
Goodwill                                    113,514     103,398     103,400
Intangible assets, net                       24,242      10,173      10,585
Bank owned life insurance                    45,037      43,614      43,134
Other assets                                101,876      96,492      99,102
                                        ----------- ----------- -----------
TOTAL ASSETS                            $ 5,335,158 $ 5,201,776 $ 5,151,072
                                        =========== =========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits:
 Demand (noninterest bearing)           $   703,406 $   666,698 $   671,729
 Savings, NOW, and money market           1,874,608   1,614,289   1,595,622
 Time                                     1,412,780   1,591,106   1,682,714
                                        ----------- ----------- -----------
  Total deposits                          3,990,794   3,872,093   3,950,065
Short-term borrowings                       150,477     368,467     305,865
Long-term debt                              633,462     424,887     377,119
Trust preferred debentures                   75,422      75,422      75,422
Other liabilities                            63,875      63,607      56,955
                                        ----------- ----------- -----------
  Total liabilities                       4,914,030   4,804,476   4,765,426
Total stockholders' equity                  421,128     397,300     385,646
                                        =========== =========== ===========
TOTAL LIABILITIES AND STOCKHOLDERS'
 EQUITY                                 $ 5,335,158 $ 5,201,776 $ 5,151,072
                                        =========== =========== ===========
                                    Three months ended  Nine months ended
NBT Bancorp Inc. and Subsidiaries     September 30,       September 30,
Consolidated Statements of Income      2008      2007      2008      2007
 (unaudited)                        --------- --------- --------- ---------
(in thousands, except per share
 data)
Interest, fee and dividend income:
Loans and leases                    $  58,154 $  61,183 $ 173,991 $ 181,680
Securities available for sale          13,451    13,847    40,614    40,876
Securities held to maturity             1,343     1,471     4,335     4,440
Other                                     673       680     2,187     2,139
                                    --------- --------- --------- ---------
  Total interest, fee and dividend
   income                              73,621    77,181   221,127   229,135
                                    --------- --------- --------- ---------
Interest expense:
Deposits                               18,351    27,062    59,761    79,996
Short-term borrowings                     763     3,885     4,465     9,895
Long-term debt                          6,310     3,770    16,241    12,253
Trust preferred debentures              1,154     1,277     3,547     3,817
                                    --------- --------- --------- ---------
  Total interest expense               26,578    35,994    84,014   105,961
                                    --------- --------- --------- ---------
Net interest income                    47,043    41,187   137,113   123,174
Provision for loan and lease losses     7,179     4,788    19,460    16,654
                                    --------- --------- --------- ---------
Net interest income after provision
 for loan and lease losses             39,864    36,399   117,653   106,520
                                    --------- --------- --------- ---------
Noninterest income:
Trust                                   1,720     1,701     5,593     4,930
Service charges on deposit accounts     7,414     6,195    20,877    15,600
ATM and debit card fees                 2,334     2,159     6,656     6,096
Broker/dealer and insurance revenue     2,338     1,027     4,811     3,203
Net securities gains                    1,510     1,484     1,543     1,500
Bank owned life insurance income          491       467     1,423     1,351
Retirement plan administration fees     1,461     1,586     4,840     4,779
Other                                   1,694     1,908     5,733     5,750
                                    --------- --------- --------- ---------
  Total noninterest income             18,962    16,527    51,476    43,209
                                    --------- --------- --------- ---------
Noninterest expense:
Salaries and employee benefits         16,850    15,876    50,526    44,862
Office supplies and postage             1,322     1,354     3,992     3,984
Occupancy                               3,359     2,928    10,396     8,682
Equipment                               1,908     1,797     5,595     5,567
Professional fees and outside
 services                               2,205     2,256     7,825     5,840
Data processing and communications      3,155     2,779     9,440     8,501
Amortization of intangible assets         462       413     1,231     1,232
Loan collection and other real
 estate owned                             505       431     1,802     1,036
Impairment on lease residual assets     2,000         -     2,000         -
Other operating                         5,292     3,393    13,708    10,409
                                    --------- --------- --------- ---------
  Total noninterest expense            37,058    31,227   106,515    90,113
                                    --------- --------- --------- ---------
Income before income taxes             21,768    21,699    62,614    59,616
Income taxes                            6,685     6,552    19,158    18,273
                                    --------- --------- --------- ---------
   Net income                       $  15,083 $  15,147 $  43,456 $  41,343
                                    --------- --------- --------- ---------
Earnings Per Share:
     Basic                          $    0.47 $    0.46 $    1.36 $    1.23
     Diluted                        $    0.46 $    0.46 $    1.34 $    1.22
                                    ========= ========= ========= =========
NBT Bancorp Inc. and Subsidiaries
Quarterly Consolidated
 Statements of Income             3Q       2Q       1Q       4Q       3Q
 (unaudited)                     2008     2008     2008     2007     2007
                               -------- -------- -------- -------- --------
(in thousands, except per
 share data)
Interest, fee and dividend
 income:
Loans and leases               $ 58,154 $ 57,220 $ 58,617 $ 60,817 $ 61,183
Securities available for sale    13,451   13,417   13,746   13,971   13,847
Securities held to maturity       1,343    1,478    1,514    1,458    1,471
Other                               673      739      775      736      680
                               -------- -------- -------- -------- --------
  Total interest, fee and
   dividend income               73,621   72,854   74,652   76,982   77,181
                               -------- -------- -------- -------- --------
Interest expense:
Deposits                         18,351   18,712   22,698   26,578   27,062
Short-term borrowings               763    1,362    2,340    3,048    3,885
Long-term debt                    6,310    5,629    4,302    4,233    3,770
Trust preferred debentures        1,154    1,146    1,247    1,270    1,277
                               -------- -------- -------- -------- --------
  Total interest expense         26,578   26,849   30,587   35,129   35,994
                               -------- -------- -------- -------- --------
Net interest income              47,043   46,005   44,065   41,853   41,187
Provision for loan and lease
 losses                           7,179    5,803    6,478   13,440    4,788
                               -------- -------- -------- -------- --------
Net interest income after
 provision for loan and lease
 losses                          39,864   40,202   37,587   28,413   36,399
                               -------- -------- -------- -------- --------
Noninterest income:
Trust                             1,720    2,099    1,774    1,584    1,701
Service charges on deposit
 accounts                         7,414    6,938    6,525    7,142    6,195
ATM and debit card fees           2,334    2,225    2,097    2,089    2,159
Broker/dealer and insurance
 fees                             2,338    1,366    1,107    1,052    1,027
Net securities gains              1,510       18       15      613    1,484
Bank owned life insurance
 income                             491      480      452      480      467
Retirement plan administration
 fees                             1,461    1,671    1,708    1,557    1,586
Other                             1,694    1,622    2,417    1,973    1,908
                               -------- -------- -------- -------- --------
  Total noninterest income       18,962   16,419   16,095   16,490   16,527
                               -------- -------- -------- -------- --------
Noninterest expense:
Salaries and employee benefits   16,850   16,906   16,770   14,654   15,876
Office supplies and postage       1,322    1,331    1,339    1,136    1,354
Occupancy                         3,359    3,427    3,610    2,948    2,928
Equipment                         1,908    1,862    1,825    1,855    1,797
Professional fees and outside
 services                         2,205    2,521    3,099    3,295    2,256
Data processing and
 communications                   3,155    3,115    3,170    2,899    2,779
Amortization of intangible
 assets                             462      378      391      413      413
Loan collection and other real
 estate owned                       505      730      567      597      431
Impairment on lease residual
 assets                           2,000        -        -        -        -
Other operating                   5,292    5,153    3,263    4,607    3,393
                               -------- -------- -------- -------- --------
  Total noninterest expense      37,058   35,423   34,034   32,404   31,227
                               -------- -------- -------- -------- --------
Income before income taxes       21,768   21,198   19,648   12,499   21,699
Income taxes                      6,685    6,541    5,932    3,514    6,552
                               -------- -------- -------- -------- --------
   Net income                  $ 15,083 $ 14,657 $ 13,716 $  8,985 $ 15,147
                               ======== ======== ======== ======== ========
Earnings per share:
   Basic                       $   0.47 $   0.46 $   0.43 $   0.28 $   0.46
   Diluted                     $   0.46 $   0.45 $   0.43 $   0.28 $   0.46
                               ======== ======== ======== ======== ========

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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