NB&T Financial Group, Inc Announces Third Quarter & Nine Month Financial Results

Business Wire, Oct 20, 2006

WILMINGTON, Ohio -- NB&T Financial Group, Inc. (Nasdaq:NBTF), parent company of The National Bank and Trust Company, Wilmington, Ohio, announced a net loss for the third quarter of 2006 of $88,000, or $.03 per diluted share, compared to net income of $779,000, or $.25 per diluted share, for the same period last year. Earnings decreased primarily due to security losses of $1.2 million in the third quarter of 2006. The securities were sold to reduce borrowings and fund a branch sale completed on October 13, 2006. The branch sale resulted in a pre-tax gain of approximately $1.1 million, which will be recognized during the fourth quarter.

Net income for the nine months ended September 30, 2006 was $327,000, compared to $3.14 million for the same nine months last year. The decrease is a result of approximately $1.4 million in prepayment penalties from the early payoff of approximately $47.2 million in Federal Home Loan Bank debt in February 2006 and the security losses previously mentioned. Net interest income also decreased $720,000 from the same period last year.

Commenting on these results, President & CEO John Limbert said, "The third quarter marks the completion of multiple initiatives all designed to reduce the company's interest rate risk, improve its net interest margin and position ourselves for future growth. The obvious short-term result of our initiatives - selling securities to repay debt - has had a negative impact on income. Additionally, we have reduced the size of our company during 2006 by $80 million dollars."

Limbert continued, "It is important to note that the reduction in size of our company is the result of securities sales and debt repayment. Over the last twelve months the real story is the $14 million growth in our loan portfolio and the $12 million growth in our deposit base. These positive trends reflect the efforts of our associates to serve the communities we are privileged to operate in!"

Non-interest expenses for the third quarter were virtually flat versus the second quarter and down, excluding the FHLB prepayment penalty, for the nine-month period in 2006 versus 2005. The bank's net interest margin, expressed as a percentage, also improved versus the second quarter, rising to 3.25% versus 3.12% in the second quarter.

On September 19, 2006 the Board of Directors declared a dividend of $0.27 per share, payable October 27, 2006 to shareholders of record on September 30, 2006. This amount of dividend represents a 3.8% increase from the third quarter of 2005.

The National Bank and Trust Company, with assets of $571 million, operates 17 banking offices and an insurance subsidiary, NB&T Insurance Agency, Inc., in Clinton, Clermont, Brown, Warren, and Highland counties.

Forward-looking Statements

The information in this press release contains forward-looking statements, including certain projections, plans and forecasts of expected future performance that are not historical facts and are subject to a number of risks and uncertainties. Those statements include words such as "will" or "expects." Actual results and performance could differ materially from those contemplated or implied by these forward-looking statements. For a summary of important factors that could affect the matters discussed in NB&T Financial Group's forward-looking statements, please refer to the "Risk Factors" section of NB&T Financial Group's Annual Report on Form 10-K filed with the Securities and Exchange Commission (SEC) on March 16, 2006, available at the SEC's Internet site (www.sec.gov). NB&T Financial Group undertakes no obligation to update or revise these statements following the date of this release.

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