NBT Bancorp Inc. Announces Quarterly Earnings per Share of $0.46, Up 28% From the Second Quarter; Declares Cash Dividend

Market Wire, October, 2007

NBT Bancorp Inc. (NBT) (NASDAQ: NBTB) reported today that net income for the three months ended September 30, 2007 was $15.1 million, up $3.1 million or 25.6%, from the three months ended June 30, 2007. Net income per diluted share for the three months ended September 30, 2007, was $0.46 per share, compared with $0.36 per share for the previous quarter. Return on average assets and return on average equity were 1.17% and 15.41%, respectively, for the three months ended September 30, 2007, compared with 0.95% and 11.90%, respectively, for the three months ended June 30, 2007. The increase in net income on a linked quarter basis, was primarily the result of a $5.0 million decrease in the provision for loan and lease losses and a $2.5 million increase in noninterest income. This was partially offset by a $3.2 million increase in noninterest expense from the previous period.

Net income for the three months ended September 30, 2007 was $15.1 million, up 4.2% or $0.6 million from net income of $14.5 million reported for the same period in 2006. Net income per diluted share for the three months ended September 30, 2007, was $0.46 per share, compared with $0.43 per share for the same period in 2006. Return on average assets and return on average equity were 1.17% and 15.41%, respectively, for the three months ended September 30, 2007, compared with 1.15% and 14.89%, respectively, for the same period in 2006. The increase in net income for the three months ended September 30, 2007 compared to the same period last year, was primarily the result of a $4.0 million increase in noninterest income. This increase in noninterest income was partially offset by a $2.3 million increase in provision for loan and lease losses and a $1.3 million increase in noninterest expense.

Net income for the nine months ended September 30, 2007 was $41.3 million, down 2.3% or $1.0 million from net income of $42.3 million reported for the same period in 2006. Net income per diluted share for the nine month period ended September 30, 2007 was $1.22 per share, compared with $1.24 per share for the same period in 2006. Return on average assets and return on average equity were 1.08% and 13.77%, respectively, for the nine months ended September 30, 2007, compared with 1.16% and 14.93%, respectively, for the same period in 2006. The decrease in net income for the nine months ended September 30, 2007 was primarily the result of a $10.7 million increase in provision for loan and lease losses compared to the same period last year. This increase in expense was partially offset by a $6.9 million increase in noninterest income and a $2.0 million decrease in noninterest expense.

The comparability of financial information for the nine months ended September 30, 2007 and 2006, is affected by the acquisition of CNB Bancorp, Inc. ("CNB"). Operating results include the operations of CNB from the date of acquisition, which was February 10, 2006.

Loan and Lease Quality and Provision for Loan and Lease Losses

Nonperforming loans at September 30, 2007 were $30.7 million or 0.90% of total loans and leases compared with $34.4 million or 1.00% at June 30, 2007, $15.3 million or 0.45% of total loans and leases at December 31, 2006, and $14.5 million or 0.43% of total loans and leases at September 30, 2006. The increase during the second quarter of 2007 was primarily due to the addition of one owner-occupied commercial real estate relationship and several dairy credits during the quarter. The decrease in nonperforming loans during the third quarter was due primarily to commercial loan charge-offs and payoffs during the period as well as loan sales. Annualized net charge-offs to average loans and leases for the nine months ended September 30, 2007, were 0.49%, compared with 0.21% for the nine months ended September 30, 2006 and 0.26% for the year ended December 31, 2006. The Company's allowance for loan and lease losses was 1.60% of loans and leases at September 30, 2007, compared with 1.50% at September 30, 2006, and 1.48% at December 31, 2006.

For the three months and nine months ended September 30, 2007, the provision for loan and lease losses totaled $4.8 million and $16.7 million, respectively, compared with $2.5 million and $5.9 million for the same periods in 2006. The increase in the provision is primarily due to the increase in nonperforming loans and charge-offs.

Net Interest Income

Net interest income was up 0.1% to $41.2 million for the three months ended September 30, 2007, compared with $40.9 million for the same period a year ago. Despite a decrease in the Company's FTE net interest margin, from 3.60% for the three months ended September 30, 2006, to 3.56% for the same period in 2007, the Company experienced a slight increase in net interest income that was primarily attributable to a 2.0% growth in average earning assets. The growth in average earning assets was due primarily to consumer loan growth.

Net interest income was up 0.1% to $123.2 million for the nine months ended September 30, 2007, compared with $122.4 million for the same period a year ago. Despite a decrease in the Company's fully taxable equivalent (FTE) net interest margin, from 3.73% for the nine months ended September 30, 2006, to 3.61% for the same period in 2007, the Company experienced a slight increase in net interest income that was primarily attributable to a 4.5% growth in average earning assets. The growth in average earning assets was due primarily to consumer loan growth.