NBT Bancorp Inc. Announces Third Quarter Diluted Earnings Per Share Of $0.43; Strong Loan Growth

Stock Repurchase Program

Under previously disclosed stock repurchase plans, the Company purchased 769,568 shares of its common stock during the nine month period ended September 30, 2012, for a total of $15.5 million at an average price of $20.13 per share. At September 30, 2012, there were 748,013 shares available for repurchase under a previously disclosed repurchase plan, which expires on December 31, 2013.

Dividend

The NBT Board of Directors declared a 2012 fourth-quarter cash dividend of $0.20 per share at a meeting held today. The dividend will be paid on December 15, 2012 to shareholders of record as of December 1, 2012.

Corporate Overview

NBT Bancorp Inc. is a financial holding company headquartered in Norwich, N.Y., with total assets of $6.0 billion at September 30, 2012. The company primarily operates through NBT Bank, N.A., a full-service community bank with three divisions, and through two financial services companies. NBT Bank, N.A. has 137 locations, including 97 NBT Bank offices in upstate New York, northwestern Vermont and western Massachusetts, 35 Pennstar Bank offices in northeastern Pennsylvania, and 5 Hampshire First Bank offices in southern New Hampshire. EPIC Advisors, Inc., based in Rochester, N.Y., is a full-service 401(k) plan recordkeeping firm. Mang Insurance Agency, LLC, based in Norwich, N.Y., 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.hampshirefirst.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 update forward-looking statements to reflect subsequent circumstances or events.

	NBT Bancorp Inc. and Subsidiaries
	SELECTED FINANCIAL HIGHLIGHTS
	(unaudited)
	2012	2011	Net Change	Percent Change
	(dollars in thousands, except per share data)
Three Months Ended September 30,
Net Income	$14,535	$15,217	($682)	-4%
Diluted Earnings Per Share	$0.43	$0.45	($0.02)	-4%
Weighted Average Diluted Common Shares Outstanding	33,961,375	33,567,564	393,811	1%
Return on Average Assets (1)	0.97%	1.12%	-15 bp	-13%
Return on Average Equity (1)	10.13%	11.21%	-108 bp	-10%
Net Interest Margin (2)	3.90%	4.14%	-24 bp	-6%
Nine Months Ended September 30,
Net Income	$41,442	$44,179	($2,737)	-6%
Diluted Earnings Per Share	$1.23	$1.29	($0.06)	-5%
Weighted Average Diluted Common Shares Outstanding	33,626,071	34,159,833	(533,762)	-2%
Return on Average Assets (1)	0.95%	1.09%	-14 bp	-13%
Return on Average Equity (1)	9.97%	10.95%	-98 bp	-9%
Net Interest Margin (2)	3.87%	4.13%	-26 bp	-6%
Asset Quality	September 30, 2012	December 31, 2011
Nonaccrual Loans	$42,661	$38,290
90 Days Past Due and Still Accruing	$2,963	$3,190
Total Nonperforming Loans	$45,624	$41,480
Other Real Estate Owned	$1,863	$2,160
Total Nonperforming Assets	$47,487	$43,640
Allowance for Loan and Lease Losses	$70,734	$71,334
Allowance for Loan and Lease Losses to Total Loans and Leases	1.66%	1.88%
Total Nonperforming Loans to Total Loans and Leases	1.07%	1.09%
Total Nonperforming Assets to Total Assets	0.79%	0.78%
Past Due Loans to Total Loans and Leases	0.65%	0.89%
Allowance for Loan and Lease Losses to Total Nonperforming Loans	155.04%	171.97%
Net Charge-Offs to YTD Average Loans and Leases (1)	0.47%	0.56%
Capital
Equity to Assets	9.56%	9.61%
Book Value Per Share	$17.09	$16.23
Tangible Book Value Per Share (3)	$12.06	$11.70
Tier 1 Leverage Ratio	8.51%	8.74%
Tier 1 Capital Ratio	10.82%	11.56%
Total Risk-Based Capital Ratio	12.07%	12.81%
Quarterly Common Stock Price	2012		2011
Quarter End	High	Low	High	Low
March 31	$24.10	$20.75	$24.98	$21.55
June 30	$22.50	$19.19	$23.32	$20.62
September 30	$22.89	$19.91	$23.25	$17.05
December 31			$22.63	$17.47
(1) Annualized
(2) Calculated on a FTE basis
(3) Tangible equity (total equity minus intangible assets) divided by common shares outstanding

NBT Bancorp Inc. and Subsidiaries	September 30,	December 31,
Consolidated Balance Sheets (unaudited)	2012	2011
(in thousands)
ASSETS
Cash and due from banks	$ 137,747	$ 128,517
Short term interest bearing accounts	2,693	864
Securities available for sale, at fair value	1,191,107	1,244,619
Securities held to maturity (fair value of $62,401 and $72,198 at September 30, 2012 and December 31, 2011, respectively)	61,302	70,811
Trading securities	3,851	3,062
Federal Reserve and Federal Home Loan Bank stock	28,706	27,020
Loans and leases	4,251,119	3,800,203
Less allowance for loan and lease losses	70,734	71,334
Net loans and leases	4,180,385	3,728,869
Premises and equipment, net	77,326	74,541
Goodwill	152,251	132,029
Intangible assets, net	17,346	18,194
Bank owned life insurance	79,854	77,626
Other assets	96,348	92,254
TOTAL ASSETS	$ 6,028,916	$ 5,598,406
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits:
Demand (noninterest bearing)	$ 1,187,502	$ 1,052,906
Savings, NOW, and money market	2,599,556	2,381,116
Time	1,018,957	933,127
Total deposits	4,806,015	4,367,149
Short-term borrowings	137,365	181,592
Long-term debt	367,144	370,344
Trust preferred debentures	75,422	75,422
Other liabilities	66,309	65,789
Total liabilities	5,452,255	5,060,296
Total stockholders' equity	576,661	538,110
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$ 6,028,916	$ 5,598,406

	Three Months Ended		Nine Months Ended
NBT Bancorp Inc. and Subsidiaries	September 30,		September 30,
Consolidated Statements of Income (unaudited)	2012	2011	2012	2011
(in thousands, except per share data)
Interest, fee and dividend income:
Loans and leases	$ 53,817	$ 50,991	$ 154,534	$ 152,977
Securities available for sale	6,550	7,771	21,024	23,622
Securities held to maturity	572	680	1,829	2,225
Other	348	342	1,153	1,275
Total interest, fee and dividend income	61,287	59,784	178,540	180,099
Interest expense:
Deposits	4,544	5,352	14,521	17,690
Short-term borrowings	60	56	149	166
Long-term debt	3,640	3,621	10,801	10,783
Trust preferred debentures	436	394	1,319	1,683
Total interest expense	8,680	9,423	26,790	30,322
Net interest income	52,607	50,361	151,750	149,777
Provision for loan and lease losses	4,755	5,175	13,329	15,161
Net interest income after provision for loan and lease losses	47,852	45,186	138,421	134,616
Noninterest income:
Insurance and other financial services revenue	5,591	5,127	17,024	15,925
Service charges on deposit accounts	4,626	5,532	13,538	16,059
ATM and debit card fees	3,378	3,135	9,403	8,731
Retirement plan administration fees	2,718	2,295	7,462	6,734
Trust	2,242	2,090	6,683	6,384
Bank owned life insurance income	639	674	2,228	2,369
Net securities gains	26	12	578	98
Other	2,407	1,329	8,449	3,881
Total noninterest income	21,627	20,194	65,365	60,181
Noninterest expense:
Salaries and employee benefits	26,641	25,068	78,358	74,107
Occupancy	4,437	3,887	13,150	12,396
Data processing and communications	3,352	3,054	10,041	9,085
Professional fees and outside services	2,735	2,215	7,848	6,369
Equipment	2,435	2,288	7,224	6,658
Office supplies and postage	1,597	1,531	4,842	4,418
FDIC expenses	939	920	2,812	3,381
Advertising	701	685	2,308	2,286
Amortization of intangible assets	870	782	2,530	2,286
Loan collection and other real estate owned	614	676	2,051	1,838
Merger	558	155	1,895	155
Other operating	4,552	3,785	12,236	10,285
Total noninterest expense	49,431	45,046	145,295	133,264
Income before income taxes	20,048	20,334	58,491	61,533
Income taxes	5,513	5,117	17,049	17,354
Net income	$ 14,535	$ 15,217	$ 41,442	$ 44,179
Earnings Per Share:
Basic	$ 0.43	$ 0.46	$ 1.24	$ 1.30
Diluted	$ 0.43	$ 0.45	$ 1.23	$ 1.29

NBT Bancorp Inc. and Subsidiaries	3Q	2Q	1Q	4Q	3Q
Quarterly Consolidated Statements of Income (unaudited)	2012	2012	2012	2011	2011
(in thousands, except per share data)
Interest, fee and dividend income:
Loans and leases	$ 53,817	$ 50,509	$ 50,208	$ 51,393	$ 50,991
Securities available for sale	6,550	7,108	7,366	7,461	7,771
Securities held to maturity	572	617	640	661	680
Other	348	413	392	383	342
Total interest, fee and dividend income	61,287	58,647	58,606	59,898	59,784
Interest expense:
Deposits	4,544	4,834	5,143	5,330	5,352
Short-term borrowings	60	48	41	39	56
Long-term debt	3,640	3,580	3,581	3,621	3,621
Trust preferred debentures	436	434	449	409	394
Total interest expense	8,680	8,896	9,214	9,399	9,423
Net interest income	52,607	49,751	49,392	50,499	50,361
Provision for loan and lease losses	4,755	4,103	4,471	5,576	5,175
Net interest income after provision for loan and lease losses	47,852	45,648	44,921	44,923	45,186
Noninterest income:
Insurance and other financial services revenue	5,591	5,279	6,154	4,918	5,127
Service charges on deposit accounts	4,626	4,571	4,341	5,405	5,532
ATM and debit card fees	3,378	3,063	2,962	2,911	3,135
Retirement plan administration fees	2,718	2,411	2,333	2,184	2,295
Trust	2,242	2,312	2,129	2,480	2,090
Bank owned life insurance income	639	618	971	716	674
Net securities gains	26	97	455	52	12
Other	2,407	2,331	3,711	1,464	1,329
Total noninterest income	21,627	20,682	23,056	20,130	20,194
Noninterest expense:
Salaries and employee benefits	26,641	24,992	26,725	25,105	25,068
Occupancy	4,437	4,222	4,491	3,967	3,887
Data processing and communications	3,352	3,431	3,258	3,186	3,054
Professional fees and outside services	2,735	2,388	2,725	2,552	2,215
Equipment	2,435	2,409	2,380	2,206	2,288
Office supplies and postage	1,597	1,574	1,671	1,655	1,531
FDIC expenses	939	942	931	886	920
Advertising	701	805	802	1,174	685
Amortization of intangible assets	870	841	819	760	782
Loan collection and other real estate owned	614	799	638	793	676
Merger	558	826	511	649	155
Other operating	4,552	4,161	3,523	4,479	3,785
Total noninterest expense	49,431	47,390	48,474	47,412	45,046
Income before income taxes	20,048	18,940	19,503	17,641	20,334
Income taxes	5,513	5,683	5,853	3,919	5,117
Net income	$ 14,535	$ 13,257	$ 13,650	$ 13,722	$ 15,217
Earnings per share:
Basic	$ 0.43	$ 0.40	$ 0.41	$ 0.42	$ 0.46
Diluted	$ 0.43	$ 0.40	$ 0.41	$ 0.41	$ 0.45

Three Months ended September 30,		2012			2011
(dollars in thousands)	Average Balance	Interest	Yield/ Rates	Average Balance	Interest	Yield/ Rates
ASSETS
Short-term interest bearing accounts	$ 10,392	$ 11	0.43%	$ 25,088	$ 11	0.17%
Securities available for sale (1)(excluding unrealized gains or losses)	1,168,326	7,023	2.39%	1,120,083	8,317	2.95%
Securities held to maturity (1)	62,746	861	5.46%	74,482	1,026	5.46%
Investment in FRB and FHLB Banks	28,706	337	4.67%	27,022	329	4.84%
Loans and leases (2)	4,197,046	54,046	5.12%	3,686,693	51,227	5.51%
Total interest earning assets	$ 5,467,216	$ 62,278	4.53%	$ 4,933,368	$ 60,910	4.90%
Other assets	504,194			442,275
Total assets	$ 5,971,410			$ 5,375,643
LIABILITIES AND STOCKHOLDERS' EQUITY
Money market deposit accounts	$1,111,624	$ 495	0.18%	$1,036,572	$ 811	0.31%
NOW deposit accounts	686,768	377	0.22%	631,284	483	0.30%
Savings deposits	706,927	149	0.08%	615,168	170	0.11%
Time deposits	1,035,868	3,523	1.35%	882,896	3,888	1.75%
Total interest bearing deposits	$ 3,541,187	$ 4,544	0.51%	$ 3,165,920	$ 5,352	0.67%
Short-term borrowings	178,277	60	0.13%	172,370	56	0.13%
Trust preferred debentures	75,422	436	2.30%	75,422	394	2.07%
Long-term debt	367,146	3,640	3.94%	370,349	3,621	3.88%
Total interest bearing liabilities	$ 4,162,032	$ 8,680	0.83%	$ 3,784,061	$ 9,423	0.99%
Demand deposits	1,173,638			983,318
Other liabilities	64,860			69,860
Stockholders' equity	570,880			538,404
Total liabilities and stockholders' equity	$ 5,971,410			$ 5,375,643
Net interest income (FTE)		53,598			51,487
Interest rate spread			3.70%			3.91%
Net interest margin			3.90%			4.14%
Taxable equivalent adjustment		991			1,126
Net interest income		$ 52,607			$ 50,361
(1) Securities are shown at average amortized cost
(2) For purposes of these computations, nonaccrual loans are included in the average loan balances outstanding

Nine Months ended September 30,		2012			2011
(dollars in thousands)	Average Balance	Interest	Yield/ Rates	Average Balance	Interest	Yield/ Rates
ASSETS
Short-term interest bearing accounts	$ 64,040	$ 131	0.27%	$ 97,973	$ 191	0.26%
Securities available for sale (1)(excluding unrealized gains or losses)	1,196,389	22,483	2.51%	1,105,777	25,330	3.06%
Securities held to maturity (1)	67,237	2,757	5.48%	84,660	3,353	5.29%
Investment in FRB and FHLB Banks	27,874	1,022	4.90%	27,112	1,084	5.34%
Loans and leases (2)	3,982,486	155,230	5.21%	3,650,667	153,678	5.63%
Total interest earning assets	$ 5,338,026	$ 181,623	4.54%	$ 4,966,189	$ 183,636	4.94%
Other assets	476,575			428,959
Total assets	$ 5,814,601			$ 5,395,148
LIABILITIES AND STOCKHOLDERS' EQUITY
Money market deposit accounts	$ 1,105,616	$ 1,646	0.20%	$ 1,070,971	$ 2,937	0.37%
NOW deposit accounts	695,502	1,387	0.27%	667,012	1,745	0.35%
Savings deposits	675,346	391	0.08%	599,173	517	0.12%
Time deposits	988,596	11,097	1.50%	911,161	12,491	1.83%
Total interest bearing deposits	$ 3,465,060	$ 14,521	0.56%	$ 3,248,317	$ 17,690	0.73%
Short-term borrowings	170,903	149	0.12%	153,857	166	0.14%
Trust preferred debentures	75,422	1,319	2.34%	75,422	1,683	2.98%
Long-term debt	368,592	10,801	3.91%	369,930	10,783	3.90%
Total interest bearing liabilities	$ 4,079,977	$ 26,790	0.88%	$ 3,847,526	$ 30,322	1.05%
Demand deposits	1,116,210			940,332
Other liabilities	63,232			67,968
Stockholders' equity	555,182			539,322
Total liabilities and stockholders' equity	$ 5,814,601			$ 5,395,148
Net interest income (FTE)		154,833			153,314
Interest rate spread			3.67%			3.89%
Net interest margin			3.87%			4.13%
Taxable equivalent adjustment		3,083			3,537
Net interest income		$ 151,750			$ 149,777
(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)
(In thousands)	September 30, 2012	December 31, 2011
Residential real estate mortgages	$ 650,448	$ 581,511
Commercial	697,213	611,298
Commercial real estate mortgages	1,083,675	888,879
Real estate construction and development	99,181	93,977
Agricultural and agricultural real estate mortgages	112,822	108,423
Consumer	1,031,572	946,470
Home equity	576,208	569,645
Total loans and leases	$ 4,251,119	$ 3,800,203

CONTACT: Martin A. Dietrich, CEO
         Michael J. Chewens, CFO
         NBT Bancorp Inc.
         52 South Broad Street
         Norwich, NY 13815
         607-337-6119

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