ex99_1.htm

FOR IMMEDIATE RELEASE

ATTENTION: FINANCIAL AND BUSINESS EDITORS

Contact:

Martin A. Dietrich, CEO

Michael J. Chewens, CFO

NBT Bancorp Inc.

52 South Broad Street

Norwich, NY 13815

607-337-6119

NBT BANCORP INC. ANNOUNCES ANNUAL EARNINGS OF $57.4 MILLION AND SECOND HIGHEST EARNINGS IN COMPANY’S HISTORY AT $1.66; DECLARES CASH DIVIDEND

NORWICH, NY (January 24, 2011) – NBT Bancorp Inc. (NBT) (NASDAQ: NBTB) reported today net income per diluted share for the year ended December 31, 2010 was $1.66 per share, as compared with $1.53 per share for the year ended December 31, 2009. Return on average assets and return on average equity were 1.05% and 10.92%, respectively, for the year ended December 31, 2010, compared with 0.96% and 10.90%, respectively, for the year ended December 31, 2009. Net interest margin (on a fully taxable equivalent basis (“FTE”)) was 4.15% for the year ended December 31, 2010, up 11 basis points (“bp”) from 4.04% for the year ended December 31, 2009. Net income for the year ended December 31, 2010 was $57.4 million, up $5.4 million, or 10.4%, from the year ended December 31, 2009.

Net income per diluted share for the three months ended December 31, 2010 was $0.42, as compared with $0.40 per share for the three months ended December 31, 2009. Annualized return on average assets and return on average equity were 1.05% and 10.68%, respectively, for the three months ended December 31, 2010, compared with 1.00% and 10.92%, respectively, for the three months ended December 31, 2009. FTE net interest margin was 4.09% for the three months ended December 31, 2010, down 6 bp from 4.15% for the three months ended December 31, 2009. Net income for the three months ended December 31, 2010 was $14.4 million, up $0.6 million, or 4.6%, from $13.8 million for the fourth quarter last year.

Selected highlights for 2010 include:

Net income of $57.4 million approached our record high of $58.4 million in 2008.

Diluted earnings per share of $1.66 was the second highest in the history of the Company.

Asset quality indicators continued to stabilize. While nonperforming and potential problem loans are up slightly from 2009, past due loans and net charge-offs are both down from 2009.

Net interest margin of 4.15% in 2010 was the highest since 2003.

Noninterest income of $83.9 million in 2010 was an all-time high.

Continued strategic expansion in Queensbury and Schenectady, NY and Williston, VT during 2010.

NBT President and CEO Martin Dietrich said, “I am pleased to report that NBT achieved near record results in 2010, including the second highest net income and earnings per share levels in the history of the Company. While the economy and the financial services industry continued to face challenges in 2010, our team remained focused on aggressively managing our conservative banking strategy, as well as continued strategic investment and new market expansion to support future growth. Ultimately, our success flows directly from the quality of our team members and their commitment to serving the needs of our customers.”

Page 1 of 13

Loan and Lease Quality and Provision for Loan and Lease Losses

Past due loans as a percentage of total loans has improved to 0.86% at December 31, 2010, as compared with 0.89% at December 31, 2009. Nonperforming loans increased slightly to $44.8 million or 1.24% of total loans and leases at December 31, 2010 compared with $41.3 million or 1.13% at December 31, 2009, primarily due to one large commercial credit of approximately $2.7 million.

Net charge-offs for the year ended December 31, 2010 were $25.1 million compared to $25.4 million for the year ended December 31, 2009. Net charge-offs to average loans and leases for the year ended December 31, 2010 was 0.69%, a slight improvement from 0.70% for the year ended December 31, 2009. Net charge-offs for the three months ended December 31, 2010 were $7.3 million compared to $6.7 million for the same period in 2009. The annualized net charge-off ratio for the three months ended December 31, 2010 was 0.81% compared to 0.74% for the three months ended December 31, 2009. The primary driver for this increase was the charge-off of one large commercial credit of approximately $1.2 million which was previously fully provided for in the quarter ending September 30, 2010.

The allowance for loan and lease losses totaled $71.2 million at December 31, 2010 as compared with $66.6 million at December 31, 2009. The allowance for loan and lease losses as a percentage of loans and leases was 1.97% at December 31, 2010 as compared to 1.83% at December 31, 2009. The increase in the allowance for loan and lease losses is primarily due to an increase in the general allocation of the allowance for loan and lease losses relative to certain portfolios, including commercial, residential and home equity loans.

The Company recorded a provision for loan and lease losses of $29.8 million during the year ended December 31, 2010, as compared with $33.4 million during the year ended December 31, 2009. The Company recorded a provision for loan and lease losses of $6.7 million during the fourth quarter of 2010 compared with $8.6 million during the fourth quarter of 2009. The decrease in total provision is due to ongoing modeling of the required levels of reserves which considers historical charge-offs, loan growth and economic trends.

Net Interest Income

Net interest income was up 3.1% to $202.5 million for the year ended December 31, 2010 compared with $196.5 million for the year ended December 31, 2009. The Company’s FTE net interest margin was 4.15% for the year ended December 31, 2010, as compared with 4.04% for the year ended December 31, 2009. The Company has chosen to maintain its excess liquidity position in 2010 as a result of the unfavorable interest rate environment. As a result of this excess liquidity, our Federal Funds sold position had a net negative impact of approximately 5 bp on our net interest margin for the year ended December 31, 2010 as compared to the year ended December 31, 2009.

The yield on interest earning assets decreased 37 bp for the year ended December 31, 2010 as compared with the year ended December 31, 2009, primarily due to decreases in the yields on securities available for sale and loans and leases. The yield on securities available for sale was 3.56% for the year ended December 31, 2010, as compared with 4.47% for the year ended December 31, 2009, while the yield on loans and leases was 5.90% for the year ended December 31, 2010, as compared with 6.07% for the year ended December 31, 2009. The rate on interest bearing liabilities declined 53 bp for the year ended December 31, 2010 as compared with the year ended December 31, 2009, primarily due to decreases in the rate on interest bearing deposits. The rate on time deposits was 2.06% for the year ended December 31, 2010, as compared with 2.64% for the year ended December 31, 2009. The rate on money market deposit accounts was 0.57% for the year ended December 31, 2010, as compared with 1.20% for the year ended December 31, 2009.

Page 2 of 13

Net interest income was down slightly to $50.5 million for the three months ended December 31, 2010 compared with $51.6 million for the three months ended December 31, 2009. The Company’s FTE net interest margin was 4.09% for the three months ended December 31, 2010, as compared with 4.15% for the three months ended December 31, 2009. As a result of the Company’s excess liquidity, our Federal Funds sold position had a net negative impact of approximately 2 bp on our net interest margin for the three months ended December 31, 2010 as compared to the three months ended December 31, 2009.

The yield on interest earning assets decreased 40 bp for the three months ended December 31, 2010 as compared with the three months ended December 31, 2009, primarily due to decreases in the yields on securities available for sale and loans and leases. The yield on securities available for sale was 3.05% for the three months ended December 31, 2010, as compared with 4.07% for the three months ended December 31, 2009, while the yield on loans and leases was 5.85% for the three months ended December 31, 2010, as compared with 6.07% for the three months ended December 31, 2009. The rate on interest bearing liabilities declined 38 bp for the three months ended December 31, 2010 as compared with the three months ended December 31, 2009, primarily due to decreases in the rate on interest bearing deposits. The rate on time deposits was 1.94% for the three months ended December 31, 2010, as compared with 2.23% for the three months ended December 31, 2009. The rate on money market deposit accounts was 0.44% for the three months ended December 31, 2010, as compared with 0.88% for the three months ended December 31, 2009.

Noninterest Income

Noninterest income for the year ended December 31, 2010 was $83.9 million, up $3.8 million or 4.7% from $80.1 million for the year ended December 31, 2009. The increase in noninterest income was due primarily to an increase in net securities gains of approximately $3.1 million for the year ended December 31, 2010 as compared to the year ended December 31, 2009 due primarily to the sale of two equity positions and certain collateralized mortgage obligations (“CMO’s”) during 2010. In addition, the Company experienced an increase in retirement plan administration fees of approximately $1.3 million for the year ended December 31, 2010 as compared with the year ended December 31, 2009 as a result of organic growth and increased asset values from improved market conditions. Insurance and other financial services revenue increased approximately $1.1 million for the year ended December 31, 2010 as compared to the year ended December 31, 2009, due primarily to new business and expansion into new markets within our footprint. Trust revenue increased approximately $1.0 million for the year ended December 31, 2010 as compared to the year ended December 31, 2009 due primarily to an increase in fair market value of trust assets under administration. These increases were partially offset by a decrease in service charges on deposit accounts of approximately $3.1 million as a result of a decrease in overdraft activity due to changes in consumer behavior caused by economic conditions as well as the effects of implementing new regulations regarding overdraft fees.

Noninterest income for the three months ended December 31, 2010 was $22.2 million, up $2.4 million or 12.0% from $19.8 million for the same period in 2009. Net securities gains increased approximately $2.1 million for the three months ended December 31, 2010 as compared to the same period in 2009. This increase was due primarily to the sale of one equity position and certain CMO’s in the three months ending December 31, 2010. Slight increases in ATM and debit card fees and insurance and other financial services revenue also contributed to the increase in noninterest income. These increases were offset by a decrease in service charges on deposit accounts of approximately $1.2 million, or 16.9%, for the three months ended December 31, 2010 as compared with the same period in 2009. The decrease in service charges was the result of the aforementioned decrease in overdraft activity due to changes in consumer behavior caused by economic conditions as well as the effects of implementing new regulations regarding overdraft fees.

Page 3 of 13

Noninterest Expense and Income Tax Expense

Noninterest expense for the year ended December 31, 2010 was $178.3 million, up from $170.6 million, or 4.5%, for the year ended December 31, 2009. Salaries and employee benefits increased $8.2 million, or 9.5%, for the year ended December 31, 2010 compared with the year ended December 31, 2009. This increase was due primarily to increases in full-time-equivalent employees (primarily driven by market expansions), merit increases, employee benefits, and incentive compensation. In addition, the Company incurred debt prepayment penalties totaling $4.5 million to pay off long-term debt during the year ended December 31, 2010, as compared with prepayment penalties totaling $0.8 million for the year ended December 31, 2009. The debt prepayments in 2010 benefited interest expense by approximately $1.0 million in 2010, with future benefits expected in 2011 and 2012. These increases were partially offset by a decrease in FDIC expenses of approximately $2.3 million for the year ended December 31, 2010, as compared with the year ended December 31, 2009. This decrease resulted from the special assessment levied by the FDIC in the second quarter of 2009. In addition, professional fees and outside services decreased by $1.5 million, or 14.0%, for the year ended December 31, 2010 as compared with the year ended December 31, 2009. This decrease was due primarily to nonrecurring legal fees incurred during 2009 related to de novo branch activity as well as non-recurring systems consulting services incurred in 2009. Income tax expense for the year ended December 31, 2010 was $20.9 million, up slightly from $20.6 million for the year ended December 31, 2009. The effective tax rate was 26.7% for the year ended December 31, 2010, as compared to 28.4% for the year ended December 31, 2009. This decrease in the effective tax rate is primarily the result of an amendment to New York State tax law to conform to the bad debt treatment afforded under Federal law, which resulted in a reduction to tax expense of $0.6 million, as well as a favorable New York State audit settlement, which resulted in a reduction to tax expense of $0.6 million for the year ended December 31, 2010.

Noninterest expense for the three months ended December 31, 2010 was $47.3 million, up from $45.3 million, or 4.3%, for the same period in 2009. The Company incurred debt prepayment penalties totaling $3.3 million to pay off long-term debt during the fourth quarter of 2010, as compared to prepayment penalties totaling $0.8 million for the same period in 2009. Salaries and employee benefits, occupancy, and loan collection expenses were up slightly for the three months ended December 31, 2010 as compared to the same period in 2009. These increases were partially offset by a decrease in other operating expenses of approximately $1.0 million for the three month period ended December 31, 2010, as compared with the three months ended December 31, 2009. This decrease resulted primarily from a termination fee associated with the early termination of a vendor contract in the fourth quarter of 2009. Income tax expense for the three month period ended December 31, 2010 was $4.4 million, up from $3.7 million for the same period in 2009. The effective tax rate was 23.2% for the three months ended December 31, 2010, as compared to 21.3% for the same period in 2009.

Balance Sheet

Total assets were $5.3 billion at December 31, 2010, down $125.2 million or 2.3% from December 31, 2009. Loans and leases were $3.6 billion at December 31, 2010, down $35.4 million from December 31, 2009. Total deposits were $4.1 billion at December 31, 2010, up $41.3 million from December 31, 2009. Stockholders’ equity was $533.6 million, representing a total equity-to-total assets ratio of 9.99% at December 31, 2010, compared with $505.1 million or a total equity-to-total assets ratio of 9.24% at December 31, 2009.

Page 4 of 13

Stock Repurchase Program

Under previously disclosed stock repurchase plans, the Company purchased 23,810 shares of its common stock during the year ended December 31, 2010, for a total of $0.5 million at an average price of $20.03 per share. At December 31, 2010, there were 976,190 shares available for repurchase under this previously announced stock repurchase plan. This plan was authorized on October 26, 2009 in the amount of 1,000,000 shares and expires on December 31, 2011.

Dividend Declared

The NBT Board of Directors declared a 2011 first-quarter cash dividend of $0.20 per share at a meeting held today. The dividend will be paid on March 15, 2011 to shareholders of record as of March 1, 2011.

Corporate Overview

NBT Bancorp Inc. is a financial holding company headquartered in Norwich, NY, with total assets of $5.3 billion at December 31, 2010. 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, two NBT Bank offices in northwestern Vermont and 37 Pennstar Bank offices in northeastern Pennsylvania. EPIC Advisors, Inc., based in Rochester, NY, is a full-service 401(k) plan recordkeeping firm. Mang Insurance Agency, LLC, based in Norwich, NY, 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.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.

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NBT Bancorp Inc. and Subsidiaries

SELECTED FINANCIAL HIGHLIGHTS

(unaudited)

	2010			2009			Net Change			Percent Change
	(dollars in thousands, except per share data)

Three Months Ended December 31,
Net Income	$	14,434		$	13,801		$	633			5	%
Diluted Earnings Per Share	$	0.42		$	0.40		$	0.02			5	%
Weighted Average Diluted
Common Shares Outstanding		34,590,063			34,348,189			241,874			1	%
Return on Average Assets (1)		1.05	%		1.00	%		5	bp		5	%
Return on Average Equity (1)		10.68	%		10.92	%		-24	bp		-2	%
Net Interest Margin (2)		4.09	%		4.15	%		-6	bp		-1	%

Year Ended December 31,
Net Income	$	57,404		$	52,011		$	5,393			10	%
Diluted Earnings Per Share	$	1.66		$	1.53		$	0.13			8	%
Weighted Average Diluted
Common Shares Outstanding		34,508,959			33,902,517			606,442			2	%
Return on Average Assets		1.05	%		0.96	%		9	bp		9	%
Return on Average Equity		10.92	%		10.90	%		2	bp		0	%
Net Interest Margin (2)		4.15	%		4.04	%		11	bp		3	%

Asset Quality	December 31,			December 31,
	2010			2009
Nonaccrual Loans	$	42,467		$	38,746
90 Days Past Due and Still Accruing	$	2,325		$	2,526
Total Nonperforming Loans	$	44,792		$	41,272
Other Real Estate Owned	$	901		$	2,358
Total Nonperforming Assets	$	45,693		$	43,630
Past Due Loans	$	31,004		$	32,349
Potential Problem Loans	$	82,247		$	79,072
Allowance for Loan and Lease Losses	$	71,234		$	66,550
Year-to-Date (YTD) Net Charge-Offs	$	25,125		$	25,406
Allowance for Loan and Lease Losses to Total Loans and Leases		1.97	%		1.83	%
Total Nonperforming Loans to Total Loans and Leases		1.24	%		1.13	%
Total Nonperforming Assets to Total Assets		0.86	%		0.80	%
Past Due Loans to Total Loans and Leases		0.86	%		0.89	%
Allowance for Loan and Lease Losses to Total Nonperforming Loans		159.03	%		161.25	%
Net Charge-Offs to YTD Average Loans and Leases		0.69	%		0.70	%

Capital
Equity to Assets		9.99	%		9.24	%
Book Value Per Share	$	15.51		$	14.69
Tangible Book Value Per Share	$	11.67		$	10.75
Tier 1 Leverage Ratio		9.16	%		8.35	%
Tier 1 Capital Ratio		12.44	%		11.34	%
Total Risk-Based Capital Ratio		13.70	%		12.59	%

Quarterly Common Stock Price	2010				2009
Quarter End	High		Low		High		Low
March 31	$	23.99	$	19.15	$	28.37	$	15.42
June 30	$	25.96	$	20.33	$	25.22	$	20.49
September 30	$	23.06	$	19.27	$	24.16	$	20.57
December 31	$	24.96	$	21.41	$	23.59	$	19.43

(1) Annualized

(2) Calculated on a FTE basis

Page 6 of 13

NBT Bancorp Inc. and Subsidiaries

SELECTED FINANCIAL HIGHLIGHTS

(unaudited)

	December 31,		December 31,		Net			Percent
	2010		2009		Change			Change
	(dollars in thousands, except per share data)
Balance Sheet
Loans and Leases	$	3,610,006	$	3,645,398	$	(35,392	)		-1	%
Earning Assets	$	4,914,972	$	5,009,251	$	(94,279	)		-2	%
Total Assets	$	5,338,856	$	5,464,026	$	(125,170	)		-2	%
Deposits	$	4,134,352	$	4,093,046	$	41,306			1	%
Stockholders’ Equity	$	533,572	$	505,123	$	28,449			6	%

	2010		2009
Average Balances	(dollars in thousands, except per share data)
Three Months Ended December 31,
Loans and Leases	$	3,603,867	$	3,628,244	$	(24,377	)
Securities Available For Sale
(excluding unrealized gains or losses)	$	1,097,887	$	1,124,877	$	(26,990	)
Securities Held To Maturity	$	100,204	$	165,108	$	(64,904	)
Trading Securities	$	2,703	$	2,312	$	391
Regulatory Equity Investment	$	28,911	$	37,091	$	(8,180	)
Short-Term Interest Bearing Accounts	$	187,099	$	122,104	$	64,995
Total Earning Assets	$	5,017,968	$	5,077,424	$	(59,456	)
Total Assets	$	5,449,848	$	5,499,273	$	(49,425	)
Interest Bearing Deposits	$	3,334,559	$	3,352,879	$	(18,320	)
Non-Interest Bearing Deposits	$	854,361	$	748,451	$	105,910
Short-Term Borrowings	$	164,311	$	159,050	$	5,261
Long-Term Borrowings	$	482,279	$	654,592	$	(172,313	)
Total Interest Bearing Liabilities	$	3,981,149	$	4,166,521	$	(185,372	)
Stockholders’ Equity	$	536,197	$	501,225	$	34,972

Average Balances
Year Ended December 31,
Loans and Leases	$	3,629,047	$	3,641,852	$	(12,805	)
Securities Available For Sale
(excluding unrealized gains or losses)	$	1,088,376	$	1,095,609	$	(7,233	)
Securities Held To Maturity	$	128,727	$	151,078	$	(22,351	)
Trading Securities	$	2,563	$	1,929	$	634
Regulatory Equity Investment	$	31,850	$	37,878	$	(6,028	)
Short-Term Interest Bearing Accounts	$	137,818	$	88,012	$	49,806
Total Earning Assets	$	5,015,818	$	5,014,429	$	1,389
Total Assets	$	5,454,334	$	5,429,009	$	25,325
Interest Bearing Deposits	$	3,340,873	$	3,340,735	$	138
Non-Interest Bearing Deposits	$	805,594	$	718,580	$	87,014
Short-Term Borrowings	$	158,280	$	140,066	$	18,214
Long-Term Borrowings	$	544,931	$	676,461	$	(131,530	)
Total Interest Bearing Liabilities	$	4,044,084	$	4,157,262	$	(113,178	)
Stockholders’ Equity	$	525,474	$	477,299	$	48,175

Page 7 of 13

NBT Bancorp Inc. and Subsidiaries	December 31,		December 31,
Consolidated Balance Sheets (unaudited)	2010		2009
(in thousands)

ASSETS
Cash and due from banks	$	99,673	$	107,980
Short term interest bearing accounts		69,119		79,181
Securities available for sale, at fair value		1,129,368		1,116,758
Securities held to maturity (fair value of $98,759 and $161,851 at December 31, 2010 and December 31, 2009, respectively)		97,310		159,946
Trading securities		2,808		2,410
Federal Reserve and Federal Home Loan Bank stock		27,246		35,979
Loans and leases		3,610,006		3,645,398
Less allowance for loan and lease losses		71,234		66,550
Net loans and leases		3,538,772		3,578,848
Premises and equipment, net		67,404		66,221
Goodwill		114,841		114,938
Intangible assets, net		17,543		20,590
Bank owned life insurance		75,301		74,751
Other assets		99,471		106,424
TOTAL ASSETS	$	5,338,856	$	5,464,026

LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits:
Demand (noninterest bearing)	$	911,741	$	789,989
Savings, NOW, and money market		2,291,833		2,269,779
Time		930,778		1,033,278
Total deposits		4,134,352		4,093,046
Short-term borrowings		159,434		155,977
Long-term debt		369,874		554,698
Trust preferred debentures		75,422		75,422
Other liabilities		66,202		79,760
Total liabilities		4,805,284		4,958,903


Total stockholders' equity		533,572		505,123

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	5,338,856	$	5,464,026

Page 8 of 13

	Three months ended					Year ended
NBT Bancorp Inc. and Subsidiaries	December 31,					December 31,
Consolidated Statements of Income (unaudited)	2010		2009			2010		2009
(in thousands, except per share data)
Interest, fee and dividend income:
Loans and leases	$	52,933	$	55,361		$	213,429	$	220,324
Securities available for sale		7,944		10,810			36,167		45,972
Securities held to maturity		845		1,212			3,968		4,894
Other		627		621			2,174		2,203
Total interest, fee and dividend income		62,349		68,004			255,738		273,393
Interest expense:
Deposits		6,727		9,532			30,354		48,496
Short-term borrowings		64		139			402		552
Long-term debt		4,025		5,673			18,314		23,629
Trust preferred debentures		1,034		1,036			4,140		4,247
Total interest expense		11,850		16,380			53,210		76,924
Net interest income		50,499		51,624			202,528		196,469
Provision for loan and lease losses		6,687		8,641			29,809		33,392
Net interest income after provision for loan and lease losses		43,812		42,983			172,719		163,077
Noninterest income:
Trust		2,261		1,881			7,722		6,719
Service charges on deposit accounts		5,657		6,808			24,041		27,165
ATM and debit card fees		2,546		2,346			10,035		9,339
Insurance and other financial services revenue		4,327		3,799			18,867		17,725
Net securities gains (losses)		2,063		(2	)		3,274		144
Bank owned life insurance income		872		910			3,316		3,135
Retirement plan administration fees		2,759		2,739			10,356		9,086
Other		1,751		1,365			6,277		6,818
Total noninterest income		22,236		19,846			83,888		80,131
Noninterest expense:
Salaries and employee benefits		23,200		22,919			93,718		85,565
Office supplies and postage		1,564		1,472			6,102		5,857
Occupancy		3,823		3,608			15,350		14,864
Equipment		2,123		2,115			8,317		8,139
Professional fees and outside services		2,489		2,688			9,032		10,508
Data processing and communications		2,893		3,314			12,347		13,238
Amortization of intangible assets		744		781			3,072		3,246
Loan collection and other real estate owned		761		589			3,036		2,766
Advertising		1,266		936			3,487		3,455
FDIC expenses		1,347		1,312			6,081		8,408
Prepayment penalty on long-term debt		3,321		810			4,526		810
Other operating		3,719		4,746			13,223		13,710
Total noninterest expense		47,250		45,290			178,291		170,566
Income before income taxes		18,798		17,539			78,316		72,642
Income taxes		4,364		3,738			20,912		20,631
Net income	$	14,434	$	13,801		$	57,404	$	52,011
Earnings Per Share:
Basic	$	0.42	$	0.40		$	1.67	$	1.54
Diluted	$	0.42	$	0.40		$	1.66	$	1.53

Page 9 of 13

NBT Bancorp Inc. and Subsidiaries Quarterly Consolidated Statements of Income (unaudited)	4Q 2010		3Q 2010		2Q 2010		1Q 2010		4Q 2009
(in thousands, except per share data)
Interest, fee and dividend income:
Loans and leases	$	52,933	$	53,301	$	53,503	$	53,692	$	55,361
Securities available for sale		7,944		8,621		9,556		10,046		10,810
Securities held to maturity		845		908		1,078		1,137		1,212
Other		627		482		469		596		621
Total interest, fee and dividend income		62,349		63,312		64,606		65,471		68,004
Interest expense:
Deposits		6,727		7,174		7,999		8,454		9,532
Short-term borrowings		64		91		123		124		139
Long-term debt		4,025		4,374		4,850		5,065		5,673
Trust preferred debentures		1,034		1,046		1,033		1,027		1,036
Total interest expense		11,850		12,685		14,005		14,670		16,380
Net interest income		50,499		50,627		50,601		50,801		51,624
Provision for loan and lease losses		6,687		7,529		6,350		9,243		8,641
Net interest income after provision for loan and lease losses		43,812		43,098		44,251		41,558		42,983
Noninterest income:
Trust		2,261		1,786		1,909		1,766		1,881
Service charges on deposit accounts		5,657		5,953		6,301		6,130		6,808
ATM and debit card fees		2,546		2,660		2,462		2,367		2,346
Insurance and other financial services revenue		4,327		4,595		4,700		5,245		3,799
Net securities gains/(losses)		2,063		1,120		63		28		(2	)
Bank owned life insurance income		872		655		808		981		910
Retirement plan administration fees		2,759		2,612		2,595		2,390		2,739
Other		1,751		1,610		1,482		1,434		1,365
Total noninterest income		22,236		20,991		20,320		20,341		19,846
Noninterest expense:
Salaries and employee benefits		23,200		24,090		24,224		22,204		22,919
Office supplies and postage		1,564		1,542		1,454		1,542		1,472
Occupancy		3,823		3,709		3,666		4,152		3,608
Equipment		2,123		2,053		2,041		2,100		2,115
Professional fees and outside services		2,489		2,068		2,191		2,284		2,688
Data processing and communications		2,893		2,971		3,265		3,218		3,314
Amortization of intangible assets		744		767		780		781		781
Loan collection and other real estate owned		761		548		668		1,059		589
Advertising		1,266		730		825		667		936
FDIC expenses		1,347		1,621		1,560		1,553		1,312
Prepayment penalty on long-term debt		3,321		1,205		-		-		810
Other operating		3,719		3,380		3,523		2,600		4,746
Total noninterest expense		47,250		44,684		44,197		42,160		45,290
Income before income taxes		18,798		19,405		20,374		19,739		17,539
Income taxes		4,364		4,835		5,950		5,763		3,738
Net income	$	14,434	$	14,570	$	14,424	$	13,976	$	13,801
Earnings per share:
Basic	$	0.42	$	0.42	$	0.42	$	0.41	$	0.40
Diluted	$	0.42	$	0.42	$	0.42	$	0.41	$	0.40

Page 10 of 13

Three Months ended December 31,

			2010							2009
	Average				Yield/			Average				Yield/
(dollars in thousands)	Balance		Interest		Rates			Balance		Interest		Rates
ASSETS
Short-term interest bearing accounts	$	187,099	$	135		0.29	%	$	122,104	$	87		0.28	%
Securities available for sale (1)(excluding unrealized gains or losses)		1,097,887		8,433		3.05	%		1,124,877		11,552		4.07	%
Securities held to maturity (1)		100,204		1,402		5.55	%		165,108		1,832		4.40	%
Investment in FRB and FHLB Banks		28,911		492		6.75	%		37,091		533		5.70	%
Loans and leases (2)		3,603,867		53,160		5.85	%		3,628,244		55,551		6.07	%
Total interest earning assets	$	5,017,968	$	63,622		5.03	%	$	5,077,424	$	69,555		5.43	%
Other assets		431,880							421,849
Total assets	$	5,449,848						$	5,499,273

LIABILITIES AND STOCKHOLDERS' EQUITY
Money market deposit accounts	$	1,068,707		1,188		0.44	%	$	1,067,763	$	2,359		0.88	%
NOW deposit accounts		762,567		732		0.38	%		688,376		831		0.48	%
Savings deposits		555,622		174		0.12	%		505,131		195		0.15	%
Time deposits		947,663		4,633		1.94	%		1,091,609		6,147		2.23	%
Total interest bearing deposits	$	3,334,559	$	6,727		0.80	%	$	3,352,879	$	9,532		1.13	%
Short-term borrowings		164,311		64		0.16	%		159,050		139		0.35	%
Trust preferred debentures		75,422		1,034		5.44	%		75,422		1,036		5.45	%
Long-term debt		406,857		4,025		3.93	%		579,170		5,673		3.89	%
Total interest bearing liabilities	$	3,981,149	$	11,850		1.18	%	$	4,166,521	$	16,380		1.56	%
Demand deposits		854,361							748,451
Other liabilities		78,141							83,076
Stockholders' equity		536,197							501,225
Total liabilities and stockholders' equity	$	5,449,848						$	5,499,273
Net interest income (FTE)				51,772							53,175
Interest rate spread						3.85	%						3.87	%
Net interest margin						4.09	%						4.15	%
Taxable equivalent adjustment				1,273							1,551
Net interest income			$	50,499						$	51,624

(1) Securities are shown at average amortized cost

(2) For purposes of these computations, nonaccrual loans are included in the average loan balances outstanding

Page 11 of 13

Year ended December 31,

			2010							2009
	Average				Yield/			Average				Yield/
(dollars in thousands)	Balance		Interest		Rates			Balance		Interest		Rates
ASSETS
Short-term interest bearing accounts	$	137,818	$	354		0.26	%	$	88,012	$	238		0.27	%
Securities available for sale (1)(excluding unrealized gains or losses)		1,088,376		38,759		3.56	%		1,095,609		48,951		4.47	%
Securities held to maturity (1)		128,727		6,104		4.74	%		151,078		7,385		4.89	%
Investment in FRB and FHLB Banks		31,850		1,821		5.72	%		37,878		1,966		5.19	%
Loans and leases (2)		3,629,047		214,258		5.90	%		3,641,852		221,128		6.07	%
Total interest earning assets	$	5,015,818	$	261,296		5.21	%	$	5,014,429	$	279,668		5.58	%
Other assets		438,516							414,580
Total assets	$	5,454,334						$	5,429,009

LIABILITIES AND STOCKHOLDERS' EQUITY
Money market deposit accounts	$	1,092,789		6,273		0.57	%	$	1,013,514	$	12,165		1.20	%
NOW deposit accounts		709,920		2,938		0.41	%		600,943		3,159		0.53	%
Savings deposits		552,660		797		0.14	%		499,079		826		0.17	%
Time deposits		985,504		20,346		2.06	%		1,227,199		32,346		2.64	%
Total interest bearing deposits	$	3,340,873	$	30,354		0.91	%	$	3,340,735	$	48,496		1.45	%
Short-term borrowings		158,280		402		0.25	%		140,066		552		0.39	%
Trust preferred debentures		75,422		4,140		5.49	%		75,422		4,247		5.63	%
Long-term debt		469,509		18,314		3.90	%		601,039		23,629		3.93	%
Total interest bearing liabilities	$	4,044,084	$	53,210		1.32	%	$	4,157,262	$	76,924		1.85	%
Demand deposits		805,594							718,580
Other liabilities		79,182							75,868
Stockholders' equity		525,474							477,299
Total liabilities and stockholders' equity	$	5,454,334						$	5,429,009
Net interest income (FTE)				208,086							202,744
Interest rate spread						3.89	%						3.73	%
Net interest margin						4.15	%						4.04	%
Taxable equivalent adjustment				5,558							6,275
Net interest income			$	202,528						$	196,469

(1) Securities are shown at average amortized cost

(2) For purposes of these computations, nonaccrual loans are included in the average loan balances outstanding

Page 12 of 13

NBT Bancorp Inc. and Subsidiaries

Loans and Leases (Unaudited)

	At December 31,
(In thousands)	2010		2009
Residential real estate mortgages	$	559,213	$	622,898
Commercial		605,238		581,870
Commercial real estate mortgages		805,905		718,235
Real estate construction and development		50,164		76,721
Agricultural and agricultural real estate mortgages		112,738		122,466
Consumer		870,425		856,956
Home equity		575,678		603,585
Lease financing		30,645		62,667
Total loans and leases	$	3,610,006	$	3,645,398

Page 13 of 13