ex99_1.htm

NORWICH, NY (July 23, 2012) – NBT Bancorp Inc. (NBT) (NASDAQ: NBTB) reported today net income for the six months ended June 30, 2012 was $26.9 million, down $2.1 million, or 7.1%, from the six months ended June 30, 2011. Net income per diluted share for the six months ended June 30, 2012 was $0.80 per share, down from $0.84 per diluted share for the six months ended June 30, 2011. The Company incurred approximately $1.3 million in merger related expenses for the first six months of 2012, which had a negative impact on diluted earnings per share of approximately $0.03. Annualized return on average assets and return on average equity were 0.94% and 9.89%, respectively, for the six months ended June 30, 2012, compared with 1.08% and 10.82%, respectively, for the six months ended June 30, 2011. Net interest margin (on a fully taxable equivalent or FTE basis) was 3.86% for the six months ended June 30, 2012, down 26 basis points from 4.12% for the six months ended June 30, 2011.

Net income for the three months ended June 30, 2012 was $13.3 million, down $1.4 million, or 9.5%, from the three months ended June 30, 2011. Net income per diluted share for the three months ended June 30, 2012 was $0.40 per share, down from $0.43 per diluted share for the three months ended June 30, 2011. The Company incurred approximately $0.8 million in merger related expenses for the three months ended June 30, 2012, which had a negative impact on diluted earnings per share of approximately $0.02. Annualized return on average assets and return on average equity were 0.92% and 9.66%, respectively, for the three months ended June 30, 2012, compared with 1.09% and 10.86%, respectively, for the three months ended June 30, 2011. FTE net interest margin was 3.82% for the three months ended June 30, 2012, down 31 basis points from 4.13% for the three months ended June 30, 2011.

"During the second quarter we continued to demonstrate commitment to strategic investment in our company’s future with extension of our footprint into a fifth state through the successful acquisition of Hampshire First Bank in southern New Hampshire," said NBT President and CEO Martin Dietrich. "We are also encouraged by our strong loan growth during the first half of 2012, both organic and from our acquisition of Hampshire First Bank. Organic loan growth was spurred by strong commercial and consumer loan originations in our legacy markets, particularly our upstate New York footprint, as well as from our recent expansion into new markets such as Vermont. The economic and regulatory environment continues to present challenges, but we remain focused on the fundamentals of banking and customer service as our community-minded team works to meet the needs of our customers."

The Company recorded a provision for loan and lease losses of $8.6 million during the six months ended June 30, 2012, compared with $10.0 million for the six months ended June 30, 2011. Net charge-offs were $9.2 million for the six months ended June 30, 2012, down from $10.7 million for the same period in 2011, due primarily to the charge-off of one large commercial loan during the first quarter of 2011, as well as the general improvement in asset quality indicators. The annualized net charge-off ratio for the six months ended June 30, 2012 was 0.48%, compared to 0.60% for the six months ended June 30, 2011.

The Company recorded a provision for loan and lease losses of $4.1 million during the three months ended June 30, 2012, compared with $6.0 million for the three months ended June 30, 2011. Net charge-offs were $4.7 million for the three months ended June 30, 2012, down from $5.5 million for the same period in 2011, due primarily to the general improvement in asset quality indicators. The annualized net charge-off ratio for the three months ended June 30, 2012 was 0.48%, compared to 0.60% for the three months ended June 30, 2011.

The allowance for loan and lease losses totaled $70.7 million at June 30, 2012, compared to $71.3 million at March 31, 2012. Improvement in the asset quality indicators noted above resulted in a reduction in the allowance, partially offset by reserves provided for the aforementioned loan growth. The allowance for loan losses as a percentage of loans and leases was 1.70% at June 30, 2012, compared to 1.87% at March 31, 2012. This reduction was due primarily to the addition of the Hampshire First loans that were recorded at fair value at acquisition. As acquired loans do not have a related allowance recorded, this resulted in a decrease of 11 basis points in the allowance for loan losses as a percentage of total loans as of June 30, 2012.

Net interest income was down slightly to $99.1 million for the six months ended June 30, 2012, compared with $99.4 million for the six months ended June 30, 2011. The Company’s FTE net interest margin was 3.86% for the six months ended June 30, 2012, down from 4.12% for the six months ended June 30, 2011. The increase in average earning assets for the six months ended June 30, 2012, compared to the same period of 2011 offset the decline in net interest margin, resulting in a relatively flat net interest income for the periods.

While the yield on interest bearing liabilities decreased 19 basis points, the yield on interest earning assets declined 42 basis points, resulting in margin compression for the six months ended June 30, 2012, compared to the same period for 2011. The yield on securities available for sale was 2.57% for the six months ended June 30, 2012, compared with 3.12% for the six months ended June 30, 2011. This decrease was due primarily to the reinvestment of cash flows from maturing securities and cash received from branch acquisitions in 2011 and the first quarter of 2012 into lower yielding securities in the current rate environment. The average balance of securities available for sale for the six months ended June 30, 2012 was $1.2 billion, up approximately $112.1 million, or 10.2%, from the six months ended June 30, 2011. This increase was due primarily to reinvestment of maturing held to maturity securities into available for sale securities, and investment of liquidity from branch acquisition activity and deposit growth into available for sale securities. The yield on loans and leases was 5.25% for the six months ended June 30, 2012, compared with 5.69% for the six months ended June 30, 2011. The average balance of loans and leases for the six months ended June 30, 2012 was $3.9 billion, up approximately $241.7 million, or 6.7%, from the six months ended June 30, 2011. The reduction in yields on earning assets was partially offset by a reduction in rates paid on interest bearing liabilities. The rate on time deposits was 1.58% for the six months ended June 30, 2012, compared with 1.87% for the six months ended June 30, 2011. The rate on money market deposit accounts was 0.21% for the six months ended June 30, 2012, compared with 0.39% for the six months ended June 30, 2011.

Net interest income was down slightly to $49.8 million for the three months ended June 30, 2012, compared with $50.2 million for the three months ended June 30, 2011. The Company’s FTE net interest margin was 3.82% for the three months ended June 30, 2012, down from 4.13% for the three months ended June 30, 2011. The increase in average earning assets for the three months ended June 30, 2012 as compared to the same period of 2011 offset the decline in net interest margin, resulting in a relatively flat net interest income for the periods.

While the yield on interest bearing liabilities decreased 17 basis points, the yield on interest earning assets declined 45 basis points, resulting in margin compression for the three months ended June 30, 2012, compared to the same period for 2011. The yield on securities available for sale was 2.53% for the three months ended June 30, 2012, as compared with 3.11% for the three months ended June 30, 2011. This decrease was due primarily to the reinvestment of cash flows from maturing securities and cash received from branch acquisitions into lower yielding securities in the current rate environment. The average balance of securities available for sale for the three months ended June 30, 2012 was $1.2 billion, up approximately $109.4 million, or 10.0%, from the three months ended June 30, 2011. This increase was due primarily to reinvestment of maturing held to maturity securities into available for sale securities, and investment of liquidity from branch acquisition activity and deposit growth into available for sale securities. The yield on loans and leases was 5.18% for the three months ended June 30, 2012, compared with 5.65% for the three months ended June 30, 2011. The average balance of loans and leases for the three months ended June 30, 2012 was $3.9 billion, up approximately $290.2 million, or 8.0%, from the three months ended June 30, 2011. The reduction in yields on earning assets was partially offset by a reduction in rates paid on interest bearing liabilities. The rate on time deposits was 1.52% for the three months ended June 30, 2012, compared with 1.85% for the three months ended June 30, 2011. The rate on money market deposit accounts was 0.19% for the three months ended June 30, 2012, compared with 0.37% for the three months ended June 30, 2011.

Noninterest income for the six months ended June 30, 2012 was $43.7 million, up 9.4% or $3.7 million, compared with $40.0 million for the same period in 2011. Insurance and other financial services revenue increased approximately $0.6 million for the six months ended June 30, 2012, compared to the six months ended June 30, 2011. This increase was due primarily to the acquisition of an insurance agency during the second quarter of 2011 and an increase in brokerage commission revenue from new business. ATM and debit card fees increased approximately $0.4 million for the six months ended June 30, 2012, compared to the six months ended June 30, 2011, due primarily to an increase in card usage. Other noninterest income increased approximately $3.5 million for the six months ended June 30, 2012 as compared to June 30, 2011. This increase was due primarily to a $1.1 million payoff gain on a purchased commercial real estate loan, as well as a prepayment penalty fee collected of $0.8 million during the six months ended June 30, 2012 related to a previously disclosed loss of a retirement plan client. In addition, mortgage banking revenue increased approximately $1.1 million for the six months ended June 30, 2012 as compared to the same period in 2011 as the Company sold certain residential mortgages as market conditions warranted. The Company also realized net securities gains of approximately $0.6 million during the six months ended June 30, 2012. These increases were partially offset by a decrease in service charges on deposit accounts of approximately $1.6 million, or 15.3%, for the six months ended June 30, 2012, compared with the same period in 2011 primarily due to a decrease in overdraft fee income.

Noninterest income for the three months ended June 30, 2012 was $20.7 million, up 4.1% or $0.8 million, compared with $19.9 million for the same period in 2011. Insurance and other financial services revenue increased approximately $0.3 million for the three months ended June 30, 2012, compared to the three months ended June 30, 2011. This increase was due primarily to the acquisition of an insurance agency in May 2011. Other noninterest income increased approximately $1.1 million for the three months ended June 30, 2012 as compared to the three months ended June 30, 2011. This increase was due primarily to an increase in mortgage banking activity during the three months ended June 30, 2012 as compared with the three months ended June 30, 2011. These increases were partially offset by a decrease in service charges on deposit accounts of approximately $0.9 million, or 16.2%, for the three months ended June 30, 2012, compared with the same period in 2011 primarily due to the aforementioned decrease in overdraft fee income.

Noninterest expense for the six months ended June 30, 2012 was $95.9 million, up $7.6 million or 8.7%, for the same period in 2011. Salaries and employee benefits increased $2.7 million, or 5.5%, for the six months ended June 30, 2012, compared with the same period in 2011. This increase was due primarily to increases in full-time-equivalent employees from acquisitions, merit increases, and increased pension expenses. Professional fees and outside services increased $1.0 million, or 23.1%, for the six months ended June 30, 2012 as compared to the same period in 2011. Data processing and communications expenses increased approximately $0.7 million, or 10.9%, for the six months ended June 30, 2012 as compared to the same period in 2011, due primarily to expansion into the new markets. Merger related expenses totaled $1.3 million in the first six months of 2012, which also contributed to the increase in noninterest expense for the period. These increases were partially offset by a decrease in Federal Deposit Insurance Corporation (“FDIC”) expenses of approximately $0.6 million for the six months ended June 30, 2012 as compared to the six months ended June 30, 2011. This decrease was due to the FDIC redefining the deposit insurance assessment base effective the second quarter of 2011. Income tax expense for the six month period ended June 30, 2012 was $11.5 million, down from $12.2 million for the same period in 2011. The effective tax rate was 30.0% for the six months ended June 30, 2012, compared to 29.7% for the same period in 2011.

Noninterest expense for the three months ended June 30, 2012 was $47.4 million, up $4.2 million or 9.8%, for the same period in 2011. Salaries and employee benefits increased $1.0 million, or 4.0%, for the three months ended June 30, 2012, compared with the same period in 2011. This increase was due primarily to increases in full-time-equivalent employees from acquisitions, merit increases, and increased pension expenses. Data processing and communications expenses increased approximately $0.3 million, or 10.1%, for the three months ended June 30, 2012 as compared to the same period in 2011, due primarily to expansion into the new markets. Loan collection and other real estate owned expenses increased $0.4 million for the three months ended June 30, 2012 as compared to the same period in 2011. Merger related expenses totaled $0.8 million for the three months ended June 30, 2012, which also contributed to the increase in noninterest expense for the period. Income tax expense for the three month period ended June 30, 2012 was $5.7 million, down from $6.2 million for the same period in 2011. The effective tax rate was 30.0% for the three months ended June 30, 2012, compared to 29.7% for the same period in 2011.

Total assets were $6.0 billion at June 30, 2012, up $369.2 million or 6.6% from December 31, 2011. Loans and leases were $4.2 billion at June 30, 2012, up $361.0 million from December 31, 2011. Total deposits were $4.7 billion at June 30, 2012, up $321.8 million from December 31, 2011. Stockholders’ equity was $566.5 million, representing a total equity-to-total assets ratio of 9.49% at June 30, 2012, compared with $538.1 million or a total equity-to-total assets ratio of 9.61% at December 31, 2011.

NBT Bancorp Inc. is a financial holding company headquartered in Norwich, N.Y., with total assets of $6.0 billion at June 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.

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.

							Net			Percent
	2012			2011			Change			Change
	(dollars in thousands, except per share data)

Three Months Ended June 30,
Net Income	$	13,257		$	14,655		$	(1,398	)		-10	%
Diluted Earnings Per Share	$	0.40		$	0.43		$	(0.03	)		-7	%
Weighted Average Diluted
Common Shares Outstanding		33,492,659			34,319,665			(827,006	)		-2	%
Return on Average Assets (1)		0.92	%		1.09	%		-17	bp		-16	%
Return on Average Equity (1)		9.66	%		10.86	%		-120	bp		-11	%
Net Interest Margin (2)		3.82	%		4.13	%		-31	bp		-8	%

Six Months Ended June 30,
Net Income	$	26,907		$	28,962		$	(2,055	)		-7	%
Diluted Earnings Per Share	$	0.80		$	0.84		$	(0.04	)		-5	%
Weighted Average Diluted
Common Shares Outstanding		33,452,970			34,491,627			(1,038,657	)		-3	%
Return on Average Assets (1)		0.94	%		1.08	%		-14	bp		-13	%
Return on Average Equity (1)		9.89	%		10.82	%		-93	bp		-9	%
Net Interest Margin (2)		3.86	%		4.12	%		-26	bp		-6	%

Asset Quality	June 30,			December 31,
	2012			2011
Nonaccrual Loans	$	43,924		$	38,290
90 Days Past Due and Still Accruing	$	1,629		$	3,190
Total Nonperforming Loans	$	45,553		$	41,480
Other Real Estate Owned	$	1,815		$	2,160
Total Nonperforming Assets	$	47,368		$	43,640
Allowance for Loan and Lease Losses	$	70,734		$	71,334
Allowance for Loan and Lease Losses to Total Loans and Leases		1.70	%		1.88	%
Total Nonperforming Loans to Total Loans and Leases		1.09	%		1.09	%
Total Nonperforming Assets to Total Assets		0.79	%		0.78	%
Past Due Loans to Total Loans and Leases		0.54	%		0.89	%
Allowance for Loan and Lease Losses to Total Nonperforming Loans		155.28	%		171.97	%
Net Charge-Offs to YTD Average Loans and Leases (1)		0.48	%		0.56	%

Capital
Equity to Assets		9.49	%		9.61	%
Book Value Per Share	$	16.79		$	16.23
Tangible Book Value Per Share	$	11.76		$	11.70
Tier 1 Leverage Ratio		8.59	%		8.74	%
Tier 1 Capital Ratio		10.78	%		11.56	%
Total Risk-Based Capital Ratio		12.03	%		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					$	23.25	$	17.05
December 31					$	22.63	$	17.47

(1)	Annualized

	June 30,		June 30,		Net
	2012		2011		Change
Average Balances	(dollars in thousands)
Three Months Ended
Loans and Leases	$	3,938,592	$	3,648,343	$	290,249
Securities Available For Sale
(excluding unrealized gains or losses)	$	1,208,384	$	1,098,964	$	109,420
Securities Held To Maturity	$	68,472	$	85,615	$	(17,143	)
Trading Securities	$	3,725	$	3,202	$	523
Regulatory Equity Investment	$	27,886	$	27,071	$	815
Short-Term Interest Bearing Accounts	$	102,192	$	128,799	$	(26,607	)
Total Earning Assets	$	5,345,526	$	4,988,792	$	356,734
Total Assets	$	5,810,584	$	5,412,979	$	397,605
Interest Bearing Deposits	$	3,470,553	$	3,290,469	$	180,084
Non-Interest Bearing Deposits	$	1,111,804	$	932,066	$	179,738
Short-Term Borrowings	$	171,545	$	135,618	$	35,927
Long-Term Borrowings	$	443,673	$	444,881	$	(1,208	)
Total Interest Bearing Liabilities	$	4,085,771	$	3,870,968	$	214,803
Stockholders’ Equity	$	551,865	$	541,349	$	10,516

Average Balances
Six Months Ended
Loans and Leases	$	3,874,027	$	3,632,355	$	241,672
Securities Available For Sale
(excluding unrealized gains or losses)	$	1,210,575	$	1,098,506	$	112,069
Securities Held To Maturity	$	69,507	$	89,833	$	(20,326	)
Trading Securities	$	3,512	$	3,086	$	426
Regulatory Equity Investment	$	27,453	$	27,158	$	295
Short-Term Interest Bearing Accounts	$	91,159	$	135,019	$	(43,860	)
Total Earning Assets	$	5,272,721	$	4,982,871	$	289,850
Total Assets	$	5,735,021	$	5,405,062	$	329,959
Interest Bearing Deposits	$	3,426,578	$	3,290,198	$	136,380
Non-Interest Bearing Deposits	$	1,087,180	$	918,483	$	168,697
Short-Term Borrowings	$	167,176	$	144,447	$	22,729
Long-Term Borrowings	$	444,745	$	445,139	$	(394	)
Total Interest Bearing Liabilities	$	4,038,499	$	3,879,784	$	158,715
Stockholders’ Equity	$	547,246	$	539,789	$	7,457

NBT Bancorp Inc. and Subsidiaries	June 30,		December 31,
Consolidated Balance Sheets (unaudited)	2012		2011
(in thousands)

ASSETS
Cash and due from banks	$	114,441	$	128,517
Short term interest bearing accounts		24,723		864
Securities available for sale, at fair value		1,221,706		1,244,619
Securities held to maturity (fair value of $65,556 and $72,198 at June 30, 2012 and December 31, 2011, respectively)		64,387		70,811
Trading securities		3,641		3,062
Federal Reserve and Federal Home Loan Bank stock		28,706		27,020
Loans and leases		4,161,214		3,800,203
Less allowance for loan and lease losses		70,734		71,334
Net loans and leases		4,090,480		3,728,869
Premises and equipment, net		76,906		74,541
Goodwill		151,628		132,029
Intangible assets, net		18,191		18,194
Bank owned life insurance		79,215		77,626
Other assets		93,544		92,254
TOTAL ASSETS	$	5,967,568	$	5,598,406

LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits:
Demand (noninterest bearing)	$	1,152,646	$	1,052,906
Savings, NOW, and money market		2,483,683		2,381,116
Time		1,052,578		933,127
Total deposits		4,688,907		4,367,149
Short-term borrowings		212,203		181,592
Long-term debt		367,147		370,344
Trust preferred debentures		75,422		75,422
Other liabilities		57,384		65,789
Total liabilities		5,401,063		5,060,296

Total stockholders' equity		566,505		538,110

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	5,967,568	$	5,598,406

	Three Months Ended				Six Months Ended
NBT Bancorp Inc. and Subsidiaries	June 30,				June 30,
Consolidated Statements of Income (unaudited)	2012		2011		2012		2011
(in thousands, except per share data)
Interest, fee and dividend income:
Loans and leases	$	50,509	$	51,126	$	100,717	$	101,986
Securities available for sale		7,108		7,947		14,474		15,851
Securities held to maturity		617		745		1,257		1,545
Other		413		440		805		933
Total interest, fee and dividend income		58,647		60,258		117,253		120,315
Interest expense:
Deposits		4,834		6,051		9,977		12,338
Short-term borrowings		48		52		89		110
Long-term debt		3,580		3,591		7,161		7,162
Trust preferred debentures		434		400		883		1,289
Total interest expense		8,896		10,094		18,110		20,899
Net interest income		49,751		50,164		99,143		99,416
Provision for loan and lease losses		4,103		6,021		8,574		9,986
Net interest income after provision for loan and lease losses		45,648		44,143		90,569		89,430
Noninterest income:
Insurance and other financial services revenue		5,279		5,025		11,433		10,798
Service charges on deposit accounts		4,571		5,455		8,912		10,527
ATM and debit card fees		3,063		2,928		6,025		5,596
Retirement plan administration fees		2,411		2,268		4,744		4,439
Trust		2,312		2,258		4,441		4,294
Bank owned life insurance income		618		660		1,589		1,695
Net securities gains		97		59		552		86
Other		2,331		1,208		6,042		2,552
Total noninterest income		20,682		19,861		43,738		39,987
Noninterest expense:
Salaries and employee benefits		24,992		24,035		51,717		49,039
Occupancy		4,222		3,987		8,713		8,509
Data processing and communications		3,431		3,117		6,689		6,031
Professional fees and outside services		2,388		2,088		5,113		4,154
Equipment		2,409		2,180		4,789		4,370
Office supplies and postage		1,574		1,342		3,245		2,887
FDIC expenses		942		965		1,873		2,461
Advertising		805		1,033		1,607		1,601
Amortization of intangible assets		841		771		1,660		1,504
Loan collection and other real estate owned		799		443		1,437		1,162
Merger		826		-		1,337		-
Other operating		4,161		3,196		7,684		6,500
Total noninterest expense		47,390		43,157		95,864		88,218
Income before income taxes		18,940		20,847		38,443		41,199
Income taxes		5,683		6,192		11,536		12,237
Net income	$	13,257	$	14,655	$	26,907	$	28,962
Earnings Per Share:
Basic	$	0.40	$	0.43	$	0.81	$	0.85
Diluted	$	0.40	$	0.43	$	0.80	$	0.84

NBT Bancorp Inc. and Subsidiaries		2Q		1Q		4Q		3Q		2Q
Quarterly Consolidated Statements of Income (unaudited)		2012		2012		2011		2011		2011
(in thousands, except per share data)
Interest, fee and dividend income:
Loans and leases	$	50,509	$	50,208	$	51,393	$	50,991	$	51,126
Securities available for sale		7,108		7,366		7,461		7,771		7,947
Securities held to maturity		617		640		661		680		745
Other		413		392		383		342		440
Total interest, fee and dividend income		58,647		58,606		59,898		59,784		60,258
Interest expense:
Deposits		4,834		5,143		5,330		5,352		6,051
Short-term borrowings		48		41		39		56		52
Long-term debt		3,580		3,581		3,621		3,621		3,591
Trust preferred debentures		434		449		409		394		400
Total interest expense		8,896		9,214		9,399		9,423		10,094
Net interest income		49,751		49,392		50,499		50,361		50,164
Provision for loan and lease losses		4,103		4,471		5,576		5,175		6,021
Net interest income after provision for loan and lease losses		45,648		44,921		44,923		45,186		44,143
Noninterest income:
Insurance and other financial services revenue		5,279		6,154		4,918		5,127		5,025
Service charges on deposit accounts		4,571		4,341		5,405		5,532		5,455
ATM and debit card fees		3,063		2,962		2,911		3,135		2,928
Retirement plan administration fees		2,411		2,333		2,184		2,295		2,268
Trust		2,312		2,129		2,480		2,090		2,258
Bank owned life insurance income		618		971		716		674		660
Net securities gains		97		455		52		12		59
Other		2,331		3,711		1,464		1,329		1,208
Total noninterest income		20,682		23,056		20,130		20,194		19,861
Noninterest expense:
Salaries and employee benefits		24,992		26,725		25,105		25,068		24,035
Occupancy		4,222		4,491		3,967		3,887		3,987
Data processing and communications		3,431		3,258		3,186		3,054		3,117
Professional fees and outside services		2,388		2,725		2,552		2,215		2,088
Equipment		2,409		2,380		2,206		2,288		2,180
Office supplies and postage		1,574		1,671		1,655		1,531		1,342
FDIC expenses		942		931		886		920		965
Advertising		805		802		1,174		685		1,033
Amortization of intangible assets		841		819		760		782		771
Loan collection and other real estate owned		799		638		793		676		443
Merger		826		511		649		155		-
Other operating		4,161		3,523		4,479		3,785		3,196
Total noninterest expense		47,390		48,474		47,412		45,046		43,157
Income before income taxes		18,940		19,503		17,641		20,334		20,847
Income taxes		5,683		5,853		3,919		5,117		6,192
Net income	$	13,257	$	13,650	$	13,722	$	15,217	$	14,655
Earnings per share:
Basic	$	0.40	$	0.41	$	0.42	$	0.46	$	0.43
Diluted	$	0.40	$	0.41	$	0.41	$	0.45	$	0.43

Three Months ended June 30,
			2012							2011
	Average				Yield/			Average				Yield/
(dollars in thousands)	Balance		Interest		Rates			Balance		Interest		Rates
ASSETS
Short-term interest bearing accounts	$	102,192	$	84		0.33	%	$	128,799	$	111		0.35	%
Securities available for sale (1)(excluding unrealized gains or losses)		1,208,384		7,605		2.53	%		1,098,964		8,512		3.11	%
Securities held to maturity (1)		68,472		931		5.47	%		85,615		1,125		5.27	%
Investment in FRB and FHLB Banks		27,886		328		4.73	%		27,071		329		4.87	%
Loans and leases (2)		3,938,592		50,741		5.18	%		3,648,343		51,359		5.65	%
Total interest earning assets	$	5,345,526	$	59,689		4.49	%	$	4,988,792	$	61,436		4.94	%
Other assets		465,058							424,187
Total assets	$	5,810,584						$	5,412,979

LIABILITIES AND STOCKHOLDERS' EQUITY
Money market deposit accounts	$	1,115,812		539		0.19	%	$	1,091,001	$	1,009		0.37	%
NOW deposit accounts		704,896		480		0.27	%		672,345		627		0.37	%
Savings deposits		676,794		127		0.08	%		607,533		182		0.12	%
Time deposits		973,051		3,688		1.52	%		919,590		4,233		1.85	%
Total interest bearing deposits	$	3,470,553	$	4,834		0.56	%	$	3,290,469	$	6,051		0.74	%
Short-term borrowings		171,545		48		0.11	%		135,618		52		0.15	%
Trust preferred debentures		75,422		434		2.31	%		75,422		400		2.13	%
Long-term debt		368,251		3,580		3.91	%		369,459		3,591		3.90	%
Total interest bearing liabilities	$	4,085,771	$	8,896		0.88	%	$	3,870,968	$	10,094		1.05	%
Demand deposits		1,111,804							932,066
Other liabilities		61,144							68,596
Stockholders' equity		551,865							541,349
Total liabilities and stockholders' equity	$	5,810,584						$	5,412,979
Net interest income (FTE)				50,793							51,342
Interest rate spread						3.61	%						3.89	%
Net interest margin						3.82	%						4.13	%
Taxable equivalent adjustment				1,042							1,178
Net interest income			$	49,751						$	50,164

Six Months ended June 30,
			2012							2011
	Average				Yield/			Average				Yield/
(dollars in thousands)	Balance		Interest		Rates			Balance		Interest		Rates
ASSETS
Short-term interest bearing accounts	$	91,159	$	120		0.26	%	$	135,019	$	180		0.27	%
Securities available for sale (1)(excluding unrealized gains or losses)		1,210,575		15,460		2.57	%		1,098,506		17,013		3.12	%
Securities held to maturity (1)		69,507		1,896		5.48	%		89,833		2,327		5.22	%
Investment in FRB and FHLB Banks		27,453		685		5.02	%		27,158		754		5.60	%
Loans and leases (2)		3,874,027		101,184		5.25	%		3,632,355		102,451		5.69	%
Total interest earning assets	$	5,272,721	$	119,345		4.55	%	$	4,982,871	$	122,725		4.97	%
Other assets		462,300							422,191
Total assets	$	5,735,021						$	5,405,062

LIABILITIES AND STOCKHOLDERS' EQUITY
Money market deposit accounts	$	1,102,579		1,151		0.21	%	$	1,088,456	$	2,125		0.39	%
NOW deposit accounts		699,917		1,010		0.29	%		685,171		1,261		0.37	%
Savings deposits		659,381		242		0.07	%		591,043		347		0.12	%
Time deposits		964,701		7,574		1.58	%		925,528		8,605		1.87	%
Total interest bearing deposits	$	3,426,578	$	9,977		0.59	%	$	3,290,198	$	12,338		0.76	%
Short-term borrowings		167,176		89		0.11	%		144,447		110		0.15	%
Trust preferred debentures		75,422		883		2.35	%		75,422		1,289		3.45	%
Long-term debt		369,323		7,161		3.90	%		369,717		7,162		3.91	%
Total interest bearing liabilities	$	4,038,499	$	18,110		0.90	%	$	3,879,784	$	20,899		1.09	%
Demand deposits		1,087,180							918,483
Other liabilities		62,096							67,006
Stockholders' equity		547,246							539,789
Total liabilities and stockholders' equity	$	5,735,021						$	5,405,062
Net interest income (FTE)				101,235							101,826
Interest rate spread						3.65	%						3.88	%
Net interest margin						3.86	%						4.12	%
Taxable equivalent adjustment				2,092							2,410
Net interest income			$	99,143						$	99,416

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

	June 30,		December 31,
(In thousands)	2012		2011
Residential real estate mortgages	$	630,791	$	581,511
Commercial		691,055		611,298
Commercial real estate mortgages		1,066,039		888,879
Real estate construction and development		99,236		93,977
Agricultural and agricultural real estate mortgages		107,337		108,423
Consumer		993,586		946,470
Home equity		573,170		569,645
Total loans and leases	$	4,161,214	$	3,800,203