Note 8.

Junior Subordinated Debt

The Company sponsors five business trusts, CNBF Capital Trust I, NBT Statutory Trust I, NBT Statutory Trust II, Alliance Financial Capital Trust I and Alliance Financial Capital Trust II. The trusts were formed for the purpose of issuing company-obligated mandatorily redeemable preferred securities to third-party investors and investing in the proceeds from the sale of such preferred securities solely in junior subordinated debt securities of the Company. The debentures held by each trust are the sole assets of that trust. These five statutory business trusts are collectively referred herein to as “the Trusts.” The Company guarantees, on a limited basis, payments of distributions on the trust preferred securities and payments on redemption of the trust preferred securities. The Trusts are variable interest entities (“VIEs”) for which the Company is not the primary beneficiary, as defined by U.S. GAAP. In accordance with U.S. GAAP, the accounts of the Trusts are not included in the Company’s consolidated financial statements.

As of September 30, 2013, the Trusts had the following issues of trust preferred debentures, all held by the Trusts, outstanding (dollars in thousands):

Description	Issuance Date	Trust Preferred Securities Outstanding		Interest Rate	Trust Preferred Debt Owed To Trust		Final Maturity Date

CNBF Capital Trust I	August-99	$	18,000	3-month LIBOR plus 2.75%	$	18,720	August-29

NBT Statutory Trust I	November-05		5,000	3-month LIBOR plus 1.40%		5,155	December-35

NBT Statutory Trust II	February-06		50,000	3-month LIBOR plus 1.40%		51,547	March-36

Alliance Financial Capital Trust I	December-03		10,000	3-month LIBOR plus 2.85%		10,310	January-34

Alliance Financial Capital Trust II	September-06		15,000	3-month LIBOR plus 1.65%		15,464	September-36

The Company owns all of the common stock of the Trusts, which have issued trust preferred securities in conjunction with the Company issuing trust preferred debentures to the Trusts. The terms of the trust preferred debentures are substantially the same as the terms of the trust preferred securities.