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NB&T Financial Reports Earnings for Third Quarter 2012

WILMINGTON, Ohio, Oct. 16, 2012 (GLOBE NEWSWIRE) -- NB&T Financial Group, Inc. (Nasdaq:NBTF), parent company of The National Bank and Trust Company (the "Bank"), Wilmington, Ohio, announced net income for the third quarter of 2012 of $1.3 million, or $.37 per share. Net income for the third quarter of 2011 was $1.1 million, or $.33 per share. Net income increased primarily due to recognition of $1.0 million in securities sale gains, compared to $421,000 in securities sale gains in the third quarter of last year. In addition, the Bank's other non-interest income increased to $3.0 million in the third quarter of 2012 from $2.1 million in the same quarter last year, offset by increased provision for loan losses of approximately $1.5 million. Net income for the first nine months of 2012 was $2.8 million, or $.81 per share, compared to $3.2 million, or $.93 per share, for the same period in 2011.

Reviewing the third quarter 2012, President & CEO, John Limbert, commented, "The four-year-old recession continues to negatively impact specific business sectors. We have invested considerable time and talent partnering with certain clients in some of these affected sectors. Based on our ongoing analysis of non-performing loans, we recorded additional loan loss provisions this quarter. At September 30, 2012, the total allowance for loan losses is $6.1 million, representing 1.5% of total loans."

Net interest income was $5.4 million for the third quarter of 2012, compared to $5.8 million for the third quarter of 2011. Net interest margin decreased to 3.42% for the third quarter of 2012, compared to 3.67% for the same quarter last year. The net interest margin decreased primarily due to a change in asset mix from higher-yielding loans to lower-yielding securities. Average loans, which had an average rate of 5.34%, declined $7.9 million, while average overnight investments and securities, with an average rate of 1.47%, increased $19.5 million in the third quarter of 2012. Net interest income for the first nine months of 2012 was $16.4 million, compared to $17.8 million for the first nine months of 2011.

The provision for loan losses for the third quarter of 2012 was $2.0 million, compared to $475,000 in the same quarter last year. Net charge-offs were $346,000 in the third quarter of 2012, compared to $466,000 in the third quarter of 2011. Year to date net charge-offs for 2012 were $2.1 million, compared to $1.6 million for the first nine months of 2011. Non-performing loans were $12.4 million at September 30, 2012, compared to $9.6 million at September 30, 2011. The September 30, 2012 non-performing loans include a $3.2 million loan relationship put on non-accrual status during 2012.

Specific reserves on two commercial relationships were the primary reason for the approximate $1.5 million increase in the provision for loan losses in the third quarter of 2012. The first relationship totals approximately $3.2 million and includes a $2.5 million operating line which matured and was put on nonaccrual. The Bank and other creditors are developing a workout plan and monitoring the borrower's continuing activities, but the Bank has specifically reserved for potential reduced cash flow from the borrower. The second relationship involves an $843,000 commercial real estate loan where the borrower has stopped paying. The Bank has specifically reserved for a potential loss based on an appraisal completed during the third quarter. This loan is subject to the FDIC loss share agreement. Approximately $2.5 million of the non-performing loans outstanding at September 30, 2012 are covered under the Company's FDIC loss share agreement, with the FDIC sharing in 80% of any future losses associated with those loans.

Total non-interest income was $4.0 million for the third quarter of 2012, compared to $2.6 million for the third quarter of 2011. Non-interest income for 2012 was higher due to recognition of $1.0 million in securities sale gains, compared to $421,000 in securities sale gains in the third quarter of last year. In addition, the Bank also terminated its rights under the single-family FDIC loss share guarantee for approximately $405,000 during the third quarter of 2012. The Bank still maintains an FDIC loss share guarantee on approximately $30.0 million of non-single family loans. The Company also realized non-taxable income of approximately $359,000 on a bank-owned life insurance death benefit in excess of surrender value received in the third quarter of 2012. Non-interest income for the first nine months of 2012 was $8.4 million, compared to $7.0 million for the same period last year.

Total non-interest expense was $5.9 million for the third quarter of 2012, compared to $6.3 million for the third quarter of 2011. The decline in expense is due to overall expense reduction primarily in the areas of personnel, benefit costs, branch hours, marketing and other processing costs. For the first nine months of 2012, total non-interest expense was $17.7 million, compared to $19.0 million for the same period in 2011.

On August 21, 2012, the Board of Directors declared a dividend of $0.30 per share, payable October 22, 2012 to shareholders of record on September 28, 2012.

CONTACT: Craig Fortin NB&T Financial Group, Inc. 937-283-3002Source:NB&T Financial Group, Inc.