NB&T Financial (NBTF) 8-K NB&T Financial Reports Increased Third Quarter and Year to Date Earnings

EXHIBIT 99.1

NB&T Financial Reports Increased Third Quarter and Year to Date Earnings

October 16, 2007

NB&T Financial Group, Inc. (Nasdaq: NBTF), parent company of The National Bank and Trust Company, Wilmington, Ohio, announced net income for the third quarter of 2007 was $1,029,000, or $0.32 per diluted share, compared to a net loss of $88,000 for the same period last year. The earnings improvement is primarily the result of lower provision for loan losses and security losses; however, both non-interest income and non-interest expense also improved.

Net income for the nine months ended September 30, 2007 was $3,282,000, compared to $327,000 for the same nine months last year. Last year’s results include approximately $1.4 million in prepayment penalties from the early payoff of approximately $47.2 million in Federal Home Loan Bank advances, and a net loss of approximately $1.3 million on securities sold to pay off the debt and fund a branch sale in October 2006. The increase in net income was also due to a decrease of $970,000 in the provision for loan losses over the same period last year.

Commenting on these results, President and CEO John Limbert stated, “Our operating results reflect continuing improvement in our net interest margin, the core revenue stream of our industry. Additionally, non-interest income improved modestly over the same period a year ago, while non-interest expenses were lower by $200,000. Finally, we have been pleased with the continuing improvement in the quality of our loan portfolio, as measured by lower delinquencies, non-performing loans and classified loans.”

Net interest income was $4.59 million for the third quarter of 2007, compared to $4.56 million for the same quarter last year, despite a decrease in average earning assets of approximately $65.0 million. As a result, net interest margin increased to 3.70% for the third quarter this year from 3.25% for the third quarter last year. Interest income was $8.23 million for the third quarter of 2007 compared to $8.67 million during the same period last year, which is the result of lower loan volumes. Total interest expense decreased $463,000 to $3.64 million during the third quarter of 2007 from $4.10 million during the same period last year. The decrease is primarily the result of the reduction in Federal Home Loan Bank advances, short-term borrowings and time deposits. These liability decreases, along with reductions in the investment and indirect loan portfolios, were all part of last year’s balance sheet restructuring to improve the Company’s net interest margin. Net interest income was $13.92 million for the first nine months of 2007, compared to $13.68 million for the same period last year.

The provision for loan losses was decreased to $30,000 during the third quarter of 2007 and $180,000 for the first nine months of 2007 from $270,000 and $1,150,000 during the same periods last year. The lower provision for loan losses in 2007 is a result of two factors. First, non-performing loans were down approximately $5.6 million at September 30, 2007 compared to September 30, 2006. Secondly, actual loan balances at September 30, 2007 were down $54.3 million from September 30, 2006 with the largest decrease in consumer loans, which had the highest historical loss experience. The percentage of the allowance for loan losses to total loans was 1.02% at September 30, 2007.

Non-interest income was $2.02 million for the third quarter of 2007 and $796,000 for the same period in 2006. In the third quarter of 2006, the Company incurred $1.2 million in security losses. The remainder of the increase is primarily gains on loans sold in the secondary market and fees earned on sweep account services started during the second half of 2006. These gains have been partially offset by lower deposit service charges and overdraft fees. Non-interest income, excluding security gains and losses, was $6.20 million for the first nine months of 2007, compared to $6.13 million in 2006. The Company realized $1.34 million in net securities losses in the first nine months of 2006 from the sale of $66.3 million in securities. The Company has sold no securities during 2007.

Non-interest expense decreased $202,000 to $5.32 million for the third quarter of 2007, compared to the same quarter in 2006. The decrease between the two quarters was primarily due to increased marketing expenses in 2006 associated with the Company’s branding initiatives and reduced expenses resulting from the sale of the Ada branch in October 2006. For the first nine months of 2007, non-interest expense was $15.91 million, compared to $17.79 million in 2006. This decrease is primarily due to $1.4 million in prepayment penalties from the early payoff of approximately $47.2 million in Federal Home Loan Bank debt and increased marketing expenses related to the Company’s branding initiatives in 2006.

On September 18, 2007 the Board of Directors declared a dividend of $0.28 per share, payable October 22, 2007 to shareholders of record on September 30, 2007. This amount of dividend represents a 3.7% increase from the third quarter of 2006.

SELECTED CONSOLIDATED FINANCIAL HIGHLIGHTS

(in thousands, except per share data)

(Unaudited)

	Three Months Ending															Nine Months Ending
	9/30/2007			6/30/2007			3/31/2007			12/31/2006			9/30/2006			9/30/2007			9/30/2006
Statements of Income
Interest income	$	8,226		$	8,627		$	8,016		$	8,292		$	8,665		$	24,869		$	25,804
Interest expense		3,640			3,678			3,633			3,675			4,103			10,951			12,120
Net interest income		4,586			4,949			4,383			4,617			4,562			13,918			13,684
Provision for loan losses		30			145			5			180			270			180			1,150
Other non-interest income		2,020			2,148			2,031			1,966			1,988			6,199			6,129
Net gains/(losses) on sales of securities		—			—			—			—			(1,192	)		—			(1,342	)
Gain on sale of branch		—			—			—			1,099			—			—
Total non-interest income		2,020			2,148			2,031			3,065			796			6,199			4,787
Other non-interest expenses		5,324			5,382			5,207			5,522			5,526			15,913			16,427
FHLB prepayment penalties		—			—			—			—			—			—			1,363
Total non-interest expenses		5,324			5,382			5,207			5,522			5,526			15,913			17,790
Income before income taxes		1,252			1,570			1,202			1,980			(438	)		4,024			(469	)
Income taxes		223			323			196			451			(350	)		742			(796	)
Net income	$	1,029		$	1,247		$	1,006		$	1,529		$	(88	)	$	3,282		$	327
Per Share Data
Basic earnings per share	$	0.32		$	0.39		$	0.32		$	0.48		$	(0.03	)	$	1.03		$	0.10
Diluted earnings per share		0.32			0.39			0.32			0.48			(0.03	)		1.03			0.10
Dividends per share		0.28			0.28			0.28			0.27			0.27			0.84			0.81
Book value at quarter end		18.35			18.15			18.12			18.01			17.76			18.35			17.76
Average basic shares outstanding		3,182			3,189			3,186			3,175			3,176			3,182			3,174
Average diluted shares outstanding		3,183			3,191			3,186			3,176			3,177			3,184			3,176
Balance Sheet Items (Quarter End)
Total assets	$	528,524		$	540,814		$	546,912		$	555,168		$	570,831		$	528,524		$	570,831
Securities		86,705			79,573			79,104			82,897			84,050			86,705			84,050
Loans		373,483			384,983			401,753			410,365			427,797			373,483			427,797
Allowance for loan losses		3,824			3,993			4,614			4,763			4,741			3,824			4,741
Deposits		428,895			443,421			447,048			453,268			460,593			428,895			460,593
Borrowings		36,801			36,125			37,601			39,598			49,331			36,801			49,331
Total shareholders' equity		59,112			58,545			58,517			58,223			57,468			59,112			57,468
Assets Under Management
Total assets	$	528,524		$	540,814		$	546,912		$	555,168		$	570,831		$	528,524		$	570,831
Cash management sweep accounts		54,659			41,881			39,703			29,260			37,734			54,659			37,734
Market value of trust assets		201,657			188,597			183,332			180,050			176,778			201,657			176,778
Total assets under management		784,840			771,292			769,947			764,478			785,343			784,840			785,343
Selected Financial Ratios
Return on average assets		0.76	%		0.91	%		0.73	%		1.09	%		(0.06	)%		0.81	%		0.05	%
Return on average equity		6.93			8.50			6.97			10.44			(0.61	)		7.47			0.57
Dividend payout ratio		87.50			71.79			87.50			56.25			NM			81.55			810.00
Net interest margin		3.70			3.98			3.55			3.58			3.25			3.75			3.16
Average loans to average total assets		71.02			72.79			74.15			74.51			70.70			72.59			67.78
Average equity to average total assets		10.98			10.88			10.71			10.43			9.47			10.85			9.20
Non-performing loans to total loans		0.92			0.86			2.38			2.04			2.12			0.92			2.12
Loan loss allowance to total loans		1.02			1.04			1.15			1.16			1.11			1.02			1.11
Loan loss allowance to non-performing loans		111.36			120.38			48.35			56.94			52.33			111.36			52.33
Net charge-offs to average loans		0.21			0.78			0.15			0.15			0.16			0.38			0.15