NB&T Financial (NBTF) 8-K NB&T Financial Reports 2008 Earnings and Increased Dividend

EXHIBIT 99.1

NB&T Financial Reports 2008 Earnings and Increased Dividend

NB&T Financial Group, Inc. (Nasdaq: NBTF), parent company of The National Bank and Trust Company, Wilmington, Ohio, announced net income for 2008 of $1.22 per diluted share, compared to $1.39 per diluted share for last year. Net income for 2008 was $3.8 million, compared to $4.4 million for 2007. In 2008, the Bank opened three new branches, increasing expenses approximately $750,000 over last year. The Bank is taking advantage of its well-capitalized position to expand into contiguous markets. In addition, the provision for loan losses increased $265,000 in 2008 due to a higher level of nonperforming loans and increased credit risk inherent in the current economic climate. Net income for the fourth quarter of 2008 was $927,000, compared to $1.2 million for the same quarter last year. The decline is due to lower non-interest income and a higher provision for loan losses in the fourth quarter of 2008, compared to the same quarter last year.

Commenting on these results, President & C.E.O. John J. Limbert said, “2008 was a challenging year for all of us in the banking industry. The Federal Reserve dramatically reduced interest rates, loan volume slowed, unemployment rose, and we saw some of the largest financial institutions struggle. Despite all that, we earned $3.8 million for the year and raised our dividend from $1.12 per share in 2007 to $1.16 per share in 2008. We continue to focus on the fundamentals during this economic challenge. Our average equity to assets remains over 11%; nonperforming loans totaled $3.2 million at December 31, 2008, less than 1% of total loans; net interest margin increased in 2008; and we continue to operate profitably.”

Net interest income was $18.5 million for 2008, a decrease of $196,000 compared to $18.7 million for 2007. Net interest margin increased to 3.84% for 2008 from 3.78% last year. Average interest-earning assets decreased approximately 2.5% to $481.5 million during 2008 compared to 2007 and interest income decreased $4.1 million. Also, the average yield on earning assets decreased from 6.67% for 2007 to 5.99% for 2008. Offsetting the decrease in interest income, interest expense decreased $3.9 million to $10.4 million during 2008 from $14.3 million last year. Average interest-bearing liabilities decreased 3.6% from last year to $404.5 million, and their cost decreased to 2.56% during 2008 from 3.40% last year.

The provision for loan losses was $400,000 in 2008 and $135,000 in 2007. Net charge-offs were $583,000, or 0.17% of total average loans, in 2008, compared to $1.3 million, or 0.34% of total average loans, in 2007. Non-performing loans totaled $3.2 million at December 31, 2008, compared to $2.0 million at December 31, 2007. In addition, other real estate owned increased to $321,000 at December 31, 2008, from $176,000 at December 31, 2007. The allowance for loan losses to total loans was 1.01% at December 31, 2008, compared to 1.00% at December 31, 2007.

Total non-interest income was $8.2 million in 2008 and 2007.

Total non-interest expense was $21.7 million in 2008, compared to $21.3 million in 2007. The increase in non-interest expense is largely due to increased personnel and occupancy costs associated with opening three new branches in 2008.

On December 16, 2008, the Board of Directors declared a dividend of $0.29 per share, payable January 26, 2009 to shareholders of record on December 31, 2008. This dividend represents a 3.6% increase from the fourth quarter of 2007.

SELECTED CONSOLIDATED FINANCIAL HIGHLIGHTS

(in thousands, except per share data)

(Unaudited)

	Three Months Ending															Year Ending
	12/31/2008			9/30/2008			6/30/2008			3/31/2008			12/31/2007			12/31/2008			12/31/2007
Statements of Income
Interest income	$	7,011		$	7,113		$	7,214		$	7,491		$	8,077		$	28,828		$	32,947
Interest expense		2,247			2,411			2,659			3,036			3,325			10,353			14,276
Net interest income		4,764			4,702			4,555			4,455			4,752			18,475			18,671
Provision for loan losses		105			105			95			95			(45	)		400			135
Other non-interest income		1,864			2,043			2,036			2,277			2,043			8,221			8,240
Net gains/(losses) on sales of securities		—			4			11			—			—			15			—
Total non-interest income		1,864			2,047			2,047			2,277			2,043			8,236			8,240
Total non-interest expenses		5,407			5,396			5,487			5,390			5,402			21,679			21,316
Income before income taxes		1,116			1,248			1,020			1,247			1,438			4,632			5,460
Income taxes		189			226			156			230			286			801			1,028
Net income	$	927		$	1,022		$	864		$	1,017		$	1,152		$	3,831		$	4,432
Per Share Data
Basic earnings per share	$	0.30		$	0.33		$	0.28		$	0.32		$	0.36		$	1.22		$	1.39
Diluted earnings per share		0.30			0.33			0.28			0.32			0.36			1.22			1.39
Dividends per share		0.29			0.29			0.29			0.29			0.28			1.16			1.12
Book value at quarter end		18.52			18.39			18.48			18.69			18.52			18.52			18.52
Average basic shares outstanding		3,141			3,138			3,137			3,139			3,182			3,143			3,188
Average diluted shares outstanding		3,141			3,138			3,137			3,140			3,183			3,143			3,190
Balance Sheet Items (Quarter End)
Total assets	$	524,841		$	525,081		$	526,849		$	529,663		$	518,922		$	524,841		$	518,922
Securities		87,908			87,803			90,906			89,311			89,285			87,908			89,285
Loans, including loans held for sale		336,184			351,549			344,329			341,920			359,266			336,184			359,266
Allowance for loan losses		3,411			3,563			3,534			3,534			3,594			3,411			3,594
Deposits		420,728			421,700			423,142			425,893			420,254			420,728			420,254
Borrowings		41,503			41,037			41,295			40,606			35,532			41,503			35,532
Total shareholders' equity		58,791			58,269			58,583			59,260			58,883			58,791			58,883
Assets Under Management
Total assets	$	524,841		$	525,081		$	526,849		$	529,663		$	518,922		$	524,841		$	518,922
Cash management sweep accounts		47,665			60,733			69,455			70,938			54,012			47,665			54,012
Market value of trust assets		164,188			176,111			181,235			197,279			203,286			164,188			203,286
Total assets under management	$	736,694		$	761,925		$	777,539		$	797,880		$	776,220		$	736,694		$	776,220
Selected Financial Ratios
Return on average assets		0.70	%		0.77	%		0.65	%		0.78	%		0.86	%		0.73	%		0.82	%
Return on average equity		6.27			6.88			5.82			6.92			7.70			6.49			7.53
Dividend payout ratio		96.67			87.88			103.57			90.63			77.78			95.08			80.58
Net interest margin		3.93			3.91			3.78			3.73			3.89			3.84			3.78
Non-interest expense to total revenue		81.58			79.95			83.11			80.07			79.50			81.16			79.21
Average loans to average total assets		63.82			66.09			64.58			66.21			68.72			65.19			71.62
Asset Quality
Nonaccrual loans	$	2,982		$	2,990		$	3,102		$	3,288		$	1,729		$	2,982		$	1,729
Accruing and 90 or more days past due		200			45			83			5			253			200			253
Total nonperforming loans	$	3,182		$	3,035		$	3,185		$	3,293		$	1,982		$	3,182		$	1,982
Other real estate owned		321			289			271			354			176			321			176
Net charge offs		258			76			94			155			187			583			1,304
Non-performing loans to total loans		0.95	%		0.86	%		0.92	%		0.96	%		0.55	%		0.95	%		0.55	%
Loan loss allowance to total loans		1.01			1.01			1.03			1.03			1.00			1.01			1.00
Loan loss allowance to non-performing loans		107.20			117.40			110.96			107.32			181.33			107.20			181.33
Loans 30+ days past due to total loans		0.51			0.32			0.55			0.60			0.77			0.51			0.77
Net charge-offs to average loans		0.30			0.09			0.11			0.18			0.20			0.17			0.34
Capital
Average equity to average total assets		11.10	%		11.25	%		11.23	%		11.23	%		11.20	%		11.21	%		10.94	%
Tier 1 Leverage ratio		12.21			12.15			12.00			12.07			11.96			12.21			11.96
Total Risk-based capital ratio**		18.94			18.13			18.27			18.30			17.69			18.94			17.69
**     Estimated for current quarter end