NB&T Financial (NBTF) 8-K NB&T Financial Reports Earnings for Third Quarter 2012

EXHIBIT 99.1

NB&T Financial Reports Earnings for Third Quarter 2012

October 16, 2012

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 to 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.

SELECTED CONSOLIDATED FINANCIAL HIGHLIGHTS

(in thousands, except per share data)

(Unaudited)

	Three Months Ending															Nine Months Ending
	9/30/2012			6/30/2012			3/31/2012			12/31/2011			9/30/2011			9/30/2012			9/30/2011
Statements of Income
Interest income	$	6,197		$	6,278		$	6,527		$	6,685		$	6,829		$	19,002		$	21,487
Interest expense		749			896			964			999			1,079			2,609			3,735
Net interest income		5,448			5,382			5,563			5,686			5,750			16,393			17,752
Provision for loan losses		1,973			332			1,300			1,525			475			3,605			1,410
Other non-interest income		2,977			2,176			2,116			2,080			2,148			7,269			5,824
Other-than-temporary impairment charge		—			(35	)		—			—			—			(35	)		—
Net gains/(losses) on sales of securities		1,013			161			—			620			421			1,174			1,200
Total non-interest income		3,990			2,302			2,116			2,700			2,569			8,408			7,024
Total non-interest expenses		5,934			5,801			6,014			6,116			6,282			17,749			19,007
Income before income taxes		1,531			1,551			365			745			1,562			3,447			4,359
Income taxes		257			396			4			128			432			657			1,175
Net income	$	1,274		$	1,155		$	361		$	617		$	1,130		$	2,790		$	3,184
Per Share Data
Basic earnings per share	$	0.37		$	0.33		$	0.11		$	0.18		$	0.33		$	0.81		$	0.93
Diluted earnings per share		0.37			0.33			0.11			0.18			0.33			0.81			0.93
Dividends per share		0.30			0.30			0.30			0.30			0.30			0.90			0.90
Book value at quarter end		20.79			20.72			20.63			20.68			20.98			20.79			20.98
Average basic shares outstanding		3,424			3,425			3,424			3,423			3,424			3,424			3,424
Average diluted shares outstanding		3,432			3,431			3,434			3,431			3,430			3,432			3,436
Balance Sheet Items (Quarter End)
Total assets	$	669,838		$	687,226		$	697,620		$	675,588		$	674,030		$	669,838		$	674,030
Securities		137,998			156,161			154,437			139,744			145,457			137,998			145,457
Loans, including loans held for sale		400,036			396,500			394,367			404,470			405,009			400,036			405,009
Allowance for loan losses		6,135			4,508			4,573			4,668			3,484			6,135			3,484
Deposits		576,348			592,979			602,963			581,383			576,391			576,348			576,391
Borrowings		15,310			15,310			15,310			15,310			16,485			15,310			16,485
Total shareholders’ equity		71,153			70,955			70,663			70,790			71,845			71,153			71,845
Assets Under Management
Total assets	$	669,838		$	687,226		$	697,620		$	675,588		$	674,030		$	669,838		$	674,030
Cash management sweep accounts		37,477			40,739			41,095			33,834			42,310			37,477			42,310
Market value of trust assets		215,743			193,906			205,219			197,274			190,957			215,743			190,957
Market value of brokerage assets		71,417			67,082			69,832			67,282			63,548			71,417			63,548
Loans serviced for others		48,984			53,419			52,800			52,667			54,121			48,984			54,121
Total assets under management	$	1,043,459		$	1,042,372		$	1,066,566		$	1,026,645		$	1,024,966		$	1,043,459		$	1,024,966
Selected Financial Ratios
Return on average assets (annualized)		0.74	%		0.67	%		0.21	%		0.36	%		0.66	%		0.54	%		0.61	%
Return on average equity (annualized)		7.10			6.30			2.04			3.39			6.39			5.24			5.84
Dividend payout ratio		81.08			90.91			272.73			166.67			90.91			111.11			96.77
Net interest margin		3.42			3.38			3.46			3.61			3.67			3.42			3.82
Non-interest expense to total revenue		62.87			75.49			78.32			72.93			75.51			71.57			77.32
Average loans to average total assets		57.80			56.87			56.54			58.55			59.64			56.99			60.20
Asset Quality
Nonaccrual loans	$	12,179		$	11,962		$	9,647		$	12,007		$	9,646		$	12,179		$	9,646
Accruing and 90 or more days past due		247			165			327			133			3			247			3
Total nonperforming loans	$	12,426		$	12,127		$	9,974		$	12,140		$	9,649		$	12,426		$	9,649
Other real estate owned		2,196			3,032			3,500			3,520			4,236			2,196			4,236
Net charge-offs		346			397			1,395			341			466			2,138			1,640
Non-performing loans to total loans		3.11	%		3.06	%		2.53	%		3.00	%		2.38	%		3.11	%		2.38	%
Loan loss allowance to total loans		1.53			1.14			1.16			1.15			0.86			1.53			0.86
Loan loss allowance to non-performing loans		49.37			37.17			45.85			38.45			36.11			49.37			36.11
Accruing loans 30+ days past due to total loans		0.64			0.36			0.49			0.63			0.92			0.64			0.92
Net charge-offs to average loans		0.35			0.41			1.41			0.34			0.46			0.72			0.54
Capital
Average equity to average total assets		10.38	%		10.66	%		10.13	%		10.55	%		10.33	%		10.38	%		10.33	%
Tier 1 leverage ratio**		10.97			10.80			10.66			11.03			11.09			10.97			11.09
Total risk-based capital ratio**		19.85			19.20			19.20			19.15			18.86			19.85			18.86

** Estimated for current quarter end