updated 4/26/2011 10:16:42 AM ET 2011-04-26T14:16:42

WILMINGTON, Ohio, April 26, 2011 (GLOBE NEWSWIRE) -- NB&T Financial Group, Inc. (Nasdaq:NBTF), parent company of The National Bank and Trust Company ("NB&T"), Wilmington, Ohio, announced net income for the first quarter of 2011 of $1.0 million, or $.29 per share. Net income for the first quarter of 2010 was $5.6 million, or $1.65 per share, largely due to a bargain purchase pre-tax gain of approximately $7.6 million in the Federal Deposit Insurance Corporation ("FDIC") assisted acquisition of certain of the assets and liabilities of American National Bank ("ANB"). In addition, the Company realized a pre-tax gain of $1.4 million on the sale of its insurance agency in January 2010. 

Commenting on these results, President & C.E.O. John J. Limbert said, "Loan and non-interest income growth continue to be anemic despite what appears to be an improving economy. While non-performing assets increased approximately $532,000 in the first quarter of 2011, we are pushing to resolve problem assets sooner rather than later. Our net charge-offs of approximately $759,000 and increasing the provision to $550,000 reflects this effort."

Net interest income was $5.9 million for the first quarter of 2011, compared to $5.6 million for the first quarter of 2010. Net interest margin increased to 3.84% for the first quarter of 2011, compared to 3.75% for the same quarter last year. The net interest margin increased primarily due to two factors. First, average loans outstanding for 2011, which had an average rate of 5.97%, increased $17.0 million, largely a result of the ANB acquisition in March 2010. Second, the average cost of interest-bearing liabilities declined from 1.48% in the first quarter of 2010 to 1.10% in the first quarter of 2011 on increased average deposits of $12.8 million. Due to increased liquidity, the Company was able to lower rates on interest-bearing deposits and reduce higher cost Federal Home Loan Bank debt by $24.5 million.

The provision for loan losses for the first quarter of 2011 was $550,000, compared to $435,000 in the same quarter last year. Net charge-offs were $759,000 in the first quarter of 2011, compared to $567,000 in the first quarter of 2010. Charge-offs in 2011 increased primarily due to the write-down of one commercial real estate loan as a result of a recently updated collateral valuation. The provision for loan losses was increased to add specific loan reserves and increase the general reserves related to increased charge-off experience. Non-performing loans increased to $11.5 million at March 31, 2011, compared to $6.8 million at March 31, 2010. The year-over-year increase in non-performing loans is due primarily to an increase in non-performing loans from the December 2009 Community National Bank and March 2010 ANB acquisitions. Approximately $2.1 million of the non-performing loans outstanding at March 31, 2011 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 $2.6 million for the first quarter of 2011, compared to $10.6 million for the first quarter of 2010. Non-interest income for 2010 was higher due to the ANB bargain purchase gain and insurance agency sale previously discussed. In the first quarter of 2011, the Company realized $789,000 in gains on the sale of approximately $23.0 million in securities. The securities sold had an expected average life of less than two years and were sold to realize gains and offset losses related to foreclosures and closed bank properties.

Total non-interest expense was $6.6 million for the first quarter of 2011, compared to $7.5 million for the first quarter of 2010. In the first quarter of 2011, the Company recognized additional expenses and losses on sales of foreclosed and closed bank properties of approximately $350,000.  Non-interest expenses for the first quarter of 2010 were significantly higher due to increased bonus plan expense and acquisition related expenses.  

On March 14, 2011, the Board of Directors declared a dividend of $0.30 per share, payable April 25, 2011 to shareholders of record on March 31, 2011. This dividend represents a 3.4% increase over the $0.29 per share dividend declared in the first quarter of 2010.   

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

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