FOR IMMEDIATE RELEASE

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

Date: July 15, 2014

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 second quarter of 2014 of $1.3 million, or $.39 per share, compared to net income of $1.1 million, or $.33 per share, for the second quarter of 2013. The increase in net income is due primarily to a $1.2 million lower loan loss provision in the second quarter of 2014 compared to the same period last year. This lower provision was partially offset by gains on security sales of $817,000 and a gain on extinguishment of long-term debt of approximately $300,000 in the second quarter of 2013. Net income for the first six months of 2014 was $2.4 million, or $.71 per share, compared to $2.2 million, or $.63 per share, for the same period in 2013. For the six months of 2014, a lower provision of $1.0 million was offset by the above mentioned gains; however, non-interest expenses additionally were down approximately $300,000 for the first six months of 2014 compared to the same period in 2013.

Net interest income was $5.3 million for the second quarter of 2014, compared to $5.1 million for the second quarter of 2013. Net interest margin increased to 3.51% for the second quarter of 2014, compared to 3.34% for the same quarter last year. Net interest income for the first half of 2014 was $10.6 million, compared to $10.5 million for the first half of 2013. Net interest income has increased primarily due to increased investment in longer term tax-exempt municipal securities and slower prepayments on mortgage-related securities. As a result, investment interest income increased $477,000 and $558,000 for the three and six months ended June 30, 2014 compared to the same periods last year. Loan interest income was down $379,000 and $733,000 for the three and six months ended June 30, 2014 compared to the same periods in 2013. The decreases were due primarily to lower average loan balances and continued repricing of new and variable rate loans to lower rates. This lower loan interest income was offset by lower interest expense of $116,000 and $259,000 for the second quarter and first six months of 2014 compared to the same periods in 2013 due to continued runoff of higher priced time deposits.

The provision for loan losses for the second quarter and first six months of 2014 was $135,000 and $410,000, compared to $1.3 million and $1.4 million for the same periods last year. During the second quarter of 2013, the provision for loan losses increased approximately $1.2 million to add specific loan reserves for one commercial loan that was subsequently charged-off. Net charge-offs were $431,000 in the second quarter of 2014, compared to $167,000 in the second quarter of 2013. Year to date net charge-offs for 2014 were $749,000, compared to $397,000 for the first six months of 2013. Despite the increase in charge-offs, asset quality improved during the first six months of 2014. Non-performing loans declined to $3.2 million at June 30, 2014, from $5.8 million and $9.1 million at December 31, 2013 and June 30, 2013 respectively, due primarily to the resolution of problem loans. Other real estate owned also decreased to $1.6 million at June 30, 2014 from $1.9 million at June 30, 2013.

President & CEO, John Limbert, commented, The improvements in asset quality have directly resulted in lower loan loss provisions and, combined with lower expenses, have given us our best quarter since 2010.

Total non-interest income was $2.1 million for the second quarter of 2014, compared to $3.3 million for the second quarter of 2013. During the second quarter of 2013, the Company realized a gain of $300,000 on the extinguishment of $1.0 million in trust preferred debt and approximately $817,000 in securities sale gains. There were no such gains during the second quarter or first six months of 2014. As a result, non-interest income for the first six months of 2014 was $4.0 million, compared to $5.2 million for the same period last year. In addition, total NSF fees for the first half of 2014 have declined $152,000, or 13%, when compared to the first six months of 2013.

Total non-interest expense was $5.6 million for each of the second quarter of 2014 and 2013. Non-interest expense for the first six months of 2014 was $11.2 million, compared to $11.5 million for the same period last year. The expense decrease is primarily due to a $164,000 decrease in net costs associated with the operation of other real estate and a decrease of approximately $171,000 in state taxes due to Ohio's new financial institution tax replacing Ohio's bank franchise tax.

On June 17, 2014 the Board of Directors declared a dividend of $0.30 per share, payable July 21, 2014 to shareholders of record on June 30, 2014.

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