**EXHIBIT 99.1**

 

**Safe Harbor Under the Private Securities Litigation Reform Act of 1995**

 

The Private Securities Litigation Reform Act of 1995 (the“Act”) provides a “safe harbor” for forward-looking statements to encourage companies to provide prospective information about their companies, so long as those statements are identified as forward-looking and are accompanied bymeaningful cautionary statements identifying important factors that could cause actual results to differ materially from those discussed in the statement. NB&T Financial Group, Inc. (“NB&T Financial”) desires to take advantage ofthe “safe harbor” provisions of the Act. Certain information, particularly information regarding future economic performance and finances and plans and objectives of management, contained or incorporated by reference in NB&TFinancial’s Annual Report on Form 10-K for fiscal year 2003 is forward-looking. In some cases, information regarding certain important factors that could cause actual results of operations or outcomes of other events to differ materially fromany such forward-looking statement appear together with such statement. In addition, forward-looking statements are subject to other risks and uncertainties affecting the financial institutions industry, including, but not limited to, the following:

 

**Interest Rate Risk**

 

NB&T Financial’s operating results are dependent to a significant degree on its netinterest income, which is the difference between interest income from loans, investments and other interest-earning assets and interest expense on deposits, borrowings and other interest-bearing liabilities. The interest income and interest expenseof NB&T Financial change as the interest rates on interest-earning assets and interest-bearing liabilities change. Interest rates may change because of general economic conditions, the policies of various regulatory authorities and other factorsbeyond NB&T Financial’s control. In a rising interest rate environment, loans tend to prepay slowly and new loans at higher rates increase slowly, while interest paid on deposits increases rapidly because the terms to maturity of depositstend to be shorter than the terms to maturity or prepayment of loans. Such differences in the adjustment of interest rates on assets and liabilities may negatively affect NB&T Financial’s income. 

 

**Possible Inadequacy of the Allowance for Loan Losses**

 

NB&T Financial maintains an allowance for loan losses based upon a number of relevantfactors, including, but not limited to, trends in the level of nonperforming assets and classified loans, current and anticipated economic conditions in the primary lending area, past loss experience, possible losses arising from specific problemloans and changes in the composition of the loan portfolio. While the Board of Directors of NB&T Financial believes that it uses the best information available to determine the allowance for loan losses, unforeseen market conditions could resultin material adjustments, and net earnings could be significantly adversely affected if circumstances differ substantially from the assumptions used in making the final determination. 

 

Loans not secured by one- to four-family residential real estate are generally considered to involve greater risk of loss than loans securedby one- to four-family residential real estate due, in part, to the effects of general economic conditions. The repayment of commercial loans and multifamily residential and nonresidential real estate loans generally depends upon the cash flow fromthe operation of the business or property, which may be negatively affected by national and local economic conditions. Construction loans may also be negatively affected by such economic conditions, particularly loans made to developers who do nothave a buyer for a property before the loan is made. The risk of default on consumer loans increases during periods of recession, high unemployment and other adverse economic conditions. When consumers have trouble paying their bills, they are morelikely to pay mortgage loans than consumer loans. In addition, the collateral securing such loans, if any, may decrease in value more rapidly than the outstanding balance of the loan. 

 

**Competition**

 

The National Bank and Trust Company (the “Bank”) competes for deposits with other commercial banks, savings associations and credit unions and issuers ofcommercial paper and other securities, such as shares in money market mutual funds. The primary factors in competing for deposits are interest rates and convenience of office location. In making loans, the Bank competes with other commercial banks,savings and loan associations, savings banks, consumer finance companies, credit unions, leasing companies, mortgage companies and other lenders. Competition is affected by, among other things, the general availability of lendable funds, general andlocal economic conditions, current interest rate levels and other factors which are not readily predictable. The size of financial institutions competing with the Bank is likely to increase as a result of changes in statutes and regulationseliminating various restrictions on interstate and inter-industry branching and acquisitions. Such increased competition may have an adverse effect upon the Bank. 

 

**Legislation and Regulation That May Adversely Affect NB&T Financial’s Earnings**

 

The Bank is subject to regulation, examination and oversight by the Office of theComptroller of the Currency (the “OCC”), special examination by the Board of Governors of the Federal Reserve System (the “FRB”) and some regulation, oversight and special 

 

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examination by the Federal Deposit Insurance Corporation (the “FDIC”). As a bank holding company, NB&T Financial is also subject to regulationand examination by the FRB. Such supervision and regulation of the Bank and NB&T Financial are intended primarily for the protection of depositors and not for the maximization of shareholder value and may affect the ability of the company toengage in various business activities. The assessments, filing fees and other costs associated with reports, examinations and other regulatory matters are significant and may have an adverse effect on NB&T Financial’s net earnings.

 

The FDIC is authorized to establish separate annual assessment rates fordeposit insurance of members of the Bank Insurance fund (the “BIF”) and the Savings Association Insurance Fund (the “SAIF”). The FDIC has established a risk-based assessment system for both SAIF and BIF members. Under suchsystem, assessments may vary depending on the risk the institution poses to its deposit insurance fund. Such risk level is determined by reference to the institution’s capital level and the FDIC’s level of supervisory concern about theinstitution. 

 

The FDIC is authorized to establish separate annual assessmentrates for deposit insurance of members of the Bank Insurance fund (the “BIF”) and the Savings Association Insurance Fund (the “SAIF”). The FDIC has established a risk-based assessment system for both SAIF and BIF members. Undersuch system, assessments may vary depending on the risk the institution poses to its deposit insurance fund. Such risk level is determined by reference to the institution’s capital level and the FDIC’s level of supervisory concern aboutthe institution. 

 

 

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