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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549





FORM 10-Q





(Mark One)

|x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|- | ---------------------------------------------------------------------------------------

For the quarterly period ended September 30, 2008

OR



| ̈ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|- | ----------------------------------------------------------------------------------------

For the transition period from/to





NB&T FINANCIAL GROUP,
INC.

(Exact name of registrant as specified in its charter)







|                                                               |  |                                        
|-------------------------------------------------------------- |  | ---------------------------------------
|Ohio                                                           |  | 31-1004998                             
|(State or other jurisdiction of incorporation or organization) |  | (I.R.S. Employer Identification Number)

48 N. South Street, Wilmington, Ohio 45177

(Address of principal executive offices) (Zip Code)

Registrants telephone number: (937) 382-1441





Indicate by check mark whether the Registrant
(1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and
(2) has been subject to such filing requirements for the past 90 days.    Yes  x    No   ̈

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See the
definition of large accelerated filer, accelerated filer, and smaller reporting company in Rule 12b-2 of the Exchange Act. (Check one):



|                        |  |                                                  |  |                           |  |  
|----------------------- |  | ------------------------------------------------ |  | ------------------------- |  | -
|Large accelerated filer |  |  ̈                                                |  | Accelerated Filer         |  |  ̈
|                        |  |                                                  | 
|Non-accelerated filer   |  |  ̈  (Do not check if a smaller reporting company) |  | Smaller Reporting Company |  | x

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange
Act).    Yes   ̈    No  x

Indicate the number of shares outstanding of each of the issuers classes of common stock, as of the last practicable date: As of November 10, 2008, 3,168,876 common shares were issued and outstanding.









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NB&T FINANCIAL GROUP, INC.

September 30, 2008 Form 10-Q

Table of
Contents



|                  |  |                                                                                       |  |     
|----------------- |  | ------------------------------------------------------------------------------------- |  | ----
|PART I           
|                  |  |                                                                                       |  | Page
|Item 1:           |  | Financial Statements                                                                  |  |     
|                  |  | Condensed Consolidated Balance Sheets                                                 |  | 3   
|                  |  | Condensed Consolidated Statements of Income                                           |  | 4   
|                  |  | Condensed Consolidated Statements of Cash Flows                                       |  | 5   
|                  |  | Notes to Condensed Consolidated Financial Statements                                  |  |     
|                  |  | Report of Independent Registered Public Accounting Firm                               |  | 11  
|Item 2:           |  | Managements Discussion and Analysis of Financial Condition and Results of Operations |  | 12  
|Item 3:           |  | Quantitative and Qualitative Disclosures about Market Risk                            |  | 18  
|Item 4:           |  | Controls and Procedures                                                               |  | 19  
|                  |  |                                                                                      
|                  |  | Part II                                                                               |  |     
|Item 1:           |  | Legal Proceedings                                                                     |  | 20  
|Item 1A:          |  | Risk Factors                                                                          |  | 20  
|Item 2:           |  | Unregistered Sales of Equity Securities and Use of Proceeds                           |  | 21  
|Item 3:           |  | Defaults Upon Senior Securities                                                       |  | 21  
|Item 4:           |  | Submission of Matters to a Vote of Security Holders                                   |  | 21  
|Item 5:           |  | Other Information                                                                     |  | 21  
|Item 6:           |  | Exhibits and Reports on Form 8-K                                                      |  | 21  
|                  | 
|Signatures        |  | 22                                                                                   
|                  | 
|Index to Exhibits |  | 23                                                                                   



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NB&T Financial Group, Inc.

Condensed Consolidated Balance Sheets



|                                                                                   |  |                   |         |   |                  |   |         |  
|---------------------------------------------------------------------------------- |  | ----------------- | ------- | - | ---------------- | - | ------- | -
|(Dollars in thousands)                                                             |  | September 30,2008 |         |   | December 31,2007 |  
|                                                                                   |  | (Unaudited)       |         |   |                  |  
|Assets                                                                             |  |                   |         |   |                  |   |         |  
|Cash and due from banks                                                            |  | $                 | 8,510   |   |                  | $ | 12,707  |  
|Interest-bearing deposits                                                          |  |                   | 17,533  |   |                  |   | 10,699  |  
|Federal funds sold                                                                 |  |                   | 7,754   |   |                  |   | 2,749   |  
|                                                                                   |  |                   |         |   |                  |   |         |  
|Cash and cash equivalents                                                          |  |                   | 33,797  |   |                  |   | 26,155  |  
|                                                                                   |  |                   |         |   |                  |   |         |  
|Interest-bearing time deposits                                                     |  |                   | 5,000   |   |                  |   |        |  
|Securities - available-for-sale                                                    |  |                   | 87,803  |   |                  |   | 89,275  |  
|Loans held for sale                                                                |  |                   | 245     |   |                  |   | 1,503   |  
|Loans, net of allowance for loan losses of $3,563 and $3,594                       |  |                   | 347,741 |   |                  |   | 354,169 |  
|                                                                                   |  |                   |         |   |                  |   |         |  
|Total loans                                                                        |  |                   | 347,986 |   |                  |   | 355,672 |  
|Premises and equipment                                                             |  |                   | 16,607  |   |                  |   | 15,453  |  
|Federal Reserve and Federal Home Loan Bank stock                                   |  |                   | 9,363   |   |                  |   | 9,023   |  
|Earned income receivable                                                           |  |                   | 3,069   |   |                  |   | 3,288   |  
|Goodwill and other intangibles                                                     |  |                   | 4,761   |   |                  |   | 4,930   |  
|Bank-owned life insurance                                                          |  |                   | 13,937  |   |                  |   | 13,564  |  
|Other assets                                                                       |  |                   | 2,411   |   |                  |   | 1,562   |  
|                                                                                   |  |                   |         |   |                  |   |         |  
|Total assets                                                                       |  | $                 | 524,734 |   |                  | $ | 518,922 |  
|                                                                                   |  |                   |         |   |                  |   |         |  
|Liabilities and Stockholders Equity                                               |  |                   |         |   |                  |   |         |  
|                                                                                   |  |                  
|Liabilities                                                                        |  |                   |         |   |                  |   |         |  
|Deposits                                                                           |  |                   |         |   |                  |   |         |  
|Demand                                                                             |  | $                 | 65,458  |   |                  | $ | 59,804  |  
|Savings, NOW and Money Market                                                      |  |                   | 187,771 |   |                  |   | 192,295 |  
|Time                                                                               |  |                   | 168,471 |   |                  |   | 168,155 |  
|                                                                                   |  |                   |         |   |                  |   |         |  
|Total deposits                                                                     |  |                   | 421,700 |   |                  |   | 420,254 |  
|                                                                                   |  |                   |         |   |                  |   |         |  
|Short-term borrowings                                                              |  |                   | 1,226   |   |                  |   | 722     |  
|Long-term debt                                                                     |  |                   | 39,810  |   |                  |   | 34,810  |  
|Interest payable and other liabilities                                             |  |                   | 3,729   |   |                  |   | 4,253   |  
|                                                                                   |  |                   |         |   |                  |   |         |  
|Total liabilities                                                                  |  |                   | 466,465 |   |                  |   | 460,039 |  
|                                                                                   |  |                   |         |   |                  |   |         |  
|Commitments and Contingencies                                                      |  |                   |         |   |                  |   |         |  
|                                                                                   |  |                  
|Stockholders Equity                                                               |  |                   |         |   |                  |   |         |  
|Preferred stock, no par value, authorized 100,000 shares; none issued              |  |                   |         |   |                  |   |         |  
|Common stock, no par value; authorized 6,000,000 shares; issued  3,818,950 shares |  |                   | 1,000   |   |                  |   | 1,000   |  
|Additional paid-in capital                                                         |  |                   | 10,392  |   |                  |   | 10,380  |  
|Retained earnings                                                                  |  |                   | 54,989  |   |                  |   | 54,810  |  
|Unearned employee stock ownership plan (ESOP) shares                               |  |                   | (600    | ) |                  |   | (749    | )
|Accumulated other comprehensive income                                             |  |                   | (189    | ) |                  |   | 658     |  
|Treasury stock; 650,074 shares - 2008 and 640,638 shares - 2007                    |  |                   | (7,323  | ) |                  |   | (7,216  | )
|                                                                                   |  |                   |         |   |                  |   |         |  
|Total stockholders equity                                                         |  |                   | 58,269  |   |                  |   | 58,883  |  
|                                                                                   |  |                   |         |   |                  |   |         |  
|Total liabilities and stockholders equity                                         |  | $                 | 524,734 |   |                  | $ | 518,922 |  
|                                                                                   |  |                   |         |   |                  |   |         |  

See Notes to Condensed Consolidated Financial Statements



3



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NB&T Financial Group, Inc.

Condensed Consolidated Statements of Income



|                                                              |  |                                 |       |                                |   |       |  |      |        |  |   |       
|------------------------------------------------------------- |  | ------------------------------- | ----- | ------------------------------ | - | ----- |  | ---- | ------ |  | - | ------
|                                                              |  | Three Months EndedSeptember 30, |       | Nine Months EndedSeptember 30,
|(Dollars in thousands, except per share amounts)              |  | 2008                            |       | 2007                           |   | 2008  |  | 2007
|                                                              |  | (Unaudited)                     |       | (Unaudited)                   
|Interest and Dividend Income                                  |  |                                 |       |                                |   |       |  |      |        |  |   |       
|Loans                                                         |  | $                               | 5,656 |                                | $ | 6,825 |  | $    | 17,260 |  | $ | 21,147
|Securities-taxable                                            |  |                                 | 760   |                                |   | 585   |  |      | 2,319  |  |   | 1,449 
|Securities-tax-exempt                                         |  |                                 | 348   |                                |   | 429   |  |      | 1,107  |  |   | 1,286 
|Federal funds sold and other                                  |  |                                 | 223   |                                |   | 240   |  |      | 762    |  |   | 554   
|Dividends on Federal Home Loan and Federal Reserve Bank stock |  |                                 | 126   |                                |   | 147   |  |      | 370    |  |   | 433   
|                                                              |  |                                 |       |                                |   |       |  |      |        |  |   |       
|Total interest and dividend income                            |  |                                 | 7,113 |                                |   | 8,226 |  |      | 21,818 |  |   | 24,869
|                                                              |  |                                 |       |                                |   |       |  |      |        |  |   |       
|Interest Expense                                              |  |                                 |       |                                |   |       |  |      |        |  |   |       
|Deposits                                                      |  |                                 | 1,889 |                                |   | 3,146 |  |      | 6,551  |  |   | 9,390 
|Short-term borrowings                                         |  |                                 | 2     |                                |   | 7     |  |      | 9      |  |   | 34    
|Long-term debt                                                |  |                                 | 520   |                                |   | 487   |  |      | 1,546  |  |   | 1,527 
|                                                              |  |                                 |       |                                |   |       |  |      |        |  |   |       
|Total interest expense                                        |  |                                 | 2,411 |                                |   | 3,640 |  |      | 8,106  |  |   | 10,951
|                                                              |  |                                 |       |                                |   |       |  |      |        |  |   |       
|Net Interest Income                                           |  |                                 | 4,702 |                                |   | 4,586 |  |      | 13,712 |  |   | 13,918
|Provision for Loan Losses                                     |  |                                 | 105   |                                |   | 30    |  |      | 295    |  |   | 180   
|                                                              |  |                                 |       |                                |   |       |  |      |        |  |   |       
|Net Interest Income After Provision for Loan Losses           |  |                                 | 4,597 |                                |   | 4,556 |  |      | 13,417 |  |   | 13,738
|                                                              |  |                                 |       |                                |   |       |  |      |        |  |   |       
|Non-interest Income                                           |  |                                 |       |                                |   |       |  |      |        |  |   |       
|Trust income                                                  |  |                                 | 223   |                                |   | 235   |  |      | 708    |  |   | 701   
|Service charges and fees                                      |  |                                 | 905   |                                |   | 864   |  |      | 2,570  |  |   | 2,456 
|Insurance agency commissions                                  |  |                                 | 433   |                                |   | 524   |  |      | 1,773  |  |   | 1,853 
|Net gains on sales of securities                              |  |                                 | 4     |                                |   |      |  |      | 15     |  |   |      
|Other                                                         |  |                                 | 482   |                                |   | 397   |  |      | 1,305  |  |   | 1,189 
|                                                              |  |                                 |       |                                |   |       |  |      |        |  |   |       
|Total non-interest income                                     |  |                                 | 2,047 |                                |   | 2,020 |  |      | 6,371  |  |   | 6,199 
|                                                              |  |                                 |       |                                |   |       |  |      |        |  |   |       
|Non-interest Expense                                          |  |                                 |       |                                |   |       |  |      |        |  |   |       
|Salaries and employee benefits                                |  |                                 | 2,977 |                                |   | 2,866 |  |      | 9,042  |  |   | 8,631 
|Net occupancy expense                                         |  |                                 | 488   |                                |   | 400   |  |      | 1,496  |  |   | 1,260 
|Equipment and data processing expense                         |  |                                 | 713   |                                |   | 684   |  |      | 2,105  |  |   | 1,923 
|Professional fees                                             |  |                                 | 286   |                                |   | 449   |  |      | 959    |  |   | 1,175 
|Marketing expense                                             |  |                                 | 138   |                                |   | 151   |  |      | 366    |  |   | 427   
|State franchise tax                                           |  |                                 | 198   |                                |   | 189   |  |      | 588    |  |   | 563   
|Amortization of intangibles                                   |  |                                 | 56    |                                |   | 90    |  |      | 169    |  |   | 384   
|Other                                                         |  |                                 | 540   |                                |   | 495   |  |      | 1,548  |  |   | 1,550 
|                                                              |  |                                 |       |                                |   |       |  |      |        |  |   |       
|Total non-interest expense                                    |  |                                 | 5,396 |                                |   | 5,324 |  |      | 16,273 |  |   | 15,913
|                                                              |  |                                 |       |                                |   |       |  |      |        |  |   |       
|Income Before Income Tax                                      |  |                                 | 1,248 |                                |   | 1,252 |  |      | 3,515  |  |   | 4,024 
|Provision for Income Taxes                                    |  |                                 | 226   |                                |   | 223   |  |      | 612    |  |   | 742   
|                                                              |  |                                 |       |                                |   |       |  |      |        |  |   |       
|Net Income                                                    |  | $                               | 1,022 |                                | $ | 1,029 |  | $    | 2,903  |  | $ | 3,282 
|                                                              |  |                                 |       |                                |   |       |  |      |        |  |   |       
|Basic Earnings Per Share                                      |  | $                               | .33   |                                | $ | .32   |  | $    | .93    |  | $ | 1.03  
|                                                              |  |                                 |       |                                |   |       |  |      |        |  |   |       
|Diluted Earnings Per Share                                    |  | $                               | .33   |                                | $ | .32   |  | $    | .93    |  | $ | 1.03  
|                                                              |  |                                 |       |                                |   |       |  |      |        |  |   |       
|Dividends Declared Per Share                                  |  | $                               | .29   |                                | $ | .28   |  | $    | .87    |  | $ | .84   
|                                                              |  |                                 |       |                                |   |       |  |      |        |  |   |       

See Notes to Condensed Consolidated Financial Statements



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NB&T Financial Group, Inc.

Condensed Consolidated Statements of Cash Flows



|                                                          |  |                                |         |   |      |   |         |  
|--------------------------------------------------------- |  | ------------------------------ | ------- | - | ---- | - | ------- | -
|                                                          |  | Nine Months Ended,September 30 |        
|(Dollars in thousands)                                    |  | 2008                           |         |   | 2007 |  
|                                                          |  | (Unaudited)                    |        
|Operating Activities                                      |  |                                |         |  
|Net income                                                |  | $                              | 2,903   |   |      | $ | 3,282   |  
|Items not requiring (providing) cash                      |  |                                |         |   |      |   |         |  
|Depreciation and amortization                             |  |                                | 1,310   |   |      |   | 1,404   |  
|Provision for loan losses                                 |  |                                | 295     |   |      |   | 180     |  
|Amortization of premiums and discounts on securities      |  |                                | (234    | ) |      |   | 86      |  
|Gain on sale of securities                                |  |                                | (15     | ) |      |   |        |  
|FHLB stock dividends                                      |  |                                | (337    | ) |      |   |        |  
|Net change in:                                            |  |                                |         |   |      |   |         |  
|Loans held for sale                                       |  |                                | 1,258   |   |      |   | (501    | )
|Other assets and liabilities                              |  |                                | (852    | ) |      |   | 179     |  
|                                                          |  |                                |         |   |      |   |         |  
|Net cash provided by operating activities                 |  |                                | 4,328   |   |      |   | 4,630   |  
|                                                          |  |                                |         |   |      |   |         |  
|Investing Activities                                      |  |                                |         |   |      |   |         |  
|Purchases of available-for-sale securities                |  |                                | (22,967 | ) |      |   | (28,820 | )
|Proceeds from maturities of available-for-sale securities |  |                                | 23,403  |   |      |   | 25,335  |  
|Net change in interest-bearing time deposits              |  |                                | (5,000  | ) |      |   |        |  
|Net change in loans                                       |  |                                | 6,133   |   |      |   | 35,621  |  
|Purchase of premises and equipment                        |  |                                | (2,293  | ) |      |   | (1,932  | )
|                                                          |  |                                |         |   |      |   |         |  
|Net cash provided by (used in) investing activities       |  |                                | (724    | ) |      |   | 30,204  |  
|                                                          |  |                                |         |   |      |   |         |  
|Financing Activities                                      |  |                                |         |   |      |   |         |  
|Net change in:                                            |  |                                |         |   |      |   |         |  
|Deposits                                                  |  |                                | 1,446   |   |      |   | (24,373 | )
|Short-term borrowings                                     |  |                                | 504     |   |      |   | (873    | )
|Proceeds from long-term debt                              |  |                                | 5,000   |   |      |   | 10,310  |  
|Repayment of long-term debt                               |  |                                |        |   |      |   | (12,248 | )
|Purchase of treasury shares                               |  |                                | (188    | ) |      |   | (283    | )
|Proceeds from exercise of stock option                    |  |                                |        |   |      |   | 52      |  
|Cash dividends                                            |  |                                | (2,724  | ) |      |   | (2,670  | )
|                                                          |  |                                |         |   |      |   |         |  
|Net cash provided by (used in) financing activities       |  |                                | 4,038   |   |      |   | (30,085 | )
|                                                          |  |                                |         |   |      |   |         |  
|Increase in Cash and Cash Equivalents                     |  |                                | 7,642   |   |      |   | 4,749   |  
|Cash and Cash Equivalents, Beginning of Year              |  |                                | 26,155  |   |      |   | 18,973  |  
|                                                          |  |                                |         |   |      |   |         |  
|Cash and Cash Equivalents, End of Period                  |  | $                              | 33,797  |   |      | $ | 23,722  |  
|                                                          |  |                                |         |   |      |   |         |  

See Notes to Condensed Consolidated Financial Statements



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Note 1: Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and the instructions to
Form 10-Q. The Form 10-Q does not include all the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements. Only material changes in financial condition and
results of operations are discussed in Managements Discussion and Analysis of Financial Condition and Results of Operations.

The condensed
consolidated balance sheet as of December 31, 2007 has been derived from the audited consolidated balance sheet of that date.

In the opinion of
management, the condensed consolidated financial statements contain all adjustments necessary to present fairly the financial condition of NB&T Financial Group, Inc. (the Company) as of June 30, 2008, and December 31, 2007,
and the results of its operations for the three- and nine-month periods ended September 30, 2008 and 2007 and cash flows for the nine-month periods ended September 30, 2008 and 2007. Those adjustments consist of only normal recurring
adjustments. The results of operations for the interim periods reported herein are not necessarily indicative of results of operation to be expected for the entire year. The unaudited condensed consolidated financial statements should be read in
conjunction with the consolidated financial statements, accounting policies and financial notes thereto included in the Companys Annual Report on Form 10-K for the year ended December 31, 2007 filed with the Commission.

Note 2: Securities

The amortized cost and approximate fair values of
securities are as follows (thousands):



|                                                |  |               |        |                      |   |                       |  |   |                       |   |  |   |       
|----------------------------------------------- |  | ------------- | ------ | -------------------- | - | --------------------- |  | - | --------------------- | - |  | - | ------
|Available-for-Sale Securities:                  |  | AmortizedCost |        | GrossUnrealizedGains |   | GrossUnrealizedLosses |  |   | ApproximateFair Value
|September 30, 2008:                             |  |               |        |                      |   |                       |  |   |                       |   |  |   |       
|U.S. government agencies and sponsored entities |  | $             | 10,569 |                      | $ | 21                    |  | $ | (11                   | ) |  | $ | 10,579
|Mortgage-backed securities                      |  |               | 50,148 |                      |   | 292                   |  |   | (793                  | ) |  |   | 49,647
|State and political subdivisions                |  |               | 27,372 |                      |   | 403                   |  |   | (198                  | ) |  |   | 27,577
|                                                |  |               |        |                      |   |                       |  |   |                       |   |  |   |       
|                                                |  | $             | 88,089 |                      | $ | 716                   |  | $ | (1,002                | ) |  | $ | 87,803
|                                                |  |               |        |                      |   |                       |  |   |                       |   |  |   |       
|December 31, 2007:                              |  |               |        |                      |   |                       |  |   |                       |   |  |   |       
|U.S. government agencies and sponsored entities |  | $             | 14,581 |                      | $ | 36                    |  | $ | (42                   | ) |  | $ | 14,575
|Mortgage-backed securities                      |  |               | 40,970 |                      |   | 401                   |  |   | (78                   | ) |  |   | 41,293
|State and political subdivisions                |  |               | 32,725 |                      |   | 691                   |  |   | (9                    | ) |  |   | 33,407
|                                                |  |               |        |                      |   |                       |  |   |                       |   |  |   |       
|                                                |  | $             | 88,276 |                      | $ | 1,128                 |  | $ | (129                  | ) |  | $ | 89,275
|                                                |  |               |        |                      |   |                       |  |   |                       |   |  |   |       



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Note 3: Loans

Categories of loans include (thousands):



|                                                     |  |                   |         |   |                  |   |         |  
|---------------------------------------------------- |  | ----------------- | ------- | - | ---------------- | - | ------- | -
|                                                     |  | September 30,2008 |         |   | December 31,2007 |  
|Commercial and industrial                            |  | $                 | 57,603  |   |                  | $ | 62,455  |  
|Agricultural                                         |  |                   | 27,268  |   |                  |   | 24,910  |  
|Real estate construction                             |  |                   | 6,062   |   |                  |   | 9,203   |  
|Commercial real estate                               |  |                   | 96,957  |   |                  |   | 95,801  |  
|Residential real estate                              |  |                   | 130,906 |   |                  |   | 124,849 |  
|Consumer                                             |  |                   | 32,577  |   |                  |   | 40,552  |  
|                                                     |  |                   |         |   |                  |   |         |  
|Total loans                                          |  |                   | 351,373 |   |                  |   | 357,770 |  
|Less: Net deferred loan fees, premiums and discounts |  |                   | (69     | ) |                  |   | (7      | )
|Allowance for loan losses                            |  |                   | (3,563  | ) |                  |   | (3,594  | )
|                                                     |  |                   |         |   |                  |   |         |  
|Net loans                                            |  | $                 | 347,741 |   |                  | $ | 354,169 |  
|                                                     |  |                   |         |   |                  |   |         |  

Activity in the allowance for loan losses was as follows (thousands):



|                           |  |                                 |       |   |      |   |        |  
|-------------------------- |  | ------------------------------- | ----- | - | ---- | - | ------ | -
|                           |  | Nine Months Ended September 30, |      
|                           |  | 2008                            |       |   | 2007 |  
|Balance, beginning of year |  | $                               | 3,594 |   |      | $ | 4,762  |  
|Provision for loan losses  |  |                                 | 295   |   |      |   | 180    |  
|Recoveries                 |  |                                 | 253   |   |      |   | 333    |  
|Charge-offs                |  |                                 | (579  | ) |      |   | (1,451 | )
|                           |  |                                 |       |   |      |   |        |  
|Balance, end of period     |  | $                               | 3,563 |   |      | $ | 3,824  |  
|                           |  |                                 |       |   |      |   |        |  

Impaired loans totaled $2,041,000 at September 30, 2008 and $2,046,000 at December 31, 2007. An
allowance for loan losses of $535,000 and $65,000 relates to impaired loans of $1,476,000 and $389,000 at September 30, 2008 and December 31, 2007, respectively. At September 30, 2008 and December 31, 2007, impaired loans of
$565,000 and $1,657,000 had no related allowance for loan losses.

At September 30, 2008 and December 31, 2007, there were $45,000 and $253,000
accruing loans delinquent 90 days or more. Non-accruing loans at September 30, 2008 and December 31, 2007 were $2,990,000 and $1,729,000, respectively.

Note 4: Long Term Debt

Long-term debt consisted of the following components (thousands):



|                                |  |                   |        |                  |   |       
|------------------------------- |  | ----------------- | ------ | ---------------- | - | ------
|                                |  | September 30,2008 |        | December 31,2007
|Federal Home Loan Bank Advances |  | $                 | 29,500 |                  | $ | 24,500
|Junior subordinated debentures  |  |                   | 10,310 |                  |   | 10,310
|                                |  |                   |        |                  |   |       
|Total                           |  | $                 | 39,810 |                  | $ | 34,810
|                                |  |                   |        |                  |   |       

On June 25, 2007, NB&T Statutory Trust III (Trust III), a wholly owned subsidiary of the
Company, closed a pooled private offering of 10,000 Capital Securities with a liquidation amount of $1,000 per security. The proceeds of the offering were loaned to the Company in exchange for junior subordinated debentures with terms similar to the
Capital Securities. The



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##### Table of Contents

sole assets of Trust III are the junior subordinated debentures of the Company and payments thereunder. The junior subordinated debentures and the back-up
obligations, in the aggregate, constitute a full and unconditional guarantee by the Company of the obligations of Trust III under the Capital Securities. Distributions on the Capital Securities are payable quarterly at a fixed interest rate of
7.071% through September 6, 2012 and thereafter at the annual rate of 1.50% over the 3 month LIBOR. Distributions on the Capital Securities are included in interest expense in the consolidated financial statements. These securities are
considered Tier I capital (with certain limitations applicable) under current regulatory guidelines.

The junior subordinated debentures are subject to
mandatory redemption, in whole or in part, upon repayment of the Capital Securities at maturity or their earlier redemption at the liquidation amount. Subject to the Company having received prior approval of the Federal Reserve, if then required,
the Capital Securities are redeemable prior to the maturity date of September 6, 2037, at the option of the Company. On or after September 6, 2012, the Capital Securities are redeemable at par. Upon occurrence of specific events defined
within the trust indenture, the Capital Securities may also be redeemed prior to September 6, 2012 at a premium. The Company has the option to defer distributions on the Capital Securities from time to time for a period not to exceed 20
consecutive semi-annual periods.

As of September 30, 2008 and December 31, 2007, the outstanding principal balance of the Capital Securities was
$10,000,000. In accordance with the provisions in FIN 46, the Company accounts for its investment in the trust as assets, its subordinated debentures as debt, and the interest paid thereon as interest expense.

Note 5: Commitments

Outstanding commitments to extend credit as of
September 30, 2008 totaled $46,302,000. Standby letters of credit as of September 30, 2008 totaled $4,075,000.

Note 6: Earnings Per Share

The factors used in the earnings per share computation were as follows (thousands, except share and per share amounts):



|                                                     |  |                                 |           |                                |   |           |  |      |           |  |   |          
|---------------------------------------------------- |  | ------------------------------- | --------- | ------------------------------ | - | --------- |  | ---- | --------- |  | - | ---------
|                                                     |  | Three Months EndedSeptember 30, |           | Nine Months EndedSeptember 30,
|                                                     |  | 2008                            |           | 2007                           |   | 2008      |  | 2007
|Numerator:                                           |  |                                 |           |                                |   |           |  |      |           |  |   |          
|Net income                                           |  | $                               | 1,022     |                                | $ | 1,029     |  | $    | 2,903     |  | $ | 3,282    
|                                                     |  |                                 |           |                                |   |           |  |      |           |  |   |          
|Denominator:                                         |  |                                 |           |                                |   |           |  |      |           |  |   |          
|Weighted-average common shares outstanding (basic)   |  |                                 | 3,138,270 |                                |   | 3,182,143 |  |      | 3,140,577 |  |   | 3,187,545
|Effect of stock options                              |  |                                 |          |                                |   | 1,537     |  |      | 413       |  |   | 834      
|                                                     |  |                                 |           |                                |   |           |  |      |           |  |   |          
|Weighted-average common shares outstanding (diluted) |  |                                 | 3,138,270 |                                |   | 3,183,680 |  |      | 3,140,990 |  |   | 3,188,379
|                                                     |  |                                 |           |                                |   |           |  |      |           |  |   |          
|Earnings per share:                                  |  |                                 |           |                                |   |           |  |      |           |  |   |          
|Basic                                                |  | $                               | .33       |                                | $ | .32       |  | $    | .93       |  | $ | 1.03     
|                                                     |  |                                 |           |                                |   |           |  |      |           |  |   |          
|Diluted                                              |  | $                               | .33       |                                | $ | .32       |  | $    | .93       |  | $ | 1.03     
|                                                     |  |                                 |           |                                |   |           |  |      |           |  |   |          

Options to purchase 224,500 shares of common stock were outstanding at September 30, 2008, but not included
in the computation of diluted EPS because the options exercise price was greater than the average market price of the common shares. Options to purchase 181,000 shares of common stock were outstanding at September 30, 2007, but not
included in the computation of diluted EPS because the options exercise price was greater than the average market price of the common shares.



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##### Table of Contents

Note 7: Comprehensive Income

Total comprehensive income was as follows (thousands):



|                                  |  |                                 |       |                                |      |   |       |  |   |       |   |  |   |      
|--------------------------------- |  | ------------------------------- | ----- | ------------------------------ | ---- | - | ----- |  | - | ----- | - |  | - | -----
|                                  |  | Three Months EndedSeptember 30, |       | Nine Months EndedSeptember 30,
|                                  |  | 2008                            |       |                                | 2007 |   | 2008  |  |   | 2007 
|Net Income                        |  | $                               | 1,022 |                                |      | $ | 1,029 |  | $ | 2,903 |   |  | $ | 3,282
|Other Comprehensive Income (Loss) |  | $                               | (486  | )                              |      | $ | 452   |  | $ | (847  | ) |  | $ | 272  
|                                  |  |                                 |       |                                |      |   |       |  |   |       |   |  |   |      
|Total Comprehensive Income        |  | $                               | 536   |                                |      | $ | 1,481 |  | $ | 2,056 |   |  | $ | 3,554
|                                  |  |                                 |       |                                |      |   |       |  |   |       |   |  |   |      

Note 8: Accounting for Uncertainty in Income Taxes

The Company or one of its subsidiaries files income tax returns in the U.S. federal and Ohio jurisdictions. With few exceptions, the Company is no longer subject to U.S.
federal, state and local examinations by tax authorities for years before 2005.

Financial Accounting Standards Board (FASB) Interpretation
No. 48 (FIN 48), Accounting for Uncertainty in Income Taxesan interpretation of FASB Statement No. 109, prescribes a recognition threshold and measurement attribute for the financial statement recognition and
measurement of a tax position taken or expected to be taken in a tax return. FIN 48 also provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. As of September 30,
2008, the Company did not identify any uncertain tax positions that it believes should be recognized in the financial statements.

Note 9: Fair
Value of Assets and Liabilities

Effective January 1, 2008, the Company adopted Statement of Financial Accounting Standards No. 157, Fair
Value Measurements (FAS 157). FAS 157 define fair value, establishes a framework for measuring fair value and expands disclosures about fair value measurements. FAS 157 has been applied prospectively as of the beginning of the period.

FAS 157 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market
participants at the measurement date. FAS 157 also establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The standard describes
three levels of inputs that may be used to measure fair value:



|        |  |                                                                                                                                                                                                                                                                                                             
|------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Level 1 |  | Quoted prices in active markets for identical assets or liabilities                                                                                                                                                                                                                                         
|        | 
|Level 2 |  | Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; quoted prices in active markets that are not active; or other inputs that are observable
or can be corroborated by observable market data for substantially the full term of the assets or liabilities
|        | 
|Level 3 |  | Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities                                                                                                                                                              

Available-for-Sale Securities

The fair value of available-for-sale securities are determined by various valuation methodologies. Level 2 securities include U.S. government agencies, mortgage-backed securities, and obligations of political and
state subdivisions. Level 2 inputs do not include quoted prices for individual securities in active markets; however, they do include inputs that are either directly or indirectly observable for the individual security being valued. Such observable
inputs include interest rates and yield curves



9



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##### Table of Contents

at commonly quoted intervals, volatilities, prepayment speeds, credit risks and default rates. Also included are inputs derived principally from or
corroborated by observable market data by correlation or other means.

The following table presents the fair value measurements of assets and liabilities
measured at fair value on a recurring basis and the level within the FAS 157 fair value hierarchy in which the fair value measurements fall at September 30, 2008:



|                              |  |           |        |                                                             |   |                                             |  |                                         |        |  |   |  
|----------------------------- |  | --------- | ------ | ----------------------------------------------------------- | - | ------------------------------------------- |  | --------------------------------------- | ------ |  | - | -
|                              |  |           |        | Fair Value Measurements at Reporting Date Using            
|Description                   |  | FairValue |        | Quoted Prices inActive Markets forIdentical Assets(Level 1) |   | Significant OtherObservable Inputs(Level 2) |  | SignificantUnobservable Inputs(Level 3)
|Available-for-sale securities |  | $         | 87,803 |                                                             | $ |                                            |  | $                                       | 87,803 |  | $ | 

The following table presents the fair value measurements of assets and liabilities measured at fair value on a
nonrecurring basis and the level within the FAS 157 fair value hierarchy in which the fair value measurements fall at September 30, 2008:



|               |  |           |     |                                                             |   |                                             |  |                                         |   |  |   |    
|-------------- |  | --------- | --- | ----------------------------------------------------------- | - | ------------------------------------------- |  | --------------------------------------- | - |  | - | ---
|               |  |           |     | Fair Value Measurements at Reporting Date Using            
|Description    |  | FairValue |     | Quoted Prices inActive Markets forIdentical Assets(Level 1) |   | Significant OtherObservable Inputs(Level 2) |  | SignificantUnobservable Inputs(Level
3)
|Impaired loans |  | $         | 941 |                                                             | $ |                                            |  | $                                       |  |  | $ | 941



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##### Table of Contents

Report of Independent Registered Public Accounting Firm

Audit Committee, Board of Directors and Stockholders

NB&T Financial
Group, Inc.

Wilmington, Ohio

We have reviewed the
accompanying condensed consolidated balance sheet of NB&T Financial Group, Inc. as of September 30, 2008 and the related condensed consolidated statements of income for the three-month and nine-month periods ended September 30, 2008
and 2007 and cash flows for the nine-month periods ended September 30, 2008 and 2007. These interim financial statements are the responsibility of the Companys management.

We conducted our reviews in accordance with the standards of the Public Company Accounting Oversight Board (United States). A review of interim financial information consists principally of applying analytical
procedures to financial data and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with the standards of the Public Company Accounting Oversight
Board, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion.

Based on our reviews, we are not aware of any material modifications that should be made to the condensed consolidated financial statements referred to above for them to be in conformity with accounting principles generally accepted in the
United States of America.

We have previously audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States),
the consolidated balance sheet as of December 31, 2007 and the related consolidated statements of income, stockholders equity and cash flows for the year then ended (not presented herein); and in our report dated February 15, 2008,
we expressed an unqualified opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying condensed consolidated balance sheet as of December 31, 2008 is fairly stated, in all material
respects, in relation to the consolidated balance sheet from which it has been derived.

/s/ BKD, LLP

Cincinnati, Ohio

November 3, 2008



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##### Table of Contents

Item 2  Managements Discussion and Analysis of Financial Condition and
Results of Operations

Results of Operations

Net
income for the third quarter of 2008 was $1.0 million, or $.33 per diluted share, compared to $1.0 million, or $.32 per diluted share, for the same quarter last year. Net income for the first nine months of 2008 was $2.9 million, or $.93 per diluted
share, compared to $3.3 million, or $1.03 per diluted share, for the first nine months of 2007. Last years net income included $324,000 of paid interest on non-accrual loans returned to accrual status in June 2007. Nonaccrual loans have
decreased from $3.3 million at September 30, 2007 to just under $3.0 million at September 30, 2008. The Bank also opened three new branches in 2008, increasing expenses approximately $580,000 over last year. The Bank is taking advantage of
its well-capitalized position to expand into contiguous markets.

Net Interest Income

Net interest income was $4.7 million for the third quarter of 2008, an increase of $116,000 compared to the third quarter of 2007. Net interest margin increased to 3.91% for the third quarter of 2008 from 3.70% for
the third quarter of 2007. For the first nine months of 2008, net interest income was $13.7 million, compared to $13.9 million for the same period last year. The primary reason for the decrease is net income for the nine months ended
September 30, 2007 included $324,000 of paid interest on non-accrual loans returned to accrual status. Average interest-earning assets decreased approximately 3.0% to $477.0 million during the third quarter of 2008 compared to the third quarter
of 2007 and interest income decreased $1.1 million. As a result, the average yield on earning assets decreased from 6.64% for the third quarter of 2007 to 5.92% for the third quarter of 2008. Offsetting the decrease in interest income, interest
expense decreased $1.2 million to $2.4 million during the third quarter of 2008 from $3.6 million for the same quarter last year. Average interest-bearing liabilities decreased 4.0% from last year to $403.3 million, and their cost decreased to 2.37%
during the third quarter of 2008 from 3.44% for the same quarter last year.

Provision for Loan Losses

The provision for loan losses was $105,000 in the third quarter of 2008 and $30,000 in the third quarter of 2007. Net charge-offs were $77,000, or 0.09% of total average
loans, in the third quarter of 2008, compared to $198,000, or 0.21% of total average loans, in the third quarter of 2007. Net charge-offs for the first nine months of 2008 were down to $326,000 from $1.1 million for the first nine months of 2007.
Non-performing loans totaled $3.0 million at September 30, 2008, compared to $3.4 million at September 30, 2007. In addition, other real estate owned declined to $289,000 at September 30, 2008 from $754,000 at September 30, 2007.
The allowance for loan losses to total loans was 1.01% at September 30, 2008, compared to 1.02% at September 30, 2007.

Non-interest Income

Total non-interest income was $2.0 million for the third quarters of 2008 and 2007. Total non-interest income was $6.4 million for the first nine
months of 2008, compared to $6.2 million for the first nine months of 2007. The increase is largely due to increased deposit service fees and a gain of approximately $135,000 on the liquidation of a long-term investment held by the Banks
insurance agency subsidiary.

Non-interest Expense

Total non-interest expense was $5.4 million for the third quarter of 2008, compared to $5.3 million for the third quarter of 2007. Non-interest expense was $16.3 million for the first nine months of 2008, compared to $15.9 million for the
first nine months of 2007. The increase in non-interest expense is largely due to approximately $580,000 in increased personnel and occupancy costs associated with opening three new branches in 2008.

Recently, the Federal Deposit Insurance Corporation (FDIC) has increased insurance limits to $250,000 per depositor with unlimited insurance for non-interest-bearing
demand deposits until December 31, 2009. As a result of these increased insurance limits, the Companys FDIC insurance premiums are expected to increase approximately $40,000 in the fourth quarter of 2008, after application of available
credits, and in 2009, the Companys FDIC insurance premiums are expected to increase approximately $500,000.



12



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##### Table of Contents

Income Taxes

The
provision for income taxes for the third quarter of 2008 was $226,000, or 18.1%, compared to $223,000, or 17.8%, for the third quarter of 2007.

Financial Condition

The changes that have occurred in the Companys financial condition during 2008 are as follows (in thousands):



|                                 |  |                   |         |                  |   |             |         |   |        |   |  |       |  
|-------------------------------- |  | ----------------- | ------- | ---------------- | - | ----------- | ------- | - | ------ | - |  | ----- | -
|                                 |  | September 30,2008 |         | December 31,2007 |   | 2008 Change |        
|                                 |  |                   |         | Amount           |   |             | Percent |  
|Total assets                     |  | $                 | 524,734 |                  | $ | 518,922     |         | $ | 5,812  |   |  | 1.1   |  
|Interest-bearing demand deposits |  |                   | 17,533  |                  |   | 10,699      |         |   | 6,834  |   |  | 63.9  |  
|Federal funds sold               |  |                   | 7,754   |                  |   | 2,749       |         |   | 5,005  |   |  | 182.1 |  
|Interest-bearing time deposits   |  |                   | 5,000   |                  |   |            |         |   | 5,000  |   |  | NM    |  
|Loans, net*                      |  |                   | 347,986 |                  |   | 355,672     |         |   | (7,686 | ) |  | (2.2  | )
|Securities                       |  |                   | 87,803  |                  |   | 89,275      |         |   | (1,472 | ) |  | (1.7  | )
|Demand deposits                  |  |                   | 65,458  |                  |   | 59,804      |         |   | 5,654  |   |  | 9.5   |  
|Savings, NOW, MMDA deposits      |  |                   | 187,771 |                  |   | 192,295     |         |   | (4,524 | ) |  | (2.4  | )
|CDs $100,000 and over           |  |                   | 33,398  |                  |   | 30,191      |         |   | 3,207  |   |  | 10.6  |  
|Other time deposits              |  |                   | 135,073 |                  |   | 137,964     |         |   | (2,891 | ) |  | (2.1  | )
|Total deposits                   |  |                   | 421,700 |                  |   | 420,254     |         |   | 1,446  |   |  | .3    |  
|Short-term borrowing             |  |                   | 1,226   |                  |   | 722         |         |   | 504    |   |  | 69.8  |  
|Long-term borrowing              |  |                   | 39,810  |                  |   | 34,810      |         |   | 5,000  |   |  | 14.4  |  
|Stockholders equity             |  |                   | 58,269  |                  |   | 58,883      |         |   | (614   | ) |  | (1.0  | )



|* | Includes loans held for sale
|- | ----------------------------

At September 30, 2008, total assets
were $524.7 million, an increase of $5.8 million from December 31, 2007. The increase is primarily attributable to increases in deposits and long-term borrowings. Total deposit liabilities increased $1.4 million in 2008, with most of the
increase in checking accounts and large certificates of deposit. Long-term borrowings increased $5.0 million due to a leverage transaction where the funds were borrowed at 2.82% for a year and reinvested in FDIC-insured certificates of deposit at
4.3% for the same term. The additional deposits and the decrease in the loan portfolio were reinvested primarily in interest-bearing demand and time deposits which increased $11.8 million. The loan portfolio decreased $7.7 million due to continued
runoff of indirect loans and reductions in the real estate construction and commercial loan portfolios. Stockholders equity decreased $614,000 in the first nine months of 2008 to $58.3 million primarily due to decreases in the market value of
the securities portfolio.

Average total assets decreased 2.2% to $523.5 million from the third quarter of 2007. Average total gross loans decreased to
$346.0 million, a decline of 9.1% from the same quarter last year. Due to the decline in loan volume and the leverage transaction, excess funds have been invested in securities, which have increased $6.9 million on average, and interest-bearing
deposits and federal funds sold, which have increased $13.0 million on average, from the same quarter last year. The Companys investment portfolio has no exposure to Fannie Mae or Freddie Mac preferred stock.

Average total deposit liabilities declined $17.3 million for the third quarter of 2008 to $421.0 million, compared to an average of $438.3 million for the same quarter
last year. This decrease is primarily due to less money market and certificate of deposit balances, resulting from the Companys efforts to controls its cost of funds. Average long-term borrowings increased $5.0 million due to the leverage
transaction in the first quarter of 2008.



13



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##### Table of Contents

Allowance for Loan Losses

The following table is a summary of the Companys loan loss experience for the periods ended September 30, 2008 and 2007 (dollars in thousands):



|                               |  |                                |       |   |                               |   |       |      |  |   |       |   |  |   |        |  
|------------------------------ |  | ------------------------------ | ----- | - | ----------------------------- | - | ----- | ---- |  | - | ----- | - |  | - | ------ | -
|                               |  | Three Months EndedSeptember 30 |       |   | Nine Months EndedSeptember 30 |  
|                               |  | 2008                           |       |   | 2007                          |   |       | 2008 |  |   | 2007  |  
|Balance at beginning of period |  | $                              | 3,534 |   |                               | $ | 3,993 |      |  | $ | 3,594 |   |  | $ | 4,762  |  
|                               |  |                                |       |  
|Charge-offs:                   |  |                                |       |   |                               |   |       |      |  |   |       |   |  |   |        |  
|Commercial and industrial      |  |                                | (33   | ) |                               |   | (12   | )    |  |   | (54   | ) |  |   | (100   | )
|Commercial real estate         |  |                                |      |   |                               |   | (34   | )    |  |   | (74   | ) |  |   | (741   | )
|Agricultural                   |  |                                |      |   |                               |   |      |      |  |   |      |   |  |   |       |  
|Residential real estate        |  |                                | (17   | ) |                               |   | (32   | )    |  |   | (85   | ) |  |   | (100   | )
|Consumer                       |  |                                | (107  | ) |                               |   | (226  | )    |  |   | (366  | ) |  |   | (510   | )
|                               |  |                                |       |   |                               |   |       |      |  |   |       |   |  |   |        |  
|Total charge-offs              |  |                                | (158  | ) |                               |   | (304  | )    |  |   | (579  | ) |  |   | (1,451 | )
|                               |  |                                |       |   |                               |   |       |      |  |   |       |   |  |   |        |  
|Recoveries:                    |  |                                |       |   |                               |   |       |      |  |   |       |   |  |   |        |  
|Commercial and industrial      |  |                                | 3     |   |                               |   | 12    |      |  |   | 17    |   |  |   | 36     |  
|Commercial real estate         |  |                                | 41    |   |                               |   | 25    |      |  |   | 49    |   |  |   | 75     |  
|Agricultural                   |  |                                | 6     |   |                               |   | 3     |      |  |   | 30    |   |  |   | 10     |  
|Residential real estate        |  |                                |      |   |                               |   | 1     |      |  |   | 31    |   |  |   | 53     |  
|Consumer                       |  |                                | 31    |   |                               |   | 64    |      |  |   | 126   |   |  |   | 159    |  
|                               |  |                                |       |   |                               |   |       |      |  |   |       |   |  |   |        |  
|Total recoveries               |  |                                | 81    |   |                               |   | 105   |      |  |   | 253   |   |  |   | 333    |  
|                               |  |                                |       |   |                               |   |       |      |  |   |       |   |  |   |        |  
|Net charge-offs                |  |                                | (76   | ) |                               |   | (199  | )    |  |   | (326  | ) |  |   | (1,118 | )
|Provision for loan losses      |  |                                | 105   |   |                               |   | 30    |      |  |   | 295   |   |  |   | 180    |  
|                               |  |                                |       |   |                               |   |       |      |  |   |       |   |  |   |        |  
|Balance at end of period       |  | $                              | 3,563 |   |                               | $ | 3,824 |      |  | $ | 3,563 |   |  | $ | 3,824  |  
|                               |  |                                |       |   |                               |   |       |      |  |   |       |   |  |   |        |  

The following table sets forth selected information regarding the Companys loan quality at the dates
indicated (in thousands):



|                                                                 |  |                   |       |   |                  |   |       |                   |  |   |       |  
|---------------------------------------------------------------- |  | ----------------- | ----- | - | ---------------- | - | ----- | ----------------- |  | - | ----- | -
|                                                                 |  | September 30,2008 |       |   | December 31,2007 |   |       | September 30,2007 | 
|Loans accounted for on non-accrual basis                         |  | $                 | 2,990 |   |                  | $ | 1,729 |                   |  | $ | 3,342 |  
|Accruing loans which are past due 90 days                        |  |                   | 45    |   |                  |   | 253   |                   |  |   | 92    |  
|Renegotiated loans                                               |  |                   |      |   |                  |   |      |                   |  |   |      |  
|Other real estate owned                                          |  |                   | 289   |   |                  |   | 176   |                   |  |   | 754   |  
|                                                                 |  |                   |       |   |                  |   |       |                   |  |   |       |  
|Total non-performing assets                                      |  | $                 | 3,324 |   |                  | $ | 2,158 |                   |  | $ | 4,188 |  
|                                                                 |  |                   |       |   |                  |   |       |                   |  |   |       |  
|Ratios:                                                          |  |                   |       |   |                  |   |       |                   |  |   |       |  
|Allowance to total loans                                         |  |                   | 1.01  | % |                  |   | 1.00  | %                 |  |   | 1.02  | %
|Net charge-offs to average loans (annualized)                    |  |                   | .13   | % |                  |   | 0.34  | %                 |  |   | 0.38  | %
|Non-performing assets to total loans and other real estate owned |  |                   | .95   | % |                  |   | .60   | %                 |  |   | 1.12  | %



14



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The allowance is maintained to absorb losses in the portfolio. Managements determination of the adequacy of the
reserve is based on reviews of specific loans, loan loss experience, general economic conditions and other pertinent factors. If, as a result of charge-offs or increases in risk characteristics of the loan portfolio, the reserve is below the level
considered by management to be adequate to absorb possible loan losses, the provision for loan losses is increased. Loans deemed not collectible are charged off and deducted from the reserve. Recoveries on loans previously charged off are added to
the reserve.

The Company allocates the allowance for loan losses to specifically classified loans and non-classified loans generally based on the one- and
three-year net charge-off history. In assessing the adequacy of the allowance for loan losses, the Company considers three principal factors: (1) the one- and three-year rolling average charge-off percentage applied to the current outstanding
balance by portfolio type; (2) specific percentages applied to individual loans estimated by management to have a potential loss; and (3) estimated losses attributable to economic conditions. Economic conditions considered include
unemployment levels, the condition of the mortgage and agricultural businesses, and other local economic factors, including an evaluation of collateral values based on housing sales trends in our region. Over the past twelve months, average market
values have decreased within our region, which could result in increased future credit losses.

As of September 30, 2008, there was $2.0 million in 16
non-accrual small business relationships. The majority of this amount consisted of one $1.1 million relationship, secured by a convenience store.

Nonaccrual residential real estate loans totaled $775,000 and consisted of 10 loans with the largest balance being $182,000. Non-accrual consumer loans consisted of 11 loans that totaled $101,000, and home equity credit loans
consisted of seven loans totaling $73,000.

Liquidity and Capital Resources

Effective liquidity management ensures that the cash flow requirements of depositors and borrowers, as well as Company cash needs, are met. The Company manages liquidity on both the asset and liability sides of the
balance sheet. The loan-to-deposit ratio at September 30, 2008 was 83.4%, compared to 86.3% at the same date in 2007. Loans to total assets were 66.3% at the end of the third quarter of 2008, compared to 70.8% at the same time last year. The
Company has $87.8 million in available-for-sale securities that are readily marketable. Approximately 41.2% of the available-for-sale portfolio is pledged to secure public deposits, short-term and long-term borrowings and for other purposes as
required by law. The balance of the available-for-sale securities could be sold if necessary for liquidity purposes. Also, a stable deposit base, consisting of 92.1% core deposits, makes the Company less susceptible to large fluctuations in funding
needs. The Company has short-term borrowing lines of credit with several correspondent banks. The Company also has both short- and long-term borrowing available through the Federal Home Loan Bank of Cincinnati. The Company has the ability to obtain
deposits in the brokered certificate of deposit market to help provide liquidity to fund loan growth.



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Recently, the U.S. Treasury announced its Troubled Asset Relief Capital Purchase Program, which allows financial
institutions approved by Treasury to issue preferred stock to the Treasury Department in exchange for an infusion of capital by the U.S. Government. As demonstrated below, the Companys current capital position is well-above all minimum
regulatory capital requirements. The Company, however, is evaluating whether to participate in the program.

The Federal Reserve Board has adopted
risk-based capital guidelines that assign risk weightings to assets and off-balance sheet items and also define and set minimum capital requirements (risk-based capital ratios). At September 30, 2008 and December 31, 2007, the Company had
the following risk-based capital ratios, which are well above the regulatory minimum requirements:



|                                                   |  |        |        |       |                              |   |        |                                                               |        |  |     |        |  |       |        |  |      |  
|-------------------------------------------------- |  | ------ | ------ | ----- | ---------------------------- | - | ------ | ------------------------------------------------------------- | ------ |  | --- | ------ |  | ----- | ------ |  | ---- | -
|                                                   |  | Actual |        |       | For Capital AdequacyPurposes |   |        | To Be Well CapitalizedUnder PromptCorrective ActionProvisions |       
|                                                   |  | Amount |        | Ratio |                              |   | Amount |                                                               | Ratio  |  |     | Amount |  | Ratio |       
|As of September 30, 2008                           |  |        |        |       |                              |   |        |                                                               |        |  |     |        |  |       |        |  |      |  
|Total Risk-Based Capital (to Risk-Weighted Assets) |  |        |        |       |                              |   |        |                                                               |        |  |     |        |  |       |        |  |      |  
|Consolidated                                       |  | $      | 66,512 |       | 18.13                        | % |        | $                                                             | 29,354 |  | 8.0 | %      |  |       | N/A    |  | N/A  |  
|Bank                                               |  |        | 62,145 |       | 16.97                        |   |        |                                                               | 29,294 |  | 8.0 |        |  | $     | 36,618 |  | 10.0 | %
|                                                   |  |        |        |       |                              |  
|Tier I Capital (to Risk-Weighted Assets)           |  |        |        |       |                              |   |        |                                                               |        |  |     |        |  |       |        |  |      |  
|Consolidated                                       |  |        | 62,949 |       | 17.16                        |   |        |                                                               | 14,677 |  | 4.0 |        |  |       | N/A    |  | N/A  |  
|Bank                                               |  |        | 58,582 |       | 16.00                        |   |        |                                                               | 14,647 |  | 4.0 |        |  |       | 21,971 |  | 6.0  |  
|                                                   |  |        |        |       |                              |  
|Tier I Capital (to Average Assets)                 |  |        |        |       |                              |   |        |                                                               |        |  |     |        |  |       |        |  |      |  
|Consolidated                                       |  |        | 62,949 |       | 12.15                        |   |        |                                                               | 20,707 |  | 4.0 |        |  |       | N/A    |  | N/A  |  
|Bank                                               |  |        | 58,582 |       | 11.32                        |   |        |                                                               | 20,702 |  | 4.0 |        |  |       | 25,877 |  | 5.0  |  
|                                                   |  |        |        |       |                              |  
|As of December 31, 2007                            |  |        |        |       |                              |   |        |                                                               |        |  |     |        |  |       |        |  |      |  
|Total Risk-Based Capital (to Risk-Weighted Assets) |  |        |        |       |                              |   |        |                                                               |        |  |     |        |  |       |        |  |      |  
|Consolidated                                       |  | $      | 66,230 |       | 17.69                        | % |        | $                                                             | 29,953 |  | 8.0 | %      |  |       | N/A    |  | N/A  |  
|Bank                                               |  |        | 58,738 |       | 15.73                        |   |        |                                                               | 29,870 |  | 8.0 |        |  | $     | 37,337 |  | 10.0 | %
|                                                   |  |        |        |       |                              |  
|Tier I Capital (to Risk-Weighted Assets)           |  |        |        |       |                              |   |        |                                                               |        |  |     |        |  |       |        |  |      |  
|Consolidated                                       |  |        | 62,636 |       | 16.73                        |   |        |                                                               | 14,977 |  | 4.0 |        |  |       | N/A    |  | N/A  |  
|Bank                                               |  |        | 55,144 |       | 14.77                        |   |        |                                                               | 14,935 |  | 4.0 |        |  |       | 22,402 |  | 6.0  |  
|                                                   |  |        |        |       |                              |  
|Tier I Capital (to Average Assets)                 |  |        |        |       |                              |   |        |                                                               |        |  |     |        |  |       |        |  |      |  
|Consolidated                                       |  |        | 62,636 |       | 11.96                        |   |        |                                                               | 20,945 |  | 4.0 |        |  |       | N/A    |  | N/A  |  
|Bank                                               |  |        | 55,144 |       | 10.54                        |   |        |                                                               | 20,923 |  | 4.0 |        |  |       | 26,154 |  | 5.0  |  

CRITICAL ACCOUNTING POLICIES

The accounting and reporting policies of the Company are in accordance with accounting principles generally accepted in the United States and conform to general practices within the banking industry. The
Companys significant accounting policies are described in detail in the notes to the Companys consolidated financial statements for the year ended December 31, 2007. The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates and assumptions. The financial position and results of operations can be affected by these estimates and assumptions and are integral to the understanding of reported
results. Critical accounting policies are those policies that



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management believes are the most important to the portrayal of the Companys financial condition and results, and they require management to make
estimates that are difficult, subjective, or complex.

Allowance for Loan Losses- The allowance for loan losses provides coverage for probable
losses inherent in the Companys loan portfolio. Management evaluates the adequacy of the allowance for loan losses each quarter based on changes, if any, in underwriting activities, the loan portfolio composition (including product mix and
geographic, industry or customer-specific concentrations), trends in loan performance, regulatory guidance and economic factors. This evaluation is inherently subjective, as it requires the use of significant management estimates. Many factors can
affect managements estimates of specific and expected losses, including volatility of default probabilities, collateral values, rating migrations, loss severity and economic and political conditions. The allowance is increased through
provisions charged to operating earnings and reduced by net charge-offs.

The Company determines the amount of the allowance based on relative risk
characteristics of the loan portfolio. The allowance recorded for commercial loans is based on reviews of individual credit relationships and historical loss experience. The allowance recorded for homogeneous consumer loans is based on an analysis
of loan mix, risk characteristics of the portfolio, and historical losses, adjusted for current trends, for each homogeneous category or group of loans. The allowance for loan losses relating to impaired loans is based on the loans observable
market price, the collateral for certain collateral-dependent loans, or the discounted cash flows using the loans effective interest rate.

Regardless of the extent of the Companys analysis of customer performance, portfolio trends or risk management processes, certain inherent but undetected losses are probable within the loan portfolio. This is due to several factors,
including inherent delays in obtaining information regarding a customers financial condition or changes in their unique business conditions, the judgmental nature of individual loan evaluations, collateral assessments and the interpretation of
economic trends. Volatility of economic or customer-specific conditions affecting the identification and estimation of losses for larger non-homogeneous credits and the sensitivity of assumptions utilized to establish allowances for homogenous
groups of loans are among other factors. The Company estimates a range of inherent losses related to the existence of these exposures. The estimates are based upon the Companys evaluation of risk associated with the commercial and consumer
allowance levels and the estimated impact of the current economic environment.

Goodwill and Other Intangibles-The Company records all assets and
liabilities acquired in purchase acquisitions, including goodwill and other intangibles, at fair value as required by SFAS 141. Goodwill is subject, at a minimum, to annual tests for impairment. Other intangible assets are amortized over their
estimated useful lives using straight-line and accelerated methods, and are subject to impairment if events or circumstances indicate a possible inability to realize the carrying amount. The initial goodwill and other intangibles recorded and
subsequent impairment analysis requires management to make subjective judgments concerning estimates of how the acquired asset will perform in the future. Events and factors that may significantly affect the estimates include, among others, customer
attrition, changes in revenue growth trends, specific industry conditions and changes in competition.

EFFECT OF RECENT ACCOUNTING STANDARDS

In February 2007, the Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting Standards No. 159, The Fair Value
Option for Financial Assets and Financial Liabilities  including an amendment of FASB Statement No. 115 (SFAS No. 159). SFAS No. 159 permits us to choose to measure certain financial assets and liabilities at fair value that are
not currently required to be measured at fair value (i.e. the Fair Value Option). Election of the Fair Value Option is made on an instrument-by-instrument basis and is irrevocable. At the adoption date, unrealized gains and losses on financial
assets and liabilities for which the Fair Value Option has been elected would be reported as a cumulative adjustment to beginning retained earnings. If we elect the Fair Value Option for certain financial assets and liabilities, we will report
unrealized gains and losses due to changes in their fair value in earnings at each subsequent reporting date. SFAS No. 159 is effective as of January 1, 2008. The Company has not elected the fair value option for any financial assets or
liabilities at September 30, 2008.

In September 2006, the FASB issued Statement of Financial Accounting Standards No. 157, Fair Value
Measurements (FAS 157). FAS 157 enhances existing guidance for measuring assets and liabilities using fair value. Prior to the issuance of FAS 157, guidance for applying fair value was incorporated in several accounting pronouncements. FAS 157
provides a single definition of fair value, together with a framework for measuring it, and requires additional disclosure about the use of fair value to measure assets and liabilities. FAS 157 also emphasizes that fair value is a market-based
measurement, not an entity-specific measurement, and sets out a fair value hierarchy with the highest priority being quoted prices in active markets. Under FAS 157, fair value measurements are disclosed by level within that hierarchy. While FAS 157
does not add any new fair value measurements, it does change current practice. Changes to practice include: (1) a requirement for an entity to



17



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include its own credit standing in the measurement of its liabilities; (2) a modification of the transaction price presumption; (3) a prohibition
on the use of block discounts when valuing large blocks of securities for broker-dealers and investment companies; and (4) a requirement to adjust the value of restricted stock for the effect of the restriction even if the restriction lapses
within one year. FAS 157 is effective for financial statements issued for fiscal years beginning after November 15, 2007, and interim periods within those fiscal years.

Effective October 10, 2008, and for prior periods, the FASB issued FASB Staff Position (FSP) FAS 157-3, Determining the Fair Value of a Financial Asset When the Market for that Asset Is Not Active. The FSP
clarifies the application of FASB Statement No. 157, Fair Value Measurements, in a market that is not active. As of September 30, 2008, the Company was able to obtain all market values using the Level II hierarchy measurements adopted
under FAS 157.

Item 3  Quantitative and Qualitative Disclosures about Market Risk

Market risk is the risk of loss arising from adverse changes in the fair value of financial instruments due to interest rate risk, exchange rate risk, equity price risk
and commodity price risk. The Company does not maintain a trading account for any class of financial instrument, and is not currently subject to foreign currency exchange rate risk, equity price risk or commodity price risk. The Companys
market risk is composed primarily of interest rate risk.

The Bank manages its interest rate risk regularly through its Asset/Liability Committee. The
Committee meets on a monthly basis and reviews various asset and liability management information, including but not limited to, the Banks interest rate risk position, liquidity position, projected sources and uses of funds and economic
conditions.

The Bank uses simulation models to manage interest rate risk. In the Banks simulation models, each asset and liability balance is
projected over a one-year horizon. Net interest income is then projected based on expected cash flows and projected interest rates under a stable rate scenario and analyzed on a monthly basis. The results of this analysis are used in decisions made
concerning pricing strategies for loans and deposits, balance sheet mix, securities portfolio strategies, liquidity and capital adequacy. The Banks current one-year simulation model under stable rates indicates increasing yields on
interest-earning assets will exceed increasing costs of interest-bearing liabilities. This position could have a positive effect on projected net interest margin over the next twelve months.

Simulation models are also performed for ramped 100, 200 and 300 basis point increases or decreases in interest rates over one year. The results of these simulation
models are compared with the stable rate simulation. The model includes assumptions as to repricing and expected prepayments, anticipated calls, and expected decay rates of transaction accounts under the different rate scenarios. The results of
these simulations include changes in both net interest income and market value of equity. The Asset /Liability Committee has established guidelines that measure interest rate risk by the percent of change from stable rates, and capital adequacy, and
as the table below indicates, at September 30, 2008, the Bank is within the guidelines established by the Board for net interest income changes, but outside the guidelines for economic value of equity changes for decreasing rate changes of 100
and 200 basis points. A decreasing rate change of 300 basis points is not calculated because the rate would be less than zero for most of the Banks liabilities in todays current low interest rate environment. This current rate
environment also reduces the calculated economic value to the Bank of the substantial portion of checking and money market account balances maintained by the Bank. In the decreasing 100 and 200 economic value calculations, the calculated value of
these same deposits is the primary reason for the Bank exceeding the ALCO guidelines. Both management and the Board believe these deposits have long-term intangible value and help maintain the Bank within the net interest income change guidelines.
Therefore, the Board and management will continue to monitor this risk guideline but are not taking any specific action at this time.

As with any method
of measuring interest rate risk, certain shortcomings are inherent in the simulation modeling. For example, although certain assets and liabilities may have similar maturities or periods of repricing, they may react in different degrees to changes
in market rates. In addition, the interest rates on certain types of assets and liabilities may fluctuate in advance of changes in market rates, while interest rates on other types may lag behind changes in market rates. Further, in the event of a
change in interest rates, expected rates of prepayment on loans and mortgage-backed securities and early withdrawals from certificates of deposit may deviate significantly from those assumed in making the risk calculations. The Banks rate ramp
simulation models provide results in extreme interest rate environments and results are used accordingly. Reacting to changes in economic conditions, interest rates and market forces, the Bank has been able to alter the mix of short-and long-term
loans and investments, and increase or decrease the emphasis on fixed- and variable-rate products in response to changing market conditions.



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|          |  |                                    |   |  |                                |    |   |         |       |   |               |   |    |  
|--------- |  | ---------------------------------- | - |  | ------------------------------ | -- | - | ------- | ----- | - | ------------- | - | -- | -
|          |  | One Year Net InterestIncome Change |   |  | Economic Value of EquityChange |   
|Rate Ramp |  | 9/30/08                            |   |  | ALCOGuideline                  |    |   | 9/30/08 |       |   | ALCOGuideline |  
|+ 300     |  | -0.1                               | % |  | ±                              | 15 | % |         | 19.5  | % |               | ± | 20 | %
|+ 200     |  | -0.1                               |   |  | ±                              | 10 |   |         | 14.6  |   |               | ± | 15 |  
|+ 100     |  | -0.1                               |   |  | ±                              | 5  |   |         | 8.1   |   |               | ± | 10 |  
|- 100     |  | -1.5                               |   |  | ±                              | 5  |   |         | -10.4 |   |               | ± | 10 |  
|- 200     |  | -3.5                               |   |  | ±                              | 10 |   |         | -21.2 |   |               | ± | 15 |  
|- 300     |  | -6.1                               |   |  | ±                              | 15 |   |         | NA    |   |               | ± | 20 |  

Item 4  Controls and Procedures

(a) The Companys principal executive officer and principal financial officer have concluded, based upon their evaluation of the Companys disclosure controls
and procedures as of September 30, 2008, that the Companys disclosure controls and procedures were effective to ensure that information required to be disclosed by the Company in the reports that it files or submits under the Securities
Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commissions rules and forms. Disclosure controls and procedures include, without limitation, controls and
procedures designed to ensure that information required to be disclosed by the Company in the reports that it files or submits under the Securities Exchange Act of 1934 is accumulated and communicated to the Companys management, including its
principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure.

(b) During the quarter ended
September 30, 2008, there were no changes in the Companys internal controls over financial reporting that have materially affected, or are reasonably likely to materially affect, the Companys internal control over financial
reporting.



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PART II  OTHER INFORMATION

Item 1  Legal Proceedings

Not
applicable

Item 1A  Risk Factors

Readers should also consider the following additional risk factors, in addition to the risk factors outlined on Form 10-K for the fiscal year ended December 31, 2007.

Difficult conditions in the financial markets may adversely affect our business and results of operations.

Our financial performance depends on the quality of loans in our portfolio. That quality may be adversely affected by several factors, including underwriting procedures,
collateral quality or geographic or industry conditions, as well as the recent deterioration in the financial markets. Many lenders and institutional investors have reduced and, in some cases, ceased to provide funding to borrowers, including other
financial institutions. This market turmoil and tightening of credit have led to an increased level of commercial and consumer delinquencies and defaults, lack of consumer confidence, increased market volatility and widespread reduction of business
activity. In addition, our credit risk may be increased when our collateral cannot be sold or is sold at prices not sufficient to recover the full amount of the loan balance. Deterioration in our ability to collect our loans receivable may adversely
affect our profitability and financial condition.

Federal and state governments could adopt laws responsive to the current credit conditions that would
adversely affect our ability to collect on loans.

Federal or state governments might adopt legislation or regulations reducing the amount that our
customers are required to pay under existing loan contracts or limit our ability to foreclose on collateral.

FDIC insurance premiums may increase
materially.

The FDIC insures deposits at FDIC insured financial institutions, including the Bank. The FDIC charges the insured financial institutions
premiums to maintain the Deposit Insurance Fund at a certain level. Current economic conditions have increased bank failures and expectations for further failures, in which case the FDIC ensures payments of deposits up to insured limits from the
Deposit Insurance Fund. In October 2008, the FDIC issued a proposed rule that would increase premiums paid by insured institutions and make other changes to the assessment system. Increases in deposit insurance premiums could adversely affect our
net income.

In addition, the FDIC has adopted the Temporary Liquidity Guarantee Program, pursuant to which it provides unlimited insurance on deposits in
noninterest-bearing transaction accounts not otherwise covered by the existing deposit insurance limit of $250,000. After the initial 30 days of coverage for all insured institutions choosing to participate, any institution wishing to participate
will pay a 10 basis point surcharge on the insured deposits. The Company has chosen to participate. Such participation will increase our expenses and decrease net income.

Concern of customers over deposit insurance may cause a decrease in deposits at the Bank.

With recent increased
concerns about bank failures, customers increasingly are concerned about the extent to which their deposits are insured by the FDIC. Customers may withdraw deposits from the Bank in an effort to ensure that the amount they have on deposit at The
National Bank & Trust Company is fully insured. Decreases in deposits may adversely affect our funding costs and net income.



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Item 2  Unregistered Sales of Equity Securities and Use of Proceeds

(a) Not applicable

(b)
Not applicable

(c) Issuer Purchases of Equity Securities



|                  |  |                                   |  |                                |       |                                                                                       |       |                                                                                                                  |        
|----------------- |  | --------------------------------- |  | ------------------------------ | ----- | ------------------------------------------------------------------------------------- | ----- | ---------------------------------------------------------------------------------------------------------------- | -------
|Period            |  | (a) TotalNumberof SharesPurchased |  | (b) AveragePrice Paidper Share |       | (c) Total Number ofShares Purchased as Partof Publicly AnnouncedPlans or Programs
(1) |       | (d) Maximum Number (orApproximate Dollar Value) ofShares that May Yet
BePurchased Under the Plans orPrograms (1)
|7/1/08 to 7/31/08 |  |                                   |  |                                |       |                                                                                       |       |                                                                                                                  | 104,869
|8/1/08 to 8/31/08 |  | 1,425                             |  | $                              | 16.54 |                                                                                       | 1,425 |                                                                                                                  | 103,444
|9/1/08 to 9/30/08 |  |                                   |  |                                |       |                                                                                       |       |                                                                                                                  | 103,444
|Total             |  | 1,425                             |  | $                              | 16.54 |                                                                                       | 1,425 |                                                                                                                  | 103,444



|(1) | On April 22, 2008, the Board of Directors approved an extension until April 30, 2009, of the Companys repurchase of up to 170,000 shares of stock as originally
announced on April 24, 2007.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Item 3  Defaults Upon Senior Securities

Not applicable

Item 4  Submission of
Matters to a Vote of Security Holders

Not applicable

Item 5  Other Information

Not applicable

Item 6  Exhibits



|               |  |                                                                                              
|-------------- |  | ---------------------------------------------------------------------------------------------
|Exhibit Number |  | Index to Exhibits                                                                            
|3.1            |  | Third Amended and Restated Articles of Incorporation of NB&T Financial Group, Inc.           
|               | 
|3.2            |  | Amended and Restated Code of Regulations of NB&T Financial Group, Inc.                       
|               | 
|4              |  | Agreement to furnish instruments and agreements defining rights of holders of long-term debt.
|               | 
|15             |  | Accountants acknowledgement.                                                                
|               | 
|31.1           |  | Certification by CEO.                                                                        
|               | 
|31.2           |  | Certification by CFO.                                                                        
|               | 
|32.1           |  | Certification by CEO Pursuant to 18 U.S.C. Section 1350.                                     
|               | 
|32.2           |  | Certification by CFO Pursuant to 18 U.S.C. Section 1350.                                     



21



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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto
duly authorized.





|                        |  |  |  |                                                                                
|----------------------- |  |  |  | -------------------------------------------------------------------------------
|                        |  |  |  | NB&T FINANCIAL GROUP, INC.                                                     
|                        |  | 
|Date: November 13, 2008 |  |  |  | /s/ Craig F. Fortin                                                            
|                        |  |  |  | Craig F. Fortin                                                                
|                        |  |  |  | Senior Vice President and Chief Financial Officer (Principal Financial Officer)



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Index to Exhibits



|               |  |                                                                                               |  |                                                                                                        
|-------------- |  | --------------------------------------------------------------------------------------------- |  | -------------------------------------------------------------------------------------------------------
|Exhibit Number |  | Description                                                                                   |  | Page Reference                                                                                         
|3.1            |  | Third Amended and Restated Articles of Incorporation of NB&T Financial Group, Inc.            |  | Incorporated by reference to registrants Definitive Proxy Statement filed on March 31, 2003, Exhibit A
|               |  |                                                                                              
|3.2            |  | Amended and Restated Code of Regulations of NB&T Financial Group, Inc.                        |  | Incorporated by reference to registrants Definitive Proxy Statement filed on March 31, 2003, Exhibit B
|               |  |                                                                                              
|4              |  | Agreement to furnish instruments and agreements defining rights of holders of long-term debt. |  |                                                                                                        
|               |  |                                                                                              
|15             |  | Accountants acknowledgement.                                                                 |  |                                                                                                        
|               |  |                                                                                              
|31.1           |  | Certification by CEO.                                                                         |  |                                                                                                        
|               |  |                                                                                              
|31.2           |  | Certification by CFO.                                                                         |  |                                                                                                        
|               |  |                                                                                              
|32.1           |  | Certification by CEO Pursuant to 18 U.S.C Section 1350.                                       |  |                                                                                                        
|               |  |                                                                                              
|32.2           |  | Certification by CFO Pursuant to 18 U.S.C. Section 1350.                                      |  |                                                                                                        



23