<SUBMISSION>
<ACCESSION-NUMBER>0001015402-02-002636
<TYPE>10-Q
<PUBLIC-DOCUMENT-COUNT>1
<PERIOD>20020630
<FILING-DATE>20020813
<FILER>
<COMPANY-DATA>
<CONFORMED-NAME>NBT BANCORP INC
<CIK>0000790359
<ASSIGNED-SIC>6021
<IRS-NUMBER>161268674
<STATE-OF-INCORPORATION>DE
<FISCAL-YEAR-END>1231
</COMPANY-DATA>
<FILING-VALUES>
<FORM-TYPE>10-Q
<ACT>34
<FILE-NUMBER>000-14703
<FILM-NUMBER>02729744
</FILING-VALUES>
<BUSINESS-ADDRESS>
<STREET1>52 S BROAD ST
<CITY>NORWICH
<STATE>NY
<ZIP>13815
<PHONE>6073372265
</BUSINESS-ADDRESS>
<MAIL-ADDRESS>
<STREET1>52 S. BROAD STREET
<CITY>NORWICH
<STATE>NY
<ZIP>13815
</MAIL-ADDRESS>
</FILER>
<DOCUMENT>
<TYPE>10-Q
<SEQUENCE>1
<FILENAME>doc1.txt
<TEXT>
                       SECURITIES AND EXCHANGE COMMISSION
                              Washington, DC 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 June 30, 2002.
                                       OR
     TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
---
     EXCHANGE ACT OF 1934
For  the  transition  period  from  ________  to  ________.


                         COMMISSION FILE NUMBER 0-14703


                                NBT BANCORP INC.
             (Exact Name of Registrant as Specified in its Charter)

            DELAWARE                                   16-1268674
     (State of Incorporation)              (I.R.S. Employer Identification No.)

                  52 SOUTH BROAD STREET NORWICH, NEW YORK 13815
               (Address of Principal Executive Offices)(Zip Code)

       Registrant's Telephone Number, Including Area Code: (607)-337-2265

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 shorter periods 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
                              ---     ---


As  of  July  31,  2002,  there  were  33,129,923  shares  outstanding  of  the
Registrant's  common  stock,  $0.01  par  value.


                                        1
<PAGE>
                                NBT BANCORP INC.
                    FORM 10-Q -- Quarter Ended June 30, 2002

                                TABLE OF CONTENTS


PART I    FINANCIAL  INFORMATION

Item 1    Interim Financial Statements (Unaudited)


          Consolidated  Balance  Sheets  at  June  30,  2002,  December 31, 2001
          (Audited),  and  June  30,  2001

          Consolidated  Statements  of  Income for the three month and six month
          periods  ended  June  30,  2002  and  2001

          Consolidated  Statements  of  Stockholders'  Equity  for the six month
          periods  ended  June  30,  2002  and  2001

          Consolidated  Statements of Cash Flows for the six month periods ended
          June  30,  2002  and  2001

          Consolidated  Statements  of Comprehensive Income (Loss) for the three
          month  and  six  month  periods  ended  June  30,  2002  and  2001

          Notes  to  Unaudited  Interim  Consolidated  Financial  Statements

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

Item 3    Quantitative  and  Qualitative  Disclosures  about  Market  Risk

PART  II  OTHER  INFORMATION

Item  1   Legal  Proceedings
Item  2   Changes  in  Securities
Item  3   Defaults  upon  Senior  Securities
Item  4   Submission  of  Matters  to  a  Vote  of  Security  Holders
Item  5   Other  Information
Item  6   Exhibits  and  Reports  on  FORM  8-K

SIGNATURES

INDEX  TO  EXHIBITS


                                        2
<PAGE>
<TABLE>
<CAPTION>

NBT BANCORP INC. AND SUBSIDIARIES                                                JUNE 30,     December 31,     June 30,
CONSOLIDATED BALANCE SHEETS                                                        2002           2001           2001
-------------------------------------------------------------------------------------------------------------------------
(in thousands, except share and per share data)                                (UNAUDITED)                   (Unaudited)
<S>                                                                            <C>           <C>             <C>
ASSETS
Cash and due from banks                                                        $   108,456   $     123,201   $    94,153
Short-term interest bearing accounts                                                 5,950           6,756         6,975
Trading securities, at fair value                                                      280             126         9,658
Securities available for sale, at fair value                                       988,538         909,341       965,969
Securities held to maturity (fair value - $89,880, $101,495
 and $104,063)                                                                      88,882         101,604       104,477
Federal Reserve and Federal Home Loan Bank stock                                    23,372          21,784        23,333
Loans and leases                                                                 2,336,041       2,339,636     2,353,075
 Less allowance for loan and lease losses                                           43,719          44,746        34,126
-------------------------------------------------------------------------------------------------------------------------
  Net loans and leases                                                           2,292,322       2,294,890     2,318,949
Premises and equipment, net                                                         61,716          62,685        61,166
Goodwill                                                                            15,476          15,476        15,133
Intangible assets, net                                                              31,977          35,212        36,155
Other assets                                                                        61,129          67,127        65,261
-------------------------------------------------------------------------------------------------------------------------
TOTAL ASSETS                                                                   $ 3,678,098   $   3,638,202   $ 3,701,229
=========================================================================================================================

LIABILITIES, GUARANTEED PREFERRED BENEFICIAL INTERESTS
IN COMPANY'S JUNIOR SUBORDINATED DEBENTURES AND STOCKHOLDERS' EQUITY
Deposits:
 Demand (noninterest bearing)                                                  $   424,615   $     431,407   $   393,173
 Savings, NOW, and money market                                                  1,119,730       1,097,156     1,027,541
 Time                                                                            1,323,300       1,387,049     1,501,387
-------------------------------------------------------------------------------------------------------------------------
  Total deposits                                                                 2,867,645       2,915,612     2,922,101
Short-term borrowings                                                              122,903         122,013       146,473
Long-term debt                                                                     350,729         272,331       276,865
Other liabilities                                                                   37,903          44,891        46,081
-------------------------------------------------------------------------------------------------------------------------
  Total liabilities                                                              3,379,180       3,354,847     3,391,520

Guaranteed preferred beneficial interests in
Company's junior subordinated debentures                                            17,000          17,000        17,000

Stockholders' equity:
  Preferred stock, $0.01 par value; shares authorized-2,500,000; none issued             -               -             -
  Common stock, $0.01 par value; shares authorized-50,000,000;
    shares issued 34,401,212, 34,252,661, and 34,218,062
    at June 30, 2002, December 31, 2001, and June 30, 2001, respectively               344             343           342
  Additional paid-in-capital                                                       210,445         209,176       208,817
  Retained earnings                                                                 82,769          72,531        95,514
  Unvested restricted stock awards                                                    (189)              -             -
  Accumulated other comprehensive income                                             9,214           3,921           864
  Treasury stock at cost 1,219,970, 1,147,848,
   and 716,793 shares at June 30, 2002, December 31, 2001
   and June 30, 2001, respectively                                                 (20,665)        (19,616)      (12,828)
-------------------------------------------------------------------------------------------------------------------------
  Total stockholders' equity                                                       281,918         266,355       292,709
-------------------------------------------------------------------------------------------------------------------------
TOTAL LIABILITIES, GUARANTEED PREFERRED
BENEFICIAL INTERESTS IN COMPANY'S JUNIOR
SUBORDINATED DEBENTURES
AND STOCKHOLDERS' EQUITY                                                       $ 3,678,098   $   3,638,202   $ 3,701,229
=========================================================================================================================
</TABLE>

See notes to unaudited interim consolidated financial statements.


                                        3
<PAGE>
<TABLE>
<CAPTION>

                                                        Three months ended       Six months ended
NBT BANCORP INC. AND SUBSIDIARIES                             June 30,               June 30,
CONSOLIDATED STATEMENTS OF INCOME                         2002        2001       2002        2001
----------------------------------------------------------------------------------------------------
<S>                                                   <C>           <C>        <C>        <C>
(in thousands, except per share data)                  (Unaudited)
INTEREST, FEE AND DIVIDEND INCOME:
Loans                                                 $     41,390  $  46,941  $ 83,617   $   95,093
Securities available for sale                               14,613     15,130    28,180       30,754
Securities held to maturity                                  1,170      1,330     2,416        2,708
Trading securities                                               2        300         4          345
Other                                                          315        500       595        1,201
----------------------------------------------------------------------------------------------------
  Total interest, fee and dividend income                   57,490     64,201   114,812      130,101
----------------------------------------------------------------------------------------------------
INTEREST EXPENSE:
Deposits                                                    16,265     25,950    33,256       54,155
Short-term borrowings                                          287      1,410       635        3,429
Long-term debt                                               3,856      3,336     7,494        6,633
----------------------------------------------------------------------------------------------------
  Total interest expense                                    20,408     30,696    41,385       64,217
----------------------------------------------------------------------------------------------------
Net interest income                                         37,082     33,505    73,427       65,884
Provision for loan and lease losses                          2,092      6,872     4,103        8,083
----------------------------------------------------------------------------------------------------
Net interest income after provision for loan losses         34,990     26,633    69,324       57,801
----------------------------------------------------------------------------------------------------
NONINTEREST INCOME:
Trust                                                        1,154      1,070     2,174        2,116
Service charges on deposit accounts                          3,239      3,226     6,289        5,997
Broker/dealer and insurance fees                             1,483        900     2,978        1,923
Net securities (losses) gains                                   69        227      (433)       1,250
Gain on sale of a building                                       -          -         -        1,367
Gain on sale of branch, net                                      -          -       220            -
Other                                                        2,359      2,280     4,970        4,727
----------------------------------------------------------------------------------------------------
  Total noninterest income                                   8,304      7,703    16,198       17,380
----------------------------------------------------------------------------------------------------
NONINTEREST EXPENSE:
Salaries and employee benefits                              12,649     11,569    25,305       23,302
Office supplies and postage                                  1,227      1,282     2,124        2,361
Occupancy                                                    2,096      2,179     4,265        4,466
Equipment                                                    1,818      1,700     3,532        3,433
Professional fees and outside services                       1,782      1,480     3,397        2,600
Data processing and communications                           2,598      2,348     5,163        5,004
Amortization of intangible assets                              830      1,012     1,690        1,976
Capital securities                                             230        341       446          745
Deposit overdraft write-offs                                     -          -         -        2,125
Loan collection and other real estate owned                    781        483     1,725          807
Other operating                                              3,175      2,760     5,869        4,985
----------------------------------------------------------------------------------------------------
  Total noninterest expense                                 27,186     25,154    53,516       51,804
----------------------------------------------------------------------------------------------------
Income before income taxes                                  16,108      9,182    32,006       23,377
Income taxes                                                 5,261      2,612    10,507        7,153
----------------------------------------------------------------------------------------------------
  NET INCOME                                          $     10,847  $   6,570  $ 21,499   $   16,224
====================================================================================================
Earnings per share:
  Basic                                               $       0.33  $    0.20  $   0.65   $     0.50
  Diluted                                             $       0.32  $    0.20  $   0.64   $     0.49
====================================================================================================
</TABLE>

See notes to unaudited interim consolidated financial statements.


                                        4
<PAGE>
<TABLE>
<CAPTION>

NBT BANCORP INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (UNAUDITED)
------------------------------------------------------------------------------------------------------------------------------
                                                                                                                 Accumulated
                                                                        Additional                 Unvested         Other
                                                              Common     Paid-in-     Retained    Restricted    Comprehensive
                                                              Stock      Capital      Earnings      Stock       Income (loss)
------------------------------------------------------------------------------------------------------------------------------
<S>                                                          <C>       <C>           <C>         <C>           <C>
(in thousands, except share and per share data)

BALANCE AT DECEMBER 31, 2000                                 $   332   $   195,422   $  88,921             -   $       (1,934)
Net income                                                                              16,224
Cash dividends - $0.34 per share (1)                                                    (9,631)
Retirement of 63,034 shares of
  treasury stock of pooled
  company                                                         (1)         (708)
Purchase of 271,939 treasury shares
Issuance of 164,885 shares to
   employee benefits plans and
   other stock plans, including
   tax benefit                                                              (1,888)
Issuance of 1,075,365 shares to
  purchase First National
  Bancorp, Inc.                                                   11        15,991
Other comprehensive income                                                                                              2,798
------------------------------------------------------------------------------------------------------------------------------
BALANCE AT JUNE 30, 2001                                     $   342   $   208,817   $  95,514             -   $          864
==============================================================================================================================

BALANCE AT DECEMBER 31, 2001                                 $   343   $   209,176   $  72,531             -   $        3,921
Net income                                                                              21,499
Cash dividends - $0.34 per share                                                       (11,261)
Purchase of 72,900 treasury shares
Issuance of 162,421 shares to
  employee benefit plans and other
  stock plans, including tax benefit                               1         1,296
Grant of 14,648 shares of restricted
  stock awards                                                                 (27)                     (222)
Amortization of restricted stock
  awards                                                                                                  33
Other comprehensive income                                                                                              5,293
------------------------------------------------------------------------------------------------------------------------------
BALANCE AT JUNE 30, 2002                                     $   344   $   210,445   $  82,769   $      (189)  $        9,214
------------------------------------------------------------------------------------------------------------------------------


NBT BANCORP INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (UNAUDITED)
----------------------------------------------------------------------------------


                                                              Treasury
                                                               Stock       Total
----------------------------------------------------------------------------------
<S>                                                          <C>         <C>
(in thousands, except share and per share data)

BALANCE AT DECEMBER 31, 2000                                 $ (13,100)  $269,641
Net income                                                                 16,224
Cash dividends - $0.34 per share (1)                                       (9,631)
Retirement of 63,034 shares of
  treasury stock of pooled
  company                                                          709          -
Purchase of 271,939 treasury shares                             (3,949)    (3,949)
Issuance of 164,885 shares to
   employee benefits plans and
   other stock plans, including
   tax benefit                                                   3,512      1,624
Issuance of 1,075,365 shares to
  purchase First National
  Bancorp, Inc.                                                            16,002
Other comprehensive income                                                  2,798
----------------------------------------------------------------------------------
BALANCE AT JUNE 30, 2001                                     $ (12,828)  $292,709
==================================================================================

BALANCE AT DECEMBER 31, 2001                                 $ (19,616)  $266,355
Net income                                                                 21,499
Cash dividends - $0.34 per share                                          (11,261)
Purchase of 72,900 treasury shares                              (1,171)    (1,171)
Issuance of 162,421 shares to
  employee benefit plans and other
  stock plans, including tax benefit                              (127)     1,170
Grant of 14,648 shares of restricted
  stock awards                                                     249         --
Amortization of restricted stock
  awards                                                                       33
Other comprehensive income                                                  5,293
----------------------------------------------------------------------------------
BALANCE AT JUNE 30, 2002                                     $ (20,665)  $281,918
----------------------------------------------------------------------------------
</TABLE>

See notes to unaudited interim consolidated financial statements.

Note:

(1)  For the period ended June 30, 2001, dividends per share data represents
     historical dividends per share of NBT Bancorp Inc. stand-alone and the cash
     dividends paid represents NBT Bancorp Inc. and CNB Financial Corp combined
     as all unaudited interim consolidated financial statements have been
     restated to give effect to the merger with CNB Financial Corp., which was
     accounted for as a pooling-of-interests and closed on November 8, 2001.


                                        5
<PAGE>
<TABLE>
<CAPTION>

NBT BANCORP INC. AND SUBSIDIARIES                              Six Months Ended June 30,
CONSOLIDATED STATEMENTS OF CASH FLOWS                           2002             2001
------------------------------------------------------------------------------------------
(in thousands)                                                               (Unaudited)
<S>                                                        <C>              <C>
OPERATING ACTIVITIES:
Net income                                                 $       21,499   $      16,224
Adjustments to reconcile net income to net cash provided
by operating activities:
Provision for loan losses                                           4,103           8,083
Depreciation of premises and equipment                              3,451           2,924
Net accretion on securities                                          (866)           (911)
Amortization of intangible assets                                   1,690           1,976
Amortization of restricted stock awards                                33               -
Proceeds from sale of loans held for sale                           3,965          11,282
Origination of loans held for sale                                 (3,114)        (12,899)
Net losses (gains) on sales of loans                                   50             (88)
Net (gain) loss on sale of other real estate owned                    (50)            211
Net security losses (gains)                                           433          (1,250)
Proceeds from maturities of trading securities                          -             775
Proceeds from sale of trading securities                                -          20,709
Purchases of trading securities                                      (166)         (6,588)
Gain on sale of a building                                              -          (1,367)
Gain on sale of a branch, net                                        (220)              -
Net decrease (increase)  in other assets                            2,954          (2,611)
Net decrease in other liabilities                                  (6,245)         (4,734)
------------------------------------------------------------------------------------------
Net cash provided by operating activities                          27,517          31,736
------------------------------------------------------------------------------------------
INVESTING ACTIVITIES:
Net cash and cash equivalents provided by acquisitions                  -           9,509
Net cash paid in conjunction with branch sale                     (29,171)              -
Securities available for sale:
  Proceeds from maturities                                        141,582         144,194
  Proceeds from sales                                             156,799          49,389
  Purchases                                                      (368,278)       (197,563)
Securities held to maturity:
  Proceeds from maturities                                         30,000          23,052
  Purchases                                                       (17,330)        (11,548)
(Purchases ) proceeds of FRB and FHLB stock                        (1,588)          8,802
Net increase in loans                                              (6,821)        (39,725)
Purchase of premises and equipment, net                            (3,390)         (3,659)
Proceeds from sales of other real estate owned                        811           1,566
------------------------------------------------------------------------------------------
Net cash used in investing activities                             (97,386)        (15,983)
------------------------------------------------------------------------------------------
FINANCING ACTIVITIES:
Net decrease in deposits                                          (13,708)        (30,747)
Net increase (decrease) in short-term borrowings                      890         (38,701)
Proceeds from issuance of long-term debt                           80,000         246,291
Repayments of long-term debt                                       (1,602)       (209,955)
Proceeds from issuance of treasury shares to
  employee benefit plans and other stock plans,
  including tax benefit                                             1,170           1,624
Purchase of treasury stock                                         (1,171)         (3,949)
Cash dividends                                                    (11,261)         (9,631)
------------------------------------------------------------------------------------------
Net cash provided by (used) in  financing activities               54,318         (45,068)
------------------------------------------------------------------------------------------
Net decrease in cash and cash equivalents                         (15,551)        (29,315)
Cash and cash equivalents at beginning of period                  129,957         130,443
------------------------------------------------------------------------------------------
CASH AND CASH EQUIVALENTS AT END OF PERIOD                 $      114,406   $     101,128
==========================================================================================
</TABLE>
                                                                   ( Continued )


                                        6
<PAGE>
<TABLE>
<CAPTION>
CONSOLIDATED STATEMENTS OF CASH FLOWS, CONTINUED
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:                  SIX MONTHS ENDED JUNE 30,
                                                                     2002            2001
<S>                                                              <C>            <C>
 Cash paid during the period for:
  Interest                                                       $      44,898  $       68,194
  Income taxes                                                           6,896           1,537
==============================================================================================

Loans transferred to OREO                                        $       1,277           1,775
Transfer of securities available for sale to trading securities              -           3,804

BRANCH DIVESTITURE:
  Assets sold                                                    $       3,323               -
  Liabilities sold                                                      34,263               -

ACQUISITIONS:
----------------------------------------------------------------------------------------------
Fair value of assets acquired                                                -         109,549
Fair value of liabilities assumed                                            -         110,501
Common stock issued for acquisitions                                         -          16,002

----------------------------------------------------------------------------------------------
</TABLE>

See notes to unaudited interim consolidated financial statements.


                                        7
<PAGE>
<TABLE>
<CAPTION>

                                                                     Three months ended      Six months ended
NBT BANCORP INC. AND SUBSIDIARIES                                         June 30,               June 30,
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME                     2002          2001        2002       2001
----------------------------------------------------------------------------------------------------------------
<S>                                                             <C>           <C>           <C>       <C>
(in thousands)                                                                     (Unaudited)

Net Income                                                      $    10,847   $     6,570   $ 21,499  $   16,224
----------------------------------------------------------------------------------------------------------------
Other comprehensive income (loss), net of tax
     Unrealized holding gains (losses) arising during
         period [pre-tax amounts of  $16,103
         $(2,794), $8,369 and $5,858]                                 9,662        (1,673)     5,037       3,423
     Less: Reclassification adjustment for net (gains) losses
         included in net income [pre-tax amounts of
         $(70), $(1,327), $425 and $(1,040)]                            (42)         (798)       256        (625)
----------------------------------------------------------------------------------------------------------------
Total other comprehensive income (loss)                               9,620        (2,471)     5,293       2,798
----------------------------------------------------------------------------------------------------------------
Comprehensive income                                            $    20,467   $     4,099   $ 26,792  $   19,022
================================================================================================================
</TABLE>

See notes to unaudited interim consolidated financial statements.


                                        8
<PAGE>
NBT BANCORP INC. AND SUBSIDIARY
NOTES TO UNAUDITED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2002

NOTE 1.  BASIS  OF  PRESENTATION
The accompanying unaudited interim consolidated financial statements include the
accounts of NBT Bancorp Inc. (the Registrant) and its wholly-owned subsidiaries,
NBT  Bank,  N.A.  (NBT  or Bank), NBT Financial Services, Inc., and CNBF Capital
Trust  I.  Collectively,  the  Registrant  and  its subsidiaries are referred to
herein  as  "the Company". All intercompany transactions have been eliminated in
consolidation. Amounts in the prior period financial statements are reclassified
whenever  necessary  to  conform  to  current  period  presentation.

     The  consolidated  balance sheet at December 31, 2001 has been derived from
audited  consolidated  financial  statements  at  that  date.  The  accompanying
unaudited  interim  consolidated  financial  statements  have  been  prepared in
accordance with accounting principles generally accepted in the United States of
America for interim financial information and with the instructions to Form 10-Q
and  Rule  10-01  of Regulation S-X. Accordingly, they do not include all of the
information  and  footnotes required by accounting principles generally accepted
in  the  United  States  of  America  for  complete financial statements. In the
opinion of management, all adjustments (consisting of normal recurring accruals)
considered  necessary  for  a  fair  presentation  have been included. Operating
results  for  the  three  and six months ended June 30, 2002 are not necessarily
indicative  of the results that may be expected for the year ending December 31,
2002.  For  further  information, refer to the consolidated financial statements
included  in  the  Registrant's  annual  report  on Form 10-K for the year ended
December  31,  2001 and notes thereto referred to above. The Company's unaudited
interim  consolidated  financial statements as of and for the periods ended June
30,  2001  have  been  restated  to give effect to the merger with CNB Financial
Corp.,  which  closed  on  November  8,  2001  and  was  accounted  for  as  a
pooling-of-interests.

NOTE 2.  USE  OF  ESTIMATES
Preparing  financial  statements  in  conformity  with  accounting  principles
generally  accepted  in the United States of America requires management to make
estimates  and  assumptions  that  affect  the  reported  amounts  of  assets,
liabilities  and  disclosure  of contingent assets and liabilites at the date of
the financial statements and the reported amounts of revenue and expenses during
the  reporting period, as well as the disclosures provided. Actual results could
differ  from  those  estimates. Estimates associated with the allowance for loan
losses,  fair  values  of  financial instruments and status of contingencies are
particularly  susceptible  to  material  change  in  the  near  term.

NOTE 3.  COMMITMENTS  AND  CONTINGENCIES
The Company is a party to financial instruments in the normal course of business
to  meet  financing  needs  of  its  customers and to reduce its own exposure to
fluctuating  interest  rates. These financial instruments include commitments to
extend  credit,  unused lines of credit, and standby letters of credit. Exposure
to  credit  loss  in  the  event  of  nonperformance  by  the other party to the
financial instrument for commitments to make loans and standby letters of credit
is  represented by the contractual amount of those instruments. The Company uses
the  same credit policy to make such commitments as it uses for on-balance-sheet
items.


                                        9
<PAGE>
At  June 30, 2002 and December 31, 2001, commitments to extend credit and unused
lines  of  credit  totaled  $441.3 million and $704.7 million, respectively, and
standby  letters of credit totaled $21.6 million and $21.1 million, respectively
at  those  same  dates.  Since  commitments to extend credit and unused lines of
credit may expire without being used, this amount does not necessarily represent
future  cash commitments. Collateral obtained upon exercise of the commitment is
determined  using  managements credit evaluation of the borrower and may include
accounts  receivable,  inventory,  property,  land  and  other  items.

NOTE 4.  EARNINGS  PER  SHARE
     Basic  earnings  per  share  excludes  dilution and is computed by dividing
income available to common shareholders by the weighted average number of common
shares  outstanding  for  the  period.  Diluted  earnings per share reflects the
potential  dilution  that  could occur if securities or other contracts to issue
common  stock  were  exercised or converted into common stock or resulted in the
issuance of common stock that then shared in the earnings of the entity (such as
the  Company's  dilutive  stock  options  and  restricted  stock).


     The  following  is a reconciliation of basic and diluted earnings per share
for  the  periods  presented  in  the  consolidated  statements  of  income.

<TABLE>
<CAPTION>
---------------------------------------------------------------------------------
Three months ended June 30,                                       2002     2001
---------------------------------------------------------------------------------
<S>                                                              <C>      <C>
(in thousands, except per share data)
Basic EPS:
  Weighted average common shares outstanding                      33,157   32,874
  Net income available to common shareholders                    $10,847  $ 6,570
---------------------------------------------------------------------------------
Basic EPS                                                        $  0.33  $  0.20
=================================================================================
Diluted EPS:
  Weighted average common shares outstanding                      33,157   32,874
  Dilutive effect of common stock options and restricted stock       276      238
---------------------------------------------------------------------------------
  Weighted average common shares and common
   share equivalents                                              33,433   33,112
  Net income available to common shareholders                    $10,847  $ 6,570
---------------------------------------------------------------------------------
Diluted EPS                                                      $  0.32  $  0.20
=================================================================================


Six months ended June 30,                                           2002     2001
---------------------------------------------------------------------------------
(in thousands, except per share data)

Basic EPS:
  Weighted average common shares outstanding                      33,125   32,663
  Net income available to common shareholders                    $21,499  $16,224
---------------------------------------------------------------------------------
Basic EPS                                                        $  0.65  $  0.50
=================================================================================

Diluted EPS:
  Weighted average common shares outstanding                      33,125   32,663
  Dilutive effect of common stock options and restricted stock       239      241
---------------------------------------------------------------------------------
  Weighted average common shares and common
   share equivalents                                              33,364   32,904
  Net income available to common shareholders                    $21,499  $16,224
---------------------------------------------------------------------------------
Diluted EPS                                                      $  0.64  $  0.49
=================================================================================
</TABLE>


                                       10
<PAGE>
     There were 401,397 outstanding stock options for the quarter ended June 30,
2002 and 1,009,680 outstanding stock options for the quarter ended June 30, 2001
that  were not considered in the calculation of diluted earnings per share since
the  stock  options'  exercise  price  was greater than the average market price
during  these  periods. There were 927,943 outstanding stock options for the six
month period ended June 30, 2002 and 1,009,680 outstanding stock options for the
six month period ended June 30, 2001 that were not considered in the calculation
of  diluted  earnings  per  share  since  the  stock options' exercise price was
greater  than  the  average  market  price  during  these  periods.

NOTE 5.  MERGERS  AND  ACQUISITIONS

On  June  1,  2001,  the  Company  completed  the  acquisition of First National
Bancorp,  Inc.  (FNB)  whereby FNB was merged with and into NBT Bancorp Inc.  At
the  same  time  FNB's subsidiary, First National Bank of Northern New York (FNB
Bank)  was  merged  into  the Bank.  The acquisition was accounted for using the
purchase  method.  As  such,  both  the assets and liabilities assumed have been
recorded  on  the  consolidated  balance  sheet of the Company at estimated fair
value  as  of the date of acquisition and the results of operations are included
in  the  Company's  consolidated  statement  of income from the acquisition date
forward.  To  complete  the  transaction,  the  Company  issued  approximately
1,075,000  shares  of  its  common  stock  valued  at  $16.0 million.  Goodwill,
representing  the  cost over net assets acquired, was approximately $7.0 million
and was being amortized prior to the adoption of SFAS No. 142 on January 1, 2002
on  a  straight-line  basis  based  on  a  20  year  amortization  period.

On  September  14,  2001,  the  Company  acquired $14.4 million in deposits from
Mohawk  Community  Bank.  Unidentified  intangible  assets,  accounted  for  in
accordance  with  SFAS No. 72 "Accounting for Certain Acquisitions of Banking or
Thrift  Institutions"  and  representing  the  excess  of  cost  over net assets
acquired,  was  $665,000 and is being amortized over 15 years on a straight-line
basis.  Additionally, the Company identified $119,000 of core deposit intangible
asset.

On  November 8, 2001, the Company, pursuant to a merger agreement dated June 18,
2001,  completed  its merger with CNB Financial Corp. (CNB) and its wholly owned
subsidiary,  Central  National  Bank (CNB Bank), whereby CNB was merged with and
into the Company, and CNB Bank was merged with and into NBT Bank.  CNB Bank then
became  a division of the Bank.  In connection with the merger, CNB stockholders
received  1.2  shares  of the Company's common stock for each share of CNB stock
and  the  Company  issued approximately 8.9 million shares of common stock.  The
transaction  was  structured  to be tax-free to shareholders of CNB and has been
accounted  for  as  a  pooling-of-interests.  Accordingly,  the  June  30,  2001
unaudited  consolidated  financial  statements  have  been  restated  to present
combined  consolidated  financial  condition  and  results  of operations of the
Company  and  CNB as if the merger had been in effect for all periods presented.
At  September  30, 2001, CNB had consolidated assets of $983.1 million, deposits
of  $853.7  million  and  equity  of  $62.8  million.  CNB Bank operated 29 full


                                       11
<PAGE>
service  banking  offices  in  nine  upstate  New  York  counties.

At  June  30,  2002,  after  payments  of  certain  merger,  acquisition  and
reorganization  costs, the Company had a remaining accrued liability for merger,
acquisition  and  reorganization  costs  related  to the merger with CNB of $3.0
million,  which was comprised mainly of severance costs (expected to be paid out
by the end of the year) and estimated costs related to branch closings (expected
to  be  settled  by  the  end  of  the  year  except for certain long-term lease
commitments).

NOTE 6.  NEW  ACCOUNTING  PRONOUNCEMENTS
The  Company  adopted the provisions of SFAS No. 133, "Accounting for Derivative
Instruments  and  Hedging  Activities," effective January 1, 2001. At that time,
the  Company  had  certain  embedded  derivative  instruments  from the recently
acquired CNB Bank investment portfolio related to a deposit product and two debt
securities  that  had  costs and returns linked to the performance of the NASDAQ
100  index.  Management  determined  that  these debt securities and the deposit
product  did  not qualify for hedge accounting under SFAS No. 133.  The embedded
derivatives  were  separated  from the underlying host instruments for financial
reporting  purposes  and  accounted  for  at fair value.  In connection with the
adoption of SFAS No. 133 as of January 1, 2001, the Company recorded a charge to
earnings  for  a  transition adjustment of $159,000 ($95,000, after-tax) for the
net  impact  of recording these embedded derivatives on the consolidated balance
sheet  at  fair  value.  Due to the insignificance of the amount, the transition
adjustment  is  not  reflected  as a cumulative effect of a change in accounting
principle  on the consolidated statement of income for the six months ended June
30,  2001  but  is instead recorded in net securities (losses) gains. During the
year  ended  December  31,  2001,  and before the closing of the CNB merger, the
Company  recorded  a $640,000 net loss related to the adjustment of the embedded
derivatives  to  fair  value.  As of December 31, 2001, the embedded derivatives
referred to above were completely written off as these derivatives had no value.
During  the  first  quarter  of  2002,  the  two  debt  securities with embedded
derivative  instruments from the recently acquired CNB Bank investment portfolio
were  sold at approximately their carrying value, as the securities did not meet
the  risk  profile  of  the  Company's  security  portfolio.

On  August  16,  2001,  the  FASB  issued  SFAS  No.  143  "Accounting for Asset
Retirement  Obligations."  Statement  143  addresses  financial  accounting  and
reporting  for  obligations  associated  with  retirement of tangible long-lived
assets  and the associated asset retirement costs.  Statement 143 applies to all
entities.  This  Statement  requires  that  the fair value of a liability for an
asset  retirement obligation be recognized in the period in which it is incurred
if  a  reasonable  estimate  of  fair  value  can be made.  The associated asset
retirement  costs  are  capitalized  as  part  of  the  carrying  amount  of the
long-lived  asset.  Under  this  Statement,  the liability is discounted and the
accretion  expense  is  recognized  using the credit-adjusted risk-free interest
rate  in  effect  when  the liability was initially recognized.  The FASB issued
this  Statement  to  provide  consistency  for  the  accounting and reporting of
liabilities associated with the retirement of tangible long-lived assets and the
associated  asset  retirement  costs.  The  Statement is effective for financial
statements  issued  for  fiscal  years  beginning  after June 15, 2002.  Earlier
application  is permitted.  The Company does not expect a material impact on its
consolidated  financial  statements  when  this  Statement  is  adopted.

On  October 3, 2001, The FASB issued SFAS No. 144 "Accounting for the Impairment
or  Disposal  of  Long-Lived  Assets".  This  Statement  addresses  financial
accounting  and  reporting  for the impairment or disposal of long-lived assets.
This  Statement  supersedes  SFAS  No.  121  "Accounting  for  the Impairment of
Long-Lived  Assets and for Long-Lived Assets to be Disposed Of."  This Statement


                                       12
<PAGE>
also  supersedes  the  accounting and reporting provisions of APB Opinion No. 30
"Reporting  the  Results  of  Operations-Reporting  the Effects of Disposal of a
Segment  of  a  Business,  and Extraordinary, Unusual and Infrequently Occurring
Events  and  Transactions."  The  changes  in  this  Statement improve financial
reporting  by  requiring that one accounting model be used for long-lived assets
to  be  disposed of by broadening the presentation of discontinued operations to
include  more  disposal transactions.  This Statement is effective for financial
statements  issued  for  fiscal  years  beginning  after  December 15, 2001. The
Company adopted the provisions of SFAS No. 144 effective January 1, 2002 and the
adoption  did  not  have  a  material  impact  on  its  consolidated  financial
statements.

In  April 2002, the FASB issued SFAS No. 145, "Rescission of FASB Statements No.
4,  44,  and 64, Amendment of FASB Statement No. 13, and Technical Corrections."
SFAS  No.  145  rescinds  SFAS  No.  4,  "Reporting  Gains  and  Losses  from
Extinguishment  of Debt," which required gains and losses from extinguishment of
debt to be aggregated and, if material, classified as an extraordinary item, net
of  related  income tax effect. Upon adoption of SFAS No. 145, companies will be
required  to  apply the criteria in Accounting Principles Board, or APB, Opinion
No. 30, "Reporting the Results of Operations - Reporting the Effects of Disposal
of  a  Segment  of  a  Business,  and  Extraordinary,  Unusual  and Infrequently
Occurring  Events  and  Transactions" in determining the classification of gains
and  losses  resulting from the extinguishment of debt. Upon adoption, companies
must  reclassify  prior  period  items  that  do not meet the extraordinary item
classification criteria in APB Opinion No. 30. Additionally, SFAS No. 145 amends
SFAS  No.  13,  "Accounting  for  Leases,"  to  require  that  certain  lease
modifications  that have economic effects similar to sale-leaseback transactions
be  accounted  for  in  the  same  manner  as  sale-leaseback  transactions. The
provisions of SFAS No. 145 related to the rescission of SFAS No. 4 are effective
for  fiscal years beginning after May 15, 2002. All other provisions of SFAS No.
145  are effective for transactions occurring and/or financial statements issued
on  or  after May 15, 2002. The implementation of SFAS No. 145 provisions, which
were  effective  May  15,  2002, did not have a material impact on our financial
condition  or  results  of  operations.  The  implementation  of  the  remaining
provisions  is not expected to have a material impact on our financial condition
or  results  of  operations.

In  July  2001,  the FASB issued SFAS No. 141, "Business Combinations," and SFAS
No.  142, "Goodwill and Other Intangible Assets." SFAS No. 141 requires that the
purchase  method  of  accounting be used for all business combinations initiated
after  June  30,  2001  as  well  as  all  purchase method business combinations
completed  after  June 30, 2001. SFAS No. 141 also specifies criteria intangible
assets  acquired  in  a  purchase  method  business  combination must meet to be
recognized and reported apart from goodwill. SFAS No. 142 requires that goodwill
and  intangible  assets with indefinite useful lives no longer be amortized, but
instead  tested  for  impairment  at  least  annually  in  accordance  with  the
provisions  of  SFAS No. 142.  SFAS No. 142 also requires that intangible assets
with  definite  useful lives be amortized over their respective estimated useful
lives  to  their  estimated  residual  values,  and  reviewed  for impairment in
accordance  with  SFAS  No.  144.

The  Company  adopted  the provisions of SFAS No. 141 effective July 1, 2001 and
adopted  the  provisions of SFAS No. 142 effective January 1, 2002. SFAS No. 141
requires  that  upon  adoption  of  SFAS  No. 142, that the Company evaluate its
existing  intangible  assets and goodwill that were acquired in a prior purchase
business  combination,  and  to make any necessary reclassifications in order to
conform  with  the  new  criteria  in  SFAS  No.  141 for recognition apart from


                                       13
<PAGE>
goodwill. Upon adoption of SFAS No. 142, the Company is required to reassess the
useful  lives  and residual values of all intangible assets acquired in purchase
business combinations, and make any necessary amortization period adjustments by
the  end  of the first interim period after adoption. In addition, to the extent
an  intangible  asset  is  identified  as  having an indefinite useful life, the
Company  is  required  to test the intangible asset for impairment in accordance
with  the provisions of Statement 142 within the first interim period.  Goodwill
is  required  to be tested for impairment as of the beginning of the fiscal year
in  which  the  Statement is adopted.  An entity has six months from the date it
adopted  SFAS  No.  142  to complete the first step of the transitional goodwill
impairment  test,  which is determining whether or not goodwill is impaired.  If
it  is determined that goodwill is impaired, the entity has until the end of the
year of adoption to complete step two, which is to measure the impairment.   Any
impairment  loss for either goodwill or intangible assets with indefinite useful
lives  is  to  be  measured  as  of  the  date of adoption and recognized as the
cumulative  effect  of  a  change  in  accounting principle in the first interim
period.

During  the  first quarter of 2002, upon the implementation of SFAS No. 142, the
Company performed a reevaluation of the remaining useful lives of all previously
recognized  intangible assets and found no adjustment necessary. The Company has
completed  its  transitional  goodwill  impairment  evaluation and has concluded
there  is  no  impairment losses from the adoption of SFAS No. 142.  The Company
has  not  identified  any  intangible  assets  with  indefinite  useful  lives.

Approximately  $1.5  million  of  unidentified  intangible  assets  from  branch
acquisitions  was written off and recorded as a component of the net gain on the
sale  of  a  branch  during  the  three  months  ended  March  31,  2002.

Pro forma net income and net income per share for the three and six months ended
June  30,  2001,  adjusted  to eliminate historical amortization of goodwill and
related  tax  effects,  are  as  follows:


                                                 Three  months
                                             ended  June  30,  2001
                                             ----------------------
                                     (in  thousands, except per share data)

Reported  net  income                               $6,570
Add:  goodwill  amortization                           179
                                                    ------
Pro  forma  net  income                             $6,749
                                                    ======

Reported  net  income  per  share:

Basic                                                $0.20
Diluted                                              $0.20

Pro  forma  net  income  per  share:

Basic                                                $0.20
Diluted                                              $0.20


                                       14
<PAGE>
                                                 Six  months
                                            ended  June  30,  2001
                                            ----------------------
                                     (in thousands, except per share data)

Reported  net  income                              $16,224
Add:  goodwill  amortization                           328
                                                   -------
Pro  forma  net  income                            $16,552
                                                   =======

Reported  net  income  per  share:

Basic                                                $0.50
Diluted                                              $0.49

Pro  forma  net  income  per  share:

Basic                                                $0.50
Diluted                                              $0.50

The  unidentified  intangible  assets  acquired  in the acquisition of a bank or
thrift  (including  acquisitions  of  branches),  where  the  fair  value of the
liabilities  assumed exceeds the fair value of the assets acquired, is currently
amortized  to expense under SFAS No. 72, "Accounting for Certain Acquisitions of
Banking  or Thrift Institutions." The FASB has undertaken a project to determine
whether  unidentifiable  intangible  assets  recorded  under  SFAS No. 72 should
continue  to  be  amortized  or,  instead,  be  accounted  for  using  the
non-amortization  approach  specified  for  goodwill  under  SFAS No. 142. In an
exposure  draft  of  a  proposed  statement  issued in May 2002, the FASB made a
preliminary  decision  that  any  unidentified  intangible asset recognized as a
result of applying SFAS No. 72 shall continue to be amortized unless both of the
following  criteria  are  met:  (1)  the transaction in which the unidentifiable
intangible  asset  arose  was a business combination as defined by SFAS No. 141,
and  (2)  at  the  date  the  transaction  was initially recorded, the depositor
relationship  intangible  was  recognized  separate  from  goodwill and has been
accounted  for separate from goodwill since that time. Based on this preliminary
guidance,  $35.6  million of the $36.4 million in unidentified intangible assets
from  branch  acquisitions recorded on the Company's books at June 30, 2002 will
continued  to  be  amoritized  when a final statement is issued by the FASB. The
FASB  plans  to  issue  a  final  Statement  by  the  end  of  2002.

The Company's intangible assets consist of the following:

                                      June 30,   December 31,   June 30,
                                        2002         2001         2001
                                     ----------  -------------  ---------
Core deposit intangibles               $5,433        5,433        5,314
  Unidentified intangible assets from
    branch acquisitions                36,404       37,952       37,279
Accumulated amortization               (9,860)      (8,173)      (6,438)
                                     ----------  -------------  ---------
Intangible assets, net                $31,977       35,212       36,155
                                     ==========  =============  =========


                                       15
<PAGE>
Estimated  annual  amortization  expense  of  intangible  assets,  absent  any
impairment or change in estimated useful lives is summarized as follows for each
of  the  next  five  years:

     (in  thousands)
     For  the  years  ending  December  31,
     2002  (remaining  six  months)               $1,587
     2003                                          3,095
     2004                                          2,752
     2005                                          2,752
     2006                                          2,752
     2007                                          2,752


NBT  BANCORP  INC.  AND  SUBSIDIARIES
Item  2  --  MANAGEMENT'S  DISCUSSION  AND  ANALYSIS  OF FINANCIAL CONDITION AND
RESULTS  OF  OPERATIONS

The  purpose  of  this  discussion  and analysis is to provide the reader with a
concise  description of the financial condition and results of operations of NBT
Bancorp  Inc. (Bancorp) and its wholly owned subsidiaries, NBT Bank, N.A. (NBT),
NBT Financial Services, Inc., and CNBF Capital Trust I (collectively referred to
herein  as  the  Company)  This  discussion will focus on Results of Operations,
Financial  Position, Capital Resources and Asset/Liability Management. Reference
should  be made to the Company's consolidated financial statements and footnotes
thereto  included  in  this Form 10-Q as well as to the Company's 2001 Form 10-K
for  an  understanding  of  the  following  discussion  and  analysis.

FORWARD  LOOKING  STATEMENTS

Certain  statements  in  this  filing and future filings by the Company with the
Securities  and  Exchange  Commission,  in the Company's press releases or other
public  or  shareholder  communications,  or  in  oral  statements made with the
approval of an authorized executive officer, contain forward-looking statements,
as defined in the Private Securities Litigation Reform Act. These statements may
be  identified  by the use of phrases such as "anticipate," "believe," "expect,"
"forecasts,"  "projects,"  or  other  similar  terms.   There  are  a  number of
factors,  many of which are beyond the Company's control that could cause actual
results  to  differ  materially  from  those contemplated by the forward looking
statements.  Factors  that  may  cause  actual results to differ materially from
those contemplated by such forward-looking statements include, among others, the
following  possibilities:  (1)  competitive pressures among depository and other
financial  institutions  may  increase  significantly; (2) revenues may be lower
than  expected; (3) changes in the interest rate environment may reduce interest
margins;  (4)  general economic conditions, either nationally or regionally, may
be  less  favorable  than  expected,  resulting  in,  among  other  things,  a
deterioration  in  credit  quality  and/or  a  reduced  demand  for  credit; (5)
legislative  or  regulatory  changes, including changes in accounting standards,
may  adversely  affect the businesses in which the Company is engaged; (6) costs
or  difficulties related to the integration of the businesses of the Company and
its  merger  partners  may  be  greater than expected; (7) expected cost savings
associated  with  recent  mergers  and acquisitions may not be fully realized or
realized  within the expected time frames; (8) deposit attrition, customer loss,
or  revenue  loss  following recent mergers and acquisitions may be greater than


                                       16
<PAGE>
expected;  (9)  competitors  may  have  greater  financial resources and develop
products  that  enable  such  competitors  to compete more successfully than the
Company;  and  (10)  adverse changes may occur in the securities markets or with
respect  to  inflation.

The  Company  wishes  to  caution  readers  not  to  place undue reliance on any
forward-looking  statements, which speak only as of the date made, and to advise
readers  that various factors, including those described above, could affect the
Company's  financial performance and could cause the Company's actual results or
circumstances  for future periods to differ materially from those anticipated or
projected.

Unless  required  by  law,  the  Company  does  not  undertake, and specifically
disclaims  any  obligations to publicly release the result of any revisions that
may  be  made  to  any  forward-looking  statements to reflect statements to the
occurrence  of  anticipated  or  unanticipated events or circumstances after the
date  of  such  statements.


                                       17
<PAGE>

OVERVIEW

The  following  table  summarizes  net  income  for  the  periods  indicated  in
accordance with accounting principles generally accepted in the United States of
America  (GAAP) as well as on a core basis.  Core net income, as used throughout
this  discussion,  excludes  items  that  the  Company considers nonoperating in
nature  and  include  net securities losses and gains, gain on sale of a branch,
gain  on  sale  of  a  building,  certain deposit overdraft write-offs, and loan
valuation  gains  and  losses:

<TABLE>
<CAPTION>

THREE MONTHS ENDED JUNE 30, 2002 (IN 000'S EXCEPT PER SHARE DATA)

                                              Estimated                  Diluted
                                   Pre-Tax    Tax Effect    After Tax      EPS
<S>                                <C>        <C>           <C>          <C>
GAAP net income                    $ 16,108   $     5,261   $   10,847   $   0.32
                                   ---------  ------------  -----------  ---------
Net security gains                      (69)          (27)         (42)
Loan valuation losses                    18             8           10
                                   ---------  ------------  -----------
                                        (51)         (19)          (32)
                                   ---------  ------------  -----------
Core net income                    $ 16,057   $     5,242   $   10,815
                                   =========  ============  ===========
</TABLE>

<TABLE>
<CAPTION>

THREE MONTHS ENDED JUNE 30, 2001 (IN 000'S EXCEPT PER SHARE DATA)

                                              Estimated                  Diluted
                                   Pre-Tax    Tax Effect    After Tax      EPS
<S>                                <C>        <C>           <C>          <C>
GAAP net income                    $  9,182   $     2,612   $    6,570   $   0.20
                                   ---------  ------------  -----------  ---------
Net security gains                     (227)          (91)        (136)
Loan valuation gains                     (6)           (2)          (4)
                                   ---------  ------------  -----------
                                       (233)          (93)        (140)
                                   ---------  ------------  -----------
Core net income                    $  8,949    $    2,519   $    6,430
                                   =========  ============  ===========
</TABLE>

<TABLE>
<CAPTION>

SIX MONTHS ENDED JUNE 30, 2002 (IN 000'S EXCEPT PER SHARE DATA)

                                              Estimated                 Diluted
                                   Pre-Tax    Tax Effect    After Tax     EPS
<S>                                <C>        <C>           <C>          <C>
GAAP net income                    $ 32,006   $    10,507   $   21,499   $   0.64
                                   ---------  ------------  -----------  --------
Net security losses                     433           173          260
Gain on sale of a branch, net          (220)          (88)        (132)
Loan valuation losses                    50            20           30
                                   ---------  ------------  -----------
                                        263           105          158
                                   ---------  ------------  -----------
Core net income                    $ 32,269   $    10,612   $   21,657
                                   =========  ============  ===========
</TABLE>

<TABLE>
<CAPTION>

SIX MONTHS ENDED JUNE 30, 2001 (IN 000'S EXCEPT PER SHARE DATA)

                                              Estimated                 Diluted
                                   Pre-Tax    Tax Effect    After Tax     EPS
<S>                                <C>        <C>           <C>          <C>
GAAP net income                    $ 23,377   $     7,153   $   16,224      0.49
                                   ---------  ------------  -----------  --------
Gain on sale of a building           (1,367)         (545)        (822)
Deposit overdraft write-offs          2,125           847        1,278
Net security gains                   (1,250)         (499)        (751)
Loan valuation gains                    (26)          (10)         (16)
                                   ---------  ------------  -----------
                                       (518)         (207)        (311)
                                   ---------  ------------  -----------
Core net income                    $ 22,859   $     6,946   $   15,913
                                   =========  ============  ===========
</TABLE>


                                       18
<PAGE>
Net  securities  gains  and  loan  valuation  gains  and losses had no impact on
diluted  earnings  per  share  for  the  three  months  ended  June 30, 2002 and
decreased  diluted  earnings per share by $0.01 for the same period in 2001. Net
securities  losses,  gain  on  sale  of a branch, net, and loan valuation losses
increased  diluted earnings per share by $0.01 for the six months ended June 30,
2002.  Gain  on sale of a building, deposit overdraft write-offs, net securities
gains,  and  loan valuation losses decreased diluted earnings per share by $0.01
for  the  six  months  ended  June  30,  2001.

The  Company  earned  net  income  of  $10.8 million ($0.32 diluted earnings per
share)  for  the three months ended June 30, 2002 compared to net income of $6.6
million ($0.20 diluted earnings per share) for the same period in 2001. Core net
income  was  $10.8  million for the three months ended June 30, 2002 compared to
core  net  income  of  $6.4  million for the same period in 2001. The quarter to
quarter  increase  in  core  net income from 2001 to 2002 was due primarily to a
decrease  in  the  provision  for  loan  and  lease  losses  of $4.8 million and
increases  in net interest income of $3.6 million and noninterest income of $0.8
million,  offset  by increases in noninterest expense of $2.0 million and income
tax  expense  of  $2.7  million.

The  Company  earned  net  income  of  $21.5 million ($0.64 diluted earnings per
share)  for  the  six months ended June 30, 2002 compared to net income of $16.2
million ($0.49 diluted earnings per share) for the same period in 2001. Core net
income was $21.7 million for the six months ended June 30, 2002 compared to core
net  income  of  $15.9 million for the same period in 2001. The increase in core
net  income  from  2001  to  2002 was due primarily to increases in net interest
income  of $7.5 million and noninterest income of $1.7 million and a decrease in
the  provision for loan and lease losses of $4.0 million, offset by increases in
noninterest  expense  of  $3.8  million  and income tax expense of $3.7 million.

The  decrease in the provision for loan and lease losses resulted primarily from
an improvement in loan quality ratios and lower net charge-offs in 2002 compared
to  2001.  The  increase  in  net  interest  income  resulted primarily from the
continued  downward  re-pricing  of interest-bearing liabilities (primarily time
deposits)  at  a  faster  rate  than  earning assets. The Company's net interest
margin  for  the  three months ended June 30, 2002 was 4.48%, up 38 basis points
from a net interest margin of 4.10% for the same period in 2001. The increase in
core  noninterest  income  was due primarily to an increase in broker/dealer and
insurance fees. The increase in core noninterest expense resulted primarily from
increases  in  salaries  and  employee  benefits,  expenses associated with loan
collection  and  other  real estate owned, professional fees and other operating
expenses. The increase in income tax expense was due primarily to a $9.4 million
increase  in  net  income  before  taxes for the six months ended June 30, 2002.


                                       19
<PAGE>
Table  1  depicts several annualized measurements of performance using both GAAP
net income and core net income. Returns on average assets and equity measure how
effectively  an  entity  utilizes its total resources and capital, respectively.
Both  the  return  on  average  assets  and  the return on average equity ratios
increased  for  the quarter and year-to-date compared to the same periods in the
previous  year.

Net  interest  margin,  net  federal  taxable  equivalent  (FTE) interest income
divided  by average interest-earning assets, is a measure of an entity's ability
to  utilize  its  earning  assets  in  relation to the cost of funding. Interest
income  for  tax-exempt securities and loans is adjusted to a taxable equivalent
basis  using  the  statutory  Federal  income  tax  rate  of  35%.

<TABLE>
<CAPTION>

TABLE 1
PERFORMANCE MEASUREMENTS
-------------------------------------------------------------
                                  First     SECOND     SIX
                                 Quarter   QUARTER   MONTHS
-------------------------------------------------------------
<S>                              <C>       <C>       <C>
2002
Return on average assets (ROAA)     1.21%     1.19%    1.20%
ROAA based on core net income       1.23%     1.19%    1.21%
Return on average equity (ROAE)    15.98%    15.89%   15.91%
ROAE based on core net income      16.26%    15.84%   16.03%
=============================================================
2001
Net interest margin                 4.54%     4.48%    4.51%
ROAA                                1.10%     0.73%    0.91%
ROAA based on core net income       1.08%     0.71%    0.90%
ROAE                               14.42%     9.42%   11.87%
ROAE based on core net income      14.16%     9.22%   11.64%
Net interest margin                 4.06%     4.10%    4.08%
=============================================================
</TABLE>

                                       20
<PAGE>
TABLE  2
AVERAGE  BALANCES  AND  NET  INTEREST  INCOME
Table  2 presents the Company's condensed consolidated average balance sheet, an
analysis  of  interest  income/expense  and  average  yield/rate  for each major
category  of  earning  assets  and  interest  bearing  liabilities  on a taxable
equivalent  basis.

<TABLE>
<CAPTION>
                                                               Three months ended June 30,
                                                           2002                             2001
                                              AVERAGE                YIELD/    Average                Yield/
(dollars in thousands)                        BALANCE    INTEREST    RATES     Balance    Interest    Rates
-------------------------------------------------------------------------------------------------------------
<S>                                          <C>         <C>        <C>       <C>         <C>        <C>
ASSETS
Short-term interest bearing accounts         $   11,806  $      89     3.02%  $   10,136  $     126     4.99%
Trading securities                                  205          2     3.91        9,315        300    12.92
Securities available for sale (2)               964,555     15,142     6.30      933,886     15,521     6.67
Securities held to maturity (2)                  98,040      1,531     6.26      100,401      1,683     6.72
Investment in FRB and FHLB Banks                 20,965        226     4.32       22,767        374     6.59
Loans and leases (1)                          2,317,838     41,575     7.19    2,293,641     47,169     8.25
                                             ----------  ---------            ----------  ---------
 Total interest earning assets                3,413,409     58,565     6.88    3,370,146     65,173     7.76
                                                         ---------                        ---------
Other assets                                    230,110                          239,258
                                             ----------                       ----------
TOTAL ASSETS                                 $3,643,519                       $3,609,404
                                             ----------                       ----------

LIABILITIES AND STOCKHOLDERS' EQUITY
Money market deposit accounts                $  271,762      1,086     1.60   $  259,970      1,950     3.01
NOW deposit accounts                            386,248        914     0.95      337,468      1,083     1.29
Savings deposits                                479,811      1,809     1.51      417,206      2,397     2.30
Time deposits                                 1,357,057     12,456     3.68    1,501,767     20,520     5.48
                                             ----------  ---------            ----------  ---------
  Total interest bearing deposits             2,494,878     16,265     2.61    2,516,411     25,950     4.14
Short-term borrowings                            75,672        287     1.52      130,239      1,410     4.34
Long-term debt                                  329,375      3,856     4.70      250,466      3,336     5.34
                                             ----------  ---------            ----------  ---------
  Total interest bearing liabilities          2,899,925     20,408     2.82%   2,897,116     30,696     4.25%
                                                         ---------                        ---------
Demand deposits                                 412,729                          365,731
Other liabilities (3)                            57,003                           66,820
Stockholders' equity                            273,862                          279,737
                                             ----------                       ----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY   $3,643,519                       $3,609,404
                                             ----------                       ----------
  NET INTEREST INCOME                                    $  38,157                        $  34,477
                                                         ---------                        ---------
INTEREST RATE SPREAD                                                   4.06%                            3.51%
                                                                    --------                         --------
NET INTEREST MARGIN                                                    4.48%                            4.10%
                                                                    --------                         --------
Taxable equivalent adjustment                                       $ 1,075                          $   972
                                                                    --------                         --------
</TABLE>

(1)  For  purposes  of  these computations, nonaccrual loans are included in the
     average  loan  and  lease  balances  outstanding.
(2)  Securities  are  shown  at  average  amortized  cost.
(3)  Included  in other liabilities is $17.0 million in the Company's guaranteed
     preferred beneficial interests in Company's junior subordinated debentures.


                                       21
<PAGE>
<TABLE>
<CAPTION>
                                                                Six months ended June 30,
                                                2002       2001
                                              AVERAGE               YIELD/    Average               Yield/
(dollars in thousands)                        BALANCE    INTEREST    RATES    Balance    Interest    Rates
-----------------------------------------------------------------------------------------------------------
<S>                                          <C>         <C>        <C>      <C>         <C>        <C>
ASSETS
Short-term interest bearing accounts         $   12,674  $     193    3.07%  $   12,754  $     337    5.33%
Trading securities                                  166          4    4.86        6,913        345   10.06
Securities available for sale (2)               926,713     29,249    6.36      928,527     31,475    6.84
Securities held to maturity (2)                 100,670      3,157    6.32      102,226      3,425    6.76
Investment in FRB and FHLB Banks                 21,004        402    3.86       26,261        864    6.63
Loans and leases (1)                          2,319,971     83,978    7.30    2,269,654     95,532    8.49
                                             ----------  ---------           ----------  ---------
 Total interest earning assets                3,381,198    116,983    6.98    3,346,335    131,978    7.95
                                                         ---------                       ---------
Other assets                                    232,084                         236,180
                                             ----------                      ----------
TOTAL ASSETS                                 $3,613,282                      $3,582,515
                                             ----------                      ----------

LIABILITIES AND STOCKHOLDERS' EQUITY
Money market deposit accounts                $  272,602      2,121    1.57   $  254,838      4,261    3.37
NOW deposit accounts                            382,498      1,828    0.96      334,636      2,622    1.58
Savings deposits                                469,895      3,542    1.52      408,470      4,908    2.42
Time deposits                                 1,352,431     25,765    3.84    1,495,328     42,364    5.71
                                             ----------  ---------           ----------  ---------
  Total interest bearing deposits             2,477,426     33,256    2.71    2,493,272     54,155    4.38
Short-term borrowings                            81,136        635    1.58      138,873      3,429    4.98
Long-term debt                                  318,935      7,494    4.74      245,419      6,633    5.45
                                             ----------  ---------           ----------  ---------
  Total interest bearing liabilities          2,877,497     41,385    2.90%   2,877,564     64,217    4.50%
                                                         ---------                       ---------
Demand deposits                                 409,086                         359,099
Other liabilities (3)                            54,209                          70,174
Stockholders' equity                            272,490                         275,678
                                             ----------                      ----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY   $3,613,282                      $3,582,515
                                             ----------                      ----------
  NET INTEREST INCOME                                    $  75,598                       $  67,761
                                                         ---------                       ---------
INTEREST RATE SPREAD                                                  4.08%                           3.45%
                                                                    -------                         -------
NET INTEREST MARGIN                                                   4.51%                           4.08%
                                                                    -------                         -------
Taxable equivalent adjustment                $    2,171                                  $   1,877
                                             ----------                                  ---------
</TABLE>

(1)  For  purposes  of  these computations, nonaccrual loans are included in the
     average  loan  and  lease  balances  outstanding.
(2)  Securities  are  shown  at  average  amortized  cost.
(3)  Included  in other liabilities is $17.0 million in the Company's guaranteed
     preferred beneficial interests in Company's junior subordinated debentures.


                                       22
<PAGE>
Table  3  presents  the  changes  in  interest  income, interest expense and net
interest  income  due  to changes in volume and changes in rate.  The net change
attributable  to  the  combined  impact of volume and rate has been allocated to
each  in  proportion  to  the  absolute  dollar  amounts  of  change.

<TABLE>
<CAPTION>

TABLE  3
ANALYSIS  OF  CHANGES  IN  TAXABLE  EQUIVALENT  NET  INTEREST  INCOME


Three months ended June 30,
--------------------------------------------------------------------------------
                                                    INCREASE (DECREASE)
                                                       2002 OVER 2001
--------------------------------------------------------------------------------
(in thousands)                              VOLUME          RATE        TOTAL
--------------------------------------------------------------------------------
<S>                                    <C>               <C>          <C>
Short-term interest bearing accounts   $            18   $      (55)  $    (37)
Trading securities                                (174)        (124)      (298)
Securities available for sale                      499         (878)      (379)
Securities held to maturity                        (39)        (113)      (152)
Investment in FRB and FHLB Banks                   (28)        (120)      (148)
Loans and leases                                   493       (6,087)    (5,594)
--------------------------------------------------------------------------------
Total interest income                              827       (7,435)    (6,608)
--------------------------------------------------------------------------------

Money market deposit accounts                       85         (949)      (864)
NOW deposit accounts                               142         (311)      (169)
Savings deposits                                   322         (910)      (588)
Time deposits                                   (1,830)      (6,234)    (8,064)
Short-term borrowings                             (440)        (683)    (1,123)
Long-term debt                                     959         (439)       520
--------------------------------------------------------------------------------
Total interest expense                              30      (10,318)   (10,288)
--------------------------------------------------------------------------------
CHANGE IN FTE NET INTEREST INCOME      $           797   $    2,883   $  3,680
================================================================================


Six months ended June 30,
--------------------------------------------------------------------------------
                                                INCREASE (DECREASE)
                                                    2002 OVER 2001
--------------------------------------------------------------------------------
(in thousands)                         VOLUME            RATE         TOTAL
--------------------------------------------------------------------------------

Short-term interest bearing accounts   $            (2)  $     (142)  $   (144)
Trading securities                                (223)        (118)      (341)
Securities available for sale                      (61)      (2,165)    (2,226)
Securities held to maturity                        (51)        (217)      (268)
Investment in FRB and FHLB Banks                  (150)        (312)      (462)
Loans and leases                                 2,077      (13,631)   (11,554)
--------------------------------------------------------------------------------
Total interest income                            1,362      (16,357)   (14,995)
--------------------------------------------------------------------------------

Money market deposit accounts                      279       (2,419)    (2,140)
NOW deposit accounts                               336       (1,130)      (794)
Savings deposits                                   659       (2,025)    (1,366)
Time deposits                                   (3,749)     (12,850)   (16,599)
Short-term borrowings                           (1,057)      (1,737)    (2,794)
Long-term debt                                   1,806         (945)       861
--------------------------------------------------------------------------------
Total interest expense                              (1)     (22,831)   (22,832)
--------------------------------------------------------------------------------
CHANGE IN FTE NET INTEREST INCOME      $         1,363       $6,474    $ 7,837
================================================================================
</TABLE>


                                       23
<PAGE>
RESULTS  OF  OPERATIONS

THREE  MONTHS  ENDED  JUNE 30, 2002 COMPARED TO THREE MONTHS ENDED JUNE 30, 2001

Net  Interest  Income
---------------------

Net interest income is the difference between interest income on earning assets,
primarily  loans  and  securities,  and  interest  expense  on  interest-bearing
liabilities,  primarily deposits and borrowings. Net interest income is affected
by  the interest rate spread, the difference between the yield on earning assets
and  cost of interest-bearing liabilities, as well as the volumes of such assets
and  liabilities. Net interest income is one of the major determining factors in
a financial institution's performance as it is the principal source of earnings.
Table  2  represents  an  analysis  of  net interest income on a federal taxable
equivalent  basis.

Federal  taxable  equivalent  (FTE)  net  interest income increased $3.7 million
during the three months ended June 30, 2002 compared to the same period of 2001.
The increase in FTE net interest income resulted primarily from interest-bearing
liabilities  re-pricing  downward at a faster rate than earning assets. The rate
paid on interest-bearing liabilities decreased 143 basis points ("bp"), to 2.82%
for  the  three  months  ended  June 30, 2002, from 4.25% for the same period in
2001.  Meanwhile,  the yield on earning assets decreased 88 bp, to 6.88% for the
three  months  ended  June  30,  2002,  from  7.76% for the same period in 2001.

Total  FTE  interest  income  for the three months ended June 30, 2002 decreased
$6.6  million  compared  to  the same period in 2001, a result of the previously
mentioned  decrease  in  yield  on  earning assets. The decrease in the yield on
earning  assets  can  be primarily attributed to the falling rate environment in
2001.  During  the  same  time  period,  total  interest expense decreased $10.3
million,  primarily  the result of the falling rate environment mentioned above,
as  well  as  an  improvement  in  the  mix  of  the  Company's interest-bearing
liabilities.  Time  deposits, the most significant component of interest-bearing
liabilities,  decreased  to  46.8% of interest-bearing liabilities for the three
months  ended  June  30, 2002 from 51.8% for the same period in 2001. Offsetting
this  decrease in the interest-bearing liabilities mix, was an increase in lower
cost  NOW,  MMDA, and Savings deposits, to 39.2% of interest-bearing liabilities
for  the three months ended June30, 2002 from 35.0% for the same period in 2001.
Total  borrowings  remained  relatively unchanged, comprising 14.0% and 13.2% of
interest-bearing  liabilities for the three months ended June 30, 2002 and 2001,
respectively.

Another  important  performance  measurement  of  net interest income is the net
interest  margin.  Net  interest  margin increased to 4.48% for the three months
ended  June  30,  2002,  up  from  4.10%  for the comparable period in 2001. The
increase  in  the  net  interest  margin  can  be  primarily  attributed  to the
previously mentioned increase in the interest rate spread driven by the decrease
in  the  cost of interest bearing liabilities exceeding the decrease in yield on
earning assets. Additionally, the net interest margin improved from the increase
in  average  noninterest-bearing  demand deposits, which increased 12.9% from an
average  of  $365.7  million  for the three months ended June 30, 2001 to $412.7
million  for  the same period in 2002. For the three months ended June 30, 2002,
average  noninterest-bearing  demand  deposits  comprised 12.5% of total average
interest-bearing  liabilities  and  noninterest-bearing demand deposits, up from
11.2%  for  the  same  period  in  2001.


                                       24
<PAGE>
Noninterest  Income
-------------------

Noninterest  income  is  a  significant source of revenue for the Company and an
important  factor  in  the Company's results of operations.  The following table
sets  forth  information  by  category  of  noninterest  income  for the periods
indicated:


                               THREE MONTHS ENDED JUNE 30,
                                       2002     2001
                                      -------  ------
(in thousands)
Service charges on deposit accounts   $3,239   $3,226
Broker/dealer and insurance fees       1,483      900
Trust                                  1,154    1,070
Other                                  2,377    2,274
                                      -------  ------
Total core noninterest income          8,253    7,470
Net securities gains                      69      227
Loan valuation (losses) gains            (18)       6
                                      -------  ------

Total                                 $8,304   $7,703
                                      ======   ======

Core noninterest income for the three months ended June 30, 2002, which excludes
net  securities  gains and losses and loan valuation gains and losses, increased
10.5% to $8.3 million from $7.5 million for the same period in 2001. The primary
driver  of  this  increase was the increase of $0.6 million in broker/dealer and
insurance  fees.  The  increase  in  broker/dealer  and  insurance fees resulted
primarily  from  one  of  the  Company's  financial services providers, Colonial
Financial  Services,  Inc.,  which began operations in June 2001, resulting in a
full  quarter  of  revenue  of  $0.4  million  in  the  second  quarter of 2002.

Included  in  noninterest income were net securities gains totaling $0.1 million
for the three months ended June 30, 2002. During the three month period end June
30,  2002,  the  Company sold $5.4 million of asset backed securities previously
held  by  CNB  Financial  Corp. (CNB), which the Company acquired on November 8,
2001,  containing  a higher level of credit risk due to a rapid deterioration in
the  financial  condition  of  the  underlying  collateral  during  the quarter,
resulting  in  a  $4.5 million loss. Offsetting these losses, were gains of $4.6
million  resulting  primarily  from  the sale of various securities amounting to
$130.5  million. The securities sold were considered to generally contain a high
risk  of rapid pre-payments in a falling rate environment. The proceeds from the
sale  of  these  securities  were  invested  in short duration, stable cash flow
producing mortgage-backed securities and short callable agency securities. These
transactions enabled the Company to improve the credit quality and stabilize the
cash  flow  stream  of  its  investment  portfolio.

Noninterest  Expense
--------------------

Noninterest  expenses  are  also an important factor in the Company's results of
operations.  The  following table sets forth the major components of noninterest
expense  for  the  periods  indicated:


                                       25
<PAGE>

                                         THREE MONTHS ENDED JUNE 30,
                                               2002     2001
                                              -------  -------
(in thousands)
Salaries and employee benefits                $12,649  $11,569
Occupancy                                       2,096    2,179
Equipment                                       1,818    1,700
Data processing and communications              2,598    2,348
Professional fees and outside services          1,782    1,480
Office supplies and postage                     1,227    1,282
Amortization of intangible assets                 830    1,012
Capital securities                                230      341
Loan collection and other real estate owned       781      483
Other                                           3,175    2,760
                                              -------  -------
Total noninterest expense                     $27,186  $25,154
                                              =======  =======


     Noninterest expense increased $2.0 million or 8.1% to $27.2 million for the
three months ended June 30, 2002 from $25.2 million for the same period in 2001.
Salaries  and employee benefits increased $1.1 million or 9.3%, to $12.6 million
for  the three months ended June 30, 2002 from $11.6 million for the same period
in  2001. The increase in salaries and employee benefits was due primarily to an
increase  in  incentive  compensation  of  $0.9 million, resulting from improved
operating performance. Other expense increased $0.4 million, to $3.2 million for
the  three  months  ended June 30, 2002 from $2.8 million for the same period in
2001.  There  were  no significant increases for the various items that comprise
other  expense.  Professional  fees and costs of outside services increased $0.3
million,  to  $1.8  million  for  the three months ended June 30, 2002 from $1.5
million for the same period in 2001. The increase in professional fees and costs
of  outside  services  resulted mainly from professional fees for legal matters.

Loan  collection and other real estate owned expenses increased $0.3 million, to
$0.8  million for the three months ended June 30, 2002 from $0.5 million for the
same  period  in  2001.  This  increase  is  due  primarily  to  the increase in
nonperforming  loans  during  2001,  which resulted in an increase in collection
activity  and  foreclosure  costs  during  the three months ended June 30, 2002.
Given  the  increase  in nonperforming loans in 2001, the Company anticipates an
increase  in costs associated with loan collection and foreclosure activity when
compared  to  historical  amounts.

Amortization  of  intangible  assets decreased $0.2 million, to $0.8 million for
the  three  months  ended June 30, 2002 from $1.0 million for the same period in
2001.  The  decrease  in  amortization  of  intangible  assets resulted from the
adoption  of  SFAS No. 142. Had the requirements of SFAS No. 142 been applied to
the 2001 period, amortization of intangible assets would have been $0.8 million.


                                       26
<PAGE>
Income  Taxes
-------------

Income tax expense for the three months ended June 30, 2002 was $5.3 million for
an effective tax rate of 32.7%, compared to $2.6 million, or 28.4%, for the same
period  in  2001.  The lower tax rate in the 2001 period resulted primarily from
lower  net income before tax when compared to the 2002 period, which resulted in
a  greater  benefit  from  favorable  permanent  differences.

SIX  MONTHS  ENDED  JUNE  30,  2002  COMPARED  TO SIX MONTHS ENDED JUNE 30, 2001

Net  Interest  Income
---------------------

Net  interest  income on a federal taxable equivalent basis (FTE) increased $7.8
million  to  $75.6  million for 2002 compared to $67.8 million for 2001. The net
interest  margin  improved  43  bp  from 4.08% to 4.51%. The increase in FTE net
interest  income resulted primarily from interest-bearing liabilities re-pricing
downward at a faster rate than earning assets. The rate paid on interest-bearing
liabilities decreased 160 basis points ("bp"), to 2.90% for 2002, from 4.50% for
2001. Meanwhile, the yield on earning assets decreased 97 bp, to 6.98% for 2002,
from  7.95%  for  2001.

Total  FTE  interest income for 2002 decreased $15.0 million compared to 2001, a
result  of  the previously mentioned decrease in yield on earning assets. During
the  same time period, total interest expense decreased $22.8 million, primarily
the  result  of  the  falling  rate  environment  mentioned above, as well as an
improvement  in  the  mix  of  the  Company's interest-bearing liabilities. Time
deposits,  the  most  significant  component  of  interest-bearing  liabilities,
decreased to 47.0% of interest-bearing liabilities for 2002 from 52.0% for 2001.
Offsetting  this  decrease  in  the  interest-bearing  liabilities  mix,  was an
increase  in  lower  cost  NOW,  MMDA,  and  Savings  deposits,  to  39.1%  of
interest-bearing  liabilities  for  2002  from  34.7% for 2001. Total borrowings
remained  relatively  unchanged,  comprising 13.9% and 13.3% of interest-bearing
liabilities  for  2002  and  2001,  respectively.

Noninterest  Income
-------------------
The following table sets forth information by category of noninterest income for
the  periods  indicated:


                                 SIX MONTHS ENDED JUNE 30,
                                        2002     2001
                                      --------  -------
(in thousands)
Service charges on deposit accounts    $6,289   $5,997
Broker/dealer and insurance fees        2,978     1,923
Trust                                   2,174     2,116
Other                                   5,020     4,701
                                      --------  -------
Total core noninterest income          16,461    14,737

Net securities (losses) gains            (433)    1,250
Loan valuation (losses) gains             (50)       26
Gain on sale of a branch, net             220         -
Gain on sale of a building                  -     1,367
                                      --------  -------

Total                                 $16,198   $17,380
                                      ========  =======


                                       27
<PAGE>
Core  noninterest  income  increased  $1.7 million or 11.7% to $16.5 million for
2002 from $14.7 million for the same period in 2001. Broker/dealer and insurance
fees  increased  $1.1  million  primarily  from  one  of the Company's financial
services providers, Colonial Financial Services, Inc., which began operations in
June  2001,  resulting  in  six months of revenue totaling $0.8 million in 2002.
Service  charges on deposit accounts in 2002 increased $0.3 million or 4.9% over
the  same  period  a  year  earlier as a result of the Company's expanded branch
network.  Other income increased $0.3 million in 2002 when compared to 2001, due
mainly  to  an  increase  in  other  banking  fees.

Noninterest  Expense
--------------------
The  following  table  sets forth information by category of noninterest expense
for  the  periods  indicated:


                                        SIX MONTHS ENDED JUNE 30,
                                               2002     2001
                                              -------  -------
(in thousands)
Salaries and employee benefits                $25,305  $23,302
Occupancy                                       4,265    4,466
Equipment                                       3,532    3,433
Data processing and communications              5,163    5,004
Professional fees and outside services          3,397    2,600
Office supplies and postage                     2,124    2,361
Amortization of intangible assets               1,690    1,976
Capital securities                                446      745
Loan collection and other real estate owned     1,725      807
Other                                           5,869    4,985
                                              -------  -------
Total core noninterest expense                 53,516   49,679
                                              -------  -------
Certain deposit overdraft write-offs                -    2,125
Total noninterest expense                     $53,516  $51,804
                                              =======  =======

     Core  noninterest  expense,  which  excludes  certain  deposit  overdraft
write-offs,  increased $3.8 million or 7.7% to $53.5 million for 2002 from $49.7
million for 2001. Salaries and employee benefits increased $2.0 million or 8.6%,
to  $25.3 million for 2002 from $23.3 million for 2001. The increase in salaries
and  employee  benefits was due primarily to increases in incentive compensation
of  $1.2  million, employee medical costs of $0.3 million and retirement expense
of  $0.3 million. Professional fees and costs of outside services increased $0.8
million,  to  $3.4  million for 2002 from $2.6 million for 2001. The increase in
professional  fees  and  costs  of  outside  services  resulted  mainly  from
professional  fees  for  legal  matters.

Loan  collection and other real estate owned expenses increased $0.9 million, to
$1.7 million for 2002 from $0.8 million for 2001. This increase is due primarily
to  the  increase  in  nonperforming  loans  during  2001,  which resulted in an
increase in collection activity and foreclosure costs during 2002. Other expense
increased $0.9 million, to $5.9 million for 2002 from $5.0 million for 2001. The
increase  in  other  expense  was  due to a $0.3 million of expense related to a
noncompetition agreement, an increase in marketing expense of $0.3 million and a
$0.2  million  charge  related  to  a  probable  sales  tax  assessment.


                                       28
<PAGE>
Occupancy  and  office  supplies  &  postage experienced decreases for 2002 when
compared  to 2001. These decreases resulted primarily from cost savings realized
from  recent  acquisitions  completed  during 2001 and 2000. Data processing and
equipment  experienced  increases  for 2002 when compared to 2001 as a result of
costs  related  to  enhancements made to the data processing capabilities of the
Company.

Amortization  of  intangible  assets decreased $0.3 million, to $1.7 million for
2002  from  $2.0  million  for  2001. The decrease in amortization of intangible
assets  resulted from the adoption of SFAS No. 142. Had the requirements of SFAS
No.  142 been applied to 2001, amortization of intangible assets would have been
$1.6 million. Capital securities expense decreased $0.3 million, to $0.4 million
for  2002 from $0.7 million for 2001. The decrease in capital securities expense
is  a  result  of  the  Company's  guaranteed  preferred beneficial interests in
Company's  junior subordinated debentures, which are tied to a variable interest
rate  index  (3-month  LIBOR  plus 275 bp) that was much lower for the first six
months  of  2002  than  the  same  period  in  2001.

Income  Taxes
-------------

Income  tax  expense  for  2002  was  $10.5 million for an effective tax rate of
32.8%,  compared  to $7.2 million, or 30.6%, for 2001. The lower tax rate in the
2001 period resulted primarily from lower net income before tax when compared to
the  2002  period,  which resulted in a greater benefit from favorable permanent
differences.


ANALYSIS  OF  FINANCIAL  CONDITION

Loans  and  Leases
------------------

A  summary  of  loans and leases, net of deferred fees and origination costs, by
category  for  the  periods  indicated  follows:


                                        June 30,   December 31,    June,30
                                          2002         2001          2001
                                       -------------------------------------
                                                 (in thousands)
Commercial and commercial mortgages*   $1,059,046   $1,053,416    $1,066,356
Residential real estate mortgages         612,018      594,206       549,915
Consumer                                  592,218      613,631       645,725
Leases                                     67,274       72,048        81,681
Other loans                                 5,485        6,335         9,398
                                       -------------------------------------
Total loans and leases                 $2,336,041   $2,339,636    $2,353,075
                                       =====================================

*  -  Includes  agricultural  loans

Total  loans and leases were $2.3 billion, or 63.5% of assets, at June 30, 2002,
compared  to  $2.3 billion, or 64.3%, at December 31, 2001, and $2.4 billion, or
63.6%,  at  June 30, 2001. Total loans and leases decreased $3.6 million at June
30,  2002 when compared to December 31, 2001. The slight decrease in total loans
and  leases  during the year resulted mainly from the Company's on going efforts
to  improve  the  credit administration functions at its recently acquired banks
and  continued  focus  on  resolving  troubled  loans.

                                       29
<PAGE>
Securities
----------

Average total securities were $2.6 million less for the first six months of 2002
than  for  the same period of 2001. Decreases in securities held to maturity and
trading securities from maturities and sales were reinvested into the securities
available  for  sale  portfolio.  During  the  first  six  months  of  2002, the
securities  portfolio  represented  30.6%  of average earning assets compared to
31.0%  for  the  same period in 2001. At June 30, 2002, the securities portfolio
was  comprised  of  90%  available for sale and 10% held to maturity securities.

At December 31, 2001, nonperforming securities were comprised of a private issue
collateralized  mortgage  obligation  (CMO)  valued at $2.7 million and an asset
backed  security valued at $1.8 million compared to a $1.6 million private issue
CMO  at June 30, 2002. The decrease in nonperforming securities during the first
six months of 2002 resulted mainly from the sale of the asset backed security at
approximately its carrying value and a $0.7 million write-down of the CMO during
the  first  quarter  of 2002 due to other-than-temporary impairment. The Company
received  $0.4  million  in  payments  from  the  impaired CMO during the second
quarter  of  2002, resulting in a reduction in the carrying amount of the CMO to
$1.6  million.

Included  in  the  securities available for sale portfolio at June 30, 2002, are
certain  securities  (private  issue  CMO,  asset backed securities, and private
issue  mortgaged-backed  securities)  previously  held  by CNB. These securities
contain  a  higher  level of credit risk when compared to securities held in the
Company's investment portfolio because they are not guaranteed by a governmental
agency.  The Company's general practice is to purchases CMO and mortgaged-backed
securities  that  are  guaranteed by a governmental agency coupled with a strong
credit  rating,  typically  AAA,  issued  by  Moody's  or  Standard  and  Poors.

At June 30, 2002, the amortized cost and fair value of these securities amounted
to  $27.5  million  and $26.8 million, respectively, down from $38.7 million and
$38.5 million, respectively, at December 31, 2001. The decrease at June 30, 2002
when  compared to December 31, 2001, resulted primarily from sales and principal
paydowns.  As  noted  previously,  the Company sold $5.4 million of asset backed
securities containing a higher level of credit risk due to a rapid deterioration
in  the  financial  condition  of the underlying collateral related to the asset
backed securities during the second quarter of 2002, resulting in a $4.5 million
loss.  Management  cannot  predict  the  extent to which economic conditions may
worsen  or  other factors may impact these securities. Accordingly, there can be
no  assurance  that  these  securities  will  not  become other-than-temporarily
impaired  in  the  future.

At  December  31,  2001, the Company had certain embedded derivative instruments
from  the CNB Bank investment portfolio related to two debt securities that have
returns  linked  to  the performance of the NASDAQ 100 index. As of December 31,
2001,  the  embedded  derivatives  related  to the debt securities linked to the
NASDAQ  100  index had no fair value. The two debt securities were classified as
available for sale. At December 31, 2001, the total amortized cost and estimated
fair  value  of  these  two  debt  securities  was  $6.2  million.  The two debt
securities  were  sold in 2002 at amounts approximating their carrying values at
December  31,  2001 as these two securities did not meet the risk profile of the
Company's  security  portfolio.


                                       30
<PAGE>
Allowance for Loan Losses, Nonperforming Assets and the Provision for Loan
---------------------------------------------------------------------------
Losses
------

The  allowance  for  loan and lease losses is maintained at a level estimated by
management  to  provide  adequately  for risk of probable losses inherent in the
current  loan  and  lease portfolio.  The adequacy of the allowance for loan and
lease  losses  is  continuously  monitored.  It is assessed for adequacy using a
methodology  designed  to  ensure  that  the  level  of the allowance reasonably
reflects the loan portfolio's risk profile. It is evaluated to ensure that it is
sufficient  to  absorb  all  reasonably  estimable credit losses inherent in the
current  loan  and  lease  portfolio.

Management  considers  the  accounting policy relating to the allowance for loan
and  lease  losses  to  be  a  critical  accounting  policy  given  the inherent
uncertainty  in  evaluating the levels of the allowance required to cover credit
losses in the portfolio and the material effect that such judgements can have on
the  consolidated  results  of  operations.

For  purposes of evaluating the adequacy of the allowance, the Company considers
a number of significant factors that affect the collectibility of the portfolio.
For individually analyzed loans, these include estimates of loss exposure, which
reflect  the  facts and circumstances that affect the likelihood of repayment of
such  loans  as  of  the  evaluation  date.  For  homogeneous pools of loans and
leases,  estimates  of  the Company's exposure to credit loss reflect a thorough
current  assessment  of  a number of factors, which could affect collectibility.
These  factors  include: past loss experience; the size, trend, composition, and
nature;  changes  in  lending  policies  and  procedures, including underwriting
standards and collection, charge-off and recovery practices;  trends experienced
in nonperforming and delinquent loans and leases; current economic conditions in
the  Company's market; portfolio concentrations that may affect loss experienced
across  one  or more components of the portfolio; the effect of external factors
such  as  competition,  legal  and  regulatory requirements; and the experience,
ability,  and  depth  of  lending  management  and  staff.  In addition, various
regulatory  agencies,  as  an  integral  component of their examination process,
periodically  review  the  Company's  allowance for loan and lease losses.  Such
agencies  may  require the Company to recognize additions to the allowance based
on  their  judgment  about  information  available  to them at the time of their
examination,  which  may  not  be  currently  available  to  management.

After  a  thorough  consideration and validation of the factors discussed above,
required  additions  to  the  allowance  for  loan  and  lease  losses  are made
periodically  by  charges  to  the  provision  for loan and lease losses.  These
charges  are  necessary  to  maintain  the allowance at a level which management
believes  is  reasonably reflective of overall inherent risk of probable loss in
the  portfolio.  While management uses available information to recognize losses
on loans and leases, additions to the allowance may fluctuate from one reporting
period  to  another.  These  fluctuations  are  reflective  of  changes  in risk
associated  with  portfolio content and/or changes in management's assessment of
any  or  all of the determining factors discussed above.  The allowance for loan
and  lease  losses  to  outstanding  loans and leases at June 30, 2002 was 1.87%
compared to 1.45% at June 30, 2001.  Management considers the allowance for loan
losses  to  be  adequate based on evaluation and analysis of the loan portfolio.


                                       31
<PAGE>
Table  4  reflects  changes  to  the  allowance  for loan losses for the periods
presented.  The  allowance  is  increased  by  provisions  for losses charged to
operations  and  is  reduced  by  net  chargeoffs.  Chargeoffs are made when the
collectability  of  loan  principal  within  a  reasonable time is unlikely. Any
recoveries  of  previously  charged-off  loans  are  credited  directly  to  the
allowance  for  loan  losses.

<TABLE>
<CAPTION>

TABLE  4
ALLOWANCE  FOR  LOAN  LOSSES
--------------------------------------------------------------------------------------------------------------------
                                            Three  months  ended                   Six  months  ended
                                                  June  30,                             June  30,
(dollars in thousands)                      2002               2001               2002             2001
--------------------------------------------------------------------------------------------------------------------
<S>                                       <C>       <C>       <C>       <C>       <C>       <C>    <C>       <C>
Balance, beginning of period              $45,299             $32,486             $44,746          $32,494
Recoveries                                    938                 408               2,300              840
Chargeoffs                                 (4,610)             (6,145)             (7,430)          (7,796)
--------------------------------------------------------------------------------------------------------------------
Net chargeoffs                             (3,672)             (5,737)             (5,130)          (6,956)
Allowance related to purchase
 acquisition                                    -                 505                   -              505
Provision for loan losses                   2,092               6,872               4,103            8,083
--------------------------------------------------------------------------------------------------------------------
Balance, end of period                    $43,719             $34,126             $43,719          $34,126
====================================================================================================================
COMPOSITION OF NET CHARGEOFFS
--------------------------------------------------------------------------------------------------------------------
Commercial and agricultural               $(2,420)       66%  $(4,734)       83%  $(2,317)    45%  $(5,215)    75%
Real estate mortgage                         (151)        4%     (100)        2%     (371)     7%     (208)     3%
Consumer                                   (1,101)       30%     (903)       15%   (2,442)    48%   (1,533)    22%
--------------------------------------------------------------------------------------------------------------------
Net chargeoffs                            $(3,672)      100%  $(5,737)      100%  $(5,130)   100%  $(6,956)   100%
--------------------------------------------------------------------------------------------------------------------
Annualized net chargeoffs
 to average loans                                      0.64%               1.00%            0.45%            0.61%
--------------------------------------------------------------------------------------------------------------------
Net chargeoffs to average loans for theyear ended  December 31, 2001                                         0.87%
====================================================================================================================
</TABLE>

Nonperforming  assets  consist  of  nonaccrual loans, loans 90 days or more past
due,  restructured  loans,  other  real  estate  owned (OREO), and nonperforming
securities.  Loans are generally placed on nonaccrual when principal or interest
payments become ninety days past due, unless the loan is well secured and in the
process of collection. Loans may also be placed on nonaccrual when circumstances
indicate  that  the  borrower may be unable to meet the contractual principal or
interest  payments. OREO represents property acquired through foreclosure and is
valued  at  the  lower  of  the  carrying  amount or fair market value, less any
estimated  disposal  costs.  Nonperforming  securities  include securities which
management  believes  are  other-than-temporarily  impaired,  carried  at  their
estimated  fair  value  and  are  not  accruing  interest.

     Total  nonperforming assets were $34.5 million at June 30, 2002 compared to
$49.9  million  at  December  31,  2001  and $33.9 million at June 30, 2001. The
increase  from June 30, 2001 to December 31, 2001 can be primarily attributed to
a $13.9 million increase in nonperforming loans. This increase was primarily the
result  of  integrating newly acquired banks into the Company as well as adverse
economic conditions. Nonperforming loans totaled $31.1 million at June 30, 2002,
down  from the $43.8 million outstanding at December 31, 2001. The $12.5 million
decrease  in nonperforming loans from December 31, 2001 to June 30, 2002 was due
primarily  to  the  Company's  successful  efforts  in  resolving  certain large
problematic  commercial  loans.  Nonaccrual  commercial  and  agricultural loans
decreased  $10.5  million,  from  $31.4  million  at  December 31, 2001 to $20.8


                                       32
<PAGE>
million  at  June  30,  2002. Based on the improved trends in loan quality noted
above  and  the  decrease  in  net  charge-offs  in  2002  when compared to 2001
highlighted  in  Table  4  above,  the Company recorded a provision for loan and
lease  losses  of $2.1 million and $4.1 million, respectively, for the three and
six  months  ended  June  30,  2002, down from the $6.9 million and $8.1 million
provided  in  the  same  periods  in  2001.

<TABLE>
<CAPTION>

 TABLE  5
NONPERFORMING  ASSETS
------------------------------------------------------------------------------------------------
                                                           JUNE 30,    December 31,    June 30,
(dollars in thousands)                                       2002          2001          2001
------------------------------------------------------------------------------------------------
<S>                                                       <C>         <C>             <C>
Commercial and agricultural                               $  20,835   $      31,372   $  21,504
Real estate mortgage                                          5,935           5,119       3,806
Consumer                                                      3,757           3,719       2,366
------------------------------------------------------------------------------------------------
  Total nonaccrual loans                                     30,527          40,210      27,676
------------------------------------------------------------------------------------------------
Loans 90 days or more past due and still accruing:
 Commercial and agricultural                                      -             198          13
 Real estate mortgage                                            14           1,844         594
 Consumer                                                       239             933       1,079
------------------------------------------------------------------------------------------------
Total loans 90 days or more past due and still accruing         253           2,975       1,686
------------------------------------------------------------------------------------------------
Restructured loans in compliance with modified terms:           530             603         491
------------------------------------------------------------------------------------------------
Total nonperforming loans                                    31,310          43,788      29,853
------------------------------------------------------------------------------------------------
Other real estate owned (OREO)                                2,047           1,577       1,750
------------------------------------------------------------------------------------------------
Total nonperforming loans and OREO                           33,357          45,365      31,603
================================================================================================
Nonperforming securities                                      1,560           4,500       2,309
------------------------------------------------------------------------------------------------
Total nonperforming assets                                $  34,917   $      49,865   $  33,912
================================================================================================
Total nonperforming loans to loans and leases                  1.34%           1.87%       1.45%
Total nonperforming assets to assets                           0.95%           1.37%       1.27%
Total allowance for loan and lease losses
  to nonperforming loans                                     139.63%         102.19%     114.31%
================================================================================================
</TABLE>

In  addition  to  the  nonperforming loans discussed above, the Company has also
identified  approximately  $37.2  million in potential problem loans at June 30,
2002 as compared to $48.6 million at December 31, 2001.  Potential problem loans
are  loans  that  are  currently  performing,  but where known information about
possible  credit  problems  of  the  related borrowers causes management to have
serious  doubts  as  to the ability of such borrowers to comply with the present
loan  repayment  terms  and  which  may  result  in  disclosure of such loans as
non-performing  at  some  time in the future.  At the Company, potential problem
loans  are  typically  loans  that  are  performing  but  are  classified by the
Company's  loan  rating  system  as "substandard."   At June 30, 2002, potential
problem  loans  primarily consisted of commercial real estate and commercial and
agricultural  loans.  Management  cannot  predict  the  extent to which economic
conditions  may  worsen  or  other  factors  which  may impact borrowers and the
potential  problem  loans.  Accordingly,  there  can  be no assurance that other
loans will not become 90 days or more past due, be placed on non-accrual, become
restructured,  or  require  increased  allowance coverage and provision for loan
losses.


                                       33
<PAGE>
Deposits
--------

Total  deposits  were  $2.9 billion at June 30, 2002, a slight decrease of $48.0
million,  or  1.6%,  from year end 2001.  Total average deposits increased $34.1
million, or 1.2%, from June 30, 2001 to June 30, 2002. The Company's acquisition
of FNB in June 2001 added approximately $108.0 million in deposits offset by the
sale  of  a  branch  in  February  2002  which  resulted  in  the  decrease  of
approximately  $34.3 million in deposits. The Company has focused on maintaining
and  growing  its base of lower cost checking, savings and money market accounts
while  allowing  runoff  of  some of its higher cost time deposits, particularly
brokered  and jumbo time deposits. At June 30, 2002, total checking, savings and
money  market  accounts represented 53.9% of total deposits compared to 48.6% at
June  30,  2001.

Borrowings
----------

The  Company's  borrowed  funds  consist  of short-term borrowings and long-term
debt.  Short-term borrowings totaled $122.9 million at June 30, 2002 compared to
$122.0  million  and  $146.5  million  at  December  31,  and  June  30,  2001,
respectively.  Long-term  debt  was $350.7 million at June 30, 2002, compared to
$272.3  million  and  $276.9  million  at  December  31,  and  June  30,  2001,
respectively,  as  the Company took advantage of lower interest rates and locked
in  longer  term  advances.

CAPITAL  RESOURCES

Stockholders'  equity  of $281.9 million represents 7.7% of total assets at June
30,  2002, compared with $292.7 million, or 7.9% in the comparable period of the
prior  year,  and $266.4 million, or 7.3% at December 31, 2001. The Company does
not have a target dividend payout ratio, rather the Board of Directors considers
the  Company's  earnings  position  and  earnings potential when making dividend
decisions.


                                       34
<PAGE>
The  following  table  presents  the  actual  capital amounts and ratios for the
periods  presented.  Capital  measurements  are  significantly  in  excess  of
regulatory  minimum  guidelines  and meet the requirements to be considered well
capitalized  for  all  periods  presented.  Tier  1 leverage, Tier 1 capital and
Risk-based  capital  ratios  have regulatory minimum guidelines of 3%, 4% and 8%
respectively,  with requirements to be considered well capitalized of 5%, 6% and
10%,  respectively.


TABLE  6
CAPITAL  MEASUREMENTS
-------------------------------------------------------------------
                                          As of and for the quarter ended
                                               March 31    June 30
-------------------------------------------------------------------

2002
Tier 1 leverage ratio                              6.71%      6.87%
Tier 1 capital ratio                               9.94%      9.99%
Total risk-based capital ratio                    11.20%     11.24%
Cash dividends as a percentage of net income      52.71%     52.38%
Per common share:
  Book value                                  $    8.07   $   8.50
  Tangible book value                         $    6.62   $   7.07
===================================================================
2001
Tier 1 leverage ratio                              7.18%      7.07%
Tier 1 capital ratio                              10.70%     10.00%
Total risk-based capital ratio                    11.95%     11.23%
Cash dividends as a percentage of net income      48.89%     59.36%
Per common share:
  Book value                                  $    8.60   $   8.74
  Tangible book value                         $    7.22   $   7.21
===================================================================

Table  7  presents the high, low and closing sales price for the common stock as
reported  on  the  NASDAQ Stock Market, and cash dividends declared per share of
common  stock. The Company's price to book value ratio was 2.24 at June 30, 2002
and  2.27  a  year  ago.  The  per share market price was 14.11 times annualized
earnings  at June 30, 2002 and 19.69 times annualized earnings at June 30, 2001.


TABLE  7
QUARTERLY  COMMON  STOCK  AND  DIVIDEND  INFORMATION*
--------------------------------------------------------------------------------
                                                                            Cash
                                                                       Dividends
Quarter  Ending                             High      Low      Close    Declared
--------------------------------------------------------------------------------
2001
--------------------------------------------------------------------------------
September  30                               17.30     13.50     14.30     0.170
December  31                                15.99     12.55     14.49     0.170
================================================================================
2002
--------------------------------------------------------------------------------
MARCH  31                                  $15.15     $13.15     $14.74  $0.170
JUNE  30                                   $19.32     $14.00     $18.07  $0.170
================================================================================

On  July  22, 2002 the Company announced that it intends to repurchase up to one
million  shares  (approximately 3%) of its outstanding common stock from time to
time  over  the  next  12  months  in  open  market  and  privately  negotiated
transactions.


                                       35
<PAGE>
LIQUIDITY  AND  INTEREST  RATE  SENSITIVITY  MANAGEMENT

MARKET  RISK

Interest  rate  risk  is the most significant market risk affecting the Company.
Other  types  of  market  risk,  such as foreign currency exchange rate risk and
commodity  price  risk,  do  not  arise  in  the  normal course of the Company's
business  activities.

Interest  rate  risk  is  defined as an exposure to a movement in interest rates
that  could  have  an  adverse effect on the Company's net interest income.  Net
interest  income  is  susceptible  to  interest  rate  risk  to  the degree that
interest-bearing liabilities mature or reprice on a different basis than earning
assets.  When  interest-bearing  liabilities mature or reprice more quickly than
earning  assets  in  a  given  period, a significant increase in market rates of
interest  could  adversely  affect net interest income.  Similarly, when earning
assets mature or reprice more quickly than interest-bearing liabilities, falling
interest  rates  could  result  in  a  decrease  in  net  interest  income.

In  an  attempt  to  manage the Company's exposure to changes in interest rates,
management  monitors  the  Company's  interest  rate  risk.  Management's
asset/liability  committee (ALCO) meets monthly to review the Company's interest
rate  risk  position  and  profitability,  and  to  recommend  strategies  for
consideration  by  the  Board  of  Directors.  Management  also reviews loan and
deposit  pricing,  and the Company's securities portfolio, formulates investment
and  funding  strategies,  and  oversees  the  timing  and  implementation  of
transactions  to  assure  attainment  of  the  Board's  objectives  in  the most
effective  manner.  Notwithstanding  the Company's interest rate risk management
activities, the potential for changing interest rates is an uncertainty that can
have  an  adverse  effect  on  net  income.

In  adjusting  the  Company's asset/liability position, the Board and management
attempt  to  manage  the  Company's  interest  rate risk while enhancing the net
interest  margin.  At  times,  depending on the level of general interest rates,
the  relationship between long- and short-term interest rates, market conditions
and  competitive factors, the Board and management may determine to increase the
Company's  interest  rate  risk  position  somewhat in order to increase its net
interest  margin.  The  Company's results of operations and net portfolio values
remain  vulnerable  to  changes  in  interest  rates  and  fluctuations  in  the
difference  between  long-  and  short-term  interest  rates.

The  primary  tool  utilized  by  ALCO to manage interest rate risk is a balance
sheet/income  statement  simulation  model (interest rate sensitivity analysis).
Information such as principal balance, interest rate, maturity date, cash flows,
next repricing date (if needed), and current rates is uploaded into the model to
create  an  ending  balance  sheet.  In addition, ALCO makes certain assumptions
regarding prepayment speeds for loans and leases and mortgage related investment
securities  along  with  any  optionality  within  the  deposits and borrowings.

The  model  is  first  run  under an assumption of a flat rate scenario (i.e. no
change  in  current  interest rates) with a static balance sheet over a 12-month
period.  A  second and third model are run in which a gradual increase of 200 bp
and a gradual decrease of 150 bp takes place over a 12 month period. Under these
scenarios,  assets  subject to prepayments are adjusted to account for faster or
slower  prepayment  assumptions.  Any  investment  securities or borrowings that


                                       36
<PAGE>
have  callable  options  embedded into them are handled accordingly based on the
interest  rate  scenario.  The resultant changes in net interest income are then
measured  against  the  flat  rate  scenario.

In  the  declining  rate scenarios, net interest income is projected to increase
when compared to the flat rate scenario through the simulation period. The level
of  net  interest  income increasing is a result of interest-bearing liabilities
repricing  downward  at  a  faster  rate than earning assets. In the rising rate
scenarios,  net  interest  income  is projected to experience a decline from the
flat  rate  scenario. Net interest income is projected to remain at lower levels
than  in  a  flat rate scenario through the simulation period primarily due to a
lag  in  assets  repricing while funding costs increase. The potential impact on
earnings  is  dependent  on  the  ability  to  lag  deposit  repricing.

Net  interest  income for the next twelve months in a + 200/- 150 bp scenario is
within  the  internal  policy  risk limits of a not more than a 5% change in net
interest  income.  The  following  table summarizes the percentage change in net
interest  income  in  the  rising  and  declining rate scenarios over a 12 month
period  from  the forecasted net interest income in the flat rate scenario using
the  June  30,  2002  balance  sheet  position:

             TABLE  10
             INTEREST  RATE  SENSITIVITY  ANALYSIS
             --------------------------------------------------------
             Change  in  interest  rates            Percent change in
             (in  basis  points)                  net interest income
             --------------------------------------------------------
             +200                                            (2.28%)
             -150                                             0.41%
             --------------------------------------------------------

LIQUIDITY  RISK

Liquidity  involves  the ability to meet the cash flow requirements of customers
who  may  be depositors wanting to withdraw funds or borrowers needing assurance
that  sufficient  funds  will be available to meet their credit needs. The Asset
Liability  Committee  (ALCO)  is  responsible  for  liquidity management and has
developed  guidelines  which  cover  all  assets and liabilities, as well as off
balance  sheet  items that are potential sources or uses of liquidity. Liquidity
policies  must  also provide the flexibility to implement appropriate strategies
and tactical actions. Requirements change as loans and leases grow, deposits and
securities  mature,  and  payments  on borrowings are made. Liquidity management
includes a focus on interest rate sensitivity management with a goal of avoiding
widely  fluctuating  net  interest  margins through periods of changing economic
conditions.

The  primary  liquidity  measurement  the  Company  utilizes is called the Basic
Surplus  which  captures  the adequacy of its access to reliable sources of cash
relative  to  the  stability  of  its  funding  mix of average liabilities. This
approach  recognizes  the  importance of balancing levels of cash flow liquidity
from  short-  and  long-term  securities  with  the  availability  of dependable
borrowing  sources  which  can be accessed when necessary. At June 30, 2002, the
Company's  Basic Surplus measurement was 10.32% of total assets, which was above
the  Company's  minimum  of  5%  set  forth  in  its  liquidity policies. If the
Company's  liquidity  position  tightens  and  its  Basic  Surplus  measurement
decreases,  the Company has the ability to manage its liquidity through brokered
time deposits, established borrowing facilities, primarily with the Federal Home
Loan  Bank,  and  entering into repurchase agreements with investment companies.


                                       37
<PAGE>
This  Basic  Surplus approach enables the Company to adequately manage liquidity
from  both  operational  and contingency perspectives. By tempering the need for
cash  flow  liquidity with reliable borrowing facilities, the Company is able to
operate  with  a  more  fully  invested  and,  therefore, higher interest income
generating,  securities  portfolio.  The  makeup  and  term  structure  of  the
securities  portfolio  is,  in  part,  impacted  by  the  overall  interest rate
sensitivity  of  the  balance  sheet.  Investment  decisions and deposit pricing
strategies  are  impacted  by  the  liquidity  position.  At  June 30, 2002, the
Company  considered  its  Basic  Surplus  adequate  to  meet  liquidity  needs.

At  June  30, 2002, a large percentage of the Company's loans and securities are
pledged  as collateral on borrowings. Therefore, future growth of earning assets
will  depend  upon  the  Company's ability to obtain additional funding, through
growth  of  core deposits and collateral management, and may require further use
of  brokered  time  deposits,  or  other  higher  cost  borrowing  arrangements.

SARBANES-OXLEY  ACT  OF  2002
-----------------------------

On July 30, 2002, President Bush signed into law the Sarbanes-Oxley Act of 2002,
landmark  legislation  on  accounting  reform and corporate governance. Although
much  of  the  act is still being assessed, we do not anticipate any significant
changes  in  the  operations of, and reporting by the Company as a result of the
Act.  In  accordance  with  requirements  of  the  Sarbanes-Oxley  Act,  written
certifications  for  this  quarterly  report on Form 10-Q by the chief executive
officer and chief financial officer accompany this report as filed with the SEC.

ITEM 3.  QUANTITATIVE  AND  QUALITATIVE  DISCLOSURE  ABOUT  MARKET  RISK

          Information  called  for  by  Item 3 is contained in the Liquidity and
          Interest  Rate  Sensitivity  Management  section  of  the  Management
          Discussion  and  Analysis.


                                       38
<PAGE>
PART II.  OTHER  INFORMATION
Item 1  --  Legal  Proceedings

There  are  no  material  pending  legal proceedings other than ordinary routine
litigation  incidental  to  the  business,  to  which the Company, or any of its
subsidiaries  is  a  party  or  which  their  property  is  subject.

Item 2  --  Changes  in  Securities

None.

Item 3  --  Defaults  Upon  Senior  Securities

None

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

The  Company's  Annual  Meeting  of  Stockholders  was  held  on  May  2,  2002.
Stockholders  approved  the  following  proposals:

A  proposal  to  fix the number of directors to sixteen was approved. There were
24,043,045  votes cast for the proposal, 599,832 votes cast against the proposal
and  175,167  broker  non-votes  regarding  this  matter.

The  following  directors were elected with terms expiring at the annual meeting
in  2005:

     Richard Chojnowski          24,128,402 votes for election,
                                    516,689 votes against election
     Dr.  Peter  B.  Gregory     24,423,792 votes  for  election,
                                    221,299 votes against  election
     Paul  O.  Stillman          24,430,632 votes for election,
                                    214,459 votes against election
     Joseph  A  Santangelo       24,364,931 votes  for  election,
                                    280,160  votes against  election
     Janet  H. Ingraham          24,424,468 votes for election,
                                    220,623 votes against election
     Paul  D.  Horger            24,422,268  votes  for  election,
                                    222,369  votes against  election

The  following  directors were elected with terms expiring at the annual meeting
in  2003:

     Michael  H.  Hutcherson     24,393,049 votes for election,
                                    252,042 votes against election
     Michael  M. Murphy          24,043,045 votes for election,
                                    599,832 votes against election

Item 5  --  Other  Information

On  July  22,  2002,  NBT  Bancorp  Inc.  announced the declaration of a regular
quarterly  cash  dividend of $0.17 per share.  The cash dividend will be paid on
September  15,  2002  to  stockholders  of  record  as  of  September  1,  2002.


                                       39
<PAGE>
Item 6  --  Exhibits  and  Reports  on  Form  8-K

(a)  none.

(b)  During  the  quarter  ended  June 30, 2002, the Company filed the following
     Current  Reports  on  Form  8-K:

          None  filed.


                                       40
<PAGE>
                                   SIGNATURES

Pursuant  to  the  requirements  of  the  Securities  Exchange  Act of 1934, the
Registrant  has  duly caused this report on FORM 10-Q to be signed on its behalf
by  the  undersigned  thereunto  duly  authorized, this 13th day of August 2002.




                                 NBT BANCORP INC.

                           By: /s/ MICHAEL J. CHEWENS
                              -----------------------
                               Michael J. Chewens, CPA
                               Executive Vice President
                           Chief Financial Officer and Secretary


                                       41
<PAGE>

</TEXT>
</DOCUMENT>
</SUBMISSION>
