First National Bank of Northern California Reports Third Quarter 2010 Earnings of $0.25 per Diluted Share


SOUTH SAN FRANCISCO, CA--(Marketwire - October 25, 2010) - FNB Bancorp (OTCBB: FNBG), parent company of First National Bank of Northern California (the "Bank"), today announced net earnings available to common shareholders for the third quarter of 2010 of $811,000 or $0.25 per diluted share, compared to net earnings available to common shareholders of $1,049,000 or $0.33 per diluted share for the third quarter of 2009. Dividend payments on the preferred shares outstanding were made as required by the Treasury Department's Capital Purchase Program during the three quarters ended September 30 of 2010 and 2009. Our balance sheet is highly liquid and we continue to be "well capitalized" as defined by bank regulations. Total assets as of September 30, 2010 were $727,502,000 compared to $699,313,000 as of September 30, 2009. Our net loan totals decreased by $18,885,000 or 3.8% during the year to date through September of 2010 and our deposits increased by $40,046,000 or 6.7% during the same time period. The Company's liquidity position remains strong with $131,123,000 in available for sale securities and $69,731,000 in cash and due from banks as of September 30, 2010.

During the third quarter of 2010, as part of our continuing efforts to provide our customers a quality banking experience while we improve our operational efficiencies, the decision was made to consolidate our Colma branch into our Daly City and South San Francisco branches. This consolidation is expected to provide the Bank operational efficiencies while still providing high quality service to our customers.

"The consolidation of the Colma branch into our Daly City and South San Francisco branches is scheduled to occur on December 1, 2010. We look forward to continuing to provide for the banking needs of the Colma community through our full service Daly City and South San Francisco locations. We hope to transition all displaced Colma employees to other branch offices of the Bank," stated Mr. McGraw.

"During the third quarter of 2010, the Bank enjoyed an increase in net interest margin and net interest income over 2009 levels. Credit resolution costs continued to move towards more normalized levels, which allowed us to lower our provision for loan losses during the third quarter of 2010 compared to the third quarter of 2009," continued Mr. McGraw.

Financial Highlights: Third Quarter, 2010
Consolidated Statements of Earnings
(in '000s except earnings per share amounts)

                                  Three      Three      Nine       Nine
                                  months     months     months     months
                                  ended      ended      ended      ended
                                September  September  September  September
                                 30, 2010   30, 2009   30, 2010   30, 2009
                                ---------  ---------  ---------  ---------

Interest income                 $   8,616  $   9,283  $  26,032  $  26,837
Interest expense                    1,338      2,293      4,368      6,974
                                ---------  ---------  ---------  ---------
   Net interest income              7,278      6,990     21,664     19,863
Provision for loan losses            (464)      (796)    (1,029)    (3,696)
Noninterest income                  1,335      1,672      3,437      4,266
Noninterest expense                 6,698      6,427     20,449     20,605
                                ---------  ---------  ---------  ---------
   Income before income taxes       1,451      1,439      3,623       (172)
Income tax expenses (benefit)         426        176        855       (250)
                                ---------  ---------  ---------  ---------
   Net earnings                     1,025      1,263      2,768         78
   Dividends and discount
    accretion on preferred stock      214        214        640        419
   Net earnings (loss)
    available to                ---------  ---------  ---------  ---------
    common shareholders         $     811  $   1,049  $   2,128  $    (341)
                                =========  =========  =========  =========

Basic earnings per share        $    0.25  $    0.33  $    0.67 ($    0.11)
Diluted earnings per share      $    0.25  $    0.33  $    0.67 ($    0.11)

Average assets                  $ 732,141  $ 694,806  $ 729,185  $ 675,487
Average equity                  $  81,545  $  78,525  $  80,298  $  76,834
Return on average assets
 (annualized)                        0.44%      0.60%      0.39%     -0.07%
Return on average equity
 (annualized)                        3.98%      5.34%      3.53%     -0.59%
Efficiency ratio                       78%        74%        81%        85%
Net interest margin (taxable
 equivalent)                         4.77%      4.62%      4.78%      4.43%
Average shares outstanding          3,182      3,182      3,191      3,182
Average diluted shares
 outstanding                        3,192      3,182      3,200      3,182





Financial Highlights: Third Quarter, 2010

Consolidated Balance Sheets
(in '000s)

                                  As of      As of      As of      As of
                                September   December  September   December
                                 30, 2010   31, 2009   30, 2009   31, 2008
                                ---------  ---------  ---------  ---------
     Assets:
Cash and cash equivalents       $  69,731  $  62,853  $  46,371  $  14,865
Securities available for sale     131,123     97,188     94,264     99,221
Loans, net                        475,464    494,349    506,537    497,984
Premises, equipment and
 leasehold improvements            11,801     11,784     12,040     13,030
Other real estate owned             6,608      7,320      9,425      3,557
Goodwill                            1,841      1,841      1,841      1,841
Other assets                       30,934     32,974     28,835     30,459
                                ---------  ---------  ---------  ---------
   Total assets                 $ 727,502  $ 708,309  $ 699,313  $ 660,957
                                =========  =========  =========  =========

     Liabilities and
      stockholders' equity:
Deposits:
Demand and NOW                  $ 197,924  $ 177,883  $ 174,826  $ 179,688
Savings and money market          314,864    293,758    279,696    179,382
Time                              126,222    127,323    130,645    141,840
                                ---------  ---------  ---------  ---------
   Total deposits                 639,010    598,964    585,167    500,910
Federal Home Loan Bank advances         -     25,000     30,000     86,100
Accrued expenses and other
 liabilities                        6,405      5,480      5,218      5,798
                                ---------  ---------  ---------  ---------
   Total liabilities              645,415    629,444    620,385    592,808
Stockholders' equity               82,087     78,865     78,928     68,149
                                ---------  ---------  ---------  ---------
   Total liab. and
    stockholders' equity        $ 727,502  $ 708,309  $ 699,313  $ 660,957
                                =========  =========  =========  =========

Other Financial Information
Allowance for loan losses       $   9,250  $   9,829  $   9,424  $   7,075
Nonperforming assets            $  23,906  $  32,912  $  32,164  $  17,659
Total gross loans               $ 484,714  $ 504,178  $ 515,961  $ 505,059

"Our local economy is slowly recovering from the deepest recession we have experienced in the last 50 years. Unemployment rates remain high, commercial real estate valuations continue to be depressed, foreclosures still make up a significant amount of existing home sales, and we are working through a generally tight credit environment. We continue to manage our credit risks in an appropriate manner, trying to find solutions that make sense for the Bank as well as our customers. Management attention has been focused on risk management of existing portfolios and asset quality improvement during the first three quarters of 2010, and that will continue to be a focus as we move into the fourth quarter of 2010. During the third quarter of 2010, profitability levels were still not at historical levels; however, the Bank has the capital and the liquidity to take advantage of any market opportunities that become available and to grow the Bank as the health of the economy improves. We want to lend and are actively seeking new loan and deposit customers who want a local community bank that knows and understands the local market and economy. We want our customers to know that we are committed to them and to the communities that we serve. We look forward to the opportunity to continue to provide for the banking needs of our customers, as we have done for the last 47 years," stated Mr. McGraw.

Cautionary Statement: This release contains certain forward-looking statements that are subject to risks and uncertainties that could cause actual results to differ materially from those stated herein. Management's assumptions and projections are based on their anticipation of future events and actual performance may differ materially from those projected. Risks and uncertainties which could impact future financial performance include, among others, (a) competitive pressures in the banking industry; (b) changes in the interest rate environment; (c) general economic conditions, either nationally or regionally or locally, including fluctuations in real estate values; (d) changes in the regulatory environment; (e) changes in business conditions or the securities markets and inflation; (f) possible shortages of gas and electricity at utility companies operating in the State of California, and (g) the effects of terrorism, including the events of September 11, 2001, and thereafter, and the conduct of war on terrorism by the United States and its allies. Therefore, the information set forth herein, together with other information contained in the periodic reports filed by FNB Bancorp with the Securities and Exchange Commission, should be carefully considered when evaluating its business prospects. FNB Bancorp undertakes no obligation to update any forward-looking statements contained in this release.

Contact Information: Contacts: Tom McGraw Chief Executive Officer (650) 875-4864 Dave Curtis Chief Financial Officer (650) 875-4862