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First National Bank of Northern California Reports First Quarter 2014 Earnings of $0.40 per Diluted Share

SOUTH SAN FRANCISCO, CA -- (Marketwired) -- 04/28/14 -- FNB Bancorp (OTCQB: FNBG), parent company of First National Bank of Northern California (the "Bank"), today announced net earnings available to common shareholders for the first quarter of 2014 of $1,664,000 or $0.40 per diluted share, compared to net earnings available to common shareholders of $772,000 or $0.19 per diluted share for the first quarter of 2013. During the first quarter of 2014, FNB Bancorp redeemed all the outstanding preferred shares held by the Treasury Department as part of their Small Business Lending (SBLF) Program. To partially fund this redemption, FNB Bancorp obtained a $6,000,000 loan that is secured by FNB Bancorp's ownership interest in First National Bank of Northern California. A cash dividend payment from the Bank along with existing cash balances at FNB Bancorp funded the remainder of the redemption. During the first quarter of 2014, net loans increased by $14,518,000.

"During the first quarter of 2014, the Bank experienced strong loan demand and was able to grow our net loans outstanding. At the same time, higher rate brokered time deposits acquired in our Oceanic Bank acquisition have continued to mature. Overall, our deposit portfolio has performed well, with the decrease in total deposits in line with management's projections. During the first quarter of 2014, there was an increase of $10,000,000 in the outstanding wholesale borrowings obtained from the Federal Home Loan Bank, which totaled $25,000,000 as of March 31, 2014. The Bank intends to slowly reduce the amount of our outstanding borrowings during 2014 by utilizing funds derived from principal repayments that occur within our investment portfolio and the slow and steady acquisition of additional deposit accounts and dollars. During the first quarter of 2014, we also redeemed all the outstanding preferred stock held by the U.S. Treasury. The dividend rate increased from 5% to 9% effective January 1, 2014, so it no longer made sense to keep this source of capital. In order to keep the Bank funded at a high level of common equity, during the first quarter of 2014, FNB Bancorp obtained a $6,000,000 holding company loan. The proceeds from this loan were contributed to the Bank as an additional capital contribution," stated Tom McGraw, Chief Executive Officer.


Financial Highlights:
 First Quarter, 2014                         (Unaudited)
                          -------------------------------------------------
                                          Three                     Three
Consolidated Statements      Three       months        Three       months
 of Earnings                months        ended       months        ended
(in '000s except             ended      December       ended      December
 earnings per share        March 31,       31,       March 31,       31,
 amounts)                    2014         2013         2013         2012
                          ----------   ----------   ----------   ----------

Interest income          $     8,983  $     9,375  $     9,397  $     9,467
Interest expense                (469)        (514)        (682)        (727)
                          ----------   ----------   ----------   ----------
  Net interest income          8,514        8,861        8,715        8,740
Provision for loan
 losses                          (75)         (50)        (600)        (633)
Noninterest income             1,040        1,137          976        1,060
Noninterest expense           (6,842)      (6,954)      (7,739)      (7,557)
                          ----------   ----------   ----------   ----------
  Interest before income
   taxes                       2,637        2,994        1,352        1,610
Provision for income tax        (803)        (995)        (422)        (264)
                          ----------   ----------   ----------   ----------
  Net earnings                 1,834        1,999          930        1,346
    Dividends and
     discount accretion
     on preferred stock         (170)        (119)        (158)        (157)
    Net earnings
     available to common
     shareholders        $     1,664  $     1,880  $       772  $     1,189
                          ==========   ==========   ==========   ==========

Basic earnings per share       $0.42        $0.47        $0.20        $0.31
Diluted earnings per
 share                         $0.40        $0.46        $0.19        $0.30

Average assets           $   889,553  $   912,819  $   893,982  $   900,571
Average equity           $    88,995  $    93,679  $    95,378  $    95,206
Return on average assets
 (annualized)                   0.75%        0.82%        0.35%        0.53%
Return on average equity
 (annualized)                   7.48%        8.03%        3.24%        5.00%
Efficiency ratio                 -72%         -70%         -80%         -77%
Net interest margin
 (taxable equivalent)           4.24%        4.24%        4.52%        4.46%
Average shares
 outstanding                   3,985        3,965        3,903        3,882
Average diluted shares
 outstanding                   4,126        4,088        3,996        3,963



                                            *                         *
                          (Unaudited)     As of     (Unaudited)     As of
Consolidated Balance         As of       December      As of       December
 Sheets                    March 31,       31,       March 31,       31,
(in '000s)                    2014         2013         2013         2012
                          -----------  -----------  -----------  -----------

  Assets:
Cash and cash
 equivalents             $     19,244 $     14,007 $     39,092 $     27,861
Interest-bearing time
 deposits with
other financial
 institutions                   4,805        5,543        9,713       13,216
Securities available for
 sale, at fair value          258,184      263,988      246,460      234,945
Loans, net                    566,861      552,343      546,278      541,563
Premises, equipment and
 leasehold improvements,
 net                           12,533       12,512       12,634       12,706
Other real estate owned,
 net                            2,478        5,318        6,668        6,650
Goodwill                        1,841        1,841        1,841        1,841
Other equity securities         5,307        5,300        5,338        5,464
Accrued interest
 receivable                     3,758        3,808        3,751        3,760
Prepaid expenses                  631          701        1,116        1,372
Bank owned life
 insurance                     12,248       12,151       11,880       11,785
Other assets                   13,658       14,418       12,707       14,177
                          -----------  -----------  -----------  -----------
  Total assets           $    901,548 $    891,930 $    897,478 $    875,340
                          ===========  ===========  ===========  ===========

    Liabilities and
     stockholders'
     equity:
Deposits:
Demand and NOW           $    281,366 $    279,269 $    255,511 $    253,849
Savings and money market      380,227      370,194      372,112      343,437
Time                          112,352      124,152      162,802      171,066
                          -----------  -----------  -----------  -----------
  Total deposits              773,945      773,615      790,425      768,352
Federal Home Loan Bank
 advances                      25,000       15,000          502        1,220
Bank borrowings                 6,000            -            -            -
Accrued expenses and
 other liabilities              8,977        9,066       10,682       10,410
                          -----------  -----------  -----------  -----------
  Total liabilities           813,922      797,681      801,609      779,982
Stockholders' equity           87,626       94,249       95,869       95,358
                          -----------  -----------  -----------  -----------
  Total liab. and
   stockholders' equity  $    901,548 $    891,930 $    897,478 $    875,340
                          ===========  ===========  ===========  ===========

* Taken from the audited annual
 financial statements

Other Financial
 Information
Allowance for loan
 losses                  $      9,897 $      9,879 $      9,357 $      9,124
Nonperforming assets     $      9,447 $     12,669 $     19,459 $     19,142
Total gross loans        $    576,758 $    562,222 $    555,635 $    550,687

"During the first quarter, the Bank's problem assets continued to decrease. Borrowers are making additional investments in our service area, in particular in real estate investments. The skyline in San Francisco is filled with cranes building large residential housing towers. Loans are up for the quarter and overall, our assets grew by approximately 1.1% during the quarter. The Bank's Tier 1 leverage capital increased during the first quarter by $309,000 despite the redemption of the preferred stock by FNB Bancorp during the quarter. At March 31, 2014, the Bank's leverage capital stood at 9.96%. We remain 'well capitalized' by regulatory definitions in all our regulatory capital requirements. The Oceanic Bank purchase has been fully integrated into the operations of the Company and our capital is growing in line with our growth in assets. Steps taken by management to prudently reduce our future noninterest expenses are currently underway. To be successful in our current environment, we understand that we must meet or exceed our customers' expectations in their interaction with the Bank. For over 50 years, we have built our organization around the idea that we must continually earn our customer's business," continued CEO Tom 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.

Contacts:
Tom McGraw
Chief Executive Officer
(650) 875-4864

Dave Curtis
Chief Financial Officer
(650) 875-4862

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