First National Bank of Northern California Reports First Quarter 2017 Earnings of $0.62 Per Diluted Share

SOUTH SAN FRANCISCO, CA--(Marketwired - Apr 26, 2017) - FNB Bancorp (NASDAQ: FNBG), parent company of First National Bank of Northern California (the "Bank"), today announced net earnings available to common stockholders for the first quarter of 2017 of $3,089,000 or $0.62 per diluted share, compared to net earnings available to common shareholders of $2,567,000 or $0.52 per diluted share for the first quarter of 2016.

During the first quarter of 2017, our net interest income was $11.2 million, an increase of $475,000 from the first quarter of 2016. This increase was primarily the result of an increase in the average volume of our interest earning assets outstanding and the recognition of $307,000 of interest income related to accelerated accretion on the remaining discount associated with a loan acquired in our America California Bank acquisition that was paid in full.

"During the first quarter of 2017, the Company was able to grow our net loan portfolio by $25 million. This growth was funded with a combination of increased deposit balances of $5 million and an increase in short term FHLB borrowings of $15 million. Net interest income was also helped as the adjustable rate portion of our loan portfolio has begun to reset to higher yields. The current low rate environment has put pressure on our net interest margin, but we have added interest earning assets at spreads that have allowed us to expand our net interest income. Our net interest margin has continued to remain healthy at 3.98% and our increased earnings coupled with a flattening yield curve have allowed our capital base to increase by $4 million during the quarter. We are proud of our accomplishments, which are the result of our hard work and opportunities that allow us to meet our customers' needs and provide them with the products they want at the time they want them", stated CEO Tom McGraw. 

"Our total non-accrual loans balance increased by $1.8 million during the first quarter. This increase is believed to be isolated to specific borrowers and not indicative on any portfolio segment credit deterioration. Loan charge-offs, net of recoveries, for the first three months of 2017 totaled $23,000. We continue to utilize a conservative underwriting approach in our loan origination process which should serve us well in the future. There was no first quarter provision for loan losses and our allowance for loan losses was considered by management to be sufficient, as of March 31, 2017", continued Tom McGraw.

CONSOLIDATED BALANCE SHEETS					(Unaudited)
(Dollars in thousands)					As of
					March 31,
					2017				2016
ASSETS
	Cash and due from banks				$	25,337			$	37,737
	Interest-bearing time deposits with financial institutions					205				205
	Securities available for sale, at fair value					353,364				329,396
	Other equity securities					7,211				6,756
	Loans, net of deferred loan fees and allowance for loan losses					807,191				733,991
	Bank premises, equipment and leasehold improvements, net					9,571				10,320
	Bank owned life insurance					16,349				15,946
	Accrued interest receivable					4,785				4,603
	Other real estate owned					1,443				1,055
	Goodwill					4,580				4,580
	Prepaid expenses					768				945
	Other assets					15,917				15,444
		TOTAL ASSETS			$	1,246,721			$	1,160,978
LIABILITIES
	Deposits:
		Demand, noninterest bearing			$	287,029			$	265,947
		Demand, interest bearing				125,643				113,337
		Savings and money market				496,697				526,557
		Time				115,622				124,410
			Total Deposits			1,024,991				1,030,251
	Federal Home Loan Bank advances					86,000				-
	Note payable					4,200				4,800
	Accrued expenses and other liabilities					17,198				17,230
			Total Liabilities			1,132,389				1,052,281
STOCKHOLDERS' EQUITY
	Common stock, no par value:					84,603				75,240
	Retained earnings					29,842				29,666
	Accumulated other comprehensive (loss) earnings, net of tax					(113	)			3,791
		Total Stockholders' Equity				114,332				108,697
		TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY			$	1,246,721			$	1,160,978

CONSOLIDATED STATEMENTS OF EARNINGS
(Amounts in thousands, except per share amounts)												(Extracted from audited annual
				(Unaudited)								financial statements)
				Three Months Ended								Twelve Months Ended
				March 31,								December 31,
				2017				2016				2016				2015
INTEREST INCOME
	Interest and fees on loans			$	10,073			$	9,871			$	38,313			$	33,235
	Interest on dividends and securities				1,943				1,685				7,156				6,008
	Interest on deposits with other financial institutions				11				9				44				39
		Total interest income			12,027				11,565				45,513				39,282
INTEREST EXPENSE
	Deposits				637				783				2,780				2,359
	Federal Home Loan Bank advances				145				8				67				9
	Interest on note payable				53				57				222				229
		Total interest expense			835				848				3,069				2,597
NET INTEREST INCOME					11,192				10,717				42,444				36,685
	Provision for (recovery of) loan losses				-				75				150				(305	)
NET INTEREST INCOME AFTER PROVISION FOR (RECOVERY OF) LOAN LOSSES					11,192				10,642				42,294				36,990
NONINTEREST INCOME
	Service charges				597				621				2,461				2,501
	Net gain on sale of available-for-sale securities				28				184				438				339
	Earnings on bank owned life insurance				102				100				402				364
	Other income				283				229				1,294				1,292
		Total Noninterest Income			1,010				1,134				4,595				4,496
NONINTEREST EXPENSES
	Salaries and employee benefits				4,774				4,938				19,474				18,523
	Occupancy expense				651				631				2,528				2,517
	Equipment expense				402				434				1,765				1,926
	Professional fees				473				387				1,363				1,471
	FDIC assessment				130				150				600				600
	Telephone, postage, supplies				297				295				1,199				1,074
	Advertising expense				108				117				524				500
	Data processing expense				139				192				657				1,076
	Low income housing expense				105				71				284				283
	Surety insurance				84				87				347				381
	Director fees				72				72				288				288
	Other real estate owned expense (recovery), net				10				(10	)			(5	)			4
	Other expenses				360				423				1,668				1,282
		Total Noninterest Expense			7,605				7,787				30,692				29,925
EARNINGS BEFORE PROVISION FOR INCOME TAXES					4,597				3,989				16,197				11,561
	Provision for income taxes				1,508				1,422				5,696				3,364
NET EARNINGS AVAILABLE TO COMMON STOCKHOLDERS				$	3,089			$	2,567			$	10,501			$	8,197
Per Share Data:
	Basic earnings per share available to common stockholders			$	0.63			$	0.54			$	2.18			$	1.73
	Diluted earnings per share available to common stockholders			$	0.62			$	0.52			$	2.12			$	1.68
	Cash dividends declared			$	780			$	683			$	2,847			$	2,409
	Average shares outstanding				4,867				4,777				4,822				4,742
	Average diluted shares outstanding				5,012				4,921				4,945				4,876
	Shares outstanding as of the end of period				4,874				4,794				4,853				4,769

FINANCIAL HIGHLIGHTS											(Extracted from
(Dollars in thousands)											audited annual
			(Unaudited)								financial statements)
			Three Months Ended								Twelve Months Ended
			March 31,								December 31,
			2017				2016				2016				2015
AVERAGE BALANCES:
	Total Assets		$	1,233,278			$	1,146,493			$	1,163,454			$	1,010,435
	Total Loans			807,741				743,282				746,829				629,814
	Total Earning Assets			1,163,509				1,072,790				1,091,703				923,700
	Total Deposits			1,013,065				1,012,268				1,017,398				890,369
	Total Stockholder's Equity			109,926				106,219				109,854				100,621
SELECTED PERFORMANCE DATA
	Annualized return on average assets			1.00	%			0.90	%			0.90	%			0.81	%
	Annualized return on average equity			11.24	%			9.67	%			9.56	%			8.15	%
	Net interest margin (taxable equivalent)			3.98	%			4.10	%			3.97	%			4.06	%
	Average loans as a percent of average deposits			79.73	%			73.43	%			73.41	%			70.74	%
	Average total stockholders' equity as a % of average total assets			8.91	%			9.26	%			9.44	%			9.96	%
	Annualized common dividend payout ratio			25.25	%			26.61	%			27.11	%			29.39	%

NON-PERFORMING ASSETS							(Extracted from
(Dollars In Thousands)							audited annual
			(Unaudited)				financial statements)				(Unaudited)				(Unaudited)				(Unaudited)
			March 31,				December				September				June 30,				March 31,
			2017				31, 2016				30, 2016				2016				2016
Non-accrual loans			$	8,444			$	6,647			$	6,903			$	8,182			$	6,882
Other real estate owned				1,443				1,427				1,346				1,247				1,055
	Total non-performing assets		$	9,887			$	8,074			$	8,249			$	9,429			$	7,937
Loan loss reserve			$	10,144			$	10,167			$	10,092			$	10,038			$	9,943
Non-accrual loans/Gross loans				1.03	%			0.84	%			0.92	%			1.11	%			0.93	%
Loan loss reserves/Gross loans				1.24	%			1.28	%			1.34	%			1.36	%			1.34	%

CONSOLIDATED BALANCE SHEETS									(Extracted from
(Dollars in thousands)									audited annual
					(Unaudited)				financial statements)				(Unaudited)				(Unaudited)				(Unaudited)
					March 31,				December				September				June 30,				March 31,
					2017				31, 2016				30, 2016				2016				2016
ASSETS
	Cash and due from banks				$	25,337			$	15,758			$	17,342			$	20,564			$	37,737
	Interest-bearing time deposits with financial institutions					205				205				204				205				205
	Securities available for sale, at fair value					353,364				360,105				358,877				342,420				329,396
	Other equity securities					7,211				7,206				7,206				7,206				6,756
	Loans, net of deferred loan fees and allowance for loan losses					807,191				782,485				741,407				725,471				733,991
	Bank premises, equipment and leasehold improvements, net					9,571				9,837				9,918				10,114				10,320
	Bank owned life insurance					16,349				17,247				16,145				16,050				15,946
	Accrued interest receivable					4,785				4,942				4,544				4,547				4,603
	Other real estate owned					1,443				1,427				1,346				1,247				1,055
	Goodwill					4,580				4,580				4,580				4,580				4,580
	Prepaid expenses					768				856				670				783				945
	Other assets					15,917				14,746				15,309				15,393				15,444
		TOTAL ASSETS			$	1,246,721			$	1,219,394			$	1,177,548			$	1,148,580			$	1,160,978
LIABILITIES
	Deposits:
		Demand, noninterest bearing			$	287,029			$	296,273			$	285,767			$	267,593			$	265,947
		Demand, interest bearing				125,643				121,086				110,147				112,591				113,337
		Savings and money market				496,697				487,763				491,047				508,605				526,557
		Time				115,622				114,384				116,496				118,700				124,410
			Total Deposits			1,024,991				1,019,506				1,003,457				1,007,489				1,030,251
	Federal Home Loan Bank advances					86,000				71,000				37,000				7,000				-
	Note payable					4,200				4,350				4,500				4,650				4,800
	Accrued expenses and other liabilities					17,198				14,224				18,847				17,026				17,230
			Total Liabilities			1,132,389				1,109,080				1,063,804				1,036,165				1,052,281
STOCKHOLDERS' EQUITY
	Common stock, no par value:					84,603				76,433				76,065				75,944				75,240
	Retained Earnings					29,842				35,427				33,123				31,424				29,666
	Accumulated other comprehensive (losses) earnings, net of tax					(113	)			(1,546	)			4,556				5,047				3,791
			Total Stockholders' Equity			114,332				110,314				113,744				112,415				108,697
			TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY		$	1,246,721			$	1,219,394			$	1,177,548			$	1,148,580			$	1,160,978

CONSOLIDATED STATEMENTS OF INCOME				(Unaudited)
(Amounts in thousands, except per share amounts)				Three Months Ended
				March 31,				December				September				June 30,				March 31,
				2017				31, 2016				30, 2016				2016				2016
INTEREST INCOME
	Interest and fees on loans			$	10,073			$	9,578			$	9,301			$	9,563			$	9,871
	Interest on dividends and securities				1,943				1,925				1,815				1,731				1,685
	Interest on deposits with other financial institutions				11				7				6				22				9
		Total interest income			12,027				11,510				11,122				11,316				11,565
INTEREST EXPENSE
	Deposits				637				631				657				709				783
	Federal Home Loan Bank advances				145				48				10				1				8
	Interest on note payable				53				55				54				56				57
		Total interest expense			835				734				721				766				848
NET INTEREST INCOME					11,192				10,776				10,401				10,550				10,717
	Provision for loan losses				-				-				-				75				75
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES					11,192				10,776				10,401				10,475				10,642
NONINTEREST INCOME
	Service charges				597				599				623				618				621
	Net gain on sale of available-for-sale securities				28				57				140				57				184
	Earnings on bank owned life insurance				102				102				94				105				100
	Other income				283				565				245				256				229
		Total Noninterest Income			1,010				1,323				1,102				1,036				1,134
NONINTEREST EXPENSES
	Salaries and employee benefits				4,774				4,839				4,821				4,876				4,938
	Occupancy expense				651				635				645				617				631
	Equipment expense				402				448				445				438				434
	Professional fees				473				384				298				294				387
	FDIC assessment				130				150				150				150				150
	Telephone, postage, supplies				297				298				300				306				295
	Advertising expense				108				120				104				183				117
	Data processing expense				139				178				147				140				192
	Low income housing expense				105				71				71				71				71
	Surety insurance				84				85				88				87				87
	Director fees				72				72				72				72				72
	Other real estate owned expense (recovery), net				10				5				-				-				(10	)
	Other expenses				360				458				372				415				423
		Total Noninterest Expense			7,605				7,743				7,513				7,649				7,787
EARNINGS BEFORE PROVISION FOR INCOME TAXES					4,597				4,356				3,990				3,862				3,989
	Provision for income taxes				1,508				1,314				1,546				1,414				1,422
NET EARNINGS AVAILABLE TO COMMON STOCKHOLDERS				$	3,089			$	3,042			$	2,444			$	2,448			$	2,567

			(Unaudited)
			Three Months Ended
(Amounts in thousands, except per share			March 31,				December				September				June 30,				March 31,
amounts and percentages)			2017				31, 2016				30, 2016				2016				2016
Per Share Data:
	Basic earnings per share available to common stockholders		$	0.63			$	0.63			$	0.50			$	0.51			$	0.54
	Diluted earnings per share available to common stockholders		$	0.62			$	0.61			$	0.49			$	0.50			$	0.52
	Cash dividends declared		$	780			$	739			$	738			$	686			$	683
	Average shares outstanding			4,867				4,850				4,843				4,811				4,777
	Average diluted shares outstanding			5,012				4,974				4,953				4,930				4,921
	Shares outstanding as of end of period			4,874				4,853				4,847				4,837				4,794
SELECTED PERFORMANCE DATA
	Annualized return on average assets			1.00	%			1.02	%			0.84	%			0.85	%			0.90	%
	Annualized return on average equity			11.24	%			10.88	%			8.69	%			8.98	%			9.67	%
	Net interest margin (taxable equivalent)			3.98	%			3.89	%			3.88	%			3.96	%			4.10	%
	Average loans as a percent of average deposits			79.73	%			75.01	%			72.96	%			72.22	%			73.43	%
	Average total stockholders' equity as a % of average total assets			8.91	%			9.38	%			9.70	%			9.43	%			9.26	%
	Annualized common dividend payout ratio			25.25	%			24.29	%			30.20	%			28.02	%			26.61	%

							(Extracted from
LOANS							audited annual
(Dollars in thousands)			(Unaudited)				financial statements)				(Unaudited)				(Unaudited)				(Unaudited)
			March 31,				December				September				June 30,				March 31,
			2017				31, 2016				30, 2016				2016				2016
Real estate loans:
	Construction		$	49,490			$	43,683			$	38,162			$	29,251			$	42,465
	Commercial			432,301				421,222				404,841				398,290				411,999
	Multi family			112,911				105,963				83,946				82,637				59,993
	Residential			169,373				170,523				173,476				174,084				173,437
Commercial & industrial loans				49,277				48,874				50,967				51,366				55,694
Consumer loans				6,065				3,533				1,630				1,311				1,675
	Gross loans			819,417				793,798				753,022				736,939				745,263
Net deferred loan fees				(1,076	)			(1,146	)			(1,523	)			(1,430	)			(1,329	)
Allowance for loan losses				(10,144	)			(10,167	)			(10,092	)			(10,038	)			(9,943	)
	NET LOANS		$	808,197			$	782,485			$	741,407			$	725,471			$	733,991

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.