First National Bank of Northern California Reports Third Quarter 2012 Earnings of $1.33 per Diluted Share

SOUTH SAN FRANCISCO, CA--(Marketwire - Nov 2, 2012) -  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 third quarter of 2012 of $4,783,000 or $1.33 per diluted share, compared to net earnings available to common shareholders of $817,000 or $0.23 per diluted share for the third quarter of 2011. During September 2012, Oceanic Bank Holding, Inc. and its wholly-owned subsidiary, Oceanic Bank, were acquired by FNB Bancorp. The material increase in earnings, assets and loans year over year were enhanced by this one-time event. Dividend payments on the preferred shares outstanding were made as required by the Treasury Department's Small Business Lending Program during the third quarter of 2012 and the third quarter of 2011. Total assets as of September 30, 2012 were $897,724,000 compared to $723,020,000 as of September 30, 2011. Our net loan totals increased by $103,828,000 or 23.4% during the nine months of this year, and our deposits increased $170,186,000 or 27.4% during the same time period. The Company's liquidity position remains strong with $228,805,000 in available for sale securities and $70,803,000 in cash and cash equivalents as of September 30, 2012.

On September 15, 2011, Preferred Stock was issued by FNB Bancorp to the U. S. Treasury as part of the U. S. Treasury's Small Business Lending Fund ("SBLF"). The initial dividend rate is 5%. Depending on the volume of our small business lending, it can decrease to as low as one percent. If our small business lending does not increase in the first two years, the rate will increase to seven percent. After 4.5 years, the dividend rate will increase to nine percent if the Company has not repaid the SBLF funding. The proceeds of this Preferred Stock investment were used to pay off the Preferred Stock Series A and B that were issued by the U. S. Treasury under the TARP program in 2009.

"With respect to the recent acquisition of Oceanic Bank, all the employees of Oceanic were offered employment with First National Bank of Northern California, so there were no layoffs that resulted from this transaction. Adding Oceanic Bank's locations, customers, and employee expertise to that of our own will give us a greater presence in San Francisco. During the third quarter of 2012, our nonperforming loans continued to decrease, excluding the nonperforming loans acquired in the Oceanic Bank merger and one large nonperforming credit relationship was paid off in full," stated Tom McGraw, Chief Executive Officer.

Financial Highlights: Third Quarter, 2012
Consolidated Statements of Earnings
(in '000s except earnings per share amounts)
			Three months ended September 30, 2012				Three months ended September 30, 2011				Nine months ended September 30, 2012				Nine months ended September 30, 2011
Interest income			$	8,355			$	8,241			$	24,115			$	24,730
Interest expense				663				842				2,000				2,583
	Net interest income			7,692				7,399				22,115				22,147
Provision for loan losses				(400	)			(450	)			(1,200	)			(1,300	)
Noninterest income				4,770				1,367				8,105				3,769
Noninterest expense				6,631				6,783				20,182				20,303
	Income before income taxes			5,431				1,533				8,838				4,313
Income tax expense				490				344				1,381				1,141
	Net earnings			4,941				1,189				7,457				3,172
	Dividends and discount accretion on preferred stock			158				372				501				800
	Net earnings available to common shareholders		$	4,783			$	817			$	6,956			$	2,372
Basic earnings per share			$	1.36			$	0.23			$	1.98			$	0.68
Diluted earnings per share			$	1.33			$	0.23			$	1.95			$	0.67
Average assets			$	787,264			$	724,083			$	757,792			$	716,068
Average equity			$	90,135			$	84,574			$	88,834			$	82,872
Return on average assets (annualized)				2.43	%			0.45	%			1.22	%			0.44	%
Return on average equity (annualized)				21.23	%			3.86	%			10.44	%			3.82	%
Efficiency ratio				53	%			77	%			67	%			78	%
Net interest margin (taxable equivalent)				4.58	%			4.83	%			4.55	%			4.92	%
Average shares outstanding				3,516				3,509				3,513				3,509
Average diluted shares outstanding				3,583				3,528				3,569				3,528

"During the third quarter, we demonstrated our ability to grow our deposits and our loan pipeline volumes are increasing. We have hired Stuart Keirle to enhance our business development efforts in San Francisco, and we have successfully expanded our lending reach into Santa Clara County with our loan production office in Sunnyvale. We are continually looking for ways to add value to our franchise, either through expansion of our branch and lending operations organically or through successful acquisitions. However, our primary objective has been, and will continue to be, to provide local banking services that our customers need with service levels that exceed expectations," continued Mr. McGraw.

Financial Highlights: Third Quarter, 2012
Consolidated Balance Sheets
(in '000s)				As of September 30, 2012			As of December 31, 2011			As of September 30, 2011			As of December 31, 2010
	Assets:
Cash and cash equivalents				$	70,803		$	38,474		$	69,273		$	60,874
Securities available for sale					228,805			187,664			152,376			126,189
Loans, net					547,549			443,721			456,106			474,828
Premises, equipment and leasehold improvements, net					12,761			13,227			13,399			13,535
Other real estate owned, net					1,923			2,747			2,988			6,680
Goodwill					1,841			1,841			1,841			1,841
Other equity securities					5,888			4,608			4,768			5,246
Accrued interest receivable					3,639			3,614			3,120			3,765
Prepaid expenses					1,513			2,107			1,753			2,843
Other assets					23,002			17,638			17,396			18,838
	Total assets			$	897,724		$	715,641		$	723,020		$	714,639
		Liabilities and stockholders' equity:
Deposits:
Demand and NOW				$	254,611		$	202,690		$	201,823		$	197,650
Savings and money market					351,078			310,237			324,321			305,390
Time					186,275			108,851			105,510			125,400
	Total deposits				791,964			621,778			631,654			628,440
Accrued expenses and other liabilities					11,044			6,667			5,672			5,275
	Total liabilities				803,008			628,445			637,326			633,715
Stockholders' equity					94,716			87,196			85,694			80,924
	Total liab. and stockholders' equity			$	897,724		$	715,641		$	723,020		$	714,639
Other Financial Information
Allowance for loan losses				$	8,582		$	9,897		$	9,646		$	9,524
Nonperforming assets				$	25,555		$	21,845		$	19,168		$	23,392
Total gross loans				$	556,131		$	453,618		$	465,752		$	484,352

On September 21, 2012, FNB Bancorp completed its purchase of Oceanic Bank Holding, Inc., the sole shareholder of Oceanic Bank. As part of the purchase transaction, Oceanic Bank Holding, Inc. was merged into FNB Bancorp, and Oceanic Bank was merged into First National Bank of Northern California. The assets and liabilities were valued at fair value at the time the purchase was completed. Listed below is a summary of the balance sheet of Oceanic Bank at acquisition, the preliminary estimates of the balance sheet effects of recording the assets and liabilities at fair value, and the post-merger balance sheet positions that were merged into First National Bank of Northern California. The purchase transaction was an all cash deal for $27,750,000, which resulted in a bargain purchase gain of $3,666,133 which is recorded as non-interest income.

Oceanic Bank
Statement of Financial Condition
As of Friday, September 21, 2012 PST
Description			Balance as of 9/21/2012				Merger and Fair Market Adjustments (2)							Balance post merger
Assets
Cash and Due From Banks			$	9,297,624			$	(27,671,585	)		(1	)		$	(18,373,961	)
Time deposits				17,096,333				-							17,096,333
MBS and CMO securities				5,292,917				(209,612	)						5,083,305
Commercial paper investments				8,303,735				-							8,303,735
Gross loans				107,483,947				-							107,483,947
Loan purchase discount				-				(4,290,371	)						(4,290,371	)
Less: Allowance for loan and lease losses				(1,902,092	)			1,902,092							-
Fixed assets and suspense accounts				42,867				-							42,867
Interest receivable				396,587				-							396,587
Prepaid assets				96,586				-							96,586
Deferred tax assets				1,008,860				972,000							1,980,860
Core deposit intangibles				-				109,544							109,544
	Total assets		$	147,117,364			$	(29,187,932	)					$	117,929,432
Liabilities
DDA and savings deposits			$	24,075,230				-						$	24,075,230
Time deposits				83,544,506				49,401							83,593,907
	Total deposits		$	107,619,736			$	49,401						$	107,669,137
FHLB Borrowings				6,015,000											6,015,000
Deferred interest offset - FHLB Borrowings				-				81,711							81,711
Interest payable				163,735				-							163,735
Accounts payable				333,716				-							333,716
	Total liabilities		$	114,132,187			$	131,112						$	114,263,299
Equity:
Capital Stock			$	10,000,000			$	(10,000,000	)					$	-
Retained earnings				22,086,214				(22,086,214	)						-
Bargain purchase gain				-				3,666,133							3,666,133
YTD 2012 net earnings				898,963				(898,963	)						-
	Total Equity		$	32,985,177			$	(29,319,044	)					$	3,666,133
Total liabilities and equity			$	147,117,364			$	(29,187,932	)					$	117,929,432

Footnotes:

1) The $27,671,585 is the purchase price of $27,750,000 plus escrow costs less funds held in the name of Oceanic Holding, Inc. They are not fair value adjustments to book valuations.

2) All fair market value adjustments contained in this schedule are based on the facts known at this time. Subsequent information may become available that could cause these fair market adjustments to change.

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.