First National Bank of Northern California Reports

SOUTH SAN FRANCISCO, CA--(Marketwired - Jan 30, 2017) - FNB Bancorp (OTCQB: FNBG), parent company of First National Bank of Northern California (the "Bank"), today announced net earnings available to common stockholders for the fourth quarter of 2016 of $3,042,000 or $0.61 per diluted share, compared to net earnings available to common shareholders of $2,444,000 or $0.49 per diluted share for the third quarter of 2016, adjusted for 5% stock dividend paid in December, 2016. 

The fourth quarter of 2016 operating results, when compared to the same period a year ago, provide the first year over year comparison where the earnings subsequent to the America California Bank ("ACB") acquisition are fully reflected. During the fourth quarter of 2016, our net interest income was $10.8 million, an increase of $375,000 from the third quarter of 2016. This increase was primarily the result of an increase in the average volume of our interest earning assets.

"During the fourth quarter of 2016, the Company was able to grow our total assets by $42 million. This growth included an increase in gross loans of $41 million. The Company also experienced an $11 million increase in our demand deposit balances. Overall, the deposit portfolio increased by $16 million, due primarily to declines in interest rate sensitive money market balances. The bank was able to continue to grow our interest earning assets by obtaining $34 million in additional Federal Home Loan Bank advances from existing credit facilities during the quarter. The current low rate environment has put pressure on our net interest margin, but we have added loans and investments in order to expand our interest earning assets. Our net interest margin improved during the fourth quarter of 2016 by 1 basis point, due primarily to higher loan levels within our interest earning assets. We remain "well capitalized" by regulatory standards and our earnings are growing. We are proud of our accomplishments, which are the result of our emphasis on meeting our customers' needs and providing them with products delivered with a high level of customer service", stated CEO Tom McGraw. 

"Our total non-accrual loans balance decreased by $0.3 million during the fourth quarter. We continue to utilize a conservative underwriting approach in our loan origination process which should serve us well in the future. There was no fourth quarter provision for loan losses and our allowance for loan loss was considered by management to be sufficient, as of December 31, 2016", continued Tom McGraw.

CONSOLIDATED BALANCE SHEETS					(Unaudited)
(Dollars in thousands)					As of
					December 31,
					2016				2015
ASSETS
	Cash and due from banks				$	15,758			$	12,314
	Interest-bearing time deposits with financial institutions					205				205
	Securities available for sale, at fair value					360,105				329,207
	Other equity securities					7,206				6,748
	Loans, net of deferred loan fees and allowance for loan losses					782,485				722,747
	Bank premises, equipment and leasehold improvements, net					9,837				10,202
	Bank owned life insurance					16,247				15,845
	Accrued interest receivable					4,942				4,511
	Other real estate owned					1,427				1,026
	Goodwill					4,580				4,580
	Prepaid expenses					856				997
	Other assets					15,746				15,967
		TOTAL ASSETS			$	1,219,394			$	1,124,349
LIABILITIES
	Deposits:
		Demand, noninterest bearing			$	296,273			$	263,822
		Demand, interest bearing				121,086				102,304
		Savings and money market				487,763				491,633
		Time				114,384				125,430
			Total Deposits			1,019,506				983,189
	Federal Home Loan Bank advances					71,000				17,000
	Note payable					4,350				4,950
	Accrued expenses and other liabilities					14,224				15,048
			Total Liabilities			1,109,080				1,020,187
STOCKHOLDERS' EQUITY
	Common stock, no par value:					76,433				74,805
	Retained Earnings					35,427				27,816
	Accumulated other comprehensive earnings, net of tax					(1,546	)			1,541
		Total Stockholders' Equity				110,314				104,162
		TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY			$	1,219,394			$	1,124,349

CONSOLIDATED STATEMENTS OF EARNINGS				(Unaudited)							(Unaudited)
(Amounts in thousands, except per share amounts)				Three Months Ended							Twelve Months Ended
				December 31,							December 31,
				2016			2015				2016				2015
INTEREST INCOME
	Interest and fees on loans			$	9,578		$	9,361			$	38,313			$	33,235
	Interest on dividends and securities				1,925			1,657				7,156				6,008
	Interest on deposits with other financial institutions				7			3				44				39
	Total interest income				11,510			11,021				45,513				39,282
INTEREST EXPENSE
	Deposits				631			732				2,780				2,359
	Federal Home Loan Bank advances				48			7				67				9
	Interest on note payable				55			56				222				229
		Total interest expense			734			795				3,069				2,597
NET INTEREST INCOME					10,776			10,226				42,444				36,685
	Provision for loan losses				-			(530	)			150				(305	)
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES					10,776			10,756				42,294				36,990
NONINTEREST INCOME
	Service charges				599			645				2,461				2,501
	Net gain on sale of available-for-sale securities				57			89				438				339
	Earnings on bank owned life insurance				102			103				402				364
	Other income				565			290				1,294				1,292
		Total Noninterest Income			1,323			1,127				4,595				4,496
NONINTEREST EXPENSES
	Salaries and employee benefits				4,839			6,010				19,474				18,523
	Occupancy expense				635			611				2,528				2,517
	Equipment expense				448			393				1,765				1,926
	Professional fees				384			396				1,363				1,471
	FDIC assessment				150			150				600				600
	Telephone, postage, supplies				298			292				1,199				1,074
	Advertising expense				120			119				524				500
	Data processing expense				178			136				657				1,076
	Low income housing expense				71			71				284				283
	Surety insurance				85			83				347				381
	Director fees				72			72				288				288
	Other real estate owned expense (recovery), net				5			10				(5	)			4
	Other expenses				458			371				1,668				1,282
		Total Noninterest Expense			7,743			8,714				30,692				29,925
EARNINGS BEFORE PROVISION FOR INCOME TAXES					4,356			3,169				16,197				11,561
	Provision for income taxes				1,314			1,081				5,696				3,364
NET EARNINGS AVAILABLE TO COMMON STOCKHOLDERS				$	3,042		$	2,088			$	10,501			$	8,197
Per Share Data:
	Basic earnings per share available to common stockholders			$	0.63		$	0.44			$	2.18			$	1.73
	Diluted earnings per share available to common stockholders			$	0.61		$	0.43			$	2.12			$	1.68
	Cash dividends declared			$	739		$	648			$	2,847			$	2,409
	Average shares outstanding				4,850			4,763				4,822				4,742
	Average diluted shares outstanding				4,974			4,904				4,945				4,876
	Shares outstanding as of the end of period				4,853			4,769				4,853				4,769

FINANCIAL HIGHLIGHTS
(Dollars in thousands)
				(Unaudited)								(Unaudited)
				Three Months Ended								Twelve Months Ended
				December 31,								December 31,
				2016				2015				2016				2015
AVERAGE BALANCES:
	Total Assets			$	1,191,942			$	1,126,582			$	1,163,454			$	1,010,435
	Total Loans				763,654				715,026				746,829				629,814
	Total Earning Assets				1,127,339				1,038,581				1,091,703				923,700
	Total Deposits				1,018,071				999,024				1,017,398				890,369
	Total Stockholder's Equity				111,807				103,780				109,854				100,621
SELECTED PERFORMANCE DATA
	Annualized return on average assets				1.02	%			0.74	%			0.90	%			0.81	%
	Annualized return on average equity				10.88	%			8.05	%			9.56	%			8.15	%
	Net interest margin (taxable equivalent)				3.89	%			4.00	%			3.97	%			4.06	%
	Average loans as a percent of average deposits				75.01	%			71.57	%			73.41	%			70.74	%
	Average total stockholders' equity as a % of average total assets				9.38	%			9.21	%			9.44	%			9.96	%
	Annualized common dividend payout ratio				24.29	%			31.03	%			27.11	%			29.39	%
NON-PERFORMING ASSETS																(Extracted from
(Dollars In Thousands)																audited annual
		(Unaudited)		(Unaudited)				(Unaudited)				(Unaudited)				financial statements)
		December 31,			September 30,				June 30,				March 31,				December 31,
		2016			2016				2016				2016				2015
Non-accrual loans		$ 6,647		$	6,903			$	8,182			$	6,882			$	7,915
Other real estate owned		1,427			1,346				1,247				1,055				1,026
	Total non-performing assets	8,074			8,249				9,429				7,937				8,941
Loan loss reserve		$ 10,167		$	10,092			$	10,038			$	9,943			$	9,970
Non-accrual loans/Gross loans		0.84%			0.92	%			1.11	%			0.92	%			1.08	%
Loan loss reserves/Gross loans		1.28%			1.34	%			1.36	%			1.33	%			1.36	%

CONSOLIDATED BALANCE SHEETS																		(Extracted from
(Dollars in thousands)																		audited annual
					(Unaudited)				(Unaudited)			(Unaudited)			(Unaudited)			financial statements)
					December 31,				September 30,			June 30,			March 31,			December 31,
					2016				2016			2016			2016			2015
ASSETS
	Cash and due from banks				$	15,758			$	17,342		$	20,564		$	37,737		$	12,314
	Interest-bearing time deposits with financial institutions					205				204			205			205			205
	Securities available for sale, at fair value					360,105				358,877			342,420			329,396			329,207
	Other equity securities					7,206				7,206			7,206			6,756			6,748
	Loans, net of deferred loan fees and allowance for loan losses					782,485				741,407			725,471			733,991			722,747
	Bank premises, equipment and leasehold improvements, net					9,837				9,918			10,114			10,320			10,202
	Bank owned life insurance					17,247				16,145			16,050			15,946			15,845
	Accrued interest receivable					4,942				4,544			4,547			4,603			4,511
	Other real estate owned					1,427				1,346			1,247			1,055			1,026
	Goodwill					4,580				4,580			4,580			4,580			4,580
	Prepaid expenses					856				670			783			945			997
	Other assets					14,746				15,309			15,393			15,444			15,967
		TOTAL ASSETS			$	1,219,394			$	1,177,548		$	1,148,580		$	1,160,978		$	1,124,349
LIABILITIES
	Deposits:
	Demand, noninterest bearing				$	296,273			$	285,767		$	267,593		$	265,947		$	263,822
		Demand, interest bearing				121,086				110,147			112,591			113,337			102,304
		Savings and money market				487,763				491,047			508,605			526,557			491,633
		Time				114,384				116,496			118,700			124,410			125,430
			Total Deposits			1,019,506				1,003,457			1,007,489			1,030,251			983,189
	Federal Home Loan Bank advances					71,000				37,000			7,000			-			17,000
	Note payable					4,350				4,500			4,650			4,800			4,950
	Accrued expenses and other liabilities					14,224				18,847			17,026			17,230			15,048
			Total Liabilities			1,109,080				1,063,804			1,036,165			1,052,281			1,020,187
STOCKHOLDERS' EQUITY
	Common stock, no par value:					76,433				76,065			75,944			75,240			74,805
	Retained Earnings					35,427				33,123			31,424			29,666			27,816
	Accumulated other comprehensive earnings, net of tax					(1,546	)			4,556			5,047			3,791			1,541
			Total Stockholders' Equity			110,314				113,744			112,415			108,697			104,162
			TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY		$	1,219,394			$	1,177,548		$	1,148,580		$	1,160,978		$	1,124,349

CONSOLIDATED STATEMENTS OF INCOME				(Unaudited)
(Amounts in thousands, except per share amounts)				Three Months Ended
				December 31,			September 30,			June 30,			March 31,				December 31,
				2016			2016			2016			2016				2015
INTEREST INCOME
	Interest and fees on loans			$	9,578		$	9,301		$	9,563		$	9,871			$	9,361
	Interest on dividends and securities				1,925			1,815			1,731			1,685				1,657
	Interest on deposits with other financial institutions				7			6			22			9				3
		Total interest income			11,510			11,122			11,316			11,565				11,021
INTEREST EXPENSE
	Deposits				631			657			709			783				734
	Federal Home Loan Bank advances				48			10			1			8				7
	Interest on note payable				55			54			56			57				56
		Total interest expense			734			721			766			848				797
NET INTEREST INCOME					10,776			10,401			10,550			10,717				10,224
	Provision (recovery) for loan losses				-			-			75			75				(530	)
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES					10,776			10,401			10,475			10,642				10,754
NONINTEREST INCOME
	Service charges				599			623			618			621				647
	Net gain on sale of available-for-sale securities				57			140			57			184				89
	Earnings on bank owned life insurance				102			94			105			100				103
	Other income				565			245			256			229				290
		Total Noninterest Income			1,323			1,102			1,036			1,134				1,129
NONINTEREST EXPENSES
	Salaries and employee benefits				4,839			4,821			4,876			4,938				6,010
	Occupancy expense				635			645			617			631				611
	Equipment expense				448			445			438			434				393
	Professional fees				384			298			294			387				396
	FDIC assessment				150			150			150			150				150
	Telephone, postage, supplies				298			300			306			295				292
	Advertising expense				120			104			183			117				119
	Data processing expense				178			147			140			192				136
	Low income housing expense				71			71			71			71				71
	Surety insurance				85			88			87			87				83
	Director fees				72			72			72			72				72
	Other real estate owned expense (recovery), net				5			-			-			(10	)			10
	Other expenses				458			372			415			423				371
		Total Noninterest Expense			7,743			7,513			7,649			7,787				8,714
EARNINGS BEFORE PROVISION FOR INCOME TAXES					4,356			3,990			3,862			3,989				3,169
	Provision for income taxes				1,314			1,546			1,414			1,422				1,081
NET EARNINGS AVAILABLE TO COMMON STOCKHOLDERS				$	3,042		$	2,444		$	2,448		$	2,567			$	2,088

			(Unaudited)
			Three Months Ended
(Amounts in thousands, except per share			December 31,				September 30,				June 30,				March 31,				December 31,
amounts and percentages)			2016				2016				2016				2016				2015
Per Share Data:
	Basic earnings per share available to common stockholders		$	0.63			$	0.50			$	0.51			$	0.54			$	0.44
	Diluted earnings per share available to common stockholders		$	0.61			$	0.49			$	0.50			$	0.52			$	0.43
	Cash dividends declared		$	739			$	738			$	686			$	683			$	680
	Average shares outstanding			4,850				4,843				4,811				4,777				4,711
	Average diluted shares outstanding			4,974				4,953				4,930				4,921				4,854
	Shares outstanding as of end of period			4,853				4,847				4,837				4,794				4,769
SELECTED PERFORMANCE DATA
	Annualized return on average assets			1.02	%			0.84	%			0.85	%			0.90	%			0.91	%
	Annualized return on average equity			10.88	%			8.69	%			8.98	%			9.67	%			8.51	%
	Net interest margin (taxable equivalent)			3.89	%			3.88	%			3.96	%			4.14	%			4.17	%
	Average loans as a percent of average deposits			75.01	%			72.96	%			72.22	%			73.43	%			71.11	%
	Average total stockholders' equity as a % of average total assets			9.38	%			9.70	%			9.43	%			9.26	%			10.68	%
	Annualized common dividend payout ratio			24.29	%			30.20	%			28.02	%			26.61	%			32.57	%
																			(Extracted from
LOANS																			audited annual
(Dollars in thousands)			(Unaudited)				(Unaudited)				(Unaudited)				(Unaudited)				financial statements)
			December 31,				September 30,				June 30,				March 31,				December 31,
			2016				2016				2016				2016				2015
Real Estate Loans:
	Construction		$	43,683			$	38,162			$	29,251			$	42,465			$	44,816
	Commercial			421,222				404,841				398,290				411,999				399,993
	Multi family			105,963				83,946				82,637				59,993				63,597
	Residential			170,523				173,476				174,084				173,437				171,964
Commercial & industrial loans				48,874				50,967				51,366				55,694				52,033
Consumer loans				3,533				1,630				1,311				1,675				1,574
	Gross Loans			793,798				753,022				736,939				745,263				733,977
Net deferred loan fees				(1,146	)			(1,523	)			(1,430	)			(1,329	)			(1,260	)
Allowance for loan losses				(10,167	)			(10,092	)			(10,038	)			(9,943	)			(9,970	)
	NET LOANS		$	782,485			$	741,407			$	725,471			$	733,991			$	722,747

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.