SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   FORM 10-K/A
                                (Amendment No. 3)

[X]   Annual report pursuant to Section 13 or 15(d) of the Securities Exchange
      Act of 1934 for the fiscal year ended December 31, 2006, or

[ ]   Transition report pursuant to Section 13 or 15 (d) of Securities Exchange
      Act of 1934

                          Commission File No. 000-49693


                                   FNB BANCORP
             ------------------------------------------------------
             (Exact name of registrant as specified in its charter)



            California                                       92-2115369
----------------------------------                    --------------------------
 (State or other jurisdiction of                       (IRS Employer ID Number)
  incorporation or organization)


975 El Camino Real, South San Francisco, California             94080
----------------------------------------------------         ------------
     (Address of principal executive offices)                 (Zip code)


                                 (650) 588-6800
              ----------------------------------------------------
              (Registrant's telephone number, including area code)

      Securities registered pursuant to Section 12(b) of the Act: None

      Securities registered pursuant to Section 12(g) of the Act: ____________

                                      Title of Class: Common Stock, no par value

Indicate by check mark if the registrant is a well-known seasoned issuer, as
defined in Rule 405 of the Securities Act. Yes [ ] No [X]

Indicate by check mark if the registrant is not required to file reports
pursuant to Section 13 or Section 15(d) of the Act. Yes [ ] No [X]

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes [X] No [ ]

Indicate by check mark if disclosure of delinquent filers pursuant to item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of the registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this 10-K [ ]

Indicate by check mark whether the registrant is a large accelerated filer, an
accelerated filer or a non-accelerated filer. See definition of "accelerated
filer and large accelerated filer" in Rule 12b-2 of the Exchange Act. (Check
one):

Large accelerated filer [ ]   Accelerated filer [X]    Non-accelerated filer [ ]

Indicate by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Act). Yes [ ] No [X]

<PAGE>

     Aggregate market value of the voting and non-voting common equity held
   by non-affiliates of the registrant, computed by reference to the price at
 which the common equity was last sold, or the average bid and asked price of
 such common equity, as of the last business day of the registrant's most
              recently completed second fiscal quarter: $80,097,545

   Number of shares outstanding of each of the registrant's classes of common
                          stock, as of October 30, 2007

            No par value Common Stock - 2,828,936 Shares outstanding.

  DOCUMENTS INCORPORATED BY REFERENCE The following documents are incorporated
      by reference into this Form 10-K: Part III, Items 10 through 14 from
     Registrant's definitive proxy statement for the 2007 annual meeting of
                                  shareholders.

                                        2

<PAGE>

                                EXPLANATORY NOTE

This Form 10-K/A amends our report on Form 10-K for the fiscal year ended
December 31, 2006 solely for the purpose of amending the Report of Independent
Registered Public Accounting Firm on Internal Control over Financial Reporting,
which appeared on page 50 of the original report on Form 10-K for the fiscal
year ended December 31, 2006, to include our independent registered public
accounting firm's opinion on (i) management's assessment of the effectiveness of
internal control over financial reporting; and (ii) the effectiveness of our
internal control over financial reporting in all material respects. The amended
Report of Independent Registered Public Accounting Firm on Internal Control over
Financial Reporting (the "Amended Report") set forth below includes these
opinions. In addition, we have included as exhibits to this Form 10-K/A: (i)
currently dated certifications from our Chief Executive Officer and Chief
Financial Officer, and (ii) a Consent of Independent Registered Public
Accounting Firm to use of the Amended Report in certain Securities Act filings
into which the Amended Report is incorporated by reference. Also included is the
Report of Independent Registered Public Accounting firm of KPMG LLP, covering
the accompanying consolidated states of earnings, stockholder's equity and
comprehensive income and cash flows of FNB Bancorp and Subsidiary for the year
ended December 31, 2004. Management acknowledges that we are responsible for the
adequacy and accuracy of all of the disclosures in the filing.

Except as described above, no attempt has been made in this Form 10-K/A to
modify or update other disclosures presented in the original report on Form 10-K
for the fiscal year ended December 31, 2006. Accordingly, this Form 10-K/A does
not reflect events occuring after the date of the original filing of the Form
10-K or modify or update those disclosures affected by subsequent events.
Consequently, all other information not affected by this Form 10-K/A is
unchanged by this Form 10-K/A and reflects the disclosures made at the time of
the original filing of the Form 10-K on March 14, 2007. For a description of
subsequent events, this Form 10-K/A should be read in conjunction with our
filings made subsequent to March 14, 2007, including our report on Form 10-Q for
the quarters ended March 31, and June 30, 2007 and each of our reports on Form
8-K since March 14, 2007.

FNB BANCORP

Unless the context otherwise requires, all references to this Annual Report on
Form 10-K/A to "the Company" refer to FNB Bancorp and its subsidiary, first
National Bank of Northern California.

                                        3

<PAGE>

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

INDEX TO FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
                                                                                                                               Page
                                                                                                                               ----
<S>                                                                                                                              <C>
Reports of Independent Registered Public Accounting Firms ..................................................................     50

Consolidated Balance Sheets, December 31, 2006 and 2005 ....................................................................     53

Consolidated Statements of Earnings for the years ended December 31, 2006, 2005 and 2004 ...................................     54

Consolidated Statements of Stockholders' Equity and Comprehensive Income for the years ended December 31, 2006, 2005
  and 2004 .................................................................................................................     55

Consolidated Statements of Cash Flows for the years ended December 31, 2006, 2005 and 2004 .................................     56

Notes to Consolidated Financial Statements .................................................................................     57
</TABLE>

                                       49

<PAGE>

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Stockholders and Directors
FNB Bancorp

We have audited the accompanying consolidated balance sheets of FNB Bancorp and
subsidiary (the Company) as of December 31, 2006 and 2005 and the related
consolidated statements of earnings, stockholders' equity and comprehensive
income and cash flows for the two years ended December 31, 2006. We have also
audited management's assessment, included in the accompanying Management Report
on Internal Control over Financial Reporting, that the Company maintained
effective internal control over financial reporting as of December 31, 2006,
based on criteria established in Internal Control - Integrated Framework issued
by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
The Company's management is responsible for these financial statements,
maintaining effective internal control over financial reporting, and for its
assessment of the effectiveness of internal control over financial reporting.
Our responsibility is to express an opinion on these financial statements, an
opinion on management's assessment, and an opinion on the effectiveness of the
Company's internal control over financial reporting based on our audits.

We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement and whether internal control over
financial reporting was maintained in all material respects. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. An audit of internal
control over financial reporting includes obtaining an understanding of internal
control over financial reporting, evaluating management's assessment, testing
and evaluating the design and operating effectiveness of internal control, and
performing such other procedures as we considered necessary in the
circumstances. We believe that our audits provide a reasonable basis for our
opinion.

A company's internal control over financial reporting is a process designed to
provide reasonable assurance regarding the reliability of financial reporting
and the preparation of financial statements for external purposes in accordance
with generally accepted accounting principles. A company's internal control over
financial reporting includes those policies and procedures that (1) pertain to
the maintenance of records that, in reasonable detail, accurately and fairly
reflect the transactions and dispositions of assets of the company; (2) provide
reasonable assurance that transactions are recorded as necessary to permit
preparation of financial statements in accordance with generally accepted
accounting principles, and that receipts and expenditures of the company are
being made in accordance with authorizations of management and directors of the
company; and (3) provide

                                       50

<PAGE>

reasonable assurance regarding prevention or timely detection of unauthorized
acquisition, use or disposition of the company's assets that could have a
material effect on the financial statements.

Because of the inherent limitations, internal control over financial reporting
may not prevent or detect misstatements. Also, projections of any evaluation of
the effectiveness to future periods are subject to the risk that controls may
become inadequate because of changes in conditions, or that the degree of
compliance with policies or procedures may deteriorate.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of FNB Bancorp and subsidiary as
of December 31, 2006 and 2005 and the results of their operations and cash flows
for the two years ended December 31, 2006 in conformity with accounting
principles generally accepted in the United States of America. Also, in our
opinion management's assessment that FNB Bancorp and subsidiary maintained
effective internal control over financial reporting as of December 31, 2006, is
fairly stated, in all material respects, based on criteria established in
Internal Control - Integrated Framework issued by the COSO. Furthermore, in our
opinion, FNB Bancorp and subsidiary maintained, in all material respects,
effective internal control over financial reporting as of December 31, 2006,
based on criteria established in Internal Control - Integrated Framework issued
by the COSO.

As discussed in notes 1 and 16 to the financial statements, effective January 1,
2006, the Company changed its method of accounting for share-based payment
arrangements to conform to Statement of Financial Accounting Standard No.
123(R), "Share-Based Payment".

/s/ Moss Adams LLP

Stockton, California
March 14, 2007

                                       51
<PAGE>
KPMG
[GRAPHIC LOGO OMITTED]

                              KPMG LLP
                              55 Second Street
                              San Francisco, CA 94105

            REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM


The Board of Directors and Stockholders FNB Bancorp:

We have audited the accompanying consolidated balance sheets of FNB Bancorp and
subsidiary (the Company) as of December 31, 2004 and 2003, and the related
consolidated statements of earnings, stockholders' equity and comprehensive
income, and cash flows for each of the years in the three-year period ended
December 31, 2004. These consolidated financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these consolidated financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of the Company as of
December 31, 2004 and 2003, and the results of their operations and their cash
flows for each of the years in the three-year period ended December 31, 2004, in
conformity with U.S. generally accepted accounting principles.

                                             /s/ KPMG LLP

San Francisco, California
March 3, 2005

                                       52
<PAGE>

                           FNB BANCORP AND SUBSIDIARY

                           Consolidated Balance Sheets

                           December 31, 2006 and 2005

<TABLE>
<CAPTION>
                                                                                 2006          2005
                                                                             -----------   -----------
<S>                                                                          <C>           <C>
                                     Assets
Cash and due from banks                                                       18,297,000    19,068,000
Federal funds sold                                                             8,725,000    16,230,000
                                                                             -----------   -----------
            Cash and cash equivalents                                         27,022,000    35,298,000
Securities available-for-sale                                                 94,945,000   113,463,000
Loans, net                                                                   419,437,000   380,224,000
Bank premises, equipment, and leasehold improvements                          13,476,000    12,028,000
Other real estate owned                                                               --     2,600,000
Goodwill                                                                       1,841,000     1,841,000
Accrued interest receivable and other assets                                  24,549,000    23,860,000
                                                                             -----------   -----------
     Total Assets                                                            581,270,000   569,314,000
                                                                             ===========   ===========
               Liabilities and stockholders' equity
Deposits:
     Demand, noninterest bearing                                             123,884,000   123,641,000
     Demand, interest bearing                                                 60,378,000    62,581,000
     Savings                                                                 162,915,000   180,489,000
     Time                                                                    134,390,000   140,833,000
                                                                             -----------   -----------
            Total deposits                                                   481,567,000   507,544,000
                                                                             -----------   -----------
Federal Home Loan Bank advances                                               30,000,000            --
Accrued expenses and other liabilities                                         7,640,000     6,527,000
                                                                             -----------   -----------
            Total liabilities                                                519,207,000   514,071,000
                                                                             -----------   -----------
Commitments and contingencies (notes 9 and 13)
Stockholders' equity:
     Common stock, no par value; authorized 10,000,000 shares;
        issued and outstanding 2,853,000 and 2,700,000 shares
        on December 31, 2006 and 2005, respectively                           39,824,000    34,793,000
     Additional paid-in capital                                                  141,000        19,000
     Retained earnings                                                        22,102,000    20,832,000
     Accumulated other comprehensive loss                                         (4,000)     (401,000)
                                                                             -----------   -----------
            Total stockholders' equity                                        62,063,000    55,243,000
                                                                             -----------   -----------
     Total liabilities and stockholders' equity                              581,270,000   569,314,000
                                                                             ===========   ===========
</TABLE>

See accompanying notes to consolidated financial statements.

                                       53

<PAGE>

                           FNB BANCORP AND SUBSIDIARY

                       Consolidated Statements of Earnings

                  Years ended December 31, 2006, 2005 and 2004

<TABLE>
<CAPTION>
                                                                     2006           2005           2004
                                                                 ------------   ------------   -----------
<S>                                                              <C>            <C>            <C>
Interest income:
   Interest and fees on loans                                    $ 31,898,000   $ 26,754,000    21,226,000
   Interest and dividends on securities                             2,576,000      2,173,000     1,418,000
   Interest on tax-exempt securities                                2,039,000      1,512,000     1,250,000
   Federal funds sold                                                 683,000        293,000       152,000
                                                                 ------------   ------------   -----------
      Total interest income                                        37,196,000     30,732,000    24,046,000
Interest expense:
   Deposits                                                         8,839,000      5,440,000     2,460,000
   Federal Home Loan Bank advances                                    880,000         41,000        --
   Federal funds purchased                                            102,000         52,000        73,000
                                                                 ------------   ------------   -----------
      Total interest expense                                        9,821,000      5,533,000     2,533,000
                                                                 ------------   ------------   -----------
      Net interest income                                          27,375,000     25,199,000    21,513,000
Provision for loan losses                                             683,000        628,000       408,000
                                                                 ------------   ------------   -----------
      Net interest income after provision for loan losses          26,692,000     24,571,000    21,105,000
                                                                 ------------   ------------   -----------
Noninterest income:
   Gain on sale of other equity securities                          1,352,000             --            --
   Gain on sale of other real estate owned                            756,000             --            --
   Service charges                                                  2,463,000      2,305,000     2,500,000
   Credit card fees                                                   839,000        856,000       886,000
   Gain (loss) on impairment and sale of investment securities        (11,000)      (101,000)      (31,000)
   Other                                                              860,000        781,000       432,000
                                                                 ------------   ------------   -----------
      Total noninterest income                                      6,259,000      3,841,000     3,787,000
                                                                 ------------   ------------   -----------
Noninterest expense:
   Salaries and employee benefits                                  12,300,000     11,344,000    10,521,000
   Occupancy expense                                                1,728,000      1,444,000     1,288,000
   Equipment expense                                                1,665,000      1,624,000     1,662,000
   Advertising expense                                                770,000        710,000       472,000
   Data processing expense                                            452,000        416,000       344,000
   Professional fees                                                1,278,000        952,000     1,086,000
   Director expense                                                   207,000        180,000       180,000
   Surety insurance                                                   479,000        555,000       479,000
   Telephone, postage, supplies                                     1,056,000        939,000     1,103,000
   Bankcard expenses                                                  797,000        802,000       803,000
   Other                                                            1,028,000      1,289,000       689,000
                                                                 ------------   ------------   -----------
      Total noninterest expense                                    21,760,000     20,255,000    18,627,000
                                                                 ------------   ------------   -----------
      Earnings before income tax expense                           11,191,000      8,157,000     6,265,000
Income tax expense                                                  3,609,000      2,429,000     1,577,000
                                                                 ------------   ------------   -----------
      Net earnings                                               $  7,582,000   $  5,728,000     4,688,000
                                                                 ============   ============   ===========
Earnings per share data:
   Basic                                                         $       2.67   $       2.02   $      1.63
   Diluted                                                       $       2.60   $       1.98   $      1.60
Weighted average shares outstanding:
   Basic weighted average shares outstanding                        2,845,000      2,834,000     2,883,000
   Diluted weighted average shares outstanding                      2,915,000      2,893,000     2,934,000
</TABLE>

See accompanying notes to consolidated financial statements.

                                       54

<PAGE>

                           FNB BANCORP AND SUBSIDIARY

    Consolidated Statements of Stockholders' Equity and Comprehensive Income

                  Years ended December 31, 2006, 2005 and 2004

<TABLE>
<CAPTION>
                                                                                            Accumulated
                                                Common stock       Additional                  other
                                          -----------------------    paid-in    Retained   comprehensive  Comprehensive
                                            Shares      Amount       capital    earnings       income         income        Total
                                          ---------  ------------  ----------  ----------  -------------  -------------  ----------
<S>                                       <C>        <C>           <C>         <C>         <C>            <C>            <C>
Balance at December 31, 2003              2,519,000  $ 28,903,000       3,000  22,041,000      1,040,000                 51,987,000
Net earnings                                     --            --          --   4,688,000             --      4,688,000   4,688,000
Other comprehensive income:
   Unrealized gain on securities, net of
     tax benefit of $330,000                     --            --          --          --       (474,000)      (474,000)   (474,000)
                                                                                                          -------------
Comprehensive income                                                                                      $   4,214,000
                                                                                                          =============
Cash dividends of $0.12 per share,
  quarterly                                      --            --          --  (1,210,000)            --             --  (1,210,000)
Special cash dividend of $0.12 per share                                         (316,000)                                 (316,000)
Stock dividend of 5%                        124,000     4,514,000              (4,514,000)                                       --
Stock-based compensation
  expense                                        --            --       6,000          --             --                      6,000
Stock repurchased and retired               (69,000)   (2,324,000)         --          --             --                 (2,324,000)
Stock options exercised                      12,000       272,000          --          --             --                    272,000
                                          ---------  ------------  ----------  ----------  -------------                 ----------
Balance at December 31, 2004              2,586,000    31,365,000       9,000  20,689,000        566,000                 52,629,000
Net earnings                                     --            --          --   5,728,000             --      5,728,000   5,728,000
Other comprehensive income:
   Unrealized loss on securities,
     net of tax benefit of $671,000              --            --          --          --       (967,000)      (967,000)   (967,000)
                                                                                                          -------------
Comprehensive income                                                                                      $   4,761,000
                                                                                                          =============
Cash dividends of $0.15
  per share, quarterly                           --            --          --  (1,535,000)            --                 (1,535,000)
Stock dividend of 5%                        128,000     4,043,000              (4,043,000)                                       --
Cash on fractional shares related
  to stock dividend                                                                (7,000)                                   (7,000)
Stock-based compensation
  expense                                        --            --      10,000          --             --                     10,000
Stock repurchased and retired               (21,000)     (765,000)         --          --             --                   (765,000)
Stock options exercised                       7,000       150,000          --          --             --                    150,000
                                          ---------  ------------  ----------  ----------  -------------                 ----------
Balance at December 31, 2005              2,700,000    34,793,000      19,000  20,832,000       (401,000)                55,243,000
Net earnings                                     --            --          --   7,582,000             --      7,582,000   7,582,000
Other comprehensive income:
   Unrealized gain on securities,
     net of tax provision of
     $276,000                                    --            --          --          --        397,000        397,000     397,000
                                                                                                          -------------
Comprehensive income                                                                                      $   7,979,000
                                                                                                          =============
Cash dividends of $0.15 per share
  share, quarterly                               --            --          --  (1,625,000)            --                 (1,625,000)
Stock dividend of 5%                        136,000     4,679,000              (4,679,000)                                       --
Stock-based compensation expense                                       39,000                                                39,000
Cash on fractional shares related
  To stock dividend expense                                                        (8,000)                                   (8,000)
Stock repurchased and retired                (2,000)      (73,000)         --          --             --                    (73,000)
Stock options exercised, including
  tax benefit of $83,000                     19,000       425,000      83,000          --             --                    508,000
                                          ---------  ------------  ----------  ----------  -------------                 ----------
Balance at December 31, 2006              2,853,000  $ 39,824,000     141,000  22,102,000         (4,000)                62,063,000
                                          =========  ============  ==========  ==========  =============                 ==========
</TABLE>

See accompanying notes to consolidated financial statements.

                                       55

<PAGE>

                           FNB BANCORP AND SUBSIDIARY

                      Consolidated Statements of Cash Flows

                        December 31, 2006, 2005 and 2004

<TABLE>
<CAPTION>
                                                                             2006            2005            2004
                                                                        -------------   -------------   -------------
<S>                                                                     <C>               <C>             <C>
Cash flows from operating activities:
   Net earnings                                                         $   7,582,000       5,728,000       4,688,000
   Adjustments to reconcile net earnings to cash
     provided by operating activities:
      Depreciation, amortization and accretion, net                         1,220,000       1,594,000       1,790,000
      Loss on sale of investment securities                                    11,000         101,000          31,000
      Gain on sale of other equity securities                              (1,352,000)
      Securities write-down                                                        --         116,000              --
      Stock-based compensation expense                                         39,000          10,000           6,000
      Gain on sale of other real estate owned                                (756,000)
      Provision for loan losses                                               683,000         600,000         480,000
      Deferred taxes                                                           (7,000)       (181,000)         74,000
      Changes in assets and liabilities:
         Accrued interest receivable and other assets                         669,000      (5,149,000)     (6,422,000)
         Accrued expenses and other liabilities                             1,011,000       1,720,000       2,083,000
                                                                        -------------   -------------   -------------
            Net cash provided by operating activities                       9,100,000       4,539,000       2,730,000
                                                                        -------------   -------------   -------------
Cash flows from investing activities:
   Proceeds from sold, matured, called securities available-for-sale       65,092,000      31,207,000      34,203,000
   Purchases of securities available-for-sale                             (45,949,000)    (43,386,000)    (74,689,000)
   Proceeds from sale of other real estate owned                            3,356,000              --              --
   Net decrease (increase) in loans                                       (40,069,000)        892,000     (28,457,000)
   Proceeds from sales of bank premises, equipment, and
     leasehold improvements                                                   541,000         156,000         121,000
   Purchases of bank premises, equipment, and leasehold
     Improvements                                                          (3,172,000)     (1,733,000)     (2,101,000)
   Cash and equivalents received in bank acquisition, net of cash paid             --       9,602,000              --
                                                                        -------------   -------------   -------------
            Net cash used in investing activities                         (20,201,000)     (3,262,000)    (70,923,000)
                                                                        -------------   -------------   -------------
Cash flows from financing activities:
   Net increase (decrease) in demand and savings deposits                 (19,534,000)     16,215,000      39,392,000
   Net increase (decrease) in time deposits                                (6,443,000)     22,051,000        (353,000)
   Net increase in Federal Home Loan Bank advances                         30,000,000
   Net (decrease) increase in federal funds purchased                              --     (19,172,000)     19,172,000
   Cash dividends paid                                                     (1,633,000)     (1,542,000)     (1,526,000)
   Repurchases of common stock                                                (73,000)       (765,000)     (2,324,000)
   Exercise of stock options including tax benefit of $83,000 in 2006         508,000         150,000         272,000
                                                                        -------------   -------------   -------------
            Net cash provided by financing activities                       2,825,000      16,937,000      54,633,000
                                                                        -------------   -------------   -------------
            Net increase (decrease) in cash and cash Equivalents           (8,276,000)     18,214,000     (13,560,000)
Cash and cash equivalents at beginning of year                             35,298,000      17,084,000      30,644,000
                                                                        -------------   -------------   -------------
Cash and cash equivalents at end of year                                $  27,022,000      35,298,000      17,084,000
                                                                        =============   =============   =============
Additional cash flow information:
   Interest paid                                                        $   9,533,000       4,980,000       2,467,000
   Income taxes paid                                                        4,020,000       2,224,000       1,691,000
   Noncash - stock dividend                                                 4,679,000       4,043,000       4,514,000
</TABLE>

See accompanying notes to consolidated financial statements.

                                       56

<PAGE>


                           FNB BANCORP AND SUBSIDIARY

                   Notes to Consolidated Financial Statements

                        December 31, 2006, 2005 and 2004

(1)   The Company and Summary of Significant Accounting Policies

      FNB Bancorp (the Company) is a bank holding company registered under the
      Bank Holding Company Act of 1956, as amended. The Company was incorporated
      under the laws of the State of California on February 28, 2001. The
      consolidated financial statements include the accounts of FNB Bancorp and
      its wholly owned subsidiary, First National Bank of Northern California
      (the Bank). The Bank provides traditional banking services in San Mateo
      and San Francisco counties.

      The Bank and the Company entered into an Agreement and Plan of
      Reorganization dated November 1, 2001 (the Plan of Reorganization), and
      the shareholders of the Bank approved the Plan of Reorganization at a
      Special Meeting of the Shareholders of the Bank held on February 27, 2002.
      The Plan of Reorganization was consummated on March 15, 2002. Each
      outstanding share of the common stock, par value $1.25 per share, of the
      Bank (other than any shares as to which dissenters' rights of appraisal
      have been properly exercised) was converted into one share of the no par
      common stock of the Company, and the former holders of Bank common stock
      became the holders of all of the Company common stock. The change in
      capital structure has been included for all periods presented.

      The preparation of consolidated financial statements in conformity with
      accounting principles generally accepted in the United States of America
      requires management to make estimates and assumptions that affect the
      reported amounts of assets and liabilities and the disclosure of
      contingent assets and liabilities at the date of the financial statements
      and revenue and expenses during the reporting period. Actual results could
      differ from those estimates. For the Bank, the significant accounting
      estimate is the allowance for loan losses (note 1f). A summary of the
      significant accounting policies applied in the preparation of the
      accompanying consolidated financial statements follows.

      (a)   Basis of Presentation

            The accounting and reporting policies of the Company and its wholly
            owned subsidiary are in accordance with accounting principles
            generally accepted in the United States of America. All intercompany
            balances and transactions have been eliminated.

                                       57

<PAGE>

                           FNB BANCORP AND SUBSIDIARY

                   Notes to Consolidated Financial Statements

                        December 31, 2006, 2005 and 2004

      (b)   Cash and Cash Equivalents

            Cash and cash equivalents include cash on hand, amounts due from
            banks, and federal funds sold. Generally, federal funds are sold for
            one-day periods. The cash equivalents are readily convertible to
            known amounts of cash and present insignificant risk of changes in
            value due to original maturity dates of 90 days or less. Included in
            cash and cash equivalents are amounts restricted for the Federal
            Reserve requirement of approximately $1,219,000 and $2,358,000 at
            December 31, 2006 and 2005, respectively.

      (c)   Investment Securities

            Investment securities consist of U.S. Treasury securities, U.S.
            agency securities, obligations of states and political subdivisions,
            obligations of U.S. corporations, mortgage-backed securities and
            other securities. At the time of purchase of a security, the Company
            designates the security as held-to-maturity or available-for-sale,
            based on its investment objectives, operational needs, and intent to
            hold. The Company does not purchase securities with the intent to
            engage in trading activity. Held to maturity securities are recorded
            at amortized cost, adjusted for amortization of premiums or
            accretion of discounts. The Company did not have any investments in
            the held-to-maturity portfolio at December 31, 2006 or 2005.
            Available-for-sale securities are recorded at fair value with
            unrealized holding gains or losses, net of the related tax effect,
            reported as a separate component of stockholders' equity until
            realized.

            A decline in the market value of any available-for-sale or
            held-to-maturity security below cost that is deemed other than
            temporary results in a charge to earnings and the corresponding
            establishment of a new cost basis for the security. Amortization of
            premiums and accretion of discounts on debt securities are included
            in interest income over the life of the related held-to-maturity or
            available-for-sale security using the effective interest method.
            Dividend and interest income are recognized when earned. Realized
            gains and losses for securities classified as available-for-sale and
            held-to-maturity are included in earnings and are derived using the
            specific identification method for determining the cost of
            securities sold.

      (d)   Derivatives

            All derivatives are recognized as either assets or liabilities in
            the balance sheet and measured at fair value. The Company did not
            hold any derivatives at December 31, 2006 and 2005.

                                       58

<PAGE>

                           FNB BANCORP AND SUBSIDIARY

                   Notes to Consolidated Financial Statements

                        December 31, 2006, 2005 and 2004

      (e)   Loans

            Loans are reported at the principal amount outstanding, net of
            deferred loan fees and the allowance for loan losses. A loan is
            considered impaired when, based on current information and events,
            it is probable that the Company will be unable to collect all
            amounts due according to the contractual terms of the loan
            agreement, including scheduled interest payments. For a loan that
            has been restructured, the contractual terms of the loan agreement
            refer to the contractual terms specified by the original loan
            agreement, not the contractual terms specified by the restructuring
            agreement. An impaired loan is measured based upon the present value
            of future cash flows discounted at the loan's effective rate, the
            loan's observable market price, or the fair value of collateral if
            the loan is collateral dependent. Interest on impaired loans is
            recognized on a cash basis. If the measurement of the impaired loan
            is less than the recorded investment in the loan, an impairment is
            recognized by a charge to the allowance for loan losses.

            Unearned discount on installment loans is recognized as income over
            the terms of the loans by the interest method. Interest on other
            loans is calculated by using the simple interest method on the daily
            balance of the principal amount outstanding.

            Loan fees net of certain direct costs of origination, which
            represent an adjustment to interest yield, are deferred and
            amortized over the contractual term of the loan using the interest
            method.

            Loans on which the accrual of interest has been discontinued are
            designated as nonaccrual loans. Accrual of interest on loans is
            discontinued either when reasonable doubt exists as to the full and
            timely collection of interest or principal when a loan becomes
            contractually past due by 90 days or more with respect to interest
            or principal. When a loan is placed on nonaccrual status, all
            interest previously accrued but not collected is reversed against
            current period interest income. Interest accruals are resumed on
            such loans only when they are brought fully current with respect to
            interest and principal and when, in the judgment of management, the
            loans are estimated to be fully collectible as to both principal and
            interest. Restructured loans are loans on which concessions in terms
            have been granted because of the borrowers' financial difficulties.
            Interest is generally accrued on such loans in accordance with the
            new terms. Net interest written off in 2006 was not considered
            material (see Allowance for Loan Losses caption on page 34 in the
            Management Discussion and Analysis section).

                                       59

<PAGE>

                           FNB BANCORP AND SUBSIDIARY

                   Notes to Consolidated Financial Statements

                        December 31, 2006, 2005 and 2004

      (f)   Allowance for Loan Losses

            The allowance for loan losses is established through a provision for
            loan losses charged to expense. Loans are charged off against the
            allowance for loan losses when management believes that the
            collectibility of the principal is unlikely. The allowance is an
            amount that management believes will be adequate to absorb probable
            losses inherent in existing loans, standby letters of credit,
            overdrafts, and commitments to extend credit based on evaluations of
            collectibility and prior loss experience. The evaluations take into
            consideration such factors as changes in the nature and volume of
            the portfolio, overall portfolio quality, loan concentrations,
            specific problem loans and current and anticipated economic
            conditions that may affect the borrowers' ability to pay. While
            management uses these evaluations to determine the level of the
            allowance for loan losses, future provisions may be necessary based
            on changes in the factors used in the evaluations.

            Material estimates relating to the determination of the allowance
            for loan losses are particularly susceptible to significant change
            in the near term. Management believes that the allowance for loan
            losses is adequate. While management uses available information to
            recognize losses on loans, future additions to the allowance may be
            necessary based on changes in economic conditions. In addition, the
            banking regulators, as an integral part of its examination process,
            periodically review the Bank's allowance for loan losses. The
            banking regulators may require the Bank to recognize additions to
            the allowance based on their judgment about information available to
            them at the time of their examination.

      (g)   Premises and Equipment

            Premises and equipment are reported at cost less accumulated
            depreciation using the straight-line method over the estimated
            service lives of related assets ranging from 3 to 50 years original
            life. Those set up for 50 years were before 1986, when the IRS rules
            shortened the allowable lives for assets. Leasehold improvements are
            amortized over the lives of the respective leases or the service
            lives of the improvements, whichever is shorter.

      (h)   Cash Dividends

            The Company's ability to pay cash dividends is subject to
            restrictions set forth in the California General Corporation Law.
            Funds for payment of any cash

                                       60

<PAGE>

                           FNB BANCORP AND SUBSIDIARY

                   Notes to Consolidated Financial Statements

                        December 31, 2006, 2005 and 2004

            dividends by the Company would be obtained from its investments as
            well as dividends and/or management fees from First National Bank.
            First National Bank's ability to pay cash dividends is subject to
            restrictions imposed under the National Bank Act and regulations
            promulgated by the Office of the Comptroller of the Currency.

      (i)   Stock Dividend

            On October 27, 2006, the Company announced that its Board of
            Directors had declared a stock dividend of approximately 135,947
            shares, payable at the rate of one share of Common Stock for every
            twenty (20) shares of Common Stock owned. The stock dividend was
            paid on December 15, 2006, to shareholders of record on December 1,
            2006. The earnings per share data presented have been adjusted for
            this stock dividend.

      (j)   Income Taxes

            Deferred income taxes are determined using the assets and
            liabilities method. Under this method, the net deferred tax asset or
            liability is recognized for tax consequences of temporary
            differences by applying current tax rates to differences between the
            financial reporting and the tax basis of existing assets and
            liabilities. Deferred tax assets and liabilities are reflected at
            currently enacted income tax rates applicable to the period in which
            the deferred tax assets or liabilities are expected to be realized
            or settled. As changes in tax laws or rates are enacted, deferred
            tax assets and liabilities are adjusted through the provision for
            income taxes.

      (k)   Earnings per Share

            Basic earnings per share is computed by dividing net income by the
            weighted average common shares outstanding. Diluted earnings per
            share reflects potential dilution from outstanding stock options,
            using the treasury stock method. There were no antidilutive shares
            in the years ended December 31, 2006, 2005 and 2004. For each of the
            years presented, net income is the same for basic and diluted
            earnings per share. Reconciliation of weighted average shares used
            in computing basic and diluted earnings per share is as follows:

                                       61

<PAGE>

<TABLE>
<CAPTION>
                                                            Year ended December 31,
                                                       ---------------------------------
                                                          2006        2005        2004
                                                       ---------   ---------   ---------
<S>                                                    <C>         <C>         <C>
Weighted average common shares outstanding-used
   in computing basic earnings per share               2,845,000   2,834,000   2,883,000
Dilutive effect of stock options outstanding,
   using the treasury stock method                        70,000      59,000      51,000
Shares used in computing diluted earnings per share    2,915,000   2,893,000   2,934,000
</TABLE>

      (l)   Stock Option Plans

            In December 2004, the FASB issued SFAS No. 123 (revised 2004),
            "Share-Based Payment". This Statement requires that compensation
            costs related to share-based payment transactions be recognized in
            the financial statements. Measurement of the cost of stock options
            granted is based on the grant-date fair value of each stock option
            granted using the Black-Scholes valuation model. The cost is then
            amortized to expense ratably over each option's five year vesting
            period. The amortized expense of the stock option's fair value has
            been included in salaries and employee benefits expense for the
            three years ended December 31, 2006, 2005 and 2004. Net income and
            earnings per share calculations include the amortized cost of stock
            options that vested during each year.

            Effective January 1, 2006, the Company adopted SFAS No. 123(R)
            "Share-Based Payment", on a modified prospective basis.

            The expected term of options granted is derived from the output of
            the option valuation model and represents the period of time that
            options granted are expected to be outstanding. The risk-free rate
            for periods within the contractual life of the option is based on
            the U. S. Treasury yield curve in effect at the time of the grant.
            FNB Bancorp stock has limited liquidity and limited trading
            activity. Volatility was calculated using historical price changes
            on a monthly basis over the expected life of the option.

      (m)   Fair Values of Financial Instruments

            The notes to financial statements include various estimated fair
            value information as of December 31, 2006 and 2005. Such
            information, which pertains to the Company's financial instruments,
            does not purport to represent the aggregate net fair value of the
            Company. Further, the fair value estimates are based on various
            assumptions, methodologies and subjective consideration, which vary
            widely among different financial institutions and which are subject
            to change.

                                       62

<PAGE>

                           FNB BANCORP AND SUBSIDIARY

                   Notes to Consolidated Financial Statements

                        December 31, 2006, 2005 and 2004

      (n)   Income Tax Credits

            At December 31, 2006, the Bank had a $2,077,000 equity investment in
            three partnerships, which own low-income affordable housing projects
            that generate tax benefits in the form of federal and state housing
            tax credits. As a limited partner investor in these partnerships,
            the Company receives tax benefits in the form of tax deductions from
            partnership operating losses and federal and state income tax
            credits. The federal and state income tax credits are earned over a
            10-year period as a result of the investment properties meeting
            certain criteria and are subject to recapture for noncompliance with
            such criteria over a 15-year period. The expected benefit resulting
            from the low-income housing tax credits is recognized in the period
            for which the tax benefit is recognized in the Company's
            consolidated tax returns. These investments are accounted for using
            the effective yield method and are recorded in other assets on the
            balance sheet. Under the effective yield method, the Company
            recognizes tax credits as they are allocated and amortizes the
            initial cost of the investments to provide a constant effective
            yield over the period that tax credits are allocated to the Company.
            The effective yield is the internal rate of return on the
            investment, based on the cost of the investment and the guaranteed
            tax credits allocated to the Company. Any expected residual value of
            the investment was excluded from the effective yield calculation.
            Cash received from operations of the limited partnership or sale of
            the properties, if any, will be included in earnings when realized
            or realizable. These investments are included in other securities in
            securities available-for-sale.

      (o)   Reclassifications

            Certain prior year information has been reclassified to conform to
            current year presentation.

                                       63

<PAGE>

                           FNB BANCORP AND SUBSIDIARY

                   Notes to Consolidated Financial Statements

                        December 31, 2006, 2005, and 2004

      (p)   Bank Owned Life Insurance

            The Corporation purchased insurance on the lives of certain
            employees. The policies accumulate asset values to meet future
            liabilities including the payment of employee benefits such as the
            deferred compensation plan. Increases in the cash surrender value
            are recorded as other noninterest income in the consolidated
            statements of income. The cash surrender value of bank owned life
            insurance is reflected in other assets on the consolidated balance
            sheets in the amount of $7,267,000 and $7,011,000 at December 31,
            2006 and 2005, respectively.

      (q)   Acquisition

            On May 2, 2005, the Company announced that its wholly owned
            subsidiary, First National Bank of Northern California, completed
            its acquisition of Sequoia National Bank, which had two offices in
            San Francisco. Sequoia was consolidated with and merged into First
            National Bank of Northern California effective April 30, 2005.
            Sequoia had approximately $62,000,000 in total assets on an
            historical cost basis. A table showing the fair values of the assets
            acquired follows this note. Under the terms of the Acquisition
            Agreement, holders of Sequoia shares of common stock and options
            received approximately $10,450,000 in cash, after adjustments for
            certain contingencies specified in the Acquisition Agreement. At
            closing of the transaction $9,350,000 was paid to the former Sequoia
            National Bank shareholders, and on November 1, 2005, after
            submission and payment of all such claims and expenses, the escrow
            was terminated and the approximately $1,100,000, the balance of
            funds remaining in escrow, was distributed to the former
            shareholders of Sequoia National Bank in accordance with their
            interests. Effective April 30, 2005, the former banking offices of
            Sequoia National Bank began operating as branch offices of First
            National Bank of Northern California. In accordance with SFAS No.
            141 the Bank recorded the assets acquired and liabilities assumed at
            their fair values at the acquisition date. The total acquisition
            cost exceeded the fair value of the new assets acquired by
            $4,781,000. This amount was recognized at acquisition date as
            intangible assets consisting of Goodwill of $3,235,000, Loan Premium
            of $271,000 and Core Deposit intangibles of $1,275,000. Goodwill has
            been adjusted for tax benefits of $1,394,000, net of deferred income
            tax liability of $525,000, related to Sequoia National Bank net
            operating losses that became available to the Company, the Core
            Deposit Intangibles, and the book reserve for possible loan losses.
            The tax benefits (Net deferred tax assets) are included in Other
            Assets, and the Loan Premium included in Net Loans in the table
            shown below.

                                       64

<PAGE>

                           FNB BANCORP AND SUBSIDIARY

                   Notes to Consolidated Financial Statements

                        December 31, 2006, 2005 and 2004

            The following table summarizes the estimated fair values of the
            assets acquired and liabilities assumed by First National Bank of
            Northern California at the date of the acquisition:

                 Assets:
                    Cash and due from banks                         $  3,218,000
                    Federal funds sold                                17,365,000
                    Securities available for sale                        627,000
                    Loans, net                                        40,652,000
                    Other assets                                       2,210,000
                    Core deposit intangibles                           1,275,000
                    Goodwill                                           1,841,000
                                                                    ------------
                          Total Assets                                67,188,000
                                                                    ------------

                 Liabilities:
                    Deposits:
                       Noninterest-bearing                             6,945,000
                       Interest-bearing                               49,080,000
                                                                    ------------
                          Total deposits                              56,025,000
                    Accrued interest payable and other liabilities       274,000
                                                                    ------------
                          Total Liabilities                           56,299,000
                                                                    ------------
                    Net Assets                                      $ 10,889,000
                                                                    ------------

                 The following table summarizes the carrying amount of goodwill:

                 Gross acquisition consideration in excess
                   of identifiable asset values                     $  4,781,000
                 Less allocation to the following:
                    Core deposit premium                               1,275,000
                    Loan premium                                         271,000
                    Deferred tax asset                                 1,394,000
                 Goodwill at December 31, 2005                      $  1,841,000

                                       65

<PAGE>

                           FNB BANCORP AND SUBSIDIARY

                   Notes to Consolidated Financial Statements

                        December 31, 2006, 2005 and 2004

            During 2006 and 2005, Core Deposit Intangible and Loan Premium were
            amortized $106,000 and $15,000, respectively.

            In accordance with SFAS No. 142 "Goodwill and Other Intangible
            Assets", goodwill will not be expensed over a fixed period of time,
            but will be tested for impairment at least annually. None of the
            goodwill is deductible for income tax purposes. Identifiable
            intangible assets, namely core deposit intangibles and premium on
            loans, are amortized over their period of benefit. In the fourth
            quarter of 2006, the annual review of goodwill for impairment was
            performed, and it was determined that no adjustment was necessary.
            Additionally, the core deposit intangible and loan premium were
            evaluated for impairment at the end of each quarter, and no
            adjustments were determined to be necessary.

                                       66

<PAGE>

                           FNB BANCORP AND SUBSIDIARY

                   Notes to Consolidated Financial Statements

                        December 31, 2006, 2005 and 2004

The following table shows proforma earnings of FNB Bancorp and its subsidiary
combined with Sequoia National Bank as if the acquisition had taken place as of
January 1, 2004:

(thousands, except per share data)        Consolidated Statements of Earnings
                                                 Year ended December 31
                                               2005                  2004
                                          --------------        -------------
Interest income                           $       31,858        $      27,379
Interest expense                                   5,836                3,402
                                          --------------        -------------
Net interest income                               26,022               23,977

Provision for loan losses                            610                  480
                                          --------------        -------------
Net interest income after
   provision for loan losses                      25,412               23,497

Noninterest income                                 3,938                4,136
Noninterest expense                               21,860               21,310
                                          --------------        -------------

Earnings before income tax expense                 7,490                6,323
Income tax expense                                 2,232                1,593
                                          --------------        -------------
Net earnings                              $        5,258        $       4,730
                                          ==============        =============
Earnings per share data:
Basic                                     $         1.95        $        1.72
Diluted                                   $         1.91        $        1.69

Weighted average shares outstanding:
Basic                                          2,699,000            2,748,000
Diluted                                        2,758,000            2,799,000

(2)   Restricted Cash Balance

      Cash and due from banks includes balances with the Federal Reserve Bank
      (the FRB). The Bank is required to maintain specified minimum average
      balances with the FRB, based primarily upon the Bank's deposit balances.
      As of December 31, 2006 and 2005, the Bank maintained deposits in excess
      of the FRB reserve requirement.

                                       67

<PAGE>

                           FNB BANCORP AND SUBSIDIARY

                   Notes to Consolidated Financial Statements

                        December 31, 2006, 2005 and 2004

(3)   Securities Available-for-Sale

      The amortized cost and carrying values of securities available-for-sale
      are as follows:

<TABLE>
<CAPTION>
                                     Amortized     Unrealized   Unrealized      Carrying
                                       cost           gains       losses         Value
<S>                                <C>                <C>       <C>           <C>
December 31, 2006:
   Obligations of U.S.
      Government agencies          $  29,197,000        2,000      (67,000)    29,132,000
   Obligations of states
      and political subdivisions      59,693,000      297,000     (229,000)    59,761,000
   Corporate debt                      3,984,000           --      (10,000)     3,974,000
   Other securities                    2,078,000           --           --      2,078,000
                                   -------------   ----------   ----------    -----------
                                   $  94,952,000      299,000     (306,000)    94,945,000
                                   =============   ==========   ==========    ===========
December 31, 2005:
   Obligations of U.S.
      Government agencies          $  50,571,000       65,000     (510,000)    50,126,000
   Obligations of states
      and political subdivisions      56,208,000      384,000     (564,000)    56,028,000
   Corporate debt                      5,918,000        8,000      (62,000)     5,864,000
   Other securities                    1,445,000           --           --      1,445,000
                                   -------------   ----------   ----------    -----------
                                   $ 114,142,000      457,000   (1,136,000)   113,463,000
                                   =============   ==========   ==========    ===========
</TABLE>

      An analysis of gross unrealized losses of the available for sale
      investment securities portfolio as of December 31, 2006 and December 31,
      2005 follows.

<TABLE>
<CAPTION>
December 31, 2006:
                                              Less than               12 Months
                                              12 Months               or Longer                 Total
                                             Unrealized              Unrealized              Unrealized
                                Fair Value     Losses    Fair Value    Losses    Fair Value    Losses
<S>                            <C>            <C>        <C>          <C>        <C>          <C>
Obligations of U.S.
   government agencies         $ 14,708,000   (10,000)   11,945,000    (57,000)  26,653,000    (67,000)
Obligations of states
   and political subdivisions     7,053,000   (25,000)   22,009,000   (204,000)  29,062,000   (229,000)
Corporate debt                    2,973,000    (3,000)    1,001,000     (7,000)   3,974,000    (10,000)
Other securities                         --        --            --         --           --         --
                               ------------------------------------------------------------------------
Total                            24,734,000   (38,000)   34,955,000   (268,000)  59,689,000   (306,000)
                               ========================================================================
</TABLE>

<TABLE>
<CAPTION>
                                              Less than               12 Months
                                              12 Months               or Longer                 Total
                                             Unrealized              Unrealized              Unrealized
                                Fair Value     Losses    Fair Value    Losses    Fair Value    Losses
<S>                            <C>            <C>        <C>          <C>        <C>         <C>
Obligations of U.S.
   government agencies         $ 23,184,000   (212,000)  24,676,000   (298,000)  47,860,000    (510,000)
Obligations of states
   and political subdivisions    29,456,000   (463,000)   8,082,000   (101,000)  37,538,000    (564,000)
Corporate debt                    4,019,000    (39,000)   1,011,000    (23,000)   5,030,000     (62,000)
Other securities                         --         --           --         --           --          --
                               ------------------------------------------------------------------------
Total                            56,659,000   (714,000)  33,769,000   (422,000)  90,428,000  (1,136,000)
                               ========================================================================
</TABLE>

                                       68

<PAGE>

                           FNB BANCORP AND SUBSIDIARY

                   Notes to Consolidated Financial Statements

                        December 31, 2006, 2005 and 2004

      A total of 78 securities make up the amount of securities in an unrealized
      loss position for greater than 12 consecutive months. Management
      periodically evaluates each security in an unrealized loss position to
      determine if the impairment is temporary or other-than-temporary.
      Management has determined that no investment security is
      other-than-temporarily impaired. The unrealized losses are due solely to
      interest rate changes and the Company has the ability and intent to hold
      all investment securities with identified impairments resulting from
      interest rate changes to the earliest of forecasted recovery or the
      maturity of the underlying investment security.

      The amortized cost and carrying value of debt securities as of December
      31, 2006, by contractual maturity, are shown below. Expected maturities
      may differ from contractual maturities because borrowers may have the
      right to call or prepay obligations with or without call or prepayment
      penalties.

                                                    Amortized       Carrying
                                                      Cost            Value
      Available -for-sale:
         Due in one year or less                   $ 28,628,000     28,557,000
         Due after one year though five years        34,023,000     33,975,000
      Due after five years through ten years         29,094,000     29,210,000
      Due after ten years                             3,207,000      3,203,000
                                                   ------------   ------------
                                                   $ 94,952,000     94,945,000
                                                   ============   ============

      For the years ended December 31, 2006, 2005, and 2004, gross realized
      gains amounted to $185,000, $15,000, and $4,000, respectively. For the
      years ended December 31, 2006, 2005, and 2004, gross realized losses
      amounted to $196,000, $116,000, and $35,000, respectively.

      At December 31, 2006 and 2005, securities with an amortized cost of
      $49,551,000 and $57,801,000 and fair value of $49,635,000 and $57,646,000,
      respectively, were pledged as collateral for public deposits and for other
      purposes required by law.

      As of December 31, 2006 and 2005, the Bank had investments in Federal
      Reserve Bank stock classified as other assets in the accompanying balance
      sheets of $702,000. These investments in Federal Reserve Bank stock are
      carried at cost, and evaluated periodically for impairment.

                                       69

<PAGE>

                             BANCORP AND SUBSIDIARY

                   Notes to Consolidated Financial Statements

                        December 31, 2006, 2005 and 2004



(4)   Loans, Net

      Loans are summarized as follows at December 31:

                                                     2006           2005
                                                -------------   -------------

      Real estate                               $ 318,655,000     302,813,000
      Construction                                 37,094,000      26,243,000
      Commercial                                   66,139,000      53,070,000
      Consumer & other                              3,279,000       3,420,000
                                                -------------   -------------
                                                  425,167,000     385,546,000

      Allowance for loan losses                    (5,002,000)     (4,374,000)
      Net deferred loan fees                         (728,000)       (948,000)
                                                -------------   -------------
                                                $ 419,437,000     380,224,000
                                                =============   =============

      The Bank had total impaired loans of $2,628,000 and$17,000 at December 31,
      2006 and 2005, respectively. The allowance for loan losses related to the
      impaired loans was $51,000 and $9,000 as of December 31, 2006 and 2005,
      respectively. The amount of the recorded investment in impaired loans for
      which there is no related allowance is $2,577,000 and $8,000 as of
      December 31, 2006 and 2005. During 2006 and 2005, nonaccrual loans
      represented all impaired loans. The average recorded investment in
      impaired loans during 2006, 2005 and 2004 was $610,000, $1,205,000 and
      $4,010,000, respectively. Interest income on impaired loans of $3,000, $0,
      and $4,800, was recognized for cash payments received in 2006, 2005, and
      2004, respectively. The amount of interest on impaired loans not collected
      in 2006, 2005 and 2004, respectively was $70,000, $2,000 and $255,000.

                                       70

<PAGE>

                           FNB BANCORP AND SUBSIDIARY

                   Notes to Consolidated Financial Statements

                        December 31, 2006, 2005 and 2004

(5)   Allowance for Loan Losses

      Changes in the allowance for loan losses are summarized as follows for the
      years ended December 31:

                                           2006          2005           2004
                                       -----------   ------------   -----------
      Balance, beginning of year       $ 4,374,000      3,133,000     3,155,000
                                       -----------   ------------   -----------
      Loans charged off                    (59,000)      (110,000)     (431,000)
      Recoveries                             4,000         23,000         1,000
                                       -----------   ------------   -----------
         Net loans charged off             (55,000)       (87,000)     (430,000)

      Provision for loan losses            683,000        628,000       408,000
      Allowance acquired in
        business combination                    --        700,000            --
                                       -----------   ------------   -----------
      Balance, end of year             $ 5,002,000      4,374,000     3,133,000
                                       ===========   ============   ===========

(6)   Related Party Transactions

      In the ordinary course of business, the Bank made loans and advances under
      lines of credit to directors, officers, and their related interests. The
      Bank's policies require that all such loans be made at substantially the
      same terms as those prevailing at the time for comparable transactions
      with unrelated parties and do not involve more than normal risk or
      unfavorable features. The following summarizes activities of loans to such
      parties in 2006 and 2005:

                                                         2006           2005
                                                     ------------   -----------
             Balance, beginning of  year             $  3,918,000     3,376,000
             Additions                                  3,354,000     5,673,000
             Repayments                                 3,751,000     5,131,000
                                                     ------------   -----------
             Balance, end of year                    $  3,521,000     3,918,000
                                                     ============   ===========

(7)   Bank Premises, Equipment, and Leasehold Improvements

      Bank premises, equipment and leasehold improvements are stated at cost,
      less accumulated depreciation and amortization, and are summarized as
      follows at December 31:

                                                         2006           2005
                                                     ------------   -----------
      Buildings                                      $  8,619,000     7,969,000
      Equipment                                        10,226,000     8,642,000
      Leasehold improvements                            1,093,000     1,173,000
                                                     ------------   -----------
                                                       19,938,000    17,784,000

      Accumulated depreciation and amortization       (10,876,000)   (9,817,000)
                                                     ------------   -----------
                                                        9,062,000     7,967,000

      Land                                              4,414,000     4,061,000
                                                     ------------   -----------
                                                     $ 13,476,000    12,028,000
                                                     ============   ===========

                                       71

<PAGE>

                           FNB BANCORP AND SUBSIDIARY

                   Notes to Consolidated Financial Statements

                        December 31, 2006, 2005 and 2004

      Depreciation expense for the years ended December 31, 2006, 2005, and 2004
      was $1,183,000, $1,163,000 and $1,282,000, respectively.

(8)   Deposits

      The aggregate amount of jumbo time certificates, each with a minimum
      denomination of $100,000 or more, was $77,039,000 and $77,572,000 at
      December 31, 2006 and 2005, respectively.

      At December 31, 2006, the scheduled maturities of all time certificates
      are as follows:

               Year ending December 31:
                   2007                               $ 119,567,000
                   2008                                  10,536,000
                   2009                                   4,022,000
                   2010                                     265,000
                                                      -------------
                                                      $ 134,390,000
                                                      =============

(9)   Commitments and Contingencies

      The Bank leases a portion of its facilities and equipment under
      noncancelable operating leases expiring at various dates through 2009.
      Some of these leases provide that the Bank pay taxes, maintenance,
      insurance, and other occupancy expenses applicable to leased premises.
      Generally, the leases provide for renewal for various periods at
      stipulated rates.

      The minimum rental commitments under the operating leases as of December
      31, 2006 are as follows:

               Year ending December 31:
                  2007                                $     499,000
                  2008                                      351,000
                  2009                                      163,000
                                                      -------------
                                                      $   1,013,000
                                                      =============

      Total rent expense for operating leases was $554,000, $401,000 and
      $284,000, in 2006, 2005, and 2004, respectively.

                                       72

<PAGE>

                           FNB BANCORP AND SUBSIDIARY

                   Notes to Consolidated Financial Statements

                        December 31, 2006, 2005 and 2004

      The Bank is engaged in various lawsuits either as plaintiff or defendant
      in the ordinary course of business and in the opinion of management, based
      upon the advice of counsel, the ultimate outcome of these lawsuits will
      not have a material effect on the Bank's financial statements.

(10)  Bank Savings Plan

      The Bank maintains a salary deferral 401(k) plan covering substantially
      all employees, known as the First National Bank Savings Plan (the Plan).
      The Plan allows employees to make contributions to the Plan up to a
      maximum allowed by law and the Bank's contribution is discretionary. The
      Plan expense for the years ended December 31, 2006, 2005, and 2004 was
      $600,000, $626,000 and $540,000, respectively.

(11)  Salary Continuation and Deferred Compensation Plans

      The Bank maintains a Salary Continuation Plan for certain Bank officers.
      Officers participating in the Salary Continuation Plan are entitled to
      receive a monthly payment for a period of fifteen to twenty years upon
      retirement. The Company accrues such post-retirement benefits over the
      individual's employment period. The Salary Continuation Plan expense for
      the years ended December 31, 2006, 2005, and 2004 was $239,000, $325,000
      and $305,000, respectively. Accrued compensation payable under the salary
      continuation plan totaled $1,959,000 and $1,780,000 at December 31, 2006
      and 2005, respectively.

      The Deferred Compensation Plan allows eligible officers to defer annually
      their compensation up to a maximum 80% of their base salary and 100% of
      their cash bonus. The officer will be entitled to receive distribution
      upon reaching a specified age, passage of at least five years or
      termination of employment. As of December 31, 2006 and 2005, the related
      liability included in accrued expenses and other liabilities was
      $1,935,000 and $1,851,000, respectively.

                                       73

<PAGE>

                           FNB BANCORP AND SUBSIDIARY

                   Notes to Consolidated Financial Statements

                        December 31, 2006, 2005 and 2004

(12)  Income Taxes

      The provision for income taxes for the years ended December 31, consists
      of the following:

                                2006           2005           2004
                            -----------    ------------    -----------

          Current:
             Federal        $ 2,789,000       2,223,000      1,275,000
             State              827,000         387,000        228,000
                            -----------    ------------    -----------
                              3,616,000       2,610,000      1,503,000
                            -----------    ------------    -----------
          Deferred:
             Federal            (69,000)       (207,000)        62,000
             State               62,000          26,000         12,000
                            -----------    ------------    -----------
                                 (7,000)       (181,000)        74,000
                            -----------    ------------    -----------
                            $ 3,609,000       2,429,000      1,577,000
                            ===========    ============    ===========

      The reasons for the differences between the statutory federal income tax
      rate and the effective tax rates for the years ended December 31, are
      summarized as follows:

<TABLE>
<CAPTION>
                                2006           2005           2004
                            -----------    ------------    -----------
<S>                                <C>             <C>            <C>
Statutory rate                     34.0%           34.0%          34.0%
Increased (decrease)
 resulting from:
   Income tax exempt for
    federal purposes               (6.1)%          (7.1)%         (8.0)%
   State taxes on income
    net of federal benefit          5.2%            3.3%           2.5%
   Benefits from low
    income housing credits         (1.3)%          (1.1)%         (2.8)%
   Adjustment to prior
    year accruals                   0.0%            0.0%          (0.6)%
   Other, net                       0.4%            0.6%           0.1%
                            -----------    ------------    -----------
      Effective rate               32.2%           29.7%          25.2%
                            ===========    ============    ===========
</TABLE>

                                       74

<PAGE>

                           FNB BANCORP AND SUBSIDIARY

                   Notes to Consolidated Financial Statements

                        December 31, 2006, 2005 and 2004

      The tax effect of temporary differences giving rise to the Bank's net
      deferred tax asset is as follows:

<TABLE>
<CAPTION>
                                                                             December 31
                                                                   ------------------------------
                                                                       2006              2005
                                                                   --------------    ------------
<S>                                                                <C>                  <C>
Deferred tax assets:
   Allowance for loan losses                                       $    2,123,000       1,857,000
   Capitalized interest on buildings                                       27,000          29,000
   Expenses accrued on books not yet deductible in tax return           2,060,000       1,720,000
   Depreciation                                                           572,000         497,000
   Net operating loss carryforward                                      1,236,000       1,439,000
   Unrealized loss on available-for-sale securities                         3,000         280,000
                                                                   --------------    ------------
      Total deferred tax assets                                         6,021,000       5,822,000
                                                                   --------------    ------------
Deferred tax liabilities:
   State income taxes                                                     379,000         312,000
   Core deposit intangible                                                453,000         524,000
   Expenses and credits deducted on tax return, not books                  37,000          42,000
                                                                   --------------    ------------
      Total deferred tax liabilities                                      869,000         878,000
                                                                   --------------    ------------
      Net deferred tax asset (included in other assets)                 5,152,000       4,944,000
                                                                   ==============    ============
</TABLE>

      As of December 31, 2006, the Bank had no state tax credit carryforwards
      for income tax purposes as these were all used during 2005. Accordingly,
      there is no valuation allowance as of December 31, 2006 or 2005.
      Additionally, management believes that it is more likely than not that the
      deferred tax assets will be realized through recovery of taxes previously
      paid and/or future taxable income. The Bank had net operating loss
      carryforwards resulting from the acquisition of Sequoia National Bank
      which expire from December 31, 2008 through December 31, 2020, for a total
      balance of $3,547,000.

(13)  Financial Instruments

      The Bank is a party to financial instruments with off-balance-sheet risk
      in the normal course of business to meet the financing needs of its
      customers. These financial instruments include commitments to extend
      credit in the form of loans or through standby letters of credit. These
      instruments involve, to varying degrees, elements of credit and
      interest-rate risk in excess of the amount recognized in the balance
      sheet.

      The Bank's exposure to credit loss is represented by the contractual
      amount of those instruments and is usually limited to amounts funded or
      drawn. The contract or notional amounts of these agreements, which are not
      included in the balance sheets, are an indicator of the Bank's credit
      exposure. Commitments to extend credit generally carry variable interest
      rates and are subject to the same credit standards used in the lending
      process for on-balance-sheet instruments. Additionally, the Bank
      periodically reassesses the customer's creditworthiness through ongoing
      credit reviews. The Bank generally

                                       75

<PAGE>

                           FNB BANCORP AND SUBSIDIARY

                   Notes to Consolidated Financial Statements

                      December 31, 2006, and 2005 and 2004

      requires collateral or other security to support commitments to extend
      credit. The following table provides summary information on financial
      institutions whose contract amounts represent credit risk as of December
      31:

<TABLE>
<CAPTION>
                                                                    2006            2005
                                                                -------------   ------------
<S>                                                             <C>               <C>
Financial instruments whose contract amounts represent
  credit risk:
     Undisbursed loan commitments                               $  60,591,000     36,607,000
     Lines of credit                                               72,311,000     49,863,000
     MasterCard lines                                               2,968,000      3,463,000
     Standby letters of credit                                      1,351,000      7,768,000
                                                                -------------   ------------
                                                                $ 137,221,000     97,701,000
                                                                =============   ============
</TABLE>

      Commitments to extend credit are agreements to lend to a customer as long
      as there is no violation of any condition established in the contract.
      Commitments generally have fixed expiration dates or other termination
      clauses and may require payment of a fee. Since many of the commitments
      are expected to expire without being drawn upon, the total commitment
      amounts do not necessarily represent future cash requirements. The Bank
      evaluates each customer's creditworthiness on a case-by-case basis. The
      amount of collateral obtained, if deemed necessary by the Bank upon
      extension of credit, is based on management's credit evaluation.
      Collateral held varies but may include accounts receivable, inventory,
      property, plant and equipment, and income-producing commercial and
      residential properties.

      Equity reserve and unused credit card lines are additional commitments to
      extend credit. Many of these customers are not expected to draw down their
      total lines of credit, and therefore, the total contract amount of these
      lines does not necessarily represent future cash requirements.

      Standby letters of credit are conditional commitments issued by the Bank
      to guarantee the performance of a customer to a third party. The credit
      risk involved in issuing letters of credit is essentially the same as that
      involved in extending loan facilities to customers. The Bank issues both
      financial and performance standby letters of credit. The financial standby
      letters of credit are primarily to guarantee payment to third parties. As
      of December 31, 2006, there were $1,223,000 issued in financial standby
      letters of credit. The performance standby letters of credit are typically
      issued to municipalities as specific performance bonds. As of December 31,
      2006 there were $128,000 issued in performance standby letters of credit.
      The terms of the guarantees will expire in 2006.

                                       76

<PAGE>

                           FNB BANCORP AND SUBSIDIARY

                   Notes to Consolidated Financial Statements

                        December 31, 2006, 2005 and 2004

      The Bank has experienced no draws on these letters of credit, and does not
      expect to in the future; however, should a triggering event occur, the
      Bank either has collateral in excess of the letters of credit or embedded
      agreements of recourse from the customer.

      The following methods and assumptions were used by the Company to estimate
      the fair value of financial instruments.

      (a)   Cash and Cash Equivalents

            The carrying amounts reported in the balance sheet for cash and
            short-term instruments approximate those assets fair values.

      (b)   Securities

            Fair values for securities are based on quoted market prices, where
            available. If quoted market prices are not available, fair values
            are based on quoted market prices of comparable instruments.

      (c)   Loans

            Fair values for variable-rate loans that reprice frequently and have
            no significant change in credit risk are based on carrying values.
            The fair values for other loans are estimated using discounted cash
            flow analyses, using interest rates currently being offered for
            loans with similar terms to borrowers of similar credit quality.

      (d)   Off-Balance Sheet Commitments

            Fair values for the company's off-balance-sheet lending commitments
            are based on fees currently charged to enter into similar
            agreements, taking into account the remaining terms of the
            agreements and the credit standing of the counterparties.

      (e)   Deposit Liabilities

            The fair values estimated for demand deposits (interest and
            noninterest checking, passbook savings, and certain types of money
            market accounts) are, by definition, equal to the amount payable on
            demand at the reporting date (i.e., their carrying amounts). Fair
            values for fixed-rate certificates of deposit are estimated using a
            discounted cash flow calculation that applies interest rates
            currently being offered on certificates for a schedule of the
            aggregate expected monthly maturities on time deposits.

                                       77

<PAGE>

                           FNB BANCORP AND SUBSIDIARY

                   Notes to Consolidated Financial Statements

                        December 31, 2006, 2005 and 2004

      (f)   Federal Funds Sold/Purchased

            The carrying amount of federal funds sold/purchased approximates
            their fair values.

      (g)   The carrying amount of Federal Home Loan Bank advances approximates
            their fair values.

      (h)   Bank Owned Life Insurance

            The carrying amount is the cash surrender value for all policies.

            The following table provides summary information on the estimated
            fair value of financial instruments at December 31, 2006:

<TABLE>
<CAPTION>
                                                         Carrying          Fair
                                                           amount         value
                                                       -------------   -----------
<S>                                                    <C>             <C>
Financial assets:
   Cash and cash equivalents                           $  27,022,000    27,022,000
   Securities available for sale                          94,945,000    94,945,000
   Loans, net                                            419,437,000   428,195,000
   Bank owned life insurance                               7,267,000     7,267,000
   Accrued interest receivable                             3,723,000     3,723,000

Financial liabilities:
   Deposits                                              481,567,000   481,785,000
   Federal Home Loan Bank advances                        30,000,000    30,323,000
   Accrued interest payable                                1,452,000     1,452,000

Off-balance-sheet commitments:
   Undisbursed loan commitments, lines of credit,
     Mastercard line, and standby letters of credit               --       936,000
</TABLE>

                                       78

<PAGE>

                           FNB BANCORP AND SUBSIDIARY

                   Notes to Consolidated Financial Statements

                        December 31, 2006, 2005 and 2004

            The following table provides summary information on the estimated
            fair value of financial instruments at December 31, 2005:

<TABLE>
<CAPTION>
                                                          Carrying         Fair
                                                           amount         value
                                                       -------------   -----------
<S>                                                    <C>             <C>
Financial assets:
   Cash and cash equivalents                           $  35,298,000    35,298,000
   Securities available for sale                         113,463,000   113,463,000
   Loans, net                                            380,224,000   387,372,000
   Bank owned life insurance                               7,011,000     7,011,000
   Accrued interest receivable                             3,437,000     3,437,000

Financial liabilities:
   Deposits                                              507,544,000   507,604,000
   Accrued interest payable                                1,165,000     1,165,000

Off-balance-sheet commitments:
   Undisbursed loan commitments, lines of credit,
     Mastercard line, and standby letters of credit               --       833,000
</TABLE>

      The carrying amounts of loans include $2,628,000 and $17,000 of nonaccrual
      loans (loans that are not accruing interest) at December 31, 2006 and
      2005, respectively. Management has determined that primarily because of
      the uncertainty of predicting an observable market interest rate,
      excessive amounts of time and money would be incurred to estimate the fair
      values of nonperforming loans. As such, these loans are recorded at their
      carrying amount in the estimated fair value columns. The following
      aggregate information is provided at December 31, about the contractual
      provisions of these loans:

                                              2006             2005
                                          ------------     ------------
         Aggregate carrying amount        $  2,628,000        17,000
         Effective rate                       9.61%           13.11%
         Average term to maturity           7 months         5 months

(14)  Significant Group Concentrations of Credit Risk

      Most of the Bank's business activity is with customers located within San
      Mateo and San Francisco counties. Generally, the loans are secured by
      assets of the borrowers. The loans are expected to be repaid from cash
      flows or proceeds from the sale of selected assets of the borrowers. The
      Bank does not have significant concentrations of loans to any one
      industry.

                                       79

<PAGE>

                           FNB BANCORP AND SUBSIDIARY

                   Notes to Consolidated Financial Statements

                        December 31, 2006, 2005 and 2004

      The distribution of commitments to extend credit approximates the
      distribution of loans outstanding. Commercial and standby letters of
      credit were granted primarily to commercial borrowers.

      The contractual amounts of credit-related financial instruments such as
      commitments to extend credit, credit-card arrangements, and letters of
      credit represent the amounts of potential accounting loss should the
      contract be fully drawn upon, the customer default, and the value of any
      existing collateral become worthless.

(15)  Regulatory matters

      The Company, as a bank holding company, is subject to regulation by the
      Board of Governors of the Federal Reserve System under the Bank Holding
      Company Act of 1956, as amended.

      The Bank is subject to various regulatory capital requirements
      administered by the federal banking agencies. Failure to meet minimum
      capital requirements can initiate certain mandatory and possibly
      additional discretionary actions by regulators that, if undertaken, could
      have a direct material effect on the Company's financial statements. Under
      capital adequacy guidelines and the regulatory framework for prompt
      corrective action, the Company and the Bank must meet specific capital
      guidelines that involve quantitative measures of the Company's and the
      Bank's assets, liabilities and certain off balance-sheet items as
      calculated under regulatory accounting practices. The capital amounts and
      classification are also subject to qualitative judgments by the regulators
      about components, risk weightings and other factors.

      Quantitative measures established by regulation to ensure capital adequacy
      require the Company and the Bank to maintain minimum amounts and ratios
      (set forth in the table below) of total and Tier 1 capital (as defined in
      the regulations) to risk-weighted assets (as defined), and of Tier 1
      capital (as defined) to average assets (as defined). Management believes,
      as of December 31, 2006, that the Company and the Bank have met all
      capital adequacy requirements to which they are subject.

      As of December 31, 2006, the most recent notification from the regulatory
      agencies categorized the Bank as well capitalized under the regulatory
      framework for prompt corrective action. To be categorized as well
      capitalized the Bank must maintain minimum total risk-based, Tier 1
      risk-based, and Tier 1 leverage ratios as set forth in the table. There
      are no conditions or events since that notification that management
      believes have changed the Bank's categories.

                                       80

<PAGE>

                           FNB BANCORP AND SUBSIDIARY

                   Notes to Consolidated Financial Statements

                        December 31, 2006, 2005 and 2004

      The consolidated actual capital amounts and ratios of FNB Bancorp and
      Subsidiary are also presented in the following table:

<TABLE>
<CAPTION>
                                                                                                 To be well capitalized under
                                                                            For capital            prompt corrective action
                                                 Actual                  adequacy purposes                provisions
                                      ---------------------------   --------------------------   -----------      -----------
                                         Amount          Ratio         Amount         Ratio         Amount           Ratio
                                      ------------   ------------   ------------   -----------   -----------      -----------
<S>                                   <C>                   <C>       <C>                 <C>     <C>                <C>
December 31, 2006:
   Total risk-based capital
     (to risk weighted assets)
   Consolidated Company               $ 64,297,000          12.00%    42,855,000          8.00%   53,569,000           n/a
   Bank                                 64,176,000          11.98     42,855,000          8.00    53,569,000         10.00%

   Tier 1 capital (to risk
     Weighted assets)
   Consolidated Company                 59,216,000          11.05     21,431,000          4.00    32,146,000           n/a
   Bank                                 59,095,000          11.03      21,431000          4.00    32,146,000          6.00

   Tier 1 capital (to average
     assets)
   Consolidated Company                 59,216,000          10.08     23,497,000          4.00    29,371,000           n/a
   Bank                                 59,095,000          10.06     23,497,000          4.00    29,371,000          5.00
</TABLE>

<TABLE>
<CAPTION>
                                                                                                 To be well capitalized under
                                                                           For capital             Prompt corrective action
                                                 Actual                 adequacy purposes                 Provisions
                                      ---------------------------   --------------------------   ----------------------------
                                         Amount          Ratio         Amount         Ratio         Amount           Ratio
                                      ------------   ------------   ------------   -----------   -----------      -----------
<S>                                   <C>                   <C>       <C>                 <C>     <C>                <C>
December 31, 2005:
   Total risk-based capital
     (to risk weighted assets)
   Consolidated Company               $ 57,181,000          11.59%    39,478,000          8.00%   49,347,000           n/a
   Bank                                 57,045,000          11.56     39,478,000          8.00    49,347,000         10.00%

   Tier 1 capital (to risk
     Weighted assets)
   Consolidated Company                 52,634,000          10.67     19,739,000          4.00    29,608,000           n/a
   Bank                                 52,498,000          10.64     19,739,000          4.00    29,608,000          6.00

   Tier 1 capital (to average
     assets)
   Consolidated Company                 52,634,000           9.50     22,172,000          4.00    27,715,000           n/a
   Bank                                 52,498,000           9.47     22,172,000          4.00    27,715,000          5.00
</TABLE>

(16)  Stock Option Plans

      In 1997, the Company adopted an incentive employee stock option plan,
      known as the 1997 FNB Bancorp Plan. In 2002, the Company adopted an
      incentive employee option plan known as the 2002 FNB Bancorp Plan. The
      Plans allow the Company to grant options to employees of up to 360,571
      shares, which includes the effect of stock dividends of common stock.
      Options currently outstanding become exercisable in one to

                                       81

<PAGE>

                           FNB BANCORP AND SUBSIDIARY

                   Notes to Consolidated Financial Statements

                        December 31, 2006, 2005 and 2004

      five years from the grant date, based on a vesting schedule of 20% per
      year and expire 10 years after the grant date. The options exercise price
      is the fair value of the options at the grant date.

      The amount of compensation expense for options recorded in the years ended
      December 31, 2006, December 31 2005 and December 31, 2004 was $39,000,
      $10,000 and $6,000, respectively. The income tax benefit recognized in the
      income statements for these amounts was under $1,000 for the same three
      periods.

      The total intrinsic value of options exercised during the year ended
      December 31, 2006 was $54,000 under the 2002 Plan and $39,000 under the
      1997 Plan.

      The amount of total unrecognized compensation expense related to
      non-vested options at December 31, 2006 was $91,000, and the weighted
      average period it will be amortized over is 2.9 years. The amount of total
      unrecognized compensation expense related to non-vested options at
      December 31, 2005 was $60,000, and the weighted average period it will be
      amortized over is 2.5 years. The amount of total unrecognized compensation
      expense related to non-vested options at December 31, 2004 was $46,000,
      and the weighted average period it will be amortized over is 1.9 years.

      The fair value of each option granted is estimated on the date of grant
      using the fair value method with the following weighted average
      assumptions used for grants in 2006; dividend yield of 6.66% for the year;
      risk-free interest rate of 5.19%; expected volatility of 10.0%; expected
      life of 6.5 years; and weighted average fair value of $1.50. The
      assumptions for grants in 2005; dividend yield of 6.98% for the year;
      risk-free interest rate of 3.91%; expected volatility of 10%; expected
      life of 5.0 years; and weighted average fair value of $0.75. The
      assumptions used for grants in 2004; dividend yield of 6.85% for the year;
      risk-free interest rate of 3.73%; expected volatility of 10%; expected
      life of 5.0 years; and weighted average fair value of $0.76.

                                       82

<PAGE>

                           FNB BANCORP AND SUBSIDIARY

                   Notes to Consolidated Financial Statements

                        December 31, 2006, 2005 and 2004

      A summary of option activity under the 2002 FNB Bancorp Plan as of
      December 31, 2006 and changes during the year then ended is presented
      below.

      2002 FNB Bancorp Plan

<TABLE>
<CAPTION>
                                                          Weighted-
                                                           Average
                                             Weighted-    Remaining    Aggregate
                                              Average    Contractual   Intrinsic
                                              Exercise       Term        Value
Options                             Shares     Price      (in years)     (000)
--------------------------------------------------------------------------------
<S>                                <C>       <C>             <C>        <C>
Outstanding at January 1, 2006     162,602   $   24.60
Granted                             45,206   $   34.52
Exercised                           (7,014)  $   24.84
Forfeited or expired                (4,728)  $   27.63
                                   -------
Outstanding at December 31, 2006   196,066   $   26.81       7.6        $ 1,116
Exercisable at December 31, 2006    77,784   $   23.89       6.7        $   670
</TABLE>

      The following supplemental information applies to the three years ended
      December 31:

<TABLE>
<CAPTION>
                                       2006            2005            2004
                                  ---------------------------------------------
<S>                               <C>             <C>             <C>
Options outstanding                  196,066         162,602         122,204
Range of exercise prices          $20.57-$34.52   $20.57-$28.07   $20.57-$28.07
Weighted average remaining
  contractual life                     7.6             8.0             8.1
Fully vested options                  77,784          51,573          27,549
Weighted average exercise price       $23.89          $22.85          $21.80
Aggregate intrinsic value            $670,000      $1,177,000        $264,000
Weighted average remaining
  contractual life (in years)          6.7             7.2             7.2
</TABLE>

                                       83

<PAGE>

                           FNB BANCORP AND SUBSIDIARY

                   Notes to Consolidated Financial Statements

                        December 31, 2006, 2005 and 2004

      A summary of option activity under the 1997 FNB Bancorp Plan as of
      December 31, 2006, and changes during the year then ended is presented
      below. No options have been granted under this plan since 2001.

      1997 FNB Bancorp Plan

<TABLE>
<CAPTION>
                                                          Weighted-
                                                           Average
                                             Weighted-    Remaining    Aggregate
                                              Average    Contractual   Intrinsic
                                              Exercise       Term        Value
Options                             Shares     Price      (in years)     (000)
--------------------------------------------------------------------------------
<S>                                <C>       <C>              <C>        <C>
Outstanding at January 1, 2006      72,174   $   18.89
Granted                                 --          --
Exercised                          (13,325)  $   18.80
Forfeited or expired                    --
Outstanding at December 31, 2006    58,849   $   18.92        3.2        $ 799
                                   -------
Exercisable at December 31, 2006    58,849   $   18.92        3.2        $ 799
</TABLE>

      The following supplemental information applies to the three years ended
      December 31:

<TABLE>
<CAPTION>
                                       2006            2005            2004
                                  --------------------------------------------
<S>                               <C>             <C>             <C>
Options outstanding                   58,849          72,174         78,455
Range of exercise prices          $17.86-$20.63   $17.86-$20.63   $17.86-20.63
Weighted average remaining
  contractual life                     3.2             4.1            5.2
Fully vested options                  58,849          67,205         63,162
Weighted average exercise price       $18.92          $18.91         $19.00
Aggregate intrinsic value            $799,000      $1,271,000       $781,000
Weighted average remaining
  contractual life (in years)          3.2             4.0            4.9
</TABLE>

      The following is a summary of all options exercised

<TABLE>
<CAPTION>
                                                          2006      2005      2004
                                                        ---------------------------
<S>                                                     <C>       <C>       <C>
Weighted average intrinsic value of options exercised   $ 12.92   $  9.75   $ 10.92
Weighted average of fair value of options exercised     $ 33.80   $ 29.26   $ 29.85
</TABLE>

                                       84

<PAGE>

                           FNB BANCORP AND SUBSIDIARY

                   Notes to Consolidated Financial Statements

                        December 31, 2006, 2005 and 2004

(17)  Quarterly Data (Unaudited)

<TABLE>
<CAPTION>
                                           First        Second      Third       Fourth
                                        -----------   ---------   ---------   ---------
<S>                                     <C>           <C>         <C>         <C>
2006:
   Interest income                      $ 8,837,000   8,928,000   9,502,000   9,929,000
   Interest expense                       1,951,000   2,168,000   2,786,000   2,916,000
                                        -----------   ---------   ---------   ---------
      Net interest income                 6,886,000   6,760,000   6,716,000   7,013,000
   Provision for loan losses                193,000     163,000     163,000     164,000
                                        -----------   ---------   ---------   ---------
      Net interest income,
        after provision for
         loan losses                      6,693,000   6,597,000   6,553,000   6,849,000

   Non-interest income                    2,316,000   1,827,000   1,046,000   1,070,000
   Non-interest expense                   5,486,000   5,303,000   5,346,000   5,625,000
                                        -----------   ---------   ---------   ---------
   Income before income taxes             3,523,000   3,121,000   2,253,000   2,294,000

   Provision for income taxes             1,075,000   1,012,000     787,000     735,000
                                        -----------   ---------   ---------   ---------
      Net earnings                      $ 2,448,000   2,109,000   1,466,000   1,559,000
                                        ===========   =========   =========   =========

   Basic earnings per share             $      0.86        0.74        0.52        0.55
   Diluted earnings per share                  0.84        0.73        0.51        0.53

                                           First        Second      Third       Fourth
                                        -----------   ---------   ---------   ---------
2005:
   Interest income                      $ 6,515,000   7,455,000   8,033,000   8,729,000
   Interest expense                         965,000   1,208,000   1,567,000   1,793,000
                                        -----------   ---------   ---------   ---------
      Net interest income                 5,550,000   6,247,000   6,466,000   6,936,000
   Provision for loan losses                127,000     157,000     172,000     172,000
                                        -----------   ---------   ---------   ---------
      Net interest income,
        after provision for
        loan losses                       5,423,000   6,090,000   6,294,000   6,764,000

   Non-interest income                      903,000   1,009,000     993,000     936,000
   Non-interest expense                   4,895,000   5,222,000   5,060,000   5,078,000
                                        -----------   ---------   ---------   ---------
   Income before income taxes             1,431,000   1,877,000   2,227,000   2,622,000

   Provision for income taxes               415,000     595,000     674,000     745,000
                                        -----------   ---------   ---------   ---------
      Net earnings                      $ 1,016,000   1,282,000   1,553,000   1,877,000
                                        ===========   =========   =========   =========

   Basic earnings per share             $      0.36        0.45        0.55        0.66
   Diluted earnings per share                  0.35        0.45        0.54        0.64
</TABLE>

                                       85

<PAGE>

                           FNB BANCORP AND SUBSIDIARY

                   Notes to Consolidated Financial Statements

                        December 31, 2006, 2005 and 2004

(18)  Condensed Financial Information of Parent Company

      The parent company-only condensed balance sheets, condensed statements of
income, and condensed statements of cash flows information are presented as of
and for the year ended December 31, as follows:

  FNB Bancorp
  Condensed balance sheets                               2006           2005
                                                     ------------   -----------
  Assets:
     Cash and due from banks                         $     37,000       146,000
     Investments in subsidiary                         61,942,000    55,107,000
     Income tax receivable from subsidiary                 83,000            --
     Other assets                                           1,000            --
                                                     ------------   -----------
        Total assets                                 $ 62,063,000    55,253,000
                                                     ============   ===========
  Liabilities:
     Other liabilities                               $         --        10,000
  Stockholders' equity                                 62,063,000    55,243,000
                                                     ------------   -----------
        Total liabilities and stockholders' equity   $ 62,063,000    55,253,000
                                                     ============   ===========

<TABLE>
<CAPTION>
FNB Bancorp
Condensed statements of income                           2006           2005        2004
-----------------------------------------------      ------------   -----------------------
<S>                                                  <C>              <C>         <C>
Income:
   Dividend from subsidiary                          $  1,172,000     2,269,000   3,446,000
   Other income                                                --            --       1,000
                                                     ------------   -----------------------
      Total income                                      1,172,000     2,269,000   3,447,000
                                                     ------------   -----------------------
Expense:
   Other expense                                           27,000        17,000      10,000
                                                     ------------   -----------------------
      Total expense                                        27,000        17,000      10,000
                                                     ------------   -----------------------

      Income before income taxes and equity in
        undistributed earnings of subsidiary            1,145,000     2,252,000   3,437,000
Income tax expense (credit)                                 1,000            --    (36,000)
                                                     ------------   -----------------------
      Income before equity in undistributed
        earnings of subsidiary                          1,144,000     2,252,000   3,473,000
Equity in undistributed earnings of subsidiary          6,438,000     3,476,000   1,215,000
                                                     ------------   -----------------------
      Net earnings                                   $  7,582,000     5,728,000   4,688,000
                                                     ============   =======================
</TABLE>

                                       86

<PAGE>

                           FNB BANCORP AND SUBSIDIARY

                   Notes to Consolidated Financial Statements

                        December 31, 2006, 2005 and 2004

<TABLE>
<CAPTION>
FNB Bancorp
Condensed statements of cash flows                   2006          2005         2004
----------------------------------               ------------   ------------------------
<S>                                              <C>            <C>          <C>
Net earnings                                     $  7,582,000    5,728,000    4,688,000
Income tax receivable-subsidiary                      (83,000)          --           --
Change in other assets                                 (1,000)          --      403,000
Change in other liabilities                           (10,000)    (309,000)     (19,000)
Undistributed earnings of subsidiary               (6,438,000)  (3,476,000)  (1,215,000)
Stock-based compensation expense                      122,000       10,000        6,000
                                                 ------------   ------------------------
   Cash flows provided by operating activities      1,172,000    1,953,000    3,863,000
                                                 ------------   ------------------------

Increase in investment to subsidiary                       --           --           --
                                                 ------------   ------------------------
   Cash flows used in investing activities                 --           --           --
                                                 ------------   ------------------------

Proceeds from exercise of common stock options        425,000      150,000      272,000
Dividends paid                                     (1,633,000)  (1,542,000)  (1,526,000)
Repurchases of common stock                           (73,000)    (765,000)  (2,324,000)
                                                 ------------   ------------------------
   Cash flows provided by financing activities     (1,281,000)  (2,157,000)  (3,578,000)
                                                 ------------   ------------------------

   Net (decrease) increase in cash                   (109,000)    (204,000)     285,000
Cash, beginning of year                               146,000      350,000       65,000
                                                 ------------   ------------------------
Cash, end of year                                $     37,000      146,000      350,000
                                                 ============   ========================
</TABLE>

                                       87

<PAGE>

                                   SIGNATURES

Pursuant to the requirements of Section 15(d) of the Securities Exchange Act of
1934, the Registrant has duly caused this report on Form 10-K/A to be signed on
its behalf by the undersigned, thereunto duly authorized.

                                   FNB BANCORP

Dated: November 16, 2007            By: /s/ David A. Curtis
                                       ----------------------------------
                                       David A. Curtis
                                       Chief Financial Officer

<TABLE>
<S>                           <C>                                         <C>
/s/ Michael R. Wyman          Chairman of the Board of Directors          November 16, 2007
--------------------------
Michael R. Wyman


/s/ Thomas C. McGraw          Director, Chief Executive Officer and       November 16, 2007
--------------------------    Secretary (Principal Executive Officer)
Thomas C. McGraw


/s/ David A. Curtis           Senior Vice President and Chief Financial   November 16, 2007
--------------------------    Officer (Principal Financial and
David A. Curtis               Accounting Officer)


/s/ Edward J. Watson          Director                                    November 16, 2007
--------------------------
Edward J. Watson


/s/ Lisa Angelot              Director                                    November 16, 2007
--------------------------
Lisa Angelot


/s/ Merrie Turner Lightner    Director                                    November 16, 2007
--------------------------
Merrie Turner Lightner


/s/ Michael Pacelli           Director                                    November 16, 2007
--------------------------
Michael Pacelli


/s/ Jim D. Black              Director  and  President                    November 16, 2007
--------------------------
Jim D. Black


/s/ Anthony J. Clifford       Director, Executive  Vice President and     November 16, 2007
--------------------------    Chief Operating Officer
Anthony J. Clifford
</TABLE>