First Northern Community Bancorp 2nd Quarter Earnings Report

Residential Construction Loans Affecting Earnings

Capital Remains Strong and Bank is Sound
DIXON, Calif.--(Business Wire)--
First Northern Community Bancorp (OTCBB:FNRN), holding company for
First Northern Bank, today announced financial results through the
second quarter of 2008. The Company reported a year-to-date net loss
as of June 30, 2008 of $0.80 million, or ($0.09) per diluted share,
compared to $4.08 million, or $0.44 per diluted share earned in the
same fiscal period last year. Net loss for the quarter ended June 30,
2008 was $0.86 million, or ($0.10) per diluted share, compared to
$1.99 million, or $0.22 per diluted share, earned in the same fiscal
period last year. (All 2007 per share earnings have been adjusted for
a 6% stock dividend issued March 31, 2008.)

Year-to-date 2008 net income was impacted by $3.78 million in
provision for loan losses and a $385 thousand loss on sales of other
real estate owned (net of tax). "Without these real estate related
losses and loan write-downs surrounding the small builder and
construction-related commercial segments of the portfolio affected by
the repercussions of the country's housing market meltdown, net income
would have been $3.42 million as of June 2008, a decrease of only
17.6% from the same period last year," stated Owen J. Onsum, President
& Chief Executive Officer.

Total assets at June 30, 2008 were $661.4 million, a decrease of
$31.7 million, or 4.6% from prior-year second quarter levels. Total
deposits of $573.8 million decreased $37.7 million or 6.2% compared to
June 30, 2007 figures. During that same period, total net loans
(including loans held-for-sale) increased $24.4 million, or 5.0%, to
$513.4 million.

Owen J. Onsum, President & Chief Executive Officer, stated, "Net
earnings have been impacted for the first six months of 2008 primarily
due to the Bank's vigilance in addressing the risk exposure in a
segment of our loan portfolio impacted by the weakness in the
homebuilding industry and the slowing economy. Like other financial
institutions that provide residential construction loans, First
Northern Community Bancorp's earnings have been hit hard by the
continuing need to write down property values used as collateral on
loans. The strength of our capital position has enabled Bank
Management to take prompt action deemed prudent to properly value the
collateral and take resulting losses sooner rather than later. We
believe that our experienced loan administration and special assets
teams have identified our credit problems, and the majority of the
credit deterioration in the portfolio is centered in home
construction, which represents approximately 10% of the portfolio.
Since it is unclear when this economic downturn will bottom out, we
have also continued to build our reserves for loan losses stemming
from the need to further write down the value of real estate
collateral. We believe that these actions have significantly
strengthened our balance sheet, which will enable us to better manage
through this challenging point in the economic cycle. First Northern
has been through many economic cycles in its nearly 100 years of
serving the community; we've survived the Great Depression, and many,
many recessions. We are well-positioned and experienced to handle
economic downturns, and take steps to put losses behind us. It is
unfortunate that our net loss will overshadow our accomplishments and
strengths that continue to be quite impressive. Some of the more
notable strengths and accomplishments include:

-- First Northern continues to be a very safe and sound financial
institution.

-- First Northern Community Bancorp is "well-capitalized," which
means the Company's capital is above what is required to
support its operations and serves as a buffer against losses.
In fact, we have over $60 million dollars in capital which is
almost twice the amount of capital required by our regulators.

-- First Northern is in a strong liquidity position.

-- Core business lines continue to perform well- Other Operating
Income is up 6.8% primarily due to gains in Service Charges on
Deposit Accounts, Interchange Income on Visa Debit Card
Transactions, and Investment & Brokerage Services Income.

-- First Northern is conducting a "rigorous and methodical"
review of our cost structure to help offset the losses in our
real estate loan portfolio.

-- Many new products and services are currently under development
that we expect will contribute to the Bank's profitability and
its solid reputation as a respected leader in the community
and financial services industry."

First Northern Bank, an independent community bank headquartered
in Solano County since 1910, serves Solano, Yolo, Sacramento, Placer
and the west slope of El Dorado County. First Northern has 12 branches
located in Dixon, Davis, West Sacramento, Fairfield, Vacaville (2),
Winters, Woodland, Downtown Sacramento, Roseville, Folsom, and most
recently Auburn. First Northern also has an SBA Loan Office and full
service Trust Department in Sacramento and offers non-FDIC insured
Investment and Brokerage Services at each branch location. The Bank
can be found on the Web at www.thatsmybank.com.

Forward-Looking Statements

This press release may include certain "forward-looking
statements" about First Northern Community Bancorp (the "Company").
These forward-looking statements are based on management's current
expectations and are subject to certain risks, uncertainties and
changes in circumstances. Actual results may differ materially from
these expectations due to changes in global political, economic,
business, competitive, market and regulatory factors. More detailed
information about these risk factors is contained in the Company's
most recent reports filed with the Securities and Exchange Commission
on Forms 10-K, 10-Q and 8-K, each as it may be amended from time to
time, which identify important risk factors that could cause actual
results to differ materially from those contained in the
forward-looking statements. The financial information contained in
this release should be read in conjunction with the consolidated
financial statements and notes thereto included in the Company's most
recent reports on Form 10-K and Form 10-Q. The Company undertakes no
obligation to update these forward-looking statements to reflect
events or circumstances arising after the date on which they are made.
For further information regarding the Company, please read the
Company's reports filed with the SEC and available at www.sec.gov.

First Northern Community Bancorp & First Northern Bank
Owen J. Onsum, President & Ceo, 707-678-3041

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