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FNCB Bancorp, Inc. Reports Earnings Increase for 2020 of 39% and Announces Authorization of Stock Repurchase Program

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DUNMORE, Pa., Jan. 29, 2021 (GLOBE NEWSWIRE) -- FNCB Bancorp, Inc. (NASDAQ:FNCB), the parent company of Dunmore-based FNCB Bank (the "Bank"), today reported net income for 2020 of $15.3 million, or $0.76 per basic and diluted share, compared to net income of $11.1 million, or $0.56 per basic and diluted share, for 2019. The $4.2 million, or 38.6%, increase in earnings was due to increases of $3.9 million in net interest income and $1.6 million in non-interest income and a $0.8 million reduction in non-interest expense. Partially offsetting these positive factors were increases in the provision for loan and lease losses and income tax expense of $1.1 million and $0.9 million, respectively. Net income for the fourth quarter of 2020 was $5.2 million, or $0.26 per basic and diluted share, an increase of $1.7 million, or 47.8%, compared to $3.5 million, or $0.17 per basic and diluted share, for the same quarter of 2019, which primarily reflected a $2.3 million increase in net interest income, partially offset by a $0.6 million decrease in non-interest income. 

Return on average assets and return on average shareholders' equity were 1.13% and 10.66%, respectively, in 2020, compared to 0.92% and 8.88%, respectively in 2019. For the three months ended December 31, 2020, annualized return on average assets and annualized return on average shareholders' equity were 1.41% and 13.49%, respectively. Comparatively, annualized return on average assets was 1.15% and annualized return on average shareholders' equity was 10.43% for the three months ended December 31, 2019.

Dividends declared and paid in 2020 totaled $0.22 per share, an increase of $0.02 per share, or 10.0%, compared to $0.20 per share for 2019. Total dividends declared and paid for 2020 equated to a dividend yield of approximately 3.44% based on the closing stock price of $6.40 per share at December 31, 2020.

Stock Repurchase Program

On January 27, 2021, FNCB's Board of Directors authorized a stock repurchase program under which up to 975,000 shares of FNCB's outstanding common stock may be acquired in the open market commencing no earlier than February 3, 2021 and expiring December 31, 2021 pursuant to a trading plan that may be adopted in accordance with Rule 10b5-1 of the Securities Exchange Act of 1934, as amended.

The shares will be purchased from time to time at prevailing market prices, through open market transactions depending upon market conditions.  Repurchases under the repurchase program will be administered through an independent broker.  Repurchases are subject to SEC regulations as well as certain price, market volume and timing constraints specified in the trading plan. Under the program, the purchases will be funded from available working capital presently available to FNCB, and the repurchased shares will be returned to the status of authorized but unissued shares of Common Stock.  There is not a guarantee as to the exact number of shares that will be repurchased by FNCB, and FNCB may discontinue purchases at any time that management determines additional repurchases are no longer warranted.  As of December 31, 2020,  FNCB had approximately 20.2 million shares outstanding.

Gerard A. Champi, President and Chief Executive Officer, remarked, "The Board's approval of this program reflects our confidence in FNCB's future. Repurchasing shares is one means of underscoring our commitment to enhancing shareholder value."

2020 Highlights:

  • Fourth quarter earnings per share increased $0.09 per share, or 52.9%, to $0.26 per share in 2020 compared to $0.17 per share for the fourth quarter of 2019. For the full year, earnings per share increased $0.20 per share, or 35.7%, to $0.76 per share in 2020 from $0.56 per share in 2019;
  • Return on average assets improved to 1.41% for the fourth quarter of 2020 from 1.15% for the same quarter of 2019. For the full year, return on average assets was 1.13% in 2020 compared to 0.92% in 2019;
  • For the fourth quarter, return on average shareholders' equity improved to 13.49% in 2020 from 10.43% in 2019. Return on average shareholders' equity for all of 2020 improved to 10.66% compared to 8.88% for 2019;
  • Tangible book value increased $1.08 per share, or 16.3%, to $7.70 per share at December 31, 2020 from $6.62 per share at December 31, 2019;
  • Total risk-based capital and Tier I Leverage ratios (FNCB Bank) were 15.79% and 9.57% at December 31, 2020 compared to 14.77% and 10.36% at December 31, 2019, respectively;
  • Cost of funds for the fourth quarter of 2020 decreased 54 basis points to 0.44% from 0.98% for the fourth quarter of 2019. Year over year, cost of funds decreased 44 basis points to 0.64% in 2020 from 1.08% in 2019;
  • Ratio of non-performing loans to total loans improved to 0.62% at December 31, 2020 compared to 1.10% at December 31, 2019; and
  • The efficiency ratio improved to 54.89% for the fourth quarter of 2020 from 67.35% for the same quarter of 2019.

Mr. Champi commented, "Despite a very challenging operating environment brought on by the COVID-19 pandemic, we were able to achieve much success in 2020. I am extremely proud of the effort put forth by our entire FNCB team. In addition to recording very strong earnings results, most importantly, we were able to provide support to our communities through this very difficult time. Our Bank became a leader with respect to the SBA's Paycheck Protection Program ("PPP"), guiding many businesses in our market area through the application, funding and forgiveness process. Additionally, we were one of a select group of approved lenders participating in the Federal Reserve's Main Street Lending Program. Participation in these programs, along with market opportunities within our investment portfolios and robust demand for residential mortgages, contributed positively to our overall performance and improved our efficiency in 2020. As we head into 2021, our strong balance sheet position will allow us to continue to support the borrowing needs of individuals and businesses, including funding for the second round of PPP loans that recently became available."

Summary Results 

For the three months ended December 31, 2020, tax-equivalent net interest income increased $2.4 million, or 25.4%, to $11.8 million from $9.4 million for the same three months of 2019. The increase in tax-equivalent net interest income for the fourth quarter was due to a $1.3 million, or 11.6%, increase in tax-equivalent interest income to $12.9 million in 2020 from $11.6 million in 2019, coupled with a $1.1 million, or 48.1%, reduction in interest expense to $1.1 million in 2020 from $2.2 million in 2019. Included in tax-equivalent interest income in the fourth quarter of 2020 was $1.2 million in net PPP loan origination fees that were recognized upon forgiveness of the respective loan balances. Additionally, the higher amount of tax-equivalent interest income reflected higher balances of earning assets, partially offset by a reduction in the tax-equivalent yield on earning assets. Average earning assets increased $171.8 million, or 15.5%, to $1.277 billion for the three months ended December 31, 2020 from $1.106 billion for the same three months of 2019, which reflected increases in volumes of both loans, primarily PPP loans, and investment securities. Partially offsetting the increase in volumes was a 14 basis point reduction in the tax-equivalent yield on earning assets to 4.05% for the fourth quarter of 2020 from 4.19% for the same quarter of 2019. With respect to the reduction in interest expense, FNCB's cost of funds decreased 54 basis points to 0.44% from 0.98% comparing the three months ended December 31, 2020 and 2019. Specifically, FNCB's cost of interest-bearing deposits decreased 46 basis points to 0.42% from 0.88% comparing the fourth quarters of 2020 and 2019, reflecting a reduction in market interest rates and oversupply. Additionally, the drop in short-term market interest rates contributed to a 50 basis point decrease in average borrowing costs to 1.94% from 2.44% comparing the three months ended December 31, 2020 and 2019. FNCB's tax-equivalent net interest margin for the fourth quarter of 2020 improved 29 basis points to 3.70% compared to 3.41% for the same quarter of 2019. The margin improvement primarily reflected the impact of PPP loans including interest income and net loan origination fees. Excluding the impact of PPP loans (non-GAAP), FNCB's tax-equivalent net interest margin would have been 3.50% for the fourth quarter of 2020. For the year ended December 31, 2020, tax-equivalent net interest income increased $4.3 million, or 11.7%, to $41.0 million compared to $36.7 million for the year ended December 31, 2019. The improvement in net interest income for the year-to-date period was largely due to a reduction in funding costs, recognition of the $1.2 million in net PPP loan origination fees and an increase in average earnings assets, which were partially offset by a decrease in the tax-equivalent yield on average earning assets. For the year ended December 31, 2020, the cost of funds decreased 44 basis points to 0.64% from 1.08% for the year ended December 31, 2019. Conversely, the tax-equivalent earning-asset yield decreased 31 basis points to 3.85% in 2020 compared to 4.16% in 2019. The tax-equivalent net interest margin improved 6 basis points to 3.35% in 2020 from 3.29% in 2019. For purposes of presenting net interest income, earning-asset yields and net interest margin information on a tax-equivalent basis, tax-free interest income is adjusted using the statutory federal corporate income tax rate of 21.0% for 2020 and 2019.

For the quarter ended December 31, 2020, non-interest income was $2.1 million, a decrease of $0.6 million, or 22.7%, compared to $2.7 million for the same period of 2019. The decrease in non-interest income for the fourth quarter was largely due to reductions in loan referral fees/interest rate swap revenue and net gains on the sale of available-for-sale securities, partially mitigated by an increase in net gains on equity securities and net gains on the sale of mortgage loans held for sale. Loan referral fees/interest rate swap revenue declined $629 thousand, or 92.4%, to $52 thousand for the fourth quarter of 2020 from $681 thousand for the same quarter of 2019, due to a reduction in the number and volume of such transactions. Net gains on the sale of available-for-sale securities was $24 thousand for the three months ended December 31, 2020, a decrease of $501 thousand, or 95.4%, from $525 thousand for the same three months of 2019. Market value appreciation resulted in a net gain on equity securities of $307 thousand for the fourth quarter of 2020 compared to a net loss of $2 thousand for the same quarter of 2019. Strong demand for home mortgages contributed to a $133 thousand, or 241.8%, increase in net gains on the sale of mortgage loans held for sale comparing the fourth quarters of 2020 and 2019. Non-interest income totaled $9.2 million for the year ended December 31, 2020, an increase of $1.6 million, or 21.4%, compared to $7.6 million for the year ended December 31, 2019. The increase in non-interest income for the year-to-date periods was primarily due to an increase in net gains on equity securities of $1.1 million. FNCB recognized a gain of $1.1 million on the conversion of an equity security of a bank holding company that was part of a merger and acquisition transaction completed in the third quarter of 2020. Also contributing to the increase in year-to-date non-interest income were increases of $400 thousand, or 158.1%, in net gains on the sale of mortgage loans held for sale, $301 thousand, or 24.5%, in net gains on the sale of securities, and $217 thousand, or 7.2%, in deposit service charges. Partially offsetting these positive factors was a decrease in loan referral fees/interest rate swap revenue of $313 thousand, or 44.5%, to $390 thousand in 2020 compared to $703 thousand in 2019.

For the three months ended December 31, 2020, non-interest expense decreased by $363 thousand, or 4.7%, to $7.4 million from $7.8 million for the comparable three months of 2019. The reduction in non-interest expense for the fourth quarter was primarily due to a decrease in other operating expenses of $527 thousand, or 25.1%, which largely reflected a $116 thousand credit for off balance sheet commitments for the three months ended December 31, 2020 compared to a provision of $204 thousand for the same three months of 2019. Also factoring into the reduction in other operating expenses comparing the three months ended December 31, 2020 and 2019 were prepayment penalties of $259 thousand for the early payoff of FHLB advances recorded in the fourth quarter of 2019.  Non-interest expense for all of 2020 totaled $28.9 million, a decrease of $767 thousand, or 2.6%, from $29.7 million for 2019. Similar to the reasons for the fourth quarter reduction, the decrease in non-interest expense was predominantly due to a $740 thousand, or 12.0%, reduction in other operating expenses, resulting from a $538 thousand favorable swing in the provision for off balance sheet commitments, due to lower commitment volumes. 

Asset Quality

FNCB's asset quality improved throughout 2020, as total non-performing loans decreased $3.5 million to $5.6 million, or 0.62% of total loans, at December 31, 2020 from $9.1 million, or 1.10% of total loans, at December 31, 2019. On a linked quarter basis, non-performing loans decreased $595 thousand, or 9.6%, from $6.2 million, or 0.64% of total loans, at September 30, 2020. FNCB's loan delinquency rate (total delinquent loans as a percentage of total loans) was 0.99% at December 31, 2020 compared to 1.46% at the end of 2019. The decrease in non-performing loans and loan delinquencies primarily reflected two large commercial relationships that returned to accrual status during 2020. Additionally, FNCB recorded a net recovery of previously charged-off loans of $1.1 million, or 0.12% of average loans, for 2020 compared net charge-offs of  0.16% for 2019. The net recovery position for 2020 was related primarily to large recoveries received on two previously charged-off commercial loans. Due to continued economic uncertainty related to the COVID-19 pandemic, FNCB increased its provision for loan and lease losses $1.1 million, or 143.5%, to $1.9 million in 2020 from $0.8 million in 2019. The allowance for loan and lease losses as a percentage of gross loans was 1.33% and 1.08% at December 31, 2020 and 2019, respectively. Excluding PPP loans (non-GAAP), FNCB's allowance for loan and lease losses as a percentage of gross loans was 1.45% at December 31, 2020. 

Cares Act and COVID-19 Related Events

On December 27, 2020, a second stimulus bill was signed into law adding emergency relief to the original Cares Act that was enacted in March 2020. The new relief effort includes a second round of PPP funding through the Small Business Administration ("SBA") for qualifying businesses as well as additional fiscal stimulus packages and emergency relief programs. During 2020, FNCB facilitated and funded 1,002 PPP loans representing approximately $118.6 million in funding. As of December 31, 2020, FNCB has received $40 million in borrower forgiveness from the SBA and anticipates that the remaining PPP loan balances will qualify for borrower forgiveness under the guidelines of the program. On January 19, 2021, FNCB began originating PPP loans as part of the second round of funding and as of January 28, 2021, has underwritten, submitted and received SBA approval for 162 loans representing approximately $29.7 million in funding.

During 2020, FNCB also extended loan payment deferral modifications under Section 1048 of the Cares Act to qualifying commercial and consumer loan customers experiencing financial disruption due to the COVID-19 pandemic. As of December 31, 2020, FNCB had made 843 such modifications on loan balances with an aggregate recorded investment of approximately $151.4 million. Additionally, FNCB extended a second payment deferral modification for 79 loans with an aggregate recorded investment of $22.0 million. As of December 31, 2020, there were 45 loans with an aggregate recorded investment of $9.5 that were still under a payment relief modification. 

Financial Condition

Total assets increased $262.1 million, or 21.8%, to $1.466 billion at December 31, 2020, from $1.204 billion at December 31, 2019.  The significant year-over-year balance sheet growth reflected substantial increases in cash and cash equivalents, available-for-sale debt securities, and loans, net of net deferred loan costs and unearned income. Cash and cash equivalents increased $121.2 million, or 350.8% to $155.8 million at December 31, 2020 from $34.6 million at December 31, 2019. Available-for-sale debt securities increased $77.2 million, or 28.3%, to $350.0 million at December 31, 2020 from $272.8 million at December 31, 2019. Loans, net of net deferred loan costs and unearned income, grew $72.6 million, or 8.8%, to $901.1 million at December 31, 2020, from $828.5 million at December 31, 2019. The increase was largely due to the origination of PPP loans, of which $76.0 million, net of net deferred origination fees, were outstanding at December 31, 2020. Total deposits increased $285.7 million, or 28.5%, to $1.287 billion at December 31, 2020 from $1.002 billion at December 31, 2019. Interest-bearing deposits increased $193.7 million, or 23.6%, to $1.016 billion at December 31, 2020 from $822.2 million at December 31, 2019. Additionally, non-interest-bearing deposits increased $92.0 million, or 51.3%,  to $271.5 million at December 31, 2020 from $179.5 million at December 31, 2019. FNCB used some of the excess liquidity in 2020 to repay FHLB of Pittsburgh advances. Total borrowed funds decreased $46.9 million, or 82.0%, to $10.3 million at December 31, 2020 from $57.2 million at December 31, 2019. FNCB had no term or overnight borrowings through the FHLB of Pittsburgh outstanding as of December 31, 2020.

Total shareholders' equity increased $22.2 million, or 16.7%, to $155.9 million at December 31, 2020 from $133.6 million at December 31, 2019. Contributing to the increase in capital was 2020 net income of $15.3 million and a $10.8 million increase in accumulated other comprehensive income related primarily to appreciation in the fair value of FNCB's available-for-sale debt securities, net of deferred taxes. Partially offsetting these increases were dividends declared and paid in 2020 of $4.4 million. FNCB's tangible book value per share improved $1.08, or 16.3%, to $7.70 per share at December 31, 2020 from $6.62 per share at December 31, 2019. FNCB Bank's total risk-based capital and Tier I leverage ratios were 15.79% and 9.57%, respectively, at December 31, 2020 compared to 14.77% and 10.36%, respectively, at December 31, 2019. 

Availability of Filings

Copies of FNCB's most recent Annual Report on Form 10-K and Quarterly Reports on form 10-Q will be provided upon request from: Shareholder Relations, FNCB Bancorp, Inc., 102 East Drinker Street, Dunmore, PA 18512 or by calling (570) 348-6419. FNCB's SEC filings including its Annual Report on Form 10-K and Quarterly Reports on Form 10-Q are also available free of charge on the Investor Relations page of FNCB's website, www.fncb.com, and on the SEC website at: http://www.sec.gov/edgar/searchedgar/companysearch.html

About FNCB Bancorp, Inc.:
FNCB Bancorp, Inc. is the bank holding company of FNCB Bank. Locally-based for over 110 years, FNCB Bank continues as a premier community bank in Northeastern Pennsylvania – offering a full suite of personal, small business and commercial banking solutions with industry-leading mobile, online and in-branch products and services. FNCB currently operates through 17 community offices located in Lackawanna, Luzerne and Wayne Counties, and remains dedicated to making its customers' banking experience simply better. For more information about FNCB, visit www.fncb.com.

INVESTOR CONTACT:
James M. Bone, Jr., CPA
Executive Vice President and Chief Financial Officer               
FNCB Bank
(570) 348-6419
james.bone@fncb.com

Forward-looking Statements

FNCB may from time to time make written or oral "forward-looking statements," including statements contained in our filings with the Securities and Exchange Commission ("SEC"), in our reports to shareholders, and in our other communications, which are made in good faith by us pursuant to the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995.

These forward-looking statements include statements with respect to FNCB's beliefs, plans, objectives, goals, expectations, anticipations, estimates and intentions, that are subject to significant risks and uncertainties, and are subject to change based on various factors (some of which are beyond our control). The words "may," "could," "should," "will," "would," "believe," "anticipate," "estimate," "expect," "intend," "plan," "project," "future" and similar expressions are intended to identify forward-looking statements. The following factors, among others, could cause FNCB's financial performance to differ materially from the plans, objectives, expectations, estimates and intentions expressed in such forward-looking statements: the effect of the coronavirus ("COVID-19") pandemic on FNCB and its customers, the Commonwealth of Pennsylvania and the United States, related to the economy and overall financial stability; government and regulatory responses to the COVID-19 pandemic; government intervention in the U.S. financial system including the effects of recent legislative, tax, accounting and regulatory actions and reforms, including, but not limited to, the Coronavirus Aid, Relief, and Economic Security Act (the "CARES Act"), the Dodd-Frank Wall Street Reform and Consumer Protection Act (the "Dodd-Frank Act") and the Tax Cuts and Jobs Act; political instability; the ability of FNCB to manage credit risk; weakness in the economic environment, in general, and within FNCB's market area; the deterioration of one or a few of the commercial real estate loans with relatively large balances contained in FNCB's loan portfolio; greater risk of loan defaults and losses from concentration of loans held by FNCB, including those to insiders and related parties; if FNCB's portfolio of loans to small and mid-sized community-based businesses increases its credit risk; if FNCB's ALLL is not sufficient to absorb actual losses or if increases to the ALLL were required; FNCB is subject to interest-rate risk and any changes in interest rates could negatively impact net interest income or the fair value of FNCB's financial assets; if management concludes that the decline in value of any of FNCB's investment securities is other-than-temporary could result in FNCB recording an impairment loss; if FNCB's risk management framework is ineffective in mitigating risks or losses to FNCB; if FNCB is unable to successfully compete with others for business; a loss of depositor confidence resulting from changes in either FNCB's financial condition or in the general banking industry; if FNCB is unable to retain or grow its core deposit base; inability or insufficient dividends from its subsidiary, FNCB Bank; if FNCB loses access to wholesale funding sources; interruptions or security breaches of FNCB's information systems; any systems failures or interruptions in information technology and telecommunications systems of third parties on which FNCB depends; security breaches; if FNCB's information technology is unable to keep pace with growth or industry developments or if technological developments result in higher costs or less advantageous pricing; the loss of management and other key personnel; dependence on the use of data and modeling in both its management's decision-making generally and in meeting regulatory expectations in particular; additional risk arising from new lines of business, products, product enhancements or services offered by FNCB; inaccuracy of appraisals and other valuation techniques FNCB uses in evaluating and monitoring loans secured by real property and other real estate owned; unsoundness of other financial institutions; damage to FNCB's reputation; defending litigation and other actions; dependence on the accuracy and completeness of information about customers and counterparties; risks arising from future expansion or acquisition activity; environmental risks and associated costs on its foreclosed real estate assets; any remediation ordered, or adverse actions taken, by federal and state regulators, including requiring FNCB  to act as a source of financial and managerial strength for the FNCB Bank in times of stress;  costs arising from extensive government regulation, supervision and possible regulatory enforcement actions; new or changed legislation or regulation and regulatory initiatives; noncompliance and enforcement action with the Bank Secrecy Act and other anti-money laundering statutes and regulations; failure to comply with numerous "fair and responsible banking" laws; any violation of laws regarding privacy, information security and protection of personal information or another incident involving personal, confidential or proprietary information of individuals; any rulemaking changes implemented by the Consumer Financial Protection Bureau; inability to attract and retain its highest performing employees due to potential limitations on incentive compensation contained in proposed federal agency rulemaking; any future increases in FNCB Bank's FDIC deposit insurance premiums and assessments; and the success of FNCB at managing the risks involved in the foregoing and other risks and uncertainties, including those detailed in FNCB's filings with the SEC.

FNCB cautions that the foregoing list of important factors is not all inclusive. Readers are also cautioned not to place undue reliance on any forward-looking statements, which reflect management's analysis only as of the date of this press release, even if subsequently made available by FNCB on its website or otherwise. FNCB does not undertake to update any forward-looking statement, whether written or oral, that may be made from time to time by or on behalf of FNCB to reflect events or circumstances occurring after the date of this press release.

Readers should carefully review the risk factors described in the Annual Report and other documents that FNCB periodically files with the SEC, including its Form 10-K for the year ended December 31, 2019 and Form 10-Q for the quarters ended March 31, 2020, June 30, 2020 and September 30, 2020.

                               
FNCB Bancorp, Inc.
Selected Financial Data
                               
    Dec 31,     Sept 30,     Jun 30,     Mar 31,     Dec 31,  
    2020     2020     2020     2020     2019  
Per share data:                                        
Net income (fully diluted)   $ 0.26     $ 0.20     $ 0.20     $ 0.10     $ 0.17  
Cash dividends declared   $ 0.055     $ 0.055     $ 0.055     $ 0.055     $ 0.050  
Book value   $ 7.70     $ 7.41     $ 7.19     $ 6.84     $ 6.62  
Tangible book value   $ 7.70     $ 7.41     $ 7.19     $ 6.84     $ 6.62  
Market value:                                        
High   $ 7.95     $ 6.93     $ 7.19     $ 8.54     $ 8.86  
Low   $ 5.16     $ 5.08     $ 5.15     $ 5.10     $ 7.03  
Close   $ 6.40     $ 5.32     $ 5.75     $ 6.91     $ 8.45  
Common shares outstanding     20,245,649       20,243,589       20,208,607       20,174,250       20,171,408  
                                         
Selected ratios:                                        
Annualized return on average assets     1.41 %     1.15 %     1.21 %     0.69 %     1.15 %
Annualized return on average shareholders' equity     13.49 %     11.05 %     11.62 %     6.06 %     10.43 %
Efficiency ratio     54.89 %     66.66 %     56.53 %     66.46 %     67.35 %
Tier I leverage ratio (FNCB Bank)     9.57 %     10.17 %     10.60 %     11.09 %     10.36 %
Total risk-based capital to risk-adjusted assets (FNCB Bank)     15.79 %     16.09 %     15.68 %     15.44 %     14.77 %
Average shareholders' equity to average total assets     10.42 %     10.40 %     10.38 %     11.37 %     11.01 %
Yield on earning assets (FTE)     4.05 %     3.65 %     3.70 %     4.06 %     4.19 %
Cost of funds     0.44 %     0.59 %     0.69 %     0.89 %     0.98 %
Net interest spread (FTE)     3.61 %     3.06 %     3.01 %     3.17 %     3.21 %
Net interest margin (FTE)     3.70 %     3.19 %     3.18 %     3.35 %     3.41 %
Total delinquent loans/total loans     0.99 %     0.81 %     0.89 %     1.41 %     1.46 %
Allowance for loan and lease losses/total loans     1.33 %     1.28 %     1.16 %     1.19 %     1.08 %
Non-performing loans/total loans     0.62 %     0.64 %     0.71 %     1.03 %     1.10 %
Annualized net charge-offs (recoveries)/average loans     0.09 %     (0.49 %)     (0.12 %)     0.09 %     0.16 %
                                         


FNCB Bancorp, Inc.
Year-to-Date Consolidated Statements of Income
       
    Year Ended  
    December 31,  
(in thousands, except share data)   2020     2019  
Interest income                
Interest and fees on loans   $ 37,615     $ 37,818  
Interest and dividends on securities:                
U.S. government agencies     2,336       3,545  
State and political subdivisions, tax-free     1,373       149  
State and political subdivisions, taxable     3,025       3,263  
Other securities     1,961       1,093  
Total interest and dividends on securities     8,695       8,050  
Interest on interest-bearing deposits in other banks     28       188  
Total interest income     46,338       46,056  
Interest expense                
Interest on deposits     5,404       8,101  
Interest on borrowed funds:                
Federal Reserve Bank Discount Window advances     32       -  
Federal Home Loan Bank of Pittsburgh advances     474       1,241  
Subordinated debentures     -       24  
Junior subordinated debentures     250       430  
Total interest on borrowed funds     756       1,695  
Total interest expense     6,160       9,796  
Net interest income before provision for loan and lease losses     40,178       36,260  
Provision for loan and lease losses     1,941       797  
Net interest income after provision for loan and lease losses     38,237       35,463  
Non-interest income                
Deposit service charges     3,252       3,035  
Net gain on the sale of available-for-sale securities     1,528       1,227  
Net gain on equity securities     1,171       29  
Net gain on the sale of mortgage loans held for sale     653       253  
Net gain on the sale of other real estate owned     -       20  
Loan-related fees     348       378  
Income from bank-owned life insurance     482       520  
Loan referral fees/Interest rate swap revenue     390       703  
Merchant services revenue     565       536  
Other     861       919  
Total non-interest income     9,250       7,620  
Non-interest expense                
Salaries and employee benefits     15,246       15,518  
Occupancy expense     2,052       1,948  
Equipment expense     1,477       1,319  
Data processing expense     2,933       3,113  
Bank shares tax     786       566  
Professional fees     999       1,056  
Other operating expenses     5,422       6,162  
Total non-interest expense     28,915       29,682  
Income before income taxes     18,572       13,401  
Income tax expense     3,225       2,326  
Net income   $ 15,347     $ 11,075  
                 
Income per share                
Basic   $ 0.76     $ 0.56  
Diluted   $ 0.76     $ 0.56  
                 
Cash dividends declared per common share   $ 0.22     $ 0.20  
Weighted average number of shares outstanding:                
Basic     20,210,439       19,802,095  
Diluted     20,212,187       19,807,592  
                 


FNCB Bancorp, Inc.
Quarter-to-Date Consolidated Statements of Income
       
    Three Months Ended  
    Dec 31,     Sept 30,     Jun 30,     Mar 31,     Dec 31,  
(in thousands, except share data)   2020     2020     2020     2020     2019  
Interest income                                        
Interest and fees on loans   $ 10,338     $ 9,078     $ 9,060     $ 9,139     $ 9,505  
Interest and dividends on securities:                                        
U.S. government agencies     503       494       589       750       822  
State and political subdivisions, tax-free     465       463       388       57       37  
State and political subdivisions, taxable     784       741       735       765       718  
Other securities     609       525       415       412       364  
Total interest and dividends on securities     2,361       2,223       2,127       1,984       1,941  
Interest on interest-bearing deposits in other banks     3       1       3       21       33  
Total interest income     12,702       11,302       11,190       11,144       11,479  
Interest expense                                        
Interest on deposits     1,077       1,291       1,376       1,660       1,818  
Interest on borrowed funds:                                        
Federal Reserve Bank Discount Window advances     -       18       14       -       -  
Federal Home Loan Bank of Pittsburgh advances     -       95       160       219       253  
Junior subordinated debentures     50       52       60       88       99  
Total interest on borrowed funds     50       165       234       307       352  
Total interest expense     1,127       1,456       1,610       1,967       2,170  
Net interest income before (credit) provision for loan and lease losses     11,575       9,846       9,580       9,177       9,309  
(Credit) Provision for loan and lease losses     (115 )     74       831       1,151       (33 )
Net interest income after (credit) provision for loan and lease losses     11,690       9,772       8,749       8,026       9,342  
Non-interest income                                        
Deposit service charges     875       844       708       825       832  
Net gain on the sale of available-for-sale securities     24       433       922       149       525  
Net gain (loss) on equity securities     307       846       4       14       (2 )
Net gain on the sale of mortgage loans held for sale     188       186       183       96       55  
Loan-related fees     148       119       25       56       147  
Income from bank-owned life insurance     116       118       119       129       126  
Loan referral fees/Interest rate swap revenue     52       76       214       48       681  
Merchant services revenue     164       154       112       135       145  
Other     211       194       214       242       187  
Total non-interest income     2,085       2,970       2,501       1,694       2,696  
Non-interest expense                                        
Salaries and employee benefits     3,984       3,835       3,498       3,929       3,884  
Occupancy expense     532       500       466       554       494  
Equipment expense     365       381       360       371       351  
Data processing expense     745       754       709       725       801  
Bank shares tax     (92 )     263       315       300       (194 )
Professional fees     339       279       193       188       332  
Other operating expenses     1,570       1,831       883       1,138       2,097  
Total non-interest expense     7,443       7,843       6,424       7,205       7,806  
Income before income taxes     6,332       4,899       4,826       2,515       4,232  
Income tax expense     1,176       792       805       452       744  
Net income   $ 5,156     $ 4,107     $ 4,021     $ 2,063     $ 3,488  
                                         
Income per share                                        
Basic   $ 0.26     $ 0.20     $ 0.20     $ 0.10     $ 0.17  
Diluted   $ 0.26     $ 0.20     $ 0.20     $ 0.10     $ 0.17  
                                         
Cash dividends declared per common share   $ 0.055     $ 0.055     $ 0.055     $ 0.055     $ 0.050  
Weighted average number of shares outstanding:                                        
Basic     20,241,730       20,235,384       20,191,527       20,172,498       20,170,241  
Diluted     20,244,652       20,235,384       20,191,527       20,176,565       20,175,758  
                                         


FNCB Bancorp, Inc.
Consolidated Balance Sheets
                               
    Dec 31,     Sept 30,     Jun 30,     Mar 31,     Dec 31,  
(in thousands)   2020     2020     2020     2020     2019  
Assets                                        
Cash and cash equivalents:                                        
Cash and due from banks   $ 24,822     $ 26,121     $ 20,089     $ 15,243     $ 22,861  
Interest-bearing deposits in other banks     130,989       78,895       81,390       30,304       11,704  
Total cash and cash equivalents     155,811       105,016       101,479       45,547       34,565  
Available-for-sale debt securities, at fair value     350,035       321,399       305,611       302,638       272,839  
Equity securities, at fair value     3,026       2,719       938       934       920  
Restricted stock, at cost     1,745       1,791       3,309       4,224       3,804  
Loans held for sale     2,107       662       765       470       1,061  
Loans, net of net deferred costs and unearned income     901,102       960,229       948,428       834,935       828,479  
Allowance for loan and lease losses     (11,950 )     (12,269 )     (11,024 )     (9,907 )     (8,950 )
Net loans     889,152       947,960       937,404       825,028       819,529  
Bank premises and equipment, net     17,579       17,413       17,467       17,447       17,518  
Accrued interest receivable     4,286       4,693       5,201       3,387       3,234  
Bank-owned life insurance     31,712       31,596       31,478       31,359       31,230  
Other assets     10,226       9,942       14,519       17,198       18,841  
Total assets   $ 1,465,679     $ 1,443,191     $ 1,418,171     $ 1,248,232     $ 1,203,541  
                                         
Liabilities                                        
Deposits:                                        
Demand (non-interest-bearing)   $ 271,499     $ 274,110     $ 266,846     $ 181,223     $ 179,465  
Interest-bearing     1,015,949       998,128       902,781       820,339       822,244  
Total deposits     1,287,448       1,272,238       1,169,627       1,001,562       1,001,709  
Borrowed funds:                                        
Federal Reserve Bank Discount Window advances     -       -       36,242       10,000       -  
Federal Home Loan Bank of Pittsburgh advances     -       -       42,809       77,934       46,909  
Junior subordinated debentures     10,310       10,310       10,310       10,310       10,310  
Total borrowed funds     10,310       10,310       89,361       98,244       57,219  
Accrued interest payable     108       139       248       261       258  
Other liabilities     11,953       10,458       13,578       10,233       10,748  
Total liabilities     1,309,819       1,293,145       1,272,814       1,110,300       1,069,934  
                                         
Shareholders' equity                                        
Preferred stock     -       -       -       -       -  
Common stock     25,307       25,304       25,260       25,217       25,214  
Additional paid-in capital     81,587       81,500       81,261       81,209       81,130  
Retained earnings     35,080       31,044       28,057       25,155       24,207  
Accumulated other comprehensive income     13,886       12,198       10,779       6,351       3,056  
Total shareholders' equity     155,860       150,046       145,357       137,932       133,607  
Total liabilities and shareholders' equity   $ 1,465,679     $ 1,443,191     $ 1,418,171     $ 1,248,232     $ 1,203,541  
                                         


FNCB Bancorp, Inc.
Summary Tax-equivalent Net Interest Income
       
    Three Months Ended  
    Dec 31,     Sept 30,     Jun 30,     Mar 31,     Dec 31,  
(dollars in thousands)   2020     2020     2020     2020     2019  
Interest income                                        
Loans:                                        
Loans - taxable   $ 9,938     $ 8,688     $ 8,661     $ 8,693     $ 9,138  
Loans - tax-free     506       494       505       565       464  
Total loans     10,444       9,182       9,166       9,258       9,602  
Securities:                                        
Securities, taxable     1,896       1,760       1,739       1,927       1,904  
Securities, tax-free     589       586       491       72       47  
Total interest and dividends on securities     2,485       2,346       2,230       1,999       1,951  
Interest-bearing deposits in other banks     3       1       3       21       33  
Total interest income     12,932       11,529       11,399       11,278       11,586  
Interest expense                                        
Deposits     1,077       1,291       1,376       1,660       1,818  
Borrowed funds     50       165       234       307       352  
Total interest expense     1,127       1,456       1,610       1,967       2,170  
Net interest income   $ 11,805     $ 10,073     $ 9,789     $ 9,311     $ 9,416  
                                         
Average balances                                        
Earning assets:                                        
Loans:                                        
Loans - taxable   $ 889,964     $ 908,095     $ 875,119     $ 780,855     $ 791,577  
Loans - tax-free     46,444       44,826       46,836       52,615       42,954  
Total loans     936,408       952,921       921,955       833,470       834,531  
Securities:                                        
Securities, taxable     255,111       232,081       247,939       263,697       258,790  
Securities, tax-free     71,154       69,973       56,220       7,698       4,598  
Total securities     326,265       302,054       304,159       271,395       263,388  
Interest-bearing deposits in other banks (a)     14,808       8,286       6,439       7,230       7,713  
Total interest-earning assets (a)     1,277,481       1,263,261       1,232,553       1,112,095       1,105,632  
Non-earning assets (a)     181,708       159,037       108,608       91,553       99,373  
Total assets   $ 1,459,189     $ 1,422,298     $ 1,341,161     $ 1,203,648     $ 1,205,005  
Interest-bearing liabilities:                                        
Deposits   $ 1,016,916     $ 943,754     $ 850,525     $ 821,216     $ 830,318  
Borrowed funds     10,310       51,629       81,813       61,843       57,682  
Total interest-bearing liabilities     1,027,226       995,383       932,338       883,059       888,000  
Demand deposits     268,531       267,636       258,609       172,132       172,935  
Other liabilities     11,377       11,384       11,065       11,636       11,361  
Shareholders' equity     152,055       147,895       139,149       136,821       132,709  
Total liabilities and shareholders' equity   $ 1,459,189     $ 1,422,298     $ 1,341,161     $ 1,203,648     $ 1,205,005  
                                         
Yield/Cost                                        
Earning assets:                                        
Loans:                                        
Interest and fees on loans - taxable     4.47 %     3.83 %     3.96 %     4.45 %     4.62 %
Interest and fees on loans - tax-free     4.36 %     4.41 %     4.31 %     4.30 %     4.32 %
Total loans     4.46 %     3.85 %     3.98 %     4.44 %     4.60 %
Securities:                                        
Securities, taxable     2.97 %     3.03 %     2.81 %     2.92 %     2.94 %
Securities, tax-free     3.31 %     3.35 %     3.49 %     3.74 %     4.09 %
Total securities     3.05 %     3.11 %     2.93 %     2.95 %     2.96 %
Interest-bearing deposits in other banks (a)     0.08 %     0.05 %     0.19 %     1.16 %     1.71 %
Total earning assets (a)     4.05 %     3.65 %     3.70 %     4.06 %     4.19 %
Interest-bearing liabilities:                                        
Interest on deposits     0.42 %     0.55 %     0.65 %     0.81 %     0.88 %
Interest on borrowed funds     1.94 %     1.28 %     1.14 %     1.99 %     2.44 %
Total interest-bearing liabilities     0.44 %     0.59 %     0.69 %     0.89 %     0.98 %
Net interest spread (a)     3.61 %     3.06 %     3.01 %     3.17 %     3.21 %
Net interest margin (a)     3.70 %     3.19 %     3.18 %     3.35 %     3.41 %
                                         
(a) Reflects revisions to average balances for the three months ended September 30, 2020, June 30, 2020, March 31, 2020 and December 31, 2019 to reclassify certain average deposits in other banks from interest-bearing deposits in other banks to non-earning assets in the amount of $62,315, $21,419, $1,166 and $9,128, respectively.  
   


FNCB Bancorp, Inc.
Asset Quality Data
                               
    Dec 31,     Sept 30,     Jun 30,     Mar 31,     Dec 31,  
(in thousands)   2020     2020     2020     2020     2019  
At period end                                        
Non-accrual loans, including non-accruing troubled debt restructured loans (TDRs)   $ 5,581     $ 6,176     $ 6,740     $ 8,576     $ 9,084  
Loans past due 90 days or more and still accruing     -       -       -       -       -  
Total non-performing loans     5,581       6,176       6,740       8,576       9,084  
Other real estate owned (OREO)     58       58       85       85       289  
Other non-performing assets     1,900       1,900       1,900       1,900       1,900  
Total non-performing assets   $ 7,539     $ 8,134     $ 8,725     $ 10,561     $ 11,273  
                                         
Accruing TDRs   $ 6,975     $ 7,216     $ 8,592     $ 7,729     $ 7,745  
                                         
                                         
For the three months ended                                        
Allowance for loan and lease losses                                        
Beginning balance   $ 12,269     $ 11,024     $ 9,907     $ 8,950     $ 9,315  
Loans charged-off     338       582       316       329       620  
Recoveries of charged-off loans     134       1,753       602       135       288  
Net charge-offs (recoveries)     204       (1,171 )     (286 )     194       332  
(Credit) Provision for loan and lease losses     (115 )     74       831       1,151       (33 )
Ending balance   $ 11,950     $ 12,269     $ 11,024     $ 9,907     $ 8,950  
                                         


FNCB Bancorp, Inc.
Non-GAAP Reconciliations
                               
    Dec 31,     Sept 30,     Jun 30,     Mar 31,     Dec 31,  
(dollars in thousands)   2020     2020     2020     2020     2019  
Annualized net interest margin:                                        
Net interest margin (1 divided by 3)     3.70 %     3.19 %     3.18 %     3.35 %     3.41 %
Net interest margin, excluding PPP loans (non-GAAP) (2 divided by 4)     3.49 %     3.40 %     3.34 %     3.35 %     3.41 %
                                         
Net interest income (FTE) (1)   $ 11,805     $ 10,073     $ 9,789     $ 9,311     $ 9,416  
PPP loan interest and fee income     1,485       298       223       -       -  
Net interest income (FTE), excluding PPP loans (non-GAAP) (2)   $ 10,320     $ 9,775     $ 9,566     $ 9,311     $ 9,416  
                                         
Average earning assets (3)(a)   $ 1,277,481     $ 1,263,261     $ 1,232,553     $ 1,112,095     $ 1,105,632  
Average PPP loans     95,837       114,395       86,241       -       -  
Average earning assets, excluding PPP loans (non-GAAP) (4)   $ 1,181,644     $ 1,148,866     $ 1,146,312     $ 1,112,095     $ 1,105,632  
                                         
Allowance for loan and lease losses/total period end loans                                        
Allowance for loans and lease losses/total period end loans (5 divided by 6)     1.33 %     1.28 %     1.16 %     1.19 %     1.08 %
Allowance for loans and lease losses/total period end loans, excluding PPP loans (5 divided by 7)     1.45 %     1.45 %     1.32 %     1.19 %     1.08 %
                                         
Allowance for loans and lease losses (5)   $ 11,950     $ 12,269     $ 11,024     $ 9,907     $ 8,950  
                                         
Total period end loans (6)   $ 901,102     $ 960,229     $ 948,428     $ 834,935     $ 828,479  
PPP loans outstanding at period end     76,004       114,784       113,193       -       -  
Total period end loans, excluding PPP loans (7)   $ 825,098     $ 845,445     $ 835,235     $ 834,935     $ 828,479  
                                         
(a) Reflects revisions to average balances for the three months ended September 30, 2020, June 30, 2020, March 31, 2020 and December 31, 2019 to reclassify certain average deposits in other banks from interest-bearing deposits in other banks to non-earning assets in the amount of $62,315, $21,419, $1,166 and $9,128, respectively.  


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