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

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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