INVESTOR RELATIONS

 

FNCB Bancorp, Inc. Announces 58% Increase in Second Quarter 2020 Net Income

Company Release - 7/20/2020 5:25 PM ET

DUNMORE, Pa., July 20, 2020 (GLOBE NEWSWIRE) -- FNCB Bancorp, Inc. (NASDAQ: FNCB; www.fncb.com), the parent company of Dunmore-based FNCB Bank (the “Bank”), today reported net income of $4.0 million, or $0.20 per basic and diluted share, for the three months ended June 30, 2020, an increase of $1.5 million, or 57.7% from $2.5 million, or $0.13 per basic and diluted share, for the comparable period of 2019.  Net income for the six months ended June 30, 2020 totaled $6.1 million, or $0.30 per basic and diluted share, an increase of $0.9 million, or 17.4%, compared to $5.2 million, or $0.27 per basic and diluted share, for the same six months of 2019. The increase in second quarter and year-to-date 2020 earnings reflected increases in net interest income and non-interest income, coupled with a decrease in non-interest expense. Partially offsetting these positive factors was an increase in the provision for loan and lease losses. Additionally, the results for the second quarter and year-to-date periods of 2020 include the effect of $117.0 million in loans originated through the Paycheck Protection Program (“PPP”) of United States Small Business Administration (“SBA”), as well as COVID-19 related expenses of $183 thousand.

For the three and six months ended June 30, 2020, the annualized return on average assets was 1.21% and 0.96%, respectively, compared to 0.85% and 0.86%, respectively, for the same periods of 2019. The annualized return on average equity was 11.62% and 8.87%, respectively, for the three- and six-month periods ended June 30, 2020, and 8.19% and 8.89%, respectively, for the comparable periods of 2019. Dividend declared and paid were $0.055 per share for the second quarter and $0.11 per share for the year-to-date period of 2020, a 10.0% increase compared to $0.05 per share and $0.10 per share, respectively, for the three and six months ended June 30, 2019. The dividend pay-out ratio was 36.5% for the six months ended June 30, 2020 and 38.8% for the comparable period of 2019. Year-to-date 2020 dividends equated to an annualized dividend yield of approximately 3.8% based on the closing stock price of $5.75 per share at June 30, 2020.

Second quarter 2020 results as compared to the second quarter of 2019:

 Net interest income (FTE) increased $0.7 million, or 8.1%;
 Yield on earnings assets (FTE) decreased 51 basis points to 3.64% in 2020 from 4.15% in 2019;
 Cost of funds decreased 42 basis points to 0.69% in 2020 from 1.11% in 2019; 
 Net interest margin (FTE) contracted 13 basis points to 3.12% in 2020, compared to 3.25% in 2019;
 Provision for loan and lease losses increased $0.5 million, or 139.5%;
 Non-interest income increased $0.9 million, or 58.5%;
 Non-interest expense decreased $0.7 million, or 9.8%; and
 Efficiency ratio improved to 56.53% in 2020 compared to 68.12% in 2019.

Summary financial position at June 30, 2020 as compared to December 31, 2019:

 Total assets grew $214.6 million, or 17.8%, to $1.418 billion at June 30, 2020 from $1.204 billion at December 31, 2019;
 Net loans increased $117.9 million, or 14.4%, to $937.4 million at June 30, 2020 from $819.5 million at December 31, 2019;
 Included in net loans were PPP loans outstanding of $117.0 million at June 30, 2020;
 Total deposits increased $167.9 million, or 16.8% to $1.170 billion at June 30, 2020 from $1.002 billion at December 31, 2019;
 Total capital increased $11.8 million, or 8.8% to $145.4 million at June 30, 2020 from $133.6 million at December 31, 2019; and
 Tangible book value improved $0.57, or 8.6%, to $7.19 per share at June 30, 2020 from $6.62 per share at December 31, 2019. 

“We are extremely pleased with the results achieved by our Company for the second quarter of 2020,” stated Gerard A. Champi, President and Chief Executive Officer. “The solid performance reflects the underlying strength of our franchise and the hard work and dedication of the entire FNCB team. As essential employees, I am extremely proud of the effort put forth by our employees in assisting our customers and communities in navigating through the many challenges presented by the COVID-19 pandemic in a safe and sound manner. Our team worked around the clock to ensure our small business customers gained access to the resources available to be able to continue their livelihoods. On an additional note, I am pleased to announce that FNCB Bank is one of eleven lenders within the Commonwealth of Pennsylvania participating in the Federal Reserve Board’s Main Street Lending Program. Participating in this important program is just another example of our commitment to assisting local businesses within our communities maintain their operations during this uncertain time. With the economy slowly beginning to re-open, all of our community offices are now open and we remain committed to delivering exceptional service while taking into consideration the safety of our customers and employees by requiring the wearing of masks and adhering to social distancing guidelines. However, we are keenly aware that circumstances surrounding the pandemic are evolving. We are closely monitoring the situation and are ready to adjust our operations as necessary to protect our customers and employees,” concluded Champi.

Summary Results 

For the three months ended June 30, 2020, tax-equivalent net interest income increased $0.7 million, or 8.1% to $9.8 million from $9.1 million for the same three months of 2019. The second quarter increase was largely due to a $0.9 million, or 35.8%, decrease in interest expense, which primarily reflected a 42 basis point decrease in the cost of funds to 0.69% for the second quarter of 2020 from 1.11% for the same quarter of 2019. The cost of interest-bearing deposits fell 36 basis points to 0.65% for the second quarter of 2020 from 1.01% for the comparable quarter of 2019, while average borrowing costs decreased 164 basis points to 1.14% from 2.78% comparing the second quarters of 2020 and 2019, respectively. Partially offsetting the reduction in interest expense was a $0.2 million, or 1.4%, decrease in tax-equivalent interest income, which was caused primarily by a 51 basis point decrease in the tax-equivalent yield on earning assets, partially mitigated by a $140.4 million, or 12.6%, increase in average earning assets. On a linked quarter basis, tax-equivalent net interest income increased $0.5 million, or 5.1% from $9.3 million for the first quarter of 2020, which was reflective of a $0.4 million decline in interest expense, coupled with a $0.1 million increase in tax-equivalent interest income. The tax-equivalent net interest margin fell 13 basis points to 3.12% from 3.25% comparing the second quarters of 2020 and 2019, and 23 basis points from 3.35% for the first quarter of 2020. The margin decline was impacted by the origination of PPP loans, which averaged $88.0 million at an average yield of 0.99% for the second quarter of 2020.

For the six months ended June 30, 2020, tax-equivalent net interest income increased $1.0 million, or 5.3% to $19.1 million, from $18.1 million for the same six months of 2019. The increase in year-to-date tax-equivalent net interest income primarily reflected a $1.6 million, or 30.8%, reduction in interest expense caused by a decrease in funding costs, coupled with lower average balances of interest-bearing liabilities. Due to lower market interest rates, FNCB’s cost of funds for the six months ended June 30, decreased 32 basis points to 0.79% in 2020 from 1.11% in 2019. Additionally, average interest-bearing liabilities decreased $25.1 million, or 2.7%, comparing the year-to-date periods of 2020 and 2019. Partially offsetting the reduction in interest expense was a $0.6 million, or 2.7%, decrease in tax-equivalent interest income to $22.7 million for the six months ended June 30, 2020 from $23.3 million for the comparable six-month period of 2019. The tax-equivalent yield on loans decreased 38 basis points to 4.20% for the six months ended June 30, 2020 from 4.58% for the same six months of 2019. Partially mitigating the reduction in loan yields was a $46.0 million, or 5.5%, increase in average loan balances to $877.7 million from $831.7 million comparing the year-to-date periods of 2020 and 2019, respectively. On a year-to-date basis, the tax-equivalent net interest margin improved 4 basis points to 3.23% in 2020 compared to 3.19% in 2019. PPP loans averaged $44.9 million for the six months ended June 30, 2020, with an average yield of 0.99%.  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 the three and six months ended June 30, 2020 and 2019.

For the second quarter, non-interest income increased  $923 thousand to $2.5 million in 2020 compared to $1.6 million in 2019. The 58.5% increase was primarily due to higher net gains on the sale of available-for-sale securities, coupled with increases in loan referral fees and net gains on the sale of mortgage loans held for sale. FNCB realized net gains on the sale of available-for-sale debt securities of $922 thousand  for the second quarter of 2020, an increase of $759 thousand, or 466.6%, compared to $163 thousand for the same quarter of 2019. Loan referral fees, which include commissions received from a correspondent bank related to an off-balance sheet commercial interest-rate hedge program and the referral of FHA residential mortgage loans to a third-party broker, increased $208 thousand, or 3466.7% to $214 thousand for the second quarter of 2020 from $6 thousand for the same quarter of 2019. Comparing the second quarters of 2020 and 2019, net gains on the sale of residential mortgage loans held for sale increased $110 thousand, or 150.7%, to $183 thousand in 2020 compared to $73 thousand in 2019. For the six months ended June 30, 2020, non-interest income increased $1.1 million, or 35.6%, to $4.2 million from $3.1 million for the same period of 2019. Similarly, the increase in non-interest income for the year-to-date period was due to increases in net gains on the sale of available-for-sale securities, loan referral fees and net gains on the sale of residential mortgage loans held for sale. Additionally, deposit service charges increased $127 thousand, or 9.0%, which reflected enhancements made to FNCB’s fee structure implemented in the fourth quarter of 2019. 

For the three months ended June 30, 2020, non-interest expense decreased by $698 thousand, or 9.8%, to $6.4 million from $7.1 million for the comparable three months of 2019. Non-interest expense for the six months ended June 30, 2020, decreased $918 thousand, or 6.3%, to $13.6 million from $14.5 million for the same six months of 2019. The decrease in the three- and six-month periods primarily reflected decreases in salaries and employee benefits, data processing costs and other operating expenses, which were partially offset by increases in occupancy and equipment expenses and bank shares tax. For the six months ended June 30, 2020, FNCB incurred COVID-19 related costs, including stay-at-home pay, computer-related equipment to enable employees to work remotely, cleaning and sanitizing facilities and safety supplies, totaling $183 thousand, which is included in non-interest expense. 

The increases in net interest income and non-interest income, coupled with the reduction in non-interest expense, resulted in an improvement in FNCB’s efficiency ratio year over year to 56.53% for the second quarter of 2020 from 68.12% for the same quarter of 2019.

Asset Quality

Total non-performing loans were $6.7 million, or 0.71% of total loans, at June 30, 2020, an increase of $1.4 million, or 27.1%, compared to $5.3 million, or 0.65% of total loans, at June 30, 2019. The year-over-year increase was due to several smaller-balance commercial credits that were placed on nonaccrual status. On a linked quarter basis, non-performing loans decreased $1.8 million, or 21.4%, from $8.6 million, or 1.03% of total loans, at March 31, 2020. The decrease in non-performing loans from the end of the previous quarter end primarily reflected the return of two large commercial loan relationships to accrual status. FNCB’s loan delinquency rate (total delinquent loans as a percentage of total loans)  was 0.89% at June 30, 2020 compared to 1.46% at December 31, 2019 and 0.99% at June 30, 2019. FNCB recorded net recoveries of $286 thousand during the second quarter of 2020 due to a substantial recovery received on a previously charged-off loan. Annualized net loans charged off (recovered), as a percentage of average loans, was (0.12%) for the three months ended June 30, 2020 compared to 0.32% for the second quarter of 2019. Despite receipt of the large recovery and the improvement in non-performing assets and delinquency rate, FNCB recorded a provision for loan and lease losses of $0.8 million for the second quarter of 2020, an increase of $0.5 million, or 139.5%, from $0.3 million for the second quarter of 2019. For the six months ended June 30, 2020, the provision for loan and lease losses was $2.0 million, an increase of $1.8 million, from $0.2 million for the same six months of 2019. The increase in credit provisioning in 2020 was primarily related to economic disruption and uncertainty caused by the COVID-19 pandemic. The allowance for loan and lease losses was $11.0 million, or 1.16% of total loans at June 30, 2020, compared to $8.9 million, or 1.08% of total loans at December 31, 2019 and $8.9 million, or 1.10%, at June 30, 2019. At June 30, 2020, FNCB provided short-term, COVID-19 related payment deferment for 905 loans with aggregate balance totaling $176.6 million, or 18.6%, of gross loans outstanding. Additionally, of the 905 loans, there were 12 loans with an aggregate balance of $7.0 million, or 0.7% of gross loans outstanding, that were provided a second short-term payment deferment as of June 30, 2020. All of the loans that were granted a payment deferment were current and in good standing at December 31, 2019. 

Financial Condition

Total assets increased $214.6 million, or 17.8%, to $1.418 billion at June 30, 2020 from $1.204 billion at December 31, 2019. The change in the balance sheet primarily reflected increases in net loans, available-for-sale debt securities and cash and cash equivalents. Net loans were $937.4 million at June 30, 2020, an increase of $117.9 million, or 14.4%, from $819.5 million at December 31, 2019. The increase in loans primarily reflected the origination and funding of PPP loans, of which $117.0 million were outstanding at June 30, 2020. Available-for-sale debt securities increased $32.8 million, or 12.0%, to $305.6 million at June 30, 2020 from $272.8 million at December 31, 2019. Cash and cash equivalents were $101.5 million at June 30, 2020, an increase of $66.9 million, or 193.6%, compared to $34.6 million at December 31, 2019. Total deposits increased $167.9 million, or 16.8%, to $1.170 billion at June 30, 2020 from $1.002 billion at December 31, 2019. Non-interest-bearing deposits increased $87.4 million, or 48.7%, while interest-bearing deposits rose $80.5 million, or 9.8%, comparing balances outstanding at June 30, 2020 and December 31, 2019. Total borrowed funds increased $32.2 million, or 56.2%, to $89.4 million at June 30, 2020 from $57.2 million at December 31, 2019. The increase was primarily the result of receipt of $36.2 million in funding through the Federal Reserve Bank Discount Window Paycheck Protection Program Liquidity Facility (PPPLF).  

Total shareholders’ equity increased $11.8 million, or 8.8%, to $145.4 million at June 30, 2020 from $133.6 million at December 31, 2019.  Factoring into the capital improvement was net income for the six months ended June 30, 2020 of $6.1 million and a $7.7 million positive change in accumulated other comprehensive income related primarily to appreciation in the fair value of available-for-sale debt securities, net of deferred taxes, partially offset by dividends declared of $2.2 million. FNCB's tangible book value improved $0.57, or 8.6%, to $7.19 per share at June 30, 2020 from $6.62 per share at December 31, 2019, and $0.75 per share, or 11.6%, year over year from $6.44 per share at June 30, 2019. FNCB Bank’s total risk-based capital and Tier I leverage ratios improved to 15.68% and 10.60%, respectively, at June 30, 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 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 a limited purpose office in Lehigh County, 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

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 report, 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 report.

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 quarter ended March 31, 2020.



FNCB Bancorp, Inc.
Selected Financial Data


  Jun 30,  Mar 31,  Dec 31,  Sept 30,  Jun 30, 
  2020  2020  2019  2019  2019 
Per share data:                    
Net income (fully diluted) $0.20  $0.10  $0.17  $0.12  $0.13 
Cash dividends declared $0.055  $0.055  $0.050  $0.050  $0.050 
Book value $7.19  $6.84  $6.62  $6.57  $6.44 
Tangible book value $7.19  $6.84  $6.62  $6.57  $6.44 
Market value:                    
High $7.19  $8.54  $8.86  $9.41  $8.12 
Low $5.15  $5.10  $7.03  $7.03  $7.16 
Close $5.75  $6.91  $8.45  $7.81  $7.74 
Common shares outstanding  20,208,607   20,174,250   20,171,408   20,169,492   20,148,017 
                     
Selected ratios:                    
Annualized return on average assets  1.21%  0.69%  1.15%  0.80%  0.85%
Annualized return on average shareholders' equity  11.62%  6.06%  10.43%  7.30%  8.19%
Efficiency ratio  56.53%  66.46%  67.35%  69.20%  68.12%
Tier I leverage ratio (FNCB Bank)  10.60%  11.09%  10.36%  11.01%  10.69%
Total risk-based capital to risk-adjusted assets (FNCB Bank)  15.68%  15.44%  14.77%  15.37%  15.25%
Average shareholders' equity to average total assets  10.38%  11.37%  11.01%  10.96%  10.41%
Yield on earning assets (FTE)  3.64%  4.05%  4.16%  4.22%  4.15%
Cost of funds  0.69%  0.89%  0.98%  1.11%  1.11%
Net interest spread (FTE)  2.95%  3.16%  3.18%  3.11%  3.04%
Net interest margin (FTE)  3.12%  3.35%  3.38%  3.32%  3.25%
Total delinquent loans/total loans  0.89%  1.41%  1.46%  1.16%  0.99%
Allowance for loan and lease losses/total loans  1.16%  1.19%  1.08%  1.11%  1.10%
Non-performing loans/total loans  0.71%  1.03%  1.10%  0.73%  0.65%
Annualized net charge-offs(recoveries)/average loans  (0.12%)  0.09%  0.16%  0.13%  0.32%



FNCB Bancorp, Inc.
Year-to-Date Consolidated Statements of Income


  Six Months Ended 
  June 30, 
(in thousands, except share data) 2020  2019 
Interest income        
Interest and fees on loans $18,199  $18,825 
Interest and dividends on securities        
U.S. government agencies  1,339   1,799 
State and political subdivisions, tax-free  445   75 
State and political subdivisions, taxable  1,500   1,832 
Other securities  827   415 
Total interest and dividends on securities  4,111   4,121 
Interest on interest-bearing deposits in other banks  24   125 
Total interest income  22,334   23,071 
Interest expense        
Interest on deposits  3,036   4,382 
Interest on borrowed funds        
Interest on Federal Reserve Bank discount window advances  14   - 
Interest on Federal Home Loan Bank of Pittsburgh advances  379   540 
Interest on subordinated debentures  -   24 
Interest on junior subordinated debentures  148   225 
Total interest on borrowed funds  541   789 
Total interest expense  3,577   5,171 
Net interest income before provision for loan and lease losses  18,757   17,900 
Provision for loan and lease losses  1,982   193 
Net interest income after provision for loan and lease losses  16,775   17,707 
Non-interest income        
Deposit service charges  1,533   1,406 
Net gain on the sale of securities  1,071   323 
Net gain on equity securities  18   26 
Net gain on the sale of mortgage loans held for sale  279   129 
Loan-related fees  81   151 
Income from bank-owned life insurance  248   260 
Merchant services revenue  247   249 
Loan referral fees  262   20 
Other  456   529 
Total non-interest income  4,195   3,093 
Non-interest expense        
Salaries and employee benefits  7,427   7,723 
Occupancy expense  1,020   994 
Equipment expense  731   636 
Data processing expense  1,434   1,570 
Regulatory assessments  133   244 
Bank shares tax  615   555 
Professional fees  381   535 
Other operating expenses  1,888   2,290 
Total non-interest expense  13,629   14,547 
Income before income taxes  7,341   6,253 
Income tax expense  1,257   1,069 
Net income $6,084  $5,184 
         
Income per share        
Basic $0.30  $0.27 
Diluted $0.30  $0.27 
         
Cash dividends declared per common share $0.110  $0.100 
Weighted average number of shares outstanding:        
Basic  20,182,012   19,428,717 
Diluted  20,184,046   19,435,076 



FNCB Bancorp, Inc.
Quarter-to-Date Consolidated Statements of Income


  Three Months Ended 
  Jun 30,  Mar 31,  Dec 31,  Sept 30,  Jun 30, 
(in thousands, except share data) 2020  2020  2019  2019  2019 
Interest income                    
Interest and fees on loans $9,060  $9,139  $9,505  $9,488  $9,418 
Interest and dividends on securities                    
U.S. government agencies  589   750   822   924   906 
State and political subdivisions, tax-free  388   57   37   37   38 
State and political subdivisions, taxable  735   765   718   713   811 
Other securities  415   412   364   314   210 
Total interest and dividends on securities  2,127   1,984   1,941   1,988   1,965 
Interest on interest-bearing deposits in other banks  3   21   33   30   79 
Total interest income  11,190   11,144   11,479   11,506   11,462 
Interest expense                    
Interest on deposits  1,376   1,660   1,818   1,901   2,144 
Interest on borrowed funds                    
Interest on Federal Reserve Bank discount window advances  14   -   -   -   - 
Interest on Federal Home Loan Bank of Pittsburgh advances  160   219   253   448   253 
Interest on junior subordinated debentures  60   88   99   106   111 
Total interest on borrowed funds  234   307   352   554   364 
Total interest expense  1,610   1,967   2,170   2,455   2,508 
Net interest income before provision (credit) for loan and lease losses  9,580   9,177   9,309   9,051   8,954 
Provision (credit) for loan and lease losses  831   1,151   (33)  637   347 
Net interest income after provision (credit) for loan and lease losses  8,749   8,026   9,342   8,414   8,607 
Non-interest income                    
Deposit service charges  708   825   832   797   721 
Net gain on the sale of securities  922   149   525   379   163 
Net gain (loss) on equity securities  4   14   (2)  5   14 
Net gain on the sale of mortgage loans held for sale  183   96   55   69   73 
Net gain on the sale of other real estate owned  -   -   -   11   9 
Loan-related fees  25   56   147   80   72 
Income from bank-owned life insurance  119   129   126   134   129 
Merchant services revenue  112   135   145   142   131 
Loan referral fees  214   48   681   54   6 
Other  214   242   187   160   260 
Total non-interest income  2,501   1,694   2,696   1,831   1,578 
Non-interest expense                    
Salaries and employee benefits  3,498   3,929   3,884   3,911   3,824 
Occupancy expense  466   554   494   460   444 
Equipment expense  360   371   351   332   329 
Data processing expense  709   725   801   742   789 
Regulatory assessments  74   59   41   21   76 
Bank shares tax  315   300   (194)  205   277 
Professional fees  193   188   332   189   203 
Other operating expenses  809   1,079   2,097   1,469   1,180 
Total non-interest expense  6,424   7,205   7,806   7,329   7,122 
Income before income taxes  4,826   2,515   4,232   2,916   3,063 
Income tax expense  805   452   744   513   514 
Net income $4,021  $2,063  $3,488  $2,403  $2,549 
                     
Income per share                    
Basic $0.20  $0.10  $0.17  $0.12  $0.13 
Diluted $0.20  $0.10  $0.17  $0.12  $0.13 
                     
Cash dividends declared per common share $0.055  $0.055  $0.050  $0.050  $0.050 
Weighted average number of shares outstanding:                    
Basic  20,191,527   20,172,498   20,170,241   20,168,529   20,129,150 
Diluted  20,191,527   20,176,565   20,175,758   20,172,282   20,133,850 



FNCB Bancorp, Inc.
Consolidated Balance Sheets


  Jun 30,  Mar 31,  Dec 31,  Sept 30,  Jun 30, 
(in thousands) 2020  2020  2019  2019  2019 
Assets                    
Cash and cash equivalents:                    
Cash and due from banks $20,089  $15,243  $22,861  $30,900  $24,277 
Interest-bearing deposits in other banks  81,390   30,304   11,704   6,611   5,627 
Total cash and cash equivalents  101,479   45,547   34,565   37,511   29,904 
Available-for-sale debt securities, at fair value  305,611   302,638   272,839   254,666   285,855 
Equity securities, at fair value  938   934   920   922   917 
Restricted stock, at cost  3,309   4,224   3,804   4,194   4,618 
Loans held for sale  765   470   1,061   1,140   419 
Loans, net of net deferred costs and unearned income  948,428   834,935   828,479   836,877   814,420 
Allowance for loan and lease losses  (11,024)  (9,907)  (8,950)  (9,315)  (8,945)
Net loans  937,404   825,028   819,529   827,562   805,475 
Bank premises and equipment, net  17,467   17,447   17,518   17,274   15,923 
Accrued interest receivable  5,201   3,387   3,234   3,038   3,640 
Bank-owned life insurance  31,478   31,359   31,230   31,104   31,275 
Other real estate owned  85   85   289   412   560 
Other assets  14,434   17,113   18,552   19,367   20,208 
Total assets $1,418,171  $1,248,232  $1,203,541  $1,197,190  $1,198,794 
                     
Liabilities                    
Deposits:                    
Demand (non-interest-bearing) $266,846  $181,223  $179,465  $179,025  $157,856 
Interest-bearing  902,781   820,339   822,244   785,035   803,208 
Total deposits  1,169,627   1,001,562   1,001,709   964,060   961,064 
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   79,458   87,223 
Junior subordinated debentures  10,310   10,310   10,310   10,310   10,310 
Total borrowed funds  89,361   98,244   57,219   89,768   97,533 
Accrued interest payable  248   261   258   401   389 
Other liabilities  13,578   10,233   10,748   10,394   10,102 
Total liabilities  1,272,814   1,110,300   1,069,934   1,064,623   1,069,088 
                     
Shareholders' equity                    
Preferred stock  -   -   -   -   - 
Common stock  25,260   25,217   25,214   25,211   25,184 
Additional paid-in capital  81,261   81,209   81,130   81,058   80,864 
Retained earnings  28,057   25,155   24,207   21,733   20,345 
Accumulated other comprehensive income  10,779   6,351   3,056   4,565   3,313 
Total shareholders' equity  145,357   137,932   133,607   132,567   129,706 
Total liabilities and shareholders’ equity $1,418,171  $1,248,232  $1,203,541  $1,197,190  $1,198,794 



FNCB Bancorp, Inc.
Summary Tax-equivalent Net Interest Income


  Three Months Ended 
  Jun 30,  Mar 31,  Dec 31,  Sept 30,  Jun 30, 
(dollars in thousands) 2020  2020  2019  2019  2019 
Interest income                    
Loans:                    
Loans - taxable $8,661  $8,693  $9,138  $9,170  $9,084 
Loans - tax-free  505   565   464   403   423 
Total loans  9,166   9,258   9,602   9,573   9,507 
Securities:                    
Securities, taxable  1,739   1,927   1,904   1,951   1,927 
Securities, tax-free  491   72   47   47   48 
Total interest and dividends on securities  2,230   1,999   1,951   1,998   1,975 
Interest-bearing deposits in other banks  3   21   33   30   79 
Total interest income  11,399   11,278   11,586   11,601   11,561 
Interest expense                    
Deposits  1,376   1,660   1,818   1,901   2,144 
Borrowed funds  234   307   352   554   364 
Total interest expense  1,610   1,967   2,170   2,455   2,508 
Net interest income $9,789  $9,311  $9,416  $9,146  $9,053 
                     
Average balances                    
Earning assets:                    
Loans:                    
Loans - taxable $875,119  $780,855  $791,577  $781,963  $778,540 
Loans - tax-free  46,836   52,615   42,954   37,638   41,436 
Total loans  921,955   833,470   834,531   819,601   819,976 
Securities:                    
Securities, taxable  247,939   263,697   258,790   266,653   274,552 
Securities, tax-free  56,220   7,698   4,598   4,611   4,624 
Total securities  304,159   271,395   263,388   271,264   279,176 
Interest-bearing deposits in other banks  27,858   8,396   16,841   10,007   14,420 
Total interest-earning assets  1,253,972   1,113,261   1,114,760   1,100,872   1,113,572 
Non-earning assets  87,189   90,387   90,245   90,807   85,429 
Total assets $1,341,161  $1,203,648  $1,205,005  $1,191,679  $1,199,001 
Interest-bearing liabilities:                    
Deposits $850,525  $821,216  $830,318  $794,971  $851,726 
Borrowed funds  81,813   61,843   57,682   85,927   52,313 
Total interest-bearing liabilities  932,338   883,059   888,000   880,898   904,039 
Demand deposits  258,609   172,132   172,935   169,416   158,413 
Other liabilities  11,065   11,636   11,361   10,730   11,698 
Shareholders' equity  139,149   136,821   132,709   130,635   124,851 
Total liabilities and shareholders' equity $1,341,161  $1,203,648  $1,205,005  $1,191,679  $1,199,001 
                     
Yield/Cost                    
Earning assets:                    
Loans:                    
Interest and fees on loans - taxable  3.96%  4.45%  4.62%  4.69%  4.67%
Interest and fees on loans - tax-free  4.31%  4.29%  4.32%  4.28%  4.08%
Total loans  3.98%  4.44%  4.60%  4.67%  4.64%
Securities:                    
Securities, taxable  2.81%  2.92%  2.94%  2.93%  2.81%
Securities, tax-free  3.49%  3.74%  4.09%  4.08%  4.15%
Total securities  2.93%  2.95%  2.96%  2.95%  2.83%
Interest-bearing deposits in other banks  0.04%  1.00%  0.78%  1.20%  2.19%
Total earning assets  3.64%  4.05%  4.16%  4.22%  4.15%
Interest-bearing liabilities:                    
Interest on deposits  0.65%  0.81%  0.88%  0.96%  1.01%
Interest on borrowed funds  1.14%  1.99%  2.44%  2.58%  2.78%
Total interest-bearing liabilities  0.69%  0.89%  0.98%  1.11%  1.11%
Net interest spread  2.95%  3.16%  3.18%  3.11%  3.04%
Net interest margin  3.12%  3.35%  3.38%  3.32%  3.25%



FNCB Bancorp, Inc.
Asset Quality Data


  Jun 30,  Mar 31,  Dec 31,  Sept 30,  Jun 30, 
(in thousands) 2020  2020  2019  2019  2019 
At period end                    
Non-accrual loans, including non-accruing troubled debt restructured loans (TDRs) $6,740  $8,576  $9,084  $6,119  $5,302 
Loans past due 90 days or more and still accruing  -   -   -   -   - 
Total non-performing loans  6,740   8,576   9,084   6,119   5,302 
Other real estate owned (OREO)  85   85   289   412   560 
Other non-performing assets  1,900   1,900   1,900   1,900   1,900 
Total non-performing assets $8,725  $10,561  $11,273  $8,431  $7,762 
                     
Accruing TDRs $8,592  $7,729  $7,745  $7,828  $7,897 
                     
                     
For the three months ended                    
Allowance for loan and lease losses                    
Beginning balance $9,907  $8,950  $9,315  $8,945  $9,253 
Loans charged-off  316   329   620   417   1,123 
Recoveries of charged-off loans  602   135   288   150   468 
Net charge-offs (recoveries)  (286)  194   332   267   655 
Provision (credit) for loan and lease losses  831   1,151   (33)  637   347 
Ending balance $11,024  $9,907  $8,950  $9,315  $8,945 

 

 


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Source: FNCB Bancorp, Inc.
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