FNCB Bancorp, Inc. Announces First Quarter 2022 Net Income

04/29/2022

DUNMORE, Pa., April 29, 2022 (GLOBE NEWSWIRE) -- FNCB Bancorp, Inc. (NASDAQ: FNCB; www.fncb.com), the parent company of Dunmore-based FNCB Bank (the “Bank”), (collectively, "FNCB") today reported net income of $4.4 million, or $0.22 per basic and diluted share, for the three months ended March 31, 2022, a decrease of $1.4 million, or 25.4%, compared to $5.8 million, or $0.29 per share for the same period of 2021. The reduction in earnings was largely due to increases in non-interest expense and the provision for loan and lease losses, coupled with a decrease in non-interest income. These reductions to earnings were partially mitigated by an increase in net interest income. For the three months ended March 31, 2022, the annualized return on average assets and return on average equity was 1.08% and 11.31%, respectively, compared to 1.61% and 15.27%, respectively, for the same period of 2021.  FNCB declared and paid dividends to shareholders of common stock of $0.075 per share for the first quarter of 2022, a 25% increase, compared to $0.060 per share for the same period of 2021. 

First quarter 2022 performance: 

  • First quarter 2022 net income was $4.4 million, or $0.22 per share, compared to $5.8 million, or $0.29 per share for the first quarter of 2021, a decrease of $1.4 million, or 25.4%;
  • Yield on earning assets (FTE) decreased 40 basis points to 3.45% for the first quarter of 2022 from 3.85% for the first quarter of 2021, but improved 4 basis points on a linked-quarter basis from 3.41% for the fourth quarter of 2021; 
  • Cost of funds decreased 20 basis points to 0.14% from 0.34% comparing the first quarters of 2022 and 2021, and decreased 2 basis points on a linked-quarter basis from 0.16% for the fourth quarter of 2021; 
  • Net interest margin (FTE) contracted 24 basis points to 3.35% for the first quarter of 2022, compared to 3.59% for the same period of 2021, but widened 6 basis points on a linked-quarter basis from 3.29% for the fourth quarter of 2021;
  • Efficiency ratio increased to 58.12% in the first quarter of 2022 compared to 51.87% for the first quarter of 2021, but improved from 61.75% on a linked-quarter basis from the fourth quarter of 2021.

Summary financial position at March 31, 2022 as compared to December 31, 2021:

  • Total assets declined $14.8 million, or 0.9%, to $1.650 billion at March 31, 2022 from $1.664 billion at December 31, 2021;
  • Loans and leases, net of deferred loan fees and unearned income, increased $56.2 million, or 5.8%, to $1.023 billion at March 31, 2022 from $967.0 million at December 31, 2021;
  • Total deposits decreased $43.4 million, or 3.0% to $1.412 billion at March 31, 2022 from $1.455 billion at December 31, 2021;
  • Non-performing loans as a percentage of total loans improved to 0.37% at March 31, 2022 from 0.39% at December 31, 2021;
  • The Bank was well capitalized with total risk-based capital and leverage ratios of 14.10% and 9.30%, respectively, at March 31, 2022, and 14.64% and 8.92%, respectively, at December 31, 2021.

"We are very pleased with our first quarter 2022 operating results," stated Gerard A. Champi, President and CEO. "We continued to effectively manage funding costs and improve earning asset yields and the net interest margin over the prior quarter. Additionally, we successfully completed several strategic initiatives during the first quarter of 2022 including completing the launch of 1st Equipment Finance, our new commercial equipment financing and leasing product offering, and the purchase of several third-party originated loan pools. Both initiatives allowed us to diversify FNCB's loan portfolio, reduce risk and enhance net interest income run rates going forward," concluded Champi. 

Summary Results 

Net interest income on a tax-equivalent basis increased $1.4 million, or 12.1%, to $13.0 million for the three months ended March 31, 2022 from $11.6 million for the comparable period of 2021. The improvement in tax-equivalent net interest income primarily reflected an increase in tax-equivalent interest income of $1.0 million or 7.8%, to $13.5 million for the first quarter of 2022 from $12.5 million for the same quarter of 2021, coupled with a decrease in interest expense of $0.4 million, or 52.0%, to $0.4 million from $0.8 million comparing the first quarter of 2022 and 2021, respectively. The $1.0 million, or 7.8%, increase in tax-equivalent interest income largely reflected higher volumes of earning assets, as total average earning assets increased $263.0 million, or 20.3%, to $1.559 billion for the three months ended March 31, 2022 from $1.296 billion for the same three months of 2021. Specifically, total securities averaged $541.0 million for the first quarter of 2022, an increase of $179.0 million, or 49.5%, from $362.0 million for the first quarter of 2021, reflecting the redeployment of excess liquidity into the investment portfolio throughout 2021. In addition, average total loans and leases increased $79.9 million, or 8.7%, to $1.000 billion for the first quarter of 2022 from $920.4 million for the same quarter of 2021, which was largely due to strong organic loan demand, FNCB's new commercial equipment financing and leasing product offering and purchases of third-party originated loan pools. Partially offsetting the positive impact of earning asset growth, was a decrease in the tax-equivalent yield on average earning assets of 40 basis points to 3.45% for the three months ended March 31, 2022, compared to 3.85% for the same three months of 2021. The decline in yield included a reduction in net loan origination fees recognized on forgiven PPP loans of $0.6 million, or 49.8%, comparing the three months ended March 31, 2022 and 2021, as the majority of PPP loans were forgiven in 2021. FNCB continued to successfully manage funding costs as evidenced by a 20-basis point reduction in the cost of funds to 0.14% for the three months ended March 31, 2022 from 0.34% for the same three months of 2021, which was the main factor leading to the $0.4 million, or 52.0%, reduction in interest expense. Specifically, the average rate paid for interest-bearing deposits decreased 20 basis points to 0.12% for the first quarter of 2022 from 0.32% for the same period of 2021, which reflected the reduction in market interest rates and repricing of higher-costing time deposits upon maturity. Additionally, average borrowing costs decreased 117 basis points to 0.69% from 1.86% comparing the three months ended March 31, 2022 and 2021. Interest-bearing liabilities averaged $1.159 billion for the first quarter of 2022, an increase of $149.6 million, or 14.8%, from $1.009 billion for the same quarter of 2021. The increase in interest-bearing liabilities reflected deposit migration from time deposits into non-maturity deposits as well as an increase in utilization of wholesale funding. Specifically, interest-bearing deposits increased $112.6 million, or 11.3%, to $1.112 billion from $999.1 million, while average borrowed funds increased $37.0 million, or 359.2%, to $47.3 million from $10.3 million, comparing the first quarters of 2022 and 2021, respectively. Average interest-bearing demand deposits increased $130.7 million, or 18.8%, to $826.5 million for the first quarter of 2022 compared to $695.8 million for the same quarter of 2021, while average savings deposits increased $26.1 million, or 22.9%, to $140.5 million from $114.3 million comparing the first quarters of 2022 and 2021, respectively. Conversely, average time deposits decreased $44.3 million, or 23.4%, to $144.7 million for the three months ended March 31, 2022 from $189.0 million for the same three months of 2021. Despite the increase in net interest income, FNCB began to experience some margin compression, as the tax-equivalent net interest margin decreased 24 basis points to 3.35% for the first quarter of 2022 from 3.59% for the same quarter of 2021. Additionally, the net interest spread declined 20 basis points to 3.31% for the three months ended March 31, 2022 from 3.51% for the same three months of 2021. The reduction in margin and spread largely reflected decreases in yields earned on loans and investments, coupled with the decline in PPP loan origination fees recognized, comparing the first quarters of 2022 and 2021. On a linked-quarter basis, the tax-equivalent net interest margin and interest rate spread each widened 6 basis points from 3.29% and 3.25%, respectively, for the fourth quarter of 2021.

For the three months ended March 31, 2022, non-interest income decreased $1.0 million, or 35.5%, to $1.8 million from $2.8 million for the three months ended March 31, 2021. The decrease was largely due to shifting market conditions which resulted in reductions in net gains on equity securities, net gains on the sale of available-for-sale debt securities and net gains on the sale of mortgage loans held for sale. In addition, in 2021, FNCB recorded non-recurring income of $0.4 million received on a BOLI insurance claim. These reductions were partially offset by an increase in deposit service charges. For the three months ended March 31, 2022, FNCB recorded a net loss on equity securities of $0.1 million, a decrease of $0.5 million, or 134.3%, compared to a net gain on equity securities of $0.4 million for the same three months of 2021. Additionally, there were no net gains realized on the sale of available-for-sale debt securities during the three months ended March 31, 2022. Comparatively, net gains realized on the sale of available-for-sale debt securities were $0.2 million for the same three-month period of 2021. There were no net gains on the sale of mortgage loans held for sale for the first quarter of 2022, compared to $0.2 million for the same quarter of 2021. These reductions were partially offset by a $0.2 million, or 20.1%, increase in deposit service charges to $1.1 million for the three months ended March 31, 2022, compared to $0.9 million for the three months ended March 31, 2021. 

Non-interest expense increased $1.3 million, or 19.2% to $8.5 million for the three months ended March 31, 2022 from $7.2 million for the three months ended March 31, 2021, which primarily reflected increases in salaries and employee benefits, data processing expenses and other operating expenses. Salaries and employee benefits increased $0.9 million, or 24.7%, to $4.6 million for the first quarter of 2022 from $3.7 million for the same quarter of 2021. The increase in salaries and benefits was primarily due to the onboarding of additional staff related to the new commercial equipment financing and leasing product offering, increases in payroll taxes and higher retirement costs. Data processing expenses increased $0.3 million, or 29.8%, to $1.1 million for the three months ended March 31, 2022, compared to $0.8 million for the same three months of 2021. Other operating expenses increased $0.1 million, or 19.5% to $0.9 million for the first quarter of 2022, compared to $0.8 million for the same quarter of 2021. 

Asset Quality

FNCB's asset quality was favorable during the first quarter of 2022, as total non-performing loans remained relatively constant at $3.9 million, representing 0.37% and 0.39% of total loans and leases, gross at March 31, 2022 and at December 31, 2021, respectively. Year-over-year, non-performing loans decreased $0.9 million, or 20.2%, from $4.8 million, or 0.52% of total loans, gross, at March 31, 2021. FNCB’s loan delinquency rate (total delinquent loans as a percentage of total loans, gross) remained constant at 0.55% at March 31, 2022 and at December 31, 2021, but improved 0.15% compared to 0.70% at March 31, 2021. FNCB recorded a provision for loan and lease losses of $0.8 million for the first quarter of 2022 compared to a $0.2 million provision for the same quarter of 2021. The increase was primarily attributable to increases in loan and lease volumes.  The allowance for loan and lease losses was $13.1 million, or 1.27% of total loans and leases, gross, at March 31, 2022, compared to $12.4 million, or 1.27% of total loans and leases, gross, at December 31, 2021 and $12.1 million, or 1.30% of total loans and leases, gross, at March 31, 2021.

Financial Condition

Total assets decreased $14.8 million, or 0.9%, to $1.650 billion at March 31, 2022 from $1.664 billion at December 31, 2021. The change in total assets primarily reflected decreases in cash and cash equivalents and available-for-sale debt securities, which were partially offset by an increase in loans and leases, net of the ALLL. Cash and cash equivalents decreased $74.9 million, or 75.7%, to $24.1 million at March 31, 2022 from $99.0 million at December 31, 2021. Available-for-sale debt securities decreased $8.5 million, or 1.6%, to $514.1 million at March 31, 2022 from $522.6 million at December 31, 2021. Loans and leases increased $56.2 million, or 5.8%, to $1.023 billion at March 31, 2022 from $967.0 million at December 31, 2021. Increases were experienced across all loan categories, which reflected the roll-out of the new commercial equipment financing product offering, strong organic loan demand and the purchase of several pools of third-party originated loans. Total deposits decreased $43.4 million, or 3.0%, to $1.412 billion at March 31, 2022 from $1.455 billion at December 31, 2021. Meanwhile, total borrowed funds increased $57.0 million to $87.3 million at March 31, 2022 from $30.3 million at December 31, 2021. The increase was entirely due to an increase in advances through the FHLB of Pittsburgh. 

Total shareholders’ equity decreased $24.1 million, or 14.8%, to $138.4 million at March 31, 2022 from $162.5 million at December 31, 2021.  The decrease in capital was primarily due to an accumulated other comprehensive loss of $17.7 million at March 31, 2022, compared to accumulated other comprehensive income of $6.3 million at December 31, 2021. This $24.0 million reduction was related primarily to the depreciation in the fair value of FNCB's available-for-sale debt securities, net of deferred taxes. Also contributing to the reduction in capital was $3.0 million for the repurchase of common shares under a board authorized stock repurchase program and $1.5 million in dividends declared and paid for the three months ended March 31, 2022. These reductions were slightly offset by net income for the three months ended March 31, 2022 of $4.4 million. Tangible book value decreased from $8.13 per share at December 31, 2021 to $7.03 per share at March 31, 2022. FNCB Bank was considered well capitalized with total risk-based capital and Tier 1 leverage ratios of 14.10% and 9.30%, respectively, at March 31, 2022, and 14.64% and 8.92%, respectively, at December 31, 2021.

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 112 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 16 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

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 novel Coronavirus Disease 2019 ("COVID-19") pandemic on FNCB and its customers, the Commonwealth of Pennsylvania and the United States, related to the economy, overall financial stability and the global supply chain; the COVID-19 pandemic and actions taken to control its spread; 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 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, 2021. 

 
FNCB Bancorp, Inc.
Selected Financial Data
 
  Mar 31,     Dec 31,     Sept 30,     June 30,     Mar 31,  
  2022     2021     2021     2021     2021  
Per share data:                                      
Net income (fully diluted) $ 0.22     $ 0.20     $ 0.31     $ 0.26     $ 0.29  
Cash dividends declared $ 0.075     $ 0.075     $ 0.075     $ 0.060     $ 0.060  
Book value $ 7.03     $ 8.13     $ 8.10     $ 7.99     $ 7.65  
Tangible book value $ 7.03     $ 8.13     $ 8.10     $ 7.99     $ 7.65  
Market value:                                      
High $ 10.15     $ 9.40     $ 8.35     $ 7.98     $ 8.94  
Low $ 8.67     $ 8.21     $ 7.17     $ 6.90     $ 5.80  
Close $ 9.49     $ 9.24     $ 8.23     $ 7.27     $ 7.54  
Common shares outstanding   19,683,671       19,989,875       19,985,837       20,102,602       20,240,668  
                                       
Selected ratios:                                      
Annualized return on average assets   1.08 %     0.94 %     1.58 %     1.38 %     1.61 %
Annualized return on average shareholders' equity   11.31 %     9.82 %     15.61 %     13.37 %     15.27 %
Efficiency ratio   58.12 %     61.75 %     51.32 %     51.86 %     51.87 %
Tier I leverage ratio (FNCB Bank)   9.30 %     8.92 %     9.80 %     9.90 %     9.88 %
Total risk-based capital to risk-adjusted assets (FNCB Bank)   14.10 %     14.64 %     15.91 %     15.79 %     16.26 %
Average shareholders' equity to average total assets   9.54 %     9.61 %     10.14 %     10.35 %     10.53 %
Yield on earning assets (FTE)   3.45 %     3.41 %     3.63 %     3.80 %     3.85 %
Cost of funds   0.14 %     0.16 %     0.23 %     0.30 %     0.34 %
Net interest spread (FTE)   3.31 %     3.25 %     3.40 %     3.50 %     3.51 %
Net interest margin (FTE)   3.35 %     3.29 %     3.46 %     3.58 %     3.59 %
Total delinquent loans/total loans   0.55 %     0.55 %     0.61 %     0.56 %     0.70 %
Allowance for loan and lease losses/total loans   1.27 %     1.27 %     1.25 %     1.26 %     1.30 %
Non-performing loans/total loans   0.37 %     0.39 %     0.47 %     0.46 %     0.52 %
Annualized net (recoveries) charge-offs /average loans   0.00 %     (0.03 %)     (0.03 %)     (0.02 %)     0.03 %


 
FNCB Bancorp, Inc.
Year-to-Date Consolidated Statements of Income
 
    Three Months Ended
    March 31,
(in thousands, except share data)   2022     2021
Interest income              
Interest and fees on loans and leases   $ 10,102     $ 9,786
Interest and dividends on securities:              
Taxable     2,390       1,906
Tax-exempt     612       486
Dividends     78       62
Total interest and dividends on securities     3,080       2,454
Interest on interest-bearing deposits in other banks     7       3
Total interest income     13,189       12,243
Interest expense              
Interest on deposits     324       798
Interest on borrowed funds              
Federal Home Loan Bank of Pittsburgh advances     31       -
Junior subordinated debentures     51       48
Total interest on borrowed funds     82       48
Total interest expense     406       846
Net interest income before provision for loan and lease losses     12,783       11,397
Provision for loan and lease losses     759       186
Net interest income after provision for loan and lease losses     12,024       11,211
Non-interest income              
Deposit service charges     1,050       874
Net gain on the sale of available-for-sale debt securities     -       213
Net (loss) gain on equity securities     (125 )     364
Net gain on the sale of mortgage loans held for sale     -       224
Loan-related fees     57       133
Income from bank-owned life insurance     145       121
Bank-owned life insurance settlement     -       422
Merchant services revenue     199       138
Other     464       285
Total non-interest income     1,790       2,774
Non-interest expense              
Salaries and employee benefits     4,658       3,736
Occupancy expense     548       609
Equipment expense     324       353
Advertising expense     132       117
Data processing expense     1,063       819
Regulatory assessments     225       188
Bank shares tax     341       315
Professional fees     327       259
Other operating expenses     926       775
Total non-interest expense     8,544       7,171
Income before income taxes     5,270       6,814
Income tax expense     917       981
Net income   $ 4,353     $ 5,833
               
Income per share              
Basic   $ 0.22     $ 0.29
Diluted   $ 0.22     $ 0.29
               
Cash dividends declared per common share   $ 0.075     $ 0.060
Weighted average number of shares outstanding:              
Basic     19,935,288       20,242,262
Diluted     19,972,113       20,253,606


 
FNCB Bancorp, Inc.
Quarter-to-Date Consolidated Statements of Income
 
    Three Months Ended
    Mar 31,     Dec 31,     Sept 30,     June 30,   Mar 31,
(in thousands, except share data)   2022     2021     2021     2021   2021
Interest income                                    
Interest and fees on loans and leases   $ 10,102     $ 10,325     $ 10,696     $ 10,242   $ 9,786
Interest and dividends on securities                                    
Taxable     2,390       2,281       2,070       1,980     1,906
Tax-exempt     612       567       517       516     486
Dividends     78       63       55       59     62
Total interest and dividends on securities     3,080       2,911       2,642       2,555     2,454
Interest on interest-bearing deposits in other banks     7       53       31       1     3
Total interest income     13,189       13,289       13,369       12,798     12,243
Interest expense                                    
Interest on deposits     324       410       582       718     798
Interest on borrowed funds                                    
Federal Home Loan Bank of Pittsburgh advances     31       6       -       -     -
Junior subordinated debentures     51       48       47       48     48
Total interest on borrowed funds     82       54       47       48     48
Total interest expense     406       464       629       766     846
Net interest income before provision (credit) for loan and lease losses     12,783       12,825       12,740       12,032     11,397
Provision (credit) for loan and lease losses     759       338       (513 )     155     186
Net interest income after provision (credit) for loan and lease losses     12,024       12,487       13,253       11,877     11,211
Non-interest income                                    
Deposit service charges     1,050       1,038       1,009       956     874
Net gain on the sale of available-for-sale debt securities     -       -       -       -     213
Net (loss) gain on equity securities     (125 )     145       156       36     364
Net gain on the sale of mortgage loans held for sale     -       40       41       47     224
Loan-related fees     57       76       77       104     133
Income from bank-owned life insurance     145       139       139       142     121
Bank-owned life insurance settlement     -       -       -       4     422
Merchant services revenue     199       140       159       156     138
Other     464       365       261       264     285
Total non-interest income     1,790       1,943       1,842       1,709     2,774
Non-interest expense                                    
Salaries and employee benefits     4,658       4,901       4,022       4,038     3,736
Occupancy expense     548       549       450       431     609
Equipment expense     324       333       319       333     353
Advertising expense     132       221       160       214     117
Data processing expense     1,063       1,024       961       885     819
Regulatory assessments     225       149       160       112     188
Bank shares tax     341       (34 )     352       342     315
Professional fees     327       150       153       112     259
Other operating expenses     926       1,879       923       759     775
Total non-interest expense     8,544       9,172       7,500       7,226     7,171
Income before income taxes     5,270       5,258       7,595       6,360     6,814
Income tax expense     917       1,300       1,244       1,131     981
Net income   $ 4,353     $ 3,958     $ 6,351     $ 5,229   $ 5,833
                                     
Income per share                                    
Basic   $ 0.22     $ 0.20     $ 0.31     $ 0.26   $ 0.29
Diluted   $ 0.22     $ 0.20     $ 0.31     $ 0.26   $ 0.29
                                     
Cash dividends declared per common share   $ 0.075     $ 0.075     $ 0.075     $ 0.060   $ 0.060
Weighted average number of shares outstanding:                                    
Basic     19,935,288       19,988,272       19,997,021       20,222,216     20,242,262
Diluted     19,972,113       20,015,776       20,009,387       20,232,694     20,253,606


 
FNCB Bancorp, Inc.
Consolidated Balance Sheets
 
    Mar 31,     Dec 31,     Sept 30,     June 30,     Mar 31,  
(in thousands)   2022     2021     2021     2021     2021  
Assets                                        
Cash and cash equivalents:                                        
Cash and due from banks   $ 19,383     $ 16,651     $ 24,612     $ 24,782     $ 22,382  
Interest-bearing deposits in other banks     4,719       82,369       149,581       31,160       76,172  
Total cash and cash equivalents     24,102       99,020       174,193       55,942       98,554  
Available-for-sale debt securities     514,133       522,566       470,323       432,807       407,396  
Equity securities, at fair value     5,018       4,922       4,777       4,303       4,267  
Restricted stock, at cost     4,020       1,911       1,826       1,099       1,149  
Loans held for sale     -       -       491       642       267  
Loans and leases, net of deferred loan fees and costs and unearned income     1,036,400       979,439       958,408       976,538       931,943  
Allowance for loan and lease losses     (13,129 )     (12,416 )     (12,018 )     (12,285 )     (12,076 )
Net loans and leases     1,023,271       967,023       946,390       964,253       919,867  
Bank premises and equipment, net     15,895       16,082       17,269       17,360       17,407  
Accrued interest receivable     4,870       4,643       4,593       4,485       4,567  
Bank-owned life insurance     36,639       33,494       33,355       33,216       33,074  
Other assets     21,602       14,662       12,674       10,656       13,488  
Total assets   $ 1,649,550     $ 1,664,323     $ 1,665,891     $ 1,524,763     $ 1,500,036  
                                         
Liabilities                                        
Deposits:                                        
Demand (non-interest-bearing)   $ 317,541     $ 320,089     $ 321,952     $ 312,408     $ 319,532  
Interest-bearing     1,094,052       1,134,939       1,160,114       1,025,770       1,003,296  
Total deposits     1,411,593       1,455,028       1,482,066       1,338,178       1,322,828  
Borrowed funds     87,260       30,310       10,310       10,310       10,310  
Accrued interest payable     57       49       56       87       99  
Other liabilities     12,251       16,479       11,509       15,574       11,869  
Total liabilities     1,511,161       1,501,866       1,503,941       1,364,149       1,345,106  
                                         
Shareholders' equity                                        
Preferred stock     -       -       -       -       -  
Common stock     24,604       24,987       24,982       25,128       25,300  
Additional paid-in capital     77,642       80,128       80,000       80,591       81,640  
Retained earnings     53,834       50,990       48,541       43,698       39,691  
Accumulated other comprehensive income     (17,691 )     6,352       8,427       11,197       8,299  
Total shareholders' equity     138,389       162,457       161,950       160,614       154,930  
Total liabilities and shareholders’ equity   $ 1,649,550     $ 1,664,323     $ 1,665,891     $ 1,524,763     $ 1,500,036  


 
FNCB Bancorp, Inc.
Summary Tax-equivalent Net Interest Income
 
    Three Months Ended  
    Mar 31,     Dec 31,     Sept 30,     June 30,     Mar 31,  
(dollars in thousands)   2022     2021     2021     2021     2021  
Interest income                                        
Loans:                                        
Loans - taxable   $ 9,755     $ 9,983     $ 10,364     $ 9,897     $ 9,401  
Loans - tax-free     439       433       420       437       487  
Total loans     10,194       10,416       10,784       10,334       9,888  
Securities:                                        
Securities, taxable     2,468       2,344       2,125       2,039       1,968  
Securities, tax-free     775       719       654       653       615  
Total interest and dividends on securities     3,243       3,063       2,779       2,692       2,583  
Interest-bearing deposits in other banks     7       53       31       1       3  
Total interest income     13,444       13,532       13,594       13,027       12,474  
Interest expense                                        
Deposits     324       410       582       718       798  
Borrowed funds     82       54       47       48       48  
Total interest expense     406       464       629       766       846  
Net interest income   $ 13,038     $ 13,068     $ 12,965     $ 12,261     $ 11,628  
                                         
Average balances                                        
Earning assets:                                        
Loans:                                        
Loans - taxable   $ 946,201     $ 915,693     $ 921,648     $ 909,833     $ 873,544  
Loans - tax-free     54,096       45,920       43,091       44,583       46,897  
Total loans     1,000,297       961,613       964,739       954,416       920,441  
Securities:                                        
Securities, taxable     437,955       409,210       357,684       326,848       286,128  
Securities, tax-free     103,086       92,685       82,706       82,304       75,876  
Total securities     541,041       501,895       440,390       409,152       362,004  
Interest-bearing deposits in other banks     17,464       125,609       94,434       7,042       13,490  
Total interest-earning assets     1,558,802       1,589,117       1,499,563       1,370,610       1,295,935  
Non-earning assets     78,394       91,968       105,912       145,861       175,301  
Total assets   $ 1,637,196     $ 1,681,085     $ 1,593,014     $ 1,516,471     $ 1,471,236  
Interest-bearing liabilities:                                        
Deposits   $ 1,111,671     $ 1,163,920     $ 1,080,312     $ 1,019,612     $ 999,085  
Borrowed funds     47,346       17,810       10,419       10,310       10,310  
Total interest-bearing liabilities     1,159,017       1,181,100       1,090,731       1,029,922       1,009,395  
Demand deposits     308,830       322,536       325,571       317,670       294,525  
Other liabilities     13,234       15,846       15,258       11,998       12,413  
Shareholders' equity     156,115       161,603       161,454       156,881       154,903  
Total liabilities and shareholders' equity   $ 1,637,196     $ 1,681,085     $ 1,593,014     $ 1,561,471     $ 1,471,236  
                                         
Yield/Cost                                        
Earning assets:                                        
Loans:                                        
Interest and fees on loans - taxable     4.12 %     4.36 %     4.50 %     4.35 %     4.30 %
Interest and fees on loans - tax-free     3.25 %     3.77 %     3.90 %     3.92 %     4.15 %
Total loans     4.08 %     4.33 %     4.47 %     4.33 %     4.30 %
Securities:                                        
Securities, taxable     2.25 %     2.29 %     2.38 %     2.50 %     2.75 %
Securities, tax-free     3.01 %     3.10 %     3.16 %     3.17 %     3.24 %
Total securities     2.40 %     2.44 %     2.52 %     2.63 %     2.85 %
Interest-bearing deposits in other banks     0.16 %     0.17 %     0.13 %     0.06 %     0.09 %
Total earning assets     3.45 %     3.41 %     3.63 %     3.80 %     3.85 %
Interest-bearing liabilities:                                        
Interest on deposits     0.12 %     0.14 %     0.22 %     0.28 %     0.32 %
Interest on borrowed funds     0.69 %     1.21 %     1.80 %     1.86 %     1.86 %
Total interest-bearing liabilities     0.14 %     0.16 %     0.23 %     0.30 %     0.34 %
Net interest spread     3.31 %     3.25 %     3.40 %     3.50 %     3.51 %
Net interest margin     3.35 %     3.29 %     3.46 %     3.58 %     3.59 %


 
FNCB Bancorp, Inc.
Asset Quality Data
 
    Mar 31,     Dec 31,     Sept 30,     June 30,     Mar 31,
(in thousands)   2022     2021     2021     2021     2021
At period end                                      
Non-accrual loans, including non-accruing troubled debt restructured loans (TDRs)   $ 3,864     $ 3,863     $ 4,475     $ 4,555     $ 4,842
Loans past due 90 days or more and still accruing     -       -       -       -       -
Total non-performing loans     3,864       3,863       4,475       4,555       4,842
Other real estate owned (OREO)     228       920       54       236       58
Other non-performing assets     1,773       1,773       1,773       1,773       1,900
Total non-performing assets   $ 5,865     $ 6,556     $ 6,302     $ 6,564     $ 6,800
                                       
Accruing TDRs   $ 6,455     $ 6,666     $ 6,666     $ 6,823     $ 6,962
                                       
                                       
For the three months ended                                      
Allowance for loan and lease losses                                      
Beginning balance   $ 12,416     $ 12,018     $ 12,285     $ 12,076     $ 11,950
Loans charged-off     95       34       255       136       361
Recoveries of charged-off loans     49       94       501       190       301
Net charge-offs (recoveries)     46       (60 )     (246 )     (54 )     60
Provision (credit) for loan and lease losses     759       338       (513 )     155       186
Ending balance   $ 13,129     $ 12,416     $ 12,018     $ 12,285     $ 12,076

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Source: FNCB Bancorp, Inc.