FNCB Bancorp, Inc. Reports Third Quarter Net Income of $1.850 Million

Year-To-Date Revenue of $31.7 Million Up 7.4% from Prior Year  

DUNMORE, Pa., Oct. 19, 2018 (GLOBE NEWSWIRE) — FNCB Bancorp, Inc. (NASDAQ: FNCB), the parent company of Dunmore-based FNCB Bank (the “Bank”), reported net income of $1.850 million, or $0.11 per basic and diluted share, for the third quarter of 2018, compared to net income of $2.272 million, or $0.14 per basic and diluted share, for the same quarter of 2017. The $422 thousand, or 18.6%, decrease in third quarter earnings reflected increases of $0.8 million in non-interest expense and $0.6 million in the provision for loan and lease losses, coupled with a $ 0.4 million decrease in non-interest income. Partially offsetting these factors was a $0.9 million increase in net interest income comparing the third quarters of 2018 and 2017. Net income for the nine months ended September 30, 2018 was $6.281 million, or $0.37 per basic and diluted share, compared to $6.261 million, or $0.37 per basic and diluted share, for the same period of 2017.

Cash Dividends Declared

Dividends declared and paid were $0.04 per share for the third quarter and $0.12 per share for the year-to-date period of 2018, which represented a 33.3% increase compared to $0.03 per share and $0.09 per share, respectively, for the three and nine months ended September 30, 2017. The dividend pay-out ratio for the nine months ended September 30, 2018 was 32.1%, compared to 24.0% for the same period of 2017.

Third Quarter 2018 Performance Highlights:

  • Year-to-date total revenue (net interest income and non-interest income) increased 7.4% year over year;
  • Net interest income (FTE) increased 10.5% and 11.9%, comparing the third quarter and year-to-date periods of 2018 and 2017, respectively;
  • Yield on earning assets (FTE) for the third quarter of 2018 improved 27 basis points compared to the same quarter of 2017;
  • Year over year growth in total loans, net of net deferred costs and unearned income, of $104.8 million, or 13.8%;
  • Total deposits grew $111.9 million, or 11.4%, comparing September 30, 2018 and 2017.

“The efforts of our dedicated team resulted in another solid and productive quarter characterized by continued loan and deposit growth, a double-digit increase in interest income compared to the prior year quarter, as well as solid year-over-year revenue growth (net interest income + non-interest income),” said Gerard A. Champi, President and Chief Executive Officer. “Loan demand in the third quarter of 2018 was driven by strong consumer loan activity and growth in our commercial real estate and municipal portfolios. Our third quarter loan loss provision was up $606 thousand in comparison to the third quarter 2017, primarily reflecting strong loan growth and a single commercial relationship that was placed on non-accrual status. Overall, our asset quality remains favorable with key industry metrics below or in line with peer levels.  Core deposit funding, which continues to be a strategic focus, has remained solid throughout 2018, contributing to the nearly 12.0% growth in total deposits year over year. Our continued deposit growth was gratifying because it occurred despite some rather aggressive pricing from competitors across our service footprint, indicative of the ongoing strength of the FNCB Bank brand. We continue to focus on improving financial performance, with a specific benchmark for return on average assets of 1.00%. At the close of the third quarter of 2018, our balance sheet remains strong and our ability to attract core deposits, as well as generate growth across our various loan portfolios, we believe leaves us well positioned to extend our performance through the remainder of 2018 and the first half of 2019.”

Summary Results for the Three and Nine Months Ended September 30, 2018

Tax-equivalent net interest income was $9.4 million for the third quarter of 2018, an increase of $0.9 million, or 10.5%, from $8.5 million for the same quarter of 2017. Tax-equivalent net interest income for the nine months ended September 30, 2018 increased $2.9 million, or 11.9%, to $27.7 million compared to $24.8 million for the same nine-month period of 2017. The improvement for both the quarter and year-to-date periods was largely due to growth in average earning assets and higher earning-asset yields, partially offset by higher funding costs. Average earning assets grew $133.3 million, or 12.9%, and $102.2 million, or 9.9%, comparing the three- and nine-month periods ended September 30, 2018 and 2017, respectively. Tax-equivalent earning-asset yields improved 27 basis points for the third quarter and 31 basis points for the nine months ended September 30, 2018 over the same periods of 2017. For the three months ended September 30, 2018, the cost of funds increased 41 basis points to 1.00% from 0.59% for the same period of 2017. Similarly, the cost of funds increased 31 basis points to 0.84% from 0.53% comparing the year-to-date periods of 2018 and 2017. The tax-equivalent net interest spread for the nine months ended September 30, 2018 and 2017 remained stable at 3.10%, while the tax-equivalent net interest margin increased 6 basis points to 3.24% from 3.18% comparing the nine months ended September 30, 2018 and 2017, respectively. Despite the increase in the year-to-date margin, rising funding costs in the third quarter of 2018 resulted in a decrease in the tax-equivalent net interest margin of 6 basis points to 3.21% from 3.27% from the same quarter of 2017.  Additionally, the net interest margin for the third quarter of 2018 compressed 5 basis points from the second quarter of 2018 percentage of 3.26%. 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 2018 and 34.0% for 2017.

Non-interest income totaled $1.3 million for the three months ended September 30, 2018, a decrease of $0.4 million, or 23.0%, compared to $1.7 million for the comparable period of 2017. For the nine months ended September 30, 2018, non-interest income amounted to $4.4 million, a decrease of $0.9 million, or 17.7%, compared to $5.3 million for the same period of 2017. Included in non-interest income for the three and nine months ended September 30, 2017 were net gains on the sale of available-for sale securities of $0.4 million and $1.3 million, respectively. Comparatively, there were no net gains on the sale of available-for-sale securities for the three months ended September 30, 2018. For the nine months ended September 30, 2018, FNCB realized net losses on the sale of available-for-sale securities of $4 thousand.

For the three months ended September 30, 2018, non-interest expense increased $0.8 million, or 12.4%, to $7.2 million from $6.4 million for the same three months of 2017. Comparing the nine months ended September 30, 2018 and 2017, non-interest expense increased $1.1 million, or 5.5%.  The increase in non-interest expense resulted largely from higher salaries and employee benefits expense related to staffing additions within FNCB Bank’s retail and commercial lending and credit administration units, coupled with increases in regulatory assessments, which, we believe, primarily reflected strong balance sheet growth.

Annualized return on average assets and return on average equity was 0.59% and 8.41%, respectively, for the three months ended September 30, 2018, compared to 0.80% and 9.27%, for the respective periods of 2017. For the nine months ended September 30, 2018, annualized return on average assets and return on average equity was 0.69% and 9.68%, respectively, compared to 0.74% and 8.87%, respectively, for the nine months ended September 30, 2017.

Asset Quality

Total non-performing loans were $4.4 million at September 30, 2018, an increase of $0.9 million from $3.5 million at June 30, 2018 and $1.8 million from $2.6 million at September 30, 2017. The increase from June 30, 2018 was primarily attributable to one commercial relationship that was placed on non-accrual status. The ratio of non-performing loans to total loans was 0.51% at September 30, 2018, compared to 0.41% at June 30, 2018 and 0.35% at September 30, 2017. Despite the increase in non-performing loans from the previous quarter end, FNCB’s asset quality continued to compare favorably to the peer average of 0.64% at June 30, 2018, the most recent data reported in the Board of Governors of the Federal Reserve System Bank Holding Company Performance Report for bank holding companies having assets between $1.0 billion and $3.0 billion. The allowance for loan and lease losses as a percentage of gross loans was 1.14% at September 30, 2018, 1.11% at June 30, 2018 and 1.17% at September 30, 2017.

Financial Condition

Total assets increased $88.8 million, or 7.6%, to $1.251 billion at September 30, 2018 from $1.162 billion at December 31, 2017. The increase in total assets primarily reflected strong growth in interest-earning assets. Specifically, loans, net of net deferred costs and unearned income, increased $93.7 million, or 12.2%, to $864.3 million at September 30, 2018 from $770.6 million at December 31, 2017. The asset growth was funded with an increase in total deposits of $92.7 million, or 9.2%, to $1.095 billion at September 30, 2018 from $1.002 billion at December 31, 2017. The increase in deposits was primarily attributable to increases in retail and wholesale time deposits, coupled with cyclical inflows from municipal customers.

Total shareholders’ equity decreased $2.6 million, or 2.9%, to $86.6 million at September 30, 2018 from $89.2 million at December 31, 2017. The reduction in capital resulted primarily from a $7.1 million increase in accumulated other comprehensive loss related to depreciation in the fair value of available-for-sale debt securities, net of deferred taxes, and year-to-date dividends declared of $2.0 million. Partially offsetting these decreases was net income of $6.3 million for the nine months ended September 30, 2018. Despite the decrease in capital, FNCB remains well capitalized with total risk-based capital and Tier I leverage ratios of 11.42% and 7.66%, respectively, at September 30, 2018.   

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 the 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 100 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 operates through 16 branch offices located in Lackawanna, Luzerne and Wayne Counties and a limited purpose office in Lehigh County, and remains dedicated to making our 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
[email protected]

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 its reports to shareholders, and in 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,” “would,” “believe,” “anticipate,” “estimate,” “expect,” “intend,” “plan” 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 strength of the United States economy in general and the strength of the local economies in our markets; the effects of, and changes in trade, monetary, fiscal and tax policies and laws, including interest rate policies of the Board of Governors of the Federal Reserve System; inflation, interest rate, market and monetary fluctuations; the timely development of and acceptance of new products and services; the ability of FNCB to compete with other institutions for business, including for deposit and loan growth: the composition and concentrations of FNCB’s lending risk and the adequacy of FNCB’s reserves to manage those risks; the valuation of FNCB’s investment securities; the ability of FNCB to pay dividends or repurchase common shares; the ability of FNCB to retain key personnel; the impact of any pending or threatened litigation against FNCB; the marketability of shares of FNCB stock and fluctuations in the value of FNCB’s share price; the effectiveness of FNCB’s system of internal controls; the ability of FNCB to attract additional capital investment; the impact of changes in financial services’ laws and regulations (including laws concerning capital adequacy, taxes, banking, securities and insurance); the ability of FNCB to identify future acquisition targets, complete acquisitions and integrate new teams into FNCB’s operations; the impact of technological changes and security risks upon our information technology systems; changes in consumer spending and saving habits; the nature, extent, and timing of governmental actions and reforms, 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 report.

Readers should carefully review the risk factors described in the Annual Report and other documents that FNCB periodically files with the Securities and Exchange Commission, including its Form 10-K for the year ended December 31, 2017.

[FNCB provides tabular information as follows]

FNCB Bancorp, Inc.
Selected Financial Data
                       
      Sept 30,   Jun 30,   Mar 31,   Dec 31,   Sept 30,
        2018       2018       2018       2017       2017  
Per share data:                    
Net income (loss) (fully diluted)   $   0.11     $   0.14     $   0.12     $   (0.36 )   $   0.14  
Cash dividends declared   $   0.04     $   0.04     $   0.04     $   0.04     $   0.03  
Book value   $   5.15     $   5.18     $   5.17     $   5.32     $   5.82  
Tangible book value   $   5.15     $   5.18     $   5.17     $   5.32     $   5.82  
Market value:                    
  High   $   12.00     $   10.00     $   9.98     $   7.99     $   8.00  
  Low   $   7.97     $   8.01     $   7.01     $   6.54     $   7.41  
  Close   $   9.77     $   8.88     $   9.24     $   7.30     $   7.57  
Common shares outstanding       16,819,471         16,817,097         16,766,600         16,757,963         16,757,963  
                       
Selected ratios:                    
Annualized return on average assets     0.59 %     0.79 %     0.70 %     (2.09 %)     0.80 %
Annualized return on average shareholders’ equity     8.41 %     11.23 %     9.44 %     (24.98 %)     9.27 %
Efficiency ratio     67.11 %     63.94 %     68.78 %     73.42 %     65.09 %
Tier I leverage ratio     7.66 %     7.69 %     7.80 %     7.74 %     8.10 %
Total risk-based capital to risk-adjusted assets     11.42 %     11.31 %     11.70 %     12.08 %     12.17 %
Average shareholders’ equity to average total assets     7.00 %     7.05 %     7.38 %     8.35 %     8.61 %
Yield on earning assets (FTE)     4.04 %     3.96 %     3.83 %     3.84 %     3.77 %
Cost of funds     1.00 %     0.84 %     0.69 %     0.59 %     0.59 %
Net interest spread (FTE)     3.04 %     3.12 %     3.15 %     3.25 %     3.18 %
Net interest margin (FTE)     3.21 %     3.26 %     3.26 %     3.35 %     3.27 %
Total delinquent loans/total loans     0.90 %     0.71 %     0.73 %     0.72 %     0.81 %
Allowance for loan and lease losses/total loans     1.14 %     1.11 %     1.18 %     1.17 %     1.17 %
Non-performing loans/total loans     0.51 %     0.41 %     0.30 %     0.34 %     0.35 %
Annualized net charge-offs/average loans     0.36 %     0.47 %     0.10 %     0.06 %     0.08 %
                       

FNCB Bancorp, Inc.
Year-to-Date Consolidated Statements of Income
 
          Nine Months Ended
          September 30,
(in thousands, except share data)     2018       2017
Interest income        
Interest and fees on loans   $   26,820     $   21,748
Interest and dividends on securities        
  U.S. government agencies       2,675         2,566
  State and political subdivisions, tax-free       95         42
  State and political subdivisions, taxable       3,079         2,816
  Other securities       646         409
    Total interest and dividends on securities       6,495         5,833
Interest on interest-bearing deposits in other banks       52         146
      Total interest income       33,367         27,727
Interest expense        
Interest on deposits       3,760         2,513
Interest on borrowed funds        
  Interest on Federal Home Loan Bank of Pittsburgh advances       1,774         424
  Interest on subordinated debentures       171         323
  Interest on junior subordinated debentures       292         219
    Total interest on borrowed funds       2,237         966
      Total interest expense       5,997         3,479
Net interest income before provision for loan and lease losses       27,370         24,248
Provision for loan and lease losses       2,749         486
Net interest income after provision for loan and lease losses       24,621         23,762
Non-interest income        
Deposit service charges       2,160         2,147
Net (loss) gain on the sale of securities       (4 )       1,338
Net loss on equity securities       (34 )       –
Net gain on the sale of mortgage loans held for sale       171         241
Net gain on the sale of SBA guaranteed loans       322         79
Net gain on the sale of other repossessed assets       –         47
Net gain on the sale of other real estate owned       31         57
Loan-related fees       245         252
Income from bank-owned life insurance       413         399
Other           1,064         747
      Total non-interest income       4,368         5,307
Non-interest expense        
Salaries and employee benefits       10,732         10,069
Occupancy expense       1,629         1,567
Equipment expense       936         1,380
Data processing expense       2,040         1,502
Regulatory assessments       648         497
Bank shares tax       767         762
Professional fees       733         662
Insurance expense       398         385
Other operating expenses       3,503         3,441
      Total non-interest expense       21,386         20,265
Income before income taxes       7,603         8,804
Income tax expense       1,322         2,543
Net income     $   6,281     $   6,261
               
Income per share        
  Basic     $   0.37     $   0.37
  Diluted     $   0.37     $   0.37
               
Cash dividends declared per common  share    $   0.12     $   0.09
Weighted average number of shares outstanding:        
  Basic       16,791,815       16,711,172
  Diluted       16,813,948       16,728,852
               

FNCB Bancorp, Inc.
Quarter-to-Date Consolidated Statements of Income (Loss)
                           
          Three Months Ended
          Sept 30,   Jun 30,   Mar 31,   Dec 31,   Sept 30,
(in thousands, except share data)     2018       2018       2018       2017       2017
Interest income                    
Interest and fees on loans   $   9,501     $   9,031     $   8,288     $   8,073     $   7,576
Interest and dividends on securities                    
  U.S. government agencies       899         886         890         860         816
  State and political subdivisions, tax-free       37         38         20         7         7
  State and political subdivisions, taxable       1,028         1,027         1,024         993         1,016
  Other securities       211         240         195         154         166
    Total interest and dividends on securities       2,175         2,191         2,129         2,014         2,005
Interest on interest-bearing deposits in other banks       17         12         23         34         24
      Total interest income       11,693         11,234         10,440         10,121         9,605
Interest expense                    
Interest on deposits       1,559         1,134         1,067         1,008         943
Interest on borrowed funds                    
  Interest on Federal Home Loan Bank of Pittsburgh advances       715         707         352         175         163
  Interest on subordinated debentures       58         57         56         57         97
  Interest on junior subordinated debentures       106         99         87         81         77
    Total interest on borrowed funds       879         863         495         313         337
      Total interest expense       2,438         1,997         1,562         1,321         1,280
Net interest income before provision for loan and lease losses       9,255         9,237         8,878         8,800         8,325
Provision for loan and lease losses       1,149         880         720         283         543
Net interest income after provision for loan and lease losses       8,106         8,357         8,158         8,517         7,782
Non-interest income                    
Deposit service charges       711         747         702         756         728
Net (loss) gain on the sale of securities       –         (4 )       –         259         367
Net loss on equity securities       (8 )       (7 )       (19 )       –         –
Net gain on the sale of mortgage loans held for sale       71         51         49         63         106
Net gain on the sale of SBA guaranteed loans       –         71         251         –         23
Net (loss) gain on the sale of other real estate owned       –         (7 )       37         22         –
Loan-related fees       85         76         84         132         96
Income from bank-owned life insurance       141         138         134         128         129
Other           320         464         281         558         265
      Total non-interest income       1,320         1,529         1,519         1,918         1,714
Non-interest expense                    
Salaries and employee benefits       3,581         3,485         3,666         4,092         3,247
Occupancy expense       500         526         603         538         394
Equipment expense       299         323         314         435         474
Data processing expense       745         647         648         521         506
Regulatory assessments       251         196         201         189         160
Bank shares tax       278         222         267         38         252
Professional fees       241         196         296         294         206
Insurance expense       130         133         135         134         132
Other operating expenses       1,163         1,238         1,102         1,563         1,026
      Total non-interest expense       7,188         6,966         7,232         7,804         6,397
Income before income taxes       2,238         2,920         2,445         2,631         3,099
Income tax expense       388         508         426         8,745         827
Net income (loss)   $   1,850     $   2,412     $   2,019     $   (6,114 )   $   2,272
                           
Income (loss) per share                    
  Basic     $   0.11     $   0.14     $   0.12     $   (0.36 )   $   0.14
  Diluted     $   0.11     $   0.14     $   0.12     $   (0.36 )   $   0.14
                           
Cash dividends declared per common  share    $   0.04     $   0.04     $   0.04     $   0.04     $   0.03
Weighted average number of shares outstanding:                    
  Basic       16,818,625       16,792,812       16,763,401       16,757,963       16,757,963
  Diluted       16,838,547       16,819,286       16,789,336       16,774,209       16,777,671
                           

FNCB Bancorp, Inc.
Consolidated Balance Sheets
                           
          Sept 30,   Jun 30,   Mar 31,   Dec 31,   Sept 30,
(in thousands)     2018       2018       2018       2017       2017  
Assets                        
Cash and cash equivalents:                    
  Cash and due from banks   $   23,051     $   16,500     $   12,323     $   22,755     $   24,881  
  Interest-bearing deposits in other banks       7,246         4,624         1,873         14,991         18,929  
    Total cash and cash equivalents       30,297         21,124         14,196         37,746         43,810  
Securities available for sale, at fair value       288,780         290,863         298,314         289,459         281,102  
Equity securities, at fair value       884         892         899         918         925  
Restricted stock, at cost       3,333         7,964         5,703         2,763         2,460  
Loans held for sale       938         629         366         1,095         147  
Loans, net of net deferred costs and unearned income       864,316         855,391         808,202         770,643         759,489  
Allowance for loan and lease losses       (9,827 )       (9,459 )       (9,562 )       (9,034 )       (8,862 )
Net loans         854,489         845,932         798,640         761,609         750,627  
Bank premises and equipment, net       13,895         13,900         12,870         10,388         10,482  
Accrued interest receivable       4,061         3,654         3,430         3,234         3,203  
Bank-owned life insurance       30,873         30,732         30,594         30,460         30,332  
Other real estate owned       715         787         579         1,023         1,088  
Other assets         22,857         22,810         23,669         23,610         32,935  
      Total assets   $   1,251,122     $   1,239,287     $   1,189,260     $   1,162,305     $   1,157,111  
                           
Liabilities                      
Deposits:                      
  Demand (non-interest-bearing)   $   166,967     $   177,388     $   172,896     $   176,325     $   162,426  
  Interest-bearing       928,154         777,855         782,357         826,123         820,786  
    Total deposits       1,095,121         955,243         955,253         1,002,448         983,212  
Borrowed funds:                    
  Federal Home Loan Bank of Pittsburgh advances       46,490         174,251         121,485         44,968         45,350  
  Subordinated debentures       5,000         5,000         5,000         5,000         5,000  
  Junior subordinated debentures       10,310         10,310         10,310         10,310         10,310  
    Total borrowed funds       61,800         189,561         136,795         60,278         60,660  
Accrued interest payable       318         331         284         241         244  
Other liabilities       7,306         7,027         10,190         10,147         15,513  
    Total liabilities       1,164,545         1,152,162         1,102,522         1,073,114         1,059,629  
                           
Shareholders’ equity                    
Preferred stock       –         –         –         –         –  
Common stock       21,024         21,021         20,958         20,947         20,947  
Additional paid-in capital       63,469         63,374         63,335         63,210         63,143  
Retained earnings       10,965         9,792         8,057         6,779         13,282  
Accumulated other comprehensive (loss) income       (8,881 )       (7,062 )       (5,612 )       (1,745 )       110  
    Total shareholders’ equity       86,577         87,125         86,738         89,191         97,482  
      Total liabilities and shareholders’ equity   $   1,251,122     $   1,239,287     $   1,189,260     $   1,162,305     $   1,157,111  
                           

FNCB Bancorp, Inc.
Summary Tax-equivalent Net Interest Income
                           
          Three Months Ended
          Sept 30,   Jun 30,   Mar 31,   Dec 31,   Sept 30,
(dollars in thousands)     2018       2018       2018       2017       2017  
Interest income                    
Loans:                        
Loans – taxable   $   9,059     $   8,631     $   7,934     $   7,736     $   7,266  
Loans – tax-free       559         506         448         511         470  
  Total loans       9,618         9,137         8,382         8,247         7,736  
Securities:                      
Securities, taxable       2,138         2,153         2,109         2,007         1,998  
Securities, tax-free       47         48         25         11         11  
  Total interest and dividends on securities       2,185         2,201         2,134         2,018         2,009  
Interest-bearing deposits in other banks       17         12         23         34         24  
      Total interest income       11,820         11,350         10,539         10,299         9,769  
Interest expense                    
Deposits         1,559         1,134         1,067         1,008         943  
Borrowed funds       879         863         495         313         337  
              2,438         1,997         1,562         1,321         1,280  
      Net interest income   $   9,382     $   9,353     $   8,977     $   8,978     $   8,489  
                           
Average balances                    
Earning assets:                    
Loans:                        
Loans – taxable   $   803,314     $   784,427     $   748,375     $   725,988     $   700,729  
Loans – tax-free       55,848         49,855         44,383         41,548         38,109  
  Total loans       859,162         834,282         792,758         767,536         738,838  
Securities:                      
Securities, taxable       303,037         305,627         301,032         292,307         290,348  
Securities, tax-free       4,664         4,677         2,325         600         600  
  Total securities       307,701         310,304         303,357         292,907         290,948  
Interest-bearing deposits in other banks       3,735         2,629          3,825         12,215         7,499  
      Total interest-earning assets       1,170,598         1,147,215         1,099,940         1,072,658         1,037,285  
Non-earning assets       75,518         74,188         76,114         89,801         92,603  
      Total assets   $   1,246,116     $   1,221,403     $   1,176,054     $   1,162,459     $   1,129,888  
Interest-bearing liabilities:                    
Deposits     $   827,570     $   790,233     $   806,494     $   824,680     $   792,649  
Borrowed funds       149,682         163,547         102,676         67,476         73,168  
      Total interest-bearing liabilities       977,252         953,780         909,170         892,156         865,817  
Demand deposits       173,616         173,037         169,450         162,135         156,483  
Other liabilities       7,983         8,444         10,663         11,079         10,325  
Shareholders’ equity       87,265         86,142         86,771         97,089         97,263  
      Total liabilities and shareholders’ equity   $   1,246,116     $   1,221,403     $   1,176,054     $   1,162,459     $   1,129,888  
                           
Yield/Cost                      
Earning assets:                    
Loans:                        
Interest and fees on loans – taxable     4.51 %     4.40 %     4.24 %     4.26 %     4.15 %
Interest and fees on loans – tax-free     4.01 %     4.06 %     4.04 %     4.92 %     4.93 %
  Total loans     4.48 %     4.38 %     4.23 %     4.30 %     4.19 %
Securities:                      
Securities, taxable     2.82 %     2.82 %     2.80 %     2.75 %     2.75 %
Securities, tax-free     4.03 %     4.11 %     4.30 %     7.33 %     7.33 %
  Total securities     2.84 %     2.84 %     2.81 %     2.76 %     2.76 %
Interest-bearing deposits in other banks     1.82 %     1.83 %     2.41 %     1.11 %     1.28 %
      Total earning assets     4.04 %     3.96 %     3.83 %     3.84 %     3.77 %
Interest-bearing liabilities:                    
Interest on deposits     0.75 %     0.57 %     0.53 %     0.49 %     0.48 %
Interest on borrowed funds     2.35 %     2.11 %     1.93 %     1.86 %     1.84 %
      Total interest-bearing liabilities     1.00 %     0.84 %     0.69 %     0.59 %     0.59 %
      Net interest spread     3.04 %     3.12 %     3.15 %     3.25 %     3.18 %
      Net interest margin     3.21 %     3.26 %     3.26 %     3.35 %     3.27 %
                           

FNCB Bancorp, Inc.
Asset Quality Data
                         
        Sept 30,   Jun 30,   Mar 31,   Dec 31,   Sept 30,
(in thousands)     2018     2018     2018     2017     2017
At period end                    
Non-accrual loans, including non-accruing troubled debt restructured loans (TDRs)   $   4,391   $   3,469   $   2,403   $   2,578   $   2,642
Loans past due 90 days or more and still accruing       –       –       –       –       –
  Total non-performing loans       4,391       3,469       2,403       2,578       2,642
Other real estate owned (OREO)       715       787       579       1,023       1,088
Other non-performing assets       1,900       1,900       1,900       1,900       1,900
  Total non-performing assets   $   7,006   $   6,156   $   4,882   $   5,501   $   5,630
                         
Accruing TDRs   $   8,515   $   8,741   $   8,797   $   9,299   $   9,283
                         
                         
For the three months ended                    
Allowance for loan and lease losses                    
Beginning balance   $   9,459   $   9,562   $   9,034   $   8,862   $   8,469
Loans charged-off       1,037       1,310       400       310       377
Recoveries of charged-off loans       256       327       208       199       227
Net charge-offs       781       983       192       111       150
Provision for loan and lease losses       1,149       880       720       283       543
Ending balance   $   9,827   $   9,459   $   9,562   $   9,034   $   8,862