DUNMORE, Pa., Jan. 24, 2020 (GLOBE NEWSWIRE) -- FNCB Bancorp, Inc. (NASDAQ: FNCB), the parent company of Dunmore-based FNCB Bank (the “Bank”), today reported net income for 2019 of $11.1 million, or $0.56 per basic and diluted share, compared to net income of $13.3 million, or $0.79 per basic and diluted share, for 2018. The $2.3 million, or 17.0%, earnings reduction was largely due to a $4.2 million decrease in non-interest revenue, partially offset by decreases in the provision for loan and lease losses and income tax expense of $1.8 million and $0.7 million, respectively. Net income for the fourth quarter of 2019 was $3.5 million, a decrease of $3.6 million, or 50.7%, compared to $7.1 million for the same quarter of 2018, which primarily reflected a $4.7 million decrease in non-interest income, partially offset by a $1.0 million decrease in income tax expense. Included in non-interest income for the three months and year ended December 31, 2018 was $6.0 million in non-recurring income related to an insurance recovery.

Return on average assets and return on average shareholders’ equity were 0.92% and 8.88%, respectively, in 2019, compared to 1.09% and 15.38%, respectively in 2018. For the three months ended December 31, 2019, annualized return on average assets and annualized return on average shareholders’ equity were 1.15% and 10.43%, respectively. Comparatively, annualized return on average assets was 2.26% and annualized return on average shareholders’ equity was 32.26% for the three months ended December 31, 2018.

Dividends declared and paid in 2019 totaled $0.20 per share, an increase of $0.03 per share, or 17.6%, compared to $0.17 per share for 2018. Total dividends declared and paid for 2019 equated to a dividend yield of approximately 2.37% based on the closing stock price of $8.45 per share at December 31, 2019.

2019 Highlights:

• Successfully completed a $23.0 million common stock offering in the first quarter of 2019;  
• Joined the Russell 3000® Index effective July 1, 2019;  
• Celebrated the grand opening of FNCB Bank's 17th community office located in Mountain Top, Luzerne County, Pennsylvania in the second quarter of 2019;   
• Completed the relocation and new construction of FNCB Bank's Main Office to a brand new, state-of-the-art facility with a grand re-opening in the fourth quarter of 2019;  
• Total risk-based capital and Tier I Leverage ratios improved to 16.11% and 11.37% at December 31, 2019 compared to 12.69% and 8.50% at December 31, 2018, respectively;  
• Yield on earning assets (FTE) for the fourth quarter increased 10 basis points year over year to 4.16% in 2019 compared to 4.06% in 2018;
• Cost of funds for the fourth quarter of 2019 decreased 6 basis points to 0.98% from 1.04% for the fourth quarter of 2018;
• Net interest margin (FTE) improved 21 basis points to 3.38% from 3.17% comparing the fourth quarters for 2019 and 2018, respectively; and    
• Dividend payout ratio reached 36.4% in 2019.

“2019 was a successful year for our Company, and we would like to thank our entire FNCB team for all their hard work," stated Gerard A. Champi, President and Chief Executive Officer. "We were able to take advantage of changes in market conditions to re-position and create efficiency within our balance sheet by trading off lower-yielding assets for higher-yielding, higher-quality earning assets, while reducing our reliance on more expensive wholesale funding. This strategy has translated into consistent increases in earning asset yields, reductions in funding costs and improvement in our net interest margin throughout 2019," continued Champi. "We believe we are well-positioned to continue to create value within our franchise as we move forward into 2020," Champi concluded.  

Summary Results 

For the three months ended December 31, 2019, tax-equivalent net interest income increased $0.1 million, or 1.6% to $9.4 million from $9.3 million for the same three months of 2018. Additionally, FNCB’s tax-equivalent net interest margin for the fourth quarter of 2019 improved 21 basis points to 3.38% compared to 3.17% for the same quarter of 2018. The margin improvement primarily reflected an increase in the tax-equivalent yield on average earning assets of 10 basis points to 4.16% for the fourth quarter of 2019 from 4.06% for the same quarter of 2018, coupled with a 6 basis-point decrease in the cost of funds to 0.98% for the three months ended December 31, 2019 from 1.04% for the same three months of 2018. For the year ended December 31, 2019, tax-equivalent net interest income decreased $0.3 million, or 0.8%, to $36.7 million compared to $37.0 million for the year ended December 31, 2018. The modest decrease in net interest income for the year-to-date period was largely due to higher funding costs, partially offset by an increase in the tax-equivalent yield on average earning assets. For the year ended December 31, 2019, the cost of funds increased 18 basis points to 1.08% from 0.90% for the year ended December 31, 2018. Conversely, the tax-equivalent earning-asset yields improved 18 basis points to 4.15% in 2019 compared to 3.97% in 2018. The tax-equivalent net interest margin improved 5 basis points to 3.27% in 2019 from 3.22% in 2018. Additionally, the net interest margin for the fourth quarter of 2019 improved 6 basis points to 3.38% from 3.32% for the third quarter of 2019. For purposes of presenting net interest income, earning-asset yields and net interest margin information on a tax-equivalent basis, tax-free interest income is adjusted using the statutory federal corporate income tax rate of 21.0% for 2019 and 2018.

For the quarter ended December 31, 2019, non-interest income amounted to $2.7 million, a decrease of $4.7 million, or 63.7%, compared to $7.4 million for the same period of 2018. Non-interest income totaled $7.6 million for the year ended December 31, 2019, a decrease of $4.2 million, or 35.4%, compared to $11.8 million for the year ended December 31, 2018. The decrease in non-interest income for the fourth quarter and year-to-date periods was primarily due to an insurance recovery, net of related expenses, of $6.0 million received in the fourth quarter of 2018. Included in non-interest income for the three months and year ended December 31, 2019 were net gains on the sale of available-for-sale securities of $0.5 million and $1.2 million, respectively. Comparatively, there were no net gains on the sale of available-for-sale securities for the three months ended December 31, 2018. For the year ended December 31, 2018, FNCB realized net losses on the sale of available-for-sale securities of $4 thousand.

For the three months ended December 31, 2019, non-interest expense decreased by $0.1 million, or 1.7%, to $7.8 million from $7.9 million for the comparable three months of 2018. Non-interest expense for all of 2019 totaled $29.7 million, an increase of $0.4 million, or 1.2%, from $29.3 million for 2018. The increase in non-interest expense resulted largely from higher salaries and employee benefits expense related to staffing additions and annual merit increases, coupled with higher data processing costs and other expenses, which were partially offset by decreases in regulatory assessments, other losses and bank shares tax. 

Asset Quality

Total non-performing loans increased $4.4 million to $9.1 million, or 1.10% of total loans, at December 31, 2019 from $4.7 million, or 0.56% of total loans, at December 31, 2018. FNCB’s loan delinquency rate (total delinquent loans as a percentage of total loans) was 1.46% at December 31, 2019 compared to 0.93% at the end of 2018. The increase in non-performing loans and loan delinquencies primarily reflected several large commercial relationships that were placed on non-accrual status during 2019. The net loans charged off, as a percentage of average loans, was 0.16% for 2019 compared to 0.25% for 2018. The allowance for loan and lease losses as a percentage of gross loans was 1.08% and 1.13% at December 31, 2019 and 2018, respectively.

Financial Condition

Total assets decreased $34.2 million, or 2.8%, to $1.204 billion at December 31, 2019, from $1.238 billion at December 31, 2018.  The change in the balance sheet primarily reflected decreases in available-for-sale debt securities, loans, net of net deferred loan costs and unearned income, and cash and cash equivalents. Available-for-sale debt securities decreased $23.2 million, or 7.8%, to $272.8 million at December 31, 2019 from $296.0 million at December 31, 2018. Proceeds from the sale of available-for-sale debt securities, not re-invested back into the portfolio, were used to supplement deposit gathering. Loans, net of net deferred loan costs and unearned income, contracted $10.6 million, or 1.3%, to $828.5 million at December 31, 2019, from $839.1 million at December 31, 2018, which primarily reflected a planned reduction in the indirect automobile loan portfolio. Total deposits decreased $93.9 million, or 8.6%, to $1.002 billion at December 31, 2019 from $1.096 billion at December 31, 2018. Interest-bearing deposits decreased $116.8 million, or 12.4%, to $822.2 million at December 31, 2019 from $939.0 million at December 31, 2018, which largely reflected a $75.8 million reduction in wholesale time deposits and the runoff of retail certificates of deposit. Partially offsetting the reduction in interest-bearing deposits was a $22.9 million, or 14.6%, increase in non-interest-bearing demand deposits to $179.5 million at December 31, 2019 from $156.6 million at December 31, 2018. Total borrowed funds increased $23.0 million to $57.2 million at December 31, 2019 from $34.2 million at December 31, 2018. 

Total shareholders’ equity increased $36.4 million, or 37.4%, to $133.6 million at December 31, 2019 from $97.2 million at December 31, 2018. FNCB successfully completed a public offering of its common stock, which resulted in a net increase to capital after offering expenses of $21.3 million in the first quarter of 2019. Also factoring into the capital improvement was net income for 2019 of $11.1 million and a $7.6 million positive change in other comprehensive income related entirely to appreciation in the fair value of available-for-sale debt securities, net of deferred taxes, partially offset by dividends declared of $4.0 million. FNCB’s total risk-based capital and Tier I leverage ratios improved to 16.11% and 11.37%, respectively, at December 31, 2019 compared to 12.69% and 8.50%, respectively, at December 31, 2018. Additionally, tangible book value improved $0.84, or 14.5%, to $6.62 per share at December 31, 2019 from $5.78 per share at December 31, 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 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 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 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 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 Securities and Exchange Commission, including its Form 10-K for the year ended December 31, 2018.

FNCB Bancorp, Inc.
Selected Financial Data
		Dec 31,				Sept 30,				Jun 30,				Mar 31,				Dec 31,
		2019				2019				2019				2019				2018
Per share data:
Net income (fully diluted)		$	0.17			$	0.12			$	0.13			$	0.14			$	0.42
Cash dividends declared		$	0.05			$	0.05			$	0.05			$	0.05			$	0.05
Book value		$	6.62			$	6.57			$	6.44			$	6.16			$	5.78
Tangible book value		$	6.62			$	6.57			$	6.44			$	6.16			$	5.78
Market value:
High		$	8.86			$	9.41			$	8.12			$	10.68			$	10.39
Low		$	7.03			$	7.03			$	7.16			$	7.14			$	8.21
Close		$	8.45			$	7.81			$	7.74			$	7.70			$	8.44
Common shares outstanding			20,171,408				20,169,492				20,148,017				20,108,560				16,821,371
Selected ratios:
Annualized return on average assets			1.15	%			0.80	%			0.85	%			0.86	%			2.26	%
Annualized return on average shareholders' equity			10.43	%			7.30	%			8.19	%			9.70	%			32.26	%
Efficiency ratio			67.35	%			69.20	%			68.12	%			71.24	%			47.59	%
Tier I leverage ratio			11.37	%			11.27	%			11.02	%			10.45	%			8.50	%
Total risk-based capital to risk-adjusted assets			16.11	%			15.72	%			15.71	%			15.06	%			12.69	%
Average shareholders' equity to average total assets			11.01	%			10.96	%			10.41	%			8.89	%			7.00	%
Yield on earning assets (FTE)			4.16	%			4.22	%			4.15	%			4.06	%			4.06	%
Cost of funds			0.98	%			1.11	%			1.11	%			1.11	%			1.04	%
Net interest spread (FTE)			3.18	%			3.11	%			3.04	%			2.95	%			3.02	%
Net interest margin (FTE)			3.38	%			3.32	%			3.25	%			3.14	%			3.17	%
Total delinquent loans/total loans			1.46	%			1.16	%			0.99	%			1.28	%			0.93	%
Allowance for loan and lease losses/total loans			1.08	%			1.11	%			1.10	%			1.10	%			1.13	%
Non-performing loans/total loans			1.10	%			0.73	%			0.65	%			0.74	%			0.56	%
Annualized net charge-offs/average loans			0.16	%			0.13	%			0.32	%			0.05	%			0.05	%

FNCB Bancorp, Inc.
Year-to-Date Consolidated Statements of Income
		Year Ended
		December 31,
(in thousands, except share data)		2019				2018
Interest income
Interest and fees on loans		$	37,818			$	36,381
Interest and dividends on securities
U.S. government agencies			3,545				3,565
State and political subdivisions, tax-free			149				133
State and political subdivisions, taxable			3,263				4,105
Other securities			1,093				813
Total interest and dividends on securities			8,050				8,616
Interest on interest-bearing deposits in other banks			188				88
Total interest income			46,056				45,085
Interest expense
Interest on deposits			8,101				5,925
Interest on borrowed funds
Interest on Federal Home Loan Bank of Pittsburgh advances			1,241				2,025
Interest on subordinated debentures			24				228
Interest on junior subordinated debentures			430				400
Total interest on borrowed funds			1,695				2,653
Total interest expense			9,796				8,578
Net interest income before provision for loan and lease losses			36,260				36,507
Provision for loan and lease losses			797				2,550
Net interest income after provision for loan and lease losses			35,463				33,957
Non-interest income
Deposit service charges			3,035				2,885
Net gain (loss) on the sale of securities			1,227				(4	)
Net gain (loss) on equity securities			29				(27	)
Net gain on the sale of mortgage loans held for sale			253				210
Net gain on the sale of SBA guaranteed loans			-				322
Net gain on the sale of other real estate owned			20				31
Loan-related fees			378				390
Income from bank-owned life insurance			520				555
Insurance recovery			-				6,027
Other			2,158				1,401
Total non-interest income			7,620				11,790
Non-interest expense
Salaries and employee benefits			15,518				14,780
Occupancy expense			1,948				2,191
Equipment expense			1,319				1,254
Data processing expense			3,113				2,799
Regulatory assessments			306				861
Bank shares tax			566				636
Professional fees			1,056				1,028
Other operating expenses			5,856				5,778
Total non-interest expense			29,682				29,327
Income before income taxes			13,401				16,420
Income tax expense			2,326				3,071
Net income		$	11,075			$	13,349
Income per share
Basic		$	0.56			$	0.79
Diluted		$	0.56			$	0.79
Cash dividends declared per common share		$	0.20			$	0.17
Weighted average number of shares outstanding:
Basic			19,802,095				16,799,004
Diluted			19,807,592				16,820,753

FNCB Bancorp, Inc.
Quarter-to-Date Consolidated Statements of Income
		Three Months Ended
		Dec 31,				Sept 30,				Jun 30,				Mar 31,				Dec 31,
(in thousands, except share data)		2019				2019				2019				2019				2018
Interest income
Interest and fees on loans		$	9,505			$	9,488			$	9,418			$	9,407			$	9,561
Interest and dividends on securities
U.S. government agencies			822				924				906				893				890
State and political subdivisions, tax-free			37				37				38				37				38
State and political subdivisions, taxable			718				713				811				1,021				1,026
Other securities			364				314				210				205				167
Total interest and dividends on securities			1,941				1,988				1,965				2,156				2,121
Interest on interest-bearing deposits in other banks			33				30				79				46				36
Total interest income			11,479				11,506				11,462				11,609				11,718
Interest expense
Interest on deposits			1,818				1,901				2,144				2,238				2,165
Interest on borrowed funds
Interest on Federal Home Loan Bank of Pittsburgh advances			253				448				253				287				251
Interest on subordinated debentures			0				0				0				24				57
Interest on junior subordinated debentures			99				106				111				114				108
Total interest on borrowed funds			352				554				364				425				416
Total interest expense			2,170				2,455				2,508				2,663				2,581
Net interest income before (credit) provision for loan and lease losses			9,309				9,051				8,954				8,946				9,137
(Credit) Provision for loan and lease losses			(33	)			637				347				(154	)			(199	)
Net interest income after (credit) provision for loan and lease losses			9,342				8,414				8,607				9,100				9,336
Non-interest income
Deposit service charges			832				797				721				685				725
Net gain on the sale of securities			525				379				163				160				-
Net (loss) gain on equity securities			(2	)			5				14				12				7
Net gain on the sale of mortgage loans held for sale			55				69				73				56				39
Net gain on the sale of other real estate owned			-				11				9				-				-
Loan-related fees			147				80				72				79				145
Income from bank-owned life insurance			126				134				129				131				142
Insurance recovery			-				-				-				-				6,027
Other			1,013				356				397				392				337
Total non-interest income			2,696				1,831				1,578				1,515				7,422
Non-interest expense
Salaries and employee benefits			3,884				3,911				3,824				3,899				4,048
Occupancy expense			494				460				444				550				562
Equipment expense			351				332				329				307				318
Data processing expense			801				742				789				781				759
Regulatory assessments			41				21				76				168				213
Bank shares tax			(194	)			205				277				278				(131	)
Professional fees			332				189				203				332				295
Other operating expenses			2,097				1,469				1,180				1,110				1,877
Total non-interest expense			7,806				7,329				7,122				7,425				7,941
Income before income taxes			4,232				2,916				3,063				3,190				8,817
Income tax expense			744				513				514				555				1,749
Net income		$	3,488			$	2,403			$	2,549			$	2,635			$	7,068
Income per share
Basic		$	0.17			$	0.12			$	0.13			$	0.14			$	0.42
Diluted		$	0.17			$	0.12			$	0.13			$	0.14			$	0.42
Cash dividends declared per common share		$	0.05			$	0.05			$	0.05			$	0.05			$	0.05
Weighted average number of shares outstanding:
Basic			20,170,241				20,168,529				20,129,150				18,720,502				16,820,337
Diluted			20,175,758				20,172,282				20,133,850				18,733,652				16,840,933

FNCB Bancorp, Inc.
Consolidated Balance Sheets
		Dec 31,				Sept 30,				Jun 30,				Mar 31,				Dec 31,
(in thousands)		2019				2019				2019				2019				2018
Assets
Cash and cash equivalents:
Cash and due from banks		$	22,861			$	30,900			$	24,277			$	25,683			$	26,673
Interest-bearing deposits in other banks			11,704				6,611				5,627				7,062				9,808
Total cash and cash equivalents			34,565				37,511				29,904				32,745				36,481
Available-for-sale debt securities, at fair value			272,839				254,666				285,855				274,114				296,032
Equity securities, at fair value			920				922				917				904				891
Restricted stock, at cost			3,804				4,194				4,618				3,120				3,123
Loans held for sale			1,061				1,140				419				609				820
Loans, net of net deferred costs and unearned income			828,479				836,877				814,420				838,864				839,100
Allowance for loan and lease losses			(8,950	)			(9,315	)			(8,945	)			(9,253	)			(9,519	)
Net loans			819,529				827,562				805,475				829,611				829,581
Bank premises and equipment, net			17,518				17,274				15,923				14,991				14,425
Accrued interest receivable			3,234				3,038				3,640				3,706				3,614
Bank-owned life insurance			31,230				31,104				31,275				31,146				31,015
Other real estate owned			289				412				560				919				919
Other assets			18,552				19,367				20,208				22,526				20,831
Total assets		$	1,203,541			$	1,197,190			$	1,198,794			$	1,214,451			$	1,237,732
Liabilities
Deposits:
Demand (non-interest-bearing)		$	179,465			$	179,025			$	157,856			$	157,073			$	156,600
Interest-bearing			822,244				785,035				803,208				883,017				939,029
Total deposits			1,001,709				964,060				961,064				1,040,090				1,095,629
Borrowed funds:
Federal Home Loan Bank of Pittsburgh advances			46,909				79,458				87,223				28,988				18,930
Subordinated debentures			-				-				-				-				5,000
Junior subordinated debentures			10,310				10,310				10,310				10,310				10,310
Total borrowed funds			57,219				89,768				97,533				39,298				34,240
Accrued interest payable			258				401				389				339				338
Other liabilities			10,748				10,394				10,102				10,942				10,306
Total liabilities			1,069,934				1,064,623				1,069,088				1,090,669				1,140,513
Shareholders' equity
Preferred stock			-				-				-				-				-
Common stock			25,214				25,211				25,184				25,135				21,026
Additional paid-in capital			81,130				81,058				80,864				80,827				63,547
Retained earnings			24,207				21,733				20,345				18,809				17,186
Accumulated other comprehensive income (loss)			3,056				4,565				3,313				(989	)			(4,540	)
Total shareholders' equity			133,607				132,567				129,706				123,782				97,219
Total liabilities and shareholders’ equity		$	1,203,541			$	1,197,190			$	1,198,794			$	1,214,451			$	1,237,732

FNCB Bancorp, Inc.
Summary Tax-equivalent Net Interest Income
		Three Months Ended
		Dec 31,				Sept 30,				Jun 30,				Mar 31,				Dec 31,
(dollars in thousands)		2019				2019				2019				2019				2018
Interest income
Loans:
Loans - taxable		$	9,138			$	9,170			$	9,084			$	8,940			$	9,090
Loans - tax-free			464				403				423				591				596
Total loans			9,602				9,573				9,507				9,531				9,686
Securities:
Securities, taxable			1,904				1,951				1,927				2,119				2,083
Securities, tax-free			47				47				48				47				48
Total interest and dividends on securities			1,951				1,998				1,975				2,166				2,131
Interest-bearing deposits in other banks			33				30				79				46				36
Total interest income			11,586				11,601				11,561				11,743				11,853
Interest expense
Deposits			1,818				1,901				2,144				2,238				2,165
Borrowed funds			352				554				364				425				416
Total interest expense			2,170				2,455				2,508				2,663				2,581
Net interest income		$	9,416			$	9,146			$	9,053			$	9,080			$	9,272
Average balances
Earning assets:
Loans:
Loans - taxable		$	791,577			$	781,963			$	778,540			$	784,359			$	796,886
Loans - tax-free			42,954				37,638				41,436				59,220				58,722
Total loans			834,531				819,601				819,976				843,579				855,608
Securities:
Securities, taxable			258,790				266,653				274,552				299,498				299,981
Securities, tax-free			4,598				4,611				4,624				4,638				4,651
Total securities			263,388				271,264				279,176				304,136				304,632
Interest-bearing deposits in other banks			16,841				10,007				14,420				9,495				8,438
Total interest-earning assets			1,114,760				1,100,872				1,113,572				1,157,210				1,168,678
Non-earning assets			90,245				90,807				85,429				81,868				72,999
Total assets		$	1,205,005			$	1,191,679			$	1,199,001			$	1,239,078			$	1,241,677
Interest-bearing liabilities:
Deposits		$	830,318			$	794,971			$	851,726			$	903,542			$	926,767
Borrowed funds			57,682				85,927				52,313				58,402				62,495
Total interest-bearing liabilities			888,000				880,898				904,039				961,944				989,262
Demand deposits			172,935				169,416				158,413				155,122				157,223
Other liabilities			11,361				10,730				11,698				11,801				8,272
Shareholders' equity			132,709				130,635				124,851				110,211				86,920
Total liabilities and shareholders' equity		$	1,205,005			$	1,191,679			$	1,199,001			$	1,239,078			$	1,241,677
Yield/Cost
Earning assets:
Loans:
Interest and fees on loans - taxable			4.62	%			4.69	%			4.67	%			4.56	%			4.56	%
Interest and fees on loans - tax-free			4.32	%			4.28	%			4.08	%			3.99	%			4.06	%
Total loans			4.60	%			4.67	%			4.64	%			4.52	%			4.53	%
Securities:
Securities, taxable			2.94	%			2.93	%			2.81	%			2.83	%			2.78	%
Securities, tax-free			4.09	%			4.08	%			4.15	%			4.05	%			4.13	%
Total securities			2.96	%			2.95	%			2.83	%			2.85	%			2.80	%
Interest-bearing deposits in other banks			0.78	%			1.20	%			2.19	%			1.94	%			1.71	%
Total earning assets			4.16	%			4.22	%			4.15	%			4.06	%			4.06	%
Interest-bearing liabilities:
Interest on deposits			0.88	%			0.96	%			1.01	%			0.99	%			0.93	%
Interest on borrowed funds			2.44	%			2.58	%			2.78	%			2.91	%			2.66	%
Total interest-bearing liabilities			0.98	%			1.11	%			1.11	%			1.11	%			1.04	%
Net interest spread			3.18	%			3.11	%			3.04	%			2.95	%			3.02	%
Net interest margin			3.38	%			3.32	%			3.25	%			3.14	%			3.17	%

FNCB Bancorp, Inc.
Asset Quality Data
		Dec 31,				Sept 30,				Jun 30,				Mar 31,				Dec 31,
(in thousands)		2019				2019				2019				2019				2018
At period end
Non-accrual loans, including non-accruing troubled debt restructured loans (TDRs)		$	9,084			$	6,119			$	5,302			$	6,175			$	4,696
Loans past due 90 days or more and still accruing			-				-				-				-				-
Total non-performing loans			9,084				6,119				5,302				6,175				4,696
Other real estate owned (OREO)			289				412				560				919				919
Other non-performing assets			1,900				1,900				1,900				1,900				1,900
Total non-performing assets		$	11,273			$	8,431			$	7,762			$	8,994			$	7,515
Accruing TDRs		$	7,745			$	7,828			$	7,897			$	8,215			$	8,457
For the three months ended
Allowance for loan and lease losses
Beginning balance		$	9,315			$	8,945			$	9,253			$	9,519			$	9,827
Loans charged-off			620				417				1,123				454				392
Recoveries of charged-off loans			288				150				468				342				283
Net charge-offs			332				267				655				112				109
(Credit) Provision for loan and lease losses			(33	)			637				347				(154	)			(199	)
Ending balance		$	8,950			$	9,315			$	8,945			$	9,253			$	9,519