FNCB Bancorp, Inc. Reports Third Quarter 2016 Net Income

DUNMORE, Pa., Oct. 28, 2016 (GLOBE NEWSWIRE) -- FNCB Bancorp, Inc. (OTCQX:FNCB), the parent company of Dunmore-based FNCB Bank (the “Bank”), announced net income for the three months ended September 30, 2016 of $2.0 million, or $0.12 per basic and diluted share. Net income for the comparable period of 2015 was $2.3 million, or $0.14 per basic and diluted share. The $0.3 million, or 13.7%, decrease in third quarter earnings primarily reflected increases in income tax expense and non-interest expense, partially mitigated by higher net interest income. Net income for the nine months ended September 30, 2016 was $4.8 million, or $0.29 per basic and diluted share, compared to net income of $6.6 million, or $0.40 per basic and diluted share, for the same period of 2015. Annualized return on average assets was 0.73% and 0.58%, respectively, for the three and nine months ended September 30, 2016, compared to 0.91% and 0.90%, for the respective periods of 2015. Annualized return on average equity was 8.46% and 6.95%, respectively, for the three- and nine-month periods ended September 30, 2016, compared to 16.38% and 15.96%, respectively, for the comparable periods in 2015. FNCB paid holders of its common stock dividends of $0.02 for the third quarter of 2016, totaling $0.06 per share for the year-to-date period of 2016. FNCB did not pay a dividend during the nine months ended September 30, 2015.

Effective October 17, 2016, the corporate name, formerly First National Community Bancorp, Inc., changed to FNCB Bancorp, Inc., following the completion of a charter conversion of FNCB Bank, the Company’s wholly-owned subsidiary, from a national bank to a Pennsylvania state bank.

Performance Highlights:

  • Year-over-year deposit growth of 9.3%;
  • Year-over-year growth in net interest income of $3.0 million, or 15.4%;
  • 7 basis point improvement in tax-equivalent net interest margin comparing the third quarters of 2016 and 2015; and
  • 11.8% decrease in non-performing loans from prior quarter end; 64.1% decrease from one year ago.

“We are pleased with the strong, double-digit growth in net interest income given this very challenging rate environment,” stated Gerard A. Champi, President and Chief Executive Officer. “In addition, through the diligent efforts of our entire banking team, we posted meaningful, organic deposit growth, while maintaining funding costs, during the third quarter of 2016. The launch of our new WOW ME suite of consumer checking and savings products earlier in the year has led to increases in personal demand deposits, while initiatives in our governmental banking, retail and commercial divisions resulted in strong deposit growth in public funds and small business accounts,” concluded Champi.

Summary Results for the Three and Nine Months Ended September 30, 2016

Net interest income before (credit) provision for loan and lease losses was $7.7 million for the third quarter, an increase of $0.5 million compared to $7.2 million for the same quarter of 2015. The 6.9% increase in net interest income reflected strong growth in volume and yields on earning assets aided by stable funding costs. For the year-to-date period, net interest income grew $3.0 million, or 15.4%, to $22.8 million in 2016 from $19.8 million in 2015. The improvement for the year-to-date period resulted primarily from significant growth in earning assets, higher earning asset yields and reduced funding costs. Average earning assets grew $42.3 million, or 4.4%, and $69.9 million, or 7.5%, comparing the quarter and year-to-date periods ended September 30, 2016 and 2015, respectively. Tax-equivalent earning asset yields improved 8 basis points for the third quarter and 7 basis points for the nine months ended September 30, 2016 over the same periods of 2015. FNCB’s cost of funds increased 1 basis point comparing the third quarters of 2016 and 2015. However, comparing the nine-month periods, FNCB’s cost of funds decreased 16 basis points to 0.50% in 2016 from 0.66% in 2015. Causing the greatest impact in year-to-date funding costs was a decrease in the cost of borrowed funds, which resulted from a modification of the interest rate on FNCB’s subordinated notes from 9.00% to 4.50% in mid-2015. The tax-equivalent net interest margin for third quarter 2016 was 3.14%, which reflected no change from the second quarter of 2016, and a 7 basis point increase over the margin for the same prior year period. The year-to-date tax-equivalent net interest margin was 3.13% in 2016, an improvement of 20 basis points compared to 2.93% in 2015.

Non-interest income was $1.4 million for both three-month periods ended September 30, 2016 and 2015. Higher net gains on the sale of mortgage loans, net gains on the sale of SBA guaranteed loans and other income were offset by reductions in service charges, loan-related fees and net gains on the sale of other real estate owned. For the nine months ended September 30, 2016, non-interest income totaled $4.8 million, a decrease of $1.5 million, or 24.2%, compared to $6.3 million for the same nine months of 2015. The change resulted primarily from a $1.3 million decrease in net gains on the sale of securities, coupled with a $0.2 million reduction in other income related to legal settlements received in 2015.

For the three months ended September 30, 2016, non-interest expense totaled $6.6 million, an increase of $0.1 million, or 2.2%, from $6.4 million for the same three months of 2015. The increase for the third quarter 2016 was due primarily to advertising expense related to new deposit product offerings. On a year-to-date basis, non-interest expense increased $0.5 million, or 2.5%, to $20.4 million in 2016 from $19.9 million in 2015. The increase in non-interest expense for the nine months ended September 30, 2016 as compared to the same period of 2015 was due primarily to increases in salaries and benefits expenses of $0.8 million due to higher health insurance costs, partially offset by a $0.4 million reduction in occupancy expense.

Asset Quality

FNCB continues to realize an improvement in asset quality as total non-performing loans decreased $0.3 million, or 11.8%, to $2.4 million at September 30, 2016 from $2.7 million at June 30, 2016, and $1.4 million, or 36.2%, from December 31, 2015. The ratio of non-performing loans to total loans was 0.33% at September 30, 2016 compared to 0.37% at June 30, 2016 and 0.52% at December 31, 2015. (At June 30, 2016, the most recent data available, the FDIC average for commercial banks with assets between $1.0 billion and $3.0 billion was 0.79%). The allowance for loan and lease losses as a percentage of gross loans was 1.17% at September 30, 2016, which was unchanged compared to the prior quarter end, and 1.21% at the end of 2015. (The above described FDIC peer group average was 1.22% at June 30, 2016.)

Financial Condition

Total assets increased $31.0 million, or 2.8%, to $1.122 billion at September 30, 2016 from $1.091 billion at December 31, 2015. The change in total assets primarily resulted from an increase of $36.3 million in cash and cash equivalents. Total deposits increased $109.4 million, or 13.3%, to $931.0 million at September 30, 2016 from $821.5 million at year-end 2015. The deposit growth resulted primarily from a cyclical influx of public funds from seasonal tax payments during the third quarter. In addition, deposit gathering initiatives in FNCB’s commercial and governmental banking units, coupled with the new WOW ME product offering also favorably impacted deposit growth. The inflow of cash from deposit growth was used to repay borrowings from the FHLB of Pittsburgh, which declined $77.0 million, or 56.7%, when comparing September 30, 2016 and December 31, 2015. In addition, accrued interest payable decreased $10.9 million, or 97.4%, as FNCB repaid in entirety all accrued interest that had previously been deferred on the subordinated debentures in the first quarter of 2016. Payoffs of several large commercial loan relationships outpaced demand, which resulted in a $4.1 million, or 0.6%, decline in loans, net of net deferred costs and unearned income. Investment securities available for sale increased $9.7 million, or 3.8%.

Total shareholders’ equity increased $10.4 million, or 12.1%, to $96.6 million at September 30, 2016 from $86.2 million at December 31, 2015. The capital improvement resulted primarily from a $6.2 million increase in accumulated other comprehensive income, which resulted from appreciation in the fair value of available-for-sale securities net of the tax impact of the appreciation, coupled with net income for the nine months ended September 30, 2016 of $4.8 million.

At September 30, 2016, FNCB’s total risk-based capital and Tier I leverage ratios were 12.37% and 7.52%, respectively. The respective ratios for the Bank at September 30, 2016 were 13.40% and 9.05%. The ratios well exceeded the 10.00% and 5.00% required to be well capitalized under the prompt corrective action provisions of the Basel III capital framework for U.S. banking organizations. Book value per share increased $0.59 per share, or 11.3%, to $5.81 at September 30, 2016 from $5.22 at December 31, 2015.

Availability of Filings

Copies of FNCB’s most recent Annual Report on Form 10-K and Quarterly Report 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. All of FNCB’s filings with the Securities and Exchange Commission are also available on the Investor Relations page of FNCB’s website, www.fncb.com/investorrelations.

About FNCB Bank:
FNCB Bancorp, Inc. is the bank holding company of FNCB Bank, which provides personal, small business and commercial banking services to individuals and businesses throughout Lackawanna, Luzerne, and Wayne Counties in Northeastern Pennsylvania. The institution was established as a National Banking Association in 1910 as The First National Bank of Dunmore, and had been operating under the name First National Community Bank from 1988 through June 2016. Effective June 30, 2016, the institution changed its name to FNCB Bank upon its conversion from a national charter to a Pennsylvania state charter. For more information about FNCB, visit www.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 and fiscal 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; 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 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 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, 2015.

[The Company provides tabular information as follows]

FNCB Bancorp, Inc.
Selected Financial Data
Sept 30, Jun 30, Mar 31, Dec 31, Sept 30,
2016 2016 2016 2015 2015
Per share data:
Net income (fully diluted) $0.12 $0.10 $0.07 $1.77 $0.14
Cash dividends declared $0.02 $0.02 $0.02 $- $-
Book value $5.81 $5.76 $5.57 $5.22 $3.61
Tangible book value $5.81 $5.75 $5.56 $5.21 $3.60
Market value:
High $6.00 $6.12 $6.90 $5.50 $6.05
Low $4.75 $5.50 $5.11 $5.06 $5.02
Close $5.00 $5.60 $6.12 $5.25 $5.19
Common shares outstanding 16,614,856 16,586,868 16,530,432 16,514,245 16,500,945
Selected ratios:
Annualized return on average assets 0.73% 0.60% 0.42% 10.99% 0.91%
Annualized return on average shareholders' equity 8.46% 7.12% 5.15% 192.68% 16.38%
Tier I leverage ratio 7.52% 7.31% 7.08% 7.27% 6.57%
Total risk-based capital to risk-adjusted assets 12.37% 12.00% 11.81% 11.79% 11.20%
Average shareholders' equity to average total assets 8.63% 8.40% 8.15% 5.70% 5.55%
Yield on earning assets (FTE) 3.58% 3.56% 3.52% 3.56% 3.50%
Cost of funds 0.52% 0.50% 0.48% 0.48% 0.51%
Net interest spread (FTE) 3.06% 3.06% 3.04% 3.08% 2.98%
Net interest margin (FTE) 3.14% 3.14% 3.11% 3.15% 3.07%
Total delinquent loans/total loans 0.72% 0.74% 0.82% 0.84% 1.29%
Allowance for loan and lease losses/total loans 1.17% 1.17% 1.19% 1.20% 1.36%
Non-performing loans/total loans 0.33% 0.37% 0.49% 0.52% 0.93%
Annualized net (recoveries) charge-offs/average loans (0.09%) 0.26% 0.47% 0.02% 0.04%

FNCB Bancorp, Inc.
Year-to-Date Consolidated Statements of Income
Nine Months Ended
Sept 30,
(in thousands, except share data) 2016 2015
Interest income
Interest and fees on loans $21,157 $19,640
Interest and dividends on securities
U.S. government agencies 2,678 3,044
State and political subdivisions, tax-free 30 91
State and political subdivisions, taxable 1,834 447
Other securities 259 331
Total interest and dividends on securities 4,801 3,913
Interest on interest-bearing deposits in other banks 14 42
Total interest income 25,972 23,595
Interest expense
Interest on deposits 2,009 2,003
Interest on borrowed funds
Interest on Federal Home Loan Bank of Pittsburgh advances 472 367
Interest on subordinated debentures 480 1,290
Interest on junior subordinated debentures 180 150
Total interest on borrowed funds 1,132 1,807
Total interest expense 3,141 3,810
Net interest income before provision (credit) for loan and lease losses 22,831 19,785
Provision (credit) for loan and lease losses 858 (340)
Net interest income after provision (credit) for loan and lease losses 21,973 20,125
Non-interest income
Deposit service charges 2,157 2,218
Net gain on the sale of securities 960 2,302
Net gain on the sale of mortgage loans held for sale 238 69
Net gain on the sale of SBA guaranteed loans 51 -
Net gain on the sale of other real estate owned 29 145
Loan-related fees 287 290
Income from bank-owned life insurance 426 415
Other 657 904
Total non-interest income 4,805 6,343
Non-interest expense
Salaries and employee benefits 10,366 9,582
Occupancy expense 1,301 1,665
Equipment expense 1,277 1,234
Data processing expense 1,522 1,420
Regulatory assessments 629 711
Bank shares tax 746 652
Expense of other real estate owned 335 338
Legal expense 285 331
Professional fees 716 780
Insurance expense 384 528
Other operating expenses 2,821 2,636
Total non-interest expense 20,382 19,877
Income before income taxes 6,396 6,591
Income tax expense (benefit) 1,611 (40)
Net income $4,785 $6,631
Income per share
Basic $0.29 $0.40
Diluted $0.29 $0.40
Cash dividends declared per common share $0.06 $-
Weighted average number of shares outstanding:
Basic 16,554,391 16,497,373
Diluted 16,554,391 16,497,373

FNCB Bancorp, Inc.
Quarter-to-Date Consolidated Statements of Income
Three Months Ended
Sept 30, Jun 30, Mar 31, Dec 31, Sept 30,
(in thousands, except share data) 2016 2016 2016 2015 2015
Interest income
Interest and fees on loans $7,156 $7,032 $6,969 $7,032 $6,693
Interest and dividends on securities
U.S. government agencies 848 900 930 992 1,061
State and political subdivisions, tax-free 9 11 10 18 19
State and political subdivisions, taxable 675 624 535 458 324
Other securities 69 94 96 102 92
Total interest and dividends on securities 1,601 1,629 1,571 1,570 1,496
Interest on interest-bearing deposits in other banks 8 2 4 4 10
Total interest income 8,765 8,663 8,544 8,606 8,199
Interest expense
Interest on deposits 704 663 642 628 677
Interest on borrowed funds
Interest on Federal Home Loan Bank of Pittsburgh advances 157 167 148 147 128
Interest on subordinated debentures 162 159 159 160 162
Interest on junior subordinated debentures 62 61 57 56 50
Total interest on borrowed funds 381 387 364 363 340
Total interest expense 1,085 1,050 1,006 991 1,017
Net interest income before (credit) provision for loan and lease losses 7,680 7,613 7,538 7,615 7,182
(Credit) Provision for loan and lease losses (234) 396 696 (1,005) (191)
Net interest income after (credit) provision for loan and lease losses 7,914 7,217 6,842 8,620 7,373
Non-interest income
Deposit service charges 739 717 701 742 799
Net gain (loss) on the sale of securities - 857 103 (6) 4
Net gain on the sale of mortgage loans held for sale 99 71 68 223 13
Net gain on the sale of SBA guaranteed loans 51 - - - -
Net gain (loss) on the sale of other real estate owned 32 2 (5) 17 129
Loan-related fees 85 95 107 152 94
Income from bank-owned life insurance 137 143 146 149 145
Other 237 209 211 180 195
Total non-interest income 1,380 2,094 1,331 1,457 1,379
Non-interest expense
Salaries and employee benefits 3,263 3,589 3,514 4,228 3,240
Occupancy expense 479 329 493 619 500
Equipment expense 429 425 423 423 408
Data processing expense 505 494 523 556 471
Regulatory assessments 199 193 237 239 203
Bank shares tax 253 252 241 53 217
Expense of other real estate owned 95 194 46 62 91
Legal expense 79 86 120 106 80
Professional fees 157 272 287 234 193
Insurance expense 131 125 128 131 128
Legal settlement - - - 777 -
Other operating expenses 963 1,066 792 1,159 884
Total non-interest expense 6,553 7,025 6,804 8,587 6,415
Income before income taxes 2,741 2,286 1,369 1,490 2,337
Income tax expense (benefit) 724 661 226 (27,719) -
Net income $2,017 $1,625 $1,143 $29,209 $2,337
Income per share
Basic $0.12 $0.10 $0.07 $1.77 $0.14
Diluted $0.12 $0.10 $0.07 $1.77 $0.14
Cash dividends declared per common share $0.02 $0.02 $0.02 $- $-
Weighted average number of shares outstanding:
Basic 16,593,811 16,549,169 16,519,759 16,506,294 16,500,945
Diluted 16,593,811 16,549,169 16,519,759 16,506,294 16,500,945

FNCB Bancorp, Inc.
Consolidated Balance Sheets
Sept 30, Jun 30, Mar 31, Dec 31, Sept 30,
(in thousands) 2016 2016 2016 2015 2015
Assets
Cash and cash equivalents:
Cash and due from banks $24,558 $15,847 $16,367 $19,544 $20,631
Interest-bearing deposits in other banks 32,778 1,825 1,847 1,539 10,383
Total cash and cash equivalents 57,336 17,672 18,214 21,083 31,014
Securities available for sale, at fair value 263,475 262,190 263,523 253,773 249,228
Stock in Federal Home Loan Bank of Pittsburgh at cost 2,741 5,219 3,932 6,344 4,298
Loans held for sale 185 563 455 683 4,634
Loans, net of net deferred costs and unearned income 729,662 733,720 728,158 733,716 723,166
Allowance for loan and lease losses (8,490) (8,559) (8,635) (8,790) (9,825)
Net loans 721,172 725,161 719,523 724,926 713,341
Bank premises and equipment, net 10,615 10,793 10,904 11,193 11,258
Accrued interest receivable 2,736 2,511 2,854 2,475 2,618
Intangible assets 14 55 96 137 179
Bank-owned life insurance 29,807 29,670 29,527 29,381 29,232
Other real estate owned 2,065 1,628 1,806 3,154 1,618
Other assets 31,441 32,076 34,181 37,469 7,799
Total assets $1,121,587 $1,087,538 $1,085,015 $1,090,618 $1,055,219
Liabilities
Deposits:
Demand (non-interest-bearing) $157,119 $144,082 $162,882 $154,531 $152,038
Interest-bearing 773,840 691,751 720,243 667,015 700,004
Total deposits 930,959 835,833 883,125 821,546 852,042
Borrowed funds:
Federal Home Loan Bank of Pittsburgh advances 58,837 120,771 74,511 135,802 93,058
Subordinated debentures 14,000 14,000 14,000 14,000 14,000
Junior subordinated debentures 10,310 10,310 10,310 10,310 10,310
Total borrowed funds 83,147 145,081 98,821 160,112 117,368
Accrued interest payable 294 311 333 11,165 11,187
Other liabilities 10,614 10,813 10,695 11,617 14,989
Total liabilities 1,025,014 992,038 992,974 1,004,440 995,586
Shareholders' equity
Preferred stock - - - - -
Common stock 20,768 20,734 20,663 20,643 20,626
Additional paid-in capital 62,381 62,210 62,069 62,059 61,939
Retained earnings (accumulated deficit) 7,506 5,820 4,527 3,714 (25,495)
Accumulated other comprehensive income (loss) 5,918 6,736 4,782 (238) 2,563
Total shareholders' equity 96,573 95,500 92,041 86,178 59,633
Total liabilities and shareholders’ equity $1,121,587 $1,087,538 $1,085,015 $1,090,618 $1,055,219

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) 2016 2016 2016 2015 2015
Interest income
Loans:
Loans - taxable $6,809 $6,674 $6,603 $6,694 $6,371
Loans - tax-free 526 542 555 512 488
Total loans 7,335 7,216 7,158 7,206 6,859
Securities:
Securities, taxable 1,592 1,618 1,561 1,552 1,477
Securities, tax-free 14 17 15 27 29
Total interest and dividends on securities 1,606 1,635 1,576 1,579 1,506
Interest-bearing deposits in other banks 8 2 4 4 10
Total interest income 8,949 8,853 8,738 8,789 8,375
Interest expense
Deposits 704 663 642 628 677
Borrowed funds 381 387 364 363 340
Total interest expense 1,085 1,050 1,006 991 1,017
Net interest income $7,864 $7,803 $7,732 $7,798 $7,358
Average balances
Earning assets:
Loans:
Loans - taxable $688,038 $682,642 $683,198 $685,795 $660,709
Loans - tax-free 47,620 48,131 48,433 43,429 41,746
Total loans 735,658 730,773 731,631 729,224 702,455
Securities:
Securities, taxable 257,431 260,835 256,555 251,108 241,799
Securities, tax-free 905 1,090 1,107 1,713 1,707
Total securities 258,336 261,925 257,662 252,821 243,506
Interest-bearing deposits in other banks 6,448 2,347 3,746 6,797 12,185
Total interest-earning assets 1,000,442 995,045 993,039 988,842 958,146
Non-earning assets 99,010 97,271 101,958 65,633 62,063
Total assets $1,099,452 $1,092,316 $1,094,997 $1,054,475 $1,020,209
Interest-bearing liabilities:
Deposits $737,431 $725,552 $725,369 $702,783 $690,039
Borrowed funds 103,821 117,229 113,386 119,281 105,109
Total interest-bearing liabilities 841,252 842,781 838,755 822,064 795,148
Demand deposits 152,319 146,622 146,994 146,457 143,140
Other liabilities 11,006 11,125 19,967 25,811 25,303
Shareholders' equity 94,875 91,788 89,281 60,143 56,618
Total liabilities and shareholders' equity $1,099,452 $1,092,316 $1,094,997 $1,054,475 $1,020,209
Yield/Cost
Earning assets:
Loans:
Interest and fees on loans - taxable 3.96% 3.91% 3.87% 3.90% 3.86%
Interest and fees on loans - tax-free 4.42% 4.50% 4.58% 4.72% 4.68%
Total loans 3.99% 3.95% 3.91% 3.95% 3.91%
Securities:
Securities, taxable 2.47% 2.48% 2.43% 2.47% 2.44%
Securities, tax-free 6.03% 6.11% 5.48% 6.37% 6.80%
Total securities 2.49% 2.50% 2.45% 2.50% 2.47%
Interest-bearing deposits in other banks 0.50% 0.34% 0.43% 0.24% 0.33%
Total earning assets 3.58% 3.56% 3.52% 3.56% 3.50%
Interest-bearing liabilities:
Interest on deposits 0.38% 0.37% 0.35% 0.36% 0.39%
Interest on borrowed funds 1.47% 1.32% 1.28% 1.22% 1.29%
Total interest-bearing liabilities 0.52% 0.50% 0.48% 0.48% 0.51%
Net interest spread 3.06% 3.06% 3.04% 3.08% 2.98%
Net interest margin 3.14% 3.14% 3.11% 3.15% 3.07%

FNCB Bancorp, Inc.
Asset Quality Data
Sept 30, Jun 30, Mar 31, Dec 31, Sept 30,
(in thousands) 2016 2016 2016 2015 2015
At period end
Non-accrual loans, including non-accruing troubled debt restructured loans (TDRs) $2,416 $2,739 $3,569 $3,788 $6,741
Loans past due 90 days or more and still accruing - - - - -
Total non-performing loans 2,416 2,739 3,569 3,788 6,741
Other real estate owned (OREO) 2,065 1,628 1,806 3,154 1,618
Total non-performing loans and OREO $4,481 $4,367 $5,375 $6,942 $8,359
Accruing TDRs $4,106 $4,043 $4,623 $4,982 $5,065
For the three months ended
Allowance for loan and lease losses
Beginning balance $8,559 $8,635 $8,790 $9,825 $10,328
Loans charged-off 189 709 1,148 198 968
Recoveries of charged-off loans 354 237 297 168 656
Net (recoveries) charge-offs (165) 472 851 30 312
(Credit) Provision for loan and lease losses (234) 396 696 (1,005) (191)
Ending balance $8,490 $8,559 $8,635 $8,790 $9,825


INVESTOR CONTACT: James M. Bone, Jr., CPA Executive Vice President and Chief Financial Officer FNCB Bank (570) 348-6419 james.bone@fncb.com

Source:FNCB Bancorp, Inc.