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FNCB Bancorp, Inc. Announces 10% Increase in Second Quarter 2017 Earnings and 43% Increase in 2017 Year-to-Date Earnings

DUNMORE, Pa., July 28, 2017 (GLOBE NEWSWIRE) -- FNCB Bancorp, Inc. (OTCQX:FNCB), the parent company of Dunmore-based FNCB Bank (the “Bank”), reported net income of $1.792 million, or $0.11 per basic and diluted share, for the second quarter of 2017, an increase of $167 thousand, or 10.3%, compared to net income of $1.625 million, or $0.10 per basic and diluted share, for the same quarter of 2016. Net income for the six months ended June 30, 2017 increased $1.2 million, or 42.9%, to $4.0 million, or $0.24 per basic and diluted share, from $2.8 million, or $0.17 per basic and diluted share, for the comparable six-month period of 2016. Year-to-date earnings were impacted favorably by a reduction in the provision for loan and lease losses, coupled with higher net interest income and non-interest income. Annualized return on average assets was 0.65% and 0.71%, respectively, for the three and six months ended June 30, 2017, compared to 0.60% and 0.51%, for the respective periods of 2016. Annualized return on average equity was 7.60% and 8.66%, respectively, for the three- and six-month periods ended June 30, 2017, compared to 7.12% and 6.15%, respectively, for the comparable periods in 2016. Dividends declared and paid were $0.03 for the second quarter of 2017 and $0.06 per share for the year-to-date period of 2017, which represented a 50.0% increase compared to $0.02 per share and $0.04 per share, respectively, for the three and six months ended June 30, 2016. Year-to-date dividends declared and paid represented a 1.5% annualized return to shareholders based on the closing stock price of $7.80 per share at June 30, 2017.

Performance Highlights:

  • 5.2% increase in tax-equivalent net interest income, comparing the second quarters of 2017 and 2016;
  • Tax-equivalent net interest margin increases 14 basis points comparing the second and first quarters of 2017;
  • Year over year growth in total deposits of $96.9 million, or 11.6%;
  • Closing stock price increases $2.20 per share, or 39.3%, year over year;
  • Tier I leverage ratio improved 68 basis points, or 9.3% comparing June 30, 2017 and 2016;
  • Implemented comprehensive branch network improvement program.

“FNCB posted a profitable second quarter fueled by higher net interest and non-interest income and stabilized non-interest expense levels,” stated Gerard A. Champi, President and Chief Executive Officer. “In addition, commercial and retail sales initiatives in 2017, as well as our newly opened loan production office in the Lehigh Valley, have led to strong growth in both loans and deposits in the second quarter of 2017,” continued Mr. Champi. “During the second quarter, we announced a comprehensive branch network improvement program focused on strengthening, better positioning and expanding market coverage, while creating greater efficiency within our organization. As part of this program, we consolidated two branches located in Honesdale, Wayne County, Pennsylvania during the second quarter. As this program continues to unfold over the next two years, we are committed to delivering an unsurpassed level of service to our customers and community, as well as improving the overall customer experience throughout our branch network,” concluded Mr. Champi.

Summary Results for the Three and Six Months Ended June 30, 2017

Tax-equivalent net interest income was $8.2 million for the second quarter, an increase of $0.4 million, or 5.2%, from $7.8 million for the same quarter of 2016. Similarly, tax-equivalent net interest income for the six months ended June 30, 2017 increased $0.8 million, or 5.2% compared to $16.3 million compared to $15.5 million for the same six-month period of 2016. The improvement for both the quarter and year-to-date periods primarily reflected higher yields earned on and growth in average earning assets, coupled with reduced reliance on borrowed funds. Tax-equivalent earning asset yields improved 10 basis points for the second quarter and 2 basis points for the six months ended June 30, 2017 over the same periods of 2016. Average earning assets grew $28.5 million, or 2.9%, and $43.2 million, or 4.3%, comparing the quarter and year-to-date periods ended June 30, 2017 and 2016, respectively. Strong growth in lower-costing interest-bearing demand and savings accounts resulted in reduced reliance on higher-costing Federal Home Loan Bank of Pittsburgh (“FHLB”) advances, which provided for relatively stable funding costs despite upward movements in short-term interest rates. Comparing the three months ended June 30, 2017 and 2016, average interest-bearing deposits increased $58.1 million, or 8.0%, while average borrowed funds decreased $44.9 million, or 38.3%. For the six months ended June 30, interest-bearing deposits averaged $795.8 million in 2017, an increase of $70.3 million, or 9.7%, compared to $725.5 million in 2016. Conversely, borrowed funds averaged $75.3 million for the six months ended June 30, 2017, a decrease of $40.0 million, or 34.7%, from $115.3 million averaged for the same period of 2016. Comparing the three months and six months ended June 30, 2017 and 2016, FNCB’s cost of funds increased only 3 basis points and 1 basis point, respectively. The tax-equivalent net interest margin for second quarter 2017 was 3.21%, a 14-basis point improvement from the first quarter of 2017, and 7 basis points higher than the second quarter of 2016.

Non-interest income totaled $2.0 million for the three months ended June 30, 2017, compared to $2.1 million for the comparable period of 2016. For the six months ended June 30, 2017, non-interest income amounted to $3.6 million, an increase of $0.2 million, or 4.9%, compared to $3.4 million for the same period of 2016. The year-to-date improvement resulted primarily from increases in net gains realized on the sales of other real estate owned, other repossessed assets and Small Business Administration guaranteed loans.

For the three months ended June 30, 2017, non-interest expense totaled $6.9 million, a decrease of $0.1 million, or 1.2%, from $7.0 million for the same three months of 2016. Comparing the six months ended June 30, 2017 and 2016, non-interest expense levels remained stable, increasing only $39 thousand, or 0.3%. Fluctuations within non-interest expense for the year-to-date periods included higher occupancy and equipment expenses associated with long-term delivery system planning and valuation adjustments for properties held in other real estate owned. These increases were almost entirely mitigated by reductions in salaries and employee benefits, legal and professional fees, and regulatory assessments.

Asset Quality

Total non-performing loans increased $1.8 million to $3.7 million at June 30, 2017 from $1.9 million at March 31, 2017 and $0.9 million from $2.7 million at June 30, 2016. The increase was primarily attributable to one commercial relationship that was modified under a troubled debt restructuring and placed on nonaccrual status. The ratio of non-performing loans to total loans was 0.50% at June 30, 2017, compared to 0.27% at March 31, 2017 and 0.37% at June 30, 2016. Despite the increase in non-performing loans, FNCB’s asset quality compared favorably to the peer average of 0.65% at March 31, 2017, the most recent data reported for FDIC-insured banks having assets between $1.0 billion and $3.0 billion. The allowance for loan and lease losses as a percentage of gross loans was 1.16% at June 30, 2017 and March 31, 2017 versus 1.17% at June 30, 2016.

Financial Condition

Total assets decreased $87.9 million, or 7.4%, to $1.107 billion at June 30, 2017 from $1.195 billion at December 31, 2016. The change in total assets primarily reflected a $82.4 million, or 8.1%, reduction in total deposits, which was the primary factor leading to a corresponding decrease of $86.3 million in cash and cash equivalents. Investment securities increased $5.0 million, to $277.6 million at June 30, 2017 from $272.7 million at December 31, 2016. Loans, net of unearned income, which decreased $15.8 million from $734.3 million at December 31, 2016 to $718.5 million at March 31, 2017, rebounded $14.7 million to $733.1 million at June 30, 2017 due to commercial and retail sales initiatives. The decrease in total deposits was primarily attributable to cyclical net outflows of public funds, coupled with the anticipated exit of short-term funds received at the end of 2016 related to the sale of a municipal utility company. Despite the decrease in deposits from year-end 2016, totaled deposits increased $9.4 million from $923.4 million at March 31, 2017 to $732.8 million at June 30, 2017. In addition, total deposits increased $96.9 million, or 11.6% to $932.7 million at the end of the second quarter of 2017 compared to $835.8 million at June 30, 2016. The higher levels of deposits allowed FNCB to reduce FHLB of Pittsburgh advances by $13.6 million to $44.9 million at June 30, 2017 from $58.5 million at December 31, 2016.

Total shareholders’ equity increased $6.4 million, or 7.1%, to $96.5 million at June 30, 2017 from $90.1 million at December 31, 2016. The capital improvement resulted primarily from net income of $4.0 million, coupled with a $2.7 million increase in the accumulated other comprehensive income, from the appreciation in the fair value of available-for-sale securities, net of tax effects.

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, which provides personal, small business and commercial banking services to individuals and businesses throughout Northeastern Pennsylvania through its 18 branch offices and Allentown-based Limited Purpose Banking Office. 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 BauerFinancial 5-Star rated 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, 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; 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 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, 2016.

[FNCB provides tabular information as follows]

FNCB Bancorp, Inc.
Selected Financial Data
Jun 30, Mar 31, Dec 31, Sept 30, Jun 30,
2017 2017 2016 2016 2016
Per share data:
Net income (fully diluted) $0.11 $0.13 $0.09 $0.12 $0.10
Cash dividends declared $0.03 $0.03 $0.03 $0.02 $0.02
Book value $5.76 $5.58 $5.42 $5.81 $5.76
Tangible book value $5.76 $5.58 $5.42 $5.81 $5.75
Market value:
High $8.13 $7.50 $6.30 $6.00 $6.12
Low $6.35 $6.05 $5.00 $4.75 $5.50
Close $7.80 $6.37 $6.05 $5.00 $5.60
Common shares outstanding 16,757,963 16,692,314 16,645,845 16,614,856 16,586,868
Selected ratios:
Annualized return on average assets 0.65% 0.78% 0.55% 0.73% 0.60%
Annualized return on average shareholders' equity 7.60% 9.77% 6.43% 8.46% 7.12%
Efficiency ratio 72.81% 74.08% 77.25% 70.96% 77.78%
Tier I leverage ratio 7.99% 7.55% 7.53% 7.52% 7.31%
Total risk-based capital to risk-adjusted assets 12.53% 12.38% 12.06% 12.37% 12.00%
Average shareholders' equity to average total assets 8.49% 7.97% 8.50% 8.63% 8.40%
Yield on earning assets (FTE) 3.66% 3.47% 3.53% 3.58% 3.56%
Cost of funds 0.53% 0.48% 0.49% 0.52% 0.50%
Net interest spread (FTE) 3.13% 2.99% 3.03% 3.06% 3.06%
Net interest margin (FTE) 3.21% 3.07% 3.11% 3.14% 3.14%
Total delinquent loans/total loans 0.94% 0.75% 0.81% 0.72% 0.74%
Allowance for loan and lease losses/total loans 1.16% 1.16% 1.15% 1.17% 1.17%
Non-performing loans/total loans 0.50% 0.27% 0.31% 0.33% 0.37%
Annualized net (recoveries) charge-offs/average loans 0.14% (0.20%) 0.20% (0.09%) 0.26%

FNCB Bancorp, Inc.
Year-to-Date Consolidated Statements of Income
Six Months Ended
Jun 30,
(in thousands, except share data) 2017 2016
Interest income
Interest and fees on loans $14,288 $14,001
Interest and dividends on securities
U.S. government agencies 1,750 1,830
State and political subdivisions, tax-free 35 21
State and political subdivisions, taxable 1,800 1,159
Other securities 127 190
Total interest and dividends on securities 3,712 3,200
Interest on interest-bearing deposits in other banks 122 6
Total interest income
18,122 17,207
Interest expense
Interest on deposits 1,570 1,305
Interest on borrowed funds
Interest on Federal Home Loan Bank of Pittsburgh advances 261 315
Interest on subordinated debentures 226 318
Interest on junior subordinated debentures 142 118
Total interest on borrowed funds 629 751
Total interest expense
2,199 2,056
Net interest income before (credit) provision for loan and lease losses 15,923 15,151
(Credit) provision for loan and lease losses (57) 1,092
Net interest income after (credit) provision for loan and lease losses 15,980 14,059
Non-interest income
Deposit service charges 1,419 1,418
Net gain on the sale of securities 971 960
Net gain on the sale of mortgage loans held for sale 135 139
Net gain on the sale of SBA guaranteed loans 56 -
Net gain on the sale of other repossessed assets 47 -
Net gain (loss) on the sale of other real estate owned 57 (3)
Loan-related fees 156 202
Income from bank-owned life insurance 270 289
Other
482 420
Total non-interest income
3,593 3,425
Non-interest expense
Salaries and employee benefits 6,822 7,103
Occupancy expense 1,173 822
Equipment expense 906 848
Data processing expense 996 1,017
Regulatory assessments 337 430
Bank shares tax 510 493
Expense of other real estate owned 328 240
Legal expense 92 206
Professional fees 456 559
Insurance expense 253 253
Other operating expenses 1,995 1,858
Total non-interest expense
13,868 13,829
Income before income taxes 5,705 3,655
Income tax expense 1,716 887
Net income $3,989 $2,768
Income per share
Basic $0.24 $0.17
Diluted $0.24 $0.17
Cash dividends declared per common share $0.06 $0.04
Weighted average number of shares outstanding:
Basic 16,687,389 16,534,464
Diluted 16,704,056 16,537,108

FNCB Bancorp, Inc.
Quarter-to-Date Consolidated Statements of Income
Three Months Ended
Jun 30, Mar 31, Dec 31, Sept 30, Jun 30,
(in thousands, except share data) 2017 2017 2016 2016 2016
Interest income
Interest and fees on loans $7,250 $7,038 $7,066 $7,156 $7,032
Interest and dividends on securities
U.S. government agencies 850 900 879 848 900
State and political subdivisions, tax-free 12 23 16 9 11
State and political subdivisions, taxable 978 822 740 675 624
Other securities 61 66 56 69 94
Total interest and dividends on securities 1,901 1,811 1,691 1,601 1,629
Interest on interest-bearing deposits in other banks 32 90 19 8 2
Total interest income 9,183 8,939 8,776 8,765 8,663
Interest expense
Interest on deposits 826 744 721 704 663
Interest on borrowed funds
Interest on Federal Home Loan Bank of Pittsburgh advances 130 131 123 157 167
Interest on subordinated debentures 114 112 145 162 159
Interest on junior subordinated debentures 73 69 67 62 61
Total interest on borrowed funds 317 312 335 381 387
Total interest expense 1,143 1,056 1,056 1,085 1,050
Net interest income before provision (credit) for loan and lease losses 8,040 7,883 7,720 7,680 7,613
Provision (credit) for loan and lease losses 421 (478) 295 (234) 396
Net interest income after provision (credit) for loan and lease losses 7,619 8,361 7,425 7,914 7,217
Non-interest income
Deposit service charges 728 691 735 739 717
Net gain on the sale of securities 693 278 - - 857
Net gain on the sale of mortgage loans held for sale 110 25 102 99 71
Net (loss) gain on the sale of other repossessed assets (10) 57 - - -
Net gain on the sale of SBA guaranteed loans 56 - - 51 -
Net gain on the sale of other real estate owned 6 51 20 32 2
Loan-related fees 65 91 152 85 95
Income from bank-owned life insurance 135 135 126 137 143
Other 240 242 263 237 209
Total non-interest income 2,023 1,570 1,398 1,380 2,094
Non-interest expense
Salaries and employee benefits 3,298 3,524 3,954 3,263 3,589
Occupancy expense 586 587 476 479 329
Equipment expense 446 460 455 429 425
Data processing expense 509 487 475 505 494
Regulatory assessments 164 173 100 199 193
Bank shares tax 252 258 90 253 252
Expense of other real estate owned 288 40 74 95 194
Legal expense 24 68 77 79 86
Professional fees 180 276 245 157 272
Insurance expense 128 125 132 131 125
Other operating expenses 1,065 930 1,085 963 1,066
Total non-interest expense 6,940 6,928 7,163 6,553 7,025
Income before income taxes 2,702 3,003 1,660 2,741 2,286
Income tax expense 910 806 136 724 661
Net income $1,792 $2,197 $1,524 $2,017 $1,625
Income per share
Basic $0.11 $0.13 $0.09 $0.12 $0.10
Diluted $0.11 $0.13 $0.09 $0.12 $0.10
Cash dividends declared per common share $0.03 $0.03 $0.03 $0.02 $0.02
Weighted average number of shares outstanding:
Basic 16,716,899 16,657,551 16,621,467 16,593,811 16,549,169
Diluted 16,736,995 16,670,788 16,621,467 16,593,811 16,553,636

FNCB Bancorp, Inc.
Consolidated Balance Sheets
Jun 30, Mar 31, Dec 31, Sept 30, Jun 30,
(in thousands) 2017 2017 2016 2016 2016
Assets
Cash and cash equivalents:
Cash and due from banks $24,169 $23,571 $20,562 $24,558 $15,847
Interest-bearing deposits in other banks 1,991 3,154 91,883 32,778 1,825
Total cash and cash equivalents 26,160 26,725 112,445 57,336 17,672
Securities available for sale, at fair value 277,618 284,965 272,676 263,475 262,190
Stock in Federal Home Loan Bank of Pittsburgh at cost 2,282 2,678 3,311 2,741 5,219
Loans held for sale 617 563 596 185 563
Loans, net of net deferred costs and unearned income 733,141 718,450 734,279 729,662 733,720
Allowance for loan and lease losses (8,469) (8,306) (8,419) (8,490) (8,559)
Net loans 724,672 710,144 725,860 721,172 725,161
Bank premises and equipment, net 10,715 10,914 10,784 10,615 10,793
Accrued interest receivable 2,784 2,950 2,757 2,736 2,511
Bank-owned life insurance 30,203 30,068 29,933 29,807 29,670
Other real estate owned 1,183 1,352 2,048 2,065 1,628
Other assets 31,226 33,526 34,965 31,455 32,131
Total assets $1,107,460 $1,103,885 $1,195,375 $1,121,587 $1,087,538
Liabilities
Deposits:
Demand (non-interest-bearing) $147,878 $156,901 $173,702 $157,119 $144,082
Interest-bearing 784,872 766,525 841,437 773,840 691,751
Total deposits 932,750 923,426 1,015,139 930,959 835,833
Borrowed funds:
Federal Home Loan Bank of Pittsburgh advances 44,903 56,632 58,537 58,837 120,771
Subordinated debentures 10,000 10,000 10,000 14,000 14,000
Junior subordinated debentures 10,310 10,310 10,310 10,310 10,310
Total borrowed funds 65,213 76,942 78,847 83,147 145,081
Accrued interest payable 235 225 242 294 311
Other liabilities 12,797 10,107 11,000 10,614 10,813
Total liabilities 1,010,995 1,010,700 1,105,228 1,025,014 992,038
Shareholders' equity
Preferred stock - - - - -
Common stock 20,947 20,865 20,807 20,768 20,734
Additional paid-in capital 63,076 62,841 62,593 62,381 62,210
Retained earnings 11,517 10,228 8,531 7,506 5,820
Accumulated other comprehensive income (loss) 925 (749) (1,784) 5,918 6,736
Total shareholders' equity 96,465 93,185 90,147 96,573 95,500
Total liabilities and shareholders’ equity $1,107,460 $1,103,885 $1,195,375 $1,121,587 $1,087,538

FNCB Bancorp, Inc.
Summary Tax-equivalent Net Interest Income
Three Months Ended
Jun 30, Mar 31, Dec 31, Sept 30, Jun 30,
(dollars in thousands) 2017 2017 2016 2016 2016
Interest income
Loans:
Loans - taxable $6,932 $6,701 $6,767 $6,809 $6,674
Loans - tax-free 482 511 453 526 542
Total loans 7,414 7,212 7,220 7,335 7,216
Securities:
Securities, taxable 1,889 1,788 1,675 1,592 1,618
Securities, tax-free 18 35 24 14 17
Total interest and dividends on securities 1,907 1,823 1,699 1,606 1,635
Interest-bearing deposits in other banks 32 90 19 8 2
Total interest income 9,353 9,125 8,938 8,949 8,853
Interest expense
Deposits 826 744 721 704 663
Borrowed funds 317 312 335 381 387
1,143 1,056 1,056 1,085 1,050
Net interest income $8,210 $8,069 $7,882 $7,864 $7,803
Average balances
Earning assets:
Loans:
Loans - taxable $685,426 $683,518 $687,225 $688,038 $682,642
Loans - tax-free 40,190 43,822 41,081 47,620 48,131
Total loans 725,616 727,340 728,306 735,658 730,773
Securities:
Securities, taxable 284,133 281,712 267,634 257,431 260,835
Securities, tax-free 1,105 2,571 1,664 905 1,090
Total securities 285,238 284,283 269,298 258,336 261,925
Interest-bearing deposits in other banks 12,676 39,520 15,727 6,448 2,347
Total interest-earning assets 1,023,530 1,051,143 1,013,331 1,000,442 995,045
Non-earning assets 90,672 92,368 95,322 99,010 97,271
Total assets $1,114,202 $1,143,511 $1,108,653 $1,099,452 $1,092,316
Interest-bearing liabilities:
Deposits $783,672 $807,981 $775,565 $737,431 $725,552
Borrowed funds 72,347 78,306 78,780 103,821 117,229
Total interest-bearing liabilities 856,019 886,287 854,345 841,252 842,781
Demand deposits 152,974 155,010 149,008 152,319 146,622
Other liabilities 10,633 11,045 11,029 11,006 11,125
Shareholders' equity 94,576 91,169 94,271 94,875 91,788
Total liabilities and shareholders' equity $1,114,202 $1,143,511 $1,108,653 $1,099,452 $1,092,316
Yield/Cost
Earning assets:
Loans:
Interest and fees on loans - taxable 4.05% 3.92% 3.94% 3.96% 3.91%
Interest and fees on loans - tax-free 4.80% 4.66% 4.41% 4.42% 4.50%
Total loans 4.09% 3.97% 3.97% 3.99% 3.95%
Securities:
Securities, taxable 2.66% 2.54% 2.50% 2.47% 2.48%
Securities, tax-free 6.51% 5.42% 5.83% 6.03% 6.11%
Total securities 2.67% 2.56% 2.52% 2.49% 2.50%
Interest-bearing deposits in other banks 1.01% 0.91% 0.48% 0.50% 0.34%
Total earning assets 3.66% 3.47% 3.53% 3.58% 3.56%
Interest-bearing liabilities:
Interest on deposits 0.42% 0.37% 0.37% 0.38% 0.37%
Interest on borrowed funds 1.75% 1.59% 1.70% 1.47% 1.32%
Total interest-bearing liabilities 0.53% 0.48% 0.49% 0.52% 0.50%
Net interest spread 3.13% 2.99% 3.03% 3.06% 3.06%
Net interest margin 3.21% 3.07% 3.11% 3.14% 3.14%

FNCB Bancorp, Inc.
Asset Quality Data
June 30, Mar 31, Dec 31, Sept 30, Jun 30,
(in thousands) 2017 2017 2016 2016 2016
At period end
Non-accrual loans, including non-accruing troubled debt restructured loans (TDRs) $3,681 $1,922 $2,234 $2,416 $2,739
Loans past due 90 days or more and still accruing - - - - -
Total non-performing loans 3,681 1,922 2,234 2,416 2,739
Other real estate owned (OREO) 1,183 1,352 2,048 2,065 1,628
Other non-performing assets 1,900 2,006 2,160 260 -
Total non-performing assets $6,764 $5,280 $6,442 $4,741 $4,367
Accruing TDRs $9,306 $8,775 $4,176 $4,106 $4,043
For the three months ended
Allowance for loan and lease losses
Beginning balance $8,306 $8,419 $8,490 $8,559 $8,635
Loans charged-off 465 297 572 189 709
Recoveries of charged-off loans 207 662 206 354 237
Net charge-offs (recoveries) 258 (365) 366 (165) 472
Provision (credit) for loan and lease losses 421 (478) 295 (234) 396
Ending balance $8,469 $8,306 $8,419 $8,490 $8,559


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.